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    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      First Look: May 5

      First Look

      05 May 2015

      Surveillance Capitalism

      Shoshanna Zuboff explores the consequences of Big Data in the article "Big Other: Surveillance Capitalism and the Prospects of an Information Civilization." "This new form of information capitalism aims to predict and modify human behavior as a means to produce revenue and market control," she writes. The article appears in the March issue of Journal of Information Technology.

      Humblebragging

      Humblebragging is the act of couching a boast inside a complaint, in order to give the impression of humility - for example, "I sounded like a doofus during my Academy Award acceptance speech last night." As it turns out, humblebragging is a bad idea, despite its ubiquity on social media. Experimental researchers Ovul Sezer, Francesca Gino, and Michael I. Norton explain why nobody likes a humblebragger in the paper "Humblebragging: A Distinct - and Ineffective - Self-Presentation Strategy."

      The Purpose Of A Purpose

      Why do so many companies espouse a purpose beyond the generation of revenue? And why do employees care? Rebecca Henderson and Eric Van Den Steen dig into these questions in the article, "Why do Firms Have a Purpose? The Firm's Role as a Carrier of Identity and Reputation," which appears in a forthcoming issue of American Economic Review: Papers and Proceedings. "In this paper we argue that the conventional answers to this question fail to account for the fact that employees usually care whether the pursuit of purpose is authentic and that the embrace of purpose often affects even employees whose own work is remote from the activities that put the purpose into action," they write. —Carmen Nobel

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      Publications

      • May 2015
      • Corporate Stewardship: Organizing for Sustainable Effectiveness

      Leading Socially Responsible, Value-Creating Corporations

      By: Brown, Daniel, and Rakesh Khurana

      Abstract—We explore the role of the corporate leader in creating value for stakeholders throughout three eras: one of naïve idealism, one of naïve cynicism, and an emerging era of rugged idealism. We explain how the role of the corporate leader and society's perceptions of this role have changed and how leaders may now be able to create shared value for all stakeholders. Cases of leaders who created value or merely distributed value in each era are explored. Although there is no framework yet for how leaders can create value for all stakeholders, we note that a key theme amongst the companies illustrated is that each was able to align stakeholders' interests to a degree that made the satisfaction of multiple needs not only possible, but profitable. We conclude by emphasizing the role of business schools in socializing business leaders and how these schools, by incorporating a more stakeholder-centric approach in their curricula, research, and culture, can develop leaders who are willing and able to address the diverse values and interests of their companies' stakeholders.

      Publisher's link: http://www.greenleaf-publishing.com/productdetail.kmod?productid=4059

      • May 2015
      • Environmentally Responsible Supply Chains

      Ignore, Avoid, Abandon, and Embrace: What Drives Firm Responses to Environmental Regulation?

      By: Drake, David F., and Robin L. Just

      Abstract—A regulator's ability to incentivize environmental improvement among firms is vital in achieving long-term sustainability. However, firms can and do respond to environmental regulation in a variety of ways: complying with its intent; avoiding the regulation by offshoring or by abandoning the market; or ignoring the regulation by continuing with entrenched business practices. The path a profit-maximizing firm will choose depends, in part, on the expected cost of non-compliance, which is a product of the regulator's stated penalty, the likelihood that non-compliant practices are detected, and the likelihood that detected violations are punished. However, the type of regulatory regime-compliance-based or "pay-to-pollute"-and three important cost thresholds also drive firm response: i) the compliance or clean technology adoption threshold, ii) the offshoring threshold, and iii) the exit threshold. In this chapter, through examples of regulatory failures and successes, we develop a framework for understanding how these thresholds interact with the type of regulatory regime being considered and the expected cost of non-compliance to determine whether profit-maximizing firms ignore, avoid, or embrace environmental regulation.

      Publisher's link: http://www.hbs.edu/faculty/Publication%20Files/Firm%20Response%20to%20Environmental%20Regulation_0bdde982-eeb2-48c3-a647-7cca4255a7f6.pdf

      • May 2015
      • Cheating, Corruption, and Concealment: The Roots of Dishonest Behavior

      How Moral Flexibility Constrains Our Moral Compass

      By: Gino, F.

