What is business administration?
Business administration refers to the processes and management of a business or organisation – this could be human resources, marketing, or accounting.
It covers a broad sector within business and could be any form of strategic management within a company at all levels of a business operating model.
Business administration can be applied to most industries including retail, hospitality, e-commerce, technology, automotive, professional services, and healthcare.
What does business administration involve?
There is a lot involved in the operations and administration of a business. Not only does business administration cover the management of business operations and decision making, but it also focuses on how people and resources are professionally managed and what can be done to reach common business goals.
Business administration refers to broader management functions, such as:
- Accounting – The process of observing financial accounts in relation to a business and analysing these transactions for tax and regulatory purposes.
- Marketing – A set of activities relating to planning and implementing marketing material. This is the process for delivering offerings for goods or services that satisfy the needs of customers.
- Business operations – This varies depending on the business. However, in general terms, it is anything that happens in relation to keeping a business running and earning revenue.
- Payroll – The procedure of paying wages to a company’s employees.
- Finance – The process of managing or providing funds for business activities. It is a broad term that encompasses areas such as banking, investments, capital markets.
- Credit control – This is a lending strategy that involves the sale of goods or services through credit offerings to customers.
- Human resources (HR) – An area of business focussed on recruiting, administering and training employees.
- Inventory – The management of raw material used by a business to manufacture goods or products.
- Research and development – This is the research and implementation of ideas for new products and services.
Why business administration is necessary
Business is viewed as a commercial, industrial, or professional organisation that sells goods or services in exchange for payment or profit. And a key element in defining business is profit. But without clear management at all levels of business operations, it would be difficult to generate sales and, as a result, receive profit. Therefore, business administration activities are the systematic efforts made to achieve these goals or objectives. Business administration is imperative to the successful functioning of an organisation.
Within business, there will often be a focus on the production and supply of goods and services, the raw materials needed for everyday operations, and you’ll typically have a team of people who operate the different levels within the business.
As a business, you must engage in a common set of functions to achieve a company’s goals or objectives. With money, people, and materials, you need a management team to offer direction and planning to employees to reach these goals.
Five functions of management
Management is a key factor in business administration. The direction and supervision offered through management activities help to seamlessly run day-to-day business operations. Underpinning the fundamental elements within business administration is Henri Fayol’s five principles of management. It includes:
- Planning is preparing for the short-term and long-term business prospects and considering strategic objectives to help reach these goals and objectives. The planning element allows managers to identify a business’s path from where it is to where it wants to be.
- Organising the business must be grouped into departments and divisions. This allows for the business to operate in an efficient manner. To avoid a skills gap, managers should also train new recruits to maintain a skilled workforce.
- Commanding is the ability to lead people in a way that will accomplish a business’s goals. To do this, managers or administrators must allocate resources effectively and know the skills set of their employees. This also requires the ability to motivate colleagues while also offering an efficient support system.
- Coordinating is the ability to create a well-synchronised operation where all elements within a departmental unit run seamlessly. This requires each employee to know their responsibilities and to work as a team and benefit each other.
- Controlling involves managers making sure business operations fall within the rules, plans and processes of their company. Should anything deviate from these plans, it is the manager’s responsibility to report such issues.
What jobs are available in business administration?
Since business administration covers such a broad area of business, there are many jobs available within the sector. Just some of the jobs included within the business administration segment are operations manager, HR director, market research analyst, sales representative, marketing associate, and advertising executive.
What is an administrator?
An administrator, also referred to as a general manager or company secretary, is different to that of business administration. An administrator is one specific job role. Whereas business administration refers to one broad term covering the management operations of a business. An administrator may be responsible for providing office support, diary management or data entry, or it could include reporting business activities to a corporate board of directors.
Is there a difference between administration and management?
Broadly speaking, the term administration differs from that of management. The key difference between the terms is that administration is a high-level business activity focussing on the data, plans and objectives of an organisation. Whereas management is concerned with implementing the plans and policies put forward. However, business administration does offer a form of management. This is because it involves managing a business, deciding what is to be done and when it is to be done. When working within business administration, you will be responsible for advocating strategic management policies within a company to help it reach its goals and objectives.
What is business administration: Summary
- Business administration is the performance or management of business operations. It covers the broad functions of a business such as marketing, accounting, HR, and research and development.
- Administration requires a wide range of knowledge and skills, which are necessary to the success of any business.
- There are five elements to management: planning, organising, commanding, coordinating, and controlling.
- Without business administration, it may be difficult for an organisation to progress and reach future goals and objectives.
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