MG4A3      Half Unit
Incentives and Governance in Organisations

This information is for the 2017/18 session.

Teacher responsible

Dr Jin Li NAB.5.30


This course is compulsory on the MSc in Management and Strategy. This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), MBA Exchange, MPA in European Policy-Making, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MPA in Social Impact, MSc in Marketing and Master of Public Administration. This course is available with permission as an outside option to students on other programmes where regulations permit.


A knowledge of Mathematics and Economics.

Course content

The course uses economic theory to gain insight into issues related to internal organisation, structure, and management of firms. The course will draw on various fields including management science, industrial organisation and microeconomics. The course deals with three main topics: (i) the provision of incentives in organisations, (ii) the use of information in markets and firms, and (iii) the relationship between corporate finance and organisational decisions. A major theme concerns the question of how to provide incentives efficiently in organisations. Other important themes include efficiency, coordination, incompleteness of contracts and the use of the market versus internal exchange. A section of the course deals with capital structure. The implications of asymmetric information are examined. Corporate governance is discussed in a principal-agent framework.


20 hours of lectures and 8 hours of seminars in the MT.

Students on this course will have a reading week in Week 6, in line with Departmental policy.

Indicative reading

Main texts: Roberts J (2004), The Modern Firm. Organizational Design for Performance and Growth, Oxford University Press, UK; Brealey, RS, Myers, and F Allen (2006), Corporate Finance, 8th edition (older editions are fine too), McGraw-Hill International Edition (US edition is titled "principles of corporate finance"; older versions by Brealey and Myers only).


Exam (100%, duration: 2 hours) in the main exam period.

Key facts

Department: Management

Total students 2016/17: 88

Average class size 2016/17: 15

Controlled access 2016/17: Yes

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Application of information skills