Branches of Business Management
Engineering management and R&D management are among the types of management with the most overlap. Engineering management may involve more manufacturing – turning research into sellable items – than R&D management, but often, these two types of management entail similar tasks.
Though some people may consider business management a single industry or career, it is actually a diverse field comprising many sectors. Whether you’re looking to launch a career in business management, start your own business or pursue an advanced degree or certification, this guide should help you distinguish among the many branches of this large sector and understand the role each plays in an organization.
1. Financial management
Financial management deals with finding a healthy balance between profit and risk so that even with a setback, the business is profitable in the long term. This type of business management involves planning, directing and coordinating with the accounting, investing, banking, insurance, securities and other financial activities of a business.
The three key elements of financial management are financial planning, financial control and financial decision making. Short-term financial management is often referred to as “working capital management” and relates to cash management, inventory management and debtor management. Both the assessment and technique of financial decisions fall under this type of business management.
2. Marketing management
Marketing management focuses on the practical application of marketing techniques and the management of a company’s marketing resources and activities. The four major areas of marketing management are company analysis, collaborator analysis, competitor analysis and customer analysis. Marketing management also includes brand management, as well as marketing strategy and pricing.
To maximize return on investment, it’s essential to develop branding opportunities and to execute marketing tactics based on careful analysis of all aspects of your business. The scope of a business’s marketing management depends on a business’s size and industry. Effective marketing management uses a company’s resources to increase its customer base, improve customer outlook and feedback, and increase the company’s perceived value.
3. Sales management
Sales management involves overseeing and leading sales teams. As a sales manager, you drive your sales reps to foster strong relationships with prospects, convert them to leads and move them through the sales pipeline. Sales management often works hand in hand with marketing management.
4. Human resource management
Human resource management (HRM) focuses on the recruitment and management of an organization’s employees. This includes compensation, hiring, safety and wellness, benefits and other aspects of employee administration.
A common misconception about HRM is that it’s solely the responsibility of a human resources department or individual. In reality, all department managers should understand that effective HRM enables employees to contribute effectively and productively to the overall direction and goals of the company. In the past, HRM focused more on personnel administration, but a modern HRM approach uses employee programs to make a positive impact on both the staff and the business as a whole.
Did you know? HR software can help you manage all of your HR needs so you can focus on growing your business.
5. Strategic management
Strategic management is the application of strategic thinking to the job of leading an organization. Many of the other branches of business management revolve around strategic management, because the success of a business is often determined by financial, marketing and operational strategies.
Strategic management focuses on the big picture of a business: Where do you want to be, and how can you get there? Strategic management is adaptive, incorporates a competitive strategy and keeps an organization relevant. The most important element of strategic management is the formulation of the organization’s goals, taking into account external factors such as regulation, competition and technology.
6. Production management
Production management is the decision making involved in the manufacturing of products or services. Production management techniques are used in both manufacturing and service industries. This type of business management is about converting raw materials into a finished product or service, and as such, this sector often references the “four M’s”: machines, methods, materials and money.
One of the main focuses of production management is ensuring that production is efficient, and this includes inventory control and employee training. Inventory control is by far the most important responsibility of product managers and involves tracking all components of production, such as required materials and finished goods.
Another major focus of a business’s production management team is the research and development (R&D) of both the production process and the product itself. Businesses looking to expand, cut costs and develop newer and better products must conduct R&D as a part of their product management.
Business administration vs. business management
Degree program differences
When studying business administration, students often learn about standard business subjects. Once they have a grasp on the different general business roles, they select one and declare it as their major area of study. For example, a student may major in business administration and choose accounting as their specialty. Upon graduation, this student may pursue an accounting role. Often, when students study business administration, they hope to learn more about business as a whole to determine which specific position they would like to pursue.
When studying business management, students take courses to help increase their leadership skills in addition to exploring specialties within the business field like human resources, communications, ethics and management. Business management students often also participate in events or organizations that help them develop their leadership skills, such as student organizations within the business department, student government or different academic clubs.
Work environment differences
Business administration employees often start working in a specific department within a business that leverages their area of specialty. They tend to dedicate their efforts within a single department rather than overseeing several teams or processes across functions. They administer the efficiency of a company’s core operations and are engaged in research, strategic planning and forecasting.
Business management employees often start in positions in which they develop skills to help them manage people and lead a department. Many organizations expect business managers to assume leadership roles and oversee day-to-day business tasks and operational duties. Once a business manager is serving in a higher-level role, they may oversee other employees and make department-level decisions.
Careers in business administration
1. Human resources specialist
Primary duties: Human resources specialists are in charge of potential and current employees. They are directly involved in recruiting employees for a company and conducting screens and interviews. Many also work with current employees to build company culture and engagement. They also may be in charge of employee tax forms, payroll documents and personal information. This role often attracts employees with strong communication abilities, self-motivation and time-management skills.
Primary duties: An accountant creates financial reports for departments of a company to ensure that accounts remain responsible and stable. They also track and analyze data involving financial decisions. Accountants strategize and then recommend changes to help leadership manage proper spending habits. Many accountants are analytical, mathematically minded and have strong organizational skills.
3. Marketing specialist
Primary duties: Marketing specialists work with sales and product teams to build campaigns around different products, analyzing different target audiences and strategizing how to sell to them. They often serve in different roles within the marketing department, including content management, market analysis and product marketing. Their main goal is to determine what effectively sells a product or service. Marketing specialists are often well-organized, effective communicators.
4. Business analyst
Primary duties: Business analysts compile reports to determine what a business needs to do to improve. They work more on the developmental side of business, using software to create and analyze strategies to grow their business. They often fulfill the role of project manager and work on individual initiatives to find solutions to benefit the company. Business analysts should be knowledgeable about different software, have leadership abilities and be problem solvers.