Author Archives: Arizona State University

99270474

Commerce partners with ASU to encourage U.S.-Mexico border trade

Michael Camuñez, Assistant Secretary of Commerce for Market Access and Compliance, and Michael Crow, President of Arizona State University (ASU), will co-host the Realizing the Economic Strength of our 21st Century Border Trade, Education and Jobs Conference, September 23-25, 2012, in Tempe.

The conference will focus on creating jobs, enhancing education in the United States and Mexico; identifying industry opportunities in renewable energy, aerospace, tourism, and logistics; exporting goods and services to the United States and Mexico; and attracting investment and enhancing local economic development.

The conference panels, which will feature major U.S. and Mexico corporations, U.S. Congressional Members, governors and mayors from both sides of the border, will focus on identifying regional solutions to border-related challenges and priorities such as workforce needs and educational development; trade facilitation and supply chain solutions for cross-border trade; border infrastructure needs and regional border planning; public/private partnership opportunities and new innovative technologies; and identifying cross-border economic development and job creation strategies.

A conference agenda is available at http://trade.gov/borderconference/

WHO: Senior U.S. and Mexico Government Officials

WHAT: Realizing the Economic Strength of Our 21st Century Border Trade, Education and Jobs

WHEN: September 23-25, 2012

WHERE: Fiesta Resort Conference Center, 2100 South Priest Dr., Tempe, Ariz. 85282

106477373

Inaugural Cronkite Day Celebration Set for October

Arizona State University journalism alumni are invited back to the Walter Cronkite School of Journalism and Mass Communication for the school’s first-ever large-scale alumni celebration Oct. 26.

Conceived and designed by the Cronkite School National Board of Advisors, Cronkite Day is an all-day festival of professional, social, career development and networking opportunities held at the Cronkite building on ASU’s Downtown Phoenix campus.

“I can’t think of a more fitting way to honor the legacy of Walter Cronkite or the great strides and accomplishments made by the school that bears his name than our first Cronkite Day event,” said Craig A. Newman, chairman of the National Board of Advisors. “We live in an era when journalism’s role, methods and innovations are constantly reinvented, challenged and redefined. The Cronkite School has taken a leadership role in this global conversation, with many alumni who are industry leaders returning to campus for Cronkite Day to share their experiences, challenges and visions for the future of media.”

Headlining the event is a series of showcase panels featuring alumni on topics ranging from coverage of the 2012 elections, the impact of social media and international news coverage to public relations in the digital age and the state of local TV news. Alumni also will have the opportunity to talk with current Cronkite students and see their work in state-of-the-art newsrooms, TV studios, digital classrooms and innovation laboratories around the building.

Cronkite faculty and staff will be on hand to talk with alumni about career development opportunities, including the Cronkite New Media Academy, the Office of Career Services, the Reynolds National Center for Business Journalism and graduate programs. In addition, alumni will be able to get feedback on their writing, photography, video and resumes with top Cronkite alumni and faculty in one-on-one settings.

Other Cronkite Day activities will include behind-the-scenes tours of the award-winning, LEED-certified Cronkite building with the building’s architects and a happy hour reception at a local restaurant.

“Cronkite Day is an unprecedented opportunity for Cronkite alumni from around the world to
reconnect with old friends and classmates and favorite professors, make new friends and professional connections and learn about what’s happening at the school,” said Cronkite Dean Christopher Callahan. “We look forward to welcoming our graduates to this unique celebration.”

The event comes the day before ASU’s annual Homecoming festivities and football game. The following week, the Cronkite School will host the 29th annual Cronkite Award Luncheon, this year honoring NBC Sports’ Bob Costas, on Oct. 30.

selfservicemakingyourbusinessbetter

Are Self-Service Technologies Making Your Business Better?

Self-service technologies, which automate routine interactions between companies and customers, are a source of convenience and efficiency to both parties — until something goes wrong and the customer cannot make the system work. Many companies should be focusing more closely on the overall customer experience, says Michael Goul, a professor of information systems and a researcher at the Center for Advancing Business Through Information Technology. Curiously, here’s a case where businesses could learn something from government! (12:32)

airlinefees

The Nickel And Dime Approach — Are Those New Airline Fees A Smart Strategy?

