First Look

Abstract—A Peruvian apparel company struggles to position itself against a global brand.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51646

Abstract—U.S. corporations spend enormous amounts of money—some $456 billion globally in 2015 alone—on employee training and education, but they aren't getting a good return on their investment. People soon revert to old ways of doing things, and company performance doesn't improve. To fix these problems, senior executives and their HR departments should change the way they think about learning and development, and because context is crucial, needed fixes in organizational design and managerial processes must come first. The authors have identified six common barriers to change: (1) unclear direction on strategy and values, which often leads to conflicting priorities; (2) senior executives who don't work as a team and haven't committed to a new direction or acknowledged necessary changes in their own behavior; (3) a top-down or laissez-faire style by the leader, which prevents honest conversation about problems; (4) a lack of coordination across businesses, functions, or regions due to poor organizational design; (5) inadequate leadership time and attention given to talent issues; and (6) employees' fears of telling the senior team about obstacles to the organization's effectiveness. They advocate six basic steps to overcoming these barriers and achieving greater success in talent development.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51709

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51716

Abstract—Governments, NGOs, companies, and community members must all be involved in programs to create shared value, yet they work more often in opposition than in alignment. A movement known as collective impact has facilitated successful collaborations in the social sector, and it can guide businesses in bringing together the various actors in their ecosystems to help remedy some of the world's most urgent problems. In the process, companies will find economic opportunities that their competitors miss. Five elements must be in place for a collective-impact effort to achieve its aims: (1) a common agenda, which helps align the players' efforts and defines their commitment; (2) a shared measurement system; (3) mutually reinforcing activities; (4) constant communication, which builds trust and ensures mutual objectives; and (5) dedicated “backbone” support, delivered by a separate, independently funded staff, which builds public will, advances policy, and mobilizes resources.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51710

Abstract—Strategy scholars have documented in various empirical settings that firms seek and leverage stronger institutions to mitigate hazards and gain competitive advantage. In this paper, we argue that such “institution-seeking” behavior may not be confined to the pursuit of strong institutions: firms may also seek weak institutions to mitigate hazards. Using panel data from the global smartphone industry and recent patent wars among key industry rivals, we examine how smartphone vendors that are not directly involved in patent litigation strategically respond to increased litigation risks in this industry. We find that as patent wars intensify, smartphone vendors not involved in any litigation focus more of their business in markets with weaker intellectual property (IP) protection because of institutional arbitrage opportunities. This strategic response is more pronounced for vendors whose stocks of patents are small and whose home markets have weak IP systems. Our study is the first to examine the relationship between heterogeneity in national patent systems and firms’ global strategies. It provides a more balanced view of firms’ institution-seeking behavior by documenting how they make strategic use of weaker institutions.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51721

Abstract—As Americans’ trust in government nears historic lows, frustration with government performance approaches record highs. We propose that Americans’ views of government can be reshaped by increasing government’s operational transparency—that is, the extent to which citizens can see the often-hidden work that government performs. Across two studies using laboratory and field data, increasing operational transparency improved citizens’ views of and increased engagement with government. In Study 1 (N=554), viewing a five-minute computer simulation highlighting the work performed by the government of an archetypal American town—from building roads to ensuring food safety—increased trust in government and support for government services. Study 2 (N=21,786) leveraged field data from a mobile phone application through which Boston residents submit service requests to their city government. Users who viewed photos of city workers responding to their service requests were more likely to continue using the app over the ensuing 13 months, demonstrating that operational transparency led to sustained engagement with government.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=45842

