(FORTUNE Magazine) – ENTREPRENEURS/COVER STORY 34 AMERICA'S SMARTEST YOUNG ENTREPRENEURS Before hitting 40, these men and women built companies that generated $17 billion in sales last year and have created nearly 64,000 jobs. They are reinventing the ways we design organizations, motivate employees, and tap new markets. Here's how eight of the best did it. by Brian Dumaine

37 40 who made their mark

MONEY & MARKETS 52 SCANDAL ISN'T ALL THAT AILS THE PRU Top management seems out of touch at the big insurer. Do executives have the will to get tough about performance now? by Terence P. Pare

THE WORKPLACE 64 ARE COMPANIES LESS FAMILY-FRIENDLY? Yes, because today businesses need more from their employees. As Sprint executive Ronald LeMay says, ''Forty-hour workweeks are a relic of the past.'' by Jaclyn Fierman

CORPORATE PERFORMANCE 69 GOT A WINNER? BACK IT BIG Genentech gambled on a massive study to prove once and for all the superiority of its heart-attack medicine, tPA. by Gene Bylinsky

70 GO WHERE THE MONEY IS A BankAmerica foray suggests where bankers think they can profit now. by Richard D. Hylton

73 COMPANIES TO WATCH

INFORMATION TECHNOLOGY 76 THE BABY BELLS BUTT HEADS Bell Atlantic's busted buy of cable giant TCI makes it harder than ever to sort the visionaries from the slugs among Ma Bell's seven offspring. The companies have chosen sharply conflicting strategies for the coming multimedia age. They can't all be right. by Andrew Kupfer

93 TECHNOLOGY TO WATCH

JAPAN 97 JAPAN'S WHITE-COLLAR BLUES - Major corporations have too many managers doing too much busywork. The overdue drive to boost productivity in the office is causing a lot of pain. by Brenton R. Schlender DEPARTMENTS

6 EDITOR'S DESK

8 INDEX

14 NEWS/TRENDS Have you driven a (used) Ford lately? Japan blinks on HDTV, that corny ethanol lobby, home cooking is off the boil, good citizenship really is good business, and more.

23 FORTUNE FORECAST Here's the true story on inflation: The pressures are real, but prices wonUt spiral out of control. Look for a 3% increase this year. by Vivian Brownstein

Economic Intelligence: Why a stock correction wouldn't slam the economy, and more.

29 LETTERS TO FORTUNE

127 BOOKS & IDEAS Megatrendy John Naisbitt's latest on the global economy, plus West Point leadership lessons.

131 PRODUCTS TO WATCH CD-ROMs to help with taxes, a better color printer, and Velcro diapers. by Wilton Woods

WHERE TO INVEST NOW 135 THE SMARTEST CHOICES NOW

138 STOCKS ARE STILL YOUR BEST BUY Yes, they look expensive, but a solidly advancing economy still offers plenty of opportunity. A look at the business cycle will help investors pick the right sectors. by Susan E. Kuhn

147 A WISE INCOME STRATEGY With interest rates rising, bonds appear riskier. But you can still find solid yields and safety. Munis look good. by Richard S. Teitelbaum

155 HOW TO TRIM YOUR TAXES Time is running out for 1993, but it's not too early to get organized for 1994. You may need to change the way you invest. by Rob Norton

159 FINDING THE RIGHT TAX ADVISER Vying for your business are CPAs, self-styled accountants, enrolled agents, national chains, and do-it-yourself software programs. What's best for you? by Anne B. Fisher

166 THE BEST MUTUAL FUNDS Unlike many other lists of mutal funds, ours ranks performance after taxes and fees, which means that you can pocket the returns. Pick a winner from 16 categories. by John Wyatt

180 WHERE THE BEST INVEST Four champion money managers, whose mutual funds are high on FORTUNE's list, tell how they would deploy a $100,000 windfall in today's era of low interest rates and all-too-jittery markets. by Shelley Neumeier

ABOVE: Trip Hawkins of 3DO at his headquarters in Silicon Valley. Photographed by Andrew Brusso.

COVER:Trip Hawkins at 3DO headquarters. Monitors show how 3DO's Interactive Multiplayer, a $700 home video-game machine, generates shimmering patterns in response to music from a compact disk. Photographed by Andrew Brusso.

FORTUNE (ISSN 0015-8259). Published biweekly, with three issues in October, by Time Inc. Principal office: Time & Life Building, Rockefeller Center, New York, NY 10020-1393. Reginald K. Brack Jr., Chairman; Don Logan, President; Joseph A. Ripp, Treasurer; Harry M. Johnston, Secretary. Subscriptions: U.S., possessions: one year (27 issues) $52.95; Canada: one year (27 issues) $53.73. Second-class postage paid at New York, NY, and at additional mailing offices. Authorized as second-class mail by the Post Office Dept., Ottawa, Canada, and for payment of postage in cash. Member, Audit Bureau of Circulations. POSTMASTER: Send address changes to FORTUNE, P.O. Box 30604, Tampa, Fla. 33630-0604. Customer inquiries: FORTUNE, P.O. Box 60001, Tampa, Fla. 33660-0001. Phone: 1-800-621-8000. ) (c) 1993. Time Inc. All rights reserved. $ FORTUNE is a registered mark of Time Inc. For subscription queries, call Customer Service at 1-800-621-8000. Time Inc. GST R122781974.