Knowledge at Wharton

The government’s rescue of Fannie Mae Freddie Mac and AIG demonstrated clearly that the financial turmoil continues on Wall Street. In an interview with Knowledge at Wharton Wharton finance professor Jeremy Siegel says there are some positive signals in stocks and corporate earnings but that it’s too soon to conclude the market has hit bottom. Siegel also talked about inflation and commodities.

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Casual observers may have concluded that Google’s introduction this week of its ’Chrome’ web browser was a direct assault on the dominance of Microsoft’s Explorer. But Wharton professors David Hsu and Kevin Werbach see a longer-term strategy at work.

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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 economy.

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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.

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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.”

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Now that the FCC has approved a merger of the two satellite radio companies Sirius XM’s big challenges are 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.”

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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. Experts from Wharton and elsewhere suggest that teen retailers are competing intensely for attention in hard economic times even as these new conditions are giving rise to a changing landscape of winners and losers.

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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.”

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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?”

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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.”

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