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  • August 2015 (Revised January 2017)
  • Technical Note

From Correlation to Causation

By: Feng Zhu and Karim R. Lakhani
To make sound business decisions, managers must be comfortable with the concepts of correlation and causation. This background note provides an overview of correlation and causation using examples and explains why the former does not imply the latter. It also describes... View Details
Keywords: Statistics; Regression; Data Analytics; Decisions; Forecasting and Prediction; Judgments
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  • 05 Nov 2021
  • News

Leaders: Stop Confusing Correlation with Causation

  • November 5, 2021
  • Article

Leaders: Stop Confusing Correlation with Causation

By: Michael Luca
We’ve all been told that correlation does not imply causation. Yet many business leaders, elected officials, and media outlets still make causal claims based on misleading correlations. These claims are too often unscrutinized, amplified, and mistakenly used to guide... View Details
Keywords: Behavioral Economics; Data Analysis; Organizations; Decision Making; Analytics and Data Science; Analysis; Learning
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  • August 2017
  • Module Note

Distinguishing Good Advice from Bad Advice: An Introduction to the HBS Course 'Building and Sustaining a Successful Enterprise' (BSSE)

By: Clayton Christensen
Overview of theoretical approach of HBS MBA Course "Building and Sustaining a Successful Enterprise"; distinguishing theory based on correlation from theory based on causal driver. View Details
Keywords: Causation Vs. Correlation; BSSE; Theory; Business Ventures
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  • 07 Aug 2012
  • Working Paper Summaries

Financial vs. Strategic Buyers

Keywords: by Marc Martos-Vila, Matthew Rhodes-Kropf & Jarrad Harford
  • 17 Feb 2016
  • Research & Ideas

Man vs. Machine: Which Makes Better Hires?

Finally, they compared the average tenure of applicants hired as exceptions with those hired by the rules. On average, they found that managers made exceptions from the test 20 percent of the time. And there was a stark downward View Details
Keywords: by Michael Blanding; Employment
  • Summer 2014
  • Article

Delegation in Multi‐Establishment Firms: Adaptation vs. Coordination in I.T. Purchasing Authority

By: Kristina Steffenson McElheran
This paper conducts one of the first large-scale, establishment-level empirical studies of delegation within firms. Recent contributions to a rapidly growing theory literature have focused on the tradeoff between adaptation and coordination in determining... View Details
Keywords: Integration; Leadership; Management Practices and Processes; Information Technology; Organizational Structure; Adaptation
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  • 14 Feb 2008
  • Working Paper Summaries

Laws vs. Contracts: Legal Origins, Shareholder Protections, and Ownership Concentration in Brazil, 1890-1950

Keywords: by Aldo Musacchio
  • 2008
  • Article

Market Leadership and Strategic Investments in Innovation: The Adoption of E-Business Capabilities

By: Kristina Steffenson McElheran
This study focuses on whether more-productive firms are more likely to adopt process innovations and why. The empirical context is the adoption of e-business practices among U.S. manufacturing plants in early 2000. Based on detailed data from the U.S. Census of... View Details
Keywords: Investment; Innovation Strategy; Leadership; Motivation and Incentives; Competitive Advantage; Technology Adoption; Manufacturing Industry; United States
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  • 05 Nov 2012
  • Research & Ideas

What Wall Street Doesn’t Understand About International Trade

more from China. If you have a lot of board members who are Vietnamese, you trade a lot with Vietnam." Correlation Versus Causation The team knew, though, that the correlative... View Details
Keywords: by Carmen Nobel
  • September–October 2024
  • Article

Where Data-Driven Decision-Making Can Go Wrong

By: Michael Luca and Amy C. Edmondson
When considering internal data or the results of a study, often business leaders either take the evidence presented as gospel or dismiss it altogether. Both approaches are misguided. What leaders need to do instead is conduct rigorous discussions that assess any... View Details
Keywords: Information; Analytics and Data Science; Analysis; Decision Making
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  • 15 Feb 2014
  • Conference Presentation

Men as Cultural Ideals: How Culture Shapes Gender Stereotypes

By: Amy Cuddy, Elizabeth Baily Wolf, Peter Glick and Michael I. Norton
Four studies test whether cultural values moderate the content of gender stereotypes, such that male stereotypes more closely align with core cultural values (specifically, individualism vs. collectivism) than do female stereotypes. In Studies 1 and 2, using different... View Details
Keywords: Stereotypes; Gender; United States; South Korea
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  • 2011
  • Working Paper

What Do CEOs Do?

By: Oriana Bandiera, Luigi Guiso, Andrea Prat and Raffaella Sadun
We develop a methodology to collect and analyze data on CEOs' time use. The idea-sketched out in a simple theoretical set-up-is that CEO time is a scarce resource and its allocation can help us identify the firm's priorities as well as the presence of governance... View Details
Keywords: Corporate Governance; Employee Relationship Management; Managerial Roles; Time Management; Performance Productivity; Italy
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  • 2018
  • Working Paper

Channeled Attention and Stable Errors -- Previous Working Version

By: Tristan Gagnon-Bartsch, Matthew Rabin and Joshua Schwartzstein
A common critique of models of mistaken beliefs is that people should recognize their error after observations they thought were unlikely. This paper develops a framework for assessing when a given error is likely to be discovered, in the sense that the error-maker... View Details
Keywords: Perception; Behavior; Theory; Situation or Environment
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  • 26 Jun 2007
  • First Look

First Look: June 26, 2007

paper: http://www.hbs.edu/research/pdf/07-022.pdf   Cases & Course MaterialsAirbus vs. Boeing (B): Should Airbus Build the VLCT Alone? Harvard Business School Supplement 707-448 Supplements the (A) case. Purchase this supplement:... View Details
Keywords: Martha Lagace
  • 21 Nov 2006
  • First Look

First Look: November 21, 2006

previous work that beliefs are also correlated with several features of the economic system (taxation, social insurance, etc.). Our objective is to study the joint determination of these three features (beliefs, punitiveness and economic... View Details
Keywords: Sean Silverthorne
  • 11 Dec 2018
  • First Look

New Research and Ideas, December 11, 2018

Sports Betting By: Casadesus-Masanell, Ramon, and Neil Campbell Abstract—We examine two episodes of strategic interaction in the U.K. betting industry: (i) Betfair (an entrant multi-sided platform or MSP) vs. Flutter (also an MSP), and... View Details
Keywords: Dina Gerdeman
  • 12 Dec 2017
  • First Look

New Research and Ideas, December 12, 2017

entrepreneurship. We label studies by the type of entrepreneurial population studied (e.g., Main Street vs. those backed by venture capital) to identify interesting and irreducible parts of this heterogeneity, while also identifying... View Details
Keywords: Sean Silverthorne
  • 01 May 2012
  • First Look

First Look: May 1

delegation, as are local information advantages and firm-wide diversification; in contrast, a high value of within-firm coordination is correlated with centralization. Variation across establishments within firms is widespread: most firms... View Details
Keywords: Carmen Nobel
  • 31 Aug 2020
  • What Do You Think?

Why Don’t More Organizations Understand the Power of Diversity and Inclusion?

correlation vs. cause and effect. As commenter Diogenes put it, “Prove with a cogent methodology that racial and gender diversity lead to greater profitability. Prove causation, not View Details
Keywords: by James Heskett