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1. Business Administration: Concept, Objectives, Importance

• CONCEPT OF “BUSINESS”
➢ the state of being busy.
➢ Generally, the term business includes all human activities concerned with earning money.
➢ In other words, business is an activity in which various persons regularly produce or exchange goods
and services for mutual gain or profit.
➢ The goods and services produced or purchased for personal use are not included in “business”.
• DEFINITION
➢ Business may be defined as human activities directed toward providing or acquiring wealth through
buying and selling of goods
➢ Every human activity which is engaged in for the sake of earning profit may be called business.
➢ An institution organized and operated to provide goods and services to the society, under the
incentive of private gain is business
• THE CONCEPT OF BUSINESS ADMINISTRATION
➢ the process of managing every different angle of a business so it can run, expand, grow and succeed.
➢ Without business administration, all areas of the business would go unmonitored and would
eventually break down.
➢ oversee the running of the company and working to ensure the business is working, running to its best
ability.
• THE IMPORTANCE OF BUSINESS ADMINISTRATION
➢ In order for a business to run properly and to be successful.
➢ To ensure everything is running according to plan.
➢ To make large important business decisions.
• THE PROCESS OF BUSINESS ADMINISTRATION
➢ Business Administration functions: planning, organizing, staffing, directing and controlling
➢ There are four fundamental functions of Business Administration i.e. planning, organizing, actuating
and controlling
➢ To manage is to forecast and plan, to organize, to command, & to control
➢ Whereas Luther Gallick has given a keyword ’POSDCORB’ where P stands for Planning, O for
Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting.
➢ Each function blends into the other & each affects the performance of others.
• Business Administration functions
1. Planning
➢ It deals with chalking out a future course of action & deciding in advance the most appropriate
course of actions for achievement of pre-determined goals.
➢ Planning is deciding in advance: what to do, when to do & how to do. It bridges the gap from
where we are & where we want to be.
➢ A plan is a future course of actions. It is an exercise in problem solving & decision making.
➢ Planning is determination of courses of action to achieve desired goals. Thus, planning is a
systematic thinking about ways & means for accomplishment of pre-determined goals.
➢ Planning is necessary to ensure proper utilization of human & non-human resources. It is all
pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks,
wastages etc.
2. Organizing
➢ bringing together physical, financial and human resources and developing productive relationship
amongst them for achievement of organizational goals.
➢ To organize a business is to provide it with everything useful or its functioning i.e. raw material,
tools, capital and personnel’s.
➢ To organize a business involves determining & providing human and non-human resources to the
organizational structure.
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➢ Organizing as a process involves:
1. Identification of activities.
2. Classification of grouping of activities.
3. Assignment of duties.
4. Delegation of authority and creation of responsibility.
5. Coordinating authority and responsibility relationships.
3. Staffing
➢ manning the organization structure and keeping it manned.
➢ Staffing has assumed greater importance in the recent years due to advancement of technology,
increase in size of business, complexity of human behavior etc.
➢ The main purpose of staffing is to put right man on right job i.e. square pegs in square holes and
round pegs in round holes.
➢ Managerial function of staffing involves manning the organization structure through proper
and effective selection, appraisal & development of personnel to fill the roles designed un
the structure.
➢ Staffing involves:
1. Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
2. Recruitment, Selection & Placement.
3. Training & Development.
4. Remuneration.
5. Performance Appraisal.
6. Promotions & Transfer
4. Directing
➢ It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes.
➢ It is considered life-spark of the enterprise which sets it in motion the action of people because
planning, organizing and staffing are the mere preparations for doing the work.
➢ Direction is that inter-personnel aspect of management which deals directly with influencing,
guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
➢ Direction has following elements:
1. Supervision: implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.
2. Motivation: means inspiring, stimulating or encouraging the sub-ordinates with zeal to
work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
3. Leadership: may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.
4. Communications: is the process of passing information, experience and opinion from one
person to another. It is a bridge of understanding.
