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.

September 5

Critiquing a PowerPoint presentation

For better or worse, slide decks have become a fixture of business presentations everywhere. But what qualities can make you a prince or princess of PowerPoint? In the new case "PunchTab, Inc. Investor Presentation Deck," authors William Kerr and Ramana Nanda encourage students to dissect a startup's presentation to venture capitalists. "Students can discuss the materials that (founder Ranjith) Kumaran has included, his presentation style, and what they would retain or remove from the presentation."

Meaningless motivation?

Sometimes a research paper's title tells you all you need to know. "'I'll Have One of Each': How Separating Rewards into (Meaningless) Categories Increases Motivation" is a wonderful example. Francesca Gino and Scott Wiltermuth run experiments that demonstrate people are more motivated to work for rewards divided into separate categories than those in a single pool.

Putting strategy to the scientific method

"For all its emphasis on data and number crunching, conventional strategic planning is not actually scientific," we learn in a recent article in Harvard Business Review. The authors, who include HBS Professor Jan Rivkin and former Procter & Gamble CEO A.G. Lafley, show how tenets of the scientific method can bring both creativity and rigor to your strategy planning. Read "Bringing Science to the Art of Strategy."

 

Publications

Preference Signaling in Matching Markets

Abstract

Many labor markets share three stylized facts: employers cannot give full attention to all candidates, candidates are ready to provide information about their preferences for particular employers, and employers value and are prepared to act on this information. In this paper we study how a signaling mechanism, where each worker can send a signal of interest to one employer, facilitates matches in such markets. We find that introducing a signaling mechanism increases the welfare of workers and the number of matches, while the change in firm welfare is ambiguous. A signaling mechanism adds the most value for balanced markets.

Should You Listen to the Customer?

Abstract

An abstract is unavailable at this time.

Read the article: http://hbr.org/2012/09/should-you-listen-to-the-customer/ar/1

'I'll Have One of Each': How Separating Rewards into (Meaningless) Categories Increases Motivation

Abstract

We propose that separating rewards into categories can increase motivation, even when those categories are meaningless. Across six experiments, people were more motivated to obtain one reward from one category and another reward from another category than they were to obtain two rewards from a pool that included all items from either reward category. As a result, they worked longer when potential rewards for their work were separated into meaningless categories. This categorization effect persisted regardless of whether the rewards were presented using a gain or loss frame. Using both moderation and mediation analyses, we found that categorizing rewards had these positive effects on motivation by increasing the degree to which people felt they would "miss out" if they did not obtain the second reward. We discuss implications for research on motivation and incentives.

Bringing Science to the Art of Strategy

Abstract

For all its emphasis on data and number crunching, conventional strategic planning is not actually scientific. It lacks the hypothesis generation and testing that's at the heart of the scientific method. To produce novel and successful strategies, teams need to adopt a step-by-step process in which creative thinking yields possibilities, or hypotheses, and rigorous analysis tests them. They should ask what must be true for a given possibility to succeed-and explore whether those conditions hold.

Read the article: http://hbr.org/2012/09/bringing-science-to-the-art-of-strategy/ar/1

Signing at the Beginning Makes Ethics Salient and Decreases Dishonest Self-reports in Comparison to Signing at the End

Abstract

Many written forms required by businesses and governments rely on honest reporting. Proof of honest intent is typically provided through signature at the end of the document, e.g., tax returns or insurance policy forms. Still, people sometimes cheat to advance their financial self-interests-at great costs to society. We test an easy-to-implement method to discourage dishonesty: signing at the beginning rather than at the end of a self-report, thereby reversing the order of the current practice. Using lab and field experiments, we find that signing before rather than after the opportunity to cheat makes ethics salient when it is needed most and significantly reduces dishonesty.

When Power Makes Others Speechless: The Negative Impact of Leader Power on Team Performance

Abstract

We examine the impact of the subjective experience of power on leadership dynamics and team performance and find that the psychological effect of power on formal leaders spills over to affect team performance. We argue that a formal leader's experience of heightened power produces verbal dominance, which reduces team communication and consequently diminishes performance. Importantly, because these dynamics rely on the acquiescence of other team members to the leader's dominant behavior, the effects only emerge when the leader holds a formal leadership position. Three studies find consistent support for this argument. The implications for theory and practice are discussed.

Will Working Mothers Take Your Company to Court?

Abstract

An abstract is unavailable at this time.

