Knowledge at Wharton

Most industries do not begin on a single day but it’s easy to see Facebook CEO Mark Zuckerberg’s presentation on May 24 2007 as the starting gun in an entrepreneurial race that some have dubbed ”the Facebook Economy.” Zuckerberg announced that the social networking site would open to third-party developers transforming itself into a platform on which other businesses can operate. Eight months late...

On January 10 Amazon.com announced a partnership with Sony BMG Music Entertainment to offer music downloads without digital rights management software which typically limits how content can be used. Amazon now has all four major music labels along with thousands of independent ones selling songs without DRM technology. While DRM may be all but dead in the music industry experts at Wharton point ou...

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...

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 b...

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 st...

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 mo...

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...

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?...

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 em...

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 corpora...

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 marketi...

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 title...

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 pr...

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 eco...

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...

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 alternati...

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 fi...

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...

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 rea...

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 -- a...

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)....

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...

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...

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 incre...

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...