FYI: ...rise of the modular economy

Our Otago MBA management team continuously strives to stay on top of emerging trends in business that may influence the material taught in our core courses. The following article came to our attention from one of our valued lecturers, Phil Broughton, Strategy Implementation, Term four. Here's an excerpt:

The inexorable rise of the modular economy

The structure of the economy will be quite different in the future from what we see today.
Chartered Accountants Australia and New Zealand - Acuity - July 2014

As business leaders consider the future, and what they need to do to prosper in the years ahead, they can readily identify a range of important trends. Developments such as globalisation, increasing connectivity, pervasive use of mobile devices, price transparency, China’s economic growth, ageing populations and many other trends are evident and well discussed.

However, often a critical assumption is made in the planning process: that the structure of the economy will be the same in the future as it is today.

The reality is that the entire nature of value creation is shifting. Traditional economic perspectives built on assumptions of rigidly delineated industry sectors often mislead more than they elucidate.
The modular economy

Perhaps the most useful way to think about the changing economic structure is the idea of the “modular economy”, in which value is created in increasingly small units that are combined in a wide variety of ways across organisational boundaries and between individuals.

The Nobel Prize-winning economist Ronald Coase proposed that organisations exist because of transaction costs: it is more efficient to coalesce economic activities inside a company due to the cost of finding and working with external resources. Yet in a connected, globalised world, transaction costs are now a tiny fraction of what they were in the 1930s when Coase formulated his ideas.

Today, organisations are no longer the locus of value creation. Value is created by orchestrating many smaller elements, sometimes within firms, often beyond organisational boundaries and increasingly between many individuals or micro-businesses.

One example of the modular economy can be found in Chongqing in Western China, where novel approaches have helped the city become the world’s largest centre for motorcycle manufacturing. The manufacturers in Chongqing dramatically overtook the previous industry leaders in Japan by taking a very different approach.

Rather than specifying requirements to their suppliers in minute detail, as the Japanese manufacturers do, they assemble their suppliers to discuss collectively the parameters of the motorcycle they wish to build, and let them work together to identify how the modules they create can fit together to achieve the group’s vision.

Implications and strategic questions

The forces underlying the rise of the modular economy have been in place for well over a decade. However, the real impact of this shift in the structure of value creation has become evident only over the past few years. This trend has far further to run, and organisations need to address the challenges and seize the emerging opportunities.

The implications will play out very differently depending on issues such as a company’s industry, size and geographical scope. To understand the actions they should be taking, leadership teams should be asking themselves three strategic questions:

1. How can we compete with modularised offerings?
2. How can we drive efficiencies through modularisation?
3. What governance structures are required?

Meet our Term Two Lecturers: Daniel Hellyer

Daniel Hellyer

I would like to introduce our Term Two accounting lecturer, Daniel Heller, an NZ chartered accountant and Associate Director at Deloitte Private. Daniel brings a wealth of practical experience into the classroom with twelve years accounting and business experience, most of this time working in the “Big 4” accounting firms.

Daniel is a senior team member at Deloitte, with a large base of clients. He offers advice on a broad range of accounting issues, such as traditional accounting and taxation, governance, succession planning, business planning and forecasting, buying and selling markets, Government tenders and RFP’s (in both wider health sector and technology), business and company valuations, mergers, acquisitions, litigation, and general business advice.

Daniel is heavily involved in the business development at Deloitte, and chairs a business development staff group charged with generating new ideas for our current clients, plus giving the company opportunities to talk to potential clients. He has been involved with the local branch committee of the New Zealand Institute of Chartered Accountants, and currently mentors two provisional members of the institute who are working through their practical experience and examined aspects of becoming Chartered Accountants.

Daniel is married with two boys (5 & 3 yrs) who keep mom and dad very busy; he enjoys Rippa Rugby in the winter, swimming, camping and racing mountain bikes (both cross country and enduro/downhill). In Daniel's own words: "I try and train five – six times per week either on the bike or on foot and when I get spare hour or so you'll find me heading up and down Signal Hill (highest in the area), feeling way too old on the way up, and way too young on the way down."

Thank you Daniel, for your contributions to our Otago MBA programme, 

both as a student mentor and lecturer.

Otago MBA: Now accepting applications for April 2015

Considering an MBA?

An investment in an MBA degree may be one of the most important, career-changing investments you can make in yourself; and make no mistake, the $40+ grand in tuition and time away from a income generating job is an investment in you, with a return on investment (ROI) calculated over the remaining years of your employment (e.g., better jobs, more mobility, faster promotions, greater responsibility, access to executive-level positions, higher salaries and payback on the initial investment in just a couple of years).

Otago MBA is now accepting applications for April 2015

The question is: "Are you worth the investment?!"  April 2015 may seem like a long way off, but our market for incoming MBA candidates will peak over the next five months and the nucleus of our MBA 39 class will be in place before the end of 2014.  The choice of MBA programmes can seem bewildering and risky; thousands of programmes exist; and many candidates rely on rankings as the predominant criteria for evaluating their options.

Your reliance on rankings (i.e., a suspect summary statistics of programme quality) equates to

us (the Otago MBA management team) distilling your quality as an MBA candidate

to a GMAT score, something we do not do.*

Everything you need to know

This blog is intended to allow you to get to know us, to peek inside our programme, meet our people and gain an understanding of the experience (value) we offer.  I encourage you to click on the links below to gain insights into the Otago MBA and make an informed decision about whether a good fit exists between your needs and our programme.

Programme Design: Focus on the individual and Academic Integrity. 

Candidate Selection / One & Two: experienced, mature, self-motivated, etc.

Why Candidates Choose Us: New Zealand experience or residence. 

Reliance on GMAT Scores: a suspect summary statistic.

Diploma vs. Full-time MBA: two options.

Conceptual Reasoning: Business Model, Concept, Reading & Writing, In the Classroom.

Placement: You're kidding!, A better way.

The Classroom: Emphasis on thinking, Active Learning, Power of Introverts.

Students: Cultural diversity.

Our Faculty Team: Denis Kobzev, Paul Hansen, Julia Richardson, Beth Rose, Anindya Sen.

Our Students: Ryf Quail, Krister Häll, Silvia Scherer, Melissa Barry.

 Mentored Consulting Experience: One, Two, Three, Four / Congratulations James!

Graduate Profile: what should our graduates look like?

Otago MBA Ranking: QS Global 200.

Life in New Zealand: Dunedin, Adventure, Coffee, Top Tourist Destination.

Miscellaneous:  Public Speaking, Doing Business in India. 

Register your interest in our Otago MBA programme!

Click here

*We do request a GMAT score, but we're far more interested in the complete candidate profile, ...and we provide you with our most recent QS Global 200 ranking (above).

Conceptual Reasoning 1: and its application

Conceptual Reasoning

This blog post is for our students (the focus audience); all others

 may feel free to listen in.  

Hey guys,

You've completed your first major writing assignment and soon face end-of-term projects and exams.  A sufficient context exists to explain conceptual reasoning and its application to (1) reading course materials and (2) writing as a scholar/professional.  In this post, I want to describe how the brain processes sensory data into percepts (i.e., meaningful perceptual representations of the world), experiences and concepts arising from experience.  I'll emphasize the following critical insight:

Experiences informs your gut feelings (i.e., intuition), but your experience-based conceptual understanding of the world (i.e., knowledge based on one lifetime) remains opinion and inadequate to call yourself a professional.  You need to ground your thinking in established bodies of knowledge (e.g., marketing, finance, Org. Leadership, etc.); you do not get to make the world up from scratch.

 Goethe put it this way, "He who cannot draw on three thousand of years human 

history lives from hand to mouth." ...a subsistence existence.

Here goes. All sensory data (except olfactory) enters the brain through the thalamus and is channeled to primary sensory cortices (V1 for vision). V1 neurons process the same minute details of any visual stimuli: they code for orientation at a point in space and spatial frequency of stimuli at that location. No meaningful, big-picture pixelated representation of the world exists.

These data advance along the ventral visual pathway to the Inferior Temporal Cortex (ITC), where percepts (meaningful visual representations) are recognized and stored. This is where you recognize people (including specific individuals), places and things.  These data undergo additional processing in an associative hierarchy and are integrated into meaningful experiences in the hippocampus; you remember emotion-laden events that trace the important moment in your life.

The hippocampus is also recognized as the nexus between percepts and concepts. For instance, learned associations between stimuli arise from statistical regularities in your environment (e.g., person + place = barista), and these regularities prove beneficial for predicting and interpreting future sensory data.  Try this: think about a rugby field and picture the things you would expect to see: white lines, goals, players, bleachers and fans.  You see these things, infer, "rugby," and adjust your behavior accordingly. This kind of experience-based learning is essential, but only carries you so far.

Leadership, justice and trust comprise the three (multidimensional) concepts (the focus) of Julia Richardson's Organizational Leadership course.  Now, based on your experience, you may somewhat grasp the meaning of these higher-order concepts.  Maybe you've known someone who demonstrated leadership, but any experience-based reasoning remains hand-to-mouth and inadequate for our MBA education.  We encourage you to share experiences in the classroom, but you should remember, experience-based reasoning is:

1. based on a small N sample (N = one).
2. essentially arguing from opinion (bad, very bad, wrong).
3. with very limited generalizability (change the context and your experience loses value).    

We ask you to:

1. abstract away from complex business problems.
2. ground your thinking in established bodies of knowledge (course materials).
3. define key concepts (from course materials) as a foundation for constructing logical arguments.
4. Use course materials for in class discussions, written assignments and exams.
5. And, appropriately reference your sources.

I know, my explanation of the brain is abbreviated and crude but, if you want a
more thorough explanation, you'll need to ask me nicely.

Cheers,  David

The Power of Introverts

Everyone Contributes Valuable Insights!

In a prior post, I emphasized the importance of active learning and the collaborative discovery of
knowledge through shared inquiry in our classes.   Some of our students may remain reflective by nature; others may initially feel hesitant to speak in class; still others may face the challenge of thinking in one
language (e.g., Chinese) before translating thoughts into English; and differences in
culture may compel others to remain respectfully quiet.

I have included the "Power of Introverts" Ted Talk to embolden our more reflective students
and encourage more vocal students to remain culturally sensitive, respect everyone's
right to participate and strive for an inclusive learning experience.

Thank you,

David

Shared Enquiry: the path to becoming a self-reliant thinker

Shared Enquiry = the path to becoming a self-reliant thinker

Right answers do not exist in MBA-level discussions; everyone

in the classroom should actively engage in the discovery of knowledge.

The Otago MBA management team and our lecturers subscribe to an active learning model in which students participate in the learning process and daily practice their thinking skills, while demonstrating the ability to apply course material (e.g., marketing, finance, organizational leadership, economics, statistics) to complex business problems. In other words, we encourage shared enquiry as the path to becoming a self-reliant thinker, someone who can express him or herself with clarity and conviction; who can think conceptually (e.g., identify and define key terms); as well as contribute to the collaborative discovery of a deeper understanding of fundamental challenges facing global businesses.

Our students are asked to adhere to essential guidelines for engaging in productive discourse in our small seminar-style classes:

• Resist overly quick judgements
• Avoid arguing from small-N experience (e.g., we did it this way) and opinion
• Support your reasoning using credible references (e.g., course materials)
• Relate comments to the ongoing discussion
• Strive for dialogue rather than a monologue
• Seek to include all others in the conversation
• Do not direct all discussions through the lecturer
• Consider questions as a good way to enter the conversation
• Avoid dominating with comments that are too lengthy or of little interest to others
• Use courtesy and civility in all communications
• Feel encouraged to continue lively debates outside the classroom

I will have more to say about the importance of building powerful thinking

skills in future posts: we consider this as fundamental to the transformation our students

experience in our programme.

Cheers,

David

Meet our Otago MBA Team: Professor Denis Kobzev

Professor Denis Kobzev

All elements of our business model must fit together to deliver best value to our customers:

 this includes the selection of professional educators we place in the classroom. 

I would like to introduce Denis Kobzev, a thoughtful friend and gifted educator who has earned the respect
of our Otago MBA management team and students. Denis holds the positions of Director of Business Education, Leeds Trinity University, UK; Associate Fellow, Operations Management Group, Warwick Business School, UK; and Visiting Professor in our Otago MBA: teaching Operational Excellence.

Denis brings a broad base of global, practical knowledge into the classroom through his experiences in senior management positions at international giants Procter & Gamble and Schering Plough. Denis can also boast prior involvement in business / development projects in Europe, Middle East and Africa in collaboration with corporate partners (e.g., ASDA, Aushan, Migros, IBM, Accenture, HSBC and BT Group), as well as the United Nations and World Health Organization.

Denis has aided in the design of leading management programmes in Germany, Russia, Norway and Australia. He views the active exchange of knowledge among experienced professionals as "the heart of a good MBA programme." Last year, Denis designed an experiment in collaboration with Olga Meglinskaya, our Curriculum Delivery Manager, to promote critical reasoning through peer assessment. He asked our students to sport a different (uncomfortable) hat and critique the reasoning of peers, and thereby learn to refine their own thinking abilities. The experiment was a valuable contribution to our programme.

We depend on the talents of gifted educators like Denis to

deliver best value to our MBA students.

Cheers, David

 

Our Classroom: the Power of Introverts

Everyone Contributes Valuable Insights!

In a prior post, I emphasized the importance of active learning and the collaborative discovery of
knowledge through shared inquiry in our classes.   Some of our students may remain reflective by nature; others may initially feel hesitant to speak in class; still others may face the challenge of thinking in one
language (e.g., Chinese) before translating thoughts into English; and differences in
culture may compel others to remain respectfully quiet.

I have included the "Power of Introverts" Ted Talk to embolden our more reflective students
and encourage more vocal students to remain culturally sensitive, respect everyone's
right to participate and strive for an inclusive learning experience.

