First Look

May 18, 2010

How should the most appropriate employers and job candidates find each other? A retooling of the job market for fledgling Ph.D. economists could offer valuable insight for other professional categories, too, from managers to engineers. As HBS professors Peter A. Coles and Alvin E. Roth and colleagues describe in their working paper, "The Job Market for New Economists: A Market Design Perspective," new economists typically cast the net wide, mailing out applications to as many as 80 potential employers. Overwhelmed employers are then prone to hedge their bets, placing offers to candidates who are not necessarily the best, but who are deemed most likely to accept the offer. The result: missed opportunities on both sides. To improve the market, the researchers outline practical mechanisms to help the matching process at different stages of the job-search timetable. They also describe new ways to communicate job-market information. Perhaps the lessons learned among economists could in time level the playing field for other professions, too. This week in cases, "Monsanto: Helping Farmers Feed the World" sheds light on the role of biotechnology in food production and the efforts of a new CEO to revitalize the company after consumer resistance and missteps by previous management.
— Martha Lagace


Technology Manager's Journey: An Extended Narrative Approach to Educating Technical Leaders


Technology management poses particular challenges for educators because it requires a facility with different kinds of knowledge and wide-ranging learning abilities. We report on the development and delivery of an information technology (IT) management course designed to address these challenges. Our approach is built around a narrative, the "IVK extended case series," a fictitious but reality-based story about a newly appointed, not technically trained chief information officer (CIO) in his first year on the job. We designed the course around a narrative and composed the narrative in a specific way to achieve two key objectives. First, this format allowed us to combine the active student orientation typical of case-based approaches with the systematic construction of cumulative theoretical frameworks more characteristic of lecture-based methods. Second, basing the narrative on the monomyth—a literary pattern common to important narratives around the world that encourages students to more fully inhabit the story's hero—leads to fuller engagement and more active learning. We report results using this approach with undergraduate and graduate students in two universities located in different countries, with executives at a major multinational corporation, and with participants in an open-enrollment program at a major business school. Student course feedback and a follow-up survey administered about one year after the course suggest that the extended narrative approach mostly achieves its design objectives. We suggest that the approach might be used more widely in teaching technology management, particularly with "digital natives," who have come of age in an environment crowded with engaging approaches to communication and entertainment competing for their attention.

Job Market for New Economists: A Market Design Perspective


This paper provides an overview of the market for new Ph.D. economists. It describes the role of the American Economic Association (AEA) in the market and focuses in particular on two mechanisms adopted in recent years at the suggestion of our committee. First, job market applicants now have a signaling service to send an expression of special interest to up to two employers prior to interviews at the January Allied Social Science Associations (ASSA) meetings. Second, the AEA now invites candidates who are still on the market, and employers whose positions are still vacant, to participate in a web-based "scramble" to reduce search costs and thicken the late part of the job market. We present statistics on the activity in these market mechanisms and present survey evidence that both mechanisms have facilitated matches. The paper concludes by discussing the emergence of platforms for transmitting job market information.

The Pay Problem

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Working Papers

Men as Cultural Ideals: How Culture Shapes Gender Stereotypes


Three studies demonstrate how culture shapes the contents of gender stereotypes, such that men are perceived as possessing more of whatever traits are culturally valued. In Study 1, Americans rated men as less interdependent than women; Koreans, however, showed the opposite pattern, rating men as more interdependent than women, deviating from the "universal" gender stereotype of male independence. In Study 2, bi-cultural Korean American participants rated men as less interdependent if they completed a survey in English, but as more interdependent if they completed the survey in Korean, demonstrating how cultural frames influence the contents of gender stereotypes. In Study 3, American college students rated a male student as higher on whichever trait—ambitiousness or sociability—they were told was the most important cultural value at their university, establishing that cultural values causally impact the contents of gender stereotypes.

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Characteristic Timing


We use differences between the attributes of stock issuers and repurchasers to forecast characteristic-related stock returns. For example, we show that large firms underperform following years when issuing firms are large relative to repurchasing firms. Our approach is useful for forecasting returns to portfolios based on book-to-market (HML), size (SMB), price, distress, payout policy, profitability, and industry. We consider interpretations of these results based on both time-varying risk premia and mispricing. Our results are primarily consistent with the view that firms issue and repurchase shares to exploit time-varying characteristic mispricing.

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Unraveling Results from Comparable Demand and Supply: An Experimental Investigation


Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high-quality applicants.

