ORGANIZATION AND MANAGEMENT

Definition and Functions of Management

Background Information for Learners:

Management is the process of coordinating and overseeing the work performance of individuals
working together in an organization so that they could efficiently and effectively accomplish
their chosen goals. Management is also known as group of individuals occupying managerial
positions. (Cabrera,et al. 3)
Managerial levels in an organization are typically classified into three: top-level managers,
middle-level managers and lower -level managers.
An individual involved in managing people is called a manager. Managers play a vital role in an
organization towards achieving the organization’s goals and objectives. They must possess the
necessary skills like conceptual skills, human skills and technical skills. Also, effective
managers must have the ability to influence others and most often they are persuasive leaders.
These traits are manifested as they carry out their functions.
The five functions of management are:
1. Planning- the process that involves the setting of the organization’s goals, establishing
strategies for accomplishing those goals and developing plans of action or means that managers
intend to use to achieve organizational goals.
2. Organizing- the process of allocating resources to achieve goals.
3. Staffing- the filling of different job positions in the organization’s structure.
4. Leading- the influencing or the motivating of subordinates to do their best, so that they
would be able to help the organization’s endeavor to attain their set goals.
5. Controlling- involves evaluating and correcting if necessary, of the work performance of
individuals or workgroups/teams to make sure that they are all working toward a common
direction or toward or toward the previously set goals/plans of the organization. (Cabrera,et al. 3)

Source: https://www.referenceforbusiness.com/management/Log-Mar/Management-Levels.html

1
Learning Competency with code:

• Explain the meaning, functions and types and theories of management

(ABM_AOM11-Ia-b- 1-2)

Activity I

Directions/Instructions: Using the box below, clip letters from the word
MANAGEMENT to form new word and define it.
Terminology: Cropped Word/s: You define Management as:

MANAGEMENT Man/men

Activity II
Directions/Instructions: Looking at the following pictures, identify what business
resources does each depicts and write it on the blank below the images.

2
Activity III
Arrange the jumbled letters to form a word and write your answer in the opposite box.
Using the other box below, write the functions of management in order and look for the
definition of each word in letter A.
JUMBLED LETTERS ANSWER
CERTIIGDN
ZGOGARGIINN
ANNGNIPL
TFAFSGIN
TOONRLLGNIC

Functions of Management
1.
2.
3.
4.
5.

A. Identification
1. This involves filling and keeping filled the positions
provided in the organization structure.
2. The grouping together of people, establishing relationship
among them and defining the authority and responsibility that
the personnel have in the use of company’s material resources to
attain predetermined goals and objectives.
3. This is the process of measuring and correcting the
activities of subordinates and the company itself to
assure conformity to plans.
4. A function of leading the employees to perform efficiently, and
contribute their optimum to the achievement of organizational
objectives.
5. This refers to the formulation of objectives, programs,
policies, procedures, rules and regulations, in order to
achieve the goals of the business.

Directions: Identify what function of management does each statement belong. Write P
for Planning, O for Organizing, S for Staffing, D for Directing, and C for Controlling
before the number.
1. The most fundamental and the most pervasive of all management functions.
2. It measures the performance against goals and plans.
3. Placing right person to the right job.
4. Recruitment for attracting adequate number of potential employees to
seek jobs in the enterprise.
5. Identification of activities required for the achievement of enterprise
objectives and implementation of plans.
6. This involves establishing an intentional structure of roles for the men
to fill in an enterprise.

3
 7. This involves forecasting that is making decisions in advance.
8. This involves motivation, leadership styles and approaches and communication.
9. This involves selecting the best course of action that a business or other
enterprise and every department will follow.
10. This is the identification or grouping of work to be done, the
delegation of authority and responsibility, and the establishment of
relationships among company’s material resources to attain common
objectives.

Activity IV

Read and analyze the definition of management. Then, complete the Process of
Management using the graphic organizer below.
Management is defined in so many ways depending upon the viewpoints, beliefs, and
interpretations of the manager. However, from the book, Management for Filipinos of Dr.
Conrado E. Iñigo, Management is the distinct process of planning, organizing, staffing,
directing, and controlling, performed to determine and accomplish stated objectives by
the use of human being and other business resources.

Guide Questions:
1. What are the functions of management? How does each function coordinate to
one another?

4
 2. What are the 6 M’s of management? How can you manage these effectively and efficiently?

Reflection:
“How can you apply or use the concept of Management in your daily activities?

Rubrics for Scoring:

Essay Rubric
Features 4 3 2 1

Quality of Very Somewhat Gives new Gives no new

Writing informative and informative and information but information and
well-organized organized poorly organized poorly organized
Ideas Presents original Presents ideas in Ideas are too Ideas are vague
and organized a consistent general or unclear
ideas manner
Understanding Writing shows Writing shows a Writing shows Writing shows
strong clear adequate little
understanding understanding understanding understanding
Grammar Virtually no Few spelling A number of So many
spelling and and grammatical spelling and spelling and
grammatical errors grammatical grammatical
errors errors errors

5
ORGANIZATION AND MANAGEMENT
Evolution of Management Theories

Background Information for Learners:

Management theories help improve the management process. Most individuals

wonder how organizations came to existence and how they grew. Their existence, growth
and modernity can be explained through some theories or school of thought. While
several theories have been advanced to explain the structure, functioning and managing
of organizations to date, none is considered complete, or is accepted as being final. Each
theory has some limitations and the field of management theory is in the process of
evolving.

The management theories were summarized below.

Evolution of Management Thought

Sourcehttps://www.wisdomjobs.com/e-university/principles-of- management-and-organisational-
behaviour-tutorial- 366

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Pre-Scientific Management Theories:
They focused on specific organizational problems in specific ways. ... It was by the end of
the 19th century that management became a systematic field of study. The early
contributions include those made by Taylor in the early 20th century as scientific
management.

Classical management theory:

Based on the belief that workers only have physical and economic needs. It does not take
into account social needs or job satisfaction, but instead advocates a specialization of
labor, centralized leadership and decision-making, and profit maximization.
• Scientific Management - is a theory of management that analyzes and synthesizes
workflows. Its main objective is improving economic efficiency, especially labor
productivity. ... Taylor began the theory's development in the United States during
the 1880s and '90s within manufacturing industries, especially steel.
• Administrative management theory attempts to find a rational way to design an
organization as a whole. The theory generally calls for a
formalized administrative structure, a clear division of labor, and delegation of
power and authority to administrators relevant to their areas of responsibilities.
• Weber's theory of bureaucratic management also has two essential elements.
First, it entails structuring an organization into a hierarchy. Secondly, the
organization and its members are governed by clearly defined rational-legal
decision-making rules.

