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BTW

THE BUSINESS WEEK

017

EDITED BY DEBORAH STEAD

and ouT pops an ipod


Vending machines using touch screens
and credit cards to dispense pricey
items like digital cameras and Eliza-
beth Arden cosmetics are popping up
at U.S. airports and malls. The experi-
ence “is similar to an online purchase
but with immediate gratification,”
says Gower Smith, CEO of Zoom-
Systems, which created the machines
so that Apple could sell iPods in air-
ports and at Macy’s, which is putting
alMighTy alBion the vendors in 400 stores. The com-
pact dispensers can deliver high sales
Chalk one up for Queen and country. For the first time since 1885, per square foot. But a few experts are
skeptical about wide adoption. “What
Britain’s standard of living, measured by per capita gross domes- happens when the novelty wears off?”
tic product, is poised to overtake that of the U.S. British GDP per says Lars Perner, assistant marketing
professor at the University of South-
head will hit $46,088 this year, compared with $45,598 in America,
ern California’s Marshall School of
predicts Adrian Cooper, managing director of financial consultants Business. –Aili McConnon
Oxford Economics. Thank the pound’s strength against the dollar
for about 75% of Britain’s advance, Cooper says.
But economic reforms, including looser rules on hiring and fir-
ing workers and the creation of an independent central bank, were
also helping to close the gap in the past decade, well before the
greenback began losing serious ground to sterling. And, Cooper
(clockWiSe FroM toP leFt) Max Miceli; axel koeSter; erik dreYer/gettY iMageS

adds, lower corporate taxes are giving Britain’s financial and busi-
ness sectors a boost. The U.S. still tops Britain in purchasing power
parity, another measure of prosperity. –Mark Scott

When iT’s all righT for guys To cry


They may say they hate chick flicks, but men can enjoy stories about sacrifice,
love, and empowerment, a new study shows. The key, say three marketing pro-
fessors in February’s Journal of Consumer Research, is keeping the story unreal.
The researchers had undergrads read adaptations of poignant stories by O.
Henry and others, presenting them as TV scripts. Males showed more empathy
and involvement when told the tales weren’t true. Men “need to know beyond
a doubt that it’s fiction,” says Jennifer Argo of the University of Alberta School
of Business, one of the study’s authors. Exiting reality, she says,
Male viewers
“is an excuse to relax gender stereotypes”—and emote. Women
show more
empathy preferred true stories. The study’s advice to entertainment mar-
when told the keters: Emphasizing that a weepie is fictional may bring in more
tale isn’t true males. And get a few real men to cry. –Jill Hamburg Coplan

jan uary 28, 2008 I BUSINESSWEEK


THE BUSINESS WEEK

018 BTW
the little red
book is
way in the black
Mao Zedong abolished literary
royalties as “bourgeois” dur-
ing China’s Cultural Revolu-
tion. Now there’s a new debate
over royalties—those arising
from Mao’s collected writing
and speeches. The issue is who
should get the money—about
$17 million as of 2001. Since
Mao’s death in 1976, China’s
Communist Party has claimed

a payoff for whistleblowers?


Employees lead the pack in corporate whistleblowing, accounting for
19% of those reporting fraud. But they suffer for it, despite Sarbanes-
Oxley protections, say researchers at the the University of Chicago and
the University of Toronto. Some 82% of those who uncovered fraud
from 1996 to 2004 said they were penalized—ostracized, demoted, or
pressured to quit, for instance. So how can society urge more workers the payments, Mao’s writing
saying that Mao’s and speeches
to come forward? Offer cash rewards, say words stem from
have earned

Bringing Fraud professors Adair Morse and Luigi Zingales its “collective
millions in
royalties
to Light at Chicago and Alexander Dyck at Toronto. wisdom.” China’s
1992 copyright law gives rights
Whistleblowers in 230 Their model: the federal False Claims Act, to a deceased writer’s heirs for 50
corporate fraud cases*
which gives whistleblowers 15% to 30% of years, but when Mao’s daughters,
Employees 19.2% any damages recovered in cases where the Li Min and Li Na, asked for the
royalties, the party refused them.
Media 16.0% government is defrauded. The law should Many Chinese are learn-
cover all corporate fraud, they say, because ing about all this for the first
(l to r) Max Miceli; Lee Snider/The Image Works

Industry regulators 16.0%


time, as writers and bloggers
Analysts 14.7% it spurs employee whistleblowing without
respond to a December article
Auditors 14.1% increasing frivolous suits. Their research on the royalties in a small party
SEC 5.8% showed, for example, that nearly 50% of journal. Most side with the heirs.
“We should view Mao Zedong’s
Others** 14.2% health-care fraud cases (many of which royalties from a legal perspective
*Involving U.S. companies with assets of involve cheating Uncle Sam) were initiated and not politicize this problem,”
more than $750 million; 1996-2004
**Shareholders, short-sellers, suppliers, by corporate workers. “They still lose their writes Xu Youyu, a researcher at
competitors, and plaintiffs’ lawyers the Chinese Academy of Social
Data: Who Blows the Whistle on
Corporate Fraud? (Working paper, Na-
jobs,” Morse says, “but at least they’re paid Science’s Institute of Philoso-
tional Bureau of Economic Research)
to go into retirement.” –Ben Levisohn phy. –Chi-Chu Tschang

BUSINESSWEEK I january 28, 2008