Strategy

- 2024
- Working Paper
Generative AI and The Nature of Work

By: Manuel Hoffmann, Sam Boysel, Frank Nagle, Sida Peng and Kevin Xu

Recent advances in artificial intelligence (AI) technology demonstrate considerable potential to complement human capital intensive activities. While an emerging literature documents wide-ranging productivity effects of AI, relatively little attention has been paid to how AI might change the nature of work itself. How do individuals, especially those in the knowledge economy, adjust how they work when they start using AI? Using the setting of open source software, we study individual level effects that AI has on task allocation. We exploit a natural experiment arising from the deployment of GitHub Copilot, a generative AI code completion tool for software developers. Leveraging millions of work activities over a two year period, we use a program eligibility threshold to investigate the impact of AI technology on the task allocation of software developers within a quasi-experimental regression discontinuity design. We find that having access to Copilot induces such individuals to shift task allocation towards their core work of coding activities and away from non-core project management activities. We identify two underlying mechanisms driving this shift - an increase in autonomous rather than collaborative work, and an increase in exploration activities rather than exploitation. The main effects are greater for individuals with relatively lower ability. Overall, our estimates point towards a large potential for AI to transform work processes and to potentially flatten organizational hierarchies in the knowledge economy.
- 2024
- Working Paper
Generative AI and The Nature of Work

By: Manuel Hoffmann, Sam Boysel, Frank Nagle, Sida Peng and Kevin Xu

Recent advances in artificial intelligence (AI) technology demonstrate considerable potential to complement human capital intensive activities. While an emerging literature documents wide-ranging productivity effects of AI, relatively little attention has been paid to how AI might change the nature of work itself. How do individuals, especially...
- October 2024
- Case
Edizione

By: Cynthia A. Montgomery, Dante Roscini, Elena Corsi and Hugo Etchegoyhen

This case study examines the diversification and transformation of Edizione, the Benetton family's holding company originally established to reinvest dividends from the Benetton clothing brand. Edizione expanded significantly in the late 1990s and early 2000s, particularly through the acquisition of public assets, including Italy's highway network. The company faced a major crisis when a bridge under its management collapsed, resulting in the deaths of 43 people. Under the leadership of Alessandro Benetton, the second generation of the family took control and steered the company through the crisis. They sold the highway business to the Italian government, successfully resisted a hostile takeover, and implemented new governance structures to guide the company's future. The case study asks students what is left of the family legacy and how should the holding manage its assets in the future, in particular if it should sell the loss-making Benetton fashion brand.
- October 2024
- Case
Edizione

By: Cynthia A. Montgomery, Dante Roscini, Elena Corsi and Hugo Etchegoyhen

This case study examines the diversification and transformation of Edizione, the Benetton family's holding company originally established to reinvest dividends from the Benetton clothing brand. Edizione expanded significantly in the late 1990s and early 2000s, particularly through the acquisition of public assets, including Italy's highway...
- October 2024
- Case
Gojek (A)

By: Ramon Casadesus-Masanell, Claire Nadira and Malvin Pranoto
- October 2024
- Case
Gojek (A)

By: Ramon Casadesus-Masanell, Claire Nadira and Malvin Pranoto

About the Unit

The Strategy unit studies firms as competitors in an economic landscape. Key issues include: the development and effectiveness of firm strategy at both a business and corporate level; the analysis of the competitive environment; and the sustainability of strategy over time.

Our research, course development, and teaching draws on multiple disciplines, including economics, sociology, and political science, and focuses on both domestic and global competition. The objective of the work is to generate findings and develop concepts that will help managers improve their strategic decisions while advancing the state of knowledge in the academic study of strategy and related disciplines.

Recent Publications

Generative AI and The Nature of Work

By: Manuel Hoffmann, Sam Boysel, Frank Nagle, Sida Peng and Kevin Xu

2024 |
Working Paper |
Faculty Research

Recent advances in artificial intelligence (AI) technology demonstrate considerable potential to complement human capital intensive activities. While an emerging literature documents wide-ranging productivity effects of AI, relatively little attention has been paid to how AI might change the nature of work itself. How do individuals, especially those in the knowledge economy, adjust how they work when they start using AI? Using the setting of open source software, we study individual level effects that AI has on task allocation. We exploit a natural experiment arising from the deployment of GitHub Copilot, a generative AI code completion tool for software developers. Leveraging millions of work activities over a two year period, we use a program eligibility threshold to investigate the impact of AI technology on the task allocation of software developers within a quasi-experimental regression discontinuity design. We find that having access to Copilot induces such individuals to shift task allocation towards their core work of coding activities and away from non-core project management activities. We identify two underlying mechanisms driving this shift - an increase in autonomous rather than collaborative work, and an increase in exploration activities rather than exploitation. The main effects are greater for individuals with relatively lower ability. Overall, our estimates point towards a large potential for AI to transform work processes and to potentially flatten organizational hierarchies in the knowledge economy.

