Module BUSI4G215: Decision Making and Business Option Modelling

Department: Management and Marketing

BUSI4G215: Decision Making and Business Option Modelling

Prerequisites

• None

Corequisites

• None

Excluded Combination of Modules

• None

Aims

• To promote a critical awareness and understanding of flexible strategic decision making under uncertainty by introducing a wide range of relevant concepts and theories, from finance, management, strategy, innovation/entrepreneurship and real options valuation, and specialised tools for business modelling, with an emphasis on the application of decision making techniques.

Content

• Real options and decision making under uncertainty
• Valuing projects and companies usuing standard Net Present Value (NPV)
• Valuing common real options and valutation principles
• Valuing complex projects with embedded options using binomial trees in Excel
• Problem structuring and business option modelling using specialised software
• Using analytic models to value options to acquire (call) and switch resources
• Resource redeployment and MNC's option network of multinational operations
• Valuing options using simulation and binomial trees with two correlated assets
• Valuing growth companies and intangible assets as options (e.g., patents, brand)
• Competition and strategy integrating options and game theory.

Learning Outcomes

• By the end of the module students will be able to:
• Have a critical appreciation and understanding of the complexities, challenges and uncertainties of decision making, business modelling, and how to structure complex business decision problems under uncertainty
• Have an advanced yet practical understanding of the scope and application of modern specialised techniques for project and growth company valuation.

• Be able to understand the complexities and uncertainties of decision-making
• Understand key principles, valuation methods, and tools underpinning optional decision making under uncertainty and competition
• Evaluate complex investment projects and company situations and appreciate the scope and means of taking decisions under uncertainty
• Apply problem-solving and analytical skills to finance, management, strategy, and innovation issues in an uncertain business context
• Apply business option modelling concepts and tools, including Excel binomial trees, simulation, and specialised valuation software
• Contribute to the dynamics and management of project teams in the analysis of real project and company cases.

• Written and oral communication; planning, organising and time management; analysis of complex problems; problem solving and analysis.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Learning outcomes will be met through a combination of lectures, seminars , case studies and practical work, supported by guided reading. The summative assessment will comprise a final exam and a group project-based analysis and presentation designed to test students' knowledge of key concepts and tools and their ability to apply those in a business context.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

Case study project analysis report and group presentation based on the case analysis. Students work in groups of 4-5 on a case study for several weeks, deliver a report of their analysis and then present their results orally as a group to the class followed by class discussion - Exercise questions prepared in advance or in-class problem-solving (quantitative) exercises during the workshops and specialised software applications developing skills needed to undertake the summative exam.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University