Coping with transition: from doctoral research to teaching and from corporate to entrepreneurial finance.
Stowe, Charles R.B. ; Stretcher, Robert
CASE DESCRIPTION
The primary subject matter for this case concerns the re-thinking
of teaching methods and strategies in shifting from a doctoral research
orientation to one of teaching emphasis, and from a typical business
school orientation in financial management and business strategy to a
more directed approach toward entrepreneurial finance. The case has a
difficulty level appropriate for an exercise for business school
professors faced with this particular challenge, as well as for PhD
graduates coming into an environment where innovative and deeper
pedagogical thought is necessary. The case is designed to be used in a
seminar setting and should take no more than one hour for a seminar
exercise, less if the case is available in advance for reading purposes.
CASE SYNOPSIS
Richard LeMont, a recent graduate of a Midwestern university with a
Ph.D degree in Finance with a minor in Strategy/Policy, is faced with
teaching a course in entrepreneurial finance at an AACSB-accredited
College of Business. His doctoral training, while preparing him to deal
with research and typical business school courses, has failed him where
the entrepreneurial course is concerned. The reader is tasked with
developing solutions to the problems highlighted by his first four weeks
of the course.
INSTRUCTORS' NOTES
Suggested Use
This case really combines two different issues. Richard is a
typical newly minted Ph.D whose enthusiasm for his topic meets the
reality that his students may not share his enthusiasm. He discovers
that this generation of 18-20 year olds has a different perspective on
college education.
Most see college as a degree with each course as a meal that can be
eaten quickly to allow them to devote time to go to work to pay for
college and their social life. The current generation has been empowered
regarding their education through the faculty evaluation system. In some
institutions where students learn that they can do significant damage to
a professor's reputation and career, there may exist an air of
extortion. At institutions where student evaluations are an
insignificant part of the formal teaching evaluation process, students
are aware that they have been described as "customers" and
often behave accordingly. Second, the case deals with the difference in
approaches between the typical financial management (corporate finance)
course and the entrepreneurial finance course. The two issues are
obviously intertwined, and the link created a dynamic situation useful
for review by professors and by doctoral students expecting to enter the
teaching profession.
This case may be used to explore the difference between pedagogy
and andragogy. College students aged between 18 and 21 demand more than
a repeat of high school. On the other hand, they lack the depth of life
and work experiences effective for adult learners. The challenge for
college professors is what teaching strategies they should use to bridge
adolescence and more experienced adults. This case offers an opportunity
to explore the problems of dealing with college students who are
resistant to learning by memorization but lack the experience that are
required to make a connection between the substance of what they are
learning with the application. Effective teaching at the college level
requires that professors use strategies to motivate students. Students
need to see value of the material and its application to the real world
even when they lack experiences to make a strong connection as to the
utility of what they are supposed to learn. This case offers some
strategies for professors to consider in helping students experience and
learn concurrently.
Within the context of finance, this case offers insight into the
substantive differences between the common or business core course in
corporate finance and a course in entrepreneurial finance. For a student
completing a finance degree who might take an entry level position in a
financial institution, the corporate finance course offers an
intellectual suitcase of finance skills that a student would encounter
in a large organization. Some finance students will obtain employment in
the marketing end of finance such as working as a stockbroker, or in
life insurance, pension or health insurance sales. Others may find entry
level positions in the treasury, controller or budgeting division of a
medium to large enterprise. The content of an entrepreneurial finance
course may be oriented toward an individual who will join either a
family-operated business or an entrepreneurial venture in its start up
or development phase. This individual will more likely not be employed
on a full time basis as a financial officer, but will find themselves in
a more generalized management position involving a broader range of
responsibilities. This case helps finance professors explore the
differences between a corporate finance course and an entrepreneurial
finance course including objectives, substantive tools, and examples
used to illustrate the use of financial formulas.
DISCUSSION QUESTIONS
1. What should Richard do with the results of the first exam? Among
the alternatives, p-please discuss the merits and shortfalls of the
following:
a. Should Richard simply ignore the results - pass out the grades
and continue on?
While perhaps tempting, Richard should not simply pass out the
grades with no comment and proceed onward with the course as though
there is nothing out of the ordinary. Such a tactic would probably
result in lots of complaints to his department chair.
b. Should Richard give a 40 point curve to get the average grade to
a 75?
However, simply granting a 40 point curve would be equivalent to
ignoring that there is a substantial gap between expectations and
student performance. Professors should debate intermediate steps of
acknowledging the gap and attempting to close it in a way that maintains
some academic integrity.
c. Should Richard offer points for students who take the first exam
and look up the correct answers citing their text?
Rather than lecturing on the solutions to each question, the
professor might want to consider announcing that students could add to
their scores by taking the exam home and looking up the answers, and by
writing a brief statement as to why they missed that particular
question. Their second open-book, open note attempt would be worth 100
points and their explanations of where they were confused might be worth
another 25 points for a total of 125 points. Taking the potential 125
points and the total score on their first exam and dividing by 2 would
give them their final first exam grade. This exercise might help them
make the connection between what they forgot and what they are supposed
to learn in the entrepreneurial class. The disadvantage to this strategy
is that Richard might have to alter his schedule of readings and future
exams.
d. Should Richard merely drop the first exam entirely and retest at
a later date?
This strategy might result in a repeat performance or worse it
might result in an attempt by some students to merely memorize the
correct answers without comprehending the material. Such a strategy
confirms in the students' minds that the professor is acknowledging
that the test or the professor were somehow deficient. The problem is
that that the students who need to most remedial review might be too
discouraged to face another exam. On the other hand if this were
accompanied by review sessions, instructor created handouts, then
students might respond more favorably. The problem with this approach is
that Richard might be accepting responsibility for the outcome instead
of having the students understand their role in creating a favorable learning outcome. A discussion of this strategy should lead into a
discussion of alternatives aimed at giving students an opportunity to
demonstrate their mastery of the subject.
e. Should Richard express his empathy toward his students but
continue on with the course with no grade adjustments and tell them that
the will do better on the next exam?
Given the level of student angst, this strategy might be
interpreted as showing indifference to student concerns. This suggestion
should provoke discussion on how professors can show empathy while
maintaining the academic integrity of the course and stimulate positive
student commitment to reading the book, doing homework and more actively
participating in class. This is a really tall order given Richard's
current experience. The fact that Richard conducted a re-examination of
his basic assumptions toward his students, the course and his
expectations is a positive step. However, his actions and communications
with students need to reflect his commitment to a positive outcome.
However, if Richard drops the first exam without making any other
changes, student frustration is likely to continue.
2. What actions should Richard take with respect to the material he
intended to present? Should he reduce his expectations and stretch out
the semester?
Clearly, continuing on with his lecture style would be a mistake.
Richard now understands that without some constructive feedback from his
class, he could well continue on lecturing and students would continue
their passivity. There is evidence to suggest that the students are not
reading their text or working problems. Richard might want to conduct
'workshops' in class where students would team up to solve a
home work problem in class. While this might slow down the pace
somewhat, Richard could encourage students to help each other in class.
Students working in small groups might actually ask more questions
during informal workshops than during lectures. Observing students
working on problems would give the professor an opportunity to identify
holes in their learning. Knowing that the students lack related
accounting and corporate finance text books, he might also consider
extracting a couple of pages from their accounting and finance textbooks
(in strict compliance with the fair use doctrine to avoid copyright
infringement). Another strategy would be to assign a graduate student to
summarize helpful review materials from their old textbooks. Giving
students handout materials from their old textbooks might help them see
the relevance of material they previously studied and how those concepts
apply to different circumstances (for example, financial analysis
applied to smaller firms versus larger ones). Giving students handouts
and using class time to allow them to do problems might encourage some
active learning. The workshops provide an excellent excuse to demand
that students at least bring their texts to school not to mention
possibly reading them! Another approach would be to invite a professor
who currently teachings accounting or the corporate finance course to
step in a for a brief review lecture of major terms or concepts. Then
Richard could pick up with how these concepts apply to small firms or
entrepreneurial ventures.
3. Given Richard's need to spend time on his research, should
he simply post the instructor's test questions so that students
could more easily prepare for the exams instead of changing his teaching
approach so that he would not have to rework his lectures?
