Management – process of coordinating and Basic Resources

overseeing the work performance of indivs  Manpower - refers to workforce, whom

working together in organizations; covers the will help business to produce more
whole organization & present in every area in products.
the organization.  Method - the ways of producing a
particular product from raw materials.
- Art of getting things done This may refer traditional method.
through people (Mary  Materials- anything used as inputs to
Parker Follet) production of a product.
- Art if knowing what you  Machine- the devices or tools to
want to do and then seeing produce goods or to generate services.
that they do it in the best  Money - Funds involved in meeting day
and cheapest way to day business requirements.
(Frederick W. Taylor)  Market - process of allocating the
- Art of getting things done resources of the organization.
through people and with
formally organized groups Scientific Management Theory - makes use of
(Harold Koontz) the step by step, scientific methods for finding
the single best way for doing a job.
Functions of Management
Frederick Taylor (1856-1915): “Father of
1. Planning – involves determining the Scientific Management Theory”
organization’s goals, defining strategic
actions must be done, & developing Principles of Scientific Management Theory by
coordination & integration acts. Taylor:
2. Organizing – demands assigning tasks,
1. Standardization of Work - standardize
setting aside funds, & bringing
approach to optimizing work for more
harmonious relations among the indivs
efficient workforce
& teams in the org.
2. Time and Motion Studies - analyzing
3. Staffing – filling the different job
tasks and finding the fastest way of
positions in the organization’s
completing tasks
structure; factors that influence this
3. Division of Labor - workers did not have
function include; size of the org, type of
to be skilled just highly productive at
jobs, no of indivs to be recruited,
one job
internal & external pressures.
4. Scientific Selection and Training - to
4. Leading – influencing or motivating
match their abilities with requirements
subordinates to do their best
of the job; to ensure that each worker
5. Controlling – correcting the
was suited for their assigned tasks
performance of the indivs or teams to
5. Incentive System - paying workers
ensure that they are all working toward
based on their performance would lead
the previously set goals & plans of the
to increased productivity
organization.
 6. Close Supervision - to ensure they were 2. Authority - facilitates the management
following standardized procedures & to work efficiently, they have the
utilizing their time efficiently responsibility
3. Discipline - training indivs to obey the
1. Science, not the Rule of Thumb - rules and using punishments to correct
focuses on increasing the efficiency of disobedience
an organization through scientific 4. Unit of Command - clear chain of
analysis of work and not with the 'Rule command to follow, an employee
of Thumb' method. should obey from one man
2. Harmony, not Discord - the relationship 5. Unity of Direction - must have common
between the workers and management goal for effective uniformity
should be cordial and completely 6. Subordination of Individual Interest to
harmonious. General Interest – separate personal
3. Mental Revolution - Both should concerns from work
understand the value of each other and
work with full participation and 7. Remuneration of Personnel –
cooperation. employees ought to receive fair pay
4. Cooperation, not Individualism - similar corresponds to their contributions
to 'Harmony, not Discord' and believes
in mutual collaboration between 8. Centralization - people at the bottom
workers and the management. have no authority; owners make the
5. Development of Every Person to his majority of decisions
Greatest Efficiency - the effective of a 9. Scalar Chain of Authority – refers to
company also relies on the abilities and line of authority from top level to the
skills of its employees. Thus lowest level
implementing training is the scientific
approach to brush up the employee 10. Maintenance of Order – must always
skill. be organized to ensure efficiency &
productivity
General Administrative Theory - concentrates
on the managers functions and what makes up 11. Equity/Fairness – the responsibility of a
good management practice or implementation. manager that no employee face
Henri Fayol based on his actual experience as a discrimination
managing director.
12. Stability/Security of Tenure of Workers
Henri Fayol (1841-1920) and Max Weber – look forward and seek for a job that
(1841-1920): are the personalities most gives stability
commonly associated with it
13. Employee Initiative – give them a
Henri Fayol's Management Principle: chance to have a say and let them
develop
1. Division of Labor - dividing tasks and
assigning specific duties based on skills
 14. Espirit de Corps – management should 4. Process Orientation - Focuses on
strive to create unity & morale managing and improving processes
rather individual works.
Bureaucratic Theory - Focuses on the structure 5. Data-Driven Decision Making - analyze
and Functions of bureaucracies. Proposed by the data and collect data to make
Max Weber. Bureaucracy authority structure decisions for improvement.
that coordinates with others. 6. Supplier Relationships - strong
Characteristics of Bureaucracies: relationship with Suppliers to ensure
quality standards and deliver goods or
1. Division of Labor - divide to Services on time.
specialization and expertise task
according to specialization and Nature and Concepts of Management
expertise 3 Levels of Managers
2. Hierarchy of Authority - chain of
command from top level to lowest level 1. Top Level – strategic managers who
authorities. focus on long-term organizational
3. Rules and Regulations - bureaucracies concerns
operate based on a set of formalized 2. Middle Level – formulate specific
regulations. objectives and acts based on the
4. Impersonality - Set aside personal general goals; tactical plans
intentions and objectives from work. 3. Low Level – operational managers;
5. Career advancement based on merit - responsible for supervising the day-to-
Careers Promotion must base on their day acts; bridges bet management and
effort and skills. Overall, Weber non-management
believed that bureaucracies are
efficient because they eliminate Mintzberg’s Management Role Model
personal biases. 1. Interpersonal Role – providing
Total Quality Management (TQM) - Focuses in leadership to employee, acting as
quality of products and services processes of liaison bet groups, networking &
employees. as well as participation fostering relationships
 Leader, Liaison,
TQM Principles: Figurehead
2. Informational Role – gathering info
1. Customer Focus - meeting the needs
from inside & outside org, sharing info
and expectations of customers; involves
 Spokesperson, monitor,
the feedback.
disseminator
2. Continuous Improvement - analyze the
3. Decisional Role – facing an endless
problem to know what is there for
stream of decisions, some which need
improvement.
to be made on the spot
3. Total Employee Involvement - TQM
recognizes that employees are a
valuable source of ideas.
  Resource, allocator, 1. Suppliers of inputs – to reduce risk &
negotiator, uncertainty business firms prefer to
entrepreneur keep multiple suppliers of inputs.
2. Customers – the people who buy and
Managerial Skills use a firm’s product
Conceptual Skills – ability to visualize the entire 3. Marketing Intermediaries – provides an
org in relation to wider environment important link between a business firm
and its ultimate customers; play an
Human Skills – ability to work effectively w/ essential role of selling and distributing
people at all levels in the org’s internal and products to the final customers.
external 4. Competitors – different firms in an
industry compete for sale of their
Technical Skills – use of expertise to perform
products
task proficiently
5. Publics – the existence of various types
 Low level: more on technical skills of publics influences the working of
 Middle level: more on human skills business firms and compels them to be
 Top level: more on conceptual skills socially responsible

Environmental forces and Environmental External Macro-environment:

Scanning 1. Economic Environment – includes all
1. Environmental Scanning – seeking for those forces which have an economic
and sorting through data abt the impact on business. Total economic
environment environment consists of agriculture,
2. External Business Environment – industrial production, infrastructure,
factors/elements outside the and planning, basic economic,
organization which may affect, either philosophy, stages of economic
positively or negatively development, trade cycles, national
3. Internal Business Environment - income, per capital income, savings,
factors/elements inside the organization money supply, price level and
which may affect, either positively or population.
negatively 2. Political-legal Environment – are
4. Micro-environment – includes those closely related to the government;
players whose decisions and action have includes the acts of three political
a direct impact on the company institutions, namely, legislature,
5. Macro-environment – the condition that executive and judiciary; plays a useful
exist in the economy as a whole, rather role in shaping, directing, developing
than in a particular sector or region; and controlling business acts.
uncontrollable by the management 3. Technological Environment – business
makes it possible for technology to
External Micro-environment: reach the people in proper format;
implies systematic application of
 scientific or other organized knowledge However the firm may not able to change all
tasks or acts exercising considerable the factors.
influence on business.
4. Global or International Environment – 1. Value System – means the ethical
plays an important role in shaping beliefs that guide the organization in
business act. Business environment of achieving its mission and objectives.
an economy has become totally 2. Mission and Objectives – the objective
different wherein it has to bear all of all firms is assumed to be
shocks and benefits arising out of global maximization of profit. Mission is
environment defined as the overall purpose or
5. Socio-cultural Environment – reason for its existence which guides
influences the business environment and influences its business decision and
indirectly; includes people’s attitude to economic acts.
work and wealth, ethical issues, role of 3. Organization Structure – has a
family, marriage, religion and education significant influence over the decision-
6. Demographic Environment – includes making process in an organization.
the size and growth of population, life Requires that the organization structure
expectance of the people, rural-urban should be conducive for a quick
distribution of population, the decision-making.
technological skills and educational 4. Corporate Structure – decisions are
levels of labor force. All have an taken by the top level managers, the
important bearing on the functioning of middle and low level managers have no
business firms. say in business decision-making in a
7. Natural Environment- influences closed & threatening type of corporate
business in diverse ways; the ultimate culture. This leads to lack of trust and
source of many inputs such as raw confidence among subordinate.
materials and energy, which firms use 5. Quality of human resources – the
in their productive activity; includes characteristics like skill, quality,
geographical and ecological factors. capability, attitude and commitment of
8. Ecological Environment – due to the its employees could contribute to the
efforts of environmentalists and strength and weaknesses of an org.
international organizations such as the 6. Labor unions – collectively bargains
World Bank the people have now with the managers for better wages and
become conscious of the adverse better working conditions of the diff
effects of depletion of exhaustible categories of workers.
natural resources and pollution of 7. Physical resources and technological
environment by business act. capabilities – physical resources: plant
and equipment; technology capabilities:
Internal Environment – to a certain extent determine its competitive strength
controllable because the firm can change or which is an important factor for
modify these factors to improve its efficiency. determining its efficiency and unit cost
of production
Specific Components of the External Business monitor the macro-environment; Often used in
Environment – stakeholders, suppliers, collaboration with other analytical business
pressure groups, organization’s investors or tools such as SWOT analysis and Porter’s Five
owners and employees Forces to give clear understanding of a situation
and related internal & external factors.
Component of the Internal Business
Environment: - PESTEL stands for Political, Economic, Social,
Technological, Environmental and Legal
1. Resources – financial, physical, Factors
mechanical, technological, and human
resources must be subjected to internal Political: gov policy, political stability,
analysis (SWOT) corruption, tax policy, labour law

What is SWOT Analysis? Economic: economic growth, interest rates,

inflation rates, unemployment rates, exchange
- Is a technique used to determine and rates
define your STRENGTHS,
WEAKNESSES, OPPORTUNITIES, and Social: age distribution, health consciousness,
THREATS. lifestyle attitudes, cultural barriers, safety
emphasis
Strengths: Things ur company does well, Skilled
and knowledgeable staffs, Tangible assets, Technological: technological interest,
Qualities separate u from ur competitors technological change, R&D activity, technology
incentives, technological awareness
Weaknesses: Things ur company lacks,
Competitors do better than u, Resource Environmental: weather, climate,
limitations, Unclear unique selling proposition environmental policies, climate change,
pressure from NGO’s
Opportunites: media coverage of company, few
competitors, undeserved markets for specific Legal Factors: discrimination laws, health &
products, emerging needs for ur products safety laws, antitrust laws, employment laws,
copyright & patent laws
Threats: emerging competitors, negative press,
changing customer attitudes, changing Components of Environmental Scanning:
regulatory environment

Porter’s Five Forces

PESTEL Analysis

- Useful when
starting a new
business; Used to
analyse and
 1. Developing a competitive mindset – be adjustments in their strategies and
able to understand & predict the operations
various changes, opportunities and 4. Benchmarking- involves eternal
threats that may affect organizations in comparisons of a company’s practices &
the future. technologies with those of the other
2. Considering future business scenarios – companies.
consideration of both worse-case 5. Participatory planning- includes the
scenarios, as well as middle ground people who will be affected by the
possible condition, u will have an idea plans and those who will be asked to
on what to do in the future implement them in planning steps.
3. Business prediction (business
forecasting) – a method of predicting Organization Structure - is a system made up of
how variables in the environment will tasks to be accomplished, work movements
alter the future of business. from one work level to other work levels in the
system, reporting relationships, and
Benchmarking – the process of communication passageways that unite the
measuring/comparing one’s own products w/ work of different individual persons and groups.
those of the recognized industry leaders in
order to identify areas for improvement. 3 Major Types of Organization Structure

Planning - is a process that involves the setting 1. Functional Structure - an organization is

of the organization’s goals, establishing divided into smaller groups by areas of
strategies for accomplishing those goals. speciality.
2. Divisional Structure - each division
Importance of Planning: contains all the necessary resources and
functions within it to support that
- It provides direction to all of the organization’s particular product line.
human resources 3. Matrix Structure - individuals are
- Helps anticipate problems and cope with grouped by two different operational
change perspectives at the same time.

- Minimizing of waste Nature and Role of the Firm

Planning technique and tools 1. Human Resource Management - this is

the entire spectrum of management of
1. Forecasting- an attempt to predict what people that serves to maximize their
may happen in the future. performance in order to meet the
2. Contingency planning- ready for organization’s objectives.
implementation when things do not 2. Marketing Management - this is the
turn out as they should be. responsible for identifying, anticipating
3. Scenario planning- allows them to plan and satisfying consumer requirements
ahead and make necessary profitably.
 3. Operations Management - this involves responsible for manufacturing, selling
overseeing, designing, controlling the and providing services to clients.
process of production and designing
business operations 2. Staff departments- support the
4. Financial Management - to ensure the activities of the line departments by
set-up of effective and efficient internal doing research, attending to legal
process designed to achieve business matters, performing public relations
support service, lowest costs and duties etc.
effective control of the environment Departmentalization maybe done in 3
5. Material and Procure Management - it approaches:
has the responsibility to ensure that it
manages the procurement process and 1. Functional approach- where the
the supply base effectively and divisions are formed based on the
efficiently. specialized activities such as marketing,
6. Office Management - to monitor and production, financial management and
review systems that would yield human resources.
expected outcomes like improved
2. Divisional approach- where
turnover, output, sales.
departments are formed on
7. Information and Communication
management of their products,
Technology Management - the
customers or geographic areas covered.
responsibility of the firm to provide the
necessary information and 3. Matrix approach- is a hybrid form of
communication facilities to all its departmentalization where managers
business units in order to ensure that and staff personnel report to the
they are able to perform their functions superiors, the functional manager, and
more effectively and efficiently. the divisional manager.
Types of organization structures Network structure - is a collection of
independent, usually single function
Vertical structure - Clears out issues related to
organizations that work together in order to
authority rights, responsibilities, and reporting
produce a product or service.
relationships.
 Organizational chart - is a line
Horizontal structure - refers to the
drawing that shows how the parts of
departmentalization of an organization into
an organization are linked. It
smaller work units as tasks become increasingly
establishes the ff:
varied and numerous.
Formal lines of authority- the official
Departments formed are 2 types: power to act
 responsibility- the duty or
1. Line departments- deal directly with assignment
the firm’s primary goods and services ;
 accountability- the moral
responsibility
The Role of Business in the Economy together to achieve sustainable
economic growth and development.
1. Market - is a social arrangement that 3. A LA KUZNETS (GOVERNMENT VS.
allows buyers and sellers to discover ENVIRONMENT) by Simon Kuznets -
information and complete voluntary The existence of a pattern or behavior,
exchanges of goods and services. between economic growth and
2. Coordinating Trade and Commerce - environmental degradation, consistent
Commerce is an act of trading with the environmental Kuznets curve
something of economic value such as a (EKC) hypothesis.
good, service, information, or money 4. Human Capital Based - Is a measure of
between two entities. the economic value of an employee’s
- Instead of having to produce skill set.
everything that you consume on your 5. Post demographic transition •
own, you are able to trade with others Proposed in 1929 by Warren
and obtain a higher quality of life. Thompson - Is the transition from high
3. Product or Service Specialization - birth and death rate to lower birth and
businesses bring “specialized” people, death rate as the country develops
equipment, and other resources from pre-industrial to an industrialized
together and coordinate the production economic system.
of goods and services.
4. Economies of Scale - When more units Forms of Business Organization
of a good or a service can be produced
on a larger scale, yet with less cost 1. Sole Proprietorship - The owner owns
input cost, economies of scale are and manages the business, assumes all
achieved. risks, receives all profit.
5. Positive and Negative Externalities - an 2. Partnerships - association of two or
economic side effect. more persons who share ownership of a
business
Phases of Business Organization  General partnership - unlimited liability
 Limited partnership - do not participate
Economic Development - Is the process by
in the management and are liable only
which a nation improves the economic,
for what they have contributed to the
political, and social well-being of its people.
business
1. Malthusian: Thomas Robert Malthus 3. Cooperative - organized primarily for
(1766-1834) - A theory about economic the purpose of providing service to their
growth which depends on the rate of user-owners, rather than to generate
the population of a certain area. profit for investors.
2. Government -LED (Local Economic  CDA-Cooperative Development
Development) - An approach towards Authority - is a proactive and
economic development which allows responsive lead government agency for
and encourages local people to work the promotion of sustained growth and
 full development of the Philippines
cooperatives for them to become broad
4. Corporation - it is formed and operated
in accordance with laws of the state in
which it is organized.
 SEC-SECURITY EXCHANGE COMMISION
- the government agency responsible
for the registration and supervision of
all corporations and partnerships