Module Identifier EC31410  
Academic Year 2004/2005  
Co-ordinator Mr Dennis A Thomas  
Semester Semester 1  
Pre-Requisite EC36420 Business and Management (Single and Major) degree schemes only  
Mutually Exclusive EC31920  
Course delivery Lecture   10 Hours  
  Seminars / Tutorials   5 Hours  
Assessment TypeAssessment Length/DetailsProportion
Semester Exam1.5 Hours  100%
Supplementary Exam1.5 Hours  100%

Learning outcomes

On successful completion of this module students should be able to:
- understand the role of markets and firms as alterntive coordinating mechanisms
- understand transaction cost economics
- understand the determination of firm boundaries with respect to diversified and vertically integrated activities
- understand internal organisational forms
- understand the implications of the separation of the ownership and management (control) functions
- understand principal-agent theory and incentive contracts


The module investigates economic explanations of the nature of firms, their organisational form and the scope of their activities. It employs transaction cost economizing to explain the circumstances in which the firm is superior to other forms of organisation, and extends the analysis to examine firm growth and development and the determination of firm boundaries. The module also examines the internal organisation of firms, with particular regard to decision-making and the control problems that may occur, together with the implications of the separation of ownership from managerial control.

Brief description

This third year module is available only to Business and Management students and is delivered by lecture and tutorial classes and assessed by final examination. It treats the question of economic coordination and the nature and scope of firms activities.


Examine and co-ordination: firms, markets and organisations
Firm boundaries: vertical integration
Firm boundaries: diversification
Internal organisation
ownership and control

Transferable skills

Apart from attaining and improving subject specific skills the module enables students to develop and enhance a variety of transferable skills. Attendance at lectures requires students to listen and digest material and take structured notes. Participation in tutorials involves prior preparation together with communication and presentation during class. The study sheets assist students in organising their thoughts, reading and preparation of notes and self-test accumulated knowledge as they progress through the module. All aspects of the module necessarily involve time management skills.

The final examination requires rigorous preparation and assimulation of material prior to structured thought and essay writing within a fixed time period.

Reading Lists

Douma S and Schreuder H (1998) Economic Approaches to Organisations 2nd. Prentice Hall
Milgrom P and Roberts J (1992) Economics, Organisation and Management Prentice Hall International
Besanko D, Dranove D and Shanley M (2000) Economics of Strategy 2nd edition. Wiley


This module is at CQFW Level 6