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BUSS1040 Economics for Business Decision Making Notes

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Covers all content from entire semester Topics covered: * Gains from Trade * Production and Costs * Supply * Demand * Equilibrium and welfare * Elasticity * Perfectly competitive markets * Pricing market with power I and II * Strategic Interaction and Business Strategy I and II * Market interventions: price regulation, taxes and subsidies * Market failures: Public goods and externalities * GDP and Business Cycles * Employment and Inflation * Budget Policy and Monetary Policy Includes lecture slides and textbook

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BUSS2000 NOTES
INDIVIDUAL DIFFERENCES

EXPLAIN THREE PROMINENT THEORIES OF HUMAN BEHAVIOUR.


SIGMUND FREUD’S PSYCHOANALYTIC APPROACH

3 PARTS OF INNER PSYCHE

• The Id
o Primal Desires
o Basic Nature
▪ Your wild child
• Ego
o Reason
o Self-control
▪ Your practical ‘grown up’ self
• Superego
o Quest for perfection
▪ Your philosophical and spiritual ideals


BEHAVIOURISM AND B.F. SKINNER’S REINFORCEMENT THEORY (OPERAN T
CONDITIONING)

S-R-R MODEL OF REINFORCEMENT

• Stimulus
o Triggers a behavioural response
• Response
o Action/behaviour caused by stimulus
• Reward
o Positive reinforcement to encourage repetition of desired response
• Or Punishment
o Negative reinforcement to extinguish undesirable response

ISSUES WITH BEHAVIOURISM

• Many aspects of behaviour are inconsistent with behaviourist assumptions
• Complexity evident through different responses following reinforcement
o Examples
▪ Exert more effort
▪ Alter goals
▪ Defend/deny behaviour
▪ Change behaviour
▪ Give up/ask others
• Unable to explain range of human behaviours possible
• Influenced not just by environmental triggers but goals, thoughts, feelings, etc



1

,ALBERT BANDURA’S SOC IAL COGNITIVE THEORY

• A person’s behaviour is influenced by both
o Environment
o Personal characteristics

TRIADIC RECIPROCAL DETERMINISM

• Triadic because 3 factors
o Person
o Environment
o Behaviours
• Reciprocal because 2-way, mutual influence between each pair of factors
• Determinism because each factor influences/determines the others

UNDERSTAND HOW PEOPLE VARY IN COGNITIVE ABILITY AND DESCRIBE THE TYPES OF
COGNITIVE ABILITIES

• Cognitive ability
o Capacity to learn, reason, problem solve, plan, think abstractly and comprehend ideas


HIERARCHICAL MODEL O F COGNITIVE ABILITY

• General cognitive ability – g
• Broad cognitive abilities
o Verbal reasoning
o Numerical reasoning
o Abstract reasoning


MYTHS VS RESEARCH FINDINGS

• Myth 1
o Cognitive ability only matters in complex jobs
o Actually useful in various complexity jobs, although most useful for high complexity
• Myth 2
o All you need is a certain amount – any more does not help
o Actually the higher cognitive ability can result in greater technical productivity

UNDERSTAND HOW PEOPLE VARY IN PERSONALITY AND DESCRIBE DIFFERENT
PERSONALITY TRAITS

• Personality refers to person’s unique and relatively stable set of characteristics/patters of
o Behaviour
o Thoughts
o Emotions
• Personality traits
o Relatively enduring and stable
o Major determinants of behaviour
o Influence behaviour in range of situations
• Are situational/personal factors more important?
o Depends on strength of personality trait/situation
o More extreme = show trait across situation
o Strong situations- people tend to act in similar manner
o Weak situations- less situational constraints so personality shown
• Behaviour a result of personality-situation interaction

2

,MODELS OF PERSONALITY

TRAIT-BASED MODELS OF PERSONALITY

BIG FIVE

• Conscientiousness
o Degree to which a person is organised and achieve goals
• Emotional stability
o Extent handles stressful situations and heavy demands
• Extraversion
o Extent enjoys being around people
• Agreeableness
o Extent individual is easy going and tolerant
• Openness to experience
o Extent seeks new experiences and thinks creatively
• Helps predict performance

HEXACO

• Honesty – Humility
o Without humility, you are unable to learn
• Conscientiousness
• Emotional stability
• Extraversion
• Agreeableness
• Openness to experience


PERSONALITY AT WORK

• Personality influences
o Work performance
o Organisational choice
o Career choice
o Career satisfaction
• Influences career success by
o Influencing jobs people select
o Influencing job performance
o Influencing the way individuals engage in social interactions at work

UNDERSTAND HOW PEOPLE VARY IN EMOTIONAL INTELLIGEN CE AND DESCRIBE ITS
DIFFERENT COMPONENTS

• Emotional intelligence
o Ability to monitor one’s own and others’ emotions
o To discriminate among them
o Use info to guide one’s thinking and actions
o Crucial for organisational success
• Emotional intelligence characteristics
o Strong self-awareness
o Aware of own emotions
o Accurately detect emotions in others
o Uses this to manage interactions with others




3

, MODELS OF EI

MIXED MODELS

• EI as diverse construct including aspects of personality and ability
• Performance related traits
• Emotional & social competencies
• Includes
o Personality traits
o Ability EI

ABILITY BASED MODEL

• EI as an ability/aptitude for processing affective info


EI ABILITIES

FOUR MAIN EI ABILITIES

• Relationship management
o Ability to manage other people’s emotions and manage interactions
successfully
• Social awareness
o Ability to perceive emotions of others and see from other points of view
• Self-management
o Able to manage emotions and impulses
• Self-awareness
o Ability to accurately perceive own emotions and
aware of them as they happen
• Each ability builds on previous one
• Predicts academic performance
• Why is EI important for career?
o Include as a factor of career choice
o Important for leadership




4

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Geüpload op
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