Neoclassical Theory:
It is an attempt at incorporating the behavioral sciences into management thought in order
to solve the problems caused by classical theory practices. The premise of this inclusion
was based on the idea that the role of management is to use employees to get things done
in organization.
• The Hawthorne Effect refers to the fact that people will modify their behavior
simply because they are being observed. ... The Hawthorne experiments were
originally designed by the National Research Council to study the effect of shop-
floor lighting on worker productivity at a telephone parts factory in Hawthorne

Modern management Theory:

It refers to emphasizing the use of systematic mathematical techniques in the system with
analyzing and understanding the inter-relationship of management and workers in all
aspect. It has following three Streams- Quantitative Approach. System Approach.
Contingency Approach.
• System approach a line of thought in the management field which stresses the
interactive nature and interdependence of external and internal factors in an
organization. A systems approach is commonly used to evaluate market elements
which affect the profitability of a business.
• Contingency approach is a management theory that suggests the most
appropriate style of management is dependent on the context of the situation and
that adopting a single, rigid style is inefficient in the long term.
• Quantitative approach involves the use of quantitative techniques, such as
statistics, information models, and computer simulations, to improve decision
making. Now, this view encourages managers to use mathematics, statistics, and
other quantitative techniques to make management decisions.

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 Management Theorist

Charles Babbage (1792-1871) - he stressed the means of determining the feasibility of

replacing manual operations with machines.

Frederick Winslow Taylor (1856-1915) – he is the father of Scientific Management;

developed a scientific for each job with standardized work implements and efficient
methods for all to follow.

Henry Gantt (1861-1919) – he developed the Gantt Chart that provides graphic
presentation of the flow of the work required to complete a given task.

Frank (1868-1924) and Lilian (1872-1972) Gilbreth – the man and wife team developed
a classification scheme for the various motion (17 basic hand motions) used to complete a
job referring a motion as a therblig.

Henry Fayol (1841-1925) -He is the father of 14 Principle of Management.

Principles: Division of work; Authority and Responsibility; Discipline; Unity of
Command; Centralization and Decentralization; Unity of Direction; Scalar Chain;
Stability of Tenure; Remuneration; Order; Initiative; Subordination of Individual Interest
to General Interest; Equity and Esprit de Corps.

Max Weber (1864-1920) – he described the ideal type of organization he he called a

BUREUCRACY, a form of organization characterized by division of labor, a clearly
defined hierarchy. Detailed rules and regulations, and impersonal relationships.

James D. Mooney (1884-1957) and Alan C. Riley – fundamental principles of

organization are: The Coordination principles - principle of Direct Contact, Principle of
Reciprocal Relationship, Principle of Continuity and a Few Others. Effective co-
ordination entirely depends upon effective leadership. Co-ordination is a continuous
process by which managers achieve the integrated common goals. The scalar
principle means that there should be a clear definition of authority in the organization and
that this authority flows, one link at a time, through the chain of command. The line is the
simplest organizational structure. Functional Principle, all the functions in a concern
should be completely and clearly defined to the managers and subordinates. This can be
done by clearly defining the duties, responsibilities, authority and relationships of people
towards each other.

Chester Bernard (1886-1961) – developed theories about the functions of the manager as
determined by constant interaction with the environment. Also, he developed set of
working principles by which organization communication system can maintain final
authority for the management team.

Herbert A. Simon (1916-2001) - He is best known for his work in the field of decision
making and administrative behavior. The manager is an administrative man, not an
economic man.
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P.F. Drucker (1909-2005) – Organizational Behavior - is the academic study of how
people act within groups. Its principles are applied primarily in attempts to make
businesses operate more effectively.

Robert Owen (1771-1858) - Concerned about deplorable working conditions; Proposed

idealistic workplace; Argued that money spend improving labor was smart investment

Hugo Munsterberg (1863-1916) - He created the field of Industrial Psychology scientific

study of people at work; Suggested using psychological tests for employee selection,
learning theory concepts for employees training and study of human behavior for
employee motivation.

George Elton Mayo (1880-1949) - His contribution to management thoughts lies in the
recognition of the fact that worker’s performance is related to psychological, sociological
and physical factors,

Mary Parker Follett (1868-1933) - He is one of the first to recognize that organization
could be viewed from the perspective of individual and group behavior; Proposed more
people-oriented ideas than scientific management followers; Thought organizations
should be based on group ethic.

Abraham Maslow (1908-1970) - He proposed a hierarchy of five needs: physiological,

safety, social, esteem and self-actualization. This theory is operationalized through two
principle: (1) The deficit principle holds that a relatively well-satisfied need is not a strong
motivator of behavior (2) the progression principle holds that, once a need is fairly-well
satisfied, behavior is dominated by the next level in the need hierarchy.

Douglas McGregor (1906-1964) - He is best known for his formulation of two sets of
assumptions-Theory X and Theory Y. Theory X-man by nature is sluggish and shirker.
Theory Y-man wants to work provided the conditions are favorable.

Chris Argyris (1923-2013) - He developed the theory that both traditional management
practices and organizational structure are inconsistent with the growth and development of
the matured personality.

Contingency Theory - It is based on the notion that the proper management technique in
a given situation depends upon the nature and conditions of that situation

Global Business - The recent emergence of a truly global economy is affecting every
manager in the world.

Theory Z - These firms are those which are highly successful American firms that use
many of the Japanese management practices. Type Z firm features long-term employment
with a moderately specialized career path and slow evaluation and promotion.

Mckinsey 7-S - Strategy, Structure, Systems, Staff, Style, Skills, Super ordinate goals.

Excellence - Successful firms make it a point to know their customers and their needs; a
successful firm makes things happen.

9
Quality and Productivity - Consumers are encouraged to buy a product that
demonstrates the highest level of quality at the optimum price. This requires a dedicated
and skilled work force that places utmost importance on quality workmanship.

Learning Competency with code:

• Explain the meaning, functions and types and theories of management

(ABM_AOM11-Ia-b- 1-2)

Activity I

Directions/Instructions: Create a timeline to note the important periods of the School

of Management Thought. Use the format below to indicate your answer.

