Methods in management

Methods in management
See also
Organizational innovation Value management Innovation models Innovativeness Innovation and change Core process Work simplification Theory of innovation House of total quality model

Methods in management are as a tools aiding managers in performing various more or less complex activities of daily management process. There are various methods, methodologies, concepts, ideas and philosophies concerning management and it's very difficult to differentiate between them as these terms are frequently used interchangeably. This article simplifies this situation and treats all of them as methods. Out of a wide variety of methods applied in modern organizations, four popular methods have been chosen and described below.

Benchmarking

Benchmarking is a method which involves continuous and systematic searching and comparing the processes and practices of your own company with competitors and leading companies in the industry in order to improve your own solutions. In brief, this is learning from the best.

There are many ways of categorizing benchmarking that can be found in literature. One of them is to consider what kind of organization are taken into account to create a benchmark and this leads to four types to be defined:

• industry benchmarking - comparisons are made to companies in the same industry,
• competitive benchmarking - comparisons are made to direct competitive companies,
• generic benchmarking – comparisons are made to companies, which don't belong to the same industry,
• internal benchmarking – comparisons are made inside the company, e.g. between departments.

Second approach to categorize benchmarking is to consider the subject of comparisons, this includes :

• process benchmarking – the most detailed category taking into consideration how companies operates day by day,
• performance benchmarking – focused on products and services,
• strategic benchmarking.

Lean Management

Lean management is a way of managing a company whose essence is to "slim down" the company by continuously improving its processes and structure and focusing on shaping positive contacts with the environment.

The lean management concept strives for effective delivery of value to the customers. Two important aspects of this are:

1. fast value flow through the system, because even the most effectual cancer cure doesn't bring value if a patient is already dead,
2. a high quality of the end product, as even prompt collection of needed product will not bring full benefit to the customer if there will be important defects or malfunctions.

One of the most distinctive concepts in Lean management is eliminating waste. It derives from industry and was developed on the basis of Toyota Production System (TPS). The examples of ‘’wastes’’ that are tackled are overproduction, unnecessary move, waiting or defects.

Business process orientation

Business process orientation is a method that was developed in order to improve performance and competitiveness of organizations that were using traditional functional approach. It focuses on fulfilling customers’ needs thanks to improving internal processes and streamlining work.

From this point of view it may seam similar to Lean Management, but it has slightly different focus. While Lean is obsessed about eliminating waste, business process orientation emphasizes improving interdepartmental coordination, reducing costs and improving customer satisfaction.

There are studies that confirm business process orientation positive impact on such areas like:

• organizational performance,
• employee performance,
• business process efficiency,
• business process innovation.

It means that not only particular processes are more efficient thanks to process-oriented approach, but the whole organization and employees benefits from it as well.

When writing about business process orientation it's worth to mention that it is a fundamental concept to business process outsourcing, which brings additional opportunities in cost reduction and staff specialization.

Management by projects

Management by projects is yet another way to organize a company or tackle single challenge. Following PMBoK definition, project is a temporary endeavor undertaken to create a unique product, service, or result.

There are two basic ways to use a concept of managing by projects:

1. Use projects to change or deliver something in an organization that is not project oriented;
2. Build a whole organization in a project-based way.

In the first case we may have an organization of any structure and culture. Then, a project management method can be used to introduce a change in an organization - e.g. improve group of processes, introduce new computer system or reorganize an organization. It is also possible that this kind of organization would like to do something new, for example deliver new product or service to the market – it is also a good candidate for a project.

The second case is more complicated. Project-based organization means that almost everything that happens in the organization is managed by projects. This approach has been used by companies delivering new products frequently to the market and companies delivering B2B products to multiple clients. In that case, each product development effort is a separate project. After product delivery there might be a support or maintenance projects needed if a product requires it.

In some industries project-orientation is the most natural way possible. For example, event-organizing companies are project oriented, where a particular event is a single project and there is very small part of company operations that is not managed independently from projects – e.g. new clients research and HR processes.

In big organizations managed by projects, there might be a need to coordinate work between projects and to correctly allocate resources based on projects’ needs. These problems are solved by methods of program management and portfolio management.

Advantages of Methods in management

The advantages of methods in management are numerous and include:

• Improved decision-making - By using methods in management, organizations can make better decisions based on data-driven insights, rather than relying solely on intuition or past experiences. This can help organizations to stay ahead of the competition and make better use of resources.
• Increased efficiency - Methods in management can help organizations to streamline processes, reduce waste, and increase efficiency. By eliminating inefficiencies, organizations can save time, money, and resources, while increasing their bottom line.
• Improved productivity - By using methods in management, organizations can reduce costs, increase profitability, and improve overall productivity. This can lead to greater customer satisfaction and improved company morale.
• Enhanced communication - Methods in management can help organizations to better communicate with their employees and customers, which can lead to better collaboration and improved relations. This can help to build stronger relationships, which can lead to increased loyalty and better performance.

Limitations of Methods in management

• Complexity of the management process – Methods in management can be complex and difficult to understand, especially when they involve a large number of variables and elements.
• Time and resource restrictions – Many of the methods require a significant amount of time and resources in order to be successful and this can be difficult to manage within the constraints of a business.
• Lack of adaptability – Some methods may not be suitable for all businesses, as the environment and context is often different and some methods may not be applicable.
• Subjective nature – For many methods, the results are not always consistent and depend on the judgement of the manager making the decisions, which can lead to errors and mismanagement.

Other approaches related to Methods in management

• Introduction: Apart from the four popular methods of management described below, there are a number of other approaches related to management.
• Total Quality Management (TQM): TQM is a management approach that focuses on customer satisfaction and continuous improvement of the quality of products and services. It emphasizes on improving the overall performance of the organization by creating a culture of quality and innovation.
• Agile Management: Agile management is a project management approach that emphasizes quick and flexible response to changes in customer demand, technological advances, and other external influences. It relies on iterative, incremental and adaptive approaches such as Scrum, Kanban and Lean.
• Knowledge Management: Knowledge management is an approach that focuses on effective collection and use of knowledge and information in the organization. It helps to maximize the collective knowledge of the organization and ensure that it is used to the fullest potential.
• Six Sigma: Six Sigma is a data-driven approach to management that focuses on eliminating defects and variation in processes by measuring and reducing them to a minimum. It emphasizes on using statistical techniques and tools to identify, analyze and ultimately reduce process variation.
• Summary: In addition to the popular methods of management described above, there are other approaches such as Total Quality Management (TQM), Agile Management, Knowledge Management and Six Sigma that are also used for effective management of an organization. Each of these approaches has different goals and focuses on different aspects of the management process.

References

• Meade P. H. (2007), A Guide to Benchmarking , University of Otago, Inc., Dunedin
• Pepper M.P.J. Spedding T.A. (2010), The evolution of lean Six Sigma,International Journal of Quality & Reliability Management, Vol. 27 No. 2
• Project Management Institute (2013)., A Guide to the Project Management Body of Knowledge (PMBOK Guide) - 5th Edition, Project Management Institute, Inc., Pensylwania
• Zaheer A., Rehman K.U., Khan M.A. (2010), and testing of a business process orientation model to improve employee and organizational performance, African Journal of Business Management Vol.4

Author: Paulina Sosińska

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