Publications
- December 2014
- Academy of Management Journal
Harnessing Productive Tensions in Hybrid Organizations: The Case of Work Integration Social Enterprises
Abstract—We examine the factors that influence the social performance of hybrid organizations that pursue a social mission, and sustain their operations through commercial activities, by studying work integration social enterprises (WISEs). We argue that social imprinting and economic productivity are both important drivers of WISEs' social performance. However, there is a paradox inherent in the social imprinting of WISEs: although it directly enhances their social performance, it also indirectly weakens it by negatively affecting economic productivity. Results based on panel data of French WISEs between 2003 and 2007 are congruent with our predictions. In order to understand how socially imprinted WISEs may mitigate this negative relationship between social imprinting and economic productivity, we also conduct a comparative analysis of case studies. We find that one effective approach is to assign responsibility for social and economic activities to distinct groups while creating "spaces of negotiation"-areas of interaction that allow members of each group to discuss the trade-offs they face. We conclude by highlighting the conditions under which spaces of negotiation can effectively be used to maintain a productive tension in hybrid organizations.
Publisher's link: http://dx.doi.org.ezp-prod1.hul.harvard.edu/10.5465/amj.2013.0903
- December 2014
- Journal of Applied Psychology
Preparatory Power Posing Affects Nonverbal Presence and Job Interview Outcomes
Abstract—We tested whether engaging in expansive (vs. contractive) "power poses" before a stressful job interview-preparatory power posing-would enhance performance during the interview. Participants adopted high-power (i.e., expansive, open) poses or low-power (i.e., contractive, closed) poses, and then prepared and delivered a speech to two evaluators as part of a mock job interview. All interview speeches were videotaped and coded for overall performance and hireability, and for two potential mediators: verbal content (e.g., structure, content) and nonverbal presence (e.g., captivating, enthusiastic). As predicted, those who prepared for the job interview with high- (vs. low-) power poses performed better and were more likely to be chosen for hire; this relation was mediated by nonverbal presence, but not by verbal content. While previous research has focused on how a nonverbal behavior that is enacted during interactions and observed by perceivers affects how those perceivers evaluate and respond to the actor, this experiment focused on how a nonverbal behavior that is enacted before the interaction and unobserved by perceivers affects the actor's performance, which, in turn, affects how perceivers evaluate and respond to the actor. This experiment reveals a theoretically novel and practically informative result that demonstrates the causal relation between preparatory nonverbal behavior and subsequent performance and outcomes.
- December 2014
- Harvard Business Review
Rethink What You 'Know' about High-Achieving Women
Abstract—On the occasion of the 50th anniversary of the admission of women to Harvard Business School's MBA program, the authors, who have spent more than 20 years studying professional women, set out to learn what HBS graduates had to say about work and family and how their experiences, attitudes, and decisions might shed light on prevailing controversies. What their comprehensive survey revealed suggests that the conventional wisdom about women's careers doesn't always square with reality. The survey showed, for instance, that 1) the highly educated, ambitious women and men of HBS don't differ much in terms of what they value and hope for in their lives and careers; 2) it simply isn't true that a large proportion of HBS alumnae have "opted out" to care for children; 3) going part-time or taking a career break to care for children doesn't explain the gender gap in senior management; and 4) the vast majority of women anticipated that their careers would rank equally with those of their partners. Many of them were disappointed. It is now time, the authors write, for companies to consider how they can institutionalize a level playing field for all employees, including caregivers of both genders. The misguided assumption that high-potential women are "riskier" hires than their male peers because they are apt to discard their careers after parenthood has become yet another bias for women to contend with.
Publisher's link: https://hbr.org/2014/12/rethink-what-you-know-about-high-achieving-women
- December 2014
- MIT Sloan Management Review
The Upside to Large Competitors
Abstract—Large companies are often viewed as a major threat for startups and small companies; big companies have more financial resources and greater scale, market power, and brand awareness than small ones. However, our research finds that a smaller brand can actually benefit if consumers can see the competitive threat it faces from a larger organization.
