www.lboro.ac.uk/sbe

Loughborough universityschooL of business and economics

bi-annuaL magaZine

/ issue 5 / spring 2013

dream Big, Build BiggertHe enterprise issue

entrepreneurs in residence p4enterprise at WorK p10

david LLeWeLLyn on the state of europe’s banKs p16does traveL instiL entrepreneuriaL sKiLLs? p28

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03 Loughborough university schooL of business and economics

I am pleased to welcome you to the fifth issue of Inspire, the bi-annual magazine of the School of Business and Economics at Loughborough University. This edition of Inspire has been informally dubbed ‘The Enterprise Issue’ by the team because of the unplanned focus on enterprise: ‘unplanned’ because an inordinate number of articles and reports submitted to the Spring 2013 edition happened to be about enterprise. But not accidental at all if you look closely at what we as a School are all about…

Looking further afield, at the UK’s economy and indeed the global economy, enterprise and innovation are key touch points for economic recovery and growth. In an earlier issue of Inspire, I welcomed the fact that the Department for Business, Innovation and Skills was exploring a number of initiatives around the ways in which business schools could contribute to the economic recovery. And I believe that Loughborough, with its strong connections with the business community, has the potential to contribute to that elusive recovery through both its programmes and research activity.

I am consequently delighted that Lord Young of Graffham, in his report on small firms released in April, identifies a central role for business schools in supporting sustainable business growth. The proposed “Supporting Small Business Charter” offers real opportunities and funding for the School to play a role as a regional, and indeed national, “economic anchor institution” supporting the development of the SME community. Recent developments within the School, such as the securing of the UKTI mini-MBA in Exporting as part of a consortium of schools and the appointment of two Entrepreneurs in Residence, link directly with the agenda laid out in Lord Young’s report.

Critically, the report recognises that the capacity of business schools to act as such economic anchor institutions is dependent on the strength of the business school research base. For Loughborough, cutting-edge intellectually excellent and highly relevant research is at the heart of the School. The work undertaken by our specialist research centres serves

as exemplars of the way in which research underpins the School’s capacity to act as an anchor institution on the national stage. The Centre for Post-crisis Finance’s research on the provision of finance for the real economy and the Centre for Global Sourcing and Services’ research on innovation in organisational forms are perfect examples.

The breadth and relevance of the School’s research in general is evident throughout this edition of Inspire: sustainable supply chain management through to employee attitudes in off-shored operations, the research reported addresses issues that not only are immediately relevant to practice, but that add to and enhance the management and economics canon.

The significance of the School’s research is evident from the standing enjoyed by many of the School’s academics, among them David Llewellyn, Zoe Radnor and Samir Dani, whose work is featured in this edition. To me, what is special about Loughborough is the real integration of such research into our teaching, an integration that is central to the excellent student experience provided by the School.

I hope this edition of Inspire provides further insight into our work and encourages you to get involved in our activities.

Sincerely Yours,

angus Laing dean, school of business and economics Loughborough university

Welcome

Dean Angus Laing

developing Winners | achieving excellence | delivering value

04

news

david t Llewellyn, professor of money and banking at the school, has been appointed chair of the european banking authority’s (eba) infl uential banking stakeholder group (bsg), having previously been the group’s vice-chair.

“These are challenging times for bank regulators around the world,” said David, “as responses are needed following one of the most serious banking crises ever. The central task is to not only construct regulation to lower the probability of future bank failures, but to also establish arrangements to lower the cost of those failures that do occur and, most especially, to protect tax-payers”.

The EBA is the European Union agency responsible for the regulation of banks across the EU area, and the Banking Stakeholder Group is its consultative and monitoring body. The BSG’s role is to help facilitate consultation with stakeholders in areas relevant to the tasks of the EBA. The Group is composed of 30 members, drawn from EU member states and representing credit and investment institutions operating in the Union, consumers of banking services, representatives of SMEs, plus six ‘Top Ranking Academics’.

The BSG is consulted on actions concerning regulatory technical standards and their implementation and the guidelines and recommendations made by the EBA. It also submits opinions and advice to the Authority, focussing in particular on common supervisory culture, peer reviews of competent authorities and assessment of market developments. The Group also has the power to submit a request to the Authority, as appropriate, to investigate alleged breaches or non-application of European Union law.

top eu post for school professor

David T Llewellyn, Chair of the Banking Stakeholder Group

manchester united

a great day out Jim Saker (Associate Dean, Enterprise) visited Manchester United Football Club as a guest of Manchester Business School and Saudi Telecom Company, looking at ways in which the School can develop a relationship with MBS for various B2B activities.

After meeting with Sir Alex Ferguson (below) and world-renowned players Rio Ferdinand and Ryan Giggs, Jim commented: “It is interesting to note the power of the Manchester United brand in the Middle East and Far East as well – one for aspiring brand managers to continue to try to emulate!”

entrepreneurs in residence As part of the work of the Glendonbrook Centre for Enterprise Education, the School of Business and Economics has appointed Graeme Radcliffe (Chairman at PetScreen Limited) and Stuart Miller (Co-founder & CEO at ByBox) as Entrepreneurs in Residence. Graeme and Stuart will support the promotion of enterprise and entrepreneurship activities among the School’s undergraduate and postgraduate students. In particular they will support the development of student business start-ups through the provision of experience-based guidance and access to professional networks.

Stuart Miller

Jim Saker with a representative from Saudi Telecom Company, Dennis Law and Sir Alex Ferguson

05

news

Loughborough university schooL of business and economics

new student ventureibidem sports is a strategic sports sponsorship consultancy, founded and run by peter dickenson (director, b2c) and soeren Winkelmann (director, b2b) to help sports organisations and their respective partners understand and apply the latest research in sponsorship so that strategic and sustainable sponsorship solutions can be found.

Both directors are doctoral students at the School, researching event sponsorship and marketing, sport sponsorship and consumers, brand development and business to business marketing.

Explains Soeren: “ibidem sports works with sports bodies, federations, properties, their sponsors and fans to unlock sustainable value in sponsor-organisation-fan relationships. We work on a ‘business to people’ philosophy. Putting people and relationships at the heart of everything we do, our company provides our clients with objective, sustainable B2B and B2C sponsorship solutions based on cutting-edge research”.

“The main aim of ibidem sports is to increase value in sponsorship associations,” adds Peter. “It does not matter which side of the sponsor-property partnership our clients come from: we offer a number of educational workshops, sponsorship consultancy and measurement analyses to support both sport organisations’ and sponsors’ strategies.”

For more information go to www.ibidemsports.com

Soeren Winkelmann can be reached on s.c.winkelmann@lboro.ac.uk

Peter Dickenson can be reached on p.dickenson@lboro.ac.uk

Both directors are doctoral students at the School, researching event

For more information go to

Soeren Winkelmann

laura unsworth lends support to local sports dayLaura Unsworth, current School of Business and Economics student and Olympic medallist (GB women’s hockey), was pleased to support a charity sports day at a local primary school aiming to raise money for new sports equipment.

St John the Baptist School (www.st-john.leicester.sch.uk) is a Church of England School founded in 1881, located in the Clarendon Park area of Leicester. The school held a Foundation Stage sports day in February during which the children did a sponsored bike ride to raise money for more bikes.

Liz Orton, the School’s Acting Head Teacher said, “The children had a great time with Laura, and we are grateful to Loughborough for this lovely opportunity. Hopefully, we can inspire the next generation to continue to be active in sport”.

Laura toured the school and met with many of the schoolchildren to discuss the benefi t of sport in school in general, and to show her support for their charity ride, bringing with her the well-deserved Bronze medal she won along with her teammates at the London 2012 Games.

06

news

eat your heart out, Lord sugar!earlier this spring, enactus Loughborough hosted its second apprentice challenge with two teams of four students competing to become the Loughborough apprentice. each team represented chocolate alchemy or toms fudge, two local businesses, in advertising and selling their products in the university.

Setting up ‘shop’ in the foyer of the School, the two teams (including SBE students Jasmine Malik and Martin Morgan) were given the opportunity to develop competitive sales, negotiating and advertising skills, helping to choose which product to sell, designing the promotional materials and fi nessing their sales pitch. And although both teams did very well, selling a combined total of more than £4,000 worth of sweets, it was TOMS Fudge that sold more and won the challenge to become the Loughborough Apprentice.

A member from the TOMS Fudge team, Jasmine Malik, a Retail, Marketing and Management BSc student, said: “The Apprentice Challenge has been a fantastic opportunity, improving our skills in selling, negotiating and advertising. We are extremely grateful to the companies involved for their time and effort in helping us during the challenge”.

founded by three Loughborough students, two of whom are studying economics at the school, toms fudge began as an extracurricular money-making venture in 2011 and has gone to be quite a successful small business in Loughborough.

Tom Mundy, owner of TOMS Fudge, had this to say about Team TOMS Fudge: “They worked amazingly. They kept us on our toes, and we are so impressed with their sales ability. We hope they go far in the fi nals”.

See TOMS Fudge’s profi le on the University’s Inspiring Enterprising Graduates webpage:

www.lboro.ac.uk/enterprise/inspiring/tomsfudgeopportunity to develop competitive sales, negotiating and advertising

www.lboro.ac.uk/enterprise/inspiring/tomsfudge

Winter 2012 graduation celebrationThe School held a celebration for its winter graduates on their achievements in a School-wide event held at the Students’ Union Fusion Bar on campus. new graduates celebrated with staff, family and friends in abundance – to see the full gallery of photos, please go to: www.lboro.ac.uk/departments/sbe/graduation-drinks-reception

Postgraduates pose for some photographs at Fusion Bar Dean Angus Laing addresses new graduates

07

news

simuL8: mixing practice with theoryantuela tako, Lecturer in operations research, organised a guest lecture late last year for fi nal-year management science students taking the core module applications of management science.

Two members from the company visited, including simuL8’s founder, Dr Mark Elder, who spoke to students about carrying out simulation modelling in practice. Mark gave different examples of projects that were carried out by the simuL8 consulting team and the lessons they learned. Mark’s insightful talk gave students a taste of real-life simulation projects. He also spoke about his personal experience of simulation modelling in the earlier years of his career, as well as a number of tips about carrying out simulation and general client projects.

“Simulation is one of the topics taught in the module Applications of Management Science,” explained Antuela. “Since I started teaching the module, I was interested to give students the practical side of simulation alongside the theory. I believe that guest lectures from industry are essential as they provide our students an excellent opportunity to relate to the topics being taught, but also to gain a better perspective of employability.”

Angela Renshaw, an undergraduate student on the module said, “The lecture gave me a practical insight into how simulation can be used to help solve real-world business issues. The key thing I will take away from the lecture was the tip given that when it comes to simulating: ‘Keep it simple!’”

visit to china Vicki Unwin, Business Development Manager, and Jim Saker, Associate Dean (Enterprise), were invited to visit the Guangdong nuclear Power Holding Company Ltd. (Daya Bay plant) in China this March to present the School’s executive education programmes portfolio to its senior management team.

Meeting with Chen Tai (Executive Deputy Director), Vicki and Jim were given a tour of the company – a huge development on Daya Bay in mainland China, an hour from Shenzhen – before presenting to 35 senior managers.

“The company has an ambitious international development plan, and we were delighted to be able to show the breadth and depth of our executive education programmes,” said Vicki, “as well as to give a fl avour for what it’s like studying, living and working in the UK.”

Loughborough university schooL of business and economics

the Loughborough graduate Women’s group was on campus recently as a guest of the glendonbrook centre for enterprise education. the group were given a tour some of the university’s newer facilities such as the sports technology institute and the design school, and had lunch in the university council chambers with members of the school and the centre.

Julie Holland, Glendonbrook Centre Director, who spoke to the Group about the history of women in the UK as university students, said, “It’s so nice to be able to give something back to these inspiring women who made it all possible for the rest of us!”

The Graduate Women’s Group is coming to end as an entity, but the signifi cance of its role as a true trailblazer for female students lives on.

‘true trAilBlAZers’ on campus

dean opens conference on innovation and growthdean angus Laing will open the “innovation and growth: unleashing potential” abs conference, taking place 21st may in London. this conference will look at the role business schools can play following the heseltine report, and what they are doing to support business locally, regionally, nationally and internationally.

Professor Laing said: “The theme of this conference, innovation and growth, has never been more important, with business schools such as ours in the unique position to be able to infl uence the current skill gaps in business management and to set positive strategy to benefi t our economy”.

Jim Saker, Vicki Unwin and Chen Tai at the Guangdong Nuclear Power Company Holding Co Ltd.

strategic support

Lead by Chairman Ian Stopps CBE, the Board members had a common motivation – they all wanted to help the School be the best that it could be. “I enjoyed studying at Loughborough and have no doubt that the skills I learnt as a student helped me to develop a successful career in business. I wanted to support the development of future business leaders and I think this is what the Board ultimately do – by advising and contributing to the running of the School.”

Since their fi rst meeting in 2011, the Board has made a signifi cant contribution to the development of the School. Their external perspective has helped to guide the Dean and his Senior Management Team to establish new MBA programmes, develop our student offer, further integrate our business and economics teaching and develop our internationalisation strategy.

So what does this group of very senior business fi gures do?

■ They act as a critical friend – reviewing the School’s strategy and fi nances;

■ They provide an external perspective on issues confronting the School and assist in the creation of strategies to tackle those issues;

■ They support research activities, identifying potential issues of concern, facilitating engagement with and disseminating research results to communities of practice;

■ They act as advocates for the School within business and policy communities as well as their own professional networks;

■ They support the School with corporate and alumni fundraising opportunities, providing guidance, helping to create the right connections and supporting events;

■ They support the teaching programme by providing an employer perspective on graduate skills, supporting work-based learning opportunities and directly inputting into programmes.

Board member Paul Holohan is an MBA graduate who now runs his own mergers and acquisitions company: “Being a member of the Advisory Board means that I get an opportunity to give something back to the institution that enabled me to make a success of my business. I am looking forward to seeing how the School develops and to my involvement in that as a close friend and ally”.

There is still a lot of work to do to establish the School’s reputation beyond the UK, but with the help of our Advisory Board we are confi dent that we will achieve our goal: to be recognised as an internationally leading university in the fi elds of business and economics.

Leah Graham is Senior Development & Alumni Relations Offi cer. She can be emailed at l.c.graham@lboro.ac.uk

the fi rst meeting of the strategic advisory board for the then newly formed school of business and economics took place in april 2011. the members present included alumni of the school, friends of the university and representatives of the university’s closest partners.

ian r stoppsChairman,Raytheon UK andThe McLean Partnership

stuart chapmanManaging Partner,DFJ Esprit

chris dayGeneral Manager, London and Head of Leveraged Finance, Commerzbank

manny fontenla-novoaDirector, Iberostar & Springboard

Jan gowerVice President of Civil Government,IBM UK

richard hillDirector of International Learning and Business Development,Rolls Royce plc

paul holohanChief Executive,Richmond Capital Partners Limited

emma howardFormer Global Head of People, BDO

alan hughesMember of Loughborough University Council

nigel KirklandGlobal IT Director, Page Group

stuart millerCo-Founder & Chief Executive Offi cer,ByBox

Jim murphynon-Executive Director, Simons Group LtdLay Member of Loughborough University Council

nick pagePartner,PricewaterhouseCoopers LLP, UK

mark sismey-durrantBanker

david sparkesChief Executive,Amateur Swimming Association

professor angus Laing Dean of the School

dr Keith pond Associate Dean (Teaching)

stewart robinsonAssociate Dean (Research)

professor Jim sakerAssociate Dean (Enterprise)

dr cheryl J. traversSenior Lecturer in Organisational Behaviour and Human Resource Management

Leah grahamSenior Development & Alumni Relations Offi cer

08

news

sab members

research centres update

09

news

Loughborough university schooL of business and economics

centre for post-crisis finance

centre for gLobaL sourcing and services

centre for professionaL WorK and society

headed up by professor alistair milne, the centre for post-crisis finance’s research revolves around four principal research themes: (1) the use of information technology to promote prudential safety, cost effi ciency and greater competition in fi nancial services; (2) the allocation of fi nance to productive and very long-term investment; (3) the modelling and analysis of macroeconomic (monetary and fi nancial) stability; and (4) the economic and business impact of fi nancial regulation following the global crisis.

Much of the Centre’s recent work has been on the information technology theme. In January the Alfred P. Sloan Foundation of new York awarded Professor Milne a research grant of $104,000 to investigate the application of a new global standard – the global legal entity identifi er system, or GLEIS – from measuring and monitoring counterparty risk to aiding the recovery and resolution of distressed fi nancial fi rms. This work will be carried out together with Kern Alexander of the University of Zurich Law School.

