November 5th, 2009 · BBA · Events · Posted by Amber Walkowiak
“A felony is forever. That’s not a legacy to leave to anybody.”
Harvin C. Moore III (right) gave a speech on ethics Nov. 4 to Urton Anderson and Janet Dukerich’s 
undergraduate studies class, Organizational Corruption and Organizational Control.
At first glance, Moore looks like the picture of success. He earned a law degree from UT Austin and went to work for a law firm in Houston, where he had a “Midas touch” for putting together lucrative business deals. His real estate developments were valued at $250 million and he co-owned a savings and loan business with more than $400 million in assets.
It wasn’t until Moore took off his jacket and put on the prison badge he wore during his 2-year sentence in federal prison that students realized that this wasn’t going to be like any ethics speech they had heard before.
Moore was in business during the collapse of both the oil and gas industry and the real estate market in the four oil and gas states - Texas, Colorado, Oklahoma and Louisiana. That collapse caused all of his personal business to fail and left him with only the savings and loan institution, which he believed to be in excellent health.
However, the savings and loan institution was hit by defaults on the loans it had made to people in Houston and under the rules the partners could not declare a dividend for themselves under those circumstances. That meant that they could not pay back their debts and lenders were threatening to foreclose on their stock in the institution, thereby forcing both parties into bankruptcy. Read More…
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Ben Bentzin, marketing lecturer at McCombs and a former Dell executive, spoke with McCombs Communications Director David Wenger about changes in marketing approaches, Dell’s new focus on innovation to draw in customers and why he thinks you shouldn’t outsource your social media efforts.
David posted the full interview, along with audio clips, on his ID University blog. Check out a few highlights from Bentzin’s answers below:
On frequent reinvention of your marketing strategy:
A strategy is something a company can do better than their competitors sustainably over a long period of time. And so if the strategy changes every 6 months, it isn’t really a strategy it’s a tactic. And in some businesses these tactics are a process of exploration, finding out what works and what doesn’t work, which can be a very effective way of strategy development. To a certain extent the best market research you could possibly do is to put an offer in front of consumers and identify what consumers respond to. Once you’ve defined your strategy, if it’s a successful strategy, it will carry you for a very long period of time.
On how Dell has responded to changing market conditions:
Dell, with the Latitude Z and with other products, is starting that process of exploration, to identify how to compete in the world where competition is defined less on the basis of configurability and supply chain, and more on the basis of integrated whole products delivered with relatively little configuration. Dell’s development model historically had been the very fast follower, not necessarily innovating in all the new product categories, but being the first to market to deliver the new technology in the configuration that consumers found attractive.
Now we’re finding that Dell is exploring this possibility of more native product innovation, competing directly on the basis of product innovation as opposed to following the trends of where consumers were headed.
On having an authentic social media voice:
I find that social media and that kind of communication is very difficult for to sound authentic coming from a contractor or somebody who’s outside of the company. Sitting outside the company and trying to be the personality of the brand is very, very difficult. It’s typically going to be most successful from someone who is in the heat of the battle in direct contact with the information flow of what consumers are saying, and what is the product offering, and the company’s strategy in terms of the product they’re offering. That will ring true as authentic because it is authentic.
Tito’s [Vodka] has a very strong brand profile, and all of Tito’s social media comes from one brand of manager who’s been with the company for a very long period of time and feels passionately about the product, feels passionately about Tito’s, and does an outstanding job of representing the brand because she really represents the personification of the brand.
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November 4th, 2009 · BBA · Top Stories · Posted by Rob Meyer
Some of the best business students from around the world convened in Austin October 27-31 for the 16th McCombs International Business Competition (MIBC), one of the top annual undergraduate business competitions in the world. In total, 20 schools from North America, Asia and Europe competed in this year’s MIBC, which was sponsored by Motorola, the Undergraduate Business Council and the Office of Student Life.
Motorola put together an open-ended case that challenged the four-member teams to present an innovative global business strategy for the company. The winner was the University of Hong Kong, which became the MIBC’s first repeat winner.
“It was a fantastic event,” said Gautam Shah, MIBC chair. “We had a great, involved company with Motorola. The University of Hong Kong team presented a thorough solution that impressed all of the Motorola judges. It was airtight.” Read More…
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November 2nd, 2009 · Events · MPA · Posted by Gayle Hight
Mary Barth, professor of accounting at Stanford University, spoke recently at McCombs’ MPA Distinguished Speaker Lyceum. A former member of the International Accounting Standard Board (IASB), she explained how the board evolved, its structure and goals and progress in adopting the International Financial Reporting Standards (IFRS) around the world.
“We live in a global economy and need a single set of accounting standards for more efficient capital markets,” Barth said.
She told students they need to understand the fundamental accounting concepts because they provide the basis of the framework for financial reporting. She warned that in the future, accounting professionals will need to make judgments and understand “the why” behind a standard, rather than following thousands of specific rules as they do now.
Barth ended with a discussion of common misunderstandings about financial reporting, such as “historical cost is a misnomer” and that “neutrality does not mean there are no consequences.”
Listen to audio clips from Barth’s talk: Read More…
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Assistant IROM Professor Rafael Mendoza-Arriaga received the 2009 Nemhauser Doctoral Dissertation Prize for his paper “Unified Credit-Equity Modeling.” The award is given to the best doctoral dissertation in Industrial Engineering and Management Sciences (IEMS) at Northwestern University.
“Being recognized with an award named after Professor Nemhauser is a great honor that carries with it the great responsibility to produce excellent research during the academic career that I have just started at McCombs,” says Mendoza-Arriaga, who joined the McCombs faculty this fall. ”I hope to contribute much more to the quantitative finance group in the near future.
“I feel very grateful for the support received from everyone in the IEMS program: faculty, staff and classmates. In particular, I feel very in debt to my advisor Vadim Linetsky, from whom I learnt so much about quantitative finance.”
His thesis proposes a modeling framework that allows to consistently price and hedge the entire book of credit as well as equity derivatives, in addition to the ability to incorporate a rich assortment of empirically relevant features of these markets.
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The Wall Street Journal, October 20, 2009
A recent column in the Wall Street Journal, headlined “When Bad Luck is a Crime,” uses research coauthored by Andrew Henderson (right), associate professor of management.
Excerpt: When it comes to cheering CEOs, booing them or throwing them in jail, a consideration that ought to be nagging is whether we’re reacting to luck or design. Ken Lay, to cite a notorious example, was prosecuted not for the sins that brought down Enron, but for failing to tell investors the company was predestined to fail even as he tried to save it….
How much more fun, when dealing with circumstances like these, to play the after-the-fact-know-it-all, naming heroes and villains with the confidence afforded by the rear-view mirror. Bad enough is when journalists give unreflective vent to this urge, but unhealthy for society is when prosecutors do it. Read More…
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On Oct. 19 it was announced that MagnaQuest, a Hyderabad, India, company had acquired eVapt, an Austin company which has its roots with the Texas Evening MBA program (TEMBA). Both companies are involved in providing cloud computing solutions.
Shortly after the acquistion, TEMBA Director Trent Thurman interviewed Ranjit Nayak, MBA ‘07, who founded the company along with Divakar Jandhyala, MBA ‘07. Nayak can also be seen in a recent panel discussion about the start-up process and how the McCombs School’s entrepreneurship offerings, including the Moot Corp competition, helped in the process of building a successful venture such as eVapt. View the video.
Trent Thurman: First of all, congratulations on the news. I know this is an exciting and probably very satisfying accomplishment for you guys. Was acquisition always a part of the strategy or did the MagnaQuest deal come as a surprise?
Ranjit Nayak: Acquisition was the preferred exit at the very inception of the venture. It was therefore not a surprise.
TT: Give me a little background on what you guys were doing when you entered the program and whether or not you thought TEMBA would be a platform to launch your own venture?
RN: I was working as an integration manager at IBM Corporation when I started the evening program (Divakar was a product line development manager at BMC Software). As far as starting my own business, no, that was not on my mind when I entered the program. However, starting my own business has always been something I wanted to do.
TT: How did you and Divakar first meet and when did you realize you wanted to pursue this idea together?” Read More…
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McCombs Business Honors students Eric Sung and Jeffrey Siegel won third place in the Seventh Annual Eller Ethics Case Competition held Oct. 22-24.
The competition, hosted by the Eller College of Management at the University of Arizona, presents pairs of business students from around the world with a business ethics case that they could face in their careers. The students are instructed to consider ethical issues from the viewpoints of different stakeholders and make final recommendations regarding the case.
This year’s case revolved around a fictional automobile company based in India that has produced the lowest priced vehicle in the world.
Students were asked to consider, among other things, the advantages the new vehicle has for helping lower socio-economic groups find both mobility and a way out of poverty, and the accompanying costs of millions of new cars consuming petroleum reserves and adding to air pollution and global climate problems.
Elon University took first place. Teams from the University of Southern California and Georgetown University took second and fourth place, respectively.
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October 27th, 2009 · Events · Top Stories · Posted by Amber Walkowiak
Lee Scott, chairman of the executive committee of the board of directors and former CEO of Wal-Mart, spoke with Dean Thomas Gilligan on campus Oct. 12 as part of the VIP Distinguished Speaker Series.
Dean Gilligan began by asking Scott about his very first job, which Scott said was scrubbing toilets at his dad’s service station on Route 66 when he was in the sixth grade. According to Scott, the most valuable lesson that he learned at that job came from watching his dad interact with the garbage man. Since the garbage man had a prison record, most people hid things when he came into the office, but Scott’s dad never did. As a result, the man stole from everyone except his dad because he was the only one who trusted him.
That lesson in trust and integrity came up again when Scott was asked what his biggest mistake was. Read More…
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Bayesian statistics is not, perhaps, the most accessible field of study, but Robert McCulloch, a professor of Information, Risk, and Operations Management at McCombs, opened up this important topic at a Faculty Research Presentation Oct. 20.
McCulloch, an internationally renowned statistician, illustrated how he uses BART (no relation to the Simpsons), a computer system that can analyze data to find the relationships between variables.
This process, called regression analysis, is used to predict trends and find patterns among sets of data. According to McCulloch, it is commonly used by companies with large amounts of consumer data or by financial analysts.
BART, which stands for Bayesian Additive Regression Trees, was a joint venture between McCulloch, Edward George from the University of Pennsylvania and Hugh Chipman from Acadia University in Nova Scotia.
McCulloch says that what makes BART so amazing is that it can interpret thousands of variables with only very few observations from which to pick out trends and consistently predict the correct trend function.
“Ten years ago I wouldn’t have believed that I could solve these kinds of problems,” said McCulloch. Read More…
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