MANAGEMENT AND BUSINESS ADMINISTRATION
Management and Business Administration are the two terms that are used interchangeably and synonymously.
Management refers to the art of getting things done through others.
Administration refers to the function of determining the corporate policy and supervising the overall functioning of the concern.
Various viewpoints discussed regarding these two terms are as follows:
BUSINESS ADMINISTRATION IS DIFFERENT FROM MANAGEMENT
The classical thinkers like Oliver Sheldon, William Spriegal, Millward, Lansberg , Ordway Ted etc are of this opinion that the management and administration are two different things. As per this view, administration is a higher level activity where as the management is the lower level activity. Administration is concerned with determination of overall objectives and policies of an enterprise while management is concerned with planning, coordinating and controlling of the business activities for attaining the enterprise objectives.
ACCORDING TO OLIVER SHELDON
“Administration is the function in industry concerned with the determination of the corporate policy, the coordination of finance, production and distribution, the settlement of the compass (structure) of the organization under the ultimate control of the business.”
“Management is the function in industry concerned with the execution of policy within the limits set up by the administration and the employment of the organization for the particular objects set before it.”
ACCORDING TO WILLIAM R SPRIEGAL
“Administration is that phase of business enterprise that concerns itself with the overall determination of institutional objectives and the policies necessary to be followed in achieving those objectives. Administration pre-determines the specific goals and lays down the broad areas within which these goals are to be attained. Administration us a determinative function, management on the other hand is an executive function which is primarily concerned with the carrying out of the broad policies laid down by the administration.”
ACCORDING TO G.E. MILWARD
“Administration is primarily the process and the agency used to establish the object or purpose which an undertaking and its staff are to achieve, secondarily, administration has to plan and stabilize the broad lines of principles which will govern action. These broad lines are in their turn usually called policies. Management is the process and the agency through which the execution of the policy is planned and supervised.”
ACCORDING TO PROFESSOR DALTON E. MC. FARLAND
“In government agencies administration is preferred over management, although in recent years, the term management has become widely used in government agencies. Another possible distinction refers to the levels of organization. In business, the term administration refers to the activities of the higher ups in the managerial ranks. Still another distinction related to organizational level is that administration refers to the determination of major aims and policies while management refers to the carrying out the operations designed to accomplish the aims and effectuate the policies. Here again, this distinction is not widely followed, but it exists.”
ACCORDING TO ORDWAY TEAD
“Administration is the process and agency which is responsible for the determination of aims for which an organization and its management are to strive, which establishes the broad policies under which they are to operate and which gives general oversight to the continuing effectiveness of the total operation in reaching the objectives sought. Management is the process and agency which directs and guides the operations of an organization in the realizing of established aims.”
ACCORDING TO LEFFING WELL AND ROBINSON
Administration determines the policies upon which the enterprise is to be conducted while the function of management to carry out the policies is laid down by the administrative group.”
Thus, administration is a thinking function and management is a doing function. According to this concept, owners of the business enterprise receive dividends in return for their capital contributed. Managers i.e. the management people get salary for realizing the objectives laid down by administrators i.e. the owners. Besides, the managers direct and control the subordinates within the limits fixed by the administrators.
MANAGEMENT INCLUDES ADMINISTRATION
The approach that the management includes the function of administration is contributed by EFL Brech. This approach dives the management function into two categories:
- Administrative management
- Operative management
The upper level management is usually called administrative management and the lower level is known as Operative management. As per this view, administration is subordinate to the management. The European school of thought considered administration as a part of management. Kimball and Kimball and Rickman were also of the same view.
ACCORDING TO EFL BRECH
“Management s a social process entailing the responsibilities for the effective and economical planning and the regulation of the operation of an enterprise, in the fulfillment of a given purpose or task. Administration is a part of management which is concerned with the installation and carrying out of the procedures by which it is laid down and communicated and the process of activities regulated and checked against plans.”
MANAGEMENT AND BUSINESS ADMINISTRATION ARE THE ONE
Management and Business Administration are one is the most practical and popular approach. This approach is the contribution of Henry Fayol, Peter F Drucker, George R Terry. They consider these two words as synonyms which are used interchangeably. Other management authors who support this view are Newman, Allen, Theo Haimann, Koontz and O Donnell.
ACCORDING TO HENRY FAYOL
“All undertakings require planning, organization, command, coordination and control and in order to function properly, all must observe the same general principles. We are no longer confronted with several administrative sciences but with one which can be applied equally well to public and private affairs.
ACCORDING TO THEO HAIMANN
“No two separate sets of personnel are required, however, to discharge administrative and managerial functions. Each manager performs both activities and spends part of his time administrating and part of his time managing.”
ACCORDING TO NEWMAN
Management or administration is the guidance, leadership and control of the efforts of a group of individuals towards some common goals.”
The governance of non-business institutions like government, army etc. is generally called administration whereas the governance of the business enterprise is called management. As far as the performance of functions is concerned, both perform the same function of planning, organising, directing, coordinating and controlling.
As we upward, the importance of administration increases and as we move downward, the importance of management increases i.e. the content of policy formulation is higher levels, it is lower at lower levels whereas execution is otherwise.
DIFFERENCE BETWEEN MANAGEMENT AND BUSINESS ADMINISTRATION
|BASIS OF DIFFERENCE||BUSINESS ADMINISTRATION||MANAGEMENT|
|NATURE OF WORK||It is primarily concerned with the determination of objectives and broad policies.||It involves the implementation of plans and policies.|
|ACTIVITY||It is a thinking function.||It is a doing function.|
|SCOPE||It takes major decision and is a wider term than management.||It takes the decision within the framework of the administration.|
|LEVEL OF AUTHORITY||It is a top management function.||It is a lower level management function.|
|STATUS||It consists of the owners of an enterprise.||It consists of managerial personnel with specialized knowledge who may be the employees.|
|NATURE OF ORGANISATION||Generally, it is used in relation to government, military, educational and religious organizations.||It is used mainly in business firms which have economic motives.|
|INFLUENCE||Its decisions are generally influenced by external factors of business environment such as social, political, legal, economic, Technological and demographic environment etc.||Its decisions are influenced by internal factors such as values, beliefs and opinions.|
|MAIN FUNCTIONS||Main functions of business administration are planning, organising and staffing.||The main functions of management are direction, motivation and control.|
|POSITION||An administrator is the principal in the organization.||A manager acts as an agent of the business organization.|
|KNOWLEDGE||A good administration requires administrative ability more than the technical ability.||A good manager requires technical ability more than the administrative ability.|
|POPULARITY||It is commonly used in public and government sector.||It is mainly popular in business organization.|
|DIRECTION OF HUMAN EFFORTS||It is not actively involved in the direction of human efforts for the implementation of the policies and plans.||It is mainly concerned with the direction of human efforts in the execution of policies and plans.|
The above discussion concludes that there is no separate staff to perform the functions of administration and management. All managers, regardless of their level perform the same functions. The higher up in the hierarchy, however, the more time will be spent in administrative activity and the less in management activity in the manager’s daily routine. Administration is done at top level by deciding policies and execution is done at lower level which is management. It can be said that these are the two activities which are performed at different levels of management.