Write a note on management?

Ans:-Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected goals1.

In other words, “Management is the process of planning, organizing, leading, and controlling the efforts of organization members and of using all other organizational resources to achieve stated organizational goals”2.

Management focuses on the entire organization from both a short and a long-term perspective. Management aims to increase the effectiveness of organizations. It's about making the most of the resources entrusted to you, and making sure the expectations of customers, employees and shareholders are met.

Traditionally, management includes the following:

planning organizing leading controlling

More specifically, management is responsible for the primary activities of the firm; those being inbound logistics, operations, outbound logistics, marketing and sales, and service.

Management is also responsible for the support activities of infrastructure (accounting, finance, strategic planning), human resource management (recruiting, training and development, compensation management), technology development (product and process improvement), and procurement (material acquisition).

Management crosses cultural boundaries as most organizations of significant size operate internationally. Primary and support activities are performed in an international context.

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Describe functions of management.

The process of management consists of certain basic management functions. The most commonly cited functions of management are planning, organizing, leading, and controlling. The functions of management define the process of management as distinct from accounting, finance, marketing, and other business functions. The individual management functions are shown in the following figure:

Four Management Functions

Planning is the first tool of the four functions in the management process. Planning is the logical thinking through goals and making the decision as to what needs to be accomplished in order to reach the organizations’ objectives. Managers use this process to plan for the future, like a blueprint to foresee problems, decide on the actions to evade difficult issues and to beat the competition.

Organizing means that managers coordinate the human and material resources of the organization. The effectiveness of an organization depends on its ability to marshal its resources to attain its goals. To ensure that objectives set by planning can be achieved, the organizing function takes the tasks identified during planning and assigns them to individuals and groups within the organization.

Leading describes how managers direct and influence subordinates, getting others to perform essential tasks. Effective leading requires the manager to motivate subordinates, communicate effectively, and effectively use

power. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort toward the attainment of organizational objectives.

Controlling makes sure the organization stays on the path that was planned for it. Gemmy Allen stated that ‘Controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle.’ Controlling consists of three steps, which include establishing performance standards, comparing actual performance against standards, and taking corrective action when necessary.

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Explain the nature of management.

Various contributions to the field of management have changed its nature. The nature of management can be described as follows:

Multidisciplinary: Management is multidisciplinary because it includes knowledge/information from various disciplines- economics, statistics, maths, psychology, sociology, ecology, operations research, history, etc. Management integrates the ideas and concepts taken from these disciplines and presents newer concepts which can be put into practice for managing the organizations.

Management is dynamic: Management has framed certain principles, which are flexible in nature and change with the changes in the environment in which an organization exits.

Relative, Not Absolute Principles: Management principles are relative, not absolute, and they should be applied according to the need of the organization. A particular management principle has different strengths in different conditions. Therefore, principles should be applied according to the prevailing conditions.

Management: Science or Art: Management like other practices- whether medicine, music composition, or even accountancy- is an art. It is know-how. Yet managers can work better by using the organized knowledge about management. It is this knowledge that constitutes science. Thus, managing as practice is an art; the organized knowledge underlying the practice may be referred to as science.

Management as Profession: Management has been regarded as a profession by many while many have suggested that it has not achieved the status of a profession. Schein concluded that by some criteria management is indeed a profession, but by other criteria it is not. Today we can see many signs that management is working towards increased professionalism.

Management is Universal: Management is a universal phenomenon. However, management principles are not universally applicable but are to be modified according to the needs of the situation.

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Explain the features of management/ characteristics of management:

Organized Activities: Management is a process of organized activities. Groups of people cannot be involved in the performance of activities without organized activities. Management comes into existence where a group of people are involved in achieving a common objective. The organized activities may take a variety of forms ranging from a tightly structured organization to a loosely-knit organization.

Existence of Objectives: The existence of objectives is a basic criterion of every human organization. The organizational objectives are the desired state of affairs which an organization attempts to realize. This realization of objectives is sought through the coordinated efforts of the people constituting an organization.

Decision-making: Management process involves decision making at all levels. Decision-making describes the process by which a course of action is selected as the way to deal with a specific problem. If there is only one alternative, the question of decision making does not arise. The quality of alternatives which a manger selects determines the organization’s performance, and the future of the organization.

Relationship among resources: The essence of management is integration of various organizational resources. Resources include money, machine, materials, and people. Management is concerned with the proper utilization of human resources which, in turn,utilize other resources.

Working with and through people: Management involves working with people and getting organizational objectives achieved through them. Working through people is interpreted in terms of assigning activities to subordinates.

