Basics of Business Management

Management involves handling and controlling the activities of men, machines, material, and money effectively and efficiently. Efficiency refers to getting the maximum output from the available scarce resources, i.e., “doing things right.” Effectiveness refers to “doing the right things” to achieve desired business objectives.

Every organization works towards achieving some common goals and formulates methods to achieve them. Managers are the people within the organizations who play a vital role towards achieving these goals by monitoring and controlling the organizational activities.


It is the process of planning, organizing, leading, staffing, and controlling the activities of various resources within the organization through systemic, coordinated, and cooperative human efforts to achieve business objectives.

Functions of Managers

They typically perform five basic functions within an organization:

It is the process of selecting goals for the organization and designing necessary programs to achieve them. This helps managers to decide the activities to be performed with available resources.

It is the process of assigning and allocating tasks, authority, and resources for enabling the firm to achieve its organizational objectives.

This involves manning the various positions created by the organizing process. It involves activities such as identifying workforce requirements, recruitment, selection, and orientation of new employees.

It involves directing, influencing, and motivating employees towards achieving organizational objectives.

The main elements of the control process include establishing the standards of performance, measuring the actual performance, comparing the actual performance with the standards, and taking corrective action in case of deviation.

Organizational Hierarchy

The size of the organization determines its structure. Responsibilities of a manager differ according to his or her position in the hierarchy. Management can be categorized into three major levels:

The top-level management is responsible for the overall activities of the organization. It establishes plans and goals that influence the business in entirety. Professionals in this category are few in number and mainly occupy the posts of Chief Executive Officers, Chairman, President, Vice-president, Director, etc.

These professionals are directly responsible for managing the performance of first-level managers. They are responsible for the operational efficiency of various departments in an organization. They hold designations such as Department Heads, Project Leader, Plant Manager, and Divisional Head.

Managers at the first-level have the responsibility to manage the performance of the non-managerial personnel in an organization and ensure implementation of operational plans. They are also called supervisors. They are given different titles in different companies, like Foremen, Clerical Supervisor, Technical Supervisor, etc.

Management Skills

There are four essential skills that are needed by a manager. They are as follows:

Technical Skills
A person’s ability to use methods, processes, and procedures in a specialized field is known as a technical skill.

Human Skills
They refer to the ability to work with other people as individuals and in groups. They help employees to communicate, motivate, lead, and inspire others in an organization. These skills are equally important for all the levels.

Conceptual Skills
These are the skills that are required to conceptualize abstract and complex situations. They are essential for top-level managers, as they need to possess a clear understanding of the overall functioning of the organization and relate it to the external environment.

Design Skills
These are required by top-level managers to find solutions to problems in a manner that would benefit the organization. These professionals should suggest a rational and feasible solution to a problem apart from recognizing it.

Managerial Roles

In today’s turbulent times, a manager has to perform different roles every day, whether it is training his team or handling clients. He has to remain flexible and calm to carry out these roles, irrespective of the situations and tasks. According to management expert, Henry Mintzberg, a manager’s functions can be categorized into ten primary roles, classified under the following three categories:

Interpersonal (Figurehead, Leader, Liaison)
Informational (Monitor, Disseminator, Spokesperson)
Decisional (Entrepreneur, Disturbance Handler, Resource Allocator, Negotiator)

Let us understand each of these roles in the following part in brief:

As the name suggests, he is a person with authority and performs social and legal responsibilities.

This involves leading a team from the front, directing and managing the performance of individuals in a team, and choosing and training new employees.

This responsibility emphasizes the importance of networking and building relations within and outside the organization.

This involves gathering industry-related information for bringing in favorable changes, in the business or at the workplace. This also includes tracking team performance individually and combinedly.

This role encompasses the task of presenting and communicating critical information to the team within the organization.

In this role, a manager represents his organization and communicates its goals and agendas to industry-related outsiders; for example, in a conference meet, etc.

This involves envisioning new ideas and choosing the best ones for the progress of the business.

Disturbance Handler
An organization or team is always vulnerable to unexpected setbacks, and this is where a manager should come to the rescue. This role emphasizes taking charge, handling disputes or problems within the organization, and coming up with right measures.

Resource Allocator
Correct utilization of resources proves to be more beneficial for an organization than just collecting or having the same. In this role, the manager considers all the factors and determines where to use them, allocates funds, and assigns responsibilities to the staff for their effective usage.

As the name suggests, this role may require a manager to be a part of or direct negotiations within his team or organization.

Self-Managed and Self-Directed Teams

The service industry is getting more attention in the B-World. It has never been as easy to establish a company, I should say, a listed company. Production and operations companies have seen so many business management concepts for quality control and best team management practices including quality circles.

Emery suggested, “In designing a social system to efficiently operate a modern capital-intensive plant, the key problem is that of creating self-managing groups to man the interface with the technical system.”

The basis of the autonomous work group approach to job design is the socio-technical system theory that suggests the best results are obtained if grouping is such that workers are primarily related to each other by way of task performance and interdependence.

Charles Peguy described, “A man is not determined by what he does and still less by what he says. But in the deepest part of himself, a being is determined solely by what he is.” A self-management team is made of such persons who are motivated by self.


A self-managing team or autonomous work group is allocated an overall task and given discretion over how the work is done. It provides for intrinsic motivation by providing people autonomy and the means to control their own work, which will include feedback.

Self-directed teams are those that have been structured to manage and coordinate their own activities, and make many of the day-to-day decisions that would have traditionally been made by a supervisor or manager. They usually have responsibility for a complete piece of work (such as engine assembly) and they work quite closely and interdependently.

According to a research study, the TQM and mass-production organized groups did not improve customer service quality or sales volume. While self-managed teams improved sales by 9.4% and the quality of customer service by 6.3%.

In fact, comprehensive surveys report that 79% of companies in the Fortune 1000 currently deploy such “empowered,” “self-directed,” or “autonomous” teams. Because of their widespread use, much research has been devoted to understanding how best to set up such teams to maximize their effectiveness.

Understanding Multi-Skilled Teams Better

Self-managing teams incorporate the concepts of Hackman and Oldham’s job characteristics model:

Skill variety
Task significance
Task identity

Their features include:

The team enlarges individual jobs to include a wider range of operative skills.
It decides on methods of work and the planning, scheduling, and controlling of work.
It distributes tasks among itself, i.e., its members. It plans and guards the process on its own, solves daily problems, without having to consult a manager or supporting services.
It takes account of the social or group factors, and the technology as well as the individual motivators.
It maintains independent contact with others teams and staff.
It improves working methods on its own, and has all the relevant information available on the basis of which they evaluate their results.
Its members possess both, qualifications on the product they deliver as well as certain organizational qualities.

Self-Management Team Development

According to Vanessa Urch Druskat and Jane V. Wheeler, leading self-managed teams in an organization is a process that can be grouped into four basic functions.

Continually moving back and forth between the team and the broader organization to build relationships.
Scouting necessary information from managers, peers, and specialists.
Persuading the team and outside constituents to support one another.
Empowering team members through coaching, delegating authority, and exercising flexibility regarding team decisions.

Corporate Testimonials

“Whole Foods is very committed to the team structure and self-managing work teams; they’re like the basic cells of the company. The teams are empowered. They do their own hiring. They do their own scheduling. To become a team member at Whole Foods, you have to get voted on by your team after a trial period. If you don’t get a two-thirds vote, you don’t get on the team,” said John Mackey, founder of Whole Foods on this concept.

Hewlett Packard trusts and respects individuals focusing on high-level achievement and contribution, conducting business with integrity, achieving objectives through teamwork, and encouraging flexibility and innovation.