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The Candidates on Taxes: Finding the Devil in the Details
The two U.S. presidential candidates may paint themselves as agents for a new, more bipartisan attitude in Washington, but Republican Sen. John McCain and Democratic Sen. Barack Obama both tend to adhere to their parties' usual approaches to tax policy. Obama proposes to raise taxes on the wealthy and reduce them for the middle class; McCain proposes to sustain the tax cuts enacted by the Bush Administration. But neither candidate fully explains how they will pay the bills. This is the first in a series of articles from Knowledge@Wharton examining economic and fiscal policies proposed by the candidates.
Hiring from Outside the Company: How New People Can Bring Unexpected Problems
Rather than hire experienced people from outside, many companies might be better off training fresh recruits with little experience in the industry. That approach can give the firm more control over how the new workers adapt to their employer's corporate strategy and culture, according to a research paper by Wharton management professor Nancy Rothbard titled, "Unpacking Prior Experience: How Career History Affects Job Performance."
Driving Adobe: Co-founder Charles Geschke on Challenges, Change and Values
With PostScript, PDF and Flash, Adobe Systems introduced technologies that laid the foundation for desktop publishing, electronic document interchange and interactive web content. But the difficulties Adobe faced during its 26-year history were many: shifting business plans, Apple aligning with Microsoft to compete with key Adobe technologies, a hostile takeover attempt from a leading competitor, and a management crisis that led to the firing of four top executives. Adobe co-founder and co-chairman Charles Geschke spoke with Knowledge@Wharton about how the company's core values helped Adobe address these challenges and position the company for the future.
Hot Today, Not Tomorrow: Retailers Face the Terrible Teens
New York-based teen apparel retailer Aéropostale has had a bullish summer, with second-quarter net income rising 43% over the previous year. Meanwhile, other teen-focused retailers, including The Gap and Abercrombie & Fitch, have suffered losses. Wharton experts and others suggest that teen retailers are competing intensely for attention in hard economic times, even as these new conditions are giving rise to a new landscape of winners and losers.
Tuning in a Post-merger Strategy: Sirius XM Must Cut Costs and Build Its Case
Now that the FCC has approved the merger of the two satellite radio companies, the big challenges for Sirius XM is to stop the flow of red ink and settle on a strategy to compete with the myriad of other portable music providers. Says one Wharton professor: "They may have one more shot at a Hail Mary pass."
Costs, Regulation and a Touch of Corporate Responsibility Put More Green into IT
One research firm estimates that at least 2% of global atmospheric carbon emissions can be traced to the information technology industry because of the electricity consumed by PCs, servers, cooling systems, telecommunications gear and printers. Now, under pressure from tightening global anti-pollution standards, the threat of environmental lawsuits and more awareness of corporate responsibility, many technology firms are racing to place a "green" stamp of environmental approval on their operations and products.
Africa's 'Cocoon' Phase: Can Private Investors and Entrepreneurs Transform the Continent?
In the past, business in Africa behaved like a "caterpillar" -- uninteresting, slow moving and easy to step on, says Eric Kacou, managing director of OTF Group, a U.S.-based consulting firm focused on emerging economies. Today, the continent is poised for a metamorphosis that requires a "new mindset" relying less on natural resources and more on innovation and private sector growth. At the Wharton Global Alumni Forum in Cape Town, South Africa, Kacou was among the speakers on two panels exploring the potential for new business models and "smart" capital to change Africa's economic and social realities.
Whether You Agree with Globality or Disagree, Don't Ignore It
In a year when airlines all over the world are reeling from the double whammy of high oil prices and a faltering economy, Embraer -- the Brazil based aircraft maker -- doubled its net income in the second quarter. The company's growth during difficult economic times offers an example of the way that companies from rapidly developing economies are reshaping global business, say Harold L. Sirkin, James W. Hemerling and Arindam K. Bhattacharya in their new book, Globality: Competing with Everyone from Everywhere for Everything. Sirkin and his co-authors identify 100 such "challenger" firms that are expanding rapidly, spell out the reasons why, and analyze the implications for the way business will be done in the future.
Is a Medical Intern's 'Initiation' Harmful to Your Health?
Sandeep Jauhar's book, Intern: A Doctor's Initiation, is the unsettling account of his medical residency at a New York hospital, largely focused on his first year. It represents his take on his internship, interweaving that experience with something of his childhood, family history, previous studies and work experiences. In the process, Jauhar tells us about himself, medical education and health care.
'The Objective of Education Is Learning, Not Teaching'
In their book, Turning Learning Right Side Up: Putting Education Back on Track, authors Russell L. Ackoff and Daniel Greenberg point out that today's education system is seriously flawed -- it focuses on teaching rather than learning. "Why should children -- or adults -- be asked to do something computers and related equipment can do much better than they can?" the authors ask in an excerpt from the book. "Why doesn't education focus on what humans can do better than the machines and instruments they create?"
Of Cell Phones, Maps and Mental Models: Why Doing What Was Right Is Sometimes Wrong
Why don't we see the truck racing toward us, or the treasure of gold beneath our feet? Are these just invisible events? In this excerpt from the book, It Starts with One: Changing Individuals Changes Organizations, authors J. Stewart Black and Hal B. Gregersen offer examples from the mobile phone industry and from the Spanish exploration of America in the 16th century to explain why organizations and individuals fail to see the need for change. "Why do we fail to see the need for change?" the authors ask. Their answer: "Fundamentally, we fail to see because we are blinded by the light of what we already see."
'Inventing the Movies': The Epic Battle between Innovation and the Status Quo in Hollywood
While many companies are scrambling to gain competitive advantage by finding ways to innovate using technology, the film industry -- as characterized in Scott Kirsner's book, Inventing the Movies -- has had a century-long history of shunning innovation and eschewing technological progress. Subtitled Hollywood's Epic Battle Between Innovation and the Status Quo, from Thomas Edison to Steve Jobs, the book is a case study in the difficulties of introducing technological change in an industry that carefully guards its well-entrenched business models.
Unbound Prosperity: Unlocking 'Unreal Estate' through Institutional Reform
Does reforming institutions always result in benefits to the system regardless of when and how they take place? Are some institutions more important than others? Elena Panaritis's debut work, Prosperity Unbound, not only answers these questions but targets what the writer believes to be the most valuable institution necessary for growth -- the property system and its underpinning laws and regulations. Panaritis, who heads Panel Group, a Washington, D.C., based organization that works with governments to unlock illiquid markets, also offers a diagnostic tool to give policy makers guidelines in reforming a property system.
The Power of Momentum: Companies That Build Their Wave and Ride It
How can a company deliver continuous, exceptional growth, year after year? J. C. Larreche, a professor of marketing at INSEAD, answers that question in his book, The Momentum Effect: How to Ignite Exceptional Growth. According to the author's research, momentum-powered firms delivered 80% more shareholder value than their slower rivals. "Momentum leaders are not lucky -- they are smart," he writes in this excerpt. "They have discovered the source of momentum and, with it, the beginnings of a smarter way to exceptional growth. Managers often talk about 'riding the wave.' Momentum leaders aren't that passive. They live by this motto: First build your wave, then ride it."
War of the Words: Scrabulous Is off Facebook, but Did Hasbro Win the Game?
Scrabble -- the board game in which you compete with other players in making words -- has become a familiar household name since it was introduced in 1948. Its unofficial online double, Scrabulous, has become one of the most popular applications on Facebook since it was launched in July 2007. Now, both games are making waves as Hasbro, the copyright holder for Scrabble in the U.S. and Canada, has filed a lawsuit against the creators of Scrabulous -- following which Scrabulous was yanked off Facebook in late July. But in today's fast-changing social networking environment, Hasbro's lawsuit and its attempt to control its online image may not be the right move, Wharton faculty say.
Doha Debacle: What's Next for Global Commerce
Progress toward unfettered international commerce stumbled last week with the collapse of the World Trade Organization's Doha talks, a seven-year effort to establish new global trade rules. The lengthy talks were complicated by the rapid emergence of China and India as major economic powers with commercial and strategic interests to protect, and the clout to do so. Many observers say the talks' collapse is a setback for poorer nations, which need access to larger markets in order for their economies to grow. Wharton professors Stephen Kobrin, whose research interests include globalization, and Marshall Meyer, an authority on China's economy, recently spoke to Knowledge@Wharton about the talks' collapse, global commerce and China's interest in the rules governing trade.
A Precarious Road: How Retailers Can Navigate Inflation's Hazards
Retailers are in a tough situation, locked between rising product costs and a limited ability to raise their prices. Even cost-savvy market leaders such as Costco are having a difficult time. But Wharton faculty say that handled carefully, the current inflationary period may actually be a business opportunity for some companies. The key: Forgetting some of the old rules of retailing.
On the Verge of Change: Giving Muslim Women the Confidence to Lead
Managing the forces arrayed against them -- hostility against Islam in the Western world, resistance to change among Muslims and hostility to the West among Muslim populations -- is no easy task for Muslim women in positions of leadership. As one of the participants in a recent leadership conference noted: "A Muslim woman must prove not just that she is as good, or better, than a man, but as good as a Western woman." Two Wharton leadership experts were among the presenters at the three-week event.
A Lot to Learn: Many Sovereign Wealth Fund Managers Come up Short in Measures of Sophistication
Many public funds don't adhere to basic norms of modern money management and most don't even appear to make an effort to match their investment strategies with their future financial obligations. "As [sovereign wealth funds] have grown, they appear to be demonstrating an increasing risk appetite, very little transparency and virtually no clarity of objectives," write three researchers, including Wharton professor of insurance and risk management Olivia Mitchell, in a soon-to be-published paper titled, "Managing Public Investment Funds: Best Practices and New Questions."
File-sharing Networks Return with Legitimate Ways to Share Music -- and Make Money
After the U.S. Supreme Court declared in 2005 that Internet file-sharing sites Grokster and StreamCast had illegally aided their customers' efforts to share pirated copies of copyrighted music and video files, many commentators predicted the demise of businesses that depended on online file-sharing. But new start-ups say they have found ways to make peer-to-peer (often called P2P) file-sharing legal and perhaps profitable. Still, their business plans need tweaking, according to a paper published recently by Wharton professor Kartik Hosanagar and two University of Washington colleagues. One suggestion: The networks should sometimes be willing to pay more than they get for content.
