KIZILDENIZ-Administrative Economy

Administrative Economy

What is the specialty of Administrative Economy:

Administrative economics is a branch of economics that involves the application of economic methods in administrative decision-making. The management economy aims to provide a decision-making framework aimed at maximizing the company's profits and results. The management economy focuses on increasing the efficiency of organizations by employing all possible business resources to increase production while reducing unproductive activities. The main purposes of the administrative economy are:

To improve decision-making when a company faces problems or obstacles, taking into account macroeconomic and microeconomic theories and principles.

To analyze the potential impacts and impacts of short- and long-term planning decisions on business income and profitability.

To improve economic decisions properly, management economics objectives may include the use of process research, sports programming, strategic decision-making, game theory, and other computational methods. The above methods are commonly used to make quantitative decisions through data analysis techniques.

Administrative economics theory includes a focus on; incentives, entrepreneurship, biases, advertising, innovation, uncertainty, pricing, analysis, and competition. In other words, administrative economics is a combination of economic and administrative theories. Assists the manager in decision-making and acts as a link between practice and theory. Furthermore, management economics provides the machinery and techniques for managers to make the best possible decisions for any scenario.

Some examples of the types of questions that might be answered by the tools provided by administrative economics;

The price and quantity of the commodity that the company must produce.

Whether to invest in current employees through training or going to market for employees.

Management economics is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to the decision-making methods of companies or other management units to help managers make a wide range of multifaceted decisions. Calculation and quantitative analysis rely heavily on techniques such as regression and correlation analysis and calculus.

History of Administrative Economy Specialization:

The production of a good or service usually requires a series of activities organized in a vertical chain. Production activities usually flow from source suppliers of raw inputs to manufacturers, distributors, or retailers. "The greater the ownership of the company in successive stages of the value chain of its product, the greater the degree of vertical integration" (Grant, 2010, pp. 354). In this article, vertical integration with the economics of embedded transaction cost and its studies will be explained mainly against Gulf Business Machine (GBM). GBM is IBM's business partner and the sole distributor of IBM programs in the Bay Area.

The importance of studying the specialty of Administrative Economy:

Management economics can be defined as the integration of economic theory with business practices to facilitate decision-making and future planning by management. Management economics helps company managers to find a logical solution to the obstacles they face in company activities. He uses theory and economic concepts. Assists in the formulation of logical management decisions.

The key to management economics is the company's microeconomic theory. It reduces the gap between the economy in theory and the economy in practice. Management economics is a science that deals with the effective use of scarce resources. Guides managers in making decisions concerning company customers, competitors, and suppliers as well as regarding the internal performance of the company. Use statistical and analytical tools to assess economic theories in solving practical business problems.

The study of management economics helps to enhance analytical skills and helps with rational formation as well as problem-solving. While microeconomics is the study of decisions on resource allocation and prices of goods and services, macroeconomics is the area of economics that examines the behavior of the economy as a whole (i.e., entire industries and economies). Administrative economics applies microeconomic tools for business decision-making. He deals with a company.

The use of the management economy is not limited to firms and for-profit enterprises. However, it can also be used to assist in the decision-making process of non-profit organizations (hospitals, educational institutions, etc.). It enables the optimal use of scarce resources in such organizations and also helps to achieve the Goals in the most efficient manner. Management economics greatly assists in price analysis, production analysis, capital budgeting, risk analysis, and demand identification.

Administrative economics uses both economic theory and econometrics to make rational management decisions. Econometrics is defined as the use of statistical tools to assess economic theories by measuring the experimental relationship between economic variables. Uses realistic data to solve economic problems. Management economics is related to economic theory, which constitutes "corporate theory." The company theory states that the primary objective of the company is to maximize wealth. Decision-making in the management economy generally involves defining company objectives, identifying the problems involved in achieving those goals, developing different alternative solutions, selecting the best alternative, and ultimately implementing the decision.

Administrative Economy courses: