For our last issue of 2010, Knowledge at Wharton offers a roundup of the most popular stories from around the network this year. We will return on January 5 with a new lineup of articles.
Next year promises to be an exciting time for Knowledge at Wharton, as we prepare to launch a series of special reports plus a new high school edition, among other initiatives. In the meantime, we wish all of you a peaceful holiday season and a healthy and happy new year. See you in 2011!
Goldman Sachs and Abacus 2007-AC1: A Look Beyond the Numbers
Goldman Sachs is the Wall Street mega-firm whose money-making prowess leaves many impressed, envious or suspicious. Now the firm’s reputation is on the line, as it fights a fraud suit brought by the U.S. Securities and Exchange Commission over a single deal in 2007, the sale of a complex "synthetic collateralized debt obligation" called Abacus 2007-AC1. The deal lost investors $1 billion but produced $1 billion in profits for Goldman’s collaborator, Paulson & Company, a hedge fund betting the housing bubble would collapse. Experts at Wharton and elsewhere analyze the financial, legal and ethical issues raised by a case that has riveted both Wall Street and Main Street.
How Group Dynamics May Be Killing Innovation
To come up with the next iPad or Amazon, the pacesetters of the future need solitary brainstorming time, according to new Wharton research. In a paper titled, "Idea Generation and the Quality of the Best Idea," Wharton professors Christian Terwiesch and Karl Ulrich argue that group dynamics are the enemy of businesses trying to develop one-of-a-kind new products, unique ways to save money or distinctive marketing strategies.
Ranking Employees: Why Comparing Workers to Their Peers Can Often Backfire
What inspires an employee to work harder? More money, more often than not. But what about being benchmarked against peers, asks Wharton management professor Iwan Barankay in a new study titled, "Rankings and Social Tournaments: Evidence from a Field Experiment." With the help of a "crowd-sourcing" website, Barankay set out to discover not only whether workers are interested in how they rank against their peers, but also what happens to their performance if they find out how they placed. His conclusion may leave companies thinking twice about the best way to appraise staff performance.
Analyzing Effective Leaders: Why Extraverts Are Not Always the Most Successful Bosses
Conventional wisdom tells us that leaders are the men and women who stand up, speak out, give orders, make plans and are generally the most dominant, outgoing people in a group. But that is not always the case, according to new research on leadership and group dynamics from Wharton management professor Adam Grant and two colleagues, who challenge the assumption that the most effective leaders are extraverts.
Putting a Face to a Name: The Art of Motivating Employees
Could a simple five-minute interaction with another person dramatically increase your weekly productivity? In some employment environments, the answer is yes, according to Wharton management professor Adam Grant. Grant has devoted significant chunks of his professional career to examining what motivates workers in settings that range from call centers and mail-order pharmacies to swimming pool lifeguard squads. In all these situations, Grant says, employees who know how their work has a meaningful, positive impact on others are not just happier than those who don’t; they are vastly more productive, too.
How Much Should You Charge? Why ‘Smart Pricing’ Pays Off
Your company has developed a new product that you think will be a winner. A lot of money has been poured into research and development, analysis of the competition and advertising. But there is one key element you may have overlooked: What do you charge for the product? Wharton marketing professors Jagmohan Raju and John Zhang say companies frequently don’t put anywhere near as much thought into pricing as they should. In their new book, Smart Pricing, Raju and Zhang argue that firms ought to engage in innovative pricing to achieve maximum profitability, and they show how companies like Google are doing just that.
India Knowledge at Wharton
The Envelope, Please: From Eight Great Innovative Tools, Which Ones Are the Winners?
Ramping up customer satisfaction, maximizing the effectiveness of human capital and repairing supply chains were just a few of the ambitious aims of the ground-breaking "tools" entered in the Wipro-Knowledge at Wharton Innovation Tournament, whose final round of judging took place on March 23 in Philadelphia. Eight finalists, selected from among 120 entries, presented their concepts to a panel of judges during the event. We present the final eight and announce the three competitors who came out on top.
China Knowledge at Wharton
China’s Property Bubble: Can It Be Deflated Safely, or Will It Burst?
China is likely in the midst of a real estate bubble, according to faculty from Wharton and the Guanghua School of Management, who spoke during a joint symposium held at Peking University in Beijing on March 10. “Clearly, in China there are cautionary signs,” said Wharton real estate professor Susan M. Wachter, who also spoke about the fragility of the U.S. market and the need for a new regulatory approach. During his talk, Guanghua finance professor Xinzhong Xu noted, “The more difficult question that nobody can answer is: When is this bubble [in China] going to burst?”
Arabic Knowledge at Wharton
How Women Entrepreneurs Are Driving Business in the Middle East
Whether they are princesses, lawyers or executives, women in the Middle East and North Africa are building a strong presence for themselves as entrepreneurs. In countries such as Saudi Arabia, Egypt and Jordan, among others, they are creating new jobs for women and men in fields ranging from luxury goods to exports. Still, several cultural and legal challenges remain – according to experts from Wharton and elsewhere.
Universia Knowledge at Wharton
Spain in 2010: Will Unemployment Prolong the Economic Crisis?
Because it holds the presidency of the European Union for the first half of this year, Spain is at least nominally responsible for leading the trading bloc out of the current financial crisis. However, the economic situation in Spain is now worse than for many of its fellow members, and the outlook for 2010 is bleak. The country has become “the sick man of Europe” after six or seven consecutive quarters of negative growth and galloping unemployment that is practically double the European average. This, along with a high public deficit, will be among its biggest challenges for the New Year.
