Management

​​​​​​​Management — 1. process aimed at achieving the goal; 2. transfer of the system from one state to another.

The management of socio-economic systems, including production systems, is called management (from the Old French word ménagement «the art of accompanying, directing», from Latin manu agere «pointing with the hand»). The concept of «management» also refers to the management and leaders of various levels in the enterprise. Corresponds to the Russian concept of a clerk.

Management (from — to manage, manage, lead) is the science of organizing the activities of a social system to achieve specified goals.

• The doctrine of achieving goals through the hands of other people
• Organization management system.
• Management is the art of managing.

Components of management

• Manufacturing control
• Human Resource Management
• Marketing
• Sales management
• Financial management
• Project management
• Strategic management
• Innovative Management
• Investment management
• Environmental management
• Controlling
• Quality control
• Comparative management

Strategic management

Strategic management is the process of setting and achieving long-term goals.

Managing an organization can be compared to flying an airplane. There are only two reasons why it can crash: either the engine will stop, or it will simply fly away in the wrong direction. When planning a strategy, it is necessary to answer two questions: where to fly and how.

Principles and functions of production management

General principles of management in wildlife, society, technology are studied by cybernetics. The system of knowledge about production management is formed on the basis of various sciences. In political economy, in law, in psychology and in many other sciences there are sections related to the management of production. A number of specific scientific disciplines specifically study certain management functions: planning, accounting and decision-making, information processing, etc., generalizing practical experience and developing more advanced forms and methods in order to increase the efficiency of management activities. In this regard, quantitative methods and decision-making models are becoming increasingly important. Modern production management can no longer be imagined without computers.

Production management at any level is a complex process. Outside the firm, the manager must constantly fight for market share, anticipate customer demands, ensure accurate delivery times, produce ever higher quality products, set competitive prices, and maintain the firm’s reputation with consumers in every possible way. Within the firm, he must seek to increase labor productivity through better planning, more efficient organization and automation of production processes. At the same time, he must take into account the demands of the unions, maintain a competitive position in the market, provide shareholders with dividends at a level that does not lose their confidence, and leave the company with a sufficient amount of retained earnings to ensure its growth. An important task of management is to unite, integrate all parties and aspects of the organization and sites, their private goals, to achieve the common goal of this system.

Management theory applies scientific methods of analysis in order to develop certain methods and recommendations for management practice. However, these methods and recommendations are not recipes; they cannot be made absolute. The effective application of these methods and recommendations depends on a combination of specific circumstances and conditions. For example, the Japanese experience of using quality circles has not found wide application in the conditions of American industry due to differences in social relations in production. Therefore, one of the important conditions for effective management (that is, achieving the organization’s goals at minimal cost) is the adequacy (compliance) of the applied management methods with the external and internal environment of the organization’s functioning. It is useless to apply in industry the methods of management adopted in the army and vice versa. In the same way, under the conditions of a market economy, the directive methods of management used in the USSR will not provide the planned results. Conversely, the application of management and marketing methods in the economy of the USSR would only be of academic interest.

As in any other sphere of intellectual and practical activity of people (military affairs, medicine, etc.), the scientific nature of management and the art of management complement each other. The effectiveness of the management system is ensured by the ability of leaders to master the art of creative application of scientific management principles in specific situations. Management, that is, actions that ensure the achievement of the set goals, should be distinguished from the so-called «shamanship» and «influence» (shamanism is the ritual actions of shamans to call rain, exorcise spirits, etc.). Shamlanie is understood as a leading activity that does not lead to any results. Such activities can only be safe in a sustainable economy. “Impact” is understood as a managerial activity that leads to a change in organizational structures, the conditions of the external and internal environment of organizations, but does not ensure the achievement of the set goals. In most cases, such activities endanger the life of the organization. Thus, management actions that do not ensure the achievement of the set goal are not management. The three main functions of management: managing the business to improve its efficiency, managing managers, and managing employees and work — are due to the complex nature of business — the specificity of the managerial profession is to perform these three functions simultaneously. In accordance with the main goals and objectives of the company, the business management function is central, uniting all functions — managing a business means finding the optimal balance between its diverse needs and goals.

The main functions of management are planning, organization, motivation, control.

Complexity and adaptation of control systems

A systematic approach to management is based on the fact that any organization is a system consisting of parts, each of which has its own goals. When making managerial decisions, the head should proceed from the fact that in order to achieve the overall goals of the organization, it is necessary to consider it as a single system. In this case, the interaction of all its parts should be identified and evaluated and combined on a basis that will allow the organization as a whole to effectively achieve its goals. However, the achievement of the goals of all subsystems of the organization is a desirable phenomenon, but almost always unrealistic.

The need for a systematic approach to enterprise management can be understood by considering two aspects of the work of the head. First, he seeks to achieve the overall performance of his organization and not allow the private interests of any one element of the organization to damage the overall success. Secondly, he must achieve this in an organizational environment that always creates conflicting goals. Strategy, technology and economics are interrelated elements of one common problem. The essence of the economic problem is to choose such a strategy, including equipment and all other resources necessary for the implementation of strategic plans, which will be either the most effective (the most profitable solution of the task with the available resources) or the most economical (achieving the task with the minimum costs).

The control system can be represented by a special kind of machine on the basis that each system performs some function that can be considered as the purpose of the machine. One of the main distinguishing categories of managed systems is complexity. Any firm has many conflicting goals, and this is one of the decisive factors that make it necessary to describe an enterprise or firm as a very complex probabilistic system. The complexity of the system is determined by the number of its constituent elements and possible connections between them. The degree of complexity is measured by the diversity of the system. Diversity characterizes the number of possible states of the system. The fundamental principle of control, discovered by W. Ashby, is the law of necessary diversity, according to which the level of diversity of the control system must correspond to the level of diversity of the controlled system. From this, in particular, it follows that it is impossible to create a simple control system for managing complex systems and processes. It follows from this that both individuals and entire organizations are not able to cope with problems whose complexity exceeds a certain certain level. When this level is exceeded, managers are no longer able to understand what is happening around and develop an adequate strategy for managing a company or country.

Another reason for the growing complexity of production management is related to the pace of change in the external environment. The influence of the external environment is a determining factor for the company when choosing a management system. The speed of changes in the external environment of organizations is growing and, accordingly, the complexity of the problems facing the organization is growing. The more complex these problems are, the longer it takes to solve them. The more the rate of change increases, the shorter the life of solutions to problems found. By the time the solution is found, the situation has already changed and a fundamentally new solution is required. An organization cannot be able to learn quickly and effectively if its leadership does not have this ability. In general, the law of the necessary diversity for managing a firm determines that in order to successfully confront the environment, the complexity and speed of decisions in the firm must correspond to the complexity and speed of changes occurring in the external environment.

The classification of any systems from the standpoint of cybernetics provides for two criteria — (a) the degree of complexity: simple dynamic systems, complex systems that can be described (well structured), and very complex systems that cannot be adequately described analytically (weakly structured), — and also (b ) the difference between deterministic and probabilistic systems. Moreover, probabilistic systems include not those systems, knowledge about which is not sufficiently complete at the moment, but probabilistic in nature, not amenable to an unambiguous description in principle. The class of very complex probabilistic systems includes the firm, the brain, and the economy. In accordance with the law of necessary diversity, the control system for the economy and the firm must also be a very complex probabilistic system, and industrial control systems (provided that they are sufficiently effective) must be built as cybernetic systems. Cybernetics offers a feedback mechanism as a way out of the contradictions of probabilistic control and controlled systems. The feedback controller guarantees the compensation of disturbances not only of a certain type, but also of any disturbances. In particular, it compensates for the influence of perturbations on the system, the cause of which is completely unknown. This is precisely the importance of the feedback principle for the management of industrial production, which is a very complex system that cannot be described in detail.

Socio-economic functions and goals of management

Assessing the place and role of management in social production and formulating the problems of economic development is a task not only for economics, but also for a number of other social sciences (sociology, political science, etc.). The theory of institutional economics, which arose at the intersection of economics, sociology, law and history, is focused on the study of formal and informal norms that structure interactions between individuals in various areas of daily activity. Awareness of the interdependence of different aspects of social and individual production has led to a modern understanding of the systemic nature of the economy, including its structural-functional differentiation, and the development of concepts of its institutionalization as a determining factor of social interaction in the process of economic development.

The structural-functional approach is a concretization of the ideas of systems theory and system analysis in relation to various areas of the economy (including management), which are considered as constituent and interacting parts of a higher-order social system — society. Systemic functions are interdependent and do not exist separately from each other: there can be no economy without politics, culture, technology, etc. The concept of systemic functions of an organization is based on the obvious fact of its involvement in the life of the whole society as an embracing social whole. At the same time, in modern science, a correspondence is established between the invariant aspect of the object under study and the concept of structure, which is used to designate a set of stable links between the main parts of the object, ensuring its integrity and identity to itself. The concept of structure usually correlates with the concept of a system, and the structure expresses only what remains stable under various transformations of the system. In this case, the main properties of the system belong to the class of properties of integrity or emergence, they are inherent in the system as a whole, arise during formation from parts, disappear with it and cannot be explained based on the properties of individual parts, without referring to the connections between them. When two or more systems interact, synergistic effects arise due to the desire of each of them to an equilibrium position, the parameters and properties of which are determined by the initial states of each system. But it is precisely these properties that play a decisive role in terms of controlling influences on the socio-economic system, including influences that involve structural or functional restructuring of the entire system or elements of its structure in accordance with the goals and interests of society. Hence it follows that an important task of science is the knowledge of the structures of socio-economic systems as carriers of emergent properties that determine the main characteristics of their behavior. The success of the restructuring of the system in the direction of obtaining the desired properties is the final criterion that determines the degree of knowledge of the real structure.

Based on the fact that the functions of the subsystems of the socio-economic system are implemented through the appropriate institutional forms and processes, the specification of the structural-functional approach to the analysis of the systemic functions of management as an institutional structure can be represented by the following concepts:

a) management is considered as one of the subsystems of social production and the socio-economic system as a whole;

b) the implementation of its systemic functions, determined by the structural and functional differentiation of social production and the presence of system-wide imperatives, constitutes a specialized contribution of management to the life of society;

c) management at the levels of development of social production and its current functioning can be considered as an institutional process carried out through managerial decisions, the result of which are the costs and incomes of production, on the one hand, and the creation of material goods and services, on the other.

In the system-wide understanding, the institutional aspect of the problem of implementing the systemic functions of management covers not only the subsystems of social production, but also the structures of other institutions of the socio-economic system that directly influence them.

Thus, the above provisions and the scheme for analyzing the systemic functions of management make it possible to structurally and functionally reflect the place and role of management in society and their institutional relationship. Management as a subsystem of social production has a generic meaning and specific characteristics. The generic meaning is formed by subject-object properties: the functions of management are determined by the institutional factors of the socio-economic system and, at the same time, its actions are aimed at changing the state of production, and the results in economic terms attributively hold two sides of innovative results: the costs and incomes of the enterprise and, at the same time, goods and services. The specific characteristics of management are determined by the specific conditions of a particular production.

A systematic approach to management problems inevitably leads to the need to search for a significant set of functional imperatives, the level of implementation of which determines the survival of commercial enterprises, their efficiency and the entire social production. It is equally necessary to identify the structures that form these imperatives and the management paradigm of this socio-economic system as a whole. After all, the development of this socio-economic system is due to the dominance of any functional imperative. Thus, throughout the entire Soviet period, the predominant role in the economy belonged to the planning and production function and elements directly related to its implementation. Now in Russia, the expansion of the banking sector is clearly visible, which is trying to subjugate the rest of the economy. From this it follows that explicitly or implicitly in each socio-economic system, unique systemic management functions are established, which play an important role in achieving the goals of social production.

The presence of its own goals is the main difference between the organization and other artificial systems created by man. Goals — means, tasks and ideals of the system can be established as objectively as the number of elements contained in them. This allows you to explore the system teleologically, from the point of view of the output, and not deterministically, from the point of view of the input, which is a fundamental point from the standpoint of assessing the effectiveness of management.

A systemic view of an organization defines it as a purposeful system that is part of one or more other purposeful systems, and parts of which—the people—have goals of their own. Therefore, the study of the organization should include an analysis of three levels of goals: the system itself, its parts and the higher order system of which the organization is a part. The need to take into account such a large number of goals simultaneously forms both the imperative of the goal and the problem of goal setting in the activities of the organization, and, accordingly, management.

To manage an enterprise means to manage on the basis of goals. This provision is a key point in the practice of management. Considering the interaction between the enterprise and the environment from the system-cybernetic positions, Art. Beer defines the imperative of survival: “A slow change in the situation within both subsystems must inevitably lead to the fact that the criterion of survival will be accepted as an integral part of the activities of the enterprise, as well as the model of the environment that it creates for itself (for external influences affecting the enterprise, are also subject to changes) ”(Bir St. Cybernetics and production management. — M .: Nauka, 1965. — P. 194).

The influence of the socio-economic environment on the systemic functions of management can be represented as follows. Managers make decisions at the micro level, in relation to which the decisions made by the state are macro-level, forming the external environment of the enterprise. Three levels of goals are common both for an individual enterprise and for the state as a whole:

• tasks — the results that are expected to be obtained within the planning period;
• goals — results that are not expected to be achieved outside the planning period, but which the company expects to approach within the planning period;
• mission (ideals) — results that are considered unattainable, but approaching which is possible.

Most often, it is impossible to draw clear boundaries between these three levels, but in general it can be indicated that the mission provides for the desire to work in a certain direction, the goals — the achievement of some specific results, and the tasks have specific estimates and deadlines for their achievement. Accordingly, the decision-making levels are distributed among middle and top managers. An example of a firm’s mission could be a prompt response to the needs and wishes of consumers, the desire to ensure that consumers appreciate the firm.

The mission of the Soviet state was to achieve universal equality and build communism, the mission of the post-Soviet state was freedom and the building of a democratic society. The next level of goals represented strategies for building an appropriate socio-economic structure to achieve the accepted mission. The degree of influence of the mission and strategy of the state as factors of the external environment on the nature of the adoption of managerial decisions of the enterprise can be taken equal for both socialist — planned, and capitalist — market structures. At the same time, it can be assumed that the degree of detail of the goals of the third level — the tasks put forward by the state for a particular enterprise, forms the fundamental differences in the conditions for making managerial decisions for a socialist and capitalist enterprise.

The goals of the company are usually determined by the categories of income, profitability, profitability, market share, etc. The unifying beginning of these categories is the tendency to increase their quantitative estimates — the growth of the company. The enterprise is considered as an organism, and not as an organization. Therefore, the growth of the company is most often a goal, more important than which is only the survival of the company. And even when the concept of “development” is used in the formulation of the goal, the indicators adopted imply the quantitative growth of the company. At the same time, growth and development are not the same thing. Growth can occur without development (cemetery, dump). A country or an enterprise may develop and not grow. Development in this case is understood as a process in which the ability of an individual to satisfy his desires and the desires of others increases. In countries with a high standard of living, economic growth is beginning to be critically viewed as the main engine of social progress. Society no longer needs quantitative, but qualitative characteristics of the standard of living. The real threat to achieving the goals associated with the growth of the enterprise are resource limitations and problems of environmental pollution. Under these conditions, goals begin to reorient themselves from growth to enterprise development achievement. For the current situation in the economy of the Russian Federation, as studies show, the following thesis of P. F. Drucker is becoming extremely relevant: “In a dying industry, management should be carried out primarily on the basis of a constant, systematic and targeted reduction in production costs while continuously improving the quality of goods and services. In other words, management should be focused on strengthening the company’s position in the industry, and not on increasing production volumes. Here, special attention should be paid to the fact that it is the reduction of costs and the growth of the quality of goods that is the basis for strengthening the company, while most of the strategic directions in the domestic economy are associated with an increase in production volumes.

At the same time, the greater the level of dependence of the enterprise’s survival on the economic efficiency of production results, the higher the probability of coincidence between objectively determined assessments of efficiency and the implementation of system management functions. In this regard, the conceptual difference between the concepts of «market methods of management» and «traditional methods of doing business» in relation to Russian owners and managers from the standpoint of the duality of the content of the concept of «effective management» lies in the secondary nature of economic efficiency in the hierarchy of decision-making criteria.

Consequently, the genesis of managing a commercial enterprise in a market environment from a system-cybernetic point of view shows that:

Management is a process aimed at achieving a specific goal. The level of achievement of the goal determines the effectiveness of management in general and its tools — in particular;

in market conditions, economic efficiency is an imperative for all production activities of a commercial enterprise. Orientation of the goal to maximize profits provides a condition for the economic efficiency of production and increases the stability of the enterprise in a market environment.

Evolution of production and management concepts

Since the end of the last century, with the increasing complexity of production, ideas about enterprises as objects of management have changed and the principles of their management have changed.

Enterprise as a machine

It was believed that the industrial organizations that emerged as a result of the industrial revolution belonged to their creators and owners. Enterprises were seen as machines whose function was to serve their creators, to provide them with an adequate return on the time and money invested. Therefore, the main, if not the only goal of such organizations is to create profit. With this view of the enterprise, its employees were considered as replaceable machines or parts of the machine. Consequently, their personal goals and characteristics were considered immaterial. Very simple repetitive tasks were designed for humans, as if they were intended for a machine.

The adequacy of this idea of ​​the enterprise as a machine is maintained as long as the following conditions are maintained:

• the owner (private person or state) has unlimited power over his employees and can use it: hire and fire, in other ways encourage or punish them to the extent he sees fit;
• the threat of economic hardship associated with unemployment or reprisals must be serious and real for workers;
• the skills of workers should be generally low so that they can be easily acquired;
• the level of education and demands of workers should be relatively low.

At the beginning of the century, such conditions prevailed in the United States. The workers resisted them almost from the beginning. The growth of such resistance took place on a par with the growth of plants and factories.

Over time, the conditions that fed the mechanical concept of the enterprise began to change. First, the growth opportunities for individual companies as a whole began to be limited to self-financing. Therefore, many private firms have become public — joint-stock. Their property was scattered among a huge number of shareholders, most of whom did not come into direct contact with the workers. Management (hired managers) appeared, fulfilling the wishes of shareholders.

Secondly, the emergence of management, separated from ownership, was accompanied by the growth of social welfare and the economy, which reduced the threat of economic deprivation for working people.

Thirdly, the growing mechanization required higher qualifications of workers. The higher the qualifications became, the more difficult and expensive it became to replace them.

Fourth, increased levels of education and the adoption of laws restricting the use of child labor have raised the overall level of demand for wage earners. They no longer wanted to accept the conditions of life at the level of machines.

The mechanical concept of the enterprise did not correspond to the new situation in the industry. A new concept began to take shape.

The enterprise as an organism

In accordance with the new concept, an industrial enterprise was presented as an organism. That is, individual workshops and divisions of the plant, just like in the body, the liver, heart, brain, are interconnected and perform their functions. At the same time, the enterprise was endowed with its own life and goals. It began to be considered that the main goals of the enterprise, like any organism, are survival and growth. In many respects, the profit of the enterprise began to be considered in the same way as oxygen for a living organism: a necessity, but not the goal of life. At the same time, managers had to take full responsibility for their decisions.

Workers, workplaces and the society in which they worked were constantly changing. Exceptional demands were placed on workers and managers. It has become clear that the attitude of workers towards their work has a significant impact on how much and how well they work. When work gave less satisfaction, output fell sharply. With the introduction and spread of automation, the content of labor from a technical point of view has increased significantly. Investments in the education and training of workers became one of the main items of expenditure, which increased the cost of replacing workers. The more skilled a worker became, the more difficult it became for his boss to tell him how to do the job. Managers could only specify what product or result they wanted. Thus, the increase in the technical content of the work brought with it the increasing freedom of hired performers and the dependence of employers on them.

As the skills of workers increased, they became less and less inclined to blindly obey the enterprises that hired them. Therefore, their personal needs and job requirements became an increasing concern for employers who needed their qualifications. Under these conditions, it is no longer enough to consider the worker (worker, let alone engineer) simply as a separate body of the enterprise. For the successful operation of the enterprise, its employees already had to be treated as individuals with their own goals and values, along with the goals and values ​​of the enterprise as a whole. Here a contradiction arose between the new concept and the command-administrative management methods inherent in the previous concept.

Enterprise as an organization

Organizations existed before, but within the framework of the new concept, this concept was given a new idea of ​​​​the enterprise. An organization is a purposeful system that is part of one or more purposeful systems and a part of which people have their own goals. The nature of the impact on the enterprise of its elements depends on how it affects them, and in the same way the influence of higher-order systems on it depends on its influence on such systems. A fundamentally new moment in the tasks of management has become the need to take into account and coordinate the goals of an individual enterprise and the people working on it, as well as the goals of the systems that include this enterprise, in order to achieve the goal of the system (enterprise) in question. In essence, this concept is no different from the previous concept.

Lean

Lean production is a logistical management concept focused on optimizing business processes with maximum market orientation and taking into account the motivation of each employee. Lean manufacturing forms the basis of a new management philosophy. The purpose of such production is to achieve minimum labor costs, minimum terms for the creation of new products, guaranteed delivery of products to the customer, high quality at minimum cost. This concept is, in fact, another name for the concept of «enterprise as an organism», because the listed characteristics are just inherent in the organism. In accordance with the evolution of production conditions, scientific schools and areas of management were developed.

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references

• Articles on management from business coaches
• Graduate School of Management, St. Petersburg State University
• Russian Journal of Management
• 11 Rules of Executive #1
• E-book on the basics of management
• Electronic books on management (enterprise management)
• Corporate management: articles and publications
• Methods, models and theories in management
• Portal for managers
• Library of selected management articles
• Collection of books on management