7 Oct 2011

The Cass MBA Perspective: Ethics

At Cass, like many other business schools, we have been re-examining our approach to ethics and the role we play in promoting responsible business practice. Since the financial crisis, these issues have rightly taken on a renewed importance in the City and among students who are increasingly concerned about how corporations affect local communities, the lives of their workers and the wider environments they operate in.

In response to this changing mood, Cass appointed Professor Paul Palmer to lead an Ethics Sustainability and Engagement initiative with a brief to review the way we teach ethics and how it is reflected in the content of our curriculum. Since his appointment in 2010, Cass has designed an ethics awareness programme, rolling out a series of workshops on ethics for both professional and academic staff. 

This ambitious and far-reaching review is designed to ensure ethical issues are reflected in the curriculum of our graduate and postgraduate courses. The staff workshops, which will be completed by 2012, involve asking what, if any, are the ethical issues relating to each of our teaching fields and how can we ensure they are represented sufficiently in the course content. Our aim is not to teach ethics – but to equip students with the skills they need to make critical judgements. This means looking at decisions not only in the context of what is most efficient or profitable in the short-term, but also what is right for the long-term.

Companies want talented people but they also want people with good ethics. By ensuring this critical subject is embedded in everything we teach, we aim to develop successful and responsible business leaders who understand their obligations to employers, customers and shareholders, as well as society at large.

Richard Gillingwater
Dean of Cass Business School

Ethics in business? Get real

Ethical standards may at last be rising in the business world, but helping MBA students understand their significance can still be a challenge. As Professor Paul Palmer explains, it means remaining firmly rooted in reality.

In 2007, I gave a lecture to MBA students on irresponsible bank lending. I’d been researching the idea of creating an ethical code for selling financial products, and thought it was important to share my findings with tomorrow’s business leaders. With hindsight, most people today would say that was a timely topic for discussion – but back then, it provoked a barrage of criticism from my audience. Ironically, they accused me of not living in the real world.

Of course, that was before the financial crisis began to unfold, so I didn’t mind the criticism too much. But even now, after we’ve seen so much proof of the trouble a lack of ethics can get us into, I still find myself having to justify why ethical decision-making is important. Talk about strategy or finance, and students are generally enthusiastic. But when it comes to discussing responsibility or sustainability, I have to provoke interest by stressing how vital these issues are to today’s businesses.

Perhaps it’s because ethics sounds like a branch of philosophy – people expect it to be dry and academic. In fact, ethics is more about real-life, everyday judgements than any other part of an MBA programme, so I’m very happy to ‘keep it real’.

How do we do this? Well, business scandals continue to happen with unprecedented frequency, so examples are easy to come by. These can make lively role-play sessions, covering everything from bribery and blackmail to sexual and racial harassment. And we don’t look at these from a politically correct perspective – it’s about hard business decisions, where serious problems can be traced back to fundamental failures of judgement.

Increasingly, our guest speakers are keen to cover ethical topics, giving us yet more real-world examples. And we’ve recently made more of our City connections through a special project where students compete to work with eight leading city firms and organisations. Each successful participant gains direct, hands-on experience of a corporate responsibility issue, carrying out research on a topic of genuine value to the partner and completing a consultancy report.

This focus on the real world comes as a surprise to many students. Some are also surprised to find out how difficult this module is - Ethics is a tough, serious subject.

But my role is more than running this part of the course. As the Dean’s introduction to this eNewsletter says, with my team, I’m running a cross-school review of the ethical business content of all Cass courses – undergrad, postgrad and MBAs. We’ve now completed a pilot, and been encouraged by everyone’s willingness to reassess their areas from an ethical standpoint. As the project rolls out over the coming months, we hope to see its influence spread throughout the school – with possible new course designs and materials.

Most importantly, as ethics is so grounded in the real world, I hope the review will result in yet more practical elements in our teaching. As a business school, we know how to ‘get real’, and this project will make that focus even sharper.

The Only Way Is Ethics

“Predators are just interested in the fast buck, taking what they can out of the business…..It's about different ways of doing business, ways that the rules of our economy can favour or discourage.

Look at what a private equity firm did to the Southern Cross ….They may not have sold their own grandmothers for a fast buck. But they certainly sold yours. They aren't the values of British business.”

Ed Milliband, Labour Party Conference Speech 2011

In June 2011 my partner and I established Denstone Real Estate Advisors. We resolved that we did not want to work with people who did not share our values and we committed to donate 10% of all our profits to charities. This may cost us money, but it is how we want to do business.  If we did this 20 years ago, we would have been seen as radical, but for many of today’s business leaders, the move to integrate our values into our businesses is increasingly important.