Publisher's link: http://sloanreview.mit.edu/article/the-upside-to-large-competitors/
- December 2014
- Small Group Research
Team Reflexivity as an Antidote to Team Information-Processing Failures
Abstract—This article proposes that team reflexivity-a deliberate process of discussing team goals, processes, or outcomes-can function as an antidote to team-level biases and errors in decision making. We build on prior work conceptualizing teams as information-processing systems and highlight reflexivity as a critical information-processing activity. Prior research has identified consequential information-processing failures that occur in small groups, such as the failure to discuss privately held relevant information, biased processing of information, and failure to update conclusions when situations change. We propose that team reflexivity reduces the occurrence of information-processing failures by ensuring that teams discuss and assess the implications of team information for team goals, processes, and outcomes. In this article, we present a model of team information-processing failures and remedies involving team reflexivity, and we discuss the conditions under which team reflexivity is and is not likely to facilitate performance.
Publisher's link: http://sgr.sagepub.com.ezp-prod1.hul.harvard.edu/content/45/6/731.full.pdf+html
- December 2014
- Harvard Business Review
The Discipline of Business Experimentation
Abstract—The data you already have can't tell you how customers will react to innovations. To discover if a truly novel concept will succeed, you must subject it to a rigorous experiment. In most companies, tests do not adhere to scientific and statistical principles. As a result, managers often end up interpreting statistical noise as causation-and making bad decisions. To conduct experiments that are worth the expense and effort, companies need to ask themselves several questions: Does the experiment have a clear purpose? Managers must figure out exactly what they want to learn in order to determine if testing is the best approach. Have stakeholders made a commitment to abide by the results? Are they willing to walk away from a project if the findings suggest they should? Is the experiment doable? The complexity of the variables in a business experiment and their interactions can make it difficult to determine cause-and-effect relationships. Choosing the right sample size is important. How can we ensure reliable results? Randomized field trials, "blind" tests, and big data can help. Have we gotten the most value out of the experiment? Conducting the experiment is just the beginning. Use the data to assess which components of a new initiative might have the highest ROI or the markets where it is most likely to be successful.
Publisher's link: https://hbr.org/2014/12/the-discipline-of-business-experimentation
Working Papers
The Real Effects of Capital Controls: Financial Constraints, Exporters, and Firm Investment
Abstract—In the aftermath of the global financial crisis of 2008-2009, emerging-market governments have increasingly restricted foreign capital inflows. The data show a statistically significant drop in cumulative abnormal returns for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to external-finance-dependent firms, and capital controls on equity have a more negative announcement effect than those on debt. Real investment falls following the controls. Overall, the results suggest that capital controls segment international financial markets, increase the cost of capital, reduce the availability of external finance, and lower firm-level investment.
Download working paper: http://www.hbs.edu/faculty/Publication%20Files/15-016_c6e7c9cc-70a3-4119-bd7b-8e4b25a26312.pdf
Technology Choice and Capacity Portfolios Under Emissions Regulation
Abstract—We study the impact of emissions tax and emissions cap-and-trade regulation on a firm's technology choice and capacity decisions. We show that emissions price uncertainty under cap-and-trade results in greater expected profit than a constant emissions price under an emissions tax, which contradicts popular arguments that the greater uncertainty under cap-and-trade will erode value. We further show that two operational drivers underlie this result: i) the firm's option not to operate, which effectively right-censors the uncertain emissions price and ii) dispatch flexibility, which is the firm's ability to first deploy its most profitable capacity given the realized emissions price. In addition to these managerial insights, we also explore policy implications: the effect of emissions price level and the effect of investment and production subsidies. We illustrate the context-dependent effects of subsidization through an example grounded in peak-load power generation. We show that production subsidies of higher investment and production cost technologies (such as carbon capture and storage technologies) have no effect on the firm's optimal total capacity but that investment subsidies of these technologies increase total capacity, conditionally increasing expected emissions.
Download working paper: http://ssrn.com/abstract=1702186
Cases & Course Materials
- Harvard Business School Case 115-009
BMVSS: Changing Lives through Innovation One Jaipur Limb at a Time (Abridged)
Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS) is an Indian not-for-profit organization engaged in assisting differently abled persons by providing them with the legendary low-cost prosthesis, the Jaipur Foot, and other mobility-assisting devices, free of cost. Known for its patient-centric culture, its focus on innovation, and for developing the $20 Stanford-Jaipur knee, BMVSS has assisted over a million people in its lifetime of 44 years. As the founder, Mr. D.R. Mehta, thinks about the financial sustainability of BMVSS, he must devise a strategy that will sustain its human impact well into the future.
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https://cb.hbsp.harvard.edu/cbmp/product/115009-PDF-ENG
- Harvard Business School Case 415-034
Micromax: Scaling the Largest Indian Mobile Handset Company
It is January 2014 and Rahul Sharma, cofounder of Micromax Informatics (Micromax), the largest Indian mobile handset company, is preparing for an emergency conference call with his private equity investors. In the last six years, Micromax had grown its annual product revenues from $54 million to over $1 billion. Unfortunately, it was difficult for the founding team to keep up with Micromax's rapid growth, triggering a series of missteps in 2010 that brought the company close to catastrophe. In response, investors had convinced Sharma and his cofounders to hire their first outside CEO, Deepak Mehrotra, and several senior professionals. With the founders working alongside the new "professionals," frequent overlaps and sometimes run-ins occurred. Now, both Mehrotra and the head of their smartphone division had resigned. Sharma evaluates their options: Would the founders need to reconsider their involvement in the company they created? Or was there still a middle ground where both founders and professionals could coexist in the business?
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https://cb.hbsp.harvard.edu/cbmp/product/415034-PDF-ENG
- Harvard Business School Case 714-514
OrthoChoice: Bundled Payments in the County of Stockholm (A)
It was the waiting that drew the attention of the Stockholm County Council. In 2008, patients seeking a hip or knee replacement in Stockholm County faced wait times of up to two years of sometimes debilitating pain, intermittent missed work and income, and the trials of disability. Seeking a new model to lower wait times, but also to improve patient choice of care, County Council Senior Medical Adviser, Dr. Holger Stalberg, set out to create a bundled payment system for hip and knee replacements in the County. The new model, called OrthoChoice, was set to go into operation on January 1, 2009.
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https://cb.hbsp.harvard.edu/cbmp/product/714514-PDF-ENG
- Harvard Business School Case 714-515
OrthoChoice: Bundled Payments in the County of Stockholm (B)
By the end of 2008, all major hospitals (one of which was private) and three private specialized orthopedic centers signed OrthoChoice contracts. In 2009, hip and knee replacements in the County of Stockholm for relatively healthy patients began being reimbursed. By 2013, OrthoChoice had covered 12,531 hip and knee replacements, accounting for 59% of such operations for county residents. Total payments were SEK 704.5 million ($109.4 million). Dr. Holger Stalberg and his team at the Stockholm County Council (SLL) were reviewing the results of the new payment approach and considering how to improve the model.
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https://cb.hbsp.harvard.edu/cbmp/product/714515-PDF-ENG
- Harvard Business School Case 515-009
Marketing Marijuana in Colorado
Colorado's 2014 legalization of marijuana for adult recreational (not just medical) use created a new market that entrepreneurs rushed to enter, channeled by regulations that aimed to minimize marijuana's access to minors while not stifling the emergent new industry. The case describes Colorado's initial experience with marijuana legalization and asks students to assess the resulting business opportunities, regulatory efficacy, and public health implications.
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https://cb.hbsp.harvard.edu/cbmp/product/515009-PDF-ENG
- Harvard Business School Case 515-028
Fresno's Social Impact Bond for Asthma
In 2014, Social Impact Bonds (SIBs) were quickly gaining popularity as an investment vehicle that joined together private investors and nonprofits to tackle social issues. Although numerous SIB projects and proposals had cropped up across the U.S. following the launch of the first SIB in the UK in 2010, none were explicitly focused on healthcare. Fresno, California, announced the first healthcare SIB in 2013 to fund home-based programs to reduce asthma attacks. If successful, the Fresno SIB model would help solve the challenge of delivering preventative care efficiently in at-risk communities.
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https://cb.hbsp.harvard.edu/cbmp/product/515028-PDF-ENG