AgoraNews Issue 19, Spring 2011 by Durham University Business School

NEWS

agora

IN THIS ISSUE: INNOVATION AND TECHNOLOGICAL CHANGE IN US AND EUROPEAN EQUITY TRADING// MAPPING ORGANISATIONAL VIRTUE//ENTERPRISE INVESTMENT IN CHINA//GETTING THINGS DONE

“we are in an ‘arms race’ of technology… think of a runner turning up at the start line for a competitive marathon race and turning to their right to see that the competitor has a formula one car” see page 16

Alumni Magazine for Durham Business School

Spring 2011 Issue 19

Business School

The 25th Anniversary of the Durham MBA at Durham Business School, 03 to 05 June 2011 FRIDAY: The Durham Convention ENTREPRENEURSHIP: James Averdieck, Founder and MD of Gu Chocolate Puds

LEADERSHIP: Rona Cant, Arctic Explorer/Adventurer

BRAND MARKETING: Gavin Miller, CMI incorporating Edinburgh International Film Festival

THE ECONOMY: Adam Shaw, Award winning financial reporter and BBC presenter

In the evening, enjoy an insight into the world class beers of Durham Brewery, a local family-owned micro-brewery. There is no charge, but booking is essential.

SATURDAY: MBA Refresher Sessions MARKETING: Professor Amanda Broderick

FINANCE: Professor Bart Taub

MANAGING PEOPLE: Dr Peter Hamilton

LEADERSHIP: Professor Timothy Clark

ETHICS AND SUSTAINABILITY: Professor Geoff Moore

INNOVATION: Dr Pierpaolo Andriani

Afterwards, enjoy an evening of good food and entertainment at the Alumni Ball at Durham City’s newest hotel – The Radisson Blu. (Tickets £30, booking essential).

SUNDAY: A round of golf Join fellow alumni for a round of Golf at Mount Oswald Golf Club. For full details of how to sign up visit: www.agora.org.uk or email dbs.alumni@durham.ac.uk

CONTENTS IN THIS ISSUE... 4

Dean’s Welcome

Alumni – Update

I’d like to take this opportunity to wish a happy New Year to you all. Following successful re-accreditation by EQUIS in December, the School received some more good news in January when we learnt that DBS is positioned 55th in the world in the 2011 Financial Times Global MBA ranking. For more detail on that story visit our School news section. We hope that 2011 continues to bring good news and great developments for Durham Business School.

Winter congregation took place on Friday 14 January and we welcomed over 250 graduates and guests to a celebratory reception at DBS – a collage of photographs of the day’s events can be found on page 15. Many of you will be aware that Bill Bryson is stepping down as Chancellor later this year so this was one of the last opportunities to see him conferring degrees at the Congregation ceremony in Durham Cathedral. The University has set up a discussion on LinkedIn for alumni to suggest who the next Chancellor should be. To contribute to the discussion about Bill’s successor, please visit the ‘Durham University Alumni’ group on LinkedIn.

I look forward to seeing many of you at the forthcoming MBA’s 25th Anniversary Celebration Weekend. Dates and a full agenda are now confirmed. Events will include: refresher courses from current faculty in HR, Finance, Marketing, Leadership, Innovation and Ethics; guest lectures, and a chance to relax and be entertained at a gala ball, complete with Durham University’s Big Band. Faculty, past and present, will be joining us to celebrate our silver jubilee and we look forward to welcoming representatives from across the 25 years.

I would like to start by wishing all our alumni and supporters a happy, healthy and prosperous 2011. Something that I will always remember about the outgoing year is the series of fantastic student initiatives that raised money for charity through sporting and social activities. In December, the current full-time MBA cohort kicked off their Class Gift appeal with a Christmas boat cruise on the River Wear. Despite snow and freezing temperatures, more than £1000 was raised. The cohort is now planning a series of activities throughout 2011 raise sufficient funds to provide a scholarship for a future MBA student. Keep informed of their next event and how you can support them via Agoraweb and our facebook pages.

Finally, I would like to thank everyone for their support of the School throughout 2010, and I look forward to sharing many more successes with you in 2011.

Her research interests are in the areas of financial economics and macroeconomics.

We hope you will enjoy this latest edition of Agoranews, with its range of faculty and alumni contributions. Highlights in this issue include the profile of alumnus and High Commissioner, David Collins (page 14), who talks about the varied and exciting career that has taken him across five continents. We introduce social media and digital networks expert, Mariann Hardey, who recently joined the DBS faculty (page 11), and hear about recent Local Association activities around the globe (page 18). There is a wealth of research pieces that cover investment in China (page 6), issues on ethics in the modern workplace (page 8), innovation in equity trading (page 16), and what drives motivation (page 22).

Professor Rob Dixon, Dean

Alessandra Guariglia joined Durham Business School as Professor of Financial Economics in April 2009. She is Head of Department of Accounting & Finance and Head of the Department of Economics.

The effects of a high investment rate on the Chinese economy are, however, controversial. On the one hand, the high investment rate and dramatic investment-generated improvements in technology and productivity have been seen as the main driving forces behind China’s rapid economic growth over the last three decades. For instance, high investment brought about structural change and led to an enhancement in the efficiency of resource allocation: the fast accumulation of capacity induced a reallocation of labour from lowproductivity agriculture to highproductivity industry and service sectors. On the other hand, the investment boom has been considered a primary source of the country’s imbalances. There is concern that with an underdeveloped financial system, too much investment may create industrial overcapacity, generate inefficiency, and threaten profits and employment in China.

I am incredibly pleased to say that we now have more than 3000 alumni registered on our online community, Agoraweb. Upon registering, members receive an Agora membership card and access to a range of business journals and databases including EBSCO and Datamonitor 360. Also on the site are an international jobs board and recordings of recent guest lectures. If you have feedback or suggestions for the alumni association, wish to become a member, or check if you are already registered, please email me on a.l.sedgwick@durham.ac.uk. Alexandra Sedgwick Alumni Relations & Development Manager

DEAN S WE COME A UMN UPDA E

“It seems clear that the virtuous organisation has a good purpose and places the emphasis just on the excellence side of success-excellence.”

ORGANISATIONAL VIRTUE MAPPING

purpose than A. In terms of where the organisation was going (the merger having happened relatively recently), the interviewees thought it was moving in the right direction as far as purpose was concerned (the dotted arrow pointing vertically up from AB) but also moving in a more success-oriented direction (the horizontal dotted arrow) as the achievement of financial results became more pressing. Combine those two and it can be seen that the organisation was moving away from the virtuous position – at roughly 90° to where it should be going if it wanted to be virtuous.

In one sense it is a fairly easy task to map your own organisation onto a grid like this although, as so often, it is the process (and wide engagement in it) that is important as well as the results that emerge. But this should also lead to a discussion about which direction the organisation is headed in, whether that is the desired direction and, if not, what might be done about it. And all of that ought to be a lot more profound than discussions of (strategic) CSR.

SO HOW VIRTUOUS IS YOUR BUSINESS?

The business organisation in which I did my research had an interesting history – it had come about as a result of a merger of two separate organisations A and B. So in this case I was able to get a sense of the position of the two organisations before they merged. Hence A had the success-excellence balance about right but did not have such a good purpose as B. B, however, was clearly much more success oriented. The merger caused moderation on both dimensions, so AB was less success oriented than B but had a better

Our first paper ‘Investment and financing constraints in China: does working capital management make a difference?’ analyses the linkages between investment in fixed and working capital and financing constraints. We find that, in the presence of adverse cash flow shocks, those firms characterised by high working capital are able to adjust their working capital investment, keeping their fixed capital investment relatively high. We then show that those firms

help facilitate trading at close to the speed of light; co-location – the installation of some of the most powerful computer servers globally that are placed right next to the stock exchange to ensure that trades are conducted as quickly as possible. All of this comes integrated with sophisticated quantitative electronic trading decision making tools, referred to as alpha models (a component of the more commonly referenced black box), which seek profit extraction and risk reduction across milli, micro and nano second

Our last paper ‘Does China overinvest? Evidence from a panel of Chinese firms’ addresses the hotly-debated question of whether or not Chinese firms overinvest. We initially calculate measures of investment efficiency, which is typically negatively associated with overinvestment. Despite wide disparities across various ownership groups, industries and regions, we find that corporate investment in China has become increasingly efficient over time. However, based on direct measures of overinvestment that we subsequently calculate, we find evidence of overinvestment for all types of firms, even in the most efficient and most profitable private sector. We find that, in the private sector, overinvestment is caused by excess cash flow, while in the state sector it is attributable to the poor screening and monitoring of enterprises by banks. Our findings have important policy implications. Investment is typically viewed as a source of ‘boom-bust’ cycles. The Chinese economy faces the significant risk of its investment boom turning to bust, as a consequence

Our analysis will inform the current debate about the policy challenges stemming from China’s remarkably high investment. The Chinese government should curb imprudent investments by over-capitalized firms and reduce inefficiency in capital allocation and utilization. Resources could therefore be freed to boost social spending and private consumption.