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Role Of Managerial Economist

One of the principal objectives of any management in its decision-making process is to determine the key factors which will influence the business over the period ahead. In general, these factors can be divided into two-category (i) external and (ii) internal.The external factors lie outside the control management because they are external to the firm and are said to constitute business environment.The internal factors he within the scope and operations of a firm and hence within the control of management,and they are known as business operations.

To illustrate, a business firm is free to take decisions about what to invest, where to invest, how much labour to employ and what to pay for it, how to price its products and so on but all these decisions are taken within the framework of a particular business environment and the firm’s degree of freedom depends on such factors as the government’s economic policy, the actions of its competitors and the like.

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1. Define managerial economics with definition

2. How does managerial economics differ from economics?

3. Write a short note on managerial economist.

4. Explain the scope of managerial economics.……………………………….

MS9 Managerial EconomicsNote: There are Section A and B. Section A consists of five Questions carrying 20 marks each. Attempt any three questions from this Section. Section B is compulsory and carries 40 marks.

SECTION-A

1. Discuss the fundamental nature of Management Economies with respect to the three choice problems of the economy.

2. The demand function of a product is given as Q = 500-5P. Find out the point price elasticity demand when

a) P = Rs. 15 and Q = 200

a) P = Rs. 50 and Q = 200

What inferences do you draw from the results when the price of a commodity increases from Rs. 15 to Rs. 50, the quantity demanded remaining constant?

3. Distinguish between accounting costs and Economics costs. Explain giving suitable examples.

4. Explain the functional forms of cost function giving illustration.

5. "It is believed that a firm under a perfect competition is a price-taker and not a price-maker." Explain giving examples.

SECTION-B

5. (A) The following table gives the information regarding the units produced. TE and TC of production of a North Indian Tool's factory. Complete the table:

Total Profit Marginal Profit

Unit of output

Total Revenue

(Rs.)

Marginal Revenue

Total Cost (Rs.)

Marginal Cost

250 1000 752251 1004 753252 1008 755253 1012 758254 1016 762255 1020 767256 1024 773257 1028 780

(i) Determine the profit maximizing output level.

(ii) Is profit maximum at the output where marginal profit equals zero? Is this always the case or is this unique to this particular problem?

(iii) Is profit maximum where total revenue equals total cost? Explain.

(B) Case: Price cutting at the Times of India

The Times of India, is one of the leading newspaper in India. In September 1972, it lower its price from 45 paise to 20 paise while prices of its rivals remained unchanged. The number of newspapers sold by TOI and its rivals was as follows:

August 1972 May 1973TOI 3,55,000 5,18,000

Statesman 10,24,000 9,93,000Hindu 3,92,000 4,02,000

Hindustan Times 3,25,000 2,77,000

(i) Based on the figures, find the price elasticity of demand or TOI.

(ii) Was the cross elasticity of demand between Statesman and TOI positive or negative?

(iii) Would you expect it to be positive or negative? Why?

MS 09 Managerial EconomicsAttempt any five questions. All questions carry equal marks.

1. What are the various factors which may influence the demand for intermediate goods like cables? Explain the most appropriate method of forecasting the demand for such an item.

2. a) Explain the method of cost-plus pricing and state its limitations. Point out cases where it is suitable.

b) Briefly outline the statistical method of estimating cost function.

3. a) Explain the concept of law of diminishing marginal utility with a suitable example. Why is it relevant for managers in taking decisions relating to expansion or diversification?

b) A consumer utility function is U = 1 log x1 + log x2. His budget constraint is given by 2x1 + 4x2 = 36. Find out how many units of x1 and x2 should the consumer buy in order to maximize his utility.

4. Why is demand analysis significant for management? Identify various concepts of demand relevant for various functional areas of management.

5. State the assumption underlying the economists' theory of firm. Develop a critique of the theory and suggest the need for alternative models.

6 'Price leadership is an alternative cooperative method used to avoid tough competition'. Comment.

7. Distinguish between short-run production function and long-run production function. The law of diminishing returns is sometimes known as the law of variable proportions. How? Explain the law with example and figure.

8. Distinguish between any four of the following:a) Demand curve and demand scheduleb) Implicit and Explicit costsc) Isoquant and Isocostd) Short-run and long run cost functionse) Social cost-benefit analysis and financial analysisf) Price elasticity and income elasticity of demand

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MS0-9 Managerial EconomicsAttempt any five questions. All questions carry equal marks.

