Spring 2007: The Business of Business Schools

“What business strategy is all about, what distinguishes it from all other kinds of business planning – is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as effectively as possible, a sustainable edge over its competitors.”

Japanese Management Guru Keniche Ohnae could not have better described the current environment in the business school industry. In such a competitive, globalized, rankings-saturated market, successful business schools must be managed like businesses. Businesses where the product is a leader infused with the right amounts of management expertise, financial savvy, knowledge, ethical compass and, of course, competitive advantage.

At the Hankamer School of Business, our business strategy is something we’ve been analyzing and working to improve through a collaborative planning process spearheaded by our Strategic Development Council. We have crafted a set of goals that considers our heritage and strengths, along with our relationship with the University, while embracing the opportunities presented by the 21st century. The strategic direction of the School is shaped by seven goals:

Goal 1: Learning Environment: To be acknowledged as a premier and innovative source of active learning.

Goal 2: Research: To produce highly regarded research.

Goal 3: Student/Faculty/Staff: To attract, support and retain diverse and highly qualified participants.

Goal 4: Principled Leadership: To be recognized for our learning, service, thinking and research outcomes on ethics in business with a focus on Christian perspective.

Goal 5: Globalization: To develop, support and produce faculty and graduates with experiences in international business and culture.

Goal 6: Career Development: To foster opportunities for career development of our students and to enhance their initial placement.

Goal 7: Relationships: Establish and nurture ongoing, mutually beneficial relationships among all relevant communities.

Throughout this magazine you will see examples of how we are addressing these seven goals and weaving them throughout the day to day business of our school. At the top of each article will be an icon corresponding to the goal that is at work in the story.

You will learn more about our strategic vision and how we intend to gain a competitive advantage for our students and alumni network through advancements such as an entrepreneurship department focused on technology innovation and social entrepreneurship, the creation of a School of Accountancy, accreditation of our healthcare administration program, an endowment to support our graduate program and growing our Dallas and Austin EMBA programs.

We are excited about what the future holds for the students, faculty, staff and alumni of the Hankamer School of Business. Enjoy the magazine and let us know what you think of our plans. Post your comments at www.baylor.edu/bbr

Terry S. Maness

Dean

 

 

Baylor Business Review, Spring 2007

By Eric Krell

The Business of Business Schools is Changing…

And Hankamer is Adapting, Competing and Excelling

In his best-selling book on the globalization of business, author Thomas Friedman emphasizes the crucial nature education plays in shaping the future success of the U.S. economy. In doing so, Friedman also defines an essential ingredient of that instruction.

“Education … has to be about more than just cognitive skills,” Friedman writes in “The World is Flat: A Brief History of The Twenty-First Century” (Farrar, Strauss and Giroux, 2005). “It also has to include character building.”

Management education experts assert that U.S. business schools confront a range of significant challenges. They also stress that U.S. business schools must provide experiences outside the classroom and leadership guidance – including the “character building” Friedman describes – that extend beyond the nuts and bolts of management skills.

The nature of business competition and, as a result, the demands organizations place on their future managers and leaders are changing dramatically and quickly. And the speed and magnitude of that change carries implications for every single U.S. business school, including Baylor University’s Hankamer School of Business.

The business schools that respond appropriately to the accelerating pace of change will shape the skills, experiences, values and leadership qualities future leaders bring to bear on their organizations and industries. By doing so, business schools can help ensure that U.S. enterprises do not get flattened by growing competition.

Beyond the Rankings

The proliferation and growing impact of business-school rankings reflect the increasingly important role those schools play in shaping future leaders, organizations, industries and economies. Unfortunately, the rankings rarely provide a complete and accurate comparison – although that may not even matter.

“To assume that a few statistics and comparisons in such a complex environment can identify which business schools are better relative to each other is difficult at best,” notes Tim Westerbeck, one of the world’s leading management-education experts and managing director and principal of Lipman Hearne, Inc., a marketing consulting firm that exclusively serves the not-for-profit market. “However, alumni and prospective students pay attention to the rankings. Even if they understand relative strengths and weaknesses of rankings, the rankings are highly visible measures associated with individual schools.”

Business school rankings, which once appeared only in BusinessWeek and then U.S. News and World Report, now appear in more than a dozen publications worldwide – included highly respected outlets such as the Wall Street Journal and Financial Times.

Westerbeck and other business school experts agree that rankings have become a fact of life, but they also warn of the risks institutions court when they allow ranking implications to dictate key decisions. For example, some faculty staffs have been gutted by more than 50 percent so that those professors can be reassigned to MBA classrooms to improve a Ph.D teaching-ration metric that figures prominently in a specific ranking.

“In that case, they’re simply managing to the ranking metric to increase the ranking of their business school,” explains John J. Fernandes, president and CEO of The Association to Advance Collegiate Schools of Business (AACSB International). Aside from other problems, that decision can cause the depletion of an already dwindling supply of future Ph.D.s

Higher-Level Challenges

In recent years business school rankings have featured a steady procession of new names. The U.S. dominated the business school market through the 1980s, Fernandes notes. Yet, the number of business schools worldwide has tripled since the 1980s. And, Fernandes reports, “almost all of that growth has taken place outside of the US.”

Today, more than 6,000 business schools are based outside of the U.S. while fewer than 2,000 operate within the country. That shift is a result of the rise of business markets throughout the world. The extent to which U.S. business schools can help companies thrive in an increasingly globalized business environment represents just one major area of concern confronting institutions in the 21st century. Those challenges include the following:

Adapting to Globalization. As business schools in locations throughout the United States have begun to compete against INSEAD in Paris, the London Business School and emerging institutions in China and other booking markets, a new question has emerged. “How do U.S. business schools remain relevant on a global playing field?” asks Westerbeck. “How do they ‘do’ global?”

To date, the question has produced a variety of answers and approaches. Some business schools forge alliances with overseas partners while others expand their own operations to overseas locations. Regardless of how they answer the global question, all U.S. business schools face a greater need to expose their students to new markets, countries and cultures.

“Boundaries between countries are not as specific or as relevant as they once were,” notes Gary Carini, Baylor University’s associate dean for graduate business programs. “The Asian market is just exploding. If we don’t bring those conversations into the classroom, we’re really doing a disservice to our students.”

Attracting Qualified and Diversified Faculty. More business schools experience greater difficulty attracting top-notch professors to facilitate discussions about globalizations and other business issues. A recent study by the American Accounting Association concluded that the supply of new accounting Ph.D.s through 2008 will fall 50 percent short of the demand for new accounting professors in the classroom.

Accounting is not the only area facing a shortage of qualified professors. Five years ago, about 86 percent of the faculty among accredited business schools in the U.S. held Ph.D.s; this year that figure dropped to 68 percent, according to AACSB International. “There is a rapidly deteriorating supply of academically qualified faculty in the world and it’s affecting the U.S.,” says Fernandes. “All schools confront this issue.”

Faculty diversity represents a related, and perhaps equally formidable, challenge. A diverse faculty attracts a more diverse student population, explains KPMG Foundation President Bernard J. Milano, and “better prepares all students for our diverse society and diverse workplace.” Greater diversity can also improve the quality of education – by preparing students to deal with a more comprehensive set of issues waiting for them in a business environment that thrives in an ever-increasing number of communities, countries, cultures and subcultures.

The KPMG Foundation is one of the sponsors of the Ph.D. Project, a not-for-profit with the mission of increasing the diversity of corporate America by increasing the diversity of business school faculty. Since the organization’s inception in 1994, the number of African-American, Hispanic and Native American business school professors has more than tripled (to 833 out of roughly 26,000 total faculty), but Milano emphasizes that much more progress is needed.

Adapting to Changing Business Needs. ERP, HTML, CRM, HRMS, SOX, SEC, PCAOB, IFRS, BASEL II – the quickening pace of technological, business and regulatory change churns out a dizzying array of acronyms on what seems like a monthly or weekly (or even daily) basis. Businesses need help decoding the opportunities and risks inherent in the steady stream of new developments.

“Business schools are in the business of preparing people to be effective leaders and to add value in businesses,” Westerbeck explains. “However, technology, demographics and markets are changing faster and faster. That engenders demands for different types of skills, new ways of thinking, new capacities that business schools in theory are supposed to be helping create in the workforce. That’s quite a challenge as the rate of change accelerates. And academic institutions are not by definition built to change.”

Additionally, most companies provide less nurturing development regimens for new management hires than they offered 20, 10 or even five years ago. “Companies that built up massive layers of supervision had to de-layer to reduce their cost and remain competitive,” Fernandes observes. “In the old days, you earned your degree and then entered an organization where there were tons of people who told you what to do. Now, companies expect students to hit the ground running – companies have demanded that [new management hires] arrive better prepared.”

That preparation takes many forms, including active learning experiences and specialized business-degree programs, such as Hankamer’s sports sponsorship and sales major, which boasts a 100 percent placement rate (including placements with professional sports franchises such as the Cleveland Cavaliers and Houston Texans).

Addressing Ethics at a Deeper Level. When Carini was a doctoral student in the mid-1980s, he recalls that many business schools decided to do the “ethics thing.” The savings and loan scandal motivated many business schools to tack on ethics courses to their curriculum. “That approach tended to fizzle, though,” says Carini. Twenty years and at least three corporate scandal cycles later, business schools continue to face criticism over the degree to which they prepare future leaders to behave appropriately when thorny ethical matters arise, as they always do.

7 Goals of a Highly Successful Business School

How does a U.S. business school address those challenges while meeting the needs of students and the businesses they will lead deeper into the 21st century?

In the case of the Hankamer School of Business, the answer is a strategic plan, developed through a collaborative planning process guided by the School’s Strategic Development Council. The plan contains the following seven goals:

Goal #1: To be acknowledged as a premier and innovative source of active learning. Westerbeck believes that the solution for business schools struggling to keep pace with the accelerating pace of business change goes beyond textbooks. “Who is in the classroom with students?” he asks. “What resources are being used as current examples and cases? What resources outside the classroom are being used to create the learning environment?” At the Hankamer School of Business, those answers include:

• Accounting students being honored as one of five national finalists in the PricewaterhouseCoopers’ xTax Challenge;

• Taxation and accounting students huddling with Senate Finance Committee staffers in Washington during a mock tax bill markup session;

• The creation of an ethics case competition, judged by the country’s leading corporate governance experts, as part of the annual Baylor Business Ethics Forum;

• The business plan team winning the John Hoover award at the University of Washington’s Global Social Entrepreneurship Competition for the most innovative and realistic business plan;

• MBA students presenting a project to Hewlett Packard CEO Mark Hurd (Baylor BBA, ’79) and his colleagues in the Palo Alto company’s inner sanctum as part of the “Focus Firm” program; and much more.

New active learning spaces, including the Southwest Securities Financial Markets Center, CNL Real Estate Learning Lab and the RFID Teaching and Research Lab, also have been opened.

“Teaching defines us as an academic institution … .but teaching is an input and what is important is the learning outcome,” notes Hankamer School of Business Dean Terry Maness. “We feel that to enhance learning outcomes, it is critical to provide an appropriate learning environment that engages the student where the student becomes a partner in the education process.”

Goal #2: To produce highly regarded research.

“We also hire faculty who have a passion for continued development of their intellectual capital and to share that knowledge with their academic peers and business professionals,” Maness explains. “We encourage our faculty to be actively engaged in national and global conversations of new theories, applications, and policies affecting their discipline as well as business in general and the economy.”

That commitment is evident in the numerous editorial boards of major journals Hankamer faculty serve on and in the numerous research grants they receive. The School has hosted the Free Trade in the Americas Conference, the Texas Investment Portfolio Symposium and the BIG XII MIS Conference – and co-hosted the Texas Finance Symposium.

Goal #3: To attract, support and retain diverse and highly qualified participants. In his business book Good to Great, Jim Collins noted that a critical element differentiating company performance was getting the right people on the bus and the right people in the right seats. The same dynamic holds true for educational institutions. “Highly qualified faculty can only do so much with less qualified students, and highly qualified students will not achieve their full learning potential with less qualified faculty,” explains Maness. “Likewise our programs will suffer if our support staff is not of the highest quality.”

The faculty’s international experience has also increased in recent years. “The faculty hires we’ve had in the past five or six years are the most diverse hires that we’ve had in the history of the Baylor Business School,” notes Blaine McCormick, associate professor and associate dean for undergraduate programs. “I consider the value, for example, of a Taiwanese faculty member to be enormous given that they can open up that part of the world to their students.”

Goal #4: To be recognized for our learning, service, thinking and research outcomes on ethics in business with a focus on Christian perspective.

The staggering economic losses caused by the corporate accounting scandals of the past five years and the crush of new regulatory requirements those problems triggered underscore the import of principled leadership and ethical behavior.

“We have a relatively unique opportunity to teach ethics in the context of principled leadership,” says Maness.

For example, business people participate in the university’s chapel program (a requirement for all Baylor students) each semester, discussing real-world business issues that have tested their ethical mettle.

Numerous programs and approaches contribute to the ubiquity of ethical discussions in the business school. The annual Baylor Business Ethics Forum attracts the country’s top regulators, including Public Company Accounting Oversight Board (PCAOB) member Charles Niemeier (Baylor BBA, ’79), and corporate ethics officers. Rather than offering self-contained ethics classes, the business school leadership prefers that current ethical discussions and debates spill into every course.

Such efforts have been noticed. Hankamer School of Business undergraduate program is ranked third in the nation by BusinessWeek in its Ethics rankings.

One of the measures that Carini tracks with the core MBA professors on a weekly basis covers the ethics-related discussions that take place within each class. “When you pick up the Wall Street Journal, there’s a good chance you will find an article covering a case where ethics were compromised,” says Carini. “When those articles surface, we make it a point to discuss it within our class that same week. And our professors and students are going to discuss those current cases differently from accounting, finance, marketing and leadership perspectives.”

The School is one of few with a Wall Street Journal contract covering subscriptions for all students.

Carini believes that Baylor MBA graduates possess “a solid base of ethics and values – they operate with an integrity that’s known on the street, and they reinforce our reputation as they go out to their new companies and act in that manner.”

Goal #5: To develop, support and produce faculty and graduates with experiences in international business and culture. As McCormick notes, the level of international experience on the School’s faculty continues to increase. Maness asserts that the business school is committed to increasing the level of international business exposure students receive.

“Our students not only need to study business in a global context in the classroom, but it is even more important that they have experiences that can provide them a world view,” he reports.

The foundation for that exposure can be found in The McBride Center for International Business. The Center, which hosts such events as the Global Business Forum and the Free Trade in the Americas conference, provides coordination and support for all international activities at the Hankamer School of Business, including learning opportunities in Argentina, Australia, China, France, Germany, Great Britain, Japan, Korea, Mexico, the Netherlands and Thailand.

Goal #6: To foster opportunities for career development of our students and to enhance their initial placement.

A holistic educational program incorporates two, fully integrated parallel tracks, Maness explains: an academic discipline-based curriculum track and a professional development track. As Fernandes notes, more companies expect business schools to produce managers who are ready to hit the ground running.

As soon as students declare an Accounting major, for example, they immediately study to become a member of the Accounting profession, in addition to learning the discipline. The students meet with members of the Accounting & Business Law Department Advisory Board to discuss different career tracks and internships, begin developing their resumes, conduct mock interviews and even consult with accounting professionals to learn how to interview for positions.

“We have been very intentional about our career and professional development activities with students,” confirms Charles Davis, Accounting & Business Law department chair, associate professor of accounting, and Ernst & Young Teaching Fellow.

Goal #7: To establish and nurture ongoing, mutually beneficial relationships among all relevant communities.

The nature of business is collaborative and builds on relationships and engages in alliances. Hankamer School of Business is striving to enhance those alliances between all stakeholder groups by adding value and opening lines of communication. Communications from the school, including this magazine, Web sites, the Focus Newsletter and monthly e-mail newsletters, work to keep alumni and stakeholder groups abreast of school news and happenings. Events, like the Ben Williams Distinguished Speaker Series, bring high-profile business leaders to the community.

