Role of Business Economist
Business Economist plays a vital role in the management of the business. He has to take so many decisions for the business. He even helps the management in taking decisions by processing the information necessary for decision-making. The managerial economist, with good knowledge of economic principles, can obtain and analyze information necessary for profitable decision-making.
The managerial economist has to take many decisions of his own like whether or not to close down a branch when it becomes unprofitable, whether a component needed for production can be bought or product etc. A clear understanding of the specific functions to be performed by a managerial economist can be had from a survey of British industry, made by Alexander and Kemp.
- Production scheduling.
- Sales forecasting.
- Market research.
- Economic analysis of competing companies.
- Pricing problems of industry.
- Investment appraisal.
- Security management analysis.
- Advice on foreign exchange management.
- Advice on trade.
- Environmental forecasting.
Thus the managerial economist has to perform a lot of functions. Of these, the marketing function is the most important. The managerial economist has to make market research and sales forecast. For this, he may make use of the information of his own business and those of similar competing firms. For this, he may have to make a detailed statistical analysis also.
Responsibilities of Managerial Economist
The managerial economist must, first of all, understand and promote the objectives of the firm. The main objective of almost all firms is to maximize profit. All his efforts will then be to help the firm achieve this goal. If he understands this objective and coordinates all the efforts to help the firm achieve the same, he will be a successful man.
Managerial decisions are always related to the future. Success is always uncertain and this uncertainty increases the responsibility of risk. The managerial economist, by making use of the economic theories, should try to make the forecasts as accurate as possible, so that the risk element can be reduced. A deep understanding and application of economic theory make him a successful managerial economist.