Learners should be able to determine a Nash equilibrium in a matrix. 24 Business Explain how may have different Learners will already have looked at profit maximisation before. At this objectives objectives, such as maximisation of it is important that they are aware of the ownership structure of plcs and an profit, revenue or market share, explanation of the stock exchange is probably advisable if this hasn’t been survival, social and community covered earlier in the course. objectives. This leads clearly to the divorce of ownership from control and its possible Learners should understand the implications. Consider the principal-agent problem, and link with different objectives of the various asymmetric information. stakeholders and be aware of the concept of satisficing. Looking at the story of Enron can be an interesting lesson as well as the rise of shareholder activism, to at least, a limited extent in recent years. This area can also be used to look back at the financial crisis and the behaviour of the big bankers (RBS?) in pursuing deals that were more in their own interests than those of the business they were running. Once it has been established that owners not be able to control managers, an examination of managerial objectives can be undertaken and used as a way of reinforcing diagrams. 25 Privatisation Explain the way in which This is an obvious area for the use of case studies, with the recent privatisation may increase Mail privatisation, as well as the return of the east coast main line to private competition. ownership and Hinchinbrook hospital going the other way. There is plenty of data on the micro and macro implications of the Learners should understand that privatisation may take many forms privatisations of the 80s and 90s around, allowing a retrospective look, but other than simply transferring the it is important to look at the more modern forms of privatisation being used ownership of state-run assets into such as contracting out of services such as search and rescue and the the private sector. implications that this may have.
Learners should be able to determine a Nash equilibrium in a matrix. 24 Business objectives Explain how may have different objectives, such as maximisation of profit, revenue or market share, survival, social and community objectives. Learners should understand the different objectives of the various stakeholders and be aware of the concept of satisficing. Learners will already have looked at profit maximisation before. At this it is important that they are aware of the ownership structure of plcs and an explanation of the stock exchange is probably advisable if this hasn’t been covered earlier in the course. This leads clearly to the divorce of ownership from control and its possible implications. Consider the principal-agent problem, and link with asymmetric information. Looking at the story of Enron can be an interesting lesson as well as the rise of shareholder activism, to at least, a limited extent in recent years. This area can also be used to look back at the financial crisis and the behaviour of the big bankers (RBS?) in pursuing deals that were more in their own interests than those of the business they were running. Once it has been established that owners not be able to control managers, an examination of managerial objectives can be undertaken and used as a way of reinforcing diagrams. 25 Privatisation Explain the way in which privatisation may increase competition. Learners should understand that privatisation may take many forms other than simply transferring the ownership of state-run assets into the private sector. This is an obvious area for the use of case studies, with the recent Mail privatisation, as well as the return of the east coast main line to private ownership and Hinchinbrook hospital going the other way. There is plenty of data on the micro and macro implications of the privatisations of the 80s and 90s around, allowing a retrospective look, but it is important to look at the more modern forms of privatisation being used such as contracting out of services such as search and rescue and the implications that this may have.