The University of Texas at Dallas

Global Leadership Executive MBA Program

MECO 6303: Managerial Economics

Fall 2006: October 16 – December 17, 2006

Professor Contact Information

John McCracken, Ph.D. Phone: (972) 883.6252 Fax: (972) 883.2378

Carolyn Reichert Phone: (972) 883.2726 (W) Fax: (972) 883.6164

Course Manager (972) 867.7088 (H)
E-Mail: Use Blackboard e-mail
Office Location: SM 1.506
Office Hours: By appointment

Course Pre-requisites, Co-requisites, and/or Other Restrictions

There are no pre-requisites for this class.

Course Description
The objective of this course is to develop a rational economic framework for analyzing the
consequences of three key organizational decisions:
♦ how decision rights are allocated within a firm;
♦ how employee performance is measured; and
♦ how employees are compensated.

A principal conclusion is that these three elements of organizational architecture must be

properly balanced and mutually supportive. Changing one without synchronous adjustment
of the other two will invariably lead to problems.

Student Learning Objectives/Outcomes

♦ Use the economic model of behavior and other tools of economic analysis to make
a management decision
♦ Develop a conceptual economic framework to address organizational problems

Text: Designing Organizations to Create Value

Bickley, Smith and Zimmerman; McGraw-Hill, 2003.

Cases: Lincoln Electric Co. 9-376-028

Lincoln Electric: Venturing Abroad 9-398-095

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 Automation Consulting Services. 9-190-053
Pepsi Cola US Beverages (A) 9-390-034
General Dynamics: Compensation and Strategy (A) 9-494-048
Compensation and Performance Evaluation at
Arrow Electronics 9-800-290
Family Feud (A): Anderson v. Anderson 9-800-064
The Enron Collapse IMD164

Schedule of Assignments

Retreat
Assignment: None

Retreat
Topic: Introduction to Managerial Economics
Date: May 12
________________________________________________________________
Week 1: An Economic View of Behavior
Dates: October 16 – October 22
Lecture: Economic View audio files and slides on Blackboard
Readings: Chapters 1 and 2
Plan Ahead: Lincoln Electric cases will be discussed October 29
________________________________________________________________
Week 2: Organizational Architecture
Dates: October 23 – October 29
Lecture: Organizational Architecture audio files and slides on Blackboard
Readings: Chapter 3

Cases: Lincoln Electric Company

Lincoln Electric: Venturing Abroad

Web Conference: Sunday, October 29:

5:00 pm CST for Teams 1, 2, 3 and 4
7:00 pm CST for Teams 5, 6, 7 and 8
________________________________________________________________

Week 3: Allocating Decision Rights: Empowerment

Dates: October 30 – November 5
Lecture: Empowerment audio files and slides on Blackboard
Readings: Chapter 4

Case: Automation Consulting Services.

Web Conference: Sunday, November 5:

5:00 pm CST for Teams 1, 2, 3 and 4
7:00 pm CST for Teams 5, 6, 7 and 8
________________________________________________________________

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Week 4: Allocating Decision Rights: Job Bundling
Dates: November 6 – November 12
Lecture: Job Bundling audio files and slides on Blackboard
Readings: Chapter 5

Case: Pepsi Cola U.S. Beverages

Web Conference: Sunday, November 12:5:00 pm CST for Teams 1, 2, 3 and 4

7:00 pm CST for Teams 5, 6, 7 and 8
________________________________________________________________

Week 5: Performance Measurement and Evaluation

Dates: November 13 - November 19
Lecture: Performance audio files and slides on Blackboard
Readings: Chapters 6 and 7

Case: Arrow Electronics

Web Conference: Sunday, November 19:5:00 pm CST for Teams 1, 2, 3 and 4

7:00 pm CST for Teams 5, 6, 7 and 8
________________________________________________________________

Week 6: Thanksgiving Week: No Assignment

Have a Happy Thanksgiving!
________________________________________________________________

Week 7: Compensation Strategy

Dates: November 27 – December 3
Lecture: Compensation audio files and slides on Blackboard
Readings: Chapters 8 and 9

