Cobenth Lecture Notes: Introduction To Small and Medium Enterprises

COBENTH Lecture Notes: INTRODUCTION TO SMALL AND MEDIUM ENTERPRISES
Lesson 1
Introduction to Small and Medium Enterprises
Definition of Terms
1. Entrepreneurship
○ A dynamic process of vision, change, and creation.
○ The capacity and willingness to develop, organize and manage a business
venture.
2. Entrepreneurs
○ Entrepreneurs are innovators.
○ They recognize opportunities where others see chaos, contradiction, or
confusion and are aggressive catalysts for change within the marketplace.
3. Owner-Manager
○ Person who owns the business and remains closely associated with overseeing
its day-to-day operation; can readily exercise their influence
4. Small and Medium Enterprises (SME)

○ Non-subsidiary independent firms which consist of 11 to 250 employees
5. Human Resource Management

○ Management of people at work
○ Creates employee commitment in order to achieve superior performance
outcomes for an organization
○ Understanding employment relationships and practices to make sense of the
workings of small firms leads to misunderstanding and limited insights
6. Employment Relationship
○ Processes through which employers and employees negotiate the performance
of work tasks
○ Refers to what is going on inside a firm between an owner-manager and
employees
7. Organization
○ Social unit of people that is structured and managed to meet a need or to pursue
collective goals
Prepared by: Dr. Cristina Teresa Lim

Associate Professorial Lecturer
DSI Department, RVR College of Business
1
8. Equal Employment Opportunity (EEO)

○ Refers to freedom from discrimination on the basis of protected classes such as
race, color, sex, national origin, religion, age, disability or genetic information.
9. Strategy
○ A method or plan chosen to bring about a desired future, such as achievement
of a goal or solution to a problem.
10. Authority
○ The power or right to give orders, make decisions, and enforce obedience in an
organization.
11. Management Process

○ Process of setting goals, planning and/or controlling the organizing and leading
the execution of any type of activity.
Examples of SMEs
1. Bayani Brew
○ Social enterprise that produces all Filipino, all-delicious, all-nutritious iced tea
2. Zennya
○ Health and wellness services which are ordered and delivered through mobile
devices
3. PAPEL/Tagolwanen Women Weavers

○ Composed of a tribe of women from Bukidnon that specializes in making hand-
crafted mats or “banig”
4. Gifts & Graces

○ Foundation which aims to bridge the gap between artisan communities and
possible customers by promoting products made by active underprivileged
communities throughout the Philippines
5. Human Nature
○ A social enterprise that provides premier natural and organic products.
○ Have the following principles: pro-Philippines, pro-poor, and pro-environment

2
6. Skillshot
○ A team of game designers, game developers, web developers, and iOS and
Android developers that aims to publish beautiful, fun, and socially engaging
games which can be played by anyone and anywhere on any mobile device.
7. Kalibrr
○ A recruiting platform that uses assessments to drive faster hiring decisions.
○ It allows candidates to apply for jobs without the need of a resume.
8. Edukasyon.ph
○ Social enterprise in the education technology sector that connects students to
education opportunities through an online platform and promotes career
awareness among the Filipino youth
Differences Between SMEs and Large Corporations

1. Degree of Informality
○ SMEs
■ Generally acknowledged to operate along more informal lines
■ Usually have an absence or limited use of written policies and practices,
and improvised way of organizing and distributing tasks
■ Employees sometimes do not have clearly defined job roles
■ Employment relationships are conducted on a daily basis
■ Flexible and can quickly respond to challenges and opportunities
○ Large Corporations
■ More formal and has a clear organizational structure
■ Have written policies and are organized in distributing tasks among the
employees
■ Employees have clearly defined job roles
■ Structured organization with a clear division of business functions, each
supported by specialized human resources.
■ More bureaucratic and complex

3
Note: Informality is not suitable for all businesses and situations and as the firm grows,
there is a tendency to replace informal arrangements with more formalized ways of
operating.
2. Spatial and Social Proximity

