Synergy

• The euro – a currency in crisis• The cost of being a sporting host• Toyota – facing up to its problems

SynergyIssue 10 Spring 2010www.cardiff.ac.uk/carbs

A caring consultantCardiff alumnus Jacqueline Chimhanzi on combining a career with social projects

Increasingly, business schools and universities will look to develop corporate sponsorships and fundraising programmes for survival in a competitive marketplace. We are extremely grateful to Eurex and OSTC who have recently entered into a sponsorship agreement with our Trading Room – details of the partnership are available on page 17.

I remain, however, very optimistic about the future of Cardiff Business School – and this optimism, for the most part, is built upon the excellence of our research. This edition again illustrates our ability to link theory to practice. Dr Calvin Jones has given expert evidence on the economics behind sporting events (page 14). Professor Kent Matthews proves the link between the price of beer and violence-related injury (page 5). Dr Michael Arghyrou’s thoughts on a possible ‘two currency EMU’ are timely (page 9) and Dr Kate Daunt’s research provides service industries with an insight into consumer misbehaviour (page 7). Our ability to educate those who excel in their careers is demonstrated in the phenomenal achievements of Dr Jackie Chimhanzi, an alumnus of the School’s MBA and PhD programme. Her story is featured on page 10.

Welcome to the Spring edition of Synergy.

I remain very optimistic about

the future of Cardiff Business School”

This edition of Synergy is my last as Dean of Cardiff Business School: I step down from the role in August this year following five years in the position. The role of Dean of a Business School is not without its challenges, but with the support of an enthusiastic team of faculty and support staff members, we have achieved many successes over the last few years, not least the excellent RAE result of 2008.

I stand down at a time when the future for higher education within the UK seems, at least financially, uncertain. The sector faces a number of Government funding cutbacks in the coming years. Universities will struggle to maintain the equilibrium between providing a quality education system that is open and accessible to all who can benefit from it, whilst attempting to operate within budget constraints.

A fond fArewell from The deAn of CArdIff buSIneSS SChool

Professor robert mcnabbDean

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editorial

AlCohol SponSorShIp BAn would hAve ‘lIttle effeCt’ on underAge drInkIngFindings show no significant correlation between sports sponsorship and drinking patterns

tv AdS mAy Be more effeCtIve If we pAy leSS AttentIonStudy shows that uninterested viewers leave themselves more open to the advertiser’s message

Budget SupermArketS on wInnIng StreAkAldi and Lidl knock “big four” off the top spot

vIolenCe lInk to Beer prICeAreas with lower prices of beer have a greater rate of violence-related injury, research warns

SolvIng CAr hIre dIlemmACardiff students reach finals of the McGinnis Venture Competition with revolutionary product

CArdIff logIStICS 2nd moSt produCtIve In the worldTransportation Journal shows that Cardiff ’s Logistics Department is one of the most productive in the world

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pArtnerS In profIt – the john lewIS StoryThe importance of employee relations to the John Lewis Partnership

BuIldIng A BoArdDiscover the dynamics of a successful board

the CuStomer ISn’t AlwAyS rIght Research explains the reasons for customers behaving badly

the glASS CeIlIng – StIll holdIng StrongThe financial services sector is still blighted by gender pay divide

the euro – A CurrenCy In CrISISRadical action might be needed to save eurozone from further destabilisation

the CArIng ConSultAntJacqueline Chimhanzi, a Cardiff Business School alumnus, talks to Synergy about her successful career

gettIng to the Bottom of the toyotA CrISISAnalysis of the impact of recent negative media coverage and customer unease

the CoSt of BeIng A SportIng hoStWhat effect do large-scale sporting events have on the local economy?

we CAn work It outHow collective ideologies can change employee relations

InternAtIonAl StudentS enjoy CArdIff experIenCeStudents from across the globe share their experiences of CBS

StreetS of ShAmeStrategic marketing students have created a campaign to reduce smoking-related litter

trAdIng room fIndS fInAnCIAl BACkIngEurope’s largest derivatives exchange has sponsored the School’s Trading Room

IntervIewSynergy talks to Robert McNabb, the School’s Dean, who is standing down in August

whAt’S onYour guide to CBS’s events, with details of high-profile speakers and academics

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Synergy magazine is produced in association with Abstract Associates.

Unless otherwise indicated, copyright in this publication belongs to Cardiff University. This document can be made available in alternative formats upon request. It will shortly be available on our website www.cf.ac.uk/carbs. Views expressed in Synergy magazine do not necessarily reflect those of the University. The Editor reserves the right to edit contributions received. While care is taken to ensure accuracy of information, this cannot be guaranteed.

ISSN 1753-5034

Editor laura daviesImage Consultant neil davies

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Contents

n alcohol sponsorship ban alone would have little effect on youth drinking patterns, according to research by Cardiff Business School’s Dr Fiona Davies.

The study, published by the International Journal of Sports Marketing & Sponsorship, found that there were no significant statistical correlations between sports sponsorship awareness and attitudes to alcohol use.

Although boys with greater awareness of sports sponsorship were slightly more likely to drink alcohol, the extent of their engagement in sport was a much stronger predictor of intentions to drink alcohol and to get drunk than their knowledge of sponsorship.

Dr Davies explains: “Boys with sporting interests appear to be influenced towards drinking and drunkenness by the traditional macho sporting culture rather than the presence of alcohol sponsorship.

“Alcohol sponsorship does play a part in perpetuating and normalising

this culture, and so has some additional influence. But the findings indicate that banning it would have little effect on the traditional male practices of drinking after playing sport, watching televised matches with a beer in hand and so on.”

The survey also showed that involvement in sport had no impact on girls’ attitudes to drinking. “This may be because the sports which interest them are less associated with alcohol, or that they do not wish to subscribe to the traditional male sporting culture, even when they have an interest in traditionally more masculine sports,” Dr Davies notes.

