In April I wrote about what we had covered during the first half of semester 1, so to wrap it up I will provide a summary of the second half of the semester. The original post is here if you’ve not already seen it.
Accounting and Financial Management
The first half of the semester concentrated on Financial Accounting, then lesson six introduced us to Management Accounting. This started with a discussion around cost modelling (fixed vs. variable costs), breakeven analysis and sensitivity analysis, and then in lesson seven moved onto capital investment appraisal methods, including payback period, net present value and internal rate of return. This was a particularly interesting lesson, as it highlighted some of the complexities associated with investing in projects, and the importance of time and the cost of capital when making investment decisions.
Lesson eight built on the accounting ratios that were introduced in lesson five, and explored some of the issues that can be encountered whilst analysing those ratios. It also looked at how return on equity can be broken down into its constituent parts to determine the reasons for a change in an organisation’s profitability – a really valuable technique that I expect to use in the future.
We then looked at the shareholder view in accounting, which included some more ratio analysis, and also a useful introduction to stock markets and driving shareholder value.
The final lesson discussed three ‘hot topics’ in accounting: the role of auditors and the audit process (including the Enron accounting scandal), the role of environmental and societal impact in accounting, and the rise of international standards.
The second half of this module started with a final look at the Group context by considering the role of leaders and leadership, to understand how different types of leaders can affect the direction and success of an organisation. There was a very interesting task at the end of this lesson where we had to assess the leadership capabilities of some people we know; using the leadership theories from the lesson gave a much different perspective to some of the leaders I interact with.
We then moved to look at the Organisational context, starting with traditional organisation design. This included a discussion around the benefits and problems of a bureaucracy, and an interesting look at differentiation and integration of departments – this was very useful in explaining some of the reasons for the silos that are often found in large organisations.
The next topic looked at was organisational strategy and structure, providing a comparison of different types of self-contained and boundaryless organisation structures, and newer concepts such as collaborative organisations, joint ventures and strategic alliances. We also considered how the external environment impacts an organisation, including trends of globalisation and ethical behaviour. Lesson nine then looked at the role of politics and power within an organisation, which also provided a different perspective on behaviours that I have experienced during my career.
The final topic for this module was Organisational Change, which is an area of particular interest for me. Various different types of change were discussed, including how to improve the chances of a change being successful, and some of the side-effects that can occur as a result of change. We were also introduced to the unfreeze – change – freeze approach to implementing change, which I felt was a useful way of isolating and dealing with some of the issues that often occur during organisational change.
Economics of the Business Environment
The first half of the Economics module introduced us to some macro-economic concepts, so lessons six to ten then introduced the micro-economics concepts. This started with a view of how companies are exposed to product and input markets, and concepts such as elasticity of demand. We then discussed in more detail how businesses are exposed to the marketplace, the opportunities to make ‘supernormal profits’, and the ‘strategic hell’ of perfect competition.
The concept of the long run was introduced in lesson eight, which considers how an organisation can be successful when all costs can be changed, including typical fixed costs such as property and equipment. There was also an interesting discussion in this lesson about the differences between investment in physical capital and investment in human capital, with the latter including a look at the benefits of both general training (eg. an MBA) and employer-specific training.
The last two lessons looked at protection, by analysing the behaviour of monopolies and oligopolies. The latter included an introduction to game theory; have a look at the short video below to see this in action (and think, what would you have done?).
Combined with the previous post about the first half of the semester, this post will hopefully provide future students a good view of what they might encounter in their first semester – although the content is updated every semester, so it could be quite different to what I have covered here.