Importance of High Quality Management for Companies Achievements

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Table of Contents

Introduction
Overall Management Functions
Marketing
Economics
Data Analysis
Accounting and Finance
Diversity
Making Connections
Conclusion
References

Introduction

The basis for the success of any organization in a market economy is the high quality of management. The core of any management strategy is each employee’s clear awareness of their responsibility and their role in the company’s achievement of desirable results. Managerial structures of an enterprise ensure that its operational activity is performed according to the industry standards and guidelines.

Overall Management Functions

The management process is a set of continuous, consistently performed, interrelated actions for the formation and use of the organization’s resources to achieve its goals. These activities are management functions. Thus, the management process is the sum total of all functions; it plays a decisive role in the development of an organization. Management functions are relatively isolated areas of management activity that allow a certain impact on the management object in order to achieve the set task.

Management functions follow from the content of the production process of the enterprise and are determined by the object, as well as the composition of the tasks to be solved. Thus, management has a direct impact on the creation of an effective operations system. Socio-psychological functions provide not only the regulation of relationships between employees, but also have a decisive role in the successful operation of the entire organization as a whole. Overall, the organization of management control is aimed at ensuring motivation and delegation. It is these functions that will make it possible to determine the composition of all the tasks and powers of the participants, to form the most favorable conditions for activity. Moreover, they will also stimulate employees to obtain better results.

Marketing

Marketing is a set of actions in the commercial market aimed at creating a product and attracting attention to it; its main goal is to generate sales. Guven (2020) adds that “it is the process of discovering innovations that are based on strategic intrapreneurship and future competitive advantages” (p. 234). Thus, marketing strategy ensures that the company understands its market, competitive advantages, and the needs of audience. Moreover, a correctly designed marketing strategy helps the enterprise establish a profitable price list and follow it with a set of benchmarks – KPIs.

It is not important whether the price is high or low – in the mind of the consumer, the price must be fair: the client wants to understand what they are being asked to pay for. With the help of marketing, the company will know the prices in its niche, the approximate paying capacity of the audience, and will be able to act within this framework. Additionally, the price and its “rationale” in the advertising message about the product will look different, depending on the interests of each consumer segment. Market and audience research can also tell the company what will drive sales in a specific situation. Paying attention to the needs and characteristics of the target audience makes it easier to find the right communication channels, as well as get prompt feedback. If a business communicates with a client in the same language, the consumer has the feeling that they are heard and understood, that their values are shared, which increases brand loyalty.

Economics

Wherever alternative resource allocation strategies exist, managerial economics provides the means to identify the best alternative. Managerial economics is a way of applying economic theory, especially its microeconomic section, to practical problem solving; thus, it can be used to improve the quality of management decisions. Kraśnicka et al. (2017) state that support for innovations from the managing lead provides stimuli for new solutions and helps effectively implement creative ideas. This approach is associated with the development of solutions for the optimal distribution of limited resources between competing areas of work. With limited resources, the choice of the right decision becomes very important, since the adoption of one of the possible decisions leads to the abandonment of all other options for action.

Effective management is based on certain principles, in particular, an effective manager should set goals and identify constraints. To make an informed and rational decision, one need to accurately set the goals: different goals require different decisions. Within a company, the objectives of its divisions may vary greatly, which is why managerial economics is needed to operate all processes effectively. For example, marketing staff may be tasked with maximizing sales or market share in a company, while finance professionals are usually required to maximize revenue for the company or choose a strategy with minimal risk. Macroeconomics focuses on the collective outcomes of millions of individual economic decisions, while microeconomics focuses on the behavior of individual decision-makers in the macroeconomic environment. Since microeconomics deals with issues related to the behavior of the firm in allocating resources, it makes a decisive contribution to management economy.

Data Analysis

Modern companies exist in a highly competitive environment which constantly forces them to adopt new approaches. The environment and market analysis are the base of any marketing strategy, as they provide data that help the company understand the competition and set the prices. According to Wandhwani et al. (2020), historical assumptions are one of the key aspects of the entrepreneurship research. The only way to ensure that the company’s marketing team is performing effectively is through data analysis – that is, by implementing data-driven marketing. The principle seems simple: the organization needs to analyze the data in order to understand who its customers are, what is happening with the business at the moment and what it needs to prepare for. However, many companies face a problem: either the data required for analysis is insufficient, or they are not sure of the data that is available. Marketers must overcome this dissonance in order to be successful.

Predictive analysis refers to the study of data from the past to calculate the likelihood of the future. If the company has a wealth of information, predictive analysis can help it when introducing a new product or service. Such research meets various goals and objectives that are typical for the development of a business in the market. The ultimate goal of analytical work is to develop optimal strategies for internal and external development, which will help the business to generate more profit.

Accounting and Finance

Obtaining well-defined and clear information from financial facts and figures has always remained the most demanding process in the business industry in terms of financial analysis and its elements. Financial analysis is used to study economic models, determine financial policies, draw up long-term plans for various types of business activities, and analyze projects or groups for investments. For example, to determine how adequately the company’s resources are used, the operating efficiency is evaluated – its deficit usually leads to shorter profits and weaker growth.

Financial statements are usually comprised of an income statement, a balance sheet, as well as a statement of money turnover, are analyzed to identify possible interventions. The analysis can be carried out both within the framework of corporate finance and within the framework of investment financing. Vernimmen et al. (2018) specifically states that the financial analysis provides insights into the company’s sustainability in the current situation. A good example is the accounts’ receivable turnover rate: it shows how accurately the loan is managed and distributed among the clients. A slightly higher number indicates good credit management, while a lower number indicates the need to improve the credit received from clients. Malozyomov et al. (2018) also emphasize on the importance of calculation of the break-even point as a risk assessment tool for investors. A comprehensive report of the company’s financial activities can be used to attract new investors and sustain the growth of the company.

There is also another important part of the report – a cash flow statement. Such a statement is highly necessary in an annual financial analysis due to the fact that the concepts of “income” and “expenses” used in the general report do not directly reflect the actual cash flow. A statement of cash flows contains information characterizing transactions associated, firstly, with the formation of sources of financial means; secondly, with the use of these means. According to Purba and Bimantara (2020), the analysis of profits can be used to estimate the company’s financial state. The organization’s attractiveness for investors is majorly based on its profitability and predictions of the future.

Diversity

Constant globalization of the world has led to an intensive diversification of business, as well. Shore et al. (2018) explained that nowadays, in terms of increased cultural sharing, the goal of most related researches is to improve work environments through supporting inclusion and diversity among employees. Diversity includes the basic aspects with which a person is born: age, gender, race and ethnicity, sexual orientation, physical and mental characteristics and limitations. Moreover, the acquired factors are accounted for as well: education, place of residence, social status, place of work, income, and much more. These aspects often play one of the key roles when operating a multinational and multicultural business, as they affect the ways people interact with each other within the working environment. For example, Jain and Pareek (2019) explain that in intercultural business relations, people might operate on the wrong assumption that their partners have the same concept of responsibility, while in reality, they are not. Thus, the company’s managing lead should predict such dissonance and account for it in its operational policies.

In an inclusive environment, employees are open minded, free from prejudice, flexible, and adaptive. Therefore, inclusiveness should be present in the company’s organizational culture to ensure the best performance. Additionally, Dover et al.’s (2019) research adds that some diversity initiatives, even when the cultures are similar, might affect the performance of underrepresented employees’ groups negatively. A company should implement all diversity-related initiatives with caution, choosing the best direction possible.

