Republic of the Philippines

NUEVA VIZCAYA STATE UNIVERSITY

Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

College: College of Business Education

Campus : Bayombong Campus

DEGREE PROGRAM BSBA COURSE NO. CBM 2

SPECIALIZATION Financial Management COURSE TITLE Strategic Management
YEAR LEVEL 3rd Year TIME FRAME WK NO. IM NO. 03

I. UNIT TITLE/CHAPTER TITLE: STRATEGY IMPLEMENTATION

II. LESSON TITLE :

Lesson 1: Organizational Systems
Lesson 2: Strategic Asset Management

III. LESSON OVERVIEW

This module explores the diverse organizational structures that companies employ for their
operations. Additionally, the significance of effective asset management strategies is
emphasized in relation to realizing the company's vision, mission, goals, and objectives.

IV. DESIRED LEARNING OUTCOMES:

After studying the lesson, the students should be able to:

1. Discuss the different types of organizational structure.
2. Identify the factors that may influence the entity’s decision in adapting to an
organizational structure.
3. Discuss the organizational components in terms of the value they contribute to the
business entity.
4. Discuss how intellectual property, human resource assets, market assets, and
infrastructure assets affect the company.
5. Prepare an asset management strategy of an entity of your choice.

V. LESSON CONTENT
Lesson 1: Organizational System

The organizational system plays a crucial role in strategic management, as it provides the structure,
processes, and mechanisms through which strategic decisions are formulated, executed, and
monitored. The effectiveness of the organizational system directly impacts how well the strategic
management process is carried out and how successful the organization is in achieving its strategic
objectives.

A well-designed and effective organizational system provides the foundation for strategic management
and enables the organization to navigate through complexities, seize opportunities, and achieve its
long-term goals successfully. It ensures that strategic decisions are integrated into day-to-day
operations and that the organization remains agile and competitive in a dynamic business
environment.

Organizational Structure

An organizational structure refers to the formal framework that defines how tasks, roles, and
responsibilities are distributed, coordinated, and managed within an organization. It determines the
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 1 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

reporting relationships, communication channels, and decision-making processes that govern how
work is carried out and how authority and control are distributed among various levels and
departments.

Organizational structure plays a critical role in establishing the hierarchy, coordination, and efficiency
within an organization. It helps in defining the roles and relationships of employees, promoting clarity
in responsibilities, and facilitating effective communication and collaboration.

Types of Organizational Structures

1. Functional Organizational Structures. Employees are grouped based on their specific

functions or areas of expertise, such as marketing, finance, operations, and human resources.
Each department operates independently, and employees report to functional managers who
oversee their respective areas.

Below is an example of functional organizational structure:

2. Territorial Organizational Structure. A territorial organizational structure, also known as a

geographic organizational structure, is a type of organizational design in which an organization
is divided into different geographical regions or territories. Each territory is treated as a
separate business unit or division, with its own set of responsibilities, resources, and decision-
making authority.

In a territorial organizational structure, the company's operations are organized based on the
geographic locations in which it operates or serves its customers. This structure is common
among multinational corporations and businesses that have a significant presence in multiple
regions or countries. The primary objective of adopting a territorial structure is to decentralize
decision-making and tailor strategies to the specific needs and demands of different
geographic markets.

There are several advantages in a territorial structural arrangement.

 Personnel familiar with the history of customers in the area, their culture, their
preferences, expectations, and habits of living can cultivate the local markets.
 The company and its sales force can respond quickly to changes in the competitive
environment.
 There is closer contact between managers familiar with the territory and their
subordinates.
 Since management is familiar with local conditions, it can make quicker strategic
decisions.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 2 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

There are also Disadvantages as presented below:

 As the product line becomes more varied, the territory structure becomes more
cumbersome. The creation of multiple territory offices results in duplication of services
and possibly the appointment of less qualified individuals to supervisory positions. The
need for competent managers and thus increase in expenses is inevitable.

Sometimes having unprepared or weak managers in territories may negatively affect

sales may create a damage public image and may lower morale among employees.

Presented below is an example of territorial structure:

Source: [Link]

3. Product Organizational Structure. A product organizational structure is a type of

organizational design in which a company organizes its business units, teams, and functions
based on the products or product lines it offers. In this structure, each product or product line is
treated as a separate business unit, with dedicated resources and decision-making authority.
This type of structure is common in companies that produce and sell a diverse range of
products or services.

Advantages of a product organizational structure include improved accountability for product

performance, greater focus on customer needs, and enhanced product development and
innovation. It allows for a more agile response to changes in the market and enables better
alignment between product strategies and business goals. Marketing Managers follow their
products from conception to the time when it is available to customers. They coordinate all
information relating to the products with other departments in the company.

However, challenges can arise in terms of resource allocation across different product-based
business units, potential duplication of functions or resources, and the need for effective
coordination and communication between units.

There are four courses of action that an organization can implement to improve or replace any
product management structure. They are:

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 3 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

a. Conducting training programs in forecasting interpersonal skills learning motivation and

control to improve the ability of product managers to do the job;
b. switching from marketing manager to marketing team that implements activities to
market the product effectively.
c. eliminating product managers of minor brands and consolidating them with other
products. This is feasible when the product line appears to similar consumers or
industrial products.
d. Establishing divisions around the major company products and using functional
structural arrangements within divisions. Despite the problems involve in the product
structure this organizational form can be successful.

The success of a product organizational structure depends on effective leadership, clear

communication, and a strong corporate culture that encourages collaboration and sharing of
best practices among different product-based business units. Companies must carefully
consider their product portfolio and business goals when choosing an organizational structure,
including whether a product-based structure is the most suitable option for their specific needs
and industry context.

Sample Product organizational Structure is presented below:

Source: [Link]

4. Market-Centered Organizational Structure. A market-centered organizational structure is a

type of organizational design that is focused on serving specific customer segments or
markets. In this structure, the organization is organized around the needs and preferences of
its target markets, and business units or teams are dedicated to serving those markets
effectively. This approach allows companies to be more customer-centric and tailor their
strategies and offerings to meet the unique requirements of different market segments.

Advantages of a market-centered organizational structure include a stronger customer focus,

improved customer satisfaction, and better alignment of products and services with market
needs. It allows companies to be more responsive to changing market dynamics and enhances
their ability to compete in various market segments.

However, challenges can arise in terms of resource allocation and coordination across different
market-focused business units. It is essential for the organization to have a clear overall
corporate strategy and effective communication channels to ensure coherence and
consistency across all market segments.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 4 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

The success of a market-centered organizational structure depends on a deep understanding

of customer needs, effective market research, and strong market segmentation strategies.
Companies must carefully consider their customer base, market dynamics, and strategic goals
when choosing an organizational structure, including whether a market-centered structure
aligns with their specific business context and objectives.

5. SBU Organizational Structure. An SBU organizational structure, also known as a Strategic

Business Unit structure, is a type of organizational design that groups different business units
within a larger organization based on their strategic significance and similarities in products,
markets, or customers. Each Strategic Business Unit (SBU) operates as a semi-autonomous
entity with its own business strategy, resources, and decision-making authority. The SBU
structure is commonly adopted by large, diversified companies that operate in multiple
industries or markets.

Key characteristics of an SBU organizational structure include:

 Business Unit Autonomy: Each SBU operates with a degree of autonomy, allowing it to
develop and execute its own business strategy based on its unique market
opportunities and competitive dynamics.

 Strategic Focus: Each SBU has its own distinct strategic focus, catering to specific
products, markets, or customer segments. This enables the organization to tailor
strategies to meet the specific needs of each business unit's target market.

 Performance Measurement: SBUs are typically evaluated based on their individual

financial performance and other key performance indicators. This provides
accountability and allows the organization to identify high-performing and
underperforming business units.

 Resource Allocation: Resources, including financial capital, human resources, and

technology, are allocated to each SBU based on its strategic importance and potential
for growth.

 SBU Leadership: Each SBU is typically headed by a General Manager or President

who has overall responsibility for the unit's performance and strategic direction.

 Corporate Oversight: While each SBU operates independently, there is often corporate
oversight and governance to ensure alignment with the overall corporate strategy and
to facilitate sharing of best practices across SBUs.

 Flexibility and Adaptability: The SBU structure allows for flexibility and adaptability, as
each SBU can respond quickly to changes in its market environment without being
constrained by the centralized decision-making of the larger organization.

Advantages of an SBU organizational structure include better strategic focus, increased

accountability, and improved responsiveness to market changes. It allows the organization to
leverage its diverse capabilities while maintaining a level of decentralization that fosters
innovation and agility.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 5 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

However, challenges can arise in terms of coordinating across SBUs, ensuring consistent
branding and corporate identity, and managing potential conflicts or competition between
business units.

The success of an SBU organizational structure relies on effective corporate governance, clear
communication, and a shared vision of the overall corporate strategy. Companies must
carefully consider their portfolio of business units, market dynamics, and strategic objectives
when choosing an organizational structure, including whether an SBU structure is suitable for
their specific needs and industry context.

Figure below shows an SBU structural arrangement.

6. Matrix Organizational Structure. A matrix organizational structure is a type of organizational

design that combines elements of both functional and project-based structures. In a matrix
structure, employees report to both a functional manager and a project manager, creating a
dual reporting relationship. This arrangement allows the organization to take advantage of the
strengths of both structures and is commonly used in complex and dynamic environments
where multiple projects or initiatives need to be managed concurrently.

This organizational structure allows an employee to have multiple “bosses” because he/she
has to cut across boundaries to get things done.

Choosing an Organizational Structure

The choice of a company as to what organizational structure to adopt depends on various factors
which may be deemed appropriate to its operations. These factors include the size of the firm, product
offerings, market of its products, prevailing competition and management philosophy.

 Size of the Firm. Generally, the size of the firm will indicate the complexity of its organization.
A firm producing and selling in a restricted territory may find the functional organization the
best form for their purposes, whereas a larger firm which produces several products and sells
to a wider market may opt for a regional form of organization to maximize selling efforts.

 The products. The nature of the product or products to be sold is another factor that
influences the choice of an organizational structure. Consumer and industrial goods may
require different types of services from the producer. Some products require extensive after-
sales servicing to customers and the marketing organizational structure can take care of this
task.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 6 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

Technical products may require a different type of salesmanship and advertising as compared
to non-technical products. This is also true with products requiring wide distribution reach like
soft drinks. These are examples where the nature of the product can influence the choice of a
marketing structure.

 The market. Characteristics of the market like geographic dispersion, income class, and buyer
behavior need to be considered in organizing the marketing unit. If markets are concentrated,
the stakeholders may find it easier to sell directly to the consumers. If markets are dispersed,
or if consumers buy any small quantities which does not justify direct sales, then the producer
may opt to use intermediaries. Thus, the producer's efforts will be concentrated on selecting
middlemen and devising ways to assist them rather than supervising total sales operation.

 Competition. A firm may find it necessary to organize its marketing efforts following the
requirements of competition. If a major competitor uses an existing pattern of distribution, the
fear may find it necessary to accommodate such a pattern. If brand name merchandising is an
established feature of a particular industry like ready-to-wear denim jeans, Then the newcomer
may have described the establish his own brand.

 Philosophy of management. The final factor that affects the structure of an organization is
the management philosophy prevailing in the company. In each case, the structure of the
business unit differs. Some companies are more business oriented than others and will have a
business unit that is involved in a wider scope of activities. In addition, if management firmly
believes in centralization rather than in decentralization, then most of the responsibilities will be
borne by the home officer rather than by the district or regional offices.

Evaluation of an Organizational Structure

Various criteria can be used to evaluate an organizational structure. These criteria include the ability of
the organizational structure to facilitate control, draw coordination among the employees, provide
information, compute for cost involved, and adapt culture of flexibility.

 Facilitating control. Controlling an organization involves a comparison of actual performance

with pre-stablish standards or plans. If the organization is structure enables the manager to
identify problem situations and take necessary corrective actions, then the fear may be said to
have a control mechanism. If each person clearly understands the scope of his authority and
areas of responsibility, and if the organization provides suitable channels for communication,
then the company has a solid framework for management control.

 Coordination. The coordination of individual actions is often called team effort. A firm
employing several specialists and line officers at different levels may still produce ineffective
results if efforts are not properly coordinated. The presence of effective teamwork is usually
indicative of an efficient and well-organized marketing operation.

 Providing information. It is essential for managers to gather information in order to anticipate

changes and make decisions accordingly. A good organization should have an adequate
information system and proper channels through which information flows.

 Cost of the system. A firm can choose from the simplest to the most complex type of
organization. However, it has to strike a balance among three important factors- the
organizational information it desires, the organizational control it wishes to employ, and the
cost of organizing its personnel.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 7 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

Inefficiency may result from overstaffing as well as from understaffing. It is the responsibility of
the top management in the company to continually evaluate the performance of the
organization. A basic procedure in this evaluation is to weigh the performance against its costs.

 Flexibility. A firm should have an organization that can adjust to changes flexibility is necessary
to attain good performance.

During the evaluation process, it is essential to involve key stakeholders, including top
management, department heads, and employees, to gain diverse perspectives and insights.
Based on the evaluation findings, necessary adjustments and improvements can be made to
enhance the organizational structure's effectiveness and align it with the organization's
strategic direction. Regular evaluations are recommended to ensure the structure remains
relevant and responsive to changing business conditions and market dynamics.

Organizational Components

An organization is a structured and purposeful entity formed by a group of people who come together
to achieve specific objectives or goals. It can be a formal entity, such as a corporation, government
agency, or nonprofit organization, or an informal entity, such as a community group or club.
Organizations can vary widely in size, complexity, and scope, ranging from small local businesses to
large multinational corporations or international institutions.

1. Management refers to the administrative supervision of an organization. It includes leadership,

the organization’s vision-mission, goals, and objectives to attain organizational success.

 Leadership is foremost in the management of an organization. A good leader, regardless of

whether he owns or works for the organization, he is someone who inspires his employees and
stretches them to their optimum productivity. He is the prime mover and is expected to lead his
employees in the attainment of the organization's set goals.
 Task of a leader: planning where he sets the objectives to be attained and the
means to achieve them; organizing where he identifies, divides, groups and
coordinates various activities to achieve set goals; staffing where he recruits,
selects, hires, and develops human resources; directing where he leads and
communicates with his employees to attain objectives; controlling where he
monitors possesses and functions; and institutes corrective actions when
needed
 Roles of a leader: he strategizes, a facilitator and an administrator; a leader
who inspires and motivates his employees to attain quality and productivity; an
information man who understands critical facts issues problems and other
concerns about the industry and the business environments; a conceptualizer
who concretizes the vision mission and plans of the enterprise in accordance to
set goals and objectives; Liasson officer who serves as a conduit for the
employees who belong to different business units or groups; a mediator who
settles concerns issues and other problems between labor and management; a
facilitator who negotiates the allocation of resources; a delegator who assigns
responsibilities empowers employees and monitors them periodically and
efficiently; a problem solver who a tackles organizational concerns and
provides adequate solutions and a decision maker who makes appropriate
decisions both qualitative and quantitative and it's needed by the organization;

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 8 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

 Skills of a leader. Technical skills for being competent in his respective field to
play his role adequately and to perform his task effectively; human relations
skills; interpersonal skills; and other skills required to attain organizational
success.

 Vision refers to the image that the organization aims to establish and project to both the
employees and the public while mission refers to the purpose of the organization.

2. Employees. Aside from management, employees constitute a significant part of the

organizational setting. Employees work at different levels and department within the organization.
They are expected to give their best in performing their assigned tasks. Several factors affects the
performance of an employee and it includes salary, fringe benefits, work environment, and
organizational climate. There are three levels of relationship between management and employees
that generally are expected to be experienced by employees. They are as follows:

 Employee Satisfaction. An emotional state where the employee experiences a feeling of

content in the workplace. Any or all the following generally give employee satisfaction:
acceptable salary, fringe benefits and incentives, positive interpersonal relationships between
and among management and employees, and acceptable conditions in the workplace.
 Employee Involvement. Being a satisfied employee, he has become more participative in the
organizations activities and essentially aims to contribute to the growth of the company.
 Employee Commitment. This degree of employee relationship is further heightened when the
employee reaches the highest level that is employee commitment.

3. Facilities and Equipment. This is also another important component of the organizational
environment. Facilities include management of buildings and site maintenance, management of
machinery and facilities and application of technology.

4. Financial Resources. The financial organization determines the direction the organization will
take and affect its capability to realize its set business goals and objectives. Business goals and
objectives that needs financial resources include spending on other promotional strategies,
upgrading facilities and equipment, experimenting and developing new products, hiring additional
manpower, increasing salaries and wages, training employees, and most significantly, ensuring
continued existence of the organization.

5. Organizational Policies. Policies are important to organizational setting because it consist of

the lifeblood of the organization. Its purpose is to provide clear guidelines, rules, and standards
that govern the behavior, actions, and decisions of employees and stakeholders within an
organization. Policies serve as a framework for establishing consistency, fairness, and compliance
with legal, regulatory, and ethical requirements. They play a vital role in shaping the organization's
culture, ensuring proper functioning, and mitigating risks.

Lesson 2: Strategic Asset Management

Strategic Asset Management is a comprehensive and proactive approach to managing an

organization's assets in a way that aligns with its strategic goals and objectives. It involves optimizing
the performance, utilization, and lifecycle of assets to achieve the best possible value and return on
investment. Assets can include physical assets (e.g., machinery, equipment, infrastructure), financial
assets, human capital, intellectual property, and even intangible assets like reputation and brand
equity.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 9 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

Intellectual Property Asset

Intellectual property assets refer to assets that result from the activities of the mind. These properties
may be products of purposive research like outcomes of a person's ingenuity, brilliance, and creativity,
or may just be discovered accidentally. Intellectual property assets generally come in the form of
trademarks and service marks, software, copyrights, patents, and trade secrets.

 Trademarks include all service marks, trade names, designs, logos, seals, and symbols that
are uniquely developed by an individual, a group of individuals, or an organization.
 Software are organized information in the form of operating systems, utilities, programs, and
applications that enable computers to work. They are commonly divided into two main
classifications: system software that control the basic functions of a computer and usually
come preinstalled with the computer; and application software that handle common and
specific tasks like word processing and others. Software also include all programmed manuals,
operational instructions, methodologies, and techniques.
 Original literary, music, and art compositions that are unique and distinct.
 Trade secrets refer to all types of information, technical, or otherwise, like organizational
philosophy, programs, strategies, processes, financial data, transaction data, and lists of
customers and suppliers.

Unique designs, innovative products, brilliant ideas and concepts, one-of-a-kind packaging, new
methods and processes, inventions, chemical formulations, and software are examples of intellectual
property outputs. Protected by law, intellectual property assets rightfully belong to
individuals/organizations. They can apply for exclusivity rights for a specified period by having their
intellectual property assets patented or copyrighted. During this period, the individual/organization
enjoys monopoly of said assets.

Organizational Monopoly

When an organization possesses intellectual property assets, the entity is said to have created a
competitive edge called organizational monopoly. Because of this so-called monopoly of ownership—

1. the organization solely enjoys the opportunity to use this intellectual property, to optimize its
worth, and enjoy the benefits like the following:
 The entity carries the reputation of having invented a product, service, process, technology.
 The organization gains an internal advantage in terms of efficiency and productivity, pride in
the organization, heightened level of motivation, and employee involvement.
 The organization can draw financial returns from the production, utilization, and sales of this
intellectual property. E.g. Pharmaceutical Companies

2. it safeguards corporate assets by providing a legal mechanism for brand protection, protection
of trade secrets by non-disclosure agreements, and provision for patents and copyrights; and
3. it allows organizations to enjoy low cost leadership and increase its competitive strength.

Human Resource Assets

The Human Resource (HR) asset refers to the collective skills, knowledge, abilities, and potential of an
organization's workforce. It represents the people within the organization and the value they bring in
contributing to its success. The HR asset is a critical component of any organization as it plays a
central role in achieving the organization's objectives, driving innovation, and sustaining a competitive
advantage.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 10 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

Key aspects of the Human Resource asset include:

1. Skills and Expertise: The HR asset encompasses the diverse skills and expertise of
employees, including technical skills, managerial capabilities, and specialized knowledge
relevant to their roles.

2. Experience: Experience is a valuable aspect of the HR asset. Employees' past experiences,

both within the organization and from previous employment, contribute to their ability to make
informed decisions and handle complex situations.

3. Talent and Potential: The HR asset also includes the potential for growth and development
among employees. Identifying and nurturing talent within the organization is essential for
fostering future leaders and sustaining organizational success.

4. Creativity and Innovation: The HR asset plays a significant role in driving creativity and
innovation within the organization. Employees' diverse perspectives and ideas contribute to
problem-solving and finding new opportunities.

5. Motivation and Engagement: The level of motivation and engagement among employees is a
crucial aspect of the HR asset. Highly motivated and engaged employees are more likely to be
productive, committed, and proactive in contributing to organizational goals.

6. Adaptability and Resilience: The HR asset's adaptability and resilience are essential in
navigating changes and challenges that the organization may face, ensuring it remains agile
and responsive.

7. Teamwork and Collaboration: The HR asset includes employees' ability to work effectively in
teams and collaborate with colleagues across different functions and departments.

8. Organizational Culture: Employees collectively contribute to the organization's culture, which

influences values, behavior, and decision-making. A positive and inclusive culture can enhance
the HR asset's value.

9. Employee Well-being: The well-being of employees is a vital aspect of the HR asset. Healthy
and motivated employees are more likely to be productive and committed to the organization.

10. Leadership: The HR asset includes the effectiveness of leadership at all levels of the
organization. Strong leadership can drive employee engagement, create a positive work
environment, and shape the organization's direction.

Managing the HR asset effectively involves various HR practices, such as recruitment and selection,
training and development, performance management, employee engagement initiatives, and
succession planning. Organizations that recognize the value of their human resources and invest in
their development and well-being are more likely to attract and retain top talent, foster a culture of
innovation, and achieve sustainable growth and success.

Human Resource Leverage

Human Resource Leverage refers to the strategic use of an organization's human resources to
maximize their impact and contribution to achieving the organization's goals and objectives. It involves
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 11 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

optimizing the utilization of human capital to create a competitive advantage and drive business
success.

Possession of human resource assets creates both leverage and a competitive edge. An organization
greatly benefits from ownership of these assets.

1. Organizations with employees owning remarkable "expertise" assets are different from the
others. A fusion and symbiotic interplay of impressive educational attainment, unique and
cutting-edge professional competence, relevant and "intelligent" environmental knowledge,
creative and highly differentiated work-related knowledge, and an inclusive, and objective
historical knowledge will no doubt put an organization in the forefront. The results are far-
reaching.
2. Good personal qualities possessed by employees, although uniquely individualized can create
a convergent impact on the organization. Traits like transformational leadership, ingenuity, first-
rate problem-solving capabilities, sustained energy, and attributes like adaptability, proactivity,
initiative, industry, and integrity can impact organizational temperament and nurture a climate
of enthusiasm and drive.
3. Managerial, entrepreneurial, and competency asset skills shore up effectiveness and
organizational success, thus creating comparative advantage in relation to other organizations.
4. Organizational human-centered assets like the presence of employees with "high" emotional
quotients, synergy, and employee involvement open more windows to organizational
opportunity, realization, and achievement.

The multi-talent possession of human resource assets contributes to the robustness of the intellectual
capital of the organization. Consequently, organizations need to recognize and develop the potential
of their human resources, give them full access to opportunities toward human development, and
constantly nurture them. When employees leave the organization, they bring with them these assets.
This is a loss to the organization. The human resource leverage created is almost all the time
ephemeral and temporary.

Marketing Assets

These are the result of market-related intangibles, such as brand, company names, customer loyalty,
repeat business, distribution channels, contracts, and agreements.

1. Brands are considered as effective means to attain market supremacy. Marketing experts
believe that if a product or service is not a recognized brand, then it is not a commodity after
all. Many organizations do carry brand names, but they do not necessarily create market
dominance. Brand names that promote substantial sales are considered market assets. For
example in this country, "Colgate" is the household name for toothpaste; "Kodakan" is
colloquially mentioned for any picture-taking activity; and "Xerox' is synonymous with
photocopying.

2. Apart from brand names, organizations have their own company names. Some company
names are considered market assets. Their names ring a bell. They are popular. They have
gainfully created an impression to the consumers. In fact, they need not advertise. Their
"names" simply "SELL Many of these organizations have withstood the tests of time, as in the
case of General Electric.

3. Customer satisfaction is not considered an intangible market asset. It simply meets the
minimum requirements of making and closing a business deal. More than customer satisfaction
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 12 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

is customer loyalty. The market benefits derived from customer loyalty are many. Customer
loyalty helps organizations attain a bigger market share. It is a result of the intimate relationship
between the customer and the supplier and is characterized by sustained concern and support.
Support may be in the form of financial, technical, marketing, and managerial assistance. In the
end, both customer and supplier benefit from each other and consequently, long-term business
relationships are assured.

4. Having many distribution channels does not automatically assure market control. What is
important is the presence of efficient distribution channels that are structured, systematized,
and comprehensive. This enables organizations to extend beyond their existing reach. As a
result, organizations are able to attract potential customers, maintain their present customers,
and even gain the customers of their competitors.

5. Networking per se will not create market ascendancy. Instead, organizational alliances and
linkages need to be strategic and collaborative. They should look into the best practices of
each of their organizational partners, benchmark them and be even better, if possible.
Accordingly, organizations become more vigorous, progressive, and successful.

Market Dominance

Market dominance refers to the extent to which a company or a brand holds a significant and
influential position within its industry or market segment. A dominant market position means that a
particular company or brand has a substantial share of the market compared to its competitors, and it
can significantly influence market dynamics and set industry standards.

The competitive edge or dominance brought about by market assets includes:

1. An effective but less expensive medium for product and service identification. Aside from
denoting ownership, branding creates popularity and product awareness. Its inherent
advertising advantage effectively promotes the organization's products and services at
minimum costs or no costs at all.
2. A company name that is well-known, recognized, established, and reputable significantly
increases the financial worth of an organization. Its value becomes more than its physical
assets, ranging from 50 to more than 100%. Some call it "goodwill." This is monetarily valued
when deals like sales, mergers, and joint ventures are closed.
3. Repeat business is a by-product of customer loyalty. Suppliers who have nurtured a degree of
affinity and intimacy with their customers create a unique form of market. advantage. There is
an assurance of continuing customer loyalty and mutually profitable collaboration.
4. Increased product and service sales result from efficient and well-organized modes of bringing
goods and services to the public. They minimize scheduling and transportation costs on the
one hand and optimize market sales on the other hand. In both cases, the sum of the market
asset benefits is heightened.

Infrastructure Assets

Infrastructure assets typically refer to the physical facilities and systems owned and operated by the
company to support its business operations. These assets are critical for the company's day-to-day
functioning and contribute to its overall success. The specific infrastructure assets of a private
company can vary depending on the industry and nature of the business. Here are some common
examples of infrastructure assets for a private company:

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 13 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

1. Office Buildings: The company's office buildings or corporate headquarters are considered
infrastructure assets. These facilities provide workspace for employees, administrative
functions, and customer interactions.

2. Production Facilities: For manufacturing companies, production facilities, factories, or plants

are significant infrastructure assets. These assets are used to produce goods and products for
the market.

3. Warehouses and Distribution Centers: Companies involved in logistics, retail, or e-commerce

often own warehouses and distribution centers to store inventory and manage the movement
of goods.

4. Information Technology (IT) Infrastructure: IT infrastructure includes servers, data centers,

computer networks, and communication systems that support the company's digital operations,
data storage, and information exchange.

5. Fleet and Vehicles: For companies involved in transportation, delivery services, or logistics, the
fleet of vehicles (e.g., trucks, vans) used for transportation is an essential infrastructure asset.

6. Research and Development (R&D) Facilities: Companies engaged in research and

development may have dedicated R&D facilities or laboratories for testing and innovation.

Comparative Advantage

The comparative advantage of a company using infrastructure assets refers to the company's ability to
leverage its existing infrastructure assets more efficiently or effectively than its competitors. It means
that the company can produce goods or deliver services at a lower cost or with higher quality due to its
strategic utilization of infrastructure resources. This comparative advantage allows the company to
gain a competitive edge in the market and potentially capture a larger market share.

It is important for companies to continuously evaluate and optimize their use of its intellectual Property
Ownership asset, human resource assets, market assets, and infrastructure assets to maintain their
comparative advantage. Changes in technology, market dynamics, or customer preferences can
impact the efficiency of these assets. Companies must invest in upgrades, adapt to changing
conditions, and innovate to sustain and enhance their comparative advantage over time.

A picture of a strategic asset management is shown below:

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 14 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

The figure above shows what a company could achieve if the strategic assets are properly managed.
In summary, possession and management of competitive strategic assets create a viable and valuable
edge in organizations. More particularly, intellectual property ownership assets are monopolistic
assets. Human assets bring about leverage, influence, and power while market assets result in market
dominance and ascendancy. Comparative advantage is a natural derivative of infrastructure assets.

Asset Management Strategies

Managing the strategic assets of an organization is optimizing its valued resources. These assets are
intellectual property assets, human resource assets, market assets, and infrastructure assets.
Considered as pillars of effective competitive asset management, three distinct but interrelated
approaches are presented. They are competency learning, strategic enhancement, and competitive
innovation. The relationship of these components is shown in the figure below:

Competency Learning

Competency refers to the knowledge, attitudes, and skills expected of an individual in carrying
out his job tasks. It is aligned to the organization's vision-mission. It is a necessary tool for the
actualization of organizational plans and the implementation of strategies. It puts emphasis on
evaluation and accountability of performance. It is essential in the attainment of optimum
productivity.

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 15 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

Examples of competencies are business orientation, commitment to excellence, analytical

thinking, presentation, and decision-making skills. Every job task requires specific
competencies. Generally, these competencies should be based on specific job descriptions
that clearly delineate the tasks, functions, and responsibilities expected of an individual. In
other words, each job competency has to be correctly identified, clearly defined, and fully
explained. Precise and clear job descriptions result in the following benefits:

1. Provide employees with a performance framework with respect to requisite knowledge,

skills, and attitudes.
2. Assure management that employees performing definite job tasks possess the
necessary competencies.
3. Streamline organizational management in terms of ill-equipped employees,
redundancy, low productivity, and cost-related wastes related to inefficiency and
ineffectiveness.
4. Serve as bases for evaluating work output for reward and promotion purposes,
monetary, or otherwise.
5. Provide the blueprint for preparing and conducting recruitment, se lection, hiring, and
training development programs. Thus, only employees with "the right fit" are recruited
and hired. Efforts are directed toward proactivity, differentiation, innovation, smart
strategies, productivity, effectiveness, and competitive advantage. Accordingly,
organizations become productive.
6. Allow young people possessing competencies to move up the corporate ladder faster
than those who are inept and deficient. As compared in the past, seniority will not be a
priority anymore. This is the new evolving paradigm on competency learning.

Classification of Competencies
1. Core Competencies
2. Functional Competencies
3. Managerial Competencies

Strategic Enhancement

Another factor of successful intellectual capital management is strategic enhancement. Given a

dynamic environment where product cycles are shorter, and where the need to be efficient and cost-
effective has never been that critical, organizations of today have no other alternative but to be
uniquely knowledgeable to survive and compete. There are different ways in strategically enhancing
an organizational memory-based system. They are the following:

1. Maximize the reach of the organization's infrastructure technology.

2. Corporate entities need to appreciate the business value of knowledge, information, and
communication technology.
3. Continuously conduct formal and informal types of training.
4. Systematize a process of enriching job pathing of employees beginning from being starters
with zero or negligible knowledge to becoming learners through supervised apprenticeship;
5. Empower employees to reach sustainable self-development by promoting valuable knowledge,
rewarding those who unselfishly share their knowledge to others and to the organization.
6. Interact with experts who have proven their worth and expertise in their specialized fields.
7. Prepare programs for employees leading to attitudinal change.
8. Provide access to needed resources.
9. Broaden networking through strategic alliances, which can come from within and from the
outside.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 16 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

10. Analyze cultures.

Competitive Innovation: Creating Bargaining Power

The term, "innovation," is the best assurance in achieving business sustainability, competitive
advantage, and consequently, creating bargaining power. Sailing away from existing traditional
practices, innovation may refer to any of the following:

1. Creating, conceptualizing, or inventing new ideas. It is re-engineering new insights and

knowledge. It is "originality in action." Organizations need to identify employees who come up
with new concepts, propositions, plans, competencies, capabilities, proficiencies, processes,
techniques, presentations, and others.
2. Initiating a paradigm shift, the organization encourages a transition from a conservative
mindset to one characterized by openness, willingness, assertiveness, proactivity, focus, and
adaptability. This approach is vital to effectively respond to evolving environmental and
organizational dynamics. These outlook affects the organization in two ways:


"Promotes a culture of innovation, fostering an atmosphere of readiness and
adaptability among employees to embrace new opportunities and possibilities.
 Establishing an innovative culture, the organization fosters openness to embrace new
learnings and systems across all aspects, including vision, goals, objectives, plans,
management, performance, processes, systems, and results. This approach extends to
encompass values, attitudes, organizational philosophy, aspirations, and management
style, creating a receptive environment for embracing new ideas and approaches.
3. "Revolutionizing" a synergistic outlook and willingness to invent a spectrum of "new
perspectives;' unique insights and knowledge between and among organizational units and
departments.

Innovation Scenarios

To innovate is to present any of the following scenarios:

1. Differentiating existing products and services. On the softer side, differentiation is a "lower"
version of innovation. It involves improving what is already existent. Such improvements may
come in different forms like highlighting features that are generally overlooked, strengthening
attributes that are weak, and making little or big improvements.
2. Reinventing products and services. This involves more aggressive and radical changes. It is
more deliberate than differentiation. It includes conceiving mentally, redirecting, devising,
repackaging, and even re-introducing a product or a service through added features, new
slogans, and strategies to achieve a higher impact on public imaging.
3. Continuously experimenting. This involves faithfully undertaking research for new
product/service development, approaches, and processes,
4. Applying recent and new technologies in information or communication will significantly change
organizational structures and systems for optimality.
5. Changing business models. This involves generating a new framework and approach
characterized by innovative, smart, and strategic ideas and plans in pursuing and conducting a
business.
6. Creating new products and services to "futurize" the organization.
7. Widening the breadth and depth of intellectual capital found in individuals, teams, and
departments, particularly, intellectual property assets and ownership. This feature of intellectual

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 17 of 7
 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.:CBM2-1STSEM-2023-2024

capital management essentially creates the organization's bargaining power. The best proof of
competitive innovation is Bill Gates.

In summary, competencies today are more important than seniority. The degree of
performance or delivery of outcomes is a significant indicator of how individuals will
succeed in their respective careers. Strategic enhancing widens one's career horizon while
achieving competitive innovation creates his/her bargaining power.

VI. LEARNING ACTIVITIES

VII. ASSIGNMENT

VIII. EVALUATION

IX. REFERENCES

e-RESOURCES

“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for
educational purposes only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 18 of 7