It’s up to management, or is it?

How important is managerial talent in business success?

Rules of coin tossing game

• One student in each pair bets on each flip (up to a maximum of three coins).

• The winner of the bet takes the coins from the loser, regardless of who actually flipped the coin or made the bet.

• Players must flip quickly and cannot stop betting.• Students cannot borrow money once they go

bankrupt. When they run out of coins, they are out of the game. (please quietly walk to the front of the class)

• Now: Uniform distribution of coins?

• What do you expect after 7 rounds of coin tossing?

DiscussionWinners: How did you manage to become so wealthy?

What would happen if some players started the game with a different number of coins?

What would happen if bankrupt players could borrow money to get back into the game?

What would happen if we were to allow some players to pool their resources and play as a group?

What would happen if a wealthy or inheritance tax had been imposed between rounds?

Some interesting info

Number of businesses in the United States?

Number of employers in the United States?

Number of corporations in the United States?

1/5 of U.S. corporations account for 95 percent of the sales of all corporations (textbook)

Corporations are the focus of this course

22.7 mill. in 2003 (SBA)

5.66 mill. in 2001 (SBA)

4.5 in 1995 (usinfo.state.gov)

% of firms % of sales receipts

11.49%

21.24%

7.29%

8.07%

1.23%

49.32%

1.09%

0.14%

0.13%

0.24%

2.28%

2.20%

7.25%

3.66%

15.64%

9.57%

4.19%

55%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

0-99,999

100,000-499,999

500,000-999,999

1,000,000-4,999,999

5,000,000-9,999,999

<10,000,000

10,000,000-49,999,999

50,000,000-99,999,999

100,000,000+

En

terp

rise

rec

eip

t si

ze

%

Firms Sales receipts

Source: US Census 2002 (business statistics)