Volume 15, Issue 2
Spring 2009
Reflections on Challenging Times
THE SCHOOL OF BUSINESS & ECONOMICS NEWSLETTER
Not since the Great Depression of the early 20th
century has America seen
such economic upheaval
and financial distress on
both institutional and personal levels. Excitement
over the historic election of
President Barack Obama
has been tempered somewhat with constant news of
business failures, record
job losses, and the erosion
of personal finances.
The School of Business
and Economics has not
been immune to the effects
of a floundering economy
and, indeed, has been at the
forefront of opinion on, and
insight into, the global crisis, both on the campus of
Winston-Salem State University and in the local
community.
downsizing decisions – are
they basing them on objective performance criteria,
strategic initiatives, personal bias, potential contribution to the organization,
or “good ole boy/girl” networking? There is some
literature that suggests that
because the management of
firms tend not to change
during periods of economic
downturn, those who made
poor business decisions
prior to the layoff are often
the individuals who continue to make similar poor
decisions with similar results. Many organizations
are violating the WARN
Act and are not providing
sufficient notification to
employees or to the local
community when their
plants close or large layoffs
are occurring.
With organizational restructuring (right sizing,
down sizing, smart sizing
or whatever euphemism is
being used), there is a
greater likelihood of adverse impact on women
and minorities in the organization. There is some
data in the popular press to
suggest that males are being impacted more in the
negative economic environment than women.
Other longer-term data
reflect that the disabled,
women and racio-ethnic
minorities are often in
lower-level positions in the
organization,
(continued on page 6)
Below a collection of
thoughts on these challenging times, presented by the
faculty of the SBE.
The challenges in the
global economic environment have a significant
impact on the human capital (people resources) in
organizations. Often organizations consider the
“numbers” and forget that
there are real people attached to those numbers. One of the more
challenging areas is related
to how they are making the
Special points of interest:
Inside this issue:
Reflections on Challenging Times
1, 6-8
Message from the Dean
2
Omicron Delta Epsilon Chapter
2
Top Fall 2008 Graduates
3
Lessons in Employability
4
“A Day at the Fed”
4
Faculty Achievements
5
• Last Day of Classes — April 28th, 2009
• SBE Graduating Senior & Awards Celebration — May 8th, 2009
• WSSU Graduation — May 9th, 2009
• Summer Session I Begins — May 19th, 2009
• Summer Session II Begins — June 25th, 2009
A Message from the Dean
2009 will be
long remembered. On a
positive note, it
will be remembered as the year
of the swearing
in our first minority president
while, on a negaDr. Jessica Bailey
tive note, it will
be recalled as the year of the worst economic crisis since the great depression.
Neither the year’s highs nor its lows
have deflected the School of Business
and Economics (SBE) from its primary
goals of continuous improvement and
preparation for reaffirmation of its
AACSB accreditation.
Spring 2009 has been full of activities
that reinforce high quality services for
our students and the citizens of the
Piedmont region. In fulfillment of our
UNC Tomorrow goals, faculty have
been deployed to our downtown location to wok closely with the Center for
Entrepreneurship and the Center of
Excellence in Financial Services. The
SBE is preparing to launch new online
certificate programs in human resources, non-profit leadership, and
global supply chain management. Students have been working with local
social service agencies to provide seminars and workshops on various business topics.
Renovations have begun on the R.J.
Reynolds Center. The Lecture Hall
will be equipped with new furniture
and carpeting, the corridors will be
refurbished and redecorated, and new
furniture will be supplied for many
classrooms.
This semester has also seen a noticeable increase in the outreach activities
of our student organizations. More
clubs are implementing the principles
of professionalism in their activities
and setting a fine example for the rest
of the campus.
Read our story. Share our progress.
FOCUS... on Student Organizations
Students In Free Enterprise End 2008 on High Notes
The WSSU Students in Free Enterprise
(SIFE) Team is building on a successful
2007-2008 rebuilding year. Under the
leadership of President Malliron Hodge
and Vice-President Justin Freeman, and
the direction of SIFE Walton Fellows
(faculty advisors Nick Daves, Bob Herring, and Notis Pagiavlas), the team has
launched into a number of service projects. Among the projects are:
•
A three months series of “TruOpportunity Builder” workshops in
conjunction with Truliant Federal
Credit Union and the WSSU Center
for Entrepreneurship.
