Business Plan Proposals for Inner-City Neighborhoods: A Strategic Management Assignment

for MBA Students at Loyola University Chicago

Author(s): Jill W. Graham
Source: Journal of Business Ethics, Vol. 15, No. 1 (Jan., 1996), pp. 87-94
Published by: Springer
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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

Running a successful business in a competitive

environment is always hard work; doing so in a
Jill W. Graham is Associate at serves
Professor ofManagement way that noneconomic social goals, as well
Loyola University Chicago, where she teaches the as meeting minimal economic requirements, only
capstone strategy course to both undergraduates and increases the challenge. The nobility of the effort,
MBA students. Her research concerns various forms of
however, is commensurate with the scope of the
virtue in organizational life, including principled dissent,
ideals that motivate it.
organizational citizenship behavior, activist loyalty,
Exposing business students to a wide range of
servant leadership, and value-driven strategic manage
ment. Graham received her Ph.D. in organization value-driven strategic alternatives, so that they
behavior from Northwestern University in 1983, and can make more informed choices of where and
at the British Columbia how to devote their energies and talents, is an
taught University of before
joining the Loyola faculty in 1986. important part of the educational process. If

Journal of Business Ethics 15: 87-94, 1996.

? 1996 Kluwer Academic Publishers. Printed in theNetherlands.
 88 Jill W. Graham

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

in the ten-week quarter, a class The information sources needed to design a

Early following
session devoted to background information about useful and feasible business are various.
plan
inner-city business, students tentatively select a Some are accessible in a library; others must be
to serve and/or a gathered first-hand in the community. To help
specific neighborhood specific
business concept to develop. If any of these pre get the students started, a set of background
liminary statements of intent resembles another, readings about business in the inner city is
a collaborative effort between students is sug included in a course reading packet, and early
Students may also form small groups on in the term is studied and discussed as case
gested.
their own, and submit a joint preliminary state material on which to practice strategic environ
ment. To date, nearly all students have done the mental analysis techniques. The material has been
in groups of two to four members. collected from the business press, beginning with
assignment
 Business Plan Proposals for Inner-City Neighborhoods 89

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

Chicago civic and community organizations, and promotion).

?
to serve Mathematically verifiable financial analysis,
the names of community activists willing
as resource persons to Loyola students who wish including:
a to a part of the Chicago An itemized estimate of funds needed to
personal introduction
get the business started and it
community with which they are unfamiliar. keep
were running until it breaks even (at or before
These individuals identified either by the
year three of operations).
instructor (as a result of contacts made in the
course Pro-forma income statements for the first
of assorted community involvement
or by a Loyola three years of operations (including a
activities), colleague who served
as the University's liaison to community schedule of wage/salary costs, and
groups.
are also to draw on explanatory footnotes to defend assump
Students encouraged their
that of people tions about growth, methods of allocating
personal experiences (and/or they
know) living/working/studying/volunteering in expenses, etc.).
?
Proposed ownership structure, and poten
Chicago's inner-city neighborhoods.
tial sources of initial capital.
?
Realistic timetable for implementation.

Evaluation criteria and procedures

Two forms are employed

of evaluation to assess Project outcomes
the business plan proposals, one involving peer
review, and the other evaluation the Student reactions
by
instructor. Before the
class presentation of each
of the business plans, a rating form is circulated When first learn about the major course
they
to students. Each student is asked to rank the project assignment, a few students react with

(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.

5. The final is a very good

project idea. However, I do not think it should be constrained to an
inner-city proposal; any business venture in any area should be permitted.
6. The business plan project was a very interesting undertaking. Definitely a better alternative to the
projects for other sections of the course.
 Business Plan Proposals for Inner-City Neighborhoods 91

rions). A complete list of projects is provided in Personal satisfaction

Table II.
If students utilized the assistance of a com As one of the (in)famous "aging baby boomers"
resource
person in researching the neigh who was a student activist in the sixties, is an
munity
borhood, copy aof the completed business inveterate idealist, but who also has learned to

