Mays Impacts

How does a major American soft drink brand reposition itself in a changing global market? With headquarters located in an increasingly health-conscious nation, and with new markets opening up as far away as Russia, how can a soda distributor stay competitive and maintain brand strength? These are some of the issues facing The Pepsi Bottling Group (PBG) today, as discussed by president and chief executive officer Eric Foss.

Pepsi Bottling Group President and CEO Eric Foss spoke to Mays MBA students about developing leadership skills.

Foss visited the Texas A&M campus recently to address MBA students at Mays Business School about Pepsi, leadership, and responsible business. Underscoring his message was a check for $10,000 Foss presented on behalf of PBG to Mays students for The Big Event, a student-organized community service project that involves more than 10,000 Aggies.

Foss talked about global dynamics that affect his business and gave the MBA students a look into his company as a compelling place to launch and build a career. His main message, though, was to seek opportunities to develop one’s leadership skills. With honest examples from his own life, Foss illustrated the importance of effective communication and management. “To me, leadership is the most important dimension in business today,” he said, challenging students to assess themselves in several leadership areas.

“The road to success as a leader is filled with failure,” said Foss, recounting mistakes he has made on the road to the boardroom, including one earlier in his career that lost the company a lot of money. “You need to embrace that failure and understand that it is just delayed success.”

Foss presented a check for $10,000 to The Big Event on behalf of PBG.

Foss has been with PBG (which Pepsico spun off as an independent company in 1999) since 1982. He has held a variety of positions with increasing responsibility within the company, including general manager of Pepsi-Cola’s Central Europe business, and vice president of retail strategy for Pepsi-Cola North America. In July 2006, Foss was elected to his current position as head of the company.

Though he is not an Aggie (he holds a BS in marketing from Ball State University) Foss is an A&M supporter, is married to an Aggie, and is an Aggie dad.

Foss also serves on the board of directors of United Dominion Realty Trust, Inc., and on the industry affairs council of the Grocery Manufacturers of America. In his spare time, he coaches 7th grade girls basketball.

Mays Business School students are devoted to serving others all year round, not just at the holidays. Actively giving back is stressed both in the classroom and through student organizations, and each semester hundreds of students answer the call to action.

Mays Marketing Master’s Program students collected a ton and a half of food item donations for the Brazos Valley Food Bank.

Before Thanksgiving, Mays master’s in marketing students conducted a canned food drive for the Brazos Valley Food Bank, collecting 3,000 pounds of food and $900. While others were writing term papers and studying for finals, the 54 students involved in the effort were sacrificing study time to collect food during this weeklong effort.

About 400 students under the direction of Keith Swim, clinical assistant professor of management, purchased gifts for underprivileged children for Christmas. Swim estimates about 400-450 gifts were purchased, in addition to almost $1,000 worth of gift cards which were used to furnish last minute gift needs. The student’s efforts made Christmas brighter for 98 children. This is the sixth year Swim and his students have collected for this cause.

Another group of Mays students spent the whole semester learning about business through service. The 80 students in four sections of the sophomore level BUSN 289 class were split into teams and asked to find a cause to which they could contribute at least $1,000 or the equivalent amount of labor and materials. In the end, they raised more than $68,000 for a variety of local causes. Below is a list of projects these students organized:

• Team Sailor gave more than $11,000 worth of goods to a Habitat for Humanity family. They collected donations from area vendors to provide bedding, dishes, and other items for the family’s new home.
• The group The Incredibles, chose the Brazos Valley Children’s Museum where they painted the walls as well as a mural, and organized storerooms. They donated 200 hours of service, equivalent to about $4,000.
• Team ARO (“Aggies Reaching Out”) created a fundraiser and awareness campaign for the Brazos Valley Community Action Committee that resulted in almost $12,000 for the group.
• Team 6.1 raised and collected items for Big Brothers Big Sisters of Brazos Valley in order to furnish a new activity center, resulting in an impact of more than $1,600.
• Team ACT (“Aggies Coming Together”) worked with Boys and Girls Club of College Station to create and implement an after-school curriculum to teach basic financial literacy. With the funds they raised, the total need met was about $4,000.
• Team ACE (“Aggies Committed to Excellence”) raised funds, created a website, and recruited volunteers for the Lena Mae-Farris Foundation, totaling almost $10,000 worth of service.
• Team G.I.A. (“Girls in Action”) raised nearly $5,000 for the Salvation Army.
• Team AFCO (“Aggies for Community Outreach”) raised funds and awareness for the Full Hearts Foundation totaling more than $3,500.
• The team The Money Makers worked with Scotty’s House, a local child advocacy center, to raise funds and items for their new facility. Their total fundraising effort netted almost $3,000
• The team Top Notch Consulting raised funds for Elder-Aid by collecting and recycling cell phones resulting in more than $2,000 worth of service.
• Team AGS (“Aggies Giving Service”) collected $2,695 worth of food for the Brazos Valley Food Bank. Additionally, the team Five’s Company contributed more than $2,000 for the School Backpack Program at the Food Bank.
• Team N.A.V. collected funds totaling almost $12,000 for Young Life of Navasota.

Mays Business School recently completed the accreditation maintenance process with AACSB International (The Association to Advance Collegiate Schools of Business), the premier accrediting agency and service organization for undergraduate and graduate business administration and accounting programs. After completing this review Mays and the Department of Accounting have been granted another five years of accreditation.

Mays received initial accreditation in 1972 and the accounting department followed in 1982. This prestigious endorsement puts the school in an elite group that makes up less than 10 percent of the world’s business schools that have achieved business and/or accounting accreditation from AACSB International.

To achieve accreditation, business programs must satisfy the expectations of a wide range of quality standards relating to strategic management of resources, interactions of faculty and students in the educational process, and achievement of learning goals in degree programs. These standards are mission-linked. During the accreditation process, Mays was visited and evaluated by business school deans with detailed knowledge of management education, applying accreditation standards that are widely accepted in the educational community.

As required by AACSB standards, all accredited schools must go through a peer review every five years in order to maintain their accreditation. AACSB International accreditation assures stakeholders that business schools:

• Manage resources to achieve a vibrant and relevant mission.
• Advance business and management knowledge through faculty scholarship.
• Provide high-caliber teaching of quality and current curricula.
• Cultivate meaningful interaction between students and a qualified faculty.
• Produce graduates who have achieved specified learning goals.

Accreditation is a process of voluntary, non-governmental review of educational institutions and programs. Institutional accreditation reviews entire colleges and universities.

AACSB International accreditation represents the highest standard of achievement for business schools, worldwide. Institutions that earn accreditation confirm their commitment to quality and continuous improvement through a rigorous and comprehensive peer review. AACSB International accreditation is the hallmark of excellence in management education.

Have you ever wanted to start investing in the stock market, but been afraid of the potential risk? Are you as financially savvy as a monkey?

If you can answer yes, then two Mays Business School graduates have devised the plan for you. The formula is simple: buy what Warren Buffett buys.

According to research by Gerald (Jerry) Martin ’79 and John Puthenpurackal ’02 (both Mays finance PhDs), investors would have earned an annual return of 24.6 percent by buying the same stocks as Buffett after he disclosed his holdings in regulatory filings, even months later. The S&P 500 rose 12.8 percent a year in the same period.

CNBC and Bloomberg interviewed Martin, an assistant professor at the American University in Washington and a visiting professor at Mays, and Puthenpurackal of the University of Nevada, Las Vegas, about their findings. Their paper, entitled “Imitation is the sincerest form of flattery: Warren Buffett and Berkshire Hathaway,” is currently available through the Social Science Research Network (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=806246).

For more coverage of this story:
CNBC: http://www.cnbc.com/id/21834492
Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHszGRaHR1M4
and http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXV1MEyTKOlg
New York Times: http://www.nytimes.com/2007/12/29/business/29buffett.html?_r=3&ref=business
LA Times: http://www.latimes.com/business/la-fi-berkshire12dec12,1,7883937.story?coll=
la-headlines-business
Chicago Tribune: http://www.chicagotribune.com/business/chi-wed_berkshire_1212dec12,0,3695478.story

The sight of dazzling emerald hills caressing the shoreline. The smell of salty waves. The rhythmic rocking of the boat. The sound of sea birds crying. The feel of fresh, cool, Alaskan air.

And the slick thud of fish after fish landing on the boat-bottom as Scott Lee and his sons pull them out of the net.

