A Comprehensive Guide to Business Administration Concepts and Theories

Posted on May 24, 2024 in Economy

CLASSIFICATION

REQUIREMENTS

  • Organic: Basic survival, physiological needs, social security (derived from the social nature of man), the need for affiliation.
  • Psychological (i.e., ego): Estimates, power, achievement, competence, and self-realization.

THEORY OF NEEDS (Maslow)

Needs are arranged in a pyramid:

  1. Physiological
  2. Security
  3. Affiliate
  4. Self-esteem

This theory says that power correlates with and can motivate the degree of individual psychological development.

TWO-FACTOR THEORY (Herzberg)

This theory states that the work itself is a great motivator. Herzberg found that people associate job satisfaction and dissatisfaction factors with two groups:

  • Motivators: Achievement, recognition, etc.
  • Hygiene Factors: Salary, security, etc.

EXPECTANCY THEORY

This theory posits that human beings engage in a rational process when selecting alternatives, aiming to maximize satisfaction. It shows strong similarities to decision theory.

CREATIVITY/INNOVATION

Creativity is the ability to create, to produce something from nothing. While creativity is the generation of an idea, innovation is the translation of that idea into a new product.

CREATIVE TYPES

  • Innovation
  • Synthesis (ability to absorb and use ideas from various sources)
  • Extension (from a basic invention, increasing its usefulness or extending its boundaries)
  • Duplication (copying the success of others)

TECHNICAL CREATIVITY

  • Analytic (logically treating the problem)
  • Free association (with a free flow of ideas)
  • Forced relations (with forced relations between two or more unrelated products or ideas)
  • Eclectic method: a combination thereof

COMMUNICATION NETWORK TYPES

  • Centralized: One transmitter occupies the central position in the network and receives all information.
  • Decentralized: Any element can be the sender or receiver.

STAGE PROCESS CONTROL

  1. Establish performance standards.
  2. Measure performance.
  3. Check the actual results against known standards.
  4. Take corrective action.

CLASSIFICATION PROCESS CONTROL

  • According to time: Preventive, permanent, a posteriori.
  • According to purpose: Accuracy, efficiency, tracked standard variable.
  • Types: Programmed, tracker, adaptive, optimal.

BUDGET TYPES

  • Income and expenditure
  • Time, space, materials, and products
  • Capital expenditures
  • Cash
  • Balance sheet

DESIGN: IDEAL ORGANIZATION

There is no universal answer. It is a complex, dynamic activity that has to take into account the contextual variables of the organization.

FORECAST PROCESS STEPS

  1. Design
  2. Model estimation of future behavior variables
  3. Comparison of current and anticipated outcomes of the process
  4. Correction

FORECAST MODELS

  • According to the forecast horizon: Short-term, medium-term, long-term.
  • Based on relevant data: Intuitive models, extrapolation models, explanatory models.

TECHNICAL FORECAST

  • Qualitative (intuitive models): Qualitative data are used, such as expert opinion. These are useful when data are scarce (e.g., market research).
  • Extrapolation models: These focus on historical data and use statistical techniques (e.g., moving averages).

BUSINESS OBJECTIVES FEATURES

  • Clear and specific
  • Measurable
  • Time horizon associated
  • Realistic
  • Flexible
  • Known

CLASSIFICATION – BUSINESS OBJECTIVES

  • Objectives based on the maximization of profit
  • Objectives of growth and market power
  • Objectives of stability and integration
  • Objectives of a social nature or service to the community

PHASES OF ADMINISTRATION BY OBJECTIVES (APO)

  1. Definition of objectives
  2. Development of action plans
  3. Periodic revisions
  4. Annual evaluation

APO BENEFITS

  • Promotes performance
  • Stimulates creativity
  • Increases motivation
  • Improves coordination

PRINCIPLES OF APO

  • Focus on results
  • Human behavior and motivation

TRAITS OF AN ORGANIZATION

  • Social entity
  • Oriented toward a common end
  • Established structure
  • Members develop differentiated activities
  • Rational and intentional coordination
  • Interaction with the external environment

ORGANIZATION

Coordination of activities of rational people who try to achieve a common goal and have an explicit division of work functions.

CHARACTERISTICS OF ADMINISTRATION THEORIES

  • Universal character
  • Study of the central problems of different organizations
  • Scientific and theoretical analysis of behavior in organizations
  • Applicable technologies to organizations

ADMINISTRATION PROCESS

  1. Planning: The process of making decisions to achieve goals.
  2. Organization: Establishing a formalized structure and permanent roles.
  3. Direction: Influencing people in the organization to help achieve objectives.
  4. Control: Monitoring activity to correct deviations that arise.

INTERPERSONAL ROLES

  • Figurehead: The manager is a symbol representing the organization.
  • Leader: The manager defines the culture and organizational climate.
  • Liaison: The organizational unit is directly linked to both the internal and external environment. These are relations of exchange.

INFORMATIONAL ROLES

  • Monitor: The manager receives and compiles information.
  • Disseminator: The manager shares information within the organization.
  • Spokesperson: The manager transmits information to the environment on behalf of the organization.

DECISIONAL ROLES

  • Entrepreneur
  • Disturbance handler
  • Resource allocator
  • Negotiator

STRATEGIC DECISIONS

Designed to achieve specific long-term targets.

TACTICAL DECISIONS

Structural elements do not change; their time horizon is short to medium term.

OPERATIONAL DECISIONS

Implement programs previously developed.

GLOBAL DECISIONS

Involving the entire company.

PROGRAMMED DECISIONS

Apply to structured or routine problems with a repetitive character.

NON-PROGRAMMED DECISIONS

These are new and non-repetitive in nature.

DECISIONS BY OBJECTIVE

  • Normal-oriented: Serve the survival of the company.
  • Solution-oriented: Aimed at preventing the worsening of a situation.
  • Goal-oriented: Aim for innovation and improvement of the current situation.

CHARACTERISTICS OF INFORMATION

  • Exact
  • Relevant
  • Timely
  • Comprehensive
  • Original
  • Temporary

INFORMATION SOURCES

  • Primary: Market information obtained directly for a specific problem.
  • Secondary: Information that is acquired and reduces the cost of primary information.