School of
Theorist Contributions
Management
Scientific Management
School

Organizational School

Behavioral School

Quantitative School

Integrative School

Contemporary School

10
Activity II

Match the following management theorist to their respective thoughts. Write your
answer in your answer sheet.
Column A Column B
1. He is the father of Scientific Management Henri Fayol
2. He developed the Gantt Chart that provides graphic Max Weber
representation of the flow of the work required to
complete a task
3. He described an ideal type of organization called Henry Gantt
Bureaucracy.

4. He proposed a hierarchy of five needs: physiological, Mckinsey

safety, social, esteem and self-actualization.

5. He is best known for his formulation of two sets of Hugo Munsterberg

assumptions-Theory X and Theory Y.

6. He based on this notion: ‘Every situation is unique’ Theory Z

7. These firms are those which are highly successful Frederick W. Taylor
American firms that use many of the Japanese
management practices.
8. He proposed the 7-S factors: Strategy, Structure, Contingency Theory
Systems, Staff, Style, Skills, and Super ordinate goals.

9. He is the Father of Principles of Management Abraham Maslow

10. He created the field of industrial psychology-scientific Douglas McGregor

study of people at work.

11
 Activity III

The well-known contributors of the School of Management Thoughts are Frederick W.

Taylor and Henri Fayol. Using the given table, make a comparison essay focuses on
similarities and differences on the perspective and Focus of Taylor and Fayol.

Basis of
Taylor Fayol
Comparison
Perspective

Focus

Activity IV
Complete the chart below by thinking of a concrete situation either in your home,
school, or community in which you can apply or use the following principles and identify
how it was applied.
Individual or
Principles How it was applied?
Organization
Division of Work

Authority and Responsibility

Discipline

Unity of Command

Unity of Direction

Subordination of General
Interest to Individual Interest
Remuneration

Centralization and
Decentralization
Scalar Chain

Order

12
Equity

Stability of Tenure

Initiative

Esprit de Corps

13
ORGANIZATION AND MANAGEMENT
Functions, Roles and Skills of a Manager

Background Information for Learners:

The organization and management’s success depends on how managers perform

their functions and roles. The term ‘manager’ is widely used term in the business world.
Manager is a person who has responsibility for the activities of other people in the
organization. Hence, firm’s president is called manager, a commander of a troop of
managers. Despite of company’s high end machineries, huge capital, strong brand,
committed employees, and loyal customers, still the success relies most on how
managers effectively and efficiently perform their functions, roles and equipped with
managerial skills.
Manager’s Roles
In performing the various functions of management, a manager assumes various
roles. These are inherent behaviors for any manager of any kind of organization. Roles
are patterns of behavior that are expected of an individual in doing his functions. There
are ten basic roles displayed by managers.

The said roles are grouped into three main functions:

1. Interpersonal roles. The manager as a figurehead. He performs ceremonial
activities, like attending the wedding of his subordinates, public relations with
customers, and similar human relations. The manager is also the leader. He leads his
subordinates through proper motivation techniques. He also plays a liaison role. He
does not only interact with his subordinates and superiors, but also with suppliers and
other clients.

2. Informational roles. In all his functions, a manager performs communication roles.

He monitors needed information and disseminates this to his subordinates. The
manager is also a spokesperson. He gives information to groups outside the
organization.

3. Decision-making. Information provides inputs for decision-making. As a decision-

maker, a manager acts as an entrepreneur; that is, he improves the methods of
operation, or introduces new and better ways of doing things in his department. The
manager may also be a disturbance handler. He handles crises like strikes, violations
of contracts, and similar management problems. The manager is likewise a resource
allocator. He allocates productive resources like money, materials, machines and
even time. In addition, he is also a negotiator. He negotiates with suppliers and other
clients of the organization.

14
 Classification of managers
1. Based on their level in the company
a. Top managers - Senior executives of the firm, elected by shareholders
b. Middle managers - Senior executives of the firm, elected by shareholders
c. First-line managers - These are supervisors, who are in charge of the workers.

2. Based on the tasks for which they are

responsible. Example:
a. Production manager
b. Personnel manager
c. Finance manager
d. Sales manager

Skills of manager. The three basic skills that a manager must possess are:

1. Technical skill of a manager refers to the use of their expertise for them to perform
their tasks proficiently. Accountants, economists, bookkeepers, doctors lawyers,
geologist uses their knowledge and ability on their own specialized field. Just like
these professionals, managers must also know and be able to apply the technical
aspects of his job.

2. Human skill refers to human relations. It is the ability to work effectively with people
at all levels in the organization’s internal and external environment. Possessing such
skills, a manager can easily motivate and influence people to work on the direction
set by the organization towards the achievement of its goals and objectives.

3. Conceptual skills are abilities that allow an individual to understand complex situations to
develop creative and successful solutions. In other words, it is a natural talent that addresses
difficult scenarios with an innovative approach.

Source: https://corporatefinanceinstitute.com/resources/careers/soft-skills/management-
skills/

15
Learning Competency with code:

Explain the functions, roles and skills of a manager (Quarter I, Week 2) (AOM11-Ia-b-3)
This self-learning activity sheet guides the learners to capacitate on the basic tasks of
managers at the different levels of the organization and comprehend how managers
contributes to the organization’s success.
Activity I

Directions/Instructions: Plot the levels of management on the pyramid.

Activity II

Based on the pictures given below, answer this question, ‘What do managers do? Write
your answer on the blanks.

16
Activity III

Levels-Skills Mix. Identify the managerial skills being described in the box at the right.
Write your answers on the inverted pyramid.

Activity IV

Identify the role performed by managers, write your answers on the space provided.
After doing it, categorize your answers by classifying where it belongs by filling up the
box below.
1. This is the role played by managers when 2. Every manager must cultivate contacts with
they initiate and coordinate activities in their persons in other units within and outside the
units. organization.

16
3. The manager informs and satisfies various
groups and people who influence his
organization such as shareholders and even
government that the organization is fulfilling
its social responsibilities.
4. The manager must perpetually scan the
environment for information, interrogates
liaison contracts and subordinates as it allows
to monitor activities of the organization.

5. The manager exercise a key role in the 6. Manager is like a fire fighter, he must seek
distribution of funds, personnel, materials and solutions of various unanticipated problems
other organizational resources. such as bankruptcy, withdrawal of suppliers
and customers and so on.

7. Since managers are the hub of information. 8. Managers are frequently involved in
They are having a key role in transmitting and negotiation activities such as suppliers,
disseminating such information to other parts customers, labor unions, government and so
of the organization. on.

