Business Organisation & Administration: Thesis

Prologue

Welcome to the enchanting world of corporate prowess. This guide/thesis unravels the glamorous interplay between the artful structuring of internal elements and the orchestrated finesse of leadership.

We’ll delve into the glitzy canvas of efficiency, cohesion, and triumph that defines the symbiotic dance propelling businesses toward unparalleled success.

It’s a glamorous journey where the balance of organizational capacity and administrative flair reveals the key to unlocking the dazzling potential of thriving enterprises.

Get ready to be captivated by the allure of corporate sophistication and strategic elegance!

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

Overview

Business organization refers to the structure and arrangement of different elements within a company to achieve its goals and objectives efficiently. It involves determining the division of tasks, responsibilities, and authority among employees and departments. The goal of business organization is to create a cohesive and streamlined structure that optimizes productivity, communication, and decision-making. It includes aspects such as organizing employees into functional units, defining reporting relationships, establishing workflows, and designing communication channels. An effective business organization ensures that resources are utilized effectively, and the company operates smoothly to meet its strategic goals.

Business administration or management involves planning, organizing, and coordinating the various activities and resources of a company to achieve its objectives. It encompasses a wide range of managerial functions, including setting goals, formulating strategies, making decisions, directing teams, and evaluating performance. Business managers oversee day-to-day operations, allocate resources, handle challenges, and lead the organization toward its long-term vision. They are responsible for ensuring the effective utilization of human, financial, and material resources to achieve success. Effective business management requires strong leadership, communication, problem-solving, and decision-making skills, as well as the ability to adapt to changing market conditions and trends.

In summary, business organization focuses on structuring the internal elements of a company, while business administration/management encompasses the leadership and coordination of activities to achieve the company’s goals and ensure its overall success. Both aspects are essential for a well-functioning and successful business.

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

Introduction

Before we start to delve into the methodology, it is necessary to analyse the framework of action of the management of a business – or if you prefer the framework of action of the entrepreneur, the founder of the business.

Entrepreneurs are called upon to organise and manage their businesses in the best possible way.

The founder/owner of the business needs to know exactly how to organise, manage and administer their organisation.

The entrepreneur – head of the business is not meant to be ignorant of the various functions within the business and how they are connected to achieve the business objectives. They must be omniscient, have an opinion about everything, lead by example, plan, organise, manage, direct, coordinate, and control the business, as well as motivate everyone in the organisation, and represent the business.

The founder or owner of a business plays a pivotal role in ensuring its success by possessing a comprehensive understanding of how to efficiently organize, manage, and administer the organization.

Beyond mere familiarity, this entrepreneur, as the head of the business, is expected to be well-versed in every facet of its internal functions and the intricate interconnections necessary for achieving overarching business objectives.

Operating as a quasi-omniscient leaders, they are entrusted not only with forming opinions on diverse matters but also with exemplifying leadership through comprehensive actions.

This multifaceted role encompasses strategic planning, organizational structuring, effective management, directional guidance, seamless coordination, rigorous control mechanisms, motivational prowess for all team members, and the ability to authentically represent the ethos and aspirations of the business.

In essence, the entrepreneur embodies a dynamic force steering the organization toward excellence, embodying a holistic approach that goes beyond mere oversight.

Definition of “Organisation” and “Management”

A business is an economic organization within the framework of which the factors of production are combined in a systematic way with the aim of creating a product or providing certain services. The business acquires these factors from the environment in which it operates. After securing the necessary resources, the entrepreneur must combine and process them in such a way that they transofrm into ready-to-be-consumed products or services and are promoted to consumers.

In order to achieve the above in an efficient manner, the entrepreneur must:

• distribute the total work performed within the business, and divide the work into corresponding departments and positions
• assign specific competencies and responsibilities to each position and department, and
• define the relationships between departments and positions

These processes constitute the organisation.

Organisation is a set of procedures according to which the overall work is divided with the aim of achieving specific goals. The term organisation is also used to denote the structure of an organisation – the way in which its constituent elements are structured.

Management/administration is a set of activities that make possible the effective gathering, placement and use of both human and physical resources with the aim of fulfilling the objectives of a business or a specific group. This means that the duty of each executive, who exercises management, is to design and maintain an environment within which individuals, working in groups, are guided in effective actions for the achievement of group goals. The term administration is also used to denote the highest administrative officials.

An organisation formed for a specific purpose is called a formal organisation. This purpose is explicit and defined, and is usually clarified in writing in some official document, in which the role, duties and relationships of the main governing bodies are precisely defined. The formal organization is governed according to defined rules, policies and procedures. Examples of typical organisations are:

• businesses
• trade unions
• public services
• hospitals
• charities
• universities
• etc.

Apart from the formal, there is also the informal organisation. It is the one that does not have specific types and rules. It is based on social relationships and human needs for cooperation and association. It derives from the way in which employees (at all levels of the hierarchy) interact and cooperate within the enterprise. It does not arise on the basis of a specific plan or decision, but is formed naturally by cooperative relationships over extended periods of time. Thus, common values, common performance, common origin, similarity in thinking and in the way of dealing with problems, attract or repel people among themselves, with the result that informal social relations are created.

While the formal organisation is created to achieve specific goals (that is, it is the means to achieve a goal), the informal one has its own meaning for its members (that is, it is the goal itself).

Environment: The Context of Organisations

The environment in which businesses operate is constantly and rapidly changing. The factors that dominate this environment can be classified into the following categories:

1. Environmental effects (trends) and which concern developments in the technological, economic, socio-cultural and legislative fields
2. Social responsibility of the companies concerning the sector of the social offer of the companies: a) social obligation – in this case the organization complies with the legislative rules and the forced pressures of the market, b) social responsibility – the organization complies with the valid values and society’s expectations, c) social response – the organization tries to anticipate social reactions and pressures or go beyond society’s expectations by implementing measures before they are enacted, and
3. Administrative ethics concerning the correctness or otherwise of the decisions of administrative officials, from an ethical point of view. Factors shaping the administrative ethics of executives: a) the personal beliefs of the executive, b) the organizational climate in which he works, c) the external environment. Formation of an ethical climate within the business: a) setting a good example, b) setting realistic goals, c) training executives on the subject of business ethics, d) defining a code of ethics.

The environment of businesses encompasses both internal factors, such as organizational culture, leadership, and resources, and external factors, including economic, technological, social, and political influences, collectively shaping the context in which organizations operate and make strategic decisions.

External

The external environment of businesses, or the context of organizations, refers to the broader external factors and conditions that significantly influence and impact the operations, performance, and strategic decisions of a business entity. This environment is typically categorized into two main components:

External Macro Environment:

• Economic Factors: Includes economic conditions, inflation rates, exchange rates, and overall financial health of the market.
• Technological Factors: Encompasses advancements and innovations in technology that can impact operations and competitiveness.
• Social and Cultural Factors: Involves societal and cultural trends, demographics, and values that influence consumer behaviour and preferences.
• Political and Legal Factors: Refers to governmental policies, regulations, and legal frameworks that businesses must navigate.
• Environmental Factors: Takes into account ecological and sustainability considerations that affect certain industries.
• Global Factors: Pertains to the impact of globalization, international trade, and geopolitical influences.

External Micro Environment:

• Customers: Their needs, preferences, and behaviours significantly influence the products and services a business offers.
• Suppliers: The reliability and terms of suppliers impact the supply chain and overall business operations.
• Competitors: The strategies and actions of competitors in the market affect a business’s competitive position and market share.
• Intermediaries: Distribution channels, such as wholesalers and retailers, play a role in product delivery and market reach.
• Public: Public opinion, perceptions, and attitudes can influence a company’s reputation and brand image.
• Internal Stakeholders: Employees, management, and shareholders contribute to the internal dynamics and culture of the organization.

The business environment is dynamic and constantly evolving, requiring organizations to adapt and respond to changes in order to remain competitive and sustainable. Understanding and monitoring these external factors is crucial for effective strategic planning, risk management, and decision-making within the business context.

Internal

The internal environment of a business refers to the factors and conditions within the organization itself that directly influence its operations, culture, and overall functioning. Key components of the internal environment include:

1. Organizational Culture: The shared values, beliefs, and norms that shape the behaviour and interactions of employees within the organization. A positive and cohesive culture can contribute to employee satisfaction and productivity.
2. Organizational Structure: The formal arrangement of roles, responsibilities, and relationships within the organization. The structure defines how tasks are divided, coordinated, and controlled.
3. Leadership and Management: The effectiveness of leadership and management practices significantly impacts the internal dynamics of an organization. Strong leadership fosters a sense of direction, motivation, and strategic alignment.
4. Employees: The workforce, including their skills, knowledge, attitudes, and commitment, plays a crucial role in the internal environment. Employee satisfaction, engagement, and collaboration are key factors.
5. Internal Processes: The efficiency and effectiveness of internal processes, workflows, and operational systems contribute to overall organizational performance.
6. Resources: The availability and allocation of resources such as human capital, financial assets, technology, and facilities impact the organization’s ability to achieve its goals.
7. Technology: The integration and utilization of technology within the organization can enhance efficiency, communication, and innovation.
8. Internal Communication: The flow of information within the organization affects collaboration, decision-making, and the overall effectiveness of internal operations.
9. Policies and Procedures: The formal guidelines, rules, and procedures that govern the conduct of employees and organizational processes.
10. Organizational Goals and Strategies: The clarity of goals, as well as the formulation and execution of strategic plans, guide the direction and purpose of the organization.

The internal environment interacts with the external environment, and both are intertwined in shaping the overall performance and success of a business. Managing and optimizing the internal environment is critical for achieving organizational objectives and adapting to external challenges and opportunities.

Objective Goals of Organisations

Organisations are not created randomly, but to satisfy various needs – that is, they pursue some specific goals. These goals are called objective goals and are the end point that an organisation wants to reach.

The degree to which an organisation achieves the objectives it has set, constitutes the degree of effectiveness of the organisation. For this reason, the objectives must be determined with great care by the top management, knowing the possibility of their achievement and realisation.

The goals of a business are complex and no business has only one type of goals. Goals derive from the complex interplay of external and internal forces. Although most business managers claim that the goal of their business is profit, this claim is an oversimplification because it ignores the influence of the external environment and internal forces of a business.

Determination of the Objectives

I. Aspirational Variables:

1. Profit (in case of economic units): The requirements for profit are a basic request and pursuit of the shareholders or entrepreneurs who have invested their money in an economic unit. Besides, without an economic result, an economic unit cannot survive, nor, of course, can the other goals be pursued and achieved
2. Social responsibility: constitutes the web of obligations of organizations towards the society in which they operate.
3. Personal goals: they are the goals of employees, executives, shareholders, etc. Their goals may conflict. It is also possible that their individual goals do not harmonize with the objective goals of the groups to which they belong. The organization tries to balance these goals.
4. Government objectives: make up the legislative regulations and framework in which the business operates
5. Workers’ unions: they are the official associations of workers (workers, employees, executives), which push for the improvement of the working conditions of their members, better salaries, participation in the management of enterprises, etc.

ΙI. Objective Goals:

1. Economic objectives: they aim to ensure the long-term efficiency and success of a business. They can be configured as follows:
   – achieving the greatest possible results
   – financial result at least equal to a lower limit
   – financial results that will allow the self-financing of the other goals of the business
2. Customer satisfaction: the ability of a business to grow and prosper is directly linked to its ability to satisfy its customers. For this purpose, the company focuses its attention and formulates the objectives as follows:
   – to maintain or improve the quality of the products or services offered
   – renew the products and the services offered according to the changes in consumer preferences.
   – there should be consistency in the services offered
3. Creating results: regarding the monitoring of the input-output relationship. It is directly related to productivity and the fulfillment of the goals they have set
4. Improvement/development of employees: The need for training and development of employees’ skills, motivation and better communication, is understood by more and more companies, which try to create an environment in which the employee will satisfy his personal needs. Thus the organization’s attention is focused on:
   – the ability to train and promote executives in the administrative hierarchy
   – to motivate and reward them
   – to ensure sufficient and competent personnel both for the present and for the future
5. Social performance and administrative ethics: all organizations must be integrated into the community in which they operate, trying to contribute to its development and not to its destruction. They must also promote the formation of an ethical climate within the organization/business. As a result, the company focuses its interest on, among others:
   – in the creation of safe products
   – in dealing with environmental pollution
   – in the financing of educational programs
   – at the disposal of its staff for community work
   – improving communication with customers
   – in the formation of codes of ethics that refer to the behaviour of executives with customers, suppliers, supervisors, subordinates, etc.

Usefulness of Objectives

Objectives serve all levels and sectors of an enterprise. Within the framework of the company’s objectives, each executive determines the objectives that will direct the activity of his sector or department. Objectives help:

1. in making decisions: without objective goals we cannot make decisions. Given that decision-making is the choice of a series of actions that lead to an intended result, it is necessary to have predetermined the intended result, i.e. the objectives.
2. in the utilization of the opportunities presented: without objective goals it is not possible to distinguish what is useful to us and what is not, with the result that opportunities are lost or remain unutilized
3. in personal motivation: when there are objectives, individuals feel the need for energy more strongly. Everyone feels the need to succeed, to perform a valuable work, to get somewhere. A person who feels that his work lacks importance has no motivation to continue doing it
4. in the creation of standards: one way to know how well our work is progressing is to compare the actual achievements to the objectives we have defined. If we do not decide what we are trying to achieve it is unlikely that we will know if we have achieved it.