Networks also feature prominently in developing relationships. Baylor Business Network provides graduates the opportunity to interact on a regular basis while expanding and developing both business and personal relationships. Alumni have networking and professional development opportunities in active chapters in Austin, Dallas, Denver, Ft. Worth, Houston, New York City, Oklahoma City, San Antonio and Waco.

“Our Baylor Business Network organization,” Maness notes, “is an absolutely critical success factor for our program. Relationships open doors to more possibilities and the synergies are only limited by our imagination and creativity.”

 

 

Baylor Business Review, Spring 2007

By Barbara Elmore

The good news is that top-notch scholars with Ph.D.s in accounting, finance and marketing will discover a healthy job market today and probably for many years to come.

The bad news is that the numbers of people to teach students who want those degrees are disappearing by the hundreds and not being replaced.

Back to the good news: The pulse at Baylor’s Hankamer School of Business remains strong, even though recruiters are seeing increased competition for professionals and finding that some jobs wait for professors longer than they would have in the past.

“We have been fortunate in last two to three years to get great faculty,” says Charles Davis, chair of Accounting & Business Law and the Walter Plumoff Professor of Accounting. “They are finding us and we are finding them.” However, adds Davis, the accounting applicant pool is at an all-time low. And even though the last few years have been fruitful overall for his department, this year marks the third one that he is seeking a tax professor. “A lot of that is because tax as a specialty area that has very few Ph.D.s coming out,” he notes.

University recruiters will continue to see those shortages, says business school accrediting expert Jerry E. Trapnell, whose accrediting agency The Association to Advance Collegiate Schools of Business (AACSB International) has documented declining enrollments in business school doctoral programs for a number of years. The drop is a result of baby boomer retirements in the face of growing student enrollment. Meanwhile, says Trapnell, some universities have reduced Ph.D. programs because they are expensive to maintain.

Trapnell is a former business school dean and accounting professor who retired in 2004 and then became executive vice president and chief accreditation officer for AACSB. The 90-year-old agency was formed by universities with business schools to help enhance the quality of business and management education.

Shortages are most acute in the areas of accounting, finance and marketing, Trapnell says. Students coming out of those areas are seeing other opportunities open to them, and many are not opting to obtain Ph.D.s. “It’s a very interesting phenomenon, and very challenging,” he adds. AACSB estimates a shortage of 1,000 Ph.D.s in the United States this year, a number that will grow to 2,400 by 2012, according to an online story in CollegeJournal, a publication of The Wall Street Journal. Trapnell says the shortage per year is about 200 to 400.

Although Kirk Wakefield, chair of the Marketing department, has noticed a shortage of Ph.D.s who want to do research, he was able recently to hire two people he considers top-notch. “There is definitely a shortage of people with Ph.D.s from the best programs who are capable of doing high-level, quality research,” he says. “That has ratcheted up the salaries they command.”

This means salaries are escalating and that packages offered to hard-to-find Ph.D.s include summer supplements and research support. The latter category helped Wakefield attract a highly qualified applicant in a recent round of hiring. “She was largely attracted by our Keller Center, an endowed, funded research center that pays for the faculty position,” he says. “It also provides resources for research and direct access to data and generally just support for research.”

Other things that universities have done to attract faculty is to limit their teaching load, which is pricing some schools out of the marketplace, and to pay one of their lecturers to get a Ph.D. “We’ve seen a few limited cases of those,” says Trapnell. “We’d like to see that grow more, but it is expensive.”

His agency sponsors a program called Professionally Qualified (PQ) Faculty Bridge Program, a seminar for people in industry who want to test the waters of academia. “Our standards allow for schools to hire appropriately qualified people with masters’ degrees, but you can’t populate your whole faculty with that and maintain accreditation,” he says. At least 50 percent of the faculty must be academically qualified or have a doctorate, according to AACSB standards. So there often is room at universities for people in industry who might want to make a career change.

The PQ seminar zeroes in on academic life and teaching skills, and was first offered last year at the University of California at Irvine. The next one will be in May and another may follow in the summer. After working with Irvine and the University of Southern California, the accrediting agency will move around the country to metropolitan locations, Trapnell says.

Baylor’s Christian environment sends a powerful recruiting message, professors note. Wakefield, who obtained his MBA at Baylor and his Ph.D. at St. Louis University, returned five years ago to become the chair of the Marketing department. “I was attracted by the opportunity to be involved in a university where scholarly productivity is important, but also accomplishing a mission with a higher purpose and influencing students who will go into the workplace and have a positive influence because of their training here at Baylor. I can’t imagine being as committed or loyal to another university.”

Van Pham, professor of Economics, came here for many of the same reasons. A native of Vietnam, Van Pham left Saigon as a seven year-old, along with his mother and two sisters, in 1975. He came to the U.S. in 1976 after living in a refugee camp in Guam for a year. He grew up in St. Petersburg, Fla., and then went to college at MIT. He got his Ph.D. in Economics at Cornell.

“My research has an international dimension and focuses on poor countries,” he says. “Because of Baylor’s Christian mission, there seems to be a natural interest in development work and what seems to be a general interest from students and faculty in international programs. The existence of the McBride International Center at the Hankamer School of Business is an example. This interest in international programs and with developing countries was especially attractive to me.”

Kendall Artz, chairman of the Department of Management & Entrepreneurship, came to Baylor in 1995 after working at both Hewlett-Packard and Norwest Corp., which is now Wells Fargo. He teaches strategy and is coordinator of BEST, a business honors program for seniors.

