The module applies economic ideas to examine the organisational design of firms and how this design interacts with their environment and their competitive strategies. Although the module will adopt several perspectives, the primary perspective is that of incentive theory within the economic analysis of decision making. The first half of the module concentrates on the internal workings of the firm, including incentive pay, monitoring, executive compensation and organisational structure. The second part explores how a firm chooses where to set the boundary between internal transactions and market-based relationships. This leads to discuss issues of (related and unrelated) diversification, vertical integration and suppliers' management.

The main goal of this module is to provide the student with an appreciation of the economic principles that determine the relative performance of different organisational arrangements. These principles are then applied to provide insights into the economic aspects of decisions that confront the managers of private firms or public organisations. A number of case studies of actual organisations will be used to explore the ways in which economic ideas can illuminate (a) the forces that guide decisions (b) the interactions among decision makers, and (c) the pattern of outcomes that are likely to be observed. At the completion of the module students will have learned to apply economic analysis to address issues involving the nature of organisational decision-making. This involves: (i) the ability to sort through a complex managerial situation and identify the crucial facts and issues, (ii) identifying the economic concepts that can help address these crucial issues, (iii) evaluating actual managerial decisions, (iv) converting the theoretical insights provided by the economic literature into recommendations for managerial decisions.

The module provides students with the following employability skills. Academic skills are enhanced through essay-writing, mathematical problem-solving and the use of ICT equipment. Students are encouraged to carry out research and information gathering for term papers and as background reading. External awareness, and in particular knowledge of work and organisational culture, is promoted through real world case studies.