The importance of Business Administration

What is meant by administration?

The coordinated effort of a social group to obtain an end with the greatest efficiency and the least possible effort.

  • Henry Sisk and Mario Sverdlik say: “It is the coordination of all resources through the process of planning, direction and control, in order to achieve established objectives.”
  • Robert F. Buchele: “The process of working with and through other people in order to achieve objectives, of a formal organization.”
  • Harold Koontz and Cyril O`Donnell: «It is the direction of a social organism and its effectiveness in achieving its objectives, based on the ability to lead its members.»
  • Isaac Guzmán Valdivia: “It is the effective direction of the activities and the collaboration of other people in order to obtain certain results.”
  • George R. Terry: “It consists in achieving a predetermined objective, through the efforts of others.”
  • José A. Fernández Arena: “It is a social science that pursues the satisfaction of institutional objectives through a structure and through coordinated human effort.”

The term management refers to the process of getting things done, efficiently through and together with other people.

Management is the process of working with people with resources to achieve company goals effectively and efficiently.

Elements of the Administration Concept

  • Objective: That the administration is always focused on achieving ends or results.
  • Efficiency: It consists of achieving the objectives by satisfying the requirements of the product or service in terms of quantity and time.
  • Efficiency: It refers to doing things well. It is to achieve the objectives guaranteeing the resources available at the minimum cost and with the highest quality.
  • Social group: For the administration to exist, it must always be within a social group.
  • Coordination of resources: To manage, it is necessary to combine, systematize and analyze the different resources that intervene in the achievement of a common goal.
  • Productivity: It is the relationship between the amount of inputs necessary to produce a certain good or service. It is obtaining the maximum results with the minimum of resources, in terms of effectiveness and efficiency.

Administration as art, technique and science

Administration as art

In ancient times, it was thought that administration was an art, since there was a belief that making resources work was a skill, taking into account that art is defined as “The achievement of results through the application of skills to achieve the desired objectives”, which is why it is said that administration is one of the most creative arts because it organizes and uses human talent.

It refers to the use of the fundamental knowledge that administrative science provides and its application to a specific situation based on the knowledge, capacity, ability and skills of administrators in the perspective of obtaining practical results. It is said that managing is an art, but the term is used more properly to refer to the body of knowledge (science) that serves as its foundation.

Administration as a technique

Because it uses specific procedures derived from its scientific nature because it complies with the following:

  • With the value of utility because it is used to organize in relation to objectives that generate products in organizations.
  • Because it is made up of a set of rules and instruments necessary to regulate the relationships between the members and hierarchies of the organisms.
  • Because it uses changing procedures to make processes dynamic, updating with innovations in technical, material and human resources.
  • Because it creates the rules and instruments that make up a technique, according to innovations and obsolete ones are abandoned.
  • Because it has an essentially practical character of realization, taking up interdisciplinary aspects of science.

Administration as Science

  • It has a defined theoretical framework, since the middle of the 18th century with the Industrial Revolution that the studies have been systematic.
  • Because it has responded to social needs about organization.
  • Because it has responded to changing and updated practical needs, which have resulted in the reinforcement and innovation of initial theories.
  • Because they have been used through different methods with which pre-established objectives have been achieved.
  • Because such results have been observable and experimental. Administration can be conceived as a science, this is a set of ordered and systematized knowledge of universal value, which studies companies and organizations for descriptive purposes, to understand their operation, evolution, growth and behavior. It is a tactical science, which has as its real objective organizations.

What is the importance of administration?

The importance of administration is that it imparts effectiveness to human endeavors. It helps to obtain better personnel, equipment, materials, money and human relations. Stays ahead of changing conditions and provides foresight and creativity. The improvement is its constant watchword.

Administration features

  1. Universality The administrative phenomenon occurs wherever there is a social organism, it is the global decision-making process aimed at achieving organizational objectives effectively and efficiently, through planning, organization, integration of personnel, direction (leadership) and control. The administration is given for the same in the state, in the army, in the company, in educational institutions, in a religious society, etc. It can be said that the administration is universal because it can be applied in all types of social organism and in all existing political systems.
  2. Specificity Although the administration is always accompanied by other phenomena of a different nature, the administrative phenomenon is specific and different from those it accompanies. You can be a great production engineer and a lousy manager. Administration has specific characteristics that do not allow us to confuse it with another science or technique.
  3. Temporary unit. Although stages, phases and elements of the administrative phenomenon are distinguished, it is unique and, therefore, at all times in the life of a company, all or most of the administrative elements are occurring, to a greater or lesser degree.
  4. Hierarchical unit. All those who have the character of heads in a social organism, participate in different degrees and modalities, of the same administration. In a company they form a single administrative body, from the general manager to the last butler.
  5. Instrumental value. Administration is a means to an end, that is, it is used in social organizations to efficiently achieve the established objectives.
  6. Interdisciplinarity. The administration makes use of the principles, processes, procedures and methods of other sciences that are related to the efficiency in the work. It is related to mathematics, statistics, law, economics, accounting, sociology, psychology, philosophy, anthropology, political science.
  7. Flexibility Administrative principles and techniques can be adapted to the different needs of the company or social group.

