Wednesday, December 21, 2005

HOOK 'EM: 1st Sem MBA - what is it all about?

Unlike others Masters programs wherein one has to attend just 2 courses per semester, the MBA requires us to take up 5 courses, that is, 15 hours per week. And for someone like me from a computer engineering and technology background, all of these courses seemed to be unheard of ever so far. So, while it adds fuel to the fire on one side, it was truly fascinating to observe that it was thus a great value for money and an opportunity to learn the most.

These were the 5 core courses that I had to take, - Financial Accounting, Financial Management, Statistics, Information Management and Microeconomics, Game theory and Operations. Phew! yes, all in one semester. Allow me to say a a few lines about what I learnt in each of these courses through this semester, mainly for the benefit of other MBA aspirants who are reading this post.

Financial Accounting: This was more of a Financial Statement Analysis course. Prior to this class, not more than once had I glimpsed at my ex-employer Netzero's financials - simply 'cos I dont understand a single word in there. This course now had me tearing apart latest balance sheets, cash flow statements and income statements of various firms. This was a 100% case-based class, we had a case to discuss every single class. We analyzed firms both within the US and International to debate the differences in accounting standards between the US GAAP and international GAAP. It was so exciting to understand and analyze all the fraudery taking place in today's accounting world.

What do CFOs and executives do to boost their income or drop it low as per their needs, how much is in their control, when will they get caught and what are the consequences, how do top firms falsely boost their profitability and efficiency? Why did WorldCom CFO, Scott Sullivan while reporting their annual earnings, move all the charges that WorldCom paid to local telephone networks into the category of capital expenditures instead of marking them as operating expenses? And, why was he imprisoned under civil fraud section for that?

Financial Management: In this course, we started by observing the differences between a partnership, an LLC and a corporation. We moved to understand the fundamental concepts of Time Value of Money. Why is a dollar today worth more than a dollar one year later? From there we grew to involve ourselves in business valuation concepts, learning how to project cash flows of a firm and value the business, especially for mergers and acquisitions. We learnt how the IPO process works. What is the motivation behind paying out dividends to stockholders and how does it differ from share repurchases? What are the benefits of leasing assets, as opposed to buying them? Upto what extent can a firm borrow? When can a firm file for bankruptcy, and if it does who will get the priority on the payments to be made - the creditors or the investors? This is a pretty tough course, I must admit.

Statistics: How do we measure uncertainity by applying statistical models? We learnt to identify random samples, for cross sectional and time-series data. We saw that stock prices of any firm follow a random sample, meaning future prices cannot be predicted based on past prices! We learnt various regression models to to identify the extent upto which the output variable depends upon the input parameters. Using the regression equation, we were able to predict the future on these models that we analyzed. We had a group project wherein each team analyzed various scenarios trying to explain the uncertainty in those with statistical models, like for example, predicting a S&P500 CEO's salary, predicting the performance of a movie in the box office, proving that starting salary is independent of the MBA student's GPA!

Information Management: I was under the impression that this is the class I would feel most comfortable with, I was totally mistaken. This had nothing to do with the technology that I knew to talk about. Here, we looked at the supply chain management of Dell, comparing it with HP. We learnt the importance of network effect, something that Google lacks yet, which it should fear.
We discussed the importance of technology in the value chain, and how the Internet has affected the Porter's 5 forces. What are the benefits of BPO? And we ended the course with an insight into the all-famous and currently rocking Sarbanes-Oxley rule.

MicroEconomics, Game theory and Operations: Microeconomics in the first semester is a boon. It just exposed us to so many differnet economic concepts, who would have known that there is something called a market for lemons or a diamond-water paradox. Game theory was pretty exciting too. On a highway, how should 2 competing gas stations position themselves such that both could not be better off by moving to any other position? Operations was more engineering than any other subject, well probably statistics too. We extended a few concepts from supply and demand in micro, and dealt in detail with queueing theory. We saw how the Japanese grill, Benihana improved its efficiency of operations and was able to have an average dining time of 45 minutes against 60-70 minutes for its competitors.

So, this is a brief overwiew of what I was trying to observe and learn during my 1st sem at McCombs, we'll be doing Marketing and more Strategy courses in the upcoming Spring semester.

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4 Comments:

Blogger Mani said...

Seems pretty interesting da. Motivating to join MBA too. :)

2:00 AM  
Blogger Padmanaban Kumar (paddu) said...

thats the reason i wanted to share it mani....

10:27 AM  
Blogger Anand Swaminathan said...

Dei paddu, mani kalyanam pannikittu nimmathiyaa irukkarathu unakku porukkalaiayaa

2:14 PM  
Blogger Padmanaban Kumar (paddu) said...

yaam petra inbam ellarum peranum...hehehe

2:22 PM  

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