BUSI4G215: Decision Making and Business Option Modelling

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• 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.

• 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.

Subject-specific Knowledge:

• 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.

Subject-specific Skills:

• 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.

Key Skills:

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

• 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.

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.

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