Management Styles and Techniques

A leader or a manager should be very careful, while choosing the business management styles and techniques for an organization. This is because the success of an organization depends upon the kind of management styles and the management skills which the managers exhibit. Some management styles are people oriented, while others are project or work oriented. Here are the three management styles which are primarily used by the managers in today’s organizations.

Management Styles

Teamwork Style

Here, tasks are accomplished by constituting teams first, and then dividing the tasks among the teams. It is commonly observed that tasks are accomplished more efficiently through teams. That is why most organizations follow this style of management. The different team members bring their knowledge to the table while accomplishing various tasks, and hence, tasks can be done more quickly in teams rather than by individuals on their own. In order to function properly, there should be proper workplace communication between the various team members and also between the manager and the team members. “Team spirit” is a prerequisite for the success of this style of management.

Directing Style

In this style of management, the manager communicates the “goals, expectations, and standards” to the employees very clearly in the beginning itself. The manager is in direct control of the situation literally, i.e., he dictates to the employees what tasks have to be done, how they have to be done, and the deadline for those tasks. The manager has all the decision-making powers and seldom asks the employees for a feedback. This management style is considered slightly impersonal, but sometimes, such situations arise in organizations, such as meeting a deadline or when the number of employees is too huge, that only top-down management approach or directing style of management can bring desired results.

Participatory Style

Participatory style of management is based on the principle of “faith”. Under this style of management, the leadership and management places full faith in the abilities of the employees. The tasks are given directly to the employees and are well-explained to them in advance. Their inputs on the tasks are also given due importance. The employees know how their work is fitting into the organization’s big goals. When their inputs are sought and they are also made aware how important they are to the health of the organization, their motivation levels become very high and they perform better. This style is usually seen in smaller organizations with lesser number of employees.

Management Techniques

Management techniques are those management concepts or strategies, which are followed to run an organization efficiently and profitably. Management techniques, whether pertaining to employees, the customers of the organization or the partners, in case of partnerships, should be chosen only after evaluating the needs of all three. An example of a management technique pertaining to employees is the use of incentives, so as to motivate them, or to provide them with training in order to update their skills. Management techniques pertaining to customers are usually aimed at keeping them happy and satisfied so that they keep on coming back. An example of this, could be the various discount offers that are given to the customers on special occasions, such as Christmas. Whatever management techniques are chosen by organizations, the main thing to consider is that they should fulfill the needs of the organization and also, of the employees, customers and the partners.

According to business experts, the most effective techniques are those that are a mix of all the styles. The management styles that are followed, should depend upon the situation that an organization is facing. In the fast changing business environment, it will neither be practical nor profitable, to stick to only one style. That is why the management gurus, when giving management tips, always insist that only the organizations that evolve their management techniques, according to the ever-changing corporate culture, will survive to see the future.

Basic Business Management Skills

The verb manage comes from the Italian word maneggiare which means handling (especially a horse), which is derived from the Latin word manus meaning hand. In the 17th and 18th centuries, meaning of the English word management evolved from the Old French word mesnage.

“Management is the art of getting things done through people,” says management consultant Mary Parker Follett. People are perhaps the most valuable resource of a business. But there are others, like financial resources, infrastructural resources, inventory, and technology, whose optimum use is essential for effective business management. According to Peter Drucker, “Managers give direction to their organizations, provide leadership, and decide how to use organizational resources to accomplish goals.”

Management skills are classified as political (used in building power and business networking), conceptual (used in analysis of situations), diagnostic (used in taking an action in response to a situation), technical (domain knowledge), and interpersonal (people skills).

Frenchman Henri Fayol describes management as a composition of five functions, namely planning, organizing, commanding, coordination, and control. Modern texts have reduced them to four, which include, planning, organizing, leading, and controlling.

Planning
Planning involves identification of your business goal and finding the way to reach it. It involves the estimation of various costs that will be incurred and evaluation of the time required to attain the business goal. A business plan has to be documented and reviewed on a regular basis. A plan is worth it if the attainment of the business goal is feasible with the allocated resources.

Organizing
It involves the assignment of tasks and allocation of resources throughout the business organization. It includes determining the primary goals of the business and strategies to reach them. It includes division of activities into tasks and assignment of the tasks to suitable and deserving employees.

Commanding
Commanding or leading is a management skill in itself. A true leader builds confidence in his followers and instills a feeling of admiration in them. He develops in them a sense of commitment towards business. A leader influences others to follow him. Understanding the need of the time, leaders need to be flexible and adaptable to change. They should help encourage the development of flexibility and adaptability in the team members.

Being innovative is important for business growth. Leaders need to be open to new ideas, they need to innovate, bring in positive change as and when needed, and progress. Progress is hardly possible without innovation. A leader should not just dream big but also provide his followers with a framework to fulfill those dreams. Innovation includes both imagination and action in accordance with it. Delegation is another important aspect of leading. It refers to allocation of tasks to the right people. It involves entrusting deserving candidates with work that they can do best.

Coordination
Coordination involves effective communication between team members and across teams. It is useful in tracking activities towards achievement of goals. Mary Parker Follett, an American social worker and management consultant, says that coordination is the “Plus value of the group”. That is, a well-coordinated group can achieve more. Coordination involves integrating and synchronizing the efforts of team members towards fulfillment of a common goal. It is crucial for taking decisions about the future lines of action.

Control
Control refers to setting standards, ensuring that the performance meets the set standards, and taking corrective action as and when necessary. Taking a corrective action needs prior analysis of the causes of performance deficit. Control is best-implemented in the form of able guidance given to employees by their manager. Evaluations are necessary to track employee and business performance.

Coordination and control are important for the success of a business. Business is ‘busy-ness’. In simple words, it refers to the act of being busy in productive work. Management is the process of measurement of the amount of work being done. It also involves assessing the quality of work and productivity.

Business management skills cannot be confined to the definition of any one management theorist. The definition of management has evolved over time and the role of a business manager is no longer limited to only planning work and overseeing its execution. Considering the competition and changing market trends, a business manager needs to be a thinker and communicator. He needs to have an in-depth understanding of his business and its resources. Here, we look at these and certain other skills that make a good business manager.

Directed Thinking
Simply put, it refers to thinking towards a specific goal. The ability of directed thinking is crucial to develop a business idea as it involves logical, purposeful thinking to reach a particular goal. It is an important part of problem-solving, and can fall under both, conceptual and diagnostic business management skills.

Effectiveness
One more quality that a skilled manager should possess, is the willingness to work effectively towards the achievement of his business goal. Management guru Peter Drucker made a distinction between ‘efficient’ and ‘effective’. According to him, performing an activity swiftly and economically refers to being efficient, while doing the right thing at the right time, with efficiency, refers to effectiveness. Good business management skills lead you to the right goals. On the other hand, doing the wrong things or doing things in the wrong direction is a waste of time and resources. In other words, it’s the exercise of efficiency to no avail. A leader should know how to prioritize business activities. He should be able to understand what’s important for the business and differentiate it from what is urgent. It is important for effective business management.

Knowledge of Strengths and Opportunities
Effective business management asks for a complete knowledge of the strengths and growth opportunities a business has. Knowing the strengths requires an understanding of the availability and potential of the business resources. A complete understanding of the business and competition can help a manager understand the prospects of his business.

Knowledge of Weaknesses and Threats
As a leader, one should be able to understand the weaknesses of his organization and try to improve on them. A manager must be able to identify the threats to his business and fight them effectively. He should have the skill to endure every setback and learn from mistakes or bad decisions. Successful business development strategies used by others can help a business manager devise his own. This is where the skill to ‘experiment’ comes in the scene. Experimentation needs to be accompanied by the right judgment of actions and results.

Business management includes management of all business/organizational resources. And that includes management of money, time, and people. Proper prioritizing and scheduling of tasks for oneself and the team is an important constituent of business management. Management of money is integral to running a business. The activities of buying, selling, and pricing have to be done skillfully. Business management is not a cakewalk. It includes everything from planning, supervising, right up to being the spokesperson for your business.

