It’s been a harrowing couple of weeks for Greece and fellow euro zone members, but they have finally found a 130 billion euro bailout formula that looks set to allow the European sovereign debt crisis to muddle through for the moment.

But the deal comes at high costs, not least of which are relations between Greece and the most hardcore northern members of the euro zone – Germany, the Netherlands and Finland — which have been pushing harsh terms on Greece while arguing the strict measures will bring the best long-term outcome.

In response, Evangelos Venizelos, Greece’s finance minister, complained last week that some euro zone forces want to push Greece out of the group, and accused them of “playing with fire.” With the latest agreement, he now says the euro zone has avoided a “nightmare scenario.” But many critics of the process maintain, as they have at earlier stages, that no permanent solution has been reached and that this agreement, too, will fall apart soon — that is, if Greece does not leave, or does not get pushed out of, the euro zone first.

This thinking won new credence this week when the Financial Times uncovered a “strictly confidential” report, prepared by the International Monetary Fund (IMF) for euro zone officials, that privately acknowledged what critics have been saying publicly for months — that the of austerity measures being imposed on Greece may backfire. The steps could reduce economic growth so drastically that, even in the best-case scenario, it would worsen Greece’s debt woes rather than improve them. Greece’s debt-to-GDP ratio could end up at 160%, rather than the 120% target being touted in public. This would all be accompanied by an economic depression for Greece, which some say is already underway. It does not help that Greece has not met many of its obligations under the last bailout of 110 billion euros in 2010.

If this is the discussion behind the scenes, then it begs the question: What do Germany, the Netherlands, Finland and their supporters really want? Are they attempting to impose such harsh conditions on Greece that it has no choice but to leave the euro zone – a “Grexit” as some now refer to it?

“Probably what the politicians are trying to do is to force the Greeks to leave,” says Wharton finance professor Franklin Allen. “They don’t want to take the blame, and they can then claim it is the Greeks’ fault. They will have a tough time explaining to their taxpayers how they lost so much money.” At the same time, those officials probably still hold some hope that “something will turn up,” Allen adds. “It could work out. I agree with the report, though, on what’s likely to happen.”

The economic numbers are brutal. In Greece’s latest unemployment report, the figure hit nearly 21% (youth unemployment is at 48%), in an economy that has been in recession for some five years. The economy shrank by a further 7% in the fourth quarter of 2011. Projections for 2012 are for a contraction of between 4.8% and 7%. January budget revenues fell by 7% (compared with January of 2011), versus a targeted increase of 8.9%. Tax receipts plummeted by more than 18% for the month.

“The ‘solution’ is unlikely to get Greece out of trouble,” says Mauro Guillen, Wharton management professor, of the latest bailout. “Normally, a debt restructuring and bailout would be accompanied by measures to boost competitiveness. Unfortunately, Greece cannot do so overnight because it cannot devalue its currency — it doesn’t have one. So they are in a bind. If things continue this way, the economy could contract further — that’s the consequence of austerity — and unemployment could be high for a long time.”

Some critics say there are only two ways out of this spiral down: (1) transfer payments – a so-called euro zone-wide fiscal union — from relatively rich northern euro zone members to Greece and other members facing sovereign debt crises (Portugal, Spain, Italy and Ireland); or, (2) a Greek exit from the euro, and creation of the new drachma, which would allow Greece to devalue its new currency and increase competitiveness and productivity.

So, is Greece now better off leaving the euro zone? “In my judgment they are better off to leave,” Allen says. “Quite the best time to do that is an interesting issue. They may want to maximize the amount they can obtain before defaulting and/or achieve primary balance (when a government has more revenues than expenditures, not counting interest paments). Primary balance would certainly be an easier situation in which to undertake the default.”

The latest agreement provides Greece with 130 billion euros and could cut Greece’s debt by some 30%, with bondholders bearing the brunt of it. They will suffer a “haircut” of nominally 53.5%, but that works out to about 74% after accounting for additional adjustments in Greece’s favor. The reductions amount to some 107 billion euros.

Allen, explaining that he has not seen all the final details of the agreement, notes that “at one stage the idea was that the IMF, EFSF (European Financial Stability Facility) and private creditors would have equal priority. If this made it to the final agreement, then the Greeks are in a strong bargaining position. The IMF would, for the first time, be faced with a loss. Since some of their money comes from very poor countries, this would cause a huge problem for them. Greece, with a GDP per head in PPP (purchasing power parity) terms around $28,000, is actually quite a rich country, just behind Spain and Italy in the rankings which are both around $30,000 a head. They really would be taking from the poor to give to the rich.”

Marshall Auerback of Pinetree Capital, who is also an advisor and hedge fund manager for Pimco, the world’s largest bond fund, calls the new agreement “a closet bailout of the bondholders,” because of member demands that Greece, in effect, set up and an escrow account for the bailout funds, upon which foreign creditors receive first priority. He recommends that Greece leave the euro zone and create a new currency that would be devalued by 60% to 70%. This would set the stage for making Greece the “Florida of Europe,” meaning a prime spot for vacationers and retirees that would pump large amounts of capital into the country, Auerback said in an interview on Business News Network.

Certainly Greece would seem to be reaching the breaking point. As Billy Mitchell notes in his blog, Modern Monetary Theory … macroeconomic reality: “On February 12, 2012, the famous Greek composer Mikis Theodorakis wrote an open letter to the international community – THE TRUTH ABOUT GREECE – where he makes the telling point about bankruptcy:

Production has come to a standstill, the unemployment rate has reached 18%, 80,000 shops have closed down, along with thousands of small businesses and hundreds of industries. In total, 432,000 enterprises have shut down. Tens of thousands of young scientists are abandoning the country, which is every day sinking into medieval darkness. Thousands [of] formerly wealthy citizens are scavenging on rubbish heaps and sleeping on the pavement.

In the meantime, we are supposed to be surviving thanks to the magnanimity of our lenders, the Europe of the Banks and the IMF. In reality, every package deal which charges Greece with tens of billions of Euros is repaid in full, while we are burdened with new unbearable interest rates. And since it is necessary to maintain the State, the Hospitals and the Schools, the Troika [the IMF, the European Central Bank and the European Union] is burdening the middle and lower economic strata of society with excessive taxes, leading directly to starvation.

Customers can fill up their Café Moments cards with Rs. 100 to Rs. 5001 (approximately $2 to $100) on an ongoing basis and use it at CCD outlets across the country. The validity will be for one year from the time of loading money onto the card. Apart from providing convenient cashless transactions, the Café Moments pre-paid card offers special benefits like discounts, free beverages and surprise gifts. The card has been launched in Bangalore, where CCD is headquartered. By end of March it will be available in eight cities and at locations across India by mid-May.

This may be a first in the Indian café market, but Starbucks is way ahead on this front, having introduced pre-paid cards over a decade ago. Starbucks cards are accepted at most locations in North America, including outlets at airports and inside grocery stores. The cards may also be used at most stores in Australia, Hong Kong, Ireland, Mexico and the United Kingdom. During rush hours, the cards come in handy for speedy transactions. Also, customers can check their balances on the company website, activate an automatic reload function, get refunds on unused cards, protect their cards against loss or theft, and take advantage of a host of other discounts and freebies.

According to K. Ramakrishnan, CCD’s president of marketing, the chain plans to position the cards primarily as a gift option that consumers can purchase for family or friends. But for the CCD card to be more than a clone of Starbucks’ program, observers say Ramakrishnan and his team will have to think more innovatively and add on a host of benefits. Otherwise, by seeding the pre-paid card concept among Indian consumers, the chain could end up only making it easier for Starbucks to find takers for its card once it becomes available.

While Starbucks is expected to impact CCD’s business, the Indian chain is currently on an expansion spree. CCD currently has around 1,275 outlets across the country, but plans to increase that number to 2,000 by the end of 2014. In the meantime, the chain’s food menu is being revamped and expanded, and the vendor base is being accordingly strengthened.

CCD is also becoming more active in Internet space. “We have 1.3 million fans on Facebook and this number is growing daily,” Ramakrishnan notes. “We see it as a great vehicle for communication and feedback and, most importantly, for co-creating new initiatives — like new food items, for instance.”

