Master of Business Administration

Introduction

This document will attempt to link and organize the information found here on WikiMedia and elsewhere on the internet to provide a comprehensive business education such as one provided by the top business schools in the world.

A Master in Business Administration (MBA) is unlike many other academic programs. While most Master programs provide a further specialization within a particular school or discipline (such as law), an MBA is typically quite inter-disciplinary, drawing from the fields of psychology, sociology, economics and finance.

As such, most of the material found within an MBA program is not unique to the world of business. Rather, an MBA provides exposure to the diverse concepts which are most useful to a person who is interested in succeeding in business within an easy to learn two-year bundle. Despite all the drinking and socializing, a MBA can be a lot of work. If you work through all the concepts referenced, it should take you quite awhile (probably 2,000+ hours). You're also going to have to get really good at Excel.

Let's get started.

Master of Business Administration Core Course Overview

Some MBA programs have a core course requirements in the fields listed below. For example core MBA program requirements, please refer to the core requirements of INSEAD, [Sciences-Po], Harvard Business School, Wharton Business School, and Columbia Business School.

Most MBA programs then have additional coursework on diverse subjects as well as advanced topics in the prior subjects.

Coursework

Basic Probability and Statistics

The grounding for many futher concepts in business, as in other applied disciplines, is a thorough understanding of statistics. A good free source for understanding probability is Introduction to Probability. In particular regression analysis is going to be useful. Regression is fundamental to the concept of Beta in Finance, conjoint analysis in Marketing, and the pooling of risk in operations management.

The directions on how to perform a regression analysis in Excel can be found online at Regression Analysis Using Microsoft Excel. Once you have completed a few regressions in Excel, you have performed the highest level of statistical analysis which most MBA's become familiar with. Congratulations! You are ready to move on.

Financial Accounting

A good place to start is Accounting. While most MBA's are not a big fan of double entry book keeping, finance starts with accounting. Understanding what depreciation (the spreading of the cost of an tangible asset over time) and amortization (the spreading of the cost of an intangible asset over time) are is going to be essential to understanding corporate finance (if only because you are going to need to reverse out the effects from GAAP Income Statements to get cash flows).

Managerial Accounting

Managerial Accounting refers to the broad application of accounting concepts to financial data with the purpose of being consumed by management. Such financial data, in contrast to Financial Accounting, does not have to comply with GAAP, the FASB, or the filing requirements of the SEC, since it is meant only for internal consumption within an organization.

The major subjects to learn include:

• cost accounting
• activity based costing
• project costing
• budgeting

Microeconomics

A good place to start is the Wikibooks course on Microeconomics. Particularly, the concept that in an industry with high competition firms make zero economic profit should be thoroughly understood; that fact of life is the foundation of much of cooperate strategy, and the root to how to make excess profits (that is, profits greater than your Cost of Capital).

Macroeconomics

Read the Wikibook on Macroeconomics. In particular, the working of currencys, current account deficits, and the relationship between economic performance, monetary policy, and interest rates will be useful for finance and (ultimately) Capital Markets.

Decision Models

Decision models are part of the core curriculum of many business schools. The reason why is probably because "average" performance of a firm is distinct from the implied performance of the averages, if the components which combine to create that average performance have differing distributions or deviations.

Decision models will typically cover the following concepts and software packages:

• decision trees
• linear programming
• Management Information Systems
• Crystal Ball or @Risk simulation software. Download yourself a free trial, play with it for a month, working through the tutorials. You'll do alright.

Corporate Finance

Finance is among the most stereotypically MBA things an MBA will learn.

If you want to understand corporate finance, learn thoroughly:

• what the implications of the Modigliani-Miller theorem
• the time value of money
• how to calculate the NPV of a project
• how to calculate the WACC of a project or company
• how to do a decent DCF

Putting it all together, you'd get something called a model. That model will tell you how much any asset that generates cash flows (such as a stock) is worth. People in business think that this might be useful to know.

Marketing Strategy

Key concepts to learn in Marketing:

Marketing Mix

• the 4 C's (Company, Context, Customers, Competition)
• the 4 P's (Product, Place, Price, Promotion)

Marketing Implementation

Key concepts to learn:

• Customer lifetime value
• conjoint analysis

Corporate Strategy

Key concepts to learn:

• Porters Five Forces
• Positioning
• Game Theory
• Sustainable Competitive Advantage
• Strategy Maps

Good thing to read when the summaries of the concepts won't do:

• Porter, What is Strategy?

Organizational Behavior and Structure

Organizational behavior classes cover concepts such as:

• Taylorism
• The Hawthorne Effect
• Social Networks
• Organizational Behavior

Leadership

Leadership classes might cover:

• the ideas of Robert Cialdini
• the results of your Myers-Briggs test

Generally, understanding yourself and influencing other people is the focus of a leadership class. A fair bit of Negotiations content might be thrown in as well.

Operations Management

Operations classes typically cover:

• Supply chain management, in particular the Newsvendor model
• Six Sigma and other quality management concepts
• Risk pooling-that is, the managerial signifance of the fact that when you combine two processes the deviation increases by the square of the summation (because variances are additive, standard deviations are not). Risk pooling is often the root cause of economies of scale.
• Queueing theory which is helpful is you want to optimize business processes.

Negotiations

Negotiating is important for business at many levels. Getting to Yes seems to be the core text to understand how to sucessfully achieve good outcomes from negotiations. A good summary of Getting to Yes can be found many places online (such as: Getting to Yes: Negotiating Agreement Without Giving In). Read that and you're all set.

Ethics

Probably read up on Sarbanes Oxley. Also, reading these important tips would probably be useful.

Additional Coursework

Capital Markets

The two central concepts in capital markets are:

• Arbitrage
• Risk Premium

With those concepts, (and the ideas learned in finance), you can price:

• Fixed Income
• Swaps
• Forward Rates

Further Reading

Competition Demystified by Bruce Greenwald

The One Minute Manager by Kenneth Blanchard and Spencer Johnson

Getting Things Done by David Allen

The Little Book that Beats the Street by Joel Greenblatt

About the Contributors

One of the first contributors to this curriculum overview was John O'Brien. John received his MBA from Columbia Business School in 2005. He can be contacted online at pulplit.net.