Decision-making on the financial markets is driven by information and by trust. But trust can be flagrantly abused. This was amply demonstrated by the Bernard Madoff scandal, considered to be the biggest fraud in American history. Madoff, a former non-executive chair of the NASDAQ stock exchange, used a ‘Ponzi scheme’ to defraud investors, paying returns […]
Journal: Research@HEC
Reducing the Risks of ‘Offshore’ IT
New technologies and the digitization of the economy have extended the use of offshore outsourcing beyond manufacturing to services. India, which has its own ‘Silicon Valley’ in Bangalore, has become a leading centre for IT and now takes care of around 60 per cent of the world’s information systems development. However, around half of such […]
When Financial Incentives Backfire
Economic theory tells us that human capital, i.e. employee ability, is positively linked to productivity and that high performers should be rewarded. Strong financial incentives for performance, however, can carry unexpected costs for companies. (The financial crisis was but the most vivid demonstration of this.) A recent study of a private Polish retail bank suggests […]
Innovation and the Power of Positive Thinking
Business environments evolve quickly and constantly, and changes in technologies, demand or regulation often lead to the development of new products and services. But what determines the quality of these products and services — and the degree of innovation of companies? A study of data from 84 firms supplying the German car industry shows that […]
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Conquering Racism by Taking Personal Responsibility
Developing deeper awareness of our own prejudices is often cited as the solution to racism. Recent research, however, suggests it’s just the first step. In a pilot study conducted at an American university, 75 per cent of white respondents acknowledged and were consciously aware of their own racial prejudices — and in a follow-up study, […]
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The Pros and Cons of Sharing Intellectual Property
The purpose of R&D is to invest time and money in a technology in order to bring it to market to make a profit. The window of competitive advantage that exists when a company brings a new technology to market before everyone else is one of the primary incentives for a company to make that […]
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Global Sales Teams and the Impact of National Culture
Salespeople are a force to be reckoned within organizations. Situated at the interface between companies and customers, they play a key role in business performance. “We don’t talk about it much, especially in France. However, without salespeople, in most cases, there is no business,” says Dominique Rouziès. “They are both ambassadors of their company for […]
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How Private Equity Can Boost Company Performance
Private equity investment, which has grown exponentially in Europe in the past decade, is more than a source of financing for enterprises, its presence in the capital of a company can also be viewed as a mechanism of corporate governance. Private equity firms tend to be more involved than other shareholders in the way companies […]
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