A business organization is an act whereby an entrepreneur or a group of entrepreneurs manage different business activities and cooperate in order to achieve various objectives effectively. Business administration involves managing and coordinating daily business activities. Understanding of business organization and administration is crucial for all business stakeholders, employees, entrepreneurs and even the general public because the business environment affects its general community. Understanding of business organization and administration also assists in dealing with daily situations that play an important role in the lives of the common people. The growing number of people in the business environment raises questions over their knowledge of the activities that are involved in business management. Understanding of different political, social, legal, microeconomic and macroeconomic conditions is crucial for management, as well as for the general business community.
The structure of the business community entails the arrangement of a business organization that facilitates movement of goods and services from the producer to the consumer. It begins with understanding of business ideas and practices and demands knowledge of complex of commerce with external business environment and attitudes. Entrepreneurs are interested in starting businesses that will both fulfill their objectives and be in line with their abilities. These abilities include the available initial capital, human resource, ease in starting the business and other factors. The entrepreneurs should also understand the business structure in order to plan an appropriate implementation of their ideas. Basic business understanding is applicable to all levels of the business community. The business environment constantly undergoes various changes. This is why even business managers and executive officers must know the basic business structure well in order to understand these changes.
Those companies that are really successful usually have employees with the proper understanding of business organization and administration. These employees possess knowledge about business structure and other activities that are involved in business management. The understanding of business equips people with knowledge and skills that are important for effective team building, as well as for effective business management. The study of basic business structure with its business units and commerce sectors is crucial, especially to those who have minimal experience in business. It assists beginners in gaining knowledge for managerial functions, skills and roles that are necessary for success in the competitive world of business. Understanding business structure also helps the society to understand economic activities, which include basic knowledge of commerce, business units, the trading chain, finance and business sectors.
Modern-day business management relies heavily on managers’ knowledge of business structure and administration. It would be impossible for a manager to run a company without knowledge of the company’s internal and external environment. Understanding of business structure also assists entrepreneurs to choose which business unit to start: sole proprietorship, partnership, private or private limited company. The entrepreneurs’ understanding of the business environment and structure will help them in making important decisions that will affect the management and the activities of the business. The objective of any business organization is to make profit through increasing revenue and minimizing costs. Particular attention should be paid to competition, consumer demands and market structure. Understanding the structure of business organizations assists managers in creating an appropriate chain of product distribution after it was manufactured and placing the organization strategically according to its objectives. The organization can either be a producing company, wholesaler, retailer, a collective organization or the one that is in the public sector. The management incorporates different financial aspects that appear to be important components of any business. They include capital, company finance, its position as an economic sector and its ownership and control. The last aspect assists in planning a chain of commands that would control the management of the business. It also eliminates disputes on how to share profits at the end of every financial year.
In order to become a successful entrepreneur, one should know not only the structure of the business community, but organization within the business as well. This entails understanding management principles, as well as the internal environment and its coordination in order to achieve the ultimate results of the business process. It includes understanding of management principles. The management of a business organization is simply a combination of the top officials in the organization who undertake administration. They take care of business planning, policy formulation and daily control. An individual who is in charge of management is the Managing Director. Other officials with lower ranks include the general manager and departmental managers. The management undertakes such activities as departmentalization, delegation and job specialization among other control activities. There are different departments, such as the human resource, finance, production, sales and marketing, according to the size and type of a business organization. Such smaller businesses as retail stores can have all these departments under one manager or even under the owner’s control. The management is the most important part of the business organizations since they are responsible for organization, control and coordination of daily business activities. They report directly to the owners or shareholders and are responsible for either profits or losses in the business.
Different business organizations have different management structures and hierarchy arrangement. The main factors that cause this difference are the size of the business and the nature of business activities. The entrepreneurs plan the management structure in accordance with the structure of the organization. Each manager has different responsibilities and authority. The successes or failures of junior employees in each department are the direct results of the effectiveness of the manager. Therefore, management decisions and structure are crucial for modern business administration. The management should use modern technologies, information technologies in particular, in order to carry out their activities effectively. Modern surveillance technologies can assist managers to overlook daily business activities in an organization to ensure maximum responsibility for the junior employees. Appropriate motivation of managers leads to appropriate motivation of the employee community. The organization can use this knowledge to plan management structure and control it effectively.
Understanding the management structure raises the question of the role of management and how managers can use their position for effective administration. This brings out the importance of communication. Communication is simply relaying messages from one person to another. Communication in a business organization can be lateral, horizontal, or diagonal. Lateral communication is the one between employees of the same level in the same or different departments. Horizontal communication is the one between junior and senior employees in one department. Diagonal communication is the one between junior and senior members in different departments of an organization. Formal communication assists in passing messages that are crucial for daily business activities. Informal communication, on the other hand, assists in team building and creating a healthy working environment. Communication is a powerful tool, which, if used appropriately, can guarantee the highest management effectiveness. It can assist the organization in achieving its objectives and, at the same time, in maintaining a healthy working environment. This is especially crucial in modern business management.
A business organization has different departments, which include the production, purchasing and stock control, finance, sales and marketing and personnel departments. These departments assist the organization in job specialization, which ensures effective running of the business. Production involves transformation of raw materials into the final product. The nature of production determines such factors as the location of the plant, equipment, management techniques, research, development and design. Production is the reason why the organization exists. Purchasing and stock control entails buying raw materials and stocking for those business organizations that deal with finished goods and products. It also involves control of the produced goods. Marketing involves finding customers for the goods or services that an organization produces and selling the final product. The personnel department is in charge of the human resources. They take care of hiring and sacking the employees. The knowledge of structure and the purpose of departments in organizations is crucial in modern business management because they enable specialization in businesses. It is particularly helpful in coordinating activities of the departments in order to enable the organization to achieve its objectives.
Understanding business organization and administration is important not only to people in the business community, but also to the general public because anybody can join the business world through such activities as purchase of shares and stocks. Any act that is performed by an individual with the aim of making profits is a business activity. People need information on business activities that would enable them to make important business decisions. The modern world requires people to be financially stable. The business world gives great opportunities to those with entrepreneurial skills to make an extra income. This does not mean that all people should go for Master’s degree in business administration and terminate their current employment positions. They can start by learning these basic business organization and administration principles. This knowledge will assist them in understanding the business world before joining it.
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  • lilyjohnson
  • 25 декабря 2020, 18:20

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