• Chapter 8

• INTRODUCTION TO THE DIFFERENT FUNCTIONAL AREAS OF MANAGEMENT

• Lesson 1
• HUMAN RESOURCES MANAGEMENT (HRM)
• Human Resources
Also known as human capital, drive the performance of organizations along with other resources; hence, understanding the
HRM functions of management is very important.
• HRM functions of management
• Conducting job analysis
• Planning labor need and recruiting
• Selecting candidates for the job
• Orienting and training new employees
• Managing compensation or pay
• Providing incentives and benefits
• Evaluating employees' performance
• Developing employees
• Building employee commitment
• Providing good working conditions
• Handling grievances and industrial relations
• Conducting Job Analysis

Job analysis is the process of obtaining information about jobs needed to achieve the organization's goals/objectives by
determining the duties,tasks and activities involved in jobs.
• Planning labor need and recruiting
• External recruitment enables the organization to fill job openings with special qualifications and to employ persons with new
knowledge,skills, values, ideas, and perspectives.
• Internal recruitment may also be done if management finds it more advantageous to promote or transfer present employees to
fill the available job openings.
• Selecting candidates for the job
• This involves the matching of people and jobs.
• Job specifications help identify the person-job fit , and in particular, identify the individual competencies, their knowledge,
skills,abilities, and other factors that may lead to excellent performance.
• Orienting and Training New Employees

This is done in organizations so that they could contribute to the achievement of their organizational goals'/objectives' achievement.
• The phases involved in this function are:
• Conducting needs assessment of the organization, of the person, and of the task/work
• Designing the training program by considering the institutional objectives, the trainees' readiness and motivation, and the
punciples of learning
• Implementation of the training program for nonmanegerial employees using: on-the-job training, apprenticeship training,
cooperative training, internship, government training, classroom instruction
 • Evaluating the training program in order to determine effectiveness,considering:reactions , learning, behavior of the trainees,
return on investment or results, and benchmarking
• Managing Compensation or pay

Pay equity must be considered. It must be fair and just, acceptable to all concerned parties, and commensurate to the value of
the work performance.
• Providing Incentives and Benefits
• Incentives are generally based upon a pay-for-performance philosophy which means that a performance "threshold" or a
baseline performance level must be reached by an employee or group of employees in order to qualify for incentive payments.
• Benefits include social security workers' compensation, health care and medical and educational assistance, vacation leave,
sick leave, life insurance, retirement benefits, and travel benefits.
• Evaluating Employees' Performance

Appraisal of employees' performance, on a regular basis, is done to find out who are doing their jobs well and who are not.
• Administrative Purposes

Include: to aid in decision-making regarding employees' pay and promotions, transfers, or layoffs, based on their achievements
and performance.
• Developmental Purpose
The use of results for discussing employees' strengths and weaknesses and for listing down performance improvement
needs.
• Communicating
• To be effective, managers must have good communication skills, both oral and written through the use of information and
technology.
• Communication may be hindered by barriers and breakdowns in the communication process
• Developing Employees
Programs designed to meet the special needs of employees will prepare them for future jobs or roles that they may be
assigned to do.
• Building Employee commitment

This is another important function of HR practitioners as this will bind them to engage in activities that will ensure the
achievement of organizational goals/objectives.
• Providing Good working conditions
This includes: giving a clear statement of the company's mission, vision, goals, and objectives, offering a good compensation
and benefits package, preparing a well-ventilated, well-lit, pollution-free work area for employees, and practicing ethical management
styles, among others.
• Handling Grievances and Industrial Relations

When differences arise between labor unions and management, there are usually settled through the grievance procedure,
wherein the feelings, needs, and desires of both parties are aired.
• Importance of HRM
 HRM deals with the management of people- the most important business resource. Money, materials, and information
resources are not capable of moving the business activities without the aid of the primary performance drivers, i.e. human resources.
• Lesson 2
• MARKETING MANAGEMENT
• Marketing Management

The process of manegerial planning and carrying out of the conception, pricing, promotion, and distribution of ideas, goods,
and services in order to bring about exchanges to satisfy individual and organizational goals.
• Philip Kotler

Marketing management is essentially demand management. This is because it involves "influencing the level, timing, and
composition of demand" so that an organization may reach it goals.
• The marketing management functions of management include the following:
• Analyses;
• Planning;
• Implementing; and
• Controlling of goods, services, and ideas to create exchanges that satisfy customer needs and company goals
• Analyses of demand management starts with the gathering of data through marketing research.
• Activities under marketing planning include decision-making on target markets, market positioning, product development,
pricing, distribution channels, physical distribution, communication and promotion.
• The implementation of the marketing plan is formally carried out by sales managers, sales people, advertising and promotion
managers, and customer service managers, among others.
• Controlling refers to monitoring of the marketing plan's progress. Goals and budgets are set for each month or quarter.
• Management of marketing resources
a) Sales people
b) Advertising
c) Marketing research
• Management of sales people

It involves inculcating the establishment of satisfying long-term relations with customers, suppliers, and distributors in order to
help their long-term preference and business.
• Management of Advertising
It can perform the following functions: build awareness, build comprehension of the good features of the product, and,
through brochures with the company's contact information, lead customers to get in touch with sales representatives.
• Management of marketing research
This involves identifying the seven characteristics of good marketing research characteristics.
1) the principle of the scientific method are used
2) research creativity is practiced by using innovative ways to solve marketing problems
3) multuple methods of research are used in order to adapt the method to the problem
4) interdependence of models and data which recognize that data are interpreted from underlying models
5)value and cost of infinformation is concerned with estimating the value of the information against the cost; this helps the marketing
research department determine which projects to priotize
6) healthy skepticism enables researchers to show a healthy questioning of the hurried assumptions made by managers about how a
market works
7) ethical marketing research is concerned with research that benefits both the sponsoring company and the consumers; self-serving
results may mislead consumers to buy the company's product which, in reality, is not good or effective
• Importance of Marketing Management
It is the key to organizational attainment, customer satisfaction and profit gain. In the absence of major marketing management
processes-planning, execution, pricing, and promotion and distribution of goods, services, and ideas to create exchanges with target.
• Lesson 3
• OPERATIONS MANAGEMENT
• Operations Management

The study of how goods and services are produced in organizations

• Operations Management Functions of management
• Overseeing the transformation processes that change resources into finished goods and services.
• Improvement of productivity and competive advantage.
• Productivity
• It measures the efficiency by which inputs re turned into outputs.
• The basic equation for productivity is:
productivity=output ÷ input
• Competitive advantage
• Is a competency of an organization to outperform a competitor or competitors.
• To ensure productivity, work processes must be subjected to complete analysis and redesigned, if necessary, through process
engineering.
• Management the sequence of activities and information along the whole course of the value chain.
• Importance of Organization Management
• Through the study of the essentials of operations management, businesses of different types and sizes may increase their
chances for survival and success in today's business environment which is characterized by intense competition and desire for
innovative quality products and services.
• Lesson 4
• FINANCIAL MANAGEMENT
• Gaining profit is the main goal of businesses.
• Financial Management

The management and custody of the organization's funds, seeing to it that these are effectively and efficiently utilized in order
to provide for all the needs of the organization's various operating units.
• Financial Management Functions
• Taking charge of the company's financial policies and strategies, investments, capital structures, and dividend
policies.
• Financial managers of organizations must be able to formulate sound financial standing plans that will communicate broad
guidelines for their financial decisions and strategies.
• Financial Management and Control
The management and custody of the organization's funds also include control which makes sure that these said funds are
properly utilized to provide for all the organization's needs.
 • Project Management
• Makes sure that long-term projects are implemented according to previously planned budgets and checks if these have
yielded forecasted cash returns.
• Working capital management
• Which includes cash, accounts receivable, and inventory management.
• Cash Management
• Makes sure that there is enough cash balance that may be used for their daily operating needs, that idle cash is invested
through marketable securities, and that proper cash control rules are instituted.
• Accounts Receivable Management

Ensures the optimation of accounts receivable investments and the formation of sound credit evaluation and collection
procedures.
• Inventory Management
Determines inventory levels by making maximum use of trade-off between inventory carrying cost, ordering cost and lost sales
opportunities; also, it institutes good stable inventory control procedures.
• Fund Sources Management

Identifies short and long-term funds that may be available and transact and keep watch of credit facilities with banks and other
financial institutions.
• Dividend Policy Implementation
• Determines the form and amounts of dividends and schedule their payments.
• Financial Planning
• It is the process of setting financial objectives and determining what should be done to accomplish them.
• Financial Forecasting
• Involves cash budgeting, profit planning, and balance sheet forecasting.
• Cash budgeting is a forecast of cash needs and sources.
• Profit planning is a forecast of revenues and expenditures.
• Balance sheet forecasting considers future assets, liabilities, and the organization's net worth position.
• Financial Analysis
• Involves capital budgeting techniques, operating leverage analysis, financial leverage analysis of pricing and cost.
• Capital budgeting involves the assessment of long-term investments.
• Operating leverage analysis critically examines cost-volume profit relationships.
• Financial leverage analysis studies the effect of debt on income to the organization's common stockholders.
• Analysis of pricing and costs of products, materials, supplies and production/manufacturing also fall under financial analysis.
• Financial performance evaluation refers to the assessment of financial ratios to indicate the overall performance of the
organization, as well as the assessment of market-wide indicators.
•
Importance of Financial management
Financial management facilitates the choice of investments, financial policies, and operating mechanism of the organization in order to
effectively achieve its goals and objectives, which includes maximixing its profits as well as those of its shareholders and stockholders.
• Lesson 5
• Information and Communication Technology Management (ICTM)
• Information and Communication Technology Management (ICTM)
• The management of information and communication technology that collect organize, and distribute data for use in the
organization decision-making functions.
• ICTM Functions of Management
• Developing the organization's hardware, software, and other computing and communicating technology.
• Developing the organization's management information system (MIS) tailored to the needs of the firm's units.
• Encouraging e-commerce through Internet use.
• Importance of ICTM
• The widespread use of ICT has brought aboutbthe emergence of a "knowledge society" due to easy access to information at
low costs through the Internet.

◇ STAFFING
CHAPTER 5

◇ COMPENSATION/WAGES AND PERFORMANCE EVALUATION

◇ Lesson 5

◇ COMPENSATION?/WAGES AND PERFORMANCE EVALUATION

◇ Related to each other because the employees’ excellence or poor performance also determines the compensation given to
them, after considering other internal and external factors like the actual worth of the job, compensation strategy of the
organization, conditions of the labor market, cost of living, and area wages rates, among others.

◇ TYPES OF COMPENSATION
(DIRECT, INDIRECT, NONFINANCIAL)

◇ DIRECT COMPENSATION

◇ Includes workers’ salaries, incentive pays, bonuses, and commisisions.

◇ INDIRECT COMPENSATION

◇ Includes benefits given by employers other than financial remuneration; for example: travels, educational and health benefits,
and other.

◇ NONFINANCIAL COMPENSATION

◇ Includes recognition programs, being assigned to do rewarding jobs, or enjoying management support, ideal work
environment, and convenient work hours.

◇ CONNECTIONG COMPENSATION TO ORGANIZATIONAL OBJECTIVES

◇ Worker compensation/wages had tremendously changed in the 21st century due to increased market competitions (both local
and global), required skills from workers and changes in technology, among others. Along with these, organizations’ pay
philosophies have also changed. Instead of paying employees based mainly on their job positions or titles, they are now given
pay according to their individual competencies or according to how much they could contribute or have contributed to their
company’s success. Wages experts now prepare compensation packages that create value for both the organization and its
employees.

◇ COMPENSATION: A MOTIVATIONAL FACTOR FOR EMPLOYEES

◇ PAY EQUITY
◇ Related to fairness; Equity Theory is a motivation theory focusing on employees’ response to the pay that they receive and
the feeling that they receive less or more than tey deserve.

◇ EXPECTANCY THEORY

◇ Another theory of motivation which predicts that employees are motivated to work well because of the attractiveness of the
rewards or benefits that they may possibly receive from a job assignment.

◇ BASES OF COMPENSATION

◇ PIECEWORK BASIS

◇ when pay is computed according to the number of units produced.

◇ HOURLY BASIS

◇ when pay is computed according to the numbers of work hours rendered.

◇ WEEKLY BASIS

◇ when pay is computed according to the number of work weeks rendered.

◇ DAILY BASIS

◇ when pay is computed according to the number of work days rendered.

◇ MONTHLY BASIS

◇ when pay is computed according to the number of work months rendered.

◇ COMPENSATION RATES are influenced by INTERNAL and EXTERNAL FACTOR

◇ INTERNAL FACTOR

◇ are the organization’s compensation policies, the importance of the job, the employees’ qualifications in meeting the job
requirements, and the employer’s financial stability.

◇ EXTERNAL FACTOR

◇ Include local and global market conditions, labor supply, area/regional wages rates, cost of living, collective bargaining
agreements, and national and international laws, among others.

