What is business management? What are the 14 important management principles in business to acknowledge? Let's come to the article of Viindoo to find the needed answer!
What is the concept of business management?
Business management simply means the mechanisms and regulations issued to help operate and control business operations. The main task is to balance the interests of related parties in the business such as managers, shareholders, customers, etc.
What is the definition of business management? Which are the goals for the task to achieve?
The business management process is a continuous and organized activity to control employees. These mechanisms and regulations will help businesses optimize the potential and opportunities to conduct business activities, production, information disclosure, internal control, etc.
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Functions of corporate management
Strategic planning
The responsibility of business management is defining and devising strategies to achieve business goals. The planned strategies can lead businesses in the right direction as well as proper prediction and planning for the possibilities.
Strategic planning
To perform the strategic planning function, leaders need to:
- Understand the economic context of the external environment
- Understand the internal situation of the business
- Set goals
- Identify the resources required and all related parties
- Determine the tasks tagged with time and resources available. In addition, leaders also need to specify the necessary conditions to accomplish the goals set.
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Organization and implementation
The function to organize and implement corporate management is reflected in the following three areas:
- Organize and build the business apparatus and company organization chart with appropriate order, level, and position. Which, the benefits and responsibilities of each should be clarified clearly and in detail.
- Assign resources, personnel, and tasks to departments. Leaders have to allocate these following the order of company - department - working group - individual.
- Develop and issue policies and mechanisms to ensure effective business activities.
Organize and implement
Management and leadership
After building a foundation for operation, the next function of business management is to manage and lead personnel to operate following regulations. In this process, leaders need to well form behavior, policies, mechanisms, and working styles to stimulate employees.
Management and leadership
Control and adjustment
Managers have to closely monitor and regularly check business processes to objectively assess and timely update the company’s internal situation. During this process, conducting corporate management will support the understanding of the business's strengths and weaknesses. Therefore, managers can make adjustments to improve effectiveness.
Control and adjust
Principles of business management
Specialization and allocation of labor
A specialization is a form of labor allocation. Accordingly, leaders let individuals or groups focus on a certain area and assign them specialized tasks.
Specialization and allocation of labor
Principles to expertise and allocate labor in business governance will help increase businesses’ efficiency and productivity.
Centralization
The principle of centralization is to concentrate power among managers in the company. Centralization help business decisions become unified, decisive, and consensual.
Principle of centralization
Unity of orders
The principal conducts working orders from both sides to avoid confusion. Specifically:
- The leaders give orders to the subordinates within his/her authority
- Employees follow orders from their superiors
Unity of orders
Consensus on the direction
Groups, departments, or individuals within a business can conduct different tasks but need to follow common goals and directions. Any small projects and tasks need to be unified in a big plan while coordination is there to remain rhythmical.
Consensus on the direction
Authority with corresponding responsibility
Authority and responsibility are like the two sides of the same coin. The important principle in business governance is that authority comes with the corresponding responsibility.
Authority goes with corresponding responsibility
Individuals with high authority are the ones to conduct resource optimization for the best task completion. At the same time, those who hold great authority take significant responsibility for the decisions made, especially when something goes wrong.
Prioritising the common goals
The ideal goal of every leader is the dedication and hard-working of employees. Every employee should work based on the principle of putting the company's interests above their personal interests.
Putting the common goals first
However, in the process of working, conflicts of interest may inevitably arise. Therefore, leaders need to practice business management for conciliating arising conflicts and directing them to win-win results.
"Leadership Chain"
In an enterprise, the relationship between employees and leaders should be maintained at a balanced level, neither too close nor far away. This relationship needs to be expressed clearly and transparently while avoiding abusive and coercive behavior.
The relationship between employees and leaders is better at a balanced level
Every order given should be clear and in a reasonable manner to ensure all parties can understand and flexibly follow.
Order
Business management should lead to great order setting within the company. For instance, the establishment of order can be the allocating of positions and jobs to employees in a specific and clear way.
Building order within the business
However, managers need to set orders appropriately and transparently to ensure all employees know their value in the business.
Discipline
Discipline within business governance includes standards of reaction and adherence to rules and values. Discipline is among the key factors for a business to run smoothly.
Disciplinary principles
Justice
A justice culture will make employees feel free and satisfied in the working environment. Business management with fairness and justice will result in sustainable operations and strong employee loyalty.
Principle of justice
Remuneration
Managers need to guarantee commensurate remuneration for employees. The remuneration level also needs to fit with the financial capacity of the business.
Remuneration is commensurate with the employee's effort
Mission stabilization
Stability is a foundation for business development. An effective management system of a business should create a sense of assurance for stability. Therefore, employees and leaders need to mind nothing but complete work.
Mission stabilization
Initiative
Business leaders need to create a comfortable environment and encourage their employees to freely express their personal initiatives and ideas. The need for self-expression is true of paramount importance.
Principle of initiative
Regardless of the level within a business, dedication often comes from those who can demonstrate personal competence and receive recognition.
Solidarity
It is fact that the greatest strength comes from the spirit of collective solidarity. Therefore, managers need to ensure policies and management principles contribute to creating a cohesive relationship among employees. In that case, internal solidarity will be there to create great strength for the business.
Solidarity
Viindoo hopes that the above article gives some understanding of What is business management? and the 14 important business management principles. For specific advice on business management solutions, please feel free to contact us through the information below:
