Graziadio Business Report Blog

Joseph Lee

November 19th is management pioneer (now deceased) Peter Drucker’s 100^th birthday. To celebrate the life and teachings of this remarkable man, the Drucker Institute hosted a weeklong event, Drucker Week, featuring some of the most respected business academicians (a paradox?) of the world at Claremont University.

Ken Blanchard (author of The One-Minute Manager and Know Can Do!) was there, along with Warren Bennis (author of Judgment), Stephen Covey (author of The 7 Habits of Highly Effective People), Charles Handy (author of The Gods of Management and Myself and Other More Important Matters, Frances Hesselbein (co-editor of the Drucker Foundation’s three-volume Future Series and Leading Beyond the Walls, and Jim Collins (author of Good to Great)—real heavyweights.

Here is a short account of my experiences attending this notable event:

On Tuesday, November 4^th, Ken, Warren, and Charles entertained a downtown Los Angeles crowd at Club Nokia. Ken spoke of the need for the servant leader—someone willing to put himself at the bottom of the organization chart (an upside down pyramid)—to support those closest to the customers. After all, as Peter Drucker said, the only purpose of a business is to create a customer. Continue reading ‘Peter Drucker, Masatoshi Ito, and In-N-Out Burger’

Kasra Ferasat of Palos Verdes, CA., (pictured center) a fully employed MBA program student at Pepperdine University’s Graziadio School of Business and Management, is the 2009 first place $1000 winner in the student paper competition held by the Graziadio Business Report. For the second year, the publication has invited Graziadio School students to submit articles and compete for the chance to be published and for a cash prize awarded by Dean Linda A. Livingstone (pictured left) and Editor-in-Chief Owen Hall, Jr., a professor of decision sciences (picture right).

Mr. Ferasat’s award-winning composition presents five recession-fighting tactics that must be incorporated into a restaurant’s overall strategy in order to maintain a competitive advantage. The restaurant business is facing its worst time in 40 years with fine-dining restaurants expected to decline by 12 to 15 percent, he writes.

How can restaurateurs create and maintain a profitable business while adding value, increasing sustainability, and providing fresh food for the consumer? Consistent food service, food quality and safety, embracing technology, marketing, and creativity are solutions addressed in the article, available at gbr.pepperdine.edu/094/studentpaperwinner.html, in the Fall 2009 issue of the GBR. Continue reading ‘MBA Paper Recession-Proofs Restaurants’

In this issue, read about:

IT Strategy for Small and Medium-Sized Businesses in an Economic Downturn

Cost-Effective IT Solutions and Critical Success Factors for SMBs. In an uncertain economy, small companies often feel the pinch of reduced business activity more acutely than large firms. As a result, it becomes increasingly important to do more with less, including careful, strategic IT investment analysis.

By Charla Griffy-Brown, PhD, and Babu Palanisamy, MS, MBA

What to Do When Traditional Diversification Strategies Fail

A Study on Diversification and Asset Correlation in Up and Down Markets. In 2008, market events showed that some of the protection provided by diversification is lost when correlation among asset classes changes rapidly. Now, the question is: Are traditional diversification concepts no longer applicable?

By James DiLellio, PhD, MBA

Women, the Recession, and the Impending Economic Recovery

An Exploration of Women’s Attitudes Toward Debt, Risk, and Consumption. Would female investment bankers, mortgage lenders, and chief executive officers have taken the same risks given the same expected returns? Maybe not. The purpose of this article is to explore the impact of the U.S. recession on women and to help readers gain useful knowledge about women’s role in the economy.

By Jennifer Keil, PhD

Continue reading ‘GBR Fall 2009 Issue Now Online!’

Davide Accomazzo, MBA

In my many years as a derivative trader and hedge fund manager, I forged a solid and long-lasting relationship with risk. Like a beautiful but dangerous woman, risk permeated my professional life—a constant courtship leading me to many attempts at fully understanding its mysterious ways. A never-ending effort!

The theoretical foundations of risk analysis were laid in business school where I diligently learned of Alpha and Beta, Random Walks and Efficient Market Hypotheses (EMH).* These theories were elegant and pure, like a fresh mantle of snow they seemed to perfectly cover all market uncertainties and provided a boost of confidence to a young man ready to leave his mark in Wall Street. Continue reading ‘Beta(ful) Market Hypotheses’

This post first appeared on Dr. Forsyth’s blog, Financial Wisdom Preparatory Institute.

Joetta Forsyth, PhD

I recently had a bad encounter with a bank. However, there is a basic principle that I follow that kept me from financial harm.

