Marketing Assignment: Goals And Economic Decision Making

Goals And Economic Decision Making
Name
Institution
Date
How a company's goals, constraints, incentives and market rivalry affects its economic decision-making.
Economic decisions are made by optimizing individual principles of economics. To understand a company's success or failure, we need to analyze decision-making based on its principle of market economy and strategic actions (Gitman, Juchau & Flanagan, 2015). Understanding managerial economics is important because it influences the decision-making process. The manager's role is critical in the decision-making process because their duties include delegating tasks, making decisions regarding purchases, inputs used in the production process (Gitman, Juchau & Flanagan, 2015).
Making an economic decision is important because it means making choices when resources are limited; manager needs to allocate resources to meet the overall goal (Gitman, Juchau & Flanagan, 2015). At big firms, different department has different goals, for example, the marketing department needs to create more awareness using specific resources to maximize sales or increase market share. A financial department goal is to focus on financial growth by allocating each department incentive to achieve the desired goals (Hahn et al., 2014).
Market constraints can hinder managers from achieving the set goals of increasing its market share. Some of the common constraints include limited technology and prices of inputs used for production (Hahn et al., 2014). Managers need to make critical decisions on which type of technology to use the amount of input to be purchased, how much to produce and how to react to competitors (Hahn et al., 2014). To understand how the three factors of constraints, incentive, and market rivalry affect the economic decision, it is important to analyze these factors.
In a company incentive influence, how resources are utilized and how much effort workers can put, to meet its objective. The manager needs to have a clear understanding how to maximize production using incentives. Managers need to construct incentive by understanding the difference between how the company is and how they wish the company were, meaning increasing profits (Pettigrew, 2014). In most cases commissions are offered based on the number of sales realized, employees who put a little effort, they little pay, but if they put more effort, they receive more commission (Pettigrew, 2014).
It is up to the manager to understand the thrust of managerial economic to make sound economic decisions by structuring appropriate incentives. During the decision-making process, managers may face several constraints that might affect their ability to achieve its goal, for example, limited resources ar...