Managing Better than

the Best

A module in
Engineering Management

Engr. Ernest Paul Y. Sison

Instructor
 Introduction

This module is intended for the students to understand that being in the field of
engineering doesn’t always mean that they only master their majors. They should also know
how to interact with people working with them, how to manage and to be managed. In this
module, the students will learn the history of managers with their techniques, challenges and
remedies. Also, they will have a chance to start an organization which is a practice in building
their own company and starting to manage a group of people. The purpose of this subject is to
bridge the gap of management and engineering that is why this subject was taught by an
engineer that is also in the field of management.

Objectives:
At the end of this module, you should be able to:
1. Explain the basic concepts of organization and management.
2. Understand the management process.
3. Know the management principles as applied on industrial operations.
4. Understand the different Pinoy Management.

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 Table of Contents
Page No.
Title Page 1
Introduction 2
Table of Contents 3
I. Introduction 5
A. Concept of Organization Management
B. Management Functions, Roles and Skills 9
C. Current Trends and Issues 12
D. Historical Foundations of Management 13
1. Classical Approaches 14
2. Human Resources Approaches 16
3. Quantitative Approaches 18
4. Contingency Approaches 18
5. System Approach 18
6. Learning Organization 18
7. Quality Management Approach 19
II. The Management Process 20
A. Planning – to set direction 20
1. Fundamentals of Planning 20
2. Approaches to planning 22
3. Techniques for assessing the environment 23
4. Forecasting Methods 23
5. Techniques for allocating resources 28
6. Scheduling Methods – Gantt Chart / PERT-CPM 28
7. Criticisms to planning 30
B. Organizing – to create structure 31
1. Fundamentals of Organizing 31
2. The Concept of Delegation and Empowerment 35
3. Organizational Designs 35
4. Organizational Design Challenges 37
5. Organizing trends in the modern workplace 37

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 C. Influencing – to inspire effort 38
1. Fundamentals of Influencing 38
2. Leadership 39
3. Contemporary views on Leadership 40
4. Leadership issues in the 21st century 41
5. Motivation 42
6. Groups, Teams and Corporate Culture 47
7. Communication 49
D. Controlling – to ensure results 54
1. Principles of Controlling 54
2. Organizational Control System 55
3. Potential barriers to successful controlling 60
4. Making control successful 61
III. Some Practice of Management 62
A. Human Resource Management Process 62
1. Defining Human Resource Management 62
2. Human Resource Management Process 62
B. Production/Operations Management 67
1. Defining Production and Production System 67
2. Capacity Planning 68
3. Evaluating Capacity Alternatives 69
4. Determinants of factors of production requirements 71
5. Scheduling and loading 72
IV. Pinoy Management 73
A. Pinoy Management Styles 73
B. Weapons for Managers 76
C. Pinoy Management Approaches 79

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 CHAPTER I - INTRODUCTION

It’s Now or Never

When Engr. Romeo Estabillo finished his Civil Engineering course at Mapua Institute of
Technology, he took the board examination and passed it in 1981. Wanting to start
independently, he went back to his hometown (Santiago City) to organize his own construction
firm. In his first few years of operation, he accepted contracts for the construction of
residential houses. As he gained experiences, his clients grew in number, and even the most
prominent persons in Province of lsabela availed of his services.
At the start, he hired two assistants to help him in his daily routine as a contractor. One of
the two assistants, Mr. Silvino Santiago, was a third year civil engineering student who had
stopped schooling due to financial difficulties. His task was as draftsman. His duty was to
produce all documents relating to physical requirements of the various contracts entered into
by boss. Among the documents are the building plan, specifications, bill of materials, building
permit, etc. His additional duty was to assist Engineer Estabillo in supervising the foremen and
workers at the various construction sites.
The second assistant, Mr. Romulo Mamaril, was assigned to coordinate purchasing,
bookkeeping, and other related administrative activities. At the third year of operations, Engr.
Estabillo was already directing operations in his newly constructed office inside his residential
compound. By this time, two more female employees were hired to assist in the various tasks
performed in the office.
By 1994, Engr. Estabillo reviewed his company’s payroll. It indicated that he has six full-
time civil engineers, two draftsmen, ten administrative personnel, one messenger, and one
security guard. The foremen and laborers working at the various projects were contractual
By June, 1996, Engr. Estabillo felt that business was continuously growing, so he will have
to secure the services of four additional civil engineers on a full- time basis. As he was directly
supervising all operations, he now feels that he may not be able to perform his functions
effectively if he will push through with the plan. He wants to make a decision, but he is
apprehensive. He thinks operations are now more complex. With this thought, he pondered on
how he will go about solving the problem.

IA. The concept of organization management

Organization – Collection of people working together
to achieve a common purpose. Based on this definition, an
organization has the following characteristics:
 Distinct purpose Distinct Deliberate
- Goal or set of goals that it hopes to accomplish Purpose Structure
- Goal: to produce goods and/or render service
 People
- Group of individuals working together with the same People
goal
 Structure
- Policies, guidelines, regulations etc. that defines
member’s work relationships.

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 Traditional Organization vs. Contemporary Organization
Traditional Organization Contemporary Organization
 Stable  Dynamic
 Inflexible  Flexible
 Job-focused  Skills-focused
 Work is defined by job positions  Work is defined in terms of tasks to
 Individual oriented be done
 Permanent jobs  Team oriented
 Command oriented  Temporary jobs
 Managers always make decisions  Involvement oriented
 Rule oriented  Employees participate in decision
 Relatively homogeneous workforce making
 Workdays defined as 9 to 5  Customer oriented
 Hierarchical relationships  Diverse workforce
 Work at organizational facility during  Workdays have no time boundaries
specific hours  Lateral and networked relationships
 Work anywhere, anytime

Management:
- Process of reaching organizational goals by working with and through people and
other organizational resources. Hence, it has the following three main
characteristics:
1. It is a process or series of continuing and related activities.
2. It involves and concentrates on reaching organizational goals
3. It reaches these goals by working with and through people and other
organizational resources.

As managers use their resources, they must strive to be both effective and efficient.
Managerial Effectiveness refers to management use of organizational
resources in meeting organizational goals. It is often described as “doing the
right things” – that is doing those work activities that will help organization
reach its goals.
Managerial Efficiency is the degree to which organizational resources
contribute to productivity. It refers to getting the most output from the least
amount of inputs.

Efficiency and Effectiveness in Management

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Effectiveness vs Efficiency
Efficient Not reaching goals and Reaching goals and
(most resources not wasting resources not wasting resources
RESOURCE USE
contribute to production)
Inefficient Not reaching goals and Reaching goals and
(few resources contribute wasting resources wasting resources
to production)
Ineffective Effective
(little progress toward (substantial progress
organizational goals) toward organizational
goals)
GOAL ATTAINMENT

The Universality of Management

 Management is universally needed in all organizations. Organizations that are well
managed develop a loyal customer base, grow and prosper.
 By studying management, one will be able to recognize poor management and work to
get it corrected.
 In addition, one will be able to recognize good management and encourage it, whether
it is an organization with which one is simply interacting or whether it is an
organization in which one is employed.

Managers
- Someone who coordinates and oversees the work of other people so that
organizational goals can be accomplished. Serving in positions with a wide variety of
titles, they mobilize people and resources to accomplish the work of organizations and
their subunits.
- A manager’s job is not about personal achievement – it’s about helping others do
their work

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Types of Manager in a traditionally structured organization

President Top
Managers
CEO, COO Divisionl/ Regional
VP’s Head/Plant
Middle Manager
Managers
Supervisor
Team Leader
First-Line Managers Worker
Line Manager
Operators
Laborer
Non-managerial Employees

Upside-down view of organization

Client/Customer is at the top of

the organization which signify
that the company values them
first and foremost

What do Managers do?

 Describing what managers do isn’t easy or simple. Just as no two organizations are
alike, no two managers’ jobs are alike. Despite this fact, management researchers have,
after many years of study, developed three specific categorization schemes to describe
what manager do: functions, roles and skills

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IB. Management Functions, Roles and Skills

Management Functions
Planning – defining goals, establishing strategy and developing plans to integrate and
coordinate activities.
Organizing – determining what needs to be done, how it will be done and who is to do
it.
Influencing – motivating, leading and any other actions involved in dealing with people.
Controlling – monitoring activities to ensure that they are accomplished as planned

Management Roles
 Refers to specific categories of managerial behavior. (Think of the different roles you
play – student, employee, student group member, sibling and so forth – and the different
behaviors you’ve expected to play in these roles).

Mintzberg’s Managerial Roles:

 Interpersonal roles – involve people (subordinates and persons outside the
organization) and other duties that are ceremonial and symbolic in nature

 Informational roles – involve collecting, receiving and disseminating information

 Decisional roles – entail making decisions or choices; involve using information to

make decisions to solve problems or address opportunities

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 Mintzberg’s Managerial Roles
Role Description Examples of Identifiable Activities
Interpersonal
Figurehead Symbolic head; obliged to perform a Greeting visitors; signing legal documents
number of routine duties of a legal or social
nature.
Leader Responsible for the motivation of Performing virtually all activities that involve
subordinates; staffing, training, and subordinates
associated duties.
Liaison Maintains self-develop network of outside Acknowledging mail; doing external board
contacts and informers who provide favors work; performing other activities that involve
and information. outsiders

Negotiator Responsible for representing the Participating in union contract negotiations

organization at major negotiations
Informational
Monitor Seeks and receives wide variety of internal Reading periodicals and reports; maintaining
and external information to develop personal contacts
thorough understanding of organization
and environment.
Disseminator Transmit information received from Holding informational meetings; making phone
outsiders or from subordinates to calls to relay information
members of the organization.
Spokesperson Transmits information to outsiders on Holding board meeting; giving information to
organization’s plans, policies, actions, the media
results, etc.
Decisional
Entrepreneur Searches organization and its environment Organizing strategy and review sessions to
for opportunities and initiates develop new programs
“improvement projects” to bring about
changes.
Disturbance Responsible for corrective action when Organizing strategy and review sessions that
Handler organization faces important, unexpected involve disturbances and crises
disturbances.
Resource Responsible for the allocation of Scheduling; requesting authorization;
Allocator organizational resources of all kinds – performing any activity that involves budgeting
making or approving all significant and the programming of subordinates’ work
organizational decisions

Management Skills
- A skill is an ability to translate knowledge into action that results in desired
performance.
- The most important managerial skills are those that allow managers to help other
become more productive in their work. Robert L. Katz concluded that managers needed
the following three essential skills:

 Technical Skill – job-specific knowledge and techniques needed to proficiently perform

specific tasks; expertise that could initially be acquired through formal education and
are further developed by training and job experience. These skills tend to be more
important for lower level of managers because they typically are managing employees
who are using tools and techniques to produce organization’s products or service the
organization’s customers.

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  Human Skill – ability to work well with other people individually and in a group. It
emerges in the workplace as a spirit of trust, enthusiasm and genuine involvement in
interpersonal relationships. These skills are consistently important across all levels of
management because managers deal directly with people. Manager with good human
skills are able to get the best out of their people. They know how to communicate,
motivate, lead and inspire enthusiasm and trust. A manager with good human skills
will have a high degree of self-awareness and a capacity to understand or empathize
with the feelings of others

 Conceptual Skill – ability to think and formulate (conceptualize) about abstract and
complex situations; it involves the ability to break down problems into smaller parts, to
see and analyze the relations between parts and to recognize the implications of any one
problem for other to solve complex problems. Using these skills managers must see the
organization as a whole, understanding the relationships among various subunits and
visualize how organization fits into broader environment. These skills are most
important at the top management level.

Thought to ponder…
 In today’s demanding and dynamic workplace, employees who want to be a valuable
assets to an organization must be willing to constantly upgrade their skills and take on
extra work outside their own specific job area. There’s no doubt that skills will continue
be an important way of describing what a manager does. .

How the Manager’s Job is changing?

- Managers have always had to deal with changes taking place inside and outside their
organization.

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IC. Current Trends and Issues

 Globalization
- Working with people from different cultures
- Coping with anti-capitalist backlash
- Movement of jobs to countries with low cost labor
 Ethics and Social Responsibility
- concerns for the environment, ethical and social responsibility issues, behavior of
employees and the changing needs of an increasingly global economy
 Workforce Diversity
- A worker force that is heterogeneous in terms of gender, race, ethnicity, age and other
characteristics that reflect differences
 Employment Values and Human Rights
- Employees’ right to privacy, due process protection against job discrimination and
freedom from sexual harassment
 Information and Technological Change
- Impact of emerging information and computer technology and the age of “knowledge
worker”
 Careers and Career Portfolios
- “portfolio of skills” that must be up-to-date and valuable to potential employers

The Reality of Work

 Another reason for studying management is the reality that for most of us, once we
graduate from college and begin our career, one will either manage or be managed. For
those who plan to be managers, an understanding of the management process forms the
foundations upon which to build your management skills. On the other hand, for those
of us who don’t see himself managing, one is likely to have to work with managers.
Also, assuming that we will have to work for a living and recognizing that we are very
likely to work in an organization, one probably have some managerial responsibilities
even if one is not a manager.

Reward and Challenges of Being a Manager

Rewards Challenges
 Create a work environment in which  Do hard work
organizational members can work to the  May have duties that are more clerical than
best of their ability managerial
 Have opportunities to think creatively and  Have to deal with a variety of personalities
use imagination  Often have to make do with limited
 Help others find meaning and fulfillment resources
in work  Motivate workers in chaotic and uncertain
 Support, coach and nurture others situations
 Work with a variety of people  Successfully blend knowledge, skills,
 Receive recognition and status in ambitions and experiences of a diverse
organization and community work group
 Play a role in influencing organizational  Success depends on others’ work
outcomes performance.
 Receive appropriate compensation in form
of salaries, bonuses and stock options
 Good managers are need by organizations
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  Managers often may have to deal with a variety of personalities and often have to make
to with limited resources. It can be a challenge to motivate workers in the face of
uncertainty and chaos. Managers may find it difficult to effectively blend the
knowledge, skills, ambitions and experiences of a diverse work group.
 Finally, as a manager, you’re not in full control of your destiny. Your success typically
is dependent upon, others’ work performance.

Becoming a Manager:
 Keep up with current business news.
 Read books about good and bad examples of managing.
 Remember that one of the things good managers do is to discover what is unique about
each person and capitalize on it.
 Keep in mind the simple advice that “management is about people” from Peter Drucker.
 Work on your “soft” skills – work ethics, communications, information gathering and
people skills. These are what employers cite as the most important factors for getting
jobs.
 Observe managers and how they handle people and situations.
 Talk to actual managers about their experiences – good and bad.
 Get experience in managing by taking on leadership roles in student organizations
 Start thinking about whether you’d enjoy being a manager.

ID. HISTORICAL BACKGROUND OF MANAGEMENT

“Learning the past, makes it easier for us to understand the present and visualize the future”

Learning Objectives
 To understand how management theories develop
 To understand the impact of the environment to management thinking
 To gain insights into new management approach

The historical context of management thinking can be described in the following

framework:
- The classical approaches
- The human resource/behavioral approaches
- The quantitative approaches
- The contingency approaches
- The system approach
- The learning organization approach
- The Quality Management approach

Early Management Thought

 Early ideas about management strategy
◦ Sun Tzu (770-476 B.C.), The Art of War
 Early ideas about leadership
◦ Nicolò Machiavelli (1469-1527), The Prince
 Early ideas about the design and organization of work
◦ Adam Smith, The Wealth of Nations
 division of labor
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Sun Tzu, Art of War
“Shang Chang Ru Zhan Chang”
“The marketplace is a battlefield”

Management Approaches and the Environment

1. The Classical Approach

The classical approach (ca 1890) to management is a management approach that
emphasizes organizational efficiency to increase organizational success.
Environment in ca 1890
• Industrial revolution
• Autocratic management was the norm
• “Science" as a solution to the inefficiencies and injustices of the period
• Idea of interchangeable parts

The Classical Approach

 Scientific Management
◦ Frederick W. Taylor
◦ Frank and Lillian Gilbreth
◦ Henry Gantt
 Bureaucratic Management
◦ Max Weber
 Administrative Management
◦ Henri Fayol

Scientific Management
 Advocates the use of scientific method to define the “one best way” to do a
job
 Involve a job science (job study) of how a job was perform to determine the
ways to improve it and find the best possible way to accomplish the work

Fredrick W. Taylor
 Mechanical engineer who had noticed that the cause of inefficiency in their
company (Midvale & Bethlehem Steel Company) is the used of different
techniques to do the same job. Workers did their jobs their own way without

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 clear and uniform specifications which leads to loose efficiency and
performed below their own capacities.

Taylor’s Four Principles of Scientific Management

1. Scientifically study each part of a task and develop the best method of performing
the task.
2. Carefully select workers and train them to perform the task by using the
scientifically developed method.
3. Cooperate fully with workers to ensure that they use the proper method.
4. Divide work and responsibility so that management is responsible for planning
work methods using scientific principles and workers are responsible for
executing the work accordingly.

Frank & Lilian Gilbreth

 Introduce the concept of motion study which evaluate and analyze workers’
movement and motion to eliminate unnecessary and/or redundant motions.

Bureaucratic Organization
 Rational and efficient form of organization founded on logic, order and
legitimate authority.
 Advocates applying rules rigidly within an administrative system to remedy
the prevalent deficiencies of the organization at that time that people were
in the position of authority not because of their job-related capabilities but
because of their social standing or privileged status in the society

Key Characteristics of Weber’s Ideal Bureaucracy

 Division(Specialization) of labor
 Formal rules and procedures
 Formal Selection
 Impersonality
 Well-defined hierarchy
 Career advancement based on merit (career orientation)

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 Administrative Principles
 Advocates documenting and understanding the experiences of successful
manager as basis to describe what good management practice is.

Fayol’s 14 Principles of Administrative Management

1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to the general interest
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability and tenure
13. Initiative
14. Esprit de corps

2. The Human Resource (Behavioral) Approach to Management

The behavioral approach (ca 1910) to management is a management approach
that emphasizes increasing organizational success by focusing on human
variables (human needs, work groups and the role of social factors in the
workplace) within the organization.

Early Advocates:

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Mary Parker Follet
 Advocates that organization should be based on a group ethic rather than
individualism which means that managers’ job was to harmonize and
coordinate group efforts. Manager and workers should view themselves as
partners.

Hawthorne Effect:
The discovery that paying special attention to employees motivates them
to put greater effort into their jobs. (From the Hawthorne management studies,
performed from 1924 – 1932 at Western Electric Company’s plant near Chicago)

Maslow’s Hierarchy of Needs

Implies that managers who can

Self- Actualization help his subordinates satisfy
their important need at work
will achieve productivity
Need for Self-Esteem

Need for Social Relations

Need for Security

Physiological Needs

McGregor’s Theory X and Theory Y

 Leaders and managers who hold Theory X assumptions believe that
employees are inherently lazy and lack ambition.
◦ A negative perspective on human behavior.
 Leaders and managers who hold Theory Y assumptions believe that most
employees do not dislike work and want to make useful contributions to the
organization.
◦ A positive perspective on human behavior.

Argyris’s Theory of Personality and Organization

 Belief that managers who treat people positively and as a responsible adults
will achieve productivity\
 Advice to expand job responsibilities, allow more task variety and adjust
supervisory styles to allow more participation and promote better human
relations.

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3. The Quantitative (Management) Science Approach
The management science approach (ca 1940) is a management approach that
emphasizes the use of the scientific method and quantitative techniques to
increase organizational success.
Environment in ca 1940
• Application of OR in solving complex problems in warfare (WWII)
• Significant technological and tactical breakthroughs
• Interest in manufacturing and selling after WWII

4. The Contingency Approach

The contingency approach (ca 70’s) to Management is a management approach
that Emphasizes that what managers do in practice depends on a given set of
circumstances--a situation.
Environment in ca1970’s”
• Emergence of new companies “Apple”
• Emergence of new products, “IBM PC”

5. The System Approach

The system approach (ca 50’s-60’s) to management is a management approach
based on general system theory--the theory that to understand fully the
operation of an entity, the entity must be viewed as a system. This requires
understanding the interdependence of its parts.
Environment in ca1950’s to 60’s”
• Growing quality consciousness
• Total Quality Management

6. The Learning Organization Approach

The learning organization approach to management is the management approach
based on an organization anticipating change faster than its counterparts to have
an advantage in the market over its competitors.

Managerial Approach to Learning Organization

 Managers must create an environment conducive to learning
 Managers encourage the exchange or information among organization
members
 Managers promote
◦ systematic problem solving
◦ Experimentation
◦ learning from experiences and past history
◦ learning from experience of others
◦ transferring knowledge rapidly throughout the organization

Building a Learning Organization

 System Thinking
◦ Every organization member understands his or her own job and how
the jobs fit together to provide finals products to the customer
 Shared vision
◦ All organization members have a common view of the purpose of the
organization and a sincere commitment to accomplish the purpose
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  Challenging of the mental models
◦ Organization members routinely challenge the the way business is
done and the thought processes people use to solve organizational
problems
 Team learning
◦ Organization members work together, develop solution to new
problems together, and apply the solutions together.
◦ Working as teams rather than than individuals will help the
organization gather collective force to achieve organizational goals
 Personal mastery
◦ All organization members are committed to gaining a deep and rich
understanding of their work
◦ Such an understanding will help organizations to reach important
challenges that confront them From “The Fifth Discipline” by Peter
Senge, 1990

Learning Organization Approach

System thinking

Building a
Personal mastery
Learning Shared Vision
Organization
Team Learning Challenging of
Mental models
7. Quality Management Approach
Focused on consistently meeting customer requirements and enhancing their
satisfaction. It is aligned with an organization's purpose and strategic direction
(ISO9001:2015). It is expressed as the organizational goals and aspirations,
policies, processes, documented information and resources needed to implement
and maintain it.

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 CHAPTER II - THE MANAGEMENT PROCESS

IIA. Planning
 Systematic development of action programs aimed at reaching agreed business
objectives by the process of analyzing, evaluating and selecting among the opportunities
which are foreseen.
 Scheme to achieve objective by;
- Deciding where you want to go
- Deciding how best to go about it
Things to keep in mind when planning:
- Planning should accomplish as effectively and efficiently as possible the present needs
or task while responding to changing conditions.

Planning is the foundation of Management Process

1. Fundamentals of Planning

Purpose of Planning
 Provides direction
 Reduces uncertainty
 Minimize waste and redundancy
 Establishes goals or standards used in controlling

Indicators of Poor and Good Planning

 Delivery not met  Jobs turned out on time

 Machines idle
 Material wasted
 Some machines doing jobs that should
be done by smaller machines
 Some men overworked, other men
underworked
 Skilled workers doing unskilled work
 Men fumbling on jobs for which they
have not been trained
 Quarrelling, bickering, buck-passing
and confusion
 Good relationship with other
departments
 People using their highest skills
 Working knowing how their jobs fit into
the total pattern
 Machines doing their proper jobs
 Equipment in good shape
 Materials available
Waste kept to a minimum
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Benefits of Planning
 More focus and flexibility
- Organization with focus – knows what it does best, knows the needs of its
customers and knows how to serve them well
- Individual with focus – knows where he wants to go in a career or situation and
is able to retain that objective even in difficult situation
- Organization with flexibility – able to change and adapt to shifting circumstances
and operates with and orientation toward the future rather than the past or
present
- Individual with flexibility – factors into career plans the problems and
opportunities posed by new and developing circumstances personal and
organizational
 Action Oriented
- avoid the complacency trap of simply being carried along by the flow of events
or being distracted by successes or failures of the moment
 Results orientated – creating a performance-oriented sense of direction
 Priority oriented – making sure that the most important things get first attention
 Advantage oriented – ensuring that all resources are used to best advantage
 Change oriented – anticipating problems and opportunities so they can be dealt best.
 Improved Coordination
 Better Control
 Better Time Management

Planning Process
 efine your objectives
 Determine where you stand vis-à-vis in your objectives
 Develop premises regarding future conditions
 Analyze possible action alternatives, choose the best among them and decide how to
implement
 Implement the plan and evaluate the results

Goals and Plans in Planning

 Goal/s
- a.k.a objectives are desired outcomes
- guide management decisions and form the criterion against which actual work
being done is measured
- Foundation of planning
 Plan/s
- Documents that outline how goals are to be met
- includes resource allocation, schedules and other necessary data to accomplish
the goals

Types of Goal
 Financial Goal
 Strategic Goal
 Stated Goal
 Real Goal

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 Characteristics of Well-Designed Goals
 Written in terms of outcomes rather than actions
 Measurable and quantifiable
 Clear as to a time frame
 Challenging yet attainable
 Written down
 Communicated to all necessary organizational members

2. Approaches to Planning

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 Approaches to Planning
 Top-down - top management to lower management level
 Bottom-up – initiated from the lower management level and passed up to the top
management
 Inside-out - focuses on the internal strength; that determine “how” things could be done
better
 Outside-in – focuses on the external strength – finding opportunity from the
environment to pursue it to best advantages
 Traditional – performed entirely by the top management
 Participatory – involve organizational members in the planning process

3. Planning Tools & Techniques

 Environmental Scanning
- Gathering and screening of information to anticipate and interpret changes in the
environment
 Forecasting
- predict future environmental situations that might influence the operation of the
organization
 Benchmarking
- Search for the best practices among competitors or non-competitors that lead to
superior performance

4. Forecasting Methods
A. Qualitative Forecasting – uses judgment and opinions of knowledgeable individuals to
predict outcomes.
a. Judgmental forecasts – rely on the analysis of subjective inputs obtained from
various sources such as consumer surveys, the sales staff, managers and
executives and panels of experts.
b. Delphi Method – involves circulating a series of questionnaires among individuals
who possess the knowledge and ability to contribute meaningfully. Responses
are kept anonymous which tends to encourage honest responses that aim to
achieve a consensus forecast.

B. Quantitative Forecasting – applies set of mathematical rules to a series of past data to

predict outcomes.

Technique Description Application

Qualitative
Jury of opinion Combines and average the Polling the company’s human resource
opinions of experts managers to predict next year’s college
recruitment needs
Sales Force Combines estimates from field Predicting next year’s sales of industrial
composition sales personnel of customer’s lasers
expected purchase
Customer Combines estimates from Surveying major car dealers by a car
Evaluation established customers’ purchases manufacturer to determine types and
quantities of products desired

23
Quantitative
Time series Fits a trend line to a Predicting next quarter’s sales on the basis
analysis mathematical equation and of 4 years of previous sales data
projects into future by means of
this equations
Regression Predicts one variable on the Seeking factors that will predict a certain
models basis of known or assumed level of sales (ex. Price, advertising
other variables expenditure, etc.)
Economic Models Uses a set of regression Predicting change in car sales as a result of
equations to simulate segments changes in tax law
of the economy
Economic Uses one or more economic Using change in GNP to predict
indicators indicators to predict a future discretionary income
state of the economy
Substitution Uses mathematical formula to Predicting the effect of DVD players on the
effect predict how, when and under sale of VHS players
what circumstances a new
product or technology will
replace an existing one

Forecast based on Time Series (Historical Data

 This approach exemplifies forecasts that use historical or time series, data with the
assumption that the future will be like the past

A. Forecasting Method for Averaging

- Naïve forecasting
- Moving Average
- Weighted Moving Average
- Exponential Smoothing

B. Forecasting Method for Trend

- Linear Equation

Forecasting Method for Averaging

 Naïve forecasts – the forecast for any period equals the previous period’s actual
value.
 Moving Average – technique that averages a number of recent actual values, updated
as new values become available. The formula is:
where:
n

A
i = refers to the most recent period
n = number of periods (data points) in
i the moving average
A = actual value with age I

MA n = i=1 i
MA = forecast

n
24
  Weighted Moving Average – almost similar to moving average, except that it assigns
more weights to the most recent values in a time series

WMA = ∑WiAi
where:
w = assigned weight for each A
i i
A = actual value with age i
i

 Exponential Smoothing – a sophisticated weighted moving averaging method that is

still relatively easy to use and understand. Each new forecast is based on the previous
forecast plus a percentage of the difference between that forecast and the actual value
of the series at that point. That is:

Ft = Ft - 1 + α(At - 1 - Ft - 1)
Where:
F = forecast for period t
t
F = forecast for period t-1
t-1
α = smoothing constant
A = actual value for period t-1
t-1

Example 3.1
National Mixer Inc., sells can openers. Monthly sales for a seven-month period were
as follows:
Month Feb. Mar. Apr. May Jun. Jul. Aug.
Sales 19 18 15 20 18 22 20
(000
units)

Forecast September sales volume using each of the following:

a. Naïve approach
b. A five month moving average
c. A weighted average using 0.60 for August, 0.30 for July and 0.10 for June
d. Exponential smoothing with smoothing constant equal to 0.20, and assuming a March
forecast of 19(000)

25
Example 3.2
Given the following data:
Prepare a forecast for the next period using each of the ff. approaches:
Period 1 2 3 4 5
No. of 60 65 55 58 64
Complaints

a. Naïve approach
b. A five month moving average
c. A weighted average using 0.60 for period 5, 0.30 for period 4 and 0.10 for period 3
d. Exponential smoothing with smoothing constant equal to 0.20, and assuming a period
2 forecast of 65

Forecasting Method for Trends

 The trend component of a time series reflects the effects of any long-term factors on the
series. Analysis of trend involves developing an equation that will suitably describe
trend (assuming that trend is present in the data. A linear equation in the form:

where:
y = a + bt
t n ty -  t y
b=
n t2 -   t 
t = specified number of time periods from 2
t=0

 y - b t
y = forecast for period t
t
a = value of yt at t=0 a=
b = slope of the line n
Example 3.3
Calculator sales for a California-based firm over the last 10 weeks are shown in the
following table. Determine the equation of the trend line and predict sales for weeks
11 and 12

Week 1 2 3 4 5 6 7 8 9 10
Unit 700 724 720 728 740 742 758 750 770 775
Sales

26
Associative Forecasting Method
 The essence of associative technique is the development of an equation that summarizes
the effect of predictor variables. The primary method of analysis is known as regression

y x = a + bx n xy   x y
where:
b
x = predictor (independent) variable
n x 2  ( x) 2
y = predicted (dependent) variable
x
a = value of y when x=0
x a=
 y - b x
b = slope of the line n
Correlation
 measures the strength and direction of relationship between two variables
n (  xy )   x y
r 
[n( x 2 )  ( x ) 2 ][ n (  y )  ( 
2
y)2 ]

Interpretation:
+1.00 indicates that changes in one variable are always matched by changes in the other
-1.00 indicates that increases in one variable are matched by decreases in the other a
correlation close to zero indicate little linear relationship between two variables

Example 3.4
Healthy Hamburgers has a chain of 12 stores in Northern Illinois. Sales figures and
profits for the stores are given (in millions of dollars) in the following table. Obtain a
regression line for the data and predict profit for a store assuming sales of $10M

Sales 7 2 6 4 14 15 16 12 14 20 15 7
Profit 0.15 0.10 0.13 0.15 0.25 0.27 0.24 0.20 0.27 0.44 0.34 0.17

27
 5. Techniques for Allocating Resources
 Budgeting – process of making a numerical plan for allocating resources to specific
activities

Suggestions for Improving Budgeting

 Collaborate and communicate.
 Be flexible.
 Goals should drive budgets – budgets should not determine goals.
 Coordinate budgeting throughout the organization.
 Use budgeting/planning software when appropriate
 Remember that budgets are tools
 Remember that profits result from smart management, not because you budgeted
from them.

6. Scheduling Methods

 Scheduling – process of formulating a detailed listing of activities that must be

accomplished to attain an objective. It’s detailing what activities to be done, the order
in which they are to be completed, who is to do each and when they are to be completed.
Two popular scheduling methods are Gantt Chart and PERT-CPM
 Breakeven analysis – technique for identifying the point at which total revenue is just
sufficient to cover total costs

Gantt Charts
 A scheduling device developed by Henry Gantt that shows actual and plan output over a
period of time.
 It is composed of a bar chart with time on the horizontal axis and the resource/activity
to be scheduled on the vertical axis.
 A scheduling device developed by Henry Gantt that shows actual and plan output over a
period of time. It is composed of a bar chart with time on the horizontal axis and the
resource/activity to be scheduled on the vertical axis

28
Program Evaluation Review Technique and Critical Path Method (PERT-CPM)
 Flowchart diagram that depicts the sequence of activities needed to complete a project
and the time or cost associated with each activity.
 It is the most widely used method for planning and coordinating large-scale projects
 using this method managers are able to obtain:
 A graphical display of project activities.
 An estimate of how long the project will take.
 An indication of which activities are the most critical to timely project
completion.
 An indication of how long any activity can be delayed without lengthening the
project.

PERT-CPM Procedure:
1. Develop a list of activities that make up the project.
2. Determine the immediate predecessors for each activity in the project.
3. Estimate the completion time for each activity.
4. Draw the project network depicting the activities and immediate predecessors listed in
step 1 and 2.
5. Use the project network and the activity time estimates to determine the earliest stat
and the earliest finish time for each activity by making a forward pass through the
network. The earliest finish time for the last activity in the project identifies the total
time required to complete the project.
6. Use the project completion time identified in step 5 as the latest finish time for the last
activity and make a backward pass through the network to identify the latest finish time
for each activity.
7. Use the difference between the latest start time and the earliest start time for each
activity to determine the slack (float) for the activity.
8. Find the activities with zero slack, these are the critical path activities.
9. Use the information from step 5 to 6 to develop the activity schedule for the project

Example 3.5
 The owner of the Western Hills Shopping Center is planning to modernize and expand
the current 32-business shopping complex. The project is expected to provide room for
8 to 10 new businesses. Financing has been arranged through a private investor. All that
remains is for the owner of the shopping center to plan, schedule and complete the
expansion project. The table below shows the pertinent information for the project

Activity Activity Description Immediate Activity Time

Code Predecessor (in weeks)
A Prepare architectural drawings - 5
B Identify potential new tenants - 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D,F 14
H Finalize contracts with tenants B,C 12
I Tenants move in G,H 2

29
Activity Description 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Prepare architectural
drawings
Identify potential new
tenants
Develop prospectus for
tenants
Select contractor
Prepare building permits
Obtain approval for
building permits
Perform construction
Finalize contracts with
tenants
Tenants move in

7. Criticisms of Planning
 Planning may create rigidity
 Planning can’t be developed for a dynamic environment
 Formal plans can’t replace intuition and creativity
 Planning focuses managers’ attention on today’s competition, not on tomorrow’s
survival
 Formal planning reinforce success, which may lead to failure
 Just planning isn’t enough.

30
IIB. Organizing
 process of arranging people and other resources to work together to accomplish a goal
identify who is to do what, who is in charge of whom and how different people and parts
of the organization are related to one another

1. Fundamentals of Organizing

What does Organizing do?

• Divide the work
• Arrange resources
• Coordinate activities

Why do Mangers organize?

• Organizing creates and maintains relationships between all organizational
resources by indicating which resources are to be used for specified activities
and when, where and how they are to be used.

Purposes of Organizing
• Divides work to be done into specific jobs and department
• Assigns tasks and responsibilities associated with individual jobs
• Coordinates diverse organizational tasks
• Clusters jobs into units
• Establishes relationships among individuals, group and departments
• Establishes formal lines of authority
• Allocate and deploys organizational resources.

How do Managers Organize?

31
Concept of the Organization
• Herd Concept
• Man-to-Man Concept
• Social Concept

Herd Concept
• premised on the idea that people, especially the working class, are faceless
automatons that could be coaxed and coerced to perform and accomplish a
definite goal through the use of authoritarian measures
• the subordinates follow the leader who wields exclusive power to decide and
enforce unquestionable obedience in his subordinates
• the rule is “obey now, question later”
• prevalent in the military organizations

Man-to-Man Concept
• the organization sees the individual working in terms of direct personal relation
with his superior
• There is a man-to-man relationship between the subordinate and the superior as
a result of direct delegation of authority and definition of the area of
responsibility of the superior to the subordinate
• flow of communication is strictly up and down between the subordinate and the
superior
• There is no horizontal flow of communication among peers on the same level of
management

Social Concept
• viewed the company organization as a pattern of group systems
• the superior and subordinates are members of a team
• relationship is no longer man-to-man but man-to-his-group

Organizational structure
• Formal arrangement of jobs within an organization.

Organizational design
- A process that involves decisions about six key elements: work specialization,
departmentalization, chain of command, span of control, centralization and
decentralization and formalization

Elements of Organizational Design

• Work Specialization
- Dividing work activities in an organization into separate job tasks.
• Departmentalization
- Process of grouping together people and jobs into work units

32
Types of Organizational Structure

• Functional Department/Structure
– Groups together people with similar skills who perform similar tasks.
Members of functional structure share technical expertise, interests and
responsibilities

• Divisional Department/Structure
- Groups together people who work on the same product, work with
similar customers or who work in the same area or processes.
- They are especially popular among organizations with diverse
operations that extend across many products, territories, customers and work
processes

• Matrix Department/Structure
- combines functional and divisional approaches to emphasize project or
program teams.
- It’s an organizational structure that assigns specialist from different
functional departments to work with one or more projects or organizational
activities

33
 • Chain of Command (a.k.a. scalar relationship)
- Line of authority extending from upper organizational levels to the
lowest levels, which clarifies who report to whom.
- It helps employees answer questions such as “Who do I go to if I have
problem?” or “To whom am I responsible?”

• Span of Control
- The number of employees a manager can efficiently and effectively
handled and managed.
- It is sometimes called span of management, span of authority, span of
supervision and span of responsibility.
- The more individuals a manager supervises, the greater the span of
management and the fewer individuals a manager supervises, the smaller the
span of management

• Flat Organization
- Characterized by few levels and relatively broad span of management.

• Tall Organization
- Characterized by many levels and a relatively narrow span of
management

• Centralization and Decentralization

- Describes the degree to which decision making is concentrated.
- If it is done mostly by the upper levels of management (centralized) or
if the lower level employee provides input or could actually make decisions
(decentralized)

Factors that influence the Amount of Centralization and Decentralization

More Centralization More Decentralization

 Environment is stable.
 Lower-level managers are not as
capable or experienced at making
decisions as upper-level
managers.
 Lower-level managers do not
want to have a say in decisions
 Decisions are relatively minor.
 Organization is facing a crisis or
risk of company failure.
 Company is large.
 Effective implementation of
company strategies depends on
how managers retaining say over
what happens.
 Environment is complex,
uncertain.
 Lower-level managers want a
voice in decisions.
 Decisions are significant.
 Corporate culture is open in
allowing managers to have a say
in what happens.
 Company is geographically
dispersed.
 Effective implementation of
company strategies depends on
having involvement and flexibility
to make decisions.

34
 Formalization
– refers to how standardized an organization’s jobs are and the extent to which
employee behavior is guided by rules and procedures.
- If the job is highly formalized, then the person doing that job has little
discretion over what is to be done, when it’s to be done and how he or she does it.

2. The Concept of Delegation and Empowerment

Delegation is the actual process of assigning job activities and corresponding authority to
specific individuals within the organization. The process of delegation is the core of any
organization

Aspects of Delegation
• Responsibility – refers to the mental and physical activities which must be
performed to carry out a task.
• Authority – the sum of powers and rights entrusted to make possible the
performance of the work delegated.
• Accountability – the answerability and the obligation to carry on the delegated
responsibility and to exercise the authority granted to the subordinate for the proper
performance of the mission.

What is Empowerment?
- reinforcing subordinates’ sense of confidence

Reason for Empowering Subordinates:

To avoid low self-efficacy – the conviction among people that they cannot successfully
perform their jobs or make meaningful contributions.

Five Broad Approaches to Empowerment:

• Helping employees achieve job mastery (giving proper training, coaching and guided
experience that will result in initial success)
• Allowing more control (giving them discretion over job performance and then
holding them accountable for outcomes)
• Providing successful role models (allowing them to observe peers who already
perform successfully on the job)
• Using social reinforcement and persuasion (giving praise, encouragement, and
verbal feedback designed to boost self-confidence)
• Giving emotional support (providing reduction of stress and anxiety through better
role definition, task assistance and honest caring)

3. Organizational Design

Organizational Design Decision

• Organizations don’t and won’t, have identical structures. A company with 50
employees isn’t going to look like one with 50,000 employees. But even
organizations of comparable size don’t necessarily have similar structures. What
works for one organization may not work for another

35
Generic Models of Organizational Design

• Mechanistic Organization
- Rigid and tightly controlled structure.
- It is characterized by high specialization, rigid departmentalization, narrow spans
of control, high formalization, a limited information network (mostly downward
communication) and little participation in decision making by lower-level employees.

• Organic Organization
- Highly adaptive and flexible where jobs can change rapidly as needs require.
- It may have specialized jobs, but those jobs are not standardized.
- Employees are highly trained and empowered to handle diverse jobs activities and
problems and these organizations frequently use employee teams.

Woodward’s Findings on Technology, Structures and Effectiveness

Unit production Mass Production Process Production
Structural Low vertical Moderate vertical High vertical
Characteristics differentiation differentiation differentiation
Low horizontal High horizontal Low horizontal
differentiation differentiation differentiation
Low formalization High formalization Low formalization
Most effective Organic Mechanistic Organic
structures

Traditional Organizational Designs

• Simple Structure – organizational design with low departmentalization, wide spans of
control, authority centralized in a single person and little formalization that is
commonly used by small businesses in which the owner and manager are one and the
same
• Functional Structure - groups similar or related occupational specialties together. It’s
a functional departmentalization applied to the entire organization.
• Divisional Structure – made up of separate business units or divisions. In this
structural design, each unit or division has limited autonomy, with a division manager
responsible for performance and who has strategic and operational authority over his
or her unit

Contemporary Organizational Designs

• Team Structure – the entire organization is made of work groups or teams.
• Matrix Structure – assigns specialist s from different functional departments to work
on one or more projects
• Project Structure – employees continuously work on projects. It has no formal
departments that employees return to at the completion of a project. Instead, employees
take their specific skills, abilities and experiences to other projects.
• Boundary less Organization – this design is not defined by or limited to, the horizontal,
vertical and horizontal boundaries imposed by a predefined structure.
– Internal Boundaries – horizontal boundaries imposed by work specialization
and departmentalization and vertical boundaries that separate employees into
organizational levels and hierarchies.

36
 – External Boundaries – boundaries that separate the organization from its
customers, suppliers and other stakeholders.

Types of Organizational Boundary

 Virtual Organization – an organization that consists of a small core of full-time
employees and that hires outside specialists temporarily as needed to work on projects.
• Network Organization (a.k.a. modular organization) – an organization that uses its
own employees to do some work activities and networks of outside suppliers to provide
other needed products component or work processes.

4. Organizational Design Challenges

• Keeping employees connected
• Building learning organization
• Managing global structural issues

5. Organizing Trends in the Modern Workplace

• Shorter Chains of Command
• Less Unity of Command
• Wider Span of Control
• More Delegation and Empowerment
• Decentralization with Centralization

A Final Thought:

No matter what structural design managers choose for their organizations, the design
should help employees do their work in the best – most efficient and effective way they can.
The structure should aid and facilitate organizational members as they carry out the
organization’s work. After all, the structure is simply a means to an end.

37
IIC. Influencing
 The process of guiding the activities of organization members in appropriate directions
 Involves focusing on organization members as people and dealing with such issues as
morale, arbitration of conflicts, and the development of good working relationships
 Primary determinant of how successful a manager will be
 Involves the performance of four management activities:
o Leading
o Motivating
o Considering Groups
o Communicating

1. Fundamentals of Influencing

Leading Vs. Managing

Leading
• Process of inspiring others to work hard to accomplish important tasks. It builds
the commitment and enthusiasm needed for people to apply their talents fully to
help accomplish plans
• it’s the process of influencing a group to achieve goals

Managing
• skillful handling or use of something such as resources

Leadership & Power

Leadership
• The functions of effective leadership lie in the way a manager uses power to
influence the behavior of other people
Power
• Is the ability to get someone else to do something you want done or to make
things happen the way you want

Power classification based on source

Sources of Power
Power of the POSITION Power of the PERSON
Based on things managers can offers to Based on the way managers are viewed
other by other
Rewards: “If you do what I’ll ask, I’ll Expertise – as a source of special
give a reward.” knowledge and information
Coercion: “If you don’t do what I ask,
I’ll punish you
Legitimacy: “Because I am the boss, Reference – as a person with whom
you must do as I ask.” others like to be identify

38
 Position Power
- One important source of power is a manger’s official status, or position, in the
organization’s hierarchy of authority. The three bases of position power are:

Reward power - is the ability to influence through rewards, It is the ability to offer
something of value — a positive outcome, as a means of influencing the behavior of
other people.
Coercive power - is the capacity to punish or withhold positive outcomes as a means of
influencing other people.
Legitimate power - is the capacity to influence other people by virtue of formal
authority or the rights of office.

Personal Power
- Another source of power lies in the individual manager and the unique personal
qualities he/she brings to a leadership situation. Two bases of personal power are:

Expert power - is the capacity to influence other people because of specialized

knowledge.
Referent power - is the capacity to influence other people because of their desire to
identify personally with you. It is a power derived from charisma or interpersonal
attractiveness.
Notes:
It is important to remember that position power alone is often insufficient to achieve
needed influence. This is particularly true in influencing the behavior of peers and
superiors in the organization. Four points to keep in mind are:
There is no substitute for expertise
Likeable personalities are important
Effort and hard work breed respect
Personal behavior must support expressed values.

2. Leadership

Seven Traits Associated with Leadership by: Behavioral Theorist

a. Drive
Leaders exhibit a high effort level. They have relatively high desire for
achievement; they are ambitious; they have a lot of energy; they are tirelessly
persistent in their activities and they show initiative.

b. Desire to Lead
Leaders have a strong desire to influence and lead others. They demonstrate the
willingness to take responsibility

c. Honesty and integrity

Leaders build trusting relationships between themselves and followers by being
truthful or non-deceitful and by showing high consistency between work and deed.

39
 d. Self-confidence
Followers look to leader for an absence of self-doubt. Leaders, therefore, need
to show self-confidence in order to convince followers of the rightness of their goals
and decisions

e. Intelligence
Leaders need to be intelligent enough to gather, synthesize, and interpret large
amount of information, and they need to be able to create visions, solve problems,
and make correct decisions

f. Job-relevant knowledge
Effective leaders have a high degree of knowledge about the company, industry
and technical matters. In-depth knowledge allows leaders to make well-informed
decisions and to understand the implications of those decisions

g. Extraversion
Leaders are energetic, lively people. They are sociable, assertive and rarely
silent or withdrawn.

Leadership Style by Behavioral Theorists

a. Democratic Style– it involve employees in decision making, delegate authority,

encourage participation in deciding work methods and goals, and use feedback as an
opportunity for coaching employees.

b. Autocratic Style – it is tended to centralize authority, dictate work methods, make

unilateral decisions and limit employee participation

c. Laissez-faire Style – it gave the group complete freedom to make decisions and
complete work in whatever way it saw fit.

d. Consideration Style – job relationships is characterizes by mutual trust and respect

for group member’s ideas and feelings

e. Initiating Structure – structuring work and work relationships to meet job goals

f. Employee-Oriented – emphasized interpersonal relationships and taking care of

employees needs

g. Production-Oriented – emphasized technical or task aspects of job to increase

production output

3. Contemporary Views on Leadership

a. Transactional Leaders
- lead primarily by using social exchanges (or transactions);
- guide and motivate followers to work toward established goals by exchanging
rewards for their productivity

40
 b. Transformation Leaders
- Stimulates and inspires (transforms) followers to achieve extraordinary
outcomes;
- they pay attention to the concerns and developmental needs of individual
followers;
- they change follower’s awareness of issues by helping those followers look at old
problems in new ways;
- they are able to excite, arouse and inspire followers to put out extra effort to
achieve group goals

c. Charismatic-Visionary Leaders
- an enthusiastic, self-confident leader whose personality and actions influence
people to behave in certain ways;
- They have vision, are able to articulate that vision, are willing to take risks to
achieve that vision, are sensitive to both environmental constraints and follower
needs and exhibit behaviors that are out of the ordinary.
- It is most appropriate when the follower’s task has an ideological purpose or
when the environment involves a high degree of stress and uncertainty. This
explains why they often surface in politics, religion or wartime or when a
business firm is starting up or facing survival crisis.
- Ex. Martin Luther King Jr. & Steve Jobs

4. Leadership Issues in the 21st Century

 Managing power
 Developing Trust
 Providing ethical leadership
 Empowering employees
 Gender differences and leadership
 Cross-cultural leadership

Selected Cross-cultural Leadership Findings

 Korean leaders are expected to be paternalistic toward employees
 Arab leaders who show kindness or generosity without being asked to do so are
seen by other Arabs as weak
 Japanese leaders are expected to be humble and speak frequently
 Scandinavian and Dutch leaders who single out individuals with public praise
are likely to embarrass, not energize, those individuals.
 Effective leaders in Malaysia are expected to show compassion while using more
of an autocratic than participative style.
 Effective German leaders are characterized by high performance orientation,
low compassion, low self-protection, low team orientation, high autonomy and
high participation.

41
 5. Motivation

“Motivation means a process of stimulating people to action to accomplished desired

goals” By William G. Scout
- inner state that causes an individual to behave in a way that ensures the
accomplishment of some goal
- explains why people act as they do

Importance of Motivation
Helps in satisfying needs of the Employees
Change the negative attitude to Positive attitude
Reduce labor turnover
Reduce absenteeism
Helps in introducing changes
Improves level of efficiency of employees
Creating friendly and supportive relationship

Types of Motivation

a. Positive motivation
- Positive motivation induces people to do work in the best possible manner and to
improve their performance.
- Positive motivation is the type of motivation a person feels when he expects a certain
reward.
- An example of Positive motivation :
- when a Boss tells his subordinate , "if you achieve the target on the time I will give you
promotion “

b. Negative motivation
- Negative incentives are those whose purpose is to correct the mistakes or defaults of
employees.
- Negative incentive is generally resorted to when positive incentive does not works and
a psychological set back has to be given to employees.
- An example of Negative motivation :
- When a Boss tells his subordinate , "if you do not achieve the target on the time I will
give you demotion”

c. Reward
- work outcome of positive value to the individual
- Extrinsic rewards - are valued outcomes given to someone by another person. Common
workplace examples are pay bonuses, promotions, time- off, special assignments,
awards, verbal praise, and the likes.
- Intrinsic rewards - occur naturally during job performance. Some examples are the
feeling of competency, personal development, and the likes.

