EXCEL BUSSINESS ACADEMY

MEANING OF BUSINESS
Business refers to economic activities concerned with the production and sales of the goods
and services for the purpose of earning profit. It may be noted that production or purchases of goods
and services for one’s own consumption cannot de called business . in other words , business is
concerned only with that part of production which is exchanged with others for profit.

Few definitions given by eminent authorities ,

In the words of URWICK and HUNT , “Business is any enterprise engaged in the
production and distribution of goods for sale in a market which other community need and
are willing to pay for’’ .

According to HANEY, “Business may be defined as human activity directed towards

producing or acquiring wealth through buying and selling of goods”.

MEANING OF MANAGEMENT

Management is a universal process. It has its place not only in business enterprise but also in
political, military,religious,charitable and educational institutions infact it has its place in any
organized activity which involves the getting to-gether of individuals in a group for the realization
of definite common goals.

Popularly the term ‘management’ is used to refer the group of managerial personel of an
enterrise. In short it is used to refer to a process, function or activity.

So let us consider some definition’s

According to HENRY FAYOL, “To manage is to forecast and to plan, to organize, to

command, to co-ordinate and to control”.

In the words of STANLEY VANCE, “Management is simply the process of decision-

making and control over the actions of human beings for the express purpose of attaining
predetermined goals”.
P
O
ffi
a
t
S
s
e
r
D
C
g
ti
lin
o
c EXCEL BUSSINESS ACADEMY

FUNCTIONS OF MANAGEMENT
Management operates through various functions, often classified as planning, organizing,
leading/directing, and controlling/monitoring.

 Planning:
The process by which deciding what needs to happen in the future and generating plans for
action.

 Organizing:
The process by which the structure and allocation of jobs are required.
 Staffing:
The process by which managers select, train, develop, motivate, retire subordinates.
 Directing:
 EXCEL BUSSINESS ACADEMY

The process by which the function of guiding and supervising the activities of the
subordinates.

 Controlling/Monitoring:
The process by which it helps in keeping the organizational activities on the right path and
aligned with plans and goals.
 Decision Making:
The process by which the selection of best alternatives out of various possible alternatives.
 Motivation :
Motivation is also a kind of function of management, because without motivation, employees
cannot work effectively. If motivation doesn't takes place in an organization, then employees
may not contribute to the other functions.
 Leadership:
The process by which influencing the actions of a person or a group to attain desired goals.
 Communication:
It is the transfer of information and understanding from one person to another.It is a way of
reaching others with ideas,facts,and thoughts.Communication is important in
organizations,because managers can accomplish very little without it.

MEANING OF BUSINESS ADMINISTRATION

Business administration is the process of managing every aspect of a business in

order for it to maintain its growth or stability, depending on the overall goal of the owner or
owners.

Business administration means organizing and directing the activities of a business.

An MBA, or master of business administration, degree is a postgraduate degree from a

University with a business school that teaches management.Essentially, the program covers the
structure and purpose of a business and its various functions, and the tools needed to manage
these functions.

In business, administration consists of the performance or management of business

operations and thus the making or implementing of major decisions. Administration is the
universal process of organizing peoples. Administration is the function in industry
 EXCEL BUSSINESS ACADEMY

concerned with determination of the corporate policy,the coordination of

finance,production,and distribution.

ADMINISTRATIVE FUNCTIONS

There are 5 elements of administration"

Planning

It is deciding in advance what to do, how to do it, when to do it, and who should do it

Organizing

It involves identifying responsibilities to be performed, grouping responsibilities into

departments or divisions, and specifying organizational relationships.

Directing

It is leading people in a manner that achieves the goals of the organization. This involves
proper allocation of resources and providing an effective support system.

Budgeting

Most of the administrative functions, beginning with the implementation of a budget

plan through the application of budget controls.

Difference between Business management and Business administration

Business administration focuses on preparing students for the decision making

roles within an organization.

Business management focus is on management aspects: improving

communication, productivity, effectiveness and efficiency and aligning resources,
basically, implementing the decisions made by administrators.

In corporate,Business administration organizing the business activities and

making decisions for organization growth. Administration emphasizes the more
managerial aspects of what goes on in the organization and how it is administered to
 EXCEL BUSSINESS ACADEMY

bring about the business aspects. A business administrator presides over the daily
operations of an organization.

Business management organizing the peoples and generating plans for peoples.
At times, managers can also handle training programs of new or current employees. The
manager plays the most important role in employee motivation. A business manager is
responsible for running the business day-to-day.

In the practical world of business, they are very similar, and generally have
identical functions and responsibilities. Such as Planning, Organizing, Direction,
Decision making.

POINTS OF DISTINCTION BUSINESS ADMINISTRATION BUSINESS MANAGEMENT

Nature Thinking Business Function Doing Business function

(What is to be done and when) (Who should do it and how)

Scope Determines objectives and Implements plans and achieves

policies goals through people

Skills needed Conceptual and human skills Technical and human skills

Usage Mostly in Corporate, Mostly in business

Government, military, social Organizations.
organizations.
Distinction between Business administration and Business Management
 EXCEL BUSSINESS ACADEMY

Types of Business

ORGANISATIONAL SYSTEM

MEANING OF ORGANISATION

An organization is a social arrangement which pursues collective goals, controls its own
performance, and has a boundary separating it from its environment. The word itself is derived from
the Greek word “organon”, itself derived from the better-known word “ergon”.

Organization is the arrangement of the larger units of meaning in a paper. That's one of the things that
are going to be very different from one course to the next. What are the expected patterns of organization? A
lab report is very different from a scientific report, is very different from a poem, is very different from a
report in the newspaper. All of these have their own patterns of organization, all of which are acceptable in
specific disciplines.

Organization typically refers to the large elements of text structure. Sometimes these elements are
formalized in practice, as in the typical lab report, through consistent use of headings. Sometimes elements of
organization are only informally acknowledged -like the thesis of an academic paper. Most writers across the
university would agree, however, that organization refers to the ordering of ideas.

Organization is thus: 
 EXCEL BUSSINESS ACADEMY

(i) A system

(ii) Established structure

(iii) People work and deal with each other in coordinated and cooperative way.

(iv) Grouping work

(v) Established relationship for authority and delegation

(vi) Attainment of common goal of the enterprise

(vii) Definition of functional role of each personnel and outline of his responsibility for business
performance.

Types of organization

There are 5 types of an organization

1.Line Organization

Line organization is the simplest form of organization.This is known by different names such
as military,vertical,scalar and departmental.Authority flows in a direct line from superiors to
subordinates.Each employee knows who his/her superior is and who has authority to issue
orders.The one-man one-boss principle is strictly applied.Managers have full authority in their own
areas of operation and are responsible for final results.Each subordinate is directly responsible for
the performance of assigned duties.If the subordinates fail to carry out reasonable orders or
directives,the superior har right to take disciplinary action.Authority flows downward and
responsibility flows upward throughout the organization.

Line organization structure

Production Manager
 EXCEL BUSSINESS ACADEMY

Foreman A Foreman B Foreman C

Workers Workers Workers

2. Line and Staff Organization

The line-and-staff organization combines the good features of both the line organization and Functional
organization.The staff specialists provide advice and support to the line line managers in getting the work
done.Staff specialists concentrate on a narrow portion of the organization’s activities.However their authority
is purely advisory.not functional.The line organization is supreme and staff organization is created to service
it.The role of staff is considered a service to managers. In Line and Staff Organization ,There are two
managers,such as Line Managers and Staff Managers.The line Managers perform the function of
decision making,issuing orders and controlling while the Staff managers perform the functions of
advising,assisting and providing expert and specialized services.
 EXCEL BUSSINESS ACADEMY

1. Functional Organization

In Functional Organization ,all activities in the enterprise are grouped together according to
certain functions like production,marketing and personnel and put under the charge of different
persons.The person- incharge of a function follows it throughout the organization and also controls
the individuals working in the functional area.This means that if a person performs several
functions,he/she will be under the direct charge of several persons-incharge of these functions. Each
functional area is put under the charge of functional specialists and he has got the authority to give
all decisions regarding the function whenever the function is performed throughout the enterprise.
The functional incharge is an expert in his own field.
 EXCEL BUSSINESS ACADEMY

General Manager

Personnel Finance Production Marketing

Manager Manager Manager Manager

2. Project of Matrix Organization

The Project of Matrix organization is the combination of the Project organization and the Matrix
organization.The Matrix organization is the combination of the Project organization and the
Functional organization.This is one of the latest types of organizational design.It has been developed
to establish flexible structure to achieve series of project objectives. Matrix Organization ,also
known as grid,is an answer to the growing size and complexity of the undertaking, which require an
organization structure more flexible.

Authority flows vertically in functional departments. They focus on project teams, bringing
skilled individuals together from different parts of the organization. Individuals were made
responsible both to their line manager and the project manager involved. A matrix organization
structure is an organizational reporting structure commonly used for project-based teams.
EXCEL BUSSINESS ACADEMY
 EXCEL BUSSINESS ACADEMY

Committee Organization

Committee is a group of individuals designated to take decision in matters referred to it through free
exchange of ideas among its members.

Committees may be classified in various types.

Standing committees or ad hoc committes

A committee may be Permanent or temporary in character. A standing committee has permanent

existwnce while adhoc committee is constituted for a specific purpose.

Decision-making committees

A committee may be delegated authority to make a final decision on the problems.

Line or staff committees

This committees is charged with the authority of decision making affecting subordinates responsible
to it.
 EXCEL BUSSINESS ACADEMY

Types of Ownership

A business ownership should be structured according to the needs of the owners and potentially
liability that the business could incur. The different types of business ownership are

There are 8 Types.

1. Sole proprietorship
2. Partnership
3. Corporation
4. Public Limited Company
5. Private Limited Company
6. Limited Liability Company
7. Unlimited Liability Company
8. Franchise

1. Sole proprietorship
 EXCEL BUSSINESS ACADEMY

These firms are owned by one person,usually the individual who has day-to-day
responsibilities for running the business. Sole proprietors own all the assets of the business and the
profits generated by it. They also assume complete responsibility for any of its liabilities or debts.
This is the Easiest and least expensive form of ownership to organize. the business and the owner are
one and the same.

2.Partnership

The partners should have a legal agreement.Partnership is a type of business ownership

where two or more people shares the ownership of the company and the profits or losses are equally
divided among these owners. partners are personally liable for all business debts and obligations,
including court judgments.A partnership is not a separate tax entity from its owners. This means the
partnership itself does not pay any income taxes on profits. Business income simply "passes
through" the business to the partners, who report their share of profits (or losses) on their individual
income tax returns.

Corporation:

A corporation chartered by the state in which it is headquartered is considered by law to be a unique

entity, separate and apart from those who own it. A corporation can be taxed, it can be sued, and it
can enter into contractual agreements. The owners of a corporation are its shareholders.The
shareholders elect a board of directors to oversee the major policies and decisions. the corporation
has life of its own and does not dissolve when ownership changes.

Public Limited Company

The public limited companies are a type of business ownership that has very little amount of
liability. These companies have a lot of shareholders. A Company owned by shareholders. Public
companies are strictly regulated, and are required by law to publish their complete and true financial
position so that investors can determine the true worth of its shares.

Private Limited Company

 EXCEL BUSSINESS ACADEMY

A Company owned by shareholders. A limited number of shares are issued, these are owned
by family and friends of the business. The business has limited liability. Private limited companies
are mainly small or medium sized business enterprises. They are normally owned by a particular
family or by a small group of businessmen and the ownership rights are divided among these
owners. All the business decisions are subjected to the approval of all these owners or at least the
majority of these owners.

LIMITED LIABILITY

Shareholders are only responsible for the company’s debts up to the value of their
shareholding. The LLC is a relatively new type of hybrid business structure that is now permissible
in most states. It is designed to provide the limited liability features of a corporation and the tax
efficiencies and operational flexibility of a partnership.

UNLIMITED LIABILTY

A legal obligation on the owners of the business to pay all debts of the business. Even their
personal possessions may be claimed. Unlimited liability is a reference to the level of responsibility
held by the owner or an investor in relation to the function of a business operation. When the
liability is unlimited, there is a chance that the personal assets of the principal parties can be drawn
upon to settle debts or claims against the business. This means that owners and investors involved
with a limited liability company can easily stand to lose everything in the event of a corporate
failure.

Franchise

Franchise is one of the newest forms of business ownership. It is very much in vogue
nowadays, especially in the United States of America. In case of a franchise, the owner gets the right
to market and sell the products of another business entity that has already established itself in the
market.
 EXCEL BUSSINESS ACADEMY

MISSION, VISION AND GOALS OF COMPANY

MISSION

The mission is the broadest statement of what an organization wants to achieve on an on-going
basis. It provides a vision of what the organization is trying to achieve. The mission is the
foundation and direction upon which all subsequent definitions are based. To define the mission, the
organization must answer the following questions:

 Why does the organization exist? What is its purpose?

 What is its scope of operations?

 What unique characteristics does the organization possess?

 Who are the organization’s clients or customers?

VISION

It describes an ideal future.Describes the path that the Company will take in the coming years.
It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

GOALS OF ORGANISATION

A goal describes a high-level target state that an organization desires to achieve over the long-term
(three to five years). Objectives are more specific statements that describe what the organization wants to
accomplish in the short-term (twelve months or less). The successful completion of short-term objectives
should contribute to the achievement of long-term goals.

A goal or objective is a projected state of affairs that a person or a system plans or intends to achieve
a personal or organizational desired end-point in some sort of assumed development. Many people endeavor
to reach goals within a finite time by setting deadlines.
EXCEL BUSSINESS ACADEMY