Professional business, in spite of its not too long history, has gone through 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 the socio-economic factors of social production. The evolution of management in a historical context began at the time of the initial accumulation of capital. The era of the Reformation and Enlightenment in Europe contributed to the development of cultural and political conditions for the development of industry. During this period, laws of centralized states appeared that guarded such representatives of society as merchants, artisans and businessmen. 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 nascent capitalism.
The evolution of management received a new round during the first industrial revolution, which opened mass production, which replaced the small craft manufactory. 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. It became crowded with financial capital, 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 farms. Capitalist enterprises and firms for a long time did not have civilized competition. The exploitation of cheap child and female labor, the fierce competition “for survival”, the robbery of colonies and the merciless seizure of ever new markets are the features of “free capitalism” that existed until the very end of the 19th century.
The current state of affairs did not correspond to the intensive development of science and technology, and therefore 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, in order to occupy its niche in the market. The industrial revolution ultimately ensured the transition to the consolidation and development of the mass production production structure. The evolution of management at this moment becomes especially noticeable, since the main goal of most companies at that time was significant economic growth. Profit was provided through mechanization and expansion of production, increasing the output of standard products, and 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 government and business in that era. The business sector was isolated, social and political public control was minimized. Economic protectionism and taxation policies were all that business needed from its state. The era of mass production, as everyone knows, ended in a deep crisis of overproduction.
Past manufacturing views came into complete conflict with new consumer demands. Thus, the evolution of management required a change in orientation from a manufacturing economy to a market economy. Reserves for cost reduction at enterprises were completely exhausted. The success of the company began to depend heavily on external conditions. Management tasks did not require conquering markets, but the creation of new ones. The first to switch to a market orientation were industries producing consumer goods and enterprises with a complex technological process, producing tools, components, semi-finished products and machine tools. The period of mass marketing gave rise to a comprehensive marketing convention, which was supposed to balance all the requirements of production and marketing. Market saturation and overproduction of goods put an end to this era.
At this time, the middle class grew, which had higher demands. The roles of managers and entrepreneurs, who in the new conditions could not successfully conduct business independently, were changing, and so the role of managers (professional managers and line managers) 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 all economic life.
The evolution of strategic management is characterized by the appearance of specific techniques and their implementation in the ongoing practice of companies and firms. Historians distinguish four main stages of planning development: 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 set the task of a special study of all the provisions of this management, as well as the need to highlight it as a separate area of knowledge.