Organizational Economics
This syllabus is only as an informative orientation for new students.
Every academic year, professors will give to the students the updated syllabus with the exact contents and evaluation system.
Pedro Ortín (UAB)
pere.ortin@uab.cat
Eduardo Rodes (UAB)
eduardo.rodes@uab.cat
Objectives
The course goes around one simple question, when is convenient to delegate a certain decision? The delegation of decision making is the basis for employment relations, the management of those employees and the design of such organizations. This course introduces the micro economic foundations for the delegation of making a concrete decision and extends their main implications for the organizational architecture of the firms. The course has two main purposes:
- Present at an introductory level and in a systematic way, the main elements to consider at the moment of delegate (or centralize) a given decision. Further developments and extensions in this area can be found at the following book:The Handbook of Organizational Economics. Edited by Gibbons and Roberts. Princeton University Press, 2013
- Provide instruments to the students in order to quantify the profits and costs of the decision making delegation/centralization.
Methodology
The course is based on 30 hours of teaching which are structured in sessions of 2-3 hours. In each topic the main concepts will be introduced in class. In all the cases the basic concepts and instruments for their quantification will be introduced during the classes. For each concept practical cases with numerical exercises will be provided jointly with recommended lectures. Mostly of the powerpoint presentations will appear in the MMOBE e-learning. Below is the list of the course contents.
Course contents
Topic 1. Introduction: The firm as a set of sequential decisions (3 hours of class)
The firms as productive activities. Main decisions: product design.
Sequential decisions. Elements: Strategic vs tactic decisions. Elements: Vision, Model Business. Solution: Backward induction. Bayes’ theorem.
Topic 2. The delegation of tactic decisions (3 hours of class)
Why strategic decisions are not delegated? The cost-profit analysis. The profits of delegating decisions. The cost of delegation of decisions.
Topic 3. Knowledge (3 hours of class)
What is knowledge? The transmission of knowledge. The human capital theory: wages and knowledge. Implications for management: Jobs positions, their valuation and wage setting.
Topic 4. Coordination (6 hours of class)
What is coordination? When is needed? Complementarities. The value of coordination. The mechanism of coordination: communication. Mechanisms of communication and their costs.
Topic 5. Information (6 hours of class)
Kinds of information. The quality of the information. The value of information. Sources of information and their credibility. Implications for the design of systems of information.
Topic 6. Motivation (6 hours)
Conflict of interest. Extrinsic vs. intrinsic motivation. The contracts as a motivation device. The main elements of the contract and their optimal design.
Evaluation
- 60% Participation (Class participation, exercises, quizzes, readings...)
- 40% Exam
Specialized Journals to advance in these topics:
Management Science
Journal of Law Economics and Organization
Journal of Law and Economics
Journal of Labor Economics
Journal of Economic Behavior & Organization
Journal of Economics and Management Strategy
Books for teaching these topics for undergraduate courses:
Brickley, J.; Clifford, W.S; Zimmerman, J. (2015) Managerial Economics & Organizational Architecture. Sixth Edition. Mc Graw Hill Education.
Jost, P.J. (2014) The economics of motivation and organization. An introduction. Edward Elgar Publishing Inc. Northampton, Massachusetts, USA.
