Organization and Management 1st Half PDF

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 +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ | Credit Units | | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ | | This course deals with the nature | | | of the Organization and | | | Management as applied to | | | business. Students are exposed to | | | defining Organization and | | | Management as well as its | | | importance organizations as well | | | as in the society. | +-----------------------------------+-----------------------------------+ | | 1. discussed the meaning of | | | management and how its nature | | | varies at different levels of | | | the organization; | | | | | | 2. recognized how the functions | | | of management are evolving in | | | today's business environment; | | | | | | 3. described the types of | | | managers and their various | | | roles in the organization; | | | | | | 4. illustrated the skills needed | | | to be an effective manager; | | | | | | 5. recognized and described the | | | sources of competitive | | | advantage for a company; | | | | | | 6. distinguished the major | | | challenges of managing in the | | | new competitive landscape; | | | and | | | | | | 7. realized and appreciated the | | | principles of career | | | management. | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ |  **Let's Learn!:** A section where you can find | | valuable contents about the | | | | Lesson. | +-----------------------------------------------------------------------+ | **Assessment time!** A continuing activity for you to assess what you | | learn from the lessons. | +-----------------------------------------------------------------------+ | | +-----------------------------------------------------------------------+ **\ ** **LESSON 1:** Nature of Management 1. Described the basic function of management in a firm. 2. Discussed the Management skills and how it affects in the Organization. #### Keywords  *How did you come up with these ideas? Are these issues/problems that you have personally encountered or experienced? In this course, we will generate ideas that will guide you to better understand Management.* Let's Learn! ------------ The above definition is the most popular definition of management. However, there are other definitions of management as given by several authors. These are the following: - Management is the process of working with people and resources to accomplish organizational goals. -- *(Bateman, Snell, 2013)* - Good managers do those things effectively and efficiently. To be ***effective*** is to achieve organizational goals while to be ***efficient*** is to achieve these goals with minimal waste. - Management is the attainment of the goals of the organization through the cooperative efforts of its members. *(Medina,2010)* - Management is the process of planning, organizing, leading and controlling productive resources, such as people, money, machines, materials and methods. -- *Prof. James Stoner* What are these resources? - **Manpower** *(the most important asset of an organization).* The people who are working in the organization (employees). - **Money.** The capital used to start the business as well as for the day-to-day operations. - **Machines.** The equipment used in the production of goods. - **Materials.** The ones used in the day-to-day operations of the business. (e.g. computers, office supplies, raw materials) - **Methods.** The processes used in the conduct of the business' operations. (e.g. recruitment and selection process) ***Functions of management*** 1. *Planning* *"The management functions of systematically making decisions about the goals and activities that an individual, a group, a work unit, or the overall organization will pursue."(Bateman, 2013)* In simple language, planning means thinking ahead. This refers to identifying the objectives as well as the things that need to be done to meet a certain goal. For instance your goal is to be at the top of your class, and so planning would involve identifying the things that you need to do in order to be at the top such as studying every night and participating actively in class activities. 2. *Organizing* *"The management function of assembling and coordinating human, financial, physical, informational, and other resources needed to achieve goals". (Ibid)* This function involves allocating the productive resources that you have. Allocating means allotting or apportioning your resources to each of the identified activities in your plan. The resources being referred to here are the 5 M's mentioned above. 3. *Leading.* *"The management function that involves the manager's efforts to stimulate high performance by employees". (Ibid)* This refers to the function of motivating people to do their jobs in order that the goals set will be achieved. This involves giving your employees rewards for a job well done for them to be encouraged to give their best in their work. 4. *Controlling.* *"The management function of monitoring performance and making needed changes". (Ibid)* This function entails evaluating whether the goals set have been achieved or met. This involves the following steps: a. *Setting up standards.* - These standards are the objectives set by the organization. For instance, the business aims to increase sales by 5% by the end of the year. b. *Comparing the actual performance against the standards.* - The objectives are reviewed and compared to what actually happen and what actually has been achieved. For instance, the business has increased sales by only 3% instead of the 5% target. c. *Correcting deviations.