Read the article: http://hbr.org/2012/09/will-working-mothers-take-your-company-to-court/ar/1

 

Working Papers

Colocation and Scientific Collaboration: Evidence from a Field Experiment

Abstract

We present the results of a field experiment conducted within the Harvard Medical School system of hospitals and research centers to understand how colocation impacts the likelihood of scientific collaboration. We introduce exogenous colocation and face-to-face interactions for a random subset of biomedical researchers responding to an opportunity to apply for a research grant. While the overall baseline likelihood of any two researchers collaborating is small, we find that random colocation significantly increases the likelihood of pair-level co-application by almost 70%. The effect of exogenous colocation on subsequent collaboration was greater for previous coauthors, pairs including a woman, and pairs researching similar clinical areas. Our results suggest that matching between scientists may be subject to considerable frictions-even among those in relatively close geographic proximity and in the same organizational system. At the same time, even a brief and focused intervention facilitating face-to-face interactions can provide information that impacts the formation of scientific collaborations.

Download the paper: http://www.hbs.edu/research/pdf/13-023.pdf

Risky Business: The Impact of Property Rights on Investment and Revenue in the Film Industry

Abstract

Our paper tests a key prediction of property rights theory, specifically, that agents will respond to marginal incentives embedded in property rights when making non-contractible, revenue-enhancing investments (Grossman and Hart, 1986; Hart and Moore, 1990). Using rich project-level data from the U.S. film industry, we investigate variation in property right allocations, investment choices, and film revenues to test the distinctive aspects of property rights theory. Empirical tests of these key theoretical predictions have been relatively sparse due to the lack of appropriate data. The U.S. film industry deploys two distinct allocations of property rights, which differentially affect marginal returns on a particular class of investments. In many cases, films are both produced and distributed by studios that then take in the lion's share of revenue. In other cases, films are produced independently and distributed by studios under revenue sharing agreements, which give studios 30% to 40% of the revenue stream. Under either regime, the studio determines and pays for the allocation of scarce marketing resources. After accounting for the endogenous nature of property right allocations, we find that studio-financed films receive superior marketing investments compared to independent films and that these investments fully mediate the positive effect of vertical integration on film revenues. As a result, this study contributes to the empirical literature on property rights by showing that both of the predicted linkages (from marginal returns to investment and from investment to revenue) exist in a single empirical setting.

Download the paper: http://www.hbs.edu/research/pdf/13-007.pdf

Why Do We Redistribute so Much but Tag so Little? Normative Diversity, Equal Sacrifice and Optimal Taxation

Abstract

The workhorse model of optimal taxation strongly recommends tagging, but its use in policy is limited. I argue that this puzzle is a symptom of a more fundamental problem. Conventional theory neglects the diverse normative criteria with which, as extensive evidence has shown, most people evaluate policy. In particular, if the classic principle of Equal Sacrifice augments the standard Utilitarian criterion, optimal tagging is limited. Calibrated simulations of optimal policy with normative diversity of this type simultaneously match three features of U.S. policy: substantial income redistribution; rejection of gender, race, and height tags; and acceptance of a blindness tag. Additional implications increase the appeal of this revision to conventional theory.

Download the paper: http://www.hbs.edu/research/pdf/12-064.pdf

 

Cases & Course Materials

Performance Management at Vitality Health Enterprises, Inc.

John B. Bingham and Michael Beer
Harvard Business School Case 913-501

Vitality Health Enterprises, a medium-sized firm that manufactures health and personal care products, has experienced six straight quarters of strong revenue growth. James Hoffman, the new Senior Vice President of Human Resources, fears that the chain of success is shifting the company's focus away from effective performance management. Recently, Vitality has been faced with increasing turnover among the company's talented research scientists that may be due to a performance management system that leaves top performing employees slighted by the practice of uniform ratings. In an effort to retain top employees, the company institutes a forced distribution model of performance rankings, moving from an absolute ranking system to a relative one. Hoffman and his performance management evaluation team must assess the practical and strategic effectiveness of the new system and present their findings and recommendations to the Board.

Purchase this case:
http://hbr.org/search/913501-PDF-ENG

PV Technologies, Inc.: Were They Asleep at the Switch?

Frank V. Cespedes and Diane Badame
Harvard Business School Case 913-505

PV Technologies, Inc. is an industry-leading manufacturer of photovoltaic inverters used to convert the direct current output of solar panels into alternating current for the commercial power grid. In conjunction with a request for proposal, the company's largest customer performs a routine evaluation and ranks PV Technologies third behind two key competitors. The director of sales and marketing must weigh the possible consequences of the report on the company's reputation while considering an appropriate response. Students must complete a quantitative analysis of four possible courses of action and make a recommendation.

