UNIT 1.

INRODUCTION OF MANAGEMENT

Introduction
This module launches your study of management by providing a brief conceptual definition of
management, a discussion of the importance of studying the field of management, an overview of
management’s evolution as a field of study, and a brief look at the management process in each
organization in which comprise the work of management. This module discussed the levels of
management and the functions of management.
Intended Learning Outcomes
At the end of this module, you should be able to:

1. Gain understanding of the major concepts of management: marketing, finance, and

accounting.
2. Cultivate competency in business writing and presentation skills.
3. Manifest ethical practices in organizations
4. Experience different strategies and techniques in identifying, analyzing, and solving problems
in an organizational context (critical thinking).
5. Develop attitudes and skills for teamwork in attaining the organizational goals

Rationale
This course focuses on managing its certain goals in an organization and a company and
even we consider it as basic aim of a person. Management as we all know is a discipline. It is in fact a
complicated and very important discipline with multiple facets and huge scope. All fields of study, in
one way or the other are governed and bound by a certain set of principles. Management is no
different, and has principles that are unique to it. These principles play a key role in making the
complicated process and discipline of management clear and practical and helps in ensuring its
efficiency. Thus, importance attached to is immense ideas and give knowledge to students in coping
the matter. Management Principle is a broad and general guideline that regulates decision making
and behavior within a group or organization. These principles of extensively deals with human
behavior, thought and actions which never remain static and thus are not as rigid as the principles
that govern science or other disciplines. These principles are guidelines that are used when applying
the techniques of management.
Pre-activities

Test your Curiosity

Directions:

1. Define Management in your own perspective.

2. Identify the levels of management
3. Determine the skills needed to be an effective manager.
4. Describe the basic management functions.

Discussions
Management is the act of getting people together to accomplish desired goals and objectives
using available resources efficiently and effectively. Since organizations can be viewed as systems,
management can also be defined as human action, including design, to facilitate the production of
useful outcomes from a system. This view opens the opportunity to manage oneself, a pre-requisite to
attempting to manage others.
Figure 1
Management functions include: Planning, organizing, staffing, leading or directing, and controlling
an organization (a group of one or more people or entities) or effort for the purpose of accomplishing
a goal.

1.1 What is Management?

Management is the process of managing the resources effectively and efficiently. The
process represents the continuous or ongoing activities of a manager (Robbins & Coulter, 2004). To
be efficient means minimal waste of resources or inputs in achieving the goal (Bateman & Snell,
2008). It is often referred as doing things right. Effectively refers to accomplishing a task or achieving
a goal. It is often describe as doing the right things. A manager is responsible for achieving
organizations goals and objectives and responsible in utilizing the firms resources (Lussier, 2006). An
Organization is a group of people working together towards a common goal.
There are the different types of resources that the firm has; these are physical resources (e.g.,
equipment, building, machinery), human resources (e.g., managers, employees) financial
resources (e.g., cash, accounts receivables) and informational resources (e.g, customers
information, survey data results, financial statements.) This may include the levels of management,
this are the following:

1.1.1 LEVELS OF MANAGEMENT

Figure 2

Most organizations have three management levels:

• Low-level managers;
• Middle-level managers; and
• Top-level managers.
These managers are classified in a hierarchy of authority, and perform different tasks. In many
organizations, the number of managers in every level resembles a pyramid.
Below, you’ll find the specifications of each level’s different responsibilities and their likely job titles.
 1. Top-level managers

The board of directors, president, vice-president, and CEO are all examples of top-level managers.
These managers are responsible for controlling and overseeing the entire organization. They develop
goals, strategic plans, company policies, and make decisions on the direction of the business.
In addition, top-level managers play a significant role in the mobilization of outside resources.
Top-level managers are accountable to the shareholders and general public.

2. Middle-level managers

General managers, branch managers, and department managers are all examples of middle-level
managers. They are accountable to the top management for their department’s function.
Middle-level managers devote more time to organizational and directional functions than top-level
managers. Their roles can be emphasized as:

• Executing organizational plans in conformance with the company’s policies and the objectives
of the top management;
• Defining and discussing information and policies from top management to lower management;
and most importantly
• Inspiring and providing guidance to low-level managers towards better performance.

Some of their functions are as follows:

• Designing and implementing effective group and intergroup work and information systems;
• Defining and monitoring group-level performance indicators;
• Diagnosing and resolving problems within and among work groups;
• Designing and implementing reward systems supporting cooperative behavior.

3. Low-level managers

Supervisors, section leads, and foremen are examples of low-level management titles. These
managers focus on controlling and directing.
Low-level managers usually have the responsibility of:

• Assigning employees tasks;

• Guiding and supervising employees on day-to-day activities;
• Ensuring the quality and quantity of production;
• Making recommendations and suggestions; and
• Up channeling employee problems.
Also referred to as first-level managers, low-level managers are role models for employees. These
managers provide:

• Basic supervision;
• Motivation;
• Career planning;
• Performance feedback; and
• Staff supervision.
(https://courses.lumenlearning.com/boundless-business/chapter/types-of-
management/#:~:text=The%20three%20levels%20of%20management,and%20overseeing%20th
e%20entire%20organization.)

1.1.2 FOUR FUNCTIONS OF MANAGEMENT

What are the four basic functions of management?
The four basic functions of management are planning, organizing, leading and controlling. These
functions work together in the creation, execution and realization of organizational goals. The four
functions of management can be considered a process where each function builds on the previous
function. To be successful, management needs to follow the four functions of management in the
proper order.
Managers first need to develop a plan, then organize their resources and delegate responsibilities to
employees according to the plan, then lead others to efficiently carry out the plan, and finally
evaluate the plan’s effectiveness as it is being executed and make any necessary adjustments.
 • Planning
• Organizing
• Leading
• Controlling

1. Planning
Is the process of determining objectives and organizational goals, establishing strategies and
integrating coordinated activities in the organization to achieve the goals and objectives.

There are several approaches to planning:

• Strategic planning: This type of planning is often carried out by an organization’s top
management and usually creates goals for the entire organization. It analyzes threats to the
organization, evaluates the organization’s strengths and weaknesses and creates a plan of
how the organization can best compete in its environment. Strategic planning usually has a
long timeframe of three years or more.
• Tactical planning: Tactical planning is the shorter-term planning of an objective that will take a
year or less to achieve. It is usually carried out by an organization’s middle management.
Tactical planning is usually aimed at a specific area or department of the organization such as
its facilities, production, finance, marketing or personnel.
• Operational planning: Operational planning is the process of using tactical planning to achieve
strategic planning and goals. Operational planning creates a timeframe for putting a portion of
the strategic goal into practice operationally.

2. Organizing
Is the process of establishing the structure by assigning tasks, assembling and allocating
resources to achieve the organizational goals and objectives.

3. Leading
-Is the process of influencing people to work in achieving the organizational goal.

Leading consists of motivating employees and influencing their behavior to achieve

organizational objectives. Leading focuses on managing people, such as individual employees,
teams and groups rather than tasks. Though managers may direct team members by giving orders
and directing to their team, managers who are successful leaders usually connect with their
employees by using interpersonal skills to encourage, inspire and motivate team members to perform
to the best of their abilities.
Managers can foster a positive working environment by identifying moments when employees need
encouragement or direction and using positive reinforcement to give praise when employees have
done their jobs well.
Managers usually incorporate different leadership styles and change their management style to
adapt to different situations. Examples of situational leadership styles include:
• Directing: The manager leads by deciding with little input from the employee. This is an
effective leadership style for new employees who need a lot of initial direction and training.
• Coaching: The manager is more receptive to input from employees. They may pitch their ideas
to employees to work cooperatively and build trust with team members. This style of leadership
is effective for individuals who need managerial support to further develop their skills.
• Supporting: The manager decides with team members but focuses more on building
relationships within the team. This style of leadership is effective for employees who have fully
developed skills but are sometimes inconsistent in their performance.
• Delegating: The leader provides a minimum of guidance to employees and is more concerned
with the vision of the project than day-to-day operations. This style of leadership is effective with
employees able to work and perform tasks on their own with little guidance. The leader can
focus more on high-level goals than on tasks.

4. Controlling
Controlling is the process monitoring performance and taking corrective action when
necessary to ensure the objectives of the organization will be achieved. During the controlling stage,
managers perform tasks such as training employees as necessary and managing deadlines.
Managers monitor employees and evaluate the quality of their work. They can
conduct performance appraisals and give employees feedback, providing positive remarks on what
they are doing well and suggestions for improvement. They may also offer pay raise incentives to
high-performing employees.
https://www.indeed.com/career-advice/career-development/basic-functions-of-
management#:~:text=functions%20of%20management%3F-
,The%20four%20basic%20functions%20of%20management,%2C%20organizing%2C%20leading%20and
%20controlling.

Activities 
ACTIVITY 1: Briefly enumerate and identify the following (for at least 3 to 5 sentences)
1. Discuss the three levels of management and enumerate their functions.
2. How is it important to have planning as one function of management?
3. How is it important to have organizing as one function of management?
4. How is it important to have leading as one function of management?
5. How is it important to have controlling as one function of management?

MODULE 1: EVOLUTION OF MANAGEMENT

Management is not a new concept. It already existed even in the early times. The Great Wall of
China, The Egyptian Pyramid and including the Rice Terraces (Philippines) are concrete
evidence that people in different parts of the world were already applying the functions of
management in building different projects. One of the primary reasons why managers or
management students need to learn the history of management is to learn from the past and
be able to avoid committing the same mistakes.
1.1 CLASSICAL APPROACHES TO MANAGEMENT-SCIENTIFIC MANAGEMENT
The organization. Known approaches that the emerged during the classical period were the
Scientific Management, Administrative Management, Bureaucracy and Human Resource
Management.
The Classical approaches focus in developing principles to manage The Scientific
Management Era was spearheaded by Frederick Winslow Taylor (1856-1915) a young
engineer who started his working career at Midvale Steel Company. He is also known as the
Father of Scientific Management. He focused on analyzing the work and how to complete a
task efficiently. Taylor used scientific techniques in improving the performance of the people
in production, emphasizing in maximizing the output. The scientific management movement
produced revolutionary ideas for the time—ideas such as employee training and
implementing standardized best practices to improve productivity. Taylor’s theory was called
scientific because to develop it, he employed techniques borrowed from botanists and
chemists, such as analysis, observation, synthesis, rationality, and logic.
1.2 MOTION STUDIES
Frank Gilbert and his wife Lilian Gilbreth use motion studies to simplify and develop more
efficient work procedures. They applied efficiency methods in their home with 12 children.
Frank Glibreth was known as the “Father of Motion Study” while Lillian is commonly referred
as First Lady of Management.

Motion Study is the reducing or breaking a task to its basic physical motions. Frederick W.
Taylor emphasized in managing work through efficiency while Frank and Lilian emphasized in
managing motion. The Gilbretrhs also devised a classification scheme to label 17 basic hand
motions (such as grasp, hold) which they called therbligs (Gilbreth spelled backward with
the th transposed) (Robbins & Coulter, 2004)

Henry Gantt (1861-1919) also made an important contribution to scientific management. He

recognized the value of non monetary rewards to motivate workers. He also developed a
system for scheduling called Gantt Charts (Stevenson & Choung, 2010). Gantt charts are
considered as one of the most important management tool that is widely used by managers
to this day.

Henry Ford (1863-1947) is known to be one of the great industrialists who use Scientific
Management techniques in his factories. The major contribution of Henry Ford is the
introduction of the moving assembly line which had a tremendous impact on production
methods in many industries.
Henry Ford also introduced the mass production method. It is a method of production in
which large volumes of standardized goods are produced by workers using highly advance
equipment..
 Administrative Management- the administrative management approach emphasized the
perspective of senior managers within the organization. It is also argues that management is
a profession and could be taught (Batiman & Snell,2008).
Henry Fayol is a French mining engineer. He also known as the Father of Modern
Management. He also published a book summarizing his management experiences wherein
he identified 5 (five) management functions: planning, organizing, commanding,
coordinating and controlling. He also developed 14 principles of management.

Evolution of Management Concept

The evolution of management thought is a process that started in the early days of man. It began
since the period man saw the need to live in groups. Mighty men were able to organize the masses,
share them into various groups. The sharing was done accord to the masses’ strength, mental
capacities, and intelligence.
The point is that management has been practiced in one way or the other since civilization began. If
you want a good example where advance management principles where applied, consider the
organization of the olden days Roman Catholic Church, military forces as well as ancient Greece.
These are all excellent examples. But the industrial revolution brought drastic change. And suddenly,
the need to develop a more holistic and formal management theory became a necessity.
Explain the Evolution of Management Thought
Stages of the evolution of management thought
This topic is broad, and it also requires careful explanation and thought process. One cannot
understand what it entails or appreciates how it happened without looking at the various areas
where the said evolution occurred. For better understanding, the evolution of management thought
will be shared into four different stages. These include:

• Pre-scientific management period

• Classical theory
• Neo-classical theory or behavior approach
• Bureaucratic Model of Max Weber
• The Pre-Scientific Management Period

The industrial revolution that took place in the 18th century had a significant impact on management
as a whole. It changed how businesses, as well as individuals, raised capitals; organize labor and the
production of goods. Entrepreneurs had access to all the factors of production such as land, labor,
and capital. Theirs was to make an effort to combine these factors to achieve a targeted goal
successfully.
However, the new dimension that management took following the industrial revolution cannot be
discussed without mentioning notable personalities who contributed their quarter. They were able to
introduce useful ideas and approaches to give management a precise and universally acceptable
direction. Here are some of them.
Professor Charles Babbage – United Kingdom (1729 – 1871)
Prof Babbage, a renowned professor in mathematics at Cambridge University discovered that
manufacturers were relying on guesswork and suggestions and urged them to utilize mathematics
and science to be more accurate and productive.
Robert Owens – United Kingdom (1771 – 1858)
Robert was regarded as the father of personnel management because of his approach and focus
on employee welfare. He introduced co-operation and trade unions. Robert believed that employee
welfare could determine their performance to a large extent. He encouraged the training of workers,
education for their children, canteens in the workplace, shorter working hours, among others.
The Classical Theory
Prof Babbage, Robert Owens, and other names earlier mentioned can be regarded as the pioneers
of management. But their contribution to the evolution of management is little. The beginning of
what is known as the science of management started in the last decade of the 19th century. Names
like Emerson, F.W. Taylor, H.L. Grant, and others, paved the way for the establishment of what is
called scientific management.
During the classical period, management thought was focused on job content, standardization, the
division of labor, and a scientific approach towards the organization. It also was closely related to the
industrial revolution as well as the rise of large-scale enterprises.
The Neo-Classical Theory
This period of evolution of management thought is an improvement of the classical theory. In other
words, it modified and improved upon the classical theory. For instance, Classical theory focused
more on the area of job content, including the management of physical resources, while the neo-
classical theory gave more profound emphasis on employee relationships in the work environment.
The Bureaucratic Model
A German Sociologist called Max Weber proposed this model. And it includes a system of rules,
division of labor hinged on functional specialization, legal authority, and power, the hierarchy of
authority and placement of employees based on their technical competence.
The Evolution of Management Theories
Organizations have been shaped and through the writings of several writers. Their write-up consisted
of governance of kingdoms and management of humans. And these formed the literature that
helped in the development of management theories. And these management models were also
offered by the military, political and religious organizations.
https://www.managementstudyhq.com/evolution-management-thought-theories.html

MODULE 2: WHY DO WE STUDY MANAGEMENT?

Why Study Management?

Management teaches you to understand how people behave in organizations, and the nature of
power, influence and leadership. Whether you aim to be self-employed, an entrepreneur, head your
own company; or to work for private business, not-for-profit organizations or government agencies –
Management gives you the tools for success!

Explore the issues facing individuals and organizations in the workplace today. There are many
reasons to study Management.

1. Study Management and work in-and-through organizations

Your career will surely involve working in organizations, regardless of your chosen career path. As an
economist, or marketer – or indeed in any job – your effectiveness at work depends on your
understanding of the organization you work in, and how to get things done through it.

2. Learn about organizations and individuals in Management

You need to understand how people behave in organizations, the sources of power and influence,
and the nature of leadership. Learn about organizations, and the people within them, in our courses
on:

• Organization Behavior
• Organization Theory
• Communication
• Employment Relations

3. Connect to the world

Management can take you places. New Zealand is one of the smallest – and is the most isolated –
country on earth. We need to work extra hard at connecting to the global economy. Your career
could take you to one of the great centers of global economic activity: New York, London, Tokyo.

4. Discover how organizations work

Organizations are fascinating! Learn to understand organizations better, and make them work for
you. We can help you gain that advantage for your future career.
Have you ever wondered:
Why organizations even exist?
Why organizations arrange the activity that goes on within and around them in the way that they
do?
Why every organization is different – even when they are direct competitors in the same industry?
If you answered yes to any of the above then studying with us in the Department of Management is
perfect for you!

5. Learn how to be a manager, or manage your own business

If you become a manager, your role will be to direct, lead, plan, manage, encourage, cajole, coach
and organize all activity within the organization. Or maybe you’d prefer to be your own boss – self-
employed, an entrepreneur, or the head of your own company?

Wherever your career takes you, benefit from the models and insights and answers we have to offer.
Begin preparation for your future with our specialist courses in:
 • Human Resource Management
• Operations Management
• Strategic Management

Activities 

Criteria:
• Substance of the content - 45%
• Relevance - 20%
• Organization on the clarity of ideas - 20%
• Originality - 10%
• Punctuality - 5%
TOTAL 100%

ACTIVITY 2: Essay (minimum of 150 words and maximum of 200 words)
1. In your own perspective, why do we need to study management?
2. How is it important to have management in a certain organization?
 MODULE 3: BASIC CONCEPT OF MANAGEMENT

Concept of Management
Some of the common definition of management given by famous writers and thinkers are:
According to Harold Koontz and Heinz Weihrich, Management is the process of designing and
maintaining an environment in which individuals, working together in groups, efficiently
accomplish selected aims.
According to Robert L. Trewelly and M. Gene Newport, Management is defined as the process of
planning, organizing, actuating and controlling an organization’s operations in order to achieve
coordination of the human and material resources essential in the effective and efficient
attainment of objectives.
According to Kreitner, “Management is the process of working with and through others to
effectively achieve organizational objectives by efficiently using limited resources in the changing
environment.
So, Management can be defined as a process of getting things done with the aim of achieving
goals effectively and efficiently. Some important terms in this definition are:

1. Process: Process means the primary functions or activities that management performs to
get things done. These functions are planning, organizing, staffing, directing and
controlling.
2. Effectiveness: Effectiveness is concerned with the end result. It basically means finishing
the given task. Thus Effectiveness in management is concerned with doing the right task,
completing activities and achieving goals
3. Efficient: Efficiency means doing the task correctly and with minimum cost.
Management is concerned with the efficient use of input resources which ultimately
reduce costs and lead to higher profits.

it is important for management to achieve goals (effectiveness) with minimum resources i.e., as
efficiently as possible while maintaining a balance between effectiveness and efficiency.
Characteristics of Management
Basic characteristics of management are:

1. Management is a goal-oriented process: An organization has a set of basic goals which are
the basic reason for its existence. Management unites the efforts of different individuals in the
organization towards achieving these goals.
2. Management is all pervasive: The activities involved in managing an enterprise are common
to all organizations whether economic, social or political.
3. Management is multidimensional: Management is a complex activity that has three main
dimensions:
➢ Management of work: All organizations exist for the performance of some work.
Management translates this work in terms of goals to be achieved and assigns the
means to achieve it.
➢ Management of people: Human resources or people are an organization’s greatest
asset. Managing people has two dimensions:

it implies dealing with employees as individuals with diverse needs and behavior;
it also means dealing with individuals as a group of people
The task of management is to make people work towards achieving the organization’s goals, by
making their strengths effective and their weaknesses irrelevant.

➢ Management of operations: It requires a production process which entails the flow of

input material and the technology for transforming this input into the desired output for
consumption

4. Management of operations: It requires a production process which entails the flow of input
material and the technology for transforming this input into the desired output for consumption
5. Management is a continuous process: The process of management is a series of continuous,
composite, but separate functions (planning, organizing, directing, staffing and controlling). These
functions are simultaneously performed by all managers all the time.
6. Management is a group activity: An organization is a collection of diverse individuals with
different needs. Management should enable all its members to grow and develop as needs and
opportunities change.
 7. Management is a dynamic function: Management is a dynamic function and has to adapt
itself to the changing environment. In order to be successful, an organization must change itself
and its goals according to the needs of the environment.
8. Management is an intangible force: Management is an intangible force that cannot be seen
but its presence can be felt in the way the organization functions

MODULE 4: APPROACHES IN MANAGEMENT

Approaches to Management Theory

In this article, we introduce the various historical and contemporary approaches to management
theory. These approaches demonstrate the evolution of the understanding of the functions, role,
skills, and effect of a manager on an organization.
These theories do not focus solely on the manager. Management theory also explores the
organizational structure, individual efficiency models, and worker behaviors related to
psychological and sociological factors.
Classical Management Theory
Classical management theory refers to the earliest areas of management research. It focuses on
the rationality in decision-making and the efficiency of the organization. The categories and most
renowned early contributors to classical management theory are as follows:
Scientific Approach to Management
The early pioneer of Scientific Management Theory was Frederick Taylor – “Principles of Scientific
Management”. His work envisioned “One Best Way to do a job”. He proposed the following
method for addressing any managerial task:

• Develop science for the elements of work to replace “rule of thumb”

• Select, train, teach workers
• Cooperate with Workers to ensure work is done
• Divide work suitably between workers and managers

Another major contribution to Scientific Management theory was by Frank Gilbreth and Lillian
Moller Gilbreth. They studied task process and efficient body motions. They focused on the
efficiency of effort furthering the understanding of the best way to carry out a process.
The scientific approach to management, along with its major contributors, is discussed in
subsequent articles.

Administrative Approach to Management

The father of Administrative or Management Process Theory was Henri Fayol. In his early text,
“Administration Industrially et General”, he proposed several managerial functions as categories for
all managerial activities. The functions include:

➢ Planning
➢ Organizing
➢ Commanding
➢ Coordinating
➢ Controlling
This framework evolved into the highly-influential P-O-L-C (Plan, Organize, Lead, Control) framework
for management functions. The Coordinating and Controlling functions collapsed into Leadership.
Fayol also contributed to the understanding of managerial duties through his text, “Fayol’s 14
Principles of Management”.
Henri Mintzberg, in his text “The Nature of Managerial Work”, added to the body of administrative
management theory by proposing a framework for the Role of Managers. He categories the roles of
managers as follows:

➢ Interpersonal
o Figurehead
 o Supervisor
o Liaison
➢ Informational
o Monitor
o Disseminator
o Spokesperson
➢ Decisional
o Entrepreneur
o Disturbance Handler
o Resource allocator
o Negotiator
Max Weber was another notable theorist contributing to the administrative approach to
management. Weber explored the organizational structure and proposed the concept of a
“Bureaucracy”. He saw an organization as a clearly-defined structure with a division of labor, clear
hierarchy, detailed rules, and impersonal relationships. Managers served the function of facilitating
the organization of the bureaucracy and management of functions therein.
Robert L. Katz, yet another administrative management theorist, proposed categories for managerial
skills, including:

✓ Conceptual
✓ Human
✓ Technical
Conclusion of Classical Theory of Management
The scientific approach and administrative approaches co-existed and dominated early
management theory. These views focused primarily upon a manager who oversees manual laborers.
As the labor force gradually shifted from labor to a mixture of labor and knowledge work, these
principles became less relevant.
The administrative approach to management, along with its major contributors, is discussed in
subsequent articles.

Behavioral Approach to Management

These process-driven theories that focused on the manager and the role of management later gave
way to a focus on understanding the individual within the organization. That is, as work became less
about manual labor and more about knowledge and understanding, other theories besides task
accomplishment and managerial efficiency became relevant.
The behavior-based approach to management focused on the individual worker, such as
motivations, behaviors, social systems, etc. It incorporated aspects of psychology, motivation, and
sociology.
Some of the major early contributors to Behavioral Theory were:

o Mary Parker Follet – Her work focused on Individual and Group Behavior. Here theories include:
Genuine power is not “coercive” (power over) but coactive (power with). True leaders create group
power rather than expressing personal power
o Hugo Munsterberg – His work focused on psychological tests for employee selection. He also
proposed theoretical concepts for training. His work also linked worker behavior to individual
motivation.
o Robert Owen – His work focused on workplace conditions and the need to invest in the workforce.
o Chester Barnard – His work pained organizations as coordinated social systems. He explored the role
of communication in stimulating activity. Notably, he proposed the concept of the organizations as
an open system.
o Elton Mayo – Mayo demonstrated that employee motivation is heavily influenced by social and
situational factors. Mayo’s findings, referred to as the “Hawthorne Effect,” marked a radical change
in motivational theory and management practice.
o Abraham Maslow – Maslow proposed that human behavior is purposeful and is motivated by the
desire to satisfy needs and that lower-level needs must be met before a person can focus on the next
level of needs.
The details of the behavioral approach to management, along with its major contributors, is
discussed in subsequent articles.
 Contemporary Approach to Management

The study of management theory has burgeoned in recent decades. The resulting theories are quite
diverse and novel. They explore numerous aspects of the manager, the employee, the organization,
the business environment, resources (human and capital), efficiency, understanding, and
creativity/innovation. The primary contemporary approaches to management include:
Quantitative Approach to Management
The quantitative approach to management applies mathematical models, information and
optimization models, computer simulations, and other quantitative techniques to managerial
decision-making. The primary branches of quantitative management theory include:

o Management Science – Under the umbrella of management science, there are a number of
recognized disciplines:
o Operations Management – The management of functional processes employed in delivering the
company’s value proposition.
o Quantitative Management – This approach focuses on the use of data analysis in management
decision making.
o Total Quality Management – This is an efficiency and waste reduction approach to management
processes and decision making.
o Management Info Systems – This field includes the use of technological and quantitative methods for
the observation, collection, organization, evaluation, and dissemination of information across and
throughout an organization.
o Systems Theory – An organization is a system consisting of a number of interdependent parts
functioning as a whole for some purpose. These parts might include: inputs, a transformation process,
outputs, feedback, and the environment. An organization is generally considered to be open and
organic with the subpart or subsystem interacting.
o Contingency Theory – This is a decision-making theory of management. The behavior of one sub-unit
of an organization “is dependent on its environment and relationship to other units or sub-units that
have some control over the sequences desired by that sub-unit.”
o Other – Scholars have proposed various other contemporary approaches to management theory.
These theories may relate individually to prior theories or span multiple theories. Each of
these is discussed individually.
https://thebusinessprofessor.com/lesson/major-approaches-to-management-theory/

Activities
Criteria:
Content -4
(interpretation of the scenario, specific supporting text references)
Clarity of writing -2
Organization -2
Presentation Quality -2
10

Activity 2: Case Study Analysis

Case 1
Situation: The Acme Warehouse Company received a consignment of 20' lengths of 3" diameter
stainless steel pipes. Acme had never handled pipe as part of their warehousing operation. The forklift
truck operator assigned to this job used the truck's forks as a ram to load, handle, and unload the
pipe. Inspection of the pipe by the owners revealed that the forks were bending and damaging the
pipe.

Question: Suggest several alternative methods for eliminating the problem of pipe damage. From a
cost and ease in application standpoint, select one alternative solution for adoption.
Ans:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________________________________________.
Case 2
Situation: The Free Wheelin Car and Foundry Company is in the business of modifying and repairing
the coupler pins on railroad cars. Due to the nature of the mechanism the complete coupler
assembly must be removed from the car. Once detached, an overhead gantry crane is used to lift
and move the coupler to a location adjacent to the car being repaired. Because of the various uses
of this crane, many scheduled operations must be delayed.

Question: Preliminary investigation indicates that the super-structure is very sound with columns
placed on 20' centers. Suggest an approach for the reduction or the elimination of the delays
currently being experienced in the gantry crane operations.

Ans:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
___________________________________ .
 UNIT II: MANAGING WORK AND ORGANIZATIONS
MODULE 1: PRINCIPLES OF MANAGEMENT (BY HENRY FAYOL)
Henry Fayol, also known as the ‘father of modern management theory’ gave a new perception of
the concept of management. He introduced a general theory that can be applied to all levels of
management and every department. The Fayol theory is practiced by the managers to organize
and regulate the internal activities of an organization. He concentrated on accomplishing
managerial efficiency.

The fourteen principles of management created by

Henri Fayol are explained below.
1. Division of Work-
Henri believed that segregating work in the workforce
amongst the worker will enhance the quality of the
product. Similarly, he also concluded that the division of
work improves the productivity, efficiency, accuracy
and speed of the workers. This principle is appropriate
for both the managerial as well as a technical work
level.
2. Authority and Responsibility-
These are the two key aspects of management.
Authority facilitates the management to work
efficiently, and responsibility makes them responsible for
the work done under their guidance or leadership.
3. Discipline-
Without discipline, nothing can be accomplished. It is
the core value for any project or any management.
Good performance and sensible interrelation make the
management job easy and comprehensive. Employees
good behavior also helps them smoothly build and
progress in their professional careers.
4. Unity of Command-
This means an employee should have only one boss and follow his command. If an employee has to
follow more than one boss, there begins a conflict of interest and can create confusion.
5. Unity of Direction-
Whoever is engaged in the same activity should have a unified goal. This means all the person
working in a company should have one goal and motive which will make the work easier and
achieve the set goal easily.
6. Subordination of Individual Interest-
This indicates a company should work unitedly towards the interest of a company rather than
personal interest. Be subordinate to the purposes of an organization. This refers to the whole chain of
command in a company.
7. Remuneration-
This plays an important role in motivating the workers of a company. Remuneration can be monetary
or non-monetary. However, it should be according to an individual’s efforts they have made.
8. Centralization-
In any company, the management or any authority responsible for the decision-making process
should be neutral. However, this depends on the size of an organization. Henri Fayol stressed on the
point that there should be a balance between the hierarchy and division of power.

9. Scalar Chain-
Fayol on this principle highlights that the hierarchy steps should be from the top to the lowest. This is
necessary so that every employee knows their immediate senior also they should be able to contact
any, if needed.
10. Order-
A company should maintain a well-defined work order to have a favorable work culture. The positive
atmosphere in the workplace will boost more positive productivity.
11. Equity-
All employees should be treated equally and respectfully. It’s the responsibility of a manager that no
employees face discrimination.
12. Stability-
An employee delivers the best if they feel secure in their job. It is the duty of the management to offer
job security to their employees.
13. Initiative-
The management should support and encourage the employees to take initiatives in an
organization. It will help them to increase their interest and make then worth.
14. Esprit de Corps-
It is the responsibility of the management to motivate their employees and be supportive of each
other regularly. Developing trust and mutual understanding will lead to a positive outcome and work
environment.
This 14 principles of management are used to manage an organization and are beneficial for
prediction, planning, decision-making, organization and process management, control and
coordination.

Activities
Activity 1: Explain and expound
Directions: Answer it in a paragraph form.

1. Choose at least 2 of the given principles of Henry Fayol, explain the two that you
have chosen, why is it important? Give some scenario in your life that the said
principle you choose was applied in your life.

MODULE 2: MASLOW’S HIERARCHY OF NEEDS

1.1 MASLOW’S HIERARCHY OF NEEDS

Figure 3
1 .Physiological needs - these are biological requirements for human survival, e.g. air, food,
drink, shelter, clothing, warmth, sex, sleep.
If these needs are not satisfied the human body cannot function optimally. Maslow considered
physiological needs the most important as all the other needs become secondary until these
needs are met.
2.Safety needs - Once an individual’s physiological needs are satisfied, the needs for security
and safety become salient. People want to experience order, predictability and control in their
lives. These needs can be fulfilled by the family and society (e.g. police, schools, business and
medical care).
3. Love and Belongingness Needs - after physiological and safety needs have been fulfilled,
the third level of human needs is social and involves feelings of belongingness. The need for
interpersonal relationships motivates behavior
4.Esteem needs are the fourth level in Maslow’s hierarchy - which Maslow classified into two
categories: (i) esteem for oneself (dignity, achievement, mastery, independence) and (ii) the
desire for reputation or respect from others (e.g., status, prestige).
5.Self-actualization needs are the highest level in Maslow's hierarchy, and refer to the
realization of a person's potential, self-fulfillment, seeking personal growth and peak
experiences. Maslow (1943) describes this level as the desire to accomplish everything that one
can, to become the most that one can be.
FREDERICK HERZBERG (1923-2000) is a psychologist who conducted a research where started
interviewing 200 accountants and engineers in Pittsburgh the result led him to develop the
Two-Factor theory or better known as Motivation Hygiene Theory.
This theory proposes that employees are motivated by intrinsic or motivation factors are related
to job satisfaction such as achievement and recognition. Extrinsic or Hygiene factors are
associated with job dissatisfaction such as working conditions, company policies, pay and job
security.

HERZBER’S TWO FACTOR THEORY

Figure 4.
Motivation Factors

SATISFACTION NO SATISFACTION

Hygiene Factors

DISSATISFCATION NO DISSATISFACTION

Douglas McGregor (1906-1964) is a psychologist who developed philosophical view of human

behaviour with his Theory X and Theory Y; the two sets of assumptions that represented how
employees view work.
Theory X
Represents a negative end or view of people they avoid work responsibility relatively
have a little ambition and need to be controlled (reward and punish) and supervised.
Theory Y
Represents a positive end or view of workers they usually accept and seek responsibility.
They enjoy the physical and mental aspect of work and more committed to work. They can
exercise self-control and self-direction towards organization objectives.

1.2 QUANTITATIVE APPROACHES TO MANAGEMENT

Management Science is an approach that emphasizes the use of mathematics or

quantitative techniques to analyze and support management decisions and problems.
After World War II the efforts to develop several quantitative techniques continues which
help business managers make decisions in terms of solving problems.
Quantitative management allows for developing quantitative approaches such as
statistics and computer simulations to arrive at management decision. The two main
branches of quantitative management are management science and operations
management (Zarate, 2009)

1.3 MODERN APPROACHES TO MANAGEMENT

System Theory- it focuses on viewing the organization as a whole and the interrelationships
of its parts. During the 1950s management scholars attempted to integrate a holistic view of
management process. System is a collection of interrelated elements that function as a
whole. Subsystems are small units of a larger system.
 EXTERNAL ENVIRONMENT
Figure 5.

RAW INPUT PROCESS OUTPUT PRODUCT OR

MATERIALS SERVICES

FEEDBACK

1.4 CONTINGENCY MANAGEMENT

In modern management it is difficult to identify one best way to manage and organize
firms in all circumstances because different factors may vary depends on the situation.
Understanding contingences helps managers determine on how to react the situation by
choosing a proper strategy. Contingency thinking recognizes that what may be good
structure for one organization may not work as well in another organization. It also
recognizes that what may work well at one time may not work as well in the future as
circumstances change. (Schermerhorn, 1999).

FIVE (5) M’s of MANAGEMENT

1. Man is the most important “M” of management. It refers to people or human

resource.
2. Materials refers to the main component in producing a product in which
commonly known as raw materials.
3. Money is defined as any good or token that functions as a medium of exchange.
It is socially and legally accepted in payment for goods and services and in
settlement of debts.
4. Machines is an important tool that helps improve the efficiency and effectiveness
in producing a goods or services of a firm.
5. Methods is a series of steps which managers use with the purpose of creating
systematic process in achieving the goals and objectives of the firm.

Activities

Activity 1  Discussion Question

1. Describe how you can develop skills needed to become an effective manager in
the future.
2. Name the different roles you perform every day and discuss how you manage
them effectively.
3. State the differences between classical and behavioral theorist.
4. Does the five (5) M’s of management can determine if the manager is effective
or not? Why?
5. Explain how the functions of management can be applied in your daily routine.
Part II: TRUE OR FALSE QUESTIONS.
Instructions: Write T if the statement is TRUE, write F if the statement is FALSE.
________1. Managerial work is a complex and stressful.
________2. One of the roles of a manager is interpersonal roles which involve interacting only
within organization.
________3. Frederick Taylor introduced mass production in quest for maximizing output.
________4. Gantt chart is one of the most important management tools determining how
variables will change the future.
________5. Front-line managers are responsible for carrying out the goals set by top
management.
_________6. In controlling managers motivate and coordinate employees to work together to
achieve organizational goals.
_________7. Technical skill must be possessed by all levels of management.
_________8. The aim of bureaucracy is to build an organization with formal structure and clear
procedures of rules and regulations.
_________9. Human capital is a great source of competitive advantage.
_________10. Organizational resources should be rare, difficult to imitate and valuable.
 MODULE 3: PLANNING
Introduction
This module will give a selecting missions and objectives and the actions to achieve your
goals. An important aspect of planning is decision making - that is, choosing the right alternatives for
the future course of action. Organizations have to typically plan for long-range and short-range
future direction. By forecasting and predicting the market and socio-political-economic trends,
managers can plan to determine where they desire the company to be in future.
This module discussed the types of planning, benefits of planning, and the levels of planning.
Thus, it helps you how it is important to set your plans.

Intended Learning Outcomes

At the end of this module, students should demonstrate:

➢ The focus on organizational activity on a set of consciously created objectives.

➢ Provide a systematic guide for future activities.
➢ Increase organizational outcome through efficient operation.
➢ Encourage systematic thinking. Planning facilitates effective delegation of authority, removes
communication gaps, and thereby raises overall efficiency.

Rationale
✓ It provides a clear description and understanding of the proposal.
✓ Provide an opportunity, at the outset, to establish why the proposal should be considered
✓ To highlight important information specific or particular to the application
✓ To enable students to analyze and prepare recommendations on the application

Pre-activities

Test your Curiosity

Directions:

1. Define planning in your own perspective.

2. Discuss the benefits of planning
3. Describe the nature of goal in organization
4. Explain the importance of decision making and its process

Discussion
1.1 What is planning?
Planning is the process of determining objectives and organizational goals,
establishing strategies and integrating coordinated activities in the organization to achieve the goals
and objectives. Planning sets a direction for an organization in achieving its goals. A manager must
know that planning is one of the tasks that they need to perform actively.
Planning involves determining various types and volumes of physical and other
resources to be acquired from outside, allocating these resources in an efficient manner among
competing claims and to make arrangement for systematic conversion of these resources into useful
outputs. Since plans are made to attain goals or objectives, every plan should lead to the
achievement of the organization’s purpose and objectives. An organized enterprise exists to
accomplish group objectives through willing and purposeful co-operation.
Planning bridges the gap between where the organization stands currently and wishes to be
in future. In the absence of planning, events are left to chance.
1.2 Types of Planning

STANDING CONTINGENCY
SINGLE USE PLAN
PLAN PLAN

Figure 7

1. Single Use Plan

It is a set of activities designed for a specific goal that is unlikely to be repeated in the future.
Most of the time a single use plan is used for a particular time period; it is developed for a one
time project or event.
Example:
University of Santo Tomas prepares a plan for its coming 400 years celebration. These plan
involves the activities that will be used during the celebration like the parades, fireworks and
concerts.
2. Standing Plans
It is an ongoing plan designed without a determined time period. It is often created to
achieve a continuing set of goals. Standing plans are usually policies, rules, procedures and
program developed to serve as guidelines or methods to be followed in accomplishing
particular objectives.
3. Contingency Plans
Managers must able to detect changes before they happen. It is about thinking ahead and
preparing for the worst-case scenario. Since the future cannot be predicted with a high
degree of certainty, contingency plans need to be prepared (Koontz & Weihrich, 2004). It
involves indentifying an alternative course of action to be taken and implemented if the initial
plans do not work due to uncontrollable events.
Example:
Contingency plans are important for most common situations especially when an unexpected
problem occurs like a machine stops working in the middle of the production process.
Managers need to come up with back-up plan.

1.3 BENEFITS OF PLANNING

✓ Planning reduces uncertainty

✓ Planning create goals that is used in controlling
✓ Planning gives direction
✓ Planning improves performance of the people within an organization
✓ Planning improves coordination of work.

1.4 LEVELS OF PLANNING

Table 1
LEVEL OF MNGT. TIME HORIZON
STRATEGIC PLANNING TOP 3-7 YEARS

TACTICAL PLANNING MIDDLE 1-3 YEARS

OPERATIONAL PLANNING FRONTLINE LESS THAN 1 YEAR

1. Strategic Planning
Involves analyzing and determining objectives and deciding what actions are
needed to be taken to achieve them. Developing strategy is a never ending job of crafting
the story line for success.
 2. Tactical Planning
Is a set of procedures for translating broad strategic goals and plans into specific
goals and plans that is relevant to a distinct portion of the organization, such as functional
area like marketing (Bateman & Snell, 2008).
3. Operational Planning
It deals with limited scope and focus on specific areas. It process of setting short-range
objectives and determining in advance how they will be accomplished (Lussier, 2006). It is
used to identify the procedures and resources needed by the lower level managers.
3.1 THE NATURE OF A GOAL IN ORGANIZATION
An organization needs to have a goal to drive every member from the top management
down to the lower level of organization towards a common desired outcome. In this sense
we can define GOALS as a desired outcome or targets that need to be accomplished by
an individual or the entire organization. Before planning is set in an organization, it needs to
establish a set of goals or objectives to serve as a foundation of the planning.

Figure 8

CHARACTERISTIC OF GOAL

1. Specific – it means that goal must be accurate and well defined.

2. Measurable – it pertains that goal have to be quantifiable.
3. Attainable – it refer that goal need to be achievable and manageable
4. Relevant – it means that goal be important and significant
5. Time-bound- it means that goal should have a target date or date of completion

TYPES OF GOALS

1. Short-term Goal is a type of goal that needs to be achieved in a short period of time. One
may achieve this goal in a day, week, month or year. It is more manageable and results are
easily available once a task is completed.
2. Long-term Goal is a type of goal that deals in the future because it need to be achieve over a
longer period of time and typically not achievable in one step. Often time goals set in this
period is more meaningful but achieving this goal requires greater effort and focus that is why
it is important to manage and maintain a positive attitude and outlook.
2.2 THE IMPORTANCE OF DECISION MAKING

PROGRAMMED
DECISON

DECISION

NON
PROGRAMMED
DECISION

Figure 9

What is Decision Making?

Decision Making is a process of choosing and selecting best possible alternatives. A decision is
useless unless they are not acted on or implemented. All managers in different level perform different
functions and possess various skills; one of the important skills all managers need to acquire is the
conceptual and decisional skills. This is one basic qualification of effective managers and one major
criterion needed for success in management.

TYPES OF DECISION

1. Programmed Decision is a type of decision that is highly structured wherein procedures in a

decision is provided with predetermined decision rules. A type of decision that have been
encountered before which involves established procedures, policies, and rules. Programmed
Decisions are made in response to repetitive decision.
Example:
Miguel is an employee of the bank. He always arrives late for work; with this he expects a
deduction from his salary. A manager uses a programmed decision since these instances
have been encountered before, and the manager will apply the company policies regarding
tardiness.
2. Non-programmed Decision is a type of decision that is unstructured with no clear procedures
for making decision. It deals with developing or creating a possible solution and all alternatives
should be evaluated.
Example:
When the typhoon “Ondoy” (September 2009) brought unexpected heavy rains which causes
massive flooding of key cities of Metro Manila. Government officials use non programmed
decisions in handling these unforeseen events.

Figure 10
BASIC DECISION PROCESS
Step 1: Identify the decision
You realize that you need to make a decision. Try to clearly define the nature of the decision you
must make. This first step is very important.
Step 2: Gather relevant information
Collect some pertinent information before you make your decision: what information is needed, the
best sources of information, and how to get it. This step involves both internal and external “work.”
Some information is internal: you’ll seek it through a process of self-assessment. Other information is
external: you’ll find it online, in books, from other people, and from other sources.

Step 3: Identify the alternatives

As you collect information, you will probably identify several possible paths of action, or alternatives.
You can also use your imagination and additional information to construct new alternatives. In this
step, you will list all possible and desirable alternatives.

Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if you carried out each of
the alternatives to the end. Evaluate whether the need identified in Step 1 would be met or resolved
through the use of each alternative. As you go through this difficult internal process, you’ll begin to
favor certain alternatives: those that seem to have a higher potential for reaching your goal. Finally,
place the alternatives in a priority order, based upon your own value system.
Step 5: Choose among alternatives
Once you have weighed all the evidence, you are ready to select the alternative that seems to be
best one for you. You may even choose a combination of alternatives. Your choice in Step 5 may
very likely be the same or similar to the alternative you placed at the top of your list at the end of
Step 4.
Step 6: Take action
You’re now ready to take some positive action by beginning to implement the alternative you chose
in Step 5.
Step 7: Review your decision & its consequences
In this final step, consider the results of your decision and evaluate whether or not it has resolved the
need you identified in Step 1. If the decision has not met the identified need, you may want to
repeat certain steps of the process to make a new decision. For example, you might want to gather
more detailed or somewhat different information or explore additional alternatives.
(https://www.umassd.edu/fycm/decision-
making/process/#:~:text=Decision%20making%20is%20the%20process,relevant%20information%20an
d%20defining%20alternatives.)
IMPORTANCE OF MISSION AND VISSION
MISSION STATEMENT
An organization mission is the reason for its existence. It is expressed in its mission statement the
purpose of an organization. A mission statement serves as the basis for organizational goals which
provides more detail. It also describes the scope of the mission (Stevenson & Chuong, 2010), it guides
the actions of the organization and describe what the organization does.
VISION STATEMENT
A organization vision is a mental image of a possible and desirable future state of the
organization. The best visions are ideal and unique. Ideal, if it communicates a standard of
excellence and a clear choice of positive values. Unique, if it communicates and inspire pride in
being different from other organization; the vision statement clarifies the long-term direction of the
company and its strategic intent.

ACTIVITIES
Activity 1: Discussion Questions

1. Describe the importance of establishing objectives and goals when creating a plan for an
organization.
2. Given the three different types of planning which among this plan you usually use? Why?
3. Provide a clear example that will differentiate the three levels of planning
4. In your opinion, why should a goal be S.M.A.R.T?
5. What kind of risky decision you have made as a student? What are the factors that affect your
decision?
6. When making a decision do you follow a step by step process? Why?
Application Exercises
Make a detailed plan for the entire week write it in a diary or notebook or in MS word and
make sure to include your own set of objectives and goals. Check if you could be able to focus on
your plan and implement it. Evaluate your progress everyday and monitor yourself if you could be
able to accomplish your goal. If necessary you can create a contingency plan.

MODULE 4: ORGANIZING
INRODUCTION

This module focuses specifically on the organizing function. Organizing involves coordinating
and allocating a firm’s resources so that the firm can carry out its plans and achieve its goals. This
organizing, or structuring, process is accomplished by:

• Determining work activities and dividing up tasks (division of labor)

• Grouping jobs and employees (departmentalization)
• Assigning authority and responsibilities (delegation)

This module will tackle the types of departmentalization, job design and job specification, job
specialization and job design. It helps you to identify a certain position of an individual and
what is he capable of.
Intended Learning Outcomes
At the end of this module, students should comprehend:

➢ Present various human resource challenges and explore the implications for business
decisions
➢ Offer students the opportunity to participate in open dialog about the impact of
technology on society
➢ Enhance students’ understanding of phase transitions and Landau Theory
➢ Provide a broad introduction to microbiology to non-biologists

Rationale
✓ It helps students to organize a certain circumstance that may come.
✓ It leads them to proper arrangement of their plans to achieve their certain goals.
✓ It gives them an aspect of what typically their job, what would be their function, what
specifically their job description.

Pre-activities

Test your Curiosity

Directions:

1. Define organizing
2. Define organization structure
3. Determine the types of departmentalization
4. Describing job design
5. Describe the importance of job specialization

Discussion
1.1 What is organizing?
According to Robbins (2012 p.293), organizing is defined as arranging and structuring
work to accomplish organizational goals. It is also defined as the management function that
determines how the firm’s resources are arranged and coordinated; the deployment of resources to
achieve strategic goals.

1.2 Structure of the Organization

 According to Robbins (2012), Organizational structure is the formal arrangement of
jobs within an organization. Dubrin (2012) stated that Organization structure is the arrangement of
people and tasks to accomplish organizational goals.
Organizational structure represents a detailed arrangement of job functions per
department that is accorded to the employee scope of responsibility. The mentioned
responsibilities are geared towards the attainment of the established goals and objectives. The
structure can also be done while the work is subdivided into the departments; this method is
called departmentalization (Dubrin, 2012).
1.3 Types of Departmentalization
According to Dubrin (2012 p. 270-274), there are three types of departmentalization namely these
are functional geographic and product service.

4. Functional Departmentalization is an arrangement that defines departments by the function

each one of performs, such as accounting and purchasing.

CEO &
President

Vice President Vice President Vice President

Marketing Operations Accounting

Figure 1- Functional Departmentalization

5. Geographic departmentalization is an arrangement of departments according to the

geographic area and/or territory served.

Country Sales
Manager

Sales Supervisor
Sales Supervisor Sales Supervisor
Quezon City
Makati Area Manila Area
Area
Figure 2- Geographic Departmentalization

6. Product-service departmentalization is the arrangement of departments according to the

products or services they provide.

Chairman &
CEO of ABC,
Inc.

