p. 2 p. 3 Back Cover TEACHING MATERIALS · Preserve the Luxury or Extend the Brand? #R1101X Should You Listen to the Customer? #R1209L ORGANIZATIONAL BEHAVIOR Can a Strong Culture

New Global Collaboration Simulation: Tip of the IcebergStudents Experience Cross-Cultural Communication

IN THIS NEW MULTI-PLAYER SIMULATION, students experience the challenges of managing global teams and cross-cultural communication. Teams of 4 communicate via chat as they have 15 minutes to share information and prepare a venture capital presentation. Students are assigned the role of either a native or a nonnative English speaker, and each side quickly realizes there are inherent problems in the communications between them.

The difficult task of collaborating with a geographically dispersed team is further complicated by language and cultural barriers. While the native and nonnative English speakers can easily communicate among themselves, the online chat technology causes nonnative speakers to type more slowly in their second language. It also garbles the text between nonnative and native speakers, representing information that may be lost in translation during such interactions.

The communication challenges can lead to behaviors that can be discussed in the

debrief, including social categorization, trust issues, avoidance behaviors, and mutual knowledge problems. Forced to take another’s perspective, students experience an “aha” moment as they understand how their own behaviors impact the experiences of others.

See page 3 for a Q&A with the author about using the simulation in class.

Tsedal Neeley | Multi-player | Seat Time: 30-45 minutes | Product #7101 | TN

Registered Premium Educators can see a complete Free Trial online. Registration is free: educatoraccess.hbsp.harvard.edu

NEW! TEST BANKSQuestions for Each Core Curriculum Reading

Test banks of 30-35 questions are now available for Core Curriculum Readings. Each test bank includes a mix of multiple choice, short answer, and true-false questions.

The test banks are part of Test Builder, an online tool that allows instruc tors to create custom quizzes, exams, and homework assignments. Educators can use Test Builder to design a test and export it into Microsoft Word. An option to export tests into the Canvas learning management system is forthcoming.

Registered Premium Educators (a free service) can access test banks from each Reading web page.

In addition, Core Curriculum Read-ings—foundational course material that covers key concepts and frameworks for business students—now come with online note-taking tools, so students can digitally highlight, take notes, and add comments. Students can also save each Reading for offline viewing.

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NEW!

TEACHING MATERIALSN E W S L E T T E R

Global Supply Chain Management Simulation V2

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Short Cases from Harvard Business Review

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Q&A: Author of New Global Collaboration Simulation

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New Venture Exercise: The Food Truck Challenge

Back Cover

SPRING 2017

LEARN MORE: hbsp.harvard.edu/corecurriculum

2 | SPRING 2017 Teaching Materials Newsletter

SHORT CASES FROM HBRNow with Teaching Notes and PowerPoint Slides

Case discussions from Harvard Business Review are short cases on management challenges, based on actual cases taught in business schools. They allow students to apply conceptual material to real-world business situations. Each is about 3 pages, plus optional commentary from experts. Now, the titles below come with Teaching Notes and PowerPoint slides.

ENTREPRENEURSHIP

How Much Is Sweat Equity Worth? #R1212X

GENERAL MANAGEMENT

Is a Promotion Worth Hiding Who You Are? #R1510X

Should a Female Director “Tone It Down?” #R1410X

MARKETING

Preserve the Luxury or Extend the Brand? #R1101X

Should You Listen to the Customer? #R1209L

ORGANIZATIONAL BEHAVIOR

Can a Strong Culture Be Too Strong? #R1401L

STRATEGY

Second Thoughts about a Strategy Shift #R1412K

Target the Right Market #R1210Z

Registered Premium Educators can see complete Previews online. Registration is free.

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NEW!Global Supply Chain Management Simulation V2Students Design and Manage the Supply Chain of a Phone Manufacturer

This revised version of the Global Supply Chain Management Simulation includes an

updated interface and modernized features in the product line managed by students.

Also new is a dynamic debrief PowerPoint slide deck and compliance with Web Content

Accessibility Guidelines (WCAG) 2.0.

In this single-player simulation, students set up a global supply chain to deliver 2 models of mobile phones. The simulation takes place over 4 simulated years and students visit 4 different “rooms” each year: design, forecasting, production, and boardroom. Students choose new mobile phone features and forecast demand. They also choose among a diverse group of suppliers. The goal is to understand how to balance competing priorities and design a supply chain that is flexible enough to react quickly to unexpected shifts in demand while remaining profitable.

The Design Room: Students choose among 4 options to add to 2 mobile phone models. Advisors offer different opinions on the value of each product feature and provide individual demand forecasts. Analysis tools allow students to summarize advisors’ forecasts and determine the best combination of options.

The Forecasting Room: Students forecast the demand for each mobile phone based on the design options they selected. Advisors present their forecasts and students create a demand estimate for the year.

The Production Room: Students set up a supply chain to meet the demand forecast. There are 4 suppliers located worldwide, each with different costs, lead times, and capacities to consider. Once orders are placed, students advance the simulation 1 month at a time through 12 months of production. Demand numbers are replaced by actual sales for each month and students monitor whether the supply chain matches demand. Students must weigh the costs and benefits of changing orders midyear.

The Boardroom: Board members offer feedback and ask questions to test students’ understanding of the supply chain’s effectiveness.

A comprehensive Teaching Note covers key learning objectives.

Janice H. Hammond | Single-player | Seat Time: 90-120 minutes | Product #8623 | TN

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Harvard Business Publishing sat down with professor Tsedal Neeley, author of the new Global Collaboration Simulation: Tip of the Iceberg, to learn why the simulation was created and what the classroom experience is like teaching with it. Below are excerpts from the interview.

For the full interview, visit the Teaching Materials Newsletter online: academic.hbsp.harvard.edu/tmnspring17

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01 GLOBAL COLLABORATION SIMULATION: TIP OF THE ICEBERG

01 TEST BANKS FOR CORE CURRICULUM READINGS

02 GLOBAL SUPPLY CHAIN MANAGEMENT SIMULATION V2

02 SHORT CASES FROM HBR

03 Q&A WITH TSEDAL NEELEY, AUTHOR OF THE NEW GLOBAL COLLABORATION SIMULATION

04 NEW CASES, ARTICLES, BOOKS & CHAPTERS, CORE CURRICULUM, AND eLEARNING

TN TEACHING NOTE AVAILABLE

04 ACCOUNTING

04 BUSINESS & GOVERNMENT RELATIONS

05 BUSINESS ETHICS

05 ECONOMICS

06 ENTREPRENEURSHIP

08 FINANCE

09 GENERAL MANAGEMENT

12 HUMAN RESOURCE MANAGEMENT

13 INFORMATION TECHNOLOGY

14 INTERNATIONAL BUSINESS

15 MARKETING

17 NEGOTIATION

18 OPERATIONS MANAGEMENT

18 ORGANIZATIONAL BEHAVIOR

20 SALES

21 SERVICE MANAGEMENT

21 SOCIAL ENTERPRISE

21 STRATEGY

BC NEW VENTURE EXERCISE: THE FOOD TRUCK CHALLENGE

I N T H I S I S S U E

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Q&A with HBS Professor Tsedal Neeley, Author of the New Global Collaboration Simulation

Why did you create the Global Collaboration Simulation: Tip of the Iceberg?When trying to teach global collaboration, it became clear that lecturing didn’t allow people to develop empathy and a clear understanding of the challenges of working across geographic, linguistic, and cultural boundaries. So the simulation eventually became the solution—to allow students to experience the challenges and frustrations that others in global groups or global teams face and, from that, develop some real actions to change behaviors.

How do students react to the simulation in the classroom? Once the simulation begins, people’s emotions are heightened; they’re anxious, they’re worried about accomplishing their task, they’re worried about trying to understand what they need to do in order to communicate. So you actually feel the heightening of people’s emotions, and the moment the simulation ends there’s this huge sigh of relief from people— you actually hear people exhaling!—and some people just sit there holding their heads. We take advantage of that visceral emotionality in our debrief.

For nonnative speakers, the people who live these challenges on a regular basis, they end up saying things like “This is mind-blowing” and “Oh my goodness, finally others can see my life!”

How do you debrief the simulation?The simulation itself happens blind—people don’t initially know who their team members are—so we begin by having people talk about how they felt, what they thought, how they behaved, etc., and after you’ve let people vent about their experiences you reveal who their teammates were. The blind debrief is always very candid and open. At that point they get together in their small groups and talk about what happened from each of their perspectives.

From there, we ask participants to generate insights and ways to address the communication and collaboration challenges that they faced. They come up with a list of insights inductively from the experience, which is part of what is so magical about the simulation experience—participants typically say they’ll never forget these lessons after going through a simulation like this.


ACCOUNTING

Accounting for the iPhone Upgrade Program (A)Jonas Heese; Krishna G. Palepu; H. David Sherman; Monica BaraldiHarvard Business School Case#117020 (21 pages) TN

B Case Available

On September 9, 2015, Apple Inc. announced the “iPhone Upgrade Program,” a new way to purchase iPhone models 6s and 6s Plus in Apple’s retail stores throughout the U.S. Next to the strategic implications of the upgrade program, financial analysts tried to understand the accounting implications, especially the recognition of revenue that the program could have on Apple’s financials. Analysts’ reactions to the disclosure were mixed. Was Apple’s accounting system “right” for the iPhone Upgrade Program introduced in 2015?

Revenue and Expense Recognition at NetSuite Inc.Graeme RankineThunderbird School of Global Management Case#TB0449 (12 pages) TN

James Amphlett, a financial analyst with Xenon Capital LLC, gathered information about NetSuite Inc., a company whose shares Xenon might purchase for its computer soft-ware portfolio. NetSuite provides cloud-based financial and enterprise resource planning software to customers for a recurring subscrip-tion fee. The company’s stock price perfor-mance over the past few years was nothing short of spectacular, having increased from around $10 per share at the end of 2008 to over $110 per share at the end of 2013. NetSuite is one of many companies that pro-vide cloud-based computing services and are often referred to as software-as-a-service (SaaS) companies. NetSuite generates sales through

both direct and indirect approaches, with most selling activities conducted over the phone by its sales force. Xenon’s portfolio manager asked Amphlett to pay close attention to the company’s accounting methods, particularly its revenue and expense recognition methods. Xenon has become quite wary of companies such as salesforce.com, ADT, and Pre-Paid Legal Services, which experienced significant stock price declines after popular press articles criticized their accounting policies. Such stories invited close scrutiny from the U.S. Securities and Exchange Commission.

Toshiba: Accounting FraudAnupam MehtaIvey Publishing Case#W16380 (7 pages) TN

In July 2015, the chief executive officer of Toshiba Corporation resigned over the revela-tion of a JP¥151.8 billion accounting scandal that shocked the world. Toshiba, a Japanese multinational conglomerate with net sales of JP¥6.5 trillion and total assets of JP¥6.2 trillion, had been widely criticized in the news for the multibillion-dollar accounting fraud. The com-pany’s stock prices declined by 38 percent after the accounting probe was announced, and the company withdrew the dividend that had been declared earlier. These setbacks challenged company investors, who had always regarded Toshiba as a reputable company. The investors were wondering the same thing as everyone else watching the scandal unfold: how could a company with a 140-year history do this, and why? What were the consequences, and what should Toshiba do in response to this crisis?

VMD Medical Imaging CenterSusanna Gallani; Eva LabroHarvard Business School Case #117002 (6 pages) TN

VMD Medical Imaging Center, a local inde-pendent provider of medical imaging services, is facing some important challenges. Despite

efficiency improvements and cost-cutting initiatives carried out over the past few years, their profitability is shrinking, their prices are becoming uncompetitive, and their main customer—a large regional research and teach-ing hospital—is threatening to seek alterna-tive, more cost-effective suppliers. The case addresses a number of important challenges that firms typically face with respect to design-ing and maintaining their costing systems, including the need to keep the costing systems in line with the business processes of the firm throughout its life cycle; the setting of transfer prices, which highlights the interdependen-cies between costing systems and pricing strategies; and the demand-induced death spiral, which is brought about by a shift in the sales mix from labor-intensive to technology-intensive imaging services. In addition, this case offers an opportunity to develop, at the discretion of the instructor, the class discus-sion in multiple directions, such as the role of costing systems in organizations, the relation-ship between costing and strategy, and the facilitating role of costing with respect to cross-functional coordination.

