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Journal of Business Ethics, 87(4), 535-
553. Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1786751071).
This article examines the strategic use of bluffing and concludes that its value is often overrated, given it quickly diminishes in utility. The authors used a simulated competitive market game to prove their thesis, however they also conclude that even in the real world, bluffing is often not conducive to high levels of real performance, and can have undesirable consequences, including a general eradication of trust.
Mathematical Theories 6 & 7: Modern Portfolio Theory (MPT) and fuzzy logic theory
Hui, E., Lau, O., & Lo, K. (2009). A fuzzy decision-making approach for portfolio management with direct real estate investment. International Journal of Strategic Property
Management: Special Issue: Capacity Building for Post-Disaster. 13(2), 191-204.
Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1743699321).
One problem with use of mathematical analysis in firm decision making is that the exactitude of quantitative analysis does not always take into consideration the dynamics of real life and faulty. human decision-making processes. This has been one criticism of Modern portfolio theory (MPT), a mathematical portfolio optimization strategy using the concept of asset allocation, risk minimization and profit maximization. The authors find that introducing fuzzy logic into MPT can be...
(2008). Strategic analysis: Blockbuster case study. The Business Review,
Cambridge, 9(2), 68-75. Retrieved October 20, 2009, from ABI/INFORM Global.
(Document ID: 1617904771).
This article uses all three methods -- all of which stress firm market position -- to analyze the strategic position of Blockbuster, a media entertainment company undergoing an identity crisis in the new technological environment: "The Resource-Based View of the firm (RBV) divides internal organizational resources into tangible assets, intangible assets, and organization assets. Tangible assets include production facilities, raw materials, financial resources, and so on. Intangible assets are brand names, organizational moral, technical knowledge, and experience" (Xie & Lin 2008). Porter's model applies similar rigorous scrutiny to the external environment by focusing on "new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, and rivalry among existing competitors," and SWOT's analysis of strengths, weaknesses, opportunities, and threats gives a future-focused perspective to the firm, enabling it to navigate its way through…
Cambridge, 9(2), 68-75. Retrieved October 20, 2009, from ABI/INFORM Global.
(Document ID: 1617904771).
This article uses all three methods -- all of which stress firm market position -- to analyze the strategic position of Blockbuster, a media entertainment company undergoing an identity crisis in the new technological environment: "The Resource-Based View of the firm (RBV) divides internal organizational resources into tangible assets, intangible assets, and organization assets. Tangible assets include production facilities, raw materials, financial resources, and so on. Intangible assets are brand names, organizational moral, technical knowledge, and experience" (Xie & Lin 2008). Porter's model applies similar rigorous scrutiny to the external environment by focusing on "new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, and rivalry among existing competitors," and SWOT's analysis of strengths, weaknesses, opportunities, and threats gives a future-focused perspective to the firm, enabling it to navigate its way through the current marketing environment (Xie & Lin 2008)..
The red line denotes marginal cost and this also increases as the production increases. The shaded region is the profits of the firm. The price line is also the marginal revenue and the average revenue for the firm. So, the company earns profit only when marginal cost is less than the marginal revenue (the area denoted by the shaded portion). When marginal cost increases more than the marginal revenue,
Profit Maximization: An Actual or Theoretical Objective? Profits are necessary to day both for the capitalist socialist and any type of economy to survive. Multinationals and giant companies have the profit motive and therefore maximizing profit as the base of their operations. This also goes under a new label namely stock holder gain. This is a form of profits that happens when the profit margins of the company go up and
Corporate Objective I do not think it is necessary to have a single-valued objective function. Maximizing firm value is not mutually exclusive to all other objectives, first. Second, that's like saying that human should only seek to maximize his or her net worth -- it's absurd. A corporation is an investment vehicle, yes, but that's not all it is. As for the idea that firm value maximization is the best objective
profit maximization of monopolistic firm and the benefits and disadvantages of a monopoly to a consumer. MONOPOLY The central theory in all of the profit-maximizing outcomes rests on the idea that marginal revenue should equal marginal cost. The same is true in the case of a firm with monopoly power. Before we discuss the profit-maximizing outcomes, it is important to understand what is meant by monopoly and how does it affect
They presented the idea that "business firms maximize profit as a means to maximize the utility of their owners. In a word: businessmen maximize profit as a means to maximizing utility, so profit maximization follows from utility maximization" (Ormazabal). One may observe that this approach is quite similar to that of the new institutionalists a few decades ago, mentioned above. This approach considers that profit maximization does not seem
He believed that people cannot be trusted to act in their own best interest, and are better governed by a state that usurps the profit motive thought process from the people. He understood the evils of the profit motivator in business, and sought to artificially remove it from the equation. However, he too understood that it is natural to seek profit as the motivation for business, as he acknowledged