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Faculty & Research

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    • HBS Book

    Complicit: How We Enable the Unethical and How to Stop

    By: Max H. Bazerman

    It is easy to condemn obvious wrongdoers such as Elizabeth Holmes, Adam Neumann, Harvey Weinstein, and the Sackler family. But we rarely think about the many people who supported their unethical or criminal behavior. In each case there was a supporting cast of complicitors: business partners, employees, investors, news organizations, and others. And, whether we’re aware of it or not, almost all of us have been complicit in the unethical behavior of others. In Complicit, HBS professor Max Bazerman confronts our complicity head-on and offers strategies for recognizing and avoiding the psychological and other traps that lead us to ignore, condone, or actively support wrongdoing in our businesses, organizations, communities, politics, and more.

    • HBS Book

    Complicit: How We Enable the Unethical and How to Stop

    By: Max H. Bazerman

    It is easy to condemn obvious wrongdoers such as Elizabeth Holmes, Adam Neumann, Harvey Weinstein, and the Sackler family. But we rarely think about the many people who supported their unethical or criminal behavior. In each case there was a supporting cast of complicitors: business partners, employees, investors, news organizations, and others....

    • Harvard Business Review 101, no. 1 (Jan-Feb 2023): 45-49.

    Rethink Your Employee Value Proposition: Offer Your People More Than Just Flexibility

    By: Mark Mortensen and Amy C. Edmondson

    A lot of leaders believe that the formula for attracting and keeping talent is simple: Just ask people what they want and give it to them. The problem is, that approach tends to address only the material aspects of jobs that are top of employees’ minds at the moment, like pay or flexibility. And those offerings are easy for rivals to imitate and have the least enduring impact on retention. Companies instead should focus on what workers need to thrive over the long term, balancing material offerings with opportunities to grow, connection and community, and meaning and purpose.

    • Harvard Business Review 101, no. 1 (Jan-Feb 2023): 45-49.

    Rethink Your Employee Value Proposition: Offer Your People More Than Just Flexibility

    By: Mark Mortensen and Amy C. Edmondson

    A lot of leaders believe that the formula for attracting and keeping talent is simple: Just ask people what they want and give it to them. The problem is, that approach tends to address only the material aspects of jobs that are top of employees’ minds at the moment, like pay or flexibility. And those offerings are easy for rivals to imitate and...

    • Digital Initiative

    Improving Human-Algorithm Collaboration: Causes and Mitigation of Over- and Under-Adherence

    By: Maya Balakrishnan, Kris Ferreira and Jordan Tong

    Even if algorithms make better predictions than humans on average, humans may sometimes have “private” information which an algorithm does not have access to that can improve performance. How can we help humans effectively use and adjust recommendations made by algorithms in such situations? When deciding whether and how to override an algorithm’s recommendations, we hypothesize that people are biased towards following a naïve advice weighting (NAW) heuristic: they take a weighted average between their own prediction and the algorithm’s, with a constant weight across prediction instances, regardless of whether they have valuable private information.

    • Digital Initiative

    Improving Human-Algorithm Collaboration: Causes and Mitigation of Over- and Under-Adherence

    By: Maya Balakrishnan, Kris Ferreira and Jordan Tong

    Even if algorithms make better predictions than humans on average, humans may sometimes have “private” information which an algorithm does not have access to that can improve performance. How can we help humans effectively use and adjust recommendations made by algorithms in such situations? When deciding whether and how to override an algorithm’s...

    • Featured Case

    Hugging Face: Serving AI on a Platform

    By: Shane Greenstein, Daniel Yue, Kerry Herman and Sarah Gulick

    It is fall 2022, and open-source AI model company Hugging Face is considering its three areas of priorities: platform development, supporting the open-source community, and pursuing cutting-edge scientific research. As it expands services for enterprise clients, which services should it prioritize? Will these projects be in line with Hugging Face’s volunteer community? Further, Hugging Face decided to remove a model uploaded by a contributor, due to the potential harm the leadership felt it could propagate. Was it the right decision?

    • Featured Case

    Hugging Face: Serving AI on a Platform

    By: Shane Greenstein, Daniel Yue, Kerry Herman and Sarah Gulick

    It is fall 2022, and open-source AI model company Hugging Face is considering its three areas of priorities: platform development, supporting the open-source community, and pursuing cutting-edge scientific research. As it expands services for enterprise clients, which services should it prioritize? Will these projects be in line with Hugging...

    • Featured Case

    Navya: Steering Toward a Driverless Future

    By: Julian De Freitas, Elie Ofek, Shaun Ingledew and Tonia Labruyere

    In 2022, Sophie Desormière arrived at French roboshuttle producer Navya, tasked with charting a new course in a challenging sector. The company, which had recently listed on the Paris Stock Exchange, was burning through cash reserves and needed to transform the promise of its technology into a credible business with a solid revenue stream. In the short term, Desormière had to decide whether, and if so under what pricing terms, to accept an opportunity that recently emerged in the U.S. However, the opportunity involved renting, rather than selling, and also required Navya to operate the service.

    • Featured Case

    Navya: Steering Toward a Driverless Future

    By: Julian De Freitas, Elie Ofek, Shaun Ingledew and Tonia Labruyere

    In 2022, Sophie Desormière arrived at French roboshuttle producer Navya, tasked with charting a new course in a challenging sector. The company, which had recently listed on the Paris Stock Exchange, was burning through cash reserves and needed to transform the promise of its technology into a credible business with a solid revenue stream. In the...

    • HBS Working Paper

    How Do Investors Value ESG?

    By: Malcolm Baker, Mark Egan and Suproteem K. Sarkar

    Environmental, social, and governance (ESG) objectives have risen to near the top of the agenda for corporate executives and boards, driven in large part by their perceptions of shareholder interest. We quantify the value that shareholders place on ESG using a revealed preference approach, where shareholders pay higher fees for ESG-oriented index funds in exchange for their financial and non-financial benefits. We find that investors are willing, on average, to pay 20 basis points more per annum for an investment in a fund with an ESG mandate as compared to an otherwise identical mutual fund without an ESG mandate, suggesting that investors as a group expect commensurately higher pre-fee, gross returns, either financial or non-financial, from an ESG mandate.

    • HBS Working Paper

    How Do Investors Value ESG?

    By: Malcolm Baker, Mark Egan and Suproteem K. Sarkar

    Environmental, social, and governance (ESG) objectives have risen to near the top of the agenda for corporate executives and boards, driven in large part by their perceptions of shareholder interest. We quantify the value that shareholders place on ESG using a revealed preference approach, where shareholders pay higher fees for ESG-oriented index...

    • Working Paper

    The Retail Habitat

    By: Toomas Laarits and Marco Sammon

    Retail investors trade hard-to-value stocks. Controlling for size, stocks with a high share of retail-initiated trades are composed of more intangible capital, have longer duration cash-flows and a higher likelihood of being mispriced. Consistent with retail-heavy stocks being harder to value, we document that such stocks are less sensitive to earnings news. As an additional consequence, the well-known earnings announcer risk premium is limited to low retail stocks only. Further, high-retail stocks are more sensitive to retail order flow and are especially expensive to trade around earnings announcements. Overall, the findings document a new dimension of investor heterogeneity and suggest the comparative advantage of retail in holding hard-to-value stocks.

    • Working Paper

    The Retail Habitat

    By: Toomas Laarits and Marco Sammon

    Retail investors trade hard-to-value stocks. Controlling for size, stocks with a high share of retail-initiated trades are composed of more intangible capital, have longer duration cash-flows and a higher likelihood of being mispriced. Consistent with retail-heavy stocks being harder to value, we document that such stocks are less sensitive to...

Initiatives & Projects

The Digital, Data, and Design (D^3) Institute at Harvard

The Digital, Data, and Design (D^3) Institute at Harvard is a cross-unit venture that unites scholars and practitioners to explore and impact the transformation of business in today’s digital, networked, and media-rich environment.
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Seminars & Conferences

Feb 06
  • 06 Feb 2023

Using Oral History in Business and Management Studies

Feb 08
  • 08 Feb 2023

Kiara Sanchez, Dartmouth

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Recent Publications

Giving-by-proxy Triggers Subsequent Charitable Behavior

By: Samantha Kassirer, Jillian J. Jordan and Maryam Kouchaki
  • March 2023 |
  • Article |
  • Journal of Experimental Social Psychology
How can we foster habits of charitable giving? Here, we investigate the potential power of giving-by-proxy experiences, drawing inspiration from a growing trend in marketing and corporate social responsibility contexts in which organizations make charitable donations on behalf of employees or consumers. We create laboratory models of giving-by-proxy in workplace (Studies 1a-3) and consumer (Study 4) contexts. We then investigate how giving-by-proxy experiences (with varying amounts of autonomy) influence subsequent charitable behavior. Across five preregistered studies (N = 3255), we provide evidence that (i) giving-by-proxy experiences (that mirror those that typically occur in both workplace and consumer contexts) trigger increases in subsequent charitable behavior, (ii) this process is mediated by participants taking “charitable credit” for their behavior, and (iii) manipulating the amount of autonomy involved in the giving-by-proxy experience does not moderate these effects. Results highlight potential societal impacts of giving-by-proxy policies and campaigns.
Citation
Related
Kassirer, Samantha, Jillian J. Jordan, and Maryam Kouchaki. "Giving-by-proxy Triggers Subsequent Charitable Behavior." Art. 104438. Journal of Experimental Social Psychology 105 (March 2023).

Association Between Regulatory Submission Characteristics and Recalls of Medical Devices Receiving 510(k) Clearance

By: Alexander O. Everhart, Soumya Sen, Ariel D. Stern, Yi Zhu and Pinar Karaca-Mandic
  • 2023 |
  • Article |
  • JAMA, the Journal of the American Medical Association
Importance: Most regulated medical devices enter the U.S. market via the 510(k) regulatory submission pathway, wherein manufacturers demonstrate that applicant devices are “substantially equivalent” to 1 or more “predicate” devices (legally marketed medical devices with similar intended use). Most recalled medical devices are 510(k) devices. Objective: To examine the association between characteristics of predicate medical devices and recall probability for 510(k) devices. Design, Setting, and Participants: In this exploratory cross-sectional analysis of medical devices cleared by the US Food and Drug Administration (FDA) between 2003 and 2018 via the 510(k) regulatory submission pathway, linear probability models were used to examine associations between a 510(k) device’s recall status and characteristics of its predicate medical devices. Public documents for the 510(k) medical devices were collected using FDA databases. A text extraction algorithm was applied to identify predicate medical devices cited in 510(k) regulatory submissions. Algorithm-derived metadata were combined with 2003-2020 FDA recall data. Exposures: Citation of predicate medical devices with certain characteristics in 510(k) regulatory submissions, including the total number of predicate medical devices cited by the applicant device, the age of the predicate medical devices, the lack of similarity of the predicate medical devices to the applicant device, and the recall status of the predicate medical devices. Main Outcomes and Measures: Class I or class II recall of a 510(k) medical device between its FDA regulatory clearance date and December 31, 2020. Results:The sample included 35 176 medical devices, of which 4007 (11.4%) were recalled. The applicant devices cited a mean of 2.6 predicate medical devices, with mean ages of 3.6 years and 7.4 years for the newest and oldest, respectively, predicate medical devices. Of the applicant devices, 93.9% cited predicate medical devices with no ongoing recalls, 4.3% cited predicate medical devices with 1 ongoing class I or class II recall, 1.0% cited predicate medical devices with 2 ongoing recalls, and 0.8% cited predicate medical devices with 3 or more ongoing recalls. Applicant devices citing predicate medical devices with 3 or more ongoing recalls were significantly associated with a 9.31–percentage-point increase (95% CI, 2.84-15.77 percentage points) in recall probability compared with devices without ongoing recalls of predicate medical devices, or an 81.2% increase in recall probability relative to the mean recall probability. A 1-SD increase in the total number of predicate medical devices cited by the applicant device was significantly associated with a 1.25–percentage-point increase (95% CI, 0.62-1.87 percentage points) in recall probability, or an 11.0% increase in recall probability relative to the mean recall probability. A 1-SD increase in the newest age of a predicate medical device was significantly associated with a 0.78–percentage-point decrease (95% CI, 1.29-0.30 percentage points) in recall probability, or a 6.8% decrease in recall probability relative to the mean recall probability. Conclusions and Relevance: This exploratory cross-sectional study of 510(k) medical devices cleared by the FDA between 2003 and 2018 demonstrated significant associations between 510(k) submission characteristics and recalls of medical devices. Further research is needed to understand the implications of these associations.
Citation
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Related
Everhart, Alexander O., Soumya Sen, Ariel D. Stern, Yi Zhu, and Pinar Karaca-Mandic. "Association Between Regulatory Submission Characteristics and Recalls of Medical Devices Receiving 510(k) Clearance." JAMA, the Journal of the American Medical Association 329, no. 2 (2023): 144–156.

Disruption and Credit Markets

By: Bo Becker and Victoria Ivashina
  • February 2023 |
  • Article |
  • Journal of Finance
We show that over the past half century innovative disruptions were central to understanding corporate defaults. In a given year, industries experiencing abnormally high VC or IPO activity subsequently see higher default rates, higher segment exits by conglomerates, and higher yields on bonds issued by the firms in these industries. Overall, we find that disruption is a broad phenomenon, negatively affecting incumbent firms across the spectrum of age, valuation, and levers, with the exception of very large and low-leverage firms, which confirms our central hypothesis.
Citation
Related
Becker, Bo, and Victoria Ivashina. "Disruption and Credit Markets." Journal of Finance 78, no. 1 (February 2023): 105–139.

OTC Intermediaries

By: Andrea L. Eisfeldt, Bernard Herskovic, Sriram Rajan and Emil Siriwardane
  • February 2023 |
  • Article |
  • Review of Financial Studies
We study the effect of dealer exit on prices and quantities in a model of an over-the-counter (OTC) market featuring a core-periphery network with bilateral trading costs. The model is calibrated using regulatory data on the entire U.S. credit default swap (CDS) market between 2010-2013. Prices depend crucially on the risk-bearing capacity of core dealers, yet unlike standard models featuring a dealer sector, we allow for heterogeneity in dealer risk-bearing capacity. This heterogeneity is quantitatively important. Depending on how well dealers share risk, the exit of a single dealer can cause credit spreads to rise by 8 to 24%.
Citation
SSRN
Purchase
Related
Eisfeldt, Andrea L., Bernard Herskovic, Sriram Rajan, and Emil Siriwardane. "OTC Intermediaries." Review of Financial Studies 36, no. 2 (February 2023): 615–677.

Natura: Weathering the Pandemic at Brazil's Cosmetic Giant

By: Brian Trelstad, Pedro Levindo and Carla Larangeira
  • January 2023 |
  • Case |
  • Faculty Research
Brazil's Natura, a multi-brand cosmetics group, has taken several measures to safeguard the livelihoods of its thousands of employees and millions of sales representatives during the COVID-19 health and economic crisis. The company has also made strides in its efforts to increase digital sales. Now the purpose-driven group must decide whether to vocalize its opposition to private companies buying COVID-19 vaccines to inoculate their employees before priority groups in Brazil's public health system.
Citation
Educators
Related
Trelstad, Brian, Pedro Levindo, and Carla Larangeira. "Natura: Weathering the Pandemic at Brazil's Cosmetic Giant." Harvard Business School Case 323-065, January 2023.

Will We Blame Self-Driving Cars? A New Study Finds That People Are Likely to Hold Autonomous Vehicles Liable for Accidents Even When They’re Not at Fault

By: Julian De Freitas
  • January 28, 2023 |
  • Article |
  • Wall Street Journal
Citation
Related
De Freitas, Julian. "Will We Blame Self-Driving Cars? A New Study Finds That People Are Likely to Hold Autonomous Vehicles Liable for Accidents Even When They’re Not at Fault." Wall Street Journal (January 28, 2023), C5.

Mellody Hobson at Ariel Investments

By: Lakshmi Ramarajan and Francesca Gino
  • January 2023 |
  • Supplement |
  • Faculty Research
Citation
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Related
Ramarajan, Lakshmi, and Francesca Gino. "Mellody Hobson at Ariel Investments." Harvard Business School Multimedia/Video Supplement 423-719, January 2023.

LCA Action Planning: Responsibility and Accountability

By: Sandra J. Sucher and Marilyn Morgan Westner
  • January 2023 |
  • Module Note |
  • Faculty Research
LCA action plans integrate responsibility and accountability into decision-making and planning. This module note was designed for the LCA course and reviews six steps leaders can follow to develop a practical LCA action plan for their business. It shows how integrating an LCA perspective can help leaders make better strategic decisions when planning by helping them clarify analysis, sharpen criteria for success, and be better prepared to manage risk.
Citation
Related
Sucher, Sandra J., and Marilyn Morgan Westner. "LCA Action Planning: Responsibility and Accountability." Harvard Business School Module Note 323-060, January 2023.
More Publications

In The News

    • 31 Jan 2023
    • Cold Call

    Addressing Racial Discrimination on Airbnb

    Re: Michael Luca
    • 24 Jan 2023
    • Harvard Business School

    Faculty Recognition

    Re: Raffaella Sadun & screary@hbs.edu
    • 20 Jan 2023
    • Harvard Business School

    Behind the Research: Jillian Jordan

    Re: Jillian Jordan
    • 19 Jan 2023
    • CBC

    Want a Job? You’ll Have to Convince Our AI Bot First

    Re: Joseph Fuller
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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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Faculty Positions

Harvard Business School seeks candidates in all fields for full time positions. Candidates with outstanding records in PhD or DBA programs are encouraged to apply.
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