From the Dean's Desk

Research Roundup

Martijn Cremers

Martijn Cremers

Monday, 15 February 2021
I’m glad to share with you a sample of recently published research by our faculty, highlighting one paper in each of our academic departments:
Jessica Watkins
Assistant Professor (Accountancy Department)
“Usefulness of Interest Income Sensitivity Disclosures” (The Accounting Review)
The study examines multiple dimensions of usefulness of banks’ interest income sensitivity disclosures. We find these disclosures are predictive of future realized changes in net interest income and appear to be used by a number of market participants, including financial analysts and equity investors. These results suggest that interest income sensitivity disclosures are informative measures of interest rate risk and contradict assertions that these disclosures are useless due to lack of relevance of income sensitivity, poor modeling techniques, and/or redundancy relative to regulatory data.
Johnathan Loudis
Assistant Professor (Finance Department)

"The Conditional Expected Market Return" (Journal of Financial Economics)
Understanding the behavior of expected stock market returns is important for both practitioners and academics alike. In this paper, we develop a new method for estimating upper and lower bounds on the conditional expected market return at any date. Our theoretical and empirical results offer new insights into the origins and behavior of the expected market return. For instance, according to our measures the average expected market return is about 5.2% per year, but it is highly volatile and reaches levels as high as 64% during the 2007-2008 financial crisis.
Xuying Zhao
Associate Professor (IT, Analytics, and Operations Department)

“Preorder Price Guarantee in E-commerce” (Manufacturing & Service Operations Management)
With the development of the internet and e-commerce, retailers often offer preorders for new, to-be-released products. To encourage preorders, retailers such as Amazon offer preorder price guarantee (PG). This research finds that PG enables a firm to profit from preorder demand uncertainty. If preorder demand uncertainty is high, a firm should adopt PG in advance selling. If preorder demand uncertainty is low, then a firm should adopt PG if and only if the percentage of high-valuation consumers is high. 
Ann E. Tenbrunsel
David E. Gallo Professor of Business Ethics (M&O Department)

“It’s Just Business”: Understanding How Business Frames Differ from Ethical Frames and the Effect on Unethical Behavior” (Journal of Business Ethics)
The perspective, or "frame," by which a decision maker examines a decision has a significant impact on their unethical behavior. More specifically, we find that viewing a decision through a business frame leads to more unethical behavior than viewing the exact same decision through an ethical frame. We further find that the decision processes are different between a business and an ethical frame, and that we can change the behavior associated with a frame by explicitly changing the decision processes.
James Otteson
John T. Ryan Jr. Professor of Business Ethics (Marketing Department)

"Democracy and 'People Over Profit’" (Georgetown Journal of Law and Public Policy)
One central argument supporting democratic political institutions is a principle of equal moral agency, which holds that all people, as free and responsible persons of dignity, are entitled to liberty, rights, privileges and obligations equally, which in turn entitles them to an equal say, or vote, in their government. This paper argues that honorable business in a properly functioning market economy is also based on a principle of equal moral agency, which similarly grants consumers a say, or "vote," in business activity. Thus, some versions of the "people over profits" objection raised to business activity miss the mark: Profit-seeking firms, when operating honorably, do not privilege people over profits; instead, they use democratic profit signals to guide production of benefit to all their stakeholders.
My thanks to these Mendoza faculty members and the many others whose research supports and informs our mission to enlighten and educate.
I also encourage you to attend the Notre Dame Ethics Week events this week via Zoom (see schedule below). The series features a number of our faculty members and students presenting different perspectives of the theme of “Beginning with Empathy: Listening and Learning from Others.” Thank you to Chris AdkinsJessica McManus WarnellViva Bartkus, Joe SweeneyKelly Rubey, Ken Milani and Brian Levey for serving as speakers and moderators.
In Notre Dame,
Martijn 

Guest column: Ryan Retartha

Martijn Cremers

Martijn Cremers

Monday, 8 February 2021
Inspiring a culture of service
“How can I help?”
That’s the No. 1 question I’ve heard from our alumni during my first four months as director of Mendoza Alumni Relations. Coincidentally, it has also been the No. 1 question I’ve heard from my gracious colleagues here at Mendoza. This speaks to the strong mission alignment that the entire Notre Dame community shares, and it’s this culture of service that I’m making the cornerstone of alumni relations at Mendoza.
While a strong alumni network is a feature of every top university, what separates the truly elite schools are alumni who are inspired to give of their time, experience and connections to current students and faculty. Mendoza itself has a long history of strong alumni relations, with many of our departments, institutes and clubs enjoying decades of alumni participation. But Mendoza is growing and changing. If we’re to truly elevate, cooperate and integrate within Mendoza, all of our departments, programs and functional groups deserve and require the same robust alumni participation and support.
How do we inspire our alumni to service? A friend and mentor of mine at Notre Dame, the great Peter Holland, often told me that the easiest way to any alumnus’ heart was through the students. Nothing captures their attention more than the opportunity to affect the life of a current student, which is why increasing alumni involvement in the student journey is my top priority.
We need to constantly create, evaluate and improve upon meaningful opportunities for our alumni to have an impact on our students beginning with the recruitment pipeline, through the admissions process, during their time as students and after they graduate. We already have many alumni involved, but our needs are growing and diversifying. This year, you’ll see a huge emphasis on volunteer recruitment for student engagement.
Another way to inspire our alumni to service is by bringing more of Notre Dame to them, and have Mendoza be a source of knowledge and inspiration in their everyday lives. I plan to take advantage of our new comfort level with virtual meeting and learning to provide more ways for alumni to learn from Mendoza’s faculty, research and thought leadership.
Finally, the No. 2 question I’ve heard from our alumni is, “How can my work (or company) help the faculty?” This surprised me, but there’s a real opportunity there. Ken Kelley and I both recognize the role our alumni can play in providing diverse and interesting data to our faculty for their research.  I see it as yet another way our alumni can give back to Mendoza. I’m always available to work with faculty if they feel our alumni can be of value to their research efforts.
Alumni Relations can be an engine that provides constant support and energy to the College. Please reach out to me if you have any needs, questions or good ideas that you think can help inspire our alumni towards a culture of service.
In Notre Dame,
Ryan
Ryan Retartha (ND '07)
Director of Alumni Relations
Mendoza College of Business

New start

Martijn Cremers

Martijn Cremers

Monday, 1 February 2021
I started my last message with "Happy New Year." This time, I wish you Happy New Semester! Starting the spring semester with a blast of winter weather, it is great to see our students returning as classes get underway.
Today also marks the start of Black History Month, which originally was intended to draw attention to fact that Black people have been underrepresented in the books and conversations that shaped the study of American history. The commemoration highlights a matter of high priority for the College; namely, to advance diversity, equity and inclusion across Mendoza as part of our imperative to Grow the Good in Business™: to educate servant leaders who contribute to human flourishing, cooperate in solidarity and compete through growing toward the best version of themselves with the help of God and others.
Acting in this spirit as educators — individually and in our roles at the College — this means shaping the educational experience at Mendoza such that diverse voices, experiences and backgrounds are valued, respected and nurtured. This includes ensuring that the material we teach, the classroom discussions we lead and the larger student experience reflect the voices and meets the needs of the diverse individuals who make up our community and the world.
Many of you have contributed a great deal of hard work and caring to initiatives to advance diversity, equity and inclusion at the College and University level. I highlight just a few of these, starting with some new efforts by the University and then giving some examples at Mendoza:
  • Initiative on Race and Resilience: Launched by the University in January 2021, this new interdisciplinary program promotes multiracial collaboration, qualitative and quantitative methodologies, and inclusive pedagogy.
  • Advisory Committees for Student Climate: This University effort is composed of undergraduate and graduate student representatives, administrators and faculty for the purpose of offering input to the vice president for Student Affairs about the Notre Dame campus climate for students, especially related to topics around diversity and inclusion.
  • Specialized Master Programs Council Diversity, Equity & Inclusion Committee: The newly formed Mendoza committee focuses on advancing DE&I through curriculum/education (speakers, faculty connections) and support (weekly coffee chats among students on current events).
  • MBA DE&I Student Task Force: Convened in 2020, the task force was charged with taking a broad and in-depth look at policies, programs and initiatives that shape student life and academics at Mendoza. Its recommendations continue to inform the decisions of leadership in regard to enhancing diversity, from recruitment to classroom culture.
  • Building Bridges Mentorship Program: More than 25 Mendoza faculty members regularly volunteer for this Notre Dame program, which pairs minority students with a faculty mentor to provide career counseling and support. For additional information, contact Arnel Bulaoro at abulaoro@nd.edu.
  • Leading for Justice and Inclusion: This new MBA course taught by Chris Adkins helps students develop both the mindset and toolkit for leading justly and inclusively in their future roles as business leaders.
  • Mendoza Staff Diversity Council: The Council’s purpose is to create and sustain an inclusive culture for all Mendoza staff by fostering an environment of dignity, respect and fairness that is grounded in our Catholic mission. These efforts will be facilitated through the College’s ongoing and continuing efforts to attract, retain and promote staff from all backgrounds, perspectives and abilities. 
Building a more diverse, equitable and inclusive community is a work in progress. I’m thankful to the many of you who are putting in the hard work it takes to bring about change, as well as to those who have shown great courage and thoughtfulness in speaking up and pointing out where we can do better.
As Pope Francis said, “The most effective antidote to every form of violence is education about discovering and accepting difference as richness and fertileness.”
In Notre Dame,
Martijn

