Question

Write a long essay about the role of macro- and micro-economics in managerial decision-making?

Answer 1

Microeconomics studies the behavior of individual customers and businesses; this branch's applied speciality is managerial economy. Macroeconomics discusses an economy as a whole 's efficiency, structure and behaviour. Managerial economics integrates strategic decisions with microeconomic theories and techniques. Compared with microeconomics it is more limited in scope. Macroeconomists are researching aggregate measures like GDP , unemployment levels, in order to understand the roles of the global economy.

Looking at macroeconomic trends you need to look at how secure the overall market climate is. If you see rising unemployment, house foreclosures, and bankruptcies, you can predict consumers may be wary of making purchases. Using this in your decision making by slowing down your product purchasing plans or agreeing to expensive expansion projects.

Trends in your neighbourhood and region can impact your small business immediately. Don't just look at economic patterns outside your company premises; look at your customers' economic climate. The most direct influence on your small business would be certain microeconomic conditions. Make your business decisions based on increasing and declining consumer expectations. When you tailor your marketing strategies to lower expectations while simultaneously lowering costs, you will withstand a downturn.

Bad news is distributing newspapers and articles over the Internet. At the foreign and local level the media will misrepresent poor economic times. Create your own findings whenever possible. Often bad economic news can present a small business opportunity. You can move to offering cheaper goods with fewer features , for example, or you can provide programs that are cost-effective for people who control their budgets. Poor economic news for your small company does not have to mean negative news in the headlines.

Your firm is a mini-economy by itself. Find the trends in the income, revenues and expenditures just as any other economic organization would trend. When you do well amid poor economic times, that could be because you are well placed in a competitive market. Don't allow neighborhood or world news to lead you into decisions that would undermine your success. Consumers don't simply avoid purchasing in downtrends; they either buy less, or gravitate to more economical purchases. You can service changing purchasing habits and still make a profit. Examination of the budgets and sustainability of your own business will be a part of your decision making.