Subject Name                         : Economics of Strategy and Organization

Course Code                           : ESGM 2000

Instructor                                 : Dr. Nandita Mishra and Prof. Rudra Chatterjee

Academic Year                       : 2014-15

Trimester                                 : V

Duration                                   : 15th September – 13th December, 2014

Sessions                                  : 20 sessions of 1.5 hours duration each

Credit Points                           : 3 credit course

 

 

1.      Course Description and Objectives

Economics of Strategic Behavior and Organization is a course designed to reinforce students’ abilities to apply concepts of economics and game theory to practical problem solving in management. The application of economic insights to specific situations often requires clarity of strategy. Economics can never fully address the process by which choices are translated into actions and outcomes. The process of managing internal organization is often fundamental to their success. The emphasis of this course is in understanding the complexity that individuals and firms face.

It will focus on questions of:

(1) Entry

(2) Impact of global and local competition

(3) Sources of competitive advantage (supply, demand and economies of scale)

(4) managing competitive interactions (cooperation and preemption)

(5) Financial implications of strategic economics applied to instances of M&A and Valuation

(6) Economics of Organization

2.      Pedagogy

  • Class room teaching
  • Case discussions
  • Class participation

3.      Readings

a.      Textbook

Competition Demystified (CD) by Bruce Greenwald and Judd Kahn.

b.      Reference & Additional Readings

Economics of Strategy by D.Besankao, D Dranove, M Shanley and S. Schaefer

4.      Evaluation

Mid Term Examination : Marks 100 (20%) Nos. One
End Term Examination : Marks 100 (40%) Nos. One
Quiz : Marks 20 (20%) Nos. Two
Individual Short Assignments : Marks 50 (20%) Nos. One

5.      Attendance Policy

100 % attendance is compulsory for the course. For details of attendance related to eligibility for examinations and grades, refer to handbook of information for students.

6.      Contact Details of Instructor

7.      Detailed Session Plan

Class Subject Details
1 & 2

NM

 Primer: Economic Concepts for Strategy Concepts of Economics and Linking it with Strategy. Lecture/ discussions/ Caselets
3 & 4

RC

 Introduction to Competetive Strategy Lecture on sources of competitive advantage:

Class 1: Cost (supply), demand

Class 2: Economies of scale and scope

CD Chapter 1-3
5 & 6

RC

 Sources of Competitive Advantage Case: Airborne Express 9-798-070

CD Chapter 4
7 & 8

RC

 Sustaining Competetive Advantage CD Chapter 7

Case: The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire? 9-709-462
9 & 10

NM

 Horizontal and Vertical Integration Lecture/ discussions/ Case
11 & 12

RC

 Limits of profitable growth – case for location Case: Wal-Mart  in 2003  (CD – Chapter 5)
13 & 14

RC

 Limits of profitable growth – economies of niche Case: Airbus versus Boeing:

(A) Turbulent Skies

(B) Storm Intensifies
15 & 16

RC

 Cooperation CD Chapters 14-17
17 & 18

RC

 Competition Decision Making Phillip Morris – Marlboro Friday (A)
19 & 20

NM

 Understanding Pay and Performance Lecture/ Discussion