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.

May 22

Becoming a strategist

If you find yourself in Professor Cynthia A., Montgomery's executive education course on strategy at Harvard Business School, the first question you are likely to hear is this: Are you a strategist? In her new book, The Strategist: Be the Leader Your Business Needs, Montgomery emphasizes that strategy is not just something used to outwit competitors, but also necessary to define your company from within.

What's next for Virgin?

Under the leadership of Richard Branson, Virgin has developed six billion-dollar enterprises including a record label, an airline, and mobile services. A new case by Gary P. Pisano and Elena Corsi explores the challenges and opportunities for the future awaiting Virgin Group CEO Stephen Murphy on issues including funding, branding, and maintaining the company culture.

The messy pursuit of innovation

Is innovation best pursued by companies using resources within their own boundaries or by turning to open source communities outside the corporate walls? Researchers Karim R. Lakhani,, Hila Lifshitz-Assaf, and Michael L. Tushman suggest such this is no longer an either/or question, especially for academics. "We argue that the innovation and organizational design literatures must move beyond debates between open vs. closed boundaries and instead embrace the notion of complex organizational boundaries where firms simultaneously pursue a range of boundary options…." Read Open Innovation and Organizational Boundaries: The Impact of Task Decomposition and Knowledge Distribution on the Locus of Innovation.

 

Publications

The Strategist: Be the Leader Your Business Needs

Abstract

An abstract is unavailable at this time.

Publisher's Link: http://www.harpercollins.com/browseinside/index.aspx?isbn13=9780062071019

Sleeping with Your Smartphone: How to Break the 24-7 Habit and Change the Way You Work

Abstract

Does it have to be this way? Can't resist checking your smartphone or mobile device? Sure, all this connectivity keeps you in touch with your team and the office-but at what cost? In "Sleeping with Your Smartphone," Leslie Perlow reveals how you can disconnect and become more productive in the process. In fact, she shows that you can devote more time to your personal life and accomplish more at work. The good news is that this doesn't require a grand organizational makeover or buy-in from the CEO. All it takes is collaboration between you and your team-working together and making small, doable changes. What started as an experiment with a six-person team at The Boston Consulting Group-one of the world's elite management consulting firms-triggered a global initiative that eventually spanned more than 900 BCG teams in 30 countries across five continents. These teams confronted their nonstop workweeks and changed the way they worked, becoming more efficient and effective. The result? Employees were more satisfied with their work-life balance and with their work in general. And the firm was better able to recruit and retain employees. Clients also benefited-often in unexpected ways. In this engaging book, Perlow takes you inside BCG to witness the challenges and benefits of disconnecting. She provides a step-by-step guide to introducing change on your team-by establishing a collective goal, encouraging open dialogue, ensuring leadership support-and then spreading change to the rest of your firm. If you and your colleagues are grappling with the "always on" problem, it's time to disconnect-and start reading.

Publisher's Link: http://hbr.org/product/sleeping-with-your-smartphone-how-to-break-the-24-/an/10816-HBK-ENG

Assessing Country Competitiveness: The Case of Spain

Abstract

An abstract is unavailable at this time.

Publisher's Link: http://www.e-elgar.com/bookentry_main.lasso?currency=US&id=14530

Evaluating the Impact of the Mozilla Software Redesign Effort

Abstract

An abstract is unavailable at this time.

Publisher's Link: http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=12819

Do you Need a New Product-Development Strategy?

Abstract

Many firms rely on a single new-product development process for all projects. But designing new products for different business contexts requires that a firm deploy different new-product development processes. Products designed for stable and mature end-user markets require a process optimized for control and efficiency. In contrast, first-of-a-kind "breakthrough" products require a more emergent process that aims to discover whether there is any market to be served in the first place. Applying a uniform "best-practice" process to all development efforts ignores the major differences between these projects and may result in missed opportunities. This article describes a framework to address this problem, allowing a firm to better align the design of its development processes to the specific aims of individual projects. We illustrate this framework with examples from Hewlett-Packard, a large, diversified electronics firm that has successfully piloted this new approach across multiple business units.

Social Entrepreneurs as Institutional Entrepreneurs: The Case of Sekem

Abstract

How can application of a positive lens to understanding social change and organizations enrich and elaborate theory and practice? This is the core question that inspired this book. It is a question that brought together a diverse and talented group of researchers interested in change and organizations in different problem domains (sustainability, healthcare, poverty alleviation, and education). The contributors to this book bring different theoretical lenses to the question of social change and organizations. Some are anchored in more macro accounts of how and why social change processes occur, while others approach the question from a more psychological or social psychological perspective. Many of the chapters in the book travel across levels of analyses, making their accounts of social change good examples of multi-level theorizing. Some scholars are practiced and immersed in thinking about organizational phenomena through a positive lens; for others it was a total adventure in trying on a new set of glasses. However, connecting all contributing authors was an excitement and willingness to explore new insights and new angles on how to explain and cultivate social change within or across organizations. This edited volume will be of interest to an international community that seek to understand how organizations and people can generate positive outcomes for society. Students and researchers in organizational behavior, management, positive psychology, leadership, and corporate responsibility will find this book of interest.

Publisher's Link: http://www.psypress.com/using-a-positive-lens-to-explore-social-change-and-organizations-9780415878869

 

Working Papers

Corporate Social Responsibility and Access to Finance

Abstract

In this paper, we investigate whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to a) reduced agency costs due to enhanced stakeholder engagement and b) reduced informational asymmetry due to increased transparency. Using a large cross-section of firms, we find that firms with better CSR performance face significantly lower capital constraints. Moreover, we provide evidence that both of the hypothesized mechanisms, better stakeholder engagement and transparency around CSR performance, are important in reducing capital constraints. The results are further confirmed using an instrumental variables and a simultaneous equations approach. Finally, we show that the relation is driven by both the social and the environmental dimension of CSR.

Download the paper: http://www.hbs.edu/research/pdf/11-130.pdf

The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance

Abstract

We investigate the effect of a corporate culture of sustainability on multiple facets of corporate behavior and performance outcomes. Using a matched sample of 180 companies, we find that corporations that voluntarily adopted environmental and social policies by 1993-termed as High Sustainability companies-exhibit fundamentally different characteristics from a matched sample of firms that adopted almost none of these policies-termed as Low Sustainability companies. In particular, we find that the boards of directors of these companies are more likely to be responsible for sustainability, and top executive incentives are more likely to be a function of sustainability metrics. Moreover, they are more likely to have organized procedures for stakeholder engagement, to be more long-term oriented, and to exhibit more measurement and disclosure of nonfinancial information. Finally, we provide evidence that High Sustainability companies significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance. The outperformance is stronger in sectors where the customers are individual consumers, companies compete on the basis of brands and reputation, and in sectors where companies' products significantly depend upon extracting large amounts of natural resources.

Download the paper: http://www.hbs.edu/research/pdf/12-035.pdf

The Consequences of Mandatory Corporate Sustainability Reporting

Abstract

We examine the effect of mandatory sustainability reporting on several measures of socially responsible management practices. Using data for 58 countries, we show that after the adoption of mandatory sustainability reporting laws and regulations, the social responsibility of business leaders increases. We also document that both sustainable development and employee training become a higher priority for companies and that corporate governance improves. Furthermore, we find that companies implement more ethical practices, including reducing bribery and corruption, which increases managerial credibility. These effects are larger for countries with stronger law enforcement and more widespread assurance of sustainability reports. We conclude with thoughts about mandatory sustainability and integrated reporting.

Download the paper: http://www.hbs.edu/research/pdf/11-100.pdf

Open Innovation and Organizational Boundaries: The Impact of Task Decomposition and Knowledge Distribution on the Locus of Innovation

Abstract

This paper contrasts traditional, organization-centered models of innovation with more recent work on open innovation. These fundamentally different and inconsistent innovation logics are associated with contrasting organizational boundaries and organizational designs. We suggest that when critical tasks can be modularized and when problem-solving knowledge is widely distributed and available, open innovation complements traditional innovation logics. We induce these ideas from the literature and with extended examples from Apple, NASA, and LEGO. We suggest that task decomposition and problem-solving knowledge distribution are not deterministic but are strategic choices. If dynamic capabilities are associated with innovation streams, and if different innovation types are rooted in contrasting innovation logics, there are important implications for firm boundaries, design, and identity.

Download the paper: http://www.hbs.edu/research/pdf/12-057.pdf

Creating a Venture Ecosystem in Brazil: FINEP's INOVAR Project

Abstract

An abstract is unavailable at this time.

Download the paper: http://www.hbs.edu/research/pdf/12-099.pdf

Mexico's Financial Crisis of 1994-1995

Abstract

This paper explains the causes leading to the Mexican crisis of 1994-1995 (known as "The Tequila Crisis"), and its short- and long-term consequences. It argues that excessive enthusiasm on the part of foreign investors, not based on Mexico's fundamentals, and weak regulation of the banking system built the vulnerabilities that left Mexico exposed to a sudden change in investor appetite for Mexican securities in 1994. Political violence in Mexico and changes in monetary policy in the United States then led to radical changes in investor perceptions of the future of the country and to a balance of payments and banking crisis. The paper then explains how the crisis unraveled and describes the U.S. bailout of the Mexican government in 1995. Since the exchange rate crisis of December of 1994 then translated into a banking crisis in 1995, the chapter ends examining the subsequent development of the Mexican banking system.

Download the paper: http://www.hbs.edu/research/pdf/12-101.pdf

Conflict Policy and Advertising Agency-Client Relations: The Problem of Competing Clients Sharing a Common Agency

Abstract

What restrictions should be placed on advertising agencies with respect to serving accounts or clients that are competitors of one another in order to avoid conflicts in interest? In recent decades, the advertising and marketing services industry has undergone a number of structural changes that forced an ongoing re-examination and modification of traditional norms and policies emphasizing exclusivity in agency-client relationships. A typology of conflicts that have arisen in the United States shows the variety and complexity of contemporary conflicts. Cases of conflicts reported in the trade literature are used to illustrate policy issues as well as the spillover effects and resolution of disputes. To cope with these developments, two significant changes in conflict policies evident in current U.S. practice are identified. First, safeguards to preserve proprietary information that function as organizational, location, and personnel mobility barriers among quasi-autonomous units within a mega-agency or holding company have become an essential component of conflict policies. Subject to the protection against security breaches afforded by safeguards, rival clients may be served by separate organizational units that are under common control and/or ownership. Second, a family of hybrid conflict polices has evolved that feature elements of the split account system long practiced in Japan, augmented by safeguards that serve as partial substitutes for the umbrella prohibition on serving rivals imposed by exclusivity. By relying on safeguards and splitting account assignments in a variety of ways among different organizational units within a given mega-agency or holding company that may also serve rivals (or across different mega-agencies or holding companies), clients exert a measure of control over the access of those agencies to confidential information while also offering them incentives to avoid conflicts of interest. Findings from the existing body of conceptual and empirical research bearing on the sources and consequences of conflicts are reviewed and directions for further research are discussed.

Download the paper: http://www.msi.org/publications/publication.cfm?pub=1983

 

Cases & Course Materials

Journey to the East: Natcore Technology in China

Regina Abrami, Matthew Shaffer, and Weiqi Zhang
Harvard Business School Case 912-414

Why is a U.S. solar technology firm manufacturing in China instead of the U.S.? Chuck Provini faces this question not just from the market, but also from the U.S. government. This case examines the making of a new joint venture in China at a time when both the U.S. and Chinese governments are eager to expand and develop their clean tech sectors.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912414-PDF-ENG

K&N's: Health and Happiness for Pakistan

David E. Bell, Damien P. McLoughlin, and Mary Shelman
Harvard Business School Case 512-002

