Tag Archives: W.P. Carey School of Business

first solar - new ceo

Study: Humble CEOs Good for Business

Forget the stereotypes of arrogant, macho leaders who don’t care about anyone else’s opinion. A new study from the W. P. Carey School of Business at Arizona State University shows humble CEOs significantly benefit a company and its management — likely more than the blowhards who think it’s their way or the highway.

“Humble CEOs are more open to making joint decisions and empowering others,” says Professor Angelo Kinicki of the W. P. Carey School of Business, one of the study authors. “Their behavior positively affects both top and middle managers, who then exhibit higher commitment, work engagement, job satisfaction and job performance. We see a trickle-down effect that seems to influence the company overall.”

The new research published in Administrative Science Quarterly comes from Kinicki, Anne Tsui and David Waldman of the W. P. Carey School of Business, as well Amy Ou of the National University of Singapore, Zhixing Xiao of George Washington University, and Lynda Jiwen Song of the Renmin University of China.

They interviewed the CEOs of 63 private companies in China. They also created and administered surveys measuring humility and its effects to about 1,000 top- and middle-level managers who work with those CEOs. The researchers specifically chose China because they needed a context in which CEOs would display a wide variety of humility levels. However, they believe the findings will generalize to many companies in the United States.

“Our study suggests the ‘secret sauce’ of great, humble managers,” explains Kinicki. “They are more willing to seek feedback about themselves, more empathetic and appreciative of others’ strengths and weaknesses, and more focused on the greater good and others’ welfare than on themselves.”

Kinicki says leadership behavior normally cascades downward, so it’s likely humility at the top effects just about everyone at a company. He points out a few examples of humble CEOs making news:

* Tony Hsieh of Zappos is a Harvard graduate, who helped boost his company to more than $1 billion in gross merchandise sales annually. He also helped drive Zappos onto Fortune’s “100 Best Companies to Work For” list, with innovative customer- and employee-pleasing policies, such as “The Offer,” where new employees are offered one-month’s salary to leave the company if they’re not dedicated and happy.

* John Mackey of Whole Foods has shown concern for the greater good through his advocacy of organic food and spearheading his company’s move to become the first grocery-store chain to set standards for humane animal treatment. He also announced in 2006 that he was chopping his salary to $1, putting caps on executive pay, and setting up a $100,000 emergency fund for staff facing personal problems.

* Mary Barra of General Motors has faced severe criticism for problems created at the company before she took the helm in January. However, she has been quick to apologize and maintain that she’s moving from a “cost culture” to a “customer culture” at GM. She has promised to do “the right thing” for those affected by recent recalls and the problems that led to them.

Kinicki knows some people may be surprised by the study results, but he summarizes, “It’s time we understood that humility isn’t a sign of weakness or lacking confidence, but rather, a good thing that can benefit us all.”

The full study is available at http://asq.sagepub.com/content/59/1/34.full.pdf+html.

phoenix_housing_2909512_l

Phoenix Housing Shortage Coming?

The Phoenix area could soon see another shortage of homes for sale, like the one it endured from 2012 to 2013. According to a new report from the W. P. Carey School of Business at Arizona State University, very weak demand is masking the fact that relatively few homes are coming onto the market for sale. The area only recently emerged from another shortage, when buyers had to battle each other for relatively few home options.

Here are the latest details about Maricopa and Pinal counties, as of May:

* The median single-family-home sales price was $205,000, almost unchanged for three months in a row.
* Activity in the market is extremely slow, with demand down around 20 percent from last May.
* This quietness is covering up the fact that the market’s supply of homes for sale has stabilized at about 10 percent below normal, which could lead to another shortage, if demand eventually picks up.

Phoenix-area home prices quickly rose from September 2011 to last summer, before slowing down and even dropping a little earlier this year. The median single-family-home sales price was $205,000 in May, about the same as it was in April and March. However, that’s still up about 11 percent from the median of $185,000 last May. Realtors will note the average price per square foot went up 6 percent year-over-year. The median townhouse/condo price went up 4 percent.

The market has now become extremely quiet, and further price increases are unlikely this year without some growth in demand. The amount of single-family-home sales went down 19 percent from last May to this May. Sales of townhomes and condos dropped 20 percent.

“Demand has been much weaker since July 2013,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The slight recovery in demand that had been developing over the last two months dissipated again in May. While move-up homeowners and second-home buyers are starting to compensate for the departure of investors who went to other areas of the country for better bargains, activity by first-time home buyers is still unusually slow.”

Orr says some home sellers even appear to be canceling their listings and waiting for another time when buyers have a greater sense of urgency. These families are: 1.) choosing to stay in their homes longer than they did 10 to 15 years ago; 2.) possibly stuck with negative or little equity in their homes, discouraging buying or selling; and/or 3.) wanting to stay in their current homes to preserve their very low mortgage interest rates.

That means the market’s short supply of homes isn’t expected to get much bigger in the near future. Though the supply of active listings went up 69 percent from June 1, 2013 to this June 1, it basically stabilized at about 10 percent below normal. Completed Phoenix-area foreclosures were down 50 percent from last May to this May, eliminating another possible significant source of supply. This could lead to another shortage like the recent one when we saw 95 offers on a single home.

“Between 2012 and 2013, we experienced a chronic housing shortage in Greater Phoenix,” explains Orr. “This shortage has just been temporarily masked by unusually low demand, but that could change at any time. The market has plenty of pent-up demand.”

Orr points out that population and job growth have recovered faster in the Phoenix area than home construction has. The level of single-family-home construction permitting remains very small by historic standards, and single-family new-home construction and sales remain about 65 percent below normal. One bright spot is Pinal County, where new-home sales went up 22 percent from last May to this May.

Meantime, multi-family construction permits and rental-home demand remain strong in the Phoenix area. Unemployment, falling birth rates and greater home-sharing are helping to drive this demand. The supply of single-family homes available for rent was down to 32 days on June 1. The fast turnover and low vacancy rates have already pushed rent up in the most popular locations.

Orr adds, “In Maricopa County, the percentage of properties purchased without financing in May was still at 25 percent. The normal range for cash buyers is only 7 to 12 percent, so mortgage lending still has a long way to go toward recovery.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr will also be available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

housing.prices

Big Increases Unlikely for Phoenix Housing Market

The Phoenix-area housing market has officially rebounded from artificially low recession levels, and we’re unlikely to see any more big price increases this year. That’s according to a new report from the W. P. Carey School of Business at Arizona State University. Here are the latest details about Maricopa and Pinal counties, as of April:

* The median single-family-home sales price stabilized at just under $205,000.
* Demand and sales activity were low for the normally strong spring selling season.
* Rental homes continue to be extremely popular, since many people are ineligible for home loans and/or uninterested in home ownership.

Phoenix-area home prices rose fast from September 2011 to last summer, before slowing down and then even dropping a little bit earlier this year. This April, for the second month in a row, the median single-family-home price was just under $205,000. That’s up 13 percent – from $181,399 last April to $204,900 this April. Realtors will note the average price per square foot was up 12 percent. The median townhouse/condo price went up 4 percent.

Low demand is largely putting the brakes on more significant upward price movement. The amount of single-family-home sales activity was down 16 percent this April from last April. Sales of homes in the range below $150,000 alone fell 37 percent. New-home sales went down 12 percent. All of this, even though the period from March to May is almost always the strongest part of the year for demand.

“The market has completed its rebound from the artificially low prices that prevailed between 2009 and 2011, and further significant increases are unlikely without some growth in demand,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “It’s also likely that the recent advance in pricing will fade during the summer months, when the luxury, snowbird and active-adult markets go relatively quiet.”

Investors continue to show disinterest in the Phoenix housing market now that better bargains can be found in other areas of the country with more foreclosures. The percentage of residential properties purchased by investors was down to just 16.3 percent in April from the peak of 39.7 percent in July 2012. Completed foreclosures on single-family homes and condos were down 54 percent from April 2013 to April 2014.

In contrast, the supply of homes available for sale is way up, with 73 percent more active listings on May 1 of this year than May 1 of last year. As a result, buyers have far more choices. However, Orr believes that may change, if demand and prices don’t pick up. Potential home sellers may stay out of the market, deciding to wait for better times.

“The underlying key problem for entry-level and mid-range housing demand is a lack of household formation due to many factors, including unemployment, falling birth rates, lower net migration and greater home-sharing, especially among millennials,” explains Orr. “However, if household creation were to return to the normal long-term average, we would quickly have a housing shortage here in Greater Phoenix.”

Meantime, the demand for rental homes is very high, and Orr says the availability of those homes is dropping to unusually low levels. He estimates there’s only a 29-day supply of single-family rentals, and therefore, rent is starting to rise in the most popular locations. As a result of this demand, the Phoenix area is seeing a strong upward trend in multi-family construction permits.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Small Business Leadership Academy: Lauri Leadley

ASU and SRP Help Small Businesses

Small businesses play a key role in our economy, creating jobs and helping our community. The W. P. Carey School of Business at Arizona State University is offering a program to help small business owners and executives learn how to improve efficiency, streamline operations and raise profits. The seventh annual Small Business Leadership Academy is available to the leaders of small and diverse local businesses.

