Beruflich Dokumente
Kultur Dokumente
INTRODUCTI
ON & GOALS
OF THE FIRM
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
WHAT IS MANAGERIAL
ECONOMICS?
The application of microeconomics to
problems faced by decision makers in
the private, public, and not-for-profit
sectors.
RESPONSIBILITIES OF
MANAGEMENT
Managers solve problems before they become a
crisis.
Managers select strategies to try to assure the
success of the firm.
Managers create an organizational culture
attune to the mission of the organization.
Senior management establish a vision for the
firm.
Managers motivate and promote teamwork.
Managers promote the profitability of the firm.
And many managers see it in their long-run
interest to promote sustainability of their
enterprise in their environment.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
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2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
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SHAREHOLDER WEALTH
MAXIMIZATION [1.1]
t = REVENUE - COST = TRt -TCt = PtQt - VtQt - Ft
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2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
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AGENCY COSTS
1. Extending grants of stock or
deferred stock options
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CAVEATS TO
SHAREHOLDER WEALTH MAXIMIZATION
2. NO ASYMMETRIC
INFORMATION - buyers and sellers
all know the same things.
3. KNOWN RECONTRACTING
COSTS - future input costs are part of
the present value of expected cash flows.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
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RESIDUAL CLAIMANTS
Shareholders have a residual claim on
the firms net cash flows.
All other stakeholders have contractual
expected returns.
When a CEO is hired by a shareholder
owners, they create fiduciary duty to
allocate resources in a way to maximize
the NPV of residual claims.
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in
whole or in part.
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