4779 news (4779 unread) in 28 channels
InformationWeek Management News
(1696 unread)
Radio Tuck
(42 unread)
Forbes.com: Entrepreneurs and Small Business News and Information
(159 unread)
Forbes.com: Management News
(21 unread)
Forbes.com: Finance and Funding News and Information for Entrepreneurs and Small Businesses
(45 unread)
Forbes.com: Human Resources News and Information for Entrepreneurs and Small Businesses
(44 unread)
Forbes.com: Legal and Tax News and Information for Entrepreneurs and Small Businesses
(41 unread)
Forbes.com: Sales and Marketing News and Information for Entrepreneurs and Small Businesses
(43 unread)
Forbes.com: Management News and Information for Entrepreneurs and Small Businesses
(46 unread)
CEO EXCHANGE - MP3 Podcast | PBS
(10 unread)
Entrepreneurial Thought Leaders
(82 unread)
World Finance
(20 unread)
Stephen R. Covey
(20 unread)
MBA Podcasts (Mp3)
(11 unread)
The McKinsey Quarterly
(62 unread)
Andrea Kimmel from MBA Admissions speaks with Joe Badaracco, MBA Program Chair, about the HBS MBA Program and the Global Economic Crisis among other topics.
| Published: | November 26, 2008 |
| Paper Released: | October 2008 |
| Authors: | Sandeep Purao, Carliss Y. Baldwin, Alan Hevner, Veda C. Storey, Jan Pries-Heje, Brian Smith, and Ying Zhu |
This paper examines the sciences of design as an emerging field of study that cuts across disciplinary boundaries. The paper summarizes and synthesizes the positions, reflections, opportunities, and challenges expressed at the first doctoral consortium to explore the topic, held in 2008. It thus provides a useful agenda for clarifying and articulating important strands of this nascent field. Key concepts include:
The boundaries and contours of design sciences continue to undergo definition and refinement. In many ways, the sciences of design defy disciplinary characterization. They demand multiple epistemologies, theoretical orientations (e.g. construction, analysis or intervention) and value considerations. As our understanding of this emerging field of study grows, we become aware that the sciences of design require a systemic perspective that spans disciplinary boundaries. The Doctoral Consortium at the Design Science Research Conference in Information Sciences and Technology (DESRIST) was an important milepost in their evolution. It provided a forum where students and leading researchers in the design sciences challenged one another to tackle topics and concerns that are similar across different disciplines. This paper reports on the consortium outcomes and insights from mentors who took part in it. We develop a set of observations to guide the evolution of the sciences of design. It is our intent that the observations will be beneficial, not only for IS researchers, but also for colleagues in allied disciplines who are already contributing to shaping the sciences of design.
Paper Information
| Published: | November 26, 2008 |
| Paper Released: | September 2008 |
| Authors: | Juan Alcacer and Paul Ingram |
Economic globalization presents severe governance challenges. The insufficiency of states as a source of surety for transactions that transcend national borders creates an opportunity for an increased role for organizations in the global institutional framework. The authors of this paper applied a network methodology to show how one type of organization, the intergovernmental organization (IGO), facilitates the cross-border investments of another type, the multinational corporation (MNC). They further document the interdependence between domestic institutions, and international institutions represented by IGOs. The results help to understand and explain which countries attract FDI, and from which senders. Results also point to an emerging rivalry between states and organizations as sources of governance in the global economy. Key concepts include:
Global economic transactions such as foreign direct investment must extend over an institutional abyss between the jurisdiction, and therefore protection, of the states involved. Intergovernmental organizations (IGOs), whose members are states, represent an important attempt to span this abyss. IGOs are mandated variously to smooth economic transactions, facilitate global cooperation, and promote cultural contact and awareness. We use a network approach to demonstrate that the connections between two countries through joint-membership in the same IGOs are associated with a large positive influence on the foreign direct investment that flows between them. Moreover, we show that this effect occurs not only in the case of IGOs that focus on economic issues, but also on those with social and cultural mandates. This demonstrates that relational governance is important and feasible in the global context, and for the most risky transactions. Finally we examine the interdependence between the IGO network and the domestic institutions of states. The interdependence between these global and domestic institutional forms is complex, with target-country democracy being a substitute for economic IGOs, but a complement for social and cultural IGOs.
Paper Information
A business case on a division of one of the best-known Internet companies takes the lead this week. "Amazon Web Services" by HBS professors Robert Huckman and Gary Pisano, with Liz Kind, senior researcher at the HBS California Research Center, describes how the retailing giant Amazon.com, Inc. weighed the decision to offer Web-based storage and computing services to Web developers. In the face of increasing competition from Google, Microsoft, and IBM, was it a wise move? Would there be synergy between the new entity and Amazon's core business of retailing products ranging from books to home appliances? The case provides a great opportunity to learn about the opportunities and pitfalls of operational diversification.
Other faculty work this week looks at Argentina's mixed experience with the privatization of water; the effects of trade liberalization on organizational design; and developing a sales strategy for advertising services (the case "Butler, Shine, Stern & Partners").
— Martha Lagace
Working Papers Reality versus Propaganda in the Formation of Beliefs about Privatization| Authors: | Rafael Di Tella, Sebastian Galiani, and Ernesto Schargrodsky |
|---|
Argentina privatized most public utilities during the 1990s but re-nationalized the main water company in 2006. We study beliefs about the benefits of the privatization of water services amongst low and middle-income groups immediately after the 2006 nationalization. Negative opinions about the privatization prevail. These are particularly strong amongst households that did not benefit from the privatization and amongst households that were reminded of the government's negative views about the privatization. A person's beliefs of the benefits of the water privatization were almost 30% more negative (relative to other privatizations) if his/her household did not gain access to water after the privatization. Similarly, a person's view of the water privatization (relative to other privatizations) was 16% more negative if he/she was read a vignette with some of the negative statements about the water privatization that Argentina's President expressed during the nationalization process. Interestingly, the effect of the vignette on households that gained water is insignificant, while it is largest (and significant) amongst households that did not gain water during the privatization. This suggests that propaganda was persuasive when it had a basis on reality.
Download the paper from SSRN ($5): [papers.nber.org]
The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization| Authors: | Maria Guadalupe and Julie M. Wulf |
|---|
This paper establishes a causal effect of competition from trade liberalization on various characteristics of organizational design. We exploit a unique panel dataset on firm hierarchies (1986-1999) of large U.S. firms and find that increasing competition leads firms to become flatter, i.e., (i) reduce the number of positions between the CEO and division managers (DM), (ii) increase the number of positions reporting directly to the CEO (span of control), (iii) increase DM total and performance-based pay. The results are generally consistent with the explanation that firms redesign their organizations through a set of complementary choices in response to changes in their environment.
Download the paper: [www.hbs.edu]
Unravelling in Two-Sided Matching Markets and Similarity of Preferences| Author: | Hanna W. Halaburda |
|---|
This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism that the literature focuses on), unravelling is more likely to occur when participants have more similar preferences. It also shows that any Pareto-optimal mechanism must prevent unravelling, and that the ex-post stable mechanism is Pareto-optimal if and only if it prevents unravelling.
Download the paper: [www.hbs.edu]
Cases & Course Materials Amazon Web ServicesHarvard Business School Case 609-048
Considers the development of Amazon Web Services (AWS), a division of Amazon.com, Inc., specializing in the provision of web-based storage and computing services to web developers. The case focuses on the issues facing Andy Jassy, the head of AWS, in 2008 as AWS faces increased competition from established technology giants, such as Google, Microsoft, and IBM. Students are asked to consider whether entry into web services by Amazon, which had established its brand in retail, represented a prudent move by the company. The case provides an opportunity to highlight the benefits of AWS's variable pricing for developers and to determine where overlaps exist between Amazon's core retailing business and AWS. Students are also provided with an opportunity to discuss operational diversification and its limits within the AWS context.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=609048
Harvard Business School Case 809-063
Steve Jobs and Steve Wozniak are best friends who enjoy pulling pranks together and talking about electronics. After several small collaborations, Jobs pitches Wozniak on starting a company together to sell computers based on Wozniak's design for a personal computer. Wozniak faces decisions about whether to quit the job he loves at Hewlett-Packard to join Apple Computer, how to define his role within Apple, whether to take on Jobs as his co-founder, whether to accept a third co-founder proposed by Jobs, and how to split equity with his co-founders. Early on, they add an outside investor who changes the company's trajectory and who brings in a new chief executive. Later, tensions rise between the two founders as their strategic visions diverge and as the company grows. Wozniak has now learned some disturbing news about his co-founder and has to decide whether that news will affect his continuing collaboration with Jobs.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=809063
Harvard Business School Case 508-043
Selling an intangible like advertising services is a difficult task. The first step is to understand how brands buy these services. What are they looking for? What do they need to learn? How do they go about assessing things like creativity, trust, and loyalty? This set of cases puts the students into the roles of the seller (an advertising agency named Butler, Shine, Stern & Partners) and the buyer (MINI USA) and asks them to develop a sales strategy and a buying strategy for advertising services.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=508043
Harvard Business School Case 909-007
In 2008, the Japanese consumer payments landscape featured ongoing widespread use of cash, limited use of credit cards and rapid rise of e-money systems based on contactless technology embedded in cards and especially mobile phones. The case details the alliances that created new products, as well as the regulations that sometimes stood in the way. Throughout, the case identifies incentives for both consumers and merchants, including direct costs, efficiency benefits, rebates, and treatment in case of loss or fraud.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=909007
Harvard Business School Note 309-052
This note reviews the basic rules for copyright protection in both the U.S. and the EU. It outlines the works and rights protected, the fair use and first-sale limitations on copyright, as well as the application of these rules to software, video, recordings, and Internet service providers.
