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.

March 7, 2017

Among the highlights included in new research papers, case studies, articles, and books released this week by Harvard Business School faculty:

Digitizing tradition and decorum at Wimbledon

The Wimbledon tennis championship each summer has been a staunch observer of tradition—players must wear white in a rule reaching back two centuries, for example. The new case study Bringing Digital to Wimbledon explores how the tournament’s sponsor, The All England Lawn Tennis & Croquet Club, experiments with digital media to engage fans. The case was written by John T. Gourville and David J. Arnold.

Elon Musk on the road and in space

Does inventor Elon Musk take too many gambles with his investors' money? That’s one question under consideration in the case study Elon Musk’s Big Bets, which reviews the entrepreneur’s projects Tesla and SpaceX between 2014 to 2016. The case was written by David B. Yoffie and Eric Baldwin.

The problem with growth: organizational scaling

Most entrepreneurs want their company to grow, but growth can bring its own problems. Alicia DeSantola and Ranjay Gulati take a fresh look at organizational issues that can hinder a growing company in the paper Scaling: Organizing and Growth in Entrepreneurial Ventures, scheduled to be published in a forthcoming issue of Academy of Management Annals.

A complete list of new research and publications from Harvard Business School faculty follows.

— Sean Silverthorne
 
  • in press
  • Academy of Management Annals

Scaling: Organizing and Growth in Entrepreneurial Ventures

By: DeSantola, Alicia, and Ranjay Gulati

Abstract—Entrepreneurial ventures face unique challenges related to growth, particularly in the management of internal organizations. Progress on understanding these dynamics has been constrained by fragmentation within relevant management research. In this paper, we clarify and describe two narratives that have emerged within past and current research on growth and the internal organization. The first narrative draws attention to the surprising endurance of organizational features during growth; the second, their dramatic change. We juxtapose the two narratives to reveal ongoing gaps in the study of how growth can effect change along three dimensions: organizational design, team composition, and organizational culture. We conclude with recommendations on how future research can be enriched through a systematic examination of how entrepreneurial ventures navigate the organizational dilemmas growth presents.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52353

  • 2017
  • Economic Symposium Conference Proceedings (Federal Reserve Bank of Kansas City)

The Federal Reserve's Balance Sheet as a Financial-Stability Tool

By: Greenwood, Robin, Samuel Gregory Hanson, and Jeremy C. Stein

Abstract—We argue that the Federal Reserve should use its balance sheet to help reduce a key threat to financial stability: the tendency for private-sector financial intermediaries to engage in excessive amounts of maturity transformation—i.e., to finance risky assets using dangerously large volumes of runnable short-term liabilities. Specifically, we make the case that the Fed can complement its regulatory efforts on the financial-stability front by maintaining a relatively large balance sheet, even when policy rates have moved well away from the zero lower bound (ZLB). In so doing, it can help ensure that there is an ample supply of government-provided safe short-term claims—e.g., interest-bearing reserves and reverse repurchase agreements (RRP). By expanding the overall supply of safe short-term claims, the Fed can weaken the market-based incentives for private sector intermediaries to issue too many of their own short-term liabilities. And crucially, we argue that the Fed can crowd out private-sector maturity transformation in this way without compromising the ability of conventional monetary policy to focus on its traditional dual mandate of promoting maximum employment and stable prices.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52330

  • December 2016
  • International Journal of Research in Marketing

Social Network Utilization and the Impact of Academic Research in Marketing

By: Rosenzweig, Stav, Amir Grinstein, and Elie Ofek

Abstract—The forces that drive the impact of academic research articles in the marketing discipline are of great interests to authors, editors, and the discipline’s policy makers. A key understudied driver is social network utilization by academic researchers. In this paper, we examine how activating one’s social network can contribute to the impact of academic research and what factors lead researchers to utilize their social network. We treat social networks as a resource that researchers can potentially invoke to supplement other resources available to them. We propose a framework of antecedents for the use of professional social networks by academics. The framework captures researchers’ relevant personal and professional experience as well as conditions associated with the project at hand. Specifically, we study an academic researcher’s (1) personal background (gender and country of origin economic advancement), (2) professional development (time since PhD completion and editorial review board (ERB) membership), and (3) ad-hoc human capital directly involved in the research project (team size). The current study draws upon research from scientometrics, social networks, and resource availability and use and involves an empirical analysis of a sample of 1,329 articles published between 1980 and 2008 in top marketing journals. We predict and generally find that women researchers, researchers originating from less economically advanced countries, or those working with fewer co-authors on a research project are more likely to utilize their social network than their peers. We find weaker evidence for our prediction that years since PhD completion and ERB membership are negatively associated with social network utilization. Importantly, we further surmise and find that, in turn, social network utilization enhances the impact of a research article.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52368

Exploring the Relationship Between Architecture Coupling and Software Vulnerabilities: A Google Chrome Case

By: Lagerström, Robert, Carliss Y. Baldwin, Alan MacCormack, Dan Sturtevant, and Lee Doolan

Abstract—Employing software metrics, such as size and complexity, for predicting defects has been given a lot of attention over the years and has proven very useful. However, the few studies looking at software architecture and vulnerabilities are limited in scope and findings. We explore the relationship between software vulnerabilities and component metrics (like code churn and cyclomatic complexity) as well as architecture coupling metrics (direct, indirect, and cyclic coupling). Our case is based on the Google Chromium project, an open-source project that has not yet been studied for this topic. Our findings show a strong relationship between vulnerabilities and both component level metrics and architecture coupling metrics. Unfortunately, the effects of different types of coupling are somewhat hard to distinguish.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52349

Abstract—Himachal Pradesh outperforms other Indian states in implementing universal primary education. Through comparative field research, this article finds that bureaucratic norms—unwritten rules that guide public officials—influence how well state agencies deliver services for the poor. The findings call attention to the informal, everyday practices that generate state capacity.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=46981

Abstract—This paper analyzes India’s recent enactment of universal primary education. Given the clientelistic features of Indian democracy, this programmatic policy change presents a puzzle. Drawing on interviews and official documents, I find that committed state elites introduced gradual changes to the education system over three decades. To put their ideas into practice, they used administrative mechanisms, layering small-scale reforms on top of the larger education system. As India embraced globalization in the 1990s, officials drew on World Bank resources to implement larger programs in underperforming regions, progressively extending them across the country. These incremental reforms supplied the institutional blueprint for India’s universal primary education program in 2000. As policies were introduced from above, civil society mobilized from below, using the judiciary to hold the state liable for implementing primary education. While reforms helped expand bureaucratic authority, they also generated new public demands for state accountability.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52339

  • Harvard Business School Case 516-111

Camposol

With $289 million in 2015 revenues, Camposol is a Peruvian grower, exporter, and marketer of fruits and vegetables, with a focus on the high-growth, high-margin blueberry category. Camposol aspires to become Peru’s first multinational branded produce company. It already has a strong foothold in the U.S.—an important market where it is refining its branding and retail-customer strategy—and it also seeks to expand in other markets, especially China. To become a leading year-round supplier to retailers, Camposol needs to increase the product volumes it controls, likely through increased sourcing from third parties. At the same time, Camposol has evolved rapidly in recent years and is undergoing the challenges of transforming from family to professional management. This case allows students to consider Camposol’s growth, branding, and marketing strategies in light of the challenges and opportunities ahead. It also invites consideration of the opportunity for Peru and other South American growers to exploit counter-seasonal export opportunities, selling into northern-hemisphere markets when prices peak.

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https://cb.hbsp.harvard.edu/cbmp/product/516111-PDF-ENG

  • Harvard Business School Case 316-149

Sorridents: Making Dental Care Accessible to All in Brazil

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316149-PDF-ENG

  • Harvard Business School Case 817-062

HBS in 2016

The case explores opportunities and challenges confronting the Harvard Business School as it seeks to maintain its differentiated strategic positioning in the face of a rapidly evolving management education landscape.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/817062-PDF-ENG

  • Harvard Business School Case 817-063

SEAS in 2016

The case explores opportunities and challenges facing the Harvard School of Engineering and Applied Sciences as it 1) grapples with rapid undergraduate enrollment growth and its smaller scale relative to other top engineering schools and 2) prepares to move two-thirds of its faculty and classes to a new campus in Allston, 1.5 miles from its current Cambridge location.

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https://cb.hbsp.harvard.edu/cbmp/product/817063-PDF-ENG

  • Harvard Business School Case 517-093

Bringing Digital to Wimbledon

It was mid-December 2016 as Alexandra (Alex) Willis read with satisfaction that The All England Lawn Tennis & Croquet Club (AELTC) had won yet another award for its use of social media to reach its fan base. As the organizer and host of “The Championships, Wimbledon,” the oldest of tennis's four Grand Slams, the AELTC prided itself on tradition and decorum. Widely regarded as the most prestigious professional tennis tournament in the world and contested each year over two weeks in late June and early July, Wimbledon, in many ways, had changed little over the years. Its showcase venue—the 15,000 seat “Centre Court,” complete with a “Royal Box”—was built in 1926. Slazenger had been the official and only supplier of tennis balls since 1902. A strictly enforced ban on any player clothing other than white dated back to the 1800s. And, whereas other tournaments referred to their Men’s and Women’s Championships, at Wimbledon, these events were referred to as the Gentlemen’s and Ladies’ Championships. It was against this “steeped-in-tradition” background that Willis, hired by Wimbledon in 2012 and promoted to Head of Digital and Content in 2015, had to figure out the proper role for digital and social media at Wimbledon. The motivation behind the push into digital was one of communicating and engaging with fans and potential fans around the world, as noted by Richard Lewis, Chief Executive of the AELTC.

