- 12 Nov 2010
- Research & Ideas
One Report: Integrated Reporting for a Sustainable Strategy
What a company externally reports shapes how it behaves internally. The key question is, "What should companies report?" Key concepts include: Integrated reporting takes corporate reporting to the next level. The state of integrated reporting is embryonic, more an aspiration than a codified management practice. Expanding adoption will change how society thinks about the role of companies. An action plan for integrated reporting to drive its adoption has been developed. Closed for comment; 0 Comments.
- 09 Nov 2010
- First Look
First Look: November 9, 2010
The slow pace of accounting scholarship … Why company growth doesn't translate to more jobs … A new brand architecture at The Taj. Closed for comment; 0 Comments.
- 09 Nov 2010
- Working Paper Summaries
The Unbundling of Advertising Agency Services: An Economic Analysis
From 1982 through 2007, U.S. advertising agencies increasingly "unbundled," or disaggregated, services such as copywriting and media placement, moving away from the industry's traditional one-stop-shop model. At the same time, agencies began to charge clients based on a fee-for-service system, rather than collecting commissions on media placements. The researchers analyze this trend and consider how it may be interpreted by the economic theory of bundling. Key concepts include: Agencies are more likely to unbundle services with increasing size and diversification but are less likely to do so with increasing age. A strong trend toward unbundling over time is evident, a result partially explained by increases in media prices during the study period. With the arrival of new media technologies and lower-priced digital ads, holding companies are considering re-organizing their media agencies with digital and other capabilities so as to position themselves as offering clients broader "marketing solutions" beyond media planning and buying. Such "re-bundling" may also reflect the lower prices for digital advertising. Closed for comment; 0 Comments.
- 08 Nov 2010
- Research & Ideas
How to Fix a Broken Marketplace
Alvin E. Roth was a co-winner of the Nobel Prize in Economic Science this week for his Harvard Business School research into market design and matching theory. This article explores his research. Key concepts include: Successful marketplaces must be "thick, uncongested, and safe." Sufficient "thickness" means there are enough participants in the market to make it thrive. "Congestion" is what can happen when markets get too thick too fast: there are heaps of potential players, but not enough time for transactions to be made, accepted, or rejected effectively. "Safety" refers to an environment in which all parties feel secure enough to make decisions based on their best interests, rather than attempts to game a flawed system. Closed for comment; 0 Comments.
- 05 Nov 2010
- Research & Ideas
The Work-Around Culture: Unintended Consequences of Organizational Heroes
Professor Anita Tucker shares findings from her research on the problems caused by "work-around cultures" in hospitals. Key concepts include: Work-around cultures are pervasive in health care. Frequent work-arounds can be costly and impair organizational effectiveness. There are benefits to work-arounds which can be compelling on the individual level. Organizational policies and managerial behavior create a culture for work-arounds or systemic problem solving. The solution to work-arounds is an improvement-oriented culture. Closed 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.
- 03 Nov 2010
- Working Paper Summaries
How Did Increased Competition Affect Credit Ratings?
When Fitch Ratings took on Standard & Poor's and Moody's as an alternative credit rating agency in the 1990s, there was a general assumption that the increased competition would lead to higher-quality corporate debt ratings from the incumbents. In fact, their ratings quality declined during the 10-year study period, according to Harvard Business School's Bo Becker and Washington University's Todd Milbourn. One possible cause: competition weakens reputational incentives that drive ratings quality. Key concepts include: The entry of a third major rating agency, Fitch, coincided with lower overall quality, as measured by both the levels and the informational content of incumbents' ratings. Prior to Fitch's growth into a serious competitor, S&P and Moody's faced limited competition for rating corporate bonds. A major concern for the raters was maintaining their reputation with investors as providers of honest, accurate ratings. Increasing competition may force raters to compete harder for issuers' business, reducing their focus on the long term and thereby undermining quality. This appears to have been the case with the additional competition from Fitch. Incumbents' ratings became higher and less informative in those industries where Fitch became more prominent as a rater of corporate bonds. For regulators and policymakers, it is worth considering that increasing competition in the ratings industry involves the risk of impairing the reputational mechanism that seemingly brings about the provision of good quality ratings. Closed for comment; 0 Comments.
- 02 Nov 2010
- First Look
First Look: November 2, 2010
Sales bonuses--do they work? ... When open architecture beats closed ... Deciding between Android and iOS Closed for comment; 0 Comments.
- 02 Nov 2010
- Working Paper Summaries
Making the Numbers? ‘Short Termism’ & the Puzzle of Only Occasional Disaster
Executives at public companies are always under pressure to "meet the numbers" each quarter, often so much so that they sacrifice long-term investments in order to make everything look rosy in the short term. In this paper, Harvard Business School professor Rebecca M. Henderson and Sloan School of Management professor Nelson P. Repenning set out to reconcile the apparently contradictory strategies of short-term results and long-term investments. Key concepts include: The capability of a company is similar to that of stock, in that managers cannot influence it directly but can only control its rate of change. A company's tendency to focus almost solely on short-term earnings can have very different consequences depending on how close a firm's capability is to a critical "tipping threshold". Above this threshold, focusing on short-term earnings has little effect on long-term performance. Below it, the firm's performance may begin to spiral downward. Closed for comment; 0 Comments.
- 01 Nov 2010
- Research & Ideas
How IT Shapes Top-Down and Bottom-Up Decision Making
What determines whether decisions happen on the bottom, middle, or top rung of the corporate ladder? New research from professor Raffaella Sadun finds that the answer often lies in the technology that a company deploys. Key concepts include: Enterprise Resource Planning software is a decentralizing technology: It provides information that enables lower-level managers to make more decisions without consulting their superiors. By the same token, Computer-Assisted Design and Computer-Assisted Manufacturing software creates a situation in which the plant worker needs less access to superiors in order to make a decision. The better the data network, the easier it is for workers to lean on superiors and rely on them to make decisions. It's also easier for executives to micromanage and keep all the decisions in the corporate office. Trust is also a key factor in determining whether decisions are centralized at headquarters or decentralized at the local level. Research finds that the average level of trust of a multinational's home country tends to influence the level of decentralization in that company. Open for comment; 0 Comments.
