July 2009 Archives

By Micky Thompson, MBA '10

For the summer series of my personal blog, I have written posts that I hope will benefit the incoming MBA students here at Eller MBA. When my family and I first moved to Tucson and I started Eller MBA, many of our colleagues, friends and family throughout the US often confused The University of Arizona with either Arizona State University or University of Phoenix. I could see how these schools are easily confused because they have very similar names and even share the same state. Add to that the fact that Arizona's geography is not as widely known as say California or New York, we have a recipe for confusion.

Examples of the questions my wife and I often received from our colleagues, friends and family are:

•    I thought The University of Arizona would have been in Phoenix, the state capital. Why isn't it?
•    Why did you move to Arizona, doesn't the University of Phoenix offer classes online?
•    Why didn't they put the MBA school on the main campus in Phoenix?
•    Isn't their mascot a Sun Devil?

I actually didn't know these answers before researching MBA programs and reading about The University of Arizona and Eller MBA. In selecting an MBA program, we put a lot of weight on MBA rankings and reviews so that is how we came to know the differences. When you get these questions (and you will get them), just refer your colleagues, friends, and family to this post and I will be happy to explain to them the differences.

The University of Arizona is located in Tucson, Arizona, about 100 miles south of Phoenix and 70 miles north of the US/Mexico border. The University of Arizona was founded in 1885 as a public land-grant and space-grant university and is considered to be a Public Ivy by Howard and Matthew Greene in their book The Public Ivies: America's Flagship Public Universities. The University of Arizona is known as one of the nation's top 20 public research institutions. UofA, as it is commonly referred to by locals, has an enrollment of 37,000 students. UofA's mascot is the Wildcats.

Originally when Arizona became the 48th state and last of the contiguous states admitted to the Union in 1912, many of the territory residents believed Tucson would be selected as the state capital. Instead, Phoenix was selected and The University of Arizona by then had already been built in Tucson over 27 years earlier in 1885.

(Interesting fact for Tennessee Volunteer fans: The University of Tennessee was built in Knoxville, Tennessee in 1794 and not Nashville because at the time, Knoxville was the state capital.)

Arizona State University and University of Phoenix are also well known Arizona universities but are separate from The University of Arizona system. The University of Arizona is much like Middle Tennessee State University where I received my Bachelors. Like MTSU is located primarily in Murfreesboro, Tennessee, The University of Arizona has one primary campus located in Tucson, Arizona.

Arizona State University's main campus is located in Tempe, Arizona, a suburb of Phoenix and has 3 other campuses located throughout the Phoenix metropolitan area. Arizona State University is Arizona's largest university with about 70,000 students. Arizona State's mascot is the Sun Devil.

University of Phoenix, unlike The University of Arizona and Arizona State University, is a private university owned by the Apollo Group, Inc. University of Phoenix has several locations throughout the US but holds most of their classes predominantly online. They do not have an official athletic department but they do sponsor University of Phoenix Stadium, home of the NFL team Arizona Cardinals.

The Eller MBA at The University of Arizona currently does not offer any online or video recorded courses. Along with about 70 other Eller MBA students, I attend the full-time program with courses scheduled on-site at the Eller College of Management Monday through Friday during Fall and Spring semesters. The University of Arizona Eller MBA offers along with the traditional full-time MBA, an Evening MBA, an Accelerated MBA, and an Executive MBA, each top quality programs designed for students unable to attend the traditional full-time 2 year program.

This year, the Financial Times ranked Eller MBA the 5th best MBA in the world and Entrepreneur Magazine and Princeton Review ranked the McGuire Entrepreneurship Program the 3rd best entrepreneurship graduate program in the US. I am currently enrolled in both Eller MBA and the McGuire Center for Entrepreneurship.

By David P. Brady, BSBA Finance '86
CFA, CIC, President of Brady Investment Counsel LLC

There is significant debate in Washington over how the government can better regulate our private financial system. Of course the discussion has been spurred by the 2008 financial system crash, dissatisfaction most feel over being forced to bailout Wall Street, reports by the Wall Street Journal that nearly $1.0 billion in legal and advisory fees have been paid to settle the Lehman Brothers liquidation, and the recent projection certain Wall Street banks are on track to pay near record bonuses to employees this year.

The government cannot better regulate the financial system. There already exist plenty of good rules. The problem is that  they go unenforced. And practically thinking those rules really can't be enforced. Not just for lack of manpower. But for the fact bank balance sheets are too big and complex for even the most sophisticated Wall Streeters to fully comprehend. Compound this with the fact executives all are not forthright in their disclosures concerning their businesses and risks and you have an impossible task. Did you know, Structured Investment Vehicles, or SIVs, are not mentioned in Citi's 2006 annual report? Yet it was precisely high-risk investments like these that forced government bailout of the firm a mere 20 months after the 2006 report was issued. It is entirely unreasonable to expect a GS bureaucrat to understand the complexities of a large financial firm well enough to create and enforce meaningful rules designed to prevent the next disaster. Therefore the single most effective way to control risk in the financial system and more broadly, is to regulate executives by changing the way they are compensated.

Why not simply require bank execs to draw a modest salary and receive the rest of their compensation in stock, not options, but directly purchased common stock that has already been issued and trades? Then we will see what risks they are willing to take when a big chunk of their "real" net worth is invested in the company's common stock.

It is time for Boards all over to significantly change their management compensation models. A great big fat salary topped off by an embarrassing number of stock options is "heads I win, tails I win even bigger" for executives lucky enough to make it to the top. This type of comp scheme encourages risk taking beyond reasonably expected rewards. It does nothing, say again, nothing to protect and serve shareholders, which is the reason Boards exist in the first place.

Here is an interesting approximate fact: In the 1960s the average CEO made about 60 times minimum wage. Today that multiplier is 820. Since barley a dime's worth of shareholder value has been created in this country since 1997, it is time to abandon the "greed-begets-riches-for-the-CEO" comp model in favor of something that better serves folks really taking the risk, the shareholders. Require the managers to become owners!

By Kim Eden Neugarten

When I was really young I always knew two things: I love movies and music. But I never thought I could make a living in those industries. For many years I thought to myself that one day the industry would find me, but it turned out to be the other way around.

My freshman year, I applied for an internship at Warner Music Group, but unfortunately, they didn't hire me. So that summer I tried as hard as I could to work on films and music videos where ever I could find them. I worked on a television show called "How To Look Good Naked," the movie Transformers 2, and an Ice-T music video, as well as small indie films. I had learned so much about the movie industry that I decided that I wanted to apply for a production company internship as well. As soon as the summer was over and I started my sophomore year, I applied to Warner Bros. Records, Mandate Pictures, and Paramount Pictures. From August till November, I kept sending my resume, kept calling them every week to make sure they got it, until finally all three of them asked me to come in for an interview.

During December break, I went to L.A. and took all the advice and lessons that I was given by my business fraternity, Delta Sigma Pi, and kept my fingers crossed. Luckily all three of them offered me an internship in exactly the departments that I wanted, but I had to make a choice. Luckily I was able to choose two, Warner Bros. Records and Mandate Pictures.

My first day at Warner Bros. Records I was asked to go to the Jimmy Kimmel Live show to check out one of Warner Bros. bands and give them support. It was a perfect first day. At Warner Bros., I helped perform administrative work such as expense reports, scheduling meetings, travel arrangements, and general correspondence to the A&R coordinator, plus steady interaction with signed bands and management, and I also went to a ton of shows to scout new talent. I found many bands that I showed my supervisor and helped out with other things around the office. I was asked to model t-shirts for a band called The Used and help out with their new music video called "Blood On My Hands."

Since working at Mandate Pictures, I realized exactly what I want to do for a career: be a producer. I am also learning how important it is to be a business major, especially in finance, to become a producer. I have learned how to budget a movie, write expense reports, and submit films to festivals. Every Friday, I get a new script to read. I then have to write coverage and pitch how I felt about the script to the president of Mandate. I am able to sit in the general and creative meetings to give my input on movies that are in development. My daily tasks are reading scripts, press breaks, writing headlines for magazines and newspapers, rolling phone calls, and coming up with new ideas for movies. I have also networked a lot, and got to meet Seth Rogan and Lindsay Lohan, plus I worked on a movie called Whip It, Drew Barrymore's first directing project.

Every Monday we meet with an executive and they tell us exactly what they do and how they got into the business, and then we are able to ask questions. They have created a wonderful learning environment and I hope one day, when I begin my career, I will work with them.

By Pete Mittelholzer, MBA '10

This summer 16 Eller MBAs and four Arizona PhDs are participating in the Advanced Technology Transfer Project (ATTP) at research institutes throughout Mexico. Our job is to conduct commercial feasibility studies of technologies created at institutions in Ensenada, Guanajuato, León, Puebla, and Mérida. My three teammates and I work at a research institute called CICESE (pronounced "see-say-say") in Ensenada, which is located 90 beautiful, winding, coastal cliff-hugging miles south of San Diego in the State of Baja California.

I first heard about the annual Mexico internship last August from ATTP alums in their second year at Eller. While interested in the opportunity to work abroad on a consultancy project I was unsure whether my lack of a technical background would preclude my candidacy for a job that would have me analyze technologies alongside scientists. But here I am six weeks into the 10 week internship writing about what types of algae and sea monkeys are ideal to feed halibut larvae in a fish hatchery.

My teammates (Niru Baddam, Gaurav Sharma, and Alina Garcia Montijo) and I begin a typical day at CICESE with breakfast enjoying an invigorating view of the Pacific. The staff here has made our stay extremely comfortable and I am continuously impressed by the good cheer and hospitality of the Mexican people in general. Some of the local highlights in Ensenada both involve libations: Hussong's (the oldest cantina in the Californias which is packed with locals, live music, and tourists on weekends), and the Riviera del Pacifico (a beautiful old casino that is the alleged birthplace of the margarita in 1948). The fish and shrimp tacos never seem to get old either.

While this experience will never make me an expert in fish hatcheries, groundwater exploration, fiber optic sensors, or any of the other technologies that are being developed at CICESE, it is teaching me how to manage a consultancy project and work with a team to analyze business ideas. Even more importantly to my inner wanderlust, the ATTP has given me the opportunity to explore a small corner of Mexico that I may never have seen otherwise.