Economics for Business Assignment Example | Topics and Well Written Essays - 2000 words

Economics for Business - Assignment Example This makes micro- economic environment more popular among industries which involves influencing of choice through interaction. Thus, micro- economic approach is usually adopted in educational institutions, hospitals and different charitable organizations. External market environment is much dependent on usage of resources. A supportive and adaptive micro- economic environment results in utility maximization as far as consumers are concerned, but most importantly it contributes in profit maximization of firms. By adopting micro- economic approach, business organizations could effectively manage their resource allocation among alternative possibilities. 1Since social trends and customs affect choices of people, organizations require using their resources in a much practical terms. In present times, market mechanisms are merged with state intervention. 1.2 Business objectives are important for numerous reasons. Profit making: Earning profit is the elementary objective of any business. P rofit is earned through a series of business activities. Profit making can further be categorized as ‘maximum profit’ and ‘sufficient profit’. While the former concept supports generation of artificial deficiency, excessive price hikes, adulteration, etc, the later one focuses more on sustenance, prestige and recognition, development and growth of business. In present times, most business organizations adopt the path of sustainable development merged with profit maximization objectives. Creation of customers: Irrespective of type or expansion, every business must expand their customer base. Creation of customer implies generation of potential customers. Amount of such creation is directly proportional to profit making of organization. Thus, customer base is a major determinant in framing of organizational profit- maximizing policies. Advertisements, pricing strategy, and superior quality of goods and services are popular approaches for generation of potenti al customer base. Ensuring customer satisfaction results in customer retention. Innovation: Innovation is the latest mantra in modern business scenario. Changing trends and mindsets have made people more cautious and aware about the goods and services they are purchasing. Thus, marked research, use of newer technologies, customized facilities, and varieties of products have become indispensible for modern customers. Presently, organizations are finding out ways to make use of old products in production of new ones. This contributes in satisfaction quotient of customers belonging to different age groups. Thus, from economic perspective, innovation is as important as marketing, promotion, finance and other business activities. Innovation definitely helps in expansion of business2 Scientific management is the cornerstone of business behavior of modern firms. Every organization maintains certain codes or behavioral principles. Business policy, policy implementation as well as overall be havior of a business depends on numerous aspects. Some of these are- business objective, hierarchy, span of control, labor division and specialization, managerial authority and responsibility, coherence and connection between