(FORTUNE Magazine) – Corporate marriage

Best: Smucker's and Jif Now that's synergy. On Oct. 10, No. 1 jelly maker J.M. Smucker, of Orrville, Ohio, agreed to buy Jif, the No. 1 peanut butter brand, from Procter & Gamble for $1 billion in stock (P&G threw in Crisco to grease the way). Investors decided it was the best thing since (or on) sliced bread: Smucker stock has risen 36% since the deal was announced. Fried PB&Js for everybody!

Worst: HP and Compaq It's bold (the new Hewlett-Packard would be the No. 1 player in servers and PCs). It's big (it would be an $87 billion company). But is it beautiful? Some important shareholders don't think so--namely, Hewlett and Packard. The sons of the co-founders have blasted the proposed $23 billion acquisition of rival Compaq for months. We can see why: Revenues won't grow until 2003, and the much hyped $2.5 billion in cost savings won't be realized until 2004. "We can pull this off," insists HP CEO Carly Fiorina. Maybe--but with seven operating systems and five processors to sort through, the details will be devilish.

Business book

Best: Fast Food Nation Eric Schlosser's immensely readable mixture of cultural history and muckraking journalism shows the big business of burgers and fries to be a "revolutionary force in American life." This supersized dose of perspective on what's involved in allowing you to "have it your way" makes you think twice about having it at all.

Worst: DotCom Divas Elizabeth Carlassare's collection of case studies profiling sisters doin' it for themselves with IPOs and new distribution channels would have felt "last year" last year. Apparently neither Carlassare nor the nearly two dozen visionaries celebrated in the book saw the dot-bomb coming. Right, Candice Carpenter?

Business movie

Best: Startup.com Ambition, betrayal, shattered friendships, and broken hearts--now, that is what business is really all about! An insightful documentary chronicling the rise and fall of the nascent dot-com GovWorks, the film perfectly captured what it was like to be in the trenches during the late, great Net boom.

Worst: Antitrust Sure, Tim Robbins made a decent Bill Gates body double, but the MGM-backed movie's hackneyed plot about a megalomaniacal software titan intent on dominating the world's communications networks through a conspiracy of theft and murder needed serious debugging. For a real antitrust thriller, try the court transcripts of U.S. v. Microsoft.

Dresser

Best: Bernard Arnault He earned his nickname--the "Pope of Fashion"--for the immense power he holds as CEO of French luxury juggernaut LVMH. But it applies equally well to his appearance. With brands like Louis Vuitton and Thomas Pink in his stable, the French billionaire always has something stunningly smart to wear. The key to looking cool, though, is never getting ruffled. Case in point: After losing a two-year battle for control of Gucci in September, Arnault turned around in November and completed a deal to acquire Donna Karan. Looking good!

Worst: Steve Ballmer Clothes haven't made this man. In the Microsoft CEO's closet, the ex-jock and computer-geek worlds collide, and the result isn't pretty. Hey, Steve, "bespoke" isn't a command in Basic! You'd think $15 billion could at least buy him a decent iron. But with the antitrust case (mostly) behind him, XP on the market, and the Xbox ready to go under a bunch of Christmas trees, maybe he figures disheveled is in the eye of the beholder.

Marketing campaign

Best: Volkswagen People the world over are now on the lookout for colorful Beetles--"Hey, there's a blue one!"--thanks to Volkswagen's stylish print and TV ads. The company was named advertiser of the year by The Gunn Report, a publication that tracks global advertising awards. VW's ads aren't just fun to look at--they're effective too. The company sold more cars in the U.S. this year than at any time since 1973.

Worst: Sony Pictures Film critic David Manning, of Connecticut's Ridgefield Press, loved Hollow Man. He raved about A Knight's Tale. And he called The Animal a winner. Too bad Manning didn't exist. A couple of Sony Pictures execs invented the man and his blurbs in order to hype Sony flicks. Two thumbs down.

E-mail

Best: Ted Waitt "Hi. That's right. It's me. I'm back." With that simple message to Gateway's employees, the beloved 38-year-old PC company founder (above) announced his return as CEO after a yearlong absence. Some straight talk from their cowboy-boot-wearing, ponytailed leader boosted workers after months of watching profits (the company lost $94 million in the first quarter) and the stock price plunge. Too bad investors have yet to share the enthusiasm.

Worst: Neal Patterson Enraged to see the corporate parking lot of Kansas City health-care software company Cerner empty at 7:30 one March morning, CEO Patterson fired off a blistering e-mail to company managers threatening to fire loafers and stop approving employee benefits. "Hell will freeze over" before he tolerates a less than "substantially full" lot at 7:30 a.m. again, he wrote. "You have two weeks. Tick, tock." A week later the e-mail was all over the Web, prompting Cerner's stock price to sink 22% in three days.

IPO timing

Best: Weight Watchers As comfort-seeking Americans stuffed themselves with junk food after Sept. 11--and news of Taliban defeats invigorated the market--underwriters for the Woodbury, N.Y., weight-loss specialist were able to raise the price for Weight Watchers' mid-November IPO by 9% at the last minute. Bargain-starved investors gobbled up shares of the business (endorsed by Fergie), driving shares up 23% the first day and fattening the company's wallet by $417 million.

Worst: Prada The Milan fashion conglomerate planned an offering on the Italian market for this summer. But the weak economy caused Prada to delay till the fall; Sept. 11 caused another postponement, this time indefinitely. That was bad news for CEO Patrizio Bertelli, husband of designer Miuccia Prada, whose recent haute couture shopping spree has him struggling to pay off some very unfashionable debt. He was recently forced to unload his 25% stake in Italian fashion house Fendi.

Candor

Best: Procter & Gamble The George Washington of business this year, P&G couldn't tell a lie. It admitted to rival Unilever, unprompted, that it had hired spies to gather information on Unilever's shampoo business. The P&G snoops even rooted around in Unilever's trash. When P&G CEO John Pepper learned of the operation, he fired the three executives who had authorized it and began talks with Unilever, ultimately paying about $10 million and pledging never to use any of the information gained from its spies.

Worst: Enron Let's see: Undisclosed transactions with funds controlled, at least in part, by CFO Andrew Fastow. Misstated earnings of more than $580 million going back to 1997. Some $1.2 billion in shareholder equity vanished. Oh, and as much as $27 billion in debt that appeared nowhere on its balance sheet. One could argue that if Enron had been more candid about how it made money, it might not have ended up as the largest corporate failure in U.S. history. Of course, if Enron had been forthcoming, it wouldn't have been Enron.

Prediction

Best: Stanley Roach The Morgan Stanley chief economist began warning of a 2001 recession way back in September 2000--well before any of his Wall Street colleagues.

Worst: John Chambers Where's that 30% to 50% growth you were so fond of talking about, John? Cisco's pro forma earnings per share declined by 23% this year--and that's excluding all the write-offs for unsold inventory and bad investments that you'd rather investors ignore. The only Cisco number that's even close to 50% is the decline in the company's stock, which fell from around $38 in January to near $20 in early December.

Family values

Best: Rupert Murdoch Promoting your kid is one thing; sticking by him when he screws up is another. But that's just what Murdoch (above right) has done. The News Corp. CEO named eldest son Lachlan, 30 (above left), deputy chief operating officer last October. This year Lachlan lost millions of Dad's money when telecom startup OneTel, in which he'd invested the dough, went bankrupt. However, Rupert has continued to show faith in his son's business acumen; Lachlan has been busy shuffling executives in Australia and installing a new editor at the New York Post.

Worst: Florence Fang No one likes to be fired, especially after less than a year on the job. But imagine how Ted Fang felt when, following a rocky start, he was ousted as publisher of the San Francisco Examiner by his own mother. (We also hear Fang is grounded.)

Honorable mention: Jack Smith The General Motors CEO (above left) helped push out his little brother Mike (above right) as chairman of GM subsidiary Hughes Electronics in order to pave the way for its sale.

Layoff policy

Best: Charles Schwab Maybe there's no such thing as a good layoff. But at least the once fast-growing discount broker made an effort. Before chopping heads, founder Charles Schwab and his co-CEO each took a 50% pay cut; 750 other execs took cuts too, and the firm encouraged employees to take Fridays off without pay. Only after those measures failed did Schwab lay off 3,400 workers, in late March, softening the blow with 60 days' notice, stock-option grants, education stipends, and a promise to pay a $7,500 bonus to any employee who returned within 18 months.

Worst: The airlines Ever wonder why airline workers always seem to be on strike? Just days after the Sept. 11 hijackings, even as they were securing a $15 billion bailout from Congress, the airlines announced plans to lay off an estimated 100,000 people. Three major carriers--American (20,000 job cuts), Delta (13,000), and Northwest (10,000)--invoked a force majeure clause claiming that emergency circumstances allowed them to bypass customary notice, severance, and early-retirement incentives; they later backed off a bit in the face of public opinion.

Graceful exit

Best: Herb Kelleher The retirement of the Southwest founder and CEO this year was as smooth as a three-point landing. Kelleher (right) leaves behind a cash-rich carrier that's well positioned to weather the problems battering the airline industry. Southwest, which refused to slash schedules after Sept. 11, was the only U.S. airline to report a profit in the third quarter.

Worst: Linda Wachner Booted without severance after 15 years as CEO of Warnaco, Wachner leaves behind a company in desperate need of a turnaround. Thanks in part to Wachner's bloated compensation package, the women's apparel maker is bankrupt, and its stock, once worth $44, trades for pennies. Not only did Wachner let down shareholders, but she also did a stellar job of alienating key customers--most notably Calvin Klein, who called her a "cancer" on his brand. But Wachner isn't leaving quietly: She's considering suing Warnaco for the golden parachute--reportedly worth $44 million--promised in her employment contract.