Real Estate Telecommunic Food and

Development ation Beverage

Figure 3- Product-service Departmentalization

1.4 Job Design & Job Specification
1. Job design is the process of laying out the job responsibilities and duties. It also includes the
description on how these are performed (Dubrin, 2012 p.230)
2. Job Specification refers to the list of the knowledge, skills, abilities, and other characteristics (KSAOs)
that an individual must have to perform a particular job (Noe, et. Al 2007 p.111)
According to Dubrin (2012), dimensions refer to what an incumbent actually does on the job.
Understanding these dimensions leads to an understanding of the nature of the work. There are four
(4) dimensions with sub-dimensions of job design; these are task characteristics, knowledge
characteristics, social characteristics and contextual characteristics.
Task Characteristics refers to the focus on how the work itself is accomplished, the range and nature
of the tasks associated with a particular job. It can be expressed in four sub-dimensions:

1. Autonomy, in general, refers to how much freedom and independence the incumbent has to
carry out in his or her work assignment. The freedom aspect includes (a) work scheduling, (b)
decision making, and (c) wok methods.
2. Task Variety refers to the degree to which the job requires the worker to use a wide range of
tasks. Task significance indicates the extent to which a job influences the lives or work of
others, whether it is inside or outside the organization.
3. Task Identity reflects the extent to which a job involves a whole piece of work that can readily
be identified.
4. Feedback from job refers to the extent to which the job provides direct and clear information
about task performance. The focus is on feedback directly from the job itself, as opposed to
feedback from others (Dubrin, 2012 pp.231-232).

Knowledge Characteristics refers to an obvious job dimension. It is the demand for knowledge, skill
and ability placed on a job holder because of the activities built into the job. This can express in five
(5) dimensions:

1. Job complexity refers to the degree of the job tasks are. This measure the complexity and
difficulty the job is to perform. Work that involves complex tasks requires high-level skills and is
mentally demanding and challenging.
2. Information processing refers to the degree a job requires attending to and processing of data
and information. Dubrin emphasizes that information is the result of making data useful, such
as making sense of a survey about customer satisfaction.
3. Problem solving refers to the degree a job requires unique ideas or solutions, it is also involves
diagnosing and solving non-routine problems and either preventing or fixing errors.
4. Skill variety refers to the extent a job requires the incumbent to use a variety of skills to perform
the work. Skill variety and task variety are not the same thing. The use of multiple skills is
different from the performance of multiple tasks.
5. Specialization refers to the extent a job involves performing specialize tasks or processing
specialized knowledge and skill.

Social Characteristics relate to the interpersonal aspects of a job or the extent the job requires
interaction with others. Social support refers to the degree of a job involves the opportunity for
advice and assistance from others in the workplace. It often contributes the job holder’s well-being of
being able to turn to co-workers for technical assistance. It can be expressed in three sub-dimensions:

1. Interdependence reflects the degree the job depends on others-and others depend on the
job- to accomplish the task.
2. Interaction outside the organization refers to how much the job requires the employee to
interact and communicate with people outside the organization.
3. Feedback from others refers to the extent other workers in the organization provide
information about performance (Dubrin, 2012 p.233)

Contextual Characteristics refer to the setting or environment of the job such as working in extreme
temperature. It can be expressed in four sub-dimensions:

1. Ergonomics indicates the degree to which a job allows correct posture or movement.
2. Physical demands refer to the level of physical activity or effort required for the job, particularly
with respect to physical strength, endurance, effort, and activity.
 3. Work conditions relate directly to the environment the work is performed. It includes the
presence of health hazards, noise, temperature and cleanliness of the workplace.
4. Equipment use reflects the variety and complexity of the technology and equipment
incorporated in to the job.

1.5 JOB SPECIALIZATION & JOB DESIGN

According to Dublin (2012 pp.235-236), Job specialization is the degree a job holder performs a
limited number of task. There are various advantages and disadvantages of Job specialization.
Advantages:

1. When employees perform the same task repeatedly, they become high knowledgeable and
highly skilled.
2. Many employees derived status and self-esteem from being experts at some task.
3. Specialize jobs at lower occupational levels require less training time and less learning ability.

Disadvantages:

1. Coordinating the work force can be difficult when several employees do small parts of one
job.
2. Somebody must take responsibility for pulling together the small pieces of the total task.
3. They become bored by performing a narrow range of tasks.

Job description is written statement of the key features of a job along with the activities required to
perform effectively by the job holder (Dubrin, 2012 p.236). This explain how sometimes a job
description is required to be modified to fit job. It can be done depending on the current task
needed for a particular job.
Job enrichment is an approach in including more challenges and responsibilities in jobs to make
them more appealing to employees.
According to Dubrin, the following are the characteristics of job enrichment:

1. Direct feedback. Employees should receive immediate evaluation of their work. This feedback
can build into job or provided by the supervisor.
2. Client relationship. A job is automatically enriched when an employee has a client or
customer serve.
3. New Learning. An enriched job allows its holder to acquire new knowledge. The learning can
stem for the job experiences or from training programs associated with the job.
4. Control over method. When a worker has some control over which method to choose to
accomplish a task, his or her task motivation generally increases.
5. Control over scheduling. The ability to schedule one’s work contributes to job enrichment.
Scheduling includes the authority to decide when to tackle which assignment and having
some say in setting working hours.
6. Unique experience. An enriched job exhibits unique qualities or features.
7. Control over resources. Another contribution to enrichment comes from having some control
over resources such as money, material, or people.
8. Direct communication authority. An enriched job provides workers to opportunity to
communicate directly with people who use their output.
9. Personal accountability. In enriched job, workers take responsibility for their results.

Activities
Activity 1: Discussion Questions

1. What is the definition of Organizing?

2. List down five or ten people you know who are employed in the government or private
institution. Then identify their level of management and give one task they perform.

Name Management Level Task

2. _________________ _________________________________ ______________________
3. _________________ _________________________________ ______________________
4. _________________ _________________________________ ______________________
5. _________________ _________________________________ ______________________
6. _________________ _________________________________ ______________________
 3. What type of organizational structure your school has? And why does the school choose that
structure?

UNIT III: BASIC PRINCIPLES OF MANAGEMENT

MODULE 1: LEADING
Introduction
This module will give you a broad view of the basic concepts of management. This
part aims to give you a foundation of what management is and why it is needed. It will help
you to develop your skill in each of the management function and help you cultivate an
interest in applying these functions to help you succeed as a manager in the future.
Now, in the World of Business, competition is inevitable, and it is now considered as
motivational factor to most entrepreneurs. This new trend in business sets a challenging
motion from small enterprises to bigger enterprises and from local corporations to
international corporations. With all these changes and development, one important function
of management arises, which is Leading. Leading is the key factor that is considered as a
guide or administrator in reaching every business goal.
In this module, the reader/students will learn the basics on how to become an
effective leader through traits, character and different styles. The chapter will also tackle the
importance of motivation, communication and leadership in the business; and it also
includes an additional discussion of Entre-Pinoy by its nature and the Entrepreneur’s
alphabet from A to Z.

Intended Learning Outcomes

At the end of this module, students should:

➢ Develop critical thinking skills.

➢ Students will develop an understanding of change processes and be able to
think critically about obstacles to change.
➢ Students will understand and be able to use a process for decision making.

Rationale
This module will help students how important the leading in good leadership. This will
also serve as their guidelines to achieve their goals in a right decision they must decide. It
makes also clear how the proposed study will help: in resolving uncertainties, and in leading
to new scientific understanding.
Pre-activities

Test your Curiosity

Directions:

1. Define leading
2. Identifying the Types of Leadership
3. The importance of Leading in Management
4. Determining the leadership in Power, Politics, Creativity and Innovation
5. The importance of Motivation
Discussion
1.1 What is Leading?
Leading is defined as a function of management that directs and guides every
aspiring businessman in achieving its main goals and binds the importance of motivation,
communication and leadership in an organization.
By expanding the definition, leading is third important function of
management. Moreover, directing and guiding is also important in any business, as it sets
process and objectives in order to meet its main target which is to provide goods and
services for customer satisfaction for profit.
Motivation is another important term in the definition, as it provides a power to
shape loyalty of its employees by giving incentives, bonuses, benefits and more.
Communication is necessary in any organization for it develops smooth
transaction and understanding with each other. And lastly, Leadership is set to show
authority, a person in charge, someone who is able to give commands and a perfect role
model that will inspire his employees in the organization.
1.2 Leadership
Leadership refers to the organization of resources. It also includes keeping
employees able to work with each other harmoniously in achieving a common goal. In
addition, according to Dubrin (2010), leadership is defined as “the ability to inspire
confidence and support among the people who are needed to achieve organization
goals.” Leadership should also be suited and appropriate according to the characteristic
of people, perfect timing and place cultural system.
Leadership Styles

When it comes to leadership, styles and forms are accompanied by different needs of
organizations or firms. This leadership styles shape the company’s attitude and values
attaining its goals. There are four types of leadership styles:
1. Participative Leadership
2. Democratic Leadership
3. Autocratic Leadership
4. Dictatorial Leadership

Participative Leadership is a style of leadership that requires to hear the voices of all people
concern. This is achieved by the active participation of the employees in the decision
making process of the organization.
Democratic Leadership is another style of leadership where both sides of the stories or
parties point of view or idea will be considered in upcoming with a rightful decision to be
able to achieve the main goal of the organization.
Autocratic Leadership according to Dubrin (2010), “Autocratic leaders retain most of the
authority because they make decision confidently, assume that the group members will
comply and are not overly concerned with group members attitude towards decision.
Dictatorial Leadership the so called “dictatorship” leadership is another style of the
leadership that only considers the opinion of the authority of the “dictator” in the decision-
making process. No one has the right to act on their choices or decision unless they are
given approval of the higher authority.
The seven primary leadership styles are:

1. Autocratic Style
The phrase most illustrative of an autocratic leadership style is "Do as I say." Generally,
an autocratic leader believes that he or she is the smartest person at the table and
knows more than others. They make all the decisions with little input from team
members. This command-and-control approach is typical of leadership styles of the
past, but it doesn't hold much water with today's talent.

That's not to say that the style may not be appropriate in certain situations. For
example, you can dip into an autocratic leadership style when crucial decisions need
to be made on the spot, and you have the most knowledge about the situation, or
when you're dealing with inexperienced and new team members and there's no time
to wait for team members to gain familiarity with their role.

2. Authoritative Style
The phrase most indicative of this style of leadership (also known as "visionary") is
"Follow me." The authoritative leadership style is the mark of confident leaders who
map the way and set expectations, while engaging and energizing followers along
the way. In a climate of uncertainty, these leaders lift the fog for people. They help
them see where the company is going and what's going to happen when they get
there.

Unlike autocratic leaders, authoritative leaders take the time to explain their thinking:
They don't just issue orders. Most of all, they allow people choice and latitude on how
to achieve common goals.

3. Pacesetting Style
"Do as I do!" is the phrase most indicative of leaders who utilize the pacesetting style.
This style describes a very driven leader who sets the pace as in racing. Pacesetters set
the bar high and push their team members to run hard and fast to the finish line.

While the pacesetter style of leadership is effective in getting things done and driving
for results, it's a style that can hurt team members. For one thing, even the most driven
employees may become stressed working under this style of leadership in the long run.

An agile leadership style may be the ultimate leadership style required for leading
today's talent.
Should you avoid the pacesetting style altogether? Not so fast. If you're an energetic
entrepreneur working with a like-minded team on developing and announcing a new
product or service, this style may serve you well. However, this is not a style that can be
kept up for the long term. A pacesetting leader needs to let the air out of the tires
once in a while to avoid causing team burnout.

4. Democratic Style
Democratic leaders are more likely to ask "What do you think?" They share information
with employees about anything that affects their work responsibilities. They also seek
employees' opinions before approving a final decision.

There are numerous benefits to this participative leadership style. It can engender trust
and promote team spirit and cooperation from employees. It allows for creativity and
helps employees grow and develop. A democratic leadership style gets people to do
what you want to be done but in a way that they want to do it.

5. Coaching Style
When you having a coaching leadership style, you tend to have a "Consider this"
approach. A leader who coaches views people as a reservoir of talent to be
developed. The leader who uses a coach approach seeks to unlock people's
potential.

Leaders who use a coaching style open their hearts and doors for people. They
believe that everyone has power within themselves. A coaching leader gives people
a little direction to help them tap into their ability to achieve all that they're capable
of.

6. Affiliative Style
 A phrase often used to describe this type of leadership is "People come first." Of all the
leadership styles, the affiliative leadership approach is one where the leader gets up
close and personal with people. A leader practicing this style pays attention to and
supports the emotional needs of team members. The leader strives to open up a
pipeline that connects him or her to the team.

Ultimately, this style is all about encouraging harmony and forming collaborative
relationships within teams. It's particularly useful, for example, in smoothing conflicts
among team members or reassuring people during times of stress.

7. Laissez-Faire Style
The laissez-faire leadership style is at the opposite end of the autocratic style. Of all the
leadership styles, this one involves the least amount of oversight. You could say that
the autocratic style leader stands as firm as a rock on issues, while the laissez-faire
leader lets people swim with the current.
On the surface, a laissez-faire leader may appear to trust people to know what to do,
but taken to the extreme, an uninvolved leader may end up appearing aloof. While
it's beneficial to give people opportunities to spread their wings, with a total lack of
direction, people may unwittingly drift in the wrong direction—away from the critical
goals of the organization.
https://www.americanexpress.com/en-us/business/trends-and-insights/articles/the-7-
most-common-leadership-styles-and-how-to-find-your-own/

Activities
Activity 1: Explain

1. Give an example of the four (4) types of leadership with the person/leader you have
known in politics. Explain each.
2. Is there a correlation between autocratic leadership and narcissistic personality?
3. What are your views about Dictatorship, style of political System?

Activity 2: Essay (minimum of 300 words and maximum of 500 words)

Directions: Write your answer in long bond paper (much better you would answer in docx. –
Font style: Times New Roman, Font Size: 12, Margins: 1.0, Spacing: Single)

Criteria:
• Substance of the content - 45%
• Relevance - 20%
• Organization on the clarity of ideas - 20%
• Originality - 10%
• Punctuality - 5%
TOTAL 100%

1. What leadership will you chose? Why?

Leadership Grid
Leadership grid or Managerial grid is based on decision making through networking and
close connections. The leadership grid was developed in the 1950’s by Robert Blake and
Jane Mouton. It is based on two dimensions- concern for production and concern for
people. According to Dubrin “Leadership Grid is a framework for specifying the extent of a
leaders concern for the production and people.”

Leadership: The Two Dimensions

Figure 1

1.3 Charismatic and Transformational Leadership

Charismatic Leadership from the Greek word Charisma, which means “divinely inspired gifts”,
a charismatic leader is where a manager possesses charms, a powerful personality and
durable attributes that is admired and accepted by many.

Transformational Leadership refers to a special quality and skill of a leader that brings
positivity, persuasion and changes to the organization.

1.4 Power and Politics Leadership

Power using the right set of leadership skill, an individual can establish power over his
employees. Power can also provide a leader the ability to command and implement force.

Politics attaining power requires mastery of political dynamics in an organization. Politics is

present in any type of organization-it may exist in the highest level of the organization or
within a particular group.
1.5 Creativity and Innovation Leadership
Creativity, being creative as a leader is essential. It is not just about the experience, leaders
should also know how to think “out the box” and to take risk beyond their comfort zones in
order to continually upgrade and become a sustainable enterprise.
Innovation, being innovative as a leader is a critical skill. An innovative leader develops an
innovative mindset, offers new and interesting products/services in the market and fosters a
consistent and inventive atmosphere in their work environment.
1.6 The Importance of Motivation
Motivation is considered as an encouragement to any kind of activity. It is important in an
organization, especially for the employees. It keeps them up and running to achieve their
main goal.

Motivation Theories
Motivation is a state-of-mind, filled with energy and enthusiasm, which drives a person
to work in a certain way to achieve desired goals. Motivation is a force which pushes a
person to work with high level of commitment and focus even if things are against him.
Motivation translates into a certain kind of human behaviour.
It is important to ensure that every team member in an organization is motivated.
Various psychologists have studied human behaviour and have formalized their findings in
the form various motivation theories. These motivation theories provide great understanding
on how people behave and what motivates them.
Motivation is a huge field of study. There are many theories of motivation. Some of the
famous motivation theories include the following:
1. Maslow’s hierarchy of needs
Abraham Maslow postulated that a person will be motivated when his needs are fulfilled.
The need starts from the lowest level basic needs and keeps moving up as a lower level
need is fulfilled. Below is the hierarchy of needs:
• Physiological: Physical survival necessities such as food, water, and shelter.
• Safety: Protection from threats, deprivation, and other dangers.
• Social (belongingness and love): The need for association, affiliation, friendship, and
so on.
• Self-esteem: The need for respect and recognition.
• Self-actualization: The opportunity for personal development, learning, and
fun/creative/challenging work. Self-actualization is the highest level need to which a
human being can aspire.
The leader will have to understand the specific need of every individual in the team and
accordingly work to help fulfil their needs.

