|Complete Objectives and Scope of Managerial Economics|
Managerial economics is the application of economic theory and analytical tools of decision science to discuss how an organization can achieve its goals or objectives in the most efficient way. Managerial economics deals with the functional areas of business administration including accounting, finance, marketing, human resource management, and production. Managerial Economics is the application of economic theory and a set of decision science analysis. This science discusses how an organization or business can achieve its goals in an effective and efficient manner. Simply put, managerial economics intends to combine the science of economics and decision-making. In this case managerial economics is important as the most efficient and effective strategy for running a business.
Understanding Managerial Economics According to Experts
Evan J. Douglas (1995)
According to Evan J. Douglas, Managerial Economics is a branch of science that deals with the application of the principles of economic methodology in the decision-making process of companies or organizations.
According to McConnel, Managerial Economics is a very useful analytical tool for managers in making business decisions. As the name implies, managerial economics is a hybrid of economics and management science.
According to Ket, Managerial Economics is the science and art of how to organize and allocate limited company resources to achieve desired goals.
Dominic Salvatore (1996)
According to Dominic Salvatore, Managerial Economics is knowledge that shows the application of economic theory and knowledge analysis to decision making that examines how organizations can achieve goals efficiently.
According to Hirschey, Managerial Economics is the application of economic theory and methods in managerial and administrative decision-making processes.
The Role and Purpose of Managerial Economics
The roles and objectives of managerial economics include:
• As an evaluation tool if there is a change of new manager.
• Help managers solve problems.
• Help manage finances.
• Knowing the industrial environment, companies and the economy.
• Gain company profits.
Scope of Managerial Economics
The scope of managerial
The existence of economic theory can be a reference for decision making. Economic theory itself consists of macroeconomic theory and microeconomic theory. Microeconomics includes a range of theories regarding decision making based on economic behavior such as resource owners, free trade systems and individual consumers. While the macro theory of the decision-making system based on output, income, investment, consumption, employment and economic aggregates.
The principle of managerial economics is based on the allocation of scarce resources such as the principle of "Man, Money, Material, Method". The role of managerial economics in managerial decision making must apply economic theories and methods. Then both are combined with tools and techniques of economic analysis for optimal managerial problem solving.
Mathematics and econometrics or statistics can be used as decision models that aim to determine the optimal steps for a company or business to achieve goals.
Administrative science in business can serve as a theoretical background for decision making including finance, accounting, human resource management and marketing as well as production management. Thus the discussion article on "Understanding Managerial Economics, Roles and Objectives and the Complete Scope of Managerial Economics", may be useful.