Importance of Management in a Business
All of us have seen, heard, worked under or been part of a management one time or other. But have you ever wondered what makes management such an integral part of any activity? The roots of the word ‘management’ can be traced back to the Latin word ‘manu agree’, which means ‘to lead by hand’. This shows that effective management is one which actually guides the employee onto a path of efficient and productive work while leading by example. Thus we can safely conclude that a good manager will not ask employees to do something that he/she may not do himself/herself. In true sense, effective management involves directing and organizing people or resources under one’s influence, to ensure better coordination, productivity and best possible positive output in any field. Whether it is a singular person managing at a small scale or multiple persons involved in large scale operations, the overall impact of good management is always the same, that of exponential profit.
Let’s look at some key points which make management important to any process in a business:-
Achieving Company Targets
- Help your front line deal with price objections.
- Increase your average order value.
- Know your customers.
- Be business intelligent.
- Focus on your existing customers.
- Re-generate the accounts that have stopped trading with you.
- Target profitable new business
When a company begins its operations, specific goals are setup which can only be achieved if all the parts of the organization function together and efficiently. Proper management makes sure that each part of the company works towards achieving a common goal without disarray. Management actually plans, executes and balances the resources of a company in such a way that there is maximum work output to attain the goals of organization swiftly, while retaining work quality. In absence of proper management, different sections go on to attain individual targets. However, common goal may not be achieved, which would further lead to delays, losses and low quality output.
Reduction In Wastage
When resources of a company are effectively managed, wastage is reduced, thereby lowering overall costs and attaining the state of ‘resource optimization’. This means that company is making profits not only from output, but also from better and optimum use of input. Proper utilization of resources and reduced wastage prevents both under employment and exploitation of resources. Management can identify resources which are scarce and find alternatives for the same, thus reducing the cost again.
Simplifies The Organizational Structure
Management controls effective work division, specialization and resource allocation. This creates a uniform flow of work and specifies boundaries of responsibilities, authority and rights, which do not overlap. This structure is necessary, as it clarifies to each employee his position and field of influence in the organization. In such a scenario, every employee would know his/her basic rights, duties, immediate superiors and subordinates, along with the knowledge of opportunities awaiting him, as his relation with the company grows.
The company should be maintained in such a fashion that external market turbulences do not hamper the company’s functioning. This requires effective changes that need to be made in the company, without hurting the company’s stand or its workers too much. Without proper management this will not be possible. Management will provide increased stability and adaptability to the company, helping it survive market conditions and grow with time. Also, the workers would not be apprehensive about losing their job, which would, in turn, help them work with peace of mind.
Provides The “Feel Good Factor”
It is extremely important to keep the workers happy for the successful functioning of the company. A company which is managed with efficacy prospers rapidly and, in turn, produces better revenue, thereby opening avenues of growth for the workers involved. The upward climb in the growth chart assures the workforce of not just better salaries, but better positions, which provides motivation for better work.
This is a cumulative effect of all of the benefits mentioned above. Proper management helps to build efficient organizational structure, set targets that are testing yet achievable and optimize resource utilization. Such a scenario increases profits by maximizing productivity and reducing costs. Happy and de-stressed workers work with more zeal and enthusiasm. This increases quality and quantity of output, which aids in the growth of the company, beating the competition and emerging out victorious!
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