      Abstract—Cheating, fraud, deception, uncooperative actions, and many other forms of unethical behavior are among the greatest personal and societal challenges of our time. While the media commonly focuses on the most sensational scams (e.g., Enron, Bernard Madoff), less attention is given to more prevalent "ordinary" unethical behavior-unethical actions committed by people who value morality but behave unethically when faced with an opportunity to cheat. Ordinary unethical behavior causes considerable societal damage, as demonstrated by increasing empirical evidence. Drawing on recent research in moral psychology and behavioral ethics, I examine "moral flexibility," or the common ability to justify one's immoral actions by generating multiple and diverse rationales for why these actions are ethically appropriate. The chapter discusses various antecedents to moral flexibility that are likely to prompt ordinary people to do wrong while feeling moral and suggests future research directions regarding how self-serving justifications result in ethical misconduct.

      • May 2015
      • The Social Psychology of Good and Evil

      Dishonesty Explained: What Leads Moral People To Act Immorally

      By: Gino, F., and D. Ariely

      Abstract—The last two decades have witnessed what seems to be an increasing number of cases of dishonesty, from corporate corruption and employee misconduct to questionable behaviors during the financial crisis and individual acts of unethical behavior in many spheres of society. When considered together, these actions have had large-scale impact on the economic landscape. In this paper, we discuss recent streams of research in social psychology and management that provide insights on when and why even people who care about morality end up crossing ethical boundaries.

      • May 2015
      • American Economic Review: Papers and Proceedings

      Why Do Firms Have Purpose? The Firm's Role as a Carrier of Identity and Reputation

      By: Henderson, Rebecca, and Eric Van Den Steen

      Abstract—Why do so many firms publicly espouse a "purpose" beyond simple profit maximization? And why do so many managers and employees appear to care deeply about this purpose and to believe that it is critically important? In this paper we argue that the conventional answers to this question fail to account for the fact that employees usually care whether the pursuit of purpose is authentic and that the embrace of purpose often affects even employees whose own work is remote from the activities that put the purpose into action. In this paper we propose instead that firms may adopt a socially driven purpose because of how it affects-through the visibility of firm membership and through the visibility of the firm's actions-employee identity and reputation, where we define "identity" as our own beliefs about ourselves and "reputation" as others' beliefs about ourselves.

      • May 2015
      • Journal of Marketing

      BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

      By: Karmarkar, Uma R., and Bryan Bollinger

      Abstract—As concerns about pollution and climate change have become more central in public discourse, shopping with reusable grocery bags has been strongly promoted as environmentally and socially conscious. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how these initiatives might alter consumers' in-store behavior. Using scanner panel data from a single California location of a major grocery chain, and completely controlling for consumer heterogeneity, we demonstrate that bringing your own bags simultaneously increases purchases of environmentally friendly as well as indulgent (hedonic) items. We use experimental methods to further demonstrate causality and to consider the effects of potential moderators. These findings have implications for decisions related to product pricing, placement and assortment, store layout, and the choice of strategies to increase the use of reusable bags.

      Publisher's link: http://ezp-prod1.hul.harvard.edu/login?url=http://dx.doi.org/10.1509/jm.13.0228

      • May 2015
      • Management Science

      Asymmetric Effects of Favorable and Unfavorable Information on Decision-making Under Ambiguity

      By: Peysakhovich, Alexander, and Uma R. Karmarkar

      Abstract—Most daily decisions involve uncertainty about outcome probabilities arising from incomplete knowledge, i.e., ambiguity. We explore how the addition of partial information affects these types of choices using theoretical and empirical methods. Our experiments in both gain and loss domains demonstrate that when such information supports a favorable outcome, it strongly increases valuation of an ambiguous financial prospect. However, when information supports an unfavorable outcome, it has significantly less impact. We find that two mechanisms drive this asymmetry. First, unfavorable information decreases estimates of a good outcome occurring but also reduces aversive uncertainty. These factors act in opposition, minimizing the effects of unfavorable information. Second, when information can be subjectively interpreted, unfavorable information is less likely to be integrated into evaluations. Our findings reveal mechanisms not captured by traditional models of decision making under uncertainty and highlight the importance of increasing the salience of unfavorable information in uncertain contexts to promote unbiased decision making.

