Witold Henisz - Faculty Research in Knowledge@Wharton

Ebb without Flow: Water May Be the New Oil in a Thirsty Global Economy

Wed, 01 Oct 2008 17:54:21 EST

Is water the new oil? The answer is yes, according to a number of economists, business leaders, scientists and geopolitical strategists, who argue that it's time to stop taking for granted the substance that covers 70% of the planet and makes up a similar proportion of the human body. Just as the late 20^th century saw an oil shock, the early 21^st century may feature a water shock, where scarcity leads to a sharp price hike on a resource that has always been plentiful and cheap. Such a scenario could have an even bigger impact than peak oil, transforming markets, governments and ecosystems alike.

Political Tensions Are Creating New Rules for International Business

Mon, 22 Sep 2008 16:32:59 EST

Emerging economies still promise opportunity but also political risk for international businesses. Growing income disparity in rapidly developing economies, geopolitical tensions and anti-U.S. attitudes are among the broader political trends that could shape global business in the future, according to Wharton faculty. "Increasingly, politics will intervene and political management skills will be valuable for multinationals," says Wharton management professor Witold Henisz.

The Race for Energy: What Will It Mean for Western Firms?

Mon, 22 Sep 2008 16:33:05 EST

Rising energy demand from China and India has unleashed a worldwide race to secure access to scarce fossil fuel resources, a more difficult proposition with the emergence of national oil companies in the resource-owning countries. While Western companies will likely feel the pain of increasing energy costs, there is a potential upside to global energy scarcity, according to experts from Wharton and The Boston Consulting Group: Renewable and nuclear energy present huge opportunities for investors and entrepreneurs.

What's Behind the Flare-ups in Oil Prices? Jeremy Siegel and Witold Henisz Weigh In

Wed, 28 May 2008 14:40:09 EST

Memorial Day, which marks the beginning of the summer driving season in the U.S., saw gas prices at nearly $4 a gallon all over the country -- and even higher in states such as Florida. Globally, the picture looks more worrisome: Oil prices crossed a record $135 a barrel during the weekend of May 24-25, although by Tuesday prices had come down to $131. What's behind these regular flare-ups in oil prices? What are the major economic and geopolitical factors at work? How does expensive oil affect the U.S. and world markets, and what can we expect over the coming months? Knowledge@Wharton discussed these questions and more with finance professor Jeremy Siegel, author of The Future for Investors, and management professor Witold Henisz.

Navigating Olympic Sponsorship: Marketing Your Brand without Alienating the World

Wed, 16 Apr 2008 16:43:25 EST

Images of Chinese guards and local police protecting the Olympic torch on its journey to Beijing were hardly the kind of publicity the IOC or the Chinese government were hoping for. Nor can the 12 "Worldwide Olympic Sponsors" be thrilled at the latest images of hand-to-hand street fighting. How can sponsors make the August Olympics a brand builder for their products rather than a public relations nightmare for their companies? Wharton professors suggest they figure out a way to reap the benefits of associating with the event while maintaining reputations for corporate social responsibility outside China.

When Are Emerging Markets No Longer 'Emerging'?

Wed, 05 Mar 2008 15:48:59 EST

The term "emerging markets" is now more than 25 years old and has come to define wide swaths of the world undergoing rapid economic change. Dozens of countries fall under the label even though they are evolving at their own pace and with their own twists on economic development. Now, as many emerging markets show signs of a strong and growing middle-class population, observers wonder whether the term has lost some of its meaning. What qualifies a country as "emerging"? While some say measures based on income or other statistics are critical factors, others place an increasing emphasis on the way business is conducted, with rules that are transparent and apply equally to all participants.

View from Dalian, China: The New Risk Architecture and Our Growing Interdependence

Wed, 12 Dec 2007 14:47:44 EST

In early September, nearly 1,700 leaders representing business, politics, the arts and universities gathered in the city of Dalian, 600 miles east of Beijing. Erwann Michel-Kerjan, managing director of the Wharton Risk Management and Decision Processes Center, who was selected as one of the World Economic Forum's Young Global Leaders this year, attended the five-day event, which included participants from 90 countries. He offers his report on what he calls "The New Risk Architecture."

In Oil Producers' Brave New World, a Key Word Is 'Partnerships'

Wed, 02 May 2007 09:59:26 EST

In Venezuela, President Hugo Chavez is threatening to take control of several major projects from American and European firms. In Russia, the government recently strong-armed Royal Dutch Shell into relinquishing control of a large oil field. Across the oil-producing world, governments are responding to higher petroleum prices by imposing new taxes on oil companies and forcing the renegotiation of contracts. According to speakers at the 2007 Wharton Economic Summit, such developments augur a new age for oil producers, where both the style and substance of doing business have changed.

Russia: 'Floating on an Enormous Pool of Petrodollars'

Tue, 24 Apr 2007 15:36:32 EST

No one disputes that oil has fueled Russia's return to international prominence. The country has the world's second biggest oil reserves, behind Saudi Arabia, and its largest natural gas reserves. Each uptick in the price pumps billions of additional dollars into the Russian economy. The problem is, however, that oil-rich nations seldom transform their resource endowments into innovative market systems or branch out into other industries. Indeed, "petrostates" usually don't take steps to prepare for the day when their wells run dry. Will Russia be any different? Experts weigh in.

Continuing Turmoil in the Power Industry: What It Means for the Major Players

Wed, 22 Mar 2006 15:54:43 EST

Five years ago this winter, California's wholesale power market imploded. Power prices soared. California residents endured weeks of rolling blackouts. Two California utilities were forced into bankruptcy even as their suppliers -- independent power companies -- reaped huge windfalls. Five years later, the tables have turned. Formerly bankrupt California utilities are profitable while formerly robust power generators scramble to survive. What happened? Wharton faculty and others look at the industry's unique challenges and suggest structural and management strategies that could improve its chances for sustainable growth.

The Populist Left in Latin America: Threat or Opportunity for Investors?

Tue, 07 Mar 2006 08:42:15 EST

Bolivians recently elected Evo Morales, formerly the leftist leader of the country's coca growers, as their new president. Leftist or populist parties are also in power in Brazil, Argentina, and Venezuela, and have flexed their muscle in Ecuador, Guatemala and Peru. The upcoming election in Mexico could also bring the leftist PRD to power. During a panel discussion at the recent Wharton Latin American conference, Wharton management professor Witold Henisz asked a provocative question to four conference panelists: Is the democratic revival of the populist left a hallmark of consolidation of democracy or a potentially dangerous trend that will return Latin America to the lost decades? Should it be viewed as a threat or an opportunity by international investors?

Are Failed Infrastructure Projects Linked to the Presence of the IMF or World Bank? Read on ...

Wed, 07 Sep 2005 15:24:58 EST

When Wharton management professor Witold Henisz was studying the problems that Western investors have financing infrastructure projects in developing countries, one common denominator made him curious: The involvement of the International Monetary Fund or the World Bank. So Henisz and several colleagues combed through three decades of market reform and industry decentralization projects in dozens of countries, looking for a link between failed or troubled reform efforts and the presence of the IMF or World Bank. They found one. Working on two separate papers, the researchers conclude that the IMF and World Bank do indeed play a significant role in these areas �- but often in a negative way. "If you see the IMF and World Bank influencing reforms in a country...," says Henisz, "It's not a seal of approval. It's a warning flag."

An End to Global Textile Quotas: Watch China Sew Up the Market

Wed, 09 Feb 2005 16:50:03 EST

On Jan. 1, the Multifiber Agreement -- which for 30 years let nations place quotas on the amount of textile and clothing imports allowed into their countries -- expired for members of the World Trade Organization, the multilateral global trade body. The elimination of global textile quotas is expected to drive garment production to China, benefiting consumers in North America and Europe at the expense of developing nations where apparel manufacturing has become a bridge to an industrial economy, according to Wharton faculty and other analysts.

Do Governments Favor Foreign Firms over Domestic Ones?

