Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Book Reviews
James L. Morrison
To cite this article: James L. Morrison (2006) Book Reviews, Journal of Education for Business, 81:6, 345-348, DOI: 10.3200/JOEB.81.6.345-348
To link to this article: http://dx.doi.org/10.3200/JOEB.81.6.345-348
Published online: 07 Aug 2010.
Submit your article to this journal
Article views: 10
McIntyre, John R., and Alon, Ilan (Eds.)
Business and Management Education in Transitioning and Developing Countries
Armonk, NY: M.E. Sharpe Publishers, 2005, 435 pp.
ISBN: 0-7656-1505-3. Paperback, $35.95
This text, edited by John McIntyre and Ilan Alon, reflects the experience of over 40 contributors with expertise in business and management education. The emphasis is on change and how graduates of business education pro-grams can expand their influence in the workplace as new global markets con-tinue to emerge. In this regard, the pri-mary purpose of the book (what some could consider a handbook) is to pre-pare a cadre of innovative change agents who may be better prepared to handle the trials and tribulations of the change process for guiding developing coun-tries into the mainstream of globaliza-tion. The specific content for the text is derived from scholarly exchange at a research conference held at the Georgia Institute of Technology in November 2003. The result is a comprehensive review of management training issues and business education models recently being adopted by developing and transi-tioning countries.
The editors of this volume present a collection of viewpoints from a pool of talented professionals who make a vari-ety of suggestions for updating educa-tional institutions specifically situated in emerging countries. The end goal is to better enable faculty to address gaps in the current product distribution systems in emerging countries, such as India, China, Nepal, and Russia. The text is divided into six parts, reflecting transi-tioning economies in six regions of the world. The initial segment includes five chapters focusing upon emerging
coun-tries situated within the Indian subconti-nent. After describing the status of busi-ness education programs and the chal-lenges currently being faced by faculty in India, the readings focus on account-ability, affordaccount-ability, and accessibility issues that affect other countries in the same region. The regulatory challenges currently in existence are also analyzed in great detail. Of particular note is a dis-cussion of India’s priorities to the train-ing of huge numbers of engineers to launch a continual stream of innovative products and services. The effective use of technology to assist a new breed of entrepreneurs is a major part of an inno-vative educational strategy proposed. At the conclusion to this part, the book turns our attention to the smaller country of Nepal, an emerging country with less-er notoriety, but strategically situated between China and India. The discus-sion here is how such a small country has revised its management education in direct response to the needs of its local economy.
Part II of the readings advances the study of current training programs in post-Communist Europe, including ref-erences to Albania, Bosnia, Hungary, Poland, and Russia. Of note here is the attention paid to the privatization of key industries and its impact upon preparing individuals to fulfill new roles in organi-zations that are currently being restruc-tured. In this regard, special interest is given to Russia and its current emphasis on revising business education and man-agement training to graduate workers possessing skills similar to those cur-rently emphasized in the American busi-ness education programs. Areas that are currently being benchmarked with American programs are analytical skills, oral and written communication, com-puter skills, decision making, and prob-lem solving. Noted here is how students in Russia differ from their faculty in
their perceptions as to the quality of their learning experiences as they go about developing their managerial talent.
In Part III of the text, the reader’s attention is directed to the transitioning of economies in Europe and Central Asia. An interesting example illustrated is that of the Lviv Institute of Manage-ment in Ukraine, whereby educational strategies typical of Western-style busi-ness schools have been adopted in its entrepreneurial-training program. Specifically, the highly interactive U.S. model of business education has served as a guide for enhancing the manage-ment training capability of institutions in emerging countries that are now free to reinvent themselves because govern-mental interference has been signifi-cantly reduced.
Another institution of interest is the Vilnius University in Lithuania, which has a master of international business program that prepares students to enter into a globalizing local economy. It also symbolizes the movement from training institutions offering a narrow technical strategy to that of a more general and liberal arts orientation. Concluding this segment is an emphasis on reforming the accounting and financial reporting systems, especially of countries in East-ern Europe. Within the context of Bosnia and Herzegovina, there is an intriguing discussion of matching exist-ing professors to the new certification model now being formulated to ensure the quality of accounting program grad-uates. The primary issue addressed is how faculty in these transitioning coun-tries will be able to mobilize their limit-ed resources (i.e., land, labor, and capi-tal) to generate and sustain needed business education reforms for launch-ing new global initiatives.
Part IV concentrates on developing countries in Latin America where the interdependency of countries is an
BOOK REVIEWS
es to the changing training needs of workers situated in different regions of the globe. The message is clear that institutions offering business and man-agement education are being heavily relied upon to demonstrate the leader-ship necessary to mobilize future gener-ations of workers into new employment models that inspire change.
The strength of the text is the numer-ous examples used to reference pro-posed models for transitioning from business education reflecting a coun-try’s traditional norms to new dynamic training models. The idiosyncrasies peculiar to work cultures around the world are described in terms of explor-ing the complexity of the issues sur-rounding such transition. The contribu-tors do an excellent job of illustrating how countries are attempting to diversi-fy their markets in an attempt to reap rewards from the new opportunities emerging every day.
A primary weakness of the text is some confusion in the differentiation of leadership training and management education. While there is some attention given to the topic, the inference appears to be that leadership and management education are relatively the same. The confusion may be the result of what is being currently debated among business and other faculty in American colleges and universities. In this text, there appears to be a blurring between the disciplines of leadership and manage-ment. However, rather than implying that leaders and managers have very similar training needs, a more differen-tiated but complementary strategy may be in order. In other words, how are countries preparing future generation of workers with the leadership skills of developing a vision, inspiring others to act, and making decisions that set a country in the right direction?
The assumption I had when reading the text is that the current leadership in emerging countries is generally on the right path and that the purpose of man-agement education is to prepare those workers to carry out existing plans. However, it would have been helpful if the contributors analyzed the comple-mentary effects of both leadership edu-cation and management eduedu-cation with-in a new context. In other words, it takes
leadership to set a country in the right direction to promote economic develop-ment, but effective management is also required to plan, organize, and act on those tasks required to sustain a direc-tion of change; the initiadirec-tion of change and sustaining such a movement likely require two separate but complementary strategies.
However, the contributors to the text provide an intriguing perspective of the opportunities and challenges facing busi-ness education programs around the world as faculty attempt to meet the needs of both political and economic environments. The contributors do com-plement one another by giving a variety of examples to document their perspec-tives. The focus on what are referred to as emerging markets makes this text some-what different from others previously appearing in the literature. With the intent to redefine business and management education within the context of emerging countries, the contributors do lay the groundwork for the premise that business education has a vital stake in the success or failure of these emerging countries. This book can generate lively discussions among students either at the undergradu-ate or the graduundergradu-ate level of education. It is certainly a text that should be part of a faculty’s personal library and also be readily available to students who have an interest in understanding the dynamics of emerging markets.
Berman, Karen, and Knight, Joe (with Case, John).
Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean.
Cambridge, MA: Harvard Business School Press, 2006, 255 pp. ISBN 1-59139-764-2. Paperback, $24.95
Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean focuses on what every employee would like to know about the company in which he or she works. Is the company in which I work solvent? Does the company have sufficient funds on hand to pay its bills? Is the company headed in the right direction? The premise of the text is that when employ-ees have a thorough understanding of an issue. The self-interest here is on the
need to establish a global mindset among faculty for reinventing existing business education programs that reflect an expanded global reality. Using Argentina as an example, the need for change agents to reshape organizations so they become incubators for new products and services is explored. New ventures generated by business educa-tion graduates are expected to play a critical role in the emergence of firms of superior quality that are on the cutting edge of technology. The editors cite Chile as another example of how emerg-ing countries have moved from central-ized economies to a free-market system, enabling citizens to compete more freely and openly.
Parts V and VI target the continents of Africa and Asia. Of particular interest is the radical transformation, both polit-ically and econompolit-ically, of countries in Africa, as internal and external pres-sures mount to reform existing economies. In addition, China is alluded to as another example of a country with similar pressures to reform its universi-ties. The strategy discussed is the accel-eration of the process to accumulate sci-entific knowledge and technology to better enable graduates to go about adapting current resources for entering into an era of what the contributors refer to as knowledge work. Because there is a burgeoning demand for business edu-cation in China, there is a renewed inter-est in reconfiguring training programs in Chinese universities from the tradi-tional emphasis of engineering (and other sciences) to entrepreneurial build-ing or business. China is a remarkable example of the seriousness behind the current movement among emerging countries to become major players in the global economy. In this regard, the readings focus on the factors of self-esteem of students; the degree of control by institutions on personal decision making; and underlying cultural assumptions, values, and beliefs.
In summary, the text is about choice and how business education faculty are facing unique training challenges to bring their countries into a globalizing marketplace with an aggressiveness that may startle the reader. The contributors propose a variety of innovative
employer’s financial situation, they will be in a better position to make appropri-ate decisions that result in greappropri-ater effi-ciencies and enhanced profits.
The intriguing strategy on which the text is based is that numbers reported in traditional financial statements, such as the balance sheet and income statement, may be misleading to the financially uninformed. In this regard, the typical non-financial manager has very limited knowledge on which to make reason-able judgments on how to put such numbers into proper context. Therefore, this book is an attempt to bring home the financial reality of a company in easy-to-understand terms that avoid the jargon typically found in such publica-tions. Berman and Knight have coau-thored a unique but simple strategy, which suggests that there is a correla-tion between having financially intelli-gent employees and enhanced worker productivity.
The book could also easily fill a void that may be evident in a considerable number of business programs in our postsecondary educational institutions. In addition to assisting managers in updating their financial knowledge, it enables business faculty to provide a ser-vice to a student population that is not majoring in a business concentration. In this regard, the text may serve a broader spectrum of individuals by assisting those undergraduates in the liberal arts and the sciences who also will likely find employment in the private sector. Becoming better informed as to the financial side of business will help not only typical employees as they go about attempting to understand the signifi-cance of their roles in that organization but also the future workers graduating from colleges and universities. More-over, by having a strong financial litera-cy awareness program in a company, workers will feel more involved and committed. Employees will better understand of what they are a part, what the organization is trying to achieve, and how they can affect the results. There-fore, the authors argue that employee morale should improve as trust between leaders and followers solidifies.
The book is full of surprises, especial-ly in the manner in which accounting concepts are presented to and analyzed
for the reader. For example, the authors begin by portraying accounting as an “art,” in that the rules followed and assumptions made frequently vary depending on the intent and experience of the developer of such financial state-ments. Therefore, employees who under-stand the assumptions upon which num-bers are based are in a better position to make appropriate decisions as to the financial conditions of the companies in which they work. As a result of compre-hending the tools and strategies present-ed, the reader learns how to determine the true meaning of numbers by being capable of asking the right questions of those who create income statements, bal-ance sheets, and cash flow declarations. Correspondingly, this capability puts employees in a better position to be more confident in using the financial informa-tion available to link their own personal performance to the needs of the company in which they work.
The text is divided into eight parts that are sequentially linked in terms of build-ing on concepts learned early in the process. At the end of each part is a tool-box, which consists of having the reader apply financial tools that will enable him or her to better interpret financial report-ing back at work. Therefore, the authors attempt to integrate a sense of reality by offering suggestions for getting through the jargon generally associated with those numbers being reported. The use of these toolboxes symbolizes the authors’ intent, which is to build the reader’s confidence in analyzing any company’s financial foundation.
Part I introduces the reader to the con-cept of distrust. The authors focus on the importance of being sensitive to the assumptions, estimates, and biases relat-ed to the numbers reportrelat-ed on the bal-ance sheet, income, and cash flow state-ments. The key here is to know how to make an accurate judgment as to when revenue is recorded and when it is not. Topics presented in this regard include interpreting accruals, allocations, and depreciation; separating hard data from assumptions and estimates; calculating and deciphering financial ratios; and dif-ferentiating between cash and profit.
Part II focuses particularly on exam-ining the income statement, with the authors guiding the reader to analyze
what exactly is considered profit, how it is determined, and how it relates to cash flow. Berman and Knight present what they refer to as the matching principle for illustrating why it is important to match each category of sales with its associated costs. Another engaging con-cept introduced is the principle of esti-mates, which means that numbers on the income statement generally reflect estimates and assumptions. The reader is constantly reminded throughout the text that financial accounting is an art and that individuals must be extremely cautious in accepting at face value num-bers that are reported.
For example, the concept of earnings per share is introduced, which is the net profit divided by the number of shares outstanding. However, for the reader to understand this concept, the authors make certain that the reader learns about the importance of recognizing earned income, how it is determined, and how it relates to the reporting of sales. The term profit is then examined in terms of gross profit, operating profit, and net profit. Again, the reader’s attention is brought back to the significant role played by the employee for boosting profits by controlling costs of produc-tion and operating expenses as well as the enhancement of noncash expenses (such as depreciation).
Part III presents a straightforward discussion of the balance sheet. The focus here is on the topic of equity, or the company’s book value (assets minus liabilities). The authors direct an inten-sive portion of the reader’s attention to differentiating between the types of assets owned by a company—from inventory to goodwill, tangibles to intangibles, and accruals to prepaid assets. An interesting aspect of the dis-cussion here is how the income state-ment affects the balance sheet. Again, to bring the discussion to the level of the average employee, the authors explore the topic of how an employee is gener-ally classified in a company. Is it signif-icant whether a company treats their employees as a cost, an expense, or an investment? In this regard, an issue the authors address is why employees do not show up on the balance sheet as a separate item. The authors explain that, in addition to the fact that companies do
not own employees, there is basically no way to determine the value of the knowledge possessed by each employ-ee. Therefore, the balance sheet is an inappropriate place to document the value an employee has on the financial worth of a company.
The authors use Part IV as a reality check, with a discussion of the impor-tance of a company’s ability to generate cash consistently from month to month. The reader’s attention turns to the topic of why cash flow is a key measure of business performance. An interesting comparison is made here in terms of interpreting the balance sheet and income statements of a company. Berman and Knight point out that cash flow is reality, whereas the numbers appearing on the balance sheet and income statement may reflect an accountant’s biases that are the result of personal assumptions and estimates. More important, the intent is to explain why cash on hand matters to the average employee. The authors go on to explain that the amount of cash on hand deter-mines where a business is headed, what the priorities are, and if a company is investing in its future. If there is suffi-cient cash on hand, then employees know they can focus on conducting business (i.e., reducing costs or generat-ing sales) rather than begenerat-ing distracted by performing tasks to generate cash to pay immediate bills.
Part V of the text is about power; that is, the power of ratios. Here, the reader is again cautioned that numbers shown on financial statements can be deceitful. However, if a manager can relate num-bers to one another, some sense can be made of them. For example, comparing ratios of one business with averages in the industry can reveal much about a company’s financial condition. Specific examples of ratios discussed are returns on assets, equity, and investment; debt to equity ratio; current ratio; and collec-tion’s efficiency ratio. The book pro-vides a number of illustrations to remind the reader that employees at all levels of management can affect each of these ratios.
Part VI turns the reader’s attention to the financial concept of return on invest-ment. The discussion of the time value of money (differentiating between future value and present value) is typically a difficult concept to explain. However, the authors do a particularly good job of illustrating its importance in figuring out how a company determines whether an investment in the purchasing of new equipment or expanding an existing facility is worth it. For employees to understand how to determine the bene-fits behind a new investment in terms of their role places them in a position to accept the vision of company leaders.
Part VII places the worker in the cen-ter of the economic picture of a compa-ny. The authors explain how the typical employee may impact on the success or failure of a company’s strategic plan. The concept of working capital is inter-preted in terms of how the typical employee impacts the expectations of both generating and managing cash. In other words, how to convert the cost of raw materials into cash (from sales) quickly is the essence of efficiency. The rate of the turnover of inventory can mean the difference between a profit and a deficit. Therefore, honing in on concepts related to cash conversion by exploring strategies that are readily available for the employee to adapt again brings the context of the book into everyday reality.
The conclusion, Part VIII, contains a proposal for a systematic plan on the part of any organization to educate employees about the financial aspects of operating a business. The authors pro-pose a three-prong strategy for imple-menting a financial literacy training program. The first prong is the initiating of a series of short training sessions on a regular basis, perhaps once a month. At these meetings, the employees will become aware as to what numbers they should be watching (e.g., sales, ship-ments, hours billed). The second prong is the instituting of weekly training ses-sions (called numbers meetings) to help employees to keep up-to-date with the fast-changing pace of business. The
third prong is the introduction of rein-forcement scoreboards that illustrate visually how the accounting numbers being reported match up to company predictions. In other words, by having the numbers posted on bulletin boards, it will be difficult for employees to for-get or ignore important information that they may use during their own decision-making processes.
This book is about passion and the power of knowledge. The purpose is to produce more passionate employees who perceive themselves as possessing a power to make a difference in a compa-ny’s operation. The book can also be use-ful for undergraduates in colleges and universities who would like to learn more about how they, upon graduating, will fit into the needs of a business. The text may also be useful for a series of continuing education seminars or in-service training workshops that attract those presently employed who are seeking to better understand their roles at work.
In summary, the authors argue throughout the text that knowing the reasons behind why your work (and what you do) is important to a company and how it can have a significant effect on worker productivity. By becoming financially literate, employees can answer the following questions: (a) Where do I put my energy? (b) What priorities should I set? and (c) What kind of work plan should I implement to have impact? In this regard, business faculty have a very important role to play in assisting not only managers in the field but also undergraduates other than majors of business to have a better understanding as to how they can add value to the company with which they are or will be employed. Anything to advance an understanding of the free-enterprise system is in the best interest of business faculty, and this text can play a role in this endeavor.
James L. Morrison, University of Delaware Newark, DE Copyright © 2006 Heldref Publications
