Research/ Economics MIN Error of Forecast ORGANIZATION CHART

Research/ Economics MIN Error of Forecast ORGANIZATION CHART MAX SALES? Responsible for Customer.

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES MINIMIZE COST? Responsible for resource providers

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT MINIMIZE ERROR OF REPORTING? Responsible to SEC & Professional Org.

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error MAXIMIZE NET PRESENT VALUE? Responsible to Stockholders

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value MINIMIZE LOSS OF GOODWILL? Responsible for main- Taining customer goodwill

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer WHO MAXIMIZES CORPORATE VISIBILITY? Responsible for Goodwill in the long run

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer MINIMIZE UNDESIRABLE VISIBILITY? Responsible For Enforcement Authorities PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) MAXIMIZE WINDFALLS FROM GOVERNMENT? Responsible for Top decision makers in government PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs MINIMIZE REPORTING ERROR FOR FIRM’S PAST? Responsible for posterity PUBLIC RELATIONS MAX Goodwill visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs Historian MIN Reporting Error of Firm’s Past Historian MIN Reporting Error of Firm’s Past PUBLIC RELATIONS MAX Goodwill visibility

Studies Used in Private Organizations ObjectivesChoicesType of StudyDepartment Min ErrorStatistical techniqueForecast, Scenarios, Simulations, Sensitivity Analysis Economics, Finance, Planning, Research Max SalesAdvertising, pricingAdvertising, DemandMarketing Max Ouptut, Min Cost, Max Productivity Inputs, technologiesEngineering, Production, Cost Effectiveness, Feasibility Engineering, Production, Personnel Max ProfitPlanning, method of reporting Income Statements, Business Plan Accounting, Finance Max Net Present Value Real estate, plant, equipment Capital BudgetingFinance, Planning Max net BenefitPublic projects, taxes, regulation Cost-benefit AnalysisLawyers, Lobbyists, Trade Associations, Management Max Social Welfare Other govt regulationGovt. Studies(same)

AGENCY PROBLEM Principals = Owners Agents = Managers and other employees who are not owners Individual Agents compromise an organization’s goals by achieving goals of their own.

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast ORGANIZATION CHART MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs Historian MIN Reporting Error of Firm’s Past Historian MIN Reporting Error of Firm’s Past AP: poison pills, greenmail AP: Write EXPOSE AP: unprofitable deals AP: larceny, report delay AP: Whistle blowing AP: Thievery, waste, failing to report problems AP: Leaking information AP: Creating legal problems AP: Brusque treatment of customers PUBLIC RELATIONS MAX Goodwill visibility AP: Grab own spotlight Unwanted visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast How does your practice cover these responsibilities? MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs Historian MIN Reporting Error of Firm’s Past Historian MIN Reporting Error of Firm’s Past AP: poison pills, greenmail AP: Write EXPOSE AP: unprofitable deals AP: larceny, report delay AP: Whistle blowing AP: Thievery, waste, failing to report problems AP: Leaking information AP: Creating legal problems AP: Brusque treatment of customers PUBLIC RELATIONS MAX Goodwill visibility AP: Grab own spotlight Unwanted visibility

Research/ Economics MIN Error of Forecast Research/ Economics MIN Error of Forecast Will You do these all yourself? Really? MARKETING DEPARTMENT MAX SALES MARKETING DEPARTMENT MAX SALES ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT ENGINEERING, PRODUCTION, PURCHASING, PERSONNEL: MIN COSTS or MAX PRODUCTIVITY or MAX OUTPUT Accounting MIN Reporting Error Accounting MIN Reporting Error MANAGEMENT/ FINANCE MAX Net Present Value MANAGEMENT/ FINANCE MAX Net Present Value CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer CUSTOMER RELATIONS MIN Loss of Goodwill MIN Cost per customer LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LEGAL COUNSEL MIN Undesirable Visibility MIN Legal Costs (?) LOBBYISTS MAX Government Windfalls MIN Compliance Costs LOBBYISTS MAX Government Windfalls MIN Compliance Costs Historian MIN Reporting Error of Firm’s Past Historian MIN Reporting Error of Firm’s Past AP: poison pills, greenmail AP: Write EXPOSE AP: unprofitable deals AP: larceny, report delay AP: Whistle blowing AP: Thievery, waste, failing to report problems AP: Leaking information AP: Creating legal problems AP: Brusque treatment of customers PUBLIC RELATIONS MAX Goodwill visibility AP: Grab own spotlight Unwanted visibility

MARKET GOVERNMENT GOVERNMENT FAILURE INTERVENTION FAILURE EXTERNALITY PUBLIC ENTERPRISE ADMINISTRATIVE -PUBLIC GOODS-NATIONALIZATION COST MARKET -PRIVATIZATION COMPLIANCE POWER REGULATION COST INEQUITIES - OUTPUT EFFICIENCY COST DYNAMIC - PRICE - NEGATIVE EXTER. MKT. FAIL. - STANDARDS -PUBLIC BADS INDIVISIBILITY ANTITRUST - MKT POWER INFORMATION -STRUCTURE - INEQUITIES ASYMMETRY -CONDUCT - DYNAMIC TAXES (SUBSIDIES) - INDIVISIBILITY PROVISION OF - INFORMATION INFORMATION RATIONING (MONEY)

GOVERNMENT STUDIES