EPL 2211

INTRODUCTION TO BUSINESS

Introduction
OBJECTIVES OF THIS SESSION

• Introduce the faculty and the class objectives

• Introduce the assessment process

• Review the essentials of what a business is about

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OBJECTIVES OF THIS SESSION

• Introduce the faculty and the class objectives

• Introduce the assessment process

• Review the essentials of what a business is about

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VINCENT REUTER

After having studied law at the University of Liège and European Law at the
University of Ghent, Vincent Reuter worked as a lawyer for the National Railway
Company, for the Institut Provincial des Classes Moyennes in Liège and in 1980
started a career at the Société Carbochimique in Brussels, a chemical company
engaged in the manufacturing of ammonia, nitric acid and nitrogen fertilizers.
After a take-over of the company by the Finnish group Kemira in 1987, he
occupied various positions as a lawyer, material resources coordinator and
managing director Belgium.
In 2002 he was hired as managing director by Union Wallonne des Entreprises,
the Walloon business association, where he stayed until 2017.
He is now advisor at the Cabinet of the Walloon Minister of Economy Willy
Borsus, Commissioner of the Walloon government at SRIW (the regional
investment company), Chairman of the Board of Credendo (the Belgian Export
Credit Agency), Chairman of the Board of the Belgian Committee of ICC
(International Chamber of Commerce) and holds director’s mandates in Fondation
pour l’enseignement (a private foundation which promotes secondary technical
education), EPM (a private management school) and Delhez (a family owned
company)

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BENOIT GAILLY

Professor Gailly has a Master in Engineering and a PhD in Applied Mathematics from
UCLouvain, a European Master’s Degree in Society, Science and Technology from
Roskilde University, and an MBA from INSEAD.
After a career as a management consultant at McKinsey, he is since 2001 a Professor of
Innovation Management and Strategy in the Louvain School of Management. He is also
Program Director of the Executive Master in Innovation Management
(www.LouvainInnovation.be).
His research focuses on innovation-based strategies and capabilities (see
www.NavigatingInnovation.org), as well as innovation support systems. He is the author
of numerous scientific publications on innovation and entrepreneurship, as well as of the
books Developing Innovative Organizations (Palgrave, 2011) and Navigating Innovation
(Palgrave, 2018).
He is a board member and advisor for several innovation networks and international
companies, both large industrial firms and technology start-ups. Since 2014 he has also
been an associate member of the Board of BiRD (Belgium Industrial R&D) and the
Secretary General of the GRD Network (www.GRDNetwork.be).

Contact:
Benoit.Gailly@UCLouvain.be (by appointment only)

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CLASS OBJECTIVES

• Introduce the key elements of a business as well as the main

challenges of its management, through the review of the key
aspects of a business model
• Apply those concepts to concrete examples

In theory, there is no differences between theory and practice.

In practice, there is.

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MAKING SENSE OF WHAT YOU SAY OR WRITE
Silence is better than unmeaning words. (Pythagoras)

“If language is not correct, then what is said is not

what is meant;
if what is said is not what is meant, then what must be
done remains undone;
if this remains undone, morals and art will deteriorate;
if justice goes astray, the people will stand about in
helpless confusion.
Hence there must be no arbitrariness in what is said.
This matters above everything.”
The Analects of Confucius, Book 13, Verse 3

Reference: Podsakoff et al. (2016). Recommendations for creating better concept definitions in the organizational, behavioral, and social
sciences. Organizational Research Methods, 19(2), 159-203. Van Maanen, J. (1995). Style as theory. Organization Science, 6(1), 133-143.
Billig, M. (2013). Learn to write badly: How to succeed in the social sciences. Cambridge, UK: Cambridge.

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HOW TO PLAY TENNIS
The illusion of explanatory depth – rewarding novelty over truth

“Hit the ball with your racket

and send it in the opposite rectangle
once more than your opponent”

“Numerous studies have demonstrated that when people are forced to think hard about what
they are shown, they remember it better […].”

“For every complex problem there is a simple solution that is wrong.”

