Mad About Madoff

Bernard Madoff, once a respected investment adviser, may have perpetrated one of the biggest financial scams in history at an estimated $50 billion loss to clients. But Madoff's roster of wealthy investors are not the only victims of this enormous "Ponzi scheme," warns H. Nejat Seyhun, the Jerome B. and Eilene M. York Professor of Business Administration at the Stephen M. Ross School of Business. Fallout from the scandal is likely to further weaken the economy as skittish investors lose more confidence in the market, says Seyhun. Meanwhile, as federal investigators detangle the scam, questions are emerging about the effectiveness of the Securities and Exchange Commission (SEC) and what the regulatory landscape should look like in the future. Seyhun lends his perspective in the following Q&A.

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Martin Zimmerman

Automakers Put the Pedal to the Metal

U.S. automakers worked hard to get a recent $17.4 billion loan from the Bush Administration, but now the real work begins, says Martin B. Zimmerman, the Ford Motor Co. Clinical Professor of Business Administration at the Stephen M. Ross School of Business. Automakers have no choice but to accelerate the pace toward a new business model in order to demonstrate they are financially viable by March 31, 2009, according to the government's terms. Fast-paced changes are required at nearly every level of the industry, from labor and manufacturing to suppliers and dealers. Zimmerman, former chief economist and group vice president at Ford, says President Bush was right to approve the loan – even after the Senate denied the bailout. And while some of the problems facing automakers are self-inflicted, Zimmerman argues in a new Q&A that the extraordinary global financial crisis is what pushed the companies to the brink of near extinction.

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Deck the Halls with Sales and Discounts

A slow economy coupled with a financial crisis makes for a bleak retail outlook heading into the 2008 holiday shopping season. But retailers aren't going down without a fight, and they have some weapons in their arsenal as they strive to post respectable numbers. Professors of Marketing Claes Fornell and Aradhna Krishna see retailers driving deeper discounts, working harder to keep regular customers, changing marketing strategies, and employing some creative promotions this holiday season. And while 2008 will be one of the slowest holiday sales seasons in years, the numbers might not be as bad as some predict.

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The Quiet Consolidation

Quietly and with little fanfare, the ownership of hundreds of public companies in the United States has moved from being dispersed among many players to being concentrated in the hands of a just a few. But it's not big banks that are dominating corporate ownership, as in the past. Instead it's mutual funds that hold almost 30 percent of U.S. corporate ownership today, compared with 8 percent in 1990, according to research by Professor of Management and Organizations Gerald Davis.

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