1 Network Birmingham Business School YOUR Alumni Newsletter Issue Age of imitation Is mimicry the key to modern business survival? INSIDE 3 Gaining a purchase on ethics 4 The hidden heroes of the economy 15 Your chance to win a Kindle e-book reader
2 2 Your Network Welcome to Your Network Welcome to the second issue of the Birmingham Business School alumni newsletter, Your Network. Much has happened since our first issue last spring, including financial crises in Greece, Portugal and Ireland; a freezing winter costing the UK economy an estimated 1.2 billion per day in lost sales and transport disruption, and a period of economic uncertainty as many countries face an increased cost of living alongside large government spending cuts. It has also been a time of change in the UK higher education sector, with major reform to university funding and a new structure for undergraduate tuition fees from In announcing its proposals for undergraduate fees in March, the University was also able to share details of planned investments to improve the student experience and support students from lower income backgrounds. We are absolutely focused on ensuring the very best students come to Birmingham, regardless of their personal situation, so we can play a part in shaping them into the leaders of tomorrow. Leadership is a theme you will find appearing throughout this issue from the feminisation of management, to SMEs quietly driving forward the economy, and the crucial role of innovation in modern business performance. You will also find a debate as to whether ethical companies can maintain their moral standards after being acquired by a multinational business, and how we will be celebrating the 25th anniversary of the MBA programme at BBS. I very much hope you enjoy reading these articles, and the profiles of students and staff, and please do let us know what you have found useful and what you would like to see in future issues. Among the exciting developments here at BBS is the establishment of the new MBA centre. Due to open in autumn 2012, it will include an alumni lounge, business incubator, media centre, the academy for sustainable international business, and the women s enterprise and leadership research centre. All connected by an open learning hub centred around a coffee house to generate an innovative and enterprising environment. Even as the dust begins to settle on the new UK higher education landscape, please be assured that our goals remain consistent to deliver high quality and relevant programmes; to ensure our research fosters clearer understanding of the business world; and to continue to enhance our international reputation to the benefit of all our students and alumni. With all best wishes Professor David Dickinson, Director of Birmingham Business School This edition of Birmingham Business School s Alumni Newsletter was created by an editorial board comprising: Editors Helen Boyle, Alumni Relations Officer Rebecca Kilcullen, Alumni Communications Officer Your Network Editorial Board Danielle Albracht, Alumni Relations Projects Officer Jade Bressington, Alumni Relations Manager David Mellor, MBA student Robert Diprose, MBA student Alexander Donohue, Alumni Communications Officer Professor Steve Kempster, Director of the Full-Time MBA Laura King, MSc Marketing Communications student Alicja Zasucha (MSc Marketing, 2010) Dr Pamela Robinson, Lecturer in Comparative Industrial Relations Dr Glyn Watson, Senior Lecturer in Procurement and Operations Management, School Director of Education Hazel Westwood, Senior Teaching Fellow Contributors Michelle Leavesley (MSc Marketing, 2005) James Villarreal (BSc Economics, ) Professor Isabelle Szmigin, Professor of Marketing, Head of Department of Marketing Doug Fraser (MBA Strategy and Procurement Management, 2010) Wendy Fox-Kirk, DBA student Professor Oded Shenkar, Chair in International Business Contact us We re always keen to hear from Business School alumni. To update your details or tell us what you have achieved since graduating, contact the Alumni Relations Team on +44 (0) or
3 Your Network 3 Gaining a purchase on ethics Can an ethical company s moral fi bre survive a takeover by a multinational corporation? MSc Marketing Communications student Laura King considers the coming together of seemingly unlikely business bedfellows. Consequently, its ethical reputation has suffered in the eyes of consumers. From these examples it can be seen that the success of an ethical acquisition depends largely on the motives of the acquiring company and its attitude towards CSR. Critics of the Cadbury-Kraft deal argue that Kraft s commercialism, coupled with its heavy borrowings to fund the acquisition, will undermine Cadbury s deeply rooted philanthropic principles, while supporters contend that Kraft s reputation for sustainability could create an ethical rival to food giant and CSR laggard Nestlé. Given the British population s emotional attachment to one of its most celebrated brands, Kraft s handling of the situation will undoubtedly impact upon its reputation in the UK market whether for better or for worse remains to be seen. With