First Look

Abstract—Does “liking” a brand on Facebook cause a person to view it more favorably? Or is “liking” simply a symptom of being fond of a brand? We disentangle these possibilities and find evidence for the latter: brand attitudes and purchasing are predicted by consumers’ preexisting fondness for brands and are the same regardless of when and whether consumers “like” brands. In addition, we explore possible second-order effects, examining whether “liking” brands might cause consumers’ friends to view that brand more favorably. When consumers see that a friend has “liked” a brand, they are less likely to buy the brand relative to a more meaningful social endorsement: learning that a friend likes a brand, in the offline sense. Taken together, five experiments and two meta-analyses (N > 14,000) suggest that turning “liking” into improved brand attitudes and increased purchasing by either consumers or their friends may require more than just the click of a button.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50837

Abstract—In 2015, 70% of newly issued leveraged loans had weaker enforcement features, called covenant-light or "cov-lite"; this is nearly a three-time increase in cov-lite issuance compared to a previous peak in 2007. We evaluate whether this development can be attributed to market overheating, increased borrower demand for cov-lite loans, or a rise in creditor coordination costs. The last hypothesis stems from the increasing involvement of nonbank institutions and, in particular, the rise of mutual fund participation in the leveraged loan market after the financial crisis. Based on the wider syndication, (narrower) skills, and diverse incentives of nonbank institutional lenders, optimal contracts between them and corporate borrowers likely involve fewer monitoring tools and weaker control rights. We evaluate these explanations of cov-lite contract provisions in a large sample of U.S. loans for the 2001–2014 period. Consistent with creditor-driven explanations for cov-lite issuance, we show that cov-lite prices compress as the prevalence of cov-lite rises. Time patterns in cov-lite issuance closely match inflows to institutional lenders, and at a given time, cov-lite loans are, overwhelmingly, those with the highest ownership by structured products and/or mutual funds. The number and share of structured products and mutual funds also impact the propensity toward other contractual features that influence when and how creditors have control. However, these factors are less relevant in explaining the strength of restrictions on indebtedness, liens, payments, or assets sales.

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Abstract—In 2012 U.S. corporations spent $164.2 billion on training and education. Overwhelming evidence and experience shows, however, that most companies are unable to transfer employee learning into changes in individual and organization behavior or improved financial performance. Put simply, companies are not getting the return they expect on their investment in training and education. By investing in training that is not likely to yield a good return, senior executives and their HR professionals are complicit in what we have come to call the "great training robbery."

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Abstract—Prior to the 2013 elections in Kenya, the Electoral Commission sent 11 million nonpartisan text messages to registered voters in an effort to boost electoral participation. The messages had a positive effect on turnout but also decreased trust in Kenyan electoral institutions. We show that the information campaign backfired because the Electoral Commission failed to fulfill its commitment to deliver a transparent and peaceful election. The decrease in trust is stronger in areas that experienced election-related violence and for individuals affiliated (via their ethnicity) with the side that lost the presidential election. These results highlight the trade-offs associated with mobilizing voters in recently established democracies.

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Deji Akinyanju, founder of Nigerian fast-food chain Chicken Republic, and Ayo Oduntan, founder of an integrated Nigerian poultry operation (Amo Byng Group), are among a growing cadre of skilled food-industry entrepreneurs for whom the opportunities to serve the Nigerian market—a population of over 170 million, including a large and growing middle class—outweigh the challenges of operating there. And indeed, as embodied by Nigeria's status as a net food importer despite having 80 million hectares of potential agricultural land, the challenges are considerable. Animal feed is excessively expensive, driving up poultry production costs and limiting production volumes; illegal poultry imports threaten food safety while undercutting prices of domestic product; corruption is rampant; debt is exorbitantly expensive; commercial real estate is sparse; and electricity is unreliable. Yet, Nigeria has all the natural blessings to be an agricultural powerhouse competitive on an international scale. And it has the large, ambitious population needed to drive its development, both as workers and consumers. Akinyanju and Oduntan believe many of the issues constraining Nigeria's poultry sector can be alleviated with relatively simple solutions—and that doing so can open tremendous growth opportunities for their businesses and the country as a whole. Set in September 2015, this case provides a detailed look at Nigeria's poultry value chain and the complexities of modernizing a traditional and largely informal industry. It also presents an inspiring story of determined entrepreneurs succeeding against tough odds. Finally, for students whose conception of Nigeria is all too often reduced to simplistic headlines, this case offers a more nuanced look into the complexities, potential, and aspirations of what may be one of this century's most dynamic and important economies.

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In 2010, Human Rights Watch, a well-regarded international NGO, approached Barrick Gold asserting that members of the company’s security force at the Porgera Gold Mine in Papua New Guinea had on multiple occasions raped women who were trespassing onto the mine’s waste dumps in search of gold. Subsequent investigations identified significant evidence to support the allegations, and the revelations led to broad ranging change at both Porgera and at Barrick more generally. Drawing heavily on the United Nation’s Guiding Principles on Business and Human Rights (GPs), Barrick not only moved to make efforts to provide restitution to the women involved, but also designed and rolled out a comprehensive set of policies designed to embed the protection of human rights into the entire company. Barrick also played a central role in leading the development of an auditing and verification framework for the Voluntary Principles on Security and Human Rights (the VPs), a set of commitments embraced by most of the world’s largest extractive companies. The case provides students with an opportunity to analyze the challenges that arise from operating in environments with weak state institutions; to examine the challenges of implementing voluntary frameworks, such as the GPs or VPs, and their potential as alternatives to state institutions; to learn about the field of business and human rights; and to develop an analytic framework for evaluating the responsibilities of business leaders to society, especially from the perspective of human rights.

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In fall of 2015, the Toronto, Canada–based education technology nonprofit Rumie had distributed thousands of computer tablets preloaded with collections of thousands of pieces of curated educational content to nongovernmental organizations (NGOs) in some of the most impoverished countries around the world lacking in basic educational resources. Founder and executive director Tariq Fancy, with his team, were deciding whether to accept a large new order from an NGO in Pakistan that would require Rumie for the first time to provide ongoing services such as teacher training, performance monitoring, and other support. Some on the team felt that providing a full suite of bundled services would detract from their recent push to decouple Rumie's software and services from the physical tablets to achieve greater reach and scale. In October 2015, Rumie opened the LearnCloud, its proprietary online content curation portal for NGOs, to the public. Now anyone could discover, share, and rate free digital educational content from any source. Fancy considered, "Education access represents a big order and huge growth, but does it lead us into doing things we haven't done before, may not be good at, and may not be scalable to be used by different partners in different geographies?"

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Communicating persuasively is a critical skill for leaders of any team or organization. Yet, connecting and resonating with an audience can nevertheless be a challenging task. We outline how to effectively mobilize groups through the power of communication. This note will serve leaders and members of diverse groups as they find their voice to inspire, unite, and engage others through messaging. With multiple examples as a backdrop, we highlight four key components of effective messaging in this note: 1) Structuring Messages and the Persuasive Story Pattern, 2) Appealing to the Audience, 3) Persuasively Communicating through Rhetorical Devices, and 4) Delivering Clear and Captivating Messages.

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Describes the detailed inner workings of a high performance Formula One (F1) racing team. It shows how Lotus F1 Team has been able to battle bigger rivals in a very fast-moving, highly regulated, and ultra-competitive environment, where winning races can come down to split seconds. The case explores all elements of their high performance system: strategy, innovation, leadership, technology, engineering, and operations. Emphasis is placed on the interplay of these elements and how they confer competitive advantage to teams. Management dilemmas that are explored: retention of high performing individuals, response to disruptive technological changes, and regulatory design in competitive environments.

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Suncor, Canada's largest producer of "oil sands," faces a host of issues involving prices, costs, and the environment. The Government of Canada recently put an explicit limit on carbon emissions from oil sands and a price on carbon. Suncor, which produces more than 400,000 barrels per day of bitumen and synthetic oil must reduce its emissions at the same time that crude oil prices have been dropping. Reduction of cash operating costs, therefore, becomes key. Yet environmental organizations in the U.S. remain adamantly opposed to the production of oil sands and its movement into the U.S. by either pipeline (e.g., Keystone XL) or railcar. The concrescence of these issues poses immense challenges to Suncor management.

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