BUSINESS & GOVERNMENT RELATIONS

The Cheese and the Oligarchs: The Politics, the Media, and Israel’s Dream of a Start-Up NationRafael Di Tella; Christine SnivelyHarvard Business School Case#716060 (28 pages) TN

Israel enjoyed the highest per capita concen-tration of technology start-ups in the world. Despite regional instability, the country maintained strong economic growth and was considered a high-tech powerhouse. But not all Israelis benefited. Between the 1980s and the 2010s, income distribution had widened. By 2015, 20 business groups—nearly all family-

A R T I C L E SB O O K S & C H A P T E R SC A S E SC O R E C U R R I C U L U Me L E A R N I N G

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owned—controlled 1 in 4 listed companies through corporate pyramids. Public anger over the high cost of living, which many believed was due to a lack of competition, led to a series of protests. Some academics and members of the Knesset (Parliament) called for reforms to limit the activities of corporate pyramids.

China Rebalancing: Understanding Economic Governance in ChinaWee Kiat Lim; Geraldine ChenABCC at Nanyang Tech University Case

#NTU095 (24 pages) TN

This is a “context” case that offers a general sense of the scale and scope of tasks confront-ing the Chinese government in economic reform, particularly since President Xi Jinping assumed political leadership in 2012-13. It also provides an avenue to appreciate the inner mechanics of how China works today.

Diageo and Mey Icki: Turkish Delight or Turkish Hangover?Dante Roscini; Gamze YucaogluHarvard Business School Case#717005 (35 pages) TN

In September 2013, 2 years after its $2.1 billion acquisition of Mey Icki Sanayi ve Ticaret AS (Mey Icki)—the principal spirits company in Turkey specializing in the local beverage raki—Diageo, the world’s leading premium drinks company, was concerned about new legislation approved by the Turkish parliament prohibit-ing marketing and restricting the places and times at which alcoholic beverages could be sold. Having been caught off guard by the 2013 legislative changes, the Diageo management found itself needing to justify its $2.1 billion valuation, given that Diageo had acquired Mey Icki in 2011 from TPG for 3 times TPG’s purchase price in 2006. Investors as well as analysts were questioning the increase of over 7 times value in Mey Icki since its privatiza-tion in 2003. The new CEO found himself increasingly overwhelmed by these issues. Had Diageo underestimated the uncertainties in the Turkish market? Would Diageo, with its broad range of brands, geographical spread, and significant financial resources, be able to adapt to the changing environment and recoup its vast investment in Turkey? The case describes the forces that affect investment circumstances in emerging markets, raising the issue of how to best prepare for and manage risks.

BUSINESS ETHICS

Dieselgate—Heavy Fumes Exhausting the Volkswagen GroupMarcus Schuetz; Claudia H. L. WooUniversity of Hong Kong Case #HK1089 (27 pages) TN

At the end of September 2015, Matthias Mueller stepped in as CEO for the Volkswagen Group, days after Martin Winterkorn resigned over the biggest automotive emissions scandal the world had ever seen. Weeks before, the U.S. Environmental Protection Agency confirmed the result of investigations proving that Volkswagen had installed a device in its most successful diesel engines in order to cheat on the test stand and manipulate results. The suc-cessful rapid expansion of Volkswagen’s TDI models in the U.S. market was based on fraud. Across brands, about 11 million of the group’s diesel vehicles worldwide were later discovered to have had the cheating device installed. This shattered the worldwide brand and developed into a threat to the formerly pristine image of “Made in Germany” products. Mueller, a veteran of the Volkswagen Group, took charge of maneuvering the Volkswagen Group out of the crisis, finding technical solutions and re-gaining the trust of customers, authorities, and employees. The group claimed that the scandal was the result of a chain of errors dating back to 2005. The case illustrates how a failure of proper corporate governance, overambitious target setting, and an authoritarian manage-ment culture can lead a successful company into crisis.

Joan Bavaria and Multidimensional CapitalismGeoffrey G. Jones; Seema AmbleHarvard Business School Case#317028 (25 pages)

The case examines the career of Joan Bavaria, a pioneer in socially responsible investing and founder of Trillium Asset Management and of Ceres, the nonprofit organization advocating for sustainability leadership. Bavaria argued that investment houses could use their funds to promote corporate social responsibility and that such investments could be profitable. This was considered extremely unorthodox in the industry. In the wake of the giant oil spill from the tanker Exxon Valdez in Alaska in 1989, Bavaria launched the Ceres Principles, aimed at generating standardized corporate reporting

on environmental performance. Ceres grew as an organization and launched the Global Reporting Initiative in 1997. The case provides an opportunity to explore the opportunities and challenges of both SRI and corporate environmental reporting.

The PACO IndexJohn J. Forrer; Timothy L. FortBusiness Horizons Article#BH761 (6 pages)

Given the growth and maturity of the field of business and peace, the authors of this article call for the creation of an index that would present a scorecard of company behaviors. The authors call this the PACO index; PACO is an acronym for peaceful attributes of companies and is the word for peace in Esperanto. The authors provide a set of principles and drivers that would be necessary for the creation of such an index.

When Tough Performance Goals Lead to CheatingColm Healy; Karen NivenHarvard Business Review Web Article#H03463 (1,334 words)

This article presents a study of what makes some people willing to justify unethical behavior.

ECONOMICS

Creativity, Clusters, and Why Your Barista Has Mixed Feelings about YouRoger Martin; Richard Florida; Melissa PogueRotman Management Magazine Article#ROT313 (5 pages)

The creative intensity of the global economy has grown substantially in recent years. How-ever, “creative class” workers are increasingly being propped up by a mass of hardworking routine workers who are not participating in the economic upside. To prosper in the global economy, the authors argue that every region and industry must boost the creative content of all types of work while continuing to encour-age and support the growth of creative jobs.

ACCOUNTING—BUSINESS & GOVERNMENT RELATIONS—BUSINESS ETHICS—ECONOMICS


ECONOMICS—ENTREPRENEURSHIP

The Economics of Corporate Social ResponsibilityPeter Debaere; Jay ShimshackDarden School of Business Background Note #UV7168 (7 pages)

Corporate social responsibility (CSR) refers to the voluntary decision of companies to address social and environmental concerns by contrib-uting to a public good, reducing external costs, and increasing fairness or distributional equity. CSR is looked at from an economic point of view, focusing on environmental and natural resource issues, with a particular emphasis on water. The term CSR is first clarified and contextualized before being situated in the economics literature. This note studies CSR from an economic angle and looks at how it is in line with economic incentives. It focuses on (1) the extent to which there is a need for CSR in terms of the characteristics of the economic environment that make CSR policies effective and (2) how CSR policies interact with firms’ operations and profit maximization. This tech-nical note supports cases in the Darden course elective “The Global Economics of Water.”

The Fourth Industrial RevolutionKlaus SchwabRotman Management Magazine Article#ROT308 (6 pages)

Technological innovation is on the brink of fueling momentous change throughout the global economy, generating great benefits and challenges in equal measure. So says the chairman of the World Economic Forum. He

describes what he calls “the fourth industrial revolution,” which is based on 3 sets of megatrends: physical, digital, and biological. To thrive in this environment, he argues, public-private research collaborations should increase and should be structured to build knowledge and human capital for the benefit of all.

The Privatization of Aluminium BahrainIngo Walter; Ilya BozhenkovInsead Case #IN1217 (15 pages) TN

Supplemental Slides Available

Privatization of state-owned enterprises represents a significant realm of business for investment banks around the world. It also involves balancing a number of sometimes conflicting objectives among buyers and sellers and a host of risks for both sides as well as the financial firm itself. This case focuses on a large partial privatization in the Middle East that illustrates all these issues and came to define the requirements for investment banks to perform successfully in future privatizations.

Rutas de LimaIngo Walter; Alvin ChiangInsead Case#IN1228 (17 pages) TN


The case involves tapping global capital markets for an important revenue-driven project in a developing country. It addresses key issues

in project and infrastructure finance in the context of a major Peruvian toll road project.

Virgin Atlantic Tested 3 Ways to Change Employee BehaviorGreer Gosnell; John List; Robert MetcalfeHarvard Business Review Web Article#H031GE (1,013 words)

This article presents results from a field study conducted to understand how the behavior of employees influences fuel efficiency and how low-cost company interventions can influence that behavior.

ENTREPRENEURSHIP

Entrepreneurial Sales and Marketing VignettesMark Roberge; Frank V. CespedesHarvard Business School Case#817010 (13 pages)

Which sales candidate is a start-up’s ideal first hire? What marketing channels are best to invest in? How aggressively should an execu-tive team align sales with customer success? Early-stage founders, sales leaders, and mar-keting executives often face 1, and sometimes all, of the above scenarios as they grow their ventures. This case presents 3 short vignettes, with 3 fictitious organizations, to facilitate a discussion of these important decisions.

ENTREPRENEURSHIP

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The Founder’s Mentality

How to Overcome the Predictable Crises of GrowthChris Zook; James Allen

Why is profitable growth so hard to achieve and sustain? The authors’ research shows that when companies don’t achieve growth targets, 90% of the time the root causes are internal. In fact, companies experience a set of predictable internal crises, at predictable stages. Managing these choke points requires a “founder’s mentality” to restore speed, focus, and connection to customers. This book demonstrates to students the strong relationship between these 3 traits and their ability to sustain performance.

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Available as an eBook – 50% off in digital coursepacks.


ENTREPRENEURSHIP

Entrepreneurship Reading: Leading Breakthrough Innovation in Established CompaniesLynda M. Applegate; William R. KerrHarvard Business School Core Curriculum Reading#5272 (36 pages) TN

Test Bank and Supplemental Slides Available

In this Reading, the authors explain what breakthrough innovation is; why it’s important for large, established companies to excel at this type of innovation; and what challenges such organizations may expect to face as they seek to drive breakthrough innovation. The authors describe the nature of breakthrough innova-tion, including how mature industries can be disrupted and what stages breakthrough innovations progress through, providing examples from several different industries. Drawing on IBM and the Horizons of Growth Innovation Lifecycle Model as an example, the authors also identify the internal capabilities and leadership approaches that incumbents must master to guide promising ideas through the innovation life cycle (including mature businesses, high-growth businesses, and emerging business opportunities). The authors then offer suggestions for how incumbents can collaborate with external parties to further drive breakthrough innovation, exploring 4 collaboration models: strategic partnerships, strategic investments, strategic acquisitions, and crowd-based collaborations.

eSig: Conversion Funnel AnalysisMark Roberge; Thomas R. EisenmannHarvard Business School Case#817009 (7 pages) Student Spreadsheet Supplement Available

eSig, an early-stage start-up, offers an electronic signature application as a “freemium” product—i.e., users can upgrade from a free basic version to a premium version by paying a subscription fee. Using 9 months of data from 50,000 user activations, available as a case supplement, students are asked to project the number of new users eSig will acquire in Q1 2016 and recommend how much they should spend during the quarter on each major marketing channel (e.g., Facebook ads, Google ads, content marketing, etc.).

D’Arcy and Elisabeth Whiting face questions about career issues, planning, financing, and the possibility of unequal power dynamics. Students assess the merits of the proposed project, as well as the overall attractiveness of the boutique hotel industry and the career opportunity it presents. Exhibits include the hotel’s historical performance data, lodging statistics for the Savannah market, and the project budget. An associated case, “Hotel Vertu: Financing the Venture in the Boutique Hotel Industry” (#917505), overlaps with this case but delves into the issues of financial forecasts, financial returns, deal structure, equity splits, and the power dynamic between investors and entrepreneurs.

Malenti Strings: Intrapreneurship within FLG, Inc.David A. Garvin; Rachel GordonHarvard Business School Brief Case#917513 (9 pages) TN

This case follows Jenica Fletcher as she rebuilds her company’s guitar strings division from the ground up. Convinced that she could turn the division around if given complete independence from corporate headquarters, Fletcher relocated the group, rebranded it as Malenti Strings, repositioned the guitar strings as high-performance products, and trans-formed Malenti into a fast-growing, profitable business. The case traces Fletcher’s key steps in rebuilding the organization, including the development of a team of committed, inter-dependent employees. Students learn about Fletcher’s values and unique management philosophy, as well as her managerial practices and daily activities. The case also discusses the role and development of the partnerships that helped solidify and grow the business. Coming off its high-end success, Malenti must now decide whether to move into the mid-price market with a new line of electric guitar strings called True.

