Why are some of the medium and small-scale companies performing weakly against the competition with the world’s most famous or you can say Top-5 companies of the world?
I know you are thinking about the above question. A global survey of around 12000 companies covers almost all types, whether it is a small-scale industry or a large-scale company. And which also included Top Executives, CFO, CEO, CXO, COO, etc. There are many reasons come into the picture stating that why many small-scale companies failed in their operations.
Inexperienced in business, Safe planning of working capital, Failure in Business Development, Product Failures, etc. are the main reasons behind the company’s failures. 36% of business owners accept the reason that they could not make a balance between the actual operational cost of a company and fewer sales in the company. Whereas 28% of the top management officials believe that poor management capabilities are the main reason behind the loss-making company.
If we see the same situation in India, Only 2 out of 10 Startups can taste success. Rest 8 startups fails due to poor management capabilities.
Now the question arises, What are management capabilities? If we take it as a simple term then it is Good Planning, True Coordination, Continuous or Regular Monitoring, Good alignment towards the company’s goals, and Regular Observation. If any manager himself sticks with these principles then there will not be any hurdles come in his success. Implementing good management is an art and a skill too. If management drives their company through the basic elements of management then they will surely become successful.
In a training program on leadership, and during the training, the trainer asked a simple yet effective question to his audience. And to be surprised all the attendees were top management executives. Still, no one could answer that question.
But What was that question??
It was very simple, What is the definition of management capabilities? Trainer feels that even a definition of management is forgotten by the managers in this competitive world. What is the reason behind this? Today’s world is a competitive world. Corporate Executives are working hard beyond the time and their working capabilities and they are too busy to contribute to their company’s success. Even they are learning a lot to keep themself ahead of their competitors. They are also attending various training programs. As we can see there is a raise in workshops like Leadership, Time Management, Creative Thinking, Work Beyond the Boundaries, etc.
Famous author Peter Drucker believes that the foundation of management acts as a link between the workers and managers to ensure smooth operations. Management capabilities are attributed to the 6 basic principles, 1. Man 2. Machine 3. Multiples 4. Method 5. Money 6. Market
Recognizing the value of human resources as the heart of any organization, principles of management emphasize empowering and motivating individuals to maximize their potential.
Principles of management focus on optimizing the use of machinery and technology, ensuring efficiency, productivity, and continuous improvement.
The principles of management highlight the importance of collaboration, teamwork, and harnessing the diverse skills and perspectives of individuals to achieve synergy and accomplish objectives.
Effective management principles emphasize the use of structured and systematic approaches, providing clarity, consistency, and a framework for decision-making and problem-solving.
Principles of management acknowledge the significance of financial resources in driving business success, emphasizing responsible financial management, budgeting, and resource allocation.
Management principles recognize the influence of market dynamics, competition, and customer needs, emphasizing strategic planning, market analysis, and adapting to changing market conditions.
Tips for Developing Management Capabilities in a Company:
1. Develop an understanding of the entire life cycle of the business as soon as possible.
2. 70% of a company’s success is based on product sales. Spend most of your time in it.
3. Keeping the operation cost low
4. Always keep the employees motivated so that productivity is excellent
So what you have learned from this article? Share your thoughts. And stay tuned for blog posts like this and do not forget to follow Rain Infotech Private Limited.