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    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      First Look: February 24

      First Look

      24 Feb 2015

      Improving Global Project Management

      Business today is global, so figuring out how teams can work together around the world is critically important. Research by Christopher Marquis and colleagues studies cross-cultural collaboration between Chinese and Dutch project managers. "This study provides insights for those who work cross culturally (especially between western and eastern contexts) and is also a contribution to both the project management and cross-cultural management literatures," the authors report. The paper is called The Challenges and Enhancing Opportunities of Global Project Management: Evidence from Chinese and Dutch Cross-Cultural Project Management.

      Understanding "thin" Political Markets

      Karthik Ramanna's research delves into important institutions that wield much power but are little known to the general public, groups who influence rulemaking for bank capital adequacy, actuarial standards, accounting standards, and auditing practice. "In these areas," Ramanna writes, "corporate managers and financial experts such as auditors and bankers possess the technical expertise necessary for informed regulation, enjoy strong economic interests in the outcome, and face little resistance to their lobbying activities from the general public." His fortcoming book "Political Standards" identifies problems with the system and how to fix them.

      Does Reflecting On Unethical Behavior Cause More Unethical Behavior?

      In the paper Thick as Thieves? Dishonest Behavior and Egocentric Social Networks, Francesca Gino and colleagues study the relationships between moral behavior and social networks. While earlier research has shown that a cohesive social network can temper one's moral behavior through shared norms, this research demonstrates a flip-side: People often construct their own social network as a way to defend themselves from threatening information.

      —Sean Silverthorne
      LinkedIn
      Email
       

      Publications

      • February 2015
      • University of Chicago Press

      Political Standards

      By: Ramanna, Karthik

      Abstract—There are certain institutions underlying our modern market-capitalist system that are largely outside the interest and understanding of the general public-e.g., rulemaking for bank capital adequacy, actuarial standards, accounting standards, and auditing practice. In these areas, corporate managers and financial experts such as auditors and bankers possess the technical expertise necessary for informed regulation, enjoy strong economic interests in the outcome, and face little resistance to their lobbying activities from the general public. These areas are known as "thin political markets" to distinguish them from more vibrant and competitive "thick" political processes (e.g., healthcare regulation). This book develops the notion of thin political markets through a vivid exploration of the political processes determining our system of accounting rules upon which depends our ability to reliably measure corporate profits in the economy. The book shows how some corporate interests, in the spirit of increasing profits, have been manipulating the very definition of profit by changing accounting rules. On one level, this corporate behavior embodies the capitalist spirit articulated by Milton Friedman: "The social responsibility of business is to increase its profits." But the ethics of profit-increasing behavior are premised on the logic of competition, and this logic breaks down in thin political markets. The result is a structural flaw in the determination of critical institutions of our capitalist system, which, if ignored, can undermine the legitimacy of the system. The book closes with ideas on how to fix the problem.

      • February 2015
      • ICSS Journal

      Making Boston Stronger

      By: Leonard, Dutch, Arnold M. Howitt, Christine M. Cole, and Philip B. Heymann

      Abstract—In the wake of the Boston Marathon bombing in 2013, a team from Harvard University carried out extensive interviews with participants to identify strengths and weaknesses in the incident response to the terror attack. This abridged version of their final report focuses on the lessons learnt.

      Publisher's link: http://www.hks.harvard.edu/content/download/67364/1242266/version/1/file/Making+Boston+Stronger_ICSS+Journal.pdf

      • February 2015
      • California Management Review

      Thin Political Markets: The Soft Underbelly of Capitalism

      By: Ramanna, Karthik

      Abstract—"Thin political markets" are the processes through which some of the most complex and critical institutions of our capitalist system are determined-e.g., our accounting-standards infrastructure. In thin political markets, corporate managers are largely unopposed-because of their own expertise and the general public's low awareness of the issues. This enables managers to structure the "rules of the game" in self-serving ways. The result is a structural flaw in the determination of critical institutions of our capitalist system, which, if ignored, can undermine the legitimacy of the system. I provide some ideas on how to fix the problem.

