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