Knowledge at Wharton

Just a year ago ethanol was the renewable fuel of the moment. Derived mostly from corn grown in America’s heartland it was promoted as a home-grown ticket to energy independence for the U.S. and other oil-importing nations. Today however ethanol’s prospects look somewhat cloudy. Critics around the world are crying foul over rising food prices while others say that it takes more resources to create...

Credit market turmoil is altering the global playing field in buyouts and acquisitions a field rife with complaints in recent years about too much money chasing too few good deals. The credit shortage puts pressure on pricing and transactional quality while also giving public companies a better shot at acquisitions that the more aggressive private equity firms might previously have snatched away....

Middle managers are often referred to as the ”glue” that holds companies together bridging the gap between the top management team and lower level workers. They implement strategy and organizational changes keeping workers engaged during both good times and bad. Yet according to a recent survey of middle managers around the world 20% report dissatisfaction with their current organization and that...

Nearly everyone told Matt and Jessica Flannery that their idea -- a website where people could make micro loans to individual borrowers in the developing world -- wouldn’t work. Venture capitalists couldn’t see how anyone could make big money on tiny loans. Foundations wouldn’t support something that they saw as commerce not charity. But the Flannerys persisted and today the website that they crea...

As in any negotiation money and performance will usually make or break a sports contract deal. But emotions can be a wild card according to Wharton Sports Business Initiative director Kenneth L. Shropshire. During a recent Wharton presentation he talked about the non-financial incentives that helped seal contract deals with star athletes Alex Rodriguez Reggie White and others; his relationships wi...

On February 25 2008 Adobe Systems launched version 1.0 of the Adobe Integrated Runtime or ”AIR ” which allows software programmers to use web-development tools to create desktop software applications that run on all the major operating systems: Windows Mac and -- coming soon -- Linux. For Adobe AIR is a big bet. At the launch event CEO Shantanu Narayen described AIR as Adobe’s ”fourth platform ” t...

A decade ago when the Wharton Business Plan Competition (BPC) began the Internet dominated discussions about entrepreneurship. That was before the bubble burst and many dot.coms were revealed to be in the words of New Yorker writer John Cassidy little more than dot.cons. These days the new arena of interest is healthcare specifically biotech as evidenced by the number of biotech-related business p...

For many of the world’s richest families SFOs -- Single Family Offices -- play an essential role in their investment strategy. SFOs manage the family financial portfolio and often provide other services such as handling children’s college applications or managing the family fleet of jets. Up until now however little has been known about these powerful entities. Yet new Wharton research shows that...

Fashionable clothes jewelry flashy cars.... They are all items of conspicuous consumption that give their owners status on the street. Some groups such as blacks and Hispanics seem to spend more on such emblems of success than others. Or is that just a stereotype? In a new research paper Wharton finance professor Nikolai Roussanov and two co-authors found some truth to the ethnic stereotypes on sp...

The controversy over carbon emissions is just one of several surrounding ExxonMobil -- a list that includes gasoline prices surging towards $4 a gallon the company’s push for expanded oil exploration and drilling and its high-profile war of wills with the president of Venezuela Hugo Chavez. Yet during a presentation as part of the Wharton Leadership Lecture series Donald D. Humphreys senior vice p...

If China doesn’t take steps to prevent it a big black cloud may soon engulf its economic boom. The country is growing at a torrid rate but pollution from its hard-chugging industrial engine is expanding even faster according to energy experts at the recent 2008 Wharton China Business Conference. Chinese leaders however have some options including a method to capture the pollutants released when co...

Can a company make money from the work of impoverished people in the developing world without taking advantage of them? For Patrick Byrne the answer is a qualified yes. Byrne believes that he has found a way for his company Overstock.com to benefit while it helps developing-world artisans connect with developed-world customers. But for Chuck Waterfield creator of Microfin -- a software program he...

After Microsoft announced on May 3 that it will drop its $44.6 billion bid to acquire Yahoo many -- including experts at Wharton -- declared the decision to be a smart move. Microsoft they say has more pressing issues including the need to make its flagship operating system Vista more popular among customers as it competes for attention against its predecessor Windows XP and rivals such as Apple’s...

The economy seems to be sinking toward recession with new home sales at their lowest since the early 1990s. At the same time inflation is picking up. Some Americans are paying $4 for a gallon of gas and coming home from the supermarket with sticker shock. Today the Fed deemed recession the bigger worry and cut short-term interest rates by a quarter of a percentage point from 2.25% to 2%. Was this...

The scientific community now overwhelmingly agrees that earth’s 6.5 billion inhabitants are contributing to global warming through heat-trapping greenhouse gas emissions. While various industries are yielding to public pressure to address climate change new carbon emission regulatory regimes are coming soon and they will likely carry significant costs according to experts from business and academi...

Condos in Miami traditional music stores gas-guzzling cars pharmaceuticals that get unfavorable press foods made with trans fats: All marketers from time to time confront products that for whatever reason become difficult to sell. What strategies should companies follow to reposition their products in ways that might attract new audiences or at least retain existing ones? One answer: segmenting. ”...

A thorny question lies at the heart of meaningful health care reform. How much is human life worth? New Wharton research based on Medicare kidney dialysis data shows that the average figure -- $129 090 per additional year of quality life -- is higher than prior studies have shown. Perhaps more important the study also puts a value on the cost-effectiveness of treatment across percentiles of the en...

While China’s manufacturing sector booms and people sock away money in savings accounts the country’s financial markets remain in their infancy according to international finance experts who gathered at the recent 2008 Wharton China Business Conference. One reason for the relative underdevelopment of China’s capital markets they note is the role of the country’s powerful central government. ”Regul...

Is selling police equipment to a notoriously brutal government tantamount to assisting in torture? William Schulz believes that it can be and that these types of sales are one of the principal ways in which businesses find themselves tangled up with torturers. During a presentation sponsored by Wharton’s Zicklin Center for Business Ethics Research Schulz former executive director of Amnesty Intern...

Call it a gold rush of sorts. Gold topped out at more than $1 000 an ounce in mid-March up from about $680 a year ago. Although it dipped to just under $900 late in April it has had a tremendous run up from $350 five years ago. What has driven these price gains? What does gold tell us about the economy’s future? Should ordinary investors buy it? Knowledge at Wharton talks to the experts. Hosted on...

Richard Fain is chairman and CEO of Royal Caribbean Cruises the Miami-based global cruise company that operates 36 ships under the Celebrity Cruises and Royal Caribbean International brands among others. He joined the company in 1981 as an outside director and became chairman and CEO in 1988. He spent 13 years before that at Gotass-Larsen Shipping Corp. a London-based owner and operator of cargo s...

Ask any CEO or senior level executive what his or her biggest challenge is and the answer is almost always finding and keeping good people. Yet most executives fail to manage their company’s needs in a way that recognizes the unpredictability of the global marketplace. In a book titled Talent on Demand: Managing Talent in an Age of Uncertainty Peter Cappelli director of Wharton’s Center for Human...

The ongoing takeover battle between Microsoft and Yahoo has taken several surprising turns over the past few weeks. After rejecting Microsoft’s unsolicited $44.6 billion offer in late February Yahoo has announced a two-week ad testing program with its main search rival Google and has reportedly entertained a possible merger with Time Warner’s AOL. Meanwhile Microsoft was rumored to be considering...

Companies that use compensation consultants end up paying more to their CEOs leading to allegations that these consultants push for excessively high CEO packages because many of them profit from doing other work for the company. A recent Congressional committee report supported the idea that such conflicts drive up CEO pay. But a new Wharton study by accounting professor Mary Ellen Carter and two...

Microfinance -- the business of providing financial services in small transaction amounts to poor underserved markets -- has taken off in recent years. With financial sectors in many developing countries maturing and microfinance institutions (MFIs) themselves growing rapidly capital markets have been quick to enter the fray providing ample funding for expansion. But microfinance’s evolution in co...