Publications
Commentaries and Cases on the Law of Business Organization
| Authors: | Allen, William T., Reiner Kraakman, and Guhan Subramanian |
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Abstract
This fourth edition is completely updated throughout. It now includes excerpts from important recent cases such as "Air Products v. Airgas" and "In re CNX Gas" and provides commentary on current developments, such as "Say on Pay," proxy access and the Dodd-Frank Act of 2010. A new chapter on executive compensation appears. The fourth edition provides additional contextual background for certain cases to help students better understand the court's reasoning. The text continues to provide additional questions, connections to the empirical literature, and cross-country comparisons.
Book: http://www.aspenlawschool.com/books/allen_busorg4/default.asp
Working Papers
How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment
| Authors: | Cohen, Alma, and Charles C.Y. Wang |
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Abstract
This paper examines whether staggered boards reduce firm value or are merely associated with it due to the tendency of low-value firms to maintain staggered boards. To analyze this causal question, we take advantage of a natural experiment involving two offsetting court rulings, separated by several weeks, that affected the antitakeover force of staggered boards for a subset of Delaware firms. We find evidence consistent with the hypothesis that the market viewed the antitakeover force of staggered boards as value-reducing. Our findings have implications for the long-standing policy debate on the desirability of staggered boards.
Download the paper: http://ssrn.com/abstract=2141410
The Dirty Laundry of Employee Award Programs: Evidence from the Field
| Authors: | Gubler, Timothy, Ian Larkin, and Lamar Pierce |
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Abstract
Many scholars and practitioners have recently argued that corporate awards are a "free" way to motivate employees. We use field data from an attendance award program implemented at one of five industrial laundry plants to show that awards can carry significant spillover costs and may be less effective at motivating employees than the literature suggests. Our quasi-experimental setting shows that two types of unintended consequences limit gains from the reward program. First, employees strategically game the program, improving timeliness only when eligible for the award, and call in sick to retain eligibility. Second, employees with perfect pre-program attendance or high productivity suffered a 6% to 8% productivity decrease after program introduction, suggesting they were demotivated by awards for good behavior they already exhibited. Overall, our results suggest the award program decreased plant productivity by 1.4%, and that positive effects from awards are accompanied by more complex employee responses that limit program effectiveness.
Download the paper: http://ssrn.com/abstract=2215922
Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising
| Authors: | Kireyev, Pavel, Koen Pauwels, and Sunil Gupta |
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Abstract
As firms increasingly rely on online media to acquire consumers, marketing managers feel comfortable justifying higher online marketing spending by referring to online metrics such as click-through rate (CTR) and cost per acquisition (CPA). However, these standard online advertising metrics are plagued with attribution problems and do not account for dynamics. These issues can easily lead firms to overspend on some actions and thus waste money, and/or underspend in others, leaving money on the table. We developed a multivariate time series model to investigate the interaction between paid search and display ads and calibrated the model using data from a large commercial bank that uses online ads to acquire new checking account customers. We find that display ads significantly increase search conversion. Both search and display ads also exhibit significant dynamics that improve their effectiveness and ROI over time. Finally, in addition to increasing search conversion, display ad exposure also increases search clicks, thereby increasing search advertising costs. After accounting for these three effects, we find that each $1 invested in display and search leads to a return of $1.24 for display and $1.75 for search ads, which contrasts sharply with the estimated returns based on standard metrics. We use these results to show how optimal budget allocation may shift dramatically after accounting for attribution and dynamics. Although display benefits from attribution, the strong dynamic effects of search call for an increase in search advertising budget share by up to 36% in our empirical context.
Download the paper: http://www.hbs.edu/faculty/Pages/download.aspx?name=13-070.pdf
In Strange Company: The Puzzle of Private Investment in State-Controlled Firms
| Authors: | Pargendler, Mariana, Aldo Musacchio, and Sergio G. Lazzarini |
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Abstract
A large legal and economic literature describes how state-owned enterprises (SOEs) suffer from a variety of agency and political problems. Less theory and evidence, however, have been generated about the reasons why state-owned enterprises listed in stock markets manage to attract investors to buy their shares (and bonds). In this article, we examine this apparent puzzle and develop a theory of how legal and extralegal constraints allow mixed enterprises to solve some of these problems. We then use three detailed case studies of state-owned oil companies-Brazil's Petrobras, Norway's Statoil, and Mexico's Pemex-to examine how our theory fares in practice. Overall, we show how mixed enterprises have made progress to solve some of their agency problems, even as government intervention persists as the biggest threat to private minority shareholders in these firms.