○ Spatial and social proximity can contribute to greater employee satisfaction.
However, it doesn’t follow that it will lead to generally informal or positive
interaction among co-workers.
○ SMEs
■ Owner-manager and employees may share working space because of the
small number of people working within the firm
■ Has a more cost-efficient office space expenditure and more practical
when managing tasks to be undertaken
■ Employees can get to know each other on a personal level and build
relationships
■ Close proximity in SMEs permit opportunities for constant supervision of
employees
■ Each department has their own area and/or office
■ Employees are limited to their own department and aren’t able to have
constant communication with their leaders
■ Supervision is done by supervisors for each department
3. Resource Poverty
○ SMEs
■ Lack access the resources of a large organization
■ Tend to be concentrated in industries subjected to price cutting, that the
relative burden of owner-managers’ salaries on revenues are greater in
smaller enterprises
■ Owner-managers are more vulnerable to internal errors and external
shocks than larger organizations
■ SMEs can find themselves subject to their environment: dependency on
a single client and without surplus resources
■ Liability of Newness - it takes time for the particular ways of working
required in the organization to become established routines, and for
interpersonal relationships between organizational members to develop

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■ Have better access to financial resources
■ Can easily enter into different industries by acquiring established
businesses
■ More stable and are not prone to external shocks
■ Have various sources of revenue and may have surplus of resources
Video Summary
A. The Digitalization of MSME's in the Philippines
○ Digitalization - refers to enabling or improving processes by leveraging digital
technologies and digitized data.
○ Digital maturity - process of how the company is learning to respond to the

emerging digital competitive environment.
○ There are 4 stages of digital maturity:

i. Digital Indifferent
● A company that is “reactive to market changes and digital efforts
do not exist”
ii. Digital Observer
● A company whose digital efforts have started but remain tactile
and in bite-sized initiatives
iii. Digital Challenger
● A company that has a strategy for the use of digital technologies
and is more proactive in market responsiveness
iv. Digital Native
● A company that has an integrated digitalization strategy and is
focused on driving continuous innovation
○ The MSMEs in the Philippines are now moving towards the “digital observer”
stage. However, 73% still remain in the “digital indifferent” stage.
○ SMEs that are digitally mature are more profitable and productive compared to
those that are indifferent to digitalization.
○ Business intelligence solutions allow firms to enhance the organizational
processes within their businesses and to share information internally and their
supply chain real time which allows employees to be more efficient.

5
○ Challenges of adapting to a digitized business:

i. Shortage of skills
ii. Cultural resistance
iii. Lack of budget and commitment from the management
● Cost of new tools and technology along with the perception that
replacing old processes and systems would be too difficult were
barriers to adopting new technologies
○ 2018 study from Bain and Co. showed that:

i. Only 16% of MSMEs are truly digitalized
ii. 56% of MSMEs are at basic level with minimal digital adoption, mostly to
facilitate communication and operations
iii. 34% use digital tools to aid sales and marketing
iv. 10% are in the advanced category, with sophisticated digitalization
applied in the various aspects of their business
○ More than 8 out of 10 (86%) SMEs in the Philippines have identified digital
technology adoption as a way to improve business processes
○ Due to the pandemic, MSMEs have shown resilience and leveraged their
technology to continue their operations and serve customers
○ Digitalization of MSMEs will play a vital role in the Philippine’s recovery and
contribute to the country’s overall economic growth
B. What is the Difference Between a Small and Large Business - Small Medium and Large-
Scale Business
○ There are many factors that affect a business (e.g. industry, country, clients).
They may also vary in size, structure, and management.
○ Small Businesses:
i. More flexible in disruptive environments
ii. Employees work closely together and change roles depending on the
needs of the business
iii. Staff tend to be experts in their industry and interact closely with
customers.
iv. Closer relationship with customers can help the business provide their
customer a more personalized service and customize their offering
depending on the needs of the customers

6
○ Large Corporations:
i. Have access to larger finances which gives them more options across
their business
ii. Have the ability to hire more experienced employees in large numbers
and provide them with better benefits
iii. Have teams and departments dedicated to specific tasks
iv. Are up to date with the latest technology and equipment
v. With better access to finance, they can enter into new industries and
grow quickly as well as acquire established businesses
○ Small and large companies can work together to achieve their goals (e.g. large
companies can get supplies from small businesses.)

