- 08 Jun 2010
- First Look
First Look: June 8
Changing the nature of small: Surveying the microfinance industry ... Family firms in China ... Case: "Creative Capital: Sustaining the Arts." Closed for comment; 0 Comments.
- 07 Jun 2010
- Research & Ideas
Improving Brand Recognition in TV Ads
Advertisers pay millions of dollars to air TV ads that are subsequently ignored by a third of viewers. New research by HBS professor Thales S. Teixeira offers a simple, inexpensive solution for marketers to retain brand recognition. Key concepts include: Repeating or "pulsing" brief images of a brand can significantly reduce the likelihood that viewers will zap it. Altering commercials to mimic a pulsing strategy is a virtually cost-free fix for a significant payoff. Viewers' attention should be managed as any other scarce resource. Closed for comment; 0 Comments.
- 03 Jun 2010
- Working Paper Summaries
Platforms and Limits to Network Effects
Why do platforms that restrict choice and charge higher prices seem to prosper alongside platforms offering cheap or free unlimited choice? In the online dating market, for example, eHarmony deliberately limits the number of candidates available to its customers. Headhunters show only a few candidates to the companies, and even fewer companies to the candidates. In the housing market, brokers limit the number of houses they show to potential buyers and sellers. In this paper, HBS professors Hanna Halaburda and Mikolaj Jan Piskorski challenge conventional understanding of platform competition and network effects by describing a two-sided matching environment and studying the indirect network effects in this environment. They show that the interplay between more choice and more competition influences the strength of network effects and attractiveness of a platform. Some agents may opt for a platform with few choices to avoid higher levels of competition. The researchers' model helps explain why platforms that limit their choice set coexist (and thrive) alongside platforms that offer greater choice. Key concepts include: Excessive increases in the number of candidates decrease agents' expected payoffs, due to increased competition. Some agents rationally opt for platforms that constrain choice even if they do not receive any additional service from such platforms, to avoid higher levels of competition. The strength of network effects depends on the type of the agent and on the number of available candidates on both sides of the market. A platform could use these factors to its advantage by offering fewer candidates to its members on both sides of the market. Agents may be willing to pay for participation in such a platform (and hence rationally decide to limit their choices) because they would face less competition. Closed for comment; 0 Comments.
- 02 Jun 2010
- What Do You Think?
How Do You Weigh Strategy, Execution, and Culture in an Organization’s Success?
Summing up: Respondents who ventured to place weights on the determinants of success gave the nod to culture by a wide margin, says HBS professor Jim Heskett. (Online forum now closed. Next forum opens July 2.) Closed for comment; 0 Comments.
- 02 Jun 2010
- First Look
First Look: June 2
High-potential employees: How to be one, how to stay one ... Navigating the China rules ... Case: "Russia: Revolution and Reform." Closed for comment; 0 Comments.
- 01 Jun 2010
- Sharpening Your Skills
Sharpening Your Skills: Social Reporting
The most difficult task for socially responsible companies is how to report the value of their work to a diverse group of stakeholders. Here's a starting place. Closed for comment; 0 Comments.
- 26 May 2010
- Working Paper Summaries
Unraveling Results from Comparable Demand and Supply: An Experimental Investigation
In many professional labor markets, most entry-level hires begin work at around the same time: for example, soon after graduating from college or graduate or professional school. Despite a common start time, offers can be made and contracts can be signed at any time prior to the start of employment, sometimes well over a year before employment will begin. "Unraveling" happens in markets in which competition for the elite firms and workers is fierce, but the quality of workers may not be reliably revealed until after a good deal of hiring has already been completed. Thus unraveling is sometimes a cause of market failure, particularly when contracts come to be determined before critical information is available. In this paper Muriel Niederle of Stanford, Alvin E. Roth of HBS, and M. Utku Ünver of Boston College consider conditions related to supply and demand that tend to facilitate or mitigate unraveling. Key concepts include: It is commonly suggested by economists and lay participants in markets that unraveling results from competition related to an imbalance of demand and supply. Unraveling can have many causes, because markets are multidimensional and time is only one-dimensional (and so transactions can only move in two directions in time, earlier or later). So there can be many different reasons that make it advantageous to make transactions earlier. When looking at a labor market, it is not uncommon for participants on both sides of the market to be nervous about their prospects, and it can be difficult to be sure which is the short side of the market. Even in a market with more applicants than positions there may be a shortage of the most highly qualified applicants. Attempts to prevent or reverse unraveling are often a source of new market design in the form of new rules or market institutions. Closed for comment; 0 Comments.
- 25 May 2010
- First Look
First Look: May 25
Why consumers don't mind restricted choice, sometimes ... How better management saves energy ... Case: "Zotter—Living by Chocolate." Closed for comment; 0 Comments.
- 24 May 2010
- Research & Ideas
Stimulus Surprise: Companies Retrench When Government Spends
Research from Harvard Business School suggests that federal spending in states appears to cause local businesses to cut back rather than grow. A conversation with Joshua Coval. Closed for comment; 0 Comments.
- 19 May 2010
- Working Paper Summaries
The Job Market for New Economists: A Market Design Perspective
How should the most appropriate employers and job candidates find each other? Newly minted economists typically send applications to an average of 80 potential employers, and as a result, many employers receive hundreds of applications. It is extremely time-consuming to sort through all the applications, and as the process unfolds, there is a risk of coordination failure, in which employers and candidates who would be well-suited do not manage to create a match. In this paper, HBS professors Peter A. Coles and Alvin E. Roth and colleagues provide an overview of the market for new PhD economists and describe new mechanisms to improve the matching process. They conclude by discussing the emergence of platforms for transmitting job market information, and other design issues that may arise in the market for new economists. Key concepts include: Practical market design is often a response to particular problems. A new market design often leads the way to developing new knowledge. Two new mechanisms have facilitated matches. The first, a signaling service, allows job candidates to express interest to a limited number to potential employers prior to interviews at association meetings. The second mechanism, a web-based "scramble," reduces search costs and "thickens" the late part of the job market for candidates and employers still seeking a match. Closed for comment; 0 Comments.
- 18 May 2010
- First Look
First Look: May 18
Meeting your match: Innovations in job-market design ... Working paper: "Men as Cultural Ideals: How Culture Shapes Gender Stereotypes ... Case: "Monsanto: Helping Farmers Feed the World." Closed for comment; 0 Comments.
- 17 May 2010
- Research & Ideas
What Brazil Teaches About Investor Protection
When Brazil entered the 20th century, its companies were a model of transparency and offered investor protections that government did not. Can our financial regulators learn a lesson from history? HBS professor Aldo Musacchio shares insights from his new book. Key concepts include: Companies can overcome the shortcomings of the legal system in which they operate by offering protections to investors. Corporate disclosure is perhaps the most important necessity for investor confidence. Policymakers should seek a balance between regulation, financial development, and economic growth. Closed for comment; 0 Comments.
- 13 May 2010
- Working Paper Summaries
Just Say No to Wall Street: Putting A Stop to the Earnings Game
Over the last decade, companies have struggled to meet analysts' expectations. Analysts have challenged the companies they covered to reach for unprecedented earnings growth, and executives have often acquiesced to analysts' increasingly unrealistic projections, adopting them as a basis for setting goals for their organizations. As Monitor Group cofounder Joseph Fuller and HBS professor emeritus Michael C. Jensen write, improving future relations between Main Street and Wall Street and putting an end to the destructive "earnings game" between analysts and executives will require a new approach to disclosure based on a few simple rules of engagement. (This article originally appeared in the Journal of Applied Corporate Finance in the Winter 2002 issue.) Key concepts include: Managers must confront the capital markets with courage and conviction. Managers must be forthright and promise only those results they have a legitimate prospect of delivering, and they must be clear about the risks and uncertainties involved. Managers must recognize that an overvalued stock can be damaging to the long-run health of the company, particularly when it serves as a pretext for overpriced acquisitions. Managers must work to make their organizations more transparent to investors and to the markets. To limit wishful thinking, managers must reconcile their own company's projections to those of the industry and their rivals. While recent history may have obscured the analyst role, managers should not simply presume that analysts are wrong when disagreement occurs. In fact, analysts have a vital monitoring role to play in a market economy. Closed for comment; 0 Comments.
- 11 May 2010
- First Look
First Look: May 11
Thinking of an innovation system as a pyramid ... Lessons from the U.K. and Germany in U.S. health-care reform ... Case: "Revitalizing Dell." Closed for comment; 0 Comments.
- 10 May 2010
- Research & Ideas
What Top Scholars Say About Leadership
As a subject of scholarly inquiry, leadership—and who leaders are, what makes them tick, how they affect others—has been neglected for decades. The Handbook of Leadership Theory and Practice, edited by Harvard Business School's Nitin Nohria and Rakesh Khurana, brings together some of the best minds on this important subject. Q&A with Khurana, plus book excerpt. Key concepts include: Leadership as a phenomenon for research is experiencing a rebirth due to developments in the academy and the urgency of improving leadership globally. At the turn of the 20th century, leadership was studied intensely. It then fell off the academic grid. Given the number of schools asserting leadership development as part of their mission statement, it is critical for scholars to understand and explain how leaders succeed and fail based on opportunities and constraints. Leadership should be examined through a variety of lenses, including psychology, sociology, economics, and history. Closed for comment; 0 Comments.
- 06 May 2010
- Working Paper Summaries
Introductory Reading For Being a Leader and The Effective Exercise of Leadership: An Ontological Model
Effective leadership does not come from mere knowledge about what successful leaders do; or from trying to emulate the characteristics or styles of noteworthy leaders; or from trying to remember and follow the steps, tips, or techniques from books or coaching on leadership. And it certainly does not come from merely being in a leadership position or in a position of authority or having decision rights. This paper, the sixth of six pre-course reading assignments for an experimental leadership course developed by HBS professor emeritus Michael C. Jensen and coauthors, accompanies a course specifically designed to provide actionable access to being a leader and the effective exercise of leadership as one's natural self-expression. Key concepts include: One of the conditions for realizing the promise of the leadership course is that students must be open to examine, question, and then transform their worldviews (models of reality) and frames of reference (mindsets). Students create for themselves a powerful 4-part contextual framework that calls them into being as a leader. Having done this what remains is to confront one's own Ontological Perceptual and Functional constraints so as: 1) to relax their ability to restrict one's perceptions of what must be dealt with in any leadership situation, and 2) to relax their ability to restrict one's freedom of choice for action in any leadership situation. Students cannot master that which they do not create for themselves. This is especially true of anything that is at first counterintuitive. Closed for comment; 0 Comments.
- 05 May 2010
- What Do You Think?
Is Denial Endemic to Management?
Poring over reader responses to his May column, HBS professor Jim Heskett is struck by the fact that they include behavioral, structural, and even mechanical remedies. (Forum now closed. Next forum opens June 3.) Closed for comment; 0 Comments.
- 04 May 2010
- First Look
First Look: May 4
"United Breaks Guitars": Song and response ... Annual Review of Financial Economics ... Case: "American Well: The Doctor Will E-See You Now." Closed for comment; 0 Comments.
- 03 May 2010
- Research & Ideas
What Is the Future of MBA Education?
Why get an MBA degree? Transformations in business and society make this question increasingly urgent for executives, business school deans, students, faculty, and the public. In a new book, Rethinking the MBA: Business Education at a Crossroads, Harvard Business School's Srikant M. Datar, David A. Garvin, and Patrick G. Cullen suggest opportunities for innovation. Q&A with Datar and Garvin plus book excerpt. Key concepts include: Executives and business school deans raised multiple concerns about the MBA landscape when the authors interviewed them for an HBS Centennial colloquium in 2008 on the future of MBA education. The challenges: Stakeholders question the value-added of MBA degrees. And MBAs lack sufficient leadership development, a "global mindset," and skill in navigating organizational realities. Rethinking the MBA examines each challenge in turn, and provides six case studies of schools that demonstrate flexibility and innovation in MBA education. Closed for comment; 0 Comments.
Agency Costs, Mispricing, and Ownership Structure
Under what circumstances do firms access capital markets when the potential for agency costs is high? The prevailing view holds that controlling shareholders sell shares to outsiders only when internal capital is inadequate to fund attractive investment opportunities. While the role of market efficiency in corporate finance has attracted considerable research attention, the interaction of stock market mispricing with agency problems is not well understood. HBS doctoral graduate Sergey Chernenko and professors C. Fritz Foley and Robin Greenwood propose a new explanation—based on stock market mispricing—for why firms with a controlling shareholder raise outside equity, even when firms cannot commit not to expropriate minority shareholders. Key concepts include: Stock mispricing offsets agency costs and induces a controlling shareholder to raise capital. Higher misvaluations are required to support the creation of ownership structures that give rise to more expropriation. To the extent that agency costs are deadweight instead of distributional transfers, mispricing facilitates the creation of inefficient ownership structures. Closed for comment; 0 Comments.