INSEAD Knowledge

This month’s selection of new research by INSEAD faculty offers some counterintuitive insights, from how misunderstandings can be productive to the possible negative effects of corporate social responsibility under certain conditions. Other studies reveal the significance of understanding the actions and interactions of human actors to achieve ideal outcomes. They include how traders’ strategic response to short selling can harm price efficiency, why the right structures can shift the needle in…

The United States narrowly escaped yet another government shutdown at the start of this year, which would have been the fourth US government partial shutdown in the last decade. But as the world’s largest economy heaved a huge sigh of relief, the 35-day shutdown from late 2018 into early 2019 – the longest in American history – is still fresh in their memory.  The next shutdown would hardly come as a surprise…

Designed for sustainability One of the unintended legacies of Olympics and tournaments of similar scale are the purpose-built structures left conspicuously obsolete after the curtains fall. That said, Paris 2024 is designed for sustainability from the start. Apart from the purpose-built athletes’ village and Aquatic Centre, 95 percent of the infrastructure is either existing or temporary. For these, low emissions is part of the design requirement. In particular, for temporary infrastructures, the…

Traditional productivity metrics are used by many companies to assess the value that employees bring to the organisation. These tangible, quantifiable and results-based measurements include work quality and output, efficiency and the number of projects completed on time and on budget. Some managers rely solely on these metrics to determine promotions, salary increases and performance bonuses. However, some companies and managers may take this too far. It becomes problematic when…

The wave of layoffs in Silicon Valley in the past two years is far from over. After a brutal 2023 that saw over 100,000 tech workers laid off in the United States, 2024 shows no signs of letting up.While the headlines are shocking, the human stories behind the numbers are just as important. How do tech professionals respond to layoffs? Do they view it as an opportunity for exploration or are they…

The US presidential election debate has delivered its verdict, produced new insights and raised new questions. The question we focus on here is why the richest country on earth has presented its voters with such poor options, and how the race to the White House has exposed the country’s democratic vulnerability.On the Republican side, we have Donald Trump, a convicted felon who was a disruptive, divisive force as President from…

According to the African Development Bank, 11 African countries currently feature in the top 20 fastest-growing global economies. The organisation’s latest Outlook Report estimates that real GDP (gross domestic product) growth for the continent is expected to average 3.8 and 4.2 percent in 2024 and 2025 respectively. That compares favourably to projected global averages of just 2.9 and 3.2 percent in the same time periods. By actively seeking out and supporting African-led…

If a company manages to double the demand for its products, it will undoubtedly celebrate its outstanding performance. But when demand for a company’s products increases 10 times, there’s no time to celebrate. Instead, a supply chain shock ensues. This was the experience of Kenvue at the height of the Covid-19 pandemic in 2020, when demand for much of its range of self-care and essential health products spiked. Over the…

In December 2022, the world watched in awe as Argentina’s Lionel Messi and France’s Kylian Mbappé lit up the World Cup final. Playing at a top international tournament for their national team is the pinnacle of any footballer’s career. But what happens when they returned to their club, where their teammates are often their rivals on the international stage? Can team members who compete in another context resume their initial levels…

Naomi was troubled by recurrent nightmares. Each night, she found herself trapped in a dark parking lot with no exit, hiding from approaching footsteps. As a shadowy figure with a familiar face loomed closer, Naomi tried to run but her feet felt like lead. She'd wake up, drenched in sweat.Through therapy and coaching, Naomi connected the dots between the subject of her nightmares and her overbearing boss. She realised that the constant…

Failing to identify faults seems to be a prevalent issue nowadays, considering recent reports of quality control problems at Boeing and numerous recalls by car manufacturers, to name a few. Yet, excessive fault-finding occurs when the ability to pinpoint faults, which is a beneficial behaviour, is taken too far. This can become detrimental if not properly managed.Fault-finding happens when someone identifies and points out mistakes, flaws or problems, focusing on what is wrong rather…

Under stress, good people can make bad decisions. Even CEOs, who are often exposed to contradictory demands, are not immune. Bad decisions can range from ill-advised stock buybacks to poorly devised cost-cutting measures to extremes like imaginative accounting or illegal practices. We’ve seen how Nokia, General Electric, IBM and many others have stumbled in the face of such existential crises.During turbulent times, many CEOs may be tempted to weather the…

The future of work is undoubtedly hybrid. Major corporations from Apple to Zoom now require employees to be in the office two or three days a week, citing the benefits of face-to-face collaboration and culture building. Indeed, traditional thinking suggests that being physically close leads to better communication and collaboration.Our recent research reinforces this idea, but also shows that social closeness (strong direct and indirect connections) can offset a lack of physical proximity.…

