Loughborough university schooL of business and economics bi-annuaL magaZine

/ issue 5 / spring 2013

tHe enterprise issue dream Big, Build Bigger

entrepreneurs in residence p4 enterprise at WorK p10 david LLeWeLLyn on the state of europe’s banKs p16 does traveL instiL entrepreneuriaL sKiLLs? p28

www.lboro.ac.uk/sbe

Editor: Ondine Barry Designer: Ian Jepson Photographer: Phil Wilson Loughborough university School of Business and Economics 03

Welcome

I am pleased to welcome you to the fifth issue of as exemplars of the way in which research underpins Inspire, the bi-annual magazine of the School of the School’s capacity to act as an anchor institution Business and Economics at Loughborough University. on the national stage. The Centre for Post-crisis This edition of Inspire has been informally dubbed Finance’s research on the provision of finance for the ‘The Enterprise Issue’ by the team because of the real economy and the Centre for Global Sourcing and unplanned focus on enterprise: ‘unplanned’ because Services’ research on innovation in organisational an inordinate number of articles and reports forms are perfect examples. submitted to the Spring 2013 edition happened to be The breadth and relevance of the School’s research Dean Angus Laing about enterprise. But not accidental at all if you look closely at what we as a School are all about… in general is evident throughout this edition of Inspire: sustainable supply chain management through to Looking further afield, at the UK’s economy and employee attitudes in off-shored operations, the indeed the global economy, enterprise and innovation research reported addresses issues that not only are are key touch points for economic recovery and immediately relevant to practice, but that add to and growth. In an earlier issue of Inspire, I welcomed the enhance the management and economics canon. fact that the Department for Business, Innovation and Skills was exploring a number of initiatives The significance of the School’s research is evident around the ways in which business schools could from the standing enjoyed by many of the School’s contribute to the economic recovery. And I believe that academics, among them David Llewellyn, Zoe Radnor Loughborough, with its strong connections with the and Samir Dani, whose work is featured in this edition. business community, has the potential to contribute to To me, what is special about Loughborough is the that elusive recovery through both its programmes and real integration of such research into our teaching, research activity. an integration that is central to the excellent student experience provided by the School. I am consequently delighted that Lord Young of Graffham, in his report on small firms released in I hope this edition of Inspire provides further insight April, identifies a central role for business schools in into our work and encourages you to get involved in supporting sustainable business growth. The proposed our activities. “Supporting Small Business Charter” offers real opportunities and funding for the School to play a role as a regional, and indeed national, “economic Sincerely Yours, 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. Angus Laing Critically, the report recognises that the capacity of Dean, School of Business and Economics business schools to act as such economic anchor Loughborough University 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

D eveloping Winners | Achieving Excellence | Delivering Value 04 news

top eu post for manchester united school professor a great day out Jim Saker (Associate Dean, Enterprise) visited david t Llewellyn, professor of money and banking at the school, Manchester United Football Club as a guest of has been appointed chair of the european banking authority’s Manchester Business School and Saudi Telecom (eba) infl uential banking stakeholder group (bsg), having Company, looking at ways in which the School previously been the group’s vice-chair. can develop a relationship with MBS for various B2B activities.

“These are challenging times for bank regulators around the world,” said After meeting with Sir Alex Ferguson (below) David, “as responses are needed following one of the most serious banking and world-renowned players Rio Ferdinand and crises ever. The central task is to not only construct regulation to lower the Ryan Giggs, Jim commented: “It is interesting to 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 note the power of the Manchester United brand tax-payers”. in the Middle East and Far East as well – one for aspiring brand managers to continue to try The EBA is the European Union agency responsible for the regulation to emulate!” 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 Jim Saker with a representative from Saudi Telecom and their implementation and the guidelines and recommendations made Company, Dennis Law and Sir Alex Ferguson 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 entrepreneurs alleged breaches or non-application of European Union law. in residence David T Llewellyn, Chair of the Banking Stakeholder Group 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 Loughborough university schooL of business and economics 05

news new student venture ibidem 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. Soeren Winkelmann Explains Soeren: “ibidem sports works with sports bodies, federations, properties, their sponsors and fans to unlock sustainable value in sponsor-organisation-fan relationships. We For more information go to work on a ‘business to people’ philosophy. Putting people and www.ibidemsports.com 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”. Soeren Winkelmann can be reached on “The main aim of ibidem sports is to increase value in sponsorship [email protected] associations,” adds Peter. “It does not matter which side of the sponsor-property partnership our clients come from: we offer a Peter Dickenson can be reached on number of educational workshops, sponsorship consultancy and [email protected] measurement analyses to support both sport organisations’ and sponsors’ strategies.”

laura unsworth lends support to local sports day Laura 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 founded by three Loughborough students, two of whom are studying economics at the school, toms fudge began as an extracurricular money-making out, Lord sugar! venture in 2011 and has gone to be quite a successful small business in Loughborough. earlier this spring, enactus Loughborough hosted its Tom Mundy, owner of TOMS Fudge, had this to say about second apprentice challenge with two teams of four students Team TOMS Fudge: “They worked amazingly. They kept competing to become the Loughborough apprentice. each us on our toes, and we are so impressed with their sales team represented chocolate alchemy or toms fudge, two ability. We hope they go far in the fi nals”. local businesses, in advertising and selling their products in the university. See TOMS Fudge’s profi le on the University’s Inspiring Enterprising Graduates webpage: Setting up ‘shop’ in the foyer of the School, the two teams (including SBE students Jasmine Malik and Martin Morgan) were given the www.lboro.ac.uk/enterprise/inspiring/tomsfudge 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”.

Winter 2012 graduation celebration The 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 Loughborough university schooL of business and economics 07

news

‘true trAilBlAZers’ visit to china Vicki Unwin, Business Development Manager, and on campus Jim Saker, Associate Dean (Enterprise), were invited to visit the Guangdong nuclear Power Holding Company Ltd. the Loughborough graduate Women’s group was on campus recently (Daya Bay plant) in China this March to present the as a guest of the glendonbrook centre for enterprise education. the School’s executive education programmes portfolio to its group were given a tour some of the university’s newer facilities such as senior management team. the sports technology institute and the design school, and had lunch in the university council chambers with members of the school and Meeting with Chen Tai (Executive Deputy Director), Vicki and the centre. Jim were given a tour of the company – a huge development on Daya Bay in mainland China, an hour from Shenzhen – Julie Holland, Glendonbrook Centre Director, who spoke to the Group before presenting to 35 senior managers. 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 “The company has an ambitious international development made it all possible for the rest of us!” plan, and we were delighted to be able to show the breadth and depth of our executive education programmes,” said The Graduate Women’s Group is coming to end as an entity, but the Vicki, “as well as to give a fl avour for what it’s like studying, signifi cance of its role as a true trailblazer for female students lives on. living and working in the UK.”

simuL8: mixing practice with theory antuela 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. Jim Saker, Vicki Unwin and Chen Tai at the Guangdong Nuclear Power Company Holding Co Ltd. 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. dean opens conference 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 on innovation and growth simulation and general client projects.

“Simulation is one of the topics taught in the module Applications of dean angus Laing will open the “innovation and growth: Management Science,” explained Antuela. “Since I started teaching the unleashing potential” abs conference, taking place 21st module, I was interested to give students the practical side of simulation may in London. this conference will look at the role business alongside the theory. I believe that guest lectures from industry are essential schools can play following the heseltine report, and what as they provide our students an excellent opportunity to relate to the topics they are doing to support business locally, regionally, being taught, but also to gain a better perspective of employability.” nationally and internationally.

Angela Renshaw, an undergraduate student on the module said, “The lecture Professor Laing said: “The theme of this conference, gave me a practical insight into how simulation can be used to help solve innovation and growth, has never been more important, with business schools such as ours in the unique position to be able real-world business issues. The key thing I will take away from the lecture was to infl uence the current skill gaps in business management and the tip given that when it comes to simulating: ‘Keep it simple!’” to set positive strategy to benefi t our economy”. 08 news

strategic support sab members the fi rst meeting of the strategic advisory board for the then newly ian r stopps stuart miller formed school of business and economics took place in april 2011. Chairman, Co-Founder & the members present included alumni of the school, friends of the Raytheon UK and Chief Executive Offi cer, university and representatives of the university’s closest partners. The McLean Partnership ByBox stuart chapman Jim murphy Lead by Chairman Ian Stopps CBE, ■ They support the School with Managing Partner, non-Executive Director, the Board members had a common corporate and alumni fundraising DFJ Esprit Simons Group Ltd motivation – they all wanted to opportunities, providing guidance, Lay Member of help the School be the best that helping to create the right it could be. “I enjoyed studying at connections and supporting chris day Loughborough Loughborough and have no doubt events; General Manager, University Council that the skills I learnt as a student London and Head of ■ They support the teaching helped me to develop a successful Leveraged Finance, nick page programme by providing an career in business. I wanted to support Commerzbank Partner, employer perspective on graduate the development of future business PricewaterhouseCoopers skills, supporting work-based leaders and I think this is what the manny fontenla-novoa learning opportunities and directly LLP, UK Board ultimately do – by advising inputting into programmes. Director, Iberostar & and contributing to the running of Springboard mark sismey-durrant the School.” Board member Paul Holohan is an Banker MBA graduate who now runs his own Jan gower Since their fi rst meeting in 2011, mergers and acquisitions company: Vice President of Civil david sparkes the Board has made a signifi cant “Being a member of the Advisory Government, Chief Executive, contribution to the development of Board means that I get an opportunity the School. Their external perspective IBM UK Amateur Swimming to give something back to the has helped to guide the Dean and his Association institution that enabled me to make a Senior Management Team to establish richard hill success of my business. I am looking new MBA programmes, develop our Director of International professor angus Laing forward to seeing how the School student offer, further integrate our Learning and Business Dean of the School develops and to my involvement in business and economics teaching Development, that as a close friend and ally”. and develop our internationalisation Rolls Royce plc dr Keith pond strategy. There is still a lot of work to do to Associate Dean (Teaching) establish the School’s reputation paul holohan So what does this group of very senior beyond the UK, but with the help of Chief Executive, stewart robinson business fi gures do? our Advisory Board we are confi dent Richmond Capital Associate Dean that we will achieve our goal: to be Partners Limited (Research) ■ They act as a critical friend – recognised as an internationally reviewing the School’s strategy leading university in the fi elds of emma howard professor Jim saker and fi nances; business and economics. Former Global Head of Associate Dean ■ They provide an external People, BDO (Enterprise) perspective on issues confronting the School and assist in the alan hughes dr cheryl J. travers creation of strategies to tackle Member of Loughborough Senior Lecturer those issues; University Council in Organisational ■ They support research activities, Leah Graham is Senior Development Behaviour and Human identifying potential issues of & Alumni Relations Offi cer. She can be nigel Kirkland Resource Management concern, facilitating engagement emailed at [email protected] Global IT Director, with and disseminating research Page Group Leah graham results to communities of Senior Development & practice; Alumni Relations Offi cer ■ They act as advocates for the School within business and policy communities as well as their own professional networks; Loughborough university schooL of business and economics 09

news research centres update centre for centre for gLobaL centre for professionaL post-crisis finance sourcing and services WorK and society headed up by professor alistair milne, the Led by director ilan oshri and deputy the centre for professional Work and society centre for post-crisis finance’s research director ian herbert, the centre for global (cpWs) has undergone a shift since the last revolves around four principal research sourcing and services has been extremely issue of Inspire, including a new director – themes: (1) the use of information technology active in the last year. Listed below are some professor christine coupland – and a name to promote prudential safety, cost effi ciency of its activities: change (from centre for professional Work and greater competition in fi nancial services; and careers). events and Conferences (2) the allocation of fi nance to productive The Centre recently hosted a British Academy ■ 7th Global Sourcing workshop, 11th-15th and very long-term investment; (3) the of Management ‘Identity’ Special Interest Group March 2013 on Offshoring, Outsourcing and modelling and analysis of macroeconomic one-day seminar entitled “Discourse at work”. Shared Service Capabilities and Strategies (monetary and fi nancial) stability; and (4) the The seminar was attended by approximately 20 ■ 13th CIMA-Loughborough SSC Forum, economic and business impact of fi nancial business and management academics from 20th February 2013 on Integrated Support regulation following the global crisis. across the UK and Europe, and featured research Functions on cell-phone use as work, identity performances Much of the Centre’s recent work has been on ■ in meetings, repudiations of sexual harassment the information technology theme. In January CIMA, Loughborough and SLASSCOM Event, and how silences feature in the academic the Alfred P. Sloan Foundation of new York 18th January 2013 on Intellectual Capital: labour process. The speakers included Gillian awarded Professor Milne a research grant of Optimising Performance in SSCs Symon, School of Management, Royal Holloway, $104,000 to investigate the application of a ■ CIMA Expert Roundtable, 15th January University of London; Dalvir Samra-Fredericks, new global standard – the global legal entity 2013 on ‘Building Tomorrow’s Talent’, an Asia nottingham Business School, nottingham Trent identifi er system, or GLEIS – from measuring Perspective on SSCs. University; Penny Dick, Management School, and monitoring counterparty risk to aiding the University of Sheffi eld; Sandra Corlett, newcastle recovery and resolution of distressed fi nancial ■ 12th CIMA-Loughborough SSC Forum, 25th Business School, northumbria University; and fi rms. This work will be carried out together with October 2012 on Marketing, Branding and Peter McInnes, University of Strathclyde. Kern Alexander of the University of Zurich Talent Management Law School. ■ 11th CIMA-Loughborough SSC Forum – Research Centre Director Christine Coupland said, “The presentations and discussions were Professor Milne has written a paper on the Loughborough University, 17th October 2012, lively and centred on how we study, explore, lessons of the barcode for fi nancial services and on Marketing, Branding and Best Practice examine and understand professional identities is currently writing a new report for the SWIFT through discourse analytic methodologies. In Research Institute, together with independent The next UK SSC Forum is planned for 16th May keeping with a current academic interest in consultant Malcolm Chisholm, on the potential with a focus on the transformation of the fi nance identities, the papers refl ected contemporary benefi ts of greater “common fi nancial language” function through new business models from an ideas on how they are made sensible to us and for fi nancial services. He will be presenting some international perspective. those around us, and how they are drawn on to of this work at the 2013 SIBOS conference in For details on this forum and future events, email explain and/or impact upon our working lives.” Dubai in September. Kathleen McLoughlin, SSC Project Coordinator: The Centre will be organising three events every The Centre is engaged in collaboration with [email protected] year, with the most recent event having taken the Department of Physics at Loughborough For further information on the project visit: place early May: a one-day seminar entitled University on the use of tools and techniques http://www.shared-services-research.com/ “Professionals under pressure in the changing from the physical sciences for modelling of public sector”. fi nancial stability. They have been given a small projects seed corn award of £5,000 by the Bank of ■ With UKTI on the competitiveness of the UK in England to develop some initial work on the You may contact Professor Coupland by emailing the area of information technology and macroeconomic impact of fi nancing constraints. [email protected] business process outsourcing

You may contact Professor Milne by emailing research Grants [email protected] ■ Ian Herbert, Andrew Rothwell and Will Seal, £4,000: Development of Offshore SSCs

You may contact Professor Oshri by emailing [email protected] 10

Amanda Berry

Emma Bagley

Julie Holland Loughborough university schooL of business and economics 11

by Julie Holland

in october 2011, Loughborough university set up the glendonbrook centre for enterprise in the curriculum enterprise education. housed in the school, the centre’s remit is to ensure that Our graduates are going to be the business undergraduate and postgraduate students not only acquire academic know leaders of the future, and equipping them with how, but also develop enterprising and innovative skills with which to put their the skills they need to be effective employees knowledge and expertise to good use. is vital to their success. We know they’re good, employers know they’re good; many specifi cally ntrepreneurial behaviour is a Support for undergraduate and postgraduate target Loughborough because of the quality key competency required by a growing students is also provided through stand-alone of our graduates. Our job is to instil the e number of graduate employers. specialist enterprise workshops and courses. confi dence in them to go for the top jobs and A major part of the Centre’s work is to As well as using its own staff to deliver these fulfi l their potential. encourage all students to develop enterprising sessions, the Centre regularly draws upon its and innovative skills through formal modules close links with the Careers and Employability Employers want their recruits to be enterprising and extracurricular activity. In a few cases, Centre, the Pilkington library and its extensive whatever role they are going to perform – students show true entrepreneurial behaviour network of business experts. whether they are going into marketing roles by running or aspiring to set up their own where creativity is a natural state of mind, businesses. These students are supported on We also provide enterprise education or whether they are going into banking and campus by a range of formal and informal (including innovation management) for staff fi nance where attention to detail is vital (but a services offered by the Centre. within the University, helping them to manage wider skill set, including competencies, such as new ideas and projects more effectively. problem solving, will be a huge asset). At a curriculum level, the Glendonbrook Centre for Enterprise Education provides A recent addition to our activities is the The placement year is a valuable part of formal modules in enterprise and innovation delivery of enterprise outreach sessions in all the business degree programmes here management, entrepreneurship and small secondary schools, thereby promoting the at Loughborough. Our students are great business planning for undergraduate and University’s enterprise education agenda to ambassadors for their School when they are postgraduate taught students. A number of prospective students. out on placement, and the Skills for Study, student entrepreneurs use this opportunity Placement and Employment module aims to to work on their own ideas and refi ne their get them ready to apply for their placement business plans. Indeed, the popularity of year early in order to have the best choice of these modules is growing as more and more all the opportunities available to them. students look at increasing their employability skills when they leave university. 12

Whether students Want to become seLf-empLoyed or WorK for someone eLse, Learning about the principLes of by Ilan Oshri business pLanning is an essentiaL sKiLL needed in the WorKpLace.

We concentrate on training students in the skills participation is to include assessment business pLanning employers want, but we cater for students with throughout. Individual coursework for neW ventures ambitions in many directions, including self- is designed to help develop students’ employment, and hopefully encourage them to own self-awareness to help them with An evening lecture might not sound very fulfi l their aspirations in whatever fi eld they wish future interviews, and group coursework appealing to most students or lecturers, but to pursue. helps with all the communication and the room was crammed full of fi nalists for the negotiation skills that employers look for. start of our module Business Planning for new Throughout this module, enterprise and Ventures. There was a real buzz of anticipation employability overlap. Every topic throughout Knowledge of the contemporary business with students keen to tell us all about their the fi rst term in the Skills for Study part of the environment is vital for 21st century business business ideas, some fi ctitious, some real. course is delivered with the real business world graduates. We introduce the importance of context in mind. In the Skills for Placement knowing what’s going on in the outside world Whether students want to become self- and Employment part of the course we look to our fi rst year undergraduates in Week One employed or work for someone else, learning at all aspects of the recruitment process, from of teaching, before they get sucked into the about the principles of business planning is an preparing a CV to honing communication and ‘Lufbra’ bubble. We do news quizzes and have essential skill needed in the workplace. We start presentation skills, and all this is achieved employers visiting to run commercial awareness off the module thinking about problems: the through entertaining and interactive tutorials. sessions to encourage students to open their problems people have and how a new business Small team exercises help students to develop eyes and read the newspapers instead of just can solve that problem. vital skills while having fun and learning their Facebook page. in a safe environment. There are plenty of After a minimal amount of formal teaching, opportunities for students to present in front The module is becoming a real selling point for students are left to their own devices. At this of a group and explore their own strengths students who are considering which university point you would think that we wouldn’t see them and weaknesses through coursework and to apply to. More and more parents attending again until they come to hand in their work and refl ective exercises. open days are asking what we are doing for the pitch the plan. not so. Scheduled tutorials go students in terms of ‘making them employable’. out of the window as enthusiasm and obsessive the challenge in delivering a module of this And as well as the compulsory placement behaviour takes hold. It never fails to amaze us nature is to make it: year, the fact that our students get so much how much effort students put into this module. development and support in order to make the Over the years we have seen some amazing a) fun and engaging – the students have most of the opportunities available to them is plans and presentations, some of which have to enjoy it or they won’t want to an attractive bonus and is being actively used become real businesses. A former student told participate fully. as part of our recruitment of new students. us that although the module was only worth 10 credits, talking about it in an interview got him b) Credible – the students have to trust The module is constantly under development; his graduate job. Making students enterprising that those delivering it have the knowledge we move with the times, we take student really does make them more employable; we and experience to guide them. They need feedback into account and we are constantly have the proof! to know that the information is current updating it based on input from employers to and up to date, and as well as our own keep it fresh and relevant so that our graduates For a small number of students this is the start experience from working in industry and are equipped with the skills they need to have of their lives as an entrepreneur. One student in business spin-outs we draw on successful enterprising careers. went on to start a company called Plan My Gap the expertise of the Careers and Year. He may have done it anyway, but we like to Employability Centre to deliver parts of think that we may have helped him develop his the module. In addition, we have guest entrepreneurial skills in some way. speakers from a variety of industry sectors to reinforce the messages that we Business planning for Small Ventures is hard are delivering. work but great fun. Students get a chance to bring their academic knowledge to a practical c) Assessable – the students would consider project. Is it a step too far to consider a course it ‘optional’ if there was no assessment. We where we get them to not only plan their new know they need it, but often they don’t business but run it as well? 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 Loughborough university schooL of business and economics 13

