Every week one financial services firm or another releases findings of its latest retirement study: Americans aren’t saving enough. Americans are saving too much. The savings rate is abysmal. People are borrowing against their homes to pay for luxuries and so forth. Who’s right? It turns out not surprisingly that the future is hard to predict and that many calculators designed to make those predictions are flawed in their basic assumptions. Wharton experts try to help navigate the challenges of ...
Feb 07, 2007•14 min
This year’s convening of The World Economic Forum in Davos Switzerland brought together approximately 2 400 corporate executives heads of government and leaders of organizations like the World Bank and Human Rights Watch to debate issues ranging from global warming to the rise of the Internet and the future of the Middle East. Michael Useem director of Wharton’s Center for Leadership and Change Management attended the five-day event. He offers his report on what he calls Davos’ ”culture of trans...
Feb 07, 2007•10 min
2006 set a record for mergers and acquisitions worldwide. Deals totaled $3.79 trillion 38% higher than in 2005 and 55 of the transactions were valued at more than $10 billion each according to data from Thomson Financial. Private equity firms were major movers in this trend responsible for 20% of global M&A activity and 27% of activity in the U.S. according to Thomson. How long will this M&A binge continue and when it does come to an end what will be the factors behind the retreat? Knowl...
Jan 24, 2007•24 min
The U.S. economy may be getting stronger but that doesn’t mean interest rates will go up when the Federal Reserve meets next week on January 31. According to Wharton finance professor Jeremy Siegel interest rates should hold firm at their current level for quite a while. In an interview with Knowledge at Wharton Siegel discusses the current balance ”between strength and moderate inflation ” where the housing market is headed and why investors should be cautious about emerging markets like China ...
Jan 24, 2007•14 min
Announcements at the Consumer Electronics Show and Apple’s MacWorld conference both held earlier this month heralded the arrival of a number of products at the center of technology convergence trends. Among the most eagerly awaited are Apple’s iPhone -- which brings together the capabilities of a cell phone and an iPod music player along with other features associated with personal computers -- and Apple TV which allows users to play the movies and TV shows they download from iTunes on their big...
Jan 24, 2007•15 min
Business has long been likened to warfare according to Wharton marketing professor Scott Armstrong so it is hardly surprising that companies strive to beat their competitors and wrest away as much market share as possible. But such efforts not only waste time and energy they can actually be detrimental to the firm’s profitability according to Armstrong. Based on new research and examples from today’s business environment Armstrong and co-author Kesten Green suggest that overemphasis on market sh...
Jan 24, 2007•10 min
Do your Hindu Sikh and Jain coworkers need a three-day weekend in November to celebrate Diwali? Have you ever asked Muslim employees to help design products destined for a Southeast Asian market? Did you know one colleague urging another to accept Christ as a personal savior is a legally protected act? In the world of corporate diversity and inclusion first there was race then gender and ethnicity then sexual orientation. Now religion is knocking at the door and according to some experts and pra...
Jan 24, 2007•17 min
There’s a saying in show business: Never follow an animal act. Yet that was the tough task facing Mitchell Caplan CEO of E*Trade Financial Corp. when he took the floor to deliver a speech at Wharton -- with the audience still laughing over a clip from a notorious E*Trade ad that aired during the 2000 Super Bowl. Caplan didn’t falter however and went on to discuss how he had helped rescue a company that four years ago seemed on the brink of extinction. Hosted on Acast. See acast.com/privacy for m...
Jan 24, 2007•11 min
The sports world went into overdrive this month when it was announced that soccer star David Beckham had signed a landmark five-year sports contract worth an estimated $250 million to play soccer with the Los Angeles Galaxy. But what many Wharton sports and marketing experts are wondering is whether Beckham can live up to the hype surrounding the deal and produce enough star power to not only boost the team’s revenue but also raise the profile of Major League Soccer in the U.S. Hosted on Acast. ...
Jan 24, 2007•12 min
Apple’s name change from Apple Computer to Apple on January 9 highlights the company’s new reality: CEO Steve Jobs’ strategy today revolves around converged consumer devices much more than around personal computers. How successful will this new strategy be in the face of competition from Microsoft Sony Motorola Samsung Nokia and others who are looking to dominate the digital convergence domain? Hosted on Acast. See acast.com/privacy for more information....
