Professional Documents
Culture Documents
A S P E C T S
A N D
L E G A L R E Q U I R E M E N T S
TOPICS
1. Definition of Management 7. Compensation
2. Principles of Management 8. Organizational Policies
3. Functions of Management 9. Legal Requirements
4. Necessity of Management
5. Symptoms of Bad Management
6. Recruitment (Under of recruitment, there are,
• Selection
• Training
I. Definition of Management
• Management is defined as an art of getting things done through people.
• Management is a distinct process consisting of activities such as
planning,organizing, staffing , directing and controlling to achieve the desired
results.
• The goals of the enterprise are fulfilled through the use of resources like men,
money, materials and machines.
• Managerial skills are required to exploit these resources and earn profit, face
competition and ensure long survival and growth of an enterprise.
II. Principles of Management
1. Division of Work - It promotes efficiency. It ensures work to be executed in limited field cause
segregating work ( toka-toka )in the workforce.
2. Authority and Responsibility - Authority and responsibility should always go together cause
these two are the key aspect of management. The manager needs to have the necessary authority
in order that his instructions are carried out by the employees.
3. Discipline - Poor performance is due to lack of discipline. In order to have disciplined
employees , managers need to build a culture of mutual respect & organizational rules .
4. Unity of Command - A subordinate should take orders from one supervisor only. There should
be a clear chain of command in the organization.
5. Unity of Direction - The work to be done should be organized in such a way that employess
work in harmony towards the same objective, using one plan, under the direction of one manager.
6. Subordination of Individual Interest to General Interest - Interest of organization is higher than
interest of individuals to achieve the goal of company.
7. Remuneration of Personnel - Payment to workers should be fair. There should be a proper
method of payment. It includes both financial and non-financial incentives.
8. Centralization - There should be one central power in the organization with power and control
of overall work.
9. Order - There should be an orderly placement of resources (M”s mgt.)in the right place at the
right time. Misplacement of these resources will lead to misuse and disorder in the organization.
10. Equity -The managers should use kindliness and justice towards everyone they manage. This
creates loyalty and devotion among employees for the management.
11. Stability - An organization should work to minimizestaff turnover and maximize
efficiency.There should be a clear and effective method to handle vacancies when they arise
because it takes time and epense to train new ones.
12. Initiatives - Is to help an employee to increase their interest and make them worth.
Organizations should listen to the concerns of employees and encourage them to develop and carry out
plans for imrovement.
13. Scalar Chain- refers to a clear chain of communication between employees and their superiors. Employees should know
where they stand in the hierarchy of the organization and who to go in a chain of chain of command.
14. Espirit de Corps-Management should strive to create unity, morale and co-operation among the employees . Team spirit is
a great source of strenth in the organization.
III. Functions Of Management
A management is someone who can lead, a function beyond planning. A management
has to work with their team to achieve larger goals. Major tasks of management involve
the following:
• Forecasting
• Coordinating
• Organizing
• Managing
• Direction
• Motivating
• Controlling
Major tasks of management involve the following:
III
1. Forecasting
forecast, cost, finance requirement, capital expenditure, profit and loss, etc.
2. Planning
produced, when to be produced, and who will produce. The planning also
3. Organizing
After completion of planning, the next step is to arrange the material, money,
and work for actual execution or production. This function consists of material
4. Directing
The next step is directing the plan into operation. The person must have
dynamic leadership for giving direction and guidance to the subordinates. The
instructions must be simple, clear, complete and reasonable in writing. The staff
5. Motivating
A capable person without motivation will not give his full output.
6. Co-ordination
The management must control so that actual performance matches with the plans
without any defects. The shortcomings must be rectified and these should not be
repeated. The following controls are needed: Quantity control, cost control, material
control, production control. Some standards are needed for performance evaluation
and control.
8. Communication
the organization, loss and profit are affected by the decisions of the
management.
IV. Necessity of Management
organizations.
V. SYMPTOMS OF BAD MANAGEMENT
1. Haphazard and unplanned activities.
The rules and regulations stated are important to achieve total efficiency
and harmonious relationship. Discipline is a key factor in any business
undertaking. It promotes greater efficiency in business operations, creates a
general condition of orderliness conducive to greater manpower productivity,
reinforces the moral dignity of all employees, and most of all enhances
company prestige.
VIII. B Selection
The pay scales shall be set based on the minimum wage in the region or place of
the business and the result of the salary survey that match the industry standards.
XI. Legal Requirements
This section explains the enlisting of the proponent's business for formal organization which
The government requires all enterprises of whatever size, type, and form to secure a permit before it
can do business. Business registration involves enlisting the enterprise with the proper government
ADVANTAGES
Low Cost of Formation and Dissolution - It is easy and cheap to start, and it is also easy and cheap to
dissolve. It requires small capital and there is less legal paper needed. A license from the Department of
Trade and Industry and a business permit from the city or municipal government are required.
Independent Flexibility - The owner is usually the boss also. He makes his own decision and implements
it, in accordance with his will or wish. There is a freedom in decision-making in the areas of marketing,
production, and finance. There is no other person involved in managing the business.
Tax Advantage and Less Government Regulation - The owner does not pay several kinds of taxes. The
owner does not pay several kinds of taxes. The earnings are taxed as personal income tax because the
government has very minimal regulation and supervision over a single proprietorship. The business will
not be taxed, only the owner or the manager of the entity.
SOLE OR SINGLE PROPRIETORSHIP
It is a form of business organization that is owned and usually managed by one person. It is
the oldest and simplest form of business ownership. It is also easiest to start and manage. The
owner is also the general manager of the company.
