First Look

February 13, 2018

Of special interest among new research papers, case studies, articles, and books released this week by Harvard Business School faculty:

HTC considers a VR strategy shift

As the virtual reality market begins to swing upward, major players are devising or revising growth strategies. A new case by David Yoffie, Andy Wu, and Allison Ciechanover follows HTC's CEO as she considers next steps for innovating in hardware and software. HTC and Virtual Reality.

Duke University's "outrageous ambition"

Transitioning to a new president, Duke University reviews its ambitious growth plan. Outrageous Ambition: Duke University.

Image issues over volunteering

A forthcoming article in Management Science by Christine L. Exley explores the role of image in prosocial volunteer situations. "Do monetary incentives encourage volunteering? Or, do they introduce concerns about appearing greedy and crowd out the motivation to volunteer?" she asks. Incentives for Prosocial Behavior: The Role of Reputations.

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

— Sean Silverthorne
 
  • 2018
  • Pearson Education

Horngren's Cost Accounting: A Managerial Emphasis

By: Datar, Srikant M., and Madhav Rajan

Abstract—Horngren’s Cost Accounting defines the cost accounting market and continues to innovate today by consistently integrating the most current practice and theory into the text. This acclaimed, market-leading text emphasizes the basic theme of “different costs for different purposes” and reaches beyond cost accounting procedures to consider concepts, analyses, and management. The 16th edition incorporates the latest research and most up-to-date thinking into all relevant chapters so that students are prepared for the rewards and challenges they will face in the professional cost accounting world of today and tomorrow.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53893

  • forthcoming
  • Cambridge, MA: Harvard University Press

Markets, Morals, Politics: Jealousy of Trade and the History of Political Thought

By: Kapossy, Béla, Isaac Nakhimovsky, Sophus A. Reinert, and Richard Whatmore, eds.

Abstract—When Istvan Hont died in 2013, the world lost a giant of intellectual history. A leader of the Cambridge School of Political Thought, Hont argued passionately for a global-historical approach to political ideas. To better understand the development of liberalism, he looked not only to the works of great thinkers but also to their reception and use amid revolution and interstate competition. His innovative program of study culminated in the landmark 2005 book Jealousy of Trade, which explores the birth of economic nationalism and other social effects of expanding eighteenth-century markets. Markets, Morals, Politics brings together a celebrated cast of Hont’s contemporaries to assess his influence, ideas, and methods. Richard Tuck, John Pocock, John Dunn, Raymond Geuss, Gareth Stedman Jones, Michael Sonenscher, John Robertson, Keith Tribe, Pasquale Pasquino, and Peter N. Miller contribute original essays on themes Hont treated with penetrating insight: the politics of commerce, debt, and luxury; the morality of markets; and economic limits on state power. The authors delve into questions about the relationship between states and markets, politics and economics, through examinations of key Enlightenment and pre-Enlightenment figures in context—Hobbes, Rousseau, Spinoza, and many others. The contributors also add depth to Hont’s lifelong, if sometimes veiled, engagement with Marx. The result is a work of interpretation that does justice to Hont’s influence while developing its own provocative and illuminating arguments. Markets, Morals, Politics will be a valuable companion to readers of Hont and anyone concerned with political economy and the history of ideas.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53906

  • 2017
  • Advances in Strategic Management

Capturing Value from Intellectual Property (IP) in a Global Environment

By: Alcácer, Juan, Karin Beukel, and Bruno Cassiman

Abstract—Globalization should provide firms with an opportunity to leverage their know-how and reputation across countries to create value. However, it remains challenging for them to actually capture that value using traditional Intellectual Property (IP) tools. In this paper, we document the strong growth in patents, trademarks, and industrial designs used by firms to protect their IP globally. We then show that IP protection remains fragmented, the quality of IP applications might be questionable, and the development of a comprehensive IP footprint worldwide is very costly. Growing numbers of applications are causing backlogs and delays in numerous Patent and Trademarks Offices, and litigation over IP rights is expensive with an uncertain outcome. Moreover, local governments can succeed in transferring value to local firms and influencing global market positions by using IP laws and other regulations. In essence, the analysis shows a global IP environment that leaves much to be desired. Despite these challenges, there are successful strategies to capture value from know-how and reputation by leveraging an array of IP tools. These strategies have important implications for management practice, as we discuss in our concluding section. Global companies will need to organize cross-functional value capture teams focused on appropriating value from their know-how and reputation by combining different institutional, market, and nonmarket tools, depending on the institutional and business environment in a particular region.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53892

