First Look

June 14, 2016

Turning off the 'always available' office

Remember when a weekend was a few days away from work? Easy and instant communication makes it convenient for employees to be always connected to work, but the results are often harmful emotionally and developmentally, write Erin Reid and Lakshmi Ramarajan. Their article, Managing the High Intensity Workplace: An 'Always Available' Culture Breeds a Variety of Dysfunctional Behaviors, published in the June issue of Harvard Business Review, includes tips for managers on how to control this practice.

The good ideas from shareholders that managers ignore

A review of shareholder proposals first rejected by management shows that 28 percent ultimately win shareholder or management approval. "Our analysis of contested shareholder proposals suggests that managers often seek to avoid the implementation of legitimate shareholder interests," write the working paper's authors, Eugene F. Soltes, Suraj Srinivasan, and Rajesh Vijayaraghavan. The paper is titled What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management.

Who owns the whale?

A new case study, Who Owns the Whale?, delves into a legal dispute in which three fishing boats claim ownership of a whale carcass—all three contributed to killing the animal. "The judge must weigh in the differing efforts and costs of three ships that each played a role at different stages of the hunting process, as well as the prevalent norms of ownership at the time," according to authors Thales S. Teixeira and David E. Bell.

— Sean Silverthorne
 
  • forthcoming
  • Harvard Business Review Press

Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work

By: Badaracco, Joseph L.

Abstract—Part of a manager's job is making tough calls, and the hardest challenge can be resolving "gray area” problems—situations in which analysis of the numbers, facts, and data fails to provide a clear answer. Gray areas test not only managers’ skills but also their humanity. This book presents a five-question framework—based on the long humanist tradition of thinking about what makes for good decisions and good lives—and offers a way for managers to balance the analytical side of their work with the human side and find a sound way forward when analysis falls short.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50601

  • forthcoming
  • Patent Assertion Entities and Competition Policy

Empirical Evidence on the Behavior and Impact of Patent Trolls: A Survey

By: Cohen, Lauren, Umit Gurun, and Scott Duke Kominers

Abstract—We survey the empirical literature on non-practicing entity (NPE) litigation behavior and its consequences. We document both aggregate trends and cross-sectional differences amongst various types of NPEs. Survey evidence illustrates a number of ways in which NPEs can potentially act opportunistically and indicates at least some instances and consequences of observed NPE opportunism. Large-sample empirical work has recently begun corroborating and amplifying the findings from survey evidence. NPEs on average behave as "patent trolls." Indeed, NPEs hold and frequently litigate patents that are likely to be at least partially invalidated; moreover, NPEs target cash irrespective of its relation to alleged infringement. Cash-targeting is neither the main driver of practicing entity (PE) intellectual property (IP) litigation, nor of non-IP litigation against publicly traded firms. The empirical evidence suggests, however, that not all NPEs exhibit trolling behavior—the cash-targeting observed in the data is primarily the behavior of large patent aggregators, rather than small inventors. NPE patent trolling has a real negative impact on targeted firms, without any increase in innovation, technology transfer, or other counterbalancing benefits measured thus far.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50614

  • June 2016
  • Harvard Business Review

Wicked Problem Solvers: Lessons from Successful Cross-industry Teams

By: Edmondson, Amy C.

Abstract—Companies today increasingly rely on teams that span many industries for radical innovation, especially to solve “wicked problems.” So leaders have to understand how to promote collaboration when roles are uncertain, goals are shifting, expertise and organizational cultures are varied, and participants have clashing or even antagonistic perspectives. I have studied more than a dozen cross-industry innovation projects, among them the creation of a new city, a mango supply-chain transformation, and the design and construction of leading-edge buildings. I have identified the leadership practices that make successful cross-industry teams work: fostering an adaptable vision, promoting psychological safety, enabling knowledge sharing, and encouraging collaborative innovation. Though these practices are broadly familiar, their application within cross-industry teams calls for unique leadership approaches that combine flexibility, open-mindedness, humility, and fierce resolve.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51140

  • 2016
  • Research in Human Development

Understanding Psychological Safety in Healthcare and Education Organizations: A Comparative Perspective

By: Edmondson, Amy C., Monica Higgins, Sara J. Singer, and Jennie Weiner

Abstract—Psychological safety plays a vital role in helping people overcome barriers to learning and change in interpersonally challenging work environments. This article focuses on two such contexts—health care and education. The authors theorize differences in psychological safety based on work type, hierarchical status, and leadership effectiveness. Consistent with prior research, the authors employ cross-industry comparison to highlight distinctive features of different professions. The goal is to illuminate similarities and differences with implications for future psychological safety research. To do this, the authors review relevant literature and present analyses of large data samples in each industry to stimulate further research on psychological safety in both sectors, separately and together.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50683