What is your current role? Officially, my title is Lecturer in Marketing, but I would rather work on the ‘hidden’ aspects of the role that emphasise the positioning of digital technology and the organisation of social information in everyday life. What are the most challenging parts of your job? I find that the most challenging aspects of the job involve the perpetuation and momentum of academic thought into student knowledge. It is daunting how bright, savvy and engaged our students at Durham Business School are. As an academic you need to be prepared to make a fine-grained analysis of what is going on in the world around you; at cultural and social change, and, increasingly, the effect on consumer engagement, style and content. For me, these issues bubble to the surface as agenda for original research, activated by the transformation of research into a learning experience with students at Durham University. I constantly strive to respond to and fulfil their aspiration to participate in the many-to-many conversations that perhaps we as academics have traditionally enjoyed behind closed doors.

What do you want to achieve? Rather ambitiously I would like to achieve an open platform for a research and learning dialogue. This means working with and from the students up, to be able to apply the enhancement of their pool of intellectual capital into any learning agenda. If there is one thing that my time as a student at university provided it was connections. For the students who are privileged enough to attend Durham Business School, the relationships that they develop will be formative for the rest of their lives. A major achievement for me would be for those students to be able to look back at their time at Durham and realise that the support, encouragement and inspiration to achieve a professional position came about because of academics like me. What drives you? I once described myself as ‘ruthlessly ambitious’, what I meant was that I act upon and enjoy the independent capability of being a professional woman in a role that is both completely daunting and totally wonderful. It is this kind of challenge that gets me up early every day. What was the best career advice you were given? Never ask something of anyone before you have something that you can offer to them.

Trading was not always like this of course. Open-outcry trading ‘pits’ allowed human beings to engage in trading in centralised spaces (you can still see this in action on the Chicago Board Options Exchange (CBOE) amongst others); of course though, humans have many limitations and when it comes to neurological processing speed, they are some way behind the computer chip. Whilst the ‘Big Bang’ in London 1986 started the shift from human to electronic formats, recent legislation in the US (Reg NMS – National Market System, 2005) and in Europe (MiFID – Markets in Financial Instruments Directive, 2007) allowed an accelerated scenario to unfold. In Europe today, we have gone from national exchange monopolies to panEuropean competition (with a dose of transatlantic M&A thrown in). We have seen new technologically advanced pseudo exchanges called Multi-lateral trading facilities (MTFs) orchestrated as start-ups with sub 30 employees offering innovative technology, in some cases 10 times faster than the London Stock Exchange and, crucially, 10 times cheaper – the cost/differentiation nirvana we all know of from Porter. In fact the first MTF, called ‘Chi-X’, is now in the European top 3 venues in terms of market share, just three years after inception. In the case of the UK market, as far as breaking a 200 plus year old monopolistic market goes – I think most would agree that is a pretty strong achievement. We have ‘electronic dark pools’ where traders can hide orders away from others for protection and help ensure that their orders do not give away too much information to counterparts that would ultimately be detrimental to the price they pay or receive; we have ‘Smart Order Routing’ which are highly intelligent order handlers deciding where best to execute

a traders order, and of course we have ‘algorithms’ that decide when and how to execute. The US is no different, with nearly all of the above occurring in the US some two years or so before Europe. In the US right now we have over 30 markets to execute your stock order. To illustrate the point, the LSE now only controls ~50% of FTSE 100 trading and the New York Stock Exchange just ~30% of US trading. None of this competition could have been created without highly sophisticated electronic products in place to optimize the trading capabilities across the new markets. To put it simply, we are in an ‘arms race’ of technology. The best way to view these changes is to think of a runner turning up at the start line for a competitive marathon race and turning to their right to see that the competitor has a formula one car, complete with a highly drilled pit team and some of the brightest minds in science behind the car production. It might surprise you to know that there are still a good number of ‘runners’ out there, who swear by the latest trainers and sports drinks to give them the edge… Sometimes it can be a fine line between incremental and disruptive innovation and often there is a balance to be struck between the market demanding the product and the technologists pushing it. In equity trading, the shake up was, and still is, due to all of the above, but it was ultimately the legislative liberalisation of the secondary equity markets that provided the macro environment for competition to thrive. Where we go now is not far removed from what many would regard as science fiction. Aside from geographic expansion into Asia, India and South America, the prototype algorithms being tested in labs are at a new level. Mechanistic learning moving to genuine intelligence and enhanced quantitative based forecasting could well be at the next stage. Someone recently asked me how it was that I ended up in the business. With hindsight, I guess it was pretty obvious.

1988 1994 4,500 2,000 72.6% 27.4% 25 2011 55th 19

There have been

124

Deans/Directors over the past

DBS is placed

world in the Financial Times Global MBA ranking. There are currently for Durham University. In We have

3. NIGERIA AGORA

After attending a recruitment fair in the city and interviewing prospective Executive MBA students, Alexandra Sedgwick, Alumni Relations Manager, experienced some great Berlin hospitality. She met with MBA alumni Andy Philip and Andrew Tretow, GLC student Floriane Gramlich and prospective GLC student Tara Schollemann, and they enjoyed dinner in Alpenstueck restaurant on the east side of town.

2. JORDAN AGORA Jordanian alumni, along with Durham University staff; David Thornber (Durham University International Office) and his wife Lynn (DBS Marketing Team), gathered together at the Kempinski Hotel in Amman in October. Business School alumnus Dr Zu’bi Al-Zu’bi, Assistant Dean, Faculty of Business, University of Jordan, welcomed attendees from a range of disciplines including PhD, the Executive MA in Enterprise Management, and the University’s MA Arabic-English Translation programme.

• Markit Magazine, Issue 10: www.markit.com/en/about/magazine/i ssue-10/mm10-randd.page? • FIX Global, Vol 3, Q4 2010: fixglobal.com/pdfs/201012/1012_14.pdf

Directors of the Distance Learning MBA Programme. Alan Jessop has had

stints at FT Programme Director.

BOOK REVIEW

The Nigerian Local Association get-together took place at Goodies restaurant, Victoria Island, Lagos. The group described it as a wonderful opportunity for members who had studied at Durham during the past few years to meet together as professionals. Highlights included the welcome address by the group coordinator Afolabi Obilade, who talked about the need for members to come together frequently, not only for School events but also to engage in local dialogue and business forums. The group members demonstrated that they are true ambassadors by inviting along two distance learning students, who took the opportunity to tap into the experience of the Agora Local Association members.

4. INDIA AGORA During a recent trip to India, DBS Career Development Manager, Marcia Hoynes and Alumni Relations Manager, Alexandra Sedgwick met with alumni in Hyderabad, Mumbai and Delhi. The main event in Delhi saw alumni gather for a skills session on Emotional Intelligence followed by a guest lecture from MBA alumnus Sushil Prakash. The evening reception at the Jaypee Vasant Hotel was thoroughly enjoyed by everyone.

Just a decade ago alumnus Stuart Baden Powell completed a MA in Management at Durham Business School. He now heads up European Electronic Trading Strategy at Royal Bank of Canada Capital Markets.

NG H NGS DONE

Motivation also has conscious and non-conscious aspects. Much of what adults do is the product more of habit than conscious thought. The daily process of going to work for many is literally unmemorable. Regular work patterns take on an unthinking rhythm and routine. It is perhaps only when we are confronted by an outside questioner, or circumstances change, that we ask ourselves ‘why’ we go to work or why we chose this particular work. Maybe this is where the big theories of motivation, those that point to the importance of our needs for existence, friendship or personal development, become relevant. Perhaps the money or the friends or the challenge are our ‘reasons’ for going to work. But are they our reasons for working hard (or not) when we get there? This again makes the point that it is not very helpful to talk of someone being motivated in some absolute sense but more useful to think in terms of how strong someone’s motivation is towards a particular activity at a particular time.

This specific motivation can come from a number of sources, those which are within ourselves, or intrinsic motivation, and those outside of ourselves, or extrinsic motivation. In broad terms this mirrors the difference between doing something because you want to do it and doing something because somebody else wants you to do it. In most organisations, the accent is on the latter. Hence it is no surprise that it is extrinsic motivators which have typically been the centre of managerial attention. Motivation theories which emphasise the importance of incentives and subsequent rewards, both typically in monetary form, and their impact on the sort of behaviour that is desired by management naturally have featured strongly in management thinking. Yet, we know from our own experience plus the research of writers such as Deci & Ryan and even Maslow with his emphasis on self actualisation and his pioneering support of positive psychology, that when people do what

Q. What do you do to unwind? A. I still play a bit of tennis; golf I find very frustrating! I tend to read a lot of biography and military history, and I am an amateur genealogist.

Here, we share a few highlights of the day.

Q. Where do you envisage your career might take you in the future? A. I am close to the end of my diplomatic career (I left Durham in 1979!). I would like to teach in the future or perhaps work for an international charitable organisation, if any would have me. Q. If you had one piece of career advice for Durham graduates starting out what would it be? A. In terms of advice to graduates, I would suggest that one should be bold in career choice and opportunity. Look for a challenge, perhaps in a difficult location. Define broadly what you hope to achieve in the medium term and strive for it based on hard work, integrity and imagination – you need to separate yourself from the herd a bit. But, above all, try to have some fun in what you do.

