Focus On: Michael Useem

For Expatriates in the Gulf, Ignoring Ramadan Customs Could Spell Trouble

Posted on August 1, 2011

As Muslims around the world begin observing the month of Ramadan, non-Muslim visitors and expatriates in Gulf countries are being asked to take heed of Islamic customs to avoid problems with local authorities.

Although abstinence from food, drink, smoking and intimate relations during the day are required of observant Muslims during Ramadan, non-Muslims are also expected to follow the same rules while in public in Gulf countries.

In Dubai, the glitzy sheikhdom of the United Arab Emirates (UAE), one language school is offering a free “Ramadan etiquette” course to non-Muslim expatriates, while a number of local newspapers have published etiquette guides, and do’s and don’ts lists. Some Western embassies have also released advisories on proper public behavior.

Though offered in the vein of broadening cultural understanding, these advisories also serve as guidelines for self-preservation. Breaking these rules in some Muslim countries, notes an advisory on Ramadan from the British Foreign Office, could result in arrest. Just this past month, a British expatriate was fined $US800 by the Dubai Court of Misdemeanors for insulting Ramadan on her Facebook page.

Even Dubai, considered the most Westernized city in the Arab world, said it would police the behavior of non-Muslims living there. For a first infraction, an expatriate would receive a warning if caught by police. Subsequent infractions, according to Dubai police, could result in arrest and a fine of up to US$550.

Dubai’s chief of police, Lieutenant General Dahi Khalfan Tamim, told Arabian Business, “We train our officers how to deal with different nationalities and to respect non-Muslims who may inadvertently offend Muslims during Ramadan by eating, drinking or smoking in public places during the day…. They are to deal with it in a courteous way so that [non-Muslims] would refrain from doing it again.”

International companies have learned it is good business to adhere to Ramadan. A number of brands offer Islamic-themed advertisements and Ramadan messages to customers throughout the Gulf. In addition, it is now common practice for companies to hold corporate “iftaars” (the meal Muslims take at sunset to break their fasts) as a means of socializing and deal-making.

Doing business globally often requires companies to conform to different cultural and governmental systems, but many of those challenges are ultimately outweighed by the benefits of operating within those nations, Wharton management professor Michael Useem told Arabic Knowledge@Wharton for a 2010 story about clashes between BlackBerry maker Research in Motion and governments in the Middle East over demands to monitor the company’s e-mail service. “It’s a little bit like operating in cities like Bangalore, where the power goes [out] for three hours a day,” Useem noted. “It’s a royal pain in the backside, but you still create your operation there. It’s one more challenge there of doing business.”

For long-time expatriates in the Gulf, the strict rules related to Ramadan come as little surprise. Though the oil-rich Gulf countries, with the exception of Saudi Arabia, tend to be the most hospitable to Western expatriates in the region, there has been an increased demand in recent years from the native Arab populace to protect cultural norms.

Partly fueled by locals feeling inundated by expatriates — foreigners make up nearly 90% of Dubai’s population, for instance — there have been a number of recent cases where Western expatriates have run afoul of local customs and laws, and have been jailed and deported.

In 2008, two British expatriates became infamous for being caught having drunken sex on the beach in Dubai, and were jailed and deported. Another Briton was jailed in Dubai for two months last November, and then deported, for giving the finger to an airport worker. And in 2007, a famous British DJ was sentenced to four years in prison after he was found to have 2.16 grams of cannabis in his possession. Due to these and other high-profile cases, the British Embassy said in 2009 that Britons were more likely to be arrested in the UAE than anywhere else in the world.

Featured Professors:
Posted in Knowledge@Wharton Today, Law and Public Policy | Tagged , , , , , , | Leave a comment

Dispatches from Disrupt

Posted on May 26, 2011

Knowledge@Wharton spent Wednesday at TechCrunch‘s Disrupt conference at Pier 94 in New York. From presenters to attendees, the message for the tech industry was about relentless creation and recreation with the ultimate goal of claiming 1999-era riches — while avoiding the glitches that led to the bursting of the dot-com bubble.

TechCrunch's Michael Arrington and Google's Marissa Mayer at the TechCrunch Disrupt conference in New York on Wednesday.

Among the highlights:

– At Disrupt, the term “pivot,” defined as revisiting a business model to better attract interest from venture capitalists, was used almost as often as “total solution” was in 1999. Paul Graham, co-founder of incubator Y Combinator, invited hopeful start-up companies to the stage to give him their elevator pitch. Wearing shorts and a polo shirt, Graham showed genuine enthusiasm for a few of the ventures. He suggested to others, notably those in the business-to-business space, that they “pivot.” But getting feedback to “pivot” was definitely preferable to the advice he gave another company: “Start Over.” Graham also talked during the conference about the four things he looks for in a start-up: determination, flexibility, imagination and “naughtiness,” or a willingness to “do stuff that’s held together by duct tape.” (For tips on developing a strong start-up leadership team, check out this past Knowledge@Wharton interview with Wharton management professor Michael Useem.)

– An unscheduled moment came when Om Malik, founder of the tech news site GigaOM, appeared on the big movie screens hung from the hangar-like rafters of Pier 94. Interviewed via streaming video, he confirmed that he had that morning received another $6 million in VC funding, which comes on top of $8 million raised from five prior rounds. Asked why GigaOM, considered the most heavily funded online news venture, took VC money while TechCrunch, which AOL purchased for $40 million last fall, never did, Malik said while the sites are complementary, GigaOM is turning its focus toward paid content. He would not comment on rumors that GigaOM’s valuation is actually higher than TechCrunch’s was pre-purchase. He added that the money would be used to build infrastructure for his GigaOM Pro research division. (For more from Knowledge@Wharton on the paid vs. free content debate, click here.)

– David Letterman once said Hollywood is like high school with millionaires. If that’s true, then Silicon Valley is like high school with billionaires. The small-town atmosphere filled Pier 94, particularly when TechCrunch founder and co-editor Michael Arrington interviewed hybrid investor/tech executives Keith Rabois and Marissa Mayer. Rabois, famous for helping launch PayPal, and one of the first investors in YouTube and LinkedIn, said he made 45 investments last year, but was now solely focused on his latest venture, Square, where he is chief operating officer. Square allows users to process credit card payments using a smartphone or tablet. Rabois said Square — which he thinks has a “95% chance” of eventually becoming more valuable than PayPal — is targeted at small merchants who want to conduct business quickly without having to purchase expensive credit card machines. (For more on whether U.S. consumers are willing to trade in their plastic, see this past Knowledge@Wharton story.)

Meanwhile, Mayer, hired in 1999 as Google’s first female engineer and now the search giant’s vice president of location and local services, has invested in Square while also shepherding the many Google properties under her purview, including Google Places, Google Local, Google Latitude and Google Maps. While she wouldn’t reveal the percentage of total searches conducted via mobile, Mayer discussed a new search concept that offers information to users based on their movements in daily life. “Can we do a search without someone doing a search?” she asked. “From your context, where you’ve been, what you’ve been doing, can we give you just the right piece of information?”

Featured Professors:
Posted in Innovation and Entrepreneurship, Managing Technology | Tagged , , , , , , | Leave a comment

Re-thinking Risk at Davos

Posted on January 25, 2011

World Economic Forum logoBusiness and political leaders from around the world have begun to gather, as they do at the end of January each year, in the ski resort of Davos, Switzerland, for the annual meeting of the World Economic Forum (WEF). This year’s symposium, which begins tomorrow, features more than 30 heads of state, some 1,400 CEOs and senior executives, and at least eight heads of central banks. In preparation for the talks that will follow over the next few days, the WEF has released a series of reports dealing with issues ranging from global competitiveness to the future of the world financial system. While these don’t necessarily make for lively reading, people pay close attention to them because they contain a wealth of data coupled with high-caliber analysis.

