- 2015
- Chapel Hill, NC: University of North Carolina Press
Shadow Cold War: The Sino-Soviet Competition for the Third World
Abstract—The conflict between the United States and the Soviet Union during the Cold War has long been understood in a global context, but Jeremy Friedman's Shadow Cold War delves deeper into the era to examine the competition between the Soviet Union and the People's Republic of China for the leadership of the world revolution. When a world of newly independent states emerged from decolonization desperately poor and politically disorganized, Moscow and Beijing turned their focus to attracting these new entities, setting the stage for Sino-Soviet competition. Based on archival research from 10 countries, including new materials from Russia and China, many no longer accessible to researchers, this book examines how China sought to mobilize Asia, Africa, and Latin America to seize the revolutionary mantle from the Soviet Union. The Soviet Union adapted to win it back, transforming the nature of socialist revolution in the process. This groundbreaking book is the first to explore the significance of this second Cold War that China and the Soviet Union fought in the shadow of the capitalist-communist clash.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49811
- forthcoming
- Journal of Public Economics
Does Front-Loading Taxation Increase Savings? Evidence from Roth 401(k) Introductions
Abstract—Can governments increase private savings by taxing savings up front instead of in retirement? Roth 401(k) contributions are not tax-deductible in the contribution year, but withdrawals in retirement are untaxed. The more common before-tax 401(k) contribution is tax-deductible in the contribution year, but both principal and investment earnings are taxed upon withdrawal. Using administrative data from 11 companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after the Roth introduction, which means that the amount of retirement consumption being purchased by 401(k) contributions increases after the Roth introduction. A survey experiment suggests two behavioral factors play a role in the unresponsiveness of contribution rates to their tax treatment: (1) employee confusion about or neglect of the tax properties of Roth balances and (2) partition dependence.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49743
- June 2015
- Current Opinion in Behavioral Sciences
Editorial Overview: Social Behavior
Abstract—No abstract available.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49863
- October 2015
- Journal of Personality and Social Psychology
Men as Cultural Ideals: Cultural Values Moderate Gender Stereotype Content
Abstract—Four studies tested whether cultural values moderate the content of gender stereotypes, such that male stereotypes more closely align with core cultural values (specifically, individualism vs. collectivism) than do female stereotypes. In Studies 1 and 2, using different measures, Americans rated men as less collectivistic than women, whereas Koreans rated men as more collectivistic than women. In Study 3, bicultural Korean Americans who completed a survey in English about American targets rated men as less collectivistic than women, whereas those who completed the survey in Korean about Korean targets did not, demonstrating how cultural frames influence gender stereotype content. Study 4 established generalizability by reanalyzing Williams and Best’s (1990) cross-national gender stereotype data across 26 nations. National individualism-collectivism scores predicted viewing collectivistic traits as more—and individualistic traits as less—stereotypically masculine. Taken together, these data offer support for the cultural moderation of gender stereotypes hypotheses, qualifying past conclusions about the universality of gender stereotype content.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49830
- in press
- Journal of Behavioral Decision Making
Should You Sleep on It? The Effects of Overnight Sleep on Subjective Preference-based Choice
Abstract—Conventional wisdom and studies of unconscious processing suggest that sleeping on a choice may improve decision making. Though sleep has been shown to benefit several cognitive tasks, including problem solving, its impact on everyday choices remains unclear. Here we explore the effects of "sleeping on it" on preference-based decisions among multiple options. In two studies, individuals viewed several attributes describing a set of items and were asked to select their preferred item after a 12-hour interval that either contained sleep or was spent fully awake. After an overnight period including sleep, individuals showed increases in positive perceptions of the choice set. This finding contrasts with previous research showing that sleep selectively enhances recall for negative information. In addition, this increase in positive recall did not translate into a greater desire to purchase their preferred item or into an overall benefit for choice satisfaction. Time-of-day controls were used to confirm that the observed effects could not be explained by circadian influences. Thus we show that people may feel more positive about the choice options, but not more confident about the choice after "sleeping on" a subjective decision. We discuss how the valence of recalled choice set information may be important in understanding the effects of sleep on multi-attribute decision making and suggest several avenues for future research.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49810
- October 2015
- Journal of Labor Economics
The Value of Bosses
Abstract—How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team's total output by more than would adding one worker to a nine member team. Workers assigned to better bosses are less likely to leave the firm. A separate normalization implies that the average boss is about 1.75 times as productive as the average worker.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49806
