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Will the Economic Recovery Run Out of Steam?
After a year of solid gains, the economic recovery is beginning to slow. Demand is trailing off as inventory levels have been restored and emergency stimulus measures withdrawn. Continued high unemployment and a downtick in housing are weighing on consumer confidence and spending. Add unexpected shocks from Europe and a slowdown in China, and forecasters are now ratcheting down their expectations for growth over the next year. While many still expect economic expansion to continue in the longer term, "we have definitely hit a soft patch," one Wharton faculty member notes.
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Shooting the Messenger: Quarterly Earnings and Short-term Pressure to Perform
While most experts agree that a single-minded focus on the short term can cause negative consequences for companies, they also suggest that blaming quarterly earnings reports, and the pressure to meet analysts' targets or company guidance, is like shooting the messenger. Although the system of quarterly earnings might be broken, fixing it is no easy matter and might create even more pressure to produce immediate results.
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Surviving Silly Bandz: Prolonging the Shelf Life of Fads
Fads are hard to miss. Whether it's this summer's craze -- Silly Bandz, the rubber-band bracelets that have become a must-have accessory for children -- Beanie Babies or the Rubik's Cube, they take off like a rocket in popularity and then seem to fizzle out just as quickly. You might think fads are kids' stuff. But adults aren't immune to the fad machine -- remember all those grownups sporting Crocs a few years ago? And while fads present challenges to businesses riding that wave, they can also spell opportunity if managers take the cash generated by these crazes and use it to build a sustainable business.
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ABC's IPO Underscores the ABCs of Banking in China
With the world record-breaking $22 billion IPO of Agricultural Bank of China (ABC) on July 15, Beijing relinquished another small part of its hold on the country's financial services sector. But the process of modernizing the country's banks is far from over, say experts in China and beyond. As ABC and its local rivals struggle to shed their legacy as state-directed "policy banks," many observers still question the central government's willingness to cede control over the balance sheets of what have become some of the world's largest lenders.
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'Turning Social Capital into Economic Capital': Straight Talk about Word-of-mouth Marketing
If your hair stylist gave you $10 every time you sent one of your friends her way, you might be more tempted to tell everyone what a fabulous stylist she was -- or you might even try to make new friends to refer. This clever method of customer acquisition is a form of word-of-mouth marketing known as a referral program, and it is becoming increasingly popular in a wide range of industries, from financial services and automobiles to newspapers and hotels. Indeed, according to a new study co-authored by Wharton marketing professor Christophe Van den Bulte, referral programs are a financially attractive way for firms to acquire new customers.
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Mid-life Crisis? Venture Capital Acts Its Age
The venture capital community is showing signs of middle age -- moving more slowly and cautiously than before, and hitting fewer home runs than it did in younger, leaner days. As a result, experts say, the sector is having trouble producing the robust performance long associated with it. This means investors need to look at venture capital, and its impact on their portfolios, in a new way.
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'Talking the Talk': Jeff Schwartz on Building Talent During a Downturn
According to a year-long project by Deloitte initiated at the start of the global economic downturn, the firms that posted stronger performances and were optimistic about the future were those that paid more than lip service to the importance of retaining top employees. Jeff Schwartz, global leader for Deloitte Consulting's organization and change service line, shared the results of the study, which included approximately 1,800 executives, at the recent 14th annual Wharton Leadership Conference.
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Why Gita Wirjawan Wants to Open Indonesia to International Investors
Indonesia's economy is on track to hit $1 trillion in GDP by 2014. The country is the world's third-largest democracy, and is in a demographic sweet spot -- half its population is under 30. But Indonesia is more widely known for natural disasters and natural resources than for its industry and infrastructure. Gita Wirjawan, a 44-year-old former investment banker with Goldman Sachs and J.P. Morgan, last year became Indonesia's chairman of Badan Koordinasi Penanaman Modal (BKPM), the country's Investment Coordinating Board, a ministerial-level post. He believes "the world needs to understand Indonesia in a different way." Wirjawan spoke with Knowledge@Wharton about his efforts to attract global investors.
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Special Section
