Commercial management

Commerce refers to the actions that involve the exchange of goods, services, or value between an entity and its customers, suppliers, or partners; with the aim of generating income and profit.{{Cite web |title=Commerce Definition & Meaning {{!}} Britannica Dictionary |url=https://www.britannica.com/dictionary/commerce |access-date=2024-12-03 |website=www.britannica.com |language=en-US |quote=commerce: activities that relate to the buying and selling of goods and services}} Consequently, all activities of an organization that pertain to purchasing, selling, or generating revenue are classified as commercial activities,{{Cite web |title=COMMERCIAL |url=https://dictionary.cambridge.org/dictionary/learner-english/commercial |website=Cambridge Dictionary |quote=commercial: relating to buying and selling things / intended to make a profit}}{{Cite web |title=commercial |url=https://www.collinsdictionary.com/dictionary/english/commercial |website=Collins Dictionary}} that need to be managed effectively.

Commercial management involves optimizing an organization’s resources, investments, and market opportunities while minimizing risks and costs. It focuses on developing and maintaining efficient commercial processes to ensure maximum profitability, quality, and service, aligning organizational goals with daily operations for long-term sustainability. Thus, commercial management plays a significant role in shaping the business landscape of an organization, using mutual cooperation to drive growth and innovation in an increasingly competitive market.The Chief Commercial Officer (CCO) is the highest official responsible for monitoring and directing the activities and growth of the organization in key areas of commercial management such as marketing, sales, supply chain and logistics, finance, product development and customer relations.{{Cite web |title=CCO (chief commercial officer) |url=https://dictionary.cambridge.org/dictionary/english/cco |website=Cambridge Dictionary}}

Although commercial management and business management exhibit considerable similarities, commercial management adopts a more specialized approach, focusing more on directing an organization’s commercial operations; whereas business management encompasses the broader oversight of a company’s overall functions.{{Cite web |date=2024-08-14 |title=What is Business Management? |url=https://und.edu/blog/what-is-business-management.html |access-date=2025-01-13 |website=und.edu |language=en}}

The scope of a commercial manager's role is diverse, depending on the scale, structure and operation of an organization. In many businesses, the role of the commercial manager typically involves directing a combination of tasks, including sales, marketing, strategy development, deal-making, budgeting and cost control, and managing relationships with stakeholders.{{Cite web |title=COMMERCIAL MANAGER |url=https://dictionary.cambridge.org/dictionary/english/commercial-manager |website=Cambridge Dictionary}} Those who work in the commercial departments of large multinational organizations may have specialized responsibilities in sales, marketing, contracting and negotiation, finance or supply chain management. In smaller businesses, commercial managers will be expected to handle all of these different roles themselves, rather than overseeing a department containing a team of experts in each area. Regarding project-driven industries, commercial managers are typically responsible for various project-related commercial matters, often with a particular focus on procurement, resource management, financial management, negotiations and contracts, and legal compliance.{{Cite book |last=Lowe |first=David |url=https://www.researchgate.net/publication/269464864_Commercial_Management_of_Projects_Defining_the_discipline |title=Commercial Management of Projects: Defining the discipline |publisher=Blackwell Publishing Ltd |year=2006 |location=Oxford |language=English}}

Commercial management within an organization is also applied at policy levels.{{clarify|date=December 2020}} Commercial policies define the rules and practices governing how business is carried out and the standard terms under which external relationships are conducted. Many of these policies are reflected in the terms of any contract in which the organization engages. At a transactional level, commercial management is applied through the oversight of trading relationships to ensure their compliance with business goals or policies and to understand or manage the financial and risk implications of any variations.

Commercial managers in the public sector are primarily responsible for managing contracts and procurement, optimizing the use of resources, maintaining supplier relationships, and overseeing the commercial aspects of the organization's projects.

Within the UK government, civil service competency includes the ability to "[achieve] commercial outcomes".Civil Service Human Resources, [https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/436073/cscf_fulla4potrait_2013-2017_v2d.pdf Civil Service Competency Framework 2012 - 2017], update published 2015, accessed 24 November 2023 An "uplift in commercial and contract management capabilities" among staff in government and the wider public sector engaged in project and programme delivery has been seen as an important efficiency goal. A "Contract Management Capability Programme" was initiated in 2018 to secure training, development and accreditation in contract management, including the commercial elements of delivering government programmes.Government Commercial Function, [https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1157208/20230419_The_Contract_Management_Capability_Programme_-_Four_years_in_-_progress_and_benefits_realisation__3_.pdf Contract Management Capability Programme], published April 2023, accessed 24 November 2023

As mentioned, commercial administration serves as the backbone of any organization's commercial operation and strategic framework. It is the management of all processes related to buying and selling products, aiming to create, ensure and sustain profitability. As such, this process consists of a wide range of activities, including:

Sales constitutes a fundamental aspect of commerce, that directly contributes to generating income. The effective management of the entire sales process—encompassing forecasting, strategic planning, performance measurement, and the practical application of sales techniques—significantly enhances revenue outcomes.{{Cite web |date=2018-05-24 |title=Sales Management {{!}} Universal Marketing Dictionary |url=https://marketing-dictionary.org/s/sales-management/ |access-date=2025-01-09 |language=en-US}}

Marketing is a main component of commerce, considering that a marketplace is essentially an environment for trade among people—a center of commerce.{{Cite web |title=Market |url=https://www.britannica.com/money/market/The-historical-development-of-markets |access-date=2025-04-30 |website=Britannica Money |language=en |quote=Markets as centres of commerce seem to have had three separate points of origin.}} Marketing focuses on the process of providing goods and services to consumers by identifying and responding to their needs and preferences. All marketing functions—such as identifying and developing new markets, analyzing market trends and competitors, assessing consumer demands, pricing, positioning, promotional activities, and creating customers loyalty; are essential drivers of commercial success.{{Cite book|title=The Practice of Management |last=Drucker |first=Peter |year=1954 |publisher=Harper & Row|location=New York |pages=32

|author-link=Peter Drucker}}{{cite book|last=McCarthy|first=Jerome E.|title=Basic Marketing. A Managerial Approach|year=1964|publisher=Irwin|location=Homewood, IL}}

Supply chain management has a significant role in commerce by ensuring the right products and services are sourced at the best prices while maintaining quality and timely delivery.{{Cite web |title=SUPPLY CHAIN MANAGEMENT |url=https://dictionary.cambridge.org/dictionary/english/supply-chain-management |website=Cambridge Dictionary}} It focuses on managing the flow of goods and services from suppliers to end customers.

Procurement is the process of acquiring goods and services from external sources, often through tendering or competitive bidding. It involves planning, selecting vendors, defining contract terms, purchasing the necessary items, and ensuring that the purchased goods or services meet the specified quality and delivery requirements.{{Cite book|url=https://archive.org/details/theoryo_laf_1993_00_9636|url-access=registration|page=[https://archive.org/details/theoryo_laf_1993_00_9636/page/1 1]|title=A Theory of Incentives in Procurement and Regulation|last1=Laffont|first1=Jean-Jacques|last2=Tirole|first2=Jean|date=1993|publisher=MIT Press|isbn=9780262121743|language=en}}

Logistics optimize the movement and storage of goods throughout the supply chain and it is responsible for ensuring that goods reach their destination correctly, on time, and at low cost. It includes processes such as transportation, warehousing, packaging, distribution and inventory management.{{cite book |last1=Ghiani |first1=Gianpaolo |last2=Laporte |first2=Gilbert |last3=Musmanno |first3=Roberto |title=Introduction to Logistics Systems Planning and Control |date=2004 |publisher=John Wiley & Sons |isbn=9780470849170 |page=1, 5, 10–15|url=https://books.google.com/books?id=KudTAAAAMAAJ |access-date=8 January 2023}}

Economic analysis is an integral part of commercial management which facilitating informed decision-making, as it primarily involves the evaluation of costs and benefits, and better allocation of resources. It involves identifying, measuring, estimating, and evaluating the inputs and outputs of alternative activities or projects, followed by a comparative analysis to determine the most optimal option.{{Cite journal |last=Norbert |first=Edomah |title=Economics of Energy Supply |url=https://www.sciencedirect.com/science/article/abs/pii/B9780124095489117130?via%3Dihub |journal=Reference Module in Earth Systems and Environmental Sciences |doi=10.1016/B978-0-12-409548-9.11713-0|url-access=subscription }}

Monetary resources play a fundamental role in commerce, primarily serving as a medium of exchange, measure of value, and store of value. Likewise, the field of commercial management is closely intertwined with financial management, which concentrates on the optimal allocation and utilization of financial resources;{{Cite web |title=Financial Management |url=https://kfknowledgebank.kaplan.co.uk/financial-management |access-date=2025-01-07 |website=Kaplan Financial}} especially in areas such as budgeting, cost management, cash flow management, profitability analysis, and banking.

Commercial management relies on legal expertise (especially commercial law) to ensure that an organization's business operations are conducted in accordance with legal requirements and comply with government rules and regulations.

