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Introduction to business administration
1. The document provides an overview of various theories and concepts in business administration, including production theory, factors of production, organizational behavior theory, contingency theory, and knowledge management. 2. Key production concepts discussed include the four factors of production, productivity, and total factor productivity. Multiple views on factors of production throughout history are summarized. 3. Several influential administration theories are highlighted, such as bureaucracy theory, scientific management, human relations school, and modern theories including systems theory and business process reengineering. 4. The document concludes with discussions of strategic management, knowledge management, and decision making concepts.
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Introduction to business administration
- 1. Introduction to Business Administration PhDTamer Elbatrawy Doctor of philosophy in business administration
- 2. lecture objectives 1. Theorigin of Economy science 2. Production theory an entry to management science and discover business components 3. Highlight business administration theory schools 4. Is management science or art
- 3. The origin ofEconomy science • The first research in economic back to 362 BC by Xenophon who created the term of Economy In 1577, the Frenchman Jean Baudin added a political term to Economy, then term transfer to (Political economy) which famous by Antoine de Moncritian in 1615 Political economy Theory of production Theory of distribution
- 4. Production theory asan introduction to management science Production theory What is the production? Production factors? Production relationship? Production function? What to produce ؟How to produce?
- 5. The first question: what isthe production?
- 6. The first questionis what is the production? Mercantilism school economic money is gold and silver Physiocracy school economic money is only agricultural output Classic school economic money is only material goods Contemporary denomination economic money is both of material goods and services
- 7. The second question is whatare the production factors?
- 8. The second questionis what are the factors of production? Physiocracy school factors of production is only land Classic school factors of production are land, labour and capital Newclassic school factors of production are land, labour, capital and organization Contemporary denomination factors of production are land, labour, capital, organization and many other factors
- 9. Factors of production Capital Political capitalLabour capital Psychol ogical capital Human capital Cultural capital Social capital Organizatio nal capital Institutiona l capital Intellectual capital manufactu red capital Technology capital Natural capital Ecological capital Contemporary denomination
- 10. Natural capital Stocks Flows- natures’ services The sum of resources (Stocks) and natural functions (Flows - natures' services) that contribute of production appearance The Earth Capital Political capital Labour capital Psychol ogical capital Human capital Cultura l capital Social capital Organiza tional capital Instituti onal capital Intellect ual capital manufac tured capital Technol ogy capital Natural capital Ecologic al capital
- 11. polluted environment Ecological capital cleanenvironment The balance of environmental quality embodied in natural stocks and functions, which enhance and supports production
- 12. Manufactured Capital • Everymanufactured product used in production process, such as machinery, equipment and manufactured raw materials Capital Political capital Labour capital Psychol ogical capital Human capital Cultural capital Social capital Organizati onal capital Institution al capital Intellectua l capital manufactu red capital Technolog y capital Natural capital Ecologic al capital
- 13. Labourcapital body Embodied Human capital, whichanswers the question of experience or what we know about work? Cultural Capital, which answers the question of who we are intellectually? Psychological capital, which answers the question of who we are, and what we will become? Social Capital, which answers the question who we know? • bodyguard • human capital
- 14. There are otherpsychological components such as mental health, attachment to work, emotional intelligence, courage, tolerance, desire for creativity, a sense of gratitude, alertness, accuracy and verification. psychologic al capital Hope is a perseverance to reach the goals, self-efficiency trust of self ability to do required efforts for success Resilience the ability to deal with differnt situations and change directions for reach Optimism is the positive expectation of success in the present and future, Ability perseverance positive expectation adaptation Psychological capital The most important elements of (PsyCap) is the HERO model
- 15. Human capital In 2013,the World Economic Forum issued the Global Human Capital Index 1. Education 2. Health and Wellness 3. Workforce and Employment 4. Enabling Environment
- 16. Social Capital • Socialcapital is the real of potential benefits can be obtained through our relationships network How it created
- 17. How to measuresocial capital? 1. The number of people 2. The strength of the relationship 3. The resources they owned which based on economic interaction can be created Number of persons Strength of relation what they owned?
