Everything you need to know about the key differences between the Administration and Management.
In the study of management literature the use of these two terms of ‘Administration’ and ‘Management, has been a controversial issue and most of the eminent writers do not find any difference between the two terms, while there are writers who maintain that ‘Administration’ and ‘Management’ has got two different functions.
According to Oliver Sheldon “Management is a lower level function and is concerned with the execution of policies laid down by administration.”
But English Authors like Breech and others have written that management is a wider term which includes administration. The terms ‘management’ and ‘administration’ are controversial in nature.
Different authors have expressed different views on these terms. Some make distinction between the two while others consider them as same. The words ‘Administration and Management’ are often confused with each other.
Oliver Sheldon has summarized this distinction as follows “Administration is the function in industry concerned with the determination of the corporate policy, the coordination of finance, production and distribution, the setting of the compass of the organization and the ultimate control of the executive.
Difference Between Administration and Management
Difference between Administration and Management
The term ‘management’ and ‘administration’ have been used by different management authorities in such a manner that at some places they seem to be one and the same at some other places them seem to be different. So management literature presents a serious difficult and controversy to the beginners because of the use of these two terms.
In fact, the words like “Business Management and Administration” have been so variedly used and defined that it has been lost its shape. Here, we shall concentrate on the controversy whether the ‘management and Administration’ are different or one.
Three View Points:
There are three viewpoints in this respect. According to the first view, management and administration are two different functions. The second view regards management as a general term including administration which is considered to be a narrow function. The supporters of the third view do not make any distinction between the two terms and use them ‘interchangeable’.
Let us examine their three views one by one:
(a) Management and Administration are Different:
Oliver Sheldon, Newman, William, Spreigel and Tead are the names of certain management experts who differentiate Management and Administration. Oliver Sheldon is believed to have initiated the distinction between administration and management in 1923. In his opinion, “Administration is the function in the industry concerned with the determination is the corporate policy, the co-ordination of finance, production and distribution, the settlement of the structure of the organization under the ultimate control of the executive.”
Management proper, he holds, “is the function in industry concerned in the executive of policy, within the limits set-up by administration and the employment of the organization for the particular objects before it,”
Florence and Tead also support this view and regard administration as the process of thinking (policy-making) and management as the process of actual operation (policy execution).
William Spiegel also makes the distinction between management and administration. He states that “Administration is a determinative function. Management on the other hand, is executive function that is primarily concerned with carrying out the broad policies laid down by the administration.”
Thus, according to this view, the authority of administration is above management at higher levels, the managerial authority is more concerned with administrative functions and less with managerial activities. At lower levels, the reverse is the case.
(b) Administration is a Part of Management:
The second view has been subscribed by Breach. He has used ‘management’ in the sense of an all-inclusive function. He regards management as the generic term for the total process of executive control and he regards ‘administration’ as that part of management which is concerned with the installation and carrying out of the procedures by which the progress of activities is regulated and checked against plans.
Breach has divided management into three levels:
(i) Top management concerned with formulation of policy and having a hand in co-ordination and motivation of the personnel;
(ii) Functional management concerned with the co-ordination motivation, planning and controlling the activities of various departments; and
(iii) Lower levels management concerned with supervision and expert decisions on operations and day-to-day activities.
In this classification of Breach, top management can be known as administration while functional management may be termed as management.
(c) Management and Administration are One:
The third view is held by Fayol who makes no distinction between the two terms. This view has been supported by Koontz and O’Donnell, Allen, Earl P, Strong and Terry also. There is no distinction between management and administration was pointed out by Fayol in his address the second International Congress of Administrative Science- “All undertaking requires planning, organization, command, co-ordination and control and in order to function properly, all must observe the some general principles. We are no longer confronted with several administrative sciences but with one which can be allied equally well to public and to private affairs.”
The only difference is of terminology. Persons who discharge management function in industry or business are called ‘executive’ or managers; while in public administration they are known as Administrator’s.
