- 09 Jul 2009
- Working Paper Summaries
Performance Pressure as a Double-Edged Sword: Enhancing Team Motivation While Undermining the Use of Team Knowledge
Why do teams often fail to use their knowledge resources effectively even after they have correctly identified the experts among them? Project teams are a prominent feature of the knowledge-based economy, and member expertise has long been recognized as an important resource that can greatly affect team performance, but only to the extent that it is accurately recognized and used to accomplish the objective. The step between recognizing others' expertise and then actually applying it to achieve a collective outcome, however, is highly problematic: Even when individuals know who holds relevant task expertise, they are often unwilling or unable to give the experts appropriate influence over the group process and outcomes. HBS professor Heidi K. Gardner takes a multidisciplinary approach to develop theory explaining how interpersonal dynamics in teams affect members' use of each other's distinct knowledge, ultimately leading to differential performance outcomes. Key concepts include: Teams facing significant performance pressures tend to default to high-status members at the expense of using team members with deep knowledge of the client, with detrimental effects on team performance. The more important the project, the less effective the team: Excessive performance pressure results in the team reverting to less effective ways of divvying up influence over its end product, in turn leading to lower performance ratings for the whole team. Team process is important in enabling organizations to harness knowledge resources for the benefit of maintaining strong relations with their clients. 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.
- 07 Jul 2009
- First Look
- 07 Jul 2009
- Research Event
Business Summit: Historical Roots of Globalization
In this breakout session, panelists shared insights, informed by history, of the convergence that globalization promotes. Closed for comment; 0 Comments.
- 06 Jul 2009
- What Do You Think?
Are You Ready to Manage in an Irrational World?
It is becoming clear that human behavior is much less rational than we assumed, says HBS professor Jim Heskett. Judging from replies to this month's question, there are many nuances to managing in an irrational world. (Online forum now closed. Next forum begins August 7.) Closed for comment; 0 Comments.
- 06 Jul 2009
- Research & Ideas
Conducting Layoffs: ’Necessary Evils’ at Work
"The core challenge for everyone who performs necessary evils comes from having to do two seemingly contradictory things at once: be compassionate and be direct," say Joshua D. Margolis of Harvard Business School and Andrew L. Molinsky of Brandeis University International Business School. Their research sheds light on best practices—typically overlooked—for the well-being of those who carry out these emotionally difficult tasks. Q&A Key concepts include: Most managers who conduct layoffs feel a mix of emotions that may catch them by surprise: sympathy, sadness, guilt, shame, anxiety, and perhaps anger. Best practice for managers includes understanding yourself and recognizing your limitations. Recognize ahead of time the emotional cocktail that you will likely experience when performing a layoff, say the researchers. Companies should focus not only on getting the task done and on ensuring the well-being of victims, but also on the well-being of those who perform the layoff. Conduct training beforehand; have pairs or teams perform the tasks together; provide a good physical environment in a nonpublic, quiet area of the organization; and later allow those who carried out the layoffs to decompress and debrief. Closed for comment; 0 Comments.
- 02 Jul 2009
- Research Event
Business Summit: The Role of Social Entrepreneurship in Transforming American Public Education
Amid 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. The challenge now is to build support so these solutions can be applied elsewhere. Closed for comment; 0 Comments.
- 02 Jul 2009
- Working Paper Summaries
Technology Innovation and Diffusion as Sources of Output and Asset Price Fluctuations
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. 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.
- 30 Jun 2009
- First Look
- 30 Jun 2009
- Research Event
Business Summit: The Role of Business Leaders in Sustaining Market Capitalism
Business leaders at the HBS Business Summit agreed on the threats to capitalism, but offered different opinions on the way forward. Closed for comment; 0 Comments.
- 29 Jun 2009
- Sharpening Your Skills
Sharpening Your Skills: Leading Change
Nothing like a global recession to test your change-management skills. We dig deep into the Working Knowledge vault to learn about building a business in a down economy, motivating the troops, and other current topics. Closed for comment; 0 Comments.
- 26 Jun 2009
- Research Event
Business Summit: Business and the Environment
If the causes for global climate change are not addressed, the consequences for the planet are likely to be disastrous. Governments, business, and consumers must act. Closed for comment; 0 Comments.
- 25 Jun 2009
- Working Paper Summaries
Why Do Countries Adopt International Financial Reporting Standards?
