Business economics as the only one of its kind
It is difficult to determine the exact boundaries of the world of business economics. Partly due to the holistic approach of the field, as presented on this website, the difference with business administration seems to be negligible. In which way does business economics differ from business administration and economics in general and what does it imply?
You can read an exploration hereafter.
You can describe economics in general as a study of human satisfaction and the choices that people make during the production, consumption and distribution of goods and services. Roughly, business economics is defined as the science which is concerned with the use of the right resources to stimulate the trading of goods and services by organisations. Besides that, business economics monitors the financial side of the organisation. We can see the field as an interface of business administration and economics.
The science of business administration is about the organisation and the market environment of businesses. The field is relatively young and uses the insights of disciplines like economics, psychology and sociology. It is strongly focused on empirics; insights come from practice and are used to adapt the strategy and organisation of businesses.
Based on these definitions we can say that business economics is mainly concerned with the financial and technical side of business administration. The two fields are overlapping each other to a great extent. However, the business economist is more a ‘specialist’, who for instance needs profound mathematical knowledge to execute his work. The business administrator rather is a broadly orientated person, who has knowledge about almost every aspect of the company.
The table below gives an overview of the global similarities and differences between the three named fields: Economics (including general economics, business econometrics and applied economics), Business Economics and Business Administration (including management). This concerns twelve different aspects.
|Economics||Business economics||Business administration|
|Level of analysis||Macro-micro||Micro-meso||Micro|
|Key word||Economics||Business||Management processes|
|Organisations||Goverments/NGO’s, Financial sector||Profit||Profit|
|Support compartments||Mathematics, statistics||Statistics, accounting||Multiple disciplines|
|Orientation||Theoretical, deductive, positive||Practical, more inductive, partly positive and normative||Practical, more inductive, partly positive and normative|
|Relationship with other disciplines||Bèta||Gamma and partly bèta||Gamma, partly bèta and partly alfa|
|History of discipline||Relatively old||From end 19th century||From mid 20th century|
|‘Glasses’||Narrow, specialistic, data-driven||Broadly skilled specialists, combination of humans and figures||Broadly skilled generalists, combination of humans and tools|
The business economist is usually a specialist, whereas the business administrator is more focused on managing specialists. This is not to say that holism is irrelevant in the field of business economics. Especially when a business economist specializes in the correct way, he can be both more helpful and reliable when there are developments in field such as ethics and data analyses. This certainly applies when the business economist is going to occupy a managerial position in the organisation and needs to know something about the other aspects of the company.
Business economics and business administration are, despite the overlap, indeed separate from each other. The business economist needs an appropriate and unique education, based on a different vision which fits the nature of the professional business economist.