Business Economics ( B.COM) Hons.

 Business Economics [B.Com (Hons) I Year ]

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Business economics :- Business economics is a discipline which deals with the application of economic theory to business management. It deals with the use of economic concepts and principles of business decision making.

Business Economics may be defined as the study of economic theories, logic and methodology which are generally applied to seek solution to the practical problems of business. Business Economics is thus constituted of that part of economic knowledge or economic theories which is used as a tool of analysing business problems for rational business decisions. Business Economics is often called as Business Economics or Economic for Firms.

“Business Economics is economics applied in decision making. It is a special branch of economics bridging the gap between abstract theory and Business practice.” – Haynes, Mote and Paul.

“Business Economics consists of the use of economic modes of thought to analyse business situations.” - McNair and Meriam

“Business Economics (Business Economics) is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.” - Spencerand Seegelman.

“Business economics is concerned with application of economic concepts and economic analysis to the problems of formulating rational Business decision.” – Mansfield

Nature of Business Economics:

a)      A) Business Economics is a Science:- It is simply a systematic body of knowledge which can establish a relationship between cause and effect. Further, Mathematics, Statistics, and Econometrics are decision sciences. Business Economics integrates these decision sciences with Economic Theory to arrive at strategies to help businesses achieve their goals. Hence, it follows scientific methods and also tests the validity of the results. This is one aspect of the nature of business economics.

b)  B) It is Based on Micro Economics:- We understand the basic difference between micro and macroeconomics. A business manager is certainly more concerned about achieving the objectives of his own organization. After all, this helps him in ensuring profits and long-term survival of the firm. Business Economics is more concerned with the decision-making situations of individual establishments. Therefore, it depends on the techniques of Microeconomics.

c)      C) It Incorporates Elements of Macro Analysis :-  Even though all businesses focus on their profitability and survival, a firm cannot operate in a vacuum. The external environment of the economy like income and employment levels in the economy, tax policies, etc., affects the firm. All these external factors are components of  Macro economy.

 Therefore, a business manager has to take all such factors into consideration which may influence his business environment.

d)     D) It is an Art:-  Business Economics is an art as it requires the practical application of rules and principle to achieve set objectives.

e)      E) Use of Theory of Markets and Private Enterprises:-  Business Economics primarily uses the theory of markets and private enterprises. It uses the theory of the firm and resource allocation in a private enterprise economy.

f)         F)Pragmatic in Approach:- Microeconomics is purely theoretical and analyzes economic occurrences under unrealistic assumptions. On the other hand, Business Economics is pragmatic in its approach. It tries to solve the problems which the firms face in the real world.

g)  G) Interdisciplinary:- Business Economics incorporates tools from many other disciplines like mathematics, statistics, accounting, marketing, etc. Therefore, is in interdisciplinary in nature.

h)  H) Normative:- Broadly speaking, Economic Theory has evolved along two lines – Positive and Normative. A positive or pure science analyzes the cause and effect relationship between variables in a scientific manner. However, it does not involve any value judgment. In simpler words, it describes the economic behaviour of individuals or society without focusing on the desirability of such behaviour. 

      On the other hand, normative science involves value judgments. It suggests a course of action under the given circumstances.

Scope of Business Economics: The scope of Business economics is not yet clearly laid out because it is a developing  science. Even then the following fields may be said to generally fall under Business Economics:

1. Demand Analysis and Forecasting
2. Cost and Production Analysis
3. Pricing Decisions, Policies and Practices
4. Profit Management
5. Capital Management

These divisions of business economics constitute its subject matter. Recently, Business economists have started making increased use of Operation Research methods like Linear programming, inventory models, Games theory, queuing up theory etc., have also come to be regarded as part of Business Economics.

1. Demand Analysis and Forecasting: A business firm is an economic organisation which is engaged in transforming productive resources into goods that are to be sold in the market. A major part of Business decision making depends on accurate estimates of demand. A forecast of future sales serves as a guide to management for preparing production schedules and employing resources. It will help management to maintain or strengthen its market position and profit base. Demand analysis also identifies a number of other factors influencing the demand for a product. Demand analysis and forecasting occupies a strategic place in Business Economics.

2. Cost and production analysis:-  A firm’s profitability depends much on its cost of production. A wise manager would prepare cost estimates of a range of output, identify the factors causing are cause variations in cost estimates and choose the cost minimising output level, taking also into consideration the degree of uncertainty in production and cost calculations. Production processes are under the charge of engineers but the business manager is supposed to carry out the production function analysis in order to avoid wastages of materials and time. Sound pricing practices depend much on cost control. The main topics discussed under cost and production analysis are: Cost concepts, cost-output relationships, Economics and Diseconomies of scale and cost control.

