Publications
- Forthcoming
- Berrett-Koehler Publishers
What Great Service Leaders Know and Do: Creating Breakthroughs in Service Firms
Abstract—Based on decades of collective field experiences, the authors present anecdotal evidence in support of eight things that great service leaders know and do. Great service leaders know that (1) leading a breakthrough service is different, and they take steps to ensure repeated memorable service encounters; (2) customers buy results and excellent experiences, not services or products, so leaders focus on the few things that produce results and experiences for the right customers; (3) the best service operating strategies don't require tradeoffs, so leaders foster "both/and" thinking in designing winning operating strategies; (4) great service starts with the frontline employee, and as a result leaders hire for attitude and train for skills; (5) effective operating strategies have to create value for employees, customers and investors, so leaders ensure the achievement of the leverage and edge that produce win, win, win results-the "service trifecta"; (6) the best uses of technology and other support systems create frontline service heroes and heroines, so leaders use technology to elevate the most important and eliminate the worst service jobs; (7) satisfying customers is not enough, so leaders take steps to develop a core of customers who are "owners"; and (8) knowing that their current beliefs about the future of services are wrong, great service leaders build agile service organizations that learn, innovate, and adapt. The book explores the ideas and leadership needed to achieve breakthrough service.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=46138
- Forthcoming
- Accounting Review
An Analysis of Self-reported Anticorruption Efforts
Abstract—We use Transparency International's ratings of self-reported anticorruption efforts for 480 corporations to analyze factors underlying the ratings. Our tests examine whether these forms of disclosure reflect firms' real efforts to combat corruption or are cheap talk. We find that the ratings are related to enforcement and monitoring, country and industry corruption risk, and governance variables. Specifically, firms with high anticorruption ratings are domiciled in countries with low corruption risk ratings and strong anticorruption enforcement, operate in high corruption risk industries, have recently faced a corruption enforcement action, employ a Big Four audit firm, and have a higher percentage of independent directors. Controlling for these effects and other ratings determinants, we find that firms with lower residual ratings have higher subsequent citations in corruption news events. They also report higher future sales growth and show a negative relation between profitability change and sales growth in high corruption geographic segments, but not in low corruption segments. The net effect on valuation from sales growth and changes in profitability is close to zero. The findings are robust to a number of sensitivity tests, including analysis of a narrower set of self-reported anticorruption efforts for a larger sample over multiple years. Given this evidence, we conclude that, on average, firms' self-reported anticorruption efforts signal real efforts to combat corruption and are not merely cheap talk.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49292
- Forthcoming
- Strategic Management Journal
Monitoring Global Supply Chains
Abstract—Firms reliant on supply chains to manufacture their goods risk reputational harm if the working conditions in those factories are revealed to be dangerous, illegal, or otherwise problematic. While firms are increasingly relying on private-sector "social auditors" to assess factory conditions, little had been known about the accuracy of those assessments. We analyzed nearly 17,000 code-of-conduct audits conducted at nearly 6,000 suppliers around the world. We found that audits yield fewer violations when the audit team had been at that particular supplier before, when audit teams are less experienced or less trained, when audit teams are all male, and when the audits were paid for by the supplier instead of by the buyer. We describe implications for firms relying on social auditors and for auditing firms.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49303
Working Papers
Monetary Policy Drivers of Bond and Equity Risks
Abstract—How do monetary policy rules, monetary policy uncertainty, and macroeconomic shocks affect the risk properties of U.S. Treasury bonds? The exposure of U.S. Treasury bonds to the stock market has moved considerably over time. While it was slightly positive on average over the period 1960-2011, it was unusually high in the 1980s, and negative in the 2000s, a period during which Treasury bonds enabled investors to hedge macroeconomic risks. This paper develops a New Keynesian macroeconomic model with habit formation preferences that prices both bonds and stocks. The model attributes the increase in bond risks in the 1980s to a shift towards strongly anti-inflationary monetary policy, while the decrease in bond risks after 2000 is attributed to a renewed focus on output fluctuations and a shift from transitory to persistent monetary policy shocks. Endogenous responses of bond risk premia amplify these effects of monetary policy on bond risks.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=45672
