Thursday, October 3rd, 2013
Welcome to the new issue of the Graziadio Business Review! This issue is now available online at gbr.pepperdine.edu.
Let the Social Networking Games Begin
Gamification: The Future for Business in Hiring and Training
By Donald M. Atwater, PhD and Brian Clark, MBA
The use of social networking games for business, which is referred to as gamification, is an emerging technology. This article reports several cases where gamification has been successfully introduced in businesses and explores areas that are likely to expand in the future to improve the value of workers.
The Case of Microsoft’s Surface Tablet
Going Behind the Strategy with SWOT
By David R. King, PhD, and Todd Peterson
The applicability and relevance of SWOT analysis can be demonstrated by showing how this strategy tool can explain Microsoft’s Surface tablet. Microsoft faces increased competition from other technology firms and its core business of personal computer (PC) operating systems and software face declining demand;a SWOT analysis helps to understand Microsoft’s response.
With the U.S. and world economy seemingly climbing out of serious recession, it is time to take stock of corporations that are recovering and those that may have suffered more lasting damage. Here, the concept from the physical world, hysteresis, is applied to corporate financial statements contrasting the path of growth leading up to the recession to the path of contraction that follows.
LESSONS LEARNED: Creating Values That Work
Beyond Just Setting An Example
By Marianne Tracy, MSOD
Values are the most important features of developing organizational identity. In addition, values provide the frame for achieving organizational results. Defining values and associated behaviors provide both a focus and the glue that binds the leadership behavior and managerial culture. This article includes eight suggestions for incorporating values and behaviors into an organization?
Today, business educators are under growing pressure to engage in significant reforms due to the impacts of globalization, new learning technologies, soaring tuitions, and unprecedented economic uncertainty. The approach being adopted in many business schools is to engage faculty and students in a virtual learning experience via social media.
Click Millionaires: Work Less, Live More with an Internet Business You Love
By Scott Fox
Reviewed by Donald M. Atwater, Phd
Fate of the States: The New Geography of American Prosperity
by Meredith Whitney
Portfolio Hardcover, 2013
Reviewed by John J. Scully, PhD, CPA
Harder than I Thought: Adventures of a Twenty-First Century Leader
by Robert D. Austin, Richard L. Nolan, and Shannon O’Donnell
Harvard Business Review Press, 2012
Reviewed by Mark Allen, PhD
Technical Analysis for the Trading Professional, Second Edition: Strategies and Techniques for Today’s Turbulent Global Financial Markets
by Constance M. Brown, CMT
Reviewed by Steve Ahn and Alexander Frumkin
We hope you will enjoy this issue.
Topic: GBR News
Monday, September 16th, 2013
The Graziadio Business Review published “The Case of Microsoft’s Surface Tablet: Going Behind the Strategy with SWOT” in 2013 Volume 16, Issue 2, an article by David R. King, PhD, and Todd Peterson. This post contains some updated thoughts.
The analysis examining “The case of Microsoft’s Surface Tablet” was developed in the Spring of 2013, but the predictive ability of SWOT analysis is borne out by current events with Steve Ballmer announcing his retirement and Microsoft’s purchase of Nokia’s mobile division. The purchase of Nokia’s mobile division was enabled by the financial assets of Microsoft highlighted by the article, and it fills two strategic needs.
First, it provides additional impetus to Microsoft’s shift to mobile computing. The increased sales of smartphones and tablets have largely come at the expense of PCs running Windows. The development of Windows 8 as a bridge project has not been widely accepted by the marketplace, and better integration of software with hardware by Microsoft is needed. Nokia’s mobile division has experience with hardware and designs 80 percent of the smartphones using Microsoft’s operating system. A disadvantage of this approach is that it commits Microsoft to sell hardware in market dominated by Google and Apple. It also reduces the probability that other manufacturers will design mobile devices for Windows. Reduced adoption by other manufacturers can be expected, because Microsoft will now be directly competing with them and asking them to pay a licensing fee for its software (at the same time Google offers Android for free).
