STM

School of Technology and Management

Course Outline MBA Semester 2 August 2010

Assignment Deadline 20th October 2010.

MBA Course Leader: Dr. Rajendra Kumar: rajendra.kumar@lsclondon.co.uk

Course Administrators: Phil Downing: philip.downing@lcsclondon.co.uk Helen McQuillan: Helen.mcquillan@lsclondon.co.uk

Contents

Business Strategy in the Global Environment

Module Description Indicative Content Indicative Reading List Lecture Sequence Case Studies

Page 3

3 3 4 5-7 8-23 24 24 24 25 26-27 29 30 30 30 31 32 33-38 39 39 39-40 40-41 42 43-44 46 46 46 47 48 49-52 53 53 53 53 55 56-57

Research Methodology
Module Description Indicative Content Assessment and Assignment Indicative Reading List Lecture Sequence

International Business and Policy

Module Description Indicative Content Indicative Reading List Lecture Sequence Sample Questions

Marketing Strategies
Module Description Indicative Content Indicative Reading List Lecture Sequence Sample Questions International Marketing Management Module Description Indicative Content Indicative Reading List Lecture Sequence Sample Questions

Corporate Finance
Module Description Indicative Content Indicative Reading List Lecture Sequence Sample Questions

Investment Management and Capital Markets

Module Description Indicative Content Indicative Reading List Lecture Sequence Sample Questions Assignment

58 58 58 58 60 61-67

Module Title: Business Strategy in the Global Environment Module Lecturer: Mervyn Sookun
1.Module Description This module provides students with a forum in which to apply and integrate business theories, practices, skills and strategies used by organisations in the corporate world. The module examines a range of multifaceted issues that business people must handle in order to be effective, and explores how various business disciplines interact with each other in todays global environment. 2. Learning Outcomes Upon successful completion of this module the students will be able to: Think strategically about a company, its business position, and how it can gain sustainable competitive advantage. Develop skills in conducting strategic analysis in a variety of industries and competitive situations. Use their hands-on experience in crafting business strategy; reason carefully about strategic options; use what-if analysis to evaluate action alternatives, and initiate the changes necessary to keep the strategy responsive to newly emerging market conditions. Improve their ability to manage the organization process by which strategies get formed and executed. Develop their powers of managerial judgment that is how to assess business risk, and gain a stronger understanding of the competitive challenges of a global market environment. Demonstrate the ability to design and continuously revise strategies in turbulent and hyper-competitive situations. 3. Indicative Content The strategy concept; corporate strategy. The role of the general manager in the strategy process. Models of how organisations formulate strategy. Formal strategy analysis. Strategy formulation. Forms of organisational structure; organisational analysis The role of culture and power in strategy. Managerial styles and their impact on strategy and operations. Process by which strategy is formulated and formed in particular situations. The impact of the internal and external environments. Strategic changes; leadership requirements for strategic change. Working in collaboration with others to implement strategic change. Learning from others; appreciating and leveraging differences. Appropriate case studies.

4. Delivery Teaching methods employed include lectures, case analyses, strategy simulation games, seminars and teamwork.

Notional Student Workload

Lectures Seminars Directed learning Independent Learning Formal Assessment Total 22.5 hours 7.5 hours 40 hours 74 hours 6 hours 150 hours

5.

Assessment The formal assessment of this module will be conducted through a closed book examination. Closed book examination 100% The closed book examination will be of three hours duration

6. Concise Indicative Reading List Core text: Mintzberg H, Quinn J. and Ghoshal S (2004) The Strategy Process (European Edition) (4th edn). Prentice Hall, UK Recommended Reading: Johnson G. and Scholes K. (2008) Exploring Corporate Strategy, (8th Edn) Prentice Hall, UK, Lynch R. (2006) Corporate Strategy, (4th edn) Pitman Publishing, London Stacey R. (2007) Strategic Management and Organisational Dynamics, (5th edn) Pitman, UK Rosen R (2006) Strategic Management: An Introduction, Pitman, UK Rugman A and Hodgetts R (2006) International Business: A Strategic Management Approach, (7th edn) McGraw-Hill, UK

7. Lecture Sequence for Business Strategy in the Global Environment

Lecture No Topic(s) Covered The Conceptual Paradigm. Readings Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 1 ; Ch 3.1 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 1 Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 2 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 5, 6, 9 Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 3; Ch 5 Formative and summative assessment Case: Ministry of Sound Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, P. 617

Corporate and businesslevel strategy. 2

Case: The News Corporation Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases. P. 760

The strategic and planning focus. Models of how organisations formulate strategy

Case: Chem Tech www. Booksites.net/ecs

4 Seminar 1 The changing strategic context. Formal strategy analysis Revision Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 4 Case: Marks & Spencer Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, (8th Ed.) P. 966

Lecture No

Topic(s) Covered Critical evaluation of strategic management.

Readings

Formative and summative assessment

Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 4, 5 & 6

7 Strategy formulation

Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 4, 5 & 6

8 Seminar 2: Organisational analysis

Group Presentation

Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 7, 8 & 9 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 8 Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 17 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 4 Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 16, 17 & 18 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 3

Case: Sony Arts Council Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, P. 924; 937

10

The role of culture and power in strategy

Students identify elements and dimensions of national culture, and engage in effective crosscultural communication, to analyse the indicated case, and make a brief presentation of 10 minutes each. Cases: Amazon The Formula One Constructors Baan Company Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, (P. 647; 673; 685

11

The internal environment focusGroup Seminar-3

Lecture No.

Topic(s) Covered

Readings

Formative Summative Assessments

Seminar 3: 12 13 The external environment focus. The impact of the internal and external environments

Group Presentation Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 2, 6 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 10 Mintzberg, H. Lampel, J. Quinn, J. and Goshal, (Eds). (2004). The Strategy Process Ch 10, 11 &12 Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: text and cases, (8th Ed.) Ch 11 Cases: SAAB Miller Ryanair Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, (8th Ed.) P. 807; 832 Case Study/Simulation

Strategies for change14

Leadership requirements for strategic changes 15

Case: Eden Project Johnson, G., Scholes, K. & Whittington, R. (2007), Exploring Corporate Strategy: Text and Cases, P. 979

16

Seminar 4:

Group Presentation

17

Implementation of strategic changes. Contemporary issues in strategy

Interactive session to provide an overview of contemporary issues in strategy management. Self managed study to explore in more depth a contemporary issue in strategy of particular interest to the individual students.

