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.
This form of management is made tangible through the use of business process management software. Business process management software is a computer program that organizes a company’s business model; the software will align the company’s goals with its available resources to create a detailed business management plan.
When utilized business process management software or tolls will allow a business to engage in the following:
Business process management software or tools enable users to strategize processes and functions.
Business process management software or tools to develop a baseline for the process improvement
Business process management software or tools to develop a model, which will stimulate the change to the process.
The tools enable users to analyze simulations to determine optimal improvements.
The tools enable users to select and implement the suggested improvements.
To deploy this maneuver, the business process management software will provide user defined dashboards to monitor the improvement in real time. Business process management software will relay the performance information back to the user for the subsequent iteration.