Economic Analysis & Policy Group

Business success depends upon strategy, structure, and incentives. The focus here is on using insights from economics to develop structure, tactics, and incentives to achieve the firm's goals. Competitive advantage is achieved through the management of the firm’s resources, as well as those of upstream suppliers, network and alliance partners, and downstream distributors. We develop a framework for analyzing organizational architecture, focusing on the allocation of decision rights, the measurement of performance, and the design of incentives. We focus on managing the vertical chain of upstream suppliers and downstream distributors, including the fundamental make or buy decisions that determine the limits of the firm. Our discussion links the competitive landscape to the firm’s external and internal strategic decisions. We also examine techniques for dealing with informational asymmetries. A major focus of this course is the design and operation of incentive and performance management systems both within the firm and in external contracts.

Competitive and Corporate Strategy is a course in management. It is designed to acquaint the student with delineation of business policy by the firm, and the development and execution of a business strategy that will allow the firm to achieve its goals and objectives. The pursuit of these goals and objectives usually occurs within a competitive context, in which other rival organizations often seek similar if not the same ends (e.g., market share, profits, control of scarce resources, etc.). Accordingly, the essential drama of the marketplace is how one firm attempts to "win" vis-a-vis its rivals-- that is, how it develops and implements a competitive strategy.

The basic perspective of the course will be that of the "general manager" of the firm, or that person charged with overall responsibility for competitive performance. We shall apply the concepts of the course to firms that compete in single businesses as well as multiple lines of activity, to firms that compete in domestic markets as well as international venues, and to firms that engage in production sector activity as well as the service sector of the economy. Finally, while this course is not specifically concerned with high-technology markets, it will make reference to this sector, as well as more mature and traditional industries.  In each of these settings, we will explore how the general manager must consistently align the organization's strategy with its structure and internal processes if success is to be achieved.

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