Knowledge@wharton

For Oracle the past few months have been one big shopping spree. On January 31 the enterprise software giant purchased longtime rival Siebel Systems the leading provider of customer relationship management software. On February 14 it acquired Sleepycat an ”open source” database maker; two days later it bought HotSip AB a Swedish telecommunications software provider. For many companies Oracle’s month would have been a year’s worth of merger and acquisition activity but for the Redwood Shores Calif.-based firm it’s the norm. Oracle CEO Larry Ellison made a big splash in 2004 by announcing he would consolidate the software industry starting with archrival PeopleSoft and he has been true to his word. The real test however lies ahead: Can Oracle attract new customers? See acast.com/privacy for privacy and opt-out information.

During her first few months in office German Chancellor Angela Merkel has attained the kind of approval rating that politicians the world over dream about largely due to the way she has handled herself on international matters in visits to Washington Moscow and Brussels. But her main challenge is Germany’s economy Europe’s largest and the world’s third biggest. It is a challenge that has been staring German leaders in the face for a long time for a number of reasons: lackluster GDP growth over the last five years; a vast overburdened welfare state; an anemic service sector; stubborn protectionist sentiment and an aging population that will place greater strain on the nation’s budget in years to come. In whatever policies she proposes Merkel will have to tread softly to avoid alarming citizens and trade unions wary of change say scholars at Wharton and business schools in Europe. See acast.com/privacy for privacy and opt-out information.

What do images of a crew team geese flying in formation trees silly putty and a steering wheel have in common? They all are part of how undergraduate business students at Wharton depict and describe the essence of leadership. Since 2000 Wharton freshmen have been required to participate in Images of Leadership a project sponsored by Wharton’s undergraduate leadership program led by director Anne M. Greenhalgh and associate director Christopher I. Maxwell. In a recent report called Images of Leadership: The Story Emerging Leaders Tell Greenhalgh and Maxwell discuss the students’ responses -- and biases -- as expressed in both pictures and words. See acast.com/privacy for privacy and opt-out information.

When consumers have a bad shopping experience they are likely to spread the word not to the store manager or salesperson but to friends family and colleagues. Overall if 100 people have a bad experience a retailer stands to lose between 32 and 36 current or potential customers. These are some of the conclusions of The Retail Customer Dissatisfaction Study 2006 conducted by The Jay H. Baker Retailing Initiative at Wharton and The Verde Group a Toronto consulting firm in the weeks before and after Christmas 2005. The biggest source of consumer dissatisfaction? Parking lots. See acast.com/privacy for privacy and opt-out information.

Professional athletes face unusual challenges related to financial management especially since their peak earning period lasts a relatively short time often just a few years. Knowledge at Wharton asked Ken Shropshire professor of legal studies and business ethics and director of the Wharton sports business initiative to discuss this topic with Kailee Wong linebacker for the Houston Texans. Wong attended an executive education program at Wharton co-sponsored by the NFL and NFLPA. See acast.com/privacy for privacy and opt-out information.

Business leaders from two hot investment sectors -- real estate and energy -- discussed possible consolidation in their industries and other trends during two panels at the February 1 Wharton Economic Summit in New York City. The first panel entitled ”Real Estate: Where It’s at and Where It’s Headed. A Discussion with Three Legends ” included William Mack Sam Zell and Mortimer Zuckerman. The second panel ”The State of Energy Investing: What’s Fueling Consolidation? ” included a range of experts who debated the role of private equity and hedge funds in consolidation the rise of both global demand and global players the role of renewable energy and the possibility of a windfall profits tax on energy producers. See acast.com/privacy for privacy and opt-out information.

It took prosecutors just over four years to work their way up the Enron food chain but now the failed energy company’s top former executives Kenneth Lay and Jeffrey Skilling are facing a jury in a federal criminal fraud trial expected to last at least four months. How can each side best present a complex story that involves exotic derivatives products off-books accounting and strange subsidiaries with names like Raptor? Experts say they should apply lessons learned in the other high-profile corporate fraud cases of the Enron era: Keep it simple. See acast.com/privacy for privacy and opt-out information.

