Managing tomorrow

Journal for Development and Leadership

Volume 2, Number 2


 

Applicability of managerial economics in corporate governance: A decision-making perspective
Kyagulanyi, R. and Ncwadi, R.

This article considered the application of Managerial Economics in corporate governance from a decision-making point of view. To achieve the research objectives, a comprehensive literature study has been conducted so as to provide a theoretical framework for the empirical study. As this research is purely qualitative, secondary data has been a key issue in the analyses.

The results were analysed and different concepts of the economic analysis have been related to business operation in establishing informed decision-making. The article goes beyond the financial and regulatory aspects of governance in order to address the interests of stakeholders. Theories have been applied from different economists such as Baumol’s theory of sales revenue maximisation with his view that instead of firms overcharging their customers in order to increase profits, they charge reasonable prices with a view to increasing sales. This would also deter competitors who tend to threaten businesses by selling at lower prices.

Keywords: Managerial Economics; Corporate Governance; Decision-Making