Organization Management Module

My dear students, personally, I would like to welcome you all to the world of
Management.
Within this lesson, you will encounter learning aids that highlights ideas or clarify
significant terms related to the discussion. Know your Jargons introduce
students to business terms and Management Quotes feature significant thoughts
from famous management gurus.
In this chapter, you are about to explore the topic that discuss the nature of
management, the importance and meaning of management, the difference between
efficiency and effectiveness, factors that influence management practices and the
importance of management in the success of organization.
Now my dear students fasten your seatbelts to travel and to find a useful decision
to venture into the world of business and management in the future. Let us now begin to
explore in this chapter because at the end of this unit you are expected to be able to apply
the management theories and principles in solving cases, hence, duties and
responsibilities of the students in performing their roles as the heart of management. Just
relax and read this lesson with LOVE and interest. If you meet some difficulties do not
hesitate to ask your teacher to unlock your difficulties. Enjoy
Discuss the nature of management,

Explain the importance and meaning of management,
Differentiate efficiency from effectiveness
Identify factors that influence management practices and trends, and
Appreciate the importance of management in the success of
organizations
For better understanding, some terms were defined for you.
Corporate social responsibility- the willingness of companies to run their

business operations in a sustainable and responsible manner.
Driving force- the company’s main reason to act on a particular decision
or situation.
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Outsource- the use of resources not owned by the firm such as
consultants, temporary employees, and suppliers.
Let us measure your knowledge if it is still fresh…. So let us try this test if how
good you are.
Directions: Write T if the statement is true. If the statement

is false, correct the underlined word at the end of the sentence
to make it true.
1. The driving force of people to do business in

a faster way is communication.
2. Some companies failed to implement their
strategies because of the lack of employees who will execute them.
3. Globalization enables people to do
business in any part of the world.
4. Effectiveness means "doing things right”
5. Ecosystem can help manager foster closer
relationship
6. Outsourcing is defining as the transfer of
an organizational function to a third party
Congratulation JOB well done my dear manager
Management has always been attributed to the activities of an

organization, specifically its day-to-day operations. It consists of administrative
job functions that require critical thinking and decision making. It also entails
responsibilities concerned not only with the people, resources, and processes
within the organization but also with outside factors such as the environment
where the organization operates.
NATURE OF MANAGEMENT
Management is a science as well as an art. It is a body of knowledge whose ideas

and principles have become the basis of organizational frameworks employed by
many businesses and Organizations. It is considered a science because it
evolved from a number of theories involved extensive studies and experiments.
The management principles practiced by businesspeople and professionals are
based on scientific principles, scholarly studies, and Statistical data. The
problem-solving nature of management benefits greatly from methods and
practices adopted from scientific principles.
However, many management experts point out that management is not an exact
science like mathematics. Despite the accuracy of data from statistics, the use
of mathematical tools is only one aspect of management. A good manager must
be able to look at situations and use creativity and imagination in coming up
with solutions to problems. It is in this aspect that one can consider
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management as an art. Creativity and ingenuity are important traits of
managers that enable them to effectively use business strategies in any
situation, and make innovations that result in new products, services, and
processes. This ingenuity can be drawn from the effective application of
knowledge and skills of decision-makers.
MEANING AND IMPORTANCE OF MANAGEMENT
“Good management is the art of making problems so interesting and
their solutions so constructive that everyone wants to get to work and
deal with them.”
- Paul Hawken
Management is the process of planning, organizing, leading, and controlling the

activities of an organization effectively and efficiently to achieve its goals. It plays
a crucial role in every organization, especially in today's world that is much more
complex and where constant change is the norm. Organizations, therefore, need
to keep abreast of all these changes and managers need to be dynamic and
flexible to address the challenges that changes bring.
Management also provides the means to maintain a firm's competitive
advantage. It lays out the foundation of successful operations that lead to
efficiency and profitability, and establishes the link between the development of
strategies and their implementation and control, The effective application of
plans require skilled managers who are able to combine resources and capital
in executing strategies and sustaining the operations of their organizations.
EFFICIENCY AND EFFECTIVENESS
Efficiency is the ability to maximize output with minimum input. It is often
referred to as “doing things right," and seeks to limit the wasted input which is
costly for a business, There is an element of speed in efficiency since it requires
things to be done quickly to avoid wasting time and effort.
EFFECTIVENESS, meanwhile, is the capacity to attain an intended objective or

result. It is often called "doing the right thing" "The intention is to meet the
desired goal regardless of the amount of input required. Careful analysis and
critical thinking are present in effectiveness. If there is a goal that needs to be
achieved, the things that need to be done arc prioritized to achieve that goal.
FACTORS INFLUENCING MANAGEMENT
There are five factors that influence today's business environment. They are
globalization, technology, sustainability and corporate social responsibility,
psychology, and ecosystems.
GLOBALIZATION
Globalization refers to the phenomenon of growing interconnectivity and
interdependent relations between nations. This growth has been greatly
influenced advancements in technology, transportation, communication, and
education, as well as the gradual deregulation of trade. As a result, local
companies have now become part of a highly competitive global market that is
characterized by a wide audience and a great potential for increased profit.
TECHNOLOGY
Technology is one of the main driving forces of business. Advancements in this
area have immensely improved business trends. New technologies have
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rendered business functions and related tasks easier to accomplish, bringing
about increased levels of productivity.
Online tools and technology now allow managers to have a firmer control over
the different functions of the company, from receiving and carrying out orders
from the top management to managing every individual team member. At the
click of a button, the manager is able to view business transactions and
processes, determine the best courses of action, and identify areas of
improvement.
A significant phenomenon brought about by technology is outsourcing.
Outsourcing is defined as the transfer of an organizational function to a third
party. When the third party is located in another country, the transfer is called
offshore outsourcing or simply "offshoring".
Typically, outsourced business functions include information technology,
human resources, facilities and real estate management, accounting,
manufacturing, and engineering.
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY

Sustainability in business means that companies should plan and conduct
long- term business operations to ensure minimal negative impact on the social,
cultural, and economic aspects of their external environment or community.
Corporate social responsibility, meanwhile, is defined as the willingness of
companies to run their business operations in a sustainable and responsible
manner.
An example of sustainability in business is the implementation of cost saving
mechanisms such as recycling, reduction of energy consumption in the
workplace, and the use and production of environmentally friendly products.
Corporate social responsibility, on the other hand, is expressed through social
outreach programs, support of significant causes, and other forms of
philanthropic activities. Managers are continually challenged to implement
programs and processes that will enable their organizations to engage in
sustainable and socially responsible activities while maintaining their level of
productivity.
PSYCHOLOGY
The study of psychology is an important facet in management since it focuses
on developing people management skills and analyzing customer satisfaction. A
better understanding of psychological concepts such as motivation, behavior,
attitude, and personality is vital for effective management.
Psychology can help managers’ foster closer relations and better communication
with employees. Improved communication, in turn, enables managers to better
assess their employees, determine their strengths and weaknesses, and guide
them toward personal and professional development. Psychology also aids
managers in gauging and analyzing customer satisfaction and the external
business environment, enabling them to carry out sound decisions.
ECOSYSTEMS
A business ecosystem consists of a group of firms that provide related products
and services. The emergence of business ecosystems has resulted in
improvements and innovations in industries. A good example is the
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collaboration between telecommunication firms, media, and technology to
disseminate information to the public.
Having several key players in a business ecosystem presents each company a
wider perspective of their product or service. Thus, business ecosystems rely on
collective and collaborative action in carrying out organizational decisions.
Information sharing among organizations within a business ecosystem is crucial
in determining the direction that the industry should take, especially in
implementing significant changes that might impact their businesses and
external environment.
HIGHLIGHTS
▪ Management is a science because it contains a body of knowledge that
becomes the organizational framework of many companies. Management is
also an art because of the creativity applied in strategies, the innovations
used on new products and services, and the reliance on intuition in some
decisions.
▪ Efficiency is maximizing outputs while minimizing inputs. On the other hand,
effectiveness is the capacity to attain the intended objectives or results.
▪ Management plays an important role in laying out the foundation of a
profitable company strategy and attaining successful operations.
▪ The five areas that influence today's business environment are globalization,
technology, sustainability and corporate social responsibility, psychology,
and ecosystem.
▪ Management is the process of planning, organizing, leading, and

controlling the activities of the organization effectively and
efficiently to achieve organizational goals.
Direction: Write T if the statement is true. If the statement is false, write F.

1. The driving force of people to do business in a faster way is
communication.
2. Management is the process of planning, organizing, leading, and
controlling the activities of an organization effectively and efficiently to achieve
organizational goals.
3. Management is a science but not an art.
4. Efficiency is the quality of being able to maximize output with
minimum input.
5. Efficiency means "doing the right thing"
6. Some companies failed to implement their strategies because of the
lack of employees who will execute them.
7. Globalization enables people to do business in any part of the world.
8. Effectiveness means "doing things right”
9. Ecosystem can help manager foster closer relationship
10. Outsourcing is defined as the transfer of an organizational function
to a third party.
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Answer briefly the following questions. Do it in a long bond paper and submit your
output. 30 points each number
1. What important roles does management play in organization?
2. Should one become effective first before being efficient or it is the other
way around? Justify your answer
Direction: Write T if the statement is true and F if the statement is False

1. Management plays an important role in laying out the foundation of a
profitable company strategy and attaining successful operations.
2. There are six areas that influence today’s business environment
3. Effectiveness is the capacity to attain the intended objectives or results.
4. Employee has the responsibility to oversee the performance of manager
to ensure the delivery products with the minimum standards of global
competency.
5. Technology is one of the main driving forces of business.
6. Offshore outsourcing or simply Outsourcing
7. Ecosystem can help manager foster closer relationship.
8. Corporate Social Responsibility expressed through social outreach
program.
9. Management is a science as well as an art.
10. Approachable and close minded are important traits of managers?
1. Review the topics discussed in this chapter for Nature of Managements
2. Do you Agree that “Good management is the art of making problems so

interesting and their solutions so constructive that everyone wants to get to
work and deal with them.” Why?
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
________________________.
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Dr. Cynthia A. Zarate, Organization and Management, C & E Publishing
Inc. 2016
Job well done! You accomplished the module chapter 1. You can now proceed
to chapter 2.
You are really good and amazing for better outcome. Hoping that this
textbook will help you to find useful should you decide to venture into the world of
business and management in the future.
Never stop learning because at the end of the day you will be fame from your
own hard work.
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Organization and Management.
According to Brian Tracy “The true measure of the value of any business leader
and manager is performance”
In this chapter, you are about to explore the topic of tracing the evolution of
management theories, enumerating and discussing the theories on management,
and distinguishing management theories.
to venture into the world of business and management in the future. Let us now begin to
explore in this chapter because at the end of this unit you are expected to be able to apply
the management theories and principles in solving cases, hence, duties and
responsibilities of the students in performing their roles as the heart of management. Just
relax and read this lesson with LOVE and interest. If you meet some difficulties do not
Trace the evolution of management theories,

Enumerate and discuss the theories on management, and
Identify factors that influence management practices and trends, and
Assembly Line- the manufacturing process where products parts undergo

consecutive workstations as they get assembled into a final product.
Rule of Thumb- a general rule based on practice or experience rather than
facts or scientific evidence.
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Time and motion study- a technique wherein a job is divided into a
component parts and the time consumed in performing each task is
measured.
good you are.
Directions: Identify the terminology being defined. Choose your

answer inside the box and write it on the space provided.
1. Discipline 5. Abraham Maslow

2. Unity of command 6. 1100 BC
3. Frederick Winsloy Taylor 7. Administrative Management theory
_______ 1. This was introduced in the 20th century the Five Functions and
Fourteen principles of Management?
_______ 2. Expectations should be clearly set and violators of rules must be
punished.
_______ 3. He introduced the four principles of scientific management theory
_______ 4. Hierarchy of Needs
_______ 5. The Chinese used the four basic management functions of
planning, organizing, leading and controlling
Managers today are wrestling with the same problems and issues that
confronted business people and leaders many years ago. Management skills
have been utilized since ancient times, when tribal leaders organized hunting
and gathering groups to acquire resources from nature. The rise of civilizations
have led leaders to organize communities and implement more complex tasks
such as the construction of infrastructures, the administration of governments
and even the conduct of war. The emergence of capitalism during the 17th
century inspired entrepreneurs to establish guiding principles and develop
means to ensure the success of any business venture. Theories and views
regarding management soon developed and grew into an organized field of study
whose ideas are applied not only in business but also in other aspects of life.
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THE DEVELOPMENT OF MANAGEMENT
Ancient civilizations practiced management in organizing and
implementing various activities vital to their communities. In 1100 BC, the
Chinese used the four basic management functions of planning, organizing,
leading, and controlling to carry out vast infrastructure projects and manage the
various parts of the expanding Chinese empire. The Greeks developed a scientific
approach to work, and the Greek philosophers Socrates and Plato discussed
management concepts such as leadership and job specialization. The ancient
Romans, meanwhile, practiced decentralized management to effectively manage
their vast empire. During the medieval period, Venetians improved production
by standardizing the assembly line, using an inventory system, and building
warehouses. In the course of time, leaders and managers often utilized trial and
error in dealing with management problems before they could perfect operations.
The Industrial Revolution of the 18th century introduced great changes in
management practices. The emphasis on production brought about by improved
industry generated a demand for new ways of ensuring efficiency and
effectiveness in factories and workplaces. By the 19th century, management has
become an established discipline and many entrepreneurs and academics
sought new ideas and approaches improving the workplace. Manufacturing and
industry soon became a core business in Europe and the United States, and
many individuals sought to enter the commercial world. By the 20th century,
educational institutions were established to focus on the study of business and
management. The first business school in the United States, the Wharton
School, was founded in Pennsylvania in 1881. In 1900, the Amos 'Tuck School
was founded in New Hampshire and became distinguished as the first school to
offer a master's degree in business administration.
The 20th century saw the development of modern management theories
and innovative methods that transformed production and led to the development
of modern industry and commerce. Various entrepreneurs applied scientific
principles in improving the level of productivity of their respective businesses.
Businessmen sought to establish the most efficient means of utilizing resources
and production processes to manufacture the greatest number of products in
the shortest possible time.
SCIENTIFIC MANAGEMENT THEORY
Scientific management is a theory of management which

studies the application of scientific methods and principles
for the purpose of redesigning the work process to increase
efficiency. It emphasizes the importance of labor in the
production process and focuses on improving the efficiency
of workers in production. Among its important advocates Frederick W. Taylor
were Frederick W. Taylor, Henry Gantt, and Frank and Lillian
Gilbreth. Frederick W. Taylor, an American engineer, was the first to advocate
scientific management. He pioneered Frederick Winslow Taylor several
innovations during his tenure as foreman at Midvale Steel Company in
Philadelphia. Taylor discussed in depth the scientific management theory in his
book The Principles of Scientific Management. He introduced the four principles
of scientific management as follows:
1. Replace rule-of-thumb methods with those that are scientifically proven.
2. Select, train, and develop each worker based on scientific methods.
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3. Cooperate with the workers to ensure that scientific methods are being
observed and implemented in their work.
4. Divide work between managers and workers to ensure that the managers
apply the scientific management principles in planning the tasks and the
workers apply the principles while performing these tasks.
Taylor emphasized efficiency in improving the production process. He
believed that analyzing the work process will enable the manager to identity the
best way of doing things. His work, combined with the research of Frank and
Lillian Gilbreth on the same topic, led to the development of the time and
motion study. It is a technique wherein a job is divided into component parts
and the time consumed in performing each task is measured. Taylor is called
the "Father of Scientific Management" because of his contributions to the
development of management. His ideas were also considered an important
cornerstone of the Efficiency.
ADMINISTRATIVE MANAGEMENT THEORY
Administrative management focuses on the overall
management of an organization, emphasizing the role of
managers as Administrators of the organization. This was
introduced in the early 20th century by Henri Fayol, a
French industrialist. Fayol identified five functions and
fourteen principles of management.
The five functions are planning, organizing, Henri Fayol
communicating, coordinating, and controlling. The
fourteen principles of management are as follows:
1. Division of work into specialized tasks, with specific duties and
responsibilities given to individuals
2. Authority of managers to delegate work and tasks to the employees. The
employer turn, are expected to comply and exercise their tasks responsibly.
3. Discipline where expectations should be clearly set and violators of rules
must be punished.
4. Unity of command where an employee should only report to one supervisor.
5. Unity of direction which means that the efforts of the employees are guided
toward the attainment of organizational objectives.
6. Predominance of the general interest of the organization over the individual
interests of employees
7. Remuneration of the efforts of the employees which should be systematically
rewarded in line with the organization's vision and mission
8. Centralization where the roles of all employees are clarified, with emphasis
on the distinction between superior and subordinate roles
9. Scalar chain which means that communication should be open within the
chain of command
10. Order where the organization of jobs and materials must be done in an
orderly fashion
11. Equity which means that fairness and order must be practiced to maintain
employee commitment
12. Stability and tenure of personnel to actively promote employee loyalty to
the organization
13. Initiative to encourage employees to act on their own in support of the
organization's objectives
14. Esprit de corps to promote teamwork and the unity of interest between the
employees and the management.
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Max Weber, a German sociologist, contributed to the
development of administrative management through his studies
on public administration and bureaucracy. Weber considered
bureaucracy as an important aspect of modern society, and its
emergence is an indication of people adopting a more rational
and law-based view on leadership. Weber believed that
bureaucratic structures allow for specialization of skills and
enable workers with different traits, skills, and goals to work
together and contribute toward performing a common task.
Henri Fayol
Other contributors to the development of the Administrative
management theory were Chester Barnard and Mary Parker Follet. Barnard, a
former president of the Jersey Bell Telephone Co. wrote the functions of the
Executive, which highlights the major functions of the senior executive, namely
1. To formulate the organization's mission,
2. To hire key employees, and
3. To maintain organizational communication.
Meanwhile, Follet wrote the Dynamic Organization, which emphasizes the
ever-changing situations that managers have to deal with. In particular, Follet
recognized the human element in management and emphasized collaboration
and mutual cooperation in seeking solutions to problems.
HUMAN RELATIONS THEORY
The human relations theory grew out of the human

relations movement in the 1930s. It focuses on the social
element in the workplace and considers the influence of
interpersonal relationships, social conditioning, and group
norms in determining the performance of workers.
The foundations of the human relations movement were
established in the 1920s with the pioneering studies of
Elton Mayo, an Australian psychologist who used his Elton Mayo
expertise to implement improvements in the workplace. He
and his colleagues embarked on a series of studies on workers in the Hawthorne
Works factory of the Western Electric Company. Among the innovative outcomes
of the Hawthorne studies were the introductions of a set number of work hours,
the implementation of break times for workers, improvements in lighting in work
areas, and close supervision by managers. Managers were encouraged to be
supportive of their workers and to actively involve them in management
decisions. Mayo observed that the introduction of these changes resulted in
increased satisfaction among workers which also resulted in their increased
overall productivity.
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Another noted contributor to
the field of human relations is
Abraham Maslow. Maslow argued
that individual behavior is primarily
influenced by certain needs. He
described these needs according to
a hierarchy where people try to satisfy first their lower-level or basic needs, such
as food, clothing, and shelter, and then progress upward to the higher-level
needs such as self-esteem and self-actualization. In 1970, Maslow revised his
original 1954 pyramid and added two more essential needs: cognitive needs or
the need to acquire knowledge; and aesthetic needs or the need to create and
experience beauty, balance, and structure. The application of Maslow's theory
in management requires managers to ensure that the essential needs of their
workers are being met in the workplace to guarantee their maximum
performance.
QUANTITATIVE MANAGEMENT THEORY
Quantitative management uses quantitative approaches such as statistical
analyses and computer simulations to arrive at a management decision. The two
main branches of quantitative management are management science and
operations management.
Management science uses mathematics in problem solving and decision
making. It seeks to create ideal models that will be the basis for improved
business operations and processes. On the other hand, operations
management seeks to apply ideas and models from management science to the
actual workplace in dealing with managerial situations.
Management information system, meanwhile, is a most recent subfield of
quantitative management. It gathers past, present, and projected data from
external and internal sources and transforms them into usable information
which managers use to select the best alternatives and make decisions easily.
The information is usually provided in easily accessible formats such as
spreadsheets.
SYSTEMS THEORY
The systems theory explains how interrelated parts operate together to achieve
a common purpose. With the advent of the Industrial Revolution and the
increasing requirements for increased efficiency and greater precision in
production and operations, the systems approach became the preferred model
of business organization and management. It defines an organization as a
system which is composed of four elements:
1. Inputs (materials/human resources)
2. Transformation processes (technology/managerial operations)
3. Outputs (products/services)
4. Feedback (reactions from the environment)
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The contemporary systems theory analyzes an organization according to the
degree to which it is open or closed. An open system refers to an organization
that interacts closely with its environment and is fully aware of what is going on
in the environment as well as the changes it experiences. A closed system, on
the other hand, does not interact with its environment and pays little attention
to changes in its surroundings.
CONTINGENCY THEORY
The contingency theory argues that universal theories cannot

be applied to organizations because each organization has
unique characteristics and is confronted by varied problems or
challenges. An organization's performance is also affected by
internal and external factors. This perspective was introduced
in 1967 by Fred Fiedler, an industrial and organizational
psychologist who studied the relationship between leadership
and group effectiveness. Fiedlers contingency model states that
the personality of the leader determines how well he or she
addresses situations in the workplace. Other experts such as Paul Lawrence,
Jay Lorsch, and Fred Fiedler James Thompson studied the impact of
contingency factors on the organizational structure. The structural contingency
theory was the dominant paradigm of organizational structural theories for most
of the 1970s.
QUALITY MANAGEMENT THEORY

Quality management emphasizes consistency in an
organization and minimal to no errors or defects, in
production. This ensures quality products and services that
result to high customer satisfaction and increased revenue.
Managers and employees are both closely involved in quality
management.
The quality management perspective emerged after the
Second World War, primarily through the work of William
Edwards Deming Deming conducted his work in the 1950s in
post-war Japan, as he helped Japanese industries improve
production. His methods involved statistical process control (SPC) and problem-
solving techniques. The significant principles espoused by Deming include
improved product design for improved service, uniform product quality,
improved product testing, and increased market sales. Meanwhile, Joseph
Moses Juran also worked with Japanese businesses and introduced his concept
of quality management which emphasized training for top and William Edwards
Deming middle managers. In 1979, he established the Juran Institute which
guided organizations in improving the quality of their products and services.
These efforts contributed toward making Japan an industrial power in Asia
within a decade after the Second World War.
The Japanese concept of kaizem, introduced in 1986, focuses on the continuous

improvement of people, processes, and products. Kaizen is a Japanese word
which means change for the better," and requires the implementation of gradual
changes in an industry or organization over a certain period. In the
implementation of changes all employees are involved, from the top management
down to the office personnel, factory workers, janitorial staff, and even external
stakeholders. The Japanese automotive manufacturer, Toyota, has been using
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kaizen to implement small improvements geared toward overall improvement in
production and operations.
HIGHLIGHTS
▪ Developments during the Industrial Revolution led to the emergence of
manufacturing as the primary industry for majority of US companies.
Business schools soon opened and contributed to the development of modern
management theories.
▪ The scientific management theory emphasized the application of scientific
principles in improving labor efficiency. Advocates of this view included
Frederick W. Taylor, Henry Gantt, and Frank and Lilian Gilbreth.
▪ The administrative management theory focuses on the role or managers as
administrators of the organization. Henri Fayol proposed fourteen principles
of management which consisted of the following:
1. Division of work 8. Centralization
2. Authority 9. Scalar Chain
3. Discipline 10. Order
4. Unity of Command 11. Equity
5. Unity of Direction 12.Stabilityand tenure of personnel
6. Predominance of the general interest 13. Initiative
7. Remuneration 14. Esprit de corps
• The human relations theory focused on the social element in the workplace
and encouraged managers to foster close social relations with their workers.
Contributors to this field include Elton Mayo and Abraham Maslow
▪ The quantitative management theory uses quantitative approaches in
arriving at management decisions. Management science applies mathematics
in problem solving and decision making, while operations management
applies ideas and models to the actual workplace. Management information
systems organize and present data to aid managers in making decisions.
▪ The systems theory describes the organization as composed of various that
work together to achieve a common goal. It categorizes business
organizations as either open or closed systems.
▪ The contingency theory considers the unique characteristics of managers, as
well as the effect of environmental factors, in addressing management
problems and situations. This perspective believes that a single management
method or leadership style cannot address all concerns regarding
management.
▪ The quality management theory emphasizes consistency in an organization
and the production of high-quality products and services. Quality must be
continually maintained through regular evaluation, testing, and the
implementation of improvements in the organization
Management principles have been practiced since ancient times.

