Entrepreneurship and Multinationals: Global Business and the Making of the Modern World
This book examines the history of entrepreneurship and multinationals in the making of the modern world. In recent years economists, historians, and political scientists have written extensively on the history of globalization and patterns of global wealth and poverty, but business enterprises have rarely been identified as significant independent actors. This book argues that firms mattered and shows how they have mattered. It explores the role of firms as facilitators of globalization during the nineteenth century and more recently and as preservers of it when governments sought to close it down in the interwar years. However the ability of firms to shape the world was always constrained, especially by governments. The outcomes of global capitalism are also shown to have been complex. The book demonstrates the unique ability of capitalism to create wealth for societies through innovation, yet also cautions that the history of global capitalism since the nineteenth century was associated with an enormous divergence in the wealth of the developed West compared to the rest of the world, which is only now partially closing.
Government and Politics;
Consumer Products Industry;
Beauty and Cosmetics Industry;
North and Central America;
Political Reservations and Women’s Entrepreneurship in India
We quantify the link between the timing of state-level implementations of political reservations for women in India with the role of women in India's manufacturing sector. While overall employment of women in manufacturing does not increase after the reforms, we find significant evidence that more women-owned establishments were created in the unorganized/informal sector. These new establishments were concentrated in industries where women entrepreneurs have been traditionally active and the entry was mainly found among household-based establishments. We measure and discuss the extent to which this heightened entrepreneurship is due to channels like greater finance access or heightened inspiration for women entrepreneurs.
Local Industrial Structures and Female Entrepreneurship in India
We analyze the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. We focus on the presence of incumbent female-owned businesses and their role in promoting higher subsequent female entrepreneurship relative to male entrepreneurship. We find evidence of agglomeration economies in both sectors, where higher female ownership among incumbent businesses within a district-industry predicts a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (e.g., those sharing similar labor needs, industries related via input-output markets) predict greater relative female entry rates even after controlling for the focal district-industry's conditions. The core patterns hold when using local industrial conditions in 1994 to instrument for incumbent conditions in 2000–2005. The results highlight that the traits of business owners in incumbent industrial structures influence the types of entrepreneurs supported.
U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence
High-skilled immigrants are a very important component of U.S. innovation and entrepreneurship. Immigrants account for roughly a quarter of U.S. workers in these fields, and they have a similar contribution in terms of output measures like patents or firm starts. This contribution has been rapidly growing over the last three decades. In terms of quality, the average skilled immigrant appears to be better trained to work in these fields, but conditional on educational attainment of comparable quality to natives. The exception to this is that immigrants have a disproportionate impact among the very highest achievers (e.g., Nobel Prize winners). Studies regarding the impact of immigrants on natives tend to find limited consequences in the short-run, while the results in the long-run are more varied and much less certain. Immigrants in the United States aid business and technology exchanges with their home countries, but the overall effect that the migration has on the home country remains unclear. We know very little about return migration of workers engaged in innovation and entrepreneurship, except that it is rapidly growing in importance.
Innovation and Invention;
Where do the Most Active Customers Originate and How Can Firms Keep Them Engaged?
In this paper, we study how firms offering Web services can acquire and develop an active customer base. We focus on two basic questions. First, how does the method of customer acquisition affect the way customers use the service to meet their own needs and to interact with one another? Furthermore, how do firm-to-consumer communications affect the way customers use the service relative to customer-to-customer communications? Using data from a Web service start-up, we estimate a multivariate hierarchical Poisson hidden Markov model that captures the joint dynamics of customer engagement (personal and social usage) at the individual customer level. We segment the customers by the three most typical acquisition tools for Web start-ups: Word-of-Mouth (WOM), Mass-Invite (e.g. Techcrunch), and Search (e.g. Google). We find that customers who hear about the service through Search and Mass-Invite exhibit higher usage behavior as compared to customers from WOM, and that customer-to-customer communication is more effective than firm-to-customer communication at keeping customers engaged post-adoption. Even though WOM-acquired customers use the service less than customers from other adoption routes, WOM in the form of customer-to-customer sharing more robustly transitions customers into higher usage states. Hence, firms may be well-advised to encourage customers to share with each other post-adoption. Our work calls for a deeper understanding of the mechanisms that drive usage behavior, and for further exploration in the possibility of segmenting customers based on how they were acquired.
