Working Papers
There are 346 working paper digests.
A large number of Harvard Business School faculty write working papers that summarize original research in a narrow segment of a field of study, and that are intended for publication within a period of one to three years. Descriptions and papers are posted on the HBS Faculty and Research Web site. Our archive focuses on those working papers that are publicly accessible for download. We add an executive summary to the author’s own abstract. For the most recent work, see our First Look section.
Accountability and Control as Catalysts for Strategic Exploration and Exploitation: Field Study Results
| Author: | Robert L. Simons |
|---|---|
| Published: | February 3, 2010 |
| Paper Release Date: | January 2010 |
| Feature: | Working Papers |
The need for organizations to both exploit current resources and explore new opportunities is a central and long-standing theme in the literature of organizations. The challenge, of course, is that these two imperatives require very different structures and skills. Exploitation demands a focus on efficiency and effectiveness in executing preset plans and procedures. Exploration requires the ability to step outside these routines by emphasizing experimentation, creativity, and novelty. In this study, HBS professor Robert L. Simons focuses on the relationship between two organization design variables—span of control and span of accountability. Using data from 102 field studies, he illustrates how these variables can be manipulated by managers to tilt the balance toward either exploration or exploitation in response to different tasks, different organizational contexts, and changing competitive environments.
Does Product Market Competition Lead Firms To Decentralize?
| Authors: | Nicholas Bloom, Raffaella Sadun, and John Van Reenen |
|---|---|
| Published: | January 28, 2010 |
| Paper Release Date: | January 2010 |
| Feature: | Working Papers |
There is a widespread sense that over the last two decades firms have been decentralizing decisions to employees further down the managerial hierarchy. Economists have developed a range of theories to account for delegation, but there is less empirical evidence, especially across countries. This has limited the ability to understand the phenomenon of decentralization. Nicholas Bloom, HBS professor Raffaella Sadun, and John Van Reenen assembled a new data set on about 4,000 firms across 12 countries in Europe, North America, and Asia, and then measured the delegation of authority from central headquarters to local plant managers.
Labor Regulations and European Private Equity
| Authors: | Ant Bozkaya and William R. Kerr |
|---|---|
| Published: | January 27, 2010 |
| Paper Release Date: | December 2009 |
| Feature: | Working Papers |
Recent theoretical models predict that countries with stricter labor policies will specialize in less innovative activities due to the higher worker turnover frequently associated with rapidly changing sectors. HBS visiting scholar Ant Bozkaya and HBS professor William R. Kerr examine how differences in labor regulations across European countries influence the development of private equity markets, comprised of venture capital and buy-out investors. In so doing, the researchers provide the first empirical evidence for this theoretical prediction at the industry level in the entrepreneurial finance literature. They also make a methodological contribution by demonstrating how jointly modeling the different policies for providing worker insurance delivers more consistent results than their individual relationships would indicate by themselves.
Competing Ad Auctions: Multi-homing and Participation Costs
| Authors: | Itai Ashlagi, Benjamin G. Edelman, and Hoan Soo Lee |
|---|---|
| Published: | January 22, 2010 |
| Paper Release Date: | January 2010 |
| Feature: | Working Papers |
Joining ad platforms can attract substantial regulatory attention: In November 2008, the Department of Justice planned to file antitrust charges to stop the proposed Google-Yahoo transaction. More recently, in September 2009, the Department of Justice sought additional information from Microsoft and Yahoo about their proposed partnership. At first glance it might seem paradoxical to claim that the Google-Yahoo transaction is undesirable, for advertisers and for the economy as a whole, while the Microsoft-Yahoo transaction offers net benefits. But that conclusion is entirely possible. HBS professor Benjamin G. Edelman and doctoral candidates Itai Ashlagi and Hoan Soo Lee explore competition among ad platforms that offer search engine advertising services. In addition, the authors evaluate possible transactions among ad platforms—building tools to predict which transactions improve welfare and which impede it.
Going Through the Motions: An Empirical Test of Management Involvement in Process Improvement
| Author: | Anita L. Tucker |
|---|---|
| Published: | January 21, 2010 |
| Paper Release Date: | December 2009 |
| Feature: | Working Papers |
How can managers better lead their organizations to improve work processes? Describing their study of hospitals over an 18-month period, HBS professor Anita L. Tucker and Harvard School of Public Health professor Sara J. Singer detail how and why managers' taking action was more effective than their communicating about actions taken. Findings suggest, first, that taking action on known problems in specific work areas on at least a quarterly basis may improve the organizational climate for improvement. Second, the study indicates that managers would be well advised to take action-preferably substantive and intense action-in response to frontline workers' communications about problems. Overall, the research provides insight for senior managers who want to improve their organization's climate for process improvement.
Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions
| Authors: | Benjamin G. Edelman and Michael Schwarz |
|---|---|
| Published: | January 14, 2010 |
| Paper Release Date: | January 2010 |
| Feature: | Working Papers |
Reserve prices may have an important impact on search advertising marketplaces. But the effect of reserve prices can be opaque, particularly because it is not always straightforward to compare "before" and "after" conditions. HBS professor Benjamin G. Edelman and Yahoo's Michael Schwarz use a pair of mathematical models to predict responses to reserve prices and understand which advertisers end up paying more.
Private Equity and Industry Performance
| Authors: | Shai Bernstein, Josh Lerner, Morten Sørensen, and Per Strömberg |
|---|---|
| Published: | January 13, 2010 |
| Paper Release Date: | December 2009 |
| Feature: | Working Papers |
In response to the global financial crisis that began in 2007, governments worldwide are rethinking their approach to regulating financial institutions. Among the financial institutions that have fallen under the gaze of regulators have been private equity (PE) funds. There are many open questions regarding the economic impact of PE funds, many of which cannot be definitively answered until the aftermath of the buyout boom of the mid-2000s can be fully assessed. HBS professor Josh Lerner and coauthors address one of these open questions, by examining the impact of PE investments across 20 industries in 26 major nations between 1991 and 2007. In particular, they look at the relationship between the presence of PE investments and the growth rates of productivity, employment, and capital formation.
International Differences in the Size and Roles of Corporate Headquarters: An Empirical Examination
| Authors: | David Collis, David Young, and Michael Goold |
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| Published: | January 7, 2010 |
| Paper Release Date: | December 2009 |
| Feature: | Working Papers |
Are small headquarters more nimble and efficient than large ones? Not necessarily, according to HBS adjunct professor David Collis and coauthors David Young and Michael Goold. Even within a single industry in one country, the variance can be enormous: In Germany in the late 1990s, for instance, Hoechst, the chemical and pharmaceutical manufacturer, had only 180 people in the headquarters function at the same time that Bayer had several thousand. This paper seeks to fill gaps in the research by using a unique database of over 600 companies in seven countries to determine whether systematic differences in the size and roles of corporate headquarters between countries actually exist, and if so, how they differ. In particular, the authors examine whether there is a systematic difference between market- and bank-centered economies, and between developed and developing countries.
Published in 2009
The Global Networks of Multinational Firms
| Authors: | Laura Alfaro and Maggie Chen |
|---|---|
| Published: | December 23, 2009 |
| Paper Release Date: | December 2009 |
| Feature: | Working Papers |
When and why do multinationals group together overseas? Do they agglomerate in the same fashion abroad as they do at home? An answer to these questions is central to the long-standing debate over the consequences of foreign direct investment (FDI). It is critical to understand interdependencies of multinational networks and how multinationals influence one another in their activities at home and overseas. HBS professor Laura Alfaro and George Washington University professor Maggie Chen examine the global network of multinationals and study the significance and causes of multinational agglomeration. Their results provide further evidence of the increasing separation of headquarters services and production activities within multinational firms. The differential specialization of headquarters and subsidiaries leads to distinct patterns of agglomeration.
Integrity: Without It Nothing Works
| Author: | Michael C. Jensen |
|---|---|
| Published: | December 17, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
"An individual is whole and complete when their word is whole and complete, and their word is whole and complete when they honour their word," says HBS professor Michael C. Jensen in this interview that appeared in Rotman: The Magazine of the Rotman School of Management, Fall 2009. Jensen (and his coauthors, Werner Erhard and Steve Zaffron) define and discuss integrity ("a state or condition of being whole, complete, unbroken, unimpaired, sound, in perfect condition"); the workability that integrity creates for individuals, groups, organizations, and society; and its translation into organizational performance. He also discusses the costs of lacking integrity and the fallacy of using a cost/benefit analysis when deciding whether to honor your word.
The End of Chimerica
| Authors: | Niall Ferguson and Moritz Schularick |
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| Published: | December 16, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
For the better part of the past decade, the world economy has been dominated by a unique geoeconomic constellation that the authors call "Chimerica": a world economic order that combined Chinese export-led development with U.S. overconsumption on the basis of a financial marriage between the world's sole superpower and its most likely future rival. For China, the key attraction of the relationship was its potential to propel the Chinese economy forward by means of export-led growth. For the United States, Chimerica meant being able to consume more, save less, and still maintain low interest rates and a stable rate of investment. Yet, like many another marriage between a saver and a spender, Chimerica was not destined to last. In this paper, economic historians Niall Ferguson of HBS and Moritz Schularick of Freie Universität Berlin consider the problem of global imbalances and try to set events in a longer-term perspective.
State Owned Entity Reform in Absence of Privatization: Reforming Indian National Laboratories and Role of Leadership
| Authors: | Prithwiraj Choudhury and Tarun Khanna |
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| Published: | December 10, 2009 |
| Paper Release Date: | July 2009 |
| Feature: | Working Papers |
Is privatization necessary? In India and across emerging markets, state-owned entities (SOEs) continue to make up a large proportion of industrial sales, yet they lag behind private counterparts on performance measures. But SOEs may be able to significantly improve performance even in the absence of property rights, according to HBS doctoral candidate Prithwiraj Choudhury and professor Tarun Khanna. As they document, 42 Indian state-owned laboratories started from a base of negligible U.S. patents, yet in the period 1993-2006 (during which the Indian government launched an ambitious privatization program), the labs were granted more patents than all domestic private firms combined. The labs then licensed several of these patents to multinationals, and licensing revenue increased from 3 percent to 15 percent as a fraction of government budgetary support. Findings are relevant to firms and R&D entities around the world that depend on varying degrees of government budgetary support and government control, especially in emerging markets like India, where SOEs control up to one-third of all industrial activity.
Mental Health in the Aftermath of Conflict
| Authors: | Quy-Toan Do and Lakshmi Iyer |
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| Published: | December 9, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
Wars are detrimental to the populations and the economy of affected countries. Over and above the human cost caused by deaths and suffering during a time of conflict, survivors of conflict are often left in poor economic circumstances and mental-health distress even after the conflict ends. How large are these costs? How long does it take for conflict-affected populations to recover from the mental stress of conflict? What policies are appropriate to assist mental health recovery? While considerable attention has been paid to post-war policies with regard to recovery in physical and human capital, mental health has received relatively less attention. The World Bank's Quy-Toan Do and HBS professor Lakshmi Iyer review the nascent literature on mental health in the aftermath of conflict, discuss the potential mechanisms through which conflict might affect mental health, and illustrate the findings from their study of mental health in a specific post-conflict setting: Bosnia and Herzegovina.
Walking the Talk in Multiparty Bargaining: An Experimental Investigation
| Authors: | Kathleen L. McGinn, Katherine L. Milkman, and Markus Nöth |
|---|---|
| Published: | December 3, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
Talk can unite, but it can also divide. In multiparty bargaining, communication can focus parties on a fair distribution of resources, but it can also focus parties on a competitive distribution of resources. As HBS professor Kathleen L. McGinn and coauthors Katherine L. Milkman and Markus Nöth show through experiments, at the onset of interaction the dominant logic in discussions—be it fairness or competition—strongly influences the equality of payoffs even in complex, full-information multiparty bargaining. Increases in the relative frequency of talk about fairness are associated with payoffs closer to an equal split. Talk about competitive reasoning has the opposite effect, driving payoffs away from an equal division, though these effects are less consistent than fairness talk effects. The researchers' results add critical insights to our understanding of the role of communication in multiparty bargaining.
Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation
| Authors: | Carliss Y. Baldwin and Eric von Hippel |
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| Published: | December 1, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
We are in the midst of a major paradigm shift: technological trends are causing a change in the way innovation gets done in advanced market economies. In addition to the model of producer-based design—the idea that most important designs for innovations would originate from producers and be supplied to consumers via goods and services that were for sale—two increasingly important models are innovations by single user firms or individuals, and open collaborative innovation projects. Each of these three models represents a different way to organize human effort and investments aimed at generating valuable new innovations. HBS professor Carliss Y. Baldwin and MIT Sloan School of Management professor Eric von Hippel analyze the three models in terms of their technological properties, specifically their design costs and architectures, and their communication requirements. The researchers argue that as design and communication costs decline, single user and open collaborative innovation models will be viable for a steadily wider range of design. These two models will present an increasing challenge to the traditional paradigm of producer-based design—but, when open, they are good for social welfare and should be encouraged by policymakers.
The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
| Authors: | Roy Y.J. Chua and Xi Zou |
|---|---|
| Published: | November 25, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. Two experiments showed that exposure to luxury led people to think more about themselves than others.
From Strategy to Business Models and to Tactics
| Authors: | Ramon Casadesus-Masanell and Joan Enric Ricart |
|---|---|
| Published: | November 24, 2009 |
| Paper Release Date: | November 2009 |
| Feature: | Working Papers |
Drivers such as globalization, deregulation, or technological change, just to mention a few, are profoundly changing the competitive game. Scholars and practitioners agree that the fastest-growing firms in this new environment appear to have taken advantage of these structural changes to compete "differently" and innovate in their business models. However, there is not yet agreement on what are the distinctive features of superior business models. This dispute may have arisen, in part, because of a lack of a clear distinction between the notions of strategy, business model, and tactics. HBS professor Ramon Casadesus-Masanell and Joan Enric Ricart present an integrative framework to distinguish and relate the concepts of business model, strategy, and tactics.
Management and the Financial Crisis (We Have Met the Enemy and He is Us …)
| Author: | William A. Sahlman |
|---|---|
| Published: | November 19, 2009 |
| Paper Release Date: | October 2009 |
| Feature: | Working Papers |
We have spent the past year mired in a global financial crisis that few saw coming and that will plague us for years to come. Such crises are gut-wrenching. Collectively and individually, we search for causes and solutions. Too often, we look for quick fixes that do long‐term damage, or we put the equivalent of duct tape on obvious problems, missing the true root causes. HBS professor William A. Sahlman argues that the macroeconomic problems were the result of terrible microeconomic decisions. The root cause of bad decision‐making resides in the nexus of culture, incentives, control and measurement, accounting, and human capital. We now have a unique opportunity to force a review of all the players in the financial system, from individual consumers to politicians and regulators to management teams at financial services firms.
India Transformed? Insights from the Firm Level 1988-2005
| Authors: | Laura Alfaro and Anusha Chari |
|---|---|
| Published: | November 18, 2009 |
| Paper Release Date: | October 2009 |
| Feature: | Working Papers |
Between 1986 and 2005, Indian growth put to rest the concern that there was something about the "nature of India" that made rapid growth difficult. Following broad-ranging reforms in the mid-1980s and early 1990s, the state deregulated entry, both domestic and foreign, in many industries, and also hugely reduced barriers to trade. Laura Alfaro of Harvard Business School and Anusha Chari of the University of North Carolina at Chapel Hill analyze the evolution of India's industrial structure at the firm level following the reforms. Despite the substantial increase in the number of private and foreign firms, the overall pattern that emerges is one of continued incumbent dominance in terms of assets, sales, and profits in both state-owned and traditional private firms.
Walking Through Jelly: Language Proficiency, Emotions, and Disrupted Collaboration in Global Work
| Authors: | Tsedal Neeley, Pamela J. Hinds, and Catherine Durnell Cramton |
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| Published: | November 12, 2009 |
| Paper Release Date: | June 2009 |
| Feature: | Working Papers |
As organizations increasingly globalize, individuals are required to collaborate with coworkers across international borders. Many organizations are mandating English as the lingua franca, or common language, regardless of the location of their headquarters, to facilitate collaboration across national and linguistic boundaries. What is the emotional impact of lingua franca adoption on native and nonnative speakers who work closely together and often across national boundaries? This study examines the communication experience for native and nonnative English speakers in an organization that mandates English as the lingua franca for everyday use, and the impact of the lingua franca on collaboration among globally distributed coworkers. HBS professor Tsedal Neeley and coauthors describe in detail how emotions and actions were intertwined and evolved recursively as coworkers attempted to release themselves from unwanted negative emotions and inadvertently acted in ways that transferred negative experiences to their distant coworkers. Their findings have implications for managers who are charged with overseeing internationally distributed projects.
