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- 14 Nov 2011
- Research & Ideas
Creating a Global Business Code
In the wake of corporate scandals, many companies are looking more closely at how to manage business conduct worldwide. Professors Rohit Deshpandé, Lynn S. Paine, and Joshua D. Margolis evaluate standards of corporate conduct around the world. Open for comment; 0 Comments.
- 31 Oct 2011
- Research & Ideas
The Most Powerful Workplace Motivator
When evaluating compensation issues, economists often assume that both an employer and an employee make rational, albeit self-interested choices while working toward a goal. The problem, says Assistant Professor Ian Larkin, is that the most powerful workplace motivator is our natural tendency to measure our own performance against the performance of others. Open for comment; 0 Comments.
- 27 Oct 2011
- Research & Ideas
Horrible Boss Workarounds
Bad bosses are generally more inept than evil, and often aren't purposefully bad, says Professor Rosabeth Moss Kanter. She discusses common bad-boss behaviors, and how good colleagues can mobilize to overcome the roadblocks. Key concepts include: Common traits of bad bosses include a failure to communicate goals effectively, if at all; a failure to realize that employees have more to offer than their job descriptions dictate, and a tendency to get caught up in the details to the detriment of the big picture. Employees can work around bad-boss roadblocks by proactively mobilizing their peers toward a common goal. Closed for comment; 0 Comments.
- 06 Sep 2011
- Research & Ideas
How Small Wins Unleash Creativity
In their new book, The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, authors Teresa M. Amabile and Steven J. Kramer discuss how even seemingly small steps forward on a project can make huge differences in employees' emotional and intellectual well-being. Amabile talks about the main findings of the book. Plus: book excerpt. Key concepts include: Of all the factors that induce creativity, productivity, collegiality, and commitment among employees, the single most important one is a sense of making progress on meaningful work. Seemingly small signs of progress will induce huge positive effects on employees' psyches. On the other hand, seemingly small setbacks will induce huge negative effects. The catalysts that induce progress include setting clear goals; allowing autonomy; providing resources; giving enough time-but not too much; offering help with the work; learning from both problems and successes; and allowing ideas to flow. Closed for comment; 0 Comments.
- 28 Jul 2011
- Working Paper Summaries
The Three Foundations of a Great Life, Great Leadership, and a Great Organization
This is the commencement speech that HBS professor Michael Jensen delivered to the 2011 graduates of the McDonough School of Business at Georgetown University. Drawing from his own experiences, he discusses the three foundations of a great personal life, great leadership, and a great organization. Those three foundations are integrity, authenticity, and being committed to something bigger than oneself. Key concepts include: As integrity declines, workability declines. As workability declines, value (or more generally, the opportunity for performance) declines. The actionable pathway to authenticity is to be authentic about your inauthenticities. Being committed to something bigger than oneself is the source of both personal and corporate passion and energy. Closed for comment; 0 Comments.
- 19 Jul 2011
- Working Paper Summaries
Signaling to Partially Informed Investors in the Newsvendor Model
Why might firms make operational decisions that purposefully do not maximize expected profits? This model looks at the question by developing scenarios using the example of inventory management in the face of an external investor. The research was conducted by Vishal Gaur of Cornell University, Richard Lai of the University of Pennsylvania, and Ananth Raman and William Schmidt of Harvard Business School. Key concepts include: Companies face pressure from external investors that leads them to make suboptimal operations decisions. This pressure arises from three forces: a strong prior belief that firms are of a "low" type (one with a low quality investment opportunity), an inability for firms to mitigate the information asymmetry regarding their actual type, and an emphasis on short-term valuation. Surprisingly, this scenario includes instances in which a firm with a high quality investment opportunity finds it attractive to underinvest. There have been relatively few applications of signaling games in the operations management literature and this model provides an important application of signaling game theory to the problem of inventory management in the face of an external investor. The researchers find several real-life examples in which firms faced pressure to underinvest, and how the firms chose to deal with those situations. One example is the decision by French upscale beauty brand Clarins Group to go private in 2008. The move relieved management of shareholder pressure for short-term profits and allowed them to pursue longer-term opportunities that eventually paid off. The model can be effectively applied regardless of whether the decision is about inventory or some other type of capacity investment, including plant expansions, capital expenditures, and contracting for production inputs. Closed for comment; 0 Comments.
- 27 Jun 2011
- Research & Ideas
Recovering from the Need to Achieve
In his new book, Flying without a Net: Turn Fear of Change into Fuel for Success, HBS professor Thomas J. DeLong explores the world of "high-need-for-achievement professionals" or HNAPs—those for whom the constant, insatiable need to achieve can lead to anxiety and dysfunction. Plus: book excerpt. Key concepts include: Instead of happiness or well-being, high-need-for-achievement professionals seek "relief in the accomplishment of tasks." This creates a vicious cycle marked by a lack of a real sense of purpose. Four characteristics define an HNAP: comparing, busyness, worrying, and blaming. DeLong calls for HNAP readers to take the following steps toward recovery: stop and reflect with self-awareness, let go of the past, create a vision or specific goal with an agenda, seek support through mentors and a network, don't blink (or fall back on old behaviors), and purposefully expose themselves to vulnerability. Closed for comment; 0 Comments.
