Abstract: Population Services International (PSI) is a leading global health organization with programs targeting malaria, child survival, HIV, reproductive health and non-communicable diseases.
Working in partnership with the public and private sectors, and harnessing market practices, PSI provides life-saving products, clinical services and behavior change communications that
empower the world’s most vulnerable populations to lead healthier lives. YouthAIDS is an education and prevention program of PSI that uses media, pop culture, music,
theater and sports to stop the spread of HIV/AIDS. YouthAIDS has reached over 600 million young people in more than 65 countries with life-saving messages, products, services and care.
Founded in 2001 by Kate Roberts, YouthAIDS grew out of her passion to make the world a better place. Operating as a fundraising and marketing mechanism for PSI’s youth-focused HIV/AIDS programs, YouthAIDS has long been a brand within a brand. This case discusses the formation of YouthAIDS, its model of combining private sector strategies with celebrity
involvement in a global health problem and the challenges and opportunities posed by the success of YouthAIDS to its parent organization, PSI. The study is divided into three parts;
questions for assignment and class discussion are proposed.

Key words: Cause-related marketing; NGO; leadership; social marketing; private sector; celebrity
engagement; value creation; health risks

Goals of the Case Study—This case has three main goals:1. Demonstrating how a cause-related marketing approach can help make an NGO
successful at creating sustainable value, attracting unrestricted funds, generating buzz
and focusing the spotlight on a cause.
2. Appreciating the challenges posed by the success of one entity or brand within an
organization to the future of the whole organization.
3. Examining an impactful personal journey.

The full case is available BY CLICKING HERE

What are the top 50 risks this year?

CLICK HERE TO WATCH FOR A RECENT INTERVIEW AT THE WEF HQ IN NEW YORK:

Access the interactive website: click here

Full report is accessible here: WEF_GlobalRisks_Report_2012

“After everything falls apart, the failures to act become obvious: Why didn’t somebody at Penn State do more to pursue allegations that former assistant football coach Jerry Sandusky was sexually abusing young boys? Didn’t anybody at MF Global Holdings notice that something was wrong before $1.2 billion in customer cash disappeared? Why, decade after decade, didn’t anyone at Olympus protest $1.7 billion in accounting irregularities?

“Why was there almost a conspiracy of silence?” John R. Kimberly, a Wharton management professor, asks of these scandals and others like them. “Why do we behave in ways that are inconsistent with our articulated beliefs?” He wonders why people with integrity behave differently within an organization than they would on their own.

In hindsight, especially to observers, it is clear what should have been done. Yet in case after case, companies overlook internal problems that at best impede performance, and at worst could bring down an entire organization.

Exposing such problems is more complicated than telling right from wrong, say experts at Wharton and elsewhere. Sometimes people within the organization can’t see the problem clearly — or if they do, they are afraid to voice it. Those who do speak up may be ignored or misunderstood. If one group within an organization is more powerful than another, it may escape careful scrutiny. And if leaders themselves cannot face taboo problems, it makes it harder for an organization to change.

People find many ways to distance themselves from the moral implications of their behavior, says Kristin Smith-Crowe, a management professor at the University of Utah’s David Eccles School of Business who studies ethics within organizations. Sometimes, people decide not to speak up about a problem by convincing themselves that it is someone else’s job to solve. Others rationalize their inaction by believing that the problem will resolve itself or nothing negative will result. “It’s not that they see it … [and] they just don’t care,” she notes. Instead, “they don’t necessarily see it” clearly or completely.

Compounding the problem further, people who do speak up may second-guess themselves if they get a negative reaction from leadership — a rebuke for disloyalty, questioning authority or causing problems, for example. “You start off trying to do the right thing, but the response you get is that you are doing something wrong,” Smith-Crowe notes. “People may get confused.”

‘Super-moral, Superhuman’

Problems that surface within an organization are rarely clear-cut, says Cristina Bicchieri, a philosophy professor at the University of Pennsylvania who also teaches in Wharton’s legal studies and business ethics department. “It’s very rare that you observe something that is really bad and somebody does it in front of you.” With limited information, people may question their own understanding of a problem. “You hesitate…. It’s normal,” she says. “You cannot ask people to be super-moral, superhuman. You have to work with what you have.”

Group dynamics also come into play, especially in small groups. “The cozier and the more close-knit the group, the less incentive you have to stir the waters,” she points out. “If you are strongly motivated by the sense of not wanting to ruin the group, you might form a false belief about what happened, especially if the situation is ambiguous.”

Group loyalty may also lead members to protect each other when things clearly go wrong. In her article, “Failures to Punish,” Wharton professor of legal studies and business ethics Amy Sepinwall tells of a U.S. army commander in Iraq who failed to report that troops under his command had thrown several Iraqi civilians off a bridge, killing one of them. When army investigators raised questions, the commander covered up details about the incident, seeming to place a higher priority on protecting his soldiers than making sure they were punished. “Loyalty is really important to us,” says Sepinwall. “It’s important for productivity, and just as a matter of virtue. And yet it has this very insidious side [that can] lead to overprotection.”

Sometimes, people simply don’t notice problems forming, says Erwann Michel-Kerjan, managing director of the Wharton Risk Management and Decision Process Center. Signs of trouble can be subtle and may not stand out on their own. For example, a chemical processing plant might receive a citation during an audit for a dirty floor, and another later for a truck driver who fails to wear a seatbelt. Taken alone, neither event raises alarms. Only after an explosion at the plant kills several workers do such “weak signals” become evidence that the company ignored safety standards. “After the fact, it’s always easy to go back in history and say, ‘You should have seen that.’”

Time, too, can be an issue. Silent witnesses may quit or retire, taking knowledge of a problem with them. Replacements may not understand the company well enough at first to realize that something is amiss. Scandals “don’t happen overnight,” Michel-Kerjan points out. “These risks are built over a long time.”

‘Is It Worth It?’

Even when the problem is clear, knowing how to bring it up may not be.

Secrets of some sort exist in nearly every organization, and it takes “incredible courage” to expose them, says Sue Thompson, a management consultant and executive coach in San Francisco who worked for 21 years as director of human resource development for Levi Strauss & Company. It’s especially difficult if the person causing problems holds power. “I may be willing to rat on someone who is my peer, but if it’s my boss or the peer of my boss, I’m probably going to weigh — is it worth it?”

Most people do not want to jeopardize their own position in the company, and are more likely to remain quiet if there is no safe place to air concerns. “In organizations where the HR [Human Resources] department or the legal department is effective, you can go to those places. But in many organizations, HR is not held in high esteem,” Thompson notes. “It’s a challenge, even if you want to surface something, to know where, who and how.”

Don Rossmore, a consultant in Los Angeles who has worked with companies such as MasterCard, Hewlett-Packard, Taco Bell, Apple and AIG to root out problems and improve performance, says it comes down to leadership. “When leaders do not want an issue discussed, it is not discussed,” he says. “When an issue is undiscussable, it cannot be managed rationally.” Rossmore has found that people who try to raise an “undiscussable” issue usually make one of two mistakes. Either they express blame or judgment, which increases stress and conflict, or they use ambiguous language, which enables people to avoid the problem.

In the Penn State scandal, assistant coach Mike McQueary testified that he never used the explicit terms “sodomy or anal sex” when reporting to then-football coach Joe Paterno an assault he allegedly witnessed in 2002. McQueary said he failed to be more explicit “out of respect” for Paterno. Paterno testified that he “didn’t push Mike to describe it because he was already upset,” and waited several days to tell his superiors. Former athletic director Tim Curley, now on trial for perjury along with former vice president of finance Gary Schultz, testified that he didn’t call police about the incident because he did not think it was a crime.

Penn State’s trustees fired Paterno and university president Graham Spanier in November after the university came under fire for how it handled the sex abuse allegations. Former defensive coordinator Sandusky has since been charged with more than 50 counts of child sexual abuse.

Speaking out about a difficult problem can be especially uncomfortable if it involves a group or individual held in high esteem. Penn State “deified” coach Paterno, says Scott Rosner, associate director of the Wharton Sports Business Initiative. Over the coach’s 45-year career, the football team’s success helped transform Penn State from an agricultural backwater to a nationally known university. Intercollegiate athletic departments usually generate between 4% to 5% of university revenues, Rosner notes. At Penn State, however, the athletic department took on an importance beyond the money it brought in. It came to operate in a “cocoon” with different standards and controls than the rest of the university, according to Rosner. “Theoretically, they were checked, but practically they were not…. They weren’t really answering to anybody.”

Fear of Taboos

The Penn State scandal seems to involve two conflicting taboos: damaging the Penn State football program and condoning child abuse, says Paul J.H. Schoemaker, research director of Wharton’s Mack Center for Technological Innovation. “It should be self-evident that protecting a boy from a sexual predator far outweighs protecting the school, and the more leaders seem confused about this, the more they would be deemed to have failed morally.”

