First Look

November 19, 2013

Transparency Improves Views About Government

Poll after poll demonstrates that Americans have a diminishing level of trust in their government. New research from Ryan W. Buell and Michael I. Norton suggests at least one way that it can be reclaimed: Show constituents all the good government can do. In an experiment in Boston, participants had increasingly positive attitudes once they saw how government services such as street repair improved the community. "The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale," report the authors. See their working paper, Surfacing the Submerged State with Operational Transparency in Government Services.

Tesla Motors Drives Forward

A number of startups have attempted new-car ventures in the US and bombed—DeLorean, anyone? Now Tesla Motors may become the first company since WWII to successfully mass produce not only a car, but and an electric one at that. The new case "Tesla Motors" by Eric Van den Steen looks at the company's successes and failures and its lofty aspirations for the future.

Dell's Board Considers An Offer From The Company Founder

Michael Dell famously started Dell Computer in his dorm room, quickly growing the company to one of the largest PC companies in the world. By 2013, the story was much different, as Dell attempted to take the company private against objections of activist investor Carl Ichan. The case "Taking Dell Private," by David J. Collis, David B. Yoffie, and Matthew Shaffer, offers students a chance to look at the situation from the board's points of view, as it decides the future of the company.

— Sean Silverthorne


  • August 2013
  • American Economic Journal: Macroeconomics

Accounting for Crises

By: Nagar, Venky, and Gwen Yu

Abstract—We provide one of the first empirical evidence consistent with recent macro global-game crisis models, which show that the precision of public signals can coordinate crises (e.g., Angeletos and Werning, 2006; Morris and Shin, 2002, 2003). In these models, self-fulfilling crises (independent of poor fundamentals) can occur only when publicly disclosed signals of fundamentals have high precision; poor fundamentals are the sole driver of crises only in low precision settings. We find evidence consistent with this proposition for 68 currency and systemic banking crises in 17 countries from 1983 to 2005. We exploit a key publicly disclosed signal of fundamentals that drives financial markets, namely accounting data, and find that pre-crisis accounting signals of fundamentals are significantly lower only in low precision countries.

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Working Papers

Path-Breakers: How Does Women's Political Participation Respond to Electoral Success?

By: Bhalotra, Sonia, Irma Clots-Figueras, and Lakshmi Iyer

Abstract—This paper analyzes the effect of a woman's electoral victory on women's subsequent political participation. Using the regression discontinuity afforded by close elections between women and men in India's state elections, we find that a woman winning office leads to a large and significant increase in the share of female candidates from major political parties in the subsequent election. This stems mainly from an increased probability that previous women candidates contest again, an important margin in India where a substantial number of incumbents do not contest reelection. There is no significant entry of new female candidates, no change in female or male voter turnout, and no spillover effects to neighboring areas. Further analysis points to a reduction in party bias against women candidates as the main mechanism driving the observed increase in women's candidacy.

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Abstract—As Americans' trust in government nears historic lows, frustration with government performance approaches record highs. One explanation for this trend is that citizens may be unaware of both the services provided by government and the impact of those services on their lives. In an experiment, Boston-area residents interacted with a website that visualizes both service requests submitted by the public (e.g., potholes and broken streetlamps) and efforts by the City of Boston to address them. Some participants observed a count of new, open, and recently closed service requests, while others viewed these requests visualized on an interactive map that included details and images of the work being performed. Residents who experienced this "operational transparency" in government services-seeing the work that government is doing-expressed more positive attitudes toward government and greater support for maintaining or expanding the scale of government programs. The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale. We further demonstrate that positive attitudes about government partially mediate the relationship between operational transparency and support for maintaining and expanding government programs. While transparency is customarily trained on elected officials as a means of ethical oversight, our research documents the benefits of increased transparency into the delivery of government services.

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Cases & Course Materials

  • Harvard Business School Case 714-417

A Note on Strategic Interaction

No abstract available.

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  • Harvard Business School Case 714-421

Taking Dell Private

In July 2012, Michael Dell, CEO and founder of Dell, Inc., met with a representative of Silver Lake Partners to explore taking his company private. The company, which he had founded in his dorm room as a college freshman and which had made him the youngest Fortune 500 CEO in history, had been the market leader in PC sales in the early 2000s. In recent years, however, competitors had surpassed the company, and, worse, the PC market was becoming less lucrative due to overseas competition, longer turnover rates on PCs, and the rise of tablets and smartphones. Michael Dell hoped to respond by shifting the company from its core to a "new Dell" based around "Enterprise Solutions and Software" (such as servers, consulting, and software-as-a-service) and now claimed he needed to take the company private to do so. By the summer of 2013, the Dell board and its shareholders would have to decide whether to accept his offer to take the company private for $13.65 a share. Meanwhile, Carl Icahn bought a large stake in Dell, Inc., accused Dell of trying to steal the company, and urged shareholders to rebel and demand a "leveraged recapitalization" instead. This case presents the information the Dell board worked with as it debated its decision.

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  • Harvard Business School Case 514-021

Catalina in the Digital Age

No abstract available.

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Knowledge management is a subject of broad interest, especially in "knowledge industries" and "knowledge economies." It is also a topic filled with frustration on the part of practitioners, and the level of resource commitment to this function waxes and wanes. This note focuses on a sector where knowledge is the very basis of its offering-professional service firms. One element of competitive success is the extent to which a professional service firm can harness and increase the knowledge of its professionals, making knowledge of individuals an asset of the firm. Historically the focus has been on "codification" with a focus on IT applications. More recently, with Web 2.0, there is an increasing emphasis on collaboration so that individuals are interacting with each other, not simply documents. This note, based on extensive interviews in more than 20 professional service firms, describes the knowledge management challenge in professional service firms and how to address it. The note traces the history of knowledge management in professional service firms, examines the current state of practice, and speculates about possible future directions in which it will evolve.

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  • Harvard Business School Case 914-013

The Morning Star Company: Self-Management at Work

Morning Star, a collection of affiliated companies, had grown steadily since 1970 when Chris Rufer, president and founder, started the business hauling tomatoes to processing plants in a truck. The company's main products continued to be tomato-based, including a 40% share in the tomato paste and diced tomato market in 2013. Different from traditional manufacturing companies, Morning Star relied on self-management to execute the work in any part of the organization. The company was built on individual freedom, with the expectation that employees would take responsibility for holding their peers accountable and address performance failures directly. The case explores how the company can establish a compensation model that fairly compensates employees for their performance and provides a broad incentive to hold others accountable, while being consistent with self-management. This case includes color exhibits.

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  • Harvard Business School Case 314-043

Harold Mills at ZeroChaos (A)

No abstract available.

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This is the syllabus and course outline for "Entrepreneurship in Healthcare IT and Services (EHITS)," taught by Professor Bob Higgins in the fall of 2013. Contains the course overview, objectives, goals, and themes.

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  • Harvard Business School Case 213-134

8 Spruce Street

No abstract available.

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  • Harvard Business School Case 714-413

Tesla Motors

In mid-2013, Tesla Motors was riding a wave of success: it had launched its first really mass-produced car-the model S-to rave reviews; had recently raised first-year production targets; and had started taking orders for its next car, the Model X. Tesla seemed to be on its way to defy the skeptics and become the first U.S. company to enter the car industry with a mass-produced car since WWII and the first to successfully launch a fully electric car. Or was it not?

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