INBAC24-2

ORGANIZATION
AND
MANAGEMENT

MODULE (MIDTERM)
Prepared by:
Ms. Maria Christina D. Parangue, LPT,
RMP, MBA
 Course Description
This course is designed to familiarize the students with the basic
concepts, principles, and processes related to business organization,
and the functional areas of management. Particular emphasis will be
given to the study of management functions like planning,
organizing, leading, and controlling, and orient the students on the
importance of these functions and the role of each area in
entrepreneurship.

Course Objectives
At the completion of the course, learners are expected to be able to:

1. Understand Organization and Management Concepts

2. Evaluate the Management Environment and Approach
3. Differentiate the functions of Management: Planning,
Organizing, Staffing, Leading and Controlling
4. Demonstrate managerial, collaborative and decision-making
skills

Disclaimer
No copyright infringement intended. All information and data
contained in this Module are for informational purposes only. The
author makes no representation as to accuracy, completeness, or
validity of any information or article covered herein. The author shall
not be liable for any errors, omissions, losses, injuries or damages
arising from the use or distribution of this Module. The fair use of all
information obtained from the internet is not the responsibility of the
author in case of unauthorized reproduction and/or distribution of this
Module.

TOPIC 1: MANAGEMENT CONCEPT

 Learning Objectives

At the end of the lesson the students are expected to:

● To define Organization and Management

● To differentiate the functions of Management
● To explore the evolution of management and its theories
● To understand the impact of management to organization

Discussion

Organization is a goal-directed (planning), deliberately-structured

(organizing) group of people working together (leading) to achieve results
(controlling).

Management is the process of coordinating and overseeing the work

performance of individuals working together in organizations, so that they
could efficiently accomplish their chosen aims or goals.

Management covers the whole organization and is present in every area in

the
organization. For management to be successful- coordination, efficiency
and effectiveness is required to carry it out. Similarly, a manager is a
significant person whose role is different from other employees in the
organization. The managerial functions are performed by the manager.
Thus, it can be summarized that all organizations—no matter the kind, size,
or location—need good managers in order to successfully achieve their
organizational goals and objectives.

Defining management:
1. Effectiveness = choosing the “right” organizational goals to pursue
2. Efficiency = maximizing outputs while minimizing inputs
a) Outputs = goods and services delivered by the organization
b) Inputs = human, material, and information resources used to create
goods and services.

Management is the process of planning, organizing, leading and controlling

human and other organizational resources towards the effective
achievement of organizational goals.
Why study management?
A. Increases future job opportunities by developing important technical,
human, and conceptual skills
B. Help people understand and work with their own managers
C. Management is important in all organizations, big and small,
government, nonprofit, etc.

Functions of Management
For managerial duties to be more understandable, it is broken down into
five
functions. These functions include the following: planning, organizing,
staffing,
leading and controlling.

● Planning Involves determining the organization’s goals or

performance objectives, defining strategic actions that must be done
to accomplish them, and developing coordination and integration
activities.

● Organizing Demands assigning tasks, setting aside funds, and

bringing harmonious relations among the individuals and work
groups or teams in the organization.

● Staffing Indicates filling in the different job positions in the

organization’s structure; the factors that influence this function
include: size of the organization, types of jobs, number of individuals
to be recruited, and some internal or external pressures.

● Leading Entails influencing or motivating subordinates to do their

best so that they would be able to help the organization’s endeavor
to attain their set goals.

● Controlling Involves evaluating and, if necessary, correcting the

performance of the individuals or work groups or teams to ensure
that they are all working toward the previously set goals and plans of
the organization.

Management functions when applied to organization and management is

defined as functions needed in order to accomplish the management
process of coordinating and overseeing the work performance of
individuals working together in organizations;

The management functions namely: planning, organizing, staffing, leading,

and controlling—will be wasted if coordination, efficiency, and effectiveness
are not practiced by an organization’s appointed managers. Top-level
managers, middle- level managers, and team leaders or supervisors must
all be conscious of the said practices of successful organizations as they
perform their management functions.

Webster’s Dictionary defines coordination as the harmonious, integrated

action of the various parts and processes of an organization; efficiency is
being able to yield the maximum output from a minimum amount of input;
and effectiveness as being adopted to produce an effect, or being able to
do things correctly. When applied to management functions, coordination
ensures that all individuals, groups, or teams are harmoniously working
together and moving toward the accomplishment of the organization’s
vision, mission, goals, and objectives; efficiency, meanwhile, refers to the
optimal use of scarce resources—human, financial, physical, and
mechanical— in order to bring maximum productivity; and effectiveness
means “doing things correctly” when engaged in activities that will help
the organization attain its aims.

Five eras of management thought

A. An emphasis on organizing: The “classical” era (1910-1930)
1. Two schools of thought
a) Micro focus: “Scientific Management”
(1) Frederick Taylor (known as the “father of scientific management”)
increased productivity by scientifically analyzing jobs to find the “one best
way” to complete the work
(2) Gantt Chart = bar graph used to schedule and allocate resources for a
production job (developed by Henry Gantt)
(3) Frank and Lillian Gilbreth found “one best way” to organize work
through
their time and motion studies
b) Macro focus: “Bureaucracy” (Max Weber)
(1) Weber noted that organizations were becoming more formally rational
and
efficient, with manager’s relying more on positional authority and on rules
and regulations to manage organizations

(2) Henry Ford’s mass production of automobiles demonstrates

bureaucracy
(3) Henry Fayol’s principles of management
(a) Unity of command = each employee reports to only one superior
(b) Unity of direction = workers should be guided by a single plan of action
(c) Scalar chain = organizations should have a chain of authority
extending from the top to the bottom and including all workers

B. An emphasis on leading: The “human” era (1930-1950)

1. Mary Parker Follett emphasized human rather than technical side of
management, arguing that managers should facilitate rather than control
the work of subordinates
2. Lillian Gilbreth studied ways to reduce job stress and argued for child-
labor laws and standard workday hours
3. Chester Barnard believed that organizations were not machines and
could not be managed in impersonal ways of scientific management.
a) Developed notion of “zone of difference,” which refers to activities that
employees will not rebel against doing
4. The Hawthorne Effect
a) Famous studies conducted by Elton Mayo and Fritz Roethlisberger and
sponsored by General Electric
b) Studied whether increased lighting would increase productivity and
found
productivity increased in experimental and control groups
c) The “Hawthorne effect” is the name now used to indicate the tendency
for
workers’ productivity to increase whenever managers treat them with
respect
d) Related phenomenon of “self-fulfilling prophecy” occurs when people are
more productive because their managers have high expectations of them
C. The human relations movement
1. Focus on increasing employee satisfaction in order to improve
productivity
2. Douglas McGregor’s research on Theory X and Theory Y managers
a) Theory X managers assume that people are inherently lazy and will
avoid work unless forced to do it
b) Theory Y managers assume that people are inherently motivated to
work and feel unfulfilled if they do not have the opportunity to contribute to
society

D. An emphasis on planning: The “calculating” era (1950-1970)

1. World War II need to improve industrial productivity led to the
development of “systems analysis,” which was used to analyze complex
problems
2. Three fields emerged out of war-related efforts
a) “Management science” aids in managerial planning by providing
sophisticated quantitative techniques for decision making
(1) Two subfields include “operations research,” which emphasizes
mathematical model building, and “operations management,” which uses
quantitative techniques to help improve efficiency. Includes methods of:
(a) Break-even analysis = determine the sales volume and prices required
to earn a profit, decide which product lines to keep and which to drop,
set prices for products and services
(b) Forecasting = projections that help to plan for production targets,
whether and when to expand production facilities
(c) Inventory modeling = helps managers decide on the timing and
quantity for ordering supplies and how much end-product inventory to
keep on hand
(d) Linear programming = how to allocate scarce resources among
competing uses
(e) Simulations = mathematical models that test the outcomes associated
with making different decisions
b) “Systems theory” highlights managers’ unique responsibilities and
vantage points in overseeing the entire organization
(1) Leading scholars = James D. Thompson, Daniel Katz, and Robert L.
Kahn
(2) Closed system view = looking at managing the organization as though
it
were a self-contained entity
(a) Entropy: The natural tendency for a closed system to fail because it is
unable to acquire the inputs and energy it needs to survive
(3) Open system view = emphasizes the organization’s larger environment
(a) Synergy: an open system view is more likely to lead to synergy, in
which two or more systems work jointly together better than if they
would if they were working independently
c) “Contingency theory” suggests that there is a fit between organizational
structures and systems, technology, and the larger environment; therefore
managers need to weigh many different concerns
(1) Herbert Simon won the Nobel Prize for his research in this area
(2) Bounded rationality = idea that even the best management decision-
making process is limited by a lack of complete information and limited
cognitive ability
(3) Tom Burns and G.M. Stalker’s contingency argument that there is no
“one
best way” to manage
(a) Example: mechanistic structures (characterized by many formal rules
and centralized authority) are best in stable environments
(b) Example: organic structures (characterized by flexible rules and
decentralized authority) are best in less stable environments
(4) John Child’s “strategic choice theory” says that the dominant coalition
(managers) make three key strategic decisions based on their values and
beliefs
(a) What constitutes “effective” management?
(b) What is the organization’s domain (including industry, suppliers, etc)?
(c) What should the organization’s internal structure be?

E. An emphasis on controlling: The “values and beliefs” era (1970-

1990)
1. Social era of questioning the status quo and the role of values and
beliefs in
organizations
a) Institutionalization = certain practices or rules becoming valued in and
of
themselves, even though they may no longer be useful for the organization
2. Control and the social construction of reality
a) Many of what we accept as objective “natural facts of life” actually are
socially
constructed “moral facts of life”
b) Increased attention to organizational culture and the “symbolic” role of
management in creating meaning for organizational members

F. The call for Multistream management: The “reconsidering” era (1990

to present)
1. A growing discontent with Mainstream status quo has led people to look
at a number of important issues in management
a) Ecological sustainability: Increasing scientific evidence shows that our
current lifestyle is harming the environment
b) Social justice: Income inequality is growing within organizations and
countries, and across countries
c) Physical well-being: Research indicates that focus on materialism and
individualism is associated with physical and emotional costs
d) Aesthetic costs: Do massive organizations and highly specialized jobs
contribute to meaningful work and communities that are pleasing to the
senses?
e) Spiritual interest: Movement toward increased spirituality and religion
and away from materialism and individualism

Review Questions

1. What is the difference between Effectiveness and Efficiency?

2. Provide situational examples on the 5 functions of Management.
2. Discuss each eras of Management thoughts.

Assessment
“Think, Pair, Share” Find a partner, discuss a management theory with the
partner citing thoughts and examples then be prepared to share it with the
class.

References

Cabrera,H Altarejos, A. and Benjamin,R. [Link] and

[Link] Araneta, [Link] Group, Inc.

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication
 TOPIC 2: MANAGEMENT ENVIRONMENT
Learning Objectives

At the end of the lesson the students are expected to:

● To understand the importance of stakeholders

● To evaluate the internal, external and international environment that
affects the organization
● To demonstrate analytical skills through environmental scanning

Discussion

A stakeholder is an individual or a group of individuals with an interest,

often financial, in the success of a business. The primary stakeholders in a
corporation include its investors, employees, customers, and suppliers.
Stakeholders can be internal or external to an organization. Internal
stakeholders are people whose interest in a company comes through a
direct relationship, such as employment, ownership, or investment.
External stakeholders do not directly work for or with a company but are
affected by the actions and outcomes of the business. Suppliers, creditors,
and public interest groups are all considered external stakeholders.

Stakeholder = anyone in or outside the organization who is directly

affected by the organization and has a stake in its performance
1. Customers
a) The focal stakeholder of an organization’s product and service outputs
b) Developing a strong customer base with advertising, quality products,
and
customer service is critical to the bottom line
2. Members
a) Includes the organization’s paid employees and volunteers who provide
the labor to accomplish the organizational objectives
b) Managers attempt to maximize members’ productivity through rewards
that appeal to members’ self interests (e.g., benefits, pay, praise)
3. Owners
a) Make the core decisions about what an organization is and does (e.g.,
board of directors, top management)
4. Other organizations
a) Suppliers and competitors set restrictions on what managers can do

Macro-Environment
It comprises general forces that affect all business activities in the market.
The company and all of the other actors operate in a larger macro-
environment of forces that shape opportunities and pose threats to the
company.
It refers to those factors which are external to a company's activities and
do not concern the immediate environment.

Demographic forces
● Demography is the study of human populations in terms of
size, location, age, gender, race, occupation, and other
statistics.
● The demographic environment is of major interest to marketers
because it involves people, and people make up markets
● Demographic data helps in preparing geographical marketing
plans, household marketing plans, age, and sex wise plans.
● It influences behavior of consumers which in turn will have a
direct impact on the marketplace.
● A marketer must communicate with consumers, anticipate
problems, respond to complaints and make sure that the firm
operates properly.

Economic forces
● Factors influencing consumer buying power and strategies
(stage of the business cycle, inflation, unemployment,
resources, income etc.)
● Affecting consumer purchasing power and spending patterns.
● Marketers must pay close attention to major trends and
consumer spending patterns both across and within their world
 markets.

Under economic environment manager generally studies

1. Trends of gross national product.

2. Patterns of real growth in income.
3. Variations in geographical income distribution.
4. Borrowing pattern, trends and governmental and legal
restrictions.
5. Major economic variables.

Inflation and Deflation

➢ Inflation: The devaluation of money by reducing what it can buy
through continued price increases.
➢ Deflation: Falling prices

Unemployment
The proportion of people in the economy who do not have jobs and are
actively looking for work.

Income
Discretionary Income: the amount of money people have spent after
paying bills and necessities.

Resource Availability
Demarketing: reducing consumer demand for a good or service to a
level that the firm can supply

Natural Forces
● The natural environment consists of many amenities that
attract tourists, such as conserving natural habitats, resources,
endangered species, minimizing environmental impact,
recycling, energy efficient products and clean air.
● The natural environment involves natural resources needed as
inputs by marketers or that are affected by marketing
activities.

Natural Environment Trends

➢ Shortage of raw materials
-Limited quantities of non-renewable resources.
➢ Increased pollution.
-Waste disposal, air/water pollutants.
➢ Increased government intervention.
-When Boracay Island was ordered to stop accepting tourists.
➢ Environmentally sustainable strategies.
 - G. R. E. E. N. movement.

Technological Forces
● It is the application of science, inventions, and innovations to
solve problems
● Technology has shaped our destiny which has given us wireless
internet, can let us communicate with people all over the globe,
can send documents anywhere and anytime and inexpensive
worldwide transportation.
● Technology changes rapidly.
● It creates new markets and opportunities for the boom of online
selling.
● The challenge is how to convince buyers of the quality of your
product and how to make practical, affordable products.
● Safety regulations result in higher research costs and longer time
between conceptualization and introduction of product.
● New technology has a long – term competitive advantage because
it creates more and better products, but it can make existing
product obsolete.

Political / Legal Forces

● Marketing decisions are strongly affected by developments in the
political environment.
● The laws, government agencies, and pressure groups that
influence, and restrict the activities of various organizations and
individuals in the society.
● Legislation and regulation affecting business have been enacted
for three reasons.
● Protects companies from each other
● Customer from unfair business practices
● Society’s interest against unrestrained business behavior.

Cultural / Social Forces

● Core beliefs and values are passed on from generation to
generation and are reinforced by schools, churches, business, and
government.
● The cultural environment includes institutions and other forces
that affect society’s basic values, perceptions, preferences, and
behaviors.
● Social responsibility has crept into the marketing literature as an
alternative to the market concept.
● Socially responsible marketing is that business firms should take
the lead in eliminating socially harmful products.

Elements of Culture
 a. Language
b. Manners and Customs
c. Technology and Material Culture
d. Social Institutions – business, family
e. Education – transmitting values, skills, attitudes etc.
f. Aesthetics – attitude toward beauty, art, music etc.
g. Religion

There are lots of elements in the macro environment but to help break
down this complexity into more digestible parts, mnemonics is created.
One of the most popular mnemonics is PEST, which stands for:

• Politics. “What are the different pieces of legislation, including tax rates,
that affect the business? How likely is it for the government to intervene in
the industry? How stable is the working environment in terms of political
stability and overall predictability?”

• Economics. “Is the market growing or shrinking? What is the savings

rate of the population, and how is the employment situation? Is consumer
spending increasing or decreasing? Do people feel that their quality of life
is improving? How volatile is the exchange rate, the interest rate, and other
essential indicators?”

• Social. “Is the population growing or shrinking? Is it aging or the broad

demographic is getting younger? What are their interests? What are the
lifestyles that they lead? How do the markets behave, especially in terms of
assessing and consuming your industry products?”

• Technological. “What are the new technologies that are changing the
business landscape? What new ideas are gaining momentum? What new
products and practices could threaten to make your current business
obsolete?”

Going through the different elements above is what is called PEST analysis.
The acronym PEST can sometimes be rearranged as “STEP”. But in the end,
it is all about identifying important trends in the environment. But why
trends? It is because trends become the reality of the near future. Since it
also takes time to mobilize a new product concept, you would want your
product concept to be viable in the near future where it belongs. “Trends
are all about momentum: it is where the market is going for the long haul.
That is what is worth investing in.”

Sample trends:
• The continuing growth of smartphone penetration
• The continuing growth in credit card usage.
 • The movement toward higher value information-oriented jobs.
• The growing presence of multinational franchises even in non-
food industries.

Knowledge of relevant trends can lead to insights into possible

opportunities and threats to a firm’s operations.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and

so a SWOT analysis is a technique for assessing these four aspects of your
business.

SWOT Analysis is a tool that can help you to analyze what your company
does best now, and to devise a successful strategy for the future. SWOT
can also uncover areas of the business that are holding you back, or that
your competitors could exploit if you don't protect yourself.

A SWOT analysis examines both internal and external factors – that is,
what's going on inside and outside your organization. So some of these
factors will be within your control and some will not. In either case, the
wisest action you can take in response will become clearer once you've
discovered, recorded and analyzed as many factors as you can.

SWOT analysis can help you to challenge risky assumptions and to uncover
dangerous blindspots about your organization's performance. If you use it
carefully and collaboratively, it can deliver new insights on where your
business currently is, and help you to develop exactly the right strategy for
any situation.

For example, you may be well aware of some of your organization's

strengths, but until you record them alongside weaknesses and threats you
might not realize how unreliable those strengths actually are.

Equally, you likely have reasonable concerns about some of your business
weaknesses but, by going through the analysis systematically, you could
find an opportunity, previously overlooked, that could more than
compensate.

SWOT analysis involves making lists – but so much more, too! When you
begin to write one list (say, Strengths), the thought process and research
that you'll go through will prompt ideas for the other lists (Weaknesses,
Opportunities or Threats). And if you compare these lists side by side, you
will likely notice connections and contradictions, which you'll want to
highlight and explore.
You'll find yourself moving back and forth between your lists frequently. So,
make the task easier and more effective by arranging your four lists
together in one view.

A SWOT matrix is a 2x2 grid, with one square for each of the four aspects
of SWOT. (Figure 1 shows what it should look like.) Each section is headed
by some questions to get your thinking started.

Strengths: What do you do well? What unique resources can you draw on?
What do others see as your strengths?

Weaknesses: What could you improve? Where do you have fewer

resources than others? What are others likely to see as weaknesses?

Opportunities: What opportunities are open to you? What trends could

you take advantage of? How can you turn your strengths into
opportunities?

Threats: What threats could harm you? What is your competition doing?
What threats do your weaknesses expose to you?

Avoid relying on your own, partial understanding of your organization. Your

assumptions could be wrong. Instead, gather a team of people from a
range of functions and levels to build a broad and insightful list of
observations.

Then, every time you identify a Strength, Weakness, Opportunity, or

Threat, write it down in the relevant part of the SWOT analysis grid for all
to see. Let's look at each area in more detail and consider what fits where,
and what questions you could ask as part of your data gathering.

Strengths are things that your organization does particularly well, or in a

way that distinguishes you from your competitors. Think about the
advantages your organization has over other organizations. These might be
the motivation of your staff, access to certain materials, or a strong set of
manufacturing processes.

Your strengths are an integral part of your organization, so think about

what makes it "tick." What do you do better than anyone else? What values
drive your business? What unique or lowest-cost resources can you draw
upon that others can't? Identify and analyze your organization's Unique
Selling Proposition (USP), and add this to the Strengths section. Then turn
your perspective around and ask yourself what your competitors might see
as your strengths. What factors mean that you get the sale ahead of them?
Remember, any aspect of your organization is only a strength if it brings
you a clear advantage. For example, if all of your competitors provide high-
quality products, then a high-quality production process is not a strength in
your market: it's a necessity.

Weaknesses, like strengths, are inherent features of your organization, so

focus on your people, resources, systems, and procedures. Think about
what you could improve, and the sorts of practices you should avoid.

Once again, imagine (or find out) how other people in your market see you.
Do they notice weaknesses that you tend to be blind to? Take time to
examine how and why your competitors are doing better than you. What
are you lacking? Be honest! A SWOT analysis will only be valuable if you
gather all the information you need. So, it's best to be realistic now, and
face any unpleasant truths as soon as possible.

Opportunities are openings or chances for something positive to happen,

but you'll need to claim them for yourself!

They usually arise from situations outside your organization, and require an
eye to what might happen in the future. They might arise as developments
in the market you serve, or in the technology you use. Being able to spot
and exploit opportunities can make a huge difference to your organization's
ability to compete and take the lead in your market. Think about good
opportunities that you can exploit immediately. These don't need to be
game-changers: even small advantages can increase your organization's
competitiveness. What interesting market trends are you aware of, large or
small, which could have an impact? You should also watch out for changes
in government policy related to your field. And changes in social patterns,
population profiles, and lifestyles can all throw up interesting opportunities.

Threats include anything that can negatively affect your business from the
outside, such as supply-chain problems, shifts in market requirements, or a
shortage of recruits. It's vital to anticipate threats and to take action
against them before you become a victim of them and your growth stalls.

Think about the obstacles you face in getting your product to market and
selling. You may notice that quality standards or specifications for your
products are changing, and that you'll need to change those products if
you're to stay in the lead. Evolving technology is an ever-present threat, as
well as an opportunity! Always consider what your competitors are doing,
and whether you should be changing your organization's emphasis to meet
the challenge. But remember that what they're doing might not be the
right thing for you to do. So, avoid copying them without knowing how it
will improve your position.
Be sure to explore whether your organization is especially exposed to
external challenges. Do you have bad debt or cash-flow problems, for
example, that could make you vulnerable to even small changes in your
market? This is the kind of threat that can seriously damage your business,
so be alert.

Example of SWOT Analysis

Strengths: What do you do well? What unique resources can you draw on?
What do others see as your strengths?

● We are able to respond very quickly as we have no red tape, and no

need for higher management approval.
● We are able to give really good customer care, as the current small
amount of work means we have plenty of time to devote to
customers.
● Our lead consultant has a strong reputation in the market.
● We can change direction quickly if we find that our marketing is not
working.
● We have low overheads, so we can offer good value to customers.

Weaknesses: What could you improve? Where do you have fewer

resources than others? What are others likely to see as weaknesses?

● Our company has little market presence or reputation.

● We have a small staff, with a shallow skills base in many areas.
● We are vulnerable to vital staff being sick or leaving.
● Our cash flow will be unreliable in the early stages.

Opportunities: What opportunities are open to you? What trends could

you take advantage of? How can you turn your strengths into
opportunities?

● Our business sector is expanding, with many future opportunities for

success.
● Local government wants to encourage local businesses.
● Our competitors may be slow to adopt new technologies.

Threats: What threats could harm you? What is your competition doing?
What threats do your weaknesses expose to you?

● Developments in technology may change this market beyond our

ability to adapt.
● A small change in the focus of a large competitor might wipe out any
market position we achieve.
The international environment provides opportunities for cheap inputs,
labor costs, and a larger market for outputs

Multinational corporations (MNCs) - an organization that receives more

than 25 percent of its total sales revenue from outside its home country

Globalization - changes in the four dimensions of the external environment

that have resulted in increased interdependence and integration among
people and organizations around the world

How to internationalize an organization

Four levels of engagement with internationalization from lowest to highest

a) Exporting and importing
(1) Investment is minimal and decision can be reversed quickly and
inexpensively
(2) Exporting = an organization manufactures products in its home country
and transports them to other countries for sale there
(3) Importing = a finished product is brought in from another country for
resale domestically
(4) Global outsourcing = one or more components for an organization’s
products or services are imported from another country
(5) Countertrade = products or services from one country are traded for
products or services from another country
b) Licensing and franchising
(1) Licensing = an organization in one country sells specific resources, like
a
patent or trademark rights, to an organization in another country
(2) Franchising = variation of licensing in which the franchisor in one
country
sells to the franchisee in another country a complete package required to
set
up an organization, including its trademark, trade name, products and
services, technology, etc.
c) Strategic alliances and joint ventures
(1) Strategic alliance = organizations in two or more countries pool their
resources to share the risks and rewards of developing a new market or
product
(2) Joint venture = variation of a strategic alliance in which the partnering
organizations agree to form a separate, independent, jointly owned
organization
d) Foreign subsidiaries - an organization purchases factories or
companies in another country to produce goods and services.
 Review Questions

1. Identify and briefly describe the stakeholders of Navotas Polytechnic

College.
2. Identify the 6 macro-environment forces. Which do you think is the
most important to manage and why?
3. Cite situations where SWOT Analysis can be used.
4. What are the benefits of Internationalizing an organization?

Assessment

“Organizational Impact” Choose a recent news headline and discuss how it

can affect managing an organization and vice-versa.

References

Retrieved from [Link]

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication

TOPIC 3: MANAGEMENT APPROACH

Learning Objectives

At the end of the lesson the students are expected to:

● To identify the functions, roles, and skills of a manager

● To explore the functional areas of Management which are the Human
Resource, Marketing, Operations, Financial, and Information and
Communication Technology
● To demonstrate managerial skills through mastering the
management functions and best practices
 Discussion

THE FIRM AND ITS ENVIRONMENT

A manager undertakes several functions from planning to controlling. He

must take decisions for every type of activity. The decisions of the
manager influence the working of an organization. Intelligence will help a
manager in assessing the present and future possibilities for the business.
He will be able to foresee things in advance and take necessary decisions
at appropriate time.

Business firm may be visualized as an institution in society surrounded by

environment—examples are various external forces influencing its
functioning. It is said that business is a product of environment or business
is the creation of its environment.

Business Environment refers to the factors or elements affecting a business

organization. It may be divided into the External and Internal Business
Environments. Both external (outside) and internal (inside) business
environment factors and elements may affect the business firm’s
performance, either positively or negatively.

The external or environmental factors are beyond the control of the

business firm and the success of the firm will depend to a very large extent
on its adaptability to the environment, its ability to properly design and
adjust the internal factors/variables to take advantage of the opportunities
and to combat the threats of the environment.

COMPONENTS OF THE EXTERNAL BUSINESS ENVIRONMENT

A. General External Business Environment includes the: economic,

sociocultural, politico-legal, demographic, technological, world and
ecological situations.

Economic situations may affect management practices in an organization.

Inflation, rate of interest, changing options in stock market, people’s
spending habits are some examples of factors or elements of economic
situations.

Sociocultural situations include the customers’ changing values and

preferences; customs can also affect management practices in companies.

Politico-legal situations refer to national or local laws, international laws,

and rules and regulations that influence organizational management.
Demographic situations may also influence some managerial decisions in
organizations such as gender, age, education level, income, number of
family members, geographic origin, etc.

Technological situations of companies involve the use of varied types of

electronic gadgets and advanced technology such as computers,
microprocessors and others which have revolutionized business
management.

World and ecological situations are related to the number of global

competitors and markets, as well as the nature and conditions of the
changing natural environment.

All of these must be considered as managers plan, organize, staff, lead,

and control their respective organizations.

B. General Specific Business Environment includes stakeholders,

customers, suppliers, pressure groups, investors or owners, and
employees.

Stakeholders are parties likely to be affected by the activities of the

organization.

Customers are those who patronize the organization’s products and

services.

Suppliers ensure the organization’s continuous flow of needed and

reasonably priced inputs or materials required for producing goods and
rendering services.

Pressure groups are special-interest groups that try to exert influence on

the organization’s actions and decisions.

Investors or owners provide the company with the financial support it

needs.

Employees are comprised of those who work for another or for an employer
in exchange for salaries/wages or other considerations.

COMPONENTS OF THE INTERNAL BUSINESS ENVIRONMENT

An organization’s internal business environment is composed of its:

resources, research and development, production, procurement of

supplies, and products and services it offers.

The organization’s internal environment must also be subjected to internal

analyses—internal strengths and weaknesses, opportunities and threats
(SWOT)—with regard to its:

Resources (financial, physical, mechanical, technological, and human

resources)

Research and development endeavors

Production of goods

Procurement of supplies (materials, inputs, and finance)

Products and services

All of these must be considered prior to organizational planning.

ENVIRONMENTAL FORCES AND ENVIRONMENTAL SCANNING

Environmental scanning involves seeking for and sorting through data

about the organization’s environment. It is the process of conducting
research through surveys, observation, and other methods, and gathering
and analyzing information for the organization.

Components of Environmental Scanning

Developing a competitive mindset – adapting to environmental

uncertainties

Considering business scenarios – considering both unfavorable and

favorable future conditions

Business prediction or business forecasting

SWOT Analysis – SWOT analysis or matrix is one of the most structured and
used planning methods to evaluate business ventures

Benchmarking – the process of measuring and comparing one’s own

products, services, and practices with those of the recognized industry
leaders to identify areas for improvement

SWOT ANALYSIS
SWOT analysis is a basic, straightforward model in environmental scanning
which helps the company identify four key elements:

Strengths – qualities that produce a competitive advantage for the

company; internal and positive

Weaknesses – qualities that put the company at a disadvantage; internal

and negative

Opportunities – external factors expected to work favorably and positively

toward company operation

Threats – external factors expected to have a negative effect on the

company’s operation

LOCAL AND INTERNATIONAL BUSINESS ENVIRONMENT

The Worldwide Environment refers to the external business environment

(such as sociocultural, natural, politico-legal, economic, and technological
factors) around the world.

Globalization refers to changes in the dimensions of the external

environment that result in increased interdependence and integration
among people and organizations around the world.

Understanding the local and international business environment of the firm

requires managers of organizations to sharpen their cultural intelligence.

Cultural Intelligence is an individual’s ability to favorably receive and adjust

to an unfamiliar way of doing things. This will enable them to develop their
ability to accept and adapt to different cultures, both local and
international, that may affect the organization to which they belong.

Anthropologist Edward T. Hall noted that the way people approach and deal
with time varies across cultures:

Monochronic cultures – people tend to do one thing at a time; emphasize

punctuality and strict schedules

Polychronic cultures – people are more flexible with time and accomplish
many things at once

Besides cultural environment, the politico-legal and economic

environments must also be considered. Some countries have stable laws
and good political climates, while others have unstable and risky political
climates.

Review Questions

1. What is meant by business environment and why is it important to

management?
2. Differentiate external and internal business environments.
3. Explain the components of the external business environment.
4. What is environmental scanning and why is it important?
5. Explain SWOT Analysis and its four components.
6. How does globalization affect business organizations?

Assessment

“My Manager” Choose a manager you look up to and create their

autobiography focused on why they inspire you as a manager.

References
 TOPIC 4: MAINSTREAM AND
MULTISTREAM
Learning Objectives

At the end of the lesson the students are expected to:

● To differentiate Mainstream and Multistream

● To recognize the distinct management in Mainstream and in
Multistream
● To exhibit collaborative skills being in a team with same purpose

Discussion

PHASES OF ECONOMIC DEVELOPMENT

Economic Development is a total process which includes not only economic

growth or the increase in the amount of goods and services produced by
the country’s economy but also considers the socio-cultural, political, and
spiritual aspects of the country’s growth.

Although material wealth accumulation is among the concerns of genuine

economic development, its greater concern is the total improvement of the
quality of people’s lives. This is related to sustainable economic
development issues in a country which greatly influence business
management.

Sustainable economic development ensures that the present needs of a

particular generation are fully met without endangering the ability of future
generations to also meet their own needs.

Business managers must be conscious of their decisions to avoid the abuse

of ecological elements—air, water, and soil—as this will threaten
sustainable economic development.

Indicators of Economic Development

Economic development phases/stages in a particular country include:

Economic growth

Improvement of human development index

Availability of benefits provided by science and technology

Societal improvement of opportunities

General welfare of its members

Economic Growth means increase in the given amount of goods and

services produced by the country’s earnings.

Human Development Index is a measure of a country’s socio-economic

development based on data regarding life expectancy at birth, educational
attainment, literacy, and adjusted real income per capita.

Availability of benefits provided by science and technology can save the

time it takes to produce goods or deliver services, contributing to the
overall profits of a business and improving efficiency.

Societal improvement of opportunities refers to social and economic

opportunities such as good schools, stable jobs, and strong social networks
that affect health, medical care, housing, and stress management.

General welfare refers to the satisfaction derived by an individual from

both economic and non-economic factors.

PHASES OF ECONOMIC DEVELOPMENT

The transition of economic development from one phase to another is

usually gradual, and a country may find itself under different economic
phases at different points in time.

Economic development is only possible if a country has maximized the use

of its human and natural resources. Since these resources differ greatly in
quality and quantity, some countries experience drastic development.

CRITERIA IN CLASSIFYING PHASES OF ECONOMIC DEVELOPMENT

A. Means of Livelihood
1. Hunting and fishing phase
2. Pastoral phase
3. Handicraft phase
4. Agricultural phase
5. Industrial phase
 B. Extent of Economic Activity
1. Household economy
2. Village economy
3. National economy
4. International economy
C. Medium of Exchange
1. Barter economy
2. Money economy
3. Money and credit economy

ECONOMIC PROBLEMS

All countries have economic problems because resources—money,

materials, machines—are limited while human needs are unlimited. The
unfair distribution of productive resources and population explosions have
created more economic problems.

Some economic problems to address include income poverty, hunger,

disease, lack of adequate shelter, and exclusion, while promoting gender
equality, education, and environmental stability.

The National Economic and Development Authority (NEDA) laid out the
Philippine Development Plan (PDP) 2011–2016 which adopts a framework
of high growth that is sustained, generates mass employment, and reduces
poverty. The PDP focuses on:

Pursuit of Inclusive Growth

Macroeconomic Policy
Competitive Industry and Services Sectors
Competitive and Sustainable Agriculture and Fisheries Sector
Accelerating Infrastructure Development
Resilient and Inclusive Financial Sector
Good Governance and Rule of Law
Social Development
Peace and Security
Conservation, Protection, and Rehabilitation of the Environment and
Natural Resources

FORMS OF BUSINESS ORGANIZATION

The role of business is to produce goods and services which consumers

need; therefore, business has a relationship with the economy. The
business firm produces goods and services from the factors of production
provided by society. Consumers, in turn, buy these goods and services.
Business firms thus contribute to the country’s economic growth. One
measure of economic growth is the Gross National Product (GNP), defined
as the total market value of goods and services produced by a country in
any given period.

A business enterprise is part of a larger economic system. Other groups

and individuals affect the way business is managed: owners, employees,
customers, suppliers, and the community. The responsibility of a business
to the community is a general one—it should strive to promote social,
economic, and cultural welfare.

KINDS OF BUSINESS

Industries – involved in converting raw materials into finished products

through labor and manufacturing processes.
Examples: Nokia, Honda, Sony, San Miguel Corp., Shell, Purefoods

Commerce – involves the buying and selling process where goods are
moved from production to consumption.
Examples: SM, National Bookstore, Robinsons Department Store

Service Enterprises – primarily concerned with satisfying customer needs.

Public and community services – MERALCO, transportation companies
Professional and trade services – repair shops, contractors, law offices
Recreation services – TV stations, theaters
Personal services – restaurants, schools, beauty parlors

OTHER BASIC FORMS OF BUSINESS LEGAL IN THE PHILIPPINES

According to ownership:
1. Single Proprietorship
2. Partnership
3. Corporation
4. Cooperative
Different organizations have different preferences as to business form
appropriate for their needs and purposes. Managers must be creative in
structuring and organizing work in their firms.

Review Questions

1. Define economic development. How is it different from economic

growth?
2. Discuss the phases of economic development.
3. Explain the criteria in classifying phases of economic development.
4. What are the major economic problems faced by countries?
 5. Discuss the role of business in economic development.
6. Identify and explain the different forms of business organizations.

Assessment

“Mainstream vs Multi Stream” Form 2 groups: Mainstream and Multistream

Groups then choose 5 organizations under each approach and be prepared
to present with the class what each organization does.

References

TOPIC 5: PLANNING
 Learning Objectives

At the end of the lesson the students are expected to:

● To define the function of management which is Planning

● To identify the nature and types of planning
● To recognize the importance of Planning at different levels
● To evaluate various planning techniques and tools
● To practice goal-setting using planning skills

Discussion

Planning is the first and most fundamental function of management. It

involves setting goals, determining actions to achieve those goals, and
deciding in advance the best course of action among alternatives. Planning
provides direction to the organization and serves as the foundation for the
other management functions—organizing, staffing, leading, and controlling.

Planning helps managers anticipate future conditions, reduce uncertainty,

and prepare for possible risks. Through planning, organizations are able to
allocate resources efficiently, coordinate activities, and establish standards
for performance evaluation. Without proper planning, organizations may
act reactively rather than proactively, leading to inefficiencies and poor
decision-making.

Nature of Planning

Planning is goal-oriented, continuous, and pervasive. It is goal-oriented

because it focuses on achieving specific objectives. It is continuous
because plans must be reviewed and adjusted as conditions change.
Planning is also pervasive since it is performed at all levels of management
—from top executives to supervisors.

Planning is both a mental and analytical process. Managers must analyze

information, forecast future trends, and consider internal and external
factors that may affect the organization.

Types of Planning

Planning can be classified based on scope, time frame, and purpose:

 Strategic Planning – Long-term planning done by top management
to set the overall direction of the organization.
 Tactical Planning – Medium-term planning carried out by middle
 management to support strategic plans.
 Operational Planning – Short-term planning done by lower-level
managers to guide daily activities.
Planning can also be classified as:
 Long-term and Short-term Planning
 Standing Plans (policies, procedures, rules)
 Single-use Plans (programs, projects, budgets)

Importance of Planning at Different Levels

At the top level, planning focuses on vision, mission, and long-term goals.
Middle-level managers translate these plans into departmental actions.
Lower-level managers focus on day-to-day planning to ensure tasks are
completed efficiently. Effective planning at all levels ensures coordination,
reduces waste, and improves organizational performance.
Planning Techniques and Tools
Managers use various tools to assist in planning, such as:
 Forecasting – predicting future conditions based on past and
present data
 Budgeting – allocating financial resources to activities
 Scheduling – setting timelines for tasks and projects
 SWOT Analysis – identifying strengths, weaknesses, opportunities,
and threats
 Goal-setting – establishing clear, measurable, and achievable
objectives
These tools help managers make informed decisions and prepare for
uncertainties.

Review Questions

1. What is planning and why is it considered the first function of

management?
2. Discuss the nature of planning.
3. Differentiate strategic, tactical, and operational planning.
4. Why is planning important at different levels of management?
5. Identify and explain at least three planning tools used by managers.

Assessment
“Creating a Proposal” Plan an activity that whereas all resources are just
internal and minimal.

References

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication.

Cabrera, H., Altarejos, A., & Benjamin, R. (2016). Organization and

Management. Vidal Group, Inc.

*** End of Module ***

INBAC24-2
ORGANIZATION
AND
MANAGEMENT

MODULE (FINAL)

Prepared by:
Ms. Maria Christina D. Parangue, LPT, RMP, MBA

Course Description

This course is designed to familiarize the students with the basic concepts,
principles, and processes related to business organization, and the
functional areas of management. Particular emphasis will be given to the
study of management functions like planning, organizing, leading, and
controlling, and orient the students on the importance of these functions
and the role of each area in entrepreneurship.

Course Objectives

At the completion of the course, learners are expected to be able to:

1. Understand Organization and Management Concepts

2. Evaluate the Management Environment and Approach
3. Differentiate the functions of Management: Planning,
Organizing, Staffing, Leading and Controlling
4. Demonstrate managerial, collaborative and decision-making skills

Disclaimer

No copyright infringement intended. All information and data contained in

this Module are for informational purposes only. The author makes no
representation as to accuracy, completeness, or validity of any information
or article covered herein. The author shall not be liable for any errors,
omissions, losses, injuries or damages arising from the use or distribution
of this Module. The fair use of all information obtained from the internet is
not the responsibility of the author in case of unauthorized reproduction
and/or distribution of this Module.
TOPIC 6: ORGANIZING

Learning Objectives

At the end of the lesson the students are expected to:

● To define the function of management which is Organizing

● To identify the nature and types of Organizing
● To recognize the importance of Organization theories and application
● To differentiate Formal and informal organizations
● To practice tasks delegation using organizing skills

Discussion

Organizing is the management function that follows planning and focuses

on arranging tasks, people, authority, and resources in a systematic way to
achieve organizational goals. Once objectives and plans have been
established, organizing determines how work will be divided, coordinated,
and controlled within the organization.

Organizing involves several important activities:

1. Identification and division of work
Work is broken down into specific tasks to promote specialization and
efficiency. Division of labor allows employees to develop expertise in
their assigned roles, resulting in increased productivity and improved
quality of output.
2. Grouping of activities
Related tasks are grouped into departments or units. This grouping
helps improve coordination, communication, and supervision within
the organization.
3. Assignment of duties and responsibilities
Tasks are assigned to individuals based on their skills, experience,
and qualifications. Proper assignment ensures clarity of roles and
prevents overlapping responsibilities.
4. Establishment of authority and responsibility relationships
Clear lines of authority are created so employees know who they
report to and who has decision-making power. Authority must always
be accompanied by responsibility to ensure accountability.

Effective organizing promotes coordination, minimizes duplication of work,

and ensures efficient utilization of organizational resources. It also helps
create harmonious relationships among individuals and work groups.
The result of organizing is the organizational structure, which defines
reporting relationships and communication flow. Structures may be
functional, divisional, or matrix, depending on the organization’s size,
goals, and environment.

