TESTMANSHIP

1.) PLANNING
-read, read, read (5mins)

2.) ELIMINATION
-2 panggulo
-2 identical

3.) SKIPPING

4.) CONTEXT CLUES

-rootwords
-keywords

5.) LONG ANSWER

6.) NEGATIVE & POSTIVE CHOICES

7.) POWER OF “C”

“Tests doesn’t define how you are as a student or as a person, if you

fail, that doesn’t mean you’re a failure”

BREAK A LEG!!! I DO BELIEVE IN YOU!!!

ORGANIZATION AND MANAGEMENT

PHILOSOPHY - Emilio Aguinaldo College is a private, nonsectarian, co-educational
institution of learning that fosters equal and fair opportunities of education, the
total development of our students, conscious of their national identity and their
role in the global community.
VISION - Emilio Aguinaldo College envisions itself as an internationally recognized
private non-sectarian academic institution rooted in the Filipino nationalist
tradition that consistently pursues the advancement and welfare of humanity.
MISSION - Emilio Aguinaldo College provides a learner-centered, inquiry-based,
and socially relevant academic community.
CORE VALUES -VIRTUE, EXCELLENCE, SERVICE

MODULE #1 : NATURE AND CONCEPT

LESSON 1: DEFINITION AND FUNCTIONS OF
MANAGEMENT
WHAT IS MANAGEMENT?
- It is both a Science and Art
- Management is the act of using manpower and other resources to accomplish
objectives. - Louise E. Boone
- Management is the attainment of organizational goals in an effective and efficient
way through the different functions of management.
Efficiency- doing things right
Effective- doing the right things
-Efficiency is the ability to maximize output with minimum input. It seeks to limit the wasted
input which is costly for a business. There is an element of SPEED since it requires things to be
done quickly.
-Effectiveness is the capacity to attain an intended objective or result. The intention is to meet the
desired goal regardless of the amount of input required. Careful analysis and critical thinking are
present.
-“Efficiency is doing things right and effectiveness is doing the right things” – Peter Drucker

FACTORS INFLUENCING MANAGEMENT

GLOBALIZATION - Phenomenon of growing interconnectivity and
interdependent relations between nations.
TECHNOLOGY - Advancement in technology improved business trends by
rendering business functions and related tasks easier to accomplish.
OUTSOURCING - “offshoring”
PSYCHOLOGY - It focuses on developing management skills and analyzing
customer satisfaction.
ECOSYSTEM - It consists of group of firms that provide related products and
services.
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY
- Ensure minimal negative impact on the social, cultural, and economic aspects of
the community.

5 FUNCTIONS OF MANAGEMENT
PLANNING - Systematic thinking about ways and means of accomplishing pre-
determined goals. It is necessary to ensure proper utilization of all resources.
ORGANIZING - Process of bringing together the physical, financial, manpower,
and other resources in developing and achieving the organizational goals.
STAFFING - The process of acquiring and developing manpower in achieving the
goals and objectives of the organization.
LEADING - The process of providing instructions and guidance to manpower
while monitoring their performance.
CONTROLLING - It requires managers to identify any deviation from strategies
and methods and implement corrective actions to maintain and improve
performance.

LESSON 2: MANAGEMENT THEORIES

Scientific Management Theory
• Application of scientific methods and principles to increase efficiency
• Labor in the production process (labor efficiency)
• Analyzing the work process will enable the manager to identify the best way of doing things.
FOUR PRINCIPLES OF SCIENTIFIC MANAGEMENT
Engr. Frederick Winslow Taylor “Father of Scientific Management
1. Replace rule-of-thumb methods with those that are scientifically prove
2. Select, train, and develop each worker based on scientific methods.
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.

ADMINISTRATIVE THEORY – Henry Fayol

• Overall management of the organization
• Emphasis on the role of managers as administrators
• Five functions of management: planning, organizing, coordinating, communicating, and
controlling.

