Org. Management 12 q2 F

LEARNING MODULE
ORGANIZATION
AND
MANAGEMENT
The Notre Dame of Masiag, Inc.
S.Y. 2021-2022
Grade 12, Quarter 2
Name __________________________________________
Grade &Section __ABM 12- ST. EUGENE DE MAZENOD ____
Subject Teacher __________JOY C. LOBIANO_____________
Class Adviser _________THELMA S. LANADO____________
FOR PRIVATE USE

in the Notre Dame of Masiag, Inc.
Strictly not for Public Circulation
Quarter 2
ORGANIZATION AND MANAGEMENT
Introductory Part
Overview & References
The course Organization and Management and this module reflect those changes
and will help you prepare to become ideal managers who will be ready to face the
world’s varying challenges.
This management course are described as an introduction to the realm of

management, covering many topics that are discussed quickly—without delving too
deeply into each topic—to provide the basic information that could guide you to succeed
in your future management tasks. The authors of this textbook and your classroom
teachers act as your leaders and partners to help you understand in this preparatory
course what it would take for you to be successful as future managers of
organizations.
Here are the references that you will find useful for this module:
http://www.businessdictionary.com/definition/trigger-pointhtml#ixzz3RUccexQd
http://www.businessdictionary.com/ definition/organizational-
design.html#ixzz3RUnVe6OL
https://www.managementstudyhq.com/functions-of-management.html
Definition of Terms
(ICTM) – the management of information and communication technology that collects, organizes,
and distributes data to be used in the organization’s decision-making functions.
Communication – the exchange of information and understanding.
Compensation/wages – all forms of pay given by employers to their employees for the performance
of their jobs.
Control Methods – techniques used for measuring an organization’s financial stability, efficiency,
effectiveness, production, output, and organization members’ attitudes and morale.
Controlling – a management function involves ensuring the work performance of the
organization’s members are aligned with the organization’s values and standards through
monitoring, comparing, and correcting their actions.
Development – refers to learning given by organizations to its employees that is geared toward the
individual’s acquisition and expansion of his or her skills in preparation for future job
appointments and other responsibilities.
E-business – electronic business which involves business to business (B2B) and business to
customer (B2C) transactions.
Entrepreneurial ventures – organizations that persistently pursue opportunities and are characterized
by creative, innovative activities that have service, growth, and profitability as their principal
goals.
Entrepreneurship – innovative, creative, risk-taking, growth- oriented behavior that brings new
opportunities for individuals or organizations to start new businesses and to produce new
products or services that are beneficial to society.
External Recruitment – refers to recruitment from outside sources.
Financial management – the management and custody of the organization’s funds, seeing to it
that funds are effectively and efficiently utilized in order to provide for all the needs of the
organization’s various operating units.
Financial Planning – the process of setting financial objectives and determining what should be
done to accomplish them.
Human resource management – the process of attracting, training, developing, and maintaining an
excellent work force.
Information and communication technology management
Internal Recruitment – refers to recruitment done within the organization.
Interview – the determining of an applicant’s qualifications in order to gauge his or her ability to do
the job.
Job – a specific piece of work done for a certain fee.
Job Analysis – the process of obtaining information about jobs needed to achieve the
organization’s goals/objectives.
Macroeconomic Environment – business environment that includes or considers economic
aggregates such as national income, total volume of savings, and money supply.
Management Control – control that makes use of balance sheets, income statements, cash flow
statements to analyze and examine financial statements in order to determine the company’s
financial soundness and viability, as well as financial ratios to determine the organization’s
stability.
Marketing management – the process of managerial planning and carrying out of the conception,
pricing, promotion, and distribution of ideas, goods, and services in order to bring about
exchanges to satisfy individual and organizational goals (as defined by the American
Marketing Association).
Motivation – refers to psychological processes that arouse and direct goal-directed behavior.
Non-quantitive Control Methods – methods which make use of tools such as inspections, reports,
direct supervision, performance evaluation, and on-the-spot checking to accomplish goals.
Non-verbal communication – refers to communication through body movements, gestures, facial
expressions, eye contact, or body contact.
Operations management – the study of how goods and services are produced in organizations.
Performance evaluation – a process undertaken by the organization, usually done once a year,
designed to measure employees’ work performance.
Quantitive Control Methods – methods which make use of data and different tools expressed in
members for monitoring and controlling production output.
Recruitment – a set of activities designed to attract qualified applicants for job position vacancies in an
organization.
Selection – the process of choosing individuals who have the required qualifications to fill present and
expected job openings.
Small business – a business that has fewer than 100 to 500 workers (depending on the prevailing
commercial law in a particular country), independently owned, operated, and financed; not
always entrepreneurial in orientation and does not dominate its industry; capital is low but
capable of producing goods or rendering services designed to satisfy particular needs of
customers.
Staffing – refers to filling in all organizational job positions.
Standard – any established measure of extent quantity, quality, or value.
Strategic Control – a systematic monitoring at control points in strategic plans that may tend to
change in the organization’s strategies.
Systems approach to staffing – is the step-by-step way of filling job positions in organizations,
considering variables such as numbers and kinds of human resources needed, open managerial
and no managerial positions, potential successors to open job positions, etc.
Theory – a body of fundamental principles verifiable by experiment or observation.
Training – refers to learning given by organizations to its employees that concentrates on short-term
job performance and acquisition or improvement of job-related skills.
Value chain – the actual sequence of activities that results in the production of goods and services
that have value for customers.
Verbal communication – refers to oral and written communication.
Lessons and Coverage
Lesson Topic/Title You’ll learn to…. Estimat
No. ed
Time
Chapter 5: 1. Definition and  Apply organization theories for
Staffing Nature of Staffing effective business management
2. Recruitment and  Discuss the concept and nature of 5
Selection staffing weeks
3. Compensation/Wages  Analyze the process of recruiting,
and Performance selecting and training employees
Evaluation/Appraisal  Examine the functions and
importance of compensation,
wages and performance
evaluation, appraisal, reward
system, employee relations and
movement
Chapter 6: 1. Motivation  Analyze motivation, leadership,
Leading 2. Communication and communication work in an
organization
 Analyze the role of 1 week
communication in directing people
within the organization.
Chapter 7: 1. Apply the  Apply the concept and nature of
Controlling concept, Nature different control methods and
of Different techniques in accounting and 1 week
Control Methods marketing
and Techniques
in Accounting
and Marketing
Chapter 8: 1. The Different  Explain the nature and role in the
Introductio Functional Areas firm of the following functional
n To The of Management areas of management:
Different a. Human Resource Management
Functional b. Marketing Management 1 week
Areas Of c. Operations Management
Managemen d. Financial Management
t e. Material and Procurement
Management
f. Office Management
g. Information & Communication
Technology Management
Chapter 9: 1. Small Business  Explain the steps and importance
Special Management and of starting a family business 1 week
Topics in Entrepreneurship
Managem
ent
Expected Skills
To do well in this module, you need to remember and do the following:
1. Read all instructions carefully and follow them diligently.

2. Strive to learn from this module by studying the inputs and answering all online
activities.
3. Having a checklist of tasks to do can help you.
4. When in doubt or difficulty, always consult your teacher
5. Manage your time properly. Perform tasks and submit outputs promptly.
6. Take down important notes. These maybe useful as you take the succeeding
module.
Module Map
ORGANIZATION AND MANAGEMENT
Staffing
Leading
Controlling
Introduction To The Different Functional

Areas Of Management
Special Topics in Management

CHAPTER 5:
STAFFING
Managers often consider human resources as their organization’s most important resource. Very few
administrators would argue with the fact that human resources are very important for the efficient and effective
operation of a company. To emphasize their importance, human resources are also called human capital,
intellectual assets, or management or company talents. These terms imply that human resources are the drivers of
the organization’s performance; hence, staffing is a crucial function of managers.
In this chapter, we define the concept of staffing and discuss the various processes involved in
systematic staffing.
Lesson Topic/Title You’ll learn to…. Estimated

No. Time
Chapter 5: 1. Definition and  Apply organization theories for effective
Staffing Nature of business management
Staffing  Discuss the concept and nature of 5 weeks
2. Recruitment and staffing
Selection  Analyze the process of recruiting,
3. Compensation/ selecting and training employees
Wages and  Examine the functions and importance
Performance of compensation, wages and
Evaluation/Appr performance evaluation, appraisal,
aisal reward system, employee relations and
movement
Activity 1– PRE-ASSESSMENT 1
Let’s find out how much you already know about this module. Please answer all
items. After taking this short test, you will see your score. Take note of the items that you
were not able to correctly answer and look for the right answer as you go through this
module. Write your answer in your own provided sheets. Entitle your work as Q2-
Chapter 5 – Activity 1 – Pre-Assessment.
Direction: Read and understand the given statement below, identify the process of staffing.
Write your answer in your own provided sheets.
1. This can be resignation which is voluntary separation or termination which is
involuntary separation.
2. This is the pooling of job candidates to match the human resource plan of the
organization.
3. The objective of this step is to ensure that the personnel needs of the organization are
met and sustained.
4. This aims to improve the skills of employees for them to be more efficient where it
intends to educate the employees for additional responsibility and for promotion.
5. This step evaluates job applicants which are among the best through a thorough
analysis of their qualifications by interviews, tests, reference checks and physical
examination.
6. The chosen applicants are introduced to their immediate superiors, officemates and
make them aware on the policies of the company.
7. This is to evaluate an individual’s job performance against job standards such as
responsibilities, accountabilities and measurements.
8. This is a movement to a different job with similar pay and responsibility.
9. This is the advancement in position with higher pay and responsibility.
10. This is a movement to a lower-status position. In some cases, the employee is given
an impressive title, but with less responsibility.
Lesson 5 . 1
DEFINITION AND NATURE OF STAFFING
Employees or people are the most important asset of business organizations. Thus, all
business organizations focused their attention and concerned on getting and retaining
employees. The efficiency and effectiveness of an organization significantly depends on the
quality of its personnel and since it is one of the primary functions of management to achieve
qualified and trained people to fill various positions, staffing has been recognized as a distinct
function of management.
Thus, this self-learning activity sheet guides comprehend the importance of getting
the right person to fit in the right job and capacitate themselves on the efficiency and
effectiveness of employees in the organization.
ACTIVITY 2: WORD MAPPING!
Direction: This is a word mapping activity. Read and analyze this question: What comes into
your mind upon hearing the word ‘Staffing’? What are the words you can associate to it?
Use a graphic organizer to present your answer. Write your answer in your own provided
sheets. Entitle your work as Q2 – Lesson 5.1 – Activity 2 – WORD MAPPING.
My Graphic Organizer
ACTIVITY 3: PICTURE ANALYSIS!
Direction: Look at the given pictures below and use these to answer the following process
questions given below. Entitle your work as Q1 – Lesson 5.1 – Activity 3 – PICTURE
ANALYSIS
PROCESS QUESTIONS:
1. Based from the pictures above, how do you define staffing?

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2. Why is it important to have a proper choice of employees?

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ACTIVITY 4: LET’S DISCUSS
DEFINITION AND NATURE OF STAFFFING
Staffing, according to Dyck and Neubert (2012), is the Human Resource function of
identifying, attracting, hiring, and retaining people with the necessary qualifications to fill the
responsibilities of current and future jobs in the organization. The number of managerial
personnel or non-managerial human resources needed by an organization depends upon the
size and complexity of its operations, its plans for branching out or increasing products, and
turnover rates of both types of human resources, among others. Besides considering their
number, the qualifications for the individual positions must be identified, so that the best-
suited individuals for the job positions may be selected for hiring.
THE MANAGEMENT AND NON-MANAGERIAL HUMAN RESOURCES

INVENTORY
Awareness of the management potential within an organization can be accomplished with
the use of an inventory chart, also called management succession/replacement chart. This chart
is similar to the general organization chart used by the company but limited to managerial
positions and the names of potential successors (promotable, satisfactory but not promotable,
dismissed, etc.). Recruitment by external means may follow if there are no qualified successors.
The need for non-managerial human resources may be ascertained by the use of a general
organization chart to identify vacant job positions that need to be filled or by direct reports
from department/unit heads or supervisors. Managers need not make detailed succession
planning, as these job positions are less sensitive. Suggestions for internal replacements or
successors for vacant non-managerial positions are usually done as the need arises. External
recruitment also follows if no one within the organization is fitted for the job position that was
declared vacant. Staffing has two main components: recruitment and selection. The process of
identifying and attracting the people with the necessary qualifications is called recruitment
while selection is choosing who to hire.
Staffing steps include:

1. the identifying of job position vacancies, job requirements, as well as work force
requirements;
2. checking internal environment of the organization for human resources;
3. external recruiting;
4. selecting those with essential qualifications for the job opening;
5. placing the selected applicant;
6. promoting;
7. evaluating performance;
8. planning of employee’s career;
9. training of human resources; and
10.compensating human resources
EXTERNAL AND INTERNAL FORCES AFFECTING PRESENT AND FUTURE NEEDS FOR
HUMAN RESOURCES
Present and future needs for managers and other human resources are affected by both
external and internal forces.
External forces include the following:
1. economic
2. technological
3. social
4. political
5. legal factors
For example, economic progress in a particular country may bring about increased needs
and wants among people, resulting, in turn, in increased demand for certain products, followed by
the expansion of the company and its work- force, as well as increased demand for managers.
Information explosion coming from the internet, from business publications, or from the labor
department of countries may give either encouraging or discouraging long-term trends in the
world labor market, thus causing an increase or a decrease in demand for managers and other
human resources.
The firm’s goal and objectives, technology, the types of work that have to be done, salary
scales, and the kinds of people employed by the company are among the internal factors or
forces that affect staffing. For example: salary scales offered by a company may not be high
enough to attract personnel who are really qualified for the job. Also, this may encourage fast
managerial and labor turnover.
THE STAFFING PROCESS
1. Human Resource Planning
2. Recruitment
3. Selection
4. Orientation/ Introduction
5. Training and Development
6. Performance Appraisal
7. Transfer, Promotion and Demotion
8. Separation
ACTIVITY 5: LET’S LEARN MORE

DIRECTION: Read and analyze the statement and answer the process questions below. Write
your answer in your own provided sheets. Entitle your work as Q1 – Lesson 5.1 – Activity 5 –
Let’s Work and Learn.
Companies of today have several experiences in terms of managing people. Some were
retained and some left their organization. Some companies lose employees simply because they
have been placed in the wrong job and who might have found more satisfaction in the other
companies. Employees come and go, that's why managers gradually look at the plans and
policies.
PROCESS QUESTIONS:
1. If you are the human resource manager, which do you think is the critical part of the
staffing process to scrutinize? Why?
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2. Do you believe that employees are the important asset of a company? Why? How?
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ACTIVITY 6: MY IDEA!
DIRECTION: Read and answer the following process questions below. Write your
answer in your own provided sheets. Entitle your work as Q2 – Lesson 5.1 – Activity 6 – My
Idea.
PROCESS QUESTIONS:
1. What is the significance of staffing functions?

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2. How does staffing function related to organizing?

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ACTIVITY 7: LET’S DO THIS…

DIRECTION: In five sentences, answer the question below. Write your answer in your own
provided sheets. Entitle your work as Q2 – Lesson 5.1 – Activity 7 – Let’s Do This.
1. As a Damean, how could you relate the core values NOTRE DAME in staffing?
ACTIVITY 8: UNDERSTAND ME!
DIRECTION: Analyze and answer the question below. Write your answer in your own
provided sheets. Entitle your work as Q2 – Lesson 5.1 – Activity 8 – Understand Me.
1. Based on your experiences or observations, how is staffing used in your family, in school
or in the community?
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Lesson 5 . 2
RECRUITMENT AND SELECTION
The process of recruitment cost both time and money such that management should be
able to attract the qualified candidates within a reasonable period of time. This topic enables the
learners to enrich their knowledge on how to recruitment process takes place.
This self-learning activity sheet leads the learners to determine the importance of recruitment
and analyze contemporary issues of recruiting employees.
Selection is the second process of staffing which described as a negative process in
contrast with the positive process of recruitment. The basic purpose of the selection process is
choosing right type of candidates to man various positions in the organization. For this purpose,
well-organized selection policies involve critical decision of a manager. A candidate undergoes
step and at each step more and more information is obtained about the right candidate to fill in
the vacancy
This self-learning activity sheet leads learners to recognize the recruitment and selection
process and will give an avenue to solve simple case let about the process of recruitment and
selection.
ACTIVITY 1: MY IDEAS ABOUT RECRUITMENT!
Direction: Read and follow carefully the given instruction. This is to check how thorough
your understanding about recruitment. The table below is provided. Write your answer in
your own provided sheets. Entitle your work as Q2 – Lesson 5.2 – Activity 1 – MY IDEAS
ABOUT RECRUITMENT.
Recruitment In what ways they attract How they attract

Agency/Compa applicants to apply? applicants?
ny
Ex. Pepsi Cola Products Posting vacancy/vacancies in A well promising
Phils. Inc. social media; placing streamer compensation package,
highway or posting in benefits and privileges.
billboards; radio advertisement;
1.
2.
3.
RECRUITMENT AND SELECTION
In the event of a job opening, administrators must be careful when recruiting and
choosing who to bring into the organization. They must see to it that their new recruit possesses
the knowledge and skills needed to be successful in helping their company achieve their set
goals and objectives and that he/ she is suited for the job position and the job design.
Recruitment may either be external or internal. In external recruitment, outside sources

are considered in the process of locating potential individuals who might want to join the
organization and encouraging them to apply for actual or anticipated job vacancies. Unsolicited
applications and referrals from employment agencies and schools are examples of sources
outside the company from which management could select an applicant who best fits the job
opening.
In internal recruitment, filling job vacancies can be done through promotions or transfer
of employees who are already part of the organization. In other words, recruitment is within the
organization.
METHODS OF EXTERNAL AND INTERNAL RECRUITMENT

External recruitment methods include:
a. Advertisements – through websites, newspapers, trade journals, radio, television, billboards,

posters, and e-mails among others.
b. Unsolicited applications – received by employers from individuals who may or may not
be qualified for the job openings.
c. Internet recruiting – independent job boards on the Web commonly used by job seekers
and recruiters to gather and disseminate job opening information.
d. Employee referrals – are recommendations from the organization’s present employees
who usually refer friends and relatives who they think are qualified for the job.
e. Executive search firms – also known as “head hunters;” help employers find the right
person for a job. Such firms seek out candidates with qualifications that match the
requirements of the job openings that their client company hopes to fill.
f. Educational institutions – good sources of young applicants or new graduates who have
formal training but with very little work experience. For technical and managerial
positions, schools may refer some of their alumni who may have the necessary
qualifications needed for the said job positions.
g. Professional associations – may offer placement services to their members who seek
employment. Employers may make use of the listings that they publish in their journals
regarding members who are available for possible recruitment or hiring.
h. Labor unions – possible sources of applicants for blue-collar and professional jobs.
i. Public and private employment agencies – may also be good sources of applicants for
different types of job vacancies for they usually offer free services while private ones
charge fees from both the job applicant and the employers soliciting referrals from them.
As mentioned earlier, internal recruitment is done within the organization. Most

managers prefer to follow a policy of filling job openings through promotions and transfer. In
this way, they lessen the chances of losing the organization’s top performers. Recruitment may
be done by using company bulletin boards, company intranet, company newsletters, and
recommendations from department or unit heads, among others.
Both external and internal recruitment have their own advantages and disadvantages.
External Recruitment Advantages
 Advertising and recruiting through the Internet reach a large number of possible
applicants, thus, increasing the possibility of being able to recruit applicants suited for the
job.
 Applicants who submit applications and resumes through their own initiative are believed
to be better potential employees because they are serious about getting the job.
 Employee referrals from outside sources are believed to be high quality applicants
because employees are generally hesitant to recommend persons who are not qualified for
job openings.
 Executive search firms usually refer highly qualified applicants from outside sources
because they make an effort to check applicants’ qualifications before recommending
them to client firms who pay for their services.
 Educational institutions know the capabilities and qualifications of their graduates, hence,
increasing the chances of their ability to refer qualified applicants to potential employers.
External Recruitment Disadvantages
 The cost and time required by external recruitment are the typical disadvantages of using
this recruitment method. Advertising job openings and the orientation and training of newly
hired employees from outside sources, as well as sorting out large volumes of solicited or
unsolicited job applications present challenges in budgeting time and money.
 Another disadvantage of external recruitment is the possibility of practicing bias or
entertaining self-serving motives in the referral of friends and relatives by current
employees and in the recommendation of private employment agencies of job applicants.
Internal Recruitment Advantages
 Less expenses are required for internal recruitment advertising; newsletters, bulletin
boards, and other forms of internal communication may disseminate information to
current employees interested to apply for job openings within the company.
 Training and orientation of newly promoted or transferred current employees are less
expensive and do not take too much time since they are already familiar with company
policies.
 The process of recruitment and selection is faster because the candidate for transfer or
promotion is already part of the organization.
Internal Recruitment Disadvantages
 The number of applicants to choose from is limited.

 Favoritism may influence a manager to recommend a current employee for promotion to a
higher position.
 It may result in jealousy among other employees who were not considered for the
position. Some may also accuse the management of bias for choosing an employee who
is perceived to be less qualified for the job opening.
SELECTION
In many companies, selection is continuous because of fast turnover, resulting in

vacancies that have to be filled. Another reason for this is the review of applicants on the waiting
list. The selection process typically includes the following steps:
1. Establishing the selection criteria – Selecting human resources in an organization requires

understanding of the nature and purpose of the job position which has to be filled. Job
design must be based on the objective analysis of position requirements and must meet both
organizational and individual needs. Skills must also be considered depending on the job
position and its position in the organizational hierarchy.
2. Requesting applicants to complete the application form – Application forms must be
completed because these provide the needed information about the applicant.
Management will find it easier to decide whether an applicant meets the minimum
requirements for experience, education, etc., if the application forms are accurately filled
out by the applicant.
3. Screening by listing applicants who seem to meet the set criteria – This involves the
preparation of a shortlist of applicants who meet the minimum requirements of the job
position to be filled. It is done to avoid wasting of time by conducting interviews with
applicants who do not meet the set criteria for the job opening.
4. Screening interview to identify more promising applicants – Here, a shortlist of
applicants is prepared. Included in the list are the applicants who will be asked to undergo
formal interview by the supervisor/ manager; applicants who are deemed to be the most
fitted for the job opening belong to this shorter list.
5. Interview by the supervisor/manager or panel interviewers – Through formal interview of
the most promising applicants, other characteristics of the applicants may be revealed or
observed by the supervisor/manager or panel interviewers. Such characteristics include
the applicants’ self-confidence, positive or negative self-esteem, honesty, ability to relate
well with others, and positive or negative life experiences which may affect his or her job
performance, among others. Interviewers must be trained so that they will know what to
look for.
6. Verifying information provided by the applicant – To make sure that the applicant has not
given false information about himself or herself, verification is necessary. Background
checking must also be done to avoid the hiring of applicants with criminal record and to
ascertain that he or she has good moral character.
7. Requesting the applicant to undergo psychological and physical examination –
Having a healthy mind and a healthy body is important for good job performance. Hence,
applicants must be requested to undergo psychological and physical examinations prior to
hiring.
8. Informing the applicant that he or she has been chosen for the position applied for –
Informing the applicant may be done verbally or in writing by the managers who give the
final decision regarding the applicant’s hiring. Final instructions regarding the company’s
rules and regulations for hiring an applicant must be given in this step.
Step 1 – Determining a need

Job analysis
Step 2 – Application search and selection

a. Recruitment
b. Screening and selection
c. Interviews
Step 3 – Decision-making process

a. Making a decision
b. Notification and employment offer
Step 4 – Adaptation to the workplace

Orientation
Interviews are important in determining the qualifications of an applicant and gauging his
or her ability to perform a job. Interviews may come in different forms.
Types of Job Interviews
a. Structured interview – the interviewer asks the applicant to answer a set of prepared
questions—situational, job knowledge, job simulation, and worker requirement questions
b. Unstructured interview – the interviewer has no interview guide and may ask questions
freely
c. One-on-one interview – one interviewer is assigned to interview the applicant
d. Panel interview – several interviewers or a panel interviewer may con- duct the
interview of applicants; three to five interviewers take turns in asking questions.
Similarly, there are different kinds of employment tests administered to measure or test
an applicant’s specific skill or capacity.
Types of Employment Tests
a. Intelligence test – designed to measure the applicant’s mental capacity; tests his or her
cognitive capacity, speed of thinking, and ability to see relationships in problematic
situations
b. Proficiency and aptitude tests – tests his or her present skills and potential for learning
other skills
c. Personality tests – designed to reveal the applicant’s personal characteristics and ability
to relate with others
d. Vocational tests – tests that show the occupation best suited to an applicant.
The Selection Process
1. Preliminary Interview 5. Physical and Mental Examination

2. Application form 6. Hiring
3. Employment Test 7. Orientation/Induction
4. Selection by Department Head
Limitation of the Selection Process
In reality, there is no one perfect way to select a firm’s human resources. Predicting
performance is difficult as there is a difference between what individuals can do at present and
what they will do in the future. This is because a persons’ needs and wants change, and so do an
organization’s climate and environment. The fact that many selection approaches and tests have
been devised is enough proof that management experts are still in search of what could be done
to improve the present selection process.

DIRECTION: From the choices below, which is the correct step of the recruitment
procedure? Use your own provided sheets to justify your answer. Entitle your work as Q2 –
Lesson 5.2 – Activity 3 – Let’s Work and Learn.
A B C
1. Requisition of New 1. Study the different jobs 1. Actual Recruitment of
Employee and do job analysis Applicants
2. Actual Recruitment of 2. Requisition of New 2. Study the different jobs
applicants Employee and do job analysis
3. Study the different jobs 3. Actual Recruitment of 3. Requisition of New
and do job analysis applicants Employee
PROCESS QUESTIONS:
1. Justify the letter of your answer?

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DIRECTION: Read and analyze the situation below. Write your answer in your own
provided sheets. Entitle your work as Q2 – Lesson 5.2 – Activity 4 – My Idea.
Mrs. Malou Pitt is the auditor of MugTaza Company for almost 10 years. She rendered
resignation because she decided to be with her family abroad. Ms. Teeyagha Khoo, the finance
manager was full of regrets because Mrs. Pitt’s decision since she was one of the most
dedicated and superb employees of the company. Mr. Khoo accepted her resignation letter and
forwarded it to Atty. Kizze Magalang, the Human Resource Manager. Hence, the company will
be on the process of recruiting applicants to fill in the position of Mrs. Pitt.
In this scenario, who will fill up the Personnel Requisition Form?
a. Atty. Kizze Magalang, the Human Resource Manager

b. Ms. Teeyagha Khoo, the Finance Manager
Justify your answer:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_______________________________________________________________________.

1. As a Damean, how could you relate the core values NOTRE DAME in recruitment
and selection?
ACTIVITY 6: UNDERSTAND and MATTCH ME!