While some professors use this tactic of posting exam questions and
answers, the word would probably get to the department chair who might
not appreciate this strategy. This strategy also fails to address an
obvious problem with the professor's lectures and the willingness
of the class to actively participate in the learning process.
4. Should Richard inform the class that they need to review the
basics of accounting, algebra, and finance on their own if they are
confused about these basic concepts?
Informing the class that they need to review the basics of
accounting, algebra and finance may well aggravate the situation. While
the class should have learned this material, they haven't and
telling them to review is only going to enlarge the gap between Richard
and his students. A better strategy is for Richard to acknowledge that
students may not have made the connection with prior material or that
the prior concepts are difficult to retain when they are not actively
working in accounting or finance. As previously suggested, Richard might
want to pass out review sheets, put the texts on reserve, offer
additional tutoring, or invite their former professor of finance or
accounting to provide a short session on key concepts repeated by the
entrepreneurial finance text. This would allow Richard to discuss the
concepts in the context of entrepreneurial finance and subtly show
students how courses are, in fact, integrated and related to each other.
5. What strategies should Richard take toward the substance of his
future lectures?
One suggestion worth exploring is whether Richard should develop a
list of questions to ask students at the beginning of the class that do
not require a knowledge of what is in the text, but that stimulates
discussion. For example, if the text gave an example of using
forecasting methods to compute AFN (additional funds needed) for a
particular industry, he might want to ask how many students are familiar
with that particular industry or one similar. Or, he might ask why a
company might bother with computing AFN to begin with. Or, he might ask
whether students in managing their own finances ever stop to work out a
monthly budget and whether the budget actually changes from month to
month. He may decide to use respond pad technology if he is using
PowerPoint presentations to engage students to respond to specific
questions to test whether the group is actually following along. Or he
may use quizzes (that do not count) and give an award to the student
with the highest quiz grade! That might stimulate more active feedback.
6. How much time should Richard devote to this course as opposed to
his research?
This question should lead to an interesting discussion of trade
offs. Most experienced professors have developed outlines and teaching
notes that make the repetition of the same course easier than when they
first prepped for it. On the other hand, students are quick to resent being read to or receiving information that is clearly dated. Prep time
does compete with research time and in most AACSB institutions, research
is the sword to die on, not teaching in spite of the so-called teaching
mission. It is well understood within higher education that job mobility
depends on having a solid publication record. Most institutions
recognize that during the first semester for inexperienced professors,
the organization, preparation, and administration of tests, papers, etc
is going to take time away from research. Ignoring the problem could be
catastrophic for Richard as most institutions are tuition-driven and
don't want to tenure a professor that cannot attract or at least
retain students. So, there is some utility in properly prepping a course
which includes selection and application of the right mix of teaching
strategies.
7. What lessons are there for Richard's department chair in
making teaching assignments for entrepreneurial finance?
Given the significant differences between corporate finance and
entrepreneurial finance which are highlighted in the case,
Richard's department chair should consider that the amount of
course preparation time might be quite demanding for a newly minted
Ph.D. While the financial concepts and quantitative methods presented in
an entrepreneurial course are not advanced, such a course requires some
experience or some substantial investigation of the application of these
analytic tools in a high growth context. Most Ph.D courses are focused
on larger enterprises and research and not on start up to mezzanine financings. Second, students that take entrepreneurial finance may not
necessarily be finance majors and therefore may not possess the
prerequisite knowledge possessed by finance majors. Nor will they
necessarily appreciate the rigor demanded by advanced finance courses.
Third, Richard's department chair should consider spending some
time in mentoring new Ph.Ds in what they may face in teaching. An
investment in time and effort to help inexperienced faculty understand
the challenges of teaching undergraduates can mitigate the time and
frustration that many researchers feel when plunged into a classroom.
Another benefit to mentoring at an early stage is avoiding the
administrative headache of dealing with scores of students who feel
disenfranchised from a professor. Had Richard not confronted student
frustration after the first examination, his chair would have probably
have had to deal with the crisis at the end of the course with a large
percentage of the class earning a failing grade. With enough student
dissatisfaction, enrollments in that particular professor's classes
would drop and even with sound research performance, a chair might be
faced with having to discharge a good researcher whose classes will not
fill.