HUMAN RELATIONS THEORY

Dr. Elton Mayo “Father of Human Relations Movement”
• Social element in the workplace
• Considers the influence of interpersonal relationships, social conditioning, and group norms
• Behavioral approach (peoplecentered)

QUANTITATIVE MANAGEMENT THEORY uses approaches such as

statistical analyses and computer simulation to arrive at a management decision.
MANAGEMENT SCIENCE uses mathematics in problem-solving and decision-
making.
MANAGEMENT INFORMATION SYSTEM gathers past, present, and
projected data from external and internal sources and transforms them into usable
information that managers may use.
SYSTEMS THEORY explains how interrelated parts operate together to achieve
a common purpose.
THE 4 ELEMENTS OF ORGANIZATION
1. Input (materials and human resources)
2. Transformation Processes (Technology/Managerial operations)
3. Outputs (products/services)
4. Feedbacks (reactions from the environment)

Fred Fiedler’s Contingency Theory universal theories cannot be applied to

organizations because each organization has unique characteristics and is
confronted by various challenges.
(elimination of a one-size-fits-all approach in management)

William Deming’s Quality Management Theory emphasizes consistency in an

organization and minimal to no errors or defects in production.
(EFFECTIVENESS OVER EFFICIENCY) This ensures quality products and
services that result in high customer satisfaction and increased revenue. TQM
(Total Quality Management)

LESSON 3: FUNCTIONS, ROLES AND SKILLS OF A

MANAGER
DIFFERENT TYPES OF MANAGER
PROBLEM-SOLVING MANAGER
The P-S Manager focuses on providing solutions to every problem of the company.
It also concentrates on achieving the company’s goals. However, it sometimes
tends to overdo the task of solving every problem which affects his or her overall
performance.
PITCHFORK MANAGER
The PF manager threatens employees to work towards a goal. He employs fear
tactics and uses an “iron hand” to push employees for results to avoid
consequences. He is characterized as tough or rude.
PONTIFICATING MANAGER
The PT 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
ability to make people feel at ease when he or she is around.
PRESUMPTUOUS MANAGER
The PS Manager thinks only of himself. He is not a team player and usually works
for personal gain or interest. He is characterized as being too productive and
overconfident and has the tendency to compete with the members of the team.
PERFECT MANAGER
The Perfect Manager is open to change and personal growth. However, he can be
very mechanical and may lack the interpersonal skills to interact more closely with
his team members.
PASSIVE MANAGER
The Passive Manager wants to please everyone and make the team members
happy. However, being a crowd pleaser became a hindrance because of his lack of
drive and assertiveness to manage the team.
PROACTIVE MANAGER
The proactive manager possesses the good qualities of the other types of managers.
He 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 of the perfect manager
for continued growth, and the desire of the passive manager to serve.

MAIN MANAGEMENT FUNCTION

-PLANNING
-ORGANIZING
-LEADING
-CONTROLLING
LEVELS OF MANAGEMENT
TOP-LEVEL MANAGEMENT
It is called “senior management” or “upper management”. They are responsible for
determining and implementing strategic, long-term decisions for the company.
MIDDLE-LEVEL MANAGEMENT
It is assigned to supervise specific units or departments within the company, and is
highly-specialized in managing the tasks and operations of their assigned units.
LOWER-LEVEL MANAGEMENT
called “frontline managers” or “supervisors”. These managers usually directly
oversee employees or workers and are tasked with carrying out the decisions
communicated by middle managers.

ROLES OF A MANAGER
INTERPERSONAL MANAGEMENT ROLES
• Figurehead – performs social, inspiration, legal, and ceremonial duties.
• Leader – heart of the managersubordinate relationship and managerial power. The
leader is a pervasive presence among subordinates.
• Liaison – manager is an information and communication center. It builds and
maintains relationships with other companies.
INFORMATIONAL MANAGEMENT ROLES
• Monitor – manager seeks and receives information from various sources to
evaluate the organization’s performance, well-being, and situation.
• Disseminator – manager communicates external information to the organization
and facilitates information exchange between subordinates.
• Spokesperson – manager relays information to other groups and entities outside
of the company.
DECISIONAL MANAGEMENT ROLES
• Entrepreneur – manager designs and initiates new opportunities for the company.
• Disturbance Handler – involved in stepping in to deal with matters, evaluate the
situation, reallocate resources, and provide adequate support to the company.
• Resource Allocator – manager oversees and controls resource allocation by
evaluating major decisions involving resources.
• Negotiator – manager takes charge of communicating and negotiating with other
organizations, and even among the members of the company

SKILLS NEEDED TO BE A MANAGER

TECHNICAL SKILLS - specific competencies that a manager should have in
relation to the type of task assigned to him or her.
HUMAN SKILLS - manager’s capacity to motivate, lead, and control the
behavior of his or her subordinates.
CONCEPTUAL SKILLS - manager’s ability to analyze a particular situation,
identify new opportunities and resources, and decide on the best strategies and
courses of action.

MODULE #2 : THE FIRM AND ITS ENVIRONMENT

2.1 - Environmental Scanning: The Local and International Business Environments

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 internal and external environment.

The internal environment consists of elements that have a direct impact on the
business operations.
The external environment consists of factors that have indirect but significant
influence on the operations of the business. These factors cannot be controlled by
the firm. There are two types of external environment:
1. MICROENVIRONMENT – known as the “operating environment.” The factors
in this environment have a direct relevance to the business operations but are
uncontrollable to a certain extent.
2. MACROENVIRONMENT – known as the “general environment.” The factors
in this are beyond the control of the firm but are important determinants of success.
ENVIRONMENTAL SCANNING
Environmental Scanning Environmental scanning is the actual monitoring and
evaluation of information from the external and internal environment of a business
organization. It is the process of gathering information about events and their
relationships within an organization’s internal and external environments.

There are three modes of environmental scanning as follows:

1. Ad hoc environmental scanning – not often done and is usually applicable only
during a crisis situation.
2. Regular scanning – usually done at least once a year or at regular intervals.
3. Continuous scanning – continuous collection of data on a broad range of
environmental factors.

SWOT ANALYSIS
Strengths – include company’s attributes that give a competitive edge over others.
Weaknesses – attributes of a company that need to be improved or changed.
Opportunities – factors or events that can give a positive impact to the company if
properly addressed.
Threats – external factors which may negatively impact the company.

PEST ANALYSIS
• Political factors – include laws, regulations, and restrictions that may intervene or
affect the company’s business course. Significant political factors include tax
policies, labor laws, environmental laws, trade restrictions, and tariffs.
• Economic factors – directly affect the capability of business to generate profits.
These include economic growth, interest rates, exchange rates, and inflation rate.
• Social factors – include demographic aspect such as age, group affiliation,
religion, civil status, and the economic status of consumers.
• Technological factors – include research and development activities, automation,
licensing, patenting, technological shifts, and outsourcing decisions.
PEST analysis can guide managers to identify the reasons why their business is
growing or failing within a certain environment.

2.2 - The Business Organization The Ethical Environment of the Firm

THE ROLE OF BUSINESS IN THE ECONOMY
No economy can survive without a thriving business sector. It fuels the economy of
a country since business organizations engage in transactions that maintain a
smooth flow of trade relations among producers, service providers, and
households. These various business transactions include manufacturing,
distribution, delivery, and selling of products as well as providing different kinds of
services to the consumers. These transactions stimulate the movement of money
and resources in and out of the country resulting in overall economic growth.

THE BUSINESS ORGANIZATION

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 following:
• Size and nature of the business
• Level of control
• Expected profit
• Tax implications
• Vulnerability to lawsuits
These considerations will determine the type of business organization that a
company will be shaped into.