DIRECTION: Match the selection process and its definition. Write your answer in your
own provided sheets. Entitle your work as Q2 – Lesson 5.1 – Activity 6 – Understand and
Match Me.
SELECTION PROCESS DEFINITION

1. The purpose of this process are to find out how qualified the
applicant for the vacancy; to give the applicant the information
needs in order to decide to take the job if offered to him and to
create goodwill for the company.
2. A form used as a basis for eliminating applicants with un-
favourable personal data, match the qualifications of the applicant
with the job requirements indicated in the job description and job
specification.
3. The purpose of this is to measure the applicant’s abilities which
cannot gauged through interviews. These are intelligence test,
aptitude test, proficiency test and personality test.
4. This is the “Rule of Three” in the final choice of applicants for the
job hen select the best among the three.
5. This process is to ascertain the applicant’s physical capabilities to
prevent the hiring of liability employees which may result in
absenteeism, hospitalization and etc.
6. When a candidate has passed all the selection requirements and is
chosen, he is finally sent to the personnel department and marked
as ‘h _ _ _ d’.
7. This is to orient new employees on company policies, rules and
regulations, and briefed about the job.
Lesson 5 . 3
COMPENSATION/WAGES AND PERFORMANCE
EVALUATION/APPRAISAL
A responsible employer or business owner knows how to attract and keep employees by
providing the right compensation and benefit package. They must recognize that employees are
part of their success.
A most promising and attractive employee’s compensation and benefits can lead to attract
top talented individuals, increased employee’s motivation, boost employees loyal, and increase
productivity and profitability.
Organizations that seek to maintain and improve its competitive advantage must be able
to manage the behavior of its employees to optimize results. Performance appraisal of employee
is one of the important aspects of every organization because individual performance is the
building block of organization success and growth. Organizations must control and direct the
efforts of their people towards the achievement of its goals and objectives. Certainly, people in
the organization are the key ingredients for success and growth of a company. Thus, managing
people’s performance is extremely important.
ACTIVITY 1: MY IDEAS!
Direction: Read and follow carefully the given instruction. Explain the following
terminologies given below.The table below is provided. Write your answer in your own
provided sheets. Entitle your work as Q2 – Lesson 5.3 – Activity 1 – MY IDEAS.
TERMINOLOGIEST EXPLANATION
Monthly-paid
employees
Parental Leave
Wage
Thirteen-Month Pay
Daily-paid employees
Overtime Pay
Maternity Leave
Wage Rationalization
Act
Regional Tripartite
Wages and Productivity
Boards
COMPENSATION/WAGES AND PERFORMANCE EVALUATION
Compensation/wages and performance evaluation are related to each other because the
employees’ excellent or poor performance also determines the compensation given to them,
after considering other internal and external factors like the actual worth of the job,
compensation strategy of the organization, conditions of the labor market, cost of living, and
area wage rates, among others. Compensation may come in different forms. It may be direct,
indirect, or nonfinancial.
TYPES OF COMPENSATION
1. Direct compensation – includes workers’ salaries, incentive pays, bonuses, and
commissions
2. Indirect compensation – includes benefits given by employers other than financial
remunerations; for example: travel, educational and health benefits, and others
3. Nonfinancial compensation – includes recognition programs, being assigned to do
rewarding jobs, or enjoying management support, ideal work environment, and
convenient work hours
CONNECTING COMPENSATION TO ORGANIZATIONAL OBJECTIVES
Worker compensation/wages had tremendously changed in the 21 st century due to

increased market competitions (both local and global), required skills from workers, and
changes in technology, among others. Along with these, organizations’ pay philosophies have
also changed. Instead of paying employees based mainly on their job positions or titles, they are
now given pay according to their individual competencies or according to how much they could
contribute or have contributed to their company’s success. Wage experts now prepare
compensation packages that create value for both the organization and its employees.
FIGURE 5.6 Pay equity is among the important

considerations in preparing compensation packages.
As illustrated in this diagram, pay equity is based on
EFFORT PA
the idea that an employee’s pay must be commensurate to
his or her effort.
The daily minimum wage rate differs in relation to factors such as geographical area and industry
or sector. The National Wages and Productivity Commission is the government agency concerned with
minimum wage determination in the country.
Compensation: A Motivational Factor for Employees

Compensation pay represents a reward that an employee receives for good performance
that contributes to the company’s success. In relation to this, the following must be considered:
a. Pay Equity – related to fairness; the Equity Theory is a motivation theory focusing on
employees’ response to the pay that they receive and the feeling that they receive less or
more than they deserve.
Employees generally feel that their pay must be commensurate to the effort exerted in the
performance of their job. In other words, pay equity is achieved when the pay given to them by
their employers is equal to the value of the job performed; thus, this motivates them to perform
well and to do their jobs to the best of their abilities.
b. Expectancy Theory – another theory of motivation which predicts that employees are
motivated to work well because of the attractiveness of the rewards or benefits that they
may possibly receive from a job assignment.
The employee’s perception of the compensation or pay attached to a job position is an
important factor in ascertaining the motivational value of compensation.
Bases for Compensation

Employees may be compensated based on the following:
a. Piecework basis – when pay is computed according to the number of units produced.
b. Hourly basis – when pay is computed according to the number of work hours rendered.
c. Daily basis – when pay is computed according to the number of work days rendered.
d. Weekly basis – when pay is computed according to the number of work weeks rendered.
e. Monthly basis – when pay is computed according to the number of work months
rendered.
Compensation rates are influenced by internal and external factors. Among the internal
factors are the organization’s compensation policies, the importance of the job, the employees’
qualifications in meeting the job requirements, and the employer’s financial stability.
External factors, on the other hand, include local and global market conditions, labor
supply, area/regional wage rates, cost of living, collective bargaining agreements, and national and
international laws, among others.
Purposes of Performance Evaluation: Administrative and Developmental
Improving individual job performance through performance evaluation is just one of the
reasons why employees are subjected to assessments on a continuous basis. There are other
purposes behind employee assessment that are beneficial to the company and employees:
a. Administrative Purposes – These are fulfilled through appraisal/ evaluation programs
that provide information that may be used as basis for compensation decisions,
promotions, transfers, and terminations.
Human resource planning may also make use of it for recruitment and selection of
potential employees.
b. Developmental Purposes – These are fulfilled through appraisal/ evaluation programs
that provide information about employees’ performance and their strengths and
weaknesses that may be used as basis for identifying their training and development
needs. Through this approach, the workers become more receptive to the explanations
given by the organization’s management regarding the importance of having
evaluations at regular intervals—that these are conducted to improve their
competencies in order to prepare them for future job assignments.
Different performance appraisal methods are used depending on the information an
evaluator aims to find out.
Performance Appraisal Methods
Methods of evaluating workers have undergone development in order to adapt new legal
employment requirements and technical changes. Some appraisal methods used today are the
following:
a. Trait methods – performance evaluation method designed to find out if the employee
possesses important work characteristics such as conscientiousness, creativity, emotional
stability, and others.
b. Graphic rating scales – performance appraisal method where each characteristic to be
evaluated is represented by a scale on which the evaluator or rater indicates the degree to
which an employee possesses that characteristic
c. Forced-choice method – performance evaluation that requires the rater to choose from
two statements purposely designed to distinguish between positive or negative
performance; for example: works seriously— works fast; shows leadership—has initiative
d. Behaviorally anchored rating scale (BARS) – a behavioral approach to performance
appraisal that includes five to ten vertical scales, one for each important strategy for
doing the job and numbered according to its importance
e. Behavior observation scale (BOS) – a behavioral approach to performance appraisal
that measures the frequency of observed behavior
Why Some Evaluation Programs Fail
Performance appraisals (such as manager/supervisor appraisal, self-appraisal, subordinate
appraisal, customer appraisal, peer appraisal, team appraisal, or 360-degree appraisal) may
sometimes fail due to various reasons including the following:
 inadequate orientation of the evaluatees regarding the objectives of the program;

 incomplete cooperation of the evaluatees (e.g. proper answering of evaluation
questionnaire);
 bias exhibited by evaluators;
 inadequate time for answering the evaluation forms;
 ambiguous language used in the evaluation questionnaire;
 employee’s job description is not properly evaluated by the evaluation questionnaire
used;
 inflated ratings resulting from evaluator’s avoidance of giving low scores;
 evaluator’s appraisal is focused on the personality of the evaluate and not his or her
performance;
 unhealthy personality of the evaluator; and
 evaluator may be influenced by organizational politics.
ACTIVITY 3: LET’S WORK AND LEARN!

DIRECTION: Read the scenario below. Use your own provided sheets to justify your answer.
Entitle your work as Q2 – Lesson 5.3– Activity 3 – Let’s Work and Learn.
Mr. Curry Phot has been working for almost 2 years as the production staff of Izzed
Candy Craze Store. His take home pay last January 15th and 30th is ₱7,800.00 respectively.
Recently, he wondered that his April 15 th net pay is ₱6,800.00. He saw that there were other
deductions like donation, tokens, and availed tickets as a fund raising for the upcoming event
sponsored by their company. Ms. Marie Chan confirmed that the deductions were instructed by
their authorities to support the sponsoring event of the company.
PROCESS QUESTIONS:
1. What do think is/are the basis of the authorities of the company in deducting the
amounts of donation, tokens, etc. from Mr. Phot’s salary? Elaborate your answer.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
2. Does Mr. Curry Phot have the right to complain and claim the deductions back?
Justify your answer.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
DIRECTION: Analyze the table given below. Write your answer in your own
provided sheets. Entitle your work as Q2 – Lesson 5.3 – Activity 4 – My Idea.
Table: Daily Minimum Wage Rates in the
Philippines
Region Minimum Wage Rate (PHP)

NCR 500.00-537.00
CAR 340.00-350.00
Region I 282.00-340.00
Region II 345.00-370.00
Region III 304.00-420.00
Region IV-A 303.00-400.00
Region IV-B 294.00-320.00
Region V 310.00
Region VI 310.00-395.00
Region VII 351.00-404.00
Region VIII 295.00-325.00
Region IX 303.00-316.00
Region X 331.00-365.00
Region XI 381.00-396.00
Region XII 315.00-336.00
Region XIII 320.00
BARMM 290.00-325.00
PROCESS QUESTIONS:
1. How do you find Minimum Wages?

_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________-
_____________________________________________________________________________
2. The table above is Minimum Wages Rates in the Philippines. Why is it that each
region in the country have different minimum wage rate?
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

1. As a Damean, how could you apply the core values NOTRE DAME in performance
evaluation/appraisal?
ACTIVITY 6: UNDERSTAND and CHOOSE ME!

DIRECTION: Presented below are the samples of evaluation methods of employees.
Choose the appropriate method indicated below. Write your answer in your own provided
sheets. Entitle your work as Q2 – Lesson 5.3 – Activity 6 – Understand and Choose Me.
Weighted Checklist Forced-Choice Form

Behaviorally Anchored Rating Scale Behavior Observation Scale
Graphic Rating Scale Critical Incident Technique
360-Degrees Appraisal System Management By Objectives
1.
2.
Instruction: Rank 1 to 4 the following sets of statements according to how they describe
the manner in which (Name of Employee performs the job. A rank 1
should be the used for the most descriptive statement, and a rank of 4 should be given for
3. the least descriptive.
Does not anticipate difficulties
Grasps explanations quickly
Rarely wastes time
Easy to talk to
A leader in group activities
Wastes time on unimportant things
Cool and calm at all times
Hard worker
June 1-Daisy listened carefully to the customer’s complaint, answered the woman’s questions,
and then look back the merchandise. He was polite, prompt, and interested in her problem.
4. June 16- Daisy had the longest lunch break during the busiest day. He failed to attend
customers complains.
July 10-Daisy entertained and solved 10 customer concerns and complaints. Because of that
the department received compliments from the customers.
5.
6.
For each behavior listed below use the following:

7. 5 represents 95-100 percent of the time
4 represents 85-94 percent of the time
Is accurate in preparing financial reports
Almost never 12345Almost always Practices sound decision making in making
financial reports
Almost never 12345Almost always Is available to technical consultation when
needed
Almost never 12345Almost always Develops fair and equitable work supervision
Almost never 12345Almost always
8.
CHAPTER 6:
LEADING
This chapter highlights another important management function—leading. It is important because

it involves the organization’s people who possess different attitudes, behaviors, personalities, and motivations,
among others. Influencing them to achieve a common goal is quite challenging because of their many
diverse characteristics. Therefore, understanding leading or directing begins with understanding how people
behave, what their motivations are, and how to communicate with them
.

No. Time
Chapter 6: 1. Motivation  Analyze motivation, leadership, and
Leading 2. Communication communication work in an
organization
 Analyze the role of communication in 1 weeks
directing people within the
organization.
Let’s find out how much you already know about this module. Please answer all items.
After taking this short test, you will see your score. Take note of the items that you were not
able to correctly answer and look for the right answer as you go through this module. Write
your answer in your own provided sheets. Entitle your work as Q2- Chapter 6 – Activity 1 –
Pre-Assessment.
Direction: Modified True or False. Two statements are given. If only the first statements is
true, answer A; if only the second statement is true, answer B; If both statements are true,
answer C; if both statements are false, answer D. Write your answers on the space provided.
Write your answer in your own provided sheets.
________1. Leading and managing are synonymous terms. Successful leadership must begin
by focusing on the psychological capital of both the employer and the employee.
________2. Conscientiousness knows what is right and what is wrong. Extraversion is the
degree to which someone is sociable, talkative, and assertive.
________3. Job satisfaction refers to the employees’ general attitude toward their respective
job. It has no effect on productivity.
________4. Theory X is a positive view of workers. Theory Y is a negative view of workers.
________5. The Two Factor Theory of Motivation was proposed by McClelland. The ERG
Theory was developed by Alderfer.
________6. Self-actualization refers to the human need for continued personal growth. Esteem
is the human need for self-respect and self-fulfilment.
________7. Managers are advised to set goals for their subordinates. Difficult goals demotivate
workers.
________8. Job enlargement is the increasing of job depth by empowering employees to
assume tasks often done by managers. It is an example of Job Design Theory.
________9. Change is considered by many organization members as a threat. Fear of change
may be due to uncertainty, pessimism, and concern about personal loss.
________10. Mañana habit has a positive implication to organizational management. Ningas
Cogon is another positive belief of Filipino workers.
Lesson 6 . 1
MOTIVATION
Motivation encourages individuals to work enthusiastically, often performing more work

than what is required. What could managers do to ensure such motivated and enthusiastic
performance among their subordinates? What could be done to inspire employees whose
work performance is limited to the minimum need? Understanding individual human needs,
perceptions, thoughts, and beliefs may provide good answers to such questions that are often
asked in different work settings.
ACTIVITY 2: MY IDOL… MY INSPIRATION..!
Direction: Choose a picture of a family member, a friend, or a person that you admire in
business, political, sports entertainment and other industries that motivate you to achieve your
dream. Be creative with your answer. Write your answer in your own provided sheets.
Entitle your work as Q2 – Lesson 6.1 – Activity 2 – MY IDOL…MY INSPIRATION.
MOTIVATION
According to Kreitner and Kinicki (2013), early Theories of Motivation revolved

around the idea that motivation is brought about by the employees’ desire to fulfill their need,
their work habits, and their job satisfaction. Among these are:
A. Maslow’s Hierarchy of Needs Theory – refers to Maslow’s Hierarchy of Five Human

Needs: physiological, safety, social, esteem, and self-actualization.
1. Physiological Needs refer to the human need for food, water, shelter, and other physical
necessities.
2. Safety Needs refer to human needs for security and protection from physical and
psychological harm.
3. Social Needs pertain to the human desire to be loved and to love, as well as the need for
affection and belongingness.
4. Esteem Needs include the human need for self-respect, self-fulfillment, and become the best
according to one’s capability.
5. Self-actualization Needs are the final needs in Maslow’s hierarchy.
The Hierarchy of Needs was published by Abraham Maslow in 1943. According to him,
physiological needs must be satisfied first. Once a need is satisfied, it activates the next higher
need in the hierarchy. The process continues until the need for self-actualization is activated. It
is important for managers and leaders to focus on satisfying employee needs related to self-respect,
self-esteem, and self-actualization because their satisfaction is related to many outcomes such as
academic achievement, job performance, work problems/success, and others.
B. McGregor’s Theory X and Theory Y – refers to the theory that was proposed by Douglas
McGregor.
Theory X is a negative view of workers which assumes that workers have little ambition,
dislike work, and avoid responsibilities; they need to be closely monitored or controlled in order
for them to work effectively.
Theory Y is a positive view of workers which assumes that employees enjoy work, seek out
and accept responsibility, and are self-directed.
Managers must be guided by Theory Y, so McGregor proposed that they must give
employees a chance to participate in decision-making, assign those challenging jobs to exercise
their responsibility in handling complex situations, and allow them to have good work relations
with others, which would enhance their motivation.
C. Herzberg’s Two Factor Theory – was proposed by Frederick Herzberg This theory is also
known as the Motivation-Hygiene Theory which states that intrinsic factors (achievement,
recognition, growth, and responsibility) are associated with job satisfaction, while extrinsic
factors (company policy, salary, security, and supervision) are associated with job
dissatisfaction. Intrinsic factors are the motivators while the extrinsic factors are called
hygiene factors.
Managers were advised to emphasize motivators in order to motivate their subordinates.

Employees who showed job satisfaction are more motivated and productive. This theory
enjoyed popularity from the middle of the 1960s to the early 1980s.
D. McClelland’s Three Needs Theory – was proposed by David McClelland and a state that
individuals have three needs that serve as motivators at work.
The three needs McClelland referred to are: the need for achievement (nAch), the need for
power (nPow), and the need for affiliation (nAff). Managers are advised to be observant of
these needs among their subordinates so that they could be given job assignments that would
satisfy their highest needs, if possible. In doing so, they may be more motivated to work well.
E. Alderfer’s ERG Theory – was developed by Clayton Alderfer in the 1960s. For Alderfer, a
set of core needs explains behavior. E- stands for existence needs, R- refers to
relatedness needs, and G- pertains to growth needs. The needs or desire for physiological
and materialistic well-being, to have meaningful relationships with others, and to grow as a
human being are similar to the needs presented in Maslow’s Theory.
FIGURE 6.3 How Maslow’s, Herzberg’s, and Alderfer’s theories relate
Modern Theories of Motivation are process theories that focus on the notion that motivation is a
function of employees’ perceptions, thoughts, and beliefs. Among these are:
1. Goal Setting Theory – a theory stating that specific goals motivate performance and that
more difficult goals, when accepted by employees, result in greater motivation to perform
well, as compared to easy goals.
Managers are advised to set goals for their subordinates as this is a major source of job
motivation. Doing well also helps increase their motivation.
2. Reinforcement Theory – a theory which states that behavior is a function of its

consequences.
If the result or consequences that immediately follow a behavior is good, then there is a
probability that the individual will be motivated to repeat the behavior. Using this theory,
managers can motivate employees’ positive behavior by using positive reinforcement for actions
that help the company achieve its goal.
3. Job Design Theory – a theory which states that employees are motivated to work well by
combining tasks to form complete jobs.
Managers are advised to design jobs that will meet the requirements of the ever-changing
environment, the firm’s technology, and the workers’ skills, abilities, and preferences. In doing so,
employees are motivated to perform well. Examples are: job enlargement—the horizontal
expansion of a job by increasing job scope; job enrichment—the increasing of job depth by
empowering employees to assume some tasks usually done by their managers; and job
characteristics model—where employees are motivated to perform well because the task
assigned to them have the five core job dimensions that serve as motivators.
4. Equity Theory – a theory developed by J. Stacey Adams which states that employees assess
job outcomes in relation to what they put into it and then compares these with their co-
workers.
If the employee perceives that his job is equitable in comparison to those of his
coworkers, there is no problem. However, if the opposite is true, this will become a demotivator
to his or her job performance. Man- agers must see to it that they exercise fairness or equity in
their company.
5. Expectancy Theory – states that an individual tends to act in a certain way, based on the
expectation that the act will be followed by an outcome which may be attractive or
unattractive to him or her.
Managers are advised to understand an employee’s goal so that he or she would be able
to link the rewards or outcomes to be offered with the said goals.
DIRECTION: Describe that person you choose in Activity 1 (MOTIVATION ) and based on
Maslow’s Hierarchy of Needs Theory explain how he/she motivates you and your desire to
fulfil your dreams/needs. Use your own provided sheets to justify your answer. Entitle your
work as Q2 – Lesson 6.1 – Activity 4 – Let’s Work and Learn.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
DIRECTION: Analyze what type of motivation theory takes place in each workplace
scenario. Then, be ready to answer the given process questions below. Write your answer
in your own provided sheets. Entitle your work as Q2 – Lesson 5.2 – Activity 5 – My
Idea.
Mr. Bayucan has been working as the head of the Accounting Department at ABC
Corporation for five (5) years now. Recently, he noticed that Mr. Ramiscal dislike his work, and
he avoids responsibilities while Ms. Deniega seems to enjoy her work, she seeks out and
accepts responsibility, and she is self-directed.
PROCESS QUESTIONS:
1. What type of motivation theory do you observe from Mr. Ramiscal’s actions? What
type of motivation theory do you observe from Ms. Deniega’s actions? Support your
answer.
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Do you think Mr. Bayucan should motivate Mr. Ramiscal and Ms. Deniega? If you were
Mr. Bayucan what would you do? How will you apply Herzberg’s Two Factor Theory
to Mr. Ramiscal and Ms. Deniega that will enhance their motivation?
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

1. As a Damean, how could you relate the core values NOTRE DAME in different
theories about motivation?
ACTIVITY 7: CHOICE AND DO ME!

DIRECTION: In this activity, you can select one among the options for your performance
based output that reflects your understanding of what “motivation in an organization” is about.
Be creative. Entitle your work as Q2 – Lesson 6.1 – Activity 7 – Choice and Do Me.
a. Draw a poster-slogan about McClelland’s Three Needs Theory and Alderfer’s ERG
Theory of motivation in an organization.
b. Create a three-minute promotional video on hiring motivated employees using
Herzberg’s Two Factor Theory of motivation in an organization.
Lesson 6 . 2
COMMUNICATION
Communication applies to all management functions and its general purpose for the
organization to bring positive changes that influence activities leading to the firm’s welfare.
The communication process starts with the sender who has an idea or a message, which is then
transmitted through a selected channel to the receiver, who in turn who has to be ready for the
reception of the message, so that it could be decoded into thoughts. Accurate communication
occurs when the sender and the receiver understand one another, according to Hobbins and
Coulter (2009).
ACTIVITY 1: DEFINE ME!

Direction: Define communication in your own understanding through a poem using the
spelling of communication. Write your answer in your own provided sheets. Entitle your
work as Q2 – Lesson 6.2 – Activity 1 – DEFINE ME.
C
O
M
M
U
N
I
C
A
T
I
O
N

COMMUNICATION
TYPES OF COMMUNICATION
Communication may be verbal (through the use of oral and written words) or non-verbal
(through body movements, gestures, facial expressions, eye contact, and by touching).
It may also be classified as formal, if communication takes place within prescribed, routine
organizational work arrangements, or informal, if communication is not defined by an
organization’s hierarchical structure. Communication is formal when the manager gives an
assignment to a subordinate and informal when employees talk to their friends in the office
about a weekend party or a vacation which they plan to take.
ELEMENTS OF COMMUNICATION PROCESS

1. Input 5. Noise
2. Sender 6. Receiver
3. Code 7. Output
4. Channel 8. Feedback
DIRECTION AND FLOW OF COMMUNICATION
Communication flows in different directions within an organization. Communication may

be vertical, upward, downward, horizontal/lateral, or diagonal.
1. Vertical communication involves communication flow between people belonging to

different organizational levels.
2. Upward communication is the flow of information from an employee who belongs to a
lower hierarchical level to the boss/manager who belongs to a higher hierarchical level.
Employees/subordinates may communicate upward regarding their personal problems,
requests that they would like the boss to approve, issues with coworkers, and others.
3. Downward communication is the flow of information from the manager, who belongs to a
higher hierarchical level, to the subordinates/employees, who belong to lower
hierarchical levels. Examples are when the boss gives orders to subordinates to finish
certain tasks, communicates organizational policies and practices, and comments about
work performance among others.
4. Horizontal/lateral communication takes place among employees belonging to the same
hierarchical level. Members of cross-functional teams who belong to different
units/departments but occupy the same organizational level make use of this type of
communication in order to save time and facilitate coordination.
5. Diagonal communication entails communicating with someone or others who belong to
different departments/units and different hierarchical levels. For example, an employee
belonging to the company’s financial management department communicates directly
with the head of the human resource department about his personal complaint against a
marketing department employee. Take note of the different departments and different
organizational levels of the persons communicating with each other. Diagonal
communication is said to be beneficial because of its efficiency and speed; however, it
may also cause some confusion.
COMMUNICATION NETWORKS IN ORGANIZATIONS
Communication networks are varied patterns of combined horizontal and vertical flows of
organizational communication. Types of communication networks include the following:
1. Chain network – where communication flows according to the usual formal chain of
command, downward and upward.
2. Wheel network – where communication flows between a leader and other members of their
group/team.
3. All-channel network – where communication flows freely among all members of a
team.
It has been observed by communication researchers that there is no single network that
could be considered applicable or fit for all circumstances in an organization.
Organization members also communicate through other networks and means such as the
grapevine and computer networks.
The grapevine is an informal communication network in an organization. An example is
gossip/rumor which could quickly disseminate information. Managers must stay aware of the
grapevine’s flow and patterns, and could use it to transmit important information. They,
however, should also be conscious of the negative effects of gossip as these may cause conflicts in
their company. Negative effects of rumors may be minimized by practicing transparency and
communicating openly with employees.
Meanwhile, computer networks present another means of communication among
organization members. Information technology has made it possible for managers to
communicate with each other and with subordinates and for employees to communicate with
each other anytime, regardless of distance. Examples of computer communication applications
are e-mail, blogging, teleconferencing, and intranet.
BARRIERS TO COMMUNICATION
Organization members may encounter various types of barriers that can alter the meaning
of communications that they receive. These barriers include filtering, emotions, information
overload, defensiveness, language, and national culture.
1. Filtering – the shaping of information communicated in order to make it look good or

advantageous to the receiver.
For example, a sales agent may report to his manager the big amount of sales that he was
able to make with one of their customers, but fails to report the complaints he received from
other customers regarding their products.
2. Emotions – the interpretation of communications which may be influenced by extreme

emotions felt by the receiver.
For example, a manager who is in a very bad mood and receives good news may not see the
positive aspect of it because his rational thinking process is affected by his emotional judgment.
3. Information overload – another barrier to good communication since there are too many
pieces of information received by an individual may have a negative effect on a person’s
processing capacity.
For example, the hundreds of job applications received by human resource managers
through e-mail may be too many for them to read fully and respond to accurately.
4. Defensiveness – the act of self-protection when people are threatened by something or

someone.
Due to this feeling, people may resort to communicating lies in order to protect
themselves or to interpret communications differently to defend their interests, thus, reducing
mutual understanding.
5. Language – could also hamper good communications because words used may have
different meanings to different people belonging to different age, educational
background, or cultural group.
Diversity of background of organization members may influence the language or the

words that they use. For example the word “hello” may just be an ordinary greeting to the older
members of an organization; but the same word, “hello” may have a negative connotation to the
younger group of employees depending on the context.
6. National culture – just like language, the prevailing national culture may also cause
problems in communication among members of an organization, especially if it is
multinational company
Certain office practices, like sending formal memoranda to employees, may be
negatively interpreted by employees coming from another country with a different culture that
values face-to-face interpersonal communication. Such negative interpretation may, in turn, cause
employee dissatisfaction and less motivation to perform their work well.
OVERCOMING COMMUNICATION BARRIERS

To avoid conflicts resulting from communication problems, managers try to overcome
communication barriers though the following means:
1. Using feedback – This is usually done by asking questions about a memo sent to
subordinates or by asking them to give their comments or suggestions. In doing so, they
are able to determine whether the communication they sent out was understood the way
they originally intended.
2. Using simple language – This is done by avoiding uncommon terms and flowery words
that may just cause misinterpretation. Language used must fit the level of understanding
of the intended recipients of the communication. Effective communication is achieved
when the message is understood by those who received it.
3. Active listening – This means listening well in order to grasp the full meaning of the
communication. Hearing without giving full attention to what others seek to
communicate usually results in misinterpretations and communication distortions.
4. Controlling emotions – This is another method of overcoming communication
misinterpretation. When the receiver is affected by extreme anger, his interpretation of a
message received may not be accurate. On the other hand, when the sender is affected by
extreme emotions, he/ she may also send or transmit inaccurate information. Therefore, it
is important to practice emotional restraint.
5. Observing body language – This also influences how communication is interpreted. Actions
of the message receiver, like throwing away a letter delivered to him, betrays his negative
feelings regarding its message, even if he says “yes” or “okay” to what is requested.
Nonverbal cues must always be watched because, as the saying goes, actions speak louder
than words.

DIRECTION: Describe the process of communication by identifying the role of its
components. Use your own provided sheets to justify your answer. Entitle your work as Q2 –
DIRECTION: Analyze what type of communication flow (upward, downward or horizontal)

takes place in each workplace scenario. Write your answer in your own provided sheets. Entitle
your work as Q2 – Lesson 6.2 – Activity 3 – My Idea.
a. Mr. Balag has been working as an accounting staff at ABC Corporation for a year
now. Recently, the company hired another staff, Miss Lim, to work with Mr. Balag.
Miss Lim discovered that Mr. Balag has been committing fraud in the financial
reports that he is making. Mr. Balag warned Miss Lim that she should keep quiet and
mind her own business.
PROCESS QUESTIONS:
1. What is the flow of communication between Mr. Balag and Miss Lim? Support your
answer.
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Do you think Miss Lim should report this to their superiors? If you were Miss Lim what
will you do?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
b. Miss Kris works in the Auditing Department of company X. There are five members
in their group. Recently, Miss Kris’s colleagues are complaining about the lack of
competence and being too rigid of their team leader, Miss Bueno. Miss Kris proposed
that they sit down with Miss Bueno and discuss the problems with her; however, the
group disagreed and wanted to speak directly to their supervisor, insisting that Miss
Bueno is too uncompromising to listen.
PROCESS QUESTIONS:
1. What will be the flow of communication between staff to the Auditing Department and
the supervisor if they talk? Support your answer.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Do you agree that the group should report the problem to the supervisor, why or why not?
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
c. Mr. Respicio is the unit head of the finance department. He noticed that one of his
disbursing officers, Paul has been habitually coming to the office 5-10 minutes late.
Mr. Respicio tolerated him at first, but when he noticed this somehow affected his
performance, he gave him a memo on his habitual tardiness. Paul showed
improvement the following days, but was late again after a week.
PROCESS QUESTIONS:
1. What is the flow of communication between Mr. Respicio and Paul? Support your
answer?
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. If you were Mr. Respicio, what will you do next? How will you communicate to Paul?
What do you think about his behaviour?
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

process of communication?
ACTIVITY 5: DO ME!
DIRECTION: Create a presentation that reflects your understanding of what “communication

in an organization” is about. Be creative. This can be done through online (you can record and
send the video presentation via email or messenger). Entitle your work as Q2 – Lesson 6.2 –
Activity 5 –Do Me.
CHAPTER 7:
CONTROLLING
A luxurious car without gasoline is similar to a viable business without carefully managed funds.
Who needs a non-running vehicle that is good for display only? How can a business be successful without
the well-managed funds required for its operation and expansion? This is where controlling comes in.
Essentially, controlling is all about the acquisition of money and its useful disbursement. It requires
identification and reinforcement of the firm’s priorities and understanding how its operations are going to
ascertain where improvement is needed.
.

No. Time
Chapter 7: 1. Apply the  Apply the concept and nature of
Controlling concept, Nature different control methods and
of Different techniques in accounting and 1 weeks
Control Methods marketing
and Techniques
in Accounting
and Marketing
Pre-Assessment.
Direction: Elimination. Four terms/items are given. Choose the letter that corresponds to the
term/items not related to the other three. Write your answer in your own provided sheets.
_____1. a. accounts payable c. mortgages

b. marketable securities d. long term debts
_____2. a. land c. cash on hand
b. property and equipment d. accruals
_____3. a. sales c. sales forecast
b. gross profit d. tax provisions
_____4. a. inspection reports c. audit interview
b. performance evaluation d. spot checking
_____5. a. top down approach c. traffic count
b. macro-economic forecast d. statistical models
_____ 6. a. liquidity ratio c. leverage ratio
b. service ratio d. activity ratio
_____ 7. a. sales volume projections c. working capital needs
b. liquidity predictions d. warehouse handling
_____ 8. a. non quantitative tool c. quantitative tools
b. visual impact d. charts
_____ 9. a. project planning control c. determine workplace privacy
b. identify activities d. determine completion date
_____10. a. control process c. establishing sequence of activities
b. correction of deviations d. establishing criteria of performance
Lesson 7 . 1
APPLY THE CONCEPT, NATURE OF DIFFERENT CONTROL

METHODS AND TECHNIQUES IN ACCOUNTING AND MARKETING
Management control in marketing is the control that makes use of projected sales or
forecasts, statistical models, econometric modelling, surveys, historical demand data, and actual
consumption of their products.
A sale is considered to be the "lifeblood of the business." No matter how good the
product is, if it is not sold in the market, there is no way that a business can survive. Thus, the
projected sales often guide the sales manager or the marketing head on how much the target or
the quota must be.
The goal of businesses is to gain profit. In order to achieve this, managers need
accounting/financial controls. The following financial ratios will help managers analyze the
organization's financial condition.
ACTIVITY 2: DEFINE AND CREATE ME!

Direction: Define controlling in your own understanding through a poem using the spelling
of controlling. Write your answer in your own provided sheets. Entitle your work as Q2 –
Lesson 7.1 – Activity 2 – DEFINE AND CREATE ME.
C - ____________________________________________________________________
O - ____________________________________________________________________
N - ____________________________________________________________________
T - ____________________________________________________________________
R - ____________________________________________________________________
O - ____________________________________________________________________
L - ____________________________________________________________________
L - ____________________________________________________________________
I - ____________________________________________________________________
N - ____________________________________________________________________
G - ____________________________________________________________________
APPLY THE CONCEPT, NATURE OF DIFFERENT CONTROL

METHODS AND TECHNIQUES IN ACCOUNTING AND MARKETING
A. DEFINITION AND NATURE OF MANAGEMENT CONTROL
In earlier times, controlling was associated with the concept of just being a corrective action.
Present-day management, however, applies it as a foreseeing activity that sets standards in
determining actual performance to correct previous decisions or actions. Therefore,
management must focus on management control and the control process.
IMPORTANCE OF MANAGEMENT CONTROL
Management control makes sure that the firm’s operating cash flow is sufficient,
efficient, and, if possible, profitable when invested.
Working capital, when properly controlled, must be adequate enough for daily operations
such as financing, inventories, credit payments to suppliers, reinvestment of cash surplus, and
salaries of employees, or, in general, maintaining an acceptable capital structure. The decision to
seek funds should be appropriate, so as not to incur expenses since borrowing would be
subjected to payment of interest.
Spending without thinking of how it could be regained in the future could put any starting
business or even a well-established one in jeopardy. There should be a continuous monitoring of
the organization’s activities, followed by corrective actions based on previously planned
programs of action. Moreover, tasks should be completed with less errors. This could be
achieved by comparing tasks with previously set standards or with competitor’s standards or
standards prevailing in a particular industry setting.
THE CONTROL PROCESS
Control techniques used for controlling financial resources, office management, quality
assurance, and others are essentially the same. The typical control process involves establishing
standards, measuring and reporting actual performance, and comparing it with standards, and
taking action.
Establishing standards means setting criteria for performance. Man- agers must identify
priority activities that have to be controlled, followed by determining how these activities must be
properly sequenced. In doing so, managers will be able to set key performance standards that
need to be achieved. The value chain, or the proper sequencing of activities needed to convert
the company’s raw materials into finished products, is a valuable instrument for helping
managers determine and establish key performance standards.
Measuring and reporting actual performance and comparing it with set standards is
essentially the monitoring of performance. To be able to do this, managers must develop
appropriate information systems which will help them identify, collect, organize, and
disseminate information. Managers are able to control facts and figures called data, and
information, which have been given meaning and considered to have value. Analyses of
data/information gathered measure actual performance and comparing it with set standards
serves as a means for detecting deviations. Deviations must be revealed as early as possible in
order to correct them.
Taking action involves the correction of deviations from set standards. This activity
clearly shows the control function of management. Managers may rectify deviations by
modifying their plans or goals, by improving the training of employees, by firing inefficient
subordinates, or by practicing more effective leadership techniques.
B. CONTROL METHODS AND SYSTEMS

Control methods are techniques used for measuring an organization’s financial stability,
efficiency, effectiveness, production output, and organization members’ attitudes and morale.
From the general point of view, managerial effectiveness must be concerned with the maximizing
of the above mentioned factors that are measured by the control methods. Therefore, the
challenge for present-day managers is to devise control methods and systems that are aligned
and consistent and will help attain these concerns.
METHODS OF CONTROL
A firm may apply control techniques or methods which are either quantitative or non-
quantitative.
QUANTITATIVE METHODS
a. Quantitative methods make use of data and different quantitative tools for monitoring
and controlling production output. Budgets and audits are among the most common
quantitative tools.
The most widely recognized quantitative tool is the chart. Charts used as control tools
normally contrast time and performance. The visual impact of a chart often provides the
quickest method of relating data. A difference in numbers is much more noticeable when
displayed graphically.
1. Budgets. The budget remains the best known control device. Budget and control are, in
fact, synonymous. An organization’s budget is an expression in financial terms of a plan
for meeting the organization’s goals for a specific period. A budget is an instrument of
planning, management, and control.
Budgets are used in two ways: to establish facts that must be taken into account during
planning and to prepare a description and financial information to be used by the chain of
command to request for and manage funds. At present, two major budget systems are used;
these are zero-based budgeting (ZBB) and the planning, programming, and budgeting system
(PPBS).
2. Audits. Internal auditing involves the independent review and evaluation of the
organization’s non-tactical operations, such as accounting and finances. As a
management tool, the audit measures and evaluates the effectiveness of management
controls. Audit service provides an independent audit of programs, activities, systems,
and procedures. It also provides an independent audit of other operations which involve
the utilization of funds and resources as well as the fulfilment of management goals.
FIGURE 7.2 A chart showing sales trends is among the quantitative tools used in organizations.
NON-QUANTITATIVE METHODS
Non-quantitative methods refer to the overall control of performance instead of only

those of specific organizational processes. These methods use tools such as inspections, reports,
direct supervision, and on-the-spot checking and performance evaluation or counseling to
accomplish goals.
Other control methods include feed forward control, concurrent control, feedback
control, employee discipline, and project management control.
a. Feed forward control prevents problems because managerial action is taken before the
actual problem occurs.
b. Concurrent control takes place while work activity is happening. The best example of this
type of control is direct supervision or management by walking around.
c. Feedback control is control that takes place after the occurrence of the activity. It is
disadvantageous because by the time the manager receives the information, the problem
had already occurred.
When the above three control methods are compared, managers choose the feed forward
method as the most desirable because of its preventive action. The concurrent control’s
advantage is that it can help manager’s correct problems before they become too costly or
damaging. Feedback control’s advantage is the exhibiting of variance between the standard and
the actual work performance. Little variance indicates that planning is successful while
significant variance may give managers an idea of how to plan better.
d. Employee discipline is a control challenge for managers. Enforcing discipline in the

workplace is not easy. Concerns regarding this include workplace privacy, employee theft,
and workplace violence, among others. From simple monitoring of employees’ computer
usage at work to protecting employees at work from psychologically unstable workers who
may have hidden desires to harm them, managers need discipline control to ensure that
tasks can be efficiently and effectively carried out as planned.
e. Project management control ensures that the task of getting a project’s activities done on
time, within the budget, and according to specifications, is successfully carried out.
Project managers need technical and interpersonal skills to control the implementation of
the project efficiently and effectively. The project planning process controls include:
defining objectives, identifying activities and resources, establishing sequence and estimating
time for activities, determining the project completion date, and comparing with
objectives and determining additional resource requirements.
C. APPLICATION OF MANAGEMENT CONTROL IN ACCOUNTANCY AND

MARKETING CONCEPTS AND TECHNIQUES
Management control in accounting and finance is the control that makes use of the
balance sheet, income statement, and cash flow statement to analyze and examine financial
statements in order to determine the company’s financial soundness and viability, as well as
financial ratios to determine the company’s stability. On the other hand, management control in
marketing is the control that makes use of projected sales or forecasts, statistical models,
econometric modelling, surveys, historical demand data, and actual consumption of their
products.
Sales are considered to be the “lifeblood of the business.” No matter how good the
product is, if it is not sold in the market, there is no way that a business can survive. Thus, the
projected sales often guide the sales manager or the marketing head on how much the target or the
quota must be. In a way, this will also serve as a guide for the operations manager in
determining the number of units to be produced. Excess production may mean cost, and unsold
items may resort to inventory expenses or worse, the obsolescence or degradation of the
product. Indeed, the sales forecast requires consideration.
For more established businesses, or those that had been in the industry for quite some time,
the most commonly used technique is to look at the historical demand and actual consumption,
with the assumption of the same economic condition.
A firm may generate a set of assumptions regarding the macroeconomic environment to
which all divisions must adhere as their guide, but forecasts can still be generated from the
customer level and taken into account. Some firms produce two sets of forecasts, one that uses a
statistical approach and another that relies on customer feedback. Senior managers then
compare the two forecasts to see how far apart they are before setting a final sales objective.
ACCOUNTING/FINANCIAL CONTROL RATIOS
The goal of businesses is to gain profit. In order to achieve this, managers need
accounting/financial controls. Managers must also analyze the organization’s financial
condition, which is done with the help of the following financial ratios.
a. Liquidity ratio – tests the organization’s ability to meet short term obligations; it may
also refer to acid tests done when inventories turn over slowly or are difficult to sell.
current ratio = current assets ÷ current liabilities
b. Leverage ratio – determines if the organization is technically insol- vent, meaning that
the organization’s financing is mainly coming from borrowed money or from the owners’
investments.
debt-to-assets ratio = total debt ÷ total assets
c. Activity ratio – determines if the organization is carrying more inventory than what it
needs; the higher the ratio, the more efficiently inventory assets are being used.
inventory turnover = cost of goods sold ÷ average inventory
d. Profitability ratio – determines the profits that are being generated;
net profit after taxes ÷ total sales
or it measures the efficiency of assets to generate profits.

return on investment = net profit after taxes ÷ total assets
In addition to the above ratios, asset management is also practiced to achieve
organizational goals. Asset management is the ability to use resources efficiently and operate at
minimum cost.
current ratio = current assets ÷ current liabilities
inventory turnover = sales ÷ average inventory
STRATEGIC CONTROL
As mentioned earlier, planning and controlling are closely related. Strategic plans serve
as control points for strategic control—a systematic monitoring at control points that leads to
change in the organization’s strategies based on assessments done on the said strategic plans.
Control provides a chance for comparing the plan’s intended goals with the actual organizational
performance. This becomes the basis for modifications in the firm’s strategies.
BENCHMARKING
Benchmarking is an approach or process of measuring a company’s own services and

practices against those of recognized leaders in the industry in order to identify areas for
improvement. It is a widely used and well-accepted approach because it helps organizations
gather data and information against which performance can be measured and controlled.
Weihrich and Koontz (2005) gave three types of benchmarking:
a.) strategic benchmarking which compares various strategies and identifies the key strategic
elements of success;
b.) operational benchmarking which compares relative costs or possibilities for product
differentiation; and
c.) management benchmarking which focuses on support functions such as market planning
and information systems, logistics, and human resource management, among others.
Many companies use benchmarking. Some prefer to benchmark only the top 10 or the
best companies in their particular industry. Others benchmark best global practices and go
further away from their own industry and reason out that their goal is competitive superiority
and not just competitive parity.
The benchmarking process begins with determining which company functions are to be
benchmarked and the key performance indicators to be measured. Then, the best industry
performers have to be identified. Data gathering and analysis follows and these become the
foundations for performance goals. New programs are implemented, and during this step,
performance is measured at regular intervals.
Corrective actions are taken to close the gap between the organization and the best-in-
class companies. The monitoring of results must be continuous to ensure benchmarking success.

DIRECTION: Based on the lesson discussed above, answer the following questions to fully
understand the concept and nature of different control methods and techniques in accounting
and marketing. Use your own provided sheets to justify your answer. Entitle your work as Q2 –
PROCESS QUESTIONS:
A. Explain why sales considered as the “lifeblood of the business”?

_____________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
B. Explain briefly the relationship between strategic plans and strategic controls.
_____________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
C. Identify benchmarking approach

_____________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
D. Explain briefly the three types of benchmarking approach.

_____________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
DIRECTION: Let us apply the formulas of Accounting/Financial Control Ratios. Show your
solution in every problem. Write your answer in your own provided sheets. Entitle your work as
Q2 – Lesson 7.1 – Activity 5 – My Idea.
1. Identify the Activity ratio of a computer shop if its Cost of Goods Sold is P12 million
and the Average Inventory is P24 million.
2. What is the Current ratio of a Department store located in Cagayan Valley? Its current
assets amount to P6 million while its current abilities are at P2 million. Analyze and
interpret your answer.
3. Compute the return on investment of a Grocery store's if its net profit after taxes is P10
million and its total assets is P100 million. Analyze and interpret your answer.

1. As a Damean, how could you relate the core values NOTRE DAME in solving
Accounting/Financial Control Ratios?
ACTIVITY 7: DO ME!
DIRECTION: Please refer to the information below. Show your complete solutions. Write
your answer in your own provided sheets. Entitle your work as Q2 – Lesson 7.1 – Activity 7 –
Do Me.
Cagayan Valley Agri. Corp.
Statement of Financial Position
January 31, 2020
ASSETS
Cash P5,000
Receivables 10,000
Inventory 15,000
Land & Building 150,000
Equipment 100,000
Total Assets P280,000
LIABILITIES AND OWNERS EQUITY
Current Liabilities
Accounts Payable P5,000
Notes Payable 10,000
OWNERS EQUITY
Capital P15,000
Net Income 250,000
Cagayan Valley Agri. Corp.

Income Statement
December 31, 2020
Sales P350,000
Cost of goods sold 80,000
Gross Income 270,000
Expenses 70,000
Net Profit 200,000
Income tax 20,000
Net Profit After Tax P180,000
*Average Inventory = 20,000
PROCESS QUESTIONS:
1. Compute for the Current Ratio.

Solution:
2. Compute for the Activity Ratio.

Solution:
3. Compute for the Profitability Ratio.

Solution:
4. Compute for the Inventory Turnover Ratio.

Solution:
CHAPTER 8:
INTRODUCTION TO THE DIFFERENT FUNCTIONAL AREAS OF
MANAGEMENT
To prepare you to become future leaders and managers, you must become familiar with the
functional areas of management—Human Resource Management, Marketing Management, Operations
Management, Financial Management, and Information and Communication Technology Management. In
doing so, you will be ready for the local and global challenges that you will inevitably meet in tomorrow’s
workplace. Managerial and leadership functions are essentially the same because all these aim to establish an
environment for the effective and efficient performance of individuals and cooperate with one another in
teams/groups of different organizations. Therefore, reading and understanding this chapter will be beneficial to
all persons who will one day join organizations—not just business companies but also nonbusiness
organizations such as government, educational and health care institutions, and other nonprofit
organizations.
.
Lesson No. Topic/Title You’ll learn to…. Estimated

Time
Chapter 8: 1. The  Explain the nature and role in the firm of
Introduction Different the following functional areas of
To The Functional management:
Different Areas of a. Human Resource Management b.
Functional Management Marketing Management 1 week
Areas Of c. Operations Management
Management d. Financial Management
e. Material and Procurement
Management
f. Office Management
g. Information & Communication
Technology Management
Pre-Assessment.
IDENTIFICATION: Direction: Identify what is being asked below. Write your answer in
your own provided sheets.
__________1. The most important business resource.

__________2. The study of how goods and services are produced in organizations.
__________3. Any system or method of attracting public notice to an event to be attended or
the desirability of commercial products for sale.
__________4. The process of setting financial objectives and determining what should be done
to accomplish them.
__________5. Forecast of cash needs and sources.
__________6. The process of managerial planning and carrying out of the conception, pricing,
promotion and distribution of ideas, goods, and services to bring exchanges that
satisfy individual and organizational goals.
__________7. Individuals or groups of people who have acquired much information and
understanding of things due to experience, practical ability, and easy access to
information through the Internet.
__________8. The process of obtaining information about jobs needed in order to achieve the
organization’s goals/objectives by determining its duties, tasks or activities.
__________9. Functional area of management which handles the evaluation of employees’
performance.
__________10. Functional area of management which is concerned with the stimulation of
demands for the company’s products.
Lesson 8 . 1
DIFFERENT FUNCTIONAL AREAS OF MANAGEMENT
Behind every successful organization is a strong management system. The strength of an

organization is its manpower who were hired, trained and equipped based on their abilities,
competencies, and skills. (Enriquez, 2016)
Every single organization is working the basics and all of its necessary functions. Each
of these departments are interrelated and are actively engaged in the entire operations of the
business organization. (Enriquez, 2016)
This topic deals with the functional areas of management, Human Resource
Management, Marketing Management, Operations Management, Financial Management,
Material and Procurement Management, Office Management and Information and
Communication Technology Management. (Enriquez, 2016)
ACTIVITY 2: DEFINE AND CREATE ME!

Direction: Describe the different functional areas of management in your own schema using
the graphic organizer below. In each circle, write a word that best describe the areas then
explain how these areas are interrelated on the space provided. Write your answer in your
own provided sheets. Entitle your work as Q2 – Lesson 8.1 – Activity 2 – DEFINE AND
CREATE ME.
DIFFERENT FUNCTIONAL AREAS OF MANAGEMENT
A. HUMAN RESOURCES MANAGEMENT

Human resources, also known as human capital, drive the performance of organizations
along with other resources; hence, understanding the HRM functions of management is very
important. These include:
1. Conducting job analysis. Job analysis is the process of obtaining information about jobs
needed to achieve the organization’s goals/ objectives by determining the duties, tasks, or
activities involved in jobs. Job analysis data may be gathered through interviews,
questionnaires, observation, and diaries. They may also be collected through position
analysis, critical incident method, task inventory analysis, and competency-based
analysis. Decision-making regarding job-related problems is done objectively by
analyzing the requirements of each job.
2. Planning labor need and recruiting. It is important to determine the number and kind
of people that may be attracted for employment.
a. External recruitment enables the organization to fill job openings with special
qualifications and to employ persons with new knowledge, skills, values, ideas, and
perspectives.
b. Internal recruitment may also be done if management finds it more advantageous to
promote or transfer present employees to fill the available job openings. Recruitment
from within the company is said to be less expensive as existing employees no longer
need extensive orientation programs.
3. Selecting candidates for the job. This involves the matching of people and jobs. Job
specifications help identify the person-job fit and identify their individual competencies,
their knowledge, skills, abilities, and other factors that may lead to excellent performance.
Managers may use different selection methods such as interviews, psychological tests,
and calling references, among others.
4. Orienting and training new employees. This is done in organizations so that they could
contribute to the achievement of their organizational goals/objectives. The phases
involved in this function are:
 conducting needs assessment of the organization, of the person, and of the
task/work;
 designing the training program by considering the institutional objectives, the
trainees’ readiness and motivation, and the principles of learning;
 implementation of the training program for non-managerial employees using on-
the-job training, apprenticeship training, cooperative training, internship,
government training, classroom instruction, and e-learning;
 evaluating the training program in order to determine effectiveness, considering
reactions, learning, behavior of the trainees, return on investment (ROI) or results,
and benchmarking.
5. Managing compensation or pay. Compensation or pay represents a reward received by
employees in exchange for their contributions to the achievement of organizational goals.
In doing so, pay equity must be considered. It must be fair and just, acceptable to all
concerned parties, and commensurate to the value of the work performed. It is important
as it determines job performance motivation of workers.
6. Providing incentives and benefits. Incentives are generally based upon a pay-for-
performance philosophy which means that a performance “threshold” or a baseline
performance level must be reached by an employee or group of employees in order to
qualify for incentive payments. Examples of individual incentives are bonuses, merit pay,
and sales incentives. Group incentives include team compensation, Scanlon plan, and
improshare. Enterprise incentives are profit sharing, stock options, and employee stock
ownership plans. Benefits, on the other hand, include social security, workers’ compensation,
health care and medical and educational assistance, vacation leave, sick leave, life
insurance, retirement benefits, and travel benefits. It is important that incentives and
benefits programs be based on specific objectives compatible with the organizational
philosophy and policies and the organization’s financial standing.
7. Evaluating employees’ performance. Appraisal of employees is done on a regular basis to
find out who are doing their jobs well and who are not. The purposes of such evaluations are
administrative and developmental. Administrative purposes include: to aid in decision-
making regarding employees’ pay and promotions, transfers, or layoffs, which are based
on their achievements and performance. The developmental purpose of appraisal are the
use of results for discussing employees’ strengths and weaknesses and for listing down
performance improvement needs.
8. Communicating. To be effective, managers must have good communication skills, both
oral and written and information technology proficiently. This is necessary to receive
and disseminate pertinent information needed by all organization members in carrying
out activities that will lead to the achievement of company goals/objectives. Besides
carrying out internal communication, managers must also have good communication
with customers, suppliers, and other stakeholders in the external environment.
Communication may be hindered by barriers and breakdowns in the communication
process. Identifying these barriers and learning how to listen well will facilitate both
understanding and managing process.
9. Developing employees. Programs should be designed to meet the special needs of
employees which will prepare them for future jobs or roles that they may be assigned to do.
These may include: graduate studies, cross-training, which refers to the process of
developing employees to do multiple jobs within an organization; or ethics training, the
process of developing employees’ moral judgments that will help them determine right
and wrong behavior which they could use in jobs that require more decision-making
functions.
10.Building employee commitment. This is another important function of HR practitioners
which will bind them to engage in activities that will ensure the achievement of
organizational goals/objectives. This must be followed by employee accountability or
accepting responsibility for one’s actions.
11.Providing good working conditions. This includes giving a clear statement of the
company’s mission, vision, goals, and objectives; offering a good compensation and benefits
package; preparing a well-ventilated, well-lit, and pollution-free work area for employees;
and practicing ethical management styles.
12.Handling grievances and industrial relations. When differences arise between labor
unions and management, these are usually settled through the grievance procedure, wherein
the feelings, needs, and desires of both parties are aired. Managers must try to master the
art of handling grievances and industrial relations to bring peace in their organization.
Again, it must be emphasized that satisfied workers are more motivated workers, which
in turn, makes them more effective and efficient in performing their assigned tasks;
thus, they hasten the attainment of their company’s set goals/objectives.
IMPORTANCE OF HUMAN RESOURCES MANAGEMENT

Human resources management deals with the management of people—the most important
business resource. Money, materials, and information resources are not capable of moving the
business activities without the aid of the primary performance drivers, human resources.
Therefore, mastering the activities involved in human resources management
(recruitment, selection, placement, training, and development) is a must since all other
management activities (planning, organizing, staffing, leading, and controlling) could be done
easily if organization managers practice proper human resources management.
B. MARKETING MANAGEMENT
As marketing expert Philip Kotler puts it, marketing management “is essentially
demand management.” This is because it involves “influencing the level, timing, and
composition of demand” so that an organization may reach its goals.
The marketing management functions of management include the following:

a. Analyzing
b. Planning
c. Implementing
d. Controlling of goods
e. Services
f. Ideas to create exchanges that satisfy customer needs;
g. Company goals.
Analyses of demand management starts with the gathering of data through marketing
research. Activities under marketing planning include decision-making on target markets,
market positioning, product development, pricing, distribution channels, physical distribution,
communication, and promotion. The implementation of the marketing plan is formally carried
out by sales managers, sales people, advertising and promotion managers, and customer service
managers.
Controlling refers to monitoring of the marketing plan’s progress. Goals and budgets are
set for each month or quarter. A review of the results follows in order to identify businesses that
are not attaining their goals. Managers of unsuccessful businesses must explain what the
problem is and propose contingency plans that the management has to take in response to such
negative developments.
Management of marketing resources. Marketing resources include: sales people, advertising,

and marketing research.
a. Management of sales people involves inculcating the establishment of satisfying long-

term relations with customers, suppliers, and distributors in order to help their long-term
preference and business. Good marketers are able to maintain win-win relationships by
seeing to it that they always deliver high quality, good service, and fair and reasonable
prices to the key parties that they deal with over a long period of time.
b. Management of advertising. Although used less frequently than sales calls in business
markets, it is still important in marketing. It can perform different functions such as: build
awareness; build comprehension of the good features of the product or service; remind
prospective customers about the product; provide the company’s contact information to
customers; and lead customers to get in touch with sales representatives.
c. Management of marketing research. This involves identifying the seven characteristics of
good marketing research characteristics:
1. the principles of the scientific method are used;

2. research creativity is practiced by using innovative ways to solve marketing
problems;
3. multiple methods of research are used in order to adapt the method to the
problem;
4. interdependence of models and data which recognize that data are interpreted
from underlying models;
5. value and cost of information is concerned with estimating the value of the
information against the cost; which helps the marketing research department
determine which projects to prioritize;
6. healthy scepticism enables researchers to show a healthy questioning of the
hurried assumptions made by managers about how a market works; and
7. ethical marketing research which is concerned with research that benefits both the
sponsoring company and the consumers; self-serving results may mislead
consumers to buy the company’s product which, in reality, is not good or
effective.
Analyze, plan, and implement marketing programs that aim to bring about an expected
level and mix of business deals with target markets. It is important that analysis and planning
precede the implementation of the marketing program, in order to ensure that its aim will be
achieved. Strategic planning for individual business entails defining the business mission, analyzing
the business’ external and internal strengths and weaknesses, and formulating goals and
strategies. In doing so, the implementation of the marketing program will go smoothly and the
chances that it will achieve its aim of bringing an expected level and mix of business deals with
target markets will be increased.
Stimulate demands for the products of the company. This is achieved by influencing the
level, timing, and composition of demand, bearing in mind the attainment of the company’s
objectives.
Make crucial decisions that will ensure the company’s competitiveness. These are decisions
regarding target markets, development of products, distribution of goods, market positioning,
and setting of right prices for their products.
Make sure that marketing techniques employed are efficient, effective, and socially
responsible or ethical. Marketing managers and their team members must balance their own
best interests (big sales commissions, recognition, or promotion) with the best interests of their
company, consumers, and society.
IMPORTANCE OF MARKETING MANAGEMENT
Marketing management is important because it is the key to organizational goal

attainment, customer satisfaction, and profit gain. Without major marketing management
processes—planning, execution, pricing, and promotion and distribution of goods, services, and
ideas to create exchanges with target groups—satisfying customers and achieving organizational
goals will not be possible.
C. OPERATIONS MANAGEMENT
Business managers today focus on productivity, technology use, quality of goods and
services, customer satisfaction, and speed. They are conscious that they need to innovate on
their processes and activities in order to succeed in a highly competitive globalized market.
Because of these needs, the operations management functions of management must include the
following:
a. Overseeing the transformation processes that change resources into finished goods and
services. In order to do this, managers must address resource acquisition inventories,
facilities, work flows, technologies, and quality. In doing so, productivity and
competitive advantage will be ensured as they accomplish the multiple processes that
transform the various resources—in the form of people, material, equipment, and capital
—into quality finished products and services.
b. Improvement of productivity and competitive advantage. Productivity measures the
efficiency by which inputs are turned into outputs. The basic equation for productivity is:
productivity = output ÷ input
Competitive advantage is the competency of an organization to out- perform a competitor

or competitors. To ensure productivity, work processes must be subjected to complete analysis
and redesigned, if necessary, through process engineering. Other ways to ensure productivity
are process value analysis and reengineering. In process value analysis, all elements of a
process and their workflows are analyzed to be able to know their contributions to key
performance results. Reengineering discards work steps that are not needed, combines other
work steps, uses technological know-how to reduce costs, and ensures efficiency and
effectiveness. Competitive advantage follows when organizations improve their productivity.
c. Managing the sequence of activities and information along the whole course of the
value chain. Proper management of these activities and information results in the
creation of finished products and services that have value to customers. Elements in an
organization’s value chain include inflow of resources and materials, organizing of
resources and materials, creating goods or services, distributing finished products or
services, and serving of target customers.
IMPORTANCE OF OPERATIONS MANAGEMENT
Through the study of the essentials of operations management, businesses of different types
and sizes may increase their chances for survival and success in today’s business environment
which is characterized as highly competitive and fast-paced in producing quality products and
services.
D. FINANCIAL MANAGEMENT
Gaining profit is the main goal of businesses. To attain this goal, managers must
practice good financial management and this, of course, starts with understanding the
financial management functionsof management. These functions include:
Taking charge of the company’s financial policies and strategies, investments, capital
structures, and dividend policies. Financial managers of organizations must formulate sound
financial standing plans that will communicate broad guidelines for their financial decisions and
strategies. These plans include typical financial policies that address the organization’s
investments, capital structures, and dividend policies. Investment policy covers choice of product
lines and capital project. Capital structure policy covers a working capital policy (for the balancing
of assets and liabilities) and leverage policy (for balancing long-term financing). Dividend policy
considers the use of either a systematic pattern of earnings retention or dividend distribution.
Financial management and control. The management and custody of the organization’s
funds also include control which gives an assurance that funds are properly utilized in order to
provide for all the organization’s needs. Examples of standard financial management and control
practiced by organizations are the following: project management, which makes sure that long-
term projects are implemented according to previously planned budgets and checks if these have
yielded forecasted cash returns; working capital management, which includes cash, accounts
receivable, and inventory management; cash management, which gives an assurance that there is
enough cash balance that may be used for daily operating needs, that idle cash is invested
through marketable securities, and that proper cash control rules are instituted; and accounts
receivable management, which ensures the optimization of accounts receivable investments and
the formulation of sound credit evaluation and collection procedures. Meanwhile, inventory
management determines inventory levels by making maximum use of trade-off between inventory
carrying cost, ordering cost, and lost sales opportunities; it also institutes good stable inventory
control procedures. Fund sources management identifies short-and long-term funds that may be
available, and transacts and keeps watch of credit facilities with banks and other financial
institutions. Dividend policy implementation determines the form and amounts of dividends and
schedules their payments.
Financial planning. Financial planning is the process of setting financial objectives and
determining what should be done to accomplish them. This includes financial forecasting,
financial analysis, and financial performance evaluation.
Financial forecasting involves cash budgeting, profit planning, and balance sheet
forecasting. Cash budgeting is a forecast of cash needs and sources. Profit planning is a forecast of
revenues and expenditures. Balance sheet forecasting considers future assets, liabilities, and the
organization’s net worth position. On the other hand, financial analysis involves capital
budgeting techniques, operating leverage analysis, financial leverage analysis, and analysis of
pricing and costs. Capital budgeting involves the assessment of long-term investments.
Operating leverage analysis critically examines cost-volume profit relationships. Financial
leverage analysis studies the effect of debt on income to the organization’s common stockholders.
Analysis of pricing and costs of products, materials, supplies, and production/manufacturing
also fall under financial analysis. Financial performance evaluation refers to the assessment of
financial ratios to indicate the overall performance of the organization, as well as the
assessment of market-wide financial indicators.
IMPORTANCE OF FINANCIAL MANAGEMENT

Financial management facilitates the choice of investments, financial policies, and
operating mechanism of the organization in order to effectively achieve its goals and objectives. It
includes maximizing its profits as well as those of its shareholders and stockholders. In doing so,
financial managers are able to maximize the wealth of the organization and its
stockholders/shareholders and satisfy other goals like providing good customer service,
minimizing bankruptcy risks, and actively participating in present societal concerns.
To accomplish the abovementioned functions that give importance to financial management
in organizations, control techniques, that measure the company’s financial soundness,
management effectiveness, production and service efficiency, and human resource attitudes and
morale must also be considered. These include the following:
Break-even chart – is used by the organization’s financial management planners and
accountants to identify how the various sales levels affect the income and profits of the firm.
The break-even point is the level of operations which shows equal income and expenses
incurred by the company.
Financial statements – include income statements, balance sheets, and cash flow
statements which are carefully analyzed.
Financial ratios – make use of the above mentioned financial statements to determine the
formulation of a series of ratios that will, in turn, determine if the company is stable or unstable,
strong or weak and on the road to bankruptcy; examples of such ratios are rate of return on
capital invested, rate of return on assets, and rate of return on sales, among others.
Another functional statement used in financial management that also emphasizes its
importance is the organization’s budget. This states the amount of money that the company will
spend and receive during a future period of time. At the end of the period of operations, actual
expenses and budgeted amounts are compared to see whether the company has operated under
or over budget. Differences allow management to examine specific expenditures and the reasons
behind such. Managers and department heads will then be forced to quantify their sales objectives
and other company targets because these must be expressed in pesos and not in general
statements or hopeful or optimistic expressions. Budget preparation in financial management,
therefore, is important in management decision-making, and this must be prepared well on a
regular basis by all organizations.
E. INFORMATION AND COMMUNICATION TECHNOLOGY
MANAGEMENT (ICTM)
Management in the 21st century is driven by information and communication, and digital
network.. Computers quickly provide more information to a greater number of people, groups,
and organizations than ever before. Hence, the study of the information and communication
technology management (ICTM) functions of management is relevant:
The ICTM functions of management include the following:
Developing the organization’s hardware, software, and other computing and
communicating technology. Information technology (IT) encompasses different kinds of
technology, such as various types of hardware (e.g. computers and printers), software (e.g.
operating systems), and computing and communication technology (e.g. telecommunications and
management of databases). The fast and ever changing nature of ICT requires managers to
become flexible and open to change.
Developing the organization’s management information system (MIS) tailored to the
needs of the firm’s units. IT has developed management information systems which gather,
process, and disseminate internal and external information to the company on a timely basis
order to support managers in their tasks. Electronic equipment makes fast and reasonably priced
processing of voluminous amounts of data possible. The computer can process data and provide
logical conclusions, and classify and prepare them for use in decision-making.
Encouraging e-commerce through Internet use. Through e-business strategies, the
company gains competitive advantage over competitors. Common e-business strategies involve
business to business (B2B) and business to customer (B2C) transactions. B2B transactions use IT
and web portals to link companies with members of their supply chains or those dealing with
their resource supplies. B2C transactions also use IT and web portals, but in this case, the link
created is one between the company and its customers. A common example is e-tailing or the
sale of goods directly to customers via the Internet. Other web-based business models are
brokerage, which brings buyers and sellers together; advertising, which provides information while
generating revenue from advertisement; merchant model, or selling products through the web;
subscription model, the selling of access to a website; infomediary model, the collecting of
information on users and selling it to other businesses; and the community model which
supports websites by asking for donations from users.
IMPORTANCE OF INFORMATION AND COMMUNICATION TECHNOLOGY MANAGEMENT
The widespread use of ICT has brought about the emergence of a “knowledge-based society”
due to easy access to information at low costs through the Internet. Management may use it for its
different managerial functions. It may be used for scenario planning or identifying future
scenarios in the business environment, which may need careful planning; decision-making
through the use of information generated by IT; aiding team work; facilitating productivity
measurement; easy, low-cost communication; worldwide selling through the Internet; and many
others. It may be said, therefore, that ICT has revolutionized the business world.
DIRECTION: Recall the nature and roles of the different functional areas of management and
answer the crossword puzzle below. Write your answer in your own provided sheets. Entitle
your work as Q2 – Lesson 8.1 – Activity 4 – Let’s Work and Learn More.
Horizontal Vertical
2. health care, educational, and vacation leave 1. settle differences between labor and management
3. stimulation of demands for company product 4. bonuses
7. important in attracting qualified applicants 5. most important resource of management
6. the desirability of commercial products for sale
4
I
1
G
7
R
5
H
2
E
3 6
M A
ACTIVITY 5: MY REFLECTION!
DIRECTION: Let us apply your learning in the discussion above. Write your answer in your
own provided sheets. Entitle your work as Q2 – Lesson 8.1 – Activity 5 – My Reflection.
1. Explain in 8-10 sentences. In this activity, I learned that….

functional areas of management?
ACTIVITY 7: DO ME!
DIRECTION: Explain the questions below. Write your answer in your own provided sheets.
Entitle your work as Q2 – Lesson 8.1 – Activity 7 –Do Me.
1. As a part of the company’s management team. How are you going to manage your people
so that they can earn a living and feed their families without risk their health in the midst
of the pandemic?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
PROCESS QUESTIONS:
1. How does management work?
2. Among the functional areas of management, which one is the most important?
3. If one, two, or three functional areas of management disappears, will each department
still able to maintain a good working relationship?
CHAPTER 9:
SPECIAL TOPICS IN MANAGEMENT
Innovative, creative, and intuitive thinking in business management helps entrepreneurs

come up with great ideas or new strategies that may lead to the successful achievement of their
goals—service, growth, and profitability. The same entrepreneurial mindset is valuable in
today’s highly competitive and ever-changing business world. It answers the need for the creation
of new products and the development of new services for society’s benefit.
In addition, entrepreneurship also has socio-economic contributions. It provides
employment, not only to the entrepreneur, but to fellow Filipinos. Thus helping ease
unemployment. Entrepreneurship provides additional sources of taxes for the government,
hence contributing to Philippine economic progress.
Lesson No. Topic/Title You’ll learn to…. Estimated

Time
Chapter 9: 1. Small Business  Explain the steps and
Special Topics Management and importance of starting a 1 week
in Management Entrepreneurship family business
Pre-Assessment.
FILL-IN-BLANKS: Direction: Identify what is being asked below. Write your answer in your
own provided sheets.
1. Business owned by one person is called _____________.

2. Business registration documents have to be submitted to the Department of ___________
for commercial registry.
3. The external _____________ environment includes the business organization’s
customers and suppliers.
4. The _____________ serves as the roadmap which the business must follow.
5. The _____________ data refers to capital needs, available funds, and possible loan
services.
6. The_____________ is the business formed when two or more persons formally agree to
be joint owners of the said business.
7. The _____________ is the innovative, creative, risk-taking, and growth-oriented
behaviour _____________ that bring about new opportunities for individuals and
organizations to start a new business and produce new products those are beneficial for
society.
8. The _____________ target market considers the population, customers’ age, education,
income, and marital states.
9. Entrepreneurs must be _____________ to adapt to the changing environmental
conditions.
10.A _____________ is elected by stockholders on a regular basis to manage corporations.
Lesson 9 . 1
SMALL BUSINESS MANAGEMENT AND ENTREPRENEURSHIP
Business opportunities are waiting for people who have creative and innovative minds.
However, following a systematic process is crucial in the pursuit of entrepreneurial ventures.
Moreover, business success is also determined by certain traits that are required of an
entrepreneur.
For us to come up with new strategies and great ideas that will lead us to successful
achievement of our goals, we must be innovative, creative and intuitive in business
management which are valuable in a highly competitive and ever changing business world. It
also addresses the need for the creation of new products and development of new services for
society’s benefit.
ACTIVITY 2: IDENTIFY ME!

Direction: Arrange the entrepreneurial process accordingly. Number 1 is the first and 7 is the
last. Write your answer in your own provided sheets. Entitle your work as Q2 – Lesson 9.1
– Activity 2 – IDENTIFY ME.
______A. Develop a Business Plan- defined as the road map which the business must follow
utilizing the resources at hand while keeping the environment in mind.
______B. Find the Target Market- use of statistical tools to decide which of the whole market
they can serve in the best possible manner.
______C. Formulate the business vision and mission statement- vision provides where the
business venture in the future and mission states its basic purpose and scope of
operation.
_____D. Implement and Monitor the Business Venture- follows after careful business
planning, choosing the right people, considering the correct timing of business
implementation and monitoring business ventures progress.
______E. Maximize The Utilization of Business Ventures. Considering ways on how to
finance the business by debt or equity financing. Human and physical resources must
also be fully utilized.
______F. Segment the market- identifying specific groups to cater by geographical,
demographical, psycho-graphical, or behavioral.
______G. Understand the environment- internal or external factors that may cause changes
that may greatly impact the business. External factors have two types:
microenvironment and macro-environment.
SMALL BUSINESS MANAGEMENT AND ENTREPRENEURSHIP
THE ENTREPRENEURIAL PROCEDURE
Business opportunities are waiting for people who have creative and innovative minds.
However, following a systematic process is crucial in the pursuit of entrepreneurial ventures.
This entrepreneurial procedure involves the following steps:
1. Formulate the business vision and mission statements. The business vision of the
organization provides a picture of where the entrepreneurial venture is headed and what
the organization can become in the future. Its mission states the basic purpose and scope of
the organization’s operations.
2. Segment of the Market. A business cannot entertain or offer goods and services to
society at the onset in a large scale. It first must identify a specific segment or group of
people it may cater to or what is called a target market. The basis for segmenting the
market to find the target market may be geographical, demographical, psycho-graphical,
or behavioral.
a. Geographical. Market segmentation may be used on location (city, province,

region, or country; north, south, east, or west).
b. Demographical. Demographical bases consider population and can further be
extended to include age, income, education, marital status, and other related
information.
c. Psycho-graphical. Psychographics looks into people’s interests, values, attitudes,
opinions, and lifestyles.
d. Behavioral. Segmentation may be based on people’s behavior toward purchasing or
spending, or toward a product or service.
3. Find the Target Market. After getting enough information about the overall market, the
firm can use statistical tools to analyze this information and help them decide which part
of the whole market they can serve using their resources in the best possible manner. That
part of the market which the company is willing and capable of servicing is known as the
target market of the business.
4. Understand the Environment. Why should we study the environment? Things around
us are not permanent and everything changes. These changes greatly impact business. In
some situations, businesses control the consequences of change, however, this is not
always the case. When businesses can no longer control the situation, they are left with no
option but to change in consideration of the environment surrounding them.
Environmental factors that affect business may either be internal or external.
Internal factors are environmental factors within the company and can be controlled.
These include the employees, management, physical facilities, and so on. On the other hand,
external factors have two types: microenvironment and macro-environment. Microenvironment
includes customers and suppliers, whereas macro-environment includes economic, sociocultural,
technological, legal, political, and natural factors, as stated by Kotler (1997).
5. Develop the Business Plan. We can define a business plan as the roadmap which the
business must follow utilizing the resources at hand while keeping the environment in
mind. A business plan has the following contents:
a. executive summary – contains the overview of the business and its major plans
b. environmental analysis – includes study of internal and external organizational
surroundings
c. industry analysis – includes study of trends in the economy, legal requirements, and
possible risks
d. market analysis – includes analysis of market size, business competitors’
strengths/weaknesses, and short-term sales goals
e. company description – mentions ownership, mission and vision of the
organization, registration legalities, etc.
f. marketing and sales activities – strategies for distribution, promotion, and pricing
of products/services
g. products and services – refers to descriptions of good/services and their unique
features
h. operation – refers to descriptions of manufacturing and service methods, supplies and
suppliers, and control processes
i. management and ownership – refers to identification of owners and
administrators
j. financial data – includes capital needs, financial projections for one to five years,
available funds, and possible loan services
k. time table – refers to estimated completion dates of ventures
Business planning is important as it helps minimize business risks and expenses needed
for the production of goods and carrying out services. It may also determine financial
requirements and programs of activities in advance.
Implement and Monitor the Business Venture. This step follows after careful business
planning. Choosing the right people to work with and considering the correct timing for the
business implementation are important. Monitoring the business venture’s progress is also a
must to check if its implementation is proceeding in the right direction or if modifications are
needed along the way.
Maximize the Utilization of Business Resources. Consider the basic ways of financing
business ventures such as debt financing by taking loans from reputable institutions and equity
financing which exchanges ownership shares in return for an outside investment if additional
capital is needed. Human resources and other material or physical resources must also be fully
utilized.
Aside from the procedure mentioned above, business success is also determined by
certain traits that are required of an entrepreneur. Some of these entrepreneurial characteristics
are listed below. Entrepreneurs must be:
Creative and Innovative. Entrepreneurs must have a creative and innovative mindset
and must think out of the box to survive competition and at the same time have competitive
advantage over rival organizations. These are the characteristics that differentiate entrepreneurs
from businessmen.
Good planners. Planning, on the part of the entrepreneur, bridges the gap between where
they are and where they want to go. In other words, it shows the right business direction that
would lead them to success.
Customer-oriented. Entrepreneurs must be customer-oriented to shape their market

offerings and create value in their customers’ minds.
Open-minded. Entrepreneurs must always be open and willing to entertain the

suggestions of team players/employees to encourage the generation of ideas which may be
beneficial when implemented. Learning is a never-ending process and entrepreneurs can also
learn by being receptive to the ideas of people around them.
Flexible. Entrepreneurs must be flexible in order to adapt to changing environmental

conditions. Flexibility comes in relation to changing the strategies, policies, and utilization of
business resources.
Persistent. There is no shortcut to success, and that is why it takes time to attain the
objectives of the company. In the long run, things will not always fall under the control of the
business managers. During times of change and hardship, the entrepreneur must not give up,
especially when things are not favorable for business. Entrepreneurs must be persistent until
their goals are achieved.
Confident. Entrepreneurs must be confident about their own abilities, together with the
abilities of their other team members. They must think positively and believe in their
capabilities and they must not doubt that they can accomplish the most challenging tasks at
hand.
Organized. Entrepreneurs must be well-organized when it comes to all activities of the
business. A well-organized entrepreneur makes sure that their organizational structure furnishes
an environment where individual performance, both present and future, contributes effectively
and efficiently to group endeavors.
Updated/Well-informed. To ensure achievement of entrepreneur ial goals, entrepreneurs

must continuously seek important, up-to-date information regarding their market customers,
rivals in business, and suppliers. Expert opinion must also be sought to be well-informed.
Team players. Entrepreneurs must be able to work well with others. In unity, there is
strength; good coordination with others will ensure business success.
Knowledgeable. Entrepreneurs must have expert knowledge about the product or service they
want to sell, their competitors, and local/regional/ national markets so that they will have better
chances of succeeding.
Risk-takers. Entrepreneurs are not afraid of risks and are ready to meet business
challenges. However, they prefer calculated risks since they are aware that business
undertakings may result in either success or failure, profit or loss.

DIRECTION: Identify at least 3 successful local entrepreneurs here in the Philippines wherein
their success stories were featured on magazine or online articles and follow the instruction
below. Write your answer in your own provided sheets. Entitle your work as Q2 – Lesson 9.1
– Activity 4 – Let’s Learn More.
A. Read carefully the success stories of their business.

B. Cut and paste the feature article of the 3 entrepreneurs in a white bond paper.
C. Submit your output online or hard copies.
ACTIVITY 5: MY REFLECTION!
DIRECTION: Let us apply your learning in the discussion above. Write your answer in your
own provided sheets. Entitle your work as Q2 – Lesson 9.1 – Activity 5 – My Reflection.
1. Explain in 8-10 sentences, if you want to pursue an entrepreneurial venture in the future,
what form would you like to establish? Why?
1. As a Damean, how could you relate the core values NOTRE DAME in
entrepreneurship?
ACTIVITY 7: DO ME!
DIRECTION: Explain the questions below. Write your answer in your own provided sheets.
Entitle your work as Q2 – Lesson 9.1 – Activity 7 –Do Me.
REFLECTION:
1. For me entrepreneurship is _____________________________________________
_______________________________________________________________________
_______________________________________________________________________
2. Its benefits and contributions to the society are __________________________________
_______________________________________________________________________
_______________________________________________________________________
3. Entrepreneurial procedures includes: _____________________________________
_______________________________________________________________________
_______________________________________________________________________
4. Entrepreneurial characteristics are: ______________________________________
_______________________________________________________________________
_______________________________________________________________________
5. The benefits/advantages of complying with government legal requirements of starting a
business are ________________________________________________________
_______________________________________________________________________.
GODBLESS YOU!
MAAM JHOY   

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LEARNING MODULE

Grade &Section __ABM 12- ST. EUGENE DE MAZENOD ____

Subject Teacher __________JOY C. LOBIANO_____________

Class Adviser _________THELMA S. LANADO____________

FOR PRIVATE USE

Overview & References

This management course are described as an introduction to the realm of

1. Read all instructions carefully and follow them diligently.

ORGANIZATION AND MANAGEMENT

Introduction To The Different Functional

Special Topics in Management

Lesson Topic/Title You’ll learn to…. Estimated

ACTIVITY 2: WORD MAPPING!

ACTIVITY 3: PICTURE ANALYSIS!

1. Based from the pictures above, how do you define staffing?

2. Why is it important to have a proper choice of employees?

ACTIVITY 4: LET’S DISCUSS

DEFINITION AND NATURE OF STAFFFING

THE MANAGEMENT AND NON-MANAGERIAL HUMAN RESOURCES

Staffing steps include:

ACTIVITY 5: LET’S LEARN MORE

1. What is the significance of staffing functions?

2. How does staffing function related to organizing?

ACTIVITY 7: LET’S DO THIS…

ACTIVITY 8: UNDERSTAND ME!

ACTIVITY 1: MY IDEAS ABOUT RECRUITMENT!

Recruitment In what ways they attract How they attract

ACTIVITY 2: LET’S DISCUSS

RECRUITMENT AND SELECTION

Recruitment may either be external or internal. In external recruitment, outside sources

METHODS OF EXTERNAL AND INTERNAL RECRUITMENT

a. Advertisements – through websites, newspapers, trade journals, radio, television, billboards,

As mentioned earlier, internal recruitment is done within the organization. Most

External Recruitment Advantages

External Recruitment Disadvantages

Internal Recruitment Disadvantages

 The number of applicants to choose from is limited.

In many companies, selection is continuous because of fast turnover, resulting in

1. Establishing the selection criteria – Selecting human resources in an organization requires

Step 1 – Determining a need

Step 2 – Application search and selection

Step 3 – Decision-making process

b. Notification and employment offer

Step 4 – Adaptation to the workplace

Types of Employment Tests

The Selection Process

1. Preliminary Interview 5. Physical and Mental Examination

Limitation of the Selection Process

ACTIVITY 3: LET’S LEARN MORE

1. Justify the letter of your answer?

a. Atty. Kizze Magalang, the Human Resource Manager

Justify your answer:

ACTIVITY 5: LET’S DO THIS…

ACTIVITY 6: UNDERSTAND and MATTCH ME!

SELECTION PROCESS DEFINITION

ACTIVITY 2: LET’S DISCUSS

COMPENSATION/WAGES AND PERFORMANCE EVALUATION

CONNECTING COMPENSATION TO ORGANIZATIONAL OBJECTIVES

Worker compensation/wages had tremendously changed in the 21 st century due to

FIGURE 5.6 Pay equity is among the important

Compensation: A Motivational Factor for Employees

Bases for Compensation

 inadequate orientation of the evaluatees regarding the objectives of the program;

Grade &Section ABM 12- ST. EUGENE DE MAZENOD __

Subject Teacher JOY C. LOBIANO___

Class Adviser _THELMA S. LANADO____