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Accounting education over Zoom

Posted by Jan Bouwens

Since last week we have been teaching via Zoom. How did it work?

Early March it became clear that our lecture halls will remain unpopulated for some time. My disappointment was huge since my colleagues and I were going to hold a pilot in block 5 in which we wanted to try out a 100-year-old educational model from Harvard Business School on our accounting students. My colleague didactics Annemarie Zand Scholten wrote to me, however, that I mainly had to let the lectures take place in the way that I had in mind. The only difference is that it has to be run over the WEB. I was convinced and went to work with colleague Ana Mickovic and student assistant Bernat Just Barco.

We followed the original set-up of the Management Accounting course and assigned papers that contained the theory of the week’s topic at hand. In addition, for each week we recorded one or two videos in which Ana and I present the theory and where we further explain the difficult parts of the theory. If there are questions after reading and watching this material, students can sign up for a weekly tutorial that Bernat runs. The ticket to a tutorial is paid for by a pertinent question. No question, no access to the tutorial! The large majority of students appear to make use of this option. They ask very specific questions which show that they take the subject very seriously. Some questions are passed on to Ana and me.

This first week we focused on the use of Cost-Volume-Profit-Analysis (CVP analysis). This is an important topic for any company, especially for start-ups. A recent (fraud) case of the Chinese coffee retailer “Luckin Coffee”, which has not given enough thought to how to turn ideas into profit, indicates that thinking about (future) profitability is central to the question of whether the startup succeeds or not. The Economist dedicated a lead article to this issue in 2019, stating that the chances that investors are compensated for their inlay with an IPO are in most cases rather remote. This problem is unrelated to the Covid-19 crisis, but is associated with the cost structure that has so far been insufficiently understood.

With these economic forces in mind we start the lecture. After students have absorbed the theory, they work in groups of four students to work on the case study. In the Harvard Business Case, students had to examine how for the company of Pandora radio (a service that allows users to play music based on their preferences, without being able to choose their own song) existing revenue- and cost determinants interact and how they can be twisted so that the company can be made profitable. After their preparation, the students enter the virtual classroom and then they have to perform independently. In class students have to show that they are able to take on specific questions about the case. These questions can be asked by the teacher (cold calls) or by fellow students.

Cold calls
The first question that is asked is: "Rosanna, please tell us: What problem is being addressed in the case?" This student had to elaborate on the problem to 70 fellow students. In this case, the owner and CEO have just left a meeting with a prospective investor who turned down their proposition. The problem that the student (Rosanna) had to describe was that the owner and the CEO were unable to explain how the business model of Pandora could work. And this is where a 90-minute journey begins along the business model (who is the customer: the listeners of the radio service or the advertisers on the radio?; what means does Pandora use to distinguish itself?; how is Pandora financed?; how are costs incurred and how do revenues enter into the firm? etc.). Students are questioned by Ana, me and by fellow students. The firm’s business model emerges from these enquiries. I don't have to do much, other than to ask questions every now and then. I do point out to students what the dimensions of the model are. Students are very creative in bringing forward the forces that play a role in these dimensions and across the dimensions. Occasionally, I call on a student to contribute to the discussion. We do the same with the CVP analysis. Once again, students have to come up with building blocks. I write down what the students put forward. Usually students are led in the right direction being asked relevant questions by their fellow students; sometimes Ana and I give some direction with a cold call or lead students back to theory so that they see why their idea may or may not work. It is important that we keep the timing in mind: The construction of the business model and the CVP analysis are explicitly timed to ensure that we discuss all elements of the case and thus achieve our learning objectives.

Then we discuss possible solutions: How do we get Pandora Radio profitable? After asking this question, students come up with proposals that are supported or that are voted out by fellow students. Without having to intervene much, students discussed the options that were available. At some points I have made suggestions on how we can construct the analysis and the solution based on the theory (e.g., is the relationship between the number of listeners of Pandora Radio and the sales of advertisements linear?).

Students eagerly took on the challenge to present their ideas, which were endorsed or voted out by fellow students.  Ultimately, 70 percent of the students contributed to the discussion one or more times and we discussed all the limitations and possibilities of the CVP analysis in the context of an existing company. I must honestly say that 40 percent of their final mark depends on those contributions. The contributions are written down in a file by Bernat and after each lecture Ana and I independently mark the contributions.

At the end of the lecture, I summarized the results and added the aftermath: What choices did Pandora Radio make in the end and how did they work out?

It is a pleasure to lecture in this way and I fully understand why this approach has persisted for over 100 years. The method is also very suitable to deliver a class via the internet (in our case through Zoom). It does take a lot of extra work, so I have a student assistant (Bernat) to keep track of what each student brings in and class management is conducted by a second teacher. This ensures that those who raise their hands in Zoom also have their say. So I have three people working for 70 people. Maybe 70 students is too much. I also did this class with 40 students and that worked better. The preparation of the cases is even more difficult for the teacher than when standing in front of the class room. You must ensure that you have penetrated the general trust and all details of the case so that you can help students. That should have been the case if you were in the physical class, but is much more important now because you have to avoid silences in class in order to keep the energy level up. I, therefore, discuss the case with Ana before we go into class. 

In the preparation you typically set four goals as I described above which the students should solve using the theory and data from the case (what is Pandora's problem?, What is Pandora's earnings model, what does the CVP analysis look like and what solutions do we have for Pandora?) and that is your road map for the college. As a teacher you give direction to the case class and the best thing that can happen is that students do the rest! With a little guidance and an occasional cold call, you can always achieve your goals.
 

My conclusion is that case-based teaching works via Zoom. You have to want to put in way more time than with face-to-face teaching and classroom delivery is labour-intensive with two teachers in front of 40-70 students. Whether this will replace face-to-face education? I honestly expect that students will appreciate face-to-face teaching after the Coronavirus crisis more than they did before!

 

I am deeply indebted to Jeffrey Braak who recorded the videos. I also want to thank Maud Pols, Jamie Hoefakker, Bor Kemkes and Marion van der Poel for their excellent editorial work. I am very grateful to Annemarie Zand Scholten for her unwavering help in developing this lecture. Sophia de Jong always helped me find my way through the mazes of the school and the university. And of course I would like to thank Ana and Bernat for all the work they put into his project. I thank the students for the work they put in the class.

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About Jan Bouwens

University of Amsterdam & Cambridge University Judge Business School

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