Importance of Business Administration and Management in an Organization

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When it comes to starting a business or managing one, it is necessary to learn about specific issues such as administration, since the success of the company will depend on it.

Find out more about the importance of administrative management in a company and become someone successful regardless of the industry you are dealing with.

What is a company?

Before starting the topic, it is necessary to delve into the key concepts, according to the Royal Spanish Academy (RAE), which defines a company as the organizational unit dedicated to industrial, commercial or service-for-profit activities. This meets an economic objective and provides a source of employment, usually its objectives are focused on:

  1.    The production of goods and / or services.
  2.    Obtaining benefits.
  3.    Achieve survival
  4.    Have the alternative of growth.
  5.    Obtain profitability

They can also be classified according to their capital, which can be a microenterprise; small company which have local owners and work in one place, medium company that usually does not have only one owner and is formed by actions and large company, whose characteristic has a great capacity and access to credits, this allows can make large investments by making profits from it.


The administrative management in a company is key and serves as a basis for the execution and making tasks potentialized to meet the objectives set and contribute to the survival and growth of it. This is made possible through the application of several processes such as:

  • Planning: The approach of the objectives of the organization and the suggestion of the procedures to achieve them.
  • Organization: Refers to the process of ordering and equitably distributing the tasks and resources among the members of a company so that they can give it the correct use and comply with the goals set.
  • Successful entrepreneur: This is the process of monitoring and motivating workers so that they can carry out the planned activities.
  • Control: In this process the person in charge will make sure that the activities are carried out according to the planning.

It is for these reasons that it can be said that administrative management seeks the use of resources for the company to achieve its objectives. 

The person in charge of this must have the knowledge for the correct use of the economic, material and human resources so that the company is successful.

Important points of administration:

Below is a complete list of all the benefits offered by the administration that give rise to their importance for organizations?

* Create and execute relevant knowledge about the correct way to use and optimize the resources that are available to operate an organization.

* It grants effectiveness to human efforts.

* Allows the sustainable growth of organizations.

* Generates relevant information on the correct way to deal with operating resources, especially the human resources that are an indispensable element in any organization and should be taken care of due to their reflection and possible migration to other organizations.

* Measures performance and creates relevant information to make the relevant changes that improve the operation of organizations.

* Reduces operating costs.

The administrator is responsible for conducting the administration of a company, to become an administrator it is advisable to study the degree in business administration at a university and polish the knowledge and skills on the fly and the performance of this university career.

The organization plays an essential part to achieve success in any business management. An adequate organization of the company provides the methods so that the tasks are carried out in a correct way, thus reducing costs, avoiding the slowness and duplication of efforts when determining the responsibilities of each worker. In some way, this also helps to make better use of available resources and resources. It is also necessary to know what each position implies and if it involves an unnecessary expense. All this is framed within the need for a correct organization of the company.

What is the purpose of organizing a company?

The importance of business organization must never be overlooked. This concept encompasses the structuring, organization and integration of the resources and organizational units of a company, as well as the establishment of the attributions and the relationships between them.

It allows you to make more efficient use of the company’s resources so that you can develop your tasks and activities in the pursuit of the company’s objectives. This also means that there is better coordination between the different scales of the company, and greater control over the work of the staff.

The organization of an entity begins by dividing it into areas or departments, which bring together a series of activities with a certain similarity, in addition to establishing hierarchical relationships between them.

Within a company, the organization requires permanent work by the different actors that participate in it, whether they are managers or employees. It is a basic process in which the functions corresponding to each position are shown.

Why is business organization important?

A good business organization will allow companies to achieve better results with the available resources, reducing costs and improving the execution deadlines of projects.

Good communication occupies a place in the importance of business organization. With the different levels of administration, the messages would be confused when going from one area to another, leading to confusion, incidents or a disastrous attention to the user. In the majority of the occasions it could originate the complaints of the clients and the reduction of businesses and demands.

Another aspect to take into account the importance of the business organization is the possibility of promoting work together. This will involve cooperation between areas and creating a healthy environment. In this way, employees will be more comfortable and will achieve their tasks with more productivity. Otherwise they would acquire a more passive behavior, with the risk of fraud and theft.

The leader of the company should be the one who assumes the tasks of communication, who should keep in mind that the success of the business will depend to a large extent on the messages that it transmits. The more direct and clear it is, the better for everyone.

By way of conclusion it can be assured that the business organization is one of the essential parts of any business, largely because it presents one of the points of union for the construction of the proper mechanics for its administration. It specifies the tasks and functions, as well as specifying the obligations of the authorities and the relationships between the different positions.

For this, it is essential to establish a line of communication between the different departments to be able to establish the needs of the company. This can be achieved through an internal communication plan that allows us to solve any communication problem we detect.

Undoubtedly, the importance of business organization takes pride of place in any business, because ultimately sets the design, structure and processes necessary to achieve the goals proposed, reducing efforts and increasing productivity, always in a way as efficient as possible.

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