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  • 1.  Our troubled schools

    Posted 03-06-2009 09:50
    Maybe we ought to turn our attention to "troubled business schools" and what schools are doing to remain viable in a sinking economy. What "strategies" make sense in this environment?

    ________________________________________
    From: Business Policy and Strategy List [BPS-NET@AOMLISTS.PACE.EDU] On Behalf Of Kim Warren [Kim@STRATEGYDYNAMICS.COM]
    Sent: Friday, March 06, 2009 3:32 AM
    To: BPS-NET@AOMLISTS.PACE.EDU
    Subject: Our troubled discipline

    Sorry for cross-posting, but there has been much debate on the Management Development list that might be relevant to the BPS community.

    I still see no defence against the two main charges – that strategy research to seek explanations for profitability ratios is simply asking the wrong question, and that a focus on positioning choices misses most of what strategic management does – the result of these two failings being that we have little useful theory and few useful tools for the task. If this is plain wrong, I guess we all need to know.

    I have tried to explain both issues, with well known examples, in a new textbook opening at http://www.kimwarren.com/files/SMDExtendedOpening.pdf. Anyone who prefers listening to reading can find a slide-show on What is Strategy at http://strategydynamics.coggno.com/ [note no ‘www.’, and please forgive the plug at the end for my own stuff]. These are aimed at new-comers to the subject, so sorry for the simple language.

    One last concern about our strategy frameworks ... A focus on profitability, cash-flows or any other financial performance measure is not likely to help much with the strategic management of public services, voluntary groups or other non-profit organizations – a significant failure since such organizations make up a very large fraction of every modern economy. But perhaps these organizations share at least one concern with for-profit corporations - a need for continuous strategic management over time, in order to improve some measure of performance, even if that measure is not financial. This is also touched on in the document above.

    Kim Warren


  • 2.  Our troubled schools

    Posted 03-06-2009 10:52

    On the travails of elite universities in this current economic climate, there's an interesting piece on a "higher education bubble" that mirrors the real estate / stock market bubble at:

    http://dealbook.blogs.nytimes.com/2009/03/03/harvard-private-equity-and-the-education-bubble/

    This article is about elite schools' endowment deficits, but this economic climate has implications for all universities. Elite schools are dependent on endowment, and may find it hard to attract new donors. Less prestigious private schools depend on tuition for their operating budget – they may find it difficult to justify the value proposition as graduates find it harder to find lucrative jobs. And state schools are constrained by the state to keep tuition low and must depend on state budgets which have been hit hard.

    We're seeing hiring freezes, salary/research budget cuts, higher teaching loads, larger class sizes. With the hole in people's retirement accounts, some folks may find it prudent to postpone retirement, and with fewer people retiring it may be harder for our new graduates to find jobs.

    Would schools get more wary of granting tenure? Will we see more of a push to make do with untenured adjuncts/ term appointments?

    Our captains of industry have not come out looking like heroes. Considering most managers have at least some business school education, this doesn't reflect well on what we've been teaching them. Wonder what lessons we as educators should be learning from this. 


    On Mar 6, 2009, at 8:50 AM, Datta, Deepak K wrote:

    Maybe we ought to turn our attention to "troubled business schools" and what schools are doing to remain viable in a sinking economy. What "strategies" make sense in this environment?

    ________________________________________
    From: Business Policy and Strategy List [BPS-NET@AOMLISTS.PACE.EDU] On Behalf Of Kim Warren [Kim@STRATEGYDYNAMICS.COM]
    Sent: Friday, March 06, 2009 3:32 AM
    To: BPS-NET@AOMLISTS.PACE.EDU
    Subject: Our troubled discipline

    Sorry for cross-posting, but there has been much debate on the Management Development list that might be relevant to the BPS community.

    I still see no defence against the two main charges – that strategy research to seek explanations for profitability ratios is simply asking the wrong question, and that a focus on positioning choices misses most of what strategic management does – the result of these two failings being that we have little useful theory and few useful tools for the task. If this is plain wrong, I guess we all need to know.

    I have tried to explain both issues, with well known examples, in a new textbook opening at http://www.kimwarren.com/files/SMDExtendedOpening.pdf. Anyone who prefers listening to reading can find a slide-show on What is Strategy at http://strategydynamics.coggno.com/ [note no 'www.', and please forgive the plug at the end for my own stuff]. These are aimed at new-comers to the subject, so sorry for the simple language.

    One last concern about our strategy frameworks ... A focus on profitability, cash-flows or any other financial performance measure is not likely to help much with the strategic management of public services, voluntary groups or other non-profit organizations – a significant failure since such organizations make up a very large fraction of every modern economy.  But perhaps these organizations share at least one concern with for-profit corporations - a need for continuous strategic management over time, in order to improve some measure of performance, even if that measure is not financial. This is also touched on in the document above.

    Kim Warren



  • 3.  Our troubled schools

    Posted 03-06-2009 13:59
    Research in competitive strategy looks at far more indications of success and profitability than financial ratios. This is kind of an old complaint and has been addressed by many others. See Clark and Fujimoto for a good example of data that is more directly related to long term "success" than accounting data.

    DH
    ________________________________________
    From: Business Policy and Strategy List [BPS-NET@AOMLISTS.PACE.EDU] On Behalf Of Datta, Deepak K [ddatta@UTA.EDU]
    Sent: Friday, March 06, 2009 6:50 AM
    To: BPS-NET@AOMLISTS.PACE.EDU
    Subject: Our troubled schools

    Maybe we ought to turn our attention to "troubled business schools" and what schools are doing to remain viable in a sinking economy. What "strategies" make sense in this environment?

    ________________________________________
    From: Business Policy and Strategy List [BPS-NET@AOMLISTS.PACE.EDU] On Behalf Of Kim Warren [Kim@STRATEGYDYNAMICS.COM]
    Sent: Friday, March 06, 2009 3:32 AM
    To: BPS-NET@AOMLISTS.PACE.EDU
    Subject: Our troubled discipline

    Sorry for cross-posting, but there has been much debate on the Management Development list that might be relevant to the BPS community.

    I still see no defence against the two main charges – that strategy research to seek explanations for profitability ratios is simply asking the wrong question, and that a focus on positioning choices misses most of what strategic management does – the result of these two failings being that we have little useful theory and few useful tools for the task. If this is plain wrong, I guess we all need to know.

    I have tried to explain both issues, with well known examples, in a new textbook opening at http://www.kimwarren.com/files/SMDExtendedOpening.pdf. Anyone who prefers listening to reading can find a slide-show on What is Strategy at http://strategydynamics.coggno.com/ [note no ‘www.’, and please forgive the plug at the end for my own stuff]. These are aimed at new-comers to the subject, so sorry for the simple language.

    One last concern about our strategy frameworks ... A focus on profitability, cash-flows or any other financial performance measure is not likely to help much with the strategic management of public services, voluntary groups or other non-profit organizations – a significant failure since such organizations make up a very large fraction of every modern economy. But perhaps these organizations share at least one concern with for-profit corporations - a need for continuous strategic management over time, in order to improve some measure of performance, even if that measure is not financial. This is also touched on in the document above.

    Kim Warren