A roundup of media mentions featuring faculty and staff from the Fox School of Business and the School of Sport, Tourism and Hospitality Management.
The future of sport betting
Last week, a Supreme Court decision lifts a long-standing sport betting ban. STHM’s Dr. Joseph Mahan, whose research has explored the correlation between sport betting and fandom, speaks with Philly Voice and the Philadelphia Business Journal about this decision.
Tips for making mortgage payments
Need ways to pay off your mortgage more quickly? Fox’s Dr. Jonathan Scott serves as one of the experts with whom U.S. News & World Report speaks. Read more >>
Debating Article II of the Constitution
The National Constitution Center’s We The People podcast features Fox’s Dr. Kevin Fandl, in a discussion on President Trump’s executive power over immigration law. Listen >>
Philadelphia Business Journal | May 18, 2018
As printing company Ricoh turns its focus toward digital services, Fox’s Dr. Ram Mudambi explains what the future holds for a company pivoting from its traditional mission and vision. Read more >>
Philadelphia Business Journal | May 17, 2018
As the City of Philadelphia works toward reconciling a $27 million gap in its financial records, Fox’s Dr. Steven Balsam weighs in. Read more >>
Philadelphia Business Journal | May 17, 2018
A local beverage company plans to expand into East Coast grocery stores. For more on the deal and its specialty distribution strategy, PBJ speaks with Fox’s Dr. Susan Mudambi. Read more >>
Philadelphia Business Journal | May 10, 2018
Marriott soon will add a property in Marple Township, Delaware County—a Philadelphia suburb that STHM’s Dr. Wesley Roehl views as underserved. Read more >>
BusinessBecause | May 14, 2018
Kia Brinkley explains how the Fox MBA program helped land her a job at L’Oreal. Read more >>
Media requests: Please send requests to Christopher A. Vito, associate director of communications & media relations, Temple University’s Fox School of Business, at cvito@temple.edu
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The Fox School of Business‘ Center for Student Professional Development (CSPD) has a commencement tradition. Toward the end of every semester, graduating students, when they secure a post-graduation job, ring a bell and publicly announce who their soon-to-be employer is and what their new position will be.
It’s a great way to declare, “I did it! And this is what I’m doing next!”
Temple University’s commencement, which will include hundreds of undergraduate students receiving BBA’s from the Fox School, is this week. So we asked several members of the Class of 2018 to share with us their new jobs and some inspiring stories about their time at Fox and Temple.
Kasey Brown, BBA ’18
Major: Management Information Systems
SPO: Association for Information Systems
New Job: Summer staff missionary, Catholic Youth Expeditions
New Uplifting Experiences: “First and foremost, I’m excited to grow in my Catholic faith. Temple gave me a beautiful opportunity to discover this faith, and I feel so blessed to work for an organization that allows me to grow and discover even more. Secondly, I have always had a special place in my heart for high school students and young adults. I remember what a difficult time of life it can be, and I look forward to being with them and help them in any way I can. In addition, working with Catholic Youth Expeditions means getting to learn more about how to serve the poor and how to love others—and there’s nothing more important to me.”
Helping Others: “Temple and Fox gave me the opportunity to hone my skills—not only in business, but also in communication, time management, leadership, crisis management, critical thinking, and teamwork. More importantly, Temple and Fox helped me discover the reason why I wanted to do business: to serve others. I know that in whatever job I do, it’ll never be just a job. It will be an opportunity to use my skills to help others and give back all I’ve been given here.”
William Clark, BBA ’18
Major: Finance
New Job: Financial analyst, Revint Solutions
Perfect Launching Pad: “As I progressed through my lower-level BBA core classes, I realized I had a passion for analyzing underlying financial data. I have been a math and science guy as early as the second grade, so pursuing a career centered around financial analysis seemed like a natural fit. A financial analyst position is the perfect launching pad for a long, successful career in corporate finance.”
Love at First Sight: “I fell in love with Fox from the moment I attended my first course. I had the privilege of being taught by some of the best professors in academia, within a modern building full of the latest finance-based technology. The Capital Markets Room was one of my favorite places at Fox, as I was able to hone my skills in Bloomberg, FactSet, and VBA programming, among other things. I was able to attain valuable knowledge that allowed me to separate myself from the crowd.”
Alexa Ann Gerenza, BBA ’18
Major: Marketing
SPO: American Marketing Association
New Job: Group ticket sales associate and service coordinator, New York Yankees
A Lifelong Fan’s Dream Job: “I’ve been a Yankees fan my entire life and to now have a job that always seemed so unrealistic it’s still hard to believe. Moving to NYC and having my office at the stadium and my work schedule based around game days, is less typical, yet so very exciting. This is an entirely new lifestyle than one I expected to have post-grad, but I’m beyond excited for the journey ahead.”
Finding Confidence (and Forever Friends!): “The American Marketing Association has given me my forever friends and motivated me to work harder in everything I do. It has given me more opportunities than I ever imagined, including two trips to the AMA International Collegiate Conference in New Orleans, leading Temple’s chapter as vice president to success as a top five chapter, touring the Facebook office in NYC, and competing in an eBay sponsored case competition. Without the lessons learned and the experiences gained, I wouldn’t have had the confidence to send the initial LinkedIn connection to the Yankees and jump on the first phone call, which ultimately led to the position.”
Kyshon Johnson, BBA ’18
Major: International Business
New Job: Business Leadership program/Global sales associate, LinkedIn
Linking Up with LinkedIn: “LinkedIn is my dream company. I was able to tour the San Francisco office in 2016 and made a promise to myself I’d work there. I felt the company and culture aligned perfectly with my passions and life purpose. Initially, I applied for a summer internship and was rejected. I used that experience as motivation and an opportunity to improve my professionalism. I interned at Comcast and gained industry experience before applying for my full-time role. I am confident LinkedIn and the Business Leadership program will groom and mold me into a successful business woman.”
The Fox School Network: “I am thankful for the resources and support that Fox and Temple have provided during my undergraduate experience. Fox has a strong alumni network filled with professionals throughout the world. I utilized the alumni network to connect with Owls within the technology industry. I was able to meet with individuals that work at Google, Facebook, and LinkedIn. They were all enthusiastic to assist me in landing a role at their companies. This professional foundation allowed me to explore career options and connect with amazing individuals.”
Katherine Taraschi, BBA ’18
Major: Marketing
New Job: Owner, O bag (King of Prussia Mall)
An Italian Vacation Inspires a Career: “O bag is an Italian company that creates interchangeable bags and accessories that customers can build in the store. It’s a store my friends and I were completely obsessed with when we visited Italy last spring. We visited six different locations all over Italy and one in Budapest. O bag King of Prussia will be located on the first floor of the Plaza between Lord and Taylor and Nordstrom.”
Benefits of a Real-World Curriculum: “I love that the professors at Fox all have real-world experience. Hearing different situations that they’ve encountered embedded in course topics gave a different perspective to the lessons—and definitely helped prepare me for my new position as a business owner.”
Lindsey Thompson, BBA ’18
Major: Human Resource Management
SPO: Net Impact; Society for Human Resource Management
New Job: Compensation analyst, Day & Zimmermann
A Passion for Philly… and Data: “I’m so excited to continue to live in my favorite city (Philadelphia), work with coworkers I have formed connections with during my internship at Day & Zimmermann, and to dive into the details of data in a field I’m passionate about.”
Involvement Pays Off: “The professors in Fox’s HR department, as well as other schools throughout the university, are some of the kindest and most knowledgeable people I’ve met. I can’t thank them enough for passing on their extensive industry knowledge, their warm and understanding natures, for making me think, and for serving as mentors. My leadership position with Net Impact and my role as a Teaching Assistant taught me the value of detail orientation, time management, effective communication, and remaining open-minded. I would suggest to any undergrad to get involved outside of class, because it has really added to my experience here at Temple!”
Ian Usher, BBA ’18
Major: Management Information System
SPO: Association for Information Systems
New Job: Media-Tech associate, NBC Universal
Becoming a Tech Leader: “I’m incredibly excited to start working for NBC Universal. While working for NBCU last summer, I discovered the company has a wonderful culture where I feel engaged and valued, even as a young employee. During that time, I became good friends with other interns, and it will be wonderful to continue to grow those relationships. The Media-Tech Associate program is a very demanding program, but it’s designed to give us the skills necessary to become future technology leaders.”
A Professional Journey Began at Fox: “Throughout my career at Fox, I was pushed to think logically, clearly, and critically to solve many real business problems. I was fortunate to work on projects with real companies, from startups like PoundCake to major organizations like CHOP. Completing these projects and learning how to interact with professionals helped me excel during my internship and prepared me for the workplace more effectively than if my classes were purely lecture-based. I was a poor writer before coming to Temple, and Fox classes like Business Communications have helped me improve my writing skills dramatically. That’s been critical thus far in my professional journey.”
