Student guide International Program A.Y. 2008/09

Topics in Business and Politics
Aim of the course
Beyond the market environment, around a firm there exists its non-market environment: regulation, politics, activists, and so on. Managers without an adequate understanding of these subjects can prepare an unbalanced business strategy, with potentially harsh consequences for the operation of their enterprises.
This course is an introduction to several key topics of the non-market business environment. First, it studies the strategic analysis of lobbying in its two forms: informational lobbying and “buying” favourable policies. Second, it presents the positive analysis of regulation: what affects regulatory decisions. In particular, we shall concentrate on regulatory capture and the political incentives of regulators. Next, the course analyses the operation of firms in an environment with corrupt politicians. This section is particularly important for future managers that plan to work in developing countries, often plagued by corruption. Finally, it discusses “private politics”: the operation of firms and of an industry under the pressure by activists.
Reading list
The main support for the course is two-fold: lecture notes and the selected chapters from the textbook by David Baron, Business and Its Environment, 5th ed. Prentice Hall, 2006 [DB hereafter]. These materials will be also supplemented with journal articles.
Introduction – Integrated Strategy (1h30)
  • Lecture notes
  • DB, chs. 1 and 2
Lobbying (3h)
  • Lecture notes
  • DB, chs. 7 and 8
Regulation (3h)
  • Lecture notes
  • DB, ch. 10
Corruption and Political Influence (3h30)
  • Lecture notes
  • Shleifer, A., and R. Vishny. (1993) “Corruption,” Quarterly Journal of Economics 108: 599.
  • Shleifer, A., and R. Vishny. (1994) “Politicians and Firms,” QJE 109: 995.
Private Politics and Activism (3h)
  • Lecture notes
  • DB, ch. 4
Baron, D. (2002). “Private Politics,” Journal of Economics & Management Strategy 12: 31