Knowledge at Wharton

Faced with the possibility of a global currency war Western countries are increasing their scrutiny of China’s currency policies accusing Beijing of intervening in the markets to keep China’s currency weaker than it would be otherwise. In the U.S. politicians and regulators say such tactics undermine efforts to boost exports and thus take away jobs from American workers. But the controversy is more complicated than that and touches on policies and attitudes that go back decades. Knowledge at Wharton spoke with Wharton professors Franklin Allen and Mauro Guillen about what is at stake and why this particular conflict is so difficult to resolve. Hosted on Acast. See acast.com/privacy for more information.

As the world haltingly recovers from the recession regulators are struggling to modify the financial system to prevent another crisis. The latest effort: stricter capital requirements to help prevent large banks from collapsing under the weight of unexpected losses. While the new proposals -- called Basel III -- are designed to reduce risk-taking by assuring that banks continue lending in a weak economy Wharton faculty and others are skeptical that the new proposals will accomplish this goal. Hosted on Acast. See acast.com/privacy for more information.

After losing equity in their homes and stock portfolios Americans are now scrambling to make up lost savings by moving money into bonds and a host of other investments once considered either risky or unattractive. Although the dramatic shift in investment behavior is unlikely to have a long-term impact on the economy analysts warn that the new strategies could have a profound effect on individual investors themselves. Wharton faculty weigh in on the potential upsides and downsides that consumers face as they move into new investment categories. Hosted on Acast. See acast.com/privacy for more information.

AT&T and Verizon are about to throw the dice in a bet that will put billions of dollars on the line. The companies the two largest mobile phone operators in the United States are expected to launch a pilot program to see whether their customers are ready to trade credit cards for smartphones equipped with similar swipe technology for making purchases. But will Americans want to put aside their comfortable relationship with plastic credit cards? And can they overcome security concerns about adopting a new payment system? Industry experts weigh in. Hosted on Acast. See acast.com/privacy for more information.

The collapse in home prices during the past few years is a reminder of the horrors of deflation. Millions of homeowners owe lenders more than their homes are worth making it impossible to sell trade up downsize or move for a new job. What would happen if deflation were to spread across the entire economy driving down wages and the prices of all goods and services? Hosted on Acast. See acast.com/privacy for more information.

A board’s primary fiduciary responsibility is to ensure that a CEO is generating profits for shareholders but Mark Hurd’s abrupt departure from the top job at Hewlett-Packard underscores how boards of directors do not judge a CEO’s performance on company prosperity alone. Rather boards use a broad set of intangible criteria -- ranging from how well leaders are able to earn employees’ trust to how well they deal with customers to how they conduct themselves off site -- as a way of evaluating success or failure. But these standards experts say can be extraordinarily difficult for boards to assess. Hosted on Acast. See acast.com/privacy for more information.

It has been a battle of the balance sheets as rivals Dell and Hewlett-Packard continue to wrangle over who will win the right to acquire 3PAR a little known data storage company. While the 3PAR bidding war which HP is expected to win is part of Dell’s ongoing ambition to get a bigger foothold in high-margin enterprise technology services the $53 billion company has also been chasing consumers with lackluster products. As one expert asks: ”Dell sees the need for diversification but does it see the need for transformation?” Hosted on Acast. See acast.com/privacy for more information.

When Roche Holding acquired full ownership of Genentech last year the $46.8 billion deal was the culmination of a more than 20-year relationship between the Swiss pharmaceutical giant and the Silicon Valley biotechnology company. In a recent presentation at Wharton San Francisco Steve Krognes -- a former Roche executive who is now senior vice president and CFO of Genentech -- talked about the pharma company’s decision to pursue the merger efforts to raise capital amid the beginnings of the 2008 recession and the aftermath of the deal. Hosted on Acast. See acast.com/privacy for more information.

Despite being pilloried by the public lately a banker’s lot can’t be all that bad. At least that’s what Wal-Mart executives must be thinking. Over recent months there has been a flurry of announcements from the world’s largest retailer about the expanding array of banking products sold at its U.S. stores. Company officials insist that their main aim is to reach the ”unbanked” and ”underbanked” with the type of low-cost services that cemented Wal-Mart’s reputation as a retail giant. So do traditional retail banks on Main Street USA have reason to worry? Hosted on Acast. See acast.com/privacy for more information.

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. Hosted on Acast. See acast.com/privacy for more information.