Mastering Business Administration: Functions, Principles, and Strategic Planning

Administration: A Universal Phenomenon

Effective decision-making is crucial for a firm to achieve sound investments and excellent results. It always requires systematic coordination of resources. Administration is present in various contexts, including the state, the military, companies, educational institutions, and religious societies.

The Administrative Process: Key Management Functions

Planning: Setting Goals and Action Paths

A procedure for establishing goals and a course of action to achieve them.

Organization: Structuring Efforts for Goals

The process of structuring the efforts of two or more people working together to achieve a goal or a series of specific goals.

Direction: Guiding Group and Organizational Activities

Its function is to direct and influence the activities of members of a group or an entire organization with respect to a task.

Coordination: Integrating Interdependent Activities

The integration of activities of interdependent parts of an organization with the goal of achieving selected objectives.

Control: Ensuring Conformity to Plans

The process to ensure that actual activities conform to planned activities.

Fundamental Principles of Management

1. Division of Labor
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to General Interest
7. Remuneration
8. Centralization (or Degree of Decentralization)
9. Hierarchy
10. Order
11. Equity
12. Stability of Personnel Tenure
13. Initiative
14. Esprit de Corps (Union Staff)

Types of Plans: Mission

The mission defines the overall purpose and is directly related to satisfying the customer needs of the organization.

Examples of organizations with a clear mission:

• Banks, money market brokers
• Government, to administer property of all citizens

Types of Plans: Objectives

Objectives are the goals or purposes that an organization seeks to achieve through its existence and operations. They form a hierarchy, from the broadest to the most specific.

Examples of common objectives:

• To produce goods/services
• To sell in the domestic market
• To sell abroad

Types of Plans: Strategy

A strategy is a comprehensive and integrated plan that aligns the advantages and strengths of the company with the opportunities offered by the environment, seeking to ensure that organizational objectives are met.

Strategic considerations may include:

• Product selection for sales
• Establishing centers for liquidating discontinued products
• Merchandise purchasing and appropriation

Types of Plans: Policies

Policies are plans that limit decision-making by channeling or guiding thinking and action. They serve as guidelines for making decisions, enabling individual employees or executives to take similar decisions.

Examples of areas governed by policies:

• Worker training
• Receiving students for practical experience (internships)
• Determining product sales channels