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.

June 18

Encouraging Creativity to Increase Profits

To revitalize a company by slimming down budgets and ramping up standardization is a popular business plan. However, by getting rid of variability, companies also sacrifice experimentation. Especially when business is slow, it's important to keep up a steady rate of innovation; otherwise, a company might run out of products altogether. "If anything, companies should experiment more and not less," writes Stefan Thomke. If companies want to see those long-term gains, he explains, they have to encourage innovation amongst employees, be flexible about improving bad ideas, and be willing to accept failure as a temporary roadblock. Read Thomke's article "Unlocking Innovation Through Business Experimentation" in The European Business Review.

Baby, You Can Drive My Car

In many parts of the world, getting into a cab is a potentially hazardous move for both the driver and the passenger: the former runs the risk of being robbed; the latter might be overcharged or even kidnapped. SaferTaxi, an online taxi booking service, aims to neutralize customer concerns by letting them choose their drivers ahead of time. In the case "SaferTaxi: Connecting Taxis and Passengers in South America," Peter A. Coles and Benjamin Edelman look at the regulatory and technological problems the company must solve, even as competition looms.

Are Public Wages Fairer Wages?

Previous studies have proven that employees evaluate their salaries as relative to others' salaries-and they aren't too thrilled when they're paid less than peers with a comparable job. In the working paper "Pay Harmony: Peer Comparison and Executive Compensation," Claudine Gartenberg and Julie Wulf study how pay structures themselves are affected by employees' income comparisons. Because peer comparison can reduce job satisfaction and productivity rates, firms are more likely to give out comparable wages when information about wages is public, rather than private, they find.

 

Publications

  • 2006
  • Emotion Review

The Power of the Cognition/Emotion Distinction for Morality

By: Bazerman, Max H., Francesca Gino, Lisa L. Shu, and Chia-Jung Tsay

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Publication%20Files/

  • 2006
  • European Business Review

Unlocking Innovation Through Business Experimentation

By: Thomke, Stefan

Abstract—No abstract available.

Publisher's link: http://www.europeanbusinessreview.com/?p=8420

 

Working Papers

Pay Harmony: Peer Comparison and Executive Compensation

By: Gartenberg, Claudine, and Julie Wulf

Abstract—Do horizontal wage comparisons affect firm policies on executive pay? This paper explores that question using a 1992 SEC proxy disclosure rule that mandated increased disclosure of executive pay. We argue that this rule differentially increased wage comparisons within firms with geographically dispersed managers-firms with the greatest information frictions prior to the rule change. We report three changes related to compensation after 1992 for division managers. First, within firms with dispersed managers, division manager pay co-moves more with peer pay and is less sensitive to individual performance. Second, pay disparity between managers located in different states decreases relative to that of co-located managers. Third, division productivity falls in dispersed firms, with the effect driven by managers at the low end of the wage distribution. Taken together, our findings suggest that principals account for horizontal peer comparison when designing executive wage contracts and that this comparison has productivity consequences for firms.

Download working paper: http://www.hbs.edu/faculty/product/43633

Abstract—This paper, based on a five-year longitudinal study at two UK-based banks, documents and analyzes the practices used by risk managers as they aim to gather and establish influence in their organizations. Specifically, we examine how influence-seeking risk managers (1) establish and maintain interpersonal connections with decision makers and how they (2) adopt, deploy, and reconfigure tools-practices that we define collectively as toolmaking. Using prior literature and our empirical observations, we distinguish between influence activities to which toolmaking was not central, and those to which toolmaking was important. As for the influence activities that imply toolmaking, we can outline the contours of three modes of operation, which describe experts operating as Compliance Experts, Engaged Toolmakers, or Technical Champions, depending on the communicability of the tools and on the extent to which the experts are involved in practices related to those tools. Our study contributes to the accounting and management literature on influence-gathering, underlining that toolmaking plays a vital role in explaining how functional experts may compete in the intraorganizational marketplace for influential ideas and the attention of decision makers. Specifically, as risk management becomes more tool-driven and toolmaking may become more prevalent, our study provides a more nuanced understanding of the nature and consequences of risk managers' influence activities. An explicit focus on toolmaking extends accounting research that has hitherto focused attention on the structural arrangements and interpersonal connections when explaining the emergence of the influential financial expert.

