ORGANIZATION AND MANAGEMENT
1st Quarter objectives.
Management
● a process of organizing, leading,
controlling, and planning activities in
an organization in a systematic way
to achieve a common goal.
Management is a universal phenomenon
Mary Parker Follett defines management
as an art of getting things done through
people.
Management is a purposive activity
according to Peter Drucker.
Frederick Taylor defines management as a
multi-purpose organ that manages the
business and manages managers and
manages workers and work
Harold Koontz “Management is an art of
creating an environment in which people
can perform and individuals and can
co-operate towards attainment of group
goals”
Henri Fayol Management is “to manage is
to forecast and to plan, to organize, to
command, to coordinate, and to control”
FUNCTIONS OF MANAGEMENT
Planning
● It is considered to be the central
function of management.
Organizing
● It is the function of management that
involves developing an
organizational structure and
allocating human resources to
ensure the accomplishment of
● This is where the execution of the
plan happens.
Staffing
● It ensures that necessary human
resources are available to execute
plans and achieve the organizational
goals.the process of hiring people
Leading
● the process of motivating and
influencing people for the common
goal of the organization and achieve
organizational objectives for the
common good both organizations
and its members.
Controlling
● Function of management that
involves determining the
organization’s goal or performance
THEORIES OF MANAGEMENT
Scientific Management
Management should use scientific
approaches for efficiency.
● Frederick W. Taylor- Father of
Scientific Management.
Administrative Management
People should work in a clear unity of
direction.
● Henri Fayol- Father of the Modern
Theory of General and Industrial
Management
“management can be taught”
● Division of Work- employees have
complementary skill sets that allow
them to specialize in certain areas.
 ● Unity of Command- employees
should receive orders from only one
superior.
● Centralization- there should be a
balance between decision-making
power.
● Scalar Chain- A chain of authority
exists from the highest
organizational authority to the lowest
ranks.
● Equity- a combination of kindliness
and justice.
● Stability of Tenure- businesses
should try to limit turnover and keep
employees around as they
accumulate knowledge and improve.
● Initiative- employees should share
ideas and be rewarded for
innovative thinking and taking on
new tasks.
● Eprit de Corps- employee morale
matters.
Bureaucratic Theory
Uses standard rules and procedures to
organize itself.
● Max Weber- He created the
bureaucratic theory
● Division of Labor- Jobs are
well-defined and workers become
highly skilled at performing them.
● Formal Rules and Procedures-
Written guidelines, direct
behaviors,the decision in jobs, and
written files
● Impersonality- Rules and
procedures are impartially and
uniformly applied
● Hierarchy and Authority- Authority
and responsibility are well defined
for each position.
● Meritocracy- Workers are selected
and promoted based on ability,
performance, and qualifications.
Human Relations Motivational Theory
It emphasizes praise and teamwork as
motivational factors.
● Elton Mayo- a research belief by
him
Systems Theory
A business is a system, much like a living
organism.
● Ludwig Von Bertalanffy- the
biologist who proposed this theory in
the 1940s
Theory X and Y
A two contrasting theories that explained
how managers' beliefs about what motivates
their people can affect their management
style.
● Douglas McGregor (1960)- a social
psychologist who developed this
theory. (The Human Side of
Enterprise)
● Theory X managers create
situations where workers become
dependent and reluctant.
● Theory Y manager creates
situations where workers respond
with initiative and high performance.
ROLES OF A MANAGER
Role is a set of connected behaviors, rights,
obligations, beliefs, and norms as
conceptualized by people's social situation.
INTERPERSONAL CATEGORY
providing information and ideas
1. Figurehead
- the manager has social, ceremonial,
and legal responsibilities.
2. Leader
- the manager manages the
performance and responsibilities of
everyone in the group.
 3. Liaison
- the managers must communicate
with internal and external contacts.
INFORMATIONAL CATEGORY
processing information
1. Monitor
- the manager regularly seeks out
information related to your
organization and industry, looking for
relevant changes in the
environment.
2. Disseminator
- the manager communicates
potentially useful information to your
colleagues and your team.
3. Spokesperson
- the manager is responsible for
transmitting information about your
organization and its goals to the
people outside it.
DECISIONAL CATEGORY
using information
1. Entrepreneur
- the manager creates and controls
change within the organization
2. Disturbance Handler
- when an organization or team hits
an unexpected roadblock, it's the
manager who must take charge.
3. Resource Allocator
- involves allocating funding, as well
as assigning staff and other
organizational resources.
4. Negotiator
- the manager takes part in, and
direct, important negotiations within
your team, department, or
organization.
SKILLS OF A MANAGER
Robert Katz
● an american social and
organizational psychologist stated
that there are three basic types of
management skills include:
1. Technical Skills
- the skills needed to boost sales,
design different types of products
and services, and market the
services and the products.
2. Conceptual Skills
- It enables the managers to see an
entire concept, analyze and
diagnose a problem, and find
creative solutions
3. Human or Interpersonal Skills
- It enables the managers to make
use of human potential in the
company and motivate the
employees for better results.
● Six Essential Management Skills
1. Planning
● one’s ability to organize activities in
line with set guidelines
2. Communication
● It involves the flow of information
within the organization, whether
formal or informal, verbal, or written.
3. Decision-Making
● This skill increases the chances that
you will choose the most satisfying
alternative possible.
4. Delegation
● The act of passing on work-related
tasks and/or authorities to other
employees or subordinates.
5. Problem-Solving
● It involves identifying a certain
problem or situation and then finding
 the best way to handle the problem
and get the best solution.
6. Motivating
● helps bring forth a desired behavior
or response from the employees or
certain stakeholders.
- Intrinsic motivation: we do things
because we enjoy them not because
we have to.
- Extrinsic motivation: when you are
motivated to perform, achieve, learn,
or do something based on a highly
considered outcome, rather than for
the fun.
VARIOUS FORCES/ELEMENTS OF THE FIRM
Environmental Scanning
the process of identifying and analyzing the
various forces/elements interacting with the
organization
● External Environment- composed
of all the outside factors or
influences that impact the operation
of the business.
Two types of external environment:
Macro
● the most general elements that can
potentially influence the strategic
and long-term decisions of the firm.
1. Demographic conditions-
the statistical study of people
and the human population.
2. Economic conditions- the
overall health of the
economy.
3. Political-Legal conditions-
refers to national or local
laws, international laws, and
rules and regulations
4. Socio-cultural conditions-
the structure and dynamics
of individuals and groups
affect
5. Technological conditions-
skills and ability that are
implemented into production,
the materials and technology
6. World and Ecological
Environment conditions-
how the firms can meet the
needs of their customers
while advancing the well
being of the natural
environment.
Micro
● the factors in the immediate
area of operation affecting its
performance and decision-making
freedom.
● also called a task environment or
competitive environment.
1. Customers- patronize the
organization’s products
and services.
2. Employees- those who
execute the company’s
strategies and are important
for the maintenance of the
company’s stability.
3. Suppliers and Distribution
Channels- manages the
supply chain and
distribution network
4. Competitors- rival firms
within the same industry
5. Shareholders and
Investors- you share both
your risks and profits with
them.
6. Public and Media- public
supports
 ● Internal Environment- those
elements that exist within or inside
the organization
1. Owners and Shareholders-
people who invested in the
company and have property
rights and claims on the
organization.
2. Board of Directors- the
governing body of the
company
3. Employees- the most
important element of an
organization’s internal
environment
4. Organizational Culture- the
collective behavior of
members of an organization
attach
5. Resources of the
Organization
6. Organization’s
Image/Goodwill- the
reputation of an organization
LOCAL AND INTERNATIONAL BUSINESS
ENVIRONMENT OF THE FIRM
Cultural Intelligence
● an individual’s ability to favorably
receive and adjust to an unfamiliar
way of doing things.
Local Business
● The producer and customers of the
firm both reside in the country.
Domestic Trade
● the buyer and seller belong to the
same country
Business Climate
● business operates within a complex
network of political, legal, and
institutional framework conditions
Geert Hofstede (1928)
● He developed a model in which
worldwide differences in culture are
categorized according to five
dimensions.
1. Power Distance – a society accepts or
rejects the unequal distribution of power
among people in organizations
2. Uncertainty Avoidance – society is
uncomfortable with risk, change, and
situational uncertainty.
3. Individualism-Collectivism – a society
emphasizes individual accomplishments
versus collective accomplishments.
4. Masculinity-Femininity – a society
values assertiveness and feelings of
material success versus concern for
relationships.
5. Time Orientation – a society
emphasizes short-term thinking versus
greater concern for the future or long-term
thinking
International Business
● All the economic activities indulged
in cross-border transactions come
under international or external
business.
