by Sonia Bhalotra, Irma Clots-Figueras, and Lakshmi Iyer
Executive Summary — Many explanations have been put forward to explain the gender gap in executive positions in finance, business, and politics. However, scholars know surprisingly little about the effects of exposure to women who are competitively selected into leadership positions. Focusing on India, the world's largest democracy, the authors obtained data on elections to state legislative assemblies in 3,473 constituencies from the Election Commission of India over the period 1980-2007 in which most states had six elections. They used data for the 16 major states of India which account for over 95 percent of the total population. The authors identified a large and significant increase in the subsequent share of women candidates fielded by major parties in Indian state elections. The increase arises mainly from an increased propensity for previous candidates to run for re-election, rather than the entry of new women candidates. Given that a substantial fraction of incumbents in Indian state elections do not re-run and female incumbents overall are less likely to re-run than male incumbents, this is an important result. There is, however, no significant increase in the probability that a woman wins the next election. Consistent with this, the estimated impact on women's candidacy fades over time although a significant impact persists through two elections, which is a period of 10 years. Overall, this study makes clear that it is important to identify the extent to which a spontaneous dynamic operates in launching women into the political sphere when quotas are absent. Key concepts include:
- In India, parties appear willing to change their prior opinion of the viability of women candidates after observing a woman win an election.
- The electoral victory of a woman results in a large and significant increase of 9.2 percentage points in the fraction of female candidates fielded by major parties in subsequent elections in the same constituency.
- The increase in women's candidacy is driven primarily by the increased propensity of prior candidates to contest again. There is no significant increase in the entry of new female candidates.
- Further economic, institutional or policy incentives are needed to stimulate entry of new women into the political arena and more widespread participation of women as voters.
This paper analyzes the effect of a woman's electoral victory on women's subsequent political participation. Using the regression discontinuity afforded by close elections between women and men in India's state elections, we find that a woman winning office leads to a large and significant increase in the share of female candidates from major political parties in the subsequent election. This stems mainly from an increased probability that previous women candidates contest again, an important margin in India where a substantial number of incumbents do not contest reelection. There is no significant entry of new female candidates, no change in female or male voter turnout, and no spillover effects to neighboring areas. Further analysis points to a reduction in party bias against women candidates as the main mechanism driving the observed increase in women's candidacy.Paper Information
Poll after poll demonstrates that Americans have a diminishing level of trust in their government. New research from Ryan W. Buell and Michael I. Norton suggests at least one way that it can be reclaimed: Show constituents all the good government can do. In an experiment in Boston, participants had increasingly positive attitudes once they saw how government services such as street repair improved the community. "The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale," report the authors. See their working paper, Surfacing the Submerged State with Operational Transparency in Government Services.Tesla Motors drives forward
A number of startups have attempted new-car ventures in the US and bombed—DeLorean, anyone? Now Tesla Motors may become the first company since WWII to successfully mass produce not only a car, but and an electric one at that. The new case "Tesla Motors" by Eric Van den Steen looks at the company's successes and failures and its lofty aspirations for the future. Dell's board considers an offer from the company founder Michael Dell famously started Dell Computer in his dorm room, quickly growing the company to one of the largest PC companies in the world. By 2013, the story was much different, as Dell attempted to take the company private against objections of activist investor Carl Ichan. The case "Taking Dell Private," by David J. Collis, David B. Yoffie, and Matthew Shaffer, offers students a chance to look at the situation from the board's points of view, as it decides the future of the company.
— Sean SilverthornePublications
- August 2013
- American Economic Journal: Macroeconomics
Abstract—We provide one of the first empirical evidence consistent with recent macro global-game crisis models, which show that the precision of public signals can coordinate crises (e.g., Angeletos and Werning, 2006; Morris and Shin, 2002, 2003). In these models, self-fulfilling crises (independent of poor fundamentals) can occur only when publicly disclosed signals of fundamentals have high precision; poor fundamentals are the sole driver of crises only in low precision settings. We find evidence consistent with this proposition for 68 currency and systemic banking crises in 17 countries from 1983 to 2005. We exploit a key publicly disclosed signal of fundamentals that drives financial markets, namely accounting data, and find that pre-crisis accounting signals of fundamentals are significantly lower only in low precision countries.