Keywords: Customer Engagement;
Hidden Markov Models;
Customer Relationship Management;
Marketing Reference Programs;
Web Services Industry;
Lee, Clarence, E. Ofek, and Thomas Steenburgh. "Where do the Most Active Customers Originate and How Can Firms Keep Them Engaged?" Working Paper, 2013. (Revise and Resubmit at Management Science
How the Zebra Got Its Stripes: Imprinting of Individuals and Hybrid Social Ventures
Hybrid organizations that combine multiple, existing organizational forms are frequently proposed as a source of organizational innovation, yet little is known about the origins of such organizations. We propose that individual founders of hybrid organizations acquire imprints from past exposure to work environments, thus predisposing them to incorporate the associated logics in their subsequent ventures, even when doing so requires deviation from established organizational templates. We test our theory on a novel dataset of over 700 founders of social ventures, all guided by a social welfare logic. Some of them also incorporate a commercial logic along with the social welfare logic, thereby creating a hybrid social venture. We find evidence of three sources of commercial imprints: the founder's own, direct work experience, as well as the indirect influence of parental work experiences and professional education. Our findings further suggest that the effects of direct imprinting are strongest from the early tenure of for-profit experience, but diminish with longer tenure. In supplementary analyses, we parse out differences between the sources of imprints and discuss implications for how imprinting functions as an antecedent to the creation of new, hybrid forms.
Keywords: hybrid organizations;
Building Sustainable Cities
By 2050 the number of people living in cities will have nearly doubled, to 6 billion, and the problems created by this rampant urbanization are among the most important challenges of our time. Of all resource-management issues, the author argues, water, electricity, and transit deserve the greatest focus. Every other service a competitive city provides—functional housing, schools, hospitals, stores, police and fire departments, heating, cooling, waste management—depends on a reliable infrastructure for those three resources. Many corporations and investors assume that fixing cities is the purview of government. But governments around the world are stuck—financially, politically, or both. Implementing solutions to the problems of urbanization requires large amounts of capital, exceptional managerial skill, and significant alignment of interests. All these abound in the private sector. Thus major opportunities exist for businesses that can create and claim value by improving resource efficiency. The products and services that new (or legacy) cities will require, and that provide the return investors and entrepreneurs need, optimize both technological sophistication and financial sophistication—approaches designed to attract capital by offering different levels of risk and return, different cash-flow priorities, and opportunities for both short-term and long-term investment. The author cites a number of companies that have moved toward or into what he calls "the efficiency frontier." These include Sarvajal, in India, which saves money and eliminates waste by selling direct to customers through its "water ATMs"; the Boston-based EnerNOC, which manages electricity production and consumption to reduce spikes in demand; and EMBARQ, based in Washington, DC, which coordinates the interests of business and government to organize city transit services.
Keywords: Growth Management;
The Entrepreneurial Gap: How Managers Adjust Span of Accountability and Span of Control to Implement Business Strategy
This study focuses on the relationship between business strategy, organization structure, and diagnostic control systems. The project analyzes data from 75 field studies to illustrate how managers adjust span of accountability and span of control to motivate different levels of innovation and entrepreneurial behavior. Six propositions are derived inductively about when, why, and how managers make these choices.
Keywords: Organizational Structure;
Innovation and Invention;
How to Negotiate with VCs
VC-entrepreneur partnership agreements often contain flaws that become highly damaging as the parties come up against issues of power, trust, and much more. Yet many of the flaws are systematic and predictable—and hence preventable. The author, a longtime consultant to the VC industry, outlines four recommendations for entrepreneurs sitting down at the table with prospective funders.
Understand your leverage. Your leverage is not only a function of your alternatives; it has a lot to do with the VC's as well. Seek to understand them, and be prepared to educate the VC about why his exercising too much power could hurt both parties in the long term.
Maximize trust. Beneath all the financial projections, the VC negotiation is a process in which people are deciding whom they want to associate with for years to come. If the VC is vulnerable, use the opportunity to build trust rather than to take advantage.
Focus on value-not just valuation. Nonfinancial considerations such as control are also important.
Strive for understanding. Seemingly abstruse provisions can be highly consequential. And bear in mind that the choices a VC makes when negotiating can contain important clues about her assessments and expectations.
Above all, when you're negotiating with a VC, think not only about what will look good in a press release today but also about what will help you create and capture value over the long run.
Keywords: Venture Capital;
Let's Be Realistic About Measuring Impact
"Measure impact" has become a mantra for creating social change. Claims about making a difference are no longer sufficient; evidence of how much difference you're making is now required. We should applaud this trend, because results are sometimes ambiguous and claims often go unsubstantiated. But does it really make sense for all mission-driven organizations to measure their long-term impact on society?
Keywords: Corporate Social Responsibility and Impact;