       

      Working Papers

      Curbing Adult Student Attrition: Evidence from a Field Experiment

      By: Chande, Raj, Michael Luca, Michael Sanders, Xian-Zhi Soon, Oana Borcan, Netta Barak-Corren, Elizabeth Linos, Elspeth Kirkman, and Sean Robinson

      Abstract—Roughly 20% of adults in the Organization for Economic Co-Operation and Development (OECD) lack basic numeracy and literacy skills. In the UK, many colleges offer fully government-subsidized adult education programs to improve these skills. Constructing a unique dataset consisting of weekly attendance records for 1,179 students, we find that approximately 25% of learners stop attending these programs in the first 10 weeks and that average attendance rates deteriorate by 20% in that time. We implement a large-scale field experiment in which we send encouraging text messages to students. Our initial results show that these simple text messages reduce the proportion of students that stop attending by 36% and lead to a 7% increase in average attendance relative to the control group. The effects on attendance rates persist through the three weeks of available data following the initial intervention.

      Download working paper: http://people.hbs.edu/mluca/ALERT.pdf

      Thick as Thieves? Dishonest Behavior and Egocentric Social Networks

      By: Lee, Jooa Julia, Dong-Kyun Im, Bidhan L. Parmar, and Francesca Gino

      Abstract—People experience a threat to their moral self-concept in the face of discrepancies between their moral values and their unethical behavior. We theorize that people's need to restore their view of themselves as moral activates thoughts of a high-density personal social network. Such thoughts also lead people to more likely engage in further unethical behavior. In five experiments, participants reflected on their past unethical behavior, and then completed a task designed to measure network density. Those who cheated more frequently in the past, recalled their negative moral identity, or decided to lie were more likely to activate a high-density network (Experiments 1-3). Using a mediation-by-moderation approach (Experiment 4), we confirm that this link between dishonesty and network density is explained by a threat to positive self-concept. Importantly, activating a dense network after engaging in dishonest behavior allows further dishonest behavior in a subsequent task (Experiment 5).

      Download working paper: http://ssrn.com/abstract=2563196

      Measurement Errors of Expected-Return Proxies and the Implied Cost of Capital

      By: Wang, Charles C.Y.

      Abstract—Despite their popularity as proxies of expected returns, the implied cost of capital's (ICC) measurement error properties are relatively unknown. Through an in-depth analysis of a popular implementation of ICCs by Gebhardt, Lee, and Swaminathan (2001) (GLS), I show that ICC measurement errors can be not only nonrandom and persistent but can also be associated with firms' risk or growth characteristics, implying that ICC regressions are likely confounded by spurious correlations. Moreover, I document that biases in GLS' measurement errors are driven not only by analysts' systematic forecast errors but also by functional form assumptions, so that correcting for the former-a primary focus of the ICC literature-is insufficient by itself. From these findings, I argue that the choice between ICCs and realized returns involves a tradeoff between bias and efficiency and suggest that realized returns should be used in conjunction with ICCs to make more robust inferences about expected returns.

      Download working paper: http://ssrn.com/abstract=1967706

      The Challenges and Enhancing Opportunities of Global Project Management: Evidence from Chinese and Dutch Cross-Cultural Project Management

      By: Zhang, Ying, Christopher Marquis, Sergey Filippov, Henk-Jan Haasnoot, and Martijn van der Steen

      Abstract—This study investigates the role of national and organizational culture in day-to-day activities of multinational project teams, specifically focusing on differences between Chinese and Dutch project managers. We rely on fieldwork observation and interviews with representatives from a diverse set of organizations in China and the Netherlands. Analyses focus on the impact of cultural differences on five project management processes: (1) project planning, (2) cost and quality management, (3) risk management, (4) scope management and project promises, and (5) communication. Although there are many differences observed in these five processes, research subjects report no significant impact of cross-cultural collaboration on project performance. We conclude that cross-cultural project teams can provide critical elements for an effective combination of different project management practices involving people from various national and organizational cultures, who are enriched by different experiences and management theories, and have a mix of skills. This study provides insights for those who work cross culturally (especially between western and eastern contexts) and is also a contribution to both the project management and cross-cultural management literatures.

      Download working paper: http://ssrn.com/abstract=2562376

       

      Cases & Course Materials

      • Harvard Business School Case 515-006

      HN Agri Serve: Growing Prosperity

      In 2014, Khuram Mir, CEO of HN Agri Serve, an innovative apple orchard company in the Kashmir region of Northern India, wonders about the best growth strategy for his company.

      Purchase this case:
      https://cb.hbsp.harvard.edu/cbmp/product/515006-PDF-ENG

      • Harvard Business School Case 815-084

      Private Equity Transforming TDC

      No abstract available.

      Purchase this case:
      https://cb.hbsp.harvard.edu/cbmp/product/815084-PDF-ENG

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