Flashback to mid-1990s when we were looking at possible careers. It was clear that those in business made money, whilst those who looked at the charitable sector for a career were tree-huggers and do-gooders.

Indeed, there was a real perception that the majority of all those going through business and management degrees were the type who had pin-stripe suits, mobile phones and a photo of Margaret Thatcher on the wall. Those who chased the MBA designation were the real city slickers, the Gordon Gekko, super-focused type, who from the age of 18 were determined to make partner in their bank, consultancy firm or law firm and destroy all in their path.

As a current MBA and looking back from 2011 with clear hindsight, one of the real achievements of the 90s and 00s is seeing how many people with strong social and ethical responsibilities entered the business world.

In understanding why this shift took place, look back to the 80s. The paradigms of left and right were simple, definable and understood. Today we look at the globalised 21st Century and we have moved full circle, as western nations overtly court Communist China and the prevalent political philosophy can be described as liberal pluralism, where there is no right answer to all problems. How morality is viewed in the global business economy is no different than in all other all aspects of life; it is highly individual.

Look at Fortune 500 companies and we see cases when businesses transcend their core purpose and seek to address global problems as an acknowledgement of their moral obligations. There is evidence of localised programs benefitting workforces in developing countries, where software publishers seek the eradication of disease and mining companies are the regional experts in building hospitals. Closer to home in the UK, we see projects launched to reinvest in the local communities or to develop a sustainability agenda. There are also businesses that contribute nothing tangible, many of whom are household names.

In addition to keeping Mr Miliband happy, the PR people tell companies that engaging with wider society is increasingly good for business. This is seen in the case of Fairtrade, ethical banking and carbon offsetting, proving that an ethical differentiator is a key marketing and sales attribute, and that values based promotion, which generates an emotional response, is the holy grail of marketing.

However, before we declare this the age of “cuddly capitalism”, or commend the UK for being at the forefront of “ethical entrepreneurship”, after 18 months of my MBA I remain a cynic of much of the movement towards corporate ethics.

This year, I was introduced to a new development in ethics and morality, the “off the shelf ethical packages” sold by consultancies like PWC. Yes, for a small fee (actually, probably a large fee) you too can have your very own corporate and social policy, with sound environmental credentials, carbon offsetting, anti-discrimination policies and a full progressive platform to make the most left-wing Labour leader think you should be awarded with that hard-earned peerage.

I spent some time working with an unnamed company earlier this year, which are classic asset strippers, vulture investors and market manipulators. But they take great pride in sponsoring schools and have fantastic community engagement and youth empowerment programmes. I do not doubt that the intentions of the charitable staff are genuine, nor are there any questions of the morals of the principal benefactor, but seeing the company operate from close quarters, their attitude towards business contains zero ethics or morals; as the CEO would say, business is business, charity is charity.

When Ed Miliband cites the “values” of British business, I am not sure what he means. British business exists in a pluralistic market, which the capitalist framework favours, within which businesses should be allowed to operate how they want. For some, the only purpose of entering business is to obtain maximum profit on investment and the ends justify the means. Is this un-British? Is buying in an ethical package to appease shareholders, the British way? Or is the patrician approach, demonstrated by the Lever Brother in Port Sunlight and Robert Owen in New Lanark, more like Milibands’s British way?

I strongly believe that businesses don’t have ethics, people do.

Ethics and morality are personal issues; the values with we choose to lead our life and decisions we make are ours alone. We live in a society where the individual is free to take a job, form a career, and consume as he sees fit. In my own circle, I see personal and business value alignment as being more pronounced than ever and it is routine to see people not applying for jobs or with companies where there is not a value-fit, even in these trying times.

If businesses want to cultivate an ethical core, they must alter their organisational culture, they must recruit away from “the usual subjects” and look outside the box to integrate good practices.

But not all businesses want to. If they are contributing to the economy, paying their taxes and are happy the way that they are, why should they change?

The proposal to use the state to formalise the alignment between business and morality by using the carrot of peerages and with the force of government as the stick, is ill conceived, and will not lead to better people in business, rather, it will lead to the proliferation of suppliers selling “morality out of a box” rather than better business ethics. 

For me, the only way is ethics. If you want to understand the values of a business, look at the people, not just the policies. We developed Denstone because of who we are and how we want our business to be run. In business, like life, I will not impose my beliefs on others- but if I don’t like them, I just won’t work with them!

Oliver Lovat is a current Executive MBA Student, Chartered Surveyor and Partner of Denstone Real Estate Advisors. He began his career working in the Third Sector as Policy Director of the Stone Ashdown Trust, before moving to real estate investment in 2001.

Business ethics in action

Edouard Larpin, Cass Business School alumni and Management Consultant at Ernst & Young, tells us about Cass Ethics, and why he set up the series of video interviews for Cass Knowledge.

