Knowledge@Wharton

Investor Sentiment and Stock Prices: Explaining the Ups and Downs

Wed, 09 May 2012 16:05:48 EST

Academics, traders and money managers are forever trying to figure out what makes stocks rise and fall. Some influences are clear, like the price gain after a company reports strong earnings. But other behaviors are mystifying. For example, why do shares of companies with fast asset growth sometimes do better than expected according to standard measures like earnings? And why do they sometimes do worse? New research by Wharton finance professor Robert F. Stambaugh and two colleagues shows that market-wide investor sentiment is a key influence in such stock return anomalies.

State of the Unions: What It Means for Workers -- and Everyone Else

Wed, 09 May 2012 16:05:48 EST

Labor unions have long had a position of prominence in American business and political life. But their influence has been on the decline in recent decades as membership ranks have dwindled. The increasing irrelevance of unions will have far-reaching implications, Wharton experts and others say, including the loss of one of the few ways that working class Americans can engage in the political process and become educated about labor laws. Corporations will feel the effects as well -- and they won't necessarily be positive, experts add.

Etsy Seeks Scale without Losing Its 'Street Fair' Aesthetic

Wed, 09 May 2012 16:05:48 EST

Etsy was launched as a ragtag website for artists and craftspeople to sell their wares. Today, it has become one of the Internet's most prominent tastemakers. As the company grows, experts caution that it must be careful not to alienate its faithful shop owners and customers by going too commercial and straying from its independent, artsy roots, or by becoming bogged down in privacy and seller credibility concerns.

Everyone's Problem: Looking Beyond the Wal-Mart Bribery Case

Wed, 09 May 2012 16:05:48 EST

In a case that continues to reverberate across borders, Wal-Mart Stores, the world’s largest retailer, announced recently that it has started its own probe into allegations that executives at its Mexican operations made hundreds of illegal payments to help expedite the opening of new stores. According to legal and ethics experts at Wharton and elsewhere, the case raises broader questions about how multinational companies conduct business in foreign countries.

Declining Employee Loyalty: A Casualty of the New Workplace

Wed, 09 May 2012 16:05:48 EST

If loyalty is defined as being faithful to a cause, ideal, custom, institution or product, then there seems to be a certain amount of infidelity in the workplace these days. The 10^th annual survey of employee benefits, trends and attitudes released in March by MetLife puts employee loyalty at a seven-year low and says one in three employees plans to leave his or her job by the end of the year. Wharton faculty and others look at the evolving relationship between employees and employers.

Special Report: Europe Struggles to Hold Itself Together

Wed, 09 May 2012 16:05:48 EST

Dramatic economic and financial developments in Europe never seem to quit. In the latest news, several eurozone countries have slipped back into recession, bringing a backlash against austerity policies into full swing. Now, the election of Socialist President Francois Hollande in France may offer a path to more growth-oriented policies, but big questions remain about which ones are economically -- and politically -- viable. To help clarify the implications for business and investors, Knowledge@Wharton has prepared a special report on the challenges facing Europe.

Saving Southern Europe's 'Lost Generation' of Jobless Youth

Wed, 09 May 2012 15:49:29 EST

In Spain and Greece, more than 50% of young people between 18 and 24 are out of work. In Italy and Portugal, the number is close to 30%. This represents a social and economic disaster that could have devastating consequences for Southern Europe, rippling outward toward the rest of the continent and the world. Experts at Wharton and elsewhere say outdated labor regulations combined with a slow economy have contributed to the problem. But even if labor laws are restructured, a solution will be hard to work out, all the more so now that many countries in Europe have slipped back into recession.

Mario Monti's Long March to Get the Italian Economy on Its Feet

Wed, 09 May 2012 15:49:17 EST

Mario Monti, the economist whose government replaced the Berlusconi administration in Italy last December, brings a technocrat’s view to the task of reviving the country’s economy. According to experts from Wharton and elsewhere, this task will be made easier by the fact that the Italian economy is in better shape than that of countries like Greece. Still, Monti faces enormous challenges, and major structural reform will be needed.

What Hollande's Election Means for the Eurozone

Wed, 09 May 2012 15:49:08 EST

In the aftermath of the election of Socialist Francois Hollande as the new president of France, eurozone austerity policies in Europe, which many now blame for pushing much of the Continent back into recession, appear likely to be loosened. At the same time, at least some complementary growth-oriented policies may be introduced. Big questions remain, however: What will these changes look like, and how much difference will they make? (Article with podcast)

How Emotional Intelligence Helps the Bottom Line

Thu, 03 May 2012 14:35:39 EST

In this third and final segment of the interview with Chade-Meng Tan, best selling author of Search Inside Yourself, Knowledge@Wharton explores the relationship between emotional intelligence and financial performance. According to Meng, companies as diverse as GE, Patagonia, Zappos, Genentech, American Express and MetLife have seen positive business results through practices based on emotional intelligence. Mindfulness can also help laid off job seekers find work faster.

