Business Management Fundamentals

Business management fundamentals

Businesses may be of any size. They may deal in any kind of commodity, and they may have one of at least three structures (sole proprietorship, partnership or corporation). But business management is built on certain principles which are the same regardless of the type of organization in which it is done. Every action and decision has to be coordinated properly so that a carefully chosen goal may be achieved.

Some history

The modern discipline of business management developed with the rise of the modern stock exchange during the 16th century, when the discovery of the New World opened up ocean trade routes, on which trade required more money than the simple proprietorship or partnership could make. Prior to that time, there was no distinction between owning a business and managing it; and those who managed small shops or farms did not plan the exact way in which they would do so. With stock companies, those who brought in their money often knew little about the businesses they were financing, so they hired managers who did possess such knowledge.

What does the business manager do?

Management of a business is as much an art as it is a science since the primary function of the manager is to get people to work more efficiently than they otherwise would. There are four main skills that form part of management:

1. Planning — What is the desired final product? What resources, human and nonhuman, should be used to achieve that goal? If they are not available at the present time, how will they be obtained? What could go wrong, and how will that be prepared for?
2. Organization — How are you going to make things happen? How ready is everyone to do what he or she has been assigned to do? How well trained and motivated are the employees?
3. Directing — Here is the part where you tell each employee what he or she is to do, when to do it and what to use. In this function, the manager may play a role similar to that of the conductor of an orchestra.
4. Monitoring — The manager is focused on making sure that everything is going along smoothly, fixing anything that is not, and in general remaining on top of things.

Small business management

The management of a small business is in many ways a separate discipline from business management in general. The processes described in the previous section do, of course, apply here as well, though they take place on a smaller scale. There are books on the subject, and at some colleges and universities (such as Penn Foster and Flathead Valley Community College), you can even choose specifically to major in small business management. For an example of a college program in that discipline, go here. Software and apps (including those for mobile phones) are also marketed.

When it comes to managing a small business, you need to start with the fundamentals of business management.