Module Identifier EC31920  
Academic Year 2006/2007  
Co-ordinator Mr Dennis A Thomas  
Semester Semester 1  
Pre-Requisite EC36420  
Mutually Exclusive EC31410  
Course delivery Lecture   20 Hours.  
  Seminars / Tutorials   6 Hours.  
Assessment TypeAssessment Length/DetailsProportion
Semester Exam2 Hours  75%
Semester Assessment 1500 word essay25%
Supplementary Exam as stipulated in module outline  100%

Learning outcomes

on completing this module students will have gained an understanding of the following topics:

- the role of markets and firms as alternative coordinating mechanisms
- transaction cost economics
- the determination of firm boundaries with respect to diversified and vertically integrated activities
- internal organisational forms
- the implications of the separation of the ownership and management (control) functions
- principal-agent theory and incentive contracts
- the form, implications and limitations of the structure-conduct-performance paradigm
- the relationship between, and evidence regarding, profitability and market structure
- the purpose, design and implementation of competition policy
- innovation and its promotion


The module is divided into two parts. The first section investigates economic explanations of the nature of firms and the scope of their activities. It also examines the internal organisation of firms, with particular regard to decision-making and the control problems that may occur, together with the implictions of the separation of ownership from managerial control. The second section focuses on industry and market structures, and examines the relationship between structural characteristics and firm behaviour, and various aspects of firm and industry performance. It also examines the form and purpose of competition policy and of policies to promote technological change.

Brief description

This third year module is delivered by lectures and tutorial classes and assessed by coursework essay and final examination. It treats the nature and scope of firms activities and various issues relating to industrial structure and policy.


Section A
1. Economic Co-ordination: Firms, Markets and Organisations
2. Firm Boundaries: Vertical Integration
3. Firm Boundaries: Diversification
4. Internal Organisation
5. Ownership and Control

Section B
6. Structure, Conduct and Performance
7. Profitability and Market Structure
8. Competition Policy
9. Innovation: Theory and Policy

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 coursework assignment requires students to display and develop preparation, research, writing and referencing abilities within set deadlines. The final examination requires rigorous preparation and assimulation of material prior to structured thought and essay writing within a fixed time period.

Reading Lists

** Recommended Text
Besanko, D, Dranove, D and Shanley, M (2000) Economics of Strategy 2nd edition. Wiley
Carlton, D W and Perloff, J M (2000) Modern Industrial Organization, 3rd edition (4th edition 2004). Addison-Wesley
Lipczynski, J, Wilson, J and Goodard, J (2005) Industrial Organization: Competition, Strategy, Policy Prentice Hall
** Supplementary Text
Clarke, R and McGuinness, T (eds) (1987) The Economics of the Firm, Blackwell
Clarke, Roger (1985) Industrial Economics Blackwell 0631198466
Davies, S, Lyons, B, Dixon, H and Geroski, P (1988) Economics of Industrial Organisation, Longman
Douma, S and Schreuder, H. (2002) Economic Approaches to Organizations, 3rd edition. Prentice Hall
Hay, D A and Morris, D J (1991) Industrial Economics and Organization: Theory and Evidence 2nd edition. Oxford University Press
Martin, S (2002) Advanced Industrial Economics, 2nd edition. Blackwell
Milgrom, P and Roberts J, (1992) Economics, Organization and Management Prentice Hall
Rickard, S (2006) The Economics of Organizations and Strategy McGraw Hall


This module is at CQFW Level 6