Jan 24, 2007•15 min
These days almost every company worth its balance sheet insists that it invests in ”innovation.” But does it make or lose money on these investments? That is the question that James Andrew and Harold Sirkin tackle in their new book titled Payback: Reaping the Rewards of Innovation. According to the authors who are senior vice presidents and directors of The Boston Consulting Group a new idea is just an invention -- and not a true innovation -- unless it generates financial returns. In an intervi...
Jan 10, 2007•18 min
When Richard ”Dick” Fuld took charge of Lehman Brothers as CEO in 1994 the firm was famous on Wall Street for the bitter internal feud between traders and investment bankers that had cost Lehman its independence a decade earlier. Fuld who had sided with fellow traders in the battle knew he would have to make peace with the bankers and create a culture based on teamwork if the firm wanted to compete in a new era of integrated financial services. ”The early Lehman Brothers was a great example of h...
Jan 10, 2007•9 min
In her keynote address at the 28th Annual Wharton Women in Business Conference in Philadelphia Thia Breen president of Estee Lauder Americas and head of Global Business Development told the audience that she was nearly fired from her first job. ”That was the moment I started to understand: I am totally responsible for my own success ” said Breen whose first job out of college was unloading shipments of toys at Marshall Fields. Hosted on Acast. See acast.com/privacy for more information....
Jan 10, 2007•10 min
After years of a declining stock price Home Depot announced the resignation of CEO Robert Nardelli on January 3. Wharton faculty members and other experts say Nardelli a talented former executive at General Electric who came within a hair’s breadth of replacing Jack Welch as head of the giant conglomerate brought the wrong toolbox to the job after he was recruited for Home Depot’s top spot in December 2000. With strategic missteps an outsized compensation contract and a knack for alienating empl...
Jan 10, 2007•15 min
Richard F. Syron chairman and CEO of mortgage-securities giant Freddie Mac says he remains ”bearish” on the housing market and sees a rising tide of mortgage defaults and foreclosures on the horizon. He doesn’t believe a rebound will happen until late summer 2007 when the nation’s housing inventory bloated from weak sales gets whittled down. Syron spoke with Knowledge at Wharton before delivering a Wharton leadership lecture. Hosted on Acast. See acast.com/privacy for more information....
Jan 10, 2007•11 min
For Microsoft 2006 was a year of new product introductions: the Windows Vista operating system a new version of Office and the Zune music player to name a few. For Microsoft CEO Steve Ballmer -- who spoke at Wharton recently as part of the school’s Leadership Lecture series -- these new products serve as a reminder of his goals: Convince customers that Microsoft’s latest products are ground-breaking transform a company with $44 billion in sales into an agile innovator compete against new busines...
Jan 10, 2007•16 min
Rodrigo Jordan a management professor at the Pontifical Catholic University of Chile is a world-class mountaineer. He has led written about and filmed Chilean expeditions to Mount Everest K2 and Antarctica and has drawn on these experiences to found Vertical S.A. a company that uses outdoor education to teach leadership and teamwork. Jordan was recently named chair of Chile’s National Poverty Foundation a non-governmental organization (NGO) dedicated to social development. Knowledge at Wharton o...
Jan 10, 2007•12 min
With private equity investors of all types flush with cash -- from venture capitalists and hedge funds to large leveraged buyout (LBO) firms such as The Blackstone Group and The Carlyle Group -- private financing hit record levels in 2006 and is likely to remain strong in the new year according to Wharton faculty and industry analysts. Nearly a third of the dollar value of all U.S. acquisitions last year involved private equity firms up from 3% five years ago. But just how long can this boom con...
Jan 10, 2007•14 min
Your mother probably told you that it pays to be nice but that may not necessarily be true when it comes to corporate philanthropy. Wharton finance professor Vinay B. Nair and Columbia University’s Raymond Fisman and Geoffrey Heal looked at whether being charitable -- such as donating money to medical research or to organizations that promote economic self-sufficiency -- helps a company’s financial picture. The answer: It all depends on the type of industry. Hosted on Acast. See acast.com/privac...
Jan 10, 2007•9 min
Marketers have long used all sorts of demographic and geographic data to target potential customers -- age sex education level income zip code. But there’s another variable that companies may want to consider: Who is connected to whom? A study co-authored by Wharton professor of operations and information management Shawndra Hill found that consumers are far more apt to buy a company’s product if they are ”network neighbors” with existing customers. Hosted on Acast. See acast.com/privacy for mor...
