Management vs Administration: Understanding the Key Differences

Controlling or managing an organization can be described by two terms: administration and management. These terms are often used interchangeably, but in reality, there are significant differences between them. This article aims to clarify what management and administration are and highlight the key distinctions between the two.

What is management?

Management can be described as a skillful practice of leading and coordinating individuals to accomplish tasks and goals. Its ultimate aim is to ensure that the organization's objectives are achieved by effectively utilizing the talents of its employees.

In a business or profit-making organization, management is typically present to oversee operations. Given the variety of departments within an organization, it can be challenging for one person to effectively manage and coordinate the activities of all departments. As a result, each department is assigned a manager who is accountable for the department's outcomes. For instance, the sales department's manager would be responsible for explaining the decrease in sales during the last quarter.

Management in an organization works at three levels, such as top-level management, middle-level management, and low-level management.

Top-level management

The administrative level management, also known as top-level management, holds the responsibility of making critical decisions for the organization. They develop plans and policies that steer the direction of the entire organization towards achieving its goals.

The uppermost echelon of an organization typically comprises its owners or shareholders. This group is commonly referred to as top-level management, and includes roles such as the president, vice president, CEO, COO, CFO, and board of directors. These individuals represent the face of the organization in the market and are responsible for both strategizing and overseeing the activities of the employees. Additionally, top-level management plays a key role in hiring middle-level management and providing guidance on matters such as annual budgets, policies, schedules, and procedures.

Middle-level management

The responsibility of making crucial decisions such as technology upgrades, business expansion, and procurement of fixed assets lies with the top-level management.

Middle-level management, also known as the second tier of management, plays a crucial role in facilitating communication between top-level and lower-level management. By bridging the gap between these two levels, middle-level management ensures that organizational goals and objectives are effectively communicated and achieved.

The middle-level management team, also known as the executory level of management, acts as a liaison between top-level management and lower-level management. This group includes branch managers, department heads, and others who receive instructions from upper management and delegate tasks to the lower levels. These executives are responsible for managing and overseeing the performance of their departments, and are accountable for their outcomes.

They are responsible for assessing employee performance and creating detailed reports to present to top-level management. Middle-level management executives also hold a crucial role in the recruitment process for the organization, ensuring that their department operates seamlessly with others within the company.

Low-level of management

Low level management, also known as first-line management, is responsible for overseeing a specific department's team of employees. These managers primarily work alongside their staff, providing guidance and support to find effective solutions to any issues that arise.

What is administration?

The organization ensures that its employees have access to all necessary material, machinery, and tools, and are treated fairly in the workplace. Communication and reporting between low-level and middle-level employees is established to maintain smooth operations.

At the highest level of management, the administration is responsible for overseeing and directing the organization's operations. This includes creating policies and procedures, as well as ensuring that resources are being used effectively and efficiently. Those who make up the administration are typically those who have a financial stake in the organization, such as owners or shareholders.

In educational institutes, hospitals, and non-profit organizations, the administration plays a critical role. Those in administrative positions rely on conceptual and human skills to make important decisions for the organization, and they do so without financial incentive. They are responsible for forecasting, planning, investing, and providing guidance to lower levels of management.

The key difference between Management and administration

ManagementAdministration

Rewritten: Management involves the strategic delegation of tasks and directives to others in order to achieve a predetermined objective. Administration, on the other hand, is the overarching process of organizing and planning an organization's goals and policies. Management is typically executed at the executive level.

The organizational structure typically includes middle and lower level management, while top-level authority rests with the administration. This means that the administration has complete control over the overall activities and policies of the organization, while management operates within that framework.

Management requires both technical expertise and interpersonal abilities, while administration relies on conceptual knowledge and people skills. The primary focus of management is executing established policies, whereas administration is responsible for developing policies.

In an organization, decision-making is divided between management and administration. Management focuses on determining who will perform specific tasks and how they should be completed, while administration is responsible for determining what tasks need to be accomplished and when they should be completed. These roles are typically seen in profit-based businesses like hotels and restaurants for management, and in organizations such as educational institutions, government offices, and hospitals for administration.

Management focuses on optimizing the execution of tasks and projects within the organization, while administration is responsible for ensuring the efficient allocation of available resources. The primary role of a manager is to oversee and guide the work of employees, while an administrator's primary responsibility is to manage the allocation of resources to support the organization's goals.

The individuals employed by an organization on a salary basis are typically responsible for its management. On the other hand, those who own the organization and receive profits from their investment make up the administration.

Management is primarily concerned with overseeing and carrying out day-to-day operations, while administration is more focused on making decisions and setting policies.

The administration represents the highest echelon of management, wielding authority and making crucial decisions for the organization. While there may be a theoretical distinction between management and administration, in practice, the roles and responsibilities of top-level managers and administrators tend to overlap significantly.