Besides considering the opportunities that lie before a managerial economist it is necessary to take into account the services that are expected by the management. For this, it is necessary for a managerial economist to thoroughly recognize the responsibilities and obligations. A managerial economist can serve the management best by recognizing that the main objective of the business, is to make a profit on its invested capital. Academic training and the critical comments from people outside the business may lead a managerial economist to adopt an apologetic or defensive attitude towards profits. There should be a strong personal conviction on part of the managerial economist that profits are essential and it is necessary to help enhance the ability of the firm to make profits. Otherwise it is difficult to succeed in serving management.
Most management decisions necessarily concern the future, which is rather uncertain. It is, therefore, absolutely essential that a managerial economist recognizes his responsibility to make successful forecast. By making the best possible forecasts and through constant efforts to improve, a managerial economist taking the risks involved in uncertainties. This enables the management to follow a more orderly course of business planning. At times, it is required for the managerial economist to reassure the management that an important trend will continue. In other cases, it is necessary to point out the probabilities of a turning point in some activity of importance to management. In any case, managerial economist must be willing to make fairly positive statements about impending economic developments. These can be based upon the best possible information and analysis. The managements confidence in a managerial economist increases more quickly and thoroughly with a record of successful forecasts, well documented in advance and modestly evaluated when the actual results become available.
A few consequences to the above proposition need also be emphasized here.
- First, a managerial economist has a major responsibility to alert management at the earliest possible moment in case there is an error in his forecast. This will assist the management in making appropriate adjustment in policies and programmes and strengthen his own position as a member of the management team by keep right fingers on the economic pulse of the business.
- Secondly, a managerial economist must establish and maintain many contacts with individuals and data sources which would not be immediately available to the other members of the management. Extensive familiarity with reference sources and material is essential. It is still more important that the known individuals who are specialists in particular fields have a bearing on the managerial economist’s work. For this purpose, it is required that managerial economist joins professional associations and take active part in them. In fact, one of the best means of determining the quality of a managerial economist is to evaluate his ability to obtain information quickly by personal contacts rather than by lengthy research from either readily available or obscure reference sources.
Again, if a managerial economist is to be really helpful to the management in successful decision-making and forward planning, it is necessary to able to earn full status on the business team. Readiness to take up special assignments, be that in study teams, committees or special projects is another important requirement. This is because it is necessary for the managerial economist to win continuing support for himself and his professional ideas. Clarity of expression and attempting to minimize the use of technical terminology while communicating his ideas to management executives is also an essential role so as to win approval.
To conclude, a managerial economist has a very important role to play by helping management in successful decision-making and forward planning. But to discharge his role successful, it is necessary to recognize the relevant responsibilities and obligations. To some business executives, however, a managerial economist is still a luxury or perhaps even a necessary evil. It is not surprising, therefore, to find that while their status is improving and their importance is gradually rising, managerial economists in certain firms still feel quite insecure. Nevertheless, there is a definite and growing realization that they can contribute significantly to the profitable growth of firms and effective solution of the problems, and this promises them a positive future.
Credit: Managerial Economics-MGU