Administration (business)

In business, administration consists of the performance or management of business operations and thus the making or implementing of a major decision. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives.

The word 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”).

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 management information systems services, is what is intended when the term “the administration” is used.

In some organizational 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 reactive rather than proactive.

The world’s first business school, the Ecole Supérieure de Commerce de Paris, France, was established in 1819. The first business school in the United States, the Wharton School of the University of Pennsylvania, was founded in 1881. Anecdotically, top French business school HEC was also created in 1881, while Harvard Business School, founded in 1908, was born just one year after France’s prestigious ESSEC Business School.

[edit] 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 Henri Fayol as “the 5 elements of administration” (in bold below).

  • 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 a 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 (Coordinating). 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 (Commanding) is leading people 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 economic production.
  • Controlling’ is a function that evaluates quality in all areas and detects potential or actual deviations from the organization’s plan. This ensures 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.

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