42
d. Incentive
- Incentives refers to all those measures which are used to motivate people for improving
their performance.
- The need of incentives can be many:-
- To increase productivity,
- To shape the behavior or outlook of subordinate towards work,
- To inculcate zeal and enthusiasm towards work

•Pay and allowances

Extrinsic Factor •Productivity linked wage
incentives
(Financial •Bonus
incentives/Hygiene •Profit sharing
factors •Stock option
•Retirement benefits

•Career advancement opportunity

•Job enrichment
Intrinsic factor(Non •Employee recognition program
financial •Job security
incentives/Motivators •Employee participation
•Organizational climate
•Employee empowerment

43
Motivation Theories

a. Fear and Punishment Theory

- Managers developed a strategy of forcing people to work by threatening to punish or
dismiss them or cut their rewards if they did not work well.
- This philosophy is characterized by thinking of aggressiveness and authorities managers
- There was a tight control and rigid supervision over workers.

b. Reward Theory
- This theory tried to establish a direct relationship between efforts and rewards.
- Bases of Piece rate system of wages
- Based on the standard manager should decide on degree of rewards and penalties

c. Carrot and Stick Theory

- This theory suggest a combination of both rewards and penalties for motivation
- This is based on the strategy of putting carrot in the front of the donkey and hitting it
with the stick from behind so it has to run
- Carrot refers to the incentives
- Stick refer to the penalties

d. Maslow’s Theory of Motivation

- Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943.
- Maslow was of the view that needs have priority, i.e., needs are satisfied in an order.
- As soon as the lower level needs are satisfied. Those on the next higher level emerge.
- Thus, he considered an individual's motivation behavior as a predetermined order of
needs.

Hierarchy of Needs Theory

Self- Desire for gaining more knowledge,

Actualization social- service, creativity and being
need aesthetic

Reputation, prestige, power, status,

Esteem Needs recognition and respect of others.

Needs for belongingness, friendship, love,

Social needs
affection, attention and social acceptance.

Safety needs Security of job and need for a predictable,

secure and safe environment

Food, water, air, shelter, sleep,

Basic/ Physiological Needs
thirst, etc.

44
e. McGregor :Theory X and Theory Y
- In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects
of human behavior at work
- According to McGregor, the perception of managers on the nature of individuals is based
on various assumptions.

Theory X and Theory Y (Douglas McGregor)

Assumptions of Theory X
• An average employee does not like work and tries to escape it whenever possible.
• He lacks ambition and dislikes responsibility
• Since the employee does not want to work, he must be persuaded, compelled, or
warned with punishment so as to achieve organizational goals.
• A close supervision is required on part of managers. The managers adopt a more
dictatorial style.

Assumptions of Theory Y
• Employees can perceive their job as relaxing and normal.
• Employees no longer need to be threatened and coerced to work, but they have self-
direction and self-control, they are dedicated and sincere to achieve the
organizational objectives.
• If the job is rewarding and satisfying, then it will result in employees’ loyalty and
commitment to organization.
• The employees have skills and capabilities. Their logical capabilities should be fully
utilized. In other words, the creativity, resourcefulness and innovative potentiality
of the employees can be utilized to solve organizational problems.

45
f. Herzberg’s Two-Factor Theory of Motivation
- In 1959, Frederick Herzberg, a behavioral scientist proposed a two-factor theory or the
motivator-hygiene theory.
- According to Herzberg, there are some job factors that result in satisfaction while there
are other job factors that prevent dissatisfaction.

Hygiene factors
• Hygiene factors are those job factors which are essential for existence of motivation
at workplace.
• These do not lead to positive satisfaction for long-term. But if these factors are
absent / if these factors are non-existent at workplace, then they lead to
dissatisfaction.
• Hygiene factors are also called as dissatisfies or maintenance factors as they are
required to avoid dissatisfaction. These factors describe the job environment /
scenario.

Motivational factors
• The motivational factors yield positive satisfaction. These factors motivate the
employees for a superior performance.
• These factors are called satisfiers.
• These are factors involved in performing the job. Employees find these factors
intrinsically rewarding.
• The motivators symbolized the psychological needs that were perceived as an
additional benefit.

Recognition- The employees should be praised and recognized for their

accomplishments by the managers.

Sense of achievement- The employees must have a sense of achievement. This

depends on the job. There must be a fruit of some sort in the job.

Growth and promotional opportunities- There must be growth and advancement

opportunities in an organization to motivate the employees to perform well.

Responsibility- The employees must hold themselves responsible for the work. The
managers should give them ownership of the work. They should minimize control
but retain accountability.

Meaningfulness of the work- The work itself should be meaningful, interesting and
challenging for the employee to perform and to get motivated.

46
David McClelland’s Theory of Needs

nPow

nAch nAff

David McClelland and his associates proposed McClelland’s theory of Needs /

Achievement Motivation Theory.

This theory states that human behavior is affected by three needs –

a. Need for achievement is the urge to excel, to accomplish in relation to a set of

standards, to struggle to achieve success.
b. Need for power is the desire to influence other individual’s behavior as per your
wish. In other words, it is the desire to have control over others and to be influential.
c. Need for affiliation is a need for open and sociable interpersonal relationships. In
other words, it is a desire for relationship based on co-operation and mutual
understanding.

6. Groups, Teams and Corporate Culture

What is Group?
- any number of people who (1) interact with one another, (2) are psychologically aware
of one another, and (3) perceive themselves to be a group
- are characterized by frequent communication among members over time and a size
small enough to permit each member to communicate with all other members on a face-
to-face basis
- As a result of this communication, each group member influences and is influenced by
all other group members

Reasons why managers should study groups

- Groups exist in all kinds of organization.
- Groups inevitably form in all facets of organizational existence,
- Groups can cause either desirable or undesirable consequences within the organization.
- An understanding of groups can help managers raise the probability that the groups
with which they work will cause desirable consequences within the organization.

47
Kinds of Groups in Organizations
A. Formal Group is a group that exists in an organization by virtue of management
decree to perform tasks that enhance the attainment of organizational objectives.
a. Command group is a formal group that is outlined in the chain of command
on an organizational chart. They typically handle routine organizational
activities.
b. Task group is a formal group of organization members who interact with one
another to accomplish non-routine organizational tasks. Members of any one
task group can and often do come from various levels and segments of an
organization
c. Committee is a group of individuals charged with performing some type of
specific activity and is usually classified as a task group. From a managerial
viewpoint, there are several uses for establishing committees in an
organization:
d. Work team is a task group used in organizations to achieve greater
organizational flexibility or to cope with rapid growth

B. Informal Group is a collection of individuals whose common work experiences

result in the development of a system of interpersonal relations that extend beyond
those established by management.
a. Interest group is an informal group that gains and maintains membership
primarily because of a common concern members have about a specific issue.
b. Friendship group is an informal group that forms in organizations because
of the personal affiliation members have with one another.

What is Team?
- a group whose members influence one another toward the accomplishment of (an)
organizational objective(s)
- group qualifies as a team only if its members focus on helping one another to accomplish
organizational objectives

Organizational teams take many different forms

A. Problem-solving team is an organizational team set up to help eliminate a

specified problem within the organization.
B. Self-managed team is an organizational team established to plan, organize,
influence, and control its own work situation with only minimal direction from
management
C. Cross-functional team is an organizational team composed of people from
different functional areas of the organization who are all focused on a specified
objective

What is Corporate Culture?

- set of shared values and beliefs that organization members have regarding the
functioning and existence of their organization
- type of corporate culture that is present in any organization can be discovered by
studying that organization’s special combination of status symbols, traditions, history,
and physical environment

48
 A. Status symbol is the visible, external signs of social position that are associated
with the various positions in the firm.
B. Traditions and History - A firm’s history and traditions can determine how
workers in that particular firm act on a daily basis. Typically, traditions developed
over time let workers know exactly what is expected of them.
C. Physical Environment - The firm’s physical environment makes a statement about
its corporate culture. For instance, management that wants an open culture will see
to it that office doors are usually open; management that wants a more formal type
of corporate culture will encourage closed office doors

7. Communication

"Communication is the transfer of information from one person to another person. It is a way
of reaching others by transmitting ideas, facts, thoughts, feelings and values. “
- Newstrom and Davis.

“Communication is the process by which two or more persons come together to exchange ideas
and understanding amongst themselves.”
- Koontz and O’Donnell

Why Communication?

Individuals Groups Organizational

• To share knowledge
and information
• To present ideas
• To influence others
• To build relationships
• To express emotions
• To achieve common
goals
• To ensure effective
completion of a task
• To reach a common
understanding
• To share common
values/ systems
• To build relationships
Communication
• Organizational Goals
• Share Information
• Task Directives
• Result of Efforts
• Decision Making
• Achieve
• Coordinate

Channels
of communication

Formal communication Informal communication

Downward communication Grapevine Network

Upward communication Free-flow communication
Horizontal communication Circular communication
Diagonal communication Chain communication
Wheel communication

49
Modes of Communication
Types Examples
Written Letters, Memos, Reports, etc.
Oral Conversations, Interviews,
Phone calls, Speeches, etc.
Kinesics Facial expressions, Gestures,
Actions, Tone, Posture, etc.
Usefulness
It is relatively permanent and
accessible.
It is the easiest when one needs to
communicate urgently.
Body unconsciously does 90% of
communication.

Formal Communication
• Communication takes place through the formal channels of the organization structure
along the lines of authority established by the management.
• Such communications are generally in writing and may take any of the forms; policy;
manuals: Procedures and rule books; memoranda; official meetings; reports, etc.

Advantages & Disadvantages of Formal Communication:

• The advantages of formal communication are:
o They help in the fixation of responsibility and
o Maintaining of the authority relationship in an organization.
• The disadvantages of formal communication are:
o Generally time consuming, cumbersome
o Leads to a good deal of distortion at times.

50
Informal Communication
• Communication arising out of all those channels of communication that fall outside the
formal channels is known as informal communication.
• Built around the social relationships of members of the organization.
• Informal communication does not flow lines of authority as is the case of formal
communication.
• It arises due to the personal needs of the members of an organization.
• At times, in informal communication, it is difficult to fix responsibility about accuracy
of information. Such communication is usually oral and may be covered even by simple
glance, gesture or smile or silence.

Grapevine Patterns

How to be effective in communication

Who to communicate When to communicate Whom to communicate

What to communicate Media for communication

51
Communication Principles

Message

SENDER Encoding Media Decoding RECEIVER

Noise

Feedback Response

Barriers to Communication
- Poor choice of channel
- Poor Written or Oral Expression
- Status Effect
- Psychological Barriers
- Failure to Recognize Nonverbal signals

The American Management Association Inc. have outlined the following Ten
Commandments of good communication:
1. Seek to clarify your ideas before communicating
2. Examine the true purpose of each communication
3. Consider the total physical and human setting whenever you communicate
4. Consult with others, where appropriate, in planning communications
5. Be mindful, while you communicate, of the overtones as well as the basic content of
your message
6. Take the opportunity, when it arises, to convey something of help or value to the
receiver
7. Follow up your communication
8. Communicate for tomorrow as well as today
9. Be sure your actions support your communication
10. Seek not only to be understood but to understand – be a good listener.

Communicate Effectively
1. Identify you subjects
2. Arouse listener interest
3. Use words commonly understood
4. Avoid talking in general terms – be specific – use:
a. Examples
b. Illustrations
c. Specific instances
d. Explain technical terms / specific slang terms

Remember – Your tone of voice and your action or lack of them also convey messages.
52
Essential Quality of Communication
 ABC - Accuracy, Brevity, Clarity
 KISS - Keep it short and simple

5 Cs of Good Communication
 Conciseness
o Send the message in as few words as possible
 Completeness
o Ensure that all the information needed by the receiver to respond or act
is included
 Courtesy
o Show consideration for the receiver
 Clarity
o Message should be clear
 Correctness
o Check for accuracy of all statements and details

Disadvantages of Bad Communication

 Can be Misunderstood
 May not be taken seriously
 Reduced effectiveness
 Can lead to Conflicts

Communication and Conflict Management

- conflict is a disagreement between people over issues of substance and/or an emotional
antagonism
a. Substantive conflict involves disagreement over goals, resources, rewards, policies,
procedures, and job assignments
b. Emotional conflict results from feelings of anger, distrust, dislike, fear, and resentment
as well as from personality clashes

Conflict Management Styles

a. Avoidance - Being uncooperative and unassertive; downplaying disagreement,

withdrawing from the situation, and/or staying neutral at all costs

b. Accommodation (or smoothing) - Being cooperative but unassertive; letting the wishes
of others rule; smoothing over or overlooking differences to maintain harmony

c. Competition (or authoritative command) - Being uncooperative but assertive;

working against the wishes of the other party, engaging in win-lose competition, and/or
forcing through the exercise of authority

d. Compromise - Being moderately cooperative and assertive, bargaining for ‘acceptable”

solutions in which each party wins a bit and loses a bit

e. Collaboration (or problem solving) - Being both cooperative and assertive; trying to
satisfy everyone’s concerns fully by working through differences, finding and solving
problems so that everyone gains
53
IID. Controlling

Why control is important?

 To an individual
- To ensure positive results
- To avoid consequences that you won’t be able to face
 To an Organization
- provides critical link back to planning by knowing whether their goals and plans
were on target and what future actions to take
- provide information and feedback on employee performance,
- to protect the organization and its assets, comprehensive controls and backup plans
helps assure only minimal disruptions of their ongoing business operations

What is controlling?
 processes of making something happen the way it was planned to happen
 Sees to it that the rights things happen in the right way and at the right time.
 Helps ensure that the performance contributions of individuals and groups are
consistent with organizational plans.
 Helps ensure that performance accomplishments throughout an organization are
consistent with one another in means-ends fashion.
 Helps ensure that people comply with organizational policies and procedures

Controlling Process
 Establishing Objective and Standards
 Measuring Actual Performance
 Comparing Results with Objectives and Standards
 Taking Corrective Action

Establishing Objective and Standards

 performance objectives are defined and the standards for measuring them are set
- Output standard measures performance results in terms of quantity, quality,
cost, or time.
- Input standard measures work efforts that go into a performance task. They are
used in situations where outputs are difficult or expensive to measure.

Measuring Actual Performance

 Measure actual performance.
 The goal here is to measure accurately the performance results (output standards)
and/or performance efforts (input standards)

Comparing Results with Objectives and Standards

 compare measured performance with the objectives and standards to establish the need
for action
Historical Comparison — uses past performance as a benchmark for evaluating
current performance.
Relative Comparison — uses the performance achievements of other persons,
work units, or organizations as the evaluation standard.
Engineering Comparison — uses engineered standards set scientifically through
such methods as time and motion studies.
54
Taking Corrective Action
 taking any action necessary to correct or improve things
 This allows for a judicious use of management by exception — the practice of giving
priority attention to situations that shows the greatest need for action. Two types of
exceptions may be encountered:
Problem situation - actual performance is below the standard.
Opportunity situation — actual performance is above the standard.

Requirements of Effective Controls

 Controls should serve the need for which they are intended.
 Controls should be economical.
 Controls should be stable yet flexible.
 Controls should indicate changes or deviations.
 Controls should be objective.
 Controls should take into consideration the organization structure.
 Control must be understood by those who are to use them.
 Controls should be able to indicate future deviation that need corrective
action or further study.
 Effective controls should be able to indicate alternatives to correct
deviation.

2. Types of Control

Anticipate problems Correct problems as they Control problems after

Ensure the right happen they occur
directions are set and Ensure the right things Ensure that the final
the right resource are being done as part of results are up to
inputs are available work-flow operations desired standards

Internal vs. External Control

 Managers have two broad options with respect to control.
- Internal control occurs if managers rely on people to exercise self- control over
their own behavior. It allows motivated individuals and groups to exercise self-
discipline in fulfilling job expectations.
- External control happens if managers take direct action to control the behavior
of others. It occurs through personal supervision and the use of formal
administrative systems

55
Management Controls
 The day-to-day operations of the management process can go a long way in helping the
control behavior in organizations.

In Planning
 Control via strategy and an objective occurs when work behaviors are initially
directed toward the right end results.
 Control via policies and procedures operate in similar ways as control via strategy and
objectives.
 Control via learning occurs when past experiences are systematically considered and
incorporated into future strategies, objectives, policies, and procedures.

In Organizing
 Control by selection and training occurs when capable people are hired and given the
ongoing training needed to perform their jobs at high levels of accomplishment.
 Control via performance appraisal occurs when individual performance is assessed
and evaluated to ensure high performance results and to identify areas where training
development is needed.
 Control via job design and work structures involves putting people to in jobs that are
designed to best fit the job holder’s talent.

In Influencing
 Control through performance modeling means that leadership sets the example and
that workers have good models to follow in their job activities.
 Control by performance norms occurs when team or groups members share
commitments to high performance standards and reinforces one another’s efforts to
meet them.
 Control via organization structure occurs when an organization’s leadership helps
build strong values for the organization as a whole.

Employee Discipline Systems

 Discipline can be defined as influencing behavior through reprimand. Ideally, this form
of managerial control should be handled in a fair, consistent, and systematic way
 Progressive discipline
- Is the process of tying reprimands to the severity and frequency of misbehavior.
- Penalties vary according to how significant a disruptive behavior is and how
often it occurs.
- Its goal is to achieve compliance with organizational expectations through the
least extreme reprimand possible

Information and Financial Controls

 When the utilization of resources is considered from the standpoint of managerial
control, the use of information in financial analysis of firm or organizational
performance is critical.
 Managers should be able to understand and assess for control purposes the following
important financial aspects of organizational performance

56
 Objective Ratio Calculation Meaning
Liquidity Current Tests the
Ratio organization’s ability
to meet short-term
obligations.
Acid Test Test liquidity more
accurately when
inventories turn over
slowly or are difficult
to sell.
Leverage Debt to The higher the ratio,
Assets the more leveraged
the organization.

Time Measures how many

Interest times the
Earned organization is able
to meet its interest
expenses
Activity Inventory The higher the ratio,
Turnover the more efficiently
inventory assets are
being used
Total The fewer assets
Assets used to achieve a
Turnover given level of sales,
the more efficiently
management is using
the organization’s
total assets
Profitability Profit Identifies the profits
Margin on that were generated
Sales by various products
or service.
Return on Measures the
Investment efficiency of assets to
generate profits.

57
Sample: Financial Statement

58
 Balance Sheet Statement
Dell Computer Corporation

Income Statement
Dell Computer Corporation

59
Operation Management and Control
PURCHASING CONTROL
- Among the approaches now being tried to control the costs of purchases are:

a. Leverage buying power — organizations are centralizing purchasing to allow buying

in volume.
b. Small number of suppliers — organizations are committing only to suppliers with
whom they can negotiate special contracts, gain quality assurances, and get preferred
services.
c. Supplier-Purchaser Partnership — organizations find ways to work together in a
partnership so they can operate in ways that allow each partner to contain its costs.

INVENTORY CONTROL
- The basic principle of inventory control is to make sure that it is just the right size for
the task at hand. Among the approaches in inventory controls are:

a. Economic Order Quantity (EOQ) - is a method of inventory control that involves

ordering a fixed number of items every time an inventory level falls to a
predetermined point.
b. Just-in-Time (JIT) Scheduling - schedules materials to arrive at a workstation of
facility “just in time” to be used.

PROJECT MANAGEMENT AND CONTROL

- Project management makes sure that all activities in a project are completed on time,
in the order specified, and with high quality. Among the techniques used to facilitate
project management is the PERT/CPM, which identifies and controls the many
separate events in complex projects

QUALITY CONTROL
- Quality control involves checking processes, materials, products, or services to ensure
that they meet high standards. One useful technique to quality control is the statistical
quality control, which is the application of statistical techniques to assist in quality
control. It usually uses control charts which display work results on a graph that
shows upper and lower control limits (UCL and LCL)

3. Potential Barriers to Successful Controlling

LONG-TERM vs. SHORT-TERM PRODUCTION

- A manager, in striving to meet planned weekly production quotas, might be tempted
to “push” machines in a particular area so hard they cannot be serviced properly. This
kind of management behavior would ensure that planned performance and actual
performance are equivalent in the short term, but it might well cause the machines to
deteriorate to the point where it is impossible to meet long-term production quotas

EMPLOYEE FRUSTRATION AND MORALE

- Worker morale tends to be low when management exerts too much control.
- Employees become frustrated when they perceive management is too rigid in its
thinking and will not allow them the freedom they need in order to do a good job.

60
 - Over control may also make employees suspect that control activities are merely a
tactic to pressure them to work harder to increase production

FILING OF REPORTS
- Employees may perceive that management is basing corrective actions solely on
department records with no regard for extenuating circumstances. If this is the case,
they may feel pressured to falsify reports so that corrective action pertaining to their
organizational unit will not be too drastic

PERSPECTIVE OF ORGANIZATION MEMBERS

- Although controls can be designed to focus on relatively narrow aspects of an
organization, managers must remember to consider any prospective corrective action
not only in relation to the specific activity being controlled but also in relation to all
other organizational unit

MEANS VS. ENDS

- Control activities are not the goals of the control process; they are merely the means
to eliminating problems.
- Managers must keep in mind throughout the control process that the information
gathering and report generating done to facilitate taking corrective action are
activities that can be justified only if they yield some organizational benefit that
exceeds the cost of performing them

4. Making Control Successful

SPECIFIC ORGANIZATIONAL ACTIVITIES BEING FOCUSED ON

 Managers should make sure the various facets of the control process are appropriate to
the control activity under consideration

DIFFERENT KINDS OF Organizational GOALS

 Managers should remember that the control process can be applied to many different
facets of organizational life, and that, if the organization is to receive maximum benefit
from controlling, each of these facets must be emphasized

TIMELY CORRECTIVE ACTION

 Managers should take the corrective action as promptly as possible to ensure that the
situation depicted by the information gathered has not changed. Unless corrective
actions are timely, the organizational advantage of taking them may not materialize.

COMMUNICATION OF THE MECHANICS OF THE CONTROL PROCESS

 Managers should take steps to ensure that people know exactly what information is
required for a particular control process, how the information is to be gathered and used
to compile various reports, what the purposes of the various reports are, and what
corrective actions are appropriate given those reports.
 For control to be successful, all individuals involved in controlling must have a working
knowledge of how the control process operates

61
 CHAPTER III - SOME PRACTICES OF MANAGEMENT

IIIA. Human Resource Management Process

“People are the company’s most important asset. It is people who make the difference; it is
people who work for the company, who determine whatever a company thrives or
languishes….”
- Coopers and Lybrand

 Many organizations say the above maxim, or something close to it, to acknowledge the
important role that employees play in organizational success. These organizations also
recognize that all managers must engage in some human resource management
activities – even if there is a separate HRM department

1. Human Resource Management

 Process of attracting, developing and maintaining a talented and energetic
workforce.
 strategic process that makes an implacable contribution to the readiness of any
organization to perform up to expectations

Three major responsibilities in the Human Resource Management

 Attracting a quality workforce – this is the process of human resource planning,
recruitment and selection.
 Developing a quality workforce – this is the responsibility for employee
orientation, training and development and career planning and development.
 Maintaining a quality workforce – this involves management of employee
retention and turnover, performance appraisal and compensation and benefits

2. Human Resource Process

62
Attracting a Quality Workforce
 To attract the right people to its workplace, an organization must first know what it is
looking for – it must have a clear understanding of the jobs to be done and the talents
required to them well. Then it must have the system in place to excel at employee
recruitment and selection

Human Resource Planning

Recruitment
 set of activities designed to attract a qualified pool of job applicants to an organization

External Recruitment – seeks job candidates from outside of the hiring organization.
Newspapers, employment agencies, colleges, technical training centers, personal
contacts, walk-ins, employee referrals, and even persons from competing
organizations are all sources of external recruitment.

Internal Recruitment – seeks applicants from inside the organization. This involves
notifying existing employees of job vacancies through job postings and personal
recommendations

63
Decruitment
 Method for reducing organization’s workforce. It is a management approach to control
labor supply, which is not pleasant task for any manager

Option Description
Firing Permanent involuntary termination
Layoffs Temporary involuntary termination, may last only a few
days or extend to years
Attrition Not filling openings created by voluntary resignations or
normal retirements
Transfers Moving employees either laterally or downward; usually
does not reduce costs but can reduce intra-organizational
supply-demand imbalances
Reduced Having employees work fewer hours per week, share jobs or
workweeks perform their jobs in a part-time basis
Early Providing incentives to older and more senior employees for
Retirements retiring before their normal retirement date.
Job sharing Having employees share one full-time position

Selection
 process of choosing from a pool of the best qualified applicants

64
Developing a Quality Workforce
 When people join an organization, they must “learn the ropes” and become familiar with
the way things are done.

Socialization is the process of influencing the expectations, behavior and attitudes of a

new employee in a way considered desirable by the organization. The intent of
socialization in the human resource management process is to help achieve the best
possible fit between the individual, the job, and the organization

Employee Orientation - Orientation makes new employees familiar with their jobs, co-
workers, and organizational policies, rules, objectives, and services. Good
orientation enhances a person’s understanding of the organization and adds purpose
to his/her daily job activities. Increased performance, greater job satisfaction, and
greater commitment to the Job and organizational culture are the desired results

Training and Development - Training is a set of activities that provides the

opportunities to acquire and improve job-related skills.
o On-the-job training takes place in the work setting while someone is doing a
job.
o Job rotation allows people to spend time working in different jobs and thus
expand the range of their job capabilities.
o Coaching occurs when an experienced person gives specific technical advice to
someone else.
o Apprenticeship involves a work assignment wherein a person serves as
understudy or assistant to someone who already has the desired job skills.
o Modeling is the process by which someone demonstrates through personal
behavior what is expected of others.
o Mentoring is the sharing of experiences and insights between an experienced
and inexperienced person.
o Off- the-job training is accomplished outside the work setting. It may be done
within the organization at a separate training room or facility or at an off-site
location

Performance Management - The process of formally assessing someone’s work

accomplishments and providing feedback is referred to as performance appraisal. It
serves two basic purposes in the maintenance of a quality workforce.
o Evaluation purpose is intended to let people know where they stand relative to
performance objectives and standards.
o Development purpose is intended to assist in their training and continued
personal development

Performance appraisal methods

o Graphic Rating Scale - uses a checklist of traits or characteristics to evaluate
performance. A manager rates the individual on each trait using a numerical
score.
o Narrative Technique - uses a written essay approach to describe a person’s
performance.
o Behaviorally Anchored Rating Scales (BARS) - uses specific descriptions of
actual behaviors to rate various levels of performance.
65
 o Critical Incident Technique - involves keeping a running log of effective and
ineffective job behaviors.
o Multi-person Comparison - compares one person’s performance with that of
others,

Maintaining a Quality Workforce

 It is not enough to attract and develop a qualified workforce; it must be successfully
nurtured and managed for long-term effectiveness

Career Development
o Career planning is the process of systematically matching career goals and
individual capabilities with opportunities for their fulfillment. Sooner or later,
most people’s careers level off
o Career plateau is a position from which someone is unlikely to move a higher
level of work responsibility. Three common reasons for career plateaus are
personal choice, limited abilities, and limited opportunities

Retention and Turnover - Replacement refers to the management of promotions,

transfers, terminations, layoffs, and retirements.
o Promotion is the advancement of an employee to a better job - better in terms
of greater responsibilities, more prestige or status, greater skill, and especially
increased rate of pay or salary.
o Transfer is the movement of an employee from one job to another on the same
occupational level and on about the same level of wages or salary. Some types of
transfer are:
o Production Transfer - is intended to avoid layoffs on one job while workers are
being hired for a similar type of work elsewhere.
o Replacement Transfer - is similar to that of production transfer however, an
employee with longer service is transferred to a similar job in another
department where he replaces another with shorter service.
o Versatility Transfer - is intended to train workers to handle a variety of jobs in
preparation for production or replacement transfers or for small companies.
o Shift Transfer happens when shift assignments are not rotating; transfers are
made from a less favorable shift to a more favorable shift.
o Remedial Transfer - is intended to correct faulty selection or placement of an
employee.
o Termination is the involuntary and permanent dismissal of an employee.

Compensation and Benefits - When properly designed and implemented, compensation

and benefit systems help attract qualified people to the organization and retain them
o Base Compensation - is the salary or hourly wage paid to an individual. The
wage or salary rate that an organization has to compensate personnel at various
levels varies, depending upon:
1. The financial condition of the company
2. The wage and salary paid by other companies or organizations.
3. The demand for and supply of labor
4. The strength of labor
5. Governmental regulation

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 o Fringe Benefits the additional nonwage or nonsalary form of compensation.
Some examples of benefits include:
1. Vacation and sick leave with pay.
2. Hospitalization benefits
3. Medical care.
4. Educational benefits.
5. Financial assistance in the form of loans for home construction and
emergency needs.
6. Retirement benefits.
7. Profit sharing.
8. Christmas and production bonuses

IIIB. Production / Operations Management

Production is the transformation of organizational resources into products.

• Transformation is the set of steps necessary to change these resources into
products.
• Organizational resources — are all assets available to a manager to generate
products.
• Products — are various goods and/or services awed at meeting human needs.

Production management, therefore, deals with the planning, controlling, and

decision making necessary for carrying out the production process.

67
 The Production System Characteristics
• Material transformation process
• A degree of repetitiveness
• An information system superimposed on the physical system
• Material Flow Process

Job Shop (Intermittent) Model

Flow Shop Model

Project Type Model

Output
Input
1
A

2
B

3
C

2. Capacity Planning
- encompasses many basic decisions with long-term consequences for the
organization
Capacity
- Refers to an upper limit or ceiling on the load that an operating unit can handle.
- The capacity of an operating unit is an important piece of information for
planning purposes: it enables managers to quantify production capability in
terms of inputs or outputs, and thereby make other decisions or plans related to
those quantities

Defining and Measuring Capacity

Design Capacity - the maximum output that can possibly be attained

Effective Capacity - the maximum possible output given a product mix, scheduling
difficulties, machine maintenance, quality factors, shortage of materials, as well as
other factors that are outside the control of the operation managers

𝐀𝐜𝐭𝐮𝐚𝐥 𝐎𝐮𝐭𝐩𝐮𝐭 𝐀𝐜𝐭𝐮𝐚𝐥 𝐎𝐮𝐭𝐩𝐮𝐭

𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 = 𝐔𝐭𝐢𝐥𝐢𝐳𝐚𝐭𝐢𝐨𝐧 =
𝐄𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 𝐂𝐚𝐩𝐚𝐜𝐢𝐭𝐲 𝐃𝐞𝐬𝐢𝐠𝐧 𝐂𝐚𝐩𝐚𝐜𝐢𝐭𝐲

68
Determinants of Effective Capacity

Facilities Product/Service Process

 Design  Design  Quantity
 Location  Product/Service mix capabilities
 Layout  Quality
 Environment capabilities

Human Factors Operational External Factors

 Job content  Scheduling  Product standards
 Job design  Materials  Safety regulations
 Training and management  Unions
experience  Quality assurance  Pollution control
 Motivation  Maintenance policies  Standards
 Compensation  Equipment
 Learning rates breakdowns
 Absenteeism and
labor turnover

3. Evaluating Capacity Alternatives

Cost-Volume Analysis
• A tool that summarizes the various levels of profit or loss associated with various levels
of production. Its purpose is to estimate the income of an organization under different
operating conditions. It is particularly useful as a tool for comparing capacity
alternatives.

• The assumptions of cost-volume analysis are:

◦ One product is involved.
◦ Everything produced can be sold
◦ The variable cost per unit is the same regardless of the volume.
◦ Fixed costs do not change with volume changes.
◦ The unit selling price is the same regardless of volume.

• The required volume, Q, needed to generate a specified profit is:

𝐏𝐫𝐨𝐟𝐢𝐭 + 𝐅𝐢𝐱𝐞𝐝 𝐂𝐨𝐬𝐭

𝐐 =
𝐔𝐧𝐢𝐭 𝐒𝐞𝐥𝐥𝐢𝐧𝐠 𝐏𝐫𝐢𝐜𝐞 − 𝐔𝐧𝐢𝐭 𝐕𝐚𝐫𝐢𝐚𝐛𝐥𝐞 𝐂𝐨𝐬𝐭

• The volume, QBEP, where revenue is equal to total cost is defined to be:

𝐅𝐢𝐱𝐞𝐝 𝐂𝐨𝐬𝐭
𝐐𝐁𝐄𝐏 =
𝐔𝐧𝐢𝐭 𝐒𝐞𝐥𝐥𝐢𝐧𝐠 𝐏𝐫𝐢𝐜𝐞 − 𝐔𝐧𝐢𝐭 𝐕𝐚𝐫𝐢𝐚𝐛𝐥𝐞 𝐂𝐨𝐬𝐭

69
Example 8.1

A small firm intends to increase the capacity of a bottleneck operation by adding a new
machine. Two alternatives, A and B, have been identified, and the associated costs and revenues
have been estimated. Annual fixed costs would be Php4O,OOO for machine A and Php3O,OOO
for machine B; variable costs per unit would be P10 for A and Php12 for B; and selling price per
unit would be Php15 for A and Php16 for B.
a. Determine each alternative’s break-even point n units.
b. At what volume of output would be the two alternatives yield the same profit?
c. If expected annual demand is 12,000 units, which alternative would yield higher profit?

Financial Analysis
• A problem that is universally encountered by managers is how to allocate scarce funds.
A common approach is to use financial analysis to rank investment proposals.

Cash flow refers to the difference between the cash received from sales and other
sources and the cash outflow for labor, materials, overhead and taxes.
Present value expresses in current value the sum of all future cash flows of an
investment proposal

𝐅 = 𝐏(𝟏 + 𝐢)𝐧 𝐏 = 𝐅(𝟏 + 𝐢) 𝐧

(𝟏 𝐢)𝐧 𝟏 (𝟏 𝐢)𝐧 𝟏
𝐏=𝐀 𝐅=𝐀
𝐢(𝟏 𝐢)𝐧 𝐢

Example 8.2

In the course of planning its future operations, the management of a corporate farm has
decided that a building to be used for storage purposes must be constructed. However, it has
yet to decide which of two plans is more economical. Plan E calls for constructing a building
whose storage capacity will be adequate for 15 years. The construction cost would be
Php240,000. Fifteen years from now, Php180,000 would have to be spent for an addition to
the building in order to increase the storage capacity to the level that would be required for
the next ten years. Annual maintenance costs and property taxes would average Php24,000
during the first 15 years and Php42,000 thereafter. Plan F calls for constructing a larger
building now, thereby, eliminating the need for an addition in 15 years. Such a building would
cost Php300,000. Its annual maintenance costs and property taxes would average Php3O,000.
It is likely that either building will be razed 25 years from now and with no salvage value.
Which of the two plans is more economical, given that the corporation’s cost of money is 30%
per year. Use present worth (PW) method in your analysis

70
Example 8.3

A manufacturer of equipment is evaluating a proposal that he produce a new product. Two

alternative methods are available for the production of the item. These can be described, in
part, as follows (see the attached table):
Method R Method S
First Cost Php 100,000 Php200,000
Useful Life 10 years 20 years
Salvage Value Php15,000 Php10,000
Annual Revenues Php90,000 Php90,000
Total annual disbursements with method R will be Php7O,000 a year for the first four years
and Php80,000 a year for the last six years of its life. Total annual disbursements with method
S will be a uniform Php65,000 per year throughout its life. The company’s minimum rate of
return requirement is 12%. Should the new product be manufactured? If so, by which method?

Example 8.4

Suppose that the estimates given in the previous problem remain unchanged. However, it is
further estimated that if method R is selected, it will be succeeded at the end of its 10-year life
by a method which will have a first cost of Php15O,000, and Php2O,000 salvage value, uniform
annual revenues of Php9O,000 and uniform annual disbursements of Php50,000. Determine
the effect this will have on your decision. Use AW method in your analysis

4. Determinants of Factors of production requirements

Adjustment for Defective Outputs

Goods or services can be considered defective if it fails to meet established
specifications. There are two types of defective output; (1) those that can be reworked to
eliminate the deficiency or (2) those that the deficiency cannot be eliminated.
Fairly good estimates can be made of the proportion of total output which will have
to be scrapped. It is possible to calculate what additional factors of production will be
necessary because of scrap

𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐝 𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬 𝐨𝐫 𝐔𝐧𝐢𝐭𝐬

𝐓𝐨𝐭𝐚𝐥 𝐒𝐜𝐡𝐞𝐝𝐮𝐥𝐞𝐝 𝐎𝐮𝐭𝐩𝐮𝐭 =
𝟏𝟎𝟎% − 𝐩𝐞𝐫𝐜𝐞𝐧𝐭𝐚𝐠𝐞 𝐨𝐟 𝐭𝐨𝐭𝐚𝐥 𝐬𝐜𝐫𝐚𝐩𝐩𝐞𝐝

Example 8.5

Two thousand good copies of an instruction manual are needed. The printing process requires
three successive operations. The output at the end of each processing stage is inspected and
any unsatisfactory work discarded. It is expected that 8% of the output will be scrapped after
the first operation, that 5% of the remainder will be scrapped after the second operation and
that 3% of the balance will be scrapped after the third operation. In the determination of the
factors of production required for the first operation, consideration will have to be given to the
number of copies of the report that will undergo that operation. What should that number be?

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Adjustment for Efficiency

• Actual time reflects the efficiency at which an operator works and also takes into
account that time will be spent on such necessary personal activities
• Standard time is like the actual time but it contains an allowance for the occurrence
of necessary personal activities and unavoidable delays, but it is based on the
assumption that operators will work at 100°/o efficiency

𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝 𝐓𝐢𝐦𝐞
𝐀𝐜𝐭𝐮𝐚𝐥 𝐓𝐢𝐦𝐞 =
𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲

Example 8.5

A furniture manufacturer is going to produce a certain type of cabinet. The operation sheet
states that the standard time for a required planning operation is 0.247 hour per cabinet. In
the past, the average efficiency of the operators assigned to this work has been 115%. If the
total output during some future one-week period is to be 410 cabinets, determine the number
of operators and planers needed for this operation. Assume that each operator is scheduled to
work 40 hours per week and that each planer is scheduled to be operated two shifts per week

Example 8.6

A proposed production schedule stipulates that 625 good units of a specific part are to be
manufactured each day. The route sheet for that part indicates that one of the operation calls
for a power hacksaw and the standard time for the operation is 0.072 hour per unit. Calculate
the number of machine of this type that will be required to process this part if 4% of the output
will be scrapped, labor efficiency will be 110%, and each saw will be scheduled to operate 9
hours per day

5. Scheduling and Loading

Scheduling
- pertains to establishing the timing of the use of equipment, facilities and human
activities in an organization

Loading
- refers to the assignment of jobs to processing (work) centers. It involves
assigning specific jobs to work centers and to various machines in the work centers.
When making assignments, managers often seek arrangement that will minimize
processing and set-up costs, minimize idle time among work centers, or minimize job
completion time, depending on the situation.

Assignment Model (Hungarian Method)

- Is a special-purpose linear programming model that is useful in situations
that call for assigning tasks or other work requirements to resources. Typical examples
include assigning jobs to machines or workers, territories to sales people, and telephone
linear repair jobs to repair crews. The idea is to obtain an optimum matching of tasks
and resources. Commonly used criteria include costs, profits, efficiency, and
performance.
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 Hungarian Method
- Is a method used of assigning jobs by a one-for-one matching to identify
the lowest-cost solution. Each job, for example, must be assigned to only one machine.
It is also assumed that every machine is capable of handling every job, and that the costs
or values associated with each assignment combination are known and fixed (not
subject to variation)

Example 8.7

Determine the optimum assignment of jobs to machines for the following data that represents
the cost of assigning each job to each machine.

Machine
A B C D
JOB No.

1 9 6 2 4
2 6 7 11 10
3 3 5 7 6
4 5 10 12 9

Example 8.8

The following table contains information on the cost to run three jobs on four available
machines. Determine an assignment plan that will minimize costs

Machine
A B C D
JOB No.

1 12 16 14 10
2 9 8 13 7
3 15 9 9 11

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 CHAPTER IV - PINOY MANAGEMENT

Entrepreneurial management
 a two headed phenomenon — that of optimizing the best of the formal organization and
the impact of the informal organization at the same time
 it is street smarts and brawns combined with brains (means a lot of drive and energy,
sticking to one’s hunches and feelings, thinking non-linear at times)

IVA. Pinoy Management Styles

 Management by Kayod (Realist Manager)
 Management by Libro (Idealist Manager)
 Ugnayan Management (Reconciler Manager)
 Management by Lusot (Opportunist Manager)

Management by Kayod (Realist Manager)

◦ He wants quick action (Ang gusto n’ya aksyon agad)
◦ He is an autocrat
◦ He is a sigurista
◦ He knows first things first (Marunong)
◦ He has gut feelings
◦ He goes all the way
◦ He knows how to use people and resources
◦ He cuts problems down to a manageable size
◦ He is practical
◦ He decides immediately
◦ He is impatient (apurado)
◦ He is tuso

Management by Libro (Idealist Manager)

◦ He is a thinker (palaisip)
◦ He is a technocrat
◦ He is meticulous (mabusisi)
◦ He loves the drawing board (Mahilig so drawing-drawing)
◦ He is systematic
◦ He strives for professional performance
◦ He attacks the total problem, not just the parts
◦ Think first before deciding (Isip muna bago decide)
◦ He is stubborn (matigas ang ulo)
◦ His ideals are high (mataas ang panaginip)
◦ He is known for quality

Ugnayan Management (Reconciler Manager)

◦ He has balance
◦ Contingency management style
◦ He is solid
◦ He chooses well
◦ He has 3 eyes
◦ He is very exceptional

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Management by Lusot (Opportunist Manager)
◦ He is willy—nilly
◦ He has no conscience (walang konsensiya)
◦ He loves to get by (Mahilig sa lusot)
◦ He is inclined to easy settlements (Mahilig sa ayusan)
◦ He avoids headaches (ayaw ng sakit ng ulo)
◦ No money, no work (Kung walang atik, walang performance)

Variations of Opportunist Manager

Management by Pakiramdam - Means managing according to what one feels is the
desire of the higher-ups or those in authority. He follows exactly what the higher-
ups want him to do; no more, no less.
Characteristics:
◦ Hinay-hinay lang; pakiramdam muna bago decide
◦ Listen, then act, then listens again
◦ Do not commit
◦ Do not decide
◦ Do not act
◦ Saan ba ang hangin? Doon toyo!

Management by Takutan - Means achieving results by threatening or by inflicting

fear. This kind of leader sees to it that his subordinates fear him; his fellow officials
fear him; that everybody fears him.
Characteristics:
◦ Sindak style
◦ Palakihan ng mata
◦ Mga kilay ni Max Alvarado
◦ Boses ni Ben David
◦ Simangot eternally
◦ Uses sermonizing, sabonizing, and tangalizing

Ribbon-Cutting Mangement - Management style used to obtain publicity and high

visibility for their projects and for themselves; to show alleged speed in planning
and implementation, thereby claiming action lifestyles; and to look pleasing and
guwapo to the powers-that-be.
Characteristics:
◦ Full of schoolboy enthusiasm and the razzle-dazzle of a “project completed”
◦ Mahilig sa bongga
◦ Mahilig sa timing
◦ May connection sa press. Magaling sa publicity
◦ Magaling sa mobilization
◦ Magaling sa positioning

11TH HOUR MANAGEMENT - Practiced by most managers as last minute “adhoc-

cracy.” This management styles is practiced to suit a Filipino tendency to relax first
and then gather steam when deadlines are near.
Characteristics:
◦ Relaks lang muna. Hinay-Hinay lang. Malaya pa iyon!
◦ Saka no ‘yon attitude. May araw pa ring darating!
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 ◦ Kayang-kaya yan pagdating ng panahon!
◦ Inability to implement according to original plan.
◦ Weak monitoring and evaluation
◦ Lack of enthusiasm for daily grind and for regular sustaining of project

PATSAMBA-TSAMBA MANAGEMENT - Guess work management wherein one

works without any direction nor procedure.
Characteristics:
◦ He uses the kapa-kapa system
◦ His favorite song is “Where do I begin?”
◦ He is expert in tagpi-tagpi solution
◦ He has a sige-sige attitude

IVB. WEAPONS FOR THE MANAGER

1. Kailangan may No. 2

- A manager must have a real confidant, a true assistant, his own eyes and ears.
Every manager has a number 2— his assistant or deputy, sometimes his secretary
or even the driver. They may or may not have titles, but you can trust them.

2. Grapevine Machine (Tsismis Machine)

- Good managers have a gossip mechanism within the company. They know who
the talkative ones are. They use them to spread unofficial talk or ideas, or
unpleasant steps or actions still being planned to get an unofficial feed back

3. Kailangan may Hachet Man

- The hatchet man is your assistant who is like a verdugo. He is a “killer” type who
fires people, scolds and bawls out employees, reprimands supervisors, sends
tough memos, confronts intriguers. However, the use of hatchet man should be
a last resort: only when all other resources do not work

4. Be an expert on timing
- Tiempo is very critical in many business transactions or projects. And yet it is
hard to define or lecture about. It’s not in the books!

5. Avoid Losers
- You might encounter people who constantly don’t make it, no matter what he
does! Avoid them, you might be like them!

6. Make it personal
- Filipinos are very personalistic in their ways: to them, loyalty, commitment,
camaraderie are more important, rather than non-personal traits like efficiency
or effectiveness. We have to wrap our westernized and impersonal goals of
efficiency and effectiveness in personalized packages

7. NBA Style: One-0n-One

- Use go-between or intermediaries to reach those you cannot in touch with or are
giving you a hard time. Tackle them personally. Eyeball-to- eyeball!
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8. Power Play! Laban!
- This is an extreme situation when the enemy, the other group, another company,
or someone in power puts the squeeze on you and you have no other recourse but
to fight back. You marshal your forces slowly, test the enemy, flanks slowly, and
then unleash at the right time. This often happens when an organization is filled
with intrigues, gossipers, and rumor-mongers

9. Never Say Never!

- Leave the door open for reconciliation, for change, for improvements, for making
amendments. Situations change. People change. Be firm, true; but like the
bamboo, be flexible

10. Be Situational and Contingent

- Sometimes, the answer to management problems is “Depende!” There is no
single formula. There are times you must be systematic, or personalistic, or
quantitative, or intuitive!

11. Choose your Grounds

- Don’t fight in a hostile environment where you don’t have resources or support.
Choose your battleground

12. No HASSLE RULE

- Good managers try to simplify ways. They seek the direct, shortest route to a
problem. Sometimes, they are not concerned with the process, the method, or the
route but the what and why

13. If you can’t hack it, go away!

- Be sure you can handle the outcome of any action you made because man is
revengeful!

14. For the lazy or the Smart-Aleck

- People who are lethargic and slow tend to justify their turtle pace with
philosophizing and rationalizing. Don’t engage them in endless debate

15. It’s difficult to have an absentee owner

- Don’t be an absentee landlord if you want to into business; or else, the employees
will goof off, put one over him, or the customers will run circles around the staff

16. Let him hang himself

- There are organizational members who want to show off by advocating new ideas
that you know are risky, costly, or really impossible. If, despite your reasoned
objections or efforts you still cannot convince them to abandon the idea or
project, let them (with their own rope) hang themselves. Problems will emerge
to trap them and perhaps it may turn out to be valuable lessons for everyone

17. Act intelligently, pretend to think always!

- There are managers who smoke the pipe, always wear the business suit, and
always give the impression that he is very cool, calculating, and precise manager.

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 But he has nothing to offer by way of creative ideas, energetic leadership, or
resources mobilization

18. Enter while it’s hot

- Be alert to hot products, to new fads and consumer interests, to the happy moods
of the boss or powers-that-be. At those moments, seize the opportunity and ride
with the trends

19. You have to be SMARTS too!

- You have to have an area of expertise, a specialization, something entirely yours,
gained through experience, exposure, academic training, travels, family
tradition, or association

20. Don’t do everything alone!

- Delegate. Trust subordinates. Select the person. Spell out the results you want,
tell him what is expected of him and give him authority. Support him

21. Think Chinese

- Think like the Chinaman! They do not spend more than what they earn. They are
street smarts. They know the business well, all the important facts, all the
effective connections, all the right discounts and suppliers

22. Think Japanese

- The Japanese establish a network of communication and consultations at every
line of the company. They touch base with every important person or unit
involved. They consult, draw consensus, agree, unite, and are fiercely
competitive

23. Follow Up
- This is a key to management success. It helps to get a number 2, who is
meticulous and gets his fingers into every pie

24. A no is a no!
- Management is also the ability to say halt, stop, no, enough! Saying “No” often
brings many long-term good results

25. Deadline Conscious!

- Be aware of deadlines! Learn how to set deadlines! Think like a clock!

26. You’re the owner but you’re not the best!

- Ownership does not mean superior management! Oftentimes, the owner is a
nuisance in the business.

27. Body Language is important!

- Managers have to operate in the cultural context of their employees. It is said
that body language or nonverbal communication is 55% effective

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IIIC. Weaknesses of Pinoy Workers

 Walang bilib sa sarili (No confidence in oneself)

 Dikdik sa Colonial Mentality (Indoctrinated with Colonial Mentality)
 Masyadong relaks (Overly relaxed)
 Ningas-cogon (Not a follow-up people)
 Holiday mentality
 Lack of managerial and organizational effectiveness
 Lack of self-reliant tenacity

79