Ross Featured In the News - Week of November 17
Week Ending Nov. 17
Nov. 13 - Financial Times - Only 14% of Voters Say Joe Biden Has Made Them Better Off (Erik Gordon)
The new monthly poll conducted for the Financial Times and the University of Michigan’s Ross School of Business will seek to track how economic sentiment affects the race for the White House. In 1980, Republican Ronald Reagan famously asked voters whether they were better off than they were four years earlier, setting the stage for his landslide victory over incumbent Democrat Jimmy Carter.
“Every group — Democrats, Republicans and independents — list rising prices as by far the biggest economic threat . . . and the biggest source of financial stress,” said Erik Gordon, a professor at Michigan’s Ross School. “That is bad news for Biden, and the more so considering how little he can do to reverse the perception of prices before election day.”
Nov. 15 - Politico - Clean Energy is Booming. So Why Are Manufacturers Struggling? (Andrew Hoffman)
Many countries, led by the U.S., have largely pursued climate policies aimed at stimulating clean energy technologies with promises of subsidies and financial guarantees. But the industries’ recent financial woes raise questions about relying exclusively on incentives to drive emissions reductions, especially when many investors still have strong incentives to put their money into fossil fuels, said Hoffman of the University of Michigan.
“It’s not just unmitigated greed,” he said, noting retirement accounts and college funds rise and fall on market returns. The dynamic points to the need for more government regulation to help lower the use of fossil fuels.
“We’re going to have some tough decisions to make,” Hoffman said. The question, he said, is "who is going to have the stomach for that?”
Nov. 14 - Psychology Today - Be the Sun, Not the Salt (Kim Cameron)
Professor Kim Cameron from the University of Michigan Ross School of Business has studied this phenomenon for decades. His work showed that exceptional organizations have three times the number of what he calls “positive energizers” on their teams. The effect of these people on others is that they make people feel great.
He describes this phenomenon as the heliotropic effect. The heliotropic effect is the natural pull toward life-sustaining energy, which is why a plant leans toward the sunlight. Well, we’re like that, too. We’re drawn to people who emit positive energy that helps us flourish. Surrounding ourselves with, or being, these kinds of people boosts well-being and productivity.
Nov. 14 - The Wall Street Journal - 5 Holiday Shopping Tips from Economists That Will Save You Money (Scott Rick)
More of an online shopper? Scott Rick, a marketing professor at the University of Michigan who does research in behavior, recommends creating what he calls “friction” to slow down the process. One step he recommends: deleting your credit card information from the account so you can’t do one-click purchases.
“If you don’t have your credit card info saved within your account,” he says, “the prospect of getting up and finding your wallet can prompt you to second guess whether you need to make this purchase right now.”
Week Ending Nov. 10
Nov. 8 - CNN - Outcome of Trump’s Fraud Trial Could Have ‘Seismic’ Impact on His Business (Will Thomas)
Not only could Trump be subject to hefty financial penalties and lose control of his flagship properties dotting the Manhattan skyline, the trial also could significantly reshape his business empire, said Will Thomas, assistant professor of business law at the University of Michigan’s Ross School of Business.
“It’s between severe and seismic” as to the effects on Trump’s businesses, Thomas told CNN on Monday.
Nov. 7 - ABC News - What Caused the WeWork Bankruptcy, and Why Does it Matter? (Erik Gordon)
Demand for shared office space never reached the level necessary to match the large acquisition WeWork made. That lack of tenants in turn meant WeWork couldn’t offset those losses or make their sizable rent payments on the office space they’d leased, Erik Gordon, a business professor at the University of Michigan who has studied WeWork, told ABC News.
"They mistakenly thought that signing leases gave them tons of assets," Gordon said. "There's tons of empty office space, so having nailed down office space made no sense."
“The most fundamental tenet of a well-functioning market economy is that companies are rewarded for treating their customers well and penalized for treating them poorly,” said Claes Fornell, founder of the ACSI and the Distinguished Donald C. Cook Professor (emeritus) of Business Administration at the University of Michigan. “This is still true with respect to customers, as companies with high customer satisfaction continue to have greater revenue growth than competitors with lower ACSI scores. Accordingly, the current stock market anomaly is unlikely to last.”
Nov. 5 - Axios - Gen Z Shakes Up Workplace Communication (Jeffrey Sanchez-Burks)
Older colleagues notice "just how frank, non-deferential and empowered younger generations are in speaking their mind, calling things out" at work, said Jeffrey Sanchez-Burks, a professor of business administration at the University of Michigan. It's even motivated them to do the same.
Nov. 5 - KCBS-AM (Radio) - White Collar Crimes: How They’re Harming the Public and Economy (Will Thomas)
The term ‘white-collar crime’ was coined in the late 1930s, by U.S. sociologist Edwin Sutherland. While a common misconception that business-related crimes are somehow victimless, Will Thomas, Assistant Professor at the University of Michigan Ross School of Business, says white-collar crimes are harmful from an economic impact perspective with negative outcomes for society on the whole.
Week Ending Nov. 3
Nov. 3 - Detroit Free Press - Biden Calls for Crackdown on Junk Fees That Trash Retirement Savings Plans (Dana Muir)
Yet, many consumers don't realize that the advice given isn't always driven by the best interest of the saver.
"If the advisers are winning a contest to go to the Bahamas or Hawaii, then that's paid for by the retirement saver's assets," said Dana Muir, a professor at the University of Michigan Stephen M. Ross School of Business and a national expert on pensions and retirement.
"And I think the retirement saver's assets should be invested so that the retirement saver can go to the Bahamas or Hawaii, not so the investment adviser can."
Muir, who worked with a consortium of those supporting the added regulation, called the proposed changes "tremendously important" to ensure that advisers don't exploit existing loopholes.
Nov. 1 - Marketplace - WeWork Could Declare Bankruptcy Anytime, But How is it Still Around? (Erik Gordon)
Professor Erik Gordon at the University of Michigan has used WeWork as a case study in business classes.
“I think there are two sort of surprise miracles here. One, that this company was able to get so big to begin with, and two, that it has survived on fumes all these years,” Gordon said.
Nov. 1 - ABC 7 - Tesla Autopilot Not Responsible for Crash That Killed Driver on 215 Freeway in Menifee, Jury Finds (Erik Gordon)
Last month, the company disclosed that federal prosecutors have expanded investigations into Tesla beyond the electric vehicle maker's partially automated driving systems, and they have issued subpoenas for information instead of simply requesting it,
The probe is "a lot wider than just looking at Autopilot and FSD features," said Erik Gordon, a University of Michigan business and law professor. "The DOJ often starts with a formal written request and escalates to administrative subpoenas if it thinks it isn't getting full cooperation," he said.
Oct. 30 - Associated Press - U.A.W. Reaches Deal With General Motors That Ends Strikes Against Detroit Automakers Pending Votes (Erik Gordon)
Analysts say the deals run the risk of forcing the automakers to raise prices beyond those charged by competitors with nonunion factories. And they come at a time when the auto industry is trying to fund a costly and historic shift away from the internal combustion engine to electric vehicles.
“The three tentative agreements show the UAW’s power and the car companies’ weakness,” said Erik Gordon, a business and law professor at the University of Michigan. “The companies are trying to figure out how to transition to EVs without losing too many billions of dollars, and now face a huge bump in labor costs for the products that will finance the EV transition.”
Oct. 28 - New York Times - U.A.W. Reaches Tentative Deal With Stellantis, Following Ford (Erik Gordon)
Erik Gordon, a business professor at the University of Michigan who follows the auto industry, said the new contracts impose higher labor costs on the Detroit manufacturers as they are ramping up production of electric vehicles and are competing with rivals who operate nonunion plants.
“The Detroit Three enter a new, dangerous era,” he said. “They have to figure out how to transition to EVs and do it with a cost structure that puts them at a disadvantage with global competitors.”
Week Ending Oct. 27
Oct. 27 - Yahoo Finance - Taylor Swift Effect: 4 Ways Pop Star Gives Economy a Boost (Marcus Collins)
Marcus Collins, University of Michigan Ross School of Business Marketing Professor, broke down the marketing power of Swift, which is fueled by her loyal fans. Collins explained, "Her personhood becomes a way by which they represent their identity. And that's super powerful."
Oct. 26 - WJR - WJR College Tour (Blaire Moody-Rideout, Loren Townes, Gretchen Spreitzer, Christie Baer)
Join “JR Morning with Guy Gordon, Lloyd Jackson, and Jamie Edmonds” as we visit Michigan Ross for an in-depth look at the culture and curricula that are shaping the minds of tomorrow.
Oct. 26 - Detroit News - The UAW Wanted to Restore What it Lost. Here’s How the Ford Deal Measures Up (Cindy Schipani)
Perhaps the biggest miss for the union was the hope to extend pensions and health care coverage in retirement to all autoworkers. Workers hired after 2007 have 401(k)s. The request alone would have cost the companies billions of dollars, according to analysts. Ford agreed on improvements for current retirees, workers with pensions and those who have 401(k) plans.
"It isn’t a surprise," said Cindy Schipani, a business law professor at the University of Michigan. "That gets to be so expensive and so unpredictable. It sounds like a fair settlement.
“It’s not everything," she continued. "I don’t think the auto companies could give back what was lost. Look what happened. They went into bankruptcy. They can’t set themselves up to have a repeat of the disasters of the past. It does make sense to give more right now, especially in light of what CEO and executive pay looks like.”
Oct. 23 - Fox News - Britney Spears' breakout hit '...Baby One More Time' turns 25: How the Singer Changed Pop Culture (Marcus Collins)
Dr. Marcus Collins, marketing professor at the Ross School of Business at the University of Michigan and author of the best-selling book "For the Culture," explained there were a lot of "conditions at play" primed to make Spears a star.
"It was in a moment where R&B and rock were sort of the dominant musical genres," he told Fox News Digital. "We hadn't quite experienced the Orlando Pop sound that came from Britney Spears, NSYNC, Backstreet Boys and the like. So, when the sound came in, it felt quite distinctive and in many ways disruptive."
Oct. 23 - Barron’s - Corporate Insiders Are This Close to Sending a Sell Signal (Nejat Seyhun)
Corporate insiders—a company’s officers, directors, and largest shareholders — presumably know a lot more than outsiders about their companies’ prospects. The Securities and Exchange Commission requires them to immediately report whenever they buy or sell shares of their companies’ stock, and many on Wall Street slice and dice those reports to detect any trends in insider behavior.
Two of these slicers and dicers are Nejat Seyhun, a finance professor at the University of Michigan, and his son Jon Seyhun, who has created the website InsiderSentiment.com to put his father’s research into practice. Unlike some others who mine the insider data for insights, the Seyhuns focus only on transactions executed by corporate officers and directors. That’s because Nejat Seyhun found in his research that the largest shareholders don’t, on average, have any privileged insight into their companies’ prospects.