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Last month, a team of four Fox School juniors took a road trip to the University of Missouri-St. Louis to compete in the 2018 International Business Case Competition. They placed second and returned to Temple with a cash prize of $500.
The Fox School team—consisting of students Tyler Ascione, Sonali Patel, Nathan Pham, and Tarun Sangari—was one of the 12 teams to participate in the live competition sponsored by Nidec Motor Corporation and judged by business leaders from the St. Louis area. The challenge focused on developing strategies for the Japanese company to position, sell, and introduce its new FORECYTE sensors used for monitoring the vibrations and temperature of motors. The team was given the case Friday evening, and had to develop strategies and provide two rounds of presentations to the judges the next day. It was a hectic 24 hours.
“We had to figure out how to consolidate our ideas and put together a cohesive PowerPoint deck within the 24-hour time limit,” the team said. “In the first four hours, we individually researched and tried to get a holistic understanding of Nidec’s business model and the ‘Industrial Internet of Things’ industry. The next six hours, we wrote our ideas on a blackboard and deliberated our strategy. After dinner, we were all extremely fatigued, and did not have a single slide ready. However, at around midnight, we found a second wind. We began motivating each other, and our energy showed through the slides.”
The team ultimately developed a prize-winning recommendation for Nidec.
“Our solution was multi-faceted,” the team said. “First, we recommended they license out its new sensor technology to MROs (maintenance, repair, and overhaul) and OEMs (original equipment manufacturers). Then, for the next five years, we recommended they collect and analyze the data aggregated from those MROs and OEMs. Once the firm had a sufficient level of data, we suggested opening up a new line of revenue: providing insights to OEM and MRO clients. These insights would give the firms a better way to manage their human capital and assess business needs. To maintain security, we considered a distributed ledger technology, providing a way to record digital interactions that are highly resistant to outages.”
4 Most Valuable Lessons Learned
1. “The greatest lesson I learned was to accurately assess and portray different qualitative options with a quantitative model. I had struggled with recommending businesses to pursue different strategies, but I have since gained the tools to quantify the strength of one strategy over another.” – Tyler Ascione, Finance and Management Information Systems double major
2. “Participating in my first case, the greatest lesson I learned is how important it is to decide on a strategy that everyone agrees on and be able to present. It is important to ensure the strategy is a success by conducting a lot of research and having data. It took us a lot of effort to put together the case. However, at the end of the day we all worked as a team and had fun!” – Sonali Patel, Finance major
3. “My lesson was the power of teamwork and team chemistry. We were given a tough case with limited data about a new product from the company. It took us 10 hours to come up with an outline and a general strategy. By then, we were all very tired. But once we came together, each of us tried to motivate each other by talking and even joking around. It seemed trivial but some late-night laughs helped a lot in keeping us up and finishing the presentation. Because we liked each other and understood unique strengths of each team member, we were able to overcome difficult challenges and have a lot of fun along the way.” – Nathan Pham, Management Information Systems major, Finance minor
4. “The greatest lesson I learned from the case was how important it is to tell a story with your numbers. While having a ton of great data is very helpful to support your argument, having the ability to analyze that data and present it in an interesting manner is far more important than anything else.” – Tarun Sangari, Finance and Accounting double major
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The U.S. Economic Development Administration (EDA) of the U.S. Department of Commerce has awarded The World Trade Center of Greater Philadelphia (WTCGP) a $1M, three-year matching grant to implement key strategies of the Greater Philadelphia Export Plan. As part of the nationwide Global Cities Initiative (GCI), supported by the Brookings Institution and JPMorgan Chase, the plan aims to increase the number of exporting companies and accelerate regional job and revenue growth through economic exports. Specifically, the plan will build capacity among the region’s small and medium-sized enterprises (SME’s), and bolster export growth in the Greater Philadelphia region’s health and professional services, architecture, design, engineering, and construction management companies.
Academic partnerships are key to the success of the GCI. Partners, such as Temple University’s Fox School of Business, help supply research to uncover data, trends, and analysis that directly impacts the professional and academic international business community. The end goal for such partnerships are to fuel economic growth, help companies’ increase their sales, and attract more investors in key industries for the region.
A recent study from Team Philadelphia, with Temple University leading the research and data analysis, sought to support GCI and uncover the global network analysis of the region. According to Brookings, Philadelphia ranks fifth among U.S. cities in terms of pharmaceutical exports. The region’s strengths in R&D and the innovation is needed for biotechnology, according to Dr. Ram Mudambi, professor at the Fox School, and his team. Philadelphia is higher up on the value chain, focusing in innovation rather than manufacturing. It remains a challenge for cities to learn how to balance this expertise at innovation with the desire for job creation at all levels, which would historically have been supported by manufacturing. In addition, Dr. Bertrand Guillotin, professor and academic director at the Fox School, contributed to the data collection efforts, which were crucial for the GCI’s first annual Philadelphia report.
For Pennsylvania, promoting exports from Philadelphia is a key economic development tool. It leads to job creation, higher wages, more stable companies, and a diverse market base for firms. Imports play an important role too. The United Kingdom, Switzerland, Germany, and Ireland are key trading partners both in terms of exporting and importing, which demonstrates that Pennsylvania is part of the pharmaceutical global value chain, interacting actively with these key country partners.
Temple University’s Center for International Business Education and Research (CIBER) is currently implementing more than 70 events to improve U.S. competitiveness in the world marketplace and to produce globally competent students, faculty, and staff. Temple CIBER at the Fox School has received a grant from the Department of Education since its inception in 2002 and is one of 17 such centers in the country. The CIBER grant supports academic research for the international business community, including helping produce research that meets the needs of global business objectives.
The program recognizes these figures in its efforts to help U.S. companies connect to global markets:
- 95% of the world’s consumers live outside the U.S.
- <1% of America’s 30 million companies export
- 58% of U.S. companies that export do so to only one country
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A conversation with Alain Verbeke about how the international business research community should adapt to today’s global context.
*The opinions expressed are the personal opinions of the interviewee and not of the Fox School of Business.
In late 2017, the Fox School of Business hosted the Academy of International Business U.S. Northeast Conference. For the second consecutive year, scholars from around the world—this year, there were representatives from 32 countries—met at Alter Hall to examine and discuss the most pressing issues facing the international business community.
The keynote speaker was Alain Verbeke, a professor at the University of Calgary’s Haskayne School of Business and the editor-in-chief of the Journal of International Business Studies (JIBS), who talked about corporate globalization and what it means for international business researchers. We connected with Verbeke after the conference to discuss these issues further.
What’s the biggest challenge JIBS, and international business researchers as a whole, now face?
I see JIBS as the last intellectual barrier against the hordes trying to destroy the vestiges of globalization. One problem is that most of the defenders of globalization have a self-interest in globalization. For example, the CEOs of large multinational enterprises want maximum freedom for their firms. Academics who do speak out in favor, are mostly economists, political scientists, and geographers who do not talk to managers of firms. That is what JIBS does—talk to firms. You can’t say anything reasonable about globalization if you don’t know what’s happening at the firm level. And our role is becoming more important in this new global context where the anti-globalization forces are clearly gaining momentum and power.
I don’t like to use the phrase “fake news,” but when we’re talking about the cost and benefits of globalization, there’s an enormous amount of fake news that literally crowds out what is factually correct in terms of the great benefits that typically accrue to countries involved in international exchange. This is a big problem JIBS addresses.
How do you cut through the noise with more reasonable arguments?
Unfortunately, people see problems in their community and they blame others for them. I call this “the new geography of discontent.” Basically, people blame some individual or group or set of people—preferably those who don’t look like them—for all the problems happening in their community. Easily, one third of people in any community—whether rightly or wrongly, or based on fake news or real news—is aligning with populist movements. There’s a renewed, built-in reflex that says, “Nation first.” One positive element that may come from this is more awareness in policy circles about the adjustment costs that will need to be addressed after freer trade deals, freer investment deals, and freer movement of human capital.
What can policy makers do to adjust for the actual detrimental aspects of globalization?
What has been neglected in the past are the forgotten men and women of trade deals. Globalization has led to outcomes that benefit consumers, but also trigger concentrated job losses and vicious cycles of de-clustering. One positive outcome of populist movements may be that the mainstream parties with common sense will think more carefully about how to deal with those dynamic adjustment costs, and how to anticipate them and how to avoid creating unfortunate reservoirs of forgotten people. Workers need to be retrained, re-tooled, and reintegrated into the economy. That doesn’t mean a former steelworker will tomorrow be operating robots, but other things can be done for those individuals and groups. Policy makers must think about what resources are needed to help with each transition.
What’s the role of academic business researchers in all this?