MBA Entrepreneurs: Crowdfunding Wipebook (A)—Year 1: Persistence and SuccessBrian King; Franck BaresHEC Montreal Case#HEC143 (4 pages) TN

B and C Cases Available

The Wipebook case follows a start-up company over a 2-year period. The company originated from a product idea—an erasable, reusable

Google and Niantic Labs: The Professional Entrepreneur and Innovation in the Silicon Valley (A)Jerome S. EngelUC Berkeley–Haas School of Business Case#B5868 (23 pages) TN

B Case Available

This case focuses on the entrepreneurial career of John Hanke. While the case’s central storyline centers on whether Hanke should spin out his most recent venture—an entity called Niantic Labs, which develops aug-mented reality games for use on smartphones from Google—in early 2015, there are multiple subplots that make this a potentially discus-sion-rich case for classroom use: (1) how the different components of the “culture of innova-tion” ecosystem in the San Francisco Bay Area impacted Hanke’s career, starting from the time when he first enrolled at Berkeley-Haas in fall 1994 up to his situation now; (2) how he successfully created several start-ups before Google acquired his third one, Keyhole, a 3-D online mapping company, in 2004 and then rebranded it as Google Earth; (3) how he was able to scale up Google’s geo-products divi-sion over an 8-year period and within a large corporate setting by applying the concepts of “lean start-up,” “open sourcing,” and “open innovation” that led to the eventual creation of Google Maps and Google Street View; and (4) the importance of “time and place,” which demonstrates how Hanke, as a successful and experienced entrepreneur, foresaw the inter-section of multiple converging technology trends—including the increased power of handheld computing, digital graphics, space-based imagery, and geolocation—with the ubiquitous use of mobile devices and the possibilities of new and related online products, services, and other forms of social interaction.

Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel IndustryHoward H. Stevenson; Michael J. RobertsHarvard Business School Brief Case #917501 (12 pages) TN

Student Spreadsheet Available

Two soon-to-be MBA graduates are consider-ing a business opportunity in the boutique hotel industry. Having found a seemingly at-tractive property in Savannah, Georgia, Yvonne


ENTREPRENEURSHIP—FINANCE

notebook—proposed by a student as part of an MBA entrepreneurship course. Two other students joined him in what was to become the “Wipebook” project. Twelve months into the project, the team had realized one of the most successful crowdfunding campaigns in Canadian history: $424,314 for over 10,000 preorders. The partners then went on to appear on a television show, Dragons’ Den, where they accepted an offer of $300,000 for a 25% stake in the company. As the reality of the entrepreneurial process set in following the initial euphoria, a number of challenges arose.

S’well: The Mass Market DecisionYoungme MoonHarvard Business School Case#317019 (18 pages)

This case tells the story of how Sarah Kauss, a young female entrepreneur, built a premium water bottle brand from scratch. After she built a high-end brand, the key decision in the case is whether to begin expanding the S’well product portfolio to the mass market.

FINANCE

Ferrari: Valuing the Prancing HorseMichael MoffettThunderbird School of Global Management Case #TB0459 (16 pages) TN

Ferrari—the prancing horse—had opened at the top end of its target price range—$52 per share in the U.S.—raising nearly $1 billion for Ferrari’s owner, Fiat. As in most IPOs, the share price of RACE (the ticker symbol for Ferrari) settled in the weeks following the launch. But now many analysts and mutual fund managers were asking the same thing: was Ferrari a promising equity or simply another of the equity eye-candy IPOs to hit the market in recent years?

Finance Reading: Capital Structure TheoryTimothy A. LuehrmanHarvard Business School Core Curriculum Reading#5187 (47 pages) TN Supplemental Slides Available

This Reading introduces students to the theory of capital structure. It explores the determi-nants of an optimal capital structure, first in

the context of Modigliani and Miller’s (M&M’s) perfect market conditions, and then as M&M’s conditions are selectively relaxed. The Reading begins with an overview and comparison of the distinctive characteristics of debt and equity securities and why the choice between them is relevant. The effects of leverage on measures of company financial performance and on the allocation of risk between debt and equity holders follow, laying the groundwork for a discussion of capital structure choice that is initially cast in terms of selecting a target leverage ratio. Next, the M&M propositions are introduced and readers learn why, under perfect market conditions, financing decisions are irrelevant to firm value. Numerical examples and an interactive illustration are used to illustrate the propositions. The M&M conditions are then relaxed to include taxes, financial distress, agency costs, asymmet-ric information, etc. Alternative theories of optimal capital structure—including the static tradeoff model and the pecking order theory—are developed and compared.

The Financial Detective, 2016Kenneth Eades; Jenelle SirleafDarden School of Business Case#UV7201 (4 pages) TN

Instructor and Student Spreadsheets Available

This is an updated version of “The Financial Detective, 2005” (UVA-F-1486). The case pres-ents students with financial ratios for 8 pairs of unidentified companies and asks them to mate the description of the company with the financial profile derived from the ratios. The primary objective of this case is to introduce students to financial ratio analysis—in particu-lar, the range of ratios and the insights each one affords. This case presumes that students have already been introduced to the defini-tions of various financial ratios through other readings or lectures. The structured explora-tion of pairs of companies within an industry affords a number of important insights into strategy and financial performance. First, the economics of individual industries account for significant variations in financial ratios because of differences in technologies, product characteristics, or competitive structures. Second, financial performance results from managerial choices; within industries, the wide variation in financial ratios is often a result of the differences in corporate strategy in marketing, operations, and finance. For those reasons, this case is a

good springboard to subsequent classes, which deal with the interaction of strategy and financial performance.

Fullerton: Risk Analytics and Business StrategyRavi Anshuman; Mitra SabyIndian Institute of Management– Bangalore Case#IMB587 (22 pages) TN

In the aftermath of the financial crisis of 2008, Fullerton India Credit Company Limited, a nonbanking finance company, faced a dismal future. Weak credit issuance standards had exposed the company to significant risk and led its parent, Temasek, to inject new capital into the company to keep it afloat. The new CEO, Shantanu Mitra, embarked on a major restructuring exercise. The case also brings into focus issues related to organizational design, incentive mechanisms, and perfor-mance measurement.

LP Laboratories Ltd.: Financing Working CapitalJayadev MIndian Institute of Management– Bangalore Case#IMB583 (19 pages) TN

Instructor and Student Spreadsheets Available

This case sets the context of a fast-growing company, its financing and working capital requirements, and important aspects the banker should consider while extending the facilities and how the banker can structure working capital solutions. The case is intended to challenge the students and practicing execu-tives to understand the financial statements of a corporate entity from a banker’s perspective, the working capital loan decision process, and assessment of working capital requirements. It provides a comprehensive understanding of the types of financial products being extended by banks to a large corporate entity, especially in working capital finance. Students are expected to assume the position of the banker and raise various questions to the borrowing firm and utilize effectively the credit monitor-ing tools such as review of current account transactions, funds flow statement, financial statement analysis, and so on. This case helps in understanding the intriguing relationship between accounting profits, cash flow, operating cycle, and working capital of the company. Finally, the case concludes with structuring a working capital finance solution.


FINANCE—GENERAL MANAGEMENT

Toyota’s Innovative Share Issue (2015)Emir HrnjicIvey Publishing Case W16373 (13 pages) TN

Student Spreadsheet Available

In June 2015, the Toyota Motor Corporation’s annual shareholders’ meeting included a proposal regarding Toyota’s new share issue. Called “Model AA” shares after the company’s first passenger car, the shares would offer investors new hybrid securities. This proposal created a lot of controversy among existing shareholders. Although President Toyoda claimed that no one would be disadvantaged by these shares, it remained unclear how many shareholders had confidence in this assurance. The share issue, which would potentially comprise up to 5 percent of Toyota’s total outstanding shares, would require the support of a two-thirds majority of shareholders. The new shares looked like ordinary shares with a “lock-up” period or preferred shares with voting rights. At the same time, Model AA shares resembled a convertible debt issue with voting rights (with a conversion ratio to be determined later). It was time to vote on the approval of Toyota’s new share issue, but the following questions lingered in the sharehold-ers’ minds: what exactly was the difference between Model AA shares and ordinary shares? What was the difference between Model AA shares and bonds (or convertible bonds)? Finally, if the vote was approved, how should Model AA shares be priced?

The Wealthfront GenerationLuis M. Viceira; Allison M. CiechanoverHarvard Business School Case#216085 (23 pages)

This case features Wealthfront, a Palo Alto, California-based financial technology start-up. Wealthfront created a fully automated, low-cost, online investment platform targeting the millennial generation. The founders positioned Wealthfront as a disruptive force within the asset management industry. By dramatically lowering the minimum invest-ment required, they sought to democratize access to sophisticated investing. By fall 2014, the firm’s assets under management (AUM) had surpassed $1.5 billion. CEO Adam Nash contemplates a variety of strategic questions, including whether Wealthfront should main-tain its focus on the consumer channel or

expand into business-to-business channels in order to increase AUM.

Where Financial Reporting Still Falls ShortH. David Sherman; S. David YoungHarvard Business Review Article#R1607F (9 pages)

In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelli-gent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital. Unfortunately, that’s not what happens in the real world, for several reasons. First, financial statements necessarily depend on estimates and judgment calls that can be widely off the mark, even when made in good faith. Second, standard financial metrics intended to enable comparisons from one company to another often fall short, giving rise to unofficial measures that have their own problems. Finally, executives routinely face strong incentives to manipulate financial statements. In recent years, we’ve seen the implosion of Enron, the passage of the Sarbanes-Oxley Act, the 2008 financial crisis, the adoption of the Dodd-Frank regulations, and the launch of a global initiative to reconcile U.S. and international accounting regimes. Meanwhile, the growing importance of online platforms has dramatically changed the competitive environment for all businesses. In this article, the authors examine the impact of those developments and consider new techniques to combat the gaming of perfor-mance numbers.

GENERAL MANAGEMENT

AT&T’s Talent OverhaulJohn Donovan; Cathy BenkoHarvard Business Review Article#R1610E (7 pages)

AT&T, which built the U.S. communications infrastructure in the past century, could once claim to be the company “where the future was invented.” But now its legacy businesses are

becoming obsolete. With its industry moving from cables to the cloud, AT&T is in a race to reinvent itself. As part of that transforma-tion, it has initiated a massive effort to help its workers acquire new digital skills. In this article, Cathy Benko, vice chairman of Deloitte, and John Donovan, AT&T’s chief strategy officer, offer a look inside the company’s ambitious program, dubbed Workforce 2020. The challenges are sizable. The firm employs 280,000 workers, and their average tenure is 22 years (not counting people in call centers). At least half the workforce has been assigned a new role and is expected to get the credentials or training to fill it. To manage the talent overhaul, the company has revised its performance metrics, raised performance expectations, and redesigned compensation plans. It is also providing workers with a host of tools for training and development through an online self-service platform, courses in new technologies, tuition reimbursement, and even online master’s degrees in computer science, developed with Georgia Tech and Udacity.

Cyber Breach at TargetSuraj Srinivasan; Lynn S. Paine; Neeraj Goyal Harvard Business School Case#117027 (32 pages)

In November and December 2013, Target Corporation suffered one of the largest cyber breaches to date. The breach that occurred during the busy holiday shopping season resulted in personal and credit card informa-tion of about 110 million Target customers being compromised. The case describes the details of the breach, circumstances that led to it, consequences for customers and for Target, and the company’s response. The case then discusses the role of managers and the board of directors in cybersecurity at Target. Target’s board of directors was subject to intense criti-cism by shareholders and governance experts such as the leading proxy adviser, Institutional Shareholder Services (ISS). The case discusses the critique and defense of the board’s role. The case is designed to allow for a discussion of the causes and consequences of the cyber breach and the accountability of directors in cybersecurity.


Disruption in Detroit: Ford, Silicon Valley, and BeyondErnest Gundling UC Berkeley–Haas School of Business Case#B5875 (21 pages) TN

This case focuses on the Ford Motor Company in spring 2016 and how its current CEO, Mark Fields, and his senior management team should best respond to several emerging dis-ruptive technologies that will ultimately force the automaker to modify its current business model. These disruptive technologies include electric vehicles, connectivity-autonomous vehicles, car ownership and use, and emer-gence of subcompact cars. Having experienced a successful financial turnaround under the leadership of its prior CEO, Alan Mulally, during and after the 2008-09 recession, Ford must now decide whether its current invest-ment in responding to these new emerging technologies is too much, too little, or just right. As Ford considers the degree of its response, it also faces new competitors in the fast-changing automotive landscape—besides its traditional automaker rivals like General Motors, Toyota, and Hyundai—that now include Google, Apple, and Tesla from Silicon Valley as well as BYD and LeEco from China. Ford’s history of innovation in response to past opportunities and challenges during its history is also discussed.

The Ecosystem of Shared ValueMark R. Kramer; Marc PfitzerHarvard Business Review Article#R1610G (11 pages)

Governments, NGOs, companies, and com-munity members all must be involved in programs to create shared value, yet they work more often in opposition than in alignment. A movement known as “collective impact” has facilitated successful collaborations in the social sector, and it can guide businesses in bringing together the various actors in their ecosystems to help remedy some of the world’s most urgent problems. In the process, compa-nies will find economic opportunities that their competitors miss. Five elements must be in place for a collective-impact effort to achieve its aims: (1) a common agenda, which helps align the players’ efforts and defines their commit-ment; (2) a shared measurement system; (3) mutually reinforcing activities; (4) constant communication, which builds trust and ensures mutual objectives; and (5) dedicated “backbone” support, delivered by a separate,

independently funded staff, which builds public will, advances policy, and mobilizes resources.

Globalization, Robots, and the Future of WorkJeffrey A. Joerres; Amy BernsteinHarvard Business Review Article#R1610F (7 pages)

When Jeffrey Joerres first joined Manpower in 1993, the labor market was relatively stable and the company still focused largely on traditional office, clerical, and industrial staff-ing. But since then, globalization and rapid advances in technology have dramatically reshaped the employment landscape. During his 15 years as CEO, Joerres expanded the company’s international operations and moved into the increasingly competitive market for IT, finance, and engineering professionals. In this interview with HBR’s editor, he describes how micromarket analysis reveals “geolocated pools of skills” that businesses can tap—until com-petitors muscle in, deplete the skills pool, and drive up wages. So companies must acquire a “nomadic mentality” that will allow them to establish more temporary, smaller opera-tions as well as large ones. He acknowledges that “when full-scale robotics and artificial intelligence arrive in a broad-based, affordable, easily justifiable way,” hordes of workers will be displaced, with little or no preparation for very different jobs. Joerres advises companies that want to develop a workforce strategy to put multiple work models in place—crowd-sourcing, distant manufacturing, temporary contractors moving to full time—and truly practice them. “When are we done with this efficiency thing?” he says. “The answer is never.”

Hamilton: An American MusicalAnita Elberse; Jennifer SchoppeHarvard Business School Case#517015 (15 pages)

In July 2013, composer, writer, actor, and rapper Lin-Manuel Miranda; director Tommy Kail; and producer Jeffrey Seller met to discuss how to launch Hamilton, a new musical based on the life of the first Treasury secretary of the U.S., Alexander Hamilton. With a hip-hop score and an ethnically diverse cast that looked nothing like their historical counter-parts, Hamilton was an unlikely candidate for success on Broadway. The trio needed to decide which of 2 popular routes was best to

bring their new musical to Broadway: either take the production straight to Broadway in a “cold open” or strike an “enhancement deal” with a nonprofit theater so the musical could be tested before mounting a more expensive Broadway run. Could a hip-hop musical about a largely forgotten Founding Father be a Broadway blockbuster? And if so, what was the right next step in bringing Hamilton closer to that goal?

Managing Multiparty InnovationNathan Furr; Kate O’Keefe; Jeffrey H. DyerHarvard Business Review Article#R1611E (9 pages)

In an increasingly digital and connected envi-ronment, leaders of established companies fre-quently find themselves facing opportunities that they—or even their industries—cannot seize alone. Instead of relying on start-ups to create innovations and then buying into them, organizations are taking part in a process that the authors call “ecosystem innovation,” collaborating to develop and then commer-cialize new concepts. Cisco Hyperinnovation Living Labs (CHILL) differs from seemingly similar approaches, such as R&D alliances, because it focuses on the fast and agile com-mercialization of ideas without a complicated intellectual property agreement. It also differs from traditional partnership efforts because it brings multiple partners together at a very early stage all at once. In this article, the authors discuss how large companies can develop their own ecosystem innovation capa-bilities, using Cisco’s process as an example. They describe the basic principles and the process, identify the most common traps, and explain how leaders can capture valuable opportunities. The process allows companies to bring extremely diverse ideas, skills, and resources together to solve ecosystem-level problems at an astonishing speed.

The Peter F. Drucker Reader: Selected Articles from the Father of Modern Management ThinkingPeter F. DruckerHarvard Business Review Press #10070 (192 pages)

The best of Peter F. Drucker’s articles on man-agement, all in one place. That “management” exists as a concept, a practice, and a profes-sion is largely due to the thinking of Peter F. Drucker. For nearly half a century, he inspired

GENERAL MANAGEMENT


and educated managers—and powerfully shaped the nature of business—with his iconic articles in Harvard Business Review. Through the lens of Drucker’s broad vision, this volume presents an opportunity to trace the great shifts in organizations in the late 20th and early 21st centuries—from manufacturing to knowledge work, from career-length employee tenures to short-term contract relationships, from command-and-control structures to flat-ter organizations that call for new leadership techniques. These articles also offer a firm and practical grasp of the roles of the manager and the executive today—their responsibili-ties, their relationships, their decisions, and detailed processes that can make their work more effective. A celebrated thinker at his best, in this volume Drucker paints a clear and com-prehensive picture of management thinking and practice—both as it is and as it will be.

The Performance Management Revolution Peter Cappelli; Anna Tavis Harvard Business Review Article#R1610D (11 pages)

Hated by bosses and subordinates alike, traditional performance appraisals have been abandoned by more than a third of U.S. com-panies. The annual review’s biggest limitation, the authors argue, is its emphasis on holding employees accountable for what they did last year at the expense of improving performance now and in the future. That’s why many organizations are moving to more-frequent, development-focused conversations between

managers and employees. The authors explain how performance management has evolved over the decades and why current thinking has shifted: today’s tight labor market creates pressure to keep employees happy and groom them for advancement; the rapidly changing business environment requires agility, which argues for regular check-ins with employees; and prioritizing improvement over account-ability promotes teamwork. Some companies worry that going numberless may make it harder to align individual and organizational goals, award merit raises, identify poor performers, and counter claims of discrimina-tion—though traditional appraisals haven’t solved those problems either. Other firms are trying hybrid approaches—for example, giving employees performance ratings on multiple dimensions, coupled with regular develop-ment feedback.

Spotify Anita Elberse; Alexandre de Pfyffer Harvard Business School Case#516046 (19 pages)

In November 2014, Spotify’s chief content officer, Ken Parks, learns that record label Big Machine Records has requested the immedi-ate removal of superstar artist Taylor Swift’s entire catalog from Spotify’s music-streaming service. Is it time for Spotify to reconsider the policies that seem to have prompted Swift’s catalog takedown—and specifically the com-pany’s insistence that artists offer the same assortment across countries and not target only premium tiers? Will the takedown request lead to other artists considering a deflection

GENERAL MANAGEMENT

from the service, and if so, what can Spotify’s executives do to prevent others from leaving? And as it is only a matter of time before the news will be common knowledge among both music industry insiders and fans, how should Spotify respond in the public domain?

Vendedy: The World’s Street Markets in Your PocketYusaf Akbar; Christine SouffrantIvey Publishing Case#W16529 (12 pages) TN

Vendedy was the world’s first mobile network connecting global travelers to local street markets. Inspired by the emergence of the sharing economy, Vendedy’s founder and chief executive officer had always been passionate about uniting social and economic empower-ment with entrepreneurial development. With a complex platform linking street vendors in some of the world’s poorest countries to travel-ers seeking authentic tourism experiences and souvenirs, Vendedy’s founder faced numerous challenges. Where should the venture’s focus be? How quickly should she try to roll out the platform, and across how many countries? How was she going to recruit a full-time team for Vendedy? Could the company succeed in transforming how global travelers accessed the products and stories of street vendors around the world?

GENERAL MANAGEMENT

NEW BOOK

HBR’s 10 Must Reads 2017 The Definitive Management Ideas of the Year

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HUMAN RESOURCE MANAGEMENT

CEO Succession at Cisco (A): From John Chambers to Chuck RobbinsBoris Groysberg; J. Yo-Jud Cheng; Annelena LobbHarvard Business School Case#417031 (24 pages)B and C Cases Available

A smooth transition from former CEO John Chambers to new CEO Chuck Robbins had put Cisco in a position of strength. Looking back, the board reflected on what they had done well and what they might have done differently, and pondered whether another company might be able to implement a similar CEO transition process.

Hewlett Packard Enterprise: The Dandelion ProgramGary P. Pisano; Robert D. AustinHarvard Business School Case#617016 (20 pages)

This case describes Hewlett Packard Enter-prise’s “Dandelion Program,” which has developed a new service offering for the company’s clients by drawing on the special talents of people with autism. The company has deployed “pods,” organized around 8 or 9 employees with autism, to function as high-performance mini-ecosystems, which have

turned out to be 30 percent more effective than average service teams (in some areas). The case centers on questions of how to adapt this successful model to new demands in different service domains, specifically cybersecurity and defense-related areas. The case also explores how the company is innovating and refining its assessment and training processes in support of the program.

How to Pay for Health CareMichael E. Porter; Robert S. KaplanHarvard Business Review Article#R1607G (13 pages)

The U.S. stands at a crossroads in how to pay for health care. Fee for service, the dominant payment model in the U.S. and many other countries, is now widely recognized as perhaps the single biggest obstacle to improving health care delivery. A battle is currently raging, outside the public eye, between the advocates of 2 radically different payment approaches: capitation and bundled payments. The stakes are high, and the outcome will define the shape of the health care system for many years to come, for better or for worse. In this article, the authors argue that although capitation may deliver modest savings in the short run, it brings significant risks and will fail to fundamentally change the trajectory of a broken system. The bundled payment model, in contrast, triggers competition between pro-viders to create value where it matters—at the individual patient level—and puts health care

on the right path. The authors provide robust proof-of-concept examples of bundled payment initiatives in the U.S. and abroad, address the challenges of transitioning to bundled pay-ments, and respond to critics’ concerns about obstacles to implementation.

Let’s Not Kill Performance Evaluations YetLori Goler; Janelle Gale; Adam M. GrantHarvard Business Review Article#R1611G (6 pages)

Performance reviews are awkward and biased. They stick people in boxes and leave them waiting far too long for feedback. It’s no wonder that by the end of 2015, at least 30 of the Fortune 500 companies had ditched them altogether. But even when companies get rid of performance evaluations, ratings still exist—employees just can’t see them. Ratings are done subjectively, behind the scenes, and without input from the people being evaluated. Employees’ contributions to the organization over time need to be assessed in some way. Decisions about pay and promotions have to be made. In the absence of formal evalua-tions, those decisions are made in a black box. Facebook has chosen to hang on to evaluations despite their costs to help ensure fairness, transparency, and talent development. When the company analyzed its performance man-agement system a few years ago, it conducted focus groups and a follow-up survey of more than 300 people. The feedback was clear: 87

HUMAN RESOURCE MANAGEMENT

INFORMATION TECHNOLOGY

NEW BOOK FOR ACADEMIC USE

The Adventures of an IT Leader Updated Edition Robert D. Austin; Richard L. Nolan; Shannon O’Donnell

Now with a new preface and updated technology references, this book invites students to accompany new CIO Jim Barton as he steps up to leadership at his company. Students get a deeper understanding of IT’s role in an organization as Jim struggles through a tough first year, handling (and fumbling) various management challenges from anticipating emerging technologies to managing relationships with executives, vendors, and employees to communicating with the board. The scenarios are based on the authors’ experience working with real-life companies across industries and sectors.

Instructors can adopt individual chapters or the entire book—each comes with a Teaching Note.

Harvard Business Review Press | #10018 (Entire book) | Length: 352 pages | US $35.00



percent of people wanted to keep performance ratings. They wanted to know where they stood. Evaluations were put into place for good reasons; getting rid of them might be an overreaction to poor execution. Leaders at Facebook think it’s more constructive to mitigate the risks by building a culture that recognizes and rewards growth.

Rogers Stirk Harbour + PartnersKate Marks; Ignacio Alvarez de Mon; Juan Lago-NovasIE Business School Multimedia Case#I0033E (Seat time: 60 minutes) TN Video Shorts Available

This multimedia case tells the story of the redundancy (layoff) process carried out by the award-winning architectural studio Rogers Stirk Harbour + Partners at the beginning of 2009. The case focuses on how this studio, which was well-known for having a closely knit, employee-oriented culture, managed such a complicated process. The multimedia material begins with an introduction to Rogers Stirk Harbour + Partners and its work before moving on to present, through interviews with its partners, the reasons for having to make the redundancies. The final section of the case includes an interactive exercise in which students must make key decisions about how the company should manage the process through its various complicated phases. Additional videos, designed to be shown in the class session, provide a breakdown of the students’ recommendations, as well as full reaction to the actual process through various video interviews with employees. The instructor can select which videos to show according to students’ decisions to ensure a truly personalized experience for the class session.

Should You Rehire Someone Who Left for a Competitor?Jyotsna Bhatnagar; Nakul GuptaHarvard Business Review Web Article#H0357D (1,811 words)

In this article, an entrepreneur weighs the pros and cons of rehiring a valuable colleague.

Why Diversity Programs FailFrank Dobbin; Alexandra KalevHarvard Business Review Article#R1607C (10 pages)

After Wall Street firms repeatedly had to shell out millions to settle discrimination lawsuits,

businesses started to get serious about their efforts to increase diversity. But unfortunately, they don’t seem to be getting results: women and minorities have not gained much ground in management over the past 20 years. The problem is that organizations are trying to reduce bias with the same kinds of programs they’ve been using since the 1960s. And the usual tools—diversity training, hiring tests, performance ratings, grievance systems—tend to make things worse, not better. The authors’ analysis of data from 829 firms over 3 decades shows that these tools actually decrease the proportion of women and minorities in management. They’re designed to preempt lawsuits by policing managers’ decisions and actions. But as lab studies show, this kind of force-feeding can activate bias and encour-age rebellion. However, in their analysis, the authors uncovered numerous diversity tactics that do move the needle, such as recruiting initiatives, mentoring programs, and diversity task forces. They engage managers in solving the problem, increase contact with women and minority workers, and promote social accountability. In this article, the authors dig into the data, executive interviews, and several examples to shed light on what doesn’t work and what does.

INFORMATION TECHNOLOGY

Business and Cyber Peace: We Need You!Scott J. ShackelfordBusiness Horizons Article #BH762 (10 pages)

It seems rarely does a day go by without another front-page story about a firm being breached by cyber attackers. Even experts in the field are far from immune to the unsus-tainable status quo. For example, Jim Lewis of the Center for Strategic and International Studies has said, “We have a faith-based approach [to cybersecurity], in that we pray every night nothing bad will happen.” This is a difficult starting point from which to consider an appropriate end game. Still, it is something that firms must do, since infinite investment cannot breed infinite security. This article takes lessons from the burgeoning field of cyber peace studies and applies them to private-sector cyber risk mitigation strategies. With those from members of the C-suite on down

HUMAN RESOURCE MANAGEMENT—INFORMATION TECHNOLOGY

to mailroom clerks worrying about the next attack and looking over their shoulder after a breach occurs, who wouldn’t welcome some peace of mind?

Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project; Part A—The FallSimon Bourdeau; Dragos Vieru; Amelie BernierHEC Montreal Case#HEC138 (15 pages) TN

B Case Available

This 2-part case study of a Canadian knitwear SME called Ça Va de Soi (CVDS) presents a real-life situation: an IT project failure (Part A) and how the project was “resuscitated” and transformed into a success (Part B). The case highlights the challenges and risks of IT projects for SMEs, the importance of evaluating and selecting the right IT supplier and managing relationships, and how, during a retrospective, lessons learned from a project failure can be transferred and applied to other IT projects.

Data Sharing and Analytics Drive Success with IoTStephanie Jernigan; David Kiron; Sam RansbothamMIT Sloan Management Review Article#SMR576 (18 pages)

The authors of this article found that obtaining business value using the connections the IoT creates between an organization and its cus-tomers, suppliers, and competitors depends on a company’s willingness to share data with other organizations.

San Francisco International Airport and Quantum Secure’s SAFE for Aviation SystemDaniel Diermeier; Evan MeagherKellogg School of Management Case#KEL954 (13 pages) TN

Available in SpanishInstructor Spreadsheet Available

In 2008, San Francisco International Airport (known by its 3-letter airport code, SFO) had announced a $383 million plan to renovate and reopen Terminal 2. Assistant deputy director of aviation security Kim Dickie and her team had selected Quantum Secure’s SAFE software suite as the new Terminal 2 credentialing


system, but she needed to develop a busi-ness case quickly that would convince senior managers to give the green light to fund the purchase. The case describes a scenario that occurs frequently in the real world, in which a decision offers some real but qualitative value in ways that are difficult or impossible to quan-tify. The discussion and analysis give students the opportunity to consider the factors that will drive the internal rate of return (IRR), net present value (NPV), and discounted payback period calculations without constructing comprehensive spreadsheet models. Analyzing

the case suggests the limits of such approaches in cases where perceived value is difficult to quantify. The case prepares students to evaluate and justify purchasing requests when interacting with financial gatekeepers such as CFOs and CEOs by introducing a framework to analyze the quantifiable benefits of a capital expenditure, while keeping in mind important intangible benefits.

INTERNATIONAL BUSINESS

Amul’s IT-Enabled Service Delivery to Dairy FarmersHarekrishna Misra; S. R. AsokanIvey Publishing Case#W16367 (17 pages) TN

Kaira District Co-operative Milk Producers’ Union Limited (Kaira Union), a member union of the popular dairy brand Amul, was using IT-enabled services to benefit individual dairy farmers with very small herds in India. The technical inputs, such as veterinary services, were provided through veterinary centers located near clusters of villages. To improve service delivery, better manage inven-tory, deploy veterinarians, and manage their routes, the union had established a centralized veterinary call center staffed at all hours of the day. The call center had achieved considerable saving in the cost of service and improved the efficiency of service delivery. The managing director of Kaira Union wanted to extend the call center to include the union’s operations in the states of Maharashtra and West Bengal. However, he was not sure whether the cur-rent architecture was capable of meeting the challenge. Kaira Union needed to develop a proposal for the expansion.

The Business of Peace: Coca-Cola’s Contribution to Stability, Growth, and OptimismHamish BanksBusiness Horizons Article #BH754 (7 pages)

This article reviews the role of a global commercial organization, The Coca-Cola Company, in contributing to national stabil-ity in developing markets through a strategic approach to social and economic matters. The company’s initiatives complement the role of policymakers, who are primarily responsible

for the safety and prosperity of citizens, often using the Golden Triangle model that aligns government, civil society, and the private sector. Examples are drawn from the empower-ment of women and youth, leverage of special expertise in water replenishment and in distribution and logistics, the impact of global standards of compliance, and the creation of high-value jobs throughout the expansive value chain. The Coca-Cola system is global in scale but multilocal in its operations, leveraging universal human traits with high relevance in individual markets.

The Sri Lankan Health Crisis and the MiddlemanStephen GraingerIvey Publishing Case#W16396 (6 pages) TN

In 2015, many people in southwest Sri Lanka were experiencing severe health problems as a result of poor water sanitation, decaying pumps and pipes, and the resultant unsanitary water. With Sri Lanka’s dubious credit record and extremely poor economy, the country’s government was unsure of how to raise the US $70 million that was required to build new sanitation plants and replace many aging pipes throughout the region. Would it have to accept the first offer of support, or would its longtime allies from other foreign governments come to the rescue? There was little doubt that Sri Lanka would be faced with a number of cave-ats and conditions as part of any agreement to secure the necessary funding. Furthermore, even if the country could find the funds, would the designated officials use them appropriately without falling prey to corruption? As in any developing country, there were many concerns that needed to be addressed and very few resources with which to address them.

Uniqlo: A Supply Chain Going GlobalBenjamin Yen; Davide LentiniUniversity of Hong Kong Case#HK1085 (15 pages) TN

In less than 20 years, Uniqlo has become the leading fast-fashion retailer in Japan and a strong player in other Asian countries, includ-ing China, Korea, and Taiwan. Since 1998, the company has expanded sales at double-digit rates, thanks to an aggressive pricing policy combined with a high level of quality. Key to Uniqlo’s strategy and success was an agile supply chain inspired by the fast-fashion

INFORMATION TECHNOLOGY—INTERNATIONAL BUSINESS

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model pioneered by Inditex and also utilized by H&M, the 2 largest fashion retailers in the world. While Uniqlo demanded competitive prices from its suppliers, it also offered them continual technical assistance in developing and perfecting their manufacturing techniques and supported them with a high flow of orders. The year 1998 was an important year for Uniqlo, as the opening of a flagship store in one of the hottest fashion districts of Tokyo presented the brand in Japan on a national level. At the product level, a partnership with Toray, one of the world’s leading producers of composite and synthetic fibers, resulted in garments that performed in a way and had properties no natural material could match. Working with Toray forced Uniqlo to refine its supply chain further so that it became “just in time,” mimicking that of other highly competitive Japanese companies. With an efficient but regional supply chain, Uniqlo faced rising manufacturing costs in China and was experimenting with new supply chain models in low-cost locations like Bangladesh. Uniqlo’s supply chain had proved effective in the Asia-Pacific region, but could the same model be scaled worldwide? Was the low growth rate Uniqlo experienced in the U.S. and particularly Europe also due to the limitations of its current supply chain?

Why Your Company Needs a Foreign PolicyJohn ChipmanHarvard Business Review Article#R1609B (9 pages)

After a relatively quiet period following the end of the Cold War, geopolitics is back. With the U.S. displaying a reduced appetite for violent confrontation, there are now no world policemen, few effective “neighborhood watch” schemes, and a growing number of vigilante groups and countries eager to challenge the existing rules of the game. Companies cannot assume, in any region of the world, that the strategic status quo will be sustained by neat balances of power or unbreakable promises of foreign-policy assistance from superpower states. In this new reality, the most successful multinational companies will be those that make expertise in international affairs central to their operations, adopting what John Chip-man, the chief executive of the International Institute for Strategic Studies, calls a corporate foreign policy. A corporate foreign policy has 2 components. “Geopolitical due diligence” involves the assessment of local, regional,

and transnational risks facing a company. “Corporate diplomacy” aims to enhance a company’s ability to operate internationally and to ensure its success in each particular country with which it is engaged. Chipman lays out the principles of geopolitical due diligence and corporate diplomacy and argues that their successful execution can be a new source of competitive advantage for multi-national businesses in a time of increased geopolitical volatility.

MARKETING

AGL: An Electric Utility Dealing with Disruptive InnovationTom Houghton; Philip SugaiIvey Publishing Case#W16489 (10 pages) TN

AGL Energy, long a traditional energy supply company in Australia, was facing competition as alternative sources of energy, such as solar power and batteries, were taking root both in the marketplace and with energy-conscious homeowners. The trend of homeowners who opted to supply their own energy needs and go off the grid was described as a “death spiral” for utility companies. In response, AGL Energy appointed a new chief executive officer in 2015 to address concerns related to falling demand, customer retention, and unpredict-able energy prices. With climate change issues pushing so-called green energy sources to the forefront, what were the strategic options that would ensure AGL Energy’s continued pres-ence as a leader in the energy industry?

But You Promised! Managing Consumers’ Psychological ContractsDavid Hannah; Emily Treen; Leyland Pitt; Pierre R. BerthonBusiness Horizons Article#BH745 (6 pages)

In management literature, a psychological contract generally refers to an employee’s beliefs about the reciprocal obligations that exist between him or her and an organization. Legal contracts, on the other hand, are agree-ments that create obligations between the parties that are enforceable by law. Psychologi-cal contracts are different from legal contracts in that they are characterized by the belief that both parties have entered into a set of mutual obligations. While marketing scholars

INTERNATIONAL BUSINESS—MARKETING

and practitioners have largely overlooked the notion of psychological contracts, this article argues that a firm’s customers might view the promises they believe a firm has made to them as psychological contracts. Psychological contracts are as relevant to marketing as they are to management. This article expands the notion of psychological contracts to marketing relationships and outlines internal and exter-nal strategies firms can employ to manage psychological contracts more effectively.

