Peter Cappelli - Faculty Research in Knowledge@Wharton

Half-a-Million Job Cuts: Is There a Strategy Behind the Layoffs?

Wed, 04 Feb 2009 17:07:39 EST

In a single week in January, corporations around the world laid off nearly 100,000 workers. Since September last year, more than half a million jobs have been eliminated, even at companies that were doing well some time ago. A number of observers are blaming this trend on the economic downturn or on a restructuring of the global economic system. But is this really the case? According to experts from Wharton and elsewhere, what companies are experiencing is neither an indication of a transformation nor a blanket prognosis for the rest of the economy. Instead, they say, the job announcements highlight operational weaknesses and strategic issues that have been lurking under the surface for years.

Outrage over Outsized Executive Compensation: Who Should Fix It and How?

Wed, 04 Feb 2009 17:07:39 EST

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?

Carol Bartz's Challenge at Yahoo: Choose a Path, Build a Team and Do It Fast

Wed, 21 Jan 2009 16:32:55 EST

New Yahoo CEO Carol Bartz has a long to-do list -- chart the company's strategy, weigh a potential search partnership with Microsoft, boost morale and round out her management team -- and not much time to deliver amid a weak economy that is hurting online advertising, say experts at Wharton.

Job-less: Steve Jobs's Succession Plan Should Be a Top Priority for Apple

Wed, 07 Jan 2009 16:53:55 EST

Companies with strong corporate cultures can usually count on continued success if they can seamlessly transfer power to an executive from a strong bench of managers. But selecting the successor to Apple CEO Steve Jobs will be tricky, given the degree to which he is tied to Apple's identity, say Wharton faculty.

As Layoffs Spread, Innovative Alternatives May Soften the Blow

Wed, 26 Nov 2008 12:18:24 EST

Just how bad will the economy get? For employers facing tough decisions about layoffs, the question is far from rhetorical. If the current economic turmoil is contained sooner than expected, premature layoffs could be a disaster. If not enough employees are laid off and the recession continues, the company's bottom line could suffer. What options do employers have when it comes to cutting payroll without adversely affecting the talent pool, employee morale or the future of the company?

Wanted: A President Who Can Lead During a Time of 'Daunting' Challenges

Wed, 01 Oct 2008 17:54:21 EST

The new president's job, says one Wharton professor, "will be as hard as any job any person has ever had." For the 44^th president of the United States, extraordinary managerial and cognitive abilities will be needed to tackle unprecedented challenges, including wars being waged in two countries and a financial system on the verge of collapse. Wharton and University of Pennsylvania faculty members offer their views on which leadership qualities will be most important over the next four years, and why. This article is the third in a series about economic and leadership issues focusing on the November 4 election.

Not What, Not How, but Who? Western Companies Face a Worldwide Talent Crunch

Mon, 22 Sep 2008 16:32:53 EST

Faced with an aging workforce and a growing demand for skilled workers in emerging markets like China and India, companies in the West are grappling with a talent crunch of unprecedented scope. According to experts at Wharton and The Boston Consulting Group, management responses include over-hiring to meet future needs, upgrading training in concert with universities and in-house corporate schools, and extracting greater productivity through innovation.

Eyes on the Wrong Prize: Leadership Lapses That Fueled Wall Street's Fall

Wed, 17 Sep 2008 20:25:57 EST

Executives at AIG, Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac may have ignored or failed to see the level of risk their companies were taking on in a crusade to enhance results and their own compensation, according to Wharton faculty and industry analysts. In some cases, the management crisis was fueled by managers simply choosing not to lead.

'Don't Touch My Perks': Companies that Eliminate Them Risk Employee Backlash

Wed, 23 Jul 2008 13:40:28 EST

Earlier this summer, when employees first learned of a Google plan to upgrade and dramatically raise the price of its day care program, they wept. According to Wharton faculty and compensation experts, that reaction shouldn't come as a big surprise. Trying to eliminate any perk, they say, can cause feelings of betrayal and even retaliation against the company on the part of employees. With the current economic slump, more 'de-perking' could be on the way.

The Talent Hunt: Getting the People You Need, When You Need Them

Wed, 16 Apr 2008 19:12:02 EST

Ask any CEO or senior level executive what his or her biggest challenge is, and the answer is almost always finding and keeping good people. Yet most executives fail to manage their company's needs in a way that recognizes the unpredictability of the global marketplace. In a book titled, Talent on Demand: Managing Talent in an Age of Uncertainty, Peter Cappelli, director of Wharton's Center for Human Resources, proposes a new approach to this issue based on applying the principles of supply chain management to people. He and Joyce Bradley, senior vice president and general manager, Delaware Valley region, of Lee Hecht Harrison, spoke with Knowledge@Wharton about talent management, including the challenges of managing employees in a recessionary economy.

'Talent on Demand': Applying Supply Chain Management to People

Wed, 20 Feb 2008 15:18:03 EST

Failing to manage your company's talent needs, says Wharton management professor Peter Cappelli, "is the equivalent of failing to manage your supply chain." And yet the majority of employers have abysmal track records when it comes to the age-old problem of finding and retaining talent. In a book coming out in April titled, Talent on Demand: Managing Talent in an Age of Uncertainty, Cappelli offers a fundamentally different paradigm for thinking about talent management, one that takes many of its lessons from just-in-time manufacturing.

The Domino Effect: Will Airlines Follow One Another in the Consolidation Game?

Wed, 20 Feb 2008 15:18:03 EST

Delta Airlines is reportedly about to merge with Northwest Airlines in a deal that's likely to set off a major round of consolidation in the airline industry. Wharton experts say that other major airlines are likely to fall in line with their own consolidation plans. Or so the speculation goes. But this scenario has been talked about before. Is the latest consolidation dance for real? And what are the implications of such mergers for consumers, low-cost carriers and the economics of the airline industry overall?

Is One Global Model of Corporate Governance Likely, or Even Desirable?

Wed, 09 Jan 2008 15:30:15 EST

In Germany, labor unions traditionally have had seats on corporate boards. At Japanese firms, dozens of loyal managers cap off careers with a stint in the boardroom. Founding families hold sway on Indian corporate boards. And in China, Communist Party officials are corporate board fixtures. But as companies continue to globalize, should they consider adopting one uniform model of corporate governance? Or do global investors benefit from diverse governance structures? Wharton faculty and others offer their opinions.

From Incentives to Penalties: How Far Should Employers Go to Reduce Workplace Obesity?

Wed, 09 Jan 2008 15:30:15 EST

This month, more than half of Americans probably made health-related New Year's resolutions, but few are likely to stick to them. Employees at CFI Westgate Resorts in Orlando, Fla., might consider themselves lucky: They have an incentive to get healthy. If they join in the company-wide weight-loss contest and reach their goals, they could win cash prizes or a luxury vacation. Westgate isn't the only employer trying to push employees, especially obese ones, into healthy lifestyles. But using incentives, and in some cases penalties, to change employee behavior raises a host of legal, moral and practical questions, according to Wharton experts and others.

CEO Succession: Has Grooming Talent on the Inside Gone by the Wayside?

Wed, 28 Nov 2007 15:54:07 EST

The recent departures of two chief executives -- Stanley O'Neal of Merrill Lynch and Charles Prince of Citigroup -- in the wake of major financial losses at their firms, have focused renewed attention on the issue of succession planning. Published reports speculated that both positions would be filled by outside candidates, and on November 14, Merrill Lynch announced that it had chosen John Thain, CEO of NYSE Euronext, to succeed O'Neal. While such a move is not surprising for a board wanting to signal a fresh start to investors, Wharton faculty say that, increasingly, companies are looking to fill top spots with external candidates, while spending less time on grooming future leaders and managing talent in general.

The 'Eldercare Generation' Cares About Continuing to Work: Are Companies Interested in Keeping Them?

Wed, 17 Oct 2007 15:24:43 EST

When the AARP recently announced its seventh annual "Best Employers for Workers over 50" awards, the winners didn't get there by offering the traditional fringe benefit trio of health, life and disability insurance. Instead, the AARP recognized companies for providing workers over 50 with "forward-looking" benefits packages that include, for example, alternative work schedules and lifelong learning and career training opportunities. But are companies interested in offering jobs, or job security, to older workers? And why aren't these workers following the retirement path their parents did?

Career Crisis: Monster.com Has Choices to Make as It Approaches 'Middle Age'

Wed, 03 Oct 2007 14:47:58 EST

When the Internet was young, pioneering online job recruitment firm Monster.com rocked the way people look for work. Now, Monster itself has hit a rocky patch, marked by the resignation of three top officers, a major security breach and the rise of new competitors, including Craigslist. According to Wharton faculty and analysts, Monster is confronting the "middle age" that all veteran firms of the Internet's early days must face. The company remains a force in employment advertising, they say, but as it settles into maturity, Monster must find new ways to protect its established markets and expand overseas.

Are Franchises Bad Employers? A Closer Look at Burger Flippers and Other Low-paid Jobs

Wed, 05 Sep 2007 15:46:23 EST

The idea of "McJobs"-- low-paying positions with little chance of advancement -- bothered the CEO of McDonald's so much that, when Merriam-Webster included the term in its dictionary in 2003, he wrote a public letter of protest. His plea went unheeded. "McJobs" stayed. As this anecdote suggests, the idea that franchises, especially those in the fast-food sector, create dead-end jobs is widespread. Yet in a new study, Peter Cappelli, director of Wharton's Center for Human Resources, and colleague Monika Hamori challenge conventional wisdom and offer evidence that franchise jobs tend to be better than those in equivalent non-franchise operations.

Playing Favorites -- Romantic or Otherwise -- Is a Messy Game in the Workplace

Wed, 08 Aug 2007 15:43:21 EST

This spring, World Bank president Paul Wolfowitz was forced out after being accused of arranging a big raise and promotion for a woman with whom he was having a relationship. As anyone who works in an office knows, though, favoritism isn't confined to love and sex: Family relationships and close friendships can upset co-workers' sense of fairness, too, and end up undermining an organization's performance. What's the solution? There's no one answer, according to Wharton faculty and other experts, but companies would be well-advised to keep their rewards systems transparent and to have clear policies regarding conflicts of interest.

Feel Free to Move About the Airport: Turbulence Continues to Roil the Airline Industry

Wed, 25 Jul 2007 14:40:29 EST

Wharton professor Serguei Netessine, who recently had to spend the night in an airport hotel after being kicked off an overbooked evening flight, is one of thousands of airline passengers this summer who have been stranded on runways or sleeping in airports. While airline service is no longer the white-glove experience it once was, it has recently gone beyond bad food and snappish flight attendants. "Previously, airlines worried about dissatisfied customers. Now I don't think they worry about it because the customer service at all airlines is so horrible," says Netessine. Knowledge@Wharton looks at the current state of the airline industry.

Some Free Advice for Yahoo CEO Jerry Yang

Wed, 25 Jul 2007 14:40:29 EST

Yahoo co-founder Jerry Yang is about to find out that being a CEO is a lot different than being the ceremonious Chief Yahoo, as he was called until last month. Yang, who became Yahoo's new CEO on June 18, faces a daunting to-do list that includes reinvigorating the company, closing a performance gap with Google, thwarting challenges from social media sites such as Facebook, delivering financial results that make Wall Street cheer and charting a course for the future. His first deadline comes in about 100 days. Knowledge@Wharton asked faculty members for advice on how Yang should handle this management challenge.