In 2011 Khalil and Adil Sattar are considering growth opportunities for K&N's, their family business that is the market leader for processed chicken and value-added chicken products in Pakistan. This position has been built through a strategy of vertical integration, product innovation, and branding. K&N's has also developed its own chain of retail "Chicken Stores" to promote its products. Growth opportunities include contained expansion in Pakistan, exporting to nearby markets, and/or developing a global halal food brand.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/512002-PDF-ENG

Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd

Robert G. Eccles, Catherine Zhang, Cheng-hua Tzeng, Liang Cheng, and Penelope Rossano
Harvard Business School Case 411-081

This case is about the establishment, growth, and direction of the Shanghai Zhangjiang Hi-Tech Park (Zhangjiang Park), which is located in the Pudong New Area of Shanghai. Considered to be one of the most competitive hi-tech industry clusters in China, the combined business strategy of Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd. (Zhangjiang Hi-Tech), a key operator of Zhangjiang Park, included real estate development, hi-tech investment, and integrated services. As of the time of the case, members of the board of directors of Zhangjiang Hi-Tech were faced with open questions such as how Zhangjiang Park would be able to maintain its sustainable competitiveness in comparison with other hi-tech and industrial parks in China. Board members were also concerned with how Zhangjiang Hi-Tech would be able to meet the needs of both capital market and regional development.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/411081-PDF-ENG

Carl Icahn and Clorox

Jay W. Lorsch and Kathleen Durante
Harvard Business School Case 412-078

This case outlines the takeover attempt by activist investor, Carl Icahn, for the Clorox Company. The board of the company repeatedly rejected Icahn's offers as inadequate. He made three bids over the course of three months.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/412078-PDF-ENG

Nike Football: World Cup 2010 (B)

Elie Ofek and Ryan Johnson
Harvard Business School Supplement 512-054

Details Nike Football's marketing efforts in the lead up to and during the World Cup in South Africa (2010). Allows students to reflect on the implementation of the strategy and to think about the implications for Nike as it begins preparing for the World Cup in 2014.

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/512054-PDF-ENG

Novozymes: Cracking the Emerging Markets Code

Krishna G. Palepu and Karol Misztal
Harvard Business School Case 112-084

In 2011, the management of Novozymes, the industrial enzymes leader, reflected on the viability of their positioning in the fast growing, yet increasingly competitive Chinese market. Novozymes, a technological innovation pioneer, was prominent in China's premium enzyme markets but felt pressure from local low-cost rivals in volume-driven, commoditized segments. How should Novozymes relate to local competitors? By competing on technological innovation only in high-margin verticals? Or through a separate subsidiary with a new low-cost business model for commoditized verticals?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/112084-PDF-ENG

Virgin Group: Finding New Avenues for Growth

Gary P. Pisano and Elena Corsi
Harvard Business School Case 612-070

The head of the branded private investment company owner of the Virgin brand reflected on the group's new pillars of growth. Since the 1970s when Richard Branson created the Virgin record retailing company, Virgin had developed from scratch six companies worth more than $1 billion each and changed their focus from record retailing and music production to a broader one based on airlines, health, financial services, mobile, and media businesses. In addition, Virgin had been able to apply the Virgin brand to several different products without harming the brand. Their challenge had been finding the capital to finance the new ventures rather than the brand. Since 2005, Branson was dedicating more and more time to a charitable organization, Virgin Unite, and had appointed Stephen Murphy the new CEO of the Group. As Murphy contemplated their growth strategy for the next decade, he faced a number of difficult decisions. First, how should he fund new ventures? While growing, the Group had sold stakes in its companies and had signed with them licensing agreements for the use of the Virgin brand name. The Virgin Group was today a loose group of companies some linked to Virgin only by brand licensing agreements. Should they expand by signing new licensing agreements? Second, what kind of opportunities should he seek? Should they keep acting as a venture capital firm, nurturing new ventures as in the past or should they invest in larger and more established companies? What would be the consequences of their choices on the brand and on the Group? Would they always be able to inject the Virgin culture and turn around companies?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/612070-PDF-ENG