First Look

July 26, 2016

Among the highlights included in new research papers, case studies, articles, and books released this week by Harvard Business School faculty:

Looking under Disney's 'tentpole' strategy

Walt Disney Studios has a unique strategy among major Hollywood studios: "Disney produces nearly twice as many tentpole [blockbuster] movies as any other major Hollywood film studio, but fewer movies overall than all but one of its rivals," according to Anita Elberse, who outlines the risky big-bet strategy in a new case study, The Walt Disney Studios.

The right way to show distress at work

Employees can been seen as less competent if they express distress at work. Alison Wood Brooks and colleagues suggest this problem can be mitigated if the person reframes their distress in terms of passion. Managing Perceptions of Distress at Work: Reframing Emotion as Passion, is scheduled to be published in a forthcoming issue of the journal Organizational Behavior and Human Decision Processes.

Quick payment boosts employment growth

A decision in 2011 by the federal government to pay its small contractors in just 15 days had a surprising effect: job growth. "... we find payroll increased 10 cents for each accelerated dollar, with two-thirds of the effect coming from an increase in new hires and the balance from an increase in earnings," write researchers Jean-Noel Barrot and Ramana Nanda. Read their study, Can Paying Firms Quicker Affect Aggregate Employment?

A complete list of new research and publications from Harvard Business School faculty follows.

— Sean Silverthorne
 
  • June 2016
  • PLoS ONE

Social and Spatial Clustering of People at Humanity's Largest Gathering

By: Barnett, Ian, Tarun Khanna, and Jukka-Pekka Onnela

Abstract—Macroscopic behavior of scientific and societal systems results from the aggregation of microscopic behaviors of their constituent elements, but connecting the macroscopic with the microscopic in human behavior has traditionally been difficult. Manifestations of homophily, the notion that individuals tend to interact with others who resemble them, have been observed in many small and intermediate size settings. However, whether this behavior translates to truly macroscopic levels, and what its consequences may be, remains unknown. Here, we use call detail records (CDRs) to examine the population dynamics and manifestations of social and spatial homophily at a macroscopic level among the residents of 23 states of India at the Kumbh Mela, a three-month-long Hindu festival. We estimate that the festival was attended by 61 million people, making it the largest gathering in the history of humanity. While we find strong overall evidence for both types of homophily for residents of different states, participants from low-representation states show considerably stronger propensity for both social and spatial homophily than those from high-representation states. These manifestations of homophily are amplified on crowded days, such as the peak day of the festival, which we estimate was attended by 25 million people. Our findings confirm that homophily, which here likely arises from social influence, permeates all scales of human behavior.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51392

  • May 2016
  • Seminars in Oncology Nursing

Transformation of Health Care—Perspectives of Opinion Leaders

By: Disch, Joanne, Thomas W. Feeley, Diana J. Mason, Richard L. Schilsky, Ellen L. Stovall, and Shelley Fuld Nasso

Abstract—"What Health System Transformations Do You Believe Are Necessary for the Future of Health Care?" We need to transform to a true value-based health care delivery system. That means organizing care around medical conditions, not simply around hospitals and doctors. We need to do more team-based medicine and to better integrate specialty care with primary care. We need to be doing a better job measuring health outcomes that matter to patients, which includes patient-reported outcomes and clinician-reported outcomes. These need to be used for internal improvement in health care delivery organizations, as well as for public reporting, so that patients can make informed choices about their health care. We need to do a better job measuring, reporting and controlling the costs of health care so that our economy can improve and so that patients can make informed decisions. We must move away from fee-for-service reimbursement, which incentivizes doing more, and begin paying for good outcomes. Health care organizations need to stop duplicating every service and have centers of excellence with high-volume experts. Finally, we need better health information technology systems to facilitate knowledge transmission and communication.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51385

  • forthcoming
  • Academy of Management Journal

Selective Regulator Decoupling and Organizations' Strategic Responses

By: Heese, Jonas, Ranjani Krishnan, and Frank Moers

Abstract—We posit that nonprofits that provide a greater supply of unprofitable services (beneficent nonprofits) face lenient regulatory enforcement for mispricing in price-regulated markets. Consequently, beneficent nonprofits exploit such regulatory leniency and exhibit higher mispricing. Drawing on organizational legitimacy theory, we argue that both regulators and beneficent nonprofits seek to protect their legitimacy with stakeholders, including those who demand access to unprofitable services. Using data from hospitals, we examine mispricing via "upcoding," which involves misclassifying ailment severity. Archival analysis indicates less stringent regulatory enforcement of upcoding for beneficent nonprofit hospitals, defined as hospitals that provide higher charity care and medical education. After observing regulator leniency, beneficent hospitals demonstrate higher upcoding. Our results suggest that lenient enforcement assists beneficent nonprofits to obtain higher revenues in price-regulated markets.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51394

  • in press
  • Organizational Behavior and Human Decision Processes

Overcoming the Outcome Bias: Making Intentions Matter

By: Sezer, Ovul, Ting Zhang, Francesca Gino, and Max Bazerman

Abstract—People often make the well-documented mistake of paying too much attention to outcomes of others' actions while neglecting information about the original intentions leading to those outcomes. In four experiments, we examine interventions aimed at reducing the outcome bias. Contrary to our initial predictions, individuals weighed others' outcomes more—not less—when fair intentions leading to undesirable outcomes and selfish intentions leading to desirable outcomes were presented jointly rather than separately (Experiment 1). Separate evaluation reduced the outcome bias even when participants were merely observers unaffected by the outcomes reached (Experiment 2). Complex information intensified the outcome bias under joint evaluation (Experiment 3). Finally, raising the salience of intentions prior to discovering outcomes helped joint evaluators overcome the outcome bias (Experiment 4).

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51396

  • forthcoming
  • Organizational Behavior and Human Decision Processes

Managing Perceptions of Distress at Work: Reframing Emotion as Passion

By: Wolf, Elizabeth Baily, Jooa Julia Lee, Sunita Sah, and Alison Wood Brooks

Abstract—Expressing distress at work can have negative consequences for employees: observers perceive employees who express distress as less competent than employees who do not. Across five experiments, we explore how reframing a socially inappropriate emotional expression (distress) by publicly attributing it to an appropriate source (passion) can shape perceptions of, and decisions about, the person who expressed emotion. In Studies 1a-c, participants viewed individuals who reframed distress as passion as more competent than those who attributed distress to emotionality or made no attribution. In Studies 2a-b, reframing emotion as passion shifted interpersonal decision making: participants were more likely to hire job candidates and choose collaborators who reframed their distress as passion compared to those who did not. Expresser gender did not moderate these effects. Results suggest that in cases when distress expressions cannot or should not be suppressed, reframing distress as passion can improve observers' impressions of the expresser.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51400

Can Paying Firms Quicker Affect Aggregate Employment?

By: Barrot, Jean-Noel, and Ramana Nanda

Abstract—In 2011, the federal government accelerated payments to their small business contractors, spanning virtually every county and industry in the United States. We study the impact of this reform on county-sector employment growth over the subsequent three years. Despite firms being paid just 15 days sooner, we find payroll increased 10 cents for each accelerated dollar, with two-thirds of the effect coming from an increase in new hires and the balance from an increase in earnings. Importantly, however, we document substantial crowding out of non-treated firms employment, particularly in counties with low rates of unemployment. Our results highlight an important channel through which financing constraints can be alleviated for small firms, but also emphasize the general-equilibrium effects of large-scale interventions, which can lead to a substantially lower net impact on aggregate outcomes.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51383

  • Harvard Business School Case 116-043

Revitalizing State Bank of India

State Bank of India is India’s oldest and largest bank with the government of India as its majority shareholder. Arundhati Bhattacharya, a 35-year-old veteran of the bank, is appointed as its chairman in October 2013. Her appointment coincides with Moody’s downgrading the bank’s debt due to rising nonperforming assets. She embarks on a mission to improve the bank’s risk taking and management abilities, ensure uniform customer experience, and encourage greater collaboration among various verticals. Her efforts help the bank reduce its nonperforming assets and improve its profitability. However, Bhattacharya knows that these gains will be fleeting without the development of a trained workforce who can address 21st century industry problems with speed and creativity. This requires transforming SBI into a performance-oriented bank supported by a new career development and remuneration system. Bhattacharya wonders if attempting to change the culture of a 206-year-old mammoth organization is feasible or a mere pipe dream.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/116043-PDF-ENG