17
9. A role assumed by managers when they 10. In this role, the manager constantly looks
represent their respective units in the outside out for new ideas and seek to improve
world in ceremonial and civic activities. operations by adapting a certain condition in
the environment.

3 Classification of Roles
1. Interpersonal Roles
a.
b.
c.
2. Informational Roles
a.
b.
c.
3. Decisional Roles
a.
b.
c.
d.

18
Activity V

What is your stand regarding the statement ‘Managers are Born Not Made’. Elaborate
your answers by citing managers in your barangay or in your municipality and what
made you think they are potential managers.

Guide Questions:
1. Do you believe that Top management should possess conceptual skills over technical skills?

2. How do managers contribute to the achievement of organizational goals?

Reflection:
“As a student and aspiring young professional, how will you carry out your roles, functions and
skills in our family and school?

Rubrics for Scoring:

Essay Rubric

Features 4 3 2 1
Quality of Very Somewhat Gives new Gives no new
Writing informative and informative and information but information and
well-organized organized poorly organized poorly organized
Ideas Presents original Presents ideas in Ideas are too Ideas are vague
and organized a consistent general or unclear
ideas manner
Understanding Writing shows Writing shows a Writing shows Writing shows
strong clear adequate little
understanding understanding understanding understanding
Grammar Virtually no Few spelling A number of So many
spelling and and grammatical spelling and spelling and
grammatical errors grammatical grammatical
errors errors errors

19
ORGANIZATION AND MANAGEMENT
Environmental Forces and Environmental Scanning

Background Information for Learners:

Just like human beings, business enterprises do not exist in isolation. Each
business firm is not an island unto itself; it exists, survives and grows within the context
of the element and forces of its environment. While an individual firm is able to do little
to change or control these forces, it has no alternative to responding or adapting
according to them. A good understanding of environment by business managers enable
them not only to identify and evaluate, but also to react to the external forces.
Definition of terms:
1. Environmental scanning means seeking for and sorting through data about the environment
2.External business environment refers to the factors/elements outside the
organization which may affect, either positively or negatively, the performance of the
organization.
3.Internal business environment refers to the factors/elements within the
organization which may affect, either positively or negatively, the performance of the
organization

Source:https://www.managementstudyhq.com/functions-of-management.html

20
4.Micro-environment includes those players whose decisions and actions have a direct
impact on the company. Production and selling of commodities are the two important
aspects of modern business. Accordingly, the micro-environment of business can be
divided.
5.Macro-environment is the condition that exist in the economy as a whole, rather than
in a particular sector or region. In general, the macro environment includes trends in
the gross domestic product (GDP, inflation, employment, spending, and monetary and
fiscal policy.
The various constituents of micro-environment are as under:
1. Suppliers of inputs: An important factor in the external micro-environment of a
firm is the supplier of its inputs such as raw materials and components. Normally, most
firms do not depend on a single supplier of inputs. To reduce risk and uncertainty
business firms prefer to keep multiple suppliers of inputs.
2. Customers: The people who buy and use a firm’s product and services are an
important part of external micro-environment. Since sales of a product or service is
critical for a firm's survival and growth, it is necessary to keep the customers satisfied.
A concern for customers’ satisfaction is essential for the success of a business firms.
Besides, a business firm has to compete with rival firms to attract customers and
thereby increase the demand and market for its product.
3. Marketing intermediaries: In the firm's external micro-environment, marketing
intermediaries play an essential role of selling and distributing its products to the final
customers. Marketing provides an important link between a business firm and its
ultimate customers.
4. Competitors: Different firms in an industry compete for sale of their products. This
competition may be based on pricing of their products and non- price competition
through competitive advertising such as sponsoring some events to promote the sale of
different varieties and models of their products. Because of liberalization and
globalization of the Indian economy since the adoption of economic reforms there has
been a significant increase in the competitive environment of business firms. Now,
Indian firms must compete not only with each other but also with foreign firms whose
products can be imported. In America, American firms faced a lot of competition from
the Japanese firms producing electronic goods and automobiles.
5. Publics: Finally, publics are an important force in external microenvironment.
Environmentalists, media groups, women’s associations, consumer protection groups,
local groups, Citizens Association are some important examples of publics which have
an important bearing on the business decisions of the firm. The existence of various
types of publics influences the working of business firms and compels them to be
socially responsible.

21
 External Macro Environment
Apart from micro-environment, business firms face large external
environmental forces. An important fact about external macro environmental forces is
that they are uncontrollable by the management. Because of the uncontrollable nature
of macro forces a firm must adjust or adapt it to these external forces. These factors
are:
1. Economic Environment: Economic environment includes all those forces which
have an economic impact on business. Accordingly, total economic environment
consists of agriculture, industrial production, infrastructure, and planning, basic
economic philosophy, stages of economic development, trade cycles, national
income, per capita income, savings, money supply, price level and population.
2. Political-legal Environment: Business firms are closely related to the government.
The political- legal environment includes the activities of three political institutions,
namely, legislature, executive and judiciary which usually play a useful role in
shaping, directing, developing and controlling business activities.
3.Technological Environment: Technological environment is exercising considerable
influence on business. Technology implies systematic application of scientific or
other organized knowledge to practical tasks or activities. Business makes it possible
for technology to reach the people in proper format.
4.Global or International Environment: Global environment plays an important role in
shaping business activity. With the liberalization and globalization of the economy,
business environment of an economy has become totally different wherein it has to
bear all shocks and benefits arising out of global environment.
5.Socio-cultural Environment: Social and cultural environment also influences the
business environment indirectly. These include people’s attitude to work and wealth,
ethical issues, role of family, marriage, religion and education and also social
responsiveness of business.
6.Demographic Environment: The demographic environment includes the size and
growth of population, life expectancy of the people, rural-urban distribution of
population, the technological skills and educational levels of labor force. All these
demographic features have an important bearing on the functioning of business firms.
7.Natural Environment: Natural environment influences business in diverse ways.
Business in modern times is dictated by nature. The natural environment is the
ultimate source of many inputs such as raw materials and energy, which firms use in
their productive activity. The natural environment which includes geographical and
ecological factors such as minerals and oil reserves, water and forest resources,
weather and climatic conditions are all highly significant for various business
activities.
8.Ecological Environment: Due to the efforts of environmentalists and international
organizations such as the World Bank the people have now become conscious of the
adverse effects of depletion of exhaustible natural resources and pollution of
environment by business activity. Accordingly, laws have been passed for
conservation of natural resources and prevention of environment pollution. These laws
have imposed additional responsibilities and costs for business firms.

