CHAPTER 3 The Management Aspect

The Management aspect deals with the implementation of the business plan to ensure the effectiveness of the business. It discusses the basic considerations in establishing the proposed business which include the key positions involved in management, the initial capitalization, the project schedule, form of ownership, job analysis, organizational structure, and the proposed compensation scheme.

Objectives of the Management Aspect In order to have a proper implementation of the different management functions, it aims the following: 1. To identify the form of ownership of the business. 2. To determine the nature of the business. 3. To establish the job descriptions and specifications of each personnel. 4. To identify the schedule of the activities of the business. 5. To determine the compensation scheme of the business. 6. To determine the organizational structure.

64
THE PRE-OPERATING PERIOD For a starting business, it is a part of its process to comply with the necessary pre-operating requirements and responsibilities before the actual business operation. Problems arise regarding establishing the business from the perfection of the contract made by the partners to the normal course of business operations. The proponents take into consideration the following as pre-operating activities: Feasibility study, capital outlay provision, plant site selection and registration of business and securing of permits and licenses, acquiring the necessary materials and machineries needed in production, and hiring and training of employees. The business will be engaged in Manufacturing of biodegradable shopping bags from corn kernels. Goals will be achieved through proper implementation of these plans. Project Originators The CAMADA Ltd. is a limited partnership operated and owned by five partners. Each partner has agreed to contribute for the initial capital. The names of the partner, their corresponding managerial and supervisory positions and their initial capital contributions are shown on the next page.

65
TABLE 3.1 Project Originator Positions and Contributions PARTNERS Daphne De Leon (General Partner; Capitalist-Industrial Partner) Kimberly Anne Ang (Limited Partner; Capitalist-Industrial Partner) Alexielle Calimlim (Limited Partner; Capitalist-Industrial Partner) Karen Mae Madronio (Limited Partner; Capitalist Partner) John Kevin Almaria (Limited Partner; Capitalist Partner) TOTAL CAPITAL POSITION General Manager CONTRIBUTIONS Php 500, 000.00

Production Supervisor

250,000.00

Marketing Officer

250,000.00

250,000.00 50,000.00 200,000 (1 Delivery Truck) Php 1,500,000.00

As shown in Table 3.1, Daphne De Leon will act as the General Manager with initial contribution of Php 500,000.00; Kimberly Anne Ang as the Production Supervisor with initial contribution of Php 250,000.00; Alexielle Calimlim as the Marketing and Sales Officer with the initial contribution of Php 250,000.00; Karen Mae Madronio and John Kevin Almaria, silent partners, holding no positions, contributing Php 250,000.00 and Php 50,000.00 with a 1 delivery truck amounting to Php 200,000.00, respectively. The total is Php 1,500,000.00.

66
Project Schedule This shows the proposed timetable of operating activities that the proponents will undertake from the moment the feasibility study is accomplished, up to the start of normal operations. The activities of the business and its interval are presented supported with the Gantt chart. 1. Conduct of Feasibility Study June 2013 - October 2013

The preparation of feasibility study period is where the study was conducted to determine the viability of the proposed product at the target market. Observations, interviews, questionnaires and canvassing were performed by the proponents. This also covers the period for the feasibility which includes collection of data through research which serves as a guide in determining the duties of the business. 2. Putting up of Equity November 2013

This period is allotted for putting up of equity in which the partners will require such amount for the organization of the proposed business. One month is enough to accumulate the equity of the partners. 3. Registration December 2013 - January 2014

A business must conform to all legal requirements for the commencement of its operation. In this period, the partners have to accomplish the requirements for the registration of the partnership. The procedures to be taken by partners upon registration of the partnership are as follows:

67
A. Secure a certificate of registration of the partnership from the SEC. The following are the process in registering in SEC (Php 2,665.00): 1. Verify and reserve the proposed partnership name. 2. Prepare the Articles of Partnership. 3. Prepare the following: (a) Written Undertaking to Change Partnership Name by any Partner; and (b) Registration Data Sheet. There are additional requirements for certain partnerships, like customs brokerages, which are

required to submit the customs broker licenses and professional tax receipts (PTR) of at least two partners. 4. File the complete documents with the SEC, upon payment of the required filing fees. B. Obtain the following permits: Barangay Clearance from Barangay Office (Php 200.00) Business Permit from Baliuag, Bulacan Municipal Hall (Php 500.00) TIN from Bureau of Internal Revenue (BIR)

C. Register the employees with the following agencies: Department of Labor and Employment Philippine Health Insurance Corporation Social Security System PAG-IBIG Fund

68
D. Secure a permit from Department of Trade and industry. E. Register the proposed product to the Department of Environment and Natural Resources. 4. Leasing of Plant Site January 2014

This period is allotted for the execution of the contract lease for the plant location and other activities essential for authorization of the partnership agreement. The targeted location of the plant is at Dona Remedios Highway, Baliuag, Bulacan. 5. Plant Renovation February 2014 - March 2014

This period is allotted for the renovation of the building to be used as the business establishment. The proponents will lease an old manufacturing site and renovate it to become the office and plant site. The plant and office site are both located at the ground floor. The office is located in front and the plant site will be at the back. The office and factory will be repainted and the broken roof to be repaired. 6. Canvassing and Acquisition of Equipment February 2014 - March 2014 This period is allotted for looking affordable but high quality equipment that will be used to produce the product. The proponents will contact and visit the supplier of the equipment. If the machines are too expensive, the proponents have agreed to buy the second hand. 7. Purchasing of Raw Materials April 2014

This period is allotted for searching suppliers offering a low price but high quality raw materials to efficiently use the capital of the partners.

69
The proponents will buy the raw materials at Angat, Bulacan and the alternative sources of raw materials are located in Luzon (Nueva Ecija, Isabella, etc.) 8. Hiring and Training of Personnel April 2014 - May 2014

During this period, the recruitment, selection, and hiring of skilled workers will take place. Each personnel should have the required skills and abilities that best suit the position in order to produce high-quality products. The personnel will be taken in to the factory by the proponents. One of the proponents will demonstrate how the equipment must be handled, and then the worker is asked to repeat whatever he has observed in the presence of the superior. It is easy for the employee to learn the details about specific equipment. Once the worker studies the first equipment thoroughly the supervisor moves on to the next equipment and so on. The other proponents will measure the performance of each personnel, which will be the basis of assigning the workplace of the personnel. 9. Start of the Normal Operation This is the period where all the aforementioned June 2014 activities have

been done. Time has arrived for the commencement of the business. The business is ready for the production of the proposed product and to meet the demands of the consumers.

70
GANTT CHART

71
THE OPERATING PERIOD The business is open eight hours a day and six days a week, to meet the demands of the consumers the business will be directly managed by the partners and each area will be supervised by the three other partners. Rules and regulations should be in place and followed to maintain the integrity of the business operations. Form of Ownership The proponents agreed to have the proposed business under the limited partnership form of business. Since there is more than one person who will share in the capital contribution and the proposed business is under manufacturing concern and also upon consideration, the other areas in selecting the form of ownership, filling it under partnership will be more convenient. The proponents have decided to adopt this form of business because of the following advantages: It is relatively easy to establish and is inexpensive to organize. There are few requirements needed in its form compared with corporation. There is a better management control since there is more than one person who will manage the business. There is good division of work.

72
Prospective employees may be attracted to the business if given the incentive to become a partner. The business usually will benefit from partners who have complementary skills. The partners will have a great interest in the business because of financial responsibility. There is less burden of taxation and filing of returns and statements than corporation. However, there are also some disadvantages with this form of business: Partners are jointly and individually liable for the actions of the other partners. Since decisions are shared, disagreements between partners may easily occur. There is limited life. It can be easily dissolved or terminated. It is difficult in transferring ownership interest.

INTERNAL ORGANIZATION Manpower Requirements/Job Analysis The manpower requirements of the proposed business consist of seven (7) persons, and are specified as follows: One (1) General Manager One (1) Production Supervisor One (1) Marketing Officer

73
Job Analysis Job Title: General Manager Job Descriptions The General Manager leads, directs and controls the day-today activities. Ensures that company goals are met in a timely fashion by efficiently resources. Responsible for activities such as employee relations and administration. Maintains professional internal and external relationships that meet company core values. Proactively establishes and maintains effective working team relationships with all support department Delegates responsibilities Hires, trains, assesses and fire staff Executes administrative responsibilities Prepares and interprets reports, budgets, accounts and financial statements. and effectively managing personnel and Six (6) Production Workers One (1) Cashier One (1) Driver/Delivery Man One (1) Security Guard

74
Manages income, cash flow and expenditure. Develops financial management mechanisms that minimize financial risk. Job Specifications Must be at least 21 years old Proven skills in business, marketing and financial

management. Proven interpersonal, verbal and written communications skills. Possesses the ability to manage and supervise a staff team. Has the ability to multi - task and work in a fast - paced office setting. Has proficient leadership, organizational and supervisory skills Has superior training and presentation skills Has skills in understanding, creating and analysing financial reports or budgets Be able to produce high level of quality service to colleagues Must have a degree in accountancy, statistics, economics or business related course Proven skills in accountancy, statistics, economics, and mathematics, management or business subjects.