People Skills
A business manager needs to possess people skills for effective management of human resources. A manager should be able to bring out the best from his team. Difficult people, those with rigid opinions and those not adaptable to change, need to be dealt with. Identification of errors followed by instructions for improvement need to come from a manager. He needs to imbibe in the minds of others that improvement is a continuous process and is essential for growth. A manager should take every opportunity to appreciate the efforts of his team members and celebrate the team’s successes. This encourages them to work to the fullest of their capacities. A manager should have the ability to keep the team’s spirits high and keep the people motivated. It’s human psychology to like getting noticed for one’s work. It’s not unnatural for one to expect recognition for his work. One of the most important business management skills is to be able to encourage your team members, extract work from them and appreciate them for it.

Approachability
Another managerial skill is to create and maintain an open atmosphere in the team. The team members should feel free to voice their concerns and always feel assured of their concerns being heard. There should be a proper hierarchy for communication within the organization. It is a good practice to assign relatively experienced employees as buddies for those newly-joined so that the new recruits do not feel unheard. This way, everyone in the organization has a point of contact.

Communication Skills
Communicating in a way that everyone understands is a skill a manager should have. That’s essential for teamwork and thereby for business management. In the words of Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.” This is what teamwork means. Developing a team spirit and maintaining it through thick and thin of a business is indeed a management skill. Keeping people together needs a manager to be a good communicator. Being able to convey one’s ideas to people, and getting good work done from them, is a skill. Communication should be effective. A business manager needs to exercise his communication skills, not just when interacting with the team, but also when communicating with external agencies; for example, during business negotiations or when addressing customer issues. That depends on your job responsibilities in the organization, but communication is an important part of a managerial role.

Foresight
It is important in business management. A business manager needs to be able to sense trouble ahead of time. He needs to be prepared for it and plan work and devise strategies accordingly. Foresightedness helps a manager assess future needs of the business and identify emerging fields for diversification.

An excellent example of a business developer with foresight, was Steve Jobs. “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new,” he said. He believed in anticipating customer needs in advance to be able to give them products they would start wanting.
Management is about taking the right decisions at the right time and getting them implemented by the right people. Effective business management requires a manager to have certain basic skills like the ones given above. And one very important, yet not-so-common thing he needs to have is common sense.

Raise Money for a Business

The capital is one of the first things that needs to be taken into consideration when one is setting out on a business venture, and there are many different sources to obtain this capital. It is not necessary to stick to one particular source rigidly; even a combination of various different sources can be used.

Anyone who is wondering how to raise money for a restaurant, a start-up, an advertising agency, or any other small-scale venture should keep these methods in mind. Approaching the right people for it is vitally important for the success of the business, and if this is not catered to properly, it will be doomed from the very beginning.

Personal Savings

This is the most obvious source of money for starting a business. If you have saved up enough money over the years, go ahead and make use of it to serve the underlying purpose. You will not be answerable to anyone, and you will not have to worry about repaying someone. If you choose this option, ensure that you are not using all your savings though. Many people neglect this option because if they lose it, they will have nothing left to live on.

Venture Capitalists

This is the next most obvious source for your initiative. Venture capitalists are professional agencies who put in venture capital into an upcoming business. What they get in return is either its share, or a share of the profits, or pretty high interest rates. It may sound like exploitation, but this is one of the best ways to get money. Venture capitalists are always looking for new and innovative business ideas that are likely to succeed.

Angel Investors

These are a refined form of venture capitalists, but many people think that they mean the same thing. Angel investors are less demanding than venture capitalists and remain with your initiative in the long run. Usually, these are someone who you would know personally, and they are simply looking for ways to get a higher return on their investment. How companies raise money depends a lot on the nature of the business and the method of entrepreneurship adopted. Angel investors also help them by providing some guidance and mentoring.

Personal Borrowings

Here is a method that should be avoided as far as possible. You can borrow money from someone you know, namely your friends, family, or other people. The problem here is that once you mix business and personal relationships, things start to get a bit sour. This is a situation that needs to be handled with great tact and diplomacy, and not everyone can manage to do that. Still, this is a method that many people consider.

Bank Loans

Another answer is to approach a bank for a small loan. With banks, you will not be required to pay a very high interest rate, but you will need sufficient documentation about the business model of your initiative. Along with that, your credit history and financial stability will also be scrutinized, in order to find if you are worthy of getting a loan. Most people would love to get it, but are simply not eligible. This is especially true for someone looking to collect the money, without owning any fixed assets.

Advertising

Here is another answer, but one that requires a suitable amount of investment and more than a fair share of patience. If you can handle the advertising of your upcoming company well, you can get more than enough money to sustain it in the long run. There are some websites that also allow you to advertise your business plan and then suit you up with a matching investor. This is a slightly unreliable method for sure, but it works wonders if one can find the right match.

Other Options

One can approach some small-business investment companies, business development commissions, life insurance companies, or a money broker. The reliability of these options will not be very high, and their demand may be exorbitant, but if you have run out of all other options, then this is something that you will need to resort to.

You should act as early as possible, in order to get sufficient capital and business financing. There is a variety of sources available, and as long as you have a great and reliable plan, you will be able to procure capital. It is not all that difficult; all you need more than anything else is faith in yourself.

Cost Cutting Tips

These days, a lot of importance is being given to cost cutting at home and for businesses. If done at proper places, it helps us to save money and invest in the right place to maximize the profits. However, the problem is that, we think of these ideas only in the phase of economic recession or when our business is in a financial crisis. Instead, it should be planned and implemented at all times, even in the days when your business is extremely profitable. The efforts made by this method will help you to deal with issues such as sudden drop in demand of your products. It is also one of the best means of wealth creation over a time. Let us learn about cost cutting measures for businesses and home.

For Businesses

Cost cutting ideas are to be implemented by the finance and accounts department with the consultation and coordination of the personnel management. HR managers should chalk out smart strategies to avoid unnecessary expenses, which affect the profit margins of the company. Giving salaries and bonuses to staff as per their performance would be an innovative idea instead of having common appraisal for all the employees. A lot of money is spent on traveling for business purposes and such expenses can be easily curtailed by choosing a slightly less luxurious traveling option. So, if time is not the constraint, adopt railways as a mean of transport instead of airways. At times, you can also reduce costs on accommodation. However, this measure may depend on the employee’s designation.

Many product manufacturing companies are unable to control their costs as they have to depend on other companies for supply of raw materials, their processing and packaging, because they do not have the required high-end technology for the same. So, it would be advisable to buy or rent the equipment or develop the technology on your own to avoid long-term expenses. For this purpose, you will need a research team which can be organized by effective personnel management. In addition, saving on electricity and leisure is imperative to improve the balance sheet.

For Households

Cost cutting can help save money and use it for emergency needs such as education and health. If you are a person living on rent and are paying a large amount each month, you can consider the idea of shifting to a location where the monthly rent and security deposit is less. In addition, you can consider controlling expenses on telephone, cable TV, etc., by being disciplined and focused. In cable TV, you can opt for only the channels which you watch often and get rid of other non-essential TV channels.

You can curtail costs on electricity by switching off lights when not in use. School and college students in the families can use bicycles instead of spending money on petrol or gas. Buying grocery from a cheap department store, reducing expenses on hotels, limiting excessive credit card usage and sticking to just one credit card, creating a shopping limit for yourself are some other techniques you can consider.

If implemented, these ideas will surely help you save more money in the long run. Though, understanding why cost cutting is important and how to go about it is simple, implementing it is tough and requires strict financial planning.

Cost Cutting Tips for Businesses

An entrepreneur or business owner is always looking to increase profits and bring in more business which can be achieved, among other things, by cutting down on expenses. Here are some cost cutting ideas for businesses that are sure to impact cash flow and increase overall efficiency.