As higher fuel costs gobble up airline profits, the carriers are imposing new fees on passengers in an attempt to make up the difference. William A. Verdini, chairman of the supply chain management department of the W.P. Carey School of Business, wonders if this is a smart strategy. (17:23)

The Art Of Negotiating With Your Boss

The Art Of Negotiating With Your Boss, Part Two

One of the most difficult tasks for a worker is negotiating with a boss. Whether it’s getting a raise or a new assignment, or a simple request for more office supplies, asking a boss for anything can be nerve-wracking. Knowledge@W. P. Carey interviewed management professor Kevin Corley about the best way to negotiate with your boss. Part One of our two-part series on this topic addressed the matter of self interest — yours, your boss’s, and the organization’s. Part Two discusses how knowing your boss’s negotiating style can make all the difference between success and failure. (15:30)

Economic forecast

Economic Forecast Calls For Another Year Of Slow Recovery In 2011

Arizona’s economic recovery will continue to move at a glacial speed in 2011 — but at least it’s moving. The coming new year will see an increase in job creation, a rise in population and even a modest increase in single-family home permits. However, the consensus among economists at today’s 47th Annual Economic Forecast Luncheon, co-sponsored by the Department of Economics at Arizona State University’s W. P. Carey School of Business and JPMorgan Chase, is that Arizona’s recovery will continue to be far less robust than economic rebounds of the past.

“Arizona was much harder hit in this recession than the rest of the country,” said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business in an interview before the luncheon. “Overall the U.S. lost about 6 percent of jobs, while Arizona lost 11 percent of jobs and the Greater Phoenix area lost 12 percent of jobs. So, by that measure, Arizona’s problems were twice as large as the average state.”

According to McPheters, hampering Arizona’s growth in 2010 has been:

  • Consumers’ focusing on paying off debt rather than spending
  • Corporate profits improving but hiring deferred
  • The expected resurgence in single-family housing did not develop
  • Home prices have not yet stabilized
  • Small businesses facing tight credit conditions and weak demand
  • Stimulus programs ending


Job Growth

In terms of job creation, Arizona employment is expected to increase by 47,800 jobs in 2011, following three straight years of losses. The projected rate of growth for 2011 is 2 percent. That’s about double the rate of employment growth anticipated for the nation as a whole, but well below the state’s long-term average of 3.7 percent.

In addition, the state’s unemployment rate will remain above the 9 percent mark throughout 2011.

Still, even with Arizona being at ground zero of the burst housing bubble that dragged the rest of the nation into recession, the employment situation in the state has shown a marked improvement.

“For all of 2009, at the deepest point of the recession, only Nevada had weaker labor market conditions, and Arizona ranked 49th among the states in job growth (or losses),” McPheters said. “But in just the past couple of months, Arizona’s overall position is improving. The state ranked 12th based on October job creation in the 50 states. And in September, Phoenix added 27,400 jobs compared to the year before. Phoenix is the now the second-fastest growing metro area.”

Real Estate

The real estate and housing markets in Arizona remain weak in 2010, with single-family housing permits expected to be down 5 percent, marking a fifth consecutive year of declines. Single-family housing permits are expected to finally improve next year, with an anticipated increase of 25 percent. However, that increase stems from a base of 12,000 units in 2010, totaling just an additional 3,000 units. Compare that paltry number to the 80,000 annual permits handed out at the peak of the housing boom.

“Last year at this time, there was optimism about Arizona housing, but the growth never came,” McPheters said. “It looks like 2010 single-family building won’t even reach the level of 2009, which was the worst year of the recession. So most analysts are cautious right now about housing.”

One of those cautious analysts is Elliott Pollack, CEO of Elliott D. Pollack & Company in Scottsdale.

“The good news is that the worst is over, but it’s going to be a painfully slow recovery,” Pollack said in an interview before the forecast luncheon.

Pollack lists the following as reasons why the state’s housing market is showing only the slightest signs of improvement:

  • Tougher underwriting standards on mortgages
  • Up to 51 percent of the homes in Arizona have negative equity
  • Previous loan modifications have mostly failed
  • Foreclosures remain high
  • Option ARM resets do not peak until next year


art of negotiating with your boss

The Art Of Negotiating With Your Boss

You don’t have to be a power broker juggling corporate mergers to need negotiation skills. Just about everybody must negotiate with a superior at some point, about a raise or an assignment, or even a new idea for a project. Most people are conscious of the power gap between themselves and their bosses; astute employees also realize that the boss’s interests may not always align with their own. Knowledge@W. P. Carey interviewed management professor Kevin Corley about the best way to negotiate with your boss. Part One of our two-part series on this topic addresses the matter of self interest — yours, your boss’s, and the organization’s. (11:29)

medianpricenotfullstory

Median Price Not Full Story For Phoenix Market

The median price for resale homes in the Phoenix area has been edging up for several months. Does this signal that the market is approaching normalcy? Jay Butler, associate professor of real estate and author of the Realty Studies report from the W. P. Carey School of Business, talks about the factors affecting median price, including the still high number of foreclosure-related sales. It’s tempting to declare a market up-tilt based only on median price, he says, but because of that foreclosure activity, Phoenix is still far from a normal market. (13:09)

Avnet's Roy Vallee On Leadership

Avnet’s Roy Vallee On Leadership

Thirty-seven years ago Roy Vallee was stocking shelves at a small electronics distribution company in Los Angeles. That small firm has grown up to become Avnet, Inc., a Fortune 500 firm located in Phoenix, Arizona. Avnet is one of the largest distributors of electronic parts, enterprise computing and storage products, and embedded subsystems in the world. And Roy Vallee is the CEO and chairman of the board. One morning recently, marketing professor  Antony Peloso sat down with Mr. Vallee to talk about Avnet, his leadership style, and how to motivate employees — even in a far-flung global operation. Professor Peloso leads the Marketing Professional Sales and Relationship Management Initiative, which fosters strong relationships between students who are headed for careers in sales, marketing faculty members and corporate partners. The goal is to build professional sales capabilities and advance the profile and status of the sales function. And now let’s hear what Mr. Vallee has to say about one the toughest jobs of leadership: motivating employees. (26:42)

The podcast no longer works, please check the wpcarey website for the transcript.

leadershiphorizontal

Learn The Principles Of Effective Leadership

Knowledge: Great companies and great leaders are often synonymous, but what does it take to be a great leader? Dr. Angelo Kinicki is professor of management at the W.P. Carey School of Business. As a consultant, Kinicki often works with top management teams. Here, Kinicki discusses the principles of transformational and managerial leadership in increasing the efficiency of executives and the companies they lead. (18:09)

storage

Digital Management Solutions Are Basic Competitive Necessity

Digital universe. Exabytes. Data fluidity value. Master data management solutions. This is the language of the future of business. As the amount of data companies attain and store grows, so too must the ability to deal effectively with this digital avalanche. Michael Goul is a professor of information systems at the W. P. Carey School of Business. Here, he discusses how businesses will have to learn to manage unprecedented amounts of data as a means of gaining a competitive edge. (16:09)

alan mulally ford

Executive Of The Year: Alan Mullaly, Ford Motor Company

Alan Mulally, president and chief executive officer of Ford Motor Company, was honored recently as Executive of the Year by the Dean’s Council of 100, a group of prominent business executives who advise the W. P. Carey School of Business. In presenting the award, W. P. Carey School Dean Robert Mittelstaedt noted Mulally’s exceptional leadership in turning Ford around without requesting government bailout money. Here is Mulally’s speech and the question period that followed. (47:30)

housemarkethardtoread

High Foreclosure Rate And Unemployment Make Housing Recovery Hard To Read

The Phoenix resale market slowed a bit in May when compared to April, possibly because activity spiked last month as the federal first-time home buyer program came to a close, according to Jay Butler, associate professor of real estate and author of the monthly Realty Studies Report from the W. P. Carey School of Business. And though foreclosures as a percentage of the market are continuing to decline, the actual number of foreclosures is still quite high, he said. Even hopeful signs, like the recent increases in median price, are connected to foreclosures — in this case because foreclosures on high price homes pulled the median up. So where will Phoenix be in the fall? Hard to say, according to Butler, because we’ve never been here before. (9:37)