A UMN Q&A GRADUA ON

(Published by Profile Books 2001, ISDN 0385499841)

Colin Ashurst is a Senior Teaching Fellow in MIS and is Director of the Full-Time MA Programme at Durham Business School.

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My research and teaching is about realizing the strategic potential of information technology. Essentially that’s about IT-enabled business change. In many cases, IT is an enabler of business innovation. This means that, when we approach many investments in IT within organisations, we need to consider how we are going to encourage and enable innovation – which brings me to this book… The Art of Innovation by Tom Kelley provides ‘lessons in creativity from IDEO’ America’s leading design firm. Anyone who has been in one of my classes will probably have seen the Nightline video about IDEO – it shows a team working to make a new supermarket shopping trolley in a week. The book uses the story in the video as one of a number of examples and sets out specific practices that contribute to innovation at IDEO. Although the book was published in 2001 and I’ve been using the video for years, I only read the book for the first time this year. Since then, in part through Amazon, I’ve been aware of a flood of books and articles about innovation, creativity and design (see Further Reading).

I became interested in IDEO because they provide a great example of an agile project process and show, for example, that agile thinking is not just about technical stuff, it’s a much broader approach. I did a talk recently on ‘an agile way of life’ to illustrate this. More recently I’ve realized that you can look at this in an entirely different way – probably more as IDEO themselves see it. I’m now looking at what it is that’s being designed and the issues of innovation and design rather than just how you get there, the project process itself. For example, one major insight is that the classic requirements-gathering process of going out to ask users what they want is seriously flawed. If innovation is the goal, they are unlikely to know the answer. The approach put forward by IDEO is that you need to get insights into the problematic situation and then the design process is about creative ways of finding opportunities for improvements. It seems to work. ‘Design thinking’ as set out by IDEO has moved from product design to service design and customer experience design. They are also thinking about how to create an organisational environment that enables innovation.

COMPETITION For your chance to win a copy of the book visit: www.agora.org.uk/agoranews, follow the competition links and answer this question: Who was the lead designer of the iPod? Closing date: 29 April 2011.

Q. What would you say has been the most satisfying aspect of your career so far? A. Career satisfaction can be measured in many ways. What I have enjoyed about a diplomatic career is the opportunity to be assigned to different regions of the world, in my case the Americas, Europe, Asia and now Africa. While the work may be a variation on the theme, each locale offers different challenges. I would be lying if I did not say that being the official representative of one’s country overseas is deeply satisfying.

Business School graduates included individuals from across many programmes, including PhD, Full-time and Distance Learning MBA, MA and MSc.

The Art of Innovation by Tom Kelley

Alongside this challenging and satisfying job, Stuart also enjoys contributing to various trading publications. Here he provides an insight into the technological advances that have transformed operations for investment banks over the past twenty years. 3

Presided over by University Chancellor Bill Bryson, they were a unique celebration for students and for their friends and families, many of whom were visiting Durham for the first time from around the world.

CLASS NOTES

BARRY TUCKWOOD MBA TUTOR DISTANCE LEARNING SINCE 1994 I have had a few successes over the past couple of years. In October 2009 I had a short paper on Project Success published by The Evaluation Centre in the UK, drawing on a wide range of experience and research. In May 2010 I had a paper published under the general heading of sustainability for an international geotechnical conference. The latter was based on material drawn from experience going back to 1976, and requiring a lot of research with people I had previously worked with (many of whom I had not seen for 20 years). Their co-operation, which was vital to the paper, was freely and enthusiastically given, demonstrating the importance of all networks. In December I joined the International Management Board of the Association of MBAs (www.mbaworld.com) having been elected for a three year term. I expect to learn from the experience of being a board member, especially in understanding more of the international aspects of the Association’s work in accrediting MBA and DBA courses, and from their relationships with business schools and employers.

For those of us involved in projects of any sort, in the creative area, in IT and change or other aspects of the organisation, this ‘design thinking’ is important. I think there will be major changes in how we approach ‘IT projects’ as we learn to take these ideas into account. The Art of Innovation is not the last word on design. It does provide some inspiring examples and some specific practices that you could explore to start to develop a more innovative approach to IT and projects in other areas. Further Reading Change by Design by Tim Brown (2009) Harper Business The Design of Business by Roger Martin (2009) Harvard Business Press The Ten Faces of Innovation by Tom Kelley (2006) Profile Books Also articles via EBSCO from Agoranet (www.agora.org.uk) include: Brown, Tim (2008) Design Thinking. Harvard Business Review, Jun 2008, Vol. 86 Issue 6, p84-92 Catmull, Ed (2008) How Pixar Fosters Collective Creativity. Harvard Business Review, Sep2008, Vol. 86 Issue 9, p64-72 Coyne, Kevin P.; Clifford, Patricia Gorman; Dye, Renée. (2007) Breakthrough Thinking from Inside the Box. Harvard Business Review, Dec 2007, Vol. 85 Issue 12, p70-78

BRAD ATKINSON DBA 2002-06 Dr Brad Atkinson was recently appointed Chief of Cost Analysis & Evaluation within the Office of the Chief Information Officer of the TRICARE Management Activity, a component of the Military Health System (MHS) in Washington, DC. The MHS is a global medical network within the Department of Defense that provides cutting-edge health care to all US military personnel worldwide. Equipped with 59 hospitals, 364 health clinics and a $50 billion budget, the MHS delivers the highest quality health care in the world to a beneficiary population of 9.6 million service members, veterans, and family members. Brad was a member of DBS Doctor of Business Administration Cohort 1. His thesis examined the role of innovation in the performance of US hospitals and he received his degree in Durham in January 2007. He resides in Bethesda, Maryland USA.

SAMIR TAGHIYEV FULL-TIME MBA 2009-10 Originally from Azerbaijan, I relocated to Saudi Arabia last September to begin working with the Islamic Corporation for the Development of Private sector (ICD) as a regional Manager for CIS countries in Jeddah, Saudi Arabia. ICD is a private development arm of the Islamic Development Bank Group. I shall soon be on the move again and based in one of the former Soviet countries on permanent basis. GAJENDRA BERHADE FULL-TIME MBA 2009-10 My MBA Business Project with Eden Farm concerned developing a 5 year growth strategy and during the project I identified improvement opportunities in the inventory management system for the organisation. After considering my proposal the company offered me another project on developing a better inventory management system and forecasting model which also involved aligning functional KPI’s with the strategic plan. I came from a manufacturing background before working with Eden Farm (wholesale frozen food distribution) so this was a great learning experience and a good opportunity to use the knowledge and experience gained during my MBA.

BHARTENDU NARERA FULL-TIME MBA 2009-10 Within two months of completing my studies, I was offered the role of Deputy Director, Logistics and Business Process Optimization with Samsonite South Asia, working out of Mumbai, India. Prior to this I had completed an interesting Logistics Business Project with Starbucks UK and Ireland, which set the tone for my new role. Making a functional shift from HR to Operations and from manufacturing to retail is a real achievement for me and one of the major drivers for my taking up a fulltime MBA programme. After 13 years of general management experience with the Indian Army and three years of HR experience with a Power MNC I am very excited about this challenging role. Samsonite’s tagline- ‘Life is a journey’- makes an interesting statement on my career direction too! DAVID ELLIS BA SPANISH 1973-77 FOUNDER OF THE FD ELLIS MBA SCHOLARSHIP AT DBS I recently joined FTI as managing director in their Economic Consulting practice, and I am based in the London office. Prior to this, I was a Director with Navigant Consulting and an Associate Director with NERA Economic Consulting in Washington DC and London. Previously I was a finance professor at Babson College and Texas A&M University. During my

ten years in consulting I have given written and oral evidence in cases involving derivatives and structured finance on over 25 occasions in the High Court, in US Federal and State courts, in international arbitrations, the New Zealand High Court, the World Trade Organisation and before securities arbitration panels. MARTIN IVANEK MA MANAGEMENT STUDIES FULL-TIME 2009-10 Just after finishing my thesis I started my internship at A.T. Kearney’s Prague office. I was lucky enough to be assigned to an interesting project in which I could show my qualities and skills (improved at Durham), which in the end earned me the full-time position of Business Analyst. Now I am looking forward to other interesting projects, lots of travelling and further development of my expertise as a management consultant. And finally, I just have to mention how lovely it was to see all my friends at the Congregation ceremony (and afterwards) and to experience the great atmosphere of the town again! Best of luck to all of you, guys!

GARY BISHOP CURRENT GLOBAL MBA STUDENT My charity, Justlife (www.justlife.org.uk), is due to open its first Health & Enterprise Centre in March this year and I am currently on target to complete my MBA in June. Without a doubt, winning the 2008 DBS/Independent MBA Scholarship has enabled us to achieve a great deal more than we would have thought possible in such a short space of time. JESSICA XIANG-FISCHER FT MBA 1998-99 My company, SMART AND JOY, was established in 2002 and is based in France. Working with my sister, who is based in Guangzhou, we import and export fashion ladies’ clothing to clients worldwide. Our products are designed in France and developed in China. We are currently setting up a fashion school in Guangzhou, the first of its kind there.

