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never stop learning

Exploring the complexity of food security page 4

RESEARCH Death of a salesman? Social media debunks views of advertising page 3 PARTNERSHIPS Overcoming disadvantage through education page 11 LIFELONG LEARNING Making family history in the Bachelor of Commerce page 13

Catch up on the latest news, events and cutting edge research at:


3 Death of a salesman? Social media debunks views of advertising 4 Exploring the complexity of food security 6 Building global foundations 8 Rural accountants still number one with local businesses 9 Excited or depressed: Investor mood swings PARTNERSHIPS

10 Survival of the fittest: businesses put to the test 11 Overcoming disadvantage through education 12 Graduate students guide shire decisions in regional Victoria LIFELONG LEARNING

13 Making family history in the Bachelor of Commerce 14 Good corporate governance the foundation of doing business 16 New economics doctoral program first of its kind in Australia

Embedding research in education Since our beginnings in 1924, the Faculty of Business and Economics has maintained a proud tradition of research and innovation. Today we embed this research expertise in our graduate education offerings through the Graduate School of Business and Economics (GSBE) and our undergraduate Bachelor of Commerce. Our strong performance in international rankings and accreditations endorse the standing of our researchers and our position as a leading research institution. Recently, we became the first university in Victoria to be awarded accreditation by the Association to Advance Collegiate Schools of Business International (AACSB). We are just the second university in Australia to earn AACSB accreditation in both business and accounting. The University of Melbourne achieved the highest position of any Australian institution in the most recent Times Higher Education rankings and we are also the first and only Australian university to rank in the Top 100 of the Business and Economics subject ranking in the prestigious Shanghai Jiao Tong University Academic Ranking of World Universities. By continuing to invest in and recognise quality research we ensure that our students benefit from the research expertise of our world-class academics. In both graduate and undergraduate classrooms, students learn to apply the very latest thinking and research to their respective fields of study. This focus on lifelong learning and continued engagement with our partners in business, industry and government positions us amongst the leading providers of business and economics education in the Asia Pacific region. Professor Margaret A Abernethy Dean, Faculty of Business and Economics Sidney Myer Chair of Commerce 2008 Telstra Business Woman of the Year

Authorised by Dean, Faculty of Business and Economics. CRICOS Provider code: 00116. Intellectual Property For further information refer to Statutes and Regulations. Copyright The University of Melbourne 2011. Copyright in this publication is owned by the University and no part of it may be reproduced without the permission of the University. Disclaimer The information in this publication was correct at the time of printing. The University of Melbourne reserves the right to make changes as appropriate. As details may change, you are encouraged to visit the University’s website or contact the University of Melbourne Information Centre to obtain the latest information.

This brochure is printed by an FSC certified printer on FSC certified paper that contains 55% recycled content and FSC certified pulp.

Social media debunks views of advertising By David Scott

More than 70% of people find advertising ‘sinister’ and ‘deviant’ if they dislike the company and social media enhances those feelings, according to a study by Dr Brent Coker. Dr Brent Coker, from the Department of Management and Marketing completed two experiments to examine what effect this change in consumer shopping behaviour has had on consumer perceptions towards advertising. Dr Coker, says social media is to blame for making consumers ‘wiser’, as people are now more likely to read online reviews before making a purchase than to naively believe advertising claims of having the best product. “When a consumer evaluates a product to purchase by using online channels, we adjust our attitudes according to the valence of information. It’s a no brainer. Who are we more likely to believe: the claims and promises of corporations, or the buzz and recommendations on Twitter and Facebook?” he says. Dr Coker completed two experiments to examine what effect this change in consumer shopping behaviour has had on consumer perceptions towards advertising. In the first, three groups watched an ‘emotive’ mobile phone ad –one with no sponsor or logo attribution, one where the sponsor was a disliked brand and the third where the sponsor was a liked brand. The second experiment was similar, however the ad was classified as more informative. The study found 51% of those who saw the disliked brand ad found it ‘dishonest’,

while 70% also found it ‘deviant’. Participants also hated the brand more than before they saw the advertisement, because of sinister attributions. Only 26% of those in this group found the ad ‘meaningful’, compared to 67% of those who saw the unbranded version.

from salespeople, who are becoming increasingly creative in the hunt for customers.” “For a company that is already on the radar of consumers, this means that extremely well crafted – and expensive – advertisements can evoke