Figure 2

2. Hertzberg’s two factor theory

Hertzberg classified the needs into two broad categories namely hygiene factors and
motivating factors.

Figure 3

Hygiene factors are needed to make sure that an employee is not dissatisfied. Motivation
factors are needed for ensuring employee's satisfaction and employee’s motivation for
higher performance. Mere presence of hygiene factors does not guarantee motivation, and
presence of motivation factors in the absence of hygiene factors also does not work.
3. McClelland’s theory of needs
McClelland affirms that we all have three motivating drivers, and it does not depend on our
gender or age. One of these drives will be dominant in our behaviour. The dominant drive
depends on our life experiences.
The three motivators are:
• Achievement: a need to accomplish and demonstrate own competence People with
a high need for achievement prefer tasks that provide for personal responsibility and
results based on their own efforts. They also prefer quick acknowledgement of their
progress.
• Affiliation: a need for love, belonging and social acceptance People with a high need
for affiliation are motivated by being liked and accepted by others. They tend to
participate in social gatherings and may be uncomfortable with conflict.
• Power: a need for control own work or the work of others People with a high need for
power desire situations in which they exercise power and influence over others. They
aspire for positions with status and authority and tend to be more concerned about
their level of influence than about effective work performance.
4. Vroom’s theory of expectancy
Victor Vroom stated that people will be highly productive and motivated if two conditions
are met: 1) people believe it is likely that their efforts will lead to successful results and 2)
those people also believe they will be rewarded for their success.
People will be motivated to exert a high level of effort when they believe there are
relationships between the efforts they put forth, the performance they achieve, and the
outcomes/ rewards they receive.
5. McGregor’s theory X and theory Y
Douglas McGregor formulated two distinct views of human being based on participation of
workers. The first is basically negative, labelled as Theory X, and the other is basically positive,
labelled as Theory Y. Both kinds of people exist. Based on their nature they need to be
managed accordingly.
• Theory X: The traditional view of the work force holds that workers are inherently lazy,
self-centred, and lacking ambition. Therefore, an appropriate management style is
strong, top-down control.
• Theory Y: This view postulates that workers are inherently motivated and eager to
accept responsibility. An appropriate management style is to focus on creating a
productive work environment coupled with positive rewards and reinforcement.
(https://www.knowledgehut.com/tutorials/project-management/motivation-theories)

1.3 Leadership by Entrep-Pinoy by: Edilberto B. Viray Jr.

An entrepreneur is an individual who is possesses combination of different sets of managerial
skills needed in the business. These managerial skills are developed with the help of
experience, educational learning, workshops and training.
Entrepreneur as a Leader
An entrepreneur is a leader, he is set to be main role model of the entire firm.
All he’s subordinates follow all his doings and all he’s commands.
Why you should be an entrepreneur?
Every individual’s common goal is to improve himself, his family and the whole economy by
acquiring employment through private business or entrepreneurship. What does an
entrepreneur envision? Classy suits, luxury cars, real estate properties, jewelry, latest
electronics/gadgets or more time for family, travels abroad or just around the country.

The Entrepreneur’s Alphabet

(A to Z of Business)
BY Jonavie & Edilberto, Jr. Viray

A is for ABILITY TO ORGANIZE RESOURCES

The importance of 6M’s in the business is needed such as Manpower, Materials, Money,
Moment or time, and Methods. Organization of resources is important to identify the needs
of the company when it comes to its operations.
B is for BEHAVIOR
Entrepreneurship is a distinct feature of an individual or institution, but it is not a trait but an
aspect of behaviour. Behaviour is the central element in the entrepreneurial process, and a
person’s actions are what make them entrepreneurial.
Entrepreneurial behaviour is the result of the successful development of an organisation by a
growth oriented entrepreneur.

C is for CREATIVITY
Creativity involves coming up with ideas. Entrepreneurship involves capturing ideas,
converting them into products and services, and then building a venture to take the product
to market.
“Whenever some firms in an industry do something else, something that is outside of the
range of existing practice, we may speak of creative response. Accordingly, a study of
creative response in business becomes co-terminus with a study of entrepreneurship”.
D is for DIFFERENT
Entrepreneurs are motivated by doing something different rather than doing better what is
already being done. It is in most cases only one entrepreneur or a few entrepreneurs who
see “the new possibility and are able to cope with the resistances and difficulties which
action always meets with outside of the ruts of established practice”. Entrepreneurs are
individuals who create something different.
E is for EXECUTION
Profitable survival and growth requires a combination of a creative idea and a superior
capacity for execution.
“It is not invention that matters, but its adoption and actual working. The inventor produces
ideas, the entrepreneur ‘gets things done.
Entrepreneurs share a commitment to engaging everyone in identifying and pursuing
entrepreneurial opportunities, coupled with a disciplined and consistent focus on execution.
They make execution a natural sequence in the strategy process.
F is for FUTURE
Entrepreneurs are concerned not with what is but what can be. They envision the future,
recognise emerging patterns, identify untapped opportunities and come up with innovations
to exploit these opportunities.
Those who can expand their imaginations to see a wider range of possible futures are much
better positioned to take advantage of the unexpected opportunities that will arise in the
future. In fact, industry foresight, which is the ability to synthesize the collective impact of a
complex set of economic, political, regulatory and social changes, is increasingly at a
premium.
G is for GROWTH
The entrepreneurial mind-set is a growth oriented perspective. Growth is the dominant goal
of the entrepreneurial organization. The entrepreneur establishes and manages a business
for the primary purposes of profit and growth. Entrepreneurial activity does not cease once a
new firm is fully operative, or an innovation successfully launched.
Entrepreneurship then is the function by which growth is achieved, and not only the act of
starting new businesses.
H is for HARDWWORK/ING
The entrepreneurial journey to success is notoriously hard, and the start-up failure rate is very
high. An entrepreneur has the persistence to see things through to the end even when faced
with obstacles and difficulties. Niccolo Machiavelli in his seminal book ‘The Prince’ defined
an entrepreneur as someone who sees no difference between obstacle and opportunity,
and can use both to his advantage.
I is for INNOVATION
Joseph Schumpeter considers entrepreneurship as something which essentially disrupts the
market through innovation. Innovation is the creation, development and implementation of
new ideas and behavior. It is through innovation that ideas are brought to life, and
opportunities are translated to enduring value.
J is for JACK OF ALL TRADES
Jack of all trades means wanting to learn as much so that they have no dependence on
anyone. They become jack of all trades, nut not necessarily master on anyone.
K is for KEEN FOR DETAILS
Keen for details means the devil is in the details! Entrepreneurs know that. That is why, even if
they are passionate about the big picture, the entrepreneurs are keen in understanding the
smaller and simplest details.

L is for LEGITIMATE
The smart entrepreneur’s should avoid problems by ensuring legitimacy of everything. No
one is above the law. With profit comes state obligations, entrepreneurs should comply with
government rules accordingly.
M is for MINDFUL
Mindful of the changes of in the environment as an entrepreneur is having radar all set to
capture as many information as you can get relative to the changes in the environment you
operate.
N is for NETWORKER
Networker as an entrepreneur loves connecting with different people and they capture
every opportunity to expand their network.
O is for ORGANIZED AND IS AN ORGANIZAER
Organized and is an organizer as an entrepreneur may not appear to be organized, as they
are very volatile, but they are keen for details. They know what they want and are consistent
with that is why they can get organized in their seemingly disorganized movements.
P is for PASSIONATE
An entrepreneur’s heart is determined to break through any obstacles. Their spirit is
something one can easily dampen for they are in the fighting mode of getting thins done, no
matter what.
Q is for QUESTIOING THE STATUS QUO
Entrepreneurs are never satisfied with the status quo. They are change agents that are
passionate about being ahead or being the cause change.
R is for RESOURCEFUL
An Entrepreneurs sees the glass as half full rather than half empty. They are very resourceful
that they are able to use anything they are given to achieve the results that they are given
to achieve the results that they want.
S is for SUCCESS ORIENTED
To the ultimate entrepreneurs, the road to success is always under construction. This is the
reason why they don’t rest In the laurels of their present success.

T is for TIME CONSCIOUS

An entrepreneur always value time as the most important perishable resource. And they are
never waste it.
U is for UNDIVIDED FOCUS
An entrepreneur’s focus in one of their secrets. When they work! When they rest! When they
play, they enjoy! That is one important secret of an ultimate entrepreneur. You cannot divert
their attention away from something they want to do.
V is for VISIONARY
An entrepreneur knows his direction. They are very good in creating the “ideal state of the
future”. Entrepreneurship is the ability to build from a vision, from practically nothing.
Entrepreneurs are guided by that vision, have a sense of what they are and what they want
to become.
W is for WINNING ATTITUDE
Entrepreneurs were born to win. They are driven by the only option of winning because even
if they lose, they are determined to bounce back.
X is for X-TREMELY SMART
Entrepreneurs are street smart! Very practical and are guided by the solid basis for decision
making and actions. They are perceived to outsmart others, but they are very simply
determined to get what they want and win.
Y is for YEARNING TO LEARN
An entrepreneur never stops learning. They may not know everything, but they are capable
on knowing anything! They never rely on what they currently know for they perceived to be
ahead for others.

Z is for ZELOUSLY ENERGETIC

Others will get tired watching entrepreneurs for they exude zeal and enthusiasm that can be
exhausting. They have inexhaustible energy to work. An entrepreneur is always active
enthusiastic, eager, passionate and intense when it comes to business operations.
Activities
Activity 2:
PART 1: Discussion Questions

1. What is the importance of leading?

2. What is a leader?
3. What is the role of a leader?
4. What is motivation?
5. Name at least TEN (10) reasons on how motivate people?
6. What is communication?

PART 11: Define the following terms:

1. Leader-
2. Leading-
3. Entrepreneur-
4. Communication-
5. Autocratic Leadership
6. Directing
7. Democratic Leadership
 8. Motivation-
9. Social needs-
10. Manager-

PART III: ESSAY

Direction: Answer the following question thoroughly.

1. From the Entrepreneur’s alphabet list, choose at least 5 characteristics that best
describe you as a future leader/entrepreneur of this country.

MODULE 2: COMMUNICATION
INTRODUCTION

This module will give you an idea on how important the communication in an
organization. This part will help you develop your communication skill as good function in
management. Although you communicate simply by being in the world, developing good verbal
and body language skills involves learning and consciously using your skills to improve.

The act of communicating verbally serves to convey how we feel and how we think to
others. It is also the basis of how we relate with others, using language as its medium. Increasing
knowledge and awareness of some of the components involved in effective communication can
serve to improve how we use those components personally.

INTENDED LEARNING OUTCOME:

At the end of this module, you should be able to:
1. Understand and apply knowledge of human communication and language processes as they
occur across various contexts, e.g., interpersonal, intrapersonal, small group, organizational, media,
gender, family, intercultural communication, technologically mediated communication, etc. from
multiple perspectives.

2. Understand and evaluate key theoretical approaches used in the interdisciplinary field of
communication. I.e., students will be able to explain major theoretical frameworks, constructs, and
concepts for the study of communication and language, summarize the work of central thinkers
associated with particular approaches, and begin to evaluate the strengths and weaknesses of their
approaches.

3. Understand the research methods associated with the study of human communication and
apply at least one of those approaches to the analysis and evaluation of human communication.

4. Able to find, use, and evaluate primary academic writing associated with the communication
discipline.

5. Develop knowledge, skills, and judgment around human communication that facilitate their
ability to work collaboratively with others. Such skills could include communication competencies
such as managing conflict, understanding small group processes, active listening, appropriate self-
disclosure, etc.

6.Communicate effectively orally and in writing.

RATIONALE:
This module helps students to understand how important communication is. It helps
them to give some specific actions if the communication was correctly delivered.
DISCUSSION

Communication is both an art and a science. It often involves acts of speaking and
listening, reading and writing, but it also goes beyond these and incorporates the transmission of non-
verbal language, sign language, codes transmitted electronically (e.g., Morse code), and physically
(touch; hormones; muscles, tendons, nerves), and messages communicated through music, and by
other means.

Communication is being utilized in order to keep transactions smooth both

within the organization and outside. Communication needs to be treated with proper and
correct understanding.
1.1 Forms of Communication

1. The Fundamental forms of communication are through speaking, writing and listening.
These skills are necessary for the management in order to have smooth, rightful and
perfect flow of transaction on the organization.
2. Speaking allows anyone to hear their voice in the organization regarding their opinions
and suggestions.
3. Writing is another form of communication. They use this to compose memos, formulate
contracts, corporation by-laws, rules, electronic mails and more.
4. Listening the last form of communication. This is a special form of communication that
helps the organization accept the voice; opinions and suggestions of employees that
will help the company.

1.2 Types of Communication

1. Formal Communication refers to the type of communication that uses proper,

directive and more suggestive way of connecting within an organization.
2. Informal Communication is the opposite of the formal communication. Under this type,
it considers the upward communication to a group interpersonal communication.

Ways to Communicate
Effective communication is an important tool in any organization, nowadays, organizations
use different ways to express their needs, wants and demands to their superior, employees
and even their customers. Below are listed examples:

1. Trainings and seminars

2. Visual aids
3. Exhibition and displays
4. Bulletin boards
5. Meetings
6. Conferences and conventions
7. Electronic mail
8. Social networking sites
9. Reports
10. Letters and memoranda
11. Telephone and mobile calls
12. Texting
13. All types of media
14. Company websites/webpage
15. Company network partners

Barriers to Communication
Communication is a key factor in two-way party, but having barriers will
complicate and create misunderstanding.
 MODULE 3: CONTROLLING

Introduction
This module helps in the formulation of future plans in light of the problems that were
identified &, thus, helps in better planning in the future periods. So, from the meaning of
controlling we understand it not only completes the management process but also improves
planning in the next cycle.
Intended Learning Outcomes
After reading and studying this chapter, the reader should be able to:

1. Define control
2. Importance of control in management
3. Describe the control process
4. Identify organizational control process

Rationale
✓ It provides a clear description and understanding of the proposal.
✓ Provide an opportunity, at the outset, to establish why the proposal should be
considered
✓ To highlight important information specific or particular to the application
✓ To enable students to analyze and prepare recommendations on the application

Discussion

Controlling is a regulatory process of establishing standards. These standards are used

to achieve organizational goals, comparing actual performance to the standards, and
taking corrective action when necessary to restore performance to those standards
(Williams, 2012)

1.1 The Control Process

According to Williams (2012), control has its basic process to established an
measured to meet organizational goals and objectives, namely:

1. Standards- ate the basis of comparison for measuring the extent to which
organizational performance are satisfactory or unsatisfactory. It can also be
determined by benchmarking with other companies. Benchmarking is the process of
determining, how well or other companies perform business functions or tasks.
2. Comparison of Standards- this is to compare actual performance standards. The
quality of the comparison largely depends on the measurement and information
systems a company uses to keep track of performance. The better the system, the
easier it is for a company to track performance and identify problems that need to be
fixed.
3. Corrective Action- this is to identify performance deviations, analyze performance
deviations, and then develop and implement programs to correct them
4. Dynamic Cybernetic Process- this begins by setting standards and then measuring
performance and comparing performance to the standards. If the performance
deviates from the standards, managers and employees analyze the deviations and
develop and implement corrective programs that achieve the desired performance
standards.
5. Control isn’t always worthwhile or Possible – this achieved when behavior and work
procedures conform to standards and goals are accomplished.

Methods of Control
According to Williams (2012), there are five different methods to achieve
control in the organizations, namely:
 1. Bureaucratic Control – is from top to down control, in which managers try to influence
employee behavior by rewarding or punishing employees for compliance or non
compliance with organizational policies, rules, and procedures.
2. Objective Control – it the use of observable measures of employee behavior or output
to assess performance and influence behavior. William, Chuck mentioned that there
are two control, namely:
2.1 Behaviour Control is the regulation of behavior and actions of workers do
on job. The basic assumption of behavior control is that if you do the right
things every day, then those things should lead to goal achievement.
2.2 Output Control measures the results of their effort. It gives managers and
workers the freedom to behave as they see fit as long as they accomplish
pre-specified, measurable results and it is often coupled with rewards and
incentives.
3. Normative Control – to shape the beliefs and values of the people who work,
normative control is a company’s widely shared values and beliefs guide worker’s
behavior and decisions.
4. Concertive Control- are based on beliefs that are shaped and negotiated by work
groups. Furthermore, concertive control is not established overnight. Highly
autonomous work groups evolve through two phases as they develop concertive
control.
5. Self-control – is a control system in which managers and workers control their own
behavious. Self-control does not result in anarchy, or state in which everyone gets to
do whatever he or she wants.

1.2 Organizational Control Focus

According to Daft (2008), control can be typified by events such as before, during,
or after, it can be named as feed forward, concurrent and feedback control it is described
as follows:

1. Feed forward control – it is a control that focuses on human, material, and financial
resources flowing into the organization; also called as preliminary or preventive
control.
2. Concurrent control – it is a control that consists of monitoring ongoing activities to
ensure that they are consistent with standards.
3. Feedback control- it is a control that focuses on the organization’s output; also called
as post action or output control.

Activities
Activity 1: Discussion Questions

1. What is the definition of control?

2. When you go out and buy something in the grocery or any merchandise inside the
mall, observe certain control parameters set by the mall/outlet administration to
anticipate present and future consequences and then anticipate your observation.
How do the management of that outlet prepare for such consequences that might
occur? What method of control that they practice and/or utilizes?
 MODULE 4: MOTIVATION

INRODUCTION
This module discussed the Motivation as an urge to behave or act in a way that will
satisfy certain conditions, such as wishes, desires, or goals. Psychologists believe that
motivation is rooted in a basic impulse to optimize well-being, minimize physical pain, and
maximize pleasure.
This will tackle the theories of motivation, the Maslow’s Hierarchy of needs, motivation
incentives, importance of motivation, motivation and morale, and employee/staff
motivation.
INTENDED LEARNING OUTCOMES
At the end of this module, you should know:

• To define motivation in terms of drives, motives, and intrinsic vs. extrinsic motivators.
• Understand the importance of motivation factors
• Encourage the theories of motivation

RATIONALE
It helps students how to give urge or pursuant to make things done accordingly. It made
readers realize to have that motivation factors in all aspect in order to achieve their specific
goals and objectives.
DISCUSSION

Motivation describes the wants or needs that direct behavior toward a goal. It is an
urge to behave or act in a way that will satisfy certain conditions, such as wishes, desires, or
goals. Older theories of motivation stated that rational thought and reason were the guiding
factors in human motivation; however, psychologists now believe that motivation may be
rooted in basic impulses to optimize well-being, minimize physical pain, and maximize
pleasure.

Drives and Motives

Motivations are commonly separated into drives and motives. Drives are primarily
biological, like thirst, hunger, sleepiness, and the need to reproduce—all of which lead us to
seek out and take part in certain activities. Drives are believed to originate within a person
and may not require external stimuli to encourage behavior. Motives, on the other hand, are
primarily driven by social and psychological mechanisms, such as work, family, and
relationships. They include factors like praise and approval.
Both drives and motives can be manipulated by stimulation and deprivation. Motivation can
be stimulated by uncomfortable or aversive conditions or events (shocks, loud noise, or
excessive heat or cold can motivate us to seek better conditions) or by attractions to positive
or pleasurable conditions or events (such as food or sex). We also become motivated when
we’re deprived of something that we want or need, like adequate nutrition or social
contact.

Intrinsic and Extrinsic Motivation

Motivation can be intrinsic (arising from internal factors) or extrinsic (arising from
external factors).
Intrinsically-motivated behaviors are generated by the sense of personal satisfaction that
they bring. They are driven by an interest or enjoyment in the task itself that comes from the
individual, not society. For example, if you are in college because you enjoy learning and
want to make yourself a more well-rounded individual, you are intrinsically motivated.
Intrinsic motivation is a critical element in cognitive, social, and physical development; those
individuals who are intrinsically motivated are likely to perform better and improve their skills
at a given task.
Extrinsically-motivated behaviors, in contrast, are performed in order to receive something
from others. They do not come from within the individual, but from society—other people. For
example, employees might do their work because they want the company to pay them, not
because they love the work. Many athletes are driven by the goal of winning, beating the
competition, and receiving praise from fans; they are not driven by the intrinsic satisfaction
they get from playing the sport. Similarly, if you are in college because you want to make
yourself more marketable for a high-paying career or to satisfy the demands of your parents,
then your motivation is more extrinsic in nature.

Intrinsic and Extrinsic Motivation: Intrinsic

motivation comes from within the individual
and results in a sense of autonomy, mastery,
and purpose. Extrinsic motivation such as
punishments, rewards, and other types of
compensation, come from outside the
individual.

In reality, our motivations are often a mix of

both intrinsic and extrinsic factors, and the
nature of the mix can change over time. For
example, say cooking is one of your favorite hobbies: you love to cook for others whenever
you get a chance, and you can easily spend hours in the kitchen. You
are intrinsically motivated to cook. Then you decide to go to culinary school and eventually
get a job working as a chef in a good restaurant. You are now getting extrinsic
reinforcement (e.g., getting paid) for your work, and may over time become more
extrinsically than intrinsically motivated. Sometimes, intrinsic motivation can diminish when
extrinsic motivation is given—a process known as the over justification effect. This can lead to
extinguishing the intrinsic motivation and creating a dependence on extrinsic rewards for
continued performance.

Motivation vs. Emotion

While motivation and emotion can be intricately linked, they are two fundamentally different
things. Motivation describes the wants or needs that direct behavior toward a goal; in
contrast, an emotion is a subjective state of being that we often describe as a feeling.
Emotion and motivation are linked in several ways: both influence behavior and can lead us
to take action, and emotion itself can act as a motivator. For example, the emotion of fear
can motivate a person to leave a stressful situation, while the emotion of happiness can
motivate a person to be more productive on a project that reinforces that emotion.

Theories of Motivation in Management # Employee Motivation Theories:

1. Maslow’s Need Hierarchy Theory:
The best-known theory of motivation is probably Abraham Maslow’s hierarchy of needs
theory. He pro-posed that people are motivated by a predictable five-step hierarchy of
needs. According to Maslow, most individu-als are not consciously aware of these needs; yet
we all supposedly proceed up the hierarchy of needs, one level at a time.

Maslow put the following important propositions about human behaviour:

1. Man is a wanting being – Maslow says that man is a wanting animal and his needs are
never fully satisfied. “He always wants and wants more. But what he wants depends upon
what he already has”. His needs contin­ue to emerge from birth to death. Although his
partic-ular need may be satisfied, needs in general cannot be.
2. A hierarchy of needs – Human needs differ in impor-tance and can, therefore, be
arranged in a series of levels—a hierarchy or pyramid. Some needs are more important than
the others.
3. Emergence of needs – An individual’s needs at a particular level on the hierarchy emerge
only when the lower-level needs are reasonably well-satisfied.
4. Progression of needs – Maslow says that once a per-son has moved from a lower level of
needs to a higher level, the lower-level needs assume a less important role. According to
Maslow progression of needs means “as a man moves up the ladder (pyramid of needs),
personal wants and goals increase in number and variety.”
5. Deprivation and domination – Needs do not have to be 100 percent satisfied, before
higher needs emerge. They only have to be satisfied enough, “satisfied”. People accept a
sufficient, not necessarily a maximum or optimum, level of satisfaction. Hence, needs may
become temporarily dominant again as a result or deprivation. According to Maslow, only
needs that have not been satisfied exert any considerable force on what a man does.
6. Gratification and activation – Maslow says that only unsatisfied needs motivate behaviour.
A satisfied need is not a motivator of behaviour. Also, as soon as the needs of one level are
satisfied, the needs of higher level are emerged and become active demanding
gratification. Once a certain need is satisfied, it ceases to be a motivating factor.
7. Physiological needs are the highest priority – At the lowest level of the hierarchy and at the
starting point for motivation are physiological needs. These are the needs that must be
satisfied on priority basis, because they are very essential to maintain life. These are more
finite than the higher-level needs (ego, esteem or social needs.
8. Self-fulfilment can never be achieved – At the apex of the hierarchy is the need for self-
actualization, which is very difficult to satisfy. These are the individual’s needs for realizing
one’s own potentialities, for self- fulfillment, for self-development.
Categories of Needs:
Maslow hypothesized that within every human being there exists a hierarchy of needs. He
says that a man’s motivations occur in terms of a predetermined order of needs.
He described five classes of needs as under:
1. Physiological Needs:
At the bottom of the hierar-chy are needs based on physical drives. These include the needs
for food, water, sleep, and sex. Fulfillment of these lowest-level needs enables the man to
survive. Nothing else becomes more impor-tant until these needs are satisfied. As Maslow has
said, “It is quite true that man lives by bread alone—when there is no bread.”

These needs have few common features:

(a) They are relatively independent of each other.
(b) They can be identified with a specific location in the body.
(c) In rich societies, these are unusual motivators.
(d) They are satisfied repeatedly within short time periods.
2. Safety Needs:
Once the physiological needs are rea-sonably satisfied, safety needs become significant.
These needs consist of physical safety against fire, accident, murder, criminal assault or any
other dan-ger. Maslow also stressed emotional safety. It is a need for security against fear,
tensions, frustrations, favourtism, unemployment, etc.
3. Social or Love Needs:
These needs relate to social processes, relationships or belongingness. Man is a social being.
He wants love, affection, friendship, and association with social groups. These are the needs
for human relations. When persons physiological and safety needs are satisfied, social needs
become impor-tant motivators of behaviour.
4. Esteem Needs:
Next in Maslow’s hierarchy are es­teem or ego needs. These are of two types- (a) self-
esteem needs, and (b) esteem for others. Self-esteem implies needs for self-respect, self-
confidence, achieve-ment, competence, independence and freedom and feeling of
personal worth. Esteem for others refers to need for status, power, prestige, recognition,
awards etc. These needs can be satisfied through promotions, praise, job positions etc.
5. Self-Actualization Needs:
The highest level of Maslow’s hierarchy involves self-realization needs. These reflect our
desires to realize our full potential. It is the need “to become more and more what one is, to
become everything that one is capable of becoming.” It is related to self-concept. It gives
self-fulfillment. It requires continuous self-development. It is rarely fulfilled.
After describing these five classes, Maslow separated these five needs into higher and lower
levels. Physiological and safety needs were described as lower-order needs, and social,
esteem, and self-actualization needs were called as higher-order needs. This difference was
made to emphasize that the higher-order needs are satisfied inter-nally, whereas lower-order
needs are mainly satisfied externally.
According to this theory, people attempt to satisfy their physiological needs first. Until these
needs are not satisfied, they dominate behaviour. When physiological needs are reasonably
well-satisfied, the next category of safety needs become active and dominant demanding
satisfaction. This process continues up to the top rung of the ladder of human needs. These
needs are interdepen-dent and overlapping.
Maslow says that a higher-order need arises only when a lower-level need is completely
satisfied. Only unsatisfied needs motivate behaviour. A man gets motivation only when he is
deprived of or threatened with deprivation of some need. A satisfied need ceases to be a
motivator.

Importance of Motivation

Motivation is a very important for an organization because of the following benefits it

provides:

1.Puts human resources into action

Every concern requires physical, financial and human resources to accomplish the goals. It is
through motivation that the human resources can be utilized by making full use of it. This can
be done by building willingness in employees to work. This will help the enterprise in securing
best possible utilization of resources.
2.Improves level of efficiency of employees

The level of a subordinate or a employee does not only depend upon his qualifications and
abilities. For getting best of his work performance, the gap between ability and willingness
has to be filled which helps in improving the level of performance of subordinates. This will
result into-

a) Increase in productivity,
b) Reducing cost of operations, and
c) Improving overall efficiency.

3.Leads to achievement of organizational goals

The goals of an enterprise can be achieved only when the following factors take place:

a) There is best possible utilization of resources,

b) There is a co-operative work environment,
c) The employees are goal-directed and they act in a purposive manner,
d) Goals can be achieved if co-ordination and co-operation takes place simultaneously
which can be effectively done through motivation.

4.Builds friendly relationship

Motivation is an important factor which brings employees satisfaction. This can be done by
keeping into mind and framing an incentive plan for the benefit of the employees. This could
initiate the following things:

a) Monetary and non-monetary incentives,

b) Promotion opportunities for employees,
c) Disincentives for inefficient employees.
In order to build a cordial, friendly atmosphere in a concern, the above steps should be
taken by a manager. This would help in:

i. Effective co-operation which brings stability,

ii. Industrial dispute and unrest in employees will reduce,
iii. The employees will be adaptable to the changes and there will be no resistance to
the change,
iv. This will help in providing a smooth and sound concern in which individual interests will
coincide with the organizational interests,
v. This will result in profit maximization through increased productivity.

5.Leads to stability of work force

Stability of workforce is very important from the point of view of reputation and goodwill of a
concern. The employees can remain loyal to the enterprise only when they have a feeling of
participation in the management. The skills and efficiency of employees will always be of
advantage to employees as well as employees. This will lead to a good public image in the
market which will attract competent and qualified people into a concern. As it is said, “Old is
gold” which suffices with the role of motivation here, the older the people, more the
experience and their adjustment into a concern which can be of benefit to the enterprise.

Activities

Rubrics:
Content -4
(interpretation of the scenario, specific supporting text references)
Clarity of writing -2
Organization -2
Presentation Quality -2
10

Activity 1: Case Study Analysis

Case 1
Situation: The Hawkins Supply company is currently faced with an inventory rotation problem.
This difficulty stems from the fact that some supplies must be used prior to a stated expiration
date. Upon receipt, a new shipment of these perishable items must be stacked beneath the
boxes that are currently in inventory. A substantial amount of time is consumed in restacking
the items according to their expiration dates.

Question: The company would like to reduce the double and sometimes triple handling of
items. How can this goal be achieved? Are there alternative solutions which might also be
effective?
Ans:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________

Case 2
Situation: The JAW Bottling company has recently introduced a new beer to the market
called HEAVY. It is extra high in calories. It has been developed specifically for those people
that enjoy feeling full after only one beer. The materials handling supervisors at JAW Bottling
have been receiving complaints from lift truck drivers that cases of the new HEAVY beer are
slipping off pallets during intra-plant movement and truck deliveries. Thus far the JAW
engineering department has tried to eliminate or reduce case slippage through the use of
the following methods:
1. Top case clamp on the fork truck.
2. Strapping cases to pallet.
3. Plastic wrapper around cases.
4. The use of a large size pallet with a retainer strip nailed along
the edges.

Question: Using a method other than those described above, can the case slippage
problem be solved?

Ans:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
______________________________________________.

Case 3
Situation: Field, Bell and Weiss, a consulting firm, has been engaged by the Fizzle Beverage
Company to determine possible methods for expanding their warehouse facilities. The
current warehouse has 16' ceilings with a possible 10' clear stacking height. At the 10' level
the obstructions are steam pipes, lighting fixtures and air ducts. Fizzle Beverage currently
receives all pallets by truck. Each pallet load is 6' high (including the pallet). In order to take
full advantage of all available height the second level pallet in each stack must be broken
down.
Question: How could Fizzle increase storage capacity?
Ans:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
_________________________________________________________________________________________
 UNIT IV: AREAS OF MANAGEMENT

MODULE 1: STRATEGIC MANAGEMENT

Introduction

This module launches your study of strategies by providing a brief conceptual

definition of strategic management, a discussion of the importance of studying of the said
topics. This module discussed the importance of strategic management, the strategic
management process, and including the business ethics.

Intended Learning Outcomes

After reading and studying this chapter, you should be able to:

1. Define strategic management

2. Importance of strategies in management
3. Describe the strategic management process
4. The central idea of supply chain management

Rationale
✓ It helps students and readers how important strategies in a certain company or
organization. The good process where it helps to develop their good management
system.

Discussion
1.1 The Importance of Strategic Management
Managers at all level must continue focusing their effort on the short term and
long-term goals of the organization. Most often the top management is responsible in
developing a strategic plan, but some firms strategically involve middle and lower level
managers to create an integrative plan. Managers need to identify and examine the
elements which can create value to the firm to form a strategy that may outperform other
firms. The word strategy can be defined as an outline of the basic steps that management
plans to take achieve an objective or a set of objectives. (Ghillyer, 2009) Strategic
management serve as a direction in determining on how a firm should compete strategically
which involves the planning and decision making.

1.1.2 STRATEGIC MANAGEMENT PROCESS

STEP 1: IDENTIFY ORGANIZATIONAL MISSION, GOALS & OBJECTIVES

Defining an organization’s mission is important. The mission states the purpose
of the organization and the scope of operations including the customers or products the
organization intends to serve and provide. In identifying the goals should describe the
outcome organizations wants to achieve over a period of time. The next task will be to set
long range and short-range objectives. Objectives should be specific and it should have a
clear connection to the mission of the organization and it also must have well defined time
frame.

STEP 2: ANALYZE INTERNAL AND EXTERNAL ENVIRONMENT

Analyzing both internal and external environment is critical because this will
provide important information internal analysis that focuses on the strength and weakness of
the organization. The analysis includes the resources (tangible and intangible) and the core
competencies that give an edge over other organizations. External analysis is done through
the examination of the general environment. SWOT Analysis is a framework used for
examining organizational strength, weakness, opportunities and threats. It is a tool that helps
managers in analyzing the firm’s condition.
 RESOURCES ARE RARE

CORE
COMPETENCE

RESOURCES ARE RESOURCES ARE

VALUABLE INIMITABLE

Figure 1

GENERAL ENVIRONMENT
Factors external to an industry and usually beyond a firm’s control that affect a
firm’s strategy. The general environment includes six segments, the demographic, socio-
cultural, political and legal, economic and global (Dess, Lumpkin, & Eisner, 2010). The effects
of these factors may create opportunities of threats that directly or indirectly present
challenges to the organization that is beyond the control of the manager.

COMPETITIVE ENVIRONMENT
The immediate environment surrounding a firm includes rivals, suppliers, customers
(buyers), new entrants and substitute products. Michael Porter Five forces model of Industry
Competition is most common tool in examining the competitive environment, using this tool
manager can select the appropriate strategy to pursue.

THREAT OF
NEW
ENTRANTS

BARGAINING BARGAINING
POWER OF RIVALRY POWER OF
SUPPLIERS BUYERS

THREAT OF
SUBSTITUTE
PRODUCTS

Figure 2: Porter’s Five Forces Model of Industry Competition

SPEP 3: STRATEGY FORMULATION
After analyzing the environment (internal and external) and assessing the strength,
weaknesses, opportunities and threats the next step is formulating a strategic plan it include
there are three levels of organizational strategies this are: corporate-level strategy, business-
level strategy and functional-level strategy.

2.1 LEVELS OF ORGANIZATIONAL STRATEGIES

1. Corporate Level Strategy
It is concerned with the direction of the organization. It involves making decisions
on what business should the firm be in and wants to be in. firm’s may diversify in expanding
their operations but should still be based on the mission of the organization.

THREE BASIC CORPORATE STRATEGIES

1. GROWTH STRATEGY
In the growth strategy, the organization wants to create new opportunities by
expanding their operations. This will be achieved by introducing new products or
increasing the number of markets that the organization is serving. The organization
may invest or acquire additional business units enable for this to be a reality. Under this
concept organization can grow in several ways:
➢ Concentration – this is the strategy where business expands its business by
increasing the production capacity or sales and operates on single business and
industry.
➢ Diversification – this is the process of expanding its operation or new businesses
through merging or acquiring either with related or unrelated industries.
➢ Vertical Integration – this is the acquisition or development of new businesses
that produce parts or components of the organization products.
2. Stability Strategy
This is a strategy focus on maintaining the organization’s current business
operation. Managers use this strategy when they are not willing to take risky decision
for the organization. They want to maintain present condition of the business.
3. Retrenchment Strategy
This is a strategy that an organization use when they wants to reduce the scope of
their operations by eliminating products or business units.

2. Business Level Strategy

This strategy deals on how an organization will compete in a particular industry. In
large organizations, each business will have its own strategy in building and strengthening its
position in the market. The success of the organization in overcoming the threats stated in
the five forces competitive environment depends on the strategies they will use to gain
competitive advantage.

THREE GENERIC STRATEGIES

1. Overall Cost Leadership Strategy

This is a business level strategy designed to build and deliver product or service for
a lower cost. Overall Cost Leadership is accomplished through taking advantage of
economies scale and efficiency in production and distribution. The objective is to
achieve higher profits while keeping the cost low to attract customers.
2. Differentiation Strategy
This is the business level strategy designed to create differences in product or
service offering. Differences can come from high-quality, positive brand image,
superior customer service, technology capability, innovative design and features.
3. Focus Strategy
This is a business level strategy designed to concentrate its resources to a well-
defined segment. Organizations used this strategy because they aim to serve narrow
or a very specific segment rather than serving the broad market.
 STRATEGIC BUSINESS UNIT (SBU)
Managing multi-business organization involves assessing the attractiveness of its
various Strategic Business Unit. Strategic Business Unit (SBU) is a distinct business that has its
own set of competitors and can be managed reasonably independently of other businesses.
BOSTON CONSULTING GROUP (BCG) MATRIX
A popular portfolio planning method was developed by Boston Consulting Group
(BCG) known as the BCG Matrix. With limited resources of the organization, this method will
guide strategic managers in terms of making decision in the allocation of the resources of
the firm. The BCG Matrix is used to analyze and evaluate business opportunities in terms of its
market growth rate and market share.

HIGH LOW

HIGH
STARS QUESTION MARK G
R
O
W
T
H

R
A
LOW T
CASH COWS DOGS
E

MARKET SHARE
Figure 3: BCG Matrix

✓ STAR – (high growth rate, high market share) fast growing market they need additional
investment to maintain their position and to finance rapid growth.
✓ CASH COW – (low growth rate, high market share) generate large amount of cash,
good source of cash to support other SBUs, they need little investment because of slow
growth industry.
✓ QUESTION MARK – (high growth rate, low market share) requires substantial investment
to improve position because it’s in a attractive industry but very risky due to small share
in the market.
✓ DOG – (low growth rate, low market share) business in declining industry and in a weak
position because do not produce much profit.

3.Functional Level Strategy

The third level strategy that managers use deals with different functional areas of
the business to support the organization’s business strategy. It also guides the use of
resources. The major business functional areas include marketing, production, research and
development, human resource and finance.
STEP 4: IMPLEMENT STRATEGIES
After formulating a strategy, it must be put into actions. Strategy implementation
means executing the strategic plan. Implementation includes the creation of teams,
adapting new technologies, focusing on process rather than the functions, facilitating
communications, offering incentives and making structural changes.
STEP 5: EVALUATION & CONTROL
Managers need to establish the criteria in evaluating the results. The evaluation is
done to determine if objectives and goals are met, if the strategy is consistent with the
mission of the organization, is the strategy chosen is effective and what adjustments are
needed to be done. Managers must also develop a control system to measure if the
strategies were implemented properly and if necessary, take a corrective action when
discrepancies exist.
MANAGEMENT INFORMATION SYSTEM (MIS)
Management Information System or also known as MIS is designed to be used by
the managers to provide them valuable information needed in making decisions for the
organization. In large organizations, a senior executive is responsible in managing the
information, this position is commonly known as Chief Information Officer (CIO). The role of
the corporate CIO is central in the making of strategic decision and in managing
competitiveness in a challenging environment (Schermerhorn, 1999).
HUMAN RESOURCE MANAGEMENT
Human Resource Management plays a very important role in the organization
success. An organization needs to recruit the best qualified people and train them to
maximize their full potential. An organization needs to keep or retain these valuable assets by
providing them incentives.
Human capital is a intangible resource of a firm. Almost all businesses consider this
asset as one of the most important assets of an organization because this can be a great
source of competitive advantages most especially when:

1. It creates value to customers by providing a superb customer service satisfaction.

2. It is difficult to initiate due to the unique culture embedded to the employees.
3. It is rare because of the skills, abilities, experiences and knowledge of the people
which competitors does not possess.

The three (3) major activities of human resources management is to attract, develop and
retain talented people in the organization.

ATTRACTING WORKFORCE
Attracting talented people is the first major activities of human resource management in this
stage companies tend to create a pull strategy in getting the attention of qualified talented
individuals (applicants) to join the organization this is commonly known as recruitment.

1. Internal and External Recruitment

1.1 Internal Recruitment – Involves notifying employees in the organization, through job
posting in the organization, to submit and apply for the open position in the company.
1.2 External Recruitment - involves hiring job candidates or applicants outside the
organization which brings new workforce and can be source of new ideas. Sources of
external recruitment is through newspaper, internet, employment agencies, walk-in
and job fair.

2. The Recruitment Process

The next process is the selection of the most qualified candidates to be hired. Most
company usually follow the five (5) steps in selection process.
2.1 Application forms – job applicants are required to fill out an application form or they
will be required to submit personal resume. This document is very important because it
indicate here the personal profile, skills, accomplishments and other special
qualifications of the job applicant.
 2.2 Interview – this is the most popular selection tool. All job applicants undergo this stage.
Interviews can be structured and unstructured.
a. Structured interview is a selection technique that involves asking all applicants the
same questions and comparing their responses to a standardized set of answers.
b. Unstructured interview is the other way around where in interviewer asks different
interviewees.
2.3 Testing – Job applicants will be required to take a written test to measure their
intelligence, personality, behavioral, and/or aptitude. This can also be a good source
of information in measuring the ability of the job applicants.
2.4 Reference and Background Check – this stage is the information given by the
applicants. Reference check are inquiries to previous employers, academic advisors,
coworkers and acquaintances regarding the qualification, experience and past work
records of a job applicant.
2.5 Physical Examination this stage is where the organization mandates the job applicant
to undergo a physical examination to make sure that he or she is physically fit to the
job before the company hire him or her. This is also important most especially if the
nature of the work is related to health and fitness.

DEVELOPING WORKFORCE

I. Orientation – a process of introducing and familiarizing new employees to his her

new job, co-workers, company policies, history, rules, procedures, culture and
the nature of his her work.
II. Training and Development – a method of learning and improving employees basic
skills and abilities. This is provided by the company to assist the new or old
employees in his or her new job. There are two kinds of training:
a. On-the-job training – The former is the oldest form of training in which the
acquisition of learning takes place in the work place. This sample method
includes job rotation, apprenticeship, coaching and mentoring.
b. Off-the-job Training – The latter is the type of training done outside the
working place. It is often utilize the classroom lectures, simulation exercises
and case studies.
III. Performance Management System
It aims to improve, evaluate and motivate employees. Performance appraisal is
a method in which it measures individual or group’s performance against the
established standard work behavior.

RETAINING WORKFORCE
Companies must be able to retain qualified employees to the organization.
Especially when their contribution brought positive change or success to the company.
These employees should be nurtured and managed properly.
 MODULE 2: ENTREPRENEURSHIP
Discussion
ENTREPRENEURSHIP
It is the process of establishing a new organization with a purpose of pursuing an
opportunity through value creation. In every opportunity there is a risk involved and the
person who is willing to undertake this vital stage is known as an entrepreneur. We can
define an entrepreneur as someone who is ready to take action by initiating new ideas or
methods with a high degree of energy and confidence making use of his/her creativity and
expertise in starting a new venture.
CHARACTERISTICS OF ENTREPRENEURSHIP

• Risk taker- or gambler

• Possess high degree of confidence
• Motivated
• Believe in their ability to overcome challenges
• Have a high need of achievement
• Hard-working and persistent
• Willing to give extraordinary effort

IMPORTANT TERMS IN ENTREPRENEURSHIP

1. Small Business- business having fewer than 100 employees which is operated and
independently owned with a little impact on its industry and have a high failure rate.
2. Intrapreneurs – an entrepreneurial behavior of people inside the organization is the
creating of new enterprise inside the firm using the resources of the company.
3. Entrepreneurial Strategy – a strategy that enables a skilled and dedicated
entrepreneur, with a viable opportunity and access to sufficient resources, to
successfully launch a new venture Skunk Works – a group of people who work
together in a large organization to produce innovative product.
4. Entrepreneurial venture – organizations that are pursuing opportunities are
characterized by innovative practices and have growth and profitability as their main
goals.
5. Business Plan- it is a written document that summarizes a business opportunity and
defines and articulates how the identified opportunity is to be seized and exploited by
an organization.
6. Franchising- an entrepreneurial alliance between the franchisor (an innovator who has
created at least one successful store who wants to grow) and a franchisee (a partner
who manages a new store of the same type in new location).
7. Family Businesses – a privately held firm where the control remains within a family.
8. First Mover Strategy- the competitive advantage gained by the firm or organization by
being the first to introduce or develop a new process or product.

BUSINESS ETHICS
Business is the process of satisfying the needs and wants of others in which other people is
willing to provide it for the purpose of earning a profit. Ethics can be defined as a
philosophical science that studies the morality of human act. As a science, ethics is
concerned with the analysis of the nature of the human conduct from the point of view of
morality.
OPERATION MANAGEMENT
It is an area of management deals in managing the process in producing goods and
services efficiently and effectively. It involves transforming inputs into outputs or better known
as I-P-O (input-process-output). There are two (2) types of operation: the service operations
and manufacturing operation.
OPERATIONS MANAGEMENT PROCESS (IMPORTANCE OF OPERATIONS MANAGEMENT)
Operations Management is the heart of many businesses. The success of every business is
based on how effectively and efficiently they were able to manage their resources. Some
companies also strive in creating a flexible system in producing a product or services to
satisfy and meet the changing demands of customer. These demands can be in a form of
price, quality, quantity or volume, delivery, innovation and system flexibility. All areas of the
organization should function according to their specific role and should be able to establish
a good relationship with other areas.

TYPES OF OPERATION SYSTEMS

SMALL BATCH
PRODUCTION
FLEXIBLE
PRODUCTION
LARGE BATCH
PRODUCTION

Figure 1

Small Batch Production is often performed by small business organizations that produce a
small quantity of finished products. The one great advantage of small batch production is
the systems are more flexible.
Large Batch Production also known as mass production, is a type of system of operations
that organizations use specialized machines in its operation to produces large quantities of
standardized products. One of this advantage of this system is that workers follow a standard
operating procedure (SOP). This helps in making the operation very efficient and easy to
control.
Flexible Production to attain a flexible production, a more complicated sequence of
operation is needed to make a wide variety of customized products. The key is the use of
computer integrated manufacturing that eliminates the need to physically retool machines
to produce different or customized products.
Total Quality Management
Total Quality Management can be defined as managing the entire organization to
ensure that it excels on all dimensions of products and services that are important to the
customer. This process is committed in the continuous improvement to minimize the costs
and increases the quality of the product. Quality can be defined in many ways, but one
characteristics of a quality is that it is free from defect.
Six Sigma refers to the method of eliminating defects which is popularized by
Motorola during 1980s. is established a goal of no more than 3.4 defect per million units this
may improve customer satisfaction.

Inventory Management
Organizations need to manage its inventory. This contributes to the success of the
business. Inventory is a store of goods that is held by the organization. One of the main
reasons why organizations store goods is the anticipation of the customer demand and also
to take advantage of the quantity discounts.

Supply Chain Management the central idea of supply chain management is to apply a total
system approach to managing the flow of information, materials, and services from raw
material suppliers through factories and warehouses to the end customer. In managing the
supply chain, forecasting is essential because it is a tool used in making future projection on
the demand and supply. It is essential to forecast the demand to know if there are enough
supplies in the market.

Activities
Activity 1: Discussion Questions

1. How these several areas of management shape an entity?

2. What are the three basic corporate strategies?
3. How does a company develop their workforce?
 4. What are the different types of operating systems?

Activity 2: Exercise 1” Areas of Management”

Direction: Answer the question thoroughly.

1. Assuming having your own business, describe its overview by applying the different
areas of management.

MODULE 3: BUSINESS ORGANIZATION

Introduction

Business organizations are playing a huge part in the economy. Their main goal is to
attract customers and earn profit. Businesses provide for the needs, wants and demands of
the economy. Businesses have an important partnership with a government since the
business sector is also the largest contributor of revenue to an economy. Other than
providing the needs of the economy, the business sector also provides investments,
employment and social responsibility to an economy. In return the economy provides the
necessary factors of production to business (Marcelino, et al, 2010)
In management, creating a business organization is an essential part in setting up a
new business. In creating a business, the owner shall need to assess what type of
organization they want to have, how many partners he will have and the liability of the
organization (tax structure and record keeping).
This module will discuss the meaning, basic information, pros and cons on the type of
businesses in the Philippines – Sole Proprietorship, Partnership, Corporation, and Cooperative.

Intended Learning Outcomes

After reading and studying this chapter, you should be able to:
1. Defining Single Proprietorship
2. Identifying the Advantages and Disadvantages of Single Proprietorship
3. Defining Partnership
4. Identifying the Advantages and Disadvantages of Partnership
5. Defining Corporation
6. Identifying the Advantages and Disadvantages of Corporation
7. Defining Cooperatives
8. Identifying the difference between Corporation and Cooperatives.
Rationale
• It helps students and readers how important to know the basic information regarding
to business enterprises.

Discussion
Forms of Business Enterprises
1. Single or Sole Proprietorship
Single or Sole proprietorship is a form of business owned by single person. The owner is
known as the proprietor. It is the type of business where one person can organize it, it is
the easiest type business to set up. Most of the country’s businesses (including those
 which are not registered) falls under the single proprietorship. The bulk of self-
employed professionals are single proprietors.
Business Start-up for a Sole Proprietorship (Mejorada,1999)
• Register the business name with Department of Trade and Industry (DTI)
• Pay the municipal licenses to the local government such as the Business Permit
• Apply for VAT or non-Vat number with the Bureau of Internal Revenue (BIR)
• Register with the BIR the books of accounts (simplified bookkeeping records or journals
and ledger0 and the business forms to be used (sales invoices, official receipts, etc.)
Positive Side of Sole Proprietorship
The following are the advantages of sole proprietorship:
• It easy to organize
• The sole proprietor is the boss.
• Financial operations are not complicated
• The owner/proprietor acquires all the profits.

Negative Side of Sole Proprietorship

The following are the disadvantages of sole proprietorship business:
• Limited ability to raise capital
• The sole proprietor has unlimited liability
• Limited ability to expand
• Business is entirely a responsibility of the owner

2. Partnership
Partnership is a type of business organization that is an association of at least two or
more persons who agree to place money, property or industry in a common fund with
the aim of sharing the profits among themselves. A partnership agreement can be oral
or written agreement when property is involved, or when a limited partnership is being
established.
Business start-up for a Partnership
• Register the business name with the Department of Trade and Industry (DTI)
• Have the partnership agreement (Articles of Co-partnership) notarized and registered
with the Securities and Exchange Commission (SEC)
• Obtain a tax identification number for the partnership from the Bureau of Internal
Revenue (BIR)
• Obtain pertinent municipal licenses from the local government such as the Business
Permit
• Obtain the VAT or non-Vat number from the BIR
• Register books of accounts
Contents of Articles of Co-partnership
The following are the contents of the Articles of Co-partnership
• Name of the partnership
• Names of the partners
• Place of business
• Effective date of the partnership
• Nature of business
• Investment of each partner and corresponding capital credit
• Duration of the contract
• Rights, powers, and duties of the partners
• Accounting period
• Manner of dividing profit and losses
• Liabilities of the partners for partnership debts
• Compensation for services offered by partners.
• Treatment of partner’s additional investments and withdrawals
• Procedures for settlement of partners interest upon dissolution of partnership
• Provisions for settlement disputes
Types of Partners
 Partners can be classified in two different categories depending on their
contribution and the liability of the partnership debts.
1. Based on their contribution
• A capitalist partner is one that provides assets, such as money and property, to
be utilized as the starting capital of the business.
• An industrial partner is one that swears to give services or labor to the operation
of the business. He is usually “hands-on” partner in business, and he is involved in
various aspects in its inspiration.
• A capitalist-industrial partner is one that pledges money and property as the
starting capital of the business

2. Based on their liability for partnership debts

• A general partner is one who is liable for partnership problems, particularly the debts of
the business. His liability for business debts extends to his personal property after
partnership assets are exhausted.
• A limited partner is one whose liability for partnership problems (for instance in debts)

Positive Sides of a Partnership

The following are the advantages of partnership business:
• Easy to form
• Flexibility of operations
• Efficiency in operations
• Partners are expected to have great interest in the operation of the partnership.
• Possibility of bigger resources.
Negative Side of Partnership
The following are the disadvantages of partnership business:
• Partnership have unlimited liability for partnership debts.
• It has a limited life, or it lacks stability. Partnership is unstable.
• Limited ability to raise capital.
• Conflicts and quarrels between/among partners.

3. Corporation
“As a corporation is an artificial being created by operation of law having the right of
succession and the powers, attributes and properties expressly authorized by law or
incident to its existence.”
A corporation is a form of business organization in which the owners share in the assets
of the corporation upon the dissolution, and a share in its profits corresponding to
the amount of shares of stock which they own.
Business Start-up for a Corporation
• Verification of corporate name with SEC
• Drafting and execution of the Articles of Incorporation
• Deposit of cash received for subscribed shares of stocks in a banking institution in the
name of the temporary treasurer, in trust for and to the credit of the corporation.
• Finding of the articles of incorporation together with the following:
• Treasurer’s affidavit
• Statement of assets and liabilities of the proposed corporation
• Authority to verify bank deposits
• Certificate of deposit of cash paid for subscription.
• Personal information sheet of the incorporators.
• Commitment to change corporate name if it is found similar to another
corporate name;
• Payment of filing and publication fees;
• Issuance by SEC of the certificate of incorporation
• Registration of the corporate name with the DTI;
 • Obtaining municipal licenses from the local government such as the Business Permit
• Obtaining the VAT and Non-Vat account number from the BIR; and
• Registration with BIR of books accounts and accounting forms.
Contents of Articles of Incorporation (Section 14 of the Corporation Code)
The following are the contents of the Articles of Incorporation as provided
under Section 14 of the Corporation Code:
• Name of the corporation
• The specific purpose or purpose for which the corporation is being incorporated
• The place where the principal office of the corporation is to be located
• The term for which the corporation is to exist
• The names, nationalities and residences of the incorporators;
• The number of directors or trustees, which shall not be less than five (5) nor more than
fifteen (15);
• The names, nationalities and residences of the directors or trustees,
• If it stock corporation, the amount of its authorized capital stock in lawful money of the
Philippines, the number of shares into which it is divided. Together with its values on par.
• If it is non-stock corporation, the amount of its capital, the names, nationalities and
residences of the contributors and the amount contributed by each; and
• Such other matters are not inconsistent with law and which the incorporators may
deem necessary and convenient.
By-laws
As the By-laws can be defined can be defined as the rules of action for the
integral government of a corporation and for the government its officers, stockholders and
members. All corporations formed under the Corporation Code of the Philippines are
required to adopt code of by laws within one month after of its corporate charter from
Securities and Exchange Commission (SEC). By-laws shall be effective only upon issuance by
the SEC of a certification that the by-laws are not inconsistent with the provisions of the
Corporate Code (Mejorada, 1999).

The following are the provisions of the Corporation Code:

• The time, place and manner of calling and conducting regular or special meetings of
the directors or trustees;
• The time and manner of calling and conducting regular or special meetings of the
stockholders or members;
• The required quorum in meetings of stockholders and members and the manner of
voting therein;
• The qualification, duties and compensation of directors or trustees and the mode or
manner of giving notice thereof,
• The manner of election or appointment and the term of office of all officers other than
directors or trustees;
• In the case of stock corporations, the manner of issuing certificates;
• The penalties for violation of the by-laws; and
• Other matters that may be necessary for the proper and convenient transaction of its
corporate business and affairs.
Rights of Stockholders (Mejorada, 1999)
Stockholders of corporations have the following rights:
• Right to attend and vote in person or by proxy at stockholder’s meetings (Sec. 50)
• Right to receive dividends when declared. (Sec. 43)
• Rights to inspect corporate books and records and to receive financial report of the
corporation’s operations. (Secs. 74 and 75)
• Right to pre-emption in the issue of shares. (Sec. 39)
• Rights to elect and remove directors (Secs. 24 and 28)
• Right to approve certain corporate acts. (Secs. 49-53)
• Right to issuance of certificate of stock or other evidence of stock or other evidence of
stock ownership and be registered as shareholders. (Sec.63)
 • Right to participate in the distribution of corporate assets upon dissolution (Secs 118-
119)
• Right to adopt and amend or cancel the by-laws or adopt new by-laws (Sec. 46 and
48)
• Right to compel the calling of meeting of stockholders when fro any cause there is no
person authorized to call a meeting. (Sec.50)
• Right to enter into a voting trust agreement. (Sec.59)
• Right to recover stock unlawfully sold for delinquency. (Sec. 69)
• Right to bring individual and representative or derivative suits;
• Right to demand payment of the value of his shares and withdraw form the
corporation in certain cases. (Secs. 41 and 81)
• Rights to have the corporation voluntarily dissolved. (Sec. 118-119)

Positive Side of Corporation

The following are the advantage of a corporation business:
1. It has a legal capacity.
2. It has continued and more or less permanent existence.
3. Management is centralized
4. It has the most efficient management
5. Shareholders have limited liability
6. Shareholders freedom
7. Ability to raise more capital
Negative Side of Corporation
The following are the disadvantages of a corporation:
1. Complicated to maintain and not easy to organize
2. Government intervention
3. Subject to higher tax
4. It has limited powers
5. Abuses of corporation officials
6. Some corporation are engaged in questionable activities.
7. There is a very impersonal or formal relationship between the officers and employees
of a corporation.
There are different classifications of Corporations (Mejorada, 1999)
1. Corporation based on nature of its capital
A stock corporation is one wherein the capital is in the form of shares of stock. You
need to buy the shares to be part of the corporation. At the end, the corporation
earns profit and distributes it to the shareholders in the nature of dividends.
A non-stock corporation is a corporation which is open to all interested. There is no
dividend distributed among members, trustees or heads.
2. Corporation based on Purpose
A public corporation is owned, formed, and organized by the government.
A private corporation is owned, formed and organized by private owners or
businesses.
3. Corporation based on situs in incorporation
A parent corporation is one which has controlling interest (more than 50%) on
another corporation so that it has the power either, directly or indirectly, to elect the
majority of the directors of such other corporation.
A subsidiary corporation is the investor corporation in which the parent corporation
has controlling interest.
4. Corporation based on suits of incorporation
A domestic corporation is a corporation created under Philippines Law.
A foreign corporation is one that is formed, organized or existing under the laws of
another country.
5. Corporation based on whether they want to open in public or not
A close corporation is limited to selected persons or members of a family.
 An open corporation is open to any person who may wish to become a stockholder or
member thereof.
Voting in a Corporation
In a stock corporation, the manner of voting is called cumulative voting- where
a stockholder is entitled to cast votes equal to the number of shares he owns multiplied by
the number of directors or trustees to be elected.

In a non-stock corporation, every member may cast as many votes as there are trustees to
be elected but may not cast more than one vote for one candidate, unless cumulative
voting is authorized under the articles of incorporation.

Categories of Shares of Stocks in the Philippines

1. Common stock – is a type of stock that represents the basic issue of shares and has all
the basic rights of a share of stock so that it is often referred to as the basic ownership in a
corporation.
2. Preferred stock – a type of stock that has certain preferences over common stock. This
preferences may be in distribution of dividends and/or corporate assets, upon the
dissolution of the corporation. If dividends have been declared by the company, the
preferred stockholders are prioritized to receive it first.
3. Class A shares – these are the available stocks offered to Filipino shareholders.
4. Class B shares – these are the available stocks offered to foreign investors.
5. Per Value Shares – this refers to the shares of capital stocks that have been assigned a
definite or fixed value in the articles of incorporation, so as to fix its minimum
subscription or original issue price.
6. No par value shares – these are shares which have not been assigned a definite or
fixed value.
7. Founders shares – this shares are those classified, as such in the articles of incorporation
and may be given certain rights and privileges not enjoyed by other stockholders. It is
usually given to incorporators- the founders of the corporation.

Dividends
Dividends are also called as the distributed profits of the corporation. It represents the
corporation’s profit, which are distributed to stockholders according to the proportionate
interest of their shareholding.
Kinds of Dividends
1. Cash- this kind of dividend is paid in cash to the stockholders.
2. Property – this dividend is in the form on non-cash assets of corporation
3. Stock – this is the dividend in the form of stocks off the issuing corporation
4. Scrip – this is the dividend in the form of promissory notes indicating the kind of benefits
the stockholders shall be entitled to receive in the future (cash, non cash, stock, or some
other form of dividend)
5. Bond – this dividend is in the form of bonds of the company
6. Liquidating – the dividend refers to return of capital by a corporation.

4. Cooperatives
Under Presidential Decree No. 175, a cooperative is defined as follows:
Only organizations composed primarily small producers and consumers who
voluntarily join together to form business enterprises which they themselves own, control and
patronize.
The Cooperative Code of the Philippines was created in 1990, by virtue of Republic
Act No.6938, which serves as the current legal bases for the operation of all cooperatives in
the country.
PRINCIPLES OF COOPERATIVES
Every cooperative shall conduct its affairs in accordance with Filipino culture
and experience and the universally accepted principles of cooperation, which include the
following:
 1. Open and Voluntary Membership – voluntary and available to all individuals regardless
of their social, political, racial or religious background or beliefs.
2. Democratic control – cooperatives are democratic organizations.
3. Limited interest on Capital – the square capital shall receive a strictly limited rate of
interest.
4. Division of net Surplus – net surplus arising out of the operation of a cooperative
belongs to its members and shall be equitably distributed for cooperative development,
common services, indivisible reserve fund, and for limited interest on capital and/or
patronage refund, in the manner provided in this code and in the articles of cooperation
and by-laws.
5. Cooperative Education – all cooperatives shall make provision for the education of
their members, officers and employees and of the general public based on the principles
of cooperation.
6. Cooperation among Cooperatives – all cooperatives, in order to best serve the
interest of their members and communities, shall actively cooperative with other
cooperatives at local, national, and international levels.
Objectives of Cooperatives
The primary objective of a cooperative is to provide goods and services to
its members, and thus enable them to attain increased income and savings, investments,
productivity and purchasing power and promote among them equitable distribution of net
surplus through maximum utilization of economies of scale, cost-sharing and risk-
sharing without, however, conducting the affairs of the cooperative for eleemosynary or
charitable purposes.
Differences between a cooperative and cooperation
A cooperative is primarily a group organized to service while a cooperation’s
main purpose is to create profit. Membership in a cooperative is open and voluntary, while in
a corporation, membership is restricted. Management of a cooperative is more
democratic. It is one man one vote, with no proxy voting. In the case of a corporation, it is
one more shares, more votes. Moreover, savings or net profits are refunded to the members
of a cooperative on the basis of their individual patronage, while in a corporation; profits are
distributed to stockholders on the basis of their number of shares.

Activities
Activity 1: Discussion Questions
1. What is the best and worst possible business organization?
• Single Proprietorship
• Partnership
• Corporation
• Cooperatives
2. What business organization best suited for the Filipino entrepreneurs?
3. What are the different classifications of a corporation?
4. Why partnership is the weakest business organization?
5. What business organization will you choose in the future?

Exercise 1: Business Organization

Name:___________________________________ Score:_____________________________
Course/Section:___________________________ Date: _____________________________
Part 1: Multiple Choice
Directions: Place your answer in the space provided before each number.

________1. An association of at least two persons who agree to place their money, property
or industry in a common fund, with the aim of sharing profits, among themselves.
a. Partnership
b. Sole proprietorship
 c. Small and medium enterprises
d. None of the above
________2. A business organization in which the owners are called stockholders.
a. Partnership
b. Sole proprietorship
c. Small and medium enterprises
d. None of the above
________3. One important advantage of this business is limited.
a. Partnership
b. Sole proprietorship
c. Corporation
d. Small and medium enterprises
e. None of the job
________4. What is the main purpose off business?
a. To create customers
b. To create goods
c. To earn profit
d. To create services
e. All of the above
________5. Business creates ____ in the economy?
a. Investments
b. Employment
c. Production
d. Income
e. All of the above
________6. Which of these is not an advantage of sole-proprietorship?
a. Financial operations are not complicated
b. It is easy to organize
c. It has unlimited liability
d. The owner acquires all profits
e. None of the above
________7. Which of these disadvantages of partnership does not belong to the group?
a. Possibility of conflict and quarrels in the business
b. It has a limited life
c. It has unlimited liability
d. Net income is subject to tax whether distributed or not.
e. None of the above

________8. Which of these is not a disadvantage of sole-proprietorship?

a. It lacks stability
b. Limited ability to raise capital
c. Limited ability to expand business
d. Business is entirely a responsibility of the owner
e. None of the above
________9. Which of these advantages of corporation does not belong to the group?
a. Management is centralized
b. Most efficient management
c. It has limited liability
d. It has a legal capacity
e. None of the above
________10. Among these disadvantages of a corporation, which does not belong to the
group?
a. It is complicated and not easy to organize
b. Higher income tax rate
c. It has limited powers
d. May be subject to abuses of corporate officials
 e. None of the above
Part II: Research work
Directions: Name at least two businesses falling under each of the four business organization
types, and provide a brief background and explanation as to why you chose it?
Sole Proprietorship
1.___________________
2.___________________
Explanation:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________

Partnership
1.__________________
2.__________________
Explanation:
__________________________________________________________________________________________
__________________________________________________________________
Corporation
1._________________
2._________________
Explanation:
__________________________________________________________________________________________
__________________________________________________________________________________________
______________________________________________________
Cooperatives
1.____________________
2.____________________
Explanation:
__________________________________________________________________________________________
__________________________________________________________________________________________
______________________________________________________