1 Barry Tuckwood 2. Brad Atkinson 3. David Ellis 4. Martin Ivanek 5. Gary Bishop

OCA ASSOC A ON NEWS BOOK RE EW

Because motivation is about how much effort we put in to our activities, our motivation at any particular time will depend both on our total available store of mental and physical energy and on how we focus it. Some individuals, like Tigger (the fictional tiger-like character originally introduced in A. A. Milne’s book The House at Pooh Corner), seem to have boundless energy to devote to almost all their activities. Yet even they are more motivated towards some tasks than others. The rest of us, with a less bountiful store, are more noticeably selective in where we direct our efforts.

Q. Can you describe your typical day? A. Days are full, starting with a meeting with senior managers in the embassy. There may be some trouble shooting regarding a consular case. There will be visitors to meet in the office; I may have one or two outcalls, either on government ministers or other senior contacts. Socially I may either give or be invited to a business lunch and in the evening there could be a national day reception or a dinner. Given the time difference here, the end of my day often includes a telephone call with Ottawa.

Directors of the Part-time/Executive

1. GERMAN AGORA

• Journal of Trading, Winter 2010, Vol 5(1): www.iijournals.com/toc/jot/5/1

Agora’s global network

For more in depth insight into electronic trading have a look at some of Stuart’s recent pieces below:

in the

Durham MBAs work

2011 MARKS HE 25 H ANN ERSAR O HE DURHAM MBA

local association news

Q. How do you feel your Durham degree prepared you for your current role? A. The bulk of my diplomatic career has been spent as a trade commissioner so the commercial orientation of the MBA (MSc in my day) was useful training to ensure I was on the same wave length as my clients from the private sector. As an ambassador, any form of advanced education is useful for stretching the brain cells and being mentally alert.

DBS entered the Financial Times Global MBA ranking.

Directors of the Full-time MBA Programme,

MBA Programme,

2002

female.

years: Rob Dixon, Tony Antoniou,

Tony Cockerill, John Marshall and John Machin. In

R UE

David studied the MSc programme in 1978-79 (now known as the Durham MBA). Soon afterwards he went abroad with the Canadian Diplomatic Service and is currently High Commissioner to Kenya, Uganda and Rwanda; Ambassador to Somalia, Eritrea and Burundi; and Permanent Representative of Canada to the UN Organisations in Nairobi. This is his fourth ‘head of mission’ job, having served previously in Romania, Pakistan and Malaysia.

students

male,

We can then map this on a simple grid, as shown below – and this uses the data from the research I’ve done to illustrate how it works in practice.

January saw the annual Durham University Winter Congregation ceremonies in Durham Cathedral.

Durham alumnus David Collins talks about life as the Canadian High Commissioner in Nairobi, Kenya.

student were Global/Distance

countries.

The second dimension is to do with excellence and success. The idea is this. It is possible to ask a business, through its managers, what it means to be an excellent x, y or z type of

business. Managers seem to have no difficulty talking about the excellence of their products, customer service, the way they treat their staff, about being socially and environmentally responsible and so on. It is also possible to ask how the business measures success. This leads to another list, which is likely to be financially oriented but also to have other measures like customer satisfaction that feed in to success. Then I’ve asked the managers to score where the business is now on excellence versus success out of 10 (so 8-2, 5-5, 3-7 would all be possible scores but 7-5 wouldn’t). I’ve also asked them where the organisation has been in the past (to get the time dimension), and what they think the ideal score for any business is.

GRADUATION

Q&A

. AMBA accredits DBS’s full,

. More than

MAPP NG ORGAN SA ONA

on precisely this point. It suggests that the ends, or purpose, are never about shareholder value or, more generally, success, but are always about the contribution a business makes to society. So the question that ought to be going on inside a business (and on which we could form some kind of judgment even if not easily a quantitative one) is this: to what extent do the goods and/or services that the business produces contribute to the overriding good of the community? This is obviously challenging for tobacco companies, armaments manufacturers and so on (some of which, of course, do rather well in CSR terms). But even for other businesses these are serious and significant questions which ought to demand Board time on a regular basis.

full-time MBA launched – evolved from the MSc in Management Studies. Durham

Learners, they represented

C ASS NO ES

The shape of things to come

Getting things done

This is because conventional corporate governance and the kind of CSR that goes with it – shareholder-oriented corporate governance – assumes that this kind of debate is already decided. The ends of business are already given and it’s all about shareholder value. But the way of thinking about business that I am advocating raises questions

have completed the Durham MBA. More than

What are you currently working on at Durham Business School? I have several research agenda that I am working on. My leading project for 2011 will be a prospective commercial collaboration, researching digital consumer content in relation to real time broadcast television. I am hoping that there will be an opportunity to enjoy an innovative and creative research design, and that this will add to the learning culture for the students at Durham Business School. There is no greater compliment than when the application of research concepts are understood, anticipated and used amongst the upcoming professional community.

TWO DIMENSIONS FOR ORGANISATIONAL VIRTUE

FOR FURTHER INFORMATION

part-time and distance learning programmes in

Geoff Moore is Professor of Business Ethics and Deputy Dean (Learning & Teaching). His research interests lie particularly in the application of virtue ethics to business organisations. He has published widely on this and other aspects of Business Ethics/Corporate Social Responsibility and sits on the Editorial Boards of the Journal of Business Ethics, Business Ethics Quarterly and Business Ethics: a European Review.

The first dimension of organisational virtue is do with the purpose of the organisation. Why are we here? What difference do our goods or services really make in contributing to a society that is a better place to live? I am not aware that these kinds of discussion take place with any regularity (or at all?) within corporate boardrooms. Nor does the conventional approach to CSR put such issues on the agenda because CSR has become increasingly a strategic matter – aligning the CSR strategy with corporate strategy so that it makes its contribution to the bottom line.

China has been an engine of global economic growth, contributing on average one-quarter of the annual growth rate of the world economy since 1978. Reinforcing the resilience of the Chinese economy is of importance for the promotion of global economic development and world poverty reduction, especially in the face of the recent global economic slowdown. Hence, a thorough understanding of the key growth driving force, capital accumulation, is of serious significance not only for China, but also for the rest of the world.

N CH NA

1986

NNO A ON AND ECHNO OG CA CHANGE N US AND EUROPEAN EQU RAD NG

Motivation is one part of why people’s performance varies – the other parts include skill, ability, equipment and other people. Because these factors interact, it doesn’t always follow that low motivation necessarily leads to poor performance: the very skilled may be able to produce good results even when not putting much effort in, or maybe machines do most of the work. Similarly there is no guarantee that high motivation leads to high performance, though this is often the case.

I will illustrate this with a practical and real-life example based on some of my research, although I shall not name the organisation to preserve its confidentiality.

Motivation is about choice and effort. It’s about why we choose some activities rather than others and why we put different amounts of effort into different activities or into the same activities on different occasions.

I want to suggest that there are two dimensions along which we can make a judgement about organisational virtue and that we can make some sort of assessment of where any organisation is on those two dimensions, and do it over time so that we then have a map. I want to suggest that we can then see not only where we would like the organisation to move to if it is to become ‘better’ (which does not necessarily mean more successful in conventional terms), but also how it might get there.

For more faculty working papers and supplementary reading on investment in China by Alessandra, please visit www.dur.ac.uk/dbs/faculty/working-papers

Business School launches MBA by distance learning in

Computational technology has entered nearly every facet of life over recent years, and cash equity trading is no different. In fact, the changes in this part of finance incorporate some of the most sophisticated computational programmes in the world. In conjunction with existing quantitative and ‘voice’ traders, the industry produces products such as modified adaptive algorithms which respond to differing scenarios and learn as they execute trades in the real trading world; dark fibre networks – ultra fast dedicated cabling lines that

growth weighs against both effects for all types of firms, with a larger impact for firms in the private and foreign sectors.

Mariann is a social media professional and academic. She is the BBC North East commentator for social media and digital networks. She read literature at the University of Sussex and later undertook a research MA followed by a PhD at the University of York. In her work Mariann seeks to identify and understand how real social relationships are mediated through digital social networks and Web 2.0 applications. Mariann is, therefore, a member of a new generation of academics and researchers who have not only grown up digital with technology, but are pushing new research boundaries and ‘thinking futures’ through them.

timeframes. As a result, the electronic trading industry of today employs significant numbers of students of maths, engineering, decision sciences and other quantitative masters and PhD students.

At some point in our adult lives many of us choose to look at, or invest in, stocks and shares, an ISA or a pension for example. For others, trading cash equities is a day-to-day job, and some of us both invest and trade.

Our second paper ‘Negative investment in China: financing constraints and restructuring versus growth’ attempts to explain why despite high aggregate investment and remarkable economic growth, negative net investment is commonly found at the microeconomic level. We test three hypotheses to explain the existence and extent of negative investment in each ownership group: what we term the efficiency (or restructuring) hypothesis, the (lack of) financing hypothesis, and the (slow) growth hypothesis. We find that negative investment by state-owned firms can be explained mainly by inefficiency: owing to over-investment or mis-investment in the past, these firms have had to restructure and to get rid of obsolete capital in the face of increasing competition and hardening budgets. The financing explanation holds for private firms, which have had to divest in order to raise capital. However, rapid economic

EN ERPR SE N ES MEN

You can email Mariann at: e.mariann.hardey@durham.ac.uk

Innovation and Technological Change in US and European Equity Trading

In this article I would like to suggest that we can usefully get away from discussions of Corporate Social Responsibility (CSR) and focus instead on ‘organisational virtue’, and although this might sound like a rather philosophical ‘take’ on organisations (and it is), I also want to demonstrate that it has very practical implications.