Second, the strategic shift required of Microsoft requires an experienced leader, and turnover in senior leaders below Steve Ballmer compound the challenge of selecting someone to replace him. The purchase of Nokia’s mobile division also brings back Stephen Elop, an experienced Microsoft executive, who has to be considered a front runner to replace Steve Ballmer. Acquisitions are fraught with risk, but having a CEO familiar with both Microsoft and Nokia should help the process and increased importance of mobile computing on Microsoft’s future.
In summary, the need for a strategic shift at Microsoft has been clear for months and Microsoft is beginning to make needed changes. It will be interesting to see how these changes continue to develop and how successful Microsoft is in adjusting to market demands, integrating Nokia, and transitioning to a new leader.
Wednesday, March 20th, 2013
As I outlined in my Three Part MBA Philanthropy Series, alumni are a critical financial component to business schools. However, alumni can contribute in many other ways. In addition to providing financial support to their alma mater, alumni also play an equally important role in pre-student recruiting and job placement.
Why is pre-student recruiting important? Today, business schools are facing both intense competition and demanding customers. These forces tend to drive up the cost of student acquisition and retention. MBA programs are indeed influenced by their stakeholders. More and more, the student is being treated as a customer, and student and alumni satisfaction have become key metrics to school rankings. At the same time, the student is also a product. Student seats are a perishable resource just like airline seats or hotel rooms. Once the school term starts, an unfilled seat equates to lost revenue.
Therefore, to increase student acquisition, we must expand our global reach. One way to do this is through strategic business partnerships with international schools. These partnerships will expand Graziadio’s global educational opportunities, enhance our brand, leverage complementary strengths, and increase flexibility and convenience for students.
Management education alliances, among other things, provide the vehicle for the virtual exchange of both students and faculty. Imagine a situation where a student is looking for an elective, but it is not being offered at their home institution at a convenient time or place. The student could instead register at a partner school that is offering a similar course. The same could apply to the faculty.
For example, in Fall 2010, I took a special residential offering at the West LA Graduate Campus called Managing Business with China. This course, among other things, allowed me to connect with reputable faculty and speakers from China that I would not have been able to do so otherwise because of time demands from work. Similar initiatives will spur increasing opportunities for connecting graduates to the global business community.
Recent data show that management education is currently undergoing a paradigm shift from a teacher-centric process to a learning-centric environment that focuses on customized learning. This transformation is being fueled by the need to produce educated leaders that can compete on a global basis.
As alumni, our degree is what we make of it. We are called to contribute to Graziadio’s legacy in terms of our time, talent, and treasure not only to merely increase our own degree’s ROI, but also so that this legacy can continue for future generations. In order to impact our MBA ROI, we must remain competitive, and in order to remain competitive, we must reach a global audience. This will allow us to attract the most talented students, translating into huge, quantum leaps in impact AND financial support for Graziadio.
Every organization is perfectly designed to get the results it’s getting. If we don’t like our results, it implies we must change the design. It’s time to follow the data and change the design.
Friday, February 15th, 2013
Recent data from the Pepperdine Private Capital Market Project revealed that 88% of privately-held businesses with revenues less than $5 million want to execute growth strategies, but they typically have lower levels of necessary resources, such as the people or finances, to grow compared to privately-held businesses with higher revenues.
Eager to grow, but lacking the means, many small-businesses owners have turned to friends and family for funding. Pepperdine Private Capital Market Project research from Q1 2012, shows that 71% of businesses with less than $5 million in revenue were successful in securing funding from friends and family – the No. 1 source from among 17 lending categories.
Now some business owners may be tempted to use their homes as collateral. With the recent spike in home prices this option may seem even more appealing.