- 11 May 2011
- Research & Ideas
Building a Better Board
While corporate board members take their jobs more seriously than ever, they are not necessarily as helpful or effective as they could be, says HBS senior lecturer Stephen Kaufman. He recently sat down with HBS Working Knowledge to discuss what he considers to be the biggest practical issues facing boards today. Key concepts include: Board directors may not give an honest assessment of the company because they fear reprisal from the CEO or the other board members. In accurately evaluating a CEO's performance, board members must get feedback from other employees at the company, who possess insight into day-to-day operations that the directors do not. Closed for comment; 0 Comments.
- 04 May 2011
- Research & Ideas
Is Web Surfing Distracting Your Workers?
If you think that banning web surfing at work will improve your employees' productivity, think again. In new research on the effects of temptation, HBS research fellow Marco Piovesan and colleagues found that the act of resisting temptation distracted subjects enough that their work performance actually suffered. Closed for comment; 0 Comments.
- 02 May 2011
- Research & Ideas
Casino Payoff: Hands-Off Management Works Best
Micromanagers beware: Research of casino hosts by Harvard Business School's Dennis Campbell and Francisco de Asís Martinez-Jerez and Rice's Marc Epstein makes the case that hands-off management can work to improve employee learning and decision making. Closed for comment; 0 Comments.
- 28 Apr 2011
- Working Paper Summaries
When Smaller Menus are Better: Variability in Menu-Setting Ability and 401(k) Plans
Economists love menus, which can be used to help understand people's choices. For example, do we prefer more choices (larger menu) or fewer (shorter menu)? But the menu itself has to be pre-selected. Research by David Goldreich (Rotman School of Management, University of Toronto) and Hanna Halaburda (Harvard Business School) focuses on the menu setter's decisions about what to include, and how large a menu to construct in the context of 401(k) plan choices. Key concepts include: When the cost of increasing the size of a menu is sufficiently small, a low-ability, or less skilled, menu setter will offer more items in the menu than a high-ability menu setter, who will be more discriminate in deciding which menu items to include. Combining the two results leads to a negative relation between menu size and menu quality: Larger menus are worse. This counterintuitive finding follows from the fact that the smaller menu set by the high-ability menu setter is not a subset of the larger menu set by the low-ability menu setter. One must be aware of the role played by menu setters in designing the menu offered to individuals. An unskilled menu setter may offer many choices, but the quality of those choices may be inferior. Closed for comment; 0 Comments.
- 31 Mar 2011
- Working Paper Summaries
What Do CEOs Do?
If time is money, as the old adage goes, then a CEO's schedule is especially important to a firm's financial success. This raises a fair question: What do CEOs do all day? To that end, researchers followed the activities of 94 CEOs in Italy over the course of a pre-specified week, enlisting the CEOs' personal assistants to track their bosses' activities with time-use diaries. Research was conducted by Raffaella Sadun of Harvard Business School, Luigi Guiso of the European University Institute, and Oriana Bandiera and Andrea Prat of the London School of Economics. Key concepts include: Compared with CEOs who work shorter hours overall, CEOs with longer workdays tend to devote more time meeting with other employees within the company and less time meeting with outsiders. The better the firm's governance structure, the more likely it is that a CEO will spend more time meeting with insiders than outsiders. The findings show a strong correlation between hours worked and productivity—a 2.14 percentage point increase in productivity for every one percentage point increase in hours worked. That positive correlation is driven entirely by the time a CEO spends with company insiders. Time spent with insiders is correlated with profits; time spent with outsiders is not. A possible interpretation is that spending time with outsiders might be more beneficial to the CEO than to the firm. Closed for comment; 0 Comments.
- 16 Mar 2011
- Working Paper Summaries
Driven by Social Comparisons: How Feedback about Coworkers’ Effort Influences Individual Productivity
Francesca Gino and Bradley R. Staats explore how the valence (positive versus negative), type (direct versus indirect), and timing (one-shot versus persistent) of performance feedback affects an employee's job productivity. Specifically, through field experiments at a Japanese bank, they investigate the extent to which job performance is affected when employees learn where they stand relative to their coworkers. Key concepts include: Telling an employee that her job performance falls in the bottom of her group will lead that employee to better her performance. But telling her that she is at the top of the group will not significantly affect performance. An indirect approach yields different results. An employee who simply learns that he doesn't fall in the bottom of his group is likely to worsen his productivity, while an employee who simply learns that he isn't in the top of his group is not likely to change his work habits at all. Persistence is effective. Employees who receive persistent feedback from employers are likely to perform better at work than those who don't, and that goes for both positive and negative feedback. Closed for comment; 0 Comments.
- 06 Jan 2011
- What Do You Think?
How Should Management Deal With “Anonymous”?