7
COBENTH Lecture Notes: Types of Business
Lesson 2
Types of Business
Business
● Organization where people work together
● Provides services to customers who have access to them for a period of time
● Main purpose is to maximize profit for its owners and stakeholders while maintaining
corporate social responsibility
● Economic activity of production and distribution of goods and services
A. Business Ownership
○ Sole Proprietorship
■ Business owned by only one person
■ Easiest to setup and least costly
○ Partnership
■ Business owned by two or more people
■ Partners contribute resources/assets into the business
○ Corporation
■ Business organization that has a separate legal personality (legally
considered as a person)
■ Incorporators are made up of 5 or more people
B. Business Activity
○ Service
■ Business that provides service
■ Offers Intangible products such as professional skills, expertise, advice,
etc.
■ Example: Jollibee
○ Merchandising
■ Business that buys and sells tangible goods
■ Wholesale or retail prices
■ Ex. Mercury Drug
○ Manufacturing
■ Purchases raw materials and process them to turn into new products
■ Combines raw materials, labor, and factory overhead production process
■ Ex. Microsoft and General Electric

1
C. Before Establishing Your Business:

○ Conduct market research to determine if there is an opportunity to do business
○ Make your business plan
○ Look for funding
○ Search for a strategic location
○ Come up with a business structure
○ Create a business name
○ Register your business
D. Register Your Business in the Following Government Offices:

○ Department of Trade and Industry (DTI)
■ Responsible for realizing the country’s goal of globally competitive and
innovative industry and services sector that contribute to inclusive
growth and employment generation
○ Securities and Exchange Commission

■ Governing body over all corporations, partnerships, or associations who
are the grantees of primary franchises and/or a license or permit issued
by the PH government
■ Protects investors, maintain fair, orderly and efficient markets while
facilitating capital formation
○ Bureau of Internal Revenue (BIR)

■ Responsible for collecting revenues for the government; in charge of
administering and the collection of taxes
■ Regulates finance, taxation, and monetary policy in the Philippines
■ Collects internal revenue taxes, fees, and charges and enforces all
forfeitures penalties and fines connected with tax matters for the
Philippine government
○ Republic of the Philippines Social Security Service Offices (SSS)

■ Insurance program mandated by the Philippine government to cover all
income earners or workers in the private sector
■ Beneficiaries and members - can avail benefits for retirement, disability,
sickness, and death

2
■ SSS is for private companies while GSIS is for government offices
○ Home Development Mutual Fund (HDMF/Pag-ibig Fund)

■ Pag-ibig stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko,
Industriya at Gobyerno (Cooperation for the Future: You, the Bank, the
Industry, and the Government)
■ Government-owned and controlled corporation under the housing and
labor development office
■ Founded by virtue of presidential decree no. 1530
■ Office that regulates and offers the need for a national savings program
and an affordable shelter financing for the Filipino worker
■ Active members should at least contribute for 24 months wherein
contribution is pegged at PHP100
○ Philippine Health Insurance Corporation (Philhealth)

■ Government-owned and controlled and connected with the Department
of Health (DOH)
■ Provides health insurance coverage and ensures affordable, acceptable,
available and accessible healthcare services for all citizens
■ Serves as the means for the healthy to help pay for the care of the sick
and for those who can afford medical care to subsidize those who cannot
■ Both government and private sector employees are required to register
○ Local Government Offices

■ City Hall
● All businesses are required to register their business with the City
Government or the Municipal Government.
● Procedure for the registration may differ depending on the city or
municipality concerned
● List of the general requirements needed to secure a
Business/Mayor’s permit:
a. Barangay Clearance
b. Community Tax Certificate with Gross Receipt
c. Financial Statement (Partnerships and Corporations)
d. BIR Clearance
e. SSS Clearance
f. For new businesses:

3
i. DTI Registration (Sole Proprietorship)

ii. SEC Registration (Partnerships and Corporations)
■ Barangay Hall
● A barangay clearance is a pre-requisite for the issuance of the local
government business permit.
E. Key Considerations in Establishing Your Business

