- 31 Oct 2007
- HBS Case
Climate Change Puts Heat on GMs
Ready or not, companies are being swept up in the increasing public debate over global climate change. How should firms respond? A case study exploring how financial service giant UBS thinks through the issues has students coming down on different sides. Key concepts include: Firms are increasingly called upon to respond to public concerns and actions by competitors on the issue of climate change. 'Green' responses that are simple profit maximization won't impress activist organizations looking to reward exemplars. Companies who take leadership roles in the environmental arena also open themselves up as critical targets should something go wrong. In responding to requests from organizations, general managers should think strategically about how, if they get the decision right, the company can serve society while also improving the bottom line. Closed for comment; 0 Comments.
- 30 Oct 2007
- First Look
- 29 Oct 2007
- HBS Case
Marketing Maria: Managing the Athlete Endorsement
Anita Elberse discusses her research on sports marketing and a case study on tennis powerhouse Maria Sharapova. Closed for comment; 0 Comments.
- 24 Oct 2007
- Sharpening Your Skills
- 23 Oct 2007
- First Look
- 22 Oct 2007
- Research & Ideas
Bringing ‘Lean’ Principles to Service Industries
Toyota and other top manufacturing companies have embraced, improved, and profited by lean production methods. But the payoffs have not been nearly as dramatic for service industries applying lean principles. HBS professor David Upton and doctoral student Bradley Staats look at the experience of Indian software services provider Wipro for answers. Key concepts include: In terms of operations and improvements, the service industries in general are a long way behind manufacturing. Not all lean manufacturing ideas translate from factory floor to office cubicle. A lean operating system alters the way a company learns through changes in problem solving, coordination through connections, and pathways and standardization. Successful lean operations at Wipro involved a small rollout, reducing hierarchies, continuous improvement, sharing mistakes, and specialized tools. Closed for comment; 0 Comments.
- 17 Oct 2007
- Research & Ideas
Why Global Brands Work
Japanese automakers create single products and brands for worldwide consumption, while Ford customizes products for local markets. You know who won. Why do global brands work? What makes them work? Professor John Quelch provides some answers. Key concepts include: For decades, Ford has created specialized products for different countries while Toyota, Nissan, and Honda sold standard products under a single brand umbrella. Ford's strategy resulted in added manufacturing and supply chain costs, a balkanized bureaucracy, and deteriorating market share, financial performance, and stock price. There are 5 characteristics that all top global brands have in common. Closed for comment; 0 Comments.
- 16 Oct 2007
- First Look
- 15 Oct 2007
- Research & Ideas
Businesses Beware: The World Is Not Flat
With apologies to Thomas Friedman, managers who believe the hype of a flat world do so at their own risk, says HBS professor Pankaj Ghemawat. National borders still matter a lot for business strategists. While identifying similarities from one place to the next is essential, effective cross-border strategies will take careful stock of differences as well. A Q&A and book excerpt follow. Key concepts include: Some indicators of globalization aren't increasing as many experts have claimed. Toyota and Wal-Mart are examples of companies that understand how to deal with distance in a strategic way. Take a broad view of differences, figure out the ones that matter the most in your industry, and look at them not just as difficulties to be overcome but also as potential sources of value creation. Closed for comment; 0 Comments.
- 12 Oct 2007
- Working Paper Summaries
Mental Accounting and Small Windfalls: Evidence from an Online Grocer
In the course of daily life, people occasionally receive small windfalls. Every so often we are handed a gift certificate for $5 off a meal, find a $10 bill on the street, or win $20 in an impromptu game of poker. According to standard economic theory, these types of small windfalls should have no noticeable effect on spending decisions because such windfalls constitute meaningless changes to lifetime wealth. However, if you have ever been the recipient of a small windfall, you may remember thinking about ways to spend this unexpected cash, buying items you might not have otherwise purchased. This kind of behavior can be interpreted as an example of "mental accounting" as theorized by economists Richard H. Thaler and Hersh M. Shefrin. This paper presents evidence supporting some of the implications of a theory of mental accounting in the domain of online grocery shopping. Key concepts include: In the domain of online groceries, the redemption of a $10-off coupon increases an individual's spending, as predicted by Thaler and Shefrin. The increase in spending stimulated by the redemption of a $10-off coupon is focused on groceries that customers would not purchase in the absence of such a coupon. Closed for comment; 0 Comments.
- 11 Oct 2007
- Working Paper Summaries
How Firms Respond to Being Rated
(Previously titled "Shamed and Able: How Firms Respond to Information Disclosure.") As national governments lose the ability to regulate business activities, interest groups and concerned citizens are turning to private governance to monitor global supply chains, ensure product safety, and provide incentives for improved corporate environmental performance. Proponents hope that private governance incentives will encourage firms to act responsibly, but critics worry that these developments will merely forestall necessary government regulation. Social ratings provide one way to benchmark and compare firms' social performance. But are such ratings schemes effective? This paper investigates the effects of third-party environmental ratings, and finds that firms are particularly likely to respond to such ratings by improving their environmental performance when two circumstances arise simultaneously: (1) when the ratings threaten their legitimacy, and (2) when they face relatively low cost improvement opportunities. Key concepts include: Ratings provided by nongovernment organizations will be more influential on firm behavior if they do 2 things: highlight poor social issue management and performance while at the same time help firms identify low-cost improvement opportunities. The role of third-party monitoring will be increasingly important as private governance replaces government regulations around the world. Closed for comment; 0 Comments.
- 10 Oct 2007
- Research & Ideas
“Blank” Inside: Branding Ingredients
When Intel launched the Intel Inside campaign in the 1990s, many marketers thought the chip giant was nuts. Who cared about the microprocessor inside their PC? Turns out Intel created a branding sensation and raised awareness of the importance of ingredient branding, says professor John Quelch. Today's best example: The Boeing Dreamliner. Closed for comment; 0 Comments.
- 10 Oct 2007
- First Look
- 10 Oct 2007
- Working Paper Summaries
Harnessing Our Inner Angels and Demons: What We Have Learned About Want/Should Conflicts and How That Knowledge Can Help Us Reduce Short-Sighted Decision Making
Many of the most important problems facing the world today are exacerbated by myopic decision-making. Examples include climate change, under-saving for retirement, deficit spending, and obesity. As observed by Freud, contemporary psychologists and researchers, and entertainers, people everywhere struggle to choose between doing what they want to do and what they should do. This paper synthesizes 15 years of empirical explorations of this "want/should" conflict and discusses the most important applications of this work. The results of recent studies have the potential to help individuals and policymakers by arming them with insights about how to increase the chances that they and their constituents, respectively, will favor options that are in their best interest. Key concepts include: Knowledge of the want/should self could help individuals and policymakers learn how to design circumstances that steer people away from making impulsive, short-sighted decisions. Closed for comment; 0 Comments.
- 08 Oct 2007
- Research & Ideas
Management Education’s Unanswered Questions
Managers want the status of professionals, but not all managers want the constraints that go along with professions. Why? For more than 100 years, business education at the top universities has been searching for its soul. HBS professor Rakesh Khurana, author of a new book, says business school education is at a turning point. Key concepts include: Is management a profession? After more than a century of business education, it remains an open question. The founders of today's top business schools envisioned a world in which managers served the best interests of society, not narrow self-interests. Management education is closely linked with the prevailing winds of society. Elite business schools today are at a crossroads, especially since the rise of business education in China and India. Closed for comment; 0 Comments.
- 04 Oct 2007
- What Do You Think?
Has Managerial Capitalism Peaked?
Summing Up. Professor Jim Heskett considers his reader's comments on the growing imbalance between what John Bogle terms managerial capitalism and owners' capitalism. Closed for comment; 0 Comments.
- 04 Oct 2007
- Working Paper Summaries
Fair (and Not So Fair) Division
"Fair" could be defined as what people of good will would want to be. This does not constitute an operational definition, however. This paper provides a specific procedure to calculate what could be considered fair and reasonable for various situations that require a fair division. A simple example would be a family that has inherited objects of artistic and/or sentimental value and wants to divide them up fairly while taking into account differences in taste. Laymen, mathematicians, and economists all have their own proposals for creating a fair division. Pratt suggests a procedure that, when put to the test of a range of examples, produces outcomes that accord with our intuitive sense of what is fair and desirable while previously proposed procedures do not. Key concepts include: The procedure measures the value of each object in terms of its desirability to the various participants. It allocates the objects so that the participants receive the same total value (or value proportional to their entitlements if they are unequal), without envy or waste ("money left on the table"). Randomization is used if needed to accomplish this. Many procedures work well on average problems. Indeed, all reasonable procedures are much alike in near-symmetric problems. It is the lopsided examples that test the procedures, especially with more than two participants. Participants are not penalized for receiving objects of no value to anyone else or for being honest about their values for such objects. Closed for comment; 0 Comments.
- 03 Oct 2007
- Working Paper Summaries
The Causes and Consequences of Industry Self-Policing
The corporate confession is a paradox, as described in this paper aimed at managers, policymakers, and citizens. Why would a firm that identifies regulatory compliance violations within its own operations turn itself in to regulators, rather than quietly fix the problem? Economic intuition suggests that firms will self-disclose violations only when the cost of doing so is less than the expected cost of hiding violations. However, while the cost of doing so can be increased regulatory scrutiny, there is often almost no expected cost of hiding violations. To explore the complex behavior of corporate self-disclosure, Short and Toffel conducted a large-scale analysis in the context of the U.S. Environmental Protection Agency's Audit Policy. They investigated what factors lead organizations to self-disclose violations that went undiscovered by regulators, and asked whether these self-disclosing organizations were obtaining any unofficial regulatory benefits above and beyond formal penalty mitigation. They also evaluated whether self-policing promotes the regulatory objective of improving compliance records. Key concepts include: Government regulatory scrutiny is a leading factor that drives firms in a public-private partnership where firms self-police their own regulatory compliance and self-disclose violations. Self-policing and self-disclosing provide mutual benefits for regulators and firms, although ongoing investment in government enforcement remains a critical success factor. Closed for comment; 0 Comments.
- 03 Oct 2007
- Research & Ideas
Dealing with the ‘Irrational’ Negotiator
"Negotiators who are quick to label the other party 'irrational' do so at great potential cost to themselves," say HBS professors Deepak Malhotra and Max H. Bazerman. Their new book, Negotiation Genius, combines expertise in psychology with practical examples to show how anyone can improve dealmaking skills. In this excerpt, Malhotra and Bazerman describe what to do when the other party's behavior does not make sense. Open for comment; 0 Comments.
The Changing Face of American Innovation
Chinese and Indian scientists and engineers have made an unexpectedly large contribution to U.S. technology formation over the last 30 years, according to new research by HBS professor William R. Kerr. But that trend may be ebbing, with potentially harmful effects on future growth in American innovation. Key concepts include: Chinese contributions to U.S. innovation as recorded in patent and trademark data increased from under 2 percent of U.S. domestic inventors in 1975 to over 8 percent today. In the same period, Indian inventors also rose, to almost 5 percent of the total in 2000. Since 2000, Chinese scientists' contributions have leveled off, and Indian contributions have declined slightly. Will American innovation suffer? Closed for comment; 0 Comments.