Managers know to keep handy any number of potential incentives for their employees, like more money, recognition, training, flex-time, bonus vacation days. Yet even the savviest employers often neglect one incentive that employees value more highly than gold: a sense of progress.
“On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive, and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest,” write HBS professor Teresa M. Amabile and Steven J. Kramer in the January-February issue of Harvard Business Review.
Their article, “What Really Motivates Workers,” in “The HBR List: Breakthrough Ideas for 2010,” describes multiyear research and its implications for improved managerial practice (and happier employees). “As a manager of people, you should regard this as very good news: The key to motivation turns out to be largely within your control.”
— Martha Lagace
Working Papers
Competing Ad Auctions: Multi-homing and Participation Costs
| Authors: |
Itai Ashlagi, Benjamin Edelman, and Hoan Soo Lee |
Abstract
We model competing auctions for online advertising, with attention to the participation costs that limit advertisers’ interest in using small ad platforms. When participation costs are large relative to the volume of traffic an ad platform can offer, an advertiser may forego use of an ad platform that the advertiser otherwise finds profitable. Mergers between ad platforms can increase advertiser welfare if the resulting click-through rate and volume of traffic are sufficiently improved relative to the offerings of the ad auctions when separate. When there is an insufficient improvement, such mergers can harm advertisers.
Download the paper: http://www.hbs.edu/research/pdf/10-055.pdf
Investing in Improvement: Strategy and Resource Allocation in Public School Districts
Abstract
This working paper offers concrete examples of improved productivity and efficiencies at the district level, drawing from the author’s experience working with districts and developing such case studies for Harvard Business School. Childress makes the point that given the rarity of the strategic approaches to resource allocation, district leaders need more guidance and tools to help them make better decisions and manage the consequences, particularly when they are under enormous fiscal pressure.
Download the paper: http://www.hbs.edu/research/pdf/10-057.pdf
Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions
| Authors: |
Benjamin Edelman and Michael Schwarz |
An abstract is unavailable at this time.
Download the paper: http://www.hbs.edu/research/pdf/10-054.pdf
On the Descriptive Value of Loss Aversion in Decisions under Risk
| Authors: |
Eyal Ert and Ido Erev |
Abstract
Five studies are presented that explore the assertion that losses loom larger than gains. The first two studies reveal equal sensitivity to gains and losses. For example, half of the participants preferred the gamble “1,000 with probability 0.5; -1,000 otherwise” over “0 with certainty.” Studies 3, 4, and 5 address the apparent discrepancy between these results and the evidence for loss aversion documented in previous research. The results reveal that only under very specific conditions does the pattern predicted by the loss aversion assertion emerge. This pattern does not emerge in short experiments or in the first 10 trials of long experiments. Nor does it emerge in long experiments with two-outcome symmetric gambles or in long experiments with asymmetric multi-outcome gambles. The observed behavior, in these settings, reflects risk neutrality in choice among low-magnitude mixed gambles.
Download the paper: http://www.hbs.edu/research/pdf/10-056.pdf
Publications
Constructing the International Economy
| Editors: |
Rawi Abdelal, Mark Blyth, and Craig Parsons |
| Publication: |
Ithaca, N.Y.: Cornell University Press, 2010 |
Abstract
Focusing empirically on how political and economic forces are always mediated and interpreted by agents, both in individual countries and in the international sphere, Constructing the International Economy sets out what such constructions and what various forms of constructivism mean, both as ways of understanding the world and as sets of varying methods for achieving that understanding. It rejects the assumption that material interests either linearly or simply determine economic outcomes and demands that analysts consider, as a plausible hypothesis, that economies might vary substantially for nonmaterial reasons that affect both institutions and agents’ interests.
Purchase the book: http://www.cornellpress.cornell.edu/cup_detail.taf?ti_id=5625
Re-Constructing IPE: Some Conclusions Drawn from a Crisis
| Authors: |
Rawi Abdelal, Mark Blyth, and Craig Parsons |
| Publication: |
In Constructing the International Economy, edited by Rawi Abdelal, Mark Blyth, and Craig Parsons, 227-239. Ithaca, N.Y.: Cornell University Press, 2010 |
Purchase the book: http://www.cornellpress.cornell.edu/cup_detail.taf?ti_id=5625
Government and Markets: Toward a New Theory of Regulation
| Editors: |
Edward Balleisen and David Moss |
| Publication: |
Cambridge: Cambridge University Press, 2010 |
Abstract
After two generations of emphasis on governmental inefficiency and the need for deregulation, we now see growing interest in the possibility of constructive governance, alongside public calls for new, smarter regulation. Yet there is a real danger that regulatory reforms will be rooted in outdated ideas. As the financial crisis has shown, neither traditional market-failure models nor public-choice theory, by themselves, sufficiently inform or explain our current regulatory challenges. Regulatory studies, long neglected in an atmosphere focused on deregulatory work, is in critical need of new models and theories that can guide effective policy-making. This interdisciplinary volume points the way toward the modernization of regulatory theory. Its essays by leading scholars move past predominant approaches, integrating the latest research about the interplay between human behavior, societal needs, and regulatory institutions. The book concludes by setting out a potential research agenda for the social sciences.
Creating Value through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups
| Author: |
Stuart C. Gilson |
| Publication: |
2nd ed. New York: John Wiley & Sons, Inc., 2010 |
Abstract
A collection of case studies illustrates real-world techniques, implementation, and strategies on corporate restructuring. Over the period 1981-1998, public companies with combined assets of over half a trillion dollars filed for Chapter 11 bankruptcy. Over the same period, over 400 public companies underwent corporate spin-offs, divesting businesses valued at more than $250 billion. Each of these companies, and all of these dollars, were in some way or another involved in corporate restructuring. Gilson’s case studies have been used extensively in executive programs and are perfect tools to refer to when faced with real-world corporate restructuring issues.
The Co-Mingled Code: Open Source and Economic Development
| Authors: |
Josh Lerner and Mark Schankerman |
| Publication: |
MIT Press, forthcoming |
Abstract
Discussions of the economic impact of open source software often generate more heat than light. Advocates passionately assert the benefits of open source, while critics decry its effects. Missing from the debate is rigorous economic analysis and systematic microeconomic evidence of the impact of open source on consumers, firms, and economic growth in general. This book fills that gap. In The Comingled Code, Josh Lerner and Mark Schankerman, drawing on a new, large-scale database, show that open source and proprietary software interact in sometimes unexpected ways and discuss the policy implications of these findings. The new data (from a range of countries in varying stages of development) documents the mixing of open source and proprietary software: firms sell proprietary software while contributing to open source, and users extensively mix and match the two. Lerner and Schankerman examine the ways in which software differs from other technologies in promoting economic development, what motivates individuals and firms to contribute to open source projects, how developers and users view the tradeoffs between the two kinds of software, and how government policies can ensure that open source competes effectively with proprietary software and contributes to economic growth.
What Really Motivates Workers
| Authors: |
Teresa M. Amabile and Steve J. Kramer |
| Publication: |
Harvard Business Review 88, no. 1 (January-February 2010): 44-45 |
Abstract
This essay appears in “The HBR List: Breakthrough Ideas for 2010,” which is compiled by this journal in collaboration with the World Economic Forum. The ten problems and the innovative solutions are discussed in each essay. This particular essay describes research demonstrating the importance of daily work progress, even incremental progress, for motivating workers. Additional research showed that managers underestimate the importance of facilitating progress as a motivational tool.
Read the article: http://hbr.org/2010/01/the-hbr-list-breakthrough-ideas-for-2010/ar/1
Regional Trade Integration and Multinational Firm Strategies
| Authors: |
Pol Antràs and C. Fritz Foley |
| Publication: |
In Costs and Benefits of Regional Economic Integration, edited by Robert J. Barro and Jong-Wha Lee. Oxford University Press, forthcoming |
Abstract
This paper analyzes the effects of the formation of a regional trade agreement on the level and nature of multinational firm activity. We examine aggregate data that captures the response of U.S. multinational firms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous firms from a source country decide how to serve two foreign markets. Following a reduction in tariffs on trade between the two foreign countries, the model predicts growth in the number of source-country firms engaging in foreign direct investment, growth in the size of affiliates that are active in reforming countries both before and after the tariff reduction, and an increase in the extent to which the sales of affiliates in reforming countries are directed towards other reforming countries. Analysis of firm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions.
A Detailed Analysis of the Reduction Mammaplasty Learning Curve: A Statistical Process Model for Approaching Surgical Performance Improvement
| Authors: |
Matthew Carty, Rodney Chan, Robert S. Huckman, Daniel C. Snow, and Dennis Orgill |
| Publication: |
Plastic and Reconstructive Surgery 124, no. 3 (September 2009): 706-714 |
Abstract
Background: The increased focus on quality and efficiency improvement within academic surgery has met with variable success among plastic surgeons. Traditional surgical performance metrics, such as morbidity and mortality, are insufficient to improve the majority of today’s plastic surgical procedures. In-process analyses that allow rapid feedback to the surgeon based on surrogate markers may provide a powerful method for quality improvement. Methods: The authors reviewed performance data from all bilateral reduction mammaplasties performed at their institution by eight surgeons between 1995 and 2007. Multiple linear regression analyses were conducted to determine the relative impact of key factors on operative time. Explanatory learning curve models were generated, and complication data were analyzed to elucidate clinical outcomes and trends. Results: A total of 1,068 procedures were analyzed. The mean operative time for bilateral reduction mammaplasty was 134 ± 34 minutes, with a mean operative experience of 11 ± 4.7 years and total resection volume of 1,680 ± 930 g. Multiple linear regression analyses showed that operative time (R = 0.57) was most closely related to surgeon experience and resection volume. The complication rate diminished in a logarithmic fashion with increasing surgeon experience and in a linear fashion with declining operative time. Conclusions: The results of this study suggest a three-phase learning curve in which complication rates, variance in operative time, and operative time all decrease with surgeon experience. In-process statistical analyses may represent the beginning of a new paradigm in academic surgical quality and efficiency improvement in low-risk surgical procedures.
The Desire to Win: The Effects of Competitive Arousal on Motivation and Behavior
| Author: |
Deepak Malhotra |
| Publication: |
Organizational Behavior and Human Decision Processes (in press) |
Abstract
The paper theoretically elaborates and empirically investigates the “competitive arousal” model of decision making, which argues that elements of the strategic environment (e.g., head-to-head rivalry and time pressure) can fuel competitive motivations and behavior. Study 1 measures real-time motivations of online auction bidders and finds that the “desire to win” (even when winning is costly and will provide no strategic upside) is heightened when rivalry and time pressure coincide. Study 2 is a field experiment that alters the text of e-mail alerts sent to bidders who have been outbid; the text makes competitive (vs. non-competitive) motivations salient. Making the desire to win salient triggers additional bidding, but only when rivalry and time pressure coincide. Study 3, a laboratory study, demonstrates that the desire to win mediates the effect of rivalry and time pressure on over-bidding.
The Peculiar Politics of American Disaster Policy: How Television Has Changed Federal Relief
| Author: |
David Moss |
| Publication: |
Chap. 18 in The Irrational Economist: Making Decisions in a Dangerous World, edited by Erwann Michel-Kerjan and Paul Slovic, 151-160. New York: Public Affairs Books, 2010 |
Abstract
Particularly since the 1960s, the federal government has played a significant role in financing disaster losses in the United States. The federal government may thus be thought of as providing an implicit form of public disaster insurance. However, unlike many long-standing public insurance programs, federal disaster “insurance” collects no premiums other than for flood risk. Why is public disaster relief financed differently from other forms of public insurance, such as unemployment insurance and deposit insurance? Although there are many possible explanations for this puzzle, one that deserves particular attention relates to the peculiar politics of disaster policy at the federal level and the special role that the news media appear to play in driving policy outcomes. As is well known, media coverage surges upward in the immediate aftermath of a disaster, throwing a bright spotlight on the victims, and then quickly dissipates. As a result, although the accumulated costs of disaster relief are quite high, the politics are typically played out one disaster at a time, in line with the media coverage. This dynamic appears to focus public attention more on the immediate benefits of emergency disaster assistance than on the long-term costs. Unless and until the public discussion can be reframed to look across disasters, rather than focusing on one disaster at a time, insurance-based policy reform may remain exceedingly difficult to achieve.
Cases & Course Materials
Blue Ocean or Stormy Waters? Buying Nix Check Cashing
Peter Tufano and Andrea Ryan
Harvard Business School Case 210-012
Kinecta Federal Credit Union has the opportunity to purchase Nix Check Cashing as part of their “blue ocean” strategy to reach the financially underserved and increase credit union membership and deposits. But they face financial as well as reputational risk. Check cashing, payday lending, and other alternative financial services are maligned in mainstream financial circles. This case asks students to evaluate both organizations, their respective industries, and the proposed $45 million deal and determine whether or not it makes sense for Kinecta to purchase Nix.
Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/210012-PDF-ENG
Managing Talent at Bertelsmann AG (A)
Boris Groysberg, Nitin Nohria, Mark C. Maletz, and Kerry Herman
Harvard Business School Case 410-010
Bertelsmann’s EVP HR Immanuel Hermreck and his team were focused on four key HR issues. Three of these were somewhat discreet: improving Bertelsmann’s employer brand; managing Bertelsmann talent across the firm’s decentralized businesses; and ensuring early identification and appropriate development of Bertelsmann’s top 100 high potential managers (hi-pos) to better seed the company’s future top management. The fourth issue—recruitment and retention—played an integral role across all three challenges and had to be strengthened and made consistent across the firm, not an easy prospect given Bertelsmann’s highly decentralized structure. Hermreck knew navigating these issues would pose significant challenges, but getting them right was critical to Bertelsmann’s competitive advantage and survival as a robust media company. He had some good results in from his early efforts, but as he looked forward, what should his action plan set out to do?
Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/410010-PDF-ENG
US-based company Magpul Industries (developers of the Masada rifle) recently revealed another ‘weapon’ for the military and motorcycle fans out there. The Magpul Ronin machine recently saw daylight as an experimental motorcycle project based on the Buell 1125R sport bike. 
Worried you spend too much on child seats as your kid gets older? Mercedes-Benz UK seems to have the answer for you, as the German car manufacturer has a special offer which will help parents save up to £250 on Mercedes-Benz child seats.
Yo, there’s a 
From every hint, from every 
This kitchen on wheels could be regarded by some a perfect vehicle for a lady, but then again… the best cooks out there are men. Some design studies made by automakers could pass as extravagant dream cars, and the following 1956 Cadillac Sixty Special beats them all: it contains a full-service kitchen where a front passenger should sit. 
Maserati has prepared a downsizing offer for its European clients. Fortunately, this news is not about some eco engine which has crawled under the bonnet of some Maserati. The company has chosen the Alfa Romeo Mito to be its European service network courtesy car. 
Bill Murray will spend the next several weeks hopping around on a crutch after injuring himself in a skiing accident on the slopes of Park City, Utah on Sunday.
