Michael Withers calls his undergraduate years as a business-school student in Mississippi “interesting.”

To say the least.

During his first week of classes at Mississippi State University in Starkville, the United States was attacked by terrorists who took command of passenger jets on the morning of September 11, 2001, and flew them into New York City’s World Trade Center and the Pentagon building in Washington, DC, killing almost 3,000 people.

Less than three months later, on December 2, 2001, the Enron Corporation, an energy giant based in Houston, Texas, filed for Chapter 11 bankruptcy protection in a New York court, sparking one of the largest corporate scandals in U.S. history…to that time. By the summer of 2002 though, a company headquartered in Clinton, Mississippi, called WorldCom, would take corporate malfeasance and the overstating of corporate assets to even greater levels of accounting fraud and executive greed.

“And don’t forget the ‘dot-com’ bubble,” Withers reminds from his office today at the Texas A&M University Mays Business School, where he holds the Gina and Anthony Bahr ('91) Professor in Business chair; teaches in the Department of Management and conducts research in the fields of corporate governance, resource dependence theory and entrepreneurship. That bubble, beginning in the late 1990s, hinged on excessive speculation of Internet-related companies. By the time the bubble burst in the fall of 2002, the NASDAQ-100 had lost almost 78 percent of its value from the peak of the dot-com craze. 

By the time Withers completed his undergraduate degree in business administration with an emphasis in management, the business world, perhaps more than ever, was no longer for the faint at heart. But Mike was committed, in part because a textbook in his Strategic Management class had “spoken” to him; a textbook with ties to the Texas A&M Mays School.

The Mays name, it turned out, would come up a lot during his pursuit of an academic career. 

The Essence of Greed

            Michael Withers was born in Philadelphia, Mississippi, and the year he came into the world there, 1981, was the same year that a young Philadelphia high school athlete was taking the college football world by storm. It turns out the story of Marcus Dupree is relevant to the business research Withers has conducted throughout his academic career because the courtship of an uncommonly talented high school football player reveals how greed can adversely influence the decisions made by those who have achieved success and desire more.

While wrapping up his senior year at Philadelphia High School, Dupree waded through hundreds of scholarship offers before announcing his commitment to play football for the University of Texas. Ultimately, he attended the University of Oklahoma, and that change of heart was cause for much speculation. Dupree played at Oklahoma for a year and a half before leaving school and eventually signing, in 1984, a multi-million dollar professional contract to play for the New Orleans Breakers of the original United States Football League. His career there was cut short by injury, and his earnings were depleted by shady characters who took advantage of him.

No less a source than the Harvard Business Review calls the 1980s the “Decade of Greed.” Who can forget the immortal words written by Oliver Stone and spoken by Michael Douglas in the 1987 film, Wall Street.

“I think some of the corporate scandals of the early 2000s were tied to that ‘Wall Street’ mentality of greed being an acceptable business practice,” Withers says. “That sort of thinking did pique my interest and probably set the stage for when I started to hone my research interests.”

According to a Securities Exchange Commission (SEC) investigation, the WorldCom scandal, “was accomplished in a relatively mundane way: more than $9 billion in false or unsupported accounting entries were made in WorldCom’s financial systems in order to achieve desired reported financial results…Most of WorldCom’s people did not know it was occurring. Rather, the fraud occurred as a result of…the way WorldCom’s Chief Executive Officer, Bernard J. Ebbers, ran the Company.”

Culpability in the Enron case was revealed to be far more broad in scope. According to the findings of the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs of the United States Senate, a sizable portion of the blame rested with the Enron Board of Directors, who:

“Companies like Enron and WorldCom make terrible decisions often times simply because of hubris,” Withers says, “whether it got them into the situation or they just thought they could beat the system.
“It’s kind of interesting when you’re the CEO of a public company. How do you measure yourself? In a lot of ways, it’s how big that dollar sign is, and there’s a competitive drive that inherently fuels the hubris. The Enron documentary was called The Smartest Guys in the Room, and I think we still see that mindset as an issue in strategic decision-making today.”

Two decades have passed since the Enron and WorldCom scandals–and others like them–rocked the American landscape. As for Withers’ own academic journey, he graduated from Mississippi State–having previously attended a community college–in 2002, then received his MBA from Southern Mississippi University in 2004. From there, he pursued an MA in Management from the University of Alabama, receiving that degree in 2005, then began work on a PhD in Strategic Management at the Tuscaloosa school.

Coincidentally, the Alabama football program during Withers’ time on campus was serving an NCAA-mandated three-year probationary period for recruiting violations.
Ultimately, Withers left Alabama, not because of sanctions to the football program, but upon the advice from someone there with ties to Texas A&M.

The Aggie Network

“Micki Kacmar, was a professor in the Department of Management who had earned her Ph.D. in Human Resource Management from Texas A&M,” Withers says. “While she was at Alabama, she taught graduate courses in Business Ethics. She knew me and knew how hard I was working in pursuit of my own PhD, but my studies weren’t aligned with my interests. She reached out to several schools on my behalf, and one of those calls was to Bert Cannella, a professor at Arizona State whom she knew as a result of his time on the faculty at Texas A&M.

Thanks to the Kacmar-Cannella connection, Withers transferred to Arizona State, where he met and worked with another product of the Mays School Ph.D. program. Amy Hillman would eventually serve as dean of the Carey School of Business at Arizona State, but as a professor there when Withers arrived, her academic interests–corporate political strategies, boards of directors and corporate strategy–closely aligned with Withers’. Thus, Hillman agreed to become his academic advisor.

“She was an important mentor,” Withers says today of Hillman, who was named an Outstanding Doctoral Alumni of the Texas A&M Mays School in 2008. It was in large part thanks to her recommendation, that when the time came for Withers to begin his search for a teaching and research home, he reached out to the Mays Business School.

“From that textbook we used at Mississippi State”–called Strategic Management: Competitiveness and Globalization–“through the twists and turns that led me to Arizona State, Texas A&M seemed to always be in the background of my academic journey, even before I got here to teach in 2011 as a visiting assistant professor.”

About that textbook, Withers explains, “Two of the authors of that book, Michael Hitt and Robert Hoskisson, were members of the Texas A&M business faculty when it was first published in 1995. Their co-author, Duane Ireland was at Baylor at the time, but ultimately wound up at the Mays School in 2004.”

In fact, framed posters honoring Hitt and Ireland hang in the hallway outside Withers’ office in Mays’s Department of Management. Mere coincidence, as it turns out, but still inspiring to Withers, “Their work here is revered by many, including myself,” he says.

Hitt is a Texas A&M University Distinguished Professor Emeritus. He first joined the Mays School faculty in 1985 and has held a variety of chairs, including New Ventures, Entrepreneurship and Executive Leadership.

Ireland currently holds the Benton Cocanougher Chair in Business at Mays. He served as both acting and interim dean of the school from January 2021 to the end of July 2022. Both Ireland and Hitt have received Lifetime Achievement Awards from Texas A&M, thus the posters outside Withers’ office. On the opposite end of their academic careers, both received their undergraduate and MBAs from Texas Tech University.

In addition to their textbook–now in its 14th edition, and one Withers still uses in the classroom–Hitt and Ireland have collaborated on more than one hundred journal articles, including, “Where is the Opportunity without the Customer? An Integration of Marketing Activities, the Entrepreneurship Process, and Institutional Theory,” “Resource Orchestration to Create Competitive Advantage: Breadth, Depth and Life Cycle Effects” and “Strategic Entrepreneurship: Creating Value for Individuals, Organizations and Society,”

No doubt, says Withers, Hitt and Ireland led by example in the important research they conducted, but they also helped establish formal mentoring relationships with younger faculty.

“Mike and Duane were always there for me to talk with about research ideas,” Withers says today, “Luckily, I’ve been able to work with each of them to publish papers. They're both so humble and were always focused on just doing good scholarship, great research and being of service to the department, to the college, to the university and to the academy,”

The Academy of Management is, according to its website, “the preeminent professional association for management and organization scholars. (Its) members are professors and Ph.D. students in business schools at universities, academics in related social science and other fields, and practitioners who value knowledge creation and application.”

The Business of Research

One of Wither’s first publication credits on the subject of corporate governance came under the tutelage of Robert Hoskisson after he had moved from Texas A&M to Arizona State.

“Bob had gotten involved in a debate in a journal called Academy Management Perspective,” Withers says. “We were looking at the question of why CEO compensation was on the rise. This was in the aftermath of the major corporate accounting scandals in the early 2000s and the subsequent passage of the Sarbanes-Oxley Act. At the time, Bob was revising his chapter on corporate governance in the Competitiveness and Globalization book to account for the changes in business practices ‘SOX’ brought about.

“SOX” is a less cumbersome to write and pronounce shorthand for the Sarbanes-Oxley Act.

“What we concluded then was CEOs might be paid more because they were facing greater employment risk, meaning their job is not as secure when a board is independent and objective, Our publication was a conceptual piece, meaning we didn't have any data that we were analyzing.”

Of the more than two dozen papers Withers has published thus far in his academic career, most of his research employs the “deductive hypothesis method,” That means a researcher formulates a set of hypotheses at the start of the research. Then, after relevant research methods are chosen, those are applied to test the hypotheses to prove them either right or wrong.

In the case of Withers’ chosen field, strategic management, researchers seek to measure the consequences of human behavior. Thus, psychology, sociology and economics are critical elements of the methodology.

“Those are the ‘big three,’” Withers says, “which provide the foundation for a lot of what we study. We are interested in how people interact and why they make the decisions they do. In my own research, particularly on corporate governance, the hypotheses often come down to questions of why are executives making the decisions they're making? Why do boards implement certain governance practices?

“Often it does come down to a very socialized view of the organizational context you're focused on.”
One of Withers’ most recent research collaborations resulted in the publication of a paper entitled, “Corporate directors' implicit theories of the roles and duties of boards,” in the Strategic Management Journal. Withers co-authored the piece with another member of the Mays School, Steven Boivie, along with Scott Graffin from the University of Georgia, and Kevin Corley from Arizona State.

In their abstract summary, the authors stated:

The results of those interviews led to some unexpected conclusions, according to the Strategic Management Society’s Explorer website and a story which appeared there about the journal publication.

Or, to put it in the terms of the deductive scientific method, the original hypotheses on which much previous corporate governance research studies had been based were flawed.

“Steve, Scott and I are all corporate governance researchers,” Withers says. “Early in the process of devising our methodology for the study, we realized the value of a qualitative approach. I had worked with Kevin before on some governance related work, but he’s mostly a qualitative researcher. Thanks to his expertise we were able to go beyond merely relying on secondary data. Rather, we reached out and talked to individuals directly to get a better idea of how they perceive the roles they play.’”

The Sarbanes-Oxley Act of 2002–also known as the Public Company Accounting Reform and Investor Protection Act–was the most notable piece of legislation enacted following the corporate accounting scandals of the early 2000s. The law covers a range of issues from enhanced financial discloser and auditor independence, to internal control assessment and corporate governance. Specifically, the act increased the oversight role of boards of directors.

Years later, former Federal Reserve Chairman Alan Greenspan praised SOX, saying, “The act importantly reinforced the principle that shareholders own our corporations and that corporate managers should be working on behalf of shareholders to allocate business resources to their optimum use.”

Yet, as the Boivie, Withers, Graffin, and Corley study reveals twenty years later, directors’ implicit views of their corporate governance responsibilities have shifted significantly away from the SOX mandate.

“One primary insight we gained is that directors do not operate from the assumption that their job is to protect against managerial opportunism. Instead, directors tend to possess an implicit view that their role is as strategic partners with the CEO and executive team.”

Is that good or bad? Time will tell.

“It was kind of exciting,” Withers says of the means by which that information was gathered. “Initially, we were asking questions related to the idea that most of the work of a board happens in committees. The directors we talked with told us that does happen and is important. But, if there's a strategic decision that's being made, it's going to involve the entire board.”

That knowledge altered the collaborators’ research focus.

Participants in the study–which commenced in 2017–came from across the country Many of the directors tabbed for the study, which began in 2017 and was published in 2021, were identified through Mays School’s Center for Executive Development. Of that number, several were located in the Houston area and the majority of those interviews were conducted in person.

“Face-Validity”

The qualitative methodology was somewhat new for Withers. The experience has caused him to rethink the manner in which research can be conducted.

“I think there are some benefits to the traditional approach.” Withers says. “but when you engage with executives and really talk with them about a topic, you get what we call ‘face validity.’

“The nature of explicit theory is that when you see something you say, ‘Well, that makes sense on the face of it.’ But when you talk with these directors and get insights from them that we had never really seen in our literature, it was an amazing thing. For me, the research questions that came out of that provided a wellspring of new ideas.”

In the aftermath of the “implicit theories” study, Withers has begun teaching courses within the Mays School’s Executive MBA program, providing him with more “face validity.”

“The wonderful thing about the Executive MBA students is that much of the reason why they're here is to have conversations with one another. Facilitating that is very beneficial to me, as well. It’s stimulating to hear examples of business-case scenarios that aren’t coming from a textbook, but rather from someone’s real life experience. That’s re-energized my desire to read those kinds of business books again.”

Withers says between 40 and 50 percent of his Executive MBA candidates come from the oil and gas industry. Most who enroll are looking to move up within their companies or pivot to other opportunities. The topics of interest to people who are “on the move” is providing Withers with a “new way to look at things” research-wise.

Coming Full Circle?

            As for today’s world where the financial ravages of a long-lasting global pandemic have created a fragile global economy, does Withers see a possible return to the “greed-is-good” mindset of days gone by? He does predict an imminent decline in executive compensation, and that could lead to a need, he says, for a return to more stringent corporate governance guidelines.

The world of big-time college football recruiting today has been inexorably changed. No longer must zealous coaches make under-the-table deals to the most highly-coveted players. Today, remuneration for use of a players “Name, Image, or Likeness” is above board, and players can seek the best deals possible, even if it means transferring to another school.

“Greed” is now an acceptable and encouraged practice in building and maintaining elite programs.
Will the corporate world follow suit?

“Business executives may feel the temptation to try to tip the scales again in order for their organizations to make it through the tough times,” Withers suggests. “Just recently, inflation has hit a 40-year high, which takes us back to the early ’80s and our nation’s worst recession since the Great Depression. That recovery justified, for many, the greed mentality which set the stage for the prosperity of the ‘90s and the corruption of the 2000s.”

Is that cycle in the process of repeating itself?

“Certainly it's a unique time to be a CEO,” Withers says, “Executives today are being challenged to make decisions to ensure that their companies survive long enough for an eventual return to prosperity. It’s the job of governing boards to make sure that return to prosperity does not jeopardize the investment of stakeholders.”

Rest assured, academic researchers like Texas A&M University associate professor Michael Withers will be keeping a close eye on future trends.