The study investigated attitudes to alcohol, sport and sport sponsorship among 14/15 year olds in a typical UK city. Following initial focus group discussions, a questionnaire survey was completed by a total of 294 pupils from five schools.

The results suggest that banning alcohol sponsorship of sport would only have a significant impact if it were part of a much wider campaign designed to break the longstanding links between sport and alcohol in British male culture.

TV AdS mAy be more effeCTIVe If we PAy leSS ATTenTIon

Recent research shows that viewers pay less attention to creative television advertisements but in doing so may make themselves more vulnerable to the advertiser’s message. These findings overturn the long-held assumption within the advertising industry that advertisements with high levels of emotional content encourage viewers to pay more attention.

The study, published in the Journal of Advertising Research, used an eye-tracking device to measure the real-time attention paid to a range of adverts with different levels of emotional content. Results showed that viewers paid less attention to likeable, creative adverts, and more attention to factual information-giving adverts, even when they didn’t like them. By not paying as much attention, viewers are less able to counter-argue what the advert is communicating, leaving themselves more open to the advertiser’s message.

The research was undertaken by Cardiff Business School’s Dr Paul Bottomley, along with researchers from the EM-Lyon Business School and Bath School of Management.

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budgeT SuPermArkeTS on wInnIng STreAk

The trend towards budget supermarkets is set to continue, according to Cardiff Business School’s Professor Emmanuel Ogbonna.

A new survey by consumer magazine Which? shows that Aldi and Lidl are now ahead of the “big four” in terms of consumer satisfaction.

While they were beaten by upmarket supermarkets Waitrose and Marks & Spencer, Aldi and Lidl finished ahead of Tesco, Asda, Sainsbury’s and Morrisons.

Professor Ogbonna says: “It is not surprising to see Aldi and Lidl where they are in the survey and I think the trend is set to continue.

‘lITTle effeCT’ on underAge drInkIng

AlCohol SPonSorShIPbAn would hAVe

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Cardiff Business School has the second most productive logistics department in the world, according to a new ranking. The study, published in the Transportation Journal, shows that Cardiff is one of the most productive universities in the world in terms of publications in the fields of logistics, supply chain management and transportation.

Professor Pete Marlow, Head of Logistics and Operations Management, notes: “The research in this paper reflects extremely well on the professionalism and wide-ranging knowledge of the LOM staff and the recognition is well deserved.”

CArdIff logISTICS 2nd In world In rAnkIngS

department data on violent crime, we were able to develop a model that explains violence-related injury across regions in England and Wales in terms of the real price of alcoholic beverages.”

The study also confirms that there are

clear seasonal patterns, with violence-related injuries higher in summer and during major sporting events that engage the national population.

Professor Matthews continues: “We also found evidence of a North/South divide: in general, the Midlands, Wales and the North have a higher violence-related injury rate than the South, including London. “

The Violence and Society Research Group has been awarded the Queen’s Anniversary Prize for Higher Education for its pioneering work on late-night violence in cities.

budgeT SuPermArkeTS on wInnIng STreAk

MBA students who have designed a product set to revolutionise the car rental industry fly to Pittsburg next month, having made the finals of the McGinnis Venture Competition.

As part of their MBA Business Plan, the group of eight have designed a ‘card and pin’ system which could effectively control the use of a hire car. They explain: “At the moment car hire is difficult to control – there is no way of stopping customers taking cars for longer than their contract allows. It is difficult to monitor the behaviour of staff who may use the car inappropriately, undertaking personal trips en-route to picking up clients.

“This device means that people will have to honour car rental agreements as the car will be controlled by a time-controlled card. Drivers will be given warnings that their time is due to expire and can ring the hire company to get a top-up on their card, giving them a new pin to extend their time. Without a card and a correct PIN, the car will not start.

“The cards will record customer’s historical data, maintain a log of the car’s physical condition before and after each hire and will record fuel and mileage use. This latter information could help predict future trends of usage, helping the industry forecast for changes in user behaviour.”

The device is patented in the Middle East and is also patent-pending in the UK. The team plans to take the device to market when they have finished their MBAs and are working with engineers to develop a prototype.

Speaking of their experience in creating the MBA Business Plan that sparked their idea, the students explain: “The Plan has really helped us take the information from the application phase and put this into a practical scenario. What looks simple in theory is actually not as easy as it sounds and we’ve learnt to cover every eventuality.”

SolVIng CAr hIre dIlemmA

A one per cent rise in the price of an alcoholic drink would result in 5,000 fewer attendances at emergency departments for treatment following violence-related injury, according to a study by the Violence and

Society Research Group.

The study also found that areas with lower prices of beer have a greater rate of violence-related injury.

The School’s Professor Kent Matthews explains: “Using emergency

VIolenCe lInk To beer PrICe ProVed

“These shops will always do well for the simple reason that they are aiming for a different clientele who are always watching their pockets.

“One thing the recession has done is make people reassess value. Everybody is talking about value and people are responding by changing their habits. If you find something that works for you, you are unlikely to go back to the other side.”

Professor Ogbonna explains that one of the reasons customer satisfaction at the “big four” has dropped is because the recession has led to a general mistrust of large institutions among shoppers.

“If you asked me 12 months ago I would have said Tesco would be top of that list, but there is a perception now that some of these huge retailers are becoming too big and people are rebelling against that, just as they are doing with any type of super-institution such as banks and the Government,” he notes.

“The ‘big four’ are visible wherever you go and sometimes that can put consumers off. Psychologically, that can make consumers think they are taking over the world.

“The reason that shops like Waitrose and Marks & Spencer are doing well is because, despite the fact we have been going through a massive recession, people actually have more disposable income, largely because of a serious reduction in rates of inflation. So it has become cheaper to go to a supermarket that is renowned for its quality goods.”

there is a perception that some of these

huge retailers are becoming too big and people are rebelling against that

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racey Killen, Director of Personnel for the John Lewis Partnership, visited Cardiff Business School recently to share the success story behind the firm and explain how a £7bn business shares its success with its 69,000 partners, all of whom are employees of the firm.

Speaking in front of an audience of business people, students and academics, Killen explained the philosophy of John Spedan Lewis, the man who created the Partnership in 1929 and who believed it should be run for the benefit of its workforce rather than for remote shareholders. With this strategy, Spedan Lewis ensured that the business would be held in trust on behalf of its partners.

The Partnership he created over 80 years ago is still intact today – each employee is a partner

of the firm and is paid an annual share of the profits. Partners have a voice in the running of the Partnership, with five partners elected to the board to represent the employees’ interests.

The Partnership offers generous benefits, well in excess of those required by law, including a final salary pension scheme; the kind of benefit that many businesses have withdrawn in recent years.

Killen said that the power of the Partnership lies in the feeling of empowerment it gives to workers and their identification with the firm.

Preferring to rely on this strategy, John Lewis avoids the kinds of bonus scheme that have proved controversial in other parts of the economy. According to Killen: “Incentivising the individual will potentially create tensions and we are very clear that, if an individual is after personal wealth generation, they are in the wrong business.”

She explained further that: “The Partnership gives and it expects back – partners have rights but they also have responsibilities. By balancing the needs of individuals with the needs of the collective, we improve staff loyalty and worker productivity.”

Professor Edmund Heery of Cardiff Business School notes: “The John Lewis Partnership is one of the most successful service businesses in the UK and also one with a highly distinctive set of employment practices. John Lewis is an object lesson in how important human resource management is and of the value of a mutual gains approach.”

Tracey Killen explains why the John Lewis Partnership is renowned for its employee relations as much as its business success

Teach employee is a partner of the

firm and is paid an annual share of the profits

Partners in profit:The

STory

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business focus

n 2000, CEO magazine picked Enron’s board of directors as one of the top five in corporate America. By the end of 2001, Enron had filed for the biggest

bankruptcy case in US history. What had previously looked like an ideal board lineup with a perfect candidate in every seat was judged to have failed to provide sufficient oversight and restraint to top management excess.

The business talent on Enron’s Board was staggering yet, ultimately, the board failed to act as a team. It became a rubber stamp, a pawn of the CEO, incapable of using its power effectively. Lack of time, lack of information and, paradoxically in such a group of individuals, lack of independence, diversity and knowledge meant the board was destined to fail.

buIldIng A SuCCeSSful boArdResearch into successful and unsuccessful boards provides us with some insight into the make-up of a successful board.u Don’t let your board become the pawn of your CEO: the board should safeguard the interests of shareholders, monitor management performance, guide the corporate mission and enhance

buIldIng A boArd – IT’S A TeAm gAmeAs the Enron disaster illustrated, a team of

individually brilliant business people doesn’t necessarily make a great board. Dr Taman Powell reports on the key components of a

successful board

corporate reputation.u Maximise the level of knowledge: collect individuals with a lot of knowledge individually and minimise the level of knowledge overlap between members. Essentially, create a diverse team.u Avoid communication issues and conflict: diverse individuals will not always share the same ‘world-view’. Encourage members to communicate frequently and consider allowing them to work together for longer by increasing the time served on the board.u Use members’ networks: use their access to other expertise to broaden your knowledge base.u Time and information matters: try to give the board time to do its job effectively. Avoid giving them too little information, or so much that they cannot process the important parts.In summary? Boards can become better by deciding on the role that they are supposed to fulfill, taking their tasks seriously and by minimising the hurdles that stand in the way of the board in doing its job effectively. Avoiding a ‘see-no-evil, hear-no-evil culture’ will help avoid another corporate disaster on the scale of Enron.

onsumer bad behaviour in the service industry is more prevalent than most would imagine,

according to new research by Dr Kate Daunt.

“We examined the behaviour of customers in bars, hotels and restaurants,” she explains. “Overwhelmingly, consumer-based studies talk about customer misbehaviour as if it’s rare. We found that it’s actually very common, that it happens in service environments more than once a day – and that it’s likely that at some point in our lives, all of us have behaved in a dysfunctional way, either intentionally or otherwise.”

The study examined the causes of customer bad behaviour, categorising it as behaviour that the organisation, staff and other customers would find unacceptable.

“We found three main causes of bad behaviour,” says Daunt. “The first was

psychological obstructionism, by which we mean personality traits of the individual, a predisposition to behave badly. Other studies in this area have identified this as the primary cause of bad behaviour.

“But we also found that the servicescape could encourage consumers to behave badly – the physical design of the property, its exterior, the area in which it was situated, even the air

quality could have an impact on how consumers behaved.

“Customer dissatisfaction with service and feelings of inequity also sparked dysfunctional behaviour. This is a separate phenomenon to that of psychological obstructionism, because the consumer reacts to the feeling of being wronged, which to them appears a rational response.

“Interestingly, we discovered that alcohol and levels of customer intoxication were not big contributing factors to dysfunctional behaviour.”

The study has major implications for the service industry, adds Dr Daunt. “This study shows that organisations can control the levels of dysfunctional customer behaviour by making alterations to the service environment and by altering the type of service offered. This gives them the opportunity to manage proactively customer misbehaviour, rather than simply tolerating what is becoming an increasing problem.”

The CuSTomer ISn’T AlwAyS rIghT

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Strategy and service

– still “No improvement” has been made in closing the gender divide in pay and opportunity within the financial services sector, according to a

recent Equality and Human Rights Commission (EHRC) Inquiry.

Women in the finance sector working full time earned up to 55 per cent less annual average gross salary than their colleagues – compared to the economy-wide gender pay gap of 28 per cent. The inquiry also reveals that women are often still fulfilling secretarial roles while men progress higher up the hierarchy.

Dr Debbie Foster of Cardiff Business School was part of the academic roundtable providing solutions to the problems identified by the Inquiry. She explains: “The inquiry found that there is still gender segregation by job type within financial services.”

The high proportion of workers in the 25-39 age group – the age at which employees tend to have children – also makes it harder for women to have a viable career in this sector.

“While some companies have programmes to promote gender equality, such as flexible working practices, uptake of these programmes might not be encouraged, meaning that they are little more than token gestures,” adds Dr Foster.

Often women within the sector appeared to

Within the City the disparity in wages was the most stark, with men receiving five times the performance pay of women

The glass ceiling

holding strong

be less qualified than their male counterparts. Dr Foster explains: “The financial sector often expects employees to pursue postgraduate qualifications. Employees tend to do so in the evening, rather than being afforded time off work. As women tend to be the primary carer in the home, they are often precluded from opportunities to develop their skills.”

The inquiry also highlights that the loyalty of female workers is not rewarded. “It is generally accepted that women are more loyal workers, but as they are less likely to move jobs they are often passed over for promotion. Often their family life means that they cannot work long hours and research shows that ‘presenteeism’ – physically being present in the office regardless of productivity – leads to promotion.”

The disparity in wages was the most stark in the City, with men receiving five times the performance pay of women.

The EHRC’s recommendations for change include incorporating equality and diversity into organisational and individual objectives, ensuring maternity, paternity and parental support schemes are in place, and undertaking annual equal pay audits and publishing the data.

Dr Foster says: “Greater pay transparency would be a good first step towards tackling the inequalities in earnings – knowing what contemporaries earn would provide a basis for challenging inequality.”

The gender pay gap is holding steady in the UK, particularly in financial services, and a recent report shows that little is being done to close the divide

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gender divide

two-currency European Monetary Union (EMU) might be the option of last resort to save the eurozone from further destabilisation, two academics from Cardiff Business School and Nottingham University

have recently warned. Under their proposal, a strong euro currency

would be operational in core countries such as Germany, while a weak euro would be the currency of periphery countries. The European Central Bank (ECB) would control both currencies.

Dr Michael Arghyrou explains: “If every other plan fails, the two-currency proposal could ensure that the EMU is not destroyed by countries forced to abandon the euro and would help restore market faith in the European integration project.

“Faith needs to be restored in the euro and all parties are agreed that something needs to be done. Bailing out troubled countries might stretch the patience of taxpayers in core countries to breaking point. Asking the IMF to intervene

will signal to the markets that the EMU cannot cope with its problems. Leaving countries

The euro

Unless faith is restored in the euro a two-currency system might have to be introduced. Dr Michael Arghyrou spoke to Synergy

faith needs to be restored in the

euro and all parties are agreed that something needs to be done

to go bankrupt will mean, in addition to great hardship for them, that others lose money through lost investments. Reforms within struggling economies are necessary – but these countries have had 15 years to reform and haven’t implemented the necessary change. There now need to be painful reforms, which we fully support, but in some countries, as we have seen in Greece recently, societies may not be prepared to shoulder these burdens.

“The two-currency solution would ensure that countries with strong economies are not responsible for bailing out others, while giving struggling economies breathing space to recover and implement reforms without undergoing severe hardship.

“The core economies such as Germany would not lose their investments in periphery countries and control of monetary policy would remain in the hands of the ECB, guarding against high inflation and ensuring that monetary policy maintains its credibility.

“Whilst it is unlikely that in its present position, the EMU will allow any more countries to join the euro, the weak-currency euro would give aspiring countries such as the Czech Republic a realistic opportunity to join the EMU in the future.

A“At the moment there is what economists call

fundamental indeterminacy in the system: the markets know that there are problems with the euro but European governments have not been able to present them with a credible endgame solution. Understandably, this makes markets nervous. The prospect of a two-currency EMU would make it clear that there is a binding sanction system – countries who do not keep control of their finances will be moved to the weak euro zone. This would signal the credible endgame markets are asking for and would help stabilise the euro.

“We hope that the situation improves in the future, but if not, the two-euro currency plan might be the last resort necessary to save the EMU.”

The Option of Last Resort: A Two-Currency EMU by Michael Arghyrou and John Tsoukalas, is available in full at www.roubini.com

– a currency in

crisis

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The eurozone

Q: Tell us a bit about your career to date?I defended my PhD in 2000 on June 29 and went on to lecture in marketing at Aberystwyth University for four years. After my time in Wales I relocated to South Africa and joined Added Value, a strategic marketing agency and part of the global WPP group. I then worked in internal marketing, aligning employee behaviours with brand values. I am now working for Deloitte Consulting, I joined the company in 2007.

jacqueline Chimhanzi, Cardiff Business School alumnus, talks to Synergy about

the challenges of combining a consultancy career with a commitment to

social projects in her native Zimbabwe

Q: you studied for your first degree, your mbA and your Phd at Cardiff – why this university?When I lived in Paris the commute from home to school was an hour’s drive, each way and it was clear to me that I did not want to attend a university in a big city. Cardiff was appealing for its reputation as a university, its size as a small student town and its renowned Welsh friendliness. Both the University and town lived up to my expectations and I have very fond memories of both. I would very much like to visit again.

Q: you are involved in a number of projects outside of your professional life...

I am part of New Faces New Voices – a network of professional women under the leadership of Mrs Graca Machel Mandela – committed to the financial empowerment of African women. We recently hosted the first African Women’s Economic Summit in Nairobi in partnership with the African Development Bank. The conference brought together leaders in the financial sector, policy makers, regulators and key decision makers to come up with concrete and measurable ways in which to increase women’s access to finance as consumers and


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The caring consultant

I am committed to setting up some sort of a microfinance facility in Zimbabwe for women

also to increase female participation within financial institutions themselves. Following the global crisis, we feel there is an opportunity for women’s voices to be heard in order to find sustainable solutions to the African development challenge. Africa will only develop when women are no longer marginalised.

I was also recently selected to join the 2010 Archbishop Tutu Leadership Fellowship programme and will spend some time at Oxford University. It is an intensive programme aimed at grooming leadership for Africa. Leadership in this context relates to giving back by empowering and uplifting one’s society.

Q: what has been your proudest moment so far?Watching my sons perform on stage at their crèche Christmas concert. It was the first time that I had an outside-in perspective of them, to see them holding their own and showcasing their talent. To raise an individual is an awesome responsibility but deeply rewarding.

Q: what is the greatest ambition that you are yet to achieve?I heard Professor Mohammed Yunus give the Nelson

Mandela lecture in 2009. He spoke of how lives have been transformed for the females of Bangladesh by the Grameen Bank. Females’ outlook and perspective shifts amazingly as they emerge from poverty and become empowered and self-reliant. Zimbabwean women are incredibly hardworking, enterprising and resilient, and have endured an economy of 5m% inflation with much dignity. I thought to myself, if given a fighting chance at life, what are these extraordinary women really capable of? So I am committed to setting up some sort of a microfinance facility in Zimbabwe for women… maybe, not a bank initially!

Q: how do you juggle your many responsibilities? With much difficulty! I almost always feel compromised and guilty. It really isn’t easy for working mothers. But as you grow older, I think one naturally becomes more selfless. Women are predisposed to put everyone else’s needs ahead of their own. It sometimes feels like a part of me is in suspension. I have to make conscious decisions to only turn on my laptop if I really have to, once the boys have gone to bed. But I am not complaining.

Q: you’ve recently agreed to become a member of the School’s mSc Strategic marketing review Panel…I am proud of my alma mater and happy to contribute to it. It is very exciting that the School is now fourth in the RAE rankings. My involvement with the panel allows me to draw on my current experiences in the corporate world. I evaluate whether the courses on offer are relevant in the ‘real’ world and look to improve the overall tenor of the programmes on offer.

Q: what advice would you give to graduates who are inspired to follow a career in consultancy and get involved with social projects?Find out what your passion is and follow that path. Until you find it, don’t be afraid to experiment and try different careers until you find your sweet spot! The reason I am motivated is because I truly enjoy what I do. I love Deloitte Consulting – it’s a great environment; very corporate but not arrogant, flexible and entrepreneurial.

Do whatever social projects you can – however small. The small actions are just as important as the biggest ones. Invest in the small-scale differences that only you can make.

Q: Is there any such thing as an average day?With consulting, each day is different. I like the diversity of the work that comes with consulting, the constant stimulation of moving across projects. Teams are configured to meet the specifics of the project so I am constantly working with different people.

Q: you pursued a Phd but chose a career outside of academia – what made you change career track?I am intellectually curious but I didn’t necessarily think that I would apply my PhD within an academic context. I wanted a fast-paced challenging environment with lots of client interaction in a results-oriented environment where you go in, fix a problem then move onto the next. I believe at some point I will go back to academia. My focus will be on infusing theory with practical elements from the vantage point of having experienced both worlds.

Q: have the things that you learnt from your Phd had an impact on your business career?Hugely, especially the skills that come with conducting research for three to four years. Academia and consulting are very complementary. There’s a way of thinking, organising information and conceptualising ideas that comes with a PhD. One’s written communication skills are developed from writing that thesis, presentation skills are enhanced through lecturing and presenting at conferences. There’s a confidence that comes with having to defend your work.

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Cover story

n February 2010 Akio Toyoda, the chief and heir of the Toyota empire, appeared before a subcommittee of the US Congress. He was there to explain how what is now the world’s largest car manufacturer could get it so wrong. Toyoda more or less admitted what many had suspected, that in its bid for growth to the world number one spot, Toyota had

perhaps taken its eye off the ball in the simple matter of its core values: quality and reliability.

In one sense the negative media coverage has been a bit harsh; in reality, cars are being recalled all the time for problems of varying severity. As the world’s largest car maker, such problems are rapidly magnified, while Toyota’s tendency to standardise components across product ranges ensured that the number of cars affected soon ran into millions. With the ‘unintended acceleration’ issue, the problem was further exacerbated by the fact that it took the firm some time to work out what the problem was. Toyota put some effort into fitting new floor-mats

toyota’s recent quality issues have prompted a spate of negative media coverage and customer unease. however, dr paul nieuwenhuis believes

the company’s willingness to face up to its problems will leave its finances intact I


CBS_Synergy

getting to the bottom of the

Toyota crisis

in the belief that these caused accelerators to get jammed. However, this turned out to be only a partial solution; gradually rusting accelerator components were the next suspect – time will tell if this diagnosis holds. The new problem of braking issues with the latest Prius were easier to solve – a software adjustment does the trick. However, doubts still remain as to the real cause of the unintended acceleration problems and the US National Highway Traffic Safety Administration (NHTSA) suspects a further, electronic problem.

With its strong and persistent quality ethos, Toyota was also perhaps not as used as some of its competitors to dealing with quality problems. In addition, the company’s emphasis has always been on new car quality. As Toyota is based in a country where cars are routinely removed from the roads and exported after five or seven years (which coincides with the very severe Japanese ‘shaken’ safety test), it has limited experience with older cars in the home market – a problem that only manifests itself in use.

Another home market factor also plays a role here. A number of years ago it was revealed that rival Mitsubishi Motors had covered up a range of safety problems to avoid costly recalls. In response to the resulting massive loss of public confidence, Mitsubishi had to reinvent itself as a company whose strategy was built on a solid and credible foundation of corporate social responsibility (CSR). Mitsubishi’s CSR leadership has allowed it to gradually rebuild its reputation and Toyota’s responsible and open approach to the problems, exemplified by Akio Toyoda’s appearance before the Committee, should be seen in this light.

