Multi-Disciplinary Nature Of Business Economics

Many new subjects have evolved in recent years due to the interaction among basic disciplines. While there are many such new subjects in natural and social sciences, Business economics can be taken as the best example of such a phenomenon among social sciences. Hence it is necessary to trace its roots and relationship with other disciplines.

1. Relationship with economics:

The relationship between Business economics and economics theory may be viewed from the point of view of the two approaches to the subject Viz. Micro Economics and Marco Economics. Microeconomics is the study of the economic behavior of individuals, firms and other such micro organizations. Business economics is rooted in Micro Economic theory. Business Economics makes use to several Micro Economic concepts such as marginal cost, marginal revenue, elasticity of demand as well as price theory and theories of market structure to name only a few. Macro theory on the other hand is the study of the economy as a whole. It deals with the analysis of national income, the level of employment, general price level, consumption and investment in the economy and even matters related to international trade, Money, public finance, etc.

2. Relationship with accounting:

Business economics has been influenced by the developments in management theory and accounting techniques. A proper knowledge of accounting techniques is very essential for the success of the firm because profit maximization is the major objective of the firm. Business Economist requires a proper knowledge of cost and revenue information and their classification.

3. Relationship with mathematics:

The use of mathematics is significant for Business economics in view of its profit maximization goal along with optional use of resources. The major problem of the firm is how to minimize cost, how to maximize profit or how to optimize sales. Mathematical concepts and techniques are widely used in economic logic to solve these problems. Geometry, Algebra and calculus are the major branches of mathematics which are of use in Business economics.

4. Relationship with Statistics:

A successful businessman must correctly estimate the demand for his product. Statistical methods provide and sure base for decision-making. Thus statistical tools are used in collecting data and analyzing them to help in the decision making process. Statistical tools like the theory of probability and forecasting techniques help the firm to predict the future course of events. Business Economics also make use of correlation and multiple regressions in related variables like price and demand to estimate the extent of dependence of one variable on the other.

5. Relationship with Operations Research:

The development of techniques and concepts such as linear programming, inventory models and game theory is due to the development of this new subject of operations research in the post-war years. Operations research is concerned with the complex problems arising out of the management of men, machines, materials and money.

Operation research provides a scientific model of the system and it helps Business economists in the field of product development, material management, and inventory control, quality control, marketing and demand analysis.

6. Relationship with Computer Science:

Computers are used in data and accounts maintenance, inventory and stock controls and supply and demand predictions. What used to take days and months is done in a few minutes or hours by the computers. In fact computerization of business activities on a large scale has reduced the workload of Business personnel.