The present work entitled “The Business Administration. Evolution and Modernity ”is carried out with the aim of comprehensively addressing the fundamental concepts of administration from the theoretical point of view, in all its splendor, up to the new trends of the contemporary era, thus evidencing its constructive and evolutionary character.
It is mainly composed of three chapters: the first briefly reflects the history of this science, the second the subsystems into which it is divided and the last explains the types of administration or trends that have emerged in modernity.
Introduction
From the very dawn of the development of humanity, man revealed his condition of being social and the need to grow and develop within the propitious framework of the community where he reflected his ability to transform the environment in the interaction of the group.
Nowadays, organizations need to design more flexible structures to change and as a consequence continuous learning and greater adaptability to it with a broad vision for the future. Therefore, it is essential to introduce new management methods, such as Strategic Management, which is aimed at achieving a competitive advantage, since it does not constitute a purely intellectual game, but rather provides the necessary elements to put it into practice and in which necessarily has to involve the senior management of the company, and where the strategic planning turns out to be the determining support for this management, since it provides a guide to guide the administrative performance, through which,possible alternatives for future courses of action are observed and it is the basis for present decision-making. Its essence is the systematic identification of opportunities and dangers that arise, which combined with important data, provide the basis for the organization to make better decisions, taking advantage of opportunities and avoiding dangers.
The new management schemes are a reflection of the way the organization thinks and operates, demanding, among other aspects: a worker with the knowledge to develop and achieve business objectives; a flexible process before the changes introduced by the organization; a flat, agile structure, reduced to the minimum expression that creates a work environment that satisfies those who participate in the execution of organizational objectives; a reward system based on the effectiveness of the process where success and risk are shared; and a participative work team in the actions of the organization. These business demands come to be resolved within the framework of the new administrative trends, such as Knowledge Management, Processes, Objectives, Competition and Values;to which a significant part of this research is destined.
For all the aforementioned, a work is carried out with the aim of exhaustively addressing the fundamental concepts of the Administration in all its splendor up to the new trends of the contemporary era, to demonstrate the constructive and evolutionary character of this science.
I. The Business Administration. Concepts and Evolution.
1.1 Composition of the Administration.
With the evolution of the species, and the increasing complexity of the tasks that it had to undertake to adapt to and develop the environment, the need arose for joint action to achieve the desired purposes, which created the conditions for the emergence of leadership. as human activity.
The development of the productive forces and the social division of labor determined the emergence of increasingly complex relationships that gave rise to the formation of organizations, where the satisfaction of a social-economic need serves as a central axis for the creation of a system structures and relationships that promote collective work for the sake of a common goal.
The organizational system is defined as a complex set of overlapping structures or systems that have a specific purpose. This artificial system, created by man to satisfy a specific need, is cybernetic or self-regulating, which implies that it is capable of maintaining the balance of its fundamental parameters without any external intervention, that is, it is capable of maintaining its dynamic stability.
Organizational systems or organizations have an eminently social character, since man is, in addition to its basic component, its bearer, which is why it constitutes an objective necessity for its development, since it is, in this way, that the Man creates his material base of life, on which rests the entire political and cultural superstructure of society itself.
For this reason it can be stated that organizations:
They serve the development of society.
They promote the realization of projects that could not be carried out individually.
They contribute to the conservation and development of human knowledge.
They constitute a permanent source of growth for man, as a social being.
As a consequence of the above, organizations have the quality of being highly complex and random systems, since man, with his subjective individuality, adds complexity to the relationships that occur within the framework of the system, which determines the emergence of a new human activity: administration.
Management is the process that is carried out to combine material resources with the knowledge and skills of the members of the organization in order to achieve the objectives that give it a sense of existence. This process implies the execution of actions to direct the collective's efforts towards the proposed objectives, guaranteeing a rational and effective use of the available resources, which includes the competences of its members.
There are multiple management concepts given by various authors dedicated to the subject, which we will mention below:
- "To manage is to anticipate, organize, command, coordinate and control". Henry Fayol. "Administration is the most effective combination possible of man, materials, machines, methods and money to obtain the realization of the purposes of a company." William J. Mc.Clarney. "It is the process of working with and through other people in order to achieve the goals of a formal organization." Robert F. Buchele "It is a social science that pursues the satisfaction of institutional objectives through a structure and through effort and cooperation." José A. Fernández Arena.
The Administration must be exercised in such a way that the objectives are achieved, complying with the so-called four E's: effectiveness, efficiency, economy and ecology.
Effectiveness:
It is the degree to which an activity or program reaches its objectives, goals or other proposed effects. Simply put it is "spend wisely".
Efficiency:
It is the relationship between the resources consumed and the production of goods and services, the efficiency is expressed as a percentage comparing the input-production relationship with an acceptable standard (norm). Efficiency increases as more units are produced using a given quantity of inputs. In short, "spend correctly".
Economy:
It refers to the terms and conditions under which human, financial and material resources are acquired and used, both in the appropriate quantity and quality and at the lowest possible cost and in a timely manner. Simply put, "spend less."
Ecology:
It refers to the company-environment relationship, which must be such that the production of goods and services does not imply an attack on it, that is, the administration must guarantee that the company's activity does not produce undesired environmental impacts. In short, "spend healthily."
1.2 Evolution. Trends and approaches.
Management is the process of planning, organizing, leading, and controlling the work of the members of the organization and of using all the available resources of the company to efficiently achieve the established organizational objectives. This had its first manifestations in the Industrial Revolution and in the analyzes of philosophers and economists of the 18th century. At first it manifested itself completely spontaneously, then it became aware until it became a science, in which the scientific knowledge it provided and the possibility and conditions for its use were determined. All contemporary literature coincides in recognizing that the Administration has a triple character: science, art and profession. The conceptualization and development of administration as a science,It is relatively recent in relation to other branches of human knowledge, and has gone through various theories and approaches, which will be discussed below.
Classical Organization Theory: It arises from the need to lead complex organizations. It is an anticipated effort whose pioneer was Henry Fayol to identify the principles and knowledge that underlie scientific administration. Study the administration processes such as planning, organization, direction, coordination and control. He sees the need for hierarchies, bureaucracies, norms and clear lines of authority and establishes the 6 basic functions of administration: technical, commercial, financial, security, accounting and administrative; in addition to the 14 management principles (See Annex 1). Other of his predecessors was: Max Weber.
Scientific Administration Theory: It is called this way because of the rationalization it makes of the engineering methods applied to the administration. It was mainly formulated by Frederick W. Taylor between approximately 1890 and 1930. It aims to scientifically determine the best methods to perform any task and from this select and train workers. It is derived from increasing productivity by increasing their efficiency and friendly cooperation and also from conducting time and motion studies. It fosters the invention of tools and machinery to carry out the processes. Other main exponents were: Robert Owen and Charles Babbage
Movement of human relations: It arises from the verification of the administrators that the classical theory did not achieve complete efficiency in production, nor harmony in the workplace. It highlights social needs, improves the perspective of the classical school that considered productivity only as an engineering problem. The man is recognized socially above the economic man who only works for material gains and advocates retribution in groups. He focuses on administrative and non-technical skills and one of his key figures was George Elton Mayo.
Behavioral Theories: In this theory you have more knowledge of psychology, sociology and anthropology. Hence a greater understanding of individual motivation, group behavior, conflict, leadership, power, etc. arises. Administrators are required to be more sensitive to dealing with the subordinate and was defined by Abraham Maslow, one of its main exponents, the hierarchy of human needs (See Annex 2). In addition, innovative and humanistic measures were taken such as: decentralization and delegation of work, its enrichment with the participation of workers in decisions, and self-evaluation of performance. The precursor of these measures was Douglas Mc.Gregor who also developed Theories X and Y of leadership (See Annex 3).
School of Administrative Science: It arises after the Second World War as a product of the use of mathematical economic modeling, the advance in telecommunications, computing and transportation. Apply operations research in management, with multidisciplinary teams, introducing mathematical techniques to model, analyze, and solve management and decision-making problems, and envision an era of great scientific advancement.
Systems Approach: It states that a system is a perceived totality whose elements are clustered because they affect each other over time and operate with a common purpose. The influence of management must be exercised considering the organizational system as a whole and at the same time as a set of parts, seeking to explain the relationships that occur within the framework of the system and the synergistic effects thereof. It assumes that each decision that is taken in the exercise of management must take into account its impact both on the part of the organization where it is adopted, and on the system as a whole.
Approach by Objectives: It assumes the management process from the setting of concrete goals that must be achieved in a given period, and towards whose achievement all the activity of the organization is oriented. This approach places the emphasis on the achievement of objectives and not on the process or people through which the set goals are achieved. The use of Management by Objectives implies a disaggregation of the mission of the organization in all the objectives and sub-objectives that must be achieved in order to achieve it. This approach is all the more efficient the better the objectives to be achieved are specified and behavioral standards or measurement criteria are established to assess the quality with which they are uniquely achieved.
The Approach for Contingencies: The administration assumes studying a priori all the possible contingencies that the organization may face in fulfilling its mission and drawing up alternative plans to provide solutions to each of the possible contingencies to be used. This approach to management cleared the way for the emergence of strategic thinking, since unlike previous theories, the Contingency Approach takes into account the interaction of the organization with its environment, and the effects that this may bring to effectiveness. and efficiency with which the company achieves its objectives.
The Strategic Management Approach: It is the most effective way to face the challenge of making organizations at the same time efficient and effective, given their outgoing, voluntarist, anticipated, critical and open to change attitude. This attitude has been trapped in the concepts of organizational strategy and strategic planning and management, constituting its fundamental basis. This approach does not disregard the whole experience of traditional leadership, but instead gives a new orientation to the tactical and operational dimensions. Some of its characteristic elements are planning based on turbulent conditions, the construction of alternative scenarios, focusing management on the market and its demands and desiring change, among others.
Management by Values: It is a strategic leadership tool based on values. This approach, more than a new fashion to run companies, is a new way of understanding and applying knowledge raised by social psychology and other behavioral sciences since the mid-20th century and that many managers around the world are already beginning to practice one way or another, although in many cases in an intuitive and still faulty way, in order to survive and differentiate themselves in the race to the future. It is based on the self-direction of each one of the members of the organization, for which a context of values, ethics, and integrity is needed that is explicit, shared and embodied in real behaviors that reverberate throughout the organization.
Process Management: It is based on the concept of process, understood as such any repetitive sequence of actions or operations that take place in an organization to deliver a product or service to a recipient. In it, the organization is visualized as a set of product and / or service flows that interrelatedly achieve the final product and / or service that customers are willing to purchase. These flows are constituted by the sequence of all the activities that take place in the organization regardless of the internal structural conformation of the organization.
Management by Competences: It is a way of dealing with the everyday, in such a way that it enables the formation of the intellectual capital of a company or institution. Competences can be observed in a daily work situation or with test dynamics, when they are presented as positive skills, personal characteristics and acquired knowledge. A person has a high competency profile when he demonstrates the qualities required to carry out certain missions or tasks. For this reason, we can define that the competences are not static, but are completed in the daily dynamics, through a process of reformulating the demands of the environment for each position.
II. Phases and Subsystems of the Administration.
In artificial systems it is possible to describe, maximizing the simplification of their composition, two closely related subsystems, namely: the governing subsystem and the directed subsystem (See Annex 4).
The governing subsystem exerts the influence of direction on the directed subsystem so that the organization achieves the proposed objectives, through a direct information relationship of orders, guidelines, regulations, decisions, etc.
Meanwhile, the directed subsystem assimilates this information to change, maintain or improve its behavior, finally emitting information that flows in the opposite direction: feedback.
The influence of the governing subsystem with respect to the managed subsystem is exercised through the management functions, which constitute the powers, attributions or obligations incumbent on the management subject so that through its exercise the objectives of the organizational system can be achieved.
Consequently, the possibility of an economic entity fulfilling its corporate purpose and achieving its goals, both immediate and medium and long term, depends largely on the effectiveness with which the activity of management or administration is carried out, since through This can combine all the available resources in the interest of the entity's objectives, establishing the necessary relationships, both within the organizational system and in its exchange with the environment.
Directing or managing, as human activity, is defined as the conscious action of the manager (manager) in the management object (organization). Management influence is exerted through management functions.