- 18. Cultural capital • Generalknowledge not specialized culture traditio ns Beliefs Values and ethics Law and rights Arts Living style traditions Beliefs Values and ethics Law Arts Living style
- 19. Organizational Capital-OC Organizational Capital-OC Managers values Processes Structure Theprivate accumulated knowledge within the production unit to organize and enhance production efficiency
- 20. Institutional capital-IC Institutional structure Functional division Business Companies IndividualsCompanies Money companies Civil associations Political organizations Governments political parties Ownership division Government sector public sector Business sector
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- 22. Structured capital is knowledgethat is inseparable from the structure of the organization and workers can not be return with to their homes Human Capital is the knowledge which workers return with to their homes and organization can not own
- 23. State or policycapital • The classical trend was classified politics as an external factor of production system • Political capital is the influence of state (which include governmental, parliamentary and judicial) on production and businesses, • Policies of state include direct economic policies and indirect economic policies Political indicators Democracy Index Worldwide Governance Indicators
- 24. The third question: what arethe production relationships?
- 25. Productivity is thepursuit of achieving efficiency and effectiveness Productivity Evaluation • Partial Productivity • Is the relationship between outputs and one factor of production, such like labour, capital, land, technology or management. • Multi-factor Productivity • Is the relationship between outputs and multi-factor of production • Total Factor Productivity (TFP) • Is the relationship between outputs and total factor of business or total capital of business Efficiency Efficiency is the ability to achieve the required output with minimal input Effectiveness Effectiveness is the ability to achieve the requirement within a relatively short time. Productivity
- 26. Total Factor Productivity(TFP) Total Factor Productivity (TFP) Total Investment Productivity Total operating productivity Operational productivity is the sum of direct and indirect costs to total revenues Investment productivity is the total of invested capital to total value added
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- 28. The fourth question: What weshould produce? How we can produce?
- 29. How do weproduce? • We can produce by formulating a relationship between the factors of production to transform them from inactive situation to productive factors, what political economy studied as organizing • The Neoclassic, in 1890, concluded that the organization an independent factor of production embedded in the human element, thus the factor of production became four land, labour, capital and organizing
- 30. Organization Subject turnedto the Business administration science discipline Woodrow Wilson the professor of Political Economy and the thirty-eighth president of the United States (1913 to 1921) suggest to separate organizing research from the economy field or public policy (Public Management) with independent research topic under Business Administration term
- 31. The subject ofbusiness administration What is the objective of business? How can it be achieved?
- 32. The difference betweenmanagement and persons management Personnel management Funds Management knowledge management
- 33. The difference between managementand administration Concern in planning strategy and policies Concern in executive and control
- 34. Classical School Bureaucracy Scientific Management Senior Management The worker ismachine theories German Max Weber French Henry Fayol American Frederick Tyler First school in administration
- 35. Max Weber theprofessor of political economy (1894) at Freiburg University put the first theory in business administration during the period from 1900 until the year of his death at 1920 Bureaucracy theory assumed that individuals are emotional and irrational, so the absence of organization mean prevailing the personal considerations and absence the mental and objective considerations in work. so recommended: • The importance of formal work, rules and laws not personal relationships • Emphasized on the gradation of jobs, and the requirements of experience • Written orders, and reliance on documents • Confidentiality and commitment to work • Supervision of upper levels at lower levels • Focus on training across the management timeline Bureaucracy the authority of bureau
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- 38. Scientific management theory • Itappeared in 1911 with the American engineer Frederick Tyler • focused on the effectiveness of the worker or employee • recommended linking wages with work's outputs rather than wages for time Senior Management Theory • Founded by the French engineer Henry Fayol in 1914. • It focused more on the higher levels of management, so it considered the opposite of scientific management theory. • Divided the main activities of management to six sections: technical, commercial, financial, Accounting, administrative activity • Divided the administrative activity to five functions (planning, organization, direction, control, coordination)
- 39. School of HumanRelations (Theories of the friendly worker) • Australian psychologist George Elton May 1880-1949 • Refuse the assumption of worker is machine, and the only stimulated is money, and concluded that the means of stimulation include persuasion, • Refuse the assumption of the position is the only sole source of authority. assumed that science, experience, wealth and personal abilities are sources of power and influence that may be more than a position.
