Organization and Business

What is a BUSINESS ?
 Organization and Business
Business - an organization of people with
varied skills, which uses capital and
talents to produce goods or services,
which can be sold to others of more than
their costs.
- the system through which
economic activity was organized by those
who seek to make profit
What is MANAGEMENT ?
 What is Management ?
Management - is the
effective, efficient and
economical utilization of the
resources of man, money,
materials, machine, methods,
and memoranda.
 What is Management ?
Management is a process.
It is the process of directing and
facilitating the work of people who are
organized for a common purpose. It is
the process of combining the efforts
and resources of individuals with a
common interest to achieve a desired
objective.
 What is Management
Management is a function.
It is the function of getting things
done through the efforts of others. It
is the application of authority and the
assumption of responsibility. It is an
art, the art of handling people.
Management properly applied, gives
individuals in the same organization
the feeling of security, of recognition,
of opportunity and of belonging.
 Management Concept
Management to be effective must be
systematic.
Things be done better by means
of plan of action. The plan is a step by
step outline of what is to be done and
who does what.
 Management Concept
Management to be successful
must be scientific – Scientific
management has done more to
advance and win the status of
mankind today than has any other
single factor.
 Management Concept

Management to be
effective must be
humanistic
 Management Structures
• The primary objective of
management structures is to
facilitate the coordination and
control over the activities of the
company. In any sizable
organization, there should be
delegation of responsibility.
 Management Structures
• Line of responsibility in two ways :

– From the executive to the supervisor

down to the workers under his
jurisdiction and conversely.
– From the workers to those who are in
authority over him
 Management Control
Control as verb is defined by Webster’s new
college dictionary as “to check or
regulate”.. To keep within limits. “ Yet
managerial control carries with it a much
broader interpretation to apply, not only to
check nor command, but also the whip.
Not only to regulate, but also to stimulate.
Ex. Labor cost, equipment failure, etc
 Management Control
Manager should :
- know by heart the reasons why his business
exists
- clear perception of the needs of the business
- must be a good planner and organizer
- should stress on getting the right men for the
right job
- concentrate on how to get the jobs done and
on how to prevent abuse and waste of resources
 Effective Communication System

To the manager, information has four

purposes to serve:

• It must answer the questions what are we

going to do?
• How well are we doing?
• How can we do better?
• Does it serve as an aid to coordination?
 The Manager

The manager as executive

– is the most difficult and
with the highest degree of
responsibility.
Quality of an Effective Manager
1. He studies, analyzes and dissects his job
2. He knows how to delegate the administrative
details of his job
3. He is willing to delegate to and share with its
subordinates the credit of a job well done
4. He trains and develops his men to prepare
them to assume delegated work
5. He knows how to control and plan his time
6. He institutes controls for effective
performance
 Executive Functions

1.To Plan
2.To Organize
3.To Direct
4.To Control
 Executive Functions
Planning – is the job of making
things happen that would
otherwise not occur. It is an
intellectual process, the conscious
determination and direction of
action. Planning is economic and
essential control necessary because
of uncertainty and change.
 Executive Functions
• Plans may be classified as:
–Objectives of the enterprise
–Policies
–Procedures
–Budget
–Programs
 Executive Functions
Organizing - a good organization structure
does not guarantee good performance, but a
poor one makes good performance
impossible, either the caliber of the individual
managers notwithstanding. Improving the
organization will always improve performance.
In short, a good organization structure is
necessary though not sufficient condition
for a good performance.
 Executive Functions
Directing - is guiding and overseeing
subordinates. One can plan, organize and staff,
but until subordinates are taught what to do and
told to get on with the job, nothing gets done.
In directing, two processes enter the picture;
leadership and coordination. Leadership and
coordination are intimately bound together.
Without effective leadership, coordination
cannot be achieved.
 Executive Functions
Leadership - the process by
which an executive
imaginatively directs, guides or
influences the work of others in
choosing and attaining
particular ends.
 Executive Functions

Coordination - is the
process whereby an
executive develops an
orderly pattern of group effort
among the subordinates, and
secures unity of action in the
pursuit of common purpose.
 Executive Functions
How Can Executives Coordinate Efforts in
their Organization?

1.Clarifying authority and

responsibility
2.Careful checking and observation
3.Facilitating effective communication
4.Utilizing leadership skills
 Executive Functions
Control - the process by which
an executive gets the
performance of his
subordinates to correspond as
closely as possible to chosen
plans, orders, objectives or
policies.
 Executive Functions

Policies - are general

statements, which guide or
channel the thinking and
action of members of an
organization.
 Executive Functions
Procedures - are reflection of
policy. It involves the selection
of a course of action and
applied to future activities.
Procedures also detailed the
manner in which a certain
activity must be accomplished.
 Executive Leadership
Executive leadership is the
bridge between objective
and result. Human progress
is the crowning glory of
success. Success is the
result of good management.
 Executive Leadership
Leadership is the ability to motivate
subordinates and other people
toward the achievement of
organizational objectives. The ability
to influence, persuade and motivate,
followers is based largely upon the
perceived power of the leader.
 New Concept of Leadership
To achieve objective, a leader must use the
autocratic style when he is the expert or
when there is an emergency situations
where quick and decisive actions appears
to be necessary.
However, when each of his people is capable
of functioning independently, he must use
the democratic or participatory kind of
leadership
 New Concept of Leadership
The new concept of leadership today
is a matter of service, not control.
The ideal leadership now is to aid
communication and create a
sense of unity, enthusiasm and
cooperation among the members
of a team.
 Delegation of Authority
Delegation of Authority - is the key to
effective management. In order to
have control, the manager must have
authority. Authority is the power of an
administrator to delegate functions to
the next ranking executive, who in turn
transmit it to the employees who are
charged with the actual operations.
 Delegation of Authority
Authority however, should have a
definite limitation to avoid
confusion. The authority vested
upon an executive should preferably
be in writing. It should be
interpreted clearly to avoid
misunderstanding between the boss
and the subordinates.
 Delegation of Authority