3 FORMS OF BUSINESS ORGANIZATION

1. Sole Proprietorship – companies owned by one person who is usually hands-on
in managing the day-to-day activities. Sole proprietors own the entire business,
including all assets (owned and controlled by the business owners) and profits.
They are also responsible for all the liabilities (debts or obligations) of the
business.
2. Partnership – 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.
• General partnership – partners have unlimited liability for the debts and
obligations of the partnership.
• Limited partnership – 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.
3. 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. It can enter into contracts, secure loans, sue and
be sued, hire employees, and pay taxes. Shareholders – owners of a corporation.
They can be a minimum of five and a maximum of fifteen owners. They elect
board of directors who oversee the major policies and decisions of the corporation.

2 TYPES OF CORPORATION
Stock Corporation – has capital stock divided into shares and dividends. Surplus
profits are given to shareholders depending on the number of shares held.
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.

CLASSIFICATION OF BUSINESS
1. Service business – type of business that provides labor and other services to
customers.
2. Merchandising business – type of business that purchases products form other
businesses like manufacturers and sells them to customer at higher retail price.
3. Manufacturing business – type of business where raw materials are
transformed into finished goods through product-processing, labor, and other
manufacturing processes.

The Ethical Environment of the Firm Business Ethics and Management

Ethical issues – refers to a concern on which an individual must decide based on
several alternatives of what is morally right or wrong.
Business Ethics – moral principles and standards that guide business people in
their transactions. It sets the moral standards for any kind of business function.

PERSPECTIVE ON ETHICS
1. Universalism – states that all people should have certain values like honesty,
respect, and cooperation. It requires every person to reenact these values in the
same way under all circumstances and at all times.
2. Egoism – promotes the greatest good to oneself. It is focused on the perspective
that people ultimately act for self-advancement, no matter how good their
intentions are. Based on this view, it is permissible for a person to cooperate with
others as long as this will service his or her own interest.
3. Utilitarianism – focuses on the greatest good for the greatest number of people.
The ultimate concern of managers is to make decisions that are beneficial to the
greatest number of people.
4. Relativism – ethical behavior is based on a person’s own and other relevant
people’s opinions and viewpoints. It acknowledges that there are different
standards for each culture. Therefore, business transactions may proceed
differently from one culture to another.
5. Virtue ethics – morality depends on the maturity of a person with good moral
character. Based on society’s moral standards, a moral person can interpret these as
the application of personal virtues like faith, honesty, and others. Thus, what is
right is based on the level of one’s moral judgment.

CORPORATE INTEGRITY
It refers to the sense of “wholeness” created by the right relationships among the
members of the corporation. It has five dimensions: cultural, interpersonal,
organizational, social, and natural.
Cultural dimension – has the most impact on the internal relationships in the
company.
Interpersonal dimension – focuses on the relationships among people.
Organizational dimension – considers the main purpose of the business,
particularly the economic and financial purposes, managerial purpose, and civic
purpose.
Social dimension – views the organization as actively engaging with society.
Natural dimension – looks into how the organizations relates to nature.
MODULE #3 : PLANNING
PLANNING
-SETTING THE DIRECTION AND GOALS OF THE FIRM
-CONTINUOUS PROCESS
-INTELLECTUAL EXERCISE = DECISION MAKING

VISION STATEMENT - describes what the company wants to achieve and where
it wants to go in the future.
MISSION STATEMENT - describes a company’s reason for its existence
GOALS - attained after a long period
OBJECTIVES - shorter period and measurable outputs

THE PLANNING PROCESS

-FORMULATE THE GOALS AND OBJECTIVES
-IDENTIFY THE COURSE OF ACTION
-ASSIGN RESPONSIBILITIES
-DOCUMENT THE PLAN AND DISTRIBUTE TO PEOPLE CONCERNED
-REVIEW THE PLAN AND ADJUST ACCORDINGLY

TYPES OF PLANS
TACTICAL PLANS
- Create specific plans for specific areas of the company
- Translate broader plans into functional goals for each area or department.
- These includes budget, resources and goals with specific deadlines
OPERATIONAL PLANS
- Specific procedures and processes made by frontline or low-level managers.
- It involves specific events such as marketing campaigns, campus recruitment,
formulation of ongoing plans that define specific operations of the organization
Ongoing plans can be:
a. Policy- set of principles that guide managers in addressing a particular issue
b. Rule- regulation which describes and regulates the functions of organization
c. Procedure- step-by-step process in accomplishing a task or achieving an
objective
STRATEGIC PLANS
- Designed by the top management as the CEO or President.
- Usually broad plans based on the company’s vision, mission and values and
address the company as a whole.
- 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
Contingency Planning
It is a special plan created for unexpected scenarios or changes.
Common types:
1. Crisis management plan- made in preparation for any kind of crisis such as
industrial disasters like fire or natural disasters .
2. Scenario planning- company’s formulate plans for both positive and negative
scenarios that may arise from the implementation of plans.

PLANNING TECHNIQUES AND TOOLS

1. Brainstorming - stimulates thinking and allows the group to work together in
generating ideas.
2. Nominal Group Technique - a highly structured method that allows members
to give their own inputs based on an agenda.
3. Delphi Technique - A highly structured method that is somehow similar with
the nominal group technique. However, the difference lies in the means of
formulating courses of action.

Rational or Logical Model

• This process involves a logical step-by-step analysis of several possible
contributing factors in making the decision
Intuitive Decision Model
• Managers do not use objective methods in decision making but instead use their
“gut feeling” and instincts.
• Best suited for managers with several years of experience because they rely on
their experiences and knowledge gained from previously encountered scenarios.
• Managers try to identify similarities between situations they are currently facing
and those they have previously addressed.
• Has high rate of success of success.
• The reliance on feelings and instincts often does not lead to the most ideal
decisions.
Predisposed Decision Model
• The manager, once he or she decides on a solution, will no longer look for other
alternative solutions.
• The chosen solution is considered as the most acceptable and effective solution
and the managers will gather resources to implement the decision.
• It is the weakest decision model since the manager makes a unilateral, snap
decision.

MODULE #4 : ORGANIZING
NATURE OF ORGANIZATIONS
Organization - social group that is oriented toward a purpose.
• 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.
• As a management function: it entails the structuring and grouping of jobs and
ensuring these are performed by qualified and competent personnel.
• Hierarchy - clarifies the line of authority of top-level, middle- level and low-level
management and avoids confusion among employees as to who their immediate
superiors are.

THE ORGANIZING PROCESS

-IDENTIFICATION OF ACTIVITIES
-DEPARTMENTALIZATION
-DEFINITION OF AUTHORITY
-INTEGRATION OF AUTHORITY
ORGANIZATIONAL DESIGN AND STRUCTURES
Organizational Design - identifies the essential tasks and operation of the
company, establishes effective work relationships and divides the company into
departments that will contribute toward achieving its goals and objectives.
Organizational Structure - framework shows how each component of the
company relates to each other.
Configurations and Elements of Organizational Structure Can be configured or
arranged in two ways:
Mechanistic structure - rigid and tightly controlled structure
Organic structure - more flexible and highly adaptable

ELEMENTS OF ORGANIZATIONAL STRUCTURES

1. Work specialization - refers to the way jobs are divided into steps or individual tasks.
2. Departmentalization - refers to the grouping of similar functions, jobs and tasks into
departments.
a. Functional - personnel and tasks related to a single company operation are grouped
together.
b. Divisional - groups personnel and resources based on product service, process,
geographic location or customer.
3. Chain of command - indicates the communication and work relationship between
employees and managers.
a. Authority - right inherent to managerial position to give directions or tell people what
to do and expect them to undertake it.
b. Responsibility - obligation to perform duties assigned an employee.
c. Unity of command - requires the employees to only report to one superior.
4. Span of control - refers the number of employees a manager can effectively and
efficiently manage.
5. Degree of centralization - refers to the extent authority and decision making is given
to a small group of people in the organization.
a. Centralization - occurs when major decisions are made by top management and
decisions and actions of lower management and employees must have approval from the
top.
b. Decentralization - occurs when the lower management is allowed to make important
decisions.
6. Formalization - the process of standardizing jobs and establishing rules and guidelines
that guide employees.
SIMPLE ORGANIZATIONAL STRUCTURE
Most basic structure and applicable to small businesses where majority of the
power and decision-making rests on the owner.
FUNCTIONAL ORGANIZATIONAL STRUCTURE
• It organizes a company by grouping together similar functions into departments.
• Vertical Hierarchy - employees follow a chain of command and top managers
delegate tasks to lower-level managers and employees.
DIVISIONAL GROUPING
• It organizes a company into divisions that corresponds to certain products or
services
Geographical Division Organizational Structure
• A single executive division may preside over manufacturing, sales and service
divisions located all over the world.
PRODUCT DIVISION ORGANIZATIONAL STRUCTURE
• Each division contains all the necessary resources and functions within it to
support that product line or geography (for example, its own finance, IT, and
marketing departments).
MATRIX ORGANIZATIONAL STRUCTURE
• Combines features of functional and divisional structures.
Team-based Organizational Structure
• It organizes employees into teams whose members perform varied functions.

ORGANIZATION THEORIES
BUREAUCRACY
• Max Weber (1800’s)
• Management approach is formal rigid structure and legitimate authority in
organizations.
• Relationship is free from personal interests.
• Law and regulations are set for everyone 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.
• Highly applicable to the military, police, hospitals and other organizations.
CONTINGENCY THEORY
• There is no single best way of managing an organization. (“No one-size-fits-all
approach)
• Situational differences are given consideration and different management
principles are applied depending on task, size of firm and nature of environment.
• Recognizes manager’s crucial role in the company’s organizational environment
and the importance of adaptability in dealing with business situations.
• Highly recommendable in today’s world.
SYSTEMS THEORY
• Karl Ludwig von Bertalanffy and Kenneth Boulding (1950’s)
• Emphasizes that a system is a collection of parts that are coordinated in
accomplishing particular goal.
• Gives the company a general perspective if the internal and external
environments where it operates as an integrated whole.
• Managers is necessarily complex but implementing a system removes some of
the complexities of management because it enables manager to integrate essential
tasks into a unified whole.
• Excellent customer service remains the same.
SCIENTIFIC MANAGEMENT
• Frederick Taylor

• Focuses on optimizing individual tasks and labor processes to improve efficiency

and productivity.
• Analysis of jobs is by identifying and evaluating specific tasks from unproductive
ones.
• Allows managers to distinguish essential tasks from unproductive ones.
• Careful selection of employees who are suited for particular jobs.
• Application of this theory is in hiring employees and supervising their training
and development.
DELEGATION
-Allocation of tasks to employees.
-Exercise a certain level of authority
-Involves mutual trust
-Enables managers to unload some of their tasks
-Responsibility of the employee to finish
Three (3) Elements:
• Duty - expressed in the functions and objectives of the organization. Duties
should be clear so that overlapping of duties and authority between employee and
management is avoided.
• Authority - should be clearly defined. Should emanate from the official position
of the manager and not from personal influence or other informal sources of power.
Managers can only act within the limit of their official function. Nature and
limitations of the manager’s authority should be expressed in writing and approved
by top management.
• Obligation - express the willingness to accept the responsibilities. Responsible
subordinates know their obligations clearly and will exert efforts in accomplishing
their tasks. Managers should recognize that the subordinates have limits with
regard to their responsibilities. The tasks should be relevant to their regular work or
skills.

EMPOWERMENT
• The act of making employees accountable for their own actions.
• Requires the managers to trust that their subordinates have the ability to enact
decisions and perform the task assigned to them.
• Getting the best out of employees and utilizing their full potential.

FORMAL ORGANIZATIONS
• The structure rest on authority and responsibility.
• The levels of power of management and scope of responsibilities of subordinates are clearly
indicated. • Salaries and benefits are identified based on their positions in the organization.
• Bound by rules and policies.
• Not easy to bring changes to the hierarchy in the organizational structure since it is based on the
vision, mission and goals of the company.
• Conflict may arise due to miscommunication regarding the implementation of rules and
policies, abuse of authority and poor performance of employees.
• Clearly outlines the tasks ad responsibilities of the employees. Informal Organizations
• Defined by the personal relationships established among employees.
• Interaction of employees is based on friendship and camaraderie.
• Relationship can be dissolved at any time.
• Not bound by authority and responsibility.
• Not conducive to policies and may oppose regulations and changes.
MODULE #5 : ENTREPRENEURSHIP
ENTREPRENEUR
• An individual who establishes a business for the purpose of achieving a profit.
• He or she identifies opportunities and acquires and organizes the resources
needed for such business.
• most entrepreneurs start small. Successful entrepreneurs can easily spot a
business opportunity and capitalize on that opportunity to gain maximum profit.
• Entrepreneurs nowadays come up with innovative ideas and approaches in
business, often redefining traditional ways of doing business.
CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR
1. Initiative - willingness to utilize their resources to the fullest and the creativity
to come up with innovative products or strategies. They are confident and take
risks on order to achieve their goals. They are optimistic about their business in the
face of difficulties.
2. Self-reliant - have clear idea of what they want to do and goals they wish to
achieve, they are competitive and take responsibility in ensuring the success of the
business. They do not give up easily and keep on trying.
3. Dream big and know how to transform their dreams into reality - gaining
profit is not the only reason that motivates entrepreneurs to engage in business.
Their primary motivation is to accomplish and do something worthwhile and
increase their self-esteem.

THE TYPE OF BUSINESS ACCORDING TO SIZE AND

GROWTH POTENTIAL
1. Gazelles - small businesses with high rate of success and profitability and once
this business prosper they can provide employment and contribute to the economy.
Example: Silicon Valley
2. Microbusinesses - operate on a smaller scale and have limited profits. Example:
service shops, repair shops and sari-sari stores
3. Small and Medium enterprises - have 50-250 employees, and total assets
worth between 500,000 to 20 million pesos. Have a potential to contribute to
further economic growth and employment.
THE FAMILY BUSINESS ENTERPRISE
• The family business is a popular form of enterprise in the Philippine business
landscape and has the most success among all business organizations.
• Family businesses - often employ a very traditional method of management
where family members occupy key positions in the organization and then pass
them to other family members upon retirement.
• Professors Renato Taguiri and John Davis conceptualized the three-circle model
of family business. This model continues to be the central organizing framework
for understanding family business systems worldwide.
• Taguiri and Davis Model of Family Business
Family members - most significant members of the organization and considered to
be the most dedicated and loyal members of the organization.
Ownership group - incorporates investors and owner who are not part of the family.
Business group - composed of employees who are neither owners nor family
members

CHARACTERISTICS OF A FAMILY-OWNED BUSINESS

1. Owners consider the business as legacy that will be passed on the next
generation
2. Consider long-term perspective with regard to the performance of the business
3. Aim to maintain and improve the performance of the business and allow the next
generation to “reap and re-sow” the fruits of the company’s success
4. Viewed not merely as an organization but an extension of the family where each
member is given great importance.
5. Possess more warmer and personal environment
6. Tend to have more family-oriented corporate culture and values

LIMITATIONS OF THE FAMILY BUSINESS

1. Tendency of its members to be overly familiar with each other
2. Abandon formality of an organization structure which entails authority and
responsibility
3. Give possible conflicts between family members
4. Successors may not possess the kind of leadership that the original owners had
5. Nepotism is rampant
6. Relatives of family members are hired not on basis of their qualifications but
because of relationship
THE ROLE OF SMALL BUSINESSES IN THE ECONOMY
1. Serve as backbone in the economy.
2. Provide job opportunities for a lot of Filipinos.
3. Play a crucial role in the operations of large businesses and corporations.

THE BUSINESS PLAN

In today's business environment, an entrepreneur has an edge if he or she engages
in careful planning and analysis of the environment and prevalent economic factors
before deciding to establish a business. Even a small business needs a simple
business plan.
• Business plan - a document that outlines the business goals of an enterprise,
explains the viability of the business, and describers the strategies that will be used
to implement the plan.
• It guides entrepreneurs in defining the nature of the business opportunity and
outlines the approaches in taking advantage of that opportunity.

PARTS OF BUSINESS PLAN

EXECUTIVE SUMMARY – summary of the contents of the business plan
BUSINESS DESCRIPTION - Brief description of your company including the
nature of your business and factors that will make your business a success.
MARKET (INDUSTRY) ANALYSIS - Use this section to summarize your
understanding of the economy, industry, your target market and related trends and
developments.
STRATEGIC PLAN - Provides the vision, mission, goals and objectives of the
business.
PRODUCT AND SERVICE OFFERED -describe to readers what you are selling
and how the product or service will benefit current and potential customers.
OPERATIONAL PLAN – human resources, facilities, and technology
infrastructure needs outline
MANAGEMENT PLAN – details about ownership of the company, management,
and board of directors (if applicable)

MARKETING PLAN - Describe the marketing strategy and how you intend to
drive sales. Include market penetration strategy, growth strategy, distribution
strategy and communication strategy (marketing mix)
FINANCIAL PLAN - Explains or projects how the company is expected to
perform financially over the next several years.

THINGS TO REMEMBER IN MAKING YOUR BUSINESS

PLAN
1. Research - gather vital information that will help determine the business
structure, marketing strategies and financing.
2. Determine for whom the plan is - determine the people who will read the
business plan and figure out their interests.
3. Make a schedule - come up with a realistic work schedule.
4. Differentiate between actual and expected figures - use expected figures and
estimates in making the financial analysis and show clearly which values are actual
figures and which are estimated figures.
5. Write the summary last - must be brief but comprehensive
6. Review the work - make sure it is free from factual, spelling and grammatical
errors.

OFFICIAL REQUIREMENTS IN STARTING A BUSINESS

For Sole-Proprietorship:
• Must apply for a business name and be registered with DTI For Partnership:
• With a capital of 3,000 pesos or ore- must register with the Securities and
Exchange Commission (SEC)
For Corporation:
• Should register with the SEC and must have at least 5 to 15 incorporators who
have at least one share in the company stock.
• Minimum capital is 5,000 pesos.
• If 60% of the company is owned by Filipinos and 40% is foreign owned, it is
considered as Filipino corporation.
• If more than 40% is foreign owned, it is considered as a domestic foreign-owned
corporation.
BASIC BUSINESS PERMIT
1. Barangay clearance - certifies that the business comply with the requirements
of barangay where the business located
2. DTI business name registration certificate - give owners’ power to use the
registered business trade name for their business operations. It also protects the
business name from being used by other business establishments.
3. SEC certificate of registration - to be considered as legal entities. Also used as
requirement for registering with the BIR, mayor’s office and other government
offices.
4. Mayor’s business permit - requirement for the issuance of a BIR certificate of
registration
5. BIR certificate of registration - proof of compliance with Philippine tax
requirements. This also gives the business authority to print its official receipts and
invoices and register its books of accounts.
6. SSS employer’s registration - to ensure both the employees and companies
contribute to SSS and are able to avail the benefits of social security.
7. PhilHealth employer’s registration - to enable them to provide social health
insurance coverage to their employees
8. SEC certificate of registration - to be considered as legal entities. Also used as
requirement for registering with the BIR, mayor’s office and other government
offices.
9. Pag-IBIG employer’s registration - to secure their Pag-IBIG employer ID
number and provide benefits to their employees.
10. DOLE registration - for monitoring their compliance with labor regulations.