First Look

August 12, 2008

Much research has been done on the benefits of workforce diversity, but relatively little on the processes that can enhance diversity in organizations, notes a new HBS working paper available for download. The authors identify five attributes that support successful workforce diversity initiatives: They reflect a well articulated, firm-wide diversity strategy; have embedded supplemental developmental structures for underrepresented minorities; include partnerships between minorities and nonminorities; are well-integrated within existing organizational practices and processes; and have organizational structures in place that assign responsibility and monitor progress. Also new this week, a case study on that analyzes its business model and ends with the company near bankruptcy. And from the Harvard Business Review, HBS professor Robert Steven Kaplan writes on steps individuals need to take to reach their true potential. One hint: First look at how you define success in your "heart of hearts" and then find your own path there.
— Sean Silverthorne

Working Papers

Dirty Work, Clean Hands: The Moral Psychology of Indirect Agency


When powerful people cause harm, they often do so indirectly through other people. Are harmful actions carried out through others evaluated less negatively than harmful actions carried out directly? Four experiments examine the moral psychology of indirect agency. Experiment 1 reveals effects of indirect agency under conditions favoring intuitive judgment, but not reflective judgment, using a joint/separate evaluation paradigm. Experiment 2 demonstrates that effects of indirect agency cannot be explained by perceived lack of foreknowledge or control on the part of the primary agent. Experiment 3 indicates that reflective moral judgment is sensitive to indirect agency, but only to the extent that indirectness signals reduced foreknowledge and/or control. Experiment 4 indicates that effects of indirect agency result from a failure to automatically consider the potentially dubious motives of agents who cause harm indirectly.

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Defining the Attributes and Processes that Enhance the Effectiveness of Workforce Diversity Initiatives in Knowledge Intensive Firms


Workforce diversity continues to be a key focus for organizations, driven by globalization of the U.S. economy and the desire for organizations to more accurately reflect the demographic diversity of the U.S. population. Yet, most research on diversity in organizations has focused on the outcomes associated with workforce diversity and not on the processes that can enhance diversity in organizations. We address this limitation by developing a conceptual model and propositions that highlight the attributes of effective workforce diversity initiatives and the process through which workforce diversity initiatives become effective. We focus on knowledge-intensive work and argue that in this context, the nature of the work is directly tied to societal stereotypes of underrepresented minorities, making knowledge intensive firms a rich environment to examine diversity initiatives and explore the dynamics that hinder retention and promotion for underrepresented minorities in these firms. We close by discussing directions for future research on workforce diversity initiatives.

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Cases & Course Materials

Accounting for Business Combinations: Acquisition Method

Harvard Business School Note 108-067

A technical note reviewing business combinations and Goodwill accounting under the Statement of Financial Accounting Standards, No. 141R.

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ADR Choices

Harvard Business School Note 908-040

Six different business disputes, all in the shadow of pending litigation, are described. Students are asked to recommend the appropriate method of dispute resolution (mediation, arbitration, mini-trial, etc.) for each one, depending on the circumstances, especially to assess likely barriers to unassisted negotiation.

Purchase the case: The Brink of Bankruptcy

Harvard Business School Case 809-014

Enables a thorough analysis of the business model and its evolution from 1994 to 2001. The case ends with the company poised on the brink of bankruptcy and enables discussion of how to turnaround the company and leverage proprietary assets.

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Bernd Beetz: Creating the New Coty

Harvard Business School Case 808-133

Considers the creation of the world's largest fragrance company by Bernd Beetz, appointed chief executive of Coty Inc. in 2001. In 1990 the German consumer goods company Benkiser began acquiring fragrance and cosmetics brands with the intent of developing a beauty business. These included the long-established, but relatively small, U.S. fragrance company Coty. In 1996 the beauty business was spun off under the name Coty. When Beetz was hired as chief executive, it was still a fragmented collection of recently acquired brands. The case describes how Beetz re-ignited the dormant celebrity fragrance business with the successful launch of a new Jennifer Lopez fragrance line. Fashioning a new entrepreneurial culture based on the principles of "faster, further, freer," Coty hired longstanding executives from other firms and liberated their entrepreneurial capabilities, refreshing brands which had been tarnished into a global mass color cosmetics brand. In 2005 the acquisition of Calvin Klein from Unilever, and its renewal, catapulted Coty into the position of the world's largest fragrance company. The case provides an opportunity to examine the entrepreneurial, cultural, and organizational factors which enable acquired brands and employees to be re-invigorated and molded into a dynamic new global business. It asks if the cultural and other factors behind its rapid growth can sustain the company as it seeks growth much further as a top-five beauty company.