Abstract—Many companies today rely on employees around the world, leveraging their diversity and local expertise to gain a competitive edge. However, geographically dispersed teams face a big challenge: physical separation and cultural differences can create social distance, or a lack of emotional connection, that leads to misunderstandings and mistrust. To help global team leaders manage effectively, the author shares her SPLIT framework for mitigating social distance. It has five components: Structure—If a team is made up of groups with different views about their relative power, the leader should connect frequently with those who are farthest away and emphasize unity. Process—Meeting processes should allow for informal interactions that build empathy. Language—Everyone, regardless of language fluency, should be empowered to speak up. Identity—Team members must be active cultural learners and teachers to understand one another's identity and avoid misinterpreting behaviors. Technology—When choosing between videoconferencing, e-mail, and other modes of communication, leaders should ask themselves if real-time conversation is desirable, if their message needs reinforcement, and if they are opting for the technology they want others to use.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49666
- October 2015
- Harvard Business Review
How Smart, Connected Products Are Transforming Companies
Abstract—The evolution of products into intelligent, connected devices is revolutionizing business. In a November 2014 article, "How Smart, Connected Products Are Transforming Competition," Harvard Business School professor Michael Porter and PTC president and CEO James Heppelmann looked at how this shift is changing the structure of industries and forcing firms to rethink their strategies. In this companion article, the authors look at the effects inside firms, examining the impact that smart, connected products have on operations and organizational structure. The new capabilities and vast quantities of data that smart, connected products offer are redefining the activities of the core functions of companies—sometimes radically. As software and cloud-based operating systems become integral to products, new product-development principles emerge, manufacturing components and processes change, and IT security becomes the job of every function. Companies need different skills and expertise, which creates new imperatives for HR. In the marketing function, the ability to track a product's condition and use shifts the focus to maximizing the product's value to the customer over time. Customer relationships become continuous and open-ended, service becomes more efficient and proactive, and new business models are enabled. The rich data on location and environment that products provide take logistics to a whole new level. Smart, connected products also alter interactions between functions, in ways that hold major implications for organizational structure. Intense, ongoing coordination becomes necessary across multiple functions, including design, operations, sales, service, and IT. Functional roles overlap and blur. Entirely new functions—unified data organizations, dev-ops, and customer success management—begin to emerge. What is under way is the most substantial change in the manufacturing firm since the Second Industrial Revolution, and the effects are spreading to other industries, like services, as well.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49869
- October 2015
- Harvard Business Review
Case Study: Is a Promotion Worth Hiding Who You Are?
Abstract—A manager decides whether he should hide his sexual orientation for an overseas assignment.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49565
- December 2015
- Personality and Individual Differences
On Wealth and the Diversity of Friendships: High Social Class People Around the World Have Fewer International Friends
Abstract—Having international social ties carries many potential advantages, including access to novel ideas and greater commercial opportunities. Yet little is known about who forms more international friendships. Here, we propose social class plays a key role in determining people's internationalism. We conducted two studies to test whether social class is related positively to internationalism (the building social class hypothesis) or negatively to internationalism (the restricting social class hypothesis). In Study 1, we found that among individuals in the United States, social class was negatively related to percentage of friends on Facebook that are outside the United States. In Study 2, we extended these findings to the global level by analyzing country-level data on Facebook friends formed in 2011 (nearly 50 billion friendships) across 187 countries. We found that people from higher social class countries (as indexed by GDP per capita) had lower levels of internationalism—that is, they made more friendships domestically than abroad.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=49862
Crowdfunding as 'Donations': Theory & Evidence
Abstract—For a wide class of crowdfunding approaches, we argue that the reward structure (for funders) is closer to that of charitable donations to public goods than it is to traditional entrepreneurial finance. Many features of the design of crowdfunding platforms can therefore be understood as attempts to deal with attendant "free-rider" problems in motivating contributions. Reviewing institutional features of today's crowdfunding, we clarify that there are often limits in the extent to which tangible rewards can be used to motivate contributions. Drawing on analogies with charitable donations, we theorize that intangible sources of motivation, i.e., (i) direct psychological rewards, (ii) reciprocity, and (iii) social interactions, can play a role in entrepreneurial crowdfunding. In our detailed empirical analysis of a representative project, we find abundant evidence consistent with this characterization, and we proceed to discuss implications for platform design and entrepreneurial funding and unique and defining characteristics of crowdfunding.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49831
Creating Reciprocal Value Through Operational Transparency
