The Basics of Business Education - What Business Students Should Study

it's been actually exactly 25 years since I began business that is like you marketing in management I started on October 1 of 1990 that's when I began to study and back then of course I had no idea what I will study what I am supposed to study or what these studies will provide me or give me what kind of opportunities I will have well now I'll try to do that for you today's lecture will have the following topics first I will discuss some foundation courses then business core courses then business specializations business extensions and because I've had over 15 years of teaching experience education problems how in why business programs mostly fail around the world and then I'll have a short conclusion for you I understand that I have about 45 to 50 minutes to present this and maybe 15 20 minutes for questions and discussion now I did not originally know and I want to make very clear that today I talk about business education and I will talk specifically about global business and global business is very different from Global Studies global business is a small field of Global Studies Global Studies will include politics it willing to include global or international law it will include culture cultural anthropology Global Studies is very big I'm focusing first only on business basic business is business is taught in business schools around the world okay okay so we're business begin what is the foundation of business in other words what do you need in terms of background in order to begin understanding business and the two areas that you need to understand is quantitative methods quantitative methods basically means math and economics you need to understand basic economics before you can do any business studies so let's a little bit about each if you're a business student you want to take basic quantitative methods and usually we separate these quantitative methods in two subjects or in two areas the first air is just business math this is standard math which is used mostly in business there is nothing very special mathematics is a broad field and you're going to study only those specific things that are commonly used in business and of course accounting finance in general so that's business math I think you are already or have already taken business math course the second one that you do is business statistics and business statistics is about analyzing and interpreting data usually in the real world you will see a lot of data maybe interest rates over many many years maybe exchange rates over many years maybe economic growth or if you want to look at economic growth you may try to relate the economic growth to investment or economic growth to consumption or economic growth in the case of Korea with exports so statistics will try to tell your basic relationship which is let's say in the case of Korea most important for economic growth of Korea is it consumption or is it investment or is it exports you may have many different theories and you may guess many different things but with statistics you can get the data you can analyze and you can try to discover relationships and based on the data you can conclude which is more important or which is the most important factor in other words in business statistics have you already studied basic statistics or you will have you studied already so basic statistics will tell you these relationships okay the second foundation before you begin real Business Studies is economics you see if I have the next slide and economics is divided into of course over 15 different fields you have let me just read to microeconomics and labor economics you have International Economics yet international trade international finance you have labor economics okay you have many different fields in economics in general basic economics which we sometimes call principles of economics or introduction to economics includes these two fields microeconomics and macroeconomics you need these to understand general business micro economics concerns the behavior of individuals the behavior of consumers and the behaviors of families how families get job their income how families spend their income how much they spend on food how much on cars how much on housing in other words how families make economic decisions the economic decisions are about making money and spending money respectively investing money in other words what you do with your money so that's microeconomics the second part of microeconomics is about the businesses you look about one business how the business is managed microeconomics tells you how much labour how much workers to employ how much capital to employ possibly possibly a little bit of how much to borrow then it tells you how much to produce how to price your product and in general the main concern for firms is how to maximize profits about business is about making money is about making profits in microeconomics focus is on how to make maximum profits which usually boils down to how much to produce and sell and at what price macro economics is about the general economy the general economy is about production and output we call this GDP gross domestic production is about labor is an employment we call these jobs it's about are there a lot of jobs or a future next one is about wages are the jobs well paid or poorly paid okay the next thing is about interest rate interest rate is the cost of capital so macroeconomics concerns about labour in the cost of labour and capital in the cost of capital cost of capital is interest rates and macroeconomics is concerned about exports and imports and is concerned about the most important price in the economy the most important price of the economy is the price of money we call the price of money exchange rate how much the Korean currency exchanges for Chinese currency for US dollars for Japanese yen or for European euro so macroeconomics again is concerned about employment and wages about business output in business prices in other words business profitability about MP exports imports and exchange rates this is what macroeconomics is all about so these are the foundations before you need to specialize further into business this is the background next next if you study or when you study business you study four main areas we can also call them four main fields the or four main subjects okay the four fields are accounting finance marketing and management and I'll discuss each one of these