TAILIEUCHUNG - Microeconomics for MBAs 18

Microeconomics for MBAs 18. The Economic Way of Thinking for Managers. Microeconomics for MBAs develops the economic way of thinking through problems that MBA students will find relevant to their career goals. Maths is kept simple and the theory is illustrated with real-life scenarios | Chapter 5 The Logic of Group Behavior In Business and Elsewhere 39 In addition we suggest that since people who are alike tend to cooperate the more alike the members the larger the team can be. The more training team members are given in cooperation the larger the teams can be. Training in other words can pay not only because it makes workers more productive given how much the workers know how to do but also because it can reduce the added overhead of a larger number of smaller departments. However a lot depends on the type of training given workers. Apparently economists using their maximizing models and the firmly held belief that everyone will shirk when they can are inclined to play whatever margins are available to their own personal advantage or to shirk when feasible to a degree not true of other As a consequence it probably follows that the more economists and other people with similar conceptual leanings employed the smaller the team can be. Although we may never have intended it we must fear that the people who read this book may be less disposed to cooperate than they were before they picked it up. The more workers are imbued with a corporate culture and accept the firm s goals the larger the team can be. The expenditures by corporate leaders trying to define the firm s purpose can be self-financing given that the resulting larger departments can release financial and real resources. The more detectable or measurable are the outputs of individual team members by other team members the larger the team can be. Firms thereby have an economic interest in developing ways to make work or what is produced objective. Finally the greater the importance of quality the more important team production should be and the smaller teams will tend to be. No matter how it is done the size of the teams within a firm can affect the overall size of the firm. Firms with teams that are too large or too small can have unnecessarily high cost structures that can

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