Fundamentals of Economic Science and Business Administration

Posted on Dec 13, 2024 in Other subjects

Item 1: Concept of Economic Science

The study of social laws that govern economic activity.

Concept of Economic Activity

It is an aspect of human behavior that expresses a relationship between ends and means, likely limited to alternative uses.

Concept of Production

Any conversion of property of a given order into another of lower order.

Bien

An object with the capacity to meet a need.

Order

Classification as to their suitability to meet human needs.

Factors of Production

Goods or factors of original production: it is derived from working and

  • Land
  • Nature
  • Capital
  • Company

Market Concept

A group of people who need a particular product or service, they want or may wish to buy, and have the ability to pay for it.

Classification of Markets According to the Number of Supply and Demand

  • Monopoly
  • Oligopoly
  • Free competition

Theme 2: Definition of Demand (Individual)

Number property which a subject is willing to buy at a specified price within a certain time and in a certain place.

Elasticity of Demand

Definition: The percentage that varies the quantity demanded when there is a 1% change in the price of the goods.

Demand Variations

Without changing the price, the quantity demanded remains unchanged.

Causes:

  • Changes in the income of the population
  • Changes in the composition of the population

Concept of Supply (Individual)

The amount that a subject is willing to sell at a specified price during a certain time in a certain place.

Changes in Supply

Without changing the price, the offer varies.

How is the Price Determined?

When you reach a balance between supply and demand.

Item 3: The Enterprise System

System Concept

A group of ordered and interrelated items that exist within an environment.

Classes

  • According to the nature of elements: Abstract or intangible, Concrete or physical
  • According to relation between system and environment: Open or Closed

Effectiveness

Achieving the objectives pursued.

Efficiency

Achieving goals using a proportionate amount of resources.

Features of the Company as a System

  1. Mixed system
  2. Open system
  3. Objectives previously established (Planning)
  4. Psychosocial System
  5. Technical System
  6. Organized by System
  7. Organizational Structures
  8. Systems evolve over time
  9. Has regulatory mechanisms

Components of a Company’s Specific Environment

  1. Consumer
  2. Providers
  3. Competitors
  4. Socio-political component
  5. Component technology

General Objectives and Functions of a Business

  • Targets:
    1. Economic
    2. Technical
    3. Social
  • Features:
    1. Land Use / Shopping
    2. Production
    3. Sales / Commercial
    4. Financial
    5. Personal
    6. Administrative / Policy

Item 4: The Subsystem Management Company

Purpose of Administrative Functions

  1. Broad sense: To guide, lead, and govern the company as a whole.
  2. In detail:
    1. To direct the company towards the achievement of objectives.
    2. Governs the other functions of the company.
    3. Adjusts the interrelationships between the enterprise system and the environment.

Different Ways of Naming Those Responsible for Administering a Company

Administrators = Managers = Chief = Executive = Controls

What Constitutes the Administration?

A process articulated in 4 basic functions that occur during the life cycle of the company.

  • Functions:
    1. Planning: Decision of the objectives pursued by the company and more shares for realizing them.
    2. Organization: Establish a formal structure of authority and communication tasks within the human group of the company.
    3. People Management: A function that tries to influence subordinates to be anxious with an interest in the objectives of both the company and the unit to which they belong.
    4. Control: Role of monitoring, surveillance, and monitoring to detect whether they are meeting targets or not (no corrective action form).

Roles of Managers

  • Interpersonal:
    1. Representative
    2. Leader
    3. Coordinator or liaison
  • News:
    1. Receiver
    2. Diffusion
    3. Spokesman
  • Related to how decisions are made:
    1. Entrepreneur
    2. Problem Solver
    3. Resource Allocator
    4. Negotiator

Levels of Management

  1. Senior management (Director General)
  2. Middle management
  3. Operational Management

Decisions

Making a decision is to choose a particular course of action among several possible alternatives.

Rating

  1. Strategic
  2. Intermediate Tactics
  3. Operating

Range

  1. Space
  2. Temporary
  3. Economic
  4. Flexibility
  5. Complexity

Planning

Definition

The study and setting of the objectives of a company and how to reach them.

Principles that Should Underpin Planning

  1. Contribution to objectives
  2. The primacy of planning
  3. Extension of planning
  4. Efficiency

Concept Plans

They are documents (letters) which describe the actions set out in planning.

Definition and Types of Forecast

  • Concept: The estimate of possible future behavior of the environment variables and how they may affect the company, based on past and present behavior of these variables.
  • Classes:
    1. Following the nature of the variables of the forecast: Quantitative and Qualitative
    2. Given the time horizon covered by the forecast: Forecast short-term (<1 year), Medium-term forecast (1-2 years), forecast long-term (>3 years)

Relationship Between Planning, Forecasting, and Control

Planning Stages

(Analogy with decisions)

  1. Strategy
  2. Intermediate / Tactics
  3. Operations

Concepts

  • Politics: Statements, usually explicit, to guide managers in making decisions (agreement, policy framework, scope, who are set)
  • Procedures: Sequence of actions necessary to resolve everyday problems, repetitive, structured (not structural).
  • Program: Plan which describes a series of actions through which seeks to achieve a specific objective for once.
  • Budgeting: Financial quantification units, in monetary units, resources needed to guide the actions described in the plans.

Theme: Decision-Making in the Enterprise

Meaning of Decision

Choosing a course of action among several possible alternatives.