Dr Mariann Hardey, Lecturer in Marketing

How virtuous is your business?

introducing......

MAPP NG ORGAN SA ONA R UE CON NUED… N RODUC NG

For those of you who read newspapers such as the Financial Times or Wall Street Journal, the broad equity news content – namely IPOs, earnings releases, minor crashes, major crashes, volatility or general stock price news – may seem to have changed little over the long term. However, beneath the macros of the investment decision lies the world of trading (aka execution), and the changes that have occurred at this level, on both sides of the pond, are quite profound.

Enterprise investment plays a major role both in long-run economic growth and in business cycle fluctuations. This is particularly relevant in the Chinese context, where fixed assets investment as a share of GDP has been exceptionally high since the start of economic reforms, rising from an average of 29 percent between 1978 and 1993, to an average of 36 percent thereafter. Recent research shows that it is enterprise investment (rather than household or government investment) that distinguishes China from other countries, and interprets most of the cyclical variation of China’s total investment over time as an outcome of the industrial reforms, which led to a high share of industry in GDP. Understanding the determinants of enterprise investment decisions in China is therefore important, in particular for policy purposes.

Mapping organisational virtue

Enterprise Investment in China

Da e

Jason Coleman talks about the next phase of development at the School’s Mill Hill Lane site. I recently joined Durham Business School with the primary objective of attracting the significant funding required to reconfigure and expand the existing school facilities. As well as supporting both the School’s and the University’s strategies, this project is vital to address the pressures created by the growth in student and staff numbers and to ensure that the School maintains its strong identity in these highly competitive times.

The School already has a great deal to be proud of; the high quality of its research output and staff, its triple accreditation status, and the employability of its graduates, to name a few. During the coming three years our mission is to communicate our achievements and engage, not only with our current stakeholders, but also a wider global audience.

The optimal experience of flow and of being in ‘the zone’ is a feature reported not just in the realm of sports and leisure but in a whole variety of work situations, including surgeons and civil servants. Though not all aspects of these situations are under the control of the individual (surgeons, for example, work with teams of other skilled personnel), enough opportunities exist for what is an intense and predominantly intrinsic motivational process to take place.

Through an ongoing series of meetings with alumni and other business leaders, I will be communicating our strategy

Nigel Van-Zwanenberg, a Principal Teaching Fellow, joined the Business School in 2005 and is currently the course leader for the BA Business.

GE NG H NGS DONE CON NUED… HE SHAPE O

H NGS O COME

NEWS DA ES OR HE D AR

he D a

Dean’s Welcome I’d like to take this opportunity to wish a happy New Year to you all. Following successful re-accreditation by EQUIS in December, the School received some more good news in January when we learnt that DBS is positioned 55th in the world in the 2011 Financial Times Global MBA ranking. For more detail on that story visit our School news section. We hope that 2011 continues to bring good news and great developments for Durham Business School.

Speaking of our heritage and history, on page 25 new member of DBS staff, Jason Coleman, explains his role as Development Executive and its significance for the future of our business school. Jason and I would welcome your ideas, comments, or offers of support on this important subject. Finally, I would like to thank everyone for their support of the School throughout 2010, and I look forward to sharing many more successes with you in 2011.

Professor Rob Dixon, Dean

Alumni â&#x20AC;&#x201C; Update I would like to start by wishing all our alumni and supporters a happy, healthy and prosperous 2011. Something that I will always remember about the outgoing year is the series of fantastic student initiatives that raised money for charity through sporting and social activities. In December, the current full-time MBA cohort kicked off their Class Gift appeal with a Christmas boat cruise on the River Wear. Despite snow and freezing temperatures, more than ÂŁ1000 was raised. The cohort is now planning a series of activities throughout 2011 to raise sufficient funds to provide a scholarship for a future MBA student. Keep informed of their next event and how you can support them via Agoraweb and our facebook pages.

I am incredibly pleased to say that we now have more than 3000 alumni registered on our online community, Agoraweb. Upon registering, members receive an Agora membership card and access to a range of business journals and databases including EBSCO and Datamonitor 360. Also on the site are an international jobs board and recordings of recent guest lectures. If you have feedback or suggestions for the alumni association, wish to become a member, or check if you are already registered, please email me on dbs.alumni@durham.ac.uk Alexandra Sedgwick Alumni Relations & Development Manager

Enterprise Investment in China

Alessandra Guariglia joined Durham Business School as Professor of Financial Economics in April 2009. She is Head of the Department of Accounting & Finance and Head of the Department of Economics. Her research interests are in the areas of financial economics and macroeconomics.

I summarise here the findings of three papers, all joint with Sai Ding from Glasgow University and John Knight from the University of Oxford, which are part of an ESRC-funded project aimed at providing an understanding of the factors that influence Chinese firms’ investment decisions. All three papers make use of a panel of more than 100,000 firms over the period 2000-2007, drawn from the Chinese National Bureau of Statistics. Our first paper ‘Investment and financing constraints in China: does working capital management make a difference?’ analyses the linkages between investment in fixed and working capital and financing constraints. We find that, in the presence of adverse cash flow shocks, those firms characterised by high working capital are able to adjust their working capital investment, keeping their fixed capital investment relatively high. We then show that those firms

whose working capital investment reacts most to cash flow shocks, and whose fixed capital investment reacts least to cash flow shocks are those characterised by the highest fixed investment rates. This suggests that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment, and may provide an explanation for why the financially constrained private Chinese firms were able to invest and grow at spectacular rates in recent years, despite severe financing constraints. Our second paper ‘Negative investment in China: financing constraints and restructuring versus growth’ attempts to explain why despite high aggregate investment and remarkable economic growth, negative net investment is commonly found at the microeconomic level. We test three hypotheses to explain the existence and extent of negative investment in each ownership group: what we term the efficiency (or restructuring) hypothesis, the (lack of) financing hypothesis, and the (slow) growth hypothesis. We find that negative investment by state-owned firms can be explained mainly by inefficiency: owing to over-investment or mis-investment in the past, these firms have had to restructure and to get rid of obsolete capital in the face of increasing competition and hardening budgets. The financing explanation holds for private firms, which have had to divest in order to raise capital. However, rapid economic

growth weighs against both effects for all types of firms, with a larger impact for firms in the private and foreign sectors. Our last paper ‘Does China overinvest? Evidence from a panel of Chinese firms’ addresses the hotly-debated question of whether or not Chinese firms overinvest. We initially calculate measures of investment efficiency, which is typically negatively associated with overinvestment. Despite wide disparities across various ownership groups, industries and regions, we find that corporate investment in China has become increasingly efficient over time. However, based on direct measures of overinvestment that we subsequently calculate, we find evidence of overinvestment for all types of firms, even in the most efficient and most profitable private sector. We find that, in the private sector, overinvestment is caused by excess cash flow, while in the state sector it is attributable to the poor screening and monitoring of enterprises by banks. Our findings have important policy implications. Investment is typically viewed as a source of ‘boom-bust’ cycles. The Chinese economy faces the significant risk of its investment boom turning to bust, as a consequence

of investment misallocation. This could bring China’s rapid economic growth to an end. It is crucial for China to avoid the danger of switching from the current ‘virtuous circle’ (high investment, fast economic growth, robust confidence, and further high investment) to a ‘vicious circle’. Our analysis will inform the current debate about the policy challenges stemming from China’s remarkably high investment. The Chinese government should curb imprudent investments by over-capitalized firms and reduce inefficiency in capital allocation and utilization. Resources could therefore be freed to boost social spending and private consumption. China has been an engine of global economic growth, contributing on average one-quarter of the annual growth rate of the world economy since 1978. Reinforcing the resilience of the Chinese economy is of importance for the promotion of global economic development and world poverty reduction, especially in the face of the recent global economic slowdown. Hence, a thorough understanding of the key growth driving force, capital accumulation, is of serious significance not only for China, but also for the rest of the world.

FOR FURTHER INFORMATION For more faculty working papers and supplementary reading on investment in China by Alessandra, please visit www.dur.ac.uk/dbs/faculty/working-papers

Mapping organisational virtue How virtuous is your business? In this article I would like to suggest that we can usefully get away from discussions of Corporate Social Responsibility (CSR) and focus instead on ‘organisational virtue’, and although this might sound like a rather philosophical ‘take’ on organisations (and it is), I also want to demonstrate that it has very practical implications. I want to suggest that there are two dimensions along which we can make a judgement about organisational virtue and that we can make some sort of assessment of where any organisation is on those two dimensions, and do it over time so that we then have a map. I want to suggest that we can then see not only where we would like the organisation to move to if it is to become ‘better’ (which does not necessarily mean more successful in conventional terms), but also how it might get there. I will illustrate this with a practical and real-life example based on some of my research, although I shall not name the organisation to preserve its confidentiality.

TWO DIMENSIONS FOR ORGANISATIONAL VIRTUE The first dimension of organisational virtue is do with the purpose of the organisation. Why are we here? What difference do our goods or services really make in contributing to a society that is a better place to live? I am not aware that these kinds of discussion take place with any regularity (or at all?) within corporate boardrooms. Nor does the conventional approach to CSR put such issues on the agenda because CSR has become increasingly a strategic matter – aligning the CSR strategy with corporate strategy so that it makes its contribution to the bottom line. This is because conventional corporate governance and the kind of CSR that goes with it – shareholder-oriented corporate governance – assumes that this kind of debate is already decided. The ends of business are already given and it’s all about shareholder value. But the way of thinking about business that I am advocating raises questions

ORGANISATIONAL VIRTUE MAPPING

A CASE STUDY: MAPPING ORGANISATIONAL VIRTUE It seems clear that the virtuous organisation has a good purpose and places the emphasis just on the excellence side of success-excellence. The managers I interviewed on average scored the ideal business as focusing on excellence over success by 5.1 to 4.9 – so they recognised the need for some kind of balance but that excellence should be prioritised over success. The vicious organisation (to use the technical term since the opposite of virtue is vice) occupies the bottom of the diagram though I suspect most organisations with a bad purpose are also success oriented (bottom left). The business organisation in which I did my research had an interesting history – it had come about as a result of a merger of two separate organisations A and B. So in this case I was able to get a sense of the position of the two organisations before they merged. Hence A had the success-excellence balance about right but did not have such a good purpose as B. B, however, was clearly much more success oriented. The merger caused moderation on both dimensions, so AB was less success oriented than B but had a better

“It seems clear that the virtuous organisation has a good purpose and places the emphasis just on the excellence side of success-excellence.”

SO HOW VIRTUOUS IS YOUR BUSINESS?

introducing...... Dr Mariann Hardey, Lecturer in Marketing Mariann is a social media professional and academic. She is the BBC North East commentator for social media and digital networks. She read literature at the University of Sussex and later undertook a research MA followed by a PhD at the University of York. In her work Mariann seeks to identify and understand how real social relationships are mediated through digital social networks and Web 2.0 applications. Mariann is, therefore, a member of a new generation of academics and researchers who have not only grown up digital with technology, but are pushing new research boundaries and ‘thinking futures’ through them. What is your current role? Officially, my title is Lecturer in Marketing, but I would rather work on the ‘hidden’ aspects of the role that emphasise the positioning of digital technology and the organisation of social information in everyday life. What are the most challenging parts of your job? I find that the most challenging aspects of the job involve the perpetuation and momentum of academic thought into student knowledge. It is daunting how bright, savvy and engaged our students at Durham Business School are. As an academic you need to be prepared to make a fine-grained analysis of what is going on in the world around you; at cultural and social change, and, increasingly, the effect on consumer engagement, style and content. For me, these issues bubble to the surface as agenda for original research, activated by the transformation of research into a learning experience with students at Durham University. I constantly strive to respond to and fulfil their aspiration to participate in the many-to-many conversations that perhaps we as academics have traditionally enjoyed behind closed doors.

What advice can you offer to students and alumni thinking of an academic career? My advice for anyone in pursuit of an academic career is to be inspired by your day today and everyday. When you find that topic of interest that can hold your attention at any given time, then this will be a constant source of inspiration and you will want to interrogate it and circulate it to others. This means that academia can itself be most rewarding, however the continual creation and recreation of original ideas requires attention and dedication. At times it can be exhausting. But it is never, ever dull. What are you currently working on at Durham Business School? I have several research agenda that I am working on. My leading project for 2011 will be a prospective commercial collaboration, researching digital consumer content in relation to real time broadcast television. I am hoping that there will be an opportunity to enjoy an innovative and creative research design, and that this will add to the learning culture for the students at Durham Business School. There is no greater compliment than when the application of research concepts are understood, anticipated and used amongst the upcoming professional community. You can email Mariann at: mariann.hardey@durham.ac.uk

2011 MARKS THE 25TH ANNIVERSARY OF THE DURHAM MBA 1986

full-time MBA launched â&#x20AC;&#x201C; evolved from the MSc in Management Studies. Durham

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Q&A Durham alumnus David Collins talks about life as the Canadian High Commissioner in Nairobi, Kenya. David studied the MSc programme in 1978-79 (now known as the Durham MBA). Soon afterwards he went abroad with the Canadian Diplomatic Service and is currently High Commissioner to Kenya, Uganda and Rwanda; Ambassador to Somalia, Eritrea and Burundi; and Permanent Representative of Canada to the UN Organisations in Nairobi. This is his fourth ‘head of mission’ job, having served previously in Romania, Pakistan and Malaysia. Q. How do you feel your Durham degree prepared you for your current role? A. The bulk of my diplomatic career has been spent as a trade commissioner so the commercial orientation of the MBA (MSc in my day) was useful training to ensure I was on the same wave length as my clients from the private sector. As an ambassador, any form of advanced education is useful for stretching the brain cells and being mentally alert. Q. Can you describe your typical day? A. Days are full, starting with a meeting with senior managers in the embassy. There may be some trouble shooting regarding a consular case. There will be visitors to meet in the office; I may have one or two outcalls, either on government ministers or other senior contacts. Socially I may either give or be invited to a business lunch and in the evening there could be a national day reception or a dinner. Given the time difference here, the end of my day often includes a telephone call with Ottawa.

GRADUATION January saw the annual Durham University Winter Congregation ceremonies in Durham Cathedral. Presided over by University Chancellor Bill Bryson, they were a unique celebration for students and for their friends and families, many of whom were visiting Durham for the first time from around the world. Business School graduates included individuals from across many programmes, including PhD, Full-time and Distance Learning MBA, MA and MSc. Here, we share a few highlights of the day.

Innovation and Technological Change in US and European Equity Trading At some point in our adult lives many of us choose to look at, or invest in, stocks and shares, an ISA or a pension for example. For others, trading cash equities is a day-to-day job, and some of us both invest and trade. For those of you who read newspapers such as the Financial Times or Wall Street Journal, the broad equity news content – namely IPOs, earnings releases, minor crashes, major crashes, volatility or general stock price news – may seem to have changed little over the long term. However, beneath the macros of the investment decision lies the world of trading (aka execution), and the changes that have occurred at this level, on both sides of the pond, are quite profound.

timeframes. As a result, the electronic trading industry of today employs significant numbers of students of maths, engineering, decision sciences and other quantitative masters and PhD students. Trading was not always like this of course. Open-outcry trading ‘pits’ allowed human beings to engage in trading in centralised spaces (you can still see this in action on the Chicago Board Options Exchange (CBOE) amongst others); of course though, humans have many limitations and when it comes to neurological processing speed, they are some way behind the computer chip. Whilst the ‘Big Bang’ in London 1986 started the shift from human to electronic formats, recent legislation in the US (Reg NMS – National Market System, 2005) and in Europe (MiFID – Markets in Financial Instruments Directive, 2007) allowed an accelerated scenario to unfold. In Europe today, we have gone from national exchange monopolies to panEuropean competition (with a dose of transatlantic M&A thrown in). We have seen new technologically advanced pseudo exchanges called Multi-lateral trading facilities (MTFs) orchestrated as start-ups with sub 30 employees offering innovative technology, in some cases 10 times faster than the London Stock Exchange and, crucially, 10 times cheaper – the cost/differentiation nirvana we all know of from Porter. In fact the first MTF, called ‘Chi-X’, is now in the European top 3 venues in terms of market share, just three years after inception. In the case of the UK market, as far as breaking a 200 plus year old monopolistic market goes – I think most would agree that is a pretty strong achievement. We have ‘electronic dark pools’ where traders can hide orders away from others for protection and help ensure that their orders do not give away too much information to counterparts that would ultimately be detrimental to the price they pay or receive; we have ‘Smart Order Routing’ which are highly intelligent order handlers deciding where best to execute

My father and both his brothers are aeronautical engineers, my grandfather and his dad, naval engineers. On my mother’s side, everybody seems to work in finance or the computers industry. There is also the impact of Durham Business School: the three modules of information systems, quantitative decision analysis and DBS Senior Lecturer Pierpaolo Andriani’s Innovation and Technology course all played their role, and a lot of that knowledge continues to help me out today. For more in depth insight into electronic trading have a look at some of Stuart’s recent pieces below: • Journal of Trading, Winter 2010, Vol 5(1): www.iijournals.com/toc/jot/5/1 • Markit Magazine, Issue 10: www.markit.com/en/about/magazine/i ssue-10/mm10-randd.page? • FIX Global, Vol 3, Q4 2010: fixglobal.com/pdfs/201012/1012_14.pdf

Just a decade ago alumnus Stuart Baden Powell completed a MA in Management at Durham Business School. He now heads up European Electronic Trading Strategy at Royal Bank of Canada Capital Markets. Alongside this challenging and satisfying job, Stuart also enjoys contributing to various trading publications. Here he provides an insight into the technological advances that have transformed operations for investment banks over the past twenty years.

local association news Agora’s global network 1. GERMAN AGORA After attending a recruitment fair in the city and interviewing prospective Executive MBA students, Alexandra Sedgwick, Alumni Relations Manager, experienced some great Berlin hospitality. She met with MBA alumni Andy Philip and Andrew Tretow, GLC student Floriane Gramlich and prospective GLC student Tara Schollemann, and they enjoyed dinner in Alpenstueck restaurant on the east side of town.

