The basic disciplines applied throughout the course include human behavior, organizational economics, and corporate finance. The course examines how owners and their top managers create or destroy economic value through the choices they make regarding the ownership and capital structures of their firms and the design and management of their internal governance and control processes. The exercise of these rights can have a major impact on an organization's performance. The theory developed in the course addresses specific problems of motivation, learning and non-learning behavior, conflicts between owners and managers, the allocation of decision rights within organizations, and the management of performance measurement and reward systems. The principal applications of the theory developed in the course are studies of how value can be created through organizational changes associated with restructurings, downsizings, recapitalizations, buyouts, takeovers, spin-offs, and other forms of organizational reengineering.
Cases form the basis of two-thirds of class discussions.
The remaining materials include articles from academic journals, articles from the business press, and discussion problems. While some of these readings are theoretical and analytical, the course is not mathematically technical. Nevertheless, students enrolling in this course should expect to confront both theory and practice and to work on deepening their understanding about how they can become effective owners and managers. The final exam consists of several short essay questions.