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- 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.
- 05 Nov 2007
- Research & Ideas
The Changing Face of American Innovation
Chinese and Indian scientists and engineers have made an unexpectedly large contribution to U.S. technology formation over the last 30 years, according to new research by HBS professor William R. Kerr. But that trend may be ebbing, with potentially harmful effects on future growth in American innovation. Key concepts include: Chinese contributions to U.S. innovation as recorded in patent and trademark data increased from under 2 percent of U.S. domestic inventors in 1975 to over 8 percent today. In the same period, Indian inventors also rose, to almost 5 percent of the total in 2000. Since 2000, Chinese scientists' contributions have leveled off, and Indian contributions have declined slightly. Will American innovation suffer? Closed for comment; 0 Comments.
- 29 Oct 2007
- HBS Case
Marketing Maria: Managing the Athlete Endorsement
Anita Elberse discusses her research on sports marketing and a case study on tennis powerhouse Maria Sharapova. Closed for comment; 0 Comments.
- 15 Oct 2007
- Research & Ideas
Businesses Beware: The World Is Not Flat
With apologies to Thomas Friedman, managers who believe the hype of a flat world do so at their own risk, says HBS professor Pankaj Ghemawat. National borders still matter a lot for business strategists. While identifying similarities from one place to the next is essential, effective cross-border strategies will take careful stock of differences as well. A Q&A and book excerpt follow. Key concepts include: Some indicators of globalization aren't increasing as many experts have claimed. Toyota and Wal-Mart are examples of companies that understand how to deal with distance in a strategic way. Take a broad view of differences, figure out the ones that matter the most in your industry, and look at them not just as difficulties to be overcome but also as potential sources of value creation. Closed for comment; 0 Comments.
- 01 Oct 2007
- Working Paper Summaries
Team Familiarity, Role Experience, and Performance:Evidence from Indian Software Services
In contexts ranging from product development to service delivery, a significant amount of an organization's work is conducted by "fluid teams" that strive for innovative output. Fluid project teams exist only for the duration of a single project, and are comprised of members who may join or leave a team during the course of a project. In such settings, simple measures of cumulative output may not accurately capture team experience, particularly when changes in team composition are substantial over time. This study of an Indian software services firm, Wipro Technologies, considers an approach for capturing the experience held by fluid teams. It extends the concept of team fluidity in a way that allows for greater granularity in the measurement of team experience and a finer understanding of the determinants of team performance. Key concepts include: The findings underscore the need to use caution in assuming cumulative output wholly captures experience when team membership is not constant from one project to the next. These results build on previous research on team familiarity by considering longitudinal data on the individual members of teams. The findings also emphasize the importance of considering role experience and studying experience at different levels of seniority. Closed for comment; 0 Comments.
- 18 Sep 2007
- Research & Ideas
How Brand China Can Succeed
A series of recent setbacks including the Mattel toy recalls threaten China's new and improving image, says Professor John Quelch. There is just not enough preexisting brand equity among the world's consumers to inoculate Brand China against the current tide of negative publicity. What should the country do to polish its image? Key concepts include: Recent setbacks threaten China's new and improving image. China looks like a country that loves the world's markets but does not play by the world's rules. To fix the situation, China should: Tighten and enforce nationwide manufacturing quality standards and health and safety laws. Move towards an economy based on invention rather than imitation. Use the Olympics as an event for national progress, not just Beijing progress. 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.
- 27 Aug 2007
- Op-Ed
Mattel: Getting a Toy Recall Right
Mattel has been criticized heavily for having to recall not once but twice in as many weeks 20 million toys manufactured in China. But Mattel also deserves praise for stepping up to its responsibilities as the leading brand in the toy industry. Harvard Business School professor John Quelch examines what Mattel did right. Key concepts include: Mattel's recall of 20 million toys made in China was handled deftly: The CEO took personal charge of the problem. Consumers are being empowered by Mattel's communications. The recall Web site is a model of excellence. Mattel's compensation program to customers may not be sufficient. Closed for comment; 0 Comments.
- 13 Aug 2007
- Working Paper Summaries
Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry
Several recent studies have highlighted the important role that cross-border ethnic networks might play in facilitating entrepreneurship in developing countries. Little is known, however, about the extent to which domestic entrepreneurs rely on the diaspora and whether this varies systematically by the characteristics of the entrepreneurs or their local business environment. The Indian diaspora is estimated at over 18 million people spanning 130 countries. Given that formal institutions in India remain weak and hence the informal barriers to trade are higher, do diaspora networks serve as substitutes to the functioning of the local business environment? Do they help entrepreneurs to circumvent the barriers to trade arising from imperfect institutions? This study examines the extent to which software entrepreneurs within India vary in their reliance on expatriate networks. Key concepts include: Entrepreneurs located outside software hubs—in cities where monitoring and information flow on prospective clients is harder—rely significantly more on diaspora networks for business leads and financing. Those who rely more on diaspora networks also have better performing firms. This benefit from the diaspora is stronger for entrepreneurs who are based outside hubs. Benefits from the diaspora accrue most to entrepreneurs who have previously lived abroad and returned to India, compared with those who have not lived abroad. Professional rather than ethnic ties may well form the basis for these networks. Policymakers in developing countries could leverage their diasporas to help with domestic entrepreneurship by developing links between the diaspora and smaller cities rather than with hubs. Closed for comment; 0 Comments.
