Upper-level managers and administrators face a
broad range of complex problems and challenges. Sessions on economics
will provide analytical tools to help managers formulate and implement
business strategy. These sessions are grouped into three complementary
areas: macroeconomics, microeconomics, and international economics.
Concepts will be brought to life through case studies and class
discussion.
Overview by topic area
Macroeconomics
Virtually all firms are affected by the state of the macroeconomy:
output demand is often influenced by income, inflation or interest
rates. Cost (and thus supply) is affected by tightness of the labor
market, interest rates and inflation. While you cannot control the
macro economy, a good manager learns to anticipate conditions, understands
how the firm is affected, and formulates business strategies in
light of these factors. We will discuss key macroeconomic indicators
and gain experience tracking current economic conditions. Various
industries' responses to key macroeconomic factors and the timing
of impacts across sectors are discussed. Understanding of economic
conditions will help you anticipate Federal Reserve policy moves
on interest rates. We will look at a simple forecasting model that
managers can use to anticipate downturns, to improve business decision-making.
Microeconomics
The microeconomics sessions begin with a discussion of market power
and concentration, and then relate these concepts to the traditional
market classifications. Particular attention is paid to product
differentiation as a primary source of market power. You will learn
what types of costs should, and should not, affect the price charged
by a firm, as well as the relationship between the optimal price
and the price elasticity of demand. Various forms of price discrimination
are discussed and optimal two-part pricing schemes are derived.
Game theory is introduced as an essential tool for understanding
strategic behavior among firms. For example, game theory helps us
determine the types of markets that are most likely to be plagued
by price wars.
International
Economics
Exchange rate changes can have important implications for your business.
You will learn how exchange rates are determined. Corporate strategies
for dealing with a foreign currency crisis are discussed. We will
discuss how to hedge against exchange risk, make output and pricing
decisions, purchase materials, remit profits, and procure operational
loans when producing in countries with unstable currencies. Will
the Euro be good for U.S. exporters? We will also discuss marketing
strategy and tactic options available to firms facing discriminatory
tariffs and nontariff barriers, as well as U.S. trade policy and
how firms secure protection against foreign competition. Case studies
are used to explore U.S. trade laws and World Trade Organization
rules that provide relief to firms suffering import surges, intellectual
property rights violations, and unfair trade practices.
The major learning objectives
1. The student will be able to monitor ongoing
macroeconomic conditions, anticipate future interest rate policy
actions, and understand the probable impacts on their firm.
2. The student will be able to make effective decisions amidst
a changing macroeconomic and interest rate environment.
3. The student will be able to develop the ability to correctly
apply various pricing strategies.
4. The student will understand how industry structure affects
firm behavior.
5. The student will understand key institutions and regulations
of international trade.
6. The student will be able to make effective business decisions
in a rapidly changing global environment.
Topics
- Macroeconomics
- Microeconomics
- International Economics
|
