Sunday, 27 May 2012

The Four Basic Principles of Management

Introduction 

Management is always important even in your personal life, that ultimately point you to your destiny.  In business good management will help you keep the company on the mark.  Companies that does not have good management criteria usually go through "boom-bust" cycles ultimately ending up in bankruptcy.

The Four Management Principles 

Planning

"When one fails to plan, you plan to fail!" - Simply don't know who said that!
It goes to reason that 70% of the time that a "successful company" goes bankrupt is because there was a change in CEO or a change in management or both. This is the primarily reasons why stocks trade "slow" or is on a "loosing trend" when a company changes hands with another CEO.  The investors simply understand the importance of planning and they know that one CEO plans differently from one to another.  Keeping this in mind it is not the  "change in direction" that is the big problem.  It is ultimately the uncertainty of how well the new CEO plans that effects the stock of the company.

Organizing

It doesn't matter how good the plan is, if you fail to organize you'll end up the same way as if you have never planned.  Organizing is of vital importance because of it's preparation step before you move into execution mode.  It doesn't help there is a plan but nobody knows how to execute the plan.  This step is thus to make the company organized so that the plan can be executed with precision.

Leadership

Management from all levels should know what needs to be done, what team is responsible for the specific task, and when it should be executed.  Failing to communicate correctly and accurately can waste a lot of company resources and time and can lead into embarrassment.  This is why good leaders at all levels is a requirement and not a suggestion.  In a company if you have one employee who is not giving its best, it will not hurt the company but if a manager at any level doesn't communicate correctly the whole organization can be at risk.

Control

"Power is nothing without control" - Some advert
It stands to reason that if you set things in motion things "evolve" by themselves and in a organization this can lead to devastating affect.   One of the main things that can go wrong without proper control is the mission of the company and to keep the company to its core business structure.  Going of track from the companies main core business can lead to diversification into industries that the company doesn't really have a competitive edge in that ultimately delude the funds.

The key to keeping control is management and management structure.  There is not really a fail-safe plan to make sure that there is always control but to have a corporate culture that always communicates accurately.  

 Summery

The four principles of managements is the foundation of management but what set a good manager apart from a great one is communication skills.

Roundup
  1. Planning
  2. Organizing
  3. Leadership
  4. Control