Faculty & Research

• HBS Book

The roadmap and best practices to reap the enormous value that can emerge when your business prioritizes social and environmental goals—such as climate change, diversity and inclusion, and sustainability—right alongside the pursuit of profit. We not only live in a world where pursuing social goals and pursuing profit are becoming more aligned in the corporate setting—we also live in a time in which consumers of every age are specifically looking to support organizations that stand for social and environmental goals greater than themselves. Purpose and Profit is a must-read for anybody seeking to drive social and environmental change in their businesses and reap the rewards of fierce customer loyalty, bettering the way work is done, and the immeasurable satisfaction in living an impactful life.

• Journal of Financial Economics 145, nos. 2, Part B (August 2022)

We examine whether the local press is an effective monitor of corporate misconduct. Specifically, we study the effects of local newspaper closures on violations by local facilities of publicly listed firms. After a local newspaper closure, local facilities increase violations by 1.1% and penalties by 15.2%, indicating that the closures reduce firm monitoring by the press. This effect is not driven by the underlying economic conditions, the underlying local fraud environment, or the underlying firm conditions. Taken together, our findings indicate that local newspapers are an important monitor of firms’ misconduct.

• Business History Initiative

This paper estimates the returns to human capital accumulation during the first era of megafirms in the United States by linking employees at General Electric—a canonical enterprise associated with the “visible hand” of managerial hierarchies—to data from the 1940 federal census. Across the hierarchy, 62 percent of employees had four or more years of a college education, a higher rate than for the country’s engineers (57 percent). I find large returns to higher education through seniority in the hierarchy linked to span of control, through earnings, and through selection into management training.

• Featured Case

October 8, 2021: Tata Sons won a bid to acquire India’s national carrier Air India, marking the airline's return to its original owners after 68 long years. The winning bid of $2.4 billion gave Tata Sons full ownership of the airline and its coveted network of 6,200 landing and parking slots in Indian airports and 900 slots in overseas hubs. This bid marked the end of a two-decade-long journey for the Indian government that had been trying to sell the troubled airline which, according to recent estimates, was losing nearly $3 million per day. The chairman of Tata Sons, Natarajan Chandrasekaran (Chandra), described the occasion as a “historic moment.” Why did Tata Sons acquire Air India? Was it an emotional decision to regain control of an airline they had started? Was it a commercially sound decision?

• Featured Case

This case examines the career of Vicky Tsai, the creator of San Francisco-based TATCHA, a Japanese-themed luxury beauty brand launched in 2009. It explores how Tsai developed the concept, assembled management, and successfully launched the brand, despite experiencing major obstacles because of stereotyped views based on her gender and Asian ethnicity. Originally advised that Asian beauty was too niche for the American market, Tsai struggled to raise capital, and felt that she needed to take on white males as co-founders in order to be taken seriously. She faced continuous funding constraints, even after the Tatcha brand debuted on the QVC channel and began to grow fast.

• HBS Working Paper

How do people form beliefs about novel risks, with which they have little or no experience? A 2020 U.S. survey of beliefs about the lethality of COVID reveals that the elderly underestimate, and the young overestimate, their own risks, and that people with more health adversities are more pessimistic, even for others. A model in which people selectively recall frequent and similar past experiences, including from other domains, and use them to imagine (simulate) the novel risk, explains our findings.

• Working Paper

Does investors' political ideology shape international capital allocation? We provide evidence from two settings—syndicated corporate loans and equity mutual funds—to show ideological alignment with foreign governments affects the cross-border capital allocation by U.S. institutional investors. Ideological alignment on both economic and social issues plays a role. Our empirical strategy ensures direct economic effects of foreign elections or government ties between countries are not driving the result. Ideological distance between countries also explains variation in bilateral investment. Combined, our findings imply ideological alignment is an important, omitted factor in models of international capital allocation.