First Look

Abstract—For nearly three decades, English has been the lingua franca of cross-border organizations, yet studies on corporate language strategies and their importance for globalization have been scarce. In The Language of Global Success, Tsedal Neeley provides an in-depth look at a single organization—the high-tech giant Rakuten—in the five years following its English lingua franca mandate. Neeley’s behind-the-scenes portrayal explores how language shapes the ways in which employees who work in global organizations communicate and negotiate linguistic and cultural differences. Bringing together 650 interviews conducted across Rakuten’s locations in Brazil, France, Germany, Indonesia, Japan, Taiwan, Thailand, and the United States, Neeley argues that an organization’s lingua franca is the catalyst by which all employees become some kind of “expat”(someone detached from their mother tongue or home culture). Through her unfettered access to the inner workings of Rakuten, she reveals three distinct social groups: “linguistic expats” who live in their home country yet have to give up their native language in the workplace; “cultural expats” or native speakers of the lingua franca who struggle with organizational values that are more easily transmitted after language barriers are removed; and finally “linguistic-cultural expats” who, while neither native to the lingua franca nor the organization’s home culture, surprisingly have the easiest time adjusting to language changes. Neeley demonstrates that language can serve as the conduit for an unfamiliar culture, often in unexpected ways, and that there are lessons to be learned for all global companies as they confront language and culture challenges. Examining the strategic use of language by one international corporation, The Language of Global Success uncovers how all organizations might integrate language effectively to tap into the promise of globalization.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52266

Abstract—This article discusses the results of a survey of senior executives, middle managers, and sales people from companies across a variety of industries. The survey focused on questions about how well their companies’ strategies informed six critical elements of their sales approaches. The results indicate a big gap between the perceptions of executives and sales people. The article discusses reasons for that gap, the implications, and an example of what one leadership team did to link better its business strategy with sales investments and behaviors.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52282

Abstract—A systematic approach to counseling—using appropriate framing techniques derived from principles studied by negotiation scholars—can be taught to physicians in a one-hour lecture. We found evidence that even this minimal intervention can decrease overtreatment of patients with low-risk prostate cancer. Our novel approach offers a framework to help address cancer screening–related overtreatment that occurs across medicine.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52286

Abstract—Emerging markets are characterized by underdeveloped institutions and frequent environmental shifts. Yet they also contain many firms that have survived over generations. How are firms in weak institutional environments able to persist over time? Motivated by 69 interviews with leaders of emerging market firms with histories spanning generations, we combine induction and deduction to propose reputation as a meta-resource that allows firms to activate their conventional resources. We conceptualize reputation as consisting of prominence, perceived quality, and resilience and develop a process model that illustrates the mechanisms that allow reputation to facilitate survival in ways that persist over time. Building on research in strategy and business history, we thus shed light on an underappreciated strategic construct (reputation) in an under-theorized setting (emerging markets) over an unusual period (the historical long run).

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52277

Abstract—Previous studies have documented wide variation in health-care spending and prices; however, the causes for the variation in supply purchase prices across providers are not well understood. The purpose of this study was to determine the drivers of variation in prosthetic implant purchase prices for primary total knee and hip arthroplasties across providers.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52299

Abstract—Competition for resources, recognition, and favorable outcomes are all facts of life in professional settings. When one falls short in comparison to colleagues or subordinates, feelings of envy may arise. Fueled by inferiority, hostility, and resentment, envy is both ubiquitous and painful. Will employees "level up" with their envied counterpart through self-improvement behaviors? Or will they "level down" through sabotage and undermine their peers and subordinates in the process? Envy at Work and in Organizations aims to determine the direction workplace envy takes. Contributors are drawn from many countries and from an extraordinary range of disciplines to share their insight: experimental social psychologists offer insights from lab studies, psychoanalytical scholars emphasize unconscious processes, organizational psychologists describe groundbreaking research from disparate work settings, and cross-cultural psychologists reveal the variety of ways that envy can emerge as a function of cultures as wide-ranging as the Japanese school system to the fascinating structure of the Israeli kibbutzim. Work and insight from behavioral economists and organizational consultants is also included.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52264

Abstract—This paper examines cultural sponsorship from a partnership perspective. It studies the collaboration between two international institutions, a bank and a museum, and their value co-creation with customers and audiences. This in-depth case study of a sponsorship collaboration between a global financial institution (UBS) and a multi-site museum (Guggenheim) evaluates critical aspects of resource integration between the partners with implications for the theory and practice of service innovation. For the bank, the partnership with a major art institution gives access to cultural, symbolic, and social resources that can add value to and differentiate its services. For the museum, the partnership supports its international expansion in terms of audiences and acquisitions of art from regions of the world previously underrepresented in its collection. The partnership also helps to expand the network of museum partners and potential donors. The study contributes to the understanding of co-marketing partnerships between commercial actors and arts organizations and explores critical elements of resource integration in terms of complementary resource mobilization and internal integration.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52260

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52291

Abstract—Platform, open/user innovation, and ecosystem strategies embrace and enable interactions with external entities. Firms pursuing these approaches change how they conduct business and interact with their environments. This paper considers these three strategies together highlighting similarities and differences between platform, open/user innovation, and ecosystem strategies. We focus on managerial and organizational challenges as organizations transition to these strategies and identify four institutional logic shifts: 1) increasing external focus, 2) moving to greater openness, 3) focusing on enabling interactions, and 4) adopting interaction-centric metrics. As mature incumbent organizations transition to these strategies, there may be tensions and multiple conflicting institutional logics. Additionally, we consider four strategic leadership topics and how they relate to transitions to platform, open/user innovation, and ecosystem strategies: 1) executive orientation and experience, 2) top management teams, 3) board-management relations, and 4) executive compensation. We discuss theoretical implications and consider future directions and research opportunities.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52312

Abstract—We develop a theoretical model of, and provide the first large-sample evidence on, the behavior and impact of non-practicing entities (NPEs) in the intellectual property space. Our model shows that NPE litigation can reduce infringement and support small inventors. However, the model also shows that as NPEs become effective at bringing frivolous lawsuits, the resulting defense costs inefficiently crowd out firms that, absent NPEs, would produce welfare-enhancing innovations without engaging in infringement. Our empirical analysis shows that on average, NPEs appear to behave as opportunistic “patent trolls." NPEs sue cash-rich firms—and target cash in business segments unrelated to alleged infringement at essentially the same frequency as they target cash in segments related to alleged infringement. By contrast, cash is neither a key driver of intellectual property lawsuits by practicing entities (e.g., IBM and Intel), nor of any other type of litigation against firms. We find further suggestive evidence of NPE opportunism: forum shopping, the targeting of firms that have reduced ability to defend themselves, and repeated assertions of low-quality patents. We find moreover that NPE litigation has a real negative impact on innovation at targeted firms: firms substantially reduce their innovative activity after settling with NPEs (or losing to them in court). Meanwhile, we neither find any markers of significant NPE pass-through to end innovators, nor of a positive impact of NPEs on innovation in the industries in which they are most prevalent.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=47648

Abstract—Small business owners and others who are self-employed have the option to transition to paid work. If there is initial uncertainty about entrepreneurial earnings, this option increases the expected lifetime value of self-employment relative to pay in a single year. This paper first documents that moves between paid work and self-employment are common and consistent with experimentation to learn about earnings. This pattern motivates estimating the expected returns to entrepreneurship within a dynamic lifecycle model that allows for non-random selection and gradual learning regarding the entrepreneurial earnings process. The model accurately fits entry patterns into self-employment by age. The option value of returning to paid work is found to constitute a substantial portion of the monetary value of entrepreneurship. The model is then used to evaluate policies that change incentives for entry into self-employment.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51676

Abstract—During the period 2005–2014, S&P 500 firms distributed to shareholders more than $3.95 trillion via stock buybacks and $2.45 trillion via dividends—$6.4 trillion in total. These shareholder payouts amounted to over 93% of the firms' net income. Academics, corporate lawyers, asset managers, and politicians point to such shareholder-payout figures as compelling evidence that “short-termism" and “quarterly capitalism" are impairing firms' ability to invest, innovate, and provide good wages. We explain why S&P 500 shareholder-payout figures provide a misleadingly incomplete picture of corporate capital flows and the financial capacity of U.S. public firms. Most importantly, they fail to account for offsetting equity issuances by firms. We show that, taking into account issuances, net shareholder payouts by all U.S. public firms during the period 2005–2014 were in fact only about $2.50 trillion, or 33% of their net income. Moreover, much of these net shareholder payouts were offset by net debt issuances, and thus effectively recapitalizations rather than firm-shrinking distributions. After excluding marginal debt capital inflows, net shareholder payouts by public firms during the period 2005–2014 were only about 22% of their net income. In short, S&P 500 shareholder-payout figures are not indicative of actual capital flows in public firms, and thus cannot provide much basis for the claim that short-termism is starving public firms of needed capital. We also offer three other reasons why corporate capital flows are unlikely to pose a problem for the economy.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52111

Abstract—In this paper, we examine how connecting to beneficiaries of one’s work increases performance and argue that beneficiaries internal to an organization (i.e., one’s own colleagues) can serve as an important source of motivation, even in jobs that—on the surface—may seem routine and low on potential impact. We suggest that this occurs because words of beneficiaries strengthen one’s sense of belongingness, a key driver of human behavior. Employees, in fact, seek to belong—and seek to enhance their sense of belongingness in work settings. We conducted two studies using both field and laboratory data from different populations to investigate the psychological consequences and performance benefits of connecting to beneficiaries of one’s work. In a longitudinal field experiment of fruit harvesters, we find that though beneficiary contact with the overall customer did not significantly improve productivity, contact with an internal beneficiary that made connectedness salient yielded a persistent increase in productivity relative to a control group. We validate this effect in the laboratory and provide evidence that the effect is mediated by an enhanced sense of belongingness.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52284

Abstract—We examine a solution concept, called the “value," for n-person strategic games. In applications, the value provides an a-priori assessment of the monetary worth of a player's position in a strategic game, comprising not only the player's contribution to the total payoff but also the player's ability to inflict losses on other players. A salient feature is that the value takes account of the costs that “spoilers" impose on themselves. Our main result is an axiomatic characterization of the value. For every subset, S, consider the zero-sum game played between S and its complement, where the players in each of these sets collaborate as a single player, and where the payoff is the difference between the sum of the payoffs to the players in S and the sum of payoffs to the players not in S. We say that S has an effective threat if the minmax value of this game is positive. The first axiom is that if no subset of players has an effective threat then all players are allocated the same amount. The second axiom is that if the overall payoff to the players in a game is the sum of their payoffs in two unrelated games, then the overall value is the sum of the values in these two games. The remaining axioms are the strategic-game analogs of the classical coalitional-games axioms for the Shapley value: efficiency, symmetry, and null player.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52308

Abstract—Executive development programs have entered a period of disruption catalyzed by the digitalization of content, connectivity, and communication and are driven by renewed demand for high-level executive and managerial skills. Unlike other segments of higher education, the executive education market is heavily subsidized by the organizations employing the executives that participate in them. To understand the ongoing transformation of the industry, we use a large database of interviews with participants in executive development programs at HBS—and executives in their sponsoring organizations—to map out the (multidimensional) objective functions of executive participants and their organizations and show how the trio of disruptive forces (disintermediation, disaggregation, and decoupling) that have figured prominently in other industries disrupted by digitalization (media, travel, publishing) are likely to reshape the structure of demand for executive development.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51662

Abstract—Market imperfections are central to understanding the mechanisms that permit firms to capture value. Through competition, leading firms often reduce these imperfections, making markets more efficient. The remaining imperfections become a primary impetus for government intervention. Hence, understanding residual market imperfections—those imperfections that persist after market competition and regulation are accounted for—must undergird any assessment of the long-term attractiveness of firm strategies. Our proposed framework provides an integrated view of competition and government intervention, two of the principal forces that influence variation in firm profitability.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52309

IguanaFix is a rapidly scaling Latin American startup that provides an online platform connecting consumers with home improvement contractors. The founders have acquired customers through both B2C and B2B methods. But in seeking to grow and scale the business, they now must make decisions about the relative emphasis on building their consumer brand or its B2B partnerships as well as the implications for product offerings and marketing methods ranging from search engine marketing and Facebook ads to sales and account management.

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Molly Langenstein, Macy’s executive vice president for fashion and new business development, and members of Macy’s senior team were rethinking the company’s approach to serving millennial customers, customers born between the years of 1980 and 2000. To tackle this challenge, a dedicated millennial team was created. The team looked at the preferences of millennial consumers and how those consumers were served by existing retailers. The team moved on to formulate a new market strategy. To date, the team has seen some improvements in sales and market share in its millennial apparel business, but they believe that additional opportunities exist. Was the Macy’s millennial strategy working? What should they do next?

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No abstract available.

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Michael Milken, an investment banker who dominated the junk bond market in the 1980s, was sentenced to jail in 1990 after pleading guilty to a number of securities and tax-related felonies. In the preceding decade, Milken had helped usher in a new wave of leveraged buy outs (LBOs) and greatly changed the structure of corporate America. By the late 1980s, though, Milken and junk bonds became more heavily scrutinized, and Milken was eventually implicated in a number of felonious acts. Even after his admission of guilt, however, observers remained divided on what Milken's true impact had been. Was he simply a misunderstood financial innovator who democratized access to capital? Or was he driven purely by greed and by nefarious personal financial motives?

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A formerly state-owned Dutch energy utility transforms itself to compete in a deregulated environment.

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Pat Gelsinger, CEO of VMware, is deciding how to structure the firm presence in cloud computing. He can pursue the opportunity in multiple ways: doubling down the investments in an internal and nascent cloud offering, partnering with established third parties, or fulfilling this goal through an acquisition. At the same time, he needs to continue to ensure the success of VMware virtualization business as well as a recent acquisition in mobile. How will the different decisions affect his use of time?

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In 2005 Craig Purse, the CEO of Videojet, a company recently acquired by the conglomerate Danaher, is dealing with the unexpected failure of a new high-tech printer just launched in the market. The new product exemplified the first real instance in which the Videojet team had used the managerial processes of the Danaher Business System (DBS). Was the failure of the new printer a sign that the DBS was fundamentally inadequate for product development projects? Or was the failure instead a symptom that the Videojet team had not properly adopted the DBS? What should Purse do to correct the course of the company?

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Supplements the (A) Case.

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In 2012, Gary Taubes lunched the Nutrition Science Initiative (NuSI), a not-for-profit organization aiming to question the mainstream scientific paradigm regarding obesity and dietary recommendations. This case provides a brief scientific background on obesity and its causes, comorbidities, and the economic cost of this epidemic. It then discusses the two main hypotheses of diet and the formation of NuSI. Finally, it describes the unique challenges and hurdles NuSI has faced both with funding and with impacting the mainstream scientific community. Could this NGO model of funding the “right” clinical trials be successful? Could it be duplicated across other scientific areas? What can be learned from NuSI’s experience? And what is the roadmap for NuSI going forward?

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Environmental activist groups have traditionally opposed nuclear energy. However, the growing environmental problems associated with global climate change require major changes to reduce the carbon intensity of electricity generation. Should environmental groups reverse course and support the construction of new nuclear plants—using technology that could be rapidly deployed at scale—to reduce greenhouse gas emissions that are causing global climate change?

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Describes how Deutsche Bank, a leading European bank, is deciding whether or not to launch a new structured retail product in Germany: an autocallable note. Will this product find a market and how does it fit into the bank’s product portfolio? The case investigates how Deutsche Bank manufactures and distributes its structured retail products and more broadly explores the opportunities and challenges of offering financial products to households. The case also dwells on the scale and scope of the business of retail banking in an increasingly regulated environment.

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