- 21 Aug 2006
- Research & Ideas
How Europe Wrote the Rules of Global Finance
Following decades of liberalization, controls on cross-border capital movements are again being discussed by financial institutions, governments, and policymakers around the globe. Professor Rawi Abdelal discusses implications and the historical roles of Europe and the United States in promoting the flow of capital across national borders. Key concepts include: European policymakers, particularly the French, created regulations and enforcement that govern the majority of the world's capital flows. The U.S. has followed an ad hoc approach to capital liberalization, with no evidence it supported a liberal international financial regime. The trend toward liberalization and a lessening of capital controls on worldwide finance appears to be on the wane. Closed for comment; 0 Comments.
- 17 Aug 2006
- Working Paper Summaries
Corporate Governance and Networks: Bankers in the Corporate Networks of Brazil, Mexico, and the United States circa 1910
Brazil today looks like a typical case in which business groups and close relations between companies and banks play an important role to overcome information and monitoring problems. This was not always the case. To study how the development of financial markets can change the interaction between banks and corporations, Musacchio compared the importance of interlocking boards of directors between corporations and banks in Brazil, Mexico, and the United States at the turn of the twentieth century. This paper and previous research support Musacchio's hypothesis that financial markets in Brazil were sustained by an institutional framework that protected investors, enforced credit contracts, and promoted regular financial disclosure of company accounts. The development of bond and stock markets, and the relatively good corporate governance practices in Brazil before 1930, made connections with bankers less necessary. Key concepts include: Even though Brazil, Mexico, and the United States had very different network structures, all three achieved rapid industrial growth before 1910. Connections with bankers might be good in an environment where access to credit is limited or where close relations help to reduce asymmetries of information. But once financial markets develop, these connections to lenders are less necessary. The development of good disclosure and corporate governance practices in Brazil circa 1910 allowed companies to depend less on connections with banks in the form of corporate bond interlocks. In Brazil, bankers were less central in the network of corporate board interlocks than in Mexico and the United States. In Mexico, foreign companies had access to financial markets abroad and fewer connections with banks. This strong, dense network in Mexico substituted for some of the institutions that promoted financial development and growth in Brazil. While most people see networks and financial markets as substitutes, networks in the United States functioned as complements to financial markets. Networks may successfully substitute for some institutions and generate the credible commitments that are necessary for the expansion of markets. Closed for comment; 0 Comments.
- 05 Jul 2006
- Research & Ideas
Reinventing the Dowdy Savings Bond
Families with low and moderate incomes have difficulty saving money—many can't even open bank accounts. To help these families plan for the future, professor Peter Tufano proposes minor changes to the U.S. savings bonds program. Key concepts include: Encourage savings by offering the option to invest tax refunds in U.S. savings bonds. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions
This paper reviews research and trends in three key areas of movie making: production, distribution, and exhibition. In the production process, the authors recommend risk management and portfolio management for studios, and explore talent compensation issues. Distribution trends show that box-office performance will increasingly depend on a small number of blockbusters, advertising spending will rise (but will cross different types of media), and the timing of releases (and DVDs) will become a bigger issue. As for exhibiting movies, trends show that more sophisticated exhibitors will emerge, contractual changes between distributor and exhibitors will change, and strategies for tickets prices may be reevaluated. Key concepts include: Business tools such as quantitative and qualitative research and market research should be applied to the decision-making process at earlier stages of development. Technological developments will continue to have unknown effects on every stage of the movie-making value chain (production, distribution, exhibition, consumption). Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Advertising and Expectations: The Effectiveness of Pre-Release Advertising for Motion Pictures
This research examines how advertising affects market-wide sales expectations for pre-release movies. The authors use data on advertising expenditures and an online stock market simulation, The Hollywood Stock Exchange (HSX), to track more than 280 movies released between 2001 and 2003. Their findings show that advertising affects the updating of market-wide expectations prior to release, and that this effect is stronger the higher the product quality. Key concepts include: Stock market simulations, such as the Hollywood Stock Exchange, can provide data on test markets, and provide clues about the quality of movies and the appeal of initial advertisements. Studios should spend less money on advertising low-quality movies. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Why IT Matters in Midsized Firms
What does IT actually contribute to a business? Is IT a commodity like electricity or is it a crucial element of competitive advantage? In a study of over 600 medium-sized global firms to analyze the business benefits that IT can enable, the authors found that IT capability was key to profitable business growth. This was true in both the U.S. product and services sectors as well as in Germany and Brazil. Key concepts include: IT matters. IT enables firms to scale. The amount a company spends on IT is a poor indicator of IT functionality and business impact. Firms with business process scalability find it easier to overcome obstacles to growth, differentiate themselves from competitors, and quickly capitalize on opportunities. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Reinventing Savings Bonds
At one point in American history, savings bonds were an important tool families used to build assets and get ahead. While times have changed, this function of savings bonds may be even more important now, especially for the 41 million low- and moderate-income American households. Tufano and Schneider lay out a case for why savings bonds should be reimagined to help millions of Americans build assets now. Key concepts include: Allow taxpayers to purchase bonds with Federal tax refunds. Help low- and moderate-income families redeem their bonds before twelve months. Enlist private sector social marketing for savings bonds. Find a role for savings bonds in the life cycles of low- and moderate-income families. Make the process of buying savings bonds more user friendly. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Promoting a Management Revolution in Public Education
Public school districts are difficult to lead and manage, and the idea of applying business principles to school reform is popular. But is it practical? This paper describes the work of Harvard's Public Education Leadership Program as it helps school districts grapple with performance challenges, including student achievement that compares unfavorably with other countries, and a significant performance gap between white and minority students. Complicating the picture: The concept of managing for accountability is new in education. The authors studied the effects of improved management on public school student performance by comparing fifteen large urban school districts with similar peer districts. Key concepts include: There is a connection between improved management and better educational outcomes. Districts that organized activities more coherently and focused efforts on the "core business" of student performance and classroom instruction outperformed other school districts suffering similar constraints. Closed for comment; 0 Comments.
