Institutions and Entrepreneurial Decision-Making
1. Catalog Entry
Institutions and Entrepreneurial Decision-Making
Credit hours (3)
Prerequisites: MBA Status or permission of the instructor
Entrepreneurship is the product of cultural boundaries and institutional limitations that define the scale and scope of risk-taking and individual incentives to engage in creative activity. Small changes to institutional environments can produce dramatic changes in the nature and direction of innovation and entrepreneurship. This course assesses and analyzes the conditions that direct the emergence of entrepreneurial and innovative discoveries both at the macro (governmental) level and at the micro (firm) level.
2. Detailed Description of Course
One can think of the institutional structure of a society as the rules of the game. These rules, both formal and informal, are the determinants of economic, political, and social outcomes. They define the context under which adaptation to the unknown takes place and the direction in which that adaptation flows. The Institutions and Entrepreneurial Decision-Making course provides insight into how entrepreneurial and innovative ideas are generated, under what institutional contexts these ideas emerge, and how these ideas both influence and are influenced by the adaptive process at both the micro and macro level of analysis. Students will critique institutional structures and compare and contrast their impact on the individual’s incentive for entrepreneurial and innovative activity. Entrepreneurial decisions made within a market institution will differ from those made within an administrative institution. Under a market arrangement, activity is coordinated through the feedback mechanisms of prices, profit, and loss. These mechanisms empower individuals to engage in economic calculation based on revealed market value. In institutional environments where the feedback is less available and more open to interpretation, entrepreneurial activity can become suppressed or distorted. The strength and clarity of the feedback signals determine the individual’s ability to engage in coordinating and productive entrepreneurial activity as opposed to activity that is unproductive or even destructive. This is true at both the governmental and economic system level as well as at the level of business structure and organization. It is also true that entrepreneurial activity takes place not only within a given institutional framework but also with regard to the institutions themselves. Students will analyze these dynamics and explain how they relate to both micro and macro issues.
1) Linking and Differentiating Innovation and Entrepreneurship
2) Introduction to Comparative Institutional Analysis
3) Market Process Theory
4) Non-Market Decision Making
5) Productive, Unproductive, and Destructive Entrepreneurship
6) Decision Making by the Firm
7) Decision Making within the Firm
3. Detailed Description of Conduct of Course
This course will utilize historical and contemporary reading from texts, journal articles, and industry publications to provide informative and explorative material in entrepreneurship, innovation and institutional analysis. These materials will ensure that students possess a body of knowledge and material that can be applied to a number of areas of analysis. Students will be tasked with assessing past and current institutional arrangements and draw conclusions and predictions from that body of knowledge. Students will also be tasked with designing solutions to particular problems that arise due to specific institutional arrangements with regard to both intended and unintended consequences of a particular structure.
4. Goals and Objectives of the Course
In completing this course students will:
1) Categorize the differing forms that entrepreneurial and innovative activity may take.
2) Critique institutional forms and compare and contrast their impact on the individual’s
incentive for entrepreneurial activity.
3) Integrate micro level analysis into macro level analysis and vice versa.
5. Assessment Measures
Students are evaluated on the basis of performance and achievement on assignments, term papers, examinations, and contributions to class discussion. Commitment to the class in terms of attendance and participation will be noted.
6. Other Course Information
A concise and well researched paper is part of the course requirement. The typed paper, 6-10 pages in length, is to be submitted on the last day of class. The paper should conform to the standard guidelines for journal submission, including an abstract and section headings denoting the outline of the research project. The basis for evaluation will include: style of presentation, soundness of argument and evidence, clarity, and language. The focus of the term paper will be an analysis of real world events and institutions that may hold specific importance to the student. Students are encouraged to avail themselves of the instructor’s guidance in preparing the paper.
Review and Approval
May 11, 2015