Globalization
● refers to changes in the dimensions
of the external environment
Components or factors of the global
business environment include:
1. International Legal and Political
System
It governs a complete set of rules,
regulations, institutions, and attitudes.
2. Trade Agreements and Trade Barriers
Between Countries
● Trade Agreement
exists when two or more countries
agree on terms that help them trade
with each other.
● Trade Barriers
are government-induced restrictions
on international trade.
3. Regional Economic Alliance
- It is a treaty that is signed by two or more
countries to encourage the free movement
of goods and services across the borders of
its members.
4. Global Outsourcing
Global outsourcing is enabling business
without barriers in a borderless
world.
Benefits of Globalization Faced by
Business Environment:
1. Access to New Cultures
2. The Spread of Technology and
Innovation
3. Lower Costs for Products
4. Higher Standards of Living Across the
Globe
5. Access to New Markets
6. Access to New Talent
Challenges of Globalization Faced by
Business Environment:
1. International Recruiting
2. Managing Employee Immigration
3. Incurring Tariffs and Export Fees
4. Payroll and Compliance Challenges
5. Loss of Cultural Identity
6. Foreign Worker Exploitation
7. Global Expansion Difficulties.
8. Immigration Challenges and Local Job
Loss
PESTLE and SWOT Analysis
PESTLE Analysis
● the external/bigger picture
● It helps avoid starting projects that
are likely to fail for reasons beyond
control.
● helps spot business or personal
opportunities and gives advanced
warnings of significant threats.
● reveals the direction/shape of
change within the business
environment.
● help businesses break free of
unconscious assumptions when they
enter a new country, region, or
market, see objectives
Political: the influences that a government
may have upon the business environment
Economic: inflation rates, interest rates,
economic growth, demand and supply
trends
Social: the analysis of cultural trends,
demographical determinants, and age
distribution.
Technological: the rate at which the
innovations are occurring
Legal: laws and policies that directly impact
the way your business is run and the
decisions that fuel its momentum.
Environmental: effects in the environment
it operates in
SWOT Analysis
● it can help decision-makers
determine whether a particular
objective must be selected and the
analytical process is repeated.
Strengths and Weaknesses - represents
the internal factors of the SWOT Analysis.
Opportunities and Threats - represents
the external factors of the SWOT Analysis.
Forms of Business Organization
Business Organization
● a collection of people working
together to achieve a common
purpose about their organization’s
mission, vision, goals, and
objectives, sharing a common
organizational culture.
Simple Business Organization
● business organizations with few
departments, with few formal rules
and regulations
Functional Business Organization
● with similar or related specialized
duties that introduce the concept of
delegation of authority to functional
managers.
Divisional Business Organization
● experts or specialists belonging to
different functional departments to
work together on one or more
projects; exhibit dual reporting
relationships. (semi independent)
Profit business organization
● Maintains their organizational
stability through income generation
and profit-making activities.
Non-profit organizations
● without expecting monetary gains or
financial benefits for their endeavors.
Open/flexible business organizations
● one that can adapt and respond
relatively quickly to changes in its
external environment
Team structures
● made up of work teams that work
together to achieve the
organization’s purpose;
Matrix business organizations
● exhibit dual reporting relationships in
which the manager report to two
superiors.
Project business organization
● a business organizational form with
a flexible design, where the
employees continuously work on
projects assigned to them.
Boundaryless business organization
● business organization design
eliminates vertical, horizontal, or
external boundaries, and is
described to be flexible and
unstructured.
Virtual Business Organization
● members usually communicate
online.
Roles of Business Organization in Economy
1. Businesses employ different factors of
production.
2. Developing new products.
3. Investing in the capital and new
technology.
4. Providing goods and services for the
consumer.
5. The principle of creative destruction.
J. Schumacher named the phrase “creative
destruction”. when the inefficient business
went out of business it
enabled a redistribution of resources
towards more efficient uses of resources.
Possible Challenges of Business
● Negative externalities of
production
● Monopoly power
● Short-termism
- Business plays a vital role in the
economic development and wealth
of a country.
- Businesses employ different factors
of Production.
- Economy is a system of making and
trading things of value.
Phase of Economic Development
Economic Growth - It refers to an increase
in the given amount of goods and services
produced by the ountry’s earning.
Economic Development - It is a total
process which includes not only economic
growth or the increase in the given amount
of goods and services produced by the
country’s economy.
ROWSTOW STAGES OF GROWTH
MODEL
- Walt Whitman Rostow
Stage 1: TRADITIONAL SOCIETY
- This stage where a large proportion
of productive resources are devoted
to agriculture.
Stage 2: PRE-CONDITIONS TO
TAKE-OFF
- This stage of economic development
is a result of the industrial revolution.
- A change in society’s attitudes
towards science, risk-taking, and
profit- earning
- External investment and greater
exploitation of natural resources.
-
Stage 3: THE TAKE-OFF
- This stage is characterized by
dynamic economic development.
- large-scale investment in
manufacturing and infrastructure.
Stage 4: DRIVE TO MATURITY
- economic and technical progress
dominates.
- the development of a large
commercial economy and
favorable integration into the
global economy.
Stage 5: AGE OF MASS CONSUMPTION
- most of the society live in prosperity,
and persons living in the society are
offered both abundance and a
multiplicity of choices.
- consumerism and mass
consumption.
Rostow's Stages of Economic Growth
include all of the following
EXCEPT Postmodern Society.
Nature of Planning
Planning - the first management function
and a very essential component of
Management. “the central function of the
management”
CHARACTERISTIC OF PLANNING
1. Planning is goal-oriented.
made to achieve the desired objective of the
business.
2. Planning is looking ahead.
Planning is done for the future.
3. Planning is an intellectual process.
a mental exercise involving creative
thinking, sound judgment,
and imagination.
4. Planning involves choice & decision
making.
involves a choice among various
alternatives. Decision making is an integral
part of planning.
5. Planning is the primary function of
management.
Planning lays the foundation for other
functions of management.
6. Planning is a Continuous Process.
a never-ending function due to the dynamic
business environment.
7. Planning is all Pervasive.
It is required at all levels of management
and in all departments of the enterprise. The
scope of planning may differ from one level
to another.
8. Planning is designed for efficiency.
leads to the accomplishment of objectives at
the minimum possiblecost.
9. Planning is Flexible.
cope with the changes in customer demand,
competition, government policies, etc.
IMPORTANCE OF PLANNING
A. Planning provides direction to all of
the organization’s human
resources
B. Planning is important because it
reduces uncertainty.
C. Minimizing of wastes will result if
there is proper coordination of
activities due to planning.
D. Establishing goals and standards
during planning may be used for
controlling.
Process of Planning
1. Setting Objectives
● the primary step in the process of
planning which specifies the
● objective of the organization a
results which the management
wants to achieve by its operations.
S.M.A.R.T
Specific - precise and exact.
Measurable - quantify desired results.
Attainable - realistically achievable
Relevant - the overall purpose of the
Organization.
Time-bound - a target date for completion.
2. Situation Analysis
● This process analyzes past events,
examine the current conditions, and
attempts to forecast future trend.
3. Scenario Analysis
● the process of analyzing future
events by considering possible
alternatives outcomes.
 4. Development and Analysis of
Alternatives
● Identification of alternative courses
of action that may be undertaken to
achieve predetermined goals.
5. Implementation of the Plan
● The final step in the planning
process.The identified action
steps are now carried out.
6. Monitoring of the Plan
● Monitoring the plan constantly
and taking feedback at regular
intervals is called follow-up.
VISION: It is the futuristic statement of
what the organization wants to become
in the long-term.
MISSION: It describes the fundamental
reason for the existence of the
organization – a purpose behind why
does what it does and why it would like
to become what it envisions to be in the
future
Types of Plan
● Long-range plans – 3 or more
years
● Intermediate plans – 1-2 years
● Short-age plans – 1 year or less
STRATEGIC PLAN
● Long range plans
● Expresses what is to become in
the future.
TACTICAL PLAN
● Intermediate plans
● refer to more specific and
detailed steps on how the
strategy is to be implemented.
A. MARKETING PLAN - controlling an
organizational marketing activity related
to a particular marketing strategy.
B. PRODUCTION PLAN - the quantity
of output a company must produce in
broad terms and by product family
C. FINANCIAL PLAN – summarizes the
current financial situation of the firm,
D. HUMAN RESOURCE PLAN - the
human resource needs of a company
detailed in terms of quantity and quality
E. FACILITIES PLAN - dealings with
facilities and work layouts.
