The first student-designed collegiate bag is debuting at H-E-B stores around the state. The reusable shopping bags reflecting the themes and values of Aggies, as well as H-E-B’s sponsorship of Texas A&M University’s athletic program.

The design was created by a group of Mays Business School students as part of a competition. The Century Oak and a big “gig “em” sign are centerpieces of the white design on maroon bags.

Designed by Mays students, H-E-B's new reusable shopping bags reflect the themes and values of Texas A&M, as well as the company's sponsorship of the university's athletic program.
Designed by Mays students, H-E-B’s new reusable shopping bags reflect the themes and values of Texas A&M, as well as the company’s sponsorship of the university’s athletic program.

Lisa C. Troy, a clinical associate professor at Mays Business School, says the advertising classes in the Department of Marketing provide students with first-hand experience working on real-world projects. Past partner organizations have included Loupot’s bookstores, the City of College Station, Texas A&M’s Drug and Alcohol Education Programs and Wired Ranch Advertising. “Working with a client forges relationships between the students and future employers, allows students to glimpse the decision making processes that occur in the firms, and motivates the students to do their best,” she says. “Plus, it is exciting for the students to see the results of their work actually implemented by the client firm.”

About 80,000 of the bags were printed, and they are being sold in more than half the stores, concentrated mostly around Central Texas in stores where Texas A&M items have been big sellers in the past.

H-E-B began more than 100 years ago and currently has more than 329 stores and 76,000 employees in Texas and Mexico. Julie Lenox, an advertising account manager for H-E-B, says the design was a clear winner to represent the Texas-based company. “We thought it had all the key elements we were looking for — it was identifiable with the university, it used the colors and it talked up the athletic sponsorship,” she says. “I think the bags are a great way for customers to show what they believe in and support, while helping out the Earth at the same time.”

A team of five surpassed nine other teams in the competition.

The project helped one student parlay his passion into a career. The main designer of the bag, Clay Coleman “09, went on to an advertising design school – Chicago Portfolio School – and is now an art director at a Dallas-based ad agency called Slingshot, where he works on concepting and designing everything from print ads to billboards, web sites and Facebook pages to TV spots and movie trailers, and product packaging.

The team of five beat nine other teams with their design, which Coleman describes as simple, with a solid message. “That’s the secret formula in advertising and design,” he says. “From what I recall, our team was actually meeting to work on a different project when we had this idea. The idea just came and it was so clear that this was the right direction. With eight words and an image we made an instant connection between the Aggie Spirit and caring for the environment. Boom – mission accomplished.”

Now Coleman says it is an honor to see the student project produced and in stores. “The most exciting thing about being a designer is to be able to point at something and say, “I did that,'” he explains. “The H-E-B bag was my first opportunity to feel that way, and I was hooked.”

Now he gets to work on projects like the H-E-B bag every day, and adds. “It’s a blast.”

Categories: Students, Texas A&M

As a stockholder, would you prefer a CEO who is strictly rational about her firm’s future prospects, or a CEO who is somewhat overoptimistic? Researchers at Texas A&M University show theoretically that for risk-averse CEOs, being somewhat overoptimistic is a good thing for shareholders.

Most CEOs are undiversified, meaning that a large fraction of their personal wealth is in invested their company. Stockholders, on the other hand, are typically well diversified, with investments across numerous companies. These differences mean that a risk-averse CEO who is strictly rational will turn down some risky investment projects that the stockholders would like the firm to make. If this happens, the result is lower firm value.

“Given a choice between a very rational CEO and a moderately overoptimistic one,” says Mays finance professor Shane Johnson, “the somewhat overoptimistic one is the better choice.”

“We show theoretically that overoptimism can help offset the effect of the CEO’s risk aversion,” Texas A&M finance professor Shane Johnson says. “The result is that a CEO who is moderately overoptimistic will invest the way shareholders would want her to invest—this maximizes firm value.” In contrast, a purely rational CEO turns down too many investment projects relative to the optimal level, whereas a CEO who is too overoptimistic accepts too many investment projects. Both underinvestment and overinvestment produce firm values below what it could be.

“If the theory is correct, CEOs who are somewhat overoptimistic should face a lower probability of termination than rational CEOs or too-overoptimistic CEOs face. A board doesn’t necessarily know a CEO’s level of optimism when it hires her. It learns by watching his decisions over time,” Johnson says. If CEOs who are somewhat overoptimistic maximize firm value, they should be more likely to keep their jobs than would CEOs with too-low or too-high optimism. Using a large sample of CEO terminations, the team finds strong empirical support for the theoretical predictions. The results are consistent with the view that CEOs who are somewhat overoptimistic maximize firm value.

Before this research was conducted, the common belief was that any level of over-optimism was bad, says Johnson. “Our paper is one of a series that argues that some level of over-optimism is good for CEOs,” he says. “Given a choice between a very rational CEO and a moderately overoptimistic one, the somewhat overoptimistic one is the better choice.”

The research was conducted by Texas A&M finance professor Shane Johnson; doctoral students T. Colin Campbell, Jessica Rutherford and Brooke Stanley; and former Texas A&M professor Michael Gallmeyer, who is at the University of Virginia.

For more information, contact Johnson at

“CEO Optimism and Forced Turnover” by T. Colin Campbell, Michael Gallmeyer, Shane A. Johnson, Jessica Rutherford and Brooke W. Stanley was published in Journal of Financial Economics.

Categories: Research Notes

Intuitively, it is clear that changes in a service environment can reduce the quality of a service at least temporarily. But what is not clear is how deeply, and for how long, major changes affect operating performance – that is, until Texas A&M University business professors Gregory Heim and Michael Ketzenberg decided to answer those questions. They chose a dramatic example of redesign and decided to focus on experience-based service companies, in general, and an area that had not been previously studied in depth: golf courses.

“The argument for improving a course is to make it better, but we wanted to find out if people really thought that was true,” said Mays professor Gregory Heim. “Some people embrace change, while others don’t.”

Many service managers redesign their services periodically to keep their offerings fresh, competitive and desirable to customers. Prior research has shown that it could increase repeat business. What Heim and Ketzenberg wondered was how service firm managers and employees relearn to improve their performance after these major redesigns.

That was the extent of Heim’s golf knowledge at the start of this project. He sought out a colleague to fill the gaps. He did not have to search far to find someone to fit the bill. In fact, Ketzenberg was just down the hall. Ketzenberbg has two passions: research and golf, and he considers the opportunity to combine both a godsend. Heim says he focused on the data analysis, while Ketzenberg provided golfing expertise. “It was an ideal pairing for this project,” Heim says.

Heim says a major research challenge is obtaining real-world operating data from companies upon which to base the research. Most companies are reluctant to share their data. For this study, the authors were looking for data from multiple companies over multiple years. Golf courses posed less of a problem, since the data were publicly reported.

Gregory Heim

The data came in the form of “panel data” from The Dallas Morning News. The News tracks the top Texas golf courses annually through ratings and evaluations of top courses by golf professionals, as well as information on when the courses were designed and redesigned. Heim and Ketzenberg chose to study the data from 1989 to 2009. Their study provides managerial insight by demonstrating the extent of learning, illustrating how redesigns can negatively affect service outcomes, showing how relearning occurs and discussing tactics for success when redesigning services.

Major redesigns, intended to improve products and services, tend to throw the quality of service off track, the researchers found. The question was how long the service suffers, which they studied through learning effect patterns during routine operation periods as well as “window of opportunity” effects the local service crews felt after outside firms had completed the major redesigns.

“We wanted to see what we could learn about what happens when you destroy the course to redesign it; how age affects the long-term experience; and whether the quality of service gets better with time,” says Heim. “When you redesign it, there’s a period of time when the customers miss the familiar old course and they have to re-learn to navigate the course — the hazards, slope of the course, shape of the greens, and so forth. The argument for improving a course is to make it better, but we wanted to find out if people really thought that was true. Some people embrace change, while others don’t.”

Michael Ketzenberg

The topic is a nontraditional one for the field of information and operations management, but both of them say it was fun to do. The lessons learned were to carefully consider changes, communicate about them with stakeholders and make the investment in training staff for the transition. “Discontinuous events that lead to dissatisfaction on the customer’s part are not going to pan out to be good investments,” Heim says.

Both Texas A&M researchers plan to continue golf-related research: Heim intends to update the golf data for new studies while Ketzenberg is working with Rogelio Oliva and a colleague from Europe, Mozart Menezes, on a paper titled “Optimal Scheduling of Golf Beverage Carts.” Ketzenberg explains, “We are trying to answer the often-heard golfer’s lament of why there is never a beverage cart around when you want one. Fun stuff.”

For more information, contact Heim at or Ketzenberg at

The paper “Learning and Relearning Effects with Innovative Service Designs: An Analysis of Top Golf Courses” by Heim and Ketzenberg was released in July 2011 in Journal of Operations Management.

Categories: Research Notes

Four out of five immediate Kelly family members have received solid educations at Texas A&M’s business school, so they wanted to give something back. Kim ’79 and T. Mark Kelly ’79 committed $100,000 to the Business Honors Program to honor the quality educations they and two of their children received at Texas A&M University and to help Mays Business School entice top students.

Four generations of the Kelly family have gone through the university, but the youngest daughter Maddy, who is 17, is still considering her options.

T. Mark '79 and Kim Kelly '79
T. Mark ’79 and Kim Kelly ’79

Who knows? She could have an experience similar to her brother’s. Ryan Kelly was considering several top colleges before his freshman year, and it didn’t seem to his parents that he was likely to choose Texas A&M. “At the 11th hour the university offered him a partial scholarship, and I think that’s what turned him around to go to A&M,” recalls his father, Mark Kelly. “It wasn’t a lot of money, but it was the gesture that meant so much to him. Just doing that showed him they really wanted him, and he chose A&M. I don’t think he ever regretted that decision.”

Distributions from the endowment for the Kim ’79 and T. Mark Kelly ’79 Business Honors Scholarship will be awarded to full-time students in the Business Honors Program. The program within Mays provides 30 hours of honors course work, including an internship, as well as extensive professional development opportunities. Business honors students also can earn a double major with no additional course work.

“They didn’t have the “Business Honors’ per se back in the Dark Ages when my wife and I were in school, but we both had good experiences and got solid educations,” says Kelly, who is chairman elect of the 800-lawyer firm Vinson & Elkins in Houston. His whose wife started her career at a Big 8 accounting firm.

That high level of quality carried on through the next generation, Kelly says. Their daughter Kristin graduated summa cum laude in 2008 and Ryan graduated magna cum laude in spring 2011. “We are pleased to see our children receive quality education at Texas A&M’s business school and pursue solid careers,” he says. “They both have landed on their feet and done extremely well, starting their careers as investment bankers.”

Kelly and his wife wanted to give something to Mays to help set it apart from other top business schools. “I want them to be able to go out and have something tangible to offer those top students,” he says. “A lot of times these students couldn’t qualify for the need-based awards, but these gifts go a long way in saying, “We want you here.’ That can make the difference in attracting some of these students who have so many choices.”

Categories: Donors Corner, Former Students

It’s complicated, an employee’s decision to leave a job — even more complicated than previously believed, Texas A&M University researchers conclude after conducting research on when job searches result in turnover.

As expected, turnover was higher when employees had lower levels of embeddedness and job satisfaction and higher levels of available alternatives. What wasn’t expected, or previously explained, was that there is more complexity to the process than believed, and specifically, that these factors play a key role in whether search behavior actually results in the decision to quit.

Wendy Boswell

Embeddedness means how attached someone is to his current environment, says Mays Business School faculty member Wendy Boswell, who collaborated on the research with fellow faculty member Ryan Zimmerman and doctoral candidate Brian Swider. The trio examined factors that may help explain under what conditions employee job search effort may most strongly (or weakly) predict subsequent turnover.

“How tied you are to not only the place but also the community — if you own a home, your spouse has a job there, you belong to a church or are involved in schools, determines how much incentive it takes to get you to leave,” Boswell explains.

“Fit” is also important — whether the values of a community (as well as the organization) align with the individual’s — and characteristics such as metropolitan versus small-town, or urban versus industrial. “The practical implication for an employer is to know who is really vulnerable to leaving, then going and intercepting those high performers — retention isn’t “one size fits all,'” explains Boswell.

Ryan Zimmerman

The culture of the organization and community also carry great weight in the decision, Swider says. “Say I’m working in New York City and a job opens in a small southern suburb. Whether I pursue that opportunity depends on my personal preferences,” Swider says. “It could be the opportunity I’ve been waiting for or it could sound like a nightmare.”

Employers do a poor job of predicting impending turnover, Swider says. These findings suggest that there may be a number of factors interacting to influence employees’ turnover decisions, indicating greater complexity to the process than described in previous prominent sequential turnover models.

