How Natural Disasters Can Turn into Economics Disasters – Chicago News
Let’s explore some of the most interesting stories that have emerged from Chicago business schools this week.
Localized Natural Disasters Can Hurt an Entire Country’s Economy – Kellogg Insight
Northwestern Kellogg School of Management associate professor of managerial economics and decision sciences Alireza Tahbaz-Salehi set out to understand the large-scale economic implications of natural disasters.
Tahbaz-Salehi worked with Vasco Carvalho of the University of Cambridge, Makoto Nirei of the Ministry of Finance of Japan, and Yukiko Saito of the Research Institute of Economy, Trade and Industry in Japan. After the 2011 earthquake, “disaster-affected firms’ connections to companies outside the regions affected by the quake had a strong effect: these links accounted for a 1.2 percent decline in Japan’s gross economic output the year after the disaster.”
The aftermath of the 2011 earthquake in Japan hurt economic productivity for a lengthy period of time. Photo via Reuters
Tahbaz-Salehi says, “If these shocks start propagating from a firm to its customers, to its customers’ customers, and so on, they may also have an aggregate effect on the entire economy. But there have been almost no empirical studies to document whether these effects exist and how big they are.”
You can read more from Kellogg Insight here.
Hitting Rock Bottom After Job Loss Can Be Beneficial – Mendoza College of Business
To paraphrase Beckett, “Try, fail, try again, fail again, fail better.” Notre Dame Mendoza College of Business‘ Siegfried professor of entrepreneurship Dean Shepherd recently co-authored a study in Academy of Management Review with Indiana University’s Trenton Williams, which finds that on the road to success, failure is often the most revealing option.
“On the way down, we frantically do all sorts of things to try and repair the situation, and suffer as they fail. Bottoming out frees us from the misconception that the problems can be fixed, and in the process, frees us from other constraints and negative emotions and provides the conditions necessary to find a viable solution.”
He continues:
“‘A failed corporate executive might consider a variety of other potential roles,’ Shepherd says. ‘For example, sitting on the board of a nonprofit organization that is desperate for experienced managerial guidance, exploring government positions or running for office, working with startups, and so forth. Similarly, a failed entrepreneur might explore how skills learned in starting a business could be applied in a corporate setting, take standardized exams to be considered for law school or engage in other low risk exploration activities. In these cases, hitting rock bottom opens up myriad new opportunities.’”
Read more about the duo’s research here.
Would You Pay $20 a Day to Lease a Luxury Car? – Booth School of Business
University of Chicago Booth School of Business associate professor Daniel Bartels and the University of Rhode Island’s Stephen Atlas are scheduled to publish a new study in the Journal of Consumer Research entitled, “Periodic Pricing and Perceived Contract Benefits,” which finds that people “perceive more benefits from their purchases if they make payments on a periodic basis.”
Research from Booth shows that people feel their purchases are more valuable if its paid off in repeated cycles. Photo via NY Auto Show.
“Our framework and results suggest that periodic pricing can help people appreciate the benefits they accrue from a purchase. So, under the right conditions, marketers can encourage purchase with periodic pricing, even for significant sums of money.”
Read more about the duo’s research here.
Misty Johnson Named Business Dean – DePaul Driehaus College of Business and Kellstadt Graduate School of Business
As of March 1, the Driehaus College of Business and Kellstadt Graduate School of Business formally introduced its newest business college dean, Misty Johnson, Ph.D.
Johnson became the interim dean of the business college back in July, replacing former dean Ray Whittington. With her role now official, she has become the first-ever female dean of DePaul’s business school.
“Dr. Johanson has done a laudable job, and I’m pleased the college will continue to benefit from her leadership and expertise,” DePaul University Provost denBoer said in a press release.
“During her tenure this academic year, fall graduate business enrollment increased 16 percent; staff roles were reimagined to enhance the student experience; master’s program and center directors began collaborating more closely to support graduate program success, and the college forged stronger industry connections to support career opportunities. Johanson also launched a campaign with the Office of Advancement to raise $4 million for the college by the end of the academic year and exceeded the goal within the first six months.”
You can read more about the official appointment of Dr. Johnson here.
Chicago News: Northwestern on Bitcoin, Notre Dame Explores Psychopathy and More
Let’s explore some of the most interesting stories that have emerged from Chicago business schools this week.
New Cryptocurrencies, Same Old Problems – Kellogg Insight
Following Bitcoin’s record high $19,511 BPI at the end of 2017, which has already begun its slow steady decline (its BPI is around $10,800 as of Feb 19), folks outside the standard-issue Silk Road users and modern-day gold prospectors have begun to openly (and loudly) question whether we’re due for a global cryptocurrency takeover. Northwestern University Kellogg School of Management professor Sarit Markovich advises eager beavers to slow their rolls:
“There are certainly huge advantages to blockchain technology, especially when it comes to cross-border transactions. But I doubt we’re going to reach the point where decentralized cryptocurrencies replace cash or distributed ledgers replace central banks. There’s too much room for manipulation. Instead, it looks like the real innovation will occur within large institutions, which is not exactly democratization.”
Markovich goes on to note another problem with the current state of Bitcoin, which is the preponderance of “whales” mining the currency. He explains:
“In addition to ‘mining pools,’ there is also the problem of ‘whales:’ roughly 1,000 people own around 40 percent of all bitcoins. As the market continues to rise, there is a risk that some may be in a position to manipulate the market. For example, they could collude in an effort to drive the price of Bitcoin up, then cash out all at once—and perhaps even bet against the futures market.”
Read more about the future of cryptocurrency here.
Psychopaths Tend to Benefit and Flourish Under Abusive Bosses – Mendoza Ideas & News
Got a boss from H-E-double hockey sticks? You’re not alone. But what might make you unique is your ability to stand heat. It turns out some folks actually do quite well under cruel conditions. It also turns out that these folks might have more in common with Richard Ramirez or John Wayne Gacy than they’d care to admit, according to a new study by Notre Dame Mendoza College of Business assistant professor of management Charlice Hurst:
“We found that primary psychopaths benefit under abusive supervisors. Relative to their peers low in primary psychopathy, they felt less anger and more engagement and positive emotions under abusive supervisors.” “It may reward and retain exactly the kind of people who are likely to perpetuate abusive cultures,” she says. “Psychopaths thriving under abusive supervisors would be better positioned to get ahead of their peers.”
Hust continues, saying:
“If they have a problem of endemic abuse, like Wells Fargo — where former employees have reported that managers used tactics designed to induce fear and shame in order to achieve unrealistic sales goals—and upper-level managers are either unaware of it or are not taking action, they might notice increasing levels of engagement due to turnover among employees low in primary psychopathy and retention of those high in primary psychopathy. At the extreme, they could end up with a highly engaged workforce of psychopaths.”
Read more about Dr. Hurst’s research, entitled “Are ‘Bad’ Employees Happier Under Bad Bosses? Differing Effects of Abusive Supervision on Low and High Primary Psychopathy Employees,” here.
Financial Compensation Can Distract From Emotional Suffering – Chicago Booth Review
University of Chicago Booth School of Business professor Christopher Hsee, Northwestern professor Xueer Yu and Ph.D. candidate Shirley Zhang recently explored the complex analysis required to compensate victims who suffer grave psychological, physical, and financial duress.
What the trio found, surprisingly, is that psychological and physical distress was often much more rewarding than financial damage. And even mentioning financial damage, coupled with psychological and physical damage, often hindered compensation.
The reason? Financial damage is generally empirical and can be exacted with ease.
“It would be better to say ‘I was so scared that I lost two nights’ sleep’ than to say ‘I was so scared that I lost two nights’ sleep and one day’s work,’” the researchers write. “If the victim mentions one day’s work, the mediator would likely compensate the victim for only her one day’s pay. If the victim does not mention one’s day work, the mediator would likely award more, unless the victim has a high-paying job and the judge is aware of it.”
Read more about their research, recently published in the January issue of Organizational Behavior and Human Decision Processes, here.
MBA on the Lake: Higher Learning in Chicago & Toronto
To have some type of natural source to balance out the cacophony of city life is crucial to a healthy mind. Not every major city is a concrete jungle, completely broken off from its former natural self or its surroundings. It might surprise city slickers the amount of wilderness opportunities that exist just outside their doorstep.
Take Toronto, for instance. Situated on the shoulder of Lake Ontario, Toronto is surrounded by plateaus, deep forest, ravines, and three rivers. While other Canadian cities may beg to differ, Toronto is the financial and cultural capital of the country. It has long been a hub for migration since the days of the Huron and Iroquois and houses the five largest financial institutions in Canada.
As the heart of American transportation and distribution, Chicago’s metropolitan reputation belies its abundance of natural splendors. Located at the toe of Lake Michigan, the Second City plays host to a wide array of green spaces—arboretums, nature centers, conservatories, and botanical gardens—as well as lakeside walking and biking paths.
Both Chicago and Toronto are world centers for higher education and research, yet offer resplendent surroundings to maintain a balanced state of mind. Both offer much more affordable living situations than New York or San Francisco and are highly underrated for their cultural appeal. Whichever you choose, you will find established, reliable education in your pursuit for the proper MBA. Last month, we analyzed the best part-time offerings in both metros, but let’s take a closer look at the full-time MBA options.
Our Favorite Toronto Full-Time MBA Programs
York University – Schulich School of Business
The Schulich School of Business at York University offers 18 MBA specializations. In addition to full-time programs, the school also accommodate working students with part-time programs that offer both day and evening courses. Students are also able to switch between full and part-time status during their tenure to suit their needs. In 2016, 89 percent of students were hired within three months of graduation by 140 companies. Graduates were employed with an average salary of $91,860 USD and an average signing bonus of $12,050.
McMaster University – DeGroote School of Business
DeGroote School of Business at McMaster University offers full-time and part-time options, as well as a three-year paid work term co-op schedule. Full-time applicants are required to have one year of full-time continuous managerial, professional, or technical work experience (this is where the Co-op plan can come in handy—work as you go). The school offers seven specializations and International study. About 94 percent of recent graduates were employed within six months (over the last two years) with an average starting salary of $71,930 USD.
Western University Canada – Ivey Business School
The Western University Canada Ivey Business School is technically located just outside of Toronto, in London, Ontario. The school offers a full-time program that gives students an opportunity to work with over 200 recruiters, with about 66 percent of graduates finding jobs in Canada. In 2017, 91 percent of the graduating class received a job offer by September 1. Average starting salaries were typically around $90,000 USD with an average signing bonus of $15,000. Other compensations averaged at $9,875.
CHECK THIS OUT: Kings of the North: Should You Get a Part-Time MBA in Chicago or Toronto?
University of Toronto – Rotman School of Management
Students in the Rotman School of Management full-time MBA program are offered 16 major options and more than 90 electives to allow for a very customizable experience. Between 2016 and 2017, 85 percent of full-time Rotman MBA students were employed within six months of graduation and 80 percent landed jobs just within three months. Average starting salaries were $85,000 USD with an average signing bonus of $13,500.
Ryerson University – Ted Rogers School of Management
MBA applicants at the Ted Rogers School of Management at Ryerson University are given two full-time options: the Global MBA or an MBA in the Management of Technology and Innovation (MBA-MTI). Their Global MBA program strives to help their graduates “understand the global context of various industries and have the knowledge necessary to drive innovation and deliver as capable and confident leaders.” The MBA-MTI helps students “gain the skills needed to manage within companies that are focused on tech and innovation.” Last year, about 80.3 percent of graduates found employment within three months of graduation and earned an average starting salary of $89,250 USD.
Our Favorite Chicago Full-Time MBA Programs
Booth School of Business – University of Chicago
The University of Chicago Booth School of Business offers what the school calls the “world’s most flexible MBA program,” and is regarded by U.S. News & World Report as the third best full-time offering in the U.S. The curriculum consists of 20 classes—nine mandatory and 11 courses tailored to personal interest—plus a Leadership Effectiveness and Development (LEAD) program. As of September 2017, an absurd 97.1 percent of graduates reported having received full-time job offers within three months, with 95.3 percent accepted offers in that time. Average starting salaries were an impressive $125,000 with an average starting bonus of $25,000.
Kellogg School of Management – Northwestern University
The Kellogg School of Management at Northwestern University offers two full-time MBA variations, either to be completed in one or two years. The school’s 2017 employment report, which can be downloaded here, detailed that 94.1 percent of graduates received job offers within three months and 90.8 percent of those grads accepted job offers. The average starting salaries for graduates with three-to-five years of work experience was an unsurprisingly lavish $128,686.
Like the Booth School of Business, when comparing Chicago and Toronto programs, financial gain is clearly an advantage for those who elect to study in the U.S. However, perhaps unsurprisingly, schools like Kellogg come with a steeper tuition cost. Applicants for the One Year full-time program should expect to pay more than $133,000 for the entire program, while those in the Rotman School of Management will have to pay around $75,000 USD.
Kellstadt Graduate School of Business – DePaul University
At the DePaul University Kellstadt Graduate School of Business, students can obtain a full-time MBA with the availability of 100 courses in 20 MBA concentrations and 17 specialized Master degrees. In 2016, within six months 89 percent of surveyed graduates were employed, 14 percent being entrepreneurial, contract or freelance. Average starting salaries were about $82,200.
Liautaud Graduate School of Business – University of Illinois at Chicago
The Liautaud Graduate School of Business at the University of Illinois at Chicago full-time MBA is a 13.5 course program, with six courses designed to deepened functional business knowledge, while the remaining 7.5 are geared towards allowing students to customize their experience towards their personal career interests. They provide twelve concentrations in their MBA program.
Mendoza College of Business – Notre Dame
The Mendoza College of Business at Notre Dame University offers two traditional full-time MBA options, which can be taken in two years, or just one in a more accelerated format. According to employment statistics recently released by the business school, about 88 percent of Two-Year full-time students were given a job offer within three months of graduating, with about 86 percent of those graduates accepting the offers. Like many of the major business schools located in the Chicago metro (although, yes, Notre Dame is technically in Indiana), full-time MBA grads enjoyed a lush base salary upon employment, with an average salary of $105,000 for the Class of 2017. Median signing bonuses also ranked in the higher end of the schools on this list, coming in at around $20,000.
The Mendoza College of Business is one of the many business schools in the U.S. that has seen a dramatic shift in terms of graduates moving into the tech industry. Three industries in particular dominated when it came to employing Mendoza MBA grads: tech, financial services, and consulting. However, a slim majority (24.7 percent) joined the tech industry, enjoying salaries slightly higher than the Mendoza average, coming in at $110,000.
Quinlan School of Business – Loyola University
The Quinlan School of Business offers full-time MBA offering is one of the most affordable high-quality Chicago options out there, with the most recent full-cost of the program coming in at $73,422; comparable to many of the aforementioned Toronto programs. And unlike many of the programs on this list, Quinlan isn’t located in some quaint suburb. Rather, the school is centered right on the historic Magnificent Mile in Chicago, fully integrated into the vibrant city.
What Should You Study? Finance vs. Marketing MBAs
George Harrison, in his final album Brainwashed, has a line in a song that goes, “We pay the price with a spin of a wheel / with a roll of a dice / Ah yeah, you pay your fare and if you don’t know where you’re going / any road will take you there.”
Chicago Booth Launches New Capitalisn’t Podcast
Since Mark Maron’s WTF and the mystery thriller Serial launched into the pop culture lexicon, the podcast went from a niche medium to a common part people’s weekday commute. Capitalisn’t—the new podcast from the Stigler Center at the University of Chicago Booth School of Business—explores what is and isn’t working in capitalism today Continue reading…
What Is Your 2018 MBA Resolution?
For those who aren’t in a post-New Years Eve hibernation, 2018 is here, and that means actually following through on all those promises you hastily made an hour before the year officially began—including your 2018 MBA resolution.
