First Look

Abstract—This book compares the effects of globalization on two Latin American countries, Argentina and Chile, over time. The chapters examine the impact of multinationals, the growth of business groups, and the conflicted relations between business and government. The book represents a unique comparative study of the complex and non-linear impact of globalization and the evolution of business systems in two neighboring but very different countries. The book draws on literatures and archives that have previously only been available in Spanish, while the concluding chapter makes use of Harvard Business School's new project known as “Creating Emerging Markets,” which features lengthy interviews with the most iconic business leaders in Argentina and Chile over recent decades.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50182

Abstract—We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although operational transparency has been shown to improve consumer perceptions of service value, existing theory posits that increased contact between consumers and producers may diminish work performance. Two field and two laboratory experiments in food service settings suggest that transparency that 1) allows customers to observe operational processes (process transparency) and 2) allows employees to observe customers (customer transparency) not only improves customer perceptions, but also increases service quality and efficiency. The introduction of this transparency contributed to a 22.2% increase in customer-reported quality and reduced throughput times by 19.2%. Laboratory studies revealed that customers who observed process transparency perceived greater employee effort, and thus were more appreciative of the employees and valued the service more. Employees who observed customer transparency felt that their work was more appreciated and more impactful, and thus were more satisfied with their work and more willing to exert effort. We find that transparency, by visually revealing operating processes to consumers and beneficiaries to producers, generates a positive feedback loop through which value is created for both parties.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50173

Abstract—New software platforms use modern information technology, including full-featured web sites and mobile apps, to allow service providers and consumers to transact with relative ease and increased trust. These platforms provide notable benefits including reducing transaction costs, improving allocation of resources, and creating information and pricing efficiencies. Yet they also raise questions of regulation, including how regulation should adapt to new services and capabilities, and how to correct market failures that may arise. We explore these challenges and suggest an updated regulatory framework that is sufficiently flexible to allow software platforms to operate and deliver their benefits, while ensuring that service providers, users, and third parties are adequately protected from harm that may arise.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50144

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50159

Abstract—In this chapter we make a case for increased transparency of the methods used to obtain research findings. Although comprehensive reporting facilitates accurate assessment of a paper’s claims, the current reporting norm is secrecy, not openness. We begin by putting this situation into historical context, comparing reporting norms from a bygone era to those of today. Next, we explain why transparency is desirable, even if full compliance is not achieved. We then outline the obstacles—both psychological and institutional—to comprehensive reporting. We go on to discuss possible remedies and end by drawing connections between the disclosure problem and other ongoing challenges within psychological science and allied fields.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50151

Abstract—Many intend to stay fit but fail to exercise or eat healthfully; students intend to earn good grades but study too little; citizens intend to vote but fail to turnout. How can policymakers help people follow through on intentions like these? Plan-making, a tool that leverages research on memory and cognition as well as mechanical benefits of scheduling, is one underappreciated solution. We review experiments showing that forming specific, concrete plans increases follow through across a range of domains—from vaccinations to voting. Plan-making prompts are simple, inexpensive, and powerful tools for changing behavior, which preserve the autonomy of decision makers.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50157

Abstract—On September 15, 2015, President Obama issued an Executive Order recommending that executive departments and agencies use "behavioral science insights to better serve the American people." The articles in this special section were already in press when the order was issued, and this serendipity further underscores the timeliness of this special section. These articles propose many examples of the very actions that could be taken by federal (as well as state and local) agencies to promote psychological science in the spirit of President Obama's order.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50170

Abstract—When does increased service quality competition lead to customer defection, and which customers are most likely to defect? Our empirical analysis of 82,235 customers exploits the varying competitive dynamics in 644 geographically isolated markets in which a nationwide retail bank conducted business over a five-year period. We find that customers defect at a higher rate from the incumbent following increased service quality (price) competition only when the incumbent offers high (low) quality service relative to existing competitors in a local market. We provide evidence that these results are due to a sorting effect, whereby firms trade-off service quality and price, and in turn, the incumbent attracts service (price) sensitive customers in markets where it has supplied relatively high (low) levels of service quality in the past. Furthermore, we show that it is the high quality incumbent's most profitable customers who are the most attracted by superior quality alternatives. Our results appear to have long-run implications whereby sustaining a high level of service quality is associated with the incumbent attracting and retaining more profitable customers over time.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=39914

