IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxivy2021i2p165-174.html
   My bibliography  Save this article

Economic Calculus and Weak Signals: Prevention Against Foggy Bottom

Author

Listed:
  • Zbyslaw Dobrowolski
  • Grzegorz Drozdowski
  • Monika Dobrowolska
  • Janusz Sobon
  • Dariusz Sobon

Abstract

Purpose: Investment decisions are taken based on an economic calculation, considering the analysis of a diverse and partially unpredictable economic environment. Each enterprise's economic calculus is treated as a decision based on rationality and serves as an instrument to support the investment measure's selection. Despite different studies, there is a research gap in the usage of weak signals in economic calculus. Meanwhile, the spectacular collapses of well-recognised firms resulted from weak identification of coming failures. Approach/Methodology/Design: The authors carried out an integrative literature review to generate new knowledge on the usage of weak signals in economic calculus insights in this paper have emerged iteratively. Findings: Based on an integrative literature review, the authors offer the potentially radical generalisation that firms must use weak signal analysis during the process of economic calculus creation. Practical Implications: The article brings several valuable information that can be the base material and reference to further research. Study results can be a starting point of discussion and analysis on each firm, both from the public and private sectors. Originality/Value: The original study aims to initiate discussion and further research weak signal analysis in economic calculus. It is the first such research.

Suggested Citation

  • Zbyslaw Dobrowolski & Grzegorz Drozdowski & Monika Dobrowolska & Janusz Sobon & Dariusz Sobon, 2021. "Economic Calculus and Weak Signals: Prevention Against Foggy Bottom," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 165-174.
    • Handle: RePEc:ers:journl:v:xxiv:y:2021:i:2:p:165-174
    as

    Download full text from publisher

    File URL: https://ersj.eu/journal/2119/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1988. " Corporate Finance and Corporate Governance," Journal of Finance, American Finance Association, vol. 43(3), pages 567-591, July.
    2. Zbyslaw Dobrowolski, 2020. "Forensic Auditing and Weak Signals: A Cognitive Approach and Practical Tips," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 247-259.
    3. Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. "On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-878, July.
    4. Rajkovic, Tijana, 2020. "Lead independent directors and investment efficiency," Journal of Corporate Finance, Elsevier, vol. 64(C).
    5. Audrey Gramling & Arnold Schneider, 2018. "Effects of reporting relationship and type of internal control deficiency on internal auditors’ internal control evaluations," Managerial Auditing Journal, Emerald Group Publishing, vol. 33(3), pages 318-335, March.
    6. Terje Aven & Frederic Bouder, 2020. "The COVID-19 pandemic: how can risk science help?," Journal of Risk Research, Taylor & Francis Journals, vol. 23(7-8), pages 849-854, August.
    7. Hanneke Gieske & Bert George & Ingmar van Meerkerk & Arwin van Buuren, 2020. "Innovating and optimizing in public organizations: does more become less?," Public Management Review, Taylor & Francis Journals, vol. 22(4), pages 475-497, April.
    8. Zbyslaw Dobrowolski & Jozef Ledzianowski & Monika Dobrowolska, 2021. "Towards to Agile Management Control Systems at the University: Preliminary Research," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 1220-1229.
    9. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    10. Gabriel-Andrei Donici & Cristian Incaltarau, 2010. "Public Goods And The Problem Of Economic Calculus," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 2(2), pages 37-42, June.
    11. Zbyslaw Dobrowolski, 2020. "The supreme audit institutions readiness to uncertainty," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 513-525, September.
    12. Brennan, Michael J & Kraus, Alan, 1987. "Efficient Financing under Asymmetric Information," Journal of Finance, American Finance Association, vol. 42(5), pages 1225-1243, December.
    13. Nathalie Joly, 2016. "Educating in economic calculus: the invention of the enlightened peasant via manuals of agriculture, 1830--1870," Accounting History Review, Taylor & Francis Journals, vol. 26(2), pages 131-160, July.
    14. Kerstin Cuhls, 2003. "From forecasting to foresight processes-new participative foresight activities in Germany," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 22(2-3), pages 93-111.
    15. Sandro Mendonca & Miguel Pina e Cunha & Jari Kaivo-oja & Frank Ruff, 2003. "Wild cards, weak signals and organizational improvisation," Nova SBE Working Paper Series wp432, Universidade Nova de Lisboa, Nova School of Business and Economics.
    16. Zbyslaw Dobrowolski, 2020. "After COVID-19. Reorientation of crisis management in crisis," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(2), pages 799-810, December.
    17. Zbyslaw Dobrowolski, 2021. "Are the Supreme Audit Institutions Agile? A Cognitive Orientation and Agility Measures," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 52-62.
    18. Iden, Jon & Methlie, Leif B. & Christensen, Gunnar E., 2017. "The nature of strategic foresight research: A systematic literature review," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 87-97.
    19. Rammel, Christian & van den Bergh, Jeroen C. J. M., 2003. "Evolutionary policies for sustainable development: adaptive flexibility and risk minimising," Ecological Economics, Elsevier, vol. 47(2-3), pages 121-133, December.
    20. Terje Aven & Ortwin Renn, 2009. "On risk defined as an event where the outcome is uncertain," Journal of Risk Research, Taylor & Francis Journals, vol. 12(1), pages 1-11, January.
    21. Luigi Marengo, 2020. "Organizational politics and complexity: Coase vs. Arrow, March, and Simon," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(1), pages 95-104.
    22. D. Thorleuchter & D. Van Den Poel, 2013. "Weak Signal Identification with Semantic Web Mining," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/860, Ghent University, Faculty of Economics and Business Administration.
    23. Andreas Ziegler, 2017. "Economic calculus or personal and social values? A micro-econometric analysis of the acceptance of climate and energy policy measures," MAGKS Papers on Economics 201716, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    24. Peter J. Boettke & Ennio E. Piano, 2019. "Capital, Calculation, and Coordination☆," Research in the History of Economic Thought and Methodology, in: Including a Symposium on Ludwig Lachmann, volume 37, pages 9-24, Emerald Group Publishing Limited.
    25. Zbyslaw Dobrowolski, 2021. "The Strategy of Vaccination and Global Pandemic: How Framing May Thrive on Strategy During and After Covid-19," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 532-541.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zbysław Dobrowolski & Grzegorz Drozdowski & Mirela Panait & Simona Andreea Apostu, 2022. "The Weighted Average Cost of Capital and Its Universality in Crisis Times: Evidence from the Energy Sector," Energies, MDPI, vol. 15(18), pages 1-15, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grzegorz Drozdowski, 2021. "Economic Calculus Qua an Instrument to Support Sustainable Development under Increasing Risk," JRFM, MDPI, vol. 14(1), pages 1-12, January.
    2. Zbysław Dobrowolski, 2021. "Internet of Things and Other E-Solutions in Supply Chain Management May Generate Threats in the Energy Sector—The Quest for Preventive Measures," Energies, MDPI, vol. 14(17), pages 1-11, August.
    3. Zbyslaw Dobrowolski, 2020. "Forensic Auditing and Weak Signals: A Cognitive Approach and Practical Tips," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 247-259.
    4. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2005. "Company Financial Structure: A Survey and Implications for Developing Economies," Chapters, in: Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), Finance and Development, chapter 12, Edward Elgar Publishing.
    5. Rizov, Marian, 2008. "Corporate capital structure and how soft budget constraints may affect it," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22(4), pages 648-684.
    6. Grzegorz Drozdowski & Joanna Rogozińska-Mitrut & Jacek Stasiak, 2021. "The Empirical Analysis of the Core Competencies of the Company’s Resource Management Risk. Preliminary Study," Risks, MDPI, vol. 9(6), pages 1-12, June.
    7. Srinivasan Balakrishnan & Isaac Fox, 1993. "Abstract," Strategic Management Journal, Wiley Blackwell, vol. 14(1), pages 3-16, January.
    8. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2001. "Company Financing, Captial Structure, and Ownership: A Survey, and Implications for Developing Economies," SUERF Studies, SUERF - The European Money and Finance Forum, number 12 edited by Morten Balling, May.
    9. Huang, Guihai & Song, Frank M., 2006. "The determinants of capital structure: Evidence from China," China Economic Review, Elsevier, vol. 17(1), pages 14-36.
    10. Norton, Seth W., 1995. "Is franchising a capital structure issue?," Journal of Corporate Finance, Elsevier, vol. 2(1-2), pages 75-101, October.
    11. Alexander Reisz, 1999. "Temporal Resolution of Uncertainty, the Investment Policy of Levered Firms and Corporate Debt Yields," New York University, Leonard N. Stern School Finance Department Working Paper Seires 99-044, New York University, Leonard N. Stern School of Business-.
    12. Heiskanen, Aleksi & Hurmekoski, Elias & Toppinen, Anne & Näyhä, Annukka, 2022. "Exploring the unknowns – State of the art in qualitative forest-based sector foresight research," Forest Policy and Economics, Elsevier, vol. 135(C).
    13. Valérie Revest & Alessandro Sapio, 2012. "Financing technology-based small firms in Europe: what do we know?," Small Business Economics, Springer, vol. 39(1), pages 179-205, July.
    14. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    15. Beattie, Vivien & Goodacre, Alan & Thomson, Sarah, 2000. "Operating leases and the assessment of lease-debt substitutability," Journal of Banking & Finance, Elsevier, vol. 24(3), pages 427-470, March.
    16. Zbysław Dobrowolski & Grzegorz Drozdowski & Józef Ledzianowski, 2021. "The Competency Niche: An Exploratory Study," Risks, MDPI, vol. 9(11), pages 1-11, October.
    17. Alderson, Michael J. & Betker, Brian L., 1995. "Liquidation costs and capital structure," Journal of Financial Economics, Elsevier, vol. 39(1), pages 45-69, September.
    18. Corrado DI GUILMI, 2008. "Financial Determinants of Firms Profitability: A Hazard Function Investigation," Working Papers 315, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    19. Antonczyk, Ron Christian & Salzmann, Astrid Juliane, 2014. "Overconfidence and optimism: The effect of national culture on capital structure," Research in International Business and Finance, Elsevier, vol. 31(C), pages 132-151.
    20. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.

    More about this item

    Keywords

    Business economics; management; risk; uncertainty; public administration.;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • G0 - Financial Economics - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxiv:y:2021:i:2:p:165-174. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.