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Note on Flexible Spending Accounts, Health Reimbursement Arrangements, and Health Savings Accounts
by Regina E. Herzlinger Joann M. LaingDescribes the current use of Flexible Savings Accounts, Health Savings Accounts, and how Reimbursement Account vendors are shaping the market. Identifies current and future market players, third-party administrators and processors, and includes a discussion of the current political situation as it applies to these vehicles.
Note on Foreign Currency Swaps
by W. Carl KesterProvides descriptive background about the development of an international market for currency swaps and, by means of a detailed example, instructs readers in the determination of swap flows and all-in costs of financing using market swap rates. A rewritten version of an earlier note.
Note on Foreign Direct Investment
by Debora L. Spar Julia KouBetween 1985 and 1990, the global economy witnessed an unprecedented surge in flows of foreign direct investment (FDI). This sudden increase called back into prominence the range of questions that have long surrounded FDI. What causes firms to expand or contract their purchase of foreign assets? How do patterns of investment affect trade and development? What is the impact of FDI on host countries? This note explores these questions in some detail and includes data summarizing recent trends in FDI flows.
Note on Foreign Exchange
by Scott P. Mason William B. AllenDescribes the operation of foreign exchange markets, including bid-offer spreads, cross rates, reciprocal rates, and forward rates. Provides several examples to demonstrate calculation of outright forward rates using discount and premium points quoted in the London Financial Times. Other examples demonstrate interest rate parity, and hedging foreign debt using long-dated forwards.
Note on Franchising
by Paul A. Gompers Catherine ConneelyExamines the motivations for franchising. Examines the academic literature in the area and draws implications for franchising patterns. Also provides data on franchising patterns.
Note on Free Cash Flow Valuation Models
by William A. SahlmanExplores some of the issues involved in valuing cash flow streams. A simple model is presented that reveals the effect on value of changing assumptions about the appropriate discount rate, the level of profitability, the growth rate of sales, the asset intensity ratio, and the leverage ratio. Helps students address some of the following issues: 1) What is the definition of cash flow? 2) What effects do changes in the discount rate have on valuation? 3) How sensitive is value to changes in assumptions about the underlying characteristics of the cash flow stream? 4) How does growth affect value? 5) How does the use of leverage affect value? 6) What are price-to-earnings ratios? and 7) What factors affect price-to-earnings ratios?
Note on Fundamental Parity Conditions
by W. Carl KesterProvides a simple framework for analyzing expected exchange rate movements. Basic parity and equilibrium conditions are presented including purchasing power parity, forward parity, interest rate parity, the domestic Fisher effect, and the international Fisher effect (Fisher open). Empirical evidence about these conditions are discussed. References are provided.
Note on Funding Deep Tech Startups
by Peter Barrett Karim R. Lakhani Noubar B. AfeyanThis note provides essential information on funding sources and valuation topics facing deep technology startups-ventures that are capital-intensive, with high technical and market uncertainty, and require long gestation periods. Both dilutive and non-dilutive sources of investment are described, along with empirical examples and figures.
Note on Hackathons
by Ethan S. BernsteinOrganizations have often sought to meet the pressures of rapid change through novel ways of managing human capital to boost innovation and productivity. Hackathons have emerged as one of the latest approaches to do just that. How can those responsible for managing human capital use hackathons as a new tool in their toolkit? This note is meant as a guide for academics and practitioners to understand what hackathons are, how they work, when and how they can be useful, and how they complement other more traditional tools for organizational innovation and productivity. The note ends with a summary of questions and additional resources for more detail.
Note on How to Approach POM Cases
by Roger E. BohnPresents a general approach to diagnosing and solving problems in management, especially in production situations with ambiguous problems.
Note on Human Behavior: Situation versus Character
by Nitin Nohria Joseph L. Badaracco Jr. Sandra J. Sucher Bridget GurtlerWhen we think of human behavior, especially from a moral perspective, we often rely on explanations based on character. We think that good decisions and responsible behavior require people with integrity and strong character, and immoral behavior originates with people with little integrity and weak character. However, important research in recent decades strongly suggests that situational factors often dominate character in ethical decision-making - for leaders and for members of their organizations. This note summarizes the recent research, shows its implications for the basic steps in ethical decision-making, and provides a basis for in-depth discussion of the character-versus-situation question.
Note on Human Behavior: Situation versus Character
by Nitin Nohria Joseph L. Badaracco Jr. Sandra J. Sucher Bridget GurtlerWhen we think of human behavior, especially from a moral perspective, we often rely on explanations based on character. We think that good decisions and responsible behavior require people with integrity and strong character, and immoral behavior originates with people with little integrity and weak character. However, important research in recent decades strongly suggests that situational factors often dominate character in ethical decision-making - for leaders and for members of their organizations. This note summarizes the recent research, shows its implications for the basic steps in ethical decision-making, and provides a basis for in-depth discussion of the character-versus-situation question.
Note on Human Behavior: The Leadership Challenge
by Sandra J. SucherThis note reviews research findings on the leadership challenges of diversity, including the social psychology of similarity and difference, the value of multiple perspectives to problem-solving, the relationship between diversity and firm performance, and management paradigms for diversity.
Note on Identifying Strategic Risk
by Robert L. SimonsOutlines: 1) the sources of business risk, 2) how to assess internal risk pressures, and 3) the antecedents of misrepresentation of fraud.
Note on Implementing Strategy
by Richard G. HamermeshPresents a framework for thinking about problems of implementing strategy. Defines the tasks of implementation and the range of implementation situations, then develops four approaches to implementation and reviews a range of implementation skills. Intended for use in Business Policy II in conjunction with case studies.
Note on Individual and Corporate Liability
by Lynn Sharp PaineAnswers some of the most common questions managers ask about potential corporate and individual liability for corporate misconduct under U.S. law. Describes a few general principles of liability that managers should be aware of. A rewritten version of an earlier note.
Note on Information Technology and Strategy
by Richard L. Nolan Katherine N. SegerProvides a context for the evolution of information technology in business organizations, explains the emergence of information as an important resource to be managed, and provides a framework for assessing the strategic potential of information in the firm.
Note on Innovation Diffusion: Rogers' Five Factors
by John T. GourvilleReviews Everett Rogers' Five Factors of product adoption. These factors help explain why some products diffuse rapidly and some slowly or not at all.
Note on Insider Trading Liability
by Christopher M. Bruner Lynn Sharp PaineProvides a general description and overview of U.S. law on insider trading, including the basic theories of liability, the responsibilities of securities firm managers to prevent and detect insider trading, and the potential penalties for insider trading. A rewritten version of an earlier note.
Note on International Tax Regimes
by Mihir A. Desai Mark F. Veblen Kathleen LuchsProvides a framework for understanding different types of international tax regimes. Examines how alternative tax regimes tax the foreign income of their citizens (including corporate citizens); how tax regimes define foreign and domestic income; and how foreign tax credits and deductions are used in worldwide tax regimes to mitigate double taxation. Discusses in detail the current U.S. system of worldwide taxation and the managerial incentives created by the U.S. tax system.
Note on Interviewing
by Monica HigginsDiscusses issues involved in the job interview process. Teaching Purpose: To assist in career planning.
Note on Knowledge Management
by David A. Garvin Artemis MarchProvides an overview of knowledge management, including descriptions of knowledge management strategies, processes, organization, infrastructure, systems, and challenges. Describes the approaches at two leading consulting firms, Arthur Andersen and Ernst & Young, that have been pioneers in knowledge management strategies.
Note on Lead User Research
by Stefan Thomke Ashok NimgadeDescribes the Lead User concept and method (step-by-step) with brief examples from industrial practice.
Note on Linear Programming
by Jonathan EcksteinGives an elementary introduction to formulating linear programming models and interpreting linear programmings output. Other aspects of linear programming are discussed briefly.
Note on Lobbying and the Dodd-Frank Financial Reforms
by Aldo Sesia Clayton RoseThe note provides background on the Dodd-Frank Wall Street Reform and Consumer Protection Act, brief background on lobbying, and aspects of the lobbying effort by the financial industry and JP Morgan Chase with regard to Dodd-Frank. It is intended as a companion to "The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (A)," HBS No. 309-001, to facilitate class discussion, and as such provides only an overview of specific aspects of the issues discussed.