Knowledge at Wharton

Embellishing stories about one’s accomplishments or qualifications whether by exaggeration or misstatement is part of human nature experts say and almost everyone is guilty of it at one time or another. Left unchecked however exaggerations that seemed innocuous at first can result in serious potentially career-ending consequences. Thanks to the Internet it’s easier than ever to get caught in an exaggeration Wharton experts and others note. But the temptation to embellish has also never been greater as recession-weary workers feel pressured to justify their worth and a 24-hour news cycle demands that leaders have an immediate sound-bite-ready answer for everything.

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American companies will continue to fall behind their counterparts in emerging markets such as China or India unless they move toward what Deloitte’s John Hagel III calls ”the edge ” which is where passionate change-driven employees collaborate with others on the kind of innovations that prevent a company from seeing its core business model slowly erode. During a talk at the recent Wharton Leadership Conference Hagel discussed how CEOs can look to sources such as the online game World of Warcraft for inspiration in finding a successful path forward.

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With the financial crisis in the United States seemingly under control Europe went into a panic of its own this spring substituting the specter of defaults on sovereign debt for the American penchant for defaults on home-mortgage debt. A stabilization package valued at nearly $1 trillion was put into place in Europe calming markets at least for the moment. But where does the euro wind up amid all this tumult? One view is that the euro is safe bolstered by a sense that it is too important to fail. But others say it is heading for a fall.

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The call for a boycott of BP in the wake of its ongoing disastrous oil spill in the Gulf of Mexico is hardly surprising. The boycott which in BP’s case was proposed by consumer group Public Citizen is a tactic that has been used for centuries by consumers as a way to express outrage. While research shows many boycotts come up short in forcing their targets to give in to the demands of protest organizers they can have real impact in terms of lost sales and a damaged reputation. In the case of BP however experts say a boycott is likely to be only a nuisance when compared to the outsized legal liability the company is facing from the Gulf spill.

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”Cap and trade” systems in which corporations that exceed their allotment of carbon dioxide emissions are allowed to purchase certificates from those with low emissions were designed to combat global climate change by giving polluters a financial incentive to reduce or offset their impact on the environment. But carbon markets in Europe and elsewhere are increasingly falling victim to fraud in the form of phishing bribery and other schemes. Wharton experts and others say combating these crimes is a complicated problem which thus far has no clear solution.

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It’s no secret that many Americans are financially illiterate or unable to understand basic principles of money management. To address this situation Wharton Dartmouth and the Rand Corporation have established the new Financial Literacy Center which will develop ”educational materials and programs that help foster saving and retirement strategies over the life cycle.” Annamaria Lusardi an economics professor at Dartmouth who will help lead the new Center and Michelle Greene deputy assistant secretary for financial education and financial access at the U.S. Treasury Department spoke with Knowledge at Wharton about the Center’s goals and why individuals need to be more proactive about their financial health.

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Following the global financial crisis troubled retirement systems around the world face new challenges that may result in sharply reduced income for retirees -- as well as the possibility that younger workers will need to work much longer according to Wharton insurance and risk management professor Olivia Mitchell. In a recent paper titled ”Implications of the Financial Crisis for Long Run Retirement Security ” Mitchell argues that current and future generations must ”build new frameworks [with] public and private partnerships to better educate people about the risks they face to help them work longer ... and to better regulate products and markets for an aging world.”

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Sovereign wealth funds the large investment funds supported by governments are mostly a positive economic force that can provide a shot in the arm to the companies -- and countries -- they invest in. They are also a stabilizing force for the nation where the investment originates. Those are some of the main takeaways from a new Wharton study ”The Brave New World of Sovereign Wealth Funds.” In this interview with Knowledge at Wharton Wharton management professor Mauro F. Guillén who helped to oversee the research and two Wharton MBA candidates present some of their key findings.

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What spending in the mobile advertising industry lacks in heft it more than makes up for in buzz. Witness Google’s recent purchase of AdMob which brings together the two largest mobile ad networks and Apple’s recent efforts to gain a stronger foothold in the market. The battle between the two major players could represent a tipping point for mobile advertising Wharton experts and others say and suggests that the sector could become a significant money-maker in the future.

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Plenty of people in the publishing world fear that new media and the Internet will kill interest in reading literary fiction. Andy Hunter and Scott Lindenbaum however think of Twitter YouTube and the iPad as opportunities to introduce new audiences to the art of the short story -- and to tell stories in unique ways. They are the founders of Electric Literature a quarterly literary magazine that publishes using a print-on-demand model and enhances its stories through collaborations between authors and animators filmmakers and musicians.

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