18

Managing Diversity The Diversified Organisation

Mintzberg et al. (2007) Chapter 17. Pp 432-451

19

From Competitive Advantage to Corporate Strategy Seminar 5

Mintzberg et al. (2007) Chapter 17. Pp 432-451 Topics Revision

20

Case Studies 1. ASOS

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2. Legal Services Commission

12

13

14

15

3. Corus

16

17

18

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4. Syngenta

20

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Module Title

Research Methodology

Module Lecturers: Stephen Malone

The aim of the module is to equip students to plan and conduct a research project leading to the production of a Masters level dissertation. The general goal is to introduce and develop the skills needed to conceptualise a problem and a viable research topic. Students will make use of available literature, design a research strategy, evaluate, organize, and integrate relevant data (both existing and new), derive useful solutions, and communicate those solutions in an appropriate form to clients and colleagues. The module will prepare students to continue their own professional education and contribute to the development of the profession as a whole, at a standard commensurate with the current level of knowledge. The module surveys the basic processes of research methodology as practised in the social sciences. Underlying principles of science and logic are emphasized and special attention is directed toward the recognition of common sources of error and bias in the implementation and interpretation of research studies as it affects the outcomes of research utilization. 1. Learning Outcomes On successful completion of the module the students will be able to: understand the scientific process, its application in the social sciences, and its utilisation in the problem-solving approach to academic and professional practice demonstrate the skills necessary to assess, interpret and critically evaluate existing research as a prelude to carrying out further investigation. demonstrate knowledge and understanding of a range of research designs and their appropriate utilisation. conceptualise a problem; formulate objectives and derive research hypotheses/research questions. design a research strategy and design to collect, analyse, and interpreting both quantitative and qualitative data, including commonly encountered statistical procedures. understand the theoretical principles underlying inferential statistics understand and use descriptive statistics analyse datasets appropriately integrate the findings of existing research to ask a new research question write a formal written research proposal engage in critical thinking when reading and comprehending research articles choose the most appropriate statistical analyses, interpret the results, and write up the results accurately and completely. 2. Indicative Content

the nature and types of research problem identification and research question/hypothesis generation the use of library resources and the review of the related literature

24

research design and planning research in an ethical manner (protection of human subjects) strategies to enhance the validity of qualitative and quantitative designs descriptive statistics and graphical presentations measurement issues including reliability and validity procedures for planning qualitative and quantitative research studies procedures for collecting and analyzing data for qualitative and quantitative research studies introduction to statistical inference and hypothesis testing introduction to the computer as a research tool.

3. Delivery A variety of teaching approaches is used, including lectures, seminars, case analysis, teamwork and extensive student self-managed research. 4. Assessment The assessment breakdown will depend upon your chosen MBA route. For UWIC progression the mark allocation is as follows:

Research Proposal and plan - 100% [Assignment]

To pass, a mark of 40% or more must be achieved. You are required to construct and present a comprehensive plan of the research programme. The plan will include the following elements: a clearly specified research aim with objective(s) an initial review of the literature relating to the theme you have chosen. a description and justification of the methodology to be used, a justification of the methods employed a research timetable (project plan) and an appraisal of the resource needs for the project

The Proposal should be 2,500 to 3,000 words in length. Half of this should be devoted to your literature review. The Proposal should specify your research topic and the rational for choosing it. In addition to the literature review, it should present a schematic model of your proposed research, describe your research methodology, the access you have for carrying out the research, and the planned analyses of the data.A pass mark must be achieved as a prerequisite to continuing on to the Dissertation in the 3rd semester.

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5. Indicative Reading List: RESEARCH METHODOLOGY INDICATIVE BIBLIOGRAPHY

CORE TEXT:

Bryman A and Bell E. (2007) Business Research Methods, 2 ND Ed, Oxford: Oxford University Press.

Recommended starter text: Saunders M., Lewis P. & Thornhill A. (5th ed 2009) Research Methods for Business Students. London: FT Prentice-Hall. This is an introductory text and is a good starting point for study. In addition to Bryman and Bell other useful more advanced texts include: Gill and Johnson (2002), Easterby-Smith, Thorpe and Jackson, (2008), Creswell (2009).

General Denscombe, M. (2007), The Good Research Guide,(3rd ed.). OUP. Easterby-Smith, M., Thorpe, R., Jackson, P. (2008) Management Research An Introduction, London: Sage Gilbert, N. (2008) Researching Social Life (3rd ed.)London, Sage Gill, J. and Johnson, P., (2010), Research Methods for Managers,(4th ed.) London: Paul Chapman Publishing Collis, J. & Hussey, J. (2009), Business Research: A Practical Guide for Undergraduate and Postgraduate Students, (3 rd ed.). London: Macmillan Murray, R. (2002) How to Write a Thesis, Maidenhead, Open University Press Partington, D. ed. (2002), Essential skills for management research, Sage. Remenyi, D, & B. Williams & A. Money & E. Swartz (2005) Doing Research in Business and Management: An Introduction to Process and Method, London; Sage White, B., 2000, Dissertation Skills, Cassell

Quants Bryman, A. and Cramer, D. (2008) Quantitative Data Analysis with SPSS 14,15 and 16: A Guide for Social Scientists,(1st ed.). London, Routledge Field, A. (2009) Discovering Statistics using SPSS (3nd Ed) London, Sage Morris, C. (2008) Quantitative Approaches in Business Studies,(7th ed). FT/Prentice

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Hall. Oppenheim, A. (2000) Questionnaire Design, Interviewing and Attitude Measurement, London, Continuum Rees, D. (2001) Essential Statistics 4th ed , London, Chapman-Hall Sapsford, R. (2001) Survey Research, London, Sage Quals Flick, U. (2009) An Introduction to Qualitative Research,(4 th ed). London, Sage Goulding, C. (2002) Grounded Theory: A Practical Guide for Management, Business and Market Researchers, London, Sage Silverman, D. (2004) Doing Qualitative Research,(2 nd ed). London: Sage Mixed Creswell, J.W. (2009) Research Design: Qualitative, Quantitative and Mixed Methods approaches

Useful Websites http://www.geocities.com/orgscience/home.htm - Charles Booths site, a good start for research methods information on the web http://www.socialresearchmethods.net - Bill Trochim of Cornell Universitys Research Methods Knowledge Base and more http://www.shef.ac.uk/~scharr/triage/index/qualit.htm - useful qualitative site http://www.sysurvey.com/tips/arsham.htm - comprehensive survey design & analysis site http://onlineqda.hud.ac.uk/ Outcome of an ESRC project a really useful qualitative site that explains clearly qualitative methodology and QDA qualitative data analysis http://www.rds-eastmidlands.org.uk/index.php This is the National Institute for Health Research website with lots of useful information on various methods, analysis, statistics Look under resources and then resource packs (2009)

Others
Monette D.R., Sullivan, T.J. and Dejong, C.R. (2010) Applied Social Research: Tool for the Human Services, (8th edn). Cengage Learning Cameron, S (2007) The MBA Handbook. Skills for Mastering Management, Pitman

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6. Lecture Sequence (Indicative) Reading Plan For Your Research Plan to read through at least one of the research methods texts. Invest additional reading time to the areas pertaining to your research For example, Qualitative or Quantitative methodologies depending upon the focus of your research. This content is indicative. Precisely what will be delivered depends upon you and how we are progressing, responding to your particular needs. This means that sometimes the lecture sequence may be adjusted. There will also be slides, exercises, questions, and other support materials (and me!), all of which are not in the textbook, though slides and notes will be accessible on the portal. Classes are crucial to your development and you MUST attend all classes. You cannot replicate the discussion, debate, challenge and critical thinking that take place inside a classroom, in a textbook.

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7. Lecture sequence for Research Methodology Lecture 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 19. 18. 20. Topics Introduction to Research Methodology Selecting a research topic Generating Research ideas Seminar-1 Proposal development and management Fundamentals of research design Data collection and analysis Seminar-2 Sampling design Primary data collection Observations, in-depth interviews and other qualitative techniques Seminar-3 Critical literature review Writing proposals and projects: Referencing Basic analytical methods Seminar-4 Negotiating Access and Ethics Quantitative Data Analysis Qualitative Data Analysis Seminar-5 Ch6, Pp 168-210 Ch12, Pp 414 Ch13, Pp 480 Ch4, Pp93-124
Ch3, Pp74-92

Indicative Readings Ch1,Pp3-36 Ch2, Pp38-72 Ch3 Pp74-92

Ch3, Pp74-92 Ch4, Pp93-124 Ch24, Pp625-639

Ch7, Pp179-206 Ch21 Pp 553-576 Ch18, 471-508

Ch6, Pp 155-177

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Module Title : International Business and Policy Module Leader: Dr. Bernadette Warner
1. Module Description This module aims to provide a comprehensive approach to international business issues and their relationship to domestic practice. Learning outcomes Upon successful completion of this module students will be able to: describe international business practices and discuss how they are being shaped by economic theories, financial, socio-cultural and political forces; with particular emphasis on the business practices of UKs major trading partners; identify general, and special problems, issues facing managers of international business operations; discuss the appropriate criteria for the form and location of international operations; discuss the strategies, tactics and manoeuvres of international marketing as they relate to managing an international business enterprise; demonstrate an understanding of UKs international performance, position, and problems, as well as opportunities and alternatives; recognise trends and reactions in worldwide companies based in industrial or less developed countries. Indicative content Introduction to international business and forces for globalisation Theories of international trade The regulatory environment: Political, legal and human resources management The cultural environment International co-operation and the role of ethical and social responsibility in international business International entry strategy: Strategic planning and managing risk Global marketing and control Competitive strategy and international production and supply International alliances and organisational design for international business Trends and new directions in international business Delivery A variety of teaching approaches is used, including lectures, seminars, case analysis, teamwork and extensive use of self-managed learning for guided research.

2.

3. 4.

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Notional Student Workload Lectures Seminars Directed Learning Independent Learning Formal Assessment Total 5.

22.5 hours 7.5 hours 40 hours 78 hours 2 hours 150 hours

Assessment The formal assessment of this module will be conducted through a closed book examination. Closed book examination 100% The closed book examination will be of three hours duration

6.

Indicative Reading List Core texts Hill, C. (2009) International Business (7th edn) McGraw-Hill Higher Education,

Recommended Additional Reading Bartlett, C. A. and Beamish, P.W. (2010) Transnational Management: Text, Case & Readings in Cross-Border Management( 6th ed). McGraw-Hill Education Burnes, B. (2009) Managing Change. (5th Ed) London: Prentice Hall Cavusgil, S., Knight, G., Riesenberger, J.R. (2008). International Business: Strategy, Management and the New Realities. Upper Saddle River: Pearson/Prentice Hall. Hofstede, G. (1984) Cultures Consequences. International Differences in Work Related Values. London: Sage. Hofstede, G. (1994) Cultures and Organisations. Software of the Mind. London: Harper Collins. McKenna, E. (2006) Business Psychology and Organisational Behaviour (4th edition) London: Psychology Press Mullins L (2009) Management and Organisational Behaviour (8th edition) London: FT Pitman Trompenaars, F & Trompenaars, A & Hampden-Turner, C. (1998) Riding The Waves of Culture: Understanding Cultural Diversity in Global Business. McGrawHill Porter M.E. (1998) Competitive Advantage of Nations Basingstoke: Palgrave Macmillan Tayeb, Monir (2000). International Business: Theories, Policies and Practices. Pearson Education Ltd.

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7.

Lecture Sequence for International Business and Policy

Topics Introduction International Business and Globalisation International Business Approaches Theories of International Trade International Market Entry Methods Indicative Readings
Trompenaars et al Ch 1 Hill (2007) Ch 1 & 2 Hill (2007) Ch 5 Question 2 Hill (2007) Ch 6 & 14

Lecture
1.

Refer to Sample Question(s) No

Question 1

2.

3.

Question 3 Question 4

4. 5. 6.

Seminar 1 International Market Analysis Global marketing and control. Culture International Cultural Differences;
Hill (2007) Ch 6 & 14 Hill (2007) Ch 6 & 14 Hofstedes Cultural Analysis (1984) Hill (2007) Ch 3 Question 8 Question 11

7.

8. 9.
10.

Seminar 2 Cultural Issues in International Business Strategic International Human Resource Management International Operations Management: Seminar 3 Strategic Planning and Managing Risks. Competitive strategy and International Production and Supply International Monetary System ---International Alliances and Organisational Design for International Business. Group Seminar4 Seminar 4
Buelens et al (2005)
Ch 11

Question 9 Hofstedes Cultural Analysis (1984) Hill (2007) Ch 3 Hill Ch 18 Trompenaars et al Ch 2 Hill (2007) Ch 12;Ch 13 Question 12

Question 14

11.

Question 15

12. 13. 14.

Hill (2007) Ch 12;Ch 13 Hill (2007) Ch 12;Ch 13 Question 16 Hill (2007) Hill (2007) Ch 9; 10 Question 19

15.

16.

Question 12

17.

International Leadership

Buchanan and Huczynski (2007) Ch

21

Mullins (2007) Ch 10 McKenna (2000) Ch

Question 20

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Buelens et al (2005)
Ch 11

18.

Future Trends International Awareness

Buchanan and Huczynski (2007) Ch

21

Mullins (2007) Ch 10 McKenna (2000) Ch

8

19.
20.

