MBA 8000
Managing in the Global Economy
Instructor: XXXX XXXX / Phone: (404) 413-XXXXOffice: RCB XXXX / Fax: (404) 413-XXXX
Website: / e-mail:
Location / XXXXXX
Class Hours: / XXXX on the dates indicated below.
Office Hours: / Since most students are working professional students, it does not make sense to establish formal office hours during the day, so office ours are by appointment. I am in the office every day. By arrangement, I can meet you before or after class.
Course Description / Managing in the Global Economy provides students with an integrated managerial framework based on economic principles to facilitate effective decision making across and within functional areas, across and within global borders, and across and within organizational boundaries. Students will learn to formulate strategic decisions and to face complex challenges through lecture, case study, discussion and exercises that emphasize critical thinking within an economic paradigm. Key concepts include the power of markets, the influence of technology on markets and organizations, the impact of incentives on actions, and how information influences decisions and actions.
Required: / Text
Cases
Access to a laptop computer with spreadsheet capabilities.
Standard calculator
Grading: / Midterm Exam
Final Exam
Case and Class Participation
Projects and Assignments / 30%
30%
20%
20%
Individual grades will be assigned relative to overall class performance. This class will use the +/- grading system as prescribed by the Robinson College. In fairness to all students, there will be no “extra credit” assignments.
A Excellent
B Good
C Average
D Poor
F Failure
MBA Grading Statement: / In general, in MBA and PMBA prefix courses about 35% of the students will receive a grade of A+, A, or A-. Generally, the majority of the remaining students will receive grades of B+, B, or B-. Students who demonstrate significantly lagging performance shall earn grades at the C-level or lower as appropriate.
Cases: / Cases will be on
Exams / Exams will consist of problems, short essays, and critical analysis. Exams may have both an in-class and out-of-class component. The in-class component will be closed book and closed note. The Final Exam will be cumulative.
Learning Process / The lectures, assignments, cases, and examinations are all part of the learning process. Everything combined is designed to prepare you for your challenges beyond the classroom. Focus on learning the material and how to use data to make better and more meaningful decisions. If you do this, the course grade will take care of itself. More importantly, you will leave the class with skills and an economically relevant analytical decision framework that will pay off in the future.
Take-home Assignments / It is not possible to credibly enforce a policy of “no collaboration” on take-home assignments. Thus, it does not make sense to establish such a policy. You may collaborate with other students on all take-home assignments. However, you are responsible for the work that you turn in. Frequently, I encounter “strange” approaches that seemingly have no merit. Sometimes, I see the same approach multiple times, usually because students have discussed the issue or collaborated. It is also sometimes the case that by the second or third time I see the approach, I begin to understand that, while not correct, has some merit. To help fairly and equitably grade take-home work, please indicate if you have collaborated or discussed the assignment with other students and identify the student(s).
Desire2Learn
& e-mail / PowerPoint lectures, examples, assignments, solutions, announcements, etc. will be posted on the Desire2Learn class site. Students are responsible for all announcements posted on Desire2Learn and made in class.
E-mail communications will be sent to the GSU student e-mail account listed on GOSOLAR. Students are responsible for all announcements made by e-mail. If you do not regularly check your GSU student e-mail, forward it to an account that you check regularly. To forward your GSU student email account to another email account, follow these instructions.
Note: Do not use the email in Desire2Learn to communicate with me. This email can only be accessed through Desir2Learn and will not reach me efficiently,
Attendance: / Students are expected to attend ALL scheduled class meetings for the entire duration of the class meeting. I will check the roster or circulate an attendance sheet in each class period. Students who arrive after attendance has been checked will be counted in attendance only at the discretion of the instructor.
Any student who is absent from more than the equivalent of three modules will be administratively withdrawn from the course. If a student is withdrawn for excessive absences after the midpoint of the term, a final grade of WF has to be assigned. An absence from class for any reason (job conflict, illness, appearance in court, transportation problems, etc.) counts as a class absence against the cumulative limit.
Ethics and Academic Honesty: / I encourage you to share your work and knowledge, but draw the line at plagiarism and copying the work of others. Work with other students or seek assistance from another person only is specifically allowed. If you are allowed to work with another student (or anyone) on an assignment, acknowledge the collaboration. Never copy another student’s work or allow another student to copy your work. Do not use any prohibited materials.
We take issues of academic honesty very seriously. Students are expected to recognize and uphold standards of intellectual and academic integrity in all work. The university assumes as a basic and minimum standard of conduct in academic matters that students be honest and that they submit for credit only the products of their own efforts. The University policy on academic dishonesty is spelled out in Section 1350 of the Graduate Catalog.
