First Look

November 12, 2013

Wear Red Sneakers If You Want To Be Taken Seriously

How are customers perceived when they enter a luxury boutique store wearing gym clothes? How about a business person wearing red sneakers? Good news for nonconformists everywhere! A forthcoming article in the Journal of Consumer Research demonstrates that your nonconforming behaviors can cause others to confer on you higher status and competence. ''The Red Sneakers Effect: Inferring Status and Competence from Signals of Nonconformity'', by Silvia Bellezza, Francesca Gino, and Anat Keinan, also identifies situations where nonconformism works the other way.

Starbucks Competes In India

Café Coffee Day is the leading coffee chain brand in India, 1,400 stores strong. So should it worry when a foreign competitor sets up 11 cafes? Well, the competitor in question is megabrand Starbucks, so it's not a question of if to respond but rather how. The case study "Coffee Wars in India: Café Coffee Day Takes on the Global Brands" follow CCD's strategists as they asses the threat. The case was written by David B. Yoffie and Tanya Bijlani.

Ford And Gm's Alternative Approaches To Mass Production

Henry Ford mastered the mass production system, ensuring its customers a low-cost, reliable vehicle with few bells and whistles—as the saying went, customers could have any color as long as it was black. General Motors took a different approach, offering car buyers choices within models and entirely new designs each year. A new case by Willy Shih, "Ford vs. GM: The Evolution of Mass Production," explores industry shifts that eventually made it difficult for Ford to maintain its first-mover advantage.

— Sean Silverthorne


  • November 2013
  • Journal of Consumer Research

The Red Sneakers Effect: Inferring Status and Competence from Signals of Nonconformity

By: Bellezza, Silvia, Francesca Gino, and Anat Keinan

Abstract—We examine how people react to nonconforming behaviors, such as entering a luxury boutique wearing gym clothes rather than an elegant outfit or wearing red sneakers in a professional setting. Nonconforming behaviors, as costly and visible signals, can act as a particular form of conspicuous consumption and lead to positive inferences of status and competence in the eyes of others. A series of studies demonstrates that people confer higher status and competence to nonconforming rather than conforming individuals. These positive inferences derived from signals of nonconformity are mediated by perceived autonomy and moderated by individual differences in need for uniqueness in the observers. We identify boundary conditions and demonstrate that the positive inferences disappear when the observer is unfamiliar with the environment, when the nonconforming behavior is depicted as unintentional, and in the absence of expected norms and shared standards of formal conduct.

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Working Papers

When 3+1>4: Gift Structure and Reciprocity in the Field

By: Gilchrist, Duncan, Michael Luca, and Deepak Malhotra

Abstract—Do higher wages elicit reciprocity and hence higher effort? In a field experiment with 266 employees, we find that paying above-market wages, per se, does not have an effect on effort relative to paying market wages. However, structuring a portion of the wage as a clear and unexpected gift (by hiring at a given wage, and then offering a raise with no further conditions after the employee has accepted the contract) does lead to higher effort for the duration of our job. This subtle but critical difference sheds light on the conditions under which higher wages will lead to reciprocity. We find that the impact of the gift is pronounced for workers with the most experience and workers who have worked most recently-precisely the individuals who would recognize it is a gift. The effects of the gift are higher for workers with lower historical wages, and in fact it increases productivity more than it increases cost for this group. Our findings show that targeted gifts can be effective, but that the reciprocity measured after surprising an employee with a raise is fundamentally different from that posited to explain persistent above-market wages.

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Cases & Course Materials

  • Harvard Business School Case 414-003

GlaxoSmithKline: Sourcing Complex Professional Services

Pharmaceutical company GlaxoSmithKline (GSK) uses an innovative new approach to procuring outside legal counsel: it replaces relationship-based selection and law firms' traditional time-based billing with data-driven decision making and an online reverse auction. In the case, GSK is hit with a potentially devastating suit and must hire a firm in time to respond. The recently hired managing attorney, Sophia Keating, grapples with GSK's approach. The GSK veterans assure her that the approach drives down costs and improves the quality of work by systematically increasing the rigor in the procurement process. Still skeptical, Sophia runs the process of systematically analyzing and comparing the competing firms' bids. This case also describes the process by which these tools were created and adopted. Beyond the implications for law firms and other service providers, lessons from this case are applicable for teaching about institutional change, procurement processes relevant to many fields, and how to increase rigor in typically informal business processes.

