Business management

It is easy to come up with thirty types of managers, to name a few only think of: the sales manager, marketing manager, operations manager, logistics, HRM, Finance, a CFO, a business development manager, a product manager, quality manager, etc, etc…

But where are the real differences in these examples. What is key for understanding the managers’ main focus?

There are many ways to define the management main focus but one of them is straightforward but nevertheless not applied often. It is about the division between business and organization.

1.Business

The linking element in these types of management is a certain domain in business, for example: logistics, finance, retail, operation, purchase, etc. The main characteristic of business management is that it is directly related to business activities. A sales manager has to set targets for sales, has to agree these targets with his sales team and he will manage the target as sales revenues are reported.

Marketing management is slightly less directly involved in business but still measurable: A campaign is created, executed and the impact on client and prospect activity can be measured.

Part of both is that non-business related activities are required (like recruitment) but this is not a main activity. When new employees are required the sales manager may address to the HRM department and ask to perform a recruitment procedure.

2. Organization

The linking element here is a supportive act to the main business but where the external client is never visible. Areas are: HRM, Finance, Quality, technology, infrastructural management, etc, etc.

The request from the sales manager to recruit a new employee is received in the HRM department. They send an employee to verify the details of the vacancy and its requirements and it will search in the market for candidates.

The sales team is involved in this activity but only slightly. This also depends on the size of the organization. (For the single entrepreneur this distinction between business and organization is not explicit).

There are of course managers (like project managers) for which this distinction doesn’t quite fit. The project manager manages a future business by organizing a project team…

But let’s concentrate on the main distinction of the type of managers: business or organization.

A business manager will find it hard to change to a more organizational management role. Do not ask a business manager (logistics) to become the manager of the quality department, the risk department or the HR department. These roles are quite different and require a different type of manager. Likewise a quality manager or a HR manager will no fit as head of a business department.

Where the business manager is more prone to think in numbers and time (amount of sales, revenue, resources used, etc) the organizational manager is more biased towards thinking in levels (quality level, security, salary, training and Education, etc). One is often organized in a decentral way (the business – close to the clients) the other is often organized in a central way.

Yet higher in the organization, managers will have both a business side in the (Management) team as well as organizational staff managers and need to find a balance to manage them as a team. This will often result in different management meetings.

For such managers it is important to understand both requirements. Higher management is often filled by people from the business and will have limited knowledge and experience from the more organizational domains of the company. In finance, this has become clear in the domain of risk management that has often fulfilled a supportive organizational role, but will now be equally seen as part of the (core) business. That is a lesson from the financial crisis. But in general managers should beware of the division of these types of managers, their main domain and responsibility and their overall role in the company. Every company must have a right balance: if the quality manager is not on equal terms with business management than this is quite probably due to an organizational design error.

H.J.B.

© 2008 Hans Bool

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