      Publisher's link: http://www.hbs.edu/faculty/Publication%20Files/AmbigMainTextFinal_8a88b410-0618-40ea-969a-c29f3e509d9d.pdf

      • May 2015
      • Journal of Information Technology

      Big Other: Surveillance Capitalism and the Prospects of an Information Civilization

      By: Zuboff, Shoshana

      Abstract—This article describes an emergent logic of accumulation in the networked sphere, "surveillance capitalism," and considers its implications for "information civilization." Google is to surveillance capitalism what General Motors was to managerial capitalism. Therefore the institutionalizing practices and operational assumptions of Google Inc. are the primary lens for this analysis as they are rendered in two recent articles authored by Google Chief Economist Hal Varian. Varian asserts four uses that follow from computer-mediated transactions: "data extraction and analysis," "new contractual forms due to better monitoring," "personalization and customization," and "continuous experiments." An examination of the nature and consequences of these uses sheds light on the implicit logic of surveillance capitalism and the global architecture of computer mediation upon which it depends. This architecture produces a distributed and largely uncontested new expression of power that I christen: "Big Other." It is constituted by unexpected and often illegible mechanisms of extraction, commodification, and control that effectively exile persons from their own behavior while producing new markets of behavioral prediction and modification. Surveillance capitalism challenges democratic norms and departs in key ways from the centuries-long evolution of market capitalism.

      Publisher's link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2594754

      • May 2015
      • Frankfurter Allgemeine Zeitung

      Disruption's Tragic Flaw

      By: Zuboff, Shoshana

      Abstract—No abstract available.

      Publisher's link: http://www.faz.net/aktuell/feuilleton/debatten/the-digital-debate/shoshana-zuboff-on-the-sharing-economy-13500770.html

       

      Working Papers

      A Methodology for Operationalizing Enterprise Architecture and Evaluating Enterprise IT Flexibility

      By: MacCormack, Alan, Robert Lagerstrom, David Dreyfus, and Carliss Y. Baldwin

      Abstract—We propose a network-based methodology for analyzing a firm's enterprise architecture. Our methodology uses "Design Structure Matrices" (DSMs) to capture the coupling between components in the architecture, including both business and technology-related elements. It addresses the limitations of prior work, in that it i) is based upon the actual architecture "in-use" as opposed to planned or "idealized" versions; ii) identifies discrete layers in a firm's architecture associated with different technologies (e.g., applications, servers, and databases); iii) reveals the main "flow of control" within an architecture (i.e., the set of inter-connected components); and iv) generates measures of architecture that can be used to predict performance. We demonstrate the application of our methodology using a novel dataset developed with the division of a large pharmaceutical firm. The dataset consists of all components in the enterprise architecture, the observed dependencies between them, and estimated costs of change for software applications within this architecture. We show that measures of the architecture derived from a DSM predict the cost of change for software applications. In particular, applications that are tightly coupled to other components in the architecture cost more to change. The analysis also shows that the measure of coupling that best predicts the cost of change is one that captures all direct and indirect connections between components (i.e., it captures the potential for changes to propagate via all possible paths between components). Our work represents an important step in making the concept of enterprise architecture more operational, thereby improving a firm's ability to understand and improve its architecture over time.

      Download working paper: http://ssrn.com/abstract=2554646

       

      Working Papers

      Humblebragging: A Distinct-and Ineffective-Self-Presentation Strategy

      By: Sezer, Ovul, Francesca Gino, and Michael I. Norton

      Abstract—Humblebragging-bragging masked by a complaint-is a distinct and, given the rise of social media, increasingly ubiquitous form of self-promotion. We show that although people often choose to humblebrag when motivated to make a good impression, it is an ineffective self-promotional strategy. Five studies offer both correlational and causal evidence that humblebragging has both global costs-reducing liking and perceived sincerity-and specific costs: it is even ineffective in signaling the specific trait that a person wants to promote. Moreover, humblebragging is less effective than simply complaining, because complainers are at least seen as sincere. Despite people's belief that combining bragging and complaining confers the benefits of both self-promotion strategies, humblebragging fails to pay off.

      Download working paper: http://ssrn.com/abstract=2597626

       

      Cases & Course Materials

      • Harvard Business School Case 815-079

      Climate Change: An Unfolding Story

      A brief background on climate change.

      Purchase this case:
      https://cb.hbsp.harvard.edu/cbmp/product/815079-PDF-ENG

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