Senior High School

Organization and Management

Module 15:
The Nature and Role of the Functional
Areas of Management

AIRs - LM
LU_Organization and Management_Module15
ABM - ORGANIZATION AND MANAGEMENT
Module 15: The Nature and Role of the Functional Areas of Management
Second Edition, 2021

Copyright © 2021
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without
written permission from the copyright owners.

Development Team of the Module

Author: Rose Ann Mapalo

Editor: SDO La Union, Learning Resource Quality Assurance Team
Content Reviewer: Joselito Dumocmat
Language Reviewer: Brian O. Rilloraza
Illustrator: Ernesto F. Ramos Jr.
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Management Team:

Atty. Donato D. Balderas Jr.

Schools Division Superintendent
Vivian Luz S. Pagatpatan, PhD
Assistant Schools Division Superintendent
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Department of Education – SDO La Union

Office Address: Flores St. Catbangen, San Fernando City, La Union
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 Senior High School

Organization and Management

Module 15:
The Nature and Role of the
Functional Areas of Management
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear
learners, can continue your studies and learn while at home. Activities,
questions, directions, exercises, and discussions are carefully stated for you
to understand each lesson.

Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.

Pre-tests are provided to measure your prior knowledge on lessons in

each SLM. This will tell you if you need to proceed on completing this
module or if you need to ask your facilitator or your teacher’s assistance for
better understanding of the lesson. At the end of each module, you need to
answer the post-test to self-check your learning. Answer keys are provided
for each activity and test. We trust that you will be honest in using these.

In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the
exercises and tests. And read the instructions carefully before performing
each task.

If you have any questions in using this SLM or any difficulty in

answering the tasks in this module, do not hesitate to consult your teacher
or facilitator.

Thank you.
 Target

As a business develops through time, it experiences different complexities.

With the arising issues and concerns, managing a business is not an easy task.
Thus, needing a good management skill is recommended. Management is a vital
aspect of the economic life of man. It is considered as the indispensable institution
in the modern social organization marked by scientific thought and technological
innovations. It is the management that regulates man's productive activities
through coordinated use of material resources. Without a quality and efficient
management, the resources of production remain resources and never become a
good and successful production. Management is the integrating force in all
organized activity.

In your previous lesson, you learned about the application of the concept
and nature of different control methods and techniques in accounting and
marketing.

This learning material will provide you with information that will help you
understand the different functional areas of management.

After going through this learning material, you are expected to:

1. explain the nature and role in the firm of the following functional areas of
management: Human Resource Management, Marketing Management,
Operations Management, Financial Management, Material and Procurement
Management, Office Management and Information & Communication
Technology Management (ABM_AOM11-Ih-j-15)

To be able to realize the above mentioned MELC, it is important to perform the

following sub-tasks:

1. identify the nature and role of functional areas of management;

2. determine the functional areas of management through the varied
learning activities and;
3. write a reflective essay citing the importance of the functional areas of
management and to your career path.

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 Jumpstart

ACTIVITY 1: MULTIPLE CHOICE

Directions: Read and analyze the following questions. Choose the letter of your
answer from the given choices. Place your answer in a separate sheet of paper.

1. Which of the following type of management is considered to be the entire

spectrum of management of people that serves to maximize their
performance in order to meet the organization’s strategic objectives?
A. Human Resource Management B. Financial Management
C. Marketing Management D. Office Management

2. What role of firm encompasses radio, television, cellphones, computer

and satellite system as its form of communication or application?
A. Operations Management
B. Material and Procurement Management
C. Office Management
D. ICT Management

3. In the Operations Management, which setting ensures the design of

effective and efficient production process and timely acquisition of raw
materials needed for production?
A. Service – oriented setting B. Operation Setting
C. Material Setting D. Manufacturing Setting

4. What management is being referred to when a firm ensures that it

manages the procurement process and the supply base effectively and
efficiently like buying high quality products?
A. Human Resource Management B. Marketing Management
C. Financial Management D. Office Management

5. What role of the firm is responsible in monitoring and reviewing the

systems that would yield expected outcomes like improved turnover,
output, sales, etc.?
A. Office Management B. Marketing Management
C. Financial Management D. Operations Management

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 Discover

THE NATURE AND ROLE OF THE FUNCTIONAL AREAS OF MANAGEMENT

A. HUMAN RESOURCE MANAGEMENT

Human Resource Management (HRM) refers to the application of management
principles to manage people in an organization. It is a tactical approach which
deals with acquisition, training and development, orientation, motivation and
retention of personnel in an organization. It is concerned with how efficiently
the human resources are put to work and effectively utilized so that employees
contribute to their fullest extent towards attainment of organizational objectives
that leads to its success.

The Functions of Human Resource Management (HRM)

Human resource management (HRM) is a systematic approach to fill in the gap
between the organization and its employees. To simplify the task of managing the
human capital of the organization, various functions of HRM have been developed.
These functions are categorized broadly as:

Figure 1: Functions of the Human Resource Management

Managerial Functions
The top management is responsible for forming strategies and giving directions for
the successful application of such plans.
 Planning: Firstly, the management must be aware of the vacant positions or
workforce requirement of the organization then they need to formulate the
strategies for meeting the requirements.
 Organizing: The manager has to establish a framework for the operative
functions, bringing together the human resources and physical resources
available with the organization.
 Directing: Once the framework is ready, the manager instructs and guides
the team to work accordingly, to meet the organizational objective.

