IB827-10 Economics of the Business Environment
Introductory description
Organisations exist within macroeconomic and market contexts that significantly impact upon their behaviour and performance. This module is designed to introduce students to:
i. some understanding of how macroeconomic and market contexts themselves are determined and change over time
ii. how the context interacts with the internal economics of the firm and how this impacts upon organisational decision-making.
Module aims
This module will introduce a number of basic concepts used by economists, illustrate the use of these concepts in business, and illustrate how Economics as a discipline can be used to approach business-related questions. The module will require that students become familiar with major recent national and international economic and business trends. The tools of economic analysis presented in this module will generally provide a basis for other modules offered on the MBA, for example, strategy modules.
The module will help students to:
develop knowledge of the global economy and of key current events
understand some core elements of economic analysis and be able to use them
appreciate the internal economics of a business and the contextual constraint on business decisions and be aware of what business cannot do or control in its strategy-making
develop an increased awareness of the effects of public policy on business
understand why business must cope with uncertainty and risk.
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
The module will contain three interrelated parts:
the internal economics of the firm
the general business environment including both the market and the macroeconomy
the interaction of firm level decision-making with the macroeconomic and market context
The below order may vary from time to time.
The macro context and exposure
Business, strategy and the macroeconomy
Markets and the Macroeconomy
GDP cycles and aggregate demand
Overseas trade and the macroeconomy
Government and the Economy
Macroeconomic policy
Aggregate Supply Price Inflation and unemployment
Current macroeconomic issues
The Internal Economics of the Firm
Inputs and outputs . Production Possibility curves and the production function
Costs and production in the short run. Vulnerability to external shocks
Costs and production in the Long run Scale and Scope Economies
Long Run Decisions to Invest in Physical and Human Capital. Causes and effects
The Economic Environment
The market context and exposure in product and Input markets
Buyer behaviour and product demand
Industries and markets
The basics of supply and demand curves
Perfect competition models. Implications for strategy
Markets for Inputs
Coping with the market and the macroeconomy :
Raising profitability levels and reducing profitability variance ; the role of
market imperfections
Product Differentiation and Monopolistic Competition
Monopoly and Barriers to Entry
Public Policy and monopoly
Monopoly and Monopsony in Input markets
Oligopoly. Collusion and competition
Strategic Rivalry
Sunk costs and Contestability
Strategic Entry Deterrence
Economics and Strategy
Learning outcomes
By the end of the module, students should be able to:
- Demonstrate advanced understanding of how shocks and policies affect key macroeconomic variables.
- Demonstrate systematic understanding of market structures.
- Demonstrate advanced understanding of the internal economics of a firm and how the firm is affected by external factors.
- Demonstrate comprehensive understanding of strategies that businesses may take to smooth the effect of external shocks.
- Critically appreciate the analysis in economic newspapers (FT, Economist).
- Interpret and assess economic issues affecting society.
- Use economic thinking to make professional decisions.
Indicative reading list
Begg, D. and Ward, D. (2016) . Economics for Business (5th edn) Maidenhead: McGraw-Hill.
Mankiw, N.G. and Taylor, M.P. (2014). Economics (3rd edn). Andover: Cengage.
Subject specific skills
Evaluate a business using a combination of economic data and economic theory.
Interpret the macroeconomic environment using data and macroeconomic models.
Transferable skills
Written communication
Study time
| Type | Required |
|---|---|
| Lectures | 12 sessions of 1 hour (12%) |
| Online learning (scheduled sessions) | 6 sessions of 1 hour (6%) |
| Online learning (independent) | 12 sessions of 1 hour (12%) |
| Private study | 28 hours (28%) |
| Assessment | 42 hours (42%) |
| Total | 100 hours |
Private study description
Private Study and preparation for lectures
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group A6
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
|||
| Individual Assignment | 80% | 34 hours | Yes (extension) |
Reassessment component is the same |
|||
Assessment component |
|||
| Group Assignment | 20% | 8 hours | No |
|
Group assignment |
|||
Reassessment component is the same |
|||
Feedback on assessment
Assessments are graded using standard University Postgraduate Marking Criteria and written feedback is provided. Feedback for individual essays include comments on a marksheet.
Courses
This module is Core option list A for:
- Year 3 of TIBS-N1Q1 Postgraduate Business Administration (Executive) London
- Year 1 of TIBS-N1PW Postgraduate Taught Business Administration (Distance Learning)
-
TIBS-N1Q2 Postgraduate Taught Business Administration (Distance Learning)
- Year 1 of N1Q2 Business Administration (Distance Learning)
- Year 2 of N1Q2 Business Administration (Distance Learning)