Although some people view business management as a distinct industry or profession, it is actually a diverse field that encompasses many industries. Whether you want to start a career in business management, start your own business, or earn a degree or certificate, this guide will help you distinguish between the many industries in this large sector and understand the role each plays in an organization.
What is business management?
Business management is about how a business operates and achieves its goals. The business manager identifies the necessary resources, coordinates all actions, and makes decisions that direct the ship in the right direction. Business management focuses on the big picture, communication, and organization rather than the day-to-day operational details.
The qualities that make the most successful business managers include empathy and decisive conflict resolution. Business management is often people-oriented. Success comes from people development, as Business Managers assign the right people to each role and to specific projects so they can reach their full potential and utilize their unique skills.
In running a business, you oversee the roadmap, plan, coach, delegate, and mentor your company's leaders to complete the task and achieve each goal. This aspect of the job ensures alignment between teams by creating clear expectations and building unity under your leadership. The main components of this field are strategy development, critical thinking, and problem solving. With a broader vision in mind, business managers face challenges and make decisions so that the business can maintain stability and achieve growth.
Types of business management
There are many areas of business administration. An overview of eight industries in this broad field:
1. Financial management
Financial management is a broad and complex field that includes budget planning and cash flow management, as well as overseeing all financial procedures, such as processing invoices and distributing information. This type of business management involves planning, directing, and coordinating a company's accounting, investing, banking, insurance, securities, and other financial activities.
The three main elements of financial management are financial planning, financial control and financial decision making. Short-term financial management is often called "working capital management" and is concerned with cash management, inventory management and accounts receivable management. This type of business management includes valuation and financial decision-making techniques. Financial management is about creating a healthy balance between profit and risk so that the business is profitable in the long run, even if it fails. Determining the value of your business will help you fully understand its growth and financial potential.
2. Marketing Department
Marketing management focuses on the practical application of marketing methods and the management of marketing resources and business assets. The four main areas of marketing management are company analysis, employee analysis, competitor analysis, and customer analysis. Marketing management includes brand management as well as marketing and pricing strategy.
To maximize your return on investment, it is important to develop branding skills and apply marketing tactics based on an in-depth analysis of all aspects of your business. The scope of marketing management in a business depends on the size of the business and the industry. Effective marketing management uses company resources to increase the customer base, improve customer feedback and reviews, and improve the perceived value of the company.
Tip: Study management theories to determine the best practices to use in your business.
3. Sales management
Sales management involves supervising and managing the sales department. As a Sales Manager, you encourage salespeople to strengthen relationships with potential customers, convert them into leads, and move them up the sales funnel. Sales management often goes hand in hand with marketing management. Sales managers set the tone and keep everyone on track by setting goals for the team, setting strategies, and coaching each salesperson along the way. Building a strong sales force depends on hiring, training and leadership.
Sales management also involves defining indicators of success and evaluating key performance indicators to report on company performance. Salesforce provides your business with powerful sales management tools for tracking, reporting, and managing customer relationships (CRM). [cm. Salesforce CRM Review .]
These systems provide business owners with a data-driven approach to managing sales by tracking customer history and providing insights and forecasts.
4. Human Resources Management
Human Resource Management (HRM) focuses on hiring and managing an organization's employees. This includes general compensation, employment, safety and welfare, benefits and other aspects of people management.
A common misconception about human resource management is that it is the responsibility of the human resource department (HR) or the individual alone. In fact, all department heads must understand that effective human resource management enables employees to contribute efficiently and productively towards the company's direction and overall goals. In the past, human resource management focused more on managing human resources, but the modern approach to human resource management uses employee software to positively influence both individuals and the company as a whole.
Did you know? Find the best HR software to help you manage all of your HR needs, so you can focus on growing your business.
5. Strategic management
Strategic management is the application of strategic thinking to the management of an organization. Many other areas of business administration revolve around strategic management, as a company's success is often driven by financial, marketing, and operational strategies.
Strategic management focuses on the big picture of the business: Where do you want to be and how do you get there? Strategic management is adaptive, involves competitive strategies and innovates the organization. The most important component of strategic management is the formulation of the objectives of the organization, taking into account external factors such as organization, competition, and technology.
There are five phases of strategic management: goal setting, SWOT analysis, strategy development, implementation and evaluation. During this process, the organization determines the procurement and resource allocation, how success will be measured, and who will be responsible for each activity. Strategic management is an ongoing effort because strategies must be regularly evaluated and modified as necessary.
6. Production management
Production management is the process of making decisions about the production of products or services. Production management techniques are used in both the manufacturing and service industries. This type of business management is concerned with the transformation of raw materials into a final product or service, and thus this industry often refers to the four elements: machines, methods, materials and money.
One of the main areas of production management is ensuring production efficiency, which includes inventory management and staff training. Inventory management is the most important responsibility of product managers and involves keeping track of all components of production such as ordered materials and finished goods.
Another important activity of the production management team is research and development (R&D) of both the production process and the product itself. Companies looking to expand, reduce costs, and develop new and better products must conduct research and development as part of product management.
7. Service management
Service management varies widely across industries and companies. Sometimes it is synonymous with IT service management, but the two fields differ in several areas. First, service management typically involves both automated systems and a skilled workforce, and often provides service development, even if it is not related to IT.
One area of service management is workflow management and optimization to automate or support human decision-making. Service management is what enables a service provider to understand its services from the perspective of the organization and the customer, and to ensure that the services contribute to the desired outcomes for their customers. Regardless of the service, managed service providers must understand and manage the associated costs and risks, as well as the value and importance of the services to their clients.
8. Information technology management
IT management is about controlling and managing a company's technological resources to meet its needs and priorities. IT managers and teams ensure that the company's technology is aligned with the company's strategies. The three main components of IT management are IT configuration, IT services, and IT financial management.
IT management also involves achieving business goals and meeting customer expectations. IT managers must focus on individual components and provide comprehensive services using best practices to reduce costs and improve employee efficiency. Information technology management involves the education and development of managers who can manage the planning, design, selection, implementation, use and management of new and emerging information and communication technologies.
Additional reporting by Max Friedman