str-t00 course syllabus - course syllabus and introduction 37176...prior to the recent efforts by...

LUCIO CASSIAProfessor of Strategic Management and EntrepreneurshipChairman of the Center for Young and Family Enterprise (CYFE)University of Bergamo

TOMMASO MINOLAProfessor of Entrepreneurship and Strategic Management Director of the Center for Young and Family Enterprise (CYFE)University of Bergamo

STRATEGIC MANAGEMENT

Course Introduction and Syllabus

Lesson STR T00 - Course Number 37176 ENG – Fall 2018 / Spring 2019

Details and contents

Strategic Management (Theory and Practice)Lucio Cassia Università degli Studi di Bergamo

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• Course name Strategic Management (ENG code 37176)

• Course terms 1st term Theory (6 ECTS) Sep,20 2018 – Nov,11 20182nd term Practice (6 ECTS) Feb,28 2019 – June,6 2019

• e-learning http://elearning8.unibg.it/moodle25/

• Social Strategic Management & Entrepreneurship @UniBG

• Web www.unibg.it/struttura/struttura.asp?corso=37176

http://elearning8.unibg.it/moodle25/


http://www.unibg.it/struttura/struttura.asp?corso=37176

http://www.facebook.com/


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Course modules: Theory and Practice

Theory

Sep,20 – Nov,11 2018

Conference Lab (1 class)

Lectures(9 classes)

Practice

Feb,28 – June,6 2019

Conference Labs(3 classes)

Project Work Labs(3 classes)

Case Analysis Labs(4 classes)

Methods and Tools(2 classes)


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Course topics (Theory, 9 classes)

Class 0. Course Introduction & Syllabus (20 September 2018)

• Details and contents• Faculty• Resources• Exams

Course introduction:• A strategic perspective


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Class 1. Understanding strategy (26 September 2018)

• TheoryDefinitions and key concepts. Schools of strategic management. Strategy foundations. Business modeling.

• CaseThe Electrode Gamble (VBS Case)

Discussion points:1. What factors created an opportunity in the electrode market?2. What mistakes were made to provoke the crisis?3. What was so bad about the crisis situation? What was still good?4. What risks can you recognize in strategy implementations and how they were dealt with?

• Readings1. Henry Mintzberg. Strategy Safari (Chapter 1)2. Michael Porter. What is strategy?3. Sun Tzu. Art of War (Chapter 1)


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Class 2. Designing a business model(27 September 2018)

• TheoryBusiness model canvass. Value proposition. Target client definition. Communication channels. Distribution channels. Revenue streams. Key activities. Potential business partners. Resources allocation. Cost structure.

• CaseR&R (HBS Case 9-386-019)

Discussion points:1. What factors created an opportunity for Bob Reiss and the “TV Guide Game?”2. What risks and obstacles had to be overcome in order to pursue the opportunity

successfully? How did Bob Reiss accomplish this?3. Would this approach have worked for Parker Bros., or Milton Bradley?4. As a result of this success, what should Reiss do now?

• Readings1. Osterwalder A., Pigneur I. Business Model Generation (preview)


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Class 3. Analyzing external business environment (3 October 2018)

• TheoryPESTEL-analysis. Industry analysis. 5 competitive forces. Competition analysis.

• CaseMatching Dell (HBS Case 9-799-158)

Discussion points:1. How and why did the personal computer industry come to have such low average

profitability?2. Why has Dell been so successful despite the low average profitability in the PC industry?3. Prior to the recent efforts by competitors to match Dell (1997-1998), how big was Dell’s

competitive advantage? Specifically, calculate Dell’s advantage over the team of Compaq and a reseller in serving a corporate customer.

4. How effective have competitors been in responding to the challenge posed by Dell’s advantage? How big is Dell’s remaining advantage?

5. What should each of Dell’s major rivals (IBM, Compaq, HP, and Gateway) do now?

• Readings1. Michael Porter. The five competitive forces that shape the strategy.2. Michael Porter. Understanding industry structure.


