Information about Business Administration

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The word "administration" 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").

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 organising people and resources efficiently so as to direct activities toward common goals and objectives.

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 MIS services, is what is intended when the term "the administration" is used.

In some organisational analyses, management is viewed as a subset of administration, specifically associated with the technical and mundane elements 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 usually reactive rather than proactive.

The administrative function

The administrative function refers to similar or related activities regarding the handling and processing of information, grouped together to form a function or department. The administrative activity, meanwhile, refer to the different types of work (viz. the handling and processing of incoming and outgoing information) done in this function.

Organisation of the administrative activity

Centralisation occurs when all of the administration of a business is performed in one office; decentralisation occurs when each department does its own administration.

Another fuction of Business Administration is a mix of all types of business in one topic. Business Administration can be a big help if you don't know wha to major in.

Centralisation versus decentralisation

The following factors influence the choice between centralisation and decentralisation:

• When the various departments and branches of the business are spread out of a wide area, it can be physically impossible to centralise administration.
• The nature of the business is important: the more administrative work required, the greater the move towards centralisation.
• The size of the business also counts: the bigger the business, the greater the move towards centralisation.
• When the various activities and compositions of the different departments are very diverse, decentralisation may be the best option.
• Decentralisation requires highly-skilled workers.
• Centralisation generally leads to a standardisation of work processes.

Centralisation

=Advantages

=

• Standardised administrative expenses.
• Specialisation results in a greater division of labour.
• Fewer copies are required; hence, the business saves on storage space.
• Centralisation is more efficient and effective.
• There is less duplication of effort and less machinery required.

=Disadvantages

=

• Impersonal relationships
• Documents lose their confidentiality.
• Highly advanced and technical nature of some departments makes centralisation difficult.
• The tremendous workload may become unmanageable under centralisation.
• It is often hindered by the diversity of activities found in one department.

Decentralisation

=Advantages

=

• Red tape may be sidestepped.
• Exposes workers to a wider variety of tasks, providing greater stimulation.
• Good, interpersonal relationships

=Disadvantages

=

• Work cannot always be completed in as timely a fashion.
• Specialisation is often unattainable.
• Division of labour can be impossible in a small office.
• It is difficult to standardise work procedures.

Office mechanisation

This refers to the machines, equipment, processes and methods used to make office work easier and eliminate manual labour.

Information processing

• Data processing -- processing of raw information.
• Word processing -- processing text into readable form.
• Reproduction -- duplication or copying of information.
• Dissemination -- distributing of information.
• Recording -- finding and filing of information.
• Handling of information -- the use to which information is put in the workplace.

Information management

The information management function performs the following activities:

Cost accounting

• Management is kept up to date with all of the relevant production information and cost statistics.
• Avoids incorrect price calculations
• Calculates cost price of product
• Basis for the planning of production and marketing activities
• Determines whether or not the product will be competitive.

Accounting records

• All business transactions should be recorded so that the management has a current record of transactions.
• The information obtained is used to draw up financial statements and reports.
• It also helps to keep control over the accuracy of work.
• The following systems are used to record transactions:
• Sales and debtors system
• Purchases and creditors system
• Stock recording system
• Administration of salaries and wages
• Administration of cash and other payments

Budgets

• Used to estimate incomes and expenses for certain periods
• Each department has its own budget, and they are all incorporated into one large one.
• The medium term for a budget is three years; long-term is five years or more.
• A budget helps management to control the financial doings of each department.

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 Henry Fayol.

• Planning is 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 effort among all the elements in the organization. Organizing must take into account delegation of authority and responsibility and span of control within supervisory units.
• Staffing means filling job positions with the right people at the right time. It involves determining staffing needs, writing job descriptions, recruiting and screening people to fill the positions.
• Directing is leading people (see Leadership) 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 skills 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 production.
• Controlling is the function that evaluates quality in all areas and detects potential or actual deviations from the organization's plan. This function's purpose is to ensure high-quality performance and satisfactory results while maintaining an orderly and problem-free environment. Controlling includes information management, measurement of performance, and institution of corrective actions.
• 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.

See also

• Public administration
• Central Administration
• Chief administrative officer