out smart the competition

James Champy Talks About Outsmarting Your Competition

James Champy is the author of “Outsmart! How to Do What Your Competitors Can’t.” Champy profiles eight highly-successful firms as he develops his thesis that the key to outsmarting the competition is to focus on the external environment  – including the customers. Be ready to respond when opportunities appear. Sometimes that means changing your business model, or, as he says, “starting with a new sheet of paper.” Knowledge@W. P. Carey caught up with Champy at a conference sponsored by the Center for Services Leadership. Champy talked about the distinguishing characteristics of the companies he writes about, including the quality of their ambitions, their culture of innovation and the level of engagement at all levels. Podcast coverage of the “Compete Through Service” symposium is sponsored by IBM. (16:45)

realestateinunchartedterritory

Real Estate: In Uncharted Territory

The resale season starts in March with an upswing in real estate transactions, but last month’s numbers were much higher than might be expected if this were a “normal” year. Jay Q. Butler, associate professor of real estate at the W. P. Carey School, complies the monthly Realty Studies report for the Phoenix metro area. He notes that a promising trend toward fewer foreclosures appears to have shifted. The difficulty in projecting what will happen next is that we’ve never been in this place before. Here’s what he has to say about those March numbers. (12:15)

restrainedeaters

Warnings For ‘Restrained’ Eaters

One-third of U.S. adults are obese, and another third are overweight, according to data recently published in the Journal of the American Medical Association. Marketing scholars Naomi Mandel, Andrea Morales and Steve Nowlis have been investigating what influences our decisions about diet. Knowledge@W. P. Carey spoke with Professor Morales recently about two of her studies. One investigated those tempting 100-calorie snack packs, and the other looked at whether your dining companions have any effect on your food selections. The results may surprise you. (13:25)

'Strategic Defaults in the Recovering Real Estate Market

‘Strategic’ Defaults In The Recovering Real Estate Market

The Phoenix resale home market rebounded slightly in February, according to the Realty Studies Report from the W. P. Carey School of Business. Compared to January, the number of transactions increased and prices were up a bit. Still, foreclosures accounted for 42 percent of the total market, and the sale of previously foreclosed properties made up 40 percent of the traditional sale segment. Meantime, market watchers are wondering what will happen when the many Adjustable Rate Mortgages (ARMs) reset this year and next. We asked  Jay Butler, associate professor of real estate and author of the report, what he thinks about that, and what else he noticed in the February data. (9:20)

stk32899bsr

The Future Of Shopping Centers

In the U.S. and around the world, the recession is forcing shopping center developers and retailers to re-think the design of the places where we spend our money. Some say the very nature of shopping has changed. Recently the International Council of Shopping Centers held a meeting of its North America Research Advisory Task Force in Phoenix. Mark Stapp, director of the W. P. Carey School’s Master of Real Estate Development program caught up with Michael Niemira, ICSC’s director of research, after the meeting. Listen as Stapp poses the key question. (22:06)

Your Call IsNot Important

“Your Call Is Not That Important To Us”

“Please hold — your call is important to us.” If you’ve ever heard that sentence then you know what it’s like to be “on hold” for customer service. Journalist and author Emily Yellin found herself suspended in customer service no-man’s-land when she tried to get her home warranty company to honor their commitments. The experience propelled her to explore the inner workings of the customer service industry, and to write a book about it entitled “Your Call Is (not that) Important to Us.” Yellin was a featured speaker at the 20th Annual Compete Through Service Symposium, hosted by the Center for Services Leadership at the W. P. Carey School of Business. She talked with us about the state of customer service today, and how companies might improve. Symposium podcast coverage was sponsored by IBM. (5:54)

Pricing Strategies Through Online Moves - AZ Business Magazine June 2010

Some Industries Reveal Their Pricing Strategies Through Online Moves

In the Web’s early days, self-styled seers proclaimed that the ironclad law of online commerce would be survival of the cheapest. Consumers could compare products with a few clicks of a mouse, these folks said, and thus they’d all soon migrate to the places where they paid the least.

