Friday, April 22, 2016

Professional MBAs take 1st place

Kudos to Professional Jenkins MBAs Pierre Marcella and Graham Ransom who took 1st place yesterday in the Poole College of Management's 8th Annual Leadership and Innovation Showcase.  Teaming with College of Design student Sunny Su, Marcella and Ransom have developed a smart coffee device that can roast, grind AND brew coffee.  Buyers will be able to save a lot of money by doing their own roasting, plus they will get a much tastier brew.

Their project comes from MBA 555 Product Innovation Lab, a course that has been very well received over the years including recognition from Forbes as one of the ten most innovative MBA courses.

Marcella and Ransom will both graduate by the end of the year and they plan to turn their project into a business.  They already have a working prototype.  Looking for a great investment opportunity?

Kudos also to the second place finishers full-time Jenkins MBAs Dana Magliola and Lindsay Schilleman for their research project that measured the size and economic impact of North Carolina's supply chain.

Tuesday, April 19, 2016

Fuqua prof's secrets to time management

Business schools do a great job training their MBAs to handle big picture items such as strategizing and execution items such as budgeting (especially if they can be performed on spreadsheets).  I can safely say that MBA programs totally ignore a critical skill everyone needs to have to be successful: personal time management.

One book I found helpful is David Allen's Getting Things Done.  But who has time to read a 300 page book?

Luckily Fuqua's Dan Ariely has an opinion piece on that will rescue many minutes each day for you.  Needless to say, meetings and email are on Ariely's list.

Friday, April 15, 2016

On living standards

Over the last few months, we have frequently heard politicians (and a real estate tycoon) claim that living standards have not increased over the last 20+ years.  That conclusion is based on comparing the rate of growth of wages (or weekly earnings) to the inflation rate.

Let me illustrate: average wages were $4.96 per hour in March 1976 and were 4.31 times higher ($21.37) in March 2016.  The Consumer Price Index increased by a factor of 4.13.  So the gain in wages after inflation turns out to be quite modest (4 percent over 40 years).

Here's the rub: there are well known problems with estimating average wages and inflation.  For instance, the composition of the work force has changed tremendously; today there are more women and immigrants than 40 years ago and more service and fewer manufacturing jobs.  Also the mix of goods changes a lot; no one bought iPads in 1976 and no one buys typewriter ribbons today.

Another way of looking at the living standards question is to compare consumption patterns.  For instance, one can compare housing, food consumption, and car ownership patterns.  If this shows the same 4 percent growth over 40 years then the Labor Department numbers hold up.

Yesterday's WSJ reported on airline travel.  If we were to time travel back to 1971, 49% of the adult population in the US had flown at least once in their lifetimes; today more than 80% have flown.  If you slice the data to look just at who flew last year, 45% flew in 2015 compared to 21% in 1971.  This is not broken down between business and leisure travel, but the overall implication is that living standards in this dimension have increased.

Of course air travel is a small share of overall spending in today's economy and comparisons of other goods and services undoubtedly will point in the other direction.  Economists use data on total spending rather than physical units consumed, making it hard to separate price and quantity changes. More basic research into consumption of goods and services that can be measured accurately would shed light on this issue.

Tuesday, April 12, 2016

How big is the gig labor market?

The internet has enabled online transactions for real time services between service customers and providers.  You can reserve an overnight stay in someone's home or apartment.  You can get a ride to work in someone's car.  You can get a voiceover narration performed by someone in the Czech Republic.

The gig economy provides new options for workers to make money when they want and how they want while providing customers with more choice.   But it also undercuts existing business models.  Licensed cab owners are less than fond of Uber; hotels are hardly enamored with Airbnb.  Also because Uber drivers are independent contractors, there is no guarantee of a minimum hourly wage and they are unable to organize into unions (as if unions could organize any private sector workers anyway).

With all the headlines, my colleagues Larry Katz at Harvard and Alan Krueger at Princeton set out to measure the size of the gig labor market.  The results, as reported in WSJ: a mere 0.5% of workers were engaged in a typical week.  Uber accounts for two-thirds of this modest number.

Wave of the future?  We would do well to suspend judgment.

Thursday, March 17, 2016

NC State Jenkins MBA climbs in US News rankings

The US News rankings of graduate programs came out yesterday; NC State's Jenkins MBA had its best performance yet.  The Jenkins Professional Evening program came in #34 in the part-time rankings while the full-time program came in at #52 in the full-time rankings.  Historically both programs have been in the 60s and 70s.  Last year full-time was #70 and part-time was #103 (which was a total outlier that none of us have ever figured out).  We moved up 18 spots in the full-time ranking, the second largest move of any school.  

What happened?  On the part-time side, the deans’ assessment score increased, selectivity increased and GMAT scores increased a lot.  For full-time, recruiter assessment was up, GPA was up, selectivity increased, starting salaries were up, and placement rates were up. 

This has been a remarkable year for the Jenkins MBA in terms of external recognition.  We have been #15 for US News Online MBA, #29 for Bloomberg Businessweek Full-time MBA, and #45 for Bloomberg Part-Time MBA.  

I think the best is yet to come.  The forthcoming improvements to the curriculum will put us on the cutting edge for working professional MBAs.  We have fantastic professional staff to enrich the applicant/student experience and enhance career success.  Add these ingredients to the outstanding opportunities that our faculty provide in the classroom and our hands-on “Think and Do” attitude and we have a recipe for continued success.  

Tuesday, March 15, 2016

Jay Bilas on how to select teams for NCAA Tournament

Puzzled why mediocre teams from power conferences (I'm talking about you Vanderbilt and Syracuse) get into the NCAA men's basketball tournament while deserving teams from smaller conferences have no chance of getting in if they lose a game in their conference tournament?  

Jay Bilas, Duke alum and ESPN announcer/analyst has a plan:
  • Tournament selection committee would meet prior to the conference tournaments and rank the top 68 at-large teams. 
  • Teams that win conference tournaments receive automatic bids. If that team is not one of the 68 teams, the lowest-ranked team in the field of 68 is knocked out.
In practice this would help the best of the smaller conference teams.  Using RPI as a measure of overall team quality, they placed 28 teams in the top 68, with 40 from the power conferences.  There are about 20-25 teams that get into the conference as automatic qualifiers that would not be in the top 68 and the displaced teams would come almost equally from the big name and smaller conferences.   

Additional advantages of this approach would be (1) enhanced transparency and (2) greater emphasis on the regular season.  As a Kentucky fan who is still trying to figure out why his team could beat Texas A&M and then be seeded behind them, let's just say I am open to suggestions for improvement.    

Monday, February 29, 2016

NC State MBA team excels in case competition

The Kellogg School at Northwestern took 1st; other participants included Duke, UNC-CH, Chicago Booth, Oxford and Manchester.   Kudos to Graham Givens, Shannon O'Shea, Anindo Chatterjee, Mike Vigars, and Rafael Estevez for representing the NC State Jenkins MBA program so well.  

NC State placed second at the Invest for Impact competition at UNC-Chapel Hill
last Friday.  This is a unique competition where students play the role of investors looking for opportunities that pay off socially as well as financially.  They evaluate business plans for three potential startups, decide which one is most worthy of funding and make a pitch for that startup.  Actual investors and entrepreneurs participate in the process as well, with the investors serving as judges.

Sunday, February 14, 2016

Why tuition is rising

As Margaret Spellings takes over as the new UNC system president, I am sure that tuition in the UNC system will be getting a careful look.  Harvard economist Greg Mankiw recently did an NYT Upshot column where he noted three key factors:

  1. No increases in productivity accompanied by rising costs.  Higher education remains a labor-intensive industry with limited opportunities for capital-labor substitution.  There has been some labor-labor substitution as schools use more non-tenure-track and part-time faculty.  But this has not been enough to offset rising salaries for faculty and staff.  
  2. The widening gap in earnings between highly educated labor and less educated labor.  Colleges make extensive use of workers with advanced degrees and such workers are about the only ones getting ahead in today's economy.  If colleges employed more roofers and gardeners than professors, their labor costs would be holding steady or even dropping.  
  3. Sticker versus actual prices.  Everyone knows the sticker price at Harvard, but no one knows the actual price paid by the average student.  Mankiw shows that list prices have risen by 70 percent over 20 years, whereas the net price (after scholarships) is up 32 percent.  
Two other factors that may be at work behind the national trend: (a) rising financial aid and loan access serves as a subsidy and pushes prices even higher and (b) declining teaching loads for tenure-track faculty.  

In the UNC system we have seen declining state support lead to tuition increases over the last eight years.   

Spellings has put a stake in the ground around expanding access to higher education.  Looking forward, I imagine the UNC system will be looking at innovative ways to deliver education in a more cost effective manner. 

Wednesday, January 13, 2016

NC State Online MBA ranked #15 by US News

The NC State Jenkins MBA received more great rankings news this week.  US News and World Report issued its most recent ranking of online MBA programs and NC State placed at #15.

This is very close to where we finished in 2015.  The program was most highly rated in the area of student engagement (#9).  We also did well on admissions selectivity (#37) and student services and technology (#39).

For whatever reason we did not do as well on faculty credentials and training (#69), despite the fact that -- unlike most other online MBAs -- the faculty teaching online are the same as those teaching our and face-to-face students.  The top two schools on this dimension are Arkansas State and California Baptist; well-regarded schools such as Carnegie-Mellon, UNC, Indiana, and Arizona State are not even in the top 10.

Student interest in the NC State Online MBA continues to grow by leaps and bounds.  We are meeting the market test, as well as scoring well on the rankings.  I expect the best is yet to come.

Friday, December 11, 2015

More competition for full-time MBAs

Competition in the full-time MBA market is heating up.  The University of California at Irvine just announced that all newly admitted full-time students who are California residents will automatically get a fellowship of $10k.  This follows recent announcements by Arizona State and UMass-Amherst that full-time students will get free tuition.

Now here's the fine print: In-state tuition at UCI is $40k and change per year.  Here at NC State the full two-year cost of the degree is $45k for in-state and $74k for out-of-state.  Over half of our full-time students get a graduate assistantship or fellowship, which makes NC State an even greater value.

What is going on in the full-time MBA market?  We see some schools (Wake Forest, Virginia Teach) dropping the degree whereas others are doubling down to attract students.  The real challenge all full-time MBA programs face is that the biggest cost to students is not the tuition; it is two years' lost earnings.  If a school cannot deliver post-graduation a significant bump in income, then that school will have trouble attracting students.

The real numbers applicants should be looking at are these: (1) where am I now?  (2) where will I be immediately after completing the degree? (3) where will I be five years later?  In the most recent Bloomberg Businessweek full-time MBA rankings, their survey of 2007-09 NC State Jenkins MBA alumni found that
-- pay more than doubled between the start and finish of the program
-- pay almost doubled again five years later

That is a big reason NC State's Jenkins MBA placed #25 in alumni satisfaction and #29 overall in the Bloomberg Businessweek rankings!