Effective decision-making, planning, and process optimization are essential for improving performance in commercial operations. Analytical methods, such as operations research and data analysis, play a key role in this process. Operations research applies mathematical and statistical methods to solve business challenges.{{Cite web |last=INFORMS |title=What is O.R.? |url=https://www.informs.org/Explore/What-is-O.R.-Analytics/What-is-O.R. |access-date=2025-01-28 |website=INFORMS |language=en-US}} In a similar vein, data analysis enables managers to understand market trends, customer behavior, and risks, further enhancing decision-making and operational efficiency.Xia, B. S., & Gong, P. (2015). Review of business intelligence through data analysis. Benchmarking, 21(2), 300-311. {{doi|10.1108/BIJ-08-2012-0050}}

Commerce is inherently a social interaction.{{Cite web |title=commerce |url=https://www.merriam-webster.com/dictionary/commerce |website=Merriam-Webster}} In commercial activities, effective communication management is essential for fostering relationships and resolving conflicts with all stakeholders, including customers, suppliers, creditors, contractors, team members and the public.{{Cite book|last1=Van Riel|first1=Cees B.M.|title=Essentials of Corporate Communication|last2=Fombrun|first2=Charles J.|publisher=Routledge|year=2007|location=New York|pages=205}}

Contract management is a process that supports commercial management by overseeing the preparation, negotiation, execution, and monitoring of legally binding agreements and associated risks.{{Cite web |title=The difference between Commercial Management and Contract Management |url=https://news.worldcc.com/news-from-worldcc/the-difference-between-commercial-management-and-contract-management |access-date=2025-01-02 |website=news.worldcc.com |language=en}}

Business development is the processes of developing and implementing growth opportunities in enterprises.

Compare: {{cite book

| last1 = Houterman

| first1 = Joyce

| last2 = Blok

| first2 = Vincent

| last3 = Omta

| first3 = Onno

| chapter = Venture capital financing of techno-entrepreneurial start-ups: drivers and barriers for investments in research-based spin-offs in the Dutch medical life sciences industry

| editor1-last = Therin

| editor1-first = Francois

| title = Handbook of Research on Techno-Entrepreneurship: How Technology and Entrepreneurship are Shaping the Development of Industries and Companies

| chapter-url = https://books.google.com/books?id=BxSgAgAAQBAJ

| series = Elgar reference collection

| edition = 2

| publisher = Edward Elgar Publishing

| date = 2014

| page = 169

| isbn = 9781781951828

| access-date = 2015-07-23

| quote = Business development (BD) involves all activities, developing products and technologies so that they can be commercialized, building relationships with potential partners

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Commercial managers ensure that these new opportunities are pursued in a sustainable, efficient, and strategically coherent manner, through rigorous assessment of financial viability, legal frameworks, operational capacity, and marketing dynamics.

The process of introducing new products, services, or technologies, to the market, which involves transforming opportunities—such as innovations and ideas—into profitable outcomes. The process encompasses various stages, including research and development, pricing strategies, and market introduction.{{Cite web |title=Why Commercialize? |url=https://www.innovation.pitt.edu/inventor-support-services/why-commercialize-at-pitt/ |access-date=2025-01-21 |website=www.innovation.pitt.edu}}

Commercial management involves shaping and executing commercial strategy, which is a comprehensive plan that defines the objectives and actions to increase profitability, drive revenue, control costs, and align market demands with organization's capabilities. This includes setting organization's objectives, creating policies and plans, and effectively allocating resources to implement the strategy.{{Cite book |last=Ayitey |first=Wisdom |url=https://www.researchgate.net/publication/279958992_A_Simple_Approach_to_Strategic_Management |title=A Simple Approach to Strategic Management |publisher=Methodist Book Depot |isbn=9789988112288 |publication-date=2010}}

Unforeseen events such as economic crises, supply chain disruptions, market fluctuations, competition, fraud, legal issues, and technological obsolescence can each lead to reduced profits or major financial losses.{{Cite journal |last=Doff |first=René |date=2008 |title=Defining and measuring business risk in an economic-capital framework |url=https://www.researchgate.net/publication/46546644_Defining_and_measuring_business_risk_in_an_economic-capital_framework |journal=The Journal of Risk Finance |pages=317-333}} Hence, it is imperative to identify, assess, and manage the risks and threats that could undermine the commercial stability.{{Cite book |last=Cybellium |url=https://books.google.com/books?id=4xInEQAAQBAJ |title=Risk Management Exam Review: A Comprehensive Guide to Excelling in Risk Management Exams |publisher=Cybellium |isbn=978-1-83679-348-9 |pages=3 |language=en}}

International trade involves the exchange of goods and services across borders, driven by factors like supply and demand, economic integration, international factor movements, and policy variables such as tariffs and quotas.• James E. Anderson (2008). "international trade theory," The New Palgrave Dictionary of Economics, 2nd Edition.[http://www.dictionaryofeconomics.com/article?id=pde2008_I000263&q=international%20economics&topicid=&result_number=14 Abstract.]
   • Devashish Mitra, 2008. "trade policy, political economy of," The New Palgrave Dictionary of Economics, 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_T000213&edition=current&q=international%20political%20economy&topicid=&result_number=1 Abstract.]
   • A. Venables (2001), "International Trade: Economic Integration," International Encyclopedia of the Social & Behavioral Sciences, pp. 7843-7848. [https://web.archive.org/web/20080926171815/http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B7MRM-4MT09VJ-1KT&_rdoc=11&_hierId=151000136&_refWorkId=21&_explode=151000131,151000136&_fmt=high&_orig=na&_docanchor=&_idxType=SC&view=c&_ct=14&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=47bbf40341b26c67ef404dffbbba46a8. Abstract.] Its efficient management requires a comprehensive understanding of global factors like geopolitical risks, cultural differences, currency fluctuations, and supply chain disruptions, etc.{{Cite web |title=international trade |url=https://www.britannica.com/money/international-trade/The-new-mercantilism |access-date=2025-01-20 |website=Britannica Money |language=en}}

In project-based sectors such as construction, engineering, IT, energy, pharmaceuticals, etc., many organizations operate in a project-oriented framework. In these industries, commercial and project management are closely tied due to the complex commercial factors involved in each project.

As another function, commercial administration is responsible for making strategic decisions and developing plans regarding an organization's operations in online markets. This is notably due to the fact that e-commerce is constantly expanding, transforming commerce around the world, and offering customers easier access to products and services, irrespective of time and location.{{Cite journal |date=2023 |title=Identification of benefits, challenges, and pathways in E-commerce industries: An integrated two-phase decision-making model |url=https://www.sciencedirect.com/science/article/pii/S2666412723000156 |journal=Sustainable Operations and Computers |volume=4 |pages=200-218}}

There are academic programs throughout the world, ranging from bachelor's to doctoral degrees, providing professionals with the expertise and specialized knowledge in conducting and managing commercial affairs:

• Bachelor of Commercial Management{{Cite web |title=Bachelor Commercial Management |url=https://www.ulusofona.pt/en/porto/bachelor/commercial-management |website=Lusófona University}}
• Bachelor of Commerce (B.Com.){{Cite web |title=Athabasca University |url=https://www.athabascau.ca/programs/summary/bachelor-of-commerce-general.html |access-date=2025-01-08 |website=Athabasca University |language=en}}
• Bachelor of Commerce - Management (B.Comm.){{Cite web |title=Bachelor of Commerce (B.Comm.) - Management - University Catalogue 2024-25 {{!}} University of Saskatchewan |url=https://programs.usask.ca/edwards/management/index.php#Year330creditunits |access-date=2025-01-22 |website=programs.usask.ca}}
• Master of Commercial Management{{Cite web |title=MSc Commercial Project Management - course details (2025 entry) |url=https://www.manchester.ac.uk/study/masters/courses/list/04201/msc-commercial-project-management/course-details/ |access-date=2025-01-08 |website=The University of Manchester |language=en}}
• Master of Commerce (M.Com.){{Cite web |title=Master of Commerce - ANU |url=https://programsandcourses.anu.edu.au/2017/program/7412xmcom |access-date=2025-01-08 |website=programsandcourses.anu.edu.au}}
• Doctor of Commerce (DCom){{Cite web |last=Otago |first=University of |date=2023-03-06 |title=Doctor of Commerce (DCom) |url=https://www.otago.ac.nz/courses/qualifications/dcom |access-date=2025-01-08 |website=www.otago.ac.nz |language=en}}

Professionals in this field perform various specialized tasks in both the private and public sectors. Some common job opportunities in commercial management include:{{Cite web |title=MSc Commercial Project Management - careers (2025 entry) |url=https://www.manchester.ac.uk/study/masters/courses/list/04201/msc-commercial-project-management/careers/#course-profile |access-date=2025-05-13 |website=The University of Manchester |language=en}}{{Cite web |title=Bachelor of Commerce - The University of Melbourne |url=https://study.unimelb.edu.au/find/courses/undergraduate/bachelor-of-commerce/career-outcomes/ |access-date=2025-05-25 |website=study.unimelb.edu.au |language=en}}

• Commercial Director

• International Trade (Import/Export) Specialist

• Contract Manager

• Digital marketing Manager

• Sourcing and Procurement Manager

• Project Manager

• Strategic Planning Officer

• Partnership Manager

• Programme Management Officer

• Pricing Analyst

• Compliance and Risk Specialist

• Account Executive

• Customer experience manager

• Business Consultant

• Business management
• Marketing management
• Strategic management
• Contract management
• Government procurement#Government Commercial Function and Government Commercial Organisation within the UK government
• Master of Commerce

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Category:Business management