Knowledge at Wharton

Getting customers to spread the word about a new product through their social or professional networks is a hot strategy in the marketing world. But how do companies find the right individuals to deliver the message? New research by Wharton marketing professors Raghuram Iyengar and Christophe Van den Bulte finds that traditional targets may not be so influential.

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The world financial crisis is unraveling the gains made by many Central and Eastern European economies during their post-Cold War resurgence. With the region no longer isolated an economic collapse could reverberate in the West as Central and Eastern European borrowers default on an enormous volume of loans that Western banks were all too eager to grant just a few years ago.

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Nine months ago a group of Wharton students launched an online site called Givology.org whose purpose is to raise money for scholarships and education projects in the developing world. Givology’s vision according to chief development officer Catherine Gao is that of a global community of individuals connected through their belief in the power of education to change people’s lives. The group which so far has attracted more than 200 lenders has partnerships in China India Uganda Ecuador and Kenya. Gao and Maria Davydenko the site’s chief creative director spoke with Knowledge at Wharton about Givology and why they each donate more than 10 hours a week to this project.

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Attention Shoppers: We no longer have the following items -- ”a sense of entitlement ” ”conspicuous consumption” and ”a golden period of luxury.” At least that is the word from Wharton faculty and other experts who point to a new logic that is defining not just what U.S. consumers buy but how they view the shopping experience.

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Despite evidence that ambitious goal setting can hurt productivity damage a company’s reputation and violate ethical standards its use has become endemic in American business practice and scholarship even spilling over to the debate on how to improve America’s public schools. A new paper by Wharton operations and information management professor Maurice E. Schweitzer and three co-authors documents the hazards of corporate goal setting and concludes that it is overprescribed.

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When governments around the world spend vast sums to stimulate their economies it seems only reasonable for each to invest at home. Why should the American taxpayer pay for steel from Canada when U.S. steelmakers are struggling? So it was hardly a surprise that the $787 billion stimulus plan just signed by President Barack Obama included protectionist language. But economists and political leaders in the U.S. Europe and elsewhere worry that such sentiments threaten free-trade principles that are crucial to any global economic recovery.

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What impact has the global financial crisis had on India’s real estate market? According to Aniruddha Joshi executive director of Hirco Group in Britain which develops residential properties and mixed-use townships in India the credit crisis has affected portfolio allocations. Still Hirco’s strategy toward property development in India will not change Joshi told Knowledge at Wharton in an interview during the recent Knowledge at Wharton Real Estate in Emerging Markets Forum. ”We believe that the long-term India story and the fundamentals are still intact.”

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When the giant pharmaceutical company Pfizer announced on January 26 that it was acquiring Wyeth for $68 billion analysts started questioning what benefits the deal would bring and for whom. Pfizer executives suggest the acquisition makes strategic sense by expanding the company into a range of new areas and by helping make up for an expected loss of more than $12 billion in annual revenues once its Lipitor patent expires in 2011. But Wyeth also brings some liabilities -- notably continuing lawsuits over its hormone replacement drugs and fen-phen diet pill. Knowledge at Wharton asked Wharton health care professor Patricia Danzon and marketing professor Jagmohan Raju to offer their views on the pros and cons of the deal.

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The contrast is jarring. As thousands of Americans lose their jobs headlines are focused on excessive executive compensation and lavish perks including multi-million-dollar bonuses a $1.2 million executive suite renovation (since repaid) and plans to buy a new corporate jet (since scrapped). It’s not surprising that the harsh economic climate and resurgent role of government in business has turned a spotlight on compensation. Indeed rules announced this week by the Obama administration set new limits on executive pay. But overall what should government do or not do to ensure fairness and accountability in the executive suite?

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Toyota officially eclipsed General Motors as the world’s largest automaker by sales last year but its strength is only relative: The Japanese automaker like its competitors is struggling against a sharp drop-off in sales and global overcapacity. According to Wharton faculty after years of conservative growth Toyota accelerated its expansion in the past decade making it harder to apply the brakes in the current downturn. The new market dynamics which coincide with a changeover in company leadership mean the road ahead may be especially difficult to navigate they say.

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