22
 Internal Environment
The factors in internal environment of business are to a certain extent controllable
because the firm can change or modify these factors to improve its efficiency. However, the
firm may not be able to change all the factors. The various internal factors are:
1. Value system: The value system of an organization means the ethical beliefs that guide
the organization in achieving its mission and objectives. It is a widely acknowledged
fact that the extent to which the value system is shared by all in the organization is an
important factor contributing to its success.

2. Mission and objectives: The business domain of the company, direction of

development, business philosophy, business policy etc. are guided by the mission and
objectives of the company. The objective of all firms is assumed to be maximization of
profit. Mission is defined as the overall purpose or reason for its existence which
guides and influences its business decision and economic activities.
3. Organization structure: The organizational structure, the composition of the board
of directors, the professionalism of management etc. are important factors influencing
business decisions. The nature of the organizational structure has a significant
influence over the decision-making process in an organization. An efficient working
of a business organization requires that the organization structure should be conducive
for quick decision-making.
4. Corporate culture: Corporate culture is an important factor for determining the
internal environment of any company. In a closed and threatening type of corporate
culture the business decisions are taken by top level managers while the middle level
and lower level managers have no say in business decision- making. This leads to lack
of trust and confidence among subordinate officials of the company and secrecy
pervades throughout the organization.
5. Quality of human resources: Quality of employees that is of human resources of a
firm is an important factor of internal environment of a firm. The characteristics of
the human resources like skill, quality, capability, attitude, and commitment of its
employees etc. could contribute to the strength and weaknesses of an organization.
6. Labor unions: Labor unions collectively bargains with the managers for better wages
and better working conditions of the different categories of workers. For the smooth
working of a business firm good relations between management and labor unions is
required.
7. Physical resources and technological capabilities: Physical resources such as, plant
and equipment and technological capabilities of a firm determine its competitive
strength which is an important factor for determining its efficiency and unit cost of
production. Research and development capabilities of a company determine its ability
to introduce innovations which enhances productivity of workers.

Specific Components of the External Business Environment

23
 Stakeholders, Customers, Suppliers, Pressure groups, Organization’s investors or owners
and Employees.
Component of the Internal Business Environment
1. Resources – financial, physical, mechanical, technological, and human resources
must be subjected to internal analysis (SWOT).

What Is a SWOT Analysis?

A SWOT analysis is a technique used to determine and define your Strengths, Weaknesses,
Opportunities, and Threats (SWOT). SWOT analyses can be applied to an entire company or
organization, or individual projects within a single department. Most commonly, SWOT analyses
are used at the organizational level to determine how closely a business is aligned with its growth
trajectories and success benchmarks, but they can also be used to ascertain how well a particular
project – such as an online advertising campaign – is performing according to initial projections.

24
Porter’s Five Forces
Porter’s Five Forces analysis is a framework that helps analyzing the level of
competition within a certain industry. It is especially useful when starting a new
business or when entering a new industry sector. According to this framework,
competitiveness does not only come from competitors. Rather, the state of
competition in an industry depends on five basic forces: threat of new entrants,
bargaining power of suppliers, bargaining power of buyers, threat of substitute
products or services, and existing industry rivalry

Source: https://www.business-to-you.com/porters-five-forces/

25
PESTEL Analysis.
A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is
a framework or tool used to analyses and monitor the macro-environmental factors that
may have a profound impact on an organization’s performance. This tool is especially
useful when starting a new business or entering a foreign market. It is often used in
collaboration with other analytical business tools such as the SWOT analysis and
Porter’s Five Forces to give a clear understanding of a situation and related internal
and external factors. PESTEL is an acronym that stands for Political, Economic,
Social, Technological, Environmental and Legal factors.

Source: https://www.wordstream.com/blog/ws/2017/12/20/pestel-analysis

Components of Environmental Scanning

1. Developing a competitive mindset – by seeking and sorting through data about
environment, you may be able to understand and predict the various changes,
opportunities and threats that may affect organizations in the future.
2. Considering future business scenarios – by realistic consideration of both worse- case
scenario or unfavorable future conditions, as well as middle ground possible conditions,
you will have an idea or what to do in the future
3. Business prediction (also known as business forecasting) – is a method of predicting
how variables in the environment will alter the future of business. It could be used in
making decisions regarding offshoring, branching out locally, and expanding or
downsizing the company. However, the accuracy of such business predictions cannot
always be assured.
Benchmarking – the process of measuring or comparing one’s own products, services,
and practices with those of the recognized industry leaders in order to identify areas for
improvement.

This activity sheet serves as your self-learning guide. It tests your ability to
observe and analyze how environment affects business, particularly in your c

26
 Learning Competency:
Analyze various forces/elements influencing local and international business
environment using PEST and SWOT strategies (ABM_AOM11-Ic-d-4-6)

Activity I. Mind Mapping

Direction: Write any word, phrases, or sentences that you think describes
business environment.

Activity II: Short Answer Type Question

Direction: Based from the Mind Mapping exercise, answer the following questions with
2-3 sentences only.
1. What is your idea about business environment?

2. Why is it important for business enterprises to understand their

environment? Explain briefly.

3. Mention the various dimensions of business environment.

27
Activity III: Let Me Think Deeper!
Directions: Going deeper with the business environment, determine what analysis
should be used before engaging with the following business event or activity. Write S
when SWOT Analysis is to be used and P if PESTLE Analysis is to be used.

1. Launching a new initiative

2. Revamping internal policies
3. Pivoting business direction
4. Changing a plan during its execution
5. Evaluating the effectiveness of the decision made
6. Entering a new country, region, or market

Activity IV: Rebus Puzzle with a Twist.

Directions: Determine the word described in each statement below. Draw your answer
from the Rebus Puzzle.
1. These are the internal, positive attributes of your company.

2. These are the things that you need to improve to be competitive.

3. These are the external factors in your business environment that are likely to
contribute to your success.

28
 4. You may convert this as your strength when it occurs.

5.

Activity V. SWOT Analysis

Directions: Using the template below, perform a SWOT Analysis for an Internet Café
that you are planning to put up in your own municipality. Based on your analysis, is it
possible that your internet cafe will succeed? Explain your answer. Use separate sheet
for your answers.
STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

PESTLE Analysis
As early as January of 2020, you are already thinking of putting up a grocery store in
your public market on or before September 2020. September 2020 is fast approaching
but several factors have prompted into your mind whether to continue the opening of
your business or not due to the problem of COVID 19.
Question: Identify changes in business environment under different heads —
economic, social, technological, political and legal that have facilitated the
companies’ decisions to plan significant investments in organized retailing. Use the
template below for your answer.

