HBS Center Focuses on Europe

The Euro is changing the face of business in Europe, and Harvard Business School’s Europe Research Center is right in the middle of it all.
by Cynthia Churchwell

The Europe Research Center (ERC) is the newest of Harvard Business School's Global Initiative research centers, having opened its doors in July 2002. With the political and economic currents now affecting relations between the United States and many European nations, it seemed a good time to talk via e-mail with Executive Director Vincent Dessain (HBS MBA '87), and Research Associate Anders Sjöman.

The School's five centers are charged with supporting the research needs of faculty and developing case studies in their regions. In addition, each center builds relationships with business and political leaders, educational institutions, and local alumni. In Europe, a group of executives and professionals, all HBS alumni, form the European Leadership Council (ELC), which provides advice on the work of the ERC.

Cynthia Churchwell: Tell us a little about the ERC's case production so far.

Vincent Dessain and Anders Sjöman: In the first eighteen months of operation (July 2002 through December 2003), thirty-eight faculty members were supported in either course development projects or research activities. So far, ten case projects have been completed, with an additional five close to completion. In addition, the ERC has been involved in about thirty course development projects, for instance by searching for appropriate case sites for a faculty member, facilitating company contacts, or participating in European interviews.

European companies are increasingly competing in a unified European market with the introduction of the Euro.
— Vincent Dessain

With the support of the ERC, the geographic distribution of European cases is shifting to the continent with a wide spread of countries represented including France, Germany, Hungary, Italy, Spain, Switzerland, Sweden, and the U.K. The nature of cases is changing as well, with more cases focusing on international and global issues, as compared to single-country cases that are easier for a faculty member to do on his or her own. (See More on this Article for case information.)

Q: How do European companies feel about the opportunity to have an HBS case written about them? Isn't it very unusual to be studied up-close in this fashion?

Dessain: The Harvard Business School name is well known in Europe, but there are still a relatively small number of alumni in senior management positions here compared to the U.S. There is also little familiarity with the nature of our case writing and research. This poses some challenges that are less of an issue with U.S.-based cases. We have especially found that the decision to allow HBS to write a case about the company tends to be centralized and requires the approval of a top person at the head office, often the CEO.

However, once the CEO or chairman is on board with the project, the case writing process flows very smoothly. The approval process may require a substantial amount of effort and calendar time up-front, but the payoff in the form of case quality is directly correlated.

Q: Tell us about a few cases that the ERC has been working on. What company challenges have you found to be the most interesting and strike you as unique to Europe?

Sjöman: The Alessi case series, which we worked on in early 2003, probably best illustrates the full range of what we do at the ERC. The center approached Alessi, a medium-sized tableware company in Italy, at the request of professors Youngme Moon and Gail McGovern for a case in the Consumer Marketing MBA elective. Working through Alessandro Benneton, a member of the European Leadership Council, we obtained company approval to start a case and then arranged interviews with top management and a designer. ERC co-wrote the case with Professor Moon and then worked with the company to obtain releases. The case was then taught in November 2003 to 180 MBA students.

Dessain: In general, European companies are increasingly competing in a unified European market with the introduction of the Euro. This new landscape offers new business opportunities and possibilities to write cases that show very multicultural environments fairly unique to Europe.

Parallel to that trend of a unifying European market, the role of the public sector has gained importance particularly at the European level; and the European corporate world has to work with the public sector at regional, national, and European levels, and that adds complexity to conducting business.

You should know also that for some projects we collaborate with the other HBS Research Centers. For instance, (HBS professor) Tarun Khanna is working with the Asia-Pacific Research Center in Hong Kong and the Global Research Group in Boston on a case about a large financial services group. For the interviews at the group's head office in Europe, we were happy to provide interview help for APRC.

Q: Europe does not have a strong history of fostering entrepreneurship. Do you see entrepreneurs gaining more success and acceptance in the future?

Sjöman: Popular wisdom has it that Europe is less entrepreneurial, but let's not forget that companies such as Swedish IKEA, French Carrefour, German SAP, and British Virgin were all founded on ideas from budding entrepreneurs from this generation. Still, it is true that entrepreneurship is not always encouraged in the European Union.

Dessain: The private equity market is growing fast in Europe and more and more entrepreneurs look at Europe as one market rather than launching a company in one country. Several European entrepreneurs are also considering going global at a very early stage.

The case we wrote with (HBS senior lecturer) Mike Roberts about Direvo nicely shows how entrepreneurship in Europe works. It describes the growth decisions facing Direvo, a young German biotech firm, when one of their partners suddenly wants to become an investor and the company expands both its customer and investor base in Europe and not just in Germany. Still a relatively small company, it is now considering expanding into the U.S. as well.

Q: What business trends are you noticing?

Dessain: Currently European companies are focusing a lot of effort on sustainable development and other environmental concerns. ERC is supporting Professor Estelle Cantillon in strategy with a research project on greenhouse gas emissions controls.

The Center runs roundtable discussions that give faculty an opportunity to meet with the business community.
— Anders Sjöman

Another trend, just as in the U.S., is shareholder activism and corporate governance rules, which have been made tougher following some of the corporate scandals we have seen here.

In 2004, we also expect mergers and acquisitions activity to heat up as many industries are consolidating on a European or global basis. Industries that we are watching include airlines, pharma, and financial services.

Q: What roles do you see the ERC office playing in the sharing of management knowledge in the future?

Sjöman: To share the management knowledge, the Center runs roundtable discussions that give faculty an opportunity to meet with the business community to discuss their research ideas and offer alumni and other businesspeople a means to learn about HBS research in progress. We also regularly send samples of cases and research work to faculty at European academic institutions.

Dessain: All in all, we are off to a good start. In 2003, we were even named the year's most innovative intellectual R&D investment by the Paris-Ile de France Chamber of Commerce. That sets a good standard that we will continue to work to meet and exceed.

About the Author

Cynthia Churchwell is a business information librarian at Baker Library, Harvard Business School, with a specialty in the international economy.