With $2.5 trillion invested in 401(k) retirement accounts 60 million Americans control a powerful chunk of cash. So how much attention do investors pay to this vast pool of savings? Not much. According to a new Wharton analysis of retirement accounts managed by The Vanguard Group in 2003 and 2004 participants in 401(k) plans made little effort to tend their defined-contribution plans once they were set up. Even among those who did trade regularly turnover rates were one-third those of profession...
Mar 08, 2006•10 min
When Merrill Lynch decided this month to sell its asset-management operation to BlackRock -- a money manager serving wealthy investors and institutions and best known for its conservative focus on bonds and risk-management products -- analysts and investors cheered bidding up the shares of both companies. By acquiring Merrill’s $539 billion mutual fund family BlackRock will quickly broaden its stock-fund offerings and its appeal to retail customers. Merrill by acquiring just under 50% of BlackRo...
Mar 08, 2006•9 min
The avian flu that is steadily making its way around the globe represents a huge challenge for governments corporations and citizens worldwide. No one knows what will happen to the avian influenza virus in the coming months and years. Will it mutate into a strain that will allow people to readily infect others? Or will it fizzle out? Despite the uncertainty many people are taking into account scenarios ranging from mild to severe in order to plan for what could turn out to be a calamity. Faculty...
Mar 08, 2006•16 min
Last fall Spain’s Banco Santander Central Hispano announced that it would pay $2.4 billion for a 20% stake in Philadelphia-based Sovereign Bank. It was a deal that didn’t surprise Wharton management professor Mauro Guillén who has been watching the strategic moves of the bank since the late 1980s. But Guillen’s interest goes beyond Banco Santander. In a recently published book titled The Rise of Spanish Multinationals: European Business in the Global Economy Guillén explores why and how Spanish ...
Mar 08, 2006•9 min
With its acquisition of Macromedia on December 3 2005 Adobe Systems has become the fifth largest software company in the world. It currently controls two of the dominant formats for electronic content -- the Adobe Acrobat PDF format for electronic documents and the Flash SWF format for interactive web content. Looking ahead CEO Bruce Chizen’s goal is to have Adobe provide the interface for any device with a screen -- ”from a refrigerator to an automobile to a video game to a computer to a mobile...
Mar 08, 2006•25 min
Numerous American industries are being battered by lower-cost competition from abroad. But the U.S. entertainment sector is poised to profit amid the onslaught say Hollywood executive Jeff Berg and Wall Street investor Suhail Rizvi. Berg chairman of International Creative Management talent agency has made his career in Hollywood; Rizvi head of a private equity firm recently invested (along with Merrill Lynch) about $100 million in ICM. But Berg and Rizvi’s partnership rests on clear-eyed strateg...
Mar 08, 2006•10 min
When Rebecca Rimel president and CEO of the Philadelphia-based Pew Charitable Trusts describes the challenges she faces running a $4.6 billion organization she uses the same words one hears from leaders in the for-profit world: ”highly strategic ” ”politically aware ” ”leveraged” and ”accountable.” But her bottom line is impact not profits. ”We are highly driven to make a difference in the key issues that matter to the health and happiness of our stakeholders -- the public ” she said during a re...
Mar 08, 2006•12 min
For Oracle the past few months have been one big shopping spree. On January 31 the enterprise software giant purchased longtime rival Siebel Systems the leading provider of customer relationship management software. On February 14 it acquired Sleepycat an ”open source” database maker; two days later it bought HotSip AB a Swedish telecommunications software provider. For many companies Oracle’s month would have been a year’s worth of merger and acquisition activity but for the Redwood Shores Cali...
Mar 08, 2006•10 min
During her first few months in office German Chancellor Angela Merkel has attained the kind of approval rating that politicians the world over dream about largely due to the way she has handled herself on international matters in visits to Washington Moscow and Brussels. But her main challenge is Germany’s economy Europe’s largest and the world’s third biggest. It is a challenge that has been staring German leaders in the face for a long time for a number of reasons: lackluster GDP growth over t...
Mar 08, 2006•17 min
What do images of a crew team geese flying in formation trees silly putty and a steering wheel have in common? They all are part of how undergraduate business students at Wharton depict and describe the essence of leadership. Since 2000 Wharton freshmen have been required to participate in Images of Leadership a project sponsored by Wharton’s undergraduate leadership program led by director Anne M. Greenhalgh and associate director Christopher I. Maxwell. In a recent report called Images of Lead...
Mar 08, 2006•10 min
When consumers have a bad shopping experience they are likely to spread the word not to the store manager or salesperson but to friends family and colleagues. Overall if 100 people have a bad experience a retailer stands to lose between 32 and 36 current or potential customers. These are some of the conclusions of The Retail Customer Dissatisfaction Study 2006 conducted by The Jay H. Baker Retailing Initiative at Wharton and The Verde Group a Toronto consulting firm in the weeks before and after...
Mar 08, 2006•10 min
Professional athletes face unusual challenges related to financial management especially since their peak earning period lasts a relatively short time often just a few years. Knowledge at Wharton asked Ken Shropshire professor of legal studies and business ethics and director of the Wharton sports business initiative to discuss this topic with Kailee Wong linebacker for the Houston Texans. Wong attended an executive education program at Wharton co-sponsored by the NFL and NFLPA. Hosted on Acast....
Mar 03, 2006•10 min
Business leaders from two hot investment sectors -- real estate and energy -- discussed possible consolidation in their industries and other trends during two panels at the February 1 Wharton Economic Summit in New York City. The first panel entitled ”Real Estate: Where It’s at and Where It’s Headed. A Discussion with Three Legends ” included William Mack Sam Zell and Mortimer Zuckerman. The second panel ”The State of Energy Investing: What’s Fueling Consolidation? ” included a range of experts ...
Mar 03, 2006•11 min
It took prosecutors just over four years to work their way up the Enron food chain but now the failed energy company’s top former executives Kenneth Lay and Jeffrey Skilling are facing a jury in a federal criminal fraud trial expected to last at least four months. How can each side best present a complex story that involves exotic derivatives products off-books accounting and strange subsidiaries with names like Raptor? Experts say they should apply lessons learned in the other high-profile corp...
Mar 01, 2006•8 min
Cell phones that do email take photos and surf the web. Cars with options ranging from built-in satellite radio to rain-sensing wiper blades. While a seemingly endless variety of new products may delight consumers it makes inventory management as dicey as predicting what a teenager will want for her birthday next year. The problem say Wharton professor Serguei Netessine and Wharton doctoral student Serguei Roumiantsev is that no one knows how to measure the quality of supply chain management usi...
Feb 22, 2006•8 min
The emergence of China and India figured prominently at the World Economic Forum annual meeting in Davos last month. In India’s case however another factor also was at work. Determined not to be overshadowed Indian business and government leaders spent some two years and $4 million planning an elaborate branding campaign to ensure that the ”India story” got prominent play and did not get lost amid the chatter at Davos. How does a country go about building its brand though such PR campaigns? And ...
Feb 22, 2006•18 min
Since announcing on October 6 2004 that it had signed Howard Stern to a five-year deal Sirius Satellite Radio has added approximately 2.7 million subscribers and become a household name in the satellite radio world. The tab: Close to $700 million. Is Stern worth it? Can the popular and raunchy talk show host catapult Sirius ahead of rival XM Satellite Radio or are there other issues to consider such as the threat of new technologies the need to provide good content and the continuing popularity ...
Feb 22, 2006•12 min
Carl Icahn’s battle for Time Warner has just intensified. Icahn the corporate takeover specialist attempting to win control of the media giant held a press conference yesterday to announce a plan to break Time Warner into four separate companies and buy back $20 billion in stock -- all part of his crusade to oust management for the benefit of shareholders. His press conference followed a speech last week at the 2006 Wharton Economic Summit in which he denied that he is an ”imperial shareholder” ...
Feb 22, 2006•9 min
The disclosure that author James Frey lied in his best-selling book A Million Little Pieces and the furor that followed raise numerous questions about truth in advertising trust between sellers and buyers brand image and reputation as well as two themes that Frey himself focused on in his now-discredited memoir of recovery from substance abuse -- suffering and redemption. How widespread is deception when is stretching the truth acceptable how jaded are consumers towards the claims made by advert...
Feb 22, 2006•13 min
At the annual meeting of the World Economic Forum in Davos last month the extraordinary optimism of Asian -- especially Chinese and Indian -- leaders held center stage. For Michael Useem director of Wharton’s Center for Leadership and Change it all felt very déjà vu: In the late 1990s a similarly exuberant spirit surrounded American business leaders. But the hubris of unbounded optimism can be dangerous warns Useem who spoke in three Forum sessions. Hosted on Acast. See acast.com/privacy for mor...
Feb 22, 2006•8 min
Apple’s iPod again ruled beneath the Christmas tree in 2005 after the latest model of the iconic music player was outfitted with a video screen. And as the new year begins a long-anticipated era of convergence in consumer technology products draws closer according to Wharton faculty and technology analysts. Meanwhile cell phones that play video e-mail delivered to handheld computers telephone conversations over the PC -- and hundreds of other glimpses into Christmas future -- were on display at ...
Feb 08, 2006•13 min
Compensation for American CEOs has soared over the past decade far exceeding inflation and wage gains of ordinary workers -- and leading critics to charge that self-serving insiders have tilted the playing field at shareholders’ expense. In response the Securities and Exchange Commission on January 17 took the first step toward adopting rules to better show shareholders how much their top executives and directors are paid. Will that drive executive pay down? Probably not say several Wharton prof...
Feb 08, 2006•12 min
Walt Disney announced yesterday that it is acquiring Pixar the animated film studio that has made such hits as The Incredibles Finding Nemo and Toy Story. As part of the $7.4 billion deal Pixar’s founder Steve Jobs will become a Disney board member and also its biggest shareholder. In an audio-only interview Wharton marketing professor Peter Fader speaks with Mukul Pandya editor-in-chief of Knowledge at Wharton and Robbie Shell editorial director about the implications of this deal not just for ...
Feb 08, 2006•9 min
Would you like to go on an Internet auction site and know how much to bid for a certain item -- and also know that you didn’t overpay for that item? How about when you sell an item in an online auction: Would you like to know what price to set that ensures you don’t leave money on the online table? Wharton marketing and statistics professor Eric T. Bradlow can’t provide specific answers. But he does offer guidance on the behavior of potential buyers in a new study entitled ”An Integrated Model f...
Feb 08, 2006•9 min
When the door to a TLA Entertainment video store swings open the primary question facing most consumers shuffling inside is relatively simple: ”What movie will I take home tonight?” But to Wharton marketing professor Jehoshua Eliashberg and Wharton doctoral candidate George Knox the key question surrounding the burgeoning $12 billion home-video market goes at least one step further: Which consumers will rent their movie of choice tonight and which consumers will buy? In a study entitled ”The Con...
Feb 08, 2006•11 min
Although it has one of the most dynamic economies in Africa Botswana also has one of the world’s highest known rates of HIV-AIDS infection. In response the Botswana government along with the Medical School of the University of Pennsylvania and Wharton’s Sol C. Snider Entrepreneurial Research Center is helping develop a more efficient system to manage and monitor HIV/AIDS therapy. According to Ian C. MacMillan director of the Snider Center and James D. Thompson associate director of Wharton Entre...
Feb 08, 2006•9 min
IBM. Verizon. Sears. Hewlett-Packard. Motorola. The list of corporations that have put a halt to guaranteed pension plans comes as a jolt to Baby Boom employees entering what they thought would be their peak pension-building years. At the same time new accounting rules and Congressional legislation are being drafted to close the U.S. pension-funding gap now estimated at $450 billion. While some proposals under discussion could make it easier for companies to discontinue defined-benefit plans oth...
Feb 08, 2006•12 min
Big media players are accustomed to watching the ratings for the most popular music video and book content but perhaps they should pay more attention to how consumers feel about three letters at the bottom of most charts -- DRM which stands for digital rights management. Broadly defined DRM encompasses multiple technologies that control the use of software music movies or any other piece of digital content. But media companies are risking a consumer backlash by deploying overzealous systems with...
Feb 08, 2006•11 min
China’s securities industry is just one of the sectors moving ahead at a dizzying pace as the country readies itself for full entry into the World Trade Organization this year according to participants in the recent Wharton Global Business Forum’s Asia Conference. Not surprisingly China dominated discussion at the conference with many speakers noting the speed with which the country is advancing. But growth is not just confined to China. The 21st century said one panelist will be the ”Asian cent...
Feb 08, 2006•9 min
The turmoil and uncertainty among auto manufacturers and their suppliers have left people wondering when a shakeout can be expected. According to Wharton management professor John Paul MacDuffie and Christopher Benko director of the PricewaterhouseCoopers Automotive Institute in Detroit consolidation will take place among suppliers to a much greater extent than among carmakers which may not experience mergers and acquisitions at all in the near term but will be engaged in ever-shifting strategic...
Jan 25, 2006•12 min