(G. B. Shaw)

“Nine-tenths of the approximately 100 branded management ideas

I’ve studied lost their popularity within a decade or so.” (J. Birkinshaw)

Source; The Economist (2010) “Learning difficulties”, October 15th, p. 87; Alter, A. L., Oppenheimer, D. M., & Zemla, J. C. (2010).
Missing the trees for the forest: A construal level account of the illusion of explanatory depth. Journal of Personality and Social Psychology,
99(3), 436. Shapiro, E. C. (1997). Fad surfing in the boardroom: Reclaiming the courage to manage in the age of instant answers, Capstone

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Source: FX, “Chief Bullshit Officer”

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CLASS SCHEDULE INDICATIVE

Tuesday 7 Feb Class introduction

The firm : definition and key characteristics
Tuesday 14 Feb Business planning: objectives and key issues
Tuesday 21 Feb Business opportunities : sources of innovation and first mover advantage
Tuesday 28 Feb Business opportunities (ctd)
Tuesday 7 March Strategic positioning : resources, environment and purpose
Tuesday 14 March Strategic positioning (ctd)
Tuesday 21 March Business models: product/market and value chain
Tuesday 28 March Organizations: entrepreneurial behavior, size, governance and partnerships

Tuesday 18 April Financials: valuation, key financials and funding

Tuesday 25 Apr Group presentations (1-5)
Tuesday 2 May Group presentations (6-10)
Tuesday 9 May Group presentations (11-15)
Tuesday 16 May Group presentations (16-20) AGOR12
Tbc Oral exams

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OBJECTIVES OF THIS SESSION

• Introduce the faculty and the class objectives

• Introduce the assessment process

• Review the essentials of what a business is about

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EVALUATION
• Evaluation is based on a group work (class participation, report, presentation and summary – 50%) as
well as an oral exam (50%). Both will focus in particular on the ability to understand and apply the
concepts learnt in class
• For the group work, students split first in (maximum) 20 international teams and register individually
to Moodle. Each group then selects a particular case study (first come, first served), announce its
choice in the Forum and register its group on Moodle, before Feb 28.
• Groups will present and discuss during the last classes the synthesis of their findings regarding the
management of the SME selected (20 min - max 14 slides) and write an executive summary (max 14
p.*, excl. cover and appendix) supported by empirical data (see xls file; put in appendix of executive
summary).
• All files must be uploaded on Moodle (as an “Assignment” – files of reasonable size, submitted as
“Group#name_presentation.pdf”, “Group#name_summary.pdf” and “Group#name_profile.xls” – only
ONE version of each file, validated by ALL group members) before Apr. 18, 08.00 am.
• Groups should bring a computer, be ready with their presentation (identical to the one they submitted)
and make sure they know how to use the available IT tools (plug, cable, key, audio, etc…).
It is strongly advised to rehearse the presentation and to test the audio/video equipment in advance.

*Times New Roman 12, 1.5 lines or equivalent; the front page should mention the class title and code, the name of the firm, the group
number and the names of the students involved. Both report and presentation must be in english

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EVALUATION (ctd)

• Each group will also provide a one-slide summary of the presentation of another group (see template),
to be posted on Moodle before May 23. Students with a good group work (13/20 or above) will be
exempted from the oral exam.
• For the oral exam, students will get individually one of the questions from the (updated) list provided,
have 5 minutes to prepare and then 5-10 minutes to discuss their answer with the Professors.
Questions will cover the key issues addressed during the class (academic presentations and group
presentations).
• Groups with failed group works can submit an improved version of their presentation and summary,
together with a one-page synthesis of the improvements, for the September session

“I am always ready to learn although I do not always like to be taught”

(W. Churchill)

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CASE STUDY

• Pick an independent small firm, created less than 20 years ago,

and which has grown beyond « microfirm » size* during its
first 10 years of existence
• See candidates recommended by UWE (tbc)
• Avoid too complex (such as biotech) or too simple (retail, small
services,..) business models
• Avoid cases which have already been picked (see list)
• It is strongly recommended that you make sure to be able to
interview at least one member of the management.

* More than 10 full-time employees or more than 2 million euro in yearly sales.

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PREVIOUS
CAS CASE STUDIED
DEJA CHOISIS (2005-2022)
LES ANNEES PRECEDANTES
• Ablynx • Broptimize • Eonix • Lambda X • Propharex
• AeroSpacelab • BSolutions • ESE • Lita • Quaelum
• Agilytic • C&Cure • Euranova • Louvers • Qualifio
• AIS • Cardiatis • Farm • Martin’s • Reacfin
• Alliance Engineering • Caulier • Fastral • Masthercell • Realco
• Alterface • Cenaero • Fishing cactus • Matriciel • SAMDrive
• Any Shape • Centran • Flowtronic • MESware • Schmitz
• Arhs Group • Ciaco • Forcea • Meura • Sunrise
• ASCO • Citius Eng. • Free Field Tech. • Movify • Synchrone
• Ascolia • Citobi • Frichti • Multidecoupe • TakTik
• AVD • CleanPower • Greenwatt • Nalys • Take it Easy
• B12 • Climact • Hepp Taxi • Nanocyl • Tapptic
• BeerBrussels Project • Cluepoints • HTS • Netaxis • Telemis
• BePark • Cosep • IBA • Novadip • Tessares TMI
• Belighted • Custy • Ice-Watch • nSilition • Traxxeo
• Bellepaga • Danisco • Idealis • N-Side • TriFinance
• Belourthe • Dapesco • Imperbel (Derbigum) • Opal Solutions • Ubidata
• Belrobotics • Deliveroo • Ingestic • Open ERP/Odoo • Universem
• Belvas • EASI • Innate Motion • Ora • UpFront
• Belle production • Elium • Innovative sol. • Orfival • Upignac
• Belwatech • Emmer • IntoPix • O+R • Vex
• Bertinchamps • EMS • IT4IP • Pairi Daiza • Vox Teneo
• Bertrand • Enerdeal • Iris • Pareto Phoenix Plus • Whatever
• Biocap • Engepar • JDC Airport • Powerdale • Winbooks
• BSB • Engibex • Kazidomi • Printbox • Wow
• X-Ris
• Xylowat

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QUESTIONS TO ADDRESS IN THE CASE STUDY
1. What were the triggers of the launch of this business? Which were the key steps and the key stakeholders
involved in that process?
Key concepts: sources of innovations, megatrends, stakeholders, purposes, resources, value creation

2. What are the target needs and the key competitors/alternatives vs those needs? What are the key sources of
competitive advantages?
Key concepts (WHY): value gaps, driver of strategy, SWOT/Pestel, market needs and size, segmentation, competitive advantage, differentiation,
patents
3. What is the main product/market positioning of the firm? How does it differs from its main
competitors/alternatives?
Key concepts (WHAT ): product/market, market and product characteristics, services
4. What is the value chain positioning of the firm? Who are the key suppliers and customers?
Key concepts (WHAT): value chain (industry and business), key activities

5. What are the key elements of the organization and governance of the firm? Which are the key partners and
support mechanisms involved?
Key concepts (WHO): entrepreneurship, start-ups, entrepreneurial teams, governance, size, partnerships, innovation support mechanisms
6. What are the key elements of the financial structure of the firm? What are its prospects and main sources of
funding?
Key concepts (HOW MUCH): incubation, funding, profitability, valuation, investors
7. What are the main ethical and/or sustainability challenges faced by the firm? How is it dealing with those
challenges?

Tell me and I forget. Show me and I remember. Let me do and I understand.

Confucius

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ONE-SLIDE SUMMARY

How much Why

What are the main What is the targeted need and why
financial perspectives 360° are they well positioned?
and risks? Business
model
Who design What
Who are the key team What do they sell, to whom,
members and partners? through which key activities?

Identify the three key bullet points along each of the four dimensions

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GROUP PROJECT EVALUATION
There is nothing more frightful than ignorance in action (Goethe)

• Relevance, originality and ambition of the project

• Mobilization of key management concepts
• Quality and scope of data, references and sources used
• Professionalism and rigor
• Ability to synthesize results and draw implications and limitations
• Critical thinking, ability to nuance and entrepreneurial mindset
• Clarity, style and structure of presentations (written and oral)
• Compliance to guidelines

“The reason people use unclear language

is that they have nothing clear to say”

Reference: Starkey, K., Hatchuel, A., & Tempest, S. (2009). Management research and the new logics of discovery and engagement.
Journal of Management Studies, 46(3), 547-558. Pfeffer, J., & Fong, C. T. (2002). The end of business schools? Less success than meets
the eye. Academy of Management Learning & Education, 1(1), 78-95.

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LENGTH vs QUALITY
Games of Theory

Nash, J. F. (1950). Equilibrium points in n-

person games. PNAS, 36(1), 48-49.

This paper, which essentially founded “game

theory”, is one-page long and has been cited
more than 8500 times

The PhD thesis of John Nash is 26-page long

He was awarded the Nobel Memorial Prize in

Economic Sciences in 1994

Satoshi Nakamoto’s Bitcoin White Paper

(October 31, 2008) is 8-page long

Reference: Adams, G. S., Converse, B. A., Hales, A. H., & Klotz, L. E. (2021). People systematically overlook subtractive changes.
Nature, 592(7853), 258-261.

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BASIC RULES (REMINDER)
“Travailler en équipe et exercer le leadership”; “Gérer un projet”

DO’S DON’TS

• Interview people, use the web • Believe everything you hear/read

• Check and correctly mention your sources • Plagiarize (or use text-generation tools)
• Share responsibilities • Share chapters
• Ask questions during the classes • Wait for the last minute
• Be concise and to the point • Compensate quality with quantity
• Follow the guidelines • Write a story
• Manage your time (15 ECTS) • Work for a few days
• KISS • PIG
• Communicate in a professional way • Send inappropriate emails

Reference: Aeon, B., & Aguinis, H. (2017). It’s about time: New perspectives and insights on time management. Academy of Management
Perspectives, 31(4), 309-330.

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EXAMS GUIDELINES (TBC)

• Register to the EPL administration for the right session (June or September) and in due
time
• Register to the EPL administration for the right exam If you feel pressure, watch this
https://youtu.be/_lT3Fluv69c
• Book a slot on Moodle, for the right exam
• Use the name under which you are recorded in the University administration system
• Dress in an appropriate way (business casual)
• Bring a pen and your student card; write your name on the sheet provided for the exam.
Make sure it is readable
• You will be given one of the questions from the list. Write the key points of your
answer on the sheet provided, and be ready to discuss them
• Make sure you are rigorous, concise and structured in your answers

It is better to remain silent and be thought of a fool

than to speak and remove any doubt (Mark Twain)

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FINAL EVALUATION

• Ability to present the concepts addressed during the class (“Maîtriser les savoirs”)
• Ability to explain and present in a rigorous way those concepts (“Appliquer une
démarche scientifique”)
• Ability to illustrate in a relevant and fact-based way the concepts through (among
others) the testimonies and the case studies presented in the class. (“Communiquer”)
• Ability to understand the key implications and limitations of the concepts, in the
context of the class subject (“Innover et entreprendre”)
• Ability to understand the key implications and limitations of the concepts, in the
context of management in general (“Se développer”)
• Ability to criticize, develop or complement the concepts in a relevant and original
way.

« Paradoxically, improving the skills of participants, and thus increasing their

metacognitive competence, helped them recognize the limitations of their abilities”

Reference: Mintzberg, H. (2004). Managers, not MBAs: A hard look at the soft practice of managing and management development.
Berrett-Koehler Publishers.
Source : Kruger, J., & Dunning, D. (1999). Unskilled and unaware of it: how difficulties in recognizing one's own incompetence lead to
inflated self-assessments. Journal of Personality and Social Psychology, 77(6), 1121.

