First Look

Abstract—This research examines how core consumers of selective brands react when non-core users obtain access to the brand. Contrary to the view that non-core users and downward brand extensions pose a threat to the brand, this work investigates the conditions under which these non-core users enhance rather than dilute the brand image. A distinction between two types of non-core users based on how they are perceived by current users of core products is introduced: "brand immigrants" who claim to be part of the in-group of core users of the brand and "brand tourists" who do not claim any membership status to the brand community. A series of studies shows that core consumers respond positively to non-core users when they are perceived as brand tourists. The brand tourism effect is mediated by core users' pride and moderated by brand patriotism and selectiveness of the brand.

Abstract—The value of many products and services rises or falls with the number of customers using them; the fewer fax machines in use, the less important it is to have one. These network effects influence consumer decisions and affect companies' ability to compete. Strategists have developed some well-known rules for navigating business environments with network effects. "Move first" is one, and "get big fast" is another. In a study of dozens of companies, however, the authors found that quite often the conventional wisdom was dead wrong. And when the rules failed, the reason was always the same: Companies trip up when they try to attract large volumes of customers without understanding (1) the strength of mutual attraction among various customer groups and (2) the extent of asymmetric attraction among them. Looking at examples such as TripAdvisor, Wikipedia, and the New York Times, the authors offer strategies for competing in markets with network effects. New entrants should focus on customer groups that they are uniquely positioned to serve or appeal to the most attractive customers in a market. Incumbents pursuing growth strategies in adjacent markets or new geographies should consider how similar the needs of new customers are to those of existing customers. Offering complements also allows incumbents to reach additional customer groups.

Publisher's link: http://hbr.org/2014/04/the-limits-of-scale/ar/1

Abstract—Managers often assume that improving customer satisfaction and financial performance go hand in hand. The reality, however, is much more complex.

Publisher's link: http://sloanreview.mit.edu/x/55314

Abstract—In cross-sectional studies, countries with greater income inequality typically exhibit less support for government-led redistribution and greater acceptance of wage inequality (e.g., United States versus Western Europe). If individual nations evolve along this pattern, a vicious cycle could form with reduced social concern amplifying primal increases in inequality due to forces like skill-biased technical change. Exploring movements around these long-term levels, however, this study finds mixed evidence regarding the vicious cycle hypothesis. On one hand, larger compensation differentials are accepted as inequality grows. This growth in differentials is of a smaller magnitude than the actual increase in inequality, but it is nonetheless positive and substantial in size. Weighing against this, growth in inequality is met with greater support for government-led redistribution to the poor. These patterns suggest that short-run inequality shocks can be reinforced in the labor market but do not result in weaker political preferences for redistribution.

Abstract—The author, a professor of negotiation at Harvard Business School, offers specific pieces of advice for job candidates: Don't underestimate the importance of likability. Help prospective employers understand why you deserve what you're requesting. Make it clear that they can get you. Understand the person across the table from you. Understand his or her constraints. Be prepared for tough questions. Focus on the questioner's intent, not on the question. Consider the whole deal. Negotiate multiple issues simultaneously, not serially. Don't negotiate just for the sake of negotiating (a pitfall for recent MBA graduates). Think through the timing of offers. Avoid, ignore, or downplay ultimatums. Remember that your interviewer isn't out to get you. Stay at the table and maintain a sense of perspective.

Publisher's link: http://hbr.org/2014/04/15-rules-for-negotiating-a-job-offer/ar/1

Abstract—A case study is presented on business ethics and bank management. The situation facing the president of a community bank established to operate as a green business and to consider ethical issues of bank loans when it is considering an application for a large commercial loan by a firearms industry company in its community is examined.

Publisher's link: https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=32094&i=32096&cs=80fcfaa8da53da1a3cdd0ea8f861eeed

Abstract—This paper investigates whether individual venture capitalists have repeatable investment skill and to what extent their skill is impacted by the VC firm where they work. We examine a unique dataset that tracks the performance of individual venture capitalists' investments across time and as they move between firms. We find evidence of skill and exit style differences even among venture partners investing at the same VC firm at the same time. Furthermore, our estimates suggest the partner's human capital is two to five times more important than the VC firm's organizational capital in explaining performance.

Abstract—While the Obama team deserves high marks for launching the interim talks, its approach doesn't sell the upside of a comprehensive deal persuasively enough to transform more Iranian skeptics into active supporters-a necessary condition for success if there is an acceptable deal at the next stage. To sway skeptics, I recommend a specific "campaign" to dramatize the value of a deal. Beyond wooing skeptics, a strategy to build a "winning coalition" behind a deal must thwart determined Iranian blockers who will act to prevent meaningful concessions. After six months of talks, there could easily be positive atmospherics but little real progress (as with the round that just ended on March 19, 2014). To avoid escalation, diplomats will likely plead for more time. Granting a six-month extension, an option already built into the current process, could easily become a pattern, turning some version of the interim deal into a de facto stopping point. Meanwhile, as Ali Salehi, head of Iran's nuclear agency, recently asserted, "The iceberg of sanctions is melting while our centrifuges are still working." To mitigate the risk of such "deal drift," the United States and its allies should set a realistic, hard deadline for reaching an acceptable but fairly narrow agreement (one denying Iran what Graham Allison calls an "exercisable nuclear option"). Credibility will be difficult since Iran has often ignored U.S. and allied "red lines." To boost its credibility-and to help win over its own domestic and allied skeptics-the administration should pre-negotiate a harsh new "contingent" sanctions package with Congress and work to ensure buy-in from U.S. allies. The contingent sanctions should avoid the many deal-killing provisions of the recently defeated Menendez-Kirk bill. But instead of signing the sanctions bill immediately, Obama should publicly and forcefully commit to signing it if there is no acceptable agreement by the end of a single six-month extension of the interim deal. While many worry that such contingent sanctions would sour the atmosphere and damage the prospects for the talks, much experience suggests that skillful negotiators can effectively manage both incentives and penalties.

Publisher's link: http://www.foreignpolicy.com/articles/2014/03/24/like_a_boss_nuclear_talks_iran