Lee

This scene is a complete change of pace from Lee’s usual life as a professor of finance at Mays Business School—a change that Lee finds more than refreshing. Lee says that communing with nature and doing something physical rather than sitting at a desk offers a vital chance for him to recharge each year.

His career as a fisherman began in 1973, when youthful wanderlust led him to hitchhike along the coast of Alaska. A friendly couple picked Lee up one frigid morning and gave him a place to stay at their home in Kodiak.

Over the course of the next three summers, the couple helped him land a job on a “tender,” a small boat that goes to the fishing grounds, buys fish from the scattered fishing sites, and re-supplies the fishermen with food and fuel. The next year, Lee learned to fish, staked his own fishing-claim, and started hauling in the salmon in the same remote bay where he and his family still fish today.

Although he catches all five species of Pacific salmon, Lee concentrates on sockeyes (red salmon) during the summer spawning season. Salmon are born in freshwater and eventually go to sea, living in a saltwater environment most of their lives. When they are mature, they return to the place where they were born to reproduce in freshwater.

Mays finance professor Scott Lee has been fishing in cold Alaskan waters since 1973.

Lee’s fishing operation is an “intercepting fishery” just off the coast—targeting the schools of salmon returning to spawn. The mesh size of his nets is chosen to catch salmon that average around 6 pounds each. He likens the system to a shower curtain blowing in the breeze of the current, held up by corks and secured on the bottom with lead weights.

“It’s called gillnetting,” explains Lee. “Ideally you’ll catch them right behind the gills…then you’ll pull them through the net.” Lee jokes that it’s not the kind of fishing seen on “The Deadliest Catch,” but generally is a much more peaceful—and safe—process near the shoreline.

But it is hard work, and the hours are long. “Like any other commercial harvest, we have to make hay when the sun shines. So, most seasons have days when the run peaks that we are at the nets from 7 a.m. until past midnight,” said Lee.

In the 1970s and 80s, there was a lot of money to be made from the abundant salmon runs in Alaskan waters. Today, due to increased fish farming and higher production costs, it’s not the lucrative business it once was. (“Atlantic” salmon is the euphemistic term for farmed salmon at the grocery store.)

Regulations were originally designed to maintain traditional (and relatively inefficient) fishing techniques such as gillnetting, but progress was inevitable. Consolidation within the industry has made it increasingly difficult for small fishermen and processors to stay afloat. “I understand it from an economic perspective,” said Lee. “It’s not sustainable to maintain a huge [processing] plant in the middle of the wilderness that you’re only going to run for two to three months a year.”

Lee’s fishing expeditions have brought him close to some of Alaska’s wildlife, such as this orca.

Despite the diminishing monetary incentives, Lee has other reasons to return to the remote setting each summer, including spending time with his best friend, P.J. Hill. Hill is a fellow part-time fisherman and a professor of economics at the University of Alaska Anchorage. The two met when Lee unknowingly “jumped” Hill’s claim—that is, he set up his nets in an area Hill had legally reserved. They sorted out the details and became great friends thereafter; in fact, each served as the other’s best man at their weddings.

As life continued, Lee got married, had two sons, earned a PhD at the University of Oregon, became a professor, and moved to Texas. His fishery started as a solo-operation, but became a family affair, as Lee involved his two sons in the business from a young age.

“It’s been a working vacation where I can spend time with my family,” he said. “Spending a couple of months every summer with them has been a priceless gift. It makes me sad that it’s coming to the end of that, but it’s inevitable.” Lee’s sons, Nick (21) and Nathan (17) are increasingly busy during the summer with activities and internships, and Lee says he knows they can’t keep fishing with him for many more years.

Lee and his wife, Laurie, and their younger son still spend about five weeks fishing each summer during the peak of the red salmon season.

Boehmer

Blackwell

The spring semester will see a few changes in leadership at Mays Business School. David Blackwell, head of the Department of Finance and Republic Bank/James W. Aston Professor of Finance, will be stepping down as department head and taking on the roll of associate dean for graduate programs.

Taking over for Blackwell as interim department head will be Ekkehart Boehmer, associate professor and Nichols Professor of Finance. Boehmer will serve in an interim capacity until a permanent candidate is appointed.

These changes will be effective January 2008.