In times of a tough and difficult economy any business owner needs to keep a track on his expenses in spite of results showing strong sales, simply because escalating costs can eat into profits within no time. Much too often business owners grow frustrated with weak sales and rising costs only to make fatal mistakes while cutting costs. Some of these follies are, firing or reducing the sales team, cutting down on the marketing budget or eliminating systems or technology that increase operational efficiency. Now, provided an entrepreneur stays away from such fatal decisions he/she can adopt some of these cost cutting ideas that will surely boost his cash flow and enhance the overall health of the business.

Assess Company Finances
One of the first cost cutting ideas in the office is to prepare a detailed record of the expenses. Prepare a per month or quarterly income and expenses report that will include all details of what are the needs of the enterprise, how much is currently being spent, how much is the budget allocated for every section, and how much can be saved. This will give a general idea as to which all areas should be considered for cost cutting.

Improve Personnel Management
Instead of laying off employees, the management can stop hiring new employees, and utilize the services of the present employees to the fullest. Effective personnel management is the key to cost cutting. Assign tasks to employees who can do their best in those particular tasks. Set targets and ask employees to meet them in the allotted time. Do not deal with consultants, since they have to be paid more as per their level of experience and expertise. If the work to be done is substantial and requires manpower, one can recruit talented and skillful freshers. These freshers in order to gain more experience, will do both quality as well as quantity jobs.

Review Marketing Strategies and Plans
As marketing is a vital part of any business, a lot of finances is spend on it. Get the details of all marketing strategies and programs that are not giving good results. Reinvent those marketing plans and relaunch them in a new and effective manner. If possible, one can even eliminate such ineffective and cost-consuming programs. Instead of spending much on advertising and marketing, one can use the records and clients’ references to draw in more business. Eliminating unnecessary marketing will surely reduce the company costs substantially.

Cut Administrative Expenses
Administrative costs also have a major part in the increase of the enterprise’s operation costs. Instead of purchasing equipment and tools, a better cost control method is to take them on rent. If one wants to buy equipment, getting used but operational ones is a good idea to save on costs. In buying office equipment, opt for good equipment with discount or search for a purchasing partner. Make sure that company employees use the office equipment to its fullest and do not waste any. Ensure that employees do not use office phones for personal purposes. Use electricity only if it is absolutely required. Make sure everything that is purchased is used in the best possible manner.

Learn Waste Management
In any business, service or manufacturing, there is bound to be waste. Waste management can be one of the key contributors to cost reduction. Going paperless can help the firm to save lots of money. For any internal communication, technology can be used. If the firm is a manufacturing unit, all the recyclable production waste should be processed and reused and the rest of the waste should be disposed off properly.

Look for New Business Models
By changing the approach with which one runs the business, cost cutting can be achieved. There are many business models that suit every industry. One has to choose the appropriate business model. However, one also needs to be careful while doing so. If the right decision is not made, things can be worst. Changing the business model is a crucial decision, and the necessary steps should be taken without hastening.

Review the Available Equipment
In all organizations there are excessive equipment like, office tables, chairs, cupboards, desktops, etc., that are either damaged or are not used at all. Such equipment can either be reused or disposed off.

Reassess Vendor Contracts
There are many outsourced functions in every firm and vendors are hired for all such activities. All such contracts should be reviewed. Fresh talks can be initiated with potential vendors and after comparison of the cost incurred, the vendor can be finalized. This activity can help cost reduction in a big way.

Rethink Office Rent/Lease
If the office from which one is operating is leased, then one can look for a cheaper location. Except for service industry like hotels, spas, etc., change in location of the office will not affect the customer base. Instead, there are chances to increase the clients due to relocation.

During financial crisis, one is bound to look for short-term benefits. However, it must be also remembered that the decisions taken at such crucial times can also have a negative effect on the future of the firm. So, one must focus on the long-term benefits before taking any such decision.

These are few cost cutting ideas that can be used in offices and companies to reduce operational costs. Remember that even the smallest possible saving steps taken on the expenses will certainly contribute to the cost cutting measure of the company.