OPERATIONAL PLAN
● short term plan
● Identified specific procedures and
processes required at the lower
level of the organization and
usually focus on the routine task.
PLANS ACCORDING TO VARIED
FREQUENCY OF USE
STANDING PLANS
- used again and again, and recur
repeatedly.
POLICIES – broad guidelines used by
managers to help make decisions and
take actions
PROCEDURE – the exact series of
actions
RULES – requires or forbids a certain
action.
SINGLE-USED PLAN
- courses of action that relatively
unique and are unlikely to be
repeated.
BUDGET PLAN– explains where the
required funds will come from.
PROGRAM PLAN– is designed to
coordinate a large set of activities.
PROJECT PLAN– is usually more
limited in scope than a program
Planning at Different Levels of Firm
Corporate Level
A leader in this case provides a mission
and a vision that is duly needed in the
organization towards accomplishing the
set goals and objectives.
● Those heading up the large
corporate groups such as
finance, human resources,
marketing is under this level
Business Level
On this level, managers focus on
determining how they are going to
compete effectively in the market.
● this level addresses the
questions “who are our direct
competitors”
Functional Level
This level, the managers focus on how
they can facilitate the achievement of
the competitive plan of the business.
Planning Tools and Techniques In Business
Making
Tools – is any physical item that can be
used to achieve a goal
Technique – is a systematic procedure,
formula, or routine by which a task is
accomplished.
1. TECHNIQUES IN ASSESSING THE
ENVIRONMENT
A. Environmental Scanning - interpret
changes in the environment.
B. Competitor intelligence - gathering
information about one’s
competitors.
C. Forecasting - Refers to the process
of making assumptions about what
will happen in the future.
● Quantitative forecasting, a set
of mathematical rules
● Qualitative forecasting, uses
the judgment and opinions of
knowledgeable individuals to
predict outcomes.
D. CONTINGENCY PLANNING
It anticipates that things can go wrong,
that changes in the environment will
eventually occur and crises and
emergencies may occur.
E. BENCHMARKING
Is a technique that makes use of
external comparison to better evaluate
current performance and identify
possible actions for the future.
2. TECHNIQUES IN ALLOCATING
RESOURCES
determine how those goals are going to
be accomplished.
A. Budgeting
a numerical plan for allocating resources
to specific activities.
B. Scheduling
Detailing what activities have to be done
C. Breakeven Analysis
Breakeven analysis is a widely used
resource allocation technique to help
managers determine the breakeven
points.
3. CONTEMPORARY PLANNING
TECHNIQUES
A. Project Management - a one-time
project or set of activities that is done
on time, the completion of its goals
and objectives on the specified date.
B. Scenario Planning - a long-term
version of contingency planning that
identifies several alternative future
scenarios
Nature of Organizations
3 points of view in defining
organization:
1. Organization as a group of people
2. Organization as a system
● system defined as a structural
mechanism composed of
interrelated parts that work
together to undertake a stated
function.
● organization is considered as a
system because it is composed
of people with cooperative
activities
3. Organization as a process
4. Organization as a management
function
● the second function of
management
● the process of arranging people
and other resources to work
together to accomplish
predetermined goals.
● It involves dividing work to be
performed and coordinating
resources to achieve a common
purpose.
IMPORTANCE OF ORGANIZATION
1. Mechanism for management in
action
2. Facilitate management and
operation
3. Effective Delegation
4. Facilitate Growth and
Diversification
5. Provide Optimum Use of
Technology
6. Promote the Development of
Human Resources.
7. Flexibility and Creativity
8. Productivity increment
9. Facilitate Organizational Stability
10. Help reduce employee turn-over
Types of Organizational Structure
Organization Structure
a system made up of tasks to be
accomplished, unite the work of different
individual persons and groups.
Divisional Structure
These types of structures that are
complex and have diverse
operations, numerous product
territories, or geographical regions
customers, and work processes.

Functional Structure
This type of organizational structure
works well for a small organization that
produces only one or a few product or
services.

Matrix Structure
This kind of structure may have
members of different groups
working together to develop a new
product line.

Team Structure
This structure is meant to disrupt the
traditional hierarchy, focusing more on
problem -solving, cooperation, and
giving employees more control.

Network Structure
These structures also describe an
internal structure that focuses
more on open communication and
relationships rather than hierarchy.

Hierarchical Structure
Employees are grouped with every
employee having one clear supervisor.