Shannon Beeman
November 1, 2012

More than 40 years ago, entrepreneurial businessman and higher-education visionary LaRue Hosmer, now professor-emeritus of Corporate Strategy, laid the cornerstone of entrepreneurship education at the University of Michigan and paved the way for the launch of the Zell Lurie Institute in 1999. Over the course of his 25-year academic career (1971-1996) at Michigan, he created the structure of the Entrepreneurship Program at the Ross School of Business and introduced the first business courses in entrepreneurial management, writing business plans, starting new ventures, and managerial ethics.

Hosmer, a World War II Marine Corps veteran, also co-authored a seminal book on entrepreneurship, titled The Entrepreneurial Function: Management and Growth of the Smaller Business Firm, which was published in 1977. In all, he set the stage for the explosive growth of an academic field of study that has taken root not only at the University of Michigan, but at colleges and universities across the country.

“Corporate Strategy, a relatively new approach to management, formed the basis of my thinking when I was asked by former Michigan Business School Dean Floyd Bond (1960-1978) to teach the first section of CS-415 Entrepreneurial Management at the University in fall 1971,” Hosmer says. “The rationale behind the course was that most industries had established patterns of price/promotion/production competition which had grown stale. It was necessary to break out of those outdated patterns by finding new advantages in product design, market segmentation, process improvement or technological breakthrough.”

Hosmer’s approach reflected his own business experience as the founder, in 1956, of a company that built machines to strip bark off logs at sawmills, so the bark-free waste could be chipped into flakes and sold to pulp and paper mills. His focus on Corporate Strategy as a guiding philosophy for teaching entrepreneurship arose from his doctoral studies at Harvard Business School, where he returned to work on his Ph.D. in 1967 after the sale of his company.

Hosmer’s first offering of the Entrepreneurial Management course was held in the College of Engineering building on U-M’s central campus and was open to all Business School students, both graduate and undergraduate. Twenty-eight students enrolled in the course, which was also broadcast by television to Dearborn, Mich., for evening MBA attendees.

“The course later became very popular,” Hosmer recalls. Students, he says, seemed captivated by the underlying premise that in order to create a strategy with an enduring competitive advantage, it was necessary to look at the strengths and weaknesses of any possible new venture, the opportunities and threats that existed within the business environment, and the social duties each student recognized for himself or herself – and then develop something that was brand new and far better in order to meet those three critical conditions.

Students were required to participate in case discussions, and were encouraged to talk about their ideas for start-up companies. “Some of those ideas were very good, and I’d like to think that this course sparked their entrepreneurial interest,” Hosmer adds. One of the students in that first class, Andy Lawlor, was so inspired that he bought, with nothing down, a failed high-tech company in Dexter, Mich., shortly after graduation. It is still running today, very profitably.

Hosmer defined the academic scope of entrepreneurship as having four foundational sections, which he termed: Getting the Idea, Preparing the Plan, Getting the Money, and Guiding the Growth. He continued to build the Entrepreneurship Program during the 1970s and introduced entrepreneurial-studies courses on writing business plans and starting new ventures. Lawlor temporarily assumed teaching responsibilities for two courses at the Ross School in 1982-1983 while Hosmer spent the year at Yale University on a visiting faculty appointment.

In 1988, Hosmer introduced yet another formative course − this time focusing on managerial ethics. “I felt there should be an Ethics of Management course, and I raised money from the Levi Foundation in Berkeley, Calif., to develop one,” he recalls. “I accepted a visiting appointment at the Naval Postgraduate School in Monterey, Calif., and worked on the course content while I was there. When I returned to Michigan for the fall term, I began teaching the Ethics of Management course full-time. There were three 14-session modules scheduled in each of the two major terms.” Eventually, the course was moved from the Ross School’s Corporate Strategy department to the Law department where Hosmer shared teaching duties with a young attorney, Timothy Fort, who had recently received his Ph.D. in Corporate Social Responsibility from Northwestern University.

In 1996, Hosmer retired from the University of Michigan and shortly thereafter, he accepted an offer of an endowed chair in Business Ethics from the University of Alabama, where he taught for six years. Today, he resides in Ann Arbor.

Drawing on his 40-year perspective, Hosmer says, “The most critical need in management today is innovative thinking. We have far too little of it.” His suggestion to the current faculty teaching entrepreneurship classes and assisting entrepreneurial ventures is to “concentrate on ‘Getting the Idea.’ If a person has a superlative idea for a new competitive advantage that can be convincingly described and resolutely defended, everything else will fall into place.”