The Elements of ValueEric Almquist; John Senior; Nicholas BlochHarvard Business Review Article#R1609C (9 pages)

What consumers truly value can be difficult to pin down and psychologically complicated. But universal building blocks of value do exist, cre-ating opportunities for companies to improve their performance in existing markets or to break into new markets. In the right combina-tions, the authors’ analysis shows, those ele-ments will pay off in stronger customer loyalty, greater consumer willingness to try a par-ticular brand, and sustained revenue growth. Three decades of experience doing consumer research and observation for corporate clients led the authors—all with Bain & Company—to identify 30 “elements of value.” Their model traces its conceptual roots to Abraham Maslow’s “hierarchy of needs” and extends his insights by focusing on people as consumers, describing their behavior toward products and services. They arrange the elements in a pyra-mid according to 4 kinds of needs, with “func-tional” at the bottom, followed by “emotional,” “life changing,” and then “social impact” at the peak. The authors provide real-world examples to demonstrate how companies have used the elements to grow revenue, refine product design to better meet customers’ needs, iden-tify where customers perceive strengths and weaknesses, and cross-sell services.

Hamilton Won More than TwitterMeghan MurrayDarden School of Business Case#UV7165 (8 pages) TN

The case is set in summer 2016, centered on the writer and performing star Lin-Manuel Miranda, whose Broadway show Hamilton had grossed almost $75 million and won 11 Tony Awards. The musical’s cultural influence


was buoyed by Miranda’s 578,000 Twitter followers. Hundreds of celebrities from Oprah Winfrey to Jennifer Lopez had become ambas-sadors for the musical, and its impromptu #Ham4Ham live performances were engaging thousands of people on social media with each release. The case explores specific tactics the show employed, challenges students to consider the importance of personality in creating social media buzz, and studies the practical influence social media may have had on the show’s success. It is appropriate for any marketing course, particularly a digital media class in which students are familiar with the major platforms.

Know Your Customers’ “Jobs to Be Done”Clayton M. Christensen; Taddy Hall; Karen Dillon; David DuncanHarvard Business Review Article#R1609D (10 pages)

Firms have never known more about their customers, but their innovation processes remain hit or miss. Why? According to Chris-tensen and his coauthors, product develop-ers focus too much on building customer profiles and looking for correlations in data. To create offerings that people truly want to buy, firms instead need to home in on the job the customer is trying to get done. Some jobs are little (pass the time); some are big (find a more fulfilling career). When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, we’ll hire it again. If it does a crummy job, we “fire” it and

look for something else to solve the problem. Jobs are multifaceted. They’re never simply about function; they have powerful social and emotional dimensions. And the circumstances in which customers try to do them are more critical than any buyer characteristics. The key to successful innovation is identifying jobs that are poorly performed in customers’ lives and then designing products, experiences, and processes around those jobs.

Patanjali Takes On Industry GiantsSandeep Puri; Adrija Ajeya; Jupanjot Singh ChughIvey Publishing Case#W16538 (9 pages) TN

In April 2016, the yoga guru who started Patanjali Ayurved Limited declared that his company’s revenue would exceed that of Colgate-Palmolive India by the end of the year and would overtake Hindustan Unilever in India in 3 years. Patanjali’s revenue grew 125 to 150 percent from the previous year. The company aimed to continue growing at a rate of 100 to 125 percent annually over the next 3 years as a manufacturer and marketer of a wide range of products, including flour, biscuits, noodles, spices, honey, and tooth-paste. It also considered exploring interna-tional expansion to support its high growth targets. Could Patanjali aggressively expand into more categories while maintaining sustainable growth?

Pink Tax: Gender and Other Price Discrimination FactorsAradhna KrishnaUniversity of Michigan Case#W04C92 (16 pages) TN

Diana Kelly is the brand manager for a company that has a new cream that gives consumers brighter, shinier toenails. It will be sold in major retail outlets including Target, Walmart, CVS, and Walgreens. As Kelly conducts research to develop a pricing strategy, she discovers examples of price discrimination for products sold to women. In fact, women’s products were priced higher than men’s 42 percent of the time. Kelly considers having separate packaging for men and women and pricing the firm’s product higher for women. Will this help the company maximize profits? Is price discrimination ethical? Students are asked to explore mechanisms for price dis-crimination and gender-based pricing.

Pricing the EpiPen: This Is Going to StingThomas SteenburghDarden School of Business Case#UV7186 (8 pages) TN

This case examines the public controversy that erupted over the increasingly high price of EpiPens. Mylan Inc., a generic drugmaker, bought the EpiPen product line from Merck in 2007. Since that time, the company both invested in marketing to raise awareness for the drug and dramatically increased the price, lifting it from $100 to $600 per 2-pack in the

MARKETING

MARKETING

NEW BOOK

The Analytical Marketer

How to Transform Your Marketing OrganizationAdele Sweetwood; Thomas H. Davenport

Analytics are driving big changes in what marketing departments do as well as how they are organized, staffed, and run. The Analytical Marketer provides critical insight into the changing marketing organization and the tools for reinventing it. Written by the head of global marketing for SAS, this book is based on the author’s firsthand experience of transforming a marketing organization from “art” to “art and science.” Key marketers and managers at SAS tell their stories alongside the author’s candid lessons learned as she led the marketing organization’s transformation.




a lowball offer. And if the other side’s position is unreasonable, it may make little sense to be reasonable yourself. But if everyone routinely came to a dispute with a realistic starting position, the offers would be more or less aligned, and any negotiation that followed would most likely be relatively civil, speedy, and fair. How can a negotiator who wants to be fair from the start ensure that his or her counterpart will be reasonable as well? The authors propose the “final-offer arbitration” challenge, which leverages an approach first applied in labor negotiations in the 1960s. You can employ this tactic by opening with a demonstrably fair offer and then—if the other party is unreasonable—extending a challenge to take the competing offers to an arbitrator who must choose one or the other rather than a compromise between them (the usual out-come of conventional arbitration). The authors describe how AIG used the approach and how other companies can begin to adopt it.

How to Negotiate with a LiarLeslie K. JohnHarvard Business Review Article#R1607J (5 pages)

People, including negotiators, lie every day, so when you’re trying to make a deal, it’s important to defend against deception. The best strategy, says the author, is to focus not on detecting lies but on preventing them. She outlines 5 tactics that research has shown to be effective. (1) Encourage reciprocity. You can build trust and prompt other parties to disclose strategic information by sharing information yourself. (2) Ask the right questions. Negotia-tors often lie by omission, keeping mum about relevant facts, but if directly asked, they are more likely to respond honestly. (3) Watch for dodging. Don’t let your counterparts sidestep your questions—write them down in advance, take notes on the answers, and make sure you get the information you’re seeking. (4) Don’t dwell on confidentiality. Studies show that the more you reassure others that you’ll protect their privacy, the more guarded and apt to lie they become. So be nonchalant when discussing sensitive topics. (5) Cultivate leaks. People often reveal information unwittingly, so listen carefully for any slips and try indirect approaches to gaining information.

U.S. In 2016, simmering consumer anger about the high prices of pharmaceutical drugs finally reached a boiling point, and a media firestorm ensued. The case challenges students to think about the role of fairness in pricing. How can Mylan justify the dramatic price increases? How can it justify the variation in prices across countries, as an EpiPen is priced at an equivalent of $85 in France? The case challenges students to think about how they would handle a public controversy. The EpiPen case is well suited for students in MBA, MBA for Executives, and executive education programs. For MBA students, it can be placed in first-year marketing, pricing, or marketing communications courses. For executives, it can serve as a vehicle to discuss both ethical issues of pricing and how to handle a public controversy.

Singapore Airlines: Premium Goes MultibrandRohit Deshpande; Dawn LauHarvard Business School Case #517017 (25 pages)

Singapore Airlines had long been considered the gold standard because of its innovative customer service. However, the company was faced with new sources of competition, from the rapid growth of Southeast Asian low-cost carriers on the one hand to the expansion of premium Gulf carriers on the other. The com-pany therefore decided to launch a low-cost airline of its own called Scoot, the fourth brand in its portfolio. Now CEO Goh Choon Phong must consider how to grow all 4 airlines without cannibalizing its own market share or diluting the sterling brand of the parent airline.

Social Media MarketingMeghan Murray; I. S. Dunklin; Matthew LoftusDarden School of Business Background Note#UV7167 (9 pages)

This technical note describes the history and benefits of social media marketing and discusses the ways in which it differs from traditional marketing. Seven major social media platforms—Facebook, Instagram, Twitter, YouTube, Pinterest, Snapchat, and WhatsApp—are covered in detail, and the authors outline the different techniques that companies can use with each to uniquely engage with their customers. This technical

note is used in a Darden course elective cover-ing social media marketing and would be an appropriate addition to any marketing class, particularly in a module focused on social media marketing.

NEGOTIATION

Astra Precision—Labour Negotiation (A): Confidential Instructions for Karim FaizalHoracio Falcao; Kriti Jain; Heather GroverInsead Case#IN1220 (10 pages) TN

Student Supplement Available B Case Available

This is a multi-issue 1-on-1 collective bargain-ing agreement negotiation between the senior manager of labor relations (Monika Schmidt) and the new head of the Astra Workers’ Fed-eration (Karim Faizal). Astra Precision is the Indian subsidiary of a German auto company. Recently, when violence erupted over working conditions, Astra went into a lockout and lost $300 million.

Double Career Negotiation (A): Confidential Instructions for the MBA StudentHoracio Falcao; Serena Wee; Heather Grover; Chi-Ying Cheng; Ming-Hong TsaiInsead Case#IN1225 (6 pages) TN

B Case Available

This is a scored 1-on-1 multi-issue negotiation between 2 romantic partners (an MBA student and a medical doctor). After being away for 1 year and having promised to return to India, the MBA student receives an excellent offer to work abroad. Where will they settle, and what will the couple do about their future plans and dreams?

How to Make the Other Side Play FairMax H. Bazerman; Daniel KahnemanHarvard Business Review Article#R1609F (7 pages)

In legal disputes, contested insurance claims, and similarly adversarial negotiations, one party is likely to open with an inflated claim or

MARKETING—NEGOTIATION


OPERATIONS MANAGEMENT

Ace Designers—Competing through Process ImprovementHaritha Saranga; Rupali Kaul; Krishnan AnandIndian Institute of Management– Bangalore Case#IMB595 (17 pages) TN

This case provides an opportunity to perform value stream mapping for an assembly line

and use the same to identify inefficiencies and areas of improvement in the operations processes. It features a manufacturer of machine tools that has recently doubled the throughput rate of one of the assembly lines through half-day indexing. Amid cutthroat competition, the firm needs to reduce costs throughout the plant, and therefore the case prods students to come up with further pro-cess improvements the firm could implement before adopting the half-day indexing on other assembly lines in the plant.

Basic Mathematical Operations in Microsoft ExcelKyle Maclean; Lauren E. Cipriano; Gregory S. ZaricIvey Publishing Background Note#W16404 (14 pages)Student Spreadsheet Available

This teaching note provides step-by-step illustrations and practice problems to assist students in learning how to use basic math-ematical functions in Microsoft Excel. These functions are the necessary building blocks for many spreadsheet models. This teaching note includes practice exercises, answers, and a sup-porting Excel workbook for students.

Breakfast at the ParamountRyan W. BuellHarvard Business School Case#617011 (10 pages)

The Paramount is a 44-seat diner on Charles Street in the Beacon Hill neighborhood of Boston. A frequent “Best of Boston” award winner, the restaurant is a perennial favorite of locals and tourists, particularly for brunch on the weekends, when lines often stretch down the street. The case focuses on the restaurant’s interesting seating policy and a recent increase in the popularity of carryout orders, which pose a threat to the service experiences of cus-tomers and the sustainability of the operation.

Levi Strauss & Co.: Driving Adoption of Green ChemistryRobert Strand; Martin MulvihillUC Berkeley–Haas School of Business Case#B5867 (21 pages) TN

This case examines the challenges and oppor-tunities faced by Levi Strauss & Co. (LS&Co.) as it attempts to help establish a cross-industry sustainability initiative to eliminate hazard-

ous chemicals in the apparel supply chain. LS&Co.’s Screened Chemistry program screened chemical formulations against human and environmental health hazard end points before the chemicals entered the supply chain. This shift represents a radical departure from the status quo that requires widespread collaboration across the industry for imple-mentation. This case explores the associated challenges and opportunities to achieving cross-industry collaboration to achieve a sus-tainability objective.

Royal FloraHolland: The Dutch Floriculture Supply ChainP. Fraser Johnson; Ken MarkIvey Publishing Case#W16377 (16 pages) TN

In January 2016, the program director of Royal FloraHolland and a supply chain consultant met to develop a supply chain strategy that would allow Royal FloraHolland to adapt to the changing competitive environment that jeopardized its business model. Royal Flo-raHolland was the largest floriculture auction organization in the world, selling more than 30 million flowers and plants daily. Located in the Netherlands, Royal FloraHolland is a co-operative owned by 4,500 growers. A century-long tradition, where buyers purchased flowers and plants using the Dutch flower auction clock, was being threatened. Pressures facing Royal FloraHolland included emerging global competition, industry consolidation, and cus-tomers bypassing the auction process to buy directly from the growers. The 2 supply chain experts considered opportunities and chal-lenges that lay ahead for the organization.


Cascade Engineering: Social Innovation at a Triple-Bottom-Line Plastics ManufacturerChristopher WhiteUniversity of Michigan Case#W04C87 (20 pages) TN

Terrance Robinson is a young associate at Cascade Engineering, and he has an idea for a new product that will bring clean water to the developing world. Still, he lacks authority. He must navigate the waters of Cascade

OPERATIONS MANAGEMENT—ORGANIZATIONAL BEHAVIOR

System Analysis

Green Buildings

Design Thinking

NEW!

Engineering Curriculum Map

This new curriculum map recommends items ideal for teaching business topics in engineering courses. Suggestions include cases, articles, simulations and other material with interactive elements. Many items come with a Teaching Note.

Selections include: Technical Note: Innovation

and Invention—A Patent Guide for Inventors and Managers Background Note (37 pages)

Global Supply Chain Management Simulation V2 Simulation (180 minutes) TN

Ratnagiri Alphonso Orchard: Bayesian Decision Analysis Case (2 pages) TN

View this map and other specialized course maps: hbsp.harvard.edu/specialized


Organizational Behavior Reading: Developing Your Managerial CareerLinda A. HillHarvard Business School Core Curriculum Reading#8330 (46 pages) TN


This Reading examines what it takes to build a successful managerial career. The Essential Reading section contends that a managerial role, by its nature, imposes learning needs that cannot be fully taught in the classroom but must be mastered throughout one’s career. It then presents the Developmental Strategies Framework, which focuses on 3 recurring career challenges: (1) choosing the right posi-tion, (2) developing managerial skills by learn-ing from stretch assignments and through periodic reflection, and (3) getting help by building a developmental network. The Read-ing includes 2 Supplemental Reading sections: one discusses an approach to honing ethical judgment; the other presents a way to think about integrating work and life goals. The Reading features 5 videos: “A Great Job Fit,” which deals with how to choose new positions; “Seek Challenges,” which advocates finding assignments that expand one’s knowledge and skill set; “Forging a New Global Comfort Zone,” covering the advantages of taking on international opportunities; “Seek Mentors Who Expand Your Comfort Zone,” offering advice on how to use mentors; and “Ethical Ambiguity,” which provides guidance on the ethical dimensions of managerial decision making. The Reading also includes an Interactive Illustration, “Work Values and Job Selection,” in which readers rate 5 job opportunities, separately rate the importance to them of 9 work values, and then analyze whether their job ratings are consistent with their work values.

Organizational Behavior Reading: Leading TeamsEthan S. BernsteinHarvard Business School Core Curriculum Reading#8306 (40 pages) TN


This Reading provides a user guide for leading and participating in teams. It is designed to give students a clear sense of how to design, launch, and manage effective teams. The introduction notes that teams are the basic building blocks of organizations, but they often

Engineering and its Triple Quest unit to make his dream a reality. The question is, where should he start?

How to Tackle Your Toughest DecisionsJoseph L. Badaracco, Jr.Harvard Business Review Article #R1609J (5 pages)

The toughest calls managers have to make come in situations when they have worked hard to gather the facts and have done the best analysis they can, but they still don’t know what to do. Then judgment—a fusion of think-ing, feelings, experience, imagination, and character—becomes critical. The author offers 5 practical questions to improve your odds of making sound judgments: (1) What are the net consequences of all my options?; (2) What are my core obligations?; (3) What will work in the world as it is?; (4) Who are we?; and (5) What can I live with? All 5 questions must be answered, according to the author. “Each question is an important voice in the centuries-long conversation about what counts as a sound decision regarding a hard problem with high stakes for other people.” If you work through these questions, you’ll know that you’ve approached the problem in the right way—not just as a good manager but also as a thoughtful human being.

Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision MakingDaniel Kahneman; Andrew M. Rosenfield; Linnea Gandhi; Tom BlaserHarvard Business Review Article #R1610B (9 pages)

Organizations expect to see consistency in the decisions of their employees, but humans are unreliable. Judgments can vary a great deal from one individual to the next, even when people are in the same role and supposedly following the same guidelines. And irrelevant factors, such as mood and the weather, can change a person’s decisions from occasion to occasion. This chance variability of decisions is called “noise,” and it is surprisingly costly to companies, which are usually completely unaware of it. Nobel laureate Daniel Kahneman, a professor of psychology at Princeton, and Andrew M. Rosenfield, Linnea Gandhi, and Tom Blaser of TGG Group explain how organizations can perform a “noise audit”

by having members of a professional unit evaluate a common set of cases. The degree to which their assessments vary provides the measure of noise. If the problem is severe, firms can pursue a number of remedies. The most radical is to replace human judgment with algorithms. Unlike people, algorithms always return the same output for any given input, and research shows that their predic-tions and decisions are often more accurate than those made by experts. Although algorithms may seem daunting to construct, the authors describe how to build them with input data on a small number of cases and some simple, commonsense rules. But if applying formulas is politically or operationally infeasible, companies can still set up procedures and practices that will guide employees to make more consistent decisions.

Organizational Behavior Reading: Decision MakingFrancesca Gino; Max H. Bazerman; Katherine ShonkHarvard Business School Core Curriculum Reading#8383 (51 pages) TN


This Reading argues that decision making is systematically flawed, and it introduces methods to improve decision-making effective-ness. The Essential Reading section covers the rational decision-making model and 3 important ideas that challenge it: Herbert Simon’s concept of bounded rationality, Amos Tversky and Daniel Kahneman’s work on heuristics and biases, and Keith Stanovich and Richard West’s conceptualization of System 1 and System 2 thinking. The Reading then dis-cusses 7 common biases or heuristics, along with ways to mitigate them, and lists additional common biases to show the broad range of issues that can influence decision making. The authors also describe biases and additional decision-making challenges that are particular to groups. Finally, the Essential Reading draws on Richard Thaler and Cass Sunstein’s concept of choice architecture to present a new frame-work for better decision making. The Reading includes 2 Supplemental Reading sections that deal with how motivation and emotion affect decisions and how flawed decision-making processes can compromise ethics. The Reading also features 2 videos and one Interactive Illustration.



underperform or even fail, which is illustrated by a video detailing a fatal plane crash attrib-uted to poor teamwork. The Essential Reading (31 pages in length) discusses the evolution of teams, noting the recent trend from stable, bounded teams (“traditional teams”) to more fluid and unbounded ones (“4-D teams” or “teaming”). It then discusses team effective-ness, common reasons teams fail, and the concept of team process gains and losses. Next, it provides a guide to leading effective teams focused on 3 levers. The section ends with a

brief discussion of team culture and a graphic of the 3-lever model. The optional Supple-mental Reading (9 pages in length) examines the relationship between an organization’s structure and the success of teams, bridging material on teams and organization design. This Reading has 4 videos: “United Airlines Flight 173” shows how poor teamwork can lead to failure; “The Evolution of Teams” provides a quick summary of the evolution of teams; “Tune In to the Skills Your Team Offers” shows how a team adjusted member roles to improve performance; and “Create Norms to Unify Your Team” covers a successful team launch. The Reading has one Interactive Illus-tration, a test of social sensitivity used in recent research on team effectiveness.

SALES

How to Make the Most of Omnichannel RetailingHarvard Business Review Article #F1607A (3 pages)

One of the biggest challenges for brick-and-mortar retailers is competing with online-only sellers such as Amazon. The conventional “omnichannel” strategy is to encourage consumers to shop across channels. But few retailers have closely examined the profitabil-ity of such efforts, and they typically pay little attention to how far a customer lives from the store. New research led by Temple University’s Xueming Luo shows that distance is a crucial variable. Working with a Chinese department store on its coupon strategy, the researchers found that the most profitable promotions coaxed distant online shoppers (those who lived more than 5 kilometers away) into physi-cal stores, where they were more likely to make impulse purchases and to buy “experiential” goods such as apparel and makeup. Luring distant shoppers from in the store to online was actually counterproductive—profits from those customers fell. (Coupons made no significant difference when customers lived close to a store.) Retailers should also consider giving online customers incentives (such as free shipping) to have orders sent to a local store for pickup rather than delivered to their homes, the researchers say. And they should reduce the real or perceived costs of traveling to a store—for example, by locating stores near public transit or ensuring ample parking.

Oversight SystemsFrank V. Cespedes; Amram MigdalHarvard Business School Case#817015 (21 pages)

The case, set in May 2016, discusses sales strategy and managing sales and service at Oversight Systems, an Atlanta, Georgia-based software firm that develops analytics for organizations to monitor their data for errors, fraud, and operational inefficiencies. Included is an overview of Oversight’s founding and the evolution of its offering from customized software analytics to prepackaged software-as-a-service (SaaS) bundles, called Insights on Demand (IOD). Oversight adapted its sales and service approach to better suit IOD by standardizing its prices, packaging, and prod-uct delivery, as well as its approach to sales, including the sales team’s composition, com-pensation, and incentive structure. Over time, Oversight had engaged in a variety of channel partnerships, and some were more successful than others. The case examines the decision of whether to engage in a channel partnership with a major credit card company.

Using Groupon for Health and Wellness BusinessesIn LeeBusiness Horizons Article#BH746 (9 pages)

Social merchants are small-business owners and entrepreneurs who adopt social shopping as a new sales channel. They employ social shopping intermediaries, such as Groupon and LivingSocial, to promote their products or services at large discounts to price-sensitive customers. The success of social merchants depends in part on the reputation they gain at merchant review sites (e.g., Yelp, TripAdvisor, Angie’s List), via which consum-ers post online product and merchant reviews. An analysis of social shopping provides insight regarding how social shopping works and what merchants must be aware of if they utilize social shopping intermediaries. This article shares these insights in the context of a set of health and wellness merchants that were studied for 5 years. Specifically, this article discusses how their Groupon daily deals affect merchant reviews, and how surviving versus failed social merchants differ in terms of their review scores and number of reviews. Finally, this article provides recommendations about merchant review management for health and wellness merchants.

ORGANIZATIONAL BEHAVIOR—SALES

Media Relations

Crisis Communication

Reputation

NEW!

Corporate Communications Curriculum Map This new curriculum map recommends items ideal for teaching common topics in Corporate Communication courses. Suggestions include cases and articles, many with Teaching Notes.

Selections include: Aetna Inc.: Managing Inherent

Enterprise Risks Through Stakeholder Management (A) Case (20 pages) TN

The Lac-Mégantic Disaster Case (8 pages) TN

Crisis Communication: Lessons from 9/11 Article (6 pages)

Communicating in Organizations in the Digital Age Background Note (12 pages)

View this map and other specialized course maps: hbsp.harvard.edu/specialized


SERVICE MANAGEMENT

Clinical Background on HIV/AIDS, Malaria, and TuberculosisJulie Rosenberg; Kileken ole-MoiYoi; Michelle MorseHarvard Medical School Case#GHDC10 (27 pages)

This concept note provides a clinical overview of 3 diseases that feature predominantly in our case study collection: HIV/AIDS, tuberculosis, and malaria. The concept note describes the pathology, causes, and management related to prevention, diagnosis, and treatment of each of the diseases.

SOCIAL ENTERPRISE

“Fixing Our Politics” 1 Vote at a Time: Public Policy Graduates Aim to Boost Turnout with TurboVoteJohn D. Donahue; Pamela VarleyHarvard Kennedy School Case #KS1183 (14 pages) TN

This case, about creating a start-up with a social mission, is designed to help students think through the strategic alignment of public value, legitimacy/support, and operational capacity in a simple context. Together with an in-class video “reveal,” the case package fol-lows the thinking of 2 masters of public policy graduates as they create TurboVote, a nonprofit service designed to increase voter turnout by sending subscribers reminders and helping them register and vote by mail. The case shows that despite a straightforward business idea, the young founders had to address conse-quential choices. The written case includes background information about the voter turnout problem and ends with the TurboVote leaders contemplating the basics of a business plan—in particular, the options and implica-tions of different financing models. The case package includes a set of 3 short videos. “Meet the Founders” (5:37 minutes) provides a brief introduction to the 2 protagonists. Students will want to read the case and watch this video before class. The other 2 videos (4:45 minutes and 4:09 minutes, respectively) are designed to be played by the instructor partway through class. The first reveals how the founders approached some key strategic choices. In the second, they reflect on their decisions, particu-larly in terms of funding, and talk briefly about

their hoped-for path forward. The instructor may play these videos separately or together, and follow them up with further discussion.

James Chen’s Entrepreneurial Odyssey (A): AdlensRandel Carlock; Elin WilliamsInsead Case#IN1293 (13 pages) TN

B and C Cases Available

This 3-part case study explores the develop-ment of Adlens, a commercial firm, and Vision for a Nation, the social venture developed in parallel. The entrepreneur’s strategy is to sell the innovative Adlens optical products in mid-dle-to-high-income economies for profit, while Vision for a Nation is dedicated to improving vision in the developing world, starting with Rwanda. A key synergy comes from the “buy 1, give 1” model, whereby for every pair of Adlens glasses purchased, another pair (adjustable or traditional glasses) is given away for free in Rwanda. Developing Adlens and Vision for a Nation as viable ventures has not been an easy task. Despite the vast amount of time and money James Chen has invested in these proj-ects, their long-term sustainability has yet to be demonstrated. But as an investor of “patient capital,” he sees beyond the logic of short-term profit making.

Sanergy: Tackling Sanitation in Kenyan SlumsJennifer Walske; Laura D. TysonUC Berkeley–Haas School of Business Case#B5871 (23 pages) TN

This case centers on Sanergy, a 5-plus-year-old hybrid organization that has become a high-profile, high-growth social enterprise known initially for its Fresh Life toilets deployed in the Mukuru and Mathare slums of Nairobi, Kenya. Sanergy’s cofounders launched their social start-up out of the 2011 MIT 100K business plan challenge and quickly received national attention in the press. By 2013, the firm had raised a “Series A” equity round from Acumen, Eleos Investment Manage-ment (Eleos), and Novastar, and the team had also begun its operations in Kenya to more rapidly build out both sides of its business: (1) in its nonprofit business, deploying Fresh Life toilets to improve access to hygienic sanitation in Nairobi’s informal settlements sanitation business, largely using a franchisee model, and (2) in its for-profit fertilizer business, with

SERVICE MANAGEMENT—SOCIAL ENTERPRISE—STRATEGY

its Evergrow Organic Fertilizer, produced by Farm Star, selling to small and medium-sized farms in need of rich soil supplements. This case examines both Sanergy’s hybrid business model and “sustainable sanitation value chain” in detail and explores the challenges the social enterprise entity will face as it continues to scale up both businesses and seeks to reach the breakeven point by 2018.

SGFE Cambodia (A): High-Energy Char Briquettes for the Bottom of the PyramidPhilip Parker; Xavier How-ChoongInsead Case #IN1239 (6 pages) TN B Case Available

The case tells the story of SGFE Cambodia and its CEO, Carlo Figa Talamanca, in the period 2011-14. Talamanca has the opportunity to take over the struggling SGFE. Created by the NGO GERES to reduce deforestation in Cambodia, SGFE produces and sells char briquettes. They compete with traditional charcoal, which is mainly derived from illegal forest exploitation. Although superior, the briquettes are also more expensive and are not well-known by consumers. The question is how to penetrate the market at low cost and how to position the products. Another question is whether SGFE can realistically achieve the social and environmental objectives of the company. Case B describes SGFE’s subsequent commer-cial success. Getting the public to know the products was the major hurdle, but now that this step has been achieved, demand exceeds supply. Interestingly, it is the low-income vendors, at the bottom of the pyramid, who are the biggest consumers of this more expensive product. However, the social impact of SGFE is minimal, and the deforestation of Cambodia continues.

STRATEGY

Alphabet Eyes New FrontiersJuan Alcacer; Raffaella Sadun; Olivia Hull; Kerry HermanHarvard Business School Case#717418 (30 pages)

In October 2015, Google restructured into Alphabet, a holding company, which analysts said would facilitate innovation among its diverse subsidiaries. But when news reports surfaced revealing struggles within Alphabet


companies including Nest, the smart thermo-stat maker, observers began to wonder whether the reorganization made sense after all.

chotuKool: “Little Cool,” Big OpportunityRory McDonald; Derek van Bever; Efosa OjomoHarvard Business School Case#616020 (18 pages)

In 2013, a team led by Gopalan Sunderraman, vice president of corporate development at Godrej & Boyce Mfg. Co. Ltd.—one of the companies owned by Godrej Group, a large Indian conglomerate—was preparing to launch an innovative low-cost refrigerator. Developed expressly for the approximately 80% of Indians who lacked access to refrigeration (a market Godrej had never before targeted), the chotuKool represented a technological marvel—a small, inexpensive thermoelectric appliance powered by a rechargeable battery. The case traces chotuKool’s development and evolution from an initial product concept inspired by theories of innovation and the strategic vision of Jamshyd Godrej (managing director and chairman at Godrej & Boyce Mfg.) to a promising new line of business that emerged from a process of learning and discovery through market feedback. As the company geared up for the broader rollout of chotuKool, Sunderraman and his team faced some tough questions. What were the proper target and scope for the launch? Which strategy gave them the best

chance of success? Could chotuKool really redefine the company and bring refrigeration to hundreds of millions of Indians?

How IKEA’s Strategy Was FormedQuy Huy; Michael Jarrett; Lisa DukeInsead Case #IN1283 (12 pages) TN

This case describes how IKEA’s distinctive strategy was formed over a period of about 30 years (late 1940s to late 1970s). It describes how the various elements of its strategy were created gradually with the help of many people other than the founder Kamprad and how these elements were ultimately integrated with each other, thanks to the creation of IKEA’s organizational culture, which came much later.

The Network Imperative: How to Survive and Grow in the Age of Digital Business ModelsBarry Libert; Megan Beck; Jerry WindHarvard Business Review Press #10062 (256 pages)

Digital networks are changing all the rules of business. New, scalable, digitally networked business models—like those of Amazon, Google, Uber, and Airbnb—are affecting growth, scale, and profit potential for compa-nies in every industry. But this seismic shift isn’t unique to digital start-ups and tech super-stars. Digital transformation is affecting every business sector, and as investor capital, top talent, and customers shift toward

network-centric organizations, the perfor-mance gap between early and late adopters is widening. So the question isn’t whether your organization needs to change but rather when and how much. The Network Imperative is a call to action for managers and executives to embrace network-based business models. The benefits are indisputable; companies that lever-age digital platforms to co-create and share value with networks of employees, customers, and suppliers are fast outpacing the market. These companies, or network orchestrators, grow faster, scale with lower marginal cost, and generate the highest revenue multipli-ers. Supported by research that covers 1,500 companies, authors Barry Libert, Megan Beck, and Jerry Wind guide leaders and investors through the 10 principles that all organiza-tions can use to grow and profit, regardless of their industry. They also share a 5-step process for pivoting an organization toward a more scalable and profitable business model. The Network Imperative, brimming with compelling case studies and actionable advice, provides managers with what they really need: new tools and frameworks to generate unprec-edented value in a rapidly changing age.

Putting Products into ServicesMohanbir SawhneyHarvard Business Review Article #R1609G (9 pages)

High-end professional services firms, unlike product companies, traditionally experience only linear revenue growth. That’s because

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HBR Guide to Data Analytics Basics for ManagersHarvard Business Review Press

Today’s business environment brings with it an onslaught of data, and managers must know how to tease insight from it. The HBR Guide to Data Analytics Basics for Managers shows students how to make better decisions using a 3-step process to get at necessary information, study data, and communicate findings to others. Students will learn to identify the metrics needed to measure, formulate hypotheses and test against them, ask the right questions, understand statistical terms and concepts, and create effective charts and visualizations.



environmental change and accepts funding only through individuals and foundation grants. The case explores the detailed history and business models of both organizations.

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selling more services means adding more professionals, which limits profit margins. However, savvy providers of consulting, legal, accounting, and other services are using tech-nology to their benefit. They are automating certain routine aspects of their work to essen-tially “productize” those tasks. By combining those products with human attention to mat-ters requiring more knowledge or judgment, they can give clients better service at a lower cost. This article provides a guide to product development for professional services firms. The author describes the 3 key stages of the process: (1) to “discover potential products,” identify opportunities for automation by look-ing for patterns in your services and zeroing in on the tasks that are performed frequently and require little knowledge; (2) to “develop prod-ucts,” use algorithms and artificial intelligence to create “smart” tools to handle high-volume, low-sophistication tasks; and (3) to “monetize your products,” stop charging for time and materials and shift first to transaction-based pricing and then to an outcome-based model. In conjunction with this process, it’s important to create a cross-functional team that focuses on product development. And take the long view—you’ll have to invest time and money before you reap the benefits of embedding products in services.

Tiger Airways: Navigating through Challenges and CompetitionShirley Koh; Clive ChooABCC at Nanyang Tech University Case#NTU091 (21 pages) TN

This case chronicles the formation and growth of Tiger Airways, a low-cost carrier headquar-tered in Singapore. It describes the business, managerial, and operational challenges faced by Tiger Airways, especially as industry overcapacity became an overriding concern.

The Transformative Business ModelStelios Kavadias; Kostas Ladas; Christoph H. LochHarvard Business Review Article#R1610H (10 pages)

A business model that can link a new technol-ogy to an emerging market need is the key to industry transformation. When Apple coupled the iPod with iTunes, it revolutionized the audio devices market. But most attempts to introduce a new model fail. The authors did an in-depth analysis of 40 companies that had

launched new business models in a variety of industries, and here they present the key takeaways from their research. They looked for recurring features in the models and found 6: personalization, a closed-loop process, asset sharing, usage-based pricing, a collaborative ecosystem, and an agile and adaptive organi-zation. No model displayed all of them, but having a higher number of features usually correlated with a greater chance of success at transformation. (The taxi service Uber can claim 5 of the 6.) Companies that are think-ing about changing their business model or entering an industry with a new model can rate themselves on the 6 features to assess the likelihood that they’ll be transformative.

Truly Human Leadership at Barry-WehmillerDylan Minor; Jan W. RivkinHarvard Business School Case#717420 (20 pages)

The chief executive of Barry-Wehmiller, a large maker of industrial equipment, has resolved to run the company via “truly human leadership” in which “success is measured by the way we touch the lives of people.” With unusual people practices and a distinctive strategy, the com-pany has generated enviable financial results. During the Great Recession of 2007-09, the company went to great lengths to avoid layoffs. But as the case opens in 2013, one division of the company faces a sharp downturn, and the head of the division must decide whether to let employees go. In light of Barry-Wehmiller’s people practices and strategy, what should he do?

World Wildlife Fund (WWF)Ramon Casadesus-Masanell; Jordan MitchellHarvard Business School Case#716468 (29 pages)

Nearly all environmental organizations have a similar aim: to stop the degradation of the natural environment. However, the strategies environmental organizations choose to employ are sometimes starkly different. This case compares the models of 2 dissimilar environ-mental powerhouses: Greenpeace and World Wildlife Fund (WWF). Active in 100 countries, WWF works with governments, businesses, other NGOs, and communities to set up con-servation programs to preserve natural habitat. In contrast, Greenpeace works to campaign against governments and corporations for

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NEW VENTURE EXERCISE The Food Truck ChallengeMichael A. Roberto This best-selling online exercise is a short, competitive exercise that teaches students the value of learning by doing, prototyping, and being willing to fail.

Students work individually or in teams to run a successful food truck and achieve maximum revenue over 5 simulated weeks. In each round, students make decisions in hopes of finding the best menu-location combination. They analyze market data, make a plan, and then decide whether to go to scale right away, conduct further research, or experiment with a low-capacity pushcart. In the class debrief, students learn about the trade-offs between analysis, experimentation, and scale.

The Food Truck Challenge is ideal for discussions of innovation, product development, design thinking, lean start-up, entrepreneurship, strategy, marketing, and organizational learning. It requires no student prework and can be played in 20-30 minutes.

Harvard Business School | Multi-player or Single-player Seat time: 20-30 minutes | #7201 | TN

Registered Premium Educators can access: A complete Free Trial online A video of Michael Roberto debriefing the simulation

Not a Premium Educator? Registration is free: educatoraccess.hbsp.harvard.edu

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p. 2 p. 3 Back Cover TEACHING MATERIALS · Preserve the Luxury or Extend the Brand? #R1101X Should You Listen to the Customer? #R1209L ORGANIZATIONAL BEHAVIOR Can a Strong Culture