The following are instances of academic dishonesty:
plagiarism (see Section 1350 of the Graduate Catalog.)
cheating on examinations,
unauthorized collaboration with others
falsification of materials
multiple submissions (i.e., submitting the same work for credit in more than one class).
Lack of knowledge is not an acceptable defense to any charge of academic dishonesty. Infractions will result, at a minimum, in a zero for the assignment and can result in expulsion from the university.
Cell Phones, Pagers, and Other Electronic Devices / Unless prearranged with the instructor in rare urgent situations, please turn off all cell phones, pagers, and electronic devices other than the laptop that you are using for class purposes.
Do not surf the web, send emails, check sports scores, use social media, or otherwise multi-task during class. Devote your entire attention to the class experience.
Student Responsibility / The Five Ps
- Be Present
- Be Prompt
- Be Prepared
- Participate
- Be Professional
Background: / Students are expected to possess basic Excel skills including the ability to create relative and absolute references, the ability to use basic functions, the ability to write formulas, and the ability to freeze portions of spreadsheets.
You can obtain free online instruction on Excel here.
NOTE: This syllabus is a general guideline. Deviations may be necessary. Students are responsible for all announcements made in class or posted on the course web site.
Course Schedule
The Power of MarketsSession 1 / The Power of Markets: Demand for Products and Services
Class Lecture: Covers law of demand, elasticity, substitutes and complements and how these characteristics of the market influence the organization’s strategic plans
Students should be able to:
- Generate a theoretical demand curve for most goods or services, being able to describe what goes into a demand curve for that particular product.
- Be able to explain how the demand for goods and services is important to the strategic plans of the organization. (e.g.,: the firm’s comparative advantage is determined in part by whether the firm’s product is a commodity or a differentiated product that provides some degree of market power)
- Explain the concepts of the price elasticity of demand and the income elasticity of demand. In particular the student will be able to explain how these concepts related to consumer behavior in marketing.
- Demonstrate thorough examples of the concepts of substitutes and complements.
- Explain the difference between a change in demand (shift) and a change in quantity demanded
Class Project: Using the above case write out demand curve for higher education explaining the rationale for each element. Then answer the following questions.
- What would go into this demand curve if one was going to estimate it fully?
- What distinguishes the demand for seats at MIT v. Harvard or Harvard v. Georgia State?
- What role does price play in the number of seats filled at the average school?
- What role does income play?
- What are the major substitutes and complements for higher education?
- How (and why) should pricing policy change if there are significant quality differences?
“Seeking Perfect Prices,” The Wall Street Journal, March 27, 2007
“To Spark Buyers for Electric Cars,” The Wall Street Journal, May 22, 1013
Donald Stengel, Introduction to Managerial Economics, BEP 069;
Donald Stengel, Demand and Pricing, BEP 071
Session 2 / The Power of Markets: Supply of Products and Services
Lecture: Covers the law of supply and how the supply of goods and services in the market influence the organization’s strategic plans.
Students should be able to:
- Generate a theoretical supply curve for any market for a firm’s product.
- Explain the concepts of the price elasticity of supply.
- Demonstrate an understanding of the relations between production, costs, an individual firm’s supply curve, and market supply
- Explain how changing technology influences the supply curve for a product.
- Explain how a shock to the price of credit would affect the market supply curve.
- Be able to explain how the supply of goods and services is important to the strategic plans of the organization.
Case Discussion Questions:
- What does the economists’ definition of a supply function for STEM majors look like?
- What are the important inputs?
- What roles do scarcity and technology play in this supply curve?
- How do the items in [section IV] of the report (15-36) influence supply?
- What is the price elasticity of supply for STEM graduates?
John B. Taylor, The Financial Crisis And The Policy Responses:
An Empirical Analysis Of What Went Wrong.NBER Working Paper
Donald Stengel, Market Equilibrium and the Perfect Competition Model, BEP 074: pp 86-88
Reference:
Donald Stengel, Key Measures and Relationships, BEP 070
Donald Stengel, Cost and Production, BEP 072
Supply, Demand, and Equilibrium: The Algebra, UVA-G-0592
Session 3 / The Power of Markets: Equilibrium
Lecture: Covers equilibrium concepts, changes in demand and supply, changes in equilibrium quantity through the price mechanism, and the influence of business cycles and government policy on equilibrium in markets.
Students should be able to:
- Explain what happens when there is a shock to demand or supply
- Explain why the price mechanism does what it does and how it might compare to other allocation mechanisms like auctions, need, or status.
- Explain how we measure GDP, unemployment and inflation
- Explain business cycles and how they influence the operations of an organization
- Explain the general equilibrium effects of government policies such as price control, price subsidies, fiscal policy, or monetary policy.
- Explain how managers can use the concept of market equilibrium, disruptions to the market equilibrium, and constraints imposed on the market equilibrium through price controls and subsidies as inputs into the organization’s strategic plan
Case Discussion Questions:
- What are the relevant (theoretical) demand and supply curves for parking spaces at a university?
- How would a market determine a price for spot X on campus?
- What are the impediments for a market price arising for a particular spot?
- What solutions might arise to help markets arise to allocate resources more efficiently?
Read:
NY Cracks down on Price Gouging
Donald Stengel, Market Equilibrium and the Perfect Competition Model, BEP 074
Supply, Demand, and Equilibrium: The Algebra, UVA-G-0592
The Influence of the Market Environment and Technology on Organizations
Session 4 / The Market Environment: Monopoly, Oligopoly, and Life Cycle
Lecture: Covers the impact of the economic environment on business decision making. Specific topics include monopolistic and oligopolistic market structures, firm and industry life cycles, and emerging markets.
Students should be able to:
- Explain the concept of an economic profit.
- Explain how a monopoly or oligopoly differs from a competitive market and how barriers to entry create these market structures.
- Explain the concept of monopsony and how monopsony influences market outcomes.
- Explain the conditions under which firms with monopoly power earn economic profits.
- Explain the various phases of a firm or industry life cycle and how these phases interact with the market structure
- Explain the characteristics of an emerging market and how emerging markets contrast with developed markets for business decision making
- Explain how market structure, firm and industry evolution, and market development influence and organization’s strategic planning
Case Discussion Questions:
- Discuss the effects of the Microsoft “per processor” license on competition. How does Microsoft gain using such pricing? What is the importance of Microsoft’s market share on the impact of such pricing? Do the consumers gain?
- Discuss the differences between contractual bundling and technological integration of additional functions in a PC operating system.
- Analyze each of the arguments on pricing of Windows in section 4. Do you agree or disagree with each one of them?
- Do you agree with the government’s theory on monopolization in section 5? Why or why not?
- Do you agree with the arguments on consumers’ losses and benefits in section 6.?
Imperfect Competition and Monopolies, UVA5688
Reference:
Donald Stengel, Firm Competition and Market Structure, BEP 075
Session 5 / The Influence of Technology and R&D
Lecture: Covers the impact of technology and innovation on market competition and the ability of firms to earn economic profit through proprietary technology and innovation
Students should be able to:
- Explain how firms earn economic profit by possessing technology that is unavailable to other firms.
- Explain why firms will compete away economic profits by investing in the development of new technology.
- Explain the circumstances under which changes in technology, innovation, or other forms of “creative disruption” result in a permanent change of product/service demand on prices and output
- Explain the conditions that result in economies of scale and scope and how new technology can influence these conditions
- Explain how organizational learning in the face of creative disruption is essential to an organizations ability to adapt to changes in economic forces
- Explain how the introduction of new technologies, innovation, and creative disruption influence an organization’s strategic planning.
Case Discussion Questions:
- What is research and development?
- Describe the stages within the development process at SFIL
- Explain the challenges of R&D.
- Analyze the reasons for carrying out new product development.
Moving the World Forward: The Quest for a New Equilibrium, ROT243
“The endangered public company: The big engine that couldn’t,” The Economist, May 19, 2012
“The endangered public company: The rise and fall of a great invention, and why it matters,” The Economist, May 19, 2012
Session 6 / Regulation and Rent Seeking
Lecture: Covers how regulation can alter market structures in such a way to provide firms with monopoly power or a cost advantage that allows them to earn positive economic profits or “rents,” actions by firms seeking to exploit market flaws in order to gain monopoly power and earn economic rents, and government regulation intended to protect society from such “predatory” strategies. Specific topics may include antitrust regulation, the rationale for patents, regulation of mergers and acquisitions, labor regulation, and minimum wage laws.
Students should be able to:
- Explain the difference between a natural monopoly and a monopoly that results from regulation or predatory actions
- Explain how government regulation can provide firms with monopoly power or a cost advantage that allows them to earn positive profits.
- Explain how government regulation may be designed to impede predatory actions taken by firms to create monopoly power
- Compare and contrast the benefits and the costs of government regulation
- Explain how understanding and responding to government regulation influences an organization’s strategic planning.
Case Discussion Questions:
- How has Chile regulated voice telephone providers since Telefónica was privatized in 1990?
- How well has the voice telephone industry performed since 1990? To what extent do the government’s regulatory policies deserve the credit or blame for the performance?
- What has been Chile’s strategy in regulating Internet providers and how well is that industry performing?
- Would requiring broadband providers to open access be desirable?
- Is the case for open access likely to be stronger or weaker in electricity, gas, railroads, water or other industries than it is in broadband? Why?