How certain is professor Howard Kraye that his students have a keen business sense?
Fifteen hundred dollars certain.
Kraye gives students in his “supply chain management and operations management” class $1,500 of his money to develop a business that can manufacture, market, sell and distribute a product.
Kraye said he never asked the University for the money, because if students were going to be invested, he needed to be invested, too.
“I tell the students it’s an ‘A’ or an ‘F,’” he said. “There’s no in between. I want them to know that I’m at risk, too.”
Success requires that students at least pay back the startup funds. In previous semesters, profits were donated to a charity of the students’ choosing. Last semester, students raised $27,000, helping UNM exceed its $1 million United Way goal.
This year, after students said that keeping profit would motivate them to make more money, Kraye decided to allow students to retain profit as long as they donated at least $500 to charity.
“What I explain to them is that students today, despite all the negative things that we hear about them, are much brighter, much more capable than previous generations,” he said. “The difference is we haven’t challenged them. If you give them a challenge where if they don’t succeed they pay a penalty, they respond. We just don’t push them.”
The education system, Kraye said, is set up for students to be sponges, absorbing information to regurgitate on tests or papers. He said the class allows students to turn ideas and skills at Anderson into financial success elsewhere.
So far, Kraye said, students have been successful. He hasn’t lost money.
This practical, not theoretical, class approach is the only one in the country, Kraye said, and it allows students to learn all aspects of running a business. He said Southwestern Business Deans Association, an organization of business school deans, voted his course the country’s most innovative.
“It’s also been featured on the cover of Businessweek,” he said. “It’s gotten some pretty good rave reviews.”
Darrell Garcia, one of Kraye’s students, said the class gave him real-world business experience a textbook couldn’t have.
“We have gone through the entire process with minimal guidance,” he said. “The fact that we are dealing with real money and real vendors means that we have to truly think critically about each decision that we make. It has truly opened my eyes to the world of business and entrepreneurship.”
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Another student, Hector Mejia, said the course should be a capstone project to incorporate everything MBA students have learned in the program. He said he felt thrust into a cutthroat learning experience.
“There are some valuable lessons … I won’t downplay those lessons,” he said. “But I don’t think I’ve learned them as a direct result of taking this particular class. My own personal views are that real-world
problem solving is great for learning how to apply concepts and ideas, but we still need to learn those basic concepts and ideas.”
Kraye said that students should pursue self-employment rather than becoming slaves for large companies.
“The purpose of business is to raise the standard of living for everybody in the world,” he said. “If we’re not doing that, business doesn’t make any sense. They finally get it at the end of class. I explain to them, ‘You’re part of a community, and you as a business cannot exist without the community. That’s why you need to give back to the community.’”
