First Look: August 10

Publications

Adverse Selection in Online 'Trust' Certifications and Search Results

Abstract

Widely used online "trust" authorities issue certifications without substantial verification of recipients' actual trustworthiness. This lax approach gives rise to adverse selection: the sites that seek and obtain trust certifications are actually less trustworthy than others. Using an original dataset on web site safety, I demonstrate that sites certified by the best-known authority, TRUSTe, are more than twice as likely to be untrustworthy as uncertified sites. This difference remains statistically and economically significant when restricted to "complex" commercial sites. Meanwhile, search engines create an implied endorsement in their selection of ads for display, but I show that search engine advertisements tend to be less safe than the corresponding organic listings.

Least-Cost Avoiders in Online Fraud and Abuse

Abstract

Web users face considerable fraud, malfeasance, and economic harm that system operators could prevent or mitigate. Although the legal system can respond, regulations have mixed results. I examine the applicable legal rules that constrain online fraud and the economic underpinnings to identify whether those rules assign responsibility to the parties best positioned to take action.

When Should a Platform Give People Fewer Choices and Charge More for Them?

An abstract is not available at this time.

Read this article: https://www.competitionpolicyinternational.com/when-should-a-platform-give-people-fewer-choices-and-charge-more-for-them.htm

Institutionalizing Self-Regulation: The Effect of Commitment, Threat and Surveillance

Abstract

This article theorizes and tests empirically the conditions under which organizations' internal compliance structures are particularly likely to shape their compliance practices and outcomes. We argue that the institutionalization of these structures depends on the extent to which the legal environment can foster organizations' normative motivations to self-regulate without compromising deterrence. We find that facilities with a demonstrated commitment to compliance are more likely to institutionalize self-regulation. We also find that self-regulation is more likely to be institutionalized by organizations that adopt it within a highly scrutinized regulatory environment but absent in a direct regulatory threat.

The Quest for the 'Holy Grail' of Integrated Financial and CSR Reporting

An abstract is not available at this time.

Read this article: http://www.responsible-investor.com/home/article/one_report

Cases & Course Materials

The Shaw Group Inc.: Entrepreneurial Innovation

Lynda M. Applegate and Edward Watson
Harvard Business School Case 810-135

The case describes the founding and evolution of the Shaw Group through acquisition. The case is set at the time that the company is redesigning its business processes, organization, and information technology infrastructure to support aggressive growth and increased complexity.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/810135-PDF-ENG

Live Nation Faces the Music

Stephen P. Bradley, Frank V. Cespedes, and Kerry Herman
Harvard Business School Case 709-441

In 2008, concert producer and promoter Live Nation faces a decision about its strategy in light of the tumultuous changes in the music industry and the increasing power of the major artists. As the music business once again recreates itself in response to new technologies and consumer needs, this major player is considering focusing on its principal business of concert booking and related revenue or moving forward with its efforts to take advantage of new opportunities in the music industry by forging comprehensive, and often expensive, relationships with artists and other clients.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/709441-PDF-ENG

Sony and the JK Wedding Dance

John Deighton and Leora Kornfeld
Harvard Business School Case 510-064

Executives at Sony Music Entertainment faced a dilemma: a user-generated video featuring controversial artist Chris Brown's music was netting millions of views per week on YouTube. Sony held the copyright to the song and was entitled to issue a takedown notice to the party that uploaded the video. How should Sony act? This case looks at the issues faced by marketers in an environment in which consumers disseminate content without the assistance, or approval, of gatekeepers.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/510064-PDF-ENG

Vereinigung Hamburger Schiffsmakler und Schiffsagenten e.V. (VHSS): Valuing Ships

Benjamin C. Esty and Albert Sheen
Harvard Business School Case 210-058

After booming for more than five years, the global shipping (maritime) industry experienced a dramatic crash in late 2008 as the global financial system froze and the global economy slid into recession. Ship charter rates (revenue) fell by as much as 90% causing prices of used ships to fall by as much as 80%. As ship prices (values?) fell, ship owners began to default on loans and new purchase contracts while banks holding loans secured by ships faced the possibility of increasing defaults (violations of loan-to-value covenants), foreclosures, and write-offs. In the midst of this crisis, VHSS, the German Shipbroker's Association, introduced a proposal to value ships using discounted cash flow analysis (to determine a long-term asset value, LTAV) rather than market prices from comparable transactions. Thomas Rehder, the chairman of VHSS, argued this approach was necessary because market prices did not reflect fundamental values in the current environment. After announcing the alternative valuation methodology in September 2009, he must convince industry participants-ship owners, appraisers, and bankers-to adopt the new valuation methodology and bank regulators and auditing firms to approve its use.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/210058-PDF-ENG

Scooter Lindley: The Formation Call

Lena G. Goldberg
Harvard Business School Case 310-036

Factors affecting decision making about appropriate types of business entities are explored in the context of advising a prospective investor with particular emphasis on why LLCs are increasingly "go-to" entities. The potential effect of choice of organization on litigation outcomes is illustrated using the Delaware Chancery Court's decision in Fisk Ventures, LLC v. Segal, 2008 WL 1961156 (May 7, 2008) and the practical implications of the differences between unincorporated and corporate entities are highlighted.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/310036-PDF-ENG

Barclays Wealth: Reignite WAR or Launch AlphaStream?

