Contents
Managerial Economics and Organizational Architecture
Rationale
Managerial economics (also called business economics), is a branch of economics that applies microeconomic analysis to specific business decisions. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation, Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example rhrough use of operations research and programming.
Almost any business decision can be analysed with managerial economics techniques, but it is most commonly applied to:
Risk analysis - various uncertainty models, decision rules, and risk quantification techniques are used to assess the riskiness of a decision.
Production analysis - microeconomic techniques are used to analyse production efficiency, optimum factor allocation, costs, economies of scale and to estimate the firm's cost function.
Pricing analysis - microeconomic techniques are used to analyse various pricing decisions including transfer pricing, joint product pricing, price discrimination, price elasticity estimations, and choosing the optimum pricing method.
Capital budgeting - Investment theory is used to examine a firm's capital purchasing decisions.
At universities, the subject is taught primarily to advanced undergrads. It is approached as an integration subject. That is, it integrates many concepts from a wide variety of prerequisite courses. In the UK it is possible to read for a degree in Business Economics which is often comprised of managerial economics, financial economics and industrial economics.
External Sources and Links
- William J. Baumol (1961) "What Can Economic Theory Contribute to Managerial Economics?,"
- Ivan Png (2002) Managerial Economics, Malden, MA: Blackwell.
- Keith Weigelt (2006). Managerial Economics
- Elmer G. Wiens The Public Firm with Managerial Incentives
- NA, (2007). "managerial economics," Encyclopædia Britannica online Concise Encyclopedia entry.
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Teaching and Learning Resources
Introduction. The Economist's View of Behavior
In economics, business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate revenue.
The
etymology of "business" refers to the state of being busy,
in the context of the individual as well as the community or society.
The term "business" has at least three usages,
depending on the scope — the general usage (above), the singular
usage to refer to a particular company or corporation,
and the generalized usage to refer to a particular market
sector, such as "the record business," "the computer business,"
or "the business community" - the community of suppliers of goods
The singular "business" can be a legally-recognized
entity within an economically
free society, wherein individuals organize based on expertise and skills to bring about social and technological advancement.
With some exceptions, (such as cooperatives, non-profit
organizations and (typically) government institutions), businesses are formed to earn profit and grow the personal wealth of their leaders.
In other words, the owners and operators of
a business have as one of their main objectives the receipt
or generation of a financial
return in exchange for their work — that is, the expense of time, energy,
and money.
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Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business.
Commercial Street, Bangalore, India
The Bank of England in Threadneedle Street, London, England.
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A risk premium is the minimum difference between the expected value of an uncertain bet that a person is willing to take and the certain value that he is indifferent to.
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An indifference curve is a graph showing combinations of goods for which a consumer is indifferent, that is, it has no preference for one combination versus another, as they render the same level of satisfaction for the consumer. Indifference curves are a device to represent preferences and are used in choice theory.
- Indifference analysis (ppt)
Markets, Organizations, and the Role of Knowledge
Tutorials
- Markets, Organizations, and the Role of Knowledge
- Introduction to Markets
- Markets, Efficiency and the Public Interest
- The Market System
- Relationship Between Money and Goods Markets
- Products, Markets and Advertising
Readings
A market is, as defined in economics,
a social arrangement that allows buyers and sellers to discover
information and carry out a voluntary exchange. Along with a right
to own property, it is one of the two key institutions that
organize trade.
The existence of markets is one of the key components of capitalism.
Though markets are often viewed as being located in a physical marketplace that allow a face-to-face meeting, markets may exist in any medium
that allows social interaction, such as through mail or over the
Internet.
See also
A market system is any systematic process enabling many market players to bid and ask: helping bidders and sellers interact and make deals. It is not just the price mechanism but the entire system of regulation, qualification, credentials, reputations and clearing that surrounds that mechanism and makes it operate in a social context.[1]
Because a market system relies on the assumption that players are constantly involved and unequally enabled, a market system is distinguished specifically from a voting system where candidates seek the support of voters on a less regular basis. However, the interactions between market and voting systems are an important aspect of political economy, and some argue they are hard to differentiate, e.g. systems like cumulative voting and runoff voting involve a degree of market-like bargaining and tradeoff, rather than simple statements of choice.