Ramakrishnan adds that CCD is well positioned to take on Starbucks and other global players that are expected to launch outlets in India later this year. “We are fully integrated from bean to cup [CCD is part of Amalgamated Coffee Beans, the largest individual coffee plantation owner in Asia]. With over 1,200 cafes, we have a large customer base; we understand the youth and their trends. And we stand for an Indian mass value brand.”

But Starbucks also brings strengths to the table, including a global footprint and having an Indian partner firm in the Tata Group. There is also the potential that some of CCD’s 9,500 employees, the largest pool of trained workers in the country, would be lured away by potentially higher pay at the one of the Seattle chain’s outlets. “The café market in India is still nascent and the potential is large enough for more players to come in,” Ramakrishnan says. “In some locations, we have outlets of our global competitors [such as United Kingdom-based Costa Coffee and Australia’s Gloria Jean’s] very close to ours and all of us attract customers.”

Ramakrishnan notes that the per capita annual consumption of coffee in India is 82 grams. In the U.S., it is four kilograms and in some countries in Europe it is around eight kilograms. There are around 6,000 towns in India, but coffee chains are present in only around 200 of them. “A cafe outlet is a hangout place for the youth and they want it close by. So the potential is huge,” he adds.

According to Ramakrishnan, Starbucks and all other global entrants will face challenges in India, including understanding the nuances of the Indian consumer. “In the U.S, 40% of coffee sales occur before 11 a.m. In India, sales typically happen only after 11 a.m.,” he says. “That’s a huge shocker for the Western brands.”

Yelp offers in-depth user reviews and ratings of everything from restaurants to churches to pet hospitals. To date, it has amassed more than 25 million reviews, making it one of the most popular sites of its kind. Users create individual profiles and increase their status (i.e., the perceived value of their reviews) by remaining active members over time and through other users’ ratings of the helpfulness of their reviews.

Last week, the company indicated that it was aiming to sell shares at between $12 and $14 in an early March IPO — part of an effort to raise $100 million. At the higher price, the firm would be valued at $838.6 million, according to an article in The Wall Street Journal.

That’s a far cry from the $100 billion valuation that some foresee for Facebook following its expected IPO later this year. With that in the air — along with recent declines in share prices for Groupon, Zynga, Pandora and LinkedIn — many are wondering if Yelp is yet another in a string of potentially over-valued technology companies planning to go public.

Yelp is still not profitable. Last year, the company lost $17 million, although revenues from local advertising increased by 74% to $83.3 million, according to the Journal. The company has warned that growth will likely moderate as the company matures in its current U.S. markets. (The firm plans to continue expanding internationally.)

Still, some analysts point out, the company has a strong foothold in the online recommendation field for a number of reasons. “They have the breadth of coverage and the richness of millions of reviews,” says Wharton marketing professor David Reibstein. The depth of feedback on the site “cannot be bought overnight” and would be “hard for [competitors] to replicate.” In a previous article in Knowledge@Wharton, Reibstein noted that group buying site Groupon, for example, suffered from intense competition among copycat sites offering similar deals. However, “customers are now loyal to using Yelp. There will have to be a motivation to switch. It is unclear what that would be.”

Also, some online activities are more easily monetized than others, notes Kendall Whitehouse, director of new media at Wharton. “One of the things that is attractive about Yelp is the site’s closeness to the user’s purchase decision,” he says. “Someone looking up a restaurant review in Yelp is very likely planning to go out to eat somewhere. And that should be easy to monetize. Like search, Yelp reveals its users’ intentions, and that makes these sites attractive to advertisers.”

Reibstein notes that unlike a company such as Google, which “is focused on everything,” Yelp’s success is based on the fact that it is focused on something very specific — local user reviews. Wharton marketing professor Eric Bradlow agrees that Yelp has served its niche well, particularly as an early player in the realm of online restaurant reviews. “There are some products and services for which product recommendations are not central. But, for restaurants, which are an experiential good, they are paramount.”

However, Bradlow sees a potential change that leaves a question mark over whether Yelp’s current business model is sustainable. “The next big thing will be target recommendations based on people’s social network.” As soon as word-of-mouth content becomes “Face-bookable,” he says, “then general word-of-mouth sites [like Yelp] will struggle. People want recommendations from their network.”

The company has been tracking “web-browsing habits of people using Safari browser software even if [users] intended for that kind of monitoring to be blocked,” the Journal article noted, adding that this behavior has led three U.S. congressmen to ask for a Federal Trade Commission investigation. The article also pointed out the company last year signed a privacy settlement with the FTC after the commission charged it with using “deceptive tactics and violating its own privacy promises to consumers” when it launched its Buzz social network.

As for the breach the Journal found last week, Google responded that it has deleted the tracking files in question and is addressing the congressmen’s concerns.

KnowledgeToday asked two Wharton faculty — Andrea Matwyshyn, professor of legal studies and business ethics, and Shawndra Hill, professor of operations and information management — to comment on this latest incident.

Given all the recent examples of Internet companies chipping away at people’s privacy, how serious is this latest breach?

Matwyshyn: According to press reports of commentary from a Google spokesperson, the company does not necessarily consider its actions to constitute impermissible conduct: Google is alleging that users authorized the company to interact with their data in certain ways and, by implication, that this consent authorized alteration of inconsistent settings on a device, which may have happened in an unanticipated manner. 

Hill: Firms like Google need to take [care] because legal cases regarding privacy breaches can and do go to court. With each breach, Google opens itself up to punishment and a degradation of consumer trust. In this [latest incident], millions of consumers might be affected, which could indeed prove problematic for Google because of the scale of the Safari problem.

What would have led Google to do this? An obvious answer is the increasing competition for ad dollars, but is there another explanation? 

Matwyshyn: This type of error is symptomatic of the broader privacy and security culture wars going on inside all companies, but technology companies in particular. Privacy and security champions and lawyers frequently butt heads internally with engineers over design and consumer protection. In engineering-focused cultures such as Google’s, shipping code usually wins, and privacy/security and consumer protection can be viewed by some internal decision makers as secondary things you “clean up” when they go awry, rather than things companies must design around.   

Hill: It’s possible that better advertising alone is driving the data collection when consumers use the Safari browser. However, it is also possible that Google was not aware of all the consequences of their actions. It is often the case with data collection that you have one intention but that there are other uses that are unforeseen when the data or process for data collection is established. Still, Google should do a better job identifying potential problems before launching new processes.

Is it conceivable that Google didn’t know this was happening?

Matwyshyn: Code is written by humans, for humans.  Yes, it’s entirely conceivable Google didn’t do their homework and anticipate this dynamic. It’s also conceivable that a company might anticipate a dynamic such as this, but would then decide that fixing it is a lower priority than shipping code out fast. A third scenario might be that a company decides this type of dynamic is a feature and not a bug, that their consumer EULA [end user license agreement] grants the right to tweak settings on user devices and that users are unlikely to notice the exact workings of the code.

Do you think Google’s reputation as a “do no evil” site has taken a substantial hit?

Matwyshyn: “Do no evil” was Google’s successful mantra from the 1990s and 2000s. Those days are gone from the standpoint of consumer perception. Although Google’s socially-beneficial pilot programs and philanthropic efforts are commendable, in the 2010s many consumers view Google as an aggressive data aggregator akin to Facebook. Microsoft is the new underdog.

Hill: Google is scheduled to change their privacy settings next month. In addition, they have come under scrutiny regarding other privacy breaches in the past year. While the firm may continue to claim to “do no evil,” their business strategy is certainly changing; no doubt consumer perceptions, and possibly trust, will change as a result. However, other large data driven companies are using behavioral, social network and demographic information to target ads. So, it’s not like there is an alternative (right now) where user data are not being used for advertising and business intelligence.

The main concern for consumers will come when/if Google tries to maximize their advertising dollars at the expense of giving users the most relevant information to answer their search queries.

Three congressmen have called on the FTC to investigate Google over this practice. Are we finally reaching a tipping point where the privacy issue has caused enough concern that the government will mete out serious sanctions/punishment?

