1. The objective is to understand the vertical boundaries a company or firm or organisation from the perspective of the vertical chain and the production process.

2. The focus of the Assignment is the vertical chain in the supply of products and services. The discussion on the vertical boundaries in Besanko's Chapter 3 links into our discussion in Unit 1 of the colour-coded storybook and prepares us for the discussion of the game dimension at the Workshops (Units 3 and 4).

3. Firms can be described as a ‘nexus of contracts' wherein management take the view that vertical integration is efficient for assuring input supply in an uncertain world. However coordination can be a problem in vertical chains so management need to obtain economies of scale and scope in production in order to be profitable and also need to understand the game dimension. Who are my competitors? Where is the competitive threat?

4. A critical task for management is to define the boundaries of the firm by determining what to make and what to buy, the make-buy dilemma. But management are also players in a game - should they compete or should they co-operate with competitors? These points will be examined further at the Workshops in preparation for your group Workshop Assignment.