Business management and finance
Business management is an umbrella term for any leadership activity that impacts how a company functions and achieves its goals. Business management is the process of planning, organizing, directing, and controlling the activities of a business or organization to achieve its goals and objectives. It involves overseeing all aspects of a business, from finance and operations to marketing and human resources.
Business managers must be skilled in leadership, communication, and problem-solving, and must be able to make strategic decisions that drive the success of the organization.
Business management is the discipline of overseeing and supervising business operations, processes, and resources to achieve organizational goals and objectives. It involves planning, organizing, directing, and controlling resources, including people, finances, materials, and technology, to efficiently and effectively achieve the desired outcomes.
Role of business manager
The role of a business manager usually includes making strategic decisions, allocating resources, and creating policies that guide the company’s daily operations. Managing a business encompasses various aspects of business administration, including finance, accounting, human resources, marketing, operations, and logistics.
A successful business manager must have excellent leadership skills, communication skills, problem-solving skills, and the ability to make sound decisions. But it is not enough. They also need to have industry-specific knowledge, including technical, business, and commercial fundamentals (for example: understanding market trends and customer needs)
It is a diverse field comprising many areas. Roles that fall under business management are more focused on the bigger picture rather than day-to-day operational details, with an emphasis on communication and organization.
Whether you’re looking to launch a career in business management, start your own business or pursue an advanced degree or certification, this guide will help you distinguish among the many branches of this large sector and understand the role each plays in an organization.
Every Organization Needs Leaders
Not everyone can be a leader or manager at work, and many people don’t want the responsibilities of overseeing employees and processes. Fortunately, others feel called to work in management roles and want to make a meaningful impact on their teams and their employers.
Some managers go through company training to learn the skills they need. Others who are new to management “learn by doing,” having to figure things out as they go. Some entry-level managers start the job with formal management education under their belts, which helps them be more confident in their supervisory roles.
Main areas of business management
There are several main areas when we talk about business management, which includes:
- Strategic Management: involves setting the organization’s overall direction and making long-term plans to achieve the company’s goals and objectives. This involves analyzing the external environment, identifying the company’s strengths and weaknesses, and developing strategies to position the company for success.
- Financial Management: involves managing the financial resources of the organization, such as budgeting, forecasting, financial analysis, and managing investments.
- Marketing Management: involves identifying and understanding customer needs, developing and implementing marketing strategies, and managing the promotion and distribution of the company’s products or services.
- Operations Management: involves managing the processes and systems that produce and deliver the company’s products or services. This includes supply chain management, production management, and logistics.
- Human Resource Management: involves managing the company’s employees, including recruitment, hiring, training, development, performance evaluation, and compensation.
- Information Technology Management: involves managing the company’s technology infrastructure, including hardware, software, and data management, to support the company’s business goals.
- Risk Management: Risk management involves identifying and managing the risks that the company faces, such as financial risks, legal risks, and operational risks. This includes developing risk management plans and implementing strategies to mitigate risk.
Types of business management
There are many branches of business management. Here is an overview of the eight sectors in this wide field.
1. Financial management
Financial management involves budget planning and cash flow management as well as the oversight of all financial procedures, such as invoice processing and data distribution. This type of business management involves planning, directing and coordinating the accounting, investing, banking, insurance, securities and other financial activities of a business and often overlaps with human resources management when determining payroll and benefits budgets.
The three key elements of financial management are financial planning, financial control and financial decision-making. Short-term financial management is often referred to as “working capital management,” and it relates to cash management, inventory management and debtor management. Both the assessment and technique of financial decisions fall under this type of business management.
Financial management also deals with finding a healthy balance between profit and risk so that even with a setback, the business is profitable in the long term. According to Lizette Fallon, director of finance and operations at Wellspring Center for Prevention, cash flow management is the most important activity her department handles.
2. Marketing management
Marketing management focuses on the practical application of marketing techniques and the management of a company’s marketing resources and activities. The four major areas of marketing management are company analysis, collaborator analysis, competitor analysis and customer analysis. Marketing management includes brand management as well as marketing strategy and pricing.
