Applying Mathematical Concepts to Business Administration - Essay Example

15 February Applying Mathematical Concepts to Business Administration Mathematics and mathematical concepts are often associated with professional areas such as accounting or educator. Children begin learning the basic components of mathematical concepts at a very young age. Later in their academic life, students are often told of the many ways that these same mathematical concepts will influence and shape their future careers. Despite this, many students still fail to realize just how important mathematics can be in their chosen profession. Other students mistakenly believe that the extent to which mathematics will play a role in their profession will be a minor role. In truth, mathematics is used daily in a variety of professional fields including business administration, and can often play a role in problem resolution. Some business related problems that can be solved with mathematics are payroll discrepancies and funding needs. Business Administration entails a multitude of tasks and responsibilities. Many of these components can become problematic if proper mathematics is not applied. For example, a business owner or manager may, at times, be held responsible for pay roll, accounts payables, accounts receivables, determining advertising or marketing needs, and writing various proposals. Although business owners can and often do hire help to perform these many functions, understanding the concepts will ensure that the business owner can accurately monitor the progress and effectiveness of his or her employees or contracted associates. Owning a business can present a variety of problems, including conflict resolution, competition, and establishing a loyal customer base. Some of these problems cannot be solved by the use of mathematics. However, several other problems can arise that will require a solid knowledge of mathematics and an understanding of how to apply mathematical skills: Having [at least] an introduction to these topics will provide you with the basics needed for initial analysis of financial situations in your business. This information is critical to successfully managing the financial aspects of your business (Jones International University 1). Although it may appear trite to first reference financial aspects of an organization as a source of potential problems faced by business administrators and owners, the problems that can stem out of a business's financial matters can be immense. If these problems are handled improperly, they could prove to be fatal for the business. One such problem is with proper payroll accounting. Payroll embodies the life-blood of a company's employees, contracted employees, and management staff. Put simply, payroll is the monetary compensation such employees receive in exchange for their work and services provided to the company or on the behalf of the company. The most common problem that can occur with payroll is inadequate tracking of hourly employees (Corpus Christi Caller 1). Hourly employees, or those employees who receive compensation based on the number of hours they work during a specific amount of time, can make mistakes regarding their time tracking. Additionally, managers can make mistakes when calculating the wage amount for an employee for one specific pay-period. When a mistake is found, several mathematics concepts will come into play to find the mistake and work to resolve the issue. First, to find the exact mistake, the manager's first step will be to recalculate the wages based on the employees hourly pay-rate and the number of hours that employee has reported working. Doing this will require a basic mathematical concept; simply multiply the number of hours worked by the employee's hourly wage amount and round the product up or down to the nearest 100th. Should this answer not match the amount shown on the check, then the problem can be resolved by issuing a new check for the amount of the difference. However, if this new product does match the amount shown on the employee's paycheck, then the problem is elsewhere. The manager or business owner will need to begin checking past records to ensure that everything is recorded accurately: including the employee's hourly pay rate and the number of hours reported. Once again, when the mistake is found, supplying the employee with a new check in the amount of the difference will often resolve the problem satisfactorily. Accounting methods and recording can often present several problems for a business owner (Feldman 1); proper accounting details a business's cash flow--essentially the amount of cash coming into or leaving a business's accounts and explaining the source of the monies (Brechner 1). Accountants keep detailed records for businesses to help translate the business's transactions and other information to other interested participants. These participants could include possible investors, advertisers, or financial institutions (Brechner 1). If the business's owner or manager is not performing the accounting details for the business directly, then he or she will also want to review and perform the necessary calculations to ensure their accuracy. Adequate funding is often a chief concern of any business. Without proper funding, businesses cannot afford to pay their employees, advertise their products, or pay for operational expenses such as rent and electricity. Funding can come from several different sources including investors, donations, partnerships, and--most often--revenues accrued through the sales of products or services to clients (Brechner 1). If a company's cash flow shows that its expenditures are higher than its income, the company may face eventual bankruptcy if the problem is not resolved properly. First, the expenses must be analyzed and properly prioritized. Essentially, the business manager or owner must review where the company's monies are being spent and for what. The company's accounting records will be extremely helpful in this manner. With proper accounting techniques, a company's expenses can be separated into various categories such as payroll, operational expenses, and financial loans (Brechner 1). Managers can review this information to determine which of these expenses are necessary, which are critical to the livelihood of the business, and which can be lowered or removed. For example, high loan payments due to financial institutions such as banks can be lowered through re-financing the business loans or possibly negotiating for a lower interest rate. Proper accounting can also be used to communicate future potential of a business to interested investors. By understanding the potential for growth within a business, investors may likely wish to contribute monies to the organization. To heighten the probability of successfully convincing a potential investor to participate, a business owner or manager must be able to read, evaluate, and adequately communicate the past behaviors of the business in monetary and financial terminology and describe in detail how the investor's money will be used. Additionally, business owners must develop a plan in which they can describe how the investor will see a return on his or her investment with the company. Business Administration is far from an easy profession to enter or successfully compete in. Many people will assume that being a business administrator simply means being able to speak, hire employees, and set the prices for any products or services provided (Corpus Christi Caller 1). Administrating a business incorporates several skills needed to ensure the success of that business. Business leaders must incorporate their vision of the company's future and communicate that vision effectively to employees and managers to motivate and encourage them. Delegation ensures that all the business's essential processes are carried out with accuracy and a high level of efficiency. An organizational code of ethics can help the company portray a sense of social responsibility. Indeed, business administration incorporates many necessary skills. However, when looking into the matter of some of the more necessary skills sought after for business administrators, mathematical concepts are rarely reviewed (Brechner 1). In truth, business administration entails a complete understand and working knowledge of several mathematical concepts, such as accounting and algebra, to ensure the success of his or her business. Understanding even the most basic mathematical applications can help to resolve several issues that may arise within an organization. Simply understanding how to add increments of time worked or how to multiply periods of time by a particular wage amount can resolve any issues that arise in the area of payroll. Such issues can include inaccurate paychecks and improper analysis of how much money is being spent on payroll. Understanding how mathematics reads and translates an organization's behavior to other businesses and interested participants can also resolve any potential issues such as funding. Although the professional field of Business Administration is not often associated with a high need of mathematics skills, undoubtedly these skills play a large role in the field. Works Cited Brechner, Robert. Contemporary Mathematics for Business and Consumers. 2003. 9 December 2007 . Corpus Christi Caller. Let your business develop as you do. 6 November 2007. 9 December 2007 . Feldman, Kerry. Arts, sciences vital to holistic thinking ; Compass: Points of view from the community. 8 April 2004. 8 December 2007 . Jones International University. Math 301: Business Mathematics. 8 December 2007. 8 December 2007 . Read More