IPAML REVIEWER

PLANNING PRINCIPLES OF MANAGEMENT

14. Esprit de corps - this principle explains
Planning - is the process of developing, that “in union there is strength”.
organizing, and evaluating the activities
required to achieve a desired goal TYPES OF PLANNING

PRINCIPLES OF MANAGEMENT • Strategic Planning - this ensures the

effectivity and efficiency of an organization.
1. Division of work - specialized jobs are • Long-term (5-20 years)
assigned to various departments and
position. • Operation Planning - this ensures that the
2. Authority and Responsibility - organization is prepared to effectively perform
employees should have authority for ensuring and accomplish it task and objectives.
the performance and completion of tasks • Short-term (1-5 years)
assigned to them.
3. Span of Control - refers to the limitation • Business Planning - this determines the
on the numbers of subordinates that a profitability of the specific business or
manager can effectively administer and program.
control. • Short-term (1-5 years)
4. Unity of Command - employees must
report to a single direct supervisor with whom • Resource Planning - this guarantees the
he or she is responsible. availability of resources needed to carry out
5. Unity of Direction - a group of activities its strategies to achieve the organization’s
should have one boss and one plan with the goal.
same objective. • Midterm (1-10 years)
6. Subordination of individual interest to
general interest - the interest of one • Organizational Planning - this ascertains
individual or groups of individuals should not the coordination and orderly arrangement of
outweigh the interest of the business. an organization in order to face and
7. Remuneration - there should be a fair challenges in the future.
method of payment that affords the maximum • Midterm (1-10 years)
possible satisfaction to both employees and
the employer. • Contingency Planning - this provides a
8. Centralization - this refers to the extent to fallback for the organization in case the
which authority is concentrated. original plan fails or incase of an unforeseen
9. Scalar Chain - any organization, ultimate event.
authority lies at the top and communication • Short to long-term (1-20 years)
flows downward.
10. Order - this ensures that employees are LIMITATIONS OF PLANNING
assigned and resources are allocated
properly in the organization. - Planning, to some degree, involves
11. Equity - it involves the fair and kind educated and experienced guesswork.
treatment of the employees. - Plans and predictions are only as good as
12. Stability of tenure - unnecessary labor the date and information that are given.
turnover can be the cause and effect of bad - Planning is nothing without action.
management. - The planning process should consider the
13. Simplicity - unnecessary elements that changing environment and circumstances.
could complicate plans and activities should
be eliminated from all activities.
VISION AND MISSION STRATEGY
• Strategy is the method of shaping a
VISION company’s future and involves determining
• The vision is the pharmacy's desired goal the organization’s long term direction.
how it perceives itself to be in the future.
• The vision statement should be concise but PROCESS OF STRATEGIC PLANNING
meaningful.
• The vision statement should be motivational 1. PRE-PLANNING PHASE - this can be
and should prompt people to strive for defined as the planning of the steps
something greater necessary to organize the strategic planning
• A company vision statement should inspire effort or the “planning for the planning”.
employees to create a different and better 2. PLANNING PHASE - this can be referred
future for the organization. to as strategizing, in which ideas and
• The vision of the organization serves as a suggestions are developed for the pharmacy
guide in the strategic planning process as organizations.
both the beginning point and the end point. 3. POST-PLANNING PHASE - this phase
• The vision is also used to define the mission involves three important steps:
of the organization. (a) Communication
(b) Implementations
MISSION (c) Monitoring progress once the plan is
• The mission is the pharmacy's purpose. implemented.
• The mission statement defines the company
-what it is and what it does. DECISION-MAKING
• It is a statement of the present going ahead • is the essence of management. This is the
into the near future. process of choosing a specific course of
• It is a document that creates a sense of action
purpose for the customers and the
employees. STEPS IN THE PLANNING PROCESS
• The mission statement should be concise 1. Orient the planning
and should focus on the purpose of the 2. Assess the organization
organization. 3. Set goals
• The mission statement should distinguish 4. Identify and develop strategies
the company from others that provide similar 5. Establish the objectives
goods and services 6. Define the responsibilities
• Some organizations include in the mission 7. Write, communication and discuss
statement not only what the company does 8. Monitor progress
but also how it does things-distinguishing
itself from other similar companies