- Capitalism
- Financial capital
- Free price system
- Market abolitionism
- Market forms
- Money
- Moral purchasing
- Risk
- Voting system
- References
The knowledge-based theory of the firm considers knowledge as the most strategically significant resource of the firm. Its proponents argue that because knowledge-based resources are usually difficult to imitate and socially complex, heterogeneous knowledge bases and capabilities among firms are the major determinants of sustained competitive advantage and superior corporate performance. This knowledge is embedded and carried through multiple entities including organizational culture and identity, policies, routines, documents, systems, and employees. Originating from the strategic management literature, this perspective builds upon and extends the resource-based view of the firm (RBV) initially promoted by Penrose (1959) and later expanded by others (Wernerfelt 1984, Barney 1991, Conner 1991). Although the resource-based view of the firm recognizes the important role of knowledge in firms that achieve a competitive advantage, proponents of the knowledge-based view argue that the resource-based perspective does not go far enough. Specifically, the RBV treats knowledge as a generic resource, rather than having special characteristics. It therefore does not distinguish between different types of knowledge-based capabilities. Information technologies can play an important role in the knowledge-based view of the firm in that information systems can be used to synthesize, enhance, and expedite large-scale intra- and inter-firm knowledge management (Alavi and Leidner 2001). |
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Activities
Image: The trade in fake Rolexes
contributes to the underground market.
Copyright: Nick Colomb
Image copyright: Simon Gray
Image: One of Lifestyle plc's products are 'over the counter'
medicines. Copyright: Julie Elliott
Demand, Production and Cost
Tutorials
- Demand, Production and Cost
- Aggregate Demand and Supply
- Aggregate Supply, Unemployment and Inflation
- Production and Cost
Readings
In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay[1] (see also supply and demand). The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time.
Economists record demand on a demand schedule and plot it on a graph as a demand curve that is usually downward sloping. The downward slope reflects the relationship between price and quantity demanded: as price decreases, quantity demanded increases. In principle, each consumer has a demand curve for any product that he or she would consider buying, and the consumer's demand curve is equal to the marginal utility (benefit) curve. When the demand curves of all consumers are added up, the result is the market demand curve for that product. If there are no externalities, the market demand curve is also equal to the social utility (benefit) curve.
Elements of the Law of Demand As Melvin and Boyes note the law of demand is defined as:
- The quantity of a well defined good or service that:
- People are willing and able to buy.
- During a particular period of time.
- Decreases/increases as the price of that good or service rises/falls
- All other factors remain constant.
Melvin and Boyes (2010)
Demand is a relationship between two variables price and quantity demanded with all other factors that could affect demand being held constant.
well defined'- The key phrase in the first element is “well defined”. The purpose of the phrase is to ensure that we are examining the relationship between price and quantity demanded for the same good. If we are interested in demand for a particular good there is no reason to compare the relationship between the price of the good and the change in quantity demanded of a different goods. Goods are well defined if they share the same characteristics - brand, model, age, quality and performance to name a few. For example a Cadillac CTS-V is a high performance car manufactured by General Motors. The defining feature of the car is its engine a a supercharged OHV 6.2 liter L V-8. The engine produces 556 horsepower and 551 lb·ft of torque. The enables the to go from zero to 60 in 3.9 seconds. The car cost about 65,000.00. If we are interested in the demand for the CTS-V we need to compare the price of a CTS-V to the quantity demanded for a CTS-V and not a Ford Festiva.
willing and able - to participate in the market a consumer must not only be willing to buy a good she must be able to buy as well. For example, John may want to buy a Cadillac CTS. However unless he has the cash or credit to consummate the purchase his unrealized desires are irrelevant.[2]
particular time period - demand measures the rate at which goods are being purchased during a specified period of time. For example to say that four thousand units are sold at a price of 65,000 does not tell us the level of demand unless we specify the time period per day per week per month.
nature of the relationship - this portion of the definition establishes that the price and quantity demanded have a negative or inverse relationship along the demand curve. [3]
held constant ; there are innumerable factors other than price than can affect the level of demand. Some of the more important are income, price of related goods[4], number of buyers, expectations and tastes and preferences.[5] To focus on the cause and effect relationship between the good's own price and the quantity of the good demanded all these other factors must be held constant. To hold a variable constant means to freeze its value and not allow it to change.
- Demand schedule
- Factors affecting demand
- Demand function and demand sequation
- Demand curve
- Income and Substitution Effects
- Discrete goods
- Movements versus shifts
- From individual to market demand curve
- Price elasticity of demand (PED)
- Market structure and the demand curve
- Inverse demand function
- Residual demand curve
- Is the demand curve for PC firm really flat?
- Demand chain
- Demand curve
- Demand schedule
- Derived demand
- Law of demand
- Law of supply
- Supply (economics)
- Supply and demand
- Utility
- Notes
In macroeconomics, aggregate demand (AD) is the total demand for final goods and services in the economy (Y) at a given time and price level.[1] It is the amount of goods and services in the economy that will be purchased at all possible price levels.[2] This is the demand for the gross domestic product of a country when inventory levels are static. It is often called effective demand, though at other times this term is distinguished.
It is often cited that the aggregate demand curve is downward sloping because at lower price levels a greater quantity is demanded. While this is correct at the microeconomic, single good level, at the aggregate level this is incorrect. The aggregate demand curve is in fact downward sloping as a result of three distinct effects; Pigou's wealth effect, the Keynes' interest rate effect and the Mundell-Fleming exchange-rate effect.
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In microeconomic theory, the partial equilibrium Supply and demand economic model originally developed by Alfred Marshall attempts to describe, explain, and predict changes in the price and quantity of goods sold in competitive markets. The model is only a first approximation for describing an imperfectly competitive market. It formalizes the theories used by some economists before Marshall and is one of the most fundamental models of some modern economic schools, widely used as a basic building block in a wide range of more detailed economic models and theories. The theory of supply and demand is important for some economic schools' understanding of a market economy in that it is an explanation of the mechanism by which many resource allocation decisions are made. However, unlike general equilibrium models, supply schedules in this partial equilibrium model are fixed by unexplained forces.
In microeconomics, production is the act of making things, in particular the act of making products that will be traded or sold commercially. Production decisions concentrate on what goods to produce, how to produce them, the costs of producing them, and optimizing the mix of resource inputs used in their production. This production information can then be combined with market information (like demand and marginal revenue) to determine the quantity of products to produce and the optimum pricing.
(In macroeconomics,
production is measured by gross
domestic product and other measures
of national income and
output.)
In economics, business, and accounting, a cost is the value of inputs that have been used up to produce something, and hence are not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production. Costs are often further described based on their timing or their applicability.
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In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can compose any of the factors of production (including labour, capital, or land) and taxation.
The theory makes the most sense under assumptions of constant returns to scale and the existence of just one non-produced factor of production. These are the assumptions of the so-called non-substitution theorem. Under these assumptions, the long run price of a commodity is equal to the sum of the cost of the inputs into that commodity, including interest charges.
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Activities
Image copyright: Michael Slonecker
Market Structure, Pricing with Market Power
Tutorials
Readings
In economics, market structure (also known as the number of firms producing identical products.)
Monopolistic competition, also called competitive market, where there are a large number of firms, each having a small proportion of the market share and slightly differentiated products.
Oligopoly, in which a market is dominated by a small number of firms that together control the majority of the market share.
Duopoly, a special case of an oligopoly with two firms.
Oligopsony, a market, where many sellers can be present but meet only a few buyers.
Monopoly, where there is only one provider of a product or service.
Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. A firm is a natural monopoly if it is able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms.
Monopsony, when there is only one buyer in a market.
Perfect competition is a theoretical market structure that features unlimited contestability (or no barriers to entry), an unlimited number of producers and consumers, and a perfectly elastic demand curve.
The imperfectly competitive structure is quite identical to the realistic market conditions where some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the market conditions. The elements of Market Structure include the number and size distribution of firms, entry conditions, and the extent of differentiation.
These somewhat abstract concerns tend to determine some but not all details of a specific concrete market system where buyers and sellers actually meet and commit to trade. Competition is useful because it reveals actual customer demand and induces the seller (operator) to provide service quality levels and price levels that buyers (customers) want, typically subject to the seller’s financial need to cover its costs. In other words, competition can align the seller’s interests with the buyer’s interests and can cause the seller to reveal his true costs and other private information. In the absence of perfect competition, three basic approaches can be adopted to deal with problems related to the control of market power and an asymmetry between the government and the operator with respect to objectives and information: (a) subjecting the operator to competitive pressures, (b) gathering information on the operator and the market, and (c) applying incentive regulation.[1]
See also
- Economics
- Microeconomics
- Macroeconomics
- Industrial organization
- List of marketing topics
- List of management topics
- List of economics topics
- List of accounting topics
- List of finance topics
- List of economists
External links
Microeconomics by Elmer G. Wiens: Online Interactive Models of Oligopoly, Differentiated Oligopoly, and Monopolistic Competition
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, Microeconomicsmarket place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers.
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Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing.
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External links and further reading
Economics of Strategy: Creating and Capturing Value, Economics of Strategy: Game Theory
Tutorials
Readings
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others.[1] An alternative term suggested "as a more descriptive name for the discipline" is interactive decision theory.[2] Game theory is mainly used in economics, political science, and psychology, and other, more prescribed sciences, like logic or biology. The subject first addressed zero-sum games, such that one person's gains exactly equal net losses of the other participant(s). Today, however, game theory applies to a wide range of class relations, and has developed into an umbrella term for the logical side of science, to include both human and non-humans, like computers. Classic uses include a sense of balance in numerous games, where each person has found or developed a tactic that cannot successfully better his results, given the other approach.
Mathematical game theory had beginnings with some publications by Émile Borel, which led to his book Applications aux Jeux de Hasard. However, his results were limited, and the theory regarding the non-existence of blended-strategy equilibrium in two-player games was incorrect. Modern game theory began with the idea regarding the existence of mixed-strategy equilibria in two-person zero-sum games and its proof by John von Neumann. Von Neumann's original proof used Brouwer's fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathematical economics. His paper was followed by his 1944 book Theory of Games and Economic Behavior, with Oskar Morgenstern, which considered cooperative games of several players. The second edition of this book provided an axiomatic theory of expected utility, which allowed mathematical statisticians and economists to treat decision-making under uncertainty.
This theory was developed extensively in the 1950s by many scholars. Game theory was later explicitly applied to biology in the 1970s, although similar developments go back at least as far as the 1930s. Game theory has been widely recognized as an important tool in many fields. Eight game-theorists have won the Nobel Memorial Prize in Economic Sciences, and John Maynard Smith was awarded the Crafoord Prize for his application of game theory to biology.
- History
- Representation of games
- General and applied uses
- Types of games
- Cooperative or non-cooperative
- Symmetric and asymmetric
- Zero-sum and non-zero-sum
- Simultaneous and sequential
- Perfect information and imperfect information
- Combinatorial games
- Infinitely long games
- Discrete and continuous games
- Many-player and population games
- Stochastic outcomes (and relation to other fields)
- Metagames
- Chainstore paradox
- Combinatorial game theory
- Glossary of game theory
- Intra-household bargaining
- List of games in game theory
- Quantum game theory
- Rationality
- Reverse Game Theory
- Self-confirming equilibrium
- Parrondo's paradox
- Notes
- References and further reading
External links
Incentive
Conflicts and Contracts, Organizational
Architecture
Tutorials
Readings
Incentive Conflicts
Organizational architecture has two very different meanings. In one sense it literally refers to the organization in its built environment and in another sense it refers to architecture metaphorically, as a structure which fleshes out the organizations.
Organizational architecture or organizational space: the influence of the spatial environment on humans in and around organizations.
Organizational architecture or organization design: the creation of roles, processes, and formal reporting relationships in an organization.
Organizational space describes the influence of the spatial environment on the health, the mind, and the behavior of humans in and around organizations (Mobach, 2009). It is an area of research in which interdisciplinarity is a central perspective. It draws from management, organization and architecture (Dale en Burrell, 2008) added with knowledge from, for instance, environmental psychology, social medicine, or spatial science. In essence, it may be regarded as a special field of expertise of organization studies and change management (people) applied to architecture. This perspective on organizational architecture is elaborated in organizational space.
Organization design or architecture of an organization as a metaphor provides the framework through which an organization aims to realize its core qualities as specified in its vision statement. It provides the infrastructure into which business processes are deployed and ensures that the organization's core qualities are realized across the business processes deployed within the organization. In this way organizations aim to consistently realize their core qualities across the services they offer to their clients. This perspective on organizational architecture is elaborated below.
- Content
- Approaches to organizational design
- Characteristics of effective organizational design
- Differentiation and Integration
- The role of management
Decision Rights: The Level of Empowerment, Decision Rights: Bundling Tasks into Jobs and Subunits
Tutorials
Readings
Like the four nucleotides that comprise human DNA, there are four basic building blocks in any organization’s DNA—decision rights, information, motivators, and structure. These building blocks and the way they combine and recombine largely determine how an organization behaves, and whether it can achieve its mission.
Empowerment refers to increasing the spiritual, political, social, racial, educational, gender or economic strength of individuals and communities. It often involves the empowered developing confidence in their own capacities.
- Definitions
- Marginalization
- Women empowerment
- The process of empowerment
- Workplace empowerment
- Economics
- References
- Notes
- Decentralization
- Self-ownership
- Employee engagement
- Youth empowerment
- Black economic empowerment
- Angela Rose
Attracting and Retaining Qualified Employees, Incentive Compensation
Tutorials
Readings
Employee turnover and retention
Employee turnover
Employee turnover refers to the proportion of employees who leave an organisation over a set period (often on a year-on-year basis), expressed as a percentage of total workforce numbers.
At its broadest, the term is used to encompass all leavers, both voluntary and involuntary, including those who resign, retire or are made redundant, in which case it may be described as ‘overall’ or ‘crude’ employee turnover. It is also possible to calculate more specific breakdowns of turnover data, such as redundancy-related turnover or resignation levels, with the latter particularly useful for employers in assessing the effectiveness of people management in their organisations
Retention
Retention relates to the extent to which an employer retains its employees and may be measured as the proportion of employees with a specified length of service (typically one year or more) expressed as a percentage of overall workforce numbers.
- What are employee turnover and retention?
- Measuring turnover and retention
- Why do people leave organisations?
- Improving employee retention
- CIPD viewpoint
- Further reading
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Individual Performance Evaluation, Divisional Performance Evaluation
Tutorials
Readings
A performance appraisal, employee appraisal, performance review, or (career) development discussion[1] is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor.[2] A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgement of an employee's performance in a job based on considerations other than productivity alone.
Choosing the Legal Form of Organization, Vertical Integration and Outsourcing
Tutorials
Readings
In this session we will deal with three decisions every entrepreneur must make:
- Whether to go into business alone or with a partner.
- What type of business organization to use for the business: proprietorship, partnership, corporation or limited liability company.
- What professional advisors to select.
Read more ...
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration.
Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly, although it might be more appropriate to speak of this as some form of cartel.
Nineteenth century steel tycoon Andrew Carnegie introduced the concept and use of vertical integration. This led other businesspeople to use the system to promote better financial growth and efficiency in their businesses.
- Conglomerate (company)
- Vertical market
- Exclusive dealing
- Strategic management
- Zaibatsu (the Japanese approach to vertical integration)
- Chaebol (the South Korean counterpart to Zaibatsu)
- Horizontal integration
- Economic calculation problem (although mostly discussed in relation to command economies, it equally applies to firms)
- Vertical disintegration
- Alfred DuPont Chandler, Jr. (economist who wrote extensively on vertical integration)
- References
- Bibliography
Outsourcing or sub-servicing often refers to the process of contracting to a third-party.[1]
Leadership: Motivating Change within Organizations, Economics of Regulation
Tutorials
Readings
The role of a leader is to get things done and drive change through other people.
There are three main styles of leadership:
Authoritarian: The authoritarian leader makes all the decisions and tells everyone else what to do. This style is particularly prevalent in the army and emergency hospital wards.
Consultative: The consultative leader will talk to everyone involved in or affected by a task to get their views and ideas. They will also keep them informed of any changes.
Democratic: The democratic leader will go one step further than the consultative leader and actively involve others in the decision-making process rather than just considering their input. It is very much a team approach with everyone talking responsibility for making decisions.
To determine which style will be most effective for a particular person or situation, a leader needs to know how to motivate each individual they are working with.
There are many theories of motivation.
Read more ...
Change management is a structured approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state. It is an organizational process aimed at helping employees to accept and embrace changes in their current business environment.. In project management, change management refers to a project management process where changes to a project are formally introduced and approved.
See also
Regulatory economics is the economics of regulation, in the sense of the application of law by government that is used for various purposes, such as centrally-planning an economy, remedying market failure, enriching well-connected firms, or benefiting politicians (see capture). It is not considered to include voluntary regulation that may be accomplished in the private sphere.
- Regulation as a process
- Theories of regulation
- Regulation as red tape
- Deregulation
- Criticism of economic regulation
- Administrative law
- Constitutional economics
- Rule according to higher law
- Deregulation
- Trust-busting
- Liberalization
- Price-cap regulation
- Natural monopoly
- Market failure
- Public choice theory
- Regulated market
- Regulation
- Worldwide Governance Indicators
- References
World Bank "Doing Business project"
Worldwide Governance Indicators Worldwide ratings of country performances on Regulatory Quality and other governance dimensions from 1996 to present.
Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer (2002), "The Regulation of Entry", Quarterly Journal of Economics 117, Feb. 2002
Move Over, Adam Smith: The Visible Hand of Uncle Sam Report concludes that the U.S. government surreptitiously intervenes in the American stock market
Pharmaceutical Price Controls in OECD Countries Implications for U.S. Consumers, Pricing, Research and Development, and Innovation by U.S. Department of Commerce
The Competitive Enterprise Institute has a project on Economic Regulation
The Progress and Freedom Foundation houses the Institute for Regulatory Law and Economics (IRLE) in Washington, D.C.
Body of Knowledge on Infrastructure Regulation
Ethics
and Organizational Architecture. Management Innovations and Organizational Architecture
Tutorials
Readings
Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics.
Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings such as ethics codes and social responsibility charters. In some cases, corporations have redefined their core values in the light of business ethical considerations, for example, BP's "beyond petroleum" environmental tilt.
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- Business Ethics in Knowledge@Wharton, the Wharton School's online business journal.
- Business ethics section from the website of the Markkula Center for Applied Ethics
- Business Ethics Gone Wrong
- Economics and Economic Justice in the Stanford Encyclopedia of Philosophy
Innovation comes from the Latin innovationem, noun of action from innovare. The Etymology Dictionary further explains innovare as dating back to 1540 and stemming from the Latin innovatus, pp. of innovare "to renew or change," from in- "into" + novus "new".
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Innovation can therefore be seen as the process that renews something that exists and not, as is commonly assumed, the introduction of something new. Furthermore this makes clear innovation is not an economic term by origin, but dates back to the Middle Ages at least. Possibly even earlier. The central meaning of innovation thus relates to renewal. For this renewal to take place it is necessary for people to change the way they make decisions, they must choose to do things differently, make choices outside of their norm. Schumpeter c.s. (~1930) seems to have stated that innovation changes the values onto which the system is based. So when people change their value (system) the old (economic) system will tumble over to make room for the new one. When that happens innovation has occurred. On a lower level, innovation can be seen as a change in the thought process for doing something, or the useful application of new inventions or discoveries.[1] It may refer to incremental, emergent, or radical and revolutionary changes in thinking, products, processes, or organizations. Following Schumpeter (1934), contributors to the scholarly literature on innovation typically distinguish between invention, an idea made manifest, and innovation, ideas applied successfully in practice. In many fields, such as the arts, economics and government policy, something new must be substantially different to be innovative. In economics the change must increase value, customer value, or producer value. |
The goal of invention is positive change, to make someone or something better. Invention and introduction of it that leads to increased productivity is the fundamental source of increasing wealth in an economy.
Innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. Colloquially, the word "innovation" is often synonymous with the output of the process. However, economists tend to focus on the process itself, from the origination of an idea to its transformation into something useful, to its implementation; and on the system within which the process of innovation unfolds. Since innovation is also considered a major driver of the economy, especially when it leads to new product categories or increasing productivity, the factors that lead to innovation are also considered to be critical to policy makers. In particular, followers of innovation economics stress using public policy to spur innovation and growth.
Those who are directly responsible for application of inventions are often called pioneers in their field, whether they are individuals or organizations. When pioneers are followed by many others, the dominant value system may be replaced by the new one. When this happens innovation has occurred a posteriori.
Academic article on Being a Systems Innovator on SSRN
"Communication on Innovation policy: updating the Union's approach in the context of the Lisbon strategy" – The European Commission.
Commission proposes 2009 to become European Year of Creativity and Innovation – The European Commission.
PRO-INNO Europe - Innovation policy analysis and development throughout Europe (Initiative of the European Commission).
12 Innovations that Changed the World
Inno Inc's Frontier Visionary Interview with Innovators
Recommended Texts
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Managerial Economics and Organizational Architecture, 3/e James
Brickley, University of Rochester Check
the availability and buy your books from our Bookshop. |
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Industrial Economics and Organization: A European Perspective, 2/e Bernadette
Andreosso Check the availability and buy your books from our Bookshop. |
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