- 11 Sep 2008
- Working Paper Summaries
Competing Complements
Over the last two decades, an increasing number of industries have evolved from vertical integration to more horizontal structures where firms design and manufacture components that are later assembled by third parties for the final customer. In these horizontal industries, firms may be "complementors," rather than customers, suppliers, or competitors. Classic examples of complementors include Intel and Microsoft. Similar complementor relationships arise in industries such as communications, consumer electronics, automobiles, and health care. In these industries, complementor analysis may be as important as competitor analysis. The authors of this paper introduce competition into one side of complementor analysis, and suggest implications for managers, public policy, and the development of theory. Key concepts include: For managers, one way to persuade complementors to behave in ways beneficial to you is by promoting competition in their "spaces." However, if the competition that you can induce is mild, you are better off dealing with monopolist complements. From a public policy viewpoint, mild competition within complements might be preferable to intense competition. Moreover, duopolistic competition between complements might generate more total surplus than a triopoly. From a theoretical viewpoint, this paper is a first step toward a general theory of competition between and within complements. The paper adds to the literature on co-opetition initiated by Brandenburger and Nalebuff (1996). Closed for comment; 0 Comments.
- 10 Sep 2008
- Research & Ideas
Long-Tail Economics? Give Me Blockbusters!
Although the Long Tail theory might argue otherwise, HBS marketing professor John Quelch believes in the power of blockbusters to excite consumers, motivate salespeople, and attract top talent. Key concepts include: In a globally integrated market, blockbuster brands that address common consumer needs are more important than ever. Blockbusters help companies excite consumers, motivate salespeople, and attract top talent. What makes a blockbuster? Size, speed, scarcity, sustainability, sizzle. Closed for comment; 0 Comments.
- 09 Sep 2008
- First Look
- 08 Sep 2008
- HBS Case
The Value of Environmental Activists
With decidedly non-profit goals leading them on, how do environmental protection groups such as Greenpeace and World Wildlife Fund create value? Can it be measured? A Q&A with Harvard Business School professor Ramon Casadesus-Masanell and case writer Jordan Mitchell. Key concepts include: The challenge for a business student is how to put a quantifiable measure on whether Greenpeace and WWF are successful in reaching goals. WWF and Greenpeace create value by increasing the world's willingness-to-pay on environmental issues. Most scientists agree that the earth is deteriorating at a faster rate than during the 1960s and 1970s, but it would be worse off had it not been for the tireless campaigning of environmental NGOs. Closed for comment; 0 Comments.
- 05 Sep 2008
- What Do You Think?
Is Case Method Instruction Due for an Overhaul?
Online forum now closed. The case method of teaching business management has come under criticism on a number of fronts as educators rethink how to incorporate new teaching tools and methods made available by technology. Responses to Professor Jim Heskett's recent column, however, suggest that the case method might even be gaining relevance over time. Closed for comment; 0 Comments.
- 04 Sep 2008
- Working Paper Summaries
Wellsprings of Creation: Perturbation and the Paradox of the Highly Disciplined Organization
Many organizations struggle to balance the conflicting demands of efficiency and innovation. Organizations can become more efficient in the short run by replacing costly, unpredictable problem solving activity with consistent, streamlined routines. However, this efficiency often comes at the cost of long-run adaptability. The more organizational activity is dominated by stable routines, the less the organization learns, and the more rigid and inflexible it becomes. To escape this fate, the authors of this working paper theorize that highly disciplined organizations must actively engage in strategic and selective perturbation of established routines. A perturbation interrupts an established routine and creates an opportunity to innovate and learn. Using illustrations from Toyota, the authors investigate the conditions under which perturbations can sustain exploration in highly disciplined organizations. Key concepts include: To sustain adaptability in the long term, perturbations must occur throughout the organization. In highly disciplined organizations, adaptability depends on the active participation of organization members in inducing and interpreting perturbations. Management must trust employees to perturb processes, teach them to detect and interpret perturbations, and motivate them to do so. In the long term, business success depends as much on the commitment and knowledge of frontline employees as on strategic decision-making by senior management. Closed for comment; 0 Comments.
- 02 Sep 2008
- Research & Ideas
Indulgence vs. Regret: Investing in Future Memories
Good news for makers of $20,000 watches and other luxury goods and services. Recent research from Harvard Business School professor Anat Keinan and a colleague suggest that we often regret not indulging ourselves earlier in life. Key concepts include: People can be too farsighted, or hyperopic, leaving wistful regrets of missing out on life's pleasures when they look back at how they spent their time. It's possible to motivate consumers to indulge themselves by simply asking them what they think they will regret in 10 years. Marketers can convince consumers that buying their product is actually a farsighted behavior, an investment in future memories. Closed for comment; 0 Comments.
- 02 Sep 2008
- First Look
- 29 Aug 2008
- Working Paper Summaries
Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls
Many market institutions have evolved to coordinate the timing of transactions and to prevent them from taking place too early or at uncoordinated times. In the case of post-season college football games, called "bowls," during the early 1990s the determination of which teams would play in which bowls was often made with several games still remaining to be played in the regular season. Practically speaking, this meant that the teams with the best end-of-season records might not play one another, because at the time the matchings were determined it wasn't yet known which teams these would be. Over the last decade, however, this market has undergone a number of reorganizations that have delayed this matching decision until the end of the regular season. For this working paper, the authors used Nielsen rating data on television viewership and the AP sportswriters' poll of team rankings to show that, by matching later, the chance of matching the best teams has increased, and the result is an increase in television viewership. Key concepts include: By matching bowl games later, the quality of the matched teams has improved, the likelihood of a championship game has increased, and the television viewership of all bowls in the late-matching consortia has increased. This paper may provide the first direct evidence and measurement of the inefficiency due to early transaction times in a naturally occurring market. Closed for comment; 0 Comments.
- 28 Aug 2008
- Working Paper Summaries
How Can Decision Making Be Improved?
While scholars can describe how people make decisions, and can envision how much better decision-making could be, they still have little understanding of how to help people overcome blind spots and behave optimally. Chugh, Milkman, and Bazerman organize the scattered knowledge that judgment and decision-making scholars have amassed over several decades about how to reduce biased decision-making. Their analysis of the existing literature on improvement strategies is designed to highlight the most promising avenues for future research. Key concepts include: People put great trust in their intuition. The past 50 years of decision-making research challenges that trust. A key task for psychologists is to identify how and in what decision-making situations people should try to move from intuitive, emotional thinking to more deliberative, logical thinking. The more that researchers understand the potentially harmful effects of some biased decision-making, the more important it is to have empirically tested strategies for reaching better decisions. Closed for comment; 0 Comments.
- 28 Aug 2008
- Sharpening Your Skills
Sharpening Your Skills: History Matters
Business history is a rich source of knowledge and inspiration for today's executives. Do we pay enough attention to the past? Here are four Working Knowledge articles that provide lessons from history about leaders, leadership, and business organization. Closed for comment; 0 Comments.
- 27 Aug 2008
- Research & Ideas
Creating Leaders for Science-Based Businesses
The unique challenges of managing and leading science-based businesses—certain to be a driver of this century's new economy—demand new management paradigms. At Harvard Business School, the opportunities start just across the street. From HBS Alumni Bulletin. Key concepts include: Despite the hundreds of billions of dollars invested in biotech in recent decades, most biotech companies do not turn a profit. Science-based companies require a different kind of leadership, which HBS intends to develop through research, analysis and teaching. Harvard's new science complex being built across from Harvard Business School presents many opportunities for cross-fertilization. Closed for comment; 0 Comments.
- 26 Aug 2008
- First Look
- 25 Aug 2008
- Research & Ideas
HBS Cases: Walking Away from a $3 Billion Deal
Managers of the ABRY Fund V were so successful they had investors waiting to pour in an additional $3 billion. But to invest that much would require trade-offs that could jeopardize the chemistry that made the fund successful in the first place. Take the money or walk away? From HBS Bulletin. Key concepts include: The case highlights tensions in the private equity business between generating wealth for the firm's investment professionals and the investors in the firm—the so-called limited partners. Co-founder Royce Yudkoff declines the $3 billion investments, believing the best way to prosper over the long haul is to generate a high rate of return rather than increasing dollars under management. Closed for comment; 0 Comments.
- 21 Aug 2008
- Working Paper Summaries
Traveling Agents: Political Change and Bureaucratic Turnover in India
Politicians and bureaucrats are two important pillars of governance, but while politicians are motivated by short-term electoral pressures, bureaucrats are driven by long-term career concerns. This difference in the nature of their incentives is, in most cases, deliberate and constitutionally provided for. Iyer and Mani address two key questions in this paper: How do politicians facing short-term electoral pressures control bureaucrats with low-powered incentives? In turn, how do bureaucrats respond to these incentives? The authors develop a simple framework and provide empirical evidence on both the politicians' and the bureaucrats' strategies, using a detailed data set on the entire career histories of officers in the Indian Administrative Service, the top layer of government bureaucracy in India. Key concepts include: The framework suggests that instituting limits to a politician's power to transfer bureaucrats across posts will favorably affect junior officers' incentives to invest in expertise. In India there is significant political influence on the bureaucracy through frequent transfers of bureaucrats across posts, despite the constitutional insulation provided to them against political pressures. Not all officers face the same odds of being transferred. High-skilled officers are much less likely to be transferred by an incoming politician and have more even career paths. Belonging to the same caste as the politician's party base was a factor that helped officers to secure more important posts. Closed for comment; 0 Comments.
- 20 Aug 2008
- Op-Ed
The Time is Right for Creative Capitalism
Bill Gates has it right. Business is the most powerful force for change in the world right now and gives the idea of creative capitalism real power, writes Harvard Business School Professor Nancy F. Koehn. Open for comment; 0 Comments.
- 19 Aug 2008
- First Look
- 18 Aug 2008
- Research & Ideas
How Disruptive Innovation Changes Education
HBS professor Clayton M. Christensen, who developed the theory of disruptive innovation, joins colleagues Michael B. Horn and Curtis W. Johnson to advocate for ways in which ideas around innovation can spur much-needed improvements in public education. A Q&A with the authors of Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns. Key concepts include: As an industry, education has certain elements that have made the market difficult to penetrate and lasting reform hard to come by. As a general rule, the most promising areas for innovation are pockets or areas that appear unattractive or inconsequential to industry incumbents and where there are people who would like to do something but cannot access the available offering. To improve education as an industry, businesspeople might consider investing in technological platforms that will allow for robust educational user networks to emerge. Closed for comment; 0 Comments.
- 14 Aug 2008
- Working Paper Summaries
The Agglomeration of U.S. Ethnic Inventors
The higher concentration of immigrants in certain cities and occupations has long been noted. There has been very little theoretical or empirical work to date, however, on the particular agglomeration of U.S. immigrant scientists and engineers. This scarcity is disappointing given the scale of these ethnic contributions and the importance of innovation to regional economic growth. William R. Kerr's study contributes to our empirical understanding of agglomeration and innovation by documenting patterns in the city-level agglomeration of ethnic inventors (e.g., Chinese, Indian) within the United States from 1975 through 2007. It is hoped that the empirical platform developed in this study provides a foothold for furthering such analyses. Key concepts include: Ethnic scientists and engineers are an important and growing contributor to U.S. technology development. The Chinese and Indian ethnicities, in particular, are now an integral part of U.S. invention in high-tech sectors. The data collected and analyzed in this research document with greater detail than previously available the powerful growth in U.S. Chinese and Indian inventors during the 1990s. These ethnic inventors also became more spatially concentrated across U.S. cities. The combination of such growth and concentration helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. Closed for comment; 0 Comments.
The Coming Transformation of Social Enterprise
A new generation of business leaders and philanthropists is experimenting with hybrid forms of social enterprises while demanding more transparency and accountability from the organizations they are funding. Harvard Business School professor Kash Rangan discusses what he sees as a sector on the brink of transformation. From the HBS Alumni Bulletin. Key concepts include: Social enterprise as an entity is primarily in the business of creating social value, regardless of whether it's for-profit or nonprofit. Venture philanthropy has to come of age and reorient itself by defining what measures of social return it is looking for. Nonprofits creating for-profit enterprises could pose an unnecessary distraction. There may be some consolidation of nonprofits at the top, but the sector will be more vibrant with many new players and actors helping to facilitate the transformation. Closed for comment; 0 Comments.