Download working paper: http://www.hbs.edu/faculty/product/39382

 

Cases & Course Materials

SaferTaxi, a taxi booking service in South America, must develop its mobilization strategy; that is, it must attract enough passengers and drivers to make its service worthwhile for all. Drivers hesitate to pay for SaferTaxi's smartphones and service unless these will deliver passenger bookings-and passengers have no reason to sign up unless drivers are available. Meanwhile, regulators question the permissibility of online taxi booking in light of regulatory requirements, and some existing taxi booking vendors feel threatened by SaferTaxi's efforts to enter the market. As SaferTaxi attempts to satisfy these diverse constituents, international competition looms. What should SaferTaxi's founders do next?

Purchase this case:
http://hbr.org/search/913041-PDF-ENG

  • Harvard Business School Case 913-034

Distribution at American Airlines (C)

Presents 2011-2012 updates to American's distribution strategy including new challenges and disputes.

Purchase this case:
http://hbr.org/search/913034-PDF-ENG

  • Harvard Business School Case 813-079

Lit Motors

In mid-2012 Lit Motors had created both engineering and design prototypes and conducted initial customer tests on less than $750,000 of investment. Lit Motors' founder, Daniel Kim, had started the company to design and manufacture an efficient electric 2-wheeled vehicle. The company had refined the designs for the key technologies required and had a working prototype, an understanding of the manufacturing processes to be used, and a list of the components required. They also had a design prototype that they had used to conduct customer tests and establish reactions to pricing levels. At this point, management was aiming to raise $15 million to get closer to manufacturing prototypes, but had they sufficiently proved out both the manufacturing feasibility and the market demand? How could they address the next hurdles in terms of partnership building, supply chain management, and go-to-market strategy?

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http://hbr.org/search/813079-PDF-ENG

  • Harvard Business School Case 313-057

Milwaukee (A): Making of a World Water Hub

Starting in 2007 Milwaukee leaders from different areas (large established companies, civic organizations, public sector, academia, and entrepreneurs) negotiated a path for converting the region into a global water hub to address economic and environmental concerns. The leaders with various stakes in the change managed to work together to rearrange and support existing pieces to maximize the collective potential. Their actions exemplified "advanced leadership" in a complex social system such as a community or region. There was no central leader; instead there was a collection of coalitions and collaborative activities that contributed to the end result.

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http://hbr.org/search/313057-PDF-ENG

  • Harvard Business School Case 313-058

Milwaukee (B): Civic Leaders

No description available.

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http://hbr.org/search/313058-PDF-ENG

  • Harvard Business School Case 313-060

Milwaukee (B1): Dean Amhaus, President, Water Council

No description available.

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http://hbr.org/search/313060-PDF-ENG

  • Harvard Business School Case 313-061

Milwaukee (B2): Thomas Barrett, Mayor of City of Milwaukee

No description available.

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No description available.

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http://hbr.org/search/313064-PDF-ENG

No description available.

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http://hbr.org/search/313065-PDF-ENG

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http://hbr.org/search/313067-PDF-ENG

No description available.

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No description available.

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http://hbr.org/search/313068-PDF-ENG

Beginning in 1994, a series of articles and public disclosures indicated that Swiss banks may have retained assets belonging to victims of the Holocaust, and also may have engaged in long-term attempts to block survivors' ability to recover those assets after World War II. Stuart Eizenstat, a longtime government official, and U.S. Special Envoy for Property Restitution, undertook a complex multi-year negotiation between victims' representatives, advocacy groups, government officials, and the banks in an unprecedented attempt to obtain restitution for the victims. Unifying fractious parties within an uncertain legal, social, and business landscape, Eizenstat's unique approach of quantifying "rough justice" in order to enforce the accountability of corporate entities and governments for past injustices in Switzerland forms the basis of this study.

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http://hbr.org/search/913037-PDF-ENG

  • Harvard Business School Case 713-018

Turkey-A Work in Progress?

For the past 10 years, Turkey has grown its real GDP at about 6% annually. This came after a huge debt crisis in 2001-02, wherein Turkey had to borrow $16 billion more from the IMF and comport with its difficult conditionality. Today, Turkey is a middle-income country in search of an effective development strategy. It tends to run high inflation with a devalued currency, despite massive capital inflows and a huge current account deficit. At home, the government has carefully managed between Islamicization, democracy, and secularism. And abroad, it deals with a difficult neighborhood-Syria, Iran, Iraq, Israel (not to mention Russia, Europe, and the United States). Prime Minister Erdogan is trying to rewrite the Constitution before 2014 when the next election occurs.

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http://hbr.org/search/713018-PDF-ENG