By economics, we mean the science of how the subjects of economic activity created by people carry out the production of various products and services, in the conditions of a limited amount of resources. At the same time, such activities should be profitable. This science has many integral parts, one of which is the economics of management. In essence, this part refers to various managerial processes as a specific subject of economic activity, and entire industries.
Management is the English word, which appeared in common use with the term market economy. Scientifically, it is understood as the study of the process of effective management of specific subjects of economic activity. This means that it is also closely related to the economy, but it is a separate science for studying. But in practice, such terms as economics and management are closely interrelated, and are constantly studied in a complex. This is easy to explain. As it was said above, management is a doctrine about the intricacies of managing various processes in an enterprise.
Economics of management, this is also a teaching that is based on the principles of planning and methods for achieving success in whole branches of the economy, or a specific subject of economic activity. This is a direct link between the two terms. Now we need to decide in which places, they can intersect with each other. It is important not to confuse the fact that, in itself, management is designed for use in microeconomic environments, and these are direct producers of products and services that go to the end user. Economics of management is the science of the general principles of planning not only for the subjects of economic activity, but for entire branches of the economy.
In fact, it does not give prescriptions or scientific justifications, in terms of “how to succeed in producing products so that the latter is in high demand,” but it says what to do scientifically, what principles should be used to compete in the market with other enterprises. And if this applies to entire industries, then there are generally scientific justifications aimed at planning the general principles of the industry. For example, how to produce cars properly so that they are competitive. This is the fundamental similarity and difference of these sciences.
Concept of management
As mentioned above, in modern management, the concept is associated with the ability to manage the various processes that occur in an enterprise that produces a variety of products and services. Some even identify business with this word, but it’s not so based on the following. Business, this is the discovery of his business. In fact, a businessman decides to invest his capital in the implementation of a plan for the production of any product or service, and bears full responsibility and all the risks associated with his money.
The manager who owns the notion of management, in most cases, carries out various managerial activities, which is based on the fact that the company and its owner can produce competitive products, and make a profit. He is not connected with any financial and other risks, but simply is a hired person who has a specific task. From this comparison, one can come to the conclusion that in the notion of management, modern science invests the availability of knowledge related to the professional approach to effective management of the business entity aimed at achieving the set goals.
There are such management functions of management:
- management of personnel;
- management of production technology;
- Sales management;
- general management of the business entity.
As no other company knows, it cannot exist without staff. After all, people who carry out their labor activity, in fact, create the final products or services that enter the market and find their final consumer. To ensure that they can fulfill their labor duties in full, and strived to achieve success, in any case, a control and effective management system is necessary. This is the responsibility of the management (manager) of personnel management. A person who is engaged in this must have many qualities, and especially knowledge, so that the team managed by him, could not only create competitive products, but also improve it. A good team is 40% of the success of an enterprise.