75
Excellent problem-solving, analytical, technical, IT and numerical abilities. Job Title: Production Supervisor Job Descriptions Supervises the staff; organizes and monitors work flow. Enforces systems, policies, and procedures. Completes production plan by scheduling and

assigning personnel. Ensures efficiency of equipment by calling for repairs; evaluating new equipment and techniques. Creates and revises systems and procedures. Educates and directs personnel on the use of all control points, equipment, and resources; maintaining compliance with established policies and procedures. Job Specifications Must be at least 21 years old. Must have a degree in business, technical or production management. Proven skills in business, technical and production management.

76
Able to work out raw material requirements with efficient management of resources and prudent production planning. Job Title: Marketing and Sales Officer Job Descriptions Responsible for developing and maintaining marketing strategies to meet agreed company objectives. Evaluates customer research, market conditions, and competitor data and implement marketing plan alterations as needed. Oversees all marketing, advertising and promotional staff and activities. Develops an annual marketing plan in conjunction with the sales department. This should detail the years activity to meet agreed company objectives. Job Specifications Must be at least 21 years old Must have a degree in Marketing Management or business related course Experience in developing, maintaining and delivering on marketing strategies to meet company objectives. Strong understanding of customer and market dynamics and requirements.

77
Proven ability to oversee all marketing, advertising and promotional staff and activities Proven interpersonal, verbal and written communications skills. Job Title: Production Worker Job Descriptions Responsible for production work in factories. Starts, operates, tends, stops, and cleans machines. Assembles finished product. Inspects product to ensure high quality.

Job Specifications Must be a holder of a High School diploma or short course in any field. Mechanical abilities Must be physically and mentally fit

Job Title: Cashier Job Description Receive payment by cash, check, credit cards, vouchers, or automatic debits; issue receipts, refunds or credits. Job Specifications Must be at least 21 years old Must be a holder of a High School diploma or short course in any field.

78
Job Title: Driver/Delivery Man Job Descriptions Delivers needed materials and cargos to its respective destinations. Checks and list the materials/cargos before transport it to its destination Inspects and ensures that the truck is on the right track before moving. Helps load and unload delivered materials Gives and receives payments or deliver official receipts to clients Job Specifications Must be a holder of High School diploma or short course in any field. Must have an authentic drivers license issued by Land Transportation Office Must know how to drive heavy duty trucks Knowledge and ability to follow directions Must have strong built and healthy body to carry heavy loads and can stay motivated up to long hours of driving.

79
Job Title: Security Guard Job Descriptions Maintains the security and the safety of employees, visitors and equipment. Patrols industrial and commercial premises to prevent and detect signs of intrusion and ensure security of doors, windows, and gates. Monitors and authorizes entrance and departure of employees, visitors, and other. Writes reports of daily activities and irregularities. Warn persons of rule infractions or violations, and apprehend or evict violators from premises, using force when necessary. Inspects and adjusts security systems, equipment, and machinery. Job Specifications Having at least one year of experience in the police or security field. Alternatively, any similar practical experiences or formal education on the skills and knowledge in becoming a security guard will also be accepted. Must be at least 54 in height Must be 21 years old and above

80
Basic security knowledge, defense as well as inspection of fire procedures. Communication skills and writing skills. Detailed observation skill and quick response in making the right decision, following protocols. Possessing the right skill to deal courteously in the public.

GENERAL MANAGER

CASHIER

PRODUCTION SUPERVISOR

MARKETING OFFICER

(6) PRODUCTION WORKERS

DRIVER / DELIVERY MAN

SECURITY GUARD

TABLE 3.2 Organizational Chart

81
Compensation Scheme According to the National Wages and Productivity Commission of Development of Labor and Employment the minimum wage of a worker in Baliuag, Bulacan under Region III with a non-agriculture business is three hundred thirty six pesos (Php 336.00). The proponents decided to implement it to their production workers, driver/delivery man and security guard. The security guards will only work in the evening because the proponents are present in the site in the morning. The production supervisor and marketing officer will receive a salary amounting to eighteen thousand pesos (Php 18,000.00) per month and their general manager with twenty five thousand pesos (Php 25,000.00) per month. The SSS and PhilHealth contributions are based on the latest schedule of contributions issued by the government. Table 3.3 presents the basic pay of every employee with the proponents given amount of three hundred thirty six pesos (Php 336.00). The basic hours of working are one hundred ninety two (192) hours per month (8 hours per day x 6 days per week x 4 weeks per month). The employees SSS and PhilHealth contribution is based on the latest schedule of contribution including the Pag-ibig fixed amount contribution of one hundred pesos (Php100.00). Table 3.4 shows the projected annual compensation for the next five (5) years of operation which increases at a rate of 3% annually on the basis of 2013 projected compensation.