A marketing director and consultant, said that while driving company revenue is an important function of marketing, managers also need to take ownership of the brand, especially brand messaging and cross-departmental alignment.
Sales will talk about the brand one way, customer success will talk about it another and then marketing has their own way of talking about it, she explained. Marketing needs to own that brand messaging and ensure every single message that goes out to customers and prospects is in alignment to what is true to the brand.
3. Sales management
Sales management involves leading sales teams to foster strong relationships with prospects, convert them to lead and move them through the sales pipelines. Sales management often works hand in hand with marketing management to ensure consistent messaging and goal alignment when generating new business.
Sales management also involves determining the metrics for success and assessing key performance indicators to report on the company’s performance. Tools like Salesforce offer powerful sales management tools to help your business with tracking, reporting and customer relationship management.
4. Human resource management
Human resource management (HRM) focuses on the recruitment and management of an organization’s employees. This includes total compensation, hiring, safety and wellness, benefits and other aspects of employee administration.
Effective HRM enables employees to contribute effectively and productively to the overall direction and goals of the company. The modern approach to human resources uses employee programs to make a positive impact on both the staff and the business as a whole.
According to Kris Kildahl, chief people officer of Certinia, HRM’s core function is connecting people to strategy. “People are our most valuable asset,” said Kildahl. “They partner with our customers to deliver value, they drive innovation and they are the heartbeat of our culture. They also represent the highest cost to the business, so making sure that we have the right people highly engaged and doing the most important work is key to success.
5. Strategic management
Strategic management, which is typically the responsibility of a company’s top executive leaders, is the application of strategic thinking to the job of leading an organization. Many of the other branches of business management revolve around strategic management because the success of a business is often determined by financial, marketing and operational strategies.
Ronak Sheth, CEO of Pricefx, said the most important function of strategic or executive management is building a strong leadership team with people who are talented, proactive and have a passion for excellence.
“I prioritize selecting those who embody our core values of being fast, flexible, friendly and fair,” said Sheth. “This combination of skill, passion and alignment with our values ensures that we operate efficiently and are well-equipped to overcome challenges with resilience and drive.”
6. Product management
Companies that sell physical or digital products need product managers to coordinate efforts among departments to develop, launch and continuously improve their offerings.
Effective product management requires leaders to think strategically and apply both market research and a technical product understanding to their work. Using customer data and feedback, a product manager has to prioritize features that maximize the product’s value to consumers while ensuring production is efficient. This may include collaborating with other departments on inventory control, research and development (R&D), and employee training.
“It is critical for product departments to know their customers and markets inside and out,” said Brendan Fortune, director of product management at Customer.io. “We can only afford to aim product development at the most valuable opportunities.”
7. Operations management
Operations management involves overseeing and designing operational processes to make a business more efficient. The goal of this department is to balance cost efficiency with quality so a company can deliver its products or services as effectively and profitably as possible.
Effective operations management requires a deep understanding of how different processes within a company interact and contribute to overall business goals. James Nartey, a member of the business operations team at Hiedberg, defined operations management as a broad category ranging from project management to strategy to day-to-day business operations.
The most important function for operations management, said Nartey, is setting a company up for success. “Ultimately, everything we do ensures that our sales and delivery teams have the tools, guidance and support to give their best to our customers,” he said.
8. Information technology (IT) and service management
IT and service management both work to align a business’s technology and services with its strategic goals and customer expectations.
IT management focuses on overseeing and optimizing technology resources to ensure they support the company’s objectives. IT managers are responsible for planning, designing, implementing and administering the company’s technology infrastructure to meet current and future demands. Service management can overlap with IT management but may also encompass the development and delivery of non-IT services.
IT and service management involve managing workflows, which often means combining automated systems and skilled labor to make processes and decision-making more efficient. Leaders in this branch of management may also collaborate with product managers, especially on customer-facing technologies.