Delegation of a task to
subordinate is a
manifestation of faith and
confidence towards the
ability of a subordinate.
Responsibility and Authority
Responsibility – is defined by one
of the famous professors as “Hell”
without authority. There are people
who constantly seek for authority,
but evade responsibility. This is
called buck passing. Authority and
responsibility must go together. But
authority cannot be delegated
completely. It can only be shared.
 Personnel Coordination
The company organization is also dependent upon the special abilities
and skills of personnel to perform the work. This is true particularly
in the establishment of leaders, supervisors and foremen. Two
factors are significant.

1. The need for close supervisions as judged by

the skill of the workers and the difficulty of the
operations.
2. The availability of experienced and trust worthy
personnel capable of acting in supervisory
capacity.
 Personnel Coordination
The shortage of people who are capable of leadership and supervision
of other is one of the biggest difficulties encountered by companies,
and this may be due to :

1. Lack of incentive in the supervisory positions.

2. Inadequate or ineffective recruitment of those
possessing potential leadership ability
3. Insufficient training of present and potential
supervisory personnel
 Scientific Management
1. Division of labor and
specialization
2. Unity of command and
centralization of decision making
3. One way authority
4. Narrow span of control
Functional Staff Responsibilities

1.Incentive Standard
2.Methods Analysis
3.Quality Control
4.Production Control
5.Material Handling
To be effective Executive, Engineers has five habits in mind.

1. They know where there time goes. They work

systematically at managing the little of their time.
2. They focus on outward contribution. They gear their
efforts to results rather than to work.
3. They build on strengths. They do not build on
weakness. They do not start out with the things they
cannot do.
4. They concentrate on few major areas where superior
performance will produce outstanding results.
5. Engineers finally make effective decisions.
Principle Management – by Matsushita

5. We did not allow factions to form within our

company
6. We regarded the company as a public
institution
7. We followed a policy of open management
8. We worked towards a system of
management by all employees
Principle Management – by Matsushita

1.We have a good staff

2.Our policies were clear
3.We upheld an ideal to be striven
for
4.Our chosen field of business was
appropriate at the time
 Management Philosophies –
by Matsushita

1.A GOAL
2.AN IDEAL
3.A VISION
 Five Key Points to Success in Enterprise
Management

• To have a clear management philosophy, clear

goals and definite ideal
• To manage a company with the full realization that
every enterprise is a public enterprise
• To practice open management
• To collect the wisdom of the many
• To try your best to acquire an unflappable and
supremely adaptable mind to enable you to see
things as they actually are without clinging to
preconceived notions.
 Cultivate Human Resources
1. People-first business philosophy
2. Every employee must learn to
think like a business manager, and
every employee must share his
knowledge with others while striving
to explore new and better ways to
perform his duties. This is
management by collective wisdom
 Cultivate Human Resources

3. The company is looked upon

as a lifetime education
center or a training center for
life. (Not only salary,
prestigious position)
 Directing People on the Job
What is an Order?
Order - is a specific message
by a leader to a follower for the
purpose of influencing the
follower to take desired action.
 Directing People on the Job
• When to use Verbal Orders?
– Simple order and the message clearly
heard
– When privacy is important
– When the follower is intelligent and
reliable
– When a demonstration is involved
 Directing People on the Job
• When to use Written Orders?
– Precise figures or complicated details are
involved
– When orders must be passed on to
someone else
– When the workers involved are slow to
understand and forgetful
– When you want to hold the receiver strictly
accountable
 Directing People on the Job
• When to use Written Orders?
– When particular sequence must be followed
exactly
– When notice board can be suitably used
– When you are quoting general instructions
on higher authority
– When a record is written, every order is a
request, a suggestion, asking for volunteers
and a direct order.
 Directing People on the Job
• Request – here the leader ask the
follower to act as the leader wishes.
– An older person
– Welcomes responsibility
– Interested in advancement
– Experienced personnel with good morale
– Initiative you want to develop
 Directing People on the Job
• Asking for Volunteers
–Jobs that are dangerous or
disagreeable
–For extra heavy work
–Job requires overtime
–Skilled worker to do a special
unskilled job
 Directing People on the Job
• Direct Order or Command
– In case of danger or extreme urgency
– When haste is important
– With lazy and indifferent workers or
chronic objectors
– Careless workers
– When all other methods have failed
repeatedly
 Directing People on the Job
• Guiding principles on how to phrase
orders effectively:
– CLEAR
– COMPLETE
– CONCISE
– ACCEPTABLE
 Directing People on the Job
• How To Give Effective Orders
– Clarify your objective
– Obtain favorable attention
– Make it simple and specific
– Phrase it tactfully for best results
– Explain why it should be done
your way
 Directing People on the Job
• How To Give Effective Orders
– Learn how much information and
guidance he needs
– Let him have it
– Inspire his confidence in you and
the correctness of your order
– Note his readiness to act
– Give him faith in his ability to carry
it out