Professor Milne has written a paper on the lessons of the barcode for fi nancial services and is currently writing a new report for the SWIFT Research Institute, together with independent consultant Malcolm Chisholm, on the potential benefi ts of greater “common fi nancial language” for fi nancial services. He will be presenting some of this work at the 2013 SIBOS conference in Dubai in September.

The Centre is engaged in collaboration with the Department of Physics at Loughborough University on the use of tools and techniques from the physical sciences for modelling of fi nancial stability. They have been given a small seed corn award of £5,000 by the Bank of England to develop some initial work on the macroeconomic impact of fi nancing constraints.

You may contact Professor Milne by emailing a.k.l.milne@lboro.ac.uk

Led by director ilan oshri and deputy director ian herbert, the centre for global sourcing and services has been extremely active in the last year. Listed below are some of its activities:

events and Conferences

■ 7th Global Sourcing workshop, 11th-15th March 2013 on Offshoring, Outsourcing and Shared Service Capabilities and Strategies

■ 13th CIMA-Loughborough SSC Forum, 20th February 2013 on Integrated Support Functions

■ CIMA, Loughborough and SLASSCOM Event, 18th January 2013 on Intellectual Capital: Optimising Performance in SSCs

■ CIMA Expert Roundtable, 15th January 2013 on ‘Building Tomorrow’s Talent’, an Asia Perspective on SSCs.

■ 12th CIMA-Loughborough SSC Forum, 25th October 2012 on Marketing, Branding and Talent Management

■ 11th CIMA-Loughborough SSC Forum – Loughborough University, 17th October 2012, on Marketing, Branding and Best Practice

The next UK SSC Forum is planned for 16th May with a focus on the transformation of the fi nance function through new business models from an international perspective.

For details on this forum and future events, email Kathleen McLoughlin, SSC Project Coordinator: ssc-research-team@lboro.ac.uk

For further information on the project visit: http://www.shared-services-research.com/

projects

■ With UKTI on the competitiveness of the UK in the area of information technology and business process outsourcing

research Grants

■ Ian Herbert, Andrew Rothwell and Will Seal, £4,000: Development of Offshore SSCs

You may contact Professor Oshri by emailing i.oshri@lboro.ac.uk

the centre for professional Work and society (cpWs) has undergone a shift since the last issue of Inspire, including a new director – professor christine coupland – and a name change (from centre for professional Work and careers).

The Centre recently hosted a British Academy of Management ‘Identity’ Special Interest Group one-day seminar entitled “Discourse at work”.

The seminar was attended by approximately 20 business and management academics from across the UK and Europe, and featured research on cell-phone use as work, identity performances in meetings, repudiations of sexual harassment and how silences feature in the academic labour process. The speakers included Gillian Symon, School of Management, Royal Holloway, University of London; Dalvir Samra-Fredericks, nottingham Business School, nottingham Trent University; Penny Dick, Management School, University of Sheffi eld; Sandra Corlett, newcastle Business School, northumbria University; and Peter McInnes, University of Strathclyde.

Research Centre Director Christine Coupland said, “The presentations and discussions were lively and centred on how we study, explore, examine and understand professional identities through discourse analytic methodologies. In keeping with a current academic interest in identities, the papers refl ected contemporary ideas on how they are made sensible to us and those around us, and how they are drawn on to explain and/or impact upon our working lives.”

The Centre will be organising three events every year, with the most recent event having taken place early May: a one-day seminar entitled “Professionals under pressure in the changing public sector”.

You may contact Professor Coupland by emailing c.coupland@lboro.ac.uk

10

Emma Bagley

Julie Holland

Amanda Berry

e ntrepreneurial behaviour is a key competency required by a growing number of graduate employers.

A major part of the Centre’s work is to encourage all students to develop enterprising and innovative skills through formal modules and extracurricular activity. In a few cases, students show true entrepreneurial behaviour by running or aspiring to set up their own businesses. These students are supported on campus by a range of formal and informal services offered by the Centre.

At a curriculum level, the Glendonbrook Centre for Enterprise Education provides formal modules in enterprise and innovation management, entrepreneurship and small business planning for undergraduate and postgraduate taught students. A number of student entrepreneurs use this opportunity to work on their own ideas and refi ne their business plans. Indeed, the popularity of these modules is growing as more and more students look at increasing their employability skills when they leave university.

Support for undergraduate and postgraduate students is also provided through stand-alone specialist enterprise workshops and courses. As well as using its own staff to deliver these sessions, the Centre regularly draws upon its close links with the Careers and Employability Centre, the Pilkington library and its extensive network of business experts.

We also provide enterprise education (including innovation management) for staff within the University, helping them to manage new ideas and projects more effectively.

A recent addition to our activities is the delivery of enterprise outreach sessions in secondary schools, thereby promoting the University’s enterprise education agenda to prospective students.

enterprise in the curriculumOur graduates are going to be the business leaders of the future, and equipping them with the skills they need to be effective employees is vital to their success. We know they’re good, employers know they’re good; many specifi cally target Loughborough because of the quality of our graduates. Our job is to instil the confi dence in them to go for the top jobs and fulfi l their potential.

Employers want their recruits to be enterprising whatever role they are going to perform – whether they are going into marketing roles where creativity is a natural state of mind, or whether they are going into banking and fi nance where attention to detail is vital (but a wider skill set, including competencies, such as problem solving, will be a huge asset).

The placement year is a valuable part of all the business degree programmes here at Loughborough. Our students are great ambassadors for their School when they are out on placement, and the Skills for Study, Placement and Employment module aims to get them ready to apply for their placement year early in order to have the best choice of all the opportunities available to them.

11 Loughborough university schooL of business and economics

by Julie Holland

in october 2011, Loughborough university set up the glendonbrook centre for enterprise education. housed in the school, the centre’s remit is to ensure that undergraduate and postgraduate students not only acquire academic know how, but also develop enterprising and innovative skills with which to put their knowledge and expertise to good use.

We concentrate on training students in the skills employers want, but we cater for students with ambitions in many directions, including self- employment, and hopefully encourage them to fulfi l their aspirations in whatever fi eld they wish to pursue.

Throughout this module, enterprise and employability overlap. Every topic throughout the fi rst term in the Skills for Study part of the course is delivered with the real business world context in mind. In the Skills for Placement and Employment part of the course we look at all aspects of the recruitment process, from preparing a CV to honing communication and presentation skills, and all this is achieved through entertaining and interactive tutorials. Small team exercises help students to develop vital skills while having fun and learning in a safe environment. There are plenty of opportunities for students to present in front of a group and explore their own strengths and weaknesses through coursework and refl ective exercises.

the challenge in delivering a module of this nature is to make it:

a) fun and engaging – the students have to enjoy it or they won’t want to participate fully.

b) Credible – the students have to trust that those delivering it have the knowledge and experience to guide them. They need to know that the information is current and up to date, and as well as our own experience from working in industry and in business spin-outs we draw on the expertise of the Careers and Employability Centre to deliver parts of the module. In addition, we have guest speakers from a variety of industry sectors to reinforce the messages that we are delivering.

c) Assessable – the students would consider it ‘optional’ if there was no assessment. We know they need it, but often they don’t realise how important it is to their development until much later. So they have to be encouraged to attend, and unfortunately the only way to guarantee

participation is to include assessment throughout. Individual coursework is designed to help develop students’ own self-awareness to help them with future interviews, and group coursework helps with all the communication and negotiation skills that employers look for.

Knowledge of the contemporary business environment is vital for 21st century business graduates. We introduce the importance of knowing what’s going on in the outside world to our fi rst year undergraduates in Week One of teaching, before they get sucked into the ‘Lufbra’ bubble. We do news quizzes and have employers visiting to run commercial awareness sessions to encourage students to open their eyes and read the newspapers instead of just their Facebook page.

The module is becoming a real selling point for students who are considering which university to apply to. More and more parents attending open days are asking what we are doing for the students in terms of ‘making them employable’. And as well as the compulsory placement year, the fact that our students get so much development and support in order to make the most of the opportunities available to them is an attractive bonus and is being actively used as part of our recruitment of new students.

The module is constantly under development; we move with the times, we take student feedback into account and we are constantly updating it based on input from employers to keep it fresh and relevant so that our graduates are equipped with the skills they need to have successful enterprising careers.

business pLanning for neW venturesAn evening lecture might not sound very appealing to most students or lecturers, but the room was crammed full of fi nalists for the start of our module Business Planning for new Ventures. There was a real buzz of anticipation with students keen to tell us all about their business ideas, some fi ctitious, some real.

Whether students want to become self-employed or work for someone else, learning about the principles of business planning is an essential skill needed in the workplace. We start off the module thinking about problems: the problems people have and how a new business can solve that problem.

After a minimal amount of formal teaching, students are left to their own devices. At this point you would think that we wouldn’t see them again until they come to hand in their work and pitch the plan. not so. Scheduled tutorials go out of the window as enthusiasm and obsessive behaviour takes hold. It never fails to amaze us how much effort students put into this module. Over the years we have seen some amazing plans and presentations, some of which have become real businesses. A former student told us that although the module was only worth 10 credits, talking about it in an interview got him his graduate job. Making students enterprising really does make them more employable; we have the proof!

For a small number of students this is the start of their lives as an entrepreneur. One student went on to start a company called Plan My Gap Year. He may have done it anyway, but we like to think that we may have helped him develop his entrepreneurial skills in some way.

Business planning for Small Ventures is hard work but great fun. Students get a chance to bring their academic knowledge to a practical project. Is it a step too far to consider a course where we get them to not only plan their new business but run it as well?

12

by Ilan Oshri

Whether students Want to become seLf-empLoyed or WorK for someone

eLse, Learning about the principLes of business pLanning is an essentiaL sKiLL

needed in the WorKpLace.

enterprise in our schooLsIn response to political and educational directives to enhance business awareness and enterprising skills, there has been a signifi cant growth in enterprise education provision in primary and secondary schools. Enterprise education in schools tends to focus on general competencies and soft skills relating to employability and responsible citizenship. In some schools enterprise education is offered only to less able and challenging pupils, while more able pupils are steered away from this important learning experience.

At Loughborough University, we place strong emphasis on enterprise education and preparing innovative graduates for the workforce. In April, the Glendonbrook Centre for Enterprise Education recruited Emma Bagley (pictured on p10) who will work with schools in an outreach capacity, focusing on enterprise education for able students who have the potential to go on to higher education.

In addition to helping schools develop effective enterprise education, Emma will give pupils an insight into how enterprise education is embedded into University programmes, ensuring that our undergraduates not only acquire academic knowledge, but also develop enterprise skills with which to put their knowledge and expertise to good use.

how the Loughborough mba is adding value to academic research

In today’s academic environment, research and teaching alone do not suffi ce. Enterprise is an important part of the University’s strategy. In this article we take a look at how students on our MBA programmes are adding value to the commercialisation of academic research.

The commercialisation of academic research is not an easy process. Failure to get your research fi ndings through the innovation process is often not down to a lack of business acumen, but about trying to juggle the pressures of doing a day job with an unfamiliar commercial role. At Loughborough, our research can often have industrial application, and with enterprise now recognised as an important part of an academic’s job, any help with the commercialisation process is welcome. Our Enterprise Team can provide assistance but so can our students, especially those studying for an MBA in the School of Business and Economics.

The Loughborough MBA has unique access to a hi-tech algorithm, a business assessment tool developed in the United States by north Carolina State University. The tool has been used by many well-known companies and organisations, including nASA and British Petroleum, to evaluate the commercial potential of a new technology. The algorithm is central to our MBA Managing Innovation module, and students use it to produce a business plan for a new product idea or service. Basically, students act as business consultants for inventors.

This year, one student group will be working with an academic research group from our Chemistry department to evaluate a new technology for commercial use. There are benefi ts on both sides with the students getting a vital real-life experience in innovation management, while the academic researchers get a thorough commercial assessment of their invention and essential content for a business plan.

So if you are an academic or outside organisation with a new product or service idea, and you haven’t got the resources or expertise to assess its commercial potential, give us a call. Maybe our MBA students can help you navigate through the choppy waters of the innovation process.

Julie Holland is Director of the Glendonbrook Centre for Enterprise Education. She can be emailed at j.holland@lboro.ac.uk

13 Loughborough university schooL of business and economics

at Loughborough university, We pLace strong emphasis on enterprise education and preparing innovative graduates for the WorKforce.

invent select implement

…NEW MBA Microsite Now Live!…www.lboro.ac.uk/mba…

14

the topsy-turvy WorLd of footbaLL finance By Dr Adrian Gourlay

a s the English football season comes to the end, the national media focus is on the record 20th league title secured

by Manchester United and the retirement of Sir Alex Ferguson, the uncertain fi nancial future for those unfortunate clubs relegated to the Championship and, of course, the joy for Cardiff City and Hull City getting promoted to the ‘promised land’ of the Premier League.

In contrast, on any given weekend about 20 per cent of attendance at football matches in England is at ‘non-league’ grounds, a fi nancial world away from the £3 billion television rights deal recently negotiated by the Premier League, with clubs that can only dream of playing at the Santiago Bernabéu Stadium or signing the likes of Ronaldo or Messi.

english football has a distinctive league organisation: the football pyramid. the pyramid consists of interconnected national and regional leagues with promotion and relegation enabling the smallest of clubs to realise top-fl ight premier League football.

but how do clubs and their supporters in the lower tiers of the english pyramid behave to success and failure? does club survival matter, and what is the best way to secure their future? Loughborough university’s dr adrian gourlay shares insights from his research.

15 Loughborough university schooL of business and economics

non-league football in England refers to national and regional leagues below the Football League. That is, any league below the Second Division. Today, there are more than 50 leagues defi ned as non-league by the Football Association (FA), representing nearly 500 clubs. A major change to the football pyramid came in 1987 when automatic promotion and relegation of one club between the Football League and the Football Conference, the top league in non-league football, was introduced, subject to the club meeting stadium facility and fi nancial standards. This change lead to an infl ux of new fi nance into non-league and raised the expectations and ambitions of fans and supporters of non-league sides.

The benefi ts of non-league football for professional leagues and society are immense: non-league clubs and their supporters typically engage more with their local communities and carry with them the history of the area they represent and the concomitant allegiances of their local community. They also provide a relatively cheap introduction to watching football for young people and are a ‘training ground’ for future coaches of professional teams. One example of a manager who initially started his career in non-league football is the current boss of Sunderland, Martin O’neil, who managed Grantham Town and Shepshed in the 1980s.

non-league football provides economic features that distinguish it from the professional leagues: attendance is typically indicative of demand for the sporting contest (rather than a measure of stadium capacity) and is a better indicator of a club’s fi nancial well-being. Ancillary income is typically a smaller proportion of total income, and budgets for non-league clubs tend to be ‘hard’ rather than ‘soft’. Equity withdrawal by a ‘sugar daddy’ is often not replaced, leading to dramatic declines in a club’s league status that threaten their fi nancial survival.

Using annual data for 12 leagues below the Football League from 1992 to 2011, my research fi nds that attendance and revenue is more sensitive to macroeconomic factors, league position, recent form and the price and quality of substitutes compared to professional league clubs. In contrast to studies of professional leagues, uncertainty of outcome is found to have a signifi cant impact on attendance: the higher the level of match-day uncertainty the higher level of attendance. These characteristics make the fi nancial status of non-league clubs more volatile and uncertain compared to their professional counterparts. non-league clubs Fisher Athletic and newcastle Blue Star both disappeared in 2009, being unable to meet their fi nancial obligations.

Given the sport-specifi c and external benefi ts of non-league football, what can be done to secure its future? One route is regulation in order to improve fi nancial responsibility, for example in the form of the Financial Reporting Initiative. Since 2009 the Football Conference (comprising the Blue Square Premier, north and South) has demanded clubs to submit quarterly fi nancial reports, and failure to do so can lead to penalties (fi nes and points deduction) in an attempt to nurture fi nancial stability. Unlike the proposals by UEFA to introduce ‘Financial Fair Play’ for entry into the Champions League, the objective of the Financial Reporting Initiative is to improve transparency, rather than limiting the ability of smaller teams to use outside resources to compete with the dominance of established clubs.

A complement to regulation is to change ownership and governance structures. An example of an alternative model is a supporters’ trust which gives club control to the major constituencies it serves: the fans and local community. Advocates of supporters’ trusts argue that fi nancial stability is improved because of oversight by fans and supporters. Importantly, a trust ensures that the club cannot be sold without the agreement of fans.

Currently, there are 110 trusts that hold equity within their clubs in the UK. One example of an alternative model of club ownership is FC United of Manchester, founded in 2005. FC United is owned by its supporters, with each member being able to vote on how the club can be run,

for example: voting on board members, shirt design and even the annual price of season tickets! Membership is obtained by paying an annual fee and in return a member is entitled to a single vote at meetings. The ownership model that FC United have adopted is one of an Industrial and Provident Society (IPS). Unlike a limited company, an IPS has share capital: in the case of the FC United not-for-profi t model, the share acts as a ‘membership ticket’. Since 2005 FC United has been promoted three times up the pyramid and are now members of the northern Premier League, just three promotions away from gaining League Two status. Other examples of trusts include Chester FC, Cambridge City FC and Wrexham FC.

Will these alternative models of ownership secure a future for non-league football? They are likely to be attractive to fans whose clubs have been poorly managed, subject to damaging equity withdrawals by ‘sugar daddies’ or have suffered from ‘irrational exuberance’ from owners who have attempted signifi cant league improvement through irresponsible business models. However, fans and supporters of organisations also want to be part of a successful club. Will membership fees and voluntary contributions provide suffi cient fi nance to enable clubs to reach their ambitions?

Economic theory indicates that a professional club in England is characterised by the objective of maximising wins, soft budget constraints, with a large proportion of total income spent on player salaries. This approach may come into confl ict with the wider objectives of trusts. Consequently, the evolution of the league system in England will provide a fascinating natural experiment and test of alternative ownership and governance structures.

Dr Adrian Gourlay is a Lecturer in Economics and Deputy Director of Learning & Teaching. Adrian’s research expertise is in the area of empirical industrial organisation, with particular reference to football, banking and quasi-markets, and he can be emailed at a.r.gourlay@lboro.ac.uk

16

T H E F R A G I L I T Y O F E U R O P E A n B A n K I n G

across europe, the banking sector faces formidable challenges. some banks are signifi cantly under-capitalised and many remain vulnerable to the possibility of further shocks. it is my belief that european banking is more fragile and vulnerable than it appears, and that the true position is being concealed by a combination of european central banking (ecb) intervention, an under-estimation of risks associated with the weak economy, inadequate provisioning against under-performing loans and a manipulation of risk weights implied to bank assets.

By David T Llewellyn

17 Loughborough university schooL of business and economics

T H E F R A G I L I T Y O F E U R O P E A n B A n K I n G

i n the words of David Lascelles (author of the CSFI’s 2012 annual survey of banking conditions “Banking Banana

Skins”): “…concern about the outlook for banks has never been greater… concern this year is at the highest point in the 13 years we have been compiling it” (Financial World, February, 2012).

To properly analyse the situation, it is integral to understand that European banking is inextricably linked to four key crises: sovereign debt, the weak state of the European economy, fundamental fault lines in the Euro project and, of course, the banking crisis.

When the ECB intervened on a massive scale it was to introduce its long-term refi nancing operation (LTRO). To be sure, the intervention

has eased banks’ immediate funding pressure, has removed the immediate need for substantial asset sales, has bought time for banks to adjust and for countries to adopt structural reforms, and has allowed banks to meet margin calls on derivatives trading if, and when, required to do so.

All this represents a new business model not only for banks (relying on the central bank for medium-term funding rather than the inter-bank market) but also for the ECB. In effect, the ECB has taken over bank fi nancing from the inter-bank market (not the traditional role of a central bank). However, the net effect is that signifi cant parts of the European banking system have become overly dependent on the ECB. Whilst substantial ECB intervention through the LTRO programme has certainly alleviated

funding problems and bought valuable time, the key question is whether the time bought will be enough to strengthen bank balance sheets and business models.

It is my opinion that this new role is an unsustainable business model – both for the ECB and banks making use of the LTRO facility – illustrated in fact by banks having diffi culty raising new equity and facing funding and re-fi nancing constraints, in addition to a substantial rise in bank balances held at the ECB and other central banks (a refl ection of uncertainty about the credit standing of potential counterpart banks).

The role of regulation also needs to be considered in this complex mosaic. Regulators across the world, not just Europe, are embarking on one of the largest-ever reforms of the regulatory regime, and there is a danger that the implementation of more intensive regulation, however desirable in the long run, might impede economic recovery in the short run.

What does this mean for the UK? Alongside European banks, British banks have also substantially lowered the loan-deposit ratio (from 138 per cent in 2008 to around 105 per cent in 2012), refl ecting both asset disposals and a rise in retail deposits. However, in many cases capital (equity) ratios are still too low. Firstly, many banks are underestimating and under-provisioning credit risk. Partly because of low interest rates, and also in order not to impair measured capital positions, banks have increased forbearance in the current weak state of the economy compared with past downturns. Although more companies have been making a loss during the recent recession than in the early 1990s, the number of insolvencies is sharply lower. Secondly, the Bank of England has indicated that equity is currently overstated by between £20 to £50 billion (a signifi cant margin by any means).

The crisis will no doubt prove to be transformational across the globe in several dimensions: (1) the size of the banking industry and the structure of the fi nancial system and fi nancial intermediation, (2) bank business models, (3) the cost of bank services, and (4) the regulatory regime. In the decade running up to the crisis, banks around the world expanded at too fast a rate, as refl ected in sharp rises in the ratio of bank assets to GDP . In the process, bank leverage (and in many cases, customer leverage) rose substantially. Although many of the trends that supported this growth were unsustainable in the long run, their removal is likely to have the reverse impact towards a more sustainable system and set of business models.

Simply said: as a result of the crisis, banks are likely to become more risk averse and less profi table. The requirement to operate with signifi cantly higher capital ratios and lower gearing will also limit the role of banks compared with the years prior to the crisis, reinforced by banks facing a higher cost of capital and higher regulatory costs. Internal reward and bonus structures will change to remove the bias towards excess risk-taking – indeed, there has already been some movement in this direction with caps imposed by the EU this April (to take effect in January 2014).

And when banks fail – and they will – they may be closed before they become insolvent, and penalties (including tax) could be imposed on banks with access to safety nets. The latter could take the form of what amounts to ex ante insurance premia to be paid by banks to pay for rescues that might be needed in the future and in order to minimise the potential burden on the taxpayer.

In the long run, it is likely that (particularly large) fi rms will make greater use of the capital market as a funding source and become less dependent on banks, which may mean that Europe will move closer to the American structure of fi nancing as between banks and the capital markets.

18

there is a danger that the impLementation of more intensive reguLation, hoWever desirabLe in the Long run, might impede economic recovery in the short run.

W A l K i n G o n T H I n I C E

THE CASE STUDY OF CYPRUSWhen a bank fails, someone (often the taxpayer) has to pay the cost. It is a cardinal principle inthe EU that bank deposits up to €100K are always to be protected (or £85K in the UK). When the banking crisis emerged in Cyprus it was absurd that the fi rst idea was that such deposits would not be protected. The almost unique case of Cyprus, however, is that virtually all the banks’ liabilities (around 90 per cent) are in the form of deposits, as Cypriot banks have virtually no clearly defi ned subordinated debt to take the hit. In which case, there was no realistic alternative to making large depositors (many of whom were Russian) absorb the blow, with the prospect of +100K deposits being reduced by as much as 40 per cent. The importance of this case is that, although unique in many ways, it introduces the principle that, under some circumstances, large depositors may be required to have their deposits marked down in the event of bank failures. The key issue is whether this approach will be followed by other countries.

Watch the video online

Bringing the various strands of the argument together, and in the context of the various pressures on the European banking sector, three particular concerns emerge: 1) the European banking sector is fragile and vulnerable to potential shocks; 2) the new regulatory regime has the potential to create serious negative feedback loops; and 3) many banks are dependent on ECB support which cannot be sustained indefi nitely.

The Euro and sovereign debt crisis acts as a Sword of Damocles over the markets and the European economy. A new dimension is now suggested focussed specifi cally on the banking sector. There will undoubtedly be some sovereign debt defaults or restructuring that will weaken the balance sheet position of banks to an extent that further injections of equity capital will be needed.

In some cases it would be unrealistic to assume that the private markets and existing private shareholders will supply the amount of capital needed. This in turn means that, if a defl ationary de-leveraging of banks is to be avoided, in some cases the State may need to intervene as before. The difference this time, however, is that the debt position of many European countries is worse than in the earlier period, and there is some doubt about whether nationally fi nanced government capital injections can be made because they would take government debt-GDP ratios to yet further unsustainably high levels. This could prove to be the most diffi cult conundrum of all.

19 Loughborough university schooL of business and economics Loughborough university schooL of business and economics

simpLy said: as a resuLt of the crisis, banKs are LiKeLy to become more risK averse and Less profitabLe.