8. What implications does this case have in teaching other
subjects?
Richard's dilemma is not unique to his particular subject
matter or course. As his brief conversation with an accounting professor
revealed, the large percentage of students who are working almost full
time while taking a full load of courses leaves them making
"rational" decisions concerning the extent of time they will
devote to the subject matter. The large percentage of first generation
college students may account for the student attitude that they are in
college for a degree and not for an education. Dr. Hernandez learned
that her students were deciding not to do certain homework because they
viewed it as "busy work" and could sacrifice 20% of their
course grade and still have the potential to pass the course. The
challenge for professors is to give students a different perspective or
rationale in making decisions about course loads and time commitments
for homework. For administrators, there is a need to reconcile the
messaging of: (1) we are here to support you, (2) oh, you better help us
retain students, (3) we need more students to justify your salaries, (4)
raise the bar, and (5) outcome assessment is coming so you better get
YOUR act together! Administrators are faced with conflicting demands for
excellence and retention. They are faced with conflicting demands for
teaching substance and skills that create outcomes that can be measured
in the workplace while retaining all students and managing faculty
expectations for students that are working to pay for their education.
Faculty orientation sessions need to address these conflicting
realities. Such orientation sessions should better prepare faculty for
reconciling competing goals and objectives. Richard and Nancy's
discovery of students' pragmatic attitude toward the use of their
time for homework versus other demands may suggest that faculty should
make a better argument to their students as to how homework and other
assignments such as reading relate to their objective of completing a
course. Selling students on the concept that the diploma is only a
"receipt" for what should be a bag of intellectual
"tools" and that learning skills and knowledge are what
actually give a degree its value and not the diploma itself. Faculty
should discuss the need to explain why certain homework assignments are
given and how students should balance coursework with other commitments.
The case suggests that pressures on administrators to produce new
student assessments tools outside of student grades will add to conflict
between students seeking degrees versus education and the pressure on
faculty to "raise the bar."
9. What implication does the case have for a dean in dealing with
faculty over student complaints?
The dean may have thought that a casual remark about student
complaints would be more supportive of Richard than formally calling him
in to talk about student complaints. However, it is more likely that his
casual remark may have only served to create a rift between the dean and
the professor. The dean's casual remark may have left Richard is
more uncertain as to where he stands with the dean.
As an alternative, the dean could have asked Richard to come see
him. The dean could then offer Richard some constructive suggestions. By
diplomatically asking Richard if he has had some issues with his
students and by offering some suggestions, the dean positions himself as
a mentor in support of Richard. Such as strategy is an example of
"servant" leadership. Richard would be learn that some
students have gone to the Dean, but that the Dean is on his side in
terms of helping him with the controversy. This strategy places the dean
as mentor. Some deans will not be comfortable in that role. An
alternative would be for the dean to arrange for a more senior faculty
member to join the conversation. By commiserating over student
performance and the difficulties of balancing student retention and
maintaining academic discipline with Richard, the dean and a senior
faculty member could share ideas on how to constructively deal with the
problem.
Deans have to deal with a variety of constituents and stakeholders but sending out mixed messages will not please any of them. A better
strategy for administration is to be honest about these conflicting
demands and seek faculty involvement and input into reconciling
competing pressures. Clearly, Richard did not have an accurate
understanding of the types of students, their competence level or their
motivations when he prepared his teaching strategy. Richard now needs
advice on how to "restructure" his course without abandoning
academic rigor and without flunking all his students.
On a broader scale, the issues of student recruiting, retention and
outcomes assessment must all be reconciled. A discussion of the content
of faculty orientations might produce suggestions on improving the
content to include information on student expectations, competence and
performance. A discussion of student orientation programs might result
in observations that students should be made aware of the pressures
facing institutions from stakeholders. Some students have the impression
that they are the "customer" and the faculty are the
"waiters." These students need to be informed that alumni,
donors and future corporate employers have an interest in making sure
that students make the effort necessary to achieve some degree of
competency. A discussion of the
role of faculty in motivating students and helping them see the
connection between their current reality and course material may be
helpful in creating a list of strategies that can be used by faculty to
reconcile competing demands on their institutions.
