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    • HBS Book

    Decision Leadership: Empowering Others to Make Better Choices

    By: Don A. Moore and Max H. Bazerman

    When we think of leaders, we often imagine lone, inspirational figures lauded for their behaviors, attributes, and personal decisions, and leadership books often reinforce that view. However, this approach ignores a leader’s mission to empower others. Applying decades of behavioral science research, we offer a passionate corrective to this view, casting today’s organizations as decision factories in which effective leaders are decision architects, enabling those around them to make wise, ethical choices consistent with their own interests and the organization’s highest values.

    • HBS Book

    Decision Leadership: Empowering Others to Make Better Choices

    By: Don A. Moore and Max H. Bazerman

    When we think of leaders, we often imagine lone, inspirational figures lauded for their behaviors, attributes, and personal decisions, and leadership books often reinforce that view. However, this approach ignores a leader’s mission to empower others. Applying decades of behavioral science research, we offer a passionate corrective to this view,...

    • Journal of Financial Economics 145, no. 1 (July 2022): 85-104.

    The Pass-Through of Uncertainty Shocks to Households

    By: Marco Di Maggio, Amir Kermani, Rodney Ramcharan, Vincent Yao and Edison Yu

    Using new employer-employee matched data, this paper investigates the impact of uncertainty, as measured by idiosyncratic stock market volatility, on individual outcomes. We find that firms provide at best partial insurance to their workers. An increase in firm-level uncertainty is associated with a decline in total compensation, especially in variable pay. In turn, individuals reduce their durable goods consumption in response to these uncertainty shocks. These shocks also lead to greater financial fragility among lower-income earners.

    • Journal of Financial Economics 145, no. 1 (July 2022): 85-104.

    The Pass-Through of Uncertainty Shocks to Households

    By: Marco Di Maggio, Amir Kermani, Rodney Ramcharan, Vincent Yao and Edison Yu

    Using new employer-employee matched data, this paper investigates the impact of uncertainty, as measured by idiosyncratic stock market volatility, on individual outcomes. We find that firms provide at best partial insurance to their workers. An increase in firm-level uncertainty is associated with a decline in total compensation, especially in...

    • Social Enterprise Initiative

    The Goldman Sachs 10,000 Small Businesses Program: 2009-2021

    By: Leonard A. Schlesinger and Julia Kelley

    In December 2021, more than a decade after its founding, Goldman Sachs’s 10,000 Small Businesses program was still going strong — and the firm now needed to evaluate potential program modifications to reach a wider group of small business owners. Launched in the aftermath of the Global Financial Crisis, 10,000 Small Businesses provided business education, a wide network, and access to capital to U.S. small business owners through more than a dozen city- and state-based programs and a National Cohort model. By 2020, Goldman Sachs achieved its goal of graduating 10,000 small business owners from the program, and the firm decided to renew the program with the goal of reaching another 10,000.

    • Social Enterprise Initiative

    The Goldman Sachs 10,000 Small Businesses Program: 2009-2021

    By: Leonard A. Schlesinger and Julia Kelley

    In December 2021, more than a decade after its founding, Goldman Sachs’s 10,000 Small Businesses program was still going strong — and the firm now needed to evaluate potential program modifications to reach a wider group of small business owners. Launched in the aftermath of the Global Financial Crisis, 10,000 Small Businesses provided business...

    • Featured Case

    Mastercard: Creating a World Beyond Cash

    By: Sunil Gupta, Linda A. Hill, Julia Kelley and Emily Tedards

    In late 2021, Mastercard CEO Michael Miebach and Chairman and former CEO Ajaypal “Ajay” Banga considered how Mastercard could best position itself for continued success in the years to come. Since Mastercard’s initial public offering in 2006, the company had grown and transformed, driven in part by a core strategy of “Grow-Diversify-Build” and vision of a “World Beyond Cash.” During Banga’s recent tenure as CEO, Mastercard had invested in creating a strong culture, recruiting top talent, driving innovation, partnering with would-be competitors, and launching new services. Now, with Miebach at the helm as Mastercard’s CEO, the payments landscape was experiencing increasing democratization of the banking system, the rise of blockchain and cryptocurrency, and increasing nationalism, among other shifts.

    • Featured Case

    Mastercard: Creating a World Beyond Cash

    By: Sunil Gupta, Linda A. Hill, Julia Kelley and Emily Tedards

    In late 2021, Mastercard CEO Michael Miebach and Chairman and former CEO Ajaypal “Ajay” Banga considered how Mastercard could best position itself for continued success in the years to come. Since Mastercard’s initial public offering in 2006, the company had grown and transformed, driven in part by a core strategy of “Grow-Diversify-Build” and...

    • Featured Case

    Executive Decision-Making at Zola

    By: Amy C. Edmondson and Michael Roberto

    In April 2020, Rachel Jarrett, President and COO of wedding technology company Zola, called a meeting with the organization’s key decision-makers. The company had previously launched three business expansions: a vendor marketplace, a wedding apparel division, and a honeymoon-planning service. However, the March 2020 onset of COVID-19 had prompted many couples to delay or cancel their weddings, and it was unclear how long the pandemic would last. As a result, Jarrett and Zola CEO Shan-Lyn Ma knew that they could only fully invest in one of the three new businesses, while they could pursue a second business with limited funding. To decide the appropriate path forward, Jarrett and Ma sought the perspectives of the company’s leadership team through a four-step decision-making process that Jarrett had developed.

    • Featured Case

    Executive Decision-Making at Zola

    By: Amy C. Edmondson and Michael Roberto

    In April 2020, Rachel Jarrett, President and COO of wedding technology company Zola, called a meeting with the organization’s key decision-makers. The company had previously launched three business expansions: a vendor marketplace, a wedding apparel division, and a honeymoon-planning service. However, the March 2020 onset of COVID-19 had prompted...

    • HBS Working Paper

    Punishing Without Looking for Reputational Gain

    By: Jillian J. Jordan and Nour S. Kteily

    Critics of “outrage culture” allege that “virtue signaling” drives people to punish alleged wrongdoers without due consideration. But do people actually “punish without looking” for reputational gain? And if so, is this because unquestioning punishment looks particularly virtuous? We examined punishment without looking across three studies of Americans (total n = 7,952), in which “Actors” chose whether to sign real punitive petitions about politicized issues (“punishment”), after deciding whether to read articles opposing these petitions (“looking”). To manipulate reputation, we paired Actors with co-partisan “Evaluators”, varying whether Evaluators observed (i) nothing about Actors’ behavior, (ii) (only) whether Actors punished, or (iii) whether Actors punished and whether they looked. We found that Evaluators financially rewarded Actors who did (vs. did not) punish.

    • HBS Working Paper

    Punishing Without Looking for Reputational Gain

    By: Jillian J. Jordan and Nour S. Kteily

    Critics of “outrage culture” allege that “virtue signaling” drives people to punish alleged wrongdoers without due consideration. But do people actually “punish without looking” for reputational gain? And if so, is this because unquestioning punishment looks particularly virtuous? We examined punishment without looking across three studies of...

    • HBS Working Paper

    A Conceptualization of Sub-Living Wages: Liabilities, Leverage, and Risk

    By: Drew Keller, Katie Panella and George Serafeim

    Currently the accounting system records employee wages as an expense in the income statement. However, paying below living wages can expose an organization to reputational and operational risks. In this paper, we offer an alternative conceptualization of the issue of low wages and in particular wages that are below the local living wage. We propose a simple double entry bookkeeping approach to account for wages paid below a local living wage level through a firm’s balance sheet, where wages below the living wage threshold create a leverage effect as the organization borrows from society.

    • HBS Working Paper

    A Conceptualization of Sub-Living Wages: Liabilities, Leverage, and Risk

    By: Drew Keller, Katie Panella and George Serafeim

    Currently the accounting system records employee wages as an expense in the income statement. However, paying below living wages can expose an organization to reputational and operational risks. In this paper, we offer an alternative conceptualization of the issue of low wages and in particular wages that are below the local living wage. We...

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Recent Publications

The C-Suite Skills That Matter Most

By: Raffaella Sadun, Joseph B. Fuller, Stephen Hansen and PJ Neal
  • Article |
  • Harvard Business Review
Landing a job as a CEO today is no longer all about industry expertise and financial savvy. What companies are really seeking are leaders with strong social skills. That’s what the authors discovered after analyzing nearly 7,000 job descriptions for C-suite roles. Their explanation for this trend? Business operations are becoming more complex and tech-centered; workforce diversity is growing; and firms face greater public scrutiny than ever before. Those conditions call for leaders who are adept communicators, relationship builders, and people-oriented problem solvers. To succeed in the future, the authors argue, companies will need to focus on those skills when they evaluate CEO candidates and develop in-house talent.
Citation
Related
Sadun, Raffaella, Joseph B. Fuller, Stephen Hansen, and PJ Neal. "The C-Suite Skills That Matter Most." Harvard Business Review 100, no. 4 (July–August 2022): 42–50.

Private Equity and COVID-19

By: Paul A. Gompers, Steven N. Kaplan and Vladimir Mukharlyamov
  • July 2022 |
  • Article |
  • Journal of Financial Intermediation
We survey more than 200 private equity (PE) managers from firms with $1.9 trillion of assets under management (AUM) about their portfolio performance, decisionmaking and activities during the Covid-19 pandemic. Given that PE managers have significant incentives to maximize value, their actions during the current pandemic should indicate what they perceive as being important for both the preservation and creation of value. PE managers believe that 40% of their portfolio companies are moderately negatively affected and 10% are very negatively affected by the pandemic. The private equity managers—both investment and operating partners— are actively engaged in the operations, governance, and financing in all of their current portfolio companies. These activities are more intensively pursued in those companies that have been more severely affected by the Covid-19 pandemic. As a result of the pandemic, they expect the performance of their existing funds to decline. They are more pessimistic about that decline than the VCs surveyed in Gompers et al. (2020b). Despite the pandemic, private equity managers are seeking new investments. Relative to the 2012 survey results reported in Gompers, Kaplan, and Mukharlyamov (2016): the PE investors place a greater weight on revenue growth for value creation; they give a larger equity stake to management teams; and, they also appear to target somewhat lower returns.
Citation
Related
Gompers, Paul A., Steven N. Kaplan, and Vladimir Mukharlyamov. "Private Equity and COVID-19." Journal of Financial Intermediation 51 (July 2022).

The Passionate Pygmalion Effect: Passionate Employees Attain Better Outcomes in Part Because of More Preferential Treatment by Others

By: Ke Wang, Erica R. Bailey and Jon M. Jachimowicz
  • July 2022 |
  • Article |
  • Journal of Experimental Social Psychology
Employees are increasingly exhorted to “pursue their passion” at work. Inherent in this call is the belief that passion will produce higher performance because it promotes intrapersonal processes that propel employees forward. Here, we suggest that the pervasiveness of this “passion narrative,” coupled with the relative observability of passion, may lead others to treat passionate employees in more favorable ways that subsequently produce better workplace outcomes, a self-fulfilling prophecy we term the Passionate Pygmalion Effect. We find evidence for this effect across two experiments (Study 1 and pre-registered Study 3) and one field survey with pairs of subordinates and supervisors from a diverse set of organizations (Study 2). In line with the Passionate Pygmalion Effect, our studies show that more passionate employees (1) received more positive feedback for their success, (2) were offered more training and promotion opportunities, (3) elicited more favorable emotional reactions, and (4) prompted more favorable attributions for varied performance outcomes. Such favorable treatment persisted despite describing passionate employees' job performance identically or controlling for job performance statistically. Notably, more passionate employees even elicited more favorable emotional reactions and attributions when their job performance decreased. We subsequently discuss how our interpersonal perspective on the passion narrative implicates challenges for the advancement of employees with fewer opportunities to pursue their passion (e.g., given socioeconomic constraints or exploitative work demands), or who are less likely to be perceived as passionate by others (e.g., given cross-cultural differences).
Citation
Related
Wang, Ke, Erica R. Bailey, and Jon M. Jachimowicz. "The Passionate Pygmalion Effect: Passionate Employees Attain Better Outcomes in Part Because of More Preferential Treatment by Others." Journal of Experimental Social Psychology 101 (July 2022).

The Developmental Origins and Behavioral Consequences of Attributions for Inequality

By: Antonya Marie Gonzalez, Lucia Macchia and Ashley V. Whillans
  • July 2022 |
  • Article |
  • Journal of Experimental Social Psychology
Attributions, or lay explanations for inequality, have been linked to inequality-relevant behavior. In adults and children, attributing inequality to an individual rather than contextual or structural causes is linked to greater support for economic inequality and less equitable giving. However, few studies have directly examined the relationship between parent and child attributions for inequality. Additionally, it remains unclear whether attributing inequality to individually controllable sources such as effort might lead children to allocate resources more inequitably than individually uncontrollable sources like innate ability. Across three studies (N = 698), we examine the developmental origins and behavioral consequences of inequality beliefs by exploring parent and children's (7–14 years old) attributions for unequal situations. In Study 1, parents, recruited through MTurk, preferred to explain inequality to their children by attributing disparities to effort rather than uncontrollable causes such as ability or luck. In Study 2, in a sample of affluent and mostly white families in Vancouver and Boston, parent attributions for inequality predicted children's attributions, such that children were more than two times as likely to attribute inequality to effort when their parents did. In Study 3, when a convenience sample of children from Washington state were brought to the laboratory and told that an inequality between two groups was due to effort, they were more likely to perpetuate the inequality by giving to the individual who already had more resources. This research documents a cycle of inequality perpetuation by demonstrating that parent attributions for inequality predict their children's attributions and that these attributions affect children's equitable giving. This work highlights the importance of examining the perceived controllability of inequality.
Citation
Related
Gonzalez, Antonya Marie, Lucia Macchia, and Ashley V. Whillans. "The Developmental Origins and Behavioral Consequences of Attributions for Inequality." Journal of Experimental Social Psychology 101 (July 2022).

The Pass-Through of Uncertainty Shocks to Households

By: Marco Di Maggio, Amir Kermani, Rodney Ramcharan, Vincent Yao and Edison Yu
  • July 2022 |
  • Article |
  • Journal of Financial Economics
Using new employer-employee matched data, this paper investigates the impact of uncertainty, as measured by idiosyncratic stock market volatility, on individual outcomes. We find that firms provide at best partial insurance to their workers. An increase in firm-level uncertainty is associated with a decline in total compensation, especially in variable pay. In turn, individuals reduce their durable goods consumption in response to these uncertainty shocks. These shocks also lead to greater financial fragility among lower-income earners. We also construct a new county-level uncertainty shock and find that local uncertainty shocks reduce county level durable consumption.
Citation
SSRN
Related
Di Maggio, Marco, Amir Kermani, Rodney Ramcharan, Vincent Yao, and Edison Yu. "The Pass-Through of Uncertainty Shocks to Households." Journal of Financial Economics 145, no. 1 (July 2022): 85–104.

What Do I Make of the Rest of My Life? Global and Quotidian Life Construal across the Retirement Transition

By: Jeff Steiner and Teresa M. Amabile
  • July 2022 |
  • Article |
  • Organizational Behavior and Human Decision Processes
Retirement means relinquishing the daily structure that work provides and the career-dependent meanings that it offers life narratives. The retirement transition can therefore involve contemplating both how to spend newly-freed daily time and the implications of retirement for one’s life narrative. We investigate how American professionals construe their working and retirement lives, in a qualitative study drawing on 215 interviews with 120 participants, including 12 interviewed longitudinally throughout their years-long retirement transitions. We identify two orthogonal dimensions for contemplating the work and retirement domains of one’s life—global and quotidian life construal—and four basic modes of cognition that arise from variability across these dimensions. We induce a theoretical model describing how construal of working life prefigures construal of retirement life, which then shapes the retirement life experience. This study contributes to construal level theory, narrative psychology, and the literatures on retirement transitions and the meaning of work.
Citation
Related
Steiner, Jeff, and Teresa M. Amabile. "What Do I Make of the Rest of My Life? Global and Quotidian Life Construal across the Retirement Transition." Organizational Behavior and Human Decision Processes 171 (July 2022).

When Alterations Are Violations: Moral Outrage and Punishment in Response to (Even Minor) Alterations to Rituals

By: Daniel H. Stein, Juliana Schroeder, Nicholas M. Hobson, Francesca Gino and Michael I. Norton
  • July 2022 |
  • Article |
  • Journal of Personality and Social Psychology
From Catholics performing the sign of the cross since the 4th century to Americans reciting the Pledge of Allegiance since the 1890s, group rituals (i.e., predefined sequences of symbolic actions) have strikingly consistent features over time. Seven studies (N = 4,213) document the sacrosanct nature of rituals: Because group rituals symbolize sacred group values, even minor alterations to them provoke moral outrage and punishment. In Pilot Studies A and B, fraternity members who failed to complete initiation activities that were more ritualistic elicited relatively greater moral outrage and hazing from their fraternity brothers. Study 1 uses secular holiday rituals to explore the dimensions of ritual alteration— both physical and psychological—that elicit moral outrage. Study 2 suggests that altering a ritual elicits outrage even beyond the extent to which the ritual alteration is seen as violating descriptive and injunctive norms. In Study 3, group members who viewed male circumcision as more ritualistic (i.e., Jewish vs. Muslim participants) expressed greater moral outrage in response to a proposal to alter circumcision to make it safer. Study 4 uses the Pledge of Allegiance ritual to explore how the intentions of the person altering the ritual influence observers’ moral outrage and punishment. Finally, in Study 5, even minor alterations elicited comparable levels of moral outrage to major alterations of the Jewish Passover ritual. Across both religious and secular rituals, the more ingroup members believed that rituals symbolize sacred group values, the more they protected their rituals—by punishing those who violated them.
Citation
Related
Stein, Daniel H., Juliana Schroeder, Nicholas M. Hobson, Francesca Gino, and Michael I. Norton. "When Alterations Are Violations: Moral Outrage and Punishment in Response to (Even Minor) Alterations to Rituals." Journal of Personality and Social Psychology 123, no. 1 (July 2022): 123–153.

Ocean Carriers (Abridged) Courseware

By: Erik Stafford
  • June 2022 |
  • Supplement |
  • Faculty Research
Citation
Purchase
Related
Stafford, Erik. "Ocean Carriers (Abridged) Courseware." Harvard Business School Supplement 222-725, June 2022.
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In The News

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    The Courageous Leadership of Frederick Douglass: Lessons for Here and Now

    Re: Nancy Koehn
    • 23 Jun 2022
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    The C-Suite Skills That Matter Most

    Re: Raffaella Sadun & Joseph Fuller
    • 23 Jun 2022
    • Harvard Business Review

    As the World Shifts, So Should Leaders

    By: Nitin Nohria
    • 23 Jun 2022
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    When Hiring CEOs, Focus on Character

    By: Aiyesha Dey
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The Case Method

Introduced by HBS faculty to business education in 1925, the case method is a powerful interactive learning process that puts students in the shoes of a leader faced with a real-world management issue and challenges them to propose and justify a resolution.
Today, HBS remains an authority on teaching by the case method. The School is also the world’s leading case-writing institution, with HBS faculty members contributing hundreds of new cases to the management curriculum a year via the School’s unique case development and writing process.
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