In order to come up with intelligent decisions, managers must be able to obtain, process and use information. Economic theory assists managers to know what information should be obtained, how to process the information and how to use it. This process involves two forms:
-A specific decision that must be made by the manager e.g. whether or not to close down an unprofitable branch, whether or not to open a bar for more hours etc.
-Involves using readily available information to carry out a course of action that furthers the goals of the organization. Economic theory provides this information through journals, stock markets, newspapers, T.V. and even conversations – managers should know how to pick out the useful information from the entire information.
4 Comments