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Another meet the Deans at Commerce Park has come and gone. Yes, meet the Deans at Commerce Park was held on Wednesday, November 12. The event was well attended by staff and students . I didn't even bother taking a count of evening students. It went from about 5:30 p.m until 6:10 p.m as we had to make it to 6 p.m class (you know how dedicated we are at reaping the returns from our tuition payments) or because everyone was full by then.
Staff from the Office of the Dean, Career Development, Computing Services, and the Kresge Library were present and addressed questions and gave insights into plans at the B-school.
Issues that were addressed include: Faculty recruiting, availability of courses during spring and summer semesters, and the sponsorship of programs by companies. Faculty recruiting is a priority at the b-school especially in the areas of finance, marketing and corporate strategy. And emphasis is placed on attracting the best.
With the issue of company sponsorship, the B-school works with companies to help them address issues that might come up with their employees in the evening program. For example, the issue of compensation upon graduation for an employee who had tuition assistance during the program. An idea that I thought sounded good was having evening students do projects for companies just like the day students do with MAP.
Also, one and a half credit classes do not fit perfectly with some students tuition plans--as their companies pay for only two classes regardless of number of hours. The B-school is aware of this and is trying to have this addressed by companies.
There was also mention of discussing with companies to schedule presentations to better accommodate evening students. Say, scheduling presentations later in the day or having office hours at CP. Some companies have embraced the idea while some have not.
Someone brought up the idea of taking the writing assessment on a word processor since it is rare to write a memo anymore. Good idea, but I have one question. What happens to the spell checker, is it turned off? Call me old fashioned but (IMO) there is something about being able to spell correctly.
The greatest suprise of the evening was finding out that there is no difference between the letter grades and the Excellent, Good, Pass system.
Some of you might have noticed two big boxes in the lobby at CP. Well, these are for collecting non-perishable food items for the MBA food fight. I mentioned it last week but what I wasn't aware of is that the food gets weighed on Wednesday's and Friday's. Don't have any food at home? Monetary contributions are also accepted. So please don't keep those items until the last day. The last day is November 21 at 4 p.m.
I would like to say thanks to all those who put this event together, the CP staff and the staff of the B-school. I think they do a decent job of listening to us and try to accommodate us as best as they can.
Reminders: For those interested in The International Exchange Program, a presentation will be held today (November 17, Monday) at 4:00 p.m. in K1310. Come talk to the current exchange students and find out about the exchange experience.
The inability of the Clinton Administration to successfully bring fast track trade legislation to a vote will have significant impact upon members of the B-school community for three reasons.
First, because next year is a mid-term election year for Congress, many Democrats will be unwilling to vote for this legislation. Second, Labor's new found muscle in grounding the legislation will make itself felt more and more--not only on trade issues but also in other areas of the domestic economy. Finally, the benefits of increased trade will be delayed until this legislation is approved.
For readers of this column, the last reason probably is the most influential. Clinton said he wanted the authority to expand the North American Free Trade Agreement (NAFTA) to Latin American countries, especially to Chilé. However, Clinton also has a much wider "Free Trade Agreement of the Americas" in mind.
To help gauge the potential impact of such a trade deal, we need to take a closer look at Chilé and other Latin American economies. Chilé is widely recognized as having the most open, stable, and liberalized economy in Latin America. Chilé has a market-based economic system in which the public sector plays only a guiding and supportive role by setting the ground rules, compensating for major imbalances, and maintaining macroeconomic stability. Trade liberalization, capital and labor market reforms, privatization, the creation of a regulatory framework, and social security and pension reforms were strengthened after the severe macroeconomic and financial crises of the early 1980s.
Social developments in Chilé over the past 20 years have also been impressive. Key social indicators (including life expectancy at birth, infant mortality, malnutrition, educational attainment, and overall literacy) are more in line with higher income countries than the developing world. Slightly above one fourth of Chilé's people live below the poverty line today compared to almost half in the mid-1980s.
Chilé also enjoys strong domestic savings, a strong fiscal position, a modern financial infrastructure, and robust institutions. Chiléan exports have risen from just slightly under 10% of output 25 years ago to 29% today. Exports have also diversified, and Chilé now ships 3600 items to 167 countries. According to the World Bank, economic growth prospects are excellent, and Chilé's 6.5% to 7.0% medium-term growth is sustainable, which will give Chilé a foothold in the industrial world early in the next century. By allowing Chilé to join NAFTA, the U.S. will add a country with impressive growth potential to our common market, expanding the ability of American businesses to grow with Chilé.
The World Bank also believes that Chilé still faces a number of important challenges. These include the need for improvements in infrastructure--particularly roads, ports, and waste management facilities. Output growth will also need to be supported by significant increases in productivity growth. Areas where Chilé needs improvement are also the areas where American companies have a strong competitive position, including high technology and capital goods.
The pace of change in Chilé continues in other areas as well. The government is reforming education and revamping the system of granting concessions for public works to the private sector. The government is also strengthening bank supervision to include direct cooperation with supervisory institutions in other countries. It is also expanding work force training, increasing the coverage of health and social services, and expanding programs to combat structural poverty. The government has also introduced a series of initiatives to make public administration more efficient and effective. It is streamlining the customs and internal revenue services, and a new law will provide for the partial privatization of the port authority and the water and sewer companies.
Another indicator of Chilé's stability is the growth of total foreign exchange reserves from less than $3.6 billion in 1989 to about $14.8 billion at the end of 1995. In 1989 foreign reserves represented about 6 months' worth of merchandise imports; by 1995 they had grown to a margin of 12 months. Also, in 1992 Chilé became the first Latin American country to regain an investment grade rating when Standard & Poor's issued a full investment grade BBB rating to Chilé's senior long-term foreign currency debt.
Beyond Chilé, the nations of MERCOSUR (Mercado Comœn del Sur) also offer lucrative markets to American Companies. MERCOSUR went into effect on January 1, 1995, among four countries in South America--Argentina, Brazil, Paraguay, and Uruguay. In June 1996, Chilé and Bolivia agreed to join MERCOSUR, extending the frontiers of the South American trading bloc. Chilé's participation took effect on October 1, and Bolivia's formal association with MERCOSUR began on January 1, 1997. MERCOSUR plans to incorporate all South American countries by 2005 before linking up with NAFTA.
Between 1991 and 1994 regional trade within MERCOSUR tripled in monetary value. Before the Asunción Treaty, it was worth $3.6 billion. In 1994, the MERCOSUR trade with Brazil alone amounted to $10.5 billion. Regional trade is bound to grow in the future. The growth potential of trade among the MERCOSUR member countries is vast, not only in the traditional area of product trade, but also increasingly in the area of services, technology, investments, and human resources. The trade among Argentina, Brazil, Paraguay, and Uruguay has grown significantly. In 1987, the imports and exports among the four countries totaled $2.7 billion. In 1994, this was close to $12 billion, and is expected to double by 2000.
A closer look at member states shows that Brazil is the largest economy in Latin America and has about 2.5 times as large a GNP as Mexico. Brazil's successful containment of its hyperinflation with the Real Plan has many expecting it to emerge as a leading market force in Latin America. Other Latin American countries making progress in trade are Venezuela and Colombia. Since 1991, Venezuela and Colombia have strengthened their commitment to integration through the signing of the Barahona Act (1991) and the Maiquet'a Declaration (1992). These agreements were aimed at establishing a free trade area between Venezuela and Colombia that the other Andean countries could eventually join, eliminating internal tariffs by 1992 and introducing common external tariffs by 1994.
The world is increasingly coalescing into groups of countries with closer trade ties. NAFTA and MERCOSUR are some of the international agreements that typify this move. The business climate in the near future will involve positioning your company to compete in a global yet fragmented environment. Decisions such as what products to offer and where to place your production plants will be heavily influenced by the trade position of your target markets. The very target markets you chose may be limited by the trade legislation germane to the states in which you currently operate. The countries of Latin America represent rich opportunities for American companies. Trade benefits both importers and exporters. If the U.S.hopes to benefit from the large Latin American trade flows, it needs to more closely align these countries with NAFTA. To do this, Clinton needs so-called Fast Track Authority.
The dilemma facing the U.S. is that if we delay moving forward, the opposition to reduced trade restrictions will become increasingly intense. We must find a way to address the legitimate concerns of environmentalists and Labor unions while continuing to push ahead with a more open global trading environment. The U.S. is the largest exporting nation in the world. Our workers are the most competitive in the world in many industries. American workers and consumers lose by not advancing the cause of trade liberalization.