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  Controlling: The management predefines the standard for performance, and
later analyses the results based on such criteria through performance
appraisal and job analysis. The management has to take corrective
measures if necessary.

Operative Functions
The operative functions are those which are taken on the departmental level or
middle level and mainly concerned about the execution of the plans and strategies
formulated at the managerial level.
 Procurement: The acquisition of human resource is the primary function of
a manager. It involves the estimation of personnel requirement, recruitment
and selection of suitable candidates, placement and orientation of the
workforce in the right position.
 Development: To develop the required skills and talent within the
employees, the managers have to use various training techniques.
 Compensation: Compensation in the form of remuneration, given to
employees instead of their services to the organization should be adequate
and fair. The employees are liable to get other benefits such as a bonus or
incentives.
 Integration: Integration means making the new employees familiar with the
organization and to their task or process. It introduces them to the
organizational environment and their colleagues.
 Maintenance: The most important of all is the retention of the employees
which requires providing them with various benefits and facilities, life
insurance, accidental insurance, health insurance, pension, gratuity,
allowances and taking other health and safety measures.

Human Resource Manager

- a trained person responsible for the placement of employees in the right
position, training and orientation of employees, addressing grievances and
solving conflicts, ensuring safety and security of employees, looking after
promotions and appraisals of employees, and aiming at the retention of
valuable employees in the organization. Also acts as a link between the
management and the employees; he communicates the management’s
policies and instructions to employees as well as employee’s queries to the
management.

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The Nature of Human Resource Management (HRM)

Figure 2: The Nature of the Human Resource Management

 Pervasive Function: HRM is practiced at all levels of management and

applies to all kinds of organizations, even to non-profit organizations.
 Result Oriented: It aims at achieving organizational objectives through the
optimum utilization of human resources.
 Tactful Approach: HRM deals with the people who are distinct from one
another; thus the manager needs to apply diverse strategies and tactics at
different point of time and in different situations.
 People-Centric: Human resource management is concerned majorly with
the employees working in an organization.
 Integrative Action: It focusses on maintaining cordial relations among the
employees at different levels and also addresses employee grievances.
 Continuous Process: HRM is an ongoing process of procurement,
development and redirection of personnel towards the organizational goals. It
cannot be completed in a day, a week or a month.

The Objectives of Human Resource Management (HRM)

The primary aim of human resource management (HRM) is to meet the human
capital requirement of an organization.

Figure 3: The Objectives of the Human Resource Management

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  Societal Objectives: HRM is essential to comply with the laws of the society
such as labor law or reservation system. It is obligatory for any organization
to fulfil its ethical and social responsibilities.
 Organizational Objectives: It is a department which aims at facilitating the
other departments of the organization to function smoothly.
 Functional Objectives: HRM ensures that every department is
supplemented with the employees possessing the required set of skills and
talent, at the desired cost. It also provides for the optimum utilization of the
human capital.
 Personal Objectives: To ensure employee’s long-term association with the
organization and to enhance employee’s commitment and contribution
towards the organization, HRM helps the employees to reach their personal
goals.

The Importance of Human Resource Management (HRM)

Human capital is equally important as the financial capital is to an
organization, since “people perform a task”.
• Fulfill the Human Resource Requirement: Human resource management fills
in the gap between the vacancies in the organization and the suitable candidates
for such positions.
• Employee Retention: HRM not only functions to acquire the manpower but also
concentrates on the maintenance and retention of the human capital.
• Enhance the Quality of Work Life: It focuses on the continuous enhancement of
the job facilities, hence improving the quality of employee’s work life.
• Redressing Grievance and Conflict: HRM addresses the problems among
employees or with the management since it is essential for any organization to
resolve its internal conflicts and grievances to ensure a sound and co-operative
work environment.
• Achieving Organizational Goals: To reach the set objectives and targets on time,
it is necessary to direct the employee’s efforts towards the organizational goals.
• Long-term Existence in the Market: Employees are the inevitable part of any
organization, therefore to survive in the competition, it is imperative that the
organization brings HRM into functioning.
• Developing Team Spirit and Feeling of Belongingness: It brings together the
different employees as a team to accomplish the goals of the organization. HRM
also make the employees feel valuable to the organization.
• Employee Satisfaction and Welfare: HRM works for the welfare, safety and
security of the organization. It is majorly concerned about the level of satisfaction
derived by an employee from his job.

B. MARKETING MANAGEMENT
Marketing is the management of the exchanges between an organization and
its stakeholders — customers, employees, community groups, and others. It is an
ongoing practice to capture customer’s attention towards a product or service and
smoothen the process of exchange of ownership of goods and services from seller to
the buyer. The two primary roles of marketing are to attain and retain target
customers.

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 Marketing management is “planning, organizing, controlling and
implementing of marketing programs, policies, strategies and tactics designed to
create and satisfy the demand for the firms’ product offerings or services as a
means of generating an acceptable profit.” It deals with creating and maintaining
demand for goods and services of the organization.

Marketing Management Involves:

1. The setting of marketing goals and objectives,
2. Developing the marketing plan,
3. Organizing the marketing function,
4. Putting the marketing plan into action and
5. Controlling the marketing program.

Marketing Management is both a science as well as an art. Those

responsible for marketing should have good understanding of the various concepts
and practices in marketing, communication, and analytical skills and ability to
maintain effective relationship with customers, which will enable them to plan and
execute marketing plans. Continuous practice in the areas of personal selling, sales
promotion, advertising, etc. would enable them to become artists.

The Features of Marketing concept:

 Focus on customer needs – The needs of the consumer are studied and
these become the basis of all product related activities such as designing,
pricing, distribution, packaging etc.
 Providing consumer satisfaction – Every organization aims at providing
maximum consumer satisfaction by understanding his needs and designing
an appropriate product that leads to the success of an organization.
 Integrated Marketing Management – Marketing management is only a part
of the total managerial functions of an organization. All other functions are
integrated in order to provide maximum satisfaction to the consumer.
 Achieving organizational goals – Modern marketing states that an
organization must aim at maximizing consumer satisfaction and in the
process enable itself to achieve its goals such as growth, market share, etc.
 Innovation – Innovative methods must be used to understand the
consumer, design an appropriate product and offer it to the consumer.

The Functions of Marketing Management

1. Analyzing Market Research and Opportunities: collects and analyses
information related to consumer’s needs, wants and demands, competitor’s
marketing strategies, changing market trends and preferences.
2. Determination of Target Market and Objectives: helps to identify the
target market that the organization wishes to offer its product.
3. Planning, Decision Making and Development of Market Activities:
Planning relates to product introduction and diversification then decision
making regarding pricing, selection of promotional mix, and selection of
distribution channel.

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 4. Creation of Customer: Consumers determine the future of the market.
Therefore, providing the best product to the consumer according to their
preference is the important task of marketing.
5. Helps in Increasing Profit: Marketing management helps to increase profit
and sales volume. This is achieved by expansion of market and increasing
customers.
6. Improvement in Quality of Life: Marketers continuously strive to
incorporate new technology and mechanism in their product to provide more
satisfaction to customers than before.
7. Employment Opportunities: Marketing process is a combination of
different activities like research work to assess the marketing environment,
product planning and development thus marketing management opened up
different employment avenues thus creating employment opportunities.
8. Pricing of Product: Pricing decisions are based on cost of the
manufacturing and distribution of product, competitor’s pricing strategies,
customer’s willingness to pay for the product, customer’s perception about
the product.
9. Promotion: Promotion and advertisement is essential to provide information
to the customers about the product, to attract new customers, to provide
information and reminder to customers to continue purchasing.

Advertising is concerned with deciding how much advertising to use, what

media to use (newspapers, radio, television, direct mail, billboard, car cards, point-
of-purchase display, etc.,); the frequency with which the advertisements will appear
(daily, weekly, monthly, etc.,); and the message to be employed. Personal selling
deals with the selection, supervision, and training of salesmen; the allocation of
salesmen to territories; and the evaluation of salesmen. “Promotion” is also often
used in the trade literature in a restricts sense of special pricing arrangements to
retailers and consumers.

10. Distribution: Distribution process facilitates easy availability of goods and

services to the customers at right time and at right and convenient location.
11. Evaluation and Controlling of Marketing Activities: Evaluation enables
identification of effectiveness of marketing plans and actions.

The marketing manager makes marketing plans within the framework of

controllable and non-controllable variables.
 Non-controllable variables are social, technological, political, cultural and
legal factors which affect the marketing strategies.
 Controllable variables are the product, price, promotion and channels of
distribution.

Marketing mix is the combination of four controllable variables that make a

successful marketing program.

(a) Product Mix: It deals with physical attributes of the product and the
benefits associated with use of that product.

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 (b) Pricing Mix: While pricing a product, managers consider factors such as
costs, legal framework, prices charged by competitors and the prices that
consumers are ready to pay. Managers must price the product to recover the
costs and earn a reasonable return on capital.
(c) Promotion Mix: It refers to firm’s communication with the consumers
regarding the product. It motivates them to buy the goods.

Sales can be promoted in three ways:

1. Advertisement: It presents the product details to consumers through
media. It is a non-personal means of communication.
2. Personal Selling: The seller directly contacts the buyer and convinces
him to buy the goods and services.
3. Sales Promotion: It supplements advertisement and personal selling
as a means of promoting sales. It increases sales by holding contests,
lotteries etc.

(d) Channel Mix: It identifies the path or the route through which goods are
transferred from sellers to buyers. The seller may sell directly to the buyer or
through intermediation of wholesalers and retailers.

A market is a place or space that is made up of all present or potential buyers.

A number of issues are connected to the concept of market:
1. Size: The number of buyers in a market gives rise to its size, which can either
be expressed in terms of volume (e.g., number of cars sold in Philippines in a
given year) or value (e.g., total car sales expressed in Philippine peso terms).
2. Number of Buyers: Size is also related to the number of buyers in a market.
For instance, there are specialized products that appeal to a limited number
of customers like shoes for astronauts or watches for deep divers.
3. Demographic Grouping: Consumers in a market can be divided into different
groups based on their demographic aspects such as age, income, occupation,
and gender. Presence of demographic groups in the market creates differences
in demand that may render one product differently attractive to these groups.
For instance, Creamsilk, a brand of hair conditioning cream is targeted at the
female segment of consumers.
4. Geography: Consumers can be geographically located at different places,
which can create differences in their needs and wants. For instance, air
conditioner and refrigerator sellers’ market their products in tropical locations
with “tropicalized” compressors that are equipped to work in hot weather.

The Ideal Skills of a Seller:

1. Skill to Retain the Consumer: Different consumers have different
expectations and attitudes. To retain your existing consumer base, you must
constantly make efforts to render personalized service to your consumers.
2. Creative Selling: This requires a sound knowledge of the company’s product
as well as understanding of the consumer. Creating selling requires both
persuasive and informative efforts on the part of the salesman.

