This book is noted for using economics to analyze real-world management problems. The fourth edition maintains this focus but differs from the third edition in several ways.

• A new chapter on Corporate Governance: This new chapter uses the organizational architecture framework to provide an integrated and comprehensive analysis of corporate governance. The chapter covers the causes and implications of contemporary governance scandals, provides examples of international corporate governance models, and explores the effects of the Sarbanes-Oxley Act. Boxed examples include the WorldCom and Tyco scandals, Hewlett Packard's firing of former CEO Carly Fiorina, and commercial bank prepay transactions. The chapter includes an appendix entitled, Choosing Among the Legal Forms of Organization.
• Organizational Economics topics have been updated: These updates reflect the review of economic literature on incentives as well as expanded analysis of self selection in labor markets. New applications include a mini-case on Apple Computer's pricing policies for digital music and examples of the effects of Hurricane Katrina and increased gasoline prices.
• The new edition provides an expanded coverage of basic microeconomics and includes a more detailed discussion and analysis of comparative advantage, consumer and producer surplus and the implication of government imposed price caps and floors. Two new appendices expand on the theory of consumer behavior and present value analysis/stock-market valuation.
• Employing current articles from the business press throughout the book provides further texture and illustrates how the book's powerful framework can be used to analyze topical business problems.
• New mini-case on Apple's pricing of downloaded music purchased through iTunes Music Store. (Chapter 7).
• Updated discussion of research on incentive compensation and performance evaluation.
• More end-of-chapter problems.