McCombs School in the News
May 2004

Can India Shine? Not if it Neglects its People, Konana Says
Austin American-Statesman, May 31, 2004
In India’s recent national elections, voters rejected several candidates who campaigned on the theme of “India Shining,” the idea that building India’s information technology (IT) economy would be the best way to further the country on its path toward development. In a May 31 American-Statesman op-ed, Prabhudev Konana (MSIS) applauded this outcome as way of focusing the country on developing its industrial and agricultural economy. “Proponents of ‘India Shining’ would have us believe that this election was a populist victory for socialism over business, a tragic triumph of retrograde agricultural and manufacturing sectors over the wave of the future. Actually, the election was democracy and capitalism at its finest,” he wrote. “Any civil society must design public policy and allocate resources to ensure basic minimum standards for its citizens. This is not socialism, but a prerequisite for capitalism and democracy to thrive.”
Read Austin American-Statesman op-ed (requires free registration).

Top Students Comprise Class of 2008
Fort Worth Star-Telegram, Dallas Morning News, et al., May 15-31, 2004
Although it’s been less than a month since McCombs turned out its latest crop of freshly-minted BBAs, members of the Class of 2008 are already preparing to make their mark on McCombs. Incoming freshmen include top academic, athletic and artistic students from around the world. Several have recently been profiled in their local media.
Read Fort Worth Star-Telegram story (requires free registration).
Read Times Record News story.
Read Austin American-Statesman story (requires free registration).
Read Dallas Morning News story (requires free registration).

Business Plan Competitions May Attract Exploitative Entrants
Boston Business Journal, May 30, 2004
Increasingly, coordinators of university business plan competitions are keeping a wary eye out for serial entrants. While such competitions intend to encourage fledgling entrepreneurs by providing startup money and services, some teams are demonstrably more interested in national visibility and resume-padding. Larger competitions, such as the McCombs School of Business’s MOOT CORP®, enjoy a high profile on the national circuit; as a result, they may be especially vulnerable to such exploitation.
Read MSNBC story.

Federal Requirements Are Relatively Lenient on Disclosure, Notes Cross
Austin American-Statesman, May 29, 2004
A subpoena given by the Securities and Exchange Commission to Austin-based EZCorp has raised the issue of how much information corporations are required to disclose by federal law. According to Frank Cross, a McCombs professor of business law, they are only required to disclose the specifics of their ownership. Speaking generally, Cross, a corporate governance expert, commented that as long as you disclose how concentrated ownership is, “You can rape and pillage your nonvoting shareholders.”
Read Austin American-Statesman article (requires free registration).

Konana Suggests Focusing on India’s Unemployed
The Straits Times, May 16, 2004
In an article detailing India’s struggle to educate its youth and build a stronger economy, Prabhudev Konana, an associate professor of MSIS at the McCombs School, recommended that India should concentrate on improving opportunities for its unemployed citizens, who comprise almost 70 percent of the country’s workforce. He contends that Indians need an education that helps them create services, start small businesses and utilize tourism opportunities. Today, a mere 6 percent of India’s children make it all the way through school. The country took a big step towards improvement in 2002, when it legislated free and mandatory education for children ages six to fourteen.

Outsourcing Inspires Fierce Debate at Business Schools
The Chronicle of Higher Education, May 14, 2004
The political debate about outsourcing extends to academia. Student perceptions of the issue run the gamut, says Prabhudev Konana (MSIS): “Some students who believe in strong market forces say in order to compete in the global market, you have to outsource. Others say that if jobs continue to leave the country, our buying power will also diminish.” Konana, who recently led a Plus Global study trip to India, said he tries to show the ups and downs of outsourcing.
Read Chronicle of Higher Education story (requires subscription).

Small Stock Offerings More Risky, Prentice Says
Austin American-Statesman, May 13, 2004
A group of Austin investors recently began fundraising to build a new bank, and they’re trying to raise more by selling shares under a small-business filing with the SEC that won’t trade on any exchange. Robert Prentice, a professor of MSIS at the McCombs School, offered his perspective. “It simplifies the process of raising money for companies that don't want to raise a whole lot of money,” he said. “It’s obvious that a smaller business is going to be riskier than a bigger business. If you’re an investor, you have to pay more attention when investing in a newer company.”

MOOT CORP® Director Joins Schlotzsky’s Board
Austin American-Statesman, Austin Business Journal, Yahoo! Finance, May 13-18, 2004
Gary Cadenhead, a senior lecturer in management at McCombs and director of the MOOT CORP® competition, will join the board of directors of Schlotzky’s Inc. later this month. The Austin-based restaurant chain is going through changes in its storefront as well as its boardroom, as it recently introduced a range of low-carb menu options and is shifting its focus to include bakery items as well as sandwiches, soups and salads.
Read Austin Business Journal story.