- 40. Behavioural school X&Y theory •Criticism of theory • The different policies with peer individuals basis on personal differences may not enjoy the workers satisfaction Group (x) the side of task management with the lazy employee, external control and material stimulation. Group (y) management by goals, self-control, encouraging participation, and relying on the moral motivation, with the employee who loves work and is responsible.
- 41. Organizational Behaviour Theory •Every character has a unique type behaviour whether within family or work, understanding employees character patterns enabling to achieve ideal management method • Individuals' behaviour influenced by 1. Method of understanding 2. psychological trends 3. Mental abilities 4. social communication abilities 5. Leadership ability
- 42. Myers-Briggs Type Indicator (MBTI) •The most popular psychometric measure ever. with 85% accuracy and 15% error. • The indicator is based on the principle that person is born with personal characteristics, may changed or acquired with maturity. • The theory is divided characters patterns into 16 types: for character patterns
- 43. The first principleThesecond principlePrinciple IIIPrinciple IVThe resulte (Extroverts) Sensors Thinking JudgingSupervisor or Custodian (ESTJ) PerceivingPromoter (ESTP) Feeling JudgingMuti or Shepherd (ESFJ) PerceivingPerformer or promoter (ESFP) intuitives Thinking Judging Executive Director or Chief of Staff (ENTJ) PerceivingInventor or dreamer (ENTP) Feeling JudgingTeacher or Teacher (ENFJ) PerceivingHero or Inspirational (ENFP) (Introverts) Sensors Thinking JudgingInspector or Completed Tasks (ISTJ) PerceivingArtisanal or Mechanical (ISTP) Feeling JudgingDefender or nurse (ISFJ) PerceivingArtist or author (ISFP) intuitives Thinking JudgingMastermind or the World (INTJ) PerceivingThinker or Architect (INTP) Feeling JudgingCounselor or Counsel (INFJ) PerceivingProcessor or Ideal (INFP)
- 44. Modern School • Makingdecision theory • Systems theory • Theory of Z • Situational theory • Knowledge Management Theory • Theory reengineering
- 45. Contingency or Situational Theory •Every theory is created depended on reality, and associated with some successes of actual cases • Some of businesses according to its nature and circumstances required focus on strategy, systems, decision-making, deal with traditional theory or human relation theory or other... • Every theory may be appropriate in cases and inappropriate in other cases Worker is machine theory Worker is friend theory
- 46. Contingency The appropriate administrative style dependingon the internal and external situations There is no theory or administrative model that can be applied in all cases There is no relationship between organizational forms and productivity Administrative solutions must be based on the state of the situation, and when the situation changes, the recipe changes
- 47. Organization is aninterconnected multi systems Some body organs has overall interferes natural with of all of body organs such as nervous system and the periodic, as the same as in business field the system of economic value and the system of knowledge Some other body organs has semi-overall interferes nature such as musculoskeletal, skeletal, as the same as location, machinery and equipment system Other organs are more specialized nature, such as the digestive and respiratory .., Similarly for the system of logistics inputs or outputs and the production system.