- 29 Oct 2010
- Research & Ideas
Will I Stay or Will I Go? How Gender and Race Affect Turnover at ‘Up-or-Out’ Organizations
Gender and racial inequalities continue to persist at "up-or-out" knowledge organizations, making it difficult for women and minorities to advance to senior levels, Kathleen McGinn says. Closed for comment; 0 Comments.
- 28 Oct 2010
- Working Paper Summaries
The Distinct Effects of Information Technology and Communication Technology on Firm Organization
At what point in the corporate food chain are big decisions made? It depends on technology, according to new research, which finds that information-based software will help to push decisions further down the corporate ladder, whereas communication technologies will push decisions up to the top. Research was conducted by Nicholas Bloom of Stanford University; Assistant Professor Raffaella Sadun of Harvard Business School; and Luis Garicano and John Van Reenen of the London School of Economics. Key concepts include: Enterprise Resource Planning software is a decentralizing technology: It provides information that enables lower-level managers to make more decisions without consulting their superiors. By the same token, Computer Assisted Design software creates a situation in which the worker needs less access to superiors in order to make a decision. On the other hand, the better the data network, the easier it is for workers to communicate with their superiors and to rely on them to make decisions. Closed for comment; 0 Comments.
- 27 Oct 2010
- Working Paper Summaries
The Intensive Margin of Technology Adoption
To anyone who observes the world, it's pretty clear that a country's poverty level is at least somewhat related to its adoption of new technologies. Historically, though, this fact has been difficult to quantify. Harvard Business School professor Diego Comin and MIT researcher Martí Mestieri are developing a model to analyze the relationship between economic growth and technology adoption. In their paper, they discuss both "extensive" margins (the length of time it takes a country to adopt any given new technology) and "intensive" margins (the number of technology units--smartphones, PCs, etc.--that the country adopts). Key concepts include: The role of technology is crucial to understanding per capita income differences. Differences just in the intensive margin of technology adoption account for some 45 percent of cross-country differences in per capita income. As a whole, technology adoption seems to account for 70 percent of differences in cross-country per capita income. Closed for comment; 0 Comments.
- 27 Oct 2010
- Working Paper Summaries
Prosocial Spending and Well-Being: Cross-Cultural Evidence for a Psychological Universal
Can money buy happiness? Apparently it can--if that money is spent on someone else. New research shows that people around the world gain emotional benefits from using their financial resources to benefit others. The research, which included data from 136 countries, was conducted by Lara B. Aknin, Elizabeth W. Dunn, Christopher P. Barrington-Leigh, and John Helliwell, University of British Columbia; Robert Biswas-Diener, Centre of Applied Positive Psychology; Imelda Kemeza, Mbarara University of Science & Technology; Paul Nyende, Makerere University; Claire Ashton-James, University of Groningen; and Michael I. Norton, Harvard Business School. Key concepts include: Much like eating or sex, generosity seems to generate positive feelings in almost everyone, regardless of cultural context. Survey respondents reported a greater sense of well-being after reflecting on a time when they spent money on others rather than on themselves. Although spending money on others differs in both form and frequency in poor versus rich countries, the emotional consequences are consistently positive. Closed for comment; 0 Comments.
- 26 Oct 2010
- First Look
First Look: October 26, 2010
Multicultural selling inside the United States ... Waging a "negotiation campaign"... Building trust around the multicultural bargaining table. 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.
- 25 Oct 2010
- HBS Case
Tesco’s Stumble into the US Market
UK retailer Tesco was very successful penetrating foreign markets—until it set its sights on the United States. Its series of mistakes and some bad luck are captured in a new case by Harvard Business School marketing professor John A. Quelch. Key concepts include: Entering the US, Tesco deserves credit for creating a neighborhood market approach—emphasizing fresh produce and meats, and good quality but value-priced prepared meals. By not partnering or hiring local executives, Tesco missed the opportunity to learn more about the habits and needs of target customers. Tesco rightly aimed to scale the concept as soon as possible so that fixed overhead investments in its own distribution centers could be spread across a larger number of stores. Perhaps Tesco's original rollout plan was too ambitious, with executives assuming that the company would get everything right on the first try. Tesco has listened to its customers, learned from its mistakes, and made appropriate midcourse corrections. Closed for comment; 0 Comments.
- 22 Oct 2010
- Research & Ideas
Panel on Pedagogical Innovations in MBA Courses
Faculty Research Symposium 2010: Multiple pedagogical innovations are taking place at HBS that are fundamentally changing students' learning experiences. Key concepts include: The Global Leader Initiative seeks to make the educational experience more powerful by forging greater integration between courses. The Building Green Businesses Seminar was created to accelerate the rate at which green business issues enter the mainstream curriculum. Weekly one-page papers are used by professor Youngme Moon to force students to distill their thinking, take a point of view, and reflect on lessons learned, while raising the overall quality of discussion in the classroom. The Authentic Leadership Development course encourages students to understand themselves before leading others. Closed for comment; 0 Comments.
- 20 Oct 2010
- Research & Ideas
HBS Workshop Encourages Corporate Reporting on Environmental and Social Sustainability
The concept of integrated reporting could help mend the lack of trust between business and the public, Harvard Business School Dean Nitin Nohria tells attendees at a seminal workshop. Closed for comment; 0 Comments.
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.