Guest Column: Jim Leady

Martijn Cremers

Martijn Cremers

Monday, 25 January 2021
Undergrad Update: Rankings and Two New Programs
Our long winter break is nearing its end, and very soon we will welcome our students back to campus. The last two highly unusual semesters have certainly presented plenty of individual and collective “growth opportunities,” and we – our students, our staff and our faculty – have pulled together as a community to do amazing things!
Though many of us might feel like grizzled veterans by now, I am sure the upcoming semester will challenge us in new ways. I am confident that with God’s grace we will again have a very successful semester.
Today I write to share two updates regarding the undergraduate program with you.
First, in the just-released Poets & Quants 2021 undergraduate business school rankings, Mendoza ranked No. 7, marking the fifth time we’ve placed in the top 10.  The P&Q ranking, now in its fifth year, is one of the two prominent rankings (the other being U.S. News & World Report) and started soon after Bloomberg Businessweek discontinued its annual rankings of undergraduate business schools.
Unlike the U.S. News rankings, which are based solely on a survey of deans and senior faculty, the P&Q rankings place equal weight on three factors: admissions standards, student satisfaction with their academic experience and employment success. Mendoza ranked 5th, 11th and 11th respectively in these categories. The ranking factored in admissions data for the Class of 2024, survey data from the Class of 2018 and employment data for the Class of 2020.
Notre Dame’s continued success with this ranking is a testament to the strength of our students as well as to the dedication and creativity of the faculty, staff and alumni who provide the transformative experience for our students. Out of the 93 schools participating, we earned the top rating for most satisfied graduates on two questions concerning the involvement of practicing professionals and alumni. I wish to thank everyone in the Mendoza community who teaches, advises, mentors and supports our undergraduate students!
The other update I wish to share is about our forthcoming honors programs. Mendoza will initiate two separate honors programs next academic year — the Business Honors Program and the Research Honors Program in Business — both of which will challenge our most gifted undergraduate business students with a rigorous, comprehensive and specialized course of study and programming.
These distinct honors programs will allow us to compete more effectively with schools such as Wharton and MIT to attract top undergraduates to Notre Dame; to boost hiring of our undergraduate students in the most demanding and complex corporate positions, and to place more Mendoza graduates in distinguished Ph.D. programs in business.
All First Year students pre-admitted to Mendoza and transfer students will have the opportunity to apply to the Business Honors Program during their second semester on campus. The program will engage students during their final three years in Mendoza primarily through an elevated business curriculum. It is especially suited to those students interested in exploring the moral purpose of business and how it can contribute to integral human development. Top applicants will have clearly demonstrated this interest as well as a high level of academic achievement and intellectual curiosity.
The Research Honors Program in Business is a separate opportunity specifically for juniors or seniors interested in doing their own independent research supervised by a faculty member. We expect the Business Honors Program initially to enroll about 40 students per cohort and the Research Honors Program in Business to attract about 10 business majors per year. (Students could potentially do both programs.)
I wish everyone a successful and healthy spring semester, and GO IRISH!
Jim Leady
Associate Dean for Undergraduate Education
Associate Teaching Professor

Happy New Year!