In mid-January, real estate firm DataQuick reported that home prices nationwide increased 7.4% year-over-year and in Southern California the median home price rose 19.6% in December over the same month last year to hit $323,000. San Bernardino and Riverside counties posted the strongest year-over-year increases, up 20.0% and 19.1%, respectively, indicating that the once hard-hit Inland Empire is now recovering.
Certainly, there will be some businesses that are able to take advantage of the increase in home prices to grow their operations. This should bode well for states like California where the concentration of small businesses is higher. However, before home owners get too optimistic here are a few things to consider:
• Many banks are still hesitant to fund via home equity lines. While there will be some increased access to funding, it will not nearly be in line with what we saw pre-financial crisis.
• Even as access to home equity loans increases it may not be the best decision to use home equity as collateral. Many entrepreneurs forego a job to start their venture and piling on additional financial risk in the way of home equity further increases their risk profile. But, entrepreneurs don’t see “risk” as clearly as those sitting on the sidelines. This optimism leads to many successes, but even more failures and disappointments.
• If you operate your business out of your residence, your home or personal assets may be considered collateral for a loan. However, in the event of inadequacy of collateral, the Small Business Administration will generally not decline a loan if it is the only unfavorable factor.
Whether or not small business owners use their home equity as collateral is a personal decision and will vary from situation to situation. In order for business owners to increase their prospect of securing capital they should make sure they know about the different types of private capital (i.e. angel funding vs venture capital vs private equity) that are available. While these sources of capital are not for everyone, raising small business owner’s knowledge of capital classes will help them make informed and effective decisions.
Business owners should also have a well-written business plan as well as personal experience or solid mentorship in the industry they are entering. Part of this business plan should include understanding the criteria that are needed to attain financing from different sources. This will help streamline the process by eliminating the funding sources that are not attainable or not the best fit for business owners.
Monday, November 26th, 2012
Present age organizations face a very complex and uncertain environment. In order to remain innovative and viable in the long run, many organizations are turning to “intrapreneurship.” However, what is intrapreneurship? How different it is from entrepreneurship? What can an organization do to promote intrapreneurship?
In the Graziadio Business Review article “Implementing Intrapreneurship: A Structural and Cultural Approach” the difference between entrepreneurship and intrapreneurship is first illustrated by defining the two terms formally. Entrepreneurship refers to the process of creating innovative new business ventures or just of creating new business ventures. An entrepreneur is the owner of such a business venture.   Intrapreneurship refers to the process of new venture creation, strategic renewal, and innovation by employees within an organization. Intrapreneurs, then, are the employees of an organization who realize a creative idea and turn it into an innovation or new business venture.  
Then, the GBR article devotes the majority of its main content to the discussion of what an organization can do to promote intrapreneurship. Research has shown that given the right environment and amount of support, many employees can become intrapreneurs. To encourage intrapreneurial activities, it is proposed in the article that organizations have to make sure that the top management creates a clear vision that promotes and encourages innovation and communicates it clearly to all employees. In addition, support from all managers in an organisation is also necessary.
Next, to encourage intrapreneurship, an organization has to adopt either an organic structure, or to set up an independent intrapreneurial team or department, depending on each organization’s context and needs. In addition, the organization must also take measures to achieve a culture that is characterised by high trust and psychological safety, high justice and fairness, and high error and failure tolerance. Together, these organizational features shall form a solid foundation for intrapreneurship, and a cornerstone for organizational competitiveness.
 Gartner, W. B., “‘Who is an Entrepreneur?’ is the Wrong Question,” Entrepreneurship Theory and Practice, 12, no. 2 (1989): 47-68.
 Davidsson, P., Researching Entrepreneurship, (New York: Springer, 2004).
 Gartner, W. B., “What Are We Talking About When We’re Talking About Entrepreneurship?” Journal of Business Venturing, 5, no. 1 (1990): 15-28.
 Rauch, A., and M. Frese, “Let’s Put the Person Back into Entrepreneurship Research: A Meta-Analysis on the Relationship Between Business Owners’ Personality Traits, Business Creation, and Success,” European Journal of Work and Organizational Psychology, 16, no. 4 (2007): 353-385.