Administration functions

1. Plan

It is the process that begins with the vision of the No. 1 of the organization; the mission of the organization; set organizational objectives, strategies and policies, using the Strategic Map as a tool; all this taking into account the strengths / weaknesses of the organization and the opportunities / threats of the context (SWOT Analysis). Planning covers the long term (from 5 years to 10 or more years), the medium term (between 1 years and 5 years) and the short term where the annual budget is developed in more detail.

2. Organize

Answer the questions of, Who? going to perform the task, involves designing the organization chart defining responsibilities and obligations; excuse me? the task is going to be done; when? it is going to be done; Through the design of Business Processes, Coursegrams that establish the way in which tasks should be carried out and in what time sequence; in short, organizing is coordinating and synchronizing.

3. Lead

It is persuasion, which is exercised through Leadership over individuals to achieve the set objectives; based this on decision making using logical and also intuitive Decision Making models.

4. Check

It is the measurement of the performance of what has been carried out, comparing it with the objectives and goals set; deviations are detected and the necessary measures are taken to correct them. Control is carried out at the strategic level, the tactical level and the operational level; the entire organization is evaluated through a management control system; on the other hand, external audits are also contracted, where the different functional areas of the organization are analyzed and controlled.

Relationship of the administration with other sciences.

Relationship of the administration with the Social Sciences

  • Sociology: Science that deals with the constitution and human societies.
  • Psychology: Science that deals with the soul, with the phenomena of consciousness. Character, to be.
  • Law: Study of laws and provisions to which all civil society is subject.
  • Economy: Science that is responsible for the study of the mechanisms that regulate the production, distribution and consumption of wealth.
  • Anthropology: Science that deals with the study of man.

Administration’s relationship with Exact Sciences

  • Mathematics: Science that deals with the study of abstract systems (numbers, geometric figures, etc.)

Relationship of the administration with Technical Disciplines

  • Industrial engineering: Application of scientific knowledge to research, improvement and use of industrial technique in all its branches.
  • Accounting: Science of keeping accounts.
  • Ergonomics: Also known as human engineering, design of instruments, equipment and work facilities, according to human anatomical characteristics including psychological aspects.
  • Cybernetics: Science that studies the automatic mechanisms of machines.

Major Theories, Schools, and Approaches to Management

In this subtitle they will be listed according to how they appeared and developed, they are:

  • Scientific theory of management.
  • Classical organization theory.
  • Approach to human relations.
  • School of Administrative Sciences.
  • Systems approach.
  • Contingency approach.
  • Human resources approach.

Scientific Theory of Management

Theories as a consequence of the existing situation at a certain stage had their precursors who were personalities in their time and who contributed very important elements that served as the basis for their appearance and development. Among these personalities, the following stand out:

Adam Smith, whose contribution on aspects related to the division of labor had an impact on the economy of time and labor, raised a series of ideas related to the economy that are expressed in his work “The Wealth of Nations” which was An attempt to lead economics towards an independent science, this work is based on class and liberal political economy, which is why Smith is recognized as “The Father of economic liberalism” by basing his economic policy on a “natural law” that implied the non-intervention of the State and the competition not limited.

Contributing to Taylor were several important figures such as Henry Gantt and the Gilbreths (Frank and Llilian).

The scientific theory of management is characterized, among others, by the following aspects:

  • Division of the activities in very simple tasks which were carried out by the workers in the amount of one or two, which were repeated in their execution.
  • Separation of management activities from executing activities.
  • Limited knowledge of the workers, only about the activities to be carried out, which, as explained, were very simple. Simple tasks simple workouts.
  • The increase in productivity was sought on the basis of a strict control over, the methods used in the work process, the movements that were executed and the measurement of the times of these, the determination of the work rhythms.
  • Monetary incentive system by increasing the salary of workers who obtained the best work results.
  • Consider man as “rational” encouraged only by economic elements.
  • The alleged cooperation between the administration and the workers would allow

Henry Fayol, stated that the administrative activities should be divided into six parts which were closely related, which were: Technique, which would deal with production; Administrative, which would develop the functions of management; Commercial, for purchases and sales; Accountant; Financial, to manage capital; Security, protection of employees and property.

Fayol outlined fourteen principles about management, some remain valid and are used frequently today. The principles enunciated were: division of labor, authority, unity of command, unity of direction, discipline, centralization, hierarchy, remuneration, subordination of the individual interest to the interest of the group or organization, order, equity, initiative, team spirit and stability of the personal.

Max Weber, with his bureaucratic conception of administration , was a great contributor to the development of classical theory, he argued that a well-defined hierarchy with written and precise concepts, rules, norms and procedures contributed to the development and performance of the organization. His managerial style and administrative technique were based on centralization and authoritarianism. It also argued that the only way for an organization to survive in the long term was under strong regulations.

Another of their criteria stated that performance evaluations should be carried out on the merits of the workers.

This theory has the following characteristics:

  • The criteria formulated must be based on the fourteen principles stated, which according to this theory can be taught.
  • Charges are the essential element of the bureaucratic administrative aspect.
  • Its foundation is governed by written regulations, standards and procedures.
  • Grouping of the activities to be carried out in the six planned parts.
  • Superior effectiveness and efficiency are ensured through strictly defined hierarchical authority.

Human relations approach

With the classical school, the conclusion was reached that the human being was motivated by his economic needs, a question that was refuted by some of the scholars of the subject, so work has continued in the search for more up-to-date criteria and at the same time taking into account other aspects, also obtaining other important conclusions.

One of the interpretations that were made of the investigations was that the workers improved their performance due to the attention that had been given to them when carrying out the study, this fact was called the “Hawthorne Effect”.

This approach or movement of human relations raised another version that consisted of which the man was motivated by his social needs and that the compulsion of the group was an important factor as well.

School of Administrative Sciences

It consists of the creation of multidisciplinary teams especially in mathematics, physics and other disciplines, which received the name of operations research teams (IO), which were used in the presentation, to the managers and heads of the organizations , problem solving.

Later, with the appearance of computers, other possibilities appeared that made it possible to deepen and expand the number of variables, as well as to improve the results of the solutions, being able to create models that more accurately simulated the real situation, change the variables themselves or their values ​​and lighten the time of realization by the speed of calculation of the equipment.

Systems approach

Of great repercussion and interest is the systems approach, which specifies and expresses the organization as a system formed by various interrelated and interdependent subsystems, so it does not value it in parts but as a whole in an integral way, taking into account not only the internal aspect but also the environment of the organization.

The systems approach is characterized and defined within the administration as a system made up of its parts which interact with each other, their variations affecting all the others, not always in the same way and magnitude.

Contingency approach

Based on observations made by scholars of the subject, researchers, managers and administrators, where in multiple apparently identical events, techniques similar to those previously used were applied and the results obtained were not as expected.

The aforementioned was explained by the change in the situation in the environmental conditions, so that before using a theory or approach, the environment should be taken into account based on the changes that originate in it and look for changes in the environment. organizational development process.

Human resources approach

The second half of the last century was characterized by the great variety of investigations and experiments carried out on various aspects of great influence on the successful development of human resource management and other organizational processes.

In this approach, the relationship between bosses and workers requires a depth and complexity that allow a greater interrelation between both parties, with the objective that high levels of performance can be achieved by workers through the deployment of their knowledge, their initiative and their creativity.

Administrator roles

Interpersonal Roles:

All administrators are required to perform functions that are ceremonial and symbolic in nature. When the rector of a university awards diplomas at a graduation, or a manufacturing supervisor accompanies a group of high school students on a plant visit, they act in a role of representation and figurehead. All administrators have a leadership role. This role includes the hiring, training, motivation, and discipline of employees. The third role within the interpersonal grouping is that of liaison.

Mintzberg described this activity as the contact of external sources that provide information to the administrator. These sources are individuals or groups outside of the manager’s unit and can be found inside or outside the organization. The sales manager who gets information from the personnel manager in the same company has an internal liaison relationship.

Information Roles:

All administrators, to a certain degree, receive and capture information from organizations outside their own. These are usually done by reading magazines and talking to other people to find out about changes in public tastes, what may be planning competitors and the like. Mintzberg called this the role of monitoring or surveillance. Administrators also act as a conduit for transmitting information to members of the organization. This is the role of disseminator. When they represent the organization in front of strangers, administrators also play the role of spokespersons.

