This usually involves performing the storage and distribution of information to those within an organisation. A large number of roles within business require some element of administrative management. Anyone involved in the planning, co-ordinating, directing, or controlling aspects of a business can be considered an Administrative Manager. Administrative managers oversee the support operations of an organisation.
They ensure that there is effectuive information flow and that resources are employed effciently throughout a business. Strong administrative managers are organised and detail-orientated with good analytical skills to run day-to-day operations. They value the point-of-view of those who are expected to operate often complex systems.
With the speed of change in business it is important for administrative managers to stay up to date on developments in the business and office environment. Administrative managers generally work with a large array of people and may be leading teams where effective people management comes into play. This is one of the first areas for a business to prune if it wants to increase profits. And cash-flow really is a significant issue.
While businesses will have their own typical office expenses, there are several categories that most would consider standard. The types of expense are of course different. But one thing remains the same: companies need to find an easy way to pay for these and track their costs. This is mostly a technical distinction to help you separate operational costs from revenue-generating one s.
Toptal ]. Of course, remote culture has a long way to go. And for now, most businesses maintain a fixed address. Companies are usually happy to offer some nature of food and drink to keep team members at their best.
At the very least, tea and coffee are usually provided. Some businesses will add biscuits or fruit to stave off mid-morning or afternoon hunger pangs. And large corporations and factories even have cafeterias that provide hot lunches for workers. For instance, this is required in France for companies over a certain size. Otherwise, meal vouchers need to be given to staff to ensure they have a suitable meal. Food and drink are just one example of a growing number of employee perks in modern workplaces.
On top of food and drink, employees often enjoy other benefits. These can range anywhere from a team meal at a restaurant for new staff, to a weekly yoga class, to the annual Christmas party. Regular, ongoing expenses are usually relatively easy to manage. If every employee is entitled to a Spotify Premium account, you know roughly how much that will cost you monthly since you know the number of staff. But parties and lunches can also be expensive. Consistent spending is always much easier to manage.
And if you know the process, does everyone else? The main office furniture costs come upfront. But you also have the small, ongoing expenses that continue to crop up.
As above, any one-off expenses can be tricky to manage. You want to move quickly and get the new furniture in place immediately, but you also need to keep clear records and pay for things correctly. The most obvious electronic expense in modern businesses is of course computers. Pretty much everyone needs one, plus a screen, keyboard, and mouse. These costs tend not to be directly related to the production of goods or services of a business and are usually excluded from gross margins.
Companies incur administrative expenses in order to perform basic operations e. On the income statement , administrative expenses appear below cost of goods sold COGS and may be shown as an aggregate with other expenses such as general or selling expenses.
Some administrative expenses are fixed in nature, as they are incurred as part of the foundation of business operations. These expenses would exist regardless of the level of production or sales that occur. Other administrative expenses are semi-variable. For example, a business will always use some minimum level of electricity to keep the lights on. Beyond that point, it can take measures to reduce its electric bill.
Because a business can eliminate administrative expenses without a direct impact on the product it sells or produces, these costs are typically first in line for budget cuts. Management is strongly motivated to maintain low administrative expenses relative to other costs, as this allows a business to utilize leverage more effectively.
The sales-to-administrative expense ratio helps companies to measure how much sales revenue is being portioned to covering administrative costs. Companies can deduct from their tax returns administrative expenses that are reasonable, ordinary, and necessary for business operations. These expenses must be incurred during the usual course of business and deducted in the year they are incurred.
Wages and benefits to certain employees, such as accounting and IT staff, are considered administrative expenses. All executive compensation and benefits are considered an administrative expense. Building leases, insurance, subscriptions, utilities, and office supplies may be classified as a general expense or administrative expense. Depending on the asset being depreciated, depreciation expenses may be classified as a general, administrative, or selling marketing expense.
Organizations may choose to include consulting and legal fees as an administrative expense as well. To get the full picture of the costs associated with running certain business units, a company may allocate out administrative expenses to each of its departments based on a percentage of revenue, expenses, square footage, or other measures.
Most of our vocational and on-the-job training programs are largely concerned with developing this specialized technical skill. This skill is demonstrated in the way the individual perceives and recognizes the perceptions of his superiors, equals, and subordinates, and in the way he behaves subsequently. The person with highly developed human skill is aware of his own attitudes, assumptions, and beliefs about other individuals and groups; he is able to see the usefulness and limitations of these feelings.
By accepting the existence of viewpoints, perceptions, and beliefs which are different from his own, he is skilled in understanding what others really mean by their words and behavior. He is equally skillful in communicating to others, in their own contexts, what he means by his behavior.
Such a person works to create an atmosphere of approval and security in which subordinates feel free to express themselves without fear of censure or ridicule, by encouraging them to participate in the planning and carrying out of those things which directly affect them.
He is sufficiently sensitive to the needs and motivations of others in his organization so that he can judge the possible reactions to, and outcomes of, various courses of action he may undertake. Having this sensitivity, he is able and willing to act in a way which takes these perceptions by others into account.
Real skill in working with others must become a natural, continuous activity, since it involves sensitivity not only at times of decision making but also in the day-by-day behavior of the individual. Because everything which an executive says and does or leaves unsaid or undone has an effect on his associates, his true self will, in time, show through.
It must become an integral part of his whole being. Because human skill is so vital a part of everything the administrator does, examples of inadequate human skill are easier to describe than are highly skillful performances.