Lena G. Goldberg and Elisa Farri
Harvard Business School Case 310-090

In late January 2009, Thomas Fekete, managing director at Barclays Wealth in London, redeemed the most illiquid positions in the so-called Wealth Absolute Return Fund (WAR), one of Barclays Wealth's most promising offshore funds of hedge funds, and halted the Fund's investment activities. For Fekete, the decision to declare the WAR funds a ''failed experiment" marked a turning point. In May 2009, money from the redeemed underlying funds would become available, and by that date, he had to develop a new investment strategy. Fekete faced two options. Option one was to revive the WAR Fund. Option two was to shelve the WAR Fund and launch a new fund of UCITS regulated funds domiciled in Europe with UCITS qualification. Which strategy would be the best way to invest during this period of crisis, to the benefit of both Barclays Wealth and its clients?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/310090-PDF-ENG

Milliway Capital & Martin Smith: November 2008

G. Felda Hardymon, Matthew Rhodes-Kropf, and Ann Leamon
Harvard Business School Case 810-088

Martin Smith, a recent MBA graduate, has just joined a top-tier venture capital firm in the difficult environment of late 2008. One of his first assignments is to review three companies in a partner's portfolio and recommend strategies for managing them. In addition, the partner also has an opportunity to invest in a long-desired company at a good price. Each company presents different potential risks and rewards, both financial and reputational, for Milliway, the partner, and Martin.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/810088-PDF-ENG

Mekong Capital: Building a Culture of Leadership in Vietnam

Christopher Marquis, Vinay Ganti, Kevin Smith, and Doug Guthrie
Harvard Business School Case 411-023

Mekong Capital, a private equity firm specializing in investing in Vietnam, had grown dramatically since its inception in 2002 and faced numerous organizational issues in 2007. There was a shortage of qualified middle managers, an overall lack of leadership, and a culture of making excuses for performance shortfalls. These issues not only plagued Mekong, but also the portfolio companies that they took positions in. The case recounts how the founder and managing partner of Mekong undertook a process to profoundly change the culture, leadership, and accountability within the company to try to transform it so that its people would align and come together as a team, holding themselves responsible to deliver results and committed to the long-term future.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/411023-PDF-ENG

Dubai: Debt, Development, and Crisis (A)

Aldo Musacchio, Andrew Goodman, and Claire Qureshi
Harvard Business School Case 710-069

On November 25, 2009, the city state of Dubai stunned markets by announcing that Dubai World, its flagship state holding company, would seek a six-month "standstill" on at least $4 billion U.S. dollars of its $26 billion in debt obligations. This case describes Dubai's development strategy in detail and narrates how, as part of that strategy, a series of state-owned holding companies accumulated billions of dollars in debt. The (A) case ends as Sheikh Ahmed bin Saeed, chairman of Dubai's Fiscal Committee, has to decide what to do about the financial troubles of Dubai World and other state-owned holding companies. The case presents Sheikh Ahmed bin Saeed having to decide among three options: the Dubai government can guarantee the debt, they can renegotiate the debt, or they can walk away (i.e., default). The (B) case describes the decision and the reactions to this decision around the world and presents a new decision on the part of bond holders of Dubai's state-owned holding companies. The (C) case briefly analyzes the advantages and disadvantages of Dubai's bankruptcy procedures, both for investors and for the holding companies of Dubai.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/710069-PDF-ENG

Purchase this supplement (B):
http://cb.hbsp.harvard.edu/cb/product/710070-PDF-ENG

Purchase this supplement (C):
http://cb.hbsp.harvard.edu/cb/product/710071-PDF-ENG

Lincoln Financial Meets the Financial Crisis

Robert C. Pozen and Peter Spring
Harvard Business School Case 310-137

In March of 2009, Lincoln Financial Group's CEO Dennis Glass was facing a difficult decision as to how he would replenish his company's capital, which could quickly fall to dangerously low levels as a result of the financial crisis. Though the cost of raising capital in the private sector was much higher than a government bailout, the latter also came with strings attached, including restrictions on executive compensation, limitations on dividends, and potential damage to the company's brand among its stakeholders. Glass needed to weigh the pros and cons of private capital versus federal assistance or somehow combine the two. This case reviews the impact of the financial crisis on the life insurance and annuity industry by analyzing the options available to Glass at Lincoln Financial.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/310137-PDF-ENG

Google in China (C)

John A. Quelch
Harvard Business School Supplement 511-024

An abstract is not available at this time.

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/511024-PDF-ENG