Question

1. List and describe the three aspects of organizational architecture. What is the primary goal of an economic system? How do the architectural components help in achieving this goal?

Answer 1

Organizational architecture implies to organizational structure by which business operations are followed. Organizational architecture has two meanings. Firstly, it is considered as the organizational space where individuals work in and around an organization. Secondly, it refers to organizational design wherein the roles, responsibilities are assigned to and processes are operated in each every department and individuals working in the departments. From large scale to small scale business, organizational architecture is taken into consideration to begin the working process.

Three aspects of organizational architecture are as follows:

1. Assigning of right and appropriate decisions

2. Rewarding system for the employees working

3. System followed to evaluate the performance of the employees and business units

Economic system is a widely used term in economics. Economic system comprises of economic activities such as production, consumption, investment and exchange. Production means conversion of inputs into outputs. Consumption refers to usage of goods & services for the satisfaction of our wants. Investment implies to using up of goods (such as tools and machinery) for further production. Exchange refers to sale and purchase of goods & services. Basically, it is a system spread over a particular area that reveals the nature and level of economic activities in that area. It shows how the people of a concerned area earn for their living.

The goals of economic system are as follows:

a. Growth of the economy: Rise in GDP level and low rate of unemployment causes economy to boom on a macro level. This implies that there is rise in economic growth causing consumer's purchasing power to increment which finally causes rise in demand for goods & services.

b. Stability in an economy: Monetary policy has greater impact on financial market as well as on economic stability.

c. Economic security: It refers to financial security of an economy which is gained by stablizing income as well as resources.

d. Economic welfare: Global integration of economies has prompted a rapid rise in the movement of products, capital and labor across the border. This has contributed to the maximization of economic efficiencies. This, eventually results in sharp increase in global output and economic welfare.

e. Efficiency in an economy: Proper allocation of resources leads to economic efficiency.

f. Economic freedom: People in an economy are free to engage in any kind of economic activity. It imples to economic liberty.

g. Diminish economic problem: For an economic problem to decline, there should be no scarcity. At the consumer's level, scarcity implies to low income. At the producer's level, scarcity refers to limited resources. At the national level, scarcity implies to limited national resources.