After decades of deprioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The index highlighted the country's "best-run" companies by annually selecting the 400 most profitable of its large and liquid firms. We find that managers competed for inclusion in the index by significantly increasing ROE, and they did so at least in part due to their reputational or status concerns. The ROE increase was predominantly driven by improvements in margins, which were in turn partially driven by cutting R&D intensity. Our findings suggest that indexes can affect managerial behavior through reputational or status incentives.
Komatsu's Komtrax system started as a way of remotely monitoring and tracking equipment for the purpose of improving operational efficiency. This case follows its evolution towards other uses including demand forecasting for its sales, marketing, and production operations.
On March 11, 2011 at 2:46pm, a 9.1-on-the-Richter-scale, six-minute long earthquake unleashed a tsunami that ravaged the Tohoku region of Japan, damaging the Fukushima Daiichi Nuclear Power facility and releasing sufficient radioactive material into the air and ocean to make it one of only two “level 7” nuclear disasters in history (second only to Chernobyl). But just how much radioactive material had escaped was not clear. A tense time was made worse by sporadic disclosures of fragmented information. Those who had power or cell service, mostly friends and family outside the region, were glued to their television and smartphone screens, but, by definition, no one could see the radiation they feared. Frustrated by their own desires to know what should have been knowable, three technologists—Sean Bonner, Pieter Franken and Joi Ito—founded non-profit Safecast around a volunteer-centered, open, citizen-science, “crowdmapping” model to monitor radiation levels. With the help of thousands of volunteers, by 2018, Safecast had become not just the “go to” source of information on radiation issues in Japan and elsewhere, but also the vanguard example of citizen science. Yet as Safecast’s dataset strengthened exponentially, the sustainability of its financial model weakened. The same open, crowd-based model that made the founder’s data collection sustainable was still financially unsustainable. Was there a business model that could sustain the organization financially without undermining their volunteer-based operations, and if so, what would it look like?
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