Teams do it their way

THIS YEAR'S Independent Management Challenge has started with competitors taking differing approaches and getting correspondingly various results, writes Roger Trapp.

The general feeling in the contest's "stock market", though, appears to be one of "wait and see" while the new managements settle in. Although many of the "companies" have been paying half-year dividends up to 7 or 8 per cent, share prices, in European currency units, have tended to slip from about 1.42 toward 1.3 ecu in this first quarter.

One early difference between companies taking part in the contest, sponsored by National Westminster Bank, is in their attitudes towards raw materials. At the start of this round, raw material stocks were valued at about 1.35m ecu.

Although this is a great burden on liquidity, some companies still appear to be attracted by the promise of cheap materials resulting from dabbling in the futures market. However, just-in-time buying would be a better approach - something that is apparently appreciated by only a handful of companies at present.

Among these is an Isle of Man finance house, playing as "Eric Can't Fly", which currently has the highest share price of 1.45 ecu. Running close behind are representatives of BPP Courses and a team from "Deja Vu", an insurance-related company from Croydon, at 1.39 ecu.

The Independent NatWest Management Challenge, which last year was won by a team from Severn-Trent Water, is based on a computer-based business simulation developed by Edit 515 of Edinburgh. It is played in three knockout rounds, by teams of up to six members who take on the roles of board directors in a medium-sized manufacturing company.

After the first round of five reporting periods, the teams showing the best share prices will go forward into the semi-finals and face a variety of business problems while managing the same companies. Winners of the semi-finals will take part in the national final towards the end of November.