Although his opportunities in the corporate world were excellent, he found himself wondering what he wanted to do with the rest of his life. “I wanted to work in an environment where I could still work in (strategy) and have an impact on people’s lives, more than in the corporate setting.”

He’s been department chair since 2001 and has done a lot of faculty hiring over the last four to five years. “We always tell them that Baylor allows you to do things that you cannot necessarily to do at other institutions. The Christian environment impacts the way people interact around each other, the way they conduct themselves. The students generally have the same world view. The environment is supportive and collegial.”

Artz, who recently won the Hankamer School of Business Teaching Excellence Award, notes that Baylor offers a balanced model between research and teaching. “We value research and go after people who are doing that, and those are the same characteristics that top tier schools would go after. But we also care about the teaching dimension. We are not saying that other schools don’t, but not to the extent that we do. If you like working with students, Baylor’s the place to be.”

Professors often say they can attract others to Baylor because of its Christian heritage, the work environment, and the balance between research and teaching, reasonable tenure requirements, and the reputation of its business programs. “Once you start getting faculty active in academic circles and networks, these things spread,” Davis says.

 

 

Baylor Business Review, Spring 2007

By Nancy Godson

Focus Firms were not the established norm at Baylor when Mark Hurd graduated from the University in 1979 with a bachelor’s degree in business administration.

The practice of partnering MBA candidates with regional, national or multi-national companies to research and provide solutions on real-time, core issues is relatively new to Baylor Business.

Still, as CEO, chairman and president of Hewlett-Packard (HP), Hurd had the opportunity to see a Baylor Focus Firm in action last fall, when students from his alma mater traveled to the IT giant’s headquarters in Palo Alto, California, to present global expansion initiatives to HP executives.

Carl Allen, a program manager at HP, served as corporate point person to Baylor’s three student teams. His role as project manager was a semester-long commitment, during which he facilitated student access to HP data and resource personnel and provided overall direction to the teams as they conducted intensive research, critically assessed corporate issues and tested potential solutions before finalizing their recommendations. Weeks of preparation culminated in Baylor’s formal presentations to HP executive leadership on November 30, 2006.

“The project came about after initial discussions with Baylor and a visit to campus to meet the students,” said Allen. “Following that, we had high expectations about their ability to drive a high-quality product.”

He was impressed by the MBA candidates’ passion and surprised by their desire to work very long hours on the three projects, a work ethic Allen says is similar to what he sees at HP.

“Together we decided to make the projects as fulfilling as possible by treating them as real-life work streams, which, in fact, they were,” he said.

The HP Focus Firm project consisted of the students being divided into teams and given the task of recommending expansion strategies in three diverse markets: North America, Russia and China.

The primary objective of the Russia and China projects was to identify overall HP growth opportunities in those regions. The students were asked to select products from the HP catalogue with the greatest marketability for Russia and China, and then determine the most appropriate markets within each region to promote those products. Along with this chief directive, HP had additional imperatives significant to each region.

The team of students investigating HP growth expansion in Russia was required to investigate prospective foreign direct investment options, and the potential impact of each investment on increasing Hewlett-Packard’s share of wallet in that region.

Baylor’s China team was tasked with developing a regression model that could estimate the pull-through capabilities of each HP product segment in that region. Ideally, the model would help the company assess how product bundling can give HP a competitive advantage.

The North America team’s directive took a different focus. Team members were expected to identify and suggest initiatives on how HP could best position itself to gain incremental market share in the small business segment. The team was to determine primary growth opportunities throughout America and Canada, and then conduct a line of investigation to confirm their recommendations. An online survey would have to be developed and implemented for data collection.

The analytical model the team was required to use to study the small business market in North America was a new concept to the team members.

“The complexity and scope of our project initially surprised me,” says Tony Romanello (MBA `07), who served on the North America team. “I had very little strategic marketing or market analysis experience, and the demands of the project were quite challenging.”

He admits to feeling overwhelmed after his first meeting with Carl Allen, but also excited at the prospect of working on such a worthwhile assignment-plus, participating on a real-life strategy project with a top Fortune 500 company would stand out on his resume.

The level of commitment required to complete the project came as a surprise to most of Romanello’s teammates, as well.

“The intensity of the project and demands placed on us were much greater than anything else we’d experienced up to that point in the MBA program,” said Kevin Hutchison (MBA `07). “It would be a challenge, but I knew we were able to do it.”

The opportunity to participate in Focus Firm project was something Eric Monaghan (MBA `07) had looked forward to since arriving at Baylor, and was a major factor in his decision to enroll in its MBA program.

“I feel strongly that the link between academics and practice must be maintained throughout the MBA process,” he says. “Working on strategy projects with the 11th largest company in America is exactly what Focus Firm should be.”

Every Focus Firm project is fraught with challenges, perhaps the most important being learning how to balance the time requirements of the project with the demands of family, jobs and other coursework.

“We learned a great deal about our ability to multi-task,” said Hutchison.

Sorting through mounds of endless data was another challenge for the teams.

“We eventually realized that the only way to make real breakthroughs was to stop sorting through data and start making relevant, educated insights of our own,” says Romanello. “Of course, then the task became balancing and debating each team member’s insights.”

While each member brought valuable insights to the table, Romanello admits that getting everyone to agree on the best choice took some time.

“In the end, everyone’s contribution was critical,” he said.

Certainly all would agree that weekly conference calls with Carl Allen to debate the more challenging aspects of the project were essential in keeping them on track.

“Although Carl was extremely busy with other projects, we knew that every Monday morning at 7 a.m. he would give us his full attention for an hour to work through obstacles we’d encountered,” said Monaghan.

“We received continuous feedback from Carl on our progress,” agrees Romanello. “He really pushed us to keep reaching and refining our analysis and recommendations.”

HP executives throughout the corporation were equally helpful to the teams, gladly reviewing matrices and online questionnaires, or providing information on key research issues. Each professional encounter served as a learning opportunity for the Baylor students.

“Understanding the model that Carl Allen uses to analyze complex markets and his method of presenting information were the most important professional lessons I learned from this experience,” says Monaghan, who will work for American Airlines in corporate finance after receiving his MBA degree this spring.

Tony Romanello hopes to move to the Austin area after graduation and work in the fields of strategic marketing, supply chain/logistics and operations.

“Professionally speaking, Focus Firm opened my eyes to the fast-paced, upper-level thought processes of top-level execs,” he said. “I learned that hard work, team work, preparation and execution can yield results that are greater than you initially expected, and even surpass the expectations of the requesting party.”

“It was clear to see the value that the students were gaining throughout the Focus Firm process, both by working closely with HP during the projects and living the life of an HP corporate strategy executive,” says Carl Allen. “During my own MBA study I was not offered anything similar to this experience.”

As November 30 drew near, the teams began to feel the pressure of what lay before them in Palo Alto. Exhaustive nights and hectic days became the norm, and the mood grew stressful as adjustments in numbers and refinements to formal presentations continued up until the final hour.

“If we wanted to succeed and give HP something of value, we needed to remain committed until the end,” says Hutchison. “We wanted everything to be perfect and were not willing to settle for less.”

The Baylor teams were welcomed to Hewlett-Packard’s headquarters by HP executives who spent the majority of the afternoon speaking with the MBA candidates about their careers at Hewlett-Packard and their work experience prior to joining HP.

“The HP executives were really impressive to see in action,” says Romanello. “Interacting with such highly successful and intelligent business professionals was an amazing experience.”

All the students agree that meeting CEO and fellow Baylor Bear Mark Hurd was a singular highlight of the trip.

“Mark Hurd was very down-to-earth, very candid and exhibited a genuine interest in the teams and Baylor in general,” said Romanello. “He had some interesting comments about his motivation as a CEO and the “early-days” of his professional career.”

The MBA candidates were encouraged by HP’s enthusiastic welcome and the sincere interest of its senior leadership team to view Baylor’s presentations.

When Eric Monaghan looks back on his team’s presentation, there is only one thing that he would change.

“The findings from our project made such an impact that the presentation turned into an interactive meeting with questions, discussion and debate between everyone in the room,” he said. “We ended up having to skip a few slides because our time ran over, but other than that, everything went according to plan.”

“Judging from their response, I’m confident that our recommendations will be utilized in some capacity at HP,” says Hutchison. “We delivered.”

He felt that the North America team gave HP executives a different perspective on key business markets, and provided competitive insights and leverage tactics that were revelatory, or else confirmed what HP executives already believed to be true about those markets. His teammates agree with him.

“The primary market research we conducted through the online survey provided extremely valuable information,” said Monaghan. “It pointed to what small businessmen and women need from HP, and exposed opportunities to win business from competitors.”

Carl Allen says that he and his HP colleagues were impressed by the content and professionalism of all three Baylor presentations.

“Each team drove to insights that are very useful,” he said. “As part of HP’s growth in the three areas covered, we will be implementing some of Baylor’s recommendations as part of our strategy.”

According to Allen, the general consensus among HP executives is that the Focus Firm teams helped answer strategic questions pertinent to a major business poised to expand into new geographies and customer markets.

“I think that Baylor’s Focus Firm initiative was a great test-case for HP interacting with the MBA community,” says Allen. “I would like to think that HP can work with Baylor again in the future.”

Kevin Hutchison, who plans to pursue employment in Denver after graduating in May, felt privileged to represent Baylor in Palo Alto and, like his teammates, considers his Focus Firm experience to be invaluable.

“Focus Firm represented a significant personal accomplishment, as I wanted to help make this project a success for Baylor and HP,” he said. “To become a part of the HP experience and contribute to their initiatives was a rare privilege.”

Tony Romanello agrees.

“Any MBA program in the world would have wanted this opportunity to work with HP execs and present in Palo Alto,” he said, and added that the teams are especially grateful to the Baylor graduate faculty.

 

 

Baylor Business Review, Spring 2007

Business school rankings. Their relevance ranges from being seen as a useful benchmark between peer institutions and programs to a highly controversial marketing tool. Yet, more and more publications produce rankings each year and students and parents increasingly lend them credibility in their decision-making process. The rankings are not going away, nor are they becoming more uniform and regulated. This forces business schools to compete with each other, not only in admission standards, but course offerings, causing some schools to drop their quality niche programs to become a more well-rounded, full service business school. This dilemma poses the question: will rankings ultimately improve or hinder business schools?

View:

Orthodox business strategists defend that companies should focus only on those industries where they can excel, based on their resources and capabilities. According to this perspective, the diversification of activities is not a preferred option for growth, unless the newly entered industry is closely related to the company’s core business or there are clear synergies to be exploited. In sum, they defend, “your company can not excel in every industry”. This axiom could be also applied to educational institutions, business schools included, and was very lucidly explained by Prof. Peter Lorange, President of IMD, in a previous post on BizDeans Talk blog: “Strategy means choice. Not only in business but also in educational institutes. In the short term, choices that break with tradition may be painful but I firmly believe that in the long term they pay off. Of course, choices must be made consistently and must be based on a clear strategy, shared and supported by the whole institute”. His statement is evidenced by the success of IMD, the centre that he leads, which is fundamentally focused on executive education programs.

However, the globalization of education, and management education in particular, is changing traditional paradigms. In recent years, we have attended the consolidation of full-service business schools, i.e. institutions that offer programs at all levels of higher education -undergraduate, graduate, PhDs and non-degree executive education courses-, thus having a wide diversified portfolio of activities. Full-service business schools are normally big in size and scale -in terms of faculty, students, facilities or other resources- and resemble large corporations that compete in other global industries. They may belong to wider universities, like Said Business School at Oxford University or The Wharton School at Penn’s University, or enjoy an independent status, like HEC in Paris.

Interestingly, last year’s European Business School Rankings, published by the Financial Times, allows for two conclusions related to the commented issue: First, a significant number of the institutions ranked in the higher positions are full-service business schools; and second, those highly ranked full-service schools do actually excel in different education segments, a fact that contradicts the thesis supported by orthodox strategists.

Like large corporations, leading full-service business schools benefit from many operative synergies and from a “brand halo” effect: they are supposed to achieve the quality of the current programs in their newly launched offerings.

I wonder whether the globalization of management education will foster the polarization of business schools’ models: on the one extreme of the spectrum, “focused schools”, covering only one or two segments of higher education; and on the other end, full-service business schools, offering a wide array of educational activities on a global scale. Will the institutions that do not choose one of these models become trapped in the middle?

Santiago Iniguez, Dean of Instituto de Empresa Business School

 

 

Baylor Business Review, Spring 2007

by Barbara Elmore

The decades-old Hankamer School of Business, which has given wings to scores of successful entrepreneurs, is bustling – perhaps bursting – with new programs tucked into offices and squeezed into hallways and down stairwells. With fixed seating in its classrooms and little room for student meetings, the school is all filled up with no place to grow.

“The building supports what we have been doing, but I’m not sure it supports what we need to be doing,” Dean Terry Maness says. “We need a facility that meets the current state of education, and where education is moving.” That means classrooms that encourage interactive learning and the development of programs that both anticipate the needs of business and that are aligned with Baylor’s Christian mission.

The main components of the business school are the three-story Hankamer building, erected in the 1960s, and the five-story Cashion Academic Center, a 1980s-era structure. They house classrooms as well as a 256-seat auditorium, the Southwest Securities Financial Markets Center, a graduate center, an advanced technology lab, the KPMG Tax Library, and a large banquet room. Space carved out for new programs chews up existing classroom space, Maness says. Planners are looking at schematics now, trying to figure out the best way to build.

One area which needs more space is the three-year-old healthcare program that is currently operated out of an office. “We saw the opportunities for students and looked at it from the perspective of what better brand can you have in health care than Baylor University?” says James Henderson, the academic director of the Healthcare Administration Program. “There seemed to be a real void in that area, given where students could go.” Many Baylor students who were interested in such a program went somewhere else to get graduate degrees, and did well in ranked programs, Henderson says. So three years ago the program began as part of the business school’s MBA.

Those classes developed from health economics courses Henderson offered at the undergraduate level in the late 1980s. “That began a process of creating an undergraduate degree program, a B.S. in economics, focused primarily on the large number of pre-med students on campus that major in biology and chemistry,” he says. “We wanted to offer them an alternative which would show a varied interest and provide a technical undergraduate major, one that had some practical application as far as understanding how to think.”

The program needs an office suite, Henderson says. With everything in place, it would have space requirements for six faculty members, both teaching and research scholars, that would be make up the healthcare core. Eventually, the Healthcare Administration Program would become an integrated program in health care, health services, health economics and health policy, he says, and would include a Ph.D. in economics.

“We need a showcase facility which would include classrooms, conference rooms and a computer/research lab where students are able to have access to computers and other research materials.”

Other program needs include:

• Accounting

Charles Davis, department chair and the Walter Plumoff Professor of Accounting, sees a school of accounting that will include dedicated classrooms as well as meeting space and faculty offices. Classrooms would be remodeled to fit with today’s technology, Davis says. “We need a technology teaching lab, a computer laboratory that we could use for teaching,” he says. Right now, technology-based courses that faculty members demonstrate have no meeting or laboratory space. Students must seek space elsewhere on campus.

Meeting space is also hard to schedule, he says. “We have advisory board meetings, student orientation, simulations, and career day for our students, that require larger space than what the classroom provides.” Large meetings or luncheons that can accommodate 150 people must be scheduled six to eight months in advance in the only room with space for that many people on the fifth floor of Cashion.

Davis also wants space for faculty and support staff that is connected to classrooms. “That is conducive to doing what we need to do. Our current offices are too small. If you’re meeting with a group of students, there’s really no place to do that. There needs to be a little more faculty space that can be used to meet with students and other faculty members on collaborative projects. That’s my dream.”

The accounting department is already recognized for its excellence, and Davis wants to see continued recognition. “Our graduate program was ranked for first time this year [ in Public Accounting Report’s Top 25], and our undergraduate program for two years in a row. I want us to go up and stay up.”

Hand-in-hand with that goal is growing the program to graduate more accounting students to accommodate all the firms that want them. “We have 30 firms that come to recruit accounting majors,” Davis says. “In a good year, we have 150 graduates. Competition for those students is high. I’d like to have a lot more students that can go to work for those firms.”

