More from these Authors

• Case | HBS Case Collection | October 2019 (Revised February 2020)

  Thermax—Changing of the Guard

  Christina R. Wing and Inakshi Sobti

  Thermax is an engineering company in India that provides integrated solutions in energy, environment and chemicals. The Aga Family along with family trusts owns 62% of the company. Post a re-structuring exercise in 2000, Thermax transforms itself from a small family business to a professionally managed $850 million conglomerate. Meher Pudumjee (family) is the current Chairperson of the board. The case traces the journey of the company under the leadership of Meher’s father, Rohinton Aga who builds the business, her mother, Anu Aga who re-structures the company and professionalises it and finally under Meher and the professional management team. In 2019, with the incumbent CEO scheduled to retire Meher feels the company stands at a critical inflexion point and needs to re-think its strategy for the future. While historically Thermax has groomed people from within to take on leadership roles, she feels the next chapter of growth requires a completely fresh perspective and initiates a search for an external candidate. What qualities should the ideal candidate possess? How will this new incumbent integrate and extract loyalty as an outsider? Will the culture of the organization need to adapt in order to allow the new CEO to drive change?

  Citation:

  Wing, Christina R., and Inakshi Sobti. "Thermax—Changing of the Guard." Harvard Business School Case 620-043, October 2019. (Revised February 2020.)  View Details

  CiteView DetailsEducatorsPurchase

  Related

• Article | Management Science | December 2019

  Patent Trolls: Evidence from Targeted Firms

  Lauren Cohen, Umit Gurun and Scott Duke Kominers

  We provide the first large-sample evidence on the behavior and impact of nonpracticing entities (NPEs) in the intellectual-property space. We find that, on average, NPEs appear to behave as opportunistic “patent trolls.” NPEs sue cash-rich firms and target cash in business segments unrelated to alleged infringement at essentially the same frequency as they target cash in segments related to alleged infringement. By contrast, cash is neither a key driver of intellectual-property lawsuits by practicing entities (e.g., IBM and Intel) nor of any other type of litigation against firms. We find further suggestive evidence of NPE opportunism: targeting of firms that have reduced ability to defend themselves, repeated assertions of lower-quality patents, increased assertion activity nearing patent expiration, and forum shopping. We find, moreover, that NPE litigation has a real negative impact on innovation at targeted firms: firms substantially reduce their innovative activity after settling with NPEs (or losing to them in court). Meanwhile, we neither find any markers of significant NPE pass-through to end innovators nor of a positive impact of NPEs on innovation in the industries in which they are most prevalent.

  Keywords: Patent trolls; patents; innovation; Patents; Lawsuits and Litigation; Ethics; Innovation and Invention;

  Citation:

  Cohen, Lauren, Umit Gurun, and Scott Duke Kominers. "Patent Trolls: Evidence from Targeted Firms." Management Science 65, no. 12 (December 2019): 5461–5486. (Cited in the United States Federal Trade Commission Report on Patent Assertion Entities, 2016.)  View Details

  CiteView DetailsSSRNFind at Harvard

  Related

• Working Paper | 2019

  Don't Take Their Word For It: The Misclassification of Bond Mutual Funds

  Huaizhi Chen, Lauren Cohen and Umit Gurun

  We provide evidence that mutual fund managers misclassify their holdings and that these misclassifications have a real and significant impact on investor capital flows. In particular, we provide the first systematic study of bond funds’ reported asset profiles to Morningstar against their actual portfolios. Many funds report more investment grade assets than are actually held in their portfolios, making these funds appear significantly less risky. This results in pervasive misclassifications across the universe of U.S. fixed income mutual funds by Morningstar, who relies on these reported holdings. The problem is widespread—resulting in about 30% of funds being misclassified with safer profiles, when compared against their actual, publicly reported holdings. “Misclassified funds”—i.e., those that hold risky bonds but claim to hold safer bonds—outperform the actual low-risk funds in their peer groups. “Misclassified funds,” therefore, receive higher Morningstar Ratings (significantly more Morningstar Stars) and higher investor flows due to this perceived outperformance. However, when we correctly classify them based on their actual risk, these funds are mediocre performers. Misreporting is stronger following several quarters of large negative returns.

  Keywords: mutual funds; Bonds; Financial Reporting; Risk and Uncertainty; Performance;

  Citation:

  Chen, Huaizhi, Lauren Cohen, and Umit Gurun. "Don't Take Their Word For It: The Misclassification of Bond Mutual Funds." NBER Working Paper Series, No. 26423, November 2019.  View Details

  CiteView Details Read Now

  Related