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In order to accurately answer the question of how business administration differs from business management, we must go to the root of the definition.
Business administration can be defined as the operating of the broader activity of an organization, it deals with setting goals and strategies of the business. These activities may include organizing and planning policies, motivating managers, communicating, and overseeing the main aspects of the business in terms of policy setting. Business administration can be categorized into five sections: planning which involves creating a plan of action for the future, organizing which ensures the resources the company needs are available both human and non-human resources, commanding which involves leading the team in order for the plans of the organization to be followed, coordinating activities so all the subsection of the business are working together to ensure the business goals are achieved, and control – ensuring that measures are in place to test the strategies implemented (Henri Fayol). Business administration, according to ‘Business Management and Administration’ by Geoffrey Whitehead and Graham Whitehall, is “simply as the part of the management of a business organization which seeks to implement the decisions made by top management and achieve the objectives which it has specified”.
On the other hand, business management deals specifically with middle-level management, which focuses primarily on the setting of the overall objectives of the organizations. Donald J. Cough defines management as the art and science of decision-making and leadership. Management is a strategic process of planning, and organizing resources for the achievement of the objectives set by the top-level management. The definition of management is best described in my opinion by Harold Koontz: “Management is the art of getting things done through and with the people in formally organized groups”.
Essentially, the definition of both business management and business administration are very similar in that they both deal directly with the positive outcome of each individual objective. The roles are interdependent with each other. The main difference that can clearly be identified is simply that when we speak of the administration of a business, we are therefore referring to the ‘thinkers’ of the organization, the high-level managers, who may also be the owners of the company or the individual concerned mainly about the profit the company makes at the end of the financial year. These are the individuals that integrate leadership and vision. Moreover, the difference can clearly be seen when we look at the term ‘management’, this is referring to the lower level of management, these are the individuals responsible for the implementation of decisions made by the administrators, how and when things should be done.
In a company like Microsoft, there are many levels of management and can be best used to explain how we can further show the differences and similarities between business administration and business management. At Microsoft, there are various levels of management responsible for different tasks within the organization but at the end of the day are responsible collectively for the efficient operation of the company. The administrator of Microsoft will be the CEO/founder of the organization, this person, and maybe a few selected executive members of the board, will sit and decide what are the objectives of the business, list the long-term goals, decide on alternative business objectives, set overall profit attainment margin for a specific time frame. Decide on whether to expand the business or remain at the current operating level, decide to make new products, or just develop current technologies. After these decisions are made the administrators come in to provide feedback to the management of if the goals set are manageable, if it’s realistic in the timeframe set out, and if the current resource available is adequate to meet the goals set established. The administrators will essentially be the managers of the marketing department, finance department, purchasing department, sales department, and most importantly research and development. These are the people who will then determine how these goals can be implemented and, if possible, reassign new timelines. There are, some cases where business management and business administration crosses, this is mainly seen in small business, the administration does all the work of setting and implementing objectives, they are often assisted by the senior managers, these persons usually have board member status and come with a wealth of expertise.
Essentially, the difference between business management and business administration is the level at which they operate in terms of their responsibility within the organization.
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