Management functions can be separated into two large groups: general and specific. The former, as the name implies, are of a general nature given that they are exercised equally in all systems, regardless of their specificities. The specific functions, on the contrary, refer to the attributions and faculties of each executive position in particular.
The general functions of the administration form a system that receives the name of administrative cycle and that is constituted by four phases: planning, organization, regulation or command and control, with planning being the guiding element of the cycle (See Annex 5). The most up-to-date texts replace the function of regulation or command with a more contemporary term, more in keeping with the purpose pursued by its exercise today: leadership.
The administrative cycle aims to combine the efforts of all members of the organization and the use of all other organizational resources to achieve the established objectives. This cycle constitutes a process, since managers, regardless of their particular abilities or capacities, intervene in interrelated activities to achieve the desired objectives.
As can be seen in the following graph, the administrative cycle is interactive, since all the functions are related to each other and interact in a continuous improvement and adjustment process called the administrative process.
2.1 The Planning.
The planning or planning phase is the one that exercises guiding character in each new cycle and based on it the others are carried out since it establishes the objectives that determine the direction of the organization's actions to achieve them. The planning exercise is carried out in several stages: (See annex 6).
The action of planning necessarily implies an anticipation of what will happen in the organization in the more or less immediate future, depending on the type of plan in question, and the success of business management as a whole will depend on its effectiveness, given its essence that triggers the management process.
To guarantee the planning efficiency, it is necessary:
Gather all the necessary reference information.
Identify your limiting factors.
Involve all your employees in the process of setting goals or objectives.
Determine the actions necessary to achieve your goals.
Determine the deadlines in which the planned actions must be carried out.
Establish the people who must carry out these actions.
Select a person in charge for each task, who must direct the actions. Establish the feedback system that will be used to follow the course of the actions.
The results of the planning process are expressed in the plans, which have different structures, periodicity and content according to their objective. The most used plans are: Strategic Plan, Business Plan, Budgets, Action Plans, Operational Plans, Individual Plans.
Types of plans.
Strategic plans are medium-term plans (no more than three years), which contain the following elements: mission, vision, shared values, key factors, scenarios, strategy, strategic objectives and measurement criteria.
Business plans have an annual frequency, and combine strategic aspects with specific actions, objectives and figures for the year in question. This plan covers the strategic results areas of the company and the tasks that must be carried out in each period to achieve the strategic objectives. It also includes the budget for the year and the figures proposed for the indicators of effectiveness and efficiency for the period.
The Budget is a particular type of plan, which reflects the figures provided for financing the activities set out in the business plan. There is also the so-called Master Budget where the cash flow that the organization will have in a period of not less than eight weeks is foreseen, which is fed back and prepared according to the execution of the prepared budget. It may have a subsequent breakdown in periods that correspond to the entity's operating plans (monthly, quarterly, etc.).
The Action Plans are plans for the execution of a specific task, which involves several people or departments that must take it to common pathways. These plans list all the actions that must be carried out to fulfill the specific task in question, and generally, they do not correspond to a single departmental structure, but involves more than one organizational unit that forms a task force. for the achievement of a given purpose.
The operational plans, as its name indicates, are more immediate, and consequently, cover periods of less than a year, and may be semi-annual, quarterly, bi-monthly or monthly. Unlike action plans, these correspond to a single organizational unit (company, unit, department or specific area) and contains all the tasks to be carried out by it in the period in question.
The individual plans present the tasks broken down to the job level, and consequently, they are more or less complex depending on their complexity. Generally, these plans are prepared by those managers or technicians who occupy jobs with a wide spectrum of different tasks, which are not always carried out in the same order, or with the same frequency. The format of these plans is very diverse, since it complies with the personal criteria of each one.
2.2 The Organization.
Organizing is identifying and classifying the activities that must be carried out in the company. Each group of activities is assigned a director with the authority to supervise and make decisions. It is to coordinate vertically and horizontally the resulting structure.
"The organization was born out of the human need to cooperate." In addition, it is essential to establish relations of coordination and subordination, since there is no optimal organization for all entities, the best is an individual matter that will vary according to the entity in question and within it, over time.
The structure of an organization can be analyzed in three dimensions: complexity, formalization and centralization.
Complexity considers the degree of differentiation in an organization. The greater the division of labor within an organization, the greater the number of levels in the hierarchy; and the more the organization's units are geographically dispersed, the more difficult it is to coordinate personnel and their activities.
Formalization is the degree to which an organization based on rules and procedures directs the conduct of employees. The more rules and regulations exist in an organization, the more formal its structure.
Centralization has to do with where the authority lies. Decision making in some organizations is highly centralized. Problems flow upward to senior executives, who select the appropriate action. In other organizations, decision-making goes down to lower levels. This is known as decentralization.
The purpose of an organizational structure is to establish a system of roles to be developed by the members of an entity to work optimally together and to achieve the goals set in planning.
To create an organization it is necessary to take into account the following activities:
Integrate objectives and plans.
Define the authority of each director and establish a hierarchy.
Define the information needs and its flow.
Provide staff according to the objectives we want to meet.
Organizations have modalities that are adapted to the changes of the environment and that constitute a form of manifestation within the administrative cycle:
Division of labour.
The division of labor means that, instead of an individual developing an entire activity, it is broken down into a number of steps, so each step will be determined by a different individual. In essence, individuals specialize in doing part of an activity, rather than doing it all. An example of division of labor is production through the assembly line, in which each worker performs the same standardized activity over and over again.
Unity of command.
Classical writers who argued for the principle of unity of command argued that a subordinate should only have a superior to whom he was directly responsible. No person should report two or more bosses. Otherwise, a subordinate would have to face demands or priorities from several superiors that would conflict. The concept of unity of command was logical when organizations were comparatively simple. In current circumstances it is still sound advice, and most organizations today adhere to this principle to a considerable degree.
Authority and responsibility.
Authority refers to the rights inherent in an administrative position to give orders and expect them to be obeyed. The principle of authority was a basic dogma of classical writers. It was seen as a sticker that held the organization together. It had to be delegated down to subordinate managers, giving them certain rights while setting certain limits within which they should operate.
