Business education means a lot for managers. See these five principles of management and use them to lead your business to prosperity.
These five definitions are the reasons why businesses exist and the basis for their need in managers:
- Value for clients;
- Competitive advantage;
In this article, Coolessay authors review each of these principles in details. This will help you understand why exactly businesses need qualified managers and will give you some interesting ideas on business ethics topics as well.
Value: Something Clients Pay for
Business exists to create various values. It uses raw materials and labor resources and increases their value by transforming them into goods or services being later purchased by clients. Value is what customers pay for.
Any business and people controlling it should create value for customers. They can reach this goal through almost unlimited numbers of ways because human wishes do not have any limits. But one business is unable to serve wishes with no limit. It should create certain usefulness through a certain way instead. In other words, managers define what the business will do and organize it adequately.
Let’s Be Organized
Any organization should have good organization! It should have goals and resources (human, material and financial ones) to reach these goals. Organization should track statuses of all projects and results. Each department should maintain its functions properly. Every worker should have tasks serving the goals of the organization all the time.
Managers are responsible for the company’s organization level. This mainly requires other people (hired workers) to do jobs well. But resources like equipment, workspaces and finances require organizational approaches, too.
Organization can be created through a structure. The general structure scheme can possibly be presented in the company’s codex. But other solutions are possible as well. For instance, financial structures organize the company’s money flows. Sales managers can be grouped into teams according to their geography, kind of goods or both factors at once. Organization means a lot, and managers are responsible for it.
To reach success in its market, the company has to do something better than other players. The production of this better good creates competitive advantages. And in fact, managers decide what this better feature will be and how to make customers value that aspect. For instance, the company can gain competitive advantages through wide choices of goods, or super low prices, or extremely high quality, or great customer service. But it is impossible to have it ALL. And managers should find a balance here.
Never Lose Control
After leaders decide how the company is going to create a use for customers, organize business and strengthen competitive advantages, they have to gain control upon their company. This does not mean becoming a tyrant (though a lot of managers think it does). It rather means that everyone should know the company’s goals and get tasks moving the company towards them.
The business consists of many processes, so you probably know about the control process already. Recruiting, production and purchase processes require control. In this case, the control allows making sure about the product’s quality, about proper workers hired when they are needed, and about required materials are bought for acceptable prices.
Control and the data coming with it let managers lead the company.
Profits: You Should Have Them
Business exists to make money. Money earned through business can be counted in different ways. But regardless of how they are count, business has to make money: to get profits from its operations.
If the business gains more money from its activity then spends on bringing it to life during some time, people say it gets profits in that period. If it doesn’t, then they say about losses. The company can’t suffer losses for long, otherwise it becomes bankrupt.
The main goal of management is to get money for business owners. No matter how well managers do other tasks, but they say goodbye to their jobs quickly if they lose potential profits. Whatever business does additionally, its main goal is to get profits.
Remember “Big Five”
Memorize five main ideas resuming this article. Set them as your “big five” as they are the basis for everything the manager does. All your activities as a manager have one common purpose: to make these goals real for the company and its clients. To do this, the manager should:
- Help the company create value for clients;
- Support the company’s organization;
- Help the company reaching competitive advantages;
- Control business and its operations;
- Maintain profitable activity of the company.
As you probably know, managers have different abilities to manage. The most successful managers can support at least some of the principles above. A few managers that can be called great can do them all properly. Knowledge, talent and special instruments are what help them.