“Who are we more likely to believe: the claims and promises of corporations, or the buzz and recommendations on Twitter and Facebook?” “Open ended questions and analysis found that people resented the disliked company for making an otherwise great ad, and trying to convince them they were good, when people really didn’t like the company in the first place,” says Dr Coker. “When asked why they rated the brand as they did, the overwhelming response was due to evaluations they had read online in social media forums. If a company is already disliked, good advertising can actually ‘go bad’. Spending thousands to turn things around may actually just make things worse.” Dr Coker says consumers are more likely to experience ‘Sinister Attributions’ when exposed to corporate marketing – an instinctive survival mechanism that stops us being naive in the wild when being hunted by predators. “Recent research has found evidence of the same attributions being released

sinister attributions in consumers. The consumer’s reaction is often ‘I hate this company for trying to talk me into liking them’. More exposure to community attitudes through reading blogs, Facebook, and Twitter enhances such feelings, says Dr Coker. “Corporations are now more transparent as negative buzz transfers almost instantly, reaching millions of people. Corporations can no longer afford to pull the wool over consumers’ eyes. The burger in the box that doesn’t look like the picture is no longer acceptable.” STUDY MARKETING WITH US

Major in marketing as part of the Bachelor of Commerce. Find out more at Explore your graduate study options in marketing at: www.gsbe.unimelb.

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Death of a salesman?


Exploring the complexity of food security Access to food is the critical element in the complex issue that is food security. By Associate Professor Donald MacLaren of the Department of Economics. According to the Food and Agriculture Organisation (FAO), food security “… exists when all people, at all times, have access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.”1 The key word here is “access”. It has two components: the first is the physical availability of food; and the second is that people have sufficient income to turn physical need into effective purchases, sufficiency depending in part on prices. The distinction is important in explaining how food availability and famine can co-exist. Since the end of the world food crisis in the mid-1970s, the availability of food at the global level has not been a concern. A combination of the ‘green revolution’ in wheat and rice production in developing countries, together with the excessive price-support policies for farmers in most developed economies has ensured, until recently, a plentiful supply of food on world markets. For most poor netimporting countries, a combination of the associated low world prices as well as food aid, such as that provided through the United Nations World Food Programme, has helped to ensure availability. However, a slackening of investment in agricultural research and, since

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1995, limits placed by the World Trade Organization (WTO) on the extent to which governments are permitted to support their farmers through price intervention mechanisms, has each caused the rate of growth of output to slow. At the same time, there has been an increase in the growth rate of demand. An important characteristic of food markets is that, in the short run, the percentage change in price is substantially greater than the percentage change in quantity. This characteristic provides one explanation, amongst several others, for the upward spike in food prices that occurred in 2007-08 and again in recent months. Between 1990 and 2005, the price index for food products (i.e., the weighted average price of individual food items) constructed by FAO was approximately constant at 106, where 2002-04 =100. This means that over the period 1990 to 2005, prices were 6 per cent higher than in 2002-2004. By 2008, the index had doubled to 200, thereafter falling to 157 in 2009, before increasing to 185 in 2010 and to 233 at the beginning of this year. However, averaging weekly or monthly data to yearly data masks some very high short-run volatility. For example, the price of rice more than doubled during the first five months of 2008. Averaging across

commodities can also mask short-run volatility. For example, the price of sugar is more volatile than the average price for cereals. The effects of this volatility on food security in poor countries are not altogether straightforward. It is necessary to separate poor households into those that are net suppliers of food and those that are net buyers. When prices rise, the former gain and the latter lose, while the outcome is reversed when prices fall. The net suppliers are the larger farm households, while the net buyers live in both rural and urban areas. With poor households spending about 70 per cent of their incomes on food, a doubling of food prices in a short period causes considerable distress, malnutrition and even starvation. The policy implications for governments are not straightforward either. When market prices are low, governments want to raise them to some “fair” level to help producers and when they are high, they want to reduce them for poor consumers to some “fair” level. These outcomes can only be achieved through separating producer prices from consumer prices. To do so in a way that does not cause a distortion of the market is extremely difficult however and few governments have been successful. 1. Food and Agriculture Organisation (FAO), Special Programme for Food Security


