Society →
- 23 Nov 2011
- Working Paper Summaries
The Organization of Firms Across Countries
Economists have been paying increasing attention to the role that culture plays in a firm's overall performance. This paper focuses on how trust—a key cultural factor—affects firms' decision-making process, size, and productivity. Research was conducted by Nicholas Bloom of Stanford University, Rafaella Sadun of the Harvard Business School, and John Van Reenen of the London School of Economics. Key concepts include: If a firm is headquartered in a country where trust is prevalent (such as Sweden), it is much more likely to decentralize its decision making than if it is headquartered in a country in which trust is rarer (such as India). In short, higher trust leads to more decentralization. Trust also enables a firm to hire a large number of plant managers, because the CEO will feel comfortable delegating decisions to their direct reports without spending too much time on supervision. Thus, higher trust increases firm size. Higher trust increases the marginal value of information technology's effect on productivity. Closed for comment; 0 Comments.
- 28 Oct 2011
- Working Paper Summaries
Fairness, Efficiency, and Flexibility in Organ Allocation for Kidney Transplantation
For many people who suffer end-stage renal disease, a kidney transplant is considered a potentially life-saving gift. Allocation policies for kidneys from deceased donors are thus of central importance and have to accomplish major objectives in alleviating human suffering, prolonging life, and providing nondiscriminatory, fair, and equal access to organs for all patients. In this paper, the authors focused on national allocation policies in the United States and the recent effort to revise the current policy. Their design of a national allocation policy focuses on perhaps the simplest, most common and currently used priority method, namely a point system. They also present four case studies in which they designed new policies under different scenarios. Key concepts include: This is a novel method for designing allocation policies based on point systems in a systematic, data-driven way. The method offers flexibility to policymakers to select the fairness constraints desired, as well as the prioritization criteria on which the point system will be based. Critically, this method achieves an 8 percent increase in anticipated extra life-year gains, as demonstrated by numerical simulations, which are based on the statistical and simulation tools currently in use by US policymakers. Closed for comment; 0 Comments.
- 21 Oct 2011
- Working Paper Summaries
Market Interest in Nonfinancial Information
During the past two decades, there have been many ideas for improving business reporting of nonfinancial information such as on a company's environmental, social, and governance (ESG) performance. Using data from Bloomberg, authors Robert G. Eccles, Michael P. Krzus, and George Serafeim provide insights into market interest in nonfinancial information at a level of granularity not available until now. They identify exactly what information is of greatest interest, contrasting both the global and U.S. market across the full spectrum of ESG information and for each component of ESG, as well as Carbon Disclosure Project metrics. They also show variation in interest across asset classes and firm types, and present preliminary explanations for these differences. Key concepts include: From a practitioner perspective, these data can be used to benchmark one's own information use according to asset class and firm type. Practitioners can assess whether any differences represent competitive strengths or weaknesses in the information they are using in their decisions. Companies can use these findings to create more sophisticated communication strategies tailored to the information needs of market participants across asset classes and firm types. At the aggregate market level, interest in environmental and governance information is greater than interest in social information. Equity investors exhibit a higher interest in nonfinancial information compared to fixed income investors. Sell-side firms (broker-dealers) are primarily interested in greenhouse gas emissions data. In contrast, buy-side firms (hedge funds, insurance firms, pension funds, and money managers) are interested in a broad range of environmental, social, and governance information. The efforts of practitioners and researchers can improve the dissemination and use of nonfinancial information, thereby enabling companies to create more sustainable strategies for a more sustainable society. Closed for comment; 0 Comments.
- 15 Sep 2011
- Research & Ideas
High Ambition Leadership
Higher-ambition business leaders skillfully integrate both economic and social value. Professor Emeritus Michael Beer explains what makes them special, and how you can learn what they know, in his new book, Higher Ambition: How Great Leaders Create Economic and Social Value. Q&A plus book excerpt. Closed for comment; 0 Comments.
- 29 Jul 2011
- Working Paper Summaries
Who Is Governing Whom? Senior Managers, Governance and the Structure of Generosity in Large U.S. Firms
Analyzing several Fortune 500 firms over the period of 10 years, Christopher Marquis and Matthew Lee discuss the factors that influence corporate philanthropy, using the subject to theorize about and test how structural features of organizations help senior leaders to shape firm strategy. Key concepts include: Many practitioners today view corporate philanthropy as a strategic activity that addresses both social and economic goals. Corporate philanthropy is highest in corporations with new CEOs, and decreases with the length of CEO tenure. The greater the proportion of female senior managers in a company, the greater the corporate philanthropic contributions will be. Companies with larger boards tend to have higher philanthropic contributions. Closed for comment; 0 Comments.
- 19 Jul 2011
- Research & Ideas
Rupert Murdoch and the Seeds of Moral Hazard
Harvard Business School faculty Michel Anteby, Rosabeth Moss Kanter, and Robert Steven Kaplan explore the moral, ethical, and leadership issues behind Rupert Murdoch's News of the World fiasco. Open for comment; 0 Comments.
- 13 Jul 2011
- Research & Ideas
Experimental Researcher Helps Improve Health Care in Zambia
In seven years of field work in Zambia, Africa, professor Nava Ashraf's work is helping get low-cost health care products and services to the people who need them most. From the HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 06 Jul 2011
- Research & Ideas
Are You a Level-Six Leader?
Asking the question, whom do you serve? is a powerful vector on which to build a useful typology of leadership. Visiting professor Modesto Maidique offers a six-level Purpose-Driven Model of Leadership ranging from Sociopath to Transcendent. Key concepts include: The most telling question to ask a leader is, whom do you serve? Yourself? Your group? Society? The answer to this question often reveals more about leaders than knowing their personality traits, level of achievement, or whether they were "transformational" or "transactional" leaders. The six levels of leadership are Sociopath, Opportunist, Chameleon, Achiever, Builder, and Transcendent. Closed for comment; 0 Comments.
- 20 Jun 2011
- Lessons from the Classroom
Fame, Faith, and Social Activism: Business Lessons from Bono
Many executives struggle to balance work, family, and community, but for rock star Bono the effort is spread across the globe. In the HBS case "Bono and U2," professor Nancy F. Koehn discusses key business lessons to be learned from the famous band. Key concepts include: Take stock of how you are using your funds, your authority, and your people. A leader's mission and purpose isn't static; it evolves. The mission of the CEO should be related to the organization's performance. Who you are and what you stand for as an organization have great relevance to the people who buy your product. Closed for comment; 0 Comments.
- 07 Jun 2011
- Working Paper Summaries
The Institutional Logic of Great Global Firms
In practice, many large firms are now realizing the importance of humanism in corporate management. But in academia, much of management theory is still stuck on the ideas of early industrialization - focusing solely on the idea that the only real value is financial value. In this paper, Rosabeth Moss Kanter discusses how social logic guides the practices of many high-performing companies. Kanter suggests that such successful practices should provoke the creation of new economic theory, which will in turn provoke other firms to take note. She puts forth several propositions to make the case. Key concepts include: Regarding the firm as a social institution is a buffer against uncertainty and change, and generates a longer-term perspective than merely considering financial concerns. Articulation and transmission of social values can evoke positive emotions, stimulate intrinsic motivation, and propel self- or peer-regulation among a firm's employees. Embracing globalization requires a concern for social issues that extend beyond the boundaries of the firm. Closed for comment; 0 Comments.
- 02 Jun 2011
- Research & Ideas
Signing at the Top: The Key to Preventing Tax Fraud?
In filling out self-reported documents such as tax forms, we declare the information truthful with our signature, but usually we sign at the end of the form. Researchers Francesca Gino and Lisa Shu discuss whether governments and companies can bolster honesty simply by moving the honesty pledge and signature line to the top of the form, before people encounter the opportunity to cheat. Closed for comment; 0 Comments.
- 17 May 2011
- Working Paper Summaries
The Consequences of Mandatory Corporate Sustainability Reporting
The number of firms reporting sustainability information has grown significantly in the past decade, both due to voluntary actions and to mandates from several national governments and stock exchange authorities. In this paper, London Business School's Ioannis Ioannou and Harvard Business School's George Serafeim investigate whether mandatory sustainability reporting has any effect on a company's tendency to engage in socially responsible management practices. Key concepts include: The researchers show that mandatory sustainability reporting effectively promotes socially responsible managerial practices. Overall, supervision of managers by boards of directors improves, bribery and corruption decreases, and credibility of managers in society increases. In companies where sustainability reporting is a requirement, employee training becomes a higher priority, and corporate boards supervise management more effectively. These positive results are more pronounced in countries that have stronger law enforcement, countries where assurance of sustainability data is more frequent, and countries that are generally more developed. Closed for comment; 0 Comments.
- 05 May 2011
- Research & Ideas
How ‘Political Voice’ Empowers the Powerless
Women in India often are targets of verbal abuse, discrimination, and violent crimes—crimes that are underreported. Fortunately, an increase in female political representation seems to be giving female crime victims a voice in the criminal justice system, according to new research by Harvard Business School professor Lakshmi Iyer and colleagues. Key concepts include: Political representation of disadvantaged groups is an important means of giving them a voice in the criminal justice system. An Indian constitutional amendment enacted in 1993 mandated that at least one-third of council seats at the village, intermediate, or district level be filled by women. The rise in female representation empowered more women to report crimes. Female political representation also induced law enforcement officials to be more responsive to crimes against women. Similar results were found in crimes against Scheduled Castes—the so-called untouchables who have historically been at the bottom of the Hindu caste system. An increase in SC political representation led to an increase of documented crimes against the group. Women (or other minorities) might be better able to maximize their voice by increasing their representation more broadly, rather than targeting a few high-level positions. Closed for comment; 0 Comments.
- 21 Apr 2011
- Research & Ideas
Searching for Better Practices in Social Investing
Social change requires innovation, not just in organizational practices but in funding practices, as well. This was a key message at "Social Investing: Emerging Trends in a Changing Landscape," a recent panel discussion at Harvard Business School in which several professional philanthropists explored how best to support social change. Open for comment; 0 Comments.
- 06 Apr 2011
- Working Paper Summaries
Do Not Trash the Incentive! Monetary Incentives and Waste Sorting
Many cities encourage residents to sort their domestic trash into separate bins, for the sake of recycling some of it and thus reducing the amount of garbage that ends up in landfills. The problem is that sorting waste is not a fun activity, and not everyone is willing to do it. Using data from 95 municipalities in Italy, this paper discusses whether and how monetary incentives can encourage people to sort their trash. Research was conducted by Alessandro Bucciol of the University of Verona and the University of Amsterdam, Natalia Montinari of the University of Padua and the Max Planck Institute of Economics, and Marco Piovesan of Harvard Business School. Key concepts include: The paper discusses the pay-as-you-throw (PAYT) system, in which residents pay lower fees if they sort their trash than if they don't. The researchers found that the introduction of a PAYT system had a significant and positive net effect of 12.2 percent on the amount of trash that residents sort. This compares with a positive effect of 18.1 percent for the nonmonetary incentive of letting residents leave sorted bins outside their doors, rather than requiring them to carry their trash to drop-off bins on the street. Thus, the PAYT system is more of a complement than a substitute for the door-to-door collection system. However, the PAYT system does not affect the actual amount of waste each household creates. While the system induces residents to sort their trash, it does not induce them to produce less of it. Closed for comment; 0 Comments.
- 14 Mar 2011
- Research & Ideas
Water, Electricity, and Transportation: Preparing for the Population Boom
By 2050, the world's cities will have to support 3 billion more inhabitants, mostly in developing countries, with crucial investments needed in three areas: water, energy, and transportation. Several of the planet's top city planning and environmental business experts gathered at Harvard Business School earlier this month to discuss available options. Closed for comment; 0 Comments.
- 20 Jan 2011
- Working Paper Summaries
Testing Coleman’s Social-Norm Enforcement Mechanism: Evidence from Wikipedia
Harvard Business School professor Mikolaj Jan Piskorski and doctoral candidate Andreea Gorbatai look to the editing process on Wikipedia to test and validate the well-accepted (but little-verified) theory of sociologist James Coleman that social norm violations decline as network density increases. Support for Coleman's mechanism would alert us to the importance of punishments for norm violations and rewards for such punishments, and thus help us to design social systems in which norms are observed. Key concepts include: Coleman argued that high-density networks provide an opportunity structure within which third parties can compensate norm enforcers for the expense of chastising norm violators. Such payments encourage actors to punish those who violate norms, which in turn reduce the incidence of norm violation. Despite ubiquitous citations of Coleman's explanation, little empirical work has tested it convincingly. The researchers identified the improper use of the revert command by Wikipedia contributors-by which users can quickly knock out text they don't agree with and revert it back to a prior state-as a norm violation. The research found substantial support for the theory, suggesting that increasing network density to elicit norm compliance is justified. On Wikipedia, norm violations, punishments for such violations, and rewards for those who punish violators are all highly visible. Replicating these conditions in the design of a social system is critical; otherwise, norm violations will remain undetected and therefore unpunished. Open for comment; 0 Comments.
- 05 Jan 2011
- Op-Ed
Funding Unpredictability Around Stem-Cell Research Inflicts Heavy Cost on Scientific Progress
Funding unpredictability in human embryonic stem-cell research inflicts a heavy cost on all scientific progress, says professor William Sahlman. Open for comment; 0 Comments.
- 09 Dec 2010
- Working Paper Summaries
Friends in High Places
Research supports the old adage that says it's not what you know; it's whom you know--especially when it comes to the voting behavior of US politicians. In a National Bureau of Economic Research working paper, Harvard Business School professors Lauren Cohen and Christopher Malloy study the congressional voting record from 1989 to 2008. They show that personal connections among Congress members reliably affect how they will vote on pending legislation. Key concepts include: US senators are more likely to vote in favor of bills when other senators who graduated from the same university also vote in favor of these bills. Social ties between Congress members and executives of firms in their home states have a direct impact on legislator behavior. Senate voting behavior also is affected by who sits near whom on the Senate chamber floor. 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.