Topics:

Course Introduction and Goals

What to Expect from a Business Education

Students should consider their business education as “Age of Exploration” of worldwide commerce, and their individual interests and talents. From this vantage, students should identify industries and careers that fit their personalities and competencies and fulfill their aspirations.

Handout: Factors in Success Everyone Can Control

Suggested Reading (not required): Sun Tzu, Art of War; Machiavelli, The Prince; “The Black Swan of Cairo”, http://www.foreignaffairs.com/articles/67741/nassim-nicholas-taleb-and-mark-blyth/the-black-swan-of-cairo

Required : Charles Munger: Psychology of Human Misjudgement

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

Assignment: Describe the predilections to human misjudgment you recognize in yourself or consider most important to overcome. Please email the assignment to the Professor by 5 P.M. September 22.

Recognize in yourself or consider most important to overcome. Please email the assignment to the Professor by 5 P.M. September 22.

Readings:

Topics:

Course Introduction and Goals

What to Expect from a Business Education

Students should consider their business education as “Age of Exploration” of worldwide commerce, and their individual interests and talents. From this vantage, students should identify industries and careers that fit their personalities and competencies and fulfill their aspirations.

Handout: Factors in Success Everyone Can Control

Suggested Reading (not required): Sun Tzu, Art of War; Machiavelli, The Prince; “The Black Swan of Cairo”, http://www.foreignaffairs.com/articles/67741/nassim-nicholas-taleb-and-mark-blyth/the-black-swan-of-cairo

Required : Charles Munger: Psychology of Human Misjudgement

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

Assignment: Describe the predilections to human misjudgment you recognize in yourself or consider most important to overcome. Please email the assignment to the Professor by 5 P.M. September 22.

Recognize in yourself or consider most important to overcome. Please email the assignment to the Professor by 5 P.M. September 22.

Readings:

Topics:

Factors in Success Everyone Can Control

Black Swans: Observations on the Financial Crisis

 Assignment: “How the Economic Machine Works” by Ray Dalio, CEO of The World’s Largest Equity Hedge Fund, Bridgewater Associates

http://www.cnbc.com/id/101055852

Assignment : Please describe how the video changed your understanding of the economy and your personal career plans.

Please email the assignment to the Professor over the weekend; not later than Sunday morning September 28.

Readings:

Topics:

Factors in Success Everyone Can Control

Black Swans: Observations on the Financial Crisis

 Assignment: “How the Economic Machine Works” by Ray Dalio, CEO of The World’s Largest Equity Hedge Fund, Bridgewater Associates

http://www.cnbc.com/id/101055852

Assignment : Please describe how the video changed your understanding of the economy and your personal career plans.

Please email the assignment to the Professor over the weekend; not later than Sunday morning September 28.

Readings:

Topics:

The Enterprise:  What  is a Company? 

All companies are ORGANIC, as with the human beings who comprise them, companies grow, transform, as part of natural evolution.  In a global economy, marketing products and services retains a local orientation, e.g., Walmart IT Systems.  Indeed, internet advertising increasingly personalizes advertising, starting with geographic locale.

Introduction to the balance sheet and income statement every student should utilize in managing their personal finances.

Readings:

Topics:

The Enterprise:  What  is a Company? 

All companies are ORGANIC, as with the human beings who comprise them, companies grow, transform, as part of natural evolution.  In a global economy, marketing products and services retains a local orientation, e.g., Walmart IT Systems.  Indeed, internet advertising increasingly personalizes advertising, starting with geographic locale.

Introduction to the balance sheet and income statement every student should utilize in managing their personal finances.

Readings:

Topics:

Common Functions of Every Enterprise

1.Marketing

A.Venture: What business do you want to be in?

B.Existing company

C.Market size; Demographics; Competition; Barriers to entry; Growth potential; Risks

2.Procurement-Supply Chain/ Distribution to Point of Sale: JUST IN TIME DELIVERY

DEFINITION: An inventory/production strategy to increase efficiency and decrease waste by shipping and receiving materials and goods only as needed in the production process, thereby reducing inventory and associated carrying costs and thus increasing return on investment. Just In Time Delivery requires that producers accurately forecast demand.

A.Manufacturing

B.Retail: The power of brands

C.Banking

D.Professional Services

E.Travel, Leisure, Entertainment

F.         Natural Resources

3.Distribution to Point of Sale

4.Research and Development:

R&D % of Revenue varies by industry; Creating moats

5.Intellectual Property:

Protecting moats with Patents and Trademarks

6.Risk Management:

Hedging; Insurance; Contingent fee system in US but not Europe; BP Macundo Spill

7.Tax, Legal, and Regulatory Compliance:

Tax as Profit Center: e.g.: Google, Ireland. Italy’s struggle with “Nexus” vs. Domicile

8.Finance:   To be the subject of a future class 

Handouts: Organization Chart

Readings:

Topics:

Common Functions of Every Enterprise

1.Marketing

A.Venture: What business do you want to be in?

B.Existing company

C.Market size; Demographics; Competition; Barriers to entry; Growth potential; Risks

2.Procurement-Supply Chain/ Distribution to Point of Sale: JUST IN TIME DELIVERY

DEFINITION: An inventory/production strategy to increase efficiency and decrease waste by shipping and receiving materials and goods only as needed in the production process, thereby reducing inventory and associated carrying costs and thus increasing return on investment. Just In Time Delivery requires that producers accurately forecast demand.

A.Manufacturing

B.Retail: The power of brands

C.Banking

D.Professional Services

E.Travel, Leisure, Entertainment

F.         Natural Resources

3.Distribution to Point of Sale

4.Research and Development:

R&D % of Revenue varies by industry; Creating moats

5.Intellectual Property:

Protecting moats with Patents and Trademarks

6.Risk Management:

Hedging; Insurance; Contingent fee system in US but not Europe; BP Macundo Spill

7.Tax, Legal, and Regulatory Compliance:

Tax as Profit Center: e.g.: Google, Ireland. Italy’s struggle with “Nexus” vs. Domicile

8.Finance:   To be the subject of a future class 

Handouts: Organization Chart

Readings:

Topics:

Common Functions of Every Enterprise

1.Marketing

A.Venture: What business do you want to be in?

B.Existing company

C.Market size; Demographics; Competition; Barriers to entry; Growth potential; Risks

2.Procurement-Supply Chain/ Distribution to Point of Sale: JUST IN TIME DELIVERY

DEFINITION: An inventory/production strategy to increase efficiency and decrease waste by shipping and receiving materials and goods only as needed in the production process, thereby reducing inventory and associated carrying costs and thus increasing return on investment. Just In Time Delivery requires that producers accurately forecast demand.

A.Manufacturing

B.Retail: The power of brands

C.Banking

D.Professional Services

E.Travel, Leisure, Entertainment

F.         Natural Resources

3.Distribution to Point of Sale

4.Research and Development:

R&D % of Revenue varies by industry; Creating moats

5.Intellectual Property:

Protecting moats with Patents and Trademarks

6.Risk Management:

Hedging; Insurance; Contingent fee system in US but not Europe; BP Macundo Spill

7.Tax, Legal, and Regulatory Compliance:

Tax as Profit Center: e.g.: Google, Ireland. Italy’s struggle with “Nexus” vs. Domicile

8.Finance:   To be the subject of a future class 

Handouts: Organization Chart

Readings:

Topics:

Common Functions of Every Enterprise

1.Marketing

A.Venture: What business do you want to be in?

B.Existing company

C.Market size; Demographics; Competition; Barriers to entry; Growth potential; Risks

2.Procurement-Supply Chain/ Distribution to Point of Sale: JUST IN TIME DELIVERY

DEFINITION: An inventory/production strategy to increase efficiency and decrease waste by shipping and receiving materials and goods only as needed in the production process, thereby reducing inventory and associated carrying costs and thus increasing return on investment. Just In Time Delivery requires that producers accurately forecast demand.

A.Manufacturing

B.Retail: The power of brands

C.Banking

D.Professional Services

E.Travel, Leisure, Entertainment

F.         Natural Resources

3.Distribution to Point of Sale

4.Research and Development:

R&D % of Revenue varies by industry; Creating moats

5.Intellectual Property:

Protecting moats with Patents and Trademarks

6.Risk Management:

Hedging; Insurance; Contingent fee system in US but not Europe; BP Macundo Spill

7.Tax, Legal, and Regulatory Compliance:

Tax as Profit Center: e.g.: Google, Ireland. Italy’s struggle with “Nexus” vs. Domicile

8.Finance:   To be the subject of a future class 

Handouts: Organization Chart

Readings:

Topics:

Administration and Oversight          

1.       The Organization Chart

2.The Constituency Chart:

Shareholders, Debt holders, Managers, Employees, Community, Environment

 3.       Boards of Directors:

Governance  Models; Private and Public Companies; Europe; Americas.

Buffet; Separation of Management and Ownership: Form over Substance?

History of Transformation to “Professional Management”

Family Control Creates Superior Long Term Value:

DuPont; Ford; Walmart; Google; Luxottica; Fiat; Ferrero; Tata; Newscorp

Assignment: John Elkann Fiat Chairman Speaks on Family Business https://www.youtube.com/watch?v=HVWqNqgav_A

3.Board Committees

4.Business Ethics:

Management stock option Incentives; : “The Coin Flip Trader”; Long-term v. Short-term; Company Culture: No one from Wall Street went to jail in 2008; nor did anyone of Fannie Mae/Freddie Mac; or Academics.

See, Munger : Psychology Of Human Misjudgement, Https://Www.Youtube.Com/Watch?V=Pqzccfuglws

“Psychological Denial”; “Incentive Caused Bias ;  “Bias from Self Confirmation and Consistency”; Pavlovian Association (advertising Coca Cola; raising prices increases sales; oil companies followed Exxon in buying fertilizer companies – all disasters); “Killing the Messenger of Bad news Syndrome”; Efficient /market theory—disproved by Berkshire Hathaway, but won Nobel Prize;;  Over Influence by Authority. –pilot drives plane into crash, while co-pilot never intercedes 25% of the time; Envy. Jealosy Bias  obscures objectivity; Gambling compulsion – validty delusion by your choice; Liking distortion/Disliking distortion—rejection by personal prejudice; ADVISORY BIAS –CHALLENGE highly credentialed advisors —THEY ALWAYS RECOMMEND MORE ADVICE; If Successful People Cheat You Or Even Only Your Customers, Get Rid Of Them, They Will Do It Again !!. MOST DANGEROUS EVNIRONMENT IS WHERE YOU ARE BESET BY A COMBINATION OF PSYCHOLOGICAL ATTACKS – AN AUCTION- A BOARD OF DIRECTORS –AUTHORITY FIGURE—NO ONE QUESTIONS—INCENTIVES TO GO ALONG – CEO IS CORRECTED ONLY AFTER DISASTER

5.Roles of Outside Advisors:

Accountants; Lawyers; Investment Bankers; Consultants

Readings:

Topics:

Administration and Oversight          

1.       The Organization Chart

2.The Constituency Chart:

Shareholders, Debt holders, Managers, Employees, Community, Environment

 3.       Boards of Directors:

Governance  Models; Private and Public Companies; Europe; Americas.

Buffet; Separation of Management and Ownership: Form over Substance?

History of Transformation to “Professional Management”

Family Control Creates Superior Long Term Value:

DuPont; Ford; Walmart; Google; Luxottica; Fiat; Ferrero; Tata; Newscorp

Assignment: John Elkann Fiat Chairman Speaks on Family Business https://www.youtube.com/watch?v=HVWqNqgav_A

3.Board Committees

4.Business Ethics:

Management stock option Incentives; : “The Coin Flip Trader”; Long-term v. Short-term; Company Culture: No one from Wall Street went to jail in 2008; nor did anyone of Fannie Mae/Freddie Mac; or Academics.

See, Munger : Psychology Of Human Misjudgement, Https://Www.Youtube.Com/Watch?V=Pqzccfuglws

“Psychological Denial”; “Incentive Caused Bias ;  “Bias from Self Confirmation and Consistency”; Pavlovian Association (advertising Coca Cola; raising prices increases sales; oil companies followed Exxon in buying fertilizer companies – all disasters); “Killing the Messenger of Bad news Syndrome”; Efficient /market theory—disproved by Berkshire Hathaway, but won Nobel Prize;;  Over Influence by Authority. –pilot drives plane into crash, while co-pilot never intercedes 25% of the time; Envy. Jealosy Bias  obscures objectivity; Gambling compulsion – validty delusion by your choice; Liking distortion/Disliking distortion—rejection by personal prejudice; ADVISORY BIAS –CHALLENGE highly credentialed advisors —THEY ALWAYS RECOMMEND MORE ADVICE; If Successful People Cheat You Or Even Only Your Customers, Get Rid Of Them, They Will Do It Again !!. MOST DANGEROUS EVNIRONMENT IS WHERE YOU ARE BESET BY A COMBINATION OF PSYCHOLOGICAL ATTACKS – AN AUCTION- A BOARD OF DIRECTORS –AUTHORITY FIGURE—NO ONE QUESTIONS—INCENTIVES TO GO ALONG – CEO IS CORRECTED ONLY AFTER DISASTER

5.Roles of Outside Advisors:

Accountants; Lawyers; Investment Bankers; Consultants

Readings:

Topics:

Managing and Providing Incentives for Employees

1.Annual Reviews:

The GE Rule: Only the Top 10% Stay.

Tangible: Revenue/Profit Generation.

Intangible: Leadership; Creativity; Constituent Relationships

2.Things Employee Controls and Does not:

“Five Controllable Characteristics that guarantee success”. See Handout Class 1

Assignment: “By What Factors Would You Judge Co-Workers?”

         Please email the assignment to the Professor by 5 P.M. Monday October 20

Readings:

Topics:

International

1.Cultural Aspects

2.Marketing and Sales

3.Operations and Procurement

4.Labor

5. Tax, Legal, Regulatory

6.Negotiations

7.Capital Markets

 Handouts: ummary Comparison of Legal forms of Business Entities

REVIEW PRIOR TO NEXT CLASS : FORMS OF BUSINESS OWNERSHIP: Source:  UTAH STATE OFFICE OF EDUCATION, “Entrepreneurship UNIT 3.2A, CREATING THE BUSINESS PLAN, A Complete Discussion of Legal Forms of Ownership”.  PDF LINK:  Allen, Kathleen R., & Meyer, Earl (2006). “Entrepreneurship and Small Business Management.” New York: Glencoe, p. 143. Section II

Readings:

Topics:

International (continued from Class14 October 17)

Forms of Business Enterprise

1.Sole Proprietorship – Legal Form, Probably a Corporation

A.Touring Sports Professional 

B.International Scope: Colombo Mobili (Milano)

C.Distribution: Baker, Knapp & Tubbs in U.S.

D.Antique Shop

E.Construction; Trades can build fortunes, see, Generoso Pope

F.Car dealership/Franchises

2.Corporations

2.Partnerships and Limited Partnerships:

e.g.,Hedge Funds. Law, Medicine, Consulting, etc. 

3.Other:

Joint Venture.  In U.S.: “Sub S. Corporation, LLC

4.Non-Profit:

University, Museum, Hospital, Research Foundation

Handout: Balance Sheet; Income Statement: Cash Flow Statement

Readings:

Topics:

Management’s Language and its Application

Accounting: The Language of Management

Every enterprise regardless of size or nationality deploys the common language of management – All will be covered in detail during the second half of this course. US dialect: GAAP; EU, Russia, Hong Kong, India, Australia dialect: IFRS.

Start with a student’s individual Balance Sheet. Income Statement; Cash Flow

           Balance Sheet. Income Statement; Cash Flow

           Importance of Margins: Gross; Operating: Pre-Tax; After Tax

Anecdotal Experience: Hillman; RJR (Red Book); Walmart (Info Systems)

Course Handouts:1)  IROR; NPV, and Return of Capital Multiple: 2) IROR Excel; 3) Dupont Formula

Readings:

Topics:

1.Performance and Identifying Opportunity

ROA; ROE; Net Present Value (Vandell Article); “Risk Adjusted” Discount Rate; Payback Period; Rule of 72; Cap Rate; Fixed v. Variable Costs; Margins; Du Pont Formula.

1.Budgeting and Resource Allocation:

Hurdle Rate; Cost of Capital; Projection (“Psychology of Conservative Case”);

Risk Adjusted Returns (recommended reading: Against the Gods, Peter L. Bernstein)

Readings:

Topics:

1.Performance and Identifying Opportunity

ROA; ROE; Net Present Value (Vandell Article); “Risk Adjusted” Discount Rate; Payback Period; Rule of 72; Cap Rate; Fixed v. Variable Costs; Margins; Du Pont Formula.

1.Budgeting and Resource Allocation:

Hurdle Rate; Cost of Capital; Projection (“Psychology of Conservative Case”);

Risk Adjusted Returns (recommended reading: Against the Gods, Peter L. Bernstein)

Readings:

Topics:

REVIEW AND BRIEF INTRODUCTION TO “THE BUSINESS PLAN”

STUDENTS SHOULD STUDY FOR THE NEXT CLASS OCTOBER 29:

POWER POINT : Source:  UTAH STATE OFFICE OF EDUCATION,  “ENTREPRENEURSHIP  UNIT 3.2, CREATING THE BUSINESS PLAN”. POWERPOINT LINK:  Allen, Kathleen R., & Meyer, Earl (2006). “Entrepreneurship and Small Business Management.” New York: Glencoe, p. 143. Section II:

         Handout: Business Plan   : Giacalone Luca Exam from 2013

Readings:

Topics:

REVIEW AND BRIEF INTRODUCTION TO “THE BUSINESS PLAN”

STUDENTS SHOULD STUDY FOR THE NEXT CLASS OCTOBER 29:

POWER POINT : Source:  UTAH STATE OFFICE OF EDUCATION,  “ENTREPRENEURSHIP  UNIT 3.2, CREATING THE BUSINESS PLAN”. POWERPOINT LINK:  Allen, Kathleen R., & Meyer, Earl (2006). “Entrepreneurship and Small Business Management.” New York: Glencoe, p. 143. Section II:

         Handout: Business Plan   : Giacalone Luca Exam from 2013

Readings:

Topics:

All Begins with “The Business Plan”

A.Starting a Company: the plan must address each element common to all business enterprises and project future results.

B.Existing Company : The Annual Negotiation; setting the bar.

Finance:  Raising Capital to Fund the Business Plan

·Equity Valuation:

·New Business: Present Value of Future Cash Flows; “Risk-Adjusted”; Margin of Safety

·Existing Business: Market Value

·Equity Financing:

                        New Business: Venture Capital

                  Existing Business: Private Equity; Public Markets

· Debt Financing

·New Business: not realistic: equity risk for debt returns

·Existing Business: Banks; Public and Private Debt Markets

Readings:

Topics:

All Begins with “The Business Plan”

A.Starting a Company: the plan must address each element common to all business enterprises and project future results.

B.Existing Company : The Annual Negotiation; setting the bar.

Finance:  Raising Capital to Fund the Business Plan

·Equity Valuation:

·New Business: Present Value of Future Cash Flows; “Risk-Adjusted”; Margin of Safety

·Existing Business: Market Value

·Equity Financing:

                        New Business: Venture Capital

                  Existing Business: Private Equity; Public Markets

· Debt Financing

·New Business: not realistic: equity risk for debt returns

·Existing Business: Banks; Public and Private Debt Markets

Readings:

Topics:

Review

Final Exam Distributed

Readings:

Topics:

GUEST LECTURER: FRANCESCA VILLA, CO-OWNER, VILLA ATELIER, http://www.villa.it/

Readings:

Topics:

• Accounting: glossary and vocabulary, terms and definitions.

Readings:

E-Book: (Basic accounting- how to prepare and analyze financial statements) edited by Patrizia Tettamanzi, Gaia Blandano, Sophie Goodman, Ipsoa Gruppo Wolters Kluwer and other Teaching Material on the Course Website

Topics:

• Introduction to financial accounting

Readings:

E-Book and other Teaching Material on the Course Website

Topics:

• Accounting for business transactions

Readings:

E-book and other Teaching Material on the Course Website

Topics:

• Recording transaction in the journal book and in the ledger book

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Recording owner's contribution and financing operations

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Review session

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Recording long-lived assets and other investments

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Recording purchases

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Recording sales and employees compensation

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Review session

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Adjusting entries at the end of the period
• Integration entries

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Adjusting entries

Readings:

E-Book and Teaching Material on the Course Website

Topics:

• Depreciation entries and writing of the cost of intangible assets

Readings:

E-Book and Teaching Material on the Course Website

Topics:

Review session

Readings:

Topics:

• Final test (written)/Midterm test (written)

Readings: