Organization and Management

(First Quarter)

Management - is a process of coordinating and overseeing the work

performance of individuals working together in organizations, so that
they could efficiently accomplish their chosen aims or goals.
(Management Functions)

Heinz, Weihrich, and Koontz (2005) - It is also defined as process of

designing and maintaining an environment for efficiently accomplishing
selected aims.

MANAGEMENT FUNCTIONS
Planning – involves determining the organization’s goals or
performance objectives, defining strategic actions that must be done to
accomplish them, and developing coordination and integration activities.

Organizing – demands assigning tasks, setting aside funds, and bringing

harmonious relations among the individuals and work groups or teams in
the organization.

Staffing – indicates filling in the different job positions in the

organization’s structure.
Leading – entails influencing or motivating subordinates to their best so
that they would be able to help the organization’s endeavour to attain
their set goals.

Controlling – involves evaluating and, if necessary, correcting the

performance of the individuals or work groups or teams to ensure that
they are all working toward the previously set goals and plans of the
organization.

Coordination – harmonious, integrated action of the various parts and

process of an organization.

Efficiency – being able to yield the maximum output from minimum

amount of input.

Effectiveness – being adopted to produce an effect or being able to do

things correctly.

Evolution – defined as slow stages of growth and development, starting

from simple forms to more complex forms.

Scientific Management Theory – makes use of step by step, scientific

methods for finding the single best way for doing job.

Frederick W. Taylor (1856-1915) – is the father of Scientific

Management
General Administrative Theory – concentrate on the manager’s
functions and what makes up good management practice or
implementation.

Henri Fayol (1841-1925) – concerned with managerial activities which

he based on his actual experience as a managing director in a big coal
mining company. He believed that management is an activity that all
organizations must practice and viewed it as separate from all other
organizational activities.

Max Weber (1864-1920) – a German sociologist wrote that ideal

organizations especially large ones must have authority structures and
coordination with others based on what he referred to as bureaucracy.
Present-day organizations still make use of Weber’s structure design.

Total Quality Management (TQM) – is a management philosophy that

focuses on the satisfaction of customers, their needs, and expectations.
This concept had few supporters. Americans didn’t immediately take to
the idea because they are enjoying the supremacy in the global market at
that time. Japanese manufacturers took notice of it and enthusiastically
experimented on its application.

W. Edwards Deming (1900-1993) and Joseph M. Juran (1904-2008)

– the brain of this concept. (1950’s)

Organizational Behaviour (OB) Approach – involves the study of the

conduct, demeanour, or action of people at work.
Robert Owen, Mary Parker Follett, Hugo Munsterberg, and
Chester Barnard – early supporter of this concept.

Robert Owen - 1700s, he noticed lamentable conditions in workplace

and proposed ideal ways to improve the said conditions.

Mary Parker Follett – 1900s, introduced the idea that individual or

group behaviour must be considered in organizational management.

Hugo Munsterberg – 1900s, proposed the administering of

psychological tests for the selection of would-be employees in
companies.

Chester Barnard – 1930s, suggested that cooperation is required in

organizations since it is mainly a social system.

Management Theories – theories that help improve the management

process.

Management Process - is coordinating and overseeing of the work

performance of individuals working together in organizations so that
they could efficiently and effectively accomplish their chosen goals.

Manager – an individual engaged in management activities.

MANAGERIAL LEVELS
Top-level Managers – are the general or strategic managers who focus
on long-term organizational concerns and emphasize the organization’s
stability, development, progress, and overall efficiency and
effectiveness. Composed of high-ranking company executives.

Managerial Roles – the various roles played by managers, such as

interpersonal, informational, and decision-making roles.

Managerial Skills – various skill that managers must possess, such as

conceptual human and technical skills.

Middle-level Managers – are the tactical managers in charge of the

organization’s middle levels or departments. They formulate specific
objectives and activities based on the strategic or general goals and
objectives developed by the Top-level managers. Their traditional role is
to act as go-betweens between higher and lower levels of the
organization.

Frontline or Lower-level Managers – are also known as operational

managers and are responsible for supervising the organization’s day-
today activities. It requires high level of interpersonal and technical
skills. They are the bridge between management and non-management
employees.

MANAGERIAL ROLE OF HENRY MINTZBERG

Interpersonal
•leader
•liaison
•figurehead

Informational
•spokesperson
•monitor
•disseminator

Decisional/Decision-Making
•disturbance handler
•resource allocator
•Negotiator
•entrepreneur

Leader – one who possesses good leadership qualities or a combination

of good moral character, strong professional will, humility that builds
enduring greatness, and commands loyalty and respect among
subordinates.

Liaison – one who is capable of maintaining unity of action in

organization.

Figurehead – one who has nominal leadership but without real power,
as this power is possessed only by the company’s President/Owner.
Spokesperson – one who speaks in the name and behalf of another.

MANAGERIAL SKILLS
Conceptual Skills – enable managers to think of possible solutions to
complex problem.

Human Skills – enable managers in all levels to relate well with people.

Technical Skills – are also important for managers for them to perform
their tasks with proficiency with the use of their expertise.

Business Environment – refers to the factors or elements affecting a

business organization.

External Business Environment – includes the factors and elements

outside the organization which may affect its performance either
positively or negatively.

Internal Business Environment – refers to the factors or elements

within the organization which may affect its performance either
positively or negatively.

COMPONENTS OF THE EXTERNAL BUSINESS

ENVIRONMENT
Economic Situations – inflation, rates of interest, changing options in
stock markets, and people’s spending habits.

Sociocultural Situations – include the customer’s changing values and

preference.

Politico-legal Situations – refer to national or local laws, international

laws, and rules and regulations that influence organizational
management.

Demographic Situations – gender, age, education level, income,

number of family members, geographic origin, etc.

Technological Situations – companies involve the use of varied types

of electronic gadgets and advanced technology.

World and Ecological Situations – related to the increasing number of

global competitors and markets, as well as the nature and conditions of
the changing natural environment.

Stakeholders – are parties likely to be affected by the activities of the

organization.

Customers – are those who patronize the organization’s products and

services.
Suppliers – are those who ensure the organization’s continuous flow of
needed and reasonably priced inputs or materials required for producing
their goods and rendering their services.

Pressure Groups – are special-interest groups that try to exert influence

on the organization’s decisions or actions.

Investors/Owners – provide the company with the financial support in

needs.

Employees – are comprised of those who work for another or for an

employer in exchange of salaries/wages or other considerations.

DEFINITION OF TERMS
Environmental Scanning – seeking for and sorting through data about
environment.

Inflation – a period of above normal general price increases, as reflected

in the consumer and wholesale price indexes.

Interest Rates – the total amount that a borrower must pay annually to
the lender and above the total amount borrowed.

Changing Options – the consumers change in preference of goods and

services offered.
People’s Spending Habits – consumers’ changing ways of spending
their money on goods and services.

COMPONENTS OF THE INTERNAL BUSINESS

ENVIRONMENT
(SWOT) Strengths and Weaknesses, Opportunities, and Threats.

Business Prediction – also known as business forecasting, is a method

of predicting how variables in the environment will alter the future of
business.

Benchmarking – is defined as the process of measuring or comparing

one’s own products, services, and practices with those of the recognized
industry leaders in order to identify areas for improvement.

Cultural Intelligence – is an individual’s ability to favourably receive

and adjust to an unfamiliar way of doing things.

Anthropologist Edward T. Hall as cited by Schermerhorn (2008) –

noted that the way people approach and deal with time varies across
cultures.

Monochronic Cultures – refer to cultures wherein people tend to do

one thing at time.
Polychronic Cultures – are more flexible as regards time;
accomplishing many different things at once.

Geert Hofstede, also cited by Schermerhorn (2008)

• showed how selected countries ranked on the five cultural dimensions.

Power Distance – the degree to which a society accepts or rejects the

unequal distribution of power among people in organizations and the
institution of society. Philippines is high in this concept.

Uncertainty Avoidance - degree to which society is uncomfortable with

risk, change, and situation uncertainty. Filipinos are seguristas.

Individualism-Collectivism – degree to which a society emphasizes

individual accomplishments versus collective accomplishments.
 Philippines exhibit collectivism or preference for group or team
work.

Masculinity-Femininity – degree to which a society values

assertiveness and feelings of material success versus concern for
relationships.
 Filipinos, Thais, and Swedes would rather keep quiet and accept
defeat if what they want isn’t acceptable to others, thus, exhibiting
femininity.
Time Orientation – degree which a society emphasizes short-term
thinking versus greater concern for the future or long-term thinking.

Politico-legal Environment – refers to the laws and political climate of

different countries.

DEFINITION OF TERMS
Worldwide Environment – refers to the external business environment
around the world.

Globalization – refers to changes in the dimensions of external

environment that result to increased interdependence and integration
among people and organizations around the world.

Sustainable Economic Development – ensures that the present needs of

a particular generation are fully met without endangering the ability of
future generations to also fully meet their own needs.

DEFINITION OF TERMS
Economic Development – is a total process which includes not only
economic growth or the increase in the given amount of goods and
services produced by the country’s economy, but also considers the
social, political, cultural, and spiritual aspects of the country’s growth.

Economic Development Phases – are the distinct stages involved in the

total process of economic development in a particular country.
Economic Growth – increase in the given amount of goods and services
produced by the country’s earning.

National Economic and Development Authority (NEDA)

Philippine Development Plan (PDP)
Millennium Development Goals (MDG)
Association of Southeast Asian Nations (ASEAN)
Economic Community (AEC)
International Labor Organization (ILO)
Asian Development Bank (ADB)

DEFINITION OF TERMS
Inflation Rate – rate reflected during period of above normal general
price increases.

Gross National Product (GNP) – total domestic and foreign output

claimed by the residents of a country.

Gross Domestic Product (GDP) – total final output of goods and

services produced by the country's economy, within the country's
territory.

Currency Exchange Product - the rate at which central banks will

exchange the country's currency for another.
Adam Smith – was the first development economist.

NEDA – Inclusive growth means, first of all, growth that is rapid

enough to matter, given the country’s large population, geographical
differences, and social complexity. It is sustained growth that creates
jobs, draws the majority into the economic and social mainstream, and
continuously reduces mass poverty.

Robbins and Coulter (2009) – Business organizations may be

traditional or open/flexible in form.

Simple Business Organizations – refers to the business organizations

with few departments, centralized authority with a wide span of control,
and few formal rules and regulations.

Functional Business Organizations – pertain to business organizations

that group together those with similar or related specialized duties that
introduce the concept of delegation of authority to functional managers.

Divisional Business Organizations – made up of separate business

units that are semi-autonomous or semi-independent, with a division
head responsible for his/her unit’s performance.

Profit Business Organizations – designed for the purpose of achieving

their organizations’ mission, vision, goals, and objectives and
maintaining their organizational stability through income generation and
profit-making activities.

Non-profit Organizations – designed for the purpose of achieving their

organizations’ mission, vision, goals, and objectives, providing service
to clients without expecting monetary gains or financial benefits to their
endeavours.

Open/Flexible Business Organizations – formed to meet today’s

changing work environment.

DEFINITION OF TERMS
Organization – a collection of people working together to achieve a
common purpose.

Business Organization – a collection of people working together to

achieve a common purpose in relation to their organization’s mission,
vision, goals, and objectives, sharing a common organizational culture.

Organizational Culture – the set of beliefs and values shared by

organization members which guide them as they work together to
achieve their common purpose.

OTHER FORMS OF BUSINESS ORGANIZATIONS

Team Structures – where the organization as a whole is made up of
work teams that work together to achieve the organization’s purpose.
Matrix Business Organizations – those which assign experts or
specialists belonging to different functional departments to work
together on one or more projects.

Project Business Structure – a business organizational form with a

flexible design, where employees continuously work on a projects
assigned to them.

Boundaryless Business Organization – design eliminates vertical,

horizontal, or external boundaries and is described to be flexible and
unstructured.

Virtual Business Organization – made up of a small group of full-time

workers and outside experts who’re hired on a temporary basis to work
on assigned projects.

Planning – is the first management function and a very essential

component of management. It is also a process that involves the setting
of the organization’s goal, establishing strategies for accomplishing
those goals, and developing plans of action or means that managers
intend to use to achieve organizational goals.

Goal-setting – identification of targets or desired ends that management

wants to reach.
Vision – a mental image of what the organization will be in the future,
as desired by the company management and employees.

Mission – basic purpose of an organization and range of their

operations.

Objectives – steps needed in order to attain desired ends.

IMPORTANCE OF PLANNING
 Provides direction to all of the organization’s human resources –
both managers as well as employees.
 Reduces uncertainty
 Minimizing of wastes will result if there is proper coordination of
activities due to planning.
 Establishing goals and standards during planning may be used for
controlling another necessary managerial function.

Goals – are the targets or desired ends that management wants to reach.

Plans - are the actions or means that administrators/managers intend to

use to achieve organizational goals.

TYPES OF PLANS
Comprehensive – refers to the completeness of planning coverage.
Specificity – refers to very detailed, clearly defined plans wherein
objectives are clearly stated and could easily be understood.

Frequency – refers to the number of times or instances a plan may be

used.

Strategic Plans – plans that establish the organization’s overall goals

and apply to the entire firm.

Organizational Plan – a comprehensive plan for entire organization

covering time frame, specific purpose, frequency of use, and others

Operational Plans – plans that apply to a particular unit area only.

Long-term Plans – plans that go beyond three years.

Short-term Plans – plans that cover one year or less.

Specific Plans – plans that are clearly stated and which have no room
for interpretation.

Directional Plans – plans that are flexible or give general guidelines

only.
Single-use Plans – used or stated once only as this applies to the entire
organization.

Standing Plans – ongoing; provide guidance for different activities

done repeatedly.

STEPS IN PLANNING
Schermerhorn (2008) – gave five steps in the planning process.
1. Define your goals/objectives by identifying desired
outcomes/results in very specific ways.
2. Determine where you stand in relation to set goals/objectives;
know your strengths and weaknesses.
3. Develop premises regarding future conditions.
4. Analyze and choose among action alternatives.
5. Implement the plan and evaluate results.

Top-level Management Planning (Strategic Planning) – starts with

defining the organization’s goals/objectives, the major targets related to
the maintenance of the organization’s stability, and its organizational
culture, values and growth improving its productivity, profitability,
effectiveness, and efficiency among others.

Middle-level Management Planning (Tactical Planning) – refers to a

set of procedures for changing or transforming broad strategic goals and
plans into specific goals and plans that are applicable and needed in one
unit/portion of the organization.
Operational Planning – is a lower-level management planning which
involves routine tasks repeatedly done by the firm’s lower-level units.

Bateman and Snell (2008) – stated that an effective strategy provides a

basis for answering five broad questions about how organizations will
meet its goals/objectives.

Schermerhorn (2008) – forecasting is an attempt to predict what may

happen in the future.
 Opinions of prominent economists are used in qualitative
forecasting.
 Mathematical calculations and statistical analyses of
surveys/researches are used in quantitative forecasting.
 Planning for future states of affairs is a long-term version of
contingency planning and is also known as scenario planning.

DEFINITION OF TERMS
Trigger Point – change in an attribute, condition, factor, parameter, or
value that represents crossing a threshold and actuates or initiates a
mechanism or reaction that may lead to a radically different state of
affairs.

Participatory Planning – process that includes the people who will be

affected by the plans and those who will be asked to implement them in
all planning steps.

Decision-making – is a process which begins with problem

identification and ends with the evaluation of implemented situations.
TYPES OF DECISIONS
Structured or Programmed Decision – decision that is repetitive and
can be handled using a routine approach.

Unstructured or nonprogrammed Decisions – applied to the

resolution of problems that are new or unusual, and for which
information is incomplete.

TYPES OF DECISION-MAKING CONDITIONS

Certainty Conditions – ideal conditions in deciding problems; these are
situations in which a manager can make precise decisions ‘coz the
results of all alternatives are known.

Risk/Uncertainty Conditions – a more common condition in deciding

problems. This conditions compel the decision maker to do estimates
regarding the possible occurrence of certain outcomes that may affect
his/her chosen solution to a problem.

Bateman and Snell (2008) – differentiation in organizations involves

division of labor and specialization.

Division of Labor – involves assigning different tasks to different

people in the organization’s different work units.
Integration – is another process in the organization’s internal
environment which involves the collaboration and coordination of its
different work units or work divisions.

Coordination – refers to the procedures that connect the work activities

of the different work divisions/units of the firm in order to achieve its
overall goal.

Organization Structure – is a system made up of tasks to be

accomplished, work movements from on work level to other work levels
in the system, reporting relationships, and communication passageways
that unite the work of different individual persons/groups.

Bateman and Snell (2008) – vertical structure clears out issues related
to authority right, responsibilities, and reporting relationships.

Authority Right – refers to the legitimate rights of individuals.

Horizontal Structure – refers to the departmentalization of an

organization into smaller work units as tasks become increasingly varied
and numerous.

TYPES OF DEPARTMENT
Line Departments – deal directly with the firm’s primary goods and
services; responsible for manufacturing, selling, and providing services
to clients.
Staff Departments – support the activities of the line departments by
doing research, attending to legal matters, performing public relations
duties, etc.

Functional Approach – subdivisions are formed based on specialized

activities such as marketing, production, financial management, and
human resources management.

Divisional Approach – formed based on management of their products,

customers, or geographic areas covered.

Matrix Approach – hybrid form of departmentalization.

Network Structure– is a collection of independent, usually single

function organizations/companies that work together in order to produce
a product/ service.

Bateman and Snell (2008) – Organizational design; Traditional and

Modern

Traditional – pertains to the usual or old-fashioned ways.

Modern – refers to contemporary or new design theories.

TRADITIONAL DESIGN THEORIES

Simple – has a few departments, wide span of control, or a big number
of subordinates directly reporting to a manager.

Weaknesses
- risk that overdependence with over-dependence on
a single person
- no longer appropriate as the company grows.

Strengths
- flexible
- fast decision-making and results
- clear accountability

Functional – design groups together similar or related specialties.

Strengths
- cost-saving advantages
- management is facilitated ‘coz workers with similar tasks are grouped
together.

Weaknesses
- managers have little knowledge of other units’ function.
Divisional – made up of separate business divisions or units, where the
parent corporation acts as overseer to coordinate and control the
different divisions and provide financial and legal support services.

Strength
- focused on results
- managers are responsible for what happens to their products and
services

Weaknesses
- possible duplication of activities and resources.
- increased cost and reduced efficiency.

DEFINITION OF TERMS
Organizational Design – manner in which a management achieves
the right combination of differentiation and integration of the
organization’s operations, in response to the level of uncertainty in its
external environment.

MODERN DESIGN THEORIES

Team Design – the entire organization is made up of work groups or
teams.

Strengths
- empowerment of team members and reduced barriers among functional
areas.

Weaknesses
- clear chain of command and great pressure on teams to perform.

Matrix-Project Design – refers to an organization design where

specialists from different departments work on projects that are
supervised by a project manager.

Strengths
- specialists are involved in the project

Weaknesses
-task and personality conflicts

Project Design – refers to an organizational design where employees

continuously work on a project.

Strengths
- flexible designs and fast decision-making

Weaknesses
- complexity of assigning people to projects and tasks personality
conflicts.

Boundary-less Design – design is not defined or limited by vertical,

horizontal, and external boundaries.

Strengths
- highly flexible and responsive

Weaknesses
- lack of control and problems in communication.

Delegation – refers to assigning a new or additional task to a

subordinate.

Authority – the right to act legally

Responsibility – the state of being answerable legally and morally for

the discharge of duty.

Accountability – is to be able to called to explain

STEPS IN DELEGATION
1. Defining the goal clearly
 2. Selecting the person who will be given the task
3. Assigning of responsibilities
4. Asking the person assigned about his/her planned approaches to
accomplish the task objectives
5. Granting the assigned person the authority to act
6. Giving the assigned person enough time and resources to do the
task, while at the same time emphasizing his/her accountability.
7. Check the task accomplishment progress
8. Making sure that the task objective has been achieved.

Formal Organization – formed by the company owner or manager to

help the firm accomplish its goals.

Functions of Formal
- Accomplish goals that require cooperation or collaboration
among formal groups in the organization.
- Produce or bring about new and creative ideas and solutions to
company problems.
- Coordinate interdepartmental activities.
- Implement company rules/regulations and policies
- Orient/train new employees

Informal Organization – exist ‘coz of friendship or common interest.

Informal Functions
1. Satisfy the members’ need for affiliation
2. Give the individual members a chance to develop their self-
esteem
3. Give individual members an opportunity to share their ideas
 4. Lessen individual member’s insecurities
5. Provide a mechanism to solve members’ personal and
interpersonal problems.

FORMAL
Strengths
- Working systematically
- Established on and for the organization’s objectives
- No duplication or overlapping of work
- Efficient coordination among departments.
- Implementation of chain of command and professional
relationship

Weaknesses
- Delay in feedback and action due to the established chain of
command
- Ignores the psychological and social needs of employees
- Emphasis on work only and overlooks the human relations,
talents, and creativity of employees

INFORMAL
Strengths
1. Fast communication due to the absence of standard operating
procedures and protocols
2. Gives important to psychological and social needs of employees
3. Top managers can solicit feedback directly from the employees
on new policies and plans
Weaknesses
1. More susceptible to rumour mongering
2. There’s no systematic workflow in place
3. Difficulty in implementing new rules and policies
4. More emphasis on the individual interest of each employee
rather than the overall goal of the company.