Effective management is the key to the establishment and growth of the business. The key to successful management is to examine the marketplace environment and create employment and profit opportunities that provide the potential growth and financial viability of the business. Despite the importance of management, this area is often misunderstood and poorly implemented, primarily because people focus on the output rather than the process of management.
Business managers sometimes become absorbed in improving product quality, sometimes ignoring their role vis-a-vis personnel. The focus is on reducing costs and increasing output, while ignoring the long-term benefits of motivating personnel. This short-sighted view tends to increase profits in the short term, but can create a dysfunctional long-term business environment.
In large businesses, planning is essential for developing a firm's potential. However, many small businesses do not recognize the need for long-range plans. Nevertheless, the need for planning is as important in a small business as it is in a large one.
There is a need to manage both the External Environment and the Internal Environment. This article deals with some of the key Internal Environment issues.
1. Ensure open communications
Effective communications play an integral role in managing and operating any successful business. With open communications changes and their effects on the organization are quickly shared. Your firm then has the time and skills needed to respond to changes and take advantage of evolving opportunities
2. Balance schedules, stress, and personnel
Without organization and good management, the compressed time schedules associated with modern business can cause stress and make extraordinary demands on people. An effective management structure can reduce stress and channel the productive capacity of employees into business growth and profits.
3. Define duties and responsibilities
An organization is characterized by the nature and determination of employees' duties and responsibilities. While many organizations use different methods for determining these, it is essential that they be clearly defined. The core of any organization is its people and their functions. Duties, tasks and responsibilities often evolve in an ad hoc manner. A typical firm starts with a few people, with often one person performing most duties. As the firm grows, others are hired to fill specific roles often on a functional basis. Roles that were handled by consultants and specialists outside the firm now are handled internally. As new needs emerge, new roles are developed.
4. Control conflict
Another key to successful management lies in controlling conflict. Conflict cannot be eliminated from either the business or the interpersonal activities of the enterprise. A measure of the organization's success is the degree to which conflict can be exposed and the energies associated with it, channelled to develop the firm.
5. Establish authority
The central element of organizational management is authority. Through authority your firm develops the structure necessary to achieve its objectives. The authority that once was conferred by either owning a small business or having a position in the bureaucracy of a larger firm has been replaced by technical competence. Once the owner-manager controlled the entire business, but suppliers, customers, unions and the government have severely limited the ability of the business owner-manager to take independent action. A primary component of authority is the exercise of control within the organization. A thorough system of controls ensures the firm's operation and provides a mechanism for imposing authority.
Successful management is founded on the mastery of a myriad of details. While management schools teach the importance of focusing attention on major issues affecting the business, practical managers realize the major issues are the variety of small aspects that form the business. In an increasingly structured society, inattention to even one minor detail can result in significant disruption of the business or even its failure.