Society →
- 09 Oct 2008
- Working Paper Summaries
Dirty Work, Clean Hands: The Moral Psychology of Indirect Agency
When powerful people do morally questionable things, they rarely interact directly with their putative victims. Mobsters have hit men. CEOs have vice presidents, lawyers, and accountants. More specifically, the powerful are likely to carry out their intentions through the actions of other agents, with varying degrees of explicit direction and control. This working paper describes four studies that explore the effects of such "indirect agency" on moral judgment. Key concepts include: Results of these studies suggest that heightened awareness of people's sometimes dubious motivations for acting indirectly, and the organizational structures that facilitate them, may be a useful safeguard against the abuse of power. Acting indirectly through another can hide the fact that one has caused harm, hide the fact that one knowingly chose to cause harm, and hide the extent of one's control over the harmful outcome. Causing harm indirectly through another can protect harm-doers, and thus harm society in a more subtle and insidious way. This is important to know, given that many of the greatest crimes against society are perpetrated by powerful people who carry out their intentions through others. Closed for comment; 0 Comments.
- 08 Sep 2008
- HBS Case
The Value of Environmental Activists
With decidedly non-profit goals leading them on, how do environmental protection groups such as Greenpeace and World Wildlife Fund create value? Can it be measured? A Q&A with Harvard Business School professor Ramon Casadesus-Masanell and case writer Jordan Mitchell. Key concepts include: The challenge for a business student is how to put a quantifiable measure on whether Greenpeace and WWF are successful in reaching goals. WWF and Greenpeace create value by increasing the world's willingness-to-pay on environmental issues. Most scientists agree that the earth is deteriorating at a faster rate than during the 1960s and 1970s, but it would be worse off had it not been for the tireless campaigning of environmental NGOs. Closed for comment; 0 Comments.
- 02 Sep 2008
- Research & Ideas
Indulgence vs. Regret: Investing in Future Memories
Good news for makers of $20,000 watches and other luxury goods and services. Recent research from Harvard Business School professor Anat Keinan and a colleague suggest that we often regret not indulging ourselves earlier in life. Key concepts include: People can be too farsighted, or hyperopic, leaving wistful regrets of missing out on life's pleasures when they look back at how they spent their time. It's possible to motivate consumers to indulge themselves by simply asking them what they think they will regret in 10 years. Marketers can convince consumers that buying their product is actually a farsighted behavior, an investment in future memories. Closed for comment; 0 Comments.
- 14 Jul 2008
- Research & Ideas
HBS Cases: Reforming New Orleans Schools After Katrina
The New Orleans public school system, ravaged by Hurricane Katrina in 2005, is now getting a boost from charter schools—today about half of the city's 80 schools are charter schools, says HBS lecturer and senior researcher Stacey M. Childress. She explains what New Orleans represents for entrepreneurial opportunities in U.S. public education. Key concepts include: Charter schools are public schools of choice that operate outside the governance and policies of their local school districts. Prior to the hurricane, the New Orleans school district was one of the worst in the country. Today no other large school district in the United States has such a high percentage of charter schools as does New Orleans. The organization New Schools for New Orleans (NSNO), the subject of an HBS case study, aims to create networks of schools to receive shared support services while avoiding the dysfunctions of a large urban district. NSNO developed a strategy to focus on a subset of charter schools that it believed could be helped most. Was it the right strategy? Or should NSNO support all schools, not just charter schools? Closed for comment; 0 Comments.
- 07 Jul 2008
- Research & Ideas
Innovation Corrupted: How Managers Can Avoid Another Enron
The train wreck that was Enron provides key insights for improving corporate governance and financial incentives as well as organizational processes that strengthen ethical discipline, says HBS professor emeritus Malcolm S. Salter. His new book, Innovation Corrupted: The Origins and Legacy of Enron's Collapse, is a deep reflection on the present and future of business. Key concepts include: Enron's stated purpose was too general to permit disciplined and responsible decision-making in the face of difficulty. The lessons of Enron relate to strengthening board oversight, avoiding perverse financial incentives for executives, and instilling ethical discipline throughout business organizations. Directors of public companies can adapt key aspects of the private-equity governance model to ensure that they fulfill their oversight responsibilities. Incentive systems should reward accomplishments other than economic performance, and penalize failures. Companies can take steps to help senior executives avoid the two sources of leadership failure at Enron: personal opportunism and flights to utopianism. Closed for comment; 0 Comments.
- 23 Jun 2008
- Working Paper Summaries
Using Financial Innovation to Support Savers: From Coercion to Excitement
This paper acknowledges the wide range of solutions to the problem of low family savings. Families, and of particular interest to the authors, low-income families, save for a wide variety of purposes, including identifiable reasons such as education and retirement and others that are more broad, like rainy days or emergencies. Given societal pressures to consume, and given the diversity among people, it is unlikely that there is a single solution to the savings problem. Yet a number of programs described by Tufano and Schneider have great promise in supporting household savings. Tufano and Schneider discuss each program from the perspectives of would-be savers as well as from that of other key stakeholders. Key concepts include: Researchers must be sensitive to the needs of low- and moderate-income families, whose concerns about having the resources to cope with short-term emergencies are just as legitimate as needs to plan for a retirement that may be decades away. The continuum of solutions highlighted in this paper ranges from those that force families to save (coercion) to others that seek to work consumers into a frenzy about savings (excitement). These varied solutions emphasize different elements of human behavior or impediments to savings. Some solutions to low savings require massive government policy, some require small changes in existing regulations, and still others are completely market oriented. Some require large subsidies, while others might be profitable on their own. Closed for comment; 0 Comments.
- 23 Jun 2008
- Research & Ideas
Innovative Ways to Encourage Personal Savings
Saving money doesn't need to be so difficult. According to HBS professor Peter Tufano, "The most interesting ideas—indeed the oldest—try to make savings a fun or satisfying experience." As Tufano describes in this Q&A, different solutions appeal to different people. Here's what government policy, the private sector, and nonprofits can do. Key concepts include: A variety of levers can be used to support people who want to save (not to force someone to save who doesn't want to). Some levers are simple changes that make the process of savings easier. Other levers involve providing various incentives, be they financial or sociological. The oldest and most interesting ideas try to make savings a fun or satisfying experience. Closed for comment; 0 Comments.
- 01 Apr 2008
- Working Paper Summaries
No Harm, No Foul: The Outcome Bias in Ethical Judgments
Too often, workers are evaluated based on results rather than on the quality of the decision. Given that most consequential business decisions involve some uncertainty, the upshot is that organizations wind up rewarding luck rather than wisdom. From a rational decision-making perspective, people's decisions should be evaluated based on the information the decision maker had available to him or her at the time, and not based on the ultimate results. This paper tests predictions about this effect, known as the outcome bias, in two studies in which participants were asked to consider various ethically questionable behaviors. Participants were also given information about the outcome of such behaviors and were asked to rate the ethicality of the described actions with or without the outcome information. The findings extend prior research in psychology and ethics. Key concepts include: The tendency demonstrated in these two studies might lead people to blame others too harshly for making sensible decisions that have unlucky outcomes. The outcome bias could also partly explain the slow reactions that people tend to have when they observe others' unethical behavior. It is worth trying to understand a decision maker's state of mind. Judging decisions based on their outcomes will wind up condemning too many unlucky people and acquitting too many scoundrels. Closed for comment; 0 Comments.
- 23 Jan 2008
- Op-Ed
A House Divided: Investment or Shelter?
For decades Americans viewed their homes as a safe harbor, a place to put down roots. But the last decade saw the rise of housing as an investment opportunity. What comes next? asks Harvard Business School professor Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies. Closed for comment; 0 Comments.
- 10 Dec 2007
- HBS Case
One Laptop per Child
The One Laptop per Child initiative wants to develop and distribute $100 laptops to poor children around the world. Despite eager observers and exciting breakthroughs technologically, it has found the path to customers more rocky than anticipated. Marketing has some answers, as a new case study details. Q&A with HBS professor John Quelch. Key concepts include: The XO laptop is a rugged little computer designed to help kids learn and play collaboratively. Some of its features raise the bar in the computer industry as a whole. Competitors are moving into the same market space to make low-cost laptops. However, the One Laptop per Child initiative is nonprofit. Despite some success, one of the biggest hurdles has been signing up governments to purchase the computer for their country's children. Closed for comment; 0 Comments.
- 19 Nov 2007
- Lessons from the Classroom
Teaching The Moral Leader
In The Moral Leader course at Harvard Business School, students exchange their business management case studies to discuss some of the great protagonists in literature. Sandra Sucher discusses how we all can find our own definition of moral leadership. Closed for comment; 0 Comments.
- 31 Oct 2007
- HBS Case
Climate Change Puts Heat on GMs
Ready or not, companies are being swept up in the increasing public debate over global climate change. How should firms respond? A case study exploring how financial service giant UBS thinks through the issues has students coming down on different sides. Key concepts include: Firms are increasingly called upon to respond to public concerns and actions by competitors on the issue of climate change. 'Green' responses that are simple profit maximization won't impress activist organizations looking to reward exemplars. Companies who take leadership roles in the environmental arena also open themselves up as critical targets should something go wrong. In responding to requests from organizations, general managers should think strategically about how, if they get the decision right, the company can serve society while also improving the bottom line. Closed for comment; 0 Comments.
- 24 Sep 2007
- Research & Ideas
The FDA: What Will the Next 100 Years Bring?
With the possible exception of the Internal Revenue Service, no other governmental agency touches the lives of more Americans than the U.S. Food and Drug Administration, which ensures the safety of $1.5 trillion worth of consumer goods and medicines. Harvard Business School professor Arthur A. Daemmrich discusses the impact and challenges of the agency and his new book, Perspectives on Risk and Regulation: The FDA at 100. Closed for comment; 0 Comments.
