ORGANIZATIONAL

MANAGEMENT
Prepared by: Prof. Christian Andre M. Viril
How To Complete The Module:

1. Attend online classes to be conducted via Google Meet. 2. Submit

activities & assignments to be uploaded via Google Classroom. 3. Active

participation during class discussions.

Teaching Strategies:

1. Video Conferencing

2. MS Word / Powerpoint Presentation

3. Video Presentation
MODULE 1

Course Learning Objectives:

1. Discuss the nature & scope of private organizations.

2. Explain the management functions, theories & principles.

Intended Learning Objective:

At the end of this chapter, students have learned fundamental management concepts at a

higher degree of complexity.

What is Business?

• It is a general term, which includes all profit-seeking activities of enterprises that

provide goods & services, necessary to an economic system.

• In the hope of making profits, businesses produce and market goods & services. • In

satisfying customer’s needs & wants, the firm will generate sales revenues which

makes profit possible.

Organization & Management Concepts

• Business firms are organizations established to achieve certain objectives. • Theory &

practice indicate that for modern businesses to succeed, effective applications of sound

organization & management practices must be observed.

• It follows, then, that knowledge of organization & management theories must be first

acquired.

What is Management?

• It is the systematic process of planning, organizing, staffing, directing and controlling

activities in an organization to achieve certain objectives.

The Management Principles

 There are various management principles applicable to managing a business enterprise:

1. Division of Labor – breaking a job down into specialized tasks to increase productivity.

2. Authority – the right given to a person in position to give orders plus the power to

extract obedience.

3. Discipline – provides uniform application of behavior to certain activities the outcome of

which is readily predicted.

4. Unity of Command – this means that each employee must have only one supervisor. 5.

Unity of Direction – this means that the efforts of everyone in the organization must be

coordinated and focused in the same direction.

6. Subordination of the Individual Interest to the General Interest – refers to the goals of

the organization that should take precedence over individual goals.

7. Remuneration – employees should be paid fairly in accordance with their contribution

to the organizational effort.

8. Centralization – power & authority must be centralized as much as possible. 9.

Scalar Chain – subordinates should observe the official chain of command unless

authorized by their respective superiors to communicate with each other.

10. Order – this means that human & non-human resources should be in their proper

places.

11. Equity – the result of kindness & justice and is a principle that guide management

employee relations.

12. Stability of Tenure – high employee turnover is counter-productive; to motivate

 employees to stay with the company, effective manpower planning & implementation

are necessary.

13. Initiative – management should encourage employees to act on their own volition when

confronted with an opportunity to solve a problem.

14. Esprit de Corps – managers should emphasize teamwork by building harmony and a

sense of unity among employees.

What is an Organization?

• Organizations deeply affect our lives that we seem not able to survive without them. •

When we send our children to school, we reckon with the organization running it. •

Organizations are responsible for providing us with ready meals at convenient locations. •

Charitable organizations provide assistance to the poor & the sick.

• Local governments are organizations that run the political affairs of provinces &

municipalities.
 Organization Defined

An organization is an entity comprising a group of people, established to accomplish certain

goals.

The Function of Organization

There are certain objectives that the individual will find hard, if not impossible, to achieve. The

mass production of cars, for instance, will be nearly impossible for a single person to undertake.

Even if the job is performed by many persons acting independently, the manufacture of cars will

be a very difficult activity. The variety of specialized tasks alone will overwhelm the individual

worker if he is required to do all of them.

Common Characteristics of Organizations

• Coordination of Effort – When properly directed, persons working in coordination with

 others will produce better outputs than when they work independently.

• Common Goal or Purpose – In order to make the employees work with proper direction,

they must be provided with a common goal or purpose.

• Division of Labor – When the total job is divided into manageable parts, workers will be

more familiar with their assignments making them more proficient.

• Hierarchy of Authority – When individuals work collectively, someone must be provided

with authority to ensure that the assigned goals are achieved in the desired manner.

ACTIVITY QUESTIONS:
1. Why are businesses so important not only to individuals & families but to the nation’s

economy as well?

2. What is meant by “business”?

3. What is meant by “profit”?

4. What is meant by the term “management”?

5. Give at least 3 management principles and discuss briefly.

6. Differentiate unity of command vs unity of direction.

7. What is an organization?

8. What are the 2 types of organizations?

9. What are the common characteristics of organizations?

10. Why are organizations important?

MODULE 2

Course Learning Objective:

Identify areas of concern under ethical standards.

Intended Learning Objective:

At the end of this chapter, students have understood the various interest groups involved in

activities related to social responsibility.

What is Business Ethics?

• Ethics refers to the study of morals & moral choices of human beings. • The behavior of

individuals & groups that are governed by standards, rules & codes of conduct consist of

the subjects covered by ethics.

• The moral principles defining the right & wrong behavior of business persons and their

agents are called business ethics.

The Need for Ethical Behavior

People in highly-developed economies were the first to experience and be aware of

unethical behavior of business firms. Many of them pushed for changes in the way business

persons pursue their trade. Some of their ideas found their way in the legislative bodies that

later accommodated them by passing laws in support of their agenda on business ethics.
As many less-developed countries like the Philippines look up to the highly-developed ones as

some sort of model, the concern about business ethics will be replicated. Proponents of

business ethics abroad became important sources of patterns of conduct for local concerned

residents.

Ethical behavior is needed to make the “playing field” free and orderly. If the business person

does not adhere to ethical principles, public opinion may pressure the government to act. It

may turn out later that the said person will be in a worse situation than when no law is

passed to force him to act ethically.

Areas of Concern for Business Ethics

Business Ethics covers all areas encompassed by business transactions. The ethical

conduct of business persons may be measured against how the following are adhered to:

1. laws & regulations promulgated by the government;

2. specific ethical conduct not yet passed into law

A list of concerns relating to laws & regulations requiring ethical behavior is provided as

follows:

1. product safety & quality

2. fair employment practices

3. fair marketing & selling practices

4. the use of confidential information for personal gain

5. community involvement

6. bribery

7. illegal payments to foreign governments to obtain businesses

Coverage of Company-Sponsored Ethics Program

A very important listing of problem areas which may be used as basis for formulating

company policies on ethical conduct is as follows:

1. drug & alcohol abuse

2. employee theft

3. conflicts of interest

4. quality control

5. misuse of proprietary information

6. abuse of expense accounts

7. plant closings & layoffs

8. misuse of company assets

9. environmental pollution

10. methods of gathering competitor’s information

11. inaccuracy of books & records

12. receiving excessive gifts & entertainment

13. false or misleading advertising

Ethical Codes

• Code of Ethics are documents that specify practices which are unethical and that the

company expressly forbids.

• A Code of Ethics is a formal document that provides a clear direction to management &

employees in the performance of their duties.

What is Social Responsibility?

• Social Responsibility refers to the concern of business for the welfare of the society. •

This definition indicates that the firm must perform its function without harming the

community; instead, it must improve the quality of life.

• It must produce goods or services that will not adversely affect any component of the

society.

• It can earn profits but not to the detriment of society.

 Interested Groups

• There are various groups with interests that are different from one another. • These

interests must be properly considered by the business firm if it will have to be

successful.

Benefits & Costs of Social Actions

Benefits:
Companies that are socially-responsible reap benefits which may be direct or indirect.

Among these are as follows:

1. improved employee satisfaction & motivation

2. company becomes more aware of changing consumer tastes & preferences 3.

greater demand for the company’s products or services

4. preference by investors to buy the firm’s stocks

5. elimination of possible legislative controls on business activities

ACTIVITY QUESTIONS:
1. How important is ethics and social responsibility to business?

2. How may an ethical issue become a law?

3. What are the concerns that relate to law and regulations and which require ethical behavior?

4. Cite a news item involving a violation of good ethical conduct. Discuss why this is so. 5. What

problem areas may be covered by a company sponsored ethics program? 6. What is a Code of

Ethics?

7. What groups must the management reckon with in pursuing the firm’s daily activities?

8. What benefits accrue to the socially responsible firm? What costs are involved?

MODULE 3

Course Learning Objective:

Review the 3 major & minor types of business ownership; cooperatives and identify their types.

Intended Learning Objective:

At the end of this chapter, students are expected to identify the types of business ownership &

cooperatives.

Forms of Business Ownership:

• There are three major types of business ownership: sole proprietorship, partnership &

corporation.

• The minor types consist of the joint stock company, joint venture & business trust.

Sole Proprietorship:

• Sole Proprietorship is a type of business entity owned & operated by a single person. •

The big percentage of businesses owned by sole proprietorships indicate the popularity of

this ownership type.

Advantages:

Sole Proprietorships are afforded with advantages pertaining to the following:

1. ease & cost of formation

2. secrecy

3. distribution & use of profits

4. control of the business

5. government regulation

6. taxation

7. closing the business

Disadvantages:

The smooth operations of sole proprietorships is hindered by the following:

1. the owner’s possible lack of ability & experience

2. the difficulty of attracting and keeping quality employees

3. the difficulty of raising capital

4. the limited life of the firm

5. the unlimited liability of the proprietor

Partnership:

• A Partnership is a legal association of two or more persons as co-owners of an

unincorporated business.

Advantages:

1. ease of formation

2. pooling of knowledge & skills

3. availability of more funds

4. ability to attract & retain employees

5. tax advantages
Disadvantages:

1. unlimited liability

2. limited life

3. potential conflict between partners

4. difficulty in dissolving the business

Corporation:
• A Corporation is an enterprise chartered by law, with most of the legal rights of a

person, including the right to conduct a business, to own & sell a property, to borrow

money and to sue or be sued.

• The corporate form of a business is the third ownership option open to business

persons.

• Owners of corporations are called stockholders.

• They are issued certificates of ownership called stocks.

Advantages:

The advantages inherent to corporations are the following:

1. limited liability

2. ease of expansion

3. ease of transferring ownership

4. relatively long life

5. ability to hire specialized management

Disadvantages:

Corporations also have these disadvantages:

1. more expensive & complicated to organize

2. double taxation

3. more extensive government restrictions & reporting requirements 4.

employees lack personal identification & commitment to corporate goals

Cooperatives:
• A Cooperative is an organization composed of individuals or businesses that have

banded together to reap the benefits of belonging to a large organization. •

Cooperatives are not organized for profit but to make its members individually

profitable or save money.

Types of Cooperatives:

These are of various types and are classified according to the special interest of its

members:

1. Credit Union – It accepts deposits from the members and lends money to them at very

reasonable interest rates.

2. Producers Cooperative – Its purpose is to actually assist one another in the procurement

of raw materials, machineries & equipments and other time-saving devices. 3. Marketing

Cooperative – Its purpose is to assist members in the marketing of their produce.

4. Consumers Cooperative – Its purpose is to provide members with quality goods &

services at reasonable prices.

5. Service Cooperative – Its purpose is to make services readily available at lower prices.
ACTIVITY QUESTIONS:

1. What are sole proprietorships? What advantages do they offer? What disadvantages are

inherent to sole proprietorships?

2. What is a partnership? What are its advantages & disadvantages?

3. What is a corporation? What are its advantages & advantages?

4. Why is it easy to pool large amounts of capital in a corporation?

5. “Double taxation” is a disadvantage of corporations. Explain briefly.

 6. Research on an example of a conglomerate.

7. In what way is the cooperative different from the corporation?

8. What are the types of coops?

MODULE 4

Course Learning Objective:

Discuss why decisions must be made at various levels in the organization.

Intended Learning Objective:

At the end of this chapter, students are expected to identify the steps in the decision-making

process.

Decision-Making as a Management Responsibility:

• Decisions must be made at various levels in the workplace.

• They are also made at the various stages in the management process. •

Management must strive to learn how to choose a decision option as correctly as

possible.

• Since they have the power to decide, they are responsible for whatever outcomes their

decisions bring.

• The higher the management level is, the bigger & more complicated decision-making

becomes.

What is Decision-Making?

• Decision-making may be defined as the process of defining the problem, identifying and
 choosing alternative courses of action in a manner appropriate to the demands of the

situation.

The Decision-Making Process

Rational decision-making is a process involving the following steps:

1. diagnosing the problem

2. analyzing the environment

3. articulating the problem or opportunity

4. developing viable alternatives

5. evaluating the alternatives

6. making a choice

7. implementing the decision

8. evaluating & adapting the decision results

 ACTIVITY QUESTIONS:
1. Can the manager avoid making decisions? Why or why not?

2. When a problem becomes apparent and the manager chooses to ignore it, is he making

a decision? Explain your answer.

3. Why is proper diagnosis of the problem important?

4. What are the components of the environment from the point of view of the decision

maker? What do they consist of?

