Economics in management helps in carrying out an effective decision-making process. Additionally, it is a discipline that combines heavy economic theories with managerial practices. Moreover, it helps in covering the gap between logistic and policy problems. Also, it offers essential tools and techniques for making managerial policies. It involves the application of economic concepts and analysis to problems of formulating rational managerial decisions. Similarly, good decision-making enables managers to properly plan, organize, lead, and control their teams. Furthermore, the quality and effectiveness of these decisions determine the success of a business. Also, managers continuously rely on decision-making to solve problems. Effective decision-making requires the availability of the right information to the right person at the right time.
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THE BENEFITS OF ECONOMICS IN MANAGEMENT
Economics in management helps in the evaluation of past managerial policies on whether they are appropriate or they need improvement. Evaluation of policies is necessary for new remedies or effective decision-making to adapt to the current problem. Moreover, managerial economics helps managers to recognize and identify economic strengths and weaknesses that may affect the company. Also, it helps an organization to make rational managerial decisions that are in line with its operational standards. Additionally, it helps in the identification of costs to help the organization run its activities as efficiently as possible.
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THE PROCESS OF EFFECTIVE DECISION-MAKING
Fundamentally, effective decision-making begins with the identification and definition of the problem. Additionally, this step affects all the steps that follow in the decision-making process. The next step is identifying limiting factors. Additionally, managers need to have ideal resources such as time, information, personnel, equipment, and supplies to make rational managerial decisions. They should then develop potential alternatives to the problem. Economics in management helps in coming up with a quality alternative to choose from. This is through the analysis of the economic situation.
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