Why do some countries adopt the European Union (EU)-based International Financial Reporting Standards (IFRS) when others do not? To expand our understanding of the determinants and consequences of IFRS adoption on a global sample, HBS professor Karthik Ramanna and MIT Sloan School of Management coauthor Ewa Sletten studied variations over time in the decision to adopt these standards in more than a hundred non-EU countries. Understanding countries' adoption decisions can provide insights into the benefits and costs of IFRS adoption. Key concepts include: Countries with high quality corporate governance systems and more powerful countries are less likely to adopt IFRS. There are network benefits to IFRS adoption, i.e., the likelihood of IFRS adoption for a given country increases with the number of IFRS adopters in its geographical region and with IFRS adoption among its trade partners. As more countries adopt the international standards, the relative import of network benefits from IFRS adoption (over direct economic benefits) are likely to increase. Similar effects might be seen in the adoption of accounting methods and standards, and of corporate governance best practices by firms and jurisdictions. Closed for comment; 0 Comments.
- 24 Jun 2009
- Working Paper Summaries
Don’t Just Survive—Thrive: Leading Innovation in Good Times and Bad
The financial crisis provides a sobering reminder of what happens when innovation fails to drive productive economic growth. For over a decade, money from around the world poured into the United States seeking innovation. Despite these massive investments, when adjusted for inflation, U.S. GDP grew slowly with much of the growth coming from government, professional, and business services, including real estate and outsourcing. What's more, inflation adjusted wages stalled for many, even as consumer spending increased. This paper argues that innovation is not a side business to a real business: rather, innovation is the foundation of a successful business. Key concepts include: Entrepreneurs can be found and a culture of entrepreneurship can be developed in companies of any size and age. Entrepreneurial leaders must relentlessly—but not recklessly—pursue opportunity. They must look beyond the resources currently controlled to harness the power, resources, and reach of their organizations and networks. Breakthrough innovations that change people's lives and the very structure and power dynamics of industries cannot be managed as "silos," tucked away in corporate, university, or government research labs, in incubators, or within venture capital funded entrepreneurial start-ups. Access to the marketplace is needed to help speed commercialization and adoption. Emerging opportunities must be nurtured and the transition to high growth must be managed. Once breakthrough innovations catch hold, growth must be funded and managed to exploit the full value of the opportunity. Incremental innovations must ensure that businesses that have passed through the high-growth stage can continue to deliver the resources, capabilities, and platforms needed to fuel the emerging opportunities of the future. Different organizational structures, cultures, governance and risk management systems, and leadership styles are needed to manage the business innovation lifecycle from an initial idea to a sustainable business that leverages entry position and capabilities to exploit the full potential for growth and evolution over time. Closed for comment; 0 Comments.
- 23 Jun 2009
- First Look
- 23 Jun 2009
- Research Event
Business Summit: Global Environment-Transformed Organization
According to two panel sessions led by HBS professor Clayton M. Christensen, successful organizations must continually transform themselves in today's dynamic world. Closed for comment; 0 Comments.
- 22 Jun 2009
- Research & Ideas
“Too Big To Fail”: Reining In Large Financial Firms
Four little words have cost U.S. taxpayers dearly in government bailouts of once-mighty Wall Street firms. Congress can put an end to such costly rescues, says HBS professor David A. Moss, and the Federal Reserve could be a super regulator, adds senior lecturer Robert C. Pozen. But will Congress enact the regulatory cure that is required? From the HBS Alumni Bulletin. Key concepts include: No firm should be too big to fail. The federal government should slap tough new regulations on all firms that pose "systemic risk"—the risk that a failure of one institution could wreak havoc across the entire financial system. The majority of financial firms that pose no systemic risk should face relatively light regulation, ensuring their continued dynamism and innovation. Not everyone on the politically divided Congressional Oversight Panel agrees with Moss's analysis and recommendations. The general concept of regulating systemic risk has gained broad support from a wide range of influential economists, lawmakers, and interest groups. Closed for comment; 0 Comments.
- 19 Jun 2009
- Research Event
Business Summit: The Evolution of Agribusiness
Agribusiness has come to be seen not just as economically important, but as a critical part of society. The future for this massive industry will be both exciting and complex. Closed for comment; 0 Comments.
Business Summit: The Coming World Oil Crisis
Without enormous changes the world faces an imminent oil crisis—and there are no silver bullet solutions. People must wake up to the sobering ramifications of peak oil, which may be the defining issue of this century. Closed for comment; 0 Comments.