Bribing is part of the art of doing business. A practical professor teaches the students

Business education

MBA students get a lesson they won’t forget

rita trichur

From Thursday’s Globe and Mail
Published Wednesday, Oct. 19, 2011 9:41PM EDT

An award-winning business professor has set tongues wagging at the University of Western Ontario after he offered to give his MBA students an extra class and job recommendations in exchange for cash “tips.”

Ariff Kachra, who teaches strategy at the Richard Ivey School of Business, collected about $500 from students over about 2½ weeks. But he was not soliciting bribes. Earlier this month, he returned the money and revealed he was conducting an experiment sanctioned by the university.

The exercise was designed to teach students about “value distribution,” a complex business concept that stresses the importance of companies strategizing about profit distribution, including decisions about consumer pricing and employee compensation, to optimize performance.

Profit distribution has become a hot topic due to the “Occupy” social movement. Nonetheless, MBA students have traditionally struggled to understand the big-picture impact of value distribution, which is why Mr. Kachra said he opted to take such an unorthodox approach.

A proponent of “experiential” learning, Prof. Kachra regularly uses unconventional teaching methods, such as employing props like candies and balloons. He argues that having a visceral experience is the key to effective learning, especially at a time when companies are complaining that graduates are ill-prepared for the real world of work.

“It is risky, but tell me how you are No. 1 in the world if you are not risky?” Mr. Kachra said. He later added: “The world has changed. You have to educate young people today based on understanding, not information. Information is passé.”

While many students say his eccentric teaching style is brilliant, questions are being raised about whether such a provocative exercise crossed the line.

To start the experiment, he placed a tip box on his desk. He gradually stepped up pressure to tip through pointed group e-mails to students. In one such message, he expressed disappointment with his low level of tips. In another, he suggested students who gave more than $30 would receive job recommendations. He also indicated that those who tipped $15 could join in a class that covered material not in the course.

One day before the “big reveal,” a student wrote a scathing e-mail questioning the ethics of asking for tips even though he suspected it was an experiment.

While Prof. Kachra said he was hoping to elicit such a reaction, another person claiming to be a student wrote an anonymous letter to The Globe and Mail to complain that the exercise caused undue stress.

“If this is some type of sick joke, it is not funny, and has cost me more sleepless nights than I can count,” the undated letter said. It is unclear whether it was written before or after Prof. Kachra revealed the rationale for his ruse.

When asked if he has any regrets, Prof. Kachra said: “I feel bad that I probably didn’t do a good enough job debriefing. I wish that person felt comfortable enough to come see me about it.”

The university is unwavering in its support for both Prof. Kachra and the experiment, which involved about 160 students.

The exercise was intended to underscore the lessons from a case study on a company that had a complex bonus system instead of hourly wages to encourage workers to boost production and give it the flexibility to slash costs. The students learned that such a system requires widespread acceptance. The exercise was conducted last year without issue.

Fraser Johnson, faculty director of the MBA program, likened it to a collision between theory and practice that is designed to prevent the “analysis paralysis” that can often plague students.

“Some of the students went after the bait and got frustrated, and I think that is part of the learning experience,” he said, adding that most knew there was an endgame, but decided to go with the flow to see how it would play out.

Other students echoed that view. Shady Ghattas never tipped a cent, but said there was never any doubt that Prof. Kachra’s intentions were honourable. Darlene Santos conceded that some students found the process “odd,” but stressed that no one really believed that Prof. Kachra was seeking bribes, especially since most know he earns a hefty salary. (According to disclosure documents, he made more than $187,000 in 2010.)

Even so, Ms. Santos tipped him $15 and does not believe the experiment was unethical. “I think there was a higher purpose,” she said. “He did it for a reason. He didn’t just do it to mess with our heads.”

Verónica Flores also said she enjoyed the experiment and tipped $10 during the final week. “Some people in the class were a little bit annoyed, because weeks passed by and we still didn’t know what was the point of the exercise. Nevertheless, I’m sure no one will forget about what we’ve learned. I believe that the experimental teaching conducted by Ariff has been an amazing way to learn,” she said.

Still, Leonard Brooks, a professor of business ethics at the University of Toronto, said experiential learning must be handled with care. That means considering issues like unintended consequences and perceived conflicts of interest at the outset.

“Is it reasonable to create that kind of stress on one person, or maybe more than one, in return for several others getting a particular point? Is there an alternative way of doing it that could eliminate the negative and still make the point? That would obviously be a preferred approach,” he said.


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