  • forthcoming
  • The Oxford Handbook of Workplace Discrimination

Organizational Remedies for Discrimination

By: Ely, R., and A. Feldberg

Abstract—Laws now exist to protect employees from blatant forms of discrimination in hiring and promotion, but workplace discrimination persists in latent forms. These “second-generation” forms of bias arise in workplace structures, practices, and patterns of interaction that inadvertently favor some groups over others. This chapter reviews research on how these biases manifest themselves in the core processes of organizations—that is, how people are hired, compensated, developed, and evaluated—all of which are aspects of organizational life that tend to privilege some groups over others. It also reviews research that points to remedies for these biases, illustrating that organizational practices can be sites for intervention and change. The chapter concludes with methodological and substantive recommendations for future research on discrimination and its remedies in organizations.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50923

  • May 2016
  • American Economic Review: Papers and Proceedings

Invention and Agglomeration in the Bay Area: Not Just ICT

By: Forman, Chris, Avi Goldfarb, and Shane Greenstein

Abstract—We document that the Bay Area rose from 4% of all successful U.S. patent applications in 1976 to 16% in 2008. This is partly driven by the increase in the prevalence of information and communication technology; however, even for patents unrelated to information and communication technology, we see a disproportionate increase in the share of U.S. patents from the Bay Area. We interpret this growth as a trend to coagglomeration in invention across technologies, and we explore different dimensions of this trend.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50818

  • forthcoming
  • The Oxford Handbook of Dynamic Capabilities

Deep Smarts as the Underpinnings of Dynamic Capabilities

By: Leonard, Dorothy A., and Michelle Barton

Abstract—Both ordinary and dynamic capabilities depend upon the deep smarts, i.e., business-critical, experience-based knowledge, held in the heads of an organization’s top talent. This chapter examines the links between individual and organizational capabilities and presents the theory and research on deep smarts. The six most universally found characteristics of this particular kind of expertise are deep domain knowledge, pattern recognition–based decision making, system perspective, context awareness, diagnostic acuity, and skilled networking. Such deep smarts, as illustrated through extensive examples of entrepreneurs, are operationalized differently in highly volatile environments than in relatively stable ones. Although deep smarts are based on experience, they are skills and abilities rather than static knowledge reservoirs. Therefore, they are particularly essential to dynamic capabilities and to innovation.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49794

  • May 2016
  • American Economic Review: Papers and Proceedings

Making Private Data Accessible in an Opaque Industry: The Experience of the Private Capital Research Institute

By: Lerner, Josh, and Leslie Jeng

Abstract—Private markets are becoming an increasingly important way of financing rapidly growing and mature firms, and private investors are reputed to have far-reaching economic impacts. These important markets, however, are uniquely difficult to study. This paper explores these challenges, as well as the ways they can be overcome, using the experiences of the Private Capital Research Institute as a case.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50642

Abstract—People today are under intense pressure to be “ideal workers”—totally committed to their jobs and always on call. But after interviewing hundreds of professionals in many fields, the authors have concluded that selfless dedication to work is often unnecessary and harmful. It has dysfunctional consequences not only for individuals but also for their organizations. The authors discuss three typical strategies for coping with demanding workplaces and the risks associated with each. Accepting involves prioritizing the job above all else and remaining available 24/7. Because accepters fail to cultivate outside interests, they’re often slow to recover from professional setbacks. And they may be too focused on their own responsibilities to mentor others—a drawback for their organizations. Passing involves portraying oneself as an ideal worker while quietly pursuing a life beyond the office. But passers may feel isolated from their colleagues because they are hiding parts of themselves, and their perpetuation of the ideal-worker myth keeps the pressure on everyone. Revealing involves openly embracing nonwork commitments. Revealers may unwittingly put their careers at risk, however, and bosses who penalize them may drive away talent. So how can organizations build a healthier—and more productive—culture? Managers can act as role models by leading multifaceted lives themselves. They can reward employees for the quality and results of their work rather than the time put into it. And they can enforce reasonable work hours, require vacations, and take other steps to protect employees’ personal lives.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51141

  • 2016
  • Organizational Routines: How They Are Created, Maintained, and Changed

Teaming Routines in Complex Innovation Projects

By: Zuzul, Tiona, and Amy C. Edmondson

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50814

Fiscal Rules and Sovereign Default

By: Alfaro, Laura, and Fabio Kanczuk

Abstract—We provide a quantitative analysis of fiscal rules in a standard model of sovereign debt accumulation and default modified to incorporate quasi-hyperbolic preferences. For reasons of political economy or aggregation of citizens’ preferences, government preferences are present biased, resulting in an over accumulation of debt. Calibrating this parameter with values in the literature, the model can reproduce debt levels and frequency of default typical of emerging markets even if the household impatience parameter is calibrated to local interest rates. A quantitative exercise calibrated to Brazil finds welfare gains of the optimal fiscal policy to be economically substantial, and the optimal rule to not entail a countercyclical fiscal policy. A simple debt rule that limits the maximum amount of debt is analyzed and compared to a simple deficit rule that limits the maximum amount of deficit per period. Whereas the deficit rule does not perform well, the debt rule yields welfare gains virtually equal to the optimal rule.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50545

Management as a Technology?

