Business administration, Peter Thuis & Rienk Stuive
Chapter 1-5 in English
Management of the facility organization, International Facility Management year 1 period 1.
Business Administration
Chapter 1: the business and business
administration
1.1 The business
1.1.1 Organisation, business and enterprise
Organisation: an instance of human cooperation with a specific purpose
and the intention to be permanent
Business: an organisation, which produces goods and/or services or
engage in trade with the intention of putting these on the market for sale
(companies or firms)
Non-profit business: attempt to deliver goods and/or services for
general use at the lowest possible cost
For-profit business: realise a return on their products and/or services,
which are a result of their own efforts, that is higher than the costs
of making and delivering them making a profit for business owner
as a reward for his investment (Enterprise)
1.1.2 Businesses are organisations
Businesses are organisations with four characteristics:
1. There are people in the organisation
2. There is cooperation in the organisation
Synergy effect: the results from the total cooperative
arrangement is greater then the sum of the results from the
individual performances (de groep is meer dan de opstelsom van de
leden)
3. There is a purpose to the organisation
4. There is continuity in the organisation
Going-concern assumption: when you make management
decisions you assume the continuity of the firm
Internal main objective: the continued existence of the firm
External main objective: providing a (societal) need
1.1.3 The simple operation of a business
Transformation process: input throughput output
Net profit margin: Net profit x 100%
Revenue
Net profit: when a business has paid all payments it retains an amount,
which is called the net profit
Revenue: unit x price: it has to do with everything that has been sold on
top of the profit and loss statement
Black box approach: there is no indication how input is transformed into
the proper output. All you can see is what comes in and what comes out
,1.2 What is business administration?
Characteristics of business administration:
It is all about business
The business context is important
It is multidisciplinary
It is interdisciplinary
It is a science
It is a body of knowledge
1.2.1 Business administration is all about businesses
It is the area of administration that concerns the right way to organise, set
up and administer businesses. The centre of attention of this area is
businesses and how to run them.
1.2.2 The business context is important in business administration
The question how the context around a business is composed is important
in business administration.
Context: elements outside the business that nonetheless influence its
operation.
Businesses:
1. Have to adjust to that context
2. Try to influence the context (advertising)
1.2.3 Business administration is multidisciplinary
It is a sort of all-embracing specialisation that, where necessary, combines
other areas of specialisation.
Multidisciplinary: multi means many, many different disciplines coming
together.
Specialisms:
Financial management
Psychology
Technology
Purchasing knowledge
Marketing and sales
Operational research
Communications
Process management
Law
Sociology
Facilities management
Information science
1.2.4 business administration is interdisciplinary
It brings specialisms together, it first engages concepts and problems with
its own practitioners, and only then does it consult specialists in order to
see what sort of solutions they can offer.
Interdisciplinary: the linking of differing disciplines with each other.
,In order to avoid tunnel vision, you need a business administration
professional who not only knows less about a subject than a specialist, but
also knows more since he has knowledge of many other specialisms.
Advantage and disadvantage
1.2.5 Business administration is a science and a body of
knowledge
Business administration is a science, which applies its own ideas and
definitions. The normal scientific rules of the game are applied.
Business administration is a body of knowledge that is all about real
problems and practical questions that need to be resolved.
1.2.6 this is Business administration
Business administration: the branch of science that concerns itself with the
organisation and context of businesses. Business administration comprises
a comprehensive (all-inclusive), multi- and interdisciplinary approach in
which attention is paid in a scientific manner to practically oriented
questions within businesses.
1.3 The business administration professional
1.3.1 Competencies of the business administration professional
Management competencies:
Analytical insight
Advisory ability
Cooperative skills
Communication skills
Ability to lead
Stress resistance
1.3.2 Professions for a business administration professional
Business administration professions:
Consultant
Independent entrepreneur
(General) manager
Policy worker
Account manager
Lobbyist
Controller
Recruiter
Investment analyst
Manager of product development for insurance products
Personnel department employee
Quality manager
Secretary to top management
Chairman of project team (project manger)
, Chapter 2: Primary activities in businesses
2.1 What are primary activities?
2.1.1 Different business processes
A process: a series of actions with a specific purpose. It has to do with a
series of happenings with a beginning and an end.
Input output
Three aspects of processes:
1. Effectiveness: the intended effect and is this achieved?
2. Efficiency: how many resources are needed?
3. Management:
Primary and secondary activities:
1. Primary activities: the processes at the business’s core
2. Support activities: the processes that support the primary activities
3. Supervisory activities: also called management processes.
Controlling of processes.
Core activities, primary functions and the primary activities:
Businesses are all about its primary activities. These can be sub-divided
into sub-activities. These sub-activities are termed primary functions
2.1.2 Determining the primary activities
Which actions are necessary to carry out the business’s core activity, and
in which order?
Purchasing
Production
Logistics
Marketing
Sales
Services
These are the primary functions of the business.
Primary activities of the business have to do with all the actions (primary
functions) that must be carried out in order to bring about a product or
service.
Public service business: (hospital) also has primary activities intake,
diagnosis etc.
Depicting the primary activities schematically occurs quite often in
business administration. It provides a clear picture of the process and
shows clearly the relations between sub-processes.
It is important to distinguish the primary activities and the primary
functions. For all these sorts of organisational change it is important to
know what the primary activities are. They give you insight into the
essence of the business.
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