The MBA Major in Environmental and Risk Management is concerned with public and private sector issues in designing and implementing effective strategies related to business sustainability and the reduction of harmful environmental impacts. There has been a growing concern with such impacts, because of their inherent importance for responsible management. This is due primarily to the increasing cost of laws and regulations governing those business activities which may pose risks to the environment, to the health and safety of workers, and/or to surrounding communities. The major is designed to provide in-depth foundations for those interested in pursuing careers in the growing environmental sector of the economy, whether in private business, environmental consulting, or government. Non-majors interested in an overview of business and policy in the environmental area can also find individual courses from this major field.
The Environmental and Risk Management Major provides an interdisciplinary approach, building on faculty and courses from departments such as Accounting, Health Care Management, Insurance and Risk Management, Legal Studies, Management, Marketing, Operations and Information Management, and Business and Public Policy. Additional coursework on environmental and technological risks can be pursued in parallel with the Wharton program through studies in the School of Arts and Sciences and the School of Engineering and Applied Science.
This program is coordinated by the Director of the Environmental Management Program, and also offers a seminar series cosponsored with the Institute for Environmental Studies and the Risk Management and Decision Sciences Center. The ongoing design and monitoring of the program is supported by a school-wide group of faculty with teaching and research interests in environmental and risk management.
Requirements for the Major: Five Course Units (cu)
The MBA Major in Environmental and Risk Management at the Wharton School requires five units of coursework as indicated below or four units of coursework and an advanced study project approved the Director of the Environmental Management Program. Note: Acronyms on the following list of courses refer to the following departments: health care management (HCMG), legal studies (LGST), management (MGMT), marketing (MKTG), operations and information management (OPIM), and Business Economics and Public Policy (BEPP).
1) Two Mandatory Mini-Courses (0.5 cu each):
OPIM 762 – Environmental Sustainability and Value Creation
This course is intended to familiarize students who are not environmental specialists with relevant facts and analysis on the recent environmentalism evolution. What are the key concepts? What is at stake? Who are the key interested parties? Who is leading the way in reshaping business strategies as well as public policies? What are the lessons learned from successes and failures to integrate the environmental component, here and abroad? Also, why do those who want to do good have to develop a robust business model to achieve that goal, and how to do it?
BEPP 811 – Risk and Crisis Management
The success of any firm depends jointly on its ability to create and preserve value. The creation of value arises when a firm is able to identify and execute investments with a positive net present value. The creation of value invariably exposes the firm to risk and this value can easily be jeopardized. A fall in demand for its product, a sudden rise in production or financing costs, a technological failure, destruction of assets or information, a liability suit, or the activities of a rogue trader, each can squander the value created. In extreme cases these risky possibilities can bankrupt the firm. Risk management is becoming increasingly important and firms are devoting increasing time, attention and resources to deriving strategies for preserving value. These strategies include: hedging, insurance, contingent financing and changes in organizational design which make the firm more robust to shocks. Risk and Crisis Management will look at these and related strategies.
2) Students must choose four of the following courses:
Note: the combination of courses can include three courses and an Advanced Study Project.
HCMG 901 – Seminar in Health Care Cost Benefit and Cost Effectiveness Analysis
The purpose of this doctoral level course is to investigate the theory and practice of cost-benefit and cost-effectiveness analysis as applied to health care. Techniques to be examined are cost-effectiveness analysis with single dimensional outcomes, cost effectiveness analysis with multiple attributes (especially in the form of Quality Adjusted Life Years), and economic cost-benefit analysis. Valuation of mortality and morbidity relative to other goods will be emphasized. Students will be expected to develop written critiques of articles in the literature, and to design a new application of one of the techniques as a term project.
LGST 815 – Environmental Management: Law & Policy
This course provides an introduction to environmental management with a focus on law and policy as a basic framework. The primary aim of the course is to give students a deeper theoretical and practical sense of the important relationship between business and the natural environment and to think critically about how best to manage this relationship. Cross listed: MGMT 813.
OPIM / BEPP 761- Risk Analysis and Environmental Management
This course is designed to introduce students to the role of risk assessment, risk perception and risk management in dealing with uncertain health, safety and environmental risks including the threat of terrorism. It explores the role of decision analysis as well as the use of scenarios for dealing with these problems. The course will evaluate the role of policy tools such as risk communication, economic incentives, insurance, regulation and private-public partnerships in developing strategies for managing these risks. A project will enable students to apply the concepts discussed in the course to a concrete problem.
BEPP/OPIM 763 – Energy Markets & Policy
Over the last several decades, energy markets have become some of the most dynamic markets of the world economy. Traditional fossil fuel and electricity markets have seen a partial shift from heavy regulation to market-driven incentives, while rising environmental concerns have led to a wide array of new regulations and “environmental markets”. The growth of renewable energy could be another source of rapid change, but brings with it a whole new set of technological and policy challenges. This changing energy landscape requires quick adaptation from energy companies, but also offers opportunities to turn regulations into new business. The objective of this course is to provide the economist’s perspective on a broad range of topics that professionals in the energy industry will encounter. Topics include the effect of competition, market power and scarcity on energy prices, the impact of deregulation on electricity and fossil fuel markets, extraction and pricing of oil and gas, geopolitical uncertainty and risk in hydrocarbon investments, the environmental impact and policies related to the energy sector, environmental cap-and-trade markets, energy efficiency, the economics and finance of renewable energy, and recent developments in the transportation sector.
BEPP 777 – Cost Benefit Analysis
Cost benefit analysis — the principal tool for project and policy evaluation in the public sector. For government whose “products” are rarely sold, the valuation of costs and benefits by means alternative to market prices is necessary. It is the counterpart to cost accounting in private firms and provides guidance for avoiding wasteful projects and undertaking those that are worthwhile. Given government regulations, cost benefit evaluations are critical for many private sector activities. Real estate developers, manufacturing firms, employers of all types are required to provide evaluations of environmental impacts and of urban impacts for their proposed projects. They too must engage in cost benefit analysis, in the valuation of social benefits and costs. Government analysts, consultants, and private firms regularly carry out cost benefit analysis for major investments — bridges, roads, transit systems, convention centers, sports stadia, dams — as well as for regulatory activities — OSHA workplace safety regulations and the Clean Air Act are two important examples. Cross listed: BPUB 960.
OPIM 656 – Process Management in Manufacturing
This course builds on OPIM 631 and OPIM 632 in developing the foundations of process management, with applications to manufacturing and supply chain coordination and integration. This course begins with a treatment of the foundations of process management, including quality (e.g., 6-sigma systems) and time (e.g., cycle time) as building blocks for the successful integration of plant operations with vertical and horizontal market structures. On the e-manufacturing side, the course considers recent advances in enterprise-wide planning (ERP) systems, supplier management and contract manufacturing. Industry case studies highlight contrasting approaches to the integration of manufacturing operations and risk management with e-Logistics and e-Procurement providers and exchanges. The course is recommended for those interested in consulting or operations careers and those wishing to understand the role of manufacturing as a general foundation for economic value creation. Cross listed: ESE 522. Prerequisite(s): OPIM 621, OPIM 631, and OPIM 632 or equivalent.
Advanced Study Project (ASP)
A student can choose an advanced study project in the environmental area, supervised by a Wharton faculty member.