  • 2017
  • Advances in Strategic Management

Geography, Location, and Strategy

By: Alcácer, Juan, Bruce Kogut, Catherine Thomas, and Bernard Yeung

Abstract—No abstract available.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53894

  • forthcoming
  • Human Resource Management Review

Developing Strategic Human Resource Theory and Making a Difference: An Action Science Perspective

By: Beer, Michael

Abstract—No abstract available.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53886

  • forthcoming
  • The Economics of Artificial Intelligence

The Impact of Artificial Intelligence on Innovation

By: Cockburn, Iain M., Rebecca Henderson, and Scott Stern

Abstract—No abstract available.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53884

  • forthcoming
  • How Could This Happen? Managing Errors in Organizations

The Strategic Imperative of Psychological Safety and Organizational Error Management

By: Edmondson, Amy C., and Paul Verdin

Abstract—Despite discussion in the management literature about agile organizations or learning organizations, many large organizations are top-down, slow to change, and fraught with obstacles to learning. We describe “strategy-as-learning” to contrast with the traditional concept of “strategy-as-planning.” Practicing the work of organizational strategy as a learning process implies eschewing a set of firm decisions and preconceived courses of action. Instead, strategy formulation and execution develop from setting a direction and posing a set of questions to be defined, refined, and iteratively answered. Strategy-making is thus about developing and advancing hypotheses to be tested. In this context, psychological safety plays a crucial role in shaping the quality of strategy-as-learning, as psychological safety enables speaking up, error reporting, dissenting, and candidly discussing risks. Without these behaviors, especially at the executive levels, organizations are at risk of strategic failures that could have been avoided.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53934

  • forthcoming
  • Management Science

Incentives for Prosocial Behavior: The Role of Reputations

By: Exley, Christine L.

Abstract—Do monetary incentives encourage volunteering? Or, do they introduce concerns about appearing greedy and crowd out the motivation to volunteer? Since the importance of such image concerns is normally unobserved, the answer is theoretically unclear, and corresponding empirical evidence is mixed. To help counter this ambiguity, this paper proposes that the importance of image concerns—such as the desire to appear prosocial and not to appear greedy—relates to individuals' volunteer reputations. Experimental results support this possibility. Individuals with past histories of volunteering are less responsive to image concerns if their histories are public or if their prosocial tendencies are already known. Consistent with a decreased importance of appearing prosocial, they are less likely to volunteer. Consistent with a decreased importance of not appearing greedy, they are less likely to be discouraged by public incentives.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53902

  • February 2018
  • Journal of Public Economics

The Impact of a Surprise Donation Ask

By: Exley, Christine L., and Ragan Petrie

Abstract—Individuals frequently exploit "flexibility" built into decision environments to give less. They use uncertainty to justify options benefiting themselves over others, they avoid information that may encourage them to give, and they avoid the ask itself. In this paper, we examine whether a reluctance to give may arise even when such explicit flexibility is absent. We investigate whether merely alerting individuals to an upcoming prosocial ask—that is neither avoided nor occurs in an environment with flexibility—results in reduced prosocial behavior. That is, we investigate whether individuals use time to quickly find ways to decline prosocial asks and thus whether surprising individuals with prosocial asks increases compliance. Results from a field study and complementary online studies provide a clear answer: yes.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53860

  • forthcoming
  • Management Science

Wage Elasticities in Working and Volunteering: The Role of Reference Points in a Laboratory Study

By: Exley, Christine L., and Stephen J. Terry

Abstract—We experimentally test how effort responds to wages—randomly assigned to accrue to individuals or to a charity—in the presence of expectations-based reference points or targets. When individuals earn money for themselves, higher wages lead to higher effort with relatively muted targeting behavior. When individuals earn money for a charity, higher wages instead lead to lower effort with substantial targeting behavior. A reference-dependent theoretical framework suggests an explanation for this differential impact: when individuals place less value on earnings, such as when accruing earnings for a charity instead of themselves, more targeting behavior and a more sluggish response to incentives should result. Results from an additional experiment add support to this explanation. When individuals select into earning money for a charity and thus likely place a higher value on those earnings, targeting behavior is muted and no longer generates a negative effort response to higher wages.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53905

  • in press
  • Games and Economic Behavior

Games of Threats

By: Kohlberg, Elon, and Abraham Neyman

Abstract—A game of threats on a finite set of players, N, is a function d that assigns a real number to any coalition, S ? N, such that d(S) = -d(N\S). A game of threats is not necessarily a coalitional game as it may fail to satisfy the condition d(Ø) = 0. We show that analogs of the classic Shapley axioms for coalitional games determine a unique value for games of threats. This value assigns to each player an average of the threat powers, d(S), of the coalitions that include the player. Games of threats arise naturally in value theory for strategic games and may have applications in other branches of game theory.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53924

  • May–December 2017
  • Proceedings of the Marine Safety & Security Council, the Coast Guard Journal of Safety at Sea

Leadership in Routine Emergencies and Crises: The Deepwater Horizon Incident

By: Leonard, Dutch, Arnold M. Howitt, and David W. Giles

Abstract—Leadership in emergencies is a crucial element of becoming a high-performing Coast Guard officer. In this article, we argue that emergency leadership is not a single skill or uniform set of organizational competences. Instead, we identify a spectrum of emergency situations, ranging from what we will call “routine emergencies” through “crises,” differentiated by increasing degrees of novelty in the emergency challenge. Leaders and their organizations must develop capacities for managing in both types of situations.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53941

  • forthcoming
  • Harvard International Review

Henry Kissinger and Robert Mugabe: The Forgotten Connection via a Remarkably Creative Negotiation

By: Sebenius, James K.

Abstract—When Robert Mugabe was forced out of office in late 2017 after 37 years of increasingly brutal rule in Zimbabwe, he had been in the job so long that few recall how he got there. Fewer still remember that it was Henry Kissinger, whose complex, if unlikely, negotiations to achieve black majority rule in Rhodesia, later Zimbabwe, helped to facilitate Mugabe's ascent. Tracing this mostly forgotten episode illustrates the potential for creative and strategic negotiation to overcome what many regard as impossibly high barriers—as well as the painful lesson that negotiating virtuosity plus the election of a charismatic leader hardly suffice for a prosperous and democratic outcome.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=53876

Private Equity, Jobs, and Productivity: Reply to Ayash and Rastad

By: Davis, Steven J., John Haltiwanger, Kyle Handley, Ron S. Jarmin, Josh Lerner, and Javier Miranda

Abstract—Ayash and Rastad (2017) express several concerns about our 2014 analysis of private equity buyouts. We welcome their interest in our work but think their criticisms are off the mark. Some of their claims reflect a misunderstanding of the Census Bureau’s Longitudinal Business Database (LBD) and its underlying data inputs. Because the LBD has emerged as a major laboratory for empirical studies in economics and finance, we use this opportunity to reiterate and clarify some of its important features. In a similar spirit, we elaborate on steps taken to develop our large sample of private equity buyouts. We also address Ayash and Rastad’s remarks about the empirical design of our establishment-level analysis, our methods for distinguishing between leveraged buyouts (LBOs) and other private equity transactions, bankruptcy rates among firms acquired in LBOs, their assertion that we undercount large public-to-private LBOs, and other matters.

Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=53942

Abstract—Online marketplaces have transformed how we shop, travel, and interact with the world. Yet, their unique innovations also present a panoply of challenges for communities and states. Surprisingly, federal laws are chief among those challenges despite the fact that online marketplaces facilitate transactions traditionally regulated at the local level. In this article, we survey the federal laws that frame the situation, especially §230 of the Communications Decency Act (CDA), a 1996 law largely meant to protect online platforms from defamation lawsuits. The CDA has been stretched beyond recognition to prevent all manner of prudent regulation. We offer specific suggestions to correct this misinterpretation to assure that state and local governments can appropriately respond to the digital activities that impact physical realities.

Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=53823

  • Harvard Business School Case 818-052

Updating Dating

To identify design ideas for their own startup, two MBAs compare the different profiling, matching, and monetization approaches employed by five incumbent dating services: Coffee Meets Bagel, OKCupid, Jiayuan, Dating Ring, and HurryDate.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/818052-PDF-ENG

  • Harvard Business School Case 118-051

Partners In Health: Costing Primary Care in Haiti

Partners in Health, a global NGO focused on delivering health care to residents of rural underserved communities, conducts a project on the cost of primary care at five sites in the Central Highlands of Haiti. It devises a simple approach for tracking the resources used by patients being treated for diverse medical conditions, as an input to a time-driven activity-based costing model. The results show considerable cost diversity across the five sites, but organizational leaders differ on the interpretation and action implications of the findings.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/118051-PDF-ENG

  • Harvard Business School Case 318-043

Outrageous Ambition: Duke University

Duke University had grown from a one room schoolhouse in rural North Carolina in 1859 to one of the leading research universities in the U.S. and the world. Since the late 1950s, Duke’s leaders had consciously used the process of strategic planning to guide the development of the university as a whole, building up programs in interdisciplinarity and initiating ambitious projects in internationalization. Under the leadership of President Richard Brodhead, Duke first built a medical school in Singapore in collaboration with the National University of Singapore, then embarked on a journey to build a university on American standards in the People’s Republic of China with its own four year liberal arts curriculum. Will Duke realize its many “outrageous ambitions” as it transitions to a new president?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/318043-PDF-ENG

  • Harvard Business School Case 818-041

AngelList in 2017

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/818041-PDF-ENG

  • Harvard Business School Case 818-066

Blockchain, Cryptocurrencies and Digital Assets

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/818066-PDF-ENG

  • Harvard Business School Case 818-067

Initial Coin Offerings

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/818067-PDF-ENG

  • Harvard Business School Case 317-105

From mHealth Hackathon to Reality: Diabetes Care

This case explores the development of a business plan for a mobile health application for diabetes care. The case depicts a student team excited about the opportunity to improve the care of patients with diabetes by contracting an app. They go through a rigorous evaluation of the FDA regulations, the existing market, and potential commercial competitors to try and identify a market opportunity. Since diabetes care involves behavior change, the case then moves to an exploration to concepts from behavioral economics that could help build a sustainable platform for the app. In the end, the case questions ask the team to decide on a basic business and financing strategy if they want to go forward or offers them the opportunity to “fail-fast” by quitting at this stage.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/317105-PDF-ENG

  • Harvard Business School Case 717-513

Intuit: QuickBooks (B)

This short case updates the earlier Intuit case on transitioning from a product company into a platform company. In addition to providing information on the recent successes and challenges of the business, it also explores a new challenge of building a platform with a branded third-party solution or a “white label” solution, which would hide the third-party brand.

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https://cb.hbsp.harvard.edu/cbmp/product/717513-PDF-ENG

  • Harvard Business School Case 718-421

HTC and Virtual Reality

In fall 2017, HTC CEO and Chairperson Cher Wang was driving the company to focus on virtual reality (VR). HTC's first VR product, VIVE, released in spring 2016, was applauded for its superior immersive room-scale capabilities. However, early adoption of VR beyond gamers and technology enthusiasts was off to a slower start in general due to high cost, lack of quality content, and some user discomfort while using the technology. Wang endeavors to be the leading VR company, though competition from Sony, Facebook, and other technology leaders is mounting, and several, like HTC, are already pursuing second generation tetherless VR technology. As Wang seeks to develop the ecosystem by partnering with developers, creating a content platform, investing in VR startups, and launching VR arcades, she must decide the appropriate balance of fostering innovation in hardware, software and services, or both.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/718421-PDF-ENG