1 Principles of management

Principles of management

Management is a process requiring leading and directing an organization. It involves various sources such as human, material, intellectual, financial, and intangible (like brand).

Functions of management

Planning involves generating plans for actions, not just forecasting. It is about understanding how the company fits for the next stage, so as to shape the company in order to make it ready.

Organizing is about making the optimum use of the sources to reach success. Finding the right way is not forever; it requires changing. In such changes, small companies are in trouble, while larger companies have more possibilities.

Staffing includes hiring staff, analyzing jobs, and selecting employees. A good brand can lead to offering a high salary.

Leading does not involve power, as it can create conflicts. It is about being able to share the company’s values to move in the same and right direction, making sense of reality.

Controlling involves checking progress against plans during the process. Motivation is basic in order to make the employees efficient, and efforts become easier in that way.

How and why firms changed in the last decades

Product and market orientation have evolved. In the end of the ’60s, there was strong demand and uniform customer tastes. From the ’70s, there was market saturation since the crisis of 1973, leading to more fragmented tastes. Customers did not buy products for the first time; they wanted a difference between the old product and the replacing new one. It became necessary to be close to customers’ needs.

Now:

• Less loyal customers are attracted by new products.
• Stronger competition with more competitors imitating products.
• More information about products available among customers.
• Similar products offered by different competitors.
• Larger offer of products.
• Firms try to be single-customer oriented.
• Need to foresee new ways to satisfy equilibrium, being driven by market requests and foreseeing trends.

Globalisation has further influenced these changes.