Thank you,

David

Back to our Business Model: conceptual reasoning

One of my favorite photographs owing to the lighting and
complementary colors: taken south of Dunedin

Time to get back to our business model.  I have explained: (1) we remain a boutique MBA programme (by choice) to deliver best value to our students and concede we remain beneath the radar of Top 100 rankings; (2) we are selective about whom we allow into our programme (less than 1 in 10) and resist compromising our standards for size; (3) our unique value proposition emphasizes accelerating your career in the global economy, both through facilitating a transformation in you as a business professional and using our project work to get you into the right industry, corporation and/or professional network; (4) we eschew placement in favor of rigorously training and supporting our students in pursuit of their career ambitions; and (5) our students practice their thinking skills daily in the classroom on the way to becoming truly powerful individuals who can express themselves with clarity and conviction.

All of the pieces of a business model must fit together to deliver best value.

Now, I'll elaborate on the notion of conceptual reasoning and how we develop this ability.  Our core courses (phase one, on-campus programme) focus either on building quantitative skills or thinking within credible business disciplines: e.g., content areas of economics, marketing or sustainability.  Content courses introduce concepts, but the precise definitions of these concepts vary from one course to the next: e.g., the definition of a market in economics vs. in marketing or performance in finance vs. sustainability.  Indeed, much of business revolves around a small number of concepts: market, customer, product (encompassing service), industry, competitor, competition, strategy, business model, performance, cost (plus cost structure), capital (including human capital), financial & physical assets, production/operations, transaction, organization form, ownership structure and so forth. 

Here's a critical insight: most business problems can be structured by identifying the concepts involved; the relevant business discipline needed to structure your thinking; and the appropriate analyses to support informed decision making.  It sounds simple but the challenge is to abstract away from the immediate details of a business situation (i.e., noise) to think conceptually, an acquired ability.

We emphasize conceptual thinking (or reasoning) as a theme across courses, thereby helping students to refine this ability as they progress through our programme, but I'll emphasize two critical experience that directly bear on challenging your reasoning.  First, our Strategic Planning course taught by our much loved Richard Higham, challenges your "dominant paradigm" or the concepts and definitions used to inform your thinking. Second, our high-level project work (e.g., Live Case & capstone consulting engagement) requires you to define the scope of work in terms of key concepts.  As stated in our BUSI 540 course outline:  

"Any 540 project we conduct focuses on business concepts.  Some concepts delimit the project scope (this product or those competitors), while other concepts are defined by your analyses.  Indeed, an entire 50-page report may focus on defining one concept (e.g., what is the market?).  In this regard, you advance knowledge (make an intellectual contribution) by defining / describing some core business concepts more precisely than anyone has before—and you inform your definition (of the market) with data." 

When you're ready to get started, let us know.

David

The Classroom: a focus on thinking

Dunedin is a city of small cafes, cozy restaurants and friends

well-suited for good conversation.

I've been a professional educator for more than twenty-five years and this topic, the classroom experience, is one about which I am passionate. You would think that, over twenty-five years, pedagogies would change and we (as educators) would become more effective in facilitating learning. Yet, too often teachers, a term very loosely defined, continue to lecture at students who passively take notes under the premise that this person is providing right answers (i.e., pearls of wisdom) concerning whatever problem businesses may face: the idea is pure nonsense.

Not at the Otago MBA!

Remember, "right" answers do not exist in MBA-level discussions and everyone

in the classroom should actively engage in the discovery of knowledge.

The Otago MBA management team subscribes to an active learning model in which students participate in the learning process and daily practice their thinking skills, while demonstrating the ability to apply course material (e.g., from marketing, finance, economics) to complex business problems. In other words, we encourage shared inquiry as the path to becoming a self-reliant thinker, someone who can express him or herself with clarity and conviction; who can think conceptually (e.g., identify and define key terms); as well as contribute to the collaborative discovery of a deeper understanding of fundamental questions facing global businesses.

Our students are asked to adhere to essential guidelines for engaging in productive discourse in our small seminar-style classes:

• Resist overly quick judgments
• Avoid arguing from small-N experience (e.g., we did it this way) and opinion
• Support your reasoning using credible references (e.g., course materials)
• Relate comments to the ongoing discussion
• Strive for dialogue rather than a monologue
• Seek to include all others in the conversation
• Do not direct all discussions through the lecturer
• Consider questions as a good way to enter the conversation
• Avoid dominating with comments that are too lengthy or of little interest to others
• Use courtesy and civility in all communications
• Feel encouraged to continue lively debates outside the classroom

I will have much more to say about the importance of building powerful thinking

 skills in future posts: we consider this as fundamental to the transformation our students

 experience in our programme.

As always, I invite you to apply now.

David