New Course at Ross Provides Real-World Environmental Regulation and Government Policy Experience
MBA students role play with computer simulation game.
ANN ARBOR, Mich.---Businesses are increasingly calling upon managers to deal with issues seemingly beyond their control such as governmental actions, media attention and public scrutiny. A new course, “Non-market Strategy: Setting the Rules of the Game,” offered for the first time last winter at the Stephen M. Ross School of Business at the University of Michigan gives students real-world insight by examining business strategies for dealing with these types of issues and their public policy implications.
Martin Zimmerman, clinical professor of business administration at Ross, who along with Thomas P. Lyon, the Dow Chemical Professor of Sustainable Science, teaches the course which reproduces the dynamics of environmental regulation-making. Topics addressed include environmental and safety regulation, international trade policy, corporate social responsibility and the integration of market and non-market strategies.
An innovative element in the course---the "Gas Mileage Game"---immerses students in real-world problem-solving by allowing them to take on the competing roles of auto companies, government representatives and non-governmental organizations.
In the game, congresspersons decide what, if any, new gas mileage regulations to enact while trying to maximize their chances to be re-elected and do what is best for their constituents. Auto companies decide whether to adopt new technologies that will improve gas mileage and try to influence government regulation while preserving sales, market share and profits. Advocacy groups strive to persuade companies and the government to raise car gas mileage standards. Finally, all groups consider what is best for the country and the environment and factor this into their decisions.
According to Nathan Bos, assistant research scientist in the School of Information and co-developer of the game along with Zimmerman and Lyon, the game draws upon the conceptual frameworks from economics, political science and strategic analysis.
Bos said that questions kept in mind during game development were: What is it like to be an automotive executive deciding whether to upgrade your fleet's fuel efficiency or a congressperson deciding if new environmental regulation is warranted?
"Tom and I relied heavily on Marty for the aspect of realism," Bos said. "We would frequently ask things like, 'what do government and company representatives really talk about when discussing future regulation, and what arguments do environmental advocacy groups make and how do companies respond?'"
Zimmerman, who retired from Ford as group vice president of corporate affairs in 2004, said the discussion often is about environmental benefits, politics, and more importantly costs. Bos added that companies and non-government organizations both commission studies but often receive very different cost estimates. "The government then has to sort through competing claims and decide what the true cost is to consumers and business," he said.
Bos, Lyon and Zimmerman reproduced this dynamic and tested it last winter on students who provided valuable feedback, according to Zimmerman. "We really benefited from their input. It was a learning experience for them and us," he said.
Zimmerman acknowledged it is difficult to compress real-world issues into a three-hour game, and the complexity of the interactions can be a challenge for students. "We were cautious about adding complexity. If it were too complex, students wouldn't get it; and if it were too simple, they wouldn't learn," he said.
Zimmerman hopes the course appeals to a broad range of students. "I would like to see a nice mix of students from the Ross School, School of Natural Resources and Environment and Gerald R. Ford School of Public Policy take the class," he said.
The game has no winner and students aren't given incentives. "The essence of it is learning. The students are graded on their debriefing---the strategies they used for the issues they encountered," Zimmerman explained.
Zimmerman and Bos anticipate the game will evolve over time to reflect the real world. "We may have to change the market algorithm next year to reflect higher gas prices," said Bos. "American consumers may be starting to care about higher gas mileage more than in the past and may be willing to pay more for fuel efficiency. We will pay close attention and think about ways the game can and should be changed to reflect current conditions," he added.
In his high-profile position at Ford, Zimmerman was responsible for corporate economics, governmental affairs, environmental and safety engineering, corporate citizenship and the Ford Motor Company Fund. Before joining Ford, Zimmerman was a faculty member at the Ross School and served as chair of the business economics group. He returned to the Ross School faculty in January.
Zimmerman served on the Advisory Council of the National Aeronautic and Space Administration and was a faculty member in the Sloan School of Management at the Massachusetts Institute of Technology (MIT) before joining the Ross School faculty the first time in 1983. Zimmerman interrupted that assignment to serve one year as senior economist on the President's Council of Economic Advisors.
Zimmerman, who received his bachelor's degree from Dartmouth College and doctorate from MIT, is a member of Phi Beta Kappa, the Conference of Business Economists and serves on the National Commission on Energy Policy and the board of the National Bureau of Economic Research.
This project was part of the IT Champions program led by Michael Gordon, the Arthur F. Thurnau professor of business administration and professor of business information technology.
For more information, contact: