- 04 Aug 2009
- First Look
- 03 Aug 2009
- Research & Ideas
Corporate Social Responsibility in a Downturn
Financial turmoil is not a reason to scale back on CSR programs—quite the opposite, says HBS professor V. Kasturi "Kash" Rangan. As a marketing scholar Rangan is optimistic about strategic CSR efforts that provide value in communities and society. Q&A Key concepts include: Corporate social responsibility (CSR) means "activities undertaken by businesses that enhance their value in the community and society and thus benefit their reputation and brand," says Rangan. CSR should be treated as a business discipline and practiced with the same professionalism and rigor as other aspects of a firm's strategy. "For example, many of the programs that come under the umbrella of 'climate change' have the potential to benefit the environment as well as a company's bottom line," Rangan adds. Good examples are the early childhood literacy initiative of PNC, a financial services organization based in Pittsburgh, and the 10,000 Women initiative of Goldman Sachs, which facilitates a business education for underserved women. Companies should classify their CSR programs according to the ability to enhance and even transform the firm's business practices. Closed for comment; 0 Comments.
- 30 Jul 2009
- Working Paper Summaries
Fluid Teams and Fluid Tasks: The Impact of Team Familiarity and Variation in Experience
In the context of team performance, common wisdom suggests that performance is maximized when individuals complete the same work with the same people. Although repetition is valuable, at least up to a point, in many settings such as consulting, product development, and software services organizations consist largely of fluid teams executing projects for different customers. In fluid teams, members bring their varied experience sets together and attempt to generate innovative output before the team is disassembled and its individual members move on to new projects. Using the empirical setting of Wipro Technologies, a leading firm in the Indian software services industry, this study examines the potential positive and negative consequences of variation in team member experience as well as how fluid teams may capture the benefits of variation while mitigating the coordination costs it creates. Key concepts include: As organizations continue to depend on the output of teams, and teams, in turn, rely on members with varied prior experience, it becomes critical for teams to manage these differences and dependencies successfully. If the most valuable assets of many companies are their employees, then organizations need to shift from only thinking about their project portfolio to also considering their employee-experience portfolio. Managing employee-experience portfolios will require managers to consider the breadth of types of experience (e.g., customer, technology, etc.) captured across the members of a team as well as their familiarity with each other. Doing so may offer managers an important new lever for improving organizational performance. Closed for comment; 0 Comments.
- 29 Jul 2009
- Working Paper Summaries
Firsthand Experience and the Subsequent Role of Reflected Knowledge in Cultivating Trust in Global Collaboration
How can workers better collaborate across vast geographical distances? Distributed collaboration—in which employees work with, and meaningfully depend on, distant colleagues on a day-to-day basis—allows firms to leverage their intellectual capital, enhance work unit performance, face ever-changing customer demands more fluidly, and gain competitive advantage in a dynamic marketplace. Research over the last decade, however, has provided mounting evidence that while global collaboration is a necessary strategic choice for an ever-increasing number of organizations, socio-demographic, contextual, and temporal barriers engender many interpersonal challenges for distant coworkers and are likely to adversely affect trust between and among workers across sites. In this paper that examines employee relations at a multinational organization, HBS professor Tsedal Beyene and MIT Sloan School of Management professor Mark Mortensen find that firsthand experience in global collaborations is a crucial means of engendering trust from shared knowledge among coworkers. Their findings reinforce the important role of others' perceptions in our own self-definition, and suggest a means of addressing some of the problems that arise in cross-cultural global collaborations. Key concepts include: As organizations increasingly move toward more global designs, with greater intersite communication and mobility, a more highly socialized view of global collaborations is required. Direct knowledge entails knowledge about physical space and facilities, cultural traits of coworkers, work processes, people, and relationships. Reflected knowledge enables people to view how their home office is both presented to and perceived by others. In global collaboration there is the distinct and important role played by reflected knowledge as opposed to direct knowledge. Both types impact trust. While direct knowledge may help to identify barriers to collaboration, there is no guarantee that any particular person can ameliorate them. In contrast, reflected knowledge provides feedback about our own context and related factors that are more likely to lie within our control. While technology may be designed to mirror the other's view, it cannot provide the full breadth of reflected information typically gained while on-site. Managers would be wise to provide for subsequent reciprocal visits to ensure that the hosts of any first meeting gain firsthand experience of their collaborators' sites. Closed for comment; 0 Comments.
- 28 Jul 2009
- First Look
- 28 Jul 2009
- Research Event
Business Summit: Real Estate
Experts discuss the global real estate crisis, the future of securitization, and predictions for the future of the U.S. real estate market. Closed for comment; 0 Comments.
- 27 Jul 2009
- Research & Ideas
Social Network Marketing: What Works?
Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook. Key concepts include: Some social network users are influenced by the purchases of their friends. Of these users, 40 percent show a strong "keeping up with the Joneses" behavior, increasing sales by 5 percent. "High-status" users are more likely to not purchase something that others have bought. On social networks, viral campaigns may work better than advertising. Closed for comment; 0 Comments.
- 24 Jul 2009
- Research & Ideas
Business Summit: Business Education in the 21st Century
Business schools are innovating and experimenting to change the MBA experience, and to help business education regain its relevance and value. Along with a changing curricula, programs are attempting to make the learning experience more interactive, engaging, global, and experiential. Closed for comment; 0 Comments.
- 23 Jul 2009
- Working Paper Summaries
Informed and Interconnected: A Manifesto for Smarter Cities
To make our cities and communities smarter, we must become a little smarter ourselves, seeking information and an agenda to forge connections enabling collaboration, according to HBS professor Rosabeth Moss Kanter and IBM's Stanley S. Litow. Their vision is that someday soon, leaders will combine technological capabilities and social innovation to help produce a smarter world. That world will be seen on the ground in smarter cities composed of smarter communities that support the well-being of all citizens. This paper outlines eight challenges facing cities and the communities they encompass, based on experience in the United States. Kanter and Litow provide examples of practices and programs led by both government and nonprofit organizations, many technology-enabled, that point the way to solutions, and they conclude with a call for leaders to embrace an agenda for change. Key concepts include: The need for a new approach to U.S. communities is an urgent imperative because of the biggest global economic crisis since the Great Depression. Significant barriers to solving urban problems include geographic sprawl, residential mobility, the location of jobs, the lack of overarching strategic impact goals, weakened civic leadership, and social isolation. By examining each barrier in turn (and the ways they reinforce each other), it is possible to see the opportunities for significant transformation if communities could become "smarter," with technology helping spread information and facilitate interconnections. Closed for comment; 0 Comments.
- 22 Jul 2009
- Working Paper Summaries
Reputation and Competition: Evidence from the Credit Rating Industry
Credit ratings are a key aspect of the financial system. The quality of these ratings is certainly sustained in part by the reputational concerns of rating agencies, whose paying customers have no inherent interest in the quality of ratings. Competition in this industry has been increasing, and there have been calls for yet more competition. Whether competition will reduce quality or improve it is not yet clear. HBS professor Bo Becker and Washington University in St. Louis professor Todd Milbourn test these conflicting predictions in the ratings industry. Their evidence is more or less consistent with a reduction in credit rating quality as Fitch increased its market presence. Their empirical findings suggest that the system will work better when competition is not too severe. These results have potential policy implications. Key concepts include: Competition is associated with "friendlier" ratings. For regulators, it is worth considering that increasing competition in the ratings industry involves the risk of impairing the reputational mechanism that underlies the provision of good quality ratings. For bond markets, it is clear that relying on third party ratings paid for by issuers is not a system without risks. Closed for comment; 0 Comments.
- 21 Jul 2009
- First Look
- 21 Jul 2009
- Research Event
Business Summit: Managing Human Capital—Global Trends and Challenges
Human capital needed for globalization is lacking. Progress is required in important areas such as elevating more women to leadership positions, according to panelists at the HBS Business Summit. Closed for comment; 0 Comments.
- 20 Jul 2009
- Research & Ideas
Markets or Communities? The Best Ways to Manage Outside Innovation
No one organization can monopolize knowledge in any given field. That's why modern companies must develop a new expertise: the ability to attract novel solutions to difficult or unanticipated problems from outside sources around the world. A conversation with Harvard Business School professor Karim R. Lakhani on the keys to managing distributed innovation. Key concepts include: Many organizations find they cannot monopolize knowledge in any given field of endeavor. Firms need to consider three key factors in deciding to pursue either a community- or market-based external innovation model. Successful models developed by Apple, InnoCentive, SAP, and TopCoder create incentives for many entrants to generate a variety of products and services on a platform. The firm's role is to define the boundaries of the platform and then encourage entry and innovation by outsiders. Closed for comment; 0 Comments.
