Knowledge at Wharton

Gregory Mankiw head of the White House Council of Economic Advisors ignited a firestorm of debate this month when he said outsourcing of U.S. jobs is probably a good thing in the long run. As tends to happen with hot-button issues in presidential election years sensible discussion of this question was soon drowned in an uproar of political posturing. Experts at Wharton and the Boston Consulting Gr...

To celebrate the 25th anniversary of Nightly Business Report the most watched daily business program on U.S. television Wharton and NBR this month announced their list of the 25 most influential business leaders of the past 25 years. Andy Grove co-founder of Intel won the No. 1 position but the list also included Bill Gates Warren Buffett John Bogle Jeff Bezos Jack Welch and Oprah Winfrey among ot...

We might like to believe that the way to get ahead in the corporate world lies in hard work and brain power. But in his new book Career Warfare: 10 Rules for Building a Successful Personal Brand and Fighting to Keep It David F. D’Alessandro chairman and CEO of John Hancock Financial Services a Boston firm that in 2003 managed assets worth $140 billion for its clients stomps firmly on that idea. Ho...

Do cherry pickers – those consumers who are extremely sensitive to price and go from store to store to pick the best-priced items and leave the rest – really save a lot of money? A recent paper by Wharton marketing professor Stephen J. Hoch and Edward J. Fox a marketing professor at the Cox School of Business at Southern Methodist University found that consumers not only save money but that the sa...

You might think that with the passing of another year the corporate scandals that have rocked American business would be showing signs of petering out. They are not. In the past few months disclosures of allegedly unethical or illegal practices have rocked the mutual-fund industry and some of its blue-chip names even as the head of the New York Stock Exchange was forced to resign over the size of...

Leadership doesn’t just start at the top. Leaders can also be found at the bottom of an organization and at just about every place in between. In this special report by Knowledge at Wharton and The McKinsey Quarterly the management journal of consulting firm McKinsey & Co. experts from McKinsey and Wharton point out that regardless of whether people are on the top line or the front line they s...

Actors athletes and executives are among the most populous inhabitants of the rarified atmosphere of multimillion dollar incomes. Why is it then that corporate executives are coming under fire for excessive pay when athletes like Michael Jordan and entertainers like Oprah Winfrey seem to stir no such feelings of resentment? Part of the answer suggest Wharton faculty and others is that people see –...

Managers traditionally have built their careers by concentrating on specific disciplines such as finance or marketing. Such specialization however pales in comparison to the value that executives can generate when they fuse together insights from various fields into a cohesive whole. That was the message that the heads of three companies -- ARAMARK Commerce Bancorp and Contigroup Companies -- deli...

The recording industry has a pricing problem. People do not want to pay $15-20 for a compact disc when they can download the same music for free over the Internet. The industry’s solution appears as novel as the technology that is giving it such headaches: launch hundreds of lawsuits against otherwise law-abiding consumers who download music. As G. Richard Shell a legal studies professor and autho...

The U.S. stock market has jumped and the economy shows signs of perking up but Americans continue to lose jobs. Indeed some economists warn that that many of the nearly three million jobs lost over the past three years are gone for good. What’s in store for the next three months and for 2004? While most economists and market watchers are somewhat optimistic others suggest that the recovery won’t l...

Fans of the hit TV comedy “The Jerry Seinfeld Show” may remember an episode in which Jerry’s friend George leaves his car parked at work so that the boss will think George is putting in long hours even when he’s not. The idea of course is that George’s apparent productivity will net him a higher raise or bonus. Wharton professor Maurice Schweitzer would call George’s behavior “an attempt to invoke...

In recent years Wharton management professor Peter Cappelli has heard companies warn about a coming labor shortage to the point where this prediction is now routinely factored into discussions about human-resource issues. The problem Cappelli found is that no such shortage will occur. In his latest research Cappelli explains how challenges in recruiting and hiring stem from changes in the nature o...

Most people generally understand that the sooner they begin planning for retirement the better. Putting money aside now rather than later means that you will have more assets in the long run. What many people don’t know however is the amount of money they will need to live on in their golden years. Experts at Wharton examine the reasons why people don’t save enough for retirement and what strategi...

Managers have long been interested in weeding out customers that they consider to be less profitable than others. The question is how do managers determine who belongs in that group? According to several Wharton marketing professors there is no easy answer despite new and increasingly sophisticated efforts to measure what is called “Customer Lifetime Value” (CLV) – the present value of the likely...

It’s a familiar scenario: A company brings in a new department head who immediately decides that the way to show leadership is to reorganize. Then a new division head comes on board or a new CEO and there are more reorganizations sometimes several in one month. Yet according to Wharton management professor Peter Cappelli frequent reorganizations “are like doctors treating patients with antibiotics...

Women make or influence the purchase of more than 80% of all products and services. So you might think there would be nothing about women’s buying habits that American businesses don’t know. You would be wrong according to two new books entitled “Just Ask a Woman: Cracking the Code of What Women Want and How They Buy” and “Marketing to Women: How to Understand Reach and Increase Your Share of the...

Prices have been at the center of human interaction ever since traders in ancient Mesopotamia began keeping records. Who doesn’t love to guess what something costs – or argue about what something ought to cost? So it should come as no surprise that companies spend a lot of time figuring out how to price their products and services. But two professors in Wharton’s marketing department Jagmohan S. R...

It’s the best of times … and the worst of times. Best in that participants in this year’s Wharton School Business Plan Competition represented an unusually diverse number of industries. Worst in that the ability of entrepreneurs to raise seed money from venture capitalists is distinctly hobbled by a dismal economy and an equally dismal venture capital industry. Of course what shouldn’t change in g...

How does Southwest Airlines keep making money? After all the airline industry overall is in a shambles. US Airways and United Air Lines are reorganizing in bankruptcy while American Airlines flirts with the same fate. As a group the nation’s biggest air carriers have lost billions of dollars over the past several years with no immediate recovery in sight. Yet the secret to its success said Southwe...

For the second year in a row Wal-Mart topped Fortune magazine’s list of largest companies and is also the magazine’s most-admired firm the first time one company has shared both honors since the annual survey began in 1955. The giant retailer continues to expand worldwide planting giant supercenters as well as new neighborhood-scale markets in its attempt to offer more and more goods to a wider ar...

Call-centers are usually regarded as high-pressure workplaces where pay is often skimpy and turnover is rampant. Employee turnover rates in the industry range from 25% to 45% a year – which poses a problem for employers who invest substantial amounts in training workers only to see them leave. A new study by Emilio J. Castilla a professor of management at Wharton shows that if call-center operator...

Should your firm target your competitors’ customers with lower prices than the competition charges them? When might it make sense instead to offer discounts to your own customers? Under what conditions might this sort of approach – known as “targeted pricing” – backfire by driving everyone’s prices down too far? Recent research by Wharton marketing professor Z. John Zhang and several colleagues ex...

When companies outsource back-office services overseas one of the biggest challenges they face is measuring the results. Failure to monitor whether work is being performed correctly after it moves outside a company can result in massive and costly errors. How can companies protect themselves against such risks? Ravi Aron co-director with Jitendra Singh of a recent Wharton executive education progr...

One of the world’s hottest PC companies has a balance sheet worth envying a dominant position in a fast-growing market and a history of good service and innovative technology. But if you haven’t heard of Legend Computer you can be excused; for the past 19 years the company has confined itself to China. As China transforms and opens though its No. 1 PC maker is coming into the spotlight and it hope...

Is Dell doing everything right? In a sluggish PC market where global shipments only rose by 2.7% in 2002 Dell reported a 21% revenue growth year-over-year in the fourth quarter and their global market share jumped from 13.2% to 15.7%. Meanwhile Dell is a solid number one in the U.S. with 29.2% of the market. They have big plans in China and in printers. Is there any place this powerhouse is vulner...