• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13
  14. 14
    14
  15. 15
    15

Managerial Performance and the Need for Data.

Extracts from this document...

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.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Macroeconomic Objectives and their impact on Business Activity

    There are, however, problems associated with such demand management policies. The first is that they are largely impractical since there is a time lag involved before a tax comes into effect. It is therefore very difficult for the government to be able to quickly implement a tax, for example, to reduce inflation.

  2. Labour is one of the four factors of production along with land, capital and ...

    Geographical mobility (labour): Move from one geographic location to another. Capital accumulation: The ability of an economy to increase its stock of capital. Marginal product: The extra output produced by the one extra unit of the variable factor, labour. Productivity: Refers to the volume of output produced in terms of the volume of inputs used to produce the outputs.

  1. CAPM and its significance

    BETA = � = ?im / ?m2 = COV (Ri, Rm) / VAR (Rm) Brealey and Myers also argued in their book Principles of Corporate Finance (Brealey and Myers, 2003): 'the horizontal axis is BETA not Standard Deviation, because the market only rewards systematic risk bearers, and the non-systematic risk bearers are idiots'.

  2. The Nature of Macroeconomics

    --> O � * CAD still low * Large idle capacity still in economy --> investment sluggish as firms increase O with existing equipment Late recovery * Inflation starts to pick up * Interest rate rise * UE contuse to fall * Consumption strong * CAD rises as imports rise

  1. What do you Consider the Key Elements of "New Classical" Macroeconomics? What are the ...

    Originally RBC analysis suggested that business cycles originated from real (supply) shocks, rather than monetary (demand) shocks. However, research later confirmed that demand shocks, such as changes in government spending or consumer preferences, as well as supply shocks were responsible for the emergence of business cycles.

  2. Registered fee simple v Registered mortgage

    title: Transfer of Land Act 1893 (WA) s68 ('TLA'). Albert is therefore subject to Daphne's lease. Unregistered option v Registered Fee simple RP Albert has indeafisible title (TLA s68), unless an exception is available to impeach his title. a) Volunteers exception Albert provided no consideration for the property, which was a gift from Xena.

  1. Measurement of National Income, Strengths and Weaknesses of National Income Statistics.

    GDP counts income according to where it is earned rather than who owns the factors of production. In the above example, all of the income from the car factory would be counted as US GDP rather than German GDP. To convert from GNP to GDP you must subtract factor income

  2. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    He says, "it's a war that is misguided and arbitrary, outrageously expensive, and downright unjust, conducted in the face of massive opposition from the people it's allegedly protecting" (EDWN 2). In particular, he feels that marijuana users are being persecuted the worst.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work