Business economics is a field in applied economics which uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets. A professional focus of the journal Business Economics has been expressed as providing "practical information for people who apply economics in their jobs." Business economics is an integral part of traditional economics. It is an extension of economic concepts to the real business situations. It is an applied science in the sense of a tool of managerial decision-making and forward planning by management. In other words, Business economics is concerned with the application of economic theory to business management.
Business economics is concerned with economic issues and problems related to business organization, management, and strategy. Issues and problems include: an explanation of why corporate firms emerge and exist; why they expand: horizontally, vertically and spacially; the role of entrepreneurs and entrepreneurship; the significance of organizational structure; the relationship of firms with the employees, the providers of capital, the customers, the government; the interactions between firms and the business environment.
Ambiguity in the use of term
The term 'business economics' is used in a variety of ways. Sometimes it is used as synonymously with industrial economics/industrial organisation, managerial economics, and economics for business. Still, there may be substantial differences in the usage of 'economics for business' and 'managerial economics' with the latter used more narrowly. One view of the distinctions between these would be that business economics is wider in its scope than industrial economics in that it would be concerned not only with "industry" but also businesses in the service sector. Economics for business looks at the major principles of economics but focuses on applying these economic principles to the real world of business. Managerial economics is the application of economic methods in the managerial decision-making process.
Interpretations from various universities
Many universities offer courses in business economics and offer a range of interpretations as to the meaning of the word. The Bachelor of Business Economics (BBE) Program at University of Delhi is designed to meet the growing need for an analytical and quantitative approach to problem solving in the changing corporate world by the application of the latest techniques evolved in the fields of economics and business.
The University of Miami defines business economics as involving the study of how we use our resources for the production, distribution, and consumption of goods and services. This requires business economists to analyze social institutions, banks, the stock market, the government and their relationships with labor negotiations, taxes, international trade, and urban and environmental issues.
Courses at the University of Manchester interpret business economics to be concerned with the economic analysis of how businesses contribute to welfare of society rather than on the welfare of an individual or a business. This is done via an examination of the relationship between ownership, control and firm objectives; theories of the growth of the firm; the behavioural theory of the firm; theories of entrepreneurship; the factors that influence the structure, conduct and performance of business at the industry level.
Italian Universities borrow their concept of business economics from the tradition of Gino Zappa, for example a standard course at the Politecnico di Milano involves studying corporate governance, accounting, investment analysis, budgeting and business strategy.
La Trobe University of Melbourne, Australia associates business economics with the process of demand, supply and equilibrium coordinating the behaviour of individuals and businesses in the market. Also, business economics extends to government policy, economic variables and international factors which influence business and competition.
- Moschandreas, Maria (2000). Business Economics, 2nd Edition, Thompson Learning, Description and chapter-preview links.
- National Association for Business Economics, Business Economics Archived November 11, 2011, at the Wayback Machine.®
- Sloman, J and Sutcliffe (2004) Economics for Business, Financial Times/ Prentice Hall; 3 edition
- • Jones, Trefor, 2004 Business Economics and Managerial Decision Making, Wiley. Description and chapter-preview links.
• Wilkinson, Nick (2005). Managerial Economics: A Problem-Solving Approach, Cambridge University Press. Description and preview.
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- "Archived copy". Archived from the original on 2008-12-24. Retrieved 2009-01-13.