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 using standard Net Present Value (NPV)
• Valuing common real options and valuation principles
• Valuing complex projects with embedded options using binomial trees in Excel
• Problem structuring and business option modelling
• 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 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
• Work in small groups to apply the theories via the analysis of real project and company cases.

Key Skills:

• 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 consist of a comprehensive final exam with a 100% weighting designed to test students' knowledge of key concepts and tools and their ability to apply those in a business context.

Encourage students to work in small groups to analyse and discuss real company case applications. Exercise questions prepared in advance or in-class problem-solving (quantitative).

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