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    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      First Look: May 8

      First Look

      08 May 2012

      Dispelling Product Development Myths

      In the May issue of Harvard Business Review, Stefan Thomke and Donald Reinersten address the misconceptions that arise when firms treat product development as if it were akin to manufacturing. "Six Myths of Product Development" aims to dispel common fallacies such as "High utilization of resources will improve performance," "Processing work in large batches improves the economics of the development process," and "The sooner the project is started, the sooner it will be finished."

      Creating An R&d Strategy

      "No other endeavor frustrates management more than attempts to improve R&D performance," writes Gary Pisano in his working paper, "Creating an R&D Strategy," explaining that such a strategy includes four elements: an architecture, a portfolio, processes, and people. The paper lays out important ground rules, including the idea that a good strategy provides consistency, coherence, and alignment.

      Managing Bike-sharing In Paris

      Five years ago, the French advertising firm JCDecaux partnered with the city of Paris to launch a bicycle-sharing system called Vélib', a portmanteau of vélo (bicycle) and liberté (freedom). While wildly popular, Vélib' was also plagued with widespread theft and vandalism that led to huge and unexpected operating costs for JCDecaux. In the case "On Two Wheels in Paris: The Vélib' Bicycle-Sharing Program," Peter Coles, Elena Corsi, and Vincent Dessain discuss how the firm and the city renegotiated their contract, attempting to develop a strategy that would please all parties involved—including the bike-riding citizens of Paris.
      —Carmen Nobel
      LinkedIn
      Email
       

      Publications

      To Think or Not To Think about Trauma? An Experimental Investigation into Unconscious Thought and Intrusion Development

      Authors:Julie Krans and Maarten W. Bos
      Publication:Journal of Experimental Psychopathology 3, no. 2 (2012)
      Abstract

      The present study tested whether unconscious thought (versus conscious thought) would reduce frequency of intrusions from an analogue trauma film. Participants viewed a distressing film and were subsequently instructed to think about the film deliberately (conscious thought), to perform a demanding task while knowing that the film information was important later on the experiment (unconscious thought), or to perform the task while believing the experiment had ended (control condition). Afterwards, sequence memory and intrusions of the film were measured. In line with predictions, the results showed significant lower intrusion frequency in the unconscious thought condition compared to both conscious thought and mere distraction. As there were no differences in sequence memory for the film, it remains unclear what mechanism was responsible for this effect. These results encourage further research into a new and exciting area.

      Global Business Speaks English: Why You Need a Language Strategy Now

      Author:Tsedal Neeley
      Publication:Harvard Business Review 90, no. 5 (May 2012)
      Abstract

      An abstract is unavailable at this time.

      Book: http://hbr.org/2012/05/global-business-speaks-english/ar/1

      Egalitarianism, Cultural Distance, and FDI: A New Approach

      Authors:Jordan I. Siegel, Amir N. Licht, and Shalom H. Schwartz
      Publication:Organization Science (forthcoming)
      Abstract

      This study addresses an apparent impasse in the research on organizations' responses to cultural distance. Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms' interactions with non-financial stakeholders.

      Book: http://www.people.hbs.edu/jsiegel/SiegelLichtSchwartz_EFDI_20120310.pdf

      Daily Horizons: Evidence of Narrow Bracketing in Judgments from 9,000 MBA Admission Interviews

      Authors:U. Simonsohn and F. Gino
      Publication:Psychological Science (forthcoming)
      Abstract

      Many professionals, from auditors and lawyers, to clinical psychologists and journal editors, divide a continuous flow of judgments into subsets. College admissions interviewers, for instance, evaluate but a handful of applicants a day. We conjectured that in such situations, individuals engage in narrow bracketing, assessing each subset in isolation, and as a consequence avoid deviating much-for any given subset-from the expected overall distribution of judgments. For instance, an interviewer who has already highly recommended three applicants on a given day may be reluctant to do so for a fourth applicant. Data from over 9,000 MBA interviews supported this prediction. Auxiliary analyses suggest that contrast effects and non-random scheduling of interviews are unlikely alternative explanations.

      Six Myths of Product Development

      Authors:Stefan Thomke and Donald Reinertsen
      Publication:Harvard Business Review 90, no. 5 (May 2012)
      Abstract

      An abstract is unavailable at this time.