Purchase this note:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=309052
Harvard Business School Case 409-045
The CEO of the Corporate Solutions Group at Jones Lang LaSalle Americas (JLL) is executing an organizational redesign to respond to its strategy goal of becoming more customer-centric. This case examines the dramatic corporate reorganization that took place at JLL in 2001 in response to changes in the competitive structure of the global real estate services market mandating that providers become more customer-solutions oriented. The case is set shortly after the announcement of the restructuring which, for the first time, will place the three business units that service the company's corporate clients (i.e., those clients for whom real estate is not their core business) under a single structure, the Corporate Solutions Group, to target the profitable and growing segment of global MNCs who are outsourcing their real estate departments. Peter Barge, the protagonist of the case, has been named the CEO of the new group and has been tasked with coordinating the diverse activities of the three units to achieve JLL's broader goal of "customer excellence." One of Barge's first actions is to move the account management role outside of the traditional business unit structure and augment the role to that of service integrator to achieve his internal objective of business unit collaboration and to provide clients with a single point of contact across the full range of the company's offerings. The organizational restructuring will change the real estate services firm from an autonomous, product-focused model to an account-centered matrix structure and will challenge many elements of the company's current organizational design including accountability, revenue and cost allocation, compensation systems, sales and marketing, and also the corporate culture. The case offers an opportunity to explore the numerous, interconnected elements of an organization's architecture that must be in alignment in order for it to effectively execute its chosen strategy.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=409045
Harvard Business School Case 708-418
Nearly all environmental organizations have a similar aim: to stop the degradation of the natural environment. However, the strategies which environmental organizations choose to employ are sometimes starkly different. Compares the models of two dissimilar environmental powerhouses: Greenpeace and World Wildlife Fund for Nature (WWF). Active in 100 countries, WWF works with governments, businesses, other NGOs, and communities to set up conservation programs to preserve natural habitat. In contrast, Greenpeace works to campaign for environmental change against governments and corporations and accepts funding only through individuals and foundation grants. Explores the detailed history and business models of both organizations.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=708418
Harvard Business School Case 408-127
This case focuses on Kit Hinrichs, a 65-year-old partner at Pentagram, a privately owned multidisciplinary design firm. One of the world's most prestigious design firms, Pentagram was founded by five designers from different disciplines in London in the 1970s. By 2008, Pentagram remained small, with less than 30 partners, each a veritable star in his or her own right. Pentagram had two founding principles, the first of which was equality. The equality principle meant that leadership was evenly distributed; partners with seniority had no greater formal authority than newer partners, and the only formal leadership role was a chairman position, which, after being held with a founder for 30 years, was rotated every two years. Further, Pentagram had no corporate office; each partner was expected to manage his or her own financial, marketing, and human resource functions. Pentagram's second principle was generosity. All partners were equal shareholders in the firm. Pentagram branched out to New York in the early 1980s, and in the late 1980s, Hinrichs established a San Francisco location. This case traces Hinrichs as he builds Pentagram's San Francisco office, and it also details the evolution of Pentagram itself. In addition, this case offers a thick description of Hinrichs and his team working with a client. This case can be used in business and executive education courses on professional service firms, leading a creative organization, and the role of design in business. It should also be used by schools of design.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=408127
Purchase this supplement:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=408128
Harvard Business School Case 209-009
When Texas Utilities Company (TXU) wanted to acquire The Energy Group, the latter needed to spin-off its coal mining assets, Peabody Coal, to avoid running afoul of antitrust authorities. In this case, TXU's investment banker, Lehman Brothers, considers whether to acquire Peabody Coal in a $2.7 billion transaction.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=209009
Harvard Business School Case 606-023
Provides a context and exercise for introducing retail inventory management, including cost optimization, service-level criteria, and forecasting in single and multiproduct settings. The owner of a single-location paper and paper products store considers the implications of expansion for inventory management. Considerations include lost sales, retail metrics for multiproduct settings, and shelf space constraints.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=606023
| Authors: | Rajshree Agarwal and Mary Tripsas |
|---|---|
| Publication: | Chap. 1 in The Blackwell Handbook of Technology and Innovation Management, edited by Scott Shane, 3-55. John Wiley & Sons, Inc., 2008 |
No abstract is available at this time.
Book link: [www.blackwellpublishing.com]
Can Mutual Fund Managers Pick Stocks? Evidence from Their Trades Prior to Earnings Announcements| Authors: | Malcolm Baker, Lubomir Litov, Jessica A. Wachter, and Jeffrey Wurgler |
|---|---|
| Publication: | Journal of Financial and Quantitative Analysis (forthcoming) |
We consider measures of stock-picking skill of mutual fund managers based on the earnings announcement returns of the stocks that they hold and trade. Relative to standard approaches, this approach focuses on an especially informative subset of the returns data, potentially increasing power to detect skilled trading, and also sheds light on the sources of skilled trading. We find that the average fund's recent buys significantly outperform its recent sells around subsequent earnings announcements. We find that mutual fund trades also forecast EPS surprises. The point estimates suggest that skilled trading around earnings announcements, deriving from an ability to forecast economic fundamentals, represents a disproportionate fraction of the total abnormal returns to skilled trading by mutual funds estimated in prior work.
Third World Multinationals: A Look Back| Author: | Louis T. Wells, Jr. |
|---|---|
| Publication: | Chap. 2 in Emerging Multinationals in Emerging Markets, edited by Ravi Ramamurti and Jitendra V. Singh. New York: Cambridge University Press, forthcoming |
No abstract is available at this time.
Book link: [www.cambridge.org]
| Published: | November 24, 2008 |
| Author: | Staff, HBS Alumni Bulletin |
For the school that so boldly launched the MBA 100 years ago and went on to become the bluest of blue-chip brands in business education, it seemed only fitting that Harvard Business School should mark its centennial year by examining the future of the degree it invented.
"It was our view that you need to think critically about what you are doing every 100 years or so, whether you need to or not," Dean Jay Light wryly observed in opening remarks to an unprecedented campus gathering last March of business school deans, corporate recruiters, and executives. It was a welcome moment of levity given the seriousness of the topic at hand. Some of the schools represented had already implemented major MBA program reforms. Others were considering them. But everyone had one thing in common: Each had assisted HBS professors Srikant Datar and David Garvin in their painstaking research to render the most complete contemporary picture of MBA education.
"The level of cross-school cooperation was unprecedented," Datar said afterward. For Datar and Garvin, the two-day session was a "thank-you" to the participants for their generous support and a dress rehearsal for a faculty colloquium in May intended to frame the issues for potential curriculum changes at HBS. (To ensure open discussion, comments made during the two colloquia were not for attribution.)
For their research project, Datar and Garvin interviewed 30 deans and associate deans and roughly 100 students in large and small groups. They wrote case studies on MBA programs at Chicago, INSEAD, Stanford, Yale, and HBS, plus a case on the Center for Creative Leadership (all are available from Harvard Business Publishing); collected data on aggregate trends in MBA enrollments and program designs; and compiled a detailed curriculum analysis of eleven business school programs. To complete the picture, they also interviewed leading academic critics and 28 executives and recruiters. The findings presented a mixed diagnosis of the health of MBA programs but on balance were, in the words of one HBS faculty member, "depressing."
Such pessimism seems more than a little counterintuitive. In a global economy, corporations have a seemingly insatiable need for good managers, one that will only grow in the years to come. To meet that demand, business schools around the world turn out about 500,000 MBAs a year, with upwards of 150,000 of those in the United States alone. At HBS, the business of business education is thriving. Applications are on the rise again after trending downward for several years. Only one out of nine applicants to the Class of 2010 got a coveted acceptance letter. Almost no one passes up the opportunity; 91 percent of those accepted started class this fall, a yield unmatched by any rival. HBS MBAs are in high demand in the job market. So where's the rub?
Despite these positive indicators, there are deep-rooted concerns about the "industry." For example, a number of well-respected academics have leveled withering critiques at business schools in recent years.
Warren Bennis at USC's Marshall School of Business argues that they are "institutionalizing their own irrelevance" by becoming too focused on scientific research that has little connection to business reality. Ten scholars echo Bennis's criticism in the December/ January 2008 issue of the Academy of Management Journal in which they question the value of business school research.
Henry Mintzberg of McGill University in Montreal devoted a book to his contention that "conventional MBA programs train the wrong people in the wrong ways with the wrong consequences."
Leadership, central to the mission of HBS and other top schools, can't be taught in a classroom, he contends. Mihnea Moldoveanu (DBA '97) of the University of Toronto's Rotman School of Management maintains that the MBA is in crisis "because it selects for and cultivates traits and skills [tied to specific disciplinary knowledge] that are increasingly vacuous and superfluous." And HBS professor Rakesh Khurana contends that many business schools have been complicit in creating recent corporate scandals by turning out graduates fixated on shareholder value at the expense of all other stakeholders in society.
If academic critiques were not discouraging enough, Datar and Garvin distilled more bad news from their research.
"There's an escalating drumbeat of concerns from alums, from students, and from customers—the companies that recruit MBAs," Garvin explained in an interview. Among their findings:
Reflecting on these findings, Garvin concluded, "Business as usual isn't good enough."
The Ford Foundation changed everythingWhat's usual today dates back nearly fifty years to a 1959 Ford Foundation report that sparked a revolution in American business education.
The report characterized MBA programs as "vocational" in content and "indefensible" in quality, citing the low caliber of students, faculty, curriculum, and research. Most teaching was based on business anecdotes. The remedy advocated by the report was to ground the programs in strong disciplinary knowledge.
The report's impact was swift and dramatic, writes Khurana in his sweeping history of American business education, From Higher Aims to Hired Hands (Princeton University Press, 2007). Within five years, business school faculties became specialized along traditional academic disciplines, with particular emphasis on economics and quantitative analysis. And that's largely where they remain today.
At the time, it made sense to structure business education around academic disciplines, explains Joel Podolny, dean of the Yale School of Management and a participant in the March colloquium. (He previously was a professor at HBS.) "The strict disciplinary model of management education arose at a time of large, vertical corporate bureaucracies, when management careers and management problems were carved up by function," he continues. "A typical manager would spend his entire career within one function—say marketing, finance, or accounting—and he would be given only a piece of a larger puzzle on which to work."
But times have changed, says Podolny: "As organizations have become flatter, those running them are looking for leaders who can see opportunities and address problems that cut across functional boundaries." Even managers in large organizations have to think and act more like entrepreneurs in their ability to synthesize information and coordinate people and resources on an increasingly global scale, he says.
As the business landscape took on a completely new look beginning in the mid-1990s, academic critics found an easy target in the mismatch between the fundamental disciplinary focus of most MBA faculty and business reality. Enron and other corporate scandals early in this decade added legitimacy to complaints that business schools, and their graduates, had lost their way. And with the exception of top-ranked schools, two-year MBA program enrollments began to decline in favor of executive and part-time MBA programs. Against this backdrop, a number of schools concluded that business as usual was bad for business education, and they plunged into self-examination projects. Yale and Stanford, among others, recently redesigned their MBA programs, and their efforts provide valuable insights into issues facing HBS.
For its part, HBS never traveled as far down the disciplinary road as other top business schools. While the School did hire more faculty with strong disciplinary research backgrounds, it remained steadfast in its mission to deliver a general management education, facilitated by the case method of teaching and a corresponding faculty commitment to remaining close to actual business practice. Moreover, the School continuously evaluated and updated its curriculum.
"The general criticism of MBA programs you read today—that MBA education at most schools has drifted too far into theory and has relatively little relevance for practice—I actually think that's a valid concern," Light says in an interview. "But I don't think that's the issue for us."
