Theory of the Firm

Theory of the Firm

  • Study programme and level:The joint doctoral study programme Governance and Economics in the Public Sector (third cycle)
  • 2nd year
  • 5 ECTS
  • Course type: Elective course
  • Lectures: 20
  • Seminar: 20
  • Other forms of study; 20
  • Individual work: 90
  • Lecturer: Marija Kaštelan Mrak, PhD

1. Objectives and competences

Student will:

  • gain knowledge on theoretical aspects of conceiving a firm as an object that recognizes the integrity of the firm’s potentials as well as the impact of the environment on the firm,
  • have a new understandings in terms of analyzing the model of the firm through an economic and systematic approach,
  • be capable to understand performance measurement and analythical relations between all elements essential for a holistic approach,
  • develop competencies and skills in identifying the basic models of firm structure and theoretically and argumentatively elaborate the strengths and weaknesses of a model in terms of the relevant market structure.

2. Content (Syllabus outline)

  • Theoretical principles of the company functioning under circumstances of corporate governance. Analysis of particular theoretical approaches
  • Theory of stakeholders – concepts, advanatges and critics ( Jensen, Freeman)  
  • Analytical scheme of the company. Analytical methods for generating system indicators
  • Holistic approach to performance measurement in the context of stakeholder theory and corporate governance
  • Technological theories of firm growth and the problem of  firm boundaries
  • S-C-P model- economical and financial efficiency. Concentration and monopoly power
  • Specific transaction. Bilateral monopoly. Incomplete contracts
  • Ownership as a control instrument. Agency theory

3.  Readings

  • Jean Tirole: The Theory of Industrial Organizaction, The MIT Press, 1995.
  • Jensen, M.G., (2003), A Theory of the Firm, Harvard University Press. str. 83–135.
  • Ricketts, M.J. (2006), The Economics of Business Enterprise: An Introduction to Economics Organization and the Theory of the Firm, Edward Elgar Publishing, 2003. str.3–49.
  • Stephen Martin: Industrial Organization: An European Perspective, Oxford University Press, 2004 (reprint).
  • Tintor, J.: Poslovna analiza,Masmedia, 2008. str. 85–163, 167–240, 243–283.
  • Phillips,R: Stakeholder Theory and Organizational Ethics, 2003.
  • Scientific articles

4. Intended learning outcomes

Student will be fully acquainted with theoretical principles of the company functioning. Student could be able to contribute to development of knowledge in the field of theory of the firm.

5. Learning and teaching methods

  • Lectures and discussions depending on the topic.
  • Students will present topics and results of their research.
  • Tutorials.
  • Individual research for the exam.

6. Assessment

Lecture attendance 10%
Activity 10%
Essay 30%
Written or oral exam 50%