Boswell explains the assumed process: An employee experiencing job dissatisfaction searches for alternatives, evaluates them against his current position, then either quits or stays put. But, often times, employees search and don’t leave. Online applications make it easier to search and even apply for positions, but the likelihood of an employee actually accepting another position depends on his level of enmeshment or “stuckness” as well as how important it is for the person to leave and whether he or she even has the opportunity.

Brian Swider

“The more of these attachments you have, the more likely you are to want to stay somewhere,” Boswell explains. “It used to be the defined benefit plan, but now it is all these other factors that you might have to sacrifice if you were to leave.”

The key for an employer to stay ahead of the turnover, Boswell says, is to know his or her employees. “Are they satisfied, embedded, on the fence?” she says. “Are they flight risks? If so, and if they are top employees, you might be wise to invest in trying to retain them.”

For more information, contact Swider at or Boswell at

“Examining the job search – turnover link: The role of embeddedness, job satisfaction, and available alternatives,” by Brian W. Swider, Wendy R. Boswell, and Ryan D. Zimmerman, was published in the March 2011 issue of the Journal of Applied Psychology.

Categories: Research Notes

Imagine borrowing from someone else’s stockpile of corporate stocks, then selling shares, later buying them back and returning them, keeping any profit. That’s what short sellers do on a regular basis, and they tend to out-perform the analysts.

The practice is called short selling, and research by two Texas A&M University business professors and a former PhD student shows that ordinary investors can profit by trading with the short sellers.

Lynn Rees

Their research investigated whether short sellers and analysts differ in how they use information that predicts future returns. It appears short interest significantly anticipates the expected direction, while analysts tend to positively recommend stocks with high growth, high accruals, and low book-to-market ratios, despite these variables having a negative association with future returns.

“Investors frequently observe and use recommendations from analysts on whether to buy or sell a stock,” says accounting Professor Lynn Rees. “But, our research suggests that analysts do not always use accounting information, such as accounting accruals and cash flows, in forming their recommendations; whereas, short sellers appear to do much better in using these signals.”

Co-authors are Edward P. Swanson, holder of the Durst Chair in Accounting; and Mays doctoral graduate Michael Drake of BYU. The researchers have presented the paper to professionals, as well as academic audiences, and a NYC capital management company that uses short interest as an input in an investment model.

Edward Swanson

A low percentage of investors do short selling, but a very high percentage of investors would be interested in what they are doing, Rees says, because the short sellers tend to do better than the market. “Our evidence suggests that using the level of short interest combined with analysts’ forecasts allows investors to make more profitable investment decisions,” he says.

For more information about this research, contact Rees at, or Swanson at

“Trading against the prophets: Using short interest to profit from analyst recommendations,” by Michael Drake, Lynn Rees and Edward P. Swanson, was published in The Accounting Review.

Categories: Research Notes

“I spent my entire academic career studying the Great Depression…if we do not act boldly and immediately, we will replay the depression of the 1930’s; only this time, it will be far, far worse…if we don’t do this now, we won’t have an economy on Monday.”
—Ben Bernanke, U.S. Federal Reserve Chairman as portrayed by actor Paul Giamatti in “Too Big to Fail,” discussing the need to pass the Troubled Asset Relief Program (TARP) in 2008

When I heard this statement, my first reaction was not whether TARP was a good or bad idea. Instead, I thought of how interesting it would have been to have Ben Bernanke as a professor (he previously served on the faculties of Stanford, New York University, and Princeton). His students would have gained the perspective of his research in evaluating and discussing the financial crisis and its ramifications. They would have received a special education.

Nationally, higher education and the role of faculty research have come under heavy scrutiny. Much of this scrutiny suggests that time faculty spend on research is additional time that could be spent in the classroom. While that argument seems logical, what is missing from the discussion is how research faculty integrate their teaching and research expertise. Their experiences in the classroom enhance their research and their research findings enhance their teaching. Each improves the other, creating a learning environment that encourages dynamic, critical, analytical thinking.

Mays faculty are known for the quality and impact of their research in both the academic and business worlds. These same faculty bring their energy, curiosity, and skills to the classroom each and every day. Our mission: “creating knowledge and developing ethical leaders for a global society” recognizes that research and teaching go hand in hand to provide students a world-class education and unlimited opportunities — a truly special education.

Categories: Deanspeak