First Look

September 10, 2013

Advancing Academia's Understanding Of Hq

An effective central headquarters operation is essential to corporate success, many scholars agree, but just how HQ works to achieve such effectiveness is something of an understudied research topic. David J. Collis and colleagues attempt to remedy that understanding gap with a review of the fragmented literature, offering a framework for other scholars to build upon. "One of the most promising opportunities for future research refers to the urgent need to enhance the inconclusive knowledge of the CHQ's impact on process, strategic, and performance outcomes," the scholars observe. The paper, coauthored by Collis, Markus Menz, and Sven Kunisch, is called What Do We Know About Corporate Headquarters? A Review, Integration, and Research Agenda.

Beauty Secrets: What Geisha Know

A chance encounter with a modern-day geisha launched Vicky Tsai's career in beauty products, a story detailed in a new case study about the early years of her California company, TATCHA. Students reading the case will decide along with Tsai as she considers an acquisition offer and debates the merits of exiting her business. The case, "TATCHA: Marketing the Beauty Secrets of Japanese Geisha," was written by Geoffrey G. Jones and Veronica Tong.

Immigration And Innovation

As political waters heat up over the subject of immigration, William Kerr summarizes what we know about high-skilled immigrants and their effects on American innovation and entrepreneurship. Download his working paper, U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence.

— Sean Silverthorne


  • 2006
  • Regional Studies

Spatial Determinants of Entrepreneurship in India

By: Ghani, Ejaz, William R. Kerr, and Stephen O'Connell

Abstract—We analyze the spatial determinants of entrepreneurship in India in the manufacturing and services sectors. Among general district traits, quality of physical infrastructure and workforce education are the strongest predictors of entry, with labor laws and household banking quality also playing important roles. Looking at the district-industry level, we find extensive evidence of agglomeration economies among manufacturing industries. In particular, supportive incumbent industrial structures for input and output markets are strongly linked to higher establishment entry rates. We also find substantial evidence for the Chinitz effect where small local incumbent suppliers encourage entry. The importance of agglomeration economies for entry hold when considering changes in India's incumbent industry structures from 1989, determined before large-scale deregulation began, to 2005.

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  • 2006
  • Psychological Science

Time, Money, and Morality

By: Gino, F., and C. Mogilner

Abstract—Money, a resource that absorbs much daily attention, seems to be present in much unethical behavior thereby suggesting that money itself may corrupt. This research examines a way to offset such potentially deleterious effects-by focusing on time, a resource that tends to receive less attention than money but is equally ubiquitous in our daily lives. Across four experiments, we examine whether shifting focus onto time can salvage individuals' ethicality. We found that implicitly activating the construct of time, rather than money, leads individuals to behave more ethically by cheating less. We further found that priming time reduces cheating by making people reflect on who they are. Implications for the use of time versus money primes in discouraging or promoting dishonesty are discussed.


Working Papers

Abstract—We examine how linguistic complexity affects the capital market reaction to information disclosures. We define linguistic complexity as the use of non-plain English stemming from language barriers. Using transcripts from the English-language conference calls of non-U.S. firms, we find that linguistic complexity is positively associated with the language barriers in the firms' home country. We then show that conference calls that are more linguistically complex show lower price movement, lower trading volume, and more dispersion in analyst forecasts following the calls. Further, the capital market's response to linguistic complexity is limited to firms for which there is greater demand for English-language conference calls. Our results highlight that when disclosure takes the form of verbal communication, the complexity in the narrative impacts the market reaction to the disclosure.

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Abstract—This working paper examines the growth of corporate environmentalism in the West German chemical industry between the 1950s and the 1980s. German business has been regarded as pioneering corporate environmentalism after World War II. In contrast, this study reveals major commonalities between the sustainability strategies of leading German and American firms until the 1970s. However during that decade the German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism of their pollution impact, but also to create opportunities for changes in corporate culture to encourage sustainability. While the U.S. chemical industry remained defensive and focused on legal compliance, there was a greater proactivity among the German firms. This paper stresses the importance of regional embeddedness of leading firms in the state of North Rhine-Westphalia, which made their reputations especially vulnerable to criticism. The research supports organizational sociology theory, which has identified the importance of visibility in corporate green strategies. The German chemical firms were pioneers in understanding that investing in environmental sustainability could provide an opportunity to create value for the firm by delivering both commercial and reputational benefits.

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Abstract—High-skilled immigrants are a very important component of U.S. innovation and entrepreneurship. Immigrants account for roughly a quarter of U.S. workers in these fields, and they have a similar contribution in terms of output measures like patents or firm starts. This contribution has been rapidly growing over the last three decades. In terms of quality, the average skilled immigrant appears to be better trained to work in these fields, but conditional on educational attainment of comparable quality to natives. The exception to this is that immigrants have a disproportionate impact among the very highest achievers (e.g., Nobel Prize winners). Studies regarding the impact of immigrants on natives tend to find limited consequences in the short-run, while the results in the long-run are more varied and much less certain. Immigrants in the United States aid business and technology exchanges with their home countries, but the overall effect that the migration has on the home country remains unclear. We know very little about return migration of workers engaged in innovation and entrepreneurship, except that it is rapidly growing in importance.

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Abstract—During the past five decades, scholars have studied the corporate headquarters (CHQ)-the multidivisional firm's central organizational unit. The purpose of this article is to review the diverse and fragmented literature on the CHQ and to identify the variables of interest, the dominant relationships, and the contributions. We integrate, for the first time, the existing knowledge of the CHQ into an organizing framework. Based on a synthesis of the literature, we identify major shortcomings and gaps and present an agenda for future research that contributes to our understanding of the CHQ and the multidivisional firm.

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Cases & Course Materials

  • Harvard Business School Case 512-049

Bluefin Labs

Bluefin Labs built a system that gathered, from Twitter and other sources, millions of hourly social media postings, comments, and views on television in an effort to build a new set of metrics to describe TV programs and broadcast advertising. Co-Founder and CEO Deb Roy said: "We want to measure audience engagement, not just media consumption." But what was the value of audience engagement? How could it be quantified and factored into the analyses necessary for making programming decisions and setting advertising rates? Nielsen had become the gold standard in the broadcast industry and felt confident in their data. Could Bluefin's system provide new insights to marketers and broadcasters? Or would it merely tell them what they already know?

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  • Harvard Business School Case 213-033

Introduction to Private Equity Finance

This note will aid in introducing students to the Private Equity Finance course.

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  • Harvard Business School Case 313-149

TATCHA: Marketing the Beauty Secrets of Japanese Geisha

This case considers the creation and early growth of California-based TATCHA, a Japanese-themed luxury beauty brand. It explores how Vicky Tsai developed the concept, assembled financial and management resources, and launched the first product of Japanese blotting paper in 2009 using a grassroots marketing campaign. Identifying a 200-year-old book employed by Japanese geisha, Tsai started to diversify her product line into skin and other cosmetic products. The case ends in December 2010 with Tsai receiving an acquisition offer and debating the merits of exiting or continuing to build her business.

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  • Harvard Business School Case 313-139

Note on Pension Guarantee Funds

The United States and the United Kingdom both had quasi-government agencies that provided backup insurance for individuals participating in defined benefit (DB) pension plans. This note compares and contrasts the United Kingdom's Pension Protection Fund (PPF) with the United States' Pension Benefit Guaranty Corporation (PBGC) to illustrate the implications of poorly designed policy structures (the PBGC) in contrast to those created by well-designed policy (the PPF). Specifically, this note analyzes how differences in governance structure, termination capabilities, funding mechanisms, and asset management policies created distinctly different financial outcomes and incentive structures.

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