The process of utilizing the resources of the organization in an effective and efficient manner to
attain targeted objectives
through planning, organizing, staffing, leading and controlling.
Effectiveness
Efficiency
6M’s
Manpower
Money
Machines
Materials
Method
Market
PLANNING
Is the management function concerned with defining goals for future performance and how to
attain them
a significant function of all other functions
Planning is a strategy –which is a bunch of decisions that focuses on the organizational goals to
pursue, actions to take and the managing of resources towards goal accomplishment.
Organizing
Involves assigning tasks, grouping tasks into departments, and allocating resources
Organizational structure – a formal system visualizing the task and reporting connections that
harmonize and inspire members to work together for goal and objective achievement.
-the foundation of a company; absence of this structure shall make the day -to -day operation of
the business hard and unproductive.
Staffing
Leading
Controlling
The process of continuously checking results against predetermined goals and objectives and
takes any curative actions needed to make plans stay on track.
It involves comparing actual performance to planned performance
It is valuable for guaranteeing all other functions of the organization are in place and are
operating effectively and efficiently
Involves setting up performance standards and checking the productivity of employees to make
sure every employees performance targets those standards.
Frequently directs to the detection of situation and problems that must be addressed.
The level of performance influences the accomplishment of the entire phases of the
organization
7 Advantageous Attributes
1. RULES
- serve as a norm for guiding or directing action or conduct of employees in the workplace
and provide the discipline which the organization requires to attain goals & objectives.
2. IMPERSONALITY
– provides equity and fairness for all employees by not consenting to subjective personal or
emotional reflection during evaluation procedures
3. DIVISION OF LABOR
– is the clear splitting and defining of work based on specialization and personal
experience.
4. HIERARCHICAL STRUCTURE
- categorize jobs based on the level of authority. This assist in directing employee behavior.
5. AUTHORITY STRUCTURE
– refers to who has the right to decide”
3 types of authority
Traditional Authority – founded on custom, ancestry, gender, birth order, etc.
Charismatic Authority – visible in a leader whose mission and vision in life
encourage others.
Rational-legal Authority – based on the uniform application of established laws and
rules. Obedience by subordinate is given to a superior because of a set of uniform
principles like the organization’s hierarchy.
6. COMMITMENT
- the visualization of employee and the organization as being loyal to each other over the
span of the working life of the employee.
7. RATIONALITY
– attaining the organizational goals in the most efficient way. Logical and scientific manners
of using financial and human resources
SCIENTIFIC MANAGEMENT
FREDERICK TAYLOR
Father of Scientific Management
(1856 – 1915)
“75 % science and 25 % common sense” w/emphasis in the use of systematic study
to find the “one best way” of doing a task.
Assembly lines and other mechanistic routinized activities
“scientific management means knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way”. –based on 4 principles
SPECIALIZATION as the only source of authority
MONEY as motivating factor for employees to work to their capacity
4 PRINCIPLES OF SCIENTIFIC MANAGEMENT
Develop a science for each element of work by studying, analyzing and determining the “one
best way” to do work.
Scientifically select, train, teach and develop workers to assist them achieve their full potential.
Cooperate with employees to guarantee execution of the scientific principles
Divide the work and the responsibility evenly among management and workers.
ADMINISTRATIVE MANAGEMENT
HENRY FAYOL
-5 functions of managers (planning, organizing, coordinating,
commanding, controlling).
ROBERT OWEN
-Propose legislative reforms to improve working conditions of labor
“Increased profitability for the firm and reduced hardships for workers
are the positive results of showing concern for workers”.
-Robert Owen
MARY PARKER FOLLET
1868 - 1933
-A social worker
-“management is a continuous process”
-Inclusion of workers in decision making and the dynamism of management
-Good working relations and communication is the key to a harmonious
workplace
CHESTER BARNARD
1886 - 1961
Book “ The Functions of Executives”
-establish & maintain an effective communication system
-hire & retain effective personnel
-motivate those personnel
Acceptance theory of authority
ELTON MAYO
1880 – 1948
Hawthorne studies (1924 – 1932) at Western Electric Company in
Chicago
4 Phase
Illumination experiments (1924 – 1927)
Relay Assembly room experiments (1927 – 1928)
Mass interviewing program (1928 – 1930)
Bank wiring room study (1931 – 1932)
DOUGLAS MCGREGOR
1906 – 1964
Work attitudes and behavior “Theory X and Theory Y”
ABRAHAM MASLOW
1908 – 1970
Father of Modern Management Psychology
MANAGER
An individual answerable for the performance of the group members in the
workplace.
The official authority to assign resources of the organization
First Line Manager – cater day to day operations of the organization, directly involved
w/ people who are directly responsible for producing the company’s goods and services.
(office manager, shift supervisor, department manager)
Middle Manager – responsible for looking for the best way or organizing human and
other resources to accomplish organizational objectives. (general, plant, regional and
divisional manager)
Top Manager – executives w/ cross departmental duties, responsible for the overall
direction of the organization. (CEO, COO, CFO)
Team Leader – a new kind of management job with no formal supervisory function.
Facilitates the team activities towards the achievement of the objectives.
Scanning – as a form of early warning tool that allows managers look into the future.
✘Includes external factors tjhat usually affect all or most players in every industry.
✘Either directly or indirectly influence the organization but they cannot be controlled by it.
✘Political environment – portrays the practices and dealings of government bodies that can
govern and regulate the decisions and behavior of the firms.
✘Legal environment – identifies what organization can and cannot do at particular point in
time.
Socialization – the practice by which people discover the values held by an organization
and the broader society.
ECONOMIC FACTORS
Economics – study that centers on appreciating how people or countries manufacture, dispense
and use diverse goods and services.
2 major branches of economics
Microeconomics - deals into the behavior of people and organization in particular markets.
Macroeconomics – focuses on the operation of nation’s economy as a whole.
Economic Factors - refer to the character and direction of the economic system within which
firm operates.
The impact of economic factors varies among indutsries.
Economic Factors
1. Balance of payment
2. The state of the business cycle
3. Distribution of income within the population
4. Governmental monetary and fiscal policy
5. Interest rates
6. Levels of employment
7. Consumer price index
8. Trends in GDP
9. Changes in stock market evaluation
10. Inflation rate
11. Growth in spending power
12. Rate of people in a pensionable age
13. Price stability (inflation and deflation)
14. Currency exchange rates
✘Demographic characteristics – age, gender, income, family size, ethnicity, sexual orientation,
religion and socio-economic class among others
Socio-cultural Factors
1. Change in population demographics
2. Rising educational levels
3. Enhance number of older citizens
4. Enlarge number of dual income parents
5. More number of single parents
6. More women in the workforce
7. Increase in temporary workers
8. Greater concern of wellness and fitness
9. Better concern for environment
10. Postponement of family formation
TECHNOLOGICAL FACTORS
✘Technology – the knowledge, tool and techniques used to transform inputs into outputs.
✘Changing technology
✗influence the demand for a firms products and services, its production processes and raw
materials.
✗Generate new opportunities for the firm, or pressure the survival of a product, firm or
industry
Technological Factors
1. E-commerce
2. Social media
3. Level of automation
4. Nanotechnology or the science of unimaginable small electronics
5. Convergence of personal computer and telephone technologies
6. Internet’s becoming the backbone of information-intensive industries.
7. Emergence of biotechnology as a key component of the economy
ECOLOGICAL FACTORS
✘Ecological factors – concern in environmental issues such as the natural environment, global
warming and sustainable economic growth.
✘Three bottom line (TBL) approach –(Profit, people and planet) aims to quantify the financial,
social and environmental performance of the corporation over a period of time.
Ecological Factors
1. Waste disposal
2. Energy consumption
3. Pollution monitoring
4. Weather and climate
SPECIFIC ENVIRONMENT
✘Forces and conditions unique to specific firm’s industry and directly influence the ability of
the organization’s ability to obtain inputs and dispose outputs.
✗Suppliers, distributors, customers, competitors, advocacy groups and industry regulation are
part of this environment.
✘Suppliers - individuals and companies that provide an organization with input resources
✘Distributors – business that assist other organizations to trade their goods and services
✘Customer - Individuals and groups that purchase products and services
✘Competitors – businesses in the same industry that produce and sell the same goods and
services to a specific organization’s goods and services.
✘Industry regulation – consist of policies and rules that oversee the business practices and
procedures of particular industries, businesses and professions.
THE SWOT ANALYSIS
✘Organizational Strategies – ways by which companies achieve their missions and goals
✘An evaluation of strengths and weaknesses is an audit of company’s internal capabilities for
which it has more control than outside factors.
✘Exploring opportunities and threats is a part of environmental analysis that must look outside
of the organization over which it has lesser control
✓ Implemented positive reforms that made easier to deal with construction, permits, get
credit an pay taxes.
✖Power Distance – the degree of inequality among people which the population of a country
consider normal
✖Masculinity vs. Feminity – the degree to which values like assertiveness, performance
success and competitiveness are used to guide decisions versus values like the quality of life,
warm personal relationships, service and solidarity.
✖Long-term Orientation – extent to which decisions is based on long term orientation versus
short term orientation, past versus present versus future, and punctuality.
✓ Widespread hunger
• With sophisticated infrastructure (cemented roads and ports and electrical lines to
distribute electricity all over the country.
• Primary education has almost rising literacy rates and secondary education is extensive
• Has universal basic health services
• Has remarkable money for human health and education.
• Highly developed and progressively richer
• With a broad choice of goods for sale to nearby countries.
Importance of Planning
1. Planning provides direction
2. Planning reduces risks of uncertainty
3. Planning reduces overlapping and wasteful activities
4. Planning promotes innovative ideas
5. Planning facilitates decision making
6. Planning establishes standard of controlling
SOLE PROPRIETORSHIP
• Unlimited liability
• One man control
• Single Ownership
Advantages
1. Simplicity of starting and ending the business
2. Being your personal boss
3. Delight of ownership
4. Leaving an inheritance
5. It is subject to less regulations
6. No exceptional taxes
Disadvantages
1. Indefinite liability
2. Restricted financial resources
3. Management difficulties
4. Great time commitment
5. Few fringe benefits
6. Limited growth
7. Limited life span
PARTNERSHIP
1. General Partnership – all owners share in operating the firm and in assuming liability for the
debts of the business
General partner- an owner who has unlimited liability and active in managing the business
2. Limited Partnership – has one or more general partners and one or more limited partners
who have limited liability to the extent of their investment.
Limited partner – an owner who makes investments in the business but does not actively
participate in its management and his liability for losses does not extend up to his contribution
in the business.
Limited liability Partnership – all of the partners have limited liability of the business debts and
has no general partners.
Advantages
1. Greater financial resources
2. Joint management and pooled skills and knowledge
3. Longer survival
4. No special taxes
Disadvantages
1. Unlimited liability
2. Disagreements among partners
3. Distribution of profits
4. Complexity in termination
Partnership agreement
A written legal contract between business partners. It establishes the condition of the business.
It Guards partners/shareholders in the occurrence of disagreement or closure of the business.
Agreement must be crafted with the aid of lawyer.
Key areas covered in a partnership agreement
1. Basics
2. Responsibilities, performance and remuneration
3. Contributions
4. Withdrawal of partners/ admission of new partners
5. Buy-out procedures
6. Dispute resolution
7. Financial arrangements
8. Method for dissolving the partnership
9. Valuation
CORPORATION
➢ The shareholder gain from the profit through dividend or appreciation of the stocks but
are not responsible for the company’s debts.
Advantages
1. Ability to put up money for investment
2. No difficulty of ownership change
3. Limited liability
4. Continuous life
5. No difficulty in attracting proficient employees
6. Ownership separate from management
Disadvantages
1. High initial cost
2. Double taxation
3. So much paperwork
4. Size
5. Difficulty in termination
6. Probable conflict of stockholders with board of directors
Types of Corporations
1. Business Corporation
2. Close Corporation
3. Controlled Corporation
4. Cooperative Corporation
5. Non-profit Corporation
6. Professional Corporation
7. Public Corporation
8. S Corporation
COOPERATIVES
An autonomous association of persons, organized and controlled by its members, who
voluntarily pool resources to provide themselves and their patrons with goods and services, or
other benefits.
Provides:
1. Democratic control based on one member one vote
2. Open and voluntary membership
3. Patronage dividends
Advantages
1. Economical to form
2. Active members
3. Equal voting right
4. Members can be below 18
5. No accountability on debts by members
6. Controlled by members
Disadvantages
1. Only service provisions
2. Minimum membership
3. Limited distribution of surplus
4. One vote per member
5. Involvement if required
6. Continues education