Stages or Phases of the Decision Process

  1. Perception
  2. Formulation of alternatives to solve the problem
  3. Evaluation of the alternatives
  4. Implementation of the strategy chosen

Elements of the Decision Process

  1. Strategies (Alternative courses of action)
  2. States of nature (events)
  3. Predicting the probability of occurrence of each of the states of nature
  4. Outcomes
  5. Criteria for decision

Decisions in Situations of Certainty

Decision problems in a situation of certainty: those in which each strategy corresponds to a result and nothing more than a result.

Decisions Under Uncertainty

A strategy you can match each other results, the fact that the result is one or the other depends on the emergence of a state of nature.

Decisions at Risk

It explicitly assigns a probability to each of the possible states of nature of the problem.

Analysis a Priori, a Posteriori and Pre-to Post

  1. Analysis a priori: Is to choose the best strategy with the initial information is available on the appearance probabilities of different states of nature (prior probabilities)
  2. Analysis post: Is to choose the best alternative after correcting the probabilities a priori information has been obtained additional concrete.
  3. Pre-post analysis: It is discussed in this case, whether or not it’s worth from the economic point of view to acquire specific additional information.

Organization in the Company

Meaning of Organization

(As a function of management) Process that controls, once made plans, combine human and material resources to establish a formal structure of authority and communication tasks within the group’s human company.

Stages or Phases of the Communication Process

  1. Subdivide all the work necessary to achieve the objectives of the company in a series of elementary activities (tasks).
  2. Group the tasks into jobs and assign each job to an individual.
  3. Group jobs in simple or elementary OUs, then group these units in other more complex and so on. This is Departmentalization.
  4. Put an administrator or controller in charge of these units.
  5. To confer upon each command the necessary authority to carry out their functions.
  6. Vertical relationships: Establish formal lines of communication and authority among the various levels of command company.
  7. Foreign side: Implement effective systems of coordination between different organizational units created.

Organizational Structure: Concept

System of formal relations of authority, communication, and coordination between the human elements of the company with a view to achieving the objectives pursued.

Drawings of the types of charts, or linear structure / hierarchical pure / Military / / / pure functional structure – Staff linear structure:

Principles of Organization

  1. Division of labor
  2. Control unit
  3. Principle authority and responsibility is not required to respond to what you do not have permission to do, and the recipient authority is obliged to account for its exercise.
  4. You must be a balance between authority and responsibility.
  5. Extension of control.
  6. Presence authority.
  7. Principle of balance between the vertical development and horizontal development of the internal organization of the company.

Theme: Human Resources Management

The Management of Human Resources as an Essential Function of the Administration: Concept

Process through which a leader influences subordinates to contribute their enthusiasm and interest to the achievement of company objectives.

Theory X Assumptions of McGregor

  1. Humans, in general, have an innate aversion to work and avoid it if possible.
  2. Therefore, most people should be pressed and should be threatened with punishment to make the effort that the company expects of them.
  3. Human beings generally prefer to be directed, they want to avoid responsibility, have relatively little ambition, and want security above all.

Suspected of McGregor’s Theory Y

  1. The investment of physical and mental effort in work is as natural as rest or play.
  2. External control and punishment are not the only means to achieve the necessary efforts to achieve the objectives of the organization. People exercise self-direction and self-serving objectives which are committed.
  3. The degree of commitment to the objectives is proportional to the magnitude of the rewards associated with their achievement.
  4. Human beings learn, under appropriate conditions, not only to accept but to seek responsibility.
  5. Many people have the quality to bring imagination and creativity to solve business problems.
  6. Under the conditions of modern industrial life, only partially used the potential of human beings.

Leadership: Concept

The art of a manager to influence people is responsible for them to try, with willingness and enthusiasm to achieve the goals assigned to the group that directs and thus contributing to achieving business goals.

Notes or Components of Leadership Core

  • Ability (chief) to use the power he wields with effectiveness/efficiency and accountability.
  • Reward power.
  • Coercive power or ability to punish
  • Legitimate power or authority itself.
  • The authority of experience.
  • Power of reference.
  • Ability to understand subordinates and understand that human beings have different motivating forces, which also vary with time and circumstances.
  • Ability to learn to inspire their subordinates attitudes and predispositions, to apply all their skills in carrying out the work assigned.
  • The leader’s style and atmosphere that it creates in its environment and within the group.

Information: Concept

It is the management function is designed to induce employees’ behavior towards the interests of the organization.

Major Instrumental Techniques of Motivation

  1. Money and material rewards.
  2. The worker’s participation in the administrative functions relating to their own work.
  3. Job enrichment.
  4. Motivational Mixed: Groups or semi-autonomous work teams, the positive reinforcement programs quality of working life.

Communication: Concept and Elements

The transfer of information from a sender to a receiver so that he understands it.

  • Components: Transmitter, encoding, message, channel, decoding, receiver, Noise, Feedback

Rules for Good Communication

  1. Use direct communication, face to face.
  2. Be sensitive to the world of the receiver, showing empathy, patience, and respect.
  3. Use a simple and direct language, understandable.
  4. Avoid negative attitudes and the communication process.
  5. Use feedback by asking questions, seeking information.

Theme: The Control in the Company

The Main Function is to Control the Administration: Concept

The process of permanent observation and measured by regular comparison of expected results and their subsequent achievements, which will produce information that will help govern decisions aimed at achieving the objectives.

Classes of Control

  • Classification by:
    1. The time it takes place before: Control, permanent or current control, post control.
    2. The purpose: Control of accuracy or regularity, control of efficiency.

Different Techniques Used in Control Function

They can be classified into 2 groups:

  1. Budgeting techniques
  2. Non-budgetary techniques:
    1. Personal observation.
    2. Audits
    3. Analysis of ratios
    4. Analysis of neutral
    5. Techniques (PERT temporary control economic deproyectos)
    6. Different mathematical and simulation techniques.