Economics: The Mother Subject of Business and Management

Respected and dear LinkedIn connections, friends, and followers,

Just for this first post as a creator, a brief intro: as some of you may know, I recently dropped out of my MBA from XIMB, 4 months into it, and decided to join the University of Calcutta for my M.Sc. in Economics. Yes, my master’s trajectory went from London to Kolkata via Bhubaneswar—strange but reality!?

In these four months, I have gained a first-person view and understood a lot about the fields of business, management, MBA, economics, corporate culture, education system, placement scenario, morality, ethics, relationships, stress, etc.

One of my professors at XIMB went through my blog, and he recommended that I utilize my writing flair through LinkedIn, citing its benefits for both me and others; thus, I have decided to contribute to LinkedIn as a creator! I would like this to be interactive.

So, while bidding adieu to my MBA professors at XIMB, who loved me very much for my splendid performance, I met one such professor, from the top administration level, who was sad for losing me as a student from the institute but was very happy with someone leaving MBA to go for M.Sc. in Economics, and he was the one who quoted the term, “Economics is the mother of business and management; even I would personally recommend my son to pursue Economics over MBA”. I liked the term, thought deeply about it, and decided to share my views on it!

In simple terms, economics is the science of decision-making, the study of how much and who shall produce, distribute, and consume goods and services, their impacts, etc. And what do business leaders and managers do? Precisely speaking, they take decisions! Thus, the essential pillars of business and management would become economics, as it provides the fundamental principles that guide decision-making in all aspects of business operations.

If you ask me what economics comprises, I would say it covers the widest array of subjects, in no particular order, from logic and economic intuitions to the study of incentives, mathematics, statistics, data science and analytics, finance, psychology, philosophy, ethics, political science, research methodologies, industry, market, organizations, programming, sociology, environment, anthropology and history, and geography in depth. Without these, the study of economics would remain incomplete. And do you know exactly where these subjects are studied and applied, but at a very basic level? Yes, you got it right, business and management!

Even I may go a bit further and say that just the basic levels of microeconomics and macroeconomics, along with a pinch of statistics, financial economics, behavioral economics (for marketing strategy), organizational and industrial economics, research methodologies, and game theory, are more than enough to cover the entire course curriculum of the ‘intellectual’ skills imparted at any business or management course, and even two top-tier professors agreed with me on this point.

Business and management is actually a subset of the subject called economics and a constituent of the larger economy, to be bluntly specific!

Economics explains how markets work, the forces that drive market behavioral, and how to allocate limited resources efficiently. It provides tools and frameworks for understanding the competitive landscape, the strengths and weaknesses of businesses and their competitors, and the analysis and strategy models based on which to take decisions. Economics also provides the tools and frameworks for understanding the global economy, which is increasingly interconnected, interdependent, and important for expansion. Porter's Five Forces model and other strategy models are all examples of economic analysis models.

And there are various other points; the list goes on and on, like almost every function of business can be explained through economics; may be the only exception I can think of is accounting, but in reality, accounting is done by accountants. What business leaders or managers do is analyze the statements to make decisions, which again requires economics intuition.

Additionally, the field is constantly evolving, with newer horizons like econo-physics, neuro-economics, bio-economics, etc. coming up and broadening the horizon further with newer perspectives.

A Master's in Economics is a more specialized degree than an MBA, and it provides students with a much deeper understanding of economic theory and principles for application to the real world of business and markets. Note that economics is rated as one of the most employable degrees in the United Kingdom and similarly across the globe.

Economics graduates have a stronger foundation in mathematical and statistical analysis. This makes them better able to understand and interpret complex economic data and business scenarios. Economics graduates are more versatile and can be employed in a wider range of industries. Economics graduates are in high demand in a variety of industries, including finance, consulting, government, market research, strategy, and academia, to name a few.

Overall, it provides students with a deeper understanding of business and the economy as a whole, and it makes them more well-equipped to analyze complex business and economic problems and develop innovative solutions.

Also, it is worthwhile to mention that economics looks at a broader picture than business alone. Economists are working to develop policies that promote economic growth and reduce poverty, address the challenges of climate change and other environmental issues, improve the efficiency and effectiveness of healthcare, education, and political systems, develop new financial products and services that help people save for the future and invest their money wisely, and understand the impact of technological change on the economy and society, to name a few.

In conclusion, economics is the mother subject of business and management, as it provides the fundamental principles that guide decision-making in all aspects of business operations. If you are interested in a career in business or management, or if you want to make a difference in the world by addressing complex economic problems, then a Master's in Economics is the right degree for you, as through this course, you can do either or both.

Thank you! Please share your view as well!

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