      Book: http://hbr.org/2012/05/six-myths-of-product-development/ar/1

       

      Working Papers

      Learning by Supplying

      Authors:Juan Alcácer and Joanne Oxley
      Abstract

      Learning processes lie at the heart of our understanding of how firms build capabilities to generate and sustain competitive advantage: learning by doing, learning by exporting, learning from competitors, users, and alliance partners. In this paper we focus attention on another locus of learning that has received less attention from academics despite popular interest: learning by supplying. Using a detailed panel dataset on supply relationships in the mobile telecommunications industry, we address the following questions: What factors contribute to a firm's ability to learn by supplying, and build technological and market capabilities? Does it matter to whom the firm supplies? Is involvement in product design important, or is manufacturing the key locus of learning? How does a supplier's initial resource endowment play into the dynamic? Our empirical analysis yields interesting findings that have implications for theory and practice and that suggest new direction for future research.

      Download the paper: http://www.hbs.edu/research/pdf/12-093.pdf

      Componential Theory of Creativity

      Author:Teresa M. Amabile
      Abstract

      The componential theory of creativity is a comprehensive model of the social and psychological components necessary for an individual to produce creative work. The theory is grounded in a definition of creativity as the production of ideas or outcomes that are both novel and appropriate to some goal. In this theory, four components are necessary for any creative response: three components within the individual-domain-relevant skills, creativity-relevant processes, and intrinsic task motivation-and one component outside the individual-the social environment in which the individual is working. The current version of the theory encompasses organizational creativity and innovation, carrying implications for the work environments created by managers. This article defines the components of creativity and how they influence the creative process, describing modifications to the theory over time. Then, after comparing the componential theory to other creativity theories, the article describes this theory's evolution and impact.

      Download the paper: http://www.hbs.edu/research/pdf/12-096.pdf

      Is a VC Partnership Greater Than the Sum of Its Partners?

      Authors:Michael Ewens and Matthew Rhodes-Kropf
      Abstract

      Venture capital firms' ability to repeatedly make top performing investments suggests the importance of some aspect of organizational or human capital. However, it is an unanswered question as to what extent the important attributes of performance are a part of the firm's organizational capital or embodied in the human capital of the people inside the firm. We examine the performance at the partner-investment level to determine the extent of persistence in individual partners' ability to IPO, achieve outsized exits, or fail, and to what extent that performance is attributable to the firm or the partner. Shedding light on the sources of performance in venture capital firms will help us make progress on a fundamental question in economics as to whether a firm is more than the sum of its parts.

      Download the paper: http://www.hbs.edu/research/pdf/12-097.pdf

      Financial vs. Strategic Buyers

      Authors:Marc Martos-Vila, Matthew Rhodes-Kropf, and Jarrad Harford
      Abstract

      Within the great oscillations of overall merger activity there is a shifting pattern of activity between strategic (operating firms) and financial (private equity) acquirers. What are the economic factors that drive either financial or strategic buyers to dominant positions in M&A activity? We introduce debt market misvaluation in M&A activity. Debt misvaluation might seem limited since both types of acquirer (and the target) can access misvalued debt markets. However, moral hazard and insurance effect differences between types of buyers interact with potential debt misvaluation debt, leading to a dominance of financial versus strategic buyers that depends on debt market conditions.

      Download the paper: http://www.hbs.edu/research/pdf/12-098.pdf

      Creating an R&D Strategy

      Author:Gary P. Pisano
      Abstract

      An abstract is unavailable at this time.

      Download the paper: http://www.hbs.edu/research/pdf/12-095.pdf

      How Short-Termism Invites Corruption…And What to Do About It

      Author:Malcolm S. Salter
      Abstract

      Researchers and business leaders have long decried short-termism: the excessive focus of executives of publicly traded companies-along with fund managers and other investors-on short-term results. The central concern is that short-termism discourages long-term investments, threatening the performance of both individual firms and the U.S. economy. I argue that short-termism also invites institutional corruption. I define that as institutionally supported behavior that-while not necessarily unlawful-undermines a company's legitimate processes and core values, weakening its capacity to achieve espoused goals and eroding public trust. In the private sector, institutional corruption typically entails gaming society's laws and regulations, tolerating conflicts of interest, persistently violating accepted norms of fairness, and pursuing various forms of cronyism. The gaming of Securities and Exchange Commission rules by Citigroup's mortgage-banking desk in 2007 is an illuminating example of institutional corruption in the finance industry. After exploring that case, I provide a more complete definition of gaming and explain how short-termism invites the kind of gaming and institutional corruption that occurred at Citigroup. I then examine the key drivers of short-termism in contemporary business and their potential effects on the behavior of both executives and their organizations. I conclude by proposing mechanisms to deter the corrupting effects of short-termism, including changes in both business and public policy. While business leaders and policymakers have been cautious in implementing many of these countermeasures, we must seriously consider them if want to rein in the public and private costs of institutional corruption in the private sector.

