Autumn semester 

Unit(s) of Assessment 

Weighting towards Module Mark (%)

Examination 

75% 

Coursework 

25% 

Qualifying Condition(s): 

The module examines the complex nature and performance of firms in modern economies, analysing how firms organise and use resources to compete in various market environments. 

The module aims are to help students understand how economic analysis can be used to illuminate decision-making within firms and how these decisions interact with the firm’s environment, providing the information available to the firm’s managers/staff to influence strategy, tactics and performance. 

By the end of the module students will be able to: 
·              discuss the difference between the neoclassical theory of the firm, Coasian theory, managerial theories and behavioural theories of the firm. 
·              discuss how the concepts of transactions costs, and asset specificity may affect the boundaries of the firm. 
·              assess whether the market for corporate control is able to control firms' management. 
·              evaluate alternative approaches to competitive advantage: environmental ‘fit’ and resource based ‘stretch’ 
·              show how economic theory outcomes may differ from business practice in respect of product, promotion and pricing strategies 
·              discuss the role of innovation in creating and sustaining competitive advantage 
·              explain the concepts of monopsony and efficiency wages. 
·              describe and assess competiton policies used in the UK

Indicative topics: 
·              Overview: alternative theories of the firm: 
·              The neoclassical theory of the firm: costs, revenues and profits; contestability and entry barriers. 
·              Managerial discretion and non-profit maximising behaviour; the principal agent issue, stakeholder theory and business ethics 
·              Transaction costs and the horizontal and vertical boundaries of the firm 
·              Joint ventures, franchising, partnership alliances, mergers and acquisitions 
·              The analysis of firm behaviour using game theory 
·              Competitive advantage: Porter’s generic strategies, environmental ‘fit’ and resource based theory 
·              Innovation 
·              Human resource policies 
·              Competition policy 

A series of one to two-hour lectures and smaller tutorials group discussions, case studies and exercises.  The tutorials will be used to assess levels of understanding while the mini-case studies will challenge students’ ability to apply the concepts to real business situations.
The coursework will be composed of two in-course activities.  The first will provide students with a list of  short answer questions typical of those posed in Part A of the examination.  Three of these will be presented to the students in the form of a mock exam. This will provide students with formative assessment of their understanding of basic concepts and models, indicated in the learning outcomes and module content.  The second in-course activity will mirror Part B of the examination.  Once again students will be given a number of in-depth questions to research from which two will be chosen in the form of a mock exam.  These questions will require a more evaluative approach to the module content and satisfy the higher level elements of the learning outcomes. Both of these courseworks have the benefits of consolidating knowledge and allowing the student to plan how they will deal with the demands of the final examination. 

Essential text 
P. Cashian Economics, Strategy and the Firm (Palgrave-Macmillan 2007) 
Recommended reading: 
Rickard, S. The Economics of Organisations and Strategy.  London : McGraw-Hill (2006) 
Roberts, J. The Modern Firm: organisational design for performance and growth. Oxford University Press (2004) 
F Brassington and S Pettitt , Principles of Marketing 4^th Edition Prentice Hall (2006)Background reading: 
M Moschandreas, Business Economics, 2^nd edition Thomson Learning, London (2000). R Perman and J Scouller, Business Economics, Oxford University Press (1999)ISBN 0-19-877524-5 
D Besanko, D Dranove and M Shanley, Economics of Strategy, 2^nd edition John Wiley & Sons Inc., New York, (2000).
S Douma and H Schreuder, Economic Approaches to Organisations 3^rd Edition, Prentice Hall 2002 
G Johnson, K Scholes, and R Whittington, Exploring Corporate Strategy 8^th Edition Prentice Hall 2008 
R M S Wilson , Strategic Marketing Management, Butterworth Heinemann (2005) 
J Kay, Foundations of Corporate Success Oxford 1993 
www.brint.com 
Resource for Business, Information Technology, Finance & Risk Management 
www.open.ac.uk 
Free learning resources from The Open University 
www.businessballs.com/changemanagement.htm 
Principles, process, tips and change theories.