How Emotional Intelligence Can Help Resolve Conflicts and Build Tough, Kind Leaders

Thu, 03 May 2012 14:35:33 EST

The second segment of Knowledge@Wharton's interview with Google's Chade-Meng Tan, author of Search Inside Yourself, focuses on the role that emotional intelligence can play in helping managers resolve conflicts within high-performance teams. It also shows how the Google SIY program, through compassion training, has helped managers become more successful and charismatic.

IT Innovations Dominate 2012's 'Great Eight' Business Plans

Tue, 01 May 2012 11:40:19 EST

Since launching during the height of the dot.com bubble of the early 2000s, Wharton's Business Plan Competition has seen ever increasing diversity in entries from student entrepreneurs. This year, a big theme was IT solutions for business problems, especially in the health care field, although ideas related to online marketing and education were also presented.

Google's Chade-Meng Tan Wants You to Search Inside Yourself for Inner (and World) Peace

Wed, 25 Apr 2012 15:51:05 EST

Chade-Meng Tan (Meng) was among the earliest engineers to be hired at Google. Since 2007, he has been running a seven-week personal growth program called Search Inside Yourself, whose mission is to promote peace and harmony through the cultivation of emotional intelligence among Google employees. Meng has now written a book titled, Search Inside Yourself: The Unexpected Path to Achieving Success, Happiness (and World Peace) to share these tools and techniques with companies everywhere. He spoke with Knowledge@Wharton about his conspiracy for world peace. (Podcast with transcript)

King of the Hill: Can Established Tech Companies Be Bested?

Wed, 25 Apr 2012 15:51:05 EST

Replicating a less-established competitor's innovative offerings or features can be relatively easy for an incumbent technology company. The practice has become increasingly common -- to the point that many wonder if it's still possible for an upstart to enter an existing market and effectively compete. But that doesn't mean dominant firms like Google and Facebook should stop watching their backs, Wharton experts say. Despite reluctance on the part of users to abandon an established service, there is always the chance that a nimble newcomer will enter a market and eat away at an incumbent firm's user base.

Changes Needed at Avon Are More Than Cosmetic

Wed, 25 Apr 2012 15:51:05 EST

Sherilyn McCoy, Avon Products' new CEO, faces a daunting list of challenges: a three-year internal investigation into charges of government bribery in China; an SEC investigation into alleged leaks to analysts; possible takeover offers from two different suitors, and a stock that lost nearly half its value in 2011. Wharton faculty offer a roadmap for getting Avon back on its feet.

E-book Price-Fixing: Finding the Best Model for Publishers -- and Readers

Wed, 25 Apr 2012 15:51:05 EST

In a case that has attracted worldwide attention, Apple and five book publishers were sued this spring by the U.S. Department of Justice on the grounds that they colluded to fix prices for e-books sold on Apple's iBookstore website. The legal controversy over Apple's efforts to use the so-called "agency model" when selling books directly to consumers offers a good opportunity to examine the benefits and costs of adopting that approach, both for online retailers and their customers, notes Wharton marketing professor Z. John Zhang, who has co-authored a recent paper on the topic.

Optimism Is Up, but the U.S. Housing Market Faces a Painful Shift

Wed, 25 Apr 2012 15:51:05 EST

Spring is typically a peak season for home buying -- a time of year when Americans start thinking about trading up, downsizing or purchasing a vacation home. But four years after the start of the financial crisis, the market is still shaky. Although there have been some signs of life recently, Wharton experts say the crisis changed the game of home-buying for the long term, and possibly forever -- creating significant consequences for the industry and consumers.

Why Eurozone Woes are Creating Headwinds for Global Firms

Wed, 25 Apr 2012 15:51:05 EST

Europe is in crisis -- and that has major implications for multinational firms with significant operations in the region. In fact, while much is written about the race by corporations to penetrate emerging markets like China and Brazil, the reality is that the investment by multinationals in Europe dwarfs the assets they have in those fast-growing economies. And the sovereign debt crisis in Europe, along with weak economic growth, is sparking changes in how these firms operate -- altering everything from manufacturing strategies to marketing to financial maneuvers.

Jon Huntsman, Jr., on Republican Politics, the U.S. Economy and China's Transition

Wed, 25 Apr 2012 15:51:05 EST

According to Jon Huntsman, Jr., former Utah governor and Republican presidential candidate, "partisanship has seeped into campaigning [so much] that breaking through with a message that is beyond party politics ... is a very challenging thing to do." Yet in an interview with Knowledge@Wharton, he spoke about the importance of public service, as well as the need for fundamental tax and energy reform, the outlook for China in the coming decade, the role of the media in covering elections, his respect for Ronald Reagan and what he plans to do in the coming months, among other topics. (Podcast with transcript)

Does It Make Sense to Have an Industrial Policy? Ask Howard Pack

Wed, 11 Apr 2012 14:27:58 EST

Whenever an industry runs into trouble -- and especially when it starts hemorrhaging jobs -- demands for support and subsidies are heard. But does having an industrial policy really make sense? According to Howard Pack, a professor of business and public policy at Wharton, an interventionist government policy generally plays a limited role in bringing about an improvement. In fact, he adds, government interventions can sometimes lead to harmful results. (Podcast with transcript)