Why it's easy to teach ethics in Washington

MSBA Program Director
Stewart McHie

The Master of Science in Business Analysis degree at Catholic University is founded on the principle that commerce, when practiced properly, provides a meaningful and dignified service to society.  To integrate the principles of solidarity, subsidiarity and human dignity into all of our subject areas, we use case studies, scholarly writings, and the real world experiences of our professors combined 130+ years of experience working for Fortune 100 companies.

By virtue of our location in Washington DC, just minutes from the US Capitol and downtown Washington and the business rich environs of Maryland and Northern Virginia, we are fortunate to be able to attract outstanding guest lecturers like Congressman Jeff Fortenberry (R-Neb),  Wall Street Journal columnist Bill McGurn, and international author and scholar Alexandre Havard.

And to add even more relevance to our discussions on business ethics, we have our own backyard of the Washington government and political scene.

Consider the Metropolitan Washington Airports Authority board:

Recent news stories making the rounds about this oft criticized, politically appointed board provide plenty of material for class discussions.  The Inspector General's office issued a blistering report of the lavish spending and travel practices, followed by a rebuke from Transportation Secretary LaHood.  Other elected officials have described the board as "dysfunctional".  

A new ethics policy, meant to address out of control travel spending, nepotism, recusal and other rules, seemingly in line with good corporate governance, was adopted - over the objection of some members. Here are some of my favorite quotes from the board:

"Draconian and a straightjacket" (transparency can indeed be embarrassing.  Welcome to the real world)

"In all candor, every person on this board would be in violation of this policy.  This is a federal town, c'mon.  What the hell?  - H.R. Crawford  (maybe this is why the public is fed up with the federal town Mr. Crawford)


"There are many things in here that have been violated by directors in the past." - Gregory Wolfe  (banks have been robbed in the past but that doesn't mean we should keep doing it, Mr. Wolfe)

Regarding the the new prohibition against recommending relatives for jobs, Warner Session said, "You effectively eliminated our summer intern program."    (Really Mr. Session?  I'm sure I could find you many deserving and capable interns that aren't related to a board member.  Give me a call.)

Can you eat on $71 a day?  Apparently Shirley Robinson Hall cannot.  She notes, " our lifestyle is not based on a government employee lifestyle".  (Given the $4,800 dollars spent on three meals in Hawaii, let's hope not!)

And how does this happen?  Board member Mame Reiley, resigned from the board and the next day was given a five year contract with a one year severance package. Her employment has since been terminated, but not her severance package of $180,000.

While I personally find these attitudes representative of what's wrong with our government and the entitlement mentality of public officials, I do appreciate the opportunity to have so many real life examples to help educate our students in the right way to use commerce to serve society.

What do you think, am I being too sensitive with my tax dollars?

Stewart McHie
Director, Master of Science in Business Analysis
mchie@cua.edu

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Is Your Company Paying “Just” Wages?

By Brian T. Engelland

Professor of Marketing

The Catholic University of America

Last year Tim Cook was paid approximately $238 million as Apple’s CEO, Alex Rodriguez was paid $32 million as the New York Yankee’s third baseman, Ann Snyder was paid $47,500 as a market researcher for a restaurant supply house, and Jason Alexander was paid $13,220 as a cashier at a Burger Palace restaurant.  Are any of these wages just? 



Yankee third baseman Alex Rodriquez
was paid $32 million last year, the
highest paid athlete in the world.

Over 120 years ago, Pope Leo XIII introduced the idea of a “just” wage in his encyclical, Rerum Novarum.  He defined the just wage as an amount needed to support a thrifty and upright worker plus his family, and prescribed that it must be sufficient enough to allow the worker to save and acquire property of his own.  Pope Leo considered this to be a moral argument, and left it to the economists to work out the details.  Economists have been arguing ever since. 

In classic economics, the cost of labor is based upon the equilibrium between supply and demand. If the pay isn’t high enough, the worker withholds his work until the pay is raised to a level that makes it worth his while. But along came Pope Leo saying that this approach is not moral or just. Why?

Pope Leo understood an important aspect of human nature.  Mankind was created in the image of God.  God engages in creative action to bring planets, oceans, trees, animals and humans to life, and mankind emulates this action by doing work to help create useful products and services. Most of us don’t like to be idle; rather, we like to accomplish something. If necessary, most people will readily volunteer to work for low wages or occasionally even no wages (charitable works) just so we have the opportunity to exercise our God-given creative talents.

Pope Leo also knew that a labor rate negotiation, like all negotiations, tends to be about power.  The stronger party always gets the better deal, and the large employer tends to have the power in a negotiation with an individual worker.  If the individual worker is offered a low wage, he has very little bargaining power because there always seems to be another who will take the job.  Free bargaining between management and worker often does not result in a fair wage. 


Accordingly, the Church recognizes three principles that are necessary for implementation of the just wage: the principle of need, the principle of equity, and the principle of economic order.

Tim cook was paid $238
million last year as
Apple's CEO.

Need relates to the wage rate required to sustain the individual worker and his family.  Workers who live in more expensive cities need a higher wage.  Equity defines what is due to a person because of the value of the particular skills, effort and talent that person is able to bring to the job. Thus, someone with the skills necessary to invent new products or hit a 97 mile per hour fastball should earn more than the person who flips burgers.  Economic order refers to the fact that the individual’s work and the firm itself must generate sufficient values to pay the wages.  In other words, fair wages must be sustainable. This means that for the same work, it is just that a successful enterprise like Apple might pay a higher wage than a struggling start-up business or not-for-profit organization.  

Applying the Principles

Let’s apply these principles to the opening example.  Regarding the cashier, if this young man lives in a high cost of living city like New York, his wages are likely insufficient to pass the needs test, and are unjust.  Businesses have a responsibility to calculate how much employees need in order to handle their responsibilities, and pay wages accordingly. 

The market researcher’s wages look pretty good in comparison, until you realize that they are $20,000 less than what a competitor pays for the same work.  Still, the first firm is justified in paying less than the competitor if the company can demonstrate that the payment of a competitive wage is unsustainable due to the precarious financial health of the firm.  However, if this pay inequity continues after the firm has attained good financial health, it would strain credibility to say that financial difficulties are the primary reason for the pay inequity.  

Tim Cook’s salary ranks as one of the highest CEO salaries in the world and Alex Rodriguez’s salary is the highest for an athlete, but the Church does not begrudge them for their good fortune.  Although neither wage is justifiable based upon need, and it’s a stretch to say that either are based upon equity (since most CEO’s or baseball stars are paid far less), a case can be made that these extreme wages are justifiable based upon economic order.  After all, Apple is now the world’s largest company and the New York Yankees are the world’s most successful baseball team.  It is a matter of prudential judgment whether Tim’s or Alex’s performances are integral to the organization’s success.  However, these extreme pay levels would be a violation of economic order should they cause the organization to struggle financially; and it certainly would be morally wrong if the high pay level of one employee requires cutting back the just pay of another employee.

Most of the time, however, the just pay problem occurs at the lower end of the pay scale. In the book, Leading Wisely in Difficult Times, authors Michael Naughton and David Specht tell the story of Rheel Manufacturing Company, a Silicon Valley manufacturer of injection-molded computer parts.  The management team wanted to make sure that the competitive pay scales they were using to hire employees did in fact meet the standards of need, equity and economic order so that they could be considered as “just” wages. 

After evaluating the cost of living in the area, typical employee family sizes, and other economic factors, the management team was disappointed to find out that the pay rate for one class of workers was insufficient.  Further, it was deemed that if the team raised the rate of pay to a just level, it would place the company in a non-competitive position.  Often times, a solution can be found by redesigning the job, and that’s what happened in this situation. By delegating more authority to the individual worker, less supervision and less support functions were needed.  This upgrade reduced overhead costs and made it economically possible to pay a just wage for these employees.

Companies have a moral responsibility to pay just wages, and accordingly, more firms should follow the example of Rheel Manufacturing and evaluate need, equity, and economic order in determining their wage rates.

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What are Your Faculty Up To?

One of the most motivating and impressive features of studying Business and Economics at The Catholic University of America is the access to extraordinary faculty. As Dr. Abela mentioned in his orientation presentation for new students, our faculty put the phrase, “those who can’t do, teach” to shame. Our faculty members have held top executive positions with Fortune 500 companies, they’ve been presidential appointees, they’ve been Fulbright Scholars, they’ve been named “DC Professor of the Year” and they’ve traveled the globe for business and research—needless to say, our professors teach and they do.

For this reason, over the course of the fall semester, our department will host a “Faculty Research Series” which will highlight the recent work of several remarkable professors.

These lectures will take place in the Edward J. Pryzbyla Center, Room 327 at 1 PM on the days indicated below. They are open to all who wish to attend. Please see the schedule below for more detailed information.

Monday, September 17^th
Dr. Jamshed Uppal, associate professor of finance: “Extreme Loss Risk in Financial Turbulence - Evidence from Global Financial Crisis.”

Monday October 1^st
Dr. Rick Cummings, associate professor of accounting at University of Wisconsin-Whitewater: “Accounting Education Pedagogy for the 21^st Century.”

Monday, November 5^th
Dr. Frederic Sautet, visiting associate professor of economics: “What is Austrian Economics?”

Monday, November 19^th
Dr. Martha Cruz-Zuniga, clinical assistant professor of economics: "Achieving Sustainable Development: An Integral Economic Approach."

Monday, December 3^rd
Dr. Brian T. Engelland, professor of marketing: “Virtue Ethics and Pre-Employment Testing of Sales Professionals.”

Come join us for these informative and important lectures.

Stewart McHie
Director, Master of Science in Business Analysis
mchie@cua.edu

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Welcome MSBA Class of 2013



Welcome Class of 2013

 I'm pleased to welcome the Class of 2013 to campus begin our year long journey together.  As with our first two classes, this is a diverse group representing 9 different undergraduate universities, ten different undergraduate majors, and 3 different countries.  Our students range from schools in California, Oklahoma, Illinois, Florida, North Carolina and the DC area and represent a wide array of experiences, backgrounds and cultures. This will indeed be an exciting year and I'm looking forward to learning from these students.



Chris, Caroline, Adaobi and Tracey
enjoy the fare at Colonel Brooks

 We have a tradition of beginning our journey with orientation activities prior to classes commencing.  Because our students study as a cohort, it is important to establish trust and a sense of teamwork early on.  We started with a Meet and Greet at the venerable Colonel Brooks Tavern last Tuesday.  A sad note; Colonel Brooks is closing in September to make way for new facilities to serve the CUA community.  Progress is good but sometimes it causes sad farewells! 

Students prepare for their
first challenge

Bright and early the next morning we traveled to Darnestown, Maryland to spend the day with Eriq Powers at Go-Adventures.  This is our third year with Eriq and he did his usual great job.   The students shared information about their backgrounds, their reasons for being in the program, and at the end of the day, what the experience meant to them.  We worked on teambuilding, developing trust, leadership and communications.  By the end of the day, we discovered we had a highly functioning team ready to tackle this rigorous one year graduate program.


Adaobi leads Chris across an obstacle

This exercise teaches students the value of trust as they are led blind folded through the woods and across obstacles.  Only non verbal communications are allowed!  Many students are initially uncomfortable with this evolution as they are used to leading rather than following.  This teaches the important skill of learning to depend on teammates.  As one student astutely pointed out, "you have to be a good follower in order to be a good leader". 



This is probably what construction
on the Alaska pipeline looked like

Next came the problem solving and communication evolution.  Students were given limited resources to build three pipelines on a 10 degree pitched hillside to deliver a marble to a central location.  They first had to decide whether to work together and share resources and institutional knowledge or compete with each other.  They correctly decided to work as a team toward the common goal.  However, after initial good communications and sharing to gather the resources, the "doing" took over and they set about the work as separate teams without proper leadership and planning.  Halfway through the alloted time and realizing they were behind, they called a timeout to correct the problem.  While only one team successfully delivered the marble to the central storage facility, the impact of lessons learned was clear and a second attempt would no doubt have proved successful.  



Tracey explains her teams solution
as Caroline, Winfred and Anthony look on

Our final orientation exercise took place on campus where expectations and procedures were clearly defined.  The MSBA program adopted a Professional Code of Conduct last year that spells out our expectations for attendance, dress standards and classroom participation.  The program models business behaviors and we seek to practice these behaviors down to the smallest detail.  Borrowing on a popular sports metaphor, "you play like you practice", we intend students to adopt these behaviors as second nature.  During this session we introduced and practiced a case study discussion which the students will use throughout the program.  This affords them an opportunity to not only hone their critical thinking skills but also their communications skills as demonstrated here.

Enjoy more pictures of our orientation activities soon on our facebook page, Catholic University MSBA Program and stay tuned throughout the year as these students learn and accomplish great things.

Stewart McHie

Director, Master of Science in Business Analysis

mchie@cua.edu

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Pat Six hired by DDB Worldwide in New York City

Pat Six

2012 MSBA Graduate Pat Six recently accepted a position as Assistant Account Executive at DDB, a subsidiary of the Omnicom Group in New York City.  As a AAE, Pat will be assisting with new initiatives on the loyalty side of the ExxonMobil Fuels Marketing account working with Jenalisa Trevino (Sr. AE) and Andy Garafalo (Management Supervisor). He will also be assisting with briefs, budgets, coordination with internal teams and clients.
DDB won the EM Fuels Marketing business in 2000 following the 1999 merger of Exxon and Mobil. 

Pat is a native of Rochester, New York and attended Thomas Aquinas College in Southern California where he received a double major in Philosophy and Theology.  After spending two years working for his alma mater as an Admissions counselor and recruiter, Pat returned East to earn his graduate degree at Catholic University.  While at Catholic, Pat interned in the marketing department at NetApp in Vienna, Va.

In Pat's own words...

"Besides the valuable business education I received in the regular classwork, the MSBA program was particularly beneficial to me in three ways:

1) Team assignments, including a client project in Team Field Study class, challenged me to develop my communication and organization skills and exposed me to the challenges of managing team and client relationships on a project.

2) An abundance of guest speakers and company visits gave me a first-hand look at a diversity of career options within business and helped me to narrow down my own career interests.

3) Working an internship while in the program gave me invaluable real world experience in a corporate environment and, perhaps more importantly, showed me how much I was capable of doing all at once. 

When I look back at how much I accomplished in those two semesters and at how I was often doing so many things all at the same time, I feel confident that I am well prepared to tackle anything that my career will throw at me!" - Pat Six, MSBA class of 2012

Stewart McHie
Program Director, MSBA
mchie@cua.edu

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Congratulations Meredith Kirsch at Advisory Board

MSBA Grad Meredith Kirsch

Meredith Kirsch, a 2011 graduate of the MSBA program, was recently promoted to Associate Director for New Business Development at The Advisory Board in Washington DC.  Meredith began her career with The Advisory Board shortly after graduation as a Marketing Associate within the Talent Development group.

The Advisory Board Company is a global research, consulting, and technology firm partnering with 125,000 leaders in 3,200 organizations across health care and higher education.

Through an innovative membership model, the company collaborates with executives and their teams to elevate performance and solve their most pressing challenges.  The Advisory Board provides strategic guidance, actionable insights, web-based software solutions, and comprehensive implementation and management services.

The company is guided by the spirit of generosity, serving members beyond expectation and with honest appreciation in every encounter. 

Meredith serves as Associate Director for New Business Development within the Talent Development arm of the firm. Playing a pivotal role in supporting the firm’s growth, Meredith develops and executes strategic plans that result in the successful sale of Advisory Board memberships. She fosters relationships with hospital executives to understand the issues they are hoping to solve and offer the appropriate solutions.  Through conducting consultative one on one onsite presentations at member and prospect institutions, Meredith seeks to educate on the Advisory Board’s Talent Development offerings.

When asked how the MSBA program prepared her for success in the business world, Meredith cites the diverse learning opportunities she had inside and outside the classroom. 

"In addition to classroom learning, we participated in a year-long internship. I worked at St. John's College High School and the San Miguel School in Washington, DC, serving a role in their development departments. The internship provided the opportunity to interact with professionals and gain hands-on experience in a business setting. We also took part in a semester long Field Team Study.  My experience working with Microsoft in Reston, VA allowed me to apply my classroom learning to an assignment that had real value to the technology industry. Both experiences brought to life the theories and practices discussed in class."  - Meredith Kirsch, MSBA class of 2011

Stewart McHie
Program Director, MSBA
mchie@cua.edu

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Faculty Profile - Dr. Andrew Abela

Dr. Andrew Abela

Dr. Andrew Abela is the Chairman of the Department of Business & Economics, and Associate Professor of Marketing.

His research centers on the integrity of the marketing process, including marketing ethics, Catholic Social Teaching, and internal communication, and has been published in several academic journals, including the Journal of Marketing, the Journal of the Academy of Marketing Science, and the Journal of Business Ethics. He is a regular contributor to the Legatus Magazine “Ethics Matters” column, and is currently working on a Catechism for Business. Dr. Abela is also the Chairman of the Ethics Committee of the American Marketing Association, and was the recipient of the 2009 Novak Award, a $10,000 prize given by the Acton Institute for “significant contributions to the study of the relationship between religion and    

                                          economic liberty.”

Dr. Abela consults to several major corporations on marketing and internal communications issues. Recent clients include ExxonMobil, Microsoft, Burger King, HJ Heinz, eBay, and Kimberly-Clark. Prior to his academic career, he spent several years in industry, as the Managing Director of the Marketing Leadership Council, a management consultant with McKinsey & Co., and a brand manager at Procter & Gamble.

Dr.Abela has an MBA from the Institute for Management and Development (IMD) in Switzerland, and a Ph.D. in Marketing and Ethics from the Darden Business School at the University of Virginia.  He and his wife Kathleen have been married for thirteen years.  They have six children and live in Great Falls, Virginia.  Dr. Abela was born and raised on the island of Malta and is a citizen of the United States. 

CUA in Rome

    

    

      Dr. Abela recently led a contingent of CUA students that  

      studied in Rome during the spring semester.

    

     

      Below is an insight into the driving force behind business excellence and education at Catholic University. 

SM: What was your first job out of college?

AA: Brand Assistant in the Advertising Department at Procter & Gamble in Canada.   

       My brand was Secret women's deodorant...

SM: That must have been a great learning experience!

SM:  What did you want to be when you grew up?

AA:  At age 10 I read C. Northcote Parkinson's book Parkinson's Law, and decided 

        that management sounded like fun and so I wanted to grow up to be a business

        executive.

        (It was only several years later that I realized that the book was a spoof.)

SM: It is?

SM:  What’s your favorite restaurant in D.C.?

AA:  Restaurant Nora, America's first certified organic restaurant. And the food is 

        outstandingly good.

SM: As we experienced recently!  Thanks you for the nice evening Dr. Abela.

Dr. Abela and son Dominic

SM: What do you do in your free time?

AA: Free time? With a department to run, courses to teach,  consulting clients to work with, and six children to raise, I'm not aware of any. But I do get to spend a few 

hours sailing on the Chesapeake every now and then...

SM: What is your favorite sport and why?

AA: Sailing. Because it is absorbing and peaceful at the same time. In terms of spectator sports I enjoy watching soccer and baseball. In my free time...

SM: Bring the kids to a Nats game with our MSBA class

                                                        this fall.

SM: What was your worst job growing up?

AA: I can't honestly think of any. I've been blessed in that I've enjoyed all the jobs I 

      had while in high school and college (accounting clerk, computer programmer, 

      salesman) and that each job I've had since I've enjoyed more than the one I had

      before (which is why I changed jobs each time).

With CUA Prsident John Garvey

SM: Why is the MSBA program important to you?

AA: I am a big fan of liberal arts education and I think that

      business desperately needs the wisdom of the liberal 

      arts.

      I realized long ago that most businesses are not   

      visionary enough to recognize the value in such an

      education. The MSBA provides the springboard to 

      launch liberal arts students into a successful

      business career.

Dr. Abela IS the visionary behind the MSBA program 

and many more important innovations to come at Catholic University.  

Keep tuned to this space as we reveal those over the coming months.

Stewart McHie
Program Director, MSBA
mchie@cua.edu

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