Jonathan S. Leonard

Teaching

Strategy, Structure & Incentives

Businesses have one inescapable challenge: anticipate or respond to change, or fail. This class is about building a responsive business and anticipating the responses of others in the vertical chain.   Firms achieve competitive advantage by managing their own resources, as well as those in the extended organization of upstream suppliers, network and alliance partners, and downstream distributors in the vertical chain. We focus on managing this vertical chain, including the fundamental make or buy decisions that determine the limits of the firm.  Managing for success depends on understanding your organizational architecture: the allocation of decision rights, the measurement of performance, and the design of incentives.  A major focus of this course is using insights from economics to improve incentive and performance management systems both within the firm and in external contracts.

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Strategy

Leaders shape the future to their advantage.  This course will teach you how to recognize and capitalize on opportunities in business. Strategy is inherently dynamic.  Success depends crucially on anticipating reactions both horizontally (by rivals and partners) and vertically (upstream and downstream).  To address these dynamic issues, we will use game theory as an organizing framework for making strategic choices. You will learn specific analytical techniques to diagnose the competitive position of a business and evaluate business strategies.

At the end of the course, you will have the analytic tools to assess the following key strategic questions:

• How can a firm generate and capture value?
• How do the fundamental economic forces in an industry affect the firm’s ability to make profits?
• How can a firm position itself within an industry to obtain a sustainable competitive advantage?
• How is a firm’s choice of strategies affected by the strategies of other firms— rivals, partners, and others up and down the value chain?

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Microeconomics

Business success or failure depends critically on the successful positioning of the firm and the management of its resources.  The goal of this course is to think systematically and strategically about achieving competitive advantage through the management of the firm's resources.  We will analyze management decisions concerning decision-making under uncertainty, costs, pricing, market entry and exit, contracting and incentives.  We will also discuss anticipating rivals’ actions and responses in strategic settings.  We will use readings and cases along with class discussion to develop practical insights into managing for competitive advantage.

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