Spring is usually a big season at Rice Business. There’s the thrill of the Rice Business Plan Competition, the satisfaction of Investiture, and the sheer energy of being present on our leafy campus. This year, of course, spring at Rice Business looks very different. Yet our commitment to community and growth has stayed the same, and the way staff, students and faculty have responded to the challenges of COVID-19 has been inspiring.

Our most striking adaptation was the pivot to online instruction. Rice Business programs were converted to online teaching within two days. Whether you’re taking two years off for a Full-Time MBA or dedicating nights or weekends to the Professional program, business students are focused on moving forward. We are too.

"I was amazed at the speed with which they were able to transition our classes and even speaking events/lectures to an online format," Julia Retta, Professional MBA class of 2020, told us. "I'd love to give a special shout-out to Prashant Kale, who teaches my Strategies for Growth class. From the beginning of the COVID-19 crisis, he communicated to students with exceptional empathy and let us know he recognized the multiple stresses that Professional MBA students are dealing with — work, school, parents having to juggle childcare/homeschool, not to mention the general anxiety brought on by COVID-19."

Sharon McNerney, Full-Time MBA Class of 2020, said she had a similar experience. "I have been very impressed by how quickly my professors got all our classes online and how well the classes have gone," she said. "I also like that they suggest we keep our videos on because it creates more of a social and in-person type of experience."

In an interview with Rice News, Professor Jing Zhou praised the detailed prep she got before the official stay-at-home order, which simplified the digital leap. Several weeks before virtual classes began, volunteer staff “ambassadors” helped Zhou and other professors, train for online teaching.  “I was pleasantly surprised that teaching went really well,” Zhou said. “The 60 students stayed engaged throughout the two days.  Occasionally, the students’ toddlers, dogs and cats popped in our class, bringing a smile to our faces.”

Professor Scott Sonenshein, author of the newly released Joy at Work, had a jump start: he literally wrote a book on resourcefulness. "I put into action what I’ve spent much of my career researching,” he said. “With only a few short days to get my class online, I transitioned it with minimal disruption and took advantage of the online platform to do things I never had thought about in the classroom environment.”

We've also adapted our programming and deadlines to the new climate. For our on-campus MBAs and Master of Accounting Program, we've launched a rolling admissions process for Round 3 applications, waived applications fees for these programs, and set up weekly online chats for any applicant to talk with our Recruiting and Admissions team members.

Meanwhile, MBA@Rice, our online hybrid MBA, continues almost untouched by the tumult of recent weeks. The thriving program is fully operational, and we're accepting applications for July 2020, October 2020 and January 2021.

As a top-25 business school, we have a critical resource in our crisis planning: a rich database of faculty research and experience on leadership, organizational behavior and crisis management. In addition to classroom instruction, our faculty is now teaching these capabilities in real time, living in real world ambiguity, to equip our students to be leaders. You can see some of this practical guidance for yourself in Rice Business Wisdom, our online ideas magazine:

Two samples:

• During a crisis, outsiders view leaders who show anger, and no sadness, as less effective, according to Rice Business Professor D. Brent Smith.
• Rice Business Professor Anastasiya Zavyalova explains why pre-existing moral codes are essential for companies in crisis.

Along with the expertise, preparation and hard work of staff and faculty, Rice Business has another critical tool: what you could call our school's DNA. At Rice Business, we teach students that they have joined a culture that is attentive, responsive and kind. We already know that they carry these values into the world and their professional life.

As just one example, after Hurricane Harvey, when first year MBA student Kirby Albright's home flooded, his new classmates pulled on galoshes and mucked out his. "It was a very humbling experience to receive so much help from people I'd really just met," Albright told us.

In recent weeks, as Rice Business mobilized to inform, protect and keep educating at the highest level, students have told us they see the same values in action.

"Rice Business has kept us informed of the situation since we first saw an uptick in U.S. coronavirus cases," Christine Dobbyn, EMBA class of 2020, said. "As a former news reporter, I've closely observed how this real-life crisis is being handled in a university setting. The environment is changing so rapidly, and each decision is being handled carefully and day by day."

Explore Our Rice MBA Programs

The massive disruption of our social and work lives is unnerving, but there are benefits to shaking up our routines and feeling uncomfortable, according to experts at Rice University’s Jones Graduate School of Business.

Scott Sonenshein and Jing Zhou, professors of management at the Jones School, are available to talk about the evolving organizational landscape with news media.

“I’ve studied creativity for more than two decades, and my research shows that times of disruption and upheaval can lead us to new insights and nudge us to innovate in ways we’d never have considered before,” Zhou wrote in an op-ed for The Hill. “In many ways, it’s an opportunity in disguise.”

In the midst of a pandemic, it might seem difficult to shift gears and work on a creative outlet, but it is possible to channel that angst while working from home, according to Zhou. “One of the best ways to achieve this psychological freedom — and the creativity it fosters — is to isolate ourselves,” she wrote. “Many of us intentionally seek out solitude for this very reason.”

Sonenshein, the bestselling author who co-wrote the recently published book “Joy at Work: Organizing Your Professional Life” with Marie Kondo, agrees that hardship presents opportunity, even if you don’t have the perfect at-home work setup.

“Research shows that times of crisis can bring out hidden reserves of human resourcefulness — and we’re starting to see what happens when humanity comes up against seemingly insurmountable constraints,” Sonenshein wrote in a separate op-ed for The Hill.

This resourcefulness ranges from scientists working on vaccines at record speed to automotive manufacturers pivoting to produce ventilators to restaurants converting to a takeout model.

“When resources are scarce, it becomes easier to discard conventional thinking and invent new uses for what we already have,” Sonenshein wrote. “But first we have to adjust our mindset to see the possibilities inherent in hardship — and not just the problems.”

Instead of becoming rigid in our thinking and trying to create perfect plans, Sonenshein urges us all to get more comfortable with improvising: “When we emerge from this crisis, I hope we leave it with an important lesson. When we are resourceful, we can do more than we ever imagined.”

“My research shows that people, and entire cultures, can produce some of their most creative works in times of crisis,” Zhou wrote.

Sonenshein is the Henry Gardiner Symonds Professor of Management at Rice. He is the author of “Stretch: Unlock the Power of Less — And Achieve More Than You Ever Imagined.”

Zhou is the Mary Gibbs Jones Professor of Management, the organizational behavior area coordinator, director for Asian management research and education and director of the Ph.D. program at the Jones School. She is a fellow of American Psychological Association, the Association for Psychological Sciences and the Society for Industrial and Organizational Psychology.

To schedule an interview with Sonenshein or Zhou or for more information, contact Avery Franklin, media relations specialist at Rice, at averyrf@rice.edu or 713-348-6327.

Related materials:

• Sonenshein bio: https://business.rice.edu/person/scott-sonenshein
• Zhou bio: https://business.rice.edu/person/jing-zhou
• Follow Rice Business via Twitter @Rice_Biz.
• Follow Rice News and Media Relations via Twitter @RiceUNews.

Based on research by Karthik Balakrishnan, Jennifer L. Blouin and Wayne R. Guay

• Corporations that prioritize tax-avoidant strategies more than their peers are considered "tax aggressive."
• Tax aggressiveness comes at the cost of lower corporate transparency.  
• Analysts make more, and more varied, errors when evaluating tax aggressive corporations.

Do you know how much tax ExxonMobil pays? Chevron? Bank of America? You probably don't. Depending on the company, even the most astute analyst may not either.

Let's try an easier question. If you compare a large, multinational corporation with a local pizza chain, you might suspect the multinational pays proportionally less tax than the pizza joint. You may be right — but you’d have a hard time proving it.

Rice Business professor Karthik Balakrishnan, along with Jennifer L. Blouin and Wayne R. Guay from the University of Pennsylvania, developed a sophisticated method to prove the real costs of corporate tax policy. Specifically, they devised a mathematical formula that measures tax aggressiveness, the extent to which a corporation uses strategies to pay less tax than its peers.  

