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What is Business Management and Why It is a Great Career Choice?
“Management is a multi-purpose organ that manages the business and manages managers and manages workers and work.” This is how Peter F. Drucker, the father of modern management, explains the meaning of management in his book, The Practice of Management. According to Drucker, every business, regardless of industry or size, is established and run on certain assumptions. These assumptions are what Drucker calls “theories of business”. In brief, these theories and excellent management skills ensure effective management. Let’s understand in detail what is business management, and how gaining management skills can help you grow in your career.
In this blog, you’ll learn:
- What is Business Management?
- Benefits of Effective Business Management
- Difference Between Business Administration and Management
- Business Management Subjects to Learn
- Qualities of a Good Business Manager
- Role of Communication in Management
- How Has Managing a Business Evolved Over Time
What is Business Management?
The process of managing the overall functions of a business is called business management. These functions include planning, organizing, and directing a company’s resources to improve efficiency and achieve business goals. It is an umbrella term that encompasses the management of various business departments and activities. This includes finance, human resources, sales and marketing, and administration. In addition to this, effective management also requires adapting to changing business trends and industry requirements. It furthermore includes fostering strong relationships with customers and service providers and promoting a positive workplace culture. To sum up, it is about understanding and managing business activities to improve business growth and revenue.
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5 Benefits of Effective Business Management
The best indicator of the health of a business is its numbers. And only proper ‘management’ can improve the health of a business enterprise. If a business is being managed effectively, you will note the following signs:
- Improved Financial Performance: Effective management enables you to plan and implement financial policies for controlling costs, boosting revenue, and increasing profitability
- Increased Productivity: For effective management, all business processes are streamlined and made transparent; this creates a positive work environment and boosts overall productivity
- Enhanced Customer Satisfaction: An integral part of management is framing and implementing policies and processes to increase customer satisfaction and improve the customer retention rate
- Increased Employee Engagement: As management also focuses on improving workplace communication and promoting a collaborative environment, it helps companies retain talent
- Better Risk Management: Effective management enables the implementation of processes to identify and mitigate potential risks
ALSO READ: How to Chart a Successful Career in Business Management
Difference Between Business Administration and Management
The words business management and business administration are often used interchangeably but there is a fine line of difference between the two. Both, a business manager and an administrator, try to achieve the same goal: the smooth running of a company to achieve growth and add value. But there is a difference in their responsibilities and credentials.
Business administration is more about the technical aspects of the business, such as operations, finances, sales, and marketing — the day-to-day of running an enterprise. The skills required for this function are attention to detail, communication, collaboration, and a bunch of industry-specific core skills.
Business management has a clear focus on organizing and optimizing an organization’s resources, including talent. In general, it is more people-centric and depends heavily on soft skills. Also, strategy is a key aspect of managing a business. As a business manager, one has to think long-term and do risk assessments continuously.
In essence, business management is more strategy heavy while business administration is loaded with the execution of the strategy.
Business Management Subjects to Learn
The next step in learning what is business management requires understanding its essential elements and the role they play. These include:
- Planning: It is the process of establishing business goals, developing strategies, and creating actionable steps to achieve objectives in a competitive market
- Strategy: No business can survive without a well-thought-out strategy, making this one of the most important business management subjects
- Organization: A significant part of the business process is organizing defined roles and responsibilities, and processes and structures in an organization
- Analysis: For effective management, constantly monitor and evaluate business processes and control it to ensure the effective consumption of all resources
- Operations: Another key element of modern businesses is technological operations; it helps streamline various business processes and improve productivity
- Leadership: Driving the business with vision and steering its ship is an important function of management
Business Management Skills: What are the Qualities of a Good Business Manager?
Understanding what is business management is a lot easier than ensuring its practical implementation. Moreover, learn business management skills such as leadership and decision-making. Here are a few tips for developing an overall management skill set.
1. Focus on Decision-Making
Strategic decision-making is the essence of effective management. Make sound decisions by weighing the significant risks and advantages of every decision. In fact, to learn decision-making skills, identify business goals, do market research to find better alternatives, analyze data, and consider the consequences to make informed decisions.
2. Self-Awareness
Self-awareness involves assessing one’s strengths and weaknesses as a leader and identifying areas of improvement. It also helps improve relationships with employees and clients, boost focus and productivity, and lead to conscious decision-making. All of this ultimately contributes to effective management. Self-awareness also involves reflection on thoughts by evaluating past experiences and finding areas of improvement for better decision-making.
3. Pursue Management Training
Pursuing management training or courses is one of the best ways to learn the practical aspect of managing a business. Such courses enable one to work on numerous practical projects and engage with industry leaders.
4. Seek Mentorship
Running any business is a challenging task; it requires certain qualities and skills. One of the best ways to learn business skills is to seek mentorship from business leaders. Learn from their previous instances and the knowledge that they impart.
5. Consume Content Related to Business Management
Another great way to learn management skills is to study various strategies, skills, techniques, and approaches to running a business. Also, read books, podcasts, research papers, articles, and interviews of leaders to understand various management theories and how they can be implemented.
6. Gain Practical Experiences
Theoretical learning can help one gain industry insights and learn the latest trends. Evidently, gaining practical experience is the best way to learn. Also, take up management internships or jobs in startups for practical experience.
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What is the Role of Communication in Business Management?
Any discussion on what is business management is complete by specifying the importance of communication. In business management, communication refers to creating, conveying, and interpreting facts related to organizational efficiency, work performance, and goals. Effective communication between team members, managers, employees, and all other stakeholders is the key to organizational growth and improved management. Furthermore, communication is also essential for the exchange of ideas between team members. It improves transparency and keeps employees motivated as they know all strategies and actions. Eventually, communication in business management promotes a positive workplace culture. Effective communication enables employees to understand their individual and collective roles and responsibilities. As a result, it helps achieve business objectives and boosts organizational growth. Moreover, communication is critical for smooth organizational change management processes. It helps employees understand new roles, policies, or functions. To sum it up, efficient business management is only complete with effective communication within the organization.
How Has Managing a Business Evolved Over Time
Multiple management theories have emerged since the 1940s: downsizing, re-engineering, total quality management, and outsourcing. Business managers have used these theories for decades to bring organizational changes. However, while managers have found ways to do so, they often need help with what changes to make. Simply put, even if they know the process of making change, they need to be made aware of what changes must be made for organizational growth.
Current trends in business involve ensuring work flexibility for employees and automating tedious and manual business processes to improve overall efficiency. Businesses are leveraging the latest technologies like artificial intelligence, machine learning, and the metaverse to improve internal processes and increase customer engagement. In conclusion, irrespective of the career path, business management is a core skill that will help one advance in their career.
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Learn Business Management With Emeritus
As the business environment changes and consumer demands evolve, business management trends and skills will likely change. Emeritus’ business management courses can help professionals learn the nuances of what is business management and how to leverage the same to ensure career growth.
By Sneha Chugh
Write to us at content@emeritus.org