It hasn’t worked out that way.

Rob Kauffman, a professor of information systems at the W. P. Carey School of Business at Arizona State University, says pricing transparency now has become just one part, though a critical one, of companies’ online strategies. Firms have realized that their online relationship with consumers is deeper than just a number. As in brick-and-mortar stores, customers care about the quality and attributes of goods and want to interact online with their retailers and each other. Unfortunately for consumers, however, firms also have come to understand that online systems give them, in effect, a legal way to collude with each other by signaling their pricing intentions.

Unfriendly skies
One of Kauffman’s areas of expertise is the online travel business. Here, more clearly than in many sectors, you can see how firms have become sophisticated in their use of online pricing techniques. An obvious example is the airlines. They’ve experienced the very sort of brutal price competition that was predicted in the early days of the Web.

“It’s easy to describe an airline ticket, and thus we’ve seen extreme commoditization with those,” Kauffman says. “Pennies can put you at the top of a search engine’s price list.”

Airline fares have become so transparent that sites like Kayak.com have emerged that enable consumers to search the search engines. Kayak combs through all of the major travel sites and offers a variety of user-friendly tools people can use to refine and pinpoint searches for the best fares.

Yet even on Kayak, a stated low price isn’t quite as simple as it seems at first glance. Thanks to sophisticated algorithms and the ease of changing information on the Web, airlines tweak their fares constantly.

Their systems also enable them to try to influence buying behavior by, for example, showing seat inventory. Thus, when searching for a fare, a consumer will often see that there is only a small number of seats available at a given price.

“(Airlines) have no incentive to say there are 80 seats at that price,” Kauffman explains. “You’ll see two, three or four. That encourages the consumer to think that something could change in the near future. They’re using psychological tools to get consumers to respond in ways that they have already charted out.”

Prices also can serve as signals among air carriers — as suggestions that they all might want to raise their rates. In theory, an airline can post a higher fare on the Internet, hoping that its competitors will match it. If competitors don’t respond as hoped, the airline isn’t locked into retaining that fare. It hasn’t committed to a print ad campaign or made promises to travel agencies, so it can quickly change the price.

This doesn’t sound all that radical until you realize that in pre-Internet days, airlines could land in legal trouble by trying to coordinate their fares. In a famous incident in the 1980s, Bob Crandall, then-CEO of American Airlines, was accused by the U.S. Justice Department of attempted price-fixing for calling the boss of Braniff International and suggesting that they both raise their fares at Dallas/Fort Worth International Airport. A judge ruled that Crandall hadn’t broken any laws, because he’d only suggested raising fares but hadn’t done it. A similar attempt today would require no telephone call, just a few keystrokes by an anonymous programmer.

Getting to know you
Retailers such as L.L. Bean and Best Buy have responded differently than airlines to online pricing transparency. Instead of developing complicated pricing formulas and changing prices frequently, they’ve typically chosen to use the Web as a way to deepen customers’ shopping experiences. By providing lots of details on features and uses of products, for example, they stymie consumers’ efforts to make head-to-head comparisons. Thus a $49 pair of work pants offered by L.L. Bean begins to look different from a $48 pair of Carhartt jeans sold by Cabela’s.

“Initially, for many companies, the Web was simply a digital catalogue,” Kauffman points out. “Then they realized that there were different ways to represent what they were selling. They also saw that, through all of those transactions, they were learning about their customers’ tastes. So now they had the ability to up-sell and cross-sell and started doing pairing and recommending.”

Travel companies, too, have tried to stress features and thus thwart comparison. They do this by offering fare bundles in which a consumer might receive not only a plane ticket, but also, perhaps, a hotel room, a rental car and even meals.

“It’s impossible to represent those in a way that makes the stated ticket price the dominant issue,” Kauffman notes. “There are just too many variables.”

A version of this article first appeared on Knowledge@W. P. Carey, an online resource from Arizona State University’s W.P. Carey School of Business that offers the latest business insights, information and research from a variety of sources. To read more, visit knowledge.wpcarey.asu.edu.