Many governments continue to exacerbate the volatility of world prices by pursuing policies of self-sufficiency and domestic price stability for staple foods. Unfortunately, such policies discourage other governments from implementing more open trade policies that would moderate international price volatility. In 2007-08, most governments in developing countries intervened at the border: exporters taxed or banned exports while importers reduced tariffs. Both had the effect of reducing the size of the price increases in their respective domestic markets but magnifying the size of the increase in the international market. As a consequence, there is now pressure in the Doha Round trade negotiations in the WTO to introduce new trade rules to prevent governments from restricting exports of food products when international prices are rising sharply. Such a rule would prevent importing countries from losing faith in the international market and pursuing costly self-sufficiency policies. Food availability in the future will depend on the availability of inputs (land, labour, capital, technology, water and the management skills of producers); the quality of these inputs; the efficiency of the distribution system, currently losing approximately one-third of production to spoilage; global warming; the demand for bio-fuels; and the economic signals given by markets and by governments to producers. There is growing awareness that, unless there are substantial developments

in, and adoption of, new technologies in production and distribution, and improved economic signals to encourage adoption, the rate of growth of food

per capita food demand, otherwise real prices of foodstuffs will increase over time as will their volatility. If these outcomes are realised, they will reduce food security

“Effective demand for food in the future will depend on population size and the level of per capita income. The world’s population is forecast to grow from 7 billion today to 9 billion by 2050.” production will continue to decline especially in the poor countries in which population growth is highest.

for an increasing number of the poor and malnourished, a number that today is already approaching one billion people.

Effective demand for food in the future will depend on population size and the level of per capita income. The world’s population is forecast to grow from 7 billion today to 9 billion by 2050. However, the effect of such an increase in population does not translate as a simple linear relationship into the required increase in food production.

An analysis of food security and the variables that determine it can be found in: • World Bank (2008) World Development Report 2008: foodcrisis/ • World Bank (2011) Food Crisis: • OECD (forthcoming) Agriculture and Food: Feeding Nine Billion People: sp?sf1=identifiers&st1=9789264080836

The FAO has estimated that this population increase will require a 70 per cent increase in food production because, as per capita incomes increase, consumers’ preferences for different types of food change. There is increased demand for animal products which leads to an increased demand for cereals for animal feed, a decreased demand for cereals for direct human consumption but an overall increase in the demand for cereals. It is essential that measures are taken to ensure that the growth in per capita food production keeps pace with growth in

A version of this story first appeared in the University of Melbourne publication The Voice.


Major in economics as part of the Bachelor of Commerce. Find out more at Explore your graduate study options in economics at: www.gsbe.unimelb.

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Building global foundations By Rees Quilford

Construction engineering provides the foundations of society: the buildings, bridges and roads. Engineering is big business, involving multinational players and increasingly complex work practices. Big engineering projects are largely undertaken by teams of engineers whose members are globally dispersed. Effective coordination is crucial for success, yet team coordination practices vary substantially with national culture. Dr Tine Koehler of the Department of Management and Marketing is a member of a multinational interdisciplinary team conducting research into the coordination practices on large multinational engineering projects. The team, which includes Associate Professor Catherine Cramton from George Mason University, Professor Raymond Levitt from Stanford University, and Dr. Renate Fruchter from Stanford University, was recently awarded a US$400,000 National Science Foundation grant for their study “Culture and Coordination in Global Engineering Teams.” The three-year study is targeted at uncovering culturally-specific coordination practices and their effect on the global coordination of engineering teams. The researchers want to learn about culture-driven coordination differences to the point where they can build successful computer simulation models to predict culture-driven behaviours and coordination clashes in real global teams.

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According to Dr Koehler, research in the area of global teamwork has often tended to focus on the challenges rather than the positive outcomes, which their project focuses on. It seeks to predict likely points of coordination failure by aiming to determine how cultural coordination preferences in multi-cultural globally-distributed teams “affect their capacity to coordinate highly precise work and achieve innovative, safe, timely and cost-effective outcomes.” The team has begun the data collection process, focusing on large building projects of university buildings in a number of different countries. Dr Koehler

one in Germany, and a third research site here in Australia will be added soon. The data collection method includes interviews with subject matter experts and on-site observations of the coordination activities of engineering design teams in both mono-cultural and multi-cultural settings. The researchers observe engineering teams’ communication and coordination activities across a range of disparate locations and cultural settings in order to identify patterns of conflicts. Based on the findings the research team aims to develop intervention techniques to circumvent those situations.

“The three-year study is targeted at uncovering culturally-specific coordination practices and their effect on the global coordination of engineering teams.“ says they aim to assess how work is coordinated during different phases of the construction process, “We plan to compare data from different locations and different countries to uncover underlying cultural differences.” Data is currently being collected from two University building projects, one in the US and

It is apt that the research team itself has a distinct multinational, inter-disciplinary, and globally dispersed flavour. “It is a bit of running joke” says Dr Koehler “we have a German educated in the States with a psychology background, now lecturing in international business in Melbourne,


Findings from the project have been presented at several international conferences in 2010 and 2011 and the team aims to translate their findings into a teaching context. They hope their research will inform engineering education practices and ultimately, better prepare engineering students for the challenges they are likely to face working

and learning are “ Leadership indispensable to each other.

