Friday, October 24, 2014

Nouer des partenariats au Moyen Orient, mode d’emploi

Access the publisher's website
Harvard Business Review France (2014)

Comment construire des relations d’affaires au Moyen-Orient? La façon d’aborder des partenaires potentiels est-elle différente entre Dubaï et Abu Dhabi? Ces questions ont été soulevées au cours d’une table ronde que j’ai récemment animée à Dubaï dans le cadre du lancement de mon livre au Moyen-Orient : « L’avantage réseau: comment débloquer de la valeur de vos alliances et partenariats« . L’événement regroupait des étudiants en MBA de l’INSEAD et des dirigeants d’entreprises des Émirats Arabes Unis, comme Mishal Kanoo (vice-président du Groupe Kanoo), Gary Chapman (Président du groupe Services dnata, Le groupe, The Emirate Group), Nicholas Clayton (PDG du Groupe Jumeirah) , Mansour Hajjar (Directeur Général, Groupe Chalhoub), Robin Mills (Directeur Consultant, Manaar énergie) et Constantin Salameh (PDG, Al Ghurair investissement).

Are LPs Funds of Funds? Relationship Building in the Private Equity Industry

MASSA Massimo, ZHANG Hong, ZHOU Xiaolan
Read the working paper
INSEAD Working Paper 2014/57/FIN

We investigate an informal yet important mechanism in the private equity industry that helps to reduce uncertainty: relationship building. Based on a large sample of private equity funds over the 1980-2010 period, we find that the general partners strategically allocate good funds to loyal investors, who in turn commit to invest also in new funds that are not ex-ante promising. In addition, this effect is stronger for venture capital (VC) funds and more popular among certain types of investors. The bargaining power of the relationship concentrates in the hand of GPs.

Wednesday, October 22, 2014

Talking to the Shaman Within: Musings on Hunting

KETS de VRIES Manfred F. R.
Talking to the Shaman Within: Musings on Hunting iUniverse (2014) 436 p.

Everything about hunting leads inexorably to death; the challenge for all hunters is how to justify the kill. But the hunter’s emotional response to the kill is immensely complex. Hunters respect—and even love—the animals they kill. Talking to the Shaman Within: Musings on Hunting addresses this paradox head-on, dissecting the emotional and psychological response of the hunter to his quarry and, more broadly, his surroundings. The climax of the chase brings the hunter closer to realizing the “nature intelligence” that modern civilization has suppressed. Through his investigation of the “instinct” that lies beneath the urge to hunt, author Manfred F. R. Kets de Vries reveals something basic and fundamental about human behavior. The hunting instinct is hardwired into the human psyche, and, for all our sophistication and urbanization, it exerts a powerful influence over the way we conduct our lives even to this day. Talking to the Shaman Within draws on depictions of hunting in art and literature throughout the ages exploring changing trends in human social norms with frequent reference to literature, art, film, television, and music. It unites a dispassionate academic hypothesis with an engaging and colourful narrative into which Kets de Vries weaves stories from his own life—as both an academic and a hunter.

Why Cusomers Upgrade their Reserved Options: The Impact of the Reservation Gap

YAO Dai, YANG Haiyang, GATIGNON Hubert
Read the working paper
INSEAD Working Paper 2014/56/MKT

This research investigates two-step transaction situations in which customers make an initial choice when they reserve an option (step one) and later finalize the purchase decision at the time of actual consumption (step two). In particular, we demonstrate the impact of the reservation gap—the time gap between making a reservation and actual consumption. We propose and show, using field data from one of the world’s leading car rental firms, that the reservation gap has a U-shaped relationship with the likelihood of customers upgrading their reserved cars to more premium ones at the time of consumption. We argue that this pattern of behavior is driven by customers’ deliberate planning and memory of the decision process. Consistent with this proposition, we find that the effect is stronger among customers whose deliberate planning is more affected by time (e.g., less-knowledgeable customers) and among customers who are more prone to memory decay (e.g., elderly customers). We conclude with a discussion of the implications for both firms and customers.

Tuesday, October 21, 2014

Service Competition and Product Quality in the U.S. Automobile Industry

Read the working paper
INSEAD Working Paper 2014/55/TOM/ACGRE revised version of 2014/15/TOM/ACGRE

We study the impact of service attributes (warranty length, after-sales service quality) on consumer demand in the U.S. automobile industry, examining the presence of complementarities/substitution between service attributes and product quality. Our results estimate a median willingness to pay for one year of warranty of about $850, which is equivalent to 3.1% of the median vehicle price in our sample. We find that, for a car with median characteristics, the e_ect on consumer utility of a 1% price decrease is equivalent, all else being equal, to increasing product quality by 2.2%, and is in turn equivalent to increasing the warranty length by 8%. Our results also indicate that service attributes play a compensatory role with respect to product quality, i.e., the impact of warranty length and service quality on demand increases when product quality decreases. Conversely, both service metrics are complementary with respect to demand, i.e., the better the service quality, the higher the marginal effect of longer warranties. Our results thus imply that, in our period of analysis, warranties played a more important role for american firms than for foreign firms, consistent with the fact that american manufacturers exhibited lower product quality and higher service quality than non-american firms.