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Mangement in business is a topic that has caused numerous headaches for many up and coming managers.
Its a topic that consists of a lot of nuances that can be difficult to grasp at first. Its a topic in which the best teacher is often times experience.
But we will explain below the best that we can.
What is Business Management?
Business management is the act of organizing people to accomplish the desired goals and objectives of a business. Business management requires the utilization of the entity’s resources in the most efficient manner possible.
Business management comprises organizing, planning, leading, staffing or controlling and directing a business effort for the purpose of accomplishing the entity’s listed goals. In a for-profit business model, business management focuses on the satisfaction of a range of stakeholders, including the officers of the business, its employees, shareholders and the general public (consumers). In this regard, business management’s primary function is to secure a profit, (for shareholders) create valuable and innovative products at a reasonable cost (consumers) and provide employment opportunities. In a nonprofit scope, business management will focus on keeping the faith of its supporters and donors.
Basic Functions of Business Management:
Business management operates through a series of functions, typically classified as organizing, staffing, planning, leading, monitoring, controlling and motivating.
Planning: This area of business management decides what needs to happen in the future and subsequently generates plans for action. Planning is the foundation for effective business management; by deciding what needs to happen next week, next year or over the next five years, a business can develop a strategy to meet its listed goals.
Organizing: This portion of business management implements a pattern of relationships among its employees to encourage the optimum use of the entity’s resources. Organizing is needed to utilize the businesses’ finite resources; effective use of resources is the foundation for reaching a desired level of productivity.
Staffing: This area of business management focuses on recruiting, analyzing and hiring individuals for appropriate employment posts.
Leading: Also referred to as “directing” in the business management model, leading requires the entity’s executives to determine what needs to be accomplished in a situation and what employees are best to fulfill such expectations.
Monitoring/Controlling: This phase of the business management process requires the leaders of the entity to monitor progress in relation to the plans and business of the business.
Motivation: A key aspect to the business management model, motivation is a basic function to maximize employment efficiency. By boosting morale, employees will carry-out their specific tasks in an effective manner.
Basic Roles of the Business Management Process:
Decisional Roles: Carried out by the entity’s executives, the decisional roles are required for decision-making purposes.
Interpersonal: These roles are necessary to effectively coordinate and interact with the employee base. Interpersonal roles are used to bridge the gap between the businesses’ executives and their employees; interpersonal roles are used to create a sense of uniformity and a team environment.
Informational: These roles are implemented to handle, analyze and share information that is important to the business.
Management Skills Needed for the Business Management Process:
Diagnostic: These skills are essential to the business management process because they analyze the appropriate course of action/responses to situations that may affect the business’s stability or health.
Political: These skills are used to build a foundation for the business; political skills are needed to establish connections with public bodies, the public and other companies.
Conceptual: These skills are required to effectively evaluate complex situations.
Interpersonal: A series of skills needed to bolster motivation and communication among the executives and employee-base of a company. Interpersonal skills are a fundamental aspect of the business management process because they enable executives to mentor employees and delegate tasks.
Formation of a Business Management Plan:
In the business management process, the mission of the entity is the most fundamental purpose. The vision of the company’s goals reflects its overall aspirations; this portion of the business management process specifies the intended direction of the company. The business management process also requires the entity to list its objectives. By listing objectives, the business will refer to the ends at which a certain activity is aimed—this gives the purpose’s tangible actions a means.
The business’s management plan is a guide that stipulates regulations and objectives; the management plan may be used by executives in the decision-making process and may be followed by the entity’s employees to bolster transparency and motivation. Regardless of its particular use, the business plan must be flexible and easily interpreted by all employees of the business.
The business management plan refers to the construction of a coordinated plan of action that lists the goals and the resources used to engage these goals in relation to the company’s long-term objectives. The business management plan provides guidelines for all members of the business; these instructions or regulations stipulate how the employees and managers ought to utilize and allocate the entity’s factors of production.
The Implementation of the Business Management Plan:
To effectively implement a business management plan, the following strategies and relationships must be formed:
The policies must be discussed with all executives, managerial staff and general employees of the business model.
All managers must understand how and where they can implement their strategies and policies.
A formal plan of action must be constructed for each department of the management plan.
All strategies and policies must be reviewed at least quarterly—the review of the business management plan will be evaluated to ensure that the provisions of the plan are properly aligned with the broader goals of the business.
Contingency plans must be developed to meet changes in the macro-economy or the environment.
The business management plan must actively assess the progress of the company as well as the actions carried-out by the top executives of the company
The construction of a sound environment and palpable team spirit is required for the business to be efficient
The objectives, missions, strengths and weaknesses of each sector of the business must be evaluated to determine their roles in achieving the broader mission.
A planning strategy must be created to ensure that all initiatives are consistent and that strategies are aimed at achieving the same objectives.
The above policies must be discussed with all executives and managerial personnel that are required in the execution of any department’s policy. Organizational alteration is achieved through the implementation of succinct plans. An example of a common business management plan will include the following steps: Increase the corporation’s urgency, create a vision, bolster communication, empower action, create short-term goals and victories, keep pushing towards the final objective and make changes stick.
Important Players in the Business Management Process:
The majority of business entities have three distinct management levels: first-level, mid-level and top-level executives or managers. These executives are classified in a distinct hierarchy of authority to perform different tasks aligned with the business model. In a number of organizations, these managers provide the business model with the following tasks:
This classification is comprised of a board of directors, a president, a vice-president, CEO’s, CFO’s, CLO’s etc. These executives are responsible for controlling, directing and overseeing the entire organization. The top-level management of corporations develops goals, strategies, and company policies and renders decisions on the direction of the business. Moreover, top-level managers will play a primary role in the mobilization and utilization of outside resources to effectively produce or supply the company’s product or service. Because of these roles, top-level managers are accountable to the general public and shareholders.
This classification consists of general managers, branch managers and the company’s department managers. Middle-level managers are accountable to top-level managers for their department’s function. A middle-level manager must devote more time to directional and organizational functions of the business model. These individuals execute organizational plans in accordance with the entity’s policies and objectives of the above-listed executives. Middle-level managers discuss information and policies from executives and regurgitate the orders derived from these conservations to lower management workers. Most importantly, because of their everyday interaction with the general employee base, middle-level managers inspire and provide guidance to employees to promote more efficient performance.
Common functions of the middle-level managers:
Middle level managers will design and implement effective group work and information systems to bolster productivity in the business model.
Middle level managers define and monitor group-level performance indicators.
Middle level managers pinpoint and resolve problems among workers.
Middle level managers implement reward systems to support cooperative behavior.
This group of the business management system consists of supervisors, foremen and the everyday experienced employee—individuals in this group are typically in charge of a few fellow employees. First-level managers focus on directing and controlling ground-level employees to effectively carry-out their work. First-level managers assign employee tasks and supervise these workers on day-to-day activities. These individuals ensure quality and quantity production; they will make suggestions and implement regulations to ensure proper compliance. A first-level manager will provide the following to employees:
Provide career planning services
Offer performance feedback
Business process management is an approach to business management that believes that all aspects of the organization should be aligned with meeting the wants, needs, and desires of the business’ clients. Business process management is a holistic management approach. This approach to business management strives for innovation, flexibility, and integrating technology, while promoting business efficiency and effectiveness.
A manager or company that subscribes the business process management approach to business management believes that the processes should be improved upon on a continual basis. Proponents of the business process management approach believe that this approach allows a company to be more efficient and effective, which in turn, leaves them more capable of changing to accommodate new conditions in a traditional, hierarchical management approach that is focused on function.
On a more general level, business management is the process by which the operation of a business is made possible through planning, organizing, staffing, leading or directing, and controlling a corporation, organization, or effort with the intent of accomplishing a specific goal. Often, at the highest level of a corporation, business management will involve setting these goals in the first place.
Business process management enables a company to abstract business processes from software or technology infrastructure; business process management goes far beyond automating business software or solving the entity’s problems. Business process management enables the entity to respond to changing market and consumer regulatory demands faster than its competitors—this effectively creates a competitive advantage.
Management has many faces. That is to say that managers have many styles and management has many types.
These are the most common types of management.
1. Strategic Management
Strategic management looks at an organization’s overall strategy formation and execution with the goal of growing and sustainingcompetitive advantage.
Strategic management is an executive function that may report to the owners of a firm.
2. Sales Management
Management of sales territories, teams or accounts.
3. Marketing Management
Management of marketing strategies, products, brands and promotions.
4. Public Relations
Managing communications between an organization and the public.
5. Operations Management
The management of production of goods and services. Operations management is a broad field that describes everything from manufacturing management to retail management. Managing the process of moving a product or service from supplier to customer.
7. Procurement Management
Managing the acquisition of goods and services from external sources.
8. Financial & Accounting Management
Managing financial and accounting processes and teams. Responsible for attracting, hiring, training, compensating, rewarding and managing the performance of employees. Human resources places a key role in forming and overseeing an organization’sculture.
10. Information Technology Management
Managing information technology teams and processes.
11. R&D Management
The management of research & development processes and teams.
12. Engineering Management
Managing the application of engineering to business solutions. For example, new product development, manufacturing and construction. Program management is the management of an ongoing portfolio of projects. Project management is the planning, organization and control of projects. Risk management is the discipline of identifying, assessing and controlling the chance that objectives and processes will have negative consequences. Change management applies a structured approach to business change. The goal of change management is to help organizations and teams make smooth transitions to target states.
17. Quality Management
The management ofquality planning, control, assurance and improvement.
18. Innovation Management
The management ofinnovation processes such as strategy, research & development or organizational change.
19. Design Management
The management of design processes such as new product design.
20. Facility Management
The management of facilities such as offices and data centers. Knowledge management enables the identification, creation, representation, distribution and use of knowledge. In a knowledge driven economy, this has become a critical field. via 21 Types of Management – Simplicable
Good management skills are vital for any organization to succeed and achieve its goals and objectives. A manager who fosters good management skills is able to propel the company’s mission and visionVision StatementA vision statement describes what a company desires to achieve in the long-run, generally in a time frame of five to ten years, or sometimes even longer. It or business goals forward with fewer hurdles and objections from internal and external sources.
Management and leadership skills are often used interchangeably as they both involve planning, decision-making, problem-solving, communication, delegation, and time managementTime ManagementTime management is the process of planning and controlling how much time to spend on specific activities. Good time management enables an individual to complete more in a shorter period of time, lowers stress, and leads to career success. This guide provides a list of the top tips for managing time well. Good managers are almost always good leaders as well. In addition to leading, a critical role of a manager is to also ensure that all parts of the organization are functioning cohesively. Without such integration, several issues can arise and failure is bound to happen. Management skills are crucial for various positions and at different levels of a company, from top leadership to intermediate supervisors to first-level managers.
Types of Management Skills
According to American social and organizational psychologist Robert Katz, the three basic types of management skills include:
1. Technical Skills
Technical skills involve skills that give the managers the ability and the knowledge to use a variety of techniques to achieve their objectives. These skills not only involve operating machines and software, production tools, and pieces of equipment but also the skills needed to boost sales, design different types of products and services, and market the services and the products.
2. Conceptual Skills
These involve the skills managers present in terms of the knowledge and ability for abstract thinking and formulating ideas. The manager is able to see an entire concept, analyze and diagnose a problem, and find creative solutions. This helps the manager to effectively predict hurdles their department or the business as a whole may face.
3. Human or Interpersonal Skills
The human or the interpersonal skills are the skills that present the managers’ ability to interact, work or relate effectively with people. These skills enable the managers to make use of human potential in the company and motivate the employees for better results.
Examples of Management Skills
There is a wide range of skills that management should possess to run an organization effectively and efficiently. The following are six essential management skills that any manager ought to possess for them to perform their duties:
Planning is a vital aspect within an organization. Planning is one’s ability to organize activities in line with set guidelines while still remaining within the limits of the available resources such as time, money, and labor. It is also the process of formulating a set of actions or one or more strategies to pursue and achieve certain goals or objectives with the available resources. The planning process includes identifying and setting achievable goals, developing necessary strategies, and outlining the tasks and schedules on how to achieve the set goals. Without a good plan, little can be achieved.
Possessing great communication skills is crucial for a manager. It can determine how well information is shared throughout a team, ensuring that the group acts as a unified workforce. How well a manager communicates with the rest of his/her team also determines how well outlined procedures can be followed, how well the tasks and activities can be completed, and thus, how successful an organization will be.
Communication involves the flow of information within the organization, whether formal or informal, verbal or written, vertical or horizontal, and it facilitates smooth functioning of the organization. Clearly established communication channels in an organization allow the manager to collaborate with the team, prevent conflicts, and resolve issues as they arise. A manager with good communication skills can relate well with the employees and thus, be able to achieve the company’s set goals and objectives easily.
Another vital management skill is decision-making. Managers make numerous decisions, whether knowingly or not, and making decisions is a key component in a manager’s success. Making proper and right decisions results in the success of the organization, while poor or bad decisions may lead to failure or poor performance. For the organization to run effectively and smoothly, clear and right decisions should be made. A manager must be accountable for every decision that they make and also be willing to take responsibility for the results of their decisions. A good manager needs to possess great decision-making skills, as it often dictates his/her success in achieving organizational objectives.
Delegation is another key management skill. Delegation is the act of passing on work-related tasks and/or authorities to other employees or subordinates. It involves the process of allowing your tasks or those of your employees to be re-assigned or re-allocated to other employees depending on current workloads. A manager with good delegation skills is able to effectively and efficiently re-assign tasks and give authority to the right employees. When delegation is carried out effectively, it helps facilitate quick and easy results.
Delegation helps the manager to avoid wastage of time, optimizes productivity, and ensures responsibility and accountability on the part of employees. Every manager must have good delegation abilities to achieve optimal results and accomplish the required productivity results.
Problem-solving is another essential skill. A good manager must have the ability to tackle and solve the frequent problems that can arise in a typical workday. Problem-solving in management involves identifying a certain problem or situation and then finding the best way to handle the problem and get the best solution. It is the ability to sort things out even when the prevailing conditions are not right. When it is clear that a manager has great problem-solving skills, it differentiates him/her from the rest of the team and gives subordinates confidence in his/her managerial skills.
The ability to motivate is another important skill in an organization. Motivation helps bring forth a desired behavior or response from the employees or certain stakeholders. There are numerous motivation tactics that managers can use, and choosing the right ones can depend on characteristics such as company and team culture, team personalities, and more. There are two primary types of motivation that a manager can use. These are intrinsic and extrinsic motivation.
Management skills are a collection of abilities that include things such as business planning, decision-making, problem-solving, communication, delegation, and time management. While different roles and organizations require the use of various skillsets, management skills help a professional stand out and excel no matter what their level. In top management, these skills are essential to run an organization well and achieve desired business objectives.
Thank you for reading CFI’s guide to management skills. CFI is a leading provider of career resourcesCareersSearch CFI’s career resources library. We’ve compiled the most important career resources for any job in corporate finance. From interview prep to resumes and job descriptions, we’ve got you covered to land your dream job. Explore guides, templates, and a wide range of free resources and tools for finance professionals. To continue learning and advancing your career, the additional resources below will be helpful:
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