29
POLITICAL ECONOMIC SOCIAL TECHNO- LEGAL ENVIRON-
LOGICAL MENTAL

Reflection:
In this activity, I learned that…

30
ORGANIZATION AND MANAGEMENT
Forms and Economic Roles of Business Organizations

Background Information for Learners:

Small and large businesses drive economic stability and growth by providing
valuable services, products and taxes that directly contribute to the health of the
community. They also provide jobs, strengthening the economic health of each
community where a business is based. Even if a business is headquartered
elsewhere, employing people at each local business contributes to the success of that
region, as with the wages they earn, people buy property, work, shop and
otherwise invest in where they live. Hence, success in business translates to the
economic well-being of a company and its residents through job creation and
offering improved quality of life for the country’s citizens.
As business students, you need to be familiar to the forms of the business
organizations which contribute a great impact on the economic development
wherein you may choose the best business organization you wish to engaged with.
This activity sheet is intended to assess your deep understanding of the different
forms of business organization and examine each economic role in the community
and to the world.
Learning Competency:
Analyze the forms and economic roles of business organizations (ABM_AOM11-Ic-d-7)
Activity I. Fill Me Up!!!
The matrix shows the characteristics of each forms of business organization.
Directions: Fill-out the blank by giving the items needed in each column. You
will be given 1 point in each correct answer.

Sole
Items Partnership Corporation Cooperatives
Proprietorship

1. Number of
possible owners

31
 2. Management
(who manages
the business

3. Termination
of the business
4. Government
agency assigned
primarily to
regulate

5. Transfer of
ownership

6. Liability of
Owners

Activity II. Assessing Scenarios in Business Organization. This will test your
ability to distinguish the different forms of business organization.
Direction: Assess the following scenario and answer the questions following it.
1. Suppose you want to open your own sari-sari store that will need PHP10, 000 to start
and you used your PHP10, 000 savings to start the said business. You are the sole owner
of the said sari- sari store. What form of business you are to engage with?

2. What if the needed amount to start your dream sari-sari store is PHP50, 000 and you
only have PHP25, 000 cash savings. You ask Juan, your friend if he is willing to invest
his PHP25, 000 and become part owner of the sari-sari store. Assuming he agrees, what
form of business organization was created?
_

3. Assuming your dream is to open a grocery store and not just a sari-sari store but you
will need PHP1, 000, 000 to start the said business. You have only PHP25, 000, your
friend Juan has PHP25, 000, and your mother is willing to invest her PHP50, 000, but
still these are not enough to start your dream grocery store. Where will you get the money
to raise the PHP1 million? What form of business will you set up?

32
Activity III. Short answer question. Answer the following in 2-3 sentences.
1. What is the role of business in the market?

2. What is the role of business trade and commerce?

3. What is the role of business in product or service specialization?

4. What is the role of business in the economy?

Activity IV. Assess which among the forms of business organization is being
describe from the following statements. Choose your answers from the choices
below.

Simple Divisional Non - Profit

Functional Profit Flexible

1. It has a few departments, centralized authority with a wide span of

control, and with few formal rules and regulations.
2. This business organization group together those with similar or
related specialized duties that introduce the concept of delegation of
authorities to the managers.
3. Each division has its own functional organization and its own manager.
4. Immediate revenues or cost factors accounts their success or failure.
5. Can raise money from private investors, for which it must give equity or dividends
to shareholders, ultimately, a return on investment is expected

Exercise V. Essay.

1. In your opinion, what is the difference between profit and non- profit business
organization? Which is easier to manage? Explain your answer.

2. If you choose a business which will contribute to the development of

economy, which among the business organization you wish to engage with:
Single proprietorship, Partnership, Corporation, or Cooperative. Why?

33
ORGANIZATION AND MANAGEMENT
Phases of Economic Development
Background Information for Learners:

Although material wealth accumulation is among the concerns of genuine

economic development, its greater concern is the total improvement of the quality of
people’s lives. This in turn, is related to sustainable economic development issues
in a country which greatly influences business management.
Sustainable economic development ensures that the present needs of particular
generation are fully met without endangering the ability of future generations to also
fully meet their own needs. Hence, as future business managers you must be
conscious of your own decisions for in maintaining the ecological elements in its
safe state.
This learning activity will teach you how differentiate the phases of economic
development and learn its impact to business environment.
Learning Competency:
Differentiate the phases of economic development and its impact to business
environment (ABM_AOM11-Ic-d-8)
Activity I. Jumbled Letters with one Word.
This will test your ability to distinguish the kinds of economic system.
Directions: Identify what word that the following statements convey. As a clue, find
the one- word answer from the jumbled letters. Note: Not all the letters are included
in your answer.
1. Privately owned capital, and property rights are privately invested with the
ultimate aim of personal gain. MIMPITTAALASC.
2. The ownership of production and capital by the government and the regulation
by society as a whole, of the process of production and distribution, and of the
giving of essential services. LIMSSCCIIOA.
3. The collective ownership by the government of consumption goods and production goods.
CMMUNNOCIMS. .

34
Activity II. Multiple Choice. This will help you understand deeper the
criteria in classifying phases of economic development.
Direction: Choose the letter of the best answer on the questions below.
1. All of the following are criterion in classifying phases of Economic
development, choose which least likely to be included.
a) Means of Livelihood
b) Medium of Exchange
c) Status of family Income
d) Extent of Economic Activity
Choices for numbers 2-6
a) Agricultural Phase d) Industrial Phase
b) Hunting & Fishing Phase e) Pastoral Phase
c) Handicraft Phase f.) Continental Phase
2. Which among the following is the period when machineries were used in
factories and industrial plants?
3. This phase made it necessary for man to satisfy the needs of his group during
seasons of inclement weather and realization of greater need for planning, saving
and setting aside of stocks.
4. This was the period of medieval guilds.
5. This is the phase when our ancestors did not breed for domesticate animals.
6. This was the phase where man’s need for a continuous food supply led the
concept of land ownership and man began to work as farmer and fisherman.
7. Ascertain which among the following is least likely to be an economic activity?
a) Household Economy
b) Village Economy
c) National Economy
d) Money Economy
8. It is a medium of exchange wherein money was not used, instead, commodity is offered.
a) Barter
b) Credit
c) Transfer
d) Exchange

35
9. It is the power of obtain economic goods and services in exchange for the
promise to pay the agreed equivalent at some future time.
a) Barter
b) Credit
c) Transfer
d) Exchange
10. which of the following is least likely to be a medium of exchange?
a) Barter
b) Credit
c) Transfer
d) Exchange

Activity III. Script Writing.

