HBS Working Knowledge Harvard Business School Working Knowledge offers business practitioners a first look at cutting-edge research and thinking from more than 200 HBS faculty. en-us http://hbswk.hbs.edu/ http://hbswk.hbs.edu/images/site/smalllogo.gif HBS Working Knowledge http://hbswk.hbs.edu/ 117 35 For Business Leaders Harvard Business School HBS Working Knowledge is a forum for innovation in business practice, offering readers a first look at cutting-edge thinking and the opportunity to both influence and use these concepts before they enter mainstream management practice. HBS Working Knowledge hbswk@hbs.edu no <![CDATA[Business Summit: The Role of Social Entrepreneurship in Transforming American Public Education]]> http://hbswk.hbs.edu/rss/6217.html Thu, 02 Jul 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6217.html
Date of Event:October 14, 2008
Moderator:Stacey Childress, HBS faculty
Speakers:Steven Barr, Founder and CEO, Green Dot Public Schools
Kevin Johnson, CEO & President, St HOPE Public Schools
Wendy Kopp, CEO & Founder, Teach for America
Michelle Rhee, Chancellor, Washington DC Public Schools

Editor's Note: This is a summary of an HBS Business Summit presentation. View a full summary and video of the event on the HBS Centennial Web site linked below.

A national crisis exists in public education. The root causes include unaccountable teachers, dysfunctional schools, and systemic barriers like lack of political will to drive change.

Yet amid these formidable barriers, a set of passionate social entrepreneurs are disrupting the status quo in education with innovative and effective approaches that are producing measurable results. These education entrepreneurs are providing solutions that work. The challenge now is to build the support to scale these solutions.

Key concepts include:

  • Public education is in a state of crisis. Fixing it requires radically reforming a dysfunctional system.
  • Effective educational reform addresses the root causes of problems, via the disruptive innovation of entrepreneurs.
  • The panelists are all educational entrepreneurs effecting pattern-breaking social change.
  • These education entrepreneurs are providing the R&D for widespread changes in the U.S. education system.

    • Read the in-depth summary

For more coverage and video:
2:15 session:
http://www.hbs.edu/centennial/businesssummit/business-society/the-role-of-social-entrepreneurship-in-transforming-usa-public-education-1.html
3:45 session:
http://www.hbs.edu/centennial/businesssummit/business-society/the-role-of-social-entrepreneurship-in-transforming-usa-public-education-2.html

]]> <![CDATA[Technology Innovation and Diffusion as Sources of Output and Asset Price Fluctuations]]> http://hbswk.hbs.edu/rss/6213.html Thu, 02 Jul 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6213.html
Published:July 2, 2009
Paper Released:May 2009
Authors:Diego A. Comin, Mark Gertler, and Ana Maria Santacreu

Executive Summary:

A central challenge to modern business cycle analysis is that standard macro models are unable to generate fluctuations in the stock market with the amplitude, persistence, and lead-lag pattern observed in the data. At the same time, standard macro models predict that good news about future, such as those received during 1994-1995 on the arrival of IT, lead to recessions rather than expansions. HBS professor Diego Comin and coauthors develop a model that overcomes these two problems by explicitly incorporating an endogenous speed of diffusion of technologies that is increasing in the resources spent in adoption. Revisions in beliefs about future profits generate fluctuations in the stock market with the amplitude and lead over output observed in the data. The firms' investment decisions in adoption leads to a shift in labor demand that increases hours worked and output. Key concepts include:

  • In the model, news about future growth prospects produces movements in current output and hours that are positively correlated with the news.
  • The mechanism described here is also potentially relevant to business fluctuations driven by factors other than news about future technological prospects. In particular, endogenous technology adoption amplifies the effects of these shocks vis-à-vis a model without this mechanism.
  • The framework also broadly captures the cyclical pattern of stock price movements. It can account for the run-up of stock prices in the mid 1990s and also some of the decline preceding the most recent recession.