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 3. Skill to Overcome Consumer Resistance: The salesman has to use
convincing arguments. He must be a good advocate for his company and the
product. He has also to be aware of the competitive products and their weak
points. The salesman should respond persuasively and skillfully to stress the
benefits of the product and how it will satisfy the consumer’s need.
4. Interpersonal Skills: They have to be enthusiastic, full of energy and should
have a liking for interacting to make healthy relationships with people.
5. Convincing Skill: The salesman provides his customer with much
knowledge about the product, its features and uses as also about
competitive products available in the market.

C. OPERATIONS MANAGEMENT
Operations Management can be defined as the management of activities that
enable an organization to transfer a range of basic inputs (raw materials, energy,
customer requirements, information, skills, finance, etc.) into outputs that deliver
the organization’s primary products / goods and services to the end customer.
Factors such as inventory management, supply and logistics, design decisions are
related to capacity planning and scheduling, quality assurance and the
management of processes and human resources in order to ensure that the right
skill base is developed and utilized.
It involves planning, organizing, coordinating, and controlling all the
resources needed to produce a company’s goods and services. It involves managing
people, equipment, technology, information, and all the other resources needed in
the production of goods and services. Operations management is the central core
function of every company.

The Transformation Role of Operations Management

Operations management performs a transformation role in the process of

converting inputs such as raw materials into finished goods and services.

Figure 4: The Transformational Role of Operations Management

The transformation role of Operations Management makes this function the
“engine room” of the organization. As a result, it is directly responsible for many
decisions and activities that give rise to product design and delivery problems. The
design and management of operations strongly influence how much material
resources are consumed to manufacture goods or deliver a service, making sure
that there is enough inventory to produce the quantities that need to be delivered

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to the customer, and ensuring that what is made is in fact what the customer
wants.

Differences in Manufacturing and Service Operations

Manufacturing and Production Operation: Designs the effective and efficient

production process, acquisition of raw materials, number of trained workers and
proper maintenance of equipment. Manufacturing is a form of business that
combines and transforms resources into tangible outcomes that are then sold to
others.
Service Operations: The availability of trained and customer-oriented personnel,
presence and excellence provisions of customer services. An organization that
transforms resources into an intangible output and creates time or place.

Manufacturers
Tangible product.
Product can be inventoried.
Low customer contact.
Longer response time.
Capital intensive.
Services
Intangible product.
Product cannot be inventoried.
High customer contact.
Short response time.
Labor intensive.

The Role of Operations Management

 Strategic Decisions: assists senior level management in making strategic
level decisions. Such decisions consider the existing constraints as well as
the current conditions to formulate efficient systems and companywide
processes to achieve a competitive advantage.
 Tactical Decisions: enables management to efficiently schedule the
available resources and manage the staff under the legal regulations and the
constraints defined by the organization’s strategic plan. Examples of these
include operational shift planning and the scheduling of the delivery of raw
materials.
 Operational Decisions: assists management in planning, controlling and
monitoring operational decisions under the constraints defined by the
tactical decisions. Examples of these includes typical day-to-day business
decisions made by team leaders, such as planning individual daily tasks and
goals.

Furthermore, quality is not restricted to the production of goods; it is also aimed at

the quality of the services the customers receive. Quality can be managed by using
different tools, such as the 5 Gap Model which was designed to deal with the lack
of quality in customer service and to measure of quality.

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The 5 Gap Model - takes into account the tangibles, reliability, responsiveness,
assurance and empathy that is required in Quality Management.

Gap 1: Between the customers’ expectations and the management’s perceptions

about these expectations
Gap 2: Between management’s perception and service quality specifications
Gap 3: Between service quality specifications and service delivery
Gap 4: Between service delivery and external communications about service
delivery
Gap 5: Between expected and experienced service by the customer

The Responsibilities in Operations Management

The individual in charge of the department will be required to perform
various strategic functions. Some of the functions include:
1. Product Design: It involves generating new ideas or expanding on current
ideas in a process that will lead to the production of new products. The
operations manager’s responsibility is to ensure that the products sold to
consumers meet their needs, as well as match current market trends.
2. Forecasting: involves making predictions of events that will occur in the
future based on past data. The manager relies on past and present data on
the uptake of the company’s products to determine future trends in
consumption.
3. Supply Chain Management: involves managing the production process from
raw materials to the finished product. It controls everything from production,
shipping, distribution, to delivery of products.
4. Delivery Management: The operations manager ensures that the goods are
delivered to the consumer in a timely manner. They must follow up with
consumers to ensure that the goods delivered are what the consumers
ordered and that they meet their functionality needs.

The Ideal Skills of an Operations Manager

1. Organizational Abilities: The operations manager should be able to plan,
execute, and monitor each project to the end without losing focus.
2. Coordination: needs to have a good coordination by knowing how to
integrate resources, activities, and time to ensure proper use of the
resources toward the achievement of the organization’s goals and involves
dealing with interruptions, obstacles, and crises, and efficiently going back
to the normal routine functions to prevent further interruptions.
3. People Skills: This means that they must know how to relate with the
employees, outside stakeholders, and other members of senior management
by knowing how to communicate, listen, and relate to them on professional
and personal levels.
4. Tech-savvy: An operations manager needs to have an affinity for technology
in order to be in a position to design processes that are both efficient and
tech-compliant to gain a competitive advantage in the market.

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D. FINANCIAL MANAGEMENT
Financial management, is that branch of general management, which has
grown to provide specialized and efficient financial services to the whole enterprise;
involving, in particular, the timely supplies of requisite finances and ensuring their
most effective utilization-contributing to the most effective and efficient attainment
of the common objectives of the enterprise.

Finance is termed as the backbone of every business and is required for

carrying out each and every activity. Financial Management is a methodology that a
business implements to monitor and govern its revenue, expenses, and assets in
order to maximize profitability and ensure sustainability. The concept ensures that
an adequate amount of funds is always available in business from different sources
and also it earns the best return on its investments.

The Scope of Financial Management

It is important that financial decisions take care of the shareholders'
interests. Further, they are upheld by the maximization of the wealth of the
shareholders, which depends on the increase in net worth, capital invested in the
business, and plowed-back profits for the growth and prosperity of the
organization.

Figure 5: The Scope of Financial Management

In organizations, managers in an effort to minimize the costs of procuring

finance and using it in the most profitable manner, take the following
decisions:
1. Investment Decisions: Managers need to decide on the amount of
investment available out of the existing finance, on a long-term and short-
term basis.
 Long-term investment decisions or Capital Budgeting mean committing
funds for a long period of time like fixed assets. These decisions are
irreversible and usually include the ones pertaining to investing in a building
and/or land, acquiring new plants/machinery or replacing the old ones, etc.
 Short-term investment decisions or Working Capital Management
means committing funds for a short period of time like current assets. These
involve decisions pertaining to the investment of funds in the inventory,
cash, bank deposits, and other short-term investments.

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 2. Financing Decisions: Managers also make decisions pertaining to raising
finance from long-term sources (called Capital Structure) and short-term
sources (called Working Capital).
 Financial Planning decisions which relate to estimating the sources and
application of funds. The primary objective of financial planning is to plan
and ensure that the funds are available as and when required.
 Capital Structure decisions which involve identifying sources of funds.
They also involve decisions with respect to choosing external sources like
issuing shares, bonds, borrowing from banks or internal sources like
retained earnings for raising funds.

3. Dividend Decisions: These involve decisions related to the portion of profits

that will be distributed as dividend and how much of these will be retained
in the company-requiring an intelligent solution to the controversy
‘Retention vs. Distribution’. Shareholders always demand a higher dividend,
while the management would want to retain profits for business needs.

The Objectives of Financial Management

Primary Objectives:
 Attempting to reduce the cost of finance
 Ensuring sufficient availability of funds
 Dealing with the planning, organizing, and controlling of financial
activities like the procurement and utilization of funds.

Figure 6: The Objectives of Financial Management

The Nature of Financial Management

 Estimates Capital Requirements - helps in anticipation of funds required
for running the business. It estimates working and fixed capital
requirements for carrying out all business activities.
 Decides capital structure - It involves deciding the proper portion of
different securities like common equity, preferred equity, and debt. The

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 proper balance between debt and equity should be attained which minimizes
the cost of capital.
 Select sources of Fund - Every business should properly analyze different
sources of funds available and choose one which is cheapest and involves
minimal risk. There are various sources available for raising funds like
shares, bonds, debentures, venture capital, financial institutions, retained
earnings, owner investment, etc.
 Selects investment pattern - Once funds are procured it is important to
allocate them among profitable investment avenues. The investment
proposal should be properly analyzed regarding its safety, profitability, and
liquidity.
 Raises Shareholders value – It aims at increasing the amount of return to
shareholders by reducing the cost of operations and increasing the profits.
 Management of cash - Finance managers supervise all cash movements
through proper accounting of all cash inflows and outflows.
 Apply financial controls - It helps in keeping the company actual cost of
operation within the limit and earning the expected profits.

E. MATERIALS AND PROCUREMENT MANAGEMENT

Materials management is defined as the function responsible for the
coordination of planning, sourcing, purchasing, moving, storing and controlling
materials in an optimum manner so as to provide a pre-decided service to the
customer at a minimum cost.
Materials management is a core supply chain function and includes supply
chain planning and supply chain execution capabilities. The material requirements
are communicated to procurement and other functions for sourcing. Materials
management is also responsible for determining the amount of material to be
deployed at each stocking location across the supply chain, establishing material
replenishment plans, determining inventory levels to hold for each type of inventory
(raw material, WIP, Finished Goods), and communicating information regarding
material needs throughout the extended supply chain.

The Nature and Scope of Material and Procurement Management

1. Materials planning and control: This involves estimating the individual
requirements of parts, preparing materials budget, forecasting the levels of
inventories, scheduling the orders and monitoring the performance in relation
to production and sales.
2. Purchasing: includes selection of sources of supply finalization in terms of
purchase, placement of purchase orders, follow-up, maintenance of smooth
relations with suppliers, approval of payments to suppliers, evaluating and
rating suppliers.
3. Stores management: involves physical control of materials, preservation of
stores, minimization of obsolescence and damage through timely disposal and
efficient handling, maintenance of stores records, proper location and stocking.
4. Inventory control or management: Inventory generally refers to the
materials in stock. Inventories represent those items, which are either stocked

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 for sale or they are in the process of manufacturing, or they are in the form of
materials, which are yet to be utilized.
5. Other related activities:
a. 3S

1. Standardization: producing maximum variety of products from the

minimum variety of materials, parts, tools and processes.
2. Simplification: It is concerned with the reduction of product range,
assemblies, parts, materials and design.
3. Specifications: refers to a precise statement that formulizes the
requirements of the customer. It may relate to a product, process or
a service.

b. Value analysis: Value analysis is concerned with the costs added due to
inefficient or unnecessary specifications and features. It makes its
contribution in the last stage of product cycle, namely, the maturity stage.
c. Ergonomics (Human Engineering): The human factors or human
engineering is concerned with man-machine system. Ergonomics is “the
design of human tasks, man-machine system, and effective accomplishment
of the job.

The Functions of Material and Procurement Management:

1. Production and Material Control: The requirements of parts and materials are
determined as per production schedules. It is ensured that every type or part of
material is made available so that production is carried on smoothly.
2. Purchasing: Purchasing department is authorized to make buying arrangements
on the basis of requisitions issued by other departments. This department keeps
contracts with suppliers and collects quotations etc. at regular intervals. The effort
by this department is to purchase proper quality goods at reasonable prices.
3. Non-Production Stores: Non-production materials like office supplies,
perishable tools and maintenance, repair and operating supplies are maintained as
per the needs of the business.
4. Transportation: This department is responsible for arranging transportation
service. It all depends upon the quantity and frequency of buying materials. The
purpose is to arrange cheap and quick transport facilities for incoming materials.
5. Materials Handling: It is concerned with the movement of materials within a
manufacturing establishment and the cost of handling materials is kept under
control.
6. Receiving: The receiving department is responsible for the unloading of
materials, counting the units, determining their quality and sending them to stores
etc. The purchasing department is also informed about the receipt of various
materials.

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The Role and Objectives of Material and Procurement Management
 To procure raw material at low cost
 To maintain consistent quality
 To ensure continuous supply of raw material
 To minimize the carrying costs and ordering costs
 To maintain a good relationship with supplier
 Efficient record-keeping and prompt reporting
 To develop new sources and new materials
 To avoid the loss of direct labor and wastages of materials at the stage of
storage
 To properly utilized the equipment being used
 Training and development of personnel

F. OFFICE MANAGEMENT
Office management refers in creating a focused work environment and the
process of planning, organizing, guiding, communicating, directing, coordinating
and controlling the activities of a group of people who are working to achieve
business objectives efficiently and economically. These activities are evaluated and
adjusted to improve and maintain efficiency, effectiveness and productivity.
Office managers are some of the few people who interact with every level of
employee, either virtually or face-to-face every day. A successful office manager
in any field must understand the behavior and needs of their employees, so they
can learn how to best motivate their workers with the appropriate incentives.

The Elements of Office Management

Elements of office management are termed as pillars of a building. If pillar is
strong, certainly, the building is also strong. Hence, efficient functioning of office
management is based on the elements of office management.
1. Personnel: Office personnel are actually performing the office work. The
office work is to be performed by allocating the work to each individual
according to their efficiency, guide the personnel to do the work with the
help of means available in an office within a specified time and control the
activities of office personnel.
2. Means: refers to tools used to perform the office work like pen, pencil, paper,
ink, office forms, computer, printer, calculator and the like. Adequate tools
have been supplied in an office and put them to the most efficient and
economical use for achieving objectives.
3. Environment: A working environment is created and maintained for the
smooth performance of office work. It is the duty and responsibility of an
office manager to bring suitable environment by adopting various procedures
and practice.
4. Purpose: The office personnel must be aware of the purpose for which a
particular work is carried on and the impact of such work on others’
performance.

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The Functions of Office Management
1. Planning: Creating a structure of the responsibilities required to achieve
the objectives of your company is a key function of office
management. Detailed planning and meeting organization is the first
step toward efficient operations and facilitating control.
2. Organizing Resources: These resources include materials, personnel,
and financial backing. The best office managers consistently
coordinate tasks in order to keep these resources moving toward
planned goals.
3. Staffing: In a small organization, the executive office managers run lead
or coordinate with human resources on all matters of staffing
recruitment, compensation, promotion, and retirement of subordinate
managers.
4. Communication: An office manager should be able to properly
communicate the needs of the company to its employees to meet the
optimum efficiency.
6. Working with Information Technology: Modern office managers may use
software for their own day to day role and also help to manage the
software and technology for employees.
7. Motivation: The self-motivation and external motivation should satisfy
the employees' needs while being competitive, productive, and
comprehensive to have high morale and be more likely to improve
their performance.

G. INFORMATION AND COMMUNICATION TECHNOLOGY MANAGEMENT

Information and Communication Technology are technologies which
facilitate the management to share knowledge and information. ICT includes all
digital technology that assists individuals, businesses and organizations in using
information. It covers all electronic products that deal with information in a digital
form that encompasses radio, television, cellular phones, computer and network
hardware and software, satellite system, data and data center facilities, as well as
the staff who are hired to maintain them.
It is the responsibility of the firm to provide the necessary information and
communication facilities to all its business units in order to ensure that they are
able to perform their functions more effectively and efficiently. Therefore, ICT is
concerned with digital data storage, retrieval and transmission. ICT makes a
business more efficient, effective and promptly respond to customers’ needs. It can
assist business activities including design, manufacturing, distribution and sales
and feedback.

ICT covers topics related to the financial, economic and technological

aspects and stress on the importance of ICT their role in facilitating a wide range of
services and transactions. ICT through facilitating the supply and access of a wide
range of financial services, increasing efficiency in institutions and corporations,
reducing costs and promoting and enhancing communication are a major channel
for development.

