The problems of financial management.docx

1、The problems of financial managementThe Aspen Institute Corporate Governance and Accountability Project:Rethinking MBA Curriculum in the Finance DisciplineSupported by the Alfred P. Sloan FoundationMBA Finance, Rethought: Faculty at the Washington State University, Vancouver, MBA Program are rethink

2、ing the finance curriculum. As part of the Aspen Institutes Corporate Governance and Accountability Project, WSU is working to reframe their core MBA Finance Course, “Problems in Financial Management” towards a more explicit treatment of stakeholders interests in financial managers decision making.

3、The intention of this new course is to demonstrate to students that maximizing firm value necessitates focusing on more than shareholders. For more about the philosophy behind this new course, see Professor Becker-Bleases Case in Point essay, “Do Stakeholders Belong in Corporate Finance?” It is the

4、goal of the CGA Project to work with a select group of faculty partners to test drive this new and innovative course across the American business school landscape. The complete syllabus with teaching plans will soon be available at www.CasePlace.org. Interested finance faculty should contact Alex.Ro

5、bertsaspeninstitute.org or jbleasevancouver.wsu.edu for more information. On WSUs Curriculum Reform Efforts: John Becker-Blease, Finance Professor at WSU, is heading up this effort to reshape the finance syllabus. The MBA program at WSU emphasizes sustainable stakeholder engagement, where strategic

6、stakeholder relationships form the foundation for long term organizational success. Each course in the MBA program uses this focus as a central organizing premise.CGA in Brief:Since 2003, The Aspen Institute Center for Business Education has received nearly $1,000,000 in funding from the Sloan Found

7、ation to underwrite its Corporate Governance and Accountability Project (http:/aspencbe.org/networks/CGA.html). The Project aims to influence prevailing models of corporate governance and theories of the firm, as they are understood and taught by business school faculty. Problems in financial manage

8、mentMBA-Level corporate finance courseCourse Framework, Teaching Notes & Syllabus Interactive Table of ContentsStrategic Stakeholder Engagement: Organizing Framework for WSU Vancouver MBA ProgramCourse SyllabusIntroduction and Overview of the courseModule SummariesCourse Information (description, ob

9、jectives, grading, contact info, etc.)Course ScheduleModule 1 Review Fundamental Microeconomics and Financial Management Learning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesReferencesModule 2 Goal of the CorporationLearning Goals; ReadingsAdditional Materials Pedagogical Purpose

10、and NotesAdditional Talking PointsReferencesModule 3 ValuationLearning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesAdditional Talking PointsReferencesModule 4 Capital StructureLearning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesAdditional Talking PointsReferenc

11、esModule 5 Agency Theory & GovernanceLearning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesAdditional Talking PointsReferencesModule 6 Payout PolicyLearning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesAdditional Talking PointsReferencesModule 7 M&A and Corporate

12、StructureLearning GoalsReadingsAdditional Materials Pedagogical Purpose and NotesAdditional Talking PointsReferencesModules in Brief Class ProjectComplete Course ReferencesStrategic Stakeholder Engagement: Organizing Framework for WSU Vancouver MBA ProgramThe finance course starts by reviewing the s

13、takeholder approach the MBA program uses and how this course fits into that model. The model is presented on the next page. The model is first presented in a course on Stakeholders and Competitive Advantage that all students take as their first course in the MBA program. Here we start by reinforcing

14、 the key points: Organizational strategy is determined by: The organizations core values and views about how they want to operate. Market conditions that determine where they can find a competitive niche. Strategy is developed by applying theory from the key business disciplines: marketing, accounti

15、ng, management, finance, and information systems. Resources are necessary to execute the strategy. Those resources that lead to a positional advantage are usually intangible and often relationship based. The organization develops a resource mix that is not imitable by competitors. Stakeholders (cons

16、umers, value chain partners, investors, employees, and publics) supply the resources. The organization must understand what motivates them to contribute to the organization. The organization must clearly understand what it needs from the stakeholders. Often there are conflicting expectations from di

17、fferent stakeholders which need to be balanced. Sometimes stakeholders may have relationships between themselves that affect how the organization works with them to assemble their resource mix.Business leaders must orchestrate harmony between the goals and expectations for the organization and stake

18、holders. Often tensions arise around differing expectations. Good leadership anticipates these tensions and proactively crafts solutions. The MBA program curriculum is designed to develop talents for business leaders to think comprehensively when making decisions. For instance, theories presented in

19、 finance examine the impact on investors and also on other stakeholders such as employees or the public interest.Washington State University VancouverTheoretical Framework for MBA Curriculum using a Strategic Stakeholder Engagement Focus (See CasePlace.org for a recording of the previous Web-Confere

20、nce from WSU, Vancouver: Integrating Stakeholder Theory into the MBA Curriculum)Course SyllabusIntroduction and OverviewTeaching business ethics, always something of an embarrassment, may simply come to be teaching Finance well! (Stuart Greenbaum)The purpose of this course is to provide students wit

21、h a heightened appreciation of the role of a financial manager within a firm and to understand the tools and the nature of the decisions that financial managers must make. Paramount to the topic is an understanding of what constitutes a “good” manager. A traditional finance characterization of a goo

22、d manager is one who adopts the most firm-value-maximizing projects in the interests of maximizing current shareholders wealth (e.g. Brealey, Myers, and Allen, pp 20-28). This model is sometimes called the shareholder primacy model. An alternative model, frequently termed the stakeholder model, argu

23、es that a good manager is one who effectively maximizes the joint utility of all firm-stakeholders. A substantial literature has evolved highlighting the tensions between the two models. The goal of this course is to expose students to both of these models in the context of a traditional core-MBA fi

24、nance class. The intent is for students to leave the course understanding in which situations the actions of stakeholder-focused managers and shareholder-focus managers will be the same and in which situations the actions could be different. In particular, students will appreciate that increased att

25、ention to the interests of all stakeholders is frequently essential to maximizing the long-term value of the firm and therefore current shareholder wealth.First, I should place this course within the context of the MBA curriculum at Washington State University, Vancouver (WSUV). The MBA at WSUV is f

26、ocused on the stakeholder model of the firm and there is only one graduate-level finance course offered. Given that students do not have alternative sources for topics such as capital structure, payout policy, practical capital budgeting issues, agency and governance issues, and the market for corpo

27、rate control a substantial portion of this course is dedicated to the specifics of these topics. However, the lens through which we examine these topics includes a strong element of stakeholder interests in the effort to maximize firm value.This course also reflects my understanding and interpretati

28、on of the stakeholder model, especially as it relates to shareholder primacy and firm-value maximization. I have found Michael Jensens “Maximization, Stakeholder Theory, and the Corporate Objective Function” particularly influential in this process. As a traditionally-trained financial economist, I

29、have an undoubtedly biased view towards the shareholder primacy model and have likely sought out those elements of the stakeholder model that fit most seamlessly into the former. However, what appears evident is that in many, and likely most, situations in which a typical MBA student will find his o

30、r herself making an important decision, the correct application of the stakeholder and shareholder models will lead to a similar decision. Thus, at a practical level, my efforts are better placed in trying to equip students with superior tools with which to identify and analyze the economic effects

31、of their decisions on various stakeholders rather than enter them into the important debate between the two theories.Module 1 of the course is dedicated to review of the material most students would receive in an undergraduate-level introductory financial management course. These topics include time

32、 value of money, basic cash-flow-based asset valuation mechanics, an understanding of the relation between risk and reward based on the CAPM, estimation of project and firm-level cost of capital, and basic capital budgeting tools including NPV and IRR analysis. Student will also read the Graham and Harvey (2001) survey piece of CFOs, which provides an important reference piece throughout the course to map the contents of the course to actual practice.Module 2 introduces stu