Abstract—Paid search has become an increasingly common form of advertising, comprising about half of all online advertising expenditures. To shed light on the effectiveness of paid search, we design and analyze a large-scale field experiment on the review platform Yelp.com. The experiment consists of roughly 18,000 restaurants and 24 million advertising exposures—randomly assigning paid search advertising packages to more than 7,000 restaurants for a three-month period, with randomization done at the restaurant level to assess the overall impact of advertisements. We find that advertising increases a restaurant’s Yelp page views by 25% on average. Advertising also increases the number of purchase intentions—including getting directions, browsing the restaurant’s website, and calling the restaurant—by 18%, 9%, and 13%, respectively, and raises the number of reviews by 5%, suggesting that advertising also affects the number of restaurant-goers. All advertising effects drop to zero immediately after the advertising period. A back-of-the-envelope calculation suggests that advertising would produce a positive return on average for restaurants in our sample.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51728

Abstract—Small business owners and others in self-employment have the option to transition to paid work. If there is initial uncertainty about earnings in entrepreneurship, this option increases the expected lifetime value of entering self-employment relative to expected pay in a single year. This paper first documents that moves between paid work and self-employment are common and consistent with experimentation to learn about entrepreneurial earnings. This pattern motivates estimating the expected returns to entering self-employment within a dynamic lifecycle model that allows for non-random selection in and out of self-employment and gradual learning about the entrepreneurial earnings process. The model accurately fits entry patterns into self-employment by age, with returns to entrepreneurship varying over the lifecycle. The pre-tax lifetime value of self-employment is positive at the median. The option to return to paid work is large enough to reverse the result from cross-sectional studies that the median man expects to earn significantly less from self-employment. However, after accounting for progressive taxation and the additional employer portion of the payroll tax assessed on the self-employed, the median lifetime after-tax earnings gap between self-employment and paid work is approximately zero.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51676

Abstract—Nominal debt provides consumption-smoothing benefits if it can be inflated away during recessions. However, we document empirically that countries with more countercyclical inflation, where nominal debt provides better consumption smoothing, issue more foreign-currency debt. We propose that monetary policy credibility explains the currency composition of sovereign debt and nominal bond risks in the presence of risk-averse investors. In our model, low credibility governments inflate during recessions, generating excessively countercyclical inflation in addition to the standard inflationary bias. With countercyclical inflation, investors require risk premia on nominal debt, making nominal debt issuance costly for low credibility governments. We provide empirical support for this mechanism, showing that countries with higher nominal bond-stock betas have significantly larger nominal bond risk premia and borrow less in local currency.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51720

Abstract—Current academic and policy debates focus on the impact of tort reforms on physicians’ behavior and medical costs. This paper examines whether these reforms also affect incentives to develop new technologies. We find that, on average, laws that limit the liability exposure of healthcare providers are associated with a significant reduction in medical device patenting and that the effect is predominantly driven by innovators located in the states passing the reforms. Tort laws have the strongest impact in medical fields in which the probability of facing a malpractice claim is the largest, and they do not seem to affect the amount of new technologies of the highest and lowest quality. Our results underscore the importance of considering dynamic effects in the economic analysis of tort laws.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50634

Abstract—We construct a measure of corporate purpose within a sample of U.S. companies based on approximately 500,000 survey responses of worker perceptions about their employers. We find that this measure of purpose is not related to financial performance. However, high purpose firms come in two forms: firms that are characterized by high camaraderie between workers, and firms that are characterized by high clarity from management. We document that firms exhibiting both high purpose and clarity have systematically higher future accounting and stock market performance, even after controlling for current performance, and that this relation is driven by the perceptions of middle management and professional staff rather than senior executives, hourly, or commissioned workers. Taken together, these results suggest that firms with employees that maintain strong beliefs in the meaning of their work experience better performance.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51712

Can a consortium of 16 organizations, including multinational corporations, local government agencies, and startups, turn a rundown Paris suburb into a “smart” (ecologically viable, high-tech, livable) neighborhood? This case explores how Bouygues Immobilier led such a project involving Alstom, Bouygues Energies & Services, Bouygues Telecom, EDF (Electricity of France), ERDF (Electricity Distribution Grid of France), Microsoft, Schneider Electric, Steria, and Total in Issy-les-Moulineaux (France). The enormous scope and diversity of the project is presented as well as the teaming strategies and governance model that facilitated its success. IssyGrid® earned the “Golden Issy” and “Grand Paris,” among other awards, for its innovation and performance.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/617007-PDF-ENG

In November 2014, Spotify's chief content officer Ken Parks learns that record label Big Machine Records has requested the immediate removal of superstar artist Taylor Swift's entire catalogue from Spotify's music streaming service. Is it time for Spotify to reconsider the policies that seem to have prompted Swift's catalogue takedown—and specifically the company's insistence that artists offer the same assortment across countries and not target only premium tiers? Will the takedown request lead to other artists considering a defection from the service, and if so, what can Spotify's executives do to prevent others from leaving? And, as it is only a matter of time before the news will be common knowledge among both music-industry insiders and fans, how should Spotify respond in the public domain?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516046-PDF-ENG

In July 2013, composer, writer, actor, and rapper Lin-Manuel Miranda, director Tommy Kail, and producer Jeffrey Seller met to discuss how to launch Hamilton, a new musical based on the life of the first Treasury Secretary of the United States, Alexander Hamilton. With a hip-hop score and an ethnically diverse cast that looked nothing like their historical counterparts, Hamilton was an unlikely candidate for success on Broadway. The trio needed to decide which of two popular routes was best to bring their new musical to Broadway: either take the production straight to Broadway in a “cold open,” or strike an “enhancement deal” with a non-profit theater so the musical could be tested before mounting a more expensive Broadway run. Could a hip-hop musical about a largely forgotten Founding Father be a Broadway blockbuster? And if so, what was the right next step in bringing Hamilton closer toward that goal?

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/517015-PDF-ENG

Managing change is consistently ranked as one of the most critical and difficult tasks that leaders face. This note outlines the key choices that leaders must make when engineering change. It is organized into four sections, offering guidance on how to 1) diagnose the need for change; 2) determine what sort of change is called for (e.g., radical or incremental); 3) develop a delivery strategy that fosters stakeholder buy-in; and 4) evaluate impact. In addition to providing diagnostic frameworks for managing change, it offers a conceptual overview of both foundational and contemporary change management theory. Managers, instructors, and students of change management should find this note especially useful for discussing the core tenets of designing and implementing a change initiative.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/415040-PDF-ENG

This is a follow-up to the “HEINEKEN—Brewing a Better World (A)” case, with updated information on sustainability at HEINEKEN and some new initiatives.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/717001-PDF-ENG

This module explores the implications of grouping business units by function, geography, products, customers, or expert knowledge. The analysis highlights the difference between operating core units designed for efficiency and market-facing units designed for responsiveness. We introduce key concepts that are essential to the effective design of performance measurement systems such as span of control, span of accountability, and span of attention. The design of work units, spans of control, and spans of accountability are the main structural tools to influence work and information flows and to direct organizational attention to ensure that everyone is working toward shared goals. While this module is designed to be used alone, it is part of the Management Control Systems series. The series forms a complete course that focuses on the techniques for using performance measurement and control systems to implement strategy. Modules 1–4 set out the foundations for strategy implementation. Modules 5–9 teach quantitative tools for performance measurement and control. Modules 10–15 illustrate the use of these techniques by managers to achieve profit goals and strategies. This module rounds out the introductory section (modules 1–4) of the Management Control Systems series. Subsequent modules build on the concepts introduced in this section.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/117104-PDF-ENG

Kevin Borders and Joe Golden, co-founders and co-CEOs of Collage.com, must decide how to grow their custom photo-products startup in the face of fierce competition. From 2011 through 2016, the business evolved from a hobby to a startup with $22 million in revenue and 45 employees, all of whom worked remotely from home. Customer acquisition was becoming more difficult and repeat purchase rates lagged behind Shutterfly, the industry leader. New hires would help to integrate new products and grow marketing efforts, but several experienced team members wondered whether virtual collaboration could continue to work with an influx of new people.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/817038-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716474-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716475-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716476-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/716477-PDF-ENG