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https://cb.hbsp.harvard.edu/cbmp/product/517093-PDF-ENG

  • Harvard Business School Case 117-039

Accounting for the iPhone Upgrade Program (B)

In October 2016, Apple Inc. announced the financial results for its fiscal year 2016. CEO Tim Cook commented on a very successful fiscal year 2016 and focused on all the positive financial results. However, Apple’s 2016 annual report was also telling another story. Apple’s total revenue had decreased 9%, and iPhone revenue decreased 13% compared to the fourth quarter of fiscal year 2015. Apple also faced some criticism from consumers regarding the iPhone 6 and iPhone 6 Plus Upgrade Program. A September 2016 survey reported that an increasing number of customers decided to subscribe to the iPhone Upgrade Program. In spite of this, the company was very supply constrained on the iPhone 7 and 7 Plus, and financial analysts were still eager to receive more information on the impact of the iPhone Upgrade Program on Apple’s financials.

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https://cb.hbsp.harvard.edu/cbmp/product/117039-PDF-ENG

  • Harvard Business School Case 316-108

IMAX: Scaling Personalized Learning in India

IMAX is a provider of comprehensive testing and personalized content across mid-range and low-cost private K-10 schools in India. It aims to improve learning outcomes by providing schools with an integrated product suite including textbooks, workbooks, assessments, feedback reports, personalized worksheets and teaching support material. Its founders, however, view their B2B strategy as a seeding strategy to eventually form a B2C education marketplace where they can collaborate with other education content companies and publishers to provide the right content to the right student in the right form at the right time. To fuel this rapid growth, IMAX has been scouting for investors. It has received an equity investment offer from a large Indian educational book publisher that has been rapidly acquiring companies to strengthen its hold in the education market. The founders must decide if they should accept the publisher's offer or continue to look for an investor who believes in their vision.

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https://cb.hbsp.harvard.edu/cbmp/product/316108-PDF-ENG

  • Harvard Business School Case 317-003

Yili Group: Building a Global Dairy Company

From its humble beginnings as a local Chinese dairy company, the Inner Mongolia Yili Group has become one of the largest dairy companies in the world. To achieve this, Yili has aggressively expanded its footprint overseas including building the world’s largest integrated dairy production base in New Zealand and forming R&D partnerships in Europe and North America. As the company continues its growth in the context of a slowing Chinese economy, how can Yili integrate its new global resources and supply chain to meet local market needs and become a top five global dairy company in the process?

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https://cb.hbsp.harvard.edu/cbmp/product/317003-PDF-ENG

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/117049-PDF-ENG

  • Harvard Business School Case 717-431

Elon Musk's Big Bets

Between late 2014 and late 2016, Tesla CEO Elon Musk undertook several major, and risky, initiatives that would dramatically expand the scale and scope of Tesla’s business. In late 2014, Tesla began construction on a $5 billion “gigafactory” that would manufacture lithium-ion batteries used in Tesla’s electric vehicles on an unprecedented scale. In early 2015, Tesla announced a new product line of battery packs designed for large-scale energy storage for residential, commercial, and utility-scale installations. In 2016, the company acquired SolarCity, a leading solar energy firm, creating what Musk called “a vertically integrated energy company.” These moves, representing billions of investment and extension into new industries, came at a time when Tesla was still losing money and struggling to scale up production of its electric vehicle lines to meet ambitious delivery targets. Meanwhile, Musk was also CEO of SpaceX, which was, while growing its business of launching satellites and cargo into space for commercial and governmental clients, preparing to take astronauts into space, pioneering the use of reusable rockets and announcing plans to colonize Mars. Would Musk be able to realize his ambitious goals or was he taking too many risks with his investors’ money?

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https://cb.hbsp.harvard.edu/cbmp/product/717431-PDF-ENG

  • Harvard Business School Case 617-046

X Fire Paintball & Airsoft: Is Amazon a Friend or Foe? (A)

Three years after launching his brick-and-mortar store, X Fire Paintball and Airsoft, Steve Herbert Sr. and his sons began selling products on Amazon.com’s third-party Marketplace, and online sales expanded rapidly. Over time, X Fire noticed that products of which it had once been the only seller were now being sold by Amazon straight from X Fire’s suppliers, effectively cutting X Fire out. Amazon was also ignoring the minimum advertised price (MAP) set by manufacturers. How should X Fire defend itself? Now Amazon representatives were approaching X Fire to encourage them to sell on Amazon’s smaller but growing Canadian Marketplace. How should X Fire respond to this opportunity?

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https://cb.hbsp.harvard.edu/cbmp/product/617046-PDF-ENG

  • Harvard Business School Case 617-047

X Fire Paintball & Airsoft: Is Amazon a Friend or Foe? (B)

Supplements the (A) case.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/617047-PDF-ENG