Course Title: Economic Decision Making

Part A: Course Overview

Course Title: Economic Decision Making

Credit Points: 12.00

Course Code	Campus	Career	School	Learning Mode	Teaching Period(s)
ECON1205	City Campus	Postgraduate	115H Aerospace, Mechanical & Manufacturing Engineering	Distance / Correspondence	Sem 1 2006, Sem 2 2006, Sem 1 2007, Sem 1 2008, Sem 1 2009, Sem 2 2009, Sem 1 2010

Course Coordinator: Margaret Tein

Course Coordinator Phone: +61 3 99258068

Course Coordinator Email: tein@rmit.edu.au

Course Coordinator Location: 57.5.24

Course Coordinator Availability: Please contact by email to arrange appointment

Pre-requisite Courses and Assumed Knowledge and Capabilities

None

Course Description

This course is concerned with introducing some economic concepts, some basic theories and some decision-making applications for managers.

Objectives/Learning Outcomes/Capability Development

The Capabilities Of An Aviation Management Graduate – Post Graduate Level


Overall Integrative Capability: Proactive Problem Identification, Innovative Problem Solving and Empowering Communication

CAPABILITY: Responsible and Professional Work Practices: Work within the ethical and legal framework of the industry while contributing to professional work settings through responsible, self-managed, independent work and effective participation in multidisciplinary teams.

Dimension of Capability: Personal Development

Descriptor:

• Awareness of and commitment to one’s own set of values.
• Observance of professional ethics.
• Taking responsibility and participating in one’s own career planning and development.
• Acting as a Reflective Practitioner leading to a personal continuous improvement process.
• Engagement in and commitment to career-long learning.

Dimension of Capability: Sustainability

Descriptor:

• Balance of the technical, economic, environmental and social demands of an industry-based situation.
• Protection of safety, health and welfare.

Dimension of Capability: Problem solving and decision making

Descriptor:

• Model organizational problems using a systems framework, recognising the impact on sub- and related systems.
• Use of a wide range of problem solving tools and techniques.
• Selectivity in the choice of data to be used to support decision-making.
• Access to information from a wide range of sources, discerning values, bias and usability.

Dimension of Capability: Technical Competence

• Conceptualise, plan, design and manage the interface between human and technical systems.
• Perform a range of analytical tasks as appropriate to the specialization within the industry.
• Design and conduct diagnostic activities within the specific industry discipline.

Dimension of Capability: Teamwork and Leadership

• Operate effectively within a complex organisational setting.
• Manage multiple hierarchical relationships.
• Work effectively within a team.
• Exhibit appropriate and effective professional behaviours in the team environment.
• Provide constructive feedback to colleagues.
• Resolve conflict within the team.
• Work with members of other disciplines in a team with conflicting needs.

Dimension of Capability: Communication

• Communicate effectively - that is to listen, observe, speak, and write.
• Communicate results and outcomes qualitatively, quantitatively, graphically, electronically and textually.
• Communicate processes of thinking and reflection.

CAPABILITY: Global perspective

Locate one’s professional practice within the global parameters of the industry recognizing the different cultural perspectives, national and local variations in legal, industrial and economic environments.

Dimension of Capability: Personal Development

• Awareness of and respect for other’s sets of values.
• Observance of professional ethics.
• Taking responsibility for understanding cultural differences.
• Acting as a Reflective Practitioner leading to a personal continuous improvement process.
• Engagement in and commitment to career-long learning.

Dimension of Capability: Sustainability

• Balance of the technical, economic, environmental and social demands of different cultural and national situations.
• Protection of safety, health and welfare.

Dimension of Capability: Problem-solving and decision-making

• Model organizational problems using a systems framework, recognising the impact on sub- and related systems within different cultural contexts.
• Use of a wide range of problem solving tools and techniques.
• Selectivity in the choice of data to be used to support decision-making.
• Access to information from a wide range of sources, discerning values, bias and usability.

Dimension of Capability: Technical Competence

• Conceptualise, plan, design and manage the interface between human and technical systems taking into consideration variations in local technical adoption rates.
• Perform a range of analytical tasks as appropriate to the specialization within the industry.
• Design and conduct diagnostic activities within the specific industry discipline and cultural context.

Dimension of Capability: Teamwork and Leadership

• Operate effectively within a complex organisational setting.
• Manage multiple hierarchical relationships.
• Work effectively within a multicultural team.
• Exhibit appropriate and effective professional behaviours in the multicultural team environment.
• Provide constructive feedback to colleagues.
• Resolve conflict within the multicultural team.
• Work with members of other disciplines in a team with conflicting needs.

Dimension of Capability: Communication

• Communicate effectively - that is to listen, observe, speak, and write appropriately within the cultural context.
• Communicate results and outcomes qualitatively, quantitatively, graphically, electronically and textually.
• Communicate processes of thinking and reflection.

CAPABILITY: Communication and Personal Engagement

Communicate the processes and results of organisational activities within the industrial sectors’ communities in forms consistent with the appropriate sector practices. Extend relationships through confident interactions across various levels and functions of the organisation and the industry’s sectors.

Dimension of Capability: Personal Development

• Awareness of and respect for divergent views.
• Observance of professional ethics.
• Taking responsibility for ones’ own communication style and responses of others to it.
• Acting as a Reflective Practitioner leading to a personal continuous improvement process.
• Engagement in and commitment to career-long learning.

Dimension of Capability: Sustainability

• Balance of the technical, economic, environmental and social demands of different cultural and personal backgrounds.
• Protection of safety, health and welfare.

Dimension of Capability: Problem-solving and decision-making

• Explain organizational problems and associated solutions within a systems framework, recognising the impact on individuals and groups with different perspectives and views.
• Use a wide range of problem solving tools and techniques.
• Selectivity in the choice of data to be used to support decision-making.
• Access to information from a wide range of sources, discerning values, bias and usability.

Dimension of Capability: Technical Competence

• Professionally communicate the conceptualisation, planning, design and management of the interface between human and technical systems taking into consideration variations in personal technical adoption rates.
• Discuss the performance of a range of analytical tasks as appropriate to the specialisation within the industry.
• Participate in the design and conduct diagnostic activities within the specific industry discipline and cultural context.

Dimension of Capability: Teamwork and Leadership

• Communicate effectively and collaboratively within a complex organisational setting.
• Manage multiple hierarchical relationships.
• Work effectively within a multicultural team.
• Facilitate effective and appropriate interactions between colleagues and subordinates across the organisation hierarchy.
• Provide constructive feedback to colleagues.
• Resolve conflict within the multicultural team.
• Work with members of other disciplines in a team with conflicting needs.

Dimension of Capability: Communication

• Communicate effectively - that is to listen, observe, speak, and write appropriately within the cultural context.
• Communicate results and outcomes qualitatively, quantitatively, graphically, electronically and textually.
• Communicate processes of thinking and reflection.
.

This course aims to enable you to:

• explain the basic economic valuation model in the context of modern business
• apply the laws of supply and demand to the organisational context, including using qualitative and quantitative methods to forecast demand
• critically analyse production processes and cost functions
• identify the main forms of market structure and recommend pricing and other strategies appropriate for each
• apply capital budgeting techniques to make long-term investment decisions, building in adjustments for risk
• understand the forms of government intervention in the economy and the implications of competition and deregulation policy for management practices
• critically evaluate major macroeconomic issues present in the national and international economy in terms of their implications for management decision making.
  

Overview of Learning Activities

The focal strategy utilised in the whole course is the Management Learning Team (MLT). This group represents a project team whose members carry a dual responsibility. Firstly, MLT members carry a responsibility to the team for the learning and development of each member, and secondly, a responsibility for their own personal learning.

MLT’s are encouraged to explore the resources of the team for problem solving and addressing issues prior to seeking the guidance or assistance of an academic staff member.

The specific learning activities include:

Seminars
Workshops
On-call Consultation
Projects
Directed Research
Self-directed Learning
Fieldwork

Overview of Learning Resources

Prescribed Text

It is essential that you purchase a copy of the following prescribed text:

Keat, P. & Young, P. 2003, Managerial Economics, Prentice Hall, New York.

This text is accompanied by a Companion Website that provides a range of problems and interactive exercises. These problems and exercises are not compulsory, and are provided as a supplement to the problems provided in the printed text. However, if you are able to complete some of these, you will find this a useful additional resource.

If you wish to undertake additional practice problems and exercises, then you may consider purchasing or borrowing either of the following texts, both of which have accompanying study guides with additional exercises.

Mansfield, E. 1999, Managerial Economics: Theory Applications and Cases, Norton, New York. (The 5th, 2002, edition is by Mansfield, Allen, Doherty and Weigelt.)
Mansfield, E. & Mansfield, E.D. 1999, Study Guide and Casebook for ’Managerial Economics: Theory, Applications and Cases’, Norton, New York. (The 5th, 2002, edition is by Thomas Donley.)

The material in this text generally covers the same material as Keat and Young (2003) although frequently at a more advanced level, and so has been included in the additional reading in many topics for those who wish to read further in any area. In a few areas there are topics not covered by Keat and Young (2003). These topics are not compulsory, but some students may find them interesting. The Study Guide and Casebook also contains many additional case studies illustrating principles being taught.

Other Additional Texts

Hirschey, M. 2000, Managerial Economics, Dryden, Fort Worth.
Hirschey, M. 2000, Study Guide to Accompany Managerial Economics, Dryden, Fort Worth.

Recommended Materials

Many of the problems contained in the Keat and Young (2003) text, will be easier to attempt if you have some familiarity with the use of spreadsheets. Further, the use of spreadsheets will become an important tool for your managerial decision making. Thus it would be wise to invest in acquiring these skills now. You should ensure that you have access to, and are familiar, with a copy of Lotus 123 or of Microsoft Excel.


Additional Reading

In addition to the texts by Mansfield and Hirschey, the following are other managerial economics textbooks that cover much the same material as the set text, Keat and Young (2003).

Keating, B. and Wilson, J.H. 1987, Fundamentals of Managerial Economics, Harcourt Brace Jovanovich, San Diego.
McGuigan, J.R., Moyer, R.C., and Harris, F.H. DeB. 1996, Managerial Economics, West, Minneapolis/St Paul.
Salvatore, D. 1996, Managerial Economics in a Global Economy, McGraw-Hill, New York.
Samuelson, W. and Marks, S. 1995, Managerial Economics, Dryden, Fort Worth.

The following two books are introductory economics principles texts. They will provide suitable background reading for a number of topics. There are many such texts on the market and they all do much the same job. It is not necessary to purchase either of these texts (or any of the alternatives). However, if you wish to add to your library collection, any one will suffice. Note that most public libraries, and certainly the libraries of all tertiary institutions (and most TAFE colleges) will carry suitable elementary economics texts.

Baumol, W., Blinder, A., Gunther, A. and Hicks, J. 1992, Economics: Principles and Policy, 2nd Australian edition, Harcourt Brace Jovanovich, Sydney.
McTaggart, D., Findlay, C. and Parkin, M. 1992, Economics, Addison-Wesley, Sydney.


Other Reading Materials

You will note that many of the readings provided in the Study Guide are drawn from a range of Australian business publications and daily newspapers. Access to these on a regular basis will assist in confirming many of the ideas and principles taught in this course. One should certainly form the habit of reading The AustralianFinancial Review. Other useful publications include: Business Review Weekly, The Economist and The Bulletin. If you have web access you should locate these and other similar press sites on the web, particularly if you do not have easy access to the hard copies.

Web sites

One useful way of keeping up-to-date with economic issues is via the Internet. Some key sites which you may find useful are:

Media and journal sites

Financial Times (UK) http://news.ft.com/home/uk
The Times (UK) www.the-times.co.uk
The Guardian Observer (UK) www.guardian.co.uk
The Fairfax Group site www.f2.com.au
Australian Financial Review www.afr.com.au
Business Review Weekly www.brw.com.au
Business Week www.businessweek.com
Euromoney www.euromoney.com
Wall Street Journal www.wsj.com
Fortune www.fortune.com
The Economist www.economist.com

Australian and New Zealand government sites

Reserve Bank of Australia www.rba.gov.au
Australian Competition and Consumer Commission www.accc.gov.au
National Competition Council www.ncc.gov.au
Productivity Commission www.pc.gov.au
Reserve Bank of New Zealand www.rbnz.govt.nz
New Zealand Business Roundtable www.nzbr.org.nz

United Kingdom and United States government sites

Bank of England www.bankofengland.co.uk
Department of Trade and Industry (DTI) www.dti.gov.uk
The Competition Commission (CC) www.competition-commission.org.uk
The Office of Fair Trading (OFT) www.oft.gov.uk
The Federal Reserve Board www.federalreserve.gov
US Federal Trade Commission www.ftc.gov

Indian government sites

Reserve Bank of India www.rbi.org.in
Department of Company Affairs
(for Monopolies and Restrictive Trade Practices Commission) www.dca.nic.in
Centre for Monitoring Indian Economy www.cmie.com

Other sites

Institute for Fiscal Studies www.ifs.org.uk
Biz/Ed http://bized.ac.uk
WebEc http://www.helsinki.fi/WebEc/

Overview of Assessment

Distance Delivery Mode Assessment Tasks:

Assignment 1 - weighting 20% - 1500 words.
Examination - weighting 80% - 3 hours writing, 10 minutes reading.