Matwyshyn: One possible outcome may be another FTC consent decree expanding the existing mandatory periodic FTC audits…. The organizational impact of FTC audits may be underestimated internally: FTC audits are a disruptive and expensive experience, as Microsoft learned. If this underestimation is the case, and if the privacy lessons from Buzz have not been internalized by the corporate culture, it is unsurprising that another privacy problem has arisen.

Hill: It’s hard to say which case will end up [resulting in a] severe punishment. However, with each case, we get further along into the discussion about what is acceptable and what is not with respect to consumer privacy. The hope, at least from consumers, is that the conversation will evolve into a clear set of rules and regulations that govern how online firms and others can make use of personal data while offering useful, and free, services.

The figures reflect a decision by the company before the 2011 holiday season to significantly increase prices — overall by 16% — on some of its most popular products. The cost of Jif peanut butter alone rose 30%. Vince Byrd, Smucker’s president and COO, noted in the earnings report that “although sales increased 12% for the quarter, we were disappointed with overall volume and its impact on earnings.” Despite the presence of “strong merchandising programs” in place around the holidays, he added, “our volume was lower than expected as a result of our higher price points coupled with lower consumer demand across the food industry.” The company also cited higher costs for peanuts as a reason for the price hike.

Yet one wonders how Smucker’s could have missed the fallout of a 30% price increase on its sales volume, especially during a time when consumers are conscious of price hikes in all categories, from groceries to gas to clothing.

As Wharton marketing professor Z. John Zhang notes, “If Smucker’s raises its peanut butter prices so aggressively, yet it does not expect a significant demand drop, you wonder if its managers were napping on the job. In general, consumers feel better accepting price increases” if they know that a firm’s costs — for raw materials, for example — are higher.  ”This is clearly not the case even if costs did indeed rise. There is no big publicity about the shortfall of peanuts like [there was about] the recent case of orange juice shortage in the U.S.”

In addition Zhang says, “it is always a dicey situation for a firm to unilaterally raise its prices, because the competition can always take advantage of it. After all, a hungry kid may not notice the difference in a lunch sandwich, and there are plenty of substitutes out there. A better way to do this would have been for the company to raise prices slowly, feeling its way forward, and thus give customers some time to adapt and adjust, especially in today’s down economy. Now Smucker’s will have to win back lost customers,” a number of whom have been trying out, and liking, cheaper competing brands.

In its earnings announcement, the company attributed the volume decline to several reasons, including: significantly higher “retail price points in the third quarter of 2012 compared to the prior year;” significantly higher “consumer pantry loading [i.e. hoarding] of peanut butter during the second quarter of 2012,” which resulted in lower volume during the third quarter; key retailers’ decision to “manage inventory levels down during the quarter,” and “particularly aggressive … competitive practices and price points” in some of the company’s product areas.

For Wharton marketing professor Jagmohan Raju, the point here is “not that consumers are cutting their grocery bills, but probably switching to lower price peanut butters or jams and jellies, most likely private labels. If price increases by Smucker’s were not matched, it is quite likely that this can happen. Probably competitors, especially private labels, did not raise prices as much,” he says, noting that he would have expected “a greater decrease in unit sales than what they saw. Either there was some increase in prices by other brands, or Smucker’s is a strong brand.”

A recent article titled,

Today’s global business headlines are replete with a surreal litany of scandal. As those enterprises that are “too large to fail” do just that, it has also become clear that governments too often play the dual role of willing benefactor and, in the case of many politicians, beneficiary. And as the same headlines will concur, the ruinous corruption that stands at the nexus of business and government transcends national boundaries, ethnicity and religion.

Scandal, corruption and greed are not uncommon bedfellows to business and politics in the U.S. — from AIG and Lehman Brothers, which fell prey to their pathological excess in credit default swaps, to MF Global’s implosion (with a former senator at the helm) and Bernie Madoff’s Ponzi scheme. The massive accounting frauds at Olympus in Japan, and the Italian company Parmalat earlier, bring home the universality of ethical lapses that plague industry.

In the article “Business vs. Ethics: The Indian Tradeoff?” the authors posit that multinational managers seeking returns on investment in India must realize that a different, dubious ethical norm pervades business there. “Slicing through bureaucracy, inadequate infrastructure and chaotic environments demands a unique genius — one that sometimes neglects Western ethical norms,” they write.

Leaving aside a substantive discussion endeavoring to define “Indian” and “Western” ethical norms, few would dispute the contention that doing business in India requires a familiarity with structural, hierarchical and cultural norms. Whether these cultural and contextual structures are unique only to India, or attributable to post-colonial, post-globalization or other societal realities is open to debate, but the authors wandered into a far more provocative postulation in a sub-section entitled, “Of Cultural Contexts and Ethical Equilibriums.”

Ostensibly to give context to what ails India Inc. — its ethical malaise — the article turns to Hinduism’s greatest epics, the Ramayana and Mahabharata. The former, a beloved poem of more than 50,000 lines dating back several thousand years, is held sacred by a billion Hindus as the life story of an incarnation of God, Lord Rama. Idealized as the archetypal son, brother and eventual king, Rama’s rise, tribulations, victories and sorrows are seen through the prism of his consistency in nobility and his dharma, or righteous action. The latter, the Mahabharata, is four times as long as the Ramayana and celebrated as the repository of the Bhagavad Gita, or Divine Song, considered by many Hindus to be the direct revelation of Lord Krishna, an incarnation that succeeded Rama. The authors similarly indict the 2,500-year-old treatise on statecraft and leadership attributed to Kautilya, the Arthashastra, as complicit in India’s ethical failings.

The authors point to Lord Krishna’s tactical abridgement of the existing rules of war to goad Arjuna to vanquish an unarmed adversary — who, it should be remembered, had not surrendered. There are other incidents in the Mahabharata, too, where Lord Krishna, Arjuna and his protagonist family resort to questionable means to accomplish their very justifiable end — defeating Duryodhana, a most treacherous and vengeful ruler.

The article’s authors argue that episodes and vignettes within these epics, where even the characters endowed with divine birth rely on guile and trickery to ensure humanity’s victory over evil forces, mean that such tactics are normative to Indian society. If the Gods could take recourse to chicanery, the argument goes, then expect the same from Indians in the business world.

But even leaving aside the religious significance of the epics, this reductive analysis, bereft of a rooting in Hindu philosophy, is astounding. The hoary expanse of the epics, traversing several millennia of time and space, are perhaps the most influential scriptures in the Hindu tradition. How the epics and other ancient treasures are interpreted is predicated, of course, on the understanding and spiritual inclination of the reader.

After a thorough reflection upon the message of this epic, many would conclude the converse of what the authors presume. Indeed, as Gurcharan Das, a noted author and former CEO of Procter & Gamble India, writes in his own passionate meditation on the great epic in his book, The Difficulty of Being Good — On the Subtle Art of Dharma: The Mahabharata is clearly uncomfortable with Krishna’s conduct during the war. This explains, in part, why the mood of the epic now swings downward. There may have been good reasons why Krishna had to do what he did to win — good had to defeat evil — but the epic does not believe that the ends justify the means. It does not approve of the breaking of the rules of warfare. It does not believe a dharmayuddha, “just war,” can be fought unjustly.

 The epics are very clear that the laws of Karma are absolute and relentless. Every action must bear consequences to the deed. Not only do Arjuna and his brothers see the annihilation of all their children during and after the war, but even Lord Krishna’s progeny die out after a spasm of fratricide. The message of the scriptures is dissonant with India’s contemporary ethical conundrums.

 Rather than being seen as a perverse rationale for ethically suspect business practices, the Mahabharata, and the Bhagavad Gita within — a climactic conversation between Lord Krishna and Arjuna — are actually celebrated by management gurus as a primer on morality in business, karma capitalism. The concept of karma yoga is encapsulated here — that managers and workers must perform righteous action, but without attachment to the result. Profits result from good karma, the Bhagavad Gita proclaims, and should be shared by those who shared in those efforts.

 The Ramayana, too, where Mahatma Gandhi proclaimed he took his leadership lessons from, is often cited as an inspiration to ideal business practices. As Vivek Mansingh, former country manager of Dell India R&D, wrote: “The importance of emotional intelligence, which is an embodiment of motivation, empathy and social skills, increases as one goes up the management chain…. It is in this … that I recognize a similarity with the Ramayana.” And while Kautilya’s Arthashastra includes the wiliest tactics for successful statecraft, scholars know the realities of Kautilya’s times — he was advising his protégé, the great Chandragupta Maurya, during an unstable time of Macedonian and Persian invasions, when the very unity of an Indic nation-state was at risk. Kautilya was the father of realpolitik, perhaps, but it is a fundamental error to see [his teachings as a] rationalization of corruption or ethical failures.

 Instead, tomes have been written on Kautilya’s celebrated aphorisms of management, and only recently did this forum feature M.V. Rajeev Gowda of the Indian Institute of Management, Bangalore, taking a different view of the Arthashastra. “Corruption has certainly existed in India historically; Kautilya, in his Arthashastra, discusses how to combat it,” Gowda wrote, in diametric contrast to a perspective that would see corruption in the modern business milieu as somehow sanctioned in that work.

 That India’s politico-economic life is infested by a culture of lax ethical standards is demonstrably true; to contend that the Hindu epics and ancient texts inform this deficit is equally myopic. This tendency to broadly impugn religious scriptures, or construct a normative cultural paradigm assailing a particular community and its traits, is an intellectually lazy path taken before. Suketu Mehta, a well-known Indian-American author was excoriated for his collective indictment of South Asians and the community’s “pursuit of success and money at any cost” in his depiction of Raj Rajaratnam [founder of Galleon Group] and his conviction for insider trading.

 The Anna Hazare-led awakening of Indian civil society demonstrates that condemnation of public sector corruption — and by extension, that of the Indian business-political complex — invokes a hypernorm model of business ethics. As Wharton’s Thomas Dunfee and Thomas Donaldson argued in their book Ties That Bind, the proscription of corruption in the writings of all major world religions, including Hinduism, is one of many sources of ethical behavior, so that the insistence for transparent business practice is a hypernorm.

 Having only just repudiated the derogatory epithet “Hindu rate of growth” that once defined India’s notoriously anemic economy, allegedly hamstrung by Hindu nihilism, many Hindus will reject any attempt to define corruption as a religio-culturally inspired reality in Indian society. Corruption and ethical failings are far too prevalent in contemporary India — but rather than being informed by Hindu scriptures, the scourge attests to how far society has diverged from them.

Additional reading:

 Temples, Townships and Schools: India’s Philanthropic Legacy

 Wharton’s Philip Nichols: ‘We Have to Line up Incentives So People Don’t Act Corruptly’

 Capital Plight: What Drives Corruption in India?

“Up to that point, we had 700 photos on Instagram tagged with Warby Parker,” said Tim Riley, the company’s director of online experience. “Then the day of the photo walk, we had about 750 additional pictures tagged with our name. We also had 120 people in our offices and got to talk to all of them. It was a giant friendly hangout.”

As social media becomes an increasingly important part of retailers’ marketing and customer service efforts, it’s not just a matter of having the largest number of fans on Facebook or Twitter. Retailers also have to know how to engage users and how to turn those online conversations into positive offline interactions.

At a panel discussion on social media held this week as part of a conference organized by Wharton’s Baker Retailing Center, Riley and others from the industry discussed efforts to unlock the value in their online followings.

“‘Why don’t you have as many fans as Starbucks?’ is obviously a metric, but it isn’t the most important metric,” noted Chuck Hansen, vice president for media strategy at Macy’s. “We want to look at engagement level: When we create a post and look at similar posts across our competition, are we seeing a higher engagement level? And is it a positive engagement level?”

A key way to grow engagement is to figure out how consumers want to interact with the brand in question. For example, when Macy’s initially started its Facebook page, the company made the decision to focus on fashion rather than promotions. “But when we asked [our followers] what they wanted to talk about, they said promotions,” Hansen said. The retailer is now testing a beta program that allows coupons to be delivered via customers’ Facebook feeds.

Dennis McEniry, president of online efforts at Estee Lauder, noted that cosmetics brands can spend as much as $1 million to produce “how to” videos for different beauty products. But those videos typically get a fraction of the viewership on YouTube that amateur videos — those uploaded by individual consumers — do. “We’ve tried to switch to thinking about how to move the conversation to consumers doing videos, rather than necessarily having all of our brands make videos.”

Customers also want to feel empowered, panelists said and one way to do that is to get their input at the product level. Estee Lauder, for example, has solicited feedback about names for lipstick shades. Meanwhile, Macy’s ran a promotion asking followers to design a balloon for its annual Thanksgiving Day parade, and is running a different campaign allowing people to vote on songs that will be used for the mixtape that accompanies its July 4 fireworks display.

“Done well, social can be predictive,” noted Dan Clifford, vice president of marketing for Victoria’s Secret. “There’s a fine line between letting the customer drive the product too much, but there are definitely moments where we have sought feedback, whether it’s about names or certain functions built into a product. When done well, [the feedback] has matched the real-time testing we’re doing in stores. But it’s also a matter of getting the merchant comfortable [with] hearing from the world at large.”

In some cases, consumers also have to get comfortable with that kind of mass feedback. Warby Parker allows customers to have a selection of frames sent to their homes so they can try them on and pick the one they like best. The company started encouraging people to post pictures of themselves wearing each pair of glasses so staff from the company could weigh in. “The customer becomes empowered, and when someone else posts a picture and asks, ‘Hey, what do you think about these glasses?’, the person we helped before will start answering on our behalf,” Riley said.

N.R. Narayana Murthy, co-founder and chairman emeritus of Infosys, is categorical that the company would not have seen this kind of success had India not set forth on the liberalization path. He has often said, “If there is one great example of the success of liberalization, it is Infosys.” Indeed, at the 16^th Wharton India Economic Forum held in Mumbai earlier this year, keynote speaker K.V. Kamath, chairman of ICICI Bank and Infosys noted that liberalization “has allowed a whole new generation of entrepreneurs to flower, execute their vision and add tremendous value.”

In a recent study, Kaustubh Dhargalkar, professor of business design and head of the innovation lab at the Center For Innovation and Memetics at the Mumbai-based Welingkar Institute of Management Research and Development, and his research assistant Rudra Desai, have examined the role that liberalization has played in shaping successful entrepreneurs in India. Dhargalkar’s study focuses on companies listed in Group A of the Bombay Stock Exchange (BSE) from 1995 to 2011. He says that it typically takes three to four years for policy decisions to reflect on firm performance at the ground level; Dhargalkar chose this particular category for the study because it represents the elite, high-performing and sought-after firms. “The listing of a company in this group is an indicator of the success of the company,” he notes. “These are blue chip firms.”

According to Dhargalkar’s study, the number of first generation companies listed in Group A has grown from nine in 1991 to 30 in 2011. That number does not include those start-ups that moved out of Group A for various reasons, such as being acquired by another firm. “If we were to consider the total number of first generation companies getting listed, as well as going out of, Group A on the BSE then 32 more companies would be added to the list,” the researchers write. “In simple terms, 62 different first generation companies got listed in Group A of the BSE [from] 1995 to 2011.” That’s an increase of 588%.

But even if one were only to consider the 30 companies that were listed on Group A and did not move out during the period studied, the increase in percentage terms since liberalization is still significant. In 1995, first generation companies accounted for 9.78% of the firms listed on Group A. In 2011, they constituted 15.08%. According to the study, moving forward “the gap in numbers between the first generation companies and older established companies will gradually reduce, though not get bridged…. If reforms are pushed by the government in an orderly manner, the Indian entrepreneurs would continue to create big-ticket successes.”

But given the current state of Indian politics, where the government has been reduced to a state of policy paralysis due to charges of corruption, what will be the effect on entrepreneurship? “There will be some impact,” Dhargalkar says. “But the power of entrepreneurship in India has been unleashed by the liberalization process and even if the pace of reforms is slow, entrepreneurs will find a way to move ahead.”

Dhargalkar lists four key reasons for the increased influence of first generation companies in the post-liberalization era: Technology has substantially reduced the costs associated with niche marketing; stock markets have become more efficient and transparent and made it easier for entrepreneurs to access money; the costs of starting up an enterprise have fallen because of access to angel investors and venture capitalists; and Indians have opened up to entrepreneurship.

Pointing out that entrepreneurs are important in any economy because they create employment, generate new ideas and implement new techniques in management functions, Dhargalkar notes: “Over time, entrepreneurs will increasingly contribute to India’s GDP and also have a greater impact on the socioeconomic fabric of the nation.”

A subsidiary of online shopping portal eBay, PayPal last year exceeded expectations with $4 billion in mobile payments volume, and the company predicts that figure will reach $7 billion in 2012, company spokesperson Anuj Nayar told Knowledge@Wharton Today. Last November, mobile payments were 538% higher on Black Friday than on the same day in 2010, according to PayPal. The firm’s latest encouragement comes from a pilot program it launched in January at 51 Home Depot stores, mostly in the San Francisco Bay area.

Mobile payments are a small fraction of the net payments of $118 billion that PayPal put through in 2011. Even so, Shawndra Hill, a Wharton professor of operations and information management, finds PayPal’s mobile initiative “exciting,” although she doesn’t think it is “a game changer just yet.” Before wide scale adoption occurs among consumers, “mobile solutions need to prove that they are as secure as paying with credit cards or cash,” she says. Also, consumers will need to trust the brands offering these services, just as “they have had a long time to learn to trust credit cards.” Further, mobile payment options need to be more convenient and possibly cheaper than other avenues, Hill adds.

According to Wharton marketing professor Barbara Kahn, pricing of mobile payments will determine their popularity, especially when conventional credit cards also move to mobile formats. “The issue from the consumer point of view will be which form of mobile payment to use, just like we now decide which type of card to use,” she says. “Right now, the end user [usually] pays list price for the item regardless of what kind of card is used; sometimes there is a cash discount, or in some countries a fee for using a credit card. I would imagine all of these pricing issues are on the table now.”

Hill suggests that mobile payment processors could expand their market opportunity by offering lower transaction fees than credit cards. Also, the requisite infrastructure and standards for money transfers have to keep pace, she notes.

PayPal’s mobile payments option is part of its recently launched PayPal Wallet, which includes a card that allows offline payments at stores. With that, “consumers will choose if they want to swipe a card, use an app or tap their phone,” says Nayar. Others in the mobile payments space include Google Wallet, which stores customer credit card information on smartphones, and so-called NFC devices that can be used for electronic payments. (The Near Field Communications Forum is a group of companies — including Nokia, Sony, Samsung and Microsoft, among others — that is developing mechanisms for payments and other services across devices.)

Mobile payments are just one of many new options consumers will see this year, according to Scott Dunlap, PayPal’s vice president of emerging opportunities. “In 2012, we will see a rise in virtual currencies and the ability to use them to pay for ‘real’ goods,” he wrote recently in the online magazine Gigaom.com. “Imagine paying for groceries at Safeway with Facebook credits or using extra frequent flyer miles for that cup of coffee at Starbucks.”

The five banks include Bank of America, JPMorgan Chase, Citibank, Wells Fargo and Ally Financial.

The goal of the settlement is to hold the banks accountable for a range of shady dealings — ranging from charging new homeowners excessive fees for insurance policies to evicting current homeowners on the basis of unsubstantiated or false information — and also to jumpstart the moribund housing market.

Observers, however, are skeptical about who this settlement will really help. Some say the banks have gotten off easy even as relatively few homeowners will be helped by the promised aid. A column in Sunday’s New York Times business section, for example, suggests that the payback to people whose properties were wrongly foreclosed on will most likely be less than $2,000 per homeowner. The column also describes the settlement as a “stealth bailout of the major banks” because, as one critic points out, “it will improve the value of the second liens or home equity lines of credit [the banks] own” because these holdings are “worthless if the first mortgages preceding them are underwater.”

Nor is there any expectation that the banks will actually carry through on the promised compensation, the column goes on to say, citing other agreements with the government — such as Countrywide Financial’s predatory lending settlement in 2008 — in which banks failed to live up to the terms of a deal.

Finally, skeptics doubt that the mortgage industry’s reputation will be rebuilt after an agreement that offers too little, too late to help either individual homeowners or the overall housing market.

According to Kent Smetters, Wharton professor of business and public policy, “The agreement ostensibly deals with alleged acts committed by banks during the foreclosure process, including improper papering and fees. However, the remedies in the agreement itself use broad brush strokes that do not sufficiently target the harmed parties, instead benefitting some homeowners who simply borrowed more than they can repay. It is not surprising, therefore, that the help is diluted.”

The real problem, he adds, “is not the total size of payments, but a banking system with insufficient accounting systems and securitization processes that render targeted remedies nearly impossible.”

Wharton real estate professor Susan M. Wachter describes the deal as “a start, a down payment, if you will. It covers only a small share of the market. But for those it helps, it will matter. And it may help put into place a template for solving the far larger part of the problem that is out there.”

Indeed, an article last week in The New York Times notes that the money “will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosures,” but adds that the agreement remains “the broadest effort yet to help borrowers owing more than their houses are worth.” It predicts that about one million people will be able to get their mortgage debt “reduced by lenders or will be able to refinance their homes at lower rates.”

In addition, the article states, the settlement does not preclude regulators from filing criminal charges against banks or investigating other questionable practices related to the housing market, such as insurance and tax fraud or the bundling of risky mortgages into securities later sold to unsuspecting investors.

The report, which looks at job growth between 2010 and 2020, also projects an overall 14.3% increase in total employment over the course of the decade, while noting that the outlook for the end of the decade looks more robust because the labor market has been so slow to recover from the recession.

Health care, social assistance, personal care and construction were identified as the industries that will have the fastest job growth over the ten-year period, although the BLS noted that the construction industry won’t regain all the jobs it lost as a result of the recession and the accompanying protracted slump in the housing market.

About a quarter of all new jobs created are expected to come from construction, retail and health care. According to the BLS, the four occupations expected to add the largest number of workers are registered nurses, retail salespeople, home health aides and personal care aides.

Meanwhile, the U.S. manufacturing sector is expected to continue to contract, according to the report. Federal workers will also shrink in number — the BLS projects the second-largest job loss in any industry to occur at the U.S. Postal Service, which is facing financial troubles and a struggle to adapt its business model as customers increasingly turn to digital forms of communication. (Farmers are projected to experience the biggest employment decline.)

The Bureau also looked at how employer requirements for worker education and training will change during the decade. The agency found that, although job categories that require some type of postsecondary education are expected to grow the fastest, more than two-thirds of all job openings are projected to be for positions that typically do not require any education beyond a high school diploma — jobs that usually garner lower wages and fewer benefits.

Concerns over a “jobless” recovery also dominated conversation at the 2012 annual meeting of the World Economic Forum in Davos, Switzerland, according to Wharton management professor Michael Useem, who attended the gathering. In an article for K@W, he noted that several participants referenced a recent McKinsey report that predicts the U.S. unemployment rate is unlikely to drop to pre-crisis levels before the end of the decade.

“Other participants singled out the soaring youth unemployment in the U.S. and U.K., where jobless rates have reached 20% or more,” Useem wrote. “When the moderator of one session polled its several hundred participants on whether 21st century capitalism was so far failing our 21st century societies, more hands went up in agreement than in dissent.”

Useem added that there were worries among attendees that the American financial crisis and the European struggles with sovereign debt have created  “a lost decade.” “Young people trying to enter the labor market for the first time during one of these crises may already be consigned to what another commentator deemed a “lost generation,” he noted.

Currently, India accounts for only around 3% of the global electronics market and around 1% of global production. But industry leaders and government officials believe that with the huge increase in domestic demand fueled by a growing middle class and rising per capita income, the opportunity is there for India to become a significant global player.

Electronics sales in India were around $40 billion in 2009, and are expected to reach $100 billion by 2014 and $400 billion by 2020. Some players are optimistic that the market may grow to even higher figures. “We believe that by 2020, the domestic demand for electronic products in India can go as high as even $1 trillion,” Pradeep N. Dhoot, group president of Videocon Industries said during a keynote address. Dhoot pointed out that unlike the rapid expansion in India, the $1.75 trillion global electronics market has been posting annual growth in the low single digits for the past few years and is expected to continue at that pace.

