Building legitimacy in an adverse foreign environment: when the liability of foreignness can become a source of competitive advantage?

Although the banking industry is by nature risk-prone, network-based and subject to strong institutional barriers, banks going international generally operate alone. Within a context of high liability of foreignness, how do they transform their internalization advantage of strategic assets in order to develop competitive advantage? This paper suggests reconsidering liability-based international business models in light of a multiple case study analysing a few foreign banks in India. Using a neoinstitutionalist framework, we find that banks resort to legitimacy-seeking strategies in order to overcome the high liability of foreignness and enjoy their internalization advantage. Furthermore, this paper tentatively tries to operationalize the concept of legitimacy strategies in this very specific case, around three pillars: (l) an overall superior expertise (2) an overall strong global reputation (3) an acculturation strategy aiming at indianizing the local banking unit

  • Mr. Paul Caussat, PhD Student, ESCP Europe (Paris) & University Paris Sorbonne
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  • 2016-08-29

Healthcare Innovation and Entrepreneurship in India: Opportunity and Challenges

Healthcare industry in India is one of the fastest growing one and presents tremendous opportunity for entrepreneurship across the entire spectrum. The industry is projected to grow to $ 280 billion by 2020 from the current level of $ 100 B. That is an outstanding growth opportunity by any measure and therefore entrepreneurs could potentially choose any segment within the industry and there will be a definite need there.

From, chronic disease management to single specialty chains, from tech platform for health services to EMR/EHR start-ups along with a range of innovative medical devices, we are seeing the entire spectrum covered with start-ups.

So, while the opportunity is unprecedented and very large, the challenges in India are formidable.

Any one who thought that creating an "App" will enable them to create a healthcare company has realized how wide off the mark that thinking was.

  • Mr. Pradeep K Jaisingh, Founder & Chairman, HealthStart, India
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  • 2016-08-24

Econometric Identification of Causal Effects: Graphical Causal Models in Practice

It is well known that causal inference relies on untestable a-priori causal assumptions. Identification refers to whether a causal relationship can be inferred from observed statistical associations; it requires an understanding of what statistical associations are induced by those causal assumptions. Since the assumptions are untestable, a transparent description of their statistical consequences helps the readers. However, the relation between causal assumptions and their induced statistical associations may not be obvious. Graphical Causal Models developed in the computer science literature in the 1980s (Pearl 2009) help trace these consequences, and are therefore a tool for both analysis and exposition. In this paper I describe the technique and illustrate its application to several research settings, including a case study in auditing.

  • Prof. Sanjay Kallapur, ISB, Hyderabad
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  • 2016-08-23

Taming Wicked Problems in Strategy Wicked Strategies and the Business of Humanity

In business, some problems are easy, some problems are hard, and some problems are so complex, so intractable, and so threatening to organizations - or entire industries that they are best described as 'wicked'. These problems resist easy interpretation or understanding; they pose questions that seem, to observers, to be unsolvable; and they render traditional analytical tools virtually impotent, requiring new approaches to strategic analysis.

While the prevalence of wicked problems in the arena of strategic management has been increasing because of forces in the business environment, the ability of management to respond effectively to these problems has not kept pace, for two reasons. First, many managers are not aware of the existence of wicked problems and the characteristics that make a problem wicked. Second, effective, systematic approaches to taming wicked problems in strategy are a recent development that have yet to be widely shared and integrated into management curricula.

One such systematic approach that offers promise in addressing the challenge of wicked problems has been developed by the Business of Humanity Project, a joint initiative of the Katz Graduate School of Business and the Swanson School of Engineering at the University of Pittsburgh. The approach employs the construct of humanity—a combination of humane criteria and an empathetic response to global human needs - to develop strategies that respond to the environmental forces creating wicked problems by exploiting disruptive technologies, reconciling conflicted stakeholders, and embracing an unknowable future.

  • John C. Camillus, Katz Graduate School of Business, University of Pittsburgh
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  • 2016-08-22

Disruption and Resilience Issues in Freight Transportation

Freight transportation is crucial to the lifeline of modern society because it connects the producers to geographically dispersed consumers. In North America, this connection is facilitated by an extensive freight transportation system comprised of surface, marine and air transportation. Given its’ significance to the economy, smooth and efficient functioning of the transportation sector is crucial for two reasons. First, investment in transportation infrastructure has not kept pace with the increased volume of goods, which in turn has resulted in at or near capacity operation for the freight transport sector. Second, risks from disruptions that are intentionally designed to damage or cripple the transportation system such as a terrorist related event or result from naturally occurring weather based events have increased. This seminar will focus on the latter reason, and introduce intentional and random disruptions followed by an outline of an analytical approach for fortifying rail-truck intermodal terminal network against the first type. The rest of the seminar time will focus on managing (random) disruption in a railroad network. An optimization-based methodology for recovery from random disruptions in service legs and train services in a railroad network will be outlined, wherein a predictive model is used to identify critical disruption factors and to design suitable mitigation strategy. The proposed methodology is applied to a case study built using the realistic infrastructure of a railroad network in United States. The resulting analyses underscore the importance of accepting a slight increase in pre-disruption transportation costs because it in turn will enhance network resiliency by building dis-similar paths for train services, and of installing alternative links around critical service legs.

  • Prof. Manish Verma, DeGroote School of Business, McMaster University, Canada
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  • 2016-08-08

Licensing Intellectual Property and the Dissemination of Technology

While the exclusive rights provided by intellectual property law are touted as promoting the creation and spread of new technologies, equally important is the role of contract law in supporting the dissemination of technology. Contract and intellectual property laws intersect in the practice of licensing. This presentation will demonstrate how licensing supports technology diffusion through illustrations of the overlap between contract and IPR's. The focus will be on contracts involving inventions not covered by IPR's, exhaustion of IPR's, and competition law. The general point is that contract law also provides incentives for inventors and creators that complement IPR's and in many cases make the exclusivity of intellectual property protection more finely attuned with the openness of market competition.

  • Prof. Shubha Ghosh, Syracuse University College of Law in Syracuse, New York
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  • 2016-08-05

Whatever it takes: The Real Effects of Unconventional Monetary Policy

On July 26, 2012 the ECB’s President Mario Draghi announced to do “whatever it takes” to preserve the Euro and subsequently launched the Outright Monetary Transactions (OMT) Program, which led to a significant increase in the value of sovereign bonds issued by European periphery countries. As a result, the OMT announcement indirectly recapitalized periphery country banks due to their significant holdings of these bonds. However, the regained stability of the European banking sector has not fully transferred into economic growth. We show that this development can at least partially explained by zombie lending motives of banks that still remained under-capitalized after the OMT announcement. While banks that benefited from the announcement increased their overall loan supply, this supply was mostly targeted towards low-quality firms with pre-existing lending relationships with these banks. As a result, there was no positive impact on real economic activity like employment or investment. Instead, these firms mainly used the newly acquired funds to build up cash reserves. Finally, we document that creditworthy firms in industries with a prevalence of zombie firms suffered significantly from the credit misallocation, which slowed down the economic recovery.

  • Prof. Viral Acharya, Stern School of Business, New York University
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  • 2016-08-04