In a family business context, this can be achieved in at least three ways: starting new businesses, transforming existing ones, or becoming active investors in the next generation of startups. Each will be discussed at the INSEAD summit.Starting new businessesIn many cases, the next generation of family members may be reluctant to take over the reins of the business. What was new and exciting decades ago is likely to feel…

Goals, values and rules: securing the team’s missionGoals, values and rules are three distinct and complementary ways to bond team members. Together, these elements create the solidarity needed for group members to become a true team. Goals are the foundational element of teams. They provide a shared purpose and direction for the team's efforts. Once goals are established, values and rules then come into play and define how those goals will be achieved.Values are the…

New papers published by INSEAD professors suggest gains from AI could be undermined by managers, perhaps because they have to consider wider objectives beyond measurable results. Another finding pertains to social movements on a global scale, and how they may turn consumers off specific products. Other research cover macroeconomics. One paper examines the underlying causes of the long-term slowdown in productivity growth in advanced economies; the other looks at fiscal policies…

Protectionism, decoupling, regionalisation and Covid-19 have shaped and reshaped value chains in the last five years. In particular, the pandemic and other geopolitical dynamics have revealed the deeper interconnectedness between economies, with the protagonist at the centre, undoubtedly, being China. But these global dynamics have not led to tectonic shifts; they have merely resulted in a reconfiguration of the global supply chains. Despite strong headwinds, China’s dominance is mostly unshaken. Jayant Menon,…

Imagine a world where your boss could be fined for contacting you after hours. California is considering a law to make this a reality.  The "right to disconnect" movement is gaining traction globally, with Australia joining France, Italy, Slovakia, Luxembourg, Portugal and the Canadian province of Ontario in passing legislation to empower employees to switch off outside of working hours. But is legally banning after-hours communications the solution? Or is there a better way…

Every day, we make many decisions that affect not just ourselves but also the people around us. A few examples: Navigating different opinions at a team meeting, tipping wait staff at a restaurant, picking a weekend activity with friends, or choosing between conventional and sustainable but more expensive products. Traditionally, researchers have focused on self-interest, social norms and cognitive processes to explain how we make decisions in social contexts. A new…

Lawrence Wong, a US-trained economist, was sworn in as Singapore’s fourth Prime Minister yesterday. He has big shoes to fill. Under long-time former PM Lee Hsien Loong, Singapore became a bona fide growth miracle and is now one of the richest countries in the world. But Wong is also taking over at a time of heightened uncertainty. As a small and open economy, Singapore is uniquely vulnerable to global shocks like…

When it comes to performance reviews, managers have traditionally held the reins, assessing employee contributions based on their observations and insights. But this approach can be flawed, as managers may harbour biases or lack a complete picture of each team member’s efforts. To address these limitations, some companies have adopted peer evaluations, where colleagues provide feedback on each other. Many are likely familiar with the concept of providing 360-degree feedback. This practice is…

In his 1941 non-fiction work Brazil: Land of the Future, Austrian author Stefan Zweig waxes lyrical about the South American country’s lush and fertile landscapes, astute city planning and melting pot of cultures living in harmony. These, he believes, could help Brazil become a leader on the global stage.“Brazil’s importance for the coming generations cannot be assessed even by the most daring calculations,” Zweig writes in the introduction. “Wherever in our…

Sooner or later, every successful entrepreneur confronts the challenge of establishing a board of directors. Yet many founders approach this task too casually, relying on intuition rather than learning from empirical research or other entrepreneurs’ experience. Such founders tend to become disillusioned with the board they assembled, losing faith in its capacity to empower management to create shareholder value and foster sustainable organisations.It doesn't have to be this way. Over…

Imagine that two brands are running contests where participants stand to win nearly identical fitness watches. Both companies will award the watches to randomly chosen winners, amounting to 1 percent of all participants. Brand A has capped the number of entries at 1,000, while Brand B allows up to 10,000 entries. Which competition would you rather enter?Chances are you would pick Brand A’s competition. After all, you would be up…

In the tumultuous seas of the ever-evolving global economy, geopolitics and technology, board directors must become agile captains, navigating the relentless waves of change with strategic foresight and adaptability. This requires a clear view of the path ahead.At the recent INSEAD Directors Forum, Professor of Economics Pushan Dutt and Professor of Entrepreneurship Vibha Gaba identified and analysed both obstacles and opportunities boards face. Directors including Karen Fawcett, Yen Yen Tan and Chwee Foon Lim discussed…

Disasters can act as brutal audits of organisations to which even veritable institutions like Boeing are no exception. In the wake of two fatal crashes as well as a mid-flight door blowout, Boeing has shaken up its C-suite and pledged to prioritise safety over profit. Will these measures solve its problems? We address this question in the context of operations, safety and organisational economics.Drawing on a wide body of research and…