India’s manufacturing opportunity lies in the gap between the expected demand in the country and the rate of domestic production. Although the market for electronics in India is expected to reach $400 billion by 2020, domestic production is only projected to account for $100 billion if it continues at the current pace. “Given the right impetus, the scale and the unique requirements of the Indian market will make it very attractive for players to design and manufacture here,” noted Ajai Chowdhry, chairman HCL Infosystems.

In a bid to develop indigenous capabilities in electronics, the Indian government has recently instituted a policy that will grant preferential market access in government procurement to electronic goods manufactured in India. With large pan-India government projects such as the national optical fibre network, the national knowledge network and e-governance programs in the works, this move would open up huge opportunities for domestic production.

Decisions regarding the opening of a semiconductor fabrication plant are also expected to be finalized by the end of the year. Sachin Pilot, minister of state for communications and information technology, said that the earlier government attempts to set up such a facility did not yield the desired result. “We are more flexible this time round and are ready to meet halfway. We have decided that we will get it done,” he noted. R. Chandrashekar, secretary of the department of IT and department of telecommunications added that “significant progress has been made and we are in serious discussion with a few players.”

One of the key concerns of the industry has been that there is not enough value addition and enough intellectual property creation in the country. The preferential market access policy stipulates that there must be 25% to 40% value addition. “This means that the [intellectual property] must be in India,” Chowdhry said. “This will give the confidence to industry players to make the necessary investments. I see it as a breakthrough and transformative step.”

Similarly, the setting up of a fabrication plant is seen as an important piece of the electronics manufacturing ecosystem. ”It has to be seen in the larger context,” according to Rajendra Kumar Khare, chairman and managing director of SureWaves, a Bangalore-based company that is creating an integrated grid for multiple forms of digital media. “India has tremendous design capabilities and most global [original equipment manufacturers] have strong design centers in India. Having a [fabrication facility] will go a long way in strengthening the entire [electronics system design and manufacturing] ecosystem in the country. This, in turn, will enable India to capture a larger pie of the domestic and global market.”

With the February 1 announcement of its mammoth public offering, Facebook is basking in the limelight. The $1 billion (in annual revenue) Silicon Valley darling, along with LinkedIn, GroupOn and Twitter, is yet another reminder of the dramatic impact that the social, mobile and cloud revolutions are having on customer communications and shareholder interest. Is it time for boards, and their directors, to reinvent themselves to keep pace? Yes, according to this opinion piece by

Let’s start with today’s reality. The world has changed but corporate boards haven’t kept pace. How do you know? Ask most boards what they monitor and measure at their organizations. There’s a big chance that most of them will say they are monitoring and measuring financial results, compliance and legal risks. Then ask them if they monitor and measure the impact of new technologies on their operations, including the social communications between their customers, employees and shareholders, and the answer will most likely be no. And finally, ask them if they know what the risks and costs are of not using these technologies to communicate and collaborate with stakeholders, or having the insight they provide. Once again, the answer will often be no.

What’s surprising about such responses is that boards know that solid decision-making is essential to mitigating risks and ensuring the viability of their enterprises. How is it, then, that most of them don’t have a grip on the operational value these technologies offer, or the critical “big data” — about customer sentiment, employee engagement and investor insights — that they produce? The answer: They’re still using corporate governance tools and strategies that were developed in an age that was neither social nor mobile, or ever considered that the “cloud” would exist.

In short, today’s corporate directors have the “necessary” skills in terms of compliance and financial performance, but not the “sufficient” skills in terms of strategic or technological know how. Why? Because for years, astute corporate directors believed the tools that companies like Facebook and Twitter offered weren’t essential. In their view, these new means of communications were for kids, had little, if any, business value, and created minimal strategic, operational or financial risks. Wow, were they wrong.

Now maybe you are part of the majority of board members who don’t use social media. Maybe you believe your board and organization don’t need new skills taking new technologies into account because they don’t apply to your industry. Or maybe you believe your customers, employees and shareholders aren’t social or aren’t mobile. Think again.

As you read this, there is a good chance your customers and employees are sharing their knowledge about your organization and its products, services, research and culture with customers and employees at other companies. If you don’t believe me, check out employee feedback on Glassdoor.com or Amazon’s online price comparison tool. And remember that the corporate directors of Kodak, Blockbuster and Borders also possessed the necessary, but insufficient, skills to compete in a social and connected world. Further, ask them how their lack of digital technologies expertise impacted them.

The good news is that if you are among the majority of corporate leaders and think you are ill equipped to deal with today’s technology realities — as various recent surveys suggests — it’s not too late to reinvent corporate governance and your board. If you don’t want to go the way of Borders and the like, you and your fellow corporate directors have the chance to update your skills and build a high-performance board. But to accomplish this goal, corporate directors need to add deep technology and strategy knowledge to existing Sarbanes Oxley and financial reporting expertise. To get started, below are seven steps you and your board can follow to get a handle on today’s enterprise risks.

 To read the rest of Barry Libert’s opinion piece, visit this link: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2940

The video, made by the GRASP Laboratory at the University of Pennsylvania, shows researchers testing the small flying robots, and the results of this basic research could help improve human systems, such as air traffic control. Another idea for this technology is to use “small aircraft that can carry personalized payloads — drugs, biomedical products — to rural and undeveloped neighborhoods…,” says, principal investigator Vijay Kumar, a professor of mechanical engineering and computer information science at Penn.

The research group is drawing lessons in movement from flocks of birds, swarming insects and schools of fish, which might also help uncover patterns useful for crowd studies —  the design of “exits and hallways to ensure speedy evacuation in an emergency,” Kumar says.

Compared with, say, drones, which are large, pilotless aircraft, each of which requires a dedicated ground crew of five to 10 people, Kumar’s group is developing tiny, “highly maneuverable flying machines inspired by nature. They are autonomous and fly in groups. Only one person is needed to command large groups….” Many vehicles can be deployed in a swarm “to carry out a simple task — in this case, to form 3-D patterns — and to respond as a group to high-level commands — without a designated leader,” Kumar says. The innovations achieved have led to “new algorithms, novel vehicles, and a new paradigm.”

Kumar worked on the GRASP project with Alex Kushleyev, who holds a Master’s degree in electrical and systems engineering from Penn, and Daniel Mellinger, who will complete his Ph. D. in mechanical engineering and applied mechanics this spring. Penn’s GRASP Laboratory — the General Robotics, Automation, Sensing and Perception Laboratory — integrates computer science, electrical engineering and mechanical engineering.

Already some of the lessons learned are moving from the lab to the workbench. Mellinger and Kushleyev have created a spinoff from the GRASP Laboratory – KMel Robotics — which develops robotic platforms for use in search and rescue, environmental monitoring and education.

Blankfein is not the most obvious spokesperson for such a campaign. As an article in The New York Times points out, he has been “a lightning rod for Wall Street critics” taking aim at exorbitant executive pay packages and the role Goldman Sachs and other investment banks played leading up to the financial crisis.

The video featuring Blankfein is one in a series of spots using celebrities and politicians, and Blankfein is the first CEO to appear in them. The video was posted by the Human Rights Campaign last week — only days before a federal appeals court overturned California’s ban on gay marriage, laying the groundwork for a likely Supreme Court battle over the issue.

Blankfein’s move may have surprised many simply because Wall Street is not known for being progressive. But the Times article points out that his participation in the campaign did not come out of the blue: During his tenure, the company began reimbursing workers for additional taxes on domestic partner benefits and instituted health care coverage for gender reassignment surgery. And last year, the article notes, Blankfein signed a letter sent to legislators in support of same-sex marriage.

Given that context, the video seems less like a publicity stunt and more like an authentic statement. Yet many observers are wondering what effect Blankfein’s participation in the series could have on his public-relations embattled firm. Some — like Paul A. Argenti, a professor at the Tuck School of Business at Dartmouth who was interviewed for the Times article — predict there will be very little impact beyond a boost to those Goldman employees who identify personally with the issue of marriage equality. For the wider public, though, it’s a simple mismatch between the spokesperson and the issue at hand. “If Mr. Blankfein was taking a radical stand on pay you could say wow, that’s big. But equality is simply not an issue you associate with Goldman.”

But others say that Blankfein’s participation in the video series could ultimately have a positive ripple effect for the firm. Through the media and other “social processes, people develop categories about what characteristics are most representative of a given group or entity,” Wharton management professor Jennifer Mueller notes. “Prior to [the financial crisis], people most certainly associated Goldman with words like ‘brilliant,’ ‘leader’ and ‘conservative.’ But post 2008, they may have also built negative associations with Goldman, including ‘self-interest,’ ‘duplicity’ and a general disregard for social welfare.”

Blankfein’s endorsement of same-sex marriage may come as a great surprise, Mueller notes, “in part because it goes against Goldman’s reputation for being conservative, but also because it goes against Goldman’s reputation for being self-interested –  especially given the potential ‘reputational cost.’ So I view this as a smart move for Goldman that may actually allow for a net reputational gain.”

Addressing an audience at the Plug and Play Tech Center, a well-known Silicon Valley incubator run by Iranian-born Saeed Amidi, Hamod said such members of the Arab Diaspora could provide the experience and skills needed to jump-start innovation in Arab economies. “For the Arab world to make the transition from hydrocarbon-based economies to knowledge-based economies, the next big thing, in a sense, is innovation,” Hamod noted. “Innovation, hand-in-hand with entrepreneurship, will create those productive jobs that are so vital to growth in the Arab world.

“There is a special role to be played in this process by Diaspora Arabs, who have made it in Silicon Valley, who have learned the lessons of Silicon Valley and who are uniquely situated to share those lessons with the Arab world,” he added.

Hamod spoke at a global forum examining ways to harness the economic potential of the Middle East and North Africa (MENA) region in the aftermath of the Arab Spring revolution. At a time of uncertainty as well as promise, Arab-Americans are looking inward to discover their role in helping usher in democracy and economic stability in their traditional homelands. He told forum attendees that technology alone is only part of the equation. “If the Arab Spring at its heart is about dignity, respect, having a voice, reducing economic disparities and being able to put bread on the table for one’s family, then there’s no time to lose in promoting innovation through entrepreneurial ecosystems,” he said.

Throughout the day, some of Silicon Valley’s leading Arab-American technologists reiterated Hamod’s applause-inducing speech by creating an atmosphere that resembled a high school pep rally. There were discussions about cultivating the start-up ecosystem in the Gulf region and perhaps most important, getting access to venture capital. It is that final hurdle that deserves a watchful eye in the coming months as the grassroots revolutions turn to the formation of new governance, observers said. Political resolution might encourage the citizenry to return its attention to the daily duty of work. Hamod predicted that there will be no return to the status quo, but where that leads the region is anyone’s guess.

The forum was held on Martin Luther King Jr. Day, and Hamod found a parallel between King’s fight for freedom in the 1960s and the protests in the Arab world that have broken the stranglehold of entrenched regimes. He quoted from a portion of King’s famous 1957 speech delivered at the Prayer Pilgrimage for Freedom in Washington D.C.: “Sometimes it gets hard, but it is always difficult to get out of Egypt. The Red Sea always stands before you in discouraging dimensions. And even after you cross the Red Sea, you have to move through a wilderness with prodigious hilltops of evil, gigantic mountains of opposition. But I say to you, keep moving. Let nothing slow you up. Move on with dignity and honor and respectability.”

King’s speech was meant for an African-American constituency. But it sounds less ethereal to modern Arabs, especially those who risked their lives in Tahrir Square protests one year ago, and for those who continue to grapple with how to move forward after creating unprecedented change.

See also:

From Iran to Silicon Valley, a Serial Entrepreneur Leaves His Mark

Aramex’s Fadi Ghandour: Unrest Demonstrates Why It Is Important for Arab Entrepreneurs to Build New Ventures

Marketing professor David Reibstein describes the ads as “less creative this year than in previous years. It also seemed to me there was a huge increase in the use of celebrities — Elton John, Beyoncé, Jerry Seinfeld, Jay Leno, etc. [Advertisers] may have been scared off by the negative reactions last year to the Groupon ads and some others.” Groupon’s Super Bowl XLV ad was criticized by some viewers when it pretended to talk about social issues — in one case, the crisis in Tibet — when it was instead promoting Groupon deals. Reibstein notes that animals (mainly dogs), kids and sexy bodies were also used extensively this year, and that automobile ads were another popular category “because of the value of gaining a customer.”

His favorite ads include:

• “The Chevy ad called ‘Happy Grad,’ with the yellow convertible out front that the kid thought he was getting for graduation. Hysterical.
• The VW ad with the dog that goes on a diet.  Left me wondering forever what it was an ad for. Great execution.
• The Dorito ad with the old lady flinging the baby to snatch the bag of Doritos was great as well.”

For Wharton operations and information management professor Kartik Hosanagar, favorites included: The Acura commercial with Seinfeld — “a treat for Seinfeld fans; there was a storyline; it was funny and the short version of the ad worked quite well too” — and Budweiser’s End of Prohibition commercial:” Cinema lovers will love the cinematic feel to this ad. The entire look was unlike that for a typical beer commercial…. I like how they approached it with a different mindset.”

Hosanagar’s least favorite was the America’s Got Talent ad with Howard Stern. “I just didn’t get it,” he says.

Wharton marketing professor Eric Bradlow says that he was struck by two ads in particular. The first was the Dorito’s bribery ad. ”I thought it did a great job of being comedic, but also talked about the essence of the brand as being impulsive, ‘addictive in a good way,’ and a must have,” he says, adding that the commercial was also “tightly linked to the brand essence and hence made a lot of sense.” The most disappointing ads, Bradlow says, were the Coke ads with the polar bear. “They seemed like ‘been there, done that,’ and there were too many of them. This is a classic situation of ‘ad wear out’ because the ads all seemed too similar to each other.”

For Wharton marketing professor Stephen Hoch, “My only comment is that many of the ads had what looked like very expensive production value. This means that either the advertisers really went over the top on ad spending, or computer animation makes it cheap to look over the top.”

Meanwhile, the results of the second annual Wharton Future of Advertising Super Bowl Ad “Tweet Meet” are in, and the winning companies include Chrysler, Acura, Kia, Doritos and GE. The Tweet Meet featured a panel of experts and pundits that included Wharton marketing faculty, advertising executives, students and journalists, all of whom tweeted during the Super Bowl about commercials that “amused, disappointed or otherwise provoked them.” For complete results, click here.

And finally, “proving again the appeal of chatting online while watching TV, the tense end of Super Bowl XLVI on Sunday night set a new record for simultaneous Twitter messages,” according to an article in The New York Times. As the game was winding down, “Twitter counted 12,233 posts per second, the most for any English language event in the six-year history of the social-networking service,” the article noted, adding that Madonna’s halftime performance inspired 10,245 posts per second.

The companies in affected include Uninor (22 licenses), Videocon (21), Loop Telecom (21), Sistema (21), Etisalat DB (15), Idea Cellular (13), S Tel (6), and Tata Teleservices (3). Uninor is a joint venture between realty firm Unitech and Telenor of Norway, Sistema Shyam TeleServices (SSTL) is a joint venture between Shyam Telecom and Sistema of Russia. Etisalat DB is a joint venture between DB Realty and Etisalat of the United Arab Emirates.

The Supreme Court noted in its decision that the original license holders have sold at very high prices. This implies the license fee was too low, leading to the loss to the exchequer. Swan Telecom (now Etisalat DB Telecom) paid a license fee around $350 million. It offloaded around 45% equity in favor of Etisalat for over $700 million, a move that values the company — which, at the time of the transaction, was nothing more than the license — at $1.55 billion. Unitech, which had paid a similar amount for its license, brought in Telenor of Norway as a 60% equity holder by issuing fresh shares of $1.2 billion. The valuation of the company jumped to $2 billion.

The affected companies are planning to fight the court’s decision. “We have been penalized for faults the court has found in the government process,” Uninor officials said in a statement. A statement from SSTL noted that “being a law-abiding organization, [Sistema] reserves the right to protect its interests by using all available judicial remedies.” Etisalat, too, has been talking about its “right to a review of the Supreme Court’s decision”.