 Sharma, P. and J. J. Chrisman, “Toward a Reconciliation of the Definitional Issues in the Field of Corporate Entrepreneurship,” Entrepreneurship Theory Practice, 23, no. 3 (1999): 11-27.
 Anderson, N. R., and M. A. West, “Measuring Climate for Work Group Innovation: Development and Validation of the Team Climate Inventory” Journal of Organizational Behavior, 19, no. 3 (1998): 235-258.
 Frederick and Kuratko.
 Hulsheger, U. R., N. Anderson, and J. F. Salgado, “Team-Level Predictors of Innovation at Work: A Comprehensive Meta-Analysis Spanning Three Decades of Research” Journal of Applied Psychology, 94, no. 5 (2009): 1128-1145.
Read How the Election Year Impacts the Stock Market and View a Finance Panel Discussing Election Economics
Wednesday, October 24th, 2012
The debates may be over, but the election economics are still a vital part of the news. A recent GBR article discusses how the presidential elections influence the stock market and a new video discusses the economic status and how the elections and political turmoil impacts investors.
Recently the Graziadio Business Review posted “The Four-Year U.S. Presidential Cycle and the Stock Market” by Marshall Nickles, EdD, and Nelson Granados, PhD. This article is a follow-up to Nickels popular article in 2004, “Presidential Elections and Stock Market Cycles.”
The newer article:
- Provides evidence of the relationship between economics, politics, and the four-year presidential cycle;
- 2. Includes an analysis of stock market performance during the 2008 period;
- 3. Introduces a risk measurement for the stock market and argues that the 2008 stock market crash should be considered an anomaly; and
- 4. Concludes that the four year presidential stock market cycle is likely still in tack.
2012 is shaping up to be the year of global political change with important changes in the government in Russia, France, Italy, and of course the upcoming presidential election here in the United States. How will financial markets be influenced by such political turmoil and how can investors prepare?
In a recently posted video, a Pepperdine finance panel discusses: “Wall of Worry: Elections and the Markets.” Panelists include: Davide Accomazzo, adjunct professor of finance; Edward Fredericks, practitioner faculty of finance; Clemens Kownatzki, adjunct professor of financial risk management; Michael Shires, PhD, associate professor of public policy.
The video is broken into 3 sections:
- Video 1: “Wall of Worry: Elections and the Markets
- Video 2: “The Fiscal Cliff”
- Video 3: “Monetary Policy and Politics”
Click here for the article “The Four-Year U.S. Presidential Cycle and the Stock Market”
Click her for the video “Wall of Worry: Elections and the Markets”
Topic: America's Financial Crisis, Economics, European Union, Finance, Global Marketplace, In the News, Investing, Public Policy, Videos
Tags: Economics, Finance, global economy, Investment, politics, presidential elections, stock market
Thursday, April 19th, 2012
WRITTEN BY: ERDOLO EROMO
The mobile industry is growing rapidly both domestically and internationally. Many aggregators such as Mobile Messenger (MM) are concentrating on this industry as a new and thriving market.
Annual wireless data revenues are up by 20.8% and are expected to increase for the next 10 years before reaching a plateau. SMS advertising volumes are up 31.3% per year, while voice annual volumes are down 1.5% each year. This demonstrates the strength and potential of new markets for mobile content and billing. In this industry there are typically two client groups: large brands who simply want brand awareness and clients who pursue a quick but high return on their investments by lowering their cost per acquisition (CPA). In order to understand the needs, trends, and growth projections, one must first analyze the demographics and their behaviors.
The content delivered in the mobile industry in the U.S. can be broken down into two categories: premium services and standard rated messages. Premium services are often used by advertisers and application service providers (ASP) who have a virtual product that they wish to sell using the mobile billing mechanism. The standard side of the industry is used by mobile marketers and broadcast brands to communicate information to their customers in avenues outside emails and phone calls.
