Basic management

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Over the past years, we have looked in this column at many different topics relating to doing business. We have also tried to see how some international concepts apply to doing business in Ethiopia. While it is good to learn about general and global business concepts, it is also good to ask ourselves how they apply in Ethiopia. It is not a good idea to try and implement concepts as blueprints without critically examining them and piloting their usefulness here. But it is also not wise to reject concepts, which originate from other parts of the world, without trying to see how they could be adjusted and applied here. My advice: read and learn from others as much as you can, try out, adjust and apply what is useful. One problem that I observe is that many managers are not consistent in applying their management style or systems. As a result the business is not operating in a consistent way either. It is possible to bring some structure and discipline in management which will help managers to do what they have to do: manage.
I have always found it useful to make a division into the five basic elements of management, which are:

  1. Strategic Management
  2. Production Management
  3. Human resources Management
  4. Financial & Administrative Management
  5. Marketing Management

You can structure your business around these elements, for example by setting up departments and hiring people with specific management skills. You can also structure the agenda of your board and management meetings, following this basic division. Even your annual, quarterly, monthly, weekly and daily planning, as long as you deal with the important issues under each division.

  1. Strategic management deals with the longer term plans of the company and decisions related to that, for example: Are you going to expand, develop other products, export your products, and position the company more strategically?
  2. Production management looks into the production process, quality, quantities, product development  and design.
  3. In human resources management you will include issues like job descriptions, recruitment & selection, performance assessment, staff development, motivation, discipline.
  4. Financial management works the accounts, costing, pricing, analyses the figures, deals with taxes, paying the bills, the payroll. And administrative management includes stock control, logistics, contracts, archives, assets etc.
  5. Marketing management deals with advertising, customer relations, communications, PR, networking, sales, packaging and information.

We must realise that no business can run well while ignoring one or more of these elements of management. And no manager can do it all, so it is important to hire people who do know about the specifics, who are specialised in their own field. I see many businesses which are weak in their human resources management, resulting in a high staff turn over or little motivation. Other companies ignore their production management, resulting in the quality of their products going down instead of improving. Others again do not make a proper analysis of their costs to set the price for their goods, not knowing whether they are loosing or making money on certain items. Manage your business in a comprehensive way and be consistent in it is my suggestion. Below follows a simple table which can be used during planning meetings and reviews. It can be updated during every next meeting and thus become a dynamic instrument which will help in focusing on what is important. To focus on what is important I suggest to limit the issues in each management section to three only. Try it, you may like it.

Strategic management
Issue    What needs to be done    By who     By when
1.
2.
3.

Production management
Issue    What needs to be done    By who    By when

1.
2.
3.

Human resources management
Issue    What needs to be done    By who    By when

1.
2.
3.   

Financial & administration management
Issue    What needs to be done    By who    By when

1.
2.
3.

Marketing management
Issue    What needs to be done    By who    By when

1.
2.
3.