(or of a version of it revised in response appreciate the organizational born of

proposal efficiency
to instructor comments) may be provided to that market discipline, the underlying values and goals
resource person. this is not an explicit of socially responsible business are highly
Although
course requirement, students are strongly encour appealing. Personally, I teach in a business school
to share their business on in
aged plans unless they and do research various forms of virtue
intend to implement them themselves. Where organizations as a form of lay ministry, which I
have been shared with community resource understand as using one's gifts and graces to serve
plans
persons, feedback to the instructor has been God's purposes as well as one can discern them,
uniformly positive. All those on the resource list through prayer and reflection, and with the help
have volunteered to stay there when the course of community.
is offered again. I have found that the Jesuit community at

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

ministry, even that of non-Catholics. When I first experiential component in theStrategic

conceived of the inner-city business
project, I Management course - a computer
specifically,
a Jesuit a ? was as
consulted with theologian at Loyola, ized business simulation great or greater
colleague who has a strong interest in business than that required for the
inner-city business
and economics. His enthusiastic support for project. And, once launched, the latter requires
the project was in much less instructor effort to monitor and keep
proposal extremely helpful
bolstering my confidence to experiment with going than does a computer game.
new in a course that I had in Another concerns student self-selec
something taught challenge
a conventional manner for six years. tion. Although the capstone course in strategic
Helpful
technical support was also provided by both the management is required of all MBA students

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.

the prevailing view seems more concerned with

demonstrating that teaching business within a

Jesuit university does not make any difference, References

rather than with finding ways to show how it
does. Graham, Jill W.: 1994, 'Value-Driven Strategic
And yet there is reason for Viewed Management', Working paper, Department of
hope.
strategically (not to mention ethically) the "pre Management, Loyola University Chicago.
can Harvanek, Robert F., S. J.: 1988, The Jesuit Vision
vailing view" described above be faulted for
of a University', Department of Theology, Loyola
imprudently disregarding the potential competi
University of Chicago, Chicago.
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Hassel, David J., S. J.: 1983, City of Wisdom: A
marketplace) offered by the Jesuit ethos that is
Christian Vision of the American University (Loyola
"action-oriented, aimed at producing change
University Press, Chicago).
agents, leaders who will help to produce a more
Renesch, John (Ed.): 1994, Leadership in a New Era:
human . . . 1988, p. 9). In
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the current era of industry overcapacity among (New Leaders Press, San Francisco).
universities in general, and business schools in Renesch, John (Ed.): 1992, New Traditions in Business:
particular, distinctive strategic competencies offer Spirit and Leadership in the 21st Century (Berrett
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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

munity service projects such as the inner-city

Articles on inner-city businesses
business proposal that I plan to continue assigning
in my class.
Abramowitz, Michael: 1992, 'Stepchildren of Urban
Policy Are Agents of Inner-City Change', The
Washington Post (June 24), A17.
Acknowledgements
Bacon, Kenneth H.: 1993, 'Inner-City Capitalists
Push to Start a Bank for Their Community', The
While the idea for the course
project described
Wall Street Journal (January 19), Al, A8.
in this paper is the author s, invaluable assistance
Copeland, Monica: 1992, 'Englewood Dwells on
and advice were received from other members of Future: Home-Building Effort May Spark
the Loyola University community, including The Chicago Tribune (May
Community Renewal',
Thomas G. Fuechtmann, John Haughey, S. J., Cl, C4.
14),
and Susan H. Schmidt. Their help and encour Hinds, Michael.: 1994, 'Inner City Market
DeCourcy
agement are gratefully Blossoms', The New York Times (May 14), Bl.
acknowledged.
Diesenhouse, Susan: 1993, 'As Suburbs Slow,
Supermarkets Return to Cities', The New York
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Gaiter, Dorothy J.: 1992, 'Profits with Honor: More
1
In the past, I have used Renesch's 1992 collection Community-Development Organizations Create
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and/or Scott & Rothman's (1994) compilation of Grzywinski, Ronald: 1991, 'The New Old-Fashioned
"companies with a conscience" are under considera
Banking: For Chicago's South Shore Bank, Success
tion. Is a Combination of Business Discipline and Social
 94 Jill W Graham

Commitment', Harvard Business Review (May-June), Thomas, Paulette: 1992, 'Credit Where Due? Small
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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,
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and Follow a Social Agenda', The New York Times

(May 24), 1. Email: jgraham@orion.it.luc.edu