Spring 2008

Spring 2008

Cover Story

  • New World Order

    Across the world, companies in emerging markets are acquiring assets in the U.S., Western Europe, and other developed markets. What does it all mean?

Featured Stories

Articles

  • Wharton Now

    Wharton Faculty in the Global Classroom Bill Gates thinks that business and government can do more to help the world’s poor. In his plenary address at the World Economic Forum (WEF) in Davos, Switzerland in January, Gates offered his expanded version of corporate social responsibility, which would harness the self-interest of free markets to benefit the world’s neediest people. Gates calls his new idea “creative capitalism.” Listening to Gates that day were Wharton professors Howard Kunreuther and Michael Useem, who joined more than 2,000 of the world’s leading business and political figures at the 38th annual WEF meeting. “This event has come to serve as one of globalization’s best classrooms,” said Useem. “For me and many others, Davos constitutes an unrivaled personal window into the global issues of the moment.” At the WEF, Useem moderated a session on “The Rising Influence of Minority Shareholders” and served on a panel about “The DNA of Effective Boards.” Kunreuther participated in three panels: “The Threats of Biotechnology,” “Global Risk,” and “Organizational Risk and Resiliency.” Based on their seminal research at Wharton’s Risk Management and Decision Processes Center, Kunreuther and Erwann Michel-Kerjan, managing director of the Risk Center and a WEF Young Global Leader, along with Wharton professor Witold Henisz, were asked to develop risk scenarios for the WEF’s Global Risks Report 2008. This is the third consecutive WEF global risk report to which the Wharton Risk Center has contributed. “The WEF is interested in mitigating global risks—in preventing the domino effect of a catastrophic event,” says Kunreuther. “Because of interdependencies between nations and industries, catastrophic hazards are only going to get worse.” Indeed, the Global Risks Report 2008 warned of the highest levels of political and economic uncertainty in a decade, expressing fears about a U.S. recession and its effect on world economies, […]

  • Kenya Global Consulting Practicum: Students Arrive

    By Sushant Mukherjee, WG’09 Over winter break, five Wharton MBA students — Sushant Mukherjee, WG’09, James Hogarth, WG’09, Jennifer Akpapuna, WG’09, Kathy Park, WG’09, and Sachin Kaushik, WG’09—went to Kenya for their Global Consulting Practicum project and found themselves in the midst of the country’s dramatic post-election events. Sushant Mukherjee describes his team’s trip in the following article, which first appeared in the Wharton Journal. The Wharton team had converged on Nairobi from locations as far-flung as Kathmandu, Minneapolis, London and New York, to begin work on our Global Consulting Practicum (GCP) project. Our clients were Philip and Katy Leakey, members of one of the most famous families in Kenya. Our task was to grow the U.S. sales of the Leakey Collection, thereby promoting its sustainability as a business and its ability to make an enduring impact on the lives of the Maasai people. The Leakey Collection is a rural social enterprise employing more than 1,000 Maasai women who make stylish contemporary jewelry from drought-resistant grass beads. For the Maasai, the enterprise provides a valuable alternative source of income while allowing them to retain their traditional lifestyle. Philip and Katy Leakey have a longstanding association with the Maasai. Philip’s parents, Mary and Louis Leakey, are renowned archaeologists whose discoveries in the Olduvai Gorge of Tanzania were critical in establishing human evolutionary development in Africa. Their work brought them in close contact with the pastoralist Maasai people. As luck would have it, we arrived in Kenya on the evening of Election Day. We had known about the elections, but hadn’t dwelt on potential dangers, based on Kenya’s reputation as a bastion of stability in an otherwise politically troubled region. Nonetheless, from the window of the taxi, the normally bustling city of Nairobi seemed unnaturally calm. The next day, with the election […]

  • Next Up At Wharton School Publishing

    The Power of a Dedicated Workforce and Adaptive Leadership Do the Right Thing: How Dedicated Employees Create Loyal Customers and Large Profits James F. Parker People matter most. It’s a familiar mantra for many businesses. But when push comes to shove, all too many companies would rather slash costs, cut head count, replace well-paid employees with lower-paid employees or outsourced workers, and reduce customer service. And after all of that, many fail. But it needn’t be that way, writes James Parker in Do the Right Thing: How Dedicated Employees Create Loyal  Customers and Large Profits. By focusing on “doing the right thing,” Parker argues, your company can remain profitable and growth-oriented for decades. If anyone can make this case, it’s Parker, who served as CEO and Vice-Chairman at Southwest Airlines through 9/11 and its challenging aftermath. Before taking the reins in June 2001, he’d spent 16 years as its general counsel, helping to build Southwest’s unique culture of respect, resilience, and a commitment to doing what’s right. In Do the Right Thing, he describes how after 9/11 Southwest made three pivotal decisions: no layoffs, no pay cuts, and “no-penalty, no-questions asked refunds” for any customer wanting them. The result: Southwest’s revenue passenger miles for the fourth quarter of 2001 dropped by only 0.5%, and its market cap soon exceeded all of its major competitors combined. These decisions grew naturally from Southwest’s culture, which Parker details in the book, focusing on how its principles can strengthen any team, organization, or company. Do the Right Thing also reveals how to build an environment where teamwork comes naturally—where people know how to have fun while they’re consistently outworking and outsmarting their competitors. In one of the world’s toughest industries, Southwest has stayed profitable for 34 straight years. Do the Right Thing is about […]

  • Knowledge at Wharton

    Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of their advertising dollars on TV and only 6% online, according to data compiled and analyzed by Google. “Of all the advertising platforms, the Internet is one of the few on an upward trend,” says Wharton marketing professor Patti Williams. “But if you look in terms of the sheer amount of time most consumers are spending online and the amount of dollars being spent to reach them, it is still probably way under what it should be.” Indeed, as computer screens, mobile phones, and other devices offer what amounts to billboard space for display ads, video, and tie-ins to Internet searches, the advertising landscape is undergoing a major transformation. New media is growing at a fast pace, but industry analysts and Wharton faculty say senior marketers still lag in adopting the Internet and other digital technology to reach their customers. Spending on Internet marketing is expected to grow 13.4% in 2008, but that will only add up to 7.2% of the total amount spent on all U.S. advertising, which is expected to hit $153.7 billion, according to TNS Media Intelligence. Williams says that while the Internet provides advertisers with the ability to closely track consumer response to ads by measuring clicks or other online behavior, their reluctance to embrace the Internet may be due to uncertainty about how well it can shape broader brand messages. “It’s not clear how Crest should leverage search advertising,” says Williams. “How many people are going online to search for toothpaste? It’s not [obvious that] a little ad on the screen is going to attract them. For the biggest bulk of media spending, online is just hard to figure out. The Internet is not that good […]

  • Alumni Club News

    Israel Club Gala Hosts 200 Attendees Continuing a tradition, the Wharton Club of Israel and the local Harvard Business School alumni club celebrated their sixth annual Gala Dinner on December 26, 2007. To date, this was the largest event of its kind for the local alumni club, hosting 200 people, including many business and community leaders. The keynote speaker was Shay Agassi, one of Israel’s best-known entrepreneurs, who had sold the software company he founded to SAP and went on to become SAP’s Deputy CEO. These days, Agassi is promoting the adoption of a nationwide network of electric outlets in Israel, in which drivers can recharge their electric car battery anywhere. The total cost of this project is set at $200 million. The existence of such a network would make it possible for everyone to switch from a conventional gasoline-powered car to an electric-powered one. Agassi has already secured the funds as well as the cooperation of Renault-Nissan and the State of Israel. Every year at the Gala Dinner, the Organizing Committee rewards a community organization for their exceptional achievement in building a “critical mass” of young leaders who will impact society. This year, a not-for-profit organization called LEAD was chosen. Founded by self-made billionaire Morris Kahn, the organization has taken upon itself the task of encouraging and developing youth leadership in Israel. The goal is to mentor 120 young adults every year, training each according to the most advanced leadership techniques and concepts. LEAD’s purpose is to make an impact on the next generation of leaders throughout government and business across in the country. – Yarom Arad, WG’95 New York Club Explores ‘Slash’ Careers During Author Speaker Series After a long day in their offices, on October 4, 2007, a group of about 20 people, including three men and […]

  • Wharton Leader: Bruce Becker, C’83, WG’06

    By Scott Shrake The FOX News Washington Bureau is on the fifth floor in a building with views of Union Station and the Capitol rotunda. Bruce Becker’s office faces the set where on-air segments are filmed for FOX Business Network (FBN), and he has three TVs right on his desk so he can stay on top of things. As bureau chief of FBN, Becker is thoroughly engaged in all aspects of the business, from hiring all staff to approving stories to consulting with FOX News in New York on company-wide direction for Washington coverage. The onetime Penn English major (C’83) and soccer player credits his degree from the Wharton MBA Program for Executives program with helping him move into this leadership position at FBN, which launched last fall. “I felt that an understanding of how businesses operate would be critical to coverage of Washington for a business channel,” Becker says. He also sought to make himself “more viable as an executive, not only a journalist, in the company.” His entire career has been centered on Washington news, first on a local level and then nationally. Born in Chicago, Becker grew up in Bethesda, MD, just outside DC. After graduating from Penn in the mid-’80s, he returned to the nation’s capital and worked as a news writer at WTTG-TV, Channel 5. Shortly thereafter, Rupert Murdoch bought the station and it became a FOX affiliate. Becker moved up to become a producer of, among other things, documentaries and a nightly program called “City Under Siege.” Then he worked briefly at WETA-TV, Washington’s PBS affiliate, until the recession of the early 1990s negatively affected their funding. It was then that he returned to FOX, and rose to executive producer for its affiliate news operation. He was there for the founding of FOX News […]

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