Sub-prime mortgages. Bankers’ bonuses. Executive pay. Recent events in the business world have moved the subject of ethics up the corporate agenda. Back in January 2010, when the economic crisis was really hitting home, the papers were full of bad ethical practices. Like many people, I felt really disgusted by these excesses of capitalism.

I remember seeing Roger Steare’s lecture about business ethics. It really inspired me, and a few weeks later Roger kindly agreed to let me interview him about CSR in HR for a class project. This gave me the idea of doing a regular video series on ethics in business.

Cass Ethics is published every two weeks and in each episode I interview a leading academic or practitioner. The focus is on applying ethics to real life business situations. In other words, finding the balance between maximising profit and minimising negative impacts on the wider society.

As well as providing practical advice for managers and professionals, Cass Ethics should be of real interest to Cass students, alumni and other academics. Interviews so far have touched on Business Education, Marketing, Entrepreneurship, Business Ethics tools, life in the City, what we can learn from religion, and ethics in the insurance world. To date, these interviews have been watched nearly 10,500 times.

In upcoming posts (the last two in the series), I’ll publish part two of my interview with controversial ‘City Boy’ author Geraint Anderson, and meet Peter Hahn, now a lecturer in Finance at Cass and previous MD of CitiGroup. To watch these and other interviews, visit Cass Ethics at here

Though I graduated last May, I’ve been asked to consult on the next series, which will have more of a student focus. If you’re interested in taking over the reins, please email me on edouard@larpin.com

Is morality in business a contradiction in terms?

Morality in business is anything but an oxymoron. With the growth of international business and globalism, morality is today not only an international social requirement but a competitive advantage.

While business morality has been all but forgotten in recent decades, contemporary events such as the exponential growth in industrial pollution, the rise of consumerism and the popular reaction to increasing numbers of scandals and corruptions have returned it to the forefront of people’s minds. Modern managers must contemplate the moral implications of business. Morality shall provide the trust necessary for successful transactions and the glue that holds business together.

Firms must be profitable in order to survive, but absolute maximization of profit is not conducive to the type of long-term relationships that create true wealth for individuals, businesses, and economies. In a world where consumers see their purchases as votes for a better world, moral management provides a competitive edge. Additionally, moral management benefits both internal and external customers: Happy employees provide better service and they are motivated to improve the business.

Morality implies a certain value system. It presumes a correct way of doing things, which can vary from person to person. Morality is rooted in religious faith with beliefs and values serving as guiding principles. Ethics, often intended as a synonymous, are more neutral, conscious agreements between people or institutions.

All business decisions have moral implications that have to be considered. Business is personal because it directly affects us: Our lives and our futures. It is also personal because each one of us can use it to choose the sort of world we want to be part of. Google’s informal motto, Don’t Be Evil, is a clear moral stance, even if it was easily forgotten in its last attempt to enter the Chinese market. It is no longer good enough to think “business is just business”. There are ramifications for every dollar we earn and spend, and each of us is accountable.

In an international environment customs and values vary from country to country, from one region of the world to another, and from one religion to another; however, the basic moral rules apply everywhere, despite differences in local customs. As an example, the United Nations Universal Declaration of Human Rights has been ratified by almost every country on earth, and it is used as a standard both by companies and by their critics.

Business as an institution is amoral and, like any other institution, is an artefact rather than a natural person: personae fictae, the Romans called them. Nevertheless, a company is comprised of actual people, and the corporation shall be treated as an entity capable of reason and judgment. A company is a legal construct; it is the people in it that determine whether the business is behaving morally or not.

Key players are the chairman and CEO. They set the tone for the company. The mystical body of business is guided not by a visible head but many leaders and chief executive officers. They are the responsible people in business. Each manager is responsible of the shareholders. While a manager must act in accordance with the law, he/she may go beyond the requirements of the law in order to follow his or her own moral values. And moral law is much easier to find and digest, because it resides in each of us.

The subordinates in the corporation tend to obey the rules and inertia of the bureaucracy, and here it comes once more the responsibility of the manager to act morally. Again, it is the human being, the manager, and not the construct, the corporation, who is the judging agent. Moral people are necessary, even if they are not enough. Ethical structures and enforced legislation are also necessary not only to enable business to develop, but to protect workers, consumers and the environment.

Multinationals shall also consider the impact of their actions on the local scene. They must observe the natural right of other individuals, honour contracts, and avoid fraud and coercion, but also honour representations made to the local community and contemplate the most likely consequences to their actions. Nowhere is written that business comes without responsibility.

Business morality as a field is expanding internationally. Many have come to see that good ethics frequently means good business. Any multinational interested in its own long range reputation and future development and profit should adopt this model.