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Class 4. Analyzing internal business environment (4 October 2018)

• TheoryOrganizational diagnosis. Functions analysis. Organizational structure analysis. Strategic readiness.

• Case//no case preparation required for this class

• Readings1. Weisbord M. Productive workplaces (chapter 11)


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Class 5. Creating strategic vision (1/2) (10 October 2018)

• TheoryStrategic opportunities. Client value analysis. Ansoff matrix. Product-market-channel matrix. Vision statement. Vision propagation instruments.

• CaseIKEA invades America (HBS Case 9-799-158)

Discussion points:1. What factors account for the success of IKEA?2. What do you think of the company’s product strategy and product range? Do you agree

with the matrix approach described in Figure B of the case?3. Despite its success, there are many downsides to shopping at IKEA. What are some of

these downsides? IKEA’s Vision Statement (in Figure C of the case) describes how the company seeks to build a “partnership” with its customers. What do you think of this vision statement?

4. The fact that IKEA hopes to have fifty stores in operation in the Unites States by 2013 is an indication of how optimistic the company is about the viability of its value proposition in this country. Do you think IKEA is being overly optimistic in its growth plans? How would you improve IKEA’s value proposition to make it even more attractive to American consumers?


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Class 5. Creating strategic vision (2/2) (10 October 2018)

5. To achieve the kind of growth that IKEA is hoping for, should the company change its product strategy? If so, in what way(s)? What about its product range—are there limitations to the matrix approach? Should the company expand its product lineup to include a greater number of styles and price points? In what other ways should the company consider changing its product lineup?

6. If you had to predict, what do you think IKEA’s value proposition and product lineup will look like in ten years?

7. Some industry observers have suggested that IKEA should open a number of smaller, satellite stores across the United States (e.g., in shopping malls, strip malls, etc.). By offering a limited range of IKEA products, these “IKEA Lite” shops would presumably give consumers who do not otherwise have access to a full-size IKEA the opportunity to experience the brand. In addition, consumers who do live near a full-size IKEA would be able to use these mini-outlets to make minor purchases (e.g., purchase a set of mugs, as opposed to an entire living room set). Do you agree with this idea? Why or why not?

• Readings1. George Yip. Market Selection and Direction: Role of Product Portfolio Planning.2. Youngme Moon. Rethinking positioning.3. James C. Collins & Jerry I. Porras. Building Your Company’s Vision.4. James M. Kouzes and Barry Z. Posner. To Lead, Create a Shared Vision.


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Class 6. Choosing and supporting functional strategies (11 October 2018)

• TheoryFunctional strategies. Balanced Score Card. Financial strategies. Marketing strategies. Corporate architecture. HR strategies.

• CaseLack of Oxygen (VBS Case 2-002-016)

Discussion points:1. What are the major factors that change the business environment for the company?2. What business strategy should the management of Kislorod Group choose? Why?3. What do you think to be the optimal set of functional strategies for Kislorod Group? Why?

• Readings1. Trond Randøy et al. Corporate Financial Strategies for Global Competitiveness.2. Ritika Tanwar. Porter’s Generic Competitive Strategies.3. Roger T. Burlton. Delivering Business Strategy Through Process Management.4. Randall S. Schuler & James W. Walker. Human Resources Strategy: Focusing on Issues and

Actions.


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Class 7. Managing the strategic process (1/2) (17 October 2018)

• TheoryStrategic diagnosing. Gap analysis. SWOT analysis. Scenario planning. Action planning.

• CaseStrategic planning at United Parcel Service (HBS Case 9-306-002)

Discussion points:1. What are the strengths and weaknesses of scenario planning?2. What is your evaluation of UPS’s 1997 scenario planning exercise? Its Horizon 2017

planning exercise? How do the two efforts compare?3. What are the other key elements of UPS’s approach to strategic planning? In particular,

what is your evaluation of:• the UPS charter?• the Centennial Plan?• the Strategy Road Map?

4. Why was John McDevitt put in charge of “strategic integration?” Should he remain in that role?

5. How does UPS’s strategic planning process compare with the approach at your organization?


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Class 7. Managing the strategic process (2/2) (17 October 2018)

• Readings1. Ian Wilson. From Scenario Thinking to Strategic Action.2. Clayton M. Christensen and Tara Donovan. The process of strategy development and

implementation.3. Eric M. Olson et al. The importance of structure and process to strategy implementation.


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Class 8. Strategic mistakes and failures (18 October 2018)

• TheoryChange management concepts. Strategic team. Leadership challenges. Strategic mistakes.

• CaseApple inc. in 2015 (HBS Case 9-715-456)

Discussion points:[to be given as the in-class assignment]

• Readings1. Victoria Crittenden. Building a capable organization: The eight levers of strategy

implementation.2. Robert Kaplan & David Norton. How to implement a new strategy without disrupting your

organization?3. Yang Li et al. Making Strategy Work: A Literature Review on the Factors influencing

Strategy Implementation.


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Methods and tools topics (Theory, 2 classes)

• Introduction to techniques, methods and tools for information search (8 November 2018)The class aims to introduce students to the foundamentals of Business Intelligence. The keyquestions of the lesson are:– How can I properly analyze (web) resources to find the “right” data?– How can I prepare data in order to analyze them?– What are the main software dedicated to data analysis?– How can I visualize the results of my analysis?During the lesson, some basic software for business intelligence will be used (e.g., MS Excel,MS Power BI, …).

• Project works presentation and assignment (22 November 2018)The class aims to give an overview on the topics of the course’s project works available.Special focus will be dedicated to video podcast, namely output required for the finalpresentation of the project work, and the tool useful for its development (e.g., audio editingsoftware).


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Conference Lab (Theory, 1 class)

Start Cup Bergamo Final Event (October,16 2018)

• Start Cup Bergamo is the entrepreneurial training program of the University ofBergamo. It includes the Start Cup School, where business ideas are crafted, and theBusiness Plan Competition, where the investors meet the aspiring entrepreneurs.

• During the final event the business ideas will be presented to academics, investorsand entrepreneurs.

• Students will be involved in the final event, where the nascent entrepreneurs willpresent their business ideas by discussing the underlying embedded strategies.


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Case Analysis Labs (Practice, 4 classes)

• Some business case studies will be discussed during the classes in the 2nd term (Practice Module).

• By encouraging to understand, analyze and work through complex real world problems, the analysis of case studies stimulates students’ critical thinking and helps them to bridge the gap between theory and practice through the application of theoretical concepts to business challenges.

• Students will learn how to apply theoretical concepts to analyze the competitive position of a firm, evaluate business strategies, and critically compare alternative strategic decisions. These skills will be evaluated in the Theory exam.

• Students are strongly encouraged to read the case material provided in the classroom and engage in a very proactive and interactive discussion.


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Conference Labs (Practice, 3 classes)

• The Trends in the Age of Globalization (TAG) Conferences are an opportunity to understand the changes of the global scenario from the experience of eminent keynotes. Global strategy, innovation, digital transformation will be among the topics of the conferences.

• The keynote speakers will be academics, global management consulting partners, top managers, entrepreneurs, i.e. people who understand the global trends to successfully face the rapidly changing global context. Corporations, small firms, startups and communities are central in identifying key values in modern changes.

• The aim of the TAG Conferences is to inspire students’ critical thinking skills and debate on the impact and scenarios of the global changes.


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Project Works Labs (Practice, 3 classes)

• During the second term, two classes will be allocated as class labs for the planning and the development of each project work. The groups will work on the assigned topic with the assistance of the Faculty.

• The aim is to help students throughout the preparation of the project work and to give support to find the right direction to decide structure, contents and sources.

• Project Works Labs will be scheduled in the following periods:– At the beginning of March 2019– At the beginning of April 2019– At the beginning of May 2019


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Proactive participation

• The course is structured to be interactive. Therefore attending the course is recommended and students are encouraged to participate to every class.