I applied for a business credit card, which I wanted to facilitate payments and I intended to pay off each month. It was a little late in the day and the person who handled business accounts had left. Another person at the next desk over offered to “help” me.

I explained that I wanted to take out a business credit card and gave him my business checking account ATM card, which he used to look up my account. He told me about a “great deal” on a card — I wouldn’t have to pay fees to get the frequent flyer miles, etc.

I told him that I was confused because I had called the bank and they did not tell me those terms. His reply, delivered with a beaming smile, was that it was a special offer only given in person. I asked to see the terms and conditions, and he told me that they would be mailed to me after I applied for the card. I had to ask twice more. I flat out refused to apply for the card without seeing the terms and conditions first. He finally gave up and went to print them out. I told him I would read them and come back the next day. At home, I discovered that the right side of the print out was cut off and I couldn’t even tell what it said. Continue reading ‘My Shocking Bank Experience and the Need to Read Terms and Conditions’

Nancy Ellen Dodd, MPW, MFA

I have been teaching with Frances Grimes in the Management Communications program here at Graziadio this fall and so business communication is on my mind.

Face-to-face business communication is difficult—attempting to read body language, facial expressions, and gestures (although some gestures speak for themselves), can be a challenge. Not to mention cultural differences that can blur the meaning to any one or all of the above.

Even more difficult can be written communication when there are no expressions and gestures to guide us. Add poor grammar, haphazard punctuation, and misspellings… well, we all know where that can lead. Then mix in the language of different cultures and disciplines, and you can really have a problem.

I once wrote an email to someone in another department who was handling our IT. Since we were just starting to develop audio and video, I needed extra help with a particular project. In the email I wrote that I just needed a download of the file in a new format for “audacity.” The recipient of the email responded not quite in the way I expected, offering to do something quite different than I requested. Continue reading ‘5 Simple Rules for Better Email Business Communication’

Can’t see the above video? Click this link to watch.

In this video interview, David M. Smith, PhD, Associate Dean of Academic Affairs and Associate Professor of Economics at the Graziadio School of Business and Management discusses the impact of the American Reinvestment and Recovery Act so far, the fate of female and older workers in this down economy, and which sectors of the California economy are likely to bounce back. Continue reading ‘The State of the New Economy’

The telegraphed day of reckoning has finally arrived and many commodity exchange-traded funds (ETFs) and exchange-traded notes (ETNs) are now finding themselves in the regulatory line of fire.

I have been on the record with my MBA students and with many of my colleagues in the investment business for quite some time regarding the multitude of problems associated with commodity ETFs. Finally, it seems corrective actions are being taken.

Just recently, UNG, the ETF that attempts to track natural gas futures’ performance, was subject to massive price distortions. UNG built a premium into its price versus its net asset value (NAV) of as much as 20% due to large inflows of money, which, ultimately, reflected investors’ bottom fishing. UNG was suddenly unable to expand its position due to an abrupt fear of breaching position limits in the futures pit.

The lesson learned? When an ETF cannot deliver on its strategy because of regulatory fear, the model is pretty much broken. Continue reading ‘Welcome to a New “Normal” in Commodities?’

Wayne Strom, PhD

Today’s harsh economic realities continue to impact everyone. Hundreds of thousands have been losing their jobs each month. In California, even firemen and policemen are being laid off (California firemen are being laid off even as we approach fire season!). It does not matter if you work for a private enterprise or a tax-supported agency.

Everyone is somewhat at risk. Everything is somewhat on the line.

An attorney friend once told me, ‘When you have a fire, you get to choose: you can pour on water, or you can pour on gasoline.’ This is absolutely true in our business relationships.

When people feel at risk, they become anxious and can easily rise to defensiveness. Negotiations, even over the smallest issues, can become brittle.

But to pour on gasoline does not mean that one is operating from a position of strength and confidence! It does not signal the other person that you are competent to deal with what is happening. If I anxiously enter a business conversation, or if I am even just a little apprehensive (a form of defensiveness), or perhaps a little pushy, I may be setting the stage for a defensive push-back or confrontation. Continue reading ‘The Business Imperative for Staying Calm During Stressful Times’

Can’t see the video above? Click here to watch or read the transcript.

In this video interview, Davide Accomazzo, MBA, Adjunct Professor of Finance at the Graziadio School of Business and Management, discusses the dangers of high frequency trading. This interview is a follow-up to Professor Accomazzo’s essay for the GBR blog on the same topic. Continue reading ‘The Danger with High Frequency Trading’