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Business Plan Proposals for Inner-City
Neighborhoods: A Strategic
Management Assignment for MBA
Students at Loyola University Chicago Jill W. Graham
ABSTRACT. Beginning in 1992, MBA students serve good purposes (Hassel, 1983; Service,
enrolled in a capstone Strategic Management course Graduates of such institutions are encour
1993).
at Loyola University Chicago have, as their major to be for others, . . . leaders that
aged "persons
course researched and an
assignment, prepared would move society to be the concrete embod
original business plan proposal to provide a needed iment of the virtues of and
justice charity"
good or service, aswell as employment opportunities,
(Harvanek, 1988, p. 11).
to residents in one of Chicago's underserved inner
For students of business, the
integrative
city neighborhoods. This paper describes the genesis
capstone coursein strategic management is an
of the project, how it works, and what the outcomes
have been to date. The is arguably especially appropriate time and place to try out
pedagogical model
for MBA in or near any area a.wide range of business knowledge and skills for
appropriate programs
that is economically be it urban or socially beneficial purposes. Because the course
underdeveloped,
rural. typically occurs just before the
graduation,
experience of using business education for good
ends is more likely to carry over to post-gradu
Introduction ation life than a pre-professional experience at
the beginning of the degree program. This article
for of the describes an assignment employed in a capstone
Opportunities practical application
theoretical and technical skills Strategic Management course of the MBA
knowledge
in the classroom are a vital part of curriculum at Loyola University in Chicago, a
acquired
professional education at many institutions. This Jesuit institution.
action orientation can have a social dimension
at universities that share the Jesuit educational
philosophy of pursuing educational excellence for Context and rationale for the assignment
the purpose of enabling and inspiring students to
instructors provide students only with traditional Once the groups are defined in terms of
and cases, which assume
readings profit maxi membership and initial intent, they conduct
mization to be the sole purpose of business library and field research outside of class over a
students are to assume The final two
enterprise, encouraged period of approximately six weeks.
that those examples are not only normal (in a class sessions of the quarter are devoted to the
statistical sense) but also normative. That presentation and discussion of each business plan,
approach risks narrowing the range of alterna a written version of which is also submitted for
tives students are likely to consider for their own evaluation. students are encouraged to
Finally,
life choices, rather than widening and enlight pursue implementation of their business
pro
ening it. And given that most (if not all) of the posals, either personally or by providing them to
MBA coursework students have had prior to the community resource person(s) who helped
taking the capstone course is likely to have been students get to know the needs and resources of
"normal", it is especially useful to expose them the chosen neighborhood.
to some unconventional possibilities just before
they leave the university.
The selection of readings and cases assigned Business instructions
proposal
in my Strategic Management course includes
traditional classics of the field, as well as a As for what is included in the business plan,
sampling of "new age" management literature1; students are advised to think of it as a document
case studies of General Electric and IBM, as well that might be presented to potential backers of
as Ben & Jerry's andexamples of
inner-city their proposal. An executive summary should
businesses. In addition, the major an overview of the business concept and
entrepreneurial provide
course project since 1992 has been the develop its rationale. The of the business
body plan
ment and proposal of a detailed
plan business should demonstrate the feasibility of the proposal
both to serve and provide employment oppor by identifying a location for the business,
possible
tunities for a Chicago inner-city neighborhood. and describing relevant characteristics of the
The project assignment is designed to provide community it is designed to serve; overviewing
students with the opportunity to apply knowl the day-to-day operations of the business; pro
edge learned in all core business areas, and to do viding defensible estimates of the capital needed
so toward a significant, real-world strategic to get the enterprise started, and of its finances
purpose. during the first three years of operation; outlining
its ownership structure; identifying potential
sources of start-up and providing a
capital;
Description of the inner-city business timetable for implementation.
project
Overview and timetable for the assignment Resources for the project assignment
a series from The Wall Street Journal prompted discern what (if any) consensus emerges about
by the riots that followed the initial acquittal of the desirability and feasibility of each of the plans,
officers with beating Rodney relative to one another.
police charged
King. Also included is a series of articles about The instructor's personal evaluation is based
South Shore Bank, the Women's Self on the components listed earlier of what the
Chicago's
and various other potential business should contain. These are
Employment Project, plan proposals
sources for start-up capital and technical assis described in more detail below:
tance to
fledgling businesses in inner-city ?
Documented description of the relevant
neighborhoods, and some recent examples of
characteristics of the community the
such business ventures.2
business is designed to serve (e.g., demo
Because it is essential that students familiarize
graphics, needs, resources, existing com
themselves with the neighborhood their business
to serve, to petition and other environmental factors).
proposal is designed they need ?
A detailed overview of the operations of the
combine library research with on-site investiga
proposed business (e.g., location and
tion. A compilation of "urban economics
capabilities of physical facilities, work flow,
sources" available at the Loyola University library
to assist with materials procurement, staffing and training,
is provided the former. For the
are given a map organization and control).
latter, students showing the 77
?
areas a A marketing plan (e.g., pricing, distribution,
individual community in Chicago, list of
(excluding his or her own) from the per of delight and gratitude, that
plans expressions noting
spective of a
socially responsible venture capi they are glad finally to encounter information
talist, i.e., an investor interested in promoting about and encouragement to use their new
social justice as well as earning respectable rates business and skills for a purpose that
knowledge
of return. Written comments are also solicited. goes money. About an
beyond merely making
These forms are reviewed the instructor to react
by equal number by challenging the assign
90 Jill W. Graham
ment, asking why they can't propose a new In their written course evaluation forms at the
business to serve residents of Chicago's "Gold end of the school term, several students have
Coast" lakefront luxury condominiums, instead made specific comments about the inner-city
of an inner-city neighborhood. Most students, business project (see Table I). While there is no
however, accept the assignment without way of knowing if those comments are repre
comment, presumably on the premise that sentative of the views of all students who have
defining course requirements is within the pre taken the class, the majority express appreciation
rogative of academic authority. for the project assignment.
The response provided to those who initially
challenge the assignment goes beyond asserting
professorial prerogatives in several ways. The first Business plan proposals
argument is in terms of balance. Most business
cases studied in MBA courses concern A total of 18 business
large plans have been prepared
well-known firms rather than small neighbor during the two iterations of the course com
hood enterprises; designing a business venture for to date. have been for
pleted They proposed
an inner-city some locations in one of three areas
neighborhood provides specific primary
much-needed balance. A second argument in Chicago: the predominantly African-American
concerns the value of using strategic management south and west sides of the city; and the north
analytical skills in ??familiar settings; doing so side where relatively recent immigrants from Asia
tests both students' theoretical understanding and and Latin America tend to congregate. The types
their technical skill at applying strategic concepts of businesses proposed have included a variety
under novel environmental conditions. Finally, of retail services currently
absent from the target
especially in the context of a Jesuit
university, a grocery store, laundromat,
neighborhoods (e.g.,
an inner-city business
assignment the and take-out or have focused on
exemplifies pizza shop);
Ignatian call to be "persons for others," applying employment creation efforts (e.g., pallet con
knowledge with a preferential "option for the struction, a bindery, and casual contract labor
poor" (Harvanek, 1988, p. 11). providing temporary services to other organiza
TABLE I
Student comments
from those course evaluation forms where students chose to comment on the business
Excerpts inner-city plan
project:
1992: 1. the business proposal project was a good idea. I enjoyed the project and learned a lot of
I think
practical business ideas.
2. The business plan was a good personal and group experience. I learned much more than from a
"book" course.
3. It's rather late in the grad school curriculum, or in students' lives, to try to inspire a commitment
to do . . . The was a tool.
good. project good learning
1993: 1. The research project in an economically depressed area was ? highlight of the course.
2. The was an excellent
project experience.
3. The business plan should not be restricted to helping inner-city communities. Not everyone is
interested in this segment of the world.
? as well need products
4. The project was done well opened eyes to other elements of society which
and services.
TABLE II
Business plan proposais, 1992 and 1993
"Apple Blossom Day Care Center" Self-supporting facility to be located in a church in the Hispanic Logan
Square neighborhood on the near northwest side.
Limited" Full-service grocery store on the south shore.
"Biggs
*n Copy" Service access to and as well as resume
"Compute providing computer copying equipment, writing
and job search skills, to residents of the near west side.
Inc." Collection and of waste materials from commercial and multi-unit on
"Eco-Cycle, recycling properties
the near west side.
"Ellis Security" Provision of a range of security systems to low-to-middle class apartment buildings on the
south side.
"Good Clean Fun, Inc." Laundromat with children's entertainment facilities near the Robert Taylor public
housing project on the near southwest side.
"Grantron Development Corp." Housing rehabilitation, including construction skill training atWashburne Trade
School, on the near west side.
"Hacienda House" SRO housing for new immigrants surrounding a courtyard of stalls selling crafts and
foodstuffs from the native lands of the residents, on the north side.
Law office (sole proprietorship) Legal services to low income residents of the west-side Austin neighborhood.
"Matt's Pizza" Take-out near the Robert on the near southwest side.
pizza Taylor public housing project
"Mid-Town Finance" Financial institution for small business and real estate development in the Humboldt Park
community (west side).
"Pallet Manufacturing Corp." Manufacture and repair of wooden pallets, training and employing residents on
the near west side.
"Rose Petal" Store selling women's clothing (custom-made by newly trained community residents) in the Rogers
Park neighborhood on the north side.
"Stateway Gardens Bakery" Neighborhood bakery next to a public housing project on the near south side.
"Stephen's Supper Club" Restaurant and entertainment facility to serve the west-side Austin community, as
well as to services.
provide catering
"Stuff It" Contract labor and fulfillment house in the Rogers Park/Edgewater neighborhood (north side).
"Triumph Bindery" Low-to-medium skilled employment, cutting, folding, and binding printed material in
Humboldt Park (west side).
"WHALL Corp." Housing rehabilitation in the Humboldt Park neighborhood on the west side.
92 Jill W Graham
Loyola is a very supportive environment for lay time and energy required to launch an earlier
University's reference librarian for business, and (85% of whom are part-time, with an average age
the Associate Vice President for Government & of 27), twelve sections a year
taught by three
Community Affairs. different instructors are available at Loyola. It is
During the 1993?94 academic year, after two conceivable that some students, having heard of
iterations of the Strategic Management course the project assignment required in my version of
with the inner-city business project, I was Strategic Management, might select or avoid the
a sabbatical leave as a Loyola University course on that basis (although no shift in the
granted
Ethics Fellow to
study value-driven
strategic typical class size of 35 to 40 is apparent so far).
management. That research led to significant Those wishing to avoid the course because they
revisions in what I teach about strategic man are hostile to the idea of socially responsible
agement, specifically about enterprise strategy, business are
arguably the very students who
concerns ?
which the purposes both economic might benefit most from exposure to a wider
?
and noneconomic for an organization's very range of personal career options. On the other
existence. New teaching materials have been hand, those my
choosing course because of its
developed that
include enterprise strategy alter project assignment may benefit from support for
natives alongside more traditional varieties of their personal inclinations to serve the commu
corporate, business, and functional level strate nity with their business skills.
gies (Graham, 1994). This evolution in my Perhaps the greatest challenge is coping with
intellectual understanding of
strategic what the disappointment that, as far as I know, none
management includes is directly traceable to of the inner-city business plans has (yet) been
experimenting with a community service project implemented, either by its authors or by others
in the classroom. Using this conceptual frame in the community to whom the proposal was
work in the nextiteration of the MBA strategy given. As time
goes on, and the course is
course, moreover, should provide additional repeated, it would
be helpful to share with each
legitimacy in support of the inner-city business new class of students that some of their prede
project to those students who question the cessors' business plans have been put into
strategic plausibility of pursuing business oppor operation. Unless former students voluntarily
tunities in the inner city. respond to my invitation to keep me informed
about business plan implementation, however,
there is no way to know for certain whether no
Potential obstacles and concluding plans have been or whether I
implemented,
comment simply haven't been informed of it.
some university not be
Finally, settings may
The start-up costs of collecting informational as supportive of community service projects as
materials about inner-city business and estab Loyola has been. And even at Loyola, the encour
contacts are not inconsider agement and assistance my project assignment has
lishing community
able. Having a history of community received have come more from the larger
personal
involvement is a great help. Even so, I found the University community than from within the
Business Plan Proposals for Inner-City Neighborhoods 93
2
School of Business. While I am aware of several Citations for the case material taken from the
individual kindred spirits in the business school, business press are included in the reference section.
shakeout. colleagues who teach strategic Scott, Mary and Rothman, Howard: 1994, Companies
Perhaps
who so far have with a Conscience (Citadel Press, New York).
management, expressed polite
interest in my course while to Service, Allan L.: 1993, 'Professional Education in
project continuing
Business from the Jesuit Perspective'. Conversations
use conventional in their own
teaching methods on Jesuit Higher Education 3, 16?17.
classes, will eventually be persuaded of the
strategic importance to the University of com
Commitment', Harvard Business Review (May-June), Thomas, Paulette: 1992, 'Credit Where Due? Small
87-98. Businesses, Cited as Key to Recovery in the Inner
Gupta, U'dayan: 1993, 'Community-Loan Funds City, Are Starved for Capital', The Wall Street
Bridge Inner-City Capital Gap', The Wall Street Journal (June 11), Al, A12.
Journal (January 13), B2. Wessel, David: 1992, 'Small Victories: Two Unusual
Labich, Kenneth: 1993, 'New Hopes for the Inner Lenders Show How to Turn Inner-City "Bad
City', Fortune (September 6), 82-90. Risks" into Good Business', The Wall Street Journal
Lev, Michael A.: 1992, 'Kneading Idealism', The (June 23), Al, A16.
Chicago Tribune (September 8), Cl, C2. Winerip, Michael: 1994, 'Jump-Starting Capitalism',
Milbank, Dana: 1992, 'Doing Well: Finast The New York Times (August 7), 4A25-26.
Supermarket Chain Discovers Challenges and
Surprising Profits in the Inner City', The Wall Street
Journal (June 8), Al, A4.
O'Brien, Timothy L.: 1993, 'Making Entrepreneurs Loyola University Chicago,
of the Poor May Lift Some off Federal Aid', The Department ofManagement,
Wall Street Journal (January 22), Al, A4. Chicago, IL 60611,
Quint, Michael: 1992, 'A Bank Shows It Can Profit U.S.A.