What Is Business Economics;Nature, Scope With Great Examples

Business economics may be defined as that branch of economics which is directly or indirectly concerned with the exchange of commodities and services. It is a study of the methods by which goods pass from the producer, or source of supply, to the consumer, or to the place where they are used to satisfy the wants of men. The study of business economics has therefor much in common with what was formerly known as the theory and practice of commerce.

Components of Business Economics

  • Marketing . Marketing is the business function that analyzes the most rational and efficient choices and strategies for marketing the products and services offered by the company.
  • Accounting . Accountancy is the function of surveying, processing and writing company facts. The organization of information is treated with different levels of synthesis (eg balance sheet, accounting records, etc.).
  • Business finance . Corporate finance is the corporate function that analyzes the decisions of a financial nature, the management of resources and the financial means of a company.

Business Economics cannot be deduced from the study of a single business, but it is necessary to compare and examine critically as many businesses as possible so as to understand their interaction or behavior. A careful study of the various brandies of Business Economics, such as the business of the manufacturer, the departmental stores, the multiple shop system, and similar business undertakings, soon leads to the conviction that such organizations must be viewed both from the standpoint of the practical business man and also from that of the national economist.

How Can Business ECONOMIST WORK  Better In Organization.

Specialists of business economics are in demand in various fields of activity. They can occupy positions of economist-analyst, financier, accountant, manager, administrator in different enterprises, organizations, state institutions, banks. Also, professionals in the field, have the necessary qualifications to establish their own business. Main duties of specialists in the economic sphere:

  • Conclusion and control of contracts with counter-parties
  • Work with banks, implementation of banking and cash transactions, control of cash flows
  • Analysis of accounts receivable and accounts payable
  • Reports on the financial activities of the company (budgeting, planning, management accounting)
  • Preparation, delivery of all reports
  • Interaction with regulatory bodies
  • Calculation and payment of wages.

The importance of the Business Economics In Business

The economy is the science that studies the distribution of scarce resources among the members of a society for the satisfaction of their needs. However, while resources are limited, the needs are endless, and that is where the importance of economic analysis in the business world lies: in the satisfaction of needs. Thus, the common denominator of business areas is the set of fundamental principles of economic analysis.

During their training, business students understand the role of the consumer, producer and the markets in which they interact (micro-economic theory). In addition, they analyze the functioning of the economy as a whole, which helps them effectively conduct credit, financial, investment, merger and / or acquisition negotiations, or corporate restructuring, once they enter the labor market.

The study of the economy fosters its capacity to interpret economic phenomena such as inflation, unemployment rate, public deficit, economic crises, economic policy, balance of payments, interest rate and government debt (macroeconomic theory), including the consequences of not efficiently manage the resources of companies and governments.

Business students understand the relationships between production and consumption, which allows them to identify and generate business opportunities, designing and directing companies in a changing economic environment. The combination of economic and business skills supports them when they assume responsibilities in market research, business consulting, public management and private management.

The students of the business sciences reason about the allocation of resources within the dynamics of the markets, the capital flows and the national and international trade, since during their training they acquire the economic knowledge to trace investment strategies and implement the necessary adjustments within the companies, derived from the changing economic trends.

The economic bases that business careers provide are essential to work in economic development agencies, chambers of commerce, foreign trade logistics entities, corporate finance, official economic planning entities, financial intermediaries, or simply to work in places where they can exploit business opportunities.

Business students understand that the degrees of openness and the size of economies vary and that the high level of interaction and interdependence among them encourages learning to analyze the economic conjunctures. Similarly, the study of economics allows them to understand the financial sector, credit levels, economic policies and economic activity in general for proper business decision making.

Therefore, business students study the functioning of the economy during their courses of Economic Theory, in order to remain alert to the results of economic activity when there are changes in economic policy decisions (for example, they should warn the consequences of a restrictive monetary policy on the ability of the company to deal with its debt). The knowledge of the Economic Theory helps to make the management of a business more efficient.

by Abdullah Sam
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