BE Unit 12

Unit 12
Business Functions: Administration

Features
Benefits
Applications
Business
Administration Business administration is defined as the process of
designing and upholding an atmosphere in which
people work in groups effectively reach selected
targets. This is applicable to each and every business
regardless of the niche and size. In simple words,
“Business Administration is an art of controlling day
to day operations of the business”. Finally, the
administration is to shape, consistent and constant
organizations. All organizations have people who are
appointed to serve to achieve the objectives of the
organization.
Application of
Administration
Application of Administration
There are number of varies departments according to the
needs of the company. Below is the list of categories and
fundamentals of business administrator skills:
1. Production:
Traditionally production is viewed as one of the main
departments; as it does the finest utilization and proper
introduction of infrastructure in an organization or company.
2. Marketing:
Under business administration, Marketing is another significant
department for a company or an organization. It given their
specialty that today represents, and holding in the company
responsible for developing efficient methods in the
management and coordination of sale system the company
offers to a specific market.
3. Finance:
Finance department is responsible for fundraising and the
supply of capital used in the operation of the company, looking
to have the economic means to each of the other departments,
in order that they can function properly.
4. Human Resources:
Human Resources is a department of vital importance
in business administration, It concerns with the proper use of
programs of selection, hiring, recruitment, training, and
development; it is for the company collects the appropriate and
related to the objectives of the staff.
5. Operations Management:
Operations management department is responsible for
optimizing, controlling and designing business operations and
creating effective and better operational processes for goods
and services to improve the position of the business.
6. Information Systems:
For managing and analyzing, data is a crucial part for any
business or an organization. In this department people uses
data and information management software’s and systems to
collect, analyze, filter and distribute informational data of a
business to the higher authorities to prepare strategies and
roadmap for a business.
7. Accounting:
Accounting is another important department. Department of
accounting perform analyse, process and prepare financial
reports for an organization. This assist top management to
make better financial decisions year on year.
8. Business Law:
For business administration, Business law department is also
called as commercial law department. This department take
cares of laws and legal matters of the business providing goods
and services to the customers.
Need for administration
Whether it is a profit-making organization or an
NGO, proper administration is required to achieve
the objectives of the organization.
Improves efficiency: Proper administration
ensures that resources are being utilized in an
optimum manner. Less time is consumed to
perform tasks. This increases efficiency and
optimization within the workflow.
Increases Productivity: As soon as the system
becomes more efficient, the team can generate
more than before when efficiency was less. This
makes the team more productive and
improves operations.
Fewer errors: If the administration is
appropriately done, it ensures proper supervision,
due to which the team makes fewer mistakes.
This makes the system less prone to errors.
Case I: CHEMCO CASE
Started in 1965, ChemCo is a leading manufacturer of car
batteries in the U.K. market. Since then, it has been under
the charge of Mr. Jones, the founder-owner of the firm. In
1999, the company decided to go for a diversification by
expanding the product line. The new product was
batteries for fork-lift trucks. At the same time, Mr. Marek
was appointed the Senior Vice President of marketing in
the company. However, soon after its successful
diversification into fork-lift batteries, the sales in this
segment began dropping steadily. Mr. Marek wanted to
introduce some radical changes in the advertising and
branding of the new business but the proposal was turned
down by the old-fashioned Mr. Jones.
At this juncture in 2002, the firm is losing heavily in the
fork-lift batteries business and its market share in car
Case batteries is also on a decline. Mr. Jones has asked Mr.
Marek to show a turnaround in the company within a year.
What steps should Mr. Marek take to take the company
study out of its troubles?
Some of the facts on the case are:
ChemCo is a quality leader in the U.K. car batteries
market.
Customer battery purchases in the automobile market are
highly seasonal.
The fork-lift business was added to utilize idle capacity
during periods of inactivity.
This is a low-growth industry (1% annual growth over the
last two years)
Large customers are sophisticated and buy based on
price and quality. Smaller customers buy solely on price.
There is a Spanish competitor in the market who offers
low priced batteries of inferior quality.
Case
study
SITUATION ANALYSIS:
Company
Established player in car batteries
Losing heavily in fork-lift truck batteries
Old fashioned owner resistance to change
Competition
Low priced competitors
Foreign competitors gaining market share
Customers
High quality product, but low end customers care more
about price than quality
Case
study
PROBLEM DEFINITION:
Mismanaged product diversification in a price sensitive
market
ALTERNATIVES:
Alternative 1: Establish an Off-Brand for the fork-lift
business
Alternative 2: Educate the customer market about product
quality
Alternative 3: Exit the fork-lift battery business
Criteria for evaluation of alternatives:
Establishing the firm's quality image
Increase in market share
Increase in sales
Cost of the product
Case
study
Evaluation of Alternatives:
Alternative 1
Protect firm's quality image in the automobile industry
Redesigned product to reduce the cost of manufacture
Low price to enable it to compete with Spanish producer
Alternative 2
Make use of the quality leadership in car batteries market
Offer reliability testing, extended warranties etc. to
promote quality image
Set higher prices to extract surplus from these advantages
Case
study
Alternative 3 and 4
A passive strategy, not proactive
Recommendations:
Alternative 1 is recommended in this case. Since the firm
operates in an industry which has low growth, hence it can
expand market share and sales only by taking the
customers from other players. Hence, it needs to tackle
the Spanish competitor head-on by aggressively pricing its
product. At the same time, launching a low-priced product
under the same brand name erodes the high quality
image in the car batteries market. Hence, the best option
is to go for an off-brand to target the fork-lift customers
who are increasingly becoming price sensitive. This will
enable the company to ward off the threat in short-term
and build its position strongly in the long-term.
Case
study
THANK YOU

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Unit 12

Business Functions: Administration

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