Wed, 21 Apr 2004 14:29:08 EST

The long-held belief that governments favor their own country’s firms over outsiders may not hold up in today’s global business environment. Indeed, governments may actually favor foreign companies, particularly over politically weak domestic firms, according to preliminary research presented by Yasheng Huang, professor of international management at MIT’s Sloan School of Management, during a Wharton conference on Management Strategy and the Business Environment. In general, he said, the foreign privilege phenomenon seems to be more pronounced in Latin America and Eastern and Central Europe, although it exists in East Asia as well.

Collapse in Cancun: The World Trade Agenda Gets Sidetracked

Wed, 24 Sep 2003 00:00:00 EST

If you took delegates from 146 countries � ranging from the poorest agricultural regions in Africa to the most affluent nations of Europe � and asked them to negotiate a trade agreement that would satisfy everyone, what are the chances they would succeed? Very slim, as the collapse of the world trade talks in Cancun earlier this month proved. Huge fault lines appeared between two general camps: The developing countries, who contended that the richer nations� agricultural subsidies are an unfair trading advantage, and the more advanced nations who sought new global rules that would help protect their economic interests. So what happened and where do we go from here?

Lights Out: Lessons from The Blackout

Wed, 27 Aug 2003 00:00:00 EST

Investigators probing the Aug. 14 blackout that thawed freezers, disabled air conditioners and paralyzed transportation for millions in the Northeast and Midwest states of the U.S. and Canada are weeks away from identifying the causes. But rather than waiting for the results, politicians and pundits of all stripes have seized on the incident to promote agendas they had staked out long before the lights went out. One thing is clear, however. Like the California power crisis and the Enron scandal, the blackout was another blow to state and federal efforts to introduce competition to the power industry.

Business Implications of the U.S.-Europe Rift

Sun, 09 Feb 2003 00:00:00 EST

The diplomatic rift over war with Iraq has reverberated throughout the United States, the United Kingdom, France, Germany and the rest of what only recently has come to be known as Old and New Europe. But more is at stake than politics and diplomacy. At issue, too, are business and trade relations between the United States and Europe, according to faculty members at Wharton and INSEAD, the French business school. The impact of the Iraq issue on commerce, they note, may be serious as ordinary consumers and corporate strategic planners alike begin to make decisions based on the friction that has affected the worldwide political climate.

The Outlook for Oil: What Lies Ahead?

Wed, 29 Jan 2003 00:00:00 EST

Surging oil prices are squeezing U.S. corporate profits, contributing to bankruptcies and forcing some companies, especially in the oil-dependent trucking industry, out of business altogether. With the threat of war in Iraq and a drastic cut in supply from strike-bound Venezuela, companies are braced for further increases soon. Knowledge@Wharton looks at what to expect in the coming months.

Abuse of Power: How Manipulative Trading Undermined Energy Deregulation

Wed, 05 Jun 2002 00:00:00 EST

Federal regulators� release of memos last month outlining how Enron�s traders profiteered from loopholes in California�s energy market, along with disclosures by six energy trading companies that they had inflated trading volumes with fictitious trades, have set off a new round of recriminations and Congressional hearings. Experts at Wharton believe that these revelations, coupled with the evaporation of promised savings for retail consumers in other parts of the U.S., undermine the case for replacing traditional utility regulation.

Heated Debates Over Energy Issues

Wed, 23 May 2001 00:00:00 EST

Little doubt exists that an energy-supply crisis looms in the U.S. But does the new energy policy presented on May 17 by the Bush Administration�s National Energy Policy Development Group represent the right response? Faculty members at Emory University and its Goizueta Business School as well as the Wharton School of the University of Pennsylvania present perspectives on a debate that is generating lots of heat � and, hopefully, some light.

How a Run of Bad Luck and Bad Laws Helped Ignite California�s Electricity Crisis

Wed, 31 Jan 2001 16:23:44 EST

California�s woes keep mounting. Now, on top of earthquakes, mudslides, grassfires and drought, there is the extraordinary electricity crisis. Prices have soared, shortages have taken parts of the state to the brink of blackouts, politicians are brawling and several major utilities are near bankruptcy. Knowledge@Wharton offers an analysis of what went wrong and how other states can avoid California�s mistakes.