• Informed and engaged participation is of paramount importance and welcome from everyone. Students are also invited to debate about topics, experiment new ideas and share links to real cases.

• Contributions to discussion (in class and through social networks) and ideas from the students are encouraged. Proactive participation is appreciated and graded.

Faculty


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Strategic Management Course Faculty

Lucio CassiaProfessor of Strategic Management & EntrepreneurshipChairman of the Center for Young and Family Enterprise (CYFE)University of [email protected]

Mikhail PlotnikovHigher School of Economics Campus in Nizhny NovgorodDepartment of General and Strategic Management)[email protected]

Davide GambaTeaching fellowCenter for Young and Family Enterprise (CYFE)University of [email protected]

ENG 37176 Theory (1st term)

mailto:[email protected]







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Strategic Management Course Faculty

Tommaso MinolaProfessor of Strategic Management & EntrepreneurshipDirector of the Center for Young and Family Enterprise (CYFE)University of [email protected]

Giovanna CampopianoFaculty of EconomicsWIFU Chair of Business Administration and family entrepreneurshipWitten/Herdecke University (Germany)[email protected]

Mara BrumanaAssistant professor of Strategic Management & EntrepreneurshipResearch fellow of the Center for Young and Family Enterprise (CYFE)University of [email protected]

ENG 37176 Practice (2nd term)







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Courses Assistant

Paolo PressianiResearch fellow of the Knowledge Transfer Office (KTO)Project manager of Start Cup BergamoUniversity of [email protected]

• Course organization• Teamwork management• e-learning Moodle platform• Class communication




Resources


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Online resources

• Online resources are available to students through the Moodle platform– Lessons– Case studies– Reference material (scientific papers, reports, podcasts, interviews, etc.)– Keynotes by visiting executives (entrepreneurs, managers, etc.)– Information about lectures, conferences, events, etc. – http://elearning8.unibg.it/moodle25/

• Students are invited to join the Facebook Group “Strategic Management & Entrepreneurship @UniBG” to share information and posts about the main topics of the course

– www.facebook.com/groups/strategicmanagementunibg/


http://www.facebook.com/groups/strategicmanagementunibg/




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Reference texts

Reference textbook• Contemporary Strategy Analysis

Robert M. GrantJohn Wiley & SonsISBN: 978-1-119-12497-9

Additional textbooks• Strategic Management: Concepts

Frank T. RothaermelMcGraw-Hill CollegeISBN 978-1260141863

• Entrepreneurial StrategyLucio Cassia, Michael Fattore, Stefano PaleariEdward Elgar PubISBN 978-1845421977

Exams and course policies


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Exam

• The exam covers both Theory and Practice modules and requires to demonstrate the mastery of the topics, tools and frameworks covered during the course.

• Grading plan a. Theory module : 40%b. Practice module (project work) : 60% c. Classes participation (Lectures and Labs) : additional 0-3 marks

• The project works are assigned by the Faculty:– for attending students, on a four-student group basis– for non-attending students, on individual basis

• Theory assessment and project work can be separately obtained in different sessions. Grades are kept valid for the exam sessions June to September. For the following sessions, students will be required to take both parts within the same session.

• For attending students an early exam session will be available in May 2019.


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a. Theory module

• The theory exam aims to assess students’ understanding and ability to apply theories, frameworks and methods taught throughout the course, including every lecture and lab. To prepare for the exam students can also take advantage of the reference text (Contemporary Strategy Analysis, Grant) as well as the online resources (lectured materials, labs, discussions).

• The exam consists of multiple-choice questions, open answer questions and short analysis of cases, following learning experience in both semesters.

• The exam will be performed in written form on an individual basis.


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b. Practice module (project work)

• The project work analyzes an industry, a company or a set of companies, a strategic initiative (e.g., a merger or an acquisition), a strategic opportunity faced by a firm or industry (e.g., a change in market demand or technology) or a global trend (e.g., a competition shift).

