Evolution of management

Professional business, despite its not too long history, underwent a radical and very intensive evolution. This development had several main stages, one of which is the evolution of management. The formation of the science of business management has historically been influenced by socio-economic factors in the conduct of social production. The evolution of management in the historical context began at the time of the initial accumulation of capital. The Age of Reformation and Enlightenment in Europe contributed to the development of cultural and political conditions for the development of industry. In this period, there are laws of centralized states that protected such representatives of society as merchants, artisans and merchants. Success based on hard work, understood as a measure of the effectiveness of the functioning of capital, and fair trade served as a breeding ground for emerging capitalism.

The evolution of management gained a new turn during the first industrial revolution, which opened mass production, which replaced the small handicraft manufactory. The existing trade also prepared a certain economic infrastructure: warehouses, roads, finance, transport. This infrastructure was able to unite different countries, creating a single market for goods. Financial capital became cramped, and he began to search for various areas of his application and found them in the intensive development of industry. The new capitalist enterprises felt the need for labor, and they were able to get it as a result of the collapse of feudal economy. Capitalist enterprises and firms for a long time did not have a civilized competition. The exploitation of cheap child and female labor, the brutal competitive struggle to "survive", the robbing of colonies and the merciless seizure of all new markets are the features of "free capitalism" that existed until the end of the 19th century.

The current state of affairs did not correspond to the intensive development of science and technology, so new trends began to appear. The energy of some entrepreneurs went to the improvement of the old and the invention of the latest industrial technology, the organization of efficient production, with the goal of occupying a niche in the market. The industrial revolution, ultimately, ensured the transition to consolidation and development of the production structure of mass production. The evolution of management at this moment becomes especially noticeable, since the main goal of most firms at that time was significant economic growth. Profit was provided at the expense of mechanization and expansion of production, increasing the output of standard products, reducing production costs. At that time, those manufacturers who offered standard products at a low price won. With this approach, the attention of entrepreneurs and their managers was focused on the efficiency of the production mechanism. It is very important to understand the relationship between the state and business in that era. The business sector was separate, social and political public control was minimized. Economic protectionism and taxation policy is all that business needed from its state. The era of mass production, as everyone knows, ended in a deep crisis of overproduction.

Past production attitudes came in complete contradiction with the new demands of consumers. Thus, the evolution of management required a change of orientation from the production economy to the market economy. The reserves of cost reduction at the enterprises were completely exhausted. The success of the company became highly dependent on external conditions. The management tasks required not the conquest of sales markets, but the creation of new ones. The industries that produced consumer goods and enterprises with complex technological processes, which produced tools, component parts, semi-finished products and machine tools, were the first to become market oriented. The period of mass marketing gave birth to a comprehensive marketing convention, which was to balance all the requirements of production and marketing. The saturation of the market and the overproduction of goods put an end to this era.

At this time, the middle class also grew up, which had higher demands. The roles of managers and entrepreneurs also changed, which under new conditions could not successfully manage their own business, so the role of managers (managers-professionals and line managers) also increased. Managers ensure the maximum productivity of all resources and are responsible for carrying out scientific and technological progress and obtaining the greatest efficiency of the entire economic life.

The evolution of strategic management is characterized by the emergence of specific methods and their introduction into the permanent practice of companies and firms. Historians identify four main stages of planning: long-term planning, budgeting, strategic planning and management.

The evolution of financial management is characterized by the emergence and development of specific financial activities of entrepreneurship and business. The growing needs of private business have posed the task of specifically studying all the provisions of this management, as well as the need for its isolation as a separate field of knowledge.