David T Llewellyn is Professor of Money and Banking at Loughborough University and the Vienna University of Economics & Business, and Chair of the Board of the Banking Stakeholder Group at the European Banking Authority. He can be contacted on d.t.llewellyn@lboro.ac.uk

BRITAIn’S SOVEREIGn DEBT RATInG DOWnGRADEThe UK has recently lost its coveted Triple A rating on government (sovereign) bonds. In principle, ratings made by rating agencies such as Standard & Poors and Moodys refl ect a judgment about the ability of the government to service and repay its debt on time. The question is whether this really matters. The short answer is “not very much” and the downgrade is more symbolic than immediately economic. Clearly, it is a disappointment to the government that has placed great store on its Triple A status. The potential real cost is that government bond yields (and hence the cost of government borrowing) will rise as has been the case in countries such as Greece, Spain and Portugal. The problem is that a vicious circle can emerge: a rating downgrade raises the cost of government borrowing which in turn makes it more diffi cult to service its debt. This has not happened in the case of the UK (or the US which was downgraded earlier) as the markets judge that the government’s ability to service its debt has not deteriorated. UK bond yields remain at historic low levels. In truth the recent downgrade was more a refl ection of the weak economy than any real concern about the government’s ability to service its debt. nevertheless, it may be a warning sign.

20

student profile Ekaterina Chertkovskaya, Research Student

21 Loughborough university schooL of business and economics

e katerina, known as Katya, is in her fi nal year of the School’s doctoral programme. Originally focussing on

student transitions to work, her research has changed course a few times before settling on the very topical subject of consumption of work and employability, with a recent article calling for a debate about employability being published in The Guardian (“Employability: Is it time we get critical?” 12 February 2013).

Co-supervised by Dr Scott Taylor and Dr Marek Korczynski (both formerly at Loughborough), Katya is writing her thesis on the rhetoric on work and employability on a university campus:

“Using a theoretical framework drawn from Antonio Gramsci and Mikhail Bakhtin,” says Katya, “I am analysing the following issues: how the ‘common sense’ about work and employability are constructed on campus, and how students engage with such ‘common sense’ during their job search.

“These issues are explored through an analysis of data gathered during 14 months of fi eldwork, including longitudinal interviews with students, participant observation of careers fairs, documents, interviews with careers advisors and non-participant observation of career consultations.”

In her dissertation, Katya argues that there was a strongly normative image of work constructed around an orientation she terms ‘consumption of work’. This image was closely associated with consumption opportunities, marketed to students through corporate presence on campus.

“Consumption of work was central to shaping students’ work orientations,” she claims, “and only few of them resisted the ‘common sense’ argument. Those who made alternative choices articulated doubt about these. Employability was presented to students as a lifelong project of the self, where constant enhancement and selling skills were necessary to maintain a position in the labour market. Many students embraced the rhetoric of ‘skill possession’, but noted that they were ‘playing the game’ when ‘demonstrating’ skills. Learning that it was demonstrating what the employers were willing them to show became the primary condition for achieving employability.”

Katya plans to submit later this year and would like to stay in academia to carry on doing research and teaching. She is considering the possibility of staying in the area, given the friends she’s made in Leicester where she lives, and on campus, and the opportunities she sees here for her work to be put to use.

Ekaterina Chertkovskaya is a PhD student and can be reached on e.chertkovskaya@lboro.ac.uk

eKaterina chertKovsKaya, a current doctoraL student at the schooL of business and economics and originaLLy from moscoW, is recharging herseLf With yoga cLasses on campus after some strenuous data interpretation. she certainLy LooKs reLaXed and heaLthy When We meet With her today, aLbeit underWheLmed by the year’s spring Weather.

Watch the video onlineWatchWatch thetheWatch the

22

By Dr Samir Dani

FEEDING THE

WORLD

setting the agenda for research into food suppLy chains

By Dr Samir Dani

23 Loughborough university schooL of business and economics

the recent horsemeat contamination scandal in europe has sparked off a wide debate with regard to the food we eat. this case brought forth two important challenges of the food industry: the complexity of their supply chain and the issues with labelling.

o ur busy lifestyles have created an ever-increasing demand for processed ready-to-eat food

products. As global supply chains strive to deliver these products to the supermarket shelves, organisations start losing control over them.

This is not the fi rst big case that has occurred within the last few years. The milk contamination scandal in China (2008) and the peanut butter-salmonella cover-up in the USA (2009) depicted not only the speed at which the contamination spread globally, but also the responsibility and accountability for limiting the contamination. Unsafe food can lead to fatality, as seen in both these cases.

As food companies scramble for space and volumes in supermarket chains, availability of raw material for food manufacturing gets even more complex with the world facing increasingly uncertain weather conditions, which have an effect on agriculture production. Ironically, as food companies are increasing the production of processed food, a large part of the world is facing challenges in food security. Increasing population, uncertain weather conditions, food losses (both post-harvest and fi nal consumption) are some of the factors that are challenging the advances in agriculture production and food processing. Availability of suffi cient food, water and energy are important issues to consider for the future of mankind.

The School of Business and Economics has on-going research projects in the area of supply chains, with primarily a focus on the food sector. The projects deal with a number of topics that are important for the food industry.

food security and food sustainabiLityThere is no doubt that two of the biggest challenges facing the world today are food security and food sustainability. According to the Un Population Division, the world population is estimated to reach 9 billion by 2050, which will require a 70 per cent increase in food production to meet global needs.

According to the United nations’ Food and Agriculture Organization, the pace of population growth, climate change, income distribution imbalances and change of consumption patterns are moving faster than technological advancements. The FAO states that preserving the inputs in the food supply chain, i.e., raw materials and using them as effi ciently as possible, can increase food security for now and for the future. Yet the Government Offi ce for Science (UK) estimates that 25 to 50 per cent of food is wasted along the supply chain and does not reach consumers.

Food losses and waste in developing low-income countries are related to the upstream supply chain – farm to processor – whereas the losses in the affl uent world are related to the downstream supply chain – retailer to fi nal consumer (Parfi tt, J., Bartherl, M. & Macnaughton, S. (2010). Interventions to reduce post-harvest food losses are seen as essential by organisations such as the World Bank, to minimise food insecurity and for the agriculture sector to meet global food demands.

Project 1suppLy chain coLLaboration to reduce post-harvest food LossesThis project studies different forms of supply chain collaboration and investigates the suitability of collaboration techniques to reduce post-harvest food losses.

To get involved:S.Despoudi@lboro.ac.uk

Project 2moving up the vaLue chainThis project looks at business models and innovation within the agriculture supply chain to reduce post-harvest food losses. The project considers processing models for farmers to move up their food processing value chain.

To get involved:S.Dani@lboro.ac.uk

Loughborough university schooL of business and economics

24

risKs in the food suppLy chainThe food supply chain has been increasingly in the spotlight for safety scares, recalls and disruptions. Food supply chains of today are particularly fragile due to the geographic, economic and regulatory spread of participating entities and the manifestation of risk as it fl ows very quickly across international boundaries. The impact of risk materialisation can be catastrophic both to the customer as well as the organisation.

Risks in the food supply chain are not only due to food contamination and recall, but also can often involve disruption due to natural hazards, terrorism, protests, political upheavals and labour issues. In recent years, fl oods, pandemics, extreme weather patterns and recession have all strongly affected food supply chains – perhaps most notably affected have been the world’s wheat supplies.

Risk management takes two forms: proactive and reactive. Proactive risk management needs planning and foresight. Whereas reactive risk management needs speed of response. In cases of food contamination, speed of response is required to work with the chain and the Food Standards Agency to limit the contamination. However, this is not always possible, and only some organisations have processes set up to deal with this rapidly.

In 2005, Walmart reacted to the disruption caused by Hurricane Katrina effectively and rapidly in comparison to any other organisation – even to the US Government. Tesco and other major food retailers in the UK immeadiately recalled the contaminated food items in the wake of the recent horsemeat scandal, rapidly implemented DnA testing of their meat products and, more interestingly, pledged to source locally for their meat products.

The UK imports a large percentage of its food requirement from global sources, and hence, the UK food supply chain is exposed to natural hazards around the globe. It is therefore very important for food companies to be able to source their produce from suppliers that are resilient to these catastrophes.

Project 3:risK management in food suppLy chainsThis project investigates the various risks affecting food supply chains. It considers systems thinking and scenario planning to bring together operational teams to manage risks both proactively and reactively.

