Business economy is a subfield in economic studies that employs mathematical theories and statistical methodologies to study the factors leading to the concentration of productive assets and the interdependence of enterprises in the economy. It looks into how the distribution of wealth in society influences the level of production. This branch of economics has many application areas such as market economics, business cycles, economic growth, financial market structure, monetary policy and company performance. Some of its important fields of research include human resource development, investment, bargaining, firm structure, price action, decision making, and the corporate sector.
Microeconomic Theory: Micro-economic theory looks into the economic behavior of organisations, their organisations and the economic environment. The concepts of microeconomics are not confined to economic activities of organisations, but also include non-economic interactions and decision making within organisations. In general, this branch of economics focuses on micro-economic behaviour of organisations as compared to economic behaviour of the firms. Two sub-disciplines of business economics are micro economics and macroeconomics.
Operations Research and Economics: Operations research is an economic activity concerned with economic activity. Economists who specialize in operations research provide advice on managerial, economic and social policies that affect the operations of organisations. They use mathematical, statistical, environmental, decision making and other techniques to examine the interactions of people and organisations within an organisation. Many people in business organisations believe that operations research results in useful information about what is happening within an organisation. Other people believe that operations research produces nothing more than flawed or inaccurate assumptions and projections about future economic conditions.
Economics of Growth and Employment: The scope and aim of economics is to understand economic systems and how people produce and support themselves. Economics is viewed by some as a tool for understanding and predicting economic cycles, national budgets and national capacity. By studying economics, the social scientists attempt to answer questions like how to improve the efficiency with which humans and organisations exploit natural resources, how to create economic growth and employment opportunities for all, and how to regulate economic activity. There are two main schools of thought in economics; macroeconomics which looks at the broadest economic structures and policy microeconomics which focuses on the narrower economic structures. The macro school of thought tries to understand the economies of whole countries while the micro school of thought tries to understand the economies of small isolated units.
Economics is very different from many other fields in that it is built upon a solid body of empirical evidence. The subjectivistic character of economics lends itself to an approach that is hypothesis based, rather than theory based. Unlike the methodology of science, in which a thesis is established after experimentation and analysis has been completed, with economics this pattern is quite the opposite. Economics relies upon the study of patterns in action and the application of methods that have been tried and tested.
Many of the problems that arise in business organisation and politics are difficult to solve due to their intricate nature. In applied economics the difficulty encountered in many business decisions can be reduced to a few simple concepts. The concepts used in applied economics are those that are economic, that have been tried and tested, and that can be explained by models. Applied economics has many branches including; real estate, corporate finance, macroeconomics, microeconomics, insurance, investment, personal assets, risk management, portfolio management, price determination, and government regulation.
The branch of economics known as micro-economics studies specific economic factors of a country, state or district and attempts to explain them in a general economic framework. The macro-theory of economics attempts to explain national income and expenditures in a wider context than the micro-theory. For example national income is generally determined by the production and consumption of goods and services and adjustments in demand; national income is then represented as a function of population and capital assets.
Microeconomics attempts to describe individual economic variables of a business organisation in a broader context than that of national income. For example business owners use accounting principles to judge the efficiency and performance of their organisations. Business analysts then apply economic theories to assess the performance of an organisation based on the inputs available. The discipline of business studies is one of the most important of all the economic sciences and continues to attract scholars for many decades. It provides business professionals with not only the knowledge they need to perform their jobs effectively but also allows them to build their understanding of how organisations operate, allowing them to make informed business decisions.