3. NIGERIA AGORA

Local Associations are the perfect way to join in the DBS Global Get-Together events. Forthcoming dates include: 9 June, 8 September and 8 December. As usual these are just a guide. If it is more convenient to meet at another time and date then please do so. Any help you need arranging get-togethers please do get in touch. We particularly look forward to hearing about your events and receiving photographs. If you interested in joining these or any other groups throughout the world (your location or perhaps a business area you frequent), please email us and we will put you in touch.

BOOK REVIEW

The Art of Innovation by Tom Kelley (Published by Profile Books 2001, ISDN 0385499841)

Colin Ashurst is a Senior Teaching Fellow in MIS and is Director of the Full-Time MA Programme at Durham Business School. My research and teaching is about realising the strategic potential of information technology. Essentially that’s about IT-enabled business change. In many cases, IT is an enabler of business innovation. This means that, when we approach many investments in IT within organisations, we need to consider how we are going to encourage and enable innovation – which brings me to this book… The Art of Innovation by Tom Kelley provides ‘lessons in creativity from IDEO’ America’s leading design firm. Anyone who has been in one of my classes will probably have seen the Nightline video about IDEO – it shows a team working to make a new supermarket shopping trolley in a week. The book uses the story in the video as one of a number of examples and sets out specific practices that contribute to innovation at IDEO. Although the book was published in 2001 and I’ve been using the video for years, I only read the book for the first time this year. Since then, in part through Amazon, I’ve been aware of a flood of books and articles about innovation, creativity and design (see Further Reading).

For those of us involved in projects of any sort, in the creative area, in IT and change or other aspects of the organisation, this ‘design thinking’ is important. I think there will be major changes in how we approach ‘IT projects’ as we learn to take these ideas into account. The Art of Innovation is not the last word on design. It does provide some inspiring examples and some specific practices that you could explore to start to develop a more innovative approach to IT and projects in other areas. Further Reading Change by Design by Tim Brown (2009) Harper Business The Design of Business by Roger Martin (2009) Harvard Business Press The Ten Faces of Innovation by Tom Kelley (2006) Profile Books Also articles via EBSCO from Agoranet (www.agora.org.uk) include: Brown, Tim (2008) Design Thinking. Harvard Business Review, Jun 2008, Vol. 86 Issue 6, p84-92 Catmull, Ed (2008) How Pixar Fosters Collective Creativity. Harvard Business Review, Sep 2008, Vol. 86 Issue 9, p64-72 Coyne, Kevin P.; Clifford, Patricia Gorman; Dye, Renée. (2007) Breakthrough Thinking from Inside the Box. Harvard Business Review, Dec 2007, Vol. 85 Issue 12, p70-78

CLASS NOTES

BARRY TUCKWOOD MBA TUTOR DISTANCE LEARNING SINCE 1994 I have had a few successes over the past couple of years. In October 2009 I had a short paper on Project Success published by The Evaluation Centre in the UK, drawing on a wide range of experience and research. In May 2010 I had a paper published under the general heading of sustainability for an international geotechnical conference. The latter was based on material drawn from experience going back to 1976, and requiring a lot of research with people I had previously worked with (many of whom I had not seen for 20 years). Their co-operation, which was vital to the paper, was freely and enthusiastically given, demonstrating the importance of all networks. In December I joined the International Management Board of the Association of MBAs (www.mbaworld.com) having been elected for a three year term. I expect to learn from the experience of being a board member, especially in understanding more of the international aspects of the Associationâ&#x20AC;&#x2122;s work in accrediting MBA and DBA courses, and from their relationships with business schools and employers.

SAMIR TAGHIYEV FULL-TIME MBA 2009-10 Originally from Azerbaijan, I relocated to Saudi Arabia last September to begin working with the Islamic Corporation for the Development of Private sector (ICD) as a regional Manager for CIS countries in Jeddah, Saudi Arabia. ICD is a private development arm of the Islamic Development Bank Group. I shall soon be on the move again and based in one of the former Soviet countries on permanent basis. GAJENDRA BERHADE FULL-TIME MBA 2009-10 My MBA Business Project with Eden Farm concerned developing a 5 year growth strategy and during the project I identified improvement opportunities in the inventory management system for the organisation. After considering my proposal the company offered me another project on developing a better inventory management system and forecasting model which also involved aligning functional KPIâ&#x20AC;&#x2122;s with the strategic plan. I came from a manufacturing background before working with Eden Farm (wholesale frozen food distribution) so this was a great learning experience and a good opportunity to use the knowledge and experience gained during my MBA.

1. Barry Tuckwood 2. Brad Atkinson 3. David Ellis 4. Martin Ivanek 5. Gary Bishop

Getting thi Motivation is about choice and effort. It’s about why we choose some activities rather than others and why we put different amounts of effort into different activities or into the same activities on different occasions. Motivation is one part of why people’s performance varies – the other parts include skill, ability, equipment and other people. Because these factors interact, it doesn’t always follow that low motivation necessarily leads to poor performance: the very skilled may be able to produce good results even when not putting much effort in, or maybe machines do most of the work. Similarly there is no guarantee that high motivation leads to high performance, though this is often the case.

ngs done Because motivation is about how much effort we put in to our activities, our motivation at any particular time will depend both on our total available store of mental and physical energy and on how we focus it. Some individuals, like Tigger (the fictional tiger-like character originally introduced in A. A. Milne’s book The House at Pooh Corner), seem to have boundless energy to devote to almost all their activities. Yet even they are more motivated towards some tasks than others. The rest of us, with a less bountiful store, are more noticeably selective in where we direct our efforts. Motivation also has conscious and non-conscious aspects. Much of what adults do is the product more of habit than conscious thought. The daily process of going to work for many is literally unmemorable. Regular work patterns take on an unthinking rhythm and routine. It is perhaps only when we are confronted by an outside questioner, or circumstances change, that we ask ourselves ‘why’ we go to work or why we chose this particular work. Maybe this is where the big theories of motivation, those that point to the importance of our needs for existence, friendship or personal development, become relevant. Perhaps the money or the friends or the challenge are our ‘reasons’ for going to work. But are they our reasons for working hard (or not) when we get there? This again makes the point that it is not very helpful to talk of someone being motivated in some absolute sense but more useful to think in terms of how strong someone’s motivation is towards a particular activity at a particular time.

they (themselves) want to do, they generally do it well and with commitment. Their (intrinsic) motivation is heightened. Under these circumstances people are capable of the intense concentration that is a feature of ‘flow’, Csikzentmihalyi’s term for an optimal state of balance between challenge and skill, which typifies the personal involvement and commitment of the person to the task that they themselves have chosen and that they commit their energy to. The optimal experience of flow and of being in ‘the zone’ is a feature reported not just in the realm of sports and leisure but in a whole variety of work situations, including surgeons and civil servants. Though not all aspects of these situations are under the control of the individual (surgeons, for example, work with teams of other skilled personnel), enough opportunities exist for what is an intense and predominantly intrinsic motivational process to take place.

Nigel Van-Zwanenberg, a Principal Teaching Fellow, joined the Business School in 2005 and is currently the course leader for the BA Business.

“The daily process of going to work for many is literally unmemorable. Regular work patterns take on an unthinking rhythm and routine.”

This involves an interaction of all the components of performance; motivation, skill, other people, equipment, difficulty, challenge and so on, coupled crucially with rapid and specific feedback on the quality of performance. In these circumstances, performance, especially in terms of quality rather than quantity, and the activity itself are the main rewards – the epitome of intrinsic motivation. People in these situations seldom mention external factors such as pay and indeed such factors are not usually tied directly to performance. And that is probably all to the good,

for there is research, hotly contested though it certainly is, that indicates that where people are engaged in an activity which is essentially intrinsically motivated, the introduction of extrinsic rewards can actually reduce motivation. Intrinsic motivation is potentially very powerful, but it does heighten the role of the individual and hence increase complexity for managers – uniformity is much easier. In times of increasing uncertainty, or indeed of increasing certainty over cuts especially in the public sector, promoting the idea of encouraging individuals to develop

and take control over their own work is risky and perhaps unattractive to those whose job is to manage. But some, possibly many, of these managers may not be around in any case and so the conditions may well be created that will favour intrinsic approaches. In this case, a key role for senior management will be to design work that is potentially intrinsically motivating and to choose people who can be intrinsically motivated by it. Competitive advantage will then come from the quality of output or service offered to clients. Of course all this will mean wanting people to do things well.

The shape of things to come Jason Coleman talks about the next phase of development at the School’s Mill Hill Lane site. I recently joined Durham Business School with the primary objective of attracting the significant funding required to reconfigure and expand the existing school facilities. As well as supporting both the School’s and the University’s strategies, this project is vital to address the pressures created by the growth in student and staff numbers and to ensure that the School maintains its strong identity in these highly competitive times. The School already has a great deal to be proud of; the high quality of its research output and staff, its triple accreditation status, and the employability of its graduates, to name a few. During the coming three years our mission is to communicate our achievements and engage, not only with our current stakeholders, but also a wider global audience. Through an ongoing series of meetings with alumni and other business leaders, I will be communicating our strategy to develop the site at Mill Hill Lane. Since 2002, as well as The Foundation for SME Development, the School has incorporated the Department of Economics and Finance. Whilst currently based elsewhere on campus, integrating Economics and Finance within the School building will provide a stimulating and cohesive learning, teaching and research environment, enabling colleagues to be co-located at one site.

