Course Method and Requirements:

The presentation of this course will consist primarily of lectures, where the basic concepts will be presented; and class discussions where they will be applied to the managerial circumstances of the students' employers. These will be supported by assignments in the text and other readings distributed during the course.

An important component of the course will be the application of the course material to the students' employers. To that end, each week students will submit a 3-page memo in which they've applied the previous week's concepts to their own company. In addition, at the beginning of each class, 2-3 students will make a brief presentation based on the material in their memo.

In writing their memos, students must concern themselves not only with content, but also with the organization of the material, structure, and grammar.

 

Course Grading:  

	Midterm Exam	100 Points
	Memos	100 Points
	Class Presentation	50 Points
	Final Exam (Cumulative)	150 Points

Office:   

Bartley 3022 

Phone: 

610-519-4371 

Fax:  

610-519-6054       

Email: 

charles.zech@villanova.edu

Office Hours:  

Wednesday 5:00-6:00; 9:00-10:00 p.m.

Attendance Policy:

Students are encouraged to attend every class. It is difficult to imagine a student passing this course without regular attendance.  

Make-Up Exams

Missed exams will be made up at a time that is mutually convenient to the student and professor.

Statement on Disability

It is the policy of Villanova to make reasonable academic accommodations for qualified individuals with disabilities. If you are a person with a disability please contact me after class or during office hours and make arrangements to register with Ms. Nancy Mott of the Learning Support Office at 610-519-5636. Registration is needed in order to receive accommodations.

Academic Integrity Policy Statement:

The Code of Academic Integrity of Villanova University addresses cheating, fabrication of submitted work, plagiarism, handing in work completed for another course without the instructor's approval, and other forms of dishonesty. For the first offense, a student who violates the Code of Villanova University will receive 0 points for the assignment. The violation will be reported by the instructor to the Dean's Office and recorded in the student's file. In addition, the student will be expected to complete an education program. For the second offense, the student will be dismissed from the University and the reason noted on the student's official transcript.

 

COURSE OUTLINE

Date	Topic and Readings
August 29	Introduction
This introductory material reviews basic economic principles and provides an historical overview of   the development of the modern firm.
	Pp. 1-40; Chapter 1
September 5	The Horizontal Boundaries of the Firm
Horizontal boundaries refer to the quantities and varieties of products and services that the firm produces. In some industries, a few firms account for an extremely large share of industry sales, and there are virtually no smaller firms. In other industries small firms dominate. These differences in the horizontal boundaries of firms depend critically on economies of scale and scope.
	Chapter 2
September 12	The Vertical Boundaries of the Firm
The production of any good or service usually requires a fairly wide range of activities. The process that begins with the acquisition of raw materials and ends with the distribution and sale of finished goods is known as the vertical chain. A central issue in business strategy is how to organize the vertical chain. The vertical boundaries of a firm define the activities that the firm performs itself as opposed to purchasing them from independent firms in the market.
	Chapters 3-5
September 19	Diversification
Because firms may be able to reduce costs and improve marketing effectiveness by exploiting economies of scale and scope, most well-known firms are diversified -- they produce in more than one output market. In analyzing broadly diversified firms, which are sometimes called conglomerates, it is often difficult to specify what business the firm is in, what its key resources are, and what contribution is to be expected from corporate management of the individual business units. While diversification is frequently pursued for other goals, the most successful diversifications combine businesses that can exploit scope economies.
	Chapter 6
September 26	Incentives and Agency
Agency theory examines the use of financial incentives to motivate workers. In many situations, one individual or organization, known as the principal, delegates responsibility to another, known as the agent, to act on its behalf. The principal hopes the agent's interests are aligned with its own. But without explicit contractual obligations, the agent may act in his or her own   interest rather than the interests of the principal. This section discusses the opportunities for solving agency problems through contracting, the characteristics of an efficient contract for solving agency problems, and the conditions that lead to inefficiencies even when the best possible contracts are used.
	Chapter 15
October 3	The Economics of Business Ethics
Dr. Dennis Kuhn will conduct this class and present the basic concepts of ethical decision making.
	Thomas White, Business Ethics, Macmillan, 1993, pp. 338-47.
October 10	Industry Analysis
This section explores the economic factors that affect the profits of an industry. Of special interest is the market structure, which refers to the number and characteristics of the firms producing a product. Many markets are dominated by a few firms, while others contain many sellers. In some markets products are homogeneous because sellers can meet the needs of consumers equally well. In other markets products are heterogeneous because different consumers have preferences for different sellers.
	Pp. 227-247; Chapter 11
October 24	MIDTERM EXAM
	(Chapters 1-6, 15; Business Ethics)
October 31	Entry and Exit
Strategic commitments are decisions that have long-term impacts and are difficult to reverse. They are in contrast to tactical decisions, which are easily reversed and whose impact persists only in the short run. One critical strategic commitment concerns market entry/exit decisions. Firms must account forboth entry and exit in their strategic decision-making. New entrants into a market take away market share from incumbent firms and intensify competition, which could reduce prices. The exit of firms has the opposite effect.
	Chapter 10
November 7	Strategic Positioning for Competitive Advantage
This section develops a conceptual framework for characterizing and analyzing a firm's strategic position within an industry. The framework employs simple economic concepts to characterize necessary conditions for a strategic position to lead to competitive advantage in the market.
	Chapter 12
November 14-28	Sustaining Competitive Advantage
Competitive advantages that have taken years to build up may suddenly and quickly be eroded by imitators who copy or improve the firm's formula for success or by innovators who neutralize the firm's advantage through new technologies, products, or ways of doing business. Yet, while competitive advantages for many firms are fleeting, other firms seem to sustain competitive advantages year after year. This section examines why some firms consistently outperform their competitors, despite the efforts of other firms to imitate or neutralize the sources of their advantage.
	Chapter 13
December 5	Business Law
Dr. Dennis Kuhn of the Villanova Business Law Department will discuss legal issues associated with business strategy.
December 12	The Origins of Competitive Advantage
This section studies the origins of competitive advantage. They include innovation, evolution, and the environment.
	Chapter 14
December 19	FINAL EXAM
	Cumulative