How do you run a firm effectively, especially when it grows large and becomes a complex organization? What is the role of incentives in achieving this goal? Building on the insights from EBO1 about human behavior, in this course we open the black box of the firm, uncovering and understanding its internal workings and dynamics. In the first part of the course, we use the Principal-Agent Theory and insights from empirical work to study how incentives can be used to ensure organizational success. For instance, how should firms design rewards that align workers with the firm’s strategic goals, while also cultivating an environment that makes the firm an attractive workplace? In the second part of the course, we study the design and management of organizations. Here we explore questions such as: How should tasks and power be allocated within the firm? Which factors drive the choice for a particular organizational form, such as the firm’s size or whether its business model is high-tech or low-tech? How might organizational structure and culture influence things like technological development or sustainability-related goals? We achieve our learning outcomes in a very diverse and applied fashion. Our teaching methods include, among others, case studies and in-class experiments.