Outsourcing Problems Have Several Causes, McCombs Alum Says
Wall Street Journal Online, May 11, 2004
McCombs School alumnus Ajeet Khurana (MBA ’93) regularly writes about issues facing business schools for About.com, and his latest column on outsourcing drew the attention of Wall Street Journal editors for their weekly round-up of Web offerings. Based in India, Khurana offered an insider’s perspective on outsourcing challenges. The reason U.S. consumers are sometimes faced with substandard service from Indian firms, he wrote, is not due to a lack of English fluency or employee laziness, it is because companies are understaffed and U.S. companies are too obsessed with lowering costs to demand high quality. He also said that some Indian companies alter their employees’ resumes to bring in more business. Khurana commended GE, one of the largest U.S. outsourcers, for maintaining high quality service.
Read About.com article.

Starkly Real Ethics Lessons Spring From Simulation
Wall Street Journal, May 10, 2004
McCombs School students learn ethics in the classroom, but will they really apply these lessons in their business careers? Steven Tomlinson, a finance professor who is also an award-winning playwright, wanted to know, and so did Scott McCartney of The Wall Street Journal, who dedicated a 2,200-word article to profiling the dramatic experiment that Tomlinson concocted to test MBA ethics in action.

With the help of a video game designer, soap opera scriptwriter and corporate executives, Tomlinson created the Executive Challenge, a “Sim City for the business world,” to test MBA students on the practical application of business ethics. Three student teams played the game for three days, facing a series of simulated yet tough decisions about the financial, legal and ethical aspects of fictional multinational business. The goal was to be the best-performing company and win $11,000 in prize money. The process proved surprising and even alarming to some participants, who talked loftily about ethics in the classroom but behaved differently when real money and success were on the line.

“What’s scary is that I never thought I’d make choices that way,” said David Marye, the chief ethics officer for a team that opted not to pull its virtual workforce out of Indonesia despite terrorist threats. The decision resulted in the in the death of 350 factory workers. “We didn’t protect our people,” said Marye. The chief executive officer of his company chalked it up to a learning experience. “I don’t think we regret our decisions,” Vivian Rhoads said. “We learn from them.”
Read Wall Street Journal article.

MOOT CORP® Ventures Turn Real These Days
Austin American-Statesman, May 6, 2004
MOOT CORP began as a purely intellectual exercise, with the winners of the first five competitions leaving their businesses just as they found them—nonexistent. For the past few years, however, MOOT CORP winners have launched their ventures and become successful entrepreneurs. The two McCombs School groups from this year’s competition are both hoping to make their projects into full-fledged businesses by collecting seed money from business plan competitions and venture capitalists. One of the teams, uShip.com, already has their business underway and has big plans for the future. “We have all turned down jobs to do this,” said Mickey Millsap, the executive vice president of the group. “This is a shot to take a chance at something we believe in.”
Read Austin American-Statesman article (requires free registration)

McCombs School to Host Entrepreneurship Academy for High School Students
San Antonio Express News, May 5, 2004
Columnist David Hendricks outlined a new program that is trying to bring business knowledge to disadvantaged San Antonio youth. Entrepreneurship is not as high a priority among Hispanics as it should be, he says. Former San Antonio Mayor Henry Cisneros agrees, having taken a noted interest in entrepreneurship during his tenure as chairman of the San Antonio Hispanic Chamber of Commerce. The chamber and the Kauffman Foundation chose the McCombs School as the site for a summer entrepreneurial “boot camp” that, if all goes according to plan, will begin serving disadvantaged high school students in 2005. The students will stay in university dorms and learn about accounting issues and economic trends from faculty members, while reading the Wall Street Journal every day and engaging in hands-on marketing projects.
Read San Antonio Express-News article

MOOT CORP® “Gold Standard” in Competitions
National Post, May 3, 2004
In an article outlining Canada’s business plan competitions, the McCombs School’s MOOT CORP was deemed “the gold standard.” The article detailed the ways that Canadian schools can earn a coveted spot in the competition. MOOT CORP “can give you a real sense of whether or not your idea is going to work,” said Kevin Michaluk, a business student at the University of Manitoba’s Asper School of Business, whose technology company PlasiaTEK sprung from a business plan competition and made it to the MOOT CORP. Michaluk said the valuable feedback students receive is just as important, if not more, than the chance at earning start-up money.

Business Leaders Want a Little Respect for 'Insourcing'
Austin American-Statesman, May 2, 2004
By now, nearly all U.S. workers have heard about offshoring, the growing practice of sending jobs to India, China and other low-wage countries. But business leaders are frustrated by what they say is a lack of appreciation for "insourcing," their term for Americans working in the U.S. offices and factories of foreign companies. Three McCombs MBAs talked about their own in-sourcing experiences-to-come this summer when they will be taking internships in Texas with the India-based consulting firm Infosys.
Read Austin American-Statesman article (requires free registration)

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