Summary
Samenvatting Introduction To Business International Business Administration
- Course
- Institution
Samenvatting Introduction To Business International Business Administration
[Show more]
Seller
Follow
noortjerozendaal
Reviews received
Content preview
lOMoARcPSD|15781725Introduction to Business
LECTURE 1 – business administration and organizational models
Business in context
• Time: evolution of business.
• Business environment: organizations and their strategies.
• Geography: international business.
• Business and society: institutions, ethics and sustainability.
Advent of business administration
• Firms become the focus.
• Increase in scale/complexity.
• Firm/organization as a system (interaction between elements).
History of business
• Firms reduce transaction costs (for example: iTunes).
• Input and output function: process the inputs in the most effective way -> specialization.
o See input and output model.
• USA: generalists (MBA model).
• The Netherlands: from specialists to generalists.
• Germany: specialists
Two elements of BA
• Disciplines feeding business administration: Engineering Studies, Math, Economics,
Sociology, Psychology, Law.
• Functional areas (processes): operations, marketing, HRM, accounting processes.
Core of Business Administration -> integration
• Organization: the way in which people are grouped and the way in which they operate to
carry the activities of the business.
• Strategy: a set of objectives and methods of achieving those objectives.
Main organization models
1. Scientific Management (Taylorism)
• Efficiency first (piece wage, standardization of tasks, time and motion studies, specialization
of tasks) + separation of thinking and doing (planning and procedures, implemented via a
management hierarchy, disciplining of workers) -> disseminate the bargaining power for
employees.
• Specialization in the company.
• Time and motion study by Taylor.
• Assumption: “man is a homo economicus”: a rationally calculating machine -> money =
main motivator, therefore: piece wage (motivation), hierarchy (discipline), scientifically
assessed
norms and procedures (motivation and discipline).
• Context of origin: 19th century: urbanisation -> more demand -> increase in scale, growing
complexity in doing business, lack of (direct) management control. Scientific Management is
a respond to this process.
• Scientific Management now: division of labour/standardization of tasks (from the 19th
century, but is still happening now), strict work instructions/output norms.
• Disadvantages of dividing labour: low motivation for employees (boredom), physical limits
to the activities you can perform.
, lOMoARcPSD|15781725
2. Human relations
• Hawthorne Experiments: labour conditions (=breaks) influence productivity. Breaks led to
a social network at work (social incentive).
o Workers’ attitude and morale can counteract the negative effects of fatigue, monotony
and boredom + informal relations, social groups, effective informal leadership,
concepts of participation, successful supervision and development of team spirit are
important.
• Hawthorne effect: attention motivates people (changes behaviour) -> discovery of the
informal group = homo sociologicus instead of homo economicus (not wealth
maximization,
but wellbeing maximization. Money is a secondary motivator).
• Context of origin: motivation problems on the shop floor, broader societal unrest due
to industrialization.
Scientific Management Human Relations
Efficiency Commitment
Homo economicus Homo sociologicus
Material incentives Attention
Hierarchy Informal relations
3. Contingency-Approach
• The dominant form of System Theory.
• Focusing on structure and procedures (instead of behavior).
• Broader perspective than Scientific Management.
• Core: “It depends” -> there has to be a “fit” between organizational characteristics and
the business environment, there is no “one best way” (Scientific Management).
• Example contingency: “it depends”.
o Simple, stable and abundant environment -> mechanistic structure.
o Complex, dynamic and scarce environment -> organic structure.
• Context of origin: WW II -> increase in scale, more diversification (more activities ->
firms became more complex), development of applied mathematics during WWII.
4. Organizations as Networks
• Firms/organizations are networks -> no hierarchy.
• Emphasis on knowledge transfer, flexibility, innovativeness, horizontal relations and not
on efficiency -> demands a different organizational structure.
• Trust (culture) keeps the network together, not procedures.
• Managers are facilitating rather than directing.
• Context of origin: more demand heterogeneity due to economic growth (luxury items ->
no “one size fits all” anymore), growing international competition, growing turbulence and
uncertainty.
o More responsive to the change of customers’ needs and behavior.
o More flexible to environmental changes.
Key learning: organizational models
• Alternation in focus on structure & procedures or on behavior & culture.
• The classic model with the emphasis on structure and procedures is alive and kicking
(Scientific Management).
• The contingency-approach is the dominant system theory.
LECTURE 2 – management and organization
The four management functions: planning, organizing, leading and controlling.
, lOMoARcPSD|15781725
• Management is not a step-by-step procedure, but a procedure with a feedback loop
that represents a flow.
• Planning: establishing organizational goals and deciding how to accomplish them.
• Organizing: grouping of resources and activities to accomplish end result in an efficient
and effective manner (HR and material resources).
• Leading and motivating: the process of influencing people to work toward a common goal.
• Controlling -> feedback (review and modify) -> procedure starts again.
o Not meant in the sense of supervising, but in the sense of monitoring.
o It’s the process of evaluating and regulating ongoing activities to ensure that goals
are achieves -> requires constant monitoring and adjusting.
o Control functions: set standards -> measuring actual performance -> take corrective action.
Management hierarchy
• Upper management: long term goals (products, markets, business organizing) -> jobs like
CEO, CFO, COO, CTO, VP – marketing.
• Middle management: interprets plans and sets actions -> jobs like regional/plant managers.
• Lower-level management: implements plans -> jobs like team leader, assistant
manager, foreman, shift manager.
Chain of Command: distribution of authority -> describes relationships.
• Line employees/management (continuous line): is in the direct chain of command and has
the direct responsibilities of those people who are linked to the organization goal. They
contribute
directly to the organization goal.
• Staff employees (dotted line): not directly contributing to the organization goal and advises
the line management.
• Internal auditors: examine issues related to company business practices and risks
• External auditors: examine the financial records and issue an opinion regarding the
financial statements of the company.
• Tension between staff and ?
• Tall versus Flat distinction (Ch. 15, page 449).
o Tall organization: more layers (managers).
o Flat organization: less management layers.
• Span of Control is related to Tall vs. Flat distinction -> describes the number of
management employees (number of subordinates a supervisor has).
• Fee burners: spend money.
• Fee earners: earn money.
Centralization or decentralization of decision-making authority
• (De)centralization: purely about centralization -> the right and the duty to take a decision.
Factors Organizational tendency
Business environment is complicated/unpredictable Decentralize
Risky decision Centralize
Lower-level managers don’t have strong decision- centralize
making skills
• “Flat” is not always “decentralized”. The level of (de)centralization depends on the degree
of delegation of authority, not by the number of layers.
Departmentalization: basis by which jobs are grouped together (how are tasks grouped together?).
• Bases:
o Function
o Product
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller noortjerozendaal. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.59. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
82191 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now