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Importance of Business Administration: 10 Reasons

The importance of the administration covers all those relevant aspects of this process, which have a positive impact on the scope of the organization's objectives. Therefore, the set of these factors will be key pieces for making any decision of the working group.

It is essential that the company has clear and well defined goals and purposes. These must be informed to the personnel that make it up, so that everyone can work in unison based on the consolidation of the proposed objectives.

The administration works to develop a systematized and structured process of planning, organization, execution and control of resources, in search of growth and stability of the company.

The success of the administration is that it manages to increase and maintain high levels of efficiency in each of the human, financial, material and technological elements that make up the company. This will be the basis for the organization to achieve the expected results.

Reasons for the importance of administration

  • Keeps finances at a level of excellence

In every company, money management is crucial. An excellent management of it will allow the organization to continue standing, moving forward. Otherwise, it could disappear due to mismanagement.

The company is a dynamic entity, for which the administration needs to constantly evaluate the different scenarios, looking for successes or failures in the policies put into practice, not only to comply with it, but also to propose any possible modification to them.

To maximize the benefits and minimize the risks, cost controls are exercised and an accounting system is established that allows reliability to the data that is projected.

  • Increase productivity

Identifying the weak and strong points of the process is vital for a company. The strengths found must be recognized and highlighted. The errors of the process will receive a different treatment, since it is necessary to make plans in order to correct them.

Search efficiency in all processes will result in reducing the resources used and produce more in a shorter time, which will guarantee better results.

  • Help meet the objectives

There is nothing more important for an organization than achieving the goals that have been set at all levels. The administration is one of the fundamental bastions for this to happen, for which it formulates a series of strategies harmoniously orchestrated with all the departments.

The central idea is that everything revolves around the scope of the objectives. That is why actions are taken to coordinate, direct and control resources, as well as to establish a solid organization, where the relationships of authority and responsibility among the staff are clear.

Throughout the process, evaluations of the strategies are carried out. It seeks to modify those that do not point to the consolidation of the organizational objective.

  • Generates satisfaction in customers and employees

The implementation of more efficient processes means that customers are satisfied; this leads to a closer commercial ties. For its part, the organization will understand more about their needs and offer them better products and services.

In addition, as internally the tasks have been optimized, the employee's work becomes more effective and he feels more comfortable when he observes that he has less wear and tear in the fulfillment of his tasks.

  • Reduce waste

Waste within a company is a very important aspect. It would be a serious mistake not to consider the negative consequences that this brings with it. Overproduction, the time lost between each process, the excess inventory of a material, production defects and even the waste of human resources are examples of waste in a company.

All this does not add any value to the product, bringing losses of all kinds to the organization. That is why the administration acts planning and controlling, to try to minimize the levels of waste. Once these are reduced, productivity will increase.

  • Adapts the organization to market demand

A company must survive in a changing environment. That is why the administration must keep up with the external variations, in order to suggest actions that turn in favor of the growth and maintenance of the organization.

In addition, this open relationship with the different factors that make up the external environment provides a broad view of the situations, being able to predict future events and the possible implications for the company.

  • Facilitate sustainable growth

The growth of a company is not a product of chance, it is the result of joint work among all the personnel that make it up and of the effective execution of the operational plans.

The administration works internally with motivation, teamwork and the search for the personal success of the workers. All these strategies promote a feeling of loyalty towards the company. Therefore, to support any growth initiative.

  • Improve the corporate image

The organization needs to project itself, both internally and externally, with a strong and consolidated image.

The administration contributes directly to this, since by producing goods and services of excellent quality and creating a cordial atmosphere with the internal and external public, it has a positive influence on the projection of the company in the business and market spheres.

By having an external identity congruent with the internal image, the company will have an excellent letter of presentation to competitors, customers and among the employees themselves.

  • Optimize the use of resources

The administration gives the company the opportunity to efficiently use the human resources and the technological and financial materials that make it up. This translates into obtaining favorable results that will help achieve the proposed goals.

This optimization offers the company different proposals, which contemplate the possibility of saving on some resources or the need to work quickly at a critical point that is affecting the growth of it.

The effective management of resources is the key to the growth and prosperity of an organization.

  • Reduce costs

One of the principles of administration is to improve effectiveness. This translates directly into a reduction of costs, a very important aspect in any organization.

To achieve this, the administration uses as a strategy a successful combination between the different resources. In addition, it uses different processes and operational control strategies.

Photo by Headway on Unsplash

Scene Rise

Author: Scene Rise

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