Econometrics is a mathematical technique for determining how inputs influence output. Econometrics employs multiple-linear-regression techniques to determine correlations between measured inputs and measured outputs. Those correlations can be utilized to make management decisions about employing resources effectively.

Management is the coordination of resource inputs toward optimizing some desired outputs. It is important to differentiate between "maximizing" output and "optimizing" output. In the private sector, "optimizing" output means finding the zone of maximum profitability. In the public sector, "optimizing" output means streamlining the organization to best serve the constituencies from limited resources.

Econometric Management is a method for analyzing an organization's mission into inputs and outputs and then determining the optimal strategy for success based on knowing how inputs influence outputs. "System optimizing" means balancing individual segments of an organization in order to orchestrate the utilization of internal resources for the success of the overall organization instead of the individual segments. Only by knowing how each segment's use of inputs correlates to organizational outputs can a coherent management strategy be developed.