MANAGING

THE HUMAN
RESOURCES
FUNCTION
 Human Resources Function
*People are the lifeblood of any enterprise…
Human Resources Function can actually
be the most exciting function in management if
configured correctly.
HUMAN
RESOURCES
FUNCTIONS
• Choosing the right people with the right
competencies, values and attitudes
• Career pathing of personnel to reach their
optimum potential
Stratifying needs, wants and demands of
people and creating a conducive work
environment
• The organization’s goals are embraced and internalized by the people and the personal
goals of the people are realized and fulfilled while serving the organization.
• Rally the organization to meet challenges to develop a culture of excellence and to build
social capital
 Performance indicators and assessment

Criteria in measuring Potential

1. Person’s aptitude (knowledge, skills, competencies)

2. Attitudes an values (personality traits, personal prefeences)
Transforming people to
higher levels of performance
Maximizing potentials of people
in the organization
FORMS OF
BUSINESS
ORGANIZATION
 THE BUSINESS POPULATION
Percentage of Firms Percentage of Sales

Corporations
22 million businesses
72% 15.8M – SP; 20%
20% 4.4M – C; Partnerships
8% 1.8M - P 8% Corporations
Sole 84%
Proprietorships
72%

Partnerships 11%
Farmer Sole Proprietorship 5%
 Business Failures

Over 500,000 small businesses are launched each year.

One third of these start-ups fail within two years.
Forms of Business Organization

• Sole Proprietorship

• Partnership

• Corporation
SOLE
PROPRIETORSHIP
• Single owner called the
proprietor

Sole proprietorships tend to be

small service –type (e.g.
physicians, lawyers, and
accountants) businesses and
retail establishments (sari-sari
store).
Advantages of a Sole Proprietorship

• Easy to form–no complicated legal

documents or complicated tax forms,
small amount of capital needed

• Owners receive the entire profit.

• Total control – can make decisions

quickly, can hire and fire easily,
can respond quickly to trends.

• Easy to quit the business if the

owner decides to do so.
There are no co-owners
to consult.
 Disadvantages of Sole Proprietorship
• Unlimited liability (debt) - have to forfeit
their personal possessions as well as their
businesses

• Burden of sole responsibility

• Limited potential for growth

I want medical benefits!

• Difficult to attract qualified employees

• Short life span – depends on owner’s health

and competence. If the owner dies, it is over.
 Article 1767 of the Civil Code of the Philippines

A partnership is a business owned and operated by two or

more persons who bind themselves to contribute money
property, or industry to a common fund, with the intention
of dividing the profit among themselves.
Two Forms of Partnership
1. General – equal decision making
& unlimited liability
among partners.
2. Limited – some non-active
partners join as an investor
(and thus have limited liability
-just the investment.
He is a “silent” partner.)
Let’s say your silent partner puts up $30,000 to insure the loan.

I gave $30,000 as a silent partner, so

I don’t have to do anything.
 Demonstration of “Unlimited Liability”
Harold Nodoe, Gloria Poor and Jack Rich owned the
Trio Dress Shoppe as a partnership. Under the terms of
Their partnership agreement, Nodoe and Poor were
entitled each to 40% of the profits, while the remaining
20% went to Rich. Last month the firm collapsed. After
selling off everything it owned, the company still owed
its creditors $10,000. Since Nodoe and Poor had no
assets of their own, the creditors recovered the total
amount owed to them from Jack Rich’s personal bank
account.

Harold Nodoe Gloria Poor Jack Rich

 Advantages of Partnership
[“Two heads are better than one.”]

• Sharing of losses
-can borrow more and
can sustain heavier losses.

• Easy to form
-small amount of money to
start & operate

• Shared decision making

Disadvantages of Partnership

• Disagreements among partners –

conflicts delay decisions,
lower employee morale
& lessen efficiency
Take That!

• Have to share the profits

• Unlimited liability – can lose

their personal possessions

• Limited life – sickness, conflicts,

or death can end the partnership.
BATAS PAMBANSA BLG. 68: THE CORPORATION CODE OF THE PHILIPPINES
Section 2. Corporation defined.

A corporation is an artificial being created

by operation of law, having the right of
succession and the powers, attributes and
properties expressly authorized by law or
incident to its existence
Stockholders –the owners of a corporation
who invest by buying shares.
Stock – the certificate of ownership

Two Types of Corporations

• Publicly owned – anyone can invest by
buying shares

• Closed – is owned by a limited number

of stockholders.
Example: Ford Motor Company was family owned (closed) until
1956. They went public in 1956 & issued 10,200,000 shares of stock.
If a company had only 200 shares
and you bought a share, you would
own 1/200th of the company.
Advantages of Corporations from a Stockholders Viewpoint

1. Limited liability – limited to the amount invested.

His personal assets may not be seized to pay
corporate debts.

2. May earn a profit without working

Advantages From the Corporation’s Viewpoint

1. Separation of ownership from management

– can hire the best management available
Specialized talent can be hired in all areas.

2. Easy to raise capital – can issue stocks or sell bonds

3. Longevity – they have a life independent of their owners.

 Disadvantages of Corporation

1. Slow in decision making – must go thru chain of

command

2. Many government restrictions – must follow regulations

of the SEC, comply with laws and
maintain many records.

3. Heavy organizing expenses

4. Double taxation – when a company distributes profits

(dividends) to its stockholders, they have to pay
personal income tax on dividends.
Corporations earnings are subject to taxation.
.
Advantages/Disadvantages of Sole Proprietorships
Advantages Disadvantages
Freedom Unlimited Liability

Ease of Formation Lack of Continuity

Difficulty
Low Start-up Costs
Raising Money

Single Taxation Reliance On

One Person

Advantages/Disadvantages of General Partnership

Advantages Disadvantages
Larger Talent Pool Unlimited Liability

Larger Money Pool Lack of Continuity

Ownership
Ease of Formation Transfer Difficult

Possibility of
Single Taxation Conflict
 Advantages/Disadvantages of Corporations

Advantages Disadvantages
Limited Liability
Stockholder Revolts
Continuity
High Start-up cost
Greater likelihood of
professional Management
High Cost of
Regulation
Easier Access to Money
Double Taxation
MISSION,
VISION,
OBJECTIVES
AND
CORE VALUES