New center to teach successful Koch Industries strategy
11:52:48 AM CDT - Friday, September 22, 2006
By Amy Geiszler-Jones
Market-based management, the economic theory that has catapulted Koch Industries into the largest privately held corporation in the world, will be studied and researched at WSU in a new center that will be the first of its kind in the nation.
The Market-Based Management Center is a joint project between WSU’s W. Frank Barton School of Business and the MBM Institute, a nonprofit research organization founded by Charles Koch and Koch Industries. The center will be housed in the renovated basement of Clinton Hall. The institute is providing the seed money for the center and some of the expertise.
Market-based management is the philosophy of Koch Industries that focuses on market principles in making management decisions to promote innovation and entrepreneurship within the organization. This philosophy has been very successful at Koch Industries.
“We believe that the economic future of the state depends upon reinvigorating and sustaining the kind of principled entrepreneurship that helped build so many Kansas success stories,” said Melissa Cohlmia, communication director for Koch Industries.
The MBM Center at WSU will be an educational and research center focused on teaching the market-based management philosophy and researching experimental economics in a laboratory setting, said John Beehler, dean of the Barton School.
Tony Woodlief, president of the MBM Institute, noted that WSU was chosen for the site of the new center because of its proximity to Koch Industries’ Wichita headquarters. “By establishing the Center in Koch Industries’ hometown, students will have the opportunity to benefit from interaction with Koch company executives who are actively practicing MBM,” said Woodlief.
“We are very excited about the new center, which will provide faculty an opportunity to expand their horizons with the research tools of experimental economics,” said Gary L. Miller, WSU vice president for academic affairs and research. “We expect the center to increase our access to scholars around the world who are interested in this approach to management.”
Abel Winn, an expert on MBM and a colleague of Woodlief’s, will direct the new WSU center. Winn’s academic pedigree includes studying experimental economics with the person who developed the concept — Wichita native and the 2002 Nobel Prize winner in economics Vernon Smith at George Mason University.
Through the center’s curriculum, WSU students will have an opportunity to learn about empowering employees in a large business to think like entrepreneurs. It’s a concept that will dovetail nicely with WSU’s already existing Center for Entrepreneurship, said Beehler.
“Entrepreneurship doesn’t apply to just small businesses,” Beehler said. “Through this center, we’ll be able to focus on building ‘intrapreneurship’ within a large corporation. So now the Barton School will be able to address both small and large businesses. It fits extremely well with the Barton School’s mission in preparing students for the global entrepreneurial marketplace.”
The exercises in the experimental economics lab will include the simulation of markets in which participants make economic choices based on incentives and disincentives. Through this experience, participants can explore and better understand how individual decision-making drives market behavior. The laboratory will also be used for academic research in economics.