The COVID-19 pandemic has shifted work, school and social lives online, demanding everyone leave their comfort zones of routine and predictability. Jing Zhou, a professor of management at Rice’s Jones Graduate School of Business who’s an organizational behavior expert, found herself stretching her creative muscles to convert an in-person MBA course to online.

Her course Negotiations is taught as an Intensive Learning Experience (ILE), which Zhou considers “the best way of closing the knowing-doing gap — the course helps (students) to not only understand and appreciate negotiation concepts and frameworks, but also use the concepts and frameworks as foundations for building and executing their strategies for a specific negotiation.”

The class is part of the professional MBA program at the Jones School, and students are working professionals. Typically they take the course on evenings or weekends, participating in back-to-back class days. During those two days, the students practice negotiation exercises and discuss or effective or ineffective strategies. Zhou says this ILE has been one of the “secret sauces in the program because of its rich content and rigorous pedagogy.”

These factors make the class seemingly impossible to convert to an online format. Nonetheless, to keep teaching in the current climate, the Jones School went forward with the originally scheduled dates (March 13 and 14) and moved the class online. It was a team effort — Zhou presented her teaching plan to colleagues from various departments who helped her figure out how to make it work.

Zhou chose to teach the class from one of the executive education classrooms at McNair Hall, home of the Jones School, because a remote teaching setup was already in place there. “When I teach, I like to walk around and write things on the board, and teaching in a real classroom allowed me to hold some things constant amongst a sea of change,” she said.

Given the nature of the class, the students virtually moved among small-group “breakout rooms” and the main “classroom.” They engaged in individual preparation, team preparation, negotiations of all sizes and configurations, and whole-class discussion.

Thanks to technology, the class continued almost unchanged. Zhou had to adjust the social aspects of teaching, like picking up on nonverbal cues from students. “When I can only see faces on a screen, I can’t read any nonverbal cues and, hence, the need to pose the same question in different ways, or repeat key takeaways to make sure they fully understand the course concepts and frameworks,” she said.

When Houston city leaders issued a stay-at-home order March 24, Zhou could no longer use the technology at the Jones School and had to convert her class to be even more remote for the next section on April 4 and 5.

“In the following days, I had tutorial sessions with IT and trial runs with a group of Jones School staff to practice various tech features,” Zhou said. “I had to go from a tech dummy who needed her teenage son’s help to set up a WhatsApp account, to someone who now feels pretty comfortable navigating various features in Zoom and syncing a laptop with (a Microsoft) Surface Pro to run a complex class.”

Due to the unusual circumstances, the Jones School offered students the option to attend online or postpone until they could take it in person. Twenty students out of the original 80 decided to participate online.

“Knowing it would be the smallest Negotiations ILE I’d ever taught, I didn’t know what to expect, and frankly was a bit worried about whether the quality of discussion would meet Rice Business’ high standards,” Zhou said.

But it worked. Students were engaged and actively participated, even with Zhou changing her teaching style.

“Sitting at home in front of a couple of computers is not my preference; I draw energy from walking around,” she said. “So knowing I would have to sit and teach, I needed to energize myself psychologically. I dressed up as if I were teaching in the classroom. This helped me to activate my professional identity, and generate psychological energy to do a great job. In addition to a teaching plan, I also created a very detailed class timeline and shared it, in advance, with all students. I felt this helped us to use time efficiently.”

Studies have found that physical settings influence cognitive thinking, according to Zhou, and the change of physical settings could affect divergent thinking and new insights. So, she theorized, it may be beneficial to blend online classes with face-to-face instruction to encourage new thinking.

As people adjust to stay-at-home measures, she notes, they’re searching for ways to encourage motivation and creativity.

“I hope this experience makes people aware that being creative requires much more than telling oneself ‘be creative now,’” Zhou said. “There are strategies that facilitate idea generation, idea evaluation and idea implementation, but most people have never learned those skills and could get frustrated easily after they realize their efforts at forcing creative do not produce great ideas or projects.”

Her advice isn’t just for those who are acclimating to working from home or those attempting a new passion project, but also for organizations.

“I believe people who are willing to learn will realize there are existing processes that need improvement,” she said. “Leaders will need to analyze which part of their existing processes are not efficient and need to be eliminated — and they should use creative thinking skills to engage in process innovation.”

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.”