Ni-95-016. INTERNATIONAL CORPORATIONS GAME
Introduce students to international commerce and finance through lectures and simulation (INTOPIA)
This class provides the opportunity for individuals of multiple career paths to join there various expertise in an effort to simulate complex international business operations. Skills required will be, financial data analysis, operational data analysis, marketing analysis, all types of business negotiation.
- Target careers and areas of interest for each
LIN: international marketing, trade negotiation, multinational processing
LAF: Hedging, currency management, cash flow management, investment evaluation, forecasting
CPF: Financial statement analysis, cash flow management, information collection and analysis, multi-currency accounting, hedging, effect of management decisions on financial statements.
LAE: General management skills, negotiation, management of technology, operations management, leadership
Students must be at least 6th semester in their given career path. Students outside of the target careers must be approved by the professors giving the course.
Topics:
I. Marketing analysis
The students will have to study the demand across markets and its sensibility to price, quality and advertising among others. They will then have to engage in forecasting in order to adjust their policies and gain perspectives on their own future cash flows.
II. Financial statement analysis
The students will be given complete financial statements of their companies on a weekly basis and will be required to analyze those in order to judge their own performance, the success or failure of their policies, areas of opportunity, strengths and potential problems, and current situation.
III. Financial risk management
As companies operating in or with several areas with different currencies, the students will be forced to engage in currency hedging in order to smooth their cash flows. They will also have to consider the balance sheet effect of their international fixed and floating assets, the diverging tax practices among regions. This combined with their cash flow management will provide a very complete simulation of international financial management
IV. Cash-flow management
Both inflows and outflows in INTOPIA are mostly paid over several periods, with conditions varying from market to market, and to some extent from transaction to transaction. Lag effects due to fabrication and transportation as well as time to final sale will force most companies to engage in cash flow forecasting in order to avoid costly liquidity problems. Should liquidity not be a problem, they management of excess cash will constitute the challenge for the student.
V. Operations management
Management of the production of different products, with different grades across plants and areas, R&D decisions and their consequences, facing rapidly changing technologies, streamlining costly inventories and managing obsolescence, deciding between local and imported products and other operational decisions will provide the student with ample opportunities to apply operations management concepts and techniques.
VI. Industrial negotiation
No matter where in the production-distribution chain in a given area a company decides to operate, negotiations with industrial suppliers or customers and the establishment of strong relations are unavoidable necessities of the simulation. Finding the best suppliers at the most competitive price, negotiating the best conditions and obtaining the best conditions for one’s own product are key to achieving success during the simulation and are the aspects that students often enjoy the most. Creating a good reputation, rewarding honesty and penalizing lack of professinalism are some of the hardest to achieve goals in the simulation.
VII. Investor relations
The students are professional managers who must report to a board of directors, represented by the professors, on a regular basis. At the end of the class a report to the general assembly of shareholders (instructors, other students, other faculty members and guests) is the occasion to review a given team’s performance and constitutes a large part of the final grade.
VIII. General management skills
Balancing all the aforementioned aspects, dividing work within a team, establishing long term goals, implementing or reviewing them and more generally having a firm’s destiny into their hands is probably as good a management experience as can be achieved in an academic context.