The anti-globalists often turn to that maligned presence of global firms and the supposedly malevolent processes of corporate globalization. The way I see it is that these critics are attacking imaginary enemies—they’re the equivalent of Don Quixote, who said to Sancho Panza, “Look at these monstrous giants, we’re going to defeat them.” But they were looking at windmills. We must teach the Don Quixotes and the Donald Trumps of the world—it is quite interesting how similar their names are, isn’t it? —that it’s not wise, when you have limited time and resources, to attack windmills. This is the responsibility of the international business research community.
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The automobile industry in Detroit is thriving.
This seems counterintuitive considering all we know about the damaging impact the last four decades of auto industry decline had on the city. But a meaningful transformation happened and automobile firms have found new ways to flourish.
Fox School of Business professor Ram Mudambi has been researching the Detroit auto industry’s transition from a manufacturing center into an innovation hub for many years. His work was recently featured in a New York Times article, “What Happens When the Richest U.S. Cities Turn to the World?,” about how a city’s prosperousness can be determined by how globally connected it is with other cities.
This is true for Detroit’s auto industry, which has become a thriving innovation center due to its robust relationships with other global knowledge hotspots, such as Germany and Japan. However, while innovation and connectedness are thriving, Detroit, which in 2013 became the largest municipality to file for bankruptcy, as a city is not.
“Manufacturing in Detroit is still shrinking along with blue collar jobs,” explains Mudambi. “There’s a quality-quantity disconnect, as there are increasing white collar jobs, but by definition there are fewer of those. When a factory closes, we lose 5,000 blue collar jobs, and then when you open a R&D center, you only create 100 knowledge jobs. That’s been happening in Detroit for decades. In short, this is not a recipe for a healthy metropolitan area. The innovation ecosystem is very healthy, but it has not helped the city very much.”
But there is a possible solution. Mudambi says it’s all about nurturing entrepreneurship and small businesses. He cites Silicon Valley, where thousands of companies start every year, as a healthier alternative. And Seattle, he claims, is Detroit’s most edifying counterpoint.
“America’s future is in the garage,” says Mudambi. “While the auto industry in Detroit has done great innovation-wise, they haven’t done great with the city. But if you look at Seattle, Microsoft, Amazon, and Boeing have done great with innovation and with the city. Why? Because they’ve been engines for startups; they’ve put money into starting small companies. GM and Ford haven’t done this—they just look for suppliers, and haven’t thought about creating new businesses. In the last 20 years, those three Seattle companies have been involved with 66,000 startups. That’s where the jobs are. The solution is no longer in these large companies.”
The Seattle example, Mudambi suggests, specifically the unique way companies there have managed to become vanguards of global innovation while simultaneously elevating the conditions of the city itself, is one other U.S. firms and policymakers should take seriously.
“The U.S. is getting a winner-loser economy where you have winner locations and growing cities, like Silicon Valley and Seattle and Austin, and hinterland areas, like Appalachia and Flint, Michigan,” says Mudambi. “They’re falling further behind and they’re not happy about it. We can’t ignore these places, so we need to find smart ways to address these challenges. The knee-jerk reactions we’re seeing now from some people, saying America needs to cut itself off from the world, are losing solutions. The answers must be in the direction of building skills, knowledge, and more connectivity, and making more informed policy decisions. If we can fix these struggling cities, then we will be on our way to fixing the economy as a whole.”
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There has been a backlash against globalization and multinational corporations lately, but as new markets emerge, people, knowledge, capital, raw materials, finished products, services, and culture will increasingly flow across national boundaries. This flow is the essence of international business, and its success hinges on understanding the new configurations that will emerge. It is essential that we prepare for the new world order.
Why is it important to study the flow of international business? First, comprehending the nuts and bolts of how business is conducted across borders expands knowledge and skill sets. Second, knowing other languages and having overseas experience shows employers that students have an open global mindset. It differentiates them from others competing for a job. The Fox School of Business specializes in teaching the international business flow and in giving students that employment edge. For this reason and more, the Fox International Business (IB) program attracts top students from the Philadelphia region and beyond.
Students also choose the Fox School as a result of its world-leading faculty, beginning with Arvind Phatak, who studied globalization and multinationals in the 1960’s long before these words became popular. Today, Professors Mike Kotabe, Ram Mudambi, and Charles Dhanaraj are driving the Fox School’s IB program to the top. The popular press regularly cites the research output of these three scholars, and the Academy of International Business has elected them Fellows of the Academy—the highest honor that the academy can bestow.
The Fox School’s IB program is committed to providing outstanding internship and career placement help for graduates. The Fox Center for Student Professional Development (CSPD) has close contacts with many international companies and international organizations in the city, region, and beyond. IB student recruiters include GSK, Bank of America, Vanguard, Lockheed Martin, BDP International, BNP Paribas, Alibaba Group, LinkedIn Corporation, Amazon, and various U.S. and foreign government agencies and nonprofit organizations. Salaries reported by IB students cover a wide range based on specific elements (e.g., industry, cost of living, etc.) and have sometimes exceeded $100,000. On average and according to the Economy League of Greater Philadelphia’s export plan, IB jobs and export-related jobs pay 20% more.
A Brief History of IB Education at Fox
Professor Hart Walters offered the first course in International Business at the undergraduate level in 1971, and in 1984 IB became an undergraduate major. The Fox School continues to be a pioneer in developing a state-of-the-art curriculum. For example, it is a founding member of the Consortium for Undergraduate Business Education (CUIBE), a group of nationally recognized IB programs that aims to improve the way IB is taught to undergraduates.
Opportunities to Study IB at Fox
Some scholars see globalization as a continuum: companies start local, and then expand nationally, go on to become continental or regional, and then finally global; all strategy therefore has to be global in scope. Because of this, students are advised to specialize in one functional area and add IB as a second major. Fox students can also minor in IB or get specialized area certificates.
Undergraduates usually take six courses comprised of a core and a menu of electives towards the IB major. Through these courses, students learn both the analytical aspects of IB, such as accounting, economics, finance, insurance and risk, and the behavioral side of IB, such as human resources, legal, marketing, supply chains, offshoring, and strategic management. IB students are also encouraged to join the IB Student Professional Organization (SPO), the fastest growing on campus. The IB SPO hosts practitioners who share their experiences with the students. IB students also work with Temple’s Small Business Administration and the World Trade Center of Greater Philadelphia, advising local clients who would like to take their products or services abroad. IB students get hands on experience by helping these clients enter emerging markets or help foreign clients enter the U.S. market.
At the master’s level, the IB the concentration has remained a popular choice among students. The Fox School offers an Executive MBA in many major countries in South America, Europe, Africa, and Asia.
Global Immersions
Temple University and the Fox School have campuses in Rome and Japan. The university has also had a presence in China through the Fox School and Temple’s Beasley School of Law. Additionally, the Fox School has agreements with many foreign schools where students can spend a semester or year. Undergraduate and graduate students have studied at many of these locations and immersed themselves in the cultures of these places.
Through the Fox PhD program, multiple students have earned a doctorate with an international business concentration. The Fox School’s IB doctoral students have won dissertation awards at the Academy of International Business Annual Meetings. Today these alums are major knowledge creators and occupy prestigious positions in major universities.
CIBER
The IB Program has also been the beneficiary of a Centers for International Business Education and Research (CIBER) grant from the U.S. Department of Education for more than 15 years. This grant provides funding of more than $1 million every four years to selected research institutions that are on the cutting edge of finding ways to improve U.S. competitiveness and trade. Specifically, the grant requires grantee institutions to become regional and national centers for the research and teaching of critical languages, politics, economic geography, culture, laws, and trade practices vital to enhance U.S. trade. Only 17 universities currently hold this grant.
Contact Us: The Fox IB Program is strong in terms of teaching expertise, research impact, rankings, job placements, and in total provides great value for money. To learn more about the program, contact Dr. Bertrand Guillotin via email at Bertrand.Guillotin@temple.edu.
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According to the research findings of a professor from the Fox School, business ownership doesn’t always equate to entrepreneurship.
Dr. Kevin J. Fandl, assistant professor in the Department of Legal Studies in Business, and his coauthor, Juana Paola Bustamante of the International Finance Corporation, analyzed a law passed in 2010 in Colombia to assess the impact of business streamlining laws on small, gray market firms. The law aimed to convince owners of gray market or legally non-compliant firms to become part of the formal marketplace, which entails steps such as acquiring licenses, registering with the local chamber of commerce, complying with labor laws, and paying taxes.
They found that a majority of business owners in Colombia had no interest in becoming entrepreneurs and scaling their firms. Instead, they preferred to operate within informal markets as a means of generating enough capital to support their cost of living, and not much more. In fact, in most cases, these firms utilized informality as a market advantage, securing economic advantages by avoiding the very things that make firms formal, like taxes and labor costs. Fandl’s research paper, “Incentivizing Gray Market Entrepreneurs in Emerging Markets,” was published in Northwestern Journal of International Law & Business, the world’s top-ranked international trade law journal, according to Washington & Lee.
