Business Administration vs Business Management

The words administration and management differ little in dictionary entries. When looking up one of these words in a thesaurus, the other comes up as a synonym. Similarly, business administration and business management are two similar sounding terms, and prospective students often wonder what differentiates these programs from one another.

Does a difference actually exist or are the terms simply two ways of depicting the same program? And how do these programs relate to academic programs like a master’s degree in management and an undergraduate business degree?

This guide presents the extraordinarily subtle distinction between these two types of programs. That distinction appears not so much in their definitions or meanings but in their usage within specific contexts. Our remarks apply to the usage of these terms in North America, and particularly in the United States. Their usage in other English language regions may not necessarily match the usage we describe.

Administration vs. Management: A Difference in Scope

While remarkably similar in everyday usage, the terms “administration” and “management” have taken on some differentiated connotations within particular contexts, such as academic programs and disciplines. Because considerable overlap exists in the meanings of these two words, some overlap also exists between business administration and business management programs.

However, one can observe differences in the usage of these terms that correspond to differences in scope. In general, the term management denotes a much more restricted scope than the term administration.

The term administration is a broader and higher-level term which denotes the strategic direction of entire enterprises or their principal divisions or large groups. Management, on the other hand, is a more specific and lower level-term that tends to refer to the direction of smaller groups within organizations or to the people within those groups.

One can observe this difference in scope to be analogous in several other contexts. Two relevant settings involving the term “management” display this distinction in the use of the term as an academic degree identifier as well as in the term’s use to identify a core business function.

“Management” as an Academic Degree Identifier

One can observe this distinction in the nomenclature of graduate business degrees, and in the ways that business schools have differentiated their degree offerings in an attempt to address the needs of segmented graduate education markets.

For example, the flagship graduate-level business degree pursued by the highest-qualified candidates with the most competitive work experience and undergraduate academic profiles is the master of business administration (MBA) degree. Usually, the differentiating qualification that distinguishes requirements for admission to MBA programs from the requirements of other master’s degrees offered by business schools involves the quality and number of years of candidates’ work experience that MBA programs require.

As several BSchools guides have pointed out, most full-time MBA students on average have at least three to four years of work experience, while many executive MBA students may have ten to fifteen years of experience or more. For more on this, see the BSchools guide on common MBA admission requirements.

An MBA is not called a “master of business management” degree for a reason. In naming their degrees, business schools tend to reserve the term “management” for use in degree names often designated “master in management” (MiM), which as a class is known as a specialized master’s degree.

Consistent with the principles above that suggest a more restricted scope corresponding to the term management, these MiM degrees are far more restricted in their scope than MBA degrees. We next present a summary of this distinction where we discuss the relationship between specialized master’s degrees and MBAs in greater detail.

As Quacquarelli Symonds (QS) World MBA Tour co-founder and Fortuna admissions director Matt Symonds points out in Forbes, a master of management degree is less comprehensive than the MBA. The typical business master’s degree candidate, according to the Graduate Management Admission Council (GMAC), tends to be 24 or younger, and usually “pre-experience.”

Most business schools target their specialized master’s programs toward recent university graduates who have little or no professional experience, although some programs target early- and mid-career professionals as well. Moreover, schools price these degrees at least a third of the cost of a highly-ranked MBA—a much more affordable price point for these candidates.

But this is not the only context where the term management displays a more restricted scope than the term administration.

“Management” as a People-Focused Functional Area

Business functions are the key processes within a company. They are structured ways of dividing effort as well as accountability. Groups of similar, related functions are known as functional areas. Finance, accounting, sales, marketing, operations, and manufacturing all are examples of core functional areas.

Management is usually considered a functional area, as well. This function is traditionally thought of as the process of directing people, either in groups or teams or as individuals. Management and organizational behavior have traditionally identified the name of an academic discipline or course within business schools as well.

However, in recent years those names have shifted to terms involving leadership, such as “leadership and management” or “organizational leadership.” Because, in this context, the term management denotes an academic discipline as well as functional area, some business schools offer management concentrations or specializations within an MBA.

Undergraduate Degrees in “Management” or “Business Management”

Occasionally one hears about degrees in management or business management. These terms almost always correspond to undergraduate degrees (e.g., bachelor of science in business management) and usually occur within one of two contexts.

The first and less-common context appears to be where established and accredited universities rely on the term “management” instead of “business administration” for marketing and branding purposes in an attempt to differentiate themselves from the hundreds of other competing business administration degrees.

The second context appears to be much more common, especially with for-profit educational institutions. The University of Phoenix and DeVry University are two for-profit organizations, along with many others, that offer undergraduate degree programs that prominently feature the terms “management” or “business management.” Overall the academic and work experience qualifications of candidates who apply to these programs in many ways do not stack up to the qualifications of candidates who win admission at the best business schools.

A Reversal: The Healthcare Industry Exception

The healthcare industry provides a curious exception to the usage of the term management to identify functional areas within firms as described above, along with academic degrees and disciplines within business schools.

In the healthcare industry, administration refers to the operations-related, lower-tier, and clerical and administrative functions within specific departments. In this industry, management refers to the high-level, highly-skilled direction of divisions, groups, or functions that impact the organization as a whole. This usage is the opposite of that applied by business schools and described in the more general context in the sections above.

Finally, here is a side-by-side comparison chart of business administration and management: