Operative Management

Management in businesses and organizations is the function that coordinates the efforts of people to accomplish goals and objectives by using available resources efficiently and effectively.

The English verb “manage” comes from the Italian maneggiare (to handle), which derives from the two Latin words manus (hand) and agere (to act). While the Italian word maneggiare refers to subaltern responsibilities, the modern Italian language would characterize the work of an executive as gestire.

Management is the efficient and effective operation of a business. The major branches of management are financial management, marketing management, human resource management, strategic management, production management, operations management, service management and information technology management.

Owners may administer their businesses themselves, or employ managers to do this for them. Whether they are owners or employees, managers administer three primary components of the business’s value: its financial resources, capital or tangible resources, and human resources. These resources are administered in at least five functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resources.

Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. BPM attempts to improve processes continuously. It can therefore be described as a “process optimization process.” It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach.

When businesses need to raise money (called capital), they sometimes offer securities for sale. Capital may be raised through private means, by an initial public offering or IPO on a stock exchange, or in other ways. Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers’ compensation is determined, and when and how information is disclosed to shareholders and to the public.

Other types of capital sourcing include crowd sourcing on the internet, business angels, venture capital, fund investments, bank loans and debentures.

Management includes planning, organizing, staffing, leading or directing, and controlling an organization to accomplish the goal or target. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management involves identifying the mission, objective, procedures, rules and manipulation of the human capital of an enterprise to contribute to the success of the enterprise.

This implies effective communication: an enterprise environment implies human motivation and implies some sort of successful progress or system outcome. Based on this, management must have humans, communication, and a positive enterprise endeavor.

In profitable organizations, management’s primary function is the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers), and providing great employment opportunities for employees. In nonprofit management, add the importance of keeping the faith of donors. In most models of management and governance, shareholders vote for the board of directors, and the board then hires senior management.

Towards the end of the 20th century, business management came to consist of six separate branches, namely:

1. financial management
2. human resource management
3. information technology management (responsible for management information systems)
4. marketing management
5. operations management or production management
6. strategic management

In the 21st century observers find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject to management.

Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship. Note that many of the assumptions made by management have come under attack from business-ethics viewpoints, critical management studies, and anti-corporate activism.

All management embraces to some degree a democratic principle—in that in the long term, the majority of workers must support management.

Management operates through five basic functions: planning, organizing, coordinating, commanding, and controlling.

• Planning: Deciding what needs to happen in the future and generating plans for action (deciding in advance).
• Organizing: Making sure the human and nonhuman resources are put into place
• Coordinating (or staffing): Creating a structure through which an organization’s goals can be accomplished.
• Commanding (or leading): Determining what must be done in a situation and getting people to do it.
• Controlling: Checking progress against plans.

Management skills include:

• political: used to build a power base and to establish connections
• conceptual: used to analyze complex situations
• interpersonal: used to communicate, motivate, mentor and delegate
• diagnostic: ability to visualize appropriate responses to a situation
• leadership: ability to lead and to provide guidance to a specific group
• technical: expertise in one’s particular functional area.

Implementation of policies and strategies

• All policies and strategies must be discussed with all managerial personnel and staff.
• Managers must understand where and how they can implement their policies and strategies.
• A plan of action must be devised for each department.
• Policies and strategies must be reviewed regularly.
• Contingency plans must be devised in case the environment changes.
• Top-level managers should carry out regular progress assessments.
• The business requires team spirit and a good environment.
• The missions, objectives, strengths and weaknesses of each department must be analyzed to determine their roles in achieving the business’s mission.
• The forecasting method develops a reliable picture of the business’s future environment.
• A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.

Policies and strategies in the planning process

• They give mid and lower-level managers a good idea of the future plans for each department in an organization.
• A framework is created whereby plans and decisions are made.
• Mid and lower-level management may add their own plans to the business’s strategies.

Most organizations have three management levels: first-level, middle-level, and top-level managers. First-line managers are the lowest level of management and manage the work of non managerial individuals who are directly involved with the production or creation of the organization’s products. First-line managers are often called supervisors, but may also be called line managers, office managers, or even foremen. Middle managers include all levels of management between the first-line level and the top level of the organization. These managers manage the work of first-line managers and may have titles such as department head, project leader, plant manager, or division manager. Top managers are responsible for making organization-wide decisions and establishing the plans and goals that affect the entire organization. These individuals typically have titles such as executive vice president, president, managing director, chief operating officer, chief executive officer, or chairman of the board.

Top management

The top consists of the board of directors (including non-executive directors and executive directors), president, vice-president, CEOs and other members of the C-level executives. They are responsible for controlling and overseeing the entire organization. They set a tone at the top and develop strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public.
Helpful skills of top management vary by the type of organization but typically include a broad understanding of competition, world economies, and politics. In addition, the CEO is responsible for implementing and determining (within the board’s framework) the broad policies of the organization. Executive management accomplishes the day-to-day details, including: instructions for preparation of department budgets, procedures, schedules; appointment of middle level executives such as department managers; coordination of departments; media and governmental relations; and shareholder communication.

Middle management

Consist of general managers, branch managers and department managers. They are accountable to the top management for their department’s function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company’s policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance.
Middle management is the midway management of a categorized organization, being secondary to the senior management but above the deepest levels of operational members. An operational manager may be well-thought-out by middle management, or may be categorized as non-management operate, liable to the policy of the specific organization. Efficiency of the middle level is vital in any organization, since they bridge the gap between top level and bottom level staffs.

Their functions include:

• Design and implement effective group and inter-group work and information systems.
• Define and monitor group-level performance indicators.
• Diagnose and resolve problems within and among work groups.
• Design and implement reward systems that support cooperative behavior. They also make decision and share ideas with top managers.

Lower management

Consist of supervisors, section leaders, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, suggestions, and up channeling employee problems, etc. First-level managers are role models for employees that provide:

• Basic supervision
• Motivation
• Career planning
• Performance feedback

The Organizational Board represent the structured design of Command & Communication lines, top-down, bottom-up and side-way, within the management ranks and the corporate functions.