Managerial Economics in the 21st Century - Essay Example
Managerial economics concerns the application of economic ideas and analyses in the creation of effective managerial ideas. Managerial economics is based on microeconomic theory of the firm. It guides managers in decision assembly processes and focuses on relations of firms with clients, competitors and suppliers. Additionally, managerial economics deals with effective use of firm’s resources. Finally, it uses analytical and statistical tools in assessment of economic ideas to solve real business problems. Hence, its other name is business economics. This paper explores the managerial economics in the 21st century.
Technological changes and globalization have led to significant changes in the roles that managers play in firms. Globalization and technological changes have led to the use of technology in management of businesses. Hence, managers use systems like property management systems to manage firms. Moreover, they have to manage firms that operate and compete globally. In the 20th century, most firms operated in their home countries only. However, 21st century managers operate globally. Hence, they must possess certain skills and competencies that enhance their effectiveness.
Managerial economics in the 21st century requires managers to acquire technical skills. They must possess basic administration skills to manage their organizations. The use of technology in management of firms is essential to increase efficiency, save time and ensure the existence of competitive advantages. Technology also enables managers to specialize in tasks that they perform.
Managerial economics in the 21st century also requires managers to be aware of the role of cultural diversity in business. Hence, in development of promotion, operation and management plans, managers must consider the impact of cultural diversity. Cultural diversity, both in the market and workplace, affects decisions that managers make. Cultural diversity also affects other business operations like recruitment, decision assembly and communication. In conclusion, there exist other numerous changes have taken place in managerial economics in the 21st century that requires further studies.