- 06 Aug 2007
- Research & Ideas
High Hills, Deep Poverty: Explaining Civil War in Nepal
Nepal, the home of Mount Everest, has been gripped in recent years by civil war. A new paper by Harvard Business School professor Lakshmi Iyer and Quy-Toan Do of the World Bank looked at the roots of Nepal's conflict from a variety of angles. For the future, investing in poverty reduction strategies is a key for peace, Iyer says. Key concepts include: Nepal went through a dozen different governments in 12 years beginning in 1991. Diversity could be a contributing factor to civil wars, and Nepal is tremendously diverse—ethnically, economically, and geographically. Geographic diversity and poverty were the greatest predictors of violence in Nepal. The root cause of Nepal's civil war was economic, not social. Investments in poverty reduction strategies bring direct economic as well as political benefits to countries like Nepal. Closed for comment; 0 Comments.
- 08 Jun 2007
- Working Paper Summaries
Poverty, Social Divisions and Conflict in Nepal
More than 70 civil wars have occurred around the world since 1945. Understanding what causes such violent conflicts to begin and then fester is a topic of increasing research interest to economists. In Nepal the conflict known as "the People's War" began in 1996 and spread to all parts of the country, resulting in the deaths of more than 13,000 people. Do and Iyer considered a wide range of economic and social factors that they hypothesized could affect the likelihood of violent conflict, and econometrically examined their relationship with conflict intensity. These factors include geographic conditions (mountains and forests), economic development, social diversity including linguistic diversity, and government investment in infrastructure. Do and Iyer's nuanced approach allowed them to examine the spread of a single conflict across different parts of the country and over time. Key concepts include: In the initial stages of the conflict, total deaths caused by Maoist insurgents and government forces were higher in areas with greater poverty. Yet this relationship with poverty changed over time: As Maoists gained control of the poorest areas, the highest intensity of conflict shifted to places that were somewhat better off. Conflict intensity was higher in areas with geographical characteristics that favor insurgents, such as mountains and forests. There was no significant relationship between conflict intensity and linguistic diversity. The relationship with caste polarization was slight. The changing relationship with poverty suggests that researchers need to consider a conflict's prior evolution in their broader analyses. Closed for comment; 0 Comments.
- 15 May 2007
- Working Paper Summaries
How is Foreign Aid Spent? Evidence from a Compelling Natural Experiment
Foreign aid is viewed as a transfer of resources that can be used to generate meaningful growth in the recipient country's economy. How this aid is ultimately spent, therefore, determines how effective it is in achieving its purposes. Yet economists to date possess little understanding of how foreign aid trickles through a country's economy. This paper examines a foreign aid windfall that poorer Muslim countries have systematically received from rich, oil-producing Arab states. When the price of oil skyrocketed during the 1973-1986 oil crisis (and again after 2001), OPEC nations took a substantial portion of the money they received and gave it away as foreign aid, mostly to Muslim nations. When the price of oil crashed and income plunged in the oil-producing countries, the aid dried up. Werker, Ahmed, and Cohen examined the short-term effect of foreign aid on aggregate demand, the components of gross domestic product, and the balance of payments. Key concepts include: Oil-driven bonuses in foreign aid from wealthy Arab oil producers to poor Muslim countries were mostly consumed on imported non-capital goods. The aid crowded out domestic savings and did little to attract foreign investment. Long-term economic growth was unaffected. The popular critique that aid is "wasted" did not jibe with the data. Every component of the domestic economy, including investment, was raised in the short term. Foreign aid may be an effective tool of fiscal policy that can be used to smooth the business cycle in developing countries. But a challenge remains: How can the temporary stimulus be converted into lasting economic growth? Closed for comment; 0 Comments.
- 04 Apr 2007
- Research & Ideas
The Business of Global Poverty
Nearly half of the planet's population subsists on $2 a day or less. What role should business play as the world confronts what may be the most explosive socioeconomic challenge of the new century? Closed for comment; 0 Comments.
- 26 Mar 2007
- Research & Ideas
Learning from Failed Political Leadership
Strategic independence and better leadership assessment—these are the critical issues for both business and government in the future, says Professor D. Quinn Mills. In this Q&A he describes key lessons from his new book, Masters of Illusion, coauthored with Steven Rosefielde. A book excerpt follows. Key concepts include: Business leaders must be able to predict changing dynamics between powerful organizations under multiple international economic and geopolitical scenarios. A major failing of current leadership models is the lack of knowledge, awareness, or even interest in life beyond our country's borders, a limitation of growing importance as the global economy expands. The most important threats to America in the decade ahead are from major powers, not terrorists per se. Closed for comment; 0 Comments.
- 20 Mar 2007
- Research & Ideas
What’s Behind China’s Wild Stock Ride?
Podcast: The recent one-day plunge of 9 percent in China's stock markets has continued to weigh heavily on other markets around the world. What caused the fall? Are more ups and downs to come? Professor Li Jin discusses the unique characteristics that drive Chinese stocks. Closed for comment; 0 Comments.
- 19 Mar 2007
- Research & Ideas
Handicapping the Best Countries for Business
India? South Africa? Russia? Which are the best countries for a firm to invest in? In a new book, Professor Richard Vietor looks at the economic, political, and structural strengths and weaknesses of ten countries and tells readers how to analyze the development of these areas in the future. Read our Q&A and book excerpt. Key concepts include: Governments create the overall environment for successful competition in the global economy. Bad government can only lead to less competitive businesses. To be competitive, countries need to offer businesses sound fiscal and monetary policies, secure property rights, high savings and investment, an absence of corruption, and exports that are competitive in enough areas to eventually balance imports. Business people must understand where markets and countries are headed by analyzing the present and then extending current performance trends forward three to five years. Although each has issues, Singapore, China, and India are currently the best bets for FDI and, pending political stability, so is Russia. Closed for comment; 0 Comments.
- 05 Mar 2007
- Research & Ideas
Risky Business? Protecting Foreign Investments
After a string of forced nationalizations of private enterprises in the 1960s and 1970s, the pendulum swung back and companies were again encouraged by host countries to build and run major infrastructure projects such as power and water. But a set of new property protections has done little to manage the risk in many of these politically unstable environments. Professor Louis T. Wells, coauthor of a new book on making foreign investment safe, discusses the current landscape. Key concepts include: Although property rights protections for investors in developing nations have improved since 1980, the new instruments are failing to satisfy the interests of either host countries or their business partners. Protections can be improved by developing a real consensus on the part of investors' home countries, host countries, and investors themselves. Business managers must take a significant role in pushing for a multilateral agreement on foreign direct investment, or at least become active in promoting lesser changes that will lead to more balance and security in the current system. Otherwise businesses will lose profitable opportunities and find themselves in the middle of disputes that hurt their future prospects. And poor countries will fail to benefit from what investors can bring them. Absent strong protections, managers must ask themselves a series of questions before investing in developing countries, such as: Is my investment project politically sensitive? If so, will the country continue to need my participation in the project? Closed for comment; 0 Comments.
- 14 Feb 2007
- Op-Ed
Tata-Corus: India’s New Steel Giant
By acquiring Anglo-Dutch steel firm Corus, India's Tata Steel is now one of the world's top five steel makers. Professor Tarun Khanna says the fact that the deal is the largest out of India and generated by the private sector makes this a notable event. But now comes the hard part—making the merger work. Can Tata avoid mistakes made by Chinese companies? From The Economic Times/India Times. Key concepts include: Tata's acquisition of Corus is notable not only for creating a new steel giant, but also because this deal was a private sector venture far from Indian government influence. Tata should be able to make the merger work by virtue of its position of financial strength as well as previous cross-border experiences. The West should not underestimate this heretofore relatively unknown competitor. Closed for comment; 0 Comments.
- 22 Jan 2007
- Working Paper Summaries
“Don’ts" and "Do’s”: Insights from Experience in Mitigating Risks of Western Investors in Post-Communist Countries
Cultural and other misunderstandings between westerners and locals in post-communist countries are very costly, and western investors grossly underestimate how damaging ineffective interaction really is. This article shows that such interaction constitutes a major stumbling block to effective risk management and stands in the way of the enterprise fully taking advantage of opportunities for profit in these product-hungry, fast-expanding, and dynamic economies. Ultimately, effective communication between westerners and locals is the necessary condition for the success of western investments in transition countries. Key concepts include: On the whole, and with several notable exceptions, investors and business executives from mature western economies pay far too little attention to the quality of their interaction with their local counterparts. Misconceptions about the "realities" of dealing with locals and the practices which such misconceptions lead to can engender vicious circles of misunderstandings, resentments, and lack of trust. It is well within the power of western investors and executives to generate a better relationship with locals. The westerners' best guides for meeting the challenge of effective interaction with locals across differences in business practices, concerns, priorities, and values are the same basic principles and managerial tools which they would apply within mature economies. Closed for comment; 0 Comments.
Billions of Entrepreneurs in China and India
Entrepreneurship in both China and India is rising dramatically and thriving under quite different conditions. HBS professor Tarun Khanna explains what it all means in this Q&A about his new book, Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours. Plus: book excerpt. Key concepts include: In China and India, much of entrepreneurship is in response to constraints—societal, political, or other. The business landscapes of China and India differ in two main respects: their degree of openness to outside influence, and the extent and type of government involvement. Foreign direct investment pours into China. India has embraced foreign direct investment much less, for good and bad reasons. Traditionally, India has been more open to ideas than has China. In India, caste is both less important and more important than it used to be. Closed for comment; 0 Comments.