The Chinese have been practicing the four management functions
as early as 1100 BC. Meanwhile, the Greeks have developed a
scientific approach to management and the Romans practiced
decentralized management in managing their vast empire. During
the Medieval Period, the Venetians standardized the assembly line.
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Direction: Match each concept or examples to its corresponding management
theory. Write the letter of your answer in the blank.
1. Assembly Line of Ford’s Model T a. Administrative Management Theory

2. Hawthorne Studies b. Human Relationship Theory
3. Equal Division of work among c. Quantitative Management Theory
Managers and workers d. Systems Theory
4. Kaizen e. Contingency Theory
5. Input, transformation process, f. Quality Management Theory
Output and feedback g. Scientific Management Theory
6. Maslow’s hierarchy of needs
7. Esprit de corps
8. Mathematics in problem solving and
Decision making
9. Fiedler’s Contingency theory
10. Open and closed system
You may choose ONLY ONE OPTION either option 1 and 2 in doing the
module Job.
OPTION 1: Using your creative mind, record and do a vlog.

Topic: Evolution of Management Theories. In your vlog or recording, what
are the influence of every Theories. Make sure that the audience will be able to
acquire knowledge and learn something new through your vlog. SUBMIT YOUR
OUT PO TO YOUR GC.
OPTION 2: DRAW and CUT the person behind the Evolution of Management
then color the person to add beauty. Do it on a bond paper and attach it to this
page. CONGRATULATIONS!
CRITERIA PERCENTAGE
APPROPRIATENESS TO THE TOPIC 50%
(minimum of 5 minutes maximum of
10 minutes).
UNIQUENESS 50%
• CREATIVITY
• STRUCTURE
TOTAL 100%
16
Directions: Identify the terminology being defined. Choose your answer
inside the box and write it on the space provided.
1. Discipline 6. Abraham Maslow

2. Unity of command 7. 1100 BC
3. Frederick Winsloy Taylor 8. Administrative Management theory
4. Order 9. Max Weber
5. Quantitative Management 10. Elton Mayo
1. Organization of jobs and materials must be done in

an orderly fashion
2. a German sociologist and he studied on public
administration and bureaucracy.
3. He introduced the four principles of scientific
management theory
4. The Chinese used the four basic management
functions of planning, organizing, leading and controlling
5. Statistical analysis and computer simulations to
arrive management decision.
6. Hierarchy of Needs
7. He introduced the four principles of scientific
management theory
8. Expectations should be clearly set and violators of
rules must be punished.
9. An employee should only report to one supervisor
10. He introduced the Human Relation Theory
1. Review the topics discussed in this chapter the ‘’ Evolution of Management’’

Inc. 2016
Job well done! You accomplished the module chapter 2. You can now
proceed to chapter 3.
textbook will help you to find useful should you decide to venture into the
world of business and management in the future.
Never stop learning because at the end of the day you will be fame
from your own hard work.
A manager of your own business just remembers all the theories and
apply what is best for you that will be benefited of your own effort
Goodluck
17
According to Agha Hasan Abedi “The conventional definition of management is

getting work done through people, but real management is developing people
through work”
Managers perform the main managerial functions in the organization and

assume different roles in the performance of their duties. This results in the
assignment of diverse responsibilities to managers which in turn create the
different levels of organizational hierarchy. That is why they should be equipped
with the skills needed to manage the organization well.
to venture into the world of business and management in the future. Let us now begin
to explore in this chapter because at the end of this unit you are expected to be able to
apply the management theories and principles in solving cases, hence, duties and
responsibilities of the students in performing their roles as the heart of management.
Just relax and read this lesson with LOVE and interest. If you meet some difficulties do
not hesitate to ask your teacher to unlock your difficulties. Enjoy
Identity the main functions of management

Determine the roles of managers,
Discuss the key skills of managers, and
Describe and compare the levels of management
Stakeholders- groups of people that may be affected by the actions, policies,

or decision of a particular organization. Examples are supplier, customers,
employees, government agencies, the local community and owners or
investors.
18
Subordinates- the employees under the authority or control of a superior or
manager in an organization.
good you are.
Directions: Choose the letter of the correct answer. Write your answer
on the space provided.
_________1. Refers to a management functions wherein managers identify and
select the company’s goal in order to achieve them.
a. Planning c. Leading
b. Organizing d. Controlling
_________2.This level is so called “senior management” or “upper management”
a. Top-level Management c. Lower Level Managers
b. Middle level Management d. All of the above
_________3.Refers to the manager’s ability to analyze a particular situation.
a. Conceptual Skills c. Technical Skills
b. Human Skills d. None of the above
_________4.This is an organization in such a way that employees are grouped
together to perform job or task.
a. Organizing c. leading
b. Planning d. Controlling
_________5. It requires manager to identify any deviations from the strategies
and method uses in attaining the company’s objectives.
a. Controlling c. leading
b. Planning d. Organizing
THE PROBLEM-SOLVING MANAGER

focuses on providing solution to every problem of
the company. This manager also concentrates on
achieving the company's goals. However, managers of
this type sometimes tend to overdo the task of solving
19
every problem which affects his or her overall performance.
THE PITCHFORK MANAGER threatens employees to work towards a goal. This
manager employs fear tactics and uses an "iron hand" to push employees for
results to avoid consequences. He or she is characterized as tough and rude.
THE PONTIFICATING MANAGER neither

follows any strategy nor prepares for any
situation or task and usually ends up with
inconsistent results. The strength of this
manager is his or her ability to make
people feel at ease when
he or she is around since listening to others is second nature to him or her.
However, this over friendliness usually hinders his or her leadership decisions
and results in a less systematic approach to problems therefore affecting his or
her overall performance.
THE PRESUMPTUOUS MANAGER thinks only

of himself or herself. This type of manager is not
a team player and usually works for personal
gain or interest. He or she breeds unhealthy
competition instead of cooperation and
teamwork.
This type of manager is characterized as being
too proud and overconfident and has the
tendency to compete with the members of the team. More often than not,
members of the team resign or leave the company because of poor management.
THE PERFECT MANAGER is open to change and
personal growth. However, he or she can be very
mechanical and may lack the interpersonal skills to
interact more closely with his or her team members.
He or she just concentrates on facts and figures, for
example, about the product or service being offered.
THE PASSIVE MANAGER wants to please

everyone and make the team members happy.
However, being a crowd pleaser becomes a
hindrance because of his or her lack of drive and
assertiveness to manage the team.
This type of manager is described as very

timid in his or her approach to avoid any confrontation with anyone especially
from the members of his or her team.
THE PROACTIVE MANAGER possesses the
good qualities of the other types of managers.
He or she has the drive of the problem-solving
manager to spearhead solutions, the
persistence of the pitchfork manager, the
enthusiasm of the pontificating manager, the
confidence of the presumptuous manager, the
passion perfect manager for continued growth,
and the desire of the passive manager to serve.
20
Every manager should strive to become a proactive manager who embodies the
true traits of an outstanding manager.
MAIN MANAGEMENT FUNCTION

The key management functions are planning, organizing, the actions, policies,
leading, and controlling. They can be summarized in the model below.
PLANNING is the management function wherein managers identify and select

the company's goals and determine the corresponding courses of action in order
to achieve them. As planners, the goal for managers is to improve the company's
overall performance by formulating strategies to be implemented.
ORGANIZING refers to structuring the business organization in such a way that
employees are grouped together to perform jobs or tasks. The organization
ensures that the employees are able to perform efficiently and coordinate
effectively to achieve the company's goals. Each group of employees is assigned
a manager who oversees the employees as they perform their assigned tasks.
In LEADING, managers help the company achieve its objectives by influencing
their subordinates to perform the tasks assigned to them. Managers encourage
the employees to live the company's vision in their job performance. They also
ensure the employee commitment to the organization.
CONTROLLING requires managers to identify any deviations from the strategies
and methods used in attaining the company's objectives. The manager then
implements corrective actions to maintain or improve performance.
LEVELS OF MANAGEMENT
21
Managers can be classified into different levels of management, i.e., lower level
managers, middle-level managers, and top-level managers.
TOP-LEVEL MANAGEMENT
This level is also called "senior management" or "upper management. The
managers in this level have titles such as Managing Director, Chief Executive
Officer, Chief Operating Officer, Executive Vice President, and Chairman of the
Board, among others. These managers must have extensive knowledge in
management and must be multiskilled and analytical. They must also be aware
of the business environment where their organization operates, especially its
target market. Senior managers are responsible for determining and
implementing strategic, long-term decisions for the company.
MIDDLE-LEVEL MANAGEMENT
Middle-level managers are assigned to supervise specific units or departments
within the company, and are highly-specialized in managing the tasks and
operations of their assigned units. They are also responsible for carrying out the
decisions made by the top-level management and applying them to their units.
They also coordinate with lower level managers in implementing strategies and
meeting the goals of the company. Middle-level managers have titles like
Department Head, Plant Manager, and Division Manager, among others.
LOWER-LEVEL MANAGERS
Managers in lower-level management are also called "frontline managers" o
supervisors." These managers usually directly oversee employees or workers and
are tasked with carrying out the decisions communicated by middle managers.
They also oversee the daily operations of their respective areas and handle
routine administrative tasks. These managers are often called Supervisor,
Coordinator, and Office Manager.
MANAGEMENT ROLES
In his book Strange World of Organizations, Henry Mintzberg identified ten
manager roles, which he categorized as interpersonal, informational, and
decisional management roles.
INTERPERSONAL MANAGEMENT ROLES
22
ROLES DESCRIPTION
1. Figurehead The manager performs social, inspirational, legal
and ceremonial duties. The manager is a symbol
and must be on hand for people or agencies that only
deal with him or her because of status and authority.
2. Leader The leader role is at the heart of manager-
subordinate relationship and managerial power.
The leader is a pervasive presence among
subordinates, although the relationship between the
leader and other members of the group tend to be
indirect.
3. Liason As a liason, the manager is an information and
communication center. A liason builds and
maintains relationship with other companies.
Liasons use these contacts to gain access to
information that is vital for the company, such as
facts, requirements and probabilities.
INFORMATIONAL MANAGEMENT ROLES

ROLES DESCRIPTION
1. Monitor The manager seeks and receives information from
various sources to evaluate the organization’s
performance, well-being, and situation.
2. Disseminator The manager communicates external information to
the organization and facilities information exchange
between subordinates. The information being
disseminated can either be factual or value-based.
3. Spokesperson The manager relays information to the other groups
and entities of the company. Key influencers and
stakeholders are kept informed of company
performance, plans and policies.
DECISIONAL MANAGEMENT ROLES

ROLES DESCRIPTION
1. Entrepreneur The manager designs and initiates new
opportunities to the company. An entrepreneur is a
risk-taker and is often involved in start-ups and new
projects.
2. Disturbance The manager communicates external information to
Handler the organization and facilities information exchange
between subordinates. The information being
disseminated can either be factual or value-based.
3. Resource allocation As a resource allocator, the manager oversees and
controls resource allocation by evaluating major
decisions involving resources. Managers develop
appropriate models and plans in conducting their
evaluation.
4. . Negotiator As a negotiator, the manager takes charge of

communicating and negotiating with other
organizations, and even among the members of the
23
Company. Negotiation is a vital task of all managers.
MANAGEMENT SKILLS
Whether at the top, in the middle, or low-level management, managers should
possess the following key management skills:
1. Conceptual skills refer to the manager's ability to analyse a particular
situation, identify new opportunities and resources, and decide on the best
strategies and courses of action.
2. Human skills include the manager's capacity to motivate, lead, and control
the behaviour of his or her subordinates. A manager should know how to
effectively communicate, coordinate, and relate with his or her employees.
3. Technical skills are the specific competencies that a manager should have
in relation to the type of task assigned to him or her. It is also related to the
specialization manager needed in a particular department, unit, or area where
he or she is assigned.
HIGHLIGHTS
▪ The three major roles of managers are the interpersonal, informational and
decisional roles. Under the interpersonal role, managers act as figurehead,
leader, and liaison. In the informational role, managers monitor, disseminate,
and obtain and deliver relevant information for the organization. For the
decisional role, managers act as entrepreneur, disturbance handle, resource
allocator, and negotiator of the company.
▪ Managers should possess key management skills effectively perform their
duties. These skills are conceptual skills or the ability to analyze and solve
different kinds of problems and scenarios; human skills that include a
proficiency in dealing and transacting with different kinds of people; and
technical skills, which refer to competitive skills required in their respective jobs.
▪ Managers can be classified into three levels of management. The top-level
management is responsible for strategic decisions for the company. The middle-
level management is responsible for carrying out the decisions of the top-level
management. The lower-level management consists of managers or supervisors
who report to middle managers and are responsible for the employees or workers
them.
The main functions of management are planning, organizing,

leading, and controlling.
24
Direction: Match column A with column B. Write the corresponding letter
of your answer in the space provided.
1. In this interpersonal role, the Manager assumes social,

A. Human Skill
Inspirational, legal and ceremonial duties
2. In this level of management, manager make strategic B. Organizing
And long term decision. C. Conceptual Skill
3. It is a managerial skill that include the capacity to
Motivate, lead, and control the behavior of his or her D. Supervisor
subordinates. E. Technical Skill
4. It is a management function which involves the
Structuring of the business organization so that F. Leader
Jobs or task are grouped together and the employees work G. Figure head
together to achieve company objective.
H. Decisional
5. It is another term for lower-level managers
6. It is the role of managers where he or she handles I. Top management
Disturbances among employees, allocates resources, J. Middle Manager
And identifies and negotiate for possible opportunities
For the company
7. It is a management function where managers help the
Company to achieve its objectives by influencing their
Subordinate to perform assigned to them.
8. It is the manager’s ability to analyze a particular situation
Identify new opportunities and resources and select the best strategies and
courses of action.
9. The management level carries out the decision of top-level management.
10. It refers to the specific competencies that a manager should have in
Relation to the type of task assigned to him or her.
Answer briefly the following questions. Do it in a long bond paper and submit your
output attach it to this page. 30 points.
3. Based on your Judgment, which among the ten roles of management are the most
and least important role in a company? Justify your answer?
25
Directions: Choose the letter of the correct answer, write it on the space
provided.
________1. It is the role of managers where he or she handles disturbances among

employees, allocates resources, and identifies and negotiate for possible opportunities
for the company
a. Decisional c. Informational
b. Interpersonal d. All of the above
________ 2. Refers to a management functions wherein managers identify and
select the company’s goal in order to achieve them.
c. Planning c. Leading
d. Organizing d. Controlling
________3. In this interpersonal role, the Manager assumes social, Inspirational,
legal and ceremonial duties
a. Leader c. Liason
b. Figurehead d. Monitor
________4. This level is so called “senior management” or “upper management”
a. Top-level Management c. Lower Level Managers
b. Middle level Management d. All of the above
________5. It is a type of manager which focuses on providing solution to every
problem of the company?
a. The Pitchfork Manager c. The Problem-Solving Manager
b. The Presumptuous Manager d. All of the above
________6. Refers to the manager’s ability to analyze a particular situation.

c. Conceptual Skills c. Technical Skills
d. Human Skills d. None of the above
________7. The manager possesses the good qualities of the other type’s
managers.
a. Problem Solving Manager c. Perfect Manager
b. Pitchfork Manager d. None of the above
________8. This is an organization in such a way that employees are grouped

together to perform job or task.
c. Organizing c. leading
d. Planning d. Controlling
________9. It requires manager to identify any deviations from the strategies and
method uses in attaining the company’s objectives.
c. Controlling c. leading
d. Planning d. Organizing
________10. Is also called “front line managers” or “supervisor”
a. Lower- Level Management c. Lower-level Managers
b. Lower-level Managements d. Lower-level Manager
26
1. Review the topics discussed in this chapter. Identify one of the Mangers
that can be found in your place and be able to interview him/her. 20 points
Question:
What are the things that you learn that could relate to our topic after you interview the manager from
you place?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
Dr. Cynthia A. Zarate, Organization and Management, C & E Publishing Inc.

2016
textbook will help you to find useful should you decide to venture into the world
of business and management in the future.
Never stop learning because at the end of the day you will be benefited of
your own hard work.
Soon you will be a manager of your own business, what type of manager
are you? Be kind and do what is best for your business especially love your
employees
27
According to Paul Hawken “Good management is the art of making problems so

interesting and their solutions so constructive that everyone wants to get to work
and deal with them.”
The external environment is a major factor that influences a company's

operations. It has a significant effect on the operations of the business and is often
beyond the control of the manager. A good understanding of the business environment
will enable managers to identify opportunities and challenges, anticipate changes and
developments, and formulate plans and decisions that will benefit their respective
business firms.
Identify the various forces of the firm's environment,

Discuss SWOT and PEST analysis,
Employ SWOT and PEST analysis in analyzing the business environment
of a firm and in
Economic Growth- an increase in the amount and value of goods and services
produced by an economy for a certain period of time.
Exchange rate- the price of a nation’s currency in comparison to foreign
currency. This is used as bases for changing one currency into another
28
Inflation rate- how fast the general level of the price of goods and services
increases. Normally, the central bank of any country tries its best to control
inflation so the economy will run smoothly.
good you are.
Directions: Encircle the letter of the correct answer.

1. Of a company contribute to its good performance
and a positive reputation in the business scene.
e. Strength c. Opportunities
f. Weaknesses d. Threats
2. These attributes may hinder the company’s growth and performance.
c. Strength c. Threats
d. Weaknesses d. All of the above
3. The acronym of P for PEST is .
e. People c. Political
f. Politic d. Policies
4. Are external factors which may negatively impact the company?
e. Strength c. Opportunity
f. Weaknesses d. Threats
5. Are factors or events that can give a positive impact to the company
if properly addressed.
e. Opportunities c. Threats
f. Strength d. Weaknesses
THE ENVIRONMENT OF THE FIRM
The business firm's environment refers to the conditions and elements that
define its operations and determine its success. There are two types of the firm's
environment. These are the internal and external environment.
29
THE INTERNAL ENVIRONMENT consists of elements that have a direct impact
on the business operations. These include the employees, the board of directors,
and the managers. The elements of the internal environment are directly
controlled and can be freely modified by the firm itself.
THE EXTERNAL ENVIRONMENT consists of factors that have indirect but

significant influence on the operations of the business. These factors, however,
cannot be controlled by the firm. There are two types of external environment:
1. Microenvironment is also known as the "operating environment." It consists
of the customers, suppliers, regulatory agencies, and competitors. The
factors in this environment have a direct relevance to the business operations
but are uncontrollable to a certain action.
2. Macroenvironment is also known as the general environment." It consists of
the economic, political, social, legal, and technical environment of the business
organization. The factors in this environment are beyond the control of the firm
but are important determinants of success.
A successful business understands the changes in its external environment to
take advantage of opportunities provided by these changes. Companies gather
information on the external environment by conducting environmental scanning
and strategic analysis.
STRATEGIC PLANNING: SWOT and PEST ANALYSES

To adequately deal with the forces of the external environment, managers and
decision-makers apply certain techniques in gathering and analyzing
information and subsequently conducting strategic planning. Strategic planning
techniques such as the SWOT analysis and PEST analysis consider the elements
of a firm's internal and external environment in formulating business plans and
decisions. SWOT analysis is primarily used to analyze the microenvironment,
while PEST analysis is conducted to the firm's macro environment.
SWOT Analysis
SWOT analysis is a technique that identifies the Strengths and Weaknesses of a
company, as well as the Opportunities and Threats it faces. In conducting this
analysis, it is imperative to note that strengths and weaknesses are part of the
company's internal environment, while opportunities and threats are part of its
external environment.
30
STRENGTHS include the company's attributes that give a competitive edge over
others. The strengths of a company contribute to its good performance and a
positive reputation in the business scene. Strengths may include being a market
leader, having a good brand image, providing quality products and services, and
having a good reputation in the business. Other strengths include good credit
standing, competent and highly skilled staff, excellent distribution channels,
outstanding communication and network systems, and a good number of
patents.
On the other hand, WEAKNESSES are the attributes of a company that need to
be improved or changed. These attributes may hinder the company's growth and
performance. Examples of weaknesses are lack of access to technology, limited
distribution channels, poor location, lack of facilities and equipment, and poor
transportation system.
OPPORTUNITIES are factors or events that can give a positive impact to the
company if properly addressed. Opportunities come in different forms like new
markets, potential profits, additional sources of raw materials, increased
purchasing power of consumers, better location, and new users or customers.
THREATS are external factors which may negatively impact the company. These
are trends, changes, or movements over which the company has no control but
should be addressed to maintain its status in business. Some examples are
increase in the price of resources, entry of new competitors, and high inflation
rates.
SWOT analysis is a quick and easy technique in analyzing business situations.

It is a versatile tool that can be applied at the different levels of the company.
One can conduct SWOT analysis for the entire company, or just focus on one
department or business operation. SWOT analysis is more effective if managers
use clear and accurate data and analyze the factors in an objective manner. Its
main advantage is that it enables managers to understand their business better,
particularly in terms of how the company's internal environment aligns with the
external environment. It also helps the company figure out its advantage in the
industry or market. This technique, however, is not very effective when dealing
with more complicated issues and factors that cannot be clearly assigned to only
one category. Such factors may be both considered strength and a weakness of
the company.
PEST ANALYSIS
PEST analysis is a method used in analyzing the Political, Economic, Social, and
Technological forces affecting the company. This technique focuses on the
factors that define the microenvironment of the business.
POLITICAL FACTORS
Political factors include laws, regulations, and restrictions that may intervene or
affect the company's business course. Significant political factors include t
Affect Businesses must comply with rules and regulations imposed by the
government, and compliance requires managers to adjust their operations
accordingly. Companies are required and by the government to comply with the
Minimum Wages Law in determining the wages their employees.
31
Businesses also have to comply with the required legal documents, pay fees and
secure permits before they begin their operations. Another significant factor for
business are zoning restrictions. For instance, the Makati Business District does
not allow manufacturing plants in its area to prevent pollution. Manufacturers,
therefore, construct their facilities and plants in designated industrial areas
away from the metropolis, such as in Canlubang, Laguna. Additionally, factories
in Laguna, especially those near Laguna Lake, have to comply with regulations
imposed by the Laguna Lake Development Authority to avoid emission of
pollutants into the lake.
ECONOMIC FACTORS
Economic factors directly affect the capability of business to generate profits.
These include economic growth, interest rates, exchange rates, and inflation
rate. For example, a high inflation rate affects the acquisition of raw materials
of a restaurant. Therefore, if one of the restaurant's prime commodities is
burgers, an increase in the price of beet may cause the restaurant to increase
its price. The increased price, in turn, will affect consumer preference and may
result in decreased sales.
SOCIAL FACTORS
Social factors include demographic aspects such as age, group affiliation,
religion, civil status, and the economic status of consumers. Companies focus
on information regarding their target market, particularly it’s buyıng habits,
attitudes, ethics, personalities, and values.
Firms usually shape their products or services based on their target market.
Companies that sell instant noodles target consumers who are always on the go
or have limited time to prepare home-cooked meals. Services such as laundry
shops cater to people who are unable to do their own laundry or who have no
helpers to do their laundry for them.
TECHNOLOGICAL FACTORS
Technological factors include research and development activities automation
licensing, patenting, technological shifts, and outsourcing decisions. An
important technological factor at present is the Internet, which has greatly
improved the way business functions are done. Social media has introduced new
venues for promoting and marketing products and services. Purchasing,
delivery, promotion, and customer service have been revolutionized by
technology. Production operations have greatly improved through automation.
Companies, therefore, need to keep track of the latest technologies and
determine ways that these can aid in their business processes.
Since the PEST exclusively focuses on the macro environment of the firm, it can
guide managers to identify the reasons why their business is growing or failing
within a certain environment. It also helps the company identify new direction
for growth and expansion.
32
THE BENEFITS OF STRATEGIC PLANNING USING SWOT AND PEST
ANALYSES
SWOT analysis and PEST analysis help companies in formulating strategies and
aligning their vision and mission to the general direction of the busıness
environment where they operate. One major similarity between the two
techniques is focus on aspects of the external environment. SWOT analysis
focuses on the external environment through the threats and opportunities,
while all aspects of PEST analysis consider the external environment of the
business firm. It is recommended that the information gained from PEST
analysis be used in identifying the opportunities and threats in SWOT analysis.
Using these techniques, emerging companies may be forewarned about
significant threats and opportunities that may hinder of boost sales. Those who
are about to venture into new projects can have a more objective view of the
business environment, enabling them to make insightful business decisions that
will guarantee the success of their business.
HIGHLIGHTS
▪ The SWOT analysis and the PEST analysis provide companies with a more
objective view of the business environment and enable managers to
recognize opportunities and effectively address threats.
SWOT analysis is a technique used in identifying the Strengths,

Weaknesses, Opportunities, and Threats that define a company.
Strengths and weaknesses are part of the internal environment, while
opportunities and threats are part of the external environment.
On the other hand, PEST analysis is a method used in analyzing the
Political, Economic, Social, and Technological factors that influence the
firm.
Direction: Match the condition to the kind of environment it is associated with

and the classify the type of factor in SWOT analysis. 2 points each number
SWOT
CONDITIONS ENVIRONMENT (strengths, weaknesses,
(External or Internal) opportunities, and threats)
1. High inflation rate
2. Lack of management
skills of middle
managers
3. Good corporate
integrity
SWOT
CONDITIONS ENVIRONMENT (strengths, weaknesses,
(External or Internal) opportunities, and threats)
4. Eco-friendly products
33
5. More source of new
materials
6. New Competition
7. Lack of advertisement
and other forms of
promotion
8. Poor brand image
9. Unpredictable weather
condition
10. Poor customer
service
Answer briefly the following questions. Do it in a long bond paper and submit
your output. 10 points each number.
1. What is the purpose of conducting SWOT analysis? How does it benefit
the business firm?
2. What similarities can you find between SWOT and PEST analysis?
Directions: CIRCLE the letter of the correct answer.

1. The acronym of P for PEST is .
a. People c. Political
b. Politic d. Policies
2. ______ is a factor directly affects the capability of business to generate profits.
a. Economic Factors c. Political Factors
b. Social Factors d. None of the above
3. Are external factors which may negatively impact the company?
a. Strength c. Opportunity
b. Weaknesses d. Threats
4. It includes research and development activities, automation, licensing,
patenting, technological shifts, and outsourcing decisions.
c. Technological Factors c. Lower Level Managers
d. Middle level Management d. All of the above
5. This is used as basis for changing one currency into another.
c. Economic Growth c. The Problem Solving Manager
d. Exchange rate d. None of the above
6. Are factors or events that can give a positive impact to the company
if properly addressed.
a. Opportunities c. Threats
b. Strength d. Weaknesses
7. Is also known as the “operating environment”
c. Internal Environment c. Macro environment
d. Microenvironment d. None of the above
34
8. Of a company contribute to its good performance and a positive
reputation in the business scene.
a. Strength c. Opportunities
c. Weaknesses d. Threats
9. Is also known as the “general environment”
a. Internal Environment c. Macro environment
b. Microenvironment d. None of the above
10. It is include demographic aspects such as age, group
affiliation, religion, civil status, as the economic status of consumer.
a. Social Factors c. Political Factors
b. Economic Factors d. All of the above
1. Review the topics discussed in this chapter SWOT AND PEST.

2016
your own hard work.
Just look at the SWOT and PEST for a better outcome of your business or
organization. Be kind and do what is best for your business.
35
My dear students, personally, I would like to welcome you all to the world
of Organization and Management.
According to Stephen Kinzer “Alliances and partnerships produce stability

when they reflect realities and interests.”
One of the decisions a business owner should carefully assess is the way
his or her business is formed and structured. In selecting the form of
business organization, the owner should consider the size and nature of
the business, the level of control, the expected profit, tax implications, and
vulnerability to lawsuits. These considerations will determine the type of
business organization that a company will be shaped into.
identity the forms of business organization,

discuss the types of business
Discuss the different phases of economic development
Affiliate- a company associate that holds a minority stake in the ownership

of the parent company.
Liabilities- debts and obligations owed by a company to creditors in the
course of its business operations.
Retail price- the selling price of goods to the consumers.
36
Securities and Exchange Commission (SEC)- the government agency
tasked with regulating and monitoring business organizations and
corporations
Subsidiary- a Company owned by another company or a parent company
good you are.

1. ________ is companies owned by one person who is usually hands –on in
managing day to day activities.
a. Sole Proprietorship c. Partnership
b. Corporation d. None of the above
2. A is owned by five to fifteen owners called shareholders and enjoys a
personality distinct from its owner.
a. Corporation c. Cooperative
b. Corporated d. Collateral
3. A partnership is shared by who mutually agree on the method
of decision making and profit –and-loss sharing.
a. Three or more members c. Two or more members
b. Five or more members d. Two or three members
4. A has capital stock divided into shares and dividends

a. Security Exchange c. Cooperative
b. Stocks Corporation d. Stock Corporation
5. The minimum paid up capital required of corporations in the Philippine is
.
a. P 500. c. P 5,000
b. 5,000. d. 500
FORMS OF BUSINESS ORGANIZATION

There are three forms of business organizations based on ownership
structure. These are sole proprietorship, partnership, and corporation. A wise
manager should consider the characteristics of the business organization that
he or she wishes to establish in making the business plan as cash presents
unique advantages, opportunities, and challenges.
Sole Proprietorship
37
Sole proprietorships are companies owned by one person who is usually
hands-on in managing the day-to-day activities. Many Small businesses start in
this type of business ownership. Sole proprietors own the entire business,
including all assets and profits.
Since they own all the assets, sole proprietors are also responsible for all the
liabilities of the business. Assets are resources with economic value that are
owned and controlled by the business owners. Examples of assets are facilities,
equipment, machinery, cash, office supplies and raw materials. Liabilities are
debts or obligations which arise in the course of the business operations.
Sole proprietors are also considered single taxpayer and are assigned a single
Tax Identification Number (TIN). Owners also apply for a business trade name
and register the business with the Department of trade and Industry.
ADVANTAGES AND DISADVANTAGES OF A SOLE PROPRIETORSHIP
The main advantage of a sole Proprietorship is that it is the most

manageable and least expensive form of ownership. Proprietors have complete
control over the business and can make decisions based on their own judgment.
Thus, it is easy to implement changes in the business setup. Furthermore, if
desired by the owner, the business can also be easily dissolved.
However, the disadvantage is that sole proprietors have unlimited liability since
they assume all the debts of the business. This may put personal assets at risk
when the business experiences losses. Obtaining additional capital is also
difficult because of a low guarantee of profitable returns to lenders. There is
also a possibility that highly skilled employees will not be attracted to work in
the business because of the low chance to advance in their careers and to get
attractıve compensation package.
PARTNERSHIP
Partnership is a form of business organization
Where Ownership of the business is shared by
two or more members. The partners mutually
agree as to how decisions will be made and how the profits and losses will be
shared. They also agree on how future partners will be admitted and how
disputes will be resolved legally. The amount of contribution, the type of work to
be inputted, and the time to be devoted by each partner is also outlined to ensure
a clear distinction of responsibilities.
Under the Civil Code of the Philippines, a partnership is considered juridical
person or an entity having a separate legal personality from the partners. A
partnership can either be a general partnership or a limited partnership.
General partnership is a form of partnership wherein the partners have

unlimited liability for the debts and obligations of the partnership.
Limited partnership is a form of partnership wherein one or more general
partners have unlimited liability and the limited partners have liability that is
only up to the amount equal to their capital contributions.
38
ADVANTAGES AND DISADVANTAGES OF A PARTNERSHIP
One of the advantages of a partnership is its wider capital base. Having more
partners involved in the business allows for diversification of the contributed
monetary funds, skills, and resources. Expansion is also easier since there are
more people who will manage the different branches of the business. In addition,
those who would like to be employed in the partnership may be attracted by the
incentive of becoming a partner later on.
One disadvantage of a partnership is that partners are jointly liable for all
the obligations and effects stemming from the decisions of the other partners.
Unless the individual responsibilities and liabilities are clearly delineated, this
may cause disagreement among the partners. Partnerships have a limited life
because of its general instability. This instability is not referring to business
unprofitability but rather to several internal factors which make the partnership
vulnerable to dissolution. These internal factors include the death, withdrawal,
or insolvency of a partner.
CORPORATION
The third form of business organization is
the corporation. A corporation has a
distinct personality separate from its
owners. This means that it is treated like
an individual person with benefits from
certain rights as well as obligations and
responsibilities. A corporation can enter
into contracts, secure loans, sue and be
sued, hire employees, and pay taxes.
A corporation has minimum of five and a maximum of fifteen owners who are
called shareholders. Each shareholder owns a part of the company and has
some authority over its direction. Shareholders elect a board of directors who
oversee the major policies and decisions of the corporation.
A corporation is owned and established under the Corporation Code and
regulated by the SEC. The shareholders of a corporation are also registered with
the SEC and are assigned at least one share of the company stock. The total
shares of the company stock that shareholders may acquire will depend on the
capital they have invested into the company. The minimum paid-up capital
required of corporation in the Philippines is P 5,000.
THERE ARE TWO TYPES OF CORPORATION

A stock corporation has capital stock divided into shares and dividends.
Surplus profits are given to shareholders depending on the number of shares
held.
A non-stock corporation does not issue shares of stock and is established
primarily for Public interests such as a foundation for charitable, educational,
social, cultural, and other similar purposes.
ADVANTAGES AND DISADVANTAGES OF A CORPORATION

One of the advantages of a corporation is its limited liability to its shareholders.
They can only be held accountable for their individual investment of shares in
39
the corporation. Another advantage is that a corporation can deduct the benefits
it provides to it employees and consider them as expenses. It also has a general
stability since the death or withdrawal of one shareholder does not result in its
dissolution.
PHASES OF ECONOMIC DEVELOPMENT

Developments in the global economy are influenced by changes in two significant
aspects: (1) the capacity to produce or manufacture and (2) the capacity to
distribute or transport. Begınning in the 16th century, the global economy has
experienced five major phases of economic development:
Economic Time Period Overview

Phase
The rise of major European colonial
powers such as Spain and Portugal
brought about the emergence of the
mercantilist system of trade. In this
economic phase, countries
accumulated wealth Mercantilism
Mercantilism Mercantilism 1500 1780 1500 1780 through trade relations
with other countries and colonies.
Other empires like India and China
were not as active in global trade and
were restricted to trading within their
regional markets. Methods of
production remained unchanged,
relying on methods and processes
developed during the Middle Ages.
Industrial 1780-1880 Production and distribution became

Revolution mechanized since many businessmen
saw the benefit of investing in
machines and equipment. Large
factories were established and there
was also an increase in employment.
Industrial cities emerged and trade
flourished. Transportation was
improved with the construction of
canals, waterways, roads, and
railroads and these enabled the
quick and easy transport of raw
materials and finished goods over long
distances.
Fordism 1880 -1970 This phase saw the rise of
multinational corporations through the
pioneering work of Henry Ford of Ford
Motor Company. Ford introduced a
standardized production process for
his Ford Model automobile which
resulted in increased production and
profit. Ford's innovation led to the
introduction of the assembly line, a
production process where the
40
assembly of an automobile is done,
usually along a moving conveyor, with
workers performing specific and
repetitive tasks in a series. Ford also
introduced the electric motor in his
factory which greatly improved
efficiency, leading to lower production
costs. During this period, the term
"Fordize" became popular and this
meant "to standardize a product and
manufacture it by mass means at a
price so low that the common man can
afford to buy it.
In this phase, production was no

longer confined to manufacturing
plants and could be done anywhere in
the world through methods and
information technology. Computer-
controlled tools and efficient
Post-Fordism 1970-2010 techniques customized and tailored the
production process to a particular
location. The internet provided a more
convenient medium for communication
among consumers, suppliers investors,
and employees, enabling easy access
and purchase of products as well as
their quick delivery to
Customers.
Globalization 2010-present Phase The current economic phase is

the age of globalization where
companies are operating within a
global marketplace and economy. This
has given rise to the establishment of
regional economic organizations that
enable companies from different
countries to engage in free trade with
each other. This period is also
characterized by stiff competition
among companies and the
Constant need to maintain quality in
order to attract customers. Another
important concern in this period is
sustainability, which refers to the
conduct of business operations with
due regard to its effects on the
environment.
HIGHLIGHTS
41
▪ The five phases of economic development are Mercantilism, Industrial
Revolution, Fordism, Post-Fordism, and Globalization. During the age of
Mercantilism, countries used trade to accumulate wealth and build colonial
empires. The Industrial Revolution introduced more efficient production and
operations and mechanization in factories. Fordism gave rise to modern
production methods and the rise of multinational corporations beginning
with the Ford Motor Company. The Post-Fordism period saw the prevalence
of information technology in business transactions. At present, we are at the
age of Globalization which is defined by economic interrelationships on a
regional and global scale, and an emphasis on sustainable development.
▪ A partnership is shared by two or more members who mutually agree on the
method of decision making and profit-and-loss sharing. A partnership has a
wider capital base and is able to expand easily. The partners, however, are
all liable for the obligations that arise from the decisions of other partners.
The death, withdrawal, or insolvency or one partner may put the whole
business at risk of dissolution.
▪ A corporation is owned by five to fifteen owners called shareholders and

enjoys a personality distinct from its owners. It therefore enjoys rights and
responsibilities just like an individual. The corporation is the most stable type
of business organization with limited liability to shareholders. However, the
process of forming a corporation is complicated and it is also closely
monitored by the government.
▪ A sole proprietorship is owned by one person who handles all the day-to-day
activities of the business. It is the most manageable and least expensive form
of business. However, the owner has unlimited liability and may find it
difficult to acquire additional capital.
There are three form of business organization: sole proprietorship,

partnership, and corporation. Each Form has its own advantage and
disadvantage for the business owner.
IDENTIFICATION
Directions: Identify what is being ask in the item below. Write your answer on
the space provided before the number.
1. A business organization composed of a minimum of 5
to a maximum of 15 owners called shareholders.
2. A business organization composed of two or more
owners.
3. A business organization that has one owner
4. An economic Phases which countries accumulated
wealth through trade relations with other countries and colonies
5. This phase saw the rise of Multinational Corporation
through the pioneering work of Henry Ford of Ford Motor Company.
42
6. An economic phase where companies are operating
within a global market place and company.
7. In this phase, computer-controlled tools and efficient
techniques customized and tailored the production process to a particular
location.
8. Types of Corporation which public interest such as
foundation for charitable, educational, social, cultural, and other similar
purposes.
9. A company associate that holds a minority stake in the
ownership of the present company.
10. Are debts or obligations which arise in the course of the
business operations.
3. Why do you think that company must be registered first by the Security
Exchange Commission (SEC)?
4. Which do you prefer sole proprietorship, partnership and corporation and
Why?

1. A company associate that holds a minority stake in the ownership of the
present company
a. Affiliate c. appeliate
b. Afeiliate d. affeliete
2. Are resources with economic value that are owned and controlled by the
business owners?
a. Liabilities c. single
b. Assets d. Corporation
3. A is owned by five to fifteen owners called shareholders and enjoys a
personality distinct from its owner.
a. Corporation c. Cooperations
b. Corporated d. Collateral
4. The selling price of goods to the consumers.

a. Liabilities c. Retail Price
b. Assets d. Subsidiary
5. Types of Corporation which public interest such as foundation for charitable,

educational, social, cultural, and other similar purposes.
a. Non-stock Corporation c. Assets
b. Stock Corporation d. Liabilities
6. A has capital stock divided into shares and dividends
a. Stack Corporation c. Stoocks Corporation
b. Stocks Corporation d. Stock Corporation
43
7. A partnership is shared by who mutually agree on the method
of decision making and profit –and-loss sharing.
a. Three or more members’ c. Two or more members
b. Five or more members d. Two or three members
8. ___________ own the entire business, including all assets and profits.
a. Sole Proprietorship c. Corporation
b. Partnership d. None of the above
9. The minimum paid up capital required of corporations in the Philippine is

.
a. P 500. c. P 5,000
b. 5,000. d. 500
10. A is owned by five to fifteen owners called shareholders and

enjoys a personality distinct from its owner.
a. Corporation c. Cooperations
b. Corporated d. Collatera
1. Review the topics discussed in this chapter Business Organization

Inc. 2016
your own hard work.
Choose and decide if what forms of business organization you desire in the
near future. Be kind and do what is best for your business. Remember “Life is
what we make it” and we are the driver of our own destiny.
44
“Whenever you see a successful business, someone once made a

courageous decision.” A popular word according to Peter F. Drucker
As individuals, we are confronted with the task of planning our daily activities.
This requires that we determine our own personal resources and establish a
system that will make use of these resources efficiently in achieving our personal
goals. Effective planning enables us not only address business situations but
also to improve the way we conduct our personal lives. Planning is a primary
management function that determines and outlines the system to be followed by
the business. The system is composed of frameworks that define the operations,
tasks, and relationships within the business. Establishing a system requires
organizing the business into companies, plants, units, and groups. Systems are
defined by inputs, processes, outputs, and outcomes. Inputs include raw
materials, money, technology, and people. These enable the company to conduct
its various and operations. Outputs are tangible results of business processes
such as product of services. Outcomes refer to the impact brought about by
outputs. They include benefits to consumers, workers remuneration, and
environmental and social impacts.
Discuss the Nature of Planning,

