A Closer Look at Business Education

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

May 2007

: Oil and Gas Industry

INTRODUCTION:
The McKinsey Quarterly recently featured an article in which its authors assess the serious challenges
facing the energy industry in the coming decade.1 One noted area of concern is locating the talent
necessary to fulfill the rapid growth of knowledge-intensive positions, notably engineers and experienced
project managers. Despite the expected increase in availability of young professionals from developing
countries, “inadequate management skills” and language impediments hinder the number of these
prospective workers attractive to Western companies.2 Moreover, Halliburton’s chief executive recently
commented, “Unlike the States, there are more people in this part of the world [referring to the Middle
East] who are interested in careers in the oil and gas industry.”3

The ideal MBA preparation for future managers in this sector is multi-faceted, and specialty MBA
programs that have a curricular focus on energy are certainly leading in this sense. A combination of
technical erudition and management training isn’t enough given the growing societal and environmental
scrutiny coming from governments, influential non-governmental organizations, and a vocal public.
Familiarity with relevant environmental and social issues and multi-stakeholder processes is necessary for
a command of the future direction of industry wisdom. Additionally, the political volatility of many
mineral-rich host countries increases the pressures placed on executives to not only fully understand the
cultural context and sensitivities in which they’re working, but also to bear in mind the safety of their
employees.

Utilizing newly-collected 2007 data from the Aspen Institute’s Beyond Grey Pinstripes survey of full-
time MBA programs, this Closer Look edition presents select up-to-date institutional data on industry-
specific information being presented to current business students. The full survey data set will become
available at www.BeyondGreyPinstripes.org in the fall.

THE BOTTOM LINE:

■ This year’s Beyond Grey Pinstripes survey collected information on more than 3,000
courses from full-time, in-person MBA programs worldwide. Of the ninety-nine courses
that substantially address the extractives or energy industry, twenty-two (22%) are in the
core curriculum and seventy-seven (78%) are electives.

■ Energy themes are being integrated into a wide range of disciplines, including:
Environmental Management; Economics; Business Ethics; Management; Marketing;
Finance; Strategy; Quantitative Methods; and Production and Operations Management.

■ Student competitions soliciting energy sector-related submissions are widespread on

MBA campuses. As just one example, the G. Steven Burrill Technology Business Plan
Competition at the University of Wisconsin recently awarded its top honor to a student
team whose members addressed energy needs in Rwanda.

1
I.J.H. Bozon, W.J. Campbell, and M. Lindstrand, “Global Trends in Energy,” The McKinsey Quarterly, 2007
Number 1, <http://www.mckinseyquarterly.com/article_page.aspx?ar=1923>.
2
Ibid.
3
“Halliburton shifting focus toward the Mideast, CEO says,” International Herald Tribune, May 22, 2007,
<http://www.iht.com/articles/ap/2007/05/22/business/ME-FIN-Dubai-Halliburton.php>.
 A Closer Look at Business Education
________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____

A FACULTY POINT OF VIEW:

Wayne Patton is the Director of Program Development at the Institute for Sustainable Energy,
Environment and Economy at the University of Calgary. Mr. Patton is also Director of
International Energy Programs for the Haskayne School of Business and is responsible for
developing and managing international executive programs and managing the Global Energy
Management and Sustainable Development MBA program specialization. Prior to academia, Mr.
Patton worked for over twenty years in various capacities for Imperial Oil Limited and Exxon.

On specialty degree programs in the field: “It has been a few years since I surveyed other MBA
programs but as I recall, energy-related MBA programs typically included a course or courses
dealing with global energy markets, OPEC, and price forecasting. Business courses dealing
directly with energy policy were less common.”

On bringing industry lessons to the strategy classroom: “We have a strategy course that focuses
on corporate strategy for energy companies, but it also deals with energy policy and the
similarities and differences between corporate energy strategy, state oil company strategies, and
energy policies at national, provincial/state, and city levels. The comparisons help to strengthen
the participants’ understanding of strategy, to prepare them to better understand the nature of
political risk, and to consider ways for effectively managing the public sector-private sector
interface, and to encourage them to put themselves ‘in the shoes’ of government officials.”