The effects of job diversity are manifested in several ways. For example, it improves the reputation of companies, which allows them to attract the best talent. This, by the way, is one of the reasons why the D&I (Diversity and Inclusion) policy began to be implemented primarily in IT companies, where the competition for professionals is especially high. This approach also appeals to Millennials who regard corporate responsibility, including D&I, as a must for business. Roberson et al. (2017) claim that diversity has become an important variable of social contexts that can influence employee’s behavior and attitude. The main thing that is required of a leader working in the inclusive environment is to create an atmosphere of trust in which employees will not be afraid to ask questions and share their ideas.

Making Connections

Strategic management provides ground for the collaboration of different teams working in the same enterprise. Cross-functional collaboration can be one of the key developmental factors that allow the company diversify its offers and create new approaches and technologies. According to Williams et at. (2018, p. 43), the conglomeration of strategic thinking approaches is one of the firm’s true benefits. Strategic marketing offers various opportunities to collaborate and create innovations through interactions of different professionals.

By providing a comprehensive plan of a company’s strategy, management offers opportunities at bringing together different departments to develop new products and technologies. Therefore, the most important resource capable of creating a flexible, adaptive and effective socio-economic system is the organizational culture of an enterprise. The objectives of the organizational culture as a management tool are to create a working climate that is more suitable for the implementation of the company’s strategy, ensuring the employees’ proper communications. Mitra (2020) states that, by diversifying its approaches, the enterprise ensures full understanding of concepts of entrepreneurship, innovation and development, linking them with human resources and environment. Thus, cross-functional collaboration is crucial for strategic management of any organization.

Conclusion

The modern stage of development of business sets completely different goals and objectives for strategic management. However, its innate unchanging goal to control the reality around the enterprise and assess its position in relation to the desired state – remains the cornerstone today. The relevance of strategic management is associated with the accelerating rhythm of life of both an individual and society as a whole. This objectively involves any business in the race to offer the best products and benefits to meet the constantly growing needs of society, which indicate the importance of a creative approach to their resolution.

References

Dover, T. L., Kaiser, C. R., & Major, B. (2019). Mixed signals: The unintended effects of diversity initiatives. Social Issues and Policy Review, 14(1), 152–181.

Guven, B. (2020). The integration of strategic management and intrapreneurship: Strategic intrapreneurship from theory to practice.Business and Economics Research Journal, 11(1), 229–245.

Jain, T., & Pareek, C. (2019). Managing cross-cultural diversity: Issues and challenges. Global Management Review, 13(2), 24–31. Web.

Kraśnicka, T., Głód, W., & Wronka-Pośpiech, M. (2017). Management innovation, pro-innovation organisational culture and enterprise performance: testing the mediation effect.Review of Managerial Science, 12(3), 737–769.

Malozyomov, B. V., Akberov, K. C., Nikroshkina, S. V., & Aleskerova, Z. S. (2018). Consideration of risk factor impact on efficiency of innovative projects by calculating break-even point in high-tech fields of economy. IOP Conference Series: Earth and Environmental Science, 194, 062021.

Mitra, J. (2020). Entrepreneurship, innovation and regional development an introduction. Routledge.

Purba, J. H., & Bimantara, D. (2020). The influence of asset management on financial performance, with panel data analysis.Proceedings of the 2nd International Seminar on Business, Economics, Social Science and Technology (ISBEST 2019).

Roberson, Q. M. (2019). Diversity in the workplace: A review, synthesis, and future research agenda. Annual Review of Organizational Psychology and Organizational Behavior, 6(1), 69–88.

Shore, L. M., Cleveland, J. N., & Sanchez, D. (2018). Inclusive workplaces: A review and Model.Human Resource Management Review, 28(2), 176–189.

Vernimmen, P., Quiry, P., Fur, Y. L., Dallocchio, M., & Salvi, A. (2018). Corporate finance: Theory and practice. Wiley.

Williams, R. I., Manley, S. C., Aaron, J. R., & Daniel, F. (2018). The relationship between a comprehensive strategic approach and small business performance. Journal of Small Business Strategy.

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