1

Finance 510 (e-MBA) Finance for Business Strategy

Syllabus
Michael S. Schuster, MBA, CMA
PSU Office Telephone
: (503) 725-8701
PSU Office : SBA Building, Room #535
PSU Fax Number
: (503) 725-5850
Office Hours : 2:00 p.m. 3:00 p.m. T TH
Off-Campus Telephone : (360) 574-3716
and by appointment
Off-Campus Fax Number: (360) 574-3751
E-mail (PSU)
: michaels@sba.pdx.edu
E-mail (Off-Campus)
: michael.schuster@ comcast.net
Website
: http://www.sba.pdx.edu/faculty/michaels/ms.html

Course Information
Quarter
Time

: Fall 2009
: Internet any time

Location
Credits

: Internet
: Four

Course Description and Objectives

This course will enhance your understanding of the dynamic relationship between finance and
business strategy, and provide you with the skills required to evaluate the strategic implications of
financial decisions and governance. This dynamic relationship will be examined through the start up
(entrepreneurial), growth to maturity and maturity stages of business enterprise in a decentralized free
enterprise system. An integral part of this approach will be to address finance for business strategy in
areas such as, white knight vs. venture capital, liquidity and risk, creating shareholder value, mergers
and acquisitions, and (or) exit strategies, and other relevant topics related to the course content.
This course embraces the perspective that financial structure and governance must be in place, before
the mission statement and subsequent formulating of corporate strategy will have any opportunity for
success. To be a player in todays business environment, a sophisticated understanding of financial
tools to formulate financial strategy and governance, is required to sustain the enterprises operations
and marketing strategies. Finance for business strategy exists to support decision-makers as they
develop, communicate, implement, evaluate and modify business strategies to the success of their
mission.
In addition to the above, we will examine several powerful financial tools through the critical stages
of several companies, to better understand the linkage between financial, operations and marketing
strategies. This course provides alternative approaches to developing and using financial information,
with special emphasis on understanding the differences in financial strategy in the three phases of a
business enterprise. We will examine all areas of strategic positioning in both the micro and macro
surroundings of the business.
Specific learning objectives will rely heavily on the examination of actual company situations.

2
This course will follow these themes:
1. Developing new ways of looking at familiar problems and concepts for example, liquidity
and risk, and risk and return, and how they are different in the three stages of the enterprise.
2. To understand the different behaviors of an organization during both economic expansion and
contraction, and how this affects different strategies, such as leverage, right sizing, mergers,
acquisitions, divestitures, management of enterprise risk, maximizing shareholder value and
other related topics.
3. Introducing some relatively new and (or) presenting interesting topics regarding financial
decision making in its relationship to strategic cost management that jointly facilitate business
strategy, to include but not limited to:
EVA
Lean Production
Kaizen
Leverage
Economic expansion
Downsizing
Globalization
Outsourcing
Hold, Harvest, Divest, Build
4. This course will concentrate in these following areas of financial decision-making for the three
stages of a business enterprise.
Start Up:
1.
2.
3.
4.

Liquidity and risk

Survival/Going Concern
Public vs. Private
White Knight vs. Venture Capital

Growth to Maturity:
1.
2.
3.
4.

EVA, ROI, EPS, P/E ratio

Maximizing Shareholder Value
Risk vs. Return
Exit Strategy planned, and implemented at the beginning of the Maturity stage

Maturity:
1. Harvest, Hold, Divest, Build
2. Mergers and Acquisitions
3. Reorganization

3
4. How non-financial managers affect financial decisions.

COURSE PREPARATION AND PARTICIPATION

Each student must accept the responsibility for course preparation. Thus, for each session, every
student must study the assigned readings and analyze the assigned cases.
The course uses cases extensively. In order to derive maximum benefit, it is essential that you
mentally get inside the case situation. Do not approach a case as you would a chapter in a book or
an article in a journal. You are not an observer but a participant. If a case centers on a decision that
needs to be made, put yourself in the shoes of the decision-maker. Feel the frustration(s) he/she feels
with respect to data limitations. Feel the pressure(s) he/she feels with respect to difficult tradeoffs,
limited resources, potential conflicts, etc. Share your ideas with others as we work jointly to resolve
the issues. I will also guide you in your case and topic presentations.
Case Analysis and Presentation grades will reflect the individual and the teams ability to critically
analyze the case or topic.
Case studies will be graded using the following criteria:
A.
B.
C.
D.
E.

Analyzing the case effectively

Identifying and evaluating alternative solutions
Linking the case to strategic issues
Organizing the case logically
Quality of the presentation, both written and oral
Total

20
20
20
20
20
100

Participation and Online Communications:

Participation in online discussions is an important part of the learning process of this course. There is a
discussion area for general information from the Professor. You should check this area for general
messages related to this course. The discussion area is also the place for questions and answers
between students and Professor. Your online participation grade, which is 5% of the total, is based
primarily on activity in the discussion area. There will be two specific discussion topics during the
term, which are assigned in the weekly schedule presented below (Schedule of Classes).
Skill/Knowledge Set:
It is assumed that you have the following skills. If not, you will need to do some extracurricular work
so that you do not fall behind in the class.
1. Financial accounting basics. You must understand the purpose and content of the balance
sheet, income statement, and statement of cash flows.

4
2. E-mail. You will need to be able to send and receive e-mail messages, as well as attach and
download files.

Student Responsibilities
1. have completed the assigned reading material before the class period (see Schedule of
Classes);
2. spend two - three hours of outside preparation for each hour of class (average student for an
average grade);
3. actively participate in the class discussions (if a chat forum) ;
4. request clarification or further elaboration whenever necessary;
5. do not interfere with the learning of other students;
6. be punctual with assignments and internet correspondence;
7. ask me for discussion notes if you are absent the day a case is reviewed, or an assignment
returned;
8. borrow class notes from another student if you need to miss a required time on the internet;
9. hand in course assignments on time and neatly word processed if specified. Late papers and
assignments will be accepted with prior consent of the Professor.
COURSE PRE-REQUISITES:
The School of Business Administration strictly enforces prerequisites for business courses. If a
student completes a course before completing the prerequisites and later completes the prerequisites,
he/she will NOT receive any credit for the prerequisites. The prerequisite for this course is Fin 561.
Grade Revisions:
If you believe that any of your tests have been incorrectly graded, you are encouraged to submit a
written request for grade revision. This document should clearly identify why you believe more credit
is justified and support those beliefs with as much documentation as possible. Simply asking for an
item to be re-graded is insufficient, and will not result in a grade change. You must explain why more
credit is justified. All requests must be in writing, and attempts to have a grade revised orally will
preempt your ability to submit a written request.
Academic Honesty:
The Student Conduct Code, which applies to all students, prohibits all forms of academic cheating,
fraud, and dishonesty. These acts include, but are not limited to, plagiarism, buying and selling of
course assignments and research papers, performing academic assignments (including cases and
discussions) for other persons, unauthorized disclosure and receipt of academic information, and other
practices commonly understood to academically dishonor. The code of conduct also describes
standards of behavior for all student members of the campus community. Violation of the SCC may
lead to disciplinary action. Students may obtain copies of the Student Conduct Code by contacting the
campus judicial officer at (503) 725-4422, or by visiting her office in room 433 Smith Memorial
Center.

Other Information:
1. If there is any student in this class who has a special need for an accommodation, please
discuss this with me before the course begins.
2. Harvard Business School Cases and Articles:
Address: cb.hbsp.harvard.edu/cb/access/4697521

Grading Policy
A
AB+
B
B-

= 93-100%
= 90-92%
= 87-89%
= 83-86%
= 80-82%

C+
C
D
F

= 77-79%
= 70-76%
= 60-69%
= Below 60%

Grading: 95% - case studies, 5% - participation in online discussions.

The letter grade will reflect each students performance relative to the course and standards expected
of e-MBA students.

Course Materials and Other Learning Tools

Text: Grinblatt, Titman, Financial Markets and Corporate Strategy, second edition
- selected chapters
Reading assignments (cases & articles)
Problem assignments (case studies)
Lecture material
Internet class discussions
Class handouts
Videos
Practical applications

Schedule of Classes
Case Study dates are firm, unless an emergency situation prevails, and we may need to modify topics
and discussions as the quarter progresses
Start Up (entrepreneurial)
Week/Date

Topics

Reading

Week
of
Sept.28

1. Financing the Company

2. Debt vs. Equity

Chapters 1, 2 and 3
Article New Venture Financing
Video Leverage and Risk

Week
of
Oct. 5
Week
of
Oct.12

3. White Knight vs. Venture

Capital

Video White Knights vs. High

Risk Capital

Case Study Nantucket

Nectars

4. Capital Structure and

Corporate Strategy
5. Review of Case - Nantucket
Nectars

Chapter 17
Video Aligning capital structure
with corporate strategy

Discussion Exit
strategies, ethical
considerations

Assignments

Growth to Maturity
Week/Date

Topics

Reading

Assignments

1. Allocating Capital and

Corporate Strategy

Article - Assessing a Firms Future

Financial Health

Case Study Dell, Inc.

Week
of
Oct. 19
Week
of
Oct. 26

2. Risk vs. Return

3. Review of Case Dell,
Inc.

Video Criteria for allocating

capital
Article Drivers of Industry
Financial Structure
Video Risk vs. Return

Week
of
Nov. 2

4. Management of Enterprise
Risks and Corporate
Strategy

Video Management of Enterprise

Risk

Week
of
Nov. 9

5. Maximizing Shareholder
Value
6. Review of Case American Outsourcing

Article Making the Deal Real:

How GE Capital Integrates
Acquisitions
Video Maximizing Shareholder
Value

Case Study
American Outsourcing
Discussion - Outsourcing

7
Maturity
Week/Date

Topic

Reading

Assignments

Chapters 18, 19
Video Hold, Harvest, Divest,
Build
Video How managers affect
financial decisions
Chapter 20
Article When to Ally and When to
Acquire
Video Mergers and Acquisitions

Case Study
The Renault Nissan
Alliance

10 Week
5. Reorganization
of
Internal
Nov.30 6. Reorganization
Bankruptcy

Article When a Strategic Plan

Includes Bankruptcy
Video Reorganizations

Case Study The

Enron Collapse, or
another corporate
restructure

11 Week
of
Dec. 7

None

None

Week
1. Hold, Harvest, Divest,
of
Build
Nov.16 2. Financial Decisions - How
Affected by Managers

Week
3. Mergers and
of
Acquisitions
Nov.23 4. Review of Case The
Renault Nissan Alliance

7. Review of Case The

Enron Collapse, or another
corporate restructure
No Final for this Course