- 07 Sep 2007
- What Do You Think?
Are Elite Business Schools Fostering the Deprofessionalization of Management?
Summing Up. The founders of top business schools wanted to make management a profession similar to law, medicine, and theology. But the results look different, according to a new book, From Higher Aims to Hired Hands, by HBS professor Rakesh Khurana. Now Jim Heskett asks: How, and to what extent, are business schools themselves contributing to the situation? Forum now closed. Closed for comment; 0 Comments.
- 06 Sep 2007
- Working Paper Summaries
The Excess Burden of Government Indecision
Virtually all U.S. policymakers, budget analysts, and academic experts agree that the United States faces a very serious, if not a grave, long-term fiscal problem. Yet few policymakers will publicly say how or when they would fix it, perhaps because they fear being the bearer of bad news and getting voted out of office. Delaying the resolution of fiscal imbalances incurs two costs, however. First, it leaves a larger bill for a smaller number of people to pay. Second, and of primary interest to this research, it perpetuates uncertainty, leading economic agents to make suboptimal saving, investment, and other decisions, and reducing welfare. This research identifies and measures this "excess burden" of government indecision and finds that it is economically significant. Key concepts include: Whatever policymakers gain from delaying bad news, delay fosters and exacerbates economic uncertainty. As individuals wait to learn the level of future Social Security benefits, the fact of having to wait materially affects their consumption, saving, and portfolio decisions. Most important, it reduces welfare. The result of government indecision, in this instance, can exceed more than .5 percent of individuals' resources, a significant amount. The excess burden is highly sensitive to the degree of risk aversion, the number of years one must wait to have the policy uncertainty resolved, and the size and probability of policy changes. People experience sizable welfare gains from learning early about future changes in benefits and tax rates regardless of their attitudes toward risk or the uncertainty they face about their own labor earnings. Closed for comment; 0 Comments.
- 30 Jul 2007
- Research & Ideas
Repugnant Markets and How They Get That Way
Repugnance is different in different places and at different times, says Harvard economist Alvin E. Roth in this Q&A. As someone who designs and builds new markets, he marvels at how society decides whether a transaction is "good" or "bad"—even when such transactions are very much alike. Key concepts include: "Repugnant transactions" are transactions that some people don't want other people to engage in. From the point of view of economists, the phenomenon of repugnant transactions can be a serious constraint on markets and market design. When a market is illegal, the versions of it that arise can be quite dangerous. It is difficult to compare how markets operate when they're illegal with what it would be like if they could operate legally. Closed for comment; 0 Comments.
- 11 Jun 2007
- Lessons from the Classroom
Teaching the Next Generation of Energy Executives
A new generation of energy industry managers will make decisions that affect the quality of life for hundreds of millions of people. At Harvard Business School, students in professor Forest Reinhardt's Energy course are learning the complexities and realities of developing and implementing strategy in such a complex environment. Key concepts include: Energy executives face a complicated playing field on which to develop strategy, buffeted by factors including increased demand, dwindling resources, technology breakthroughs, and the regulatory environment. General managers will be of great value because many aspects of business contribute to the energy industry. Closed for comment; 0 Comments.
- 30 May 2007
- Research & Ideas
Health Care Under a Research Microscope
Perhaps no industry has caught the research attention of Harvard Business School faculty as much as health care. Researchers are investigating business-focused solutions on everything from improving team work among surgical teams to developing market motivations that increase the use of water purification in poor villages. Key concepts include: The $2 trillion American health care system has grown bloated and overly expensive, and it delivers poor service to many patients. Harvard Business School faculty are looking at the system through a business management perspective to recommend changes in almost all aspects of health care research and delivery. Around the world, HBS researchers are studying ways to improve medical services to the poor using techniques that include everything from motivational marketing to microfinance. Closed for comment; 0 Comments.
- 28 May 2007
- Research & Ideas
How Property Ownership Changes Your World View
When Argentine squatters were granted property title it changed the way they viewed the world. HBS professor Rafael Di Tella discusses his research into how property ownership affects our beliefs and also our attitudes toward capitalism. Closed for comment; 0 Comments.
The Next Marketing Challenge: Selling to ’Simplifiers’
The mass consumption of the 1990s is fast fading in the rearview mirror. Now a growing number of people want to declutter their lives and invest in experiences rather than things. What's a marketer to do, asks professor John Quelch. Key concepts include: As the world economy slumps, one consumer segment will grow faster than ever: The Simplifiers. Simplifiers present a challenge to marketers. These are well-off people who value quality over quantity and who do not buy proportionately more goods as their net worth increases. Dining out, foreign travel, and learning a new sport will all prove more resilient than expected in the face of recession. Closed for comment; 0 Comments.