Friday, August 29, 2014

Why We Don't Seek Advice, but We Should!

When you face a difficult situation at work, do you seek advice from others?   Do you consult with them before making a decision?   Alison Brooks, Francesca Gino, and Maurice Schweitzer have written a new working paper about the process of seeking advice from others.  These scholars found that many individuals do not seek advice from others, because they do not want to look incompetent or incapable.  They fear that others will perceive advice-seeking as a sign of weakness.  Brooks, Gino, and Schweitzer then asked:  What do others think of you when you seek advice from others?  How do you they actually perceive you?  They found that people tend to view advice-seekers as more competent than those who do not garner input and counsel from others.  The scholars refined these findings further by examining the situations in which people view advice-seekers most favorably.  They found that we have a more favorable view of advice-seekers when the situation is difficult (as opposed to simple), and when people consult with experts (rather than non-experts).  Perhaps most interestingly, an individual has a more favorable view of an advice-seeker when that person came to him or her for that counsel, rather than going to others.  Aha!  So, what really impresses us is when others somehow think we are important/knowledgeable/wise.  That should not surprise us at all!

Thursday, August 28, 2014

Social Media and the Reluctance to Speak Up

The New York Times reported this week that Pew Research and scholars at Rutgers University have published a study on the so-called "spiral of silence."  That phrase refers to the tendency people have to not discuss their political views in public because they fear a clash of opinion with close friends, work colleagues, etc.   Keith Hampton and his co-authors examined whether the "spiral of silence" applied in the world of social media.  In other words, does social media help stimulate debates about public policy issues?   They examined the behavior of 1,801 adults with regard to one major news story: National Security Agency contractor Edward Snowden's disclosures about surveillance programs in the United States.   The scholars discovered a discussion about this controversial public policy issue was less likely to occur via social media than in person.  Moreover, the individuals who were reluctant to discuss the issue in-person with others did not view social media sites such as Twitter and Facebook as better places to share their views. They also were reluctant to speak up via social media.  The people who do share their views tended to be those who have a strong belief that their friends and followers on social media are like-minded on these public policy issues.  Of course, the study only examined one public policy issue, but the findings should cause us to think about social media's effect on public debate.  To the extent that discussion occurs via these platforms, is it often simply a dialogue among like-minded people?  

Tuesday, August 26, 2014

Do We Favor Quick Decisive Leaders and Penalize Slower, Deliberative Thinkers?

Stanford Professor Zakary Tormala, doctoral student Daniella Kupor, HBS Professor Michael Norton, and Kellogg Professor Derek Rucker have conducted some new research about how we react to the decision processes of others.  They asked the question:  Do we favor those who we perceive as quick decisive leaders and form less favorable impressions of those who engage in a slow, deliberative thought process?  Their research suggests that the answer is not black and white. Our impressions depend upon the situation.  If someone faces a very challenging decision, then we look for and are impressed by a thoughtful, comprehensive decision-making process.  On the other hand, if someone faces a very easy choice, then we think less favorably of that person if he or she labors over the decision.  In short, we want to see people match the comprehensiveness of the decision process with the complexity of the situation.   The Stanford story about this research summarizes the main conclusion as follows: "In general, people seem to be less drawn to and less open to being influenced by individuals who overthink small decisions or 'underthink' big ones." 

Monday, August 25, 2014

Should Burger King Acquire Tim Horton's? Does This Deal Make Sense?

The Wall Street Journal reports that Burger King is pondering an acquisition of Canadian coffee/donut chain Tim Horton's.   The newspaper reports that the firms may be pursuing "a so-called tax inversion and move the hamburger seller's base to Canada."   Recently, tax inversions have been on the rise, as firms establish headquarters overseas in an attempt to lower their overall tax burden.   The newspaper reports, "A move by Burger King to seal one is sure to intensify criticism of them, since it is such a well-known and distinctly American brand."  I found that sentence particularly funny, given that Burger King has been owned by a foreign company in the past!  Diageo, the UK-based producer of alcoholic beverages such as Guinness, Smirnoff, and Johnnie Walker, owned Burger King until 2002. 

Putting aside the political debate about tax inversions, let's take a look at whether this deal makes strategic sense.   Are there sufficient synergies to justify a deal between Burger King and Tim Horton's?  I'm skeptical.  Why?  For years, Wendy's - a primary competitor to Burger King - owned the Tim Horton's chain.  Under investor pressure, they ultimately divested the coffee/donut chain.  Why?  Investors argued that the sum of the parts exceeded the whole.  In other words, Tim Horton's was more valuable on its own than as a part of Wendy's.  Given that history, what makes us think that Tim Horton's will now be more valuable as part of Burger King than it is on its own?   I believe that management at Burger King will have to make this case to persuade investors and other analysts/observers that this deal makes sense. 

Saturday, August 23, 2014

Do Good, Be Happy... with a Caveat

In this article, Stanford University reports on a stream of scholarly work that shows how acts of kindness toward others enhances personal happiness.  Stanford Professor Jennifer Aaker calls it the "helper's high."  Her recent research, with Melanie Rudd and Michael Norton, examines how to optimize that "helper's high."  Their work shows that setting concrete philanthropic goals works much more effectively than establishing abstract objectives. Aaker explains, "This insight is important because nearly all of us are trying to make other people in our lives happy. Parents often say they just want their kids to be happy. Equally common is a desire to make our partners, family members, and friends happy, but few of us know exactly how to bring happiness to the people in our lives. Our new research sheds light on what we can do.”

The researchers examined this issue of concrete vs. abstract goals with a simple experiment.  They gave experimental subjects $5 Amazon gift cards in exchange for the performance of an act of kindness.  One-half of the subjects were asked to make someone else happy; the others were asked to try to make someone smile.  The former represents an abstract goal; the latter serves as a more concrete objective.  Those asked to make someone else smile indicated they experienced more personal happiness than those instructed to make someone happy. It did not matter what method any of the subjects used to try to make others happy or to make others smile. 

Speaking of how performing acts of kindness can make you happier, check out this story about "paying it forward" at Starbucks:

Friday, August 22, 2014

Adaptation in Global Strategy

We've been discussing different types of globalization strategy with my students here in France.  We read Pankaj Ghemawat's classic article in which he discusses three different types of global strategy: adaptation, aggregation, and arbitrage.  Adaptation is when firms modify their strategies and products/services as they move to different markets around the world.   Aggregation is when firms standardize their products/services, striving to exploit global economies of scale.  Arbitrage is when firms try to take advantage of factor market differences across nations, so that they can achieve cost efficiencies (e.g., outsourcing to low cost labor nations).   Ghemawat argues that firms must choose which of these strategies will be their priority.  He also argues that it's difficult to pursue all three strategies with equal emphasis, as these distinct strategies require quite different organizational structures and processes.  

We compared two interesting case studies this week in class.  On Wednesday we examined L'Oreal, a French company that has expanded successfully across the world.  L'Oreal has pursued an aggregation strategy, selling a product developed in one nation across many markets around the world... while marketing it often quite explicitly with the home nation branding and positioning. For instance, L'Oreal acquired the Maybelline brand and sold it through an "American beauty" positioning in markets around the world.  Likewise, the sold the L'Oreal brand with a positioning of "Parisian or French beauty" across the world.  By contrast, Thursday's case focused on a firm that has emphasized adaptation in its global strategy.  We analyzed how Canadian-based hotel firm Four Seasons came to Paris.  They had to adapt in order to succeed in the French market. 

I see two lessons from this interesting comparison between L'Oreal and Four Seasons.  First, Four Seasons did indeed adapt, yet they were quite explicit about the core practices and values that would remain constant.  That enabled them to protect their brand and their organizational culture.  Before firms embark on global adaptation strategies, I believe that it's quite useful to outline explicitly what the "non-negotiables" are... i.e., what are the core standards and values that will be applied globally.  That helps protect the brand, and it minimizes conflict between the home office and the local country managers, since everyone understands what the core beliefs are.  

Second, I think the L'Oreal case illustrates that certain products are more conducive to an aggregation strategy.  In other words, some products don't need to be adapted substantially when sold around the world.  In fact, global consumers don't want the product to be adapted.   For instance, consumers around the world want to buy French luxury goods, Heineken beer, etc.    The country of origin conveys a premium image that enables the firm to sell their goods globally at a premium price.  Some other goods and services simply are not conducive to such global expansion.  They require adaptation; firms have no choice.  Many food categories, for instance, fall into this category.  

Wednesday, August 20, 2014

Ice Bucket Challenge

My students and I have taken the Ice Bucket Challenge.   We are here in Aix-en-Provence, and we took the challenge right on the street amidst a number of perplexed folks on the street!   We are very proud to support the ALS Association and encourage others to donate as well.