CIMA and an Entrepreneur Answer Your Questions: This Month ... 'CIMA Offers Courses in Macroeconomics. I Think the Subject Sounds Fascinating, but Is It Useful to Know about GDP Forecasts and the Balance of Payments? Most Senior Managers Don't Seem to Care.'

By Marsh, Greg | Financial Management (UK), November 2011 | Go to article overview
Save to active project

CIMA and an Entrepreneur Answer Your Questions: This Month ... 'CIMA Offers Courses in Macroeconomics. I Think the Subject Sounds Fascinating, but Is It Useful to Know about GDP Forecasts and the Balance of Payments? Most Senior Managers Don't Seem to Care.'


Marsh, Greg, Financial Management (UK)


A.CIMA

It could be that the term puts them off. "Macroeconomics" sounds very academic and theoretical. However, senior managers would be familiar with and use SWOT analysis in their strategic planning. Since half of this framework - opportunities and threats - arises from the external environment, SWOT analysis draws heavily on macroeconomic data, such as unemployment, GDP or inflation. As do other corporate planning tools such as PEST or PESTLE.

Macroeconomics is fascinating. It's the study of what influences an economy, what makes it fluctuate in the short term and grow in the long term. Many macroeconomic indicators are very informative. Leading indicators help predict what is likely to happen in the economy - for example, a slowdown in the housing market seems to predict a recession is looming. Lagging indicators reflect the impact the economy has (after a few months) on unemployment or business failures. It will be several months after the economy has hit rock bottom that these two indicators are at their worst. Again, useful to know.

Organisations base their strategies (exploiting their strengths and ensuring their weaknesses barely matter) on the opportunities and threats they face. Analysis of the macroeconomic environment enables organisations to appreciate, and to an extent predict, how investors, lenders, suppliers, customers and competitors will react to interest rates, inflation, stock market indices or measures of productivity and new orders. For example, just think how useful the Purchasing Managers' Index is - a basket of measures which include productivity levels, employment and new orders from customers and is therefore really informative about current activity and confidence in the manufacturing and service sectors.

The best primer is CIMA's one-day Masterclass course: Economics, An Introduction.

[ILLUSTRATION OMITTED]

A. Greg

CEOs of big businesses have good reason to worry about fiscal policy, yield curves and the like - they sell papers, for one thing.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

CIMA and an Entrepreneur Answer Your Questions: This Month ... 'CIMA Offers Courses in Macroeconomics. I Think the Subject Sounds Fascinating, but Is It Useful to Know about GDP Forecasts and the Balance of Payments? Most Senior Managers Don't Seem to Care.'
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?