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Managerial Performance and the Need for Data.

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Introduction

Managerial Performance and the Need for Data All the economic actors active in a market consider and analyze permanently the evolution of the business cycle by using available data in order to make rational choices in their business decision. In other words, the decision making relies in all its phases and in all circumstances on data, here including statistical data. Managers, entrepreneurs and businessmen use data aiming at: - Understanding their company (their department as part of the company) and their business environment (business risks and opportunities in the domestic and international market) - Solving disturbances in the functioning of their company - Improving the performance of their business. To this end, they build mental models by answering questions like: - How is my business (department or company) doing now? - How has it done in the past? What were the highest and the lowest performance in the past and where is my business now as compared to the historical maximum and minimum level of performance? - At what levels could I perform in terms of sales, profits, investments, number of personnel, opening towards the international market, etc? - How are my competitors doing in the domestic and/or in the international market? - Etc, etc. Answering questions like the above mentioned ones, a business professional makes use of: - Primary data from the day to day reports of the company (department) and/or from the official statistics at industry and market level. These data show quantitative aspects of the economic life. - Derivate data resulting from comparisons (over the time and/or space bound), from calculus, etc. These data reveal qualitative aspects of the analyzed variables. Sources of data needed in business decision There are three different sources of data: 1. The company (department) creates itself information which is summarized by the management information system (MIS) in routine reports. They contain financial accounting, marketing and operations data, which describe the actual state of the firm (department) ...read more.

Middle

Their main resources are the voluntary contributions and donations of individuals and/or of households as well as sponsorship and entrepreneurial incomes. 6. Households main function is consumption of goods and services. Eventually, households may have also productive activities achieved by family association or by independent private entrepreneurs. The main resources of households are represented by compensation of labor, entrepreneurial incomes, and transfers from other sectors. All the non-resident entities active on the economic territory of the country are grouped into a distinct external sector (known also as the rest of the world sector). Certain key aggregates, such as gross domestic product (GDP) or national income (NI) are widely used as performance indicators of the economy of a country. They are estimated within the SNA, but the calculation of such aggregates has long ceased to be the primary purpose for compiling the accounts. Data provided by SNA are used to explain structural aspects of economic growth, to show regional gaps in development, to better understand the impact of various factors on the present and expected results of macroeconomic policies, to sense the business environment (risks and opportunities). The national accounts are designed to provide a coherent and consistent set of data for various types of economic analysis. The major macroeconomic aggregate - GDP - provides an estimate of the overall unduplicated value of production in a country's economy. However, while being an important indicator of a country's economic performance, GDP is not necessarily a reliable indicator of overall community welfare or of quality of life. A number of other aspects, such as distribution of income, life expectancy, public health, education, environment quality, crime rates etc. have to be taken into account when discussing welfare or quality of life. Estimation of Macroeconomic Aggregates The business environment of a country (region) is scrutinized by business professionals through a group of statistical indicators expressing the national (regional) performance. ...read more.

Conclusion

as an annual average of the day by day exchange rates established as a result of the transactions in the inter-bank market during the reference year. This concept is easy applicable and understandable, but many economists argue that ER might alter not only as an effect of changing balance between supply and demand of goods, services and factors in the real market. Inflows and outflows of short term capital and some para-economic factors (emotional reactions of the resident and non-resident holders of bank deposits in local and foreign currency, insufficient coverage in reliable information of the money market, etc.) have also a strong impact on the dynamics of ER. The PPP concept involves another conversion rate which is the result of comparing the value of a standard consumption basket expressed in various national currencies and also in the reference currency. The standard consumption basket has been designed as the sum of goods and services regularly purchased by a family for covering living needs during one month. The advantage offered by this concept consists in eliminating the impact of the para-economic factors during periods of market instability and/or macroeconomic tensions in a country. The critique of this concept refers to the fact that only final consumption goods and services are involved in the estimation of PPP, all the capital goods being neglected. Many economists are also questioning the structure of the standard consumption basket - an abstract list of goods and services which is often quite far away from the real composition of the final consumption of local families. According to the latest estimates of the IMF and the World Bank (see also data in Table No. 2.3.), Romania registered in 2001 a GDP/capita of: - 1710 USD/inhabitant according to the WB Atlas method, which uses the ER concept. This value ranked Romania on position 110 in the world economy. - 6980 USD/inhabitant when using the PPP concept. Romania ranked 87 in the world. ...read more.

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