Conclusion:
In actual working of business concerns, it is difficult to indicate clearly what functions belong to administration and which ones are the concerns of management. This distinction of administration and management is only a subject of academic discussion. In actual life they are common.
The chairman of the Board of Directors of a company (Management Directors) will, for example, is concerned both with policy making and execution of plans. For this reason, no distinction is made between management and administration and the both terms are used interchangeably.
Difference between Administration and Management
Difference # Administration:
i. It is primarily concerned with the determination of objectives and broad policies. It is a thinking function.
ii. Generally it takes major decisions and is wider term than management.
iii. It is a top management function.
iv. It consists of the owners of an enterprise.
v. It is used in relation to government, military, educational and religious organization.
vi. Its decisions are generally influenced by external factors like social, political, legal etc.,
Difference # Management:
i. It is a doing function.
ii. It involves the implementation of plans and policies.
iii. It takes decisions within the frame work of administration.
iv. It is a lower level management function.
v. It consists of managerial personnel with specialized knowledge who may be employees of the enterprise.
vi. It is used mainly in business firms which have economic motives such as MNC’s and private sectors organizations. Its decisions are influenced by internal factors such as values, beliefs, opinions, approaches and philosophies of the management.
Difference between Administration and Management
In the study of management literature the use of these two terms of ‘Administration’ and ‘Management, has been a controversial issue and most of the eminent writers do not find any difference between the two terms, while there are writers who maintain that ‘Administration’ and ‘Management’ has got two different functions.
According to Oliver Sheldon “Management is a lower level function and is concerned with the execution of policies laid down by administration.” But English Authors like Breech and others have written that management is a wider term which includes administration.
There are three schools of thought holding three divergent views:
(1) One school of thought believes that administration and management are the synonyms and they should be treated as such.
(2) The second school of thought believes that administration lays down the policies and provides leadership whereas the management is mainly responsible for execution and supervision.
(3) The third school of thought emphasises that management is a broader term within which administration can be absorbed.
According to G. E. Millwork – “Administration is primarily the process and the agency used to establish the object or purpose which an undertaking and its staff are to achieve; secondly, administration has to plan and to stabilise the broad lines or principles which will govern action.
These broad lines are in their turn usually called policies.” Administration determines the corporate organisation climate and structure and it acts as the central controlling authority in the organisation.
While “Management is the process and the agency through which the execution of policy is planned and supervised.” It is entrusted with the task of determination of corporate objectives, formulation of plans and policies, co-ordination of all functional areas of business and overall control and supervision of the entire business.
Difference between Administration and Management
The important distinctions between the two are as follows:
(1) The Process of Determination:
Administration is the process of determining the object to be achieved. While management is the process of planning the work as per the object laid down by the administration.
(2) Lays Down Policies:
Administration lays down the policies and principles while the management executes the polices and programmes.
(3) Prepares Framework:
Administration prepares the framework under which one is asked to work and execute; while the management supervises and controls the execution of assigned work.
(4) Provides Direction:
Administration provides directions, guidance and leadership while management co-ordinates the various activities.
(5) Provides Guidelines:
Administration is the first and provides guidelines to the management while management comes second, follows the administration and derives strength from administration.
Difference between Administration and Management
At the initial level of development of management thoughts no distinction between management and administration was made and both the terms were used interchangeably.
In 1923 the terminological conflict between the two was raised by Oliver Sheldon when he emphasised administration as decision making function and managements as execution function. After that there have been lots of controversies between these terms.
These controversies have resulted into three different approaches:
i. Administration is above management.
ii. Administration is a part of management.
iii. Administration and management are the same.
i. Administration is above Management:
According to many classic thinkers administration is above management so far as different functions in the organisation are concerned. They perceived that both administration and management are different, though both of these activities may be performed by a single individual in an organisation. The general view is that administration relates to policy formulation and management relates to policy execution and these two activities are not the same.
