Some of the important duties performed by managerial economist are as follows:
1. Study of the Business Environment:
Every firm has to take into consideration such external factors as the growth of national income, volume of trade and the general price trends, for its policy decision.
A firm works within a business environment. The basic elements of business environment for a firm are the trend of growth of national economy and world economy and phase of the business cycle in which the economy is moving.
At what rate and where is population getting concentrated? Where are the demand prospects for established and new products? Where are the prospective markets? These questions lead the economists into purposeful studies of the economic environment.
The international economic outlook is a very important environmental factor for exporting firms. The nature and degree of competition within the industry in which a firm is placed are also a part of the business environment. The kind of economic policies pursued by the government constitute a powerful dement of the business environment of a firm.
What are the priorities of the new five-year plan? In which sectors of the economy have the outlays been increased? What are the budgetary trends? What about changes in expenditure, tax rates tariffs and import restrictions? What export incentives are being given? For all purposes, the economists play a significant role.
2. Business Plan and Forecasting:
The business economists can help the management in the formulation of their business plan by forecasting and economic environment. The management can easily decide the timing and locating of their specific action. The managerial economist has to interpret the national economic trends and industrial outlook for their relevance to the firm in which he is working.
He advises top management by means of short, business like practical notes. In a partially controlled economy like India, the business economist translates the government’s intentions in business jargon and also transmits the reaction of the industry to propose changes in government policy.
3. Study of Business Operations:
The business economist can also help the management in decision making relating to the internal operations of a firm, i.e., in deciding about price, rate of operations, investment and growth of the firm for offering this advice: the economist has specific analytical and forecasting techniques which yield meaningful conclusions.
What will be the reasonable sales and profit budget for the next year? What are the suitable production schedules and inventory policies? What changes in wage and price policies are imperative now? What would be the sources of finance? Thus, he is trained to answer such questions posed by the top management.
4. Economic Intelligence:
The business economist also provides general intelligence services by supplying the management with economic information of general interest so that they can talk intelligently in conferences and seminars. They are also supplied the facts and figures for preparing the annual reports of the firm. Those facts and figures are collected by the business economist as he understands the literature available on business activities.
5. Specific Functions:
Business economists are now performing specific functions as consultants also. Their specific functions are demand forecasting, industrial market research, pricing problems of industry, production programmes, investment analysis and forecasts. They also offer advice on trade and public relations, primary commodities and capital projects in agriculture, industry, transport and tourism and also of the export environment.
6. Participation in Public Debates:
The business economists participate in public debates organized by different agencies. Both governments and society seek their advice. Their practical experience in business and industry gives value to their observation. In nut shell a business economist can play a multi-faceted role. He is not only an analyst of current trends and policies for his employers but also a bridge between the businessmen in the specific industry and the government. He acts as a spokesman of his firm and interpreter of the Government.