Case: General Dynamics

Web Conference: Sunday, December 3: 8:00 pm CST for All Teams 1-8
________________________________________________________________

Week 8: Corporate Culture and Organizational Form

Dates: December 4 – December 10
Lecture: Organizational Form audio files and slides on Blackboard
Readings: Chapter 10

Case: Family Feud (A): Andersen v. Andersen

Web Conference: Sunday, December 10:5:00 pm CST for Teams 1, 2, 3 and 4

7:00 pm CST for Teams 5, 6, 7 and 8
________________________________________________________________

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Week 9: Ethics and Organizational Design
Dates: December 11 – December 17
Lecture: Ethics audio files and slides on Blackboard
Readings: Chapter 11

Case: The Enron Collapse

Web Conference: Sunday, December 17: 5:00 pm CST for Teams 1, 2, 3 and 4
7:00 pm CST for Teams 5, 6, 7 and 8

Peer and Course Evaluations: Due Monday, December 18

Grading Policy and Evaluation

Grading Formula

♦ Individual participation in web conferences 33%

♦ Two written team cases plus team evaluations 66%

Web Conference Discussions 33 %

A Power Point presentation, lecture notes and case discussion questions will all be posted at
least 3 weeks prior to the web conference. The purpose of the web conferences is to discuss
the week’s case. You are expected to use the Elluminate web conference system to discuss
the case with your team before the web conference. The presentation, lecture notes and
textbook readings will help you understand the discussion topic and prepare your answers to
the case questions.

You should diligently prepare each case with your team regardless of whether or not you
choose to write it up. You will be evaluated based on your attendance and level of participation
in the web conferences.

Written Team Assignments 66%

Choose any two cases except Lincoln Electric to write up. You may write up more than two if
you choose; your grade will be based on the best two. All written cases are due no later than
the start of the teleconference at which they will be discussed.

Evaluation of written assignments will be based on thoughtful, analytical, well-constructed

responses to the posted case questions. More information on how to write up the cases will be
presented in the first lecture.

Each student will be required to submit a confidential team peer evaluation at the end of the
semester. These evaluations will be considered in assigning the final course grade.

Course & Instructor Policies

Format for Written Team Assignments

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Written team assignments should be Word documents that are
♦ 12 pt. Arial or Times New Roman font
♦ The team number and names of team participants should be on the first page AND the
team number as part of the document name, i.e. “Pepsi Team 2.doc”

Submission
Assignments should be posted on Blackboard (Bb) within the course area by the due date.
Assignments are submitted to the Digital Drop Box under Tools tab. Be sure to use the
SEND command to submit to the Drop Box. Do not use ADD command to post.

Late Assignments
If you need to miss a web conference, please pre-notify the instructor and course manager
before the web conference begins. The following week, you should listen to the posted
audio of the web conference. Missed web conferences cannot be made up. There are no
extensions for team assignments.

Course and Peer Evaluations

At the completion of the course, each student needs to complete both a course evaluation form
and a confidential team peer evaluation. Both evaluations are electronic documents whose link
is located on Blackboard (Bb) in the course area under the Information button.

For the peer evaluation, each student must allocate 100 points among the team members to
reflect the level of contribution each has made to the case write-ups. Each student has full
discretion to use whatever evaluation criteria he/she thinks is most appropriate. These
evaluations are taken seriously by the faculty, and will be held in strictest confidence.

UTD Policy on Cheating:

Students are expected to be above reproach in all scholastic activities. Students who engage in
scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in
the course and dismissal from the university. "Scholastic dishonesty includes but is not limited
to cheating, plagiarism, collusion, the submission for credit of any work or materials that are
attributable in whole or in part to another person, taking an examination for another person, any
act designed to give unfair advantage to a student or the attempt to commit such acts."
Regents' Rules and Regulations, Part One, Chapter VI, Section 3, Subsection 3.2, Subdivision
3.22. Professors randomly use “Turnitin.com” to screen papers against other published works
on the web to insure against plagiarism.