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The Role of Information and Communication Technology Management
 Expanding opportunities
 Communication between employees, suppliers and customers
 Data and Inventory Management Systems
 Information Management Systems
 Increasing efficiency and enhancing quality of work
 Facilitating skill formation
 Improving policy planning and management
 Advancing community linkages

A primary focus of ICT management is the value creation made possible by

technology. This requires the alignment of technology and business strategies.
While the value creation for an organization involves a network of relationships
between internal and external environments, technology plays an important role in
improving the overall value chain of an organization. However, this increase
requires business and technology management to work as a creative, synergistic,
and collaborative team instead of a purely mechanistic span of control.

Explore

ACTIVITY 1: TRUE OR FALSE

Directions: Analyze each statement. Write TRUE if the statement is correct and
FALSE if it is incorrect. Write your answer on a separate sheet of paper.

1. Non-controllable variables in the Marketing Management includes social,

technological, political, cultural and legal factors which affect the marketing
strategies.
2. ICT Management covers all electronic products that deal with information in a
digital form that encompasses radio, television, cellular phones, computer and
network hardware and software, satellite system, data and data center facilities,
as well as the staff who are hired to maintain them.
3. Ergonomics is different from Human Engineering that design human tasks,
man-machine system, and effective accomplishment of the job, including
controls for human operations and complex man-machine systems.
4. A primary focus of ICT management is the value creation made possible by
technology that requires the alignment of technology and business strategies.
5. Operations management performs a transformation role in the process of
converting inputs such as raw materials into finished goods and services.
6. In the Financial Management, it is important that financial decisions take care
of the shareholders' interests. Further, they are upheld by the maximization of
the wealth of the shareholders, which depends on the decrease in net worth,

23
LU_Organization and Management_Module15
 capital invested in the business, and plowed-back profits for the growth and
prosperity of the organization.
7. Human Resource Management is concerned with how efficiently the human
resources are put to work and effectively utilized so that employees contribute
to their fullest extent towards attainment of organizational objectives that leads
to its success.
8. The objectives of Financial Management include Basic Objectives, Operational
Objectives, Social Objectives and Research Objectives.
9. Operations Management is a methodology that a business implements to
monitor and govern its revenue, expenses, and assets in order to maximize
profitability and ensure sustainability.
10. The two primary roles of Marketing Management are to attain and retain
target customers. Markets can be defined from supply perspectives only.

ACTIVITY 2: IDENTIFY

Directions: Identify the functional areas of management of the concept listed

below. Choose your answer from the box. Write your answer on a separate sheet of
paper.
Human Resource Management Office Management
Marketing Management Financial Management
Material and Procurement Management Operations Management
Information and Communication Technology Management
1. cellphones
2. purchasing
3. management of people
4. satisfying the consumer
5. maintenance of the process of work
6. training and development
7. buying high quality products
8. input to output
9. selection and placement
10. satellite system
11. supply
12. investment decision
13. service-oriented setting
14. network hardware and software
15. dividend decision

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 Deepen

ACTIVITY 1: COMPLETE THE TABLE

Direction: Complete the table below by putting what and how you understand the
concepts provided in your lesson. Write your answer in a separate sheet of paper.
Below is your rubric to assess your output.

Functional Areas of Needed Skills of the

Function / Description
Management Persons Involved
1.
2.
3.
4.
5.
6.
7.

Activity 2: REFLECTION

Direction: Write a reflective essay about the importance of each functional areas of
management and discuss its relevance in your future career path. Write your
answer in a separate sheet of paper.

Rubrics for Scoring the Output of Activity 1 and Activity 2

Poor Fair Good
Category
1 point 3 points 5 points

Accomplished Accomplished Accomplishment

purpose of assignment in a capable purpose of
assignment only manner. Major topics assignment directly
partially or covered but supporting and completely in an
Content indirectly. Little or detail somewhat lacking exceptional manner.
no supporting data in specificity, accuracy, All major topics
or data presented or reference thoroughly supported
was not relevant, by specific, accurate,
specific, or accurate relevant data

Lacked sense of Adequate sense of unity Exceptionally clear

Organization unity and order, and order, most sense of unity and
ineffective / lack of transitions effective order, logical

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LU_Organization and Management_Module15
 transitions transitions

Lacked smooth, Used smooth, clear, Used smooth, clear,

clear, readable readable writing readable writing in a
writing, contains throughout most of superior way
Style clichés and paper, few clichés, throughout , no
wordiness, generally occasional wordiness, clichés or wordiness,
ineffective word generally appropriate consistently effective
choice word choice word choice

More than a few Not more than a few Few, if any, errors
errors per page in errors per page in use of throughout in use of
use of Standard Standard English rules Standard English
English rules of of grammar, spelling, rules of grammar,
Grammar
grammar, spelling, punctuation, spelling,
and
punctuation, capitalization, and punctuation,
Mechanics
capitalization, and usage but did not affect capitalization, and
usage that made the overall clarity usage
output unclear or
difficult to read

Gauge

Directions: Read each item carefully. Write the letter of the correct answer. Use a
separate sheet of paper.

