Managerial Finance [28/10 - 17/12]

The subject on Managerial Finance covers topics like bonds and shares valuation, capital budgeting, cash flow estimation, risk and return, capital market efficiency, portfolio management and asset pricing, cost of capital, capital structure and leverage. It can be classified into two main areas of Corporate Finance: Capital Budgeting (Investment Decisions) and Financing Decisions (Capital Structure). The textbook we used is Fundamentals of Corporate Finance by Berk, DeMarzo, Harford, Ford and Finch. Pre-requisites to this subject is Accounting For Managers which I have taken a year and a half before.

Unlike accounting, this subject has a good mix of theories and calculations. Comparatively, I find this course to be quite intensive due to 5 online tests we have to attempt from the start of our first intensive till our final exams. The 5 online tests constitute 40% of our module marks, while the remaining 60% will come in from our final exams.

Our course lecturer for Managerial Finance is Dr Chee Cheong (below). He is actually from Kuala Lumpur, Malaysia and has spent many years studying and lecturing in Australia. From time to time, he will share with us on his big family business in Malaysia.




The course is quite enjoyable with Dr Chee sharing with us on many real case studies. He shared with us on the corporate finance of Microsoft, Apple, Citibank and so on. One of the example he cited was Foster in Australia. Foster is a famous beer company in Australia and they plan to expand into the Wine industry. Whether this was a wise decision will be judged by the market as subsequently, their share price declined. It may be difficult to manage both beer and wine products as the company do not have the expertise in this area. Next we have BHP in opening a mine with 30 years timeline. Billions are invested in this operation and the mine will eventually have to be returned back to its original state.

Centro Properties are mentioned where it used to be a leading property company in Australia. But it expanded rapidly and got into bad debts with the sub-prime crisis. Eventually its share plunged and never recovered. There are many good companies that have little or no debts and they are doing fine. This brings to us a question, so is leverage necessary?

In topic 1, we learnt about agency related issues. Ethical and motivational issues are tackled in this topic. It depicts the relationship between the principal and agent. Principal and agent relationship is similar to that of shareholder and managers, debt-issuers and investors, financial agent and clients. There maybe a conflict of interest between both parties and how do we actually reconcile between them.

In topic 2, we learnt how to calculate the Net Present Value (NPV) and IRR (Internal Rate of Return). Time value of money is always considered for our present value calculation. Most financial managers (more than 90%) actually use the NPV for their company's capital budgeting. This course left a deep impression on NPV in me so much so when I was explaining to my company's customers on the importance of cost management, business planning and budgeting, that I used corporate finance and NPV related concepts as reference.

For topic 3, it essentially is about ROI. Traditionally, companies use the simple Payback rule on their investment. That is, how long does it take for this investment to recover itself. There are actually other methods besides the payback, and it includes the NPV, IRR, discounted payback and so on.

Thereafter we moved on to analysing the cash flow for a company, conducting sensitivity analysis and scenario analysis to evaluate the impact of certain parameters on the profitability of a company.

The next few topics cover on shares investment. On how we can achieve the maximum expected return for a given level of risk. Diversification is also useful in reducing risk but there are methods on how to diversify, i.e. the shares should have minimal correlation between one another. While studying these few topics, I frequently think of my investments in shares, bonds, forex, etc. Sometime back, I realized some of my investments move in opposite direction to one another. Thus there is rarely a stage where my investments will all plunge.

The topic on dividends is also mentioned. For my side, I prefer to invest in high dividend paying stocks. But I realized from Modigliani and Miller theory as explained by Dr Chee, it does not matter whether dividends are paid or retention-generated capital gains. Thus for some shares, I noticed the capital yield far exceeds the dividends that may be paid for several years.

Personally, my approach towards shares purchase is the time of entry is important. The best time to purchase shares is when the whole world is gloomy and out. Other than high dividend stocks, there should also be a definitely date where shares should be cashed out for capital gains, especially the time when the whole world looks positive and bright (pre-election).




Like I have mentioned, this subject is actually one of the more intensive subjects I have taken so far. The online tests require a lot of time. Basically I spent all my weekends (5 weekends + 2 intensive weekends) studying for Managerial Finance. With weekdays spent on work and weekends spent at home studying, there is no much balance in life. We accessed the online test below from MyFinanceLab which comes together with the textbook.

For the exams, many of my classmates took 2-3 days leaves to study for it. For my side, I only could afford a Wednesday leave as the following Thursday/Friday is occupied with work.




After our exams on the 17th December (Saturday), all of us (Alisha, Adeline, William, Chiew, me) went down for a lunch celebration at Red Star Dim Sum.

Managing Organisations [02/09 - 29/10]

This Managing Contemporary Organisations (MCO) course is being facilitated by 2 lecturers. On the first intensive we have Professor Julia Connell and the second is led by Dr Natalie Ferres.

The first intensive which is taught by Professor Julia covers Motivation, Performance Management, Workplace Values and Ethics and Organizational Culture.

At the start of MCO, Professor Julia shared with us a problem solving method by Einstein. He was posed a question that if he has only 1 hour to save the world, what would he do? He replied he will spend 55mins in problem analysis and 5mins solving it.

We looked into managing contemporary organisations and a video of Google "Best place to work for" was shared with us:



We moved on in the topic and there are 5 trends in managing contemporary organisations. When the topic of employment relationship is touched on, the discussion on networking came in. And Ron remarked that in business term, it is also known as golf.

The McKinsey 75 was also given to us as references which we can use for interviewing managers.

When it comes to motivational theories, we cover content theories (e.g. Maslow, Herzberg, etc) and Process theories (e.g. Adam's equity, etc). There was some discussion in hiring consultants and paying exorbitant money to them. To large enterprises, consultants are seen as impartial (and the not so often used reason is that they can be blamed if things go wrong).

The phenomenon of cognitive dissonance was shared with us. In which there maybe conflicts between what is expected of them and what they want to do. Ethical issues maybe involved and the concept of reverse marketing was briefly shared. (e.g. Macdonalds organising a running competition and Tobacco companies discouraging smoking)

Culture plays an important role in a company. HP used to have a good corporate culture in the past. When it comes to culture, Japanese culture are usually representative of the Asian culture. But nowadays there are many other Asian countries with strong enterprises, such as India, China, Korea, Taiwan, xetc.




The second intensive is led by Dr Natalie which include the topics of Organizational Change, Power and Politics, Organisational Structure, Decision Making and Innovation/Creativity.

We start on change management and the impact on an organization. It is important to explain on 'why' and not the 'what' when changes are made. Normally changes are explained when the overall morale of the company is positive, so as to minimize the negativity.

The difference sources of power: expert power, referent power, legitimate power, reward power, coercive power are explained to us. Thereafter it comes to decision-making and the fallacies to avoid when making decisions.

There are organizations who change their structure regularly. Change is important and the changes that come normally involve centralizing / decentralizing their business functions after every few years. A few films were shared with us on different organizational structure (Macdonalds vs Google).

And below we have Dr Natalie sharing on the whole brain model.




And there is a time when James came up to the front of the class and explained some concepts to us.




There is a group workplace project which we have to study in this subject. It involves interviewing a manager in a company and obtaining information on how he/she motivates employees. Liu Yang allows us to interview his previous company director.

As shown in the picture below, we have from left - Liu Yang, Michael and Hector. This is our first discussion held at the new student lounge.




We played some get to understand ourselves game below.



One unique feature of the exams is that we were given the case study a few days before to read through. The case study is about Disneyland and difficulties they face when they expanded to Paris (Euro Disneyland). Several topics are in discussion in this case study and primarily is about cultural differences.

Operations Management [01/07 - 14/08]

The weekend past, I just attended the first intensive for Operations Management. It is taught by Max Zornada and the lessons are amazing! But the part which left the most impression is how the lessons are conducted. There are the many real life examples and personal sharing by the lecturer.



The lecturer shared many case studies and they are:

1) Canon - On how they become the top printer and camera developers and manufacturers. They actually set a 10 year plan to make it happen and how they develop the technical know-how from where they were previously.

2) RAM Chips - In the 80s, the RAM chip makers were leaders in the US. But they follow the wrong operational process. As a result, when the Japanese joined the market, the US chip makers were wiped out.

3) Story of Dell - On how Dell become successful in the PC Desktop market. They basically took over the PC Desktop market when it is already saturated by established players. Their advantage is on operations management. On how they do things more efficiently and differently.

4) Qantas Airline - It is quite a paradox really. During the early-2000, they were a leader in the airline industry. The cost cutting measures implemented by them actually had a severely adverse effect on their profitability. The service standards dip as a result of the cost cutting measures. This pave the way for Emirates to dominate the Australian market.

5) Jacobs Creek story - On how it change the wine industry and standards from the 80s. It started by changing customer perceptions as Jacobs Creek make wine highly accessible and consumed on a daily basis like the European wines.

And many more...

We have to do a case study preparation before coming for the first intensive. And the first case study is on Benihana of Tokyo. We had a group discussion on this case by the end of the intensive. It's quite impressive on how Benihana ventured into the US market and managed to capture a sizable market. Even though many other restaurants introduced Teppanyaki, but what Benihana has are the professional chefs. Basically it's the fun factor that they have.



During class, we have some hands-on to evaluate the performance of manufacturing paper aeroplanes. There were 5 of us in the group and we began recording the time through the steps. Here we have below making the planes.



The second intensive is mainly on lean manufacturing and the toyota production system. Organisations have been changing over the last century. At the beginning of the 20th century it was on empowering the individual, follow by organisational structures and now at the start of the 21st century, concepts of lean organisations are affecting how businesses work. Organisations that fail to transform themselves will cease to exist 10 years from now.

We played an interesting game call the Beer Game in class. It is actually to demonstrate the BullWhip Effect on Supply Chain Management. Below we have the lecturer explaining to us on the rules of the game.



Here we are planning on the Inbound, Current Stock and Outbound inventory; carefully pondering over the inventory to order and supply.



And our lecturer Max concluding and sharing the results with the whole class. It's amazing to see the BullWhip Effect being demonstrated out directly from our planning and discussion.



30% of subject grading goes into group assignment and there are 6 members in our group. For our group, we have chosen to study a polyclinic process.

Individual assignment-wise, we find assignment 1 to be alright. But assignment 2 is really the toughest.

Here we are taking a group photo outside the polyclinic. Once we are in, it is about playing 'hide and seek' with the staffs. Toa Payoh is one of the newer polyclinics as it has just been recently renovated. We are quite surprised to see a few 'Kaizen' rooms in there.



After the polyclinic studies, we are back to the 4-12 room for our group discussion. Here we have Kenny and Adelene taking photo of the white board.



After our final group discussion on the 13th August, we arranged for a visit to the Teppanyaki restaurant at Hill Top Japanese Restaurant (Jurong Bird Park). The appointment was made at 7pm. We had been discussing about visiting the restaurant since the first intensive as one of the case study we had worked on is on Teppanyaki. I'm quite surprise there is a waiting area in the restaurant (quite similar to Benihana).



And we were led to the Teppanyaki room where the chef welcomed us.



The Teppanyaki experience is not exactly that of Benihana but the food is fabulous. One of the best Teppanyaki I had so far.

Coincidentally, Alisha's birthday is today and we have prepared a cake + candles + birthday songs. Here we have Adelene cutting the cake into 6 pieces.



Our group photo:
William, Kenny, me, Hong Hui, Alisha and Adelene.



Next, William suggested we can visit the NUS Society Guild House. He is a member there. We move on there and here we are.



Everyone celebrating the end of the Operations Management subject. It has been a very intensive 1.5 months. The many evenings and weekends we have spent together, having fun, coming up with jokes, planning on activities and of course, working on the tough assignments together brings back many memories.

Economics For Managers [25/03 - 30/04]

The Economics for Managers module is one of the final entry-level core subject I will be taking for my MBA course. This is also the last module I will be taking this quarter and I will be having a 2 months break after the final exams. An evaluation so far - I have completed 5 subjects to date since joining the MBA program a year ago.

I have taken an economics module during my first year in NUS. Some of my classmates have taken economics for their 'A' levels, giving them a good foundation. I have pretty much forgotten all that I have learnt during the 3 months in NUS.

The lecturer for the course is Mr David Murphy. He's a truly amazing lecturer. I find him to be very humorous. During the 2 intensives with Mr David Murphy, everyone of us really have great fun together.



Course Evaluation

There are 4 evaluation components to this subject. There are the 2 assessments during the 2 intensives (10% each), follow by a group project submission (30%) and finally the final exams (50%). For the group project, we got overseas organised early before the start of the first intensive. Our group leader is Lionel, who is a very capable and well-organised leader.

Content

As with all basic economics course, it started off with the micro-economics aspects and thereafter move on to macro-economics. The recent Global Financial Crisis has been explained to us from an economics standpoint and we were taught to evaluate the decisions made by the different governments with regards to the crisis. The Singapore context is frequently used which is different from most western developed countries on how fiscal and monetary policies were used.

On the micro-economics end, we studied the demand, supply, elasticity, impact of tax and policies, monopoly and so on related cases. In the macro-economics, the important areas are the GDP, aggregate demand, supply, fiscal, monetary policies and so on. Lionel told me a few times that he find economics to be a very applicable subject.

As with typical MBA programme, there are regular class participation and discussion by the students. After every topic, there will be a tutorial to apply the concepts learnt.

Transition

While taking this subject, I was undergoing a transition in my career. I left my previous company on the 20th April (Wednesday) directly after the 2nd intensive and joined my next company before my exams on the 26th April (Tuesday). As such, I only have the weekday evenings to study for my exams. Previously, I will usually take a day leave to have a concentrated study.

Applied Project Management 1 [21/01 - 20/03]

I will be taking a cross-elective this term and it is the Applied Project Management 1 (APM1) module. As my work concerns mainly Project Management related activities and I plan to take the PMP certification, so APM1 is actually a course that will be very applicable on my side.

The first intensive is on the 23rd/24th January weekend and it is being conducted by Dr Andrew Finegan as Dr Vernon Ireland was feeling unwell. Dr Andrew added a few complementary information on top of our notes. Here he is below conducting a class for us.



I have to admit the Project Management module is quite a boring subject to take. When I studied the PMBOK (Project Management Book Of Knowledge), it is indeed one of the most challenging text to read through. As what the lecturer has mentioned, it is a reference text, and not a textbook or normal book.

The interesting aspect of the course is the discussion Workshop Exercise we have in groups. The students in our class looking on at the different group contributions below.



And we have Andrew reviewing and marking our writings.



Towards the end of the first intensive, the entire walls are pasted with our group discussion writings.



By the second intensive, it is Dr Andrew's turn to fall ill and Dr Vernon Ireland is here with us. According to a friend, Dr Vernon is the father of Adelaide's MPM programme. He started the programme many years ago and have been with it ever since. Dr Vernon is a lively lecturer and he gave many fascinating anecdotes on project management.



The approach to the Workshop Exercise is also slightly different and the groups are advised to present their discussion to the class instead of pasting onto the walls. This time round it is really more fun as more students are directly involved.



APM1 is actually one of the more intensive module in the MPM course. There are 3 x 10% assignment, an individual presentation (10%), a group assignment (30%) and a large individual assignment (30%).

I had made a few very good friends in the course and they are Ken, Huo Long and Kok Mun. At every breaks, we all sit together and have many things to chat about.

During the second intensive, the class decide to have a Luo Hei during the Sunday lunch and everyone just joined in together.



The knowledge obtained from the APM1 course is very useful. Project Management is largely about application and through the assignments, we are able to apply the knowledge effectively. Besides PMBOK, we also learnt about PRINCE2 model which I find it to be quite useful for newcomers to project management. It will require some experience to actually use PMBOK, but PRINCE2 is comparatively more structured.

This course actually combines the synergy of both PMBOK and PRINCE2, requiring us to understand the strengths and weaknesses of both models. Thereafter during the assignment, we were taught to harness and apply the models into Project Management activities.

My group partner is Ken and I had three discussions with him and via email/skype on the work forward. Our project plan is to roll out a new Credit Card product for a bank. I have absolutely no domain knowledge on it but Ken is very experienced, thus it is quite an enjoyable learning experience.

From this module, I have learnt a lot on the Project Management knowledge areas. Previously when I tried to self-study, I have difficulty linking and understanding how it falls into place; less so in applying it. After the course, I have a clearer understanding of it and will be able to use for my Project Management activities.