1. Discuss various concepts of cost which are relevant from the point of view of production, planning and control.

2. What is social cost benefit analysis? How is it different from financial analysis. Briefly discuss the steps involved in social cost benefit analysis of a project.

3. a) Compare and contrast the behavioural theory with the economic theory of the firm.

b) Differentiate between Accounting profit and economic profit. Illustrate with the help of examples.

4. What do you understand by demand forecasting? Survey method is one of the techniques of demand forecasting. Discuss its different types.

5. Issues related to pricing are very important regarding introduction of competition. Discuss some of the important pricing issues with special reference to the software industry.

6. Explain the theoretical principles of production to explain the relative substitution of one input for another occurring as a result of the increased price of labour.

7. Oligopolists are more likely to match the price-cut than a price increase by a competitor. Why? Explain with the help of examples.

8. 'Bundling' has emerged as an important aspect of 'consumer pricing'. Discuss this with special reference to the telecom sector.

MS-9 Managerial EconomicsAttempt any five questions. All questions carry equal marks.

1. Explain how short run and long run cost functions can be used by firm for profit maximization and cost control decisions. Support your answer with diagrams.

2. a) What do you understand by price discrimination? Explain the conditions which make it possible and profitable.

b) What are the main features of monopoly? How does it differ from perfect competition.

3. What are the various factors which may influence the demand for intermediate goods like cables? Explain the most appropriate method of forecasting the demand for such an item.

4. Distinguish between any five of the following:

a) Accounting and economic profit

b) Demand function and production function

c) Direct and indirect costs

d) Trend and regression methods of forecasting

e) Business risk and financial risk

f) Price elasticity and gross price elasticity of demand

5. Define risk. What do you understand by 'diversification of risk'? Illustrate your answer with some examples.

6. Suppose that you manage a business and have to make a business trip of two to four days at least once in a month. Discuss the factors that determine the total cost of the trip?

7. Discuss the relevance of Baumol's Model of sales revenue maximization in the present context.

MS09 Managerial EconomicsAttempt any five questions. All questions carry equal marks.

1. Discuss the scope of managerial economics and relate it with different disciplines.

2. Discuss the concept of production function with one variable input along with illustrations.

3. Discuss any three methods of dealing with uncertainty. Illustrate with relevant examples.

4. Explain any five of the following:

a) Economic profit

b) Cartel Profit Maximization

c) Price Rigidity

d) Economic Rationality

e) Derived demand

f) Cost reduction and cost control

5. The opportunity cost to a firm of using a resource is zero when the market value of the resources is zero'. Discuss the statement using relevant examples.

6. Briefly outline the statistical method of estimating cost function.

7. 'Price leadership is an alternative cooperative method used to avoid tough competition'. Comment

1. Discuss various concepts of costs which are relevant from the standpoint of production, planning and control.

2 a) What do you understand by price discrimination? Explain briefly the conditions which make it possible and profitable.

(b) Explain briefly the managerial uses of estimated cost function.

3. What is cost-benefit analysis? How is it different from financial analysis? Discuss briefly the steps involved in social cost-benefit analysis of a project.

4. a) A firm has the production function X = LK (X = output, L = labour, K = capital); labour and capital prices are Rs. 8 and Rs. 10 per unit; and it desires to produce 32 units of output. What is the least cost combination of labour and capital?

(b) Consider the production function

Q = 86 L0.61 K0.39

5. “Pricing decisions are constrained by product-policy decisions and considerations of corporate planning.” Comment on the above statement by giving real world examples.

6. “Firms may not maximise profit but they do have a profit policy.” Discuss the above by bringing out clearly the various facets of a profit-policy decision by a firm.

7 State whether the following statements are true, false of uncertain and give reasons for your answer:

(a) Profit will be either or minimum when marginal revenue equals marginal cost.

(b) Under perfect competition selling cost are not necessary.

(c) A shift in the demand curve for cigarettes is caused by a change in the price of cigarettes.

(d) The break-even point becomes indeterminate when price of the commodity is equal average variable cost.

MS9 Managerial EconomicsNote: There are Section A and B. Section A consists of five Questions carrying 20 marks each. Attempt any three questions from this Section. Section B is compulsory and carries 40 marks.

SECTION-A

1. Discuss the fundamentals of Managerial Economics. Explain the scope of Managerial Economies as tools of management decision making.

2. (a) Explain the law of demand.

(b) What are the differences between a firm's demand curve and market demand curve? Give illustrations.

3. Explain the economic method of estimating cost function. Why is this method more popular than the other methods of cost estimation?

4. (a) Distinguish between perfect competition and oligopolistic competition. Give examples.

(b) Explain the concept of product differentiation with special reference to monopolistic competition. 5. Write short notes on any three of the following:

(a) Delphi technique

(b) Opportunity cost

(c) Cross-price elasticity

(d) Distinguish between accounting costs and economic costs

(e) Pricing of joint products

SECTION B

6. Define forecasting technique. Discuss the various types of forecasting techniques.

7. The production department of a firm reported the following information for the month of May, 2005.

Rs.Wage bill 20,000

Value of raw material 60,000Interest 6,000

Fuel consumption 10,000Rent 4,000

Units of output produced 2,000

Calculate

(i) Average cost(ii) Average variable cost(iii) What would be the total profit of the firm is it sells the entire output at a price of Rs.60 per unit?

MS-9 Managerial EconomicsNote: There are Section A and B. Section A consists of five Questions carrying 20 marks each. Attempt any three questions from this Section. Section B is compulsory and carries 40 marks.

SECTION-A

1. Demand for a product depends upon price and a number of other variables that are assumed to be held constant while drawing the demand curve. Plot a demand curve with Price on the Y0axis

and Quantity on the X-axis. Identify the 'other' variables that are assumed to be constant and explain the effect on demand of a change in each of the 'other' variables. Use examples, wherever possible.

2. (a) Oligopoly is the most observed market structure in the real world. What is oligopoly? And how does it differ from Monopoly? What is the distinguishing feature of oligopoly?

(b) Firms in oligopoly can either (I) collude or (ii) compete. What will happen in case the firms decide to collude i.e. form a cartel? Why are cartel arrangements not likely to be stable? Explain.

3. (a) What is the difference between an accountant's view of profit and an economist's view of profit? In this context be sure to explain the difference between explicit costs and implicit costs, with examples.

(b) What is 'normal' profit? What is 'economic' profit? If a firm in a perfectly competitive market is making 'economic' profit in the short-run, explain the changes that will take place in the market in the transition to the long-0run equilibrium.

4. (a) What is third degree price discrimination? What are the necessary conditions for implementing price discrimination? (b) Assume that Indian Airlines wish to introduce price discrimination across different 'types' of travellers. Identify the different types of travelers and explain how it can implement this strategy successful. In this context be sure to illustrate the importance of knowledge of price elasticity's of different types of travellers.

5. Write short notes on the following

(a) Barriers to Entry

(b) Prisoner's Dilemma

(c) Consumers Surplus

(d) Economies of Scale

(e) Bundling

SECTION-B

6. What is price elasticity id demand, income elasticity of demand, and cross price elasticity of demand? What is the relation between the total revenue, marginal revenue and price elasticity of demand? Examine.

7. In early 1991, there was a sharp increase in the price of newsprint, the paper used by the newspapers. Since newsprint is the largest expense for India newspapers (after salaries)

publishers were concerned about the price hike. Suppose that the demand for newsprint can be represented as follows:

Qi = 17-3 -- 0-0092 p +0-0067

Where Q. equals the quantity demanded (in kilograms per capital), P is the price of newsprint (in Rs. per metric ton) and I is the income per capita (in Rs.),

(a) If there are 1 million people in the market, and if per capita income equals Rs. 10,000 what is the demand curve for newsprint?

(b) Under these circumstances, what is the price elasticity of demand if the price of newsprint equals Rs. 400 per metric ton?

(c) According to a study, the demand curve for newsprint in India is:

Q2 = 2672 -- 0-51 p

Where, Q2 is the number of metrix tons of newsprint demanded (in thousand). What is the price elasticity of demand for newsprint in India if price equals Rs. 500 per metric ton?

(d) Based in this study, will the 1991 price increase result in an increase or decrease in the amount spent on newsprint on newsprint in India? Why?

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SELF-ASSESSMENT QUESTIONS1. Discuss the nature and scope of managerial economics.2. “Managerial economics is the integration of economic theory with businesspractice for the purpose of facilitating decision-making and forward planning bymanager”. Explain and comment.3. Define scarcity and opportunity cost. What role do these two concepts play inthe making of management decisions?4. Managerial economics is often said to help the business student integrate theknowledge gained in other courses. How is this integration accomplished?5. Compare and contrast microeconomics with macroeconomics. Althoughmanagerial economics is based primarily on microeconomics, explain why it isalso important for managers to understand macroeconomics.6. Justify that managerial economics is economics applied in decision-making.7. What is the role of managerial economics in preparing managers?8. How is managerial economics related to different disciplines

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