Johnny Ch Lok

How Organizational Behavior Influences Employee Performance Johnny Ch Lok

How managerial economist's view of organizational behaviorHow can economists examine how managers can design organizations that motivate individuals to make choices that will increase a firm's value, e.g. how to compensate CEO's pension to the successor over the years prior to the final departure in order to avoid inflation influences organization's future compensation loss to the CEO after 10 years for his retirement . It is one good example organization economic benefit and loss analysis behavior for the CEO compensation after 10 years. This one organization behavior on economic benefit may include: How to evaluate the right decision for the CEO 10 years retirement compensation, how to reward to the CEO, how to design the compensation system to evaluate the performance of both the CEO and the organization units. Another economic analysis is pricing policy, for example, how would raising the price of the firm's products affect sales and firm value? However, when one firm is in an undomfortably high risk of failure. It needs to do managerial economic analysis. When organizational change is expensive, instead of it needs to do a collection of " good idea", it also needs to analyze the likely consequence of a organizational change and forecast its impacts how on the whole organization. In individual view, economic analysis is based on individuals assign priorities to their wants and choose their most preferred options from among the available alternatives. In organizatinal view, managerial cost and benefit as the incremental cost and benefit that are associated with making a decision. However, it is the marginal cost and benefit that are important in economic decision making. Hence, within this economic framework, individuals maximizing their personal happiness given resource constraints limited resources and creating opportunity costs. Indeed, people are quite creative and resourceful in minimizing the efforts of constraints. For instance, when the government adopts new taxes, almost immediately accountants begin developing clever ways to reduce their impact. Some self-employed individuals were also to reduce the impact or recent tax increases by changing the status of their incorporation, e.g. the staff chooses to change from manager position becomes assistant manager in the same organization. He aims to avoid to pay higher salary tax, if he had another income source, e.g. independent author. Ths staff chooses to change higher income to lower income. The best method is from manager position to become assistant manager position. Although, he reduces salary, but he can time to write books to sell, and he does not need to spend more nervous to the manager position for his organization. He can have more nervous to write books to earn more royalty income when he decides to change his manager to assistant manager position, due to his job responsibility can reduce and he have more time to write his books to earn income. It is one good individual managerial economic behavior example. Knowledge creation brings economic benefit to organizationKnowledge creation can help organization to reduce cost in managerial economist view. For example, three factors influence the costs of transferring information. First, are the characteristics of the sender and receiver. Generally, it is less expensive from people of similar training, language and culture to communicate than for people from different backgrounds. Second is the technology available for communication. For example, the development of electronic mail ( email) was lowered the costs of transferring information. These are the nature of the knowledge itself.