The 30 Day MBA: Learn the Essential Top Business School Concepts, Skills and Language Whilst Keeping Your Job and Your Cash

321 Pages·2009·3.79 MB·English

by  Colin Barrow

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The business world is full of conflicting theories and ideas on how organizations could or should
work, and how they could be made to work better. However, the subject of business can be
condensed down to 12 fundamental disciplines. These core disciplines make up the subject
DAY
matter of an MBA programme and form the content of this book. T
THE
H
The Thirty-Day MBAwill show you how to use key business concepts and tools to assess a
business situation, and make and implement successful decisions. Using The Thirty-Day MBA
E
you will:

3
(cid:129) find out what an MBA student studies at a top business school and why having that
knowledge is essential to your career progression;
0
(cid:129) gain a comprehensive understanding of the 12 core business disciplines and how to
MBA
use them;
D
(cid:129) be equipped to take part in strategic decisions, alongside MBA graduates;
(cid:129) be able to create your own Management Information Resource Centre giving you access to
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business information on markets and competitors, research data and case studies;
(cid:129) download hundreds of FREE business tools to help you carry out economic, financial, Y
marketing and quantitative analysis – and much more;

(cid:129) learn how to update your skills and knowledge, both for free and by taking short inexpensive M
courses at top business schools worldwide;
(cid:129) have a one-stop revision guide to help with your exams, if and when you do take an MBA or
B
other general management programme.
Learn the essential top business
A
Incorporating case examples and links to online self-assessment tests, as well as providing you
school concepts, skills and
with the information to choose the best business school for your needs, this comprehensive new
title places MBA skills within reach of all professionals and students, and is essential reading.
language whilst keeping your job
Colin Barrow MBA, FRSA,spent 15 years managing businesses across the globe, applying
and your cash
the principles and knowledge gained from his own MBA. He then returned to the business school
world to teach and research in some of the top schools in the United Kingdom, Europe, the United C
O
States and Asia. Until recently, he was Head of the Enterprise Group at the Cranfield School of
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Management. As well as being a non-executive director in a number of businesses, he is visiting I
N
professor at several international business schools. He has authored numerous business books COLIN BARROW

B
includingThe Business Plan Workbook andPractical Financial Management(both published by
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Kogan Page). R
R
O
W
£15.99
US $29.95
Kogan Page Kogan Page US ISBN 978-0-7494-5412-8
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
United Kingdom USA 9 780749 454128
www.koganpage.com Business and management
30-day_mba_tp:Comp Sec US TP 15/10/08 14:32 Page 1
30
THE DAY
MBA
Learn the essential top business
school concepts, skills and
language whilst keeping your job
and your cash
COLIN BARROW
London and Philadelphia
Publisher’s note
Every possible effort has been made to ensure that the information contained in this
book is accurate at the time of going to press, and the publishers and author cannot
accept responsibility for any errors or omissions, however caused. No responsibility
for loss or damage occasioned to any person acting, or refraining from action, as a
result of the material in this publication can be accepted by the editor, the publisher
or the author.
First published in Great Britain and the United States in 2009 by Kogan Page
Limited
Apart from any fair dealing for the purposes of research or private study, or
criticism or review, as permi�ed under the Copyright, Designs and Patents Act
1988, this publication may only be reproduced, stored or transmi�ed, in any form
or by any means, with the prior permission in writing of the publishers, or in the
case of reprographic reproduction in accordance with the terms and licences issued
by the CLA. Enquiries concerning reproduction outside these terms should be sent
to the publishers at the undermentioned addresses:

120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
United Kingdom USA
www.koganpage.com
© Colin Barrow, 2009
The right of Colin Barrow to be identified as the author of this work has been
asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
ISBN 978 0 7494 5412 8
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Barrow, Colin.
The thirty-day MBA : learn the essential top business school concepts, skills
and language whilst keeping your job and your cash / Colin Barrow.
p. cm.
Includes index.
ISBN 978-0-7494-5412-8
1. Industrial management. 2. Management—Study and teaching. 3. Master of
business administration degree. I. Title.
HD31.B36895 2008
650—dc22
2008039238
Typeset by JS Typese�ing Ltd, Porthcawl, Mid Glamorgan
Printed and bound in India by Replika Press Pvt Ltd
Contents
Introduction 1
1. Accounting 16
The rules of the game 17; Fundamental conventions 17;
Accounting conventions 21; The rule makers 22;
Bookkeeping – the way transactions are recorded 23; Cash
flow 24; The profit and loss account (income statement) 28;
The balance sheet 32; Filing accounts 37; Financial ratios 39;
Analysing accounts 40; Accounting ratios 41; Ge�ing
company accounts 49; Ratio analysis spreadsheets 51;
Break-even analysis 51
2. Finance 52
Sources of funds 53; How gearing works 53; Borrowed
money 55; Banks 55; Bonds, debentures and mortgages 57;
Asset-backed financiers 59; Equity 60; Sources of equity
capital 61; Hybrids 68; Cost of capital 69; Investment
decisions 72; Budgets and variances 77
3. Marketing 81
Ge�ing the measure of markets 82; Understanding
customers 86; Segmenting markets 90; The marketing
mix 94; Selling 108; Negotiating 110; Market research 111
4. Organizational behaviour 120
Strategy vs structure, people and systems 121; Structures –
the options 122; Building and running a team 129; The board
of directors 130; People 132; Motivation 140; Leadership 144;
Management 146; Delegation: the essential management
skill 151; Systems 153; Managing change 158
iv Contents
5. Business history 162
How business history is studied in business schools 163;
Babylon and beyond (4000 ��–1000 ��) 164; Mediaeval
merchants (1000–1700) 168; The era of ventures (1700–1900)
170
6. Business law 175
Corporate structures 176; Employment law 180;
Employment legislation 183; Intellectual property 185;
Principles of taxation 190
7. Economics 195
Schools of economic thought 196; Micro vs macroeconomics
196; Market structures 197; Essential economics 199; Business
cycles 201; Inflation 204; Interest rates 206; Economic policy
and tools 207; More concerns 209
8. Entrepreneurship 213
Why entrepreneurship ma�ers 213; Who make good
entrepreneurs? 214; Entrepreneurial categories 217;
Entrepreneurship in practice 220
9. Ethics and social responsibility 221
Teaching ethics and social responsibility in business
schools 223; Owners vs directors: the start of the ethical
tug of war 223; Understanding stakeholders 226; Mapping
out the stakeholders 226; Assessing obligations 227;
Stakeholder strategies 228; Implementing ethical and
responsible strategies 229; Does being ethical pay off? 231
10. Operations management 233
Outsourcing and the value chain 234; Production methods
and control 235; Inventory management 240; Quality 242;
Information technology 243
11. Quantitative and qualitative research and analysis 246
Quantitative research and analysis 247; Qualitative
research and analysis 255; Triangulation 258
12. Strategy 261
Devising strategy – the overview 263; The experience (or
learning) curve 264; Differentiation 266; Focus 266; Industry
analysis 268; Shaping strategy – tools and techniques 269;
Implementing strategy – business plans 274; What business
are you really in? 277
Contents v
Appendix: Personal development and lifetime learning 278
Learning for free from the world’s top business schools 279;
The world’s best management development programmes 284;
Free knowledge tools to stay ahead 287; MBA information
resource centre 294; Keeping track of the MBA world 299;
Ranking the schools 302; The standards for business school
applicants 305
Index 307
THIS PAGE INTENTIONALLY
LEFT BLANK
vi
Introduction
 What an MBA knows
 Why YOU need that knowledge too
 Where to get MBA knowledge
 How to use this book
I le� the family business, in my case the Army, a�er a few short years. I
hadn’t given much thought to a career before I ‘joined up’ and I followed
a similar approach when I le�. I found a job in sales and within a year or
so was in a very junior management position. The company I worked for
was in the vanguard of some new communications technology that was in
great demand. One of my clients, a major newspaper publisher, was keen
that we should adapt our product more closely to their needs. The changes
looked relatively minor, just some alterations to casing, a tweak or two in
programming, and the prospects of some big future orders and commission
cheques looked distinctly possible.
I made the case to my boss, the area sales manager, detailing the likely
level of demand my client would have for the product, the price we could
achieve and when they would need deliveries. He in turn promised to push
it hard with his boss, the sales and marketing director. A month went by
and my boss reported back that the directors had considered the proposal
and decided not to proceed. I thought either my boss had made a poor
presentation of my facts or the board had failed to grasp the nature of the
opportunity. Either way, I’d lost the chance of an order and big payout.
A few months later, during an evening around the bar at a company sales
conference with the chairman’s son, who was wisely to pursue a career as
a distinguished playwright, I discovered the truth of what happened to my
irresistible opportunity. Though profitable, in a modest way, the company I
worked for was strapped for cash. In fact the chairman had recently had to
sell his Rolls and buy a Bentley on hire purchase, using the balance to help
pay the wages for a month. The ‘modest’ tweaks I was proposing called
2 The Thirty-Day MBA
for new moulds from a supplier to which the company already owed a
small fortune. I was shortly to discover that the technology on which our
products were based was already about to be overtaken by an international
competitor with a global reach and that the economy was about to go into
one of the UK’s then all-too-frequent economic troughs.
It was at this point that I realized that, in common with millions of others
in business, I had li�le knowledge outside my own narrow discipline.
My cash-starved employer had no real incentive to train me, or any of
his employees, in any subject that didn’t have a reasonably immediate
payback. I had spent two years at Sandhurst being trained thoroughly. I
had a rudimentary grasp of what engineers, infantry and artillery could
do, as well as the abilities and role of the navy and air force in any task in
which I was likely to be involved. But now in business, outside of sales, in
which I had been given just two days of instruction, I was totally ignorant.
Accounts, production, supply, global competitors, substitute products and
the economic climate were all a closed book. I wasn’t even aware that the
client whom I thought was so large and powerful was about to be swept
away in a maelstrom of technological change. I le� the company, took an
MBA, and went on to line and staff positions around the world and then
to running businesses, small at first and eventually quite large. A spell in
consulting was followed by a return to the business school world, this time
to teach and research in some great schools in the UK, mainland Europe,
the United States and Asia.
Anyone who wants to play a more rounded role in shaping and im-
plementing the direction of the organization they work in, but are inhibited
by their lack of fundamental business knowledge, needs MBA knowledge.
Reading this book will equip them to take part in strategic decision making
on an equal footing with MBA graduates, while feeling at ease in the pro-
cess. It places MBA skills within reach of all professionals in large and small
organizations in both the public and private sectors, providing them with a
competitive edge over less knowledgeable colleagues.
WHAT IS MBA KNOWLEDGE?
Business schools have tended to complicate and intellectualize the subject
of business but it basically boils down to a dozen disciplinary areas, each
with a number of components. The disciplines contain the tools with
which you can analyse a business situation effectively, drawing on both
internal information relevant to the business and external information on
its markets, competitors and general business environment as a prelude to
deciding what to do.
The emphasis here in the contents of this book is on the terms ‘concepts’
and ‘tools’. The business world is full of conflicting theories and ideas on
Introduction 3
how organizations could or should work, or how they could be made to
work be�er. They come in and out of fashion, get embellished or replaced
over time. In business, for example, there is no such thing as a universal
optimal capital structure, or the right number of new products to bring to
market, or whether or not going for an acquisition is a winning strategy.
What’s best in terms of, say, a debt to equity ratio varies with the type of
organization and the prevailing conditions in the money market. That ratio
will be different for the same organization at different times and when it
is pursuing different strategies. Layering an inherently risky marketing
strategy, say diversifying, with a risky financing strategy, using borrowed
rather than shareholders’ money, creates a potentially more risky situation
than any one of those actions in isolation. But whichever choices a business
makes, the tools used to assess financial and marketing strengths and weak-
nesses are much the same. It is the concepts and tools to be used in those
disciplines that this book explains, and it shows you how to use both of
these individually and to assess a business situation comprehensively.
THE MBA DISCIPLINES
These are a dozen or so core disciplines that comprise the subject ma�er of
an MBA programme. Many business schools eschew some vital elements
within these disciplines as they are considered either too practical, un-
sexy from a research/career prospective or more skill or art oriented than
academic. A prime example is the field of selling, which fits naturally into
the marketing domain but, much to the surprise of MBA students, o�en
fails to appear on the syllabus. There are thousands of professors of market-
ing, distribution and logistics, market research, advertising, industrial
marketing, strategic communications and every subsection of marketing,
but there are no professors of selling. Yet most employers, and students
for that ma�er, feel that their MBA’s value would be enhanced by a sound
grounding in selling and sales management.
Some business schools miss out personal development, social respons-
ibility and ethics, entrepreneurship, business planning or even quantitative
methods. Almost all of them miss out business history – a core subject at
Harvard – and business law – essential at all top schools. You will find all of
these disciplinary areas covered in this book.
Accounting
This covers the basic assembly and interpretation of raw financial data,
from double-entry bookkeeping through to the construction of the key ac-
counting reports – profit and loss, cash flow and balance sheet. It continues
through to the accounting concepts and ground rules and the auditing