Yet leaders often ignore signals they should heed because of unwillingness “to confront ‘repugnant’ ideas,” writes Schoemaker and co-author Philip E. Tetlock, a professor of management and psychology at Wharton and the University of Pennsylvania, in a forthcoming article in California Management Review titled, “Taboo Scenarios: How to Think About the Unthinkable.” “Fear can blind us,” they write. “It is often impossible for an organization to acknowledge the biggest risks it faces, including extinction or criminal indictments against multiple leaders.”

The key for leaders is to be very clear about which values rank highest and how conflicting taboos should be handled, Schoemaker says. “Without such moral guidance, those lower in the organization may be unsure what to do, even if it seems clear from the outside. The process of denial can be very subtle and afflict entire organizations or communities, and indeed even entire nations — for example, genocides in the former Yugoslavia or the internment of U.S. citizens of Japanese descent during World War II.”

Most experts agree that leaders must set the tone for the entire organization, work to elicit discussion about taboo topics and maintain transparency about how they respond to any concerns.

Companies should also establish metrics, routines, audits and incentives to help identify problems and suggest areas of change, says Wharton management professor Lawrence G. Hrebiniak, who has acted as a consultant to dozens of companies such as General Electric, AT&T, Microsoft and DuPont. When top management diligently works to measure performance, elicit feedback and respond openly to problems when raised, it can usually make progress, Hrebiniak has found. “Control systems are important to implementing strategy and identifying problems,” he says.

The caveat, of course, is that leaders need to pay attention to the facts. “In two cases, I’ve reported data to top management and they disinvited me from a strategic session,” Hrebiniak recalls. “Some of the problems that were identified seemed to suggest poor leadership from the top…. They didn’t want it to come out on their watch.”

When companies have a culture in which managers are “more interested in hiding things than solving problems,” there is little anyone can do to help, Hrebiniak says. “You need top management to react strongly. If they bury the stuff, they’re dead.”–END of K@W article

Dealing with Extreme Disruptions
- Are We Ready for Anything? -

This edition of Asian Voices comes to you from a meeting of the World Economic Forum in Dalian, China. The disaster in Japan this past March had a great impact not only on Japan, but across the entire world. Disruptions in global supply chains reminded us again of just how connected global business has become. The incident at the Japanese nuclear power plants has compelled countries around the world to review their energy policies. Today, with the advance of globalization, we face the high risk that natural disasters, financial emergencies, and political instabilities in one part of the world can spark global crises. What can be done to prevent such crises? And what is the best way to respond quickly and appropriately when they do happen, while minimizing the risks? We have a panel of global business leaders and risk management experts ready to discuss these issues.

Guests:

Klaus Kleinfeld, Chairman and CEO, Alcoa, USA
Yorihiko Kojima, Chairman of the Board, Mitsubishi Corporation, Japan
Erwann Michel-Kerjan, Managing Director, Wharton Risk Center, The Wharton School, University of Pennsylvania, USA
Wang Feng Director, Brookings-Tsinghua Center for Public Policy, China

Presenter
Aiko Doden, NHK Senior Commentator

CLICK HERE FOR ACCESS

Conference Theme
In recent years, a series of extreme events have caused large economic shocks, created substantial political and social challenges, and raised the prospect of higher risk and potential dislocation in the future. The recent financial crisis, natural disasters, terrorist acts, technological accidents, outbreaks of contagious diseases, medical
advances impacting longevity are salient examples. The direct and indirect consequences of these extreme events depend critically on private and public sector actions, policies, and incentives that are in place before and after these events occur.

This conference will highlight the most recent research on a range of issues related to insurance markets and catastrophic risks.
Suitable themes for the meeting include:

Organizers
Ken Froot (Harvard Business School and NBER)
Howard Kunreuther (The Wharton School, University of Pennsylvania and NBER)
Erwann Michel-Kerjan (The Wharton School, University of Pennsylvania)

Emails: kfroot@hbs.edu; kunreuther@wharton.upenn.edu; erwannmk@wharton.upenn.edu

Selection Process and Audience
NBER Universities’ Research Conferences aim at presenting the best research on a given topic. In keeping with the NBER’s tradition, priority will be given to empirical research and theoretical work with empirical applications. We encourage submissions from researchers early in their careers and also from non-NBER affiliates. We also encourage practitioners in the industry and in government to submit papers or volunteer as possible discussants. Papers will be selected on the basis of abstract of about 500 words or a draft paper. Any research that will not be published at the time of the conference may be submitted.

The deadline for submissions is November 1, 2011. Authors chosen to present papers will be notified by December 1, 2011. There will be a possibility for the selected papers to be published in a special issue of a journal with an interest in this topic or in an edited volume. The conference will also be summarized in the NBER Reporter. Final drafts of the papers will be due at the NBER on April 13, 2012. The NBER will pay the domestic travel and hotel expenses for one author per paper, and for conference discussants.
To submit an abstract or draft paper, please go to:

http://www.nber.org/confsubmit/backend/cfp?id=URCs12

About the NBER
Founded in 1920, the National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan
research organization dedicated to promoting a greater understanding of how the economy works. It is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.
The NBER is the nation’s leading nonprofit economic research organization. Eighteen Nobel Prize winners in Economics and twelve past chairs of the President’s Council of Economic Advisers have been researchers at the NBER. The more than 1,100 professors of economics and business now teaching at colleges and universities in North America who are NBER researchers are the leading scholars in their fields. These Bureau associates concentrate on four types of empirical research: developing new
statistical measurements, estimating quantitative models of economic behavior, assessing the economic effects of public policies, and projecting the effects of alternative policy proposals.

“The world has entered a new era of catastrophes. Economic losses from hurricanes, earthquakes and resulting tsunamis, floods, wildfires and other natural disasters increased from $528 billion (1981-1990) to more than $1.2 trillion over the period 2001-2010. The 9.0 earthquake and massive tsunami in Japan this past spring caused hundreds of billions of dollars of direct and indirect costs. It has affected the Japanese macroeconomic forecast and resulted in the departure of the then-prime minister. And before this, massive earthquakes in Haiti, Chile and New Zealand inflicted record human and financial losses as well.

Despite being the richest country in the world, America is still highly vulnerable to natural disasters. Two principal socioeconomic factors directly influence the level of economic losses due to catastrophic events: exposed population and value at risk. Florida, for example, has seen its population grow from 2.8 million inhabitants in 1950 to 18.8 million in 2010 (+570%). Increased population and development means an increased likelihood of severe economic and insured losses in Florida and other hurricane-prone regions unless cost-effective mitigation measures are implemented and the risk properly hedged.

So, when an unexpected earthquake was felt on the East Coast, followed by Hurricane Irene, those of us who have been tracking extreme events for years knew what would likely happen.

First, the Administration in Washington would have learned the lessons from the 2005 Hurricane Katrina debacle. Evacuation would have to be required and enforced. The president, the heads of FEMA and DHS, along with local, state and federal officials in charge of disaster management would have to be on the front line very early. The presence of true professionals would matter a great deal. Furthermore, this effort and a well-articulated crisis management strategy would have to be relayed and clearly explained by leading media outlets.

That is the way it happened…..”

READ MORE by CLICKING HERE

“Even if you don’t live on the storm-ravaged East Coast, Hurricane Irene is going to cost you.

CLICK HERE FOR FULL ARTICLE.

(Sources: NOAA).

Soon, the question of who will pay for the economic losses due to Hurricane Irene will be central.

As a Category 1 hurricane, Irene should not inflict massive wind losses. More likely, flood damage will be the most important part of the losses. In the US, residents can purchase flood insurance through the federally-run National Flood Insurance Program (NFIP), which was established in 1968.

Today, the number of residents in some of the affected areas who have such coverage in place is as follows (in parentheses I put the dollar figure that represents the total amount of NFIP insured property in the state):

Vermont: 3,600 ($670 million)
Rhode Island: 16,000 ($3.8 billion)
New York: 163,000 ($39.5 billion)
New Jersey: 230,000 ($52 billion)
Pennsylvania: 65,000 ($12 billion)
Delaware: 25,000 ($6 billion)
DC: 1,800 ($320 million)
Maryland: 69,000 ($17.8 billion)
Virginia: 111,000 ($26.6 billion)
North Carolina: 136,000 ($31.4 billion)
South Carolina: 200,000 ($48 billion)
Georgia: 97,000 ($23 billion)
Florida: 2,070,000 ($470 billion)

Clearly, many more individuals are not covered against flood losses. Who will pay then?

For media request, please contact Dr. Michel-Kerjan at erwannmk@wharton.upenn.edu

Insurance and government assistance play central roles in ensuring economic and social resilience in the aftermath of catastrophes in developed countries. Around the globe in the past decade, disasters have led to unprecedented claims payments to insured victims, and government relief to aid the uninsured and the affected communities has risen to historic levels.

Increases in population, property values, and concentration of assets in hazard-prone areas are primary causes. Recent climate studies indicate we should also expect more extreme weather-related events in the future.

The cumulative expected exposure of the U.S. government to catastrophes over the next 75 years could reach $7 trillion. (…)

READ MORE:
RedesigningFloodIns_ScienceMag_20110722-1

ONLINE: http://www.sciencemag.org/content/333/6041/408.full

For request, please contact Dr. Michel-Kerjan at: erwannmk@wharton.upenn.edu