A Principle for Action

Peter Eichhorn and Ian Towers
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Peter Eichhorn: OPINIO Forschungsinstitut
Ian Towers: SRH Hochschule Berlin

Chapter 4 in Principles of Management, 2018, pp 93-113 from Springer

Abstract: Abstract The chapter discusses the different kinds of rationality and points out the limitations of the idea that economic entities are purely rational. Goals and objectives are defined, and a distinction is made between effectivenessEffectiveness , efficiency and economic efficiencyEconomic efficiency . The point is made that there are different kinds of efficiency—economic, technical and political. The principles of maximum return and minimum means are presented as approaches to the conversion of inputs into outputs. The difference between economic efficiencyEconomic efficiency and profitabilityProfitability is made clear and four combinations of these two concepts are outlined. Different kinds of economy are discussed: the economy of needs where the principle of solidarityPrinciple of solidarity is important, the economy of returns where financial goals have priority, the economy of self-interest and of common interest. Finally, the individual and the aggregate economy are presented.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-319-70902-4_4

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DOI: 10.1007/978-3-319-70902-4_4

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