Study Session 2 Relationship between Business and Administration

Study Session 2: Relationship between Business and Administration Introduction Business has been defined as any activity that is tailored at identifying needs and wants and satisfying those needs and wants at a profit. This definition indicates that activity that is being carried out needs to be managed and coordinated with a predetermined profit motive. In view of this, the business must be managed and this is the essence of administration. Expected Duration: 1week or 2 contact hours 2.0 Learning Outcomes for Study Session 2 When you have studied the session, you should be able to; 2.1 Understand and define administration (SAQ 2.1); and 2.2 Discuss relationship between business and administration. (SAQ 2.2) 2.3 Mention types of Administrative organization. (SAQ 2.3) 2.1 Administration Box 2.1 Define Administration? Administration is the process by which jobs and functions to be carried out and whose responsibility it is are clearly defined in order to achieve the target goal i. e. is the act of governing and exercising authority as to the execution of a particular task. Administration can either be defined as the process by which jobs and functions to be carried out and whose responsibility it is are clearly defined in order to achieve the target; or can be said to be an individual or group of few people who are saddled with the responsibilities of coordinating a business or the entire organization (i.e. the body of people who manage the affairs of an organisation) (Yang, 2020). From business perspective, administration involves the performance of business operations and decision-making as well as the efficient utilization of human and material resources to direct activities towards accomplishing desired common goals. The responsibilities and authorities at various levels of managerial positions are clearly defined. Administration’s main functions include the formulation of broad objectives, plans and policies. It is basically a policy and decision-making function. Administration decides what is to be done and when it is to be done. Administration is important at the top levels of management. The terms management and administration have been used by different management authorities in a manner that sometimes they seem to be one and the same while at some other time; they diverge. According to most of the modern writers like Fayol, Koountz, Alleri and Perry, there is no real distinction between the two terms. Fayol for instance stated “All understandings require planning, organization, command, coordination and control and in order to function properly, all must observe to some general principles, we are no longer confronted with several administrative sciences but with one which can be applied equally well to public and private affairs”. Administration works as a link between the organisation’s employees and the senior management team. Administrators occupies motivational and inspirational roles in the running of the business of the organization assisting and cooperating with the staff in finding out what the organisation’s goals are in the short, medium and long terms. Managers are saddled with administering must have adequate knowledge of the use of human, material and economic resources in the interest of the organization and business. A good manager and administrator must be able to: I. Have good understanding of the concepts and scopes of administration. 2. See that the staff are managing and scheduling their tasks /jobs efficiently/effectively and professionally. 3. Develop efficient and successful administrative qualities 4. Plan an accurate and beneficial budget for the organisation’s profit. Developing a successful administrative qualities In – Text Questions (ITQs) 2.1 1. Define administration 2. Discuss four qualities of a good administrator. In – Text Answers (ITAs) 2.1 1. Administration can either be defined as the process by which jobs and functions to be carried out and whose responsibility it is are clearly defined in order to achieve the target; or can be said to be an individual or group of few people who are saddled with the responsibilities of coordinating a business or the entire organization (i.e. the body of people who manage the affairs of an organisation). 2 a. Have good understanding of the concepts and scopes of administration. b. See that the staff are managing and scheduling their tasks /jobs efficiently/effectively and professionally. c. Develop efficient and successful administrative qualities d. Plan an accurate and beneficial budget for the organisation’s profit. Developing a successful administrative qualities 2.2 Relationship between Business and Administration Businesses must be administered by either individuals or group of individuals. This means people must coordinate the human and material resources of organizations optimally for the purpose of accomplishing the organisational goals and objectives. In our O’level Economics class, we have been taught that there are four factors of production: Labour, capital, land and entrepreneur. The entrepreneur is standing in as the administrator in view of the central role overseeing the smooth running of the day-to-day operations of the organisation’s business is occupying. To be successful, every business whether it is large or small, or service based business must develop a healthy business relationship internally and externally. If there is a healthy relationship between an owner/administrators of the company and an organization, then it not only gives the opportunities to make the customer not only for particular time period but also for life long. This will also assist in attracting other people to do business with the organsation. Building the healthy and trusty relationship both within the organization and between service provider and client is very difficult and time consuming process. The business of a company includes relationship within, and then, between many factors like vendors, state, banks, potential customers, service providers, any municipal, federal governmental agencies, customers, banks etc. The business relations are the relation between all the entities that connected to that business either internally or externally. The day-to-day administration of business involves carrying all the stakeholders along for the purpose of accomplishing set goals and objectives and this is a pointer to the fact that the business is well administered. As a single management system, business administration has the following three characteristics: First, procedural. As a management system that can ensure the normal operation and development of enterprises and supervise some market behaviours of enterprises, the most prominent feature of business administration is procedural. The introduction of business administration needs its procedural support. As a supervision system to supervise the legitimacy of enterprise behavior, business administration needs to have the perfect legal knowledge to stop any market behaviour that violates the national law. Secondly, business administration plays a guiding role in the behavior and development of enterprises. Before conducting relevant behavior guidance, there should be procedural process preparation to guide relevant enterprises scientifically. in the process of enterprise transformation, business administration needs the procedural process to support related enterprises. With the help of procedural and scientific guidance, enterprises can develop better and faster. Thirdly, systematicness. As a scientific and reasonable management system, the supervision function of business administration needs a systematic supervision system. Only with a comprehensive and systematic supervision system, can the business administration realize the supervision and guidance of enterprise behavior to the greatest extent. In – Text Questions (ITQs) 2.2 1. Explain the relationship between business and administration 2. State three characteristics of business administration as regards management of enterprises. In – Text Answers (ITAs) 2.2 1. Businesses must be administered by either individuals or group of individuals. This means people must coordinate the human and material resources of organizations optimally for the purpose of accomplishing the organisational goals and objectives 2. a. Procedural: Business administration needs to have the perfect legal knowledge to stop any market behaviour that violates the national law. b. Business administration plays a guiding role in the behavior and development of enterprises. C. Systematicness: the supervision function of business administration needs a systematic supervision system. Only with a comprehensive and systematic supervision system, can the business administration realize the supervision and guidance of enterprise behavior to the greatest extent. 2.3 Types of Administrative Organisation Hartzell (2000) defined an Administrative Organisation as the one in which the jobs or functions to be carried out are clearly defined in order to achieve the target. The responsibilities and authorities at various levels of managerial positions are clearly defined. Administrative organizations can be classified into line organization; line and staff organization; and functional organization. Line organization: In this organization the manager has direct authority over his/her respective subordinates through chain of command. The manager has full authority to decide and act with respect to his area of functioning. Fig. 2.1: Adopted from Hartzell (2000): Administrative functions in organisations. Line and staff organisation: In this type of organizations, there are two type of authority relationships i.e. true authority and advising authority co-exist most of the managers have line authority to decide and act as in a line organization. However, there are some positions where job is of advisory and supportive nature. Some of the examples are personnel managers, company secretary. Functional organizations: Harztell (2006) defined functional organization in which line authority, staff authority and functional authority exist together. A functional authority is a limited form of line authority given to functional experts over certain specialized activities under the normal supervision of managers belonging to other department e.g. if personnel policies are observed in all the departments throughout the organization. Harztell (2006). In – Text Questions (ITQs) 2.3 1. Define administrative organization. 2. State types of administrative organisations. In – Text Answers (ITAs) 2.3 1. Administrative Organisation is one in which the jobs or functions to be carried out are clearly defined in order to achieve the target. The responsibilities and authorities at various levels of managerial positions are clearly defined 2. a. Line organisation Line and staff organisation Functional organisation Summary of the Study Session 2. 1. Administration can either be defined as the process by which jobs and functions to be carried out and whose responsibility it is are clearly defined in order to achieve the target; or can be said to be an individual or group of few people who are saddled with the responsibilities of coordinating a business or the entire organization (i.e. the body of people who manage the affairs of an organisation). 2. Qualities of a good administrator/manager include: a. Having good understanding of the concepts and scopes of administration. b. See that the staff are managing and scheduling their tasks /jobs efficiently/effectively and professionally. c. Develop efficient and successful administrative qualities d. Plan an accurate and beneficial budget for the organisation’s profit. Developing a successful administrative qualities. 3. Administrative organizations can be classified into line organization; line and staff organization; and functional organization. While a line officer/ manager has direct authority over his/her respective subordinates through chain of command. The manager has full authority to decide and act with respect to his area of functioning; line and staff are two type of authority relationships i.e. true authority and advising authority that co-exist and functional organization is that in which line authority, staff authority and functional authority exist together. A functional authority is a limited form of line authority given to functional experts over certain specialized activities under the normal supervision of managers belonging to other department Self-Assessment Questions (SAQs) for Study Session 2 SAQs 2.1 (Tests Learning Outcomes 2.1) 1. Define administration 2. Discuss four qualities of a good administrator. SAQs 2.2 (Tests Learning Outcomes 2.2) 1. Explain the relationship between business and administration 2. State three characteristics of business administration as regards management of enterprises. SAQs 2.3 (Tests Learning Outcomes 2.3) 1. Define administrative organization. 2. State types of administrative organisations. Glossary of Terms 1. Responsibility is the state of being accountable for something 2. Efficiency means optimum utilization of resources 3. Effectiveness means meeting the targets 4. Authority is the power to give orders and enforce obidience 5. Professionally dealing with issues in a way that relates to a profession 6. Procedural relating to an established way of doing something 7. Systematicness means methodical in procedure