contributions from Karolina Bareikaite, Andra Dinu, Amber Haktanir, Aliki Sitareniou and Yoshitaka Ishikawa. Emerging trend: The Cadbury-Kraft deal is just one example of an ethical acquisition The Cadbury-Kraft deal is just one example of an emerging trend in ethical acquisitions, in which businesses built on socially responsible foundations are acquired by multinational corporations. For the acquirer, ethical brands can be used as a means of increasing market share or improving their reputation for corporate social responsibility (CSR). For the acquired companies, such deals can provide access to new markets and funding for product development. But can the ethical principles of these companies survive in a multinational? When Unilever acquired Ben & Jerry s in 2000, the prime motive was to increase profi ts by acquiring a brand with a distinctive social character and market appeal. Despite initial CSR losses, such as the discontinuation of pre-tax profi t donations by Ben & Jerry s to charity, Unilever has gradually begun to understand the value of an ethical brand in today s market, and has even adopted some of the CSR policies of its partner. Ben & Jerry s meanwhile has benefi ted from reduced costs and ineffi ciencies, coupled with access to international markets. The American yoghurt company Stonyfi eld Farm, dedicated to the creation of a healthier planet through the promotion of natural foods and environmental sustainability, also benefi ted fi nancially by merging with a multinational corporation when it agreed to a deal with Groupe Danone in Danone already had an impressive reputation for sustainability, and not only supported the continuation of Stonyfi eld s ethical activities, but also set out to learn from the CSR expertise of its partner. The deal became a frequently cited example of a successful ethical acquisition. An arguably less successful takeover was that of The Body Shop by L Oréal in June Over its 30-year history, The Body Shop had established itself as a pioneer in ethical consumerism, while L Oréal suffered from a relatively poor reputation for CSR largely due to its use of animal-tested ingredients and some activities of its parent company Nestlé. Despite benefi ting from L Oréal s commercial awareness and fi nancial investment, The Body Shop s CSR policies appear to have become complementary rather than central to the business itself. Do you have a view on ethical takeovers? and tell us about it. Get the latest BBS news every month As an alumnus of the Birmingham Business School, you should be receiving BBS Bitesize, our alumni e-bulletin, every month. Bitesize features exclusive news from BBS as well as news highlights from the wider University. To ensure you continue to receive these bulletins, please make sure that all of your contact details are up to date. You can update all of your personal information at stayintouch/update.shtml Alternatively ac.uk or +44 (0) with your most up-to-date details and we will add you to our mailing list.
4 4 Your Network The hidden heroes of the economy Too often the forgotten footsoldiers of the business community, Small and Medium Enterprises (SMEs) are quietly driving employment, innovation and a return to growth says MBA student David Mellor, who was himself a director of a successful SME. Attention is so frequently focused on the large multinational corporation that those businesses with revenue less than 50 million are often ignored. However this masks their true value to the global economy. In the UK alone, more than 99% of businesses are SMEs; they employ more than 60% of the workforce and contribute in excess of 50% of the nation s GDP. In China the sector is even stronger, employing more than 80% of the workforce. SMEs have a key role to play in driving the economic recovery, most notably in their local region where entrepreneurial SMEs contribute rapid growth, particularly in their early years. Accordingly Birmingham Business School, and the University as a whole, has a responsibility, and opportunity, to inspire this growth in our local region, the West Midlands. This manifests Chamberlain s founding vision of the University mutually engaging with the economy of the city and the area. The University already has a significant impact in the region, being directly responsible for more than 9,500 jobs and generating more than 750 million of income. However at SME level, the influence is more dynamic and proactive. Participation in the Engaging Research For Business Transformation (EREBUS) project opens access to academic research for SMEs in the region, and the contribution to Birmingham Science City helps create a cradle for research innovation for companies both large and small. Vital: SMEs have a key role to play in driving economic recovery
5 Your Network 5 SMEs at a glance In the UK, more than 99% of private businesses are SMEs The sector employs 13.6 million people and accounts for 65% of all new jobs created China SMEs employ more than 80% of the workforce Sources: Department for Business, Innovation and Skills (2011); Leverhulme Centre for Research on Globalisation and Economic Policy (2010); World Bank (2003) More directly, the University s Entrepreneurship and Innovation (EI) team encourages business start-ups and social enterprise by offering funding, incubation facilities, and a series of programmes and competitions designed to inspire a new generation of SMEs in the region and beyond. It is this inspiration that is perhaps the greatest contribution any university can make to the SME community. James Villarreal, the youngest ever Birmingham Young Professional of the Year, and his business partner Sandeep Krishan, formulated their idea for a shared utilities business called Glide in their first year here at Birmingham. Using alumni contacts arising from an EI lecture, they raised funds to start the business in June In return it is now driving recovery through employing 25 full-time staff and servicing 15,000 customers: a classic small, but high growth model. Unsurprisingly James is enthusiastic regarding the role of SMEs. SMEs like Glide drive employment, with employee take on rates exceeding our corporate rivals, and many staff coming straight from unemployment, says James. Similarly through offering internships, with a high level of empowerment, we are sowing the seeds of this drive to the next generation. I believe the SME community embraces higher levels of vision, drive and investment in new technology, and should be used as a catalyst for a feel good confidence to return to the economy. SME networks also disproportionately engage with the local community, from active social responsibility activities, through to a transparent tax and rate contribution to their own society. A similarly inspired champion of SMEs is Michelle Leavesley (MSc Marketing, 2005), and visiting lecturer at BBS. Michelle is a highly respected commercial marketer, with a portfolio of SME interests in communication and social media, and Chair of the Institute of Directors Young Directors Forum. I believe SMEs drive employment and innovation, says Michelle, and I see their role as continually redefining and reshaping strategy in their sectors to remain competitive. This creates a dynamic, outward-looking economy with a focus on change. They also generate support industries of their own, creating a virtuous circle. The only brake on this momentum is the continued challenge of liquidity, given banks reticence to lend, particularly at the smaller end of the economic scale. We believe that interaction between the School and SMEs, is of great value to both our students and SMEs and we are working to build opportunities across all of our programmes. Professor David Dickinson, Director of Birmingham Business School BBS is committed to growing this relationship with SMEs, and the regional business community further. Director of BBS Professor David Dickinson says: We believe that interaction between the School and SMEs is of great value to both our students and SMEs and we are working to build opportunities across all of our programmes. Our new International Business Academy will support budding local businesses by offering incubation facilities using the very latest technology. We are also designing a new major project to provide consultancy advice to the SME community, including business planning, financing and marketing, and identifying overseas opportunities through our international networks of students and alumni. Therefore while this model of engagement is vital at the regional level, it need not be uniquely restricted to a local horizon. As BBS and the University inspire innovation and entrepreneurship among a diverse, global cohort of business leaders, they can in turn drive future SMEs across the world to be the catalyst of economic renewal. With a stream of inspired individuals and dynamic SMEs, long may it continue that the hidden heroes of the economy drive the return to growth, regionally, nationally and globally. Do you have a view about SMEs and their value to the economy? Contact us via
6 6 Your Network Blurring the line between imitation and innovation If necessity is the mother of invention, is imitation its unruly grandchild? With successful products and services spawning copycats faster than you can say patent pending, MBA student Robert Diprose reviews Professor Oded Shenkar s book Copycats and evaluates his view that the increasingly widespread practice of imovation is necessary for modern commercial staying power. If evolution has taught mankind one thing, it is that efficiency is a key ingredient of survival. Moreover, it is generally accepted that efficiency can be improved through the effective transferral of knowledge, which in the natural world tends to occur through mimicry or emulation. The question is, should shareholder value be overtly based on the imitation of others, their products, services or methodologies; and is there more to success than simple copying implies? Professor Shenkar s book, Copycats, illustrates that the average time taken for widespread imitation has steadily reduced, from 20 years or more prior to the 1930s to mere months by the early 21st century, largely as a side product of globalised demand. The obvious extension is the traditional