Jon M. Huntsman School of Business

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Friday, May 30, 2014

Putting Putin in His Place

By Dr. William F. Shughart II

No one hates the U.S. shale revolution more than Russian President Vladimir Putin.

Surging U.S. oil and gas production is a nightmare he can't escape. Already, U.S. gas production and the promise of U.S. liquefied natural gas exports have Russia's European customers demanding cheaper prices for gas, and the Russians are reluctantly agreeing.

Dr. William F. Shugart II
Nothing is more critical to Putin's power than Russian energy revenues. Oil and gas exports account for 52 percent of the Russian state budget. That kind of dependence on one source of revenue can pay the bills when energy demand is high and prices are up, but it can be fiscally disastrous when prices fall.

Putin has long used gas exports, and Russia's state-run gas company, Gazprom, as a lever of geopolitical influence. To extract concessions from client states, he has on numerous occasions either threatened to cut off the flow of gas, or actually done so. Ukraine knows that all too well.

But that kind of ruthless behavior sends buyers looking for new suppliers. For years, European consumers haven't had alternatives to Russian gas. In fact, many East European countries rely on imports from Russia to meet 80 percent or more of their natural gas needs.

As a result of America's shale-gas boom, that's on the verge of changing.

Already, seven U.S. LNG export terminals have received Department of Energy approval to ship gas to countries with which the United States doesn't have free trade agreements. That includes all of Europe.

While these projects will take years to complete, the writing is on the wall: Russia is going to have a major new competitor in European energy markets.

While the Russians will be able to undercut U.S. gas prices because their gas can be moved directly to market by pipeline, European buyers are ready to diversify their supply sources.

The question for Europe is: How much is energy security worth? If the full-court press European political leaders have been putting on the Obama administration and Congress to expedite the LNG export approval process is any indication, the answer is: Energy security is worth a lot.

The Russians are pivoting East in response. They're turning to China as a new Gazprom customer, but the U.S. shale revolution is hanging over contract negotiations there as well.

The Chinese need natural gas to reduce their dependence on coal. China is now burning nearly as much coal as the rest of the world combined. But China is well aware of Putin's eroding European market share and it's also eager to buy U.S. LNG; so China's driving a tough bargain. Some reports suggest that to get a long-term purchase contract from China, Putin may be forced to sell them gas at rock-bottom prices.

America's new position as the world's largest natural gas producer and burgeoning gas exporter is remarkable. Just five years ago many experts inside the U.S. government and at U.S. utilities believed we were on the verge of becoming a major gas importer. Vladimir Putin, in fact, eyed the U.S. market as the next destination for Russian gas.

It should be no surprise that U.S. energy policy has been slow to catch up with our vast new supply of gas. Bureaucratic inertia is legendary.

President Obama nevertheless should embrace the energy gift that has been left on his doorstep. Roughly two-dozen additional LNG export applications await DOE review. If the approval of just seven export terminals already has begun to shift the balance of power away from Putin, imagine what the speedy approval of the remaining applications might yield.

It's time to find out. Putin's stranglehold on the European gas market is slipping through his hands. Let's not let it slip through ours.


William F. Shughart II, research director and senior fellow of The Independent Institute, 100 Swan Way, Oakland, Calif. 94621, is J. Fish Smith Professor in Public Choice at Utah State University's Huntsman School of Business.

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Friday, May 23, 2014

In Jill Abramson's Firing, Was The 'Glass Cliff' To Blame?

Written by Alison Cook, Professor of Management at the Huntsman School of Business at USU, and Christy Glass, Professor of Sociology at USU

Dr. Christy Glass and Dr. Alison Cook
Our research on CEOs in the Fortune 500 finds that women leaders face two significant challenges: the “glass ceiling” and the “savior effect”. First, we find that women are more likely than men to be appointed CEO to struggling firms or firms in crisis. This phenomenon is termed the “glass cliff” because it suggests that when women are appointed to top positions these positions are often precarious or risky. Second, we find that when firms struggle under the leadership of women CEOs, these leaders are likely to be replaced by men. We term this phenomenon the “savior effect” because when organizations struggle under the leadership of women, decision makers often revert to more traditional leaders who are perceived to be capable of “saving” the organization. Our research finds strong and significant evidence for both the glass cliff and the savior effect for women leaders. Overall, women leaders face greater challenges and are given fewer opportunities to demonstrate their capabilities than their male counterparts.

Our research provides insight to the firing of Jill Abramson, the first woman executive editor of the NY Times, in three ways. First, Abramson was appointed in 2011 following a series of highly publicized crises at the paper, including a plagiarism scandal, widespread critiques of the paper’s coverage of foreign policy and national security under the Bush and Obama administrations, and declining competitiveness on the digital news front. Arguably her appointment is consistent with our findings regarding the glass cliff. Second, throughout her tenure as the first woman editor, Abramson faced significant challenges related to token status, including negative evaluations of her leadership, hyper scrutiny by her peers and supervisors, and intense pressures to take the paper in bold new directions. Finally, her firing appears to be a classic example of the savior effect. Shortly before her firing, an internal report was circulated at the paper that emphasized that the paper’s lack of digital competitiveness had reached a crisis point. The belief by the publisher that the paper was facing a crisis under the leadership of Abramson may have contributed to a perception that Abramson was not a capable leader. Abramson’s reputation as “difficult” and “bossy” likely only provided further justification for this perception. As a result, Abramson was fired and replaced by a man who had strong relationships in the newsroom and with the publisher, and who could “save” the paper from crisis.

Overall our research on women CEOs suggests that Abramson’s tenure and departure from the NY Times may be a result of the pressures she experienced as a result of the glass cliff and the savior effect. As our findings demonstrate, when an organization struggles under a woman’s leadership—even in the short term—women leaders are blamed and replaced. Most telling is that at an organization where the executive editor has traditionally remained in the position until retirement, the first woman in this role was fired fewer than three years into her tenure and replaced by a man, all in the name of saving the paper.

To learn more about how Cook's and Glass's research relates to Abramson's firing, check out a recent NPR article that was published on May 19.

Thursday, May 22, 2014

New More Professional Look Will Even Be part of our Walls

By Ken Snyder

This is how the walls look now.
On the first three floors in the inside of the Huntsman School of Business there are plenty of blocks in the wall. You may not have noticed them but they look like the picture on the left. There is a cement block for every two horizontal tile facings you see. This square block pattern has been in place since the 1970s when the George S. Eccles Business Building came to be. 
We are experimenting on this wall.

If you look on the East side of the third floor you will see what looks like evidence of a confused contractor who can’t decide what he’s going to do with those blocks. (See picture on the right.) It is really just an area where we are experimenting with ways to cover up the old block design to create a more professional look. 

This is the new textured look.
The one we like best is in the picture to the left. Actually, it is a textured paint that will be slightly darker than the one in the photo. We’d like to transform the walls on the first three floors by the end of summer. No, we won’t be tearing down the walls, just giving them a brand-new look to accent the many other renovations underway. It will be interesting to see how many people notice the change. 

Thursday, May 15, 2014

Leaders and Faculty at the Huntsman School Develop New Contribution Strategies

By Ken Snyder

I had been out of the office for seven working days recently because I went to the 26th International Shingo Conference - which was a great event, by the way - and then some colleagues and I traveled to the University of Washington’s Foster School of Business to tour its new Dempsey Hall and its almost new PACCAR Hall. We were looking for ideas for our own Huntsman Hall.

I came back and discovered a new workplace challenge that I had not before faced here in Logan. Where do you go to use the bathroom? When I began to experience the bathroom scarcity that now exists in the building, it made me think, “What the heck is going on here?” I had this reaction even though I, better than anyone else, knew this restroom shortage was on its way.

My office is now the corner of a classroom on the second floor where a couple of tables serve as a platform for my computer and printer. If I go to the nearest pit stop, it is a one-seater on the fourth floor and I have to get in line. Suddenly there a huge demand for an extremely limited but important resource which has required people to strategize about how long to wait before they take a break. This has given everyone a chance to deal with the unusual interpersonal dynamics and the unwritten rules that develop when potential potty conflicts could erupt at any moment.

Shiny new fixtures wait their turn.

I have even heard rumors that some people have turned this into an entrepreneurial opportunity by collecting “access tolls,” and selling memberships for “Gold Club Priority Seating.” This bathroom, after all, is located on the fourth floor where the Management Department lives.

Not having had to develop this particular type of patience before, I have been opting for a nice outdoor stroll and dignified visit to a restroom in the library next door. It’s true that I could rise above all of this and go to the sixth or eighth floor where there are also functioning one-seaters, but they too are in demand and sometimes very unavailable. It could easily prove a disappointing trip up several flights of stairs.

I have my own limited VIP options not open to everyone, in that I can put on my hard hat and go out into the construction site and use their Port-A-Potties. I have not opted to do that yet; I’m not sure why. For some reason that invitation is not so inviting. Just in case there is a sudden run on the library, however, I always keep my hard hat nearby.
Ken Snyder knows how to think strategically.
We can be grateful that we still have actual indoor plumbing available through some of the building and we can know that this self-restraint will lead to a world for us all with better potty options. The old worn grouted mini-tiles will soon disappear and will be replaced with new modern porcelain tiles. The more than 40-year-old fixtures will be replaced with modern fixtures. The one-seaters now have their own mini stall despite the fact that they are locked-door unisex bathrooms that open to just one person at a time. The stalls in those bathrooms will be taken out because there is really no need for such double-door privacy. The grungy old panels will be gone forever. All of this will prove a nice refreshing change – several months from now.

And when school opens again this fall, it’s pretty clear that this new suite of open accessible bathrooms will be appreciated a lot more by those of us who experienced our building without them. And I’ll be one of them.

In the meantime, don’t even think about borrowing my hard hat.

Monday, May 12, 2014

1,101 Graduates

2014 Huntsman School valedictorian, Brooke Siler
By Klydi Heywood

The Huntsman School of Business graduated 817 students at a commencement ceremony on May 5, with 141 of those degrees granted through the Huntsman undergraduate program in China, and 284 students earning graduate degrees this year.

The commencement ceremony began with this year’s valedictorian, Brooke Siler, who graduated with bachelor’s degrees in Economics and Biochemistry with a 4.0 GPA. She served as the president of the Society for the Advancement of Ethical Leadership as well as the Chemistry Club, was a Huntsman Scholar, participated in our Koch Scholar Program, went to Asia through the Go Global study abroad program, and also received the Barry M. Goldwater Scholarship while conducting research in the biochemistry department. This summer she will begin work with the global investment research group at Goldman Sachs.

Speaking from experience, Brooke advised students to use our diverse backgrounds to bring a fresh experience to any field they choose.

“Today I ask you to be aware of the inner walls that you put around your mind,” Brooke said. “I also ask you to search your soul, find your passion, and chase it, regardless of whether or not that passion has anything to do with your major, your past, or your current interests.”

After Brooke, the graduates and audience had the opportunity to hear from this year’s commencement speaker, Dr. Tayseer Al-Smadi, who earlier in the morning received an honorary doctorate degree from USU. Dr. Tayseer is currently a senator of the Hashemite Kingdom of Jordan, where he serves as chair of the Senate Public Services Committee. Additionally, in February 2014, he was elected chairman of the Jordan Press and Publishing Corporation. Dr. Tayseer received a Ph.D. inEconomics from the Huntsman School in 1998.

2014 Huntsman Commencement speaker, Dr. Tayseer Al-Smadi
“My first thought which I want to share with you today is to live your humanity in the full sense with yourself, at home, at work, in the community at large, and wherever you go,” Dr. Tayseer said. “Don't take pride in your differences of race, or social rank, or gender, or nationality; remember that ‘strength lies in differences, not in similarities’, as the late Stephen Covey rightly said.”

“Success, in a nutshell, is a matter of ‘wining yourself,’” Dr. Tayseer said. “Make sure to keep ‘winning yourself’ all the time; for me, wining myself includes caring for others.”

As Dean Douglas D. Anderson concluded the ceremony he encouraged students to “remember that your passion for excellence must always be in balance with your compassion for your fellow human beings.”

“While economic logic connects input to output, and risk to reward, the moral logic is often inverse - it is better to give than to receive,” Dean Anderson continued. “To win yourself, as Dr. Tayseer has suggested, lose yourself in something greater than yourself.”

Tuesday, May 6, 2014

Graduation Time is a Moving Experience

By Ken Snyder

Huntsman Hall is making many of us think inside the box.

That's because more than 30 people are packing up their offices to make room for the construction that will soon be underway in the George S. Eccles Business Building. I am tuned in to this because there a lot of boxes in my life as I too make an office move. The construction that will create more space for our students is connected to the overall Huntsman Hall project. Right now that means some 200 boxes have been packed as we prepare for the change. It is a moving experience.

Perhaps we'll have more empathy for many of our students who are now packing up and preparing to go out into the global marketplace to find their way and leave their mark. They too are seeing the insides of boxes at the very time when nearly all of their focus is outside of the USU box they have called home for years.

We often focus on the big changes that can help us refocus and keep our life on target. However, the little changes, like moving to a new office, often require flexibly and a new outlook. The place we park our workplace desks is a big part of our lives and when that is changed, it gives us a chance to see things differently.

By living out of a box for awhile we actually get the opportunity to see outside the box and, hopefully, in so doing, we'll discover some new territory.

And we can thank Huntsman Hall for that.

Thursday, May 1, 2014

To the Students

By Mark Bailey

Your time at the Jon M. Huntsman School of Business will offer you much of what you need to succeed and will then set you at the base of the rest of your life when you graduate. What you do now to prepare for that climb is critical for your future success. As a graduating senior I'd like to share some of the greatest lessons I learned from my college experience and what has happened because of it.

Lesson 1 - Learn through experiences, not just from textbooks.

One of the best ways to experience what you are learning in the classroom is through the school’s Go Global and SEED programs. Take advantage of these programs, not because they may look good on a resume, but because the experience can transform the way you see yourself and the world, and then better qualify you for your future.

Lesson 2 - Realize that there are no ceilings holding you down.

You have often heard that you are powerful beyond measure, but do you believe it? Identify what is holding you back from being your best self by asking, “Why or why not?” These two simple questions will help you identify why you do what you do and explain why you haven’t done what you don’t do. Although a humble practice, these questions will help you overcome personal fears and also expand your perspective; the answers will motivate you to do whatever it takes to improve. Aspects holding you down may be as simple as your unchallenged beliefs, misguided social norms, and uninspiring expectations. Know that regardless of what it is, only you have the control to change it.

Lesson 3 - Risk and failure breed success.

For most individuals the objective to gain a college education is to reduce the risk of failure in the job market. And for most individuals, this happens to be true. But that lack of failure doesn’t actually equate future success. It is because of what I have experienced while studying that I am better equipped to take greater risks, therefore exposing myself to some failures and greater successes. Failure is not an end but the start of a better path.

Through my time at the Jon M. Huntsman School of Business, I have travelled abroad learning about global business in Russia, Armenia, and Turkey. I have helped people escape poverty in Peru through SEED. I networked with wonderful people in London. I have competed in competitions, attended countless seminars, sat on councils, and become great friends with faculty. I invested in myself by taking opportunities and choosing to experience what was being offered.

Because of these experiences I have been able to take an opportunity to align myself with Medopad, a company I was introduced to while in London last spring with the school. This UK based company is a mobile health platform that securely delivers patient information directly to physicians. It aims to revolutionize the way doctors access important patient information by making it instantly available on an iPad or other mobile device. This is a huge mission! The people that drive this company realize that they are only limited by what their minds can conceive! And that it is only through taking advantage of opportunities and taking steps forward that the company will succeed!

I am excited for the next phase of my life with Medopad in London, and I hope that I will not soon forget what I learned because of my experiences here at the Huntsman School. My recipe towards success won’t be just like yours, but I am confident that you too will learn life-changing lessons, the ones not taught in textbooks, through choosing to experience your education at the Jon M. Huntsman School of Business.

Mark Bailey