On the Fence: Are Illegal Immigrants Good or Bad for the U.S. Economy?

Wed, 13 Jun 2007 14:33:58 EST

Last week, the United States' first major immigration reform bill in two decades collapsed in the Senate. Buried in the ongoing debate was the potential economic impact of a measure that could change the composition of America's workforce in significant ways: By cracking down on illegal immigration, the legislation could constrict the future supply of low-skilled workers, while a move to skill-based visa evaluations could provide more workers for booming high-tech industries. Meanwhile, it isn't exactly clear what impact the country's 12 million illegal residents have on its economy. Experts from Wharton and elsewhere weigh in.

Chief Receptionist Officer? Title Inflation Hits the C-Suite

Wed, 30 May 2007 15:38:15 EST

We're all familiar with titles like chief executive officer, chief financial officer and chief operating officer. We have even grown used to chief technology officer, chief marketing officer and chief diversity officer. But what about chief talent officer, chief cultural officer, chief innovation officer, chief privacy officer, chief apology officer and chief geek, to name just some of the more contemporary titles in today's companies? On the surface, this looks like title inflation -- an overabundance of C-level jobs that cheapen the prestige that used to go along with promotions. Yet according to several Wharton faculty members, there is more to this story than inflated egos.

Workplace Loyalties Change, but the Value of Mentoring Doesn't

Wed, 16 May 2007 15:35:19 EST

In Homer's poem "The Odyssey," Odysseus had a tough time finding his way home after the Trojan War, what with all those monsters threatening to derail his journey. But Odysseus at least had left a wise and trusted fellow named Mentor to be the guardian and teacher of his son, Telemachus. Modern employees need mentors as much as Telemachus, especially in these times of upheaval. In fact, mentoring is just as important as ever for younger workers -- and for organizations themselves -- according to experts at Wharton and elsewhere.

Short-Circuited: Cutting Jobs as Corporate Strategy

Wed, 04 Apr 2007 15:37:12 EST

When Circuit City announced last week that it was laying off 3,400 workers so it could rehire new ones at lower salaries, it raised the question of just what strategic benefits the company -- or any company -- expects to achieve through employee downsizing. Clearly these benefits depend on the underlying strength of the organization and the specific reasons behind the cost-cutting, but most experts agree that unless layoffs are part of a well-planned strategy, the move could cause as many problems as it was intended to cure.

Perk Place: The Benefits Offered by Google and Others May Be Grand, but They're All Business

Wed, 21 Mar 2007 15:21:30 EST

Free gourmet food, 24-hour gym, yoga classes, in-house doctor, on-site haircuts, dry cleaner, nutritionist, swimming pool ... .These are just some of the perks Google -- and many other organizations -- offer employees. Companies have their reasons, of course: They want to attract and retain the best knowledge-workers they can, help them work long hours by feeding them gourmet meals on-site and handling time-consuming personal chores, and show them that they are valued members of the team. But, as Wharton faculty point out, there may be a potential downside to all this largesse.

'Dude, You Need a CEO': The Return of Michael Dell

Wed, 07 Feb 2007 16:03:58 EST

It's a common occurrence in Corporate America: An entrepreneurial founder starts a successful business, builds it to a certain size and hands it over to a CEO to run. But then, when things don't go well, the founder steps back in to take direct control of the organization. That, essentially, is what happened last week when Michael Dell returned to become the CEO of Dell, replacing Kevin Rollins. What will it take to turn Dell around? Wharton management professor Peter Cappelli is the director of the school's Center for Human Resources. He spoke with Knowledge@Wharton about these issues.

Home Unimprovement: Was Nardelli's Tenure at Home Depot a Blueprint for Failure?

Wed, 10 Jan 2007 15:46:57 EST

After years of a declining stock price, Home Depot announced the resignation of CEO Robert Nardelli on January 3. Wharton faculty members and other experts say Nardelli, a talented former executive at General Electric who came within a hair's breadth of replacing Jack Welch as head of the giant conglomerate, brought the wrong toolbox to the job after he was recruited for Home Depot's top spot in December 2000. With strategic missteps, an outsized compensation contract and a knack for alienating employees and shareholders, Nardelli turned out to be a star-crossed leader.

Efforts Are Growing to Trim the Fat from Employees -- and Employers' Health Care Costs

Wed, 01 Nov 2006 15:04:42 EST

With all the statistics showing how many adults in the United States are obese (30%), how many deaths are caused each year by obesity (365,000) and how bad the problem is (getting worse, not better), it's no surprise that obesity is definitely on employers' radar screens this year. But, Wharton experts and others point out, obesity is not just bad for the individual; it also weighs heavily on companies' rising health care costs.

Plateauing: Redefining Success at Work

Wed, 04 Oct 2006 14:39:32 EST

It's not work/life balance and it's not career burnout. Instead, some employees are starting to set career paths based on their own needs, values and definitions of success. They are otherwise talented and energetic workers who are "plateauing" -- setting boundaries around their ambitions rather than striving to climb the next step up the corporate ladder. Some companies are beginning to take notice, providing new options and opportunities in the ongoing war for talent.

Reluctant Vacationers: Why Americans Work More, Relax Less, than Europeans

Wed, 26 Jul 2006 12:03:13 EST

As most travelers to Europe know, French workers tend to take the month of August off, shutting down many of their shops and cutting back the hours of some museums. But the French aren't alone. People in much of Western Europe can afford to check out for a month because they receive an average of nearly two months a year in paid leave, a combination of vacation and government holidays. That distinguishes them from citizens of the United States, who, despite a similarly productive economy and a comparable standard of living, enjoy about half as much paid time off. What gives? Why are Americans reluctant, or unable, to extricate themselves from their jobs and sign up for some serious vacation time?

The Immigration Debate: Its Impact on Workers, Wages and Employers

Wed, 17 May 2006 15:28:37 EST

Illegal immigration into the United States has sparked heated debate in Congress, roiled the two main political parties, and prompted hundreds of thousands of immigrant supporters to take to the streets recently in peaceful demonstrations nationwide. At stake are the lives and livelihoods of as many as 12 million undocumented workers, the companies they work for, and the job opportunities of millions of low-skill American citizens. The large number of illegal immigrants raises key economic questions: Do illegal immigrants depress wages paid to low-skill workers? Do they take jobs away from Americans? How dependent on undocumented workers is the U.S. economy? Should illegal immigrants be compelled by law to return to their native countries? Or should Congress hammer out legislation that would allow illegal immigrants to pay some type of penalty, yet remain in the United States and continue working?

The Succession Question at Tech Firms: When's the Right Time to Go?

Wed, 03 May 2006 15:07:25 EST

The recent resignation of Scott McNealy as CEO of Sun Microsystems, the company he founded 22 years ago, is another milestone in the succession process of a large technology company. But tech companies often pose unique succession issues, in part because of their unusually fast growth and young founders, according to Wharton faculty and technology experts. The challenges are especially critical when the entrepreneurs are celebrities, and when the company has grown large enough that broad-based management skills become as crucial as entrepreneurial passion.

The Ins and Outs of Buyouts: Should Companies Offer Them? Should Employees Accept Them?

Wed, 19 Apr 2006 16:18:31 EST

When General Motors last month offered buyouts and early retirement packages to 113,000 hourly workers, the move focused new attention on a key aspect of the continually evolving relationship between employers and employees. Buyouts often signal management's decision to strategically change the company's direction and start easing out those workers who are part of what is now considered the old regime. Meanwhile, employees who stay behind suddenly recognize that they are replaceable parts, with little job security and no long-term commitment from the company. What messages do buyouts send to employees? How are buyouts structured? Is there a 'right' way and a 'wrong' way to handle the buyout process?

Avian Flu: What to Expect and How Companies Can Prepare for It

Wed, 08 Mar 2006 16:27:20 EST

The avian flu that is steadily making its way around the globe represents a huge challenge for governments, corporations and citizens worldwide. No one knows what will happen to the avian influenza virus in the coming months and years. Will it mutate into a strain that will allow people to readily infect others? Or will it fizzle out? Despite the uncertainty, many people are taking into account scenarios ranging from mild to severe in order to plan for what could turn out to be a calamity. Faculty members at Wharton, health care professionals and risk consultants say it is important that companies assess how their organizations could be harmed by a pandemic and take preventive measures to mitigate the damage and keep their enterprises operating.

Unlike Death and Taxes, Pensions Are No Longer Guaranteed

Wed, 08 Feb 2006 16:31:18 EST

IBM. Verizon. Sears. Hewlett-Packard. Motorola. The list of corporations that have put a halt to guaranteed pension plans comes as a jolt to Baby Boom employees entering what they thought would be their peak pension-building years. At the same time, new accounting rules and Congressional legislation are being drafted to close the U.S. pension-funding gap, now estimated at $450 billion. While some proposals under discussion could make it easier for companies to discontinue defined-benefit plans, others would create incentives to support defined-contribution programs, such as 401(k) plans, according to Wharton faculty and pension experts. Amid all this flux, they add, one thing seems certain: Pension plans have become risky business.

What Lies Ahead for the U.S. Economy in 2006

Wed, 08 Feb 2006 16:49:21 EST

The economic growth that the United States enjoyed in 2005 will continue in 2006, as stronger business investment begins to pick up the slack on the part of consumers who will curtail the white-hot spending that has been a key factor in propelling the economy, according to Wharton faculty members and private-sector economists. In addition, these experts say, oil prices will remain high in 2006, but not much higher than they are now, the residential real estate boom will cool and American workers will be forced to deal with a volatile employment market.

'One for All' or 'One for One'? The Trade-off between Talent and Disruptive Behavior

Wed, 30 Nov 2005 15:55:06 EST

The talk of the National Football League in recent weeks has been Terrell Owens, the talented wide receiver who was let go by the Philadelphia Eagles because of repeated disruptive behavior that alienated teammates, coaches and fans alike. Although the saga of T.O. -- as he is familiarly known -- dominated the sports pages for days on end, coverage of his relationship with the Eagles' organization could just as easily have found a home between the covers of an academic management journal. Faculty members at Wharton and other experts say Owens is a classic case of a star employee who, because of his immense talent, was given wide latitude even though he engaged in eccentric (at best) and abusive (at worst) behavior. How employers view the trade-off between talent and disruptive behavior sends a powerful message about teamwork in an organization's culture, they say.

Human Capital: Can India Bridge the Knowledge Gaps Needed for Research?

Mon, 21 Nov 2005 14:56:34 EST

Companies in the U.S. and Europe are increasingly willing to conduct sophisticated research projects in India, especially in industries such as pharmaceuticals. While India has large numbers of educated workers -- including 22 million graduates -- does the country have the knowledge base needed to sustain research? Experts at Wharton and elsewhere point out that Indian firms are investing in human capital and building skills to close the knowledge gaps that may exist.

Is Your HR Department Friend or Foe? Depends on Who's Asking the Question

Wed, 10 Aug 2005 15:55:55 EST

Talk to human resources professionals, consultants and scholars who study the workplace and you will find two different views of HR: According to its critics, HR departments are needlessly bureaucratic, obstructionist, stuck in the "comfort zone" of filling out forms and explaining benefits, and too closely aligned with the interests of senior managers yet lacking the business knowledge to become their strategic partners. The more positive view of HR is that it does play a key strategic role, providing direct input into major business transactions such as mergers and acquisitions and restructurings, and improving organizational effectiveness. The truth is probably somewhere in between -- a reflection of workplace evolution, the new global economy and changing expectations on the part of employees and managers.