A further issue is Toyota’s position in the US market, as the classic anti-Detroit – and as many ordinary Americans would see it, un-American – car manufacturer. The US car industry, once known as the Big Three (Ford, General Motors and Chrysler), took a dislike to its Japanese rivals in the 1970s when these upstarts showed not only that they could make fuel efficient cars that were reliable, but also that they

could meet the new US emissions standards with technical solutions, when Detroit had argued this was either not possible, or prohibitively expensive. Since then, a battle has been raging which has often played out well beyond the market, in the corridors of power. Although a growing number of Americans have willingly bought Japanese cars, others have seen such inroads by the Japanese as a threat to the American way. Toyota’s introduction of the hybrid electric Prius just at a time when Detroit appeared to be winning the war against electric vehicles – despite GM producing the very credible EV1 featured in the movie Who Killed the Electric Car – was also noted. That the Prius has become a green icon, beloved of celebrities, liberal intellectuals seeking to ‘save the planet’, as well as neocons unwilling to support terrorism with oil money, has further politicised Toyota’s position in the US. Many in America were therefore more than willing to join the anti-Toyota chorus. However, a quick look at what is becoming known as the ‘blogosphere’ reveals a different world; many satisfied Toyota owners have come out in defence of the company and its products.

Toyota’s reputation for quality and reliability is very strong and likely to weather this storm. The key is in how the company approaches it and, so far, it looks as though its open and willing approach to the problem informed by the principles of CSR may save it. Customers understand things go wrong, the key is how a company deals with the issues. Toyota’s willingness to admit to the problems and its apparent openness seem to work in its favour, all that remains is to solve the engineering side and bring the reality of Toyota quality back to the public’s perception. In today’s world of consumer power, CSR is linked very closely to that increasingly vital bottom line.

In today’s world of consumer

power, CSR is linked very closely to that increasingly vital bottom line

www.cf.ac.uk/carbs 13

In focus

of being asporting host

ompare the number of people due to attend the London Olympics in 2012 (a couple of million) with the 30m who visit the UK annually, and the hosting of what is, arguably, the biggest sporting event in the world begins to seem trivial.

The fact of the matter is that, when the event has gone, the money that event has brought to the city goes too; and there is no evidence to suggest that there is a causal link between hosting events and long-term economic growth.

However, that is not to say that sporting events can’t have a positive impact on the economy. Take the case of the Heineken Cup, held in Cardiff in 2006. The Heineken Cup brings in visitors largely from outside the region, who stay a relatively long time and who engage in very high levels of spending on food and accommodation. For a single day event, the return on a relatively small public sector investment is very significant. But there is little evidence to suggest that attending a sporting event tallies with repeat visits to the city that hosted it.

It is important to remain realistic about the impact that large events can have and balance this against the public spending involved in bringing

C

The cost

The numbers associated with the hosting of large-scale events such as the Olympics might seem overwhelming but, ultimately, these events are small beer to the economy, says Dr Calvin Jones

them to a region. A major problem is that there is a tendency on the part of sports bodies to be over optimistic about the impact that their event can have, while athletes are likely to support an event programme that provides them with better facilities. Politicians looking for a platform to launch a national career can also benefit from a successful pitch. It is therefore important to keep a balance in the policy (and media) debate to ensure more cautious voices are heard.

Another much-cited case for hosting sporting events is the impact these can have on social policy goals, encouraging local residents to engage in sporting activity and a healthier way of life. But events such as the Olympics are a one-off intervention into people’s lives. If increasing sporting activity is the ultimate goal of an event hosting, then there needs to be a campaign which carries on beyond the event and into the future. Moreover, if this argument is to be used, planners need to pick their sport. For example, bringing the Ryder Cup to Wales is a great opportunity to put Cardiff on the map, but golf is a largely non-cardio vascular and expensive pastime, which is still largely the premise of the white, middle-class male: perhaps not the ideal pick for an ‘inclusive’ sport-participation agenda.

Major events hosting can, with proper planning,


CBS_Synergy

features

By looking at the events as a

whole, it is possible to ensure that greater benefits of all kinds can be gleaned

Changing the collective beliefs and ideologies within organisations is an important driver for changing employment relations. Despite legal obligations and national norms, both

management and labour have much leeway to develop cooperative, contentious or market-oriented employment relations and to change specific employment relations practices.

Institutions are basically what actors – the people involved within the institution – make of them. Changing ideas and ideologies lead to a renegotiation of the institution. Put simply, ideas change institutions.

My PhD examined collective bargaining in multinational auto companies General Motors, Ford and Volkswagen in Germany, Spain and the US, allowing me to trace the changes of employment relations within and across the three countries over the last four decades.

I found that, as actors adapt to a changing socio-economic context, they develop new ideas and ideologies, which tend to change how institutions and employment relations work.

Take the case of Spain. The unions’ struggle for democracy against the Franco dictatorship meant that it seemed natural to them to fight for social improvements contentiously in the context of the new employment relations institutions. Meanwhile, managers had a paternalistic and authoritarian ideology – they had not had to deal with democratic unions during the dictatorship and they remained ideologically distant to the ideas of cooperative lean production that were emerging in Germany and the US.

Two decades later cooperative market-oriented employment relations emerged at the same multinational companies in Spain. The only thing that changed the tendency from conflict-prone employment relations to cooperative employment relations was the changing ideologies of those involved in the processes, both on the side of the unions and management, while the formal Spanish employment relations institutions didn’t change.

HR Management strategies are not universally applicable and they have to be adapted to local and

national business contexts.So when you want to

change the way in which your firm manages employment relationships, take the time to consider how the actors within your organisation think. Understanding their ideology might be the first step to finding the best solutions for your business.

provide proper legacies for cities. In the case of Barcelona, the authorities spent 90% of its budget on infrastructure and just 10% on stadia, creating the facilities that would put the city on the world map for longer than the period of the Olympics.

By looking at the events a region holds as a whole, rather than taking an ad hoc opportunistic approach, it is possible to ensure that greater benefits of all kinds can be gleaned. Cuts on public spending and greater concerns about carbon emissions mean that the days when all events are welcomed to regions regardless of proven benefits are over. A holistic, properly evaluated and policy-embedded sustainable events programme has the best chance of levering the maximum possible benefits for regions that wish to bid to host major events.

As actors adapt to a changing socio-economic context, they develop new ideas and ideologies

Dr Marco Hauptmeier advises employers to take time to understand the ideology of their employees

we can work it out

www.cf.ac.uk/carbs 1�

Research by the team showed that the Welsh public, both smokers and non-smokers, did not view SRL as a serious environmental or health issue.

The study found that a lack of clearly marked cigarette bins and the ease with which the butts could be dropped were the main reasons for dropping SRL. 76%

To share your stories with Synergy please email [email protected]

of smokers said that they would use an ashcan if one was readily available, while 65% said that if fines were enforced they would think twice about dropping cigarette butts.

The students presented their findings to the management of Keep Wales Tidy along with a complete marketing strategy to combat the problems identified in the research.

Sarah Phillpott from Keep Wales Tidy says: “The research conducted by the students was very useful to this campaign and we’ve already implemented a number of their recommendations. We

nine times more costly to remove than other kinds of rubbish.

A team of the School’s MSc Strategic Marketing students were given the challenge of creating a marketing plan to reduce the level of SRL in Wales from 90% to 80% – devising a campaign to change the behaviour of smokers in Wales.

A staggering 90% of Wales’ streets are littered with cigarette stubs, taking up to 12 years to decompose and leaking toxins that contaminate water supplies and harm marine life.

With the introduction of the smoking ban, smoking-related litter (SRL) is an ever-increasing problem, and cigarette butts are

Each year students from across the globe come to study at Cardiff Business School. Synergy caught up with a few of them to learn more about their experiences

Swetlana klassenI am a student at Konstanz University and had a couple of friends who studied in Cardiff last year. I visited them during their year abroad and so it was quite easy for me to decide to study in Cardiff.

I decided to come to study here for the language experience – writing essays in English is a really good way to develop your language skills. I also really like the way that there are plenty of opportunities to develop your other skills through the Student Enterprise unit and through other extra-curricular activities.

There’s less of a divide between lecturers and students here in the UK. Here you can knock on a lecturer’s door and ask them for help. In Germany

the Cardiff

International students

experience

the relationship is more formal, more like a teacher/pupil relationship.

A couple of things have surprised me about Cardiff. Where I first arrived I was quite shocked by the social life, where you can go out every night, where everyone dresses up to go into town and there are hoards of people out. I’m also amazed by the way that everything grinds to a halt when there’s a tiny amount of snow!

I’m having a great year and this has been a brilliant experience.

Here you can knock on a lecturer’s door and ask for help. In Germany the relationship is more formal, more like a teacher/pupil relationship

1� www.cf.ac.uk/carbs

CBS_Synergy

Social issues

Streets of shame

SRL is a major and expensive problem in Wales. Cardiff students recently tackled the issue for the Keep Wales Tidy campaign with strategies aimed at changing the behaviour of smokers

enjoy

The agreement provides much needed financial support for the School’s Trading Room, as well as providing students with the opportunity to benefit from the expertise of both companies through guest

lectures, seminars and further educational support.Professor Kent Matthews says: “The Trading Room is an

excellent facility and our students take full advantage of its availability to develop skills for a successful career in the financial service sector.

“This agreement means that the facility will be available to future cohorts of students – and that through such arrangements we can even look to expand our provision in future years.”

Michael Peters, member of the Eurex Executive Board, explains: “We are delighted to be partnering with Cardiff Business School and would like to foster the education and training of the next generation of financial markets participants. Furthermore, we look forward to sharing our industry expertise to add further value to the tremendous achievements of this world-class teaching institution.”

Currently, there are 160 undergraduates and 40 postgraduates taking modules that use the Trading Room. Members of the Financial Markets Forum which has students from Year 1 to MBA also use the Trading Room.

The Trading Room is also sponsored by the Welsh Assembly Government.

fátima lópez and patricia escobedoWe decided to come to Cardiff because we thought it would be a great place to develop our language skills – there are lots of international students here, the city isn’t too big so it feels like you get to know everyone and you can walk everywhere. We recently visited London and it’s huge, it would probably be quite difficult to make friends there. But here you can’t walk down the street without saying ‘hi’ to somebody. People are very friendly.

We’ve had quite a lot of support since we arrived and have made a lot of friends. There are lots of groups and societies to join. The main difference socially speaking is that in Spain, we don’t go out until about midnight and stay out ‘til six, whereas in the UK people go out much earlier – it makes it a lot easier to get to class the next day!

We’ve found the assignments at Cardiff a lot more difficult to complete – here you have to do your own research whereas in Madrid we write largely about our own opinion, here you also have to reference everything.

The biggest difference has been not living at home. In Madrid, most students commute in and out of university, so not living with our parents has been great! If you wanted to, you could go out every night, though here people don’t tend to go out at the weekend, the opposite of Spain.

We’ve spent time travelling a bit and have been to Bath, we’re going to Birmingham soon and we also want to go to Edinburgh. At the end of our studies we’re hoping to make a road trip and head to lots of places in the UK.

have launched a national advertising campaign with coverage on television and radio and are distributing ashcans free of charge.”

Cardiff Business School’s Dr Celine Chew adds: “Wales is a country reliant on tourism and litter

of this kind can have a significant impact on this industry. The Keep Wales Tidy campaign gave our students the opportunity to tackle a real-life problem and to apply what they have learnt in their programme to help find a solution in practice.”

the Cardiff

Cardiff Business School has recently signed a new sponsorship agreement with OSTC and Eurex, Europe’s largest derivatives exchange

Trading room finds financial backing

Cigarette butts are nine times more

costly to remove than other kinds of rubbish

Could your organisation benefit from the input of our MSc in Strategic Marketing students? We are currently looking for partner companies for this summer’s projects. Contact Dr Celine Chew: [email protected] for further details.


what has been the best thing about being dean?Without a doubt, it’s been the people that I have worked with. In general, I have been very lucky to work with so many excellent researchers, teachers, and support staff who contribute the School’s activities.

