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Uber: Changing the Way the World Moves (B)
This is a B case written as a follow-up to the original case, Uber: Changing the Way the World Moves (316101). It describes a slew of controversial incidents besetting the company in early 2017. -
Magic: the Gathering - Harnessing an Engaged Player Community
This case study discusses Magic: the Gathering (Magic), a collectible card game that is owned by Wizards of the Coast (Wizards), a subsidiary of Hasbro. In particular, it focuses on how Wizards manages the Magic player community and its need to learn how to respond to various kinds of consumer-generated content (CGC) created by players. Magic is a collectible card game that has seen tremendous growth since its inception in 1993. By 2015 it had 20 million players worldwide and generated annual revenue of $200 million USD. Its primary revenue stream comes from selling sealed packs of Magic cards, and it releases a new set every three months. There are various types of packs available; each contains about 15 cards. Players must use these cards to construct a 60-card deck, which they use to play head-to-head against an opponent's deck. The case study describes in detail how Wizards interacts with its community. Predominantly, the company uses social media to release news, gather feedback, and respond to issues. Particularly noteworthy are how Wizards uses Spoiler Season to increase the anticipation for new card sets, and Friday Night Magic, casual tournaments at local game stores to connect players with vendors. The player community is very diverse, both in terms of age (roughly from 12 to 45 years old) and level of engagement (from occasional/casual to tournament-level, competitive players). In addition, Magic players are drawn to the game for a variety of reasons, which is illustrated by the three player types (or personas) Timmy, Johnny and Spike. This diversity is important for Wizards to keep in mind when the company develops new products, promotes its products, organizes events, and interacts with the community. -
Year Up
Gerald Chertavian, an HBS graduate and successful tech entrepreneur, founded Year Up in 2000. He sought to provide opportunity via education and job training to disaffected American youth, focusing on young people in urban areas. In 10 years, he built the company from one site with 22 students to 10 sites, successfully training 1,300 students a year. However, after three years of high unemployment in the United States, Chertavian became concerned about the growing opportunity gap and wondered whether Year Up would ever make enough of an impact. In 2011, he and his board wrestled with the question of how to address this issue, and they weighed the fate of the small but highly successful Year Up program. Chertavian and his team were considering options for scale and how to maintain the organization's model. -
The Pfizer-Allergen Tax Inversion
In November 2015, U.S.-based biopharmaceuticals company Pfizer [NYSE: PFE] and Ireland-based pharmaceutical company Allergan [NYSE: AGN] announced a $160 billion merger to move Pfizer's domicile out of the United States to Ireland in the largest inversion deal ever. The announcement came just days after the U.S. Treasury Department laid out a set of restrictions on tax inversions; however, the deal was structured to avoid those restrictions. According to the U.S. Department of the Treasury, "By undertaking an inversion transaction, companies move their tax residence overseas to avoid U.S. taxes without making significant changes in their business operations." Two primary benefits provided by inversions were: (1) the removal of a company's foreign operations and income from the U.S. taxing jurisdiction to achieve pure "territorial" tax treatment (in which income was taxed only in the country where it was earned); and (2) the reduction of U.S. taxes on income from U.S. operations through the use of various "earnings stripping strategies" (e.g., making payments of deductible interest or royalties from the U.S. entity to a new foreign parent). According to Reed College economist Kim Clausing, inversions and other income-shifting techniques reduced Treasury revenues by as much as $111 billion in 2012. -
Behavioral Strategy and the Strategic Decision Architecture of the Firm
This special issue explores the impacts of behavioral strategy on management practice. Behavioral strategy can best contribute to management practice by shifting its focus from individual decision biases to the design of behaviorally informed decision processes at the level of the firm. This introduction identifies three types of organizational decision processes, shows how they interact with individual and group biases, and proposes a model showing how managers can design and deploy these processes to shape the strategy of the firm. It then introduces the articles in this special issue and discusses their contributions to the future of behavioral strategy. -
Dismissing a Tarnished CEO? Psychological Mechanisms and Unconscious Biases in the Board's Evaluation
In today's world, CEOs are frequently dismissed following corporate misconduct or poor performance. Yet, it is often difficult to predict when boards will dismiss the CEOs, as the same behavior often results in different decisions across firms. Taking a socio-cognitive perspective, this article explores the factors that lead a CEO to become tarnished. It then uses expectancy violation theory combined with attribution theory as well as stakeholder theory, concepts of legitimacy, and motivational theory to understand how the board evaluates the tarnished CEO. -
Toehold Acquisitions as Behavioral Real Options
Dealmakers tend to neglect uncertainty when making acquisition decisions, rushing into deals that eventually fail to deliver the anticipated synergies. Cause for this uncertainty neglect can be found in behavioral biases that cloud executive decision making. Acquirers should more often use minority stakes as a toehold to test full acquisitions and to guard themselves against the negative effects of uncertainty. An extended valuation toolkit that requires more managerial attention to uncertainty and behavioral pitfalls can help executives to better identify and value the benefits of minority stake strategies as an alternative to controlling acquisitions in uncertain situations. -