Two New Studies Look at Mothers -- and Smokers -- in the Workplace

Wed, 27 Jul 2005 16:50:59 EST

Many parents love to brag about their children. Some even note their children's existence on their resumes. Perhaps they shouldn't. According to research presented by two Cornell University sociologists at a recent Wharton conference, mothers suffer when competing for jobs against similarly qualified fathers and childless men and women. Additional research discussed at the conference -- organized by Wharton's Center for Human Resources -- offered interesting observations on another workplace group: smokers. Scholars from Columbia University and Barnard College conclude that smokers are paid less on average than other workers because they may be less willing to invest time and effort in career advancement than nonsmoking colleagues.

Wishing Upon a Star: Hiring a CEO from Inside the Company Vs. Going Outside

Wed, 06 Apr 2005 17:18:11 EST

When Robert A. Iger was promoted from president to CEO of the Walt Disney Company on March 13, the decision raised a few eyebrows in the corporate world. It's highly unusual, succession experts say, for a company to select a number-two person to succeed the number-one executive when the company's shareholders are unhappy and the former chief was all but forced from office. Experts at Wharton and elsewhere discuss the merits of hiring an outsider CEO vs. an insider, and agree that, in Iger's case, success will hinge on his ability to follow through on his own vision -- in short, his ability to behave like an outsider.

The Human Side of Mergers: Those Laid Off and Those Left Aboard

Wed, 30 Mar 2005 10:14:34 EST

The initial headlines announcing mega-corporate mergers and acquisitions typically focus on Wall Street's appreciation for improved finances, less duplication of services and staff, the ability to grow faster, and the anticipation of higher returns for shareholders. When P&G recently announced that it would buy Gillette, for example, the fact that 6,000 people would lose their jobs was all but buried in the details of a deal that would link some of the world's most well-known household brands. Yet, as Wharton professors point out, companies that fail to factor in the costs of layoffs, declining morale, and the chaos that comes from restructuring are headed for trouble.

Few Survivors Predicted: Why Most Airlines Are Caught in a Tailspin

Wed, 09 Feb 2005 16:50:03 EST

Delta Airlines cuts fares in a price war that Merrill Lynch estimates will sap $2.5 billion in revenues from the six largest airlines. US Airways and United file for bankruptcy, and almost every other airline --Southwest is one of the exceptions -- reports significant losses. The cost of oil remains stubbornly high, adding significantly to cost pressures. The question is: How do you fix an industry littered with walking zombies? One answer, say Wharton faculty, is to let some of the sickest carriers die -- and stay dead.

Older Workers: Untapped Assets for Creating Value

Wed, 09 Feb 2005 16:50:03 EST

The days when an executive could look forward to a leisurely retirement out on the golf course are over, thanks to a possible looming job shortage, a graying population, low savings rates and an insecure Social Security system. The impact of these factors on both workers and companies was the subject of the Symposium on Older Workers, co-sponsored recently by the AARP Global Aging Program along with Wharton's Center for Human Resources and Boettner Center for Pensions and Retirement Research. Speakers included AARP CEO William D. Novelli, Olivia Mitchell, executive director of Wharton's Pension Research Council, and Thomas Dowd, a deputy assistant secretary at the U.S. Department of Labor.

The CEO's Path to the Top: How Times Have Changed

Wed, 26 Jan 2005 13:49:48 EST

In a new study that compares Fortune 100 executives in 1980 with their counterparts in 2001, Peter Cappelli, director of Wharton's Center for Human Resources, and colleague Monika Hamori document what many CEOs and other senior managers have no doubt already witnessed: The road to the executive suite and the characteristics of the executives who get there have changed significantly over the last two decades. Among the researchers' findings: Today's executives are younger, more likely to be female, and less likely to have Ivy League educations. They get to the executive suite faster than ever, hold fewer jobs along the way, spend about five years less in their current organization before being promoted, and are more likely to be hired from the outside.

Clash of the Titans: When Top Executives Don't Get Along with the Team

Wed, 12 Jan 2005 15:15:21 EST

Testifying in a Delaware court last month, Stanley P. Gold, a former Walt Disney Co. director, joined a long list of company executives who had dirty laundry to air regarding the 1995 hiring of Michael Ovitz as Disney's president and his subsequent firing in 1996. "This was two big volatile egos banging against each other and they just didn't get along," Gold testified, referring to Eisner and Ovitz. While the Eisner/Ovitz scenario presents an extreme case of management dysfunction, it contains all the elements of what companies seeking to build successful management teams should avoid, say Wharton professors and executive coaches.

How Should Companies Deal With Life After BPO?

Fri, 14 Jan 2005 14:57:33 EST

Once a company has decided to move some jobs overseas as part of a business process outsourcing (BPO) arrangement, it faces two major challenges. The first involves dealing with the external partner - whether it is a third-party provider or a captive BPO center - to ensure that work performance does not suffer. And second, it must take effective steps to redistribute work among the employees left behind. Experts at Wharton and elsewhere - including the CEO of a company that has sent work offshore - offer lots of advice on both issues.

The Next Four Years with George Bush

Wed, 17 Nov 2004 17:06:33 EST

President George W. Bush's re-election lifts a degree of uncertainty from business and the economy that could drive market rallies and stimulate growth. Eventually, however, a second Bush term that continues to fund tax cuts along with wars in Iraq and Afghanistan could ultimately weigh down the U.S. economy, according to Wharton faculty.