Enumerate and discuss the different types of planning
Apply appropriate planning techniques and tools in business situations.
Alternatives- possible actions that manager can choose from in making

decision.
45
Documentation- recorded data that can be presented as print material,
online content, and other media.
good you are.
Recall the things you do to prepare yourself for a day in school. Answer the
following questions 2 points each question.
1. What are the first things you prepare when packing your bag for school
forward to in school?____________________________________________________
2. Why are these things important for you day in school?_______________ ____
_________________________________________________________________________
3. What activities do you look forward to in school? _________________________
_________________________________________________________________________
_________________________________________________________________________
Aside from school activities, what other tasks or activities do you prepare for?
_________________________________________________________________
_________________________________________________________________________
Do you believe that planning and organizing your activities for the day is
beneficial for you? ______________________________________________________
THE NATURE OF PLANNING
PLANNING Is a primary management function. It involves setting the direction

and goals of an organization, establishing a system that will define the activities
of the organization and formulating a plan to ensure that the system works
toward achieving the goals of the organization. Planning is significant because
it is the initial task that defines all the other management functions. All levels
of management conduct planning. 'Top management defines the goals and
comes up with general plans, which are then given to lower management. Lower
managers conduct their own planning to implement the general plans and come
up with concrete means to achieve the goals of top management.
Planning is by nature an intellectual exercise. Because decision making is a very

crucial part in planning, meticulous deliberation is required. Goals must be
clearly established, and these should adhere to the vision and mission of the
46
company. Strategies should be presented in detail to clearly determine the
course the company will take in achieving its goals.
Planning is also a continuous process. Strategies may be revised and changed
depending on the circumstances, and these changes have an impact on the
operations of the company. The company has to quickly adapt to these changes
to ensure that it is still on track toward achieving its goals.
TYPES OF PLANNING
There are three main types of plans that a manager uses in devising
strategies to achieve company goals.
1. STRATEGIC PLANS - These plans are designed by the top management such
as the CEO or president. These are usually broad plans based on the company's
vision, mission, and values, and address the company as a whole. They are used
as bases for more specific plans that will enable the company to achieve growth
and profitability, boost productivity and return on investment, and improve
customer service.
2. TACTICAL PLANS - While strategic plans involve the company as a whole,

tactical plans create specific plans for specific areas of the company. These plans
translate broader plans into functional goals for each area or department. The
elements of tactical plans include budget, resources, and goals with specific
deadlines.
3. OPERATIONAL PLANS- These are specific procedures and processes made

by frontline or low-level managers. Operational plans often involve specific
events such as marketing campaigns, campus recruitment, and others.
Operational planning also involves formulation of on-going plans that define
specific operations of the organization. On going plans can be in any of the
following forms:
a. Policy - a set of principles that guide managers in addressing a particular
issue
b. Rule-a regulation which describes and regulates the functions of an
organization
C. Procedure - a step-by-step process in accomplishing a task or achieving an
objective
Planning within an organization requires the combination of these three

types of plans. Strategic plans are necessary for tactical planning to commence.
Tactical plans, in turn, are used as bases for the formulation of operational
plans.
PLANNING TECHNIQUES AND TOOLS
Planning requires managers to develop and propose alternative courses of

action. Several qualitative and quantitative tools are used to ensure the
selection of the best course of action.
47
There are three qualitative techniques that can be used in planning. These
are as follows:
1. Brainstorming- This is a common technique used by groups of planners in

selecting a common solution for a problem. It stimulates thinking and allows
the group to work together in generating ideas. There are no restrictions to
the flow of ideas and every member is encouraged to give his or her thoughts
regarding the plan. The free flow of ideas, however, makes this technique
more informal and unstructured.
2. Nominal group technique - This is a highly structured method that allows

members to give their own inputs based on an agenda. The structured and
formal nature of this method restricts personal discussion among group
members and minimizes conflict during discussions. Also, the risk of one
member dominating the planning is also limited, since all opinions in this
method are considered to be equally important.
3. Delphi technique -This is also a highly structured technique similar to the

nominal group, However, the difference lies in the means of formulating courses
of action. This technique does not require a group meeting. Rather, the group
leader distributes questionnaires to all group members to collect and assimilate
their ideas. In this technique, the participants in planning do not need to know
each other. It is the group leader that facilitates the collection of data and
manages the flow of information. Through this technique, the participants can
avoid personality conflict and groupthink or the tendency of the members of the
group to conform to the prevailing opinions of the group.
One of the advantages of this technique is that no one can dominate the
group or influence decisions.
Planning is also more objective and there is an assurance that the

decisions arrive at are a product of an objective and well- thought-out process.
Apart from qualitative techniques, managers can also employ quantitative

tools in planning and decision-making. These are the following:
1. Decision tree - It 1s an excellent tool for weighing different alternatives. It

consist a graph showing potential and alternative decision paths for the
proposed plan. This method is especially useful for decisions that involve a
succession of small decisions. All alternatives, from the most likely to the
most unlikely ones, are given equal weight. Afterwards, the possible
consequences for each proposed path are analyzed to guide in formulating
the potential and alternative paths for subsequent decisions.
48
2. Payback method- Managers use this method in evaluating alternatives in
purchasing equipment, furniture, and fixture. Managers consider certain
factors such as length of use or utility, warranties, cost of repair, maintenance
cost, and sales generated for a specific period before actually buying the product.
Usually, managers choose the alternative that result in the quickest payback of
the initial cost.
HIGHLIGHTS
▪ There are three main types of plans that manager will use to achieve
company. These are strategic plans, tactical plans and operational plans.
Strategic plans are designed by top management and address the company
as a whole. Tactical plans are more specific plans that target specific areas
of the company and aim to translate strategic plans into functional goals.
Operational plans define the tasks and actions that need to be done in order
to achieve tactical plans. Contingency plans are also made to deal with
unexpected changes or address problems that may arise in implementing the
company’s plans.
Planning is a primary management function. It involves setting an

organization's direction and goals, establishing a system to achieve the
goals, and working to ensure that the system follows the intended direction
of the company.
.
49
Direction: Identify what is being describe in each item below Write the correct
answer in the space provided.
1. These are plans made by top management.
2. These plans support strategic plan because they
become specific plan used in a particular area.
3. These are plans need in order to achieve tactical
plans.
4. It is a primary management function
5. It is a set of principles that guide managers in
addressing a particular issue
6. This is a common technique used by groups in
selecting a common solution for a problem.
7. This is also a highly structured technique similar
to the nominal group technique
8. It is an excellent tool for weighing different
alternatives
9. These are ongoing plans that step-by-step process
in accomplishing a task.
10. This is highly structured method that allows
members to give their own inputs based on agenda.
5. Why is planning considered a primary management function?

6. Choose one planning techniques and explain how this can benefit the
manager?
Directions: Write T if the statement is TRUE and if the statement is FALSE

write F. Write your answer on the space provided.
1. Strategic Plans is designed by the middle management such as CEO or
Director.
2. Policy is a circle of principles that guide managers in addressing a
particular issue?
3. Planning is a primary management functions.
4. Role is a regulation which describes and regulates the functions of an
organization?
5. The elements of Tactical plans include budget, resources, and goals
without specific deadline
6. Payback method the manager uses this method in evaluating in
purchasing equipment, furniture, and fixtures.
50
7. Decision Tree is an excellent tool for weighing different alternative
8. Delphi Technique does require a group meeting?
9. Brainstorming used by group of planners in selecting a common
solution for a problem
10. Procedure is a step-by-step process in accomplishing a goal or
achieving an objective.
1. Review the topics discussed in Planning and decision making.
Dr. Cynthia A. Zarate, Organization and Management, C & E

Publishing Inc. 2016
your own hard work.
Planning and decision making are the ingredients for your overwhelming
business. Just follow what is in your mind and in your heart but never
uture
forget that entering in a business profession must do first a planning
and decision making.
Let us think this one “Power of mind”.
51
“An organization, no matter how well designed, is only as good as the
people who live and work in it”.
- Dee Hock.”
Organizations exert a great influence on many aspects of human life.
Every day we deal or transact with establishments such as schools, hospitals,
department stores, shops, and drugstores. These establishments are
composed of people, resources, and activities that have been arranged in such
a way that they are able to effectively carry out their specific tasks or
objectives. Though each organization is defined by different goals and
objectives, they are all established through a common process. A good
manager must be knowledgeable regarding the organization process to ensure
that an effective system is established to carry out the objectives and
strategies formulated in the planning stage.
Now my dear students fasten your seatbelts to travel and to find a
useful decision to venture into the world of business and management in the
future. Let us now begin to explore in this chapter because at the end of this
unit you are expected to be able to apply the management theories and
principles in solving cases, hence, duties and responsibilities of the students
in performing their roles as the heart of management. Just relax and read
this lesson with LOVE and interest. If you meet some difficulties do not
Discuss the nature of organizations and the organizing process

distinguish the various types of organization structures
apply organization theories in analysing businesses and
Other organizations,
Diversity – variations or differences in certain characteristics of things or

people. Diversified products may feature varied designs, color, and uses,
52
while a diversified workforce is composed of people of varied ages, civil
status, and races.
Red Tape - to0much rigidity or excessive conformity to rules and
regulations that paralyzes decision making and action in the organization
good you are.
Directions: CHECK the letter of the correct answer.
1. This organizational theory integrates all the management

approaches and identifies a specific approach to be applied in the situation
at hand.
a. Contingency Theory c. System Theory
b. Scientific Management d. None of the above
2. This organization theory was developed by Frederick Taylor when he made

innovation in industrial engineering, particularly the time and motion study.
3. This organizational Structure which indicates the communication and work
relationship between employees and managers.
a. Work Specialization c. Chain of Command
b. Departmentalization d. Span of Control
4. This Organizational Structure combines features of functional and divisional
structures.
a. Network Organizational c. Functional Organizational Structure
Structure
b. Divisional Organizational d. Matrix Organizational Structure
Structure
5. This organizational element refers to the number of employees a manager can
effectively and efficiently manage.
a. Span of Control c. Formalization
b. Degree of Centralization d. Chain of command
NATURE OF ORGANIZATIONS
The term "organization became prominent in management during the late
1920s and early 1930s. Some theorists define it as a social group that is oriented
toward a purpose. Several other theorists define an organization as having well-
coordinated processes and interacting with its environment. Putting these ideas
together, an organization is thus defined as a social group that has well-
coordinated processes and activities for the purpose of achieving its objectives
and is, connected to the environment where it exists.
53
Organization as a management function entails the structuring and
grouping of jobs and ensuring that these are performed by qualified and
competent personnel. The organizing process brings together all the human,
physical, and financial resources and integrates them with related jobs and
positions. This process also ensures that authority and responsibility are well-
defined and internally coordinated within the organization.
A manager performs the organizing function based on the following steps.
First, essential activities are identified. Once this is done, related activities or
tasks are grouped into departments or units. For example, the finance
department of a company is organized to bring together related tasks or
functions such as bookkeeping, accounts payable, accounts receivable, and
credit and collection.
After the jobs are grouped, the authority given to managers is classified
and defined. This is called hierarchy. This clarifies the line or authority of top-
level, middle-level, and low-level management and avoids confusion among
employees as to who their immediate superiors are. Once authority is defined,
specific responsibilities are determined for managers. Level managers are
informed as to whom they directly report to, the positions that will be reporting
to them, and the people that they will be handling the illustration below
summarizes the organizing process.
ORGANIZATIONAL DESIGN AND STRUCTURE

The overall design of an organizational structure focuses on three aspects:
work activities, reporting relationships, and departmental grouping options. The
organizational design identifies the essential tasks and operations of the
company, establishes effective work relationships, and divides the company into
departments that will contribute toward achieving its goals and objectives. The
organizational structure is the framework that shows how each Component of
the company relates to each other.
CONFIGURATIONS AND ELEMENTS OF ORGANIZATIONAL STRUCTURE

An organizational structure can be configured or arranged in two ways-a
mechanistic structure and an organic structure. A mechanistic structure is a
rigid and tightly controlled structure that resembles a bureaucracy. The flow Of
communication and job responsibilities are carefully delineated and decisions
are mostly made from the top, Mechanistic structures are common in stable
environments and are applicable to companies with uniform customers and
operations. Its advantage is that it maximizes efficiency while minimizing costs.
However, a mechanistic structure discourages individual initiative and
innovation because of its tight controls.
An organization that employs an organic structure, meanwhile, is more
flexible and highly adaptable. The organization is decentralized and less formal,
54
and employees are given broader responsibilities based on the current needs of
the company. Employees are also empowered and given accountability for their
actions.
Organizational structures also have six key elements that contribute to
determining aspects of the organization such as work relationships, hierarchy,
and communication processes. These elements are the following:
1. Work specialization which refers to the way jobs are divided into steps
or individual task. In an organization, several individuals perform individual
tasks required to complete a job. If a job or operation is composed of several
tasks, then several individuals must be hired to perform these tasks. Employees
specialize in a specific task or aspect of the job or operation.
2. Departmentalization which refers to the grouping of similar functions,
jobs, and tasks into departments. Departmentalization may be functional,
where personnel and tasks related to a single company operation are grouped
together. Examples or functional departments are marketing, production,
human resources, administration, finance, legal, and purchasing. Divisional
departmentalization, meanwhile, groups personnel and resources based on
product, service, process, geographic location, or customer. A company may
organize itself into geographic divisions with Luzon, Visayas, and Mindanao
departments. Each division has its own set of functional departments.
3. Chain of command which indicates the communication and work
relationship between employees and managers. It indicates who reports to
whom. The chain of command is defined by three underlying principles.
Authority is the right inherent in a managerial position to give directions or tell
people what to do and expect them to undertake it.
Responsibility is the obligation to perform duties assigned to an
employee. Finally, unity of command requires that an employee should only
report to one superior.
4. Span of control which refers to the number of employees a manager
can effectively and efficiently manage. Recent trends result in many businesses
employing larger span of control for managers/One reason tor this is that a
greater span increases flexibility and speeds up decision-making. Another is that
employees are more empowered; less supervised, and are given more
opportunities to work independently. For this to be effective, workers must be
trained well. Managers ensure that their workers know the job thoroughly and
can relieve or replace anyone when necessary.
5. Degree of centralization which refers to the extent authority and
decision-making is given to a small group of people in the organization.
Centralization occurs when major decisions are made by the top management
and the decisions and actions of lower management and employees must have
approval from the top. It is common in business with stable business
environments. It is also undertaken in times of crisis when the top management
takes charge of making important decisions. Decentralization occurs when
lower management is allowed to make important decisions. It is applicable to
companies that are widely dispersed in several areas, or with businesses that
encounter uncertain business environments.
6. Formalization which is the process of standardizing jobs and
establishing rules and guidelines that guide employees. It helps in providing
consistency in the procedures and job responsibilities of the employees. A
55
company with a high degree of formalization has clear job descriptions and
policies that govern its activities and employee behavior.
SIMPLE ORGANIZATIONAL STRUCTURE
A simple organizational structure is the most basic structure and is
applicable to small businesses where majority of the power and decision-making
rests on the owner. his allows for quick decision-making and hands-on
interaction with the day-to-day activities or the firm. Businesses following this
structure are easily maintained. Accountability is also easily determined
because the owner has the sole authority and responsibility in running the
business.
Owner/Manager
Employee 1 Employee 2 Employee 3

Figure 2.Simple Organizational Structure
The disadvantage of this structure is that it is heavily reliant on the

business owner. If the owner is not around to oversee operations, the
organization cannot address opportunities and challenges effectively. The
dependence on a single individual may limit the activities and growth of the
business.
THE FUNCTIONAL ORGANIZATIONAL STRUCTURE
The functional organizational structure emphasizes hierarchy and

specialızation among departments. A functional organizational structure
enables a company to establish clear professional identities among its
employees, since they are given positions and ranks in line with their areas of
expertise or specialization. This structure, however, may also bring about
competition among employees assigned to different departments. For instance,
the manufacturing department will step up their production and make more
products while the sales department will devise strategies to sell more products.
These actions focus on the specific goals of each department but may also
contribute to the achievement of the general goals of the company if there is
proper coordination among departments. If each department, however, focuses
only on their specific department and ignores the others, problems may arise.
56
DIVISIONAL ORGANIZATIONAL STRUCTURE
One of the advantages of a divisional structure is that it allows employees
in each division to concentrate on their own division's performance. Employee
supervision and issue handling are more specific because these are
concentrated in a particular division. However, this type of organizational
structure leads to duplication of functions, expertise, and resources and is more
costly to maintain. There may be too much independence among divisions,
thereby discouraging camaraderie and synergy among employees.
MATRIX ORGANIZATIONAL STRUCTURE

The matrix organizational structure combines features of functional and
divisional structures. The matrix structure is often used in larger companies
and is set up as a grid where employees have dual reporting relationships.
Additionally, the flow of authority of the functional manager is vertical, while
that of a project manager is horizontal.
One of the advantages of the matrix structure is that employees from
different departments can be selected to work on a project. Management,
therefore, can select the best combination of talent to work on a specific project.
57
This kind of setup is beneficial to the personal and professional growth of
employees. A matrix organizational structure can also quickly respond to a
market or customer demand because of the time frame allotted for the project.
Meanwhile, the disadvantage of this structure is that there is conflict of
interest among project managers and functional managers in the allocation of
resources. Conflict of loyalty is also an issue among employees since they are
reporting to two managers, the project manager and the functional manager.
The number of managers involved entails high administrative costs for the
company. The employees also have heavier workload because they have
additional work in the project aside from their regular tasks.
Figure 7. Matrix Organizational Structure
TEAM-BASED ORGANIZATIONAL STRUCTURE

A team-based organizational structure is a horizontal design structure that
organizes employees into teams whose members perform varied functions.
Employees work together in accomplishing various tasks, seeking solutions to
problems, and identifying and engaging in business opportunities. The allotted
time for each task is maximized since the hierarchy of management levels is
removed, which simplifies the task of reporting to immediate superiors and top
management. Furthermore, productivity is increased since the entire group is
working for a common goal, and the talents and skills of each employee is
maximized. However, one disadvantage is time management since coordinating
the teams requires constant communication and frequent meetings. Employees
may also lack motivation since team performance is valued rather than
individual contributions.
Figure 8.Team-based Organizational structure
NETWORK ORGANIZATIONAL STRUCTURE

A company using this structure hires only a few employees, which
amounts to lesser costs for salaries and benefits. A company enjoys more
flexibility and can be more responsive to change since all the functions are
outsourced. However, the disadvantage is that independent firms may be hard
to monitor. To do so, the company may have to spend for expensive equipment
to monitor these firms. There is no corporate culture and employee loyalty is
questionable.
58
OTHER TYPES OF ORGANIZATIONS
In 1989, Henry Mintzberg expanded the classification of organizations into

a more detailed list of types in his book, Mintzberg on Management. These
classifications are the following:
1. Entrepreneurial organization - The power in this type of organization is
focused on the chief executive. Usually, the staff is small and informal, with a
loose division of labor and little management hierarchy.
2. Machine organization - Decision-making is centralized and there is a

distinction between line and staff. Tasks are routine and highly specialized, and
these are grouped based on functions. Communication within the organization
is formal.
3. Diversified organization - The central administration is called headquarters
and there is a set of semi-autonomous units or divisions under a central
administrative structure.
4. Professional organization- This type of organization has standardized
products and services and employees usually do routine work. This organization
is commonly found in hospitals, universities, and public agencies. A professional
organization depends on the skills and knowledge of its professional staff.
5. Innovative organization- This system is considered as a modern
organization which is flexible and does not utilize planning and control systems.
Multidiscipline teams are formed and the firm hires experts who are trained,
experienced, and are not restricted by traditional specializations.
6. Missionary organization-The mission is the main focus of this type of
organization. This mission is clear, distinct, and inspiring the employees are able
to identify with the firm's purpose and are motivated to enthusiastically work to
achieve the company's mission.
ORGANIZATION THEORIES
Through the years, management has uncovered
several theories applicable to organizations. These
theories establish standardized approaches in defining
the basic structures, processes, components,
objectives, and environments of organizations.
BUREAUCRACY
In the late 1800s, Max Weber expressed dissatisfaction
with the way companies were managed because they were run
like families/He believed that this management approach was
59
more informal and did not have the potential of being
successful since power, authority, and loyalty were
misplaced; employees were loyal to their superiors rather
than the organization. This prompted him
to introduce the theory of bureaucracy which emphasizes a formal rigid
structure and legitimate authority in organizations, / Relationships are strictly
impersonal and free from personal interests. Laws and regulations are set for all
employees to follow, and a chain of command is established and strictly followed.
Each role within the hierarchy is defined and employees are organized to work
together.
Today, bureaucracy is associated with formality, rigidity, and low
commitment. However, its distinguishing features such as formalization,
specialization, and hierarchy make it especially suited for organizations with
routine tasks. Implementing a bureaucracy also helps avoid conflict of interest
among employees. The formalization and standardization within a bureaucracy
are highly applicable to the military, police, hospitals, and other organizations
where performance relies heavily on formal relations and strict standards.
SCIENTIFIC MANAGEMENT
Frederick Taylor became a controversial figure
in the field of management when he introduced
his theory of scientific management. While he
made improvements in industrial engineering,
Particularly with time and motion studies, his emphasis on the most efficient
means of performing tasks dehumanized factory workers. The implementation
of scientific management in the workplace left workers with little opportunity to
excel or innovate from a set workplace norm.
Despite the criticisms attached to scientific management, this theory is still
applicable to many organizations today. The analysis out jobs by identifying and
evaluating specific tasks is still a common practice. This allows managers to
distinguish essential tasks from unproductive ones. Another application of
scientific management is in the careful selection, training, and development of
employees who are suited for particular jobs in the organization. Managers today
still apply scientific management principles in hiring employees and supervising
their training and development.
SYSTEMS THEORY
In 1950s, Karl Ludwig von Bertalanffy and Kenneth

Boulding laid the foundations of the systems theory. The
theory emphasizes that a system is a collection of parts that
are coordinated in accomplishing a particular goal. A
company or business is considered an organized and complex
whole. If a company operating a more complex system has
one part of its systems taken out, the company
will be inevitably affected. For example, the human body is a system of organs
which operate as a whole. There are subsystems such as the digestive,
reproductive, and respiratory systems. If one of these subsystems malfunctions,
the whole body is affected.
The systems theory gives a company a general perspective of the internal and
external environments where it operates as an integrated whole. The theory
60
holds that the work of a manager is necessarily complex but implementing a
system removes some of the complexities of management because it enables the
manager to integrate essential tasks into a unified whole. For example,
Starbucks is a global company that operates in many parts of the world. There
may be some modifications to its products depending on the culture and
tradition of the country where its franchise operates. Nevertheless, the system
of providing an excellent customer service remains the same in all of its coffee
shops throughout the world.
CONTINGENCY THEORY
This theory recognizes that there is no single best
way of managıng an organi1zation. Situational
differences are given consideration and different
management principles are applied depending on the
task, the size of the firm, and the nature of its
environment. It recognizes the manager's crucial role
in the company's organizational environment and the importance of adaptability
in dealing with business situations. The contingency theory integrates all the
management approaches and identifies a specific approach to be applied in the
situation at hand. With technology and globalization, the
contingency theory fits in today's world as the business environment is highly
unpredictable which demands that companies effectively cope with change.
HIGHLIGHTS
• Organizational structure is defined as the framework which shows

the arrangement of lines of authority, job responsibility, and flow of
communication an mong members of the organization. It has six key
elements: work specialization, departmentalization, chain of command,
span of control, degree of centralization, and formalization. The six types of
organizational structures are simple, functional, divisional, team- based,
matrix, and network structures.
• The theories applicable to organizations are bureaucracy, scientific
management, contingency theory, and systems theory
An organization is defined as a social group that has well-c0ordinated

processes and activities for the purpose of achieving the company's
objectives. It is connected to the environment where it exists. The key
process in organizing involves the structuring and grouping of jobs, and
ensuring that functions will be performed properly by competent
personnel.
Direction: Fill in each blank with the correct answer.
61
1. This organization theory was developed by Frederick Taylor
when he made innovation in industrial engineering, particularly the time and
motion study.
2. It is a type of organizational structure wherein a firm relies on
other companies to do most of its functions.
3. It is a type of organizational structure which is used when both
technical expertise and product innovation are crucial in meeting organizational
goals.
4. This organization theory emphasizes a formal rigid structure and
legitimate authority in organization.
5. This organizational theory combines features of functional and
divisional structure
6. This is defined as a social group that has well-
coordinated for the purpose of achieving its objectives.
7. This clarifies the line of authority of top-level, middle-level, and
low level management and avoids confusion among employees as to who their
immediate superior are.
8. This organization structures key elements which is the process
of standardizing jobs and establishing rules and guidelines that guide
employees.
9. This organization structure is applicable to small businesses and
decision-making rests on the owner.
10. It is framework that shows how each Component of the
company relates to each other.
your output printed. 30 points each number. Use the Font style Bookman Old
Style, font size 12 with the margin of 1.5” left and 1” right (1.15 space).
7. Which among the organizational theories is most applicable in today’s

business environment and Why?
8. According to Dee Hock “An organization, no matter how well
designed, is only as good as the people who live and work in it”. And
why?
1. This organizational element refers to the number of employees a manager can

effectively and efficiently manage.
a. Span of Control c. Formalization
b. Degree of Centralization d. Chain of command
2. It is a type of organizational structure which is used when both technical
expertise and product innovation are crucial in meeting organizational goals?
a. System Theory c. single
b. Bureaucracy d. Corporation
62
3. This Organizational Structure combines features of functional and divisional
structures.
a. Network Organizational c. Functional Organizational Structure
Structure
b. Divisional Organizational d. Matrix Organizational Structure
Structure
4. This organization theory emphasizes a formal rigid structure and legitimate
authority in organization.
a. Bureaucracy c. Scientific management
b. System Theory d. None of the above
5. Defined as a social group that has well-coordinated processes and activities

for the purpose of achieving its objectives and is connected to the
environment where it exists.
a. Organizational c. Organization
b. Organizing d. Organizations
6. This clarifies the line of authority of top-level, middle-level and low-level
management and avoid confusions among employees as to who their
immediate superiors are.
a. Degree of Centralization c. Heirarchy
b. Organization d. None of the above
7. This organizational Structure which indicates the communication and work

relationship between employees and managers.
a. Work Specialization c. Chain of Command
b. Departmentalization d. Span of Control
8. This organizational theory integrates all the management approaches and
identifies a specific approach to be applied in the situation at hand.
9. This organization structure is applicable to small businesses and decision-

making rests on the owner.
a. Simple Organizational Structure c. Matrix Organizational Structure
b. Functional Organizational Structure d. All of the above
10. This organizational theory integrates all the management approaches

and identifies a specific approach to be applied in the situation at hand.

