Business Administration: Key Concepts and Processes

Posted on Apr 27, 2024 in Economy

GENERAL THEORY OF SYSTEMS

To effectively meet community needs, a company must establish relationships with various individuals, institutions, and other companies.

MANAGEMENT AND ADMINISTRATIVE PROCESS

Management is a continuous and systematic process aimed at achieving goals through the coordinated efforts of individuals. This involves defining objectives, determining methods, implementing actions, and evaluating effectiveness.

The administrator’s primary responsibility is to efficiently utilize the group’s efforts. While managers work within organizations, not everyone in an organization holds an administrative role.

SUMMARY OF BUSINESS PROCESSES: PLANNING, ORGANIZATION, MANAGEMENT, AND CONTROL

These processes work together to achieve the organization’s stated objectives.

SUMMARY OF THE CONCEPT OF MARKETING

Marketing is a business philosophy that emphasizes meeting consumer needs and desires as the foundation for a company’s economic and social justification. All activities should focus on identifying and fulfilling these needs to achieve company goals and long-term profitability.

Marketing Strategy Stages

  1. Defining the Target Market: Selecting the specific consumer segment to target, known as the target market.
  2. Developing the Marketing Mix: Utilizing the “4 Ps” (product, promotion, price, and place) to satisfy the target market.

FINANCE

Finance involves the art and science of facilitating numerical decision-making regarding the use of financial resources at personal, corporate, or governmental levels, considering resource scarcity, objectives, and future uncertainties.

Aspects of Finance

  • Funding: Identifying and acquiring resources for investment projects.
  • Investment: Efficiently allocating resources to various uses within the enterprise.

LIQUIDITY AND PROFITABILITY

  • Liquidity: The ability to meet short-term financial obligations (e.g., acquisitions, payroll, debt repayment).
  • Profitability: Generating resources to ensure long-term sustainability and efficiency.

Liquidity is short-term profitability, and profitability is long-term liquidity.

FINANCIAL AGENTS

  • External: Sources of funds from owners (equity) and creditors (debt).
  • Internal: Sources from operational activities (sales revenue) and non-operational activities (asset sales).

ADDITIONAL CONCEPTS

  • Types of Production Processes: Series, per order, per project.
  • Segmentation Variables: Geographic, socioeconomic, psychological, buying behavior.
  • Segmentation Strategy: Undifferentiated, differentiated, concentrated.
  • Tools for Communicating with the Target Market: Advertising, Sales Promotion, Merchandising, Direct Marketing, Public Relations.

DIRECT MARKETING

A system utilizing one or more media and communication channels to achieve a measurable response and/or commercial transaction at a specific point (mass marketing with a personalized approach).

DEFINITIONS

  • Marketing: Planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
  • Distribution: A set of intermediaries that enable companies to make their products and services available to customers.
  • Marketing Strategy: How marketing activities are planned and coordinated to achieve company objectives.
  • Brand: A name, term, symbol, design, or combination thereof that identifies a company’s products and services.
  • Place: Making the product available to the customer at the right time and location.
  • Product: Everything a company offers to the market to meet needs.
  • Promotion: Activities aimed at informing and persuading potential customers to purchase a product.
  • Advertising: Paid, impersonal communication through mass media about ideas, services, or products.
  • Share: A residual claim on a company’s cash flows.
  • Preferred Share: An equity obligation entitling the investor to a fixed amount of money.
  • Equity Bonus: The potential conversion of debt into equity under certain circumstances.
  • Marketability: The ease with which a security can be bought and sold.
  • Agency Cost: Costs arising from resolving conflicts between managers and shareholders.
  • Agency Theory: Studies the relationship between a principal (business owner) and an agent (manager).
  • Operations Management: Decision-making and leadership in production and distribution to achieve satisfaction.
  • Emergent Properties: Synergies arising from the interaction of two or more systems.
  • Parsinomia: Selecting the appropriate level of complexity.