Abstract

We develop a model in which innovations in an economy's growth potential are an important driving force of the business cycle. The framework shares the emphasis of the recent "new shock" literature on revisions of beliefs about the future as a source of fluctuations, but differs by tieing these beliefs to fundamentals of the evolution of the technology frontier. An important feature of the model is that the process of moving to the frontier involves costly technology adoption. In this way, news of improved growth potential has a positive effect on current hours. As we show, the model also has reasonable implications for stock prices. We estimate our model for data post-1984 and show that the innovations shock accounts for nearly a third of the variation in output at business cycle frequencies. The estimated model also accounts reasonably well for the large gyration in stock prices over this period. Finally, the endogenous adoption mechanism plays a significant role in amplifying other shocks. Keywords: Business Cycles, Endogenous Technology Adoption, News Shocks, Stock Market. JEL classifications: E3, O3. 58 pages.

Paper Information

]]> <![CDATA[File-Sharing and Copyright]]> http://hbswk.hbs.edu/rss/6223.html Wed, 01 Jul 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6223.html
Published:July 1, 2009
Paper Released:May 2009
Authors:Felix Oberholzer-Gee and Koleman Strumpf

Executive Summary:

The researchers argue that file-sharing technology has not undermined the incentives of artists and entertainment companies to create, market, and distribute new works. The advent of new technology has allowed consumers to copy music, books, video games, and other protected works on an unprecedented scale at minimal cost. Such technology has considerably weakened copyright protection, first of music and software and increasingly of movies, video games, and books. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the debate has been overly narrow. Copyright protection exists to encourage innovation and the creation of new works—in other words, to promote social welfare. This essay analyzes the landscape and identifies areas for more research. Key concepts include:

  • Digital technology has lowered the cost of producing movies and music and allowed artists to reach their audience in novel ways.
  • It's difficult to argue that weaker copyright protection has had a negative impact on artists' incentives to be creative.
  • File-sharing has not discouraged authors and publishers. The publication of new books rose by 66 percent over the 2002-2007 period. Since 2000, the annual release of new albums has more than doubled, and worldwide feature film production since 2003 is up by more than 30 percent.
  • How markets for complementary goods (such as concerts, electronics, and communications infrastructure) have responded to file-sharing remains largely unexplored in academic research.

Abstract

The advent of file sharing has considerably weakened effective copyright protection. Today, more than 60% of internet traffic consists of consumers sharing music, movies, books and games. Yet, despite the popularity of the new technology, file sharing has not undermined the incentives of authors to produce new works. We argue that the effect of file sharing has been muted for three reasons. (1) The cannibalization of sales that is due to file sharing is more modest than many observers assume. Empirical work suggests that in music, no more than 20% of the recent decline in sales is due to sharing. (2) File sharing increases the demand for complements to protected works, raising, for instance, the demand for concerts and concert prices. The sale of more expensive complements has added to artists' incomes. (3) In many creative industries, monetary incentives play a reduced role in motivating authors to remain creative. Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers. Since the advent of file sharing, the production of music, books, and movies has increased sharply.

Paper Information

]]> <![CDATA[First Look: June 30]]> http://hbswk.hbs.edu/rss/6227.html Tue, 30 Jun 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6227.html When U.S. venture capital firms cluster in three metropolitan areas—San Francisco, New York, and Boston—does it help their investments further afield? While the phenomenon of clustering is documented in economic literature as long ago as 1920, and local VC-backed firms benefit from proximity to such venture capital centers, new research suggests that the clustering of VC firms helps non-local investments as well.

"This finding is counterintuitive, since venture capitalists might be expected to be the most involved and add the most value to the geographically closest companies," write Henry Chen, Anna Kovner, and HBS professors Paul Gompers and Josh Lerner in "Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion" [PDF]. "We observe this outperformance of non-local companies in both early- and late-stage investments. […] One potential explanation of this higher return to non-local deals is that venture capitalists have a higher hurdle rate (i.e., require a higher expected rate of return) for investments that have a higher monitoring cost." Their findings should interest policymakers who want to attract venture capital to new areas.

In the July-August issue of Harvard Business Review, HBS faculty consider a worst-case scenario of financial free fall ("The Descent of Finance" by Niall Ferguson) and the worrisome impact on future U.S. innovation as manufacturing is outsourced ("Restoring American Competitiveness" by Gary P. Pisano and Willy C. Shih).

— Martha Lagace

Working Papers

Wellsprings of Creation: How Perturbation Sustains Exploration in Mature Organizations (revised)

Authors:David James Brunner, Bradley R. Staats, Michael L. Tushman, and David M. Upton
Abstract

Organizations struggle to balance simultaneous imperatives to exploit and explore, yet theorists differ as to whether exploitation undermines or enhances exploration. The debate reflects a gap—the missing theoretical mechanism by which organizations break free of old routines and discover new ones. We propose that the missing link is perturbation—novel stimuli that disrupt the execution of specialized routines. Perturbation creates opportunities for organizations to invoke exploratory, general-purpose problem-solving routines. In mature organizations, exogenous perturbations become increasingly scarce to the point that exploration is stifled and inertia sets in. We theorize that mature organizations can sustain exploration by deliberately inducing perturbations in their own processes. Our theory yields testable hypotheses about the relationships between exploitation, perturbation, and exploration. We provide illustrations from the Toyota Motor Company to show how deliberate perturbation enables efficient exploration in the midst of intense exploitation.

Download the paper: http://www.hbs.edu/research/pdf/09-011.pdf

Understanding Inflation-Indexed Bond Markets

Authors:John Y. Campbell, Robert J. Shiller, and Luis M. Viceira
Abstract

This paper explores the history of inflation-indexed bond markets in the U.S. and the U.K. It documents a massive decline in long-term real interest rates from the 1990s until 2008, followed by a sudden spike in these rates during the financial crisis of 2008. Breakeven inflation rates, calculated from inflation-indexed and nominal government bond yields, stabilized until the fall of 2008, when they showed dramatic declines. The paper asks to what extent short-term real interest rates, bond risks, and liquidity explain the trends before 2008 and the unusual developments in the fall of 2008. Low inflation-indexed yields and high short-term volatility of inflation-indexed bond returns do not invalidate the basic case for these bonds, that they provide a safe asset for long-term investors. Governments should expect inflation-indexed bonds to be a relatively cheap form of debt financing going forward, even though they have offered high returns over the past decade.

Download the paper from SSRN ($5): http://papers.nber.org/papers/w15014

Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion

Authors:Henry Chen, Paul Gompers, Anna Kovner, and Josh Lerner
Abstract

We document geographic concentration by both venture capital firms and venture capital-financed companies in three cities-San Francisco, Boston, and New York. We find that firms open new satellite offices based on the success rate of venture capital-backed investments in an area. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. Ironically, this outperformance arises from outsized performance outside of the venture capital firms' office locations, including in peripheral locations. Outperformance of non-local investments suggests that policy makers in regions without local venture capitalists might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms.

Download the paper: http://www.hbs.edu/research/pdf/09-143.pdf

Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act

Authors:Dhammika Dharmapala, C. Fritz Foley, and Kristin J. Forbes
Abstract

This paper analyzes the impact on firm behavior of the Homeland Investment Act of 2004, which provided a one-time tax holiday for the repatriation of foreign earnings by U.S. multinationals. The analysis controls for endogeneity and omitted variable bias by using instruments that identify the firms likely to receive the largest tax benefits from the holiday. Repatriations did not lead to an increase in domestic investment, employment or R@amp;D—even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained. Instead, a $1 increase in repatriations was associated with an increase of almost $1 in payouts to shareholders. These results suggest that the domestic operations of U.S. multinationals were not financially constrained and that these firms were reasonably well-governed. The results have important implications for understanding the impact of U.S. corporate tax policy on multinational firms.

Download the paper from SSRN ($5): http://papers.nber.org/papers/w15023

Variation in Experience and Team Familiarity: Evidence from Indian Software Services

Authors:Robert S. Huckman and Bradley R. Staats
Abstract

In settings ranging from product development to service delivery, fluid teams of individuals with different sets of experience are tasked with projects that are critical to their organization's success. Although building teams from individuals with different prior experience is increasingly necessary, prior work examining the relationship between experience and performance fails to find a consistent effect of variation in experience on performance. The problem is that variation in experience improves a team's information processing capacity and knowledge base but also creates coordination challenges. We hypothesize that team familiarity—team members' prior experience working with one another—is one mechanism that helps teams leverage the potential benefits of variation in team member experience by alleviating coordination problems that such variation may create. We use several years of detailed project- and individual-level data from an Indian software services firm, Wipro Technologies, to examine the effects of team familiarity and variation in experience on multiple measures of performance for software development projects. In most cases, we do not find evidence of a significant main effect for variation in experience on performance. However, when we examine the interaction of team familiarity and variation in experience, we see a complementary effect on measures of delivery performance (i.e., a project being delivered on time and on budget). In team familiarity, our paper identifies one mechanism for capturing the performance benefits of variation in experience and provides insight into how the broader management of experience accumulation affects team performance.

Download the paper: http://www.hbs.edu/research/pdf/09-145.pdf

Measuring and Understanding Hierarchy as an Architectural Element in Industry Sectors

Authors:Jianxi Luo, Daniel E. Whitney, Carliss Y. Baldwin, and Christopher L. Magee
Abstract

Hierarchy is a generic structure in which levels are asymmetrically ordered. In an industry setting, classic supply chains display strict hierarchy, whereas clusters of firms have linkages going in many different directions. Previous theory has often assumed the existence of the hierarchical relationships among firms, and empirical work has focused on a single level of an industry or bilateral relationships. However, quantitative evidence on the deep hierarchy in large industrial sectors is lacking. In this paper, we develop metrics and methods to define and measure the degree of hierarchy in transactional relationships among firms and apply the methods to two large industrial sectors in Japan: automotive and electronics. We compiled the networks of firms connected by transactional relationships. Our empirical analysis shows that the automotive sector exhibits a higher degree of hierarchy than the electronics sector. We further analyze the differences in hierarchy using a simulation model based on transaction breadth and transaction specificity. The empirical measurement and model analysis together indicate that it is the low transaction specificity that drives down the degree of hierarchy in the electronics sector. Differences in transaction patterns in turn may result from the differences in the power level of underlying technologies, which affect product specificity and asset specificity. Thus, the degree of hierarchy in an industry sector may be traced back to fundamental properties of the underlying technologies.

Download the paper: http://www.hbs.edu/research/pdf/09-144.pdf

Unraveling Results from Comparable Demand and Supply: An Experimental Investigation

Authors:Muriel Niederle, Alvin E. Roth, and M. Utku Ünver
Abstract

Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.

Download the paper from SSRN ($5): http://papers.nber.org/papers/W15006

Publications

Preferential Treatment: The New Face of Protectionism?

Author:Regina M. Abrami
Publication:Harvard Business Review 87, nos. 7-8 (July-August 2009)
Abstract

Free trade agreements have increased dramatically over the past decade. This forethought considers how they present global executives with thorny strategic and operational decisions, a piece of which has to do with China's entry into the FTA scene.

Implicit Affect in Organizations

Authors:Sigal G. Barsade, Lakshmi Ramarajan, and Drew Westen
Publication:Research in Organizational Behavior (forthcoming)
Abstract

Our goal is to integrate the construct of implicit affect—affective processes activated or processed outside of conscious awareness that influence ongoing thought, behavior, and conscious emotional experience—into the field of organizational behavior. We begin by offering a definition and review of implicit processes, including implicit cognition, motivation, and affect. We then draw upon recent empirical research in psychology and neuroscience to make the case for a three-category framework of implicit affect: (1) implicit sources of affect, (2) implicit experiencing of affect, and (3) implicit regulation of affect. To demonstrate the use of this framework in organizational scholarship, we present illustrative examples from organizational behavior research that represent each category. Given the limited amount of research in the organizational domain, we focus on demonstrating how an implicit affect perspective might alter or extend theoretical perspectives about a variety of organizational phenomena. We then discuss methodological options and challenges for studying implicit affect within the organizational domain. In sum, we provide a theoretical and methodological roadmap as well as a call for action for understanding the role of implicit affective processes in organizational behavior.

The Descent of Finance

Author:Niall Ferguson
Publication:Harvard Business Review 87, nos. 7-8 (July-August 2009)
Abstract

What if the current recession turns out to be like the Great Depression of 1929-1933? Four years from now, the United States might find itself with a still-shrinking economy, half as many banks as in 2009, a third as many hedge funds, and retail banking resembling a public utility. The federal debt could be at $20 trillion, the top income tax rate at 45%, and the S&P 500 at 418. Ferguson, a professor at Harvard University and Harvard Business School, imagines that to be the worst-case scenario. The Breakdown, as Ferguson calls it, would alter the international economic order too, with China's GDP rising to half that of the U.S. by 2013 and the IMF's Special Drawing Rights replacing the dollar as the international reserve currency. Ferguson analyzes the roots of the crisis as well as the measures taken by the Obama administration to tackle it. He goes on to describe the impact on the global economy and points out that the slowdown is hurting other nations more than the United States, thereby building a powerful case for a somewhat more sanguine view of America's future. In a better-case 2013, he posits, the Federal Reserve's policies have produced neither inflation nor deflation, a remarkable number of new banks have appeared, the top income tax rate is 35%, and the S&P 500 stands at 976. Because the world has become more dangerous as well as poorer, everyone looks to the United States to continue acting as a global policeman—and the greenback is still the world's currency of choice.

The Agglomeration of U.S. Ethnic Inventors

Author:William R. Kerr
Publication:In Economics of Agglomeration, edited by Edward Glaeser. Chicago, Ill.: University of Chicago Press, forthcoming. (Harvard Business School Working Paper, No. 09-003, July 2008.)
Abstract

The ethnic composition of U.S. inventors is undergoing a significant transfor ation—with deep impacts for the overall agglomeration of U.S. innovation. This study applies an ethnic-name database to individual U.S. patent records to explore these trends in greater detail. The contributions of Chinese and Indian scientists and engineers to U.S. technology formation increased dramatically in the 1990s. At the same time, these ethnic inventors became more spatially concentrated across U.S. cities. The combination of these two factors helped stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. The heightened ethnic agglomeration is particularly evident in industry patents for high-tech sectors, and similar trends are not found in institutions constrained from agglomerating (e.g., universities and government).

Download the paper from SSRN ($5): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1162226

Restoring American Competitiveness

Authors:Gary P. Pisano and Willy C. Shih
Publication:Harvard Business Review 87, nos. 7-8 (July-August 2009)
Abstract

For decades, U.S. companies have been outsourcing manufacturing in the belief that it held no competitive advantage. That's been a disaster, maintain Harvard professors Pisano and Shih, because today's low-value manufacturing operations hold the seeds of tomorrow's innovative new products. What those companies have been ceding is the country's industrial commons—that is, the collective operational capabilities that underpin new product and process development in the U.S. industrial sector. As a result, America has lost not only the ability to develop and manufacture high-tech products like televisions, memory chips, and laptops but also the expertise to produce emerging hot products like the Kindle e-reader, high-end servers, solar panels, and the batteries that will power the next generation of automobiles. To rebuild the commons and restore its wealth-generating machine will require government and industry in the U.S. to make two drastic changes: First, the government must change the way it supports basic and applied scientific research to promote the broad collaboration with business and academia needed to tackle society's big problems. Second, corporate management practices and governance structures must be overhauled so they no longer exaggerate the payoffs and discount the dangers of outsourcing production and cutting investments in R&D. Restoring the ability of enterprises to develop and manufacture high-tech products in America is the only way the country can hope to pay down its enormous deficits and raise its citizens' standard of living.

Cases & Course Materials

Financial Networks and Informal Banking in China: From Pawnshops to Private Equity

Harvard Business School Note 809-111

Provides an analysis of why informal financial networks and institutions still play an extremely important role in China's economy in the 21st century. Although China has emerged as one of the fastest growing economies in the world, it still suffers from a weak financial system dominated by state-controlled banks and severely limited access to capital for private entrepreneurs and consumers. The case shows how the political climate, economic regulatory environment, and social attitudes towards lending practices have shaped the approach to and structure of financing private enterprises over time. It also addresses the response of the Chinese government to the resilient curb market in the context of the economic reforms and policy changes for the banking and financial sector.

Purchase this note:
http://hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=809111

KenCall—Can Nik Nesbitt's Venture Succeed in Kenya?

