First Look

April 20, 2010

Sit up straight. Don't cross your arms when I'm talking to you. Look me in the eye. It turns out our mothers were right when they told us to quit slouching. Open, expansive body language, as opposed to slumped shoulders and downcast eyes, not only projects more self-confidence and an upbeat mood; it creates them, too. A forthcoming article in Psychological Science coauthored by HBS professor Amy J.C. Cuddy tells how experiments using a near-equal number of male and female participants indicate that hormones controlling feelings of power are activated after just a few minutes of good posture. "By simply changing one's physical posture, an individual prepares his or her mental and physiological systems to endure difficult and stressful situations, and perhaps to actually improve confidence and performance in such situations—such as interviewing for jobs, public speaking, disagreeing with a boss, or taking potentially profitable risks," Cuddy et al. write in "Power Posing: Brief Nonverbal Displays Affect Neuroendocrine Levels and Risk Tolerance." Sounds like an idea to embrace. Other faculty research this week: "Pension Fund Design in Developing Economies" [PDF] by Luis M. Viceira looks at ways to improve the design and effectiveness of defined contribution plans. And Andrei Hagiu's case study "The Last DVD Format War?" focuses on strategic decision-making in the standards battle between HD DVD and Blu-ray optical disc formats.
— Martha Lagace

Working Papers

Commodity Chains: What Can We Learn from a Business History of the Rubber Chain? (1870-1910)


The literature on the rubber boom applied a dependendist view of rubber production in the Brazilian Amazon. Even though a sizable surplus was generated in the rubber chain, it was mostly appropriated by foreigners. This view is in tune with the global commodity chain approach that argues that manufacturing/core economies absorb the bulk of surplus generated in the commodity chain. This paper challenges both frameworks and asks for a more careful examination of the business history of commodity chains: it is a first step in this direction through an analysis of the relationship between two nodes of the rubber chain.

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Beauty Imagined: A History of the Global Beauty Industry


The global beauty business permeates our lives, influencing how we perceive ourselves and what it is to be beautiful. The brands and firms that have shaped this industry, such as Avon, Coty, Estée Lauder, L'Oreal, and Shiseido, have imagined beauty for us. This book provides the first authoritative history of the global beauty industry from its emergence in the nineteenth century to the present day, exploring how today's global giants grew. It shows how successive generations of entrepreneurs built brands that shaped perceptions of beauty and the business organizations needed to market them. They democratized access to beauty products, once the privilege of elites, but they also defined the gender and ethnic borders of beauty, and its association with a handful of cities, notably Paris and later New York. The result was a homogenization of beauty ideals throughout the world. Today globalization is changing the beauty industry again; its impact can be seen in a range of competing strategies. Global brands have swept into China, Russia, and India, but at the same time, these brands are having to respond to a far greater diversity of cultures and lifestyles as new markets are opened up worldwide. In the twenty-first century, beauty is again being reimagined anew.

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Power Posing: Brief Nonverbal Displays Affect Neuroendocrine Levels and Risk Tolerance


Humans and other animals express power through open, expansive postures and powerlessness through closed, constrictive postures. But can these postures actually cause power? As predicted, results revealed that posing in high-power (vs. low-power) nonverbal displays caused neuroendocrine and behavioral changes for both male and female participants: high-power posers experienced elevations in testosterone, decreases in cortisol, and increased feelings of power and tolerance for risk; low-power posers exhibited the opposite pattern. In short, posing in powerful displays caused advantaged and adaptive psychological, physiological, and behavioral changes—findings that suggest that embodiment extends beyond mere thinking and feeling to physiology and subsequent behavioral choices. That a person can, via a simple two-minute pose, embody power and instantly become more powerful has real-world, actionable implications.

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Telegraphs—Shrinking Economic Distances? A Preliminary Enquiry, 1870s-1912


This is a very preliminary report on sources and data for my research on telegraphs. Telegraphs are usually analyzed in the context of railway expansion, and the literature has somewhat neglected the role of telegraphic communication for the development of steamship navigation. Telegraphs meant that the owners of a cargo ship could communicate with its captain whenever it reached a certain port, and shippers could keep track of their shipments. Since steamships were very costly to build and operate, cable communication would then allow profitability as ships could be continuously transporting full loads of cargo. Without a cable connection in the port, it would have been difficult for ship owners to maximize their profitability and hence fewer steamships would have touched that port. It is possible then that telegraphic communication was at the heart of diminishing transport costs across the Atlantic. Despite the alleged importance of telegraphs, there are very few works published on their economic history.

(When) Are Religious People Nicer? Religious Salience and the 'Sunday Effect' on Pro-social Behavior


Prior research has found mixed evidence for the long-theorized link between religiosity and pro-social behavior. To help overcome this divergence, we hypothesize that pro-social behavior is linked not to religiosity per se, but rather to the salience of religion and religious norms. We report on a field experiment that examines when auction participants will respond to an appeal to continue bidding for secular charitable causes. The results reveal that religious individuals are more likely than non-religious individuals to respond to an appeal for charity only on days that they visit their place of worship; on other days of the week, religiosity has no effect. Notably, the result persists after controlling for a host of factors that may influence bidding, but disappears when the appeal for charity is replaced by an appeal to bid for other reasons. Implications for the link between religion and pro-social behavior are discussed.

The Evolution of Science-Based Business: Innovating How We Innovate


Science has long been connected to innovation and to business. As early as the late 19th century, chemical companies, realizing the commercial potential of science, created the first industrial research laboratories. During much of the 20th century, large-scale business enterprises like DuPont, GE, Westinghouse, IBM, Kodak, Xerox (PARC), and AT&T (Bell Laboratories) created in-house labs capable of first-rate basic scientific research. In recent decades, however, the connection between science and business has begun to change in important ways. While the corporate lab declined, new "science-based businesses" in sectors like biotech, nanotech, and energy emerged. Universities also became active players in the commercialization of science. In short, science has become a business. This essay examines the institutional and organizational challenges created by this convergence of science and business through a Chandlerian lens. It highlights three fundamental challenges of science-based businesses: 1) managing and rewarding long-term risk, 2) integrating across technical disciplines, and 3) learning. Whereas these challenges were once managed inside the boundaries of corporate R&D labs—under the auspices of Chandler's visible hand—today the invisible hand of markets increasingly governs them. An assessment of this form of governance against the requirements of science-based businesses suggests a gap and a need for organizational innovation.

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Pension Fund Design in Developing Economies

An abstract is unavailable at this time.

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Toyota Was in Denial. How About You?

An abstract is unavailable at this time.

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Cases & Course Materials

Foxwoods: Turning Data into Insights in the Hospitality Industry

Lynda M. Applegate and Deborah Soule
Harvard Business School Case 810-083

This case describes how an IT director identified an opportunity and implemented an innovative business solution designed to enable line managers and executives to convert data to information to insights. The case also details how the company partnered with an emerging technology start-up, Netezza.

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Leading Change at Simmons (E)

Amy C. Edmondson and Susan Thyne
Harvard Business School Supplement 610-061

This case updates the "Leading Change at Simmons" series by examining Simmons' increasing debt under the ownership of Thomas H. Lee, a private equity firm. Charlie Eitel, the former CEO, wonders what the company's, and his, legacy will be after declaring bankruptcy despite a cultural turnaround and successful operations.

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The Last DVD Format War?

Andrei Hagiu
Harvard Business School Case 710-443

Provides a brief overview of the standards battle between HD-DVD and Blu-ray, focusing on the events that precipitated the Blu-ray victory in early 2008.

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Hospital for Special Surgery (C): Continuing Challenges of Growth

Regina E. Herzlinger
Harvard Business School Supplement 310-077

After its successful new U.K. venture, the Hospital for Special Surgery wants to do more of the same, without decimating its core New York City facility. The case provides considerable details about the different options it is exploring.

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Local Motors: Designed by the Crowd, Built by the Customer

Michael I. Norton and Jeremy B. Dann
Harvard Business School Case 510-062

In the wake of the meltdown among U.S. auto manufacturers in 2009, Jay Rogers, CEO of Local Motors, has a new approach for the automotive industry: decide which models are produced through online design competitions, and then allow customers to "build their own cars" from the winning designs. The case focuses on two key issues: Can Local Motors build a thriving online design community at a reasonable cost? And can customers be convinced to add their own sweat and labor to the manufacturing process? The case is written from the perspective of a start-up company seeking funding while trying to implement a novel business concept.

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