To get involved: S.Dani@lboro.ac.uk

Project 4:catastrophe modeLLing and food suppLy chainsThis project aims to scope the integration of catastrophe modelling and supply chain resilience from a multidisciplinary domain. The project will also aim to develop a networked cohort of researchers capable of addressing critical issues in catastrophe modelling and food sustainability.

To get involved: S.Dani@lboro.ac.uk

Watch the video online

25 Loughborough university schooL of business and economics Loughborough university schooL of business and economics

sustainabLe suppLy chainsSustainability challenges within the food supply chain are governed by the ‘triple bottom line effect’ as coined by John Elkington, which considers not just a fi nancial profi t-and-loss account of the company, but also the ‘people’ account (socially responsible) and the ‘planet’ account (environmentally responsible).

The pursuit of sustainable goals is largely governed through the fulfi lment of legislative requirements. Some of the benefi ts of being sustainable are now being recognised by companies, and the motivation to follow sustainable policies is now based on clear economic and social benefi ts that are accrued by companies. Hence, the steps taken by Tesco, for example, to have energy-effi cient buildings, reduce energy in its operations and support sustainable fi shing; by Walmart to reduce packaging; or by Coca Cola to conserve water – all have clear economic and social benefi ts with wide-ranging environmental benefi ts.

As environmental, ethical and safety legislations get tougher across international boundaries, confi guring supply chains in compliance with these standards will be essential. Most standards follow a compliance route to look after the interests of living beings (consumers, workers and the community) and the environment (waste minimisation, pollution, effl uent treatment, etc.).

One of the key challenges within the food supply chain is to reduce energy consumption and greenhouse gas emissions. The production, manufacturing and distribution of food require energy in various forms, and as the volume of food processing increases (both with regards to market demand and food security), the energy requirement increases.

Work has been undertaken in improving processes, reducing energy consumption within physical infrastructure (e.g., energy-effi cient buildings) and the energy effi ciency of transportation. This has been a very important development and has led to local optimisation and effi cient use of energy. However, if the target is to reduce energy consumption across the supply chain, then local optimisation has to spread across the entire supply chain.

Energy effi ciency has a direct infl uence on costs and can have an economic rationale across the chain; however, meeting carbon emission targets will be more about meeting legislative requirements. The challenges increase when we consider UK food supply chains and the international entities that form the primary chain. If the target is to reduce the carbon footprint or the energy consumption, how will these requirements transcend international boundaries?

Even within national chains, the requirement for the supplier or distributor to adhere to the energy targets as set by the local company in the food and drink supply chain will depend upon power in the relationship, the position in the chain and the ease of innovation and support within the relationship. It is thus necessary to study supply chain relationship challenges to implement energy and carbon effi ciency across the food and drink supply chain.

Project 5:improving energy efficiency across the food suppLy chainThis project utilises a multi-disciplinary approach to investigate energy consumption across food supply chains. Using relationship models and innovation the project aims to provide tools for improving energy effi ciency in the food supply chain.

To get involved: S.Dani@lboro.ac.uk

Project 6:suppLier dependenceand sustainabiLityThis project investigates the infl uence of supplier dependence and buyer-supplier power on the implementation of sustainable practices across the supply chain.

To get involved: R.Buck@lboro.ac.uk

the motivation to foLLoW sustainabLe poLicies is noW based on cLear economic and sociaL benefits that are accrued by companies.

26

As much as the food sector is influenced by profits, it is also one of the biggest employers in various countries. Hence, it is even more important to keep this industry sustainable. As food supply chains criss-cross the globe to bring food to our plates, it is essential to monitor them. This is not always an easy task, as different countries have different food safety standards and laws. The UK, although being one of the leading countries to implement food safety standards, has had its share of contamination challenges. Risks in the supply chain put further pressure on the chain to fulfil customer demands. Focussing too much on the financial bottom-line leads to corners being cut, with the possibility, indeed likelihood, of further fatalities.

Our research into food supply chains in India also brought forth the role of the government in creating appropriate mechanisms and policies for food safety, sustainability, logistics infrastructure and skills. These are challenging times for the food sector, and there is a lot of potential for research into the various aspects, as discussed in this article.

Dr Samir Dani is Senior Lecturer in Operations Management. For further information on these projects and to get involved in future research, contact Samir at S.Dani@lboro.ac.uk

as food suppLy chains criss-cross the gLobe to bring food to our pLates, it is essentiaL to monitor them.

27 Loughborough university schooL of business and economics

Z oe’s primary research interests are in the areas of performance and process

improvement and service management in public sector organisations, with a special focus on ‘Lean’, which Zoe describes as:

“The development of good practice of process/operations improvement that allows a reduction of waste, improvement of fl ow and better concept of customer and process view through a culture of continuous improvement involving everyone.”

The reason why ‘Lean thinking’ has become a recent prominent and popular approach to public service reform, is that in the current era of constrained and reduced public spending it has promised to maintain service productivity, improve resource utilisation and maintain service quality.

Zoe has recently been an Advanced Institute of Management (AIM) Management Practice Fellow considering sustainability of Lean in public services. She has led research projects for the Scottish Executive, HM Revenue and Customs, HM Court Services, healthcare, local government and higher education organisations,

which have evaluated how Lean techniques are and could be used in the public sector.

She has developed a ‘House of Lean’ for the UK public services and has published more than 80 articles, book chapters and reports, as well as presented widely on the topic to both academic and practitioner audiences. Zoe also advises and sits on a number of boards and committees for organisations such as the Welsh Assembly Government, national Audit Offi ce and Cabinet Offi ce. In the near future, Zoe is planning on launching a new research centre at the School in Service Management, so watch this space.

And yet, despite the rather impressive list of Zoe’s academic and professional milestones, she emphatically describes her children as being the single most important achievement in her life, hands down.

Zoe Radnor is Professor of Service Operations Management. She can be contacted at z.j.radnor@lboro.ac.uk

stAff profileProfessor Zoe Radnor

Determining ‘value’ and ‘waste’ from a customer’s point of view;

Creating value either by reducing waste and thus the cost of a product or service, or by increasing the value- adding activities without increasing the cost of the service or product;

Appreciating that there is a defi ned and measurable benefi t to the organisation in reducing non-value-adding activities - in the private sector this has been seen as a reduction in cost, or an increase in competiveness against the peers;

Freeing up resources through the above processes to help a business; and

Understanding that at the heart of Lean is the concept of ‘customer value’.

What Lean is and the assumptions it hoLds(as defi ned by Zoe):

a self-professed feminist, Zoe radnor is a highly motivated, charismatic academic with an impressive professional background and research agenda. Joining the school of business and economics in 2012 from cardiff business school, she holds a chair of service operations management at the school.

What Lean is and the assumptions

Watch the video online

m y research set out to investigate whether an international experience for students can develop

some of the most commonly understood and accepted attributes of entrepreneurs, and whether the experience actually aids students in thinking about and later starting up their own business.

The concept of international education is not new – scholars have been travelling around Europe in search of new ideas, new contacts and to spread knowledge for hundreds of years – but in more recent years, schemes such as Erasmus, and a realisation on the part of universities worldwide of the relevance of international education in today’s global economy, have led to a marked increase in the number of students who spend part, or all, of their degree programmes in a foreign country.

Of course, international education is not just about student mobility; it can take many

forms, including joint curriculum development, research partnerships and Internationalisation at Home, but it is student mobility that forms the basis of this research.

According to empirical evidence, the outcomes of student mobility range from personal development and intercultural competence through to more tangible outcomes, such as a greater propensity to live and build a career abroad, to work for international companies and network building. There is also increased recognition on the part of employers that an international experience adds value to the workforce. However, many of these outcomes are diffi cult to quantify and are often very personal in nature.

Over the past 18 months, I have used a mixture of both qualitative and quantitative research methods to track students before and after a period abroad (either study or work placement), to look at how they have changed

because of the experience and to investigate how students feel that their attitude towards starting their own business has changed as a result of their international sojourn. In addition, I looked at how this change might have affected the career choices of graduates in terms of entrepreneurial behaviour and their willingness to start their own business. As control groups, I have also tracked a number of students undertaking a placement in the UK and students who are following three-year degrees and therefore don’t do a placement or go abroad.

The quantitative research involved an online survey, using both established entrepreneurial tendency tests and more focussed criteria, against which any changes in certain attitudes could be measured. These included attitudes towards risk-taking propensity, tolerance of ambiguity, creativity, determination, locus of control and achievement motivation.

28

YOUR PASSPORT TO

BUSINESSdoes going abroad help students

become entrepreneurial?

