This book deals with behavioral responses of management of firms that make several decisions with respect to production, marketing, finance, organization of activities within divisions, and interrelations between divisions (including synergies between them and constraints placed on each other in the attainment of overall goals of the firm). The market conditions, that constitute the basis of such decisions, may be stable, random but predictable, or uncertain. It can be expected that objectives attained by the firm, as a result of decisions of management, may be different from the maximum which can be achieved. A generic conceptualization of such managerial discretion and operationally useful methods of measurement have been presented. It is possible to develop machine learning algorithms on this basis to minimize managerial discretion and assist managers in arriving at strategic decisions thereby leaving more resources to deal with uncertain events as they arise. The volume is a great resource not only for researchers, but also decision makers in corporates.
Author(s): T. V. S. Ramamohan Rao
Publisher: Springer
Year: 2023
Language: English
Pages: 195
City: Singapore
Preface
References
About This Book
Contents
About the Author
1 Introduction
1.1 The Firm
1.2 Transaction Costs
1.3 Agency Costs
1.4 Some Hybrids
1.5 Non-price Strategies
1.6 Financial Issues
1.7 Managerial Discretion
1.8 Purpose of Study
1.9 Designing a Machine Learning Algorithm
1.10 A Look Ahead
References
2 Managerial Discretion
2.1 The Genesis
2.2 Measuring Managerial Discretion
2.3 Choice of Materials
2.4 Choice of Products
2.5 Organizational Arrangements
2.6 Financial Mix
2.7 Summing Up
2.8 Lessons for Machine Learning
References
3 Specification and Estimation
3.1 The Purpose
3.2 The Issues
3.3 The Variables
3.4 Price Determination
3.5 General Forms of Tradeoff
3.6 Contracts
3.7 Switching and Threshold Effects
3.8 Estimation Problems
3.9 Uncertainty Considerations
3.10 Tradeoff Estimation
3.11 Estimating Thresholds
3.12 Contract Parameters
3.13 Further Observations
References
4 Production Decisions
4.1 Some Basics
4.2 Imperfect Markets
4.3 Related Products
4.4 Small Scale Firms
4.5 Public Sector Firms
4.6 Service Organizations
4.7 Price Determination
4.8 Summing Up
References
5 Multi-product Firms
5.1 The Nature of Products
5.2 Economies of Scale and Scope
5.3 Tradeoff Between Objectives
5.4 Organizational Forms
5.5 Franchises and Subsidiaries
5.6 Non-Price Strategies and Value Generation
5.7 Empirical Evidence
5.8 Anomalies
References
6 Advertising and Warranties
6.1 Focus on Consumer
6.2 Advertising and Selling Costs
6.3 Modeling the Effects
6.4 Empirical Experiences
6.5 Warranties
6.6 Further Observations
References
7 Inventory Behavior
7.1 Sources of Inventory
7.2 Pertinent Issues
7.3 Determinants of Inventory Holding
7.4 Blinder Paradox
7.5 Fazzari and Peterson
7.6 Composition of Inventories
7.7 Empirical Patterns
7.8 Adjustments to Uncertainty
7.9 Some Issues Remain
References
8 Capital Stock and Investment
8.1 The Setting
8.2 Why Invest?
8.3 Acceleration Principle
8.4 User Cost of Capital
8.5 Tobin’s q
8.6 Market Imperfection
8.7 Empirical Evidence
References
9 Financial Arrangements
9.1 Product and Financial Markets
9.2 Capital Structure
9.3 Locus of Control
9.4 Focus Versus Flexibility
9.5 Debt–Equity Ratio
9.6 Dividend Decisions
9.7 Empirical Observations
9.8 The Imponderables
References
10 Carveouts and Spinoffs
10.1 Empirical Setting
10.2 Elasticity of Substitution
10.3 Organizational Arrangements
10.4 Specification of Synergies
10.5 Basic Results
10.6 Conclusion
References
11 Conclusion
11.1 Overall Pattern
11.2 Specific Patterns
11.3 Organizational Arrangements
11.4 Concept of Efficiency
11.5 Managerial Discretion
11.6 What Then?
References