Harvard Business School Case 809-114

Nik Nesbitt is preparing a presentation of his Kenyan contact center startup to a group of angel investors visiting for the first time. The task has given him cause for some soul searching: has it been worth it to battle the impoverished infrastructure and inappropriate government regulations to launch this venture?

Purchase this case:
http://hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=809114

TOTO: The Bottom Line

Harvard Business School Case 809-064

TOTO, the leading manufacturer of toilets in Japan, is struggling to penetrate the U.S. market with its premier bidet-toilets, which are present in 63% of homes in Japan. The case examines the behavioral, cultural, and institutional barriers that TOTO faces in gaining adoption of an innovation. It also explores the role of product categorization in driving consumer behavior—in contrast to the U.S., toilets in Japan are considered a high-tech consumer electronic device. Finally, the role of organizational identity and culture is examined. The creation of the bidet-toilet category in Japan was a defining accomplishment for TOTO, and this history has created a strong commitment to promoting it in the U.S. But given that TOTO has been highly successful selling regular high-end toilets in the U.S., is this commitment to the bidet-toilet appropriate?

Purchase this case:
http://hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=809064

]]> <![CDATA[Business Summit: The Role of Business Leaders in Sustaining Market Capitalism]]> http://hbswk.hbs.edu/rss/6196.html Tue, 30 Jun 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6196.html
Date of Event:October 14, 2008
Moderators:Joseph L. Bower, HBS faculty
David A. Moss, HBS faculty
Lynn S. Paine, HBS faculty
Speakers:Rahul Bajaj, Chairman, Bajaj Auto Ltd.
Nancy M. Barry, President, Nancy Barry Associates
Bertrand P. Collomb, Honorary Chairman and Director, Lafarge
Jorge Paulo Lemann, Founder, InBev
David Murray, Chair of the Board, Guardians of the Future Fund
Gustavo Roosen, Chairman, Envases Venezolanos SA

Editor's Note: This is a summary of an HBS Business Summit presentation. View a full summary and video of the event on the HBS Centennial Web site linked below.

Two separate panels shared their views with HBS faculty on the challenges faced by and the future of market capitalism, with very different perspectives among the panelists.

In recent HBS research, most business leaders agree on the threats to market capitalism. These threats include income inequality, environmental issues, inadequate governance, and lack of transparency. But these same leaders have very different perspectives on the most appropriate path forward.

Some feel the sole focus of business should be on building great companies. Others believe that for market capitalism to be seen as legitimate, it must consider the interests not just of shareholders, but of all stakeholders. Several panelists see societal problems as opportunities for entrepreneurial businesses. They believe it is possible for business to help solve societal problems, improve the standard of living in poor countries, and also earn an attractive profit. In this way, market capitalism can be a legitimate and sustainable solution for some of the world's major problems.

Key concepts include:

  • HBS research shows that attitudes toward market capitalism fall into four categories.
  • Although some feel that market capitalism solves problems by self-correcting, there is still a belief that business leaders must act ethically.
  • Light regulation across all aspects of the business world could promote greater transparency.
  • To sustain market capitalism, businesses must earn legitimacy in the eyes of society.
  • Opportunities exist for entrepreneurial businesses to market products/services to low-income people, providing a new source of profits and benefitting society.
  • Greater emphasis is needed on employees and the human systems within business.
  • The public and private sectors can play distinctive roles, while co-existing harmoniously.

    • Read the in-depth summary

For more coverage and video:
2:15 session
http://www.hbs.edu/centennial/businesssummit/market-capitalism/the-role-of-business-leaders-in-sustaining-market-capitalism-1.html
3:45 session
http://www.hbs.edu/centennial/businesssummit/market-capitalism/the-role-of-business-leaders-in-sustaining-market-capitalism-2.html

]]> <![CDATA[Sharpening Your Skills: Leading Change]]> http://hbswk.hbs.edu/rss/6232.html Mon, 29 Jun 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6232.html
Published:June 29, 2009
Author:Staff

Sharpening Your Skills dives into the HBS Working Knowledge archives to bring together articles on ways to improve your business skills.

Questions to be Answered:

  • How do I build my business in this environment?
  • What should leaders communicate?
  • My organization doesn't have the fire it needs. What can I do?
  • What are key enterprise risk-management strategies?

How do I build my business in this environment?

Building Businesses in Turbulent Times

An economic crisis is a charter for business leaders to rewrite and rethink how they do business, says professor Lynda M. Applegate. The key: Don't think retrenchment; think growth. Key concepts include:

  • Companies that survive the financial crisis by identifying and exploiting innovation will serve as economic growth engines in the future—and will be the industry leaders of tomorrow.
  • This is a time of unprecedented opportunity to rethink offerings, markets, business processes, and organizational structure—and to improve them to achieve growth.
  • Success will depend on leaders who are able to stabilize the company as they identify and exploit opportunities, find new market niches, create innovative new offerings, and restructure and reposition.

What should leaders communicate?

Uncompromising Leadership in Tough Times

As companies batten down the hatches, we need leaders who do not compromise on standards and values that are essential in flush times. Fortunately, such leaders do exist. Their insights can help other organizations weather the current crisis, says Professor Michael Beer. Key concepts include:

  • The CEOs in high commitment, high performance (HCHP) organizations are quite different in personality, background, and leadership style. But they are similar in what they see as the purpose of the firm.
  • Among employees at large, there is a danger that commitment to an organization can undermine work-life balance. Successful CEOs are good role models.
  • In addition to open and honest communication and continued investment in HCHP management practices, corporations need to develop an a priori set of policies in advance of the crisis that will minimize damage from restructuring and downsizing and maintain employee dignity and commitment.

My organization doesn't have the fire it needs. What can I do?

Book Excerpt: A Sense of Urgency

Urgency can be a positive force in companies, says leadership expert and professor emeritus John P. Kotter. His book A Sense of Urgency makes that conviction clear. Our excerpt describes how leaders might skillfully transform a crisis into an organizational motivator for the better. Key concepts include:

  • Always think of crises as potential opportunities, and not only dreadful problems that automatically must be delegated to the damage control specialists.
  • Plans and actions should always focus on others' hearts as much or more than their minds.
  • If you are at a middle or low level in an organization and see how a crisis can be used as an opportunity, identify and then work with an open-minded and approachable person who can take the lead.

What are key enterprise risk management strategies?

Business Summit: Enterprise Risk Management

Risk management is a key to sustained firm growth, says Professor Robert S. Kaplan. Key ingredients to a successful risk management program include the proper culture, clear parameters, discipline, measurement, and accountability.

]]> <![CDATA[Business Summit: Business and the Environment]]> http://hbswk.hbs.edu/rss/6216.html Fri, 26 Jun 2009 10:00:00 EDT http://hbswk.hbs.edu/rss/6216.html
Date of Event:October 13, 2008
Moderator:Forest Reinhardt, HBS faculty
Speakers:Jim Barry, Chief Executive, Ntr Plc
David Blood, Managing Partner, Generation Investment Management
James McCarthy, Harvard University faculty

Editor's Note: This is a summary of an HBS Business Summit presentation. View a full summary and video of the event on the HBS Centennial Web site linked below.

These experts shared their perspectives on global climate change. Professor McCarthy discussed scientific findings; Blood provided an investor's point of view; and Barry provided the perspective of an executive with a portfolio of environmentally focused businesses.

An environmental crisis exists, almost certainly due to human action. Temperatures and sea levels are rising; ice is melting. If the causes for these problems are not addressed—and fast—the consequences for the planet are likely to be disastrous. Governments, business, and consumers must act to address climate change.

The actions must deal with resource supply issues and renewable energy, as well as with demand issues. Ultimately, these actions will lead to a transition from a high-carbon to a low-carbon society, a transition of enormous magnitude that could happen very quickly. This transition will be a journey that will bring attractive investment and business opportunities, but won't be without peril.

Key concepts include:

  • The earth has experienced significant human-driven climate change over the past hundred years.
  • In the United States, climate change is becoming a priority.
  • Sustainability will drive business in the next 25 years.
  • The transition to a low-carbon economy will bring about significant investment opportunities.
  • It is a perfect storm: climate change, security of energy resources, and resource depletion.

    • Read the in-depth summary

For more coverage and video:
http://www.hbs.edu/centennial/businesssummit/business-society/business-and-the-environment.html

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