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The Book Deal: Confidential Instructions for the AGENT

Harvard Business School Exercise 908-051

A two-party negotiation between an Agent representing a new author and an Editor at a large Publishing Firm. The exercise involves a one-issue, zero-sum negotiation concerning the advance on royalties that the publisher will pay to the author.

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The Book Deal: Confidential Instructions for the PUBLISHER

Harvard Business School Exercise 908-050

A two-party negotiation between an Agent representing a new author and an Editor at a large Publishing Firm. The exercise involves a one-issue, zero-sum negotiation concerning the advance on royalties that the publisher will pay to the author.

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China's Environmental Challenge

Harvard Business School Note 308-100

China faces enormous environmental challenges. This background note looks at the historical, economic and political origins of the environmental crisis that faces the world's fastest-growing economy.

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Chunghwa Telecom Co., Ltd. (A)

Harvard Business School Case 808-137

In late November 2000, Chunghwa Telecom Co., Ltd., the once-monopolized telecom operator owned by the Taiwanese government, was on its way to privatization. Mr. C.K. Mao, Chairman of the company, who headed the job only three months earlier, after its prior chairman resigned unexpectedly in the midst of chaos brought by the resistance of its staff who feared losing their civil servant status after privatization. Also facing Mao was the forthcoming deregulation of the telecommunication industry on the island which would bring about new competitors on fixed-line services, in addition to the already competitive mobile communication segment where the company's once dominant market share was heavily eroded. Mao had to decide on the pricing strategies for the company's various product lines, including fixed line, mobile services, as well as data communication. He also needed to ponder on how to revise the company's compensation system to better motivate its staff in a deregulated market and communicate all these changes to the unionized labor force.

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Supplement (B), 808-138:

Connectivity in Health Care

Harvard Business School Note 307-047

This note describes the current state of information technology connectivity in the health care sector.

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Cook Composites and Polymers Co.

Harvard Business School Case 608-055

This case describes how a company improves resource efficiency and process quality in its manufacturing process by developing a waste by-product into a new product. The case describes how CCP cleans production equipment between batches using styrene, which becomes a costly hazardous waste. Having worked on minimizing waste for the past 20 years, CCP believed it could not reduce the use of styrene without risking product quality. Instead, CCP was exploring the development of a by-product from its "rinse styrene," but faces uncertainty regarding the operational, financial, and environmental implications of doing so. This case contains data to support quantitative analyses of financial, operational, and environmental issues including some basic life-cycle analysis (LCA) calculations that focus on greenhouse gas emissions.

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Enterprise Risk Management at Hydro One

Harvard Business School Case 109-001

An early adopter of Enterprise Risk Management, energy giant Hydro One anticipated new threats and opportunities in an industry that faced climate change and carbon legislation, the deregulation of electricity markets, and the greater adoption of renewable technologies. CEO Laura Formusa felt Hydro One's risk profile had shifted, to the extent that she had to ask herself—was the strategy tenable? The case provides a rich description of Enterprise Risk Management in action and shows how Hydro One executives arrive at a shared understanding of the risk profile of the company. In the narrative a diverse group of managers (the chief executive, the chief financial officer, the head of the public relations and the chief regulatory officer) voice their views on the risks, collectively bringing a multiple stakeholder perspective to the risk profile. The case challenges students to define the problems and risks that the company faces, given its strategic objectives, its evolving risk profile, and the changing environment. The case also offers a discussion ground for defining the role of the chief risk officer and the relationship between risk management, strategic planning and capital budgeting.

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EXACT Sciences Corp.: Commercializing a Diagnostic Test

Harvard Business School Case 308-090

What are the barriers and opportunities to commercializing genetic diagnoses for disease?

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Exercise: Challenging Operational Assumptions

Harvard Business School Exercise 608-128

This exercise provides students with an opportunity to thoroughly test an operating assumption. Students state an assumption as a testable hypothesis, collect and analyze relevant data, and communicate the results. At HBS, it is incorporated in a second-year elective taught in a module devoted to utilizing customer-operators to improve service operations (HBS 608-135). The exercise is taught in three parts: in-class workshop, project presentation, and post-exercise poll.

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Fidelity Investments' Charitable Gift Fund (A)

Harvard Business School Case 309-002

Deborah Pege, an attorney at Fidelity Investments, needs to decide whether Fidelity should attempt to patent business processes involved with its new charitable gift fund. The case explores the conditions that must be satisfied in order to receive a patent and raises issues about the value of patent versus other ways to protect intellectual property.