On relevant research: “I would suggest the research that Dr. Harrie Vredenburg and Dr. Jeremy
Hall have been doing in this area, for example ‘Managing Stakeholder Ambiguity’ and ‘The
Challenges of Innovating for Sustainable Development,’ both from the MIT Sloan Management
Review 2005 and 2003, respectively.”

EXAMPLES OF UNIVERSITY CENTERS OF INTEREST:

• Centre for Applied Business Research in Energy and the Environment
University of Alberta, School of Business
http://www.business.ualberta.ca/cabree/
• International Center for Energy and Environmental Studies
IESA, Venezuela
http://www.iesa.edu.ve/newsite/academia/acad_cent9.asp
• Center for Energy and Environmental Policy Research
MIT Sloan School of Management, amongst others
http://web.mit.edu/ceepr/www/
• Public Utility Research Center
University of Florida, Warrington College of Business
http://www.purc.ufl.edu/

NOTABLE COURSEWORK:
The following course descriptions are drawn exclusively from Beyond Grey Pinstripes, a
research survey conducted biennially by the Aspen Institute.

■ Dartmouth University, Tuck School of Business

Managerial Economics (Core Course)
Instructors: Robert Hansen, Sam Wylie, and Victor Stango
“In this course, students examine the principles of microeconomics and how they apply to
managerial decision-making. The first section studies essential concepts such as supply,
demand, and cost, using examples from telecommunications, airlines, and the oil and

-2-
 A Closer Look at Business Education
________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____

aluminum industries…Sessions dealing with social impact or environmental issues include

the discussion of allocation of landing slots at Logan airport, clean air and supply and
demand in the oil industry, and externalities and property rights as it relates to global
warming and sulfur dioxide emissions trading.”

■ The University of Michigan, Ross School of Business

Social Institutions for Energy Production (Elective Course)
Instructor: Thomas P. Lyon
“Balancing the benefits and costs of energy use is one of the major challenges facing humanity. This
balancing act involves a range of social institutions that are supposed to align the incentives of
businesses and individuals with the greater good of people and the planet. But do they really
accomplish this goal? …In most developed countries, the marketplace plays the predominant role in
determining what energy sources are used, and how. But government policy plays an extremely
important role, as well---governments at the local, state, regional, national, and international levels all
mold aspects of energy policy. In addition, non-governmental organizations (NGOs) of all sorts
affect our energy choices, either by influencing government policy or influencing corporate behavior.
In developing countries, government often controls most supplies of non-renewable energy resources,
as well as the development of the infrastructure needed to exploit energy resources…”

■ Yale School of Management

Energy Markets Strategy (Elective Course)
Instructor: Erin Mansur
“In the past 30 years, energy markets have changed from quiet, often heavily regulated, areas
of the business landscape to the some of most dynamic markets in the world economy.
Regulation of oil, natural gas, motor fuel, and electricity markets has been reduced
dramatically in the U.S. and in many other countries. Drawing on the tools of economics, we
study the business and public policy issues that these changes have raised. Topics include
the political economy of deregulation, competition in wholesale electricity markets, market
power and antitrust, and the transportation of energy commodities…”

■ Harvard Business School

Energy (Elective Course)
Instructor: Forest Reinhardt
“The course is devoted to a broad range of energy related topics. It consists of short modules
exploring the energy value chain and the distribution of economic surplus, the basic economics of the
energy industry, innovations in management of risk (price, regulatory, political, competitive, etc),
energy supplies, and energy conservation. Examples of cases include upstream pipeline and crude
transportation projects in Africa, a large coal-fired power plant in China, corn-based ethanol in the
U.S., and energy conservation opportunities in the building sector.”

■ University of Calgary, Haskayne School of Business

Strategic Management in the Global Energy Industry (Elective Course)
Instructor: Wayne Patton
“This is a required course in Haskayne School of Business’s Global Energy Management &
Sustainable Development MBA specialization intended for participants who are already working in
an energy industry or who are planning a career in the energy sector. The focus is on strategic
management of corporations in the energy sector and on government policy formulation for the
energy sector. Because there is such a strong interconnection between energy and the environment,
the course deals extensively with environmental and social impact management…”

For additional courses on related subjects, or to download select syllabi, search thousands of descriptions
at Beyond Grey Pinstripes.

