What Is Management? What Are the Main Concepts and Types of Management?

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Management, as a professional field and science, emerged at the end of the 19th century. Company owners and hired managers began to wonder why some companies quickly become profitable and continue to thrive, while others go bankrupt.

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Management – A Scientific System of Control 

All definitions of management involve organization. Therefore, it is worth defining this concept. An organization is understood as a group of people whose activities are consciously coordinated to achieve a common goal. There are 2 types of organizations:

• Commercial: Engaged in the production of goods, providing services, executing projects, selling products, and other activities that generate profit.
• Non-commercial: Their goal is not to achieve profit but to obtain a planned result.

Management is viewed from 2 perspectives:

1. A set of principles, methods, and functions that enable effective management of both commercial and non-commercial organizations.
2. The management body of an organization. Therefore, it makes and implements managerial decisions that will enable the organization to make a profit.

According to the second perspective, management is seen as the management of socio-economic processes in commercial organizations. Since this is just one form of management, the terms “management” and “administration” cannot be used interchangeably.

The main task of management is to use economic, organizational, technical, and social resources of a commercial organization effectively to ensure profitability. To achieve this, it is important to:

• Correctly define the organization’s goals. If external factors change, make adjustments promptly. For example, if raw material suppliers raise prices or change delivery conditions.
• Use working capital and material assets rationally.
• Motivate employees to increase productivity.

Only managers can implement the tasks of management. They are professional leaders with specialized training.

How Many Management Levels Are There? 

There are 3 levels of management:

1. Institutional: Top-level managers – directors and their deputies. They provide overall guidance and develop the mission, goals, strategy, and policies of the enterprise.
2. Management: Mid-level managers – department heads, managers of sections and departments. They implement the overall strategy and policies of the enterprise and are responsible for achieving goals. They coordinate and control the activities of lower-level managers.
3. Technical: Lower-level managers – section chiefs, foremen, and supervisors. They control and organize the work of performers in production tasks: specialists and workers.

Management work is distributed not only vertically but also horizontally. This has allowed the creation of structural subdivisions.

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What Functions Does Management Have? 

Management functions are types of activities that express a particular direction or stage of the managerial process. They are divided into:

• General: Performed by all enterprise managers in carrying out their duties. These include planning, organizing, motivating, controlling, and coordinating.
• Specific: Involved in the work of structural units within one area of activity.

General functions are realized through specific ones. Specialists who manage personnel perform planning, organizing, motivating, coordinating, and controlling.

Detailed Description of Management Functions in Video 

Watch the suggested YouTube video about the general and specific functions of management on our portal.

Most Common Types of Management 

The 3 most commonly used types of management are:

1. Production: A system for managing and organizing the activities of a production enterprise. It optimizes plans and tasks through principles, methods, and functions, implements scientific organization of labor, and manages production costs, quality, etc.
2. Financial: A system for managing the movement of financial resources of the enterprise and its financial relations with other organizations and government bodies. The main task is to improve the enterprise’s competitiveness.
3. Innovative: A system for managing scientific-technical and production activities of the enterprise. It develops and implements innovative projects, organizes and controls the development of improved and new products and their production, etc.

Each type of management has controlling and controlled subsystems. The controlling subsystem is the relevant department and its manager. The controlled subsystem includes the processes managed by the managers. For example, in financial management, this includes capital circulation, cash flow, financial resources, and relations.

Conclusions 

Management is a component of administration. Its overall goal is to optimize the functioning of an enterprise and create conditions under which strategic and tactical goals can be achieved. Modern enterprises use several types of management, with production, innovative, and financial management being the most common.

Answers to Frequently Asked Questions About Management