What Are The Objectives Of Managerial Economics

As for external factors one of the external factors would be perhaps a new law that is given and affects directly or indirectly the business and that business needs to make some changes.

There are two types of social factors that can affect a business; there is external affects and internal affects. Internal affects are about demographics and lifestyle whereas external is about social costs and benefits

External environmental factors are the macro environment affecting a business; they are factors outside the company and which they have no control over (Kotler & Armstrong, n.d.) these external factors bring about impacts to the company thus a company should always be prepared to react.

The CEO of this company began to take steps into making the company better. Both external and internal driving forces drove this change. The definition of these two terms needs to be looked at in order to understand what they were. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. These factors are outside the influence of the company (Lindbald, 2014). On the other hand, internal factors are factors that occur within the scope of the organization and are within the control of the company.

* Factors of internal environment include risk management philosophy, risk appetite, board of directors, etc.

Kessler, E. H. (Ed.) (2013). Encyclopedia of management theory (Vols. 1-2). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781452276090

Internal factors are those that can be addressed within the organization. This would include conditions that might be addressed by operating procedures and/or management decisions. Management teams will be most effective in working in this area: perfect example is Southwest’s Tuesday meetings. External factors are those over which you have little influence, or are not in a position to change, but which have a direct influence on the success of your business: in this case, Continental Lite and Shuttle By United.

Business managers are microeconomic market participants. Microeconomics helps businesses to make important decisions by providing analytic tools about firms and market structures to improve a company’s business practices.

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Internal Factors: Internal factors are the factors within the company, which affects the success and operation of business. The company can control these factors. Effective internal management is the key to the successful business.

Kessler, E. H. (Ed.) (2013). Encyclopedia of management theory (Vols. 1-2). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781452276090

In business it is essential for owners to consider important factors when mapping out their business objectives. Economics used as a tool to solve coordination problems. They include what and how much product to produce, how to produce their product, and for whom they are producing. In order to effectively answer these questions, economics is used. Colander (2006) describes economics as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society” (p. 4). The foundation of economics is based on several factors that assist in understanding an economy.

It is defined as all the forces or conditions that are available within an environment that affects an organization and business. It is also known as controllable factors because business can control them. The internal environment deals with the management of resources like human resources, physical resources, technology, monetary resources and others that constitute the organization in order to implement or execute a strategy. Internal environment also includes culture and other intangible aspects like teamwork, coordination, efficiency level of employees, employee’s salaries and monitoring costs. The strategy for competition should also be in sync with the internal resources especially the internal environment.

     In the managerial perspective, the economy is seen as a process of three different factors: industrialization, elite competition and bureaucratic rationalization.

Factors that happen in the external environment are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. The main factor that affects most business is the degree of competition - how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are: