Knowledge at Wharton

On June 8 the House of Representatives squashed an amendment that would prevent telecommunications companies from charging Internet content companies more to deliver enhanced services such as high quality audio and video content. The amendment would have required ”network neutrality ” an often-debated term that means different things to different people. To its supporters like Google Yahoo and eBay it means that telecommunications companies should be required to treat all Internet traffic -- whether bandwidth-hogging video or a brief email message -- the same. To companies like Verizon and AT&T imposing network neutrality would mean that they could not charge for enhanced services on networks that cost them billions of dollars to build. Experts from Wharton and elsewhere weigh in on the issue. Hosted on Acast. See acast.com/privacy for more information.

Almost everyone these days will agree that an organization’s intellectual capital or knowledge assets are as important as its physical assets. The challenge of how to track organize and use knowledge assets however is easier said than done. How can companies tackle this challenge? Michael Lynch founder and CEO of Autonomy a company with offices in Cambridge England and San Francisco believes that his company’s technology can help organizations extract meaning from reams of unstructured data. Autonomy even has a name for this process -- meaning-based computing. Lynch and Kevin Werbach a Wharton professor of legal studies and business ethics who has written extensively on this subject spoke with Knowledge at Wharton editor Mukul Pandya about these issues. Hosted on Acast. See acast.com/privacy for more information.

Major League Baseball’s decision to square off with CBC Distribution and Marketing an online baseball fantasy-league operator based in St. Louis Mo. might make good legal sense but it’s bad for business according to Wharton faculty and baseball industry spectators. For several years CBC paid a fee to the Major League Baseball Players Union for the right to use players’ names and stats for its virtual leagues in which fans draft pro players onto imaginary teams and then compete with each other based on their players’ statistics. But last year Major League Baseball Advanced Media bought the Internet and wireless rights to the names and stats from the union and informed CBC that it wouldn’t renew its license. CBC has filed a law suit in response but the league isn’t backing down. By picking a fight with CBC -- and the $1.5 billion fantasy league industry -- baseball risks alienating fans damaging its brand and sacrificing future revenues for a small gain experts say. Hosted on Acast. See acast.com/privacy for more information.

John Zhang has a message for Cingular Wireless and Verizon Wireless or for that matter any company that uses its ads to attack a competitor. Instead of luring away your competitor’s customers you may just be hurting yourself. Zhang a Wharton marketing professor has found that combative ads -- the sort of comparative spots that beer makers particularly Anheuser-Busch and Miller are famed for -- may backfire. Instead of pulling consumers to an advertiser they may just make people indifferent to all offerings in a product category. ”Combative advertising a characteristic of mature markets is defined as advertising that shifts consumer preferences toward the advertising firm but does not expand the category demand ” Zhang says in his research paper titled ”A Theory of Combative Advertising.” Hosted on Acast. See acast.com/privacy for more information.

In recent years when interest rates in the U.S. were low hordes of homeowners and investors in real estate grew wealthier as they watched their home values increase or their investment properties sell for multiples of their purchase price. But now with interest rates rising the run-up in real estate may be ending. What will happen next? Experts from Wharton and elsewhere debated this question at a conference on innovation and risk in real estate markets organized by the Wharton Financial Institutions Center and Mercer Oliver Wyman. Hosted on Acast. See acast.com/privacy for more information.

After saturating its target market of working class bargain-hunting consumers Wal-Mart is ratcheting up its low-price strategy to appeal to more upscale shoppers by expanding its merchandise lines to include organic foods better wines high-end consumer electronics and new fashion-oriented apparel. It’s an approach that carries some risk say Wharton faculty and analysts but that is dictated by intense competition and the lack of other opportunities for growth. Hosted on Acast. See acast.com/privacy for more information.

With the recent disclosure of wiretapping by the National Security Agency and the booming success of sites like MySpace and Friendster social networking is much in the news today. But serious interest in social networks can also be found among academics consultants and corporations seeking to deepen their knowledge of how companies operate. While organizations have been aware of the power of social networks for some time now researchers at Wharton note that mapping these connections can yield some potent insights about identifying key employees how board members interact within and among companies and how employee relationships can be better understood to improve productivity and the dissemination of ideas. Hosted on Acast. See acast.com/privacy for more information.

When it comes to athletics sports teams have a specific number of team players: A basketball team needs five baseball nine and soccer 11. But when it comes to the workplace there is no hard-and-fast rule to determine the optimal number to have on each team. Should the most productive team have 4.6 members as suggested in a recent magazine article? What about naming five or six individuals to each team which is the number of MBA students chosen each year by Wharton for its learning teams? Is it true that larger teams simply break down reflecting a tendency towards ”social loafing” and loss of coordination? Or is it that the best number of people for a team is driven by the task at hand and by the roles each person plays? Research by Wharton faculty offers some insights. Hosted on Acast. See acast.com/privacy for more information.

On May 25 a federal jury convicted former Enron CEO Kenneth Lay and former Enron president Jeffrey Skilling on conspiracy and fraud charges with sentencing to be decided on September 11. As has been repeatedly noted in press coverage of this trial Enron is the incredible story of a once powerful company done in by a group of top executives whose greed and fraud was breathtaking even by post dot-com standards. But it is by no means the only high-profile criminal trial in recent days nor is it likely to be the last case brought by the government against CEOs who abuse their positions their stockholders their employees and the public trust. Thomas Dunfee chairman of Wharton’s legal studies and business ethics department and an expert on social contracts and the social responsibility of business talked to Knowledge at Wharton’s Mukul Pandya and Robbie Shell about the Enron verdict. Hosted on Acast. See acast.com/privacy for more information.

The cover photograph in the latest copy of The Economist says it all. The May 25 edition has a picture of a bear peeping out of the woods with a headline that asks ”Which Way is Wall Street?” The magazine notes in an editorial that after nearly three years of gains international stock markets tumbled by more than 10% during the past couple of weeks. Emerging markets have been volatile as have markets in Europe. Is this likely to lead to the kind of bearish slump that followed the dot-com bust in the spring of 2001? Or will the volatility pass? Jeremy Siegel a finance professor at Wharton and author of the book The Future for Investors spoke with Knowledge at Wharton’s Mukul Pandya and Robbie Shell about the commodities market the appointment of Henry Paulson as the new Treasury Secretary and the challenges faced by Fed chairman Ben Bernanke among other topics. Hosted on Acast. See acast.com/privacy for more information.

American investors have poured money into foreign stocks in recent years lured by the hope of outsized gains. They have been well rewarded in the past 12 months but in May markets plummeted around the world. Mutual funds investing in foreign stocks for example lost more than 8% in the two weeks ending May 25 although their previous stunning performance left them up nearly 31% for the 12 months ending on that date. The late-May plunge was especially severe in emerging markets. Is this another bubble bursting the way the tech-stock bubble collapsed several years ago? Wharton professors offer their take on the downturn and its implications for nervous investors. Hosted on Acast. See acast.com/privacy for more information.

When Lou Gerstner became chief executive of IBM in the early 1990s Big Blue was on a course to be broken up into smaller companies each responsible for separate IBM business units such as PCs software and the like. But Gerstner concluded the strategy was ”wrong-headed” because it was contrary to the wishes of customers according to Wharton marketing professor George Day. Rather than assemble their computer systems from a variety of vendors customers wanted help putting everything together. So IBM embarked on a multi-year journey to align its organization with the marketplace. For IBM the experiment was successful. But in a forthcoming paper titled ”Aligning the Organization with the Market ” Day reports on a survey that found only mixed results among 347 medium- to large-size firms that attempted customer-focused reorganizations. Hosted on Acast. See acast.com/privacy for more information.

When Severe Acute Respiratory Syndrome (SARS) broke out in Hong Kong in 2003 some media outlets predicted economic calamity for the city. But by one financial measure -- real estate prices -- Hong Kong hardly suffered according to research by Grace Wong a Wharton real estate professor. In two papers titled ”Has SARS Infected the Property Market? Evidence from Hong Kong” and ”Is SARS a Poor Man’s Disease? Socioeconomic Status and Risk Factors for SARS Transmission ” Wong looks at SARS’ impact on real estate values and analyzes the role of income in determining who contracted the disease. Underlying her research is the recognition that in a global economy infectious diseases such as SARS will likely spread farther and faster as people travel all over the world in search of new business opportunities. Hosted on Acast. See acast.com/privacy for more information.

In the late 1980s as part of an effort to beef up its core IT business Andersen Consulting (now Accenture) began to hire specialist strategy consultants from outside the company. These consultants were more experienced than the usual Andersen employees and they were accustomed to ”much more aggressive individual performance incentives” than was the norm among Andersen’s existing IT staff according to Wharton management professor Sarah Kaplan author of a recent paper titled ”Inertia and Incentives: Bridging Organizational Economics and Organizational Theory.” In the paper co-authored with Rebecca Henderson from MIT’s Sloan School of Management the two researchers use Andersen Consulting Kodak and other organizations to study conflict especially with regard to incentive systems that results when companies undergo major change such as adopting new technologies or shifting into new markets. Hosted on Acast. See acast.com/privacy for more information.

With their combination of low fees tax efficiency and simple autopilot investing style index funds seem to have captivated American investors. At the same time however many investors still hold trillions of dollars in high-fee funds despite well-publicized evidence that low-fee alternatives offer higher returns over the long run. ”It struck us that most people just don’t know what mutual fund fees are. So we set out to actually test that ” says Brigitte C. Madrian professor of business and public policy at Wharton. The result is a paper titled ”Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds ” by Madrian Yale professor James J. Choi and Harvard economics professor David Laibson. Hosted on Acast. See acast.com/privacy for more information.