• Students are required to apply strategic tools and knowledge learned along the course, to the real economic environment.

• The goal of the project work is “to know more” about the assigned topic. Students have to deal with the issue in depth, with a scientific and critical approach. This includes careful selection of the most reputed sources.

• The project consists of a final presentation, eventually supplemented by written notes. Innovative ways of presentation, original ideas, clarity, focus on the topic are encouraged and graded.

• A comprehensive “project work package” includes presentation, sources, references, papers, documents, videos and material in electronic form.

• The project works will be assigned by the Faculty on the first Practice Module lecture.

• Non-attending students are required to contact Faculty well in advance of the exam session.


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Project work rules

• The project work must be original text. Students are expected not to use others’ text or work and present it as their own. References shall always be cited. In case of plagiarism the entire exam will be failed.

• Each student of the group will put their own effort to make sure that their contribution and presentation will be comparable among the members. Each team member will be selected by the Faculty to present different parts. Each student may be assigned a different grade.

• Based on the project work topics, the Faculty may pose questions to each student within the group. The answers will influence the final evaluation individually.

• The Faculty will evaluate the project work considering originality, internal consistency, relevance to the assigned theme, methodological rigor, quality and variety of sources, accuracy of report and presentation, clarity of in-class presentation, efficient teamwork.

• The comprehensive package of the project work will be sent to the Faculty one week before the exam through uploading on the Moodle platform.


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c. Class and Lab participation

• The Faculty will evaluate the proactive participation (single student and groups) both during classes and labs.

• Students are strongly encouraged to read the suggested material for a very proactive in-class discussion.

• Students are invited to review the guest’s profile in advance and the main topic of each TAG Conference. Groups are required to prepare (not trivial) questions before and during the TAG Conference to foster the discussion.


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Erasmus and Extra-EU Programme Students

We encourage students to apply for an Erasmus or an Extra-EU programme. Upon request, students involved in an Erasmus Program during 1st or 2nd term of the current year may be eligible for the attending student status (additional early exam session; project work on a four-student group basis).

Furthermore, students can apply for any equivalence of the modules (Theory and Practice, 6 ECTS each) under prior approval by prof. Maria Sole Brioschi([email protected]). The equivalence may be granted for one or both modules. On student’s request and responsibility, the remaining module will be carried out in Italy. For these students the grading plan will be 50% for each module (Theory/Practice) if they have passed and registered one of the two modules abroad as an equivalent exam.

The same rules apply to foreign students at the University of Bergamo participating in an Erasmus or Extra-EU Program, as well as to Italian studentsundertaking recognized internships.





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Course policies

• Attendance– All the students are members of a learning community, so a professional

behavior is expected. Please be on time for the class and be respectful of others’ viewpoints even if in disagreement with them.

• Academic integrity– The university policies regarding plagiarism, cheating and similar activities will be

pursued as appropriate. Downloading or use of material obtained from an on-line site without proper citation is plagiarism. Citing sources properly is necessary to demonstrate where your information is coming from.

• Grade disputes– Although generally it doesn’t happen, grade disputes are handled in writing.

Students are invited to submit a memo the the Course Assistant describing why they feel the grade was incorrect. Grading errors are possible, but please be aware that errors can be overly generous as well as overly harsh. Accordingly, the grade may stay the same, be increased, or be decreased. There are no extra credit assignments for improving a course grade.

Source: Adaptation from the Syllabus, Strategic Management & Business Policy, prof. Jing Sun, Wayne State University


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A strategic perspective


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Strategy

The success of a company over time is described by its strategy.

The future stands on the ability to find the direction to recreate the conditions for growth, even under great uncertainty and a very fast global changing environment.

The future is full of tremendous opportunities, but also tremendous uncertainty. With the current pace of innovation and shorter innovation cycles, new technologies will continue to transform every aspect of how we live and work. Change is the new normal. “Old world” concepts, models, paradigms and ideas will no longer be relevant.

So uncertainty and complexity are the main issues of the current global scenarios to be exploited through increasing strategic management capabilities(*).

(*): The course deals with businesses, not with politics. Nevertheless, replacing the word “company” with “Country” and the word “management” with “leadership” you’ll discover how strategy is increasingly paramount nowadays (e.g. the case of Brexit)


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Building skills to make decisions under extreme uncertainty

• Creative ThinkingBeing able to think fast and “out of the box”

• EntrepreneurshipFinding ways to become more productive and self-motivating, i.e., how to operate without a boss/supervisor telling what to do

• TeamworkMore open organizations mean having to work in teams of strangers, often from diverse national or disciplinary backgrounds

• Interdisciplinary learningBeing open to interdisciplinary and multidisciplinary study, however strange it might initially seem

• EthicsMany of the problems of the future will be ethically complex. This seems particularly true in the context of robotics and artificial intelligence.

Source: “Education in a Digital Age”, E.P.M. Vermeulen, University of Oxford (2017)


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Apple 2000-2010: Recreating the conditions for growth even under great uncertainty

Source: Apple, The New York Times


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• By the end of 1996 Apple had lost $867 million and the total value of its shares was less than $3 billion (now (Sep 2018) it is more than $1 trillion, 300 times more). So Steve Jobs had been called back to the company he had founded. Steve slashed 70 percent of Apple’s product plans focusing on few products. At the same time he commissioned the famous iconic company’s “Think Different” marketing campaign

• This video is about an internal meeting on Sep,23 1997. Steve said: “We’re trying to get back to the basics” and “The question now is not: Can we turn around Apple? I think it’s: Can we make Apple really great again?” (actually Steve is the owner of the original and less aggressive #MAGA : "Make Apple Great Again")

Source: Apple (Sep,23 1997)

Apple 2000-2010: Recreating the conditions for growth even under great uncertainty

https://www.youtube.com/watch?v=Oz1_tOXfSeM


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1,4 billion iPhone sold

Cumulative Apple iPhone sales from June 2007 to Mar 2018 account for more than 1,4 billion units sold (approx. $900 billion in revenue and $120 billion in net profit). And 2.0 million iOS devices have been sold (including iPad and Apple Watch sales).

Source: Apple (Sep 2018), Statista (Jun 2018)


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Apple Special Event Sep,12 2018

Apple introduces new iPhone X models and a new version of the Apple Watch.In your opinion, what’s the announcement with the greatest strategic impact?

Source: Apple (Sep,12 2018)

https://www.youtube.com/watch?v=JHi-WGFGWek


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Strategic Management and Change

The course introduces the concept of Strategic Management and deals with the basic directions and goals of organizations, industries, market structures and the impact of the new digital technologies.

Strategic change and complexity management are the main issues of the new millennium both for economics and business.

Companies should act as learning organizations skilled at creating, acquiring, and transferring knowledge by modifying their behavior to meet new knowledge and insights. Learning organizations avoid stability through continuous self-assessment and change.


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Strategic Change

Measure & feedback

GLOBAL MARKETGlobal

Demand (t)

Strategy is related to Change and therefore to the time (t)

COMPANY

Organization& action (t)

+

-

Global Supply (t)


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Digital Strategy: Innovation and Disruption

Great emphasis is put on the strategic evolution through the unceasing digital transformation, a pervasive disruptive innovation undermining the strategic plans in a matter of months or even days, and creating great opportunities provided that new paradigm shifts are perceived and realized.Industries and business case studies on digital transformation and strategy are discussed.

• App Economy evolution and strategies (WhatsApp)• Artificial Intelligence and Machine Learning (Amazon Echo)• Virtual reality and augmented reality (remote surgery)• Carmakers strategies facing electric cars and driverless vehicles (Google Car)• Creating value with Big Data (Potholes app, Roomba)• Intellectual jobs automation (online banking)• Internet of Things (everywhere)• Newspapers digital disruption (BuzzFeed)• Ride-hailing disruptive business model (Uber)• Impact of mobile technologies (Google Maps)• The rise of the sharing economy (Airbnb)• e-democracy?


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Today every business is a digital business

”Three main issues.The first: the identity of a global company depends on the strength of its rules.The second point is the generational change [...]. The third is the digitization: how to imagine the company in ten years”

Paolo Rocca, CEO of Techint

Techint Group• Tenaris• Ternium• Techint Engineering&Construction• Tenova• Techpetrol• Humanitas

• Tubular steel, oil & gas, industrial machinery, mining, energy, health services

• Revenue 18.5 B$• Employees 55.400

Source: The Techint Group, 2017, www.techint.com


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Source: The New York Times (June 2017 )

Five big tech stocks build the market (OTT > Over The Top)


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WhatsApp 2009-2013: a digital innovator and disruptor

Founded in 2009 by investing 60 M$ only, in just 4 years WhatsApp attracted 450 million users and now (2018) 1,5 billion, plus 65 billion messages, 5 billion photos and 1 billion videos every single day). WhatsApp is the fastest-growing company of all time in terms of users (Facebook had only 145 million users after four years).

In just few years WhatsApp destroyed the text message (SMS) market, giving up the whole revenues, then sold itself to Facebook for 19 billion $.

Source: Company announcements, Statista (May 2018)


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WhatsApp : the fastest-growing company of all time in terms of users

Source: McKinsey & Company (2015)


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Today every politics is a digital politics

Two people write Trump’s tweets. He writes the angrier ones.“Recently, political and digital analysts began to suspect that Donald Trump’s tweets are authored by two different people: Someone on his campaign staff is tweeting from an iPhone, and the billionaire himself is tweeting from his Samsung Galaxy. […]The data clearly shows that the Android and iPhone tweets are from different people, posting at different times of the day, and using hashtags, links and retweets in distinct ways. What’s more, the Android tweets are angrier and more negative, while the iPhone tweets tend to be benign announcements and pictures.”

Source: The Washington Post (Aug 2016)


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Driverless cars: a strategic perspective


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Cars: a very inefficient and dangerous investment

• 95% of the time a car is stopped• Nearly 1.3 million people die in road crashes each year, on average 3,287 deaths a

day (2013)• An additional 20-50 million are injured or disabled (2013)• Human error accounts for 90% of road accidents (estimated)


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Cars: a very inefficient and dangerous investment

• Around 40,000 people a year die on American roads, more than all fatalities caused by firearms. The death rate in America is about 12 people per 100,000.

• According to a working paper by Jessica Lynn Peck of the CUNY, the arrival of Uber to New York City may have helped reduce alcohol-related traffic accidents by 25-35%.

Source: “Ride-hailing apps may help to curb drunk driving”, The Economist, April 4, 2017 and “New York City Drunk Driving After Uber”, Working Paper, Jessica Lynn Peck, City University of New York - CUNY (2017)


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Driverless cars

• A driverless car (sometimes called a self-driving car, an automated car or an autonomous vehicle) is a robotic vehicle that is designed to travel between destinations without a human operator.

• To qualify as fully autonomous, a vehicle must be able to navigate without human intervention to a predetermined destination over roads that have not been adapted for its use.

https://www.ted.com/talks/chris_urmson_how_a_driverless_car_sees_the_road?language=it


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Levels of driving automation

Source: Automated Driving, SAE International


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Driverless cars market scenarios

Source: “Disruptive trends that will transform the auto industry”, McKinsey & Company (2016)


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May,7th 2016: The first known fatal accident involving a vehicle being driven by itself

Driverless cars: the safety problem

Source: “The social dilemma of autonomous vehicles”, 2016, Jean-François Bonnefon et al., Science, 352:1573-1576

https://www.youtube.com/watch?v=5TjbqVartjM


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• A Tesla Model S running the Autopilot feature suffered a horrendous crash with a tractor-trailer, which resulted in the death of the Tesla’s driver.

• Tractor-trailer made a left turn from the other side of the highway, across the side of the highway on which the Tesla was traveling.

• At the time of impact, the trailer was basically perpendicular to the highway, and the Tesla crashed into it broadside.

• Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied.

• This is the first known fatality in just over 130 million miles where Autopilot was activated. In the US there is a fatality every 94 million miles. Worldwide, there is a fatality approximately every 60 million miles.

• US regulators, who are in the midst of writing new guidelines for autonomous vehicles, need to take this into account before they give blanket approval to partially self-driving cars.




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• ”On March,19 an autonomous car operated by Uber — and with an emergency backup driver behind the wheel — struck and killed a woman on a street in Tempe, Ariz. It was believed to be the first pedestrian death associated with self-driving technology. The company quickly suspended testing in Tempe as well as in Pittsburgh, San Francisco and Toronto.”

• The accident was a reminder that self-driving technology is still in the experimental stage, and governments are still trying to figure out how to regulate it.

• Still, most researchers believe self-driving cars will ultimately be more safe than their human counterparts. In 2016, 37,461 people died in traffic-related accidents in the United States, according to the National Highway Traffic Safety Administration. That amounts to 1.18 fatalities per 100 million vehicle miles traveled in 2016.

Source: “Self-Driving Uber Car Kills Pedestrian in Arizona, Where Robots Roam”, The New York Times, Mar 19 2018

https://www.youtube.com/watch?v=XTXd5bfX_GI

https://www.youtube.com/watch?v=XTXd5bfX_GI


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« this moral experiment posits a life and death where taking no action insures the death of certain people, and taking another action insures the death of several others.»

Source: “Self Driving Cars Are Not Five Years Away”, John Battelle, NewCoShift (Oct 2016)

Driverless cars: the ethical issue


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Three traffic situations involving imminent unavoidable harm: which do you choose?

Driverless cars: moral implications embedded into the software

Source: “The social dilemma of autonomous vehicles”, Jean-François Bonnefon et al., Science (2016)


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Reaction vs Decision

• Reaction : action dictated instinct influenced by panic and different situations• Decision : action undertaken after some considerations


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What moral decisions should driverless cars make?

Ethical trade-offs that we are willing (or not willing) to make stand at the intersection of the computer and social sciences. Focusing on collective intelligence, large-scale cooperation and the social aspects of artificial intelligence will be paramount in the next years.

https://www.ted.com/talks/iyad_rahwan_what_moral_decisions_should_driverless_cars_make?utm_source=newsletter_weekly_2017-08-25&utm_campaign=newsletter_weekly&utm_medium=email&utm_content=bottom_right_image


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Driverless cars: the ethical issue and the Moral Machine @MIT

• The car detects that the brakes failed.• Your are outside the scene. Nothing will happen to you.• What should the driverless car do?

http://moralmachine.mit.edu


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Driverless cars will shake many industries and set new strategies

Driverless cars are a looming disruption and will likely change dynamics in the economy, company strategies and in our personal lives.

• Automakers• Auto insurance companies• Auto financiers• Car repairs and services• Rental agencies• Taxi drivers and companies• Fleet managers• Energy companies• Road construction companies• Parking operators• Patrol services• Houses (garages)• etc.


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Readings

• Self-driving cars will require new business models(The Economist, Mar 1 2018)

http://www.economist.com/special-report/2018/03/01/self-driving-cars-will-require-new-business-models


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Readings

• Uber’s Vision of Self-Driving Cars Begins to Blur(The New York Times, Aug 19, 2018)

• Toyota to invest $500 million in Uber for self-driving cars(Reuters, Aug 27, 2018)

https://www.nytimes.com/2018/08/19/technology/uber-self-driving-cars.html?emc=edit_th_180820&nl=todaysheadlines&nlid=728226580820


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What's wrong with Apple's new headquarters?

https://www.wired.com/video/2017/05/steve-jobs-pitches-apple-park-at-cupertino-city-council/

str-t00 course syllabus - course syllabus and introduction 37176...prior to the recent efforts by...

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