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2012/2013  KAN-BIO_GCC  Governance, Control and Contracts in BioBusiness

English Title
Governance, Control and Contracts in BioBusiness

Course information
Language English
Exam 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
  • Sof Thrane - Department of Operations Management
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 Category of the Course
  • Innovation and entrepreneurship
Last updated on 29-08-2012
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, analyse 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.
Prerequisite
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:
Type of test Written Exam
Marking scale 7-step scale
Second examiner Second internal examiner
Exam period Autumn Term and December/January
Aids Open Book, Written Aid is permitted
Duration 4 Hours
The form of this exam may be changed for the make-up exam. If the number of registered participants for the make-up exam warrants it , the make-up exam may most appropriately be held as an oral exam (20 minutes).
 
Course content

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 address these interdependent issues by teaching  key concepts and tools within each of three issues as well as approaches to handle their interdependencies.

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, cash flow analysis, and the relationship between management accounting and stakeholders such as venture capitalists, customers and suppliers.

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 corporate governance as well as specific issues related to the governance of start-ups and innovative enterprises. Agency problems in the modern corporations are considered, along with their governance solutions (i.e. board or directors, ownership structure; incentives, etc.). Applications are presented to issues in the monitoring and advisory roles of governance mechanisms at different stages of the firm life-cycle, 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.
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 29-08-2012