MANAGERIAL UTILITY FUNCTION AND ITS IMPACT ON DECISION-MAKING IN THE COMPANY

This paper focuses on the comparison of current theories of the firm, which are further used as inputs for the managerial utility function. The quantification of this function is also based on the principal-agent problem. The individual approaches to the problem of firm's theory are represented by Baumol's and Williamson's model, whose mathematical expression of maximization utility benefits is implemented into one function of the managerial utility, as the main output of this paper. The result is the function of utility, which depend on four variables (total revenue, employee expenses, minor benefits and personal preferences). In addition, the paper represents a possible implementation of this function into the company's decision-making process. The assumption for this implementation is multiple-criteria decision analysis (MCDA). The paper uses the principles of multiple-criteria decision making, especially Saaty's matrix.