Perhaps consideration of an actual situation would serve to clarify what is involved:. When a new conveyor unit was installed in a shoe factory where workers had previously been free to determine their own work rate, the production manager asked the industrial engineer who had designed the conveyor to serve as foreman, even though a qualified foreman was available.
Then this conversation took place:. I want you to keep this conveyor going at all times except for rest periods, and I want it going at top speed. Get these people thinking in terms of 2 pairs of shoes a minute, 70 dozen pairs a day, dozen pairs a week. I want you to make that base rate of dozen pair a week work! These people have never seen a conveyor.
You have to set a base rate low enough for them to make. Once they know they can make the base rate, they will go after the bonus. Here is a situation in which the production manager was so preoccupied with getting the physical output that he did not pay attention to the people through whom that output had to be achieved.
Notice, first, that he made the engineer who designed the unit serve as foreman, apparently hoping to force the engineer to justify his design by producing the maximum output. However, the production manager was oblivious to a the way the engineer perceived this appointment, as a demotion, and b the need for the engineer to be able to control the variables if he was to be held responsible for maximum output.
Instead the production manager imposed a production standard and refused to make any changes in the work situation. Moreover, although this was a radically new situation for the operators, the production manager expected them to produce immediately at well above their previous output—even though the operators had an unfamiliar production system to cope with, the operators had never worked together as a team before, the operators and their new foreman had never worked together before, and the foreman was not in agreement with the production goals or standards.
As used here, conceptual skill involves the ability to see the enterprise as a whole; it includes recognizing how the various functions of the organization depend on one another, and how changes in any one part affect all the others; and it extends to visualizing the relationship of the individual business to the industry, the community, and the political, social, and economic forces of the nation as a whole. Recognizing these relationships and perceiving the significant elements in any situation, the administrator should then be able to act in a way which advances the over-all welfare of the total organization.
Hence, the success of any decision depends on the conceptual skill of the people who make the decision and those who put it into action.
When, for example, an important change in marketing policy is made, it is critical that the effects on production, control, finance, research, and the people involved be considered.
And it remains critical right down to the last executive who must implement the new policy. If each executive recognizes the over-all relationships and significance of the change, he is almost certain to be more effective in administering it. Consequently the chances for succeeding are greatly increased. Not only does the effective coordination of the various parts of the business depend on the conceptual skill of the administrators involved, but so also does the whole future direction and tone of the organization.
Conceptual skill, as defined above, is what Chester I. Here is one instance:. In a large manufacturing company which had a long tradition of job-shop type operations, primary responsibility for production control had been left to the foremen and other lower-level supervisors. A heavy influx of orders following World War II tripled the normal production requirements and severely taxed the whole manufacturing organization.
At this point, a new production manager was brought in from outside the company, and he established a wide range of controls and formalized the entire operating structure. As long as the boom demand lasted, the employees made every effort to conform with the new procedures and environment.
But when demand subsided to prewar levels, serious labor relations problems developed, friction was high among department heads, and the company found itself saddled with a heavy indirect labor cost. Management sought to reinstate its old procedures; it fired the production manager and attempted to give greater authority to the foremen once again. However, during the four years of formalized control, the foremen had grown away from their old practices, many had left the company, and adequate replacements had not been developed.
Without strong foreman leadership, the traditional job-shop operations proved costly and inefficient. In this instance, when the new production controls and formalized organizations were introduced, management did not foresee the consequences of this action in the event of a future contraction of business.
Later, when conditions changed and it was necessary to pare down operations, management was again unable to recognize the implications of its action and reverted to the old procedures, which, under the circumstances, were no longer appropriate.
This compounded conceptual inadequacy left the company at a serious competitive disadvantage. We may notice that, in a very real sense, conceptual skill embodies consideration of both the technical and human aspects of the organization. Yet the concept of skill, as an ability to translate knowledge into action, should enable one to distinguish between the three skills of performing the technical activities technical skill , understanding and motivating individuals and groups human skill , and coordinating and integrating all the activities and interests of the organization toward a common objective conceptual skill.
This separation of effective administration into three basic skills is useful primarily for purposes of analysis. In practice, these skills are so closely interrelated that it is difficult to determine where one ends and another begins. However, just because the skills are interrelated does not imply that we cannot get some value from looking at them separately, or by varying their emphasis.
Also, under different playing conditions the relative importance of these elements varies. Similarly, although all three are of importance at every level of administration, the technical, human, and conceptual skills of the administrator vary in relative importance at different levels of responsibility. Technical skill is responsible for many of the great advances of modern industry.
It is indispensable to efficient operation. Yet it has greatest importance at the lower levels of administration. As the administrator moves further and further from the actual physical operation, this need for technical skill becomes less important, provided he has skilled subordinates and can help them solve their own problems.
At the top, technical skill may be almost nonexistent, and the executive may still be able to perform effectively if his human and conceptual skills are highly developed.
For example:. In one large capital-goods producing company, the controller was called on to replace the manufacturing vice president, who had been stricken suddenly with a severe illness. The controller had no previous production experience, but he had been with the company for more than 20 years and knew many of the key production personnel intimately. By setting up an advisory staff, and by delegating an unusual amount of authority to his department heads, he was able to devote himself to coordination of the various functions.
By so doing, he produced a highly efficient team. The results were lower costs, greater productivity, and higher morale than the production division had ever before experienced.
Other examples are evident all around us.
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