Living with Volatility: Best Business Books 2002

The spectacular bankruptcies of Enron and Arthur Andersen at the close of 2001 were followed by the similar collapses of WorldCom, Kmart, and UAL Corp (parent of United Airlines) in 2002. Scandal and recriminations dominated business news in 2002—a year in which the Houston Astros' Enron Field was safely rechristened Minute Maid Park. Wall Street, along with most economists, remained uncertain as to what direction the New Economy would take. Many feel that the positives of increased productivity, low interest rates, and continued consumer spending will finally outweigh concerns over the weak labor markets and the geopolitical strains from the Iraq standoff, terrorism in general, and new tensions with North Korea in 2003. President Bush's plans for tax cuts for individuals and businesses and an extension of unemployment benefits are aimed at jumpstarting the economy. Businesses and investors, however, were generally wary throughout 2002, waiting to see if anything—the latest earnings figures, UN inspectors' reports, housing starts, or stimulus package—could trigger an upswing.

Long-term trends, such as the increase in online spending, concerns about wellness and health, the burgeoning Youth Markets, and green power and awareness, continue. Corporate culture is keeping pace with societal change. In Melinda Davis's The New Culture of Desire, the search for bliss beats power, sex, and money today. Davis not only presents five strategies for marketers but explains why more than half of Americans are overweight, with the rest of the world following our lead.

Even as the Enron, Arthur Andersen, and WorldCom stories quiet down, concerns about corporate ethics and business practices remain on the public's mind. Investors need to be confident in corporate leadership. Robert Bryce's Pipe Dreams and Brian Cruver's Anatomy of Greed describe and analyze the crazy corporate world of Enron, while Lynn Paine in Value Shift presents a new organizational model that blends high moral standards of leaders to create high productivity and positive financial rewards.

Because the majority of Americans' investments have been doing so poorly, investment books are topping best sellers lists as we try to understand the chaos and confusion rampant in the current stock market. According to the December issue of Money Magazine, some $16.1 billion was yanked from stock funds in September 2002 alone. Are bonds a good choice for short-term investments? What about the long term? Consumer debt is at a 20-year high relative to disposable income, but what happens if we stop spending and start saving more?

Charles B. Carlson's The Smart Investor's Survival Guide tells readers that with the ongoing changes in the economy, including changes in corporate reporting laws, instant availability of financial information, and the ability to buy and sell stocks with the touch of a keystroke, volatility is here to stay—and that it's not such a bad thing. In To Hell and Back, Ken Stern converts the fundamentals of investing into easy-to-understand concepts and uses humor to get his points across.

Globalization is an increasingly important factor in transforming economies and societies. In Globalization and Its Discontents, Nobel prize winner and Columbia University economics professor Joseph Stiglitz lays out an informed critique of globalization as it exists today. Incomes are not rising in much of the world, and open capital markets, free trade, and privatization are making the economies of developing countries unstable. Like the Stiglitz book, George Soros on Globalization criticizes the International Monetary Fund and also suggests reforms. Soros, while an ardent supporter of globalization, believes that industrialized nations like the United States must increase foreign aid. He offers ideas to improve foreign aid efficiency and uses simplified language to make basic economics accessible to all.

As indicated above, the United States remains a major player in globalization and international trade and aid. Therefore, two important books on the U.S. economy, Paul Begala's It's Still the Economy, Stupid and Robert Brenner's The Boom and the Bubble, help explain how the United States can lead the world forward. Leadership is also profiled in books about Donald Rumsfeld and Rudolph Guiliani; current research on leadership is put forward by the Emotional Intelligence researchers in Primal Leadership.

Will the global economy respond to positive moves in the U.S. economy? What will be the outcome in Iraq? No one can predict the future, but we can all use advice for decisions in turbulent times. Library collections will help many individuals make better decisions and better understand global politics, economics, leadership, and conflicts.

Henry, Shannon. The Dinner Club: How the Masters of the Internet Universe Rode the Rise and Fall of the Greatest Boom in History. Free Pr. 288p. index. ISBN 0-7432-2215-6. $26.
The Capital Investors, founded unofficially in 1996, are 26 leaders of computer-related businesses who meet monthly for dinner in Washington, DC, to network and make common investing decisions. CEOs of Internet and high-tech companies like Cvent.com, Shop2U, SwapDrive, and MaTRICS make investment pitches and are questioned and challenged but frequently leave with thousands of dollars in venture capital. Learn here about the movers and shakers of the business world for today's generation. (LJ 11/15/02)

Korman, Richard. The Goodyear Story. Encounter Bks. 230p. index. ISBN 1-893554-37-6. $25.95.
Charles Goodyear began his obsessive quest to find the recipe for making rubber in the 1830s and ended up becoming an American industrial legend. Besides tracing the life of this inspiring entrepreneur, Korman's social history of factory life and debtors prison in the early to mid-1800s is exceedingly well drawn. Goodyear was a man obsessed and overcame many obstacles to understand and control the miracle substance of rubber.

Krass, Peter. Carnegie. Wiley. 612p. index. ISBN 0-471-38630-8. $35.
From bobbin boy in a cotton mill to one of American history's most famous characters, Carnegie's life was one of contradictions. In his lifetime, Carnegie gave away a staggering $350 million, setting a standard for social conscience. Krass used original sources such as letters, diaries, and other writings by primary and peripheral characters in Carnegie's life to penetrate the public persona and show the man who crusaded for universal literacy and world peace.

Rockfeller, David. Memoirs. Random. 517p. index. ISBN 0-679-40588-7. $35.
This down-to-earth autobiography will fascinate readers interested in business history, powerful families, politics, New York City, and American history. Rockfeller's intimate look at the burdens and privileges of bearing the family name and its vast wealth is written in an old-fashioned, restrained, and self-deprecating style. Infused with a sense of duty and a love of art, he tells how he carved out a distinct life and legacy all his own. (LJ 11/1/02)

Birkeland, Peter M. Franchising Dreams. Univ. of Chicago. 186p. index. ISBN 0-226-05190-0. $22.50.
Birkeland's balanced perspective based on extensive research teaches readers the risks, pitfalls, and challenges from the view of both the franchisee and the franchiser. He describes the different types of franchise systems and components of fundamentals like royalties, trademarks, and contracts and presents a social profile of franchisees. (LJ 5/1/02)

Esser, Teresa. The Venture Café: Secrets, Strategies, and Stories from America's High-Tech Entrepreneurs. Warner Bks. 292p. index. ISBN 0-446-52783-1. $24.95.
Esser is a young member of the MIT entrepreneurial community and has gathered case studies of small business successes and failures in order to explore the nature of the entrepreneurial spirit. Along the way and using real-life stories, she teaches readers how to find funding, attract good employees, use the press, and set up a vesting schedule.

Koplovitz, Kay. Bold Women, Big Ideas: Learning To Play the High-Risk Entrepreneurial Game. Public Affairs. 288p. index. ISBN 1-58648-107-X. $26.
Koplovitz provides expert advice on formulating a successful business plan or a winning pitch in order for venture capitalists to obtain financing. Readers will be inspired by Koplovitz's crisp businesslike analysis of doing business in today's economy to launch and finance a successful new business venture. A highlight is the practical list of resources at the end of the book, which will help beginners learn about and find financing sources. (LJ 4/15/02)

Bryce, Robert. Pipe Dreams: Greed, Ego, Jealousy, and the Death of Enron. Public Affairs. 394p. index. ISBN 1-58648-138-X. $27.50.
Based on interviews with over 200 current and former Enron employees as well as Wall Street analysts plus extensive research into Enron's filings with the SEC, Bryce explains how the seventh-largest corporation in America destroyed itself through every kind of greed. He describes dubious financial maneuvers, excessive spending, political assistance from the Bush family and Sen. Phil Gramm, and intricate and questionable accounting practices. Written in a gossipy, colloquial style, this tale of arrogance and avarice will appeal to readers with its irreverence and humor. (LJ 11/1/02)

Cruver, Brian. Anatomy of Greed: The Unshredded Truth from an Enron Insider. Carroll & Graf. 366p. ISBN 0-7867-1093-4. $25.
This insider's tale provides a broad view of the complex workings of a huge corporation with a wacky culture. Hired in March 2001, Cruver tells readers how a typical Enron employee viewed the company's dramatic collapse. He explains how partnership deals kept huge debts off the books while lining the pockets of top executives, effectively teaching readers how corporate ethics can be empty and ineffectual. (LJ 9/1/02)

Paine, Lynn Sharp. Value Shift. McGraw-Hill. 302p. index. ISBN 0-07-138239-9. $27.95.
Even before the Enron and WorldCom debacles, Harvard Business School professor Paine was researching the fundamental changes that globalization, privatization, deregulation, and technology are forcing on corporations. She presents evidence that economic benefits like long-term sustainability will result from an ethical stance. Read about her new organizational model where corporate leaders will need and use their skills to meld high moral standards with financial results.