      Download the paper: http://www.hbs.edu/research/pdf/12-094.pdf

       

      Cases & Course Materials

      Terry Lundgren at Macy's

      José B., Alvarez, Robert Steven Kaplan, and Natalie Kindred
      Harvard Business School Case 412-033

      In 2008 and 2009, a period of severe economic turmoil, Macy's CEO Terry Lundgren led a large-scale transformation of the iconic department store. Having previously converted the many department stores owned by Macy's to the Macy's names (except Bloomingdale's), Lundgren and his team set out to create a more efficient, dynamic organization. Their "One Macy's" initiative consolidated and centralized all key functions, while their "My Macy's" initiative focused on customizing the offerings of individual stores to local markets. By 2011, Macy's had many advantages, including an energized, highly experienced executive team; a nationwide presence and strong brand in the U.S.; a competitive offering of private label and exclusive brands; and, following the execution of One Macy's and My Macy's, a fresh, unique foundation for future growth. However, the company still faces significant challenges, including low sales productivity (in part due to the large size of its stores), the decline of mall-based shopping, poor floor-level sales capabilities, lack of appeal to younger consumers, intensifying competition, and an overall dearth of future growth opportunities. This case allows students to assess Lundgren's leadership to date and options for the future, as well as the overall viability of the department store business model.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/412033-PDF-ENG

      A Glossary of Technical Terms Related to Bankruptcy in the U.S.

      Carliss Y. Baldwin, and Ravi Mehta
      Harvard Business School Note 212-081

      This note briefly describes the most important legal forms of U.S. bankruptcy (Chapter 7 and Chapter 11) and provides definitions of technical terms related to the bankruptcy process.

      Purchase this note:
      http://cb.hbsp.harvard.edu/cb/product/212081-PDF-ENG

      DONG Energy: Clean and Reliable Energy

      Joseph L. Bower and Elena Corsi
      Harvard Business School Case 312-108

      The head of Denmark's largest energy group pondered how to use their limited resources to advance the delivery of clean and reliable energy. The Danish State owned DONG Energy had started life as an importer and trader of gas and oil. Under the leadership of the current CEO, Anders Eldrup, the company had become an energy group, present in all steps of the gas and oil value chain and particular, in the EU market leader in offshore wind energy. As a developer and operator of wind farms, it was one of the world's leaders. In 2011, the company faced several strategic questions including whether and where they should continue investing in offshore wind and how to identify the next key growth businesses of the future.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/312108-PDF-ENG

      On Two Wheels in Paris: The Vélib' Bicycle-Sharing Program

      Peter A. Coles, Elena Corsi, and Vincent Dessain
      Harvard Business School Case 912-022

      French advertising company JCDecaux and the city of Paris jointly developed Vélib', a wildly popular bicycle sharing system. Despite Vélib's public appeal, vandalism and theft led to ballooning operating costs-costs borne by JCDecaux alone. The two parties opted to renegotiate their contract, which would impact prices, revenue sharing, cost allocation, and the operation of the system as a whole. Could the parties agree on a common strategy that would meet their objectives, while still delivering a first class bicycle sharing service to the city of Paris?

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/912022-PDF-ENG

      Purchase this supplement:
      http://cb.hbsp.harvard.edu/cb/product/912023-PDF-ENG

      Gene Patents (B)

      Richard G. Hamermesh and Phillip Andrews
      Harvard Business School Supplement 812-130

      The case updates events since the court's ruling against Myriad Genetics on March 29, 2010, and should be used in conjunction with "Gene Patents (A)." On July 29, 2011, a U.S. appeals court reversed the prior ruling against Myriad. On September 16, 2011, the first major overhaul of U.S. patent law in nearly 60 years was signed into law. Among other provisions, the law moved the U.S. to a first-to-file priority when granting patents, as was the practice in most of the rest of the world. Many felt this change would help to reduce the amount of patent litigation. The case ends with the Supreme Court's 9-to-0 ruling on March 29, 2012, against another company in a case similar to Myriad's. Within five days of that decision, the Supreme Court remanded the Myriad case back down to the court of appeals for reconsideration.

