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April 2010
 

In this edition of the Knowledge newsletter, we talk to INSEAD Professor Soumitra Dutta about the latest rankings in the Networked Readiness Index. Horacio Falcao tells us about value negotiations and we find out from Lily Fang that, when it comes to the stock market, a lack of media coverage or 'genuine news' may mean higher returns.

Henrich Greve tells us how, when one company gets embroiled in a scandal, contagion can spread to other firms in the same sector, even though they haven't done anything wrong. Also, Theo Vermaelen and Urs Peyer give us an update on how their buyback strategy netted gains of 103 pct in the first year.

We meet Banco Sabadell CEO Josep Oliu in Barcelona, and we find out from Edward Tse of Booz & Co why it's not too late to enter the China market.

INSEAD Knowledge is now available in English, Chinese and Arabic. You can also access Knowledge via:

 

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Regards,
Stuart Pallister
Editor, INSEAD Knowledge

The answer is: look north - to Scandinavia. All four of those countries are in the top ten of The Networked Readiness Index 2009-2010, part of the Global Information Technology Report published by INSEAD and the World Economic Forum, now in its ninth edition.

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Negotiating to win

From the most mundane transaction to strategic high-level boardroom dealings, knowing how to negotiate is integral to success and survival. Yet few have mastered the art of successful negotiation or 'value negotiation' as INSEAD Affiliate Professor of Decision Sciences Horacio Falcao calls it.

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Investing in unknown stocks could yield higher returns

By betting on stocks that lack media coverage, investors may be doing themselves a favour, according to a new research paper co-authored by INSEAD Assistant Finance Professor Lily Hua Fang and Associate Professor of Finance Joel Peress.

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On the loss of legitimacy and contagion of scandals

One bad apple can spoil a whole barrel of the fruit, or so the traditional saying goes. It's a useful piece of advice when shopping for food. Some suspicious shoppers might not just shun apples if they find one or two on display are rotten, but avoid other fruit at the supermarket too. After all, if the shop can't be trusted to sell good apples, what does that tell you about the quality of its oranges? And what about other shops that sell fruit -- should they be shunned too?

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Buybacks are back: strategy pays off with returns of 103.5 per cent in first year

In April 2009, INSEAD Professors Theo Vermaelen and Urs Peyer published a list of 24 stocks on the INSEAD Knowledge website, which were chosen on the basis of their buyback strategy. In this update, they show how their strategy has generated returns of 103 per cent in the first year.

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Advice to direct marketers: let the people do the talking

The explosion of social networking sites has been a boon for direct marketers. For the hundreds of millions of users of Facebook, MySpace, YouTube and so on, they are fun ways to communicate with their friends and make more friends. But for marketers they are huge databases of consumer information.

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The current economic malaise has sent investors looking for new avenues of investment - not just for the financial returns but also to make a difference in the world at large. Enter the socially-responsible investment, a niche market that is now coming of age.

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CEO view: Josep Oliu, Banco Sabadell

Josep Oliu has been through three economic crises as a banker in Spain - two of them since becoming CEO of Banco Sabadell Group. The veteran banker spoke with INSEAD Knowledge recently at the Group's headquarters in Barcelona about the crisis and what we can learn from it.

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Microfinance comes of age

"Microfinance is banking, and banking is our core competence, so it makes sense for us to be active in this area," says Arthur Vayloyan, Head of Investment Services and Products, Private Banking, at Credit Suisse in Zurich.

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Measuring the effectiveness of corporate governance

Trust is the foundation of sustainable development, says Yilmaz Argüden. As the world continues to get smaller, our mutual interdependence increases and we all need to be able to mobilise the resources and goodwill of others to achieve success. That can only be achieved through gaining their trust. Therefore, the ability to gain the trust of global financial markets and of all the stakeholders in the value chain is becoming the key to success.

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Public policy 'necessary' to make low carbon economy a reality

When it comes to the notion of a sustainable low carbon economy, governments around the world may like the concept but are either reluctant or incapable of developing the means to make it reality, says Jonathon Porritt, founder director of Forum for the Future. It has to be done through the markets, through various instruments and market mechanisms - but the markets cannot do it unaided. It is public policy that will shape the markets, which in turn could deliver a low carbon future.

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A new sustainability playing field

In 2006, Brendan May, then managing director of Planet 2050, Weber Shandwick's corporate responsibility and sustainability practice, received an email message: "Hi. Can you look into getting some CSR - how much does it cost, what does it involve?"

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The power of true strategy

What do Google and Napoleon Bonaparte have in common? According to author Robert Greene, both are - or were - great strategists of their time. And because of that, both wielded enormous power and control, which made them formidable forces to contend with.

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Changing times, changing attitudes

After a decade of listening to consumers, many of whom were disabled, discuss their frustrations with the healthcare system in the US, Rick Surpin, founder and president of Independence Care Systems, saw that people with disabilities were treated as though they were 'invisible', just like their carers. They were viewed as having unusual problems that could not be easily addressed, and many of their basic needs were ignored.

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Is it too late to get into the China market?

Is it too late for multinationals to enter China right now? Not so, according to Edward Tse, Booz & Company's senior partner and chairman for Greater China.

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China's property bubble: is it starting to deflate?

As Beijing looks to curb 'excessive' gains in the property market, amid concerns about a real estate bubble in China, Bill Hunt, former president of Century 21 China Real Estate, remains sanguine that the bubble will not burst.

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Feb 2010 INSEAD Leadership Summit in the Middle East (special edition)
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