- John F. Kennedy, 1963

on multinational projects. “This research program will help engineers – and others who work in multicultural, multi-national project teams – become more adept in anticipating and working across different cultural expectations related to project coordination,” says Dr Koehler.

for engineering education and practice. We also offer a new approach to capturing the complexity of teamwork – an approach grounded in scripts theory that has the potential to influence research across disciplines.”

Society relies on the buildings, bridges and roads its engineers build. However, infrastructure of that sort can only be built with effective coordination and teamwork. Dr Koehler hopes their research will provide a better understanding of these concepts, “Recommendations will be developed


Major in management as part of the Bachelor of Commerce. Find out more at Explore your graduate study options in management at: www. management/

GSBE Never stop learning In today’s ever-changing environment, it is vital to understand the principles of business and economics, learn from experience and innovate in sustainable ways. At the GSBE we combine academic rigour with fresh perspectives to develop graduates who provide leadership in business, government and the community.

Whether you’ve just completed your undergraduate degree, are looking to change career direction or want to acquire specialist skills, we have a program for you. Discover our wide range of full and part-time study options, scholarships and support services at

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ZO170105AF CRICOS: 00116K

a South African engineer and a Romanian engineer trained in Israel, who are both based on the West Coast of the US, and an American management professor based on the East Coast of the US. It is an interesting mix.”


Rural accountants still number one with local businesses Local accountants are bucking the trend for online services with rural and regional businesses preferring local service when it comes to accountancy firms, according to study by Professor Colin Ferguson. By David Scott The Public Accounting Firm Services in Rural and Regional Australia study of 309 small to medium sized enterprises (SMEs) across Australia found that nearly all were always happy with the service they received from local accountancy firms. More than 83% of respondents also indicated they had no intention of changing practices in the next two years, while 59% had been with their chosen practice for at least ten years. The ARC funded Linkage Project was a joint initiative between the University of Melbourne, CPA Australia, Deakin University and Victoria University, and surveyed 95 different cities and towns across Australia. It’s the first comprehensive academic study to specifically investigate public accounting firm services generally in rural and regional Australia. The survey took in eight specific industries, including manufacturing and agriculture, across all Australian states and territories, across two months in 2008. This latest research monograph follows a report released last year that showed accountants were concerned about an undersupply of practitioners in rural areas.

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Professor Colin Ferguson from the Department of Accounting and Business Information Systems said the study provided was mostly positive news for accountants, as the majority of respondents were happy that service needs were always or nearly always met. “This was especially the case for services in the traditional accounting, tax and auditing categories.

indicated that the promptness and responsiveness of accounting services was a concern, as were the cost of fees and billing systems. Professor Ferguson said the survey showed good trust in local business at a particularly volatile time. “At the time of the survey in late 2008, many rural and regional communities were suffering from

“More than 83% of respondents also indicated they had no intention of changing practices in the next two years, while 59% had been with their chosen practice for at least ten years” “The most common reasons cited by the respondents for selecting their accounting practice were the high standard of service received, and a previous history with, or recommendation for the practice. It reinforced the importance of personal connections in the accountant–client relationship. “Hence, despite the staff shortages being experienced by accounting practices, the rural and regional SMEs are generally very satisfied with the quality of the services they receive from their accounting practice, a fact reinforced by the generally long periods for which SMEs had been with their accounting practice.” However it wasn’t all good news for country practices. Some respondents

more than eight years of drought, while the global financial crisis had begun to hit. “That country businesses remained with local accountancy firms during periods of significant restructure in the face of restricted water supplies and credit restrictions is a vote of confidence in the abilities of such businesses, and this study really confirmed that.” Study accounting with us

Major in accounting as part of the Bachelor of Commerce. Find out more at Explore your graduate study options in accounting at: www.gsbe.unimelb.