Recent years have seen an increase in the relevance of entrepreneurship and entrepreneurship education. Although there is still much debate as to what makes an entrepreneur

and what triggers entrepreneurial behaviour, many of the skills and attitudes that are attributed to entrepreneurs

(adaptability, innovative thinking, perseverance and good communication, to name a few) are skills that could be

developed by an international experience.

P A S S P O R T

By Maxine Clarke

Over 450 students from around the UK responded to the initial survey in September 2011; the vast majority of these were about to spend the next academic year abroad, the rest fell into the control groups categories. In September 2012, the same survey was re-sent to the same students, with 200 responses being received. The ‘before’ and ‘after’ surveys were analysed to check for positive (or negative) developments in the attitudes, and demographic data (such as family background, degree discipline and experience of entrepreneurship) were compared.

The qualitative method involved interviewing two sets of people: students who had just returned from their year abroad, and graduates who had undertaken study/work abroad as part of their degree some years ago and who were now established in their careers. Both groups could refl ect on the role that their experience had played on their career choices, their personal development and their willingness to engage in entrepreneurial behaviour.

The purpose of these in-depth interviews was to put ‘meat on the bones’ of the quantitative

results, to try to discover the ‘whys’ and ‘hows’ of any changes caused by the experience, and, of course, to see if any of the graduates had actually started up their own business (and, if so, whether they felt any of this entrepreneurial behaviour was attributable in part to their mobility).

I am nearing the end of my research and am starting the process of writing up my PhD. The results of the quantitative data indicate that changes do take place in some of the attitudes as a result of the experience abroad. In particular towards risk-taking propensity, tolerance of ambiguity and determination to achieve certain goals, and that these changes are not as evident (or are non-existent) in the control groups.

Of the interviewees, over 2/3rds have either already set up their own business or are seriously considering doing so at some point in the future, and most of them were unequivocal in highlighting how they felt the mobility experience had contributed to their personal development and to their (potential future) entrepreneurial behaviour.

There are still many questions to be asked and answered as to the impact of a mobility experience on a person’s career choices and the extent to which they will act entrepreneurially in the future, but this research has at least started to ask and answer some of those questions. The purpose of this research is to gain more insight into the benefi ts of an international experience in terms of providing more graduates who can contribute to the economy through entrepreneurial behaviour matched with an international perspective.

Maxine Clarke is Programme Director of the BSc Business Studies programme (Singapore) and a current PhD student. She can be emailed at m.l.clarke@lboro.ac.uk

29

about erasmus Erasmus is the European Union’s fl agship educational exchange programme for higher education students, teachers and institutions. Erasmus forms part of the EU Lifelong Learning Programme (2007-2013), encouraging student and staff mobility for work and study, and promoting transnational co-operation projects among universities across Europe.

The scheme currently involves nine out of every ten European higher education establishments and supports co-operation between the universities of 33 countries. More than two and a half million students have benefi ted from Erasmus since its introduction in 1987.

For information on ‘Erasmus For All’, which will replace the Lifelong Learning Programme in 2014, please visit the LLP website:

www.lifelonglearningprogramme.org.uk/erasmus-for-all

Loughborough university schooL of business and economics

OUR ERASMUS PARTNERS

Austria: University of Graz

Belgium:University of Antwerp

france:Catholic University of Lille

ESC Toulouse

ESSCA, Angers

Euromed Management, Marseilles

Grenoble Ecole de Management

University of Limoges

Germany:University of Cologne

Greece: Athens University of Economics

and Business

netherlands: VU University of Amsterdam

portugal: Universidade Catolica Portuguesa, Lisbon

spain:Universidad Carlos III de Madrid

University of Valencia

30

IT’S ALL In THE ATTITUDE

By Angelika Zimmermann

vicious and virtuous circles in offshoring relationships

offshoring may be one of the most controversial topics of our time. in scholarly circles as well as the popular

press, there are heated debates on the socio-economic consequences that offshoring bears for home countries.

31 Loughborough university schooL of business and economics

W e have heard a lot about cost saving through lower wages, effi ciency gains and price reductions, as well arguments around hidden coordination costs, risks of intellectual property theft and job losses onshore. When it

comes to employees, however, we know very little about the attitudes that those working in offshoring arrangements on a day-to-day basis hold towards the transfer of tasks to offshore destinations.

An intensive research case study that I led in the high-tech IT industry demonstrates that offshoring attitudes can vary a great deal, even within the same company. The research shows that some onshore employees regard offshoring as an opportunity for intercultural learning and for new, challenging tasks. They also feel that the required amount of coordination across countries is acceptable.

Others, however, complain about delays of delivery deadlines due to repeated intercultural misunderstanding, about the danger of losing interesting tasks – or even one’s job – to offshore colleagues, and about an unbearable workload that is created when offshore colleagues have to be trained and their deliveries have to be reworked.

There are several driving forces that determine such contrasting offshoring attitudes. People’s interest and skill in communicating with people from other countries depend a lot on their personality, age and former intercultural exposure. The danger of losing interesting tasks, or one’s job, is smaller if there are abundant opportunities for new and challenging tasks onshore, and if onshore employees can identify with these novel tasks. For example, some engineers in this research were not happy about converting into mere coordinators of an offshore task force and giving up their exciting high-tech engineering work. Moreover, excessive demands of support and rework are often the result of high turnover levels amongst offshore colleagues, which make it hard to build strong offshore expertise.

So why do offshoring attitudes matter? The study results suggest that offshoring attitudes are closely tied to the success of offshoring collaborations. Those employees who experienced their offshoring arrangement as rewarding were also the ones who put most effort into making it work. This led to better results, which in turn reinforced the positive attitudes. A virtuous circle was thus created.

On the other end of the spectrum, scepticism and negative attitudes towards the collaboration lead some onshore employees to spend only minimum effort in transferring required knowledge and improving the intercultural communication. This often led to poor performance by offshore colleagues, which confi rmed onshore employees’ negative attitudes, thus creating a vicious circle.

In some cases, frustrated onshore colleagues even boycotted the collaboration actively, by withholding necessary explanations:

“Maybe you have noticed that he [the offshore colleague] hasn’t really understood, but you do not tell him. Then he will take forever. You get no output, and in the end you do it yourself. That’s the solution: ‘I’ll just do it myself, even if I work overtime.’ Then you will be able to say afterwards: ‘This doesn’t work, does it.’”

In more technical terms, such activities can be explained by two fundamental motivational drivers of human behaviour: ‘outcome expectations’ and ‘self-effi cacy’. Outcome expectations refers to the expected consequences of one’s behaviour. If these outcomes are regarded as attractive, they motivate behaviour that is believed to lead to these outcomes. Hence, employees who believe that offshoring threatens their own tasks and jobs or creates extra work are less likely to support it proactively.

Self-effi cacy, in turn, is the belief in one’s capabilities to organise and execute courses of actions required to manage forthcoming situations. This belief infl uences people’s effort and persistence with behaviour, and fi nally their mastery of the behaviour, which reinforces people’s self-effi cacy beliefs. In the case of offshoring, people who think they are capable

of communicating and working effectively with offshore counterparts are more likely to contribute effort to the collaboration. They learn better to transfer knowledge, solve problems and work as a team with their offshore colleagues, and for these reasons are more likely to succeed.

There is a lot that managers can do to stimulate the virtuous circles and inhibit the vicious circle created by offshoring attitudes. Above all, a clear and explicit strategy for the distribution of tasks between onshore and offshore colleagues is necessary to address onshore colleagues’ career ambitions and security needs.

This strategy has to be a balancing act, though. In order to steer against turnover of highly qualifi ed employees at the offshore destination, managers must not reserve innovative, challenging tasks exclusively to onshore employees. They instead should transfer attractive tasks to offshore colleagues to open up career prospects and encourage offshore talent to stay with the fi rm for longer. Only then will it be possible to achieve the required offshore expertise, satisfactory performance and more positive offshoring attitudes on the part of onshore employees.

These factors, in turn, underpin the likelihood of success and failure in offshoring relationships. As Winston Churchill said: “Attitude is a little thing that makes a big difference”.

Dr Angelika Zimmermann is Senior Lecturer in International Business and Strategy. She can be emailed at a.zimmermann@lboro.ac.uk

of communicating and working effectively with offshore counterparts are more likely to

Loughborough university schooL of business and economics

in the case of offshoring, peopLe Who thinK they are capabLe of communicating and WorKing effectiveLy With offshore counterparts are more LiKeLy tocontribute effort to the coLLaboration.

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