Introduction to business administration Ph.D Tamer Elbatrawy

1. Introduction to Business
Administration
PhD Tamer Elbatrawy
Doctor of philosophy in business administration

2. lecture objectives
1. The origin 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 of Economy
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 as an 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 is the
production?

6. The first question is 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
what are the
production
factors?

8. The second question is 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
capital Labour
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
clean environment
The balance of environmental quality embodied in natural stocks and
functions, which enhance and supports production

12. Manufactured Capital
• Every manufactured 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, which answers 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 other psychological
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
• Social capital is the real of potential benefits can
be obtained through our relationships network
How it created

17. How to measure social 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
• General knowledge 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
The private accumulated knowledge within the production unit to organize and
enhance production efficiency

20. Institutional capital-IC
Institutional structure
Functional
division
Business
Companies
Individuals Companies
Money
companies
Civil
associations
Political
organizations
Governments
political
parties
Ownership
division
Government
sector
public
sector
Business
sector

21. Intellectual Capital-IC
Intellectual
Capital-IC
Human
capital
Structural
capital
Social
capital
Cultural
capital
Psychological
capital

22. Structured capital is
knowledge that 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 policy capital
• 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
are the
production
relationships?

25. Productivity is the pursuit 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

27. production relationships
production
relationships
Capital
value
Factors
Mix
Firm
Function
Customers
power
Economic
clusters

28. The fourth
question: What
we should
produce? How
we can produce?

29. How do we produce?
• 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 turned to 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 of business
administration
What is the
objective of
business? How
can it be
achieved?

32. The difference between management and
persons management
Personnel
management
Funds
Management
knowledge
management

33. The difference between
management and administration
Concern in planning strategy and policies
Concern in executive and control

34. Classical
School
Bureaucracy
Scientific
Management
Senior
Management
The worker is machine
theories
German Max Weber
French Henry Fayol
American Frederick Tyler
First school in
administration

35. Max Weber the professor 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

36. Bureaucracy defects

38. Scientific management
theory
• It appeared 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 Human Relations
(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 principleThe second 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
• Making decision 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
depending on 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 an interconnected 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
Meso Environment
Macro Environment
Mega Environment

49. firm Environment
Micro Environment
Meso Environment
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
Work is
other home
family
Stability
and career
insuranse
Measuring
production
by
collective
effort
Do not rush
to upgrade
Focus on
overall
quality and
innovation

52. Z
Theory
Long-term
hiring
Decision
with
plurality
Individual
responsibi
lity
slowness
upgrade
declared
and
undeclare
d control
moderate
career
path
Concern in
persons
inside and
outside the
institution

53. Business Process Reengineering
(BPR)
Administrative engineering 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

54. Old processes

55. After reengineering

56. BeforeAfter
Focus in
process

57. process

58. Theory of Strategic
management

61. Strategic management
• With the 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 of future 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 are crude facts that
do not make mean
Information is
meaningful data
Knowledge is the
concept of information
Intellectual
capital

66. Diagnosis of needed
knowledge and
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-making is 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
• Based on 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
laws and 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
More firmness
and stability
Scientific laws and
fixed relationships,
can be generalized

71. Management is science and 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
Typically used 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 .