BUSINESS MANAGEMENT

Principles of Business Management

Introduction1

Discussion1

What do we mean by organization?1

Why do organisations emerge in an efficient economy?1

What is the hierarchical approach to management?2

What are its advantages and disadvantages?3

Advantages of Hierarchical Management3

Disadvantages of Hierarchical Management4

What do you understand by a network approach to management?4

What problems are likely to be associated with it?5

Coordination Problems5

Lack of Control6

De-motivation6

Compromising Intellectual Assets6

Associated Risk6

What is strategy?6

Operations Strategy6

Business Unit Strategy7

Corporate Strategy7

Describe two models of strategy7

Ansoff Matrix7

BCG Matrix8

Conclusion8

References10

Principles of Business Management

Introduction

The paper aims to explore principles of business management by elaborating key concepts of management. Firstly, the paper defines organization and its reasons to emerge in an efficient economy. Secondly, the paper explains hierarchical approach to management by identifying its advantages and disadvantages. Thirdly, the paper provides answer to network approach to management by highlighting associated problems. Lastly, the paper sheds light on the concept of strategy by describing two models of strategy. Finally, the paper provides conclusion on the overall understanding of core concepts of business management.

Discussion

What do we mean by organization?

According to Evi (2013, p. n.d.), the term 'organization' refers to a group of individuals who are structured and managed in order to achieve a collective goal. From a business perspective, organization defines structure of relationship between individuals working a firm, different institutions and enterprises, which are formally designed (Gamage, 2006, p. 76). Organization is a separate legal entity with open system, which means it influences and is influenced by the external and internal environment. Typically, organizations are based on a proper management structure, which clearly defines and assigns roles and responsibilities to individual employees. Organizations vary in their size, nature of business, legal status and scope. Typically, organizations have physical and intellectual assets, which denote true worth of the company (Wright, 2007, p. 145).

Gamage (2006, p. 76) has described organization as a group of two or more individuals, who join together in the pursuit of a common goal. Organizations can be formal and information with distinctive characteristics. A formal organization is established on the basis of certain objectives, which are announced, limited and explicit. Formal organizations are established with a common goal and it requires employees to engage in a formal relationship, which might be temporal, permanent or contractual (Gamage, 2006, p. 77). Operations and processes of an organization are driven by its mission statement that provides the reason for organization's existence. Therefore, organization is a mechanism that enables individuals to combine their efforts and coordinate with each other in an attempt to achieve individual and organizational goals. Organizations are built with the objective to use skills and talents of individuals in order to achieve results, which are beyond the discretion of individuals. In the modern world, organization provides a platform to affect and satisfy individual needs of every human (Gamage, 2006, p. 77).

Why do organisations emerge in an efficient economy?

In the modern world, organizations are provided with two types of economies including efficient and emerging. An efficient economy enables organizations and individuals to make efficient use of available resources in order to maximize productivity ...