English   Danish

2021/2022  BA-BHAAV6095U  Economics and the Design of Organizations

English Title
Economics and the Design of Organizations

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Spring, Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 40
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Tamas Vamosi - Department of Operations Management (OM)
Main academic disciplines
  • Organisation
  • Organisational behaviour
  • Economics
Teaching methods
  • Blended learning
Last updated on 26-08-2021

Relevant links

Learning objectives
  • Be able to describe and apply the theories and models presented during the course about Organizational Economics
  • Be able to discuss the theories and models presented in the course, their opportunities and limitations, and argue in what way and to what extent these theories and models draw on economic theory.
  • Be able to apply the models and theories presented in the course to specific organizational problems.
  • Be able to argue for the choice of specific theories and models regarding how to use these in action/practice.
  • Be able to discuss and perspective on the consequences of using the theories compared to other organizational approaches.
  • Be able to view the presented models and theories in the light of sustainable development.
Course prerequisites
A basic course in Managerial Economics is required.
Economics and the Design of Organizations:
Exam ECTS 7,5
Examination form Oral exam
Individual or group exam Individual exam
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time With the listed preparation time: 15 Minutes
Grading scale 7-point grading scale
Examiner(s) Internal examiner and second internal examiner
Exam period Spring
Aids Closed book
The student is only allowed to bring simple writing and drawing utensils (non-digital) to the preparation room. Students are not allowed to communicate with others during the preparation time.
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

The students will be examined in 15 pre-known exam questions. The 15 exam questions will be presented at the last lesson before the exam by the teacher and afterwards be available at Canvas. During the preparation, a disposition is allowed to be made and used during the examination.



Course content, structure and pedagogical approach

The purpose of 'Economics and the Design of Organizations'‘ is that the students acquire knowledge about how companies can be organized as efficiently as possible. During the HA study program, the students have been presented to classical Managerial Economics (production functions, costing, markets, optimization, etc.) and many other economic, financial, managerial and organizational courses. This course – Economics and the Design of Organizations - builds a common frame of reference for approaching organizational objects using economics. The theoretical approach from the Managerial Economics course presented at the HA-study program’s 1st. and 2nd. semesters is complemented with transaction cost theory as well as principal/agent theory. Particular attention is drawn to the assumptions that individuals are self-utility maximizing and that knowledge in companies is usually distributed asymmetrically. With these two assumptions, a frame of reference is built up, the purpose of which is partly to analyze organizational issues, but more importantly to provide guidelines on how to organize the company's 'economic, organizational architecture' effectively. The subject draws the market logic into the company ('Bringing the Market Inside the Firm', Baker et al., 2002) so to say. In other words, the course combines behavioral economics and organizational theory. Additional emphasis will be placed on possible implications when applying specific theories and models while at the same time integrating a more sustainable strategy of the organization



The frame of reference of the course deals with three key issues;


1. How the allocation of decision rights in organizations can be organized and assigned

2. How to measure and evaluate the performance of individuals and organizational units as well as

3. How incentive structures and reward systems can be properly designed (for item 2) to maximize firm value.


The theoretical frame of reference is thus intended to help analyze organizational problems in practice through the lenses and logics of economics. The course is ‘economical by nature’ in the sense that the ideas of organizational efficiency and utility maximization are central when analyzing organizations and organizational problems. At the same time it is important to have a vision for a more sustainable future and how to balance conflicting targets in organizations when integrating sustainability related performance drivers.

Description of the teaching methods
The teaching is based on lectures that will be conducted as a teacher-led dialogue and Blended Learning as the educational framework. It is expected that the students participate very actively. The lectures will cover the main topics in the syllabus and be supported by a number of cases, to illustrate the theory. In addition a considerable number of exercises and cases will be solved in class. The purpose of the exercises is to discuss and apply the presented theories and models. The students will thereby be trained in analyzing concrete decision making and at the same time assess the theories' assumptions and applicability. Canvas will be used to distribute documents to and from students. The Blended Learning approach means that part of the learning process will take place between the class lessons. Specifically, the students will - in addition to reading the syllabus - also be required to watch video sessions and answer quizzes in preparation for the lectures.
Feedback during the teaching period
The students receive a comprehensive, individual feedback throughout the teaching process by the lecturer during the lectures. As the lectures are focused on building on dialogue, during these and discussions the students will receive feedback when ex. discussing the assumptions and boundaries of the theories themselves as well as their use. Also because the course' quit many build-in exercises and cases feedback will be a natural part of the course. Finally also by using quizzes this opportunity will furthermore address the possibility of feedback for the students. Using the quizzes and the feedback from these will help the students in their understanding of their position regarding their progress during the course. .

Student workload
Lectures 38 hours
Preparation - reading syllabus 72 hours
Preparation – videos and quizzes 46 hours
Exam preparation and exam 50 hours
Expected literature

Brickley, Smith & Zimmerman: Managerial Economics and Organizational Architecture, 7th. ed., 2021, McGraw Hill, app. 700 pages.

Last updated on 26-08-2021