Decisional Roles:

Finally, Mintzberg identified four roles that revolve around decision making. As entrepreneurs, managers initiate and supervise new projects that will improve the performance of their organization. As riot handlers, they take corrective action.

Business administrators

They are responsible for directing the activities of others and supervising by performing the basic functions of administration and perform various administrative or managerial roles. Their purpose is to create an open communication environment, making the most of all resources. Detect all kinds of needs and motivate staff. From three aspects:

  • Technician: use the procedures and techniques for optimal performance.
  • Human: provides all the elements to give importance and value to people within the organization.
  • Social: helps them to identify the internal and external needs of the organization, and the effects of the environment.

The Administrative Process

It is the tool that is applied in organizations to achieve their objectives and satisfy their lucrative and social needs . If the administrators or managers of an organization carry out their work properly through efficient and effective management, the organization is much more likely to achieve its goals; Therefore, it can be said that the performance of managers or administrators can be measured according to the degree to which they comply with the administrative process.

Origin of the administrative process

The administrative process and functional areas paradigm was developed by Henri Fayol (1916). Although it is still debated whether management is a science or, on the contrary, it is art, from a functionalist perspective it is affirmed that the basic function of management, as a practice, is to select appropriate objectives and direct the organization towards their achievement. . This implies defining administration as a process that, as such, requires the execution of a series of functions. Fayol described administrative activities as composed of the functions of planning, organizing, directing, coordinating and controlling

Phases of the administrative process

There are two phases in the administrative process, one mechanical and the other dynamic.

In the first, mechanical phase, it seeks to establish what to do and the necessary structure to do it is prepared, including planning and organization activities.

The second, dynamic phase, refers to how that social organism that has been structured is managed and comprises the activities of direction and control.

  1. Planning: It consists of knowing what is going to be done in advance, what is going to be the direction that is going to be taken to achieve the objectives in the most efficient way. What do you want to achieve (objectives)? What is going to be done to achieve it? Who and when is going to do it? How are you going to do it (resources)? Planning is about creating a desired future.
  2. Organization: It is a system that allows a balanced use of resources whose purpose is to establish a relationship between the work and the personnel who must perform it. It is a process where it is determined what must be done to achieve an established or planned purpose, dividing and coordinating activities and supplying resources.
  3. Direction: It is the function that tries, through interpersonal influence, to ensure that all those involved in the organization contribute to the achievement of its objectives. It is exercised through three sub-functions: leadership, motivation and communication.
  4. Control: It is the function that measures the results obtained by comparing them with the expected (planned) in order to seek continuous improvement.
  5. Integration: Integrating, with what and who is going to be done, consists of selecting and obtaining the financial, material, technical and human resources considered necessary for the proper functioning of a social organism., Integration groups communication and the harmonious meeting of human and material elements, selection, training and compensation of personnel.
  6. Forecasting: What can be done, consists of diagnosing the information and available data, in such a way that anticipation or construction of the context in which the organization will find itself is made possible.

Various criteria of the administrative process

It is important to know that there are different opinions regarding the number of stages that constitute the administrative process, although, in fact, for all authors the essential elements are the same.

The stages that are generally considered essential are: organization, control, direction, leadership and coordination, this for most authors.

1. Mechanics

  • Planning: What is going to be done? What do you want to do?
  • Organization: How is it going to be done?

2. Dynamics

  • Direction: See what is done.
  • Control: How has it been done?

Institutional Values ​​of the Administration in the Administrative Process

The administration of an eminently social nature is governed by a series of values ​​that provide not only moral validity before the population, but also ethical information that should guide the conduct of the administrator in society.

The institutional values ​​of the administration are:


These are the most important, since they contribute to the well-being of society through:

  • The improvement of the quality and price of the product and / or service to adequately satisfy the real needs of the human being.
  • The improvement of the socioeconomic situation of the population.
  • The fulfillment of fiscal obligations that allow to sustain the local and federal governments.
  • Avoid unfair competition.
  • The promotion of development through the creation of jobs.
  • Increase and preserve the natural and cultural wealth of society.


They are those that tend to improve the organization of the resources available to the social group, and that tend to:

  • Promote innovation, research and technological development.
  • Optimize resource coordination.
  • Maximize efficiency in methods, systems and procedures.
  • Reconcile interests among the same members of the social group.


They are those that are oriented to obtaining economic benefits and that can be:

  • Generating wealth.
  • Maximizing profit making.
  • Properly managing financial resources
  • Promoting the economic development of the social group.
  • Promoting investment.