Making Strategy Hot
It is often said that being a good strategist requires keeping a cool head. However, eradicating emotional influences from the strategy process is not only infeasible, it is also undesirable. Drawing on the latest advances in the science of emotion, this article explains how emotion regulation is an essential skill that executives must cultivate to ensure that their enterprises are able to adapt effectively in these turbulent times. The authors offer practical steps to help executives manage better the emotional dynamics of strategizing, which left unchecked can derail even the most carefully orchestrated of strategy processes -
Strategy as Diligence: Putting Behavioral Strategy into Practice
Researchers in behavioral strategy are producing new insights on strategic decision making. At the same time, a few pioneering companies are discovering ways to put behavioral strategy into practice. This article draws on behavioral research and strategy practice to present an approach called diligence-based strategy. In markets comprised of people rather than rational economic agents, the analysis of competitive advantages matters less than the diligent execution of fundamental activities. Diligence-based strategy offers an applied method for formulating and executing strategy in organizations, showing how managers can leverage technology and management discipline to drive business success in the twenty-first century. -
Sleepwalking into Catastrophe: Cognitive Biases and Corporate Climate Change Inertia
Despite the consensus that climate change will have huge consequences not just for the planet but also on corporate operations, businesses continue to fail to adjust their strategic decision-making processes to become more sustainable. One of the silent culprits behind climate change inertia lies in the cognitive biases at play in corporate decision making. This article builds on existing strategic decision-making models to explain how biases prevent managers from accurately identifying the moral dimensions of climate change. It also presents a broad range of practical interventions for how this constraint can be overcome. -
Strategizing with Biases: Making Better Decisions Using the Mindspace Approach
This article introduces strategists to the Mindspace framework and explores its applications in strategic contexts. This framework consists of nine effective behavioral interventions that are grounded in public policy applications, and it focuses on how changing the context can be more effective than attempts to de-bias decision makers. Behavioral changes are likely when we follow rather than fight human nature. Better decisions can be achieved by engineering choice contexts to "engage a bias" to overcome a more damaging bias. This article illustrates how to engineer strategic contexts through two case studies and outlines directions and challenges when applying Mindspace to strategic decisions. -
Addressing Barriers to Big Data
Increasingly, big data is viewed as the most strategic resource of the 21st century, similar in importance to that of gold and oil. While sitting on these vast pools of data, many organizations are simply not ready to take advantage of this new strategic resource. Embracing big data requires addressing a number of barriers that fall into the domains of technology, people, and organization. A holistic, socio-technical approach is required to overcome these barriers. This article introduces the specific tactics we recommend for addressing big data barriers, which involve changes to technology infrastructure, a focus on privacy, promotion of big data and analytic skills development, and the creation of a clear organizational vision related to big data. -
Big Data: Dimensions, Evolution, Impacts, and Challenges
Big data represents a new technology paradigm for data that are generated at high velocity and high volume, and with high variety. Big data is envisioned as a game changer capable of revolutionizing the way businesses operate in many industries. This article introduces an integrated view of big data, traces the evolution of big data over the past 20 years, and discusses data analytics essential for processing various structured and unstructured data. This article illustrates the application of data analytics using merchant review data. The impacts of big data on key business performances are then evaluated. Finally, six technical and managerial challenges are discussed. -
Better Safe Than Sorry: Why Organizations in Crisis Should Never Hesitate to Steal Thunder
When organizations are confronted with a crisis, they sometimes have the opportunity to decide whether or not to disclose that information. Organizations may hesitate to reveal such negative events out of fear of drawing unnecessary attention to the crisis, legal liability, or other related problems. The aim of this article is to discuss the pros and cons of self-disclosure and to offer tools to public relations practitioners that will help convince management of the advantages of self-disclosure in a time of crisis-what has been labeled stealing thunder. Research repeatedly has illustrated several valuable ways in which the self-disclosure of crises can benefit organizations in trouble, the most important of which is that it allows organizations to behave in an ethical manner. The article also lists and refutes several arguments often given in favor of crisis concealment and aims to clarify why organizations should never hesitate when they have the opportunity to self-disclose a crisis. -
The Criticality of CMO-CIO Alignment
