First Look

June 16, 2009

Companies increasingly rely on global collaboration, and—in a perfect world, at least—a common language would make communicating easier for teams distributed across national boundaries. But when everyone does not feel proficient or comfortable, a lingua franca can pose a barrier, too. New research conducted in a global software development company has found that even native speakers of the agreed-upon lingua franca may struggle to communicate effectively, impeding collaboration. As HBS professor Tsedal Beyene and colleagues describe in "Walking Through Jelly: Language Proficiency, Emotions, and Disrupted Collaboration in Global Work" [PDF], "unevenness in proficiency not only disrupted information sharing, but often triggered a cycle of negative emotional responses that disrupted collaborative relationships on these teams." They propose a model that describes how such an organizational policy about a lingua franca can go awry. But managers can take constructive action to overcome the language barriers: "Building awareness of the experiences of coworkers with different language backgrounds and proficiencies and empathizing with those experiences can circumvent the negative cycle and, we believe, is an important step in ameliorating the emotional burden felt on all sides of this issue." In cases, faculty work this week explores how the communications service provider China Mobile, with a penetration rate of 100 percent in some cities, could attract rural users. And "Global Health Partner: Obesity Care," set in Sweden, demonstrates the value of specialization in health care for patients and service providers.
— Martha Lagace

Working Papers

Open to Negotiation: Phenomenological Assumptions and Knowledge Dissemination (revised)


Phenomenological assumptions—assumptions about the fundamental qualities of the phenomenon being studied and how it relates to the environment in which it occurs—affect the dissemination of knowledge from subfields to the broader field of study. Micro-process research in organizational studies rests on implicit phenomenological assumptions that vary in the extent to which micro-processes are viewed as parts of larger systems. We suggest that phenomenological assumptions linking micro-processes to organizational contexts highlight the relevance of micro-process research findings to broader organizational questions, and therefore increase the likelihood that the findings will disseminate to the larger field of organizational research. We test this assertion by analyzing studies of negotiation published in top peer-reviewed management, psychology, sociology, and industrial relations journals from 1990 to 2005. Our findings reveal a continuum of open-systems to closed-systems phenomenological assumptions in negotiation research. Analysis of the citation rates of the articles in our data set by non-negotiation organizational research indicates that more open systems assumptions increase the likelihood that a negotiation article will be cited in organizational studies, after controlling for other, previously identified effects on citation rates. Our findings suggest that subfields can increase the impact they have on the broader intellectual discourse by situating their phenomena in rich contexts that illuminate the connections between their findings and questions of interest to the broader field.

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Walking Through Jelly: Language Proficiency, Emotions, and Disrupted Collaboration in Global Work


In an ethnographic study comprised of interviews and concurrent observations of 145 globally distributed members of nine project teams of an organization, we found that uneven proficiency in English, the lingua franca, disrupted collaboration for both native and non-native speakers. Although all team members spoke English, different levels of fluency contributed to tensions on these teams. As non-native English speakers attempted to counter the apprehension they felt when having to speak English, and native English speakers fought against feeling excluded and devalued, a cycle of negative emotion ensued and disrupted interpersonal relationships on these teams. We describe in detail how emotions and actions evolved recursively as coworkers sought to relieve themselves of negative emotions prompted by the lingua franca mandate and inadvertently behaved in ways that triggered negative responses in distant coworkers. Our results add to the scant literature on the role of emotions in collaborative relationships in organizations and suggest that organizational policies can set in motion a cycle of negative emotions that interfere with collaborative work.

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Worse but Equal: The Influence of Social Categories on Resource Allocations (revised)


This paper explores the influence of social categories on the perceived trade-off between relatively bad but equal distribution of resources between two parties and profit maximizing, yet asymmetric payoffs. Studies 1 and 2 showed that people prefer to maximize profits when interacting within their social category, but chose suboptimal individual and joint profits when interacting across social categories. Study 3 demonstrated that outside observers, who were not members of the focal social categories, were also less likely to maximize profits when resources were distributed across social category lines. Study 4 showed that the transaction utility of maximizing profits required greater compensation when resources were distributed across, in contrast to within, social categories. We discuss the ethical implications of these decision-making biases in the context of organizations.

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What Should GAAP Look Like?


We develop an economic theory of GAAP under the assumption that GAAP's objective is to facilitate efficient capital allocation within an economy. The theory predicts that GAAP, as shaped by the economic forces of demand for and supply of financial information would focus on performance measurement and control through the income statement and balance sheet. In addition, the theory allows us to compare and contrast extant GAAP, as produced in a regulated setting, with a GAAP that might arise endogenously as a result of market forces. We conclude that verifiability and conservatism, while detracting accounting from a valuation objective, are critical features of an economic GAAP. We recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets, but caution against expanding fair values to areas such as intangibles where their opportunistic use is predictable. We conclude that the convergence project between the FASB and IASB should be dismantled and that competition between the two bodies would be the most practical means of achieving an economic GAAP.



