VISIBLE AND INVISIBLE HANDS AT‘COLORS OF INDIA’ FEST

This caselet introduces the participants/students to the concept of circular flow of an economy.Set in the backdrop of the Bangalore School of Management’s (BSM) cultural fest – ‘Colors ofIndia’ – this caselet helps understand the factors that propel a smooth operation of circular flow.When several women social entrepreneurs assembled at BSM’s cultural fest, ‘Colors of India’,their sales expectations were quite high. However, the first day’s sales seem to have dampenedtheir spirits and the organizers were in a spin to convince the women social entrepreneurs to bepositive. While the event is a microcosm of how an economy’s circular flow operates, there areseveral visible and invisible hands that keep the circular flow at a constant motion. What arethose visible and invisible hands? How can a college fest be a microcosm of a circular flow of aneconomy?

Pedagogical Objectives

• To understand the concept of circular flow of economy and how the constituents of thesystem – factor markets, product markets, consumers and companies – interact to fuel aneconomy’s continuous movement

• To have an overview of how Adam Smith’s ‘invisible hand’ and Alfred Chandler’s ‘visiblehand’ facilitate a seamless functioning of an economy through its circular flow

• To examine the factors that propel the operation of an effective circular flow in an economy

Case Positioning and Case Setting

This caselet can be used for:

• MBA Program in Managerial Economics course – To understand the concept of circularflow of economy, its constituents and the various factors that affect it

• International Business Module – To understand the concept of circular flow of economyamidst globalization

ABSTRACT

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