counterfeit market, so should imitation be viewed simply as justified counterfeiting and why has the imitation life-cycle shortened so significantly? The very existence of patent law demonstrates that, at least in terms of product, imitation is effective (there is no legal protection to guard against the reproduction of service or business processes). In the article Imitation is more valuable than innovation, Professor Shenkar comments that: Approximately 98% of the value generated by innovation is captured not by the innovator but by the often overlooked, despised copycats. So imitators benefit by reducing their exposure to the costly processes of inventing, entering only pre-existing markets and obtaining better understanding of consumer requirements. This does not explain, however, why the time taken to imitate has been steadily falling. One of the main factors is the refusal of major manufacturing countries to recognise and respect international patent laws. When such countries do not allow due legal process, the risk of penalties or sanctions preventing the imitator from benefiting from others ideas is very small. In addition, increasing levels of standardisation and modularisation make replication simpler, removing the need for the detailed and previously unique tacit knowledge embedded by an organisation to be understood. Rather the requirement now is a detailed knowledge of the application of globally defined processes, standards and methods. So increasing compatibility has effectively normalised the knowledge playing field and reduced capability differentials between competitors. Extending this further, Professor Shenkar discusses that codification and the ability to widely and rapidly distribute and capture orderly sets of design metadata has had significant impact. While corporations ability to replicate is increasing, the question Is it right? still remains. Morally, unacknowledged replication
7 Instinctive: In the natural world, knowledge transfer tends to occur through mimicry or emulation Your Network 7 While corporations ability to replicate is increasing, the question Is it right? still remains. Robert Diprose, MBA student for personal or even corporate gain is unacceptable and this position has strong support. But what about taking an existing offering and improving it? The process then becomes one of imitation and innovation, or imovation perhaps. Now the definition of acceptable blurs and it could be argued that the rewards reaped are justified by the investment levied against the improvements. For some, imovation is a key tenet of strategy. Copycats cites the case of pharmaceutical company TEVA, which employs lawyers to identify openings for generic drug propositions as a result of notable patent weaknesses. There is then an ironic paradox that the process employed to prevent replication actually expedites it by publishing the key differentiators within the legal submissions. Within Copycats, Professor Shenkar identifies that many executives firmly refute imitation as either a strategic activity or organisational objective, thus indicating the stigma associated with deriving benefit from the work of others. But the whole purpose of environmental scanning is to identify and mitigate against any competitor advantage. Therefore, improving your offering has to be one of the most basic strategic options necessary for staying at the table. This requires the organisational capabilities to assess, evaluate and understand the unique aspects of others work, which becomes an organisational and subsequently a strategic issue. Professor Shenkar comments that: Imitation is becoming more feasible, more beneficial, and faster than ever before because of the advance of globalisation, the codification of knowledge, and the erosion of legal, strategic and marketing deterrents that have previously kept it at bay. At the same time, it appears as if business scholarship has yet to undergo the transformation experienced in the biological Continued on p8
8 8 Your Network Approximately 98% of the value generated by innovation is captured by copycats. Professor Oded Shenkar, Chair in International Business Continued from p7 and cognitive sciences, where imitation, once thought of as primitive instinct, has come to be viewed as a complex, intelligent, and creative endeavour, the capabilities for which are rare and highly valuable. Or is it the case that acts of imitation confer credence to those whose processes, products or systems are replicated? Imitation identifying a prior tacit deficit which the disadvantaged strategist attempts to overcome through replication in order to regain business authority? The cost then is that of maintaining any gained advantage and unless this is achieved, net benefits will be short lived as others, ironically, replicate the process, so underlining the key point! Unless the differentials between organisational offerings are actively and objectively limited, competitors will achieve relative commercial success, undoubtedly at your cost. Imovation as a strategy is not therefore optional, it is a necessity. Copycats: how smart companies use