Review Questions

1. What is organizing in management?

2. Why is organizing important after planning?
3. Explain the principles of organizing.
4. Differentiate the types of organizational structures.

Assessment

“Let’s get Organized” Revise and organize the Activity Proposal. Delegate
tasks.

References

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication.
TOPIC 7: STAFFING

Learning Objectives

At the end of the lesson the students are expected to:

● To define the function of management which is Staffing

● To identify the Staffing process: Recruitment, Selection, Training and
development, Compensation/wages and performance evaluation/
appraisal, Employee relations, Employee movements and Rewards
Systems
● To appreciate the importance of human resources through enhancing
the staffing process.

Discussion

Staffing is the management function that focuses on acquiring, developing,

and maintaining a competent workforce. It ensures that the organization
has the right number of people with the right skills at the right time to
achieve organizational objectives.

The staffing process consists of the following steps:

1) Manpower planning
Determining the present and future human resource requirements of
the organization.
2) Recruitment
Attracting qualified candidates to apply for available positions using
internal and external sources.
3) Selection
Choosing the most suitable applicants based on qualifications, skills,
and experience.
4) Training and development
Training improves employees’ performance in their current jobs,
while development prepares them for future responsibilities.
5) Performance appraisal
Evaluating employee performance to identify strengths, weaknesses,
and areas for improvement.
6) Compensation and retention
Providing fair wages, benefits, and incentives to motivate employees
and retain talent.
Staffing is critical because employees are considered the most valuable
asset of an organization. Effective staffing increases productivity, improves
employee morale, and contributes to long-term organizational success.

Review Questions

1. What is staffing?
2. Explain the steps involved in the staffing process.
3. Why is staffing important to organizations?

Assessment

“Our own Staffing Process” Create a staffing process for your own
organization.

References

Cabrera, H., Altarejos, A., & Benjamin, R. (2016). Organization and

Management. Vidal Group, Inc.
TOPIC 8: LEADING

Learning Objectives

At the end of the lesson the students are expected to:

● To define the function of management which is Leading

● To identify Motivation and Leadership theories
● To understand the Communication process and management of
change and diversity
● To explore Filipino and foreign Cultures that affect leading
● To demonstrate leadership skills

Discussion

Leading is the management function that involves directing, motivating,

and influencing employees to achieve organizational goals. While planning
and organizing establish structure and direction, leading focuses on human
behavior and interpersonal relationships.

Leading includes the following elements:

 Leadership
The ability of a manager to influence and guide employees toward
goal achievement.
 Communication
The process of sharing information, instructions, and feedback clearly
and effectively.
 Motivation
Encouraging employees to perform at their best through rewards,
recognition, and support.
 Supervision
Overseeing employee activities and providing guidance to improve
efficiency.

Leadership styles may vary depending on the situation. Managers may

adopt autocratic, democratic, or laissez-faire leadership styles based on
employee needs and organizational conditions. Effective leadership
promotes teamwork, trust, and commitment among employees.

Review Questions

1. What is leadership?
2. Differentiate leadership and management.
 3. Explain the different leadership styles.

Assessment

“Leadership Essay” Create an essay on what makes a good leader.

References

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication.
TOPIC 9: CONTROLLING

Learning Objectives

At the end of the lesson the students are expected to:

● To define the function of management which is Controlling

● To identify the link between planning and controlling
● To identify control methods and systems
● To appreciate the application of management control in accounting
and marketing concepts and techniques
● To explore the role of budgets in planning and control
● To illustrate controlling methods and techniques

Discussion

Controlling is the management function that ensures organizational

activities are performed according to plans. It involves monitoring
performance, comparing results with standards, and taking corrective
action when necessary.

The controlling process consists of the following steps:

 Establishing standards
 Setting performance benchmarks related to quality, quantity, cost, or
time.
 Measuring actual performance
Collecting performance data through reports, observations, and
evaluations.
 Comparing performance with standards
Identifying deviations between expected and actual performance.
 Taking corrective action
Implementing measures to correct deviations and improve future
performance.

Controlling supports accountability, efficiency, and continuous

improvement. It also provides feedback that managers can use to revise
plans and improve decision-making.

Review Questions

1. What is controlling?
2. Explain the steps in the controlling process.
 3. Why is controlling important in management?

Assessment

“Contingency Planning” Create a Contingency plan of the Activity Proposal.

References

Cabrera, H., Altarejos, A., & Benjamin, R. (2016). Organization and

Management. Vidal Group, Inc.
TOPIC 10: DECISION MAKING

Learning Objectives

At the end of the lesson the students are expected to:

● To define decision-making process

● To identify decision-making tools and techniques
● To demonstrate decision-making skills

Discussion

Management functions—planning, organizing, staffing, leading, and

controlling—are interrelated and must be applied together for effective
organizational performance. These functions do not operate independently;
instead, they form a continuous and dynamic management process.

 Planning defines organizational goals and determines actions to

achieve them.
 Organizing arranges tasks, resources, and authority.
 Staffing provides the human resources needed to carry out plans.
 Leading motivates and directs employees toward goal achievement.
 Controlling ensures activities are aligned with plans and objectives.

Managers constantly move between these functions as organizational

conditions change. Effective integration ensures coordination, efficiency,
and long-term sustainability of the organization.

Review Questions

1. Why are management functions interrelated?

2. Explain how each management function supports organizational
goals.

Assessment

“Case Analysis” Analyze assigned business cases using the decision-

making process.
References

Dyck, B. et. al. (2008). Principles of Management. South-Western College

Publication.

TOPIC 11: SPECIAL TOPICS IN MANAGEMENT

Learning Objectives

At the end of the lesson the students are expected to:

● To differentiate forms of business organizations

● To identify Small Business Management and Entrepreneurship
● To explore Family Business Enterprise
● To understand the process of starting a Business and its Legal Forms
and Requirements
● To develop entrepreneurial and organizational skills

Discussion

Review Questions
 1. W

Assessment

“Activity Implementation” Finalize the details and prepare for the activity
implementation on Week 17.

References

*** End of Module ***