Economic Decision Making

Economic Decision Making

1 This question relates to the general contribution of the core knowledge from this unit to overall managerial effectiveness.

a) Outline how the core concepts in this unit relate to the overall effectiveness of managers, leaders and their organizations.

Economic decision making models help managers and economists to determine and analyze the risk factors which the business might be facing. The economic decision making models rely on various assumptions which are present in all the situations where organizations have to take crucial decisions (Edwards, 1954, pp.380). Every member of the society is involved in the process of economic decision making at some point including investors, financers, small business owners, suppliers and employees. Economic decision making works on specific criteria which are found to be universal all over the world. Organizations carry on their decision making by including the economical value of their business and the economic indicators which are currently prevailing in the country. Organizational effectiveness can be simply defined as achieving (in the near future) the goals and objectives set by the organization while meeting the expectations prevalent in the society, developing to adjust in the intermediate future and successfully surviving in the distant future. There are four basic approaches to organizational effectiveness, the goal attainment approach - which focuses on the accomplishment of goals and objectives (Quinn, 1983, pp.363), and is preferable when the goals/objectives are clear and measurable; the constituencies approach - which aims to satisfy each and every strategic constituency (at least up to a certain minimum level), and it is preferred the influence of the constituencies upon the organization is immense requiring the organization to respond immediately; the system resource approach - this approach focuses on the effectiveness in terms of procuring the required resources, and it is preferred if the there is an existence f a clear connection amid inputs and outputs; and the internal process approach - which aims to achieve effectiveness through combining internal efficiency with affective health, and is preferable when outputs, costs and satisfaction can be measured easily.

b) Describe how overall organizational effectiveness can be improved through the application of the 'body of knowledge' from this subject. Illustrate your answer with three examples from your organization or one that you are familiar with.

'Organizational effectiveness' reflects the effectiveness of an organization in achieving its predetermined goals and objectives (Armistead, 1999, pp.96). This idea is comparatively more essential for those organizations that work on charities and donations, because, the donors are increasingly interested in the outcome of the donations they make and whether the desired goal is achieved. Organizational effectiveness takes into account the performance of the organization, i.e., the numerous internal as well as external performance measures which are related to effective and efficient operations. Here, the effectiveness of organization would be mainly focused on an automobile company called Mitsubishi operating in Australia. Mitsubishi is a motor corporation which is an automaker and works as a multinational company. It's headquarter is situated in ...