Information in this article came from the World Bank.
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| Economic Sociologist: With a bachelor's degree in finance and a doctoral degree in sociology, Professor Wayne Baker specializes in the sociology of organizations and markets. Photo by Gregory Fox |
Dr. Wayne Baker, Associate Professor of Organizational Behavior and Human Resource Management, has been teaching students the right way to network since his arrival at the B-school in 1995. His Organizational Design, Managing Through Networks, and Network Tools for Consultants classes have been hits with second-years and, upon returning from the holiday break, first-year students will be exposed to Baker's wisdom as he tackles the core OB course for the first time.
The author of Networking Smart (McGraw Hill, 1994) explained the origins of his book to me over a sumptuous lunch of szechuan vegetables and sweet-and-sour pork. "I wanted to dispel the myths about networking," says Baker. "Good networking is social capital. The more people who do it right, the better off the individual organization and the nation."
The study of neworks combines Baker's two seemingly incompatible passions: finance and sociology. Baker, a Connecticut native, earned his BS in finance and MA in sociology from Northern Illinois University, and a PhD in sociology from Northwestern.
"After graduating with a degree in finance," says Baker, "I wanted a new perspective on the world. I thought, 'What is 180 degrees from finance?' and wound up in sociology, which turned out to be a very quantitative discipline."
Baker's field of expertise is economic sociology, especially the sociology of organizations and markets. "There is a natural link between finance and sociology," he explains. "Markets are simply networks of relationships. Financial markets like the stock market are peopled by human actors."
Students in his classes have learned how to take an X-ray of a company and discover the real network of relationships behind the formal organizational chart. "Relationships are crucial to any field," says Baker. "Corporate strategy talks about interorganizational relationships, marketing the relationship between the buyer and seller."
People make the difference, professor Noel Tichy drilled into our heads during orientation. "The best business leaders today know that organizational behavior is vital to success," Baker explains. "The traditional sources of competitive advantage have become less important. The real advantage lies with the people that make up the organization."
The strength of Michigan's OBHRM department lured Baker away from the University of Chicago, where he had taught for eight years. Although he enjoyed his tenure there, Baker is not sorry to have given up the high-brow environment. "To me, Chicago seemed like a monestary of the minds," he says with a smile. "I always imagined monks copying the great manuscripts in high towers." Michigan, on the other hand, is like "a city with many interesting neighborhoods."
Baker notes that Michigan students are more open to the "softer" side of business than their Chicago counterparts. He praises Michigan's broad, well-rounded perspective, and raves about the OBHRM department, which he describes as "the best and the nicest." Baker also appreciates the administration's commitment to innovation. "It is our written mission as researchers at the B-school to understand the culture in which business operates. We are encouraged to explore new areas and take on new projects."
Baker has taken the advice to heart. His latest project, which he hopes to finish before the winter term, is a new book about the perception of moral crisis in America called North Star Falling. It addresses the theory that the US society is divided between the progressive and the orthodox. Baker recently presented concepts from the book at Michigan's Institute for Social Research.
While his editing and teaching leave him little leisure time, Baker does enjoy hiking and biking along the Huron River, exploring Ann Arbor's wide assortment of restaurants, and reading classical literature. "I'm just finishing Hemmingway's last novel," says Baker with a rueful grin. "Now I see why he killed himself."
We've been reading The MSJ ever since we began BBA hell back in September. Week after week it is apparent that this paper is run by MBAs whose sole purpose is to deliver propaganda and tighten their strangle on the rest of the B-school. So in light of the MBA domination of The MSJ, we've created the "BBA BackTalk" column. Each week we'll chat with a different BBA student over lunch (free, we might add) and get their thoughts on everything from finance to Final Four predictions.
This week's chat is with Rich DiGeronimo, a BBA1 with smooth post moves and a wicked jump-shot. Rich spent last summer driving cross-country, camping at various national parks, and teaching coyotes how to extract water from cacti. He was voted section representative and is active in the Business School Government. Currently, he is involved with the "Food Fight" charity drive and is trying to organize an overnight trip for his BBA section to either Mardi Gras or Wall Street.
Q: What's your take on the B-school so far?
A: I was really excited when I got into the B-school. It was a real feeling of accomplishment to get into such a prestigious program. But now, after a few months of experiencing it and talking to other students, it's almost like we've chosen to get a disease. I've been satisfied with the program so far, but I just feel like there's more to college than corporate finance.
Also, all the companies that come here are Fortune 500. There ought to be more small business representation so that we have more avenues from which to choose.
I also think that there should be more camaraderie between the students. It seems like most people are here only to get their work done, get the internship, then the job. I don't know, maybe put a pool table somewhere in the building to break the tension and stress.
Q: Do you feel like you're giving up more than you will gain from being a BBA? That is, you're giving up a lot of free time, you're living in the Kresge Library, drinking less alcohol, probably dating less, and taking some classes that you don't want to be taking. Is it worth it?
A: I think so. At least now I have a marketable diploma. It gives me something to talk about during interviews. Now I can say that although I love to party and do crazy stuff, I can also do some serious work when it's necessary.
Authors' Note: The previous questions were designed to give this article some sort of credibility. Now we move onto the rest of the interview.]
Q: Business Economics 300: Do we really need to be taking this course?
A: Definitely not. Out of all the classes that I'm taking this semester, I feel like I'm learning something, gaining knowledge. But that's not the case with Business Economics; it's just a horrible class (but Avik's the man). We've essentially taken it already in LS&A. The actual course isn't much different, but the tests are a lot more difficult.
Q: What is your ideal, yet realistic, job directly after graduation?
A: Be an executive for a travel television station. I'd travel around the world with crews of photographers and just see the world--all paid for by the company. I'm not into the whole Corporate America thing.
Q: Which leads us into the next question: Do you see anything odd about a 19 year old who reads the Investors Business Daily religiously?
A: Yes, I think it's a little disturbing. I think people our age should be reading Sports Illustrated and Playboy. To invest right now, it just seems like we're so young. I'll admit I've tried to sit in the lounge and look professional reading The Wall Street Journal and I hate it; I just don't enjoy it at all. But the treasury yield curve, now that's interesting stuff.
Q: Do you think BBAs should be allowed to go abroad 2nd semester junior year, with all other U-M students, as opposed to senior year?
A: Absolutely. Personally, most of my friends are going away next semester and I'm going abroad 1st semester next year, so I'm not going to see them for a full year. Also, if I don't get accepted into the program for next year, I could lose out on housing. My argument is that there is no difference between taking the core classes 2nd semester this year or 1st semester next year?
Q: A movie that makes you cry?
A: Rudy
Q: A B-school class that makes you cry?
A: They can't break me. None of them make me cry.
Q: Last Question: Marv Albert--Who would've ever thought?
A: Yessss!!!
If you'd like to chat over lunch or know someone who is chat-worthy, please contact us. Did we mention that you choose the place and we pay for the meal?
This week we present Adam Meron, MBA1, the official dating consultant to the Blue Chip Bachelor column. In addition to Adam's rankings, we post one of our own: Dave Sanchez, AKA Safe Dave, has now moved to the category of Potentially Unsafe Dave.
STATUS RANKINGS©, by Adam Meron
To help facilitate the flow of information amongst business students regarding dating status, I have developed a simple ranking system. Like most systems, the dating system in school is often inefficient and a ranking system might speed the flow of information. After all, as our economics professors have pointed out, it's all about efficient markets.
M - Married
Obvious I know, but some of us still forget to look for the ring. And some of us forget to wear them... Doh!
E - Engaged
Why this distinction? Because, b-school has been known to wreak havoc on the best laid plans of mice and ...
C - Committed
Another obvious ranking, but you would be amazed at how quickly this one changes in business school. See the next category for an explanation of the "big weekend" and the "big talk."
L - Limbo
How do you know if someone's in limbo? Ask the person if they have a significant other and you get the shrug and the phrase "Well, I have this person in..." An L usually turns into a C or S by Thanksgiving, which I'm told is the "big weekend" for the "big talk."
S - Single
Perhaps the most important of the rankings. At least to other Ss. The market for Ss is strong this year, but as the MBA2s continue to swoop down on the MBA1s, the seller's market is getting worse. Of course the MBA1 men are not doing themselves a favor by laying low. I've had several MBA1 women ask me why MBA guys are "so lame." In defense of the MBA guys, I don't think "lameness" is particular to the MBA male. It may have something to do with my "single bullet" theory.
H - Hiatus
My own personal favorite. An H is recovering from a C. Hs are taking a break, healing (or licking) their wounds, and wondering if they want to ever return to the battlefield of love--a field littered with the corpses of many Ms, Es, Cs, Ls, and Ss.
*Warning and Disclaimer--Like personality typing and other ranking systems, the STATUS RANKINGS© should be used as a tool only.
Name:
Donald H. Houston, MBA2
Name: Venkat
Ramaswamy, Professor of Marketing
Who is SHE? (Hint: Private stock.)
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Detractors
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by Kishore Kogalanu, MBA2
If you think EMU is a large bird, consider the egg (call it Euro) it lays: worldwide central banks dump a trillion dollars in the markets. This will make the current Asian currency crisis look like peanuts. Interest rates in the U.S. will rise dramatically and the economy relapses into a recession.
Recently, I attended a conference on the EMU at Koln, Germany. "Europe is becoming a technological colony of the U.S. and a financial colony of Asia. We need to reverse this trend" is the rallying cry of the European Monetary Union member countries. The European Monetary Union (EMU) will provide the biggest market for European firms and create economies of scale. This will make the EU firms more competitive and help them compete globally on a favorable footing. Such ideas motivate the integration via the union.
Key Events
Two important events in the European Monetary Union are the Maastricht Treaty and the Amsterdam Treaty. The first is an internationally binding treaty signed by the 14 European countries led by Germany and France. Most of the issues regarding the monetary union are laid out in the treaty including the creation of the European central bank and the creation of Euro (the common currency). A second major event is the treaty of Amsterdam. It provides the basis for the policy on the Euro: stability of the currency and growth.
The future dates to note: January 1, 1999, for the EMU to come into effect, and January 1, 2002, Euro will come into existence. After 2002, all countries will use Euro as the currency and each of the countries central banks will no longer be able to print money. The European Central Bank will print Euros. Central banks of individual countries will sell bonds denominated in Euros.
Problems
If things were as easy as the assumptions in the EMU, life will not
be interesting. Collectively, economists and private bankers have identified
several reasons for failure of the European Monetary Union. The key issues
are summarized below:
Two Camps
The two obvious camps in the debate on the EMU are the supporters and detractors. Supporters are mainly politicians and the central bankers of the EMU member countries along with businessmen. The detractors are mainly economists, particularly American economists including Milton Friedman, and private bankers.
Posible Outcomes
Blue in Germany
At a dinner during the conference, I could get several of the attendees to sing the Michigan fight song "Hail to the Victors.". The participants included the central banker from Austria. Interestingly, this took place at the "La Redoute" castle. This took place in the same room as Mozart's first recital (1792) of the "Magic Flute" as well as the first performances of Beethoven and Hayden. I can safely state that this is the first time a college song has been sung in this room.
Also, during the conference, I had the chance to speak with the noted economist Milton Friedman for twenty minutes on the aspects of the European Central Bank. Good or bad, UMBS got a lot of exposure to all the central bankers on continental Europe during this discussion.
Consensus in EMU
The conference had its lighter moments arising from the differences across member states. French central banker interrupted a speech by the German banker by saying "Kafka said eternity is a long way from the end but you make it a long way from the beginning."
French Prime Minister when questioned about Britain not joining the EMU said, " my first love was a British girl. Let the British come and join us and we will all rediscover the beautiful Britain we all love."
British Chancellor for the exchequer said, "the only reason for the fiscal criteria set for by the EMU were to try and keep Italy out."
Clearly, these indicate a significant degree of disagreement across member states inspite of a common desire for the EMU.
Prediction
The most likely outcome will be the European Monetary Union taking place in 1999 with currency union as the initial step. The benefits will be slow in coming. Some of the expectations will definitely not be met in terms of reducing unemployment.
If used as an instrument for tradewars, Euro will backfire. Clearly, APEC and Asean trading blocks will react vigorously leading to a economic destabilization in the short run. More importantly, trade wars can lead to a weaker EU in the long run.
On the positive side, if EMU leads to more open markets and common currency, it will enhance global trade, reduce unemployment in Europe and enhance Europe's diplomatic and economic presence in the world economy.