Morality, of course, involves a cost. This cost may be in money, effort, risk or income forfeited. However, it would be strange indeed if we recognised that all income has to be bought, but the most precious product, morality, to be costless when, in fact, it is a priceless treasure.

Throughout the process of writing this, I am pondering why we entertained a dichotomy between morality-business for so long. Perhaps we did it because we tended to see morality only as a matter of religious belief and therefore outside the bounds of normal business discourse. From a pure profit perspective, maybe we could not see any economic benefits of it. Whether it is one of these, a combination of the two, or some other factor, I am reminded of a quote from Stefan Engeseth, “Just as you choose to be the person you are in life, you can choose how your business acts.” We have the power to decide: Will our business choose to be good or bad?

Emiliano Lazzaro, Dubai EMBA student, has grown an international banking experience for 10+ years in Europe and GCC. He specialised in debt capital markets, distressed asset management and Islamic finance with Blue Chip investment banks including Morgan Stanley, Goldman Sachs, Lehman Brothers and Citi.

Join the debate!

Mars has announced Maltesers are to become “Fairtrade”, providing $1 million in annual Fairtrade premium funds for cocoa farmers. However with this launch coinciding with the product’s 75th anniversary, could this be a marketing move instead of genuine CSR?

Leave your comments below...


Cass Business School Dubai welcomes fifth Executive MBA class

Dubai, UAE, September 25, 2011: Cass Business School Dubai today welcomed the fifth intake of its Executive MBA (EMBA) programme, ranked the 10th best in the world by the Financial Times. The class of 2011-13, comprising 61 students from 24 countries, will study at the Cass Dubai Centre in DIFC.

This year’s EMBA programme began with a four day induction at the Cass Dubai Centre in DIFC, including an introduction to the faculty, the unique Cass virtual learning environment, Moodle, team building and professional development workshops and a social reception hosted by the school at the Capital Club. The students also enjoyed a formal welcome to the course in the presence of DIFC Management and Guy Warrington, HM Consul General.

Abdulla Mohammed Al Awar, CEO of DIFC Authority, said: “We would like to welcome Cass’s fifth intake of its EMBA programme. As part of its mandate to contribute to the development and growth of the financial sector in the region and to UAE’s economy, DIFC supports educational programmes that help in the creation of knowledgeable, experienced and talented professionals. The Cass programme indeed complements this mandate. We look forward to congratulating the new intake on their successful completion of the programme to having their eventual contribution to the growth of the regional financial services industry”.

Professor Roy Batchelor, Associate Dean MBA programmes at Cass, said: “On behalf of everyone at Cass Business School, I welcome the 2011-2013 cohort of students to the Dubai Executive MBA. The group can look forward to two years of world-class business education, delivered by internationally recognised academics, and the opportunity to build their international network of business contacts. With a wide choice of electives, students can tailor the content of the programme, meaning the course will take them wherever they want to go in their career.”
Ehsan Razavizadeh, Regional Director for Middle-East and North Africa said: "In just five years, the Cass EMBA programme has earned an enviable reputation in the UAE and across the region. This reputation is once again reflected in the hugely impressive educational and professional backgrounds of our student intake.  Many of our alumni are already taking major strides in the professional world, and I am confident this year’s class will join them and become the region’s next generation of business leaders.” 


   The official Cass Facebook page has had a face lift. 

      Join the Cass community and be the first to find out about the high profile events and information sessions on campus. 

      Chat to current students on the forums and flick through photographs of the latest events. Plus, get the Cass ‘Fact of the week’ and access to the latest thought leadership articles.

      If you want to become part of the Cass community follow us on: www.facebook.com/Cassofficial


