First Look

Abstract— We study compatibility decisions of two competing platform owners that generate profits through both hardware sales and royalties from content sales. We consider a game-theoretic model in which two platforms offer different standalone utilities to users. We find that incentives to establish one-way compatibility—the platform owner with smaller standalone value grants access to its proprietary content application to users of the competing platform—can arise from the difference in their profit foci. As the difference in the standalone utilities increases, royalties from content sales become less important to the platform owner with greater standalone value but more important to the other platform owner. One-way compatibility can thus increase asymmetry between the platform owners’ profit foci and, given a sufficiently large difference in the standalone utilities, yields greater profits for both platform owners. We further show that social welfare is greater under one-way compatibility than under incompatibility. We also investigate how factors such as exclusive content and hardware-only adopters affect compatibility incentives.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55682

Abstract— It’s notoriously difficult for a business to manage two separate-but-equal goals—making money and creating social value at the same time, for example, or managing an existing business at the same time that you invent a new one. Most attempts at managing these ”strategic paradoxes” fail because they’re not managed carefully and consistently. (It’s easy to write a great purpose statement or to dream up a new business model but way more difficult to follow through when it’s time to make actual tradeoffs between the goals.) Three organizational mechanisms can help: guardrails that protect the weaker of the two goals, dynamic decision-making that treats high-level goals as sacrosanct but tactical decisions as provisional, and leaders dedicated to “both/and” thinking.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55749

Abstract— We investigate the link between hospital performance and managerial education by collecting a large database of management practices and skills in hospitals across nine countries. We find that hospitals that are closer to universities offering both medical education and business education have higher management quality, more MBA-trained managers, and lower mortality rates. This is true compared to the distance to universities that offer only business or medical education (or neither). We argue that supplying joint MBA-healthcare courses may be a channel through which universities increase medical business skills and raise clinical performance.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55694

Abstract— Foreign banks’ lending to firms in emerging market economies (EMEs) is large and denominated predominantly in U.S. dollars. This creates a direct connection between U.S. monetary policy and EME credit cycles. We estimate that over a typical U.S. monetary easing cycle, EME borrowers experience a 32-percentage-point greater increase in the volume of loans issued by foreign banks than do borrowers from developed markets, with a similarly large effect upon reversal of the U.S. monetary policy stance. This result is robust across different geographic regions and industries and holds for U.S. and non-U.S. lenders, including those with little direct exposure to the U.S. economy. Local EME lenders do not offset the foreign bank capital flows; thus, U.S. monetary policy affects credit conditions for EME firms. We show that the spillover is stronger in higher-yielding and more financially open markets and for firms with a higher reliance on foreign bank credit.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55650

Abstract— A common complaint from C-level executives about their sales colleagues concerns the latter’s ability to manage, not sell. Nearly every firm has examples of successful salespeople who are poor managers because they persist in their behaviors as reps rather than managers. This article discusses why this is common, the problems with standard advice about how to address this issue, what it now takes to be an effective sales manager, and external market factors that are making this a bigger, more visible issue in more firms with implications for building and sustaining a sales career.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55738

Abstract— We develop three novel measures of how much of the price impact of their trading different mutual funds internalize. We show that mutual funds that internalize more of their price impact hold larger cash buffers and use these buffers more aggressively to accommodate inflows and outflows. As a result, stocks held by these funds have lower volatility, and flows out of these funds have smaller spillover effects on other funds holding the same securities. Our results provide evidence of meaningful fire sale externalities in the mutual fund industry.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55668

Abstract— Existing application performance management (APM) solutions lack robust anomaly detection capabilities and root cause analysis techniques that do not require manual efforts and domain knowledge. In this paper, we develop a density-based unsupervised machine learning model to detect anomalies within an enterprise application, based upon data from multiple APM systems. The research was conducted in collaboration with a European automotive company, using two months of live application data. We show that our model detects abnormal system behavior more reliably than a commonly used outlier detection technique and provides information for detecting root causes.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55759

Abstract— There is an increasing pressure to give more wisely and effectively. There is, relatedly, an increasing focus on charity performance metrics. Via a series of experiments, this paper provides a caution to such a focus. While information on charity performance metrics may facilitate more effective giving, it may also facilitate the development of excuses not to give. Managers of nonprofit organizations should carefully assess this tension when determining if and how to provide information on their performance metrics.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55523

Abstract— Women's reluctance to negotiate is often used to explain the gender wage gap, popularizing the push for women to “lean-in" and negotiate more. Examining an environment where women achieve positive profits when they choose to negotiate, we find that increased negotiations are not helpful. Women know when to ask: they enter negotiations resulting in positive profits and avoid negotiations resulting in negative profits. While the findings are similar for men, we find no evidence that men are more adept than women at knowing when to ask. Thus, our results caution against a greater push for women to negotiate.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55522

Abstract— For too long, the worlds of business and health have been mired in a checkered, sometimes contentious, history. Millions of deaths worldwide can be attributed to risk factors including tobacco use, alcohol and drug misuse, and suboptimal dietary intake linked to commercial products. Media (including social media) coverage about the safety and cost of many consumer goods, both medical (drugs, devices) and nonmedical, reflect profound public concerns. Longstanding societal scrutiny about the role of business in environmental pollution has only increased in the era of global warming.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55660

Abstract— On December 13, 2018, UK Prime Minister Theresa May met with her European counterparts in an attempt to renegotiate the “Brexit deal” she had reached with them only weeks earlier; the deal was facing harsh criticism and almost certain rejection at home. Perhaps only the keenest students of history could have noticed that when she landed in Brussels, it was precisely 100 years—to the day—after another world leader, U.S. President Woodrow Wilson, had visited the continent in the hopes of saving it. Both the parallels and the perpendicularities between the negotiation sagas of Theresa May and Woodrow Wilson are stunning. As May tries to negotiate the Brexit endgame, she might well consider three lessons from Wilson’s futile diplomacy during his last year in office.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55708

Abstract— Regulators have long been aware that differential access to information can undermine the efficiency and fairness of financial markets. In an effort to place investors on equal footing, the Securities and Exchange Commission in 2000 created Regulation Fair Disclosure (Reg FD), which prohibits public firms from disclosing material information to certain parties but not others. Nevertheless, managers have continued to meet privately with select investors, possibly sharing information in violation of Reg FD. A key weakness of Reg FD is that its definition of materiality remains unclear. Using a series of vignettes based on actual private investor meetings, I investigate how managers and regulators understand Reg FD. I find considerable uncertainty and disagreement among both managers and regulators as to what kind of information may be lawfully communicated. Many managers interpret Reg FD subjectively, often relying on individual industry norms to decide where to draw the line. Ultimately, the ambiguity of Reg FD leads to considerable variation in the information managers privately provide to investors, undermining the notion of a level playing field in financial markets.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55747

Abstract— No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=55659

Abstract— Using detailed information on Institutional Shareholder Services (ISS) assessments of firms’ compensation practices, we examine whether these assessments identify poor compensation practices as measured by subsequent performance. While prior research provides consistent evidence of an association between shareholder voting outcomes and ISS recommendations, the evidence is mixed over whether their recommendations convey information about poor compensation policies. We find that ISS “Against” recommendations are associated with worse future accounting performance, consistent with ISS being able to detect suboptimal compensation packages. However, workload compression has an effect, as we find that the relation between assessments and future performance is stronger during off-season (for firms with non-December fiscal year end).

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=55666

The purpose of this technical note is to explain the BGIE Twenty, an “idea-kit” that serves as the intellectual backbone of the BGIE course. Each year, the BGIE professors decide on the twenty ideas that we believe are the most important for students to study in pursuit of the course’s objective. As scholars of economics, history, and political science, we bring an interdisciplinary approach to constructing and revising the BGIE Twenty, and we intend for it to have pedagogical and intellectual impact beyond our classrooms. The ideas in the BGIE Twenty provide starting points for analysis, not simple answers, and the BGIE Twenty is a living list that responds to changes in the world and our understanding of it. Each element of the BGIE Twenty is highlighted during at least one case discussion, and suggested supplemental readings (plus separate technical notes for all elements) are provided to facilitate deeper study by interested students. Thus, when students complete the BGIE course, they have engaged with a curated selection of ideas that their faculty have found most valuable in analyzing how the world works.

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This note explores three specific ways an analyst can use visualization. Section 1 considers visualization to explore data. Section 2 discusses visualization as a tool for developing a deeper understanding of trends and phenomena encoded in the data. Section 3 discusses the role visualization plays in communicating insights and compelling individuals to action. Here we argue that the most effective visualizations meet three criteria: they are (1) clear, (2) complete, and (3) information rich. Finally, Section 4 provides graphical guidelines for making effective visualization.

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No abstract available.

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No abstract available.

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The Bundesliga, Germany’s premier football (soccer) league, is assessing its global broadcast and marketing strategy, with special focus on the very lucrative but highly competitive U.S. market. Its CEO Christian Seifert believed that a strong international position was vital to continued success in the global sports and entertainment market. Competition in the U.S. consists of other international leagues, especially the English Premier League (all of whose matches are on NBC platforms) as well as the major U.S. professional sports and college sports. Bundesliga’s CEO believed its globally known clubs (especially Bayern Munich), the success of German national teams in past World Cups, and the league’s capabilities as a diversified media company represented attractive elements for its prospective expanded U.S. broadcast presence. The case includes descriptions of the Bundesliga, its national and international broadcasting contracts, its development into an integrated full-service media company, the U.S. sports market and the presence of international football on U.S. TV, and the approaches of other leagues. The principal case focus is the strategy to “win the marketplace of U.S. sports broadcasters and consumers.” Numerous exhibits provide detailed information on revenues, broadcast markets, and the U.S. sports environment, as well as Bundesliga’s structure, broad vision, and value chain elements.

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No abstract available.

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In 2017, Sarah Powers, VP of Sales at an automation hardware firm, is trying to understand why some members of her sales team have been underperforming. She is tasked with analyzing her firm’s email and calendar data to try to find relationships between communications and sales performance.

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