You and every other person in a five mile radius will pack your preferred gym for the next few weeks, dutifully following through on the promises they made themselves. And while the frustration of waiting, waiting, and still waiting for the bench press to open up is inevitably going to sit in, you still have an opportunity to utilize that newfound resolution energy into your MBA degree.
Start of this new year by forming productive habits, achievable goals, and a vision of where you want to end up! #MondayMotivation pic.twitter.com/igYQmNtI3C
— FOX MBA & MS (@FoxMBA) January 2, 2018
But, where do you start?
2018 MBA Resolution Baby Steps
Ordering a multi-thousand dollar exercise bike at the stroke of midnight might have been a more curious impulse, but there are plenty of non-expensive efforts you can make going into a brand new year.
The MIT Sloan School of Management revealed some of its favorite books from the previous year from its distinguished faculty and alumni, including the timely “The Power of Little Ideas: A Low Risk, High Reward Approach to Innovation,” by senior lecturer David Robertson. Which, in itself, can provide a powerful set of ideas to harness that newfound resolution energy.
Looking to up your tech-savvy skillset? Head over to Product Hunt, which provides an impossibly lengthy list of new apps and tools from startup companies that can do almost everything: from learning valuable developer tools to reforming your daily task routine.
Be Wary of Impossible Goals
According to Chicago Booth behavioral science experts, people don’t tend to follow through on grander resolutions.
“‘The problem with big resolutions is that motivation tends to wane over time,’ says Chicago Booth’s Ayelet Fishbach, who studies motivation and decision making. People start out strong, but then reality sets in as they realize it’s easier to set goals than to carry them out. ‘The problem with persisting is that our priorities change in the course of a day, a week, a year,’ says Fishbach. We may wake up in the morning determined to watch what we eat, but by the afternoon, we’re distracted—and start snacking again. Or we may feel determined to invest more time in relationships, but that slips our mind when an important work deadline looms. ‘Successful goal pursuit,’ she says, ‘requires employing strategies that keep us on track as our priorities momentarily shift away.'”
An important part of Fishbach’s research revealed that setting more frequently occurring goals is important to stay on track. This means, “Instead of an annual goal, set a monthly goal. Instead of weekly, make it daily.” When more smaller, reasonable projects are completed, the end goal is more probable. And the more probable a goal is, the greater the motivation, according to Booth marketing professor Oleg Urminsky.
“Proximity to the goal increases motivation. If you’re a rat in a maze, you run faster the closer you get to the end.”
Embrace The Eventual Setback
Anyone who has gone through a diet is more than likely familiar with the concept of a cheat day. While scouring cake one week into your shiny new diet may feel like a small failure, it doesn’t mean it’s time to give up.
According to marketing researchers Marissa A. Sharif and Suzanne B. Shu, authors of the 2017 study “The Benefits of Emergency Reserves: Greater Preference and Persistence for Goals That Have Slack with a Cost” in the Journal of Marketing Research, having a few “mulligan” occurrences is normal and should not deter your overall aim.
“What this suggests is that the perfect goal to set for yourself is probably a tough one but with the explicit allowance for a mulligan or two so you won’t be discouraged by the occasional slip up,” writes Washington Post reporter Katherine L. Milkman.
It’s Time To Go After That MBA
We at MetroMBA may be vocal advocates of an MBA, but numbers speak for themselves. MBA salaries at the top schools in the world hit a record high last year, according to the Financial Times, sitting at an eye-popping $142,000 USD average by the start of 2017—a $7,000 jump from the previous year.
Some of the world’s biggest companies, such as Amazon, are on MBA “hiring sprees” as it rapidly expands its business, indicating the increasingly high demand for graduates.
And if all else fails, just embrace it!
I don’t like New Year’s Resolutions. At all. In fact, I vow to get fatter, more deceitful, spend more frivolously, and enter more toxic relationships. These are my New Year’s Regressions.
— ShinigamE (@WWEBigE) January 1, 2018
