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Ostioymicannet. — ‘Chapter 1 - Menage Economics _7Agaizatinal Architecture Objectves: 0 + The aesignment of decison rgns ~ Methods of compensation _ * Performance evaluation of invcuas and units Managerial Economics Objectives:-4 © ° 1 >) = Which market to enter [7 Product aterena Your product aterent”) {proauetenoices (mi Peng sessions * Marieténaiysis ano Compettor Benavior Management/Managerial/Manager + Economics * Managerial Econcmies| ‘The Manager djraxs remuvcr 10 ovrieNE acrEned a>a} = Aperson who directs resources to achieve a stated goal + Have the responsibity for everyone + Tasked to maximize the profits of the frm = Toachieve and maximize profit Economics Tn ane t GRE ~ Resources are those used to pro al -_ *Szarcty ples ht by makin one choke, youve Ue anther (opportunity cost) Geanagan oe 2 Girma cure ‘The Three Types of Scarce Resources whe presence of scarce resources nomies/foundation of economies Managerial Economics A study of ow ‘achieves @ managerial goal re resources|in the way that most efiientiy good or service orto achieve 3.) ‘achieve the fs goals ‘The Managerial Economic Perspective Economies provides a framework for analyzing decisions How do individuals Role of 4 How can managers structure organiza itecture to motte employees? © Incentives cones and sie behavior Economic Darwinism © Ensure high quality production sting rotectre et andom ‘Surviving architectures a7e optimal eatve to competitors ‘As egwfonments change the appropriate citer changes Economies of Effective Management|) tre mumageio =< 1aNes war optional munageria\.deusione rele womparing mpeg conn 9 2 ison ie ron = Mavainal ping dey aS: re nde iso veneer seins Bang prone an me aranera wae Oa. lng MENML YOU oF menty xo caenane now main Yo need 0 vest nay v0 MUSA CenDin EUW goal ery goats and constraints ay ses" goss apron ANS In making sound decisions one must have wolldefined goals because "achieving afferent goals entails dferent decisions The decision maker face constraints that affect the ability to achieve a woo! + Time isa constraint that's ahways present ‘©The constants make eu or managers to achieve goals "Nature and importance of Profits: Overall goa! of most firms to haximize profi or the fim’s value = Eeonomié profits vs accounting profts ~ The goal of maximizing prof a em ultimately meets the needs of society Profs are a signal to resource Holders that resources are property Revenue ~

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