My key theory on the first two chapter of Managerial Economics and Organizational Architecture (MEOA) is that the book will providing a concept for best practice to economic decision making. The first chapter provides a basic introduction of the book’s purpose and its approach. In chapter two discusses the concept of economist ‘view of behavior. It addresses the general want and need of society and the barrier that limit these resources from ones reach.
The book’s introduction covers the normal topic of managerial economics and addresses the top question to a successful organization. It addresses the importance of an organization architecture and decision making structure by providing some important questions should be asked in a cooperation for organizational success.
1. Which markets will the firm enter?
2. How differentiated will the firm’s products be?
3. What mix of inputs should the firm use in its production?
4. How should the firm price its products?
5. Who are the firm’s competitors, and how are they likely to respond to the firm’s product offerings?
It provide a structure that they identify as being the critical views for a cooperate organization:
• The assignment of decision rights within the company
• The methods of rewarding individuals
• The structure of systems to evaluate the performance of both individuals and business units.
The first chapter also introduces the term of Economic Darwinism and Benchmarking as the business strategy and pursuit of profit or success. Economic Darwinism is my understanding of the business world’s translation for “Survival of the Fittest”. Those that can’t keep up with their competition are not considered a threat. The term Benchmarking to me is basically a copy cats. Generally means looking at those companies that are doing something best and learning how they do it in order to emulate them. (James A. Brickley, 2009, p. 9) I feel these topics shine the light on what to look forward to in the chapter to come. In the business world and life, Survive of the Fittest is a way of life and understanding how to survive is what we all need to pay attention too.