Texas A&M Distinguished Professors of Marketing Leonard L. Berry and Rajan Varadarajan have been selected as recipients of the 2008 Paul D. Converse Award. This honor from the American Marketing Association is bestowed once every four years to five scholars who have made a significant contribution to the science of marketing through their lifetime of research. The Converse Award is more than ceremony: it is also a forum for seasoned scholars to interact with young scholars while discussing the awardees’ body of work and future course of study.

Varadarajan

Berry

“Len Berry and Rajan Varadarajan are internationally renowned scholars and dedicated educators,” said Jeff Conant, department head and professor of marketing at Mays Business School. “Both gentlemen have the kind of values that makes me proud to say they are my colleagues. Their commitment to the multiple missions of Texas A&M (teaching, research, professional service) have played a significant role in the Mays Business School becoming one of the top ten public business schools in the nation.”

With their years combined, these two faculty members have been shaping students at Mays for more than a half-century. Varadarajan came to A&M in 1981 as an assistant professor with a research interest in marketing strategy. From 1982 until the present, he has taught a doctoral seminar in his specialty field on alternating years, which he says has been a part of his career he has found extremely satisfying.

“Training and collaborating with doctoral students has been a personally satisfying and professionally rewarding learning experience. I take great pride in telling my students that any time I am in my office, my doors are open to meet and discuss their research with them,” said Varadarajan, who currently holds the Ford Chair in Marketing and E-Commerce, and also serves as associate dean for research and doctoral programs.

Berry, who holds the M.B. Zale Chair in Retailing and Marketing Leadership has been studying service quality throughout most of his career, which has spanned four decades. He is also a professor of humanities in medicine in the College of Medicine at the A&M System Health Science Center. During the 2001-2002 academic term he served as a visiting scientist at Mayo Clinic studying healthcare service. Since that time, the unique combination of marketing, service, and healthcare has been his research passion.

“Healthcare in this country is in a state of crisis, and it is probably the most important service there is,” said Berry. “Good healthcare is critically important. I just hope that my research can help to improve the system in some way.”

The Converse awards will be presented to Berry and Varadarajan at a symposium held April 17-20, 2008, at the University of Illinois at Urbana-Champaign. The other 2008 Converse Award recipients are Joseph Alba, University of Florida; Kent B. Monroe, University of Richmond; and Valarie Zeithaml, University of North Carolina at Chapel Hill.

An article by Texas A&M Distinguished Professor Leonard Berry has recently been recognized by Business Horizons and Elsevier, the world’s largest publisher of medical and scientific literature, with their best paper of 2007 award.

Berry

The article is titled “Building a strong services brand: Lessons from Mayo Clinic,” and appeared in the May/June 2007 issue of Business Horizons. Berry co-authored the article with Kent Seltman, former head of marketing for the Mayo Clinic. The pair is currently completing a book titled Management Lessons from Mayo Clinic: Prescriptions for Service Success, which will be published in the summer of 2008 by McGraw-Hill.

Berry, who holds the M.B. Zale Chair in Retailing and Marketing Leadership at Mays Business School, has been studying customer service practices throughout most of his career, which has spanned four decades. He is also professor of humanities in medicine in the College of Medicine at the A&M System Health Science Center. During the 2001-2002 academic term he served as a visiting scientist at Mayo Clinic studying healthcare service. Since that time, the unique combination of marketing, service, and healthcare has been his research passion.

“Healthcare in this country is in a state of crisis, and it is probably the most important service there is,” said Berry. “Improving healthcare service is critically important.” Berry says he feels his work is starting to “make a difference” and that people are paying attention to what he has to say about how customer—or patient—care could be improved.

Berry is the founder of Texas A&M’s Center for Retailing Studies and served as its director from 1982 through June 2000. He is a former national president of the American Marketing Association. Berry’s most recent books, all published by The Free Press, include Discovering the Soul of Service, On Great Service, Marketing Services: Competing Through Quality, and Delivering Quality Service.

Notably, Berry has been identified as the most frequent contributor to the English-language services marketing literature in the world. He has been recognized dozens of times for his excellence in research and teaching.

Business Horizons is a bimonthly publication of the Kelley School of Business at Indiana University. Berry and Seltman’s paper was chosen for the award by the editorial board of the journal, which seeks to honor the article that best meets the journal’s mission. In addition to the honor, the duo received a small monetary award and their accomplishment will be featured in the January/February 2008 issue of Business Horizons.

At the end of the semester, students tend to relax when it comes to class attendance and note-taking. This was not the case, however, for the final meetings of the Introduction to Business (BUSN 100) class, which featured Al Reese ’71 as a guest lecturer. Reese, who is the chief financial officer of ATP Oil & Gas Corporation, gave students practical advice for succeeding in the business world. He spoke to 150 students in two sections of the class.

Al Reese ’71, CFO of ATP Oil & Gas Corporation, speaks to Business 100 students.

“Guest speakers are important because they make what might otherwise be dismissed as “just theory’ real,” said Kris Morley, director of the Business Honors program and instructor of the Business 100 course. “Speakers like Mr. Reese give students the chance to hear how a concept they’ve learned about in class is played out in the business world.”

Many of the points Reese discussed with students would be obvious to business professionals, but for these freshmen, his message seemed to be an oracle from the business gods. The students hung on his every word as Reese gave tips on handshakes, business cards, e-mail etiquette, and wardrobe choices.

Reese echoed many parents when he gave students advice about quitting smoking, keeping tattoos covered, and dressing modestly and professionally. Though it may have been a familiar message, it held more meaning for the students to hear it coming from a highly successful businessman.

Reese’s final piece of wisdom was basic and profound. “If you want to succeed, work hard,” he said. “I know it’s trite, but it’s true.” Hard work has paid off for Reese, who graduated from A&M with a degree in finance, and then went on to certify as a CPA and achieve an MBA. He has served in his current position as CFO for nine years. Prior to joining ATP, Reese worked in several other management positions in the energy, finance, and accounting fields.

Reese serves on the advisory board of The Energy Forum in Houston and is a director of Integrity Bank in Houston. He also serves as president and director of the ACR Foundation, a private charitable organization in Houston.

The Society of Industrial and Office Realtors Foundation recently announced the winners of the annual Majestic Realty Co. Educational Scholarship program. Five $10,000 awards were presented to outstanding graduate students pursuing careers in commercial real estate. Jacob Milligan, a master of real estate student at Mays Business School at Texas A&M was one of the five recipients.

Majestic Realty established the scholarship program in 2006, in partnership with the SIOR Foundation. The company received dozens of entries from students in prestigious MBA programs in the developer’s core business states—California, Colorado, Georgia, Florida, Nevada and Texas. R. Stan Conway, vice president of Majestic Realty Co., presented the scholarships at the fall professional conference of the Society of Industrial and Office Realtors.

“Majestic Realty is committed to supporting education on many fronts, and we are proud to present our scholarships to these worthy individuals,” Conway said. “We believe these students, all of whom already have established real estate careers, will carry the commercial and industrial real estate industry into the future with innovation and enthusiasm.”

Milligan is in his last semester at Texas A&M. He graduated with a BA in agribusiness in 2006 and began his master’s degree program shortly after. He has maintained a 4.0 GPR throughout his entire academic career. Milligan recently interned at Q10 Kinghorn, Driver, Hough & Co., a commercial mortgage firm in Houston.

When he graduates later this month, Milligan will have a job waiting for him with ProLogis, an industrial real estate development firm, as a market representative in Dallas. Milligan hails from Van, Texas. His interests include development, capital markets and mortgage banking.

Other scholarship winners were: Sara Klaustermeier, University of Colorado; Abbey A. Barnett, Southern Methodist University; Kevin Galbasini, University of Southern California; and Lieutenant Kevin J. Whirity, University of Florida.

About Mays Business School

Mays Business School currently enrolls more than 4,000 undergraduate students and 875 graduate students. Mays is nationally ranked among public business schools for the quality of its undergraduate program, MBA program and the faculty scholarship of its 110 professors in five departments.

About the SIOR Foundation

The SIOR Foundation is a non-profit foundation, independent of the Society of Industrial and office Realtors that provides financial support for activities that expand knowledge within and beyond the commercial real estate industry.

About Majestic Realty Co.

Founded in 1948, Majestic Realty Co. is one of the nation’s oldest and largest privately held real estate firms, with an office, retail and industrial portfolio totaling approximately 70 million square feet. The Southern California-based company is a diversified real estate developer specializing in the planning and development of premier master planned business parks and retail centers. Headquartered in City of Industry, Majestic Realty also has offices in Atlanta, Dallas, Denver and Las Vegas. For information or leasing opportunities, visit www.majesticrealty.com.