Andrew, Management Prof

Spring is on the Calendar

I haven’t forgotten about this blog. Perhaps I did, but I’ve now remembered it, and my plans for it. Having just turned in my grades for the fall 2006 semester, it’s time to think in more detail about spring 2007.

I’ll once again be teaching two sections of the undergraduate Strategy in Action capstone course. As before, each prof will use the Glo-Bus simulation. Each prof will still be free to choose his own text (we have an all-male lineup for the spring, but I expect that to change for next academic year).

I’ll stick with the concepts-only paperback of Carpenter and Saunders. I intend to post about my experiences of teaching with it any week now… but I’ve had that intention for a while. I’ll augment that text with a custom case book.

The other course I’ll be teaching is a one-credit graduate course on Blogging and Business. The syllabus will be a page at this very blog.

Understanding Business Strategy, by Ireland et al.

I should preface this review by pointing out my priorities when I’m choosing a textbook. I think that most textbooks are too big, too verbose, and too expensive. I know that some of the cost of developing a textbook goes to support materials such as presentations, case teaching notes, test banks, and so on. I wish it didn’t. I’d like the money the students pay to show up in the book the students buy. When I evaluate a textbook, I evaluate the book, not the support materials. It’s the book that I’ll be telling students to spend (very roughly) $100 on.

For a few years now, I’ve been using a paperback chapters-only text and a custom case book for my undergraduate strategy course. Each prof who teaches strategy (as I’ll from this point refer to the undergrad capstone course) here at Northeastern is free to choose books. We all use the same simulation, and are currently using Glo-Bus.

I used the Ireland, Hoskission, and Hitt text (1st edition, paperback, chapters-only version, IHH from this point on) in the fall 2005 semester, and again in the spring 2006 semester. I taught two sections in each of these semesters. I chose IHH because: the Harrison and St John book I’d been using for a few years was seeming a little too short, even for me; my initial reaction to IHH was positive; I like the “gang of three” as textbook writers, having used their first and biggest textbook for a few editions, before it got too big. (This is Hitt, Ireland, and Hoskisson’s Strategic Management. HIH is about to go into its 7th edition.)

So IHH reflects a trend toward more compact strategy textbooks. It’s a trend I welcome. Such books tend to be more compact in terms of pages than in terms of dollars. The prevalent competitive strategy is differentiation. There isn’t much price competition.

There are several explanations for the lack of price competition in the strategy textbook market (or, perhaps I should say, in the strategic management segment of the textbook market; I’m not trying to generalize to other segments). One is that it’s expensive to produce a textbook and all the supporting materials that the market expects. By the market, I mean profs. They choose the textbook, even though they don’t consume it. In this, we are similar to doctors prescribing drugs, but there isn’t a close counterpart to generics in this market.

Another explanation is that this is an oligopoly. There are only a few large publishers, aware of each others actions and likely reactions. High prices aren’t surprising in such markets. I’ll pause there with the explanations. But I will add that I’d like to see a strategy case on the textbook industry.

Although authors and publishers of strategy textbooks strive to differentiate their products, the books tend to look rather similar, from the contents pages onwards. IHH reflects this similarity in that three of the early chapters are: foundations; external analysis; and internal analysis. It’s also typical in that three of the central chapters are on strategy at the familiar levels: business, corporate, international. The other chapters are on: strategic leadership, mergers & acquisitions (M&A), alliances, and strategic entrepreneurship; none of these, with the possible exception of the last, is unusual as the focus of a chapter in a strategy textbook.

IHH write well. It might be more precise to say that their writing works well for me, and works better in this more concise book than in than in HIH. The conciseness doesn’t hurt the main attraction of their writing for me; many of their explanations and examples strike me as particularly apt. For example, here they are on bargaining power of buyers:

As buyers, cell phone carriers such as Verizon… have been gaining power over cell phone manufactuers such as Nokia… the average customer does not have a strong preference to buy, for example, a Nokia phone instead of a Motorola phone.

The quote reminds me of another issue related to the price of textbooks: the pace at which new editions come out. It supports the view that frequent new editions are necessary to keep the examples current, in terms of students’ interests and in terms of current information. The example would be rendered obsolete by, for example, a new phone differentiated well enough that it greatly increased the market power of its manufacturer. An opposing view is, of course, that new editions reduce the market for second-hand textbooks.

So far, I’ve identified ways in which IHH does what I expect a strategy textbook to do, and does it well. There are some ways in which it is less typical, and some things it does less well. To me, the most unusual aspect of the design of IHH is that there is no implementation chapter. Most strategy textbooks contain such a chapter, and discuss within it organizational structure and design. The discussion is usually based on the contingency theory that strategy and structure should fit.

IHH includes such a discussion, but it is essentially split across the levels of strategy chapters. For example, at the end of the corporate strategy chapter there is a discussion of the M-form. I can see good reason for designing the book like this: the best time to discuss structure appropriate to a strategy may well be right after discussing the strategy itself.

However, I’m not sure that splitting the implementation discussion across the mainly-formulation chapters works as well for me as I’d hoped it would. Part of the reason is that I split my strategy course into three main parts, with strategy at the different levels (business, corporate, international) as part two. The book in effect includes structure in part two, and in doing so makes the middle third rather bigger than either of the other thirds. Another part of the reason is that I find the implementation/structure discussion a useful review of the three levels of strategy, as well as a worthwhile discussion in its own right.

I could identify a few other aspects of the book that work less than perfectly for me, but they are few, most of them are relatively minor, and most of them are very subjective. Two of the exceptions I noticed fall within the chapter on M&A. There’s a discussion of market power as a motive for M&A. Nowhere in the discussion is there mention of the anticompetitive aspect of market power, and the concern that governments have about the abuse of market power. There is such a discussion in an earlier chapter, but I think that such an important issue deserved further coverage in the market power section of the M&A chapter. The same chapter refers to “Bane and Company, a strategy consulting firm.” This reference to Bain may be found under the heading of due diligence.

All in all, I was glad to see IHH, since I have great respect for its authors and for the way they explain strategy. It is a relatively compact strategy textbook, aimed at undergraduates, and that’s what I was looking for. It is a good example of such a textbook. I’m not sure that it’s the best book for me to use in future. I’ve tried to indicate the (rather large) extent to which my doubts arise from my own idiosyncrasies as a teacher.

It’s worth repeating that this is a review of the concepts-only version. The collection of cases in the full version of IHH is probably good, but I have my own evolving collection of cases that works well for me. My expectation of the IHH cases is based in part on my past use of HIH. In particular, I was pleased to see that Hoskisson is still including cases written by teams of (what I assume to be) his students; I find that these cases measure up very well to the work of experienced case writers.

In sum, IHH is a very good book, which I would recommend for an undergraduate strategy course. I make my recommendation on the basis of having used it. A year of use has shown me ways in which it’s not exactly the textbook I’d have written, but my experience is that use of a textbook always reveals such things. I hope that this review will be useful to others making the textbook selection decision, and perhaps also to people at the supply side of the textbook market.

Live From the Classroom!

Here we are in my Blogging and Business MBA class… good so far, at least for the prof…

MBA Course: Blogging and Business

MBA students here at Northeastern University may take some short, focused elective courses. This semester, I will be giving such a course on Blogging and Business. Here’s the syllabus. I’ll post here on how it goes. I’ll link to the blogs the students create for the course (if they are comfortable with my doing so).

In past academic years, I gave one of these courses on The Open Source Business.

Spring Syllabus

I’ve just posted my syllabus for the spring 2006 semester. It looks rather like my syllabus for the previous semester. I’m still using the same textbook, casebook, and simulation. But I have shuffled a few things around.

 Happy new year, semester, etc.

Academy on the Web and in Atlanta

I just signed up at the web site for the Academy of Management’s 2006 meeting in Atlanta. I was very pleasantly surprised at how simple it was. This time round, there is just one signup for the conference. That covers reviewing for as many tracks as one can stand (I’m trying to avoid being a 4-track reviewer again this year). The same signup also covers submissions. 

My sincere thanks to those who set up the site for Atlanta. It compares very favorably with the multi-signup obstacle course inflicted on AoM members in previous years. 

There is one thing I would change. It relates to the questions about whether I’m willing to serve in a role such as session chair at the conference. I chose “No” rather than “Yes” because I don’t currently know, and won’t until I know whether I have a paper accepted at the conference. My university will fund me for the conference if (and probably only if) I’m presenting. I suspect many others are in the same boat.

So I suggest a third alternative, besides Y/N, something to the effect of “I’ll let you know shortly after you let me know the outcome of the review process.” 

Didn’t Take Case to Class

I had a lot of stuff to take to (undergrad senior) class on Tuesday: case writeups to return, post-halloween candy to give out to students, textbook, etc. So I forgot my copy of the case packet. There wasn’t time to go back to my office to get it – or perhaps energy was the thing lacking.

Discussion of the case went better than it usually does. I think that this was in part because I couldn’t refer to my copy of the case, and so had to push the students more than I sometimes do. Perhaps I am too quick to refer to my copy of the case, thus letting the students off the hook.

So perhaps I should forget, or leave behind, my case packet more often. Or perhaps I should take it just in case, but not open it.

I’m not sure that this would work with every case. This was the “Moss Adams” case, by Gilinsky and Anderson. I’ve used it several times before, and like it very much.

The Market for Simulations

In a recent comment about another post on this blog, Rodger of MSI described MSI’s Capstone as “the world’s best seller.” I’d be interested to see sales/market share data for management simulations, and I’m sure I’m not alone in this. Does anyone have any such data that they’d be willing to share?

RBV of Detection

Here is (much of) the opening paragraph from Alexander McCall Smith’s popular novel The No. 1 Ladies’ Detective Agency. It is, I think, a rather charming comment on the value of intangible resources compared with the value of tangible resources.

Mma Ramotswe had a detective agency in Africa, at the foot of Kgale Hill. These were its assets: a tiny white van, two desks, two chairs, a telephone, and an old typewriter… Detective agencies rely on human intuition and intelligence, both of which Mma Ramotswe had in abundance. No inventory would ever include these, of course.

Business School Rankings

If I had a category for things getting out of hand, this post on business school rankings would be in it. Here’s a quote from a recent Economist article:

Schools… complain that the proliferation of lists, since BusinessWeek launched the first in 1988, has left some staff working two to three days a week gathering information for the compilers. There are now so many business-school lists that they, too, probably deserve a ranking.

My reaction to this is to quote Woody Allen:

What’s with all these awards? They’re always giving out awards. Best Fascist Dictator: Adolf Hitler.