Introduction
Business management entails coordinating and supervising various functions and projects in accordance to the firm’s policies. Business managers are expected to organize, plan, control and oversee the implementation of business plans and strategies with the ultimate aim of accomplishing the goals and objectives of the firm. With this in mind, managers have an obligation to study, analyze and evaluate the business trends over time to enable them make critical decisions that will spearhead their businesses to success.
The need to study history and transition in the business market is indispensable in the pursuit of a successful business venture. It is also important to learn from the predecessors on how they tackled various aspects of management and the successful business strategies they deployed as opposed to using the many theories and models proliferating from every facet of the economy.
For instance, the role played by technology in increasing proficiency and productivity of the firm cannot be overlooked since over the years managers have been embracing technological advancement with an aim to increase their profit margins and manufacture quality goods and services that will meet consumer’s wants.
History also helps managers approximate their current position in the market using data and statistics from the past market players and this has always provided reliable platform for managers to make rough estimates.
In the early 18th century, economist such as Eli Whitney and James Watt designed concepts and theories that could be used to ascertain productivity of a firm which included pricing, book-keeping and debit and credit accounts which are being used up to date with slight modifications (Alan, 1986). This was found to be more reliable and accurate than the theories, models and perceptions documented in books and other business related literature materials that are mere speculations with no proven facts.
Benefits of Studying History of Business to Managers
Studying history and evolution of businesses is very critical to managers as it gives them a reasonable business framework and limits within which to operate in the pursuit for excellence. Some of the benefits include:
Knowing the past helps in speculating the future
In accumulating and harmonizing the past business ventures and activities, managers will have an opportunity to articulate and predict future trends using statistical data analysis of the previous years. This is a more reliable approach to study the market compared to acquiring information from text books and business journals which may document theories that have not been tested with models that may not apply in ideal situations.
In being able to predict the future market trends, managers can strategically position themselves in the market in readiness for the expected shift in market equilibrium hence reaping bountifully from such predictions before other competitors get established in the new market. More often than not these predictions postulate accurate and reliable information hence when tactfully implemented, the business is bound to record very high sales and huge profits before other firms in the market come into play.
Understanding humanity
Historical studies help managers know how to deal with people more so at the work place. Through such studies, managers have the opportunity to learn from their predecessors on how best to interact with their employees with an aim to promote cohesiveness and create an efficacious environment for optimum productivity.
One of the vital assets that the successes of most top-flight companies ride on is the human resource. They are the backbone and driving force of any business firm and the way they are handled really matters as far as the success of the company is concerned. Managing employees entails recruiting competent individuals, training, evaluating and retaining those with exceptional skills and aptitude.
In developing people management strategies, managers ought to be keen on the strategic plans that are viable by using information from previous plans that have been tested before and found to be fruitful.
For instance recognizing and rewarding of exemplary workers who display excellent skills and innovative minds that adds value to the firm can be a strategy used to motivate and retain employees with unique potentials and inspire others to unleash their full potential and in so doing promote the productivity of the firm.
On the other hand, managers have an obligation to create a rapport with their customers by adequately training their employees on consumer approach strategies that will work to retain their customers and even widen their network.
Business laws and ethics
Historical research and findings have enabled many managers and directors to evade from uncouth business ventures and malpractices that may dent the image of the company and result in severe losses. From the historical studies, the managers can get insight and be enlightened on the deals they should venture in and the scrupulous activities that they ought to distance themselves from as they may dent their reputation.
For instance the case of using faulty weights to maximize their profits at consumers’ expense has far reaching repercussions that may include terminating the business firm by law as they mislead consumers and extravagantly exploit them. The firm can also be found on the wrong side of the law if for instance they advertise their products as possessing excellent attributes some of which are mere exaggerations hence misleading the consumers.
When managers learn of the repercussions of such malpractices they will be keen to avoid indulging in them hence safe guarding their businesses.
Decision making
Getting to learn more about business history helps the managers to make crucial long term changes that will be instrumental in driving the business firm to success. Before making any major decisions or changes in the firm, there is a great need to examine previous firms and how they faired with a particular choice of products or services and with the help of the experts and specialists in this field, managers can draw important lessons and conclusions despite the market dynamics.
For managers who would like to change from one line of production to another, extensive research is required to critically analyze the credibility of the desired change and in so doing historical studies play a central role in determining its viability.
A platform to secure new information
Historical data provides a foundation or basis to formulate new ideas from the existing ones. Managers can utilize the past ideologies as a prerequisite for inventing new concepts that are relevant to the current economy since the market is very dynamic and technology is advancing at a very high rate.
For instance in the 1920s, the managers focused more on employee relationship and firm productivity; this was later changed to scientific management by John Mees which deployed the use of policies and concepts that provided a deeper insight in this field of research hence managers need to embrace change by innovating and developing new structures and systems that are more productive with high efficiency (Gomez, 2008).
Managers also need to get in touch with the previous market economies in order to use them as stepping blocks towards greater success in this field and be ahead of the pack. This information is vital in supplementing the theoretical principles and models obtained from literatures and media by providing a platform for comparison between the real situation and the documented principles.
Evolution of business strategies
In the colonial period, the society concentrated more on providing adequate food for the community more so during the winter spell. They mostly used man power as a chief source of labor then later came industrial revolution that took place between (1760-1850) and made use of machines run by a few laborers but increased the productivity of the firm.
Due to the rapidly growing economy and increased demand for the manufactured goods, numerous entrepreneurial firms began mushrooming and by early 1950s, there was need to invent better systems due to the ever increasing demand for manufactured goods and services. There was need to diversify the products to meet the ever changing needs and preferences of their consumers.
From these evolutionary statistics, a keen manager can study the market and strategize on which line of production to venture in, consumer orientation, and marketing strategies to use among other aspects drawn from the evolutionary line (Warren, 2002). Managers who have the potential to critically analyze and strategize their business plans in accordance to the market trends and dynamics are bound to excel in their errands.
Conclusion
In conclusion, history and evolution of business has played a critical role in promoting entrepreneurship by providing the needful information that can be extrapolated by managers and used to make crucial decisions in the firm.
The economy has also had significant growth over the years and this is attributed to the background information that was used by the scientist and economists of that time to come up with more sophisticated and reliable technologies that could now propel the business firms to another level by lowering its expenditures and increasing their productivity.
In the late 19th century, Peter Drucker came up with one of the earliest concept of corporate management that entailed some basic aspects of organizational structure then in 1960s Ronald Fisher introduced statistical analysis in the management system. This he combined with the concept of microeconomics to come up with a scientific research referred to as “operations research” that was later developed by economist Patrick Blankett to help solve various operations problems mostly in the logistics field.
With the recent technological advancement in the business fields, more sophisticated concepts and business models have been constituted like Six Sigma, theory of constraints, standardization and many other technological-based theories that are geared to providing lasting solutions to management problems and increase firm’s productivity (Gibson, 1999).
Business consultants make use of history of the firm as a prerequisite to diagnosing the problems a particular company may be bearing in the same way a medical practitioner requires to know the medical history of their patients before prescribing the required medications hence history has a part to play in identifying loopholes in the organization and providing possible remedies to the same hence managers have an obligation to keep clear records of previous regimes if they are to excel in their future business plans.
References
Alan, K. (1986). Why history matters to managers. Harvard Business Journal January, 3, 81-88.
Gibson, J. (1999). The role of management history in the management curriculum. Journal of Management History, 5 (5), 277-285.
Gomez, M. (2008). Management: People, Performance and Change. New York: McGraw-Hill.
Warren, R. (2002). Business ethics and Business History. British Journal of Management, 13, 209-219.