Programme

PGP

Term

VI

Academic Year

2021-22

Course title

Black Swans and Gray Rhinos: Managing under Financial Crises

Area

Finance and Accounting

Credits

0.50

Instructor(s)

Prof. Jayanth R Varma, Prof. Vineet Virmani

Course Description & Objectives

Introduction and Objectives: Made popular by Nicholas Nassim Taleb, “black swans” has long been used as a metaphor in financial markets for rare and almost impossible-to-predict large shocks. Noticing that often many crisis are a result of ignoring the obvious, Michel Wucker coined the “gray rhinos” metaphor to capture that many large problems are often well in sight but not identified as one at the time (rhinos are often described as either black or white, but they are all really gray). The purpose of this PGP-II elective is to understand the variety of black swan and gray rhino events leading up to financial crises through the lens of historical episodes and study the strategic issues that arise in navigating them through different business situations. The cases covered in the course discuss the impact of different kinds of crises on acquisitions, debt restructuring, financial flexibility and portfolio management decisions.

Pedagogy

This is a case based course, with a different case assigned for all sessions after the course introduction. In every session, one group would make the presentation on the case for the day and another group would lead the discussion and Q&A on the case. At the end of the course, each group would be required to explain a situation surrounding a financial crisis (each group would be assigned a different crisis in advance).