Arizona Business Magazine June 2010

Investing man

Changing Investment Management Firms Can Be Costly

Patience, it turns out, can be indeed a virtue — especially for retirement plan sponsors. Sunil Wahal, professor of finance at the W. P. Carey School of Business at Arizona State University, and his co-authors compiled a database of hiring and firing decisions made by more than 3,700 plan sponsors between 1994 and 2003. The reasons plan sponsors change investment management firms vary, but often the sponsors hire firms that have recently earned significant excess returns.

However, Wahal and his team found that those high fliers do not perform as well after they are hired, and the fired firms sometimes go on to turn in impressive numbers. If plan managers had stayed with their original managers, Wahal says, their excess returns would have been larger than those delivered by the newly hired managers.

“When firing decisions are made, one needs to be very careful and cognizant of the costs involved,” Wahal says.

Factor costs into decisions
Wahal’s study of the selection and termination of investment management firms by plan sponsors looked at 9,684 hiring decisions by 3,737 plan sponsors between 1994 and 2003. The plan managers hired by the sponsors were responsible for delegating $737 billion in investments. The study also examined 933 firing decisions by 515 plan sponsors between 1996 and 2003. Nearly $117 billion of investments were impacted by those decisions.

“There is an enormous amount of money that is invested in the market by plan sponsors. These organizations make a lot of decisions about who gets to manage the assets for the beneficiaries,” Wahal observes. “Sometimes the hiring and firing decisions they make work well. Sometimes they don’t. The frictions involved in these decisions are costly to beneficiaries.”

The rationale for a change varies. Plan sponsors usually fire investment management firms for poor performance, but sometimes they act because of an organizational change. For example, the investment management firm may have gone through a merger, or a star stock picker or portfolio manager may have left. The plan sponsor also may decide to change direction with its investments, such as switching from running a large-cap stock portfolio to a bond portfolio.

Factors that point to success
Wahal found that consultants are hired to assist plan sponsors in nearly two-thirds of all hiring decisions. Excess returns from consultant-supported decisions are higher, consistent with the notion that a consultant’s expertise adds value when selecting managers. But there’s a downside to consultants. They often take the blame, in place of the firm’s treasurer, when a company with a defined benefits plan selects a plan manager that performs poorly. Even so, using a consultant led to a 3.7 percent increase in three-year, post-hiring returns.

The researchers also found that returns were higher as the size of the plan increased, presumably because the sponsors of bigger plans have more experience selecting investment managers. In addition, they discovered that plan sponsors like to hire investment management firms within their own states. The study found that those in-state, post-hiring returns were positive.

Despite evidence that a number of factors can predict success, plan sponsors typically selected investment management firms by screening their performance based on excess returns. Firms are usually hired after investment managers have done very well, with an average excess return of 13.8 percent three years before the hiring decision.
Yet, after an investment management firm was hired, the study found the excess returns were close to — or below — zero.

“It’s not that they do poorly,” Wahal explains, “they don’t do as well as they had been doing prior to being hired. In other words, when you chase returns, you chase hot hands. But those hot hands don’t seem to persist.”
Wahal also learned that three years after the firing decisions, excess returns were sometimes up, with performance-based firings resulting in bigger return reversals. In fact, it was discovered that had plan sponsors stayed with the fired investment managers, excess returns would be more than what the newly hired managers delivered at some horizons.

Transition costs can add up
When a plan sponsor decides to fire an investment manager, the sponsor then has to take those funds and provide them to the newly hired investment management firm. This process entails what are commonly referred to as transition costs, that is, the cost of selling the old portfolio and creating a new one. Wahal says that “such costs can frequently be as much as 2 percent, and add to any other losses that the plan sponsor might suffer.” So, the newly hired manager is expected not only to deliver superior returns, but also perhaps to recover the 2 percent transition costs. Wahal argues that “to the extent that we do not live in Lake Wobegon, this is quite a challenge.”

“What’s really important is that the firing and hiring process be set up very well,” he says. “You can’t be too quick to jump the gun on firing and hiring because those costs have to be factored into the decision. Someone’s going to bear that loss and typically it’s the beneficiaries of the plan sponsors.”