A Management Professor in Bahrain: Helping to Reform One Country's Economy

Wed, 22 Sep 2004 14:17:34 EST

Last year the Middle Eastern country of Bahrain, a small island off the coast of Saudi Arabia, asked Wharton management professor Peter Cappelli for advice on how to reform its labor markets. "They are in the process of creating institutions from scratch," says Cappelli, director of Wharton's Center for Human Resources, who met the Bahrainis through the U.S. State Department. "They are asking questions like, 'Should we have unemployment insurance and government-sponsored worker training? Should we have a welfare system?'" In short, hardly your typical consulting job.

Puzzling through the Jobless Recovery -- Or Is It a Fundamental Shift?

Wed, 24 Mar 2004 16:24:15 EST

On March 5, the U.S. Labor Department announced that the

U.S.

economy had created only 21,000 new jobs in February, far below the 150,000 that economists had predicted. The unemployment rate held steady at 5.6%, but only because many people have given up on finding jobs. Economists and other employment experts offer a host of possible explanations but no definitive answers. What is clear, however, is that technology, productivity gains, and job shifting on a global basis are all contributing to new trends in hiring.

Get Me Rewrite: How the BBC Mishandled Its Own Crisis

Wed, 25 Feb 2004 15:03:40 EST

The chairman and the top executive are gone, having resigned to deflect criticism from the organization and take responsibility for its mistakes. A high-profile staffer has left and a 740-page report by a senior judge has detailed a raft of errors. The British Broadcasting Corporation is embroiled in the biggest management crisis in its 80-year history. Experts are divided over whether the controversy will do long-term harm to the BBC’s reputation, but they agree that the broadcaster, like companies lately facing ethical crises in the United States, could have limited the damage by better handling the early stages.

Becoming the Best: What You Can Learn from the 25 Most Influential Leaders of Our Times

Wed, 11 Feb 2004 15:44:09 EST

To celebrate the 25th anniversary of Nightly Business Report, the most watched daily business program on

U.S.

television, Wharton and NBR this month announced their list of the 25 most influential business leaders of the past 25 years. Andy Grove, co-founder of Intel, won the No. 1 position, but the list also included Bill Gates, Warren Buffett, John Bogle, Jeff Bezos, Jack Welch and Oprah Winfrey, among others. Can these leaders' attributes help you become a better business leader in your own organization?

How Parmalat Differs From U.S. Scandals

Wed, 28 Jan 2004 14:24:31 EST

When the Parmalat scandal broke in mid-December it was quickly dubbed “Europe’s Enron,” suggesting that multi-billion dollar frauds are not, after all, a predominantly American phenomenon. But is the case of Parmalat, an Italian dairy company based in Parma that employs 36,000 people in 29 countries, really analogous to the American corporate scandals of the past three years?

Air France/KLM Merger: Perilous Flight Ahead

Wed, 22 Oct 2003 14:17:53 EST

Betting that bigger is better, Air France and KLM Royal Dutch Airlines announced their intention to merge into Europe�s largest air carrier last week. Although the new airline would be the sixth-biggest in the world (after five U.S. carriers), the merger is fraught with peril for both shareholders and travelers, say Wharton professors and others. If done right, it could create an efficient organization with lower costs, but without the power to charge monopoly fares. If managers or regulators slip, however, the result could be both higher fares and higher costs.

What Labor Shortage? Debunking a Popular Myth

Wed, 27 Aug 2003 00:00:00 EST

In recent years, Wharton management professor Peter Cappelli has heard companies warn about a coming labor shortage, to the point where this prediction is now routinely factored into discussions about human-resource issues. The problem, Cappelli found, is that no such shortage will occur. In his latest research Cappelli explains how challenges in recruiting and hiring stem from changes in the nature of the employer-employee relationship, not in a shortfall of workers caused by demographic shifts.

Another Reorganization? What to Expect, What to Avoid

Wed, 02 Jul 2003 00:00:00 EST

It�s a familiar scenario: A company brings in a new department head who immediately decides that the way to show leadership is to reorganize. Then a new division head comes on board, or a new CEO, and there are more reorganizations, sometimes several in one month. Yet according to Wharton management professor Peter Cappelli, frequent reorganizations �are like doctors treating patients with antibiotics.� The medication might work short-term, but �long-term it can be harmful.� Knowledge@Wharton looks at why some reorganizations succeed and others fail.

Royal Ahold's Royal Hold Up

Sun, 09 Feb 2003 00:00:00 EST

Europe, it would seem, is not immune to large-scale accounting scandals that, until recently, have been a symbol of U.S. corporate greed. A case of Enron-style financial accounting fraud recently rocked Royal Ahold, the Dutch food retailer and distributor that became the world�s third-largest grocer through an aggressive, and apparently ill-fated, acquisition strategy. In a pattern all-too familiar to U.S. investors, Ahold�s announcement that it had overstated earnings followed promises of 15% growth, a goal that ultimately became unreachable.

A Sweet Song? Delta Aims at the Low-Fare Market

Wed, 12 Feb 2003 00:00:00 EST

On April 15, 2003, a lime-green plane will depart New York City for Florida. On it ride the hopes of America�s third-largest carrier, as Delta�s new subsidiary, Song, takes wing. With a new staff and new attitude, Delta is hoping to break into the burgeoning low-fare air travel market to an extent that United, American and Continental haven�t been able to achieve. So far, pre-flight reviews are mixed.

Why Some Companies Retrain Workers, and Others Lay Them Off

Wed, 29 Jan 2003 00:00:00 EST

In today�s economy, the odds that employees� skills will need to be updated have increased, says management professor Peter Cappelli. The question then becomes, is your employer going to reinvest in you through retraining or lay you off and hire someone new? As director of the school�s Center for Human Resources, Cappelli wanted to know why a few companies have remained committed to retraining, even as the ethos of American business has changed. The answer, as Cappelli explains in a new research paper, has a lot to do with what is termed �social capital.�

Saving United Airlines: A Labor-Intensive Proposition

Wed, 18 Dec 2002 00:00:00 EST

Is United Airlines destined to go the way of other extinct species, like the dodo bird, the passenger pigeon and Eastern Airlines? Or is it destined to rise, phoenix-like, from the ashes of Chapter 11 of the U.S. Bankruptcy Code? Experts on the airline industry at Wharton and elsewhere say there are two indicators that can provide clues about how United�s future may shape up: the behavior of its labor unions and the health of the U.S. economy.

Germany: The Deadlocked Republic?

Wed, 09 Oct 2002 00:00:00 EST

By taking steps to help victims of summer floods and by sharply criticizing the United States� position on Iraq, German Chancellor Gerhard Schroeder eked out a victory last month over his conservative opponent. Now Schroeder�s challenge is to save his country from economic stagnation. Yet Wharton faculty members suggest that Germany�s problems are so acute that little can be done in the short term to reduce unemployment and achieve economic growth. Over the long haul, they say, what�s needed is a radical reform of the country�s rigid labor markets.

Want to Study Accounting or Medieval History? Chances Are, Your Employer Will Foot the Bill

Wed, 11 Sep 2002 00:00:00 EST

Peter Cappelli, director of Wharton�s Center for Human Resources, began his research into employer-paid tuition programs with some skepticism. Why, he wondered, would employers pay for workers to develop a credential (education degree) that is useful to other employers and will raise the workers' marketability? Furthermore, if the employer�s goal is to give workers skills for their current job, why not just offer training in-house? After several months of research, Cappelli has found some surprising answers, which he summarizes in a new paper entitled, �Why Do Employers Pay for College?�

Debate over Scarcity � and Skills � of IT Workers

Wed, 03 Jul 2002 00:00:00 EST

According to a recent study from the Information Technology Association of America, U.S. companies will be short nearly 600,000 qualified IT professionals over the next 12 months. Unemployed IT workers find that hard to believe. Indeed, the report has rekindled the debate over whether there are too few, or too many, skilled technology workers in this country, and what role, if any, immigrant workers should play in filling tech jobs.

What Happens to the Inner Circle of the Ousted CEO?

Wed, 19 Jun 2002 00:00:00 EST

When Dennis Kozlowski resigned on June 3 as chief executive of Tyco International � shortly before he would have been removed by the board � it raised questions about the future of top executives around him. Assuming they supported, or at least knew about, the strategies of their former boss, should they be ousted as well, or would the loss of institutional knowledge and expertise be too disruptive to the company? Wharton faculty offer their opinions.

As CEOs Fall Off Their Pedestals, Is a Leadership Crisis Looming?

Wed, 22 May 2002 00:00:00 EST

GE's Jack Welch, WorldCom's Bernie Ebbers, Enron's Kenneth Lay and Jeffrey Skilling, ABB�s Percy Barnevik. In recent months, the reputations of these once-soaring corporate captains have crashed to earth. Does their fall, along with the demise of other prominent CEOs, constitute a new crisis in business leadership? Speakers at an upcoming June 5 leadership conference at Wharton offer their opinions.

Vacationing in a Wireless World: Relaxation vs 4,000 Emails

Wed, 22 May 2002 00:00:00 EST

Not long ago, businessmen and women who took vacations could actually �get away from it all.� Office equipment was too big to bring along, and people normally did not give out their hotel�s telephone number to everyone on their rolodex. Not so today. Your office can fit in a laptop and every customer and contact has your cell phone number. Have we lost the art of taking a vacation and if so, can we get it back? Do we want to? Wharton professors and others offer some suggestions.

Speculate on This: What Motivates Investment Bankers?

Wed, 13 Feb 2002 00:00:00 EST

When management professor Peter Cappelli and the executive search firm Spencer Stuart asked a group of investment bankers to name their top career objective, the answer was hardly earth-shattering. The survey, however, also went on to look at the expectations and concerns of investment bankers at a time when their business has been rocked by recession and a terrorist attack.

The New Business Reality

Wed, 30 Jan 2002 00:00:00 EST

ideas about what effect those events would have on business and the economy. It was clear, however, that even before the attacks, major changes were underway that would alter the business landscape. To help understand these changes, Wharton�s Aresty Institute of Executive Education held a three-day symposium in December called Wharton on the New Business Reality: Scenarios and Strategies for the Future. Knowledge@Wharton covered the symposium.

What�s Ahead for 2002?

Wed, 16 Jan 2002 00:00:00 EST

What�s next? Will 2002 be like 2001, with unemployment going up, stock prices going down, the trade balance worsening and tech industries in turmoil? No one knows for sure, of course. But Knowledge@Wharton asked several Wharton professors for their best predictions about issues and trends in four key economic areas: the stock market, employment, international trade and technology.

Why Job Searching is the Second Most Popular Activity on the Internet

Wed, 05 Dec 2001 00:00:00 EST

With more than 20 million people registered on the monster.com job search site, it�s clear that we are a workforce on the move. In a recent executive education session, Peter Cappelli, director of Wharton�s Center for Human Resources, explained how a dramatically different labor market is changing not just the way people are hired and fired, but how they view their jobs, their employers and their careers.

How Swissair Landed in Trouble

Wed, 24 Oct 2001 00:00:00 EST

The problems of Swissair clearly multiplied after the September 11 terrorist attack and subsequent plunge in ticket sales. But industry experts say the company�s woes run deeper, involving management missteps that could occur at any corporation as well as troubles rooted in the economics, politics and culture of Europe.

What�s Hot: How Swissair Landed in Trouble

Wed, 24 Oct 2001 00:00:00 EST

Fear of Flying: Passengers and Airlines Can Expect Turbulent Times

Wed, 26 Sep 2001 00:00:00 EST

Government aid to beleaguered U.S. airlines will help stem the industry�s tide of red ink, already in evidence even before the Sept. 11 disaster. But airlines also must work harder than ever to stimulate demand and emphasize airline security, say Wharton faculty and aviation experts. An economic rebound would help.

Corporate Culture Can Break (or Make) a Merger

Wed, 26 Sep 2001 00:00:00 EST

Can one mega-company absorb another and still run things the way it used to? Should it even try? How large does corporate culture loom in the high-tech sector, or in any industry? Is there one type of culture that holds the key to success? Wharton faculty explore these questions and more as they look at the broader issues raised by executives intent on establishing the �right� culture for their organizations.

CEO Encores: When Leaders Return to Bail Out Their Companies

Wed, 15 Aug 2001 00:00:00 EST

Steve Jobs, Paul Allaire, Henry Schacht, Lawrence Bossidy, Kenneth Lay and Ted Waitt all, for one reason or another, left the top jobs at their companies only to return later when the companies ran into difficult times. Does it work to bring back former CEOs in such circumstances? What are the risks? And what does it say about the companies� boards?

When Leaders Return to Bail Out Their Companies

Wed, 15 Aug 2001 00:00:00 EST

Steve Jobs, Paul Allaire, Henry Schacht, Ted Waitt and Lawrence Bossidy all, for one reason or another, left the top jobs at their companies only to return later when the companies ran into difficult times. Does it work to bring back former CEOs in such circumstances? What are the risks? And what does it say about the board?

Starting a Business Today: Less Competition But Also Less Cash

Wed, 20 Jun 2001 00:00:00 EST

With new headlines every week confirming the poor health of the U.S. economy, one might wonder who in their right mind would pick the present time to launch a new company. Actually, say some Wharton faculty, the outlook isn�t all that bad if you choose the right business in the right market. Or, as one professor says: "Asking whether or not it�s a good time to start a business is like asking how big is a fish��

Do Layoffs Mean You Actually Lose Your Job?

Wed, 28 Mar 2001 00:00:00 EST

The unemployment rate announced last week for the month of March � 4.3% - was the highest in 20 months and the number of actual jobs lost � 86,000 - was the largest since November 1991. What�s behind the constant stream of layoff announcements, and is the employment picture as dire as media reports would have us believe?

How Online Recruiting Changes the Hiring Game

Thu, 22 Feb 2001 15:57:15 EST

Online recruiting is changing the way employers think about finding good employees and the way employees think about their jobs and their employers. Indeed, the Internet may completely change the way companies manage human resources, says Peter Cappelli, a professor of management at the Wharton School. But while the Internet makes it easy to find resumes of passive applicants � people who are happy with their current jobs but who might be induced to move to a better one � it also raises serious ethical questions about privacy.

Wharton Faculty Wish-list for George W. Bush

Wed, 17 Jan 2001 15:21:20 EST

There is little doubt that President-elect George W. Bush will have to hit the ground running once he is sworn into office on Jan. 20. A convergence of factors � ranging from leftover election rancor to a divided Congress to a newly sluggish economy - means Bush will have an unusually short honeymoon. Knowledge@Wharton asked Wharton faculty members to identify the most important issues � related to their own fields of expertise � that the new administration should address.

IT Workers: Found and Lost

Mon, 02 Oct 2000 19:38:53 EST

It is common for companies across America to complain about a shortage of information technology workers. The reality, however, is that there is no widespread lack of workers, but a shortfall in the ability of companies to recruit IT employees, to assess their talent and to make their jobs rewarding enough to keep them from quitting, claims a new Wharton study. The good news is that companies can do something about it.

United Airlines-U.S. Airways Merger: Turbulence Ahead?

Wed, 05 Jul 2000 14:32:15 EST

The proposed merger of United Airlines, the nation�s biggest carrier, with U.S. Airways, the sixth largest, would create a jumbo-jet of a company. It would handle 27% of U.S. airline passengers with a fleet of some 1,000 planes, serve 170 cities worldwide and fly in and out of eight major U.S. hubs. What are the chances that the government will approve such a deal? How about the pilots? And what can consumers expect with regard to cost, convenience and comfort? Knowledge@Wharton analyzes the flight path of this proposed merger.

Why Efforts to Implement High-Involvement Work Practices Fail

Wed, 13 Oct 1999 13:35:08 EST

Frits K. Pil, professor and research scientist at the University of Pittsburgh, and John Paul MacDuffie, professor of management at Wharton, explore the diffusion and use of best practice work systems in manufacturing in a new study. Despite clear evidence that high-involvement work practices and policies result in superior quality and productivity, the authors find tremendous variation in the use of such practices. Pil and MacDuffie examine why efforts to implement high-involvement work practices fail when the positive outcomes prove so compelling. The study appears in the book Employment Practices and Business Strategy edited by Peter Cappelli, director of the Center for Human Resources at Wharton.

The Umpire Strikes Back (And Out)

Thu, 19 Aug 1999 09:27:31 EST

You would think that employees whose profession requires them to make quick, emphatic decisions on the basis of extensive and arcane rules would have a leg up in a workplace dispute. But Major League Baseball umpires in the U.S.� those often colorful individuals responsible for calling strikes, balls and outs, among other rulings � have committed a string of negotiation blunders in their recent fight against baseball-team owners. Wharton's Peter Cappelli and G. Richard Shell analyze the umpires' mistakes and offer insights into lessons that managers can learn from them.

Welcome Aboard--For Now

Mon, 24 May 1999 16:58:08 EST

Time was when company employees were guaranteed a lifetime of secure jobs and increasing paychecks in exchange for loyalty and hard work. No more. A revolution is underway that brings market forces directly into the workplace. "The New Deal at Work," a new book by Peter Cappelli, director of Wharton's Center for Human Resources, examines these changes.