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According to the budget-maximizing model, rational bureaucrats will always and everywhere seek to increase their budgets in order to increase their own power, thereby contributing strongly to state growth and potentially reducing social efficiency. The bureau-shaping model has been developed as a response to the budget-maximizing model.
Microeconomic reform is the implementation of policies that aim to reduce economic distortions via deregulation, and move toward economic efficiency. However, there is no clear theoretical basis for the belief that removing a market distortion will always increase economic efficiency.
Managers use economic frameworks in order to optimize profits, resource allocation and the overall output of the firm, whilst improving efficiency and minimizing unproductive activities. [4] These frameworks assist organizations to make rational, progressive decisions, by analyzing practical problems at both micro and macroeconomic levels. [ 5 ]
Organizational economics is known for its contribution to and its use of: Transaction cost theory: costs incurred to organize an activity, especially regarding research of information, bureaucracy, communication etc. Agency theory: dilemmas connected to making decisions on behalf of, or that impact, another person or entity.
A formal organization is an organization with a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation.
The term of post bureaucratic is used in two senses in the organizational literature: one generic and one much more specific. [9] In the generic sense the term post bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's ideal type bureaucracy.
Bureaucratic officials are expected to contribute their full working capacity to the organization. Positions within a bureaucratic organization must follow a specific set of general rules. Weber argued that in a bureaucracy, taking on a position or office signifies an assumption of specific duties necessary for the smooth running of the ...
Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare. Welfare can be defined in terms of well-being, prosperity, and overall state of being.