INTRODUCTION

By the end of this topic, the student

should be able to:
 Explain what organizations are and their
basic purpose for existence.
 Explain what management is and its basic
purpose for existence.
 Identify the functional areas of
management in organizations and discuss
their respective roles as well as their
interdependence.
 What Is An Organization?

Two or more persons

working together
to achieve common objectives
4 Elements Of An Organization

T Community – two or more persons

 Common purpose – common objectives

 Cooperation – working together

 Coordination – working together as one

towards one direction
 Why Do Organizations Exist?
Organizations exist to satisfy needs
 Every human being has needs; but
 No one can satisfy all his needs on his own.
 Therefore, everyone needs others to satisfy at least some
of his needs; but
 No one can satisfy others’ needs on his own.
 Therefore, anyone who would like to satisfy others’ needs
must work together with others who aim to satisfy the
same set of needs.
 As the organization satisfies others’ needs, its own
needs, in turn, are satisfied.
Stakeholder - a person or group with
a direct interest, involvement, or
investment in the organization.
 Stakeholders of an Organization
Shareholders Employees Consumers
• return on investment • higher pay • safe and reliable
• security for their • more benefits products at
money • job security reasonable prices

Suppliers
• Government
• taxes
ORGANIZATION • compliance
Financial with the law
institutions
•
Competitors
Community • fair play
Labor unions • “good corporate citizen”
• • maximum number of jobs
with minimum pollution
How Do Organizations Accomplish Their Purpose?
By creating goods and providing services
Value-added

Suppliers Organization Customers

Resources Products
 Manpower
 Goods  Needs
 Money
 Services  Wants
 Materials
 Demands
 Machines
 Methods
 Moment
 Information

P
 What Is Management?
The process of working with resources
 What Is Management?
Management is a process – it consists
of a series of actions, changes, and
functions designed to bring about
desired results.
 What Is Management?
Management involves working with
resources – the 7Ms: manpower, money,
materials, machines, methods, moment
(time) – and mformation.
 What Is Management?
The process of working with resources
by performing the functions of planning,
organizing, staffing, leading, and controlling
 What Is Management?
The management process involves
performing the managerial functions of
planning, organizing, staffing, leading,
and controlling.
Management Functions

PLANNING

CONTROLLING ORGANIZING

LEADING STAFFING
 Planning
 Involves choosing or setting objectives
and then determining the course of
action needed to achieve them.
 Planning
INPUT PROCESS OUTPUT

1. Analyze the environment

 Vision and 2. Set the objectives Plans
Mission 3. Determine the  Objectives
Statement alternative courses of
action (strategies)  Strategies
 Opportunities 4. Evaluate the strategies
and Threats 5. Select the best strategy  Policies
6. Plan the implementation
 Strengths and 7. Plan the evaluation of
Weaknesses results
 Organizing
 Involves determining the activities and
resources required to implement the
strategies, combining them into a formal
structure, assigning responsibilities, and
delegating authority.
 Organizing
INPUT PROCESS OUTPUT

1. Consider the plans

Plans 2. Determine the activities
 Objectives and resources required to
implement the strategies
 Strategies 3. Classify and group the
activities and resources
 Policies 4. Assign responsibility and
delegate authority
5. Design the hierarchical Organization chart
structure
 Staffing
 Involves filling, and keeping filled, with
the right people the positions in the
organizational structure.
 Staffing
PROCESS
INPUT 1. Human resource OUTPUT
planning
2. Recruitment
3. Selection
4. Induction and
orientation
5. Training and
development
6. Performance
appraisal
Organization chart 7. Promotion, transfer, Filled-up
demotion organization chart
8. Separation
 Leading
 Involves influencing people so that
they will do their best, in harmony with
the other members, to contribute to the
achievement of the organization’s
objectives.
 Leading
INPUT PROCESS OUTPUT

• Leadership

• Motivation

• Communication

Filled-up Motivated and

organization harmonious
chart organization
 Controlling
 Involves devising ways and means to
ensure that the planned performance is
actually achieved.
 Controlling
INPUT OUTPUT
PROCESS

1. Set performance
standards
2. Measure actual
performance
3. Compare actual
performance vs. the
standard
Motivated and 4. Take corrective Organization
harmonious action, if necessary achieves
organization objectives
 What Is Management?
The process of working with resources
by performing the functions of planning,
organizing, staffing, leading, and controlling
to create a positive environment where
people can harmoniously work together
to achieve organizational objectives
effectively and efficiently
Primary Purpose of Management
 Promote Relationships
To create a positive
environment where people
can harmoniously work
together

 Achieve Results
To achieve organizational
objectives effectively and
efficiently
 What Is Management?
It is not enough that the organization
achieves objectives; managers must see
to it that these objectives are achieved
effectively and efficiently.
Effectiveness
 Doing the
right things
An organization is
doing the right things
if these contribute
towards the
achievement of the
right objectives.
Effectiveness – What it is

 Effectiveness is an
organization’s ability to
set the right objectives
and to do the things
that enable it to
eventually achieve
those objectives.
Effectiveness
But when is a set Vision – what
objective a right the organization
objective for an sees itself
organization? becoming into.

An objective is right Mission – why

the organization
when the organization
exists; the
gets closer to its
organization’s
avowed Vision and
basic purpose for
Mission, once that
existence.
objective is achieved.
 Vision-Mission
We envision SLU as an excellent missionary
and transformative educational institution
zealous in developing human resources
imbued with the Christian Spirit
and who are creative, competent, and
socially involved.
Efficiency
 Doing
things right
An organization is
doing things right if it
is achieving its
objectives using
minimum amount of
resources.
 What Is Management?
The process of working with resources
by performing the functions of planning,
organizing, staffing, leading, and controlling
to create a positive environment where
people can harmoniously work together
to achieve organizational objectives
effectively and efficiently
in an ever-changing environment
 What Is Management?
Managers – the people in the
organization who are responsible for the
management process – need to be
continually aware that the organization
exists as a part of an environment that is
constantly changing; thus, the need for
organizations to be continually adaptive
organisms.
 Management  Functional Areas
Functions of Management
Major Functions
 Planning  Finance
 Organizing  Production/Operations
 Staffing  Marketing
 Leading Minor Functions
 Controlling HRM, Purchasing,
Maintenance, Account’g,
MIS, Public relations, etc.
 Major Functional Areas of
Management In An Organization
Production/
Operations

Finance Marketing

 The functional areas of management are interdependent.

 Finance
 Financing  Investment
Decisions Decisions
Acquisition of Allocation of
financial resources financial resources
 Selling assets  Economic analysis
 Increasing debt of investment
 Issuing shares of proposals
stock  Capital budgeting
 Combination  Provision of funds
 Marketing

 People decisions
 Product decisions
 Promotion decisions
 Place decisions
 Price decisions
 Marketing

 People decisions
– who are our customers?
– what are their needs, wants, and
demands?
– how would they want their needs,
wants and demands satisfied?
 Marketing

 Product decisions
– what goods or services would
satisfy the needs, wants, and
demands of our customers?
– what features should these goods
or services have?
 Marketing
 Promotion decisions
– how do we make our customers
aware of the existence of our
products?
– how do we attract their attention to
our products?
– how do we arouse their desire to
avail of our products?
 Marketing

 Place decisions
– how do we make our products
readily accessible to our
customers?
– how do we make it easy for our
customers to avail of our products?
 Marketing

 Price decisions
– how do we price our products?
– how much do we charge for the
products that our customers avail of?
 Production/Operations
 Transforming inputs (resources) into
outputs (goods and services) through a
transformation or conversion process.
INPUT PROCESS OUTPUT
Resources Products
 Manpower  Physical  Goods
 Money  Physiological  Services
 Materials  Storage
 Machines  Locational
 Methods  Exchange
 Moment  Informational
 Minor Functions
 Personnel or human resource management
is responsible for the manpower resources.
 Purchasing is responsible for providing the
organization’s machine and material
resources.
 Industrial engineering is responsible for the
work methods that enable the organization to
effectively and efficiently create the goods or
provide the service.
 Minor Functions
 Accounting is responsible for recording the
business transactions of the organization as
well as preparing its financial statements –
balance sheet, income statement, and cash flow
statement.
 Management information systems is
responsible for gathering, processing,
organizing, and disseminating information.
 Minor Functions
 Distribution is responsible for transporting the
organization’s goods to warehouses,
wholesalers or retailers, or final customers.
 Public relations is responsible for establishing
and promoting a favorable relationship with
the public.
 The Functional Areas are Interdependent with
Production Operations as the Core Function
INPUT
Resources
OUTPUT CUSTOMERS
 Money Finance Products

 Manpower HRM
 Goods  Needs
Maintenance

 Materials
 Services  Wants
 Moment Purchasing P/O Marketing
 Demands
 Machines
Accounting
 Methods IE

 Information MIS
 Just as each of us has one body
with many members,
and these members do not all have the
same function,
so in Christ we who are many
form one body,
and each member belongs to all the others.
Romans 12:4-5 (NIV)
 Each one should use
whatever gift he has received
to serve others,
faithfully administering God's grace
in its various forms.
1 Peter 4:10 (NIV)
 Decision Areas in P/O M
Planning & Design Decisions
Operation & Control Decisions
 Decision Areas in P/O M
Planning & Design Decisions
 Quality Management
 Forecasting
 Product/Service Design
 Process Selection and Design
 Capacity Planning
 Facility Location
 Facility Layout
 Design of Work Systems
 Decision Areas in P/O M
Operation & Control Decisions
 Inventory Management
 Scheduling
 Maintenance
 Project Management
 Decision Areas in P/O M
 Quality Management – how do we make
sure that our products meet or exceed the
requirements of our customers?
 Forecasting – how many units of our
products will be demanded by our
customers or how many customers might
avail of our services in the future?
 Product/Service Design – what products
and product attributes would best satisfy
our customers?
 Decision Areas in P/O M
 Process Selection and Design – what’s
the most effective and efficient way to
create our products or provide our
services?
 Capacity Planning – how large should
our facility be; i.e., how many units of the
product should it be able to produce or
how many customers should it be able to
accommodate at any given time?
 Decision Areas in P/O M
 Facility Location – where do we locate
our facility – near suppliers or near
customers?
 Facility Layout – how do we arrange the
various equipment, departments, and
workstations in our facility?
 Design of Work Systems – how do we
make a good fit between our workers, their
work, and the work environment to
maintain their motivation and productivity?
 Decision Areas in P/O M
 Inventory Management – which of the
inventory items should we prioritize and
closely monitor? How much of each
should we stock? When do we order or
make each item and how much do we
order?
 Scheduling – which worker, equipment, or
workstation will perform which task, and
when or in what sequence?
 Decision Areas in P/O M
 Maintenance – how do we maintain our
equipment and facilities in good working
condition?
 Project Management – how do we finish
the project on time, at minimum cost, and
according to the requirements of the client
who commissioned it?