Write a script portraying the different phases of economic development as to extent
of economic activity. Imagine that you will perform this script for 7-10 minutes.
(Use Separate Sheet)

Activity IV

Compare and contrast the phases of economic development base on the medium of exchange
used using VENN Diagram.

36
 Activity V. Essay.

Explain the means of livelihood in the economic development and its great impact in
business environment.

Reflection:
Complete the statement:

I realized that

I resolved that

Features 4 3 2 1
Quality of Very Somewhat Gives new Gives no new
Writing informative and informative and information but information and
well-organized organized poorly organized poorly organized
Ideas Presents original Presents ideas in Ideas are too Ideas are vague
and organized a consistent general or unclear
ideas manner
Understanding Writing shows Writing shows a Writing shows Writing shows
strong clear adequate little
understanding understanding understanding understanding
Grammar Virtually no Few spelling A number of So many
spelling and and grammatical spelling and spelling and
grammatical errors grammatical grammatical
errors errors errors

37
Answer Key:
Activity I.
Terminology: Cropped Word/s: You define Management as:
Man/men
Manage
Age Answers may vary
MANAGEMENT Team
Game
Meant
Gate
Mean
Emanate

Activity II
1. Men/women/people/manpower
2. Money/financial resources
3. Materials/raw materials
4. Machines
5. Methods/procedures
6. Market/customers
Activity III
Jumbled Letters Answer
CERTIIGDN DIRECTING
ZGOARGIINN ORGANIZING
ANNGNIPL PLANNING
TFAFSGIN STAFFING
TOONRLLGNIC CONTROLLING

38
Functions of Management
1. PLANNING 1. STAFFING
2. ORGANIZING 2. ORGANIZING
3. STAFFING 3. CONTROLLING
4. DIRECTING 4. DIRECTING
5. CONTROLLING 5. PLANNING

A. Identification

1. PLANNING 6. ORGANIZING
2. CONTROLLING 7. PLANNING
3. STAFFING 8. DIRECTING
4. STAFFING 9. PLANNING
5. ORGANIZING 10. ORGANIZING
Activity IV

Guided Questions:
1. What are the functions of management? How is each function be coordinated to each other?
Answer: Planning, Organizing, Staffing, Directing and Controlling. Planning is the foundation
of the other 4 functions of management. Planning will interlock and interrelate to organizing,
staffing, directing and controlling. Controlling function checks the effectiveness and efficiency
of what was planned.
2. What are the 6 M’s of management? How to manage these effectively and efficiently?
Answer: Men/women/people/manpower; money/financial resources; materials or raw
materials; machines; methods or procedures; and market. These are used harmoniously through
the functions of management (planning, organizing, staffing, directing and controlling) so that
the expected end-result may be attained, all within the anticipated problems of time, effort and
expenses.

39
Answer Key:
Activity I
School of Theorist Contributions
Management
Scientific Charles Babbage ( 1792-1871) He stressed the means of
Management determining the feasibility of
School replacing manual operations
with machines

Frederick W. Taylor ( 1856-1915) Father of Scientific

Management; Develop a
science for each job with
standardized work implements
and efficient methods for all to
follow

Henry Gantt He developed the Gantt Chart

that provides graphic
presentation of the flow of the
work required to complete a
given task.

Frank (1868-1924) and Lillian The man and wife team

(1878-1972) Gilbreth
developed a classification
scheme for the various motions
(17 basic hand motions) used
to complete a job referring a
motion as a therblig

40
Organizational Henri Fayol He is the Father of the 14
School Principles of Management
Principles: Division of Work;
Authority and Responsibility;
Unity of Command;
Subordination of Individual
interest to General interest;
Centralization; Scalar Chain;
Stability of Tenure; Exprit de
Corps; Span of Control;
Simplicity; Unity of Direction;
Order; Equity

He described an ideal type of

Max Weber (1864-1920)
organization that he called a
BUREAUCRACY, a form of
organization characterized by
division of labor, a clearly
defined hierarchy, detail rules
and regulations, and
impersonal relationships.

James D. Mooney and Alan C. The fundamental principles of

Reilly organizations are: The
Coordination Principle; The
Scalar Principle; The
Functional Principle

Chester Barnard (1886-1961) Developed theories about the

functions of the manager as
determined by constant
interaction with the
environment. Also, he
developed set of working
principles by which
organization communication
systems can maintain final
authority for the management
team.

41
 Chester Barnard He believed manager’s job was
to communicate and stimulate
employee’s high level of
effort; Actual manager who
thought organizations were
social system that required
cooperation

Herbert A. Simon He is best known for his work

in the field of decision making
and administrative behavior.
The manager is an
administrative man, not an
economic man.

P.F. Drucker Organizational Behavior

Behavioral Robert Owen (1771-1858) Concerned about deplorable

School working conditions; Proposed
idealistic workplace; Argued
that money spend improving
labor was smart investment

Hugo Munsterberg (1863-1916) He created the field of

Industrial Psychology-
scientific study of people at
work; Suggested using
psychological tests for
employee selection, learning
theory concepts for employees
training and study of human
behavior for employee
motivation

George Elton Mayo (1880-1949) His contribution to

management thoughts lies in
the recognition of the fact that
worker’s performance is
related to psychological,
sociological and physical
factors.

He is one of the first to

Mary Parker Follett (1868-1933)
recognize that organization

42
 could be viewed from the
perspective of individual and
group behavior; Proposed
more people-oriented ideas
than scientific management
followers; Thought
organizations should be based
on group ethic
He proposed a hierarchy of five
Abraham Maslow needs: physiological, safety,
social, esteem and self-
actualization. This theory is
operationalized through two
principle: (1) The deficit
principle holds that a relatively
well-satisfied need is not a
strong motivator of behavior
(2) the progression principle
holds that, once a need is
fairly-well satisfied, behavior
is dominated by the next level
in the need hierarchy.

Douglas McGregor (1906-1964) He is best known for his

formulation of two sets of
assumptions-Theory X and
Theory Y. Theory X-man by
nature is sluggish and shirker.
Theory Y-man wants to work
provided the conditions are
favorable.

He developed the theory that

Chris Argyris both traditional management
practices and organizational
structure are inconsistent with
the growth and development of
the matured personality.
Quantitative Features:
School
Primary Focus on Decision Making
Based on Economic Decision Theory

43
 Use of Formal Mathematical Models
Use of Computers
Contributors:
W.C. Churchman, J.C. March, Forrest, H.A. Simon, Raiffa
Environment: During cold war recession, conglomerates,
industrial/military conflicts
Integrative Contingency Theory It is based on the notion that
School the proper management
technique in a given situation
depends upon the nature and
conditions of that situation

Systems Theory (Open System,

Closed System, Socio-technical
system)

Contemporary Global Business The recent emergence of a

School truly global economy is
affecting every manager in the
world.

Theory Z These firms are those which

are highly successful
American firms that use many
of the Japanese management
practices. Type Z firm features
long-term employment with a
moderately specialized career
path and slow evaluation and
promotion.

Mckinsey 7-S Strategy, Structure, Systems,

Staff, Style, Skills, Super
ordinate goals

Successful firms make it a

Excellence point to know their customers

44
 and their needs; a successful
firm makes things happen

Consumers are encouraged to

Quality and Productivity
buy a product that
demonstrates the highest level
of quality at the optimum
price. This requires a dedicated
and skilled work force that
places utmost importance on
quality workmanship

Activity II
1. FREDERICK W. TAYLOR
2. HENRY GANTT
3. MAX WEBER
4. ABRAHAM MASLOW
5. DOUGLAS MCGREGOR
6. CONTINGENCY THEORY
7. THEORY Z
8. MCKINSEY
9. HENRI FAYOL
10. HUGO MUNSTERBERG
Activity III
Basis of Comparison Taylor Fayol
1. Focus Improving productivity Improving overall
through work simplification administration through
and standardization general principles

2. Personality Scientists Practitioner

Activity IV. Answers may vary

45
Answer Key:

Activity I

Activity II

Activity III

Activity IV
1. LEADERSHIP ROLE
2. LIAISON ROLE
3. SPOKESPERSON ROLE

46
 4. MONITOR ROLE
5. RESOURCE ALLOCATOR ROLE
6. DISTURBANCE HANDLER/PROBLEM SOLVER ROLE
7. DISSIMINATOR ROLE
8. NEGOTIATOR ROLE
9. FIGUREHEAD ROLE
10. ENTREPRENEURIAL ROLE
Activity V. Answer may vary
Guided Questions: Answer may vary
1. The top management carries out the conceptual skills because as it has the ultimate source
of authority, policy making body and set up organizational plans and frameworks.
Technical skills are relatively important at lower or operative management because these
perform most on technicalities of procedures, process, machines and making it sure that
they are efficient in any type of process or technique they perform.
2. Managers are the major contributors of organizational success through carrying out
efficiently and effectively their roles, functions and skills as expected them to perform.
Answer Key:
Activity I
Possible Answers
1. Business Environment refers to the factors or elements affecting business
organization. It divided into the External and Internal Business Environment.
EXTERNAL B U S I N E S S E N V I R O N M E N T includes the factors and
elements outside the organization which may affect its performance, either
positively or negatively. INTERNAL BUSINESS E N V I R O N M E N T refers to
the factors or elements within the organization which may also affect its
performance, either positively or negatively.
2. The importance of business environment and its understanding by managers can be
appreciated if we consider the following facts:
a) It enables the firm to identify opportunities and getting the first mover
advantage.
b) It helps the firm to identify threats and early warning signals. c) It
helps in tapping useful resources.
d) It helps in coping with rapid changes.
e) It helps in assisting in planning and policy formulation.

f) It helps in improving performance.

3. Dimensions of, or the factors constituting the business environment include
economic, social, technological, political, and legal conditions which are considered
relevant for decision-making and improving the performance of an enterprise.

47
Activity II Answer may vary
Activity III
1. S
2. S
3. S
4. S
5. P
6. P
Activity IV
1. Strength
2. Weaknesses
3. Opportunities
4. Threats
5. Environment

48
Activity V Answer may vary

STRENGTHS WEAKNESSES
-The passion and commitment -The lack of funding to purchase
demonstrated by the business owners additional IT equipment to reach new
markets
-Competent and experienced personnel
-The lack of capacity to meet a wider
-The strong thriving entrepreneurial
market
spirit of the business owner
OPPORTUNITIES THREATS
-The possible support from the internet -The existing numbers of competitors
users

Activity VI
POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL LEGAL
Liberalization Rising customer Preference of Better quality Direct
of the economic people products investment
Income
policies among
Increase
retailing
aspiration
sectors
levels

Answer Key:
Activity I

ITEMS Sole Partnership Corporation Cooperatives

Proprietorship

1. Number 1 2 or more At least 15 15 or more

of possible
owners
2. Owner (but he Partners (or Board of Board of
Management may hire may hire Directors and Directors and
(who somebody) managers) Operating Operating
manages the Management Management
business

49
3. Death of the Death of any As stated in the As stated in
Termination owner partner or Articles of the Articles of
of the withdrawal of Incorporation, Cooperative,
business a partner not exceed 50 not to exceed
years 50 years
4. In limited In limited SEC DA
Government capacity, DTI capacity, DTI
agency
assigned
primarily to
regulate
5. Transfer Sell the business Sell the Sell stocks Cannot
of (it’s new entity business of transfer nor
ownership under a new interest of the sell its
owner) partner membership
(consent of
other partner is
necessary

6. Liability Unlimited Generally Limited to the Limited to the

of Owners unlimited stock capital
except for the investment of contribution of
limited the shareholders the member
partners who’s
liability is
limited only to
the extent of
his
contribution

50
Activity II
1. Single Proprietorship
2. Partnership
3. Corporation

Activity III. Possible answer

1. Business organizations bring consumers and producers together to coordinate the
exchange of resources. Both the buyer and seller must stand to gain from the
trade or else the transaction will not occur.
2. Trade is what increases our standard of living. Instead of having to produce
everything that you consume on your own, you are able to trade with others and
obtain a higher quality of life
3. Businesses bring “specialized” people, equipment, and other resources together
and coordinate the production of goods and services.
4. Business answers the four (4) economic problem which includes what to produce,
when to produce, how much to produce and whom to produce.

Activity IV
1. Simple
2. Functional
3. Divisional
4. Profit
5. Non-profit
6. Flexible

Activity V. Answers may vary

51