First Look

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

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

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.

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.

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.

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

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

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

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