- 05 Jun 2006
- Research & Ideas
Using Competition to Reform Healthcare
In their new book, HBS Professor Michael Porter and Elizabeth Olmsted Teisberg argue that the very structure of U.S. healthcare must be redesigned to create value and effective competition throughout the system. An excerpt from Redefining Health Care: Creating Value-Based Competition on Results. Closed for comment; 0 Comments.
- 08 May 2006
- Lessons from the Classroom
Writing the Case for Public School Reform
Professor David Thomas discusses his case studies on how the School District of Philadelphia is recruiting and retaining teachers and improving its human resources department. From HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 10 Apr 2006
- Research & Ideas
American Auto’s Troubled Road
Harvard Business School faculty dissect where U.S. auto makers went wrong, and how they might again get on the road to growth. From HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 06 Mar 2006
- What Do You Think?
The China Dilemma for U.S. Firms: Comply, Resist, or Leave?
If you were an advisor to the senior managements of these companies doing business in China, what would you propose that they do? Closed for comment; 0 Comments.
- 27 Feb 2006
- Research & Ideas
When Rights of First Refusal Are a Bad Deal
Contracts that include a right of first refusal usually benefit the holder of that right. But not always. New research by professor Alvin E. Roth and colleague Brit Grosskopf explains when it's wise to say no. Closed for comment; 0 Comments.
- 28 Nov 2005
- Research & Ideas
Unilever: Transformation and Tradition
In a new book, professor Geoffrey Jones looks at Unilever's decades-old transformation from fragmented underperformer to focused consumer products giant. This epilogue summarizes the years 1960 to 1990. Closed for comment; 0 Comments.
- 21 Nov 2005
- Research & Ideas
The Geography of Corporate Giving
Where a company is headquartered influences the types of social programs it supports, such as housing assistance, disease research, and the arts, according to new research by professor Christopher Marquis and his coauthors. Is social spending too confined by geography? Closed for comment; 0 Comments.
- 07 Nov 2005
- What Do You Think?
Is Less Becoming More?
Americans these days have a lot more choices in products and services. But do consumers and suppliers suffer from choice overload? If so, what does this abundance mean for companies? Closed for comment; 0 Comments.
- 10 Oct 2005
- Research & Ideas
Homers: Secrets on the Factory Floor
Homers are things you make for personal use while on company time. Professor Michel Anteby says that although the practice might be illegal, some companies secretly endorse it. Here's why. Closed for comment; 0 Comments.
- 03 Oct 2005
- What Do You Think?
What’s the Future of Globally Organized Labor?
There’s an ongoing story of fragmentation in the union movement in North America. Will the concept of cooperation and individual sacrifice for the common good work in a global labor market populated by large multinational employers? Closed for comment; 0 Comments.
- 06 Sep 2005
- What Do You Think?
What are the Lessons of New Orleans?
The response by public officials to the Hurricane Katrina disaster will be analyzed for years. Can lessons learned in the private sector instruct us in minimizing the suffering and damage from inevitable future calamities? Closed for comment; 0 Comments.
Scale without Mass: Business Process Replication and Industry Dynamics
Over the past ten years there's been a clear link between IT investment and productivity growth in the U.S. economy. But what impact has IT had on competition? This paper identifies several recent changes in the competitive dynamics of U.S. industries and shows that they are associated with IT intensity; the more IT and industry has, the greater the changes. Using case studies, previous research, and a simple model, the authors offer a theory that explains these patterns in the data. They argue that IT allows the rapid spread of business process innovations, which in turn leads to more turbulent and concentrated industries. Key concepts include: Since the mid-1990s, IT-intensive industries have seen higher levels of turbulence and concentration growth than have non-IT-intensive industries. The improved ability of firms to replicate business innovations affects not only productivity, but also the nature of business competition itself. Future research on the competitive impact of IT within a single industry could use case studies combined with economy-wide data analysis. This method would help clarify the impetus for technology investments, their timing, and their effects. Closed for comment; 0 Comments.