imitation to gain a strategic edge by Professor Oded Shenkar is published by the Harvard Business School Publishing Corporation, Boston, Massachusetts, USA. Imitation is more valuable than innovation published by the Harvard Business Review, April The Centre for International Business and Organisation Research (CIBOR) was established at BBS in 2003 to further understanding of the international aspects of business organisation through working in multidisciplinary research teams, enabling them to approach the issues from diverse analytical perspectives. For more information please visit the CIBOR website ac.uk/research/international/cibor Evolving: Is taking an existing offering and improving it an acceptable practice? About Professor Oded Shenkar Professor Shenkar has conducted research in international business for 25 years, starting with his doctoral dissertation on the Chinese bureaucracy which involved work with the department of Sociology and the East-Asian Institute in addition to the Graduate School of Business at Columbia University. He has published numerous books (the most recent, The Chinese Century, has been translated into 12 languages) and close to 90 articles, and his work has been widely cited in major media such as The New York Times, The Wall Street Journal, the Financial Times and The Economist, among many others. He appeared before the US China Congressional Commission and is Vice President and Fellow of the Academy of International Business. About Robert Diprose Robert Diprose graduated in 1998 with a degree in Electronic Engineering with Medical Electronics from the University of Kent at Canterbury and then in 1999 with a postgraduate degree in Communication Systems Engineering from the same university. From here he worked as a government research scientist for the Defence Evaluation Research Agency and then transferred as part of the privatisation deal to QinetiQ in Leaving in 2009, Robert undertook a short career break before commencing his MBA at Birmingham Business School in September 2010 and accepting the Chair of the Institution of Engineering Technology Birmingham Local Network for the and sessions. Do you have a view on imovation? and tell us about it.
9 Your Network 9 Alumnus Profile Doug Fraser (MBA SPM, 2010) talks about balancing work, study and family life and how his studies have benefited him in his career. I started the MBA in strategy and procurement in 2007 right after I was married graduating in 2010 (fortunately I have a very patient wife, despite all the hours I spent studying!). I must admit I was slightly apprehensive about returning to study after a ten-year break, especially with a demanding full-time job, but the module approach and flexibility to delay modules where necessary allowed me to keep a study/work/life balance. I enjoyed all the modules, even those, such as finance, that I was convinced would be challenging. I can definitively say all have proved relevant in my work (and sometimes home) life. I have remained with my company, Crown Agents, during and after the programme. Crown Agents is an international development company and I work in the procurement division, which provides transactional and consultancy procurement services in the developing world. Our clients, to whom we offer procurement services, value working with someone with a procurement MBA and who is also MCIPS (Member of the Chartered Institute of Purchasing and Supply) accredited. The timing of the MBA was excellent for me too as it coincided with a number of long-term postings in Asia (including Vietnam, Cambodia and finally Japan where I am still based) managing large procurement assignments. I was able to apply many of the concepts that I learned during the course on these overseas assignments. Being posted in Asia during the period of study also enabled me to take modules in Birmingham s partner institutions in Hong Kong and Singapore, taught by Birmingham academics. I even took some of my examinations overseas in British Council premises! My fondest memories of my time at BBS are certainly the people. It was great to meet such a variety of people from and in different countries, from different backgrounds and sectors, many of whom will remain friends long after the end of the programme. Contact us Send a short profile and photograph to and you could feature on these pages or our website. Birmingham Business School Birmingham Business School...where experience counts Part-time Executive MBA and MBA Strategy and Procurement Management We offer a suite of high quality programmes in a variety of flexible formats including part-time Executive MBA and MBA Strategy and Procurement Management Learn more Elaine Baker Tel: +44 (0)
10 10 Your Network Importance: Historically dominated by men, is leadership now becoming increasingly feminised? The next generation of leadership? Building from apocryphal Viking origins, leadership has been largely a male arena. But, with more women than men now becoming managers, that is all set to change. Leadership is increasingly feminised, believes Professor Steve Kempster, marking a generational change in management.
11 Your Network 11 The importance of leadership to organisations is clear. It is the number one issue, seen as the key process to arrest organisational malaise and provide the cornerstone for growth through inspiring and motivating followers towards organisational goals. As a consequence organisations have invested heavily in developing appropriate leadership estimated to be $60 billion in the US alone in 1998 (Fulmer and Wagner, 1999). But it is difficult and slow to change generational practices of leading. Leadership and leadership learning are dependent on each other like two sides of the same coin. Leadership is an evolving phenomenon being continually reshaped by the values and practices of particular generations, embodied in notable leaders. In the past these have been predominantly men. In the region of 90% of board directors in the FTSE 100 are men; and only slightly over 20 years ago, management was seen as a non-conventional career for women (Phillips and Imhoff, 1997). The consequence of the historic numeric dominance of men in management roles has left a legacy in terms of leadership practice prevalent in organisations. However increasing numbers of women (perhaps even more women than men now) are entering management. We are now in the vanguard of a generational change, which I argue can be seen as the feminisation of leadership. In part the origins of the word leadership appear to have Scandinavian routes associated with the Vikings. A leader was a man at the bow of a longboat directing the course through openings in the ice, known as leads. The developed knowledge of the ice movements and skill in guiding the boat became leadership. The ability then to lead from the front, make and be committed to decisions and have others trust such action has become synonymous with the activity of leadership. The essential relationship between leaders and the led is thus entwined with the notion of a figurehead able to be wise, strong and charismatic. In essence the heroic figure in which we entrust our fate. It is this leader-led or more usefully leader follower relationship that is the crucible in which leadership is learnt and evolves. It is in the leader follower relationship that we will see the emergence of a different generation of leadership. Leader follower relationships have moved away from command and control. There has been a strong recognition that for organisations to survive and renew themselves they need to place overt value on the individual as intellectual capital. This sea change from mechanical obedience to `wise instructions from above, to a learning culture seeking to continually improve, has catalysed a wave of new thinking on leadership oriented at being supportive and facilitative, stimulating a societal sense of purpose and sustainability, enabling learning and catalysing change. In this way leadership is much less about a hierarchical position and more a process, a network, a collective approach a leadership relationship with less fixed boundaries between nominated leader and followers(s): a more feminised form of leadership. The dominant mechanism shaping leadership learning is through observing and engaging with notable people (Kempster, 2009). Such formative influences are our parents, teachers, religious figures, media images of political and sporting figures this provides us with a broad general background understanding. However it is in the organisational setting that this background perspective becomes refined into a practice of leading, and similarly a practice of following. Embedded historic approaches to leading simply cannot be changed within a single intervention. Leadership will evolve alongside the changes in those who observe leading. For example, as women become significantly more prevalent in middle and senior management positions so the practice will evolve in an imperceptible way a generational change. At Birmingham Business School this is firmly understood. We are designing our MBA programme to shape awareness, expectations and practices that will be attuned to the next generational approach to leading. We will enable our MBA delegates to aspire to become most capable of being highly effective in leader follower relationships. Not based on hierarchical position but rather appreciative of integrated societal demands and with extensive global experience able to engage, facilitate and enable teams to achieve organisational and societal purposes: in essence achieving sustainability. The Viking leader was an expert at understanding ice leads and providing direction. The next generation of leaders will become experts in supporting, stimulating and inspiring people through providing meaning and challenge. Society has changed and followers expectations of leaders have thus similarly changed. The next generation of leadership will be not be hierarchical and authoritative, but rather a purposeful, passionate and collective relationship. Leadership and leadership learning are dependent on each other like two sides of the same coin. Leadership is an evolving phenomenon being continually reshaped by the values and practices of particular generations, embodied in notable leaders. References Fulmer, R.M., & Wagner, S. (1999). Leadership: Lessons from the best. Training and Development, March, 53 (3), Grint, K. (2005) Leadership: Limits and Possibilities. New York: Palgrave Macmillan. Kempster, S. (2009) How managers have learnt how to lead: Exploring the development of leadership practice. Basingstoke: Palgrave Macmillan. Phillips, S. D., & Imhoff, A. R. (1997). Women and career development: A decade of Research. Annual Review of Psychology, 48, Visit to find out more about Professor Kempster s views on leadership and his redesign of the MBA programme.