enterprise in our schooLs In 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 how the employability and responsible citizenship. In Loughborough mba some schools enterprise education is offered only to less able and challenging pupils, while is adding value to more able pupils are steered away from this academic research important learning experience. In today’s academic environment, research At Loughborough University, we place strong and teaching alone do not suffi ce. Enterprise emphasis on enterprise education and is an important part of the University’s preparing innovative graduates for the workforce. strategy. In this article we take a look at In April, the Glendonbrook Centre for Enterprise how students on our MBA programmes are Education recruited Emma Bagley (pictured on adding value to the commercialisation of p10) who will work with schools in an outreach academic research. capacity, focusing on enterprise education for So if you are an academic or outside able students who have the potential to go on The commercialisation of academic research is organisation with a new product or service idea, to higher education. not an easy process. Failure to get your research and you haven’t got the resources or expertise fi ndings through the innovation process is to assess its commercial potential, give us a In addition to helping schools develop effective often not down to a lack of business acumen, call. Maybe our MBA students can help you enterprise education, Emma will give pupils but about trying to juggle the pressures of navigate through the choppy waters of the an insight into how enterprise education doing a day job with an unfamiliar commercial innovation process. is embedded into University programmes, role. At Loughborough, our research can ensuring that our undergraduates not only often have industrial application, and with acquire academic knowledge, but also enterprise now recognised as an important develop enterprise skills with which to put their part of an academic’s job, any help with the knowledge and expertise to good use. commercialisation process is welcome. Our invent select implement Enterprise Team can provide assistance but so can our students, especially those studying for an MBA in the School of Business and Economics. at Loughborough The Loughborough MBA has unique access Julie Holland is Director of the Glendonbrook Centre for Enterprise Education. university, We pLace to a hi-tech algorithm, a business assessment She can be emailed at tool developed in the United States by north [email protected] strong emphasis on Carolina State University. The tool has been enterprise education used by many well-known companies and organisations, including nASA and British and preparing innovative Petroleum, to evaluate the commercial potential graduates for the of a new technology. The algorithm is central to our MBA Managing Innovation module, and WorKforce. 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 NEW Chemistry department to evaluate a new MBA Microsite technology for commercial use. There are Now Live! benefi ts on both sides with the students … getting a vital real-life experience in innovation www.lboro.ac.uk/mba management, while the academic researchers … get a thorough commercial assessment of their invention and essential content for a business plan. 14 the topsy- turvy WorLd of footbaLL finance By Dr Adrian Gourlay

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.

s the English football season comes to the end, the national media focus is a 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. Loughborough university schooL of business and economics 15

non-league football in England refers to Using annual data for 12 leagues below for example: voting on board members, national and regional leagues below the the Football League from 1992 to 2011, shirt design and even the annual price of Football League. That is, any league below my research fi nds that attendance season tickets! Membership is obtained the Second Division. Today, there are more and revenue is more sensitive to by paying an annual fee and in return than 50 leagues defi ned as non-league by macroeconomic factors, league position, a member is entitled to a single vote at the Football Association (FA), representing recent form and the price and quality meetings. The ownership model that FC nearly 500 clubs. A major change to the of substitutes compared to professional United have adopted is one of an Industrial football pyramid came in 1987 when league clubs. In contrast to studies of and Provident Society (IPS). Unlike a automatic promotion and relegation of one professional leagues, uncertainty of limited company, an IPS has share capital: club between the Football League and the outcome is found to have a signifi cant in the case of the FC United not-for-profi t Football Conference, the top league in non- impact on attendance: the higher the level model, the share acts as a ‘membership league football, was introduced, subject of match-day uncertainty the higher level ticket’. Since 2005 FC United has been to the club meeting stadium facility and of attendance. These characteristics make promoted three times up the pyramid and fi nancial standards. This change lead to an the fi nancial status of non-league clubs are now members of the northern Premier infl ux of new fi nance into non-league and more volatile and uncertain compared to League, just three promotions away from raised the expectations and ambitions of their professional counterparts. non-league gaining League Two status. Other examples fans and supporters of non-league sides. clubs Fisher Athletic and newcastle Blue of trusts include Chester FC, Cambridge Star both disappeared in 2009, being City FC and Wrexham FC. The benefi ts of non-league football for unable to meet their fi nancial obligations. professional leagues and society are Will these alternative models of ownership immense: non-league clubs and their Given the sport-specifi c and external secure a future for non-league football? supporters typically engage more with their benefi ts of non-league football, what can They are likely to be attractive to fans local communities and carry with them be done to secure its future? One route whose clubs have been poorly managed, the history of the area they represent and is regulation in order to improve fi nancial subject to damaging equity withdrawals the concomitant allegiances of their local responsibility, for example in the form of by ‘sugar daddies’ or have suffered from community. They also provide a relatively the Financial Reporting Initiative. Since ‘irrational exuberance’ from owners cheap introduction to watching football for 2009 the Football Conference (comprising who have attempted signifi cant league young people and are a ‘training ground’ the Blue Square Premier, north and improvement through irresponsible for future coaches of professional teams. South) has demanded clubs to submit business models. However, fans and One example of a manager who initially quarterly fi nancial reports, and failure to supporters of organisations also want to be started his career in non-league football do so can lead to penalties (fi nes and part of a successful club. Will membership is the current boss of Sunderland, Martin points deduction) in an attempt to nurture fees and voluntary contributions provide O’neil, who managed Grantham Town and fi nancial stability. Unlike the proposals suffi cient fi nance to enable clubs to reach Shepshed in the 1980s. by UEFA to introduce ‘Financial Fair Play’ their ambitions? for entry into the Champions League, non-league football provides economic the objective of the Financial Reporting Economic theory indicates that features that distinguish it from the Initiative is to improve transparency, rather a professional club in England is professional leagues: attendance is than limiting the ability of smaller teams to characterised by the objective of typically indicative of demand for the use outside resources to compete with the maximising wins, soft budget constraints, sporting contest (rather than a measure of dominance of established clubs. with a large proportion of total income stadium capacity) and is a better indicator spent on player salaries. This approach may of a club’s fi nancial well-being. Ancillary A complement to regulation is to change come into confl ict with the wider objectives income is typically a smaller proportion of ownership and governance structures. of trusts. Consequently, the evolution of total income, and budgets for non-league An example of an alternative model is a the league system in England will provide clubs tend to be ‘hard’ rather than ‘soft’. supporters’ trust which gives club control a fascinating natural experiment and Equity withdrawal by a ‘sugar daddy’ is to the major constituencies it serves: the test of alternative ownership and often not replaced, leading to dramatic fans and local community. Advocates of governance structures. declines in a club’s league status that supporters’ trusts argue that fi nancial threaten their fi nancial survival. stability is improved because of oversight by fans and supporters. Importantly, a trust ensures that the club cannot be sold Dr Adrian Gourlay is a Lecturer in without the agreement of fans. Economics and Deputy Director of Learning & Teaching. Adrian’s research expertise is in the area of empirical industrial organisation, with Currently, there are 110 trusts that hold particular reference to football, banking and equity within their clubs in the UK. One quasi-markets, and he can be emailed at example of an alternative model of club [email protected] 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, 16

