DBA Program COURSE SYLLABUS

Transcription

1 Course Title Theory of the Firm Course Number DOCT 723 Credits Professor 4 credits DBA Program COURSE SYLLABUS Professor Ingo Böbel, Dr., Dr. habil. Contact Information Professor s Phone Number: Professor s ibobel@monaco.edu Professor s Website: Professor s Office Location : IUM Monaco Room 204 Course Schedule Professor office hours Nov. 17, 2014 Feb (12 weeks) By appointment Course Description Competition has fundamentally intensified over the past decades. Many companies today spread out their value chains across numerous locations. Thus, sound economic analysis has never been more important regardless whether the decision making unit is an individual, household, firm, nonprofit organization, or government. The integrative approach used in this course will help our DBA students to recognize that important managerial decisions are interdisciplinary. Therefore, the business firm is treated as a unified whole, rather than a series of discrete, unrelated parts. The course THEORY OF THE FIRM is one of the Foundation Courses in the IUM DBA Program. As such and given that we address a wide range of questions it requires a thorough knowledge of the Development of Economic Thought. Based on extensive readings from numerous classical economists the course provides the students with the intellectual fundament to better understand very difficult questions, such as: Why do firms exist? What is their function, what determines their scope? How do markets work? What is the role of business in society? These are obviously important questions for both entrepreneurs and business executives who act as strategists in highly competitive local and global markets. In order to deepen the intellectual fundament, the students will learn where conceptual frameworks come from and how they have led (in a somewhat chronological order) to the development of managerial economic theories. We then evaluate, interpret and assess the consequences of different forms of market structure in a business context. We focus on the economic behaviour of actors participating in individual markets and industries under different forms of market structure. We also focus on the history of (competitive or business) strategy on both the firm and industry level. Strategy is closely linked to the economic phenomenon of choice. Making choices and the reasoning behind this process will be inquired. We conclude with a discussion of most recent developments in business strategy that are related to Creating Shared Value, a new business model where both economic and social value are co created. Course outcomes

2 1. Through provision of a solid historical foundation of economic understanding and the economic way of thinking for use in managerial decision making, students should be able to a. Demonstrate the ability to evaluate the micro and macroeconomic influences on business managers. b. Understand the extent of the Market. c. Understand the Foundations of Market Structure. d. Understand Competitive Strategy on the firm and industry level. 2. Through enhancing students managerial intelligence, i.e., the ability to respond quickly to economic developments and changes at local, national and international levels, students should be able to a. Master real world firm and industry productivity issues. b. Put economic events into historical perspective so that they are able to better evaluate, interpret and assess the consequences of different forms of market structure c. Understand the link between Competitive Strategy and Market Structure to better evaluate the process of value creation on the Company and Industry Level. Sources Most of the course material is based on scientific articles published in peer reviewed journals which are available through Ebsco (however, whenever possible, I added the link in order to directly access the article on the internet). I recommend to buy a copy of the book by Robert L. Heilbroner (The Worldly Philosophers (any edition will do I use the 7 th ed. 1999), NY: Simon & Schuster) as it is helpful to better understand the Development of Economic Ideas. Additional readings and other supporting material that enriches the course content will be given in the syllabus and during the weekly online course delivery process. Final hint: the following sources are of general relevance: The Library of Economics and Liberty (EconLib) ( for guides and any topics in economics (excellent source). Other suggested Web Sites on the History of Economic Thought: Nobel Prize Winners in Economics. ( EH.net website:

3 Course Outline This course will run through 12 weeks and will cover the following topics: Week 1: Historical Foundations of the Economic Way of Thinking for use in Managerial Decision Making Introduction to the course Discuss Historical Foundations for Managerial Decision Making: The Economic Revolution Heilbroner pp. 1 41; M. Blaug, No History of Ideas, Please, We re Economists (The Journal of Economic Perspectives 2001): Optional: Good background information on Smith s life: N. Phillipson (2010), Adam Smith: An Enlightened Life. Penguin Books. Week 2: Historical Foundations Cont d. Adam Smith Pre «Wealth of Nations»: Theory of Moral Sentiments The Wealth of Nations D. Ricardo Heilbroner pp ; R. Dorfman on Th. R. Malthus and D. Ricardo (The Journal of Economic Perspectives, Vol. 3, No. 3 (Summer, 1989), pp ) Week 3: From Classical Economics to Neoclassical Economics and after A. Smith and F.A. Hayek K. Marx M. Friedman and Positive Economics Economic Theory after Neumann/Morgenstern (Game Theory) K. Marx Selected Texts in Economics, History and Social Science, in: D.M. Hausman, The Philosophy of Economics, 3 rd. ed, CUP 2008, pp