5. Controlling
➢ It implies measurement of accomplishment against the standards and correction of deviation if
any to ensure achievement of organizational goals.
➢ The purpose of controlling is to ensure that everything occurs in conformities with the standards.
An efficient system of control helps to predict deviations before they actually occur.
➢ Controlling is the process of checking whether or not proper progress is being made towards the
objectives and goals and acting if necessary, to correct any deviation.
➢ Controlling is the measurement & correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain them as being
accomplished.
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➢ Controlling has following steps:
1. Establishment of standard performance.
2. Measurement of actual performance.
3. Comparison of actual performance with the standards and finding out deviation .
4. Corrective action.
2. Coordination: Characteristics And Importance
• Co-ordination is necessary because
➢ Co-ordination is the Essence of Management." i.e. co-ordination effects all the functions of
management, viz., Planning, Organizing, Staffing, etc.
➢ Co-ordination is a function of management.
➢ Co-ordination is a principle of management, and all other principles are included in this one
principle, i.e. co-ordination is the "Mother Principle".
➢ Co-ordination is the "Plus value of the group". i.e. 2+2=5. This is impossible in the physical world, but
it is possible in human affairs through co-ordination.
➢ Coordination is a process to establish harmony among the different activities of an organization, so
that the desired objectives can be achieved.
• CHARACTERISTICS OF COORDINATION
1. Coordination Integrates Group Effort: that coordination is related to group effort and not
individual effort.
2. Coordination Ensures Unity of Action: during coordinating process an effort is made to create
unity among the various activities of an organization.
3. Coordination is a Continuous Process: if any one of the activities goes on fluctuating either for
more or less than required, the whole organizational balance is disrupted.
4. Coordination is an All-pervasive Function: refers to that truth which is applicable to business
and non-business organizations and places uniformly.
5. Coordination is the Responsibility of All Managers: Coordination is needed at all the three, i.e.,
top, middle and lower managerial levels.
6. Coordination is a Deliberate Function: Coordination is never established by itself. Only
cooperation does not suffice but coordination is also needed.
• IMPORTANCE OF COORDINATION
1. Coordination encourages team spirit: Coordination arranges the work and the objectives in a
way that there are minimum conflicts and rivalries. This increases the team spirit of the
employees.
2. Coordination gives proper direction: Coordination integrates activities for achieving the
common goals or objectives of the organization.
3. Coordination facilitates motivation: It encourages the employees to show initiative. It also gives
them many financial and non-financial incentives. Therefore, the employees get job satisfaction,
and they are motivated to perform better.
4. Coordination makes optimum utilization of resources: it helps to bring together the human and
materials resources of the organization. It helps to make optimum utilization of resources. it also
minimize the wastage of resources in the organization.
5. Coordination helps to achieve objectives quickly: It ensures smooth working of the
organization. Therefore, with coordination it can achieve its objectives easily and quickly.
6. Coordination improves relations in the organization: The Top Level Managers co-ordinates the
activities of the Middle Level Managers and develops good relations with them. Similarly with
mid-level and lower level with workers.
7. Coordination leads to higher efficiency: Coordination leads to optimum utilization of resources
it results in more returns and low cost.
8. Coordination improves goodwill of the organization: Coordination helps an organization to sell
high quality goods and services at lower prices. This helps it earn a good name and image in the
market and corporate world.
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3. PRINCIPLES OF BUSINESS ADMINISTRATION

1. Business change must be performance driven.
2. Business change must be stakeholder based.
3. Business change decisions must be traceable to the stakeholder criteria.
4. The business must be segmented along business process lines to synchronize change.
5. Business processes must be managed holistically.
6. Process renewal initiatives must inspire shared insight.
7. Process renewal initiatives must be conducted from the outside in.
8. Process renewal initiatives must be conducted in an iterative, time-boxed approach.
9. Business change is all about people.
10. Business change is a journey, not a destination.
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