THE FRAGILITY OF EUROPEAn BAnKInG

By David T Llewellyn

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. Loughborough university schooL of business and economics 17

THE FRAGILITY OF EUROPEAn BAnKInG

n the words of David Lascelles (author has eased banks’ immediate funding funding problems and bought valuable time, the of the CSFI’s 2012 annual survey of pressure, has removed the immediate need key question is whether the time bought will be i banking conditions “Banking Banana for substantial asset sales, has bought time enough to strengthen bank balance sheets and Skins”): “…concern about the outlook for banks for banks to adjust and for countries to adopt business models. has never been greater… concern this year is at structural reforms, and has allowed banks to the highest point in the 13 years we have been meet margin calls on derivatives trading if, and It is my opinion that this new role is an compiling it” (Financial World, February, 2012). when, required to do so. unsustainable business model – both for the ECB and banks making use of the LTRO To properly analyse the situation, it is integral All this represents a new business model not facility – illustrated in fact by banks having to understand that European banking is only for banks (relying on the central bank for diffi culty raising new equity and facing funding inextricably linked to four key crises: sovereign medium-term funding rather than the inter- and re-fi nancing constraints, in addition to debt, the weak state of the European economy, bank market) but also for the ECB. In effect, a substantial rise in bank balances held at fundamental fault lines in the Euro project and, the ECB has taken over bank fi nancing from the ECB and other central banks (a refl ection of course, the banking crisis. the inter-bank market (not the traditional role of uncertainty about the credit standing of of a central bank). However, the net effect is potential counterpart banks). When the ECB intervened on a massive scale that signifi cant parts of the European banking it was to introduce its long-term refi nancing system have become overly dependent on the operation (LTRO). To be sure, the intervention ECB. Whilst substantial ECB intervention through the LTRO programme has certainly alleviated 18

WAlKinG on THIn ICE

The role of regulation also needs to be The crisis will no doubt prove to be considered in this complex mosaic. transformational across the globe in several THE CASE STUDY Regulators across the world, not just dimensions: (1) the size of the banking Europe, are embarking on one of the industry and the structure of the fi nancial OF CYPRUS largest-ever reforms of the regulatory system and fi nancial intermediation, (2) When a bank fails, someone (often the taxpayer) regime, and there is a danger that bank business models, (3) the cost of bank has to pay the cost. It is a cardinal principle in the implementation of more intensive services, and (4) the regulatory regime. In regulation, however desirable in the long the decade running up to the crisis, banks the EU that bank deposits up to €100K are always to be protected (or £85K in the UK). run, might impede economic recovery in around the world expanded at too fast a When the banking crisis emerged in Cyprus it the short run. rate, as refl ected in sharp rises in the ratio was absurd that the fi rst idea was that such of bank assets to GDP . In the process, bank What does this mean for the UK? Alongside deposits would not be protected. The almost leverage (and in many cases, customer European banks, British banks have also unique case of Cyprus, however, is that virtually leverage) rose substantially. Although many substantially lowered the loan-deposit all the banks’ liabilities (around 90 per cent) are of the trends that supported this growth ratio (from 138 per cent in 2008 to in the form of deposits, as Cypriot banks have were unsustainable in the long run, their around 105 per cent in 2012), refl ecting virtually no clearly defi ned subordinated debt to removal is likely to have the reverse impact both asset disposals and a rise in retail take the hit. In which case, there was no realistic towards a more sustainable system and set deposits. However, in many cases capital alternative to making large depositors (many of business models. (equity) ratios are still too low. Firstly, many of whom were Russian) absorb the blow, with banks are underestimating and under- Simply said: as a result of the crisis, banks the prospect of +100K deposits being reduced provisioning credit risk. Partly because of are likely to become more risk averse and by as much as 40 per cent. The importance of low interest rates, and also in order not to less profi table. The requirement to operate this case is that, although unique in many ways, impair measured capital positions, banks with signifi cantly higher capital ratios and it introduces the principle that, under some have increased forbearance in the current lower gearing will also limit the role of banks circumstances, large depositors may be required weak state of the economy compared with compared with the years prior to the crisis, to have their deposits marked down in the event past downturns. Although more companies reinforced by banks facing a higher cost of of bank failures. The key issue is whether this have been making a loss during the capital and higher regulatory costs. Internal approach will be followed by other countries. recent recession than in the early 1990s, reward and bonus structures will change to the number of insolvencies is sharply remove the bias towards excess risk-taking lower. Secondly, the Bank of England has – indeed, there has already been some indicated that equity is currently overstated movement in this direction with caps by between £20 to £50 billion (a signifi cant imposed by the EU this April (to take effect margin by any means). 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. there is a danger that the impLementation of more intensive In the long run, it is likely that (particularly reguLation, hoWever desirabLe in the Long run, might large) fi rms will make greater use of the impede economic recovery in the short run. 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. Loughborough university schooL of business and economics 19