New research by INSEAD faculty explores the potential downsides of anti-corruption efforts and the various ways incumbent firms successfully defend themselves against new technologies that could displace them. Another paper examines how job candidates self-censor when negotiating pay at firms that frame the work in terms of its social impact. Other published articles delve into the impact of short-term-oriented data on financial forecasting, and what happens when entrepreneurs use scientific approaches.1.…

The old assumption that the past informs the future no longer holds true in an era marked by unparalleled speed and deep-rooted uncertainty. Corporations today face an environment that require boards to recalibrate their governance approach. Indeed, our collaborative board research with BCG, Heidrick & Struggles and INSEAD has identified significant challenges in long-term strategic planning. For example, while directors generally recognise trends and potential shifts in areas like sustainability, only 10…

Before the Yellow Vest protests roiled France in 2018, many believed a carbon tax was the best solution to climate change. Tax proponents argued that, through their wallets, people would be forced to reckon the cost of their actions on the planet and future generations. Yet, the protests, sparked by a rise in fuel taxes, showed that such policies might not be practical.The far-reaching socioeconomic impact of the protests made…

But what can we do if we feel our job lacks meaning? Jiang suggests taking a step back and reflecting on what's causing this disconnect from your work and why it no longer feels fulfilling. Is it some shift at work, like an organisational restructuring or a change in leadership that has altered the nature of your work? Or is it something that has changed in yourself or your personal life? Once you…

According to research from the International Monetary Fund, the benefits of global decarbonisation would amount to US$85 trillion in net value. Carbon emissions represent a massive cost not just to the environment, but to the economy as well, and the data is clear that the potential gains associated with reducing emissions are enormous. Yet, decarbonisation efforts worldwide remain woefully inadequate. Data from the Intergovernmental Panel on Climate Change found that annual greenhouse…

Despite a seemingly glamorous life as a fashion executive, Nadine felt a gnawing loneliness. Her life was filled with acquaintances but devoid of true connection. She desperately wished for someone who understood her. This struggle stemmed from a traumatic childhood marked by abandonment and isolation, leaving her with a deep-seated fear of emotional vulnerability. While she hoped her career would foster connection, the cutthroat environment only pushed her to project…

When Amazon went public in 1997, founder and then CEO Jeff Bezos’ message to shareholders was clear: His focus was on creating long-term value through bold operational investment. The following year, as promised, Amazon doubled its distribution capacity and more than tripled its inventory.And the rest, as we know it, is history. However, not many companies managed to follow in the footsteps of the tech giant, which by today, has a…

Giving and receiving help are essential aspects of organisational life, whether that’s providing career advice or soliciting a colleague’s input on a tricky technical problem that you just can’t solve on your own. Through help exchange, individuals gain access to ideas, resources and relationships that help them complete tasks more efficiently and effectively than if working alone. However, a growing body of research has documented various ways in which people routinely…

With its potential to transform life as we know it, generative AI (GenAI) has taken the world by storm. Beneath the hype, knowing how people are using the technology and their attitude towards it could help us anticipate its trajectory. A new INSEAD survey of managers and executives across industries and continents may offer some clues.The survey of some 1,200 INSEAD alumni illustrates that corporate decision-makers and employees alike are embracing…

Business leaders aren’t blind to the environmental scars etched by their industries, nor to the communities left behind in the pursuit of profit. They feel the unease, the gnawing guilt, but the harsh reality often seems easier to ignore. Executives are trapped in a cycle of reaction, their minds clouded by denial, rationalisation and a sense of powerlessness. They build walls against discomfort, isolating themselves from impending problems. But what if this…

An image of a verdant forest glade or a tranquil pasture. Natural scenes typically conjure up positive emotions and a sense of wellbeing for most individuals, but could they also influence them to make healthier food choices? The answer, according to our new article, just published in Nature’s new journal Communications Psychology, is yes.Our studies, which exposed people to natural or urban environments before asking them to make snack or…

It is well documented that a sustained therapeutic relationship between a patient and a doctor is valued by both patients and doctors alike. Surveys also highlight the health benefits and improved management of health conditions for patients who have an ongoing therapeutic relationship with the same primary care physician, known as relational continuity. Yet, continuity is tricky in practice when the healthcare system is under strain. In the United Kingdom, as…

Amid seemingly never-ending layoffs and a laser focus on efficiency, companies are expecting their employees to make productive and focused use of their time on the clock. Yet, research has shown that employees often spend a significant amount of time cyberloafing – using the internet for personal purposes during work hours – with one study putting this figure as high as 60 to 80 percent.Remote and hybrid work arrangements and a significant…