Business Management Basics

Effective Management

• Effective management is vital to the success of a business, achieving business goals by making the right decisions at the right time.
• The 4 basic functions of managers are: planning, organising, leading, and controlling.
• Planning involves setting up strategic, tactical, and operational plans, and establishing plans and objectives.
• Organising involves turning plans into reality, deciding on resources to use, and how to use them.
• Leading involves setting standards, motivating employees, and communicating effectively.
• Controlling involves monitoring and evaluating performance, making adjustments to plans and procedures as needed.

Importance of Effective Management

• Effective management achieves business goals, concerning profitability, sales, market share, growth, share value, community involvement, and environmental management.
• Goals are long-term, broad, and general, while objectives are more detailed, short-term, and specific.
• Efficiency comes from management decisions that minimize expenses, waste, and costs.
• Outputs refer to the goods and/or services produced by a firm using inputs, such as materials, facilities, and equipment.

Features of Effective Management

• Planning that anticipates changes in the business environment.
• Organising resources in the most efficient manner.
• Skills to lead and inspire staff.
• Controlling the business to stick to its business plan for success.
• Effective information management.
• A range of skills used appropriately for a given situation.

The 4 Functions of Management

• Planning involves keeping up-to-date with changing trends, technological innovations, and legal reforms.
• Organising requires good decision-making skills to solve problems or take advantage of new opportunities.
• Leading involves communicating effectively to all employees, commanding respect, and inspiring staff.
• Controlling involves ensuring the business achieves its goals and objectives, using input, concurrent, and feedback controls.

Skills of Management

• Effective managers need a range of skills, including interpersonal, communication, and people skills.
• Managers must be able to adapt their manner and style of communicating to suit different types of people and employees.
• Managers need to motivate and guide employees to reach their full potential, and realise that employees can offer new ideas and suggestions.

Strategic Planning and Vision

• Strategic planning involves long-term planning for a business as a whole, developed by senior management.
• Strategic thinking involves thinking long-term, considering the total business environment, understanding interdependence between departments, and having a common goal.
• Vision is the clear, shared sense of direction that allows people to attain a common goal, and gives employees the ability to perform.

Problem-Solving and Decision-Making

• Problem-solving involves identifying the nature of the problem, assessing and choosing the most appropriate strategy, implementing, and monitoring results.
• Managers must be flexible and adaptable to change, anticipating and adjusting to changing circumstances.

Responsibilities of Management towards Stakeholders

• Stakeholders are individuals or groups with a vested interest in a business, including customers, employees, and the community.
• Management must reconcile the conflicting interests of stakeholders, promoting and managing change, being socially just, and ecologically sustainable.

Achieving Business Goals

• Goals need to be defined in the early stages of developing a business strategy.
• Goals should be strategic, meaningful, clear, concise, and achievable.
• Financial goals include maximising profits, increasing revenue, and minimising costs.
• Social goals include improving the quality of life for employees, supporting cultural diversity, and promoting human rights.
• Environmental goals include using production methods that do not harm the environment, and reducing reliance on non-renewable resources.