Through my initial appointments I have sought to understand the level of engagement of our alumni with the University and their philanthropic interests, in addition to exploring opportunities to access networks of contacts – including introductions to corporations and other individuals who may not have studied at Durham but have an interest in our region, sector, global reach, the relevance of our curriculum or the quality of our research. Whilst the ultimate goal is capital fundraising for the building project, there are numerous other opportunities for interested partners to connect with the School and the University, sharing their passion for Durham with our aspiring student body.

Our aim is to re-engineer Durham Business School so that we provide facilities worthy of being at the forefront of today’s increasingly competitive global marketplace. To achieve this we must offer an environment fit for purpose and commensurate with student, corporate and accreditation body expectations. To find out more information visit: www.dur.ac.uk/dbs/about/development

More details of our development plans will be shared with you in due course, but key highlights include:

I would welcome your ideas and encourage you to get in touch with me to share your thoughts.

In addition there will be useable outdoor space in the centre of the building perimeter accessible from numerous points. A more efficient heating and water system is incorporated as well as plans for an ecological wetland area.

• Improving the design and functionality of our lecture theatres • Extension of faculty office accommodation and research collaboration areas • Addition of a large glazed circulation corridor to the main part of the building • Enhanced breakout spaces for students • Improved and centrally located student-facing services • Enhanced catering facilities • Refurbishment of on-site bedroom accommodation

Recently appointed to the role of Development Executive, Jason gained a BSc (Hons) Finance and Accounting degree and a Diploma in Performance Coaching before pursuing a career in sales and marketing. Having worked across a variety of sectors, from prestige automotives to the food industry, he has a broad understanding of retail sales and marketing principles.

Central Extension – South Elevation

news news news news news news news news Omotosho, who is based in Lagos, School News Nigeria and works as Divisional Head, The School made significant progress in the 2011 Financial Times Global MBA Rankings which were published in January, climbing 19 places to 55th in the world. This equates to 17th in Europe and 9th in the UK, placing the School ahead of competitors including Warwick, Strathclyde and Edinburgh. The global ranking comprises 28 European schools, 58 North American schools, ten Asian/Australasian schools, three schools from South America and one school from Africa. This is deserved recognition of all the hard work and dedication of our alumni, students, staff and faculty. KPMG-DURHAM UNIVERSITY PARTNERSHIP Durham Business School has announced that it is working in partnership with KPMG and the Institute of Chartered Accountants in England and Wales to develop a ground-breaking new school leavers’ programme from September 2011, aimed at broadening access to the accounting profession. The innovative proposal is for an initial intake of around 75 students, who will start a six-year programme leading to both a BSc in Accounting from Durham University and a professional chartered accountancy qualification from the ICAEW. KPMG will pay the full University and Professional tuition fees for each student in addition to a starting salary of around £20,000. During the degree phase, which will last for four years, students will spend part of the time studying at Durham Business School, and part of the time working at KPMG.

NEW 4-YEAR UNDERGRADUATE DEGREES The School is to launch two highly innovative undergraduate degrees in October 2011. The MBus and the MMarketing are, we believe, the first four-year undergraduate degrees in business incorporating a Masters qualification anywhere in the world. Aimed at inquisitive and investigative students, they place research-led teaching and learning at the centre of the curriculum.

AND THE WINNERS ARE… Three successful applicants have been selected for 2010 DBS/Independent MBA Scholarship. One award was made for each of the School’s MBA programme modes: Full-Time, Executive and the Global MBA. The deserving winners are: for the Full-Time programme, Adetokunbo

Infrastructure & Enterprise Security at Interswitch Limited; Executive programme, Annabel Cornish, based in Newcastle upon Tyne and Managing Director of The Zebra Group, a design and software development business; and the Global MBA programme winner is Christel Adamou, who is based in Nairobi, Kenya and works as an Associate Legal Officer for the United Nations. The Executive and Global winners have already begun their studies and the Full-Time programme winner will join the School in September. WELCOME The 2010 Executive MBA cohort met for the first time in January. UK programme participants were joined in Durham by the DBS/EBS Executive MBA cohort (based in Germany), for their week-long induction programme. With an average age of around 38, they bring an excellent mix of skills, knowledge and experience. Twelve new PhD students have also recently joined the School; they represent a diverse group of countries including: Greece, The People’s Republic of China, Armenia, Kuwait, Bosnia & Herzegovina and Jordan. This brings the number of PhD students to 140, and with 100 students on the DBA programme, we now have a total of 240 Doctoral students.

University News DBS PROFESSOR PRESIDENT OF BAM Professor Timothy Clark, Dean of Graduate School and Professor of Organisational Behaviour has been elected President of the British Academy of Management (BAM) for 2011. Based in London and founded in 1986, BAM boasts a proud history of representing and developing the community of management academics for the benefit of members, practising managers, management education and society.

NORTH EAST DOCTORAL TRAINING CENTRE Durham and Newcastle universities are to receive over £9million from the Economic & Social Research Council (ESRC) to establish a joint world-class Doctoral Training Centre to train the next generation of social scientists. The new North East Doctoral Training Centre will bring together the research strengths of both universities, offering students a wealth of opportunities to work with research leaders across a wide range of social science subjects and benefit from world-class training and resources.

FEELING NOSTALGIC FOR DURHAM? A new website promoting Durham City’s historic World Heritage Site (www.durhamwhs.com) has been launched to mark the 25th anniversary of the Cathedral and Castle achieving World Heritage status. Full of fascinating facts and images, it provides a comprehensive overview of the World Heritage Site’s significance, its history, its architecture, and current events and activities. It will also serve as on-line repository for research and documents. Durham Cathedral and Durham Castle, which is home to University College, were inscribed on the UNESCO World Heritage list in 1986.

Dates for the Diary SPEAKER EVENTS

RECRUITMENT EVENTS

PREVIEW/OPEN EVENTS

ALUMNI WEBINAR ‘Networking: Following up opportunities after an event’

PROVISIONAL DATES AND VENUES FOR 2011 INCLUDE:

MBA PREVIEW EVENTS

13 April 2011, 14.00 – 15.00 (BST) Available globally

WORLD MBA TOUR Johannesburg, South Africa 29 March

DURHAM SPEAKER SERIES PWC: SUSTAINABILITY

EDUCATION UK

14 April 2011, 18.00 – 20.30 London, UK

Athens, Greece 16 & 17 April

20 April 2011, 10.30 –14.15 hrs 24 May 2011, 10.30 – 14.15 hrs 22 June 2011, 10.30 – 14.15 hrs 21 July 2011, 10.30 – 14.15 hrs Durham Business School Please note that dates and events are subject to change.

AMBA FAIR

DURHAM SPEAKER SERIES SIMON BROOK, EUROPEAN INVESTMENT BANK CLIMATE ACTION – A PERSONAL VIEW

London, UK 16 April

13 May 2011, 18.00 – 20.30 Durham Business School, UK

Prospective students, as well as the School, benefit from having alumni assist Durham academic staff with recruitment activities. If you feel able to volunteer to help in this way please visit the events page at www.agora.org.uk

DURHAM CONVENTION – DURHAM BUSINESS SCHOOL HOSTS ITS 3RD ANNUAL CONVENTION – SPEAKERS INCLUDE: James Averdieck, Durham Alumnus, Entrepreneur and owner of GU Puds Gavin Miller, Durham Alumnus and CEO at CMI incorporating Edinburgh Filmhouse and Edinburgh International Film Festival and Film Guild Rona Cant, Arctic Explorer and inspirational communicator Adam Shaw, Award-winning financial reporter and BBC presenter 03 June 2011, 11.00 – 18.00 Durham Business School, UK MBA 25TH ANNIVERSARY – CELEBRATION WEEKEND 03 – 05 June 2011 (see page 2 for details) Durham, UK

WOULD YOU LIKE TO HELP PROMOTE DBS?

FOR FURTHER INFORMATION To book places for these events, contact the person named, or the Alumni Team on: Email: dbs.events@durham.ac.uk Telephone: +44 (0)191 334 5277

agora Alumni Development Team Room 215, Durham Business School Mill Hill Lane Durham DH1 3LB UK t: f: e: w:

+44 (0)191 334 5277 +44 (0)191 334 5218 dbs.alumni@durham.ac.uk www.agora.org.uk

UK Agora Local Associations Northern Agora (based in Durham) Southern Agora (based in London) International Agora Local Associations Athens Beijing Caribbean Denmark Frankfurt Ghana Hong Kong Hungary Indonesia Japan Malaysia Mexico Norway Russia Singapore South Africa Switzerland United Arab Emirates

Canada Egypt Gibraltar India Jordan Nigeria Shanghai South America United States of America

To be put in touch with other alumni in your area contact the Alumni Team.

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