1 Teaching Concept for “ITM – Integral Total Management”

1 Teaching Concept for “ITM – Integral Total Management”
The teaching concept for this MBA programme is built around the objective of providing students with more than just scientifically sound theoretical knowledge: the intention is to ensure that the course is also highly practical, specifically improving the employability of students.
This is the background to the development of the teaching concept for the “ITM – Integral Total Management” MBA programme. The concept is intended to avoid the pitfall of neglecting practical skills and knowledge transfer in favour of specialist academic knowledge during the MBA training.
Integrated management concepts are generally very highly valued in the field of business administration and also in further training courses in management skills. The University of St. Gallen, in particular, has taken a lead in this regard.1
However, FOM’s ITM concept is not so much a new, abstract management concept but should rather be seen as a pragmatic approach to the didactic anchoring of an integrated and transfer-based method of imparting expertise.
An enterprise’s functional areas include Marketing, Human Resource Management and Finances, among others, with numerous interactions occurring between the individual areas. So, regardless of size and orientation, each enterprise is confronted with a range of different client relationships. Marketing can be understood as examining the processes within the turnover of goods and services. Companies appoint a certain number of employees to implement these processes, hence the particular importance of Human Resource Management, which can be considered part of the wider field of Human Resources. To ensure financial stability, Finances obviously play a leading role in a company.
There are reciprocal relations between these different functional areas which have to be considered when running a company. For example, successfully dealing with client relations has a positive effect on finances. Finances affect a company’s staff and vice versa. These are just a few examples from a range of complex interactions.
Business decisions and measures intended to create certain effects in one area then have many effects of varying impact in other areas, too. For this reason, decisions specific to one area cannot be treated in isolation, rather they must be considered and assessed in light of their possible consequences for other areas within the company and in its external surroundings. “Networked” thinking is one term to describe an integrated understanding of the wide-ranging consequences of specific decisions. The more success a company has in recognising complex, dynamic relationships and accounting for the interactions between various circumstances, which themselves are changing ever more rapidly, the more success it will have when moving into a new sphere of activity. So it can be seen
1 See Bleicher, K. (2011): Das Konzept Integriertes Management: Visionen – Missionen – Programme, 8. Aufl., Campus-Verlag, Frankfurt/Main.
2 | Comparison with ITM Transfer Assessment
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that the MBA programme at FOM enhances its participants’ ability to develop transfer-based competencies that are vital for dealing with processes of adaptation.
Cross-modular approach to Integral Total Management at FOM
Regarding the research priorities and programme curriculum, the ITM concept is built around economic topics and the institutional and international circumstances which companies find themselves in. This orientation is of vital importance since small and medium-sized enterprises (SMEs) have a particular need for their managers to act in a generalist way and larger corporations are also increasingly organised into smaller, more flexible units.
2 Comparison with ITM Transfer Assessment
The ITM Transfer Assessment serves to determine the skills and knowledge acquired during the course of studies, including accompanying practical experience in the professional world. The ITM Transfer Assessment consists of an accompanying practical experience phase with four individual assessment tests. In the accompanying practical experience phase, students have a chance to apply the theory they have learnt in the modules to their professional activities. The four assessment tests document and examine the competencies acquired during the practical phases. These four tests comprise:
• two written questionnaires to measure skills and knowledge,
• the Theory-Practice Transfer, and
• an oral examination.2
2 See Master examination regulations for Business Administration programme at FOM Hochschule, 18.09.2006 (as per the edition from 01.03.2013), § 21 (4).
EthicsEthicsEthicsEthicsEntrepreneurial Decisiontaking into account of the effects on all functional areas
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3 Implementation of ITM – Integral Total Management
An ITM Checklist has been developed to help implement Integral Total Management during the assignments (written assessment tests).
3.1 The concept behind the ITM Checklist
The ITM Checklist is an instrument that helps put the Integral Total Management concept into practice, develop an integrated view and evaluate the assignment subject as part of a whole. The ITM Checklist should be drawn up for each assignment and becomes part of the grading.
Its basic idea is the interaction and interlinking of the individual specialist modules – from marketing to finance through to soft skills – which are necessary in order to apply the important general management.
In this way, the ITM Checklist reflects the generalist approach of this MBA programme. It is designed to empower students to later operate as managing directors in SMEs, family enterprises, as branch and plant managers, or entrepreneurs in other similarly highly competitive markets. A prerequisite for this is that when taking any operational decision, the manager has an understanding of all the effects and consequences of that decision, as primary effects in the intended area and as secondary and tertiary effects in all other areas of the company or organisation. This attitude is still relatively new in most management functions, since subject and function specialists generally only trained to think about their subject or function, are only held responsible for this, and their performance is only measured in terms of this. This leads to decisions being taken which appear very suitable in one individual area but prove to be less than ideal in the wider operational context.
This MBA programme intends to raise awareness among students of how to consider the effects of all decisions on other subject areas and functions, since as managers they will be jointly responsible for all, or at least several, areas. This appeal to overall responsibility alone is not sufficient: rehearsing and training this approach using practical examples is important. This is exactly the purpose served by the ITM Checklist.
3.2 Structure of the ITM Checklist
The structure of the ITM Checklist is based on the modules of the MBA programme and has been extended to include a reflection of business ethics. As it is applied, the specific issue of the assignment, not the module, needs to be the focus of the reflection.
It is an obligatory component of all written assessment tests in the MBA programme at FOM – in other words, all assignments. It comprises the following dimensions:
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Topics
The sine qua non of success
Economics
Which macroeconomic relevance is inherent in the topics?
Marketing
Which advantages and disadvantages arise out of the suggestions for marketing measures, external impact, and the company’s general productivity?
Which measures should be taken concerning internal and/ or external marketing?
Human Resource Management
Which personnel consequences (quantitative or qualitative) result from the suggestions?
Corporate Finance3
What criteria have to be considered when choosing appropriate terms of financing?
Which risks are existing and what kind of coverage is suggested?
How should the influence of external factors be evaluated?
Strategic Corporate Management
How is the topic’s strategic relevance to be evaluated, especially concerning the aspects of securing existence, competitive advantages, tying up resources, sustainability, and risks?
Business Law
Which legal fields are affected by the suggestions?
What has to be arranged in order to create legal security from the company’s point of view?
Soft Skills & Leadership Qualities
Which demands does the realization of the suggestions require of the responsible managers? What leadership behavior is expedient?
Research Methods
What sources of information should be practised in order to stay up to date in the field of topics?
Management Decision Making
Which decision criteria should be practised on the choice of alternatives?
Business Ethics
What relevant ethical question may arise in the given context?
Which management measures could be useful to address these potential challenges effectively and efficiently?
Dimensions of the ITM Checklist
These dimensions reflect all the major curriculum components of the programme. They demonstrate how the postgraduate study concept (= Management) is coordinated (= Total) and integrated (= Integral).
Students are required to demonstrate, for each dimension, what effects the applied topic for the respective assessment test has on these dimensions, how any negative consequences are taken into consideration and either avoided, or restricted, or made sufficiently manageable. Collectively, these aspects form a criterion for responsible management.
Given that numerous ITM Checklists have to be processed during the course of studies, this holistic approach is taught and practiced intensively, thus making it an instinctive part of graduates’ practical approach to their later professional career. This nurtures the ability of graduates to “automatically” adopt an approach of always looking beyond the confines of their particular area of work or function later in their professional role, and making optimum decisions that benefit their organisation as a whole.
3 Relates to the Financial Management and International Investment & Controlling module.
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3.3 Example of ITM Checklist implementation
The following example is designed to illustrate the subject. The comments and proposals listed below are to be seen as suggestions and do not represent the considerations expected of students. As a basic rule the ITM Checklist is to be compiled in the same language as that of the assignment.
Assignment:
• “Critical analysis of private equity investments from the perspective of investors and the target company!”
In a broader sense capital investment (e.g.: private equity, venture capital; equity in a broader sense) of an investor in an existing company
Consequences for the individual specialist modules:
The first module involved is Corporate Finance, which covers areas such as analysis of forms of financing and shareholding/investment, hedging options available to the equity investor, due diligence/company valuation.
In addition, various interfaces exist with other areas which support interaction and cross-linking with other subjects and required general management skills:
Topics
The sine qua non of success
Comments/Suggestions
Economics
Which macroeconomic relevance is inherent in the topics?
In the economics area, checks must be undertaken to determine if capital investment is right or makes sense in light of the prevailing general economic climate and/or individual economic structures of the respective country or company/organisation. Neoclassical models can also be considered.
Marketing
Which advantages and disadvantages arise out of the suggestions for marketing measures, external impact, and the company’s general productivity?
Which measures should be taken concerning internal and / or external marketing?
In the area of marketing, consequences arise, in particular in financial marketing (investor relations), including in the external presentation of the capital structure; for the marketing of products and services, increased opportunities arise where a company has greater financial resources at its disposal.
Human Resource Management
Which personnel consequences (quantitative or qualitative) result from the suggestions?
With regard to human resources, it is necessary to review which changes would result from potential new appointments to positions on the executive and supervisory boards, as these naturally involve sizeable equity stakes. These positions in turn bring effects to bear on subordinate Human Resource departments.
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Corporate Finance4
Which criteria should be considered as part of a cost-benefit analysis?
Which evaluation methods do you suggest using?
How should the economic efficiency of the proposal be rated?
How will implementation of the suggestions affect the balance sheet?
Among other things, analysis of forms of financing and participation, equity-provider hedging options, and corporate valuation/due diligence are involved.
Strategic Corporate Management
How is the topic’s strategic relevance to be evaluated, especially concerning the aspects of securing existence, competitive advantages, tying up resources, sustainability, and risks?
Strategic management involves, for example, assessing the extent to which equity investment increases the company’s competitive advantage or to what extent the investor actually fits the company’s profile.
Business Law
Which legal fields are affected by the suggestions?
What has to be arranged in order to create legal security from the company’s point of view?
In the area of business law, contractual modalities of equity stakes must be scrutinised, possible amendments to Articles of Association or statutes carried out, etc.
Soft Skills & Leadership Qualities
Which demands does the realisation of the suggestions require of the responsible managers?
What leadership behaviour is expedient?
Soft skills/ leadership are important here across all areas: the social skills of new staff/managers (executive & supervisory boards) as well as their management style can possibly affect the entire company via a new capital structure.
Research Methods
What sources of information should be used in order to stay up to date in the topic area?
In the research methods area, reviews (ABC analysis, portfolio models, etc.) have to be made of potentially suitable companies for the investment company to invest in. The key decision-making factor in an investment process is due diligence.
A company looking to invest capital should conduct extensive research ahead of investing, for example: Can the investment company provide the planned amounts to invest? Does the investment company possess the relevant knowledge of the sector to be invested in, etc.?
Management Decision Making
Which decision criteria should be practised on the choice of alternatives?
In management decision-making, the potential investor should – prior to acquiring an equity stake – thoroughly investigate all possible alternatives and determine the decision-making criteria that will arise from the equity investment for the company, for example entering/taking on new business segments (overlap here also to marketing and to strategic management) because additional financing options make this possible, for example.
4 Covers the Financial Management and International Investment & Controlling module.
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Business Ethics
What relevant ethical questions may arise in the given context?
Which management measures could be useful to address these potential challenges effectively and efficiently?
In business ethics, the targets and motives of the capital investment companies should be scrutinised. If these companies pursue short-term interests, will investment agreements be drawn up fairly, what are the consequences for existing/former shareholders, the management, the employees?