Eric Woychik Finds Enron’s Trading Practices Result from too Much Market Certainty

According to the classic view of market competition, if all participants in the market had perfect information, prices would naturally be forced downward by those market participants. However, Enron traders and their ilk had virtually perfect information about their market and about the actions of other traders.  The result was collusion, gaming, and artificially inflated market prices.  In many ways, what happened was the opposite of what was supposed to happen according to the classical view.

In an extraordinary example of practitioner scholarship, Eric Woychik (DM 2006) drew upon the work of Nobel Laureate Robert Aumann in his analysis of Enron's trading practices.  In his analysis, Dr. Woychik combined quantitative and qualitative forms of data analysis which included previously unreleased internal documents and emails.  His overarching finding is that it is precisely because of the widespread, near-perfect information available to traders that tacit collusion and market gaming occurred to artificially drive up prices.  Dr. Woychik argues that solutions that introduce greater uncertainty to the trading environment - such as strategies to reflect actual demand - would do more to drive down costs than perfect information or unwieldy levels of oversight.

Dr. Woychik has been actively involved with the electric industry for over three decades and has published research in each of those decades about trading practices.  He is currently exploring electric industry reform policies, including future electric industry policies and regulation, particularly to enable clean energy and smart grid resources to be used comparably with traditional fossil energy sources.  He is contributing to a forthcoming book, Smart Grids: Infrastructure, Technology, and Solutions, Stuart Borlase, Editor (CRC Press), and is an ongoing speaker, expert witness, and conference participant.

Dr. Woychik is Managing Director, Strategy Practice, and Electric Industry Lead for Black & Veatch Corporation's Management Consulting Division. He was previously Vice President and Senior Director of Development for Comverge, Inc., and for many years was the President and founder of Strategy Integration, LLC.  Over the last 30 years he has working with a wide variety of stakeholder interests in 20 countries and for more than 50 utilities in North America on electricity markets, regulation, and demand-side technologies. In addition to his DM from Weatherhead, Dr. Woychik holds a B.S. in Environmental Planning and Policy Analysis from U.C. Davis, and an M.S. in Economics from New Mexico State University.

First Residency Reflections of a First Year DM Student

I have begun the journey to earn a Doctorate of Management at Case Western Reserve University's Weatherhead School of Management and have just completed my first residency in Cleveland, Ohio.  It is difficult to find the words to express myself. If I were a poet I would be able to convey the range and intensity of my observations and feelings. Because I am not a poet I need to borrow a metaphor to convey what I feel.

I read a science fiction story by Ray Bradbury a long time ago and have seen the movie many times.  The story, called Fahrenheit 451, is about a society that bans books; no one is allowed to read.  I ask you not to dwell on the literalness or darkness of the story, that's not the point I am trying to share.

At the very end of the movie the protagonist - Montag - has gone through a journey from darkness into light. By creating this dichotomy Bradbury is able to set up Montag's explosive discovery of freedom. This feeling of exhilaration is beyond his expectations. He feels at home ready to carry on a tradition of passionate intellectual pursuit with those around him. It is a full and unexpected breath of fresh air.

 Adrian (Zeke) Wolfberg

D.M. Class of 2013

 Cleveland, Ohio

21 August 2010

Kalle Lyytinen enthusiastic about DM presentations at AoM 2010

 I just returned from the 2010 Academy of Management (AoM) Annual Meeting in Montreal, Canada. The Weatherhead School of Management's Doctor of Management (DM) alumni and students overall had 17 paper presentations and won 3 best paper awards in three different divisions. Their presentations were well received and deemed both rigorous and relevant--demonstrating that students of the DM Program span the boundaries of practice and academia and engage in management-related practitioner scholarship that is theory driven, uses  rigorous and credible research methods, and is at the same time well anchored to the problems and realities of management.  One of the best and most rewarding experiences for DM faculty who attended the meeting was the pride, confidence and enthusiasm that our students showed when they interacted with other management scholars and participated eagerly in the debates in symposia, paper sessions and design workshops at AoM.

 The AoM Meeting included a couple of sessions that dealt with the status and challenges in doctoral education--some of them directly addressing the issues of educating "practitioner scholars" in "executive doctoral" programs, or other various programs that are specifically targeted to executives who wish to go  beyond their Master's education to receive a terminal degree.  Representatives from top tier schools, including some deans and faculty, criticized these programs, claiming a lack of rigor and academic quality.  When enlightened about the research intensity, relevance, and quality of the DM Program, and when informed about the high number of papers presented at this year's Meeting by DM students and alumni (17 papers accepted leading to an acceptance rate of c.a. 90% within the DM Program), they expressed incredible surprise at this remarkable achievement. Their reaction is important because it shows that, although recognition of the DM Program is gaining ground, the Program continues to be an "unknown gem" in many areas of the academic world.  We have to effectively promote the Program more broadly so that the "big school" deans and faculty will appreciate the DM Program and the impressive contribution of wisdom and expertise our alumni and students make to the academy.

 As Director, I am taking steps to actively engage in getting the word out about our "unknown gem." I do hope that our alumni and current students will do the same. Comments, such as those I pointed out from deans and faculty at the Meeting, illustrate that often simple stereotypical assessments of executive doctoral programs are made.  A common thought is that all of these programs are the same, as if all MBA programs or MD programs are alike. With this in mind, we need to spread the word to both the worlds of academia and practice that the DM Program is not only rigorous and challenging, but that it also meets all the criteria of a high-quality doctoral program focusing on research and the generation of new knowledge that matters in management.

 I look forward to hearing comments from DM Program alumni and students about their experiences at AoM this year, your experience in the Program, and your ideas about the status and marketing of our program.

Kalle Lyytinen

Director, DM Program