article thumbnail

What Economists Know That Managers Don’t (and Vice Versa)

Harvard Business Review

The section on the profit maximization hypothesis at the end of the introductory chapter of his classic 1988 textbook on industrial organization concludes by saying that even if a firm doesn’t maximize profits, it can be treated, for the purposes of many of its interactions with the outside world, as if it does. Even Tirole betrays this bias.

article thumbnail

What Economists Know That Managers Don’t (and Vice Versa)

Harvard Business Review

The section on the profit maximization hypothesis at the end of the introductory chapter of his classic 1988 textbook on industrial organization concludes by saying that even if a firm doesn’t maximize profits, it can be treated, for the purposes of many of its interactions with the outside world, as if it does. Even Tirole betrays this bias.

article thumbnail

7 Ways to Improve Operations Without Sacrificing Worker Safety

Harvard Business Review

They convey to workers what’s really important, and they create ample context for inadequate safety focus lower down the organization. The term “safety culture” is misleading because it suggests organizations have multiple cultures: one for safety, another for production, and perhaps others for quality and for sales.