New Trends of Management of European SMEs:The M-C Model

Abstract

1. Introduction The M-C model is based on the fact that the basic management processes of small and medium-sized companies must be designed in two interconnected areas management and controlling. Management is perceived as plans, targets, researches, missions and visions. Controlling is described as continuous monitoring and evaluation of targets, identification of deviations and proposals in the form of risk management. Management and controlling must be understood as decisive management activities (Halivcek, 2011). Planning and controlling are very interconnected activities that have to be understood within the framework of the company management concept, not as independent and separate activities of the company departments. Orientation on long-term and short-term targets is the basic step towards successful company management. However, without good and timely suggestions, checks and searches for alternative solutions, this subject is exposed to risk. Determining measures to eliminate a problem means intensive interconnection with creation of operational and strategic plans. It is a closed process, in which the success of the entire company is significant, not just of the company department. (Havlicek, 2011). The ability to manage these processes means understanding the principle of company management. It is a common managerial mistake to prefer soft skills to hard skills. Both approaches should be well-balanced in practice. An unusually strong competitive environment shows that marketing, innovation and human resources management become decisive company activities. However, the world crisis clearly showed that business is especially about company economics, results, specific numbers and about the ability to react to changes in time and to indicate and manage potential problems expressed in an exact way. Knowledge of the market, competent employees and innovative abilities are of no significance if the company does not generate sufficient cash to cover at least its operational needs. 2. Strategic Management and Planning To create a business strategy is a key managerial act resulting from proprietary objectives or the ambitions of owners and has a decisive influence on the determination of future position on the market. The strategy is the pillar for all other decisions, planning and implementation of operational targets (3). Strategic targets are superior to all activities and internal company units and are the basis for operational plans and concepts of individual company units--departments, divisions or sections. The sales, marketing, finance, quality and innovation departments or the human resources department, for example, shall base the determination of targets and plans on the business strategy and objectives of the individual company units whose targets must be adapted to the main company strategic targets. Every company must be able to define WHAT its position and targets are (corporate strategy), while it has to respect the ambitions and requirements of the owners and involved parties (ownership strategy). Every business strategy defined at the level of top management makes sense only if it is transferred to the level of the individual departments (business, finance, marketing, production, innovation, etc.) and the long-term position of these departments (managerial strategy) is determined (Halikias, 2009; Mallya, 2007; Kasik and Havlicek, 2009). The main output of company strategic management is creation of a strategic plan. It describes the position that the company will be in several years down the line (Havlicek, 2011). It informs us about its vision, mission and suggests ways to achieve long-term targets. It is a big managerial mistake to believe that determination of the long-term direction of the company is a marketing practice good only for an annual report, a company profile or a trailer on the corporate website. Its importance goes beyond the various departments in the company. …