Organization and Management Quarter 2 PDF

ORGANIZATIO N AND MANAGEMEN T Quarter 2  BUSINESS ORGANIZATION 2 A business organization is any entity that aims to conduct a commercial enterprise by providing goods and services to customers. 3 Four (4) Main Types of Business Organizatio...

ORGANIZATIO N AND MANAGEMEN T Quarter 2  BUSINESS ORGANIZATION 2 A business organization is any entity that aims to conduct a commercial enterprise by providing goods and services to customers. 3 Four (4) Main Types of Business Organization 4 1. SOLE PROPRIETORSHIP - the simplest and most common form of business ownership and it is owned and run by someone for their own benefit “ a business owned by ONE person” 5 SOLE PROPRIETORSHIP Advantages Disadvantages Easy to start Unlimited liability ( when the owner is responsible for the company’s debts) Economical to form Limited access to credit Proprietors are in-charge Many run out of money Proprietors keep all the The owner may not have profits the necessary skills Taxes are lower than a The business ends when corporation the owner dies 6 Example of SOLE PROPRIETORSHIP Product Service Pepros Store Nicks Lechon Manok Eting Store The Hive Y Me Store Grand B Beauty Parlor Ltab Pharmacy Oasis Hotel Uy Marketing Ruby Kitchenette Ruy Fing Melbertos Reynel Trading Princess Vulcanizing Shop Batik Haus Lianora Funeral parlor 7 SOLE PROPRIETORSHIP 1.What is a Sole Proprietorship? 2. If you are given the opportunity to be a businessman someday, will you have a sole proprietorship as your choice of business form? Explain your answer. 8  2. PARTNERSHIP - it is a form of business organization in which two or more person agree to own and operate a business who share its risks and rewards The partners agree to combine their resources (money, material, and management), they also share their profit and losses. 9 PARTNERSHIP General Limited both owners invest their money, require a formal agreement property, labor to the business between the partners and file a and are both 100% liable for certificate of partnership with the business debts state do not require a formal allow partners to limit their own agreement-can be verbal or even liability for business debts implied between the two business according to their portion of owners ownership or investment an owner who has unlimited Limited partner is an owner who liability and active in managing makes investment in the business the business but does not actively participate in its management and his liability for losses does not extend up to his contribution in the business 10 PARTNERSHIP Advantages Disadvantages Easier to obtain capital Business risk is shared Easier to obtain credit Unlimited legal and financial liability is shared Not dependent on a Disagreements among sale person partners Only taxed once Complexity in termination Diversity in skills Distribution of profits 11 Example of PARTNERSHIP Product Service 12 PARTNERSHIP 1. What is a Partnership? 2. If a partner makes a bad decision, what responsibility do the other partners have? 13 -3. CORPORATION is owned by several people, called share, and has a personality separate and distinct from them - no shareholders of corporations is personally liable for the debts, obligation 14 CORPORATION The shareholders gain from the profit through dividend or appreciation of the stocks but are not responsible for the company’s debts. It can either be stock or non-stock and are controlled by the Board of Directors or Trustees. Registration of corporations is with the SEC (Securities and Exchange Commission) 15 CORPORATION Advantages Disadvantages Limits liability of the Difficult and costly to start owner to debts or losses Ability to raise money by More government selling stock regulation Can be transferred to new Start a business requires owners fairly easily complex paperwork Personal assets cannot be Double taxation seized to pay for business a. Income is taxed debts b. Stockholders pay taxes 16 Example of CORPORATION Product Service Save More Puregold 17 TYPES OF CORPORATIONS 1. Business Corporation (“for-profit” corporation) – a corporation created to do commercial activity for profit 2. Close Corporation – any corporation with stock freely traded and owned by only some shareholders who usually belong to the same family 18 TYPES OF CORPORATIONS 3. Controlled Corporation – a corporation in which the majority of stocks is owned by a single individual or firm 4. Cooperative Corporation – a corporation chiefly structured to provide services and profits to its members rather for a corporate profit19 TYPES OF CORPORATIONS 5. Non-Profit Corporation – a corporation planned for some intention besides producing a profit which is normally given special tax treatment 6. Professional Corporation – a corporation that gives services that 20  TYPES OF CORPORATIONS 7. Public Corporation – whose shares are sold to and among the general public. These are typically government – owned and controlled corporations (GOCCs) 8. S Corporations –with income that is taxed through its shareholders rather than corporation itself. - limited number of shareholders can elect S- corporation tax status under Internal Revenue Code 21 CORPORATION 1. What is Corporation? 2. Do you think corporation is the best form of business organization for the Philippines? Defend your answer. 22 4. COOPERATIVE - an organization that is owned and operated by its member’s capital that they have invested in it from its owners - an autonomous association of persons who voluntarily cooperate for their mutual social, economic and cultural benefit 23 COOPERATIVE - a voluntary association of individuals with a common objective and bond of interest Articles of Cooperation governed the business conduct and operations of the cooperative. In the Philippines, it must duly registered with the Cooperative Development Authority (CDA) to operate legally. 24 COOPERATIVE Advantages Disadvantages Economical to form Only service provision Equal voting right Limited distribution of surplus Members can be below One vote per member 18 No accountability on Continues education debts by members Controlled by member Minimum membership 25 Example of COOPERATIVE Product Service Patanom Cooperative Barbaza Multipurpose Cooperative BVNHS Cooperative 26 COOPERATIVE 1. What is Cooperative? 2. How does a cooperative differs from other forms of business organizations? Compare and contrast 27  Role of Business Organization in Economic  BusinessDevelopment Enterprise create new jobs and provide employment for people.  Increase people’s income to enable them to buy their essential needs.  Help in providing housing and health services to the people, nevertheless the presence of 28  Role of Business Organization in Economic  Another Development contribution is Education. It has a multiplier effect in development as it improves job skills and boost people’s income through employment.  Opens doors for people to exercise freedom to choose how they want to 29 COOPERATIVE 1.What is the role of business in the economy? 2. Identify a recent development in the country that affects business organization. What can you say about it? 30  ECONOMIC DEVELOPMENT - an activities that expand capacities to realize the potential of individuals, firms or communities who contribute to the advancement of society through the responsible production of 31 PHASES OF ECONOMY 32 1. SUBSISTENCE ECONOMY - is moneyless and relies on natural resources to provide for basic needs through hunting, gathering, and 33  2. COMMERCIAL MARKET ECONOMY - is an economy where the output is more than needed to consume in order to survive. 34 3. EMERGING MARKET ECONOMY - is an economy that is an process of becoming a developed economy. 35  4. TECHNOLOGY- BASED ECONOMY - is an economy that commercializes inventions leading to creation of new business enterprise. 36 Answer the following questions: 1. How would you portray the present economic status of the Philippines? Describe briefly. 2. From among the phases of economic development, where do you think is the Philippines? Explain your answer. 37 Answer the following questions: 3. What do you think are the hindrances for the Philippines to attain the last phase of economic development? Name them. 38  GLOBALIZATION - is the means by which countries interact with each other - it is growth to a global or worldwide scale 39  GLOBALIZATION - it is the process of interaction and integration among people and government of different nations, a process driven by international trade and investment and aided by information technology 40  GLOBALIZATION - in simple terms, it is the flow of money, goods, information, and people in increasing speed and magnitude movement 41  GLOBALIZATION - is a term used to describe the increasing connectedness and interdependence of world cultures and economies 42  PLANNING “Planning is deciding in advance what is to be done.” ~ Theo Haimann~ 43  PLANNING “Planning is an intellectual process, conscious determination of course of action, the basing of decision on purpose, facts and considered estimates.” ~ Koontz and O’Donnel~ 44  PLANNING “Without planning business becomes random in nature and decisions become meaningless and adhoc choices.” ~ Koontz and O’Donnel~ 45  PLANNING “Planning is the foundation of most successful actions of any enterprise.” ~ George R. Terry~ 46 Characteristics of PLANNING 1. Planning is an Intellectual Process 2. Planning Contributes to the Objectives 3. A Continuous Process 4. Planning Pervades Managerial Activities 47  Importance of PLANNING  Reduction of Uncertainty  Better Utilization of Resources  Increases Organizational Effectiveness  Reduces the Cost of Performance  Concentration on Objectives 48  Importance of PLANNING  Helps in Coordination  Makes Control Effective  Encouragement to Innovation  Increase in Competitive Strength  Delegation is facilitated 49  PLANNING - is a process which embraces several steps to be taken. It is an intellectual exercise and a conscious determination of course of action. 50  MAJOR STEPS IN PLANNING PROCESS 1. Defining the current situations - to know the present situation of the organization and in defining the existing condition, the organization must examine its internal capabilities as ell as external opportunities and threats 2. Establishing goals and objectives Goal - is the broad and general end outcome that the organization aspire to accomplish Objective - is the specific result based on organizational goal 51  MAJOR STEPS IN PLANNING PROCESS Example of Goal: Increase profit margin Example Objectives: Increase sales volume by 20% in 12 months - the objectives must be SMART Specific – it deals exactly what to be done Measurable – deals with the achievement or progress that can be measured Attainable - refers to the objective by those responsible for achieving it. Realistic – if the objective is possible to attain Time-Bound – the time period for achievement is clearly stated 52  MAJOR STEPS IN PLANNING PROCESS 3. Establishment of Planning Premises Planning Premises-are assumptions about the future understanding of the expected situations. 4. Determining alternative Courses - alternatives properly assessed may prove worthy and meaningful  MAJOR STEPS IN PLANNING PROCESS 5. Evaluation of Alternatives - planners are required to evaluate the alternatives giving due weight-age to various factors involved 6. Selecting a Course of Action - it is the point of decision-making deciding upon the plan to be adopted for accomplishing the enterprise objectives  MAJOR STEPS IN PLANNING PROCESS 7. Formulating Derivative Plans - give effect to and support the basic plan - plans do not accomplish themselves - each manager and department of the organization is to contribute to the accomplishment of the master plan based on the derivative plans  MAJOR STEPS IN PLANNING PROCESS 8. Establishing Sequence of Activities Timing-is an essential consideration in planning. It gives practical shape and concrete form to the programs The starting and finishing times are fixed for each piece of work, to indicate when the within what time that work is to be commenced and completed  MAJOR STEPS IN PLANNING PROCESS 9. Feedback or Follow-up Action - it is essential to realize whether the plan is working well in the present situation - a consistent follow-up is required, and effective implementation and accomplishment of tasks assigned Levels of Management - refers to a line of differentiation between various managerial positions in an organization - determines a chain of command, the amount of authority and status enjoyed by any managerial position 58 Levels of Management THE THREE (3) CATEGORIES 59 Levels Management 60  1. Top Level of Management - it consists of Board of Directors, Chief Executive, or Managing Director - is the ultimate source of authority and it manages goals and policies for an enterprise - it devotes more time on planning and coordinating functions 61 Role of Top Management a. Determine the objectives and broad policies organization b. Prepares strategic plans, policies, department budgets, procedures, schedules etc. c. It appoints the executive for middle level i.e. departmental managers and controls, coordinates the activities of all departments. 62 Role of Top Management a. Determine the objectives and broad policies organization b. Prepares strategic plans, policies, department budgets, procedures, schedules etc. c. It appoints the executive for middle level i.e. departmental managers and controls, coordinates the activities of all departments. 63  Strategic Plans by Top Management - it starts at the highest level with defining a mission and casting a vision - includes a high-level overview of the entire business - it is the foundational basis of the organization and will dictate long- term decisions 64  Strategic Plans by Top Management Vision – is an aspirational description of what an organization would like to achieve or accomplish in the mid-term or long-term future - it is intended to serves as a clear guide of choosing current and future course of action 65  Strategic Plans by Top Management Mission – is a written declaration of an organization’s core purpose and focus that normally remains unchanged over time - values are the beliefs, philosophies, and principles that drive within an organization 66  Strategic Plans by Top Management Strategic plans are all about why things need to be happen. 67  2. Middle Level of Management - it consists of the branch managers and departmental managers - they are accountable to the top management for the functioning of their department - they devote more time to organizational and directional functions 68  Role of Middle Management a. Implement the plans of the organization in accordance with the policies and directives of the top management b. Partake in employment and training of lower level management c. Infer and explain policies from top level management to lower level 69  Role of Middle Management d. Responsible for coordinating the activities within the division or department e. Responsible for inspiring lower level managers towards better performance 70  Tactical Plans by Middle Level Management Tactical Planning supports Strategic Planning. - it includes tactics that the organization plans to use to achieve what’s outlined in the strategic plan 71  Tactical Plans by Middle Level Management Tactical plans ask specific questions specific questions about what needs to happen to accomplish a strategical goal; operational plans ask how the organization will generally do something to accomplish the company’s mission. 72  3. Lower Level of Management - is also known as supervisor/operate level of management - it consists of supervisors, foreman, section officers, superintendent etc. 73  According to R.C. Davis “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. 74  Activities of Lower Level of Management a. Assigning of jobs and tasks to various workers. b. Guide and instruct workers for day to day activities. c. Responsible for the quality as well as quantity of production. 75  Activities of Lower Level of Management d. Entrusted with the responsibility of maintaining good relation in the organization. e. Communicate workers, problems, suggestions, and recommendatory appeals to the higher level and higher- level goals and objectives to the workers. 76  Activities of Lower Level of Management f. Help to solve the grievances of the workers, supervise and guide the subordinates. g. Responsible for providing training to the workers. 77  Operational Plans by Lower Management - are about how things need to happen - the day-to-day running of the company 78  Operational Plans by Lower Management - are most explicit subset of strategic planning, telling, the exact objectives and milestone an organization must reflect on in performing each operations - are often described as single use plans or ongoing plans 79  Operational Plans by Lower Management Single use plans – are those unique plans that are intended to be used only once and simply cover the content involve in one situation - they apply to activities that would not be repeated and often have an 80  Operational Plans by Lower Management Single use plans – they are created for events and activities with a single occurrence such as a single marketing campaign, special sales program because it deals with the who, what, where, how, and how much of the activity 81  Operational Plans by Lower Management Single use plans (Example) Budget – which predicts sources and sums of income and how much they are used for the specific project 82  Ongoing Plans or Standing Plans  Policies – are general course of action on how a manager should attempt to handle routine management responsibilities in response to a specific event or situation 83  Ongoing Plans or Standing Plans  Rule – is a clear and precise guideline of behavior that explains an employee what he should and should not do as a member of the organization 84  Ongoing Plans or Standing Plans Rule are the “dos” and “don’ts” statements put into place to encourage the security of employees and the equal treatment and behavior of employees. 85  Ongoing Plans or Standing Plans  Procedure – is a set of step by step directions that explains the process of carrying out a certain risk such as assessing, ordering and stocking inventory 86 Contingency Planning - is a systematic way to identifying what can go wrong in a situation - can be helpful in circumstances that call for a change 87 Contingency Plans - are made when something unexpected happens or when something needs to be changed 88 STAFFING 89  STAFFING - also called human resource management (HRM) 90  STAFFING - is one of the functions of management that involves having the right number of the right people with the right knowledge, skills, and abilities in the right place at the right time to achieve the goals of the organization 91  STAFFING - is one of the functions of management that involves having the right number of the right people with the right knowledge, skills, and abilities in the right place at the right time to achieve the goals of the organization 92  According to Henry Koontz - staffing is filling and keeping filled, positions in the organization structure. In other words, staffing is the process of acquiring, deploying and retaining a workforce of adequate number and quality to generate affirmative impacts on the organizations effectiveness 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 SMALL FAMILY BUSINESS 116 SMALL FAMILY BUSINESS 117 SMALL FAMILY BUSINESS 118 SMALL FAMILY BUSINESS 119 SMALL FAMILY BUSINESS 120 SMALL FAMILY BUSINESS 121 SMALL FAMILY BUSINESS 122 SMALL FAMILY BUSINESS 123 SMALL FAMILY BUSINESS 124 SMALL FAMILY BUSINESS 125 SMALL FAMILY BUSINESS 126 SMALL FAMILY BUSINESS 127 SMALL FAMILY BUSINESS 128