Chapter II

Introduction
Management is defined as getting activities done
effectively and efficiently through and with the help of other people
to achieve a common goal. Lets elaborate more the above
definition to get a better understanding of whats really this aspect
is about.
Getting activities done which are referring to the
essential functions of the managers such as planning, organizing,
decision-making, directing and staffing concerning on the resources
of the firm; man power, capital, technology and etc.
It should be effective and efficient, because resources
that are being utilized provides the company with good volume of
production and quality output or services as well, that will meet the
satisfaction of the target market.
Through the help of other people, so this is where the
role of a well-structured organization gets in. They will work
systematically and in coordination to attain common and specific
goal. Their authority and responsibilities are clearly defined to avoid
confusion and overlap with their work.

FORM OF BUSINESS ORGANIZATION

A business is an economic unit that controls

resources and engages in buying and selling of goods or services.
It may be organized as a sole proprietorship, partnership or
corporation. Our business is under the sole proprietorship wherein
the major control and capitalization will come from the owner
himself, who usually act as manager. As sole owner, he/she gets all
the profit. Most small business are sole proprietorship owned since
only a small amount of capital is needed and its operation can be
handled or managed easily by the proprietor.

Advantages of Sole Proprietorship:

Ease of formation: Starting a sole proprietorship is much

less complicated than starting a formal corporation, and also
much cheaper. Some states allow sole proprietorships to be
formed without the double taxation standards applicable to
most corporations. The proprietorship can be named after
the owner, or a fictitious name can be used to enhance the
business marketing.

Tax benefits: The owner of a sole proprietorship is not

required to file a separate business tax report. Instead, they
will list business information and figures within their
individual tax return. This can save additional costs on

accounting and tax filing. The business will be taxed at the

rates applied to personal income, not corporate tax rates.

Employment: Sole proprietorships can hire employees. This

can lead to many of the benefits associated with job
creation, such as tax breaks. Also, spouses of the business
owner can be employed without having to be formally
declared as an employee. Married couples can also start a
sole proprietorship, though liability can only assumed by one
individual.

Decision making: Control over all business decisions

remains in the hands of the owner. The owner can also fully
transfer the sole proprietorship at any time as they deem
necessary.

Disadvantages of Sole Proprietorship:

Liability: The

business

owner

will

be

held

directly

responsible for any losses, debts, or violations coming from

the business. For example if the business must pay any
debts, these will be satisfied from the owners own personal
funds. The owner could be sued for any unlawful acts
committed by the employees. This is drastically different
from corporations, wherein the members enjoy limited

liability (i.e., they cannot be held liable for losses or

violations).

Taxes: While

there

are

many

tax

benefits

to

sole

proprietorships, a main drawback is that the owner must pay

self-employment taxes. Also, some tax benefits may not be
deductible,

such

as

health

insurance

premiums

for

employees.

Lack of continuity: The business does not continue if the

owner becomes deceased or incapacitated, since they are
treated as one and the same. Upon the owners death, the
business is liquidated and becomes part of the owners
personal estate, to be distributed to beneficiaries. This can
result in heavy tax consequences on beneficiaries due to
inheritance taxes and estate taxes.

Difficulty in raising capital: Since the initial funds are

usually provided by the owner, it can be difficult to generate
capital. Sole proprietorships do not issue stocks or other
money-generating investments like corporations do.

ORGANIZATIONAL STRUCTURE
Business is an organization. It is a collection of people
who have the ability to interact and work with each other to attain
certain goal. Most often business activities can effectively do

through and with the help of other people to achieve success.

Position must be filled and stuffed with the right man on the right
job. Here, it shows the hierarchical arrangements of authority
wherein each individuals role is supported by a written material that
clearly states the authority and responsibility according to their
respective position. The proponents organizational structure
composes of: the owner, who is the owner himself and the
salesperson, who sells the product of the business.

Owner

Salesperson 1

Salesperson 2

Figure 1: Organizational Structure

The OWNER is one who takes the risk of putting up a
business to produce and sells goods. He puts his money in a
business venture in the hope of receiving a return on investment
from profits earned by the business. He is the decision-maker of the

business. He is required to plan the activities such as buying raw

materials, hiring of personnel and promoting the products. He is
also tasked with controlling actual operation to ensure that the
business is running as planned. He will also provide and implement
policies to the business. The SALES PERSON is one who will
introduce the product to the customers and will give an effort to get
the expected demand in return of wages or salary.

PERSONNEL JOB REQUIREMENT

1. OWNER
Job Description:

Responsible for planning, organizing, leading, directing and

implementing overall policies, rules and regulations.

In charge for overall operation and control of the business.
Responsible for buying the required materials for the product

and in preparing it.

Responsible for the training of employees.
Responsible in giving employees compensation/salary.
Does major decision regarding various aspects of the
businesses.

2. SALESPERSON

Job Qualification:

Male/Female
Literate and knows how to cook
With or without experience but willing to be trained
With pleasing personality
Efficient worker

Job Description:

Assist the owner in promoting the product.

Responsible in managing the store during his/her working

hours.
Responsible for keeping the tools and equipment inside the

store.
Responsible for cooking.
Responsible in receiving payment from the customers and

keeping record of sales as well.

Make inventory count of raw materials before and after

his/her duty.
Responsible in the cleanliness of the store.

EMPLOYMENT AGREEMENT

This Agreement for Employment is made on this _____ day of

_______, ___, by and between _________________________,

"Employer"

and

________________________________,

"Employee.

The Employer shall employ Employee subject to the following terms

and conditions.
1. Employment for the above Employee shall commence on
___________ (Date).
2. The following duties and responsibilities shall be competently
performed by the Employee:

In addition to the duties stated above, the Employee shall perform

such further and other duties required by the Employer.
3. The Employee shall work _______ through _______ from ____
A.M. to ____ P.M. and such additional hours as are required by the
Employer for the Employee to competently perform the duties of his
position. The Employee shall use his or her best efforts on behalf of
the Employer.
4. The Employee shall comply with all stated standards of
performance, policies, rules & regulations. It may be change by the
employer from time to time.
5. The Employer shall make payment to the Employee a set
amount as compensation for services rendered. The Employee
agrees to accept the sum of __________ (Php______) per year,

payable ________________ in the amount of ___________

(Php______).

6. This contract of employment may terminate upon the occurrence

of any of the following events: (a) the death of the Employee; (b)
the failure of the Employee to perform his duties satisfactorily after
notice or warning thereof; (c) for just cause based upon
nonperformance of duties by Employee; (d) economic reasons of
the Employer which may arise during the term of this Agreement
and which may be beyond the control of the Employer.
7. The Employee shall not, at any time during the period hereof,
and for ____ years from the date of termination of this Agreement,
directly or indirectly, within a geographic area of _____ miles,
engage in, or become involved in any business competitive or
similar to that of the Employer.
8. This Agreement may not be assigned without prior notice by
either party. Such assignment is subject to the mutual consent and
approval of any such assignment.
9. This Agreement constitutes the complete understanding between
the parties, unless amended by a subsequent written instrument
signed by the employer and employee. Any dispute under this
contract shall be required to be resolved by binding arbitration of
the parties hereto. Each party shall select one arbitrator and both

arbitrators shall select a third. The arbitration shall be governed by

the rules of the Philippines Arbitration Association then in force and
effect.