now accounting is the language of business is translating business activity into numbers so that numbers can everyone understand the trick in accounting is that you as Koreans can read a European business accounts and you can interpret and understand them or me having studied in the US and come from Bulgaria can read Korean accounting statements and understand what they mean and how we interpret them so let's talk about each of these accounting is separated sometimes they call it principles of accounting sometimes they call it introduction to accounting the accounting field is generally separated in two major sub areas first one is called financial accounting the second one is called managerial accounting you need to learn and understand both this is the foundation for every business financial accounting is how you make the accounts and how you report them how you report the accounts we call these financial statements to the owners of the business to the government to investors to bankers to creditors in other words this is account which is designed for people outside the firm and it is highly standardized we have and now almost the whole world uses what's called international accounting standards we use them in Bulgaria they are all used of course in Thailand they're used in America everywhere in Europe I'm pretty sure you in Korea and I I know for sure Japan's using them China is now introducing them so that the statements are done here as well as there and everywhere in the world in the same way you read them the same way you make them the same way you interpret them the same the same way so that's financial accounting it gives you a balance sheet with assets and liabilities it gives you an income statement with revenues expenses in profits and it gives you cash flows how money is coming in and how money is going out so that's financial accounting managerial accounting is accounting designed to serve the needs of management so that management can make decisions these are going to be internal reports they're going to be used by the CEO and CFO the marketing manager the production manager they're going to be used to see what the costs are what is the cost of a product how to price a product how much to produce how much supplies to order it will include budgets budgets for inventory budgets for ordering okay it will include all of those things managerial accounting is accounting for managerial purposes and managerial purposes how management makes the decisions inside the firm so this is standard accounting for outsiders and this is whatever management needs for decision-making you need to study accounting first before you study finance before you study management before you study marketing and before you study any other things except of course math in economics okay so you do math and economics first then the third subject is accounting you can do financial accounting and possibly maybe you could study marketing or management in parallel next is finance in finance focus focus is on money finance is the subject of managing money the subject which is commonly taught and it's usually in all business school is called financial management in financial management is exactly that how you manage money how you manage business money sometimes this course is called in many business schools corporate finance in corporate finance is how you manage money for big corporations in other words if you let's say do accounting books or finance for Samsung it's got major corporation you need corporate finance financial management and corporate finance is about 90 percent the same corporate finance has stuff specific to big corporations you generally need financial management in financial management is how you manage the assets of the company how you manage liabilities of the company and the most important part is how you manage investments how you make investments when you make an investment you want to make proper calculation to find out is the investment profitable or not profitable what's the return on investment so finance is focus is on investment but not only okay financial management is about financing financing means how you get money do you get it by a bank loan do you borrow money from the bank or do yourself bonds in other words you borrow money from the bond market or you sell stock which is you raise money from investors there's certain optimal ratios it's not good to take too much debt in a very little capital but it's not a good idea to have too much capital in very little debt there is some optimum some balance so financial management will do this for you some business schools will usually have only one financial management course but most business schools will have two financial management courses sometimes there are smaller call them fundamentals of financial management which cover maybe 15 or 16 chapters if the school is very good in very hard they'll cover all fifteen chapters in one semester in 15 weeks and it's hard but they keep doing it most business schools around the world in what may mean most students cannot handle 15 chapters in 15 weeks so usually financial management they cover in the first semester eight chapters the first eight and in the second semester they cover the other eight chapters it's a little bit easier so the big subject is separated in part one in part two and Finance is about again investments next one is marketing marketing again is about the customer what the customer wants what the customer is willing to pay okay marketing is about the product what the customer wants again what product they want do they want a big screen or they want a small screen do they want a heavy mobile with a large battery or they want it very slim very light but battery life is no good what the customer wants that's the product the next thing is price how do we price it okay if it's similar let's say to Apple iPhone do we price it above do we price it below do we price it at Apple iPhone in other words you need to think about the competition so you need to think about your customer the product the features of the product the price you need to think about the competitors what the competitors are offering unis also need to think about service customer service that's very important especially for some customers especially for customers of products that you need a lot of service like cars cars need a lot of service maybe phones don't need so much service anymore so this is all marketing sometimes marketing is one huge textbook and it just go half and half sometimes marketing two is usually separated out as advertising now from the previous screen I think I forgot sometimes financial management to is separated out as a separate course called investments so instead of two you get investments for marketing instead of marketing to they just call it advertising and you learn all the tricks about advertising advertising is about making the customer to like to want and to eventually buy your product okay against about advertising campaigns and promotions in all the other things that will make the customer buy your product so that's what marketing is about and next one is management not necessarily the last one management again is about how businesses make decisions decisions are about planning how do we plan how much we're going to produce how much we're going to order how many people we will need the management of people's got a special name it's called a Personnel Management it's considered very important and usually instead of having management - they'll separate and have a whole subject called Personnel Management Management is let me repeat about planning it's also about organizing how we're going to organize what departments we're going to have when a marketing department in finance department and accounting department in a production department and a personnel department in a legal department and IT or computer technology department so what kind of departments we're going to have management is about leadership how to lead people how to manage people how to organize people one of the most important part in businesses is how to motivate people and of course how to reward people what kind of salaries what kind of vacations you're going to give them and all the other thing whatever is necessary and finally management is about control are going to put a camera and watch the people are they going to have a card every time they walk in they slide their card in other words you keep track of their time are they going to give you weekly reports monthly reports annual reports in other words how you control how you make sure that you achieve your goals how you make sure that employees do their job appropriately that's what management is about in these four fields accounting finance marketing and management consists the core once you got the core the main education oh there's one more once you get the core the big wants to get the core the capstone the most important the most difficult course the course that requires understanding all the other for understanding accounting and finance and marketing and management is called strategic management strategic management is how you competes are going to compete on efficiency are going to compete on price are going to compete on a better product are going to compete on a variety of products you know the basic thing that you can think the simplest and easiest that you can understand is how Samsung Galaxy will compete against iPhone is going to be bigger screen better Valarie battery whatever the fioors is going to be a different operating system more free software in other words how you compete it's also how you innovate how you innovate your products okay so all of this is called a capstone capstone means the top means the most important the one which builds on all the others that's the capstone course and let's see specializations once you have your core you can specialize in there are four primary specializations you can specialize in accounting and those that specialize in accounting are simply going to take four or five or six more accounting courses in other words you take the basics of accounting finance marketing management and then you focus on accounting you're going to do after introductory accounting to do intermediate accounting intermediate accounting is hard the textbook is that like 1,500 pages it's a killer Oh that's why accounting people get or make a lot of money it's very hard a lot of accounting majors just fail on intermediate accounting so they take it year-long two semesters after they do accounting sorry intermediate financial accounting they'll do cost accounting and cost accounting will go in a lot more detail of managerial accounting how we determine costs and all the other tricks related to the cost inside the business not with businesses about revenues and expenses cost accounting focuses on the expenses only that's it you'll do some auditing all the thing is trying to check and verify if your accounting is good is proper it's correct if there is cheating if there is fraud if someone's stealing money okay or if someone is called cooking the books in other words they're lying and cheating trying to mislead you methods the management or external people so that's what auditing is and of course you have nonprofit institutions you have also government institutions Government Accounting is a little difference nonprofit institutions are also a little bit different they not run for-profit so there have a separate accounting of their own and just not to mislead you there may be more one two three four more courses but if you take business and you have a field usually four or five extra courses are enough to have the field similar with finance you can take financial management too or you can do investments or you can do Financial Economics and other learn worth learn about financial markets financial institutions financial instruments you have separate ones called financial derivatives this is very advanced very difficult very sophisticated and you may have a separate course about that if you specialize in finance and of course risk management how you manage your financial risks or operations and production risk risk management includes a subfield of insurance if you're a big business how you insure your different risks well first of all which are your risk you need to know your risk you need to understand your risk you need to measure them in the last piece you need to manage them or insure them with marketing again you may have many different courses you can specialize in advertising take a separate course on advertising you can get a separate course on sales okay a lot of people in marketing they just do sales like a car salesman or phone salesman or whatever you're selling okay you could be product design how do we make it better how do we make it more user-friendly what do they like you know that's product design and of course marketing management how you manage the marketing operations and there could be a bunch of other marketing courses and with management first how we manage people it's called Personnel Management how we manage inventory called inventory management how we manage the marketing marketing management very popular course is supply chain management how you manage the supply chain there is another course sometimes in here sometimes a separate course called operations management how you manage your business operations whatever you're doing okay you may be managing a hotel or a restaurant or a car manufacturer and of course any other management so to summarize business specializations these are the four main the four primary specializations after you've done your core you take four or five of these within one specific area and then you specialize in those there is an alternative specialization which is instead of accounting business specializing it could it be specializing in it international business right this is what you're I understand doing and there is no difference between saying international business and global business international Global means the same so if you're studying in your case maybe a global business what do I think is a good global business education how do we structure it well very simple you will have or should have a course in International Economics in other words the first course we had microeconomics and macroeconomics now you're going to get international trade and international finance so International Economics deals with international trade and finance a subject which is very important for export oriented country like Korea again the next course is accounting you're going to get a specialization international accounting how you do accounting for we call this global accounting accounting for a company that has global operations in many different countries how you take the accounting of five different countries and put it all together how you deal with currencies and currencies going up and down in other words accounting for global corporations is a little trickier and you learn those tricks here similarly you take a finance and finance for global corporations we call these multinational corporations has its own tricks has its own complications you just call it international finance okay or how you manage the finances of multinational corporations similarly with marketing not with you take each of the four cores core courses accounting and into international accounting finance get international finance marketing you do international marketing in management you know International Management and I would think maybe not necessary but it's nice it's very good and it's very helpful if you do an extra course international law if you're doing business understanding at least some law is helpful is nice it's important so this is my view of how I would structure an international sorry yeah international business program of course you can add more courses international politics and all sorts of other things but this is the basics now what other extensions you may have what are not what you've done your core you've done our specialization but if you want to get a little further and there is usually time in a business school you may study some programming languages especially important is to learn at least one statistical programming language in other words you have many statistical softwares and the statistical software usually have a basics of non basic meaning some simple programming language so that you can learn how to program statistical software so learning some programming languages is very helpful especially statistical type languages there are many statistical packages maybe one or two of those is helpful next database systems it always helps to know and understand databases information is what you need to manage and make decisions and information is usually stored in databases so understanding databases and database systems is always helpful not necessary but it's a good idea well one way that it's done or another little broader subject which is usually done in most business schools in the world is called Mis management information systems and part of information system will include of course database systems but it will include security connectivity it's going to include whatever is related to technology and technology being used in businesses it's a fairly helpful course to have and it's a separate you may have web systems or internet systems how to use the internet for marketing management or whatever the things are that you may do and of course in general I'm talking about also general languages whether it's English which is today the language of all business around the world and of course tourism now the rising star is Chinese Japanese has been always popular and possibly Arabic which is more exotic okay so these are business extensions okay you may have a business extension in law you may study a little bit further law like introduction to law it's nice to have it's also very nice to have business law again it's not part of the core but it's a nice extension you may have specifically contract law how to make and manage contracts this one is tricky because contract law in Japan is going to be different from Korea different from China different from Bulgaria different from America so contract law is not the same around the world and maybe some international law so you may extend into the area of law so I'm trying now to summarize I've already discussed all of these things this is a simple table that you're having you may have within the field so you're going to have let's say for an international business what would you at least study is the basics well for quantitative stuff business math and statistics maybe you can take a third course maybe not maybe you can take statistical packages and statistical programming is number three it's not on there next for economics microeconomics macroeconomics and international economics which includes international finance and trade accounting financial accounting managerial accounting and international or global accounting I'm just putting it all together this is just the same information in one table for convenience finance financial management maybe financial management tool or investments international finance marketing one maybe advertising or marketing to international marketing management management one personnel management international manager and possibly for others you may include some Mis or maybe business law or maybe international law that's again the core you can extend in different ways up to your choices or up to the goals of the university or the goals of the administration let's see what else we have I should be okay that's my last section well I've been teaching both Business and Economics for about 15 years in eight different countries and I've seen a lot of programs fail or a lot of programs aren't doing very well a lot of programs are mediocre of course some Pro programs succeed so what are the typical problems what really you have to be careful about or watch about or what are the common mistakes number one it's very simple weak foundations they study a lot of business but they don't know basic accounting well they somehow study accounting but don't learn anything about the counting okay that's the most common mistake they study accounting to actually pass the exam they pass the exam and they forgot about it this is known in education is the toilet flush you know it's a toilet right you know what's a flush students study study study study learn when the exam comes they pass they flush and everything goes down the toilet and they forget everything don't remember anything anymore okay so weak foundations they don't understand basic finance that's very common they just say oh I'm a marketing guy I don't need to know finance and that's a very common mistake of thinking culture and mentality especially of an 18 or 19 year old kid you know when you're 30 say oh I should have learned better accounting I should have learned better finance so don't underestimate the foundation that's the first one the second common mistake and that's very common I've seen it everywhere is many fancy course fancy course is a course which sounds very nice it sounds very modern it's got a little bit of a contact contents but it's not big enough it's not broad enough they just feature a little bit about this and that's it like promotion strategies and that's a whole course well that stuff you study for a week or two so instead of another let me emphasize focusing on the foundations in the core they provide a lot of little courses that only look at a few things the third one which I've seen a lot and I mean a lot almost everywhere is few course chapters they study accounting in the study five chapters oh five chapters is not enough studying five chapters you're not going to learn a lot of accounting you're going to learn some but it's little when I was studying at one University and we teach finance students study four chapters in financial management in one semester and then four chapter in the next semester well how far you're going to go so then financial management one two three and four and for two years they study one textbook that has 16 chapters well that's not exactly good education where a textbook that is taught in one or two semesters you spread over four semesters you need to cover on average about ten chapters per semester whether its marketing management accounting good universities will typically cover 15 in bad universities will cover or seven but teaching we're studying three four or five chapters is a joke and that's very common around the world the next one which I've seen is too many project it's like the marketing teacher loves to give students a project right so it gives them a project but management teacher also gives them a project oh and the finance teacher gives them a project and suddenly every teacher gives them a project and the students like I have five five projects and they're doing the project copy the projects and they forgot what they're about and they forgot that they gotta actually sit and learn and understand so the learning is not very important it's about make the project deliver the project and of course with the projects come presentations and students focus on ten minute presentation so the whole semester they study to make a ten minute presentation all right on the project instead of learning all the important stuff so that's actually not fault for the students that's fall for the teachers in the department in general that's fault of the organization same thing heavily weighted projects heavily weighted project means the project is fifty percent of the grade and again when it's 50 percent do you have similar courses now here you got a course and half of the grade is on the project well when half the grade is on the project the students focus on the project and they ignore the other stuff if you get the project well then you make your presentation you're going to get most of your grade you don't have to study the rest well that's a common design problem well it's actually designed to make students pass quickly and easily in students pass and they get good grades but they don't learn much it's not about learning it's not passing the grades and making it easy for students well II it is not necessarily good let me see what else yes same thing poor and easy exams again this is mostly a fault of the professors and of course the last one is everyone's passing nobody is failing if you know that you're not going to fail because we don't fail anybody the result is you don't study much let's see what else cuz I'm running out of time ok these are very quickly maybe you some maybe use many of these the most common one is called memorizing you sit and you memorize right before the exam the night before the exam you do this now in Thailand they don't study the night before the exam they studied the morning before the exam so the example is 11 o'clock they started 9 in 10 o'clock quickly they come on the exam you don't learn a lot by memorizing and cramming usually whatever you learn by the afternoon it's all forgotten ok the next one is study from PowerPoint very common students loved PowerPoint and then they just read the PowerPoint and said you cannot get education from PowerPoint PowerPoint is not meant for study PowerPoint is meant for presentation to make a presentation easier but you can't study you can't get an education from PowerPoint of course not reading the textbook most students around the world especially in poor what meaning low quality business programs they don't read the textbook well if you want to learn you gotta read it's simple as that the only way to learn is with good reading you need to train your skills to read to analyze and all the other things you're just thinking oh if I listen to the lecture if I take notes no you need to read the book not enough exercises this applies