Mums the Word! Cross-national Effects of Maternal Employment on Gender Inequalities at Work and at Home
Abstract—Our research considers how inequalities in the public and the private spheres are affected by childhood exposure to non-traditional gender role models at home. We test the association between being raised by an employed mother and adult men's and women's outcomes at work and at home. Our analyses rely on national level archival data from multiple sources and individual level survey data collected as part of the International Social Survey Programme in 2002 and 2012 from nationally representative samples of men and women in 24 countries in North and South America, Australia, Europe, Asia, and the Middle East. Adult daughters of employed mothers are more likely to be employed, more likely to hold supervisory responsibility if employed, work more hours, and earn marginally higher wages than women whose mothers were home full time. The effects on labor market outcomes are non-significant for men. Maternal employment is also associated with adult outcomes at home. Sons raised by an employed mother spend more time caring for family members than men whose mothers stayed home full time, and daughters raised by an employed mother spend less time on housework than women whose mothers stayed home full time. Our findings reveal the potential for non-traditional gender role models to gradually erode gender inequality in homes and labor markets.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49311
Customers and Investors: A Framework for Understanding Financial Institutions
Abstract—Financial institutions have both investors and customers. Investors, such as those who invest in stocks and bonds or private/public-sector guarantors of institutions, expect an appropriate risk-adjusted return in exchange for the financing and risk bearing that they provide. Customers of a financial intermediary, in contrast, provide financing in exchange for a specific set of services and do not want the fulfillment of these services to be contingent on the credit risk of the intermediary, even when they are not small, uninformed agents lacking in sophistication. This paper develops a framework that defines the roles of customers and investors in intermediaries and uses the framework to provide an economic foundation for the aversion to intermediary credit risk on the part of its customers. It further explores the implications of this customer-investor nexus for a host of issues related to how contracts between financial intermediaries and their customers are structured and how risks are shared between them, as well as the consequences of (unexpected) deviations from the ex-ante optimal contractual arrangement. We show that the optimality of insulating the customer from the credit risk of the intermediary explains various contractual arrangements, institutions, and regulatory practices observed in practice. Moreover, customers and investors are often intertwined in practice, and so this intertwining provides insights into the adoption of "too-big-to-fail" policies and bailouts by regulators in general. Finally, the approach taken here shows that financial crises may be a consequence of observed but unexpected deviations from the ex-ante optimal risk-sharing arrangement between financial intermediaries and their customers.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49300
Cases & Course Materials
- Harvard Business School Case 515-095
Evans Food
In April 2014, Hector Guerra (GMP 16) was discussing his company's dilemma with his living group of the General Management Program (GMP) at the Harvard Business School. Guerra was vice president of Operations at Evans Food, a $100 million company, which produced pork rinds-salty snacks made out of pork skin-sold at some of the largest U.S. retailers such as HEB, Meijer, ALDI, and Wal-Mart. In the last few years, the cost of pork skin had increased dramatically, but Evans Food's selling price to its customers had not kept pace with the increase in raw material costs. The company was losing money on some of the largest accounts, but it seemed difficult, if not impossible, to seek price increases from multibillion-dollar retailers.
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- Harvard Business School Case 515-097
Philips Healthcare Latin America
On a beautiful sunny afternoon in October 2013, Daniel Mazon (GMP 15), decided to take some time out of his busy schedule at the General Management Program (GMP) at the Harvard Business School to reflect on his company's situation. Mazon was the vice president and general manager of the Imaging Systems Division of Philips Healthcare in Latin America (Latam). For three consecutive years, Philips Ultrasound business was losing market share in Latam. Mazon was concerned that sales representatives, who were responsible for a large portfolio of imaging products, were not giving enough attention to Ultrasound. He was wondering if change in the size and compensation structure of the sales force would solve this problem or if he would need to take the more radical approach of creating a dedicated sales force for Ultrasound. This choice was complicated by the matrix organization structure of Philips where regional general managers (GMs) had profit and loss (P&L) responsibility for the entire portfolio.
