Final answer:
Managers rely on information to make decisions as entrepreneurs, disturbance handlers, resource allocators, and negotiators, utilizing economic principles to best allocate scarce resources.
Step-by-step explanation:
How Managers Use Information in Decision Making
Managers use information to make informed decisions that affect their teams and organizations. In various managerial roles like an entrepreneur, disturbance handler, resource allocator, and negotiator, information is crucial.
- Entrepreneur: As an entrepreneur, a manager innovates and drives change within the organization. Information about market trends, consumer preferences, and competitive actions is essential to identify opportunities and launch new projects or strategies.
- Disturbance Handler: When unexpected issues arise, managers must act quickly to resolve conflicts or handle crises. Accurate and timely information enables a manager to understand the situation and decide on the best course of action.
- Resource Allocator: Managers decide how to distribute resources efficiently. Information on resource availability, organizational needs, and project returns helps to allocate resources where they can be most effective.
- Negotiator: During negotiations, whether internal or external, information empowers a manager to make offers, assess trade-offs, and reach agreements that benefit the organization.
Given that resources are scarce, economics plays an integral role in these decision-making processes. Managers must apply economic principles to utilize resources most effectively, and information is the key to achieving this goal.