Bringing the various strands of the argument together, and in the context of the various pressures on the European banking sector, BRITAIn’S three particular concerns emerge: 1) the European banking sector is fragile and SOVEREIGn DEBT RATInG vulnerable to potential shocks; 2) the new regulatory regime has the potential to create DOWnGRADE serious negative feedback loops; and The UK has recently lost its coveted Triple A rating on government (sovereign) bonds. 3) many banks are dependent on ECB support In principle, ratings made by rating agencies such as Standard & Poors and Moodys which cannot be sustained indefi nitely. 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 The Euro and sovereign debt crisis acts as much” and the downgrade is more symbolic than immediately economic. Clearly, a Sword of Damocles over the markets and it is a disappointment to the government that has placed great store on its Triple the European economy. A new dimension is A status. The potential real cost is that government bond yields (and hence the now suggested focussed specifi cally on the cost of government borrowing) will rise as has been the case in countries such as banking sector. There will undoubtedly be some Greece, Spain and Portugal. The problem is that a vicious circle can emerge: a rating sovereign debt defaults or restructuring that will downgrade raises the cost of government borrowing which in turn makes it more weaken the balance sheet position of banks to diffi cult to service its debt. This has not happened in the case of the UK (or the US an extent that further injections of equity capital which was downgraded earlier) as the markets judge that the government’s ability will be needed. to service its debt has not deteriorated. UK bond yields remain at historic low levels. In some cases it would be unrealistic to In truth the recent downgrade was more a refl ection of the weak economy than any assume that the private markets and existing real concern about the government’s ability to service its debt. nevertheless, it may private shareholders will supply the amount be a warning sign. 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.

Watch the video online simpLy said: as a resuLt of the crisis, banKs are LiKeLy to become more risK averse David T Llewellyn is Professor of Money and and Less profitabLe. 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 [email protected] 20 student profile Ekaterina Chertkovskaya, Research Student Loughborough university schooL of business and economics 21

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.

katerina, known as Katya, is in her “Consumption of work was central to fi nal year of the School’s doctoral shaping students’ work orientations,” she e programme. Originally focussing on claims, “and only few of them resisted the student transitions to work, her research has ‘common sense’ argument. Those who changed course a few times before settling made alternative choices articulated doubt on the very topical subject of consumption of about these. Employability was presented to work and employability, with a recent article students as a lifelong project of the self, where calling for a debate about employability being constant enhancement and selling skills were published in The Guardian (“Employability: Is necessary to maintain a position in the labour it time we get critical?” 12 February 2013). market. Many students embraced the rhetoric of ‘skill possession’, but noted that they were Co-supervised by Dr Scott Taylor and ‘playing the game’ when ‘demonstrating’ Dr Marek Korczynski (both formerly at skills. Learning that it was demonstrating Loughborough), Katya is writing her thesis what the employers were willing them to show on the rhetoric on work and employability on became the primary condition for achieving a university campus: employability.”

“Using a theoretical framework drawn from Katya plans to submit later this year and Antonio Gramsci and Mikhail Bakhtin,” says would like to stay in academia to carry Katya, “I am analysing the following issues: on doing research and teaching. She is how the ‘common sense’ about work and considering the possibility of staying in the employability are constructed on campus, area, given the friends she’s made in Leicester and how students engage with such ‘common where she lives, and on campus, and the sense’ during their job search. opportunities she sees here for her work to be put to use. “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 Ekaterina Chertkovskaya is a fairs, documents, interviews with careers PhD student and can be reached on [email protected] advisors and non-participant observation of career consultations.”

In her dissertation, Katya argues that there was a strongly normative image of work Watch the constructed around an orientation she terms video online ‘consumption of work’. This image was closely associated with consumption opportunities, marketed to students through corporate presence on campus. 22

FEEDING THE WORLD

setting the agenda for research into food suppLy chains

By Dr Samir Dani Loughborough university schooL of business and economics 23

the recent horsemeat food security contamination scandal in europe has sparked off a and food Project 1 suppLy chain wide debate with regard sustainabiLity coLLaboration to reduce to the food we eat. this There is no doubt that two of the biggest post-harvest food Losses challenges facing the world today are food case brought forth two This project studies different forms of security and food sustainability. According supply chain collaboration and investigates important challenges of to the Un Population Division, the world the suitability of collaboration techniques population is estimated to reach 9 billion the food industry: the to reduce post-harvest food losses. complexity of their supply by 2050, which will require a 70 per cent increase in food production to meet To get involved: chain and the issues global needs. [email protected] with labelling. According to the United nations’ Food and Agriculture Organization, the pace of ur busy lifestyles have created population growth, climate change, income an ever-increasing demand for distribution imbalances and change of Project 2 o processed ready-to-eat food consumption patterns are moving faster moving up products. As global supply chains strive to than technological advancements. The deliver these products to the supermarket FAO states that preserving the inputs in the vaLue chain shelves, organisations start losing control the food supply chain, i.e., raw materials This project looks at business models over them. and using them as effi ciently as possible, and innovation within the agriculture can increase food security for now and for supply chain to reduce post-harvest food This is not the fi rst big case that has the future. Yet the Government Offi ce for losses. The project considers processing occurred within the last few years. The Science (UK) estimates that 25 to 50 per models for farmers to move up their food milk contamination scandal in China cent of food is wasted along the supply processing value chain. (2008) and the peanut butter-salmonella chain and does not reach consumers. cover-up in the USA (2009) depicted not To get involved: only the speed at which the contamination Food losses and waste in developing [email protected] spread globally, but also the responsibility low-income countries are related to the and accountability for limiting the upstream supply chain – farm to processor contamination. Unsafe food can lead to – whereas the losses in the affl uent world fatality, as seen in both these cases. are related to the downstream supply chain – retailer to fi nal consumer (Parfi tt, As food companies scramble for space and J., Bartherl, M. & Macnaughton, S. (2010). volumes in supermarket chains, availability Interventions to reduce post-harvest of raw material for food manufacturing gets food losses are seen as essential by even more complex with the world facing organisations such as the World Bank, increasingly uncertain weather conditions, to minimise food insecurity and for the which have an effect on agriculture agriculture sector to meet global production. Ironically, as food companies food demands. 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 By Dr Samir Dani 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. 24

