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Role and Responsibilities of a Managerial Economist in economics

Role and Responsibilities of a Managerial Economist in economics

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Role and Responsibilities of a Managerial Economist in economics

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  1. Role and Responsibilities of a Managerial Economist in Business • A Managerial Economist has a significant role to play in business by assisting the management in their successful decision making and forward planning goals. • The factors which influence the business over a period may lie within the form or outside the firm. • (A) External and • (B) Internal factors.

  2. A. External Factors • The external factors lie outside the control of management, because they are external to the firm and are side to constitute the business environment. • The function of a Managerial Economist is to analyze the external factors and recommend suitable policies.

  3. 1. General Economic Conditions • The most important external factors is the general economic conditions of the economy such as business cycles, competitive conditions of the market, size and the rate of growth of national income, the regional pattern of income distribution, influence of globalization on the domestic economy etc.

  4. 2. Nature of Demand • Managerial Economist has to study the purchasing power trend in general and in the region concerned in particular.

  5. 3.Input Cost • The Managerial Economist has to advise the management on labour market conditions ie, the cost of labour in different regions and for different occupations. • He also studies the money market conditions, the changing scenario in government’s credit policy and the possible ways of achieving the least-cost combination of factors and so on.

  6. 4.Marketing • The Managerial Economist has to study the markets form where the firm is buying its raw materials and selling its finished goods. • The understanding helps him to evolve and frame a suitable price policy for the firm.

  7. Market Share • Managerial Economist has to examine the opportunities and strategies which help in the expansion of the firm’s share in the regional and international markets.

  8. Economic Policies • A Managerial Economist can also be helpful to management in making decisions relating to the internal operations of a firm considering the prevailing economic policies.

  9. B. Internal Factors • The analysis of cost structure and forecasting of demand are very essential. • More over, it is his responsibility to bring about a synthesis of policies relating to production, investment, inventories and price.

  10. C. Specific functions or Responsibilities of Managerial Economist • Sales forecasting, Industrial market research, Economic analysis of competing companies, Pricing problems of the industry, Capital projects, Production programmes, Security management analysis, Advice on trade and public relations, Advice on primary commodities, Advice on foreign exchange management, Economic analysis of agriculture, Analysis of underdeveloped countries and Environmental forecasting etc.

  11. Fundamental concepts • Incremental Reasoning • Opportunity cost • Contribution • Time Perspective • Time value of money – Discounting Principle • Risk and uncertainty

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