Most energy experts agree that global warming is a serious threat and they also agree that green technology has the power to fundamentally reshape how business gets done. But at this early stage these experts -- including investors -- are finding it hard to separate truth from exaggeration when it comes to the benefits that green technology can offer. That was the consensus of industry speakers at the recent Wharton Energy Conference who participated in panels on renewable energy oil and gas ene...
Jan 21, 2008•13 min
When Givenchy dressed Audrey Hepburn for her role in the 1961 film Breakfast at Tiffany’s luxury was still exclusive the particular provenance of the refined social elite. By 1980 all that was changing. When Brooke Shields announced that nothing came between her and her Calvins the message was not that Calvin Klein jeans were for her alone; it was that they were for everyone. In the 20-year span between the film and the ad luxury entered the mass market -- and quite arguably stopped being truly ...
Jan 18, 2008•15 min
After riding a wave of unprecedented industry growth an established technology manufacturer experiences a sudden market downturn. What should it do? Whereas managers often push for quick bottom-line analysis when facing uncertainty Wharton management professor Sarah Kaplan says that the best move might be to encourage employees to engage in ”framing contests ” in which they champion alternative strategy scenarios. In a new research paper titled ”Framing Contests: Strategy Making under Uncertaint...
Jan 14, 2008•12 min
Though the subprime mess and rising oil prices slammed the U.S. economy during much of 2007 other emerging markets -- especially China and India -- seem to be on a roll. China’s growth rate of more than 11% is likely to continue and India too should be able to sustain a high rate of GDP growth even if it slows from last year’s 9%. Latin America meanwhile is cautiously optimistic but could see a moderate decline in 2008. The Knowledge at Wharton Network sites -- including Universia Knowledge at W...
Jan 09, 2008•35 min
At the beginning of 2008 crude prices are at record highs creating immense wealth for oil-exporting nations in the Middle East. Yet the Arab economies also face what economists call ”a demographic bulge of a fast-growing labor force” -- and the challenge of creating enough jobs for the population. This is happening at a time when the arrival of China and India is raising the competitive stakes for other emerging economies that want to make their mark on the global economic stage. How are the Ara...
Jan 09, 2008•17 min
In Germany labor unions traditionally have had seats on corporate boards. At Japanese firms dozens of loyal managers cap off careers with a stint in the boardroom. Founding families hold sway on Indian corporate boards. And in China Communist Party officials are corporate board fixtures. But as companies continue to globalize should they consider adopting one uniform model of corporate governance? Or do global investors benefit from diverse governance structures? Wharton faculty and others offer...
Jan 09, 2008•15 min
This month more than half of Americans probably made health-related New Year’s resolutions but few are likely to stick to them. Employees at CFI Westgate Resorts in Orlando Fla. might consider themselves lucky: They have an incentive to get healthy. If they join in the company-wide weight-loss contest and reach their goals they could win cash prizes or a luxury vacation. Westgate isn’t the only employer trying to push employees especially obese ones into healthy lifestyles. But using incentives ...
Jan 09, 2008•15 min
The ability to ”connect the dots” -- work the connections between local conditions and global forces and between the non-profit private and government sectors -- is necessary whether you work in the private sector or for a conservation group according to Carter S. Roberts president and CEO of the U.S. World Wildlife Fund (WWF). During a recent Wharton Leadership Lecture Roberts spoke about corporations’ responsibility to promote environmental initiatives the need for communication skills the WWF...
Jan 09, 2008•15 min
The January 3 Iowa caucuses and the January 8 New Hampshire primary showcased the 2008 presidential campaign’s ongoing political dogfight as candidates battled for their parties’ nominations. Under the surface however the scrum represents a tipping point in the use of the Internet as a campaign tool say experts at Wharton. In many respects the 2008 race resembles any sophisticated Internet marketing campaign that lets consumers swap information connect with friends and perhaps make a purchase --...
Jan 09, 2008•12 min
Contrary to management theories developed in the Industrial Age employee satisfaction is an important ingredient for financial success according to a new research paper by Wharton finance professor Alex Edmans. His findings also challenge the importance of short-term financial results and may have implications for investors interested in targeting socially responsible companies. The paper is titled ”Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices.” Hosted o...
Jan 09, 2008•11 min
Western companies looking to do business in Asia especially in China don’t always confront a homogenous market and the ways that consumers make decisions about what to buy aren’t always predictable according to a group of marketing experts who spoke at the 2007 Wharton Asia Business Forum. Like developed-world consumers many urban Chinese people are technologically savvy and comfortable seeking product information on the web. But unlike them they don’t typically show brand loyalty and are often ...
Jan 09, 2008•9 min
For the third time in the past few months the Federal Reserve’s Open Market Committee has chosen to cut short-term interest rates by a quarter percent or 25 basis points. The Fed cut its main short-term rate target to 4.25% and the ”discount rate” charged on direct Fed loans to commercial banks to 4.75%. In its statement justifying the decision the Fed noted ”Incoming information suggests that economic growth is slowing reflecting the intensification of the housing correction and some softening ...
Dec 12, 2007•16 min
Fansumers viral videos and social computing -- these are just some of the many buzzwords pinging around the marketing world today. While making sense of them isn’t easy the concept behind them is clear: Online technologies allow customers to communicate in new ways with one another and companies must decide whether to ignore co-opt or dive into these new waters of interactivity. ”Consumers want to feel they are being heard and they love having an impact on the future development of products ” sa...
Dec 12, 2007•14 min
Fire your bad customers. That piece of advice has become widely accepted in recent years as companies have sought to manage their relationships with customers in more sophisticated ways. The rationale is clear-cut: Low-value customers end up costing more money than they provide. So why not jettison them and focus your customer-relationship efforts on more profitable individuals? Or as an alternative why not try to increase the worth of the low-value customers to your firm? Not so fast suggests a...
Dec 12, 2007•10 min
The Abu Dhabi government is buying a 4.9% stake in Citigroup for $7.5 billion. UBS is selling a 10.8% share to the government of Singapore and an unnamed Middle Eastern investor for $11.5 billion. Two Middle Eastern government funds now own a third of the London Stock Exchange. Governments through investment pools known as sovereign wealth funds have put tens of billions of dollars into Western financial firms this year. But is foreign ownership -- or more precisely foreign government ownership ...
Dec 12, 2007•12 min
A generation ago the only financial goal for a superstar African-American athlete at the peak of his career -- beyond a large contract -- was to nab a lucrative endorsement deal with a big sneaker company like Nike or a national brand such as McDonald’s. The idea was to earn several million extra dollars before his skills began to wane. Those short-term goals remain but today many in the National Basketball Association or the National Football League want something more substantial -- like a lon...
Dec 12, 2007•10 min
The event was a contest designed to highlight the ways that advanced marketing science can improve the bottom line. The place was the recent Practice and Impact of Marketing Science 2007 conference held at Wharton. And the winner was the National Academies Press (NAP) the book-publishing arm of the National Academy of Sciences which presented information on how marketing research had helped it realize a common but often elusive goal -- reaching as many customers as possible at the highest attain...
Dec 12, 2007•11 min
On November 6 Facebook outlined a strategy to integrate more targeted advertising into its popular social networking website. Facebook CEO Mark Zuckerberg saw the new initiative as an opportunity for users to refer products to each other and allow friends to share information as they shopped online and visited other websites. The system called Beacon was also intended to lead to more relevant -- and profitable -- advertising through precise targeting based on a user’s buying habits social circle...
Dec 12, 2007•17 min
Anyone who has popped open a bottle of wine will agree with George Taber that it is one of the few sounds in the world that brings true joy to the listener. But if the opponents of cork have their way that sound might disappear as Taber a veteran business journalist and author explains in his new book To Cork or Not to Cork: Tradition Romance Science and the Battle for the Wine Bottle (Scribner). As Taber tells it although cork has been used to seal virtually every bottle of wine for nearly thre...
Dec 06, 2007•17 min
McDonald’s operates the biggest restaurant chain in France. The company’s franchisees are French as are their employees and they also source their supplies from France. And yet most people in that country regard McDonald’s as an American firm that is undermining the French way of life. That is a good example of how the question of corporate identity has become complex and confused today because of globalization according to Hamid Bouchikhi professor of management and entrepreneurship at ESSEC an...
Dec 06, 2007•38 min
Almost every day a new twist seems to appear in the subprime crisis drama. This week the investment arm of the government of Abu Dhabi announced an infusion of $7.5 billion to acquire a 4.9% stake in Citigroup which has been slammed by enormous losses in the credit market. The announcement came on the heels of a report from Bank of America that the subprime mess is about to get messier as interest rates ”reset” -- or rise -- on more than $360 billion worth of adjustable rate subprime mortgages. ...
Nov 28, 2007•29 min
On November 19 Amazon.com CEO Jeff Bezos announced the launch of an e-book device called Kindle. It weighs 10.3 ounces costs $399 and can be used without a computer offering instead a free high-speed wireless data network from Sprint. Users can download books in less than 60 seconds as well as newspapers magazines and blogs (for a fee). The device uses an eye-friendly screen and lets readers increase the type size as needed. Will it be a hit even though most other e-book efforts have been unsucc...
Nov 28, 2007•26 min
Not long ago a global corporation decided it wanted to help children in the southern African nation of Namibia -- and so it spent millions to donate scores of new computers and television sets for the classrooms in a particular region of the country. They should have talked to someone like Jonathan Johnnidis first. The rural aid worker had information the large corporate benefactor apparently did not -- that there is no electricity grid in that area. Johnnidis and others talked about aid initiat...
Nov 28, 2007•10 min
Meet the new consumers of the new media age. They want things to be better faster cheaper and even more important free according to AOL vice chairman emeritus Ted Leonsis who is considered an Internet pioneer and whose business portfolio over the years includes an impressive array of online companies. ”We’re living in a world where consumers have taken control of everything ” he noted. Leonsis a keynote speaker at the recent Wharton Entrepreneurship Conference 2007 offered his thoughts on making...
Nov 28, 2007•9 min
On October 4 Microsoft launched HealthVault a free web-based service that allows users to store their medical records online and eventually share them with doctors. On October 17 an executive at Google noted the company’s interest in health information services. And on November 19 23andMe announced a program that will allow consumers to pay $999 for the privilege of exploring their own genomes. These efforts could give patients more control over their medical records and let them share informati...
Nov 28, 2007•15 min
The recent departures of two chief executives -- Stanley O’Neal of Merrill Lynch and Charles Prince of Citigroup -- in the wake of major financial losses at their firms have focused renewed attention on the issue of succession planning. Published reports speculated that both positions would be filled by outside candidates and on November 14 Merrill Lynch announced that it had chosen John Thain CEO of NYSE Euronext to succeed O’Neal. While such a move is not surprising for a board wanting to sign...
Nov 28, 2007•14 min
When it comes to shopping women are from Nordstrom’s and men are from Sears. Women are happy to meander through sprawling clothing and accessory collections or detour through the shoe department. For men shopping is a mission. They are out to buy a targeted item and flee the store as quickly as possible according to a new study by Wharton’s Jay H. Baker Retail Initiative and the Verde Group a Toronto consulting firm. The study’s findings have implications for retailers that are looking for ways ...
Nov 28, 2007•12 min
At a time when many barriers to global trade have fallen countries all over the world are taking steps to harmonize their accounting standards and develop a truly global language of business. Under the lead of the International Accounting Standards Board (IASB) more than 100 countries have either implemented International Financial Reporting Standards (IFRS) or plan to do so. Yet while proponents of accounting harmonization say that IFRS will ultimately benefit firms and investors Wharton accoun...
Nov 28, 2007•10 min
At the end of October the Federal Reserve gave the financial markets just what they had been asking for: a 0.25% cut in the federal funds rate. But in early November stocks plunged and the dollar hit a new low. Applause turned into hand-wringing -- then back to applause as the markets rebounded in the middle of the month. Why can’t the experts make up their minds? Is the outlook good or bad? According to Wharton faculty forecasting is particularly hard now because some of the key factors -- such...
Nov 14, 2007•11 min
When Merrill Lynch reported solid second-quarter earnings last July chairman and CEO Stan O’Neal sent employees a memo boasting about the firm’s risk management prowess. Only three months later Merrill Lynch took its historic $8.4 billion write-down for losses in mortgage-related securities with Citigroup and others soon reporting unprecedented credit losses as well. If the capital markets are models of efficiency it is fair to ask how could such staggering losses happen? Two Wall Street titans ...
Nov 14, 2007•10 min