63
1. Review the topics discussed in this chapter Nature and Structures of
Organizations

your own hard work.
uture
Follow what is in your heart and what your forte because at the end of
the day you will be harvesting of your own REAP which is success.
Failure is part but then never give up but instead try to learn into a
deepest solution in order to make it achievable.
64
“Providing employment is the best form of social service, as it
serves you, others, your country, your world - the entire society”.
- Amit Kalantri
Staffing the organization is another major responsibility of managers.
Staffing involves appointing qualified people into positions in the organization,
ensuring that they are efficient and effective employees, and promoting their
growth as they continue to work in the company.
Managers should be able to fill all job positions in the company since a
complete body of employees is necessary in the accomplishment of the
organization's goals and objectives.

Explain the nature of staffing and the staffing process;

Explain the steps in the recruitment, selection, and
placement process;
discuss employee training and development and its impact on the
company of each;
Enumerate the guidelines on compensation, benefits, and rewards and
identify examples of each;
Discuss the importance of performance evaluation and appraisal.
65
Staffing or Human resource management- the managerial function of
acquiring and developing human resources for carrying out of the various
activities of the organization.
Appraisal- the assessment or the evaluation of your performance
good you are.
Directions: CHECK the letter of the correct answer.
c. 1. A series of performance appraisals tracks the growth of

employees. The appraisals serve as evidence for identifying career paths and
determining personnel development.
a. Development c. Legal Concerns
2. It helps management decide who will be promoted by providing proof of

meritorious performance.
a. Employee movements c. Legal Concern
d. Needs assessment d. All of the above
3. It includes the actual reactions of the trainees to different aspects of the
program from content, to venue, food, accommodation, and visual aids,
among others.
c. Reactions c. Needs assessment
d. Employee movements d. All of the above
4. What training methods help employees work well in groups, enhances
their social skills, and improves team work in the company?
a. Role-Playing c. Team building
b. Case study d. Lecture
5. It focuses on the combination of employee competencies and output levels.
c. Pay for contribution c. Pay for skills
d. Pay for Competency d. Pay for performance scheme
THE NATURE OF STAFFING
It may be easy for a business owner to handle a small firm with only a
handful of employees. However, as the business grows, company operations will
be harder to manage especially if key positions and functions are vacant.
Staffing or Human Resource Management involves acquiring and developing
human resources that will carry out and perform the various activities of the
organization. Staffing includes recruiting, selecting, training, and developing
66
people in the organization. Apart from hiring people into the organization, the
company also engages in human resource management and utilizes various
tools and techniques.to promote employee loyalty, satisfaction, and personal
growth within the company.
Staffing is a continuous process. This is due to the never-ending need to

find, hire, and develop talents for the company. Employees may leave the
company, be transferred, or promoted, thus equally-skilled employees are
needed to replace them. The realignment of jobs by management may also
require the company to fill in vacant positions. Management determines how
many employees are needed at a particular time and the competencies and skills
needed for the tasks required. Effective human resource management helps the
company achieve its goals and maximize productivity since managers are able
to select quality employees. Apart from hiring employees, human resource
management also focuses on job satisfaction and career growth. Employees are
given proper training and the opportunity to avail of developmental programs,
receive salaries and benefits in line with their positions and responsibilities, and
be evaluated regularly.
THE HUMAN RESOURCE DEPARTMENT
The Human Resource Department (HRD) is tasked with implementing

human resource management in the company. The activities of the HR
Department include the primary functions and activities of, human resource
management such as human resource planning, job analysis, recruitment and
hiring, training and development, performance appraisal and management,
compensation, and employee relations. The HRD is also responsible for ensuring
that the company complies with workplace safety standards and labor and
employment laws. This department is staffed by human resource professionals
and headed by a Human Resource Director. Some companies appoint a Vice
President for Human Resources to oversee HR management.
THE STAFFING PROCESS
The staffing process is crucial for the achievement of

organizational goals. The first step in the process is human
resource planning wherein the manager identifies the right
number of people and the required skills for the different jobs.
Job analysis is employed to determine the tasks, activities,
and skills required in the identified positions. After identifying
the job specifications, qualified people are scouted to fill in
the positions in the organization. The
process of finding people to hire for a job is called recruitment. The selection of
job candidates is done through interviews, Psychological tests and background
check. Upon hiring, new employees are oriented on company rules and policies,
compensation and benefit packages, and training programs.
67
Performance
Recruitment/Selection
Appraisal
/Placement
Reward system
New employee’s orientation
Human Resource Employee
Training and development
Planning-Job Movements
analysis Employee relations
Figure 1. The Staffing Process
RECRUITMENT
Proper allocation entails placing the employees in

the right departments and making sure they are
equipped with the right skills and experience for the
job. Recruitment is the process of attracting qualified
applicants to occupy vacant positions in the company.
This consists of various activities that entice and
influence qualified applicants to work with the
company.
To ensure the success of recruitment, management must know the goals of the
organization and the reasons for hiring people. Next, the company should think
of prioritizing jobs depending on the kind of job performance needed for the
vacant positions. For example, a company that wishes to fill in positions that do
not require much skill or expertise may decide to focus on hiring candidates
with average skills. Therefore, managers will consider applicants who have little
training or new graduates. These applicants will need extensive training but can
be hired at a minimum salary. Another company, on the other hand, may need
employees with specialized skills and expertise for certain positions and thus
scouts’ applicants who have several years of experience and mastery of their
chosen fields.
Applicants are required to fill out the company's application form and
submit to a selection process that requires tests, interviews, and a background
check.
SOURCES OF APPLICANTS
There are two types of applicants to job positions in the
company. These are the internal and external
applicants.
Internal applicants are company employees who are considered for

promotion to higher positions. Promoting an employee to a vacant position in
the company incurs lesser cost than hiring a new employee since the internal
applicant is already familiar with the job he or she will be occupying. Through
promotion, employees are also motivated to work harder.
External applicants are individuals who are recruited by the company or
directly apply to join the company. A company can choose from several options
when recruiting external applicants. The traditional means of recruitment
68
include advertisement and notices in print media such as newspapers and
magazines. Companies also participate in job fairs and trade events that are
held in large public venues and attract many job hunters. They can also
participate in campus job fairs organized by colleges and universities if they are
looking for fresh graduates.
Some companies recruit and hire employees through referrals, where
their own employees recommend suitable applicants. Companies may also
entertain walk-in applicants who submit their application directly to the
company. Both methods incur no expense on the part of the company.
Companies that need temporary workers often hire the services of a
manpower agency. Normally, temporary or contractual workers are hired for less
than six months. There are also companies who hire people for project-based
positions. The company engages their services for a certain project. After the
project's completion, their job contract ends.
A non-traditional yet increasingly popular method of recruitment
nowadays is through the internet. Applicants browse websites or job portals
such as jobsdb.com and jobstreet.com where they can search for employment
opportunities and submit their applications to companies. Many companies now
use the internet as a recruitment tool because it is cheaper and provides wider
access to the labor market. Many companies also post news regarding job
vacancies on their company websites. These companies rely on their reputation
and image in attracting applicants.
SELECTION
The selection process starts when applicants who

qualify after preliminary screening are scheduled for
the preliminary interview and psychological testing
conducted by the Human Resource Department
(HRD). The usual types of psychological tests given to
the applicants are the following:
1. Mental Ability Test or Intelligence Quotient (IQ) Test - This is a test

of general knowledge that consists of questions on linguistic and
numerical abilities and abstract reasoning.
2. Aptitude Test- This measure specific abilities and the applicant’s
inclination to succeed in a particular filed like engineering, encoding, and
sales. Examples include clerical tests, mechanical tests, and dexterity
tests.
3. Personality Test- This is a measure of aspects of behavior such as
cooperation, initiative, dependability, responsibility, and sociability.
Once applicants pass the initial testing, they are sent to the
requisitioning department for further interviews. The requisitioning
department processes the request to fill in vacancies in the company. In the
meantime, HRD conducts a background check on the applicants who were
interviewed by the requisitioning department. A back-ground check is done to
verify the information given by an applicant regarding his or her past work,
school experiences, and his or her personal attitudes and values. Once the
requisitioning department makes its final selection, the job is offered to the
chosen candidate. If it is accepted, the candidates is briefed about the position,
its responsibilities, and the starting salary.
69
TRAINING AND DEVELOPMENT
Training and development refer to two distinct processes in employee
development. The company helps the employees improve their skills through
training. It is an organized activity that increases and enhances employees'
knowledge and skills on their job to improve their current performance.
Development is the enhancement of the competencies of employees by giving
them opportunities for greater responsibilities as well as challenging tasks that
will help them achieve their total growth.
NEW EMPLOYEE ORIENTATION PROGRAM

The initial training of newly-hired employees includes an orientation. The
new employee orientation program aims to provide new employees with relevant
information about the company such as the company's history, vision and
mission, culture, products and services provided, work hours, dress code, and
company policies. The program also introduces new employees to their
immediate superior and co-employees within the department. Lastly, the
members of top management are introduced. Some companies with big
manufacturing plants permit new employees to do an ocular visit of the facility.
THE TRAINING PROCESS
Training is an important investment a company can make with their
employees. The training process ensures that the implementation of training
programs results in benefits for employees. The training process includes pre-
training assessment, designing the training program, implementation, and
evaluation.
PRE-TRAINING ASSESSMENT
It is important to conduct an initial assessment of the needs of employees
before training is conducted. Pre-training assessment allows the trainer to
identify which aspects of the trainees need improvement. After the assessment,
the objectives of the training program are formulated. The objectives should be
SMART Specific, Measurable, Achievable, Realistic, and Time-bound). Training
objectives are translated into the expected changes and improvements that must
be displayed by the trainees at the end of the training program.
DESIGNING THE TRAINING PROGRAM
Once the objectives are formulated, it is time to design the training
program. The training program identifies the training methods to be used, the
time frame for implementation, dates and venues, evaluation methods, resource
persons or speakers, and training cost. The trainer can employ a variety of
training techniques depending on the training objectives.
There various training techniques that can be used depending on the

background and skills of the trainees. These are some of the most common
techniques used by companies in their training programs.
1. Lecture is the oldest and most popular method of teaching where the
trainer or speaker gives a speech explaining a topic or concept. Lectures are
often used in combination with other techniques in a training program.
70
2. Demonstration method is utilized to show how something works or
how perform a task. A demonstration is accompanied by a lecture to make it
more effective.
3. Computer-based training utilizes computer programs to teach
knowledge and skills and does not require face-to-face interaction with a trainer.
The internet has provided a wide array of training programs for employees and
many companies now opt to use computer-based trainings instead of lecture-
based trainings.
4. Programmed instruction is a form of computer-based training that
uses an instructional program that employs a variety of content such as text,
graphics and multimedia. The program is stored in the company system and
participants can access the program through a network. The participants go
through the content of the material and answer tests. Once they pass a test,
they are able to proceed to the next level of the training program.
5. Virtual reality method allows the participants to experience a 3-D
(three dimensional) environment. It enables the participants to experience
simulations showing possible job situations.
6. Case study-method presents a particular situation and trainees
discuss and decide on a solution to an organizational problem highlighted in the
case.
7. Role-playing method presents actual work situations for analysis and
participants are asked to act out specific roles. Some examples of work
situations for role playing include employees in conflict, misinterpretation of a
memo, and a crisis meeting, among others.
8. Teambuilding is a training program that utilizes activities that
encourage employees to work in groups. These activities provide opportunities
to employees to build rapport with their colleagues, enhance their social skills,
be sensitive to the feelings of others, and improve over-all teamwork in the
company. Teambuilding activities help the organization achieve greater
efficiency and productivity in the workplace.
TRAINING IMPLEMENTATION
At this stage, the trainer delivers the training program utilizing the
selected techniques. The trainer or training officer is an important component
to the success of the training implementation. An effective trainer is one who
possesses the following characteristics: has enthusiasm and passion regarding
the topic, has a good working knowledge of the topic, is able to motivate and
encourage participation from trainees, has a good sense of humor, and
possesses good posture and a dynamic appearance.
Other factors that ensure the success of the program are adequate
preparation of materials, employment of good instruction and presentation
methods, appropriate use of audio-visual materials and technology, an
appropriate venue and controlled environment, and enthusiastic participation
by trainees.
TRAINING EVALUATION
To measure the effectiveness and success of training and development
programs, the following criteria for evaluation can be used:
71
1. Reactions- include the actual reactions of the trainees to different
aspects of the program from content, to venue, food, accommodation, and visual
aids, among others.
2. Results- these include the end result and benefits of the program as
seen in job performance, productivity, and efficiency.
3. Recall-this includes the participants' recall of what has been learned
and the actual application of what is recalled. A program that is well-received,
well-delivered, and effectively implemented will be easily recalled by
participants.
4. Retrieval-refers to how easily information is recalled from memory and
immediately applied by the participants.
The four Rs are essential for any change or modification of behavior on
the part of the employees. Thus, a training or development program is
considered a success after it passes these criteria. Evaluation is a continuous
process as the company seeks to continually implement better training and
development programs for their employees.
COMPENSATION AND WAGES
Compensation is any tangible equivalent or

reward for services rendered or for the
performance of a task performed in the
organization. Direct compensation 15 monetary
in nature and given in the form of salaries, wages,
commissions, bonuses, and allowances. Indirect
compensation is given in the form of services and
non-monetary benefits
such as hospitalization, summer outings, vacation leaves, and sports fests.
Compensation varies from one position to another. A highly specialized
position is given a higher salary compared to those that require lesser skills. If
there is a demand for highly-skilled jobs, the corresponding pay is higher for
employees that have the corresponding skills because there are many companies
that would like to get their services. On the other hand, companies to hire
employees with average skill often offer compensation that is a little over the
minimum.
COMPENSATION GUIDELINES
Compensation decisions are influenced by the nature and environment of
a particular industry. For example, the pharmaceutical, banking,
telecommunications, and hotel industries offer attractive compensation
packages. The government also imposes regulations and restrictions on salaries
of employees like the minimum wage law. As of March 20, 2015, the minimum
wage for the National Capital Region (NCR) is P481 per day. Meanwhile, the
minimum wage for the other regions is slightly lower. The minimum wage law is
set to protect manual laborers from being taken advantage of by companies.
Compensation is usually time-based. The term salary refers to
compensation given to professionals on a monthly or semi-monthly basis. The
term wage refers to compensation given a weekly or daily basis and usually
applies to manual workers such as carpenters, plumbers, electricians, and the
like. Base pay or basic pay is the fixed part of pay. It is the minimum payment
for the tasks rendered by the employee based on his or her position or job title.
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Companies ensure the confidentiality of individual salaries and require
employees to exercise discretion in discussing their salaries or giving out
information related to compensation. Should information regarding pay leak
out, it may result in demotivation, jealousy, and conflict among employees.
EMPLOYEE BENEFITS
Employee Benefits are divided into two main groups:
government-mandated and voluntary benefits.
Government-mandated benefits are those required by
law, while voluntary benefits are those that are
voluntarily given by the company. The following are the
government-mandated benefits:
1. Social Security System (SSs)/Government Service Insurance
System (GSIS) benefits- All income earners and
workers, particularly employees working in private firms, are required to
give monthly contributions to the Social Security System or SSS. SSS
membership and contributions entitle the worker to several benefits such as
sickness benefits, maternity benefits, death and funeral benefits, disability
benefits, and housing and salary loans. Government employees avail of benefits
from the Government Service Insurance System or GSIS.
Both the employee and the employer share the contribution
cost to the SSS. Employees pay their personal contributions
through salary deductions while firms pay their share for
each of their employees. The employer's share is higher than
that of their employees. The employer is also responsible tor
remitting both the personal share of its employees and
company contributions to the SSS.
2. Employees' compensation (EC) program- This is given to private and
government employees in case f work-related injury, disability, sickness, or
death.
3. Pag-ibig (Home Development Mutual Fund) benefits - Employees
also contribute to Pag-ibig, which is the government-established housing finance
program. A Pag-ibig member can avail of the following benefits: housing loan,
salary loan, and calamity loan. The member can also avail of a provident fund
upon retirement.
4. Phil health (Philippine Health Insurance Corporation) benefits. This
is a government-established health insurance program that gives members and
their dependents financial assistance for hospitalization. Phil health benefits
cover both in-patient and outpatient care.
5. Service incentive leave - All employees, except government employees,
managerial employees, and house helpers, are entitled to five days service
incentive leave with pay provided they have rendered at least one year of service.
This five-day leave can be used for health and vacation purposes. Any unused
leave will be converted to cash at the end of the year at the present salary rate
of the employee.
6. Maternity leave - This is given to all female SSS members whether
married or unmarried. The maternity leave benefit for normal delivery or
miscarriage is 60 days and 78 days for caesarean delivery.
7. Paternity leave - This is granted to all married male employees working
in private firms, for the first four deliveries of the male employee's lawful wife.
Paternity leave can last up to seven days after the wife's delivery.
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8. Special leave for women- This is granted to female employees with
gynecological disorders that involve surgical procedures regardless of age or civil
status. Those who will avail of this benefit are entitled to two months leave with
pay. Voluntary benefits refer to benefits that are freely given by the company to
its employees.
Voluntary benefits refer to benefits that are freely given by the company to its
employees. These benefits, however, are dependent on the company's ability to
provide them and are subject to certain conditions and policies. The following
are examples of voluntary benefits:
1. Vacation leaves -The number of vacation days given to employees
varies from one company to another. Companies may grant a vacation leave
consisting of five (5), ten (10), or fifteen (15) days. Vacation leaves are usually
not convertible to cash and should be used up before the end of the calendar
year. The usual policy is that unused vacation leaves are forfeited and not
carried over the following year.
2. Sick leaves - Companies provide more than the allotted
number of days for the service incentive leave as sick leaves. Sick leaves are
convertible to cash at the end of the year.
3. Emergency leaves - Some companies provide emergency leaves
of three days or more for re3. Emergency leaves - Some companies provide
emergency leaves of three days or more for reasons not applicable to sick and
vacation leaves. Some examples include bringing an immediate family member
to a hospital, floods due to typhoon, and other emergencies.
4. Summer outings - Companies may organize exclusive summer outings
for their employees and bring them to resorts or beaches. The company may also
spend for food, accommodation, and transportation expenses.
5. Sportsfest - Companies organize sportsfests where their employees
engage in sports like bowling, basketball, and volleyball. These events are
usually scheduled after office hours.
6. Rice subsidy - Regular employees are provided one sack of rice per
month.
7. Meal subsidy- Employees are given meal stubs with corresponding
values that can be spent in the cafeteria. The food expenses are later deducted
from the employee's bill. This subsidy may also come in the form of meal
discounts.
8. Shuttle service- Employees who live in locations that are far from the
office or plant are provided transportation services where shuttle buses pick
them up at designated points and bring them to the company premises.
9. Hospitalization - Apart from health benefits provided by the SSS, Phil
health, and the employee compensation program, there are companies that
extend hospitalization benefits to employees and their dependents. Employees
are given health cards and a list of accredited hospitals whose services they can
avail. The company then pays for the hospitalization and other related costs.
10. Group life insurance program - Employees are enrolled in a group
life insurance program with benefits provided to beneficiaries in case of death.
11. Bonuses - Aside from the 13th month pay, some companies also give
14th month up to 17th month pay to their employees.
12. Profit sharing - A company can "share its bounty" by dividing net
income among all employees regardless of rank.
13. Stock options - Companies can give shares of stocks to employees
who have rendered more than ten (10) years of service.
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14. Christmas parties and packages -Christmas benefits are extended
to employees in the form of Christmas parties that include exchange gifts,
raffles, and gift basket giveaways.
15. Cash bonuses - Companies provide cash bonuses to employees at the
end of the year.
16. Emergency loan- Some companies grant interest-free emergency
loans to employees for emergency purposes. These loans are payable through
salary deduction.
17. Free uniform and laundry allowance - Employees are provided
uniforms and laundry allowances upon regularization or after one year of
service.
18. Executive perquisites - These are additional benefits given to top
management in the form of free limousine service, free hotel accommodations,
gasoline allowances, and the like. The common term for these are "executive
perks."
REWARDS SYSTEMS
Companies' also provide additional payments and
benefits on top of the employees’ basic salaries.
These form part of the company's rewards systems
and are given to motivate employees as they perform
their tasks.
CONTINGENT PAY
This is a pay scheme which is given on top of the basic
pay' rate and is based on the employee's performance,
competency, contribution, and skills. Contingent pay can be
applied to individuals or groups. Individual contingent pay
can be implemented along five schemes. These are as follows:
1. Pay for performance scheme- On top of the basic pay, an employee
is given a bonus based on performance. This pay scheme serves to motivate
employees to perform well in their jobs. Employees are encouraged to fully
participate in attaining the company's objectives. One disadvantage is that the
basis for providing the reward may be subjective. Therefore, the company should
have a good performance management system that relies on the quality and not
the quantity of work.
2. Pay for competency- This is based on the knowledge, skills, and
abilities that employees have that they apply on the job. This encourages
enhancement of competencies among employees but may be difficult to assess
since it 1gnores output levels. An excellent competency framework is required
in order to implement this scheme.
3. Pay for contribution - It focuses on the combination of employee
competencies and output levels. This scheme provides employees the
opportunity to simultaneously develop their competencies and increase their
output levels. However, this may be difficult to manage because managers will
have to assess both the competencies and
performance of employees at the same time.
4. Pay for skills - This payment depends on the skills acquired by the
employee. This requires a worker to undergo training and gain certification for
certain skills or competencies. The advantage of this scheme is that it
encourages employees to learn more skills and avail of trainings and
development programs. However, this scheme may be expensive because a
company needs to allocate resources for trainings. Also there is also a possibility
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that an employee may decide to undergo training to acquire skills that are
unrelated to his or her position.
5. Pay for service This is usually paid yearly on the basis of an employee's
continued service. This scheme treats all employees equally regardless of
performance, skills acquired, or competence level. However, implementing
rewards based on length of Service fails to reward those who contribute more to
the achievement of company Dccaves despite being with the company for only a
short period.
Group contingency pay, on the other hand, may be implemented through
two schemes.
1. Team-based pay - This is given to groups of employees who have related
jobs and are assigned to work on a certain project. The reward is based on the
achievement of a certain quota or service delivery standard. Team-based pay is
usually given at a rate proportionate to an employee's basic pay, other
companies, however, distribute the pay equally among team members. This
scheme is effective for highly cohesive groups. However, this may also spark
conflict within the team as employees who consider themselves to be
contributing more to the achievement of the team are likely to be disappointed
if bonuses are divided equally.
2. Organization-wide pay - This is given to employees on the basis of the
achievement of organizational goals. There are two types of organization-wide
payments.
a. Gainsharing - This is based on a bonus plan where employees are
encouraged to fully contribute to the company's performance.
b. Profit sharing - This refers to a scheme where employees share in the
profits of the company either through cash payments or shares of stocks. The
value of the incentive is determined by the management. Usually, the
management decides which portion of the profits will be shared with employees.
PERFORMANCE APPRAISAL
Performance appraisal refers to the process where
employee performance is documented and evaluated.
This is also known as performance review or
performance evaluation. An appraisal determines
whether employee performance is effective and conforms to company standards
and expectations. This is done periodically by the company and management
decides on how frequently it is conducted and the means by which employees
are appraised.
Evaluation is an important aspect of a company's performance
management system as it provides concrete information based on which the
over-all performance of the company can be assessed. Formal evaluation is
highly preferred and recommended as opposed to the informal evaluation which
is done by simple observation. Over the years, performance appraisal
has expanded from mere decision-making regarding salary or promotion to
addressing other employee-related concerns that affect long-term organizational
performance.
The following are the purposes of performance appraisal:
1. Needs assessment - Performance evaluation provides relevant
information about the specific training needs of employees
2. Employee movements - It helps management decide who will be
promoted by providing proof of meritorious performance.
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3. Basis for merit increase- Performance appraisal gives strong proof for
merit increases.
4. Legal concerns - If there are questions regarding certain decisions like
termination, the appraisal becomes the basis for justifying such action. The
results of appraisal is also used to address issues on rewards, layoff, and
employee transfer.
5. Development- A series of performance appraisals tracks the growth of
employees. The appraisals serve as evidence for identifying career paths and
determining personnel development.
6. Channel of communication - Appraisal provides a good venue for
discussion regarding performance and other issues between an employee and
his or her immediate supervisor. It becomes an avenue for ironing out
differences and articulating certain career concerns or questions on
performance ratings.
7. Source of motivation - Performance evaluation is one of the best ways
to keep employees motivated. It is one way to boost employee morale and
encourage them to make a good impression and give an outstanding
performance in their job.
PERFORMANCE APPRAISAL METHODS

Performance appraisal is done through objective
or judgmental methods. Objective methods
include measures of actual output and
performance test. Measures of actual output
include volume of sales or number of orders
processed. Another objective appraisal
method is the performance test. This test evaluates an employee using a set of
standardized conditions. One example of a performance test is when call center
workers are made to answer a set of prerecorded calls. They are then graded
based on speed, accuracy, and level of courtesy when taking the call.
Judgmental methods include ranking and rating techniques. The
ranking technique is a method where employees are compared to other
employees. Drawbacks to this technique include a tendency to be inaccurate
when applied to large groups. It is also difficult to rank people from different
groups as the "weaker" member of one group may be a “strong” member in
another. Ranking also does not provide sufficient information for feedback as
evaluators focus on the general performance of employees and do not identify
their strength and weaknesses. The rating technique is an appraisal method
that compares an employee to a fixed standard. A rating scale is used to measure
the characteristics of an employee as well as his or her job performance. An
example of a rating scale is the Behaviorally Anchored Rating Scale (BARS). This
rating scale identifies aspects of employee behavior that will be measured and
assigns rating scales to them.
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To eliminate bias in conducting employee evaluation, companies provide
its managers and supervisors extensive training on performance appraisal.
Evaluators are also required to practice consistent and effective ways of
appraising employee performance. Managers should always keep in mind that
their appraisals will affect the morale of employees and their chances for merit
increase, promotion, career development, and training. There is a need for all
managers and supervisors who conduct performance appraisal to be trained in
settings the goals and objectives of appraisal, effective selection and use of
evaluation methods, proper documentation, conducting feedback and post
review actions with employees and addressing employee questions and concerns
regarding appraisal. The training can be done through special workshop
conducted by professional HR consultants and human resource management
experts.
HIGHLIGHTS
• The human resource department implements human resource

management and its related activities for the company. It is staffed by
human resource professionals and supervised by a human resource
director.
•Human resource planning (HRP) ensures that the company achieves its
mission, vision, and goals by employing the right people with the right skills
required for the different tasks in the organization.
• Recruitment is the process of attracting qualified applicants qualified to
occupy vacant positions in the company. The selection process starts with
the preliminary interview and psychological testing for qualified applicants
which is conducted by the human resource department (HRD). When a
candidate accepts the job offer, he or she is required to submit pre-
employment requirements and undergo medical exam. After submission of
the requirements and medical clearance obtained, the candidate is officially
hired and signs the employment contract.
• There are different programs aimed for the training and development of
employees. The training programs improve the skills of employees while
development program enhance their competencies by assigning them greater
responsibilities. The training Program is designed to conform to the particular
skills and background of the employees.
• Compensation guidelines vary from industry to industry and from position to
position. The nature of compensation is determined by the competency level
and Skills of the employees, the nature of the industry and the Services and
products offered, and government policies and restrictions.
• Company's reward system provides additional payments and benefits on top
of or aside from the employees' basic salaries. These are given to motivate
employees as they perform their tasks. There are two kinds of paying
schemes. These ate contingent pay and voluntary benefits.
• Employee appraisal is essential to ensure that employee performance
contributes effectively to the attainment of company goals. Appraisal is also
used as the basis for employee promotion, training and development, and
additional benefits.
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Staffing or human resource management is the managerial function of
acquiring and developing human resources for carrying out and performing
the various activities of the organization. The steps in staffing involve
human resource planning, job analysis, recruitment, selection of the right
people, and finally, orientation of the selected employees.
Direction: Answer briefly the following questions. Do it in a long bond

paper and submit your output printed. 30 points each number. Use the Font
style Bookman Old Style, font size 12 with the margin of 1.5” left and 1” right
(1.15 space).
1. Do you agree that staffing is important process in an organization? Agree
or Not agree and Why?
2. What important role does Human Resource department play in an
organization? Cite one example
3. What important role does Human Resource Planning play in an
organization? Cite one example
your output printed. 30 points each number
9. What is importance of training for employee?
10. Why appraisal is important to a company? How will management
and employees benefit from appraisal?

1. This is granted to all married male employees working in private
firms, four the first deliveries of the male employee’s lawful wife.
c. Paternity Leave c. Maternity leave
d. Service incentive leave d. Special leave for men
2. The step in the staffing process wherein the manager determines the right
number of people and the required skills for the job?
a. Human Resource Planning c. Selection
b. Recruitment d. Job Analysis
11. What training methods help employees work well in groups, enhances
their social skills, and improves team work in the company?
a. Role-Playing c. Team building
b. Case study d. Lecture
12. It refers to the process where employee performance is documented and
evaluated.
a. Performance Appraisal Method c. Scientific management
b. Performance d. Performance Appraisal
13. This is given to private and government employees in case of work related
injury, disability, sickness or death.
a. Employees Compensation program c. Compensation program
b. Service Incentive leave d. None of the above
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14. It is a type of test which measure one’s inclination to succeed in a
particular field.
a. Mental Ability Test c. Personality Test
b. Aptitude Test d. None of the above
15. It is the oldest and most popular method of teaching where the trainer or
speaker gives a speech explaining a topic or concept.
a. Demonstration c. Lecture
b. Programmed instruction d. Recitation
16. It is a type of test which measure of aspects of behavior such as
cooperation, initiative, dependability, responsibility and sociability.
a. Aptitude Test c. Self-Introductory test
b. Mental Ability Test d. Personality Test
17. It helps management decide who will be promoted by providing proof of
meritorious performance.
b. Needs assessment d. All of the above
18. It is one way to boost employee morale and encourage them to make a
good impression and give an outstanding performance in their job.
b. Source of motivation d. All of the above
1. Review the topics discussed in this chapter staffing in the Organization

2016
Job well done! You accomplished the module chapter 8. You can now proceed
to chapter 9.
Never stop learning because at the end of the day you will be benefited
of your own hard work.
Being an owner do the best decision to your employee. Give them all the
benefits provided by them because I know at the end of the day they will be your
lawful and loyal employee in return.
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“Management is efficiency in climbing the ladder of success;
leadership determines whether the ladder is leaning against the right
wall.”
Stephen R. Covey
An organization is defined by the capacity of its managers to set the
direction of the company and promote change. These abilities set apart
excellent leaders from average or mediocre managers. A manager promotes
stability while a leader promotes change in an organization to ensure its
continued survival. In a world that is continually defined by change,
companies cannot afford to stand sill and adhere to what is conventional.
True leadership recognizes opportunities for change, embraces them, and
leads the organization to incorporate these changes into its workplace,
operations, and work culture. Skilled leaders ensure that their organization
has a dynamic and flexible structure that promotes growth and ensures
progress in the midst of unpredictability.
Identify and discuss the theories of motivation;

Enumerate and describe the different styles of leadership
Camaraderie- the mutual trust and loyalty that is developed

Between people who have known each other for a certain period.
81
Synergy- a condition when two or more together to create a positive
outcome. It also involves putting together individual actions to create a
“greater whole.”
good you are.
e. 1. This includes rules and policies, salaries, and benefits,

relationship with co-worker and superiors, and work condition.
c. Motivator Factor c. Hygiene Factors
d. Need for power d. All of the above
6. It is the degree by which an employee values that expected outcome or

reward.
a. Expectancy c. Valence
f. Instrumentality d. All of the above
7. These leaders also make the decisions for the group without consultation
(selling style).
e. Autocratic leader c. Persuasive leader
f. Consultative leader d. All of the above
8. It refers to worker motivation and actual efforts spent.
a. Organization of the work c. Subordinate efforts
b. Resource and support d. External Coordination
9. It is a refinement of situational leadership
e. Transactional Theory c. Contingency Theory
f. Transformational Theory d. None of the above
MOTIVATION
Motivation Psychological process of directing

behavior. Psychologists consider human
behavior as primarily goal-oriented
and that there are forces that induce to act or behave a certain a manner. A
person's performance in work and other tasks is defined by both ability and
motivation. Motivation is particularly significant as it determines the willingness
of a person to use his or her ability to the utmost in performing a task.
There are three elements in the process of motivation: motive, behavior
and goal. Motive is something that arouses or induces an individual to behave
in a certain way or do a certain thing. It is also known as need or desire. Motives
are classified as either primary or secondary motives. Primary motives include
82
biological needs such as food, shelter, belongingness, among others.
Secondary motives involve the need for stimulus and social needs. An example
of a stimulus Curiosity or exploration. For instance, a person may be driven to
travel to another county because of his or her curiosity about its culture and
tourist spots. Social needs include power, affiliation, or fame. Politicians who
are running for election are mostly motivated by a desire for power or fame.
Motives can also be internal or external. Internal motives are based on an
individual's own personal drive to achieve a certain goal, while External
motives are based on forces or influences that are outside of the person such
as environment, peer group, family members, and society.
Behavior is comprised of actions aimed at accomplishing or achieving a
particular motive or need. Hunger, for example, motivates people to go and
search for food. Goal, meanwhile, refers to the achievement or fulfillment of a
motive. When a hungry person has found some food and has eaten it, he or she
has finally achieved his or her goal.
The motivational process outlines the steps individuals take to satisfy
their needs. The person first identifies his or her unsatisfied needs and
determines if they are primary or secondary needs. The next step requires the
individual to identity actions that will satisfy or fulfill the identified needs and
select the best means to satisfy them. The final step involves out actions that
will satisfy needs and acquire feedback. Feedback is important as it provides
information for the clarification or modification of needs.
THEORIES OF MOTIVATION
Several theories have outlined principles and
ideas that seek to explain the nature and its effects on
a person’s behavior. Major theories on motivation
includes Maslow’s Hierarchy of Needs, Alderfer's ERG
Theory, McClelland’s Learned Needs theory, Herzberg’s
Two-Factor Theory, Adam’s Equity Theory, and Vroom’s
Expectancy Theory.
MASLOW'S HIERARCHY OF NEEDS
The first theory of motivation is Abraham Maslow’s Hierarchy of Needs.

This is the most widely recognized theory of motivation that specifies the
fundamental needs of individuals. These basic needs are arranged in a pyramid,
where the most basic needs occupy the lowest layers. The first two layers are
called deficiency or lower-level needs because they are essential for person’s
survival. These include physiological needs and safety and security needs.
Physiological needs include food, clothing, shelter, water, and air. Safety and
Security Needs include health and well-being, financial and economic security,
and safety against illness and accidents.
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The other basics that occupy the higher levels of pyramid are the growth
or higher-level-need. These include needs for love and belongingness, need for
esteem, and need for self-actualization. Love and belonginess needs include
relationships with family, friends, and peers. Esteem needs refer to feelings of
self-worth and self-respect, as well as gaining respect from others. These also
include acceptance by others and recognition of one’s talents and capabilities.
At the topmost is the need for self-actualization or realizing one’s true potential.
Maslow's theory assumes that lower-level needs should be satisfied first

to enable a person to address his or her higher-level needs such as self-esteem
and self-actualization.
Managers need to satisfy the lower- level needs of their employees by
providing safe working conditions and practicing proper payment of salaries and
benefits. To satisfy higher level needs, managers should provide a supportive
climate, give awards and recognition for Outstanding performance, and
encourage creativity and innovation.
ALDERFER'S ERG THEORY

The ERG (Existence, Relatedness, Growth) theory of Motivation was developed
in 1969 Clayton Alderfer, an American psychologist. Alderfer integrated the
levels of Maslow's hierarch of needs and identified three major types of needs:
existence, relatedness, and growth. Existence needs are comprised of
physiological and safety and security needs. Relatedness needs combine love
and belongingness, while growth needs include self-esteem and selt-
actualization.
Though it is primarily based on Maslow's hierarchy of needs, Alderfer's

theory does not require that lower-level needs be satisfied before higher-level
ones. The ERG Theory states that a person can satisfy the needs from several
levels at the same time. Alderfer also acknowledges that these needs vary for
84
each individual, and that how a person prioritizes his or her needs may change
over time. A person may value relatedness needs more than growth needs at a
certain point in his or her life but may consider growth needs more important
later on. Furthermore, Alderfer suggests that if a person becomes frustrated
because of an unsatisfied higher-level need, he or she may go back to satisfying
lower-level needs.
MCCLELLAND'S LEARNED NEEDS THEORY
David McClelland, an American psychologist, developed the Learned
Needs Theory in the 1960s. This theory is also known as Achievement Motivation
Theory. According to McClelland's theory, human behavior is defined by three
motivators which are learned and shaped by a person's life experiences. These
learned needs are achievement, affiliation, and power. Though these needs are
present in every person, his or her upbringing, culture, and Personal
experiences will determine which among the three will be the dominant
motivator that will exert the most influence throughout his or her life.
People with a high need for achievement have a strong desire to
accomplish challenging goals and gain advancement in their profession. 'These
people often approach situations by engaging in calculated risks. They avoid
low-risk situations because they consider success these situations as too easy
and could not be considered an achievement. They also avoid high-risk
situations because any success pained is due to luck and not really based on
skills o capabilities. Those with a high need for achievement also want feedback
on the progress or their work and prefer to work alone or in the company of high
achievers.
People with a need for affiliation prefer to be in the company of other
people. They choose to collaborate rather than to compete to avoid internal
conflicts. Individuals who are inclined to affiliation strive to gain acceptance
from other people and maintain harmonious relationships with them. They are
also team players and usually conform to the norms of the group.
Those with a high need for power want to control and influence others.
They want their ideas to prevail in a discussion and often tend to dominate in a
group. They are competitive and very particular with status and recognition.
Though it is primarily based on Maslow's hierarchy of needs. Alderfer's

theory does not require that lower-level needs be satisfied before higher-level
ones. The ERG Theory states that a person can satisfy the needs from several
levels at the same time. Alderfer also acknowledges that these needs vary for
each individual, and that how a person prioritizes his or her needs may change
over time. A person may value relatedness needs more than growth needs at a
certain point in his or her life but may consider growth needs more important
85
later on. Furthermore, Alderfer suggests that if a person becomes frustrated
because of an unsatisfied higher-level need, he or she may go back to satisfying
lower-level needs.
HERZBERG'S TWO-FACTOR THEORY
The American psychologist Frederick Herzberg proposed the Two-Factor
of Motivation which states that employee satisfaction is defined by two important
factors: motivators and hygiene. Any changes in these factors will bring about
satisfaction or dissatisfaction among employees. Herzberg further noted that
satisfaction and dissatisfaction are independent conditions and management
should not assume that an increase in satisfaction is due to the elimination of
factors that bring about dissatisfaction. Therefore, managers must both focus
on increasing the factors that result to satisfaction and eliminate factors that
bring about dissatisfaction.
Hygiene factors include rules and policies, salaries and benefits,

relationship with coworkers and superiors, work conditions, and quality of
supervision. Job dissatisfaction is brought about if employees have unpleasant
work experiences involving these factors. For example, if the workplace has poor
ventilation and lighting and lacks proper equipment, the dissatisfaction of the
employees will result in poor performance. Motivator factors primarily provide
satisfaction to the employees and include the nature of the job itself, recognition,
personal growth, opportunity for advancement, responsibility, and employment
status. Managers should strive to continually provide employees with these
motivator factors to maintain or increase job satisfaction.
ADAM'S EQUITY THEORY

John Stacey Adams, a workplace and behavioral psychologist, developed
the Equity Theory which proposes that employees become motivated when they
feel they are treated fairly. Comparison is considered an important factor in
determining motivation and satisfaction. Adams believes that employees
compare their status with other employees, particularly when it comes to
salaries, adjustments in pay, promotion, and other benefits.
In this theory, employees seek to maintain equity or fairness regarding
their persona1 job inputs and outputs in comparison to other employees. Inputs
include all the employee’s contributions to the job such as time, skill, effort,
loyalty, commitment, training, and educational background. Outputs include
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the positive and negative outcomes that result from the inputs provided and
include salary, employee benefits, recognition, reputation, and achievement.
Usually, an employee assigns weights to his or her personal inputs and
outputs based on their perception of the situation. After coming up with their
estimate of their personal inputs and outputs they will then compare this to the
inputs and outputs of other employees. The other employees whom the employee
uses as bases for comparison are considered relevant others. These are
employees who are in the same situation or position as the employee.
There is equity if the employee perceives that he or she provides the same
amount of inputs and gains inputs equal to that of his or her relevant others.
There is inequity if the perceived ratio of outputs to inputs is not equal to that
of the relevant others. As a consequence of inequity, an employee may purposely
reduce his or her inputs based on the idea of a more equitable level of output.
He or she may also request for transfer to another department or leave the
organization. Managers therefore should be aware of the work environment and
ensure that employees are treated fairly. They should also be aware that
employees have different perceptions regarding their inputs and the
corresponding outputs they receive, and that any perception of inequity in the
workplace must be quickly addressed.
VROOM'S EXPECTANCY THEORY

Victor Vroom, a business professor at the Yale School of Management,
developed the Expectancy Theory which explains that employees are motivated
to work when they expect to achieve something from their jobs. It assumes that
employees know exactly what they have to do to be rewarded.
Expectancy is the belief that exerting effort will lead to the attainment of
performance goals. The level of an employee’s expectancy is influenced by his or
her personality, past experiences, and self-confidence. Instrumentality is the
belief that achieving a desired performance level will lead to a particular reward.
Valence is the degree by which an employee values the expected outcome or
reward.
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There is low motivation if there is low expectancy when the employee
does not think he or she can do the required task. There is low instrumentality
when the employee thinks or she will not get the desired outcome even if he or
she does what is required. There is low valence when the employee does not
really want the outcome.
There is high motivation if there is high expectancy where the employee
thinks he or she can perform the required tasks; high instrumentality when the
employee thinks he or she get the desired outcome. There is high valence when
the employee greatly values the outcome.
Managers, therefore, should determine the outcomes that employees value
and insure ire that all desired levels of performance can be attained. However,
managers must bear in mind that expectations must be realistic and not based
on subjective views. The managers should also ensure that proper outcomes or
rewards are given to employees to avoid frustrations and disappointments.
LEADERSHIP THEORIES AND LEADERSHIP STYLES

Leading is a complex process. It involves influencing
others to accomplish a mission, task, or go0al. There
are a number of leadership theories that describe the
characteristics and behavior of successful leaders as
well as different leadership styles that managers can
apply in various situations.
GREAT MAN THEORY

