The Ten-Day MBA 4th Ed. Read online

  the

  TEN-DAY

  MBA

  4TH EDITION

  A Step-by-Step Guide to

  Mastering the Skills Taught in

  America’s Top Business Schools

  Steven Silbiger

  Contents

  Cover

  Title Page

  Acknowledgments

  Introduction

  DAY 1 - Marketing

  DAY 2 - Ethics

  DAY 3 - Accounting

  DAY 4 - Organizational Behavior

  DAY 5 - Quantitative Analysis

  DAY 6 - Finance

  DAY 7 - Operations

  DAY 8 - Economics

  DAY 9 - Strategy

  DAY 10 - MBA Minicourses

  Appendix: Quantitative Analysis Tables

  MBA Abbreviation Lexicon

  Permissions

  Index

  About the Author

  Copyright

  About the Publisher

  Acknowledgments

  I gratefully thank Rose Marie Morse and Sarah Zimmerman of William Morrow for all their diligent efforts to transform my MBA drafts into the original book. Thanks to Toni Sciarra at Quill, who championed the second edition; Herb Schaffner at HarperCollins, who led the third; and Colleen Lawrie, who helped on this one.

  I also thank Rafe Sagalyn at the Sagalyn Agency for his extraordinary ability to see my book’s potential and to place it with publishers around the world. The best always make it look easy.

  Questions, comments? E-mail the author at [email protected] or visit our Web site at www.tendaymba.com.

  Introduction

  After I earned my MBA, I had a chance to reflect on the two most exhausting and fulfilling years of my life. As I reviewed my course notes, I realized that the basics of an MBA education were quite simple and could easily be understood by a wider audience. Thousands of Ten-Day MBA readers have proven it! Readers are applying their MBA knowledge every day to their own business situations. Not only useful in the United States, The Ten-Day MBA has been translated into many languages around the world. So many people are curious about business education, including doctors, lawyers, businesspeople, and aspiring MBAs. This book answers their questions. The Ten-Day MBA really delivers useful information quickly and easily. Current MBA students have written me that they even use the book to review for exams. Ten-Day MBAs are “walking the walk and talking the talk” of MBAs every business day. Executive mini-MBA programs are designed around the book. It’s proven that this book can work for you. Written for the impatient student, The Ten-Day MBA allows readers to really grasp the fundamentals of an MBA without losing two years’ wages and incurring a $175,000 debt for tuition and expenses.

  Prospective MBAs can use this book to see if a two-year investment is worth their while; those about to enter business school can get a big head start on the competition; and those of you who cannot find the time or the money can get at least $20,000 of MBA education at 99 percent off the list price. Unfortunately, this book cannot provide you with the friendships and lifelong business contacts that you can develop at an elite school. However, it can impart many of the skills that make MBAs successful.

  The Ten-Day MBA summarizes the essentials of a Top Ten MBA education. The mystique and the livelihood of the Top Ten business schools are predicated on making their curriculum appear as unique and complex as possible. Companies pay thousands of dollars to send their executives to drink from these hallowed fountains of knowledge for a few days. I spent two years of my life not only drinking from the fountain but also bathing and washing my clothes in it.

  Which schools are included in the Top Ten is a subject of considerable debate, as displayed by the recent rankings shown at the end of this introduction. The Top Ten actually refers to a group of fifteen nationally recognized schools that play musical chairs for Top Ten ranking. They distinguish themselves by long application forms, active alumni networks, long lists of recruiters, and the ability of their graduates to demand and receive outrageous starting salaries. The Top Ten schools require of candidates at least two years’ work experience before admission. Experienced students can enrich class discussions and study groups. A great deal of my learning came from my classmates’ work experiences.

  The Top Ten schools do not necessarily offer the best teaching, facilities, or curriculum. Reputation plays a great part in their status. A variety of rating books are available that give the “inside” story on those reputations. So many magazines and newspapers are now publishing rankings because they are among their best-selling issues. According to the 2010 Bloomberg Businessweek poll, “racking up the highest satisfaction scores from graduates are, in descending order, Virginia, Chicago, MIT, Berkeley, and Harvard.” The recruiters’ rankings, on the other hand, are Chicago, Pennsylvania, Harvard, Northwestern, and Michigan.

  My aim is to cut to the heart of the top MBA programs’ subject matter clearly and concisely—the way only an MBA can, and the way academics would not dare. To cover the major concepts, I use examples and outlines and summarize wherever possible. I slice through the long-winded and self-serving academic readings that at times I had to trudge through. This book contains only the pearls of wisdom buried in my thirty-two binders of cases, course materials, and notes, and updated by current MBAs.

  I have no vested interest in promoting any of the business theories presented in the book. Therefore, this book does not repeat the same idea over the course of two hundred pages as many popular business books tend to do. I crystallize the most important concepts in brief passages so you can learn and remember them without losing interest.

  From my interviews with graduates from Wharton, Harvard, Northwestern, and other top schools, I learned that all of their programs serve up the same MBA meal. Only the spices and presentations of the business banquets vary.

  The basics of MBA knowledge fall into nine disciplines. Some schools have carefully crafted their own exalted names for each subject, but their unglorified names are:

  Marketing

  Ethics

  Accounting

  Organizational Behavior

  Quantitative Analysis

  Finance

  Operations

  Economics

  Strategy

  The synthesis of knowledge from all of these disciplines is what makes the MBA valuable. In the case of a new product manager with an MBA, she can not only see her business challenges from a marketing perspective, but she can recognize and deal with the financial and manufacturing demands created by her new product. This coordinated, multidisciplinary approach is usually missing in undergraduate business curricula. By learning about all the MBA disciplines at once, in one book, you have the opportunity to synthesize MBA knowledge the way you would at the best schools.

  When MBAs congregate, we tend to engage in “MBA babble.” Our use of mystical abbreviations like NPV, SPC, and CRM is only a ruse to justify our lofty salaries and quick promotions. Please do not be intimidated. MBA jargon is easy to learn! As you read this book, you too will begin to think and talk like an MBA.

  My goal is to make you familiar with the significant MBA tools and theories currently being taught at the leading business schools and to help you understand and develop the MBA mind-set. When you finish the ten days, please feel free to fill in your name on the diploma at the end of the book. It serves as evidence of your scholarship, and you should proudly display it for all your friends to see.

  CURRENT MBA SCHOOL RANKINGS

  Below are the most current rankings of MBA programs. Although the rankings change from year to year, the same schools are consistently listed. School names listed in parentheses immortalize founders and major benefactors. Internatio
nal schools have become a force to be reckoned with in the 2000s.

  TWO-YEAR MBA DEGREE PROGRAMS

  U.S. News & World Report, Top Business Schools, 2011

  Based on academics, recruiters, admissions standards, and employment success

  1. Stanford

  2. Harvard

  3. MIT (Sloan)

  3. Pennsylvania (Wharton)

  5. Northwestern (Kellogg)

  5. Chicago (Booth)

  7. Dartmouth (Tuck)

  7. Berkeley (Haas)

  9. Columbia

  10. NYU (Stern)

  10. Yale

  12. Duke (Fuqua)

  13. Virginia (Darden)

  14. UCLA (Anderson)

  14. Michigan (Ross)

  (Several ties in the rankings)

  Bloomberg Businessweek, Top Business Schools, 2010

  Based on recruiter and student polls

  Top U.S. Schools

  1. Chicago

  2. Harvard

  3. Pennsylvania

  4. Northwestern

  5. Stanford

  6. Duke

  7. Michigan

  8. Berkeley

  9. Columbia

  10. MIT

  11. Virginia

  12. SMU (Cox)

  13. Cornell

  14. Dartmouth (Tuck)

  15. Carnegie Mellon (Tepper)

  Top Non-U.S. Schools

  1. INSEAD (France)

  2. Queen’s University (Canada)

  3. IE Business School (Spain)

  4. ESADE (Spain)

  5. London Business School

  6. Western Ontario (Ivey)

  7. IMD (Switzerland)

  8. Toronto (Rotman)

  9. York (Schulich)

  10. Cambridge (Judge)

  Forbes, Best Business Schools, 2011

  Based on 5-year MBA compensation gains less tuition costs

  Best U.S. Business Schools

  1. Harvard

  2. Stanford

  3. Chicago

  4. Pennsylvania

  5. Columbia

  6. Dartmouth

  7. Northwestern

  8. Cornell

  9. Virginia

  10. MIT

  11. Yale

  12. Duke

  13. Berkeley

  14. Michigan

  15. Brigham Young

  Wall Street Journal, September 2007

  Based on recruiter surveys

  Top North American Schools

  1. Dartmouth

  2. Berkeley

  3. Columbia

  4. MIT

  5. Carnegie Mellon

  6. North Carolina (Kenan-Flagler)

  7. Michigan

  8. Yale

  9. Chicago

  10. Virginia

  11. Pennsylvania

  12. Northwestern

  13. Duke

  14. Harvard

  15. UCLA

  Top International Schools

  1. ESADE (Spain)

  2. IMD (Switzerland)

  3. London Business School

  4. IPADE (Mexico)

  5. MIT (USA)

  6. Columbia

  7. ESSEC (France)

  8. EGADE (Mexico)

  9. HEC-Paris

  10. Thunderbird (Garvin)

  Bloomberg Businessweek, 2010

  Students’ Favorites Poll

  1. Virginia

  2. Chicago

  3. MIT

  4. Berkeley

  5. Harvard

  6. Northwestern

  7. Stanford

  8. Cornell

  9. USC (Marshall)

  10. Columbia

  Bloomberg Businessweek, 2010

  Recruiters’ Favorites Poll

  1. Chicago

  2. Pennsylvania

  3. Harvard

  4. Northwestern

  5. Michigan

  6. Southern Methodist

  7. Stanford

  8. Duke

  9. Columbia

  10. NYU

  Bloomberg Businessweek, 2010

  Best Teaching and Career Services as Rated by Students

  1. Virginia

  2. Chicago

  3. Cornell

  4. Carnegie Mellon

  5. USC

  These 5 top schools were the only schools rated A+, top 20 percent, on both of these key criteria of student satisfaction.

  Financial Times, 2011

  Global Ranking

  1.London Business School

  1. Pennsylvania

  3.Harvard

  4. INSEAD (France)

  4. Stanford

  6. Hong Kong UST

  7. Columbia

  8. IE Business School (Spain)

  9. IESE Business School (Spain)

  9. MIT

  11. Indian Institute of Management

  12. Chicago

  13. Indian School of Business

  14. IMD (Switzerland)

  15. NYU

  (Some ties in the rankings.)

  The Economist, 2011

  Global Ranking

  1.Dartmouth

  2. Chicago

  3.IMD

  4. Virginia

  5.Harvard

  6. Berkeley

  7. Columbia

  8. Stanford

  9. York

  10. IESE

  11. MIT

  12. NYU

  13. London

  14. HEC-Paris

  15. Pennsylvania

  Day 1

  MARKETING

  Marketing Topics

  The 7 Steps of Marketing Strategy Development

  The Buying Process

  Segmentation

  Product Life Cycle

  Perceptual Mapping

  Margins

  The Marketing Mix and the 4 P’s

  Positioning

  Distribution Channels

  Advertising

  Promotions

  Pricing

  Marketing Economics

  A scene from the boardroom of Acme Corporation:

  DIRECTOR: Every time we do our annual review of our executives’ salaries, I cringe when I think that we are paying more to Jim Mooney, our vice president of marketing from Penn State, than to our company’s president, Hank Bufford from Harvard. I just don’t understand it.

  CHAIRMAN OF THE BOARD: What don’t you understand? Without Jim’s sales we wouldn’t need a president—or anyone else for that matter!

  “HOLD ALL CALLS. I’LL BE DOWN IN ACCOUNTING—FLEXING MY MUSCLES.”

  Marketers see the world like the chairman of Acme. As renowned professor Philip Kotler of the Kellogg School at Northwestern teaches, marketing comes first. Marketing integrates all the functions of a business and speaks directly to the customer through advertising, salespeople, and other marketing activities.

  Marketing is a special blend of art and science. There is a great deal to be learned in marketing classes, but no amount of schooling can teach you the experience, the intuition, and the creativity to be a truly gifted marketer. That’s why those with the gift are so highly paid. Formal education can only provide MBAs with a framework and a vocabulary to tackle marketing challenges. And that is the goal of this chapter and of the numerous expensive executive seminars conducted by the leading business schools.

  The top schools prepare their students for executive marketing positions—in spite of the fact that their first jobs will likely be as lowly brand assistants at large food or soap companies. Therefore, the core curriculum stresses the development of full-fledged marketing strategies instead of the technical expertise needed on an entry-level job out of MBA school.

  Numbers-oriented students tend to view marketing as one of the “soft” MBA disciplines. In fact, marketers use many quantitative or “scientific” techniques to develop and evaluate strategies. The “art” of marketing is trying to create and implement a winning marketing plan. There are literally an infinite number of possibilities that may work. McDonald’s, Burger Kin
g, Wendy’s, Hardee’s, and White Castle successfully sell burgers, but they all do it in different ways. Because there are no “right” answers, marketing classes can provide students with either an opportunity to show their individual flair, or many hours of frustration as they try to come up with creative ideas. Marketing was my favorite subject. It was fun cooking up ideas for discussion. My B-school buddies still kid me about the time I proposed to the class that Frank Perdue introduce a gourmet chicken hot dog.

  THE MARKETING STRATEGY PROCESS

  The marketing process is a circular function. Marketing plans undergo many changes until all the parts are internally consistent and mutually supportive of the objectives. All aspects of a proposal need to work together to make sense. It is easy to get one part right, but an internally consistent and mutually supportive marketing plan is a great accomplishment. It’s a seven-part process.

  1. Consumer Analysis

  2. Market Analysis

  3. Review of the Competition and Self

  4. Review of the Distribution Channels

  5. Development of a “Preliminary” Marketing Mix

  6. Evaluation of the Economics

  7. Revision and Extension of Steps 1–6 until a consistent plan emerges

  MARKETING STRATEGY DEVELOPMENT

  Although there are seven steps, their order is not set in stone. Based on circumstances and your personal style, the order of the steps may be rearranged. This chapter could get bogged down in a morass of marketing theory, but to make it practical, I will outline the questions and areas that should be considered when developing a marketing plan. For expediency, I will concentrate on product marketing, but the same frameworks and vocabulary are also applicable to service marketing.

  I will present the MBA models in the same seven-step order in which they are taught at the best schools. This chapter offers a generic structure to apply to whatever marketing issue you may encounter. I have not neglected to use the vocabulary taught at the schools, so you can pick up on the MBA jargon and speak like a real MBA marketer. Marketing is an area especially rich in specialized vocabulary. With the correct vocabulary, even your mediocre marketing ideas can appear brilliant. That may sound funny, but that’s the way ad agencies market their product, advertising.