What Is Passive Management?

Passive management, also known as passive management, refers to a conservative management method that holds securities for a relatively long period of time, and rarely changes the portfolio of securities.

Passive management

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Passive management, also known as passive management, refers to a conservative conservative holding of securities for a relatively long period of time, which rarely changes the securities portfolio rarely.

Passive management advocates holding extremely diversified investment portfolios without the need to spend any effort and other resources to analyze securities to improve investment performance. If the market is efficient and prices reflect all relevant information, it may be possible to adopt a negative strategy without wasting resources to figure it out

Passive management can be divided into two categories: ^[1]

The main goal of a for-profit enterprise is to be able to produce the maximum economic benefits with the minimum input. This requires the enterprise to fully and effectively utilize the enterprise through enterprise management. Its main goal is to be able to maximize the output with the smallest input. Economic benefits, this requires the full and effective use of all human, financial, material and information resources of the enterprise through enterprise management. For this reason, it is urgent and necessary to formulate a systematic and scientific management system.

However, no matter how detailed and scientific the management system of an enterprise is, it cannot be all-inclusive and ubiquitous. Over-focusing on the system's passive management method will only put a fixed framework on various issues of the enterprise, limiting the initiative of employees, resulting in inefficient work.

First of all, passive management keeps employees in the position of being monitored at all times and puts them in a managed state, which seriously affects their enthusiasm and creativity. Secondly, passive management makes enterprises have poor adaptability to the environment, low response capacity, reduced flexibility in organizational activities, and strict rules and regulations that affect the coordination between the organization and the environment.

Thirdly, passive management often keeps employees comfortable with the status quo, lacks awareness of self-management, lacks awareness of active participation in management and decision-making, and low self-discipline and self-control ability. The improvement in quality has had a negative impact.

In addition, the quantification of specific work standards and indicators has caused the inertia of employees, so that employees only pursue the completion of their internal work, and leave nothing to the notice.

Finally, the rules and regulations of an enterprise are not perfect in the final analysis. The imperfection of the system makes the responsibilities and rights not completely equal, which easily leads to contradictions and conflicts in the work.