Publisher's link: http://ssrn.com/abstract=1160416
Working Papers Path-Breakers: How Does Women's Political Participation Respond to Electoral Success? By: Bhalotra, Sonia, Irma Clots-Figueras, and Lakshmi Iyer
Abstract—This paper analyzes the effect of a woman's electoral victory on women's subsequent political participation. Using the regression discontinuity afforded by close elections between women and men in India's state elections, we find that a woman winning office leads to a large and significant increase in the share of female candidates from major political parties in the subsequent election. This stems mainly from an increased probability that previous women candidates contest again, an important margin in India where a substantial number of incumbents do not contest reelection. There is no significant entry of new female candidates, no change in female or male voter turnout, and no spillover effects to neighboring areas. Further analysis points to a reduction in party bias against women candidates as the main mechanism driving the observed increase in women's candidacy.
Download working paper: http://ssrn.com/abstract=2350805Surfacing the Submerged State with Operational Transparency in Government Services By: Buell, Ryan W., and Michael I. Norton
Abstract—As Americans' trust in government nears historic lows, frustration with government performance approaches record highs. One explanation for this trend is that citizens may be unaware of both the services provided by government and the impact of those services on their lives. In an experiment, Boston-area residents interacted with a website that visualizes both service requests submitted by the public (e.g., potholes and broken streetlamps) and efforts by the City of Boston to address them. Some participants observed a count of new, open, and recently closed service requests, while others viewed these requests visualized on an interactive map that included details and images of the work being performed. Residents who experienced this "operational transparency" in government services-seeing the work that government is doing-expressed more positive attitudes toward government and greater support for maintaining or expanding the scale of government programs. The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale. We further demonstrate that positive attitudes about government partially mediate the relationship between operational transparency and support for maintaining and expanding government programs. While transparency is customarily trained on elected officials as a means of ethical oversight, our research documents the benefits of increased transparency into the delivery of government services.
Download working paper: http://ssrn.com/abstract=2349801Cases & Course Materials
- Harvard Business School Case 714-417
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- Harvard Business School Case 714-421
In July 2012, Michael Dell, CEO and founder of Dell, Inc., met with a representative of Silver Lake Partners to explore taking his company private. The company, which he had founded in his dorm room as a college freshman and which had made him the youngest Fortune 500 CEO in history, had been the market leader in PC sales in the early 2000s. In recent years, however, competitors had surpassed the company, and, worse, the PC market was becoming less lucrative due to overseas competition, longer turnover rates on PCs, and the rise of tablets and smartphones. Michael Dell hoped to respond by shifting the company from its core to a "new Dell" based around "Enterprise Solutions and Software" (such as servers, consulting, and software-as-a-service) and now claimed he needed to take the company private to do so. By the summer of 2013, the Dell board and its shareholders would have to decide whether to accept his offer to take the company private for $13.65 a share. Meanwhile, Carl Icahn bought a large stake in Dell, Inc., accused Dell of trying to steal the company, and urged shareholders to rebel and demand a "leveraged recapitalization" instead. This case presents the information the Dell board worked with as it debated its decision.
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- Harvard Business School Case 514-021
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- Harvard Business School Case 314-034
Knowledge management is a subject of broad interest, especially in "knowledge industries" and "knowledge economies." It is also a topic filled with frustration on the part of practitioners, and the level of resource commitment to this function waxes and wanes. This note focuses on a sector where knowledge is the very basis of its offering-professional service firms. One element of competitive success is the extent to which a professional service firm can harness and increase the knowledge of its professionals, making knowledge of individuals an asset of the firm. Historically the focus has been on "codification" with a focus on IT applications. More recently, with Web 2.0, there is an increasing emphasis on collaboration so that individuals are interacting with each other, not simply documents. This note, based on extensive interviews in more than 20 professional service firms, describes the knowledge management challenge in professional service firms and how to address it. The note traces the history of knowledge management in professional service firms, examines the current state of practice, and speculates about possible future directions in which it will evolve.
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- Harvard Business School Case 914-013
Morning Star, a collection of affiliated companies, had grown steadily since 1970 when Chris Rufer, president and founder, started the business hauling tomatoes to processing plants in a truck. The company's main products continued to be tomato-based, including a 40% share in the tomato paste and diced tomato market in 2013. Different from traditional manufacturing companies, Morning Star relied on self-management to execute the work in any part of the organization. The company was built on individual freedom, with the expectation that employees would take responsibility for holding their peers accountable and address performance failures directly. The case explores how the company can establish a compensation model that fairly compensates employees for their performance and provides a broad incentive to hold others accountable, while being consistent with self-management. This case includes color exhibits.
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- Harvard Business School Case 314-043
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- Harvard Business School Case 814-022
This is the syllabus and course outline for "Entrepreneurship in Healthcare IT and Services (EHITS)," taught by Professor Bob Higgins in the fall of 2013. Contains the course overview, objectives, goals, and themes.
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- Harvard Business School Case 213-134
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- Harvard Business School Case 714-413
In mid-2013, Tesla Motors was riding a wave of success: it had launched its first really mass-produced car-the model S-to rave reviews; had recently raised first-year production targets; and had started taking orders for its next car, the Model X. Tesla seemed to be on its way to defy the skeptics and become the first U.S. company to enter the car industry with a mass-produced car since WWII and the first to successfully launch a fully electric car. Or was it not?
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When Harvard Business School Associate Professor Francesca Gino invites high-powered business leaders to address her class, she often observes an interesting phenomenon. The guest speakers announce that they are just as interested in learning from the students as teaching them, and encourage them to ask questions and make comments. In reality, however, the speakers often do the opposite—dominating the time and not allowing for much discussion at all.
"As professors we do this too," admits Gino. "It's very difficult when think you have the right answer not to put it out there." At the same time, she has observed, by hogging the discussion, these leaders not only limited their own learning but also made the class less productive as a whole.
Gino wondered if the same dynamic could be occurring in business, with dominating leaders stifling creative ideas that might otherwise emerge from group discussions and making the teams less productive.
The observation would run counter to the way we usually think about group dynamics—surely, a strong leader naturally improves the functioning of the team. Together with Leigh Plunkett Tost of the University of Michigan and Richard P. Larrick of Duke University, Gino explores this question in When Power Makes Others Speechless: The Negative Impact of Leader Power on Team Performance, forthcoming in the Academy of Management Journal.
In a series of studies, they found that when leaders were focused on their own sense of power, they can hurt the performance of their teams—but with an important catch. The effects only occur when leaders are actually in a position of power.
Gino and her colleagues differentiate between a "subjective sense of power," when someone believes they have control over others, and actual power, when someone has formal authority over how resources are allocated or how decisions are made. The two often go hand in hand, but not always. Sometimes in a group situation without a formal leader, for example, a leadership role can be assumed by a person who believes he or she has superior knowledge or skills.UP THE MOUNTAIN
Gino, Larrick, and Tost tested this dynamic in a simulation involving people planning an imaginary climb up Mount Everest. The team consisted of different specialists—including a professional climber, a doctor, and a photographer—each of whom scored points according to how many of their individual goals were met.
For each group, the researchers designated a formal leader. In some cases they created feelings of power by asking the leaders to write about a time when they held control over others; in other cases, they didn't.
The results were striking. The "high-power" leaders who had done the writing exercise dominated the discussion, talking for 33 percent of the time, while the "neutral-power" leaders talked almost half as much, 19 percent. As a result, the first group of leaders missed important clues, such as information from the doctor about the oxygen running low or opportunities by the photographer to earn more points if they stayed an extra day at a certain base camp.
In those cases, the team as a whole suffered as well, achieving an average of 59 percent of the goals in the first group, compared to 76 percent in the second group.
"Even subtle ways of making people feel powerful have powerful effects on behavior," concludes Gino.
In a separate study that tested a group's ability to solve a murder mystery, however, Gino and her colleagues found that individuals in some situations aren't always so easily cowed. For this study, in which individual team members held different clues essential to solving the mystery, the researchers used two variables—in some cases, appointing a formal leader and in some cases not; and in some cases, priming individuals to feel powerful and in some cases not.
They found that in cases when someone felt powerful but was not recognized as being in a position of authority, team members were able to override that person's domination of the conversation and add their own input. Of the four groups, the two without a formal leader had the same performance, solving the mystery about 60 percent of the time. But the groups with a formal leader who was also primed to feel powerful did the worst, getting the right answer only about 25 percent of the time.
Surprisingly, however, the best groups were those who had formal leaders not influenced ahead of time to feel powerful—they solved the mystery nearly 80 percent of the time.
"My sense is that the leader is sort of stepping back," says Gino. "It's more of what you like to see, where the leader is orchestrating the conversation, but everyone is talking."
In other words, strong leaders can improve team performance, but only when they go into a situation with a sense of humility about their own relative power.REINFORCING THE MESSAGE
The researchers expanded on that point in the last study, in which participants were asked to play the role of a management team tasked with advising the CEO on which CFO candidate to hire. In this case, the researchers appointed a formal leader for each group and primed some, but not all, to feel powerful. In half of the cases, however, they also performed a simple intervention, reminding the group leaders that each participant had unique insights to contribute.
In cases when this intervention occurred, the groups with high-power leaders did the best, coming up with the right answer an average of 60 percent of the time, slightly better than neutral-power leaders without intervention (56 percent) and neutral-power leaders with intervention (50 percent).
All three groups, however, blew away the high-power leaders who lacked intervention reminding them to listen to others—getting the answer 0 percent of the time. That suggests a powerful opportunity to improve performance just by making leaders aware of the dangers of hogging airtime in a discussion.
"I want to believe that oftentimes we behave the way we do because we are not aware of the effects of our actions," says Gino. "Bringing this type of awareness to leaders walking into group decision-making situations could set up a different process whereby they benefit from what others have to offer."
These findings don't let non-leaders in groups off the hook, however. Being aware of the negative effects generated by an overpowering leader can make non-leaders feel more empowered to assert their own point of view—whether or not the person dominating the conversation is a formal leader.LIFE AND DEATH
The Gino team has started a new study, observing group decision-making situations in the field. Focusing on the health-care industry, they are experimenting with interventions to help improve outcomes in situations in which doctors—never known to be shy about exercising power—collaborate with medical colleagues in situations with real-life effects on patients.
If anything, the results should be more dramatic than the earlier experimental studies, where prompts were used to create feelings of power in group members. In these real-life situations under study, the doctors come fully equipped with a sense of power ingrained in them by having wielded authority over others for years.
Getting leaders to listen to others and to facilitate a productive group discussion in those circumstances would be powerful indeed.About the author
Michael Blanding is a staff writer for Harvard Business School Working Knowledge.
Twitter soared high on its first day of trading on Nov. 7, with its shares closing the day at $45 for a value of $25 billion. Even though TWTR has yet to make money, investors flocked to the stock in droves, eager to own a part of the company that has revolutionized the way people around the world communicate and made abbreviations like RT (retweet) and ICYMI (in case you missed it) part of the lingo of Twitter users everywhere. What to make of all this? Senior Lecturer Chet Huber, who joined the School's General Management unit after 37 years at General Motors and teaches a popular elective focusing on disruptive technologies, offers his analysis of the Twitter IPO phenomenon.
In our second-year MBA elective Building and Sustaining a Successful Enterprise (a course developed by my colleague Clay Christensen), one of the concepts we study is new market disruption. Twitter exemplifies that term, allowing its users to "consume" information in ways that were formerly unavailable to them due to cost, complexity, or both. The fact that half a billion consumers willingly engage on Twitter's platform confirms the viability of the "job" they're being "hired" to perform, providing opportunities for real-time conversations and engagement to people around the world.
The company has accomplished this by taking advantage of the modular nature of today's ubiquitous communications infrastructures provided by the Internet and wireless data networks, whose massive investments and standard interfaces have allowed Twitter to focus on their unique plug-and-play component. Beyond that, they have created impressive and scalable operating capabilities of their own though an impressive combination of resources and processes. They have built it, and others have come—in high volume.
So far, so good. What's missing is the confirmation of a profit formula that turns volume into serious cash. Another theory we think about in new growth situations is something we call "good money/bad money." It asserts that in the early stages of an enterprise, when the business model and profit formula are not clear, investors represent good money if they're impatient for confidence in the emerging idea's profit model and patient for growth while that's being figured out.
Scaling before having a viable profit formula commits resources to a path with high risks to capital, but more important, risks committing to an approach that may need to fundamentally change—something that is harder to accomplish at scale. That said, the pursuit of coveted "network effects," with winner-take-all rewards to the dominant platform and a high number of users, argues for getting big fast and figuring the profit part out later. The concept is overused, but it's in play here, and the market, at least for now, is applauding loudly—to the tune of a market capitalization of some $25 billion at the close of the first day of trading last Thursday.
Where does this go? Only one thing is for sure, the underlying forces that we call disruption are already at work in this relatively new category that has anointed Twitter as the leader of the pack. Sustaining a successful business position generally requires two things: having a successful position and being able to leverage its viability in an adaptive fashion to meet the challenges presented by new, disruptive insurgents. In this case, figuring out that model while others are building new ones to attack it under the glare of incredibly high investor expectations should make for a lot of interesting times ahead. My colleagues and I will be watching closely, along with 500 million or so other users and observers.