TAILIEUCHUNG - Microeconomics for MBAs 4

Microeconomics for MBAs 4. 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 1. The Economic Way of Thinking 30 restaurants have depended upon the quality of their burgers and the cleanliness of their rest rooms. Some firms have failed not because they have done anything wrong but rather they have not done as much right as have their competitors. Many textile firms in the southeast part of the country have folded over the last two decades in spite of their substantial efforts to improve their productivity and increase quality. The failing firms closed their doors simply because they were not able meet the competition from lower-priced textile imports and from textiles produced by even more aggressive and successful domestic textile Many firms have failed because they did not pay attention to their costs or because their managers were not very smart in setting their firms product and service strategies to meet the changes in their markets. Even the 9 11 ctatrophy several major airlines and scores of smaller ones have folded their wings over the last two decades because their planes and personnel were too expensive relative to the value of the service they provided and therefore relative to the prices they could charge in deregulated skies. We agree that a lot of things are important to success in business not the least of which are the leadership of managers worker skills and character firm strategies and cost-control methods. One of the more important points managers must remember is that incentives can be very powerful forces within a firm for good and bad This means managers must pay attention to the art and logic of getting incentives right. In the Manager s Corner sections that are included in every chapter we will examine a large number of different questions related to the organization of production within firms most of which relate to incentives in one way or another How large should firms be Do workers want tough bosses Why don t more firms pay piece rate What difference does debt make What good are corporate .

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• The Economic Way of Thinking
• Competitive Product Markets
• Principles of Rational Behavior
• Society and Business
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