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2014/2015  KAN-CBIOU1003U  Governance, Control and Contracts in BioBusiness

English Title
Governance, Control and Contracts in BioBusiness

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Autumn
Time Table Please see course schedule at e-Campus
Max. participants 10
Study board
Study Board for MSc. in Business Administration and Bioentrepreneurship
Course coordinator
  • Finn Valentin - Department of Innovation and Organizational Economics (INO)
  • Sof Thrane - Department of Operations Management (OM)
Several factors necessitate size restrictions for this course to max. 10 students.

CBS students have to apply through the official CBS course enrollment and credit students must apply by filling out an application form found at www.cbs.dk.
Main academic disciplines
  • Innovation and entrepreneurship
Last updated on 26-03-2014
Learning objectives
The course enables students to analyze how their internal operations and external relationships can be managed, governed and made subject to contracting in an environment characterized by high uncertainty and where the development of the firm is dependent on both creative processes and the ability to handle relationships to stakeholders such as venture capitalists, suppliers and customers. Students learn to design appropriate solutions for controlling innovation and product development and to identify, analyze and account for basic legal problems in contracts. They become capable at identifying opportunities and pitfalls of different contractual, control and governance mechanisms, to understand how they change over the life-cycle of the firm, and to use the acquired knowledge to build and successfully develop innovative enterprises.
To achieve 12, as the course’s final grade, the student must perform the following:
• Apply relevant theories of contracting, governance and control to managerial problems in both entrepreneurial and established firms in the biotech/pharma sector.
• Analyze how firms’ internal operations and external relationships can be managed, governed and made subject to contracting.
• Discuss appropriate structures for controlling, contracting and governing innovation and product development.
Course prerequisites
Students must have completed the first year in one of the following cand.merc. programmes: FIR, FSM, ASC, AEF, IMM, IBS, MIB.
Examination
Governance, Control and Contracts in BioBusiness:
Exam ECTS 7,5
Examination form Oral Exam
Individual or group exam Individual
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time No preparation
Grading scale 7-step scale
Examiner(s) Internal examiner and second internal examiner
Exam period Autumn Term and December/January
Aids allowed to bring to the exam Closed Book
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content and structure

Bio ventures rely heavily on strategic relationships to external stakeholders such as large costumer organizations (e.g. global pharmaceutical firms), partners for out-sourced R&D, suppliers of venture capital etc. At the same time their internal operations (largely research) are difficult to manage and control by conventional approaches. These characteristic tie together a set of closely related issues in governance, control and contracting. This course addresses these interdependent issues by teaching key concepts and tools within each of three issues as well as their interdependencies are discussed.
Topics in control focus on key issues of decision making and control for start-ups. Course components include the development of management accounting, and control in the lifecycle of a start-up, control and incentives in product development processes, cost accounting and budgeting.
The legal aspects of the course focus on basic contract principles, different types of agreement and contract terms typically found in joint venture and development agreements. Classes also cover strategies and processes of negotiation.
Topics in governance address general issues in contract and corporate governance. Agency problems in the modern corporations are considered, along with their governance solutions (i.e. board or directors, ownership structure; incentives, etc.) with particular emphasis on the governance structure of entrepreneurial, i.e. young and rapidly expanding firms.
 

Teaching methods
The course will mix lectures with casework and simulations. Guest faculty from industry will frequently appear in co‐teaching with academic faculty.
Further Information
Course teachers: Sof Thrane (lector), Aleksandra Gregorič(lector), Bjørn Lundqvist (lector) and guest teachers from industry.
Expected literature

Recommended literature:

  • Davila, A,  & Foster, G(2007) Management Control Systems in Early-Stage Startup Companies The accounting review, Vol. 82, No. 4pp. 907–937
  • Davila, A (2003)  Short-term economic incentives in new product development, Research Policy 32 p. 1397–1420
  • Jensen, M. C., Meckling, W. H. (1976), “Theory of the firm: managerial behavior, agency costs, and ownership structure”, Journal of Financial Economics, 3, 305¬-360 (Sections 1 and 2 only).
  • Shleifer, A. and Vishny, R. (1997), “A Survey of Corporate Governance”, Journal of Finance, 52 (2), pp. 737-783.
  • Larcker, D. and Tayan, B. (2008), “Models of Corporate Governance: Who’s the fairest of them all? “, CASE CG-11, Rock Center for Corporate Governance, 33p.
  • Filatotchev, I., Toms, S., and Wright, M. (2006), “The firm’s strategic dynamics and corporate life-cycle”, International Journal of Managerial Finance, Vol. 2(4), pp. 256-279
  • O’Sullivan, Mary (2000), “The innovative enterprise and corporate governance”, Cambridge Journal of Economics, 24, 393-416
  • Rajan, R.G., and Zingales, L. (2000), “The Governance of the New Enterprise”, in X. Vives (ed.) Corporate Governance, Theoretical and Empirical Perspectives, Cambridge University Press, 42 pages.
Last updated on 26-03-2014