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- Harvard Business School Case 115-028
Guiding Professional Accountants to Do the Right Thing
The Ethics Advisory Committee of the Institute of Chartered Accountants in England and Wales (ICAEW) provides training and support for member Chartered Accountants to help them deal with difficult professional situations. Members can seek help through call centers and in-person meetings with accounting experts in the field to discuss how to best handle difficult situations. In addition, the Ethics Advisory Committee meets regularly to identify new issues that raise questions for professional standards. This case examines professional standards for ICAEW Chartered Accountants and a number of challenging ethical situations that members have faced.
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https://cb.hbsp.harvard.edu/cbmp/product/115028-PDF-ENG
- Harvard Business School Case 315-125
OdontoPrev (B)
No abstract available.
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- Harvard Business School Case 315-107
Advanced Leadership Field Perspectives: Shanghai
No abstract available.
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- Harvard Business School Case 815-124
Yale University Investments Office: February 2015
David Swensen and the Investments Office staff must decide whether to continue to allocate the bulk of the university's endowment to illiquid investments-hedge funds, private equity, real estate-given the impact of the recent market turmoil. The case explores the risks and benefits of a different asset allocation strategy and also considers how to classify some of the different assets. It highlights the issues around allocations across different subclasses, e.g., between venture capital, hedge funds, and real assets.
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- Harvard Business School Case 915-024
Behavioural Insights Team (A)
No abstract available.
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https://cb.hbsp.harvard.edu/cbmp/product/915024-PDF-ENG
- Harvard Business School Case 215-057
Poseidon Carlsbad: Desalination and the San Diego County Water Authority
Extreme drought conditions in California have significant impacts on the ability of the San Diego County Water Authority to provide adequate water for current users. Water shortfalls also could curtail the economic development of one of the fastest growing regions in America. Seawater desalination is expensive and energy intensive, but it could be a partial solution. Brian Brady and other members of the Authority need to vote for or against a financing and construction plan that includes a 30-year water purchase agreement with Poseidon Resources (Channelside) LP, a private company. In the early years the cost of water would be almost double the average unit cost the Authority pays at the time of the decision. Is this proposal good policy in the long run to lock in supply and price for 7% of the region's water needs? Is the private finance and provision of public infrastructure appropriate for a basic good like water? The case also investigates the allocation of water supply and usage in California and the environmental impacts of running this plant on electricity drawn from the local utility, which in San Diego County is about 65% from fossil sources. The case is intended to be used as an introduction to water policy, seawater desalination, bond finance and cash flow waterfalls, infrastructure as a foundation for economic development, and risk allocation in public-private partnerships.
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- Harvard Business School Case 815-097
Discover Capital
"Discover Capital" provides an in-depth look at a first time search fund run by the tenacious Kelly Quann Bianucci. It provides background information about search funds and follows Kelly as she successfully raises her over-subscribed fund and begins the search process. The following useful information is included for students who are considering starting a search fund: offering memoranda, fundraising techniques, staffing, screening techniques, marketing materials and processes, letters of intent, and deal evaluation criteria. The case also looks at the potential fund returns from the perspective of an investor.
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- Harvard Business School Case 115-042
Shanghai: GDP Apostasy
The case describes Shanghai's decision to abandon growth of Gross Domestic Product (GDP) as its primary metric of measuring success. Within this context, the case presents the historical roots of GDP and how the measure is calculated. Moreover, the case discusses the prominence of GDP as a measure of economic success. After a discussion of China's and Shanghai's use of GDP growth targets, the case discusses Shanghai's past successes and failures. Specifically, the case describes the enormous economic growth that Shanghai has experienced alongside significant economic, social, and environmental failures such as the inefficient use of resources, pollution, and growing inequality. The case concludes with the decision to abandon GDP growth as a measure of success and opens questions about what this means for Shanghai and China. Moreover, the case raises the question of what alternative metrics measuring success might look like.
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https://cb.hbsp.harvard.edu/cbmp/product/115042-PDF-ENG
- Harvard Business School Case 715-453
Coffee Wars in India: Starbucks 2015
This case examines the progress made by Starbucks in its first two years of operation in India.
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https://cb.hbsp.harvard.edu/cbmp/product/715453-PDF-ENG