Application of economic ideas
Different companies use different economic ideas to conduct their business and to set their objectives. Different economists have postulated different ideologies that these companies adopt in their process of doing business. Notably economists that have held opposite economic ideologies are Keynes and Hayek. The paper uses Chevron Corp Energy as a case study in explaining the application of the concept of economic ideas.
Chevron Corp. Energy is one of the largest companies in the world that deals in production of energy. The company is headquartered at San Ramon in California. The company has subsidiaries in more than 100 countries across the globe (Texaco, 2013). It is involved in natural gas and crude oil industry including manufacturing, production transportation, marketing, chemical manufacturing and sales, power and geothermal generation. The company is also investing in advanced and renewable technologies to enable it achieve its objectives and aims (Texaco, 2013).
The company can help in understanding the application of economic ideas because of its importance in the general economic development. Its activities are of great impact on the economic development of various countries, as its areas of products require heavy investments. Therefore, it is important for the government and other interested stakeholders to be included in the policy formulation to ensure that the activities of the company do not impact negatively on the overall economy.
There are various big ideas in the economics that companies apply in their process of conducting business. One of the economic idea that chevron Corp. Energy uses is “market does not always work efficiently; government action may be needed. This idea conforms to Keynes economic ideas, which states that the government is essential in the operation of the economy (John, 2012). The government must intervene in the operation of is economy to ensure that, all mechanisms and process in place run efficiently. For instance, in case of high level of unemployment, the government has an obligation of ensuring that it intervenes and finds amicable solutions to such challenges. Therefore, in a company such as Chevron Corp. Energy that operates across the globe, it is important for the respective governments to intervene and to be included in their operations (Koehn, 2011). Without intervention or inclusion of government the products and services of the company will not be sold or get enough market. Therefore, this economic idea applies to this company as it operates in different environment that have various laws and policies.
Circular flow diagram shows the relationship of money and resources between firms and households. The firm plays various roles in ensuring that it achieves its goals. One of the roles of Chevron Corp. Energy is to exploit the available resources to be able to accrue revenue to enable it pay its workers and meet other costs related to the costs of materials and logistics among others. The company therefore, uses its workers who provide labor and at the same time uses their income to purchase the products that the company produces. Therefore in summary, the company plays a role of ensuring that products are available to its consumers and at the same time it ensures that it accrues some revenues which it uses for its development and in remitting of its tax to various governments that it operates in.
The company has a positive financial position indicated by its incomes. The income of the company has improved since 2008. In the financial year, which ended December 2012, the net income attributable to Chevron Corporation averaged US $ 26, 179 millions. The company recorded an improvement in its sales and operating revenues from its operations across the country, which it provides its services and products. This positive performance therefore made the company to carry on with its operations efficiently. This positive performance was also contributed because of the increased adoption to technologies in its production and other channels of doing its business. In my assessment, the financial position of the company is going to be positive. Various good signs are evident. One of the signs is the introduction of technology in its processes. The company has shifted to technology in almost all its chains of production and marketing which will make it a competitive in these areas. Furthermore, the company has put in place mechanism of embracing diversity, it employees different people with different levels of skills and competences that are going to impact positively on the organizations productivity. The income of the company has also increased in the past years and this is a manifestation of improvement in its financial standings. The company has also investment more in renewable resources, which is on high demand. This source of energy is environmental friendly and most of the countries approve this source of energy. Therefore, the company is geared to make high profits from this increased demand of this kind of resources. Furthermore, the company has identified other sources of oil such as the Gulf Coast, which will impact positively on its profits (Chevron Human Energy, 2013).
Chevron Human Energy. (2013). The power of human Energy. Retrieved from: http://www.chevron.com/
John, B. (2012). Principles of macroeconomics. Retrieved from: http://www.inflateyourmind.com/pdfs/macroeconomics.pdf
Koehn, N. (2011). The tale of the dueling economists. Retrieved from: http://www.inflateyourmind.com/pdfs/macroeconomics.pdf
Texaco. (2013). Chevron Corporation. Retrieved: http://www.texaco.com/trust-texaco/chevron- corp.aspx
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