Abstract—We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although operational transparency has been shown to improve consumer perceptions of service value, existing theory posits that increased contact between consumers and producers may diminish work performance. Two field and two laboratory experiments in food service settings suggest transparency that 1) allows customers to observe operational processes (process transparency) and 2) allows employees to observe customers (customer transparency) not only improves customer perceptions, but also increases service quality and efficiency. In our fully specified models, the introduction of this transparency contributed to a 22.2% increase in customer-reported quality and reduced throughput times by 19.2%. Laboratory studies revealed that customers who experienced process transparency perceived greater employee effort, and as a consequence, were more appreciative of the employees and valued the service more. Employees who experienced customer transparency felt that their work was more appreciated and more impactful, and thus were more satisfied with their work and more willing to exert effort. We find that transparency, by visually revealing operating processes to consumers and beneficiaries to producers, generates a positive feedback loop through which value is created for both parties.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=47436
The Logic of Agglomeration
Abstract—This review discusses frontier topics in economic geography as they relate to firms and agglomeration economies. We focus on areas where empirical research is scarce but possible. We first outline a conceptual framework for city formation that allows us to contemplate what empiricists might study when using firm-level data to compare the functioning of cities and industries with each other. We then examine a second model of the internal structure of a cluster to examine possibilities with firm-level data for better exposing the internal operations of clusters. An overwhelming theme of our review is the vast scope for enhancements of our picture of agglomeration with the new data that are emerging.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49829
Does Google Content Degrade Google Search? Experimental Evidence
Abstract—While Google is known primarily as a search engine, it has increasingly developed and promoted its own content as an alternative to results from other websites. By prominently displaying Google content in response to search queries, Google is able to use its dominance in search to gain customers for this content. This may reduce consumer welfare if the internal content is inferior to organic search results. In this paper, we provide a legal and empirical analysis of this practice in the domain of online reviews. We first identify the conditions under which universal search would be considered anticompetitive. We then empirically investigate the impact of this practice on consumer welfare. To investigate, we implement a randomized controlled trial in which we vary the search results that subjects are shown—comparing Google's current policy of favorable treatment of Google content to results in which external content is displayed. We find that users are roughly 40% more likely to engage with universal search results (which receive favored placement) when the results are organically determined relative to when they contain only Google content. To shed further light on the underlying mechanisms, we show that users are more likely to engage with the OneBox when there are more reviews, holding content constant. This suggests that Google is reducing consumer welfare by excluding reviews from other platforms in the OneBox.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49825
Tax-Minded Executives and Corporate Tax Strategies: Evidence from the 2013 Tax Hikes
Abstract—Exploiting the increase in personal tax rates due to the American Taxpayer Relief Act and Healthcare Act, we identify tax-minded executives who exhibit a preference for personal tax savings. We find that 2,281 top executives strategically realized their built-in capital gains prior to the tax hikes to save nearly $741 million in personal taxes in 2012. These executives also (1) make payout policy choices that save their shareholders taxes and (2) make tax strategy choices that save their firms cash taxes. Their firms altered payout policies in 2012, distributing $8 billion in special and accelerated dividends, to save shareholders nearly $700 million in taxes. Further, each tax-minded executive reduces a firm's cash effective tax rate by 0.28%.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49819
Sharing Private Information with Customers: Strategic Default and Lender Learning
Abstract—I use a unique data set of loans to small business owners to examine whether lenders face negative externalities when they share private information with borrowers. When lenders grant debt forgiveness to borrowers, borrowers communicate that information to other borrowers, who are then more likely to strategically default on their own obligations. This strategic default contagion is economically large. When the lender doubles debt forgiveness, contagion causes the default rate to increase by 10.9% on average. Using an exogenous shock to the lender's forgiveness policy, I further show that as the lender learns about the extent of borrower communication it tightens its debt forgiveness and origination policies to reduce information spillovers and mitigate the default contagion. Collectively, these results provide new evidence on the strategic interactions between a firm and its customers in a dynamic information environment.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49817
A Normative Theory of Dynamic Capabilities: Connecting Strategy, Know-How, and Competition
Abstract—The field of strategy has mounted an enormous effort to understand, define, predict, and measure how organizational capabilities shape competitive advantage. While the notion that capabilities influence strategy dates back to the work of Andrews (1971), attempts to formalize a "capabilities based" approach to strategy only began to take shape in the past 20 years. In particular, the publication of Teece and Pisano’s (1994) and Teece, Pisano, and Shuen’s (1997) work on "dynamic capabilities" triggered a flood of debate and discussion on the topic. Because strategy is a normative field, its theories must be evaluated in terms of how well they inform and impact practice. Judging by this standard, the dynamic research capabilities research program has come up short. It has become mired in endless debates about definitions and has engaged obsessively in an elusive search for properties that make organizations adaptable. In this paper, I argue that the research program on dynamic capabilities needs to be reset around the fundamental strategic problem facing firms: how to identify and select capabilities that lead to competitive advantage. I frame the firm's capability strategy problem as one of choosing among different types of capability enhancing investments, ranging from general-purpose know-how to application-specific know-how. The framework also draws a distinction between investments designed to deepen the firm's existing base of capabilities and those designed to broaden its repertoire into new realms. I explore the applicability of this framework to three general types of competitive circumstances: stable product market competition, Schumpeterian entry, and Penrosian dynamics. A major goal of the paper is to identify important gaps in our theoretical and empirical knowledge that should be a focus for future scholarly research.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49826
Cohort Turnover and Operational Performance: The July Phenomenon in Teaching Hospitals
Abstract—We consider the impact of cohort turnover—the planned simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers—on operational performance in the context of teaching hospitals. Specifically, we examine the impact of the annual July turnover of residents in U.S. teaching hospitals on the average length of hospital stay and mortality rate in teaching hospitals relative to a control group of non-teaching hospitals. Despite the anticipated nature of the cohort turnover and the supervisory structures that exist in teaching hospitals, the annual July turnover of residents results in a longer average length of stay (i.e., increased resource utilization) for both minor and major teaching hospitals and higher mortality rates (i.e., decreased quality) for major teaching hospitals, relative to a control group of non-teaching hospitals. In major teaching hospitals, in particular, we find evidence of an anticipation effect that presents as a gradual decrease in performance beginning several months before the actual cohort turnover. We identify higher overall quality of nursing and increased intensity of potential quality assurance as managerial levers for mitigating this decrease in hospital operational performance.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49849
- Harvard Business School Case 115-006
Haier: Zero Distance to the Customer (A)
No abstract available.
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- Harvard Business School Case 115-056
Haier: Zero Distance to the Customer (B)
No abstract available.
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- Harvard Business School Case 115-057
Haier: Zero Distance to the Customer (C)
No abstract available.
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- Harvard Business School Case 916-017
TheLadders (C)
Supplements the (A) case.
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- Harvard Business School Case 516-031
Futbol Club Barcelona
In June 2015, FC Barcelona president Josep Bartomeu sees his team lift the UEFA Champions League trophy, completing an impressive trophy haul in the 2014–2015 season. Unique for a club of its caliber, five of the starting eleven are products of FC Barcelona's youth academy, La Masia. Yet none of the trophies and accolades guarantee future success. Bartomeu faces pressing questions about the club's business model—and in particular about the tensions between local and global activities—as well as decisions about the ongoing investment in the youth academy, funding for the club's Foundation and other sports, and its relatively low ticket prices. How could Barça continue to win on and off the field in the increasingly competitive and global world of European football, while still protecting its local focus and traditions?
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- Harvard Business School Case 615-031
Caesars Entertainment
This case describes the introduction of a regression analysis model for forecasting guest arrivals to Caesars Palace hotel in Las Vegas, Nevada. The company will use the forecast to staff the front desk in the hotel. The staff is unionized and the company has little flexibility to change staffing levels on a short-term basis. The case is set in the context of industry overcapacity and lower customer demand. The case describes several models that could be used to forecast guest arrivals, including a moving average technique and a multiple regression model. The multiple regression model includes over 40 independent variables, including dummy variables (e.g., to represent day of week, month, year, holidays, paydays) as well as continuous variables to represent customer segment and average daily room rate. The case contains tables showing the output of the regression model and compares the fit of the moving average and regression models. The case allows students to understand how such a model is developed within an organization and to evaluate the models presented. Students may work with a data file with several years of historical data or they may work with the model description and output results in the case.
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- Harvard Business School Case 315-129
HealthCare.gov: The Crash and the Fix (A)
A review of the process utilized by the Obama administration to create the HealthCare.gov exchange and the problems that resulted from the implementation effort.
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- Harvard Business School Case 315-130
HealthCare.gov: The Crash and the Fix (B)
The (B) case provides the follow on strategy and processes utilized to get the site up and running after the initial failures of implementation.
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