“Small businesses play a crucial role in our economy, and the W. P. Carey School of Business is very interested in helping local business owners to succeed through added education in subjects like strategy, branding and teamwork,” said Dean Amy Hillman of the W. P. Carey School of Business at Arizona State University. “We designed the Small Business Leadership Academy to fit into the busy schedules of executives from growing businesses.”

Salt River Project (SRP), the program’s founding co-sponsor, is offering a number of scholarships to its current suppliers and small business customers.

“The partnership we have with ASU, coupled with the sponsorship and scholarships we offer to the academy, is a natural fit for SRP in supporting economic development within our own community,” said Carrie Young, senior director of SRP Corporate Operations Services.

The eight-week academy and its graduation will run on Wednesday nights from Sept. 3 to Oct. 29. The curriculum will cover business strategy, branding, competing through services, negotiations, management and teamwork, among other areas. Program applications are due July 18.

Participants must:

> Have been in business for at least three years,
> Have annual revenues between $1 million and $10 million,
> Have fewer than 100 employees,
> Be the owner or principal of the business.

Applicants must be able to attend all scheduled classes and related activities. Those who complete the program will receive Continuing Education Units (CEUs) from Arizona State University. These units are widely used as a measure of participation in non-credit, professional development courses.

For more information about sponsoring a scholarship or applying to the program offered through the nationally ranked W. P. Carey School of Business, call (480) 965-7579, e-mail or visit http://wpcarey.asu.edu/executive-education/small-business-academy. Current SRP suppliers can also contact SRP’s Supplier Diversity Department for information about this year’s nominating process at SupplierDiversity@srpnet.com.

WPCarey-School-Sign

W. P. Carey School earns No. 1 Ranking

This week, U.S. News & World Report issued some new rankings for online-degree programs, growing in popularity because of their convenience and flexibility. The W. P. Carey School of Business at Arizona State University received the No. 1 ranking among the nation’s online graduate business programs for veterans.

“We’re honored to be ranked No. 1 in providing a stellar online graduate business education for our veterans,” says Amy Hillman, dean of the W. P. Carey School of Business. “The W. P. Carey School was one of the first highly respected schools to offer online courses more than a decade ago. We utilize the same MBA degree and the same faculty members online as we do in our highly ranked face-to-face MBA programs, making it convenient for active-duty military members and veterans to participate in a top program from any Internet-accessible location.”

U.S. News & World Report already ranks the W. P. Carey School’s undergraduate business, full-time MBA and evening MBA programs among the Top 30 in the nation in their categories. Earlier this year, U.S. News also ranked the school’s online graduate business programs (online MBA and online master’s in information management) No. 2 in the nation. The new ranking covers the same two online programs for high quality, but it also adds a focus on meeting the unique needs of veterans.

The new rankings consider only distance-education programs housed in accredited institutions and performing well in areas including program reputation, faculty credentials, high student graduation rates and low graduate debt loads. The new rankings also consider criteria related to whether course credits are portable and relatively inexpensive for veterans, such as whether the institution is certified for the GI Bill, is a member of the Servicemembers Opportunity Colleges (SOC) Consortium, and participates in the Yellow Ribbon Program.

Arizona State University overall has been recognized for its strong commitment to veterans on G.I. Jobs magazine’s “Military Friendly Schools” list five years in a row. Military Times Edge magazine also named ASU on its “Best for Vets” list. ASU has the Pat Tillman Veterans Center to help bolster engagement and guidance for the veteran population in areas like housing, career services, tutoring, and health and counseling services. The university has awarded more than 1,500 degrees using GI Bill benefits.

“Veterans and those serving in the military have repeatedly chosen the W. P. Carey School’s online programs because we feature a team-oriented, flexible approach,” says Stacey Whitecotton, senior associate dean for W. P. Carey School graduate programs. “In the online MBA program, for example, students work in small, personalized teams with peers from other industries, typically focusing on one course at a time. We also offer one of the few online MBA programs that allow students to customize their degrees with an area of emphasis, such as finance, international business, marketing or supply chain management.”

Among those who have completed the online MBA program is Lt. Col. Scott Coulson – a recipient of the Bronze Star, a Purple Heart and a Combat Action Badge for his service in Iraq. He completed his MBA degree while serving in the U.S. Army in Afghanistan.

The school’s online Master of Science in Information Management (MSIM) program is also popular, designed to prepare graduates for a career in the fast-growing information technology (IT) field. American Express, Intel Corporation, Mayo Clinic and US Airways are among the companies that send students to the school’s MSIM programs.

To learn more about the W. P. Carey School’s online programs — all offering small class sizes, a dedicated financial-aid specialist and a career center for help with job searches — visit www.wpcarey.asu.edu.

Also today, GraduatePrograms.com issued a new ranking, placing the W. P. Carey School of Business’ full-time MBA program among the Top 25 worldwide. The new No. 21 ranking is based on student experience. The site conducted a survey of both current and recent graduate students.

housing.prices

What Comes Next for housing market?

The Phoenix-area housing market is experiencing a normal seasonal spring bounce in activity and prices, but what will happen next? A new report from the W. P. Carey School of Business at Arizona State University talks about the waves of consumers that will likely start returning to the housing market next year, for the first time since the recession.

Here are the latest details about Maricopa and Pinal counties, as of March:

> The median single-family-home sales price recovered from two months of drops and is back to a level similar to December.
> However, demand and sales activity are still dramatically lower than at this time last year.
> The report’s author examines why certain waves of consumers may start returning to the housing market over the next several years.

Phoenix-area home prices quickly rose from a recession low point in September 2011 until last summer, when the jumps slowed down. Then, this January and February, we saw the first two back-to-back monthly drops in the area’s median single-family-home sales price. This March, we saw that dip erased, but probably not for long.

“The bounce is a normal effect of the busy spring sales season, combined with a lot more high-priced homes in the current sales mix,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The period from March to May is almost always the strongest part of the year for demand, and it is highly probable we will see pricing fade again during the summer months, when the luxury, snowbird and active-adult markets go relatively quiet. We may still be looking at little to no annual price appreciation by the end of the year.”

The median single-family-home sales price was up about 17 percent from last March to this March – from $175,000 to $204,520. The average price per square foot was up 15.5 percent. The median townhouse/condominium sales price was up 16 percent. We no longer have a tight supply of homes for sale like we did at this time last year. Supply stabilized in March, with 64 percent more listings this April 1 than last April 1.

However, low demand continues to be a problem. Single-family-home sales activity was down 20 percent this March from last March. Some of the drop comes from regular home buyers, but also institutional investors are just not as interested in Phoenix, now that better bargains can be found in other parts of the country with more foreclosures. The percentage of residential properties purchased by investors in the Phoenix area this March was down to 17.4 percent from the peak of 39.7 percent in July 2012.

“The institutional investors are doing very little buying or selling in the Phoenix area at the moment,” says Orr. “Their focus has turned to property management, rather than acquisition or disposal.”

The areas doing especially well right now in Phoenix?

Luxury homes priced at more than $500,000 represented 11 percent more of the market’s sales activity this March than last March. High-end demand above $1.5 million was greater in the first quarter of this year than in any first quarter since 2007.
Rental homes are experiencing very strong demand. Interest is so robust that only a one-month supply is currently available on the market.
Multi-family construction permits are on a strong upward trend. In fact, Orr says the first quarter of 2014 was the second-highest quarter for multi-family permits in 12 years.

Meantime, single-family construction permits were down 18 percent this March from last March. New-home sales were down 15 percent.

Orr says, “A key underlying problem for current housing demand is lack of household formation due to many factors, including unemployment, falling birth rates, lower net migration and greater home-sharing, especially among millennials. However, we could see lenders become the most influential decision-makers in this situation. Many lenders are hurting for business, with applications at their lowest level since 2000, and some may become more forgiving, accepting lower credit scores for loans.”

Orr also predicts we’ll see the first major waves of consumers who lost their homes through foreclosure during the recession coming back into the market, starting next year. He says those who lost their homes at the beginning of the downturn will have spent their required seven years in the “penalty box,” and they’ll reemerge from 2015 to 2019. He adds it’s just a question of how many of them want to try again at home ownership.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Top Ten Sports Bars, Photo: Clintus McGintus, Flickr

ASU unveils innovative sports law programs

If you want to work with professional sports teams, big sporting events or promising student athletes, then you may be interested in the innovative new sports law and business program officially being launched this week by Arizona State University. The highly ranked Sandra Day O’Connor College of Law and W. P. Carey School of Business at ASU are collaborating on two new sports law graduate degrees you can earn in just one year. Classes begin this fall.

“I’ve worked in the sports law field for three decades, and can see we need professionals who have training in both law and business to help work on regulatory and revenue issues in the sports industry,” says professor Rodney K. Smith of the College of Law, director of the new programs. “I don’t know of any other program in the country that offers a master’s degree like this with just a single, intensive year of study.”

The two new one-year degrees are a master of legal studies (MLS), for those without a law background, and a master of laws (LLM), for those who already graduated from law school. In each program, students will work on 18 to 21 credits from the law school, and six to nine credits from the W. P. Carey School. This includes an externship, which might be for a professional sports team, a sports law firm or even a big event like a college bowl game. The programs are going to be small and personalized, accepting fewer than 30 people each in their first year. They will also focus on team-based learning and look at real-world issues, such as stadium problems, player unionization and contract negotiations.

Ray Anderson, ASU vice president of university athletics and a former executive vice president of football operations for the National Football League, will be a professor of practice in the programs. He wanted to be part of a high-quality sports offering, and this one is located in a metropolitan area with three professional sports teams, major golf events, college football bowl games and even next year’s Super Bowl.

“I am proud to be a part of the Sandra Day O’Connor College of Law Sports Law and Business Program because it is the only one of its kind to offer a sports-focused graduate program that combines the strengths of a top law school with a top business school as its foundation,” Anderson says. “One of the reasons I came to Arizona State University from the National Football League is because of the vibrant Phoenix sports market, with its combination of sporting events representative of all major sports leagues and organizations. This fact, combined with a premier research university, will produce top-quality learning experiences for students in the curriculum.”

Courses in the new program will encompass both law and business areas, including “Sports Business Strategy and Industry Dynamics,” “Negotiations and Drafting in the Sports Industry,” and “Problems in Professional Sports Law and Business.” Big-name speakers from the world of sports are expected to participate, as well.

“The sports industry is complex and expanding,” says marketing professor Michael Mokwa of the W. P. Carey School. “The new program will provide skills and savvy for individuals seeking to make a real difference in the field.”

For more information about the new one-year degrees, visit law.asu.edu/sportslaw. A three-year juris doctorate program will also be added this fall for those who want to pursue their law degree with an emphasis in sports law and business.

grocery

Expect to Pay More for Certain Groceries

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores and to pay higher prices for those items. Professor Timothy Richards of the W. P. Carey School of Business at Arizona State University recently completed some research on which crops will likely be most affected and what the price boosts might be.

“You’re probably going to see the biggest produce price increases on avocados, berries, broccoli, grapes, lettuce, melons, peppers, tomatoes and packaged salads,” says Richards, the Morrison Chair at the Morrison School of Agribusiness within the W. P. Carey School of Business. “We can expect to see the biggest percentage jumps in prices for avocados and lettuce – 28 percent and 34 percent, respectively. People are the least price-sensitive when it comes to those items, and they’re more willing to pay what it takes to get them.”

Industry estimates range from a half-million to 1 million acres of agricultural land likely to be affected by the current California drought. Richards believes between 10 and 20 percent of the supply of certain crops could be lost, and California is the biggest national supplier of several of those crops. For avocados, the state is the only major domestic source.

Richards used retail-sales data from the Nielsen Perishables Group, an industry analytics and consulting firm, to estimate price elasticities – how much the prices might vary – for the fruit and vegetable crops most likely to be affected by the drought. Those most vulnerable are the crops that use the most water and simply won’t be grown, or those sensitive to reductions in irrigation.

He estimates the following possible price increases due to the drought:

* Avocados likely to go up 17 to 35 cents to as much as $1.60 each.
* Berries likely to rise 21 to 43 cents to as much as $3.46 per clamshell container.
* Broccoli likely to go up 20 to 40 cents to a possible $2.18 per pound.
* Grapes likely to rise 26 to 50 cents to a possible $2.93 per pound.
* Lettuce likely to rise 31 to 62 cents to as much as $2.44 per head.
* Packaged salad likely to go up 17 to 34 cents to a possible $3.03 per bag.
* Peppers likely to go up 18 to 35 cents to a possible $2.48 per pound.
* Tomatoes likely to rise 22 to 45 cents to a possible $2.84 per pound.

“We predict the increased prices will change consumer purchasing behavior,” says Sherry Frey, vice president of Nielsen Perishables Group. “We’ve identified certain consumers who will be more heavily affected by the price increases — for example, younger consumers of avocados. In addition, there is a larger department and store impact retailers will need to manage. While some consumers will pay the increased prices, others will substitute or leave the category completely. And, for a category like avocados, there are non-produce snacking categories, such as chips, crackers and ethnic grocery items, that will be negatively impacted.”

Richards adds, “One other thing for shoppers to understand — Because prices are going to go up so much, retailers will start looking elsewhere for produce. This means we’ll see a lot more imports from places like Chile and Mexico, which may be an issue for certain grocery customers who want domestic fruit and vegetables.”

140054736

W. P. Carey Honors Executive of the Year

Jim Davidson has played a key role in some of the biggest deals in the technology industry, including investments in Dell, Skype, Go Daddy, Alibaba, Avago, Seagate and Sabre Holdings, which operates Travelocity. For his impressive work in the investment arena, the W. P. Carey School of Business at Arizona State University will honor Davidson – co-founder, managing partner and managing director of Silver Lake – with the school’s annual Executive of the Year Award next week.

“Jim Davidson has helped many businesses to strategically invest and grow into market leaders,” says W. P. Carey School of Business Dean Amy Hillman. “He has been an active advisor in the technology industry for more than a quarter of a century and is considered a pioneer in the world of technology investments.”

Davidson co-founded Silver Lake in 1999 and has helped the technology-focused private-equity firm grow to manage more than $23 billion in assets and employ more than 200 professionals around the world. The firm’s portfolio currently includes or has previously included such companies as Alibaba, Ameritrade, Avago, Go Daddy, the NASDAQ OMX Group, Sabre Holdings, Seagate and Skype. The firm was also instrumental in the recent $25 billion deal in which Silver Lake partnered with Michael Dell to take Dell Inc. off stock exchanges to become private again.

Prior to his work at Silver Lake, Davidson was a managing director at Hambrecht & Quist, a technology-focused investment bank and venture capital firm that helped underwrite the initial public offerings (IPOs) of Apple, Netscape and Amazon.com. He was also a corporate securities attorney.

Davidson serves on the board of SMART Modular Technologies, a designer, manufacturer and supplier of flash memory cards and other digital storage products. He has also served on the boards of directors of many other Silver Lake investments, including Avago, Seagate and Skype. He is an active angel investor and advisor to several private tech companies and also serves on the boards of nonprofits, including the University of California, Berkeley’s Center for Entrepreneurship & Technology and the U.S. Olympic Foundation Board of Trustees.

Davidson becomes the 31st annual Executive of the Year chosen by the Dean’s Council, a national group of prominent executives who advise the W. P. Carey School of Business. Previous honorees include Howard Schultz, chairman and chief executive officer of Starbucks Coffee Company; Alan Mulally, president and chief executive officer of Ford Motor Company, and Mike Ahearn, chairman of the board of First Solar, Inc.

Davidson will be honored at a luncheon at the JW Marriott Camelback Inn in Scottsdale on April 17. The event, which starts at 11:45 a.m., is part of the Economic Club of Phoenix speaker series. For more information about the club or to reserve seats, call (480) 727-0596 or visit www.econclubphx.org. Tickets are $75 per person for non-club members.

WPCarey-School-Sign

W. P. Carey School Ranks Top 30 Again

U.S. News & World Report announces its prestigious annual list of the “Best Graduate Schools” in the country today. For the seventh year in a row, the W. P. Carey School of Business at Arizona State University ranks Top 30 nationwide among full-time MBA programs. The school’s evening MBA program also ranks Top 20 among part-time MBA programs.

“We’re happy the new rankings confirm we’re achieving consistent excellence here at the W. P. Carey School of Business,” says the school’s dean, Amy Hillman. “We have a phenomenal group of faculty, staff and students who repeatedly boost us to the top, year after year.”

On the new rankings list, the W. P. Carey School’s full-time MBA program comes in at No. 27, the best ranking for any Arizona school. The numbers are largely based on the positive reputation of schools among corporate recruiters — who offer students jobs — and among top administrators from peer business schools in the know.

“We are proud to offer one of the three least expensive programs in the Top 30,” explains Stacey Whitecotton, the W. P. Carey School’s senior associate dean of graduate programs. “We also have one of the two smallest programs in the Top 30, allowing us to keep the class sizes small and personal.”

The W. P. Carey School’s evening MBA program ranks No. 18 for part-time MBA programs nationwide. The evening program is offered in both Tempe and north Scottsdale, and it’s the highest ranked part-time MBA program in Arizona. The school also offers other part-time programs not eligible for inclusion in this particular set of new rankings: an acclaimed online MBA program that U.S. News & World Report ranked No. 2 nationwide earlier this year and a weekend MBA program that mixes online learning and campus classes every other Friday and Saturday.

The new U.S. News & World Report rankings also include other graduate-level “specialties” lists. The W. P. Carey School’s renowned supply chain management program ranks No. 3 for supply chain/logistics. The information systems program ranks No. 12 in its category. In addition, ASU’s Ph.D. program in economics ranks No. 36.

Other recent high rankings for the W. P. Carey School of Business:

> U.S. News & World Report ranks the school’s undergraduate business program No. 27 in the nation.
> Britain’s Financial Times ranks the school’s online MBA program Top 10 worldwide.
The Financial Times ranks the school’s China-based executive MBA program No. 28 worldwide.
> The University of Texas at Dallas ranks the W. P. Carey School Top 25 in the United States and Top 30 worldwide for business-school research productivity.
The Center for World-Class Universities at Shanghai Jiao Tong University ranks the W. P. Carey School No. 21 in the world for economics/business.

housing.prices

Phoenix Home-Price Rebound May Be Over

The big home-price rebound in the Phoenix area may officially be over. For the first time since last summer, the market experienced a month-to-month decrease in the median single-family-home sales price. A new report from the W. P. Carey School of Business at Arizona State University reveals that and other details about Maricopa and Pinal counties, as of January:

> The median single-family-home sales price was $196,900.
> Demand is very low, from both investors and normal homeowner-occupiers.
> Phoenix-area home prices are finally back in line with the Consumer Price Index, as if the recession and recovery had never happened.

Valley home prices started quickly rising after hitting a low point in September 2011, but they began slowing down this past July. Finally, this January, the median single-family-home sales price hit $196,900 — down 4 percent from December. It was the first month-to-month drop since the normal summer seasonal blips, and it’s largely due to a big drop in demand/sales activity.

“January is usually the quietest month of the year for sales, but this January was far weaker than January 2012 and 2013,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Despite the huge price increases between January 2013 and 2014, the total dollars spent on homes here this January actually dropped by 7 percent. This is the second lowest level of demand we’ve seen in 14 years, behind only 2008.”

Still, the median single-family-home sales price remained up 21 percent from last January, when it was at $163,000. Realtors will note the average price per square foot was up 19 percent. The median townhouse/condo price was up about 17 percent.

“The price gains now are weak, but it’s not clear that they’ll get much weaker or stronger,” explains Orr. “We’ve already seen a significant change in the market, which has completed its rebound from the artificially low prices between 2009 and 2011. Pricing is back to the level it would have attained if it had increased from 2000 in line with the Consumer Price Index.”

Demand from both investors and ordinary owner-occupiers is way down. Even though the available supply of homes for sale was up 47 percent from Feb. 1 of last year to Feb. 1 of this year, sales activity plummeted. Sales of single-family homes were down 23 percent from last January to this January. Sales of townhomes and condos were down 18 percent.

Luxury homes are one of the only bright spots in the market, with homes above a half-million dollars representing 14 percent more of the sales transactions this January than last January. However, even the supply of luxury homes is quickly rising, so sellers in that space will face tougher competition in 2014.

Investors continue looking to other parts of the country for bigger bargains, since Phoenix prices have risen. In January, the percentage of residential properties bought by investors was down to 21.1 percent from the peak of 39.7 in July 2012.

New home sales were also down 21 percent from last January to this January, representing the steepest fall in new-home closings in several years. Millennials and those who lost their homes to foreclosure or short sale in the recession appear more interested in renting than buying. That’s led to an upward trend in multi-family construction permits. It could also lead to higher rental rates in the next two years, during which time, home sales may continue to be relatively slow.

“The market conditions suggest prices will struggle to make any further upward progress in 2014,” Orr adds. “With February through June the strongest part of the year, we may yet see a little forward movement, but it’s likely to be tentative at best. The real test will come in the second half of the year, which is likely to see lower prices unless demand takes a distinct turn for the better.”

Foreclosure levels remain below the normal, historic trends for Maricopa and Pinal counties. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 55 percent from January 2013 to this January. Completed foreclosures were down 54 percent.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

McCordHall, WEB

REIAC Forms Alliance with MRED Program at W. P. Carey School of Business

The Southwest Chapter of REIAC, an organization of real estate executives involved in developing, acquiring and/or financing real estate, has formed a partnership with Arizona State University’s Masters of Real Estate Development (MRED) program at the W. P. Carey School of Business.

REIAC has provided $5,000 in scholarships for the 2013-14 academic year and recently awarded two MRED students with $2,500 awards. Requirements of the scholarship program include being a full-time student, an Arizona resident and preferably, having the desire to work locally upon graduation.

“Aligning with the MRED program is a way to bridge the gap between academic knowledge and professional standards, strengthen the investment management arena and ultimately better the commercial real estate community as a whole,” said Todd Jarman, board president of REIAC Southwest and senior vice president, BBVA Compass.

In addition to the scholarship program, REIAC is hosting the REIAC/Rockefeller Group Challenge in the spring, a MRED student case study competition sponsored by The Rockefeller Group. The competition will be judged by REIAC members and MRED faculty, for a cash prize of up to $6,000 to the winning student team.

REIAC is looking for MRED teams to demonstrate their strategy for a local development project that includes acquisition, financing, entitlements and design.

“Our students will be demonstrating their ability to apply mastery of a real estate investment and development opportunity and determining the feasibility of development, from analyzing existing buildings to working with local agencies, dealing with market realities, design, construction, finance and legal issues,” said Mark Stapp, executive director of MRED.

“The REIAC/Rockefeller Group Challenge provides students an experience that teaches them how to apply the theory of real estate in a practical way only available because of local industry support that comes from this Challenge,” Stapp said.

“Many of Phoenix’s real estate executives have ties to ASU and a significant number are also members of REIAC. The alliance allows for the students to have access to local real estate leaders and we’re looking forward to seeing the teams showcase their talents in the annual REIAC/Rockefeller Group Challenge,” said Mark Singerman, REIAC board member and regional director-Arizona for The Rockefeller Group.

The Rockefeller Group has a longstanding history of supporting education. The W.P. Carey Evening MBA program will be located at The Rockefeller Group’s Chandler 101, an 844,000 SF mid-rise office development in Chandler’s Price Corridor.

WPCarey-School-Sign

W. P. Carey School Ranks No. 2 in the Nation

Online degree programs are skyrocketing in popularity, and if you’re looking for an online MBA or other graduate degree, then the W. P. Carey School of Business at Arizona State University is an excellent choice. For the second year in a row, U.S. News & World Report ranks the school No. 2 nationwide on its list of “Best Online Graduate Business Programs.”

“Increasingly, people want the convenience of an online degree, but they don’t want to sacrifice the high quality of a recognized, top university,” explains Amy Hillman, dean of the W. P. Carey School of Business. “With the W. P. Carey School, you get the best of both worlds: the flexibility of an online format and the same stellar faculty members who teach in our other highly ranked graduate programs. The W. P. Carey School was one of the first highly respected business schools to launch online degrees more than a decade ago, and we use in-house course designers specializing solely in business classes.”

U.S. News & World Report already ranks the W. P. Carey School’s undergraduate business, full-time MBA and evening MBA programs among the Top 30 in the nation in their categories. This new ranking covers both the W. P. Carey School’s popular online MBA program and its online Master of Science in Information Management (MSIM) program. The list is based on student engagement, admissions selectivity, peer reputation, faculty credentials and training, and student services and technology.

“Students serving in the military, starting their own businesses, and traveling extensively for their jobs are among those who have chosen our online graduate business programs,” says Stacey Whitecotton, senior associate dean for W. P. Carey School graduate programs. “Participants have a dedicated financial aid specialist and a career center for those who want help with job searches.”

Again, the W. P. Carey School’s online MBA program garnered a No. 2 ranking last year, too. Among those who have completed the program: NFL Pro Bowl kicker Billy Cundiff and Lt. Col. Scott Coulson — a recipient of the Bronze Star, a Purple Heart and a Combat Action Badge for his service in Iraq — who completed his degree while serving in the U.S. Army in Afghanistan.

The 21-month MBA program allows students to meet at a face-to-face orientation just once at the ASU campus, then complete the rest of the courses online. Students work in small, personalized teams with peers from other industries, focusing on one course at a time. This is also one of the few online MBA programs in which students can earn their degrees with an area of emphasis, such as finance, international business, marketing or supply chain management.

The 16-month online MSIM program just launched in 2012 and is already drawing praise from those in the fast-growing information technology (IT) field. The degree is designed to provide professionals in any career area with a well-rounded education in IT and explain how they can apply that knowledge to their companies overall. American Express, Intel Corporation, Mayo Clinic and US Airways are among the companies that send students to the school’s MSIM programs. The W. P. Carey School’s MSIM programs have an exceptionally high retention rate, thanks to efforts by the world-class faculty and collaborative-learning training for students during orientation.

The W. P. Carey School also offers a weekend/online hybrid MBA and will launch an online version of its master’s program in business analytics (“big data”) this fall. All of the school’s online programs include small class sizes and comprehensive online-learning technologies that are easy to use. For more information, visit wpcarey.asu.edu.

housing.prices

Phoenix Housing Market Quiets Down

The Phoenix-area housing market is quietly ending the year, with a drop in demand and activity. A new report from the W. P. Carey School of Business at Arizona State University provides the latest data for Maricopa and Pinal counties, as of October:

* The median single-family-home price was up 27 percent, to $200,000, since last October, but price increases are slowing down.
* Demand is rapidly dropping, and the supply of homes available for sale is quickly rising.
*First-time home buyers, especially those under 30, are showing little interest in getting into the market.

Phoenix-area home prices have been going up since they hit a low point in September 2011. The median single-family-home price went up an incredible 71 percent from October 2011 to October 2013. It rose 27 percent – from $157,000 to $200,000 – from just last October to this October. Realtors will note the average price per square foot went up about 24 percent year-over-year. The median townhouse/condo price rose 27 percent, to $119,900.

However, the report’s author says the market has been cooling since July and will continue to lose momentum.

“I anticipate sales will be way down in November and through the holidays, when some people even take their homes off the market until late January,” says Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “We also anticipate a much slower rate of price appreciation in 2014 than the furious pace we have witnessed over the last two years.”

Conditions are getting better for buyers and worse for sellers, as the supply of homes available for sale has been rising fast. The Phoenix area had 40 percent more active listings (those not under contract) this Nov. 1 than last Nov. 1. At the same time, demand has been plummeting. The amount of single-family-home sales activity dropped 19 percent from last October to this October.

Orr believes supply will exceed demand before the end of the year, even though supply is still 15 to 20 percent below what would be considered normal. He blames the sudden weakness partly on poor consumer sentiment, including concern over the recent government shutdown. He also notes Census numbers showing fewer households are forming, as some young adults stay with their parents and others show little interest in leaving their rentals to buy a home.

“When you ask people under 30 whether they want to buy a home, they’re not planning on it like past generations,” explains Orr. “Also, demand for starter homes is limited by the difficulty of first-time home buyers in qualifying for loans. Plus, less than 3 percent of the new homes sold in Maricopa County in October were priced below $150,000, so new entry-level homes are getting very scarce.”

Investors and out-of-state buyers are also losing interest in the Phoenix area. The percentage of residential properties purchased by investors has dropped from the peak of 39.7 percent in July 2012 down to 22.6 percent this October. The percentage of Maricopa County homes sold to out-of-state buyers was down from 20.1 last October to 16.4 this October. That’s the lowest percentage since January 2009.

The luxury home market continues to gain ground, with the stock market booming and the growing availability of jumbo loans. Sales of single-family homes priced above $500,000 grew 34 percent from last October to this October. At the same time, sales of lower-end homes priced below $150,000 fell by almost half — 49 percent.

Cheap homes are hard to find as foreclosure levels continue to drop. The number of completed foreclosures fell about 64 percent from October 2012 to this October. The number of foreclosure starts — owners receiving notice their lenders may foreclose in 90 days – dropped 50 percent at the same time.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

microchip technology

Phoenix Joins Initiative to Promote Global Trade

The Greater Phoenix Economic Council announced the region has been selected as one of eight metro areas in the country to join a new exchange network created by the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase. The Exchange is a network of metropolitan areas committed to promoting greater global trade and economic competitiveness. As part of the inaugural Exchange, Greater Phoenix will be required to design and implement a regional export plan in 2014.

In Greater Phoenix, the Global Cities Initiative will be led City of Phoenix Mayor Greg Stanton and a core leadership team including the following representatives:

> Joe Stewart, market manager – AZ & NV Middle Market, Chase
> Dennis Hoffman, professor and director, L. William Seidman Research Institute at the
W. P. Carey School of Business at Arizona State University
> Barry Broome, president and CEO Greater Phoenix Economic Council

“A strong trade and export strategy is critical to our region’s economic vitality, so I’m honored to lead this initiative for Greater Phoenix,” Mayor Stanton said. “I look forward to working with my fellow mayors and business and community leaders to build a regional export plan that capitalizes on our unique assets and advances a stronger and healthier economic platform by expanding our global trade and investment strategies.”

Other participating groups include the Arizona Export District Council, Canada-Arizona Business Council, Intel and the Arizona Commerce Authority.

Brookings selected metropolitan areas to join the network after an extensive application process that evaluated regions’ readiness and capability to pursue the Exchange’s curriculum and commitment to fulfill its goals. Greater Phoenix joins Atlanta; Greenville, S.C.; Indianapolis; Jacksonville, Fla.; Milwaukee; Phoenix; Sacramento, Calif.; and Wichita, Kan., in the Exchange’s inaugural class, which will work together over the next four years to establish new metro-to-metro relationships and to share best practices in global economic development.

“For the Exchange, we selected metro areas that are committed to expanding their global economic reach by working together to identify regional competitive strengths and increase exports,” said Brad McDearman, Brookings fellow. “The eight metro areas selected for this round represent a growing group of U.S. metro areas that understand the need to embrace the global market to remain competitive in the 21st century economy.”

Over time, the network will expand to include additional U.S. and international cities working together to strengthen their local economies through increased engagement with the rest of the world. This builds on the Global Cities Initiative’s work, which equips metropolitan leaders with the information, policy ideas, and global connections they need to bolster their regions’ positions in the global economy.

“I’m delighted Greater Phoenix will be a part of this new network – it’s exactly the kind of innovative planning that is needed to ensure our community’s long-term economic success,” said Joe Stewart, market manager – AZ & NV Middle Market, Chase. “We have a long history of helping businesses connect to global markets and now the Exchange brings additional resources to help our region’s leaders design strategies to further create jobs and grow our economy through greater global engagement.”

The Global Cities Initiative supports the region’s existing efforts to implement the Brookings Metropolitan Business Plan (MBP), where business, university, political and civic leaders have adopted several core strategies to leverage  the region’s assets in a way that secures economic strength for Greater Phoenix through the 21st century. The Global Cities Initiative will serve to fulfill the MBP’s global export and foreign direct investment strategy. Further details about the MBP will be announced in early 2014.

“It’s fantastic that Greater Phoenix is participating in this initiative – a reflection of our unified commitment to attract and retain export-based businesses that are ultimately responsible for regional economic growth and prosperity,” said Dennis Hoffman, professor and director, L. William Seidman Research Institute at the W. P. Carey School of Business at ASU. “A strong research university is an important attractor for businesses seeking talent and knowledge capital that can help them succeed in global markets, and I am pleased to represent ASU in this initiative.”

Metro area leaders play a critical role in promoting trade and developing infrastructure. Regional economic development leaders representing both the public and private sectors can help local firms access new markets and align existing export services because they know their regions best. These leaders are also best equipped to coordinate regional assets—such as skills training, innovation capacities, and freight and logistics—to better support global trade.

“In Greater Phoenix, we are already making exports and foreign direct investment a central and consistent part of our broader regional economic development strategy. Adding this partnership with the Global Cities Initiative will only strengthen our results,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “I look forward to the collaboration involved – not only within our own regional leadership but also with the other participating metro areas – to advance and diversify our region’s economy and solidify our future prosperity.”

In December, the Greater Phoenix Exchange team will join those of the other accepted metropolitan areas at Brookings in Washington to participate in their first working group session, where they will learn how to develop an export plan as part of a global economic development strategy. Throughout the four-year Exchange, participating metros will periodically convene for in-person working groups and will continually engage in curriculum via conference calls and webinars.

Coinciding with the work of the Exchange, Greater Phoenix will host a forum in 2014, bringing together regional and national experts on trade. Greater Phoenix is the only metro participating in the Global Cities Initiative to host such a forum. Its proximity to Mexico and trade relationships position the region as the ideal host of a conversation on global trade and exports.

housing.prices

Phoenix Housing Market Affected by Government Shutdown

The government shutdown may have dampened interest in buying Phoenix-area homes this fall. A new report from the W. P. Carey School of Business at Arizona State University shows the latest data for Maricopa and Pinal counties, as of September:

* The median single-family-home price was up about 33 percent from last September, to $199,000.
* However, demand is waning, and that may be at least partly due to the recent government shutdown creating economic uncertainty.
* Meantime, housing supply continues to rise, with more people willing to put their homes on the market as prices go up.

Phoenix-area home prices have been rising since hitting a low point in September 2011. The median single-family-home price rose 32.7 percent — from $150,000 to $199,000 –from last September to this September. Realtors will note the average price per square foot went up 22 percent. The median townhouse/condo price went up 30 percent, to $117,000. However, the price gains are expected to slow down.

“Since the beginning of July, the Phoenix-area housing market has cooled dramatically,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The main change is a steep fall in demand, which we can see in the 12-percent drop in single-family-home sales activity just between August and September alone. Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years.”

Orr says the recent government shutdown may be at least partly to blame for the hard brakes on the housing market.

“The sudden weakness in owner-occupier demand since July is unusual and unexpected,” says Orr. “Poor consumer sentiment and concern over the government shutdown seem to have accelerated the decline. We also have no government information available yet on new-construction permits because of the shutdown.”

On the positive side, the number of available homes for sale continues to rise, after the area experienced a very tight supply for months. Active listings, not including those already under contract, went up 32 percent from Oct. 1 of last year to Oct. 1 of this year. More people appear willing to put their homes up for sale as prices rise.

“If the current trend continues, supply will exceed demand by the end of the year,” says Orr. “We now expect a balanced market to prevail during November. This is great news for buyers since they will experience less competition and be in a strong position to negotiate.”

The luxury market continues to perform well, thanks to the rising stock market and a big increase in the availability of jumbo loans. Sales of $500,000-plus, single-family homes grew an incredible 51 percent from September 2012 to September 2013.

However, cheap homes are tough to find, with fewer foreclosures coming onto the market. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – dropped 61 percent from last September to this September. Completed foreclosures declined 63 percent. Orr expects foreclosures to keep falling over the next several years, thanks to tight underwriting standards.

Institutional investors and out-of-state buyers continue to lose interest in the Phoenix area, since better bargains can now be found elsewhere. The percentage of homes and condos bought by investors in September was down to 22.7 percent, from the peak of 39.7 percent in July 2012. Also, the percentage of Maricopa County residences sold to owners from outside Arizona was only 16.4 percent, the lowest percentage since January 2009.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

customer.service

Getting Better Customer Service

How can your favorite businesses improve your customer experience and offer better types of service? Business leaders from around the world will gather in Phoenix next week to learn how to gain an advantage and win your loyalty. The 24th annual Compete through Service Symposium will feature speakers from Cisco, Disney Institute, FedEx Services, HP, IBM, Vanguard and other household names.

Some of the topics being covered this year: How services can help differentiate your business, lessons in innovation, how to use smart analytics, and how to create “wow” through the smallest things to make a difference for your customers.

This event is hosted by the prestigious Center for Services Leadership at the W. P. Carey School of Business at Arizona State University. The center was created in response to the unique challenges faced by companies as services have become a driving force in economies around the world, with less growth happening in products and manufacturing. The center’s member firms include Boeing, FedEx, GE, IBM, Mayo Clinic, Michelin, PetSmart, State Farm Insurance Company and other household names. The center also offers online courses, a list of which can be found at http://wpcarey.asu.edu/research/services-leadership/online-courses.

WHEN: Wednesday to Friday, Nov. 6-8, Full schedule available at http://wpcarey.asu.edu/symposium

WHERE: Marriott Renaissance Phoenix Downtown Hotel, 50 E. Adams St., Phoenix, AZ 85004

WPCarey-School-Sign

W. P. Carey School Dedicates New McCord Hall

One of the nation’s largest and highest-ranked business schools dedicated a brand new, state-of-the-art facility today. The W. P. Carey School of Business at Arizona State University held a ceremony to mark the official opening of its 129,000-square-foot McCord Hall.

“We believe we’ve built the most advanced learning environment available for graduate business students,” says W. P. Carey School of Business Dean Amy Hillman. “Every detail was designed to teach students in a way that makes them better contributors to today’s work environment. The building has an emphasis on collaboration, discussion-based learning and flexibility.”

The new building is being added to the school’s two existing structures, which were renovated during this project. Together, they will ease overcrowding for the 10,000-plus students who attend the W. P. Carey School. McCord Hall will be home to the school’s graduate and executive-education programs, including the Top 30 nationally ranked MBA programs.

The impressive facility features modern architecture, technologically advanced tiered and flat classrooms, a multipurpose event space, a new graduate-level career center, team rooms, study areas, outdoor assembly areas, a lounge for honors undergrads, and a health-conscious café. McCord Hall is also environmentally friendly, with less water and energy use than similar buildings and a solar array that returns power to the campus grid. The project totaled $57 million, and the return on investment is expected to be great.

“We estimate the project has already had an economic impact on the gross state product of $64 million and the creation of 880 jobs,” says Professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business. “Of course, the value of the construction does not include the added value that will accrue from the human capital produced in McCord Hall’s learning environment, allowing students to acquire knowledge and skills to compete in today’s economy.”

ASU President Michael Crow and Hillman presided over the dedication ceremony at the university’s Tempe campus. Philanthropist Sharon Dupont McCord and other building donors also took part. McCord and her late husband, Bob, are the major donors behind the facility’s name. More than $17 million in gifts and pledges from area companies and families, as well as other various sources, are helping to fund the building. Student support has been robust.

To learn more about the W. P. Carey School of Business, visit wpcarey.asu.edu. For more information about McCord Hall, go to http://building.wpcarey.asu.edu/. Donations to the building campaign can still be made at asufoundation.org/wpcbuilding. The W. P. Carey School’s full-time MBA, evening MBA, online MBA and undergraduate business programs are all currently ranked Top 30 in the nation by U.S. News & World Report.

Amy-Hillman

W.P. Carey dean wants the world to know about school

Amy Hillman, a renowned management professor and noted researcher, replaced Robert Mittelstaedt as dean of Arizona State University’s W.P. Carey School of Business in March and became the school’s first female dean.

Az Business sat down with the leader of the W. P. Carey School, ranked in the top 30 among the best graduate business schools in the nation by U.S. News & World Report, to talk about her goals as dean and how her background as a researcher impacts her leadership.

Az Business: What is your biggest challenge as dean of the W. P. Carey School of Business?
Amy Hillman: Keeping the school nimble as an organization. Technology is playing a transformative role in higher education. The skills and expertise needed to succeed in an organization change as a result. We have to stay close to our corporate partners to make sure we stay on the leading edge of business education.

AB: How has the transition from second in command to dean been so far?
AH: Great. In the second-in-command position, I focused internally. We have amazing students, faculty and staff, and we work with some great partners within ASU, outside of the business school. Now, I also get to spend time with alumni, corporate partners and donors. In addition, I interact a lot more with other business-school deans. It’s a full circle.

AB: What are the W. P. Carey School’s strengths?
AH: We have hard-working students, dedicated staff, a supportive community, and a really desirable and unusual faculty combination. It’s not that hard to find good teachers or good researchers, but our faculty members are both, and that’s much more difficult to achieve. They are world-class researchers on the cutting edge of new knowledge in their fields, as well as excellent teachers. Therefore, what they discover one day, they teach in class the next. Add to this, they care about the students’ success in school and future careers. We have a dynamite combination. That’s why we’re currently ranked Top 30 in the nation by U.S. News & World Report for all of our marquee programs — undergraduate business, full-time MBA, part-time MBA and online MBA.

AB: What makes you an effective dean for the W. P. Carey School?
AH: I love my work. I value relationships, but also performance. It also doesn’t hurt to be a management professor with real-world managerial experience. We have a lot of stakeholders to manage.

AB: How has your background prepared you to educate the entrepreneurs and business leaders of the future?
AH: In addition to my decades of work as a management professor and then executive dean, I also originally got my MBA because I needed skills to be a better manager in retail, before I ever went into academia. What I learned one night in my classes, I would apply the next day on the job. I also come from a family of entrepreneurs, so innovation and practicality loom large. I think this helps me stay focused on what we need to do to advance the practice of business.

AB: What are your goals as dean of the W. P. Carey School of Business?
AH: I’d like to build stronger — deeper and broader — corporate relations, increase lifelong value to our alumni, make our student experience a personal one, and make working at the W. P. Carey School of Business rewarding and fun. I’d also like to make sure the W. P. Carey School is no longer a “best-kept secret.” More people need to know all we do and how well we do it.

AB: What’s been the biggest change in education since you entered academia?
AH: I’d say one of the biggest changes to education as a whole — not specifically to business education — is the questioning of the value of education. This is unimaginable in developing nations like China. I was recently there with our executive MBA students in Shanghai. One of our speakers at an event was Nobel Laureate Ed Prescott, a W. P. Carey School of Business faculty member. Young kids wanted to have their pictures taken with him for his intellectual achievement. Sadly, I see too many people here in the United States who believe education isn’t the main driver of economic achievement.

AB: How has your background as a researcher impacted the way you educate the business leaders of the future?
AH: As a researcher, I’m strongly influenced by data, not anecdotes. So let’s analyze what’s happening before we jump to conclusions based on our personal observations. That said, most business research questions are big, complex ones without “one right answer,” so we need to train our students to look for patterns among data, but at the same time to embrace uncertainty. Make the best decisions with incomplete information. That’s the real world.

education.business

Educators say executives can increase workplace value

Despite signs of what most people view as a recovering economy, more than half of Arizona’s workforce stresses over job security.

A recent University of Phoenix survey revealed that 61 percent of working adults worry about losing their jobs in the current economic climate and 20 percent anguish over it at least once a week.

“In a challenging economic environment, workers should be doing more to position themselves as leaders in their organizations, but the survey finds that many are holding back at work, and this can have a negative effect on performance and productivity,” said Dr. Sam Sanders, college chair for University of Phoenix School of Business and a former human resources executive with more than 20 years of hiring and employee relations experience. “Those who understand the big picture and how their own skill sets help their companies achieve goals should have more confidence and can have an advantage in the workplace.”

To separate themselves from others and to create more job security, many executives are strengthening their skill sets through education.

“The trends in executive education is for shorter duration programs than those that preceded the recession, with emphases on acquiring skills that lead to promotions or career advancement and new market opportunities,” said Dr. Kevin McClean, interim dean, Ken Blanchard College of Business at Grand Canyon University. “Another key ingredient is the opportunity to network. These objectives are not really different from those that motivated people to pursue executive education in the past.”

Executive trends

Some of the shifts that educators are incorporating into graduate business programs include more emphasis on leading in turbulent times, developing organizational talent, innovation and creativity, and flexible, participative strategic planning.

“Executives are being asked to take on more responsibility and act more holistic in understanding the interdependencies of people and functions in organizations,” said Dr. Kirk Wessel, dean of Angell Snyder School of Business at Ottawa University. “This is being reflected in curricula.”

Educators are also being asked to help prepare executives and business students to deal with increasingly more complex business issues.

“For example, rather than teaching executives innovation or risk, we are talking about ‘risk-bound innovation,’” said Dennis Baltzley, Ph.D., senior vice president of executive education at Thunderbird School of Global Management. “Leaders want to know how to create an environment of innovation, while creating a ‘boundary’ of risk management. We must innovate, but more than ever, a bad decision can be fatal.”

Baltzley said Thunderbird is also seeing a dramatic interest in global global leadership.
Our customers want to know how to lead effectively across borders, cultures, different business models and philosophies,” Baltzley said. “Since 2008, growth has been slow in the U.S. and other mature markets. This led many businesses to leap into emerging markets with the promise of double digit growth whether they were ready or not, and most were not as ready as they would have liked.”

Paul Melendez, assistant dean of executive education at the Eller College of Management at the University of Arizona, said he is seeing four specific trends:
* Customization: Executive education is becoming much more tailored to specific organizations, with programs, content, and learning customized to the unique needs of the organization. While many business schools still offer one- or two-week open-enrollment programs, organizations are finding it more beneficial to develop a program that is tailored to their executives.
* Consulting: The natural extension of customized programs is a consulting model where education and problem-solving are combined into a program. “We have helped organizations develop their culture, strategically plan, and develop a wide variety of business improvement plans through programs that also provide education for leaders,” Melendez said.
* Strategic partnerships: Eller Executive Education has developed strategic partnerships with Miraval and Canyon Ranch to offer programs that join cutting-edge leadership and management principles and with world-class health and wellness programs which they have dubbed “integrative leadership.”
* Privatization: A year ago the university spun Eller Executive Education out of the UA to allow greater operating flexibility. “As a result, we are now providing many more custom program for private, governmental, and non-profit organizations,” Melendez  said. “We have seen a number of other state business schools also privatizing their executive education organizations.”

Increasing your stock

Michael Bevis, director of academic affairs at University of Phoenix, said more executives have started to approach their careers in the same way they approach business management by focusing on building their personal brands.

“When you think about a company brand, it isn’t just about what you are communicating, but how that brand addresses the needs of the intended audience,” Bevis said. “One of the things I work on with executives and other business students at University of Phoenix, is developing a personal business plan that starts with the personal mission statement. You wouldn’t run a business without a plan and the same should be true about your career. If you are not setting goals, measuring progress and making sure your knowledge stays current and relevant, your personal brand — like that of a company’s — can become stagnant.”

So what programs are out there for executives to utilize to strengthen their brand?

* University of Phoenix: Within the MBA programs, concentrations allow executives to grow specific skills. It is common for executives or business owners to have specific knowledge about an industry or certain aspects of business management, but skills or knowledge gaps in other areas. Concentrations can help professionals hone certain skills, such as people management, finance or marketing.

* Thunderbird School of Global Management: Thunderbird offers a range of options from its short programs — less than a week — to its more in-depth MBA offerings. “We have a Global MBA Online that allows you to learn global business from anywhere in the world and an Executive MBA that’s on-campus, but provides a schedule suited to the working professional. “ Baltzley  said. “We also offer online certificate programs which are designed specifically for working professionals looking to improve their marketability and gain a leading edge over their competition.

* W. P. Carey School of Business at Arizona State University: “Our executive-education programs, such as our leadership development workshops and our certificate programs in real estate, supply chain management, and service excellence, can give executives deeper skills and expose them to new ideas,” said Amy Hillman, dean of the W. P. Carey School of Business. “However, if they want to move into leadership roles beyond their current functional areas, then the MBA is the best option, though short non-degree courses that develop leadership skills are also helpful.”

* Eller College of Management: Eller Executive Education offers a variety of week-long programs and year-long programs for leaders of different types of organizations. “We are also launching a program in early 2014 that is specifically oriented toward CEOs of mid-sized to large companies,” Melendez said.

* DeVry University: Keller Graduate School of Management offers seven specialized master’s degree programs and 13 graduate certificate programs.

* Ken Blanchard College of Business: GCU offers very practical programs that include a master’s in leadership, a masters in accounting, and a masters in public administration.

* Angell Snyder School of Business: Case teaching methodologies teach executives to think critically about all internal and external factors that come into play in developing effective organizational strategies, irrespective of the industry.

Moving forward

The most important message that educators have for executives who may be worried about maintaining their position in the current economic climate is to stay current on trends in your industry, keep your brand current by understanding how your skills and experience fit into the big picture of an organization.

“This past year, we were asked repeatedly how to be effective in managing a diverse, multicultural, and geographically dispersed workforce, and how to stay relevant in a Volatile, Uncertain, Complex and Ambiguous (VUCA) world,” Baltzley said. “Without question the term ‘VUCA’ has come of age and has several implications for executives who want to remain relevant today.”

To stay in the game, Baltzley has three pieces of advice for executives:
1. Get your head into what it means to think globally. If you think your company is domestic and American, and it will never go global, you are wrong, global is coming to you. In fact, global is probably already there, in the form of complex supply chain issues or direct competitors, so you better get prepared.
2. A term coined in the late 1970’s is important here – “Permanent Whitewater” – That is, if you think the whitewater is going to slow down, or that a calm patch is just around the corner, you are mistaken. You have to prepare yourself for leading in constant change in scale and speed.
3. Check your personal leadership style. Are you able to influence people very different than yourself? Do you enjoy variety, the unknown, surprises? Is your self-confidence and personal energy level pretty high? Do you like to test yourself, take some risks? If you can’t answer “yes” to most of these, you have some work to do to become a more adaptive leader.

credit

Study: Young Credit Card Users Are MORE Responsible

If you think young people don’t know how to manage money and pay down their credit cards, then you should think again. A new study from the W. P. Carey School of Business at Arizona State University and the Federal Reserve Bank of Richmond shows young borrowers – 18 to 25 years old — are among the least likely credit card users to have a serious default on their cards. Not only that, they’re also more likely to be good credit risks later in life.

“Young credit card users actually default less than middle-age borrowers,” says Assistant Professor Andra Ghent of the W. P. Carey School of Business. “Also, those who choose to get credit cards early in life are more likely to learn from any minor defaults and move on, avoiding major credit card problems in the future. Plus, they’re more likely to be able to get a mortgage and become a homeowner at a young age.”

The new research by Ghent, as well as Peter Debbaut and Marianna Kudlyak of the Federal Reserve Bank of Richmond, is now a Federal Reserve working paper. In it, the researchers analyzed consumer data from the New York Federal Reserve Bank Consumer Credit Panel/Equifax to determine whether young borrowers are worse credit risks than others and to estimate the effect of individuals choosing to get a credit card at a young age.

The results demonstrate that part of the Credit Card Act of 2009 may not have been necessary. The act made it illegal to issue a credit card to individuals under 21 unless the person has a cosigner or submits financial information indicating an independent means of repaying the debt. It also includes a provision banning companies from recruiting credit card users within 1,000 feet of any college campus or at college events.

“Letting students apply for credit cards may actually make sense,” says Ghent. “These students are the people who want credit, need to build up a good credit history, and have a steeply sloped income profile. If they don’t have a student loan, then a credit card may be the only way they can establish a decent credit history.”

The researchers found that while people in their early 20s are more likely to experience minor delinquencies (30 or 60 days past due), they are much less likely to experience serious delinquency (90 days or more past due). In fact, someone age 40 to 44 is 12 percentage points more likely to have a serious delinquency than a 19 year old.

However, the Credit Card Act of 2009 has clearly had an impact on how many young people are getting credit cards. Individuals under 21 are 18-percent less likely to get a credit card following passage of the act, and that’s not necessarily a good thing.

“You can’t learn by just watching credit card use,” adds Ghent. “You have to get a card, pay it down every 30 days, and experience, in order to learn. It’s also hard to get a mortgage if you can’t get a credit card to build up your credit history.”

The full study is available at http://www.public.asu.edu/~aghent/research/DebbautGhentKudlyak_July2013.pdf.

Phoenix-Area Housing Market

Phoenix-area Housing Supply Increasing

Over the past two years, the tight supply of homes for sale in the Phoenix area has helped to dramatically drive up prices. However, a new report from the W. P. Carey School of Business at Arizona State University shows change on the horizon. The data for Maricopa and Pinal counties, as of August, reveals:

* The median single-family-home price is up 28 percent from last August, to $192,000.
* However, supply is finally starting to increase to help meet demand, and may be in balance by the end of the year.
* The luxury market is powering back, but might be derailed if the economy is pounded by the government shutdown and other events in Washington, D.C.

Phoenix-area home prices have shot up since hitting a low point in September 2011. From last August to this August, the median single-family-home price rose 28 percent – from $150,000 to $192,000. Realtors will note the average price per square foot went up 22 percent. The median townhouse/condo price rose 31 percent.

“We predicted the price-increase slowdown that happened over the summer months,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Now that temperatures are cooling, prices will start rising again, at least for the near term. However, they’re likely to go up at a less furious pace than the last two years.”

Orr says increases in the amount of homes for sale are helping to stop the price boom. As of Sept. 1 this year, the area had 29 percent more active listings (not under contract) than at the same time last year. As supply has been going up, demand has gone down, with sales of single-family homes 12 percent lower this August than last August.

“Although demand still exceeds supply, they are fast moving toward each other,” says Orr. “If the current pace of change continues, they are likely to be in balance before the end of the year. The seller is no longer holding all the cards in the Greater Phoenix housing market, and if their offers are countered aggressively, some potential buyers may walk away because they now have more alternatives.”

The types of transactions happening in the market are also noticeably shifting. Luxury homes over $500,000 grew their market share from 15 to 21 percent of the money being spent over the past year, while the lowest-priced homes (below $150,000) fell from 25 to 14 percent of the market.

“Access to finance at the high end of the market is very good, and we are seeing interest rates for jumbo loans even lower than the rates for conventional loans,” Orr explains. “However, if the stock market is negatively affected by events in Washington, then this will have an impact on the luxury housing market in Arizona.”

Investors continue to lose interest in the Phoenix market, with better bargains available in other parts of the country. The percentage of residential properties purchased by investors fell from the peak activity of 39.7 percent in July 2012 down to just 23.7 percent this August. The rates of all-cash buyers and out-of-state buyers are also dropping. In fact, the percentage of Maricopa County residences sold to non-Arizona owners in August was only 17 percent, the lowest percentage since January 2009.

Prices in all areas of Maricopa County are up over last year, and cheap foreclosures are tough to find. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – declined 61 percent from last August to this August. Completed foreclosures went down an incredible 73 percent.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

WPCarey-School-Sign

W. P. Carey School Honors Top Business Leaders

Three top business leaders will be honored for their innovation and achievements, when they are inducted into the W. P. Carey School of Business Homecoming Hall of Fame this month. They include the head of a famed jewelry company, a high-profile business founder from China, and a corporate leader at one of Arizona’s biggest companies.

On Oct. 17, they will join previous Arizona State University alumni inductees from such diverse organizations as the American Red Cross, Motorola, the U.S. Air Force, Wells Fargo Bank, XM Satellite Radio and the Arizona Diamondbacks.

“These stellar inductees represent strength, leadership and accomplishment in the business world,” says W. P. Carey School of Business Dean Amy Hillman. “They demonstrate how far our students can go and have gone in making their mark on the global economy.”

The 36th annual W. P. Carey School honorees are:

> Eddie LeVian, chief executive officer of the Le Vian Corporation, who has made Chocolate Diamonds® a red-carpet staple in Hollywood. LeVian earned a business degree from the W. P. Carey School in 1979 and took his innovative marketing ideas back to his family’s fine jewelry business in New York. The company’s sales have more than quadrupled over the past decade, and the LeVian family is active with many charities, raising $75 million in the past decade alone.

> Canglong Liu, a high-profile business leader in China, who founded one fertilizer factory in 1979, which grew into a conglomerate of major companies, including the Sichuan Hongda Group, now with 30,000 employees and 60 subsidiaries around the world. Liu is chairman of businesses that focus on finance, minerals and real estate. He is also a member of the national committee of the Chinese People’s Political Consultative Conference and the standing committee of the All-China Federation of Industry and Commerce. The Hongda Group has given $8 million to AIDS prevention and research in China. Liu received his MBA from the W. P. Carey School’s prestigious executive MBA program in Shanghai in 2007.

> MaryAnn Miller, chief human resources officer and executive leader of corporate communications for Avnet, a Phoenix-based Fortune 500 company with more than 18,000 employees and customers in 80 countries. Avnet is one of the largest distributors of electronic components, computer products and embedded technology in the world. Miller has more than 30 years of experience in human resources and operations management, and is responsible for leading the company’s human resources, organizational development and corporate communications worldwide. She is also a member of the Avnet Executive Board. She received her MBA from the W. P. Carey School’s executive MBA program in 2001.

About 200 alumni, business leaders and students are expected to attend the Homecoming Hall of Fame event on Thursday, Oct. 17 at the JW Marriott Desert Ridge Resort & Spa in Phoenix. A reception starts at 5:30 p.m., followed by the awards ceremony.

Space is limited. For more information on tickets or sponsorship, go to www.wpcarey.asu.edu/homecoming or call (480) 965-2597.

home.prices

Rising Interest Rates Can’t Stop Phoenix Housing Recovery

Rising interest rates don’t appear to be stopping the big comeback in the Phoenix-area housing market. A new report from the W. P. Carey School of Business at Arizona State University reveals highlights for Maricopa and Pinal counties, as of June:

* The median single-family-home price rose again to $190,000, up about 27 percent from June of last year.
* The luxury market is finally booming back, now that more banks are willing to finance jumbo loans.
* Rising interest rates have caused some people to accelerate their housing purchases, not significantly slowed things down.

Phoenix-area home prices have risen dramatically since they hit a low point in September 2011. The median price for a single-family home went up 26.7 percent – from $150,000 to $190,000 – between June 2012 and this June. Realtors will note the average price per square foot jumped 21.1 percent over the same time. The median price for condominiums/townhomes went up 38.9 percent to $125,000.

The tight supply of homes available for sale continues to drive the upward price movement in the market, with multiple bids being offered for most resale homes in the lower price ranges. However, the luxury market is also roaring back, with sales higher this summer than for any of the last six years.

“Access to finance at the high end of the market has improved recently with more lenders offering jumbo loans,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Along with good returns from the stock market, this has strengthened a recovery in the luxury market, where sales volumes were back to 2007 levels in June.”

Overall, the Phoenix-area market had 11,178 active single-family-home listings available without an existing contract as of July 1. However, about 84 percent of those were priced above $150,000, leaving just 26 days worth of inventory for buyers at the lower end of the market.

New-home builders aren’t completing houses fast enough to make a big dent in the supply problem. While analysts expected 17,000 construction permits to be issued this year, the area is only on track to have about 12,500.

“Current new-home sales rates are less than a third of what would normally be needed to keep up with the current population growth in the area,” says Orr. “Census estimates show that between 2010 and 2012, the combined population of Maricopa and Pinal counties grew by 2.9 percent, while the number of dwelling units – both owned and leased – grew by just 1 percent. Tight lending standards and a shortage of construction labor are two reasons for this.”

The Phoenix area is also seeing less cheap, “distressed” supply coming onto the market. Completed foreclosures on homes and condos in June were down 61 percent from last June. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 64 percent. Foreclosure starts finally just dipped back below “normal” historical levels for the area this June.

Institutional investors are showing less interest in the Valley as bargains are more readily available in other areas of the country. The percentage of Maricopa County homes and condos acquired by investors, including mostly “mom and pop” investors, was down from 34.9 percent last June to 26.7 percent this June. However, the area is still seeing a lot of all-cash home purchases. In fact, 44 percent of the Maricopa County property transactions under $150,000 were all-cash deals this June.

“For those who need mortgages, there has been much talk of rising interest rates and the effect this might have on demand,” adds Orr. “Rising rates have certainly reduced the motivation to refinance existing loans, but they have also sped up purchases by some buyers who want to lock in prices and rates. Still, other buyers will stop to reconsider their options, likely causing a pause in new contract signings in July and August, but I expect normal activity to resume in October.”

Rental activity remains strong, with relatively low vacancy rates and no surge in vacancies expected. Orr says the supply of rental homes in the Phoenix area represents just about two months of inventory, and there’s fast turnover.

“President Obama referred to his objective of making it easier for middle-class renters to qualify for home loans, when he visited Phoenix on Aug. 6,” says Orr. “The low-end market will depend to a considerable extent on whether he can make this happen through the actions of the Federal Housing Administration, Fannie Mae and Freddie Mac.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Full-Report-201307.pdf. A podcast with more analysis from Orr is also available fromknowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.