Martijn Cremers

Martijn Cremers

Monday, 18 January 2021
Happy New Year! This common expression carries extra hope for 2021, after such a difficult 2020 and start of 2021. We all fervently hope and pray that the new year will usher in the return of life to normal, including gathering together again as a community.
As I greet you with this first Dean’s Message of 2021, I want to recognize today as Martin Luther King Jr. Day. I hope you were able to attend the online discussion earlier today with Justice Alan Page and Notre Dame Law Dean Marcus Cole. Also, I hope you will participate in Notre Dame’s annual “Walk the Walk Week” from February 22 through February 28, after we reconvene on campus on February 3. The week-long series of University and department sponsored events is designed to help each of us consider the steps we might take individually and collectively to make Notre Dame, our communities and our nation more equitable and inclusive.
In the wake of the tragic national events during this past year, including the murder of George Floyd, MLK Day reminds us that our commitment to diversity, equity and inclusion is foundational to our mission. It is critically important to always affirm and act consistently with belief in the inherent dignity and worth of every person. We ask for everyone’s participation, ideas and initiative in taking actions toward becoming a more diverse, equitable and inclusive community, where we aim to listen, understand and value everyone as individuals and as part of our community.
At Mendoza, 2020 brought us many disruptions and changes, and as a result, the need to strike balances between priorities. We needed to safeguard the health and wellness of our students, faculty and staff, while recognizing that in-person engagement is an integral part of our culture and learning environment. We had to prioritize our resources to meet immediate challenges while also keeping our vision on the future and the long-term goals for the College. We had to reinvent the way we work at a time when the larger demands of our families, churches, friends and communities have stretched us.
Yet as I reflect back on the College during this past year, I am struck by the fact that through all of the uncertainty and stress, your continued commitment to our mission, and specifically to serving our students and each other, was unwavering and an inspiration to me. I saw this commitment expressed daily in many, many ways, from learning to teach via Zoom, to wearing masks all day so you could teach in-person, to finding new ways to work as teams, to performing smaller acts such as manning the courtyard fire pits so that our graduate students would have a safe place to gather outside.
I'm proud of what we have achieved in 2020 despite all of the disruption and all of the challenges, and very grateful to all of you. Often when people face great adversity, they freeze. You didn’t! In fact, in looking over the “Mendoza year in review,” we were quite busy and accomplished a lot, to the great appreciation of our students as well.
On January 6, we witnessed an outrageous assault on Congress that to quote Father Jenkins, “was unworthy of our democracy.” I join his call for all of us to pray for this nation and to “condemn unequivocally the disruption of institutions designed to serve the common good.” These realities remind us that we continue to face many challenges, including social disunity and racial and social injustice. All of us can consider how we can work to heal these divisions.
As we enter 2021 (during which we will start celebrating the College’s centennial), it is our joint commitment to our Catholic mission – to educate business leaders who contribute to human flourishing, cooperate in solidarity and compete through growing toward the best version of themselves (with the help of God and others) – that endures and renews our hope, whatever the next 12 months might bring.
In his recent Epiphany of the Lord homily, Pope Francis encouraged us to greater worship and discipleship by presenting three (a most appropriate number…) “lessons” from the story of the Magi who traveled to see the newborn Jesus: “to lift up our eyes,” “to set out on a journey” and “to see.” I think this message offers a good approach to 2021 — to maintain an attitude of openness and gratitude with lifted up rather than downcast eyes, to continue on our journey with a focus on growth, and to prioritize a concern for the wellbeing of others.
In Notre Dame,
Martijn 

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