- 17 Jul 2009
- Research Event
Business Summit: Ethics in Globalization
It is impossible to regulate against greed and ethical shortcomings. What can be done is to force greater transparency and accountability. Closed for comment; 0 Comments.
- 16 Jul 2009
- Working Paper Summaries
Principles that Matter: Sustaining Software Innovation from the Client to the Web
Despite the current strength and promise of the Internet software market, the future pace of growth and innovation is not assured. The principles of choice, opportunity, and interoperability were important in the growth of PC software and in the overall health of the information technology ecosystem, and these same principles will shape competition in Internet software, according to HBS professor Marco Iansiti. Given the unprecedented speed at which this industry is developing, consumers and the industry should watch carefully as different companies compete. Choice, opportunity, and interoperability should serve as an important lens, particularly when focused on companies with especially large footprints in the new markets. Key concepts include: Successful technology companies should not forget that innovation and growth in the technology sector is dependent on promoting a thriving ecosystem of complementary and interdependent products. The competitive principles of choice, opportunity, and interoperability are important in Internet software, because of the increased variety of possible software and hardware combinations and the increased interdependency in the applications and services they deliver. Closed for comment; 0 Comments.
- 15 Jul 2009
- Working Paper Summaries
Policy Bundling to Overcome Loss Aversion: A Method for Improving Legislative Outcomes
Citizens hope their elected representatives will pass legislation that creates net gains that outweigh net harms—in other words, legislation that has positive expected value for society. However, economist Joseph Stiglitz has noted that legislators often fail to pass such legislation, even when its net positive expected value is highly significant. The psychology and economics literature suggests that legislators face an uphill battle when proposing legislation that has both costs and benefits due to the power of loss aversion, a cognitive bias that has been found to cause individuals to dramatically overweight losses relative to gains. Here the authors propose and test a new type of policy bundling technique in which related bills that have both costs and benefits are combined in a way that reduces the harmful effects of loss aversion. Key concepts include: Because losses loom larger than gains psychologically, policies that would create net benefits for society but that would also involve costs may frequently be defeated. This policy bundling technique has the potential to help citizens and legislators who are struggling to pass legislation with salient costs that are outweighed by important benefits. While the behavioral decision research literature has shown it is difficult to fully de-bias human judgment, recent research suggests it is possible to design decision-making contexts in ways that lead to wiser choices. Closed for comment; 0 Comments.
- 14 Jul 2009
- First Look
- 14 Jul 2009
- Research & Ideas
Business Summit: China in the Global Economy
While the global economic downturn will affect China's exports, the domestic economy is expected to remain strong, agreed panelists at the HBS Business Summit. Closed for comment; 0 Comments.
- 13 Jul 2009
- Research & Ideas
Diagnosing the Public Health Care Alternative
With deep experience in health insurance reform, HBS faculty describe how improved competition in insurance plans could improve value for patients. Professors Regina E. Herzlinger, Robert Huckman, and Michael E. Porter take the pulse of a debate. Key concepts include: "A government market with an underpriced Medicare would likely lead to the death of private-sector markets and products," say Professor Regina E. Herzlinger and coauthor Tom Coburn (R-OK). Patients would like the option of a public insurance plan, according to Professor Robert Huckman. Competition among insurers should be based on improving patients' health outcomes achieved per dollar spent, writes Professor Michael E. Porter. Closed for comment; 0 Comments.
Authority versus Persuasion
In directing employees, managers often face a choice between invoking authority and persuasion. In particular, since a firm's formal and relational contracts and its culture and norms are quite rigid in the short term, a manager who needs to prevent an employee from undertaking the wrong action has the choice of either trying to persuade the employee or relying on interpersonal authority. In choosing between persuasion and authority the manager makes a cost-benefit trade-off. This paper studies that trade-off, focusing in particular on conflicts that originate in open disagreement. Key concepts include: Persuasion and authority can be both substitutes and complements. In particular, authority and persuasion are substitutes when authority is highly effective but complements when authority is not very effective. Persuasion is attractive on projects where effort or motivation is more important. The reason is that (under the assumption that executing a good project is more valuable than executing a bad project) the employee will exert extra effort if he or she believes more in the project. The manager also relies more on persuasion (without authority) when employees have higher pay-for-performance incentives. Closed for comment; 0 Comments.