Cass and Hawkamah partner in Dubai

Cass Business School has signed a Memorandum of Understanding (MoU) with Hawkamah, the Institute for Corporate Governance in Dubai.
The agreement was signed during a ceremony at the Dubai International Financial Centre by Hawkamah Executive Director, Dr. Nasser Saidi, and Cass Regional Director MENA region, Ehsan Razavizadeh.
Cass and Hawkamah will collaborate to raise awareness of corporate governance through the joint hosting of workshops, seminars and networking events. The two organisations will also conduct research into corporate governance in the Middle East, with Hawkamah supporting the work of Cass students with, for example, their dissertations.
According to research by Hawkamah, 56% of the region's listed companies and banks are in emerging or under developed corporate governance practice. However, most of the region's capital market regulators and central banks have issued corporate governance codes, regulations and frameworks that need to be implemented by these companies.
Dr. Saidi said: "Clearly, there is a lot more work that needs to be done that focuses on corporate governance implementation. As a think-and-do-tank devoted to bridging the corporate governance gaps in the Middle East and North Africa region, we are delighted to formalise our partnership with Cass Business School through this MoU. In the past few years, we have been working with Cass professors and their students to bring more focus to corporate governance research on the region, a much needed endeavour in order to further identify current practices and develop policy and practical solutions to push better corporate governance practices. We look forward to further collaborations and engagement with Cass Business School, and are excited about the prospects of our partnership."
Razavizadeh said: "Thanks in great part to the work of Hawkamah, corporate governance in the Middle East has come into sharp focus over recent years. As such, it has become an imperative to ensure business leaders in the Middle East are equipped with the skills and knowledge to implement corporate governance best practice. Aligning our expertise with that of Hawkamah means we will be able to offer students the most comprehensive grounding in corporate governance available anywhere in the region."
Cass Business School and Hawkamah have a longstanding working relationship. Three students from the first Cass Business School Executive MBA programme in 2007 conducted their Business Mastery Project in collaboration with Hawkamah. The project focused on analysing and corroborating the corporate governance practices of Islamic banks and financial institutions, with the research findings providing an important pillar of Hawkamah's Policy Brief on Corporate Governance for Islamic Banks.


Dubai - Guest Speaking events at the Capital Club

The Capital Club and Cass Business School presented a number guest speakers on a variety of topics in the last couple of months. These topics covered insider trading, business models and lessons from the financial crisis, allowing the audience to have an in-depth discussion on current topics of the business world.

14/09/11 Insider Trading: Should the regulators legalise insider trading?

Based on extensive research on the topic, Professor Lasfer lead a debate on Insider trading
considering the importance of insider trading in increasing market efficiency, whilst trying to maintain
and protect the interest of outside/minority shareholders' interests.

26/09/11 What business models do we need for success and how do we get there?

In this evening debate Charles Baden-Fuller explored what the threats are to the current business models: in terms of the way companies need to think about value creation and value capture. And he looked at the challenges to managing business model adoption, and critically, the role of top management and the board of directors in setting the right agenda.

10/10/11 Investment Lessons from the Financial Crisis…
with Steve Thomas

With the crisis entering a new phase and the global economy facing a possible double-dip, why are policymakers so helpless and why has macroeconomics and finance theory been shown to be so lacking in credible solutions? And are there investment strategies which can secure reasonable returns despite the ultra-volatile market environment?

Cass Talks

Dr Sionade Robinson discusses MBA induction

3 Aug 2011

The Cass MBA Perspective: Student Edition

Welcome to our summer edition of the Cass MBA Perspective eNewsletter, direct from our current MBA students. This issue has been brought to life with their opinions, highlights and experiences gained over the last year.

You can find out more about Henrik’s Business Mastery project and how he applied his academic learning to a real life business and Bettina’s reflections on the year spent on the Executive Programme in Dubai. Plus we also delve into the social life of the MBA students . From group work and away days to dinner events and after lecture drinks, they take full advantage of enjoying their time at Cass - look out for the photo gallery!

This newsletter truly reflects the student perspective of life at Cass Business School, and we want you as the reader to get involved. Position yourself as a successful business leader and join the debate on the challenges of leadership in the modern business world by leaving your comments.

I hope you have a wonderful summer and don't forget that if you would like to find out more about the MBA programmes, we have information sessions here at Cass and new online information sessions starting in October 2011.

Erica Hensens
MBA Programme Director

Reflecting on a year in Dubai

Dubai, September 2009: the 3rd cohort of the Cass EMBA in Dubai bustling together in the exclusive lounge at the 1st floor of the Dubai International Financial Centre’s building 2. All were looking rather dashing in formal attire, chatting attentively and politely to the person closest, happily unaware of the 18 months that lie ahead. 

Fast forward those 18 months, and meet the 3rd cohort - there at that 1st floor – a tight knit group of people from all walks of life, joking, discussing – no formal attire in sight (some even in shorts) and all proud, happy and very relaxed. Being accustomed to the uniqueness, quality and luxury of Dubai, Cass has not let anyone down. It has been a unique, personalized and very intense experience with grueling but inspiring lectures (forgetting QM, anyone?), performance of arts (economics coursework presentations, flooring everyone with laughter), competitions (remember who won Markstrat?) and enough laughter and fun to fill a much longer article than this one.

What 3rd cohort might not realize is that they are unique! Well, most cohorts are unique, but this is not any run of the mill cohort – close to 40% of the students are budding entrepreneurs with fascinating, exciting and potentially high impacting business ideas for this region! It might be a reflection of the Middle East – entrepreneurship has always been a natural, and mostly necessary, means to support families and the close community - it might be Cass’ emerging markets focus, the strategy teachings and the entrepreneurship and innovation focus, all supplying a framework for the students; or simply that this cohort has the right entrepreneurial DNA to build unique businesses! 

No doubt, that even if a few high profile entrepreneurial success stories have come out of this region, many more are needed to showcase that this region is full of well educated, incredibly focused, extremely creative and highly inspiring leaders. I bet you that you will meet some of the Cass Dubai, 3rd cohort in future breaking news stories of entrepreneurial success, and I will be forever proud to have been sitting next to them at Cass Business School!  

Bettina Frimann Larsen

An excellent finale to an eye-opening year

The MBA is an experience and adventure filled with high paced twists and turns. No sooner than completing the core programme and electives, it’s time for the final “Business Mastery Project”. 

This project is meant to draw on many elements of the course and tackle a real world business problem. With the help of a dedicated supervisor lecturing in strategy and quantitative methods, I’ve suddenly become a consultant for a start-up business!

I have designed my project around an international e-commerce company looking to gauge their market opportunity, refine their strategy, and secure venture capital funding. The deliverables will be a market feasibility study, a review of relevant strategic frameworks, and a business plan for future fundraising pitches to investors.

During my first meeting with my supervisor, ideas on strategic frameworks, entrepreneurial owners as people, international markets and trade-law, valuation, and sales and marketing are discussed openly and frankly. A straight to the gut and no holds barred dissection of the situation begins and the learnings from several MBA courses flash by. After an hour of what seems like mental gymnastics, the real issue begins to emerge and it’s time to meet the company for the first time.

The next day, entering an office mid-way through the daily conference call between the three founders, I’m instantly transported back in time to “work mode” as if the MBA year had not passed. The same sights and sounds, the same artefacts, the same coffee! But something feels very different inside. I feel calm, I feel in control, confident with my MBA toolkit at the ready. I’m looking forward to working with inspiring entrepreneurs and giving what I can from my MBA perspective in order to help their business succeed. I feel great!

We start the meeting, they are open for help, they want to grow the business but don’t know where the real value lies. Together we can crack it and after a lot of listening from my side, it becomes clear that they like my initial thoughts. This is going to be an excellent finale to an eye-opening year.

Henrik Karlberg

Motivation, addiction and Angry Birds

Motivation. If asking me about how I’m dealing with the work pressures that come with an Executive MBA, a psychologist might remind me that my motivation is driven by intrinsic and extrinsic factors. That is to say, my behaviour can be driven by my own unsatisfied needs and by my response to an external stimulus.

We all have needs that influence our behaviour. In his oft-cited theory, Maslow created a framework to describe how this might work in practice. Since needs are many, he categorised them from basic physiological needs (eg water) through to the more complex pinnacle of his hierarchy, self-actualisation (ie fulfilling potential). Maslow explained how somebody advances up to the next level of need only after the lower-level need is at least minimally satisfied. As such, unsatisfied needs influence/motivate behaviour, satisfied needs do not.

While I find it comfortably cogent, this theory has always seemed a little bit too neat to me. Enter Herzberg, who added a suitable layer of complication by blending in extrinsic factors. His findings revealed that while ‘motivators’ such as achievement, recognition and authority were more likely to cause satisfaction, distinct ‘hygiene factors’ such as administration, supervision and salary were more likely to cause dissatisfaction. Therefore, Herzberg showed that one must attend to both types of factors and not assume that an increase in satisfaction automatically leads to decrease in dissatisfaction.

Lo and behold, people are complex. So how does business all too often attempt to cut through this complexity? Money, of course, and in all its polite guises. (Dynamic performance management, anyone?!). As a budding b2b marketer, I learnt early in my career that to understand buyer behaviour, you had to consider whether a decision-maker might be rewarded for a particular behaviour that his/her company wants to perpetuate? Is an incentive silently at play?

To an employer, incentives may feel like a clean method of control, but again they are also complex. Studies show that if the person receives an incentive immediately, the behavioural effect of the reward is greater than if left for a while. (Think weekly sales commission vs annual bonus.) Furthermore, a repetitive action-reward combination can cause the action to become habit, whether required or not.

Eureka! So this must explain why I can be distracted during my daily commute by the seemingly pointless game that is Angry Birds, at a time when I am committed to completing an MBA for which there is plenty to read. Apparently so, according Griffiths, a professor of psychology at Nottingham Trent University.
“Addictions… are about constant rewards. I’ve never met anyone addicted to a bi-weekly national lottery, because there’s only two chances a week. On a slot machine, when you can gamble 30 times a minute, that’s very rewarding. On a game like Angry Birds, it’s every few seconds.”
“It’s also incredibly simple,” says Griffiths. “When you can pinpoint where you went wrong, this is called a near miss. It’s used all the time in terms of how scratch cards and slot machines are designed. When we fail to win, we create a reason in our mind why we didn’t. The losses effectively become near-wins and… the only way you can get rid of that frustration is to go back to the start and play again.”
I feel used. Where’s my iphone? I think most businesses are missing a trick.

