The discipline of business management looks at the relationships between managers and employees andhow work is organized. In this sense, business management often overlaps with organizational behaviour.
The field of business management arose largely as the result of the work of Henri Fayol and Frederick W. Taylor in the mid twentieth century. Taylor is the author of the theory of scientific management. In its simplest form, the theory is the belief that there is "one best way" to do a job and scientific methods can be used to determine that "one best way." Taylor suggests that knowledge should replace tradition and intuition when making business decisions. As well, if there is one best way of doing things, it would have to be the responsibility of the manager for enforcing that work was done by this standard. Today, we see Taylor's influence in the prevalence of shared best practices across businesses and industries.
Around the same time, Fayol proposed that there were five primary functions of the business manager. We often see these five functions simplified to planning, organizing, leading and controlling. Since Fayol's seminal work, the study of business management has continued to be focused predominantly on the skills and resources managers need in order to carry out these functions as a manager successfully. Along with Taylor's ideas of shared best practices, business schools have focused significantly on how these skills can be developed and used most effectively. In their originality, the five functions of a business manager are:1
- Planning: setting the vision, mission, values, and strategy (or action) of the organization.
- Organizing: defining the lines of authority and the division of responsibility
- Coordinating: developing the timing and sequence of activities and making sure it all works (project management, for example)
- Commanding or directing: putting the plan into action - leadership skills are a must!
- Controlling: enforcing the rules, monitoring performance, and adjusting standards and plans as needed.
Forecasting is often added to the list as the first management function. There is also an important seventh function of management: the information function. According to Peter Drucker, "[successful business managers] need to learn to ask two questions: what information do I need to do my job? - and what information do I owe others so that they can do their job?" As a result, we recognize that managers play an important role in facilitating the manipulation, sharing, aggregating and presenting of useful information about the business and its environment across the organization.2
Today, business managers need a number of different skills in order to carry out management's function: decision-making skills, leadership skills, communication skills, the ability to manage diversity, networking skills, the ability to design and implement business policy, change management skills, and project management skills. This is not to limit the manager's toolkit to these skills alone. For example, the field of organizational behaviour also offers significant insight into the role of a business manager.
Important trends have also impacted this discipline. These trends date back to the G.I. Bill following World War II, which granted free education for veterans and set a strong foundation for American’s growth into knowledge-based industries. These trends include globalization, outsourcing, technology, ethics, diversity, and flattening organizational structures and the use of teams. For example, because of globalization, additional skills are also needed by the international business manager, such as understanding international business cultures. The study of business management is continuously evolving as a result of these trends, and significant attention is paid to how these trends are impacting the management field.
1. Fayol, H. (1949), General and Industrial Management, Sir Isaac Pitman & Sons Ltd., London, (translated by Constance Storrs).
2. Bakewell, K. G. B. (1994). Information: The Seventh Management Function? Library Management. MCB University Press: Vol 15:3. p 28-33.
For a look at a Fayols work and a number of contemporary models of management (Hales, Kotter, Mintzberg), see also: Fells, M. (2000), Fayol stands the test of time: Journal of Management History, January 2000, 6(8), p. 345-360.
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