Enterprise 2.0: New Collaborative Tools for Your Organization's Toughest Challenges


Web 2.0 is the portion of the Internet that's interactively produced by many people; it includes Wikipedia, Facebook, Twitter, Delicious, and prediction markets. In just a few years, Web 2.0 communities have demonstrated astonishing levels of innovation, knowledge accumulation, collaboration, and collective intelligence. Now, leading organizations are bringing the Web's novel tools and philosophies inside, creating Enterprise 2.0. In this book, Andrew McAfee shows how they're doing this, and why it's benefiting them. Enterprise 2.0 makes clear that the new technologies are good for much more than just socializing—when properly applied, they help businesses solve pressing problems, capture dispersed and fast-changing knowledge, highlight and leverage expertise, generate and refine ideas, and harness the wisdom of crowds. Most organizations, however, don't find it easy or natural to use these new tools initially. And executives see many possible pitfalls associated with them. Enterprise 2.0 explores these concerns and shows how business leaders can overcome them.
McAfee brings together case studies and examples with key concepts from economics, sociology, computer science, consumer psychology, and management studies and presents them all in a clear, accessible, and entertaining style. Enterprise 2.0 is a must-have resource for all C-suite executives seeking to make technology decisions that are simultaneously powerful, popular, and pragmatic.

Authority versus Persuasion


This paper studies a manager's trade-off between using persuasion and using interpersonal authority to get an employee to "do the right thing" from the manager's perspective (when the manager and employee disagree on the right course of action). It shows that persuasion and authority are complements at low levels of effectiveness but substitutes at high levels. Furthermore, the manager will rely more on persuasion when employee motivation is more important for the execution of the project, when the employee has strong intrinsic or extrinsic incentives, and, for a wide range of settings, when the manager is more confident about the right course of action.


Cases & Course Materials

China Mobile's Rural Communications Strategy

Harvard Business School Case 309-034

China Mobile was the world's leading mobile communications service provider with over 400 million customers. In some cities, its penetration rate was over 100%. With such huge successes, Chairman Wang Jianzhou was exploring ways to expand its customer base. Nearly saturated in the cities, China Mobile needed to broaden its base of subscribers. Wang believed that further investment in China's rural villages was a key strategy that would help the fuel growth for the future. Already deeply invested in the rural areas based on the company's participation in the government-mandated "Connect Every Village" project, China Mobile took advantage of this foundation and created new products and value-added services in order to make its mobile phone network more valuable to the lifestyles of China's rural population. However, the cost of connecting remote locations was high and was often not offset by subscriber fees or usage rates of these populations. Would this investment be relegated to a socially responsible project or would it pay off for China Mobile in the future?

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Enel: Power, Russia, and Global Markets

Harvard Business School Case 709-046

Although the global trend toward liberalization of electric utilities forced Enel, the largest power company in Italy, to give up some of its assets in its home base, it also opened up many opportunities abroad, including in Russia, one of the largest electricity markets in the world. The case outlines Enel's internationalization strategy and then focuses on one piece of the company's strategic puzzle of global expansion: acquisition of major power-generation assets in the course of the break-up of RAO UES, the Russian electricity monopoly. The case highlights the decision-making process by the company executives in the context of possible political risks to foreign investment in Russian strategic industries and economic risks to investment in the yet-to-be-formed liberalized and deregulated electricity market in Russia.

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Global Health Partner: Obesity Care

Harvard Business School Case 709-494

Global Health Partner (GHP) was founded in 2006 as a privately owned health care provider in Sweden serving both public and private paying patients. In contrast to most providers in the country, GHP organized around specific service lines where it saw the potential to provide the most value. This case details the GHP approach to both Spine Care and Obesity Care demonstrating the power of specialization for quality improvement as a basis for competitive advantage. Students will examine the organization of integrated multidisciplinary care, the impact of volume on learning and efficiency, and the importance of demonstrating quality through outcomes reporting. The case also provides a window into the Swedish Health Care System.

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The Newspaper Industry in Crisis

Harvard Business School Note 709-463

This note is a primer on the newspaper industry, which has been in decline in the U.S. and Western Europe. The 19th century business model whereby news and editorial content was packaged and delivered to homes daily and paid for by national advertisers has been overturned by the Internet and the corresponding immediate access to global information. The note covers the history of newspapers, industry economics, current news consumption trends, the response of the newspapers to the threat of the Internet, and vignettes highlighting newspaper business models throughout the world.

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