Excited or depressed: Investor mood swings Professor Paul Kofman explores investor mood swings in search of a reliable method to predict investor confidence. By Danielle Roller It seems natural to assume that investors would be influenced by market conditions when considering how to invest their hard-earned cash. According to Professor Paul Kofman of the Department of Finance, traditional research in this area makes no such assumption, although the emergence of behavioural finance is trying to explain various apparently irrational investment decisions. “Previous behavioural research in the area of investor confidence has already established that investors overestimate very unlikely outcomes. For example they are likely to overestimate the possibility of very high positive returns and very low negative returns,” Professor Kofman explains. This research does not take into account downturns in the market. Or upturns, for that matter. Professor Kofman is looking into the mood swings of investors in the hope that a more reliable method of predicting dips and rises in investor confidence can be found. Professor Kofman’s work, conducted with Rachel Pownall from Tilburg University in the Netherlands, shows that investors’ mood swings are very likely to be tied to the ups and downs of the market. “Investors become increasingly risk seeking and excited during an expanding (bull) market and much more risk averse and depressed in a bear or contracting market. Our research has shown that these perceptions are much more dependent on existing market conditions than prevailing research would have us believe,” Professor Kofman explains. “Investors also overestimate the likelihood of the market remaining in a bullish

state and similarly in bad times they become all pessimistic and don’t see a way out – or in statistical terms they then overestimate the likelihood of the market staying bearish. We see these attitudes reflected in option prices where investors pay a premium to buy or sell an equity portfolio at a fixed price at a future

gains best describe investors’ practical risk attitude as distinct from a finance professor’s rational assessment of risk and return.” Professor Kofman’s research hypothesis differs from traditional finance theory, which he says, “has investors neither moody nor upbeat.” It also differs from

“Investor moods are hard to change despite clear signals of changing market conditions” date. To determine the premium they are prepared to pay for the guarantee, they need to work out their best expectation of what the actual price of the portfolio will be at that future date. We work the other way around. We take the option premium as given and then ‘back out’ the implied expectation. Once we have this ‘actual’ expectation, we can compare it with a ‘rational’ expectation. The difference reflects investors’ behavioural attitudes.” “Finance brokers have long been well aware of the vagaries of investor moods. When the market is surging investors will flock to it, expecting ever more unrealistic gains and allocating their portfolios accordingly. When the inevitable downturn follows, investors will turn increasingly pessimistic yet hold on to their risky portfolios to avoid capitalizing losses. When they finally reallocate their portfolios to low-risk investments, they subsequently refuse to respond to market turnaround. Investor moods are hard to change despite clear signals of changing market conditions. Unrealistic expectations of extremely good or bad returns, and a clear separation between losses and

current behavioural finance theory, which Professor Kofman says has investors simultaneously moody and upbeat, overestimating extremes on both sides. “Both of these theories ignore prevailing market conditions, assuming investor moods are not based on market highs and lows. Our hypothesis has investors moody in bad times and upbeat in good times. Both scenarios lead to unrealistic expectations and potentially unwise investment decisions.” “Given that market conditions are persistent, we hope to be able to predict changes in investor confidence, and therefore anticipate mood swings. That won’t prevent stock market crashes, but it will help understand stock market bubbles and perhaps predict when they deflate.” STUDY FINANCE WITH US

Major in finance as part of the Bachelor of Commerce. Find out more at Explore your graduate study options in finance at: www.gsbe.unimelb.

Never stop learning 9


Survival of the fittest: businesses put to the test The agility of Australian organisations is being put under the microscope in a study by the Faculty of Business and Economics and leading professional services firm PwC. By David Scott

“Studying agility across strategy, operations and culture is like considering the organisation as a whole – its mind, body and soul”, says Professor Graham Sewell, Head of the Department of Management and Marketing. Sammy Kumar, PwC Consulting Leader said the concept of agility is emerging as a key indicator of organisational success. “Agility will be one of the most critical assets for companies over the next decade, recognising that intangibles such as people, brand and digital connectivity will be greater drivers of value than traditional assets. “Highly agile organisations are able to respond to dynamic change, capitalise on opportunities and address risks faster and more effectively than their competitors,” Mr Kumar said. Up to 120 organisations will be involved in the study, which will feature direct involvement of CEOs and senior executives from sectors ranging from banking and manufacturing through to professional services and not-for-profits. “We are aiming to find out what really makes some companies better able to survive, adapt and thrive than others,” said Mr Kumar. 10 Faculty of Business and Economics

The study will investigate the full range of factors that affect an organisation’s agility across the three key domains of strategy, operations and culture. Professor Graham Sewell, said that the study will be the first time such a broad-based approach to understanding

help Australian businesses increase their competitiveness and risk management by focusing on agility. “When you consider the dynamic nature of our increasingly globalised economy, Australian businesses now more than ever need to understand the relationship

“Studying agility across strategy, operations and culture is like considering the organisation as a whole – its mind, body and soul” the determinants of agility has been established.

between agility, change and organisational success,” said Mr Kumar.