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Cases & Course Materials

Monsanto: Helping Farmers Feed the World

David E. Bell, Carin-Isabel Knoop, and Mary Shelman
Harvard Business School Case 510-025

Monsanto has led the effort to bring biotechnology to bear on food production. Through some management missteps and consumer resistance the company had difficulties in its early years. But since Hugh Grant became CEO the picture has brightened with widespread adoption of the company's products. This case focuses on the company's product pipeline and the galvanizing effect of the CEO's promise to substantially improve global food production by 2030.

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Life Journey Profile: Amee Chande

Bhaskar Chakravorti and Shirley M. Spence
Harvard Business School Case 810-110

Examine the life journey of an HBS 2002 alum, in her own words, and her perspective on success.

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Life Journey Profile: Mark Goldweitz

Bhaskar Chakravorti and Shirley M. Spence
Harvard Business School Case 810-112

Examine the life journey of an HBS 1969 alum, in his own words, and his perspective on success.

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Greenbriar Growth Partners and Microsurgery Devices

Nabil N. El-Hage and Kristin Meyer
Harvard Business School Case 310-060

Greenbriar Growth Partners (GGP), a venture capital (VC) firm, has been an investor in Microsurgery Devices (MSD) for four-plus years and has come into conflict with the company's founder. Should the Board's nominating committee re-nominate the VC investor, and should the board go along with the VC's push for a stock buy-back in the midst of the financial crisis, and so soon after the company's IPO?

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Tremblant Capital Group

Robin Greenwood
Harvard Business School Case 210-071

Brett Barakett, CEO and founder of Tremblant Capital Group, a New York-based hedge fund, must decide what to do with his fund's position in Green Mountain Coffee Roasters, which has dropped in value by more than 40% in recent months. Tremblant is a hedge fund that specializes in forecasting consumer behavioral change and capitalizes on the disconnect between stock prices and consumer behavior. In the case of Green Mountain Coffee, many other sophisticated investors have taken short positions in the stock, leading Barakett to question whether his fund had the right trade thesis.

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Lehman Brothers

Tom Nicholas and David Chen
Harvard Business School Case 810-106

: In 2008, the U.S. financial system was in a state of crisis and Lehman Brothers went from a major Wall Street investment bank to an insolvent institution. It was a swift end for a firm that had its beginnings over 150 years prior. What would be the firm's legacy? And how, if at all, had its activities changed the course of American history?

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Elie Ofek and Peter Wickersham
Harvard Business School Case 510-105

The NFL faces a decision on how to continue efforts to grow its fanbase in the U.K. The decision needs to take into account lessons learned from previous NFL activities in Europe, market research on the U.K. sports fan, and the implications of any move on the U.S. fan. Moreover, the decision should be couched within the broader context of the NFL's goal to expand internationally. Alistair Kirkwood, head of NFL U.K., and Chris Parsons, VP of NFL International, must propose a course of action that the London-based team can both execute and that will receive the approval of the NFL's commissioner and owners.

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Toward Golden Pond (A)

Nicolas P. Retsinas, G.A. Donovan, Nancy Dai, and Justin Ginsburgh
Harvard Business School Case 210-045

The Rong-D companies must decide whether to build a luxury senior housing development in Chengdu, China. Demographics are very encouraging for this new product type, but there are numerous cultural, market, financial, and political risks that they must assess before moving forward.

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Zeynep Ton and Simon Harrow
Harvard Business School Case 610-089

This case presents the predicament of a company trying to do right by its customers and its employees as the economic crisis of 2008 hits home. Fifteen years earlier, this Spanish supermarket chain had adopted its own version of total quality management, called the Total Quality Model, switching from the industry's traditional high-low pricing to "always low prices" and continuous improvement. These changes called for a well-trained, empowered, and enthusiastically engaged workforce dedicated to providing the best products and service to their customers, who were always and seriously referred to as "the Bosses." The Total Quality Model had been a success in terms of company growth and profitability, sustained by the success of Mercadona's unusually high investment in employee training and satisfaction. Nevertheless, when sales growth slowed down in 2008, CEO Juan Roig concluded that Mercadona had let its customers down by not keeping prices low enough for such hard times. Mercadona set about lowering its prices, reducing product variety, and lowering its financial targets for 2009. Of the 9,200 SKUs in an average store, the company decided to eliminate 1,000. But Roig still had to decide what to do about employee bonuses. Since Mercadona did not meet its 2008 targets, the company policy was that no one—not even top management—would get a bonus. But Roig knew that his employees worked hard and well in 2008 and could not be held totally responsible for the downturn or for management's failure to react quickly enough.

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