Economics in management is a stream of management that emphasizes solving business problems and the managerial decision-making process. This is through the application of principles of microeconomics and macroeconomics. Additionally, it deals with the internal issues of an organization by using different economic theories. Moreover, it helps the management by using the best techniques and analytical skills in solving complex issues and planning for the future. Moreover, it helps a business to determine a strategy on the operation, pricing, investment, risk, and production. Managerial decision-making is an activity that organizations take part in their daily activities. A good managerial decision-making process considers the available options and makes the most suitable decision.
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THE ROLE OF ECONOMICS IN MANAGEMENT
Economics in management helps an organization to study economic patterns at a macro-level and analyze its significance and functioning in the organization. Also, it helps an organization to examine how changing environments are profitable to those in the organization. Additionally, it helps in the managerial decision-making process to make sound decisions and choose the best alternative available. Moreover, it provides economic information such as competitor products and prices to help in planning for the future. It also assists businesses to determine the pricing strategies and appropriate pricing levels for products and services.
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CRITICAL STEPS IN THE MANAGERIAL DECISION-MAKING PROCESS
Essentially, the managerial decision-making process begins with gathering information and establishing objectives. This is an important step in growing the style of management and planning for the future. Secondly, the management should identify the alternatives before picking on one. At this point, it is important to focus on coming up with the right answer. The management then compares and evaluates these alternatives and makes a choice. The organization then finally implements the decision. Economics in management guides the organization in making such decisions.
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