Archive for April, 2011

Running Out of Money? Really?

April 29, 2011 Leave a comment

An exercise for my microeconomics students: take this article and re-write it in terms of budget constraints, real income and indifference curves.

Then ask: don’t Wal-Mart shoppers always “run out” of money? If everything you could buy at Wal-Mart is “package X”, how would you graphically depict the change in price, income and substitution effects this article describes using everything else as Wal-Mart shoppers buy (hint: gasoline would be one item) as “package Y.”

Then graph what will happen if the CEO’s promise of lower prices is kept.


Fight of the Century, Round 2

April 29, 2011 Leave a comment

Of course, I couldn’t resist…

Categories: Uncategorized

Myths, Management Education, and Signalling

April 25, 2011 Leave a comment

Matthew Stewart makes a great case against management education, in this article that’s been around for years but is for some reason hitting the “most viewed” lists at the Atlantic nowadays.

The strange thing about my utter lack of education in management was that it didn’t seem to matter. As a principal and founding partner of a consulting firm that eventually grew to 600 employees, I interviewed, hired, and worked alongside hundreds of business-school graduates, and the impression I formed of the M.B.A. experience was that it involved taking two years out of your life and going deeply into debt, all for the sake of learning how to keep a straight face while using phrases like “out-of-the-box thinking,” “win-win situation,” and “core competencies.” When it came to picking teammates, I generally held out higher hopes for those individuals who had used their university years to learn about something other than business administration.

I love all of that, and the pages that follow, too, both having been a management consultant and currently teaching a management course.

For all his argument, though, there’s a simple answer: like most of education, it’s as much or more about the signal, not about actually adding human capital. If the signal’s going awry (“seems all these MBAs don’t really know anything about business!”) that could well be because nothing’s changed about the content of MBA courses…just that they are way more (read: too) available than they once were.

So How Does This Happen?

April 21, 2011 Leave a comment

Survey of best ESL teaching positions in the world says #5 Saudi Arabia pays ESL teachers up $50,000 a year, considerably more than #4 China. Why?

The post says (for China) you’ve got “superb food” and “great travel options,” and for Thailand, Japan and Korea things like “friendly atmosphere” and “things to do on weekends.”

I expect I’ll use this as a class example on the topic of compensating differentials.

Categories: China, Microeconomics

Managing McDonald’s

April 18, 2011 Leave a comment

A student at another university here on the 大学城 asked me for recommendations for books on McDonald’s management practices. Here’s a short reading list:

McDonald’s: Behind The Arches by John Love

Everything I Know About Business I Learned at McDonald’s by Paul Facella

None of Us is As Good As All of Us: How McDonald’s Prospers by Embracing Inclusion and Diversity by Patricia Sowell Harris

McDonald’s is one of those business that’s a victim of it’s own success: I find many students have heard the shrillest criticisms without stopping to think how McDonald’s could maintain its competitive edge for so many years now, and in so many countries. I’m glad the student asked, and glad to put together a serious list.

Plus, here on campus, it’s 半价 at 麦当劳 after 10 p.m. (I love Chinglish.)

Categories: Uncategorized

GDP and Happiness

April 18, 2011 Leave a comment

Here’s the conclusion:

In the end, GDP and average income may still be the best measures of well-being, in part because they correlate so strongly with other quality-of-life variables such as access to basic necessities, better health, and education. And despite their flaws, they are a pretty good ‘North Star’ to follow. Of course, some people watch Dr. Phil, try to keep up with the Kardashians, are avid fantasy sports league participants, or send 100 text messages a day, exhibiting that even in the midst of plenty you can still have no life.

Wanna see what led up to that?

Categories: Uncategorized

China, Oil and the Environment

April 16, 2011 Leave a comment

I don’t know why every time important, intelligent people talk about oil, they speak as if 1) greater demand will always lead to higher prices, as if this is some inexorable law of economics with no other possible outcomes, and 2) higher prices would necessarily be bad.

We face a future where China needs to fuel its economic development and it is likely that can only be achieved by out-bidding the West for the world’s increasingly limited oil supplies. The effect on oil prices will have major consequences not only for the US, but indeed for the entire global economy in the years ahead.

Higher prices for oil will favor the development of other energy sources. They also make investments in energy efficiency yield higher returns.

Yet people speak as if because higher oil prices are coming, we’d better get ahead of the curve and provide other, cheaper forms of energy to avoid these higher prices. Don’t they realize they are short-circuiting the very process that will lead to diminished oil consumption? Would that be a good thing?

Shouldn’t people who favor extensive development of alternative energy be happy that China’s demand for oil is increasing?