With the emergence of reformed organisational structures and market dynamism, the discussion today is heavily tilted towards the role of managers in such structures. How managerial capabilities affect organisational output, especially at the MSME level, remains a topic of contention in business strategy circles. For the record, MSME full form is Micro, Small and Medium Enterprises.
When a firm has access to both an adequate amount of resources and the managerial aptitude to utilise those resources well, it achieves a competitive advantage which is particularly challenging to replicate.
Managerial capabilities are paramount to the appropriate adaptation, integration, and reconfiguration of assets, skills and competences to achieve a higher level of organisational output in the face of changing industry dynamics. As such, the role of a manager in the performance of a firm cannot be stressed enough.
What traits should a competent manager possess?
There are principally three areas that a successful manager should excel at-
- Personnel management
- Time management
- Fund management
Any organisation needs a corps of professionals to execute strategies and be involved in its production process. The role of a manager is to predominantly oversee their performance, solve any issues they might be facing and allocate them as resources where they can attain the highest level of their personal capacity. Boosting the morale of company personnel is also the responsibility of the manager.
Time management refers to handling company operations within set-upon deadlines in order to maximize revenue generation. It is most vividly noticeable in working capital cycle management, where managers have to monitor the life of working capital right from the point of its origin to the point of returns. They should also ensure that a business never runs out of working capital.
Fund management is in arguably the most crucial among the three. For MSMEs especially, where external funding is relatively on the lower side, it becomes all the more important. A competent manager knows the exact areas where resources should be allocated to maximize the return on investment. He/she should also inculcate certain financial habits to better manage business growth.
Securing funds at times of financial adversity is another area which capable managers excel at. External investors are still wary of the MSME sector as the risks are proportionately high. Under such circumstances, the only practical way for managers to secure funds is through credit borrowing through financial institutions.
There are several MSME loan schemes provided by the Government and encouraged by financial institutions to propel this thriving sector into the next decade of the 21st century. In fact, MSMEs account for over 16% of all retail lending, which really goes on to show how capital intensive it can be.
One of the primary avenues of securing finance is through business loans from authorized lenders. Such MSME loan interest rate is quite competitive, which reduces the burden of repayment significantly. An able manager should have the ability to recognize the appropriate source and obtain funds at the best terms for his/her firm.
In a nutshell, the performance of an organisation is dependent on its manager in no small extent. Especially in this day and age, managers need to stay continually updated with market practices and industry regulations while handling all operational aspects of the firm. An able manager is one who can balance all these acts, and stay abreast of the organisational requirements.