According to Milward, administration is primarily the process and agency used to establish the objective or purpose which an undertaking and its staff are to achieve. Secondly administration has to plan and to stabilise the broad lines or principles which will govern action.
These broad lines are usually called policies. Management is the process and agency through which execution of policy is planned and supervised.
The basic approach is that administration determines the basic frame works of the organisation within which managerial function are undertaken.
ii. Administration is a Part of Management:
This approach holds the view that management is a comprehensive term and administration is its part.
Brech has taken management “as the generic name for the total process of executive control in industry or commerce”.
He defines management as “a social process entailing responsibility for the effective and economical planning and the regulation of the operation of an enterprise in the fulfillment of given purpose or task”.
He defines administration as- that part of management which is concerned with the installation and carrying out of the procedures by which it is laid down and communicated and the process of activities regulated and checked against plans.
According to this approach administration becomes a subordinate function to overall management function and such administration, which is concerned with day-to-day executive routine work, is a part of management.
iii. Management and Administration are Same:
According to this third approach which is most popular and practical one, management and administration are same. Both involve the same functions, principles and objectives.
Fayol observes that “all undertakings require planning, organizing, command, coordination and control and in order to function properly all must observe the same general principles. We are no longer confronted with several administrative science but with one which can be applied equally well to public and private affairs.”
Difference between Administration and Management
Difference # Administration:
Administration consists of determination of the goals and policies of the enterprise.
Administration is concerned mainly with decision making, policy making and making necessary adjustments.
Three main elements of administration are:
a. Formulation of goals
b. Choice of ways and means
c. Direction of people in some group purposes.
Administration makes policies and decides the goals and target to be achieved. It is not directly concerned with the implementation of policies.
1. The functions of administration are legislative and largely determinative.
2. Administration does not need technical ability.
3. It is not productive in character.
4. Administration coordinates finance, production and distribution.
5. It frames the organisational structure and exercises control over the enterprise.
6. Administration relates to top level management.
An administrator:
a. Organises his work and that of his subordinates.
b. Delegates responsibility and authority.
c. Measures, evaluates and controls position activities.
Difference # Management:
I. Management may be labeled as the art of getting work done through people with satisfaction for employee and the public.
II. Management includes directing, coordinating and controlling efforts towards the fulfilment of the goals of the enterprises.
III. Management may be called an art as well as science. Management is an executive function which actively directs human efforts towards common goals.
IV. The main characteristics of management are to integrate and apply the knowledge and analytical approaches developed by numerous other disciplines.
V. Management does not frame policies. It only implements the policies laid down by administration.
VI. The functions of management are executive and largely governing.
VII. Management is the service provider for administration.
VIII. Management requires technical ability to function properly.
IX. Management uses organisation for achieving the goals of an enterprise.
X. Management is productive in character.
XI. Planning, organising, staffing, motivating, directing, coordination and control are the functions of management.
XII. There are different levels in management i.e. top level and middle level management.
Difference between Administration and Management
The terms ‘management’ and ‘administration’ are controversial in nature. Different authors have expressed different views on these terms. Some make distinction between the two while others consider them as same.
Different thoughts on the subject are discussed below:
I. Management and Administration are different
II. Management and Administration are same
I. Management and Administration are Different:
Management theorists who consider management and administration as different hold two viewpoints. According to one viewpoint, administration is above management and management is part of administration and according to the other, management is above administration and administration is part of management.
1. Administration is above Management:
This view is advocated by the American authors’ viz., Oliver Sheldon, Spriegal, Theo Haimann, Mc Farland etc. According to them, administration is a higher level function of framing policies, plans, objectives, etc. and management is a lower level function concerned with implementation of the policies.
According to Oliver Sheldon, “Administration is concerned with the determination of corporate policy, the co-ordination of finance, production and distribution, the settlement of the compass of the organisation and the ultimate control of the executive. Management proper is concerned with the execution of policy, within the limits set up by administration and employment of the organisation in the particular objects set before it. Administration determines the organisation; management uses it. Administration defines the goal, management strives towards it.”
According to this viewpoint, thus, administration is a top-level function concerned with framing the organisational plans and policies. Management is a lower-level function concerned with implementation of plans and policies framed by the top-level administrators.
Administration deals with policy formulation and management deals with policy execution. Administration is, therefore, broad and conceptual and management is narrow and operational.
2. Management is above Administration:
This view point on administration and management is advocated by the British authors, viz., Breech, Kimball and Kimball, Richman etc. This view is opposite to the one advocated by the American authors. According to Breech, “Management is a social process entailing responsibility for the effective and economic planning and regulation of the operation of an enterprise in fulfilment of a given purpose or task. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which the programme is laid down and communicated and the progress of activities is regulated and checked against plans”.
Thus, according to this viewpoint, management is a top-level function concerned with framing organisational plans and policies. Administration is a lower-level function concerned with implementing the plans and policies.
II. Management and Administration are the Same:
Authors like Chester Bernard, George R. Terry, Koontz and O’ Donnell etc. have advocated this viewpoint on interpretation of the terms ‘management’ and ‘administration’. According to them, two terms are the same. The difference is not in their meaning, but in their application.
Administration and management are not performed by different people. Both administration and management are performed by managers at all levels – top, middle and low. While managers at top level perform more of administration, those at lower level perform more of management. In fact, management can be administrative management (that deals with laying down policies) and operative management (that deals with execution of policies).
It is also asserted that both administration and management involve the basic functions of planning, organising and controlling. The difference lies in their application rather than meaning. The term ‘administration’ is generally used in government organisations and ‘management’ is used in business organisations.
Thus, different sets of people do not perform different sets of functions. However, the relative importance of these functions varies at different levels. While policy formulation is done at higher levels, the execution is done at lower levels. It is not really material whether policy formulation or execution is called administration or management.
Difference between Administration, Management and Organisation
Millwork, thus had a clear-cut idea about the function which the three words are to perform. In fact he has drawn a clear line of demarcation.
To bring out a clear distinction between the three terms the following points has been explained:
Difference # Administration:
1. It is the process of determining the object to be achieved.
2. It lays down the policies and principles.
3. It prepares the frame work under which one is asked to work and execute.
4. It provides-
(a) Direction
(b) Guidance, and
(c) Leadership.
5. It is the first and provides guidelines to the management and organisation.
Difference # Management:
1. It is the process of planning the work as per the object laid down by the administration.
2. It executes the policies and programmes.
3. It supervises and controls the execution of assigned work.
4. It co-ordinates activities.
5. It comes second follows the administration and derives strength from Organisation
Difference # Organisation:
1. It is the process of dividing the work into different tasks and duties as planned by the management within the objectives.
2. It organises the work.
3. It draws out the line of authority and determines the line of action.
4. It delegates the authority and fixes responsibility.
5. It occupies the third place and solely responsible for what management has planned and administration has set.
The controversy, whether ‘Administration’ and ‘Management’ the most commonly and misinterpreted words are synonyms, is still very much alive and has not been laid to rest. ‘Organisation’ has now come to occupy a distinct place and is separately recognised as an important part of management and as such there is no controversy so far as the organisation as an independent branch of study is concerned. This now is not considered to be synonym to that of administration and management.
Difference between Administration and Management
In business firms, administration refers to the higher and policy-determining levels. Administration is concerned with the determination of overall corporate objectives, policies and master strategies. It concentrates on the co-ordination of finance, production and distribution. Administration determines the corporate organisation climate and structure and it acts as the central controlling authority in the organisation.
In business firms, management, proper, is concerned with the execution of plans and policies laid down by the administration. Let us consider management as a general term for the total process of executive planning, implementation and control. Administration is one particular aspect of the total process.
Management functions may be classified into two categories:
1. Administrative Management (Administration is Represented by Top Management):
The administrative management represents the higher level or top management. It is in charge of thinking function, i.e., deliberation and planning activity. It is entrusted with task of planning, i.e., determination of corporate objectives, formulation of plans and policies, co-ordination of all functional areas of business and overall control and supervision of the entire business.
The administrative wing also determines the formal organisation structure. The administrative wing constitutes the top managerial group viz. Board of Directors, the Chief Executive and heads of divisions, if any, or senior executives.
2. Functional or Operating Management (Management Proper):
It is the body of managers in charge of actual implementation or execution of plans and policies determined by administration or top management. Managerial group is in charge of doing primarily. It assumes direct responsibility in the conduct of the business and in the realisation of stated goals and objectives.
Management is called upon to use the organisation structure devised by administration. The heads of departments in a division, middle management and the lower level managerial group are the agencies of operating management or management proper.
In short, administration is the legislative determinative or planning function and it is concerned with the over-all supreme policy-framing and decision-making authority. Management is an executive function in charge of over-all direction of human efforts and getting work done through other people. Management is primarily concerned with the carrying out the broad policy laid down by the administration.
Organisation is the framework or medium to exercise managerial functions. Management is an effective execution. Administration is an effective direction. Administration devises the organisation; management uses the organisation. Administration defines goals; management tries its best to achieve those goals. Organisation is the machine to be used by management to discharge managerial functions to accomplish the set goals.
Difference between Administration and Management
Different writers and management thinkers view management and administration differently.
There is no unanimity among the writers regarding these two concepts. According to one section of writers, administration involves policy making, formulation of vision, mission, objectives and strategies. As such, administration is the function of the top level management. Further, administration decides the organisational structure and prepares the organizational plans.
Management involves executing the plans and strategies and carrying out various activities determined by the administration. It directs and controls the subordinates. Thus, management is the function of lower level people in the company.
The second view has been advocated by E.F.L. Brech. According to E.F.L. Brech, management is a comprehensive and integrated term. Management includes planning, organizing, directing and controlling. According to him, management can be classified into two categories viz., administrative management and operative management.
Administrative Management:
Administrative management represents the top level management pertaining thinking and planning functions. Administrative management performs the functions of formulation of vision, mission and strategies. It includes board of directors, managing director, general managers and chief managers.
Operative Management:
Operative management represents the lower level management covering execution and implementation functions. It performs the functions of execution, directing and controlling which involves the contribution of middle level managers and lower level managers.
The third view has been advocated by Peter F. Drucker. According to him, the term administration is applicable to non-profit organisations like government organisations, service-oriented hospitals and educational institutions, military, churches, temples etc. The main activity of administration is planning, organizing, and directing controlling and rendering services.
Thus, governance of non-profit organisations is called administration. Governance of business organisations is referred to as management. Thus, management is concerned with business organisations and profit-oriented organisations. It is measured by the efficiency in profit-making and administration is measured by efficiency in rendering services.
Difference between Administration and Management
The words ‘Administration and Management’ are often confused with each other. Oliver Sheldon has summarised this distinction as follows “Administration is the function in industry concerned with the determination of the corporate policy, the coordination of finance, production and distribution, the setting of the compass of the organisation and the ultimate control of the executive.
Management proper is the function in an industry concerned with the execution of the policy within the limits set up by the administration and the employment of the organisation for the particular objects set before it”.
According to this definition, the word ‘administration’ is used to refer to the functions of determining the policies of a corporation, whereas the word ‘management’ is used for the function of executing the policies so determined. Accordingly administration would seem to be a higher level conceptual function while management is more executive in nature to implement and carry out the policies evolved by administration.
For instance, in the corporate sector, the board of directors is empowered to establish the overall direction of an organization (as administrators), while the officers of the company (from the president down) are the managers.
However, in normal parlance, these words have acquired different meanings. The designation ‘Administrative Officer’ denotes a position of lower ranking than that of ‘Manager’. One administers a trust according to the objectives of a trust. A court appoints an ‘administrator’ to carry on the business of an organisation in trouble, or of an estate. The administrative function is seen as supporting the other operational functions, by maintaining the office, looking after housekeeping activities and so on.
The confusion is indeed academic. Every manager and every administrator, executes policies determined by others, and also determines policies and objectives to be pursued by others. The extent to which these functions are performed varies according to the position held in the organization.
Management and Administration combine and merge, whichever way they may be defined.
Difference between Management and Administration
The use of two terms-management and administration has been a controversial issue in the management literature. Some management thinkers do not see any difference between the two terms, while others maintain that administration and management are two different functions. Those who held management and administration distinct include Oliver Sheldon, Florence and Tead, Spriegel and Lansburg, etc.
According to them, management is a lower-level function and is concerned primarily with the execution of policies laid down by administration. But some English authors like Brech are of the opinion that management is a wider term including administration.
This disagreement is discussed as under:
(i) Administration is concerned with the determination of policies and management with the implementation of policies. Thus, administration is a higher-level function.
(ii) Management is a generic term and includes administration.
(iii) There is no distinction between the terms management and administration and they are used interchangeably.
(i) Administration is a Higher Level Function:
Oliver Shelden subscribed to the first viewpoint. According to him, “Administration is concerned with the determination of corporate policy, the coordination of finance, production and distribution, the settlement of the compass of the organization and the ultimate control of the executive. Management proper is concerned with the execution of policy within the limits set up by administration and the employment of the organization in the particular objects before it. Administration determines the organization; management uses it. Administration defines the goals; management strives towards it”.
Administration refers to policy-making whereas management refers to execution of policies laid down by administration. Tead, Spriegel and Walter hold this view. Administration is the phase of business enterprise that concerns itself with the overall determination of institutional objectives and the policies unnecessary to be followed in achieving those objectives. Administration is a determinative function; on the other hand, management is an executive function, which is primarily concerned with carrying out of the broad policies laid down by the administration.
(ii) Management is a Generic Term:
The second viewpoint regards management as a generic term including administration. According to Brech, “Management is a social process entailing responsibility for the effective and economic planning and regulation of the operation of an enterprise in fulfilment of a given purpose or task. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which the programme is laid down and communicated and the progress of activities is regulated and checked against plans”.
Thus, Brech conceives administration as a part of management. Kimball and Kimball also subscribe to this view. According to them administration is a part of management. Administration is concerned with the actual work of executing or carrying out the objectives.
(iii) Management and Administration is Synonymous:
The third point of view is that there is no distinction between the terms ‘management’ and ‘administration’. Usage also provides no distinction between these terms. The term management is used for higher executive functions like determination of policies, planning, organizing, directing and controlling in the business circles, while the term administration is used for the same set of functions in the government circles. So there is no difference between these two terms and they are often used interchangeably.
It appears from the above concepts of administration and management that administration is the process of determination of objectives, laying down plans and policies, and ensuring that achievements are in conformity with the objectives. Management is the process of executing the plans and policies for the achievement of the objectives determined by an administration.
This distinction seems to be too simplistic and superficial. If we regard chairmen, managing directors and general managers as performing administrative functions, it cannot be said that they perform only planning functions of goal determination, planning and policy formulation, and do not perform other functions such as staffing functions of selection and promotion, or directing functions of leadership, communication and motivation.
On the other hand, we cannot say that managers who are responsible for the execution of plans and formulation of plans and policies, etc. do not contribute to the administrative functions of goal determination, and formulation of plans and policies. In fact, all managers, whether the chief executive or the first line supervisor, are in some way or the other involved in the performance of all the managerial functions.
It is, of course, true that those who occupy the higher echelons of organizational hierarchy are involved to a greater extent in goal determination, plans and policy formulation and organizing than those who are at the bottom of the ladder.