mainly for accounting accounting needs exercises for each chapter you need to solve five or ten problems ok very important next one is big group exercises they give you an exercise and they put six people on the group what happens is one student works in the other one play the phone or chatting or talking or you know that's that's a group should be two people at maximum three four or more is usually one or two the students don't really work that much and that's the same thing as group free writing free writing is you get the benefit without doing the work so for example the four of you work on the same project and maybe two or three work hard and one will don't work hard okay of course too much fun too much party that's already known too much internet too much Facebook too much chatting okay so now I'm asking my students in Kyllo how much time you spend on average on Facebook four hours well when do you study well you know there I might put on a lot of time to study okay so too much fun and another one study for grades only you started just to get a well that's you know you don't need that in grades it's not as important it's the knowledge is understanding the business and finally I've seen it a lot I don't know why but it's a problem more of an Asian phenomenon as opposed to European or American kids go to business because mom and dad think it's a good idea so mom and dad want you to study business you go and study business to make parents happy maybe you don't care about business maybe you like I don't know drawing or painting or photography or art or history or something else you like but you don't go to study what you like you study what your parents want you to study so this makes for poor motivation students are not motivated go let me try and finish before can all right conclusion business study is general not easy people think it's easy but it's not there are too many business programs everywhere around the world and the field is competitive and maybe in career more than 100 business programs in general I mean I know in Thailand there are 100 I know in Taiwan during 100 so you gotta be good because if you're not good someone else will be and will have a job for you and a lot of times students underestimate reality oh they just want a little bit of marketing I'm ok well short answer is you're probably not going to be ok so most students fail meaning they graduate they didn't learn much and what they do they go for a master's degree ok ok just waste more time next one most students when they graduate they can't get a job meaning they can't get a good well-paying job yes they get a job and they become a bartender they get a job and become a secretary but again do you study for 4 years in business to be a secretary or to be a bartender or to be a waiter ok or to be a hotel receptionist and the answer is no we don't study four years for that but that's what most people do and I heard it and I've been in many countries the same thing oh there are no jobs there are no jobs when we graduate and I heard especially this in Bahrain they said oh there are no jobs doesn't matter what in the short answer is no there are plenty of jobs but the jobs are only for the skilled people so it turns out that especially when I was teaching in Bahrain but in other places for the good students let's say I have a class of fifty maybe six or seven will be top students these six or seven will already get a good well-paying job waiting for them and the others don't have a job at all in other words for the good students there are always good well-paying job and for the poor students there's simply no jobs and I would like to conclude by wishing you good luck in your business education and we have a little bit of time if you have any questions maybe you have some questions please don't be shy don't worry you've any questions or concerns or you're curious about something please don't hesitate to ask yes it's very simple good students study regularly consistently throughout the semester and the good student reads the textbook and of course pays attention in the best student just the bad student they just come to class they look quickly they prepare before the exam and of course the big difference is what they remember two weeks after the exam two weeks after the exam the good student remembers most of the stuff and the bad student doesn't the other big difference is good students try to understand and bad students just memorize its primary difference more questions on the back in this area I haven't been able to actually spend it looks at you any questions no yeah that's very common here especially in Asian students don't ask questions they just sit quietly well if you got a question you got to learn to ask you got to learn to ask questions you got to learn to be active you got to learn to be proactive you got to be curious any other questions yes please I personally don't know what which thing is the important thing which is not important thing so I think they were writing it though no the short answer is definitely not we have done this long time ago memorization was the way of education of the West 2,000 years ago we did that 2,000 years ago we did it for many hundreds of years and we know that it doesn't work as well okay and again if you don't know what's important that's got two things first you think to find out what's important but you can't you ask the professor that's what the professor's job is to tell you what is more important and to tell you what is less important that's what you asked the teacher hey which are the most important things that I need to learn in the rainy just memorizing is very common but doesn't help you much you just pass the exam but next time doesn't help so much that's a very common distinction between Western students and Eastern students again we've had universities 2,000 years ago 1,000 years ago for thousands of years we have this experience and we know what works and what doesn't work back in the old days where the discussion with the Dean universities in the West were established at the library whenever you have a library you make a university because university is based on books and is based on reading books that's how you get education more questions you have a third chance all right another one because because last questions no okay well thank you very much

Channel: Krassimir Petrov

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Length: 57min 5sec (3425 seconds)

Published: Sat Nov 07 2015