By: Bloom, Nicholas, Raffaella Sadun, and John Van Reenen

Abstract—Are some management practices akin to a technology that can explain company and national productivity, or do they simply reflect contingent management styles? We collect data on core management practices from over 11,000 firms in 34 countries. We find large cross-country differences in the adoption of basic management practices, with the U.S. having the highest size-weighted average management score. We present a formal model of “Management as a Technology," and structurally estimate it using panel data to recover parameters including the depreciation rate and adjustment costs of managerial capital (both found to be larger than for tangible non-managerial capital). Our model also predicts (i) a positive effect of management on firm performance; (ii) a positive relationship between product market competition and average management quality (part of which stems from the larger covariance between management with firm size as competition strengthens); and (iii) a rise (fall) in the level (dispersion) of management with firm age. We find strong empirical support for all of these predictions in our data. Finally, building on our model, we find that differences in management practices account for about 30% of cross-country total factor productivity differences.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51154

What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management

By: Soltes, Eugene F., Suraj Srinivasan, and Rajesh Vijayaraghavan

Abstract—Shareholder proposals provide investors an opportunity to exercise their decision rights within a firm. However, not all proposals created by shareholders receive consideration. Managers can seek permission from the Securities and Exchange Commission (SEC) to exclude specific proposals from the proxy statement. From 2003 to 2013, we find that managers seek to exclude 40% of all proposals they receive, but the SEC does not permit exclusion in over a quarter of the cases. Of the proposals that managers seek to exclude but the SEC does not allow, 28% win shareholder support or the firm voluntarily implements prior to a vote. Our analysis of contested shareholder proposals suggests that managers often seek to avoid the implementation of legitimate shareholder interests.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51128

  • Harvard Business School Case 716-074

Russia: Tribulations and Toska

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716074-PDF-ENG

  • Harvard Business School Case 491-083

Note on Organizational Structure

Provides the reader with a basic understanding of organizational structure. The first section outlines some of the key tools and criteria that must be taken into account in designing organizational structures. In the second section, some archetypal forms of organizational structure and their strengths and weaknesses are described. Finally, some emerging trends in how organizations are structured are discussed in the last section of this note, supplemented by a brief summary, in timeline format, of the evolution of organizational structure in theory and practice.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/491083-PDF-ENG

  • Harvard Business School Case 316-152

CunCunLe: Empowering China's Rural Villages

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316152-PDF-ENG

  • Harvard Business School Case 816-064

Alvogen

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/816064-PDF-ENG

The case describes the application of Time-Driven Activity-Based Costing (TDABC) at a new tertiary hospital, operated by Partners in Health in Mirebelais, Haiti. A project team mapped the clinical processes for use in estimating the direct costs of personnel, equipment, and facilities for obstetric and breast cancer care. The accurate cost information revealed opportunities to optimize resource utilization and reduce costs by establishing more efficient sterilization procedures and task-shifting administrative responsibilities away from high-cost physicians. It would also potentially be used for budgeting and to propose new payment models with Haiti's Ministries of Health and Finance.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/116041-PDF-ENG

  • Harvard Business School Case 715-442

Chateau Pontet-Canet

This case discusses the situation of Chateau Pontet-Canet in early 2000. Alfred Tesseron was the director and son of the owner of Chateau Pontet-Canet, a red wine producing estate in Pauillac (Bordeaux, France) and member of the fifth class of the ancient grand cru classification of the Medoc of 1855. International competition was mounting and revenues were declining even though Chateau Pontet-Canet delivered higher quality than equally classed peers. Moreover, despite receiving praise for its recent quality efforts, the chateau received criticism from the world's leading critic for being old-fashioned. Tesseron wondered whether he produced the right level of quality, whether he should follow his young winemaker's unconventional ideas for the work in the vineyard, whether he should modernize Pontet-Canet's style, and whether the institutions of Bordeaux were helping Pontet-Canet or holding it back. Consequently, Tesseron wondered how to best align his choices along these dimensions and secure Pontet-Canet's prosperity in the new millennium.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/715442-PDF-ENG

  • Harvard Business School Case 515-107

Who Owns the Whale?

Judge William Wright considers the case of the dispute of a whale carcass wherein several whaling ships claim ownership based on each one's contribution to its killing. The judge must weigh in the differing efforts and costs of three ships that each played a role at different stages of the hunting process, as well as the prevalent norms of ownership at the time.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/515107-PDF-ENG

  • Harvard Business School Case 216-051

Emaar: The Center of Tomorrow, Today

Starting in 1997, Mohammad Alabbar, Chairman of Emaar, has been largely associated with Dubai's most renowned real estate projects: the world's tallest building, largest mall, and biggest fountain show. Emaar's pioneering success attracted a large number of private sector entrepreneurs as well as the Government of Dubai to follow in its footsteps. Consequently, land at prime locations in Dubai was not as readily available as it used to be. Emaar tried to venture outside of Dubai but later faced challenges in choosing the right partners and maintaining control over management. Being “stuck” between an overcrowded competitive landscape in Dubai and challenging conditions abroad, Alabbar wondered how he could maintain his company's growth while staying prepared for any upcoming financial downturn.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/216051-PDF-ENG