-3-
 A Closer Look at Business Education
________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____

NOTABLE TEACHING MATERIALS:

Materials referenced are meant to represent the diversity of related teaching resources available
at Caseplace.org. Most are available as free downloads to registered faculty members.

■ Background Report: “Productivity of Growing Global Energy Demand: A Microeconomic

Perspective”
Source: The McKinsey Global Institute, November 2006
To date, the global debate about energy has focused too narrowly on curbing demand. Instead, the
best way to meet the challenge of growing global energy demand may be to focus on energy
productivity, which reconciles both demand abatement and energy-efficiency…MGI's case studies
indicate that there are plenty of viable opportunities to boost energy productivity that could translate
into a deceleration of global energy-demand growth to less than 1 percent a year. But shifting this
demand will require new policies that target various large end-user segments and encourage higher
energy productivity.

■ Newspaper Series: The Energy Challenge

Source: The New York Times, 2006-2007
A fascinating series of articles that examine the ways in which the world is, and is not, moving
toward a more energy efficient, environmentally benign future.

■ Case Study: What Price Drilling?

Source: Leeds School of Business, 2006
Who wins and who loses in the debate between oil vs. wilderness?

■ Case Study: The Chad-Cameroon Petroleum Development and Pipeline Project

Source: Harvard Business School Publishing, 2006
On June 6, 2000, the World Bank's and IFC's board of directors was scheduled to vote on whether to
approve funding for the $4 billion Chad-Cameroon Petroleum Development and Pipeline project…
This case describes the project, the setting, and the World Bank's reasons for participating in the deal-
-mainly an opportunity to alleviate poverty, enforce environmental standards, and minimize the
impact on indigenous people. Also describes the very public and very ardent opposition to the
project's environmental, social, and revenue management policies. Faced with a high-risk, but
potentially high-return opportunity to improve conditions in Chad, students, as the directors, must
decide whether to approve funding for the deal.

ONGOING QUESTIONS:
■ Halliburton recently announced its decision to open a new headquarters in Dubai and to
move its chief executive there. Some lawmakers and segments of the U.S. public
protested the move as “un-American”. 4 With the most growth in consumer demand for
the energy sector moving to the East, how will Western-based oil and gas companies deal
with such public relations challenges? Are MBA students being exposed to such
specific- but relevant- concerns?

4
See, for example, CNBC’s “Halliburton’s Dubai Move: Smart or Un-American?”
<http://www.cnbc.com/id/17578801>; or, MarketWatch’s “Halliburton’s Dubai Move-- A Negative for the Dollar,”
<http://www.marketwatch.com/news/story/halliburtons-dubai-move----negative/story.aspx?guid=%7B1BAF9477-
2F81-4624-BE98-A8AB21821E9A%7D>.
-4-
 A Closer Look at Business Education
________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____

■ A scan of many major oil company’s websites indicates an effort to communicate

environmental and sustainability themes to the general public. Are these efforts
noticeable in MBA recruiting practices?

■ Do MBA students’ perceptions of the oil and gas industry change with exposure to it in
their core curriculum? Does the typical entering MBA have impressions or attitudes that
differ significantly from the wider public related to the industry?

RESOURCES:
BeyondGreyPinstripes.org – World’s biggest MBA database, including detailed records on thousands of
courses and information on extracurriculars, university centers, and more, for 128 schools on six
continents.

CasePlace.org – A free and practical on-line resource for up-to-date case studies, syllabi, and innovative
teaching materials on business and sustainability. Created for the educators who will shape our next
generation of business leaders!

________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____

A Closer Look is a monthly series of briefing papers on topical issues in MBA education, based on the research and programs of the
Aspen Institute. The Aspen Institute Business and Society Program works with senior corporate executives and MBA educators to
prepare business leaders who will effectively manage the financial, social, and environmental impacts of the private sector.

Contact Justin.Goldbach@aspeninstitute.org to order reprints or to offer feedback.

-5-