Business Manager: 5 Key Skills That Will Assure you of Success in your Career

The contemporary business manager encounters challenging situations that have never been experienced in the contemporary corporate world. Learners undertaking courses in management studies should learn the diverse roles in defining good management and organizational performance.

The Core Competencies that a Business Manager should possess

Strategic thinking is the art of the successful management. An experienced business manager comes up with detailed plans that would fit organizational goals by taking into consideration the opportunities available in the market so as to sustain the growth and competitive advantage.
Excellence in communication is what sets the great business manager apart. Well-worded key messages, power to inspire teams, the capability of conducting productive meetings is the set of tools of current business manager.

Management skills Development of Future Managers

Successful careers in management are described by effective pressured decision-making. Those who take management courses are taught that every business manager needs to be able to balance his mind using analytical skills and brain to be able to solve complex situations within the business.
Employee development and team building constitute very important management processes. Good business manager is the one who invests in the human capital and builds the conditions under which personal strengths lead to the team victory.

Management Academic preparation

The universities all over the world focus on practical abilities and knowledge as well as theoretical one. The preparation of students who intend to undertake management roles involves case study analysis, opportunities to study as an intern and a mentor that exposes them to real situations.
http://StudyCreek.com offers comprehensive acclimating help to students who want to learn more about management as well as in other studies since it is run by highly experience personnel who offer personal conversions to students who are longing to become managers.

Professional Resources and On-going Learning

Business management is a dynamic field and this means that one will need constant advancement of skills. There are professional development materials that can be used to enhance continuous learning and growth in the career, such as those featured on http://dissertationhive.com.
To excel in managerial subject, one needs to be committed, be a clever thinker, be determined to be the best. Every business manager influences the organizational culture as well as promotes the performance result that characterize long-term success.

SAMPLE QUESTION

ASSIGNMENT ( NO MORE THAN 300 WORDS)

Why study managerial economics? The most important task of a business manager is to make decisions. Decisions are the means by which organizations turn ideas into action and can have a positive or a negative impact. However, decision making can be a complicated process, especially in a business setting. Solving a problem requires comparing alternatives and thinking about the probable results. Furthermore, successfully implementing a decision can be just as much of a challenge. Every business decision will have direct and indirect results, influencing the future of the company. Consequently, a structured process for decision making takes away much of the uncertainty embedded in the decision making process. The six step decision making process is one such approach.

The steps included in this are

1. defining the problem,
2. determining the goals and the objectives of the firms,
3. exploring the alternatives,
4. evaluating the alternative solutions,
5. selecting the optimum solution and
6. performing sensitivity analyses.

https://saylordotorg.github.io/text_principles-of-managerial-economics/s03-demand-and-pricing.html

The influence of the Macroeconomic Environment

The general health of the economy has, of course, an influence on the firms. As we experienced in 2008-2010 when an economy enters a recession, consumers demand tends to be reduced for all products, and all businesses suffer. This is part of what is called the business cycle, which describes the succession of recessions and economic booms that all economies go through.

Clearly, business manager have no power in this macroeconomic environment. It is important for them to be aware of it, however, if only because many governmental policies are decided as a response to the economic environment, and they directly affect all businesses.

For instance, during the recent recession, the Federal Reserve (who is the central bank of the U.S. responsible for monetary policy) has decided to keep interest rates as low as possible. The goal was to stimulate the economy by encouraging consumers to consume (and borrow), and firms to invest which is what interest us here. Managers need to keep a close eye on these policies since the level of interest rates at which they can access credit has a direct influence on the costs of their projects.

The mechanism used by the Federal Reserve (Fed) is also worth considering. The market for money operates just like any other market, with the price adjusting to find the equilibrium between demand and supply. The price of money, so to speak, is the interest rate. Thus, when the Federal Reserve wants to lower the price of money (the interest rate), it increases the money supply.

This is done mostly by purchasing securities on the open market, which is the way the Fed injects money into the economy. Because of the depth of the recession of 2008-2010, the Fed has purchased several trillions worth of securities, pushing the money supply to very large levels. If the money supply is not reduced, it will result in high inflation over time – following a process that would be too long to discuss here.

The answer may seem easy: the Fed can reverse its policy, sell the securities it purchased, and take the money out of the market. The risk of inflation would disappear, and high inflation is never good news for business since it tends to reduce consumption.

Things are not that simple, of course. Remember that the Fed kept interest rates low by purchasing securities. Selling them would result in a rise in interest rates, which would increase the cost of investment.

In other words, the Fed needs to find the balance between avoiding inflation, and not raising interest rates too high. If the actions of the Fed seem to indicate that interest rates are likely to increase soon, a well-informed manager could anticipate on investments that were planned for a future date, and thus benefit from lower borrowing costs.

Let us leave these macroeconomic considerations and discuss an important assumption we will make throughout this course: profit-maximization is the objective of private firms. We will then end this lesson by a presentation of the focus of this week’s readings and assignment, a model for optimal decision-making.

Do Firms Seek to Maximize Profits?

Generally speaking, the search for profit optimization is considered the main goal of all private sector decisions. Thus, in its simplest version, any firm is assumed to have profit maximization as its primary goal. In other words, the firm’s owner or manager is assumed to be aiming at maximizing the firm’s short-run profits.

This assumption has been shown to be very effective in explaining decision-making. There are of course situations in which the objective of the manager is not as clear-cut, which has led to the development of alternative theories of firms’ behavior. For instance, size or growth maximization could be the manager’s objective – especially if his or her salary is directly linked to the growth of the company, which happens quite often actually.

Other models assume managers are mostly concerned with their own welfare maximization, which leads to the issue of risk tolerance. They may prefer a safe investment that provides a relatively small profit, to one that may generate much higher profits, but that would be riskier. The risk component generates stress that the manager may want to avoid.

As a consequence, if you were on the Board of a company, you should ask yourself: when a risky venture is turned down, is this because of inefficient risk avoidance, or does it reflect an appropriate decision from the standpoint of profit maximization? Or, in other words, is our CEO doing his job?

Let us go back to the concept of profit maximization. Even though alternative models have their merit, it is clear that managers are forced by market competition to seek value maximization in their decision-making. Furthermore, stockholders are very much interested in value maximization since it affects the value of their portfolio and the returns on their stock investment. Clearly, managers who would pursue their own interest, instead of those of stockholders, risk losing their job.

In summary, the goal of profit maximization is at the root of firm’s behavior and will guide our reasoning through this course.

2. Respond to this discussion. (No more than 250 words with a question)

In Managerial Economics, profit is defined as the difference between total revenue and total cost. While it may seem logical to increase production to the maximum capacity, profit is actually maximized at the optimal output level, not the maximum output.

The optimal output occurs where marginal revenue (MR) equals marginal cost (MC). Producing beyond this point leads to higher costs than revenue, reducing profit. As explained in the Principles of Managerial Economics textbook (Saylor Academy), “as long as the marginal revenue is greater than the marginal cost, the firm increases its profit by producing more” (Chapter 4, Section 4.3).

This demonstrates that understanding marginal analysis is key. The maximum profit is not achieved by producing the most units, but by producing up to the point where MR = MC, where the additional revenue from producing one more unit exactly equals the additional cost.

3. Respond to this discussion. No more than 250 words with a question)

As mentioned in the prompt, a company maximizes its profit at the level where the difference between its total revenue and the total cost is the largest. This means that the company is earning money after paying off all costs. To find the profit maximization level, it becomes really important to understand how much the company is able to sell, the price at which customers are willing to buy the product and how much it costs the company to produce the product.

It is often believed that increasing production might result in maximum profits, but that is not entirely true. Profit maximization occurs at the optimal level of output where the Marginal Revenue equals the Marginal Cost. This means that the cost of making one more item is equal to the revenue the company makes by selling that one extra item. Producing above or below this point might result in the company not making maximum profit. 

Profit maximization is also very essential for a company’s long-term success. If the company keeps on producing more units to maximize profits rather than producing at the level where the MR = MC, it might start seeing losses. Hence, understanding the optimal level of output and producing at that point will result into profit maximization. 

 ANSWER

1. Assignment Response
The reason to study managerial economics.
Managerial economics plays the key role of making informed effective business decisions. Fundamentally, it uses economic theories and quantitative methods to find realistic managerial solutions to problems. Business manager constantly have to make decisions concerning prices, allocation of resources, production, as well as investment. Managerial economics offers a systematic procedure like the six step decision-making procedure that guides managers in defining issues, developing options, and choosing the most appropriate solutions guided by facts and research.

Significance of managerial economics may also be seen on the realization of effect of external forces, more especially the macroeconomic environment. An example is when the economy enters recession, the demand of the consumers normally drops, and this has a direct impact on the revenue generated by firms and on investment. The managers should know the monetary policies such as interest rate changes by the Federal Reserve since the monetary policies dictate the cost of borrowing the money as well as the viability of the investments.

Moreover, profit-making techniques studied in managerial economics are considered to be one of the primary objectives of the companies. It focuses on decision making at points where marginal revenue is equal to marginal cost therefore when each unit is produced, it is able to add to the profit and not reduce it. It is also considered to be risk tolerance and practical constrains since managers are not efficient in realistic situations and might not necessarily behave as pure profit maximisers because of personal or institutional restrictions.
Learning managerial economics would therefore provide a decision-maker with the tools to deal with environment that is complex, competitive, and uncertain, and keep in line with organizational goals.

2. Discussion Response
You have got a good point on role of marginal analysis in profit maximization. The naive thought of many new business manager is that any amount of production is better, which is not true since there is an optimal level of production which can help to increase returns or incur losses after throwing more lots into the production process.

The equation MR = MC truly is the decision-making cornerstone for determining optimal production levels. What makes this concept powerful is its flexibility across different industries. It does not matter whether one chooses a bakery, a car manufacturing electronic company or a software company, this principle is important in how far production is when it starts interfering with profitability.

Moreover, knowledge of marginal cost will assist companies to manage their operating costs. As an example, a factory may have a marginal cost increase at a very high price of producing an addition single unit due to overtime or overwork of equipment, continuing to produce that additional unit may not make sense even with an increase in revenue.
I like that this sense of balance is expressed in your response very much. And Your question to me is:
The smaller firms who have limited data or analytics ability, how can they calculate the marginal cost and revenue in order to put this principle into practice?
2. Discussion Response

Your explanation achieves its point in stressing the need to establish the optimum level of production and not the maximum one. I also enjoyed the way you linked profit maximization to long term success because overproduction may translate into wastage of resources, holding costs and saturating the market.

Another element is essential as well, and is the demand aspect of the equation. The producer has to create more at optimal price even when the marginal cost is constant unless the market is ready to accept to take more units at prices that are profitable. That is why pricing strategies, elasticity, and behavior of consumers are equally important in the process of decision-making.
The point you have raised makes sense that the firm disregarding the principle of MR = MC can reduce its profits. It is a cautionary note that one should grow strategically and not just in volumes.

Having said this, real life situations are usually uncertain. An example is demand may go up and down, or input prices will increase or competitors will alter the prices unexpectedly. This poses problems in reliability of mechanisms of always coming across where MR equals MC.
Now your question to me is:
What can businesses do to compensate their production choices when the state of the market changes rapidly, and it becomes increasingly difficult to estimate or maintain the best possible production rates?