The best moment was revealing our success in the 2008 Research Assessment Exercise. Many staff met in E44, one of our seminar rooms, at 4pm. As I revealed the result I was facing the audience and saw the delight on everybody’s faces. The champagne was well deserved.

And the worst?Basically having to give up my research, the one thing that I particularly enjoy. I didn’t expect that the job was

This summer, Robert McNabb stands down as Dean of Cardiff Business School after five years at its helm. Synergy spoke to him about the experience of leading one of the UK’s best business schools

businessgoing to be as big as it is. Business schools are very large organisations these days – we have over 250 staff, we draw millions of pounds in income every year – it’s a full-time job even with all the support that I’ve had.

The most interesting person you’ve met?Baroness Helena Kennedy – we sponsored her talk at Cardiff Business Club in November and I had the pleasure of meeting her. She was inspirational – one of those people who has achieved so much.

It’s been very interesting to develop a relationship with other business school Deans, people like Howard Thomas of Warwick and Sue Cox of Lancaster. Surprisingly, there isn’t a sense of competition between us and people are very willing to offer advice.

what advice would you offer the new dean?To keep control of his diary. Allan Meredith (Senior Partner in Eversheds and member of the School’s International Advisory Board) taught me to compartmentalise my diary and reserve set times that are under my control. This advice has stood me in good stead – it’s easy to be overtaken by events otherwise.

what are your hopes for the future of Cardiff business School?I hope that it continues to produce excellent research and that its deserved reputation as one of the best Schools in the UK continues to grow. The School really is an exceptional institution and I hope to see it get the credit it deserves.

The best moment was revealing our success in the 2008 Research Assessment Exercise

CV In brIefu Co-author of Macroeconomics – European Edition with Andrew Abel (Wharton School, University of Pennsylvania) and Ben Bernanke (Chairman of the US Federal Reserve)u Held visiting academic posts at universities in Australia and Canada (Chairman of the US Federal Reserve). u Worked as consultant/adviser to a number of international and national organisations including the OECD, the UN, the Office for National Statistics (UK) and the National Audit Office (UK). u Currently a member of the Executive of the Association of Business Schools.u Main areas of research are in the areas of labour economics (including gender pay differentials in professional labour markets) and personnel economics (compensation systems and organisational performance) u Work published extensively in top economics and management journals

1� www.cf.ac.uk/carbs

experience

CBS_Synergy

A first-class

Cardiff Business School’s portfolio of conferences, lectures and social events feature high-profile speakers and leading international academics.

Events are held both at the School and at venues around the globe. Many of these events are free and open to the public. Details of all our events can be found at:

www.cf.ac.uk/carbs

Unless otherwise stated, please email [email protected] for further information.


what’s on

graduation lunchA celebratory lunch for graduating students, their friends and familydate: 14th July 2010Venue: City HallContact: Julie MeinEntry by ticket only

9th International Conference on organisational discourse: Crises, Corruption, Character and Change A conference to develop further insights into the field of organisational discoursedate: 14th-16th July 2010Contact: Tom KeenoyVenue: Vrije Universiteit, AmsterdamFurther Information: www.cf.ac.uk/carbs/conferences

one day Conference on managerial CompensationThe recent events around the credit crunch have put managerial compensation firmly back on the agenda of policy makers and shareholders alike. Recent cases in failing firms have even turned excessive managerial compensation into an issue of concern for society at large. This one-day conference brings together leading academics from across the globe. Keynote speakers include Professor David Yermack of Stern School of Business (New York University) and Lord Paul Myners, Financial Services Secretary to the Treasury.

date: 3rd September 2010Contact: Marc GoergenFurther Information: www.cf.ac.uk/carbs/conferences

22nd Accounting & business history research unit Annual ConferenceFeaturing guest speaker Marcia Annisette (Schulich School of Business, York University, Canada)date: 6th-7th September 2010Contact: Malcolm AndersonFurther Information: www.cardiff.ac.uk/carbs/conferences

Ideas at work25th Cardiff Employment Research Unit (ERU) Annual conferenceThis conference explores an often-neglected topic in employment relations: the role of ideasdate: 13th-14th September 2010Contact: Marco HauptmeierFurther Information: www.cf.ac.uk/carbs/conferences

Spencer daleChief Economist, Bank of England Spencer returns to his alma mater to deliver an alumni lecturedate: 15th September 2010Contact: Julie Mein

michael IzzaChief Executive, Institute of Chartered Accountants in England and Wales date: 24th November 2010 Contact: Julie Mein

joIn uS At

We would like Synergy to be a platform for sharing news, events and stories of general interest to Cardiff Business School faculty, students and alumni. In order to achieve this, we need your help. Please let us know of any events, stories, achievements, honours or experiences that you would like to share with your Cardiff friends.

Email your stories to:[email protected]

CArdIff buSIneSS SChool

The mSc in finance

Advanced Corporate Finance

Econometrics

Financial Derivatives

Market Structure and Trading Systems

Empirical Finance

for more information, visit www.cf.ac.uk/carbs

moduleS InClude

A new, exciting programme for those who want to improve their chances of a successful career in finance.

The MSc in Finance is a high-quality postgraduate qualification for those wishing to work for corporations, consultancies and government bodies involved with stock markets, project investment and the finance industry.

Our state-of-the-art facilities include our fully-functioning Trading Room and access to a range of leading financial databases.

Students will acquire transferable skills which are becoming increasingly valued by recruiters in the finance industry and will leave us able to conduct independent research using up-to-date and diverse datasets.

Documents

Synergy