First Look

Publications

Producing Prosperity: Why America Needs a Manufacturing Renaissance

Abstract

For years-even decades-in response to intensifying global competition, American companies decided to outsource their manufacturing operations in order to reduce costs. But we are now seeing the alarming long-term effect of those choices: in many cases, once manufacturing capabilities go away, so does much of the ability to innovate and compete. Manufacturing, it turns out, really matters in an innovation-driven economy. In Producing Prosperity, Harvard Business School professors Gary Pisano and Willy Shih show the disastrous consequences of years of poor sourcing decisions and underinvestment in manufacturing capabilities. They reveal how today's undervalued manufacturing operations often hold the seeds of tomorrow's innovative new products, arguing that companies must reinvest in new product and process development in the U.S. industrial sector. Only by reviving this "industrial commons" can the world's largest economy build the expertise and manufacturing muscle to regain competitive advantage. America needs a manufacturing renaissance-for restoring itself and for the global economy as a whole. This will require major changes. Pisano and Shih show how company-level choices are key to the sustained success of industries and economies, and they provide business leaders with a framework for understanding the links between manufacturing and innovation that will enable them to make better outsourcing decisions. They also detail how government must change its support of basic and applied scientific research and promote collaboration between business and academia. For executives, policymakers, academics, and innovators alike, Producing Prosperity provides the clearest and most compelling account yet of how the American economy lost its competitive edge-and how to get it back.

Publisher's Link: http://hbr.org/product/producing-prosperity-why-america-needs-a-manufactu/an/10345-HBK-ENG?referral=00304

Relaxing the Taboo on Telling Our Own Stories: Upholding Professional Distance and Personal Involvement

Abstract

Scholars studying organizations are typically discouraged from telling, in print, their own stories. The expression "telling our own stories" is used as a proxy for field research projects that, in their written form, explicitly rely on a scholar's personal involvement in a field. (By personal involvement in a field, I mean a scholar's engagement in a set of mental activities that connect her to a field.) The assumption is that personal involvement is antithetical to maintaining professional distance. In this paper, I argue that the taboo against telling our own stories stems in part from an epistemological misunderstanding. Learning from the field entails upholding both distance and involvement; the two dimensions should not be conceptualized as opposite ends of a continuum. Moreover, I suggest that the taboo has become too extreme and stifles our collective capacity to generate new insights. To make this argument, I start by discussing the general taboo against telling one's own stories. Second, I focus on the rationale set forth to justify not only the taboo but also its limitations. Third, I examine what distance entails and how involvement, far from lessening distance, creates opportunities for generating potentially strong theoretical insight. Fourth, I showcase several areas of theoretical development that might benefit from revisiting the taboo. I conclude by reviewing key practical implications of such a shift for our profession and by arguing that organizational scholarship could gain a great deal from relaxing the taboo.

Lessons for the Financial Sector from 'Preventing Regulatory Capture: Special Interest Influence, and How to Limit It'

Abstract

An abstract is unavailable at this time.

Order the book: http://www.icffr.org/Research/Research-Publications/ICFR-Publication---The-Making-of-Good-Financial-Re.aspx

How 'Big Data' Is Different

Abstract

Many people today in the information technology world and in corporate boardrooms are talking about "big data." Many believe that, for companies that get it right, big data will be able to unleash new organizational capabilities and value. But what does the term "big data" actually entail, and how will the insights it yields differ from what managers might generate from traditional analytics?

Does Power Corrupt or Enable: Moral Identity, Power and Self-Serving Behavior

Abstract

Does power corrupt a moral identity, or does it enable a moral identity to emerge? Drawing from the power literature, we propose that the psychological experience of power, although often associated with promoting self-interest, is associated with greater self-interest only in the presence of a weak moral identity. Furthermore, we propose that the psychological experience of power is associated with less self-interest in the presence of a strong moral identity. Across a field survey of working adults and in a lab experiment, individuals with a strong moral identity were less likely to act in self-interest, yet individuals with a weak moral identity were more likely to act in self-interest, when subjectively experiencing power. Finally, we predict and demonstrate an explanatory mechanism behind this effect: the psychological experience of power enhances moral awareness among those with a strong moral identity, yet decreases the moral awareness among those with a weak moral identity. In turn, individuals' moral awareness affects how they behave in relation to their self-interest.

The Client Is King: Do Mutual Fund Relationships Bias Analyst Recommendations?

Abstract

This article investigates whether the business relations between mutual funds and brokerage firms influence sell-side analyst recommendations. Using a unique data set that discloses brokerage firms' commission income derived from each mutual fund client as well as the share holdings of these mutual funds, we find that an analyst's recommendation on a stock relative to consensus is significantly higher if the stock is held by the mutual fund clients of the analyst's brokerage firm. The optimism in analyst recommendations increases with the weight of the stock in a mutual fund client's portfolio and the commission revenue generated from the mutual fund client. However, this favorable recommendation bias towards a client's existing portfolio stocks is mitigated if the stock in question is highly visible to other mutual fund investors. Abnormal stock returns are significantly greater both for the announcement period and in the long run for favorable stock recommendations from analysts not subject to client pressure than for equally favorable recommendations from business-related analysts. In addition, we find that subsequent to announcements of bad news from the covered firms, analysts are significantly less likely to downgrade a stock held by client mutual funds. Mutual funds increase their holdings in a stock that receives a favorable recommendation, but this impact is significantly reduced if the recommendation comes from analysts subject to client pressure.

Leadership Is Associated with Lower Levels of Stress

Abstract

As leaders ascend to more powerful positions in their groups, they face ever-increasing demands. This has given rise to the common perception that leaders have higher stress levels than non-leaders. But if leaders also experience a heightened sense of control-a psychological factor known to have powerful stress-buffering effects-leadership should be associated with reduced stress levels. Using unique samples of real leaders, including military officers and government officials, we found that, compared to non-leaders, leaders had lower levels of the stress hormone cortisol and lower reports of anxiety (Study 1). In a second study, leaders holding more powerful positions exhibited lower cortisol levels and less anxiety than leaders holding less powerful positions, a relationship explained significantly by their greater sense of control. Altogether, these findings reveal a clear relationship between leadership and stress, with leadership level being inversely related to stress.