4 Marx s Theory of Political Behavior (from Understanding Society) and Marx s Critique: theory of political behavior.html critique.html Marx Internet Archive : EconLib: R. P. Murphy, Chicago School vs. Austrian School: Chicago School versus the Austrian School M. Friedman, The Methodology of Positive Economics, in: D.M. Hausman, The Philosophy of Economics, 3 rd. ed, CUP 2008, pp ; [optional for Friedman: ( 20&linkCode=as2&camp=1789&creative=9325&creativeASIN= )] Introduction to Neumann Morgenstern s Theory of Games and Economic Behavior (downloadable): i.html Also consult EconLib: Week 4: The Invisible Hand in Modern Economics James Tobin and J. M. Keynes role. Origins of the German Social Market Economy Tobin s article (Cowles Foundation 1991) K. Zweig (Adam Smith Institute 1980) on the intellectual roots of the German Social Market Economy: content/uploads/social market economy.pdf Week 5: Early Evolution of Strategy Sun Tzu, Machiavelli and after (Clausewitz) Sun Tzu, The Art of War, Oxford UP 1963 The Economist: Sun Tzu and the art of soft power (Dec. 17, 2011): Week 6 : The Development of the Nature of the Firm, Competitive Strategy and Management Strategy (Part 1)

5 The Role of Industrial Revolutions ( ; 1850 and after) The Role of Academic Institutions R. Coase (1937) A. Chandler and P.F. Drucker A.Maddison, The World Economy A Millennial Perspective, OECD 2001 ( R.H. Coase, Nature of the Firm ( ) P. Ghemawat, Competition and Business Strategy in Historical Perspective, HBS Case ( A.D. Chandler, Organizational Capabilities and the Economic History of the Industrial Enterprise, J Econ Perspectives 1992 ( P.F. Drucker, The Age of Social Transformation (1994) ( Week 7: The Development of Competitive Strategy and Management Strategy (Part 2) The Role of Industrial Organization (Role of The Structure Conduct Performance Paradigm) Principal Agent Theory (Jensen and Meckling) The Modern Corporation (Williamson) Readings : L. W. Weiss, SCP Paradigm and Antitrust (Univ. of Pennsylvania Law Review 1979): M.C. Jensen and W.H. Meckling, Theory of the Firm, J of Fin. Econ ( O.E. Williamson, Theory of the Firm as Governance Structure, J of Econ Perspectives 2002 ( 41&uid=2&uid=3&uid=67&uid=62&sid= ) O.E. Williamson, The Modern Corporation, J Econ Lit ( 41&uid=2&uid=3&uid=67&uid=62&sid= ) Week 8 : Understanding Industry Attractiveness M. E. Porter The Five Competitive Forces that Shape Strategy Readings : M. E. Porter, The Five Competitive Forces that Shape Strategy, HBR 2008 ( shape strategy.pdf) Week 9 : Strategic Positioning

