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Business Economics - Lesson Plan: 2 x 1 hour lessons

A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Business Economics and are relevant to the following specifications:

  • AQA: A2, Module 5, 14.3
  • Edexcel: A2, Unit 4

Aim:

The Activity and Presentation serve as an introduction to business/industrial economics, which at A2 is given a more formal treatment than at AS. The Activity aims to set the introduction to the area in the context of the attempted takeover of Marks & Spencer by Philip Green. The growth of firms, the motives of firms and the ways in which firms can achieve growth are at the heart of the Activity, as it attempts to get students to appreciate that business growth is simply not a question of 'advertising more' or 'reducing prices'. The analysis at A2 must be more sophisticated and the complex problems facing Marks & Spencer serve to highlight that business growth is likely to consist of a mixture of strategies aimed at meeting consumer needs as well and fighting off rivals and stemming changing trends and perceptions.

The Presentation covers methods of growth, motives for growth, key issues in business growth, including diminishing returns, and an overview of efficiency and the objectives of firms. It also includes a diagrammatic representation of profit maximisation. Educators may also wish to use the Presentation on costs and revenues [230 KB] and the lesson on the law of diminishing returns as a package to cover the key topics in this curriculum area.

Learning Objectives:

At the end of these lessons, students should:

  • Understand the difference between internal and external growth of firms
  • Understand the motives for business growth
  • Understand the key issues arising from business growth, i.e. the divorce between ownership and control and the principal-agent problem
  • Understand different measures of efficiency
  • Be able to relate learning outcomes from the above to the context of a real business scenario
  • Demonstrate higher order skills in analysing and evaluating business growth

Resources:

Lesson Structure:

Lesson 1

  1. Review student understanding of the key concepts of costs and revenues in business economics. (10 minutes)
  2. Divide students into small groups (3 max.) and ask them to discuss motives for businesses wanting to grow and the methods by which such growth can be achieved. (10 minutes)
  3. Feedback from each group about their methods and motives - discuss the outcome, highlighting areas of misunderstanding and confusion (for example, the idea that a firm can grow simply by advertising - students would need to develop their analysis by showing an understanding of the process by which this might lead to internal growth and the limitations of this strategy). (20 minutes)
  4. Reinforce the outcome of the discussion by viewing the PowerPoint Presentation. (15 minutes)
  5. Summarise the key outcomes of the lesson. (5 minutes)

Lesson 2

  1. Go over the key outcomes from the last lesson. (5 minutes)
  2. Introduce the Activity. Outline the learning outcomes of the Activity and explain the process. A discussion at the outset of what is meant by 'evaluating strategies' and 'critical analysis' will be helpful in giving students clear guidelines about what is expected of the Activity. (10 minutes)
  3. Set students onto the task. The task can be completed as an individual activity, done in pairs or in utilising the same groups as used in the previous lesson. The outcome could be a written piece of work for formal assessment or a series of points for class discussion. (45 minutes)
  4. Review the key points of the outcome of the Activity. (5 minutes)

N.B. If the Activity is used as a means of stimulating further discussion, then a further lesson may be needed to explore the ideas generated by students. If the written format is used, students may need a homework session to complete the Activity.

Extension Work:

What do you think are the key business objectives for a firm such as Marks and Spencer? How far do these objectives match the classical economic assumption that a business is a profit maximising entity? If you believe that M&S is not a profit maximising organisation, does this invalidate the assumptions about firms' behaviour in the classical economic theory of the firm?