The State of Corporate Philanthropy

MCKINSEY QUARTERLY — Corporate philanthropy can be an effective tool for companies that are trying to meet consumers’ rising expectations of the role businesses should play in society, say respondents to a McKinsey global survey. The survey also suggests, however, that companies aren’t using that tool as well as they could. Executives doubt that their philanthropy programs fully meet their social goals or stakeholders’ expectations for them. Read article.

Unconventional Decisions Pay Off

KNOWLEDGE @ WHARTON — Doug Lattner says his first rule of business leadership is “know yourself.” The CEO of fast-growing Deloitte Consulting applied that lesson to his own firm when he assumed the reins of the New York-based unit in 2003.

At the time, Deloitte Consulting, which offered expertise in such areas as strategy, technology and human resources, was serving more than 42 types of client groups. Lattner and his team grew the overall business even as they slashed that number by more than half, serving just 19 segments. “I said, ‘We’re not going to be all things to all people,’” Lattner stated during a recent Wharton Leadership Lecture. “We’re not going to out-Accenture Accenture, we’re not going to out-IBM IBM, and we’re not going to out-McKinsey McKinsey. We’re going to be very good at what we do.” Read article.

In the Game of Business, Playing Fair Can Lead to Greater Profits

KNOWLEDGE @ WHARTON — Tune into “The Apprentice,” and you get an all-too-common view of business. Every week, all of the wannabe moguls try to impress Donald Trump by preening, cajoling and conniving. In this world, toughness is the measure of every CEO, and the boss glories in firing people and squeezing every penny out of suppliers.

Yet according to John Zhang and Jagmohan Raju, both Wharton marketing professors, and Tony Haitao Cui, a University of Minnesota marketing and logistics professor, many people aren’t purely mercenary in their business dealings. They care about fairness — and they should, the researchers say, because doing so can maximize their profits. Read article.

AOL is Open to Deal

THE NEW YORK TIMES— AOL, the company that introduced millions of people to the Internet, has tried to reinvent itself many times. The latest effort, like those before it, does not seem to be going well.

On Tuesday, Jeffrey L. Bewkes, the chief executive of Time Warner, AOL’s parent company, acknowledged weakness in the business and said he was open to combining AOL with another company — “whatever configuration makes it the strongest and the most valuable.”

But he may have been soft-pedaling what seems to be an increasingly troublesome situation at AOL, which has bet its future on a new strategy of selling advertising across the Internet and has spent more than $1 billion on related acquisitions. Read article.

Implementing the Plan

DESIGNINTELLIGENCE— All is not strategy. At some point in the life of a strategic plan, intentions must take wing, transforming word to deed.

Writing in the January/February issue of DesignIntelligence, Pearson Architects founder Melinda Pearson examines the process and tools of strategic plan implementation. She notes that before a plan can be fully realized, four supporting factors are necessary: marketing, operations, finance, and professional services. Lacking one or more of these elements, a firm’s performance will be marginalized.

Involve every employee in the implementation process, coaches Pearson. “Having the right staff in the right position with the right training is the fundamental key to successful implementation. If you do nothing else, this alone will keep your organization alive,” she notes. Read article.

Free! Why $0.00 Is the Future of Business

WIRED— The idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411. Read article.

Microsoft and Yahoo: Does It Make Sense

KNOWLEDGE @ WHARTON— On Friday, February 1, Microsoft announced it was making an unsolicited bid to acquire Yahoo for $44.6 billion in cash and stock, a 62% premium over Yahoo’s stock price at the time. If the deal is completed, it would be the largest acquisition in Microsoft’s history and, the company hopes, would jumpstart its struggling Internet search and advertising businesses, as well as add to its online portfolio a number of popular web sites such as Flickr, Yahoo HotJobs and Yahoo Personals. Read article.

If Online Marketing Is the Future, Why Are Some CMOs Stuck in the Past?

KNOWLEDGE@WHARTON— Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of their advertising dollars on TV and only 6% online, according to data compiled and analyzed by Google.

“Of all the advertising platforms, the Internet is one of the few on an upward trend,” says Wharton marketing professor Patti Williams. “But if you look in terms of the sheer amount of time most consumers are spending online and the amount of dollars being spent to reach them, it is still probably way under what it should be.” Read article.

Unilever and Emerging Economies

ECONOMIST— When a consumer-goods company casts around for the best growth prospects, rarely does anything look more promising than emerging economies. These markets are growing so rapidly that within just two years they will account for half of all the world’s consumer spending, estimates Harish Manwani, head of the Asian and African businesses of Unilever, a giant of the world’s consumer-goods industries. But even with more than a century of experience in some of these countries, Unilever tripped up.

Few companies have had the head start in places like Africa, China, India and Latin America that Unilever enjoyed. Yet despite the Anglo-Dutch giant’s formidable range of products and unprecedented depth of local knowledge, when rivals began to push harder its empire came under threat. Unilever was forced to re-examine its legacy and to act on what it found. Now the results are coming through. Read article.

The Super Bowl Economy

BUSINESSWEEK— Super Sunday generates major bucks for all involved, from its host network to snackmakers, HDTV sellers, and especially the game’s host city. For entrepreneur Steve Sodell, the Super Bowl started in late October. That’s when he and his staff of 12 began renting retail space in shopping malls and hotels across the Phoenix metro area—stuffing shelves with NFL-licensed T-shirts, hats, and other collectibles emblazoned with this year’s Super Bowl XLII logo. By the day of the big game on Feb. 3, his makeshift merchandise empire will comprise 24 stores and 42 employees. Ten days later, business shuts down and Sodell starts planning for next year’s Super Bowl in Tampa. “We have a very short window of opportunity to make our money,” he says. Read article.

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