Article
| Organization Science
|
January–February 2013
Golfing Alone? Corporations, Elites and Nonprofit Growth in 100 American Communities
Christopher Marquis, Gerald F. Davis and Mary Ann Glynn
We examine the link between corporations and community by showing how corporate density interacts with the local social and cultural infrastructure to affect the growth and decline of the number of local nonprofits between 1987 and 2002. We focus on two sub-populations of nonprofits in 100 American cities: elite-oriented cultural and educational institutions and social welfare-oriented organizations. We find that corporate density enhances the growth of both types of nonprofits, as does location in the Northeast U.S. and being a long-established business community, but corporate density is especially potent for the growth of elite-oriented nonprofits--but not social welfare nonprofits--when local networks and cultural norms support elite mobilization. We conclude that despite globalizing trends, the local geographic community continues to be an important unit of analysis for unpacking multi-sector organizational processes among corporations and nonprofits.
Keywords: Business and Community Relations;
Civil Society or Community;
Business Model;
For-Profit Firms;
Business Growth and Maturation;
Profit;
Local Range;
Welfare or Wellbeing;
Business Processes;
Corporate Entrepreneurship;
Trends;
Management Practices and Processes;
United States;
Article
| Harvard Business Review
|
January–February 2013
When the Crowd Fights Corruption
Paul M. Healy and Karthik Ramanna
Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Indeed, it's a problem in many emerging markets, and businesses have a role to play in combating it, according to Healy and Ramanna. The authors focus on RosPil—an anticorruption entity in Russia set up by Alexey Navalny, a crusader against public and private malfeasance in that country. As of December 2011, RosPil claimed to have prevented the granting of dubious contracts worth US$1.3 billion. The organization holds corrupt politicians' and bureaucrats' feet to the fire largely through internet-based crowdsourcing, whereby often-anonymous people identify requests for government-issued tenders that are designed to generate kickbacks. Should entities like RosPil be supported, and should companies fashion their own responses to corruption? On the one hand, there are obvious public-relations and political risks; on the other hand, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism. The authors argue that heads of many multinational companies are well positioned to combat corruption in emerging markets. Those leaders have the power to enforce policies in their organizations and networks, and they enjoy the ability to organize others in the industry against this pernicious threat.
Keywords: corruption;
emerging economies;
entrepreneurship;
globalization;
Crime and Corruption;
Entrepreneurship;
Ethics;
Globalization;
Russia;
Georgia (nation, Asia);
India;
Article
| Organization Science
|
September–October 2012
Egalitarianism, Cultural Distance, and Foreign Direct Investment: A New Approach
Jordan I. Siegel, Amir N. Licht and Shalom H. Schwartz
This study addresses an apparent impasse in the research on organizations' responses to cultural distance. Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms' interactions with non-financial stakeholders, such that national differences in these egalitarianism-related features may affect firms' international expansion decisions.
Keywords: FDI;
foreign direct investment;
neo-institutionalism;
multinational firm;
cultural distance;
egalitarianism;
regulatory arbitrage;
Pollution Haven Hypothesis;
Foreign Direct Investment;
Global Strategy;
Culture;
Entrepreneurship;
Citation:
Siegel, Jordan I., Amir N. Licht, and Shalom H. Schwartz. "
Egalitarianism, Cultural Distance, and Foreign Direct Investment: A New Approach."
Organization Science 23, no. 5 (September–October 2012). (This study addresses an apparent impasse in the research on organizations' responses to cultural distance. Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms' interactions with non-financial stakeholders, such that national differences in these egalitarianism-related features may affect firms' international expansion decisions.)
Working Paper
| HBS Working Paper Series
| 2012
'Power from Sunshine': A Business History of Solar Energy
Geoffrey Jones and Loubna Bouamane
This working paper provides a longitudinal perspective on the business history of solar energy between the nineteenth century and the present day. It covers early attempts to develop solar energy, the use of passive solar in architecture before World War 2, and the subsequent growth of the modern photovoltaic industry. It explores the role of entrepreneurial actors, sometimes motivated by broad social and environmental agendas, whose strategies to build viable business models proved crucially dependent on two exogenous factors: the prices of alternative conventional fuels and public policy. Supportive public policies in various geographies facilitated the commercialization of photovoltaic technologies, but they also encouraged rent-seeking and inefficiencies, while policy shifts resulted in a regular boom and bust cycle. The perceived long-term potential of solar energy, combined with the capital-intensity and cyclical nature of the industry, led to large electronics, oil and engineering companies buying entrepreneurial firms in successive generations. These firms became important drivers of innovation and scale, but they also found solar to be an industry in which achieving a viable business model proved a chimera, whilst waves of creative destruction became the norm.
Keywords: Renewable Energy;
Business History;
Policy;
Entrepreneurship;
Innovation and Invention;
Business Model;
Energy Industry;
Working Paper
| HBS Working Paper Series
| 2012
Clear and Present Danger: Planning and New Venture Survival Amid Political and Civil Violence
Shon Hiatt and Wesley Sine
Although entrepreneurs constitute a key economic driving force for many emerging economies, they often face unstable environments due to the failure of governments to maintain civil and political order. Yet, we know very little about how environments characterized by weak institutions and high levels of political and civil violence directly affect new venture survival. Moreover, it is unclear whether standard theories about organizational strategy, such as planning, hold true in such environments. Building upon the institution-based view of strategy and past research on planning, we explore these issues using a sample of 730 new ventures in Colombia from 1997 to 2001. We find that political and civil violence decreases firm survival, increases the benefits of incremental planning, and decreases the benefits of comprehensive planning.
Keywords: Entrepreneurship;
Business Startups;
Developing Countries and Economies;
Government and Politics;
Crime and Corruption;
Balance and Stability;
Strategic Planning;
Book
| 2012
The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup
Noam Wasserman
Often downplayed in the excitement of starting up a new business venture is one of the most important decisions entrepreneurs will face: Should they go it alone or bring in cofounders, hires, and investors to help build the business? More than just financial rewards are at stake. Friendships and relationships can suffer. Bad decisions at the inception of a promising venture lay the foundations for its eventual ruin. 'The Founder's Dilemmas' is the first book to examine the early decisions by entrepreneurs that can make or break a startup and its team. Drawing on a decade of research, Noam Wasserman reveals the common pitfalls founders face and how to avoid them. He looks at whether it is a good idea to cofound with friends or relatives, how and when to split the equity within the founding team, and how to recognize when a successful founder-CEO should exit or be fired. Wasserman explains how to anticipate, avoid, or recover from disastrous mistakes that can splinter a founding team, strip founders of control, and leave founders without a financial payoff for their hard work and innovative ideas. He highlights the need at each step to strike a careful balance between controlling the startup and attracting the best resources to grow it and demonstrates why the easy short-term choice is often the most perilous in the long-term. 'The Founder's Dilemmas' draws on the inside stories of founders like Evan Williams of Twitter and Tim Westergren of Pandora, while mining quantitative data on almost 10,000 founders. People problems are the leading cause of failure in startups. This book offers solutions.
Keywords: Entrepreneurship;
Business Startups;
Partners and Partnerships;
Social Psychology;
Outcome or Result;
Chapter
| Using a Positive Lens to Explore Social Change and Organizations: Building a Theoretical and Research Foundation
| 2012
Social Entrepreneurs as Institutional Entrepreneurs: The Case of Sekem
Tomislav Rimac, Johanna Mair and Julie Battilana
How can application of a positive lens to understanding social change and organizations enrich and elaborate theory and practice? This is the core question that inspired this book. It is a question that brought together a diverse and talented group of researchers interested in change and organizations in different problem domains (sustainability, healthcare, poverty alleviation, and education). The contributors to this book bring different theoretical lenses to the question of social change and organizations. Some are anchored in more macro accounts of how and why social change processes occur, while others approach the question from a more psychological or social psychological perspective. Many of the chapters in the book travel across levels of analyses, making their accounts of social change good examples of multi-level theorizing. Some scholars are practiced and immersed in thinking about organizational phenomena through a positive lens; for others it was a total adventure in trying on a new set of glasses. However, connecting all contributing authors was an excitement and willingness to explore new insights and new angles on how to explain and cultivate social change within or across organizations. This edited volume will be of interest to an international community that seek to understand how organizations and people can generate positive outcomes for society. Students and researchers in organizational behavior, management, positive psychology, leadership, and corporate responsibility will find this book of interest.
Keywords: Social Entrepreneurship;
Social Psychology;
Social Issues;
Organizations;
Business and Community Relations;
Article
| Harvard Business Review
|
March 2012
Reviving Entrepreneurship
Josh Lerner and William Sahlman
New enterprises don't exist in a vacuum: They rise or fall depending on myriad contextual factors, all of them interrelated, and all of them affected by government policy. U.S. lawmakers must carefully consider the effects of interventions in at least 12 areas, ranging from capital markets to tax treatment to intellectual property to health care. Their decisions could shore up-or further weaken-what has long been America's greatest economic asset.
Keywords: Entrepreneurship;
Government and Politics;
Policy;
Economy;
Public Administration Industry;
United States;
Working Paper
| HBS Working Paper Series
| 2012
Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device
Felipe Kast, Stephan Meier and Dina Pomeranz
We test the effectiveness of self-help peer groups as a commitment device for precautionary savings, through two randomized field experiments among 2,687 micro-entrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (number of deposits grows 3.5-fold and average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.
Keywords: Saving;
Decision Making;
Interest Rates;
Planning;
Performance Effectiveness;
Economics;
Entrepreneurship;
Growth and Development;
Social Enterprise;
Global Range;
Chile;
Book
| 2012
Venture Capital, Private Equity, and the Financing of Entrepreneurship
Josh Lerner, Ann Leamon and Felda Hardymon
Venture Capital, Private Equity, and the Financing of Entrepreneurship stems from a realization that private equity overall—defined in this volume as venture capital and buyouts but excluding hedge funds—has become a vastly more sizable and influential part of the global economic landscape over the past two decades. The text explores the world of active investing and showcases ways of doing business in a clear and concise manner. With more than 60 years of combined experience as practitioners in and/or academic investigators of private equity, Lerner, Leamon, and Hardymon explain how the fascinating world of private equity works, from start to finish, how it creates value, and where it may destroy value.
Keywords: Venture Capital;
Private Equity;
Financing and Loans;
Entrepreneurship;