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State the name of your company(Tesla) and its key products or services(Automotive and Energy Generation and Storage)What sector or industry does your company operate in?What previous experience of economics, if any, have you had? noneThis weeks lecture lists four key drivers of economic growth: innovation, investment, increased productivity, and constant renewal.Pick one of these drivers that your company has tried to use for growth Describe clearly how this driver was enacted at your company Did the use of this driver lead to economic growth? Why or why not? jwi515_wk1_lecture_1202.pdf Unformatted Attachment Preview JWI 515: Managerial Economics Week 1 Lecture Notes Economics and Leadership What It Means In this course, we will explore how an understanding of economics can help you as a leader make better decisions that enable your company to grow. When you do business with other people, other companies, and other nations, all of your interactions are basically economic activities. For example, you buy or sell goods and services; your employees do their work and receive a salary or wage; your company makes a profit or a loss; the taxes and tariffs that your company must pay increase or decrease. Similar principles apply to the economic activity and growth of every entity, whether it is a company, an industry, a region, or a nation. Your company competes economically with others within your industry. How can you assess your performance, compared to your competitors? Savvy leaders evaluate the company’s relative position by tracking key economic metrics or indicators. They use the data to assess past performance and to forecast future challenges and opportunities for their company and its industry. Leaders who can review and interpret economic indicators will make the best decisions to benefit their business, resulting in increased profits and successful new products. Why It Matters • Business activities and relationships are built upon the principles of economics • Company performance versus the competition is reflected in economic indicators • Strong leaders use insights from economic data to develop winning strategies “Winning companies and the people who work for them are the engine of a healthy economy.” Jack Welch © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Week 1 Lecture Notes (1202) Page 1 of 5 JWI 515: Managerial Economics Week 1 Lecture Notes MACRO AND MICROECONOMICS There are two broad branches of economics: macro and micro. This course explores how basic economic concepts can help you assess current events and anticipate upcoming changes in your industry and in the broader economy. Based on that understanding, you can make strategic leadership decisions that enable your business to succeed and grow. Macroeconomics is the study of the economy as a whole: business cycles, unemployment, inflation, global markets, and stability in both pricing and financing. By understanding basic macroeconomics, you will see how the decisions you make are affected by major economic drivers, such as innovation, production, and investment. You will examine the impact of fiscal policy and explore the role of agencies like the Federal Reserve and the Treasury. Microeconomics deals specifically with the decisions and actions you and your business make to deploy and allocate resources. Here you will study supply and demand and learn how to develop pricing strategies that can position your business for economic advantage. You will discuss the underlying motives in consumer behavior and explore the increasing focus of today’s businesses on practices that are sustainable and socially beneficial. Finally, you will examine how both macroeconomics and microeconomics figure into international trade and explore the challenging issue of tariffs in today’s global economy. ECONOMIC GROWTH - CREATING WEALTH Who Creates Wealth? Individuals, families, businesses, and governments are all trying to create wealth. However, different entities have different perspectives and priorities, so they approach the goal of building or creating wealth differently. An underlying common theme for each one of them is the desire to compete — that is, to do better than other people or companies or nations — even as they cooperate and trade with each other toward that shared goal. © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Week 1 Lecture Notes (1202) Page 2 of 5 JWI 515: Managerial Economics Week 1 Lecture Notes When a company grows and prospers, the wealth it creates ultimately benefits the entire economy of the nation. If nations are to prosper, they must continue to grow, and if economies are to grow, business leaders and their governments must make decisions that help nurture and spur this development. The way that your business interacts with all other entities is fundamentally an economic one. At the individual level, people buy and sell goods and services every day. As money changes hands and work is done, each individual’s economic situation is affected. Your bank account grows or it shrinks. Your taxes are higher or lower. Similar principles apply to the economic growth of a business, a region, or a nation, but the larger the entity, the more variables are involved and the more elaborate the process of wealth creation becomes. How is Wealth Created? Simply put, creating wealth involves taking your factors of production, such as natural resources, technology, and human resources, and turning them into products and services that can be traded for economic gain. Economic gain or profits can be reinvested in your business or used to accomplish other goals of the individual, family, company, region or nation. These “other goals” vary widely, but they can all be described as initiatives aimed at improving the quality of life for the individual, the business, or the nation as a whole. For example, let’s look at the agricultural sector. The United States has abundant agricultural technology in the form of farming equipment. We have human resources in the form of farmers. We have natural resources in the form of vast areas of fertile land. These factors of production create more wheat than the nation’s population needs or will consume. The surplus is sold overseas for a profit, and that profit is then reinvested. As farmers make a profit on their sales, their businesses can grow. When farmers pay taxes on their profits, the government takes in the money it needs to accomplish its goals. Thus, the government also gets some of the profits from the agricultural surplus, in the form of taxes. Other industries benefit when agricultural businesses succeed, ranging from the equipment manufacturers who supply the farmers, to the automobile manufacturers who sell cars to farmers, to the cable companies that sell cable access so that farming families can relax in © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Week 1 Lecture Notes (1202) Page 3 of 5 JWI 515: Managerial Economics Week 1 Lecture Notes their leisure time. An endless number of peripheral businesses and transactions spread outward from each individual sale. As all these entities apply the resources gained from an expanding economy to improve their lives, the overall standard of living improves. In this way, everyone benefits from the wealth created by the successful farmers. If, on the other hand, business entities across a whole sector make poor decisions, the economy shrinks. If the farmers’ production exceeds demand, if resources are wasted, or if burdensome laws inhibit commerce or manufacturing, nobody benefits. To put it another way, if decisions makers at the individual, business, and government level lack an understanding of basic economic principles, profits become losses, the economy shrinks, many businesses make a loss, and everyone suffers. The Four Drivers of Economic Growth To enable creation of more wealth, policy makers and leaders must understand what drives economic growth, so that they can make decisions that cause the economy to grow, not shrink. There are four key drivers of economic growth, as listed below: 1. An entity must innovate to grow 2. An entity must attract investment to grow 3. An entity must increase productivity to grow 4. An entity must engage in constant renewal to grow How a nation or a business chooses to deploy its resources to account for these drivers determines whether it succeeds or fails economically. At the national level, a government that wants to spur innovation could offer economic incentives, such as tax breaks or government grants, to companies developing new technologies. It could spur the development of human resources by implementing social programs that encourage training in high value skills at colleges and within businesses. It could provide fast-track immigration opportunities for people with the skills needed to contribute to development in innovative technologies or in key business areas. © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Week 1 Lecture Notes (1202) Page 4 of 5 JWI 515: Managerial Economics Week 1 Lecture Notes MONEY Money is what facilitates exchange in our economy. Therefore, while macroeconomic indicators such as GDP measure the health of our economy, money is also extremely important to an economys strength. Commerce is not impossible without money; historically, the original trade systems between tribal groups were based on barter – that is, the direct exchange of one type of product or service for another type of product or service. Barter economies require you to have some good or service that your trading partner wants. Once that condition is met, you must negotiate, for every single exchange, some quantity of your assets or some measure of your services that equates to the goods or services that you want to purchase. This is clearly an inefficient and cumbersome way of managing the exchange of goods and services. It also makes comparing transactions more difficult, because there is no common, quantifiable measure from one barter agreement to another. Money, by contrast, is a convenient and effective method of exchange. It is quantifiable and measurable. Transactions can easily be compared to one another. An additional important feature of money, though, is that money itself has a price. The price of money in a national economy is expressed in several key macroeconomic indicators: Interest rates, Exchange rates, and the rate of Inflation. Looking Ahead In this lecture, you learned about the required conditions for creating wealth and performing successfully as a company or as a nation. You examined how economic data can help leaders understand factors affecting their company’s performance and plan accordingly. The next lecture focuses on economic indicators, data items that business leaders examine and track to understand the changing landscape of business. To complement your reading, you will gain practical experience by using a worksheet that takes you step by step through a process of collecting economic data related to your company and its industry. © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Week 1 Lecture Notes (1202) Page 5 of 5 ... Purchase answer to see full attachment