The role of management

Ever since the Industrial Revolution brought workers from small shops into large factories, supervision has been required. Only during the last hundred years, however, has industrial management grown into a highly organized set of modern methods for achieving efficiency .Thus, management is a new institution in human history.

Efficiency means getting results with the least possible waste of time, effort and money. Therefore, efficiency is the aim of all management, both public and private. I

The manager's job, then, is to get people to do things efficiently. The top manager manages other managers, chooses and trains them, plans their operations and checks the results. Shop managers carry out time and motion studies to improve workers' efficiency, and foremen give on-the job training to workers. Industrial ma­nagers employ specialists to keep machines working properly and to ensure the supply of spare parts. Each step in manufacture is plan­ned in detail. Supervisors consult experts regularly in order to master new techniques. Personnel managers have learned to obtain greater efficiency from workers by providing rest periods and by improving morale through better heating, lighting, safety devices and recreation facilities. The use of modern electronic devices has led to increasing automation, in which many automatic machines func­tion without any need for human labour.

Scientific management methods have spread to all branches of industry. The essence of all the functions of management is coordination, the harmonious combination of all individual efforts for the achievement of the objectives of the enter­prise.

What does economics study?

What do you think of when you hear the word economics? Money, certainly, and perhaps more complicated things like business, inflation and unemployment. The science of economics studies all of these, but many more things as well. Perhaps you think that economics is all about the decisions that governments and business managers take. In fact, economists study the decisions that we all take every day.

Very simply, economics studies the way people deal with a fact of life: resources are limited, but our demand for them certainly is not. Resources may be material things such as food, housing and heating. There are some resources, though, that we cannot touch. Time, space and convenience, for example, are also resources. Think of a day. There are only 24 hours in one, and we have to choose the best way to spend them. Our everyday lives are full of decisions like these. Every decision we make is a trade-off. If you spend more time working, you make more money. However, you will have less time to relax. Economists study the trade-offs people make. They study the reasons for their decisions. They look at the effects chose decisions have on our lives and our society.

History of economic thought

Economic thought goes back thousands of years. The English word economics first appeared in the 19th century.

Early thinkers asked, 'what makes a state or a country wealthy?' For nearly 2,000 years, the answer was very simple: gold. A country or nation's wealth depended on its owning precious metals.

During medieval times trading between nations grew, and a new social class appeared. These were merchants, people who made their money through the buying and selling of goods. They saw the economy as a way

to make the stare strong. For them the nation's wealth depended on stocks of gold and the size of the population.

Modern economics was really born in the 19th century. Adam Smith is often called the Father of Modern Economics, although the science was called political economy then. Smith realised that a nation's wealth depended on its ability to produce goods. The value of these goods depended on the cost of production. The cost of production depended on the cost of workers, raw materials and land. This was really the first example of macroeconomics.

The industrial revolution had begun. Paper money began to replace precious metals. Economists wrote about the division of labour, problems of population growth, social classes.

For classical economists, the value of goods depends on the cost of production. However, the price of goods is not always the same as their real cost.

In neoclassical economics the price of goods depends on how much people want them and how easily they can be found. Consumers want satisfaction from their resources (time and money). Firms want profit. These ideas are still the basis of economic thinking today.