 3. Pricing decisions, policies and practices: Pricing is a very important area of Business Economics. In fact, price is the genesis of the revenue of a firm ad as such the success of a business firm largely depends on the correctness of the price decisions taken by it. The important aspects dealt with this area are: Price determination in various market forms, pricing methods, differential pricing, product-line pricing and price forecasting.

 4. Profit management: Business firms are generally organized for earning profit and in the long period, it is profit which provides the chief measure of success of a firm. Economics tells us that profits are the reward for uncertainty bearing and risk taking. A successful business manager is one who can form more or less correct estimates of costs and revenues likely to accrue to the firm at different levels of output. The more successful a manager is in reducing uncertainty, the higher are the profits earned by him. In fact, profit-planning and profit measurement constitute the most challenging area of  Business Economics.

 5. Capital management: The problems relating to firm’s capital investments are perhaps the most complex and troublesome. Capital management implies planning and control of capital expenditure because it involves a large sum and moreover the problems in disposing the capital assets off are so complex that they require considerable time and labour. The main topics dealt with under capital management are cost of capital, rate of return and selection of projects.

Significance of Business Economics : The significance of business economics can be discussed as under :

1. Business economic is concerned with those aspects of traditional economics which are relevant for business decision making in real life. These are adapted or modified with a view to enable the manager take better decisions. Thus, business economic accomplishes the objective of building a suitable tool kit from traditional economics.

2. It also incorporates useful ideas from other disciplines such as psychology, sociology, etc. If they are found relevant to decision making. In fact, business economics takes the help of other disciplines having a bearing on the business decisions in relation various explicit and implicit constraints subject to which resource allocation is to be optimized.

3. Business economics helps in reaching a variety of business decisions in a complicated environment. Certain examples are :

1.       What products and services should be produced?
2.        What input and production technique should be used?
3.         How much output should be produced and at what prices it should be sold?
4.        What are the best sizes and locations of new plants?
5.        When should equipment be replaced?
6.         How should the available capital be allocated?

4. Business economics makes a manager a more competent model builder. It helps him appreciate the essential relationship characterising a given situation.

5. At the level of the firm. Where its operations are conducted though known focus functional areas, such as finance, marketing, personnel and production, business economics serves as an integrating agent by coordinating the activities in these different areas.

6. Business economics takes cognizance of the interaction between the firm and society, and accomplishes the key role of an agent in achieving the its social and economic welfare goals. It has come to be realised that a business, apart from its obligations to shareholders, has certain social

Obligations. Business economics focuses attention on these social obligations as constraints subject to which business decisions are taken. It serves as an instrument in furthering the economic welfare of the society through socially oriented business decisions.

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Central Problems of an Economy

An economic problem generally means the problem of making choices that occurs because of the scarcity of resources. It arises because people have unlimited desires but the means to satisfy that desire is limited. Therefore, satisfying all human needs is difficult with limited means.

Causes of Economic Problem

• Scarcity of resources: Resources like labour, land, and capital are insufficient as compared to the demand. Therefore, the economy cannot provide everything that people want.
• Unlimited Human Wants: Human beings’ demands and wants are unlimited which means they will never be satisfied. If a person’s one want is satisfied, they will start having new desires. People’s wants are unlimited and keep multiplying, therefore, cannot be satisfied because of limited resources.
• Alternative Uses: Resources being scarce, the same resources are used for different purposes. and it is therefore essential to make a choice among resources. For instance, petrol is used in vehicles and is also used for generators, running machines, etc. Therefore, the economy should now make a choice within the alternative uses.

List of Economic Problems:

 (A) What to produce?

• A country cannot produce all goods because it has limited resources.
• It has to make a choice between different goods and services.
• Every economy has to decide what goods and services should be produced.
• Example: If a farmer has a single piece of agricultural land, then he has to make a choice between two goods, i.e., whether to grow rice or wheat.
• Similarly, our government has to decide where to allocate funds, for the production of defence goods or consumer goods, and if both, then in what proportion.

(B) How to produce?

• This problem refers to the choice of technique of production. It arises when there is an availability of more than one way to produce goods and services.
• There are mainly two techniques of production. These are:

a)       Labour intensive technique(greater use of labour)

b)       Capital intensive technique(greater use of machines)

• Labour intensive technique promotes employment whereas capital intensive technique promotes efficiency and growth.

 (C) For whom to produce?

• The society cannot satisfy all the wants of all the people. Therefore, it has to decide who should get how much of the total output of goods and services.
• Society has to make choice of whether luxury goods or normal goods have to be produced. This distribution or proportion directly relates to the purchasing power of the economy

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Remained Syllabus will be covered by Other faculty member.

First Aid & Health

 ( Second Semester )

First Aid & Health

Research Report Preparation Material

 Research Report Preparation Material

Writing a Research Report

Structure You must carefully read your course information details to ensure that you comply with what the lecturer/tutor stipulates. A report is typically made up of three main divisions:

(1)   Preliminary material,

(2)   Body and

(3)   Supplementary material.

 

Each of the sections contains a different kind of content. Refer to the tables below:

 

Broad Divisions	Individual Sections
(1) Preliminary material	·         Title of Report ·         Table of Contents (not always required) ·         Abstract/Synopsis
(2) Body of report	·         Introduction ·         Literature Review (sometimes included in the Introduction) Methodology ·         Results ·         Discussion ·         Conclusion ·         Recommendations (sometimes included in the Conclusion)
(3) Supplementary material	·         References or Bibliography ·         Appendices

 

 

Individual Sections	Content of Each Section
Title of Report	Concise heading indicating what the report is about
Table of Contents (not always required)	List of major sections and headings with page numbers
Abstract/Synopsis	Concise summary of main findings
Introduction	What you researched and why
Literature Review (sometimes included in the Introduction)	Other relevant research in this area
Methodology	What you did and how you did it
Results	What you found
Discussion	Relevance of your results, how it fits with other research in the area
Conclusion	Summary of results/findings
Recommendations (sometimes included in the Conclusion)	What needs to be done as a result of your findings
References or Bibliography	All references used in your report or referred to for background information
Appendices	Any additional material which will add to your report

 

 

STEP 1 Analyse the Task:- As with any assignment task, you must first analyse what is expected of you. This involves careful reading of the assignment task as outlined in your course information book. You may find the following questions useful when analysing the task: 

·         What is the purpose of the report?(It could be analysing, persuading or reporting on an investigation.) 

·         Who is the audience for the report?

·         What is the word limit?

(Many times the word limit only includes the body of the report.)

·         What is the topic of the report? (The topic may be specified by the lecturer, but other times you will have a choice.) 

·         What is the expected format of the report?

 

STEP 2 Develop a Rough Plan:-  Use the section headings (outlined above) to assist with your rough plan. Write a thesis statement that clarifies the overall purpose of your report. Jot down anything you already know about the topic in the relevant sections.

 

STEP 3 Do the Research Steps 1 and 2 will guide your research for this report. You may need to report on other research on a particular topic or do some research of your own. Keep referring to your analysis and rough plan while you are doing your research to ensure that you remain on track. Give yourself plenty of time for this step, as the research phase of your work will usually take the most time of any step in producing your report. Also, ensure you keep correct bibliographic details for all of the material you may later use in your report.

 

STEP 4 Draft the Body of Your Report

 

Introduction - The purpose of your report. The thesis statement will be useful here. Background information may include a brief review of the literature already available on the topic so that you are able to ‘place’ your research in the field. Some brief details of your methods and an outline of the structure of the report. 

 

Literature Review - If asked to do a separate literature review, you must carefully structure your findings. It may be useful to do a chronological format where you discuss from the earliest to the latest research, placing your research appropriately in the chronology. Alternately, you could write in a thematic way, outlining the various themes that you discovered in the research regarding the topic. Again, you will need to state where your research fits.

 

Methodology - Here you clearly outline what methodology you used in your research i.e. what you did and how you did it. It must be clearly written so that it would be easy for another researcher to duplicate your research if they wished to. 

·         It is usually written in a 'passive' voice (e.g. the participants were asked to fill in the questionnaire attached in Appendix 1) rather than an 'active' voice (e.g. I asked the participants to fill in the questionnaire attached in Appendix 1).

·         Clearly reference any material you have used from other sources. Clearly label and number any diagrams, charts, and graphs. Ensure that they are relevant to the research and add substance to the text rather than just duplicating what you have said. You do not include or discuss the results here. 

 

Results - This is where you indicate what you found in your research. You give the results of your research, but do not interpret them. 

 

Discussion - This is where you discuss the relevance of your results and how your findings fit with other research in the area. It will relate back to your literature review and your introductory thesis statement. 

 

Conclusion - This is a summary of the most significant results/findings. You should not include any new material in this section. Sometimes you could indicate some areas where your research has limits or where further research would be useful. 

Recommendations - This includes suggestions for what needs to be done as a result of your findings. Recommendations are usually listed in order of priority.

 

STEP 5 Draft the Supplementary Material 

·         References or Bibliography - This includes all references used in your report or referred to for background information. This must be done using the referencing convention specified by your lecturer/tutor. 

·         Appendices - These should add extra information to the report. If you include appendices they must be referred to in the body of the report and must have a clear purpose for being included. Each appendix must be named and numbered.

 

STEP 6

Draft the Preliminary Material 

·         Title of Report - Make sure this is clear and indicates exactly what you are researching.

·         Table of Contents - List all sections, sub headings tables/graphs appendices and give page numbers for each. 

·         Abstract/Synopsis - This gives a very brief overview of the report in a condensed form for more.

  

STEP 7

Polish Your Report

The final step is checking your report to ensure you have followed all of the guidelines as outlined in your course information. For more detail on how to do this well, please refer to the Learning Guide Editing Your Own Work.