First Look

Abstract—Some negotiations are easy. Others are more difficult. And then there are situations that seem completely hopeless. Conflict is escalating, people are getting aggressive, and no one is willing to back down. And, to top it off, you have little power or other resources to work with. This book shows how to defuse even the most potentially explosive situations and to find success when things seem impossible. In Negotiating the Impossible, I draw out scores of actionable lessons using behind-the-scenes stories of fascinating real-life negotiations, including drafting the U.S. Constitution, resolving the Cuban Missile Crisis, ending bitter disputes in the NFL and NHL, and beating the odds in complex business situations. I also show how these same principles and tactics can be applied in everyday life, whether you are making corporate deals, negotiating job offers, resolving business disputes, tackling obstacles in personal relationships, or even negotiating with children.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50562

Abstract—This paper investigates the social context of entrepreneurship in organizational sectors. Prior research suggests that firm foundings are driven by collective patterns of activity—that is, by patterns of prior foundings—including support from related markets as well as institutional activism in a given sector. Building on research of social salience and signals, we consider the influence of singular sector-level triggers, which we call entrepreneurial beacons. We argue that the actions or outcomes of salient organizations attract and motivate entrepreneurs, thus increasing the rate of foundings. To test this logic, we examine the impact of the Yale University endowment’s investment choices and of venture-capital-backed IPO run-ups on venture-capital foundings between 1984 and 2011. The results pinpoint the aspects of the social environment that most heavily influence entrepreneurial activity and the dynamics of organizational sectors.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50453

Abstract—Companies typically spend more on hiring in sales than they do anywhere else in the firm. Average annual turnover in sales is 25% to 30%, while direct replacement costs for a telesales employee ranges from $75,000 to $90,000 and other sales positions cost as much as $300,000. Moreover, these figures do not reflect the lost sales while a replacement is found and trained. This article discusses four places to focus in order to improve this crucial dimension of talent acquisition.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50539

Abstract—When formulating a strategy, markets and segments are typically important categories. But only customers buy. Hence, for most firms, de facto strategy and much resource allocation are the aggregate result of the deals their salespeople close. However, few firms clarify their deal selection criteria, and most sales compensation plans (about 70%, according to surveys) incentivize volume independent of the type of sale or cost-to-serve different customers. This is ineffective deal management and, to avoid this, some firms establish a Strategic Deal Profile. This article focuses on an example that illustrates what a Strategic Deal Profile is, why it is important, and the issues involved in making such a Profile part of actual selling behaviors and performance management practices.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50540

Abstract—Partnerships that foster the translation of scientific advances emerging from academic research organizations into commercialized products at private firms are a policy tool that has attracted increased interest. This paper examines empirical data from the Danish National Advanced Technology Foundation, an agency that funds partnerships between universities and private companies. We assess the effect on participating firms' innovative performance, comparing patent count, publication count, and proportion of cross-institutional publications between funded and unfunded firms. Specifically, we measure the impact on each of these variables based on three dimensions—small- and medium-sized enterprises (SME), younger firms, and size of the collaboration firms participated in—to establish boundary conditions. Our results suggest that receiving funding affects firms' innovative behavior differently depending on the type of firm, where (1) peer-reviewed publications increased significantly more for SMEs and larger projects, (2) granted patents increased significantly up to four years after funding for young firms and those in larger projects, and (3) proportion of cross-institutional publications increased significantly more three years after funding for all three sample specifications.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50093

Abstract—This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those facing high tax rates. Evidence from the worldwide operations of U.S. multinational firms indicates that affiliates in low-tax jurisdictions use trade credit to lend, whereas those in high-tax jurisdictions use trade credit to borrow: 10% lower local tax rates are associated with net trade credit positions that are 1.4% higher as a fraction of sales. The use of trade credit to get capital out of low-tax, low-return environments is also illustrated by reactions of U.S. firms to the temporary repatriation tax holiday in 2005, when affiliates with positive net trade credit positions were significantly more likely than others to repatriate dividends to parent companies in the United States.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50554

Abstract—Why did productivity rise during recent recessions? One possibility is that average worker quality increased. A second is that each incumbent worker produced more. The second effect is termed "making do with less." Using data from 2006 to 2010 on individual worker productivity from a large firm, these effects can be measured and separated. For this firm, most of the gain in productivity during the recession was a result of increased effort. Additionally, the increase in effort is correlated with the increase in the local unemployment rate, presumably reflecting the costs of losing a job.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49805

Abstract—We examine a dynamic decision-making process involving unrelated issues in which a decision may be endogenously delayed by the allocation of influence resources. Delay is strategically interesting when decision makers with asymmetric preferences face multiple issues and have limited resources to influence outcomes. A delayed decision becomes part of the subsequent agenda, thereby altering resource allocation. The opportunity to delay decisions leads the players to act against their short-run interests by changing the expected decision delay. We characterize delay equilibria and explore how delay affects agenda preferences and, when possible, bargaining.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=39907

Abstract—A good match between an organization's design ("what we do") and its identity ("who we are") is often seen as a key to strong performance. But maintaining a tight fit between design and identity is difficult when a profound external shock forces an organization to change both. How do design and identity change together? Prior research says little on this question because it has tended to study design change and identity change separately. This paper links the two by examining how the United States' Federal Bureau of Investigation (FBI) transformed itself after the 9/11 terrorist attacks. Drawing on 138 interviews within the FBI and archival analysis of Congressional testimonies from 2001 to 2013, we trace how top management shifted the design and identity of the FBI from those of a law enforcement agency to those of a national security organization. Our examination reveals multiple ways in which design change and identity change interacted. We find instances in which urgent focus on design change consumed top management attention and crowded out identity change; in which experimentation in design made it premature to develop a new identity; and in which identity changed in order to support the design that emerged from experimentation. Interpretation of such observations leads us to new propositions about the interplay of design and identity in times of radical change. Overall, the propositions suggest that after a dramatic shock, efforts to ascertain and implement changes in "what we do" will often delay efforts to change "who we are."

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50565

Abstract—Contemporary discussions of urbanization and urban construction in China tend to focus on “ghost towns” on the one hand or urbanization as China’s silver bullet to growth and reform on the other. In this paper, we detail what China calls its “New Urbanization Policy.” While these plans aim to formalize previously informal movements of land, people, and capital between urban and rural, the new urbanization does not upend China’s longstanding duality between those categories. The central goals of the new urbanization are to manage urbanization so as to generate domestic demand and reorganize agricultural production without experiencing destabilizing social and political pressures. If successful, the CCP will forge a new path of urbanization, building cities before recruiting urban citizens. The process, however, entails possibilities of yet other social dislocations, including concentrated poverty, ill-planned cities, skyscraper villages, and rural landlessness.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50542

Paez, an Argentine start-up fashion brand, sold traditional alpargatas, a sleepy shoe category that suddenly woke up when U.S. company TOMS borrowed the traditional alpargata design, covered it with fashionable colors and prints, and tied it to a social cause. Paez's founders were keenly aware of the present and future challenges they faced due to the resources and capabilities of their well-capitalized and marketing-savvy competitor. How could a small brand compete against a company that had captured the hearts and minds of consumers? Which brand-positioning concept should Paez choose to best capture consumers' attention and interest and compete against TOMS? How would the choice of positioning affect the rollout of Paez' distribution strategy and its product line strategy?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316085-PDF-ENG

In late 2013 and early 2014, Netflix service over the major U.S. Internet Service Providers (ISPs) suffered major slowdowns. What were the causes of these problems? What could Netflix do to solve them?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/616007-PDF-ENG

After years of ups and downs, Germany won its fourth World Cup Championship in 2014. This case examines the national team's recent history and the changes they made to set themselves up for success.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416025-PDF-ENG

n 2015, the Chairman and CEO of Verizon Communications reflects on his four years leading the company and considers strategic repositioning for the future. Meanwhile, a rising leader within the organization, Marni Walden, leads change with a new, company-wide product development organization. Walden's group holds promise but must overcome cultural, structural, and technical barriers to innovate in a giant telecom. In the midst of change, executives debate the wisdom of Verizon's push into developing products and services that leverage its dominance in connectivity. Should Verizon go "above the network"?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/315068-PDF-ENG

Since its IPO in 2007 and following the global financial crisis, Blackstone largely outpaced its alternative investment firm peers in assets under management, new business launches, profitability, and market capitalization. Under the leadership of Stephen A. Schwarzman, chairman and CEO, and president and COO Hamilton ("Tony") James, Blackstone's growth was derived from substantial horizontal expansion into new alternative asset products and services, both organically and through acquisition. These included businesses in private equity, real estate, funds of hedge funds, alternative credit, opportunistic transactions ("Tactical Opportunities"), and secondaries investments. The firm has also innovated in sourcing capital from a variety of limited partners. Blackstone's culture of centralized investment processes and risk management coupled with entrepreneurial leadership contributed to its growth in important ways, but the firm faces important external and internal challenges as it seeks to continue its growth.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/816013-PDF-ENG

In 2014, the Allergan Inc. board of directors received a surprise takeover offer from Valeant Pharmaceuticals in alliance with hedge fund activist Bill Ackman's Pershing Square Capital Management. In the unprecedented arrangement between an acquirer and a hedge fund activist, Pershing Square had quietly amassed a 9.7% stake in Allergan prior to the Valeant bid, making Pershing Square Allergan's largest shareholder. The case presents students with many of the decisions Allergan's directors faced amid challenges to Allergan's governance, management, and business model. In particular, the Allergan board must decide whether to pursue a $10 billion acquisition of Salix Pharmaceuticals while under threat of a proxy contest and a special shareholder meeting to vote on replacing Allergan's directors with a slate more favorable to the Valeant merger. The proposed Salix acquisition would give Allergan a new therapeutic market but would also make Allergan too big for Valeant to acquire.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316010-PDF-ENG

Supplements the (A) case.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316029-PDF-ENG

Clearwater sought to market value-added shellfish products in a traditionally commodities-based industry, while facing supply uncertainties and regulatory, environmental, and foreign exchange challenges. Clearwater harvested lobsters, clams, scallops, shrimp, and other marine creatures from the Canadian Atlantic and sold the seafood all over the world. Although seafood buyers traditionally bought on price, Clearwater's innovations and technology investments enabled it to produce higher quality products; still, it faced the challenge of convincing buyers to pay a premium price. The firm's managers also prided themselves on their sustainable fishing practices, which were not the historical norm for the industry; here, again, translating these practices into increased willingness to pay was a challenge. As background, the case also discusses the challenges of fishery management at the national and international levels, using the collapse of the cod fishing industry as an example, and discussing the economics and politics of the fishery in classical terms of externalities and public goods.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716023-PDF-ENG

An HBS student is asked to misrepresent himself during the course of his summer internship by his employer in order to obtain data from industry competitors.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316128-PDF-ENG

Supplements the (A) case, describing how the student handled the situation and what he learned about himself from it.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316129-PDF-ENG