Cell phones that do email take photos and surf the web. Cars with options ranging from built-in satellite radio to rain-sensing wiper blades. While a seemingly endless variety of new products may delight consumers it makes inventory management as dicey as predicting what a teenager will want for her birthday next year. The problem say Wharton professor Serguei Netessine and Wharton doctoral student Serguei Roumiantsev is that no one knows how to measure the quality of supply chain management using companies’ publicly available financial data. In a recent paper entitled ”Should Inventory Policy Be Lean or Responsive? Evidence for U.S. Public Companies ” the two researchers provide ”a statistical methodology that links managerial decisions related to inventory with accounting returns.” See acast.com/privacy for privacy and opt-out information.

The emergence of China and India figured prominently at the World Economic Forum annual meeting in Davos last month. In India’s case however another factor also was at work. Determined not to be overshadowed Indian business and government leaders spent some two years and $4 million planning an elaborate branding campaign to ensure that the ”India story” got prominent play and did not get lost amid the chatter at Davos. How does a country go about building its brand though such PR campaigns? And how can outcomes be measured to see if the campaign worked? Wharton professors who were at Davos and Indian business and government leaders say that while India’s campaign at the summit was impressive the country will now have to walk the talk on infrastructure investments and policy reforms if it wants to retain its credibility. See acast.com/privacy for privacy and opt-out information.

Since announcing on October 6 2004 that it had signed Howard Stern to a five-year deal Sirius Satellite Radio has added approximately 2.7 million subscribers and become a household name in the satellite radio world. The tab: Close to $700 million. Is Stern worth it? Can the popular and raunchy talk show host catapult Sirius ahead of rival XM Satellite Radio or are there other issues to consider such as the threat of new technologies the need to provide good content and the continuing popularity of conventional radio? Wharton faculty and others debate the different strategies of Sirius and XM and the challenges that both face. See acast.com/privacy for privacy and opt-out information.

Carl Icahn’s battle for Time Warner has just intensified. Icahn the corporate takeover specialist attempting to win control of the media giant held a press conference yesterday to announce a plan to break Time Warner into four separate companies and buy back $20 billion in stock -- all part of his crusade to oust management for the benefit of shareholders. His press conference followed a speech last week at the 2006 Wharton Economic Summit in which he denied that he is an ”imperial shareholder” out to rip companies apart for quick gains. Icahn was responding to remarks made earlier at the Summit by corporate lawyer Martin Lipton who argued that a new breed of aggressive shareholder is pressuring companies to produce short-term gains at the expense of long-term growth. See acast.com/privacy for privacy and opt-out information.

The disclosure that author James Frey lied in his best-selling book A Million Little Pieces and the furor that followed raise numerous questions about truth in advertising trust between sellers and buyers brand image and reputation as well as two themes that Frey himself focused on in his now-discredited memoir of recovery from substance abuse -- suffering and redemption. How widespread is deception when is stretching the truth acceptable how jaded are consumers towards the claims made by advertisers and how credible was Oprah’s response to the Frey incident? Wharton experts offer their views on truth and fiction. See acast.com/privacy for privacy and opt-out information.

At the annual meeting of the World Economic Forum in Davos last month the extraordinary optimism of Asian -- especially Chinese and Indian -- leaders held center stage. For Michael Useem director of Wharton’s Center for Leadership and Change it all felt very déjà vu: In the late 1990s a similarly exuberant spirit surrounded American business leaders. But the hubris of unbounded optimism can be dangerous warns Useem who spoke in three Forum sessions. See acast.com/privacy for privacy and opt-out information.

Apple’s iPod again ruled beneath the Christmas tree in 2005 after the latest model of the iconic music player was outfitted with a video screen. And as the new year begins a long-anticipated era of convergence in consumer technology products draws closer according to Wharton faculty and technology analysts. Meanwhile cell phones that play video e-mail delivered to handheld computers telephone conversations over the PC -- and hundreds of other glimpses into Christmas future -- were on display at the annual Consumer Electronics Show in Las Vegas last week where the stepped-up presence of digital giants including Microsoft Google Yahoo and Intel signaled their ever-increasing interest in expanding from the office into consumers’ living rooms. See acast.com/privacy for privacy and opt-out information.

Compensation for American CEOs has soared over the past decade far exceeding inflation and wage gains of ordinary workers -- and leading critics to charge that self-serving insiders have tilted the playing field at shareholders’ expense. In response the Securities and Exchange Commission on January 17 took the first step toward adopting rules to better show shareholders how much their top executives and directors are paid. Will that drive executive pay down? Probably not say several Wharton professors arguing that executive pay is not necessarily as excessive as the most extreme cases suggest. Still they agree that more complete disclosure would improve the system. As one expert puts it: ”When people are forced to undress in public they pay attention to their figures.” See acast.com/privacy for privacy and opt-out information.

Walt Disney announced yesterday that it is acquiring Pixar the animated film studio that has made such hits as The Incredibles Finding Nemo and Toy Story. As part of the $7.4 billion deal Pixar’s founder Steve Jobs will become a Disney board member and also its biggest shareholder. In an audio-only interview Wharton marketing professor Peter Fader speaks with Mukul Pandya editor-in-chief of Knowledge at Wharton and Robbie Shell editorial director about the implications of this deal not just for the two companies involved but for the whole media and entertainment industry. See acast.com/privacy for privacy and opt-out information.

Would you like to go on an Internet auction site and know how much to bid for a certain item -- and also know that you didn’t overpay for that item? How about when you sell an item in an online auction: Would you like to know what price to set that ensures you don’t leave money on the online table? Wharton marketing and statistics professor Eric T. Bradlow can’t provide specific answers. But he does offer guidance on the behavior of potential buyers in a new study entitled ”An Integrated Model for Bidding Behavior in Internet Auctions: Whether Who When and How Much ” recently published in the Journal of Marketing Research. Bradlow co-authored the study with Cornell marketing professor Young-Hoon Park. ”To the best of our knowledge this is the first attempt to model formally the behavioral aspects of bidding behavior for the entire sequence of bids in Internet auctions ” the authors write. See acast.com/privacy for privacy and opt-out information.

When the door to a TLA Entertainment video store swings open the primary question facing most consumers shuffling inside is relatively simple: ”What movie will I take home tonight?” But to Wharton marketing professor Jehoshua Eliashberg and Wharton doctoral candidate George Knox the key question surrounding the burgeoning $12 billion home-video market goes at least one step further: Which consumers will rent their movie of choice tonight and which consumers will buy? In a study entitled ”The Consumer’s Rent vs. Buy Decision: The Case of Home-Video ” Eliashberg and Knox present a new model that they say accurately predicts the consumer’s decision to rent or buy a particular movie at a video store. See acast.com/privacy for privacy and opt-out information.

Although it has one of the most dynamic economies in Africa Botswana also has one of the world’s highest known rates of HIV-AIDS infection. In response the Botswana government along with the Medical School of the University of Pennsylvania and Wharton’s Sol C. Snider Entrepreneurial Research Center is helping develop a more efficient system to manage and monitor HIV/AIDS therapy. According to Ian C. MacMillan director of the Snider Center and James D. Thompson associate director of Wharton Entrepreneurial Programs the Botswana project illustrates a new concept called ”Societal Wealth Creation via Experimental Entrepreneurship.” By working to develop societal wealth enterprises in places like Africa MacMillan and Thompson hope to sidestep two obstacles that often plague business development around social problems -- low profitability and lack of seed funding. See acast.com/privacy for privacy and opt-out information.

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. See acast.com/privacy for privacy and opt-out information.