First Look

May 29, 2007

Poor negotiation skills and territoriality, the tendency to favor one's own group over others, are common enough barriers in multi-divisional organizations. A new working paper for download outlines the symptoms of us-versus-them malaise and offers smart recommendations for treating them, such as: Link group interests to higher goals; "frame collaboration as the solution to group needs"; and "enable and encourage effective negotiation behaviors." "Leading and Creating Collaboration in Decentralized Organizations" is by doctoral students Heather M. Caruso and Todd Rogers with Professor Max Bazerman. Also for download, research on why consumers gravitate toward the extremes when presented with a variety of choices. That's not necessarily good for sellers, write Professor John Gourville and coauthor Dilip Soman. Also this week: case studies of Habitat for Humanity in Egypt and publisher Schibsted.
— Martha Lagace

Working Papers

Leading and Creating Collaboration in Decentralized Organizations

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Extremeness Seeking: When and Why Consumers Prefer the Extremes


Decision researchers have long been interested in behaviors that deviate from rational choice. Of these, the compromise effect has received considerable attention, with it repeatedly shown that the probability of choosing an item increases when that item is a middling, as opposed to extreme, alternative in a choice set. The term extremeness avoidance has been used to describe the reason underlying this phenomenon. In this research, we argue that extremeness avoidance behavior depends on assortment type, with consumers displaying extremeness avoidance for alignable assortments, but systematically and predictably displaying extremeness seeking for non-alignable assortments. Across three studies, we show the extremeness seeking effect, contrast it with extremeness avoidance, and explore its underlying cause.

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Cases & Course Materials

Accidental Innovation

Harvard Business School Note 607-082

Describes the role accident has historically played in invention and discovery, and raises questions about the importance of variation in business innovation processes.

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Harvard Business School Case 807-149

Describes the motivations behind the founding of CommonAngels—a group of successful business owners who provide capital, connections, and expertise to entrepreneurs who are building new ventures. In 2005, the group is considering increasing its investment focus to include a broader range of technologies, including emerging technologies (for example, mobile and RFID technologies) and non-information technologies (including medical devices and material sciences). Will broadening of focus require a change in the organization?

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Habitat for Humanity—Egypt

Harvard Business School Case 307-001

Habitat for Humanity—Egypt (HFHE), has grown in just seven years to become one of the most successful Habitat programs worldwide. The organization is at a crossroads as it attempts to reach the ambitious goal of serving 10% of the 20 million Egyptians living in poverty by 2023, while at the same time developing the local NGO capacity to serve the remaining 90%. Since its establishment in 1989, HFHE has worked in close partnership with CEOSS, a 50-year-old NGO, and through other local, community-based organizations. This network approach diverges form the traditional Habitat model of building houses through HFH's own affiliate organizations, but enables HFHE to begin building immediately rather than wait several years to become sufficiently established to operate as an independent entity. Yousry Makar, HFHE's national director, faces several key issues. How can he ensure that as HFHE's partnership network grows, his own office and staff can sustain the network? To what extent should he seek to address the needs of the "poorest of the poor," who cannot even repay loans and therefore do not qualify as Habitat beneficiaries? How can Makar continue to innovate to achieve the greatest mission impact while maintaining funding and support for HFHE?

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Iqbal Quadir, Gonofone, and the Creation of GrameenPhone (Bangladesh)

Harvard Business School Case 807-099

As the smallest of four partners in a unique wireless telephony venture in Bangladesh that he initiated and helped grow, Iqbal Quadir is trying to acquire a larger stake in the venture when one of the partners wants to sell his shares. However, Quadir faces stiff resistance from the other two partners, who also want to acquire the shares.

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Harvard Business School Case 707-474

In 2006, newspaper firms in developed markets were severely threatened on three fronts: the growth of online news, online classified advertising, and free newspapers. Schibsted, however, had managed to cope with these challenges successfully, and had become something of a legend in the newspaper community. The case describes the evolution of Schibsted's strategy from print media towards electronic media starting in 1995, including their choices around the internal structuring of new ventures. In September 2006, the management team confronted a few salient questions: first, should Schibsted allow Google to crawl its online news sites in Scandinavia? Second, were Schibsted's successes within Scandinavia repeatable outside it? Indeed, how far could Schibsted's competitive advantage travel?

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Harvard Business School Case 507-077

Describes an innovative product launch for which a marketing plan and a breakeven analysis are needed. To introduce students to breakeven analysis and the essentials of developing a marketing plan.

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The Impact of Direct-to-Consumer Advertising in Orthopaedics


Direct-to-consumer advertising (DTCA) has become an influential factor in healthcare delivery in the United States. We evaluated the influence of DTCA on surgeon and patient opinions and behavior in orthopaedics by surveying orthopaedic surgeons who perform hip and knee arthroplasties and patients who were scheduled to have hip or knee arthro-plasty. Respondents were asked for their opinions of and experiences with DTCA, including the influence of DTCA on surgeon and patient decision making. Greater than 98% of surgeon respondents had experience with patients who were exposed to DTCA. The majority of surgeon respondents reported DTCA had an overall negative impact on their practice and their interaction with patients (74%), and their patients often were confused or misinformed about the appropriate treatment for their condition based on an advertisement (77%). Fifty-two percent of patient respondents recalled seeing or hearing advertisements related to hip or knee arthroplasty. These patients were more likely to request a specific type of surgery or brand of implant from their surgeon and to see more than one surgeon before deciding to have surgery. Direct-to-consumer advertising seems to play a substantial role in surgeon and patient decision making in orthopaedics. Future efforts should be aimed at improving the quality and accuracy of information contained in consumer-directed advertisements related to orthopaedic implants and procedures.

Refugee Camp Economies


This paper describes the economy of a refugee camp. Key distortions to the economy of Kyangwali Refugee Settlement in Uganda are noted and the findings are used to construct a generic model of a refugee camp economy. Camp economies are influenced by host country policies, such as restrictions on refugees' movement and work, as well as by the physical and economic isolation of the site. Moreover, market outcomes interact with the nature of humanitarian assistance and the special demographic composition of the refugees to determine the prices and quantities that characterize the market. An awareness of the dynamics of the refugee camp economy has important implications for practitioners and scholars alike.