Alexander, Dean C. & Yonah Alexander. Terrorism and Business: The Impact of September 11, 2001. Transnational Pubs. 264p. bibliog. index. ISBN 1-57105-246-1. pap. $18.95.
This timely volume presents an overview of the costs of September 11 in terms of economic indicators, financial markets, and the impact on local, state, and national levels plus the responses by corporate America, U.S. labor, and the U.S. government to the terrorist attacks. The conclusion summarizes lessons learned and briefly presents thoughts on future attacks and consequences. The extensive bibliography is the true highlight of this work.

Hertz, Noreena. The Silent Takeover: Global Capitalism and the Death of Democracy. Free Pr. 246p. index. ISBN 0-7432-3478-2. $25.
Hertz, a British socioeconomist, reveals how international corporations (of the world's 100 largest economies, 49 are nation-states and 51 are corporations) manipulate and pressure governments, legally and illegally, while these same governments are neglecting the needs of citizens, the environment, and even national security. She describes how our lives, our society, our democracies, and our futures are being threatened. Her groundbreaking vision describes ways every citizen can help keep global capitalism in check.

Irwin, Douglas A. Free Trade Under Fire. Princeton Univ. 257p. index. ISBN 0-691-08843-8. $27.95.
The most straightforward case for the classic economic theory that expanded trade leads to increasing productivity, more investment, and improved standards of living is based on the 200-year-old work of Adam Smith and more recent empirical research conducted by Irwin and other academic economists. Irwin demonstrates why globalization is the lifeblood of the postindustrial economies by reviewing U.S. trade policy, demystifying the World Trade Organization, and systematically reviewing and rebuking the major objections to free trade.

Soros, George. George Soros on Globalization. Public Affairs. 191p. index. ISBN 1-58648-125-8. $20.
Besides identifying the problems with globalization, Soros presents practical proposals for reforming and strengthening international financial and trade institutions, particularly the World Trade Organization and the International Monetary Fund. His vision describes what needs to be done to move toward a global open society, and the centerpiece of his book is a proposal to use Special Drawing Rights (SDRs) for the provision of public goods on a global scale.

Stiglitz, Joseph E. Globalization and Its Discontents. Norton. 282p. index. ISBN 0-393-05124-2. $24.95.
Nobel prize–winning economist Stiglitz integrates the economic booms and crises, struggles of developing countries, efforts of former Communist countries to become market economies, and high-level negotiations and political machinations along with cutting-edge economic theory into one coherent story. Globalization, its triumphs and failures, is discussed using specific countries as examples and the specific institutions—the IMF, the U.S. Treasury, and the World Bank—that helped or hindered economic development. His reform agenda embraces openness, environmental sustainability, and a respect for humanity. (LJ 5/15/02)

Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. Norton. 260p. index. ISBN 0-393-04982-5. $25.95.
Using words rather than mathematics, this simple yet chatty explanation of key concepts and essentials of economics gives readers the tools to understand topics like Gross Domestic Product, inflation, productivity, trade, and globalization. The workings of the financial market are explained along with Wheelan's investment theory. This sophisticated yet accessible book is entertaining and informative, providing insight into wealth, poverty, gender relations, politics, and the environment. Economics for the layperson could also be a subtitle. (LJ 6/15/02)

Zubott, Shoshana & James Maxmin. The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism. Viking. 458p. index. ISBN 0-670-88736-6. $27.95.
The basic premise of this work is that people have changed far more than the corporations upon which they depend for employment and consumption and that this chasm holds the possibility of revolutionary economic growth. This new economic order will be founded on principles of "distributed capitalism." Join the debate on the new role of companies, the needs of individuals, and the implications for entrepreneurs, politicians, and citizens in the 21st century. (LJ 11/15/02)

Bernstein, William J. The Four Pillars of Investing: Lessons for Building a Winning Portfolio. McGraw-Hill. 316p. index. ISBN 0-07-138529-0. $27.95.
Discussing the four pillars—the theory of investing, the history of investing, the psychology of investing, and the business of investing—is a readable way to present a solid review of investment principles. Using humor, Bernstein advises readers to employ sound tenets of investing to manage risk while building a foundation of assets for the long term.

Carlson, Charles B. The Smart Investor's Survival Guide: The Nine Laws of Successful Investing in a Volatile Market. Doubleday. 325p. index. ISBN 0-385-50387-3. $24.95.
Carlson believes volatility or turbulence is here to stay and demonstrates to investors how to make it work to their advantage. Investors must match their investment style to the stocks they buy, and, of course, diversification is key. Here the author discusses diversification within asset classes, across asset classes, and across time. A highlight of his work is the "easy-hold" ratings on stocks and mutual funds.

Parness, Michael. Rule the Freakin' Markets: How To Profit in Any Market, Bull or Bear. St. Martin's. 246p. ISBN 0-312-28256-7. $24.95.
Requiring discipline, patience, flexibility, an open mind, and a commitment to daily learning, profitable trading can be learned, according to Parness. This breezy, anecdotal read is basic investing advice, but the exercises included will help readers determine their level of aversion to risk, learn how market psychology determines daily and cyclical market movement, and how to protect one's investments. (LJ 1/02)

Reese, John & Todd Glassman. The Market Gurus: Stock Investing Strategies You Can Use from Wall Street's Best. Dearborn Trade. 242p. index. ISBN 0-7931-4595-3. $25.
Here are simple, step-by-step instructions illustrating the strategy used by such "gurus" as Peter Lynch, William O'Neil, Ken Fisher, and David Dreman to make investment decisions. These case studies use extensive charts and statistics as well as short biographies on the individual gurus. The final chapter on "price-earnings ratio (pe)" is particularly valuable.

Stern, Ken. To Hell and Back: How I Survived Wall Street's Roller Coaster and How You Can Too. Dearborn Trade. 231p. index. ISBN 0-7931-4922-3. $22.
After the 2000 stock market meltdown and amazingly slow recovery, readers will learn how to regain composure and even excel in the current up-and-down market. Stern, a battle-hardened investor, uses humor and lay language to explain business cycles, key indicators, and ways to spot trends; he advocates disciplined investing. This book provides useful checklists and admirably succinct chapters on subjects such as finding the data needed to invest intelligently or comparing the stock of two different companies. Readers can learn savvy investing strategies here.

Wolman, William & Anne Colamosa. The Great 401(k) Hoax. Perseus. 246p. ISBN 0-7382-0635-0. $26.
This timely, thought-provoking work reminds investors that with empowerment comes responsibility. Very readable, this fast-paced critical examination of the 401(k) and its current role in retirement funding will generate debate and, one hopes, more choices for American workers needing to use 401(k) plans to design and fund their retirement. Costs and risks are real, and, as in other investment strategies, diversification is key. (LJ 9/15/02)

Bennis, Warren G. & Robert J. Thomas. Geeks and Geezers. Harvard Business School. 224p. ISBN 1-57851-582-3. $26.95.
Over 40 leaders, either 21- to 34-year-old "geeks" or 70- to 82-year-old "geezers," were surveyed and interviewed to evaluate the effect of the era on their values and personal success. The authors use the Leadership Development Model to determine how individual factors and the era impact the development of four leadership competencies: adaptive capacity, engaging others by creating shared meaning, voice, and strong moral compass or integrity. Aspiring leaders will want to study.

Giuliani, Rudolph W. Leadership. Hyperion. 407p. ISBN 0-7868-6841-4. $25.95.
After the September 11 attacks, Giuliani emerged to the world as a leader with exceptional ability. However, as he explains in his book, outstanding leadership is achieved by a lifetime of disciplined work, making everyone accountable, all of the time; surrounding yourself with great people; reflecting and then deciding; developing and communicating strong beliefs; and being your own person. He employs captivating stories to illustrate his ideas on organizational dynamics, crisis management, and general management. Learn why leadership is a privilege and a responsibility.

Goleman, Daniel. Primal Leadership: Realizing the Power of Emotional Intelligence. Harvard Business School. 303p. index. ISBN 1-57851-486-X. $26.95.
Goleman teams with Emotional Intelligence researchers Richard Boyatzis and Annie McKee to explore the role of emotional intelligence in leadership. Readers will learn how to inspire and motivate people, move among various leadership styles, cultivate leadership skills throughout teams and organizations, and use their own energy and enthusiasm to lead a successful business. The clear, concise writing style will help all understand the important concepts presented. (LJ 12/01)

Hagel, John, III. Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow Through Web Services. Harvard Business School. 216p. index. ISBN 1-57851-680-3. $29.95.
By providing deep insights into business strategy, Hagel here tackles the most fundamental business issue facing managers today: how to create value as competition intensifies. He explains how new technology, i.e., web services, gives executives the ability to deliver cost and asset savings quickly, with a modest investment, and establish or leave business relationships fluidly and inexpensively. Hagel's innovative approaches to business process management and organization are also interesting.

Krames, Jeffrey A. The Rumsfeld Way. McGraw-Hill. 244p. index. ISBN 0-07-140641-7. $40.95.
This proactive leadership guidebook provides an enlightening and provocative look at the leadership skills, methods, and strategies that have made Secretary of Defense Donald Rumsfeld an accomplished public figure. Learn how the contentious Rumsfeld has adapted his techniques to changing times in the past four decades, from reviving the Republican party in the 1960s and running a corporation to serving as Gerald Ford's Chief of Staff and leading the fight on terrorism today. Position yourself for success, guard against fantasy, gain knowledge and make it work, speak your mind, and craft coalitions are some of the strategies that have worked for Rumsfeld.

Davis, Melinda. The New Culture of Desire. Free Pr. 262p. index. ISBN 0-7432-0459-X. $26.
This social study began with the Human Desire Project, a six-year multidisciplinary study conducted by Davis's forecasting firm, the Next Group. The result is five strategies that will change and are changing your business, your life, and your lifestyle. Davis reveals the unconscious formula that we all use now to make choices; why bliss beats sex, money, and power; and the single greatest unmet consumer need. (LJ 11/1/02)

Advertising Age Encyclopedia of Advertising. 3 vols. Fitzroy Dearborn. 1873p. ed. by John McDonough & others. illus. ISBN 1-57958-172-2. $385.
Organized A to Z, the 600 entries here profile leading ad agencies internationally; discuss major advertising campaigns and brands; provide biographies; explain market research methods, theory, and data-gathering; explore cultural, social, and historic issues influencing advertising; and reveal the systems, tools, and professional organizations that make advertising work. Bibliographies are included with each article, and over 500 illustrations bring the visual world of advertising to life. Though expensive, the set is well researched by 240 historians and experts and well bound on acid-free paper; it will be a classic in libraries for many years to come.

Business: The Ultimate Resource. Perseus. 2200p. ISBN 0-7382-0242-8. $59.95.
Business is a guidebook to all the significant, practical, and factual areas of working in, managing, and building today's companies. It contains over 500 guides, lists, charts, essays, book summaries, and biographies, plus a dictionary. Besides 150 original essays written by leaders like Philip Kotler and Mark Brown, whole sections on "Management Checklists" and "Actionlists" lead readers through procedures for writing job descriptions, conducting performance appraisals, creating product literature, starting a small business, and building a web site. Reasonably priced, this valuable resource will be useful in every reference collection for students, faculty, small business owners/managers, supervisors, and anyone working today. (LJ 9/15/02)

Begala, Paul. It's Still the Economy, Stupid: George W. Bush, the GOP's CEO. S. & S. 167p. ISBN 0-7432-4647-0. pap. $12.95.
Sure to generate plenty of conversation, Begala's book has a Democratic bias but he presents numerous examples of the Bush administration's own words to portray the Republican party's compassionate conservatism as very procorporate and prowealth plus anti-environment and anti–working class. Begala demonstrates with thorough documentation how the economy could be turned around but how supporting wealthy campaign donors will not achieve this goal.

Brenner, Robert. The Boom and the Bubble. Verso. 303p. index. ISBN 1-85984-636-X. $23.
Brenner illustrates excellent insights into the U.S. economy and financial development leading to the New Economy that took form in the 1990s. Critical of Alan Greenspan, this solid background study for the current volatility in U.S. financial markets will help even lay readers understand the global impact of our monetary policy. The lengthy final chapter on "Prospects" for the future will help investors make their own forecasts of where the economy may be headed.