Corporate Social Responsibility Seminar5

Hill (2007) Ch 4

Question 17

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8. IBP - SAMPLE QUESTION

Q/No

QUESTIONS
Ford Case Study 1. Discuss and justify what you feel to be the main auto industry (global) drivers, together with the corresponding generic marketing strategies and key success factors that the major suppliers should possess, if they are to be successful. 2. Discuss the rationale behind Fords 2000 globalisation plan and comment on performance over the period 1994 to 2004. 3. Drawing upon relevant issues from the case, recommend and defend a possible future marketing strategy (or strategies) for Ford. Dell Case Study Debate the following options: Option 1: Dell could simply leave Brazil altogether Option 2: Dell could stay in Brazil but go to another state Option 3: Dell should stay put and negotiate with the new Governor Pizza Hut in Brazil Case Study 1. What are the location-specific advantages that Brazil has to offer? How do these advantages differ from those offered by other markets in Latin America? Should Pizza Hut put more of its efforts in expanding in Brazil or somewhere in South-East Asia? Why? 2. What dimensions of local political and economic environment have an impact on Pizza Huts success in Brazil in volume, revenues and profitability? How could a change in those dimensions affect Pizza Huts success? 3. Why did Pizza Hut decide to purchase some stores in Brazil instead of continuing to expand through issuing franchises? What are the strengths and weaknesses of this strategy? Why do firms internationalise, and what might be three generic strategies the international firm is likely to use in this process? How do MNEs control and evaluate their global
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COVERED IN

TO BE ATTEMPTED BY STUDENT AFTER

Lecture 1

Lecture 1

Lecture 2

Lecture 2

Lecture 3

Lecture 3

Seminar 1 Topic

Lecture 1 Lecture 2 Lecture 3

operations?

Seminar 1

Multinational enterprises are different from companies that confine their activities to the domestic market. A multinational enterprise (MNE) is a firm headquartered in one country with operations in other countries. Why would firms consider becoming a multi-national enterprise? Please describe fully a typical internationalization process for a firm producing a standardised product. When is the Multi-national enterprise (MNE) likely to use an international joint venture strategy and when might it opt for an international strategic partnership? What are the firms control and evaluation measures? Licensing, joint ventures and strategic alliances are becoming increasingly more important in terms of market entry strategies for multinational companies. Critically analyse each entry strategy and explain why it is becoming more popular with multinationals. Analyse the control and strategic management issues of each method.

Seminar 1 Topic

Lecture Lecture Lecture Seminar Lecture Lecture Lecture Seminar Lecture Lecture Lecture Seminar

1 2 3 1 1 2 3 1 1 2 3 1

Seminar 1 Topic

Seminar 1 Topic

Why would a business seeking to go international choose export-based methods in the first instance? Explain the importance of licensing, and joint ventures as alternative market entry strategies for multinational companies. Porter notes that Firms, not individual nations, compete in international markets. How does this statement help to explain some of the major challenges facing MNEs? How do the determinants of national competitive advantage help explain how companies can maintain their economic competitiveness? Illustrate how the four determinants of national competitive advantage help explain how
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Seminar 2 Topic

Lecture 3 Lecture 4 Lecture 5 Seminar 2 Lecture 3 Lecture 4 Lecture 5 Seminar 2 Lecture 3

Seminar 2 Topic

10

Seminar 2

companies can maintain their economic competitiveness.

Topic

Lecture 4 Lecture 5 Seminar 2

11

Globalisation has been instrumental in creating a common culture, especially amongst the younger generation, with tastes in consumer products and services being quite similar. Analyse if this has lead to a situation where a cultural analysis of the market is no longer required as part of the decision making process in international business.

Seminar 3 Topic

Lecture 6 Seminar 3

12

13

What is the link between an international businesss strategy and its human resource management policies, particularly with regard to the use of expatriate employees and their pay scale? 1. What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? When is each approach appropriate? 2. Research suggests that many expatriate employees encounter problems that limit both their effectiveness in a foreign posting and their contribution to the company when they return home. What are the main causes and consequences of these problems, and how might a firm reduce the occurrence of such problems? 3. What is the link between an international businesss strategy and its human resource management policies, particularly with regard to the use of expatriate employees and their pay scale?

Seminar 3 Topic

Lecture 7 Seminar 3

Seminar 3 Topic

Lecture 7 Seminar 3

14

Why do many Multi National Corporations (MNCs) use global sourcing as an alternative to producing all the parts and materials in-house? What challenges is the firm likely to face when it relies on external sources to provide essential components, parts and other production inputs.

Seminar 4 Topic

Lecture 8 Lecture 9 Seminar 4

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15

Identify and explain five factors, which make emerging markets attractive for international business? What strategies might the firm adopt so as to deal with the challenges associated with doing business in emerging markets?

Seminar 4 Topic

Lecture 10 Lecture 11 Lecture 12 Seminar 4 Lecture 10 Lecture 11 Lecture 12 Seminar 4

Why are emerging economies important considerations for foreign investors? How would inward FDI help emerging economies and their domestic industries? 16

Seminar 4 Topic

17

19

Nestl Case Study 1. How did Nestl create shared value while lowering costs and better serving supplier needs? 2. Exemplify the challenges involved in adding social dimensions to Nestls value proposition. 3. How corporate social responsibility is best managed, from a strategic perspective? 4. Illustrate several measures on the part Nestl that would constitute strategic corporate social responsibility versus responsive CSR . 5. What key factors will determine the success of the UN Global Compact No large international business can afford to do without an India strategy." When the argument was first made in June 2006, it was also observed that an economic crisis might be required in order to ensure continued increases in Indian productivity. Please provide a reasoned assessment of this argument and observation, while reviewing related developments within the international business environment since then.

Seminar 4 Topic

Lecture 10 Lecture 11 Lecture 12 Seminar 4

Seminar 4

All Lectures Seminars 1,2,3

20

Critically examine Toyotas lean production system - focused on manufacturing and

37

Seminar 4

All Lectures

supply chain management - upon the firms competitiveness in the international automobile sector. Critically evaluate the firms response to the current challenge affecting its share of the global automobile market.

Seminars 1,2,3

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Module Title : Marketing Strategies

Module Lecturer: Terry Johnson
1. Module Description The aim of the module is to equip students to plan and conduct a research project leading to the production of a Masters level dissertation. The general goal is to introduce and develop the skills needed to conceptualise a problem and a viable research topic. Students will make use of available literature, design a research strategy, evaluate, organize, and integrate relevant data (both existing and new), derive useful solutions and communicate those solutions in an appropriate form to clients and colleagues. The module will prepare students to continue their own professional education and contribute to the development of the profession as a whole at a standard commensurate with the current level of knowledge. The module surveys the basic processes of research methodology as practised in the social sciences. Underlying principles of science and logic are emphasized and special attention is directed toward the recognition of common sources of error and bias in the implementation. 2. Learning Objectives On successful completion of the module the students will be able to:
Understand the scientific process, its application in the social sciences, and its utilization in the problem-solving approach to academic and professional practice. Demonstrate the skills necessary to assess, interpret and critically evaluate existing Research as a prelude to carrying out further investigation. Demonstrate knowledge and understanding of a range of research designs and Their appropriate utilisation. Conceptualise a problem; formulate objectives and derive research Hypotheses/research questions. Design a research strategy and design to collect, analyse, and interpret both quantitative and qualitative data, including commonly encountered statistical Procedures. Understand the theoretical principles underlying inferential statistics. Understand and use descriptive statistics Analyse datasets appropriately. Integrate the findings of existing research to ask a new research questions. Write a formal written research proposal. Engage in critical thinking when reading and comprehending research articles. Choose the most appropriate statistical analyses, interpret the results and write up The results accurately and completely.