  • Harvard Business School Case 516-105

The Walt Disney Studios

In December 2015, Alan Horn, chairman of The Walt Disney Studios, celebrates the world premiere of Star Wars: The Force Awakens—only the latest in a string of big bets that he has overseen. Disney pursues a “tentpole strategy” that revolves around at least eight big-budget movies each year—most from its acquired labels Pixar, Marvel Studios, and Lucasfilm. In fact, Disney produces nearly twice as many tentpole movies as any other major Hollywood film studio, but fewer movies overall than all but one of its rivals. Box-office failures can be extremely costly, since Disney (unlike its rivals) chooses not to enlist the help of financing partners. Is Disney Studios pursuing the right number of tentpoles, as well as the right mix of new versus existing properties, under the right financing structure? And will the tentpole strategy pay off—in the short and long run?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516105-PDF-ENG

  • Harvard Business School Case 616-063

Coca-Cola in Vietnam

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/616063-PDF-ENG

Pal's Sudden Service has developed a unique operating model and organizational culture in the quick-service restaurant business. With a deep emphasis on process control and improvement, zero defects, extensive training, and a high level of employee engagement, Pal's has been able to achieve excellent operating and financial performance. The case examines the challenges it potentially faces as it contemplates growing the chain significantly from the 28 units it currently operates.

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https://cb.hbsp.harvard.edu/cbmp/product/916052-PDF-ENG

  • Harvard Business School Case 716-444

Detroit: On the Right Track?

As this case opens in 2012, a cross-sector alliance to bring new rail transport to the Motor City seems about to collapse, and civic leaders have one last chance to save it. The case covers the rise of Detroit, the city’s devastating fall, and the ongoing potential revival of the city. It allows a discussion of what causes cities to thrive and to fail, with a special emphasis on the roles of cross-sector collaboration and transportation infrastructure.

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https://cb.hbsp.harvard.edu/cbmp/product/716444-PDF-ENG

  • Harvard Business School Case 316-177

The Priceline Group: Booking a Place for the Future

The chairman of the Priceline Group is considering the actions he must take to confront an evolving external environment, new direct competition, disintermediation, and substitute offerings. Does his response require an increased coordination of each historically autonomous division or some other approach?

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https://cb.hbsp.harvard.edu/cbmp/product/316177-PDF-ENG

  • Harvard Business School Case 216-076

Prudential Financial and Asset-Liability Management

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/216076-PDF-ENG

  • Harvard Business School Case 516-094

Airbnb, Etsy, Uber: Acquiring the First Thousand Customers

By 2016, two-sided online platforms (or marketplaces) were pervasive among the highest growing internet startups around. These marketplaces sought to match suppliers of assets for rent, physical products, or services with customers demanding them. Among the most notable two-sided platforms in terms of their tremendous early growth were Airbnb, Etsy, and Uber. They offered short-term property rentals, handcrafted goods, and car rides, respectively. As two-sided markets grew to scale, network effects kicked in as more consumers bred more suppliers and vice versa. But how did these platforms acquire their first customers at the time when they had so few providers? How exactly did they go about acquiring their first thousand customers?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516094-PDF-ENG

By 2016, two-sided online platforms (or marketplaces) were pervasive among the highest growing internet startups around. These marketplaces sought to match suppliers of assets for rent, physical products, or services with customers demanding them. Among the most notable two-sided platforms in terms of their tremendous early growth were Airbnb, Etsy, and Uber. They offered short-term property rentals, handcrafted goods, and car rides, respectively. As two-sided markets grew to scale, network effects kicked in as more consumers bred more suppliers and vice versa. But how did these platforms ride the second wave of growth? How did they grow from one thousand to one million customers?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516108-PDF-ENG

  • Harvard Business School Case 616-049

Curtis LLP: A Case on Cases

A product market firm faces an inventory investment decision in the face of demand uncertainty. To hedge against some of the uncertainty, the firm contemplates an additional fixed investment that would offer the flexibility of diverting inventory in case of weak sales. In a follow-up case, the repercussions of this flexibility are explored.

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https://cb.hbsp.harvard.edu/cbmp/product/616049-PDF-ENG

  • Harvard Business School Case 616-050

Financing Curtis LLP

This is a follow-up to "Curtis LLP: A Case on Cases," HBS case No. 616-049. It explores the challenges facing debtors when dealing with borrowing firms that have operational flexibility.

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https://cb.hbsp.harvard.edu/cbmp/product/616050-PDF-ENG