6 Business Management Principles: A Comprehensive Guide

In the business world, there are six essential areas of management that are necessary for success: strategy, marketing, finance, human resources, technology and equipment, and operations. Knowing how these areas interact is essential for running a successful business. A mission statement is a concise document that outlines the mission, vision, and values of a company. The mission is the reason why the company exists, the vision is what the company strives to achieve for both those it serves and itself, and the values describe how the company behaves.

It's important for all stakeholders to understand and accept the company's mission statement. To assess the health and performance of a company, key quantitative metrics must be monitored regularly. Systems should be in place to provide this information quickly and efficiently. Additionally, customers should experience the same consistent sales experience regardless of who serves them.

This consistency is achieved through documented processes and procedures that are applied. Henri Fayol was the father of modern operational management theory. He worked for 28 years to improve his own management techniques to improve the working conditions of miners in France in the 1890s. He wrote a book entitled General and Industrial Management on his own management theory, Fayolism, to teach other managers how to lead a team.

His ideas are still relevant today. Developing and executing a strategy isn't easy, but there are some timeless management principles that have guided teams to success over the past 100 years. Discipline is key - both for employees and managers. Employees should have the skills and training to do their jobs, understand their role in the organization, and have tasks that align with their skills, passions, and goals. Managers should earn respect from their employees so they feel motivated and genuinely interested in following them. It's also important to diversify ideation processes with different perspectives from employees.

This can generate ideas that are more creative and effective than those from just a few minds. Communication is also essential - messages from low-level managers should reach the top of the communication chain without becoming irrelevant.

6 Guiding Principles for Strategy Management

  • Understand Authority Levels: The most successful organizations clearly understand the level of authority of each team and its employees, and everyone must respect the hierarchy.
  • Centralize or Decentralize: When a company is centralized, higher-level management has all the decision-making power. Balance this with innovation that reinforces the core and broadens the business base.
  • Understand Business Operations: Understand key aspects of business operations such as capacity planning, productivity analysis and improvement, quality control.
  • Set Clear Objectives: As a manager, you must set clear objectives for your team, document your action plan, and monitor progress.
  • Encourage Employee Ideation: There are more employees than managers in a company so diversifying your ideation process with different perspectives can generate more creative ideas.
  • Ensure Communication Reaches Top Level: Make sure messages from low-level managers reach the top of the communication chain without becoming irrelevant.
Refining the foundations of modern management isn't easy but following these principles can help you take advantage of strategy management. By understanding these areas of business management and how they work together, you can run a successful business.