____________________________
Employer Signature
____________________________
Employee Signature

MANAGEMENT POLICIES
A. LEADERSHIP

OR

MANAGEMENT

STYLES

TO

BE

ADOPTED
A combination of Democratic and Autocratic will be
used as our Leadership styles. Democratic because we will get the
ideas and opinions of the customers and employees in certain
issues like the improvement of the product and marketing strategy,
while, it becomes autocratic when the issues concern is very
sensitive like organizational policies and laws.
Authority and Responsibility setting
The one who has the responsibility to hire employees,
create policies and regulations and has the highest authority in an
organization is the owner of the business. He will also be the one

who plans and creates strategies for the improvement of the entire
business.
B. GENERAL BUSINESS POLICIES
Policy is typically described as a deliberate plan of
action to guide decisions and achieve rational outcome.
Business policy does not really refer to the standard
definition, but to the functions and expectations that the business
want to achieve.
WORKING DAYS
1. The store is open from Monday through Sunday.
TIME SCHEDULE
1. The normal business hour is from 8:00 am to 8:00 pm
2. The salesperson is required to be at the work place
strictly 30 Minutes before 8:00 am and 2:00 pm in
their respective working hours.
3. There will be Shifting Schedule as follows:

EMPLOYEES SCHEDULE
SALESPER

DAY

TIME

Monday-Friday

8:00am-

DAY-OFF

SON
1

2:00pm

Saturday

Sunday
8:00am2:00pm
2

Monday-Friday

2:00pm8:00pm

Sunday

Saturday
2:00am8:00pm
Note: The owner will take over the shift of the employees on their day-offs and
in case of absences.

WORK ATTIRE
Salespersons should wear white T-shirts and
pants as their proper attire. They are required to wear
apron and hairnet for the proper sanitation and for the
assurance that we will produce healthy products.

ATTENDANCE
Attendance is used to define the number of
days the personnel is present at work. It is a must and as
much as possible, our employees are not allowed
making absences except if it is a valid reason. With
regards to occurring absences, they must notify the
owner a day before.

RULES AND REGULATIONS

1. The employee should be friendly to the customer.
Smile and greetings should always be maintained.
2. Visitors of employees during working hours are not
required unless for a very important reasons.
3. They should maintain cleanliness at all times within

the workplace.
4. Honesty is the best policy.
BUSINESS POLICY
1. NO WORK, NO PAY.
2. Customer is our first priority.
EMPLOYEE POLICY

1. They must maintain good grooming including proper

haircut and nails.
2. They must maintain cleanliness and orderliness of
the business premise.
3. They must take good care of the equipment,
inventory and products in the store.
4. In case of damages in the equipments, payments will
be charged to the employees unless he/she was in
good faith.

OFFENSES, PENALTIES AND SANCTIONS

Taking advantage of the company
OFFENSE
Absenteeism

FIRST OFFENSE
Verbal Warning

Dual employment

no action taken
unless employee is
notably unproductive

sleeping on the job

verbal warning

SECOND OFFENSE
Warning and letter
on record
employee must
choose one
employer if action is
forced
3-7 day suspension

Improper demeanor and conduct

OFFENSE
Inefficiency of
employee

FIRST OFFENSE
verbal warning

SECOND OFFENSE
letter on record

insubordination refusal to work

carelessness,
resulting in injury to
self or co-workers or
damage to
equipment

3 day suspension

7 day suspension

letter on record

1-3 day suspension

FIRST OFFENSE
letter on record

SECOND OFFENSE
7 day suspension or
discharge
discharge

Disruptive Behavior
OFFENSE
Drinking on business
premises
encouraging or
instigating a
work stoppage

letter on record and

7 day
suspension

smoking on business verbal warning

premises

letter on record

threatening another
employee

1-3 day suspension

7 day suspension or
discharge

possession of liquors 3-7 day suspension

7 day suspension or
discharge

use of abusive
language

verbal warning

letter on record
and/or 1-3
day suspension

FIRST OFFENSE
discharge

SECOND OFFENSE

Criminal Behavior

OFFENSE
carrying a deadly
weapon
deliberate damage
to
equipment
assault on owner or
co-worker
falsifying inventory

discharge
discharge
3-7 day suspension

discharge

count

PERSONNEL
Personnel refer to the persons being employed in the

organization. Personnel management is a function of the

management concerned with promoting and enhancing the
development of the work effectiveness and advancement of human
resources in an organization.
Two Salespersons
The business will need salespersons that are in
charge in the cleanliness and orderliness of the business premise,
taking care of customers order and securing payments. The
employee should make inventory of raw materials before and after
their duty.
COMPENSATION PACKAGE
As the employees perform their job, in return they will
receive salary from the owner. There will be no other benefits.
Given below is the summary of their compensation:
POSITION

SALARY PER DAY

FIXED MONTHLY SALARY

SALESPERSON 1

150.00

4,000.00

SALESPERSON 2

150.00

4,000.00

PERSONNEL SAFETY
One of the important things that should be observed

in the business is the safety of our employees. Employees are

considered to be the most important factor for the business to

achieve its goals and objectives. In order for that to happen, the
enterprise should assure the safety of the working area for the
employees to perform their job properly. The business premise
should have proper waste disposal, proper ventilation and fire
extinguisher to secure the safety of everyone in case an accident
may happen.

WORKING AREA
We will assure the cleanliness of the place in

conformity with the sanitary requirements. We will maintain proper

sanitation of the area not only for the employee, but also for our
customers satisfaction. We will see to it that proper disposal of
waste will be observed in the area. Also, we will make sure that our
employee will clean the place before and after their work.

PRE-OPERATIONAL ACTIVITIES
1. FEASIBILITY STUDY
It is really important to conduct a well analyzed
feasibility study to determine whether the business proposal will
have a positive response to the market or not. It is looking at the
viability of an idea with the emphasis on identifying potential
problems and attempts to answer the main question: will the idea
work? And should we proceed with it?
Feasibility study should address things like where and
how the business will operate. The place of the business should be
located where demand is high and what strategy and techniques
we will do to present new products to the market and what actions

will be done to improve the business. They provide in-depth details

about the business if and how it can succeed, and serve as
valuable tool for developing a winning business plan.
2. CAPITALIZATION
Business will not run without money to start.
Therefore, the proposed business will need a capital amounting to
Php 100,000.00 that will come from the savings of the owner.

3. LOCATION OF THE BUSINESS

The proposed business is located at Pampano Road
corner Maya-maya Street, Barangay Longos, Malabon City,
Philippines in front of the City of Malabon University nearby
schools and community that can be the potential customers of the
business.
4. BUSINESS REGISTRATION
The business must apply for the necessary permits in
able to operate legally such as permit to operate (Mayors Permit)
and sanitary permit. We registered the business at the business
licensing office of the City Hall of Malabon. Prior to the application,
the business must possess an approved permit from DTI.

5. RENOVATION OF THE STORE

After the arrangement between the lessor and the
owner of the business, we will make some improvement to the
existing store. It includes repainting and designing the store.

6. APPLICATION FOR UTILITIES

A business to be able to operate smoothly and perform its
function must have those utility connections. We will apply to the
MERALCO with regards to the electricity connection and
MAYNILAD with regards to water supply.
7. ACQUISITION OF TOOLS AND EQUIPMENT
We will look for the most economical yet with quality
equipments that can be used in business operations. After finding
the affordable and quality equipments, thats when the purchasing
takes place.
8. HIRING PROCESS
Applicants are required to submitting application form or

resuming with 2 X 2 colored photos to the owner.

The Owner will analyze the contents of the resume and
will call the applicant for the interview if interpreted to be

satisfactory.
If the applicant passed the interview, he will be informed
about it and will be asked to return after three days for

orientation and training.

After the orientation, the applicant will be trained by the
owner for a week regarding the operations of the
business and on how to make the product.

APPLICATION FORM

INTERVIEW

Figure 2: Hiring Process Chart

TRAINING

9. PROMOTION OF THE BUSINESS

We will make a banner huge enough to attract the attention
of the public. Give out flyers containing the product and location of
the business to heighten the knowledge of the prospective
customers for it might confuse them what PICHI PERFECT really
taste. Then we will have a product sampling during the opening
wherein we will render a free taste to the customers.