Organization

and Management

Lesson 1.1:
Definition and Functions of Management

JERWIN DE LA CUESTA
ACLC College of Ormoc – Business Department
LEARNING OUTCOMES
At the end of the lesson, you should be able to :

a. Ascertain the definitions of business, organization; and

management;
b. Explain management as an art, science, and as a profession; and
c. Discuss the five functions of management.
What is Business?
• According to Stephenson, it is the
regular production or purchase and sale
of goods undertaken with an objective of
earning a profit and acquiring wealth
through the satisfaction of human wants.

• According to Dickies, it is a form of

activity conducted with an objective of
earning profits for the benefit of those on
whose behalf the activity is conducted.
• According to Levis Henry, it is a
human activity directed towards
producing or acquiring wealth through
buying and selling of goods.

• It is an economic system in which

goods and services are exchanged for
one another or money of their
perceived worth.

• In this, every business requires some

form of investment and a sufficient
number of customers to whom its
output can be sold at profit on a
consistent basis..
What is Organization?
• It is a social group, or groups of people with ideas
and resources working towards common goals.

• It stems from the word “organism” which

means to create a structure with parts fully
integrated.

• Consists of parts (works to be done) and

relationship (the persons to do it)

• It implies a formalized structure of roles and

positions.
Business organization

➢ It is a group or a unit of people

working together with a
common objective of profit
maximization and at the same
time satisfaction of human
needs and wants by producing
goods and services.
Classification of Business

1. Agriculture & Mining.

concerned with the production of
raw material such as plant or
minerals.

2. Financial business. Includes

banks and other companies that
generate profit through
investment and management of
capital.
3. Information Business.
Generate profits primarily from
the resale of intellectual
property and include movie
studios, publishers and
packaged software.

4. Manufacturing
business. production of
products from raw materials or
component parts which are sold
at a profit.
5. Real estate business.
Generate profit from the selling,
renting and development of
properties, homes and building.

6. Retailing &
Distributorship. Act as
middlemen in getting goods
produced by manufacturers to
the intended customers.
7. SERVICE Business. Offer
intangible goods or services
and typically generate a profit
by charging for labor.

8. TRANSPORTATION
business. Deliver goods and
individuals from location to
location, generating a profit on
the transportation costs
9. Utilities business. Produce
public service such as electricity
or sewage treatment.
What is Management?

Source: google.com/photos
management management is a a process in
involves Figure
process1.that
Management Experts
making decisions
forecasting and involves planning, to attaining a pre-
planning, controlling, and determined set of
organizing, organizing to goals
coordinating, and achieve the
controlling organization’s
goals using people
and resources
What is Management?

Source: Silandote, 2017

Figure 1. Management in a Picture

“a process of achieving set goals effectively and

efficiently with the use of people and resources.”
 Is MANAGEMENT an
ART, SCIENCE or even a
PROFESSION?
MANAGEMENT as an ART
Management is an art in the sense that
within the confines and structures, there are greater
scope for the use of creativity, imagination, initiative and
invention within the overall sphere of the occupation.

1. Motivating and rewarding of the people

to do their work.
2. Rational design, organization, direction
and control of activities required.
3. Systematic selection of goals and
purposes.
MANAGEMENT as a SCIENCE
Management is a Science in the sense
that there is precise, scientific and exact aspects that
have to be learned and assimilated.

• It is a science because of the

extent to which the managers are
willing to invest in the
accumulation of knowledge and
the acceptance that management
practice can be based on the
rigorous application of
knowledge.
MANAGEMENT as a PROFESSION
Management is a PROFESSION in so far,
there is a general recognition that there are certain
knowledge, skills and aptitudes that must be assimilated
and understood by anyone who aspires to be a truly
effective manager.
 Functions of Management
1. The Planning Function

Organizations exist to achieve some goals or

purpose, and managers are there to articulate
that purpose and to find ways on how to
achieve it

Tasks/Components:

✓ defining and articulating goals

✓ creating strategies
✓ developing plans to properly coordinate
the activities
 Functions of Management
2. The Organizing Function

To accomplish the goals of the organization, the

managers arrange and structure the work to be
done

Tasks/Components:

✓ Determining what needs to be performed

and by whom
✓ how to perform the work
✓ who reports to whom
✓ who makes decisions
 Functions of Management
3. The Staffing Function

Staffing enables the organization to effectively

and efficiently discharge all other management
functions

Tasks/Components:

✓ recruitment and deployment of quality

personnel
✓ development, and training
✓ compensation of human resources
 Functions of Management
4. The Leading Function

To accomplish the goals of the organization, the

managers direct and coordinate all the activities
performed by those people who are part of the
organization

Tasks/Components:

✓ motivate employees
✓ direct employees’ activities
✓ choose the most effective communication
channels
✓ resolve conflicts
 Functions of Management
5. The Controlling Function

When everything is set- goals, plans, activities,

people- it is essential that evaluation is
performed to determine if everything is working
as planned.

Tasks/Components:

✓ Supervising work performance

✓ Comparing and correcting employees work
✓ Monitoring and evaluation of work
performance vis-à-vis targets and
objectives