- 13 Jul 2021
- Cold Call Podcast
Strategies for Underdogs: How Alibaba’s Taobao Beat eBay in China
In 2007, Alibaba’s Taobao became China’s leading consumer e-commerce marketplace, displacing the once dominant eBay. How did underdog Taobao do it? And will it be able to find a way to monetize its marketplace and ensure future success? Professor Felix Oberholzer-Gee discusses his case, “Alibaba’s Taobao,” and related strategy lessons from his new book, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance. Open for comment; 0 Comments.
- 20 Apr 2021
- Book
A Simple Question That Can Guide Companies to Epic Success
Will that big idea create value? In Better, Simpler Strategy, Felix Oberholzer-Gee shows how even the most innovative companies adhere to one basic principle. He delves further into his framework in a new video. Open for comment; 0 Comments.
- 04 Jun 2018
- Research & Ideas
Think of it as Professors in Cars Having Coffee
Has the art of civil debate returned? In the new Harvard Business School podcast series After Hours, professors Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai discuss issues ranging from gun control to voice-activated digital assistants. Open for comment; 0 Comments.
- 13 Oct 2015
- Research & Ideas
Does Business Get Done the Same Way in Emerging and Developed Countries?
Leaders of two prominent business enterprises in Turkey, Rahmi M. Koç and Hamdi Akin, discuss the advantages and challenges of being entrepreneurs in an emerging economy with Professor Felix Oberholzer-Gee. Open for comment; 0 Comments.
- 02 Apr 2015
- Research & Ideas
Digital Initiative Summit: Who Has the Power in the Music Industry?
With inexpensive recording technology and distribution, today's musicians can push their work in front of many new audiences. But to make money, they must learn the instruments of business. Open for comment; 0 Comments.
- 02 Jul 2012
- Research & Ideas
Why Good Deeds Invite Bad Publicity
Many executives assume that investments in corporate social responsibility create public goodwill. But do they? Felix Oberholzer-Gee and colleagues find surprising results when it comes to oil spills. Closed for comment; 0 Comments.
- 04 May 2012
- Working Paper Summaries
No News Is Good News: CSR Strategy and Newspaper Coverage of Negative Firm Events
This study examines the gatekeeping role of the media in determining which negative corporate events reach a broader audience. Jiao Luo, Stephan Meier, and Felix Oberholzer-Gee test the idea that investments in corporate social responsibility (CSR) create public good will, leading the media to treat companies with a superior CSR track record in a favorable manner. They find the opposite. Newspapers are more likely to report negative news about companies if the companies invested heavily in CSR. For example, oil companies that invest in clean energy face a greater risk of media coverage in the event of an oil spill. An analysis of the tone of media coverage shows that news reports are no more positive for CSR leaders than for the average company. Key concepts include: As expectations about a company's performance rise with past investments in CSR, the cost associated with negative corporate events increases. News editors favor two types of stories: surprising incidents and events that conform to widely-held beliefs. Executives who wish to minimize the risk of media attention to negative events need to be careful not to place their organizations at the very top or the very bottom of CSR rankings. Being in the middle of the pack generates the least amount of coverage. Closed for comment; 0 Comments.
- 07 Feb 2012
- Working Paper Summaries
Earnings Management from the Bottom Up: An Analysis of Managerial Incentives Below the CEO
Many studies as well as anecdotes document a link between the structure of chief executive officer (CEO) compensation and various measures of earnings manipulation. In this paper, HBS professors Oberholzer-Gee and Wulf analyze all components of compensation packages for CEOs and for managers at lower levels in a large sample of firms over more than 10 years, between 1986 and 1999. Results suggest that the effects of incentive pay on earnings management vary considerably by both type of incentive pay and position. Overall, it appears that the primary focus of compensation committees on equity incentives for CEOs overlooks a critical component in curbing earnings manipulation. If one wanted to weaken incentive pay to get more truthful reporting, diluting bonuses-particularly that of the chief financial officer (CFO)-would be the place to start. This may be the first study to analyze the relationship between CEO, division manager, and CFO compensation and earnings management. Key concepts include: It is important to look at positions below the CEO because it is unclear if all or even most financial misreporting is decided at the top. In addition to division managers, the importance of the CFO's role in financial reporting and the numerous recent corporate fraud cases suggest that CFOs can significantly affect accounting quality. Companies report significantly higher discretionary accruals and excess sales and have a higher incidence of future lawsuits when CFOs are paid larger bonuses. Importantly, the magnitudes of these effects are much larger for CFOs in comparison to both CEOs and division managers. Since the quality of financial reporting is difficult to assess, the researchers have used various measures of earnings manipulation in this study, including discretionary accounting accruals, end-of-year excess sales, and class action litigation. Closed for comment; 0 Comments.