One of the most closely watched reports is Global Risks 2011, which, as its name indicates, identifies the most critical risks the world faces. Four partners collaborated with the WEF in preparing it: Wharton’s Center for Risk Management, Marsh & McLennan Companies, Swiss Reinsurance and Zurich Financial Services. According to WEF founder Klaus Schwab, the report aims to “enhance understanding of how a comprehensive set of global risks are evolving, how their interaction impacts a variety of stakeholders, and what tradeoffs are involved in managing them.”

This year’s report, the sixth in a series, identifies 37 key risks – one more than last year. Two of these – increasing economic disparity and global governance failures — are described as “cross-cutting global risks” because of their “high impact and interconnectedness.” In addition, the report names three clusters of emerging risks: the so-called “macroeconomic imbalances nexus,” which refers to risks such as currency volatility, fiscal crises and asset price collapses; the “illegal economy nexus,” which deals with the growth of organized crime, corruption and illicit trade; and the “water-food-energy nexus,” which results from the pressure on resources imposed by the rising global population. The report also designates five “risks to watch” that could have sudden, severe and unexpected consequences. These include cyber security, demographic challenges, resource security, retrenchment from globalization, and weapons of mass destruction.

This is just a quick summary. In a future edition, Knowledge@Wharton will provide more details from the risk report and as well as other insights from Davos as reported by Michael Useem, director of Wharton’s Center for Leadership and Change Management. Stay tuned.

Featured Professors:
Posted in Knowledge@Wharton Today | Tagged , , | Leave a comment

With Jobs on Medical Leave, What’s Next for Apple?

Posted on January 18, 2011

A shudder ran through the world’s stock markets on Monday when the news broke that Apple’s board had agreed to let Steve Jobs take open-ended medical leave. Though U.S. markets were closed because of Martin Luther King Jr. Day, the company’s shares fell more than 8% in Germany, wiping out $22 billion in market capitalization, according to one estimate. Over the next few days, Apple’s shares could fall further, as speculation swirls about the company’s prospects without Jobs at the helm.

This situation is reminiscent of January 2009, when Jobs went on medical leave for six months to receive a liver transplant as part of his treatment for a rare form of pancreatic cancer. Back then, Apple’s share prices fell more than 10%, and then recovered gradually when Jobs returned. Today, Apple’s market cap is nearly $320 billion – so the stakes are much higher for the company’s investors, employees and customers.

The critical challenge for Apple remains succession planning, as several Wharton professors noted back in 2009.  According to Michael Useem, director of Wharton’s Center for Leadership and Change Management, selecting a successor for Jobs has been challenging because “there are few companies where the top person has as much of an impact [as Jobs has had] at Apple.” Still, according to Peter Cappelli, director of Wharton’s Center for Human Resources, it is unlikely that Apple will fall apart without Jobs. “Investors get worried if they think the future of an entire company depends on a couple of key individuals. In fact, that is almost never the case. This bias — attributing the success of organizations to individuals — is pretty common. Several studies have looked to see what happens when CEOs … die unexpectedly. All the studies show that, rather than collapsing, share prices in fact actually go up. The current leaders are not that crucial. Companies don’t collapse when the leader departs, and there is some time to fill the job.”

Though Jobs is identified incredibly closely with Apple and its brand, the company does have other strong leaders. These include COO Tim Cook, who will take over day-to-day operations, and Phillip Schiller, who oversees marketing. Schiller substituted for Jobs as the keynote speaker at Macworld two years ago. With any luck, these executives and their teams will be able to steer Apple while Jobs is away.

Meanwhile, Knowledge@Wharton has this message for Jobs: We wish you a speedy recovery.

Featured Professors: ,
Posted in Knowledge@Wharton Today, Leadership and Change | Tagged , , , | Leave a comment