An All-Encompassing Guide to Business Management (Best Templates Included)

There is an entrepreneur in all of us, listening intently, just waiting to learn a thing or two about business management. But before that moment of reckoning happens, one has to meander through a trail of failed ideas, missed chances, and fallible strategies.

So how does one truly embark on a journey to be bestowed the title of a ‘successful businessperson’? With knowledge, of course! As an entrepreneur, you must have the fundamentals of business management figured out to get on the right track and turn your novel idea into something truly lucrative.

However, the term ‘business management’ encompasses so much that it features as a full-fledged course at top universities. So to save you a lot of ‘book’ time, we present you this ultimate guide that will take you through the thick and thin of business management and what it boils down to. You can explore the various sections of this guide by clicking on the links given below. Here we go!

Basics of Business Management
Components of Business Management
Challenges in Business Management
Qualities of Efficient Business Management

In very basic terms, business management is the practice of establishing, managing, controlling, operating, and improving various components of a business to achieve the desired goal. Additionally, business management encompasses the skill and practices that help a company reach a better position in terms of revenue, growth, and market value.

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Business managers make sure that each task in the company is done on time and in the most economical way. They also ensure that each and every employee complies with the company policies and standards of quality while delivering their peak performance. Much of these tasks fall under a specific set of management domains for which each business manager can take responsibility or delegate the tasks as deemed necessary for uplifting the company.

A brief history of business management

Modern-day business management has come a long way since it evolved from simple to-do lists to actual concrete practices worthy of being taught and learned. In fact, the very primitive concepts of management emerged at the cusp of the 18th century in the world getting used to the Industrial Revolution. This was the time when mechanical spindles carved out consumer durables while a group of workers operated the levers. The inherent idea at that point in time was that people did not like to work and needed to be controlled or even forced to do work by a person higher in status, skill, or capital.

However, this exercise of power over laborers manifested as something the latter did not adhere to for long. Subsequently, better schools of thought emerged across the industrial spheres that changed the way management was practiced by those with the abilities and the drive to do so.

One of the most prominent schools of thought came from noted mechanical engineer Fredrick W Taylor, who gave his principles of scientific management in the late 1800s. This practice defined a system of tasks for a business and placed high-skilled planners and managers to accomplish optimum results. At the lower level of this arrangement were skilled workers with ample knowledge to guide and train the workmen under them. This encapsulated their role as foremen or superintendents.

via GIPHY

However, as more theories emerged, the purview of business management turned from tasks to people, psyche, team dynamics, motivation, and learning. Broadly, such theories cascaded alongside the following timeline:

1930s: Industrial researcher Elton Mayo projected his management theory that gave weightage to people factors like relations and bonhomie rather than monetary and physical attributes of the workplace. In other words, this concept opposed task management and laid the foundation of the modern workplace as we know it. Thereafter, social psychologist Kurt Lewin propagated his research on how behavioral science influences each component of an organization. Lewin’s theory on change management and action learning was pivotal to devising a more functional and cooperative work environment than what the previous theories proposed.
1950s: The whole point of task management and organizational management theories was to impart the skeleton to the thought process behind a company. However, as more research surfaced, the concept of human motivation also grabbed its share in the managerial skillset. This included a hierarchy of multiple low-skill needs that an employee had to fulfill before being promoted to the high-skill tasks. Later hygiene also joined the gamut of factors leading to workers’ motivation.
1960s: By the time businesses were entering and emerging in the 60s, researchers and industry gurus figured out the Theory X and Theory Y of managing people. This included graphing the company’s needs against people’s needs and strategizing according to where the employee figured on that graph. With action learning, the cornerstone was questioning the existing patterns of knowledge with insightful queries. That way, the company became better as it climbed up the learning sequence.
1990: Peter Michael Senge, an American systems scientist, pioneered a brilliant concept of business management called the learning organization. Herein, the noted MIT lecturer defined five disciplines for an organization to achieve learning – shared vision, mental models, team learning, personal mastery, and system thinking. The pivotal concept equated a company to an organism that can learn as it grows and interacts with its surroundings. Learning organization is, thus, what you see leading businesses emulate to achieve their objectives productively.

But why business management?

There is a lot that happens at a company. Even if you take the example of running a factory, there has to be some kind of structure and authority that guides your actions. You cannot just rely on your passion and drive alone. You have to have some strategy and knowledge base to get things off the ground.

This is why business management is crucial to running companies that change the world, or simply help run it the way we see around us. It is not just the onus of that small food start-up in Silicon Valley alone. Business management is a part and parcel of all those small mom-and-pop baking goods stores serving a county as well.

To make the purpose of this guide clearer, here are a few reasons why entrepreneurs and hustlers need to spare a thought or two about business management.

