Roleof Responsible Stewardship in General Contracting
Roleof Responsible Stewardship in General Contracting
Opportunity cost is a criticalconcept in managerial economics as it enables decision makers to makeinformed choices when more than one alternative course of action isavailable (Hirschey, 2016).This is pegged on the fact that due to resource scarcity, managersare often compelled to make significant sacrifices that reflect realor nominal monetary value of the choices made. In this regards, it isalways sensible to compare decisions with their opportunity costs toensure a practical outcome. This report presents a discourse based onthe opportunity cost notion relative to a personal life experience.
Priorto 2009, the construction industry within the US was performingexceptionally well that I was able to run a general contractingbusiness. Costs of capital were low, production possibilities werehigh, and demand for such services was huge in comparison to supplymaking it a viable career choice for me (Hirschey, 2016).At the time, contractors had the option of having a comparativeadvantage on cost and thus maximize on returns. However, the economicdownturn that characterized this period and more so, the USconstruction industry contributed to the collapse of my business. Iwas presented with a set of choices concerning my future in theconstruction industry. I made the choice to seek employment as aproject manager for other companies in the construction industry,which had managed to remain operational. Working as a project manageravailed an opportunity cost where I would continue to grow in theconstruction industry, evade instances of severe economic hardships,experience no need for capital inputs and cultivate optimized timemanagement.
Conclusively, deciding to offer myservices rather than continue working on my project was a goodalternative to the available opportunity cost. If I had not opted towork as a project manager with other organizations, non-monetarycosts would have become irreversibly high. As such, the benefits ofopting for service as a project manager have far outweighed the costsforgone in remaining unproductive.
References
Hirschey, M.(2016). Managerial Economics. Boston, MA: CengageLearning.
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