Why market structure is important from management perspective?
Market structure is an important part of any management process because of several reasons that have to be understood, considered, and evaluated on a proper level. In the beginning, it is necessary to underline that the management perspective is all about the way of how a company or market is organized and coordinated in terms of the activities that are applicable in order to achieve the goals set. According to one famous Professor of Finance, Davide Accomazzo, market structure is “that comprehensive box that relates to the rules of engagement for all market participants” (par. 2). It means that any market structure is a kind of framework according to which each market player has to take some steps, choose how to behave, consider the regulations, and play the roles prescribed (Shaik 104).
As soon as the idea of market structure is more or less clear, it is possible to explain its importance from a pure management perspective. Market structure helps to define the required number of suppliers, the level of difficulty inherent to enter a particular market, or the forms of competitions that can be developed between different organizations, departments, and even individuals (McEachern 174). In other words, market structure, as well as management, is about the required portion of the control. Without control and the boundaries within the frames of which any business or marketing relations can be developed, it is hard to create a powerful organization or effective ideas. Managers are eager to find out a market structure of any company to understand better who is responsible for a particular event or idea and what department should continue developing the activities. In general, it is hard to imagine a manager without the required access to a market structure as it is the basis according to which all actions and relations are organized.
Why elasticity is important from management perspective?
In order to understand why elasticity is important from a management point of view, it is necessary to know its general essence and define it in accordance with the available variables. As a rule, elasticity, also known as the elasticity of demand or price elasticity is a kind of measurement of a particular good and its price. It should be based on such concepts as consumer demand, income, and supply that takes place during a certain period of time (Hirschey 182). Economists like to use this item in order to understand the dependency between two or even more issues and define the peculiarities of their relations proportionally. Managers use different formulas to define the quality of relation and the progress that exists within the frames of the two identified issues Cordes, Ebel, and Gravelle 102). As soon as the variables change, the meaning of elasticity changes as well.
Christ offers to understand elasticity as the relation of the “percentage change in the dependent variable… based on an infinitesimal percentage change of the independent variable (311). When managers need more understanding of the case or the possibility to develop the relations, they are welcome to use the offered formula and clear up if the chosen relation can be effective or not. Managers as no one else are eager to analyze the connection between different departments, organizations, and variables that predetermine the quality of any operation’s completion. With the help of the offered elasticity formula and the ability to change the variables, the workers in the sphere of managers are able to improve their results and achieve the required goals sooner relying on the ideas offered.
Works Cited
Accomazzo, Davide. “The Importance of Market Structure.” Graziadio Business Review. 2011. Web.
Christ, Steffen. Operationalizing Dynamic Pricing Models: Bayesian Demand Forecasting and Customer Choice Modeling for Low Cost Carriers. New York, NY: Springer, 2011. Print.
Cordes, Joseph, J., Ebel, Robert, D., and Jane Gravelle. The Encyclopedia of Taxation & Tax Policy. Washington, DC: The Urban Institute, 2005. Print.
Hirschey, Mark. Fundamentals of Managerial Economics. Mason, OH: Cengage Learning, 2008. Print.
McEachern, William, A. Economics: A Contemporary Introduction. Mason, OH: Cengage Learning, 2011. Print.
Shaik, Khader. Managing Derivatives Contracts: A Guide to Derivatives Market Structure, Contract Life Cycle, Operations, and Systems. New York, NY: Apress, 2014, Print.