This year, chief marketing officers (CMOs) will spend more money on IT than chief information officers (CIOs). This rapid shift in responsibility is creating a growing divide between CIOs and CMOs over firms' IT investment decisions and actions, which is of increasing significance to firm performance. Understanding and managing this CIO-CMO divide is important in light of the magnitude of investment involved-global IT spending is estimated to exceed $4.1 trillion by 2018-and CEOs' belief that technology is a critical success factor for future firm performance. Heretofore, there has been little investigation regarding the unique relationship between the CMO and CIO. The research reported herein addresses this shortcoming by revealing the results of in-depth interviews with CMOs and CIOs across multiple industries. The results identify the nature and sources of conflict between the two roles as well as the management-related mechanisms to overcome them, revealing the need for CEOs to focus on managing four specific sources of CMO-CIO conflict: perspective, goals, accountability, and structural conflict. While the CEO has the power to create the management-related mechanisms that promote greater CMO-CIO alignment, we also detail steps that the functional leaders can take to put the mechanisms in place should the CEO fail to do so. -
Upstream Social Marketing Strategy: An Integrated Marketing Communications Approach
This article provides an organized approach for managers to develop social marketing strategies that target upstream decision and policy makers. A conceptual application model and five-stage process is presented for an upstream social marketing strategy based on integrated marketing communications (IMC). IMC concepts are described in the context of social marketing, as well as specific stages for creating an IMC social marketing strategy; these include target audience research and determination, channel selection and integration, strategic message creation, and measurement and control. A central and novel feature of the IMC social marketing strategy model is the simultaneous targeting of an upstream decision maker and influential peripheral (upstream) audiences in order to triangulate and increase campaign effectiveness. An IMC approach to upstream social marketing ensures consistent, persuasive messages specifically crafted for the selected target audiences and coordinated through precise channels to maximize impact. This multi-channel, multi-audience approach to message creation and channel selection produces synergies that increase the potential to influence an upstream decision/policy maker. -
Strategic Shifts that Build Executive Leadership
Organizations are challenged to develop leaders who can think strategically about the business and solve systemic problems. How can mid-level leaders develop this capability? Herein, we describe five strategic shifts in perspective that are essential for mid-level managers in transitioning successfully to strategic leadership positions. All five shifts improve mid-level leaders' ability to look beyond tactics to see wider opportunities and enable strategic impact. The shifts are iterative and build on each other. We offer a new model that guides managers in shaping strategic leaders using these five perspective shifts to impact the organization positively and substantially. Further, we provide specific techniques that mid-level managers can employ to shift their perspectives and build personal strategic capabilities. Finally, we share specific 'Try It' exercises that mid-level managers can engage in to learn about the proffered concepts. -
Combining Performance, Learning, and Behavioral Goals to Match Job with Person: Three Steps to Enhance Employee Performance with Goal Setting
While there have been many articles written on the advantages and techniques of goal setting, there has been far less written to guide practicing managers on how to put this powerful motivational tool to work. This article offers a three-step process that begins by identifying the combination of performance, learning, and behavioral goals to best match the unique knowledge, skills, and abilities of the employee to the task requirements of the job. Once this best-goal combination has been determined, the manager's letter, a managerial tool developed by Peter Drucker, is presented as a well-accepted process for implementing a goal-setting strategy that emphasizes employee participation. The third step in the implementation of a goal-setting strategy is to introduce subconscious primes that can reinforce the value offsetting performance, learning, and behavioral goals. -
Emergency Business Management and Internet Connectivity
Many technology experts believe the internet cannot be shut down as it was built by the military to be redundant. Organizations have accepted this premise and generally do not have the means to ensure continuing connectivity in the face of disruption. As early as 1997, however, the internet did experience disruption, leaving millions of users disconnected. It is argued that because the internet has been embedded into all business operations it is necessary for managers to review their policies regarding continued connectivity should a disruption occur. In this article I offer several practical suggestions regarding how managers can continue to operate critical processes in the face of short or extended internet outages. Further, I suggest that a view of corporate data processes based on traditional accounting perspectives needs to be revised to consider these data processes as a matrix interacting across customer, vendor, employee, and human interfaces. -
Nearshoring, Reshoring, and Insourcing: Moving Beyond the Total Cost of Ownership Conversation
As firms from across all manufacturing sectors are rethinking their outsourcing and offshoring strategies, there is the potential for a manufacturing renaissance in the U.S. The findings from this case study suggest that the current manufacturing relocation shift is not perceived by manufacturers as a long-term business strategy (as outsourcing has been). As such, the results suggest that manufacturing relocation decisions based exclusively on models such as total cost of ownership (TCO) will not deliver anticipated near-term costs savings. In addition to TCO, firms must have access to information concerning the complexity of the outsourced manufacturer's manufacturing and supply chain processes in order to fully evaluate the 'as-is' outsourced function against 'to-be' manufacturing relocation opportunities.