The telecom trio is moving into top gear to lobby for its cause and influence public opinion. Some media outlets have noted that the decision could create significant implications for India as a whole. “[The Supreme Court ruling] is likely to impact around 10,000 jobs in the telecom sector,” The Times of India reported. Adds The Economic Times: “The Supreme Court ruling on the 2G scam [is] unfair and a setback to India’s image.”

According to newsmagazine India Today, the Norwegian government has stepped in to bail out Telenor, noting that the country “is likely to invoke clauses from the India-Norway Bilateral Investment Treaty (BIT) to protect Telenor’s investments in India.” Telenor officials said the firm has invested nearly $3 billion in equity and corporate guarantees for the telecom joint venture. Sistema-Shyam says its outlay so far has been $2.5 billion.

Media reports also claim that the ruling will impact foreign direct investment in India. But there are two sides to that coin: When the recent Supreme Court verdict in the Vodafone tax case went in favor of the U.K.-based telecom major, the decision was hailed by some in the West as a triumph for the rule of law in India. The same Supreme Court has now struck a blow against corruption, but that ruling is being held up as potentially unfriendly to foreign investors.

Following the Supreme Court’s decision, the government has asked the Telecom Regulatory Authority of India (TRAI) to make its recommendations on the license issue. Though it has four months to do this, TRAI has indicated that it prefers the auction route. Based on amounts received for the 3G auction, back-of-the-envelope calculations show that the license — essentially the spectrum — will have a base price of $2 billion. (There are some procedural complications here as the country may be moving to a regime in which the license is de-linked from the spectrum allocation. The license will have a fixed fee, while the spectrum will be auctioned.)

The companies that have been stripped off their licenses by the Supreme Court can participate in this action. But those firms will probably have to pay $2 billion-plus instead of the $350 million they spent the first time, a prospect that many will likely find unattractive.

The following opinion piece was written by Wharton marketing professor Peter Fader.

In the wake of Amazon’s disappointing Q4 results, the Kindle Fire has ignited a veritable firestorm of debate. 

Lackluster reviews and suspicions that the tablet device is being sold below cost have led analysts to anxiously eye the company’s dwindling cash reserves.  But amidst the heated debates about functionality and pricing, one concern has received relatively little attention: Should Amazon be competing in the tablet market in the first place?

From my perspective, the Kindle Fire represents a dispiriting move away from Amazon’s historical focus on customer centricity.  In my book Wharton Executive Education Customer Centricity Essentials: What It Is, What It Isn’t, and Why It Matters, I argue that a customer-centric strategy aligns a company’s development and delivery of its products and services around the needs of a select set of customers in order to maximize their long-term financial value to the firm. 

This emphasis on a “select set” of customers is crucial.  Customer-centric firms never talk about “the customer” — because there is no average customer.  These firms recognize that there is a diverse ecosystem of consumers out there of all colors, shapes, sizes — and, most importantly, different lifetime values to the firm.  Customer-centric firms celebrate the heterogeneity of their customer bases and focus their efforts on those subsets that are likely to provide the greatest bang for the buck over the long term.

In many ways, Amazon has set the standard for customer-centric activities.  The company maintains detailed customer-level data, which it uses to tailor its marketing communications and make customized product recommendations.  When I ask my Wharton MBA students to name companies that are truly customer-centric, Amazon is always near the top of the list.

And for the original Kindle Reader, this “select set” of focal customers was clearly defined.  Back in 2010, Jeff Bezos went on record saying that the Kindle was for “serious readers.”  He elaborated by pointing out that “90% of households are not serious reading households.”

By focusing squarely on serious readers, the Kindle carved out a tremendously valuable market niche.  Its simple interface and innovative screen technology provided a top-notch reading experience for those who still care to read books.  It was a strategy focusing on creating delight for a particularly profitable customer segment.  The many other “non-serious readers” who also bought it were just icing on the cake.  I often pointed to this specific example as a great case study of genuine customer centricity in action.

Yet here we are today, watching Amazon dismantle this wonderful exemplar.  It’s understandable that Amazon wanted to leverage the success of its Kindle to gain a toehold with the broader market.  Understandable — but deeply misguided.  By trying to make hay from the current tablet frenzy, Amazon has strayed from its customer-centric roots towards a more conventional product-centric mindset.  The question they seem to be asking themselves now is, what can we make — and who can we sell it to?

The problem in this case isn’t a lack of demand for the product. Indeed, even as profits sagged and Amazon burned through its cash, the company sold an estimated six million Kindle Fires in the fourth quarter alone.  So what’s wrong with this strategy?

First, it consumes scarce resources and valuable management attention.  While Amazon executives are busy fixing glitches in the Kindle Fire, they could have been focusing on how to acquire profitable new “serious readers,” retain the ones they already have within the Kindle franchise and use the Kindle platform to extract the maximum value from existing customers through cross-selling, upselling and other customer development activities.

Second, by branding the Fire under the Kindle umbrella, Amazon risks confusing and alienating its focal customers.  Now that the premier product in the Kindle line no longer offers the unique reading experience that was associated with its original e-reader, the entire value proposition of the Kindle franchise isn’t so clear any more.  Amazon should have used a distinctly different name for the Fire so that serious readers would still proudly use their Kindles with the knowledge that they were still held in special regard by the firm.

So what can Amazon do to right this mess?  The script seems to dictate that sooner or later, the Kindle Fire will be yanked from the market once it proves to be too much of a drag on Amazon’s earnings and resources.  At that point, Jeff Bezos should focus on developing an enhanced version of the original Kindle and reassure its most valuable customers that Amazon is continuing to develop new devices and services with them in mind.  In other words, Amazon should scrap the Fire and hold on to the glowing embers: that focal core of deeply profitable customers who represent the firm’s ongoing source of competitive advantage.

First of all, it’s unclear whether Facebook can grow into its estimated valuation of roughly $75 billion to $100 billion, says Luke Taylor, a Wharton finance professor.

On the surface, Facebook, which will trade under the ticker FB, looks like a juggernaut. The company has 845 million monthly active users, who contribute 250 million photo uploads and 2.7 billion comments a day. The company’s financial picture also looks good. For the year ended December 31, Facebook reported net income of $1 billion on revenues of $3.71 billion. In 2010, the firm saw net income of $606 million on revenues of $1.97 billion.

It’s not certain when Facebook will actually go public, but press reports estimate that late April or May is a likely target. Taylor notes that Facebook’s debut prospects will largely depend on how the Nasdaq trades and other market conditions. (The Nasdaq index is often viewed as a proxy for the tech industry.) How will the company’s shares trade ultimately? Facebook is likely to capture the imagination of retail investors, but so-called “smart investors” may pare back demand. “It’s not automatically true that Facebook will soar,” Taylor points out.

What will Facebook’s long-term profits look like? According to Taylor, companies often show strong profits heading into an IPO, but then they drop afterward. He adds that there is a lot of debate about whether the profit drop is related to less innovation or just the higher expenses that come with being a public company. In its IPO prospectus, Facebook cites Sarbanes-Oxley compliance costs as a potential profit margin hit.

Another pitfall would be what Taylor calls “short-termism.” Managers of newly public companies “often become myopic and focus on short-term numbers. That’s a risk of going public.” In a previous Knowledge@Wharton story about Facebook’s future on the open market, Wharton management professor Lawrence Hrebiniak cited a similar risk. “The challenge for Facebook will be to keep top executives focused on strategy and not regulation.”

In a letter to potential shareholders, CEO Mark Zuckerberg noted that “Facebook was not originally founded to be a company. We’ve always cared primarily about our social mission, the services we’re building and the people who use them. This is a different approach for a public company to take.”

Lastly, the company may feel the effects of management turnover, as some managers cash out and the leadership team looks to hire seasoned executives to help steer the company while it matures. “Facebook’s IPO will be a massive liquidity event for thousands of employees,” Wharton legal studies and business ethics professor Kevin Werbach said in the Knowledge@Wharton article. “Many of them have already monetized at least some of their stock options through private secondary market activity, but the IPO will still be a massive wealth transfer. It’s difficult to retain employees who have already made millions of dollars on their stock options.”