Industrial engineering is a branch of engineering dedicated to the optimization of processes or complex systems. It deals with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials, analysis and synthesis, as well as mathematical, physical and social sciences along with the principles and methods of design Engineering to specify, predict and evaluate the results to be obtained from such systems or processes. Its underlying concepts overlap considerably with certain business-oriented disciplines, such as operations management, but the engineering side tends to emphasize extensive math competence and the use of quantitative methods.
In economics, the industrial organization or the industrial economy is a field that is based on the theory of the company examining the structure of (and, therefore, the boundaries between) the companies and the markets. The industrial organization adds real complications to the perfectly competitive model, complications such as transaction costs, limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes the determinants of organization and behavior of companies and markets, as well as competition and monopoly, including government actions.
There are different approaches to the topic. One approach is descriptive in providing an overview of industrial organization, such as measures of competition and concentration of firm size in an industry. A second approach uses microeconomic models to explain the internal organization of firms and the market strategy, which includes internal research and development, together with internal reorganization and renewal issues. A third aspect is oriented to public policy regarding economic regulation, antitrust law and, more generally, economic governance of the law in the definition of property rights, compliance with contracts and provision of organizational infrastructure.
The theme has a theoretical side and a practical side. According to a textbook: "On one level, the field is abstract, a set of analytical concepts about competition and monopoly." In the background, the issue is about real markets, full of the emotion and drama of the struggles between real firms "(Shepherd, W., 1985, 1).
The extensive use of game theory in the industrial economy has led to the export of this tool to other branches of microeconomics, such as behavioral economics and corporate finance. The industrial organization has also had important practical implications for antitrust law and competition policy.
The development of industrial organization as a separate field owes much to Edward Chamberlin, Edward S. Mason, J. M. Clark, and particularly to Joe S. Bain, among others