Entrepreneurial Education and the MBA Curriculum
Abstract This paper outlines an approach to entrepreneurial education in the MBA curriculum adopted by a leading Australian graduate school of business. Ten half-semester units in the entrepreneurship area are available to MBA candidates. Two of these units (Entrepreneurship 1 and Business Plans 1) are required (core) units in the MBA program, after which candidates may complete a six-unit minor, an eight-unit concentration, or a twelve-unit major in entrepreneurship. Candidates are encouraged to act like consultants to a local business and to complete their assignments in the context of that business. Candidates for the major or concentration in Entrepreneurship ultimately produce a formal business plan and represent ‘their’ firm to the venture capital industry. Candidates may also compete to represent the University and Australia in a global business planning competition.
Evan J. Douglas, Professor and Head Brisbane Graduate School of Business Queensland University of Technology 2 George Street, Brisbane, Australia 4000 Tel: +61 7 3864 1126 Fax: +61 7 3864 1299 Email:
[email protected] http://www.bus.qut.edu.au/bgsb
Introduction Entrepreneurship is increasingly recognised as a necessary component in MBA programs. First, there is increasing awareness that self-employment is a desirable alternative. Second, many MBA graduates wish to enter the venture capital industry, which is growing rapidly worldwide. Third, many MBA graduates plan to consult to the small business community, or get involved in governmental advisory and policy services. Finally, and perhaps most importantly, entrepreneurship is now widely recognised as a desirable trait of managers, not only for new and small firms, but also for older and larger firms that wish to rejuvenate their business and/or their product lines. Through their innovation in products, services, production processes, management methods, and business models, entrepreneurs facilitate changes in markets and in production efficiency that serve to raise business productivity, increase employment, and enhance global competitiveness. This in turn beneficially impacts the currency unit, the rate of domestic inflation, and the cost and standard of living. Thus there is little doubt that entrepreneurship education should be a core element in the MBA curriculum. The Brisbane Graduate School of Business school recently completed the process of redesigning the MBA curriculum to reflect changes in market needs. As a result, entrepreneurship was not only inserted as a core unit, but major, concentration, and minor programs were also designed for students wishing to pursue one of the career alternatives mentioned above. This paper details these programs. Our MBA requires the equivalent of twelve semester-length units/courses. In keeping with a general convention, two-thirds of the program is comprised of required (core) units and the remaining one-third is elective. The process of redesigning our MBA program included an extensive search to identify global best practice in MBA programs, conducted in person and via the Internet. This culminated in a list of subject areas that were considered relevant to the MBA curriculum. Separate surveys were then conducted of current students, alumni, and employers, to elicit their opinions as to which subject areas were necessary (core) for all MBA graduates and which might be offered as electives.
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These surveys quickly revealed that the traditional eight core units were too few to cover the breadth of content that the market considered necessary. This confirmed a modular approach, and we ultimately settled on the ‘half-semester core unit’ model adopted by several international business schools. This allowed sixteen core units, and satisfied the great majority of survey respondents. The surveys indicated that entrepreneurship should be in the core, as should business planning. Employers particularly expressed the view that MBA graduates must have entrepreneurial skills as well as the ability to write an integrative business plan (rather than having management knowledge in separate ‘silos’ without much ability or experience in the integration of these knowledge fields). The surveys also revealed a strong demand for a ‘major’, ‘concentration’, and ‘minor’ in entrepreneurship. A second survey to the same three populations was used to gain feedback and approval of the program subsequently designed. Interestingly the approval rate of the new program was highest among employers (85% either agreed or strongly agreed with the program design), followed by alumni (77%) and current students (73%). Incidentally, since we offer three full semesters a year, the adoption of half-semester units allowed us to offer six entry points annually – early in January, March, May, July, September and November. All core units are offered in all semesters, some in both halves of the semester. This flexibility has been welcomed by students and by their corporate sponsors and appears to have provided a competitive advantage for the School. The MBA Core Units MBA candidates must complete a seven week unit in each of sixteen core subject areas, as indicated in Table 1 (for a full-time student – part-time students follow approximately the same sequence but may take 2-5 years in total). Note that since some electives are offered only every second or third semester, candidates are encouraged to defer some core units to later semesters and take desired electives when they are offered, assuming they already have the required pre-requisite units.
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The units deferred to a later semester should be from subject areas in which the candidate does not wish to gain a concentration or minor.
Table 1: Core Units in the MBA Curriculum FIRST SEMESTER – FIRST 7 WEEKS GSN401: Managing in Global Business Env’mt GSN407: Professional Communications 1 GSN408: Marketing Management 1 GSN410: Entrepreneurship 1 SECOND SEMESTER – FIRST 7 WEEKS GSN405: Strategic Management GSN413: Financial Management 1 Elective Elective THIRD SEMESTER – FIRST 7 WEEKS GSN415: Leadership 1 GSN411: Economics of Strategy 1 Elective Elective
FIRST SEMESTER – SECOND 7 WEEKS GSN402: Strategic Use of Information Technology GSN403: Understanding Data GSN404: Financial Statements Analysis 1 GSN409: Organisational Behaviour 1 SECOND SEMESTER – SECOND 7 WEEKS GSN406: Human Resource Management GSN416: Business Plans 1 Elective Elective THIRD SEMESTER – SECOND 7 WEEKS GSN412: Business Law 1 GSN414: Business Conditions Analysis Elective Elective
The New Venture Management Units in the MBA Core GSN410: Entrepreneurship 1 This unit introduces students to the field of entrepreneurship and planning for new business initiatives in the global business environment. Topics include entrepreneurial attitudes, abilities, and behaviours; developing an entrepreneurial culture; opportunity recognition and viability screening; first-mover advantages and disadvantages; risk recognition and risk reduction strategies; and intellectual property protection. Candidates examine and critique several business plans and/or case studies during the semester. Learning objectives for this unit are that students should understand the nature of entrepreneurship and the implications of self-employment as a career option; understand the need for an entrepreneurial culture in business organisations; creatively propose and critically evaluate new venture proposals; recognise and devise strategies to mitigate the risk associated with new ventures; understand the legal issues surrounding intellectual property protection, and demonstrate enhanced entrepreneurial attitudes, abilities, and behaviours. A textbook is assigned, and students also purchase the ‘Unit Manual’ containing a study guide for the material plus additional readings, case studies and business plans. In class, the
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instructor alternates between information-provision and discussion-facilitation modes, and class discussion and involvement is actively encouraged. A selection of case studies and business plans are assigned for discussion in class to illustrate material being learned in any given week, as well as to sharpen the student’s analytical and new venture screening skills. The subject matter of the first entrepreneurship unit is indicated in Table 2. Note that the first two modules are concerned with entrepreneurial attitudes, abilities and behaviours and the conditions necessary to encourage and reward such behaviours. The focus then switches to the sources of new ideas and the viability screening of those new ideas, since it is imperative to screen out non-viable ideas as soon as possible to minimise wasted time and funding.
Table 2: Content of GSN410: Entrepreneurship 1 WEEK 1 2
3
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TOPIC Introduction to Entrepreneurial Abilities, Attitudes and Behaviours Developing an Entrepreneurial Culture in the Business Organisation Creative Thinking, Opportunity Recognition, and Preliminary Viability Screening First-Mover, Late-Mover, and Sustainable Competitive Advantages
5
New Venture Risk Recognition, and Risk Reduction Strategies
6
Intellectual Property Protection and other Isolating Mechanisms
7
Final exam
READING Unit Manual, Module #1 Text, Chs. 1, 2, 3 Unit Manual Module #2 Readings (in Unit Manual) Case Study #1 Unit Manual Module #3 Text Ch. 5 Case Study #2 (Hand in) Unit Manual Module #4 Readings (in Unit Manual) Case Study #3 Unit Manual Module #5 Readings (in Unit Manual) Case Study #4 (Hand in) Unit Manual Module #6 Readings (in Unit Manual) & Text, Ch. 6 Case Study #5 All the above
In addition to the final exam (requiring four essay-type answers in two hours), which is weighted at 60% of the total grade, candidates are graded on two of the group business plan critiques, weighted at 20% each. In view of the potential free-rider problem, candidates must obtain at least 40% in the final exam to pass the unit, and may receive only a ‘pass conceded’ if their exam grade is between 40-49%, regardless of their group assignment grades. Note that these evaluation requirements are essentially similar for all NVM units.
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GSN416: Business Plans 1 Employers often express the belief that MBA graduates should be able to research and write a formal business plan that integrates all aspects of a business into a coherent and persuasive document which serves as a ‘roadmap’ for the business, and/or as a device to secure strategic assets such as key personnel and investment funding. Without an adequate business plan, businesses often proceed on an ad hoc basis, rebounding from crisis to crisis, which might have been foreseen and possibly avoided if adequate planning activity had been undertaken. This unit prepares students for writing a formal Business Plan for a ‘real’ business venture. Preparation includes the underlying analysis and strategic considerations that enter the process of determining whether or not the business concept is feasible and viable. Consideration is given to the major purpose and intended audience of the plan, since a business plan may be written for a variety of purposes. This unit equips candidates with the ability to design and write a high-quality business plan; incorporate strategic management thinking into their strategic plan; integrate all functional areas of the new venture into an integral framework; and evaluate and constructively criticise the underlying analysis and strategic thinking found in business plans for new ventures. The content of GSN416: Business Plans 1 is indicated in Table 3.
Table 3: Content of GSN416: Business Plans 1 WEEK 1 2
TOPIC Introduction to Business Planning. The Purpose and Design of Business Plans Analysis of the Business Environment, The Strategic Alternatives, and the Strategic Plan
3
The Marketing and Sales Plan, and the Research and Development Plans
4
The Production and Logistics Plan, and the Human Resources Plan
5
Financial Alternatives and the Financial Plan
6
Business Valuation, Equity Shares, and the Exit and Harvest Strategies.
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Examination
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READING Unit Manual Module #1 Readings TBA Unit Manual Module #2 Readings TBA Business Plan #1 Unit Manual Module #3 Readings TBA Business Plan #2 Unit Manual Module #4 Readings TBA Business Plan #3 Unit Manual Module #5 Readings TBA Business Plan #4 Unit Manual Module #6 Readings TBA Business Plan #5 All the above
Note that students do not write a business plan in this unit – this is the main component of the follow-on elective unit, GSN426: Business Plans 2, which is taken by majors and concentrators in the area. Instead they focus on what is involved in writing such a plan, and critically evaluate several formal business plans, thus sharpening their analytical capabilities. A final exam (four essays in two hours) is weighted at 60% of the grade, and candidates also submit for assessment two group critiques of business plans, weighted at 20% each. The New Venture Management (NVM) Major A ‘major’ is 60 credit points (five full-semester unit equivalents) within a particular subject area. Since there are 2 x 6 credit point half-semester units from the NVM area within the core, students may achieve the NVM major by taking an additional eight half-semester units in NVM, as well as additional half-semester units in marketing, finance, and accounting The additional units required for the NVM major are shown in Table 4 in bold face. Table 4: The Major in New Venture Management FIRST SEMESTER – FIRST 7 WEEKS GSN401: Managing in Global Business Envir’mt GSN407: Professional Communications 1 GSN408: Marketing Management 1 GSN410: Entrepreneurship 1 SECOND SEMESTER – FIRST 7 WEEKS GSN429: New Venture Marketing GSN415: Leadership 1 GSN427: Financial Statements Analysis 2 New Venture Management Elective THIRD SEMESTER – FIRST 7 WEEKS GSN411: Economics of Strategy 1 GSN413: Financial Management 1 New Venture Management Elective New Venture Management Elective
FIRST SEMESTER – SECOND 7 WEEKS GSN402: Strategic Use of Information Technology GSN404: Financial Statements Analysis 1 GSN418: Marketing Management 2 GSN420: Entrepreneurship 2 SECOND SEMESTER – SECOND 7 WEEKS GSN403: Understanding Data GSN412: Business Law 1 GSN416: Business Plans 1 New Venture Management Elective THIRD SEMESTER – SECOND 7 WEEKS GSN414: Business Conditions Analysis GSN423: Financial Management 2 GSN430: New Venture Funding GSN426: Business Plans 2
The Concentration and Minor in New Venture Management The MBA program allows more than twenty different ‘concentrations’, which are defined as 36 credit points (three semester units) in a particular subject area. The NVM concentration is indicated in Table 5. A minor is 24 credit points (two semester units equivalent). For the minor in NVM, candidates must take GSN420: Entrepreneurship 2 and at least one other 6 credit point (half-semester) NVM elective, in addition to the core requirements of GSN410 and GSN416.
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Table 5: The Concentration in New Venture Management FIRST SEMESTER – FIRST 7 WEEKS FIRST SEMESTER – SECOND 7 WEEKS GSN401: Managing in Global Business Envir’mt GSN402: Strategic Use of Information Technology GSN407: Professional Communications 1 GSN404: Financial Statements Analysis 1 GSN408: Marketing Management 1 GSN418: Marketing Management 2* GSN410: Entrepreneurship 1 GSN420: Entrepreneurship 2 SECOND SEMESTER – FIRST 7 WEEKS SECOND SEMESTER – SECOND 7 WEEKS GSN405: Strategic Management GSN403: Understanding Data GSN415: Leadership 1 GSN412: Business Law 1 GSN429: New Venture Marketing** GSN416: Business Plans 1 Free Elective*** GSN406: Managing Human Resources THIRD SEMESTER – FIRST 7 WEEKS THIRD SEMESTER – SECOND 7 WEEKS GSN411: Economics of Strategy 1 GSN414: Business Conditions Analysis GSN413: Financial Management 1 GSN430: New Venture Funding** Free Elective GSN426: Business Plans 2** Free elective Free elective * GSN418: Marketing Management 2 is required if the candidate wishes to take GSN429: New Venture Marketing, which is strongly recommended. ** These electives are recommended but not required for the NVM concentration. *** This elective must be GSN427: Financial Statements Analysis 2 if the candidate wishes to take GSN426: Business Plans 2 subsequently.
The New Venture Management Electives GSN420: Entrepreneurship 2 is required of any student seeking a minor, concentration or major in NVM. Students may then take one or more of several other NVM units to complete their desired minor, concentration, or major in NVM. A short description of each unit is provided below. To avoid repetition, note that a textbook is usually assigned to each unit, and a ‘Unit Manual’ is available for each unit containing additional readings, a study guide to the readings, and the case studies and business plans to be discussed in class. Student assessment is both formative and summative, with typically two minor formative elements (for 40-50%) done in groups, plus a final exam for 50-60% of the assessment. In each three-hour session the instructor will switch between information-provision and discussion-facilitation modes, and class members are expected to contribute to the discussions and to make presentations.
GSN420: Entrepreneurship 2 This unit is concerned with new venture strategy, and students will complete basic screening and strategic analysis on a new venture concept (of their choice) as part of the assessment. The content of this unit is indicated in Table 6.
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Table 6: Content of GSN420: Entrepreneurship 2 Week 1
TOPIC New Venture Strategy - Overview
2
Evaluating Environmental Threats & Opportunities
3
Evaluating Firm Strengths and Weaknesses
4
Competitive Strategies – Cost Leadership and Differentiation
5
Cooperative Strategies – Tacit Collusion and Strategic Alliances
6
Global Strategies
7
Examination
READING Study Guide module #1 Reading #1 (in Unit Manual) Study Guide module #2 Text, Chs. 3, 4 Business Concept presentations (all groups) Study Guide module #3 Text, Ch. 5 Read Business Plan #1 (in Unit Manual) Study Guide module #4 Text, Chs. 6, 7 Strategic Plan Presentations: Groups 10-12 Study Guide module #5 Text, Chs. 8, 9 Strategic Plan Presentations: Groups 7-9 Study Guide module #6 Text, Ch. 14 Strategic Plan presentations: Groups 1-6 All the above
At the completion of this unit, students are expected to demonstrate enhanced entrepreneurial attitudes and abilities; understand the sources and sustainability of competitive advantages; devise strategies for the launch of a new business ventures; critically evaluate new venture proposals; and produce a strategic plan for a new business venture Groups of students select a potential new business concept (or an existing business) and conduct analysis culminating in a strategic plan for that business. A first draft of this is submitted for formative assessment in week 3 (for 20% of the final grade). The final draft is submitted in week 6, and is also graded for 20% of the final grade. The remaining 60% is contributed by the exam in week 7. This strategic plan is typically used as part of the business plan for students continuing to take GSN426: Business Plans 2. Groups make short (5 minute) presentations to the class of their business concept and their strategic plan in week 2, and longer (15 minute) presentations in weeks 4, 5 or 6. Class members discuss the strategies proposed and provide constructive feedback to each group. No grade is assigned to these presentations, since this might detract from the purpose (which is to elicit constructive comment from class members and the instructor).
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GSN426: Business Plans 2 The ability to research and write a formal business plan is a desirable characteristic of a middle and senior manager. The integration of the separate disciplines studied in their MBA program in the context of a specific business venture is not something that most MBA graduates do well unless they have had considerable experience in evaluating and preparing business plans. This unit is a continuation of GSN416 and culminates in the writing and presentation of a formal Business Plan. In many cases, the business plan is the first of a three-part communication strategy between new venture managers and the potential investor. The second and third stages (namely the Presentation and the Question and Answer sessions) are also considered in this unit. As part of the assessment, candidates will complete a formal business plan for a new venture of their choosing, and present their plan to the class and other interested parties. This unit equips candidates with the ability to design and write a high-quality business plan; to incorporate strategic management thinking into their strategic plan; to integrate all functional areas of the new venture into an integral framework; and to evaluate and constructively criticise the underlying analysis and strategic thinking incorporated in the business plan of a new venture. Reference is made to business plans read in the earlier NVM classes taken by all students, namely GSN410, GSN420, and GSN416. The content of this unit is outlined in Table 7. Table 7: Content of GSN426: Business Plans 2 WEEK 1 2
3 4 5 6
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TOPIC Introduction and overview of the formal business plan. Presentation of each group’s business concept for class discussion. Presenting and Defending a Business Plan. Video tapes of previous MOOT CORP presentations Class discussion of each group’s draft business plan Presentations and class discussion of student business plans Presentations and class discussion of student business plans
READING Review of GSN416 modules 1, 2 Work on your business plan
Shepherd and Douglas, Ch. 8 (download from Home page) Work on your business plan
DEADLINES Students must finalise group membership Summary outline of business concept due (10%)
First draft of business plan due (20%)
Work on your business plan Work on your business plan
Work on your business plan
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Groups 7 – 12 present and defend their business plans (20%) Groups 1 – 6 present and defend their business plans
The business plan is restricted to no more than 25 pages (double spaced, A4 paper, 12 font) including executive summary and Table of Contents. Other pertinent information, including the managers’ resumes and market surveys, should be included in appendices not exceeding another 15 pages. Groups make brief presentations of their business concept for class discussion in week 2, and will make a formal presentation and defence in the final three weeks, for 20% of the grade. Groups should support their formal presentation with handouts, slide presentation, and so on. All group members must take an active part in the final presentation. The first draft of the business plan, due in week 4, contributes 20%, and the final draft, due in week 7, contributes 40% to the final grade. Peer assessment contributes the final 20% to each student’s grade in this unit – members of groups will, by secret ballot, evaluate all members of their group in terms of their relative contributions of time and effort towards the group’s business plan and final presentation.
GSN429: New Venture Marketing Many an entrepreneur with a technically excellent invention or new service concept has been impoverished by his/her inability to successfully bring the new product to market and/or to manage the demand for that new product, and/or to manage the emerging competition for that new venture. Many an obituary for a new business that reads “failed for lack of sufficient funding” should more truthfully read “failed for lack of marketing expertise”. This unit is concerned with the special marketing needs of new and entrepreneurial businesses in international markets. New ventures face market ignorance much greater than that faced by new products of existing firms. Needs of potential customers must analysed, and product offerings modified accordingly. Product design and prototypes must be developed in close contact with marketing research results. New marketing channels must be created or access to existing channels must be secured. Potential customers must be identified, informed, and persuaded to try the new product. Pricing is a major problem area, since there is a conflict
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between relatively low prices to encourage trial, and premium prices that may be indicated because the new product better serves customer needs. On completion of this unit, students will be able to understand the differences and the complexities of marketing new products or services, as compared with product line and brand extensions for existing businesses; plan and conduct a marketing research campaign to ascertain the probable market support for a new product or service; decide whether to position a new product or service for the mass market or for a specific niche market; analyse all aspects of the marketing mix; and utilise the knowledge gained to substantially reduce the business risk of commercialising new product or services. The content of this unit is outlined in Table 8. Table 8: Content of GSN429: New Venture Marketing WEEK 1
TOPIC Introduction to New Venture Marketing
2
Marketing Research – identifying needs and potential customers
3
Product design and prototype development and refinement
4
Distribution channel choices and strategies
5
Advertising and promotion strategies and tactics
6
New product pricing issues
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Examination
READING Unit Manual Module #1 Reading TBA Unit Manual Module #2 Reading TBA Case #1 Unit Manual Module #3 Reading TBA Case #2 Unit Manual Module #4 Reading TBA Case #3 Unit Manual Module #5 Reading TBA Case #4 Unit Manual Module #6 Reading TBA All the above
Student groups write up either a Marketing Research Study or a Marketing Plan for a new business venture, to demonstrate learning in this and prior units. It should be no more than 15 pages long, including an executive summary. Detailed research data and other pertinent information may be included in appendices not exceeding another 15 pages. An outline draft of this Marketing Research Study or Marketing Plan is due in week 3 (for 20% of the grade) and the final draft is due in week 6 (for 30% of the grade). The final examination in week 7 is for the remaining 50% of the grade.
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GSN430: New Venture Funding This unit is concerned with raising the funds in international capital markets to establish, launch and grow a new business venture. Sources of funding include one’s own resources, family and friends, Business Angels, Venture Capitalists, and Banks. Typically, entrepreneurs have few assets and inadequate cash flow to justify bank loans. Instead, equity funding is usually needed, and creative funding strategies are necessary to raise finance and to conserve cash flow. Loan funding alternatives are more likely to be available when the business becomes more established. Issues relating to each of these sources are considered. Other sources of initial funding or cash flow conservation, such as agreements with suppliers, customers, and employees, are also considered. Allocation of equity shares for intellectual property, sweat equity, and expenses incurred, are discussed. Assumptions underlying the valuation of the business, and the equity share allocated to an investor are also examined in considerable detail. This unit equips candidates with a greater understanding of the avenues for financial support for new business ventures; information concerning the potential costs and risks associated with each method of funding; other advantages and disadvantages of each means of funding; and a knowledge of creative funding, and/or avoiding the need for external funding, for new business ventures. The content of the New Venture Funding unit is outlined in Table 9. Table 9: Content of GSN430: New Venture Funding WEEK 1 2
TOPIC
READING
Introduction to New Venture Funding. Debt versus Equity Funding. Bootstrapping – Founder, Family and Friends
Unit Manual Module #1 Reading TBA Unit Manual Module #2 Reading TBA Case Study #1 Unit Manual Module #3 Reading TBA Case Study #2 Unit Manual Module #4 Reading TBA Case Study #3 Unit Manual Module #5 Reading TBA Case Study #4 Unit Manual Module #6 Reading TBA Case Study #5 All the above
3
Formal and Informal Venture Capital Markets – Business Angels and Venture Capital Funds
4
Initial Public Offerings, and Valuation of the business
5
Franchising, and other expansion options.
6
Strategic Alliances, Employee stock ownership plans, and other incentive contract funding.
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Examination
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Groups of 1-4 students write up a Funding Plan for a new business, which should demonstrate learning in this and prior units. The first draft of this Funding Plan is due in week 4 and contributes to 20% of the grade, while a final draft is due in week 6 and contributes 30% of the grade. A final exam is held in the seventh week for the remaining 50% of the grade.
GSN431: New Venture Growth and Transitions Many new ventures start successfully but later fail as rapid growth, often into international markets, causes problems with production, distribution, product quality, employee productivity, cash flow, financing, and management’s ability to make the transition from the new and small firm to a rapidly growing company. There is a huge loss to society involved in the failure of new businesses which were viable in their early stages but which faltered when the business grew beyond a size which was no longer manageable by a ‘hands-on, jack-of-all-trades’ entrepreneur. Recognition of the symptoms and re-organisation of the business and/or changing the modus operandi of the chief executive prior to the disease becoming fatal is imperative if such personal and societal losses are to be minimised. If the firm is to survive, the entrepreneur must successfully navigate the transition from ‘hands on’ involvement in every aspect of the business to a more detached strategic planning and senior management role. This unit considers the issues involved in recognising the need for, planning for, and making that transition. This unit is designed to equip entrepreneurs, venture capitalists, consultants and government advisors with an understanding of the need for structural and organisational change as the successful new venture grows beyond some initial minimum size; and of the procedures and steps necessary to allow a smooth transition from small, entrepreneur-managed firm, to larger professionally-managed company. The content of this unit is indicated in Table 10. Groups of students discuss each case and write up a 3-page summary analysis of the case prior to each class. Individuals will be called upon to start class discussion on each case, and their analysis should incorporate material introduced in the readings and prior classes in this unit. Two
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of these summary analyses will be graded for 20% of the total grade each, and a final exam will contribute the remaining 60% of the grade.
Table 10: Content of GSN431: New Venture Growth and Transitions WEEK 1
TOPIC Introduction to Entrepreneurial Transitions
2
The Phases of Entrepreneurial Growth, and Visionary Leadership
3
Decision Making in the Rapidly Growing Firm
4
Conducting an Organisational Audit, and reexamining Company Values, Vision, and Mission
5
Developing the Strategic Plan for Growth
6
Making the Transition
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Examination
READING Unit Manual Module #1 Text Reading Ch.1 Unit Manual Module #2 Text Reading Chs.2,3 Case #1 Unit Manual Module #3 Text Reading Ch.4 Case #2 Unit Manual Module #4 Text Reading Chs.5,6 Case #3 Unit Manual Module #5 Text Reading Ch.7 Case #4 Unit Manual Module #6 Text Reading Ch.8 Case #5 All the above
GSN432: New Venture Leadership and Human Resource Management Outstanding leadership skills are effectively a pre-requisite for successful entrepreneurship, since the entrepreneur must show effective leadership both within the new firm and when in contact with external parties. New ventures often operate without established organisational structures and are subject to great uncertainty about revenues. The entrepreneur must demonstrate leadership in a variety of situations, leading potential customers, suppliers, financiers, and employees to agree to situations about which they might have misgivings. The entrepreneur’s ability to exercise leadership is a critical factor in the success of most new ventures, and thus the main purpose of this unit is to enhance entrepreneurial leadership skills. Human resource management issues, including international human resource and crosscultural management, are introduced and applied to the new venture situation. Incentive remuneration schemes, including bonus and stock option schemes, are considered as a means of reducing current employee cost and reducing employee turnover, while allowing employees to participate in the upside potential of the venture.
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This unit is designed to equip would-be entrepreneurs with enhanced leadership and people management skills such that they become a more effective leader and manager of people in the context of their own business and as that business grows into a mature firm. This unit also imparts leadership and human resource management strategies and tactics that are particularly applicable for the new and small firm, and it advocates the application of leadership and people skills to other individuals outside the business, such as customers, suppliers, bankers, and other stakeholders. The content of GSN432 is indicated in Table 11. Table 11: Content of GSN432: New Venture Leadership and HRM WEEK 1 2
TOPIC Introduction to Entrepreneurial Leadership and Human Resource Management Entrepreneurial Leadership Styles, Skills and Strategies. Communication and interpersonal skills.
3
Employee Recruitment and Development Strategies
4
Employee Team Building and Incentive Remuneration Schemes
5
Product/Service Quality and Employee Empowerment
6
The Outsourcing Decision
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Examination
READING Unit Manual Module #1 Reading TBA Unit Manual Module #2 Reading TBA Case #1 Unit Manual Module #3 Reading TBA Case #2 Unit Manual Module #4 Reading TBA Case #3 Unit Manual Module #5 Reading TBA Case #4 Unit Manual Module #6 Reading TBA All the above
Groups meet to discuss each case, and write up a 3-page summary analysis of the case prior to each class. Two of these are handed in for assessment (20% each) and the final exam is 60%. Individuals will be called upon to start class discussion on each case, and their analysis should incorporate material introduced in the readings and prior classes in this unit.
GSN433: Public Policy for New and Small Business This unit is designed to provide potential entrepreneurs, and those wishing to work on the public policy side of small enterprise development, typically in a state or federal government department, with detailed analysis of public policies that assist or otherwise impinge upon the establishment, development and growth of new and small business ventures, particularly in
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Australia, and an overview of best practice in other nations in the area of public policy towards new and small business. Action by both public and private sectors to assist small enterprise establishment, development and growth tends to be the result of political pressures from various sections of the voting public. Decisions made under such conditions are unlikely to produce a national policy in the best interest of small businesses or the public at large. This unit reviews policies applied by government at all levels, and ensures that the candidate has a thorough understanding of the policy issues applying to small enterprise in Australia, and include an international comparison of small enterprise policy. The content of this unit is outlined in Table 12 Table 12: Content of GSN433: Public Policy for New and Small Business WEEK 1 2
TOPIC Introduction to Public Policy for Small Enterprises Governmental policies on small enterprises – local, state and national
3
Non-governmental sources of advice and assistance for small enterprise
4
International comparison of small enterprise policy
5
Future Trends in Small Enterprise Policy
6
Ideal Small Enterprise policy
7
Review and Summary
READING Unit Manual Module #1 Reading TBA Unit Manual Module #2 Reading TBA Case #1 Unit Manual Module #3 Reading TBA Case #2 Unit Manual Module #4 Reading TBA Case #3 Unit Manual Module #5 Reading TBA Case #4 Unit Manual Module #6 Reading TBA All the above
Groups of students analyse and discuss the assigned case studies, and individuals will be asked to lead discussion in the class sessions. Two of these case analyses must be written up as 3page summary analysis reports and submitted prior to the relevant class period for later grading (20% each). The final examination is worth 60%.
GSN434: Venture Capital The venture capital industry is growing rapidly in Australia and internationally, and provides the critical link between new business concepts and the funding available from individuals and
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institutions, and is thus vitally important to the financial support of new business ventures. Venture Capital firms require as fund managers individuals with graduate business education who also understand both the venture capital industry and the nuances and complexities of new venture development. This unit considers the operation of the Australian and global venture capital industries and the rationing of relatively scarce risk capital among relatively abundant demands for new venture funding. Students gain an understanding of how the venture capital industry works and the criteria by which funds are committed to the support of new ventures. Students increase their ability to distinguish the less risky and more profitable investment opportunities from the more risky and less remunerative opportunities that may also be presented to venture capitalists. This unit is designed to provide potential venture capitalists, and entrepreneurs wishing to better understand the venture capital industry, with detailed understanding of the operation of the Australian and international venture capital industries; knowledge of the criteria and principles that underlie commitment of venture capital to entrepreneurial new ventures; and an enhanced ability to analyse critically business plans and new business concepts through the eyes of a venture capitalist. The content of this unit is outlined in Table 13. Table 13: Content of GSN434: Venture Capital WEEK 1 2
TOPIC Introduction to the International Venture Capital Industry The Influence of Venture Capitalists on business productivity and growth
3
The Nature of Venture Capitalism – Motivations and Reward structures.
4
Sources of Venture Capital – Local and International
5
Decision Criteria and Allocative Mechanisms utilised by Venture Capitalists
6
The Influence of Venture Capitalists on Managerial composition and business strategy
7
Examination
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READING Unit Manual Module #1 Reading TBA Unit Manual Module #2 Reading TBA Case #1 Unit Manual Module #3 Reading TBA Case #2 Unit Manual Module #4 Reading TBA Case #3 Unit Manual Module #5 Reading TBA Case #4 Unit Manual Module #6 Reading TBA Case #5 All the above
Students meet to analyse and discuss the case studies, and individuals are asked to lead class discussion of these cases. Two of the case analyses must be written up as a 3-page summary report and handed in for formative assessment. These analyses contribute to 40% of the grade and the final exam contributes the remaining 60%. Student Liaison with the Business Community Most of the NVM units allow students to complete their assignments in the context of a local business. This may be their employer, their family’s business, a prospective new business, or an ‘adopted’ business. Brisbane Graduate School has entered into a strategic alliance with the state Chamber of Commerce in the ‘Global Access Program’ in which the Chamber identifies firms seeking assistance to become ‘investor ready’, and the Graduate School provides students who want to learn about new ventures and apply their concepts and knowledge in the context of a real business venture. The groups of students thus ‘adopt’ a local business and work with that business over six months to a year to help it become investor ready. Ultimately they produce a formal business plan for the local business and present this plan to the venture capital community. They may be remunerated handsomely if their efforts culminate in raising the venture capital required, and may later be employed by that business. In addition, students wishing to start their own business may compete to represent the School in an Australia-wide MBA Business Plan competition, known as MOOT CORP Australia. This competition is hosted by the Brisbane Graduate School of Business and all Australian MBA programs are invited to send teams to compete. The winner of this competition then represents Australia at the International Entrepreneurial Challenge of MOOT CORP held annually at the University of Texas and contested by two dozen of the world’s leading business schools. This program provides an exceptional learning experience for MBA students, not to mention the gratifying experience of competing (and winning or showing well) against students from the world’s best MBA programs. It also serves to identify and demonstrate best-practice entrepreneurship education in Australia and internationally, and thus raise the general level of entrepreneurship education internationally.
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Conclusion The MBA program of the Brisbane Graduate School of Business at Queensland University of Technology has been redesigned to reflect market demand for entrepreneurship units both within the core and as a series of electives which may be taken successively to constitute a major, concentration, or minor in the new venture management area. The primary purpose of the two new venture management units in the core of the MBA program is to awaken and enhance the candidate’s critical thinking about business innovation. The underlying theme is effective screening of possible new ventures to separate the ‘gold’ from the ‘glitter’ before any substantial time and funds are expended on the pursuit of the innovations that are not commercially feasible. This screening process continues all the way through the development of a strategic plan (in GSN420), a marketing plan (in GSN429), a funding plan (in GSN430), and the completion of a formal business plan (in GSN426). The MBA program and the specialisation in Entrepreneurship and New Venture Management offered by the Brisbane Graduate School of Business has attracted increasing attention from our markets and our students are enjoyed increasing success. Perhaps our experience can benefit others, such that the global quality of entrepreneurship education can continue to improve.
REFERENCES Barney, J. B., Gaining and Sustaining Competitive Advantage, Addison Wesley, 1997. Dollinger, M., Entrepreneurship: Strategies and Resources, 2nd ed., Prentice Hall, 1999. Douglas, E.J. and D.A. Shepherd, “Entrepreneurship as a Utility-Maximising Response”, Journal of Business Venturing, May 2000. Douglas E.J., D.A. Shepherd, and M. Shanley, “An Information-Theoretic Analysis of New Venture Mortality Risk” Journal of Business Venturing, forthcoming 2000. Hisrich, R.D. and M.P. Peters, Entrepreneurship, 4th ed, Irwin McGraw-Hill, 1998. Shepherd, D.A. and E.J. Douglas, Acquiring Equity Investment: Positioning, preparing and presenting the Business Plan, Sage Publications, 1999. Timmons, J., New Venture Creation, 5th ed., McGraw-Hill, 1999.
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