Unit 12 – business administration

A business (also called a company, enterprise or firm) is a legally recognized organization designed to provide goods and/or services to consumers. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business, have as one of their main objectives the receipt or generation of a financial return in exchange for¹ work and acceptance of risk. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses can also be formed not-for-profit or be state-owned. The etymology of “business” relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term “business” has at least three usages, depending on the scope² – the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as “the music business” and compound forms³ such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings.

In business, administration consists of the performance or management of business operations and thus the making or implementing of major decisions. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives. The word is derived from the Middle English word administracioun, which is in turn derived from the French administration, itself derived from the Latin administratio – a compounding of ad (“to”) and ministratio (“give service”)⁴.

Administrator can serve as the title of the general manager or company secretary who reports to a corporate board of directors. This title is archaic, but, in many enterprises, this function, together with its associated Finance, Personnel and management information systems services⁵, is what is intended when the term “the administration” is used. In some organizational analyses, management is viewed as a subset of administration, specifically associated with the technical and mundane elements⁶ within an organization's operation. It stands distinct from executive or strategic work. In other organizational analyses, administration can refer to the bureaucratic or operational performance of mundane office tasks, usually internally oriented and reactive rather than proactive.

The world’s first business school was established in 1819 in France. The first business school in the United States, the Wharton ['wo:tn] School of the University of Pennsylvania, was founded in 1881. Anecdotically, top French business school HEC was also created in 1881, while Harvard Business School, founded in 1908, was born just one year after France’s prestigious ESSEC Business School.

Administrative functions

Administrators, broadly speaking, engage in a common set of functions to meet the organization’s goals. These “functions” of the administrator were described by Henri Fayol (a French management theorist, the author of “Administration Industrielle et Generale” (Administracion industrialy general”) as “the 5 elements of administration”.

Planningis deciding in advance what to do, how to do it, when to do it, and who should do it. It maps the path from where the organization is to where it wants to be. The planning function involves establishing goals and arranging them in logical order. Administrators engage in both short-range and long-range planning.

Organizing involves identifying responsibilities to be performed, grouping responsibilities into departments or divisions, and specifying organizational relationships. The purpose is to achieve coordinated efforts among all the elements in the organization (Coordinating). Organizing must take into account delegation of authority⁷ and responsibility and span of control within supervisory units⁸.

Staffing means filling job positions with the right people at the right time. It involves determining staffing needs, writing job descriptions⁹, recruiting and screening people to fill the positions.

Directing (Commanding) is leading people in a manner that achieves the goals of the organization. This involves proper allocation of resources and providing an effective support system. Directing requires exceptional interpersonal skills¹⁰ and the ability to motivate people. One of the crucial issues in directing is to find the correct balance between emphasis on staff needs and emphasis on economic production.

Controlling is the function that evaluates quality in all areas and detects potential or actual deviations from the organization’s plan. This ensures high-quality performance and satisfactory results while maintaining an orderly and problem-free environment¹¹. Controlling includes information management, measurement of performance, and institution of corrective actions¹².

Budgeting, exempted from the list above, incorporates most of the administrative functions, beginning with the implementation of a budget plan through the application of budget controls.

Notes:

1. …the receipt or generation of a financial return in exchange… 2. …depending on the scope… 3. …compound forms… 4. …a compounding of ad (“to”) and ministratio (“give service”) 5. …together with its associated… information systems services… 6. mundane elements 7. …take into account delegation of authority… 8. …responsibility and span of control within supervisory units 9. …writing job descriptions… 10. …exceptional interpersonal skills… 11. …maintaining an orderly and problem-free environment 12. measurement of performance, and institution of corrective actions

– получение (извлечение) финансовой прибыли в обмен на… – в зависимости от сферы деятельности – сложные формы – от латинского ad («направление») и ministratio («служить») – вместе со связанными с ней… системами информационных услуг – обычные элементы – учитывать делегирование полномочий – зд. уровень ответственности и формы контроля со стороны контролирующих органов – разработка должностных инструкций – профессиональные навыки формирования системы взаимоотношений в коллективе – поддержание (сохранение) деловой рабочей обстановки (здорового микроклимата) в коллективе – оценка производительности и учреждение корректирующих действий