Basic Functions of Administration

We defined management above as the set of operations that will enable the effective gathering, placement and use of human and physical resources with the aim of fulfilling the objectives of an organisation, business or group.

So, the executive who exercises management is obliged to coordinate the overall effort of his subordinates and to ensure them the necessary help and support to achieve their work goals.

The actions taken by an administrative officer in order to achieve the above are known as elements of management and are summarised as follows:

1. Programming/Planning
2. Organization
3. Management/Administration
4. Coordination and Control
5. Staffing
6. Motivation and Incentives
7. Creativity
8. Innovation
9. Productivity
10. Management of Information Systems (MIS)
11. Optimization of Audit/Controlling Procedures

Administrative work requires special abilities, skills, and knowledge, and we must distinguish it from executive work, which is simply the execution of orders.

I will analyse the first 4 elements in this chapter, and the rest in the chapter “Business Administration”.

Programming/Planning

When we plan, we essentially define the objectives to be achieved as well as the means by which they will be achieved. In other words, we decide what needs to be done and when it will be done.

Because programming/planning requires prior determination of action, it presupposes making decisions as it involves choosing between alternative solutions.

The planning process includes the determination of the objectives, the determination of the policy (that is, the limits within which the executives will take action in order to achieve the objectives), as well as the determination of the programs and procedures that must be carried out in order to achieve the objectives.

In order to achieve the above, the management should follow a rational thinking process that will lead them to take the right decision. This procedure is broken down as follows:

• analysis of the problem
• finding alternative solutions and courses of action
• choosing the solution and action that seems to be the most appropriate for the specific problem
• implementation of the chosen decision

Organisation

After the executive determines the objectives they seek, they must take care of the way in which the work will be performed, so that the people who will perform it will perform it in the best way.

It is therefore necessary to create a structure that will ensure the coordination of all available resources to achieve the desired result. The construction of this structure usually begins with the analysis and division of work and then the creation of corresponding work positions. This is followed by the assignment to each work position of a specific work.

As it becomes clear, the organisational structure is not an end in itself, but a tool for the fulfillment of the company’s objectives. It is pointless to strive for a good structure without taking care of its utilisation.

Thus, beyond the division of the work and its assignment to specific persons, groups or departments, the power relations between the persons, positions or departments must be determined, as well as the degree of responsibility and obligation for accountability of each individual who will postpone the fulfillment of the work assigned to them.

Management/Administration

It is the art of managing the human factor. Management, as an element of administration, refers to the way in which a manager will direct and motivate his subordinates, so that the defined goals are achieved.

The administrative staff must create an environment where individuals (employees) will be able to satisfy the goals of the organisation. A big role in creating such a climate is carried out by the communication between the supervisor and the subordinate, the participation of the subordinates in defining and achieving the goals, the behaviour and abilities of the supervisor as well as the ability to motivate the employees.

In this effort, the executive collaborates with various groups within the enterprise, such as committees and work groups. These groups are called formal because they have specific goals to fulfill and are officially recognised by the organisation. However, the nature of the work, as well as the arrangement of the space, can facilitate the creation of informal social contacts that often lead to the formation of informal groups. These groups are called informal and they spring up, so to speak, from the life of the formal organisation as a result of the frequent, daily contact of certain individuals, personal sympathies, new pursuits and problems or common needs.

In the event that the organisation does not offer the individual the satisfaction that the individual desires, they will join these informal groups with great willingness. These groups are often called cliques. shape their own organization, their own methods of action, and their own values and goals. It is possible that these goals often conflict with the goals of the organisation/business. For this reason, it is very important for the administrative staff to investigate and understand the role that informal groups play in the work environment, in order to handle them accordingly.

Forms of informal groups are:

• horizontal cliques: formed between employees of the same hierarchical level, usually due to close cooperation.
• vertical cliques: formed by employees belonging to different hierarchical levels. These cliques are based on the existence of some previous acquaintance of the members or the need to support these members in order to achieve some goals
• mixed or random cliques: they are formed by employees of different departments or branches of the same organisation and who belong to different hierarchical levels. They are usually formed to address functional needs that may not be satisfied by the formal structure, or because of common interests of the employees.

Control

It is the roof of the action of the administrative officers and refers to the evaluation of the performance against the goals and plans. It is the actions taken to indicate whether the events respond to the plans and programs of action.

The audit/control also aims to highlight a functional weakness and take the necessary measures to ensure the desired results.

We call these actions control mechanisms.

These mechanisms help the administrative staff and the organisation in general to monitor the progress and implementation of the objectives, plans and programs of action.

Control is a broad concept that starts from simple inspection and information and reaches the ability to take decisions on corrective actions. Such decisions make control a dynamic coordination tool because by establishing standards and a system of written and verbal reports (that is, conveying information about what is being done) we are in a position to take corrective action, when this is deemed necessary.

Below, in the subsection – Expansion of the Basic Functions of Management, we will take into account more basic functions of contemporary management.

Note

The four functions described above differentiate the executives who exercise management (administrative executives) from those who do not exercise management (executives).

I think it is clear that management is a special job that requires special abilities, skills, and knowledge as well as a special attitude towards events and people.

Not all people have management skills. So, not everyone can manage.

Management and execution are two separate activities.

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

Introduction

The organisation of the business, and specifically the best organization, is the harmonious combination of all the means necessary for its operation, with the aim of achieving the greatest efficiency of capital and the greatest performance of materials and personnel, with the minimum cost and with the maximum satisfaction of the persons associated with the business, employees and workers, entrepreneurs – shareholders, customers, the state and society as a whole.

By business organisation we mean, on the one hand, the opearations and actions with the purpose of organisation (I organize it) and on the other hand the result of this opearation/action (the organisation as a structure – arrangement and as an organisation, which is managed).

Elements that make up the organisation of the business

The elements that make up the organisation of any business are the following:

1. human resources (labour)
2. materials of all kinds
3. time
4. space
5. technical – auxiliary organisational means

Characteristics of Business Organisation

The main ones are:

1. Τhe organization is the main factor of action in the business, and the organizational function is a method with continuous evolution and continuous adaptation (dynamic form)
2. The organization has a universal character for the business, because it extends to all the activities within it, down to their deepest details
3. The organization has organic characteristics as well as programming. According to Gutenberg, business activity is based on planning and organization. Programming is the plan, while organization is the execution of that plan.
4. The organization of the enterprise is not an end in itself, but a means for the pursuit of certain goals
5. The organization of the enterprise has, on the one hand, an external form and on the other, an intellectual content, consisting of the “organizational idea”, which is expressed either by a program – in the case of defining a long-term action – or by improvisation, for the immediate handling of emergency situations
6. The organization of the enterprise depends on its extent and form, on the intended purpose
7. The various organizational measures, since they are aimed at a common goal, must be interdependent
8. The organization aims to place the appropriate person in the appropriate position within the enterprise
9. The result of organizational rationality in business is a function of the adaptation of the members belonging to the business organization to the intended main purpose
10. Man is simultaneously subject and object of business organization since they organize and are organized (by others)

The Balance in the Business Organisation

In an enterprise, organization may be lacking (de-organization – almost impossible), there may be too much organization (over-organization) or there may be a relative lack of organization (under-organization). These three cases constitute forms of lack of balance in the organization.

The best measure – the balance of the organization in the business – is achieved with rationality (study, research, science), which leads to the fuller application of the economic principle, with the consequence of the best efficiency of the business.

Main (general) Organisational Problems of the Business

1. determination of the main and partial objectives
2. division of work and analysis of the activities to be performed
3. defining, distinguishing and coordinating the functions of the enterprise (administrative, managerial, executive)
4. determination of the arrangement of people working in the enterprise (structure of the enterprise, determination of the hierarchical pyramid)
5. supply of material means and adaptation of working men to them
6. determining the course (flow) of the execution of the productive work, in relation to the factors “time” and “space”
7. determining the way people communicate within the business
8. defining the procedure for making business decisions

Analysis of the Content of Business Organisation

1. the general content of the organization of the business, which extends to the following more specific topics: a) distinction of the functions of the business, b) internal structure – conformation of the business, c) flow – course of work within the business, d) communications within the enterprise, and e) the process of making operational decisions
2. the organization and factors of production in the context of the enterprise and specifically: a) organization and capital (capitalization, size and coalitions of enterprises), b) organization and work (organization of the human factor), and c) organization and territory (place establishment of the business)
3. the organization of the business into main operations (organization of production, supply, storage, marketing, financial operations, accounting, etc.)
4. the organization of the administrative function of the enterprise, i.e. the management of the enterprise (management in a narrower sense)

Business Operations

see below, section “Organisation of the Business by Main Operations”.

The Organisational Structure/Conformation of the Business

The entire organizational structure of the enterprise manifests itself in 2 ways: a) with the structure of the enterprise, i.e. with the arrangement of the persons working in it and the creation of vertical and horizontal relationships between them, and b) with the course of the activities within the enterprise, i.e. with the work process within it.

In this way, two partial forms of the organizational structure of the enterprise arise: a) the organization of its structure, which is an institutional problem, referring to the division and arrangement of organs and agencies, and b) the organization of the flow or course of work (and work in general) , which constitutes the regulation of activities within the enterprise, in relation to space and time.

Starting from the organization of the business structure, we examine the following specific problems:

1. the division of labour within the enterprise
2. the configuration and distribution of job positions and business sectors based on the division of labour
3. the formation of the “hierarchical pyramid” in the enterprise, with the determination of the “ranks” (leadership positions) within it
4. the development of the levels of the hierarchical pyramid in depth and width
5. the system of the company’s competencies, i.e. the ways of transferring power and responsibility within the company.

The Organisation of the Flow or Course of Work

Organization of the flow or process of the work is the spatial and temporal configuration and regulation of the work within the business, and more specifically, those work processes, which are performed in the business in a repetitive manner.

This configuration and setting aims at the following purposes:

1. to achieve greater efficiency (such as productivity and economy)
2. in achieving higher quality in work
3. to achieve faster execution of the work, and
4. to increase the satisfaction that comes from work

As elements for the detailed determination of the flow or course of the work, apart from the space and time, are considered the subject of the work, its type and object and the auxiliary materials used for it.

Communications Within the Business

Examining the social organization – business from a dynamic point of view, allows the formation of an understanding of the relationships between the people who are in the business. The central point of this dynamic research is “information” (news – message), which on the one hand is the occasion and object of communication (information is transferred from one person or group to another person or group) and on the other is the basis for on which business decisions are based (every decision made is due to information processing).

The premise of communications within the business is the creation of connections, which is basically due to the organizational structure of the business, which defines the job positions, the levels and the hierarchical pyramid, as well as the way in which each connection works.

Connections in business appear in three main forms:

1. power/authority connections
2. cooperation connections, and
3. representative connections

The Decision-Making Process in Business

The decision is a manifestation of the will of a person or a group of persons within the enterprise, which is based on the existence of relevant jurisdiction (authority – responsibility, competence) and which affects the behavior of all persons belonging to the enterprise (if it comes from the highest level) or of persons who belong to a certain sector in the business (if it comes from the head of the sector, of the corresponding level).

The right to make a decision is a function of the authority that exists in the managers of the various sections of the business, i.e. the levels (in the hierarchical structure), from the highest (management) to the lowest (e.g. foremen).

At the highest level this right is “primitive”, while at the other levels it is “produced or given”, since it is transferred from above by authorization.

In the case of the transfer of this right by authorization, the field to which it extends is clearly defined, always based on the principle of the corresponding transfer of power and responsibility.

As it is clear, the decision-making process is of special importance for the company’s top management.

The Decision Process and the Factors Influencing the Decision-Making

The “procedure” of the decision until the “birth or taking of the decision” is divided into five stages:

1. position and analysis of the problem
2. collection of elements and data for its resolution
3. determining the terms for its resolution
4. highlight the different alternatives
5. selection of the most suitable (excellent) solution, which leads to the taking of the decision.

Decision Models

Models, generally in economic science, represent real objects, singularities or relationships, in which a set of analyses and syntheses is made.

Microeconomic (business) models are used to make decisions mainly under uncertainty.

Macroeconomic models serve to derive a theory or a principle, for economic policy and for economic planning.

Business Research

It is the scientific investigation of the phenomena that are presented in the interior of a certain process, considered as a whole, which (investigation) is done to evaluate the significance of these phenomena and further, to take the most appropriate decisions.

Due to the complexity of the problems being addressed, operational research is carried out by a team of experts, each of whom has a different specialty (e.g. engineer, mathematician, statistician, doctor, sociologist, organizer, biologist, philosopher, economist, etc.).

Business decision-making is based on the formulation of “quantitative mathematical models”.

When applying the business research technique, the following steps are followed:

1. statement of the problem
2. search for the scientific data of the problem and evaluation of its coefficients
3. Drawing up a mathematical model and determining the variables that are controlled and those that are not controlled by the one who is going to make a decision
4. search for solutions of the mathematical model
5. comparison between the various alternatives and selection of the best (potential) of them, which constitutes the decision
6. applied to the action of the resolution that was qualified (that is, the decision that was made) with the previous determination of its terms, and
7. control of the results of the solution – decision, in accordance with the reality that followed.

Business problems solved by business research:

1. inventory management
2. design of the production process
3. combining the factors of production to achieve the maximum possible efficiency
4. maintenance and replacement of machines
5. waiting for persons or objects
6. competition, with the determination of the strategy that must be applied
7. market research
8. preparation of advertising programs
9. investment planning
10. business development
11.  personnel problems
12. preparation of the best possible industrialization program
13. preparation of plans for industrial facilities
14. transportation problems
    and many more

I have to note here that the implementation of business research is very expensive and for this reason, only very large companies apply it.

In my methodology, which is mainly aimed at small businesses and start-ups, business research is conducted in a specific way in which we condense data and information, making the whole process extremely affordable.

Theories & Techniques Used in Business Research

1. Probability theory or calculus
2. Linear programming and the Simplex method
3. Non-linear programming
4. Dynamic Programming
5. Waiting theory
6. Markov theory
7. Game theory
8. Monte Carlo technique
9. Management or business game
10. Emulation or simulation
11. Delphi method (method of Delphi)
12. Cost-benefit analysis
13. Mathematical programming
14. The theory of queues (waiting lines)
15. The substitution theory
16. The reserve theory
17. Mesh analysis
18. Binary theory
19. Sensitivity analysis

Factors Affecting the Organisation of Businesses

A. External factors:

1. the international conditions
2. the system of economic and political organization
3. the degree of economic development of the country where the company is established
4. the legislative framework within which the business activity is carried out and mainly the rules of Commercial, Financial and Labour Law
5. the technological level of the country where the business operates
6. the state policy regarding the provision of organizational assistance to businesses: with international collaborations, with various state organizations, with relevant training at various levels, with the provision of credits, etc.

B. Internal factors:

1. the size of the business
2. the legal form of the business
3. the economic type of the business
4. the personality of the entrepreneur or the business leader, i.e. the body of the business administration
5. the quality of the company’s executives and the staff (human factor) in general
6. the object of the enterprise

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

The Factors of Production

We will briefly examine the organization of “work” or the human factor, the “capital” factor, and the “territory” factor.

Human Labour in Business

Especially, in terms of business, human work is the disposition of a natural person’s physical, spiritual and mental powers for the realization of the goals that the business seeks.

The importance of the “work/labour” production factor for the business is enormous. With work, the other factor of production, “capital”, is utilized, mobilized and paid off.

Work has a formative character, because man (the source of work) has properties that no other factor has: thinking, judgment, combination, coordination, imagination, initiative, etc.

Without capital there can be (albeit rudimentary) business, but without people (work) this is impossible.

That’s exactly how I expanded into the internet at the end of 2014 when I created the blog “Web Market Support”. It was a personal venture, and my ultimate goal then was to transform the simple blog into an agency – all by myself, without outside help and without any capital investment. I only invested in my personal work. The only capital I invested in this newly formed business came from sales through the blog. In this way I managed to create the coveted agency – and now through the revolutionary methodology “7 IDEALS” the agency is upgraded.

The work is based both on the spiritual, mental and physical abilities of the person, as well as on their will (willingness) to offer. Their abilities depend on their gender, physical constitution, intellectual qualifications, age, special training (knowledge) and relative experience. Their willingness to offer depends on the terms of their work/labour (salary, environment, amenities, etc.).

We must treat the working man first as a human being, that is, as a moral and social personality. That is why the work must be examined from many sides, i.e. the physiological, the psychological, the cultural, the sociological and the economic.

The Tension for the Creation of a Science of Work

The fact that work is an object of multiple examination led to the idea to create an independent and complete “science of work”, which would include the following special branches:

1. physiology of work, which examines the relationship of work to human physiology
2. psychology of work, which examines the individual psychological properties and reactions of the working person
3. occupational hygiene, which examines the protection of workers’ health, their occupational diseases and the treatment of their diseases
4. sociology of work, which examines the group relations of working people
5. work pedagogy, which refers to the training and specialization of workers
6. technology of the work, regarding the best possible execution of the work
7. labour or employment law, which examines from the side of the law the relations between employees – work – employers
8. labour economics, which investigates the economic aspects of labour provision, and
9. work organization, which studies the best ways to organize work

Labour Discrimination

The work, with different criteria, can be divided into the following categories:

1. Spiritual and physical. No form of work is exclusively mental or physical, but in each of these 2 forms, 1 element comes first – mental or physical – but there is also a percentage of the other
2. Subjective (regarding the person of the working person) and objective (regarding the work provided)
3. Planning (provided by those who are at the top of the administrative pyramid and draw up the plans), managerial or leadership (provided by all those who hold leadership positions – levels in the business), and executing (provided by those who are at the base, the executors, whether they are employees or workers)
4. Qualified (provided by a qualified worker) and unqualified.

Every kind of work, for the worker is a source of income and a means of livelihood, while for the business it is an output, i.e. an element of the cost, and the totality of the costs for labour, is essentially, the cost of work, in the business.

Content of the Work Organisation

The organization of work in the enterprise includes the following special topics:

1. the selection and recruitment of staff
2. the correct placement of each employee and their adaptation to work
3. the improvement of the quality level of the staff, with their education and training
4. the evaluation of the professional suitability of the employees
5. standardizing, timing and simplifying work
6. in general, the motivations for increasing the productivity of workers
7. the favorable environmental and work performance conditions
8. the issues related to the remuneration of the employees
9. the duration of work and recovery from fatigue
10. the cooperation of employers and employees in the management of the enterprise
11. labour protection and social services for workers
12. human relations in business
13. the organization of the “Personnel Service”, and
14. the general consideration of business as a “social institution”.

Organization of the Enterprise and the Factor “Capital”

The rational organization of the company’s capital structure extends to the following special issues:

1. property (asset) and capitalization (liability)
2. the size and structure of the total capital
3. the distinction of foreign or credit capital, in long-term, medium-term and short-term
4. the formation of reserves
5. the conditions and risks of borrowing (foreign) capital
6. the degree of efficiency of the enterprise’s capital
7. the structure of the property and its degree of consolidation
8. the circulation of the property and the intensity of the speed of rotation of the assets in each annual use
9. the depreciation of fixed assets and receivables
10. the liquidity of the business
11. the working capital of the enterprise
12. increasing the efficiency of the business
13. the size of the capital, which depends on the type of business, its production volume, investments in fixed and current assets and the time period for which it is needed
14. indicators like those of G. Fischer: debt burden ratio, credit position of the company, capital duration ratio, equity safety factor, capital turnover ratio
15. indicators of organization of the company’s asset structure: degree of intensity of asset consolidation, degree of intensity of circulation elements, form of the work cycle
16. indicators of asset and liability relationships: intensity of fixed capital, liquidity ratio, participation of own capital in investment, participation of long-term foreign capital in investment, participation of short-term foreign capital in current assets

Business Size and the Advantages and Disadvantages of Large and Small Businesses

Big business is linked to the development of capitalism and is supported by the point of view of production in the form of mass production (Bucher), continuous flow production (Ford), etc., and by the point of view of the disposition of its products in the large international markets that have been created with the new conditions of international trade.

Its advantages are:

• in the financial sector, its broad capital base, the ease of finding long-term loan capital and the possibility of self-financing
• in the technical sector, the perfect technological equipment, the application of modern production systems and methods, higher productivity and the lowest average (per unit) production cost
• in the commercial sector, the supply of materials in large quantities and lower prices, the rational regulation of stocks, the application of marketing, intensive advertising and sales in large markets
• in the administrative sector, better organization, the implementation of action planning, the use of newer methods and techniques, the high level of managers and the creation of specialist staffs

Its disadvantages are:

• the inelasticity of adjustment to economic fluctuations
• the difficulty of coordination and control
• the emergence of bureaucracy
• the creation of large costs that tend to neutralize the advantage of lower average cost, and
• the lack of direct contact with consumers

The medium and small business in certain sectors and especially in those that require direct contact with consumers, is presented as more efficient.

Its advantages are:

•  easy adaptation to environmental changes
• the most effective defense against seasonal hazards
• maintaining direct communication with the market
• the general liking for it because it serves more social expediency (livelihood)

Its disadvantages are:

• micro capital
• the small production
• the difficulty of finding credit capital
• the delay in technological equipment
• the inability to carry out bulk procurement, and
• its dependence on the personality of the entrepreneur

Unions – Coalitions – Concentration of Businesses

Business consolidation takes different forms and appears as:

1. concentration of businesses in a place (territory), as happens when certain businesses, similar or different, are concentrated in a certain place (e.g. city or region), either because this place is a consumer center, or because it secures the raw material or labor (workforce) or motor power, either because it provides “excellent economies” and infrastructure (e.g. industrial zones)
2. concentration of businesses which has as a consequence the concentration of entrepreneurial capitals
3. concentration of enterprises to achieve the advantages of large size, and
4. concentration of enterprises in the form of an offensive or defensive coalition

Their origins go back to the guilds of the Middle Ages. The initiative of certain businessmen, the protectionist policy of the newer states and their encouragement from them were judged to be the cause of their development. The consequences of their recommendation may be favourable for the economy (preventing the disappearance of small units), but they may also be unpleasant for consumption and personnel.

Prerequisites for their establishment are the uniformity of the products produced by the allied enterprises, their quality stability, the absence of substitutes that can displace their products and the appropriate climate and spirit among the allied entrepreneurs.

The problems faced are many, mainly, the distribution of participation rates, the management of the coalition and the finding of capital.

The coalitions are distinguished according to the degree and manner of their commitment as follows:

1) Coalitions of informal and loose commitment:

• the “gentlemen’s agreement” based on an oral and non-negotiable promise,
• the “pool”, which is an oral or written, non-negotiable agreement between producers and traders to achieve goals, such as the regulation of prices, production, etc.,
• the “corner“, which is a coalition not only of producers or producers and traders, but also of any private individuals, for the achievement of a special profit-making effect, after which it dissolves,
• the “ring”, which is a circle of speculators interested in the appreciation of a certain commodity

2) Coalitions with a contractual commitment, which is essentially a personal commitment of the representatives of the businesses and which has no legal status. These are:

• the “cartel”, which is a coalition of enterprises of the same branch of production,
• the “association of interests”, which is usually found as a new enterprise that belongs to the allied enterprises and aims to reduce the cost and increase the profits of the enterprises that are allied

3) Coalitions with capital commitment that takes place between corporate capital and commits the same enterprise. These are:

• the “concern”, which consists of businesses that retain their legal independence, but whose capital, due to total or partial commitment between them, acquires its own economic entity,
• the “trust”, in which, all the allied enterprises merge into one or are absorbed by one enterprise and it is the type that has received the fiercest war, because it is considered that it usually leads to the imposition of monopolistic dominance,
• the capital accumulation companies, such as: the capital investment coalitions, the portfolio companies , the high risk financing companies.

In addition to the above, there are other types of business coalitions in various forms, such as the “Joint-Venture”, the “Consortium”, and more.

Organization of the Business and the “Territory” Factor

The nature-soil production factor has different meanings for businesses, depending on the production sector they belong to, but also depending on the branch/industry they belong to.

Thus, in some enterprises of primary production (such as agricultural and mining) the factor of production “soil” plays a primary role, while in others (e.g. livestock) it plays a lesser role and in others (e.g. fishing) they are replaced by the broader term “nature”, which also includes the liquid element (sea, lakes, rivers). In the enterprises of secondary production or processing (industrial, craft) the factor of production “territory” is connected with the place of their installation, which plays a big role. And in the enterprises of the tertiary production (services), in others it is connected with the place of their establishment (e.g. banking, tourism, educational, wholesale and retail, etc.), while in others the role of “territory” is relatively larger (road transport companies) and in others, on the contrary, smaller (e.g. brokerage companies).

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

Introduction

Operations in the business are categories of activities that are recommended by the criterion of the relevance of the actions.

The exercise of each function (category of activities) is assigned to an organ/body that corresponds to the structural distribution of activities within the business (activity sections in the business).

The implementation of the activities of each body is undertaken by specific persons/individuals, who become their representatives.

Functions and corresponding organs/bodies are distinguished into broad and partial. E.g. the function of production which takes, as a body, the form of production management, is distinguished into sub-functions and correspondingly more bodies, such as manufacturing department, product design department, quality control department, etc.

Functions within a business are distinguished into main/basic and secondary.

The main/basic operations of the business are:

1. the commercial or otherwise marketing operation/function
2. the productive or otherwise technical operation
3. the supply function (procurement and purchases)
4. the function of storage
5. the financial function
6. the administrative function

There are many theories regarding the distribution and classification of the various functions within the enterprise.

In my methodology, which is mainly aimed at small and medium-sized and newly established businesses, I distinguish and classify the operations in a specific way that helps the business to become flexible, efficient, and highly effective, and to be able to respond quickly and methodically to any changes and developments either of its external or internal environment, but also, and most importantly, it empowers small businesses so that they can not only survive in the face of fierce competition, but pioneer and innovate.

This specific model of distribution of the various functions of the business – which I was inspired and created with a lot of effort and thought – gives dynamics and a special colour to the role of the General Manager, who is not simply the coordinating and administrative organ/body but a fully equipped leader who knows everything about the business, and whose example is followed by all the executive bodies and the rest of the members of the enterprise.

The classification model of the business functions that we will use is as follows:

BUSINESS OPERATIONS:

• Organisation – Administration – Management
• Marketing
• Production & Supply Chain
• Financial Management/Economics
• Human Resources
• Information Technology & Web Development
• Legal and Regulatory Compliance
• Social Image & Responsibility
• Innovation
• Business Development

I analyze the organization of businesses into main opeartions/functions thoroughly throughout the 2nd phase – “Big Ideas” where we formulate our overall business strategy

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

Definition and Types of Organizational Change

Organizations are not static. Given that they are in constant communication and interaction with the external environment and are often pressured by their internal environment, they must modify their goals, structure, work procedures, job descriptions, policies, technology that use, and the behavior of their members.

We call this change, which involves modifications to key sections of the organization, an organizational change.

As we have seen, managers operate in a complex environment in which they try to improve the organizational effectiveness of the business. So they must be in a position to perceive in time the forces that cause a disturbance of the balance and to deal effectively with the inevitable conflicts.

Listen, this is serious stuff!

Organizational change can be unplanned or planned.

The unplanned happens randomly and often escapes the attention of the the people in charge.

e.g. an intractable strike that results in the closing of a factory (the negative side), or an interpersonal dispute that leads to a new procedure or regulation intended to define interdepartmental relations (the positive side).

Planned change is the immediate response to the perception that there is a gap between the desired and achievable performance levels.

Planned change keeps the organization up-to-date and alive.

e.g. products and services become obsolete, competitors introduce new products, the government introduces new laws and tax policies, labour unions become more aggressive or powerful.

In all these cases the organization must adapt to deal with the above conditions or accept the inevitable decrease in its effectiveness.

The business field is constantly changing and the enterprise is a dynamically moving organization that not only has to adapt but also prevent situations before they arise.

In my long career, change is the only thing certain. The business environment is so diverse and demanding that both the business leader and the executives need to be vigilant.

The leader must be fully informed about the changes and developments in all areas of life and society.

Given that organizations are open systems that are influenced by their environment, they must develop internal mechanisms to facilitate planned change.

There are different types of organizational change. We distinguish changes concerning:

1. in technology. These are changes in the production method used and include the introduction of new production techniques/procedures or service offerings.
2. in the product. These are minor modifications to already produced products or the introduction of completely new production lines
3. to the administration. It is about changes in the organizational structure, goals, policies, remuneration methods and systems, labour relations, budgeting and control systems, etc.
4. to the workers. It is about changes in the attitude of the employees, towards the management or the processes, broadening the ambitions and aspirations of the employees, training and developing their skills, introducing new employees to the department or the team, etc.

Any type of organizational change is likely to cause chain reactions. The figure below clearly shows these interactions:

The Model of Organizational Change

Planned (programmed) change is motivated by certain forces and can be analyzed in the following stages:

1. motivating forces
2. proponent of change
3. what should change? structure; technology; procedures?
4. change procedures
5. change
6. organizational effectiveness

Forces That Motivate Change

The distance/gap between the expected and the desired goals or results is the basic indication to investigate the goals, the procedures and generally the way of performing the tasks.

The factors that can cause a change in the organization are innumerable. I will mention some of them as an example:

1. change of goals: when the goals or the basic mission of an organization change, then reorganization is needed. e.g. the creation or abolition of departments, centralization or decentralization of power, introduction of management based on objectives, etc.
2. use of new equipment: the introduction of new technology can bring several important changes, such as eliminating positions, training staff, etc.
3. legislative regulations: the legal framework limits the action of businesses. The legislative regulation of various problems can be an occasion for organizational change, with the creation of new positions, specialties or committees. A classic example is the regulations concerning the participation of employees in management or the health and safety of employees in the workplace.
4. consumer drivers and incentives: consumer organizations, some of which are powerful today, push for better and safer products. In order for businesses to respond to these requests, it is possible to reorganize, improving or expanding public relations departments, quality control departments, or product research and development departments.
5. tactics of competitors and reduction of profits: it is possible to cause structural changes with the aim of developing or shrinking activities, decentralizing or centralising/concentrating power, reorganizing work positions, retraining or voluntary exit of staff, attracting people with new skills, etc.
6. increase in resignations and drop in morale: it can lead to a complete revision of the remuneration policy and a complete redesign of the work positions or even to a revision of the power relations.

The Proponent of Change

It is the individuals or the group of individuals who desire or consider this change necessary.

It can be the management of a company, a supervisor or even an external consultant who has been called to study the organization.

An integral part of any executive’s job is to be aware of situations that need change, to be receptive to the useful ideas of others, and to have the ability to turn the necessary innovative ideas into action.

Effective change agents facilitate creativity and renewal within organizations.

Intervention Strategies

This term is used to describe what needs to change. The strategies refer to the sections we mentioned above, at the beginning of this sub-unit: technology, product, management, employees.

Change Procedures

Lewin argues that the change process must be completed in 3 phases:

1. preparation
2. change
3. stabilization

Phase I – Preparation:

It is the stage of preparation for change. At this stage the change is realized. Pressures, reduced performance, recognition of problems, recognition of better solutions, help to realize the need for change.

Conflicts and disputes give people the opportunity to think in different ways about the problems that cause them.

Phase II – Change:

Once the need to change a method or a structure or a goal becomes conscious, its realization follows.

When we enter this phase without the previous one having preceded it, that is, without the need for change having matured, then it is certain that there will be a reaction to the change of a situation and the change will fail.

Phase III – Stabilization:

It is not enough to make the change, it is necessary to monitor its implementation and to be positively supported by those who implemented it.

Let’s not forget that people tend to go back to the old way of doing a job, because that’s what they were used to.

Therefore, continuous monitoring is needed to overcome the problems that may arise during its application.

The continuous evaluation, again, of the results is necessary.

Change and Organisational Effectiveness

Organizational change aims to improve organizational effectiveness. Whether its results are positive or negative, temporary or permanent, depends on the previous stages. Regardless of the results, the process of change is continuous and dynamic.

The Management of Planned/Programmed Organizational Change

The strategies that management can follow to approach the problem of organizational change are grouped into three categories:

1. The strategy of coercion: In this case management enforces the proposed change by using its authority and the right to command either by offering special rewards or by threatening to impose sanctions. This strategy usually has temporary results.
2. The strategy of empirical or rational logic: In this case, the management tries to convince about the necessity of the change, invoking special knowledge and logical arguments.
3. The strategy of standard retraining or normative/reeducative strategy: In this case, the administration clarifies or establishes values and assumptions from which support for the proposed change will naturally result.

The latter two strategies are thought to offer the most long-term results.

After this, the question naturally arises as to how the business, but also any organization, will handle the random reactions of individuals to change, that is, how it will apply the above strategies in practice.

Although people readily accept changes involving material things, they usually resist changes occurring in interpersonal and work relationships. This happens because they are defending something very important that seems to be threatened by the change effort.

Indeed, such changes are likely to threaten the security of their position, the ways they have learned to perform a task, the power and prestige they have acquired within the organization, or, once again, to consider, unfairly, that they are threatened.

The latter can happen when there is mistrust in management and employee relations, misunderstandings and different assessments of the changes that need to be made.

So people’s fear, regardless of what cause it comes from, often pushes the people of an organization to react negatively to the changes that management wants to make.

A manager’s ability to introduce organizational change without causing backlash (or at least with minimal backlash) is a key management skill.

The reaction to change is often deeply rooted both at the highest and lowest administrative levels. e.g. the introduction of a personnel evaluation system that will be linked to the granting of monetary increases, does not constitute a threat to the privileges of an administrative officer who until now, possibly, determined alone and entirely at his discretion, who will receive an increase?

Does the creation of a committee not constitute a threat to the authority of an administrative officer who was deciding alone on the issues that, now, will be decided by the committee?

Does the description of duties not constitute a threat and a commitment to the holder of the specific position, who until now has performed the duties that were convenient for him and in the most convenient way for him and not as the position required?

Does the introduction of an electronic computer require retraining of employees so that it can be fully utilized?

The reaction to change is often not expressed overtly. It can appear covered in various ways such as:

• aggression
• absences
• resignations
• cancellation requests
• tansfer requests
• reduced performance
• detachment – lack of concern
• slowness
• omissions
• mistakes
• etc.

But is resistance to change entirely undesirable? Of course not.

Because sometimes the resistance on the part of the employees can be extremely logical and based on justifiable reasons, which maybe the management did not take into account.

However, managers often fall into a trap, thinking that the change they propose is all good and should be accepted without reservations.

So the resistance to change can be due either to the logical analysis, or to the emotional reaction (unreasonable fears). In the first case, the administration must consider the objections expressed and, if they are valid, revise its proposals. In the second case, it must find ways to overcome it.

Tactics to Reduce Reaction to Organisational Change

The tactics that have been proposed to reduce the reaction to change are grouped into different categories and I analyze them through the training program for business leaders – in #1 phase – 7IDZONE.

The Greiner Model

This pattern shows the evolution of changes in organizations. Greiner observed that in organizations there is a general mode of development. This mode includes judgments that require changes. This change is either developmental (evolutionary) or revolutionary.

Evolutionary change is gradual and continuous.

Revolutionary change is fast and immediate.

There are five stages of change in an evolving organization.

Greiner’s model points out that there are predictable changes that all developing organisms will go through. Overcoming the problems of each phase creates new problems in the future, causing further changes. Management must investigate and know what stages of development the specific business is in, in order to predict the type of change that will be needed.

I delve into Greiner’s model through the training program for business leaders – in #1 phase – 7IDZONE.

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←

BACK TO TOP (OVERVIEW) ←

Introduction

The term that initially prevailed for the management of businesses was “Business Administration”.

Parallel to the term “administration” the term “leadership” was used, with a broader content.

We also encountered the term “management”, which is not new. It was used around the end of the 19th century by Fr. Taylor, however, more in the sense of “scientific organization”. Later the term “management” was used with the concepts of administration, leadership, management, and direction.

Management is a mixture of administration – organization – leadership – management.

The content of “top management” is the classic of management (and mainly forecast – organization – direction – coordination – control).

In a more practical spirit, we could characterize management as:

• solving problems
• taking initiatives
• relating to people
• creating team spirit
• communication
• persuasion
• negotiation
• empowerment
• leadership
• flexibility
• creativity
• positive thinking

The management environment is diverse:

1. economic
2. technological
3. social
4. political and legislative
5. morale

Principles and Rules of Business Administration

A’. Principles:

1. selection of the appropriate administration/management system for each specific case (individual – collective and more special forms)
2. application of the decentralized type of management, with the assignment of responsibilities from higher to lower administrative positions
3. selection of suitable persons for the positions of managers in the entire hierarchical scale
4. skillful handling of the human factor
5. clear definition of responsibilities (authority – responsibility) and tasks, with a separation of administrative, operational, and executive positions
6. use in all sections of the most modern and effective technological means
7. firm commitment to the intended goals and objectives, to the idea of progress, development and continuous modernization

B’. Rules: The following rules must also be applied to the administration:

1. objectivity in behavior
2. continuity in management
3. unity of command (everyone taking orders from only one superior) which is the cornerstone of the formal or hierarchical organization
4. unity of direction (ensured by the implementation of a single action plan)
5. unity of the staff (avoidance of divisions)
6. submission of all to the general interest

The Team of the Top Management

The main body of the business consists of levels and positions with a linear – hierarchical structure, but, apart from this main structure, there are executive positions that are not part of the hierarchical structure. They have a completely specialized character and have responsibilities that concern the entire business.

These executive positions help, give opinions, and advise the top management and the heads of key executive departments – senior managers.

We distinguish three categories of staff/tactician positions:

1. those who support the work of top and senior administrative positions (secretaries, internal auditors, psychologists – psychotechnicians)
2. those who give opinions and advise them (consultants, special experts), and
3. those that deal with applied research – and that are directly connected to top management (improvement and refinement of manufactured products, creation of new products or new types of products, exploration of new markets, and the application of new systems and methods in production, marketing, etc.).

Other Auxiliary Sciences and Techniques of Business Administration

The Technique of Human Relations

The technique is based on the newest scientific branch of “behaviourism” which is a synthetic branch with elements of psychology, anthropology and sociology and which investigates human behaviour and the factors that influence it.

The technique of human relations consists of establishing material and moral motives, communicating with employees, verbally and in print, correctly dealing with their reactions and conflicts, creating social projects for them, organizing recreational – family gatherings, excursions and cultural events. events, and more.

The Technique of Public Relations

The purpose of this technique is to connect the business in the most convenient and effective way with factors outside it, who are valuable for the business (shareholders, customers, suppliers, mass media, banks, administrative authorities, public opinion) or they are interested themselves in the business for some reason (producers and sellers of raw materials and various materials, transports, insurers, and others). This way we understand that the role of Public Relations is twofold, active (from the business to the outside) and passive (from the outside to the business).

In the framework of the Public Relations technique, we use:

• interpersonal interviews and discussions
• press interviews
• lectures
• screenings of images or films in a gathering of people
• press releases
• radio and television presentations
• announcements in daily and periodical publications
• the publishing of books, magazines and newspapers or bulletins by the companies
• the participation in exhibitions (international, sectoral, homoprofessional)
• the sending of circulars, and others.

In the digital age, online means have become increasingly important in the field of Public Relations. Here are some common online tools and channels:

• Press Releases: Online distribution of press releases through press release distribution services or company websites.
• Social Media: Utilizing platforms like Facebook, Twitter, Instagram, LinkedIn, and YouTube to engage with the target audience, share news, updates, and promote brand messages.
• Online Newsrooms: Creating dedicated sections on company websites that provide journalists, bloggers, and the public with easy access to press releases, media assets, company information, and contact details.
• Blogs: Writing and maintaining company blogs to share industry insights, thought leadership articles, and news updates.
• Influencer Relations: Collaborating with online influencers and bloggers to generate buzz, reviews, and endorsements for products or services.
• Online Events: Organizing webinars, virtual conferences, live streaming events, and online press conferences to reach a wider audience and engage with stakeholders.
• Online Reputation Management: Monitoring and managing the online reputation of the brand through online review platforms, social media listening, and engagement with online communities.
• Content Marketing: Creating and sharing valuable and relevant content such as articles, white papers, infographics, videos, and podcasts to establish thought leadership and build brand credibility.
• Email Marketing: Using targeted email campaigns to communicate with stakeholders, journalists, influencers, and customers.
• Online Crisis Communication: Leveraging online channels to address and manage crisis situations, providing timely updates, and responding to concerns and inquiries.
• Online Surveys and Feedback: Conducting online surveys, polls, and feedback forms to gather insights, understand audience preferences, and gauge public opinion.
• Online Media Monitoring: Using online tools and software to monitor media coverage, social media mentions, and public sentiment related to the brand or industry.

These are just some examples of the online means used in Public Relations. The digital landscape offers a wide range of opportunities for effective communication, relationship-building, and brand promotion in the field of Public Relations (PR).

The Technique of Analysis

The administrative work is assisted to a great extent in terms of the assessment of situations and the taking of decisions, by the application of the technical analysis, which shows a great variety.

Analysis means penetrating to the depth of the object being investigated and bringing up the constituent elements, which are studied and for which correlations and interactions are established.

The analysis has a deductive or productive character (belongs to the scientific method of deduction or production) because it starts from the general (composite) to reach the part (the parts that make it up).

The analysis is distinguished into:

1. quantitative, which refers to sizes, quantities and proportions of the constituent elements,
2. descriptive, concerning the identification of the elements,
3. hermeneutic, which concerns the relationships between the constituent elements, and
4. static, which refers to specific situations as they appear at a given point in time and dynamic, which refers to situations as they evolve in time and space.

The forms of analysis used by business management are:

1. Strategic decision analysis
2. Analysis of administrative circuit
3. Financial analysis
4. Time series analysis
5. Gap analysis
6. Trend analysis
7. Risk analysis
8. Limit analysis
9. Econometric analysis

Industrial Engineering and Morphology

Industrial engineering, according to a definition given by the Institute of Industrial & Systems Engineers, has as its object the design and installation of integrated systems that cover three factors of production, the working people – the mechanical equipment – the materials used with the purpose of choosing the place of installation of the business, the planning of the facilities, the organization of the production and the factory, the internal transports, etc.

Industrial morphology is the technique that deals with the aesthetic side of manufactured industrial products, so that they have a good external appearance and attract the consumer. In its context, collaborations are made between industrial technologists, advertisers and designers – morphologists (product designers).

The Technique of Industrial Espionage and Counterespionage

The term espionage has been taken from the secret war that is conducted between states, with the aim of extracting classified information of a military nature. The secret war has moved to the field of business and more specifically industrial competition and is conducted between businesses interested in extracting important secrets from competing enterprises, while at the same time taking defensive measures to avoid the extraction of their own secrets.

These secrets do not concern the manufactured products, firstly because they are protected by the “standards” that are filed and registered (along with the trademark and the distinctive title) and secondly because, with contemporary means, it is not difficult to establish the chemical-quality composition of a product.

These secrets mainly concern plans for future activities, such as:

• the preparation for the production of a new product
• the planning of a technological investment
• the preparation of an advertising campaign plan
• the future introduction of new methods of conquering the market in the context of marketing,
• and more.

The Business – Industrial Ecology

Ecology in general is a branch that includes a synthesis of elements of Biology and Sociology. As a biological branch, it examines the relationships of beings (abstract) with their natural environment. As a sociological branch, it examines the relationships of human groups with their material, social and cultural environment.

In the context of (general) Ecology, the special branch of Business or Industrial Ecology was formed which deals with the relations of the industrial enterprise to its natural, material, social and cultural environment.

No business should (want to) pollute, contaminate or degrade the environment, in any form. And the managements of the businesses must take care and be vigilant about this. The cause of atmospheric pollution, contamination of inhabited and non-residential areas, seas, rivers, lakes and the degradation of the environment, cause a significant social cost and create an unpleasant climate for the business that causes them.

Statistic Elements & Techniques

The statistic elements, the “statistics”, kept by businesses, depending on the intended purpose, are divided into information statistics and control statistics.

The most special categories of statistics are:

1. Movement statistics (production, sales, stocks, etc.)
2. Financial statistics (balance sheets, results, capitalization, etc.)
3. Comparative statistics
4. Marketing statistics
5. Customer Statistics: These include data related to customer demographics, behaviour, preferences, and purchase patterns.
6. Employee Statistics: This category includes data on employee demographics, performance, turnover rates, training hours, and more.
7. Operational Statistics: These statistics focus on measuring the efficiency and effectiveness of business operations, such as production rates, lead times, downtime, and resource utilization.
8. Quality Statistics: These statistics assess the quality of products or services, including defect rates, customer complaints, and customer satisfaction scores.
9. Research and Development Statistics: Businesses may gather data related to R&D efforts, including research investment, innovation success rates, and patents filed.
10. Supply Chain Statistics: These statistics track the performance of the supply chain, including supplier performance, lead times, and inventory turnover.
11. Social Media and Digital Marketing Statistics: Data related to online marketing efforts, website traffic, social media engagement, and digital ad performance.
12. Customer Service Statistics: These include metrics related to response times, resolution rates, customer feedback, and overall customer service performance.
13. Environmental and Sustainability Statistics: Companies that prioritize sustainability may track data on energy consumption, waste management, and other environmental metrics.
14. Competitive Statistics: Information on competitors’ market share, pricing strategies, product launches, and customer feedback can be important for strategic decision-making.

It’s essential for businesses to collect and analyze relevant statistics to gain insights, make informed decisions, and continuously improve their operations and strategies. The specific types of statistics used by a business will depend on its industry, size, and objectives.

In addition to the ones we mentioned, the following are also used:

1. average ratios (averages, medians, modes), numerical, geometric, harmonic, quadratic, weighted, mobile
2. sampling appearing as, acceptance sampling (of materials etc), directional sampling, sequential sampling and stratified sampling
3. the normal curve for measuring central stress, measuring dispersion, deviations, etc.
4. the “variance analysis”
5. the “factor/coefficient analysis”
6. the “input-output analysis”
7. the “regression analysis”
8. the “significance testing”
   and others

Command Matrices

Matrices, in general, are representations (schematic models) that belong to the category of tables and consist of elements (numbers or letters) that are arranged in horizontal lines and in vertical columns.

Matrices are used in the organization in the event that the members of a number of work groups belong to more than one group, with the concept of allocation to several works.

The application of matrices in administration is similar and basically matrices are used:

1. for the determination of the works, on the one hand, and the responsibilities, on the other
2. for the execution of special programs, and
3. for the distribution of responsibilities regarding the produced products

Study and Analysis of Systems

A system is a harmonious, organized set, consisting of individual elements, which are interdependent, in pursuit of a goal. There are:

• the system terms
• the systems theory
• system study
• system analysis, and
• system’s approach

A systems study is the examination of what terms of systems theory will be used to assist with information, control, problem solving or decision making. In other words, the study of the system is the application of the theory of systems to practical problems and decision-making issues.

Systems analysis is the determination, evaluation and documentation of needs and opportunities for introducing new or improving existing work flows.

Every business is considered as a system, with sub-systems of its individual functions. Analysis of the system – business is the process of examining all the elements that constitute the organization, management and productive result of the business.

In the attempt to penetrate and investigate the above elements, the latest mathematical and statistical techniques are used and computers are used to process the data.

Due to the importance of systems analysis, the specialty of “systems analysts” was created, which are usually special staff of the operational administration.

Finally, the approach of the system includes the study, the analysis of the system and moreover, its programming, its configuration, its monitoring and the control of its performance.

Operational Diagnostics

The term “diagnostic” is taken from Medical science and means, identification of the form and causes of an illness.

Business diagnostics is the scientific technique, which aims to find out if the business as a whole or some sector is not functioning properly, then the reasons and causes of this poor functioning are pointed out, so that it is possible to take the imposed measures for its restoration.

Business diagnostics can appear either as preliminary – preparatory, in order to reorganize the business, or as endoscopic, to check the “health” of the business, which is done on the basis of a standard (model) of business diagnostics.

The elements used by business diagnostics are:

• the financial analysis of the business
• the export of its main ratios (figures)
• the statistical analysis of its various operations and functions (production, sales, financing, etc.)
• an interview with its executives
  and much more

Business diagnostics can be limited to a single sector of the business and appear as, financial diagnostics, which has as its main purpose the investigation of the capital structure of the business, its obligations, diagnostic evaluation of the administration, which has as its main purpose the investigation of the policy, programs, structure, control of the business, etc.

In any case, operational diagnostics includes three stages:

• the most detailed observation
• the systematic analysis, and
• the objective judgment

Business Ratios (indicators)

Numerical ratios (indicators) are relations (logs) between numerical data, taken from Statistics or Accounting, which are also expressed in numbers and give a clear picture in terms of data and situations.

More specifically, the business indicators, which are derived from the accounting and statistical data of the business (mainly from its balance sheet), give clear indications about the activity, capacity, asset structure, technical and financial performance of the business, etc. The above relations (logs) are represented in the form of a quotient and are refer to percentages.

The internal (relating to each specific business) indicators are distinguished into:

1. real, when they result from real-historical, accounting or statistical data
2. pre-calculated, when they come from pre-calculated elements
3. standards, which refer to calculated standard sizes and elements of the business, and
4. ratios – pilots when exported to be a guide for an intended purpose

Despite the risks presented by the process of extracting numerical indicators (especially in periods of monetary instability) and the difficulty of their calculation, sometimes, today they are used on a large scale and undoubtedly constitute important aids for assessing situations and making decisions.

Depending on the type of elements to which they refer, the business indicators are distinguished into:

• ratios
• labour
• technical
• financial
• economic
• costing
  etc.

All the indicators are useful for the administration so it can make its assessments and make decisions.

There is also a separate category – the management ratios/indicators, which serve particularly as performance indicators, on the basis of which the control is done by the management.

The management indicators are subdivided into financial ones, which mainly relate to income-expenditure relationships and have particular significance for shareholders, financial auditors and creditors, and operational ones, which relate to operational relationships within the company.

Interfirm Comparisons

Interfirm comparisons, i.e. comparisons between companies, allow companies’ managements to compare their operational performance and financial results with other similar companies.

The interfirm ratios (indicators) are taken as the basis of the comparisons, i.e. the comparison is made between the corresponding internal indicators of the enterprises.

In general, inter-company comparisons are considered very useful for company management, for internal control, for performance criticism and for their improvement. The relevant research is done, sector by sector, on product development, distribution, accounts and financial instruments, personnel and industrial relations and on business leadership.

Documentation

Documentation is the methodical gathering, classification and arrangement of “documents/evidence”, i.e. material objects and information (all types of elements) relating to certain phenomena and events.

Evidence as material objects takes the form of documents, records, forms and presentations. Evidence such as information can be obtained orally, through written communication, from mass media, etc. and they take on a specific status with their registration.

Evidence, in any form, is gathered with the aim of evaluating and exploiting it, so that it can be used to the greatest possible extent.

The collection of evidence depends on the objectives pursued, on the sources used and on the institutions that carry it out.

Businesses collect evidence about the market, competition, substitute products, technological methods and systems of organization and management, marketing, production, etc. Sources of evidence are individuals, forms, broadcasts, publications, reports, and even unconfirmed rumors.

The gathering of the evidence is followed by their classification, which is the methodical distribution and classification into categories, subcategories, groups, etc.

The classification is accompanied by the arrangement of the evidence, which is the methodical and systematic placement of the elements, based on the previous classification, in such a way that it is easy to use them.

Mechanization

Mechanization is the use of machines in office work or otherwise the mechanization of office work with the aim of assisting, accelerating, consolidating and perfecting those tasks that are of particular interest to business management.

The mechanization of office work has three aspects:

1. the technical, which consists of the selection of the most technologically suitable machines and the organization of their use by suitable personnel, is called mechanical organisation
2. the economic, which consists of the study of investment in machines, in relation to the intended and expected results, and
3. the social, which consists in examining the human and social effects brought about by the introduction and use of office machines.

Criteria for the decision to use such machines are:

1. increasing the productivity of office work and tasks
2. their qualitative improvement
3. their most economical execution in relation to the already applied method of execution.

Office machines are classified into the following categories:

1. communication machines
2. control and safety machines
3. machines for arranging and filing records and data
4. recording and reproduction machines
5. calculators
6. accounting machines
7. punched card machines
8. electronic calculators or probes of various forms and types
9. electronic computers

The Competitive Strategy

Competitive strategy aims to maximize a firm’s proportional share of a limited profit achieved by one or more competitors.

Creative Thinking

Creative thinking means cultivating the subconscious disposition for problem solving and decision making.

Decision Dynamics Training

This educational approach is used in groups of leaders, from which, with group meetings and discussions, more successful decisions are made.

Executive Research

The specific technique studies the most effective selection of leaders who will promote and upgrade the management of the enterprise.

Group Dynamics

It is the study of the interaction of the individuals of a group in their behavior, as well as the study of the behavior of groups, in general.

Improvement Techniques

These are a set of administrative techniques that aim to improve the performance of a system.

Industrial Democracy

This technique approaches the management of industrial enterprises to their personnel, with the aim of involving the personnel in decision-making.

Labour Control

This technique focuses on the control of the total remuneration of the staff (labour costs) with appropriate procedures and documentation.

The Bibliographic Review/Survey

It is a technique of searching and gathering bibliographic data related to a problem.

Administrative Development

It is a set of techniques, which are used with the aim of ensuring that all the administrative staff of the company are in a position to successfully handle the problems of their position.

The Administrative Services

These aim at the creation of an internal administrative consulting service within the organization of the enterprise.

Manpower Performance Analysis

It is the technique for measuring efficiency based on a specific standard.

The Markov Chain

It is a network of elements of a situation, from the past, the present and the future and whose future change probabilities are independent of previous situations.

Network Analysis

This is a set of techniques, which display the information as a network, which also includes the logical interrelationships (time, sources, cost) for the planning and control of the works and projects.

The Office Layout Plan

It is a specialized technique for an office design, with the aim of maximizing the performance of the work in it.

Organization and Methods

This technique is applied by an administrative department whose purpose is to increase administrative efficiency within an organization by introducing improved processes, methods and systems, communications, control and organizational structure.

Procedure Study

It is an almost continuous study, with the aim of ascertaining the performance of an administrative system.

Sequencing

It is a number of optimization techniques, which aim to determine the best sequence of actions.

Suggestion Schemes

These are means to encourage the employees, to make suggestions for improving the company’s productivity.

System “4”

This highlights the forms of groups participating in the organization, which is done with 4 systems:

1. the executive power
2. power with kindness
3. the advisory system, and
4. the system with participating groups

Theory “Y”

It is a model of motivation for the staff, for their active approach to the goals of the organization.

Venture Analysis

It is a planned team approach to developing a new and potentially profitable venture.

Business Planning – Budgeting

The planning of the enterprise is done by drawing up its “action plans”, both specific (partial) and general.

Planning implements in practice, the element of management that we call “prediction”, but at the same time it also serves the other main elements of management (organization, direction, coordination and control) in such a way that it is considered a valuable and necessary management tool.

The budget is the numerical expression of business planning, and is distinguished into general and partial or special budgets.

The Importance and Usefulness of Business Planning

The utility of business planning is multiple:

1. the objectives pursued by the enterprise are clearly defined, both in total and in sections
2. unity of action directions and harmonization of persons and actions is coming
3. a reduction in cost is caused, because the fuller use of personnel and available means/resources is ensured
4. production activity increases
5. administrative decentralization and the transfer of responsibilities are supported
6. the control of the operational action is facilitated
7. favorable effects are created in the psychology of the staff

Prerequisites for the Application of Business Planning/Programming

The application of business planning in practice is a contemporary organizational and administrative technique, the success of which depends on certain assumptions. These are divided into:

1. assumptions of a general nature (international normality, internal political stability, monetary stability), and
2. prerequisites of a special (intra-business) nature, such as: a) the appropriate administrative organization of the business, b) the keeping of statistical data, c) the existence of an accounting plan and the complete accounting organization, d) the rational organization of the production function and of marketing, and e) the willing participation of the staff in the preparation of the programs and their application in practice.

The Action Plans/Programs

Drawing up an action plan for the business means, based on forecasts, charting the course of the business for a future period of time.

The elements that constitute an action plan are:

1. the forecasts, which are made in accordance with the data of the past, the elements of the present and the indications for the future
2. the establishment of targets to be achieved by the business based on the above forecasts for a certain period of time, and
3. the provision of the necessary and appropriate means for the realization of the goals set.

Various distinctions are made between the action programs/plans.

Thus, depending on their extent, we distinguish:

1. the general program of the enterprise
2. its special or partial (operational) programs

Depending on their importance, we distinguish:

1. the main action plans (marketing, sales, production, financial)
2. secondary programs (shopping, work, investments, etc.)

Depending on their duration, we distinguish:

1. long-term programs (3-10 years)
2. medium-term programs (1-3 years)
3. the programs of short duration (quarter or month), to which the annual programs are distributed.

The action plans most commonly drawn up in contemporary businesses are:

1. the marketing program/plan (basic)
2. the sales program/plan (basic)
3. the production and supply chain program/plan
4. expenditure programs (sales, production, purchases, administration)
5. the investment program
6. the financial program
7. the general or centralized program, which is a synthesis of the previous ones.

Here I want to underline that all the action programs are interconnected and each one is based on the previous ones.

Business Budgeting

The operational budget is distinguished into general and partial or special budgets. The general is a combination of the specialists, which are the estimates of sales, production, marketing, purchases, stocks, expenses, investments and the financial.

The basis of the entire system (as in business planning) is the sales forecast, because it covers the main part of the income.

And knowing this estimate, the other estimates are drawn up, because from what quantity of products is expected to be sold and the income from these expected sales determines the rest of the company’s budgets – what will be produced (in quantity and quality), what must be bought for this production, what will be kept as stock, what will be available for investments, what will be the company’s expenses and what will be its cash flow.

Budgetary Control

The pre-budget control, also called verification control, is the main objective of the application of the business budget, which basically consists of a comparison between predicted goals and realized goals, within a period of time.

Specifically, the pre-calculation audit consists of:

1. comparison of the income and expenses that were budgeted, with those that are realized and export of “indicators” based on which deviations are quantified
2. search for the causes that caused the deviations
3. revision or adjustment of the estimates prepared, based on new data, and
4. control of the activity of the entire enterprise and of each of its sectors.

The advantages of budget control are:

1. brings more economical use of the means of production
2. prevents waste
3. requires an effective organization of general accounting and costing (the application of the “standard cost” greatly facilitates the preparation of the business budget)

Regarding financial management:

1. regulates expenses within the limits of income
2. determines in advance the financing, in terms of size and time
3. creates a favorable climate for credit banks

Regarding commercial management:

1. compels the business to apply consumer market research
2. leads to the development of the most effective sales promotion action

Regarding the organization:

1. determines the extent of responsibility of each function, organ and body
2. ensures the coordination of operations/functions

Regarding the general policy of operational management:

1. forces the administration to modernize the methods
2. constitutes the compass in the course of the enterprise
3. it is an objective means for judgments and comparisons, and
4. gives the danger signal, by highlighting the deviations between the targets that were pre-calculated and those that were realized.

Graphic Illustrations – Diagrams

Diagrams are generally graphic representations (tables) that depict situations or actions. The diagrams used in businesses are graphic representations, with which figures, numerical elements, situations or actions related to the business are formed into shapes.

Any verbal or written detailed description, e.g. report, no matter how detailed it is, cannot give a clear and clear picture of an existing situation. In contrast, diagrams combine functionality, clarity, simplicity and brevity. For their advantages, these are considered as adapted to the spirit of the organization, and they are important “tools” in the hands of operational management.

The diagrams used by contemporary businesses are statistical and organizational.

Statistical Charts/Diagrams

These are graphical representations of the statistics collected. They appear in static and dynamic form. Statics refer to a certain point in time. Dynamics combine, visualization of elements and time evolution.

The most commonly used static diagrams are:

1. pie charts
2. the bar charts
3. the column charts
4. histograms (depict frequency distribution)
5. the curves (they also depict a frequency distribution)
6. the diagrams of probabilities or draws (Bernoulli, Borel, Poisson, etc.)
7. cumulative static diagrams or arcs (depict comparatively similar distributions)
8. concentration or Lorenz curves (used for pooled comparisons)
9. cartograms (depict elements on a geographical map)

The most commonly used dynamic diagrams are:

1. the spirals (a periodic phenomenon is depicted throughout the year)
2.  cumulative dynamic diagrams (used with time extension, mainly for checks)
3. the schedules (depict with polygonal shapes and lines the quantitative manifestations of a phenomenon over time)
4. the horizontal diagrams (bar or spikes) that show, with lines, dots or spikes, size evolutions over time
5. the type charts, with which it is done, with forms and designs, a comparison of two sizes, as they evolve over time
6. square diagrams, which can represent the evolution of four variables
7. the triangular diagrams for three variables
8. the stereograms (depict the common distribution of two characteristics, which is given in double input tables)
9. semi-logarithmics (of which the vertical axis depicts logarithms and the horizontal, numbers)
10. the logarithmic diagrams (whose two axes, vertical and horizontal, depict logarithms)

Organisational Charts/Diagrams

Organizational charts schematically depict organizational situations and activities, with their components, structures and connections.

It is accepted that any organizational situation and action must be able to be depicted in a diagram. If this is not possible, it means that it is wrong. If, moreover, the diagram that will result from the depiction of an organizational situation or action is unclear, this means that the organization is flawed and in need of reformation.

From these we can conclude that organizational charts not only contribute to the formation of a direct and clear understanding of an organizational situation or action, but also form the basis for the study of organizational phenomena, i.e., the charts are the starting point of the organizational control of business and the prerequisite for any reform work (reorganization).

Organizational charts are distinguished into:

1. static (depict an organization as it is at a certain point in time)
2. dynamics (depict organizational activities and developments over time)
3. analytical (refer to analysis of structures, situations and actions)
4. synthetic (concern the synthesis of structures, states and actions)
5. historical – real (depict an organization, static or dynamic, as it really is)
6. planned or proposed (constitute a plan and proposal for an organization, static or dynamic, with an ethical consideration).

Bowman and Fetter distinguish organizational charts into:

• traffic
• multi-activity
• performance of work
• communication (information circulation)
• adaptation
• Gannt
• in the form of a “case”
• the main organizational charts

Salet and Voraz distinguish organizational charts into:

• organizational structures
• traffic
• connection and control (Hymans, Planus, Scon diagrams)
• check traffic times
• harmonogrammes, showing the optimal use of workers and materials over time
• networking (continuity of activities and their sequential order)
• work/labour programs

R. Caude distinguishes organizational charts in:

• facilities
• organograms or organizational tables, with which the company’s organs are represented in hierarchical order
• sociograms, which express ideal relationships, such as the decision-making process with the participation of certain factors.

Nordsieck distinguishes organizational charts into:

• allocation of works
• division of the enterprise into organs and entities
• allocation of functions

Walb distinguishes organizational charts into:

• allocation of works
• structural distribution of the business
• operational, with the definition of their responsibilities and positions
• division of labour
• work flow
• movement of persons or things
• tables that show human or mechanical activity, within a specific space and timeframe

Static organizational charts are distinguished into:

1. organizational charts of the layout of the workplaces – plant layout/allocation charts
2. job position allocation charts
3. personnel allocation charts
4. economic state charts
5. organograms or organisation charts, or organisation plan regarding the structure of the business as it is at a certain point in time

In dynamic organizational charts, a combined representation of activites or movements of persons and things (materials, products, documents) is made with the factor “time”.

Diagrams of this form are:

1. the structuring tables of the labour supply during the development of the production process
2. the work flow diagrams in function of the “time” factor
3. the circulation diagrams (persons, materials, records/documents)
4. the staff’s time employment charts
5. forecast charts (setting objectives for achievement at different points in time)
6. control charts (comparison between forecasts and realizations
   etc.

Some special dynamic organizational charts are named after their originator, such as:

1. the Gilbreth diagram, also called “two handed process chart”, which refers to the movements of workers and the time of manual work
2. the Gannt diagram, also called “outline scheduling of productive process”, which is a diagram of distribution, employment and route during the execution of the production work and depicts the work being carried out and the time required for it, and it is a serious means of control
3. the Adamiecki diagram, also called a harmonogram, which schematically represents, on the one hand, the organizational structure and on the other the relationships between the individual sections and contributes to the coordination of activities and operations within the enterprise
4. the Blake-Mouton diagram (managerial grid of R.R. Blake and J.S. Mouton), which represents the combined goals of management in terms of production and goals in terms of human relations and shows with degrees the orientation of management in terms of these goals
5. the Hymans diagram, which represents the circulation of records/documents in relation to the work positions through which they gradually pass
6. other circulation diagrams (which depict it in chronological order), which are titled with the name of their inspirators, are the diagrams of Louis, Planus, and B.G. Scon

Other Types of Charts and Diagrams

• Line Charts: These charts show trends and changes over time, making them useful for tracking performance metrics, sales data, and other time-series data.
• Scatter Plots: Scatter plots display individual data points on a two-dimensional axis, showing the relationship between two variables.
• Histograms: Histograms are used to represent the distribution of data and show the frequency of data points within specific intervals.
• Radar Charts: Radar charts (also known as spider charts) compare multiple variables in a two-dimensional graph, showing the data in a circular pattern.
• Heat Maps: Heat maps use color-coding to represent data values on a matrix, providing a quick visual summary of patterns and trends.
• Bubble Charts: Bubble charts display data points as bubbles on a graph, with the size of the bubble representing a third variable.
• Waterfall Charts: Waterfall charts illustrate the cumulative effect of positive and negative changes on a starting value, making them useful for financial reporting and budgeting.
• Flowcharts: Flowcharts depict a process or workflow with different shapes and arrows to show the sequence of steps and decision points.
• Funnel Charts: Funnel charts represent the stages in a process, showing the progressive reduction of data or customers as they move through the funnel.

These are just a few examples, and there are many other types of charts and diagrams that businesses use to communicate information effectively and make data-driven decisions. The choice of chart depends on the nature of the data and the message the business wants to convey.

The Organizational Chart of the Business Structure

It is the main organizational chart or static organizational chart, which gives the anatomical image of the business and shows its horizontal and vertical development, with a clear definition of its various organs and with a clear display of the levels of the hierarchical scale, with a clear definition of responsibilities, authority and the responsibility, the extent of the control of superlative adjectives in subjective positions and with a clear definition of the role of each body (staff, executive, administrative).

The initial purpose of drawing up the organization chart of the business structure is to present a relief of the image of the business. Other purposes are, the appearance of the division of the enterprise into sections and organs, with the horizontal and vertical position and relationship of each of them. In this way, each person, according to the body to which he belongs, knows his exact position from the point of view of rank, responsibility and specific work, the confusion of responsibilities is excluded, supervision and control are facilitated and it is shown to the subordinates what the course is for the higher levels.

According to Lobstein’s opinion, the organizational structure chart only partially gives the image of the business and for this it must be supplemented with three tables, the functional one, the cooperation table and the connection table.

The main purpose of drawing up the organization chart is to compare the structure that appears in it with a standard structure, in order to identify and correct any organizational errors, omissions, exaggerations, etc.

Contemporary Management

Theories about business organization have evolved over time. The main theories were:

• the functional organization
• of the formal organization
• the human factor
• of decisions
• the scientific preparation of decisions using quantitative methods and operational research
• of behavior
• of communications
• of the systems
• management based on goals and objectives
• of motivation and motives
• participation and collective management
• strategic management
• the administration of the product or based on the products
• risk management
• of the administration in a period of crisis
• management based on results and for results
• management with programming and pre-calculation control

Management: Factors and Transformations

The factors that make up management are “the six M’s” from the initials of these words:

1. Men/humans
2. Materials
3. Machines
4. Managers
5. Money/capital
6. Market

The transformations of management over time are due to:

1. the knowledge (education – training) of the administrators
2. the evolution of information technology (IT) informatics
3. the quantitative techniques used by business management
4. the creation of new categories of managers (marketing managers, production managers, auditors, etc.)
5. expansion of the role of managers (in the business, social, financial, public administration, educational sectors)
6. the different consideration of personnel problems
7. the changes presented by the external environment of the business (state, public organizations, trade unions, consumers, shareholders) as well as the natural environment (pollution, degradation).

Expansion of the Basic Functions of Management

We referred above to the main functions of business management:

1. Programming/Planning
2. Organization
3. Management/Administration
4. Coordination and Control

With the latest evolution of concepts and perceptions, the basic functions of management have been expanded and the following were added to the classic functions:

1. Staffing
2. Motivation and Incentives
3. Creativity
4. Innovation
5. Productivity
6. Management of Information Systems (MIS)
7. Optimization of Audit/Controlling Procedures

Staffing

The selection of executives is one of the main objects of contemporary management. Executives are generally the persons who hold managerial positions at all levels of the company. Their characteristic is that they have the right to make decisions, issue orders and take initiatives.

The highest position is held by the top management (chief executives), at the next level are the senior management (senior executives), such as the managers of the main business sections (production, marketing, finance), followed by the middle managers (middle executives) who are directly below the previous heads of sub-sectors ( e.g. deputy directors), after them come the lower administrative officers (junior executives) who are in charge of lower subsections (departments, services, offices).

Motivation – Incentives

Today, motivation is almost generalized and it is not just a matter, but the primary duty of the administration to implement it.

Contemporary motives, apart from the material satisfaction of the employees, the application of good relations and favorable environmental conditions, their participation in decision-making and management, in general, are considered:

1. the absolute compliance of the administrators with the relevant legislation
2. the enjoyment of satisfaction by the employees of their own work (due to favorable terms and conditions)
3. the satisfaction from work apart from the vital needs and other, higher level (psychological, social)
4. the expectation that every progress and success of the enterprise will mean their own participation in its results
5. the perception that there is coming an equalization of roles and power between employees and employers or managers
6. the way leadership is exercised by executives in general and in particular by those with whom they are in direct contact (foreman, team leaders, supervisors)

Creativity

It is the ability (along with the desire and tension) of man to create, either by conceiving ideas whose implementation has favorable results or – and mainly – by executing works (whose idea is also conceived by the same person) that have such results.

Creativity has as its infrastructure an innate ability. This is cultivated in practice with acquired elements (knowledge, relationships, experience) and the creative person is formed.

Contemporary management relies, to a great extent, on the creativity of its officials. The right managers must have imagination, appetite, passion for creation, to think in order to find the appropriate and convenient, in each case, solutions, which they can implement in collaboration with the other executives and all the employees within the company. In parallel, they must cultivate, encourage and reward all those who show a creative spirit, whom they must present as examples for imitation.

Innovation

Conception and application of innovations is the peak manifestation and extension of creativity.

Innovation is the practical application of original ideas, methods, inventions and patents, which can be economically exploited in the context of business.

The great economist J. Schumpeter believed that innovations are the main characteristic of dynamic entrepreneurs, who stand out for their organizational and technical skills and who direct the entire socio-economic productive function with their actions.

Today, innovations are given great importance and they are considered to belong to the basic tasks of administration.

Professor P. Drucker wrote in 1974: “The two main functions of business are, marketing and innovation, because these create results, while the others cause expenses. Profit is not the cause, but the result of the performance of marketing, innovations and productivity”.

Innovations can be applied in all areas of business activity (production, marketing, purchases, human relations, organization, administration).

The reasons that lead to them are:

1. the pursuit of improving the efficiency (work cycle, profits) of the enterprise
2. its development and expansion
3. the pressure of competition
4. the tension for integration, progress and the favorable prospects
5. the feeling of respect and obligation towards the consumer community

Sources of innovations are:

1. research, i.e. the methodical search for new elements and finding ways to utilize them and (especially for business), applied research, which leads to the discovery and invention of new elements that will have a beneficial effect on the performance of the business (from every point of view ). To support the innovation effort, large industrial enterprises form an independent staff group (services or research department) that deals with research, both in the technical field (production) and in others.
2. technology and especially technological forecasting. Like all activities, especially industrial ones, they focus their interest and efforts on technology, with an emphasis on the forecasting of technological developments, so that the specific business that succeeds in getting ahead and dominating the competition. Thus, technological innovations play – and will play – a primary role in global industry.

The innovations are distinguished in:

1. planned (intended and implemented by design)
2. unplanned
3. radical (with very big meaning)
4. routine (unimportant)

The procedure for implementing each innovation is as follows:

1. decision on its application
2. gradual implementation in practice (initial stage – intermediate – final with its full implementation)
3. measuring the results of the application
4. assessment of possible reactions to the innovation (from the staff, from the consumers, etc.)

Factors that influence both the decision and the implementation of an innovation are:

1. the cost of its application
2. the potential risk and uncertainty caused by its application
3. the necessity or expediency of its application, compared to the pre-existing situation
4. its financial performance

Productivity

Productivity is a measure of the efficiency with which resources are utilized to achieve goals or produce goods and services. It’s a broad concept that encompasses various aspects of personal, organizational, or systemic efficiency. Here are key elements that contribute to the overall understanding of productivity:

• Output vs. Input: At its core, productivity compares the output (results, goods, or services produced) to the input (resources, time, labour, and capital) used in the process. High productivity implies achieving more with the same or fewer resources.
• Efficiency and Effectiveness: Efficiency refers to the ability to perform tasks with minimal wasted resources, effort, or time. Effectiveness relates to the ability to achieve desired outcomes. Productivity seeks to optimize both efficiency and effectiveness.
• Time Management: Time is a critical factor in productivity. Effectively managing time involves prioritizing tasks, minimizing procrastination, and ensuring that activities contribute to overarching goals.
• Resource Allocation: Productivity involves allocating resources (human, financial, technological) in a way that maximizes output. It’s about making strategic decisions to optimize the use of available resources.
• Continuous Improvement: Productivity is not a static concept; it involves a commitment to continuous improvement. Organizations and individuals should regularly assess processes, identify inefficiencies, and implement changes for better performance.
• Quality of Output: Productivity isn’t solely about quantity; it also considers the quality of the output. Producing more goods or services is valuable, but maintaining or improving quality is equally important for long-term success.
• Innovation and Technology: Leveraging innovation and technology can significantly enhance productivity. Adopting new tools, automation, and efficient processes contributes to better performance.
• Goal Alignment: Productivity should be aligned with organizational goals. It’s not just about being busy but about activities that directly contribute to the mission and vision of the individual or organization.
• Employee Engagement: In a workplace setting, employee engagement is closely tied to productivity. Engaged employees tend to be more motivated, committed, and productive.
• Balancing Resources: Balancing the use of resources involves considering trade-offs. It may not always be about doing more; sometimes, it’s about doing the right things efficiently.
• Adaptability: Productivity is also linked to the ability to adapt to change. In a dynamic environment, being able to adjust strategies and processes quickly is a key aspect of productivity.

In essence, productivity is a multidimensional concept that involves optimizing processes, managing resources effectively, and achieving desired outcomes efficiently. Whether applied to individual tasks, organizational processes, or the functioning of an entire economy, productivity is a key driver of success and competitiveness.

Productivity in the Context of Business

Productivity in the context of organizational and administrative skills for business owners refers to the efficient use of resources to achieve maximum output and results. It involves managing time, tasks, and processes in a way that enhances efficiency, effectiveness, and overall performance. Here’s a breakdown of key aspects related to productivity for business owners:

• Time Management
• Task Delegation
• Workflow Optimization
• Goal Setting
• Effective Communication
• Technology Utilization
• Continuous Learning and Improvement
• Employee Engagement
• Strategic Planning
• Adaptability
• Effective Decision-Making

In summary, productivity for business owners involves a holistic approach to managing time, resources, and processes. It’s about creating a well-organized, efficient, and adaptable business environment that can navigate challenges and capitalize on opportunities.

Management Information System (MIS)

The MIS system is based on the computer-based information system (CBIS).

The performance of this system is a function of:

1. the hardware and software of the computer, i.e. the possibilities of inputting, processing and storing elements (data) that the computer has
2. the behavioral variables of the people (degree of contribution of managers, executives, workers and especially computer operators to the smooth operation of the system)
3. the variables of organizational structure and structure (position and role of the data processing function within the organizational-administrative structure of the enterprise)
4. environmental variables (position of the business in the market, reactions of customers and competitors, effect of external regulations and interventions)

The computerized management information system assumes:

1. the existence of a central data processing unit with great capabilities for gathering and storing data
2. the connection with it, with the system of direct information (online), separate units in each sector and especially in the administration
3. the possibility of receiving information (input) directly from the administration, from each sector and synthetically processing it for decision-making
4. the possibility of channeling information (output) from the administration to the individual sections with elements either intra-business or extra-business
5. the exercise of control of the activities and results of all the individual sections with elements that are taken and given by the computer (input – output)

Optimization of Audit/Controlling Procedures

Control within the enterprise appears in three more specific forms:

1. control in general of people and things
2. accounting-financial control, special audits
3. control with confirmation (checking)

With the expansion and widespread use of modern automated mechanisms and especially with the dominance of cybernetic and investigated systems, control is entering a phase of technological perfection.

The exercise of financial/accounting control shaped the newest science and technique – Auditing and the role of the superior supervisor of these two functions (controller).

The Audit Department is divided into two parts:

1. in establishing auditing standards, and
2. in the application of audit procedures.

With the extension of the simplification and standardization (based on standards) of the functions, a control table has been established with confirmation that is applied in practice by the business administrations.

This table includes the following items to check with confirmation:

A. For the administration:

1. the course of development and expansion of the business
2. the measure of application of the objectives
3. the degree of use of collective bodies (participatory, advisory, coordinating)
4. the use or non-use of final organs/bodies (groups or individuals)
5. the application of the latest management techniques and the use of computers

B. For personnel and work relationships:

1. the application of work simplification, work flow, work study, work standardisation, work analysis, work description, work expansion/enlargement, work instruction, work specialization, work evaluation, and the quality of the work.
2. the application of psychotechnical tests (job tests)
3. the participation of employees in decision-making
4. the establishment of incentives for employees and their performance
5. everything that concerns the organization of the staff
6. the information of the employees
7. guiding the staff with manuals and brochures
8. the utilization and performance of “personnel advisors”
9. the contact with the trade union organizations of the staff
10. the organization and performance of health programs, safety programs, entertainment programs, social projects programs, etc.

C. For production:

1. the establishment and observance of production standards and production costs
2. the application of work planning
3. the degree of productive use of the facilities
4. the normal (planned) maintenance of engines, machinery and internal means of transport
5. the cause and extent of emergency repairs
6. maintaining the necessary stock of spare parts and accessories
7. the study for the use of new technology

D. For marketing:

1. sales planning and forecasting
2. keeping statistical and comparative data on sales
3. the degree of implementation and the results of consumer market research and monitoring
4. the smooth connection of production with sales
5. the verification of the results of the advertising and promotion of the products
6. the effectiveness of the used “channels” of distribution and the study of their change
7. sales performance (in direct sales)
8. the training and utilization of new salespeople
9. the success or failure of the packaging (in terms of safety, visibility and attractiveness)
10. the performance of the applicable mode of transport (of materials to the factory and of products to intermediaries for sale)

E. For storage:

1. the fluctuation of the inventory of raw materials, various materials and products
2. the maintenance of the necessary minimum stock of raw and various materials and the possible and feasible (with a tendency towards the best)
3. the performance of the applied system of internal movement of raw and various materials and products and the study for its replacement with another, more efficient one

F. For purchases/supplies:

1. the application of purchasing planning from the point of view of quantity, quality, price, purchasing method, transportation method
2. the observance of the quality specifications for the materials purchased
3. the execution of orders (order time – compliance with the instructions given – delivery time)
4. the performance and general behaviour of suppliers
5. the study of the applied purchases/supplies system and its possible change

G. For the financial function:

1. the application and results of budgetary control in sales, production, purchases and investments
2. the calculation of the economics of new or planned investments
3. the position of the enterprise from the point of view of long-term, medium-term and short-term obligations
4. the discovery of new sources of capitalization
5. the course of the share price on the Stock Exchange
6. the state of the business from the point of view of working capital
7. the formation of the cash flow
8. the export of ratios for the financial elements of the enterprise
9. monitoring the company’s tax obligations

H. For the accounting function:

1. the monthly balances and the final balance
2. the preparation of the balance sheet and the results of use
3. the analysis of income – expenses and industrial accounting (costing)
4. the export of accounting ratios for asset (fixed and current) and liability (mainly liabilities, i.e. obligations to third parties and net position of the company)

I. For office work:

1. the application and observance of performance standards
2. the use and performance of computerization
3. the modernization of the offices from the point of view of environmental conditions (ventilation, lighting, heating) and furniture (use of the appropriate desks and seats in the appropriate arrangement)
4. the standardization of documents/records and their classification and arrangement with the help of special technological means and methods

Main Responsibilities of the Collective Top Management

There are certain responsibilities that belong exclusively to the collective top management, regardless of the form in which it is exercised (e.g. the board of directors of a public limited company or an anonymous company, with members elected by the shareholders and others by the employees, the board of directors of cooperatives, etc.).

In the case of sole proprietorships, there is no such collective body, just as in personal companies (in which the partners decide) and in limited liability companies (in which the shareholders decide).

The responsibilities that I will mention below are of such a form, that they mainly concern medium and large enterprises, which today, as a rule, are Public Limited Companies.

These are the responsibilities:

1. setting goals and objectives for the business
2. the strategy of the business (business strategy)
3. the basic policy of the enterprise (business policy)

Setting Goals and Objectives for the Business

Goals or objectives are the basic pursuits of the business that have stability, duration and perspectives.

These main objectives are:

1. the achievement of profit and for some the maximization of profit
2. survival in competition
3. the significant expansion of the work cycle
4. cost compression
5. the production of goods (products or services) needed by society as a whole
6. the creation of a favorable climate for business in general (public opinion, consumers) or specifically (banks, public authorities)
7. the future expansion and development of the business

Targets are partial goals that fit within the framework of broader objectives:

1. the increase in sales even in a limited area
2. the use of specific technological means that reduce the cost of production or improve the quality of the products
3. carrying out investments to replace or supplement the facilities
4. the use of new channels for business purchases/supplies
5. other methods of transporting the materials and materials to the factory
6. and more

The collective body that exercises the highest management is always responsible for setting (and monitoring the pursuit of) the company’s objectives, and from the individual targets it has responsibility for the most important ones (such as, for example, investments in the company). They authorize and set most of the goals, according to the conditions, the occasion, and other factors, the top manager (director or general manager) but, they inform the collective body, both about their decisions and their results (current decisions or routine decisions are excluded).

Peter Drucker among the main purposes of the collective leadership of the enterprise includes innovations, the formation of managers and the public responsibility that the enterprise has (toward the social whole and the state).

Business Strategy

The term “strategy” is taken from Military Science and means the set of coordinated efforts/operations and management to achieve an objective.

There is a general operational strategy and in its context the individual strategies, main or major, minor, composite and occasional, are formed.

The main or major strategies are distinguished into:

1. disengagement strategy (e.g. limiting the variety of products produced to the most efficient ones)
2. conquest strategy, with diversification or development of production (diversification means choosing different types of products and development means expanding and enlarging production)

The collective body of the top management is responsible for taking decisions on the general and major strategies of the enterprise and for approving other strategies, as well as “strategic planning”.

Strategic planning has the concept of determining the long-term objectives of the business and concerns the assessment of the business situation in relation to the market, the environment and the existing prospects, the preparation of the business portfolio and the analysis of the gap (calculation of contingency of profits that the business must realize in order to reach the desired level of profits that was set as its goal).

The application of the business’s strategies in practice is done with its tactics and politics.

Tactics is the process of achieving the short-term goals or partial goals that are set for achievement, in relation to the available means (this is also a term of military science). This is assigned to the top managers who inform the top/supreme collective management body in general terms.

Business Policy

The drafting of the basic policy is also the responsibility of the collective top/supreme administration and the most contemporary concepts for this are:

1. politics sets the framework for making business decisions, in relation to the objectives and the basic strategy of the business, i.e. politics is the guide that directs the making of decisions
2. today’s business policy is not so much a set of rules for the behaviour of managers, but a means of encouragement and assistance in making decisions
3. politics is based on a law that establishes a situation, which remains unchanged under given conditions
4. there is a “symbol of faith” or creed that is a foundation for the development of politics
5. a procedure is followed regarding the fulfillment of a work. Procedures generally emphasize details. Politics is about the general directions.
6. politics draws directions. The practice handles the problems in the context of its politics.

Business politics can be:

1. genuine (original), i.e. it comes from the free will of those who have authority over it
2. mandatory or imposed by external agents such as public administration or a commercial organization
3. revised after an objection (appeal) from a (even lower) executive, if the previous one had proved that it did not cover a specific case
4. compliant, i.e. self-evidently applied, when there is some relative continuity, duration or repeatability of application.

The policy must ensure the following conditions:

1. to serve a certain objective
2. to be explained and analyzed to all the persons involved in its application, in a manner understandable by all
3. to define frameworks and criteria for future actions
4. to be flexible and adaptable
5. to be applicable

Modern Systems of Management Practice

Many have emphasized, first and foremost Professor Peter Drucker, and everyone understands it, that management is more art and less science, it is more practical than theory.

For this reason, it is particularly important here to emphasize certain systems of contemporary management practice:

1. management based on objectives and goals (MBO)
2. results-based management or management by results (MBR)
3. management by systems (MBS)
4. management for results (MFR)
5. management by applying the principle of exception – by exception (MBE)
6. management by planning – programming (MBP)
7. management by budgetary control (MBBC)
8. product-based management or management by product (MBPR)
9. risk management
10. management in a period of crisis or crisis management
11. mechanistic and organic management
12. managerial/administrative grid

Roles of the Highest Administrative Positions

According to contemporary – but also older – concepts, the highest administrative positions held by individuals are the General Manager or Managing Director and the Heads (General Managers or Directors) of the production sector, the marketing sector, and the financial sector who also appears as a Controller.

Role of the Top Manager

The top manager (General Manager or Managing Director or CEO) is the highest executive body of the collective top management (e.g. board of directors of an anonymous company). Their role is:

1. the proponent of defining or re-defining the company’s objectives (long-term) and its main (short-term) goals
2. It defines the strategy, tactics and policy/politics of the business
3. has a decisive opinion in the preparation of the action plans/programs and the budgets of the enterprise
4. defines the responsibilities of the key executives (senior managers or senior executives) to whom it also transfers its own responsibilities, for the sector they manage
5. has a primary role (giving instructions – setting an example) in shaping the company’s communications, and human and public relations
6. chooses the organizational system for structuring the business (line – executive) and clearly defines the responsibilities of the executive bodies (individual – collective) to avoid conflicts and confusions
7. defines the role of collective advisory and opinion-shaping bodies
8. implements the decentralization of responsibilities (by assigning responsibilities to the relevant positions) and the decentralization (by area) of activities/functions
9. has a primary role in implementing the coordination of all activities and maintaining the principle of unity of direction
10. represents the business in public authorities, organizations and courts
11. chooses the key executives who are also his direct collaborators
12. takes the lead in motivating the staff and establishing incentives to increase their performance, as well as the implementation of their various forms of participation
13. applies, with the use of the appropriate people (staff) and technological means (computers), the mathematical and statistical techniques that assist the work of the administration, in making the most appropriate, as the case may be, decisions
14. checks and controls with technological means and based on data the activities and performances of the various sections of the business and the head managers and carefully studies the findings of the special executive – auditors
15. applies the modern systems of management practice that I just mentioned above
16. has daily and continuous updates on current issues and the performance of the main sectors
17. is the rapporteur of all the topics discussed in the Board of Directors
18. prepares the account and accountability of the management to the supreme body of the Company, the General Meeting of Shareholders, to which it provides any requested information

Role of the Financial Manager (CFO) or Controller

His position is neuralgic (extremely important):

1. has the supervision of the financial sector (discovery, distribution, allocation of capital) and the accounting sector (which records, interprets and illustrates all economic transactions)
2. monitors the financial situation of the business (short-term and long-term obligations, net position of the business, working capital, cash flow – liquidity, demands of the business, financial course of investments)
3. compiles useful numerical indicators for the relationships of economic quantities
4. has a primary role in the preparation of the budgets (of the individual sections and the general) of the enterprise, points out the deviations that may occur, and seeks, in cooperation with the managers of the respective sections, to adjust them
5. ensures the regular fulfillment of the company’s various tax obligations
6. systematically monitors the formation of the cost, by positions (functions), by bodies (objects) and by phases (initial, industrial, financial, commercial, administrative and total) and intervenes where excesses are noted
7. works closely with production, marketing, and personnel managers on values, compensation, and expenses
8. with the marketing manager determines the sales prices of the products and the terms of sales (grant of credits, etc.)
9. supervises the Accounting Department, monitors the balance sheets and the preparation of the annual balance sheet and income statement (profit/loss)
10. monitors the course of the company’s shareholders on the Stock Exchange (if they circulate on it) and the configuration of the company’s securities portfolio (shareholders of other joint-stock companies and bonds)
11. regularly reports to the top manager (at the managers’ meeting or outside it) and exceptionally when necessary, data on the financial situation of the business and recommends to him the appropriate measures to be taken in his opinion – and as the case may be
12. deals with intra-firm longitudinal and inter-firm comparisons to draw useful conclusions
13. monitors the most essential economic statistics (within and outside the company), the economic situation (international and national), the formation of economic conditions specific to the business sector and economic forecasts (general and specific)

Role of the Production Manager

The production manager is in charge of the production sector, which includes the production means (main and auxiliary), the product (design, configuration) or the products (varieties, categories, types) and the control of the production process and quality:

1. prepares the full integrated technical production design regarding the plant layout (factory space), the mechanical equipment and requirements and the design of the production process
2. draws up the work and employment program of the facilities according to the needs and possibilities that exist
3. in cooperation with the head of marketing (who reports the needs of sales) and the Controller (who reports the existing financial possibilities) prepares the schedule and budget of production, purchases/supplies, inventories and investments
4. ensures the compression of the production cost without quality degradation of the products
5. monitors, with all available means and techniques, quality control in all phases of the production process
6. works with the marketing manager to produce completely new products or new types of products
7. recommends to the top manager the supply of new machinery and equipment, based on his information on technological developments (in terms of means and methods)
8. draws up the program of the maintenance and repairs of machines, the replacement of mechanical equipment and the supply of spare parts
9. consults regularly with the foremen and master technicians and discuss personnel and facilities issues
10. his role is important in the case of taking the decision to increase production (increase the amount of products already produced), expand it (to new varieties or new products) and develop it (by combining the above), with the aim of the best production size. In this case, it employs the most suitable of the latest mathematical and statistical techniques

Role of the Marketing Manager

The importance of his role can be seen from the fact that sales are the main and ultimate goal of all business activity and all those who participate in it, from the top to the bottom positions, and from the fact that the sales program and budget is the foundation of global business planning – budgeting. The marketing manager administers/manages (plans, organizes, coordinates, directs, staffs, controls) the following special subsections:

1. consumer market research
2. advertising, visibility and promotion of the products
3. selection of their distribution and sales networks
4. packaging (internal and external) of the products
5. storage and maintenance of stocks
6. dispatch and delivery of the products and stocks
7. providing credits and customer services
8. selection, training and distribution of salespeople
9. keeps statistics, ratios and comparative data for sales (intra-enterprise, over time, and inter-enterprise)
10. participates in the preparation of plans – budgets (sales, production, stocks, purchases/supplies, and financial)
11. communicates with representatives, wholesalers, retailers, managers of the company’s outlets, order takers, traveling salesmen, etc.
12. recommends to the General Manager measures for the promotion of sales, the segmentation and expansion of markets, and the application of product management – management based on products/management by products (MBPR)
13. in cooperation with the Controller determine the selling price of the products and the financial services to the customers (incentives)
14. presents systematic and documented studies for the (immediate or future) production and disposal of each new product
15. has a weighty opinion in making decisions about plans for future expansion and development of the business
16. is aware of competitors’ action, performance and (possibly) future plans

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←
8. Private Coaching Program ←
   

BACK TO TOP (OVERVIEW) ←

A Strategic Guide for Business Leaders

I analysed the concept of the “Contemporary Business Leader” in a comprehensive guide (more of a book) that describes the role of business leaders.

The role of a business leader is multi-faceted and crucial in driving the success and growth of an organization. Business leaders are responsible for setting goals, making strategic decisions, assigning roles, and guiding the overall direction of the company. Their primary role involves:

1. Organisation & Administration
2. Vision and Strategy
3. Decision-Making & Problem-Solving
4. Team Building and Leadership
5. Communication
6. Innovation, Adaptation, and Pioneering
7. Customer Focus and Value-Driven Philosophy
8. Financial Management
9. Risk & Crisis Management
10. Relationship Building
11. Brand Reputation
12. Performance Evaluation
13. Quality
14. Results
15. Impact, Community, Movement
16. Business Development and Growth
17. Basic Knowledge & Education
18. The 7ID Amalgam

Business Organisation & Management

1. The Action Framework of the Administrative Executives ←
2. Business Organisation ←
3. Organisation and Factors of Production in the Context of the Enterprise ←
4. Organisation of the Business by Main Operations ←
5. Organisational Change ←
6. Business Administration ←
7. The Business Leader ←
8. Private Coaching Program ←
   

BACK TO TOP (OVERVIEW) ←

Intensive 1-on-1 Coaching Program

The coaching program is part of my 7 IDEALS methodology.