Starting a small business: essential management concepts

As a new business owner, you may need a number of employees to help run your business. Before you start the hiring process, it is essential that you have a working knowledge of the four management concepts that have evolved in the workplace since the beginning of the twentieth century. You’ll want the one that will work best for your particular business, and it’s no good to “wing it.” Employees can either be one of your biggest assets or your greatest liability.

This article gives a brief explanation of each concept. While this may be enough to get started, I suggest that you visit your local library (or bookstore) and get a more detailed book on whatever concept (or combination) best suited for your business. Keep in mind that whatever concept you use, you have to be open to change. Management is dynamic and the different concepts are refined and added to on a regular basis. It’s up to you to keep current and make your team of workers the best.

The Classical Concept of Management (the first) contains two related concepts. The first, the Management of Work (or Scientific Management) focuses on the worker and his productivity (piece work). The Management of Organizations focuses on the company and its managers. Management of Work stated that workers were basically lazy and without firm directions they would not be productive. The worker’s actual job would be substandard. This concept contained many misconceptions and only the idea of piecework is used today. Management of Organizations contains many concepts that are still used today. It introduced the Five Functions of Management, which are, planning, organizing, commanding, coordinating and controlling.

Planning, the first function consists of looking to the future of the company and deciding on its most effective course. Organizing refers to the organizational structure of the business and how authority and responsibility are given to managers (delegation). Commanding maps out how managers are to direct employees. This function lists various tools that should be used in order to get employee cooperation. Effective communication, rewards and punishments and the behavior of the manager are all explained. Coordinating gives activities designed to create a relationship between the company and its employees in order to reach a common goal. Controlling shows managers how to evaluate performance within the company in relationship to the goals of the company.

As you can see, the Classical Concept focuses on the worker and his work, the Behavioral Concept of Management focuses on human relations. Managerial effectiveness depends on the employee’s acceptance of his or her manager. It is still taught in Business Schools and it has made management much more effective in virtually every business in the U.S.

World War II brought about the next concept. When America adapted the civilian-manufacturing sector to the rigors of wartime manufacturing the workers (and managers) were overwhelmed. The Government enlisted scientists and engineers to help solve this complex problem. The Operations Research Concept (Management Science Concept) evolved.

This concept uses a systems approach. A problem seems to exist as it relates to the whole system and any proposed solution is evaluated as it relates to the same system. Any solution that would solve the immediate problem but cause problems somewhere else in the system was rejected.

Be aware of this concept but in today’s world of business it would be counterproductive since at no time is the employee (human factor) considered.

The most recent and most useful managerial concept is the Contingency Concept. This approach is eclectic in that you, as manager of your business, can make use of some of the techniques of other concept (in any combination) that will give you the best way to lead your employees.

In order to utilize this concept in your business you must study the other concepts and be flexible, not locked into one concept. You have to always consider the human element (employee). Always remember that your company, no matter what size, is a multifaceted entity and requires a multifaceted point of view from you.

I know that I’ve given you a lot of facts, some conflicting. It’s up to you to go with the best Management Concept your business needs.