The Theory of the Firm and Its Applications in Management Research I (June 2009)

Faculty
Professor Nicolai Foss (www.nicolaifoss.com), Center for Strategic Management and Globalization, Copenhagen Business School and Professor Peter G. Klein (http://web.missouri.edu/~kleinp/), Contracting and Organizations Research Institute, University of Missouri.

Course Coordinator
Professor Nicolai Foss

Prerequisite/progression of the course

Basic knowledge of economics.

Aim of the course

To introduce key theories of economic organization-primarily agency theory and transaction cost economics-that have been strongly influential in management research, and to train students to use on these theories in their thesis work.

Course content, structure and teaching

The course discusses the role of the firm in management research; covers basic economic concepts that are fundamental to the theory of the firm such as incentives, transaction costs, and property rights; then discusses agency theory and transaction cost economics and applications to organizational design, governance, finance, and related issues.

PROGRAMME

22 June 2009

Time	Faculty	Title	Readings
09:00-12:00	Nicolai Foss	The theory of the firm: What is it? And how is it relevant?	Kreps (1997), Foss & Klein (2005), Foss & Klein (2009)
13:00-16:00	Peter G. Klein	The theory of the firm in the context of the New Institutional Economics	Coase (1992), Klein (2000), Bjørnskov and Foss (2008)

23 June 2009

Time	Faculty	Title	Readings
09:00-12:00	Nicolai Foss	The basic agency model and its uses	Hendrikse (2003, chapters 5 & 6), Foss, Foss & Klein (2007)
13:00-16:00	Peter G. Klein	Williamsonian transaction cost economics	Williamson (2002), Grossman and Hart (1986), Foss, Foss, Klein, and Klein (2007)

24 June 2009

Time	Faculty	Title	Readings
09:00-12:00	Nicolai Foss	TCE: Recent developments	Masten, Meehan, and Snyder (1991), Nickerson and Zenger (2004), Argyres and Mayer (2007)
13:00-16:00	Peter G. Klein	Extensions and empirical applications	Andrade, Mitchell, and Stafford (2001), Bhide (1990), Jensen and Murphy (1990), Kaplan (2008), Walsh (2009)

Teaching methods

Lectures and discussion.

Course literature

Andrade, Gregor, Mark Mitchell, and Erik Stafford. 2001. New Evidence and Perspectives on Mergers," Journal of Economic Perspectives: 103-120 .

Argyres, N. and K. Mayer. 2007. "Contract Design as a Firm Capability: An Integration of Learning and Transaction Cost Perspectives," Academy of Management Review, Issue 32, 1060-1077. Argyres_Mayer

Bhide, Amar. 1990. "Reversing Corporate Diversification," Journal of Applied Corporate Finance 3: 70-81.

Bjørnskov, Christian, and Nicolai J. Foss. 2008. "Economic Freedom and Entrepreneurial Activity: Some Cross-Country Evidence," Public Choice 134: 307-328.

Coase, Ronald H. 1992. "The Institutional Structure of Production," American Economic Review 82: 713-719. Coase

Foss, Kirsten, Nicolai Foss, and Peter G. Klein. 2007. "Original and Derived Judgment: An Entrepreneurial Theory of the Firm," Organization Studies 28: 1893-1912.

Foss, Nicolai and Peter G Klein. 2005. "Entrepreneurship and the Economic Theory of the Firm: Any Gains From Trade?," in Sharon A. Alvarez, Rajshree Agarwal and Olav Sorenson, eds. Handbook of Entrepreneurship Research: Interdisciplinary Perspectives. Springer .

Foss, Nicolai and Peter G. Klein. 2009. "Organizational Governance" in Raphael Wittek, Tom Snijders, and Victor Nee, eds., Handbook of Rational Choice Social Research. New York: Russell Sage Foundation .

Ghoshal, Sumantra, and Peter Moran. 1996. "Bad for Practice: A Critique of the Transaction Cost Theory," Academy of Management Review 21: 13-47. Ghoshal_Moran

Grossman, Sanford J., and Oliver D. Hart. 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy 94: 691-719. Grossman_Hart

Jensen, Michael C., and Kevin J. Murphy. 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy 98: 225-264 .

Hendrikse, George. 2003. Economics and Management of Organizations. London: McGraw-Hill. Chapter 5 and Chapter 6 .

Joskow, Paul L. 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review 77: 168-185. Joskow

Kaplan, Steven N. 2008."Are U.S. CEOs Overpaid?" Academy of Management Perspectives 22: 5-20.

Kaplan, Steven N. August 2008. "Are U.S. CEOs Overpaid? A Response to Bogle and Walsh," Academy of Management Perspectives 22: 28-34.kaplan-usCEOs

Klein, Peter G. 2000. "New Institutional Economics," in Boudewijn Bouckeart and Gerrit De Geest, eds., Encyclopedia of Law and Economics (Cheltenham, U.K.: Edward Elgar, 2000), pp. 456-89 .

Kreps, David. 1997. "Economics: The Current Position," Daedalus 126: 59-86.

Masten, Scott, James Meehan, and Edward Snyder. 1991."The Costs of Organization," Journal of Law, Economics, and Organization 7: 1-25.mastenmeehansnyder-cost of org

Nickerson, Jackson & Todd Zenger. 2004. "A Knowledge-based Theory of the Firm: The Problem Solving Perspective," Organization Science, 15: 617-632. Nickerson_Zenger

Silverman, Brian S., Jackson A. Nickerson, and John Freeman. 1997. "Profitability, Transactional Alignment, and Organizational Mortality in the U.S. Trucking Industry," Strategic Management Journal 18: 31-52. Silverman_Nickerson_Freeman

Walsh, James P. 2008. "CEO Compensation and the Responsibilities of the Business Scholar to Society," Academy of Management Perspectives 22: 26-33. Walsh_

Walsh, James P. 2009. "Are U.S. CEOs Overpaid: A Partial Response to Kaplan," Academy of Management Perspectives 23: 73-75. Walsh

Williamson, Oliver E. 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives 16: 171-195.

Zenger, Todd and William S. Hesterly. 1997. "The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Molecular Units," Organization Science 8: 209-222. Zenger_Hesterly

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PowerPoint presentations from the course:

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Foss: Theory of the Firm (22 June 2009)

Klein: Theory of the Firm (22 June 2009)

Foss: Theory of the Firm (23 June 2009)

Klein: Theory of the Firm (23 June 2009)

Foss: Theory of the Firm (24 June 2009)

Klein: Theory of the Firm (24 June 2009)

Enrolment

Please email a complete application form to kr.smg@cbs.dk. The form can be found in the box on the right side of the page.

Sidst opdateret af Kristine Olsen 26.06.2009