DISADVANTAGES
Unlimited Liability - If the business fails, the owner will be liable for all financial obligations. The
creditors can get all his personal properties, including savings and personal belongings.
Limited Financial Resources - Banks and other financial institutions are usually not willing to lend large
amounts of money to single proprietorships. The manager’s assets alone will be the source of expansion
and improvement of the business.
Limited Business Skill and Knowledge - "Two heads are better than one" wants to emphasize that the
manager must be willing to extend or empower his skills and knowledge to capture the large market
considering that only a few people are gifted with so many talents.
PARTNERSHIP
It is an association of two or more people who act as co-owners of the business. Each partner contributes money, property, or services and their
profession to their organization. There are two types of partners: general partners and limited partners. The liability of a general partner extends to his
personal properties, while a limited partner is only liable to the extent of his contribution to the business. The capitalist partner contributes money,
property, and belongings. The industrial partner provides service, management, or even his profession.
ADVANTAGES
A. Easy to organize - Partnership is a relatively C. Retention of profits - Each partner gets all
easy to form, much easier than corporation. The the profits of his business. This stimulates the
legal requirement include articles and by laws of partners to improve their operation. If the
partnership to be submitted to the security and partner is a limited partner, the security of
exchange commission. Also registration with the maintaining the personal properties is strong
Bureau of Internal Revenue for a TIN (Tax than paying all the obligations.
Identification Number), business permit from the
city or municipal hall.
B. Availability of more capital and credit - D. Better business skills and knowledge -
Suppliers are willing to extend more credit to a Each member contributes his skills and
partnership than to single proprietors, as it lessens knowledge to the organization in a way that
the risk of limitation in funds. makes it more effective and efficient
PARTNERSHIP
It is an association of two or more people who act as co-owners of the business. Each partner contributes money, property, or services and their
profession to their organization. There are two types of partners: general partners and limited partners. The liability of a general partner extends
to his personal properties, while a limited partner is only liable to the extent of his contribution to the business. The capitalist partner contributes
money, property, and belongings. The industrial partner provides service, management, or even his profession.
DISADVANTAGES
A. Unlimited liability - Each general partner is personally responsible for all the debts of the business.
Even the personal property of a general partner can be taken to pay creditors. However, in the case of a
limited partner, only his investment is subject to risk.
B. Lack of stability - A partnership is terminated in case of the death, withdrawal of legally declared
insanity of any one of the general partners. A partner may withdraw his capital any time that he wishes not
to participate in the partnership.
C. Management Disagreement - It is true that two more heads are better than one. But if they do not work
in unity, chaos will be the result. Suspension of distrust and misunderstanding may crop up among the
partners.
CORPORATION
It is an artificial being created by operation of law, having the right of succession, and the powers, attributes and
properties expressed authorized by law or incident to its existence. Stocks are shares or certificate of ownership
of a corporation. The owners of stocks are called stockholders or shareholders. There are two types of
corporation: Private or close corporation and Open corporation:
2. Open corporation - It is owned by any individual who buys shares of stock which
are openly traded in the stock markets. They invite outsiders and open ownership to the
public to attract more funds as investments.
CORPORATION
It is an artificial being created by operation of law, having the right of succession, and the powers, attributes and properties
expressed authorized by law or incident to its existence. Stocks are shares or certificate of ownership of a corporation. The owners
of stocks are called stockholders or shareholders.
ADVANTAGES
A. Limited liability - The liability of the C. Stability of existence - The life of a
stockholders are only up to his shares of stock. In corporation does not end with withdrawal or
case the corporation becomes a failure, creditors death of the key owners. It can exist for 50
can only lay their claims on the assets of the years and is subject to renewal.
corporation, not the personal assets of the
stockholders.
D. Specialized management - The corporation
B. Ease in raising capital - Aside from bank loans can hire expert or specialist in the management
a corporation can sell shares of stock to the public of the business.
for additional funds.
CORPORATION
It is an artificial being created by operation of law, having the right of succession, and the powers, attributes and properties
expressed authorized by law or incident to its existence. Stocks are shares or certificate of ownership of a corporation. The
owners of stocks are called stockholders or shareholders.
DISADVANTAGES
A. Difficult to organize - It is difficult and quite expensive to organize a corporation. It
requires the services of a lawyer and account to prepare the legal forms and financial
documents to show evidences of its existence in order to operate.
B. Strictly regulated and suspended and supervised by the government - Corporation have
to comply with the government laws, policies, and regulations. They have to submit their
financial reports every year to concerned government agencies.
A. Open voluntary membership - Cooperative is not limited to a certain group of people but rather to other
group of individuals who are willing to be part of the organization.
B. Democratic control - One member can vote once same with the other members in the organization.
C. Limited interest on capital - When the cooperative earns, there is an equal distribution of interest on the
investment so as limitation is getting higher interest from the other member is practice in the organization.
D. Division of net surplus - Each member will receive a computed surplus to be distributed to the group.
E. Cooperative education - The organization will help educate each members through regular meetings and
seminar to help updated the group in some changes and ask suggestions if needed.
F. Cooperation with other cooperatives - Being registered under the Cooperative Development Authority; the
organization will be a member of the umbrella group.
INITIAL BUSINESS REGISTRATION
BUSINESS GOVERNMENT
FUNCTION
ORGANIZATION AGENCY
Barangay Halls Place where you will set up your business Barangay Clearance
END OF CHAPTER 3
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