* - Deviations happen when the actual results differ from what has been targeted. In the case of the 5% target increase in sales, the achieved 3% increase deviates from the standard. When this happens, corrective actions are done by the organization. For instance, the business may strengthen its promotional campaigns. ***Types of Managers*** - The *top managers* are the top executives of the organization. They are commonly referred to as strategic managers. They are the Chief executive officer (CEO), Chief financial officer (CFO), company presidents and those responsible for the management of the organization as a whole. Figure 1.1 *In a recent poll of chief information officers, half said their responsibilities extend beyond information technology to include top-level concerns such as developing the company's strategy. (Bateman, Snell, 2013)* - The *middle managers* lead the activities of the first-level managers, and in some cases, those of the workers. They are sometimes called tactical managers. They are the department managers (e.g. marketing manager, purchasing manager). Good middle managers provide the skills needed in the operation of the company and practical problem solving that keep it going. - The *first level managers/frontline managers/operational managers* are the ones who are in direct contact with the rank-and-file employees. This is the lowest level of management. They are the supervisors. ***Manager's Roles*** *Roles* are patterns of behavior that are expected of an individual in doing his functions. Figure 1.2 (*Medina, 2010)* Table 1.1 +-----------------------------------+-----------------------------------+ | INTERPERSONAL ROLES | ***Leader**:* Staffing, training | | | and motivating people. | | | | | | ***Liaison***: Maintaining a | | | network of outside contacts who | | | provide information and favors. | | | | | | ***Figurehead***: Performing | | | symbolic duties (ceremonies and | | | serving other social and legal | | | demands). | +-----------------------------------+-----------------------------------+ | INFORMATIONAL ROLES | ***Monitor***: Seeking and | | | receiving information to develop | | | a thorough understanding of the | | | organization and its environment; | | | serving as the "nerve center" of | | | communication. | | | | | | ***Disseminator***: Transmitting | | | information from source to | | | source, sometimes interpreting | | | and integrating diverse | | | perspectives. | | | | | | ***Spokesperson**:* Speaking on | | | behalf of the organization about | | | plans, policies, actions and | | | results. | +-----------------------------------+-----------------------------------+ | DECISION ROLES | ***Entrepreneur**:* Searching for | | | new business opportunities and | | | initiating new projects to create | | | change. | | | | | | ***Disturbance handler**:* Taking | | | corrective action during crises | | | or other conflicts. | | | | | | ***Resource allocator**:* | | | Providing funding and other | | | resources to units or people; | | | includes making or approving | | | significant organizational | | | decisions. | | | | | | ***Negotiator**:* Engaging in | | | negotiations with parties outside | | | the organization as well as | | | inside. | +-----------------------------------+-----------------------------------+ Managerial Roles: What Managers do? *Adapted from H. Mintzberg, The Nature of Managerial Work (as cited by Bateman, 2013).* +-----------------+-----------------+-----------------+-----------------+ | | Frontline | Mıddle-level | Top-level | | | managers | Managers | Managers | +=================+=================+=================+=================+ | Changing Roles | - From | - From | - From | | | operational | administrat | resource | | | implementer | ive | allocators | | | s | e | to | | | to | controllers | institution | | | aggressive | to | al | | | entrepreneu | supportive | leaders. | | | rs. | coaches. | | +-----------------+-----------------+-----------------+-----------------+ | Key Activities | - Creating | - Developing | - Establishin | | | and | individuals | g | | | pursuing | and | high | | | new growth | supporting | performance | | | opportuniti | their | standards. | | | es | activities. | | | | for the | | | | | business. | | | +-----------------+-----------------+-----------------+-----------------+ | | - Attracting | - Linking | - Institution | | | and | dispersed | alizing | | | developing | knowledge | a set of | | | resources. | and skills | norms and | | | | across | values to | | | | units. | support | | | | | cooperation | | | | | and trust. | +-----------------+-----------------+-----------------+-----------------+ | | - Managing | - Managing | - Creating an | | | continuous | the tension | overarching | | | improvement | between | corporate | | | within the | short-term | purpose and | | | unit. | purpose and | ambition. | | | | long-term | | | | | ambition. | | +-----------------+-----------------+-----------------+-----------------+ Table 1.2 *Source: Adapted from C. Barlett and S. Goshal, 'The Myth of the Generic Manager: New Personal Competencies for New Management Roles, 'California Management Review 40, no. I, Fall 1977, pp. 92-116* ***Management Skills*** The following are the skills that people who are in charge in the management of an organization should possess: 1. *Technical skills.* These are the skills referring to one's expertise of a specialized field. For instance, the accounting and finance courses in school will develop the technical skills needed to understand and manage the financial resources of a company. 2. *Interpersonal and communication skills.* These are the skills referring to one's *'You have to get high performance out of people in your organization whom you don't have authority over. You need to read other people, know their motivators, know how you affect them.'- Michael Morris* 3. *Conceptual and decision-making skills.* These are the skills referring to one's ability to identify and solve problems and decisiveness in making decisions for the benefit of the organization and its members. Experience plays an important part in the development of these skills. **Managing in a more Competitive World** According to Bateman, Snell (2013), there are four key elements that make the current business setting different from the past. These are the following: 1. *Globalization.* This has changed the face of the workforce. Management today needs to attract and effectively manage people from all over the world. 2. *Technological change.* The rate at which technology changes is a great challenge to businesses. The Internet is only one of the many ways that makes technology an important part of a business. 3. *The importance of knowledge and ideas.