With the Great Man Theory, there is the assumption that leaders are born
with innate qualities, and that renowned leaders are destined to lead. Thomas
Carlyle, a 19th-century Scottish historian, was deeply interested in the lives of
heroic figures in history. His studies led to the development of the Great Man
Theory of leadership. The theory was formulated by analyzing the behavior of
renowned men, especially military leaders.
This theory states that leadership is greatly influenced by status as many
great men in history came from the aristocracy. Carlyle also believed that in
times of turmoil, there was a great man who led and whose life and works left
an indelible mark in history. He considered history the "biography of great men."
Among the great men Carlyle mentioned in his writings are Pericles, Napoleon,
Oliver Cromwell, and Martin Luther. His views, however, discounted the role of
the lower classes and women in history as he believed that only educated and
well-bred men are capable of becoming heroes.
TRAIT THEORY
The Trait Theory focuses on innate attributes and characteristics that a

person possesses. This theory believes that leaders possess certain positive
traits that enable them to become leaders. This theory was developed by
studying successful leaders and compiling a list of their common traits. This list
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was then used as a basis for choosing individuals who can be considered as
leaders. Ralph Stogdill, a Professor Emeritus of Management and Science and
Psychology at Ohio State University and a leading researcher on leadership and
organizations in the 1970s, identified these key leadership traits and skills.
KEY LEADERSHIP TRAITS AND SKILLS
TRAIT SKILLS
• adaptable to situations • clever (intelligent0
• alert to social environments • conceptually skilled
• ambitious and achievement-oriented • creative
• assertive • diplomatic and tactful
• cooperative • fluent in speaking
• decisive • knowledgeable about group task
• dependable • organized (administrative ability)
• dominant (desire to influence others) • persuasive
• energetic • socially skilled
• persistent
• self-confident
• tolerant of stress
• willing to assume responsibility
In addition, management experts also identify four primary traits that

leaders should possess. These are as follows:
1. emotional stability - A leader is calm and confident during stressful times.
2. ability to admit error - A leader does not cover up his or her mistakes and
takes responsibility for them.
3. good interpersonal skills - A leader is able to communicate and persuade
others.
4. intellectual breadth - A leader is broad-minded and is knowledgeable about
a wide range of areas.
BEHAVIORIST THEORIES
The behaviourist theories place more
emphasis on the behaviour of leaders
rather than their innate qualities.
The patterns of behaviour of leaders are
observed and notable actions and
behaviours are described.
One popular behaviourist theory is Douglas McGregor's Theory X and
Theory Y. This view describes two approaches or models of motivation and
leadership in the workplace. Theory X assumes that workers inherently dislike
work and will avoid it as much as possible. Therefore, managers
must emphasize external motivation that includes detailed guideline ne threat
of punishment, the promise of reward, and strict supervision. Theory Y, On the
other hand, assumes that workers take the initiative in their work and view it
as a pleasant and productive endeavor. Managers, therefore, must ensure that
a pleasant environment is maintained in the workplace. Leadership in this
scenario is democratic and participative.
Another behaviorist theory is the Leadership Grid which was
conceptualized by management theorists Robert Blake and lane Mouton. This
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theory defines leadership as balancing between two fundamental concerns: the
concern for people and the concern tor results. The relationship between these
two and the resulting leadership styles based on how managers rank the
importance they attach to them are represented as a grid.
Concern for results is placed along the horizontal

axis, while the concern for people is placed along
the vertical axis. The five leadership styles are located within quadrants that
correspond to how each leader ranks the importance they place on people and
results. The five styles of leadership according to the leadership grid are as
follows:
1. Authoritarian Leaders (high result, low people)-They are very task-
oriented and push their people to work. They are very strict with schedules and
expect their people to follow them without question. Authoritarian leaders do
not provide their employees opportunities to cooperate of collaborate with one
another. When something goes wrong, they usually look for subordinates to
blame rather than figure out what exactly went wrong in the first place.
2. Country Club Leaders (low result, high people) -They use the power of
rewards to maintain discipline and motivate their subordinates. These leaders
do not use coercion unlike authoritarian leaders. They believe that if they do so,
it will jeopardize their relationship with their subordinates.
3. Impoverished Leaders (low result, low people) - They delegate tasks
and then leave their subordinates unsupervised. They allow their people to go
about their job by doing their own thing, which often results in workers
struggling to finish their tasks.
4 Team leaders (high result, high people) - These leaders are considered
role models of good management. They encourage their members to attain their
highest potential and motivate them to perform well in achieving their goals.
5. Middle of the Road Leaders (medium result, medium people) - These
leaders Seek a compromise between production and people concerns and
maintain the status quo in the company. They only limit themselves to the
expectations of management.
This type of leadership addresses all the regular concerns regarding
production and workers, but the unwillingness to "go the extra mile" leads to
mediocre performance in the long run.
PARTICIPATIVE LEADERSHIP
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Kurt Lewin, a German-American psychologist,
developed a framework that focused on a leader's
decision-making style. Participative leadership
emphasizes the role of leaders and other
participants in decision-making. These
participants include subordinates, peers,
superiors, and other stakeholders. Lewin
identified three leadership styles based on their
decision-making practices:
1. Autocratic leaders - These leaders take sole charge in decision making and
do not consult with other members. This decision-making style is appropriate
for making quick decisions and if there is no need to involve a lot of people
for decision making to have a successful outcome.
2. Democratic leaders - These leaders allow team members to provide inputs
before making a decision. Leaders, however, may encounter difficulty when
there are varying and contrasting inputs from members.
3. Laissez-faire leaders - These leaders do not interfere in the decision making
and they allow members to make most of the decisions. This is a good
approach especially if participants are capable and do not need close
supervision.
Another organizational expert, the American administrator and
organizational psychologist. Rensis Likert, has conceptualized four additional
types of leadership styles in decision-making:
1. Exploitative authoritative leaders-These leaders have a low concern for
people and use threats to make workers comply with orders. Managers that
apply this style usually impose a top-down structure where orders are
issued from the top and imposed on subordinates.
2. Benevolent authoritative leaders-These leaders express concern for
people. They use rewards to encourage worker compliance and good
performance. However, major decisions are still centralized.
3. Consultative leaders - These leaders make a conscious effort to listen to the

ideas of their subordinates. However, they still retain the right to make
decisions.
4. Participative leaders These leaders maximize the participation of
subordinates in decision making. Participative leaders involve people from
all levels in the organization.
Another notable framework of participative leadership is the Leadership
Continuum, developed by Robert Tannenbaum and Warren Schmidt. They
believed that leadership styles may vary along a continuum from autocratic
to democratic leadership. This theory suggests that when one moves away
from an extremely autocratic leadership style, subordinates have increased
participation in decision making. Based on the continuum, managers may
implement four leadership styles:
1. Autocratic leaders - These leaders take charge of decision making and
relay the decisions made to their subordinates. (telling style)
2. Persuasive leaders- These leaders also make the decisions for the
group without consultation. However, they make the effort to persuade the group
members to accept the decision. (selling style)
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3. Consultative leaders - These leaders confer with group members who
propose possible solutions or alternatives. They consider all inputs and ideas
before formulating any decision. (consulting style)
4. Democratic leaders - These leaders present the problem to group
members and involve them in decision making. The decision is a product of
discussion and consultation with all group members. (joining style)
SITUATIONAL LEADERSHIP
This theory considers that leadership styles are
specific to a particular situation, and that leaders adapt
their actions and behavior to whatever situation they
are in. This theory suggests that leadership styles also
change based on the levels in
an organization. There are factors that affect situation, and in turn, the decisions
of leaders. These include the motivation and the capability of followers, and the
relationship between the leader and his or her followers. There are also instances
when the leader's views regarding the situation and participants influence his
or her behavior. The various approaches in situational leadership share six
common variables:
1. Subordinate effort - refers to worker motivation and actual effort spent 2.
2. Subordinate ability and role clarity- refers to the extent to which workers
what to do and how to do it.
3. Organization of the work- means the structure of work and utilization of
resources.
4. Cooperation and cohesiveness -means how well participants work together
as a group.
5. Resource and support -refers to the availability of tools, materials, and
people.
6. External coordination -refers to the need to collaborate with other groups.
The Hersey-Blanchard leadership theory is a leadership model developed
by leadership mentors Paul Hersey and Ken Blanchard. This model focuses on
the direction and emotional support a leader provides his or her followers as
they undertake a task. This model considers three important:
1. Task Behavior- The leader assigns the duties and
functions of members.
2. Relationship Behavior - The leader opens the lines
of communication between himself or herself and other
members.
3. Maturity and competence- The leader shows
willingness to take responsibility for leading the
members of the group. For workers, this refers to their
capability to get job done.
There are four leadership styles arising from this model:
1. Directing - The leader directs and gives clear instructions. This is good
tor followers who have low competence
2. Coaching -The leader is always open to two-way communication. He
or she continually motivates employees. This is good for followers who
are moderately competent.
3. Supporting - The leader and members of the group support each other.
There is active participation among workers who are moderately competent.
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4. Delegating - The leader has followers who are highly competent. The
followers are also highly motivated and take responsibility for accomplishing the
assigned task.
The path-goal theory of leadership describes the way
leaders support their followers in achieving their goals.
Its proponent, leadership theorist Robert House,
identified four leadership styles:
1. Supportive leadership -The leader supports a friendly
environment by looking after their subordinates’
welfare. This results in increased self-esteem among
workers. This approach is best when the job is stressful
or tedious.
2. Directive leadership - The leader communicates to the members of the
group the goals and expectations and assigns clear tasks. This approach is
effective for complex or unstructured tasks. This increases the workers'
confidence in performing their jobs especially if they are inexperienced.
3. Participative leadership-The leader consults with his or her followers
and considers their ideas in decision making. This approach is best when the
followers are experience and capable of providing ideas and advice regarding the
problem or task.
4. Achievement-oriented leadership - The leader trusts the capabilities
of workers and set challenging goals to motivate them to perform at their optimal
levels. This approach is best in dealing with complex tasks or in motivating
highly skilled and experienced employees.
Another theory is John Adair's action-centered leadership model.
Teamwork is essential in the accomplishment of tasks, and the leader puts
emphasis on the following elements depending on the situation:
1. Task includes defining the task, making plans, allocating resources,
and assigning specific tasks.
2. Team entails maintaining discipline, building team spirit, and
motivating members.
3. Individual includes attending to personal problems, recognizing and
using individual abilities, and developing group members.
CONTINGENCY THEORY
The contingency theory is a refinement of situational leadership. It
requires leaders to analyse a particular situation and identify the variables that
would determine the most effective leadership style that will address the given
situation.
Fred Fiedler's contingency theory emphasizes that there is no particular
leadership style that is the best for all situations. Fiedler identified three factors
that determine the nature of a managerial task:
1. Leader-member relations - refer to how well the manager and the
employees get along, and the trust and confidence the latter places on the
former.
2. Task structure - refers to how well the workers know how to accomplish
the task. Is the job highly structured, fairly unstructured, or somewhere in
between?
3. Position power - refers to the amount of power a manager has in
directing workers, and in giving rewards and punishment. It also considers the
maturity of the manager.
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Based on the assessment of the situation, the manager identifies a
leadershıp style most suited to the task at hand. The task-oriented leader
focuses on the accomplishment of task while the relationship-oriented leader
attempts to build highly satisfying interpersonal relations and extend help for
the development of teams.
TRANSACTIONAL THEORY
This theory considers the relationship between
followers and leader as key to achieving goals. Leaders
should give equal treatment and due recognition to
their members. This will motivate workers to be more
loyal and committed to the organization
This leadership style was first described by Max Weber in 1947 and
further by expanded Bernard Bass in 1981. This theory is preferred by most
managers because it focuses on the basic management process of planning,
organizing, and controlling. This theory also emphasizes the power of rewards
and punishment. If a subordinate does what the leader commands, a reward
will follow. Similarly, if he does the opposite, appropriate punishments will
result.
The leader-member exchange leadership theory describes how leaders
in group maintain their relationships through a series of agreements with
members. Leader-member relationship are established and nurtured in a
process that starts with role-taking. The next stage role-making, involves the
leader and member taking part in an informal negotiation where both of them
clarify their roles and build trust. Social exchanges between the leader and
member are established and finalized in the last phase which is called
routinization.
HIGHLIGHTS
TRANSFORMATIONAL THEORY
This theory emphasizes the concept of change and believes that leaders
are tasked to provide direction and implement changes through performance
and the attainment of goals. James Burns, an American historian, first
introduced the concept of "transforming leadership" which he defines as
leadership with a moral dimension, where the leader and followers engage each
other and bring each other to greater levels of aspiration. Bass considers the
direction of the influence as one-way. Bass also incorporates social change in
his theory of transformational leadership, a facet missing in Burns' work. Bass
defines transformational leaders as individuals who are able to perform the
following:
1. Expand a follower's portfolio of needs
2. Transform a follower’s self-interest
3. Increase the confidence of followers
4. Elevate followers' expectations
5. Heighten the value of the leader's intended outcomes for the follower
6. Encourage behavioral change
7. Motivate others to higher levels of personal achievement ( Maslow's self-
actual).
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1. It is a particular significant as it determines the willingness of a person to
use his or her ability to the utmost in a performing task.
a. Behavior c. Goal
b. Motivation d. All of the above
2. This is the most widely recognized theory of motivation that specifies the
needs of individual?
a. Maslow’s Hierachy of needs c. Maslow’s Heirarche of needs
b. Maslow’s Heirarchy of needs d. None of the above
3. This theory of motivation identified three major types of needs such as
existence, relatedness and growth. C. Herzberg’s Two-Factor Theory
a. McClelland’s Learned needs Theory d. Adam’s Equity Theory
b. Alderfer’s ERG Theory
4. is the belief that exerting effort will lead to the attainment of
performance goals.
a. Valence c. Trait Theory
b. Low motivation d. Expectancy
5. This theory focuses on innate attributes and characteristics that a
person’s possesses.
a. Behaviorist theory c. Leader theory
b. Trait theory d. None of the above
6. Is a German- American psychologist who developed the framework
that focused on a leader’s decision-making style?
a. Robert Tannenbaum c. Max Weber
b. Warren Schmidt d. Kurt Lewin
7. He is an America historian that was introduced the first concept of
“transforming leadership”.
a. Bernard Bass c. Noel Tichy
b. James Burns d. Bruce Avolio
8. This theory emphasizes that the leaders should give equal treatment and
due recognition to their members?
a. Transformational Theory c. Great Man Theory
b. Contingency theory d. Transactional theory
9. He is a business professor at the Yale school of management?
a. John Stacey Adams c. Clayton Alderfer
b. Victor Vroom d. None of the above
10. This theory emphasizes that there is no particular leadership style
that is the best for all situation.
a. Achievement Theory c. Behaviorist theory
b. Leadership Theory d. Contingency theory
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your output printed. 30 points each number. Use the Font style Bookman
Old Style, font size 12 with the margin of 1.5” left and 1” right (1.15 space).
19. Can a manager be effective if he or she does not have leadership skills?
Explain your answer.
20. Who consider you as a leader? Draw that person using a cardboard or
Styrofoam and color pen. Then cut it properly to make it real leader. Make
sure that the human can stand alone. (50 points)
NOTE: 2 RULERS OR 24 INCHES IN HEIGHT
CRITERIA PERCENTAGE
APPROPRIATENESS OF THE 50%

THEME
UNIQUENESS 50%
• CREATIVITY
• STRUCTURE
TOTAL 100%
Directions: Write your answer on the space provided.

1. It refers to a process of social influence that enables a person to
encourage others and enlist their aid and support.
2. Refers to the psychological process of directing behaviour which determines
the willingness of a person to use his or her ability to the utmost in
performing a task.
21. Defines the characteristics and behaviour of successful leaders and
identify leadership styles that managers can apply in the workplace.
22. This theory emphasizes the power of reward and punishment?
23. This leadership style has a follower who is highly competent.
24. This theory considers that leadership styles are specific to a particular
situation and that leaders adapt their actions and behavior to whatever
situation they are.
25. He identified the three leadership styles based on their decision-making

practices.
26. A workplace and behavioural psychologist who developed the equity
theory which proposes that employees become motivated when they feel they
are treated fairly.
27. These leaders take charge of decision making and relay the decision made
to their subordinate.
28. It means the structure of work and utilization of resources.
i. Review the topics discussed in this chapter “leading the

Organization”
96
Job well done! You accomplished the module chapter 9. You can now proceed to
chapter 10.
your own hard work.
A good leader is a good follower. In order to have a harmonious
relationship between you and your colleagues, always have a constant
communication because it is vital tool in ensuring that all members understand
their
uture task and responsibilities, so much so that all actions and operations are in
a structured manner. Give all the benefits as their rewards for their positive
feedback.
97
“As soon as the boss decides he wants his workers to do something, he
has two problems: making them do it and monitoring what they do.”
- Robert Krulwich-
To ensure that all operations are being conducted at optimal levels,
organizations must develop performance standards during their planning
phase. The establishment and implementation of standards is an important
aspect of controlling. Controlling is a major management function that
contributes to the achievement of organizational goals by checking errors and
addressing deviations from established performance standards.
Organizations should identify standards tor essential tasks and strive
to maintain them. Whenever performance falls below standards, the
organization must take corrective measures to address this problem. On the
other hand, when the organization exceeds its standards in particular project
or operation, it is advisable to reward the people responsible for such
achievement to reinforce exemplary job performance.
discuss the nature of controlling;

relate management control to accounting and marketing concepts and
techniques
Equity- the value of the shares issued by a company.
98
Receivables- assets considered as debt, unsettled transactions or other
monetary obligations owed to a company by its debtors or customers.
good you are.
1. This is a detailed and systematic analysis of past

and present marketing activities of the organization.
2. It include the gain or financial rewards received after a
particular activity or project.
3. This refers to processes implemented to control the
formulation and execution.
4. It is a type of marketing control that keeps track of the
efficiency of marketing expenditures such as sales force, advertising, sales
promotion, and distribution.
5. This is a detailed and systematic analysis of past and
present marketing activities of the organization.
NATURE OF CONTROLLING
Controlling is an ongoing process that involves members at all levels of
the organization. The control function is the responsibility of everyone, thus
employees are expected to address problems even if these are not within his or
her area of responsibility. The controlling function is both anticipatory and
retrospective. It anticipates problems so that immediate corrective actions can
be employed. It is also retrospective because it looks back and reviews previous
actions and operations in order to determine which aspects conform to
standards and which need improvement. In implementing controls, managers
assume that there is room for adjustments and further improvements.
Controlling is also considered an end function because this is performed

after all other functions are done. It is also a dynamic process because any
deviations from standard ds should be Immediately corrected. Constant
monitoring is a vital component of the control process.
In establishing effective control systems, the control measures
implemented should be applicable to all levels of the organization and should be
accepted and approved by all employees. Corrective actions should be
quantifiable, measurable, and relevant to the situation being addressed.
Management should also ensure that corrective measures implemented are
reasonable and cost-efficient. In implementing control measures, managers
99
should balance between relying on their instincts or "gut feel" and using
quantifiable data as bases for action.
The control process involves four main steps. These are as follows:
4. Establishment of standards. The first step is to develop criteria by which
performance will be measured. Standards can be quantitative or expressed
in terms of non-measurable elements such as customer loyalty and goodwill,
or they can be quantitative or expressed in terms of measurable standards
such as output, money, or time. Time standards set goals based on the
length of time devoted to the task. Cost standards are comprised of expected
financial expenses involved in the project or activity. Income standards,
meanwhile, include the gain or financial rewards received after a particular
activity or project.
5. Measure of performance. Performance is measured by identifying strategic
control points. These include indicators such as income, expenses, inventory,
product quality, and the number of work hours put in by employees.
Employee performance can be measured through actual observation. It can
also be measured by using devices that analyze machine operations and
production processes. Financial ratios can also be employed as a measure of
performance, where analysts take information from company's financial
statement and compare it with its main competitors. Financial ratios can also
compare the performance of the company with the industry average.
6. Comparison of the actual performance with the standards. Management
can gather data from performance measurement and compare it with the
established standards. The company can also conduct benchmarking by
comparing their performance rather exemplary practices from other
companies in the industry. Management can also determine the degree of
variation between the standard and the actual performance also check
whether the variation falls within acceptable limits.
7. Taking corrective actions and realigning processes when necessary.
When the company has determined that its performance has deviated from
the standard, corrective actions should be taken and applied. Deviations from
the standards may be a result of incorrect planning, a lack of coordination in
the conduct of tasks, Or the misinterpretation of instructions. Some
companies allow their employees to make necessary corrective measures to
their work. Other employees get directives from management on how to
implement necessary corrections to their jobs.
MARKETING CONTROLS
Control is also applicable in the marketing function

since setting performance standard is an important part of
developing marketing objectives. To determine the effectivity
established standards marketing plans and strategies, sales
performance is monitored and compared to
the established standards. Corrective action is
implemented in case of deficiencies in sales performance. Many companies
employ a marketing controller who is knowledgeable in both finance and
marketing processes. There are four types of marketing controls:
1. Strategic control-This refers to processes implemented to
control the formulation and execution of strategic plans. The
organization evaluates its activities to determine whether it is
100
taking advantage of opportunities in terms of target markets and
marketing channels. This is the responsibility of top management
and the marketing auditor. There are two tools used to implement
strategic control.
c. Marketing effectiveness - This marketing control tool evaluates
the extent and quality of customer relations, how the
marketing function is integrated with the other functions of
the organization, and how well marketing activities and
functions are coordinated. It also assesses the extent of the
marketing information system, the quality of current
marketing strategies, and how marketing plans are
communicated to other members of the organization. It also
looks into the effective use of marketing resources and the
company's responsiveness to new marketing
developments. Conducting a review of market effectiveness is complex endeavor
that uses a variety of data-gathering instruments such as questionnaires.
d. Marketing audit - This is a detailed and systematic analysis of
past and present marketing activities of the organization. It provides a forecast
of market growth in consonance with changing market conditions and gives
suggestions on how to improve sales performance. It also evaluates the total
marketing operation including its objectives and policies and includes an
evaluation of procedures and employees involved. The audit is done periodically
depending on the need of the organization. Managers conducting marketing
audit also conduct SWOT analysis and environmental scanning.
2. Annual plan control - This method uses annual marketing targets as
performance standards to determine whether the planned results or
outcomes were achieved. The following are the tools used in annual plan
control:
c. Sales analysis- This involves analyzing a company's sales data to
determine trends and changes in sales figures and identify any discrepancy or
variance in performance. This helps managers plan and direct sales efforts and
enables sales personnel to evaluate and improve their performance.
d. Market share analysis- This determines the overall standing of
the company against its competitors. The company gathers information
regarding the characteristics of the market, its key players, and significant
markets segment.
g. Marketing expenses to sales ratio- This entails comparing
marketing expenses with the achieved sales of the company.
Marketing expenses require a marketing budget which is a set of
planned marketing expenditures needed to achieve targeted sales
within a set period.
3. Customer tracking - These are methods that determine customer behavior
and their reactions to marketing activities. These include consumer panels,
collecting data on returns and complaints, customer surveys, and sales force
reports. Customer tracking provides a good basis for direct consumer
feedback on satisfaction with the products and services offered.
4. Profit control - This determines the profitability of
company activities and identifies where the company is
making or losing money. Profitability is analyzed by
product, segment, territory, customer, order size, and
trade channel.
101
5. Efficiency control - This keeps track of the
efficiency of marketing expenditures such as sales force,
advertising, sales promotion, and distribution. Efficiency control analyzes each
of these elements to ensure that they are being utilized efficiently for the
achievement of company objectives.
HIGHLIGHTS
• Controlling is closely related to planning as the plans and strategies
formulated by management become the basis for identifying standards
that guide the control process. In turn, the information provided by
control methods become the basis for revisions and improvements to
future plans.
• Controlling is closely related to planning as the plans and strategies
formulated by management become the basis for identifying standards that
guide the control process. In turn, the information provided by control methods
become the basis for revisions and improvements to future plans.
• Control is implemented in the organization in various ways. Some
control methods are based on timeliness or the stages of production and include
feedforward control, Concurrent control, and feedback control. Other control
methods and systems implemented in the organization include administrative
control, delegation, evaluation, financial reports, performance appraisal, policies
and procedures, and quality control.
Controlling is a major management function that contributes to the

achievement of organizational goals by checking errors and addressing
deviations from established performance standards. Organizations set
standards for essential tasks and these guides their performance.
Whenever performance falls below standards, the organization must take
corrective measures to address this problem.
Directions: Fill in each black with the correct answer.

1. It is a major management function that contributes to the
achievement of organizational goals by checking errors and addressing
deviations from established performance standards.
2. It is a type of marketing control that keeps track of the
efficiency of marketing expenditures such as sales force, advertising, sales
promotion, and distribution.
3. This refers to processes implemented to control the
formulation and execution.
4. This is a detailed and systematic analysis of past and
present marketing activities of the organization.
5. This marketing control tool evaluates the extent and
quality of customer relations, how the marketing function is integrated with the
other functions of the organization, and how well marketing activities and
functions are coordinated.
6. a set of goals based on the length of time devoted to the
task.
102
7. they are comprised of expected financial expenses involved
in the project or activity.
8. It include the gain or financial rewards received after a
particular activity or project.
9. It should be quantifiable, measurable, and relevant to the
situation being addressed.
10. These include indicators such as income, expenses,
inventory, product quality, and the number of work hours put in by employees.
.
your output printed. 30 points each number. Use the Font style Bookman Old
Style, font size 12 with the margin of 1.5” left and 1” right (1.15 space)
29. Why is controlling considered a vital management function?
30. What is the relationship between controlling and planning? How do these
two functions complement each other?
Directions: Write T if the statement is true, and if it is false, changed the

underlined word to make the statement true. Write your answer in the
blank before each number. 2 points each number
1. Annual Plan control evaluates the extent and quality of customer
relations, how the marketing function is integrated with the other
functions of the organization, and how well marketing activities and
functions are coordinated.
2. Profit control are methods that determine customer behavior and their
reactions to marketing activities.
3. Customer tracking these are methods that determine customer behavior
and their reactions to marketing activities.
4. Leadership is an ongoing process that involves members at all levels of the
organization.
5. Customer tracking examines whether the planned results or outcomes are
achieved by using annual marketing targets as performance results.
1. Review the topics discussed in this chapter “Controlling the Organization”

103
uture
proceed to the last chapter of this module which is chapter 11.
your own hard work. Just read and read and never give up.
Soon you will be boss of your own organization and as boss it is advisable
to reward the people responsible for such achievement to reinforce exemplary
job performance.
Give all the benefits as their rewards for their positive feedback.
104
Management encompasses several activities, functions, and tasks in an
organization. In particular, the functions of management are applied in
several specialized functional areas of the organization.
The application of management functions in specialized areas requires
managers to have specialized skills apart from the expertise in the main
management functions of planning organizing, staffing, leading, and
controlling. This implies that any skilled member of an organization is capable
of becoming a manager as he or she can use her specialized skill, coupled
with knowledge of management skills, to lead his or her department. On the
other hand, managers are also required to be familiar with certain aspects of
specialized areas with the organization to better understand it and effectively
apply management skills to these areas. The manager, therefore. must have
an awareness of his or her skills, motives, and values better understand how
to apply them in effective management.

hesitate to ask your teacher to unlock your difficulties.
This will be the last chapter in your module. Read, read and Enjoy !
explain the nature and role of the following functional areas of

management:
a. Human resource management,
b. Marketing management,
c. Operations management,
d. Financial management,
e. Materials and procurement management,
f. Office management, and
105
g. Information and communication technology management;
Sealed bid- a type of bid where suppliers put their bids in sealed envelopes
that are only opened during the review. The bids are evaluated to
determine the capacity of the suppliers to fulfill the terms and conditions
set by the company, and the contract is usually awarded to the bidder
with the lowest price.
good you are.

1. He /She keeps track of employee records, skills, performance
and training, and is utilızed in compensation analysis, training and
development, and hula resource planning.
a. Sales information system c. Human Resource system
b. Finance and Accounting information system d. one of the above
2. Define and classify job positions and ensure access to information on each
job and position in the organization.
a. Job Analyst c. Training specialists,
b. Recruitment managers d. HR managers
3. Is tasked with managing the overall marketing operations of the organization.
a. The marketing director c. Account executives
b. Marketing managers d. None of the above
4. Is defined as the art and science of managing money.
a. Finance c. Finance manager
b. Treasurer d. Chief Financial officer
5. __________________ Monitor and establish control mechanism on the flow of
cash receipts and disbursement.
a. Cash managers c. Finance managers
b. Credit managers d. All of the above
FUNCTIONAL AREAS OF MANAGEMENT IN THE ORGANIZATION

There are several functional areas of management: human resource, marketing
operations, and production, finance, materials and procurement, office
management, and formation and communications technology. These are the
significant areas that contribute to the operation of the organization. Manager
therefore, focus their efforts in ensuring that these areas function efficiently and
effectively by implementing the various management functions in their
respective tasks and projects.
106
HUMAN RESOURCE MANAGEMENT
Human resource management (HRM) includes tasks
and activities performed by HR managers, specialists,
and operating managers. These operating managers
include supervisors, managers, department heads,
directors, and vice presidents. The effective
management of human resources has a significant
impact on operations and production. If human
resources are not managed properly, they
can adversely affect the utilization of material resources such as money, raw
materials, and equipment resulting in a decline in organizational effectiveness.
There are several types of HR specialist who perform specific HR functions.
HR managers outline the different positions from top
management up to the people in the lowest level of the
organization. HR managers recruit, conduct interviews,
and manage benefits based on company policies.
Managers Oversee human resource management and
see to it that employee potentials and abilities are
utilized to the fullest and that their work satisfaction
remains high.
Recruitment managers are specialists responsible for the screening, hiring,
and placemat of candidates in suitable positions in the organization. They
continuously search for qualified applicants to fill vacant positions by employing
various means to find and acquire people who can be an asset to the
organization. Applicants are screened through interviews, specialized tests, and
background checks to ensure that candidates are suitable for the job and for
the organization as a whole. Job analysts define and classify job positions and
ensure access to information on each job and position in the organization.
Compensation and benefits managers develop salary structures, analyze
prevailing salary rates in the market and classify benefits based on job positions,
levels, and length of service. They see to that salaries are given fairly and on
time.
Training and development managers enhance and improve the skills of the
employees through the implementation of appropriate training programs. These
programs not only on the skills related to job performance, but also help
employees in their total grown a person. Training specialists, meanwhile,
develop modules, prepare lessons, invite speakers and conduct training needs
analysis in order to create appropriate training programs for employees. They
also assist employees in coping with technological changes by designing
programs that will orient them regarding the latest technologies and develop
their skills in using them.
Finally, employee relations managers take charge of formulating policies,
creating employee handbooks and manuals, coordinating with labor groups,
managing employee complaints and concerns, and dealing with employee
violations. They also handle dispute and conflict settlements among employees.
Specialists use their knowledge of labor laws and wage and salary data in dealing
with employee concerns as well as in negotiating with labor groups.
MARKETING MANAGEMENT
107
Marketing management involves overseeing the
development of new products, advertisements,
promotions, and sales. In small companies, the owners
do the actual marketing activities such as selling,
advertising, and promotions. Large companies, on the
other hand, have their own marketing and sales
department that oversees the marketing activities of the
organization. This department is composed of
employees who are assigned various tasks.
The marketing director is tasked with managing the overall marketing
operations of the organization. Extensive knowledge in advertising, finance, and
planning are crucial in this position. The marketing director must effectively
manage both the budgeting and the creative process. Apart from having a
marketing director, some companies also appoint a vice president for marketing
management.
Marketing managers are tasked with developing
strategies for the brand by analyzing the demand for
the product or service. They monitor the activities and
strategies of competitors and formulate strategies to
maintain awareness of and demand for the brand. They
also identify potential markets, distributors, and
competitors. Marketing managers also deal with
customers.
distributors, and government agencies in the course of their work. Marketing
managers are also called product managers or brand managers.
Public relations managers, meanwhile, take charge of promoting the company
or organization to the public and enhancing its corporate image. They are in
charge of publicity and ensure that the company maintains its reputable image
in the market and its edge among competitors.
Account executives manage client accounts of departments and prepare
commercials and advertisements for them. They coordinate with advertising
managers who supervise all creative works including conceptualizing and
creating storyboards and contacting media or promotion agencies for the
distribution of the material. The creative director ensures that the
advertisements specified by the clients are produced and delivered promptly.
The media director, meanwhile, selects the appropriate medium for the
advertisement.
Another important aspect of marketing is promotion. This ensures that the
information or message reaches the appropriate clientele and awareness is
raised regarding the product or service being marketed. Promotion managers
supervise all promotional activities of the firm. These activities encompass all
activities for dealers, distributors, and consumers. Promotion Specialists
assist in the preparation of promotional materials such as coupons, flyers,
pamphlets, brochures, gifts, and discount cards. They also provide support in
the preparation of contest mechanics and events such as trade shows to promote
the product or service.
Personnel that take charge of sales include sales managers who take charge of
selling the product or service by establishing sales objectives and encouraging
sales personnel to attain or even exceed their sales targets. The sales
representatives do the actual selling and ensure that the products reach
108
consumers. They are also in charge of identifying and monitoring customer
preferences and needs.
OPERATIONS MANAGEMENT
Operations management focuses on designing and
controlling production and business operations related
to production. It involves management of facilities,
processes, distribution, and resource planning. The
operations department is staffed by personnel who are
tasked with the smooth flow of production and related
activities.
Production managers deal with the resource and service

requirements of manufacturing or production. Their
managerial tasks vary trom one organization to another since
production tasks branch out into several operations like
production scheduling, procurement, maintenance, and
equipment and facilities repair. The most crucial task of
production managers is to ensure a smooth flow of activities
through production scheduling. The production manager
has to make sure that the plant meets the production quota,
considering financial and time constraints. Production
techniques are employed based on the requirements set by
top management.
Production supervisors, on the other hand, are assigned to specific parts of the
assembly line or production area. They oversee production operators who do
the actual production work. Production supervisors regularly report to the
production managers.
FINANCIAL MANAGEMENT
Finance is considered the "lifeblood of business”
since all organizations need financing meet their sales
requirements and sustain operations. Finance is
defined as the art and science of managing money. It
can also be defined as the effective acquisition and
manage of the assets of an organization.
All firms have a finance manager that supervises all finance operation. Finance
managers raise funds, invest in assets, and manage them effectively in an
economically unstable environment. They allocate resources efficiently to ensure
that these contribute to the grow of the organization.
The head of the finance department in large companies is called the chief
financial officer (CFO). The CFO reports directly to the president or chief
executive officer (CEO). The finance department is composed of finance
personnel that include the treasurer and controller. The treasurer is mostly
involved in major areas of financial management such as investment, financing,
and asset management. Treasurers are responsible for overseeing budget
requirements and assessing investment opportunities and risks. The controller
is tasked with preparing financial reports such as income statements, balance
sheets, and cash flows. These reports help in assessing the financial position of
the organization. Controllers also supervise the accounting, audit, and budget
departments
109
Finance managers direct the activities of the finance department and are
responsible for making major financial decisions for the company. They
formulate comprehensive strategies and outline corresponding plans for the
other personnel in the department. Finance managers make important decisions
in the following areas:
1. Investment Decision-This is the most important financial
decision because managers have to determine how much of
the total assets should be held or utilized by the firm and how
these will be used by the company. For example, a finance
manager has to decide regarding two options that will
increase the company's production. The company can acquire
a piece of land where a new plant facility can be built or it can
invest in new technology or equipment to improve operations
in existing facilities. Managers must weigh the pros and cons
or each financial option by analyzing financial data and
considering economic factors in the business environment.
2. Financing decision - Finance managers have to decide what type of financing
should be availed of by the company. The company can use its existing assets,
borrow, or sell shares of stock. When the company decides to avail of loans to
finance its operations finance managers determine the amount or the loan, set
its interest rate, and define the terms of payment.
3. Asset management decision - After acquiring assets and deciding on
appropriate financing options, the company must effectively manage the
resulting financing. Managers take charge of managing the funds acquired from
investments and loan and ensure that these contribute to meeting the objectives
of the organization and result in profits for the company.
Finance managers are also classified into various specialized positions with
specific tasks. Credit managers develop credit policies and monitor collection
of accounts. Cash managers monitor and establish control mechanisms on the
flow of cash receipts and disbursements. They also develop strategies as to
where to invest surplus cash. Finance managers are employed by banks, credit
companies and other financial institutions to supervise lending, mortgages,
investment, and other financial activities.
MATERIALS AND PROCUREMENT MANAGEMENT
Procurement is the act of purchasing or acquiring
goods and services for company use. Companies
usually have a separate department for procurement,
which is called the purchasing department. This
department is charged with the acquisition of
materials and resources for the different departments in the organization.
An important role of procurement management is to determine the sources of
materials and identify and implement processes that will enable the company to
acquire these resources. It is the responsibility of the purchasing managers and
buyers or purchasing officers to find the best goods, raw materials, and services
at the lowest possible cost. Purchasing managers or procurement managers
supervise the procurement process of the company. They evaluate and approve
requests for acquisition and ensure that materials purchased are of good quality
and purchased at competitive prices. Buyers or purchasing officers,
meanwhile, acquire specific products and services required by the company.
110
They write requests for bids, proposal and quotes, and evaluate information
regarding procurement. Purchasing officers should be familiar with the items to
be purchased since they communicate and negotiate with suppliers. Those who
are in charge of procurement in government offices should ensure that proper
procedures are observed in awarding contracts, supplies, and projects for public
use or consumption. A wholesale buyer is a type of buyer who purchases
merchandise for resale to retailers and others firms like supermarkets and
convenience store. A Wholesale buyer is a type of buyer who purchases
merchandises for resale to retailers and other firms like supermarkets and
convenience stores.
Most organizations implement competitive bidding
only opened during in the procurement of materials
and services. This is the actual review. The process
where prospective suppliers submit their bids which
bids are evaluated too indicate their willingness to
provide products and services to the company at
certain prices.
OFFICE MANAGEMENT
Office management involves the proper
handling and maintenance of the clerical aspects of all
the functional departments of the organization, as well
as the facilitation of proper communication,
coordination, and storage of data. Many companies
have a separate department for office management
which is called the administrative department. It
employs a pool of secretaries, office managers, and
executive assistants who serve in the different
departments. The department also takes charge of
facility management and supervises the custodial and maintenance personnel
such as receptionists, janitors, and security personnel. Office management also
involves payroll, records, telecommunications, and parking management.
INFORMATION AND COMMUNICATIONS TECHNOLOGY MANAGEMENT
` Information technology refers to the application of
computer and telecommunication technology to store,
manage, and transmit data in businesses and other
organization. Implementation of technology in information
management requires the creation of information systems to
handle data specific to certain organizations.
Information systems are organized systems or network that collect, store, and
disseminate information required to support key organizational functions.
Business organizations also employ a variety of information systems in the
conduct of their operations, each handling a specific set of information related
to specific functional areas.
1. Sales and marketing information system is engaged in sales forecasting,
pricing analysis, and order processing. The system is also involved in planning
for facilities, location, machine control, and production.
2. Finance and accounting information system monitors the company's
assets an fund flows, and is indispensable in budgeting, accounts receivable,
and financial planning
111
3. Human resource system keeps track of employee records, skills,
performance and training, and is utilızed in compensation analysis, training and
development, and hula resource planning.
Information system management take charge of establishing an information
system, managing its components and programs, and rendering technical
support to the various departments in the organization. Their tasks include
software and hardware management, networking, and internet maintenance.
One kind of information system software implemented in business organizations
is enterprise system which integrates the key business processes of an
organization into central repository.
HIGHLIGHTS
• Human resource (HR) management is a major functional area that
primarily deals with the staffing function of management. The
department in charge of this function is tasked with the recruitment of
potential asset employees for the company.
HR managers also see to it that employees utilize their fullest potential and
abilities and ensure the work satisfaction of the workforce.
• Marketing management involves the task of overseeing the development
of new products, advertisement, promotions, and sales. Business
organizations establish marketing and sales departments to handle
activities for the organization. Marketing managers plan strategies to
market products and services, identify the means to implement
advertising and the effective channels to engage the market. and.
determines courses of action in maintaining the company's market share
and sales.
• Operations management is primarily involved in manufacturing or
production.
• Financial Management has the task of acquiring funds and effectively
utilizing them for the operation of the company.
• Material and Procurement management handles the purchase or
acquisition of goods and services for company use.
• Office Management involves handling and maintaining the clerical aspects
of all functional area of the organizations.
• Information and Communication Technology ensure the optimum
performance of the information system used in the organization.
Management functions are applied in several functional areas of the

business organization. Apart from exercising the major functions of
planning, organizing, staffing, leading, and controlling, managers are also
expected to be familiar with specialized areas of their organization as they
will be managing specific tasks and operations to ensure the success and
profitability of the organization.
112
Directions: Underline the correct answer.
1. He/ She recruit, conduct interviews, and manage benefits based on company
policies.
a. HR manager c. Human Resource Management
b. Recruitment Managers d. All of the above
2. He/ She are responsible for screening, hiring, and placement of candidate
in suitable positions in the organizations.
a. Marketing management c. Human Resource Management
b. Recruitment managers d .All of the above
3. He/she are in charge of publicity and ensure that the company maintains
its reputable image in the market and its edge among competitors.
a. Public Relation Managers c. Marketing managers
b. Marketing director d. Accounts executive
4. Is defined as the art and science of managing money.
b. Treasurer d. Chief Financial officer
5. He/ She are tasked with preparing financial reports such as income
statements, balance sheets, and cash flows.
b. Treasurer d. none of the above
6. It refers to the application of computer and telecommunication technology
to store, manage, and transmit data in businesses and other organizations.
a. Information System c. Information Technology
b. Information Communication d. Information system managers
7. He /She keeps track of employee records, skills, performance and training,
and is utilızed in compensation analysis, training and development, and
hula resource planning.
c. Sales information system c. Human Resource system
d. Finance and Accounting information system d. one of the above
8. It involves payroll, records, telecommunications, and parking management.
a. Office Management c. Human Resource system
b. Information Technology d. none of the above
9. Is the act of purchasing or acquiring goods and services for company use?
a. Purchasing department c. Purchasing managers
b. Procurement d. Procurement Manager
10. __________________ Monitor and establish control mechanism on the flow
of cash receipts and disbursement.
a. Cash managers c. Finance managers
b. Credit managers d. All of the above
113
Choose one of the functional areas of management, then after choosing, draw it
in a cardboard or in Styrofoam then cut to make it a real human individual.
Make sure that the human can stand alone.
NOTE: 2 RULERS OR 24 INCHES IN HEIGHT
CRITERIA PERCENTAGE
APPROPRIATENESS OF THE THEME 50%
UNIQUENESS 50%
• CREATIVITY
• STRUCTURE
TOTAL 100%
Directions: Write T if the statement is true, and if it is false, changed the

underlined word to make the statement true. Write your answer in the
blank before each number. 2 points each number
6. Office management involves the proper handling and maintenance of the
clerical aspects of all the functional departments of the organization, as
well as the facilitation of proper communication, coordination, and storage
of data.
7. Finance and accounting information system is engaged in sales
forecasting, pricing analysis, and order processing.
8. Training specialists enhance and improve the skills of the employees
through the implementation of appropriate training programs.
9. Recruitment managers are specialists responsible for the screening,
hiring, and placemat of candidates in suitable positions in the
organization
10. Compensation and benefits managers define and classify job
positions and ensure access to information on each job and position in
the organization.
1. Review the topics discussed in this chapter “Functional Areas of

Management
114
Job well done! You accomplished the module chapter 11.
uture You are really good and amazing for better outcome. Hoping that this
Your SUCCESS is your EFFORT; likewise your EFFORT is your

SUCCESS.
Congratulations Grade 11 for the job well done. Never stop DOING
THINGS THAT IS BEST FOR YOU BECAUSE I KNOW AT THE END OF THE YOU
WILL BE BENEFITED WITH YOUR OWN EFFORT. NEVER GIVE BECAUSE
TIME WELLCOME YOU WILL BE HARVESTING THE REAL TREASURE OR
WEALTH WHICH IS THE WORD VICTORY!!!!!!
THANK YOU VERY MUCH AND GOD BLESSES US ALL…..
115

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My dear students, personally, I would like to welcome you all to the world of

Discuss the nature of management,

For better understanding, some terms were defined for you.

Corporate social responsibility- the willingness of companies to run their

Directions: Write T if the statement is true. If the statement

1. The driving force of people to do business in

Congratulation JOB well done my dear manager

Management has always been attributed to the activities of an

Management is a science as well as an art. It is a body of knowledge whose ideas

Management is the process of planning, organizing, leading, and controlling the

EFFECTIVENESS, meanwhile, is the capacity to attain an intended objective or

SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY

▪ Management is the process of planning, organizing, leading, and

Direction: Write T if the statement is true. If the statement is false, write F.

Direction: Write T if the statement is true and F if the statement is False

1. Review the topics discussed in this chapter for Nature of Managements

2. Do you Agree that “Good management is the art of making problems so

Trace the evolution of management theories,

For better understanding, some terms were defined for you.

Assembly Line- the manufacturing process where products parts undergo

Directions: Identify the terminology being defined. Choose your

1. Discipline 5. Abraham Maslow

Congratulation JOB well done my dear manager

SCIENTIFIC MANAGEMENT THEORY

Scientific management is a theory of management which

HUMAN RELATIONS THEORY

The human relations theory grew out of the human

The contingency theory argues that universal theories cannot

QUALITY MANAGEMENT THEORY

The Japanese concept of kaizem, introduced in 1986, focuses on the continuous

Management principles have been practiced since ancient times.

1. Assembly Line of Ford’s Model T a. Administrative Management Theory

OPTION 1: Using your creative mind, record and do a vlog.

1. Discipline 6. Abraham Maslow

1. Organization of jobs and materials must be done in

1. Review the topics discussed in this chapter the ‘’ Evolution of Management’’

Dr. Cynthia A. Zarate, Organization and Management, C & E Publishing

According to Agha Hasan Abedi “The conventional definition of management is

Managers perform the main managerial functions in the organization and

Identity the main functions of management

For better understanding, some terms were defined for you.

Stakeholders- groups of people that may be affected by the actions, policies,

Congratulation JOB well done my dear manager

THE PROBLEM-SOLVING MANAGER

THE PONTIFICATING MANAGER neither

THE PRESUMPTUOUS MANAGER thinks only

THE PASSIVE MANAGER wants to please

This type of manager is described as very

MAIN MANAGEMENT FUNCTION

PLANNING is the management function wherein managers identify and select

INTERPERSONAL MANAGEMENT ROLES

INFORMATIONAL MANAGEMENT ROLES

DECISIONAL MANAGEMENT ROLES

4. . Negotiator As a negotiator, the manager takes charge of

The main functions of management are planning, organizing,

1. In this interpersonal role, the Manager assumes social,

________1. It is the role of managers where he or she handles disturbances among

________6. Refers to the manager’s ability to analyze a particular situation.

________8. This is an organization in such a way that employees are grouped

Dr. Cynthia A. Zarate, Organization and Management, C & E Publishing Inc.

According to Paul Hawken “Good management is the art of making problems so

The external environment is a major factor that influences a company's

Identify the various forces of the firm's environment,