Economics of Organisation

Module code: EC7071

The economic prosperity of a country depends on the flourishing of its business sector.  Firms create value for customers, develop knowledge of technologies, and offer a source of income to a labour force.  For policymakers and business leaders, it is essential to understand what makes firms thrive or fail.  The economic environment determines how firms organise and, at the same time, firms define their internal economic environment.

This module explores the organisation of economic activities within firms.  Using both economic theory and empirical evidence, you will explore how the economic environment shapes the organisational characteristics of firms.

How do firms make optimal production decisions?  Why do firms decide to merge?  How do firms decide between buying and making an input to produce?  how does the ownership structure affect firms' development?  How do firms use work incentives?  How do firms organise the division of labour?  These are typical questions that you should be able to discuss at the end of the module.

Topics covered

• Production decisions
• Vertical integration
• Ownership structure
• Work incentives
• Hierarchies