○ Financing
■ Funding for business activities
■ Partner and work with other stakeholders
○ Marketing and Advertising

■ Marketing would be responsible for driving sales
■ Advertising exercises the promotion of company products and services
through different channels
○ Number of Employees
■ Make sure to hire and train the right employees
○ Location
■ Make sure to maximize opportunities and minimize costs
■ Do market research to identify feasibility of business idea as well as
determine the competitors and players within the location
■ See if there is demand for products or services and safety in that
particular location

4
COBENTH Lecture Notes: ENTREPRENEUR TO EMPLOYER
Lesson 3
Entrepreneur to Employer
A. Challenge of Change
○ To continue to grow, small businesses must successfully navigate a transition
from an entrepreneurial to a professionally managed system
○ Being open to change is crucial as an entrepreneur
○ Entrepreneurs must be able to:
■ Recognize a need to change their working practices
● Change structure or current business process
■ Conducting analysis on how the business currently operates

● Look into how the business can operate smoothly and adapt to
the changing environment
■ Decide on a new formal structure

● Formal structure - a fixed set of rules of procedures and
structures, usually set out in writing
■ Gradual implementation alongside training suitable managers

● Implement rules and regulations and look for managers who can
be trained and trusted
B. Icarus Paradox
○ Based on Greek mythology
○ It is important for organizations to continue to innovate even if they are already
successful as lack of change and innovation can lead to their eventual downfall
○ Organizations exist in dynamic environments and must remain dynamic to

account for changes in that environment. Simply repeating the practices
associated with prior success may reflect that a business is not seeking to adapt
to environment changes
○ Business will change their management structures when the problems caused
by existing practices are thought to outweigh the risks of adopting new practices
■ Success can lead to failures
● Pride or hubris

1
● Early success can lead businesses to underestimate the

challenges of a competitive environment or new product launch
● Being overly confident and complacent about one’s success can
become a weakness
■ Actions that lead to success at one time do not always lead to success
● Make sure to be open to changes and improvements in the
business
● There are standard operating procedures mandated in each
industry, therefore it is important to pass the necessary
requirements for the business (e.g. ISO accreditation)
● Allow the business to improve, innovate, and cope to the
challenges
Note: Organizations exist in dynamic environments and must remain dynamic to

account for changes in that environment. Simply repeating the practices
associated with prior success may reflect that a business is not seeking to adapt
to environment changes
Business will change their management structures when the problems caused
by existing practices are thought to outweigh the risks of adopting new practices
C. Challenges of Shifting from Entrepreneur to Owner-Manager

○ Resources
■ Does not only refer to financial resources but also the people and the
equipment that the business has
■ Added costs; growth requires resources and for employment growth,

this creates demands on finances, time and management efforts
● Taking care of the people, having good maintenance for
equipment and maximizing financial resources are crucial
○ Delegation
■ Involves handling certain tasks over to another person so that they can
undertake the work required.
■ It is important to hire additional manpower as the business grows

2
■ Learning to delegate is difficult to those accustomed to making decisions

alone and implementing them as they see fit, or reluctant to release some
control to others; it is understandable when some entrepreneurs
conduct the management of their firm through a “key employee”,
typically because these employees are perceived as effective, reliable,
and trustworthy.
○ Skills
■ For an owner-manager whose venture is becoming an established
business with employees, this places an emphasis on a different set of
skills from those that might have proven useful in getting the venture off
the ground
● Giving clear instructions
○ Example: How food should be prepared in a restaurant
(Some are frozen and will just be heated while other
ingredients should be measured and cooked properly)
● Learning to accommodate ways of working different from their
own
○ Maintain an open communication within the employees to
gain new insights on how to improve business processes
and prevent misunderstandings
● Deal with lack of investment from employees
○ Take on opportunities available and invest in people’s
training or software that can automate manual processes
● Change in self-image
○ Maintain an open mind that there would be certain
situations wherein the business would have to adapt new
structures or changes to meet the expectations of
customers and the industry
○ Assumption of Growth
■ Caution is required when self-employed people want to take on new
employees. Self-employment is frequently driven by a desire to earn a
living rather than the first path to building a larger business
■ It should be noted that growing a business can be achieved without
additional employees.