Each administrative position has certain specific rights of those who occupy them, they acquire by the hierarchy or title of the position. Thus, authority is related to position within the organization, and overlooks the personal characteristics of the individual manager. In fact, it has nothing to do with the individual directly.
When a position of authority becomes vacant, the person who left the position no longer has any authority. The authority remains with the position and its new occupant. When we delegate authority, we delegate a parallel responsibility. That is, when one is given "rights", one also acquires the corresponding "obligation" to perform them. Assigning authority without responsibility creates opportunities for abuse, and no one should be held responsible for something for which they have no authority.
Departmentalization.
The division of labor creates specialists who need coordination. This coordination is facilitated by bringing together department specialists under the direction of an administrator. The creation of these departments is usually based on the functions that are developed, the product or service that is offered, the client that it focuses on, the territory or geographic area that is covered, or the process that is carried out to convert the inputs in the product or service.
One of the most popular ways to group activities is by the functions that are developed, or functional departmentalization. A manager responsible for a manufacturing plant could organize her plant by separating engineering, accounting, personal manufacturing, and purchasing specialists into common departments. Functional departmentalization can be used in all types of organizations. A hospital might have departments dedicated to research, patient care, accounting, and more.
Mechanical and organic organizations.
Mechanical organization was the result of combining classical principles. Adherence to the principle of unity of command ensured the existence of a formal hierarchy of authority by a superior, where each person is supervised. Keeping the span of control short at ever higher levels within the organization created ever higher and more impersonal structures. As the distance between the top and the bottom of the organization increased, the higher management increasingly imposed rules and regulations.
Due to the fact that superior managers could not control activities at a lower level through direct observation and ensure the use of standard practices, said control and supervision were exercised through rules and regulations. Classical writers' belief in a high degree of division of labor created jobs that were simple, routine, and standardized. Additional specialization through the use of departmentalization increased impersonality and the need for multiple levels of administrators to coordinate specialized departments.
In terms of our definition of organizational structure, we found that classists argued that all organizations were highly complex, formalized, and centralized. The structures will be efficient machines, well oiled by rules, regulations, and routine. The impact of personalities and human judgments, which impose inefficiencies as well as inconsistencies, would be minimized. Standardization would lead to stability and predictability. Confusion and ambiguity would be eliminated.
Analyzed from the utilitarian point of view, the business organization is a tool of the governing subsystem to exercise its functions, both general and specific, and therefore responds to the specific objectives of the system and the specific conditions of its development, so they must observe the following principles:
- Adaptability: According to which the management body must respond in an operational and effective way to the changes that take place in the organization and / or in the environment, for which reason it is necessary that its design guarantees in an agile and dynamic way the exercise of the regulatory function in the system, in correspondence with the rhythm and intensity of the fundamental activities. Flexibility: Attends to guarantee that necessary reorganizations can be carried out according to the changes that occur in the fundamental activity. Economy: Refers to minimizing expenses for management, both in human resources and technical teams, the volume of information and the qualification of workers, among others.Preceding character of the function with respect to the organ: it attends to the observation of the relationship of precedence and determination between the following elements: objectives - functions - tasks - individual positions and organizational units. Exact determination of responsibility: According to which each structural division must have defined its area of responsibility, for which a clear delimitation of formal authority is required. Necessary separation: It raises the need that the activities whose function is the supervision or control of another, should not be located in the same organizational unit. Minimum Levels:It refers to minimizing the managerial levels existing between the top management and the workers at the base, in order to guarantee that the flow of information is adequate and that it is not lost or distorted. Maximum Control: Points to the need for the structural design to fully guarantee the exercise of the general control function at all levels of management.
Organizations are governed by objectives, which must be verifiable, precise and achievable. To be accurate they must be quantitative and to be verifiable they must be qualitative.
There must be a clear definition of the duties, rights and activities of each person and the area of authority of each person must be established, what each must do to achieve the goals, know how and where to obtain the necessary information for each exercise. Consequently, the organization function involves a broad set of elements that are related to each other (See Annex 7).
2.3 Leadership or Regulation.
The Regulation as its name indicates in its primary meaning refers to the directive actions that are aimed at maintaining the dynamic stability of the system, that is, it is the function through which the cybernetic nature of the same is manifested.
This function covers core aspects of executive activity such as style, discipline, authority, motivation and the way they make decisions in the system, which is why in contemporary texts this function has been called leadership, since in the specific conditions of the business context, no regulation can be effective unless it is exercised through a genuine legitimizing leadership of the change, the latter being the condition of existence of the system in the current turbulent environment.
In recent years, there has been a lot of talk about leadership and leader training. Actually, the word leader is a Castilianization of leader, conductor. Thus, the leader is a conductor of a human group, and human groups have always existed. For this reason, the fact that leadership is talked about today more than before does not mean that leaders were invented recently, but rather that their importance in such a globalized society, and even more so in companies as basically human organizations, has turned the attention on this kind of person.
Leadership is the management function through which the proper functioning and development of the administrative cycle is ensured, through involvement, motivation and decision-making.
On the other hand, regulation guarantees concrete actions aimed at achieving harmonious and successful relationships between the system and its environment, while promoting a comprehensive and critical view of the system. In this way, leadership is essential to achieve a work environment where employees feel fulfilled and happy and perceive the objectives of the organization as their own, consciously contributing to its achievement.
As can be seen in the following graph, the way in which leadership is exercised will determine the behavior of the organization as a system (See Annex 8).
At all levels of a hierarchy, there will always be a field subject to responsibility, where in the development of their corresponding missions, they must exercise the main functions of the leader:
Foresee: It means to see before, calculate and prepare the future objective. For this, it is first necessary to clearly establish the objectives to be achieved taking into account the needs that this will entail according to the method to be followed.
Planning: It is setting the plan prepared through the function of forecasting; This must be done in writing, so as not to fall into danger of deviating from the intended objectives. For this, it is necessary to use real and objective data to achieve the characteristics of possibility, unity, flexibility and precision.
Organize: It is to provide a group with all the necessary elements for its operation, clearly defining obligations and responsibilities, delegating authority and preparing future managers to avoid continuity solutions.
To command: It is to communicate with force of execution the decisions adopted and to form wills to lead them and orient their effort to common action.
Coordinate: It is to establish harmony between subordinates and their respective tasks whose objective is that each one helps more and hinders others less, thus facilitating the fulfillment of the objective and it is more feasible to successfully achieve the predetermined objectives. Control: It is to make sure that each and every one complies with the plan drawn up, it is to verify at all times and at all levels. Planning and controlling are the main lines that converge in the objective of all activity.
Evaluate: It is to deduce a study of results between the plan and its implementation, it is to relive each circumstance, each success or each vicissitude of the plan, to extract the most convenient teachings.
Traditional managers who are leaders can use at most two types of powers, formal power (it comes from their own position) and real power (that which they earn for themselves in the performance of their duties). The powers of the leaders are:
The political power is the ability to work with people, and takes place in all organizations.
The power of experts comes from specialized learning and a systematic desire for self-improvement.
The legitimate power comes from a higher authority and represents the power to control resources (formal power).
The personal power comes from the great force that has the personality of leaders (real power, carried to its highest expression).
Now, in the exercise of these powers, not all leaders conduct themselves in the same way, making it possible to speak of different styles of leadership and forms of manifestation of leaders. So they can be differentiated:
Autocratic Style:
They centralize power and decision making.
Offers security to employees.
Allows for quick decisions.
Employees dislike it especially if it goes to the extreme of creating fear and frustration.
Democratic Style:
They decentralize authority.
L decisions as are participatory.
The leader and the group act as a social unit.
They offer suggestions.
Employees are informed about situations that affect their jobs.
Anarchic or Lax Policy Style:
Evade power and responsibility.
The leader has a minor role.
It is up to the group to set goals and solve problems.
It is not a normally predominant style, it is useful in situations that depend on the group.
These styles are reflected from the projection of each leader since there are various forms of expression of the same:
Creative Leader: It is based on command and command, without listening to many criteria about what is to be undertaken. High centralization of authority and uses coercion as a fundamental mode of influence. Control progress and results in detail.
Guiding Leader: Instead of orders, use suggestions, guiding ideas on how best to carry out the activity. Fundamentally controls the results.
Rational Authoritarian Leader: The boss determines the activity with a minimum of consultation. Give instructions on how to do the job; Assign tasks and collaborators to each member. Establishes work procedures, with limited collaboration from subordinates. Check in details.
Paternalistic Leader: The management rests in a “father-son” style relationship. The leader is "protector" of the group, "understands" their deficiencies and tolerates certain freedoms, with the ultimate goal of earning their love and finding ways to positively influence them.
Democratic Leader: A global planning of the work is done with the participation of all. The group makes decisions about the activity to be carried out. Members make individual decisions regarding the distribution of tasks and collaborators. The leader suggests alternative processes for the group to choose; Objectively distribute their praise and criticism and participate in the life of the group, although they do not do direct work
Educator Leader: The boss knows and uses pedagogical principles and methods. Try to teach in the interaction with the subordinate and in the definition of how to undertake tasks. He has the ability to combine the methods of executive influence with persuasion, combines the methods of positive stimulation and sanctions. He worries about the development and improvement of his subordinates.
In short, the best results will be obtained by leaders who, at all levels of the company, pay the greatest attention to the people around them, transmit firm values and patiently develop the skills that will allow them to make a lasting contribution to the organization. In other words: the leader who is a faithful and enthusiastic coach.
2.4 Control.
The administrative cycle is closed with the control function, which refers to the monitoring of an operation or group of operations in order to keep them within certain predetermined behavioral limits. The fundamental objective of the control function is to ensure the self-regulating nature of the organizational system and to provide the command with all the necessary elements to order the execution of the rectifying actions on the object of management.
On the other hand, the control provides relevant information to evaluate the quantity, rationality and real possibilities of compliance with all the indicators and objectives set in the planning process; providing elements to measure to what extent the performance of the governing subsystem as a whole and of each manager in particular responds to the current and prospective requirements of the system (See Annex 9).
Control is necessary since progress is monitored through this function and errors are corrected; It helps to monitor environmental changes and the repercussions that these may have on the organization's progress, produces faster cycles, adds value to the organization's products and services, unites workers with different backgrounds and cultures, and facilitates delegation and teamwork.
However, the foregoing does not imply that the control does not have possible drawbacks, whose prior knowledge facilitates the adoption of the necessary measures so that they do not occur, including:
- Control costs, since it includes not only the amount dedicated to the existence of organizational units that carry out this activity, but also the time value of the many hours that executives dedicate to it. Control can be repressive, frustrating and generate anxiety and tension, if excessive pressure is put on employees. The potential for confusion, if policies, procedures, and rules become more important than the objective. Misrepresentation of information may be obtained to obtain more favorable results through information manipulation.
Control is a systematic effort to set performance levels with respect to planning objectives, to design information feedback systems, to compare actual performance with predetermined levels, to establish if there are deviations and to measure their importance, and to take the measures to guarantee that all the resources of the company are used in the most effective and efficient way possible in obtaining the organizational objectives.
There are different types of control:
Cost Control: It is one of the most widely used in business practice. In the entities, the costs of the next period are foreseen and when it has elapsed, the actual costs are compared with those expected, to analyze deviations and determine their causes. The most important and widespread form is called Standard Costs.
Control of Advertising Effectiveness: This type of control requires a measurement of the results of each campaign, which must be considered in relation to an objective variable or consistent with the objectives, such as the sales variable.
Control of Sales Forces: This type of control can be established both on the basis of quantitative and qualitative indicators, aimed at determining the extent to which their actions contribute to the fulfillment of the company's objectives.
Control of Labor Costs: Labor costs comprise all disbursements related to employees, from the highest level executives to the unskilled (generally linked to salary).
Cash Position Control: This type of control is aimed at checking the correspondence between cash inflows and outflows with what is planned. Among the main activities of this type of control are: the systematic planning of long and short-term cash flows, the monthly reprojection of the cash position and the daily evaluation of the cash position.
Production Control: Attends to the organization, planning, checking of materials, methods, tooling, times of operations, manipulation of manufacturing routes, formulation of programs and their dispatch or distribution and the coordination with the labor inspection, so that the supply and movement of materials, the operations of labor, the use of machines and activities related to the factory departments, however they have been subdivided; produce the desired manufacturing results from the quadruple point of view of quantity, quality, time and place.
The Management Control System.
The modern Management Control system is conceived as an Information and Control System superimposed and continuously linked to management, which aims to define compatible objectives, establish appropriate follow-up measures and
propose specific solutions to correct deviations.
Thus defined, Management Control becomes an active entity that influences management to design the future and continually create the conditions to make it happen.
The characteristics that a Management Control System must have are:
Integral: It assumes an integral perspective of the organization, contemplates the company as a whole, that is, it covers all aspects of the activities that are carried out in it.
Newspaper: It follows a scheme and a predetermined sequence.
Selective: It should focus only on those elements relevant to the function or objectives of each unit.
Total: Partial aspects are not looked at but the whole.
Balanced: Each aspect has its right weight if we let the technical, commercial and managerial training distort reality, giving more importance to the factor that he knows best.
Timely: Corrective actions must be taken on time.
Clear: Made up of concrete indicators, perfectly and easily understandable by the personnel involved. It will not be constituted only by indicators but by rules to use them, especially of priority to avoid ambiguities and conflicts between objectives. Determined by the strategy: The indicators must translate the strategy at the level of the activity, that is, at the level of decision control that the activity is in charge of. Effective and Efficient: Seeks to achieve the objectives set using the appropriate resources. The achievement of the objectives is sought and it is pointed to the center of the problems.
Creative: The search for meaningful ratios and standards continues to better understand the reality of the company and direct it more accurately towards its objectives.
Promoting action: You must alert the manager, forcing him to make decisions about the negative aspects of the achievements and promote the appropriate corrective actions. Adequate: The control must be tempered to the controlled function, seeking the most suitable techniques and criteria in each case.
Adaptable: It must adapt to the culture of the company as well as to the people who are part of it; must have adaptability to changes in circumstances and strategies.
Motivator: It should help motivate action towards the desired behavior by eliminating coercive tendencies.
Flexible: It must have a capacity for change in itself, while perfectible.
The Management Control System must be designed in accordance with the existing strategies and plans, the jobs, the people who exercise the control tasks and the characteristics of the form and style of management that are applied, otherwise will be ineffective.
To proceed to the implementation of a Management Control System with the described characteristics, it is necessary to go through the following steps:
- Identify the key factors in the success of the company: Balance of strengths and weaknesses.
Diagnosis of the management system and its results.
- Review of the structure of the Organization:
- Static analysis (general principles of the organization, articulation of functions, organizational charts, etc.). Dynamic analysis (definition of centers of responsibility within the framework of the flexible structure, limits of authority, etc.).
- Determination of information needs:
- Internal, external, financial, non-financial, periodic.
- Integrate information needs with the organization Establish investment and investment policies Integrated planning system Budgetary devices Prepare basic system designs:
- Design of the general integrated control system. The control panel pyramid.
- Control tools design: Information for the individual.
- Emphasis on the significant Signaling trends Deciding on the correct frequency and deadlines.
- Define the procedures and means of the system
- Select the doctrine on costs Dimension the volume of data Estimate the needs of the teams.
Finally, it should be noted that the system of general management functions is complex, since in each of them the administrative cycle itself is revealed, that is, it is necessary to plan, organize, lead and control planning, organization, regulation and control, if success is to be exercised in the direction of the system.
III. Modern Business Administration.
3.1 Administration by Securities.
The word value can be defined in multiple ways. According to the economic dimension, it is the criterion used to evaluate things in terms of their relative merit, adequacy, scarcity, price or interest. Another economic concept is the value chain that refers to the concatenated set of activities that the company performs and that add or subtract value to configure the total value of the product. According to the axiological dimension, it comes from the Greek axios, which means what is estimated or worthy of being honored. It also means axis around which essential elements revolve. And finally, the psychological dimension qualifies it as the moral quality that moves people to undertake resolutely large companies and face the dangers without fear.
Another definition of values states that they are as “a basic conviction that a specific form of conduct or the ultimate condition of life is preferable, in personal or social terms, to another form of conduct or ultimate condition of life that is contrary or opposite ” which are usually always related to attitudes and behaviors, and also contain an element of judgment, since they include concepts that for the individual represent the correct, the good or the desirable.
What is Securities Administration?
Values Management is a focus on modern management in which managers establish, move, and practice the shared values of an organization which form the culture of the organization. It reflects what their position is, what they believe in and the way the company operates and the behavior of its employees. It introduces the dimension of the person within managerial thinking and daily practice and humanizes the basic purpose of the company offering a framework global that allows to continuously redesign the culture of the company so that collective commitments are generated by new and exciting projects.
The direction by values has the purpose of:
Simplify: Absorb the organizational complexity of the growing needs for adaptation to change.
Guide: Channel the strategic vision of where the company should go in the future. Understand: Integrate Strategic Management with people policy, development of commitments and quality professional performance.
The values can be agreed on a group system in the following way:
- Relational Values: Loyalty, Companionship and Honesty. Formal Values: Commitment, Honesty, Ethics and Integrity. Organizational Values: Transparency, Trust, Initiative, Support.
From these and taking into account the direct relationship between values, attitudes and work behaviors, they can be operationalized and incorporated into formal instruments for the selection, induction, training and evaluation of work processes, already existing in the organization.
Why the Directorate for Securities?
This phenomenon arises from the need for quality and customer orientation, for flatter teams, networks and structures, the need for autonomy and professional responsibility, due to the evolution of managers to facilitators who have a special power to make sense of and channel human efforts both on a personal and company level.
Values are abstract, they acquire a different meaning for each person, what theorizes what is done, and what can be observed. Management by values helps to achieve the consequence between what is said and what is done. Its evolutionary development is derived from several stages or phases that we will enunciate next:
PHASE 0: Existence of legitimizing leadership.
PHASE 1: Distillate of shared essential values.
PHASE 2: Development of Project teams.
PHASE 3: New policies of people in the selection, training and recognition of the effort.
PHASE 4: Securities audit.
Identification of the values.
As our population is the result of such a wide mix of cultures and influences, it is not so easy to list these changing values and motivations in a homogeneous and valid way. But the continuous contact with people allows to establish a description, not so precise, but it tries to clarify the current trends.