Keywords: Generative Ai; Digital Work; Open Source Software; Knowledge Economy

Citation

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Edizione

By: Cynthia A. Montgomery, Dante Roscini, Elena Corsi and Hugo Etchegoyhen

October 2024 |
Case |
Faculty Research

This case study examines the diversification and transformation of Edizione, the Benetton family's holding company originally established to reinvest dividends from the Benetton clothing brand. Edizione expanded significantly in the late 1990s and early 2000s, particularly through the acquisition of public assets, including Italy's highway network. The company faced a major crisis when a bridge under its management collapsed, resulting in the deaths of 43 people. Under the leadership of Alessandro Benetton, the second generation of the family took control and steered the company through the crisis. They sold the highway business to the Italian government, successfully resisted a hostile takeover, and implemented new governance structures to guide the company's future. The case study asks students what is left of the family legacy and how should the holding manage its assets in the future, in particular if it should sell the loss-making Benetton fashion brand.

Citation

Educators

Gojek (A)

By: Ramon Casadesus-Masanell, Claire Nadira and Malvin Pranoto

October 2024 |
Case |
Faculty Research

Citation

Educators

EU‘s Digital Services Act and Digital Markets Act

By: David B. Yoffie and Sarah von Bargen

October 2024 |
Case |
Faculty Research

Citation

Educators

Why Multibusiness Strategies Fail and How to Make Them Succeed

By: Bharat Anand and David J. Collis

September–October 2024 |
Article |
Harvard Business Review

Enterprises that own multiple businesses often have a flawed approach to strategy: They focus too much on the makeup of their portfolios and too little on enhancing the businesses in them. Strategies for adding value to a corporation’s businesses fall on a continuum. On one end the businesses in the portfolio are completely unrelated; at the other they have many similarities. Each place on the continuum requires a different kind of organizational structure and specific management processes to support it. To succeed at execution, you need to determine where on the spectrum your business falls and then align your portfolio selection, structure, and processes with your vision of how to add value.

Keywords: Value Creation; Corporate Strategy; Organizational Structure; Management Systems

Citation

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Boards Need a New Approach to Technology

By: Tarun Khanna, Mary C. Beckerle and Nabil Y. Sakkab

September–October 2024 |
Article |
Harvard Business Review

The boards of too many publicly traded companies are downright timid when considering matters involving science and technology. More often than not, they focus on security and digitization—a defensive posture that fails to consider the bigger opportunities emerging from new materials, space science, and a better understanding of the genome—to name just a few areas of opportunity. It’s easy to be lulled into thinking that science does not matter to a nontech company. But that distinction isn’t quite so meaningful when it comes to capitalizing on the opportunities from technological change that is now ubiquitous, rapid, turbulent, and often emanating from increasingly unlikely corners. The authors have observed firsthand an effective way to address this gap: the board technology committee. Drawing on the achievements of tech committees at AES, Johnson & Johnson, and Altria (companies for which the authors are or have been directors), they describe how these entities can advance the interests of organizations and offer advice on how to set one up.

Keywords: Governing and Advisory Boards; Opportunities; Technology Adoption

Citation

Find at Harvard

Copyright and Fair Use

By: David B. Yoffie

September 2024 |
Background Note |
Faculty Research

Citation

Educators

Aramco: Navigating the Energy Transition

By: Tarun Khanna and Gizem Cihan Dincsoy

September 2024 |
Case |
Faculty Research

In March 2024, Amin Nasser, president, and CEO of the Saudi Arabian Oil Company (Aramco), had just delivered a speech about the future of energy at a global energy conference. The world was behind schedule in meeting long-term climate change goals. The global shift from fossil fuels to new energy technologies was fraught with challenges, yet filled with opportunity. Developed countries were pushing for a direct transition to new technologies by phasing out oil and gas, while developing nations focused on meeting growing energy demands and highlighting affordability in the transition. Amid these uncertainties, Aramco was working towards to achieve its sustainability goals and reducing its own direct and indirect carbon emissions. Aramco, the backbone of Saudi Arabia’s economy and its talent powerhouse, had to contend not only with playing a leadership role in the global energy transition, but being cognizant of the need to support Saudi Arabia’s ambitious societal reform project, Vision 2030, which sought to achieve economic diversification away from purely being oil-centric.