This long course (2-hour lecture, 2 -hour seminar and 1 office hour a week) explores the 'institutional economics' of the firm alongside the 'neoclassical theory' of firms and industries. The course examines:

• the ways in which different schools of thoughts are used in the analysis of particular types of firm (Trigg, et al. 1998; Simonetti, et al. 1998);
• the institutional theory, and an increasing interest in the role of norms and organisational culture in firms' decision making. - institutional theorists see the organisation of economic activity, including the distribution of information, knowledge and incentives between economic actors, as key to the efficiency of the industrial economy (Simonetti, et al. 1998; Hodgson 1988; Eggertsson 1990)
• the political debates centring on the limits to 'free market' shall be explored (Thompson et al. 1991), and the ways in which economic theory can be used to discuss issues that arise in the management of the firm and national competitiveness;
• the employment of labour within the firm and systems of controls used (Simonetti, et al. 1998; Trigg, et al., 1998);
• the moral issues in business; themes include corporate responsibilities, workers’ rights, consumers’ safeguards and environmental protection (Shaw and Barry 1998; Trigg, et al. 1998).

Malcolm Rutherford, 1994, Institutions in Economics, Cambridge University Press, New York.

WEEK (2-hour lecture and 2-hour seminar)

1. Introduction: aims of the course, and a preliminary investigation of the different theoretical approaches to analysing the firm (Simonetti et al. Ch1; Trigg et al. Ch2; Langlois Ch1; Hodgson Ch1; Eggertsson Ch1).

Seminar: David Audretsch, Patrick Houweling and Roy Thurik, 1998, ‘ Industry Evolution: Diversity, Selection and the Role of Learning’, mimeo. A comparison between neo-classical and institutional theories of the firm.

2. Contracts, information and firms’ behaviour: how economic theory can analyse market behaviour through a ‘contracting lens’, and the ways in which contracting can overcome market failures (Simonetti et al. Ch2; Hodgson Ch9; Eggertsson Chs6-7; Langlois Ch8; Kasper and Streit Ch9).

Seminar: Kathryn Hendley, Peter Murrell and Randi Ryterman, 19??, ‘Law, Relationships and Private Enforcement: Transactional Strategies of Russian Enterprises’, mimeo. An article on uncertainty, norms, trust and networks.

3. Economic Methodology: an evaluation of different methodologies and metaphors in economics (Lawson various articles; Hodgson Chs2-3; Hodgson, 1993, Ch1; Simonetti et al. Chs3-4)

Seminar: Tony Lawson, ‘A Realist Theory For Economics’, in a collection of articles on methodology. A comparison between empirical realism and critical realism.

4. Organisation Innovations: The diffusion and evolution of new forms of organisation (just-in-time) and implication for labour and economic development. (Sayer and Walker Chs3-5; Langlois Ch9; Thompson et al. Chs20-23).

Seminar: Edward Lorenz, 1989, ‘Neither friends nor strangers: informal networks of subcontracting in French industry’, in Thompson et al. (eds.), Markets, Hierarchies and Networks. An article on industrial organisation.

5. Privatisation and regulation: recent organisational reforms can improve economic performance; examine the ‘property rights’ analysis of the firm (Simonetti et al 6; Trigg et al. Ch8; Eggertsson Ch5; Thompson et al. Ch13).

Seminar: Saul Estrin, 1996, ‘Privatisation in Central and Eastern Europe’, mimeo. An article on the East European and Russian privatisation experience.

6. Labour market and control: neo-classical, broader and new institutional approaches to the firm to analyse employment relations (Simonetti et al. Chs7-8; Trigg et al. Chs3-4; Hodgson Ch8; Thompson et al. Ch18).

Seminar: V. Gerchikov, et al. 19??, ‘Labour Relations at Russian Industrial Enterprises’, mimeo. The nature of employment relations since Perestroika.

7. Test
8. Technological change and evolutionary theories: the significance and models of innovations, and the theories of economic change (Simonetti et al. Chs9-10; Rutherford Ch5; Langlois Ch6; Hodgson,1993, Chs1&10).

Seminar: Alice Lam, 19??, ‘Tacit Knowledge, Organisational Learning and Innovation: A Societal Perspective’, mimeo. The importance of tacit knowledge for competitiveness and innovation.

9. Science and Technology Policy and Industrial and Competition Policy: the creation of effective technology support systems, and government regulation of industries (Simonetti et al. Chs11-12; Rutherford Ch6; Hodgson Ch11; Thompson et al. Ch19).

Seminar: Luc Soete and Bas ter Weel, 19??, ‘Schumpeter and the Knowledge-Based Economy: On technology and competition policy’, mimeo. An article on technology and competition policies.

10. Moral Issues: corporations – views on corporate social responsibilities and codes of ethics in the business world (Shaw and Barry Ch5; Trigg et al. Ch9).

Seminar: Kenneth Arrow, 1973, ‘Social Responsibility and Economic Efficiency’, and Paul Camenisch, 1981, ‘Business Ethics: On getting to the heart of the matter’ in Shaw and Barry’s Moral Issues in Business. Articles on corporate responsibilities and obligations.

11. Moral Issues: the workplace – civil liberties, rights and moral dignity of employees and proper working conditions (Shaw and Barry Chs6-7; Trigg et al. Ch4).

Seminar: Joseph DesJardins and Ronald Duska, 1996, ‘Drug Testing in Employment’, and John McCall, 1996, ‘Participation in Employment’ in Shaw and Barry’s Moral Issues in Business. Articles on workers’ liberties and rights.

12. Moral Issues: consumer and nature – business responsibilities to consumers and the environment, and the role of legislation (Shaw and Barry Chs10-11; Trigg et al. Ch9; Hodgson Ch11).

One essay of 2-3000 words

End of semester examination and mid-semester test (written papers)

Weekly seminar presentations