risKs in the food suppLy chain The food supply chain has been increasingly in the spotlight for safety scares, recalls and disruptions. Food supply chains of today are particularly Project 3: fragile due to the geographic, economic risK management in and regulatory spread of participating food suppLy chains entities and the manifestation of risk as it fl ows very quickly across international This project investigates the various boundaries. The impact of risk risks affecting food supply chains. It materialisation can be catastrophic both to considers systems thinking and scenario the customer as well as the organisation. planning to bring together operational teams to manage risks both proactively Risks in the food supply chain are not only and reactively. due to food contamination and recall, but also can often involve disruption due to To get involved: natural hazards, terrorism, protests, political [email protected] upheavals and labour issues. In recent years, fl oods, pandemics, extreme weather patterns and recession have all strongly affected food supply chains – perhaps Project 4: most notably affected have been the world’s wheat supplies. catastrophe modeLLing and food suppLy chains Risk management takes two forms: This project aims to scope the integration proactive and reactive. Proactive of catastrophe modelling and supply chain risk management needs planning resilience from a multidisciplinary domain. and foresight. Whereas reactive risk The project will also aim to develop a management needs speed of response. networked cohort of researchers capable In cases of food contamination, speed of of addressing critical issues in catastrophe response is required to work with the chain modelling and food sustainability. and the Food Standards Agency to limit the contamination. However, this is not always To get involved: possible, and only some organisations [email protected] 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 Watch the the recent horsemeat scandal, rapidly video online 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. Loughborough university schooL of business and economics 25 sustainabLe suppLy chains Sustainability challenges within the food Work has been undertaken in improving supply chain are governed by the ‘triple processes, reducing energy consumption bottom line effect’ as coined by John within physical infrastructure (e.g., Project 5: Elkington, which considers not just a energy-effi cient buildings) and the energy fi nancial profi t-and-loss account of the effi ciency of transportation. This has been improving energy company, but also the ‘people’ account a very important development and has led efficiency across the food (socially responsible) and the ‘planet’ to local optimisation and effi cient use of suppLy chain account (environmentally responsible). energy. However, if the target is to reduce energy consumption across the supply This project utilises a multi-disciplinary The pursuit of sustainable goals is chain, then local optimisation has to approach to investigate energy largely governed through the fulfi lment spread across the entire supply chain. consumption across food supply chains. of legislative requirements. Some of the Using relationship models and innovation benefi ts of being sustainable are now Energy effi ciency has a direct infl uence on the project aims to provide tools for being recognised by companies, and the costs and can have an economic rationale improving energy effi ciency in the food motivation to follow sustainable policies is across the chain; however, meeting carbon supply chain. now based on clear economic and social emission targets will be more about benefi ts that are accrued by companies. meeting legislative requirements. The To get involved: Hence, the steps taken by Tesco, for challenges increase when we consider UK [email protected] example, to have energy-effi cient buildings, food supply chains and the international reduce energy in its operations and support entities that form the primary chain. If the sustainable fi shing; by Walmart to reduce target is to reduce the carbon footprint or packaging; or by Coca Cola to conserve the energy consumption, how will these Project 6: water – all have clear economic and requirements transcend international social benefi ts with wide-ranging boundaries? suppLier dependence environmental benefi ts. and sustainabiLity Even within national chains, the requirement for the supplier or distributor This project investigates the infl uence to adhere to the energy targets as set by of supplier dependence and buyer- the local company in the food and drink supplier power on the implementation of the motivation to foLLoW supply chain will depend upon power in the sustainable practices across the supply sustainabLe poLicies is noW relationship, the position in the chain and chain. the ease of innovation and support within To get involved: based on cLear economic the relationship. It is thus necessary to and sociaL benefits that study supply chain relationship challenges [email protected] to implement energy and carbon effi ciency are accrued by companies. across the food and drink supply chain.

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. 26

As much as the food sector is influenced Our research into food supply chains by profits, it is also one of the biggest in India also brought forth the role of employers in various countries. Hence, it is the government in creating appropriate As food supply chains criss- even more important to keep this industry mechanisms and policies for food safety, cross the globe to bring food sustainable. As food supply chains criss- sustainability, logistics infrastructure and cross the globe to bring food to our plates, skills. These are challenging times for the to our plates, it is essential to it is essential to monitor them. This is not food sector, and there is a lot of potential monitor them. always an easy task, as different countries for research into the various aspects, as have different food safety standards and discussed in this article. 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.

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 [email protected] Loughborough university schooL of business and economics 27

stAff profile Professor Zoe Radnor

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.

Watch the video online oe’s primary research which have evaluated how Lean interests are in the areas techniques are and could be used in What Lean Z of performance and process the public sector. improvement and service management is and the in public sector organisations, with She has developed a ‘House of Lean’ assumptions a special focus on ‘Lean’, which Zoe for the UK public services and has describes as: published more than 80 articles, it hoLds book chapters and reports, as well “The development of good practice as presented widely on the topic (as defi ned by Zoe): of process/operations improvement to both academic and practitioner that allows a reduction of waste, audiences. Zoe also advises and sits on Determining ‘value’ and ‘waste’ from a improvement of fl ow and better concept a number of boards and committees customer’s point of view; of customer and process view through for organisations such as the Welsh a culture of continuous improvement Assembly Government, national Audit Creating value either by reducing waste involving everyone.” Offi ce and Cabinet Offi ce. In the near and thus the cost of a product or future, Zoe is planning on launching a service, or by increasing the value- The reason why ‘Lean thinking’ has new research centre at the School in adding activities without increasing the become a recent prominent and Service Management, so watch cost of the service or product; popular approach to public service this space. reform, is that in the current era of Appreciating that there is a defi ned and constrained and reduced public And yet, despite the rather impressive measurable benefi t to the organisation spending it has promised to maintain list of Zoe’s academic and professional service productivity, improve resource milestones, she emphatically describes in reducing non-value-adding activities - utilisation and maintain service quality. her children as being the single most in the private sector this has been important achievement in her life, seen as a reduction in cost, or an Zoe has recently been an Advanced hands down. increase in competiveness against Institute of Management (AIM) the peers; Management Practice Fellow Zoe Radnor is Professor of Service considering sustainability of Lean in Operations Management. She can be Freeing up resources through the above public services. She has led research contacted at [email protected] processes to help a business; and projects for the Scottish Executive, HM Revenue and Customs, HM Court Understanding that at the heart of Lean Services, healthcare, local government is the concept of ‘customer value’. and higher education organisations, 28

YOUR PASSPORT TO BUSINESS does 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. PASSPORT

By Maxine Clarke

y research set out to investigate forms, including joint curriculum development, because of the experience and to investigate whether an international research partnerships and Internationalisation how students feel that their attitude towards m experience for students can develop at Home, but it is student mobility that forms starting their own business has changed some of the most commonly understood and the basis of this research. as a result of their international sojourn. In accepted attributes of entrepreneurs, and addition, I looked at how this change might whether the experience actually aids students According to empirical evidence, the outcomes have affected the career choices of graduates in thinking about and later starting up their of student mobility range from personal in terms of entrepreneurial behaviour and their own business. development and intercultural competence willingness to start their own business. through to more tangible outcomes, such as As control groups, I have also tracked a The concept of international education is not a greater propensity to live and build a career number of students undertaking a placement new – scholars have been travelling around abroad, to work for international companies in the UK and students who are following Europe in search of new ideas, new contacts and network building. There is also increased three-year degrees and therefore don’t do a and to spread knowledge for hundreds of recognition on the part of employers that an placement or go abroad. years – but in more recent years, schemes international experience adds value to the such as Erasmus, and a realisation on the workforce. However, many of these outcomes The quantitative research involved an online part of universities worldwide of the relevance are diffi cult to quantify and are often very survey, using both established entrepreneurial of international education in today’s global personal in nature. tendency tests and more focussed criteria, economy, have led to a marked increase in the against which any changes in certain attitudes number of students who spend part, or all, of Over the past 18 months, I have used a could be measured. These included attitudes their degree programmes in a foreign country. mixture of both qualitative and quantitative towards risk-taking propensity, tolerance of research methods to track students before ambiguity, creativity, determination, locus of Of course, international education is not just and after a period abroad (either study or work control and achievement motivation. about student mobility; it can take many placement), to look at how they have changed Loughborough university schooL of business and economics 29

results, to try to discover the ‘whys’ and ‘hows’ of any changes caused about by the experience, and, OUR of course, to see if any erasmus of the graduates had actually started up their ERASMUS Erasmus is the European Union’s fl agship own business (and, if so, educational exchange programme for higher whether they felt any of this PARTNERS education students, teachers and institutions. entrepreneurial behaviour Erasmus forms part of the EU Lifelong Learning was attributable in part to Austria: Programme (2007-2013), encouraging student their mobility). University of Graz and staff mobility for work and study, and promoting Belgium: transnational co-operation projects among I am nearing the end University of Antwerp universities across Europe. of my research and am starting the process of france: The scheme currently involves nine out of every ten writing up my PhD. The Catholic University of Lille European higher education establishments and results of the quantitative ESC Toulouse supports co-operation between the universities data indicate that changes ESSCA, Angers do take place in some of of 33 countries. More than two and a half million Euromed Management, Marseilles students have benefi ted from Erasmus since its the attitudes as a result of the experience abroad. Grenoble Ecole de Management introduction in 1987. In particular towards University of Limoges For information on ‘Erasmus For All’, which will risk-taking propensity, tolerance of ambiguity and Germany: replace the Lifelong Learning Programme in 2014, University of Cologne determination to achieve please visit the LLP website: certain goals, and that Greece: these changes are not as Athens University of Economics www.lifelonglearningprogramme.org.uk/erasmus-for-all evident (or are non-existent) and Business in the control groups. netherlands: VU University of Amsterdam Over 450 students from around the UK Of the interviewees, over 2/3rds have either responded to the initial survey in September already set up their own business or are portugal: Universidade Catolica 2011; the vast majority of these were about seriously considering doing so at some point in Portuguesa, Lisbon to spend the next academic year abroad, the the future, and most of them were unequivocal rest fell into the control groups categories. in highlighting how they felt the mobility spain: In September 2012, the same survey was experience had contributed to their personal Universidad Carlos III de Madrid re-sent to the same students, with 200 development and to their (potential future) University of Valencia responses being received. The ‘before’ and ‘after’ entrepreneurial behaviour. surveys were analysed to check for positive (or negative) developments in the attitudes, There are still many questions to be asked and demographic data (such as family and answered as to the impact of a background, degree discipline and experience mobility experience on a person’s career of entrepreneurship) were compared. choices and the extent to which they will act entrepreneurially in the future, but this research Maxine Clarke is Programme Director of the The qualitative method involved interviewing two has at least started to ask and answer some of BSc Business Studies programme (Singapore) sets of people: students who had just returned those questions. The purpose of this research and a current PhD student. She can be emailed from their year abroad, and graduates who had is to gain more insight into the benefi ts of an at [email protected] undertaken study/work abroad as part of their international experience in terms of providing degree some years ago and who were now more graduates who can contribute to the established in their careers. Both groups could economy through entrepreneurial behaviour refl ect on the role that their experience had matched with an international perspective. 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 30 It’s all in the attitude V icious and virtuous circles in offshoring relationships By Angelika Zimmermann

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. Loughborough university schooL of business and economics 31

e have heard a lot about cost saving through lower wages, effi ciency of communicating and working effectively gains and price reductions, as well arguments around hidden coordination with offshore counterparts are more likely to W costs, risks of intellectual property theft and job losses onshore. When it contribute effort to the collaboration. They comes to employees, however, we know very little about the attitudes that those working learn better to transfer knowledge, solve in offshoring arrangements on a day-to-day basis hold towards the transfer of tasks to problems and work as a team with their offshore destinations. offshore colleagues, and for these reasons are more likely to succeed. 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 There is a lot that managers can do to shows that some onshore employees regard offshoring as an opportunity for intercultural stimulate the virtuous circles and inhibit the learning and for new, challenging tasks. They also feel that the required amount of vicious circle created by offshoring attitudes. coordination across countries is acceptable. Above all, a clear and explicit strategy for the distribution of tasks between onshore and Others, however, complain about delays of delivery deadlines due to repeated intercultural offshore colleagues is necessary to address misunderstanding, about the danger of losing interesting tasks – or even one’s job – to onshore colleagues’ career ambitions and offshore colleagues, and about an unbearable workload that is created when offshore security needs. 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, in the case of offshoring, peopLe Who is smaller if there are abundant opportunities for new and thinK they are capabLe of communicating challenging tasks onshore, and if onshore employees can identify with these novel tasks. For example, some engineers and WorKing effectiveLy With offshore in this research were not happy about converting into mere counterparts are more LiKeLy to coordinators of an offshore task force and giving up their exciting high-tech engineering work. Moreover, excessive contribute effort to the coLLaboration. 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 This strategy has to be a balancing act, are closely tied to the success of offshoring collaborations. Those employees who though. In order to steer against turnover of experienced their offshoring arrangement as rewarding were also the ones who put most highly qualifi ed employees at the offshore effort into making it work. This led to better results, which in turn reinforced the positive destination, managers must not reserve attitudes. A virtuous circle was thus created. innovative, challenging tasks exclusively to onshore employees. They instead On the other end of the spectrum, scepticism and negative attitudes towards the should transfer attractive tasks to offshore collaboration lead some onshore employees to spend only minimum effort in transferring colleagues to open up career prospects and required knowledge and improving the intercultural communication. This often led to encourage offshore talent to stay with the poor performance by offshore colleagues, which confi rmed onshore employees’ negative fi rm for longer. Only then will it be possible attitudes, thus creating a vicious circle. to achieve the required offshore expertise, satisfactory performance and more In some cases, frustrated onshore colleagues even boycotted the collaboration actively, by positive offshoring attitudes on the part withholding necessary explanations: of onshore employees. “Maybe you have noticed that he [the offshore colleague] hasn’t really understood, but These factors, in turn, underpin the you do not tell him. Then he will take forever. You get no output, and in the end you do it likelihood of success and failure in yourself. That’s the solution: ‘I’ll just do it myself, even if I work overtime.’ Then you will be offshoring relationships. As Winston able to say afterwards: ‘This doesn’t work, does it.’” Churchill said: “Attitude is a little thing In more technical terms, such activities can be explained by two fundamental motivational that makes a big difference”. 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 Dr Angelika Zimmermann is Senior outcomes. Hence, employees who believe that offshoring threatens their own tasks and Lecturer in International Business and jobs or creates extra work are less likely to support it proactively. Strategy. She can be emailed at [email protected] 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 School of Business and Economics Loughborough University Leicestershire LE11 3TU UK T: +44 (0)1509 222701

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