- 48. firm Environment Micro Environment MesoEnvironment Macro Environment Mega Environment
- 49. firm Environment Micro Environment MesoEnvironment Macro Environment Mega Environment Legal and political system environmental system Social and cultural order Economic system Technological system
- 51. Theory of Z Japanese management features Parental manageme nt Workis other home family Stability and career insuranse Measuring production by collective effort Do not rush to upgrade Focus on overall quality and innovation
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- 53. Business Process Reengineering (BPR) Administrativeengineering or processes reengineering is term referring to fundamental change in the basic approach to work to achieve fundamental and radical development in performance and results The characteristics of reengineering: • Change is radical rather than superficial • The results are substantial and huge • Focus on rebuilding administrative processes, not on organizational structures • Dependence on IT
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- 61. Strategic management • Withthe emergence of mega business units with employees armies loaded with huge intellectual capital, and transfer world warfare to business field which business units grappled and conflicts such like wars between military armies
- 62. The art offuture mapping Strategic management is the predict the future scenarios to exploit strengths and opportunities, overcome weaknesses, avoid threats, draw the future based on the present, and the expected changes, so what we can do now toward achieve future goals Strategic management is the art of future solutions as a chain of expected moves to other environment elements, Strategic management is mapping indirect pass surrounds barriers, crosses obstacles and valleys to reach a predetermined goal, often associated with large and important economic activities.
- 65. Knowledge Management Data arecrude facts that do not make mean Information is meaningful data Knowledge is the concept of information Intellectual capital
- 66. Diagnosis of needed knowledgeand sources Identify knowledge objectives, the organization's benefits and the add value Generating knowledge, obtain, analyze, tabulate, and derive concepts. Organize and store knowledge Distribute and shareing knowledge between concerned employees for applying
- 67. Decision Making • Decision-makingis not just take decision but a set of sequential activities and actions that lead to decision- making • Decision-making must be quantitative in the language of numbers not descriptive, in addition to the importance of use rationality, logic, wisdom, experience • The rational decision is the decision take into consideration internal and external situation, and has the approval of the plurality of decision executive involved
- 68. Business intelligence • Basedon the recommendations of decision-making theory and the digital decision-making approach, BI platforms have been developed as technical solutions to support decision-making managers through data processing, • GoodData BI • IBM BI • Microsoft Power BI • MicroStrategy BI • Oracle BI • Qlik BI • SAP BI • SAS BI • Tableau BI • TIBCO BI • Yellowfin BI
- 69. The pattern of knowledge Knowledge Scientific knowledge lawsand fixed relationships, which can be generalized with the different of individuals, communities and places, for example water boils at one hundred temperature is science. Normal Knowledge It is the knowledge acquired through experiences and life, such as culture, consumer habits. The arts Creativity evaluation depends on personal psychological and mental assessment, this evaluation can not be as the general basis to all communities and attitudes, such as the impression on painting, or say that the atmosphere is beautiful .. or evaluation of poetry Is Administration Art or Science
- 70. Science social sciences management Economy natural sciences Physics Chemistry Less firmness and stability Morefirmness and stability Scientific laws and fixed relationships, can be generalized
- 71. Management is scienceand art Management as a science The total of fixed and specific results, as principles, rules, and laws, such as saying that planning must precede implementation, implementation must be accompanied by monitoring and evaluation, business must be commensurate with the potential and the circumstances surrounding... and so on. Management as Art The skill of employ management science in a particular business, and the skill of right choice, flexibility to achieve high productivity performance
- 72. Definition of administrative activity(administration as art) Taylor's definition is the right knowledge of what individuals are supposed to do, and make sure that they do it in the best and cheapest way, through planning, direction and control Henry Fayol is an activity that includes six functions: forecasting, planning, organizing, issuing orders, coordinating and monitoring Sheldon's definition is the process of goal setting, the coordination of funding, production, organizational structure and implementation control, Abley's definition is the process of doing business through the efforts of others, through planning and control.
- 73. Business types business Routine business مغامرة إستثمارية مغرية ((venture طموحة مبادرة ((Enterprise venture Typicallyused to describe small businesses, usually involves in an increasing risk and return rate, business venture is like going to an unknown place, risky or uncertain place, to find wealth Enterprise is business initiative associated with challenging, ambitious idea and associated with one or more people described as an entrepreneur, or opportunity maker. the term is usually used with engineering projects or small and medium enterprises .