In a key innovation, the model that Balakrishnan and his colleagues created didn’t initially compare businesses like the multinational to those like the pizza chain. Instead, they built the formula to include comparable corporation size and industry into the measure of tax aggressiveness. A domestic pharmaceutical company, they point out, will have a lower tax rate than a domestic food distributor, simply because the pharma company is likely eligible for greater research and development tax credits. This is the reason that individual tax rates alone don’t show if either the pharma company or the food distributor is being particularly aggressive.

Businesses of all sizes, as well as individuals, engage in tax strategy: finding ways to lower the amount of tax they need to pay. But large corporations can be more aggressive than our restaurant chainlet because a corporation has the money to pay associated costs. These might include hiring the legal and accounting muscle to take advantage of credits and loopholes; the funds to pay penalties if they stray into legally grey zones; and the human resources to run numerous companies under one umbrella. As any business does, corporations constantly weigh the costs and benefits of their endeavors.

Balakrishnan and his colleagues argue there is a cost to tax aggressiveness that has not been properly documented: corporate transparency. Sophisticated tax strategies, they write, can require circuitous capital and compartmentalized activities, both of which make it hard for outsiders to learn the source and persistence of a firm’s earnings. 

There’s a reason, in other words, why you can’t quite pin down whether a large multinational is paying less tax than a restaurant chainlet. The multinational may be threading its tax strategy through so many loopholes that even analysts and investors lose their way. This means a multinational’s shareholders must weigh the gains of tax savings against the wish for corporate transparency.

For corporations, the researchers argue, that lack of transparency has an economic cost. Setting aside ethical priorities, fewer people will want your stocks if they can't understand exactly what they are worth. One measure of this confusion is the bid-ask spread, that is, the difference between a stock's asking price and what an investor is willing to pay. The more tax aggressive a company is, the researchers found, the higher the bid-ask spread. When a corporation is highly tax aggressive, they also found, analysts make more — and more varied — mistakes trying to forecast the value of its assets. 

So if you're a manager, it pays to understand the real cost your tax strategy represents. If you're an investor or an analyst, a consumer who cares about corporate social responsibility or just a taxpayer interested in how your country is funded, it’s in your interest to ask not only how much tax a corporation pays, or how much its stock is worth — but how easy it is to find out. 

Karthik Balakrishnan is an associate professor of accounting at Jones Graduate School of Business at Rice University.

To learn more, please see: Balakrishnan, K., Blouin J. L. & Guay, W. R. (2019).  Tax aggressiveness and corporate transparency. The Accounting Review, 94(1), 45-69.

Rice Business has launched a deferred enrollment program that enables undergraduates to gain admission to Rice’s Jones Graduate School of Business’ MBA program and obtain career experience before they attend.

Deferred enrollment programs are increasingly popular at top universities. The deferment allows students to secure highly coveted spots in a decreased competition pool and gain experience in their careers — experience that can provide the opportunity to solidify or change individual career goals before attending graduate school.

With the MBA Early Admit Program, students apply to the Rice Business Full-Time MBA during their final year of college and reserve their spot two to five years after graduation. Eligible students must be employed during the interim years to hold onto their spaces.

The Jones School is adjusting some of the application requirements due to closed standardized testing sites during the COVID-19 pandemic. Applicants for the MBA Early Admit Program, which has a June 30 deadline, may provide ACT or SAT scores instead of the normally required GMAT or GRE. Those interested in applying can join one of the Jones School’s weekly online chats or connect with a recruiter today to learn more.

International students and all majors are welcome to apply; the program uses the same Rice MBA requirements and application but without the application fee. This new program is now available to Class of 2020 graduating seniors from Rice as well as other universities.

“With this program we’re doing all that we can to make it easier for those students to plan for the next phase of their careers and education while they’re still undergraduates,” says Peter Rodriguez, dean of the Jones School and professor of strategic management at Rice. “It also frees them to pursue any job they want in the years between graduation and the start of their MBA program. It’s much easier for them to apply in their senior year than later and will deliver a fantastic career platform. They can take a great first job, earn a Rice MBA and launch a new career within four years of graduation.”