Colombia’s 2010 formalization law, Fandl explained, was an attempt by the country to streamline the process through which businesses registered with the government. The law offered these “shadow” businesses a transition period during which they would pay no taxes, registration fees, or contributions to the government for the social security and health of their employees. The costs eventually would be phased in, according to the law, allowing businesses to be more successful in the immediate term and contribute to employee benefits at a later date. But this approach was based on an economic theory that high costs are the principal barrier to business formalization, a theory that Fandl appears to debunk in some cases.
Fandl’s study explored the level of informality exhibited within Colombian firms and found practically no significant change before or after the law was enacted. While some larger firms used the law as an opportunity to take advantage of the benefits of formal operations at virtually no additional cost, most small firms targeted by the law chose to stay informal.
“The World Bank and a number of other institutions have studied this, and economists have generally concluded that firms operate informally as gray market firms, because it is too difficult or too expensive to formalize their operations,” says Fandl, who added that roughly 50 percent of firms in Latin America qualify as gray market firms. “It’s a huge problem, because, in essence, these firms are engaging in anti-competitive behavior that undercuts the formal market and allows them to lower their overhead costs, giving them an unfair advantage.”
Prior studies in this area relied heavily on anecdotal evidence, according to Fandl, and found that bureaucracy and escalating costs were cited as reasons for holding back owners of gray market firms, providing them with no incentives for registering their businesses. Fandl’s research, however, revealed the opposite.
“We found that while a few use the informal economy as a means to build businesses in a cost-effective manner, the majority of small firms operate informally only to accrue basic income. These inefficient firms are what we call ‘survivalist firms,'” he says. “They operate their firms to maintain a basic standard of living, and without the desire to become a successful entrepreneur.”
Since passing its 2010 law, Colombia and its Ministry of Commerce have developed pilot programs to educate the owners of these firms to become more entrepreneurial, teaching basic business skills such as accounting and management, helping them differentiate between strong and weak markets, offering mentorship, and providing collaborative opportunities with other survivalist firms. These efforts, Fandl says, are intended to find and spark the entrepreneurial spirit the Colombian government believes lies within some of these firm owners.
Fandl’s study concludes that there’s no single solution to Colombia’s efforts to legitimize its informal marketplace. The nation struggles to combat a high unemployment rate, which prompts its people to seek work and find a living any way possible, even if that means doing so by operating a gray market firm.
“’Forced entrepreneurship’ is the term we use in our paper, and until the unemployment crisis is addressed, this issue will not have a solution,” says Fandl, who adds that follow-up studies in this area are ongoing.
This story originally appeared in On the Verge, the Fox School’s research magazine.
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The media’s buzzing this year about the coming artificial intelligence revolution and how it will impact U.S. jobs. Robots of varying shapes and sizes have graced the covers of nearly every business and technology publication, and experts are weighing in on the threats and opportunities.
But there has been little discussion in popular media about how AI and automation will impact emerging markets. To learn more about the issue, we spoke with Bertrand Guillotin, the Fox School’s International Business program’s academic director and an assistant professor of instruction.
Fox’s International Business program was recently ranked No. 1 in North America and No. 2 in the world for research by the University of Texas, Dallas Business School Research Rankings, and it is one of the Top 15 International Business programs according to U.S. News & World Report. The program’s research is published in the Journal of International Business Studies, and it includes three Academy of International Business (AIB) fellows (Charles Dhanaraj, Masaaki Kotabe, and Ram Mudambi).
Since one of the hot research topics in international business today is the rise of automation and how emerging markets are positioning themselves for it, we asked Guillotin to share some insight.
Is there a particular emerging market you find especially interesting, in that it exemplifies some of the big changes happening with the global economy?
Take China, for example, because there are widespread changes happening there. The economy is trying to get away from an export based model; they are trying to change to a consumption based, more robust national economy. They have to be leaders in all kinds of industries to do that, including green technologies—though they are the number one global polluter—and they have to be strong in all the value-added industries. If you look at Dalian Wanda, which purchased AMC Theaters a few years ago, they are strong in entertainment and real estate; they understand the importance of diversification in our global economy.
There has been a lot of recent talk about how AI and automation will impact the U.S. workforce, but we don’t hear much about how other countries, like China, are responding to this possibility.
China could lose 50% of their manufacturing jobs in the foreseeable future, maybe the next 10 years, due to automation and AI. If you talk to partners at KPMG, who are responsible for forecasting what trends are going to catch traction beyond the hype, they’ll tell you it’s still too expensive to put AI and automation in place on a large scale. It’s happening, yes, but it’s not impacting all the jobs the same way. Low-skill jobs will be automated, and we’ve been doing that for centuries already. We do things on a daily basis that are not value-added, but if those things are automated, we benefit because we can focus our brain power on something else. It is a huge question for China, because if they automate too many jobs, they may destroy their national economy. But I don’t think they’ll do that. The cost-benefit analysis has to be made and they will make it.
Is AI and automation a popular topic for international business students?
Yes, issues like this are what make our International Business program very attractive. We have these discussions and we reconcile the different positions. We explain what they need to know to be successful in a world that’s always changing very quickly. We launched the International Business minor last year and we’re now attracting students from six different colleges at Temple, including liberal arts, science and technology, media and communication, and so on. We’re expecting more than 100 students in the minor this year. It’s an exciting time to study international business and our increased enrollment and rankings show that.
For our students, we need to be very clear that they need to keep working hard to stay on top of the game. Beyond their degrees, and beyond graduation, they need to keep educating themselves and keep acquiring skills that cannot be automated. If you stay on top of your skill requirements and continue to train and grow and learn, even if you are in manufacturing, you can survive. But if you just look at the status quo and think the U.S. has been on top of the global economy for decades and that will never change, that’s not going to work. The U.S. has a good chance to stay competitive, but we have to be serious and work together.
Learn more about the Fox School’s International Business program.
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The Fox School of Business at Temple University will introduce new academic programs for the 2016-17 academic year.
A Bachelor of Science program in Statistical Science and Data Analytics headlines the new offerings by the Fox School, and joins two undergraduate minors in Leadership and International Business Administration.
At the graduate level, students can elect for MBA concentrations in either Business Analytics or Enterprise Risk Management. In Fall 2016, Fox also will launch a Master of Science degree program in Business Analytics.
“The addition of new programs and concentrations demonstrate our reputation as one of the nation’s most-comprehensive business schools,” said Dr. M. Moshe Porat, Dean of the Fox School of Business. “Employers and industry partners agree that these areas represent emerging fields and areas of study wherein professionals and leaders are in great demand, and we have the diverse, renowned faculty to answer the call of industry and these support programs.”
The undergraduate major in Statistical Science and Data Analysis will provide students with the ability to select, utilize and apply quantitative reasoning and data analytic skills to their future fields of study, according to program director Dr. Alexandra Carides, Associate Professor of Statistical Science.
The minor in International Business Administration incorporates the nationally ranked curriculum of Fox’s undergraduate-degree program in International Business. The minor requires only four courses and four prerequisites, delivering the cornerstones of international business education while offering students the opportunity to complete a study-abroad trip in the process.
The minor in Leadership cultivates stronger interpersonal skills for effective management and leadership positions. With courses focusing on workplace demands for leadership from both the organizational and interpersonal points of view, the minor allows students to move beyond technical competence as they step into leadership roles in industry.
The MBA concentration in Business Analytics is designed to enable graduate students to use data and models to recognize opportunities and to improve organizational decision-making. “Data-driven decision-making has been shown to have large positive effects on outcomes of interest to organizations of all types,” said Assistant Professor of Marketing and Supply Chain Management Dr. Eric Eisenstein, the concentration’s director. “Business Analytics concentrators will meet the growing demand for talent in the areas of managing, analyzing, predicting, and discovering insights from the complex data that is available to modern corporations.”
The MBA concentration in Enterprise Risk Management, offered by one of the most-prestigious Risk Management programs in the nation, will prepare MBA students to design and implement state-of-the-art processes that enhance and improve organizational strategic decision-making, how it manages risk across the enterprise, as well as improving traditional risk mitigation decisions. “This concentration will provide MBA candidates with the concepts and tools to develop advanced organizational risk management capabilities and pursue executive responsibility for managing enterprise-wide risks,” said Assistant Professor of Risk, Insurance, and Healthcare Management Dr. M. Michael Zuckerman, the concentration’s director.
All eligibility and declaration questions regarding the new undergraduate major and minors should be referred to Fox’s Center for Undergraduate Advising. Graduate students are encouraged to speak with their program advisors for more details about new curricula.