Setting clear objectives: The very purpose of managing a business is to accomplish a pre-defined objective. While most of the time this objective is to directly earn revenue, sometimes it is also about getting a job done in order to be paid for it. Based on the type of company you are running, this objective can vary. This is where a business manager’s role is crucial. Business management helps set clear targets for a company to achieve.
Planning and executing strategies: Once the ‘what’ is figured out, the next task is to establish the ‘how’. Business management involves planning out strategies in the face of competition and reinventing the company if need be. The practice of management also delineates the roadmap to these strategies and finding the most viable solution for any problem that arises along the way.
Developing human capital: Any strategy needs people to execute it. A small company with a team of 10 or a large corporate with a few thousand employees will ultimately excel based on the kind of skilled workers at the steering wheel. Business management is crucial to honing talented individuals that make any company grow and persevere. It also decided who gets to do what to ensure smooth functioning of the organization.
Optimization: Efficiency and precision are the cornerstones of business management. But accomplishing these qualities cannot be left to chance and individual discretion. Therefore, innovators and company heads need business management practices to get the most out of the workers’ skills to ensure optimum use of resources.

Based on each point of importance described in the previous section, there are 7 broad components of business management. Now, these components may be expanded upon or merged as per their role within an organization. The bottom line is that these work in coordination with one another to act as a unit. Therefore, it is important to understand what specific role each component plays to solidify one’s notion of how a company works. Here are the 7 components:

#1 Human resources

This component manages the human capital in the company. Abbreviated as the well-known term ‘HR’, it also takes care of employee motivation and puts in place the policies to support and guide them. Additionally, this component is responsible for growing, refining, and modifying the talent base of any organization. Inherently, the HR department handles and preserves how a company’s leadership quotient expands according to the strategy and needs. Besides, this component also handles compensation and performance remuneration.

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#2 Marketing

If we assume that an organization is like a person, marketing is what their voice will be. Marketing involves spreading the word about a company and its offerings to prospective and existing customers. It utilizes communication strategies to engage and convert customers browsing catalogs casually into those who buy products from the company or avail of its services, online and off. Over time, marketing has come to represent brands with online and offline advertising, social media campaigns, and tracking progress along the way.

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#3 Finance

Money does make the world go round. The lifeblood of business management, finance deals with the planning and distribution of the capital associated with an organization. Additionally, it caters to investments and revenue that the company generates and how the capital is assigned to keep the business up and running. Continuous assessment, budgeting, and reporting are the hallmarks of the finance department of any company. Companies with a strong and well-managed financial portfolio are able to fare better in the market as compared to their counterparts. Therefore, money managers hold immense importance for every company’s credit and reputation.

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#4 Strategy

With strategy, a company positions and equips itself suitably in the face of its competition in the market. Strategic management gives the organization a direction to achieve its objectives. Based on the requirement, strategy can constitute plans for sales and other activities in the company. Strategic components involve the middle to upper levels to steer each action of the company and its employees towards optimization. Accordingly, strategy can deal with resource management and brand positioning to outdo one’s competitors. It ensures that all targets are met with the smartest technique possible.

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#5 Operations

In a cohort with strategy, operations constitute what goes on behind the scenes within an organization. Whether it is a specific scheme for a product launch or service proposal design, this component oversees, schedules, structures and manages all of it. Though it is concerned with the internal functions of the company, it lays the groundwork for how the business interacts with the outer elements. Additionally, operations management entails a gamut of activities that target specific goals of the business. Based on the size of the business, operations can be assigned to a single person or a team.

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#6 Product

Product management deals with the development, launch, marketing, and review of new products manufactured by a company. Additionally, it deals with analyzing, pricing, and projecting about the new products in line with the business objectives of earning better market share and revenue. A product manager ensures that the product completes its lifecycle from the conveyor belt to the consumer’s shopping cart in the most lucrative manner possible. They also oversee that the product development takes place in a specified and optimum time-frame, besides tracking the sales response and impact.

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#7 Project

Project management entails handling a temporary task to develop a product or rendering service within a specified scope, time, and budget to achieve a business goal. Based on the type of company, there can be internal as well as external projects for smooth and lucrative functioning of the organization. Within an organization, project managers handle various teams and deliver on the tasks as required by the higher-ups. They are also tasked with performance monitoring and feedback for improvement in the project delivery mechanism. Project management, thus, banks upon extensive knowledge, skills, and use of tools, besides prompt redress of risks.

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Rising competition

Thanks to the global connect of the internet, ideas, and information take mere seconds to propagate among the populace across continents. So when every human being with access to the internet and a shatter-proof glass screen can see what you are up to, it isn’t hard for them to take your idea and build something similar (or better) upon it. Consequently, there are a plethora of products in the market having almost the same features, but one selling more than the other.

The scenario (or the problem) is that there is a never-ending urge to grab eyeballs and sell a product. Every tactic and strategy that goes into being the number one can prove detrimental the next minute if your competitor just flips their design. After all, when the customer can choose at a click of the button, business managers have to make sure that they are the ones getting that click.

Hiring and training the right talent

Not every employee you hire will fit into your mold. Besides the pressure of being understaffed, business managers also have to deliberate a lot on choosing the right candidate for the company. Human capital has to be a well-thought-out investment for any business. If the management falters there, it is a rough road ahead for every person in the company.

