First Look

First Look summarizes new working papers, case studies, and publications produced by Harvard Business School faculty. Readers receive early knowledge of cutting-edge ideas before they enter the mainstream of business practice. For complete details on faculty research, see our Working Papers section.

April 10

A slice of the apple market

Many time-crunched consumers prefer not to be bothered by the nuisance of cutting up food. Hence, there's a market for pre-sliced bread, cheese, and even apples—thanks to modern techniques that prevent them from turning brown too soon. However, some apples hold up to slicing better than others. "New England Apple Slices," a new case by Deishin Lee and James Weber, follows the path of an industry leader as he looks at whether it makes sense to grow apples that are meant especially for slicing, and what else it will take to develop a sliced-apple market in New England. The case provides a fruitful way to teach students about starting a supply chain.

Entrepreneurship during civil unrest

In evaluating the factors that help a firm to thrive, strategy theorists often take for granted that the firm is located in a stable, predictable place. Yet, many nations around the world are plagued by political unrest that directly affects the survival of nascent companies. Using a sample of 730 startups in Colombia from 1997 to 2001, Shon Hiatt and Wesley Sine explore this issue in a new working paper, Clear and Present Danger: Planning and New Venture Survival Amid Political and Civil Violence. They find that political and civil violence increases the benefits of incremental planning but decreases the benefits of comprehensive planning.

You want fewer fries with that?

Fast-food restaurant denizens are all-too familiar with the concept of "supersizing," in which customers are offered the opportunity to increase the size of a meal for a small price increase. An article in the February issue of Health Affairs describes a field experiment in which servers offered the opposite: the opportunity to downsize portions of several starchy side dishes. "We consistently found that 14-33 percent of customers accepted the downsizing offer, and they did so whether or not they were given a nominal twenty-five-cent discount," the researchers write. Read "Inviting Consumers to Downsize Fast-Food Portions Significantly Reduces Calorie Consumption" by Janet Schwartz, Jason Riis, Brian Elbel, and Dan Ariely.

 

Publications

How Will You Measure Your Life?

Abstract

In 2010 world-renowned innovation expert Clayton M. Christensen gave a powerful speech to the Harvard Business School's graduating class. Drawing upon his business research, he offered a series of guidelines for finding meaning and happiness in life. He used examples from his own experiences to explain how high achievers can all too often fall into traps that lead to unhappiness.

The speech was memorable not only because it was deeply revealing but also because it came at a time of intense personal reflection: Christensen had just overcome the same type of cancer that had taken his father's life. As Christensen struggled with the disease, the question "How do you measure your life?" became more urgent and poignant, and he began to share his insights more widely with family, friends, and students.

In this groundbreaking book, Christensen puts forth a series of questions: How can I be sure that I'll find satisfaction in my career? How can I be sure that my personal relationships become enduring sources of happiness? How can I avoid compromising my integrity—and stay out of jail? Using lessons from some of the world's greatest businesses, he provides incredible insights into these challenging questions.

How Will You Measure Your Life? is full of inspiration and wisdom and will help students, midcareer professionals, and parents alike forge their own paths to fulfillment.

Publisher's Link: http://www.harpercollins.com/books/How-Will-You-Measure-Your-Life-Karen-Dillon?isbn=9780062102416&HCHP=TB_How+Will+You+Measure+Your+Life