OBJECTIVES AND GOALS

- the terms objective and goal are frequently
interchangeable.
- Objectives are established at the
organizational, departmental, or individual
level.
- A set goal prescribes a definite scope and
suggests direction to maximize the efforts of
the manager.
LEVELS OF PLAN PRINCIPLES OF ORGANIZATIONAL
STRUCTURE
Strategic Plan - TOP MANAGEMENT 1. Differentiation or Complexity – degree to
Organization-wide perspective which units are dissimilar. This can occur
either horizontally, vertically, or spatially.
Tactical Plan - MIDDLE MANAGEMENT 2. Formalization – degree to which jobs in
Department perspective the organization are standardized.
3. Centralization – concentration of
Operational Plan - FIRST-LEVEL decision-making power at a single point in the
MANAGEMENT organization.
Unit/Individual perspective
1. Horizontal Differentiation – describes the
DECISION-MAKING - is the essence of differences among workers or units in an
management. process of choosing a specific organization. This includes their education,
course of action from several possible type of training, and the tasks assigned to
alternatives even if it has already been them.
planned or being planned. 2. Vertical Differentiation – focuses on the
differences in hierarchical positions. Involves
SHEWHART CYCLE the “chain of command.”
- Planning cycle where there is continuous 3. Spatial Differentiation – involves location,
evaluation of management practices specifically the sites of an organization’s
units, whether they are in one place or spread
ORGANIZING across several areas.
- The word organizing comes from the word 4. Formalization – this organization
“organism” which means to create a structure emphasizes the maintenance of the structure.
with parts that are fully integrated. 5. Centralization – refers to the
concentration of decision-making
THE NATURE OF ORGANIZATION power at a single point in the organization.
- Organization refers to the process of 6. Division of Labor – this can be observed
structuring activities, in pharmacies where pharmacists are
procedures, and people within the business. assigned with specific functions such as
dispensing or caring for patients.
BASIC ELEMENTS OF ORGANIZATION 7. Parity of Authority and Responsibility –
responsibility for decisions cannot be passed
§ Designing Jobs on while the authority to make them can be
§ Grouping Jobs shared and/or given to others.
§ Establishing Reporting relationships 8. Unity of Command – this refers to the
§ Distributing authority idea that an individual employee must report
§ Coordinating activities to only one supervisor or manager.
§ Differentiating between positions - Matrix Organization – integrates the
activities of different specialists while
PRINCIPLES OF ORGANIZATIONAL maintaining specialized organizational
STRUCTURE departments.
9. Span of Control – this refers to the
number of employees a manager can
effectively control.
10. Departmentalization – this refers to the
categorization of individuals according to the
specific tasks they must perform.
ORGANIZATIONAL CHART Features of An Organizational Structure
- diagram or chart that shows the important 1. Work Specialization
aspects of the organization. 2. Chain of command
3. Authority, responsibility, and delegation
FORMAL ORGANIZATIONAL 4. Span of Management
STRUCTURES 5. Centralization and Decentralization
6. Formalization
a. Line Organization – refers to the straight
and direct line of responsibility and control 1. Work Specialization
from the top management. • Division of labor, or the degree to which
b. Line-and-staff Organization – employs organizational tasks are subdivided into
the assistance of specialists separate jobs
to compensate for the lack of needed
specialists within the line 2. Chain of Command
organization structure. • Unbroken line of authority that links all
persons in an organization
INFORMAL ORGANIZATIONAL and shows who reports to whom
STRUCTURES Two underlying principles:
a. Organization by Time – one of the a. Unity of command – means each
simplest methods of organizing a group of employee is held accountable to
employees is based on their working hours. only one supervisor; and
b. Organization by Number – this can be b. Scalar principle – refers to clearly defined
applied when a group of employees with a lines of authority in the
similar skill set of specialization organization that includes all employees.
c. Organization by Function – this structure
is applied where there is a considerable 3. Authority, Responsibility, and
diversity in jobs and skills required to Delegation
accomplish a task satisfactorily. - Authority is the formal and legitimate right
• Professional functions – prescription of the manager to make decisions, issue
dispensing, patient consultation, patient drug orders and allocate resources to achieve
record system, home health aids, and organizationally desired outcomes.
professional relations.
• Merchandising functions – purchasing, Responsibility – the duty to perform the task
inventory control, display advertising and or activity an employee or other stakeholder
personal selling, except prescription and has been assigned. This is usually
professional goods. commensurate to the authority given.
• Financial functions – general financing, • Delegation – the process managers use to
budgeting, accounting, operational analysis transfer authority and responsibility to
and control. positions below them in the hierarchy.
• Personnel functions – recruiting, selecting, • Accountability – means people with
terminating, training, employee performance authority and responsibility are subject to
evaluation, wage determination, and other reporting and justifying task outcomes to
employee relations including fringe benefits. those above them in the chain of command.

5. Centralization and Decentralization 4. Span of management

• Centralization – means that a decision
authority is located at a single point, usually • also called span of control
near the top of the organization. • number of employees who report to a
• Decentralization – means decision supervisor
authority is pushed out and downward
6. Formalization Types of Authority
• Process of creating written documentation
to direct and control employees a. Traditional – it is the right to give orders,
• Documentation includes rule books, assign tasks and jobs, and expect and exact
policies, procedures, job descriptions and obedience from subordinates.
regulations b. Behaviorist/Social scientist – it is the
belief that authority and power is given to the
Features of An Organizational Structure superior by the subordinates.
1. Work Specialization – people with similar c. Functional – assumes authority based on
skills are grouped expertise and experience
2. Chain of command – hierarchy of a person, and by one’s specialization.
3. Authority, – accountability
4. Span of control - extent of authority
5. Centralization – decision making authority
6. Formalization – all are documented

DELEGATION
- refers to the process of assigning
responsibility and authority to
lower-level employees.

Elements of Delegation

1. Responsibility – this is the task or duty

designated to a particular
individual position.
2. Authority – refers to the power or the right
to give orders.
3. Accountability – it is the condition of
being held responsible for the task delegated;
whether the task is being performed properly
or not.