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  • Harvard Business School Case 413-120

Kvadrat: Leading for Innovation

In 2013, Anders Byriel, CEO of the family-owned Danish textiles company, Kvadrat, considered the firm's strategic plan. In 2000, Byriel and Mette Bendix, Kvadrat's Product Director, had taken over management of the company from their fathers, who had founded Kvadrat in the 1960s. Byriel and Bendix had joined Kvadrat in 1992, and since that time, Kvadrat had grown from €19 million in annual sales to over €86 million. It had expanded its focus on selling textiles to European architects and furniture manufactures, becoming a global company with a wide product range and a broad customer base. Kvadrat's internal organization had grown and transformed to support this larger business. Now Kvadrat's management team was focused on a number of key initiatives: expansion into Asia, improved sales trends in its curtain and Soft Cells businesses, development of Kvadrat's retail sales operations, the implementation of new Human Resources practices, and the execution of a new organizational design. Was such an extensive growth, turnaround, and internal development agenda feasible? And, were the initiatives being considered the right ones for Kvadrat?

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  • Harvard Business School Case 514-025


No abstract available.

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  • Harvard Business School Case 513-053

Eko: Mobile Banking and Payments in India

No abstract available.

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IBM, through its corporate citizenship arm, demonstrated the role of business in partnership for change, conceiving of an organizational innovation in public education linking an employer, the New York City K-12 public education system, and the city's two-year colleges. P-TECH (Pathways in Technology Early College High School) was a new concept, a six-year high school running to grade 14, graduating students with a high school diploma and an associate's degree in STEM (science, technology, engineering, and math). This case shows how the innovation developed and why it generated enormous public and media interest in less than a year. Results were strong: one-third of the first students entered below grade level, and soon many were taking college courses. P-TECH addresses a skills gap affecting U.S. competitiveness that quickly caught the attention of elected officials.

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P-TECH, an innovation in public education conceived by IBM in partnership with the New York City K-12 public education system and the city's two-year colleges, had barely been underway when other cities and states wanted to replicate it. This case follows the reinvented six-year technology high school model to Chicago, where the Mayor championed five similar reinvented high schools, with five employer-partners including IBM, and with IBM's overall support, and back to New York City and State, as well as to Washington D.C. because of interest from President Obama. This case shows how an organizational innovation still in progress can be taken elsewhere and maintain essential ingredients while also accommodating local and state differences. It raises questions about the necessary conditions for diffusion and replication of innovation.

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  • Harvard Business School Case 514-026

Sustainability at Siemens

Describes sustainability efforts at Siemens since arrival of Chief Sustainability Officer, Barbara Kux, in 2008. Asks students to evaluate success of those efforts and outline what the company should do going forward.

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  • Harvard Business School Case 614-010

Ford vs. GM: The Evolution of Mass Production (A)

This case explores the very different paths taken by the Ford Motor Company and the General Motors Corporation in the first three decades of the twentieth century. Henry Ford's Model T was a car for the masses. After considerable experimentation, Ford Motor perfected a mass production system that converted the vast majority of jobs in the factory into routine tasks. It pioneered the moving assembly line, and it pursued processes that became increasingly integrated and mechanized. While its single-minded focus on cost minimization led to spectacular market success for a time, the resulting inflexibility made it difficult for the company to respond to market changes. This created an opportunity for General Motors and others, particularly in the face of technological shifts to closed-body designs and metal stamping technology, as well as the marketing-led idea of the annual model change. The case offers a setting to examine several frameworks: exploration versus exploitation, the emergence of dominant designs, and vertical integration versus transaction costs and supplier hold-up. The (A) case closes with the question of what GM should do about supplier Fisher Body. The (B) case summarizes the shift to all-steel body stamping and engine manufacturing as the core technologies for automobile production, and how these changes made it difficult for Ford to maintain its first-mover advantage.

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  • Harvard Business School Case 713-514

Jazzed Up: A Global Strategy Manga (Graphic Novel)

No abstract available.

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Café Coffee Day (CCD) is contemplating how to respond to the entry of Starbucks into the Indian coffee chain market. The case study describes the emergence of CCD as the leading coffee chain in India, with over 1,400 cafes in India. In early 2013, Starbucks, the world's leading coffee chain company, opened its first 11 outlets in India's metropolitan cities with local giant, Tata, and promises of a national roll out. CCD management debated whether there was plenty of room for both Starbucks and CCD in India's large growing market, or whether Starbucks' entry required CCD to respond more assertively.

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