“Studying agility across strategy, operations and culture is like considering the organisation as a whole – its mind, body and soul”

The University of Melbourne-based research team is being headed by Professor Sewell and will also draw on expert input from human resource specialist Dr Adam Barsky and organisational psychologist Dr Michael Zyphur, as well as consulting experts within PwC.

“Agility has never before been approached in such an integrated, holistic manner, with a process that considers multiple indicators to equip companies with the capacity to thrive in the midst of change.” “The Agility study will lead to an original, cost-effective approach for corporate, government and not-for-profit organisations alike to manage risk, at the same time boosting their adaptability and flexibility,” said Professor Sewell. Mr Kumar added that the insights gained from this research project will

Partnering with us

There are many ways in which partnering with the Faculty of Business and Economics can benefit your organisation and staff. Find out how you can engage with us at:

A major new research project is working to help better understand how education and training can overcome social and economic disadvantages. By Rees Quilford A new partnership between the University of Melbourne and the National Centre for Vocational Education Research (NCVER) aims to build the knowledge base for policy makers and practitioners. “It is an issue high on the government’s policy agenda”, says Dr Duncan McVicar, Principal Research Fellow with the Melbourne Institute of Applied Economic and Social Research. “Growing up in a low socioeconomic environment, living in a remote area, or having a disability can all contribute to poor employment outcomes and social exclusion. Participating in tertiary education and training can help overcome such disadvantages.” A major policy concern is that people from disadvantaged groups are less likely to participate in tertiary education and training and may get less benefit from doing so than their more advantaged counterparts. “We want to know where the gaps are, how big they are, why they exist and what can be done about it”, Dr McVicar said. The research program entitled “Promoting social inclusion for disadvantaged groups through education and training” will be funded by a three-year research grant from NCVER.

The grant was recently announced by NCVER Managing Director, Dr Tom Karmel who said “the research aligns with new national research priorities for tertiary education and training, exploring significant issues facing Australia’s tertiary education sector”.

“Growing up in a low socioeconomic environment, living in a remote area, or having a disability can all contribute to poor employment outcomes and social exclusion” Dr Karmel added that “this [research partnership] approach helps to attract high calibre researchers, build a significant body of knowledge and promote a partnership between researchers, policy-makers and practitioners.” The Melbourne Institute is a department of the Faculty of Business and Economics. It is Australia’s leading and longest standing research institute in the field of economics, undertaking cutting-edge research into key issues relevant to contemporary economic and social policy. For more information go to:

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Overcoming disadvantage through education


Graduate students guide shire decisions in regional Victoria Local government and businesses from Strathbogie to Ballarat are making more informed decisions on everything from the analysis of rate income to the economic impact of reusable water in public facilities. By David Scott International students from the Graduate School of Business and Economics, all volunteers for the inaugural Work Integrated Learning (WIL) Volunteer Regional Business Program, will spend up to three weeks of their semester break in regional areas applying the knowledge they’ve learnt in the past 12 months. The Moira Shire volunteers will help the council produce a business plan for local entertainment services and facilities to stem the drain of young people away from the region, while students at the Strathbogie Shire will participate in a cost analysis to help the council better rationalize its rate income stream. A third group, coordinated in conjunction with Dookie College, will be based at Mitchelton Winery and will assess the carbon footprint, from paddock to plate, of the processes involved in producing wine and fruit products.

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The final group will work closely with the Committee for Ballarat to help ascertain the economic impact on employment of the proposed Ballarat West Link road in the developing airport precinct. They will also have the chance to work on research into the economic impact of the implementation of reusable water into public facilities in the Ballarat Shire. Program Coordinator Sue Elston from the Faculty of Business and Economics Careers Centre said the program was a winner for both the students and the local community. “For students, it provides invaluable vocational work experience. The community also benefits from access to a group of dedicated and highly trained volunteers,” she said. “This is a crucial project for international students to get outside the “bubble” of university life and embrace the Australian community.”

“Not only will the students enjoy the hospitality of regional communities, they will have the opportunity to interact with many potential employers. With professional skill shortages increasing in regional Australia, this is a great opportunity for students to build their CV and career prospects.” Jingjing (Queenie) Yang, one of the many international students volunteering for the project, agrees. “I have just completed my studies and I’m finding it difficult to get a job. I have no local experience and no local networks. With the WIL Volunteer Regional program I will get the experience to put on my CV. I’ll become part of an Australian community and I also hope to meet potential employers.” The program is part of a collaboration between the University of Melbourne, VECCI and regional business networks.

A group of six BCom students are making family history by commencing their undergraduate studies at the University of Melbourne. By David Scott The students are the first in their immediate families to ever undertake a university education. All have been provided the opportunity by the Faculty of Business and Economics First in the Family scholarships. The scholarships, offered under the University’s Access Melbourne criteria, provide an allowance of up to $10,000 in the first year of study, as well as priority access to a residency at Ormond College. Suzanne Dixon, Director of the Faculty’s Advancement and Marketing Unit, said the scholarships provided a greater opportunity for those who deserved it. “Presenting new opportunities and opening doors that might otherwise

“To be the first person in my family to study at university is a big achievement,” said Tran. “Both my parents received an education level of under year 10, so I am very happy and excited. “Now that I’m about to study, I’ve become a role model for my two younger brothers who I hope one day will follow in my foot steps and go to university as well. “I’m looking forward to it. A university qualification enables me to expand my future, and lets me open doors to places I want to go, and jobs I want to do. It expands my knowledge and makes me proud knowing that I achieved something that my parents always wanted to.”

“To be the first person in my family to study at university is a big achievement” have remained closed to disadvantaged and under-represented Australian students is the driving force behind the scholarships,” she said. “It recognises that for these students, going to university is just as much about changing things for themselves as it is for their families.” Danmy Tran is one of those who received the scholarship, and said the scholarship was now a point of pride in the family.

Professor Deborah Cobb-Clark, Director of the Melbourne Institute of Applied Economic and Social Research, said the impact of education could be quite profound on families. “Education is the absolute key to inter-generational social mobility. People who have grown up in disadvantaged circumstances find it harder to access the education system. “When no one in your family has gone to university before, it can be incredibly daunting to make such a transition – the First in the Family scholarship program addresses this challenge head on.”

Giving bright minds a brilliant future University of Melbourne students will have greater access to support scholarships to study business and economics with the launch of the Melbourne Foundation for Business and Economics. The Foundation was launched by the Chancellor, The Hon Alex Chernov, the Vice-Chancellor, Professor Glyn Davis, Dr Peter Yates, Chairman of the Business and Economics Board, Rupert Myer, Board member and Professor Margaret Abernethy, Dean of the Faculty of Business and Economics, alongside leaders from business, government and the notfor-profit sector. 2011 Australian of the Year and Bachelor of Commerce alumnus Simon McKeon provided the keynote address on the future of business leaders in Australia. Created to raise funds in support of scholarships and access programs, the Melbourne Foundation for Business and Economics aims to ensure that the most talented students will gain the best possible education regardless of geography, financial hardship or community. Information about the Melbourne Foundation for Business and Economics can be found at giving/foundation.html

First in the Family recipients Danmy Tran, Avalon Arifin, Wing Dat Ho, Dalex Truong and Shuang Xing with Suzanne Dixon (centre left)

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lifelong learning

Making family history in the Bachelor of Commerce

lifelong learning

Good corporate governance the foundation of doing business There are vast differences in the way in which corporate and public governance is approached in Australia compared to the rest of Asia. These differences were the focus of a recent Executive Education program held at the Graduate School of Business and Economics (GSBE). By Rees Quilford Differences to corporate and public governance practices and the associated risks are important considerations for businesses and business people working in Asia according to Associate Professor Peter Verhezen and KPMG’s Peter Nash who both presented at the two-day Governance and Risk Management in Asia program. Dr Verhezen is a Visiting Associate Professor at the GSBE and regularly advises boards of organisations and top executives to improve their overall performance, emphasising the importance of good corporate governance, ethical leadership and sustainable strategies embedded within integrated risk management policies and structures.

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The importance of cultural intelligence in developing business leaders who are adept at navigating the complex personal, institutional, political, social and economic environments in Asia was a key focus area for the diverse group of participants, which included senior professionals from Oxfam Australia, ANZ, NAB, Invest Victoria, Aurecon, and the Department of Justice. These are issues that face Australian businesses and business people working throughout the economies of Asia, “Australia is often perceived as a benchmark in terms of best corporate governance practices for the rest of Asia,” according to Dr Verhezen. “Only Singapore and Hong Kong are almost on par in terms of corporate governance with our governance standards.”

Different approaches to relationships and the notion of power require serious consideration, “In Asia, relationships and the power attached to that are sometimes more important than contractual agreements. Moreover, one has additional specific risks related to assumed governance practices. This is why investors are willing to pay a premium for companies well governed in Asia. It makes them slightly more predictable,” says Dr Verhezen. Detailed knowledge of the local environment and customs are also essential in managing a successful operation, “When do you know a gift turns into a bribe? Who really runs the company? What are the political and country risks in addition to the firmspecific risks?” asks Dr Verhezen.

