Knowledge@wharton

When Leonard Abess sold a majority stake in Miami-based City National Bank last fall he did something very unusual. He took $60 million of that money and gave it out as bonuses to 399 current bank employees and 72 former employees. He did it without calling in a public relations firm or the media. He didn’t blog about it. And while he was mentioned in President Obama’s inauguration speech and was ABC News Person of the Week these things were not done at his instigation. In fact he wasn’t even on site when the money was given out. He decided to share the wealth he said as a way to reward the people who had helped make the bank successful. Knowledge at Wharton asked Leonard Abess who remains chairman and CEO of the bank to talk about the motivation behind his gift leadership and the current economic crisis. See acast.com/privacy for privacy and opt-out information.

The world of private equity has been in a shambles since the onset of the financial crisis but some executives see that as an opportunity rather than a threat. Among them is David N. Roberts senior managing director of Angelo Gordon who manages the firm’s private equity business. A 16-year veteran of the firm Roberts also founded the firm’s opportunistic real estate area. During a visit to campus recently Roberts pointed out that while the government’s stimulus programs have not yet had a widespread impact some opportunities are starting to open up that could ease the credit crunch. See acast.com/privacy for privacy and opt-out information.

Even the biggest tax hikes will not raise enough money to pay off the national debt or meet coming obligations to retiring baby boomers for Medicare and Social Security. To accomplish the latter politicians must do something they fear even more than raising taxes: Reduce Medicare and Social Security benefits. In an interview with Knowledge at Wharton insurance and risk management professor Kent Smetters discussed the impending crisis. See acast.com/privacy for privacy and opt-out information.

Perception matters so don’t bring a politician to a union rally in a Datsun. This was one of the lessons Harris Diamond learned during a career that started with selling peanuts in Yankee Stadium. Now CEO of public relations firm Weber Shandwick Worldwide Diamond shared his thoughts on leadership -- and luck -- during a recent Wharton Leadership Lecture. See acast.com/privacy for privacy and opt-out information.

Emotion not only helped lead America into the current economic crisis but may also be helping to keep it there. At a recent conference called ”Crisis of Confidence: The Recession and the Economy of Fear ” sponsored by the University of Pennsylvania’s Department of Psychiatry and the Psychoanalytic Center of Philadelphia an interdisciplinary panel explored the psychology behind today’s economy. See acast.com/privacy for privacy and opt-out information.

The world may be buzzing about Twitter but will the San Francisco-based messaging service with the high cool factor ever be a money maker? Or will it operate at a perpetual loss as one Wall Street analyst suggested ”until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more.” See acast.com/privacy for privacy and opt-out information.

Wharton legal studies and business ethics professor Kevin Werbach recently worked with the Obama administration’s transition team on a review of the Federal Communications Commission and related technology and telecommunications issues. In an interview with Knowledge at Wharton he says that advances in technology and the urgent need to restart the economy require the commission to rethink its role -- not just as a regulator but as an agency that creates jobs and encourages investment. See acast.com/privacy for privacy and opt-out information.

On April 2 the Financial Accounting Standards Board is expected to vote on a proposal to relax a standard at the heart of the financial crisis -- mark-to-market accounting rules that require toxic assets to be carried on companies’ books at fire-sale prices based on recent trades of similar assets for far less than they would command in normal times. Many big banks say the crisis has been made worse by these rules. Not everyone agrees.   See acast.com/privacy for privacy and opt-out information.

While military uses have tended to dominate commercial development of autonomous robots in America the business opportunities for smart robots are also sizable according to Daniel Lee an engineering professor at the University of Pennsylvania. Lee who recently spoke about the future of robotics as part of the Executive Master’s in Technology Management program has an ambitious goal: to learn how to make robots think and act like humans. See acast.com/privacy for privacy and opt-out information.

”Cloud computing” promises myriad benefits -- including cost savings on technology infrastructure and faster software upgrades -- for users ranging from small startups to large corporations. That’s an auspicious future considering that not everyone agrees on exactly what cloud computing is or what it can do. See acast.com/privacy for privacy and opt-out information.

U.S. stocks raised eyebrows this week and last closing higher in six of seven trading days including four in a row from March 10 to 13. But how does the market look for the longer term? In an interview with Knowledge at Wharton Wharton finance professor Jeremy J. Siegel says he was pleased to see consecutive gains after so many declines. He adds that history provides lots of evidence that stocks remain good long-term investments especially when they are down 50% from their peak. See acast.com/privacy for privacy and opt-out information.

Heartland Payment Systems a credit card processor may have had up to 100 million records exposed to malicious hackers. Payment processors CheckFree and RBS Worldpay and employment site Monster.com have all reported data breaches in recent months as have universities and government agencies. Experts at Wharton say that personal data is increasingly a liability for companies and suggest that part of the solution may be minimizing the customer information these companies keep. See acast.com/privacy for privacy and opt-out information.

The hedge fund industry’s long history of avoiding tougher regulation may be coming to an end as the Obama administration and Congress look for ways to avoid another financial meltdown. Although it is not clear that hedge funds actually played much of a role in the current crisis the industry’s sagging performance combined with investors’ and regulators’ heightened demand for transparency will likely cause big changes in the way these secretive investment pools operate according to several Wharton faculty members. See acast.com/privacy for privacy and opt-out information.

The world financial crisis is unraveling the gains made by many Central and Eastern European economies during their post-Cold War resurgence. With the region no longer isolated an economic collapse could reverberate in the West as Central and Eastern European borrowers default on an enormous volume of loans that Western banks were all too eager to grant just a few years ago. See acast.com/privacy for privacy and opt-out information.

Getting customers to spread the word about a new product through their social or professional networks is a hot strategy in the marketing world. But how do companies find the right individuals to deliver the message? New research by Wharton marketing professors Raghuram Iyengar and Christophe Van den Bulte finds that traditional targets may not be so influential. See acast.com/privacy for privacy and opt-out information.

Giving products away -- think Adobe Reader or access to online news -- has become a legitimate business model on the Internet and even beyond. Once companies accept that price need not be tied to the cost of production and begin thinking creatively new possibilities emerge -- even for offline products according to Wharton faculty and others. Welcome to the world of ”freeconomics.” See acast.com/privacy for privacy and opt-out information.

When governments around the world spend vast sums to stimulate their economies it seems only reasonable for each to invest at home. Why should the American taxpayer pay for steel from Canada when U.S. steelmakers are struggling? So it was hardly a surprise that the $787 billion stimulus plan just signed by President Barack Obama included protectionist language. But economists and political leaders in the U.S. Europe and elsewhere worry that such sentiments threaten free-trade principles that are crucial to any global economic recovery. See acast.com/privacy for privacy and opt-out information.

Despite evidence that ambitious goal setting can hurt productivity damage a company’s reputation and violate ethical standards its use has become endemic in American business practice and scholarship even spilling over to the debate on how to improve America’s public schools. A new paper by Wharton operations and information management professor Maurice E. Schweitzer and three co-authors documents the hazards of corporate goal setting and concludes that it is overprescribed. See acast.com/privacy for privacy and opt-out information.

Attention Shoppers: We no longer have the following items -- ”a sense of entitlement ” ”conspicuous consumption” and ”a golden period of luxury.” At least that is the word from Wharton faculty and other experts who point to a new logic that is defining not just what U.S. consumers buy but how they view the shopping experience. See acast.com/privacy for privacy and opt-out information.

Nine months ago a group of Wharton students launched an online site called Givology.org whose purpose is to raise money for scholarships and education projects in the developing world. Givology’s vision according to chief development officer Catherine Gao is that of a global community of individuals connected through their belief in the power of education to change people’s lives. The group which so far has attracted more than 200 lenders has partnerships in China India Uganda Ecuador and Kenya. Gao and Maria Davydenko the site’s chief creative director spoke with Knowledge at Wharton about Givology and why they each donate more than 10 hours a week to this project. See acast.com/privacy for privacy and opt-out information.