Jan 10, 2007•11 min
Try applying traditional metrics like cost and return on investment to find the value of diversity and you are likely to come up empty handed according to a panel of African-American executives at Wharton’s 33rd Annual Whitney M. Young Memorial Conference. Still they noted diversity has a growing importance in the workplace and minority workers need to focus on their own development in such critical areas as mentoring and balancing corporate identity with activism. Hosted on Acast. See acast.com...
Jan 10, 2007•12 min
For many the 2008 Beijing Olympics are seen as a ”coming-out” party for the world’s most populous nation. China is investing billions of dollars in sports venues such as the Bird’s Nest in Beijing the modernist national stadium currently under construction; subway-line extensions and other infrastructure improvements to make the games a world-class spectacle. But some wonder whether air pollution will crash China’s Olympic party and focus world attention on deepening environmental problems that ...
Jan 10, 2007•10 min
Alexandra Robbins’ study of contemporary American high school culture entitled The Overachievers: The Secret Lives of Driven Kids is based on a visit to the high school she attended more than a decade ago and which she says has now changed for the worse. These days Whitman High School in Bethesda Md. promotes a ”competitive frenzy” that the author argues has taken root in high schools across the country and has led to overstressed over-scheduled teenagers growing up in a culture that is excessiv...
Jan 10, 2007•12 min
Reliance Gateway Net VSNL Scandent and GHCL aren’t exactly household names in the U.S. but they may be signs of bigger things to come. These are only a few of the growing number of Indian businesses that have acquired U.S. firms in the past few years. And the U.S. merger-and-acquisition activity is just part of a bigger picture. Indian companies -- usually quietly but sometimes with media fanfare -- have been on a buying spree in continental Europe Great Britain and Asia in attempts to become ke...
Dec 13, 2006•15 min
In 1998 Microsoft executive John Wood decided to take a rare and hard-won vacation. He started out trekking in Nepal and ended up establishing a foundation Room to Read that has created nearly 3 000 libraries in the developing world and stocked them with more than one million books. His experiences are chronicled in a recently-published book that offers his corporate-based perspective on how to raise money market the product leverage relationships and ultimately maximize results. Hosted on Acast...
Dec 13, 2006•11 min
When it comes to price wars Wharton marketing professor Z. John Zhang can’t help but notice that companies in the West and companies in China are quite literally worlds apart. In the West Zhang says the outbreak of a price war is viewed as the failure of managerial rationality. In China the outbreak of a price war is considered a legitimate and effective business strategy. In a recent paper Zhang and Dongsheng Zhou a marketing professor at the China Europe International Business School in Shangh...
Dec 13, 2006•18 min
Amazon plans to sell computing power like a utility company sells electricity. Google is building a suite of productivity software programs connected to the web to take on Microsoft. And Yahoo has launched or acquired so many properties that they run the risk of competing with each other. Such efforts could represent new growth areas and smart diversification moves. Or they could prove to be costly distractions. The big question: Should a company stay focused on its core competencies or should i...
Dec 13, 2006•13 min
Fortune 500 companies claim to be ”entrepreneurial ” as do charities and government agencies. Members of many Washington think tanks dub themselves ”policy entrepreneurs.” Even children who mow lawns and run lemonade stands get the ”entrepreneur” label. But as the term has come into wide use its meaning has gradually eroded leaving open the question of who entrepreneurs really are and what distinguishes their ventures from conventional ones. The recent 2006 Wharton Entrepreneurship Conference in...
Dec 13, 2006•14 min
”Black Friday” -- the day after Thanksgiving that signals the start of the holiday shopping season in the U.S. -- was particularly charged this year marked by midnight store openings and brawls over scarce sale items. Despite the hoopla retailers are expected to post only modest gains this month according to Wharton faculty and retail analysts. A key problem they note is that shoppers continue to procrastinate on holiday purchases despite highly visible early-season marketing promotions. The one...
Dec 13, 2006•12 min
Although far from a done deal US Airways’ hostile bid to acquire bankrupt Delta Air Lines would result in a strong combined company and would be a feather in the cap of the chief executive of US Airways. But it would also be a mixed blessing for passengers resulting in more flight choices but most likely higher fares as well according to faculty members at Wharton and industry analysts who also note that the overture could lead to further consolidation in the industry. Hosted on Acast. See acast...
Nov 29, 2006•13 min
