Business Administration Fundamentals
Departmentalization Types
The most common types of departmentalization are:
- Functional
- By product
- Geographical (by territories)
- By clients
- By process and equipment
- By sequence
Organizational Charts
Also known as organization charts or graphs, these charts represent the structure of a formal organization. They show the interrelations between the different parts of the organization, the functions, levels, hierarchies, authority, and existing obligations.
- Vertical organizational chart
- Horizontal organizational chart
- Mixed organizational chart
- Circular organizational chart
Delegation of Authority and Responsibility
This is the concession of authority and responsibility by a superior to a subordinate.
Centralized vs. Decentralized Administration
Centralized administration keeps decision-making power at the highest levels of management, maximizing control. Decentralized administration distributes decision-making faculty and controls, reserving only the necessary ones for high levels.
Concept of Administration and Its Essential Elements
Administration is the process of planning, organizing, directing, and controlling all resources of an economic entity to achieve a clearly defined purpose.
Instrumental Value of Administration
Administration is a means to an end, used in social agencies to efficiently achieve set goals.
Characteristics of Administration
- Universality
- Specificity
- Temporal unit
- Unit hierarchy
- Instrumental value
- Value of exercise
- Interdisciplinarity
- Flexibility
Administrative Roles According to Mintzberg
- Interpersonal
- Representative
- Personal
Example of Interpersonal Relations in Management
Ergonomics helps administration by focusing on the relationship between man and machine for greater efficiency and effectiveness.
Auxiliary Sciences in Administration
Anthropology
The science that studies man, culture, and social development. It helps administration properly place the human element within organizations.
Technical Sciences
- Mathematics
- Accounting
- Industrial Engineering
- Ergonomics
- Cybernetics
Social Sciences
- Anthropology
- Psychology
- Law
Historical Periods and the Enterprise
Agricultural Period
Characterized by sedentarism and the discovery of planting.
Feudalism
One person (the feudal lord) monopolized all wealth and merchandise, employing servants, not slaves.
Definition of Enterprise
An organization or economic unit composed of foreign or domestic equity to provide a good or service.
Administrative Approaches
Empirical Administration
Based only on past experiences of administrations.
Limitations of Scientific Management
Focused on production without considering the human side.
Techniques Used in Empirical Administration
- Tradition
- Experience
Humanist Approach to Management
Key representative: Elton Mayo.
Hawthorne Studies
Initial conditions studied: lighting, background music, and food provision.
Informal Groups
Groups not formally structured or determined by the organization.
Group Decision-Making
Brings together different attitudes, allowing individuals to make better decisions.
Components of Decision-Making
- Analysis
- Information
- Rationality
- Risk variables
Benefits of Group Decision-Making
- Greater precision
- Decision acceptance
- Increased production
- Greater job satisfaction
Classical Theory
Emphasizes structure and functions for organizational efficiency.
Basic Functions of an Enterprise (Henry Fayol)
- Technical
- Commercial
- Financial
- Security
- Accounting
Staff
Refers to services, advice, and consultation recommendations.
Systematic Approach
Creator: Van Lodwing.
Systems Theory
States that everything revolves around a system, composed of sub-systems that integrate into a larger system.
Customer Service
Concept
Set of interrelated activities to provide service in exchange for a product.
Types of Customer Service
- Active
- Passive
- Involuntary
- Voluntary
Principles of Customer Service
- The client above all
- Keep your promises
- Nothing is impossible
- The brand sells
- The customer is always right