Retail Doesn't Cross Borders: Here's Why and What to Do about It

Abstract

Most companies assume that the easiest way to grow is by investing overseas and that the developing world offers the best opportunities for boosting revenues and profits today. However, success abroad varies widely, and research shows that it's often tough to increase profits by investing abroad. A new study of the grocery retail industry reveals that with a few exceptions globalization's benefits have not accrued to retailers. Local retailers dominate most countries, and international players are absent from the largest retail markets. Moreover, every retailer that has ventured overseas has failed as often as it has succeeded. On average, the extent of internationalization doesn't have a significant effect on either retailers' revenue growth rates or profit margins. Rather, it's the home market's growth that is the primary driver of profit margins and sales growth. A few retailers have succeeded in going global by developing strategies that apply four retail-specific rules for globalization. Rule 1: The home market is the linchpin. Retailers can generate the resources they need to go global by applying innovative growth strategies at home. Rule 2: Always bring something new to market. Without an element of novelty, it will be difficult for retailers to overtake entrenched rivals. Rule 3: Differentiation is more important than synergies. Leveraging synergies globally and allowing each country unit to adjust to local needs is a critical balancing act. Rule 4: Timing is critical. Retailers would do well to stop planting flags and focus instead on a limited set of opportunities where they can establish operations of scale.

Read the article: http://hbr.org/2012/04/retail-doesnt-cross-borders-heres-why-and-what-to-do-about-it/ar/1

Teamwork on the Fly

Abstract

In a fast-paced and ever-changing business environment, traditional teams aren't always practical. Instead, companies increasingly employ teaming: gathering experts in temporary groups to solve problems they may be encountering for the first and only time. This flexible approach was essential to the completion of the Water Cube, the building that hosted swimming and diving events during the Beijing 2008 Olympic Games, and to the 2010 rescue of 33 Chilean miners. More and more people in nearly every industry now work on teams that vary in duration and have constantly shifting membership. Teaming presents technical and interpersonal challenges: people must get up to speed quickly on new topics and learn to work with others from different functions, divisions, and cultures. Several project management principles-scoping out the challenge, structuring the boundaries, and sorting tasks for execution-help leaders facilitate effective teaming. Leaders can also foster cross-boundary collaboration by emphasizing purpose, building psychological safety, and embracing failure and conflict. Individuals who learn to team well acquire knowledge, skills, and networks. Organizations learn to solve complex, cross-disciplinary problems, build stronger and more unified cultures, deliver a wide variety of products and services, and anticipate and manage unexpected events. Teaming helps companies and individuals execute and learn at the same time.

Read the article: http://hbr.org/2012/04/teamwork-on-the-fly/ar/1

Coming Through When It Matters Most

Abstract

All teams would like to think they do their best work when the stakes are highest-when the company's future or their own rests on the outcome of their projects. But too often something else happens. In extensive studies of teams at professional service firms, I have seen the same pattern emerge over and over: teams become increasingly concerned with the risks of failure rather than the requirements of excellence. As a result, they revert to safe, standard approaches instead of delivering original solutions tailored to clients' needs. I have named this phenomenon "the performance pressure paradox." Here's how it develops: as pressure mounts, team members start driving toward consensus in ways that shut out vital information. Without even realizing it, they give more weight to shared knowledge and dismiss specialized expertise, such as insights into the client's technologies, culture, and aspirations. The more generically inclined the team becomes, the more concerned the client grows, which turns up the pressure and pushes the team even further down the generic road. But forewarned is forearmed. By measuring each person's contribution deliberately, ruthlessly insisting that no one's contribution be marginalized, and framing new information within familiar contexts, teams can escape the performance pressure paradox and keep doing their best work when it matters most.

Book: http://hbr.org/2012/04/coming-through-when-it-matters-most/ar/1

Relational Contracts and Organizational Capabilities

Abstract

A large literature identifies unique organizational capabilities as a potent source of competitive advantage, yet our knowledge of why capabilities fail to diffuse more rapidly-particularly in situations in which competitors apparently have strong incentives to adopt them and a well-developed understanding of how they work-remains incomplete. In this paper, we suggest that competitively significant capabilities often rest on managerial practices that in turn rely on relational contracts (i.e., informal agreements sustained by the shadow of the future). We argue that one of the reasons these practices may be difficult to copy is that effective relational contracts must solve the twin problems of credibility and clarity and that although credibility might, in principle, be instantly acquired, clarity may take time to develop and may interact with credibility in complex ways so that relational contracts may often be difficult to build.

Vicarious Dishonesty: When Psychological Closeness Creates Distance from One's Moral Compass

Abstract

In four studies employing multiple manipulations of psychological closeness, we found that feeling connected to another individual who engages in selfish or dishonest behavior leads people to vicariously justify the actions of this individual and to behave more selfishly and less ethically themselves. We also establish the mechanism explaining this effect: when participants felt psychologically close to someone who had behaved selfishly, they were more likely to consider the behavior to be less shame worthy and also less unethical, and these judgments led them to act more unethically themselves. These vicarious effects were moderated by whether the miscreant was identified with a photograph and by the type of behavior. Psychological closeness also produced both vicarious generosity and selfishness, depending on the behavior of the person to whom participants felt psychologically close. Finally, we found that psychological closeness led to greater moral disengagement. These findings suggest an irony of psychological closeness: it can create distance from one's own moral compass.

How Many Direct Reports?

Abstract

If senior executives are feeling ever more pressed for time, why would they add more to their plates? It might sound counterintuitive, but research by Booz & Company's Gary L. Neilson and me shows that over the past 20 years the CEO's average span of control, measured by the number of direct reports, has doubled. It stands at almost 10 today. This gives fresh relevance to a perennial question for senior leaders: Just how much should they take on? We suggest five areas to consider: Where are you in the senior executive life cycle? How much cross-organization collaboration is required? How much time do you spend on activities outside your direct span of control? What's the scope of your role? What's the best mix of roles for your team? A diagnostic tool provides guidance for leaders considering these questions and can help them estimate their optimal span of control. The issues explored are ones many senior executives-not just CEOs-should revisit throughout their careers. The best leaders stay mindful of the evolving demands of their job and continually tweak their team as they go.

Read the article: http://hbr.org/2012/04/how-many-direct-reports/ar/1

Celebrate Innovation, No Matter Where It Occurs

Abstract

The author offers opinions on technological innovations and innovations in business. It is argued that the country of origin of a technological innovation is less economically important than the ability of a society to capitalize on that innovation and convert it into profitable business opportunities. Corporations with superior marketing and distribution abilities are seen as best able to exploit technological innovations.

Read the article: http://hbr.org/2012/04/celebrate-innovation-no-matter-where-it-occurs/ar/1

Inviting Consumers to Downsize Fast-Food Portions Significantly Reduces Calorie Consumption

Abstract

Policies that mandate calorie labeling in fast-food and chain restaurants have had little or no observable impact on calorie consumption to date. In three field experiments, we tested an alternative approach: activating consumers' self-control by having servers ask customers if they wanted to downsize portions of three starchy side dishes at a Chinese fast-food restaurant. We consistently found that 14-33% of customers accepted the downsizing offer, and they did so whether or not they were given a nominal twenty-five-cent discount. Overall, those who accepted smaller portions did not compensate by ordering more calories in their entrées, and the total calories served to them were, on average, reduced by more than 200. We also found that accepting the downsizing offer did not change the amount of uneaten food left at the end of the meal, so the calorie savings during purchasing translated into calorie savings during consumption. Labeling the calorie content of food during one of the experiments had no measurable impact on ordering behavior. If anything, the downsizing offer was less effective in changing customers' ordering patterns with the calorie labeling present. These findings highlight the potential importance of portion control interventions that specifically activate consumers' self-control.

Environmental Federalism in the European Union and the United States

Abstract

The United States (U.S.) and the European Union (EU) are federal systems in which the responsibility for environmental policy-making is divided or shared between the central government and the (member) states. The attribution of decision-making power has important policy implications. This chapter compares the role of central and local authorities in the U.S. and the EU in formulating environmental regulations in three areas: automotive emissions for health-related (criteria) pollutants, packaging waste, and global climate change. Automotive emissions are relatively centralised in both political systems. In the cases of packaging waste and global climate change, regulatory policy-making is shared in the EU but is primarily the responsibility of local governments in the U.S. Thus, in some important areas, regulatory policy-making is more centralised in the EU. The most important role local governments play in the regulatory process is to help diffuse stringent local standards through more centralised regulations, a dynamic that has recently become more important in the EU than in the U.S.

Book: http://www.e-elgar.com/bookentry_main.lasso?id=14063

 

Working Papers

Expertise Dissensus: A Multi-level Model of Teams' Differing Perceptions about Member Expertise

Abstract

Why do some teams fail to convert members' knowledge into valued outcomes? We propose that members' differing perceptions of each other's levels of expertise is a critical factor. To capture this phenomenon, we introduce the concept of expertise dissensus, a team property that reflects the variance in team members' perceptions of one another's levels of expertise. We argue that it matters how team members perceive all others' expertise-not just how they view the most expert team member-and develop and test a multi-level model to explain how expertise dissensus affects team processes and outcomes. We further advance theory by investigating the effects of expertise dissensus on all dimensions of team effectiveness: team performance, team viability, and individual member development (Hackman, 1987).

Download the paper: http://www.hbs.edu/research/pdf/12-070.pdf

Clear and Present Danger: Planning and New Venture Survival Amid Political and Civil Violence

Abstract

Although entrepreneurs constitute a key economic driving force for many emerging economies, they often face unstable environments due to the failure of governments to maintain civil and political order. Yet, we know very little about how environments characterized by weak institutions and high levels of political and civil violence directly affect new venture survival. Moreover, it is unclear whether standard theories about organizational strategy, such as planning, hold true in such environments. Building upon the institution-based view of strategy and past research on planning, we explore these issues using a sample of 730 new ventures in Colombia from 1997 to 2001. We find that political and civil violence decreases firm survival, increases the benefits of incremental planning, and decreases the benefits of comprehensive planning.

Download the paper: http://www.hbs.edu/research/pdf/12-086.pdf

 

Cases & Course Materials

A Note on Water

Robert G. Eccles, Amy C. Edmondson, George Serafeim, and Sarah E. Farrell
Harvard Business School Note 412-050

This note provides background on the complex issues regarding the supply and consumption of water and how this natural resource is at increasing risk, resulting in significant economic, political, and environmental issues.

Purchase this note:
http://cb.hbsp.harvard.edu/cb/product/412050-PDF-ENG

Envision Charlotte: Building an Energy Cluster (Abridged)

William W. George
Harvard Business School Case 412-087

Charlotte, North Carolina, was one of the leading economic centers in the south with a strong position as a headquarter city. Since the 1980s, the city had become increasingly reliant on a successful but also volatile financial service industry. In 2006, Jim Rogers, CEO of Duke Energy, began to lay the groundwork to establish Charlotte as the "new energy hub of America." The Envision Charlotte initiative builds on the Charlotte region's economic development "energy capital USA" initiative that was announced by North Carolina Governor Beverly Perdue, city, and business leaders in April 2009. Five years later, on October 28, 2011, he and more than 1,500 people celebrated the launch of Envision Charlotte, a first-in-the-nation smart grid plan aimed at reducing energy use in the central business district. With worries about a renewed downturn in the financial sector, Rogers and the other leaders in attendance hoped that rallying around a shared idea and supporting a civic initiative such as Envision was the formula for economic sustainability.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/412087-PDF-ENG

Envision Charlotte: Building an Energy Cluster

William W. George
Harvard Business School Case 412-073

On October 28, 2011, 1,500 people, including many civic and business leaders, gathered outdoors in a Charlotte, North Carolina, city square to celebrate the launch of Envision Charlotte, a first-in-the-nation smart grid plan aimed at reducing energy use in the central business district. The initiative called for a 20% reduction in energy consumption in the city while promoting the region's burgeoning energy sector by attracting green-minded companies to the urban core and position Charlotte as a highly progressive business center. The idea was to make Charlotte the "new energy hub of America" and diversify away from its historical reliance on banking-a historically volatile industry. Duke Energy CEO Jim Rogers and the other leaders in attendance hoped that rallying around a shared idea and supporting a civic initiative such as Envision was the formula for economic sustainability.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/412073-PDF-ENG

One Game to Rule Them All: Lord of the Rings Online and the MMO Market

Hanna Hałaburda, William Collis, Rob McKeon, and Ivan Nausieda
Harvard Business School Case 712-434

Turbine Inc. is releasing a massively multiplayer online (MMO) game, The Lord of the Rings Online, based on the popular film trilogy. The firm's CEO needs to consider market conditions and game characteristics to build a business model for the game: decide which type of consumers to target-the hardcore gamers or the casual gamers-and form the optimal pricing scheme. One particular challenge he needs to face is that there is a dominant incumbent in the MMO market that Turbine enters, World of Warcraft. The case encourages students to explore the nature of the competition in the MMO market and to define characteristics of a successful business model.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/712434-PDF-ENG

Ponce de Leon: Confidential Instructions for Donald Sanger, Chief Financial Officer, Panama Studios

Ian Larkin
Harvard Business School Case 912-039

Ponce de Leon (POL) is a four-party negotiation exercise in which a film studio is trying to sign a major actress to star in an upcoming movie. The negotiation centers around the different extrinsic and intrinsic motivations underlying each of these party's approach to the movie and, therefore, to the negotiation. The exercise allows exploration of the risks of "monetizing" different types of extrinsic (e.g., pay, awards, status) and intrinsic (e.g., love of the work, values) motivation.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912039-PDF-ENG

Ponce de Leon: Confidential Instructions for Elaine Bennett

Ian Larkin
Harvard Business School Case 912-037

An abstract is unavailable at this time.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912037-PDF-ENG

Ponce de Leon: Confidential Instructions for Newman Knight, Elaine Bennett's Agent

Ian Larkin
Harvard Business School Case 912-038

An abstract is unavailable at this time.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912038-PDF-ENG

Ponce de Leon: Confidential Instructions for Poppie Santoni, Director

Ian Larkin
Harvard Business School Case 912-040

An abstract is unavailable at this time.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912040-PDF-ENG

New England Apple Slices

Deishin Lee and James Weber
Harvard Business School Case 612-045

Protagonist leads an apple industry association that hopes to develop a market for New England apple slices to improve demand for apple products. Apples grown for slicing have characteristics that differ from most apples grown in New England. Case allows students to examine whether it makes sense for a farmer to begin to grow apples for slicing. The case also describes the distribution of apples and apple products so that students can examine how a market for sliced apples might get developed and which industry participants might enjoy a position of power in the market.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/612045-PDF-ENG

Recorded Future: Searching the Web for Alpha

Christopher Malloy
Harvard Business School Case 212-057

Recorded Future was a software company that aimed to aggregate the information on the Internet in a way that offered new and valuable insights. Funded by Google and In-Q-Tel, the venture-capital wing of the Central Intelligence Agency, Recorded Future gave people tools to not only extract meaning from the web, but also to make predictions about future events ranging from terrorist attacks to corporate product releases. The case presents the investment decision of a portfolio manager, Andrew Fisher of LXE Capital, who is considering investing based on insights drawn from Recorded Future's software interface. The case asks students to grapple with a new source of investment data, to evaluate the reliability of back-tested portfolio strategies, and to ponder how best to utilize data for the purposes of generating "alpha" (positive risk-adjusted returns) in investing.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/212057-PDF-ENG

Resolving Your Founding Dilemmas: Insights from CareerLeader

Noam Wasserman, Timothy Butler, and Lisa Brem
Harvard Business School Note 812-027

The CareerLeader business career self-assessment program provides diagnostic information in three key areas of individual differences.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/812027-PDF-ENG