Why? Because the case method of instruction is at the other end of the pedagogical spectrum from ivory-tower disciplinary research, explains Light. By its nature, the case method requires students to range across disciplinary and functional boundaries. For faculty, writing cases, some 400 a year, means less time in the ivory tower and more time elbow to elbow with owners and managers.
Even Warren Bennis, who popularized the ivory-tower critique, agrees that HBS is different. In an interview, he noted that the School often has been criticized for the opposite problem—in essence, for being "too practical."
Light also questions Henry Mintzberg's argument that MBA students can't grasp the meaning of leadership because they have never led anything.
"He can't possibly mean our students," says Light. "Just go talk to them. They know what leadership is. In our classrooms we have plenty of students who have had real positions of leadership and know what it's about."
The real issues for HBS, Light continues, are found in the changing nature of business itself. It's more global, more technology dependent, and less hierarchical. Knowledge-based industries are overtaking older, more basic industries. And the pace of change is quickening.
"So we have to understand how the world is changing and make sure we're preparing our students for the future," says Light.
That was the challenge faced by the roughly 100 HBS faculty members who attended all or part of the May colloquium. Most agreed that business schools are skilled at "know what"—teaching disciplinary and functional knowledge. But they fall down on "know how"—teaching students how to think beyond information silos and to be more self-aware as leaders.
It's the "know how" that's most valued in the business world, Datar and Garvin found in their research. How to bridge the "knowing-doing" gap became a focal point of discussion. By the end, a consensus "bordering on unanimity" emerged, says Garvin, namely, that bridging the knowing-doing gap at HBS means supplementing the curriculum in three areas: globalization, experiential learning, and leadership development.
But how? "That's the big question," says Datar. "To put it in the context of HBS, do we believe that every one of these things can be taught in a ninety-person classroom in a case-discussion format? That is the fundamental question we are grappling with."
Curriculum reform at HBSAcknowledging that HBS can do more in the areas of globalization, experiential learning, and leadership development isn't an admission of doing little or nothing. Far from it.
Professor Krishna Palepu, senior associate dean for International Development, contends that most people don't fully appreciate how much HBS has already done to advance a global agenda in the MBA Program. Beginning in 1996, HBS has opened six research centers that today facilitate faculty research in Asia, Europe, Latin America, and Silicon Valley and provide the springboard for upwards of 130 cases a year.
"Our research center strategy has put us in a much better position than most other schools," says Palepu.
The centers are the linchpin in the faculty's quest to develop materials, frameworks, and theories that will prepare students to function in a global economic environment. Palepu explains: "If you have global frameworks that are robust and travel across boundaries, you don't actually have to teach management country by country. So the first order of business for us is to get the global content right so that when our students graduate they can work for a company that is operating in multiple geographies." In that regard, Palepu and other faculty foresee the possible addition of a required course on global management issues, plus more emphasis throughout the curriculum on international issues.
Beyond the classroom, global preparation also involves travel, study, and work abroad. This is where experiential learning comes into play. At HBS, students already have access to several winter break Immersion programs created to provide noncredit educational experiences that complement classroom work. Last January, four programs took students abroad to China and Vietnam, India, the Middle East, and Europe. Light and many faculty members see an opportunity for HBS to expand the Immersion programs. There's no substitute for the experience of actually being on the ground in another country, notes Datar. The question remains whether such experiences should be required.
Leadership development, the third fertile area for HBS curriculum innovation, goes to the very heart of the School's mission to educate leaders who make a difference in the world. Who those leaders are has changed dramatically over the past generation, from a largely white, male, domestic student body to one today that is 38 percent female, 27 percent ethnic minorities, and 33 percent international.
How HBS teaches leadership has changed, too, evolving from narrowly focused industry- and discipline-based courses to more diverse, integrative courses that reflect real-world complexity. In 2004, the School inaugurated its most ambitious leadership course ever. Leadership and Corporate Accountability, a first-year requirement, presents managerial challenges from a cross-disciplinary perspective. The course, developed by faculty experts in ethics, law, finance, accounting, and organizational behavior, aims to give students an analytical framework for thinking about tough, contemporary business issues by combining economic, legal, and ethical perspectives and requiring students to wrestle with the often conflicting needs of multiple stakeholders.
What more should HBS do? Deans and recruiters told Datar and Garvin that MBAs in general need more soft skills, such as self-awareness and the capacity for introspection and empathy. They also found MBAs lacking in critical and creative thinking, as well as communication skills. "These skills lie much more on the 'doing' side of the scale than the 'knowing' side," says Datar.
Such soft-skills development by its very nature involves labor-intensive small groups and requires "high-touch" faculty involvement with students. And that's a potential issue. While faculty may be interested in pursuing such options, there's a counterbalancing concern about being stretched too thin. There's also concern that faculty steeped in disciplinary research might not be good at, or even interested in, taking on soft-skills development.
One work-around, suggests Palepu, is to become more flexible in staffing. "There's already a continuous shortage of faculty at all the top schools, and I don't see that abating any time soon," he says. Without more flexibility, not much can change. "Right now we're saying either 100 percent is done by our faculty, or it's not done. But what if we said 80 percent is done by the faculty?" That would leave 20 percent for skilled nonfaculty practitioners to advance certain teaching objectives, Palepu explains.
Garvin cautiously suggests a similar approach, turning to Harvard Medical School for an analogy. "The Medical School has 17 affiliated teaching hospitals, so when it offers small-group teaching and tutorials, the school draws on doctors in the affiliated hospitals," says Garvin. "We may need to consider a similar model where faculty are heavily invested in the design of courses and then guide others, perhaps alums or skilled adjuncts, in the delivery of project-based learning."
Faculty committee studies optionsThe School's next steps are now in the hands of a faculty committee headed by Professor Joe Badaracco, who chairs the MBA Program. Datar and Garvin are members along with seven other faculty members. The group's challenge is to hammer out details for implementing changes in the three areas where there's broad agreement for action.
Ideas abound. In response to an invitation from Light, 50 faculty members sent the committee detailed curriculum proposals ranging from two to several pages. Thinking through their ramifications poses a daunting task. For example, adding small-group, soft-skill development may sound simple, but doing so for some 900 students would have a significant impact on faculty teaching assignments, recruitment, and research, as well as on the School's facilities.
Whatever curriculum changes HBS ultimately adopts, one thing is certain. The School will remain steadfast in its commitment to the case method.
Reflecting on the discussions that took place during the faculty colloquium, Garvin says he detected "no sense at all that the case method is in need of repair." The program changes under consideration would "supplement and complement the case method to do some things that it's not designed to do." Adds Datar: "Figuring out the exact mechanisms for how we do that is the job ahead for the committee."
For his part, Dean Light sees the work as important to the School's second century.
"Throughout our history we've had periods of frank self-reflection," he notes. "The Centennial has provided an opportunity to assess the impact of significant innovations over the past few decades in the context of a rapidly changing world—to step back and see the forest and the trees." 
While the economic news is depressing, personal happiness can still be cultivated. New research shows that steady, regular doses of exercise and even attending religious services can have a cumulative, positive effect on health and peace of mind. That's the message of "Getting Off the Hedonic Treadmill, One Step at a Time: The Impact of Regular Religious Practice and Exercise on Well-Being," coauthored by Harvard Business School's Michael I. Norton.
Drawing conclusions from two studies, "we suggest that shifting focus from the impact of major life changes on well-being to the impact of seemingly minor repeated behaviors is crucial for understanding how best to improve well-being," they write.
Case studies announced this week look at, among other topics, the impact of perceived excessive executive compensation and severance packages on the current credit crisis, and at Intel's trial-and-error effort to launch new businesses.
— Martha Lagace
Working Papers An Exploration of the Japanese Slowdown during the 1990s| Author: | Diego A. Comin |
|---|
No abstract is available at this time.
Download the paper: [www.hbs.edu]
(When) Are Religious People Nicer? Religious Salience and the 'Sunday Effect' on Pro-social Behavior| Author: | Deepak Malhotra |
|---|
Prior research has found mixed evidence for the long-theorized link between religiosity and pro-social behavior. To help overcome this divergence, we hypothesize that pro-social behavior is linked not to religiosity per se, but rather to the salience of religion and religious norms. We report on a field experiment that examines when auction participants will respond to an appeal to continue bidding for secular charitable causes. The results reveal that religious individuals are more likely than non-religious individuals to respond to an appeal "for charity" only on days that they visit their place of worship; on other days of the week, religiosity has no effect. Notably, the result persists after controlling for a host of factors that may influence bidding, but disappears when the appeal "for charity" is replaced by an appeal to bid for other reasons. Implications for the link between religion and pro-social behavior are discussed.
No PDF is available at this time.
Cases & Course Materials Executive Pay and the Credit Crisis of 2008Harvard Business School Case 109-036
The credit crisis of 2008 placed compensation practices at publicly traded firms in the United States under scrutiny. This case examines perceived excessive pay and severance packages at several firms implicated in the credit crisis of 2008, the executive compensation provisions in the Emergency Economic Stabilization Act, and discusses the implications for compensation committees at public companies.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=109036
Harvard Business School Case 709-436
Hearts on Fire, a successful branded diamond producer, established the position of Brand Development Manager (BDM) to build the company's presence, sales, and relationships with its retail customers. After one year, the CEO, CFO and President must evaluate the impact of the BDM on retail customers, the type of person required to be successful in this position, internal coordination issues with the company's sales force, and the financial returns versus other uses of capital for the company. The case raises issues in aligning business strategy and sales management systems, motivating and managing resellers, people selection, and financial analysis of alternatives.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=709436
Harvard Business School Case 109-006
This case analyzes Infosys' innovative approach to measuring performance in client relations. Infosys' strategy is evolving to build transformational partnerships from its original position as an outsourcer of end-to-end IT projects. A transformational partner helps clients to devise and implement strategies that will allow them to achieve a competitive advantage. The traditional paradigm of service-level agreements (SLAs), while sufficient for Infosys' needs early on, is not able to achieve the level of understanding that transformational partnerships require. Infosys applies the principles of the Balanced Scorecard (BSC) to produce a feedback mechanism that allows the partnership to grow to the benefit of both parties.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=109006
Harvard Business School Case 609-043
For Intel Corporation, the processes and priorities that have made it so successful are difficult to overcome as the company tries to diversify away from its core. The case examines the history and evolution of the New Business Initiatives (NBI) group, as the leader grapples with the questions surrounding why so few of the unit's start-ups actually become significant businesses within Intel's existing divisional structure. While a handful have successfully "graduated" and continue to show high levels of promise, these ventures did not represent truly new and distinct businesses for Intel. Rather they were strongly tied to existing businesses, raising the question of whether NBI had simply become a way for existing divisions to off-load budgetary risk. The case examines what worked, and what didn't, and the challenges posed by transitioning new ventures into the mainstream of the company.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=609043
Harvard Business School Case 109-034
After years of rapid growth and stock price appreciation, New Century Financial Corporation, one of the largest subprime loan originators in the U.S., reported accounting problems in early 2007. The resulting liquidity crisis forced the company to file for Chapter 11 bankruptcy protection. According to the Bankruptcy Examiner assigned to investigate New Century, the company's troubles "were an early contributor to the subprime meltdown" which fueled a financial crisis in the U.S. and beyond. The case study examines New Century's business model and accounting practices and focuses on the role of management, audit committee, and external auditors in the problems at New Century based on the findings of the Bankruptcy Examiner.
Purchase this case:
http://harvardbusinessonline.hbsp.harvard.edu/ b01/en/common/item_detail.jhtml?id=109034
| Authors: | Lauren Cohen and Breno Schmidt |
|---|---|
| Publication: | Journal of Finance (forthcoming) |
We explore a new channel for attracting inflows using a unique dataset of corporate 401(k) retirement plans and their mutual fund family trustees. Families secure substantial inflows by being named the trustee of a 401(k) plan. We find that family trustees significantly overweight their 401(k) client firm's stock. Trustee overweighting is more pronounced when the relationship is more valuable to the trustee family, and it is concentrated in those funds that receive the greatest benefit from the inflows. When other mutual funds are selling the client firm's stock, the trustee does the opposite and significantly increases its holdings of the client. This overweighting is not explained by superior information. We also quantify the flow benefit to the trustee mutual funds of being included in the client firm's 401(k) plan and find that this inclusion has an economically and statistically large, positive effect on inflows.
Getting Off the Hedonic Treadmill, One Step at a Time: The Impact of Regular Religious Practice and Exercise on Well-Being| Authors: | Daniel Mochon, Michael I. Norton, and Dan Ariely |
|---|---|
| Publication: | Journal of Economic Psychology 29 (2008): 632-642 |
Many studies have shown that few events in life have a lasting impact on subjective well-being because of people's tendency to adapt quickly; worse, those events that do have a lasting impact tend to be negative. We suggest that while major events may not provide lasting increases in well-being, certain seemingly minor events—such as attending religious services or exercising—may do so by providing small but frequent boosts: if people engage in such behaviors with sufficient frequency, they may cumulatively experience enough boosts to attain higher well-being. In Study 1, we surveyed places of worship for 12 religions and found that people did receive positive boosts for attending services and that these boosts appeared to be cumulative: the more they reported attending, the happier they were. In Study 2, we generalized these effects to other regular activities, demonstrating that people received boosts for exercise and yoga, and that these boosts, too, had a cumulative positive impact on well-being. We suggest that shifting focus from the impact of major life changes on well-being to the impact of seemingly minor repeated behaviors is crucial for understanding how best to improve well-being.
Laws versus Contracts: Legal Origins, Shareholder Protections, and Ownership Concentration in Brazil, 1890-1950| Author: | Aldo Musacchio |
|---|---|
| Publication: | Business History Review 82, no. 3 (fall 2008): 445-473 |
This article examines some of the institutional conditions that facilitated the development of equity markets in Brazil. A critical factor was the addition of protections for investors to corporate bylaws, which enabled relatively large corporations in Brazil to attract investors in large numbers. By availing themselves of this strategy, the firms generated a relatively low concentration of ownership before 1910. Archival evidence, such as company statutes and shareholder lists, reveals that the addition of voting rights to their bylaws, particularly maximum vote provisions and graduated voting scales (which stipulated that less-than-proportional votes increase in parallel with shareholdings), allowed many Brazilian corporations to balance the relative voting power of their small and large investors. In companies that made such arrangements, the concentration of ownership and control was sharply lower than in the average company. Judging by the Brazilian companies examined for this article, it also appears that the concentration of control was significantly lower before 1910 than it is today.
Observing Other's Behavior and Risk Taking in Decisions from Experience| Authors: | Eldad Yechiam, Meir Druyan, and Eyal Ert |
|---|---|
| Publication: | Judgment and Decision Making 3, no. 7 (October 2008): 493-500 |
This paper examines how observing other people's behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others' choices and outcomes. The tasks involved either equiprobable gains and losses or frequent small gains and rare large losses. The results indicated that, in both risk types, the social exposure increased the proportion of risky selection, but its effect was stronger in the rare-loss condition. In Study 2, the rare-loss task was administered to 32 study participants, with a target individual observing the choices of a paired individual. The results showed that observing others, rather than being observed, led to the pattern of increased risk taking. The findings of the two studies indicate the importance of distinguishing different types of risky situations and shed light on contradictory findings in the literature.