- Recognition and prestige Job stability Economic compensation Loyalty Growth opportunity Opportunity for participation Feedback Intrinsic importance and challenge Private life.
3.2 Management by Objectives.
Objectives can be established as a process that deals with identifying the sectors of responsibility or activities that are considered crucial for the long-term success of the organization. Determine the delivery measures in each and set the measurement indicators for each objective.
Management by objectives is a form of management, based on a percentage of human behavior and motivation that is applied to managers at any level, in all functional areas and to any kind and size of organization. It is a system by which the members of an organization establish their objectives jointly, where each member, with the assistance of his superior, defines his area of responsibility, sets objectives that clearly formulate the results expected of him and develop measures of Performance that can be used as guides to direct your unit and that will serve as a standard to evaluate your contribution to the organization.
When defining precise objectives for the organization and in turn for each individual unit, several principles must be followed such as:
- The objectives must be in relation to the needs of the Institution and must support the aims of the organization. The objectives must be clear, concise and realistic. The objectives must be evaluable but not necessarily quantifiable. The objectives must be guides for action; they must formulate what must be accomplished, not how it must be accomplished. The goals must be ambitious enough to offer a challenge, so that man takes pride when he achieves them. The goals must take into account internal and external constraints, it is That is, the factors that are not subject to the control of the man responsible for their results. Defining objectives is a joint task and in them the responsible individual and his superior must agree mutually.
The Management by Objectives proposes in one way or another to follow the following four steps:
- Definition of objectives: Identifying critical variables of success, measurement indicators and current and desired levels. Development of action plans: Dividing tasks into stages, marking the relationships between each one and determining who is responsible and what are the necessary resources. Carrying out periodic reviews: Establishing a control system. Evaluation of results: E stableciéndose annually at the end of the fiscal year.
3.3 Administration by Competencies.
What is competition?
Competition is a set of behaviors that denote that a person is capable of carrying out, in practice and successfully, an activity, integrating their knowledge, skills and personal attitudes in a given corporate context. They can also be distinguished as behaviors that some people master better than others, and that makes them more effective in a given situation.
Competences can be observed in a daily work situation or with test dynamics, when they are presented as positive skills, personal characteristics and acquired knowledge. A person has a high competency profile when he demonstrates the qualities required to carry out certain missions or tasks.
They are expressed at two levels: basic or primary, based on aptitudes, personality traits and attitudes (abstract reasoning, ancestry and predisposition to risk); and secondary or complex, comprising several primary competencies (negotiation skills, leadership, organization, etc.)
Management by Competences is a way of dealing with the everyday, in such a way as to enable the formation of the intellectual capital of a company or institution.
It is proven that the human being has the ability to acquire new skills throughout his life, provided that the appropriate stimuli are given and there is access to the necessary resources.
Probably most of the skills are incorporated so gradually and daily that we can hardly perceive them. In a relatively short time, any professional or executive perfectly manages his computer, can deal with the Internet, learn another language, better manage the conflicts of his work team, in short, he incorporates small learning that is added every day to his personal skills staff..
Managers who become aware of this fact, and internalize management by competencies, will come to the fore, they will constitute the vanguard, opening paths before others.
Basic premises of the Competency Management model.
When establishing a management model by competencies, it is necessary to adopt some basic premises that will endorse the management actions:
- Be aware that each type of business needs people with specific profiles and that each existing job position in the company has its own characteristics and must be filled by professionals who have a specific profile of competencies. Recognize that those who occupy managerial positions are responsible for offer opportunities that allow the development and acquisition of new competences. Be convinced that there will always be space for the development of new competences, and that what is required today as the good performance of a task, tomorrow may be added new challenges. These basic premises they must be disseminated until they are part of the general culture and internalized in everyone's attitudes and behaviors.On the other hand, a careful look at these premises allows us to conclude that the competences are not static, but are completed in daily dynamics through a process of reformulating the requirements for each position according to the demands of the environment.
The main objective of the competency management approach is to implement a new management style in the company to manage human resources comprehensively, more effectively in the organization.
Through competency management, the following objectives are to be achieved:
- Improving and simplifying integrated human resource management. ➢ The generation of a process of continuous improvement in the quality and allocation of human resources. The coincidence of human resource management with the strategic lines of the business. The manager's involvement in the management of his human resources. The contribution to professional development of people and the organization in a changing environment. Decision making objectively and with homogeneous criteria.
In the administration by competencies two classifications are distinguished:
Due to acquisition difficulty:
- Knowledge: Acquisition of competence according to the application of a specific technique. Skills: Usually acquired through training and experience. Skills: Some are related to personal traits or characteristics, and are more difficult to obtain and modify in the short term.
By thematic similarities between competences, which are classified following the development of a central theme:
- Communication: Ability to speak in public; fluent oral and written expression. Management / management: Planning, team leadership, leadership, conflict resolution. Influence: Motivation, public relations, teamwork. Solution and innovation: Ability to provide suggestions, creativity, capacity for synthesis, orientation to Results. Achievement and action: Achievement of individual or group objectives. Service: Available attitude, punctuality, customer orientation.
3.4 Administration by Processes.
A process is a set of interrelated resources and activities that transform input elements into output elements. Resources may include personnel, finances, facilities, equipment, techniques, and methods.
Therefore we can deduce that Process Administration is the way to manage the entire organization based on processes. Being a sequence of activities aimed at generating added value on an input to achieve a result, and an output that in turn satisfies the customer's requirements.
The processes are distinguished in:
- Relevant process: It is a sequence of activities aimed at generating added value over an entry, in order to achieve a result that fully satisfies the objectives, strategies of an organization and customer requirements. One of the main characteristics that normally intervenes in the relevant processes is that these are interfunctional, being able to cross the organization vertically and horizontally. Key process: They are those processes extracted from the relevant processes that have a significant impact on strategic objectives and are critical to business success.
You can really talk about key or relevant process if it meets the following conditions:
- The inputs and outputs can be described. The process crosses one or more functional organizational limits. They are able to cross the organization vertically and horizontally. It answers the question what and not how. It has to be easily understood by anyone in the organization.
Basic requirements of a process.
- All processes must have a designated manager to ensure their continued compliance and effectiveness. All processes must have indicators that allow graphic evolution to be visualized. They have to be planned, ensure their compliance and that of the objectives established by the organization. All processes have to be audited to verify the degree of compliance and effectiveness of the same. For this it is necessary to document them through procedures.
For all this, it is recommended to periodically plan and carry out (approximately 3 years) a reengineering of key and relevant management processes to achieve spectacular improvements in certain parameters such as costs, quality, service and speed of response.
Each process must be recognizable in its individuality, visible in its connections and interactions with other processes and separable for its improvement. The precision of its scope and boundaries depends on the analysis plane adopted and this can determine if it will be focused as a superprocess or as a subprocess. The determination and movement of the analysis plane is vital, as are the criteria to classify them as relatively “key”, conjuncturally, or with a certain stability.
The Process Approach and Management is aimed at solving the deficiencies and
Weaknesses of the business environment and provide a more realistic and simple way of seeing and managing the company. Firstly, workflows and relationships in the sequence of internal clients become transparent, and the role of each one with respect to the common objective, which is now clearer for everyone, is also evident in the definition of jobs. those involved in each process.
3.5 Knowledge Management.
Knowledge Management consists of using technology to make relevant information accessible, wherever that information is found. Effective achievement of this goal requires the application of the appropriate technology for the appropriate solution.
Knowledge management incorporates systematic processes of finding, selecting, organizing and presenting information in a way that improves the understanding and use of business assets by its employees. » The main goal of knowledge management is to promote the intellectual capacity of the company among individual knowledge workers, who make the day-to-day decisions that, in aggregate, determine the success or failure of a business. "
Talking about organizational knowledge management involves the creation of support structures that facilitate knowledge flows and at the same time allow to leave a mark or memory as a result of making tacit knowledge explicit and converting it into explicit codes that lead to the definition of Organizational behavior and progressively acquiring their own identity.
Knowledge management involves moving to a level of analysis that identifies value-adding processes determined by the incorporation of new knowledge into business processes. Managing knowledge is equipping intelligence management systems to learn based on own and non-organizational experiences. It is the reuse of knowledge, doing where enrichment occurs and the appearance of new knowledge.
Organizational knowledge management is rooted in a dynamic of continuous improvement based on the management of capacities and intangible resources that permanently enrich the products and services offered by the organization and improve its competitive position. Continuous improvement implies the search for optimum levels of efficiency and at the same time implies increasing quality. It implies improvement and optimization in the sense of reducing inefficiencies and incorporation of previous experiences and reuse of practices that have been successful in other contexts.
Today, it is the nascent companies that are adopting knowledge management strategies from their early stages of development as organizations.
Its drivers realize that the key to success for companies seeking to survive in the new economy is in knowledge, and in knowledge workers, as the only real sources of enduring competitive advantage, knowledge is the prime mover.
Conclusions
From this research on Business Administration it can be concluded that:
- The Theoretical Foundation explains the main aspects that were addressed in research on management, its evolution, the administrative cycle and the manifestations of modern administration. According to the methodology of the administrative cycle, the strategic planning of a given organization can be evaluated. A vast knowledge on the part of the workers of the organizations in general about the administrative functioning of the same, which hinders the productivity and the commitment of those involved with the work they do. It is necessary to raise awareness in contemporary managers of new trends in management, which aim to generate change in organizations and offer leadership and personal fulfillment to their workers.
Bibliography:
- Fayol, Henri. Industrial and General Administration. Paris, 1916.Stoner, James F. Administration. Sixth edition Steiner, George A. Strategic Planning. CECSA. 1996. De Freitas, Christian Gerald. Historical process of the evolution of the administration. [email protected] Power Point. Guzmán, José. Young Entrepreneurs Leadership Link. 2002. Microsoft Power Point. Castellanos, Julio. Management Philosophy. Microsoft Power Point. Pedreira, Isabel. Knowledge management. PDF. Leadership in organizations and companies. PDF. Knowledge management. PDF.Strategic Management of the Company. An innovative approach to management. PDF. Fernández Arena, José Antonio. Administrative process. 1994.http: //www.dii.ude.cl/coliva/fayol.html
Annexes.
Annex 1. The 14 Principles of Administration. Henri Fayol:
- Division of labor. This principle is the same as Adam Smith's "division of labor". Specialization increases production by making employees more efficient. Administrators must issue orders. Authority gives you this right. However, authority goes hand in hand with responsibility. As long as authority is exercised, there will be responsibility. Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership, a clear understanding between management and workers, and the judicious use of penalties for rule violations. Unity of command. Every employee must receive orders from a single superior. Management unit.Each group of organizational activities that share the same objective must be directed by an administrator through the application of a plan. Subordination of individual interests to general interests. The interests of any employee or group of employees should not be more important than those of the organization as a whole. Remuneration. Workers must receive a fair wage for their services. Centralization. Refers to the degree to which subordinates participate in decision making. Whether it is centralized (in the administration) or decentralized (in the subordinates) is a matter of a correct proportion. The problem is to find the optimal degree of centralization for each situation. Chain of command.The line of authority from the top of the administration to the lowest levels represents the chain of command. Communications must follow this chain. However, if there are delays in following it, cross-communication may be allowed if all parties involved agree and bosses are informed. People and materials should be in the right place at the right time. Managers should be kind. and fair with their subordinates. Job stability. High staff turnover is ineffective. Management must plan its staff in an orderly manner and verify that replacements are available to fill vacancies. Employees who are allowed to originate and plan will make high levels of effort.Team spirit. Promoting team spirit will build harmony and unity within the organization.
BAGÓ, Laboratory of Human Resources Area. Organizational Culture Study. Santiago, Chile, 1999 - 2000.
To complement the information contained in this document, we suggest the following video tutorial, from Educatina, which synthesizes the evolution of the theories of administration. It is a tour of the main schools of administrative thought and the most important contributions of its highest representatives, you can learn about the postulates of: Taylor, Fayol, Mayo, Follet, Maslow, McGregor, Strauss, Sayles, Argyris, Likert, Weber, Mayntz, Etzioni, Kauffman, Simon and Drucker, among others. (20 videos - 1 hour, 45 minutes)
