Taught In English

There is no language prerequisite for courses at this language level.

BUSINESS ECONOMICS I

Objective of this Course:

The objective of this course is to introduce the nature of organizations and decision making to the student. An organization can be defined as a group of individuals who pursue a specific purpose in a coordinated way, although their interest for belonging to the organization may emerge from different motiviations. As a consequence, conflicts of interest are common in organizations. In addition, bounded rationality also may inhibit the consecution of the specific purpose in various ways. All of this has conseguences for decision making, and thus for outcome and performance of organizations. Using a series of cases, we are going to study in depth different situations that present particular problems of different types, such as pricing, production, sales and marketing, finance or personnel. Another point of interest is going to be how the nature of information and information problems, as well as authority and power, related to decision about centralization and decentralization. Finally, we are going to introduce the role of structural supports to decision making. Thus, at the end of this course the student should have comprehended that decision making requires an integrated view, not only taking into account multiple dimensions of the problem per se, but also multiple perceptions and motivations of the different decision makers.

INTRODUCTION
What are organizations?

RATIONALITY, BOUNDED RATIONALITY, GOALS, AND MOTIVATIONS
Problems of rationality in organizations
Individual vs. organizational goals
The importance of motivantion

DECISION MAKING IN ORGANIZATION
Problem definition
Generation of alternatives
Establishment of decision criteria
Evaluation of decision criteria
Evaluation of alternatives
Selection of alternatives
Design of action plans

TYPES OF DECISIONS
Pricing decisions. Internal, external, and strategic pricing.
Production decisions. To buy or to produce. The role of capacity.
Financial decisions.
Personnel decisions.
Marketing and sales decisions.
The evaluation of risk and uncertainty for decision making.

CENTRALIZING AND DECENTRALIZING DECISION MAKING
The importance of information.
Problems of information.
Authority and power.

STRUCTURAL SUPPORTS FOR DECISION MAKING
Organization structure.
Management systems.
Control systems.
Incentive systems.

CONCLUSION
Towards integrated decision making

Bibliography:

Milgrom, Paul and John Roberts, 1992. Economics, Organization and Management, Prentice-Hall International, Inc.

Morgan, Gareth, 1989. Creative Organization Theory: A Resourcebook, Sage Publications.

Morgan, Gareth, 1996. Images or Organization, Sage Publications