Purchase this case:
http://hbr.org/search/913505-PDF-ENG

Shanghai Diligence Law Firm (B)

Robert G. Eccles and Catherine Zhang
Harvard Business School Supplement 413-027

Shanghai Diligence Law Firm continued with its approach to grow through a merger, rather than organically, and was eventually merged into a bigger law firm in China. After the merger, a refined A-B-C-D model is still in use as compensation system, although the challenge remains as for how to enhance both willingness and capabilities of associates to improve team performance at the firm.

Purchase this supplement:
http://hbr.org/search/413027-PDF-ENG

Global Knowledge Management at Danone (A) (Abridged)

Amy C. Edmondson and David Lane
Harvard Business School Case 613-003

This case explores French consumer goods company Danone's novel approach to knowledge management. In 2007, Human Resource Chief (Executive Vice President) Franck Mougin assesses the company's knowledge-sharing tools and considers his options going forward. Through informal knowledge marketplaces and sharing networks, Danone had helped managers connect with each other and share good practices peer-to-peer, rather than relying on traditional hierarchical lines of communication or IT repositories. From 2004 to 2007, Mougin and his team had found that 5,000 Danone managers around the world-the company conducted business in 120 countries-had shared about 640 now-documented good practices. In 2007, the strategic importance of saving time in a decentralized organization through adoption of colleagues' good practices was put to a test. Should the knowledge management tools be extended to include all employees and external partners on a regular basis? And on top of sharing good practices, could it be extended to include the creation of new solutions and processes? Would this require more formalization of processes and more tracking of results? The case illustrates Mougin's options on taking knowledge management into the future of Danone.

Purchase this case:
http://hbr.org/search/613003-PDF-ENG

The Big 3 Roar Back

William W. George
Harvard Business School Case 412-072

The "Big 3"-Ford Motor Company, General Motors, and Chrysler-were all headquartered in Detroit, Michigan. Born between 1903 and 1928, they dominated the automobile industry in the U.S. for decades until they became complacent. In the 1970s they started losing share to better quality, more fuel-efficient foreign imports. By 2008 they were teetering, and two required federal government assistance to stay afloat. Within three years, remarkably, the Big 3 had turned around by improving competitiveness in quality, design, and cost. Ford's Alan Mulally, GM CEO Ed Whitacre, and Chrysler CEO Sergio Marchionne took different approaches to guide their respective companies to improvements in product design, quality, and cost competitiveness that led to sales increases, solid profitability, and positive cash flow. From October 2010 to October 2011, GM, Ford, and Chrysler sales increased 1.8%, 6.2%, and 27%, respectively. GM and Ford reported strong profits and better-than-expected sales and agreed to pay bonuses to unionized workers as part of new contracts. The Big 3 were gaining market share-Ford was now handily outselling Toyota Motor Corp. in the U.S. after falling behind in 2007. Many saw the Big 3 turnaround as proof that a unionized manufacturing industry could be revived through strong, decisive leadership on multiple fronts and improved union relations.

Purchase this case:
http://hbr.org/search/412072-PDF-ENG

Johannes Linden: Managing the Global Executive Committee

Linda A. Hill and Mark Rennella
Harvard Business School Case 913-509

Johannes Linden is the Director of the Washer and Dryer division of Fluss, a large Swiss appliance manufacturer. Soon after the company completes its revenue projections and bonus targets for the upcoming year, Linden shares some good news with his leadership team, the Global Executive Committee (GEC): an internal R&D effort to develop cheaper steel for the company's products has finished a year ahead of schedule. This will translate into a significant reduction in costs across the division. When Linden proposes readjusting revenue expectations and sales targets accordingly, he is surprised to find that the GEC does not agree with him. Among other issues, employee bonuses are involved. Linden, with a reputation for being open and knowledgeable yet sometimes intimidating, tries to convince the committee to come around to his way of thinking.

Purchase this case:
http://hbr.org/search/913509-PDF-ENG

PunchTab, Inc. Investor Presentation Deck

William R. Kerr and Ramana Nanda
Harvard Business School Case 812-172

This case examines the PowerPoint presentation that Ranjith Kumaran, founder of the start-up PunchTab, Inc., is using for his investment pitches to venture capital firms. Students can discuss the materials that Kumaran has included, his presentation style, and what they would retain or remove from the presentation.

Purchase this case:
http://hbr.org/search/812172-PDF-ENG

Taikang Insurance: Standing Out In China's Crowded Insurance Market

William C. Kirby and Tracy Yuen Manty
Harvard Business School Case 312-109

As a joint-stock insurance company in China, with both state-owned enterprises and foreign firms as investors, Taikang Insurance was becoming a force in the industry. It not only competed with well-entrenched state-owned rivals, but it was also seen as an entrepreneurial upstart. With the insurance landscape in China growing increasingly competitive, Taikang has had to be innovative and strategic in its ability to maintain its place as the fourth largest insurer in China. Chairman Chen Dongsheng laid a strong foundation when he launched Taikang in 2006; what will he do going forward to enable Taikang to continue to stand out in a crowded field?

Purchase this case:
http://hbr.org/search/312109-PDF-ENG

Credit Unions: The Future of the Cooperative Financial Institution

Robert C. Pozen and Grace Hou
Harvard Business School Case 312-131

Credit unions are a specialized type of depository institution with a cooperative, non-profit structure and a federal tax exemption. They originated as small, cooperative institutions with an emphasis on uncollateralized consumer lending to the unbanked working-classes. Over time, credit unions have evolved into a wide range of sizes, though compared to banks, a much higher proportion of credit unions are still very small. One subset of "non-traditional" credit unions have been able to expand as a result of looser field of membership requirements and expanded product and service offerings through the use of corporate credit unions and Credit Union Service Organizations. This case looks at the regulatory proposals around credit unions coming out of the financial crisis from the policy-making perspective. Credit unions have lobbied policymakers for expanded powers that will enable them to help stimulate the economy and create jobs by serving more customers and extending more credit. These expanded powers include increasing the business lending cap and raising secondary capital from non-members. The protagonist is a research analyst who must evaluate the benefits of credit unions against the costs, including the federal tax exemption. He also must consider the policy objectives of credit unions against alternative ways to achieve those objectives.

Purchase this case:
http://hbr.org/search/312131-PDF-ENG

The Kaesong Industrial Complex (B)

Dante Roscini, Eric D. Werker, and Han-koo Yeo
Harvard Business School Supplement 710-023

An abstract is unavailable at this time.

Purchase this supplement:
http://hbr.org/search/710023-PDF-ENG

Home Nursing of North Carolina

Richard S. Ruback and Royce Yudkoff
Harvard Business School Case 212-120

Ari Medoff's (HBS '11) goal was to control his own professional destiny by owning his own company. His search identified a suitable acquisition in Home Nursing of North Carolina, and he had negotiated a purchase price of $3.5 million, or 4.2x trailing EBITDA. Medoff had completed his due diligence, arranged financing, and completed the legal documents required to complete the acquisition and anticipated closing the transaction in just a few weeks. But then the sellers surprisingly asked to renegotiate the terms of the note they had agreed to early in the acquisition process. Medoff must decide whether to renegotiate the debt or abandon the transaction.

Purchase this case:
http://hbr.org/search/212120-PDF-ENG

HP Labs in Singapore

Willy Shih, Pankaj Agarwal, and Christine Chi
Harvard Business School Case 612-080

When HP established a branch of its corporate research lab in Singapore, the government played a key role through its Economic Development Board (EDB). Chris Whitney, the lab's director, sought to generate revenue from the lab's innovations, making it financially independent from corporate funding. The case explores HP's history in Singapore and the role of the EDB in encouraging the growth of local R&D capabilities. The case poses questions on the sustainability of the funding model.

Purchase this case:
http://hbr.org/search/612080-PDF-ENG

Siemens AG: Key Account Management

Thomas Steenburgh, Michael Ahearne, and Elena Corsi
Harvard Business School Case 512-110

The key account manager of an engineering company has to convince a department to give up important contracts. The German engineering company Siemens had set up a global key account management program since 2010. The key account manager of an emerging account had been asked by his customer to cut the costs of two long-term contracts worth about €300 million that his customer had signed with Siemens. Although legally Siemens could refuse the revision, such an act could jeopardize Siemens' relationship with the customer. At the same time, a change in the contracts would bring about losses for Siemens. How should the key account manager handle this problem? He knew that he would have to be resourceful, given that he had no direct authority in the situation, but this was the nature of his job.

Purchase this case:
http://hbr.org/search/512110-PDF-ENG

Itaú Unibanco (A): The Merger Process

Belén Villalonga, John A. Davis, and Ricardo Reisen de Pinho
Harvard Business School Case 212-094

An abstract is unavailable at this time.

Purchase this case:
http://hbr.org/search/212094-PDF-ENG

Purchase this supplement:
http://hbr.org/search/212095-PDF-ENG