Knowledge at Wharton

As far as a legacy goes says IBM chairman Sam Palmisano ”I just want to leave the company better than I found it.” Judging by IBM’s successes over the past decade Palmisano who was CEO of IBM until he stepped down earlier this month did just that. During an interview with Wharton management professor Michael Useem Palmisano discussed the sale of the company’s personal computer business the PricewaterhouseCoopers acquisition how a big company can encourage innovation and what he learned from his mentors among other observations drawn from almost 40 years at IBM.

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When Scott Thompson was named Yahoo’s new CEO effective January 9 he became the fourth person in five years to take charge of the ailing Internet giant. Experts at Wharton say that Thompson who was previously president of eBay’s PayPal unit might be Yahoo’s last hope for becoming relevant again as a player in online display advertising a market which the media company once dominated. But his main challenge they say is the same as his predecessors’: Define what Yahoo wants to be.

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As economic malaise bleeds into another New Year many employers are making hard-nosed decisions about benefits and compensation. That means salaries remain flat health care premiums are up the 401(k) match has disappeared and bonuses are smaller or nonexistent. The result not surprisingly is a dissatisfied workforce. Yet as Wharton professors and other experts warn excess frugality on employers’ part could backfire in the long run.

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Recent high-profile scandals at Penn State MF Global Holdings Olympus and elsewhere raise questions about why organizations often fail to address significant internal problems that at best impede performance and at worst could have devastating effects. In hindsight especially to observers it is clear what should have been done. But for employees exposing such problems is more complicated than telling right from wrong say experts at Wharton and elsewhere.

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What makes a great leader? At a recent event the seven winners of this year’s Top American Leaders Award from the Center for Public Leadership at Harvard’s Kennedy School and Washington Post Live shared personal observations on how they came by the passion that inspires their work -- and on what irks them about public life. Common in all their views is that leadership is about serving more than one’s self.

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Amazon will lose money on each Kindle Fire it sells. Sprint is not expected to turn a profit selling Apple’s iPhone for at least three years. Both companies are banking on customer lifetime value (CLV) a marketing formula based on the idea of spending money up front to gain customers whose loyalty will reap rewards over the long term. The model is becoming more and more popular among technology companies and as software companies increasingly turn to subscription-based business models through cloud computing CLV will become an even larger issue according to Wharton experts.

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If large parts of Europe fall into a recession as many experts are predicting it is likely to have negative although varied effects on economies around the world. As European leaders hammer out yet another package of solutions this week Wharton faculty weigh in on the impact of a eurozone recession as well as the pros and cons of the recovery measures that are up for debate.

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While millions of people have read Malcolm Gladwell’s books his ideas have had particular resonance with today’s business leaders. Wharton management professor Peter Cappelli and Gladwell were just named to HR Magazine’s Top 20 Most Influential International Thinkers of 2011.Cappelli spoke with Gladwell by phone about why Gladwell is an ”academic groupie ” the inconvenient truths that can spring from scholarly research and how important decisions -- like going to war or dealing with today’s economy -- might be dealt with differently if we were to draw on the ”extraordinary wisdom” of universities.

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The value of a college education is under attack. While more U.S. students are enrolled than ever before a perfect storm of soaring costs rising student debt and shrinking job prospects have led more and more critics to challenge whether college remains a worthwhile investment for students. Knowledge at Wharton spoke to experts at Wharton and elsewhere to examine both sides of a debate that is growing increasingly loud.

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To its advocates the idea is a no-brainer: Charge a tiny tax on each stock bond or derivative trade to raise badly needed revenue discourage dangerous short-term speculation and make Wall Street help clean up its own mess. But critics of the financial transaction tax concept say that it would actually make markets less efficient hurting ordinary investors by raising costs. Wharton faculty and investment experts weigh in.

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