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Business news: Why you should stay up to date

  In the world of management, one of the keys to being a successful MBA aspirant, then an MBA grad, and finally a manager, is to keep yourself updated on economic and business developments, and developing an analytical insight into these happenings.  

Dr Suresh Srinivasan

Why is business and economic news so important? The macroeconomic scenario, in any setting, plays a vital role in how companies and their managers will act. Added to this are emerging technologies, which are becoming vital in recent years. The world today is a completely different place from what it used to be a decade before.

Business and economic developments, both at global and national levels, set the tone and day-to-day agenda for any company. Managers constantly steer their companies through the veritable maze of business, economic and technological developments that occur nearly day-in and day-out. Therefore, you can surely make out that ignorance of such developments, and not keeping yourself ‘current’ and up to date on such issues, is pretty much inexcusable, both as a potential manager as well as an aspiring MBA student.

Global political complexities and geopolitical conflicts are taking on a very different dimension today. The demographic profile of the world is changing substantially from what it used to be a few decades ago, which has also led to inter-societal conflicts taking a very different colour in today’s world. Priorities for governments, protectionism and governance across countries are very different today as compared to what they used to be.

The interaction between politics, society, governance and the populace has an enormous impact on people, their preferences, their per capita income and their ability to spend, all of which again have an enormous bearing on ‘consumer spending’, which is the raison d’etre for which companies’ existence! These also have a major impact on global and regional labour markets and access for companies to resources and skill sets, which again form the core of the ‘supply side’ for companies. Hence, understanding global and national trends becomes a mainstay for managers and aspiring managers.

Such global and national economic developments impact businesses very differently. A few, such as overall economic growth measured as gross domestic product (GDP), interest rates of economies, currency exchange rates and liquidity, will have an impact across industries in global and national settings. Other developments like government regulations, foreign investment regulations, competition laws, trade barriers and licensing policies have differential impact on companies within certain industries. Anyone interested in running, or appreciating how successful companies are run, be it managers or future managers, need to keep a close watch on such economic and business news on a day-to-day basis.

Leaders and managers in companies seldom have every single piece of information they would ideally need to make decisions. There is always a pressure in terms of timelines and an urge to move the company in a direction that is most rewarding for shareholders, and that too ahead of the competition. This ultimately results in many decisions having to be taken with less than desirable information on hand. However, even these decisions are robustly based on analysing plausible scenarios, anchored in one’s understanding of the complex interplay between various economic manifestations and their interpretation, and then ultimately forecasting a meaningful trend. This can be achieved only by a deep and ‘up-to-date’ understanding of the economic and business situation.

In both the contexts of either aspiring to join a company as a manager or aspiring to be a management graduate, the student needs to not only be on top of such developments, but also needs to appreciate the impact of such developments on different industry settings and companies. Although aspiring management students are tested on many dimensions — including attitude, demonstrating a habit to work hard, etc — the ability to comprehend business and economic situations and anchor them in specific business contexts is exactly what is primarily tested in an MBA or a job interview.

It is not merely understanding of the facts of the day-to-day economic and business situation that is critical. What’s more important is the interpretation of such developments and linking the same to the issue on hand, specifically relating to the global scenario, or a national context, or be it an industry or a company setting. The logic of such complex interplay between business and economic developments and the way companies are reacting in such an environment needs to be clearly understood and plainly demonstrated by the student. Such traits do not come easily and needs enormous and disciplined practice.

News and updates to keep a track of

Think of questions like this: How is the economy doing? Has the economy recovered? What is the economic outlook for the next three years? These are pretty standard questions you will face either in an interview setting, or in a casual business chat or perhaps even in an informal setting with friends and peers! An aspiring management student, aspiring manager — and of course, a manager — need to be always prepared for such questions.

Important information to keep track of range from the health of the global economy, its strengths and weaknesses, including how the global economy can be broken down into regions — say developing and developed, or in the likes of US, European Union and Japan, and across emerging economies.

National budgets, components of revenue and expenditure, deficits, government borrowings, fiscal prudence and the drivers of overall economic strength and weakness need to be appreciated. Industrial output, unemployment, taxation regime, reforms and liberalisation are also vital to understand and explain the status of the economy.

The never ending conflict between growth and inflation in the monetary policy regime needs to understood, appreciated and practised to clearly communicate, especially situations that may lead to changes in interest rates. Other macroeconomic indicators like currency exchange rates, liquidity and central bank policies, and their interplay are important to understand and keep track of. This will lead to other related subjects like export and import dependency, trade partners and deficits, trade agreements and tariffs, protectionism and liberalisation.

Politics and leadership across key nations and understanding their influence on the global economy is also important. Governance and ease of doing business across nations need to be understood across specific and national contexts. Once that is done, the linkage between politics, economic policies and national development will start flowing.

As management students and aspiring managers, you generally need to be well aware of the corporate sector, and fundamentals impacting at least some of the major industries and companies that are ‘movers and shakers’ in specific industries. It is vital to understand and keep track of how such companies are performing on a quarterly and annual basis, how the leadership is steering the company in terms of strategy and the mergers and acquisitions either in the process or in the pipeline. You should demonstrate — and therefore cultivate — an ability to not only demonstrate awareness but also critique the same, backed by a logic for such a critique.

In summary, there are clearly a number of issues to keep track of, and the inter-linkages must be deeply understood. More importantly, these get dated easily, and hence you need to constantly keep capturing the latest developments. Choosing a couple of business dailies and regularly studying (not merely reading!) will robustly move you in this direction! More importantly, all of these do not happen in a snapshot, but evolves over a period of time. Frankly, there is no shortcut. Only a high level of discipline, a constant regularity and the sheer pride that you are achieving something concrete will act as a motivator for you to continue to acquire and maintain such knowledge and analytical insights!