Business management is the discipline that studies the relationships between business administration, production processes, and elements of cost, quality, logistics, and distribution, among others. Its objective is to guarantee and continuously increase the effectiveness and competitiveness of a given organization or corporation.
In other words, it is about applying constant innovation, from every point of view to the world of business administration, as defined by the prominent Austro-American economist Joseph Schumpeter (1883-1950). In a strict sense, it is a specific branch of business administration, often called Business Management today.
Business management goes hand in hand with the ever-changing world of technology and finds in dynamics such as automation, computing, and new technologies a set of usable tools for updating and improving business performance in its different facets and levels.
Origin of business management
Although its antecedents can be traced in one way or another to any form of organization or company throughout history, this discipline took its first formal steps in the first half of the 20th century (academically in 1933 in Madrid, Spain), especially in the public sector and the military.
Its application to the private field came immediately, especially from the hand of specialists in certain productive stages, such as the Japanese Kaoru Ishikawa (1915-1989), one of the main exponents of the scientific or systematic method of constant improvement of administrative processes. This process of continuous improvement in the quality sector is known by the Japanese name of Kaizen.
Importance of business management
Business management is a very broad discipline, to which more and more attention has been paid in contemporary times. This is due to the growing demand in the business world for professionals capable of (re) thinking about the business world according to the changing needs of the time, which requires experience or, failing that, academic training.
Thus, as the business world demands more and better professionals to direct it and guarantee its survival, business management is a fundamental discipline when it comes to updating or updating production processes.
Business management functions
Like other similar disciplines, business management focuses on the analysis of the organizational structure, attending to the different aspects that can be improved upon. For this, it usually emphasizes the four basic points of any production process:
- Planning. The prior provision of the objectives to be achieved, the methods, and other characteristics of the business project.
- Organization. The ideal distribution of the company’s resources, taking into account their similarities, differences, destinations, and other usable factors.
- Communication. The exchange of data and relevant information between the different parts of the organization, and also with the outside.
- Control. Making strategic decisions based on the dynamics of feedback ( feedback ) possible from the information emanated from the same production process.
Business management techniques
Business management is put into practice through a set of techniques applied to the different administrative processes of the organization, to guarantee the viability of the business initiative in the long term. Some of these techniques are:
- Strategic analysis. It consists of the review of the social, political, and economic environment in which the company is inserted, to identify external scenarios that may affect its performance.
- Organizational management. Focused on the administrative process, it consists of the review of the business structure for the future, to plan the dynamics that the organization will need to approach the goals set.
- Information technology management. It consists of the study of the communication strategies of the company, from the point of view of the new ICTs or advanced communication platforms.
- Financial management. It consists of the review of the processes of obtaining, managing, and investing capital of the company, to achieve the greatest possibility of performance in the short, medium, and long term.
- Management of human resources. It consists of the review of the strategies for obtaining and maintaining the organization’s personnel, from the point of view of the human and professional improvement of the company.
- Environmental management. It consists of evaluating the performance of the company in the face of environmental needs or the physical environment in which it is located: pollution, social responsibility, etc.
- Operations management. It consists of the study of the logistics, supply, and distribution processes that are specific to the company, and that usually involve raw materials, energy, supplies, routine services, etc.