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DEATH BY POWERPOINT
Power corrupts, PowerPoint corrupts absolutely (Edward Tufte)

 Think about your story line and messages first, slides last
 Create a consistent look and feel
 Avoid slides with lots of text
 Use simple photos that enhance meaning
 Use storytelling
 Have a focused message that you want your audience to retain
 Check grammar, spelling and numbers

Source: BBC News, 18 December 2015

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HOW TO GET FIRED

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NETIQUETTE
WhatsApe

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OBJECTIVES OF THIS SESSION

• Introduce the faculty and the class objectives

• Introduce the assessment process

• Review the essentials of what a business is about

26
ORGANIZATIONS? SIMPLIFIED

“Organization is the arrangement of personnel for facilitating the accomplishment of

some agreed purpose through the allocation of functions and responsibilities”
“ A system of consciously coordinated activities or forces of two or more persons. “
“Person or group of people that has its own functions with responsibilities, authorities
and relationships to achieve its objectives”
[Companies] are devices for getting groups of people—workers and managers as well as
investors—to commit themselves to long-term goals”

⇒ Multiple interdependent actors (relatively autonomous); social perspective

⇒ Shared objectives (create and capture « value »); economic perspective

Reference: Selznick, P. (1948). Foundations of the theory of organization. American Sociological Review, 13(1), 25-35.
https://www.iso.org

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MANAGEMENT
« Coordinated activities to direct and control (“administer”) an organization”
Control can include defining roles, appointing authority, assigning tasks, establishing
incentives and rewards, and empowering and engaging people.
Management can include establishing strategies, policies and objectives [as well as
structures and] processes to achieve those objectives [through planning, support,
operations, performance evaluation and improvement].

⇒ Coordination between actors and resources; delegation

⇒ Collect, exchange and analyse information (“knowledge management”)
⇒ Decision making in uncertain/ambiguous context (present and future)
⇒ Rewards and motivation (through constraints or contracts)

"The organ that converts a mob into an organisation and human effort into performance"
P. Drucker

Reference : https://www.iso.org

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 ILLUSTRATIVE
HOMO MANAGERIALIS

Exchanges
Communications
Markets
Coordination Currencies
Knowledge
Governance
Management
Innovation

Investments
Planning
Ownership
Yield

Reference: Wilson, E. O. (2017). The Origins of Creativity. Liveright Publishing.

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 ILLUSTRATIVE
THE GOOD OLD DAYS

The societas publicanorum were Roman bodies that

performed public functions such as tax-collecting or
maintaining buildings. They raised finance from
shareholders and their shares were traded.
The medieval idea of a company revolved around a
family business. The founders were people who took
bread together (hence the term cum panis).
In the early-modern era, firms such as the Dutch and
English East India Companies were set up in order to
pursue national trade objectives.
“Modern” corporations can be traced back to the first US
railways companies.

Source: The Economist, December 1, 2018

Reference: Poitras, G., & Geranio, M. (2016). Trading of shares in the Societates Publicanorum?. Explorations in Economic History, 61,
95-118. Landes, D. S., Mokyr, J., & Baumol, W. J. (Eds.). (2012). The invention of enterprise: Entrepreneurship from ancient
Mesopotamia to modern times. Princeton University Press.

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 ILLUSTRATIVE
MANAGEMENT TOOLS

“Un jour j’irai vivre en Théorie; car en Théorie tout se passe bien” (P. Desproges)
Source: Bain Consulting, 2015

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BUSINESS? SIMPLIFIED

Corporation: A body formed and authorized by law to act as a single person; an

entity having the capacity of transacting business as an individual: exists beyond
the lifetimes of its founders, can own assets, sign contracts, and appear in court
through representatives.
“A “fictive person” who is immortal, who sues and is sued, who hold lands, has a seal of his own,
who makes regulations for those natural persons of whom he is composed”
Maitland, F.W. (1908) The Constitutional History of England

=> Limited liability: Owners can loose only what they invest, and can transfer
responsibility

Source: Commission Européenne; Webster dictionnary. The Economist (2013) « Companies moral compasses » , March 2, 2013

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CREATIVE DESTRUCTION
Top employers, Belgium 1988

1. S.N.C.B (public transports) 49,700 “technological

2. Régie des Postes (postal services) 46,000 unemployment…
3. R.T.T. (telecommunications) 27,900 due to our discovery of
4. G.I.B. Group (retail) 24,400 means of economising the
5. Solvay (industry) 12,800
use of labour outrunning the
6. Philips Industries (Industry) 12,500
7. Ford (automobile) 11,700
pace at which we can find
8. Cockerill Sambre (steel) 11,300 new uses for labour.”
J.M. Keynes, 1930
9. General Motors (automobile) 10,100
10. Delhaize Le Lion (retail) 10,000
…
13. Agfa-Gevaert 8,100
14. Sabena (airline) 7,100
15. Bekaert (industry) 6,900