3
■ Acorns-to-oaks thinking: most small businesses harbor ambitions to

grow.
D. Video Summary
○ FedEx Series: Small Business, Big Ideas | Part 1: Entrepreneurial Challenges
■ Aside from hiring the right person, coming up with a direction and
strategy are some of the challenges that entrepreneurs face.
■ It is important to have mentors or talk to industry experts in order to
guide you on making decisions.
■ Whenever there are conflicts and difficult decisions to make, try to
discuss it with the team to gain new ideas and perspectives.
○ 10 Challenges Every Entrepreneur Will Face

■ Being an entrepreneur means sacrificing a lot of things (e.g. 9-5 job,
current lifestyle, and etc.) and taking up risks.
■ It is important to have mentors or talk to industry experts in order to
guide you on making decisions. It is important that you know how to
manage your capital properly and hire the right people to be in your
venture.
■ Create a vision and know what is the purpose of your business.

4
COBENTH Lecture Notes: MANAGING HUMAN RESOURCES
Lesson 4
Managing Human Resources
Human Resource Management

● Ensures that employees are managed individually and collectively so that they are able
to help in the achievement of mission, vision, and goals.
● 4 Human Resource Management Process:

a. Planning
■ Managers should establish goals and define methods by which these
goals are attained
b. Controlling
■ Management function which helps in measuring the progress towards
organizational goals indicates corrective actions that should be taken
c. Organizing
■ Identifying and grouping the work to be performed, defining and
delegating responsibilities and authority inside the organization
d. Leading
■ Basic function of management process which use influence to motivate
employees to achieve organizational goals
● Human Resource Management Components:

a. Staffing
■ Fundamental function of recruitment, screening and selection
b. Training
■ Aimed at teaching professional’s applicable knowledge, skills and
attitudes to be used in their job
■ Main focus is on delivering performance and overcoming future
challenges that the company might encounter
c. Compensation
■ Remuneration that an employee receives for his/her services to the
organization

1
d. Employee Relations
■ Sub-function in human resources or legal function which handles
grievances, resolving disputes between employees or between
employees and employers
A. Staffing - Finding the Right Person for the Job

○ Human resource strategy designed to ensure that the organization has the
workforce it needs to meet current and future business objectives
○ Small business owners must carefully hire their employees as hiring the wrong
employee can cost them their business.
○ Business owners can source their employees through:

i. Referrals
● When someone in your network recommends your business to a
new prospect or someone in your network recommends an
individual for a role in the company
ii. Job Advertisement

● Informative text that describes job vacancies and the details for
the potential job applicants
iii. Job Fairs

● Recruiting event in which employers and recruiters meet with
potential employees
iv. Employment Agencies

● Companies contracted to hire and staff employees for other
companies
● Staffing is the process of hiring eligible candidates in the
organization for a specific position
○ Some of the trends used in staffing are:

i. Going Virtual
● Exist in essence but not in reality

2
ii. Hiring Student Interns

● Interns - individuals who are about to graduate from college or
recent graduates and work for a company for a short period of
time to gain work experience
iii. Getting Volunteers

● Volunteer - person who voluntarily undertakes a particular service
○ To select the right employee for the business, it is important to check:

i. Employee Attitude
ii. Skills and Abilities
iii. Passion/Intensity
iv. Fitness to the Role
v. Product/Service Passion
vi. Communication Ability
B. Training - Developing and Upgrading Skills for Peak Performance

○ A formal intervention known as training is needed in order to turn an employee’s
level of performance from acceptable to excellent.
○ Before starting the training process, it is important to first assess the needs of
the company.
○ Steps in the training process:

i. Identify who needs to be trained.
ii. Prepare the employee for training.
iii. Outline the task to be completed.
iv. Demonstrate the task.
v. Watch the employee perform the task.
vi. Appraise performance.
vii. Provide feedback to the employee.
○ Training employees is an investment rather than an expense. It is important to

make training an ongoing process (e.g. quarterly, semi-annually, annually) and
look into different types of training methods (e.g. e-learning, simulation, hands-
on training, coaching/mentoring, simple lectures, group discussions, role playing
and etc.)