3.

Indicative Content The nature and types of research Problem identification and research question/hypothesis generation.

39

4.

The use of library resources and the review of the related literature. Research design and planning research in an ethical manner (protection of human subjects). Strategies to enhance the validity of qualitative and quantitative designs. Descriptive statistics and graphical presentations. Measurement issues including reliability and validity. Procedures for planning qualitative and quantitative research studies. Procedures for collecting and analyzing data for qualitative and quantitative research studies. Introduction to statistical inference and hypothesis testing. Introduction to the computer as a research tool

Delivery Teaching methods employed include lectures, case analyses, strategy simulation games, seminars and teamwork. Notional Student Workload Lectures Seminars Directed Learning Independent Learning Formal Assessment Total 22.5 hours 7.5 hours 40 hours 78 hours 2 hours 150 hours

5.

Assessment The formal assessment of this module will be conducted through a closed book examination. Closed book examination 100% The closed book examination will be of three hours duration

6.

Indicative Reading List Core text: Gilligan, C and Wilson RMS (2005) Strategic Marketing Management, (3rd edn) Butterworth-Heinemann,

Recommended Reading: Aaker, DA (2007) Strategic Marketing Management, (7th edn) John Wiley and Sons Keller, K. L., Aperia, T and Georgson, M. (2008) Strategic Brand Management: A European Perspective, (1st ed). F.T/Prentice Hall.

40

Doole I and Rowe L. (2008) Strategic Marketing Decisions, (CIM Course book Series) Butterworth-Heinemann Kumar, N (2004) Marketing as Strategy: Understanding The CEO's Agenda for Driving Growth and Innovation, Harvard Business School Press

41

1. Lecture sequence for Marketing Strategies

Lecture Topics Reading Refer to Sample Question(s) No

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Ch1, Pp1-37 Overview of Marketing Strategy Marketing Information Environmental Analysis Seminar-1 Customer Analysis Market Dynamics Competitive Strategy Seminar-2 Marketing Audit Product Policies Pricing Strategies Seminar-3 Distribution Planning, Segmenting Targeting and Positioning Designing Communication and Promotion Mix Strategies Implementation of Plans Marketing Organisations and Structures
Strategic Brand Management Seminar 4

Ch4, Pp 117165 Ch4, Pp 117165 Question 1 Ch 5, Pp167215 Questions 2,3 Ch 10, Pp 361-383 Ch 10, Pp 361-383 Question 5 Ch2,Pp 43- Question 4 75 Ch 3, Pp 77- Question 6 116

Question 12 Ch 8, Pp Questions 7,8,9 315-359 Ch 12 Pp Question 10 495-536 Ch 7, Pp Question 11 269-536 Ch 8 Pp315335

Ch11 Pp425465 Question 13

Marketing in the 21st Century Seminar-5: Revision

Ch 13 Pp 539-585

42

Sample Questions
Lecture
1 2 3

Topic
Overview of Marketing Strategy Marketing Information and Environmental Analysis

Questions

Customer Analysis

4 5

Seminar-1

Q1Many authors claim that the key to a successful marketing strategy is for an organisation to get close to its customers. Examine how this may be achieved and the benefits this approach can provide Topic revision(1-3) Q2Successful competitive marketing strategy may be created by combining attacking and defensive moves in order to build a stronger position for a business in its marketplace.` With reference to this statement, use examples to describe how companies can use both offensive and defensive marketing strategies which are based on military terms Q3 With reference to the steps involved, examine why it is important for companies to undertake competitive strategy Q4Management control involves evaluating performance and taking corrective actions when performance differs from plans` Detail the steps involved in this process Q5With reference to the marketing audit, show how an organisation can keep itself better informed about any internal and external changes in its marketing environment, and explain why this is an important part of marketing strategy

Market Dynamics and Competitive Strategy

Marketing Audit

43

Product Policies and Pricing Strategies

8 9

Seminar-2 Distribution Planning, Segmenting Targeting and Positioning

Q6Evaluate the strategic insights that are provided by one of the following marketing models: The performance / importance matrix The value chain Topic revision(5-7) Q7There are many models of the strategic marketing planning process. With reference to one of these, critically describe your chosen model and illustrate its usefulness in today`s dynamic marketplace Q8Evaluate the process of market segmentation and analyse the reasons why marketing strategists claim that it is `the core strategy Q9Basing your analysis on a market of your own choice, undertake a positioning study and comment on its strategic importance to the marketing manager

10

Designing Communication and Promotion Mix Strategies

Q10Analyse how and why strategic marketing communications campaigns should be planned in an integrated way. Q11Management control involves evaluating performance and taking corrective actions when performance differs from plans` Detail and discuss the steps involved in this process. Topic revision(9-11) Q12Critically evaluate the point of view that a clearly developed and communicated mission statement enables an organisation to develop strategies to meet the needs of its

11

Implementation of Plans

12 13

Seminar-3 Marketing Organisations and Structures

44

stakeholders. 14 Strategic Brand Management Q13Basing your analysis on a market of your own choice, undertake a positioning study and comment on its strategic importance to the marketing manager

15 16

Marketing in the 21st Century Seminar Topic revision(13-15)

45

Module Title: International Marketing Management Module Lecturer: Paul Reynolds

1. Module Description Traditionally, international marketers look out from their own culture and adapt ideas that work at home to a different culture abroad. However, much of marketing is context specific so we must understand these cultural contexts in order to be successful multinational marketers. Accordingly, this module considers the various aspects of international marketing from a cross-cultural perspective, and the implications for marketing practitioners. The overall aims of the subject are to: provide students with an understanding of marketing in a multinational, multicultural environment; develop their strategic decision-making skills in international marketing. Learning outcomes Upon completion of this subject students should be able to: manage the marketing function in a multinational environment; analyse the elements that influence multinational marketing; assess the importance of current issues in multinational marketing; formulate international marketing strategies. Indicative content The subject will cover the theoretical foundations of multinational marketing, assessing multinational marketing opportunities, and developing multinational marketing strategies. The main parts are: cross-cultural marketing environment developing a cross-cultural marketing strategy implementing a cross-cultural marketing strategy contemporary issues in cross-cultural marketing Delivery Teaching methods employed include lectures, case analyses, strategy simulation games, seminars and teamwork. Notional Student Workload Lectures Seminars Directed Learning Independent Learning Formal Assessment
46

2. 3.

4.

22.5 hours 7.5 hours 40 hours 78 hours 2 hours

Total 5.