For future courses:
1. What steps can he take to improve his understanding of his
student's motivations and knowledge of accounting and finance?
Richard might want to consider the following:
a. To deal with students who feel that they know more than they do
and to get a better understanding of his current class, Richard should
consider developing a self-assessment instrument and an objective
assessment non-graded test. In fact, this case, taken from actual
experience resulted in the professor developing both a self-assessment
instrument and an objective examination of basic accounting and finance
concepts. The self-assessment was passed out during the first class and
the objective examination was given during the second class. Students
were informed that the purpose of the two instruments was twofold: to
give students an understanding of how accounting and corporate finance
are integrated and part of the entrepreneurial course, and to provide
students with the opportunity to evaluate their own understanding of
finance and then be confronted with the results of a 'review'
exam. Students were invited to bring accounting and finance textbooks
(which they did not own) and any notes from their previous classes
(which they did not have). The objective exam consisted of questions
contributed by the faculty who normally teach finance. To insure that
the questions reflected what was taught, finance faculty who normally
teach the corporate finance course graciously wrote questions that
designed to indicate whether a student understood basic financial
concepts. The students were provided both scores during the third class
along with a syllabus that was "tailored to reflect learning
realities." The results were bi-furcated. The finance majors tended
to have better skills with an average on the objective test of 60%,
non-majors tested miserably with the average on the objective test
scoring below 30%. Richard decided to create teams lead by the finance
majors who were responsible to see that each of their team members
understood how to work problems during in-class workshops. Students were
told to bring their texts to every class because all class work was
graded. These in class workshops and homework resulted in grades that
counted 20% of the course grade. To save on prep time, all homework was
exchanged and graded in class. Students exchanged papers for grading
purposes. The rules for homework permitted students to consult with each
other. Richard figured that sometimes students can communicate better
among themselves and would be more willing to seek help privately.
The subjective self-assessment survey confirmed that most of the
students were taking the course as an elective and due to the convenient
time than for the content. Knowing this, Richard used every lecture to
remind students how helpful the particular topic is even for those not
intending to start their own business. He realized that he had to sell
the value of the course in order to entice students to develop a genuine
interest in it.
2. What policies should Richard consider to better engage students
in the material?
As previously discussed, Richard might want to conduct in-class
workshops, conduct surveys, and to ask students about their experiences
in industries illustrated by the text. He also bought a jar of wrapped
candy and offered a candy to anyone who would ask a question about
material in the text. By requiring that students bring their text to the
class, Richard would ask students to read very short portions of it
related to his lecture. And, when he passed out workshop cases for
students to solve, he referred them to specific pages. Richard observed
that by showing how the text could be used to solve problems, he noticed
that students would mark their texts.
3. What strategies should Richard follow to enhance student
participation in class? Thanks to Richard's self-assessment survey,
he knew which students were working part time. This allowed him to draw
those students into conversation when he used the text's examples
of issues facing small business. Helping students draw a line between
what they are learning and applying them to their daily routine may be a
sound strategy for enhancing participation in class. Richard also
decided to inspect student notes three weeks into the semester but
before the first exam. That strategy helped students recognize that
merely copying what is on the white board is not enough. Richard
developed a cover sheet so that instead of writing individual comments
on the notes, he could check a box such as "--You do not cite the
examples I gave in class which may make it difficult for you to apply
the concepts to solving problems on future exams." or "--Your
notes are not dated so it is impossible for you to tell which days may
be missing." This feedback alerted students that notes should not
be confined to recording those concepts they don't understand, but
to making a thorough track of what was presented so that theoretically
the student could deliver a similar lecture. The review of notes was
announced early in the course and Richard continued to warn students
weekly that the note review was due on the third week of school. The
results were most gratifying. Students were encouraged to share notes
with each other. To facilitate student interaction, Richard asked
students if they wanted to be listed in a student directory which would
be password protected and posted on Blackboard where only classmates could access the in
Charles R. B. Stowe, Sam Houston State University
Robert Stretcher, Sam Houston State University