Business Management Methods

Business Management vs. Leadership

Managing is not the same as leading. Leaders are more prone to create business models and grow businesses. A manager is more apt to oversee the created model and maintain the business’ growth. Effective management is key for maintaining future growth. Managers are the ones who keep the company running smoothly on a daily basis, as the leaders of the company are trying to take the business to a new level. Managers keep the company flowing to keep the cash flow, and in a lot of small business organizations, the leader and the manager are one in the same (autocratic). But as a business expands, in most cases, the leader must appoint a manager to keep all the other main important areas in compliance. It is the job of the leader to “lead” his manager and have an effective method in place for that manager to take and run with.

Business Management Methods

Each company possesses a certain type of style in regards to how they run their day to day operations. There are 5 well known business management methods. Today we will talk about the first of the 5 methods, Autocratic Management.

Autocratic Management

Of all the methods we will discuss, Autocratic Management is, by far, the most common methods for small businesses. With Autocratic Management, the business owner is not only the leader and the one that is responsible for the company, but also the President or CEO of the company; maintaining the role as manager. The business owner makes most, if not all, of the decisions and is ultimately the one driving and sustaining the business.

My Advice to Autocratic Managers: Autocratic business management should not be a long term type of method that you have in place. Autocratic methods can stunt growth if they stay in place too long. For increased growth, it’s key to find the best transitional type of management style that meets your businesses culture. But before transitioning to one of the methods we will be discussing in the weeks to come, make sure you have properly mastered Leadership Skills #4 & #5 (if you want to learn more about these leadership skills, visit my blog). Without the ability to duplicate yourself and delegate roles successfully, transitioning to a new type of business management method may lead your company towards failure.

Characteristics of Business Management

All activities performed by a manger to get things done through others are known as management. In other words, management is to manage human and other resources tactfully for the achievement of organizational goals. It is universal in all organized activities. It is an exercise of harmonizing men, money, machines, materials and methods towards fulfilling the defined objectives.

Check our list of characteristics of business management

Goal oriented

Every organization is established for a specific objective. Management is an instrument or system that contributes for the efficient use of human and other resources to achieve predetermined objectives. The main objective of business management is to maximize productivity with optimum use of human effort.

Universal activity

Management is essential where human activity exists. The process of business management may be different from organization to organization but the basic principles of management are same. It can be said that the management principles are universally applicable.

Social process

Business management is a part of social process. Management achieves its objectives by, with, and through the people. It utilizes human resources for the achievement of organizational goals. Management has to consider not only the organizational objectives but also the social objectives. It has to fulfill the needs of employees within the organizational resources.

Dynamic/modifiable activity

Management is a dynamic and continuous process. The management system of today may not be applicable or effective for tomorrow. Therefore, management must be dynamic and flexible with the changing environment of the society. Management has to modify its style according to the time and situation. This flexibility is essential for an organization to adjust with the changing environment of the business.

Group activity

The concept of business management is not applicable if there is only one person or proprietor. It represents a team, class or section of people involved in various managerial functions. It is essential if there is a group of people involved in performing any activity to achieve common goals. Management defines the authority, responsibility and procedures to perform specific work.

Distinct process

Management as a process involves various types of functions. One function of management is interrelated with another function. The management clearly defines the specific process of work to achieve predetermined goal. It does not consider the trial and error approach.

Both science and art

Science is a systematized body of knowledge, principal or truth that is experimentally proved. Similarly, art is the personal skill and ability to apply the scientific principles. Management is both science and art. It is a science because it is based on some basic principles of universal application. It is also an art because skill and ability is required for performing managerial functions.

A profession

Profession involves the specific type of work, followed by special knowledge and education. With the development of joint stock companies and multinational companies the ownership and management has been different. Management of huge organizations has been entrusted in the hands of professionals having specific skill and knowledge.

Multi-disciplinary in nature

Business management is multi-disciplinary in nature. Many of the principles and techniques used in management are borrowed form a number of other disciples like psychology, sociology, economics and mathematics.