How Brand China Can Succeed

HARVARD BUSINESS SCHOOL—China has come a long way during the past decade. Its double digit economic growth rates—especially for a country of over a billion people—have been enviable. China has become factory to the world. The Chinese are rightly proud of their achievements and the 2008 Olympics promise to be China’s coming out party, much as the 1994 Barcelona Olympics helped Spain present itself to the world as a modern, up-and-coming member of the European Union.

However, a series of recent setbacks threaten China’s new and improving image. As a result, China looks like a country that loves the world’s markets but does not play by the world’s rules. China is hardly alone in these behaviors, but its size as the third largest economy in the world now commands attention—and the expectation of better behavior. Read article.

Best Way to Save: Analyze Why Talent Is Going Out the Door

THE WALL STREET JOURNAL—Few things trouble executives more than watching outstanding talent walk out the door. In burgeoning industries, such as technology, the most creative minds never lack for job offers. Turnover also is common after changes in the corner office or down the ranks, or when a company is acquired.

Even a small flight of out-of-the-box thinkers or managers who prompt the best work from employees can take considerable time and expense to replace. Some executives try to stop exiting high performers with offers of more pay or promotions. But others react defensively, telling themselves that whoever is leaving wasn’t a big loss. Read article.

How Economy Could Survive Oil At $100 a Barrel

THE WALL STREET JOURNAL—The world economy has managed, with some indigestion, to swallow the rise of oil prices past $80 a barrel. How well could it survive $100 a barrel?

The answer is quite well — so long as several conditions still hold true. The price rise would probably have to be gradual. Inflation couldn’t get so bad as to force big interest-rate hikes. Oil-rich nations would need to pump their profits back into U.S. and European economies.

All of this has happened so far. The happy confluence may continue, though fears remain strong that high energy prices will tip the U.S. into recession. Read article.

How to Profit from Scarcity

HARVARD BUSINESS SCHOOL—Marketers are trained to match supply to demand. Everything that consumers need should be available at the right time in the right place at the right price. Coca-Cola’s mantra always has been to be within an arm’s reach of desire. To be out of stock is to lose a sale or, worse, to lose a sale to a competitor.

But marketers also understand that, by using the illusion of scarcity, they can accelerate demand. This false scarcity encourages us to buy sooner and perhaps to buy more than normal. Read article.

Heiresses Get Down to Business

THE WALL STREET JOURNAL—A new generation of heiresses is redefining what it means to be a socialite. Rather than trying to climb the social ladder through charity work and elaborate parties, today’s rich and restless want to make their mark in the business world. They don’t want to be ladies of leisure; they want to be ladies of commerce, more interested in creating their own brands than making the A-list.

“I never got the whole socialite thing,” the daughter of Ralph Lauren, Dylan Lauren says. “I mean, what do they do? Sit around and have lunch, wear dainty clothes and go to balls? I’d go nuts. Maybe it’s just my personality. But being a socialite has no appeal.” Read article.

Business Schools Forgetting Missions?

THE WALL STREET JOURNAL—Business-school professors are masters at critiquing everyone else’s work. They pick apart Microsoft Corp.’s strategy; they rebuke Enron-era companies for ethics breakdowns. They are so busy gazing outward that it’s unthinkable for them to rip into their own institutions.

Now Rakesh Khurana, an associate professor at Harvard Business School, is about to break that taboo.

Next month, Prof. Khurana is publishing a critique of business schools’ evolution over the past 50 years. His book, “From Higher Aims to Hired Hands,” argues that famous B-schools, including Harvard, have lost track of their original mission to produce far-sighted leaders who can help the economy run better. Read article.

Does the latest financial crisis signal the end of a golden age of stable growth?

THE ECONOMIST—If economics were a children’s tale, a long period of rising incomes and improving living standards would always be followed by a big, bad recession. Rising unemployment, falling spending and contracting output—such is the inevitable reckoning for the good times of plentiful jobs and abundant earnings that went before. The hangover needs to be commensurate with the party. Read article.

Can’t Run, Can’t Hide: New Rules of Engagement for Crisis Management

KNOWLEDGE@WHARTON—The corporate apologies are piling up. Mattel CEO Robert Eckert apologized before a Senate subcommittee on September 12 for lead paint found in millions of the company’s toys. On September 14, TD Ameritrade CEO Joe Moglia apologized for a database breach that compromised customer addresses, phone numbers and email addresses. Apple CEO Steve Jobs apologized on September 6 for cutting the price of the high-end iPhone to $399 just weeks after die-hard customers waited in long lines to pay $599. Dell executives apologized in August on the company’s corporate blog for delayed deliveries of certain laptop and desktop models. And in February, JetBlue apologized for canceling 250 flights during an ice storm and leaving some passengers on the tarmac for as long as 11 hours.

The common thread linking these apologies: Executives were moving quickly to stem damage to their companies’ reputations. And while not all corporate crises are created equal, there is a playbook to handle these events, according to professors at Wharton. First, a corporate response should take hours, not days. It should include a well-thought out apology delivered through multiple mediums and it should feature some remediation so that the event won’t happen again. Read article.

Rebuilding Lego, Brick by Brick

STRATEGY+BUSINESS—Despite its extraordinary hold on the imagination of children around the world, the Billund, Denmark, company was in trouble. The Lego Group had lost money four out of the seven years from 1998 through 2004. Sales dropped 30 percent in 2003 and 10 percent more in 2004, when profit margins stood at –30 percent. Lego Group executives estimated that the company was destroying €250,000 ($337,000) in value every day.

How could such a seemingly successful toymaker lose that much money? Some observers speculated that the Lego Group had overdiversified its product line with moves into such areas as apparel and theme parks. Others blamed the exploding popularity of video games or pressure from low-cost producers in China. Read article.

Outsourcing Works So Well, India Is Exporting Jobs

THE NEW YORK TIMES—India is outsourcing outsourcing. One of the constants of the global economy has been companies moving their tasks — and jobs — to India. But rising wages and a stronger currency here, demands for workers who speak languages other than English, and competition from countries looking to emulate India’s success as a back office — including China, Morocco and Mexico — are challenging that model. Read article.

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