Richard Samuel

Join the debate!

What is the single biggest leadership challenge facing the world today?

Leave your comments below...

Cass MBA - the social side

It’s not all long hours in the library! Take a sneak peek at the social side of Cass group events and students out and about in London.


New Online Information Sessions
The new engaging, interactive and convenient way to learn about the MBA programmes.
Join us for an hour from wherever you choose to and discover everything that you need to know about the MBA programmes at Cass Business School. 
The interactive presentation and Q&A with our MBA advisors, via instant chat is the ideal step towards helping you decide that the Cass MBA programme is the right choice for you. So log on from 6PM on 4 October to experience the Cass experience first hand.


Associate Dean goes to No.10

A leading light in the field of management research, Professor Veronica Hope-Hailey, Associate Dean, has the honour of being the only university academic invited to join the UK government’s new Employee Engagement Task Force. She recently joined British Prime Minister David Cameron at 10 Downing Street for the launch of this prestigious group, which will share good practice, generate debate and offer support organisations wanting to learn about engagement.

See more information on the Employee Engagement Task Force >>


Dubai - Guest Speaking Event on 5th June

In association with Cass Business School and Capital Club, one of Cass's strategy experts Dr Gianvito Lanzolla gave a personal view on the latest findings in Strategic Management Research on how to successfully conduct your company in uncertain times.

Held on Sunday 5th June 2011, the seminar explored whether corporate diversification is an answer
to uncertainty and shedded some light on its advantages, and limits. The seminar also briefly discussed how the strategy formulation process may be adjusted to deal with uncertainty.


Success Stories from Dubai

Three Business Mastery Projects (BMP) from the Executive MBA in Dubai Cohort 2008 were of such a high quality (and incidentally, achieved the highest marks awarded on the Dubai EMBA) that Prof. Rob Melville, Professor of Internal Auditing, recommended to the authors that they develop them as academic papers to be presented at appropriate conferences and for publication.

  • Kishore Jaichandani and Neeraj Teckchandani produced a BMP about potential links between governance and performance in the GCC. From this, an abstract was produced for a paper ‘Where Corporate Governance And Better Firm Performance Meet: Empirical Evidence of Public Listed Companies in the GCC Region’. This was submitted to the 9th Internal Auditing and Corporate Governance conference in London, April 2011 a peer reviewed event with an acceptance rate of only one in three. It was received very positively, and was awarded the conference prize of £500 for best paper. Competition included many experienced academics from internationally recognised universities.
  • Tim Travers produced a BMP about Shar’ia law in Islamic financial insitutions. This was developed into a paper that was put forward for the 1st International Conference on Organisational Governance, organised by the Centre for Research into Organisational Governance (CROG) at Leicester Business School, De Montfort University, Leicester, September 2011. This is a peer reviewed conference, and the organisers are very well known in the CSR and governance reseacrh community.
  • Thomas Hodgson and Damien Kriteman developed their BMP on corporate governance in sovereign wealth funds. Their paper based on the BMP ‘The Importance of Good Governance and Corporate Governance to the Government Investment Vehicles of the United Arab Emirates has also been accepted for the CROG event. Both theirs and Tim’s will have the opportunity to be published in specialist CSR journals as a result. 
Corporate governance and CSR are two of the key strategic issues for many very well known companies, and Islamic finance and governance is among the major areas for research, especially how it is developing in MENA, London and SE Asian locations. These three projects have made a vital contribution to the understanding of governance and show clearly that Cass' MBA students can compete as both extremely effective practitioners and as researchers of the highest quality.

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28 May 2011

The Cass MBA Perspective: Leadership

Welcome to the new edition of the Cass MBA Perspective eNewsletter. This edition takes a look at leadership with interesting discussions from both staff and students here at Cass Business School. Starting with my review of the annual student trip to Poland; or if you fancy some light viewing, David Simms presents a video on Leadership in business. From trips to Africa, Women in Business and the recent graduation in Dubai, this edition provides a real flavour of everything that happens at Cass. 

I hope you enjoy the leadership issue - and please feel free to comment on the articles. Don't forget that if you would like to find out more about the programme or to come and meet students and staff, we have information sessions over the next two months. Register for information session >>

Sionade Robinson
Full Time MBA course Director

27 May 2011

Preparing for the real world of business

As well marking the end of the core programme, this year’s trip to Poland represents a significant piece of work for students. Dr Sionade Robinson, Course Director for the Full Time MBA Programme, speaks about the annual trip to Warsaw and the opportunities it provides students.

To provide a little background to the trip - it’s an exchange trip for full-time students, hosted by WUTBS, Poland’s leading business school. We’ve developed close ties with them in the last few years. Like us, they have a strong reputation for developing the business leaders of tomorrow. The exchange also represents the end of our core training and gives students the chance apply some of what they’ve learnt to a real business consultancy challenge.

Students are therefore offering real consultancy to real organisations. We get students from both business schools working together in teams of five or six to consult on some very specific business challenges. This year, we worked with 15 different Polish companies ranging in size and sector. Among them, we had an airline looking to optimise its routes, and a chain of bakeries evaluating growth strategies. Other companies included a retail bank and Poland’s National Chamber of Commerce. Each organisation has a unique problem to solve and they’re looking to these teams to help.

Before this particular cohort arrived in Warsaw, students were briefed by a specialist from the IMF and by an expert in Eastern European economies to prepare them. We also ran a consulting skills workshop covering both technical and soft skills. And to help break the ice, we gave students from both schools the contact details of their team members and clients so they could introduce themselves ‘virtually’ before the programme started. Students also have Faculty support and an experienced interpreter shadowing them to make sure nothing gets lost in translation!

Each team spends a working week on-site, getting to grips with the issues and challenges their client faces. During that time, they’ll make two formal progress reports, before presenting their findings and recommendations to the client and Faculty on the last day. We combine this with client feedback to grade them as part of their core MBA.

It may seem quite intense, but it’s an acid test of how far students have come. That’s why it works so well. We want students to dovetail seamlessly into any team in any company and gain the insight they need to provide valuable commercial advice.

Overall, the experience usually helps develop students’ leadership skills. By encouraging students to work together as a team tends to bring out people’s individual leadership potential. People often feel differently after the programme. In fact, one of my students remarked that on her first day, she was asking one set of questions. On her last day, she was having a conversation on a totally different level and felt that was the leader coming out.

Leadership skills can launch a career

Working towards her MBA elective in private equity, Andia Chakava is always looking for opportunities to develop her career. When one such chance came along, she used some highly effective leadership techniques to ensure she didn’t miss out.

What was the opportunity exactly?
I’m particularly interested in Africa’s frontier markets – how investment can benefit the continent as well as investors. After recently managing a large fund in East Africa, I wanted to build on this experience. I’ve been keen to speak to Zain Latif, a Cass alumnus who’s held key posts at Merrill Lynch and Goldman Sachs, and now runs TLG Capital, a niche financier specialising in sub-Saharan Africa. My big chance came when I met him at a Cass talk on EU and Africa relations.

How did you make the most of this?
I needed to get his attention quickly, so I mentioned the fund I’d run, and that I’d seen him speak on ‘private equity for social returns’. I also told him how impressed I was! We then talked about an event he was holding in Uganda, involving key players in private equity. I knew I needed to be there – and he invited me.

You make it sound easy!
Well, my past work put me in a good position. But it was also my determination to make things happen – and the ability to ‘connect’ with people quickly. When I got to Uganda, I used my contacts and love of networking to speak to some important investors. I think these are all leadership skills that will help me in my career – and after Uganda, I’m certain it will be in private equity.

Men and women as leaders – gender psychology at play

Psychology is often the explanation behind patterns of behaviour, and this is true for gender differences in leadership. Here Dr Julie Verity describes an experiment that shows where some of these differences lie.

How did the experiment work?
A mixed group of men and women were asked to play in one of two games about making money. One was a ‘war scenario’, where the teams competed against each other to make the most money. In the other game – the ‘peace scenario’ – the aim was to make more money than other members in the same team. For each scenario, team members voted for their leader from two candidates with essentially the same credentials, the only difference being one was male and one female.

Which way did they vote?
In the war scenario – where the game was about pitting one team against others – most players (78%) wanted the man as their leader. And in the peace scenario, 93% voted for the woman.

And had they voted wisely?
Yes, these leaders turned out to be very effective in their respective scenarios. This is a clear illustration of our psychologies at work – how the genders are better suited to different leadership situations. Also, the voting showed when we expect each gender to perform the best.

Did we learn whether one gender makes better leaders than the other?
Well, when a hybrid version of the game was played, mixed groups selected a female leader! And other research indicates that women have a more flexible leadership style, making them better at dealing with complex situations where you might need to manage both collaboration and conflict at the same time. As the world becomes more complex, maybe the time for more women in leadership positions has come?

For more information on Dr Julie Verity’s research into women as leaders, please visit www.julieverity.co.uk/education/cass