150 hours

Assessment Assignment 30% Closed book examination 70% The closed book examination will be of two hours duration

6. Indicative Reading List Core text: Ghauri, P, Cateora, P (2010) International Marketing, (2nd edn) McGraw-Hill, London Recommended Reading Czinkota, M, Ronkainen, I (2007) International Marketing, (8th edn) Thomson Learning Keegan, W.J. & Green, M.C. (2007) Global Marketing, (5th edn) Prentice Hall Jeannet, J.P. & Hennessey, H.D. (2005) Global Marketing Strategies, Mifflin, (7th edn) Houghton

47

7. Lecture Sequence for International Marketing Management

Lecture Topics Reading Refer to Sample Question(s) No

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Ch1, Pp1-26 Introduction The Cross Cultural Marketing Environment Seminar 1 Customer Analysis Cross Cultural Marketing Research and Segmentation Seminar 2 Cross-cultural Marketing Branding Product Strategy Cross-cultural Marketing Pricing and Channels Seminar 3 Cross Cultural Communications Promotion Marketing Services Across Cultures Seminar 4 Relationship Marketing Across Cultures International Marketing
E- Marketing Across Cultures

Ch4, Pp 7393 Ch4, Pp 7393

Questions 1,2

Question 4 Ch 5, Pp167- Question 3 215 Questions 5,6,7 Ch 7, Pp 149-169 Question 11 Ch 14, Pp331-345 Questions 8,9

Ch 18 Pp 435-456

Question 10 Question 17

Ch 17, 415427

Questions 12,13

Ch4 73-93 Question 20 Ch 8 177202 Ch10 Pp 243-259

Ch16 Pp387-410

Question 14,15

Question 16 Question 18

Multicultural Marketing Seminar 5: Final Revision

Ch 9 Pp 209- Question 19 236

48

8.

Sample Questions
Topics Sample Question

Lecture 1.

Introduction Q1. Define culture and explain why an understanding of culture is important in international marketing. Q2. Outline and discuss the principle elements of culture as they affect the behaviour of the international firm. Q3. The emerging market consumers behaviour is moulded by low incomes, infrastructural variability, and the unique trade-offs created by the substitution of labour for capital. According to Cateora (2006) these consumers are unlikely to respond to marketing programs transplanted from developed markets. How can western marketing companies develop an effective and appropriate emerging market strategy? Explain the specific nature of such a strategy using an example to illustrate the points made Q4. For the inexperienced marketer, the similar but different aspect of culture creates an illusion of similarity that usually does not exist, (Cateora and Ghauri 2006). Discuss this statement giving specific examples to illustrate the points made. Topic revision(1-3)
Q5. Identify the financial requirements most likely to concern a smaller company when marketing internationally Q6. Discuss the breadth and scope of international marketing research. What are the main additional complexities faced by the international marketing researcher?

2.

The Cross CulturalMarketing Environment

3.

Customer Analysis

4.

Seminar 1

5.

Cross Cultural Marketing Research and Segmentation

Critically evaluate the concept of the product life cycle as a strategic marketing tool in international markets. Use examples and a diagram or figure to illustrate the points made
Q7.

49

Lecture

Topics

Sample Questions Q8. The world market is really a series of market segments, each with different needs and wants. Successful international market segmentation requires a careful selection of country markets, regions and customers. Discuss. Q9. Before a firm can take a decision to enter a specific foreign market there must be an awareness of the opportunities in their market. Explain how the firm can become aware of such opportunities Q10 Explain why channel conflict occurs and the extent to which conflict is more likely to occur in an international context. Q11 Discuss the role of innovation in international channel management, explaining how a firm can maintain or gain market share by innovating in the channel of distribution

6.

Cross-cultural Marketing Branding and Product Strategy

7.

Cross-cultural Marketing Pricing and Channels

8.

Topic revision(5-7) Seminar 2 Q12What are the main factors and options management must consider when planning and organising a sales force capability for the firm in an overseas market Cross Cultural Communications and Promotion Q13Using any international marketing communications model you feel appropriate, take each of the steps in the communications process and demonstrate how marketing management might be influenced by international factors in managing each of these steps

9.

50

Lecture

Topics

Sample Questions
Q14. Perhaps advertising is the side of international marketing with the greatest similarities from country to country throughout the world. Paradoxically, despite its many similarities, it may also be credited with the greatest number of unique problems in international marketing (Ghauri and Cateora 2006). Discuss.

10.

Marketing Services Across Cultures

Q15. Outline and discuss the principle elements of culture as they affect the behaviour of the international firm.
Q16. Identify both local and foreign examples of cultural imperatives, adiaphora and exclusives. Explain why each of the examples you use fits into the category you have selected

11.

Relationship Marketing Across Cultures

12.

Seminar 3

Topic revision(9-12) Q17. Discuss the commonly held belief that there is no single market entry strategy that is appropriate in all circumstances. Q18. A rush of investment business worth more than half a billion Euros in 2008 is heralding increased interest by UK based marketing firms in the transitional economies of Eastern Europe particularly those of the former Soviet Union such as Estonia, Ukraine and Latvia. Discuss the problems international marketing researchers may face in gathering both secondary and primary data in such markets. Use examples to illustrate the points made

13.

International Marketing

14.

E- Marketing Across Cultures

15.

Multicultural Marketing

Q19. Discuss the use and importance of multinational marketing information systems (MMIS) to marketing management. Use a diagram or figure to illustrate the points made Q20. Discuss the main reasons for firms moving from serving purely domestic markets to

51

becoming international or even multinational marketing organisations. Use specific examples if possible to illustrate the points being made. 16. Seminar 4 Topic revision(13-15)

9.

Assignment
Assignment will be distributed in class by the Lecturer.

52

Module Title: Corporate Finance Module Lecturer: Makailla McConnel

1. Module Description This module focuses on the goals, scope and methodology of the finance function and its role in corporate management. It explores the theoretical framework of finance, enabling students to evaluate a firms investment, financing and dividend policies. Skills are developed in the identification and analysis of financial problems, including the use of computer-based models. The institutional environment of corporate finance is presented enabling students to better understand how major participants operate, and what constitutes the main advantages and disadvantages of alternative sources of finance. Learning outcomes: Upon completion of this course, you will have a clear understanding of: The standard techniques used by corporations to assess and value capital projects. The limitations of traditional investment analysis, and how newer analytical techniques, real options, for example, are being used to evaluate investment opportunities as distinct from the investments themselves. How free cash flows are allocated as between retentions and dividends and how to determine the firms optimum capital structure. Entry modes for international projects and their relationship to financing choices (corporate finance versus project finance). Political and country risks inherent in international investments and their mitigation.

2.

3. 4.

Indicative content
Financial Markets Investment Selection Criteria Equity and Debt and the Optimal Capital Structure Pricing Equity Risk Payout Policy: Dividends and Share Buybacks Debt and Leasing Corporate Finance and Off-balance Sheet Financing Delivery Teaching methods employed include lectures, case analyses, strategy simulation games, seminars and teamwork.

53

Notional Student Workload Lectures Seminars Directed Learning Independent Learning Formal Assessment Total 22.5 hours 7.5 hours 40 hours 78 hours 2 hours 150 hours

5.

Assessment The formal assessment of this module will be conducted through a closed book examination. Closed book examination 100% The closed book examination will be of three hours duration

6.

Reading List Core text: Brealey R.A. & Myers S.C. (2008) Principles of Corporate Finance, (9th ed.) McGraw-Hill Recommended Reading Ross S.A., Westerfield R.W. & Jaffe J (2007) Corporate Finance, International Edition (8th edn) McGraw-Hill Brigham E.F. & Gapenski L.C. (2003) Intermediate Financial Management, Dryden McLaney E (2009) Business Finance, (8th edn) McGraw-Hill Van Horne J (2002) Financial Management & Policy, Prentice-Hall Inc

54

7. Lecture 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Lecture Sequence for Corporate Finance Topics An Introduction to Corporate Finance: Indicative Refer to Sample Readings: Core Text question No. Ch 13 pp 328-350 1 and 2

Law, Agency Conflicts and Shareholder Ch 13 pp 328-350 Safeguards Capital Budgeting Basics: Theory and Ch 10 pp 239-255 Valuation Ch 11 pp 269-271 Where Do Value Creating Projects Come From? Seminar 1 Project Failure Limitation of Traditional Capital Budgeting Techniques Real Options and The Valuation of Investment Opportunities. Seminar 2 Equity: How Much Free Cash Flow should be Retained within the Firm? Returning Cash to Shareholders: Dividends vs. Share Buybacks Debt Group Seminar 3 Is there an Optimal Capital Structure? International Capital Budgeting. Mode of Entry and Financial Options Group Seminar 4 Issues in International Investing Group Seminar 5/Revision Ch 16 pp 414 Ch 19 pp 497-517 Ch 28 755-774 Ch 22 pp 588-608 Ch 15 pp 386-400 Ch 17 pp 442-461 Ch 18 pp 472-488 Ch 11 pp 283-294 Ch 23 pp 620-639 Ch 23 pp 620-639 Ch 23 pp 620-63

2 and 3 4 and 5 1-5 6 and 7 8 and 9

6-11 10 and 11 12 and 13 14 and 15 12-17 16 and 17 18 and 19 20 and 21

22 and 23 18 - 23

55

2. Sample Questions Lecture Topics Sample Questions

1.

2.

An Introduction to 1. Why are shareholders residual claimants? Corporate Finance: Law, Agency Conflicts and 2. What is it that shareholders actually own? Shareholder Safeguards 2. Why is the NPV the best investment selection metric? Capital Budgeting Basics: Theory and 3. If there is a conflict between strategic and Valuation financial objects how should the conflict be resolved. Where Do Value Creating Projects Come From? Seminar-1 6. What are the leading causes of project failure? 4. How do firms identify value creating projects? 5. Is it possible to compare using NPV projects of different scale?

3. 4.

5.

Project Failure 7. Are technical factors important reasons for failure? 8. Should you always rejects NPV < 0 investments? 9. How does asset volatility add to the option value?

6.

Limitation of Traditional Capital Budgeting Techniques: Real Options and the Valuation of Investment Opportunities. Equity: How Much Free Cash Flow should be Retained within the Firm? Seminar-2 Returning Cash to Shareholders: Dividends vs. Share Buybacks

10. Why is the variance of dividend changes with the variance of firms earnings? 11. How are dividends used to signal future earnings? 12. Do firms regard dividend payouts and buybacks as being equivalent ? 13. How did the tax reference Act 2002 affect corporate dividend policy in the US?

7.

8.

9.

56

10.

Debt

11.

Is there an Optimal Capital Structure? Seminar-3 International Capital Budgeting.

14. What is seniority? 15. How does seniority affect the cost of debt? 16. Does capital structure matter? 17. How does seniority affect the cost of debt? 18. How does the tax deductibility of interest affect optimal capital structure? 19. Why do firms favour project over corporate finance? 20. What is the significance of completion? 21. Why do joint ventures mostly fail?

12. 13.

14.

Mode of Entry and Financial Options Issues in International Investing Seminar-4

22. How does corruption affect entry mode? 23.How important does changes in exchange rate affect foreign direct investment

15. 16.

57

Module Title: Investment Management and Capital Markets

Module Lecturer: Dr. Vijay Shenai
1.

Module Description
The principle focus of this subject is on the study of the working of capital markets, analysis of the pricing and risk return characteristics of different securities, correlation effects, and improvement of the risk return characteristics of portfolios. The application of derivative securities to stabilise and hedge returns will be studied. The effects of international diversification will be analysed and various portfolio performance evaluation measures will be evaluated.

2.

Learning outcomes
Upon completion of this subject students should be: able to solve financial problems within the context of a dynamic market place; able to develop their financial research, and analytical skills; suitably equipped to communicate effectively about security analysis and portfolio management.

3. 4

Indicative content
Efficient Markets Portfolio theory and asset pricing models The yield curve and fixed income securities Hedging using derivative instruments - options and futures, International diversification, measures to evaluate portfolio performance evaluation. Delivery A variety of teaching approaches is used, including lectures, seminars, case analysis, teamwork and extensive use of the Internet for guided research. Notional Student Workload Lectures Seminars Directed Learning Independent Learning Formal Assessment Total 22.5 hours 7.5 hours 40 hours 78 hours 2 hours 150 hours

58

5.

Assessment The formal assessment of this module will be conducted through an assignment and a closed book examination.. Assignment 30% Closed book examination 70% The closed book examination will be of two hours duration Core text: Bodie,Z., Kane, A. and Marcus, A.J (2008), Investments, (7th edn) McGraw-Hill [ BKM].

6.

Recommended Reading: Jones, C.P. et al. (2007) Investments: Analysis and Management, (10th edn) John Wiley and Sons Reilly, F.K. et al. (2003) Investments, Thomson/South-Western Brown, K . (2008) Investment Analysis and Portfolio Management, (International edn) Thomson Elton, E. J. , Gruber, M.J. , Brown, S.J and Goetzmann, W. N. (2010) Modern Portfolio Theory and Investment Analysis: International Student Version, 8th Edition, John Wiley & Sons Sharpe P, W. (2008) Investors and Markets: Portfolio Choices, Asset prices and Investment Advice, Princeton University Press

59

7. Lecture Sequence for Investment Management and Capital Markets Lecture 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Topics Market Efficiency Portfolio theory Asset pricing Models. Group Seminar1 Class work problems The yield curve Bonds Bond management Group Seminar 2 Class work problems Futures Options Group Seminar 3 Portfolio management Performance evaluation Class work problems Group Seminar 4 / Revision Active Portfolio Management:
Portfolio Performance Evaluation

Indicative Readings: Core Text Ch 12: BKM Ch 6-11: BKM Ch 6-11:BKM

Refer to Sample question No. 1 2 2 7 1 and 2

Ch 14-16: BKM Ch 14-16: BKM Ch 14-16: BKM

3 8

Ch 22: BKM Ch 20-21:BKM

4 and 5 4 and 5 9 5 6 5 and 6 10

Ch 24-26: BKM Ch 24-26:BKM

Ch 24-26:BKM

18.

19. 20.

International Diversification The Process of Portfolio

Ch 24-26:BKM

Group Seminar 5 / Revision

60

8.

Sample Questions

Lecture 1 1. (a) Discuss the concept of the efficient market hypothesis (EMH). You should consider all its main forms.

(b)

To what extent does empirical evidence support each of the main forms of the EMH.

Lecture 2-3

2.

(a)

Compare and contrast the Capital Asset Pricing Model with the Arbitrage Pricing Model.

(b)

Discuss the advantages and disadvantages of each model.

Lecture 6 &7 Bonds and Portfolio Management 3. A fund manager plans to construct the most efficient portfolio from investing equally or wholly in a Large Stock Fund or a Small Stock Fund and the remaining in Treasury bills or alternatively just in the market wide index and Treasury bills. Data on the risk and performance of the funds, is as below: Return Large Stock Fund Small Stock Fund Market wide index 16% 20% 14% Risk 20% 30% 12% Beta 1.3 1.8

The correlation coefficient of the returns between the Large Stock Fund and the Small Stock Fund is 0.4. The return on Treasury bills is 6%.

61

Required: (a) Discuss the Treynor and Sharpe measures for evaluating portfolio performance and advise which measure you will use to calculate the most optimal investment possibilities.

(b)

From the investment plan outlined above, suggest which alternative constructed from the above two funds (Large Stock Fund and Small Stock Fund and the Treasury bill or the market index and the Treasury bills gives rise to the best return risk possibilities.

(c)

On completion of the calculations, the fund manager decides that his clients are prepared to accept a risk of 8%, what is the expected return from investing in the most optimal portfolio?

(d)

Outline all the assumptions made in arriving at your recommendations.

NOTE: All percentage returns/risk must be computed to two decimals e.g. 22.82%

The Yield Curve and Bond 4. Current spot rates are 5% per annum on bonds expiring in one year, 6% on non coupon paying bonds of two years maturity and 7% on non coupon bonds of three years maturity and longer. Three coupon paying bonds are available: (i) (ii) (iii) Required: (a) Determine the present value of the three bonds. a 6% bond of four years maturity; an 8% bond of three years maturity; and a 10% bond of two years maturity.

62

(b) (c)

If you anticipate that the shape of the yield curve will remain the same in one year which bond would you buy? Support your answer with relevant calculations Identify the technique you have used and discuss whether it is an active or a passive strategy.

Lecture 10 14 : Options, Futures and Portfolio Management 5. (a) Discuss clearly, with diagrams, the risk and return implications of buying or selling options or futures.

(b)

In January XYZ, an institution sold 20,000 June calls on a company's share at an exercise price of $110 for $15 per share and simultaneously bought 20,000 June puts on the same share for $20 per share at the same exercise price. The market expects that a dividend will be paid on the share in three months' time. At the time the interest rate per annum was 6% and the company's shares were selling for $105 per share.

Required: (i) Assuming the put and call are correctly priced, calculate the market's expectation of the dividend. Evaluate the expected outcome of this strategy at expiry and explain in what circumstances, the institution may consider such a strategy.

(ii)

(ii)

Explain whether it would be worthwhile to exercise the put if in May the share price fell to $80 per share.

6.

You are managing a 1.0 million portfolio of well diversified equities. You are worried about a fall in the value of the portfolio within the next 6 months. The FTSE 100 index is now at 4950 and the value per futures or options contract is the index multiplied by 10. The premium on Call and put options (10 per index point) expiring is 6 months are as follows:

63

Exercise Price 5000 5100 5200

Calls 400 375 350

Puts 400 525 600

Short term interest rates are 4.0% per annum, the dividend yield on the FTSE 100 is 2.0% per annum. Required: (a) What is meant by the term `hedging? Advise alternative strategies that could be followed to hedge the value of the portfolio.

(b)

What is the correct price for a 6 month futures contract on the FTSE 100 index of shares?

(c)

Assuming options are used to hedge the value of the portfolio show the outcomes when the FTSE 100 Index at expiry is (i) 4000 (ii) 6000. Select any one exercise

price giving reasons for your choice. Compare the outcomes with the unhedged position.

Seminar 1 :

Question 7
(a) From both theory and empirical research discuss the factors which influence the prices of options and comment on the performance of the Black Scholes model in predicting option values.

(b) Benlon Limiteds share price is quoted now at 150p. European puts and calls on the share expiring in one year are available at an exercise price of 200p. The risk free rate is 10% per annum. Benlon is in an industry where profits are volatile and one year later, the share price is expected to be either 160p or 250p. No dividend will be paid by Benlon during the year. The going rate of interest for lending/borrowing is 10% per annum.

64

As an active participant in the financial market with good contacts with brokers and banks consider if any arbitrage strategies can be formulated in each of the following three cases, and if so to explain clearly the outcomes in money terms: Put option premium Case 1 Case 2 Case 3 50.5 40.4 60.4 Call option premium 10.5 7.6 40.4

Seminar 2: Question 8 (a) Define the yield curve and explain its relevance in financial markets. (b) Compare and contrast the three main theories of the term structure of interest rates. (c) What explanation would you offer for a downward sloping yield curve?

Seminar 3 : Question 9: Portfolio A is invested in small company equities, Portfolio B is invested in the shares and bonds of large companies with a good rating. The average return on these portfolios and the FTSE All-share index over the last five years is given below:

Average annual Return Portfolio A Portfolio B FTSE All-Share 12.5% 15% 13%

Standard deviation of return 18% 20% 13% Beta 0.80 1.10

T-bills

5%

65

Required:

(a)

Calculate the Jensen, Treynor and Sharpe measures for evaluating the

performance of Portfolio A, Portfolio B, and a fund invested in the FTSE ALL-Share index..

(b)

Explain why conflicting results are obtained when using the three alternative measures stated in (a

(c)

On the basis of your analysis in (a) and (b) advise an investor, whose desired risk level is 15%, on how a sum of 100,000 should be invested amongst the above assets, and what return should be expected. Show all workings

(d)

Discuss all assumptions made in your calculations.

Seminar 4 Question 10 (a) Distinguish between an American option and a European option.

(b)

Discuss clearly the relationship that European put and call premiums must satisfy in the case of a non dividend paying share, when there are no opportunities for riskless profit.

(c)

Trenton Limiteds share price is quoted now at 300p. European puts and calls on

the share with an exercise price of 400p, expiring in one year, are quoted at 60p and 20p respectively. The risk free rate is 10% pa. No dividend will be paid by Trenton during the year. One year later, the share price is expected to be 340p 0r 440p. An investor is prepared to lend you 10,000 at the going rate of 10% per annum. Required:

66

(i)

Explain clearly the outcomes in each of the cases when Fentons share price is 340p or 440p.

(ii)

Can you devise any strategies for riskless profit?

9. Assignment

Assignment will be distributed in class by the Lecturer.

67