Insegnamento a.a. 2015-2016



Department of Economics

Course taught in English

Go to class group/s: 31
CLEAM (6 credits - II sem. - OP  |  SECS-P/01) - CLEF (6 credits - II sem. - OP  |  SECS-P/01) - BESS-CLES (6 credits - II sem. - OP  |  SECS-P/01) - BIEMF (6 credits - II sem. - OP  |  SECS-P/01) - BIEF (6 credits - II sem. - OBCUR  |  SECS-P/01)
Course Director:

Classes: 31 (II sem.)

Course Objectives

The core question addressed by the course is how firms should be organized to achieve their performance objectives. The first part of the course will study the problem of organization design in a context in which the firm is isolated from its competitive. The course will make use of microeconomic tools to understand how to create the right incentives within an organization so as to generate more profits or create more value. This issue is not only important for the design of compensation schemes, but also for broader issues, such as how to structure divisions in a company (whether to centralize or decentralize), or how to structure relationships with external suppliers and distributors. The second part of the course will take into account the way firms behave in their competitive environment. When considering organizational changes, one needs to account for fact that market rivals will likely respond to any organizational changes that one makes. These strategic effects need to be factored into the overall cost/benefit comparison regarding organizational changes. The course will study the way internal organization affects product market competition. The course will also explore which factors affect the optimal scope/size of organization, thereby examining the determinants of a firm’s boundaries and covering topics such as horizontal and vertical mergers, outsourcing and diversification.

Course Content Summary

  • The Power of Incentives.
  • Incentives and Organizations.
  • Motivation and Group Pay.
  • Externalities and Transfer Pricing.
  • The Firm and its Competitive Environment.
  • Strategic Commitment.
  • Horizontal Mergers.
  • Vertical Mergers.

Detailed Description of Assessment Methods

Students have two options. They may take the exam in two written parts: 1st partial exam and 2nd partial exam, and each part accounts for 50% of the grade (students must pass both partial exams in order to receive a final grade). Alternatively, they may take a general written exam covering the entire course material.


The course will be based on readings from different sources. The reading list will be posted on the Agenda You&B. The following textbooks are used throughout the course:
  • J. BRICKLEY , C. SMITH ,J. ZIMMERMAN ,“Managerial Economics and Organization Architecture”, McGrawHill/Irwin, 2008, 5th edition.
  • D. BESANKO, D. DRANOVE,S. SCHAEFER  et all ,“Economics of Strategy”,  Wiley, 2012, 6th edition.
Exam textbooks & Online Articles (check availability at the Library)
Last change 25/06/2015 12:20