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Fidelity Investments' Charitable Gift Fund (B)

Harvard Business School Supplement 309-003

The (B) case informs students of Fidelity's decision about pursuing a business process patent for its charitable gift fund and describes subsequent litigation and lawsuits filed by other companies over business process patent issues.

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How Serial Entrepreneurs Build and Manage a Board of Directors in a Venture-Backed Start Up

Harvard Business School Case 808-163

This case includes structured interviews with four serial entrepreneurs about the way in which they built and used their boards in each of their companies and what they have learned through that process. These entrepreneurs were asked similar questions, such as "How do you build a board of directors in a venture-backed start up?"; "What do you expect of the board and how do you ensure those expectations are met?"; "What are the most and least value-added board activities?"; "How do you manage the board?"; "How does board composition change over time?"; "What were your biggest surprises about boards?"; and "What advice would you give first-time entrepreneurs?"

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The Miami Project to Cure Paralysis

Harvard Business School Case 408-003

Marc Buoniconti is the co-founder of the Miami Project to Cure Paralysis, a nonprofit medical research organization. The project was founded in 1985 by Marc and his father Nick, a former Hall of Fame football player, when Marc suffered a spinal cord injury. In 2007, Marc was still confined to a wheelchair, but the Miami project had developed into the world's largest spinal cord injury research and treatment center. It had 250 employees, operated from a $37 million state of the art facility located on the University of Miami Miller School of Medicine campus, and had raised in excess of $275 million since its inception. However, there was still no cure for spinal cord injury, and many of the project's supporters were becoming anxious for a substantial clinical breakthrough. Fund-raising was always a concern, particularly as government spending on research was declining. Marc and his father were keenly aware of the challenge of maintaining the enthusiasm and financial backing of the Miami Project's supporters. Yet they needed to avoid over-promising regarding the likelihood of potential breakthroughs, which required painstaking research and stringent clinical trials. The leadership also questioned whether the mission should remain focused on spinal cord injury, or whether it should broaden to include brain trauma and other neurodegenerative diseases such as Alzheimer's and Parkinson's. Case provides an opportunity to discuss the challenges of non-profit management, medical research and to debate appropriate strategy for the Miami Project in 2007.

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Offshoring Day in BGIE and Strategy

Harvard Business School Note 708-492

Describes a set of activities in which students will participate before and during a day of classes on offshoring. The day's classes will examine the implications of offshoring for policy makers, business leaders, and workers.

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PCCW now

Harvard Business School Case 709-405

In 2007, PCCW had to formulate a strategy for growth of its successful NOW TV platform and its quadruple play implementation outside of Hong Kong. Launched in September 2003 by PCCW (Hong Kong's largest telecommunications operator), NOW TV had swiftly become the world's most successful commercial IPTV deployment. By the end of June 2007, the service had an installed subscriber base of almost 820,000 and offered a choice of 143 TV channels, 71 of which were exclusive. However, opportunities for growth were inherently limited to Hong Kong (7 million inhabitants), which meant PCCW had to find ways to expand its NOW platform or seek to license parts of it internationally.

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The Politics and Economics of Accounting for Goodwill at Cisco Systems (A)

Harvard Business School Case 109-002

Studies the role of Cisco in setting current U.S. accounting standards for acquisitions and goodwill. Students are asked to analyze an acquisition in the context of an ongoing political debate on mergers accounting.

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Supplement (B), 109-003:

Università Bocconi: Transformation in the New Millennium

Harvard Business School Case 709-406

Since its foundation in 1902, Bocconi has been a teaching institution with a dominant domestic presence. The case examines the currently unfolding attempt at transforming Bocconi University into a research powerhouse with the ambition to build a strong position among Europe's leading business schools. The case offers a detailed analysis of Bocconi's transformational journey and illustrates the challenges of changing the mindset of a large portion of the faculty.

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Business Market Management: Understanding, Creating, and Delivering Value


For business-to-business marketing courses. The authors build the book around a framework of understanding, creating, and delivering value.

Book Link: academic/product/0,3110,0136000886,00.html

How XBRL Will Dramatically Improve: Reporting and Control Processes


Abstract not available

Reaching Your Potential


Despite their lofty job titles and impressive pay, many high-achieving executives feel professionally dissatisfied and unfulfilled. Looking back, they wish they'd accomplished more or even chosen a different career altogether. Often they feel trapped in their jobs. In this article, Kaplan, a Harvard Business School professor, examines why people arrive at this impasse and offers them guidance on how to break through it and reach their full potential.