5. How may one develop viable alternatives in problem solving?

6. How may alternative solutions be evaluated?

7. Why is it important for those who will be involved in implementation to understand and

accept the solution to the problem

8. Who’s the decision-maker in your life? Discuss briefly.

MODULE 5
Course Learning Objective:

Discuss the nature of planning & activities at various management

levels. Intended Learning Objective:

At the end of this chapter, students are expected to identify the steps in the planning process.
The Nature of Planning

• A Plan, which is the output of planning, provides a methodical way of achieving desired

results.

• In the implementation of activities, the plan serves as a useful guide. • Without the plan,

some minor tasks may be afforded major attention which may, later on, hinder the

accomplishment of objectives.

Planning Defined

• Planning may be defined as selecting the best course of action in anticipation of future

trends so that the desired result may be achieved.

• It must be stressed that the desired result takes first priority and the course of action

chosen is the means to realize the goal.

Planning at Various Management Levels

Planning activities undertaken at various levels are as follows:

1. top management – strategic planning

2. middle management – intermediate planning

3. lower management – operational planning

 The Planning Process

• The process of planning consists of various steps depending on the management level

that performs the planning tasks.

Planning involves the following:

1. setting organizational, divisional or unit goals

2. developing strategies or tactics to reach these goals

3. determining resources needed

4. setting standards

Types of Plans

• Plans are of different types. They may be classified in terms of functional area, time

horizon & frequency of use.

Standing Plans

• These are plans that are used again & again and they focus on managerial situations that

recur repeatedly.
Single-Use Plans

• These plans are specifically developed to implement the courses of action that are

relatively unique and are unlikely to be repeated.

Single-use plans may be further classified as follows:

1. budgets

2. programs

3. projects
• The Company or Corporate Mission refers to the strategic statements that identify why

an organization exists, its philosophy of management and its purpose as distinguished

 from other similar entities in terms of products, services & markets.

ACTIVITY QUESTIONS:

1. Why is planning an important activity for managers?

2. How may “planning” be defined?

3. What planning activities are undertaken at various management levels?

4. What are the steps in the planning process?

5. What are the types of plans? How may they be classified?

6. What is the production plan? What are its components? 7.

What are the barriers to planning?

8. What is a corporate mission?

MODULE 6
Course Learning Objective:

Discuss the nature of an organizational structure, its elements & determinants.

Intended Learning Objective:

At the end of this chapter, students have analyzed the management levels & supervision.
Reasons for Organizing

• Organizing is undertaken to facilitate the implementation of plans. • In effective

organizing, steps are undertaken to break-up the total job into more manageable

man-size jobs.

Organizing Defined

• Organizing is the management function that relates to the structuring of resources &

activities to accomplish objectives in an efficient & effective manner.

The Organizational Structure & Its Determinants

• The structure is the means by which the organization will attain its goals & objectives. •

It must be one that also considers its resources and its environment, both internal &

external.

The Determinants of Organizational Structure

1. strategy or plans for achieving the company’s objectives

2. the technology that will be used in carrying out the strategy

3. the people employed at all levels & their functions

 4. the size of the organization
The Formal Organization

• The formal organization is the structure that details the lines of responsibility, authority &

position.

• What is depicted in the organizational chart is the formal organization. • It is the

planned structure and it represents the deliberate attempt to establish patterned

relationships among components that will meet the objectives effectively.

The Formal Structure is described by management through:

1. organizational chart

2. organizational manual

3. policy manual

Levels of Management & Supervision

 • The management & supervision of an organization can be done through levels of

hierarchy which may be flat or small.

Flat Structure

• The flat organization has few levels of management.

This characteristic provides it with the following advantages:

1. communication is generally faster & less distorted

2. decisions can be made more quickly

3. supervisor's salaries are eliminated

However, they have these distinct disadvantages:

1. require managers with experience in various tasks

2. the manager may have little time for all subordinates

3. when the manager is out, the group is left without a leader

4. the manager may have little time to anticipate problems

Tall Structure

• The tall structure has many levels of management.

It has the following advantages:

1. the average span of control is narrower so the supervisory load is lesser for each

manager

2. more opportunities for promotion because there are more levels of position

3. managers are provided with opportunities to specialize

 4. less demand for managers with multiple skills

5. managers are more afforded with more time to attend to other important problems

They are also saddled with disadvantages such as these:

1. communication tends to be slower & distorted because of the number of levels it has to

pass through

2. the number of management levels also hinders effective decision-making rendering

such activity slower & less accurate

3. more expensive to maintain as there are more managers to compensate

Basic Elements of Organizational Structure

• In designing the organizational structure, certain basic elements are considered and are

as follows:

1. work specialization
 2. departmentalization

3. pattern of authority

4. span of control

5. coordination of activities
ACTIVITY QUESTIONS:

1. Why is it important for the manager to acquire skills in organizing?

2. What are the determinants of organization structure?

3. What means are used by management to describe the formal organization structure? 4.

When is an organization said to have a “flat” structure? What advantages does it have? 5.

What basic elements are considered in designing the organizational structure? 6. What is

referred to as “work specialization”? What advantage does specialization offer? 7. What is

referred to as “span of control”?

8. What is referred to as “pattern of authority”?

MODULE 7

Course Learning Objective:

Discuss the nature of the staffing process & its steps.

Intended Learning Objective:

At the end of this chapter, students have determined employment decisions that lead to

employee satisfaction.

What is Staffing?

• Staffing may be defined as the management function that determines human resource
 needs, recruits, selects, trains & develops talents for jobs created by an organization.

The Staffing Procedure

• The staffing process consists of the following series of steps:

1. human resource planning

2. recruitment

3. selection

4. induction & orientation

5. training & development

6. performance appraisal

7. employment decisions (monetary rewards, transfers, promotions & demotions)

8. separation
Compensating Employees

• Certain factors determine the wages or salaries paid to employees:

1. performance

2. the relative worth of each job within the firm

3. labor market conditions & prevailing wage rates

4. types of pay system used

Labor Market Conditions & Prevailing Wage Rates

• Some jobs may be similar with others in terms of difficulty, responsibility & other

factors.

• Some of them, however, will be paid higher rates because of bigger demand for them. •

Companies in dire need of certain skills will pay premium rates if these are not readily

available.

Types of Pay System Used

• Wages may vary because of seniority, company productivity & profit-sharing

considerations.

• Seniority reflects loyalty to the company as well as experience.

• Improvements in company productivity makes production more efficient and therefore,

less expensive.

• When the company makes profits, employees are sometimes provided opportunities for

sharing.

ACTIVITY QUESTIONS:

1. Why is staffing an important activity?

2. What activities are undertaken in staffing?

3. What is the purpose of human resource planning?

 4. How human resource needs may be determined?

5. What are the possible sources of applicants for vacant positions in the firm? 6. What

is the implication of the cost of the “wrong decision“ in the selection process? 7. How

may one determine the qualifications of a job candidate? 8. What are employment

decisions?

MODULE 8

Course Learning Objective:

Discuss the nature of leadership, the required skills & styles.

Intended Learning Objective:

At the end of this chapter, students have identified the traits of effective leaders.
What is Leading?

• Leading is the management function that involves influencing others to engage in the

work behaviors necessary to reach organizational goals.

• The definition indicates that a person or group of persons tasked with managing a group

must assume the role performed by leaders.

• While leading refers to the function, leadership refers to the process.

How Leaders Influence Others

• Managers are expected to maintain effective work forces.

• Leaders are said to be able to influence others because of the power they possess. •
Power refers to the ability of a leader to exert force on another.

The Nature of Leadership

• Leadership may be referred to as the process of influencing & supporting others to work

enthusiastically toward achieving objectives.

• It is expected of any manager in charge of any unit or division.

Traits of Effective Leaders:

1. A high level of personal drive

2. the desire to lead

3. personal integrity

4. self-confidence

5. analytical ability or judgment

6. knowledge of the company, industry or technology

7. charm

8. creativity

9. Flexibility

Leadership Skills

• Leaders need to have certain skills to be effective and these are as follows: 1.

technical

2. human

3. conceptual
Behavioral Approaches to Leadership Styles
• There are several approaches used in classifying leadership styles and these are:

1. according to the ways leaders approach people to motivate them 2. according to

the way the leader uses power

3. according to the leader’s orientation toward tasks & people

Leader’s Orientation toward Tasks & People

• Leadership may be classified according to how leaders view tasks & people. A leader

may either be:

1. employee-oriented

2. task-oriented