- 29 Sep 2011
- Sharpening Your Skills
Sharpening Your Skills: Leveraging Intellectual Property
Many companies lack a coherent policy for maximizing the value of their intellectual property. In this collection from our archives, Harvard Business School faculty offer insights on the importance of IP and how best to protect and use it. Closed for comment; 0 Comments.
- 08 Jul 2009
- Working Paper Summaries
Truth in Giving: Experimental Evidence on the Welfare Effects of Informed Giving to the Poor
It is often difficult for donors to predict the value of charitable giving because they know little about the persons who receive their help. While there is substantial evidence that individuals use information about recipients to decide how generous a donation to make, we know surprisingly little about how much donors care to help their preferred types. To start closing this gap, HBS professor Felix Oberholzer-Gee and Carnegie Mellon University coauthor Christina Fong study transfers of income to real-world poor people in the context of experimental games. Their findings have implications for governments and nongovernmental organizations that seek to increase the financial and political support for wealth transfer programs. Key concepts include: From a government and NGO perspective, it is important to produce credible signals about deservedness that are hard to ignore. There is clear evidence that a significant group of donors is willing to invest resources to achieve a distribution of income that better matches its preferences. Facing a deserving person without much "moral wiggle room" to justify self-interested decisions leads to increased donations to the poor. Closed for comment; 0 Comments.
- 01 Jul 2009
- Working Paper Summaries
File-Sharing and Copyright
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. Closed for comment; 0 Comments.
- 17 Dec 2007
- Research & Ideas
The Rise of Medical Tourism
Medical tourism—traveling far and wide for health care that is often better and certainly cheaper than at home—appeals to patients with complaints ranging from heart ailments to knee pain. Why is India leading in the globalization of medical services? Q&A with Harvard Business School's Tarun Khanna. Key concepts include: Medical tourism is a new term but not a new idea. Patients have long traveled in search of better care. Today, constraints and long waiting lists at home, as well as the ease of global travel, make medical tourism more appealing. Superior medical schools, a low cost of living, family preferences, and the barriers to foreign accreditation mean that Indian doctors may prefer to work in India rather than elsewhere. The medical services industry is evolving quickly. Khanna expects to see dynamics in China similar to those in India and in other parts of Southeast Asia. Closed for comment; 0 Comments.
- 31 Oct 2007
- HBS Case
Climate Change Puts Heat on GMs
Ready or not, companies are being swept up in the increasing public debate over global climate change. How should firms respond? A case study exploring how financial service giant UBS thinks through the issues has students coming down on different sides. Key concepts include: Firms are increasingly called upon to respond to public concerns and actions by competitors on the issue of climate change. 'Green' responses that are simple profit maximization won't impress activist organizations looking to reward exemplars. Companies who take leadership roles in the environmental arena also open themselves up as critical targets should something go wrong. In responding to requests from organizations, general managers should think strategically about how, if they get the decision right, the company can serve society while also improving the bottom line. Closed for comment; 0 Comments.
- 07 Sep 2007
- Working Paper Summaries
Diversification of Chinese Companies: An International Comparison
Many observers have argued that Chinese managers are particularly quick to diversify their enterprises. Fueled by robust economic growth and the scant enforcement of intellectual property rights that could serve as barriers to entry, Chinese companies appear to be aggressively expanding into new industries whenever economic opportunities appear to beckon. There is much anecdotal evidence to support this view. But because the Chinese economy is extraordinarily large and dynamic, it is difficult to know whether anecdotes reflect an underlying trend toward greater diversification. This paper provides systematic evidence about the scope of Chinese companies, and compares the data with the evolution of firm scope in 8 other large economies. Key concepts include: This research shows no evidence that emerging-market companies are systematically more diversified than their developed-market counterparts. Contrary to some claims, the level of diversification of Chinese firms has remained stable over the past 5 years. In all other countries in the research sample, firms have become more focused over time. Chinese companies did not follow this trend. Chinese state-owned enterprises diversified their operations more aggressively than other Chinese firms. Closed for comment; 0 Comments.
- 13 Aug 2007
- Research & Ideas
The Dark Side of Trust
It has been well documented that strong trust between a buyer and supplier provides many advantages, such as increased productivity. But according to new research coauthored by HBS professor Felix Oberholzer-Gee, trusting relationships can also have a negative side that managers must take into account. Key concepts include: Many scholars agree that trust between suppliers and buyers generates significant benefits including motivating better performance and reducing negotiation time. Breaking apart a trusted buyer-supplier relationship can be a significant barrier to entry for competitors. The negative side of trust is that it can blind you to opportunities that arise outside established relationships. Closed for comment; 0 Comments.
- 22 May 2007
- Working Paper Summaries
The Speed of New Ideas: Trust, Institutions and the Diffusion of New Products
Does trust confer competitive advantage in terms of time, money, and productivity? Previous research indicates that it does. This study shifts perspective slightly and asks whether trust can also act as a barrier to entry. In other words, are trusted suppliers protected from competition if buyers are reluctant to try new products and services offered by other suppliers? Oberholzer-Gee and Calanog explored the link between levels of trust and the decision to adopt a new product using a field experiment on the diffusion of an innovative floor drain for the plumbing market. Key concepts include: Entrepreneurs from less-trusted groups—in this study, African-Americans—found it more difficult to overcome trust barriers. Trust can act as a barrier to entry for new firms and products because trust makes existing relationships more productive. Trust in current suppliers is a particularly strong deterrent to entry if the product is associated with a less-trusted group. Information from an intermediary organization, in this case a national industry association, can neutralize the negative impact of trust. Trust in institutions is therefore a valuable substitute for interpersonal trust. Closed for comment; 0 Comments.
- 18 May 2007
- Working Paper Summaries
Media Markets and Localism: Does Local News en Español Boost Hispanic Voter Turnout?
The increased integration of markets for news and entertainment means that more viewers can watch shows that better match their preferences, whether that means American football, Japanese anime, or Mexican soap operas. But is there an attendant risk to civic society, as some scholars claim? Do locally engaged citizens turn into passive viewers? The explosion in the U.S. of local television news in Spanish provides an ideal stage for probing these questions. This paper tests whether the presence of local television news affects local civic engagement in the form of voter turnout. Key concepts include: The availability of Spanish-language local television news significantly boosts Hispanic voter turnout. Regulatory policies should protect local media. Closed for comment; 0 Comments.
- 23 Oct 2006
- Research & Ideas
Will the “Long Tail” Work for Hollywood?
The "long-tail phenomenon" is well documented: Amazon.com makes significant profits selling many low-volume books. But can the long tail work for video sales as well? A new working paper by professors Anita Elberse and Felix Oberholzer-Gee suggests that it may not bring the same benefits to Hollywood. Key concepts include: For video sales, the long-tail phenomenon is not as pronounced at it is for books. There is evidence of a shift in sales to the tail for video, but an increasing number of titles do not sell at all. Hollywood strategists have no easy answers for pumping up revenue, given a decline in the number of blockbuster hits. This new research suggests that the long-tail phenomenon might not be a panacea for video sales. The music industry may be more of a long-tail beneficiary than the movie industry. Closed for comment; 0 Comments.
- 08 May 2006
- Research & Ideas
The Cost of Cutting in Line
Harvard Business School faculty rarely put their personal safety at risk to prove a point, but Professor Felix Oberholzer-Gee came close when he cut ahead in line—all in the name of science. Here's what companies can learn about long lines and social behavior. Closed for comment; 0 Comments.
How Much Is Freedom Worth? For Gig Workers, a Lot.
In the booming gig economy, does the ability to set your schedule outweigh having sick leave and overtime? Felix Oberholzer-Gee and Laura Katsnelson turn to DoorDash drivers to find out. Open for comment; 0 Comments.