ROMBLON STATE UNIVERSITY

San Fernando Campus

San Fernando, Romblon

BUSINESS ADMINISTRATION AND MANAGEMENT DEPARTMENT

Mgt. 1a (Organization and Management)
1ST SEMESTER SY: 2020-2021
______________________________________________________________________________

Subject Teacher: Lect. Gittelle Rafol

Cellphone#: 0955-341-9520
Email Address: grafol1021@yahoo.com
Textbook: Business Organization and Management by Roberto G. Medina
______________________________________________________________________________

I. COURSE OVERVIEW
This course is designed to familiarize the students with the basic concepts, principles, and
processes related to business organization, and the functional areas of management. Particular
emphasis will be given to the study of management functions like planning, organizing, leading,
and controlling, and orient the students on the importance of these functions and the role of each
area in entrepreneurship.

II. COURSE REQUIREMENTS

Exercises, Class Participation/ Report, Quizzes, Output/Projects/ Case Study, Major
Examination

III. GRADING

Midterm Examination Final Examination Final Grade

Midterm 40% Final 40%
Quizzes 20% Quizzes 20%
Output 10% Output 10% FG = MG+FG
Class Participation 15% Class Participation 15% 2
Report 15% Report 15%
Total 100% Total 100%

OBJECTIVES:
At the end of this chapter, the students are expected to:
1. Describe the meaning of management
2. Identify the scope of management
3. Recognize the importance of effectiveness and efficiency in organization
4. Describe the characteristics of a manager
5. Examine the levels of managers in the organization
6. Compare the types of managers
7. Examine the skills required in managing

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8. Identify the various roles of a manager
9. Describe the nature of an organization
10. Identify the basic principles of management and organization

LESSON 1:
Management is the process of working with people and resources to accomplish organizational
goals. The word management is derived from the Italian word Maneggiare, which means “to train
horses” or literally “to handle”, from the French words, Maneger, meaning “to direct a household”.
i.e., “to economize”, and Maneger, “an act of guiding or leading.” Etymologically, therefore, it
means to handle, direct economically, guide, and lead.
Management may be defined as the achievement of organizational objectives through people
and other resources.
Functions:
 Decision making is the process by which a decision maker determines the available
alternatives and chooses the best solution that suits a given problem.
 Planning is the process of establishing objectives and suitable courses of action before
taking action.
 Organizing is the process of arranging an organization’s structure and coordinating its
managerial practices and use of resources to achieve its goals.
 Staffing refers to the process of recruiting, placing, training, and developing personnel.
 Communicating refers to transferring information from one communicator to another.
 Motivating refers to the act of giving employees reasons or incentives to work in order to
achieve organizational objectives.
 Leading is the process of directing and influencing task-related activities of organization
members.
 Controlling is the process of monitoring actual organizational activities to see that they
conform to plan activities and correcting deviations or flaws.
Traditional Functions of Management
 Planning
 Organizing
 Leading
 Controlling
Planning is specifying the goals to be achieved and deciding in advance the appropriate are actions
needed to achieve those goals. Planning activities include analyzing current situations, anticipating
the future, determining objectives, deciding in what types of activities the company will engage,
choosing corporate and business strategies, and determining the resources needed to achieve the
organization’s goals.
Organizing is assembling and coordinating the human, financial, physical, informational, and
other resources needed to achieve goals. Organizing activities include attracting people to the
organization, specifying job responsibilities, grouping jobs into work units, marshaling and

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allocating resources, and creating conditions so that people and things work together to achieve
maximum success.
Leading is stimulating people to be high performers. It includes motivating and communicating
with employees, individually and in groups. Leading involves close day-to-day contract with
people, helping to guide and inspire them towards achieving team and organizational goal. Leading
takes place in teams, departments, and divisions, as well as at the tops of large organizations.
Controlling monitors performance and implements necessary changes. By controlling, managers
make sure the organization’s resources are being used as planned and that the organization is
meeting its goals for quality and safety. Monitoring is an essential aspect of control.
EFFECTIVENESS AND EFFICIENCY: A BASIC REQUIREMENT
An organization can only survive if its activities are effective and efficient. It is the responsibility
of the manager to see that his organization will achieve its objectives effectively and efficiently.
This is so even if such objectives are parts of a bigger objective.
Effectiveness is a central element in the management process, which requires the achievement of
an objective. For instance, a manufacturer chooses a supplier who provides needed materials at the
required time and quantity. The action qualifies as effective.
Efficiency is also a central element in the management process, which requires that the minimum
amount of resources is used to achieve an objective. In the example cited above, the manufacturers
may be able to get supplies from his chosen source, but if the costs associated with the purchase
are too excessive, the operation will be inefficient and may place the organization in a
disadvantageous position. This is especially true if profitability is compromised.
Too much emphasis on efficiency, however, may affect effectiveness rendering any productive
effort useless. An example is the trader who regularly delivers his product to customers. If the tires
of his delivery van are of the lowest price but of the poorest quality he may not be able to fulfill
hid commitments on time, making his service ineffective and eventually jeopardizing his business
will be in trouble.
It appears that the secret is to have a nice balance both effectiveness and efficiency. To emphasize
one and disregard the other is not in keeping with good management practices.
WHAT IS A MANAGER
A manager in one who plans, organizes, leads and controls other individuals in the process of
pursuing organizational goals. Managers are vested titles like president, department head, dean,
administrators, supervisors, team leaders, and the like.
The manager is the one who is responsible for accomplishing the objectives of his particular unit
which could be a whole organization, a particular department, or a work group.
Managers are responsible for using materials and talents in the most economical and productive
manner. As such, they are regarded as very important, if not the most important actor in the
economic development of the nation.
THE LEVELS OF MANAGERS
Managers function according to the levels they are in. In a small organization, there would
normally be just a single manager who is expected to perform all the managerial roles and tasks.

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 In the transition from a small to a large organization, there may be two levels of manager
who divide among themselves the managerial roles and tasks.
There are times when the size of the organization justifies setting up three levels of managers:
the top management, the middle management, and the lower management. Figure 1 shows the
levels at the various stages of organizational growth.

SMALL MEDIUM LARGE

ORGANIZATIONS ORGANIZATION ORGANIZATION
S

Single Top Top

Manager Managers Managers

Employees Middle
Front Line Managers
Managers

Front Line
Managers
Employees

Figure 1
Level of Managers Employees
( by size of organization)

Top managers are responsible for the overall performance of the organization. They formulate
strategies, provide leadership, evaluate and shape the method of organizing, and control the
direction of the organization in the effort to accomplish goals. Top management usually hold titles
such as chief executive officer, president, chairman or senior vice president.
Middle managers direct the activities of other managers and sometimes also those of operating
employees. They work with top managers and coordinate with peers to develop and implement
action plans to accomplish organizational objectives. Examples of middle managers are the dean
of the business school in a university, the plant manager in a manufacturing concern, and the
branch manager of a trading firm.
Lower level managers are responsible for leading employees in the day-to-day tasks, which
contribute to the organization’s goals. Of the various levels of managers, they are the ones in direct
contact with the employees. Because of this, they are also referred to as “first line” or “front line”
managers. Apart from performing the other managerial functions of planning, directing, and
organization, their tasks include correcting errors or solving problems directly related to the
production of goods and services.

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TYPES OF MANAGERS
Managers may be different from one another in terms of the work they do. They may be briefly
described as follows:
1. Line managers are directly concerned with accomplishing the goals of the organization. The
decisions they make with regards to operations are expected to be final and must be implemented.
For example, the university president, the dean, and the department heads all have line
responsibilities.
2. Staff managers are in charge of units that provide support to the line units. In doing their work,
they use special expertise to advise the line workers. The director of personnel and the controller
are examples of staff managers.
3. Administrators are managers working in government or in nonprofit organization.
Examples include school administrators, provincial administrators, and hospital administrators.
MANAGEMENT SKILLS
The effective and efficient performance of management functions such as planning, organizing,
leading, and controlling are possible only if the manager is well-equipped with the necessary
management skills. Such requirements may be briefly described as follows;
1. Technical skills refer to the abilities to use special proficiencies or expertise in performing
specific tasks. They refer to the use of tools, techniques, and specialized knowledge. Examples
of technical skills are an accountant preparing a financial report, an architect working on building
plan, and a professor writing a book.
2. Human skills refer to the abilities to work well in cooperation with other persons; whether they
are subordinates, peers, or superiors. A person with good human skills will have a high degree of
self-awareness and a capacity for understanding or empathizing with the felling of others.

The Required Management Skills at Different Levels of Management

The application of various management skills differ from level to level in the management
hierarchy. As shown in Figure 2, first line manager needs less conceptual skills in the performance
of his work, and more human and technical skills.
Compared to the first line manager, middle managers need more conceptual skills the same degree
of human skills as that of first line managers, but less on technical skills.
The biggest concern of top management is on conceptual skills; the same degree of human skills
as these of first line and middle managers, and with the list concern about technical skills.
FIRST LINE MIDDLE TOP MANAGERS
MANAGERS MANAGERS
Conceptual
Conceptual Conceptual

Human
Human
Human

Technical
Technical Technical

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 Some of the human skills necessary for managers are effectively oral and written
communications, creating positive attitude towards others and in the work setting, developing
cooperation among group members, and motivating subordinates.
Human skill is a difficult one to master. Emotionally sound managers performs this skill
better than those who are not.
3. Conceptual skills refers to the ability of the managers to see the organization as a whole and to
solve problems in ways that benefit the total system. Specifically the manager who possesses these
skills is expected to analyze and solve complex problems. Thus, the manager with good conceptual
skills will have the mental capacity to perform the following:
a. identify problems and opportunities;
b. gather and interpret relevant information; and
c. execute problem-solving decisions that serve the organization’s purpose.
Examples of situation that require conceptual skills include the promulgation of a new law (e.g.,
the Senior Citizen’s law, or a policy to change the economic condition of the country; one that
addresses the declining purchasing power of consumers). In a company, a manager’s conceptual
skill are required in decisions such as those that affect the selling procedures of the organization
in choosing where to establish a branch of the company.
MANAGERIAL ROLES
The manager is expected to lead his unit or department in achieving its objectives. As such, he is
bound to interact with people and deal with processes. In the attempt to procedure result, the
manager assumes roles as varied as the following;
1. Interpersonal Roles. These are the roles the manager plays when he interacts with others. The
specific roles under this category are;
a. Figurehead. When the manager performs this role, he acts as the symbolic head of the
organization and as a result, he is expected to perform a number of duties of a legal or social nature.
For example, when a manager cuts the ceremonial ribbon of a company-sponsored project such as
a school building, it provides an example of his figurehead role.
b. Leader. This role makes the manager responsible for the motivation and activation of
subordinates. As such, he is responsible for actions in staffing, training, and other associated duties.
He performs the role of leader in virtually all managerial activities involving subordinates.
c. Liaison. In assuming the liaison role, the manager makes contacts with individuals in and out of
the organizations to facilitate the accomplishment of work in his department. Example of such
activities are acknowledgement of mail, external board work, and other activities involving
outsiders.
2. Informational Roles. A very important aspect of the manager’s job is to receive and
communicate information. Such roles are vital to his decision making tasks. If he wants his
subordinates to improve the quality of their decisions, he provides them with information.
On receiving and sharing information, the manager assumes three specific roles. These are briefly
described as follows;

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a. Monitor. In making the right decisions concerning the various aspects of an organization, the
manager is expected to collect information that will be useful in performing his job. This
information is shared with other members of the organization whenever they needed.
In acting as a monitor; he handles all mails and contacts categorized as concerned primarily with
receiving information using such sources as news bulletin, special magazines, and observational
tours.
b. Disseminator. There are certain types of information that the manager may consider useful to
his subordinates. When he receives such information from outsiders or from subordinates, he
transmits them to the concerned members of the organization. Some of this information may be
factual, and some may involve interpretations and integration. As information disseminator the
manager sees to it that relevant incoming information is properly shared with subordinates.
c. Spokesperson. There are occasions when outsiders seek information about the organization and
the manager, as spokesperson accordingly. He also serves as experts on organization’s industry.
To effectively perform the role of spokesperson, the manager sees to it that his views are heard on
occasions requiring his presence such as board meeting. He also maintains contact with outsiders
and provides information when they are required.
3. Decisional Roles. The major part of the manager’s job is to make decisions. As such, he must
use the information he processes to make decisions that solve problems.
As decision maker, the manager assumes the following roles;
a. Entrepreneur. In acting this role, the manager searches the organization and its environment for
opportunities and initiates project to bring about positive change. He also supervises the design of
certain projects to improve performance.
b. Disturbance Handler. Sometimes, organizations face important but unexpected disturbances
such as striking employees dissatisfied with the compensation scheme, a disagreement among
middle managers involving questions of jurisdiction, and the sudden decrease in sales of the
different branches of the organization. As disturbance handler, the managers is expected to respond
to such unwelcome pressures by formulating strategies and reviewing such disturbances.
c. Resource Allocator. The manager responsible for the allocation of organizational resources of
all kinds such as personnel, funds, machines, or building and facilities to individual employees or
units. As such, he is expected to be actively involved in scheduling, acting on requests for
authorization, budgeting, and the programing of subordinates’ work.

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 WHAT IS AN ORGANIZATION?
An organization is a collection of people working together to achieve a common purpose.
It is the means used by people to achieve certain objectives. A mere grouping of people will not
qualify as an organization unless it has some objectives to achieve. In order to do this, people in a
group must interact, use knowledge and techniques, and work together in patterned relationships.
Charitable organizations like the Red Cross, provide assistance to the poor and the sick.
Local governments are organizations that run the political affairs of provinces and municipalities.
The various types of organization are illustrated in Figure 3.
ORGANIZATION

Government Private

Corporate Non-Corporate Profit Seeking Not-for-profit

Figure 3
Types of Organizations
COMMON CHARACTERISTICS OF ORGANIZATION
The following are the four characteristics commonly shared by the organizations:
1. Coordination of Effort. When properly directed, persons working in coordination with others
will produce better outputs than when they work independently. Studies indicate that the persons
who cooperate with one another in an organized manner will produce better output than when they
don’t.
2. Common Goal or Purpose. In order to make employees work with proper direction, they must
provide with a common goal or purpose. Organizations that do not make their goals or purpose
clear the risk of failure.
3. Division of Labor. When the total job is divided into manageable parts, workers will be more
familiar with their assignments, making them more proficient. A manufacturing firm, for instance,
will undertake various activities like production planning, materials procurement, manpower
acquisition, manning the production line, and others. When the firm’s employees are assigned to
do all functions (e.g. no specific assignment for each employee), they will find it hard to master
any activity. The result will, most probably, be poor production.
4. Hierarchy of Authority. In controlling the behavior of employees, positions are established and
linked by a chain of command in continuous branching out so that multiple layers exist in the
hierarchy.

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BASIC PRINCIPLES OF MANAGEMENT AND ORGANIZATION
There are certain principles that should be considered in the study of management and organization
of business enterprises. These principles are enumerated below.
1. Management Principles. The various management principles applicable to managing a business
enterprise are as follows:
a. Division of Labor. This means breaking a job into specialized tasks to increase productivity. For
example, the total job of financing appliance sales may be divided into tasks such as credit
investigation, collection, sales, and accounting.
b. Authority. This is the right of a person in positions to give orders and the power to exact
obedience. For example, a sales manager has the right to expect from the sales supervisors the
required volume of sales for a given period.
c. Discipline. This provides uniform application of behavior to certain activities; the outcome of
which is readily predicted. If discipline is not practiced, objectives will be very hard to achieve.
d. Unity of Command. This means that each employee must have only one supervisor. Reporting
directly to more than one supervisor creates problems and reduces productivity.
e. Unity of Direction. This means that the efforts of everyone in the organization must be
coordinated and focused in the same direction. It will be hard to achieve an organizational objective
if some components of the organization are not moving toward the identified objective.
f. Subordination of the Individual Interest to the General Interest. This means that the goal of the
organization (e.g., 25% ROI for the current year) should take precedence over individual goals
like a 10% increase in the salaries of certain employees. When the reverse happens, it will be
difficult for the organization to succeed because its goals will always be set aside.
g. Remuneration. Employees should be paid fairly in accordance with their contribution to the
organizational effort. This must be applied to salaries, bonuses, and benefits.
h. Centralization. Power and authority must be centralized as much as practicable.
Decentralization must be instituted, however, when the firm grows to a considerable size.
i. Scalar Chain. This means that subordinates should observe the official chain of command unless
authorized by their respective superiors to communicate with each other.
j. Order. This means that human and non-human resources must be in their proper places. The
production manager, for example, must hold office at the production site.
k. Equity. This is the result of kindliness and justice and is a principle to guide management and
employee relations.
l. Stability of Tenure. High employee turnover is counterproductive. To motivate employees to
stay with the company, effective manpower planning and implementation are necessary.
m. Initiative. Management should encourage employees to act on their own volition when
confronted with an opportunity to solve a problem.

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n. Esprit de Corp. this means that the manager should emphasize teamwork by building harmony
and a sense of unity among employees. Harmony breeds high morale and is more productive than
discord.
2. Principle of Organization. Knowledge of the basic principles of the organization is a useful
guide in organizing business enterprises. These principles are as follows:
a. Principle of Objective. The objective of the organization must first be determined and laid out
clearly before any activity is undertaken. The objective will serve as the guide in determining
whether a certain activity is required or not. If the company’s objective, for example, is to sell
financing services, then the entire organization must be built around that objective, and every
employee of the company must think and act in terms of selling financing services.
b. Principle of Analysis. Managers in the organizations must be able to break a problem down into
its components, analyze these components, and then come up with a feasible solution. In the
attempt to achieve objectives, the analytical ability of managers and employees will be crucial.
c. Principle of Simplicity. The organization should be built in the simplest manner that could make
the achievement of objective possible. Only activities that are absolutely necessary should be
undertaken, and those which are not, should be eliminated. For example, a business engaged in
manufacturing men and women’s clothing should not include choir singing in their activities. If it
does, it will only draw their attention from becoming more productive.
d. Principle of Functionalization. Business firms are not supposed to be organized to
accommodate individual. Rather it should be built around the main function of the business. For
example, if the company’s objective is to sell financing services, the functions should be related
to such objectives like credit department, collection department, financial planning department,
sales, and so forth.

CHAPTER EXERCISES
1. Discuss why is studying of management important?
2. Give examples on how effectiveness and efficiency differ from one another.
3. Who are the managers, and what do managers do?
4. Enumerate some example of organizations nowadays based on figure 3, types of organizations.
5. Choose one principle of management and give a situation in a business scenario which it can be
applied or can be used.

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