Business management is a wide ranging process of coordinating and distributing economic resources or supervising operations. The size of an organization and number of departments or divisions can increase the need for management processes. Standard operating procedures can help owners and managers create a work environment where various processes can be complete in a sequential and repetitive manner. This sets a minimum set of expectations in the organization.
An organizational structure helps business owners and managers set standard operating procedures for their company. This structure typically outlines the policies and rules each individual must follow in the business. These policies and rules are commonly the overarching guidelines for a company, which can also include specific responsibilities for everyone in the company. Organizational standard operating procedures help companies dictate the behavior for owners, directors and executive management.
Resources are the physical items an organization uses to produce goods and services. These resources typically include raw materials, capital, facilities and equipment. Standard operating procedures dictate how a company acquires these items, who can use them and the maintenance processes to ensure resources are available for use in the future. Many organizations create internal controls to limit the number of individuals who can purchase resources to ensure the company does not over commit their capital on other economic resources.
Many organizations create standard operating procedures to outline how the company will produce goods and services. These operating procedures are commonly found in manuals and instructions for each business process. Owners and managers use these manuals to ensure a consistent level of production and quality of products. Managers can also implement these procedures in accounting, finance, customer service and other departments to ensure a consistent quality of business processes.
Performance management is the process owners and manager use to review the output of their company’s operations. Standard operating procedures allow owners and managers to use a basic set of guidelines for this process, particularly for employee performance reviews. Procedures can include knowledge of job, quality of performance, ability to work with others, timeliness and willingness to work outside of normal responsibilities are common procedures.