CHAPTER 5:

MANAGEMENT
ASPECT FOR
ENTREPRENEURS
 Contents
01 Definition of Management 04 Levels of Management

02 Characteristics of 05 Types of Business Entities

Management

03 Management Functions or 06 Corporation vs. Incorporation

Management Process
 Introduction

- Every entrepreneur's ability is determined by his or her

managerial abilities. As a result, it is most appropriate to
consider business management abilities to be the foundation of
entrepreneurship. Managing a firm entails overseeing a large
number of different entities.
- Management is described as a set of well-defined and methodical
skills that are taught to persons who aspire to be managers. This
knowledge has evolved over time and is always changing and
expanding. In addition, these concepts and principles are applied
to a variety of business scenarios.
 Definition of Management

The coordination and administration of tasks to a attain a goal is

referred to as management. Setting the organization’s strategy
and organizing employee effort to achieve these objectives
through the application of available resources are examples
of administrative activities.
01 William Spriegel
"Management is that function of an enterprise which
concerns itself with direction and control of the
various activities to attain business objectives. 03 Terry
Management is essentially an executive function; it
"Management is not people; it is an
deals with the active direction of the human effort."
activity like walking, reading,
swimming or running. People who
perform management can be
02 Mc Farland designated as members of
management or executive leaders.”
"Management is defined for conceptual,
theoretical and analytical purposes as that
process by which managers create, direct,
maintain and operate purposive organization
through systematic, coordinated, co-operative
human effort.'
 CHARACTERISTICS OF MANAGEMENT
Management is a distinct activity with the following distinguishing
characteristics:

1. Economic Resources
Management is one of the components of production,
along with land, labor, and capital. The demand for
managers grows in tandem with the development of
industrialization.

2. Purposeful
Management is a goal-oriented activity, thus
it must be purposeful. It coordinates
employee efforts in order to achieve the
organization's goals.
 CHARACTERISTICS OF MANAGEMENT
Management is a distinct activity with the following distinguishing
characteristics:

3. Separate Process
Planning, organizing, staffing, directing, and managing
are all separate processes in management. These
functions are so intertwined that it's impossible to
pinpoint the order in which they occur or their
relative importance.

4. Integrative Force
The essence of management is the integration
of human and non-human resources in order
to accomplish the desired outcomes. All of
these resources are available to those in
charge.
 CHARACTERISTICS OF MANAGEMENT
Management is a distinct activity with the following distinguishing
characteristics:

5. Authority System
A command and control system hierarchy is
represented by management as a group of managers.
Managers have diverse degrees of authority at
various levels.

6. Management has evolved as a field of

study (i.e., discipline) with the support of a
variety of other disciplines, including engineering,
anthropology, sociology, and psychology. The
combination of these disciplines has resulted in a
large amount of management literature.
7. UNIVERSAL APPLICABILITY
Management is applicable to everyone.
Management principles and approaches can be
used in a variety of settings, including business,
education, the military, government, and
hospitals. Henri Fayol proposed that management
concepts would apply in almost every situation.

HENRI FAYOL
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

PLANNING
Of all the management
functions, planning is the most
basic and ubiquitous. If people
working in groups are expected
to perform well, they must
understand what has to be
done, what tasks they must
conduct in order to complete
the task, and when it must be
completed.
It entails the following:
a. determining long and short-term
objectives;
b. developing strategies and courses
of action for achieving these
objectives;
c. formulating policies, procedures,
and rules, among other things, for
putting strategies and plans into
effect.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

PLANNING
Top management determines the organization's goals and
objectives in light of the organization's fundamental purpose and
mission, as well as environmental considerations, business
predictions, and available and potential resources. These goals are
both long-term and short-term in nature. There are 13 objectives
or goals, separated into divisional, departmental, sectional, and
individual aims.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

