Economics of Organizations

Code:

2M3E01

Acronym:

EO

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2023/2024 - 1S

Active?	Yes
Course/CS Responsible:	Master in Economics of Business and Strategy

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	8	Official Syllabus after 2021-2022	2	-	6	42	162
MEEE	56	Syllabus	1	-	6	42	162

Teaching language

English

Objectives

The goal of this course is to introduce the application of the economic logic and the methods of Economics to the study and understanding of the nature of organizations, their internal structure and processes and the behaviour of individuals and groups on their inside. The role of managers inside organizations is also addressed as is the relationship between organizational design and market structure and strategy. 

The main aim is to help students understand the economic analysis of organizations, why firms exist, and how firms organize and co-ordinate their activities in order to stay competitive.

Learning outcomes and competences

At the end of the course, students are expected to:

1. have firm knowledge of the main Economic theories relevant to the study and understanding of present-day organizations and understand how and why different types of organizations operating in different economic and social environments are organized differently;

2. be able to think in economic terms to critiquely evaluate the internal structure of real-life organizations and, if justifiable, make theoretically grounded specific proposals of organizational re-design and convincingly defend them.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Knowledge of microeconomics at the bachelor level.

Program

1. The Economic Analysis of Organization
    1.1 Firms vs Markets
    1.2. The nature and boundaries of firms
    1.3. Other types of organisations (not-for profit and hybrid organisations)
2. Organisation and Job Design
    2.1. Incentives, conflicts and contracts
    2.2. Allocation of decision rights
3. Incentives
    3.1. Incentive pay
    3.2. Incentive compensation reward system
    3.3. Individual performance evaluation
4. Applications of Organisational Economics
    4.1. Leadership
    4.2. EDI policies and discrimination

Mandatory literature

James Brickley, Clifford Smith, Jerold Zimmerman; Managerial Economics and Organizational Architecture, 6e, McGraw-Hill Education, 2015. ISBN: 978-0073523149

Complementary Bibliography

Paul R. Milgrom; Economics, organization and management. ISBN: 0-13-224650-3

Comments from the literature

The recommended reading list will be updated soon.

Teaching methods and learning activities

Lectures, case-studies, invited talks, student presentations.

Software

n.a.

keywords

Social sciences > Economics > Microeconomics
Social sciences > Economics

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	40,00
Trabalho prático ou de projeto	30,00
Trabalho escrito	30,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	90,00
Frequência das aulas	42,00
Trabalho escrito	30,00
Total:	162,00

Eligibility for exams

Students are expected to attend a minimum of 75% of the classes.

Calculation formula of final grade

The three components of evaluation are: Test (40%), work group (30%), individual work (30%)

Weighted average of the grade obtained in each component, subject to a minimum grade of 8 points in the test and 10 points in each of the remaining components

Examinations or Special Assignments

tbd

Internship work/project

n.a.

Special assessment (TE, DA, ...)

tbd

Classification improvement

tbd

Observations

n.a.