Abstract—Do monetary incentives encourage volunteering? Or, do they introduce a "greedy" signal and hence crowd out the motivation to volunteer? Since the strength of this greedy signal is normally unobserved, the answer is theoretically unclear, and corresponding empirical evidence is mixed. I overcome this ambiguity by examining individuals for whom the greedy signal strength is likely weak—those with public reputations about their past volunteer behavior. In a laboratory experiment, I show that crowd out in response to public incentives is much less likely among those with public, as opposed to private, reputations.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50190

Abstract—Previous research often interprets the choice to restrict one's future opportunity set as evidence for sophisticated time inconsistency. We propose an additional mechanism that may contribute to the demand for commitment technology: the desire to signal to others. We present a field experiment where participants could choose to give up money if they did not follow through with an action. If their commitment choice was made public rather than kept private, we find significantly higher uptake rates.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50191

Abstract—Volunteers provide a large source of labor in the United States, yet volunteer effort is often unresponsive to traditional incentives. To clarify the sources of this unresponsiveness within volunteering, we appeal to a classic explanation: targeting behavior. In particular, we provide a laboratory test of effort response to changes in wages, either accrued to individuals or to a charity, in the presence of expectations-based reference points or targets. When individuals earn money for themselves, higher wages lead to higher effort with relatively muted targeting behavior. When individuals earn money for a charity, higher wages instead lead to lower effort with substantial targeting behavior. For managers contemplating the use of performance goals or targets within nonprofit organizations, our results suggest careful consideration about the extent to which they may render other incentives less effective.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50189

Abstract—New, "big" data sources allow measurement of city characteristics and outcome variables higher frequencies and finer geographic scales than ever before. However, big data will not solve large urban social science questions on its own. Big data has the most value for the study of cities when it allows measurement of the previously opaque, or when it can be coupled with exogenous shocks to people or place. We describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities. We first show how Google Street View images can be used to predict income in New York City, suggesting that similar image data can be used to map wealth and poverty in previously unmeasured areas of the developing world. We then discuss how survey techniques can be improved to better measure willingness to pay for urban amenities. Finally, we explain how Internet data is being used to improve the quality of city services.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50192

Abstract—Diversified business groups are well-known phenomena in emerging markets, both today and historically. This is often explained by the prevalence of institutional voids or the nature of government-business relations. It is typically assumed that such groups were much less common in developed economies and largely disappeared during the twentieth century. This working paper contests this assumption with evidence from Britain between 1850 and the present day. During the nineteenth century, merchant houses established business groups with diversified portfolio and pyramidal structures overseas, primarily in developing countries, both colonial and independent. In the domestic economy, large single product firms became the norm, which over time merged into large combines with significant market power. This reflected a business system in which a close relationship between finance and industry was discouraged, but where there were few restrictions on the transfer of corporate ownership. Yet large diversified business groups did emerge, which had private or closely held shareholding and substantial international businesses. This working paper argues that diversified business groups added value in mature markets such as Britain. In the domestic economy, Pearson and Virgin created well-managed and performing businesses over long periods. The much-criticized conglomerates of the 1970s–1990s era such as Hanson and BTR were also quite financially successful forms of business enterprise. The demise of many of them appears to owe at least as much to management fads as to serious financial underperformance.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50193

This case tracks Turkish Airlines' transition from regional player to global powerhouse. With an order for 212 aircraft in the first half of 2013, the airline had moved to double its size and become one of the industry's top-ten players. Growing its fleet would allow Turkish Airlines to fly to many more destinations, boost revenues, increase aircraft utilization, and achieve higher cost efficiency. But it would also increase the already intense competition with European giants like Lufthansa, Air France, British Airways, and the fast-growth Gulf airlines Emirates, Etihad, and Qatar Airways. Critical questions faced CEO Temel Kotil and his team: How would Turkish Airlines keep growing without jeopardizing profitability? How would it manage the operational complexities and other external factors? Recruit the best people? Continue to differentiate itself in a fiercely competitive industry?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716408-PDF-ENG

This (B) case takes up the story of the Afghan female entrepreneur Kamila Sidiqi between 2009 and 2015. The case opens with U.S. Secretary of State John Kerry praising her achievements at a State Department dinner in March 2015 for the newly elected President of Afghanistan, Ashraf Ghani. It describes the growth of her Kaweyan firm, which diversified into dried fruit processing and a cab service, against a background of some economic and social progress, but also continuing economic, social, and security challenges in the country. In October 2014 President Ghani asked Kamila to become Presidential Deputy Chief of Staff, a position that she accepted. The (B) case can be used in conjunction with the (A) case to explore the issue of whether entrepreneurship alone can significantly overcome the many challenges faced by post-conflict countries such as Afghanistan, or whether improvements in institutional frameworks are a pre-condition.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316070-PDF-ENG

This case discusses the digitalization strategies of a leading bank in Turkey, Akbank, and how to position its digital banking products going forward. The Turkish banking industry was undergoing a transformation prompted by the demands of the country's digitally savvy, young population, and by new regulations on consumer banking that threatened banks' profitability. Akbank had a legacy as the best financial services company in Turkey, but bank leadership knew it needed to innovate to maintain that reputation in the digital era. The bank's chairman, CEO, and EVP of digital banking unit were evaluating their options. Should they have a separate P&L for the digital banking unit? Should they create a separate brand for digital banking? How should they structure digital banking so Akbank would remain profitable while achieving the vision for innovation and growth laid out by the bank's chairman?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/515115-PDF-ENG

The UPower founders, Jake DeWitte and Caroline Cochran, were recent graduates from MIT's Nuclear Science and Engineering Department. They chose to attend Palo Alto–based Y Combinator's accelerator program to focus on building a "mini" nuclear reactor that would produce up to ten MWt and could fit in two 40-foot intermodal shipping containers. The UPower reactor was designed to serve the need for "off-grid" electric power. These off-grid customers were in remote locations such as mining operations, military bases, Arctic townships, or even island nations. While DeWitte and Cochran were ecstatic about the progress they had made and the enthusiastic open-mindedness of Bay Area investors to backing groundbreaking and even potentially contentious "big ideas," they wondered if their investors would have the patience to finance UPower over the long-term.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/816054-PDF-ENG

After 16 years in management consulting, Barış Karakullukçu left to become the CEO of Mudo in 2012, one of the best-known names in Turkey's retail industry. She was tasked with leading Mudo's transition from a family business to a more institutionalized, corporate structure and ensuring a smooth handover of the company from the first- to the second-generation owner. As CEO, she makes a series of difficult decisions to transform the company. She develops a new performance management system, reengineers most of the operations, and replaces 80% of the management team including several C-level executives. Two years later, the impact on operations is positive; however, the company's profitability continues to struggle. Karakullukçu must decide how best to move forward. While the founder seeks rapid and opportunistic growth, Karakullukçu believes that the company should stabilize its cost structure and limit expansion plans.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416015-PDF-ENG

When we think of human behavior, especially from a moral perspective, we often rely on explanations based on character. We think that good decisions and responsible behavior require people with integrity and strong character and that immoral behavior originates within people with little integrity and weak character. However, important research in recent decades strongly suggests that situational factors often dominate character in ethical decision making—for leaders and for members of their organizations. This note summarizes the recent research, shows its implications for the basic steps in ethical decision making, and provides a basis for in-depth discussion of the character-versus-situation question.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316078-PDF-ENG

On July 30, 2015, Procter & Gamble (P&G) announced headline double-digit earnings per share growth for the year ended June 30. A closer look at the numbers suggested a less healthy picture. Sales, volumes, and operating profits were down. Investors were not impressed; shareholders were becoming increasingly impatient with the results of Chairman and CEO A.G. Lafley's attempted turnaround. Five-year shareholder returns were well below those of the S&P 500 and the S&P 500 Consumer Staples index. After returning to the company in 2013 in the face of stalling growth, Lafley had announced that P&G would focus on 10 high-growth categories and divest 100 smaller brands in the portfolio. As of September 2015, Lafley had negotiated the sale of 93 brands. Shareholders were left wondering whether this would be enough. Two days before the results were published, P&G announced that 35-year P&G veteran David Taylor would become CEO on November 1, 2015. Lafley would remain Chairman. At the time, Taylor respectfully declined to be interviewed by the press. He had a lot to think about.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/715429-PDF-ENG