Summing Up When it comes to the leaky Web, Jim Heskett's readers say assume the worst and act accordingly. (New forum on February 3.) Closed for comment; 0 Comments.
- 19 Nov 2010
- Working Paper Summaries
Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans
Companies generally pay their sales staff with some combination of salary, commissions, and bonuses for meeting quotas-with sales force costs averaging about 10 percent of sales revenue in the United States. This paper aims to gain insight into the most effective way to design a compensation plan, concentrating on whether bonuses boost sales productivity and whether they should be awarded quarterly or annually. Research, focusing on the sales force of a large office supply company, was conducted by Harvard Business School professor Thomas Steenburgh and Doug J. Chung and K. Sudhir of the Yale School of Management. Key concepts include: Bonuses do increase productivity. Quarterly bonuses increase sales force productivity more than annual bonuses. Sales people tend to give up when far away from reaching a quota, but they don't slow down once a quota is reached-especially if a firm offers commissions for overachievement. Closed for comment; 0 Comments.
- 15 Nov 2010
- Lessons from the Classroom
Connecting Goals and Go-To-Market Initiatives
In some respects, developing strategy is the easy part. Executing that strategy in alignment with strategic priorities is where real mastery of management takes place. Harvard Business School senior lecturer Frank V. Cespedes shows how it is done. Open for comment; 0 Comments.
- 04 Nov 2010
- What Do You Think?
Why Do We Chase Stars?
Summing Up: Is it wise for companies to recruit "star" performers? Discussing the book "Chasing Stars", Jim Heskett's readers support the idea that talent is portable between employers and that women are better at it than men. (Next Forum opens December 2) Closed for comment; 0 Comments.
- 26 Oct 2010
- Working Paper Summaries
When Does a Platform Create Value by Limiting Choice?
Platforms such as video games and smartphones need to attract users, and the best way to do so is to offer more and more applications. Is there ever a point where a platform should limit the variety available? Researchers Ramon Casadesus-Masanell and Hanna Halaburda observe that in many situations users enjoy consuming applications together. When such consumption complementarities are present, users may benefit if the platform limits choice. With fewer applications to choose from, it is easier for users to take full advantage from shared consumption. Key concepts include: Platforms have traditionally encouraged user adoption by providing as many applications as possible. This works because users value having more choices. When users prefer both using many applications and using the same applications as other users (multiplayer video games, for example), they face a trade-off. As it turns out, there is the tendency to use too many applications, a situation similar to a Prisoners' Dilemma: everybody would be better off consuming fewer applications but each user individually has the desire to consume more. By limiting the number of applications, the platform prevents users from consuming too many applications. If there are many applications to choose from, it is less likely that users will purchase the same set. In this case, limiting the number of applications helps the users coordinate on the same set. To limit choice, the platform has a variety of direct and indirect alternatives including imposition of high prices for developers to access the platform or directly restricting the number of applications available. The insight to practitioners is that maximizing the number of applications available is not always the best strategy for platforms. Instead, actively managing the number of applications may result in substantial value creation, which could be captured though access fees. Closed for comment; 0 Comments.
- 27 Sep 2010
- Research & Ideas
Customer Experts Lose Influence When Teams are Pressured
Group dynamics can take a bad turn when a team feels heightened pressure from stakeholders. In this Q&A, HBS professor Heidi K. Gardner explains why performance pressure makes team members do what seems irrational: defer to high-status "generalist" experts while ignoring colleagues close to the client. Key concepts include: Despite mutual respect initially, team dynamics can take a counterproductive turn when the group feels heightened pressure from external and internal stakeholders. When teams experience performance pressure, they usually listen more to high-status "generalist" experts in the group and unintentionally ignore members who know the client organization best. As team members privilege general expertise over customer-specific expertise, they miss out on key information that would improve how they customize and adapt the work for clients—a significant aspect of maintaining ongoing client relationships. Although it is tempting to blame certain individuals when this happens, Gardner's evidence shows that these processes are the responsibility of every team member. Managers can recognize the problem and take concrete steps to avoid it. Ultimately, soliciting everyone's contribution means little unless it is incorporated into the final deliverable for clients. Closed for comment; 0 Comments.
Rethinking the Fairness of Organ Transplants
Because of an organ shortage, hundreds or even thousands of people miss out on needed organ transplants each year. Business researchers at Harvard and MIT are rethinking how kidney transplants are allocated to give patients longer lives. An interview with professor Nikolaos Trichakis. Key concepts include: A new empirical model for allocating available kidneys to patients provides the potential for a system with greater fairness and longer life outcomes for those who receive transplants. The method—the work of Nikolaos Trichakis of Harvard Business School and Dimitris Bertsimas and Vivek F. Farias, both of MIT's Sloan School—can help policy designers create the most equitable point system based on their chosen constraints and criteria. In early simulations, the model suggests that life-year expectancies for the program can be increased by up to 8 percent, depending on variables plugged into the process. Closed for comment; 0 Comments.