Sunday, March 30, 2008

Visiting Marlboro’s MBA

With the last "free" weekend of my spring break, I decided to head out to Brattleboro, VT and visit Marlboro's March Intensive. In my sus biz MBA application process, I had applied to the Marlboro Managing for Sustainability program and then decided to "stay the course" and attend BGI. There were a number of reasons for this decision...but I'll not dive into that now. In any case, the Program Director has been kind enough to keep a door open for me to visit and interact with students making up Marlboro's first cohort. They happened to be having an open house for prospective students as well, recruiting for the next class of world changers. In fact, the first person I introduced myself to had just driven from near Boston to attend the open house...we could have car-pooled, except that we did not know each other. (Image from Wikipedia).

The visit was quite pleasant. I was able to sit in the back of their Foundations of Sustainable Business class and listen to the students describe their business plan ideas. I was amazed to hear the similarities to business ideas that have been bandied about at BGI. I suppose it makes sense, since we are all in a sustainable business program. It would have been nice to have been more involved in the class, but it wasn't my class...I just wanted to jump into the fray, ask questions and contribute to the collective learning.

One of the professors talked to the visitors about their Organizational Management class, diving into what the course would be like and what it would cover. These are the issues we are attacked with our management course last fall and throughout our Leadership and Personal Development course work. How do we interact with people in the workplace to maintain mutual respect and dignity? How does our leadership capacity manifest itself in the experiences of those around us? What skills must be honed to successfully manage in this age of separation and rapid change? What must we learn about ourselves and our values before we are capable of being the leaders we want to be? It was refreshing to hear that Marlboro strives to take their students through these exercises. Teaching "leadership" is an element of the BGI curriculum that I believe sets it apart from traditional MBA programs.

I am looking forward to creating strong bonds between the sustainable MBA programs, and helping spread this pedagogy to the rest of the MBA world.

Friday, March 28, 2008

Reflections; BGI Term II

As I write this, I am seated on the Acela Express, Amtrak’s service covering the Northeast Corridor between Boston and Washington, DC. If there is one area of the country that is well suited to rail, it is the Northeast. It is dense, there are plenty of cities and towns to connect, and there is a history of rail service. I am reminded of the phenomenally efficient (at least in my eyes) train service I experienced in Europe fourteen years ago when I joined the legions of recent college graduates traipsing through the continent. Imagine if we had that same level of investment and competence here (image from Alaska in Pictures).

I am 80% through “spring break” (not the exciting kind depicted on MTV) and have started reflecting upon what I learned over the course of the second quarter at BGI. It amazes me that I have been able to digest the amount of information we have been asked (don't we want) to digest. I have not digested it all. An honest business school (or grad school) student will admit that the intent is not to digest it all, but to comprehend and master that which we want to learn. The institution's role is to assure that we have a solid understanding of the core elements of what any business school student would know. Wait a second…aren’t we learning about business in a different way? Well, yes we are, and we are expected to have what “mainstream” business school students have received (except for the network)?
Q2 classes:
  • Economics I: Neoclassical & Ecological Economics
  • Finance, Accounting, and The Triple Bottom Line II
  • Social Justice & Business (What?! Social Justice & Business, you must be joking…nope…it’s BGI..and it’s important.)
  • Leadership & Personal Development (LPD)
  • Action Learning Project (ALP)
Economics…we covered neoclassical economics and ecological/political economics; game theory, auctions, the tragedy of the commons, welfare theorems, and of course, the mac daddy…supply and demand on the microeconomic tip. On the political side of the coin…we hit the profit rate equation (HARD) and analyzed the inherent conflict between the owners of capital and the workers. The wage rate is a negative in the numerator (as I have mentioned before) which leads to the desire to minimize it while keeping all other variables the same. I’d say the highlight of the term was the reality fish market we created at the last Intensive. We were divided into buyers and sellers with different values. We went into the trading pit amidst chants of "sell fish", to sell our fish…and came up with a graph that pretty much reflected the classic upward sloping supply curve and downward sloping demand curve, with an equilibrium price of ~$5.49. There was a tax imposed upon the buyers and the sellers and we noted the change in the equilibrium price as well as the lost trading (deadweight loss). It was very compelling.
Then, we debated the inherent conflict between the owners of capital and the means of production and the workers, and learned that they main concern for these capitalists is to control the workforce. People (the workers) are not machines, they are not without a mind and a will, therefore they must be controlled. A more efficient technology that gave more control to workers is something that, in general, would not be supported, even if it increased profitability.
Social Justice. I am not sure where to begin. At the start of this class, I was immediately underwhelmed. There was technology issues with the classes online and the instructors did not seem to have a plan for integrating the ALP into the term. There are always two side to every story, so I am in no position to make a neutral assessment. At the end of the class, mu opinion was different. We looked through the Unilever/Oxfam case evaluating Unilever's economic impact in Malaysia, focusing on the affect on poverty. It was fascinating, especially when we were in a role playing portion of the class and Unilever's skin whitening product came up. Suffice it to say...there were some subdued fireworks (and later, for me, some deep questioning).
Finance. What can I say? It's the bedrock of business. Balance sheets, p&ls/income statements, cash flow...that's it. It is difficult for me to remember all that we covered in the class...though I do remember that I did not perform well on our exam. The whole contribution margin concept threw me for a loop. I believe it was the wording...when I think "margin", I think profit margin, that's it. Contribution margin brings in variable costs for a singular product (what does IT add to the bottom line?) and ignores fixed costs. I get it now...I think. Our final exam was a group analysis of Pacific Lumber's purchase in the mid-80's. It was an interesting exercise, allowing us to draw upon what we had learned from the start of the year...way back in October, to analyze the case. We all learned a bit more about each other, including writing styles and what lens we look through. I learned that I like to edit, or at least have strong opinions about style in assignments I (or a team I work with) submit.
On to the next a few days...

Saturday, March 08, 2008

Sharing Knowledge

(image from The third (and final) Intensive of my second term at BGI has come and gone. Reflecting upon the first six months of my BGI MBA experience is something akin to sorting through pictures from a long vacation; "I did this?" I don't remember doing (learning) that." "It has gone by so quickly." "That assignment's due when?"

I've developed a better grasp on Economics; with Pareto Efficient outcomes, the labor extraction curve, the fall-back wage, cost of job loss, unit labor costs, etc. becoming less foreign to my digital mind. There is power in the use of the correct words and phrases in econ; care must be taken in being succinct and meaningful. Extraneous content indicates muddled thinking. A fascinating part of our discussion over the weekend was what corporations have been doing over the past 30 years to increase the cost of job loss, an activity that makes it more difficult for workers to move, and easier for employers to keep them at the lowest wage possible and exert control. It certainly sounds like a conspiracy, and there are some statistics that support the fact that
real wages for most Americans have been falling, most especially the lowest earners, since 1974. We also conducted a real-life demonstration of supply and demand; finding a market equilibrium selling fish. Then the government imposed a tax on the sellers of fish and watched the fireworks leading to a change in the number of transactions, the equilibrium price, and a dead-weight loss.

Over the course of the weekend, we had the distinct privilege of welcoming the following activists, business professionals, and all-around amazing people to BGI:

Winona, in a very approachable way, talked to us about her history of activism including chaining to power plant gates, marching all over the country, and running for office. What came out of her words for me is that it takes action of many types and on many levels to create change. Winona said a few things that bear quoting:
  • A cultural monocrop is dangerous and unsustainable (think Brave New World & We)
  • How you live your life is your spirituality
Care to think it over?...moving on...

Roger helped walk us through the challenges facing Unitus in the microfinance space. We worked on an Accounting case due for the Intensive, and did not know that Roger would be joining us. We spent a few hours working on creating metrics that Unitus could use to measure the social impact/effectiveness of their work. I learned that some of the things I take for granted, basic access to information like income levels are not familiar to people all over the world. Information like whether a family had a tin roof was a key indicator of progress out of poverty. These conversations among people of such a varied background leads to phenomenal learning opportunities.

Adam Seitchik made the journey to Bainbridge from Boston to help us understand what has been happening in the SRI world and what role BGI students may have in it. He was very approachable, and though his explanations were on the lengthy side, they were quite informative. I learned about the First Affirmative Financial Network, something that may help me become an investor that integrates social issues into their portfolio. Oh, and he helped start a rousing game of Quarters that will surely live on in the memories of BGI alumni.
As a testament to the attention BGI and sustainability is receiving from others in higher education, three members of Babson College including members of the Center for Entrepreneurship spent part of the weekend with us. Part of me was excited to see a "mainstream" biz school sharing laughter and learning with us, and part of me was a bit protective of the BGI experience. An interesting reaction to observe in myself.

So thinking of getting a green MBA?
Here's a small taste of the wit and wisdom of one of BGI's econ professors, Yoram Bauman. I would contest is translation of rule #4...though I am not sure why. You too could experience this knowledge and levity by applying to BGI.

Wednesday, March 05, 2008

Pricing Carbon

Putting a Price on Carbon By Phil Davies (image from What is the difference between a cap & trade method for reducing emissions and a tax? Not much. Economically, it will do the same thing, an equilibrium price will be obtained and, as I am learning from economics at BGI, the tax burden will be borne by the party (buyers or sellers) least able to avoid them; the party least sensitive to price changes. Politically, the answer is different, and that is what the author delves into in some detail...seeking to determine the best way to achieve what will be the same outcome no matter what is done.

According to a recent article in Agence France-Presse,
US ready for 'binding' reductions of greenhouse gases.

I for one, do not believe "we" are. There is a pretty big caveat in the language used by the US representatives,
Daniel Price, assistant to President George W. Bush for International Economic Affairs and James Connaughton, chairman of the White House's Council on Environmental Quality. If the developing economies (China & India) are not part of the agreement, we'll take our carbon intensity and go home. Of course, it's not that simple. From the article:
But critics of the US position say that trying to force China and India into accepting binding commitments of greenhouse gases is neither realistic or fair.
"It isn't going to happen," said Stephan Singer, a climate change expert at the World Wildlife Fund.
He points to the fact that China's per capita output of greenhouse gases is far below either the United States, which has the highest levels in the world, or Europe.
"Why should they (China and India) do something when the United States has done nothing for the last eight years?", he said.
Good point. Prisoner's Dilemma anyone?

More recently, Point Carbon has announced that the Global 2008 carbon market expected up 56 percent. So, does this mean there may be a better financial impetus for the US to get in on this game? Are US firms that have made investments in low carbon technologies ready to make some money? Are we missing out?

Carbon trade should also rise in the United States, by many counts the world's largest greenhouse gas polluter, as it edges toward mandatory greenhouse markets.
Ten states in the U.S. Northeast will start regulating the main greenhouse gas carbon dioxide from power plants starting next year, but forward trade has already begun.
What will happen to electricity rates in the already expensive Northeast? Will the price of carbon help create additional efficiency initiatives at the commercial and personal level? This is the start of internalizing the externalities associated with carbon-based energy sources. What will the price signals create, in addition to market participant motivation. I can see the headlines now from the reactionaries, "Massive Job Loss Linked to CO2 Emissions Regulation; Leaders Advise Population to 'Stop Breathing'".