Associate Professor Peter Verhezen

The risk perspectives of the newly globalising Asian businesses – from China, East Asia and India in particular – was another key focus area of the course. “One should be aware of the differences in order to avoid bad surprises. The risks can be quite significant,” says Dr Verhezen. Peter Nash, National Managing Partner Audit at KPMG Melbourne, says that good corporate governance practices are the foundation stone of doing business in an ethical and proper manner, “Without solid governance structures and practices organisations expose themselves to a range of underlying risks.” The typical governance structures in Asia can differ significantly to typical AngloSaxon corporate governance structures and legislation according to Mr Nash, “What we are seeing in a number of developing counties – Indonesia, Thailand and China, for example – is that corporate governance practices are still evolving.

There are many companies based and operating in Asia that have very solid business practices but there are also many others who operate with less than transparent practices.” Dr Verhezen cites the adoption of an ‘insider’ shareholder model in Asia as an example of another issue that businesses need to consider when operating in the region. “With an ‘insider’ governance model in Asia, majority shareholders – often the controlling families or states – may attempt to expropriate assets at the expense of minority shareholders. In our Western culture – especially in an AngloSaxon “outsider” shareholder model – all shareholders are reasonably well protected by [rule of] law. Independent directors are supposed to look after the interests of all shareholders, especially minority shareholders,” he says.

operating in Asia, “Most companies are aware that there are risks, but don’t know their exact nature. The risks in Thailand or Indonesia may be slightly different in Vietnam and China,” says Dr Verhezen. According to Mr Nash the benefits of executive training in governance and risk management are multi-faceted, “training of this type promotes a greater awareness around the need to develop good governance structures and the associated risks – hopefully leading to better practices. I would also hope that people are better equipped to deal with the business practices they may encounter when working with or in those developing countries,” he said.

Dr Verhezen and Mr Nash agree that an awareness of the different and often specific risks is critical to managers

Executive Education The Graduate School of Business and Economics offers a diverse range of executive education programs. Programs are scheduled throughout the year on a range of topics across a wide range of strategic business areas. Designed for experienced professionals, these programs are delivered in intensive format. The GSBE also works with organisations to develop and deliver customised programs in many areas of business and economics. For more information please visit:

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lifelong learning

“When do you know a gift turns into a bribe? Who really runs the company? What are the political and country risks in addition to the firmspecific risks?”

lifelong learning

New economics doctoral program first of its kind in Australia The University of Melbourne’s new four-year economics doctoral program will help lift the standard of doctoral education nationally according to leading economic experts. By Rees Quilford

Professor Nilss Olekalns, Head of the Department of Economics at the Faculty of Business and Economics, says the four-year doctoral program adopts a structure widely acknowledged as international best practice, “This is the only program of its kind in Australia. Graduates from our program will receive world class instruction, both in terms of coursework and research training”. “Gone are the days where the best students were forced to move to the United States or Europe to receive enhanced economics training. Graduates can now receive a unique Australian experience, advanced coursework providing mastery of the core areas of economics as well as key subdisciplines within economics,” says Professor Olekalns. Under the new program, doctoral candidates complete a rigorous twoyear coursework component and go on to complete a sustained body of independent and original research in the field of economics and econometrics. The extra year of advanced coursework brings the program into line with international best practice and provides greater economic research outcomes than are currently possible under conventional models of economic training in Australia.

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Students in the program will also have the opportunity to apply for a generous scholarship arrangement that covers all fees and provides a living allowance above what is provided by the current Australian Postgraduate Award.

Professor Nilss Olekalns

Professor Deborah Cobb-Clark, Director of the Melbourne Institute of Applied Economic and Social Research, completed her doctorate in the US and believes this program will lift the standard of doctoral education nationally. “This is the model adopted by virtually all North

The University of Melbourne was recently named as the first and only Australian university to rank in the Top 100 of the Business and Economics subject ranking in the latest Shanghai Jiao Tong University rankings.

Professor Deborah Cobb-Clark

“The Faculty’s economists are ranked amongst the top in Australia and we have developed a Doctoral program befitting that rank” American institutions, where the doctoral program consists of two years coursework followed by work on the dissertation. It provides the foundation for studying important problems facing society.” “By adopting international best practice, the new program will increase the ability of graduates to undertake critical research and solve complex problems. These vital skills will enhance graduates’ employability in government, industry, the not-for-profit sector and academia.”

“The Faculty’s economists are ranked amongst the top in Australia and we have developed a doctoral program befitting that rank,” says Professor Olekalns. More information about the four-year economics doctoral program can be found at

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