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Managerial Economics Essay

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1924 words
1924 words
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Managerial Economics In order for any company to succeed there are a lot of things that require to be done. Looking at McDonalds’s, you will realize that the management has put a lot efforts to ensure that the company has incorporated managerial economics in its operation. This is one of the reasons why the company has attained great success that most other companies have not been able to. There are different topics within a company that can determine how managerial economics is incorporated in a company. Spear Company limited is a company that deals with production of clothes and it has been operation since 1990. The company has borrowed a lot of its managerial issues from McDonalds’s. To bring this issues well let us look at how the company …show more content…

In this essay, the author

  • Explains mcdonald's has different structures which makes it management more effective. these are the same structures that spear company limited has adopted.
  • Explains that the chain of command is clear and short. it has narrow control spans, high level centralization, formalization and specialization.
  • Explains that this structure works well in a company since it deals with different types of clothes. its disadvantage is that it can be hard to scale and at times the company ends up duplicating resources.
  • Explains the structure in the company that is based on the end to end flow of wide range of processes such as order fulfillment, research and development, and customer acquisition.
  • Explains that spear company limited has achieved great success because the managers have applied effective leadership.
  • Explains that the managers in the company have been able to install high level discipline among the employees. they act as good role models to employees when it comes to matters of discipline.
  • Explains that the company's leadership has provided a clear vision, and all employees are encouraged to adhere to it to help it achieve its overall goals.
  • Explains that the management understands the importance of tactical planning in helping the company achieve its goals. employees and other stakeholders are encouraged to offer their input during the planning and execution planning.
  • Explains that the company management has invested heavily in monitoring and evaluation systems that have helped it attain most of the goals set.
  • Explains that the top management has been in the forefront in giving the right support to other employees. this includes on job training, incentives, rewards, promotions, and other support needed to help the company achieve its goals.
  • Explains how spear company limited has come up with ethical programs that are geared towards ensuring that the company attains its goals and instills high level discipline in it.
  • Explains that a code of ethics is available for all employees and other stakeholders in the company to adhere to.
  • Explains that social responsibility is another aspect that is integrated in the ethical program of the company.
  • Explains that annual training ensures that all employees and stakeholders are updated on changes in their ethical behaviors and continue to behave ethically for the good of the company and the community in general.
  • Explains that fairness is one of the ethical practices promoted by the company. it is observed in recruitment and selection, purchasing policy, pricing and in all other areas.
  • Explains that every company must take risks to succeed. risks mean that the company has the chance of not getting the return desired for the investment made.
  • Describes the risks that the company has taken by operating within the clothing and fashion business for a specific period according to the strategic plan set.
  • Explains the risks associated with adhering to legislative or regulatory requirements in the business operations. there are some regulations that might not work for the company.
  • Explains that a company's biggest risk is the way it handles its finances. it involves customers giving credit, the duration, and those who bring more funds to the company.
  • Explains that operational risks do not bring in return like financial or strategic risks. these include company internal processes, system or people failures.
  • Describes beatty, quinn, et al. strategic command taking the long view for organizational success. leadership in action.
  • Analyzes how mcdonalds's management has incorporated managerial economics in its operation. spear company limited has borrowed a lot of its managerial issues from mcdonald’s.
  • Explains the importance of managerial economics in managing risks and achieving competitive advantage.
  • Describes jolly, a., rowe, w.g. (2001). managing business risk: a practical guide to protecting your business.

This is one of the risks that the company usually takes very carefully because it takes a lot of efforts, time and money to build again if it is lost. It is very important to understand all the six topics discussed above, because they are of great importance in managerial economics. Understanding all the issues involved in the topics makes it easy to manage all the aspects involved of running the business. It will be possible to take manage risks and ensure that they do not bring any negative effects that might affect the company in a great way. It will also be possible to carry all other management in an effective way making the company to attain competitive edge over others (Rowe, 2001). Managerial economics fits into the topics discussed because this is an area that gives explanation on how resources such as money, technology, land, and labor. It looks on how all these resources should be allocated in a more efficient manner. By understanding managerial economics it is possible to make the right decision regarding all the above topics. The managers have the ability to apply managerial economics to make strategies and solve critical business problems (Rowe,

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