• Ethics

“We already integrate ethics into our curriculum because of the Christian character of our faculty,” says Mitchell Neubert, the H.R. Gibson Chair in Management Development and the Chavanne Chair of Christian Ethics in Business. Still, Baylor wants to become the national center for ethics in business, and that will require ramping up of course offerings that may lead to a minor in Ethical Leadership, or a certificate for people who want to concentrate on ethics. The Hankamer School of Business undergraduate program is currently ranked third in the nation by BusinessWeek in its Ethics rankings.

Ethics study fits well with Baylor’s Christian perspective, says Neubert, who notes that Baylor’s ethical studies are not new. “I did a check of faculty and found that we have more than 20 people doing ethics research in their disciplines. That’s much stronger than a lot of schools. We want to leverage the strengths we have and build on them and be in the national conversation about ethical leadership. Many people are talking about it but have no strong foundation for teaching it. We can point to our Christian heritage as a resource for understanding why we do what we do and a reason for emphasizing ethics. At some schools, ethics is reactionary or a fad. But I think people are realizing that as management gets more complex, the ethical issues get more complex. The need is never going to go away.”

Neubert envisions a Baylor Leadership Institute to coordinate the interaction of Christian scholars and practitioners and promote initiatives directed toward practicing ethical leadership in the marketplace and integrating Christian theology and vocation. “This institute also could build on and leverage the foundation of Christian values that define Baylor to amplify the unique voice of Baylor in scholarly activity among its peer and aspirant institutions,” Neubert says. He is working on a proposal for an Institute of Leadership that includes three pillars: ethics, servant leadership, and faith at work issues. “We hope to be a place physically and informally where people can come together to research and encourage the practice of these important ideas.”

• Professional development program

A focal point of the undergraduate program is the undergraduate programs office, where every student in the business school goes every semester for advising after finishing 30 hours, says Blaine McCormick, associate dean for undergraduate programs. Right now that office fits snugly on the first floor of Hankamer School of Business. “We’d like to take that office and rename it the Center for Undergraduate Excellence,” McCormick says. “We’d want to grow that office from advising only to professional development and career services, and also have it be our welcome center. We can’t do that in its current location.”

“The Center,” as McCormick refers to it, would move to a central location within the business school, and allow for advising offices, career services, and an area for professional development. Planners envision a place where students can learn how to interview for jobs, for example. “Interviewing is a learnable skill and you get better at it the more you do it. We need a place for mock interviews on a regular basis,” McCormick says.

It would also be a place for companies that recruit on campus to schedule information sessions so that students know who they are and what they do. The Center would partner with Baylor’s Career Services and leverage training that is now an informal part of business education. “We need to have a platform, not reinvent the wheel. We need to shout as loud as possible about what’s available.” Once students are informed, the rest is culture-building, McCormick adds. “Space matters,” he says, referring to the new basketball practice facility at Ferrell Center. “We need a space for our students to practice their skills on game day. We need something we can point to so they can see immediately that career services are a big part of this. It’s a visual cue that we currently do not have.”

• Technology and entrepreneurship

As director of University Entrepreneurial Initiatives, Greg Leman’s role is to teach students how to commercialize technology for use in business. “That process is done not only by startup companies. Existing companies live and die by their ability to innovate. While even service companies must innovate — like a high-end restaurant keeping its menu “edgy” and new — I focus on companies that depend on creating value with new inventions.”

He teaches two courses that address the necessity of connecting technology and business. The first was Technology Entrepreneurship, which focuses on innovation and was offered beginning spring 2006. The second, Corporate Entrepreneurship, is an introduction into how technology works, how it is managed, and how to keep innovation in a corporation on track. Students in this class get the information they need to keep up with their counterparts on campus. “I am trying to demystify a whole realm of technology,” Leman says.

To demonstrate how to combine technology and business in the best way, Baylor needs to build a team of clinical professors that span the technology circle, Leman says. He envisions a wheel with different spokes all pointed toward the hub. “Business kids are on one spoke, and engineering on another,” he says. “The vision is to have lots of spokes.” To that end, he is in the planning stages of making a new spoke with the chemistry department for chemistry students who may go into industry and need the business side. He wants to build another spoke for environmental science. “The idea is to make a multi-spoke wheel.” That’s where the team of professors comes in. They will find the projects in their areas of industry and will turn out graduates to work in those industries.

With lots of students needing to work together as a team, the program has a need for bigger team space, like conference rooms. And with each team working with a company outside Baylor, they need good collaborative tools such as a top-end telepresence, which brings students and a communicating video presence together in a classroom. “You look at a screen and the person on the screen is life-size in real time,” Leman says. “A conference room that has that in it is a relatively near-term need for the program.”

“I see a lot of mixtures of technology and business,” Leman adds. “You get business that’s international and technology that’s international. We put it all into one experience.”

By Barbara Elmore

Dean Maness notes that all of the needs are a matter of both developing and creating new programs, and developing the environment in which to showcase them. “It’s not just a matter of taking things that are nailed down and subbing,” he says.

Although planners have talked about building out instead of up, Cashion’s foundation would support two more stories. No firm answers are in place on which way to expand, but Maness hopes to have a design in place in the fall and to see an expanded business school within three to five years.

“We have a solid foundation laid for an academic program,” he says. “It’s time to really focus on becoming a distinctive school of business.”

 

 

Baylor Business Review, Spring 2007