Source : Trends; The Economist Jan 18, 2014 « The future of jobs »

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 ILLUSTRATIVE
A TYPICAL BUSINESS

Business unit
Competition

Organizational
Resources Offer Market(s)
unit

• People • Identification • Products • Geographies

• Assets • Type • Services • People/
• Money • Scope organizations
• Knowledge • Governance
•… • Stakeholders
• • Partners

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CORPORATE TYPOLOGY SIMPLIFIED

Legal aspect
• Incorporation (self-employed, not-for-profit, partnerships, … )
• Ownership (public, private, partnerships, …)
• Location(s) (tax- and activity-based)

Scope
• Size (employment, sales, valuation, assets..) and age
• Activity (market, industry, competitive and technological intensity…)
• Ecosystem (networks, partnerships, externalities…)

Values
• Corporate culture, value and purpose, context, …

Source: Soulié, Roux (1992) Gestion. Presses Universitaires de France

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CORPORATE PURPOSES

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ETHICAL ISSUES SIMPLIFIE

Limited responsibility Unlimited irresponsibility?

Value creation Resource and wealth allocation

“The social responsibility of business is to increase its profit” Milton Friedman

“Corporation: An ingenuous device for obtaining individual profit without individual

responsibility” Ambrose Bierce

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CORPORATE RESOURCES SIMPLIFIED

Financial resources (capital »)

• Provided by investors, lenders and own activity, in exchange of
future rights and obligations
⇒ Financial reserves, access to investors, credibility…

Human resources (people)

• Workers, employees, managers, subcontractors… providing a
specific work in exchange for a remuneration, usually contractually
predefined
⇒ Skills and competencies, reputation, social capital…

Tangible and intangible resources

• Raw materials, equipment, energy, knowledge, patents… mobilized
to offer a value proposition
⇒ Property rights, sustainability, …

Source: Johnson & Scholes « Exploring Corporate Strategy », Prentice Hall

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VALUE CREATION (OR CAPTURE)? ILLUSTRATIVE

Net utility* Cost of

Goods Sold
+ Externalities!
VAT
Salary costs

Other fixed
costs Tax

Perceived Sales Value added Gross Net Profit

utility margin margin

Bargaining driven by rules (laws..) and context (alternatives, ..)

*Excluding the financial, time, energy and psychological costs of purchase

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FINANCIAL VALUE CREATION

“Willingness
to pay” + Expected
Customer value future profits
Input costs

Salary costs
ROIC
Depreciation

Taxes

Perceived Sales Value added Value EBIT NOP(L)AT

utility captured
Invested
(EBITDA)
capital
Source: Koller, Valuation

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FOR NEXT WEEK

• Form a group and pick a case

• Register on Moodle

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GROUP PRESENTATIONS
2022

April 19 April 26 May 3 May 10

10.45 – 11.05 Group A 10.45 – 11.05 Group F 10.45 – 11.05 Group K 10.45 – 11.05 Group O
11.10 – 11.30 Group B 11.10 – 11.30 Group G 11.10 – 11.30 Group L 11.10 – 11.30 Group Q
11.35 – 11.55 Group C 11.35 – 11.55 Group H 11.35 – 11.55 Group M 11.35 – 11.55 Group R
12.00 – 12.20 Group D 12.00 – 12.20 Group I 12.00 – 12.20 Group N 12.00 – 12.20 Group T
12.25 – 12.45 Group E 12.25 – 12.45 Group J 12.25 – 12.45 - 12.25 – 12.45 -

Each group must also complete and submit before May 17 a one page summary of
the corresponding group
(see template in introduction slides; group x completes a summary for group 19-x)

Students with no group (or with a failed group work ) can submit a (new version of the) group work (with a
one-page summary of the improvements) by email before the first day of the September session

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 EPL 2211
INTRODUCTION TO BUSINESS

Introduction