      Purchase this supplement:
      http://cb.hbsp.harvard.edu/cb/product/812130-PDF-ENG

      Hip Hop (A): Rapper's Delight, Producer's Dilemma

      Mukti Khaire and Kerry Herman
      Harvard Business School Case 812-106

      An abstract is unavailable at this time.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/812106-PDF-ENG

      Purchase this supplement:
      http://cb.hbsp.harvard.edu/cb/product/812116-PDF-ENG

      OpenIDEO

      Karim R. Lakhani, Anne-Laure Fayard, Natalia Levina, and Stephanie Healy Pokrywa
      Harvard Business School Case 612-066

      The case describes OpenIDEO, an online offshoot of IDEO, one of the world's leading product design firms. OpenIDEO leverages IDEO's innovative design process and an online community to create solutions for social issues. Emphasis is placed on comparing the IDEO and OpenlDEO processes using real-world project examples. For IDEO this includes the redesign of Air New Zealand's long haul flights. For OpenIDEO this includes increasing bone marrow donor registrations and improving personal sanitation in Ghana. In addition, the importance of fostering a collaborative online environment is explored.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/612066-PDF-ENG

      The Case of the Unidentified Ratios

      Josh Lerner
      Harvard Business School Case 812-129

      An investment banking analyst seeks to reconstruct which financial ratios go with which companies.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/812129-PDF-ENG

      COSCO: Implementing Sustainability

      Christopher Marquis, Lynn Yin, and Dongning Yang
      Harvard Business School Case 412-081

      In January 2005, China Ocean Shipping (Group) Company (COSCO) announced it would join the United Nations Global Compact (UNGC). At that time, COSCO initiated sustainability reporting practices in line with the UNGC, and over the next six years these efforts evolved into an information technology platform integrating all the company's sustainability processes and indicators. In fall 2011, the company's leadership considered the following strategic questions: To what extent should COSCO refer to international and domestic sustainability standards in the platform framework? How far should COSCO go in promoting the sustainability system as a stand-alone product? What were the next steps in sustainability reporting, and should COSCO try to attain even higher reporting standards in the future? Moreover, related issues facing the company included: What would be the value in reaching higher sustainability and reporting standards, and how would internal and external stakeholders react? What challenges lay ahead for the consistent implementation of higher standards across COSCO's subsidiaries?

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/412081-PDF-ENG

      State Capitalism and State-Owned Enterprise Reform

      Aldo Musacchio
      Harvard Business School Module Note 712-028

      The note examines state capitalism in the twenty-first century. It introduces a series of topics and cases related to state capitalism, such as the debate about the causes of inefficiency in state owned enterprises, possible ways of turning them around, as well as a short discussion of sovereign wealth funds (SWFS), national champions, development banks, etc. The note explicitly links some of these topics to HBS cases designed to dive deeper into each subject.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/712028-PDF-ENG

      Social Strategy at American Express

      Mikołaj Jan Piskorski and David Chen
      Harvard Business School Case 712-447

      American Express has developed a number of strategic partnerships with Facebook, Foursquare, and Twitter to improve its card members' experience and lower its customer acquisition cost. The case details the history of these partnerships, examines American Express' own social platforms, and talks about American Express' future plans in the realm of social strategy. It then presents students with two options related to Amex's future options and asks them to pick one.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/712447-PDF-ENG

      Caijing Magazine (A)

      Karthik Ramanna and G.A. Donovan
      Harvard Business School Case 112-028

      In late 2009, Wang Boming, publisher of Caijing Magazine, widely regarded as China's most independent newsmagazine, gathered his core team for an urgent meeting. His pioneering editor Hu Shuli, described for her fiercely independent journalism as "the most dangerous woman in China" had quit with two-thirds of Caijing's staff, allegedly over a conflict on editorial independence. Wang, known for his ability to navigate the country's carefully controlled propaganda apparatus, considered how to rebuild the magazine without its star editor.

      Purchase this case:
      http://cb.hbsp.harvard.edu/cb/product/112028-PDF-ENG

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