Download the paper: [journal.sjdm.org]
Analysis With his ill-fated defense of Google's multi-million dollar Yahoo! handshake, chief legal officer David Drummond told Congress the search engine tie-up would rejuvenate the Yahoo! web with "better, more interesting ads." It's a common Google refrain. If you believe the party line, Mountain View's top secret advertising money machine rules the roost for one reason: an unswerving commitment to "quality" ads.…
Reg Event What is it: A Free, live, interactive Regcast you can join from your PC or Mac…
The government has dumped legislation intended to overhaul income splitting arrangements among individuals that would have effectively forced small, family-run businesses to pay more tax.…
As Alistair Darling scrambles to deny plans to raise VAT to 18.5 per cent in order to pay for his borrowing binge the row over the problems it will cause for UK businesses deepens.…
| Published: | November 26, 2008 |
| Paper Released: | October 2008 |
| Authors: | Sandeep Purao, Carliss Y. Baldwin, Alan Hevner, Veda C. Storey, Jan Pries-Heje, Brian Smith, and Ying Zhu |
This paper examines the sciences of design as an emerging field of study that cuts across disciplinary boundaries. The paper summarizes and synthesizes the positions, reflections, opportunities, and challenges expressed at the first doctoral consortium to explore the topic, held in 2008. It thus provides a useful agenda for clarifying and articulating important strands of this nascent field. Key concepts include:
The boundaries and contours of design sciences continue to undergo definition and refinement. In many ways, the sciences of design defy disciplinary characterization. They demand multiple epistemologies, theoretical orientations (e.g. construction, analysis or intervention) and value considerations. As our understanding of this emerging field of study grows, we become aware that the sciences of design require a systemic perspective that spans disciplinary boundaries. The Doctoral Consortium at the Design Science Research Conference in Information Sciences and Technology (DESRIST) was an important milepost in their evolution. It provided a forum where students and leading researchers in the design sciences challenged one another to tackle topics and concerns that are similar across different disciplines. This paper reports on the consortium outcomes and insights from mentors who took part in it. We develop a set of observations to guide the evolution of the sciences of design. It is our intent that the observations will be beneficial, not only for IS researchers, but also for colleagues in allied disciplines who are already contributing to shaping the sciences of design.
Paper Information
| Published: | November 26, 2008 |
| Paper Released: | September 2008 |
| Authors: | Juan Alcacer and Paul Ingram |
Economic globalization presents severe governance challenges. The insufficiency of states as a source of surety for transactions that transcend national borders creates an opportunity for an increased role for organizations in the global institutional framework. The authors of this paper applied a network methodology to show how one type of organization, the intergovernmental organization (IGO), facilitates the cross-border investments of another type, the multinational corporation (MNC). They further document the interdependence between domestic institutions, and international institutions represented by IGOs. The results help to understand and explain which countries attract FDI, and from which senders. Results also point to an emerging rivalry between states and organizations as sources of governance in the global economy. Key concepts include:
Global economic transactions such as foreign direct investment must extend over an institutional abyss between the jurisdiction, and therefore protection, of the states involved. Intergovernmental organizations (IGOs), whose members are states, represent an important attempt to span this abyss. IGOs are mandated variously to smooth economic transactions, facilitate global cooperation, and promote cultural contact and awareness. We use a network approach to demonstrate that the connections between two countries through joint-membership in the same IGOs are associated with a large positive influence on the foreign direct investment that flows between them. Moreover, we show that this effect occurs not only in the case of IGOs that focus on economic issues, but also on those with social and cultural mandates. This demonstrates that relational governance is important and feasible in the global context, and for the most risky transactions. Finally we examine the interdependence between the IGO network and the domestic institutions of states. The interdependence between these global and domestic institutional forms is complex, with target-country democracy being a substitute for economic IGOs, but a complement for social and cultural IGOs.
Paper Information
A business case on a division of one of the best-known Internet companies takes the lead this week. "Amazon Web Services" by HBS professors Robert Huckman and Gary Pisano, with Liz Kind, senior researcher at the HBS California Research Center, describes how the retailing giant Amazon.com, Inc. weighed the decision to offer Web-based storage and computing services to Web developers. In the face of increasing competition from Google, Microsoft, and IBM, was it a wise move? Would there be synergy between the new entity and Amazon's core business of retailing products ranging from books to home appliances? The case provides a great opportunity to learn about the opportunities and pitfalls of operational diversification.
Other faculty work this week looks at Argentina's mixed experience with the privatization of water; the effects of trade liberalization on organizational design; and developing a sales strategy for advertising services (the case "Butler, Shine, Stern & Partners").
— Martha Lagace
Working Papers Reality versus Propaganda in the Formation of Beliefs about Privatization| Authors: | Rafael Di Tella, Sebastian Galiani, and Ernesto Schargrodsky |
|---|
Argentina privatized most public utilities during the 1990s but re-nationalized the main water company in 2006. We study beliefs about the benefits of the privatization of water services amongst low and middle-income groups immediately after the 2006 nationalization. Negative opinions about the privatization prevail. These are particularly strong amongst households that did not benefit from the privatization and amongst households that were reminded of the government's negative views about the privatization. A person's beliefs of the benefits of the water privatization were almost 30% more negative (relative to other privatizations) if his/her household did not gain access to water after the privatization. Similarly, a person's view of the water privatization (relative to other privatizations) was 16% more negative if he/she was read a vignette with some of the negative statements about the water privatization that Argentina's President expressed during the nationalization process. Interestingly, the effect of the vignette on households that gained water is insignificant, while it is largest (and significant) amongst households that did not gain water during the privatization. This suggests that propaganda was persuasive when it had a basis on reality.
Download the paper from SSRN ($5): [papers.nber.org]
The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization| Authors: | Maria Guadalupe and Julie M. Wulf |
|---|
This paper establishes a causal effect of competition from trade liberalization on various characteristics of organizational design. We exploit a unique panel dataset on firm hierarchies (1986-1999) of large U.S. firms and find that increasing competition leads firms to become flatter, i.e., (i) reduce the number of positions between the CEO and divisi
