8 Branches Of Business Management
Although some may think of business management as a separate industry or profession, it is actually a diverse field that encompasses many sectors. Whether you're looking to start a career in business administration, start your own business, or earn a degree or certificate, this guide will help you differentiate between the many industries in this large sector and understand the role each plays within the organization.
What is business administration?
Business management covers how a business operates and achieves its goals. The business manager determines the necessary resources, coordinates all activities and makes decisions that will steer the ship in the right direction. It focuses on the bigger picture of business management rather than the details of day-to-day operations, focusing on communication and organization.
Among the qualities that make business leaders more successful are empathy and decisive conflict resolution. Business management tends to focus on people. Success comes from developing people, as business managers assign the right people to each specific role and project, aiming to reach their full potential and utilize their unique skills.
By managing a business, you oversee the roadmap, plan, train, delegate, and direct your company's leaders to get the job done and achieve all goals. This aspect of the job ensures team harmony by setting clear expectations and creating unity in your leadership. The main components of this area are strategy development, critical thinking and problem solving. With greater insight, business managers solve problems and make decisions to keep the company stable and growing.
Types of project management
There are many branches of business administration. Here is an overview of the eight sectors in this broad area:
1. Financial management
Financial management is a complex and broad sector that includes budget planning and cash flow management, as well as overseeing all financial procedures, such as processing invoices and distributing reports. This type of business management includes planning, directing, and coordinating a company's accounting, investment, banking, insurance, securities, and other financial activities.
The three main 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 includes cash management, inventory management, and accounts receivable management. Methods of estimating and making financial decisions belong to this type of business management. Financial management is concerned with finding the right balance between profit and risk so that even if a business fails, it will be profitable in the long run. Determining the value of your business will help you fully understand its growth and financial strength.
2. Marketing department
Marketing management focuses on the practical application of marketing methods and the management of marketing resources and business activities. The four main areas of marketing management are company analysis, employee analysis, competitor analysis, and customer analysis. Marketing management includes brand management and marketing strategy and pricing.
To maximize your return on investment, it's important to develop branding skills and apply marketing tactics based on a comprehensive analysis of all aspects of your business. The scope of business marketing management depends on the size and industry of the business. Effective marketing management uses the company's resources to grow the customer base, increase customer feedback and feedback, and increase the company's perceived value.
Tip: Study management theory to determine which best practices to use in your company.
3. Sales management
Sales management includes the supervision and management of the sales department. As a sales manager, you empower salespeople to build strong relationships with prospects, convert them into prospects, and move them down the sales funnel. The sales department often works together with the marketing department. The sales manager sets the tone and keeps everyone connected by setting team goals, strategizing, and coaching each salesperson along the way. Building a strong sales team depends on hiring, training and leadership.
Sales management also includes defining success metrics and evaluating key performance indicators to inform company performance. Salesforce provides powerful sales management tools for your business to track, report and manage customer relationships (CRM). [cm. our Salesforce CRM review .]
This system provides business owners with a data-driven approach to managing sales by tracking customer history, providing insights and forecasts.
4. Human resources management
Human Resource Management (HRM) focuses on recruiting and managing employees in an organization. This includes general compensation, employment, safety, health, benefits and other aspects of personnel management.
A common misconception about human resource management is that it is solely the responsibility of the Human Resources (HR) department or an individual. In fact, all department heads must understand that effective human resource management allows employees to effectively and productively contribute to the company's overall direction and goals. In the past, human resource management focused on HR management, but modern approaches to human resource management use employee software to positively impact employees and the business as a whole.
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5. Strategic management
Strategic management is the application of strategic thinking to the management of an organization. Many other areas of business administration are related to strategic management, as business success is often determined by financial, marketing and operational strategies.
Strategic management focuses on the big picture of the business: where do you want to be and how will you get there? Strategic management is adaptive, incorporates competitive strategies and maintains organizational relevance. An important component of strategic management is the formulation of organizational goals, taking into account external factors such as organization, competition and technology.
There are five phases of strategic management: goal setting, SWOT analysis, strategy development, implementation and evaluation. In this process, the organization determines hiring, resource allocation, how success is measured, and accountability for each task. Strategic management is an ongoing job because you need to periodically evaluate your strategy and adjust it as needed.
6. Production management
Production management is decision-making related to the production of products or services. Production management methods are used in manufacturing and service industries. This type of business management deals with the transformation of raw materials into finished products or services, which is why this sector is often referred to as the four M's: machines, methods, materials and money.
One of the main directions of production management is to ensure production efficiency, including inventory management and employee training. Inventory management is the most important responsibility of a product manager and includes the tracking of all production components, such as raw materials and finished goods.
Research and development (R&D) of the manufacturing process and the product itself is another important activity of the company's production management team. Companies that want to expand, reduce costs, and develop new and better products must engage in product management research and development.
7. Service management
Service management varies widely by industry and business. It is sometimes synonymous with IT service management, but the two sectors differ in several areas. First, service management involves automated systems and skilled workers, and often enables the development of services, even if they are not related to IT.
The main area of service management is the management and optimization of workflows to automate or support human decision making. Service management is about ensuring that service providers understand their services from both the company and consumer perspectives and that these services contribute to the desired outcomes for their customers. Regardless of the service, managed service providers must understand and manage the associated costs and risks, and the value and importance of the service to their customers.
8. Information technology management
IT management focuses on controlling and managing the technical resources of a business to meet its needs and priorities. Managers and IT teams ensure that the company's technology is aligned with the company's strategy. The three main elements of IT governance are IT configuration, IT maintenance and IT financial management.
IT management also includes achieving business goals while meeting customer expectations. IT managers must focus on individual components and deliver the service as a whole, using best practices to reduce costs and increase employee productivity. Information technology management includes the training and development of managers who can manage the planning, design, selection, implementation, use and management of new and converging information and communication technologies.
Additional reporting by Max Friedman
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