◇ PURPOSES OF PERFORMANCE EVALUATION:

(ADMINISTRATIVE AND DEVELOPMENTAL)

◇ ADMINISTRATIVE PURPOSES

◇ These are fulfilled through appraisal/evaluation programs that provide information that may be used as basis for compensation
decisions, promotions, transfers and terminations.

◇ DEVELOPMENTAL PURPOSES

◇ These are fulfilled through appraisal/evaluation program that provides information about employees’ performance and their
strengths and weaknesses that may be used as basis for identifying their training and development needs.

◇ PERFORMANCE APPRAISAL METHODS

◇ TRAIT METHODS

◇ performance evaluation method designed to find out if the employee possesses important work characteristics such as
conscientiousness, creativity, emotional stability and others.

◇ GRAPHIC RATING SCALES

◇ Performance appraisal method where each characteristic to be evaluated is represented by a scale on which the evaluator or
rater indicates the degree to which an employee possesses that characteristic.

◇ FORCED-CHOICE METHOD

◇ Performance evaluation that requires the rater to choose from two statements purposely designed to distinguish between
positive or negative performance; for example: works seriously--- works fast: shows leadership--- has initiative.

◇ BEHAVIORALLY ANCHORED RATING SCALE (BARS)

◇ A behavioral approach to performance appraisal that includes five to ten vertical scales, one for each important strategy for
doing the job and numbered according to its importance.

◇ BEHAVIOR OBSERVATION SCALE (BOS)

◇ A behavioral approach to performance appraisal that measures the frequency of observed behavior.

◇ WHY SOME EVALUATION PROGRAMS FAIL

◇ Inadequate orientation of the evaluatees regarding the objectives of the program.

◇ incomplete cooperation of the evaluatees(e.g. proper answering of evaluation questionnaire)

◇ bias exhibited by evaluators.

◇ inadequate time for answering the evaluation form.

◇ Ambiguous language used in the evaluation questionnaire.

◇ Employees’ job description is not properly evaluated by the evaluation questionnaire used.

◇ Inflated ratings resulting from evaluator’s avoidance of giving low scores.

◇ Evaluator’s appraisal is focused on the personality of the evaluatee and not his or her performance.

◇ Unhealthy personality of the evaluator

◇ Evaluator may be influenced by organizational politics.

◇ EMPLOYEE RELATIONS

◇ LESSON 6

◇ EMPLOYEE RELATION applies to all phases of work activities in organizations and managers, to be effective, must be able to
encourage good employee relations among all human resources under his or her care.

Employees/workers are social being who need connections, or relations with other beings--- other employees/workers--- who
are capable of giving them social support as they carry out their tasks in the organization where all of them belong.

◇ EFFECTIVE EMPLOYER RELATIONS AND SOCIAL SUPPORT

◇ SOCIAL SUPPORT

◇ Is the sum total of perceived assistance or benefits that may result from effective social employee relationships.

◇ In short, social support and effective employee relations must always go together like “a horse and carriage” where one would
be useless without the other.

◇ SOME BARRIERS TO GOOD EMPLOYEE RELATIONS

◇ Anti social personality: refusal to share more about oneself to co-employees; being a loner.

◇ Lack of trust in others

◇ Selfish attitude; too many self serving motives

◇ Lack of good self esteem

◇ Not a team player

◇ Being conceited

◇ Cultural/subcultural differences

◇ Lack of cooperation

◇ Communication problems, refusal to listen what others seek to communicate

◇ Lack of concern for others’ welfare

◇ SOME WAYS TO OVERCOME BARRIERS TO GOOD EMPLOYEE ELATIONS

◇ Develop a healthy personality to overcome negative attitudes and behavior

◇ Find time to socialize with coworker

◇ Overcome tendencies to be too dependent on electronic gadgets

◇ Develop good communication skills and be open to others’ opinions

◇ Minimize cultural/subcultural tension.

◇ EMPLOYEE MOVEMENTS

◇ LESSON 7

◇ A LABOR UNION is a formal union of employees/ workers that deals with employers, representing workers in their pursuit of
justice and fairness and in their fight for their collective or common interests.

◇ FINANCIAL NEEDS

◇ Complaints regarding wages or salaries and benefits given to them by the management are the usual reasons why employees
join labor unions.

◇ UNFAIR MANAGEMENT PRACTICES

◇ Perceptions of employees regarding unfair or biased managerial actions are also reasons why they join mass movements.

◇ SOCIAL AND LEADERSHIP CONCERNS

◇ Some join unions for the satisfaction of their need for affiliation with a group and for the prestige associated with coworkers’
recognition of one’s leadership qualities.

◇ STEPS IN UNION ORGANIZING

◇ STEP 1: EMPLOYEE/UNION CONTACT

STEP 2: INITIAL ORGANIZATIONAL MEETING
STEP 3: FORMATION OF IN HOUSE ORGANIZING COMMITTEE
STEP 4: IF A SUFFICIENT NUMNER OF EMPLOYEES SUPPORT THE UNION MOVEMENT, THE ORGANIZER REQUESTS
FOR A REPRESENTATION ELECTION OR CERTIFICATION ELECTION.

◇ STEP 5: END OF UNION ORGANIZING

The contract negotiations or collective bargaining agreement (CBA) process involves the following procedures:

A. PREPARE FOR NEGOTIATIONS

B. DEVELOP STRATEGIES
C. CONDUCT NEGOTIATIONSD. FORMALIZE AGREEMENT
◇ CBA activities, ideally, must be a continuous process (although it is held every five years in many companies. Right after the
formalization of the agreement and its ratification and signing, preparations for negotiations for the next CBA must, again,
begin. This will allow negotiators to review weaknesses and mistakes committed during the previous negotiations while these
are still fresh in their minds.

◇ GRIEVANCE PROCEDURE

◇ Is a formal procedure that authorizes the union to represent its members in processing a grievance complaints

◇ REWARDS SYSTEM

◇ LESSON 8

◇ MONETARY REWARD

◇ Rewards which pertain to money, finance, or currency

◇ MONETARY REWARD
Rewards which pertain to money, finance, or currency

◇ PAY/SALARY

◇ Financial remuneration given in exchange for work performance that will help the organization attain its goals.

◇ BENEFITS

◇ indirect forms of compensation given to employees/workers for the purpose of improving the quality of their work and personal
lives.

◇ INCENTIVES

◇ Rewards that are based upon a pay for performance philosophy; it establishes a baseline performance level that employees or
group of employees must reach in order to be given such reward or payment.

◇ EXECUTIVE PAY

◇ A compensation package for executives of organizations which consists of five components; basic salary, bonuses, stock
plans, benefits and perquisites.

◇ STOCK OPINION

◇ Are plans that grant employees the right to buy a specific number of shares of the organization’s stock at a guaranteed price
during a selected period of time.

◇ NON MONETARY REWARD

rewards which do not pertain to money, finance, or currency; refer to intrinsic rewards that are self granted and which have a
positive psychological effect on the employee who receives them.

◇ AWARD

◇ That may be given to individual employees or groups/teams for meritorious service or outstanding performance.

◇ PRAISE

◇ A reward given by superiors to their subordinates when they express oral or verbal appreciation for excellent job performance.

 CONTROLLING

 CHAPTER 7
  wHAT is controlling?

 Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates, a manager
needs to exercise effective control over the activities of the subordinates.

 Definition and nature of management control

 Lesson 1

 Management control

 A management control system is a set of administrative procedures through which one group of people in an organization
intentionally influence or affect the behaviour of another group.

 Management control makes sure:

 That the firm’s operating cash flow is sufficient, efficient, and if possible, profitable when invested.

 That the decision to seek funds should be appropriate, so as not to incur expenses as well since borrowing would be
subjected to payment of interest.

 That there is a continuous monitorig of the organization’s activities, followed by corrective actions based on
previously planned programs of action.

 That tasks are completed with less error by comparing these with previously set steandards or with competitor’s
standards or standard prevailing in their particular industry setting.

 Control process

 The control process is the system that allows setting, measure, and match any business activities such as production,
packaging, delivery and more.

 Is the functional process for organizational control that arises from the goals and strategic plans of the organization.

 The link between planning and controlling

 Lesson 2

 Planning and Controlling are inter-related to each other. Planning sets the goals for the organizations and controlling ensures
their accomplishment.

 What is Balance sheet

 A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point
in time, and provides a basis for computing rates of return and evaluating its capital structure.

 Formula used for the balance sheet:

Assets=Liabilities+Shareholders’ Equity

 The income statement

 The income statement is also known as the profit and loss statement, revenue and expenses statement, statement of financial
performance, or earnings statement.

 The cash flow statement

 In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how
changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating,
investing, and financing activities.

 Organizational performance control

 the process of assigning, evaluating, and regulating resources on an ongoing basis to accomplish an organization's goals.

 Control methods and system

 Lesson 3

 Methods of control

 A firm may apply control techniques or methods which are either quantitative or nonquantitative.

 Quantitative methods

 Quantitative methods make use of data and different quantitative tools for monitoring and controlling production output.
Budgets and audits are among the most common quantitative tools.

 budgets

 The budget remains the best known control device. Budget and control are, in fact, synonymous.

 A budget is an instrument of planning, management, and control.

 Two major budget systems:

 ZBB (zero-based budgeting)

 PPBS (planning,programming, and budgeting system)

 audits

 As a management tool, the audit measures and evaluates the effectiveness of management control. Audit service provides an
independent audit of programs, activities, systems, and procedures.

 Nonquantitative methods

 Nonquantitative methods refers to the overall control of performance instead of only those of specific organizational processes.

 other control methods

 Feedforward control

 That takes place after the occurrence of the activity.

 Feedback control

 Takes place while work activity is happening.

 Employee discipline

 Control challenge for managers.

 Project management control

 Control ensures that the task of getting a project’s activities done on time,within a udget, and according to specifications, is
successfully carried out.

 Application of management control in accounting and marketing concepts and techniques

 Lesson 4

 Management control in accounting and finance is the control that makes use of the balance sheet, income statement, and
cash flow statement to analyze and examine financial statements in order to determine the company’s financial soundness
and viability, as well as financial ratios to determine the company’s stability.
 Accounting/financial control ratios

 The goal os businesses is to gain profit. In order to achieve this, managers needs accounting/finanacial controls.

 Liquidity ratio

 Tests the organization’s ability to meet short term obligations; it may also refer to acid tests done when inventories turn over
slowly or are difficult sell.

 Current ratio=current assets/current liabilities

 Leverage ratio

 Determines if the organization is technically insolvent, meaning that the organization’sfinancing is mainly coming from
borrowed money or from the owners’ investments.

 Debt-to-assets ratio=total debt/total assets

 Activity ratio

 Determine if the organization is carrying more inventory than what it needs; the higher the ration, the more efficiently inventory
assts are being used.

 Inventory turnover=cost of goods sold/avergage inventory

 Profitability ratio

 Determines the profit that are being generated.

 Net profit after taxes/total sales

 or it measures the efficiency of assets to generate profits

 Return on investment=net profit after taxes/total assets

 In addition to the above ratios:

 Assets management is the ability to use resources efficiently and operate at minimum cost.

 Inventory turnover=sales/average inventory

 Strategic control

 Strategic control is the process used by organizations to control the formation and execution of strategic plans.

 Types of strategic control

1. Premise control

2. Implementation control

3. Strategic surveillance

4. Special control

 Premise control

 Premise control is designed to check systematically and continuously whether the premises on which the strategy is based
are still valid.

 Implementation control

 Strategic implementation is a process that puts plans and strategies into action to reach desired goals.
  Strategic surveillance

 Strategic surveillance is the observation of events and situations that may affect a company's bottom line.

 Special control

 A special alert control is the need to thoroughly, and often rapidly, reconsider the firm's basis strategy based on a sudden,
unexpected event.

 benchmarking

 Is an approach or process of measuring a company’s own services and practices against those of recognixed leaders in the
industry in order to identify areas for improvement.

 Role of budgets in planning and control

 Lesson 5

 An organization’s ability to have a good control system is also dependent on its budget process. Budgets are plans to monitor,
control, and implement the resource of the firm on its operation based on its objectives or goals.

Beginning cash balance

+ cash receipts

= total cash available

- Cash disbursements

= cash balance before borrowing/repayment

+/- borrowing from/repayment of line of credit

- Interest of line of credit

= ending cash balance

 Steps toward better budget-making

 The budget may be improved upon in order to address the needs of the organizations and to consider the input of all
concerned. Below are the steps in improving the budget:

 Collaborative and communicate with organization administrations and selected members so that the budget becomes
more acceptable to all.

 Practice flexibility as the budget adapts to the organizations needs.

 Relate the budget to company goal since their achievement is the primary objects/goal of the firm.

 Coordinate the budget with all the company departments so that they may be able to make full use of the budget
allocations given to their respective units.

 Use computer software or application when needed to faciliate accurate computations and proper dissemination of
information related to the budget.

 sa madaling sabi, kung kikita ka ng 3000dollars sa isang buwan, mayroon ka ng panggastos, mase-save, at ma-invest. sa
ganoong paraan, malalaman mo kung saan napupunta ang bawat sentimo ng iyong pera.