The sub-functions of organizing are as

ORGANIZING follows:
Organizing entails identifying the a. Identifying the activities needed
activities required to meet to meet goals and put plans into action
corporate objectives and carry out b. Organizing the actions into self-
plans, grouping those activities into contained jobs
jobs, assigning these jobs and c. Employee job assignments.
activities to departments and d. Delegation of authority allows
individuals, delegating responsibility them to do their duties and
and authority for performance, and command the resources they
providing support for activity require.
synchronization on both a vertical e. Creating a network of
and horizontal level. coordinating relationships
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

- Organizing is the basic process of

ORGANIZING combining and integrating human,
- The structure of the physical, and financial resources in
organization is the productive interrelationships in
consequence of the organizing order to achieve company
process. It consists of a objectives. Its purpose is to
network of roles and manage personnel and related
authority-responsibility duties in such a way that
linkages, as well as organizational work is coordinated
organizational positions, and all efforts and activities
duties, and responsibilities. contribute to organizational goals
being met.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

STAFFING
- Permanent staffing is a vital management function. The next
logical step in the 15 management process is to hire suitable
personnel to carry out the tasks after determining objectives,
formulating strategies, policies, programs, procedures, and
rules to achieve them, and identifying and grouping activities
for the implementation of strategies, policies, programs, and
so on.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

STAFFING
a. The process of determining the quantity and type of workers required is
known
as staffing planning.
b. Recruitment to attract a sufficient number of potential employees to apply
for jobs
in the company
c. Identifying the best qualified candidates for the open positions
d. Placement, orientation, and induction
e. Transfers, promotions, terminations, and layoffs are all examples of b.
f. Employee development and training.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

DIRECTING
- It is the process of motivating people to do their best work and
contribute their full potential to the attainment of corporate objectives.
The jobs of subordinates must be explained and defined, they must be
coached in work performance, and they must be inspired
to put up their best efforts with passion and zeal.
The guiding function entails the following sub-functions:
a. Communication
b. Motivation
c. Leadership
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

COORDINATING
- The process of establishing relationships a. Relationships of
between various sectors of an organization
authority and duty are
so that they all pull in the same direction is
known as coordination. As a result, it is the
b. Directional consistency
process of connecting all of an organization's c. Command consistency
decisions, operations, activities, and efforts communication
in order to achieve organizational goals d. Effective
through unity of action. Mary Parker Follet e. Effective leadership
has emphasized the importance of the
coordinating process.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

CONTROLLING
- Controlling ensures that divisional, As a result, controlling entails the
departmental, sectional, and following steps:
individual results are in line with a. Performance evaluation
predetermined goals and objectives. against predefined objectives.
Goals and plans must be monitored b. Identifying departures from
for deviations, which must be these objectives.
identified, investigated, and c. Corrective activity to correct
corrected. errors.
 MANAGEMENT FUNCTIONS OR MANAGEMENT PROCESS
Planning, organizing, staffing, directing, coordinating, and controlling will be
designated as management functions for our purposes.

CONTROLLING
- Although the management responsibilities of planning, organizing, staffing,
directing, coordinating, and controlling have been articulated in a specific
order, they are not performed in that order. Management is an essential
process, and categorizing its functions into neat boxes is difficult.
Management functions tend to meld together, making it difficult to
distinguish one from the other.
 LEVELS OF MANAGEMENT

- Within a firm, there may be many levels of management. A

management level is a dividing line between different managerial
positions within a company. The size, technological capability,
and product range of a corporation determine the management
levels. Administrative management (i.e., the highest level of
management) and operational management (i.e., the lowest level
of management) are the two types of management that we
usually face (i.e., the lower level of management).
 LEVELS OF MANAGEMENT

The most important functions are:

1. TOP MANAGEMENT a. To determine the enterprise's
objectives or goals;
a company consists of b. To develop policies and programs
owners/shareholders, Board of Directors, in order to achieve the set goals;
its Chairman, Managing Director, or c. To provide an organizational
General Manager or the Chief Executive, framework for carrying out the
or the Executive Committee having key operations as planned;
officers d. To gather the necessary funds,
persons, materials, machinery, and
procedures to carry out the plans;
e. To maintain effective operational
control; and
f. To serve as the company's overall
leader.
 LEVELS OF MANAGEMENT

2. MIDDLE MANAGEMENT

- consists of functional department heads, such as the purchasing

manager, production manager, marketing manager, financial controller,
and divisional and sectional officers. The job of middle management is to
put top management's policies and plans into action. It acts as a vital link
between upper-level management and lower-level or operational
management. They are accountable to upper management for the smooth
operation of their departments.
 LEVELS OF MANAGEMENT

2. MIDDLE MANAGEMENT

The key functions of middle management are as follows:

a. To interpret upper management's policy directives.
b. To develop their departments' organizational structures in order to achieve the goals
outlined in various corporate policies.
c. To find and hire qualified operative and managerial personnel.
d. Assign tasks, jobs, and obligations to ensure that the plans are implemented on time.
e. To assemble all of the instructions and hand them along to the supervisor.
f. To encourage employees to achieve higher levels of productivity and to suitably
reward them.
g. To work cooperatively with other departments to ensure that the entire
organization runs well.
h. To compile reports and data on their departments' performance.
i. To submit reports to upper management.
j. Make appropriate recommendations to upper management for enhanced plan and
policy execution.
 LEVELS OF MANAGEMENT

3. LOWER LEVEL OR OPERATIVE MANAGEMENT

It is made up of superintendents, foremen, and supervisors. This level management is

at the bottom of the management structure, and it is responsible real operations.
Foreperson, supervisors, sales officers, accounts officers, and other make up this
group. They have direct contact with the workers or rank and file. Their power and
authority are restricted. Workers receive instructions from middle management, which
they pass on to them. They interpret and split management's plans into short-term
operating plans.
TYPES OF BUSINESS ENTITIES

The type of business entity you choose will depend

on three primary factors: liability, taxation, and record-
keeping. Here is a quick look at the differences
between the most common forms of business entities:
1. SOLE PROPRIETORSHIP
2. PARTNERSHIP
3. CORPORATION
SOLE PROPRIETORSHIP
By definition, a single/sole
proprietorship is a business owned and
operated by one person. The owner and the
business are synonymous in the eye of the
law.
1. The proprietor subject owns all assets in the firm only to
the liabilities he has incurred in its establishment and
operation.

2. Solely responsible for its debts incurs any losses,

assumes all its risks, provides all its capital, and provides its
total management.
3. It is the most common form of business organization. It is
easy to form and offers complete managerial control to the
owner. However, the owner is also personally liable for all
financial obligations of the business.
ADVANTAGES
1. Simplicity of organization.
2. Owner's freedom to make all decisions and owner's enjoyment of all
profits.
3. Minimum legal restrictions
4. Ease of discontinuance
5. Tax advantages

DISADVANTAGES
1. Owner's possible lack of ability and experience
2. Limited opportunity for employees
3. Difficulty in raising capital
4. Limited life of the firm
5. Unlimited liability of the proprietor
CORPORATION
A corporation is a legal entity that is created to
conduct business. The corporation becomes an
entity separate from those who founded it that
handles the responsibilities of the organization. Like
a person, the corporation can be taxed and can be
held legally liable for its actions.
CORPORATION VS INCORPORATION

Incorporation is the process of creating a new

legal entity that is separate from its
owners/shareholders and protects them from
personal liabilities, whereas a corporation is the
end-product of that process .
ADVANTAGES AND DISADVANTAGES OF CORPORATION

ADVANTAGES
1. Limited liability of stockholders
2. Perpetual life
3. Ease of transferring ownership
4. Ease of expansion of the company

DISADVANTAGES
1. Expenses of the organization
2. Capital stock tax
LEGAL PITFALLS IN STARTING A BUSINESS AND HOW TO
AVOID THEM
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Care and caution are critical in starting one's business,
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especially when we talk, legal.
1. Protect your intellectual property.
2. Execute a shareholder's agreement
3. Read contracts
4. Be cautious in leaving a former employee
5. Remember to provide for stocks or option investing
6. Watch out for undercapitalization
7. Keep good records
8. Keep it simple
OTHER LEGAL ASPECTS
1. Patent protection
2. Trademark or trade secrets
3. Copyright protection
Thank you for
listening !