MIDS 454
Models of Management
Mondays and Thursdays, 6:00-10:15 p.m.
Summer 2001
Dr. Stanton Cort, Marketing
Office:
Enterprise 598
Office Phone: 368-2064
E-mail:
sgc3@po.cwru.edu
Office Hours: by appointment
Dr. Vasudevan Ramanujam, Policy/Strategy
Office:
Enterprise 510
Office Phone: 368-5100
E-mail:
vxr@po.cwru.edu
Office Hours: by appointment
Dr. Ronald Fountain, Finance
Office Phone: (216) 621-1985, Ext. 3005
E-mail:
rgf2908@po.cwru.edu
Office Hours: by appointment
Dr. Matthew Sobel, Operations
Office:
Enterprise 601
Office Phone: 368-6003
E-mail:
mjs13@po.cwru.edu
Office Hours: by appointment
Dr. Julia Grant, Accountancy
Office:
Sears 642
Office Phone: 368-3811
E-mail:
yxw36@po.cwru.edu
Office Hours: by appointment
Course Objective
This course explores methods for modeling and measuring business processes at the firm, business unit,
and work group levels. Emphasis is placed on the information required to evaluate performance at the
three levels, to diagnose opportunities for improving the design of the processes and for evaluating
financial investments in alternative process designs. Models for measuring and evaluating processes are
drawn from accounting, finance, and operations management to provide a multifaceted view of current
performance and opportunities for improvement.
Class Meetings
Because of the quantity of material and pace of coverage, it is essential that students are well prepared for
each class meeting. The success of team learning and in-class exercises require that all readings and
assignments be done carefully in advance.
Grading Policy
Grades will be weighted based on the number of sessions per topic (finance, marketing, operations, and
policy/strategy).
Texts and Required Materials
Groppelli, A.A., and Nikbakht, Ehsan.
Finance: A streamlined course for students and business people,
Hauppauge, NY: Barron’s Educational Series, Inc.
Weil, Roman L, and Davidson, Sydney
Accounting: The Language of Business,
Thomas Horton & Daughters.
Anthony, Robert, Hawkins, David, and Merchant, Kenneth.
Accounting: Text and Cases
McGraw-Hill Higher Education
Saturday, June 2
Orientation Session
Topics:
Models of Management: An Overview
The Cycle Model of the Firm
Readings:
?
Monday, June 4
6:00-8:00 p.m.
(Julia Grant)
Representations useful to different stakeholders for different purposes
Readings:
AHM Chapters 1 and 2
Assignments: C2-1; P1-4, P1-5
Financial Statements of Microsoft, IBM and Amazon.com
Look over the results of Microsoft, IBM and Amazon.com; compare to the peasants. Carefully consider
and analyze the three basic statements. Is there any other important information in the annual report?
Monday, June 4
8:15-10:15 p.m.
(Vasudevan Ramanujam)
Topic:
Controlling firm performance
Case:
Blind Ambition: How the Pursuit of Results Got Out of Hand at Bausch & Lomb
Readings:
The Performance Measurement Manifesto
Control in an Age of Empowerment
Thursday, June 7
6:00-8:00 p.m.
(Julia Grant)
Useful representations, continued - External Reports
Readings:
AHM, Chapters 2, 3, 11; handout
Assignments: C 2-3; C3-2; C11-2
Thursday, June 7
8:15-10:15 p.m.
(Vasudevan Ramanujam)
Topics:
How industry structure determines firm performance
Analyzing industry structure and profitability
Case:
Sunrise Medical Inc.’s Wheelchair Products
Readings:
The Structural Analysis of Industries
Generic Competitive Strategies
Competing for Advantage
Monday, June 11
6:00-8:00 p.m.
(Julia Grant)
Evaluation of financial position, continued
Readings:
AHM, chapters 5 and 6
Assignments: AHM C5-2, Dilly Dairy (handed out in class); AHM C6-3
For Grennell Farm, remember that the income statement starting point, Sales Revenue,
determines much of what follows. In particular, the Cost of Goods Sold is the inventory costs of the
products for which revenue has been recognized. The period costs are those incurred during the same
period for which the revenue has been recognized. You will need to ‘plug’ Retained Earnings to make the
balance sheet balance; then show your reconciliation of the beginning and ending Retained Earnings
balances.
What revenue recognition methods do Microsoft, IBM, and Amazon.com use?
What inventory accounting and revenue recognition methods do Microsoft, IBM and
Amazon.com use?
What was cost of goods manufactured (or purchased) for each company for the years covered?
Monday, June 11
8:15-10:15 p.m.
(Stan Cort)
How marketing helps generate value
Topic:
Brain surgery, rocket science and hearing little voices,
The marketing perspective
Marketing capabilities
Marketing functions
ABC analysis
Readings:
The Theory of the Business
The e- Capabilities of Market-Driven Organizations
The 4P Classification of the Marketing Mix Revisited
Thursday, June 14
6:00-8:00 p.m.
(Julia Grant)
Evaluation of financial position, continued
Readings:
AHM Chapter 7, review balance sheet ratios in Chapters 2, 5, and 8
Assignments: AHM C7-1, no journal entries needed—use the transaction analysis
format.
Examine the Microsoft, IBM, Amazon.com statements for information related to depreciation methods
and lives, and capitalized interest. Do you gain any insight from considering these disclosures? How does
the existence of these assets affect inventories and cost of goods sold?
Thursday, June 14
8:15-10:15 p.m.
(Stan Cort)
ABC, QFD, IT, PDQ, and all that
Topics:
What is a product service anyway?
Linking the voices of the customer and the company
Linking supply chain members
Readings:
The house of Quality
Introduction to Supply Chain Management
Channel Planning
Case:
Calyx & Corolla
Monday, June 18
6:00-8:00 p.m.
(Julia Grant)
Evaluating the financial position of the firm as a whole
Readings:
AHM, Chapters 8, 9
Assignments: AHM P8-3, P8-6 (but use effective interest method, not straight line);
C8-1 (only question 1); P 9-6.
Study all liability and equity information for Microsoft, IBM, and Amazon.com, identifying types of debt,
priorities of claims, etc
C8-1 (only question 1); P 9-6.
Study all liability and equity information for Microsoft, IBM, and Amazon.com, identifying types of debt,
priorities of claims, etc
Monday, June 18
8:15-10:15 p.m.
(Stan Cort)
Letting the customers buy the way they want to
Topics:
Supply chain (or access chain) decisions
Managing supply chain members
Readings:
From Value Chain to Value Constellation
Characteristics of Electronic Markets
Designing Mature Internet Business Strategies: The ICDT Model
The Power of Virtual Integration: An Interview with Dell Computers’ Michael Dell
Case:
Ford Motor Company Supply Chain Strategy
Thursday, June 21
6:00-8:00 p.m.
(joint session - Julia Grant and Stan Cort)
Identifying and gathering information for monitoring people and processes – Internal Reports
Readings:
AHM Chapters 15 and 16
Assignments: C 15-1; P15-4; P16-1; P16-2
How do the peasants want to be evaluated?
Thursday, June 21
8:15-10:15 p.m.
(Stan Cort)
Access chain management
Topics:
Cost/expense manage
Revenue/ business-scope enhancement
Cases:
Solectron
Ford Motor Company
Monday, June 25
6:00-8:00 p.m.
(Julia Grant)
Evaluation of product and process performance over time
Readings:
AHM Chapter 17; Chapter18 pp. 557-568; 572-579
Assignments: AHM P17-4; P 18-4
How would you suggest that Microsoft, IBM and Amazon.com allocate overhead?
Monday, June 25
8:15-10:15 p.m.
(Stan Cort)
Customer/consumer decision making
Topics:
The value of a customer
Structuring markets
Customer decision making
Readings:
Manage Marketing by the Customer Equity Test
Taxonomy of Buying Decision Approaches
Case:
Calyx and Corrolla (for review and discussion)
Thursday, June 28
6:00-8:00 p.m.
(Julia Grant)
Monitoring people and processes; in-depth use of internal information for evaluation
Readings:
AHM Chapter 26
Assignments: At the Café: AHM C26-3
Remember to put yourself into the role of the decision-maker.
Take home exam distributed
Thursday, June 28
8:15-10:15 p.m.
(Stan Cort)
Getting paid for the value you deliver
Topics:
Customer v. shareholder value
The value-based pricing dodge
e-Commerce in real life: A nightmare on e-street?
Readings:
Pricing Decisions
Taxonomy of Buying Decision Approaches
Case:
Biopure Corporation
Monday, July 2
6:00-10:15 p.m.
(Matthew Sobel)
Operations Process Analysis
Readings:
Process Fundamentals
Mcdonald Corporation
Burger King Corporation
Kristen’s Cookie Company (A)
Assignment: Carefully read the material above and prepare to discuss the following questions:
1.
What are the major operational differences between McDonald and Burger King,
and how do those differences relate to each company’s method of competing in
the marketplace?
2.
Key questions 1, 2, 3, and 4 in Kristen’s Cookie Company (A).
Distributed: Guidelines for the executive summary of National Cranberry Cooperative (A)
Thursday, July 5
6:00-8:00 p.m.
(Ron Fountain)
The role of finance and financial analysis in creating value.
Readings:
Finance- Introduction Chapters 1, 2, & 16
Thursday, July 5
8:15-10:15 p.m.
(Matthew Sobel)
Production System Analysis
Readings:
National Cranberry Cooperative (A)
Assignment: Executive summary of National Cranberry Cooperative (A)
Distributed: A Note on the Management of Inventories
Monday, July 9
6:00-8:00 p.m.
(Matthew Sobel)
Inventory Management Waiting Line Models
Readings:
A Note on the Management of Queues
Distributed: ACME Widgets; guidelines for the executive summary of NYPD Patrol System
Monday, July 9
8:15-10:15 p.m.
(Ronald Fountain)
The time value of money and its role in value creation
Readings:
Finance – Chapters 3, 4 & 10
Thursday, July 12
6:00-8:00 p.m.
(Ron Fountain)
The costs and other considerations of capital structure
Readings:
Finance – 9,11,13,14, & 15
Thursday, July 12
8:15-10:15 p.m.
(Matthew Sobel)
Service Capacity Management; Supply Chain Management
Readings:
NYPD Patrol System
Assignment: Executive summary for NYPD Patrol System; homework on ACME Widgets
Monday, July 16
6:00-8:00 pm
(Vasudevan Ramanujam)
Topics:
How industry structure determines firm performance
The resourse-based view (RBV) of strategy
Case:
Wal-Mart Stores, Inc.
Readings:
The Value Chain and Competitive Advantage
Competing on Resources: Strategy in the 1990’s
Strategic Intent
Competing for the Future
The Core Competence of the Corporation
Monday, July 16
8:15-10:15 p.m.
(Ronald Fountain)
Principles and problems of capital budgeting
Topic:
Making investments pay off
Reading:
Finance – Chapters 6, 7, & 8 & Capital Budgeting article
Thursday, July 19
6:00-8:00 p.m.
(Vasudevan Ramanujam)
Topics:
Using strategy to drive performance and performance measurement: Building a Balanced
Scorecard
Case:
Mobil USM&R (A1)
Readings:
The Balanced Scorecard: Measures Drive Performance
Putting the Balanced Scorecard to Work
Thursday, July 19
8:15-10:15 p.m.
(Ronald Fountain)
Mergers and acquisitions
Topic:
How and when to do it right, not wrong
Reading:
Finance - Chapter 19
Monday, July 23
6:00-8:00 p.m.
(Vasudevan Ramanujam)
Topics:
Organizational Context and its Influence on Strategy Implementation
The 7-S Model
Case:
Andersen Consulting (Europe): Entering the Business of Business
Readings:
The Congruency between Organizational Structure and Strategy
Structure is not Organization
Monday, July 23
8:15-10:15 p.m.
(Ronald Fountain)
A case will be assigned for analysis and discussion in class
Thursday, July 26
6:00-8:00 p.m.
(Vasudevan Ramanujam)
Strategy and Value Creation
Topics:
The Shareholder Value Model
The Value Chain
Case:
Guidant Corporation: Shaping Culture through Systems
Readings:
Selecting Strategies that Create Shareholder Value
Have We Been Measuring Success with the Wrong Ruler?
The Real Key to Creating Wealth
A Value System for Shareholders
All about EVA
In addition to these, review the readings from June 4.
Thursday, July 26
8:00-10:15 p.m.
Joint course wrap up
(All Faculty)
Integration