First Look

July 29, 2008

Which groups are most likely to communicate with others in a large organization, regardless of social-and physical-boundaries? Turns out that women, mid- to high-level executives, and members of the executive management, sales, and marketing functions are those most likely to build bridges, according to new research by Harvard Business School's Adam Kleinbaum, Toby Stuart, and Michael Tushman. The scholars base their findings on an analysis of millions of e-mail messages, e-calendar meetings, and teleconferences in a geographically dispersed, multiunit enterprise. "We measure three general types of boundaries: organizational boundaries (strategic business unit and function memberships), spatial boundaries (office locations and interoffice distances), and social categories (gender, tenure within the firm)," they write. Their working paper, "Communication (and Coordination?) in a Modern, Complex Organization," is available for download as a PDF. Other working papers for download this week look at the impact of political pressure on the day-to-day administration of India, and at the significant contributions of U.S. Chinese and Indian scientists and engineers to innovation, particularly in high tech.
— Martha Lagace

Working Papers

Traveling Agents: Political Change and Bureaucratic Turnover in India


We develop a framework to examine how politicians with short-term electoral pressures control bureaucrats with long-term career concerns. Empirical analysis using a unique data set on the career histories of Indian bureaucrats supports the key predictions of our framework. We find that politicians use frequent reassignments (transfers) across posts of varying importance as a means of control. High-skilled bureaucrats face less frequent transfers and a lower variability in the importance of their posts. There are alternative routes to career success: officers of higher initial ability are more likely to invest in developing expertise, but officers who belong to the same caste as the politician are also able to obtain important posts. Bureaucrats are less likely to be transferred if politicians have alternative means of control through subordinate politicians. Districts with higher rates of politically induced bureaucrat transfers are somewhat less successful in poverty reduction over the long run.

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The Agglomeration of U.S. Ethnic Inventors


The ethnic composition of U.S. inventors is undergoing a significant transformation-with deep impacts for the overall agglomeration of U.S. innovation. This study applies an ethnic-name database to individual U.S. patent records to explore these trends with greater detail. The contributions of Chinese and Indian scientists and engineers to U.S. technology formation increase dramatically in the 1990s. At the same time, these ethnic inventors became more spatially concentrated across U.S. cities. The combination of these two factors helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. The heightened ethnic agglomeration is particularly evident in industry patents for high-tech sectors, and similar trends are not found in institutions constrained from agglomerating (e.g., universities, government).

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Communication (and Coordination?) in a Modern, Complex Organization


This is a descriptive study of the structure of communications in a modern organization. We analyze a dataset with millions of electronic mail messages, calendar meetings and teleconferences for many thousands of employees of a single, multidivisional firm during a three-month period in calendar 2006. The basic question we explore asks, what is the role of observable (to us) boundaries between individuals in structuring communications inside the firm? We measure three general types of boundaries: organizational boundaries (strategic business unit and function memberships), spatial boundaries (office locations and inter-office distances), and social categories (gender, tenure within the firm). In dyad-level models of the probability that pairs of individuals communicate, we find very large effects of formal organization structure and spatial collocation on the rate of communication. Homophily effects based on sociodemographic categories are much weaker. In individual-level regressions of engagement in category-spanning communication patterns, we find that women, mid- to high-level executives, and members of the executive management, sales and marketing functions are most likely to participate in cross-group communications. In effect, these individuals bridge the lacunae between distant groups in the company's social structure.

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How Is Foreign Aid Spent? Evidence from a Natural Experiment (revised)


We use oil price fluctuations to construct a new instrument to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate demand, the national accounts, and the balance of payments. Aid has no measurable impact on prices or economic growth, though it does affect most components of the national income accounts. We find that much aid is consumed, primarily in the form of imported non-capital goods. Aid substitutes for domestic savings, has no effect on the financial account, and leads to unaccounted capital flight.