Download the paper: http://ssrn.com/abstract=2217627
Cases & Course Materials
Ocean Mist Farms
Bell, David E., Jose B. Alvarez, Mary Shelman, and Michael Norris
Harvard Business School Case 513-027
In late 2012, Kori Tuggle, director of marketing and business development at Ocean Mist Farms, a California produce company, examines her social media-based marketing program and her attempts to create a brand for a bulk commodity.
Purchase this case:
http://hbr.org/search/513027-PDF-ENG
BabbaCo
Bussgang, Jeffrey J., and Gaurav Jain
Harvard Business School Case 813-107
Having just raised a Series B financing, the case protagonist is faced with a tough decision: should she "step on the gas" and scale the customer base or continue focusing on fine-tuning the product and business model. The case describes the various marketing channels employed by the BabbaCo team (Search, Email, Social Media, Deal Sites, Affiliates, etc.), including the strategy and effectiveness for each. Readers can use this knowledge to evaluate the effectiveness of the marketing efforts to date and determine whether they think the company is ready to scale those efforts or whether it is premature to do so.
Purchase this case:
http://hbr.org/search/813107-PDF-ENG
Longtop Financial Technologies (D)
Hawkins, David F.
Harvard Business School Case 113-076
Supplement for case 112-036
Purchase this case:
http://hbr.org/search/113076-PDF-ENG
Xylem: Let's Solve Water
Henderson, Rebecca M., and James Weber
Harvard Business School Case 313-082
No abstract available.
Purchase this case:
http://hbr.org/search/313082-PDF-ENG
Entrepreneurial Finance in Finland?
Kerr, William R., Ramana Nanda, and Alexis Brownell
Harvard Business School Case 813-068
This case describes a new venture attempting to bring early-stage entrepreneurial financing to Finland and other Nordic countries. Entrepreneurship is taking off in Finland, an area that historically has had little venture capital or high-growth start-up activity, but a gap remains for seed-stage financing. The founders are evaluating the best way to structure their private equity fund to reflect their own assets and abilities and the needs and resources of the entrepreneurial scene in the Nordics. The case evaluates whether to organize as an accelerator, a micro-VC fund, an incubator, a normal VC fund, or as a hybrid.
Purchase this case:
http://hbr.org/search/813068-PDF-ENG
The IASB at a Crossroads: The Future of International Financial Reporting Standards (B)
Ramanna, Karthik, Karol Misztal, and Daniela Beyersdorfer
Harvard Business School Case 113-089
In late 2012, IASB chair Hans Hoogervorst, just over a year into his term, must address several serious geopolitical challenges that can derail IFRS growth. The SEC has issued a report outlining why the U.S. should not adopt IFRS. Other major economies such as Japan and India begin to dither on IFRS as well. The EU-the IASB's main backer-is embroiled in a debt crisis that divides it; Britain-the strongest voice for IFRS in the EU-flirts with an EU exit. And China remains silent. Adding to these issues are longstanding concerns about the IASB's legal status and its finances. How can Hoogervorst return momentum to IFRS?
Purchase this case:
http://hbr.org/search/113089-PDF-ENG
Pioneers in Colombia
Retsinas, Nicolas P., and Lisa Strope
Harvard Business School Case 212-050
In 2011, Equity International made a $75 million equity investment in Bogota-based real estate company Terranum Development and became the first institutional real estate investor in Colombia.
Purchase this case:
http://hbr.org/search/212050-PDF-ENG
OpCo / PropCo Valuation
Retsinas, Nicolas P., Lisa Strope, and John C. Hettinger
Harvard Business School Case 213-070
This technical note describes the "OpCo/PropCo" process of valuing a real estate- intensive business. The term "OpCo/PropCo" refers to a business arrangement in which a consolidated, real estate-intensive enterprise is split into two separate businesses: (1) a property company and (2) the underlying operating business.
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http://hbr.org/search/213070-PDF-ENG
Marketing Communications
Teixeira, Thales S.
Harvard Business School Case 513-041
This note identifies the main issues involved in the effective management of the marketing communications process. It first defines the purpose of communication. Then it classifies the tools available to communicate with consumers. In the sequel, it elaborates on how consumers respond to communication attempts. Finally, it lays out a framework for marketers to manage the entire communications process.
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http://hbr.org/search/513041-PDF-ENG