1. Which of the following area of management is considered to be the tactical

approach which deals with acquisition, training and development, orientation,
motivation and retention of personnel in an organization?
A. Human Resource Management B. Financial Management
C. Marketing Management D. Office Management

2. What role of firm encompasses cellular phones, computer and network hardware
and software, satellite system, data and data center facilities?
A. Operations Management B. Office Management
C. Material and Procurement Management D. ICT Management

3. In the Operations Management, which setting ensures the availability of trained

and customer-oriented personnel, presence and excellence provisions of customer
services?
A. Service – oriented setting B. Operation Setting
C. Material Setting D. Manufacturing Setting

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LU_Organization and Management_Module15
4. Which of the following is NOT to be considered in playing a big part in Materials
and Procure Management?
A. Standardization, Simplification, Specification
B. Value Analysis
C. Materials Planning and Control
D. Dividend Decision

5. Mr. Jethro is an employee of a large company who works under the Material and
Procure Management. He has a question about his compensation and benefits. In
which of the following area of management will he approached?
A.Operations Management B. Human Resource Management
C. Office Management D. ICT Management
6. What area of management functions as creating a focused work environment
and the process of planning, organizing, guiding, communicating, directing,
coordinating and controlling the activities of a group of people who are working to
achieve business objectives efficiently and economically?
A. Office Management B. Marketing Management
C. Financial Management D. Operations Management

7. Material and Procure Management covers all aspects of material costs, supply
and utilization. Which of the following is NOT a function of this functional area?
A. purchasing B. promoting
C. producing D. shipping

8. The Human Resource Management is looking for the following skills: creativity in
marketing, overcoming consumer resistance and convincing skills. What kind of
personnel / employee do you think of this?
A. Seller B. Machine and Equipment Operator
C. Finance Manager D. Office Staff

9. In the Operations Management, which responsibility involves making predictions

of events that will occur in the future based on the past data?
A. Product Design B. Forecasting
C. Delivery Management D. Supply Chain Management

10. A market is a place or space that is made up of all present or potential buyers.
Which of the following refers to the number of buyers in a market which can either
be expressed in terms of volume or value?
A. size B. consumer diversity
C. demographic D. geography

11. Which of the following ideal skills of an Operations Manager refers to the ability
to plan, execute, and monitor each project to the end without losing focus?
A. Organizational Abilities B. People Skills
C. Coordination D. Tech - Savvy

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LU_Organization and Management_Module15
12. Which of the following personnel acts as a link between the management and
the employees; he communicates the management’s policies and instructions to
employees as well as employee’s grievances and queries to the management?
A. Marketing Officer B. Human Resource Manager
C. Office Staff D. Supply Officer

13. Promotion Mix refers to firm’s communication with the consumers regarding
the product. The following choices are ways to motivate them to buy the goods,
EXCEPT:
A. advertisements B. sales promotion
C. personal selling D. purchasing

14. Which of the following is NOT an objective set by the materials and procure
manager in the process of achieving the organizational goals?
A. to maintain consistent quality
B. to procure raw material at high cost
C. to maintain a good relationship with supplier
D. to ensure continuous supply of raw material

15. Efficient functioning of Office management is based on the elements. Which

element refers to tools used to perform the office work. It includes pen, pencil,
eraser, paper, ink, office forms, typewriter, computer, printer, calculator and the
like.
A. Means B. Purpose
C. Environment D. Personnel

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LU_Organization and Management_Module15
29
Jumpstart Activity 1 1. A 2. D 3. D 4. B 5. A
Explore: ACTIVITY 1:
TRUE
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
6. TRUE
7. TRUE
8. FALSE
9. FALSE
Activity 2:
1. ICT Management
2. Materials & Procurement Management
3. Human Resource Management
4. Marketing Management
5.Office Management
6. Human Resource Management
7. Materials & Procurement Management
8. Operations Management
9. Human Resource Management
10. ICT Management
11. Materials & Procurement Management
12. Financial Management
13. Operations Management
14. ICT Management
15. Financial Management
Gauge:
1. A 6. D 11. A
2. D 7. C 12. C
3. A 8. A 13. D
4. D 9. C 14. B
5. B 10. A 15. A
Answer Key
References

Printed Materials:
 Department of Education. (2013). K-12 Basic Education Curriculum,
K to 12 Senior High School ABM Specialized Subject – Organization
and Management Curriculum Guide. Pasig City, Philippines
 Payos, Ranulfo P. et al. (2016). Organization and Management. (pp26-
27) Manila, Philippines: Rex Bookstore, Inc.

Website:
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https://www.wisdomjobs.com/e-university/production-and-
operations-management-tutorial-295/scope-or-functions-of-
materials-management-9582.html
 Human Resource Management – HRM. Retrieved October 18, 2020
from https://theinvestorsbook.com/human-resource-management-
hrm.html
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https://www.bau.edu.lb/Research/Information-and-Communication-
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https://www.yourarticlelibrary.com/marketing/marketing-concept-
and-role-of-marketing-in-a-business-marketing-management/28737
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https://www.economicsdiscussion.net/marketing-
management/what-is-marketing-management/31788
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October 17, 2020 from https://www.yourarticlelibrary.com/material-
management/materials-management-meaning-importance-and-
functions/53156
 Nature and Functions of HRM. Retrieved October 17, 2020 from
https://www.managementstudyhq.com/nature-and-functions-of-
hrm.html
 Nature and Scope of Financial Management. Retrieved October 17,
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financial-management/
 Nature of Human Resource Management. Retrieved October 17, 2020
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 Objectives of Financial Management. Retrieved October 18, 2020 from
https://www.yourarticlelibrary.com/financial-
management/definition-financial-management/financial-
management-definition-nature-and-objectives-financial-
management/69606
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 Office Management: Meaning, Definition and Elements. Retrieved
October 18, 2020 from https://accountlearning.com/office-
management-meaning-definition-elements/
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https://www.informit.com/articles/article.aspx?p=2167438
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operations.html

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