The 100 Minute MBA (“Minimum Business Apprehension”), adapted from The 10-Day MBA, by Steven Silbiger

Covers: Marketing, Ethics, Accounting, Organizational Behavior, Quantitative Analysis, Finance, Operations, Economics & Strategy

M1: Marketing integrates all the functions of a business and speaks directly to the customer through ads, sales and other marketing activities.
M2: Marketing plans undergo many changes until the parts are internally consistent and mutually supportive of the objectives.
M3: The 7 Parts are Consumer Analysis, Market Analysis, Review of Competition/Self, Review of Distribution, Development of “Preliminary
Marketing Mix”, Evaluation of the Economics, Revision and Extension until consistent plan emerges.
M4: Consumer Analysis: Makable/Marketable? Who’s buying? Who’s using? Buying Process? Influencers? Who needs it and why?  Perceptions?
M5: Market Analysis: Nature? Size? Growth? Segments? Geography? PLC? Competition? Quality? Price, Ads? R&D? Service? Trends?
M6: Competitive Analysis: Good/Poor? Market Position? Resources? Gain/Loss Market Share? Who, What & Why? Entry barriers? Plans?
M7: Marketing Mix: Product, Place, Promotion & Price
M8: Evaluation of Economics: Break-even in units, Fixed Cost/(Selling-Variable Cost), Payback Period?, Exclude Sunk Costs!, Reasonable Goals?
M9: Consider:Need Categories, The Buying Process, Product Involvement, Segmentation Variables, Relevant Market, Product Life Cycle, SWOT
Analysis, Perceptual Mapping, Channel Margin Mathematics, The Marketing Mix 4Ps, Distribution Strategies, Channel Power, Advertising
Measures, Pricing Strategies, Break Evens
M10: Total Costs = Variable Costs per Unit (VC) x Units Sold + Fixed Costs (FC)  Break Even Unit Volume = Fixed Costs/Unit Contribution  Unit
Contribution = Your Selling Price - Variable Costs
M11: Payback = Initial Investment/Annual Profit

E1: The purpose of ethics in the MBA curriculum is not to make students model corporate citizens, but rather to make them aware of ethical
implications of business decisions.  Topics include the environment, layoffs, employee privacy, diversity, sexual harassment, bribery, etc.
E2: Relativism & stakeholder analysis are 2 major topics, & the former examines why we often ignore ethics, the latter is a structure for them.
E3: Relativism proposes that ethics are “relative” to the personal, social and cultural circumstances in which one finds oneself.
E4: Other frameworks include natural law, utilitarianism and universalism, but the most used analytical structure is stakeholder analysis.
E5: List potentially affected parties, harms/benefits, rights/responsibilities, narrow down to significant players, situational analysis, decision.
E6: The Sarbannes-Oxley Act of 2002 includes financial accounting, internal control, executive ethical conduct and related party rules.
E7: The social responsibility of business is the concept that businesses are accountable to more than their owners.
E8: Relativism and its four forms (naive, role, social group and cultural) can be reasons to avoid making ethical decisions.
E9: Stakeholder analysis a a framework for considering who is affected by a business decision.
E10: The Sarbannes-Oxley Act of 2002 is a federal law attempting to legislate business ethics in corporate America.
E11: Other rules apply to listed firms, and you should also be familiar with the SEC-approved  COSO “Internal Control-Integrated Framework.”

A1: Accounting is the language of business, answering basic questions such as how much own/owe, earn and pay.
A2: Accounting’s governing rules are called Generally Accepted Accounting Principles (GAAP), and they’re analogous to legal precedent.
A3: The Financial Accounting Standards Board (FASB) writes additional rules (referred to by #) as new areas of business activity develop.
A4: Accounting reports communicate the activities of a specific entity, and the parameters covered by an accountant’s report must be clear..
A5: Cash accounting records transactions in cash, but most use accrual, which recognizes effects as activities happen, by allocating/matching.
A6: Accounting records only contain transactions that have been completed and have a quantifiable monetary value.  Accountants have an
objectivity rule to guide them when in doubt, and there must be reasonable and verifiable evidence to support a transaction for it to be recorded.
A7: When companies incur losses that are probable and can be reasonably estimated, they’re recorded, even if not yet realized.  Not gains.
A8: The Fundamental Accounting Equation is: Assets = Liabilities + Owners’ Equity.  See also: www.sec.gov/investor/pubs/begfinstmtguide.htm
A9: 3 Basic & interdependent financial statements: Balance Sheet, Income Statement and Cash Flow Statement, all of which always balance.
A10: Balance Sheet lists what a company owns and owes at a point in time.  The IS is a summary of profit generating activities during a period, and
the CFS is a summary of how a company generates and uses its cash during a period of time.
A11: 10 Ways Accountants can misstate earnings include: mis-classifying expenses as assets, underestimating sales allowances for returns,
discounts and markdowns, underestimating bad-debt allowances on sales made on credit, creating off-balance sheet liabilities, recognizing
phantom revenues, depreciating assets too slowly, modifying adjustments to inventory, forecasting unusual gains/losses, creating special reserves
by overestimating future expenses and then boosting profits by revising them downward later and manipulating measures of performance that are
tied to key executive bonus compensation.

B1: Organizational Behavior attempts to teach MBAs how to deal with the human challenges of the workplace, how to apply skills in real world.
B2: The OB problem-solving model is in three steps: problem definition, analysis and action planning. For problem def’n: I WANT > GAPS < I GOT .
B3: For analysis, after defining gaps and causal chains, one tries to understand the causes.  Why do they exist?  What factors play a role?
B4: For action planning, six steps: set goals, define activities/resources/responsibilities, set timetable, forecast outcomes/contingencies, formulate
detailed plan in time sequence, implement/execute/evaluate.  Focus on action levers (rewards, controls, systems).
B5: APCFB Model: assumptions/perceptions/conclusions/feelings/behaviors.  Also filters, defense mechanisms, expectations, beliefs & values.
B6: Expectancy Theory of Motivation: Motivation = Expectation Work to Performance x Expectation Performance to Reward x Reward Value
B7: VCM Leadership Model: the vision, commitments and management aspects of leadership.  Active listening, to gain insights.
B8: Forms of power, more than a title.  5 forms: coercive, reward, referent, legitimate & expert.  MBO (by objective) & MBWA (walkin’ around).
B9: Models: strategy, policies, structure, systems, climate & culture.  Structures: functional, product, customer, geogr., div., matrix & amorphous.
B10: Issues incl. span of control (direct reports), paradigms (mind-sets/patterns), systems theory (organization as body) & evolution/revolution.
B11: OB lessons are most influential. Without people skills, MBAs are equipped with power tools but are without the electric cord to use them.

Q1: Quantitative techniques provide MBAs with a way to distinguish themselves from their non-MBA peers.  They are the basic MBA tools.
Q2: Decision Theory breaks complexity into manageable parts, using decision trees (alternatives/risks, monetary consequences, uncertainty).
Q3: Cash Flow Analysis is based on accountant’s SCF: what does investment cost and how much cash will it generate each year? Timing?
Q4: Net Present Value takes these flows and values them in today’s money, so that different projects can be compared regardless of timing.
Q5: Internal rate of return (IRR) is a derivative of NPV, and it’s the rate at which the discounted CF in the future equal the investment value today.
Q6: Probability Theory (Statistics) covers distributions of outcomes, including binomial, normal, cumulative, simulated (Monte Carlo) and fractiles.
Q7: Linear Regression models are used to determine relationships between variables, and forecasting for price, promotions and market factors.
Q8: Y = mX+b, R squared values (what percent of the variation in the data is explained by equation?), causation versus correlation! T stats, etc.
Q9: Quant tools sort out complex problems using trees, value CF over time, quantify uncertainty with stats and determine relationships/forecasts.
Q10: Key terms: decision trees, sunk costs, expected monetary value, accumulated value, NPV, IRR, probability distributions and regresssion.
Q11: eNPV or rNPV (expected or risk-adjusted net present value) used daily for decision making.  It’s the IRAC of the MBA, the “business mind.”

F1: For MBAs, the sole purpose of firm is to maximize wealth for its owners, who can organize in proprietorships, partnerships or corporations.
F2: Basic tenet: return should be commensurate with risk, which can be systematic (class), or unique, the latter of which can be diversified out.
F3: Beta: risk/volatility within a portfolio, quantifying risk of a particular investment vs. market portfolio, theoretically, there’s an efficient frontier.
F4: CAPM determines required rate of return on investment by adding unsystematic and systematic risk of asset. Ke = Rf + (Km - Rf) x Beta
F5: The efficient market hypothesis allege that to varying degrees (W, SS, S) market reflects all current information, no one can “beat market.”
F6: Bond’s value comes from present value of its future cash flows.  Higher default risk or higher market rates > Higher discount rate > v Value.
F7: Equity ownership entitles owner to residual claim on earnings/assets after all other obligations met.  Options are contractual rights to buy/sell.
F8: Key concepts are present value, beta, the efficient frontier, CAPM, duration, bond value fluctuations, dividend growth model, call/put options.
F9: Keep in mind the after-tax costs of borrowing.  After-Tax Rate = Borrowing Rate x (1 x tax rate).
F10: FRICTO (flexibility, risk, control, timing & other) is a checklist for making capital structure decisions that max. EV (enterprise, or total, value).
F11: The optimal capital structure is one that minimizes WACC (weighted average cost of capital) and maximizes EV.

O1: Operations is the only MBA subject that covers actually making products and providing services, the ultimate purpose of the business.
O2: In all situations, a 5 issue framework applies: capacity, scheduling, inventory, standards & controls.  In reviewing operations, ?s include:
O3: What is the management style used at the plant?  Theory X (Taylor’s scientific approach), Y (Mayo’s behavioral) or Z (benevolent Y/Japan)?
O4: Are the workers properly trained? Capacity?  6Ms: methods, materials, manpower, machinery, money & messages.
O5: Is the production equipment adequate?  Efficient? Appropriate method: continuous, assembly line, job shop?
O6: Are there material supplier problems?  Quality, Delivery problems?
O7: Is the production process efficiently configured? Consider flow diagram.  Gantt charts for scheduling.  Critical Path Method (CMP)?  PERT?
O8: Can linear programming help develop a more profitable product mix by addressing capacity constraints?
O9: Could an MRP system be sued to coordinate the entire production process, or CRM used to manage customer relationship?
O10: Are economic order quantities used for inventory ordering to minimize &free up cash?  Raw Materials, Work-in-Process, Finished Goods?
O11: Are quality improvement programs in place?  SPC, quality circles?  Adequate standards being set, monitored and followed up on?

Ec1: Economics studies how society allocates the limited resources of the earth to the insatiable appetites of humans. Micro, Macro.
Ec2: Micro: supply = demand at equilibrium price.  Consumers try to min. opportunity costs & max. marginal profits/utility.  Price sensitive, elastic?
Ec3: Macro: Keynesians like gov’t and consumer spending.  Friedman/monetarists focus money supply.  Neither gets it consistently right.
Ec4: Equilibrium: point at which quantity supplied equals quantity demanded and a mutually agreeable price is determined.
Ec5: Marginal Revenue and Cost: the added revenue and cost of producing and selling one additional unit.
Ec6: Elasticity: change in buyers’ demand as a result of price changes.
Ec7: Market Structures: competitive environment in an industry determined by number of sellers/buyers and the product characteristics.
Ec8: GNP Equation: C + I + G + X, or sum(personal consumption, private investment, gov’t purchases and net of exports over imports.
Ec9: Economists: Smith (“invisible hand”), Schumpeter (“creative destruction”), Galbraith (“countervailing power”), Okun’s Law, Laffer Curve.
Ec10: Ricardo’s comparative advantage (ability to produce more cheaply, on relative basis).  BOPA (balance of payments accounts) and FX.
Ec11: Country Analysis: past performance (BOPA, FX, GNP, inflation, employment, interest rates, investments, capacity, consumption, income
distribution, migration, demographics, education), strategy (autonomy, productivity, equity using fiscal, monetary, trade & social policy), context
(size, pop, geography, government business, labor, religion, agriculture, ideologies, trade advantages/competitiveness) and then prediction.

S1: Strategic thinking re goals involves comprehensive analysis of business w/r/t industry, competitors, short/long term business environments.
S2: The seven S model: structure, systems, skills, style, staff, superordinate goals/shared values & strategy. Peters, In Search of Excellence.
S3: Value Chain & Integration: What business?  Value company adds. Forward & Backward Integration. (Multi-level) Vertical Integration? Hor?
S4: Strategic levels: functional (value-add activities), business (competition), corporate (businesses to be in).
S5: Industry Analysis: Five Forces (Porter): Threat of Substitutes, Threat of New Entrants, Bargaining Power of Suppliers, Buyers, Rivalries
S6: Generic Strategies: cost leadership, differentiation and focus.  Competitive advantage as evolving strategy, not easily duplicated by others.
S7: Competitive Tactics: signalling, incl. price movements, prior announcements, media discussions, counterattack, announce results & litigation.
S8: Portfolio Strategies: BCG Growth/Share Matrix: stars, cash cows, dogs and question marks.
S9: McKinsey’s Multi-factor Analysis: industry attractiveness vs. business strength, high, medium or low for each.
S10: Globalization: the worldwide competition inherent in certain industries due to a variety of globalizing factors.
S11: Synergy: incremental profits generated by the combination of two companies that share resources.

MBA Abbreviated Jargon:

ABC activity-based costing, ADL Arthur D. Little consulting group, AIDA attention/interest/desire/action, BCG Boston Consulting Group, CAPM
capital asset pricing model, CDF cumulative distribution function, COGS cost of goods sold, CPM critical path method of scheduling,CPM cost per
thousand, CRM customer relationship management, EBIT earnings before interest and taxes, EMV expected monetary value, EOQ economic order
quantity, EVA economic value added, FASB Financial Accounting Standards Board, FIFO first in first out, FRICTO flexibility, risk, income, control,
timing, other, FSI freestanding insert, GAAP generally accepted accounting principles, GDP gross domestic product, GNP gross national product,
GRP gross rating points, IPO initial public offering, IRR internal rate of return, IT information technology, JIT just-in-time inventory, LBO leveraged
buyout, LCP low-cost producer, LIFO last in first out, M&A mergers and acquisitions, MBO management by objective, MBWA management by
walking around, MNC multinational corporation, MRP material requirements planning, NNP net national product, NPV net present value, PE price-
earnings ratio, PLC product life cycle, POP point of purchase, QWL quality of work life, RIF reduction in force (layoff), ROE return on equity, SBU
strategic business unit, SEC Securities and Exchange Commission, SKU stock keeping unit, SMSA Standard Metropolitan Statistical Area, SPC
statistical process control, SWOT strengths, weaknesses, opportunities, threats, TRP total rating points, TQM total quality management, WACC
weighted average cost of capital, YTM yield to maturity See also: http://americanlaw.co.kr for English to Korean dictionary