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Cases & Course Materials

Brigham and Women's Hospital: Shapiro Cardiovascular Center

Harvard Business School Case 608-175

Considers the situation facing Gary Gottlieb, president of Brigham and Women's Hospital (BWH), prior to the opening of BWH's integrated cardiovascular center. This case allows students to develop an appreciation of the strategic, financial, organizational, clinical, and physical aspects of integrating health care delivery around specific categories of disease. It provides an opportunity to evaluate BWH's approach to integration along all of these dimensions and to identify the nature of the tradeoffs that hospitals—specifically, academic medical centers—face as they attempt to create disease-specific models of integrated care. Finally, students have the opportunity to evaluate the degree to which integrated models of care can be developed within academic medical centers.

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Facebook Platform

Harvard Business School Case 808-128

In early 2008, the online social networking site Facebook faced a competitive challenge from Google as well as questions about how Facebook could monetize its surging traffic. In May 2007, Facebook had launched Facebook Platform, which enabled third-party developers to build applications for its site. In late 2007, Google responded by organizing the OpenSocial Initiative. OpenSocial provided an application programming interface (API) that was adapted by many of Facebook's social networking rivals, including MySpace and LinkedIn. Relying on a single API allowed developers to avoid the cost of creating different versions of their applications for each social networking site. Facebook's managers had to decide how to respond to OpenSocial. Should they join the initiative or keep Facebook Platform proprietary and seek further differentiation?

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Linden Lab: Opening Second Life

Harvard Business School Case 808-114

In early 2008, managers in Linden Lab, creator of the virtual world Second Life, faced decisions about the company's strategy. Despite profound initial skepticism about demand for a user-generated virtual world that was not a traditional game, Second Life had achieved profitability and strong growth. However, growth had strained the company's infrastructure, resulting in frequent software crashes. Software ease-of-use was also a serious problem. As a result, 90% of new users abandoned Second Life after only a brief trial. Management was considering whether marketing partnerships and open sourcing its software might relieve strains and facilitate future growth. Linden Lab was also debating whether and how to allow interoperability between Second Life and other virtual worlds.

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Malaysia: Halfway to 2020

Harvard Business School Case 707-002

This country case on Malaysia extends forward by seven years the case "Malaysia: Capital and Control" (702-040). It is based on Malaysia's ninth plan, which took effect in 2006. The ninth plan proposed five thrusts—moving the economy to higher value-added goods and services, raising the capacity for knowledge, addressing socioeconomic inequalities, improving the quality of life, and strengthening institutions and the civil service—to achieve 6% growth annually. All of this is to achieve "Vision 2020," a long-range plan for becoming developed. Considers the difficulties Malaysia faces, stuck between China and India on the low (value-added) side, and Korea, Taiwan, and Singapore on the high (value-added) end.

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Patient Flow at Meldon Hospital

Harvard Business School Case 608-171

Meldon Hospital challenged a team of physicians to improve patient flow from the Emergency Department to Intensive Care Units (ICUs). One of the team members, Thornton Burgess, Director of the Surgical Intensive Care Unit (SICU) at Meldon Hospital, encountered workarounds by two physicians attempting to transfer their patients to the SICU because the other ICUs were full. Reflecting on the wasted effort and confusion caused by the workarounds, Burgess sent an email outlining the situation to the team. His email generated a negative backlash and chain of defensive emails from involved staff who felt criticized.

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Peoplepower, Inc.: The Republic of the Philippines

Harvard Business School Case 706-052

In 2006, the Philippines faces a difficult choice. Japan has offered the country a trade agreement that includes access to the Japanese labor market for Philippine nurses and other professionals. The same trade agreement, however, means opening the country's manufacturing enterprises to Japanese exports, which is bitterly opposed by some of the nation's largest foreign investors. President Gloria Arroyo—embattled by coup attempts and political scandals—must decide whether to advance the nation's three-decade-old strategy of encouraging the export of its labor resources or whether to attenuate that strategy to meet the demands of large foreign investors.

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Professors Sven Larson and Kenneth Carpenter (A)

Harvard Business School Case 908-408

Professor Kenneth Carpenter has received word that he has inadvertently offended one of his students. He is pondering a possible response.

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The Rong Family: A Chinese Business History

Harvard Business School Note 308-066

Provides the complex historical background to understanding the development of family businesses in China from the late 19th century to the present. Using the example of the Rong family, China's most prominent industrialist family in pre-1949 China, analyzes the organizational structure and transformation of Chinese family firms in terms of managerial hierarchies, kinship alliances, and local networks. Emphasizes the response of the family business to major political crises, demonstrates how they dealt with the transition to a socialist government in 1949, and interprets the success of overseas Chinese family business as well as the revival of family business networks in the wake of China's economic reforms.

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System on a Chip 2008: Global Unichip Corp.

Harvard Business School Case 608-159

Though much of the semiconductor industry has shifted to a horizontal model, complexity driven by technological evolution is driving a shift in the perceived boundaries in the value chain. Global Unichip sees itself as a "virtual integrated device manufacturer," a throwback to the vertically integrated model that fell out of favor for most chips. The case offers an opportunity to examine a highly modular industry and the impact of technology shifts on those boundaries, with significant implications for the incumbents.

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Symyx Technologies, Inc.

Harvard Business School Case 608-152

Symyx is a science-based company spun out of Berkeley. Its unique materials technology has been exploited for 10 years, but the company needs a new business model. The company concept required the invention of hardware and software to do high throughput materials discovery, and a business partnership model to support the scientific and engineering development. The public company must now find new ways to grow, and Isy Goldwasser, a co-founder and new CEO, must lead the transition while maintaining unique scientific resources.

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Tad O'Malley: The Investment Conundrum

Harvard Business School Case 808-125

Tad O'Malley has just started as an associate with Empire Investment Group. He must evaluate three investment opportunities facing the big leveraged buyout firm. All are global, but each pertains to different offices and each deal has different strengths and weaknesses. Which should he recommend to the partners for additional resources and what does a recommendation mean for his career?

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Thomas J. Watson, IBM and Nazi Germany

Harvard Business School Case 807-133

Considers the strategy of U.S.-owned IBM, then a manufacturer of punch cards, in Nazi Germany before 1937. Opens with IBM CEO Thomas J. Watson meeting Adolf Hitler in his capacity as President of the International Chamber of Commerce. IBM had acquired a German company in 1922 and, like other American companies, found itself operating after 1933 in a country whose government violently suppressed political dissent and engaged in intimidation and discrimination against Jews. Explores the tensions between IBM's German affiliate and its parent and provides an opportunity to explore the options and responsibilities of multinationals with investments in politically reprehensible regimes.

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Our Communities, Our Homes: Pathways to Housing and Homeownership in America's Cities and States


No abstract is available at this time.

Book link: our_communities_our_homes.html

Revisiting Rental Housing: Policies, Programs, and Priorities

Publisher's Abstract

Rental housing is increasingly recognized as a vital housing option in the United States. Yet government policies and programs continue to grapple with widespread problems, including affordability, distressed urban neighborhoods, poor-quality housing stock, concentrated poverty, and exposure to health hazards in the home. These challenges can be costly and difficult to address. The time is ripe for fresh, authoritative analysis of this important yet often overlooked sector. In Revisiting Rental Housing, leading housing researchers build on decades of experience, research, and evaluation to inform our understanding of rental housing challenges and what to do about them. The authors look at contributing factors and problems generated by the operation of rental markets, and assess whether existing policies and programs have helped and what lessons have been learned. Finally, the authors suggest new directions for housing policy, including the integration of best practices from past lessons into existing programs and innovations for large-scale, long-term market and policy solutions that can get to the root of rental housing challenges.

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Managing Corporate Social Networks


Idea brokers are good at sparking cross-divisional innovation through their broad social networks. But implementation—marshaling resources and getting various stakeholders on board—requires dense webs of strong interpersonal relationships.