Another part of this challenge before managers is to train the employees to develop their skillset as per industry standards. Finding the right combination of motivation and persuasion is tricky for even the most seasoned directors. Poor retention rates can stem from poorly-managed work cultures. So for HR managers, it is a roller-coaster of LinkedIn searches and consultations.

Funding and resource management

Based on their key function of optimization, business managers have to grapple with the mathematics of cash flow and investment strategies to keep the company on track. Monitoring resources and utilizing them in the most efficient manner takes copious planning and sourcing. Factor in the need to address investors’ concerns and you have got yourself a corporate hot potato.

As for those just starting off just with an idea and no money, seeking funds from investors or paying off loans can come as a huge pressure point. Those managing businesses have to position the company on a point of risk-readiness. They also have to address financial liabilities and accounting issues promptly besides making sure that the books are in order.

Communication issues

Every misplaced file or unresolved ticket or unsent mail can be a result of a communication gap within the company. Equipping employees with effective communication skills is the foremost challenge before business managers. Lack of communication results in subtle (and sometimes far-reaching) consequences. Managing a diverse workforce necessitates using conversational tools and a carefully-structured communication plan to minimize errors.

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When people do not feel heard or ignore critical messages, the relay of information can take a hit and fail to serve its intended purpose. Therefore, business managers will always have to scramble for bridging communication gaps to prevent errors. Cultivating the skill to address these errors also figures on their plate.

Uncertainty

Companies across the globe have to pertain to certain policies and standards according to their geographical location. But these policies and standards are dependent on the body regulating them. Therefore, constant changes in these guidelines and metrics keep companies on their toes. Flouting them can invite penal actions and legal consequences. Needless to say, this keeps business managers up all night.

Factor in the catastrophe that COVID-19 has turned out to be, businesses now have the constant need to reinvent themselves. But at the same time, they have to introspect frequently to become a customer favorite as well. Business managers can thus imagine every next move to be ‘social distancing’ friendly or ‘remote’ compliant. Vaccine or not, keeping up with the post-COVID times will be a constant expedition.

It’s a fair game to face challenges as they come. But for any business, being the best is not a chance happening. It is something that comes from cultivating and striving for the right values over a certain period. In view of these values, it is more about the impact than the job or the business. It is these values or qualities that make any business manager the best there is. For starters, one can take inspiration from this thought-provoking tweet shared by noted businessperson and philanthropist Melinda Gates in 2018.

“My philosophy on managing people is that they are people. They’re not employees. They’re humans, and humans have all kinds of things that go on.”

Entrepreneur @nancylublin on shaping the culture at @CrisisTextLine. pic.twitter.com/daABLtulQb

— Melinda Gates (@melindagates) March 13, 2018

One thing is for certain. For those having qualities that inspire others, business management will be a slightly less vexing battle. Here are the most prominent of those qualities.

Putting people first

The world has come a long way from the days of the Industrial Revolution. With changing times, organizations have learned that people make an impact. Therefore, any efficient business management will trust its employees and give them avenues to amplify their strengths. Additionally, efficient managers identify the limitations of their subordinates and mentor them to overcome them. This adds to employee motivation and retention as well. Ultimately, putting the needs of employees first boosts the productivity and efficiency of the company.

Leveraging technology to manage change

Technology across the globe is changing how we think and function. But those smart enough to leverage it will triumph over any challenge. This is a lesson for every creative thinker who wishes to make it into the big league or carve one of their own. Efficient business management stems from the proactive use of the latest technology to eliminate mundane tasks with productivity tools. Using the latest techniques of machine learning and artificial intelligence, the organization as a whole becomes productive and efficient. Adopting the latest technologies also helps drive change and optimum use of resources as well.

Branding smartly

There is a glut of ideas in the market, just existing as companies, earning the badge of ‘your competitors’. Moreover, from this glut comes a lot of noise. Efficient business managers make sure their brand stands out with their core values and message, and makes a positive impact on the customers as well as those who are watching. This takes impeccable attention to customer sentiment and branding visuals. Efficient business management entails striking a good conversation with something that appeals to the eyes first and captures the mind later.

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Welcoming ideas

Thought leaders-cum-business managers do not confine their employees to their roles. It is a good psychological practice to have open channels in your company for the communication of ideas. People feel valued when they know that they are heard. Therefore, managers who truly want to lead by example assume and establish that there is no glass door. There is no door in the first place. If they get a billion ideas, they spare a thought for each of them. The one that truly sticks makes the company a winner.

Conclusion

Business management is not just a theoretical concept. It is an art spanning years and years of human search for viable solutions to problems. Given the global influx of ideas and thought leaders, business management will become a necessary skill for survival. As for those who have seen their fair share of the art, such skills might become the way of life. Starting off on an entrepreneurial journey is no cakewalk. Should you get stuck, the knowledge points from this guide will sure come in handy for reference. Ready, set, manage!

An All-Encompassing Guide to Business Management (Best Templates Included)