3
C. Compensation - Creating a Pay System that is Fair, Equitable and Just

○ All firms must be competitive in wage and salary levels in order to attract and
maintain qualified personnel.
○ Payments made to employees either are based on increments of time - such as

an hour, a day, a week, or a month – or vary with the output of the employees.
○ Forms of Compensation:
i. Bonus
● Amount of money added to wage on a possible seasonal basis as
a reward for good performance
ii. Commissions
● Service charge assessed by a broker for providing investment
advice on handling purchases and sales of securities for a
particular client or a fee paid for services usually a percentage of
the total cost
iii. Stocks
● Also known as equity securities and represents the ownership of
a fraction of a corporation; entitles the owners of the stocks to a
portion of the corporation’s assets and profits equal to how much
the individual has
iv. Profit-sharing
● Incentivized compensation program that awards employees a
percentage of the company’s profits; the amount awarded is
usually based on the company’s earning over a set period of time
(e.g. over in a year span)
v. Gain-sharing
● Incentive plan in which employees or customers will receive
benefits directly as a result of cost-saving measure that they
initiated or participated in (e.g. pay for performance program)

4
vi. Base Pay

● Base wage rate is the minimum amount an employee may be paid
for their work and is usually agreed upon during the hiring process
● Does not include bonuses and overtime pay
vii. Overtime Pay

● Amount of overtime paid to each employee in a pay period; paid
in excess of 8 hours
○ Compensation must be:

i. Fair
● Adequate compensation for the responsibilities assumed and
qualifications held by the job holder
● Based on industry standards
ii. Equitable
● Same compensation is paid to those who perform work of equal
value and recognizes seniority and merit as only reasons for pay
differentials.
iii. Just
● Legally compliant
D. Employee Relations - Forming Relationships that Foster Harmony in the Workplace

○ Refers to an entrepreneur’s efforts to manage the professional relationship
between him/her and the employees.
○ Ensure fair, consistent, and humane treatment of all employees so that they will
remain committed and loyal to the company.
○ Employee relations have 5 components and these are:

i. Discipline
● Training people to obey rules or code of behavior necessary in the
organization
● Discipline involves taking timely and appropriate action when
employees display unacceptable behavior at work.

5
● Progressive disciplinary method - process or method that

attempts to address and correct an employee's work
performance or inappropriate workplace behavior by providing
clear and constructive feedback through a series of increasingly
formal steps
● Need to follow due process:
a. Verbal warning
b. Written warning
c. Suspension
d. Termination
ii. Grievance Management

● Grievance - Discontentment of an employee with the company
and its management
● Important for business owners to implement an open-door policy

or simple grievance machinery to address employee complaints.
● Open-door policy - Every manager's door is open to every

employee. The purpose is to encourage open communication,
feedback, and discussion about any matter of importance to an
employee.
iii. Quality of Work Life

● Quality of the job environment for the people working in the
company
● This is achieved whenever a small business owner provides a

working environment that nurtures the holistic well-being of an
employee instead of just focusing on the work-related aspects of
employment.
● Scopes of Quality of Work Life (QWL)

a. Compensation
b. Health and Safety
c. Job Security
d. Job Design/Scope

6
e. Social Integration
f. Social Relevance for Work
g. Better Career Opportunities
iv. Communication
● Act of transferring information from one individual to another
● Clear communication between employer and employee is a must

in order to establish the following:
a. Rules and Regulations
■ Guidelines for doing something right to manage
behavior in the organization
b. Code of Conduct
■ Policy in the workplace
c. Work Procedures
■ Standard work procedure or process; sequential
tasks to be performed to achieve a specific
outcome
d. Job Expectations
e. Ideas and Suggestions
v. Occupational Health and Safety

● Refers to health, safety and welfare of the people in the
workplace
● Employers need to safeguard their workers’ well-being as well as

ensure that they are free from harm, injury, or hazards while
working.
● To improve workplace safety, it is important to have the following:

a. Protective Equipment
b. Regular Maintenance and Safety Checks
c. Hazard Communication

7
d. Safety Training
e. Immediate Access to Emergency Medical Care
f. Proper Ventilation and Lighting
E. Video Summary
○ How to Hire the Best: "4 Key Qualities to Look For"
i. Hire someone who loves the company and its vision because a strong
work ethic will definitely follow.
ii. Hire people whom you can trust to do business with. This process may
take 3-6 months to figure it out.
iii. Hire a person who is fast and efficient; someone that is adaptable to
changes.
iv. Hire an employee who is committed to growing and developing himself.
○ Why Invest in Employee Training & Development?

i. It is important to train employees to help them keep up to the rapid
technological advancements and be more efficient.
ii. Not training employees can cause the company a significant penalty: the
company will not be able to use the newest technology and/or the
technology will be used inefficiently or incorrectly.
iii. Making the employees learn on their own will make them inefficient at
work and resent the company for requiring them to give up their personal
time to enhance their skills.
iv. By investing in training and development, the company will be able to

increase productivity and maximize profits.

8

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COBENTH Lecture Notes: INTRODUCTION TO SMALL AND MEDIUM ENTERPRISES

4. Small and Medium Enterprises (SME)

5. Human Resource Management

Prepared by: Dr. Cristina Teresa Lim

8. Equal Employment Opportunity (EEO)

11. Management Process

3. PAPEL/Tagolwanen Women Weavers

4. Gifts & Graces

Prepared by: Dr. Cristina Teresa Lim

Differences Between SMEs and Large Corporations

Prepared by: Dr. Cristina Teresa Lim

2. Spatial and Social Proximity

Prepared by: Dr. Cristina Teresa Lim

○ Digital maturity - process of how the company is learning to respond to the

○ There are 4 stages of digital maturity:

Prepared by: Dr. Cristina Teresa Lim

○ Challenges of adapting to a digitized business:

○ 2018 study from Bain and Co. showed that:

Prepared by: Dr. Cristina Teresa Lim

Prepared by: Dr. Cristina Teresa Lim

Prepared by: Dr. Cristina Teresa Lim

C. Before Establishing Your Business:

D. Register Your Business in the Following Government Offices:

○ Securities and Exchange Commission

○ Bureau of Internal Revenue (BIR)

○ Republic of the Philippines Social Security Service Offices (SSS)

Prepared by: Dr. Cristina Teresa Lim

■ SSS is for private companies while GSIS is for government offices

○ Home Development Mutual Fund (HDMF/Pag-ibig Fund)

○ Philippine Health Insurance Corporation (Philhealth)

○ Local Government Offices

Prepared by: Dr. Cristina Teresa Lim

i. DTI Registration (Sole Proprietorship)

E. Key Considerations in Establishing Your Business

○ Marketing and Advertising

Prepared by: Dr. Cristina Teresa Lim

■ Conducting analysis on how the business currently operates

■ Decide on a new formal structure

■ Gradual implementation alongside training suitable managers

○ Organizations exist in dynamic environments and must remain dynamic to

Prepared by: Dr. Cristina Teresa Lim

● Early success can lead businesses to underestimate the

Note: Organizations exist in dynamic environments and must remain dynamic to

C. Challenges of Shifting from Entrepreneur to Owner-Manager

■ Added costs; growth requires resources and for employment growth,

Prepared by: Dr. Cristina Teresa Lim

■ Learning to delegate is difficult to those accustomed to making decisions

Prepared by: Dr. Cristina Teresa Lim

■ Acorns-to-oaks thinking: most small businesses harbor ambitions to

○ 10 Challenges Every Entrepreneur Will Face

Prepared by: Dr. Cristina Teresa Lim

Human Resource Management

● 4 Human Resource Management Process:

● Human Resource Management Components:

Prepared by: Dr. Cristina Teresa Lim

A. Staffing - Finding the Right Person for the Job

○ Business owners can source their employees through:

ii. Job Advertisement

iii. Job Fairs

iv. Employment Agencies

○ Some of the trends used in staffing are:

Prepared by: Dr. Cristina Teresa Lim