•
A financial literacy workshop under
the auspices of a grant from AIG.
•
Establishment of a “Green Rams”
recycling program in all residence
halls.
•
Co-sponsoring a “Women in Entrepreneurship” panel discussion in
conjunction with the Center for
Entrepreneurship.
•
Working with the local Salvation
Army in providing life and business
skills training to two groups of disadvantaged persons.
University Becomes Official Omicron Delta Epsilon Charter Member
Winston-Salem State University has been
officially chartered as a member of Omicron Delta Epsilon (ODE), the international honor society in Economics, as a
result of “high scholastic achievement in
the field of Economics.” Dr. Craig
Richardson, associate professor of Economics in the School of Business and
Economics, serves as the chapter advisor. Student interest in ODE has been
high and it is expected to further increase
Page 2
interest in the economics major. An induction ceremony is being planned for the
spring 2009 semester, with Richard Snelsire, former vice president of Wachovia,
agreeing to serve as the induction speaker.
As described on the ODE website
(www.omicrondeltaepsilon.org): Omicron
Delta Epsilon is one of the world's largest
academic honor societies. The objectives
of Omicron Delta Epsilon are recognition
of scholastic attainment and the honoring
of outstanding achievements in economics; the establishment of closer ties between students and faculty in economics
within colleges and universities, and
among colleges and universities; the publication of its official journal, The American Economist , and sponsoring of panels
at professional meetings as well as the
Irving Fisher and Frank W. Taussig competitions.
F O C US
FOCUS... on Student Organizations
Scenes
from
WSSU Ram SHRM Group Photo
(front row, L to R) Morgan Woods, Courtney Dubose, Krisharn
Bunch, Brandon Bell, Lorice Young (back row, L to R) Twila
Pemberton, Jessica M. Mouzzon, Malliron Hodge, Dr. Janice
Witt Smith (advisor), Denise Dawkins, Joe Hawkins
WSSU Ram SHRM at the HR Games
N. C. A&T State University
March 21, 2009
Jayna Johnson, Krisharn Bunch, Jessica Mouzzon, and Denise
Dawkins
FOCUS... on Commencement
The SBE Congratulates Our Fall 2008 Graduates
Photos from the Fall 2008 Graduating Senior & Awards Celebration
The SBE’s Top Graduate Performers
MIS
Page 3
Business
Administration
Economics
Sherena Bethea
Rath Leftwich
Kristen Steuart Hytham Al-Khatib
Outstanding Overall
Outstanding Overall
Outstanding Overall
Outstanding Overall
Marketing
Joshua Craig
Esther Shahin
Top Dept. Specialist
Outstanding Overall
F O C US
FOCUS… on Students
Students Receive Lessons in Employability from Leadership Pros
The students and faculty in the Winston
Salem State School of
Business and Economics were pleasantly surprised last
week when Mr.
Robert “Dusty” Staub,
Mr. Robert Staub Staub Leadership
Solutions, Greensboro, NC and Mr. Hector McEachem ,
Executive Vice-President of HR, Wachovia Bank, Charlotte, NC, spoke to the
audience on “How to Make Yourself
more Employable” (Everything you need
to know about Leadership). One faculty
member stated, “The way they worked
together to deliver that presentation was
better than Batman
and Robin. They
were definitely a
dynamic duo.”
The topic sounded
simple, almost self explanatory. However, the concepts were enlightening to
everyone sitting in the room. Mr. Staub
spoke in detail about his leadership theories that encompass not just how we work
but how the way we choose to live impacts how we work. It was truly the most
holistic concept of leadership I have ever
heard. Specifically, he spoke of the difference between intelligence quotient and
emotional quotient. And, in case you did
not know, Mr. McEachem would have
told you that although your intelligence
quotient can get to the door, your emotional quotient is what will get you in the
door and keep you in the door.
Last year I had the opportunity to attend
Mr. Staub’s three day leadership institute.
As a former military officer, who has
been through endless classes on leadership, this was truly the most transforming
leadership training I have ever experienced. And, even though I thought I
knew all I needed
to know Mr. Staub
still threw another
angle at me that
had me taking copious notes.
Although we were
informed, we have yet to be transformed.
Where our presenters ended our new
leadership organization will begin. The
ExL (Executive Leadership) organization,
specifically designed for students in their
junior and senior years, will educate,
mentor, and further develop the emotional intelligence of our students. Both
Mr. Staub and Mr. McEachem will serve
as members of our executive leadership
council to help us design and execute a
program that will serve to challenge and
prepare our students for the rigors beyond
their educational life.
— article by Beverly D. Johnson Lindsay.
SBE Students Spend “A Day at the Fed”
Dr. Edward Zajicek and Dr. Craig
Richardson, both associate professors of
Economics in the School of Business and
Economics, travelled with nine economics students to Richmond, Virginia on
March 3-4, to attend a conference titled,
“A Day at the Fed”, sponsored by the
Richmond branch of the Federal Reserve
Bank. During the day, WSSU participants viewed panel presentations featuring the Fed’s esteemed economists, along
with an
hour-long
presentation from
the President of the
Richmond
Fed, Jeff
Lacker.
They ate lunch with students from a
dozen other universities, and learned
about careers at the Fed. Our students
represented the University admirably,
asking thoughtful questions directly to
the panel of economists during the panel
discussions, as well as during the networking sessions. A follow-up discussion
is planned after spring break, linking past
and future Fed policies with the selfregulation ideals of philosopher Ayn
Rand.
School of Business & Economics Students Achieve
Lamar Evans and Jasmine Claye both
won a $500 Scholarship from the Northwest Piedmont Chapter of the North
Carolina Association of Certified Public
Accountants (NCACPA).
Page 4
Samantha Reed and Henry Montgomery both were awarded Certificates valued at $1,039.71 to take the Certified
Public Account exam for free by the
North Carolina State Board of Certified
Public Accountants Examiner.
F O C US
FOCUS... on Faculty
Dr. Gloria Clark was presented with
the Disney’s Hollywood Studios
Mickey Mouse Outstanding Professor
Award by Mr. Gabriel Callaway, a
Disney Executive. Gabriel nominated
Dr. Clark for this award for her dedication and commitment to academic
excellence. Mr. Callaway was one of
her students who graduated from
Winston-Salem State University
School of Business and Economics in
2008.
On Wednesday April 29, 2009, Dr. Clark will be honored for her
achievement as a newly licensed certified public accountant in the State
of South Carolina at the New CPA Oath Ceremony and Luncheon at
the Hilton Columbia Center Hotel. She will be sworn in by the South
Carolina Board of Accountancy and receive a CPA lapel pin by the
South Carolina Association of Certified Public Accountants.
Dr. Robert Herring III, associate professor of
management, joined the North Carolina Emergency Reserves, a non-military, non-political, nonprofit organization of trained volunteer U.S. Citizen
Reserves to respond, assist and aid during disasters
or attacks, to provide emergency preparedness training and education to the citizens of North Carolina,
and to assist other organizations for the benefit of
the State of North Carolina and its citizens. See
ncemergencyreserves.org/ He was ap-pointed at the
rank of Lieutenant Colonel and at the position of
Assistant to the Commander, Second Brigade
(western half of North Carolina).
Congratulations to both Dr. Janice Witt Smith
and Dr. Michael Tracey, who both received
awards in recognition of faculty accomplishments
in the receipt of program funding for 2007-2008.
Dr. Witt Smith received a $69,100 grant for developing an online HR certificate program, while
Dr. Tracey received a $10,000 grant for a supply
chain management certificate program.
Faculty Publications and Presentations
Kavas, Alican, " Global Trends, Food Industry and Marketing Practices and Their Impact on Childhood Obesity" , ( coauthored with Aysel Kavas from the Depoartment of Human
Performance and Sport Sciences) has been accepted for publication in European Journal of Management .
Heilman, G, Book title: Cross-Disciplinary Advances in
Human Computer Interaction published by IGI Global
Year: 2009 Chapter : Chapter IV “Assessing a Spanish
Translation of the End-User Computing Satisfaction Instrument”
Kavas, Alican, “Understanding Female Consumers’ Decision
Making Styles” (co-authored with Dr. F. Yesilada from
Near East University, North Cyprus ) ) has been accepted
for publication in the Faculty of Business Journal, Dokuz
Eylul University, Turkey
Herring, R., Presented an interactive workshop on faculty
personal productivity entitled “Faculty personal productivity:
Challenges and solutions for faculty and administrators” at
the Decision Sciences Institute meeting in Baltimore in November.
Bembry, S. A. and Carolyn Anderson. “Adding Audio to a
Microcomputer Applications Class to Improve Learning”,
IACIS Conference, Savannah, Georgia, October 1-4, 2008.
Namit, K., Cherikh, M., Chen, J. The Hadley and Whitin's
Exact inventory Model with ARMA Lead Time Demand.
European Journal of Management 2008, Vol. 8, No. 2,
pp.188-198
Bembry, S. A. and Carolyn Anderson. “Can you Hear Me
Now? Using Audio and Video to Improve Instruction and
Learning” 2009 UNC TLT Conference, March 13-20, 2009.
Cherikh, M., Namit, K. Group Binary Decision-Making with
Multiple Agents. International Journal of Operational Research 2009, Vol. 4, No. 1 pp. 55-74
Page 5
F O C US
FOCUS on… The World
Reflections… continued
(continued from page 1)
have fewer strategic decision-making
responsibilities, and have fewer substantive, lower-placed networks in the organization. As a result, they may not be part
of the conversations in which the decisions are being discussed and made, and
they are frequently the last hired and first
fired.
In addition, organizations may be overlooking the impact of the layoffs on the
organizational survivors. Recent research
by Shore indicates that post-downsizing
stress syndrome (for the organizational
survivors) includes the following: Trouble concentrating on the job; irritability
with fellow workers; anger toward management; higher absenteeism; substance
abuse; family problems, feelings of mistrust; health issues; negative attitude toward work; and a sense of helplessness. Most people who have been laid
off do not have the eight months of reserve income that Suze Orman suggests is
necessary to maintain one’s household
when no longer working. Therefore,
many individuals find themselves losing
whatever assets they had accumulated
during their work life. Additional research on employee engagement indicates
that organizations are losing billions of
dollars because their employees have
“checked out” of the workplace. With all
of the noise in the work environment
including that associate with “downsizing
and rumors of downsizing,” less than half
of employees are meaningfully engaged
in the organization for which they work
despite their commitment to the work that
they do. Advice to employers: Think
carefully about the ways in which you
restructure and how you make decisions
and communicate those decisions to your
human resources. When the economy
improves, they will remember how they
were treated in the worst of times, and
you may become either the employer of
choice for them or the employer of last
resort. There are significant competitive
and productivity issues associated with
each. ~Dr. Janice Witt Smith
Page 6
The economic challenges faced by North
Carolinians are greater than that seen at
any time since the Great Depression.
While many of the problems that plagued
the US and the world during that time are
present in the current crisis, including the
worldwide systemic collapse of the financial system due to the intermingling of
Main Street and Wall Street in an attempt
to increase bank profits without sufficient
regard to the long-term interests of the
banks, others factors are different.
In the 1920s, federal deposit insurance
was nonexistent, and government deficit
spending was anathema. Government, by
and large, stayed out of the everyday
lives of Americans and was far smaller
than it is today. The social safety net did
not exist and governments quickly enacted tariffs in a mistaken attempt to
jumpstart their economies, not realizing
that such tariff increases would result in a
collapse in world trade that would make
the crisis much worse. All of these factors would suggest that the current situation will not be as bad as what happened
during the Great Depression. On the
other hand, far fewer individuals were
invested in the stock market or owned
their own homes, consumers did not have
access to widescale debt instruments such
as car loans and credit cards, and consumer saving was much greater than it is
today. This 'debt overhang' needs to be
wound down slowly but surely so that we
can be on a sustained economic upswing.
Winston-Salem State University with
its Center for Excellence in Financial
Services and newly reformatted Finance
degree that focuses on having its gradu-
ates obtain the CFP (Certified Financial
Planner) designation, is poised to assist in
this endeavor. Only if we continue to
invest in education can we hope to
emerge from this economic downturn
intact and on an upward trajectory. At
the same time, we must learn to save
more and borrow less from the rest of the
world so that we reverse the current trade
and financial flow imbalance that has
turned us from the world's leading creditor nation to the world's leading debtor
nation in one generation. All financial
indicators suggest that we will emerge
from this current recession sometime in
2010. The current uptick is probably
unsustainable for two basic reasons: (1)
in the financial sector, recent good
news is predominantly the result of countertrade arrangements that are being made
through AIG and by government infusions of capital directly in the banks; and
(2) the massive 'shock and awe' tactics of
the current and previous administrations'
fiscal stimuli are being soaked up by the
states who are counterbalancing the fiscal
stimulus as they are required to balance
their deteriorating budgets. Only by
adopting rules that allow for states and
localities to balance their budgets over
the long-term as opposed to on a year-byyear basis and requiring states to save
money during good times for the bad
times, can we hope to ensure that such
downturns do not end up causing economic calamity in the future by slashing
government's core functions to such an
extent that essential services (education,
police protection, etc.) are gutted.
In Chinese, the character for crisis also
means opportunity. It is our opportunity
to use this crisis to remake our financial
house by putting it on a more firm footing, reducing our excesses in good times
so that we might find ourselves in better
shape during bad times. At the same
time, investment in education should not
be curtained since education and public
works are the only two functions of government that end up increasing future
productivity and income. This is vital for
North Carolinians to achieve their goal of
debt reduction since focusing on paying
down debt, without also having a plan to
F O C US
FOCUS on… The World
increase income, will result only in lower
living standards for all.
~Dr. Zagros Madjd-Sadjadi
The current economic meltdown was
caused by the pervasive assumption that
housing prices would continue to rise.
So, what entity deserves the largest share
of the responsibility and therefore blame?
The mortgage industry, especially the
mortgage insurance industry does. When
offered a loan they can barely (if that)
afford, homeseekers face the temptation
of trusting the expert, the mortgage broker. When those homebuyers are also
buying mortgage insurance, that behindthe-desk professional faces the temptation
of being overly generous to homebuyers.
Why? Two reasons. First, mortgage
brokers aren't risking their own money.
Mortgage brokerage firms originate the
mortgage loans, then resell those loans.
What happens after the reselling, for better or worse, doesn't affect the mortgage
brokerage. So why should the mortgage
brokerage worry whether the homebuyers
can pay or not? As long as there are investment firms willing to buy those mortgage loans from the mortgage brokerages,
then the mortgage brokerages are happy
(and profitable)! But, here's the key:
investment firms require assurance that
the mortgage brokerages are making
sound financial decisions, or at least decisions which aren't going to turn sour.
That brings us to the second reason:
mortgage insurance. Most mortgage
loans originated in the 1990's and 2000's
required mortgage insurance as part of
the deal. Mortgage insurance pays the
lender in the event that a homebuyer can't
make their mortgage payments. So what
risk does the investment firm face? The
mortgage insurance makes the mortgage
payments to the lender for at least a year,
VOLUME 15, ISSUE 2
but possibly for no longer (terms differ).
The only way an investment firm can lose
money is if the home sits empty for
longer than a year. But recall that all this
is occurring under the 1990's and 2000's
assumption that housing prices would
continue to rise. So if a homebuyer can't
make their mortgage payments, then the
mortgage insurance pays the investment
firm while the firm resells the house for a
new, higher price! That's a win-win
situation for the investment firm, or so it
appeared. But in financial matters, nothing lasts forever.
Take for example the largest player in the
private mortgage insurance industry,
MGIC Investment Corp. ("Private" as
opposed to one affiliated with the government.) MGIC's closing stock price for
the month of September 1991 was $9.06
per share. MGIC stock rose to a monthend high of $75.86 as of June, 2004. but
was still as high as $65.00 as of May
2007. Then the reality of declining housing prices hit the market. MGIC's closing
price for March 2009 was $1.42 per
share, and the company announced that it
does not predict a return to profitability
during 2009.
So in a large nutshell, that's how the
economy reached the state it finds itself
in today. What happens from here? A
capitalistic economy is superb at fixing
itself, but the worry is the speed of that
recovery. As economist John Maynard
Keynes once famously retorted, "In the
long run, we're all dead." I suspect the
primary goal of President Obama's economic stimulus plan is to blunt the economic trauma of job losses. The more
quickly the stimulus plan creates jobs, the
further from the bone this economic
downturn will cut. And, the hope must
be, when our self-righting economy shifts
into higher gear again, the government
will be able to shift to addressing our
governmental budget deficits.
Where does the School of Business &
Economics (SBE) at Winston-Salem
State University fit in all this? For one
thing, I can assure you that it's a fun time
to be teaching business courses! Nowadays it seems the entire world is experiencing a crash-course on economics and
business, and that culture serves as extra
motivation for our talented young students to hit the books with a scrutinizing
eye. The SBE has always encouraged its
faculty members to incorporate current
events within the classroom setting, and
with students so eager to master the connections between the textbooks and daily
news, classroom debates and discussions
have seldom been as lively. It's a great
time to be a business major. As always,
the world which our graduates will enter
is very different from the world they left
behind upon high school graduation, but
those intensive years of study habits have
prepared them for the future changes
they'll face throughout their entire careers. ~Dr. David Stewart
As the Nation’s economic situation deteriorates each successive month, many of
us begin to wonder how bad could this
recession could really be. Recent data on
the economy have been disappointing: 6.2% GDP growth in the last quarter of
2008, an 8.1% national unemployment
rate, and a 22% percent drop in consumer
spending. Currently, North Carolina’s
unemployment rate, at 10.7%, is the
fourth highest in the nation and the worst
since NC unemployment statistics have
been compiled. Yet, despite the prevailing doom and gloom the current crisis, in
my opinion, has more to do with broken
financial underpinnings of the system
than with its faulty economic fundamentals. The worsening access to credit, the
collapsing stock market wiping out tens
of trillions of dollars of household
wealth, bankruptcies of some of the most
prominent financial institutions, falling
housing prices, and job losses have all
affected consumer confidence, as well as
their ability to spend
(continued on page 8)
(continued from page 7)
Page 7
WINSTON SALEM STATE UNIVERSITY
School of Business & Economics
R. J. Reynolds Center
601 Martin Luther King Jr. Dr.
Winston-Salem, NC 27110
FOCUS is published biannually by the School of Business and Economics at
Winston-Salem State University. For information concerning the newsletter, or to
contribute an article, please contact Charles Parrott at (336) 750-2245 or by forwarding an e-mail to parrottch@wssu.edu.
Reflections… continued
Therefore, I believe that immediate stabilization of the financial system and restoration of credit flow are the necessary
prerequisites to economic recovery.
What started as a relatively contained
subprime lending problem has spread like
a wild fire throughout the financial system due to the use of complex, highly
leveraged financial derivatives (which
entirely escaped regulation), and which
poisoned a large part of the banking system. Recent corrective steps, like the
proposed joint buyout of mortgage
backed securities by the Treasury and
private investors are small steps in the
right direction. In addition, modification
of market value accounting rules, and
perhaps restoring some provisions of the
Glass-Steagall Act that separated banking
from the securities industry, but were
repealed in 1999, might be necessary.
Over the last 12 months, the Federal Reserve has attempted to inflate the economy by lowering key interest rates to
near zero and dramatically increasing the
money supply by almost 175%. I don’t
believe that the massive fiscal stimulus in
its current shape or form is necessary.
Moreover, it may only fuel future inflation. Besides financial aid to states that
Support the School of
Business and Economics
Excellence Fund
Every dollar that you invest in the
SBE Excellence Fund goes directly
toward supporting the undergraduate and graduate programs, improving resources and facilities, and enhancing the collegiate experience
of our students.
have Federal mandates to fill but lack
resources to do so, the rest of the stimulus
package with the exception of high priority infrastructure projects in the areas of
energy transmission and transportation
should be rescinded. As the lessons of
the previous administration painfully
taught us, excessive government spending is not the key to prosperity! Now, a
doubling or tripling of that amount is
hardly a foundation on which a prosperous economy can be built. ~Dr. Edward
Zajicek
Please make donations payable to:
Winston-Salem State University
Foundation, Inc.
SBE Excellence Fund
R. J. Reynolds Center
Winston-Salem, NC 27110
or
Go to our website at
www.wssu.edu,
Remember, your donations are
fully tax-deductible.