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By Dominic Basulto

The case study has its roots in the beginnings of American business school education. Case studies were created as the best way to delve to the essence of corporate affairs and simulate the thinking of top-level managers. The most case study-intensive schools (Harvard Business School and Virginia Darden) employ a mix of 75% case study/25% lecture. While other leading business schools are not as committed to the case study, it is still a fact that all business schools commit at least 30-35% of their classroom time to the evaluation of business cases. After all, the graduates of the leading MBA programs are expected to become the future business leaders and key-decision makers in an unpredictable, increasingly global, environment.

The standard case study combines academic theory with real-world relevance, such that business school students learn theoretical problem-solving skills within a quintessentially business context. Harvard Business School is the acknowledged industry leader, selling approximately 5 million case studies a year to outsiders. Whereas most cases produced by American B-schools are paper-based, the new generation of business school cases from European schools such as London Business School and INSEAD are taking advantage of multi-media resources.


From the Russian perspective, the case study is probably one of the most challenging aspects of a Western MBA program. While the Russian educational system promotes the idea of the pure lecture format and the notion of the "omnipotent professor," the American model calls for active participation of all classmates and the expectation of significant feedback to the professor. Oftentimes, one's grade in a class is 50% determined by remarks made during case discussions, and the need to be prepared for class against the legendary "cold call" by vituperative business school professors can not be underestimated. During the discussion of a case study, the professor may only speak for 20 minutes out of a two-hour class; the role of the instructor is similar to that of an orchestra conductor, who can manipulate the abilities and background of each student, obtain the full participation of the class, and finally arrive at the final "most correct" conclusion. This is why the need for a diverse, experienced peer group becomes paramount- being surrounded by classmates who can offer first-hand accounts of different industries, firms, and sectors allows for the richest, highly-textured case discussions. If the case discussion involves, for instance, the Japanese acquisition of real estate in New York City during the 1980s, and the classmate sitting next to you worked for either a Tokyo investment bank or a NYC real estate developer, there is obvious value-added.


Since no business school is 100% committed to the case study as an instructional tool, a lecture usually precedes any case study discussion. The professor in a basic corporate finance class would present the key underpinnings of, say, the Modigliani-Miller Theory (which deals with the optimal capital structure of a firm) for two hours, and then divide the class into teams of 3-5 students. The students are then given approximately 48 hours to meet, discuss, and analyze the case until the next class meeting. Since the M&M theory deals with the optimal capital structure of a firm, the case could offer one of a number of scenarios, such as the evaluation of a potential debt offering. The case is written in such a way that a number of answers are possible- and the accompanying charts & statistics can be manipulated in a surprisingly robust number of ways. The only common denominator is the underlying question, in this case, "Should the firm make the debt offering?" Almost all cases presuppose the need to "run the numbers" and meet with other members of the case study group. At the next class meeting, the group of 30-50 students file into a special classroom comprised of tiered rows of assigned seats arranged in a horseshoe shape around the professor. The professor will then randomly choose one student to present the "facts of the case." The next two hours largely follow a loosely-adapted Socratic method, whereby the professor quizzes students on the key facts of the case, testing the understanding of the basic facts before leading students to state and defend the underlying assumptions of their conclusions. As in business, there are often no "right" answers- only a consensus of what the "right" answer should include. Since the case is based on an actual event at a real company, the professor often informs the students at the end of the class what the actual response of the firm had been and whether it was successful or not. Some MBA programs with strong links to industry go one step further. The professor may announce the "surprise" appearance to the class of the actual CEO of the firm, who will recount his precise reasoning process and whether his actions were effective.


Since the typical 2-year MBA program consists of anywhere between 8-12 core courses, and 10-12 elective courses, there are obviously a large number of cases- finance cases, strategy cases, marketing cases, as well as cases on more specialized topics such as derivatives, corporate governance, or venture capital. The important skill becomes to reduce anywhere between 5-20 pages of text and a collection of charts, graphs, and tables into a final overall conclusion that is supported by a coherent theoretical basis. For instance, the key point of an investment case might involve a consideration of the Markowitz efficient frontier, while a strategy cases might revolve around the prudent application of such frameworks as the "Porter Five Forces" model or the "Value Net" model. While most cases can be simplified to a "model" or a "framework," the most challenging part becomes the determination of the correct parameters or interpretations of these models and frameworks. While any business school student may know the rudiments of the CAPM asset-pricing model, it is only the graduates of the leading finance departments who can most precisely determine the values for such parameters as beta and think fast on their feet about real business problems and how best to apply a theoretical model to day-to-day issues.

In conclusion, young Russian professionals preparing to enter a competitive Western business school either in Europe, Canada, or the U.S. should realize that the case study is the preferred method of instruction at the leading MBA programs in the world. Moreover, most multinational financial services companies and strategic consulting companies now use mini-case studies during the interview process in order to determine the most qualified candidates, so the ability to "crack a case" becomes a sine qua non of obtaining multiple job offers. Most business school web sites will have hypertext links to case studies and other educational-related sites also have information on the basic frameworks and models used in case discussions.

Dominic Basulto is a 1998 graduate of Yale School of Management and currently works as a consultant for Pericles ABLE (American Business and Legal Education) in Moscow. Pericles offers a full MBA advising program.

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