6 Strategic Positioning What is Strategy? Readings : M. E. Porter, What is Strategy?, HBR 1998 ( Week 10 : Recent Developments in Business Strategy (I) Creating Shared Value The Original Concept M. E. Porter and M. Kramer, Creating Shared Value, HBR 2011 ( Week 11: Recent Developments in Business Strategy (II) From Strategy 1.0 to Strategy 2.0 New Insights into Strategy M.E. Porter and M. Kramer, Creating Shared Value, HBR 2011; ( Contesting the value of CSV: ( I. Bobel, Reimagining Business Strategy (Draft Paper under construction) 2014 Week 12: Wrap Up of the Course Discussion Board (DB) and Chat Effective and engaging online discussions are a very important component of this course. Just like in a traditional class, you will be expected to actively participate in discussions with your instructor and fellow students. Discussion Board and Discussion Board Posting Policy The Discussion Board (DB) is part of the core of online learning. Classroom discussion in an online environment requires the active participation of students and the instructor to create robust interaction and dialogue. Every student is expected to create an original response to the open ended DB question as well as engage in dialogue by responding to posts created by others throughout the week. At the end of each unit, DB participation will be assessed based on both level of engagement and the quality of the contribution to the discussion. The purpose of the DB is to allow students to learn through sharing ideas and experiences as they relate to course content.

7 Live Sessions Day of the week Start time End time Duration TBD Library The link to the online library is found on the course website so that you have ready access to research the library at any point in any Unit. Course Evaluation Graded Learning Events The final grade is composed of students performance shown in the following grade categories: Individual Assignments, Attendance and Discussion Board/Group Work participation. Every Unit (except Week 1) includes assignments that consist of either the delivery of Individual Projects, participation in the Discussion Board and/or Group Work. More detailed instructions for each assignment type are provided within the unit topic identified for each week. Each assignment concludes with a deliverable product. Deliverable products may range from a paragraph narrative, a paper, a PowerPoint Presentation, or an analysis of the assignment. Class participation Online students are required to participate in their online courses in an academically related activity comparable to the minimum of two contact hours of instruction in a seven day calendar week (Monday to Sunday) for each week. The professor tracks the course participation weekly and will contact students who have fallen behind in course assignments. Course Policies

8 Academic Honesty At International University of Monaco, students are expected to demonstrate academic integrity by completing their own work, assignments and assessments. Effective planning and progress must be accomplished for students to be successful in their degree program of study. Submission of work from another person, whether it is from printed sources or someone other than the student and/or papers submitted without source citation can result in a failing grade or be reported to the campus Academic staff for appropriate sanctions or disciplinary actions that may lead to dismissal from the University. All students are expected to adhere to the standards set forth in the Student Code of Conduct and Statement on Academic Honesty. For IUM Online course work, please note that learning events are to be that of the student's own work, and group projects are collaborative efforts. Cheating Cheating shall be defined as: - Copying to any extent the work of another student - Intentionally assisting another student during an examination - Having access to material related to an examination during an examination - Possessing or having access to unauthorized copies of an examination - Departing from any stated examination conditions. Plagiarism Oxford Dictionary defines plagiarism as "the practice of taking someone else s work or ideas and passing them off as one s own Plagiarism involves: Submitting another person's work as one's own Submitting work from any source that is not properly acknowledged by footnote, bibliography, or reference within a paper Submitting work pieced together from phrases and/or sentences from various sources without acknowledgement Submitting work with another person's phrase(s) rearranged without acknowledgement Submitting work that uses any phrase, sentence, or stylistic mannerism without acknowledgement Omitting quotation marks from any directly quoted material Failure to use three dots (...) to indicate omission of one or more words Grading Scale

9 Grades are reported at the end of each term. Grade points are assigned to letter grades for each unit of course credit:. Quality of work Letter Percentage Grade Grade Points Points Outstanding performance, works shows superior command of the A % 4.0 subject Very good work showing understanding and mastery of all A 90 94% 3.7 concepts. Good work showing understanding and mastery of most B % 3.3 concepts. Fairly good work that shows an understanding of the main B 83 86% 3.0 concepts. Fairly good work showing understanding of several important B 80 82% 2.7 concepts. Uneven understanding of the concepts with occasional lack of C % 2.3 clarity Work that barely meets modest expectations for the class C 73 77% 2.0 Work that is below modest expectations for the class C 70 72% 1.7 Poor performance with lack of understanding of several D % 1.3 important concepts Work that is marginally above the minimum expectations for the D 63 66% 1.0 class Work that barely meets the minimum expectations for the class D 60 62% 0.7 Work does not meet the minimum expectations for the class F < 60% 0.0