An aggregator’s direct connections and contracts give it the ability to deliver content and short code messages as well as processing virtual good payments for over 98% of North American mobile phone users. Since most cell phone service providers stopped charging long distance and many offer unlimited data plans, the physical location of the customer has now become irrelevant. For an aggregator it is crucial to create and maintain the direct relationship with the carriers that give them the ability to deliver the content both domestically and internationally.
Over 5 billion text messages also known as “short messaging system” (SMS) are sent each day by Americans. In the fourth quarter of 2007, the average number of texts by consumers surpassed the average number of calls and the disparity has grown significantly since then. Of those who text message 26% said that they have opted in to receive text message marketing messages. This is a huge demographic to target. The typical individual in this demographic comes from a generation that is used to getting what they want when they want it. They also have disposable income, which allows them to buy virtual products on impulse.
Table 1: Average Number of Monthly Calls vs. Text Messages Among U.S. Wireless Subscribers
The introduction of the mobile phone has forever transformed communication. The device that was introduced only to make phone calls is now used for texting, calendars, clocks, cameras, social networking, calculators, email, and a whole array of additional applications. The utilization of one device for many separate functions is known as device singularity. The “one stop shop” has become a socio-cultural phenomenon in the U.S., whether it is at a mega-store like Wal-Mart or at a gas station with a car wash. With the introduction of the iCloud and comparable platforms which allow data, apps, and virtual goods bought on the phone to be accessed via the desktop and vice-versa, it would be a major shortcoming of the industry to miss the opportunity to capture that market via SMS marketing.
Since 1995, there has been a significant yearly increase in mobile phone usage. Currently, 92% of the U.S. population has access to a mobile phone. From June 2005 to June 2010 there was a 20% gain in the number of households that replaced their landlines with mobile phones. With the increase of smartphone usage, annualized wireless data revenues have dramatically increased from the millions to billions with SMS increasing at the same rate. No other recent technological invention has been so quickly embraced by the population at large.
Within the premium and standard rated verticals there are five mobile content types that are expected to assist the continued growth of the mobile industry. The content types are mobile music, mobile games, mobile video, mobile graphics, and mobile information services. Combined revenue from these content types is expected to triple over the next three years.
The Cellular Telecommunications Industry Association (CTIA) annual wireless survey shows that wireless data revenue has been significantly increasing each year since 2002. This has been a strong indicator of the growth of the off deck mobile billing platform. Over the next year the annual volume of data is expected to grow by 31.3%. This has positive implications on aggregator’s premium and standard business.
The mobile phone is utilized widely across most US demographic classifications. With most Americans owning or using a mobile phone, the success of the mobile billing via SMS marketing is inevitable.
1. “CellSigns – Mobile Statistics.” CellSigns – Mobile Marketing, Mobile Real Estate Search, Mobile Newspapers, Text Message and Mobile Marketing Platform. http://www.cellsigns.com/ (accessed April 18, 2012).
3. “Mobile Payment – Advanced Technologies (NFC), Strategies And Future Of Remote & Proximity Payment In U.S.” ASDReports. https://www.asdreports.com/ (accessed April 18, 2012).
Erdolo Eromo moved to South Los Angeles from Addis Abbaba, Ethiopia at the age of eight. A natural athlete, he played football for powerhouses Crenshaw High School and UCLA. He went on to earn his Executive MBA from Pepperdine University in 2011. Climbing up the corporate ladder in 6 years, Eromo is one of the youngest senior executives in the mobile industry. He now serves as Senior Vice President of Sales and Client Services at Mobile Messenger (MM), the largest off deck mobile aggregator in the United States. He is responsible for identifying opportunities and designing strategies for sales growth. By many, Eromo is considered to be an expert in identifying trends in the mobile commerce space as well as finding new opportunities in which the mobile phone can be used as a billing platform.