* The success of modern businesses rests so often on the knowledge used for innovation of products; therefore, this knowledge has to be carefully managed. This would mean a careful management to the company's knowledge workers. 4. *Collaboration across organizational 'boundaries'.* The effective cooperation of the people in the different parts of the organization are given great emphasis of modern businesses. - Good managers know that, along with change, competition is constant in the business world and that there is a constant struggle to survive and get ahead. **These are some of the sources of competitive advantage of a business:** 1. *Innovation.* The introduction of new goods and services. 2. *Quality.* The excellence of your product (goods or services). 3. *Service.* The speed and dependability with which an organization delivers what customers want. 4. *Speed.* Fast and timely execution, response, and delivery of results. 5. *Cost competitiveness.* Keeping costs low to achieve profits and be able to offer prices that are attractive to consumers. 6. *Sustainability.* The effort to minimize the use of resources, especially those that are polluting and nonrenewable. - It is recommended that managers do not just focus on one aspect of performance. One may be interested in one more than the others, yet it is a must to strive to be better at all six. **Additional points to remember:** - There is always room for everyone to improve. Managers can improve in their ways through attending trainings and indulging in activities which can enhance their managerial abilities. - The role of management is to mobilize productive resources and utilize these for the efficient production of goods and services*.* *(Medina, 2010)* - Peter Drucker states that the three jobs of management are *to manage business, to manage managers*, and *to manage workers and work.* How to forge a successful and gratifying career? 1. *Be both a specialist and a generalist.* One has to be an expert at something, yet know enough about a variety of business disciplines to be able to think and work with different perspectives. 2. *Be self-reliant.* One has to take full responsibility for oneself, his actions and his career and find new ways to make overall performance better. 3. *Be connected.* One has to have many good working relationships and interpersonal contacts, and be able to work well with teams and have strong interpersonal skills. 4. *Actively manage your relationship with your organization.* Instead of doing what one is told, one has to think of how he can contribute for the benefit of the organization and acting accordingly. 5. *Survive and thrive.* Successful executives share some common practices: - They ask "What needs to be done?" rather than "What do I want to do?" - They write an action plan. They don't just think, they do, based on a sound, ethical plan. - They take responsibility for decisions. This requires checking up, revisiting, and changing if necessary. - They focus on opportunities rather than problems. Problems have to be solved, and problem solving prevents more damage. But exploiting opportunities is what creates great results. ***Assessment time!*** As Jofe Codo drove to work, he smiled, recalling the meeting at the end of the previous day. Inez Rodriguez, the owner of the company where he worked, USA Hospital Supply, had summoned him to her office, where she warmly shook his hand and exclaimed, "Congratulations!" As they settled into chairs, Inez reviewed the conversation she'd had with the company's board of directors that morning: USA Hospital had been growing steadily for the past 10 years despite the economy's ups and downs. As the company's founder, Inez had always been an insightful and enthusiastic leader of the five-person sales team, but the level of activity was becoming too much of a distraction. Inez needed to think about the long-range vision of the company, so she needed a leader who could focus on sales. She had interviewed several candidates outside the firm, as well as Jofe and two of the other sales representatives. In the end, Inez told Jofe, the choice was obvious: Jofe was far and away the best sales rep on the team, he had extensive knowledge of the company's product mix, and if anyone could help the sales team achieve its goals, it was Jofe. She offered him the job as the company's first sales manager. He eagerly accepted. When he left work that evening, his head was full of ideas, and his heart was full of confidence. Now Jofe pulled into the office park where USA Hospital Supply was located and easily found a parking space in the lot outside the one-story office and warehouse facility. As usual, he was one of the first employees to arrive. By habit, he strode toward his cubicle, but after a second, he recalled that Inez had arranged for the small firm's accountant and computer systems manager to share an office so he could have an office of his own. Jofe entered his new domain and settled into the swivel chair behind his desk. At that instant, the eagerness to enjoy his new status and responsibility began to give way to nervousness. Jofe realized that although he knew a lot about selling supplies to hospitals and doctor's offices, he had never given much thought to managing. Obviously, he mused, his job was to see that his department met or exceeded its sales targets. But how? Jofe booted up his computer and then opened his e-mail and his word-processing software, intending to get some ideas into writing. He typed out a list of the four other sales reps: Bernie, July, Ariel, and Jayson. Bernie handled the large corporate accounts. Ariel covered the East Coast, Jayson called on accounts in the South, and July handled the Midwest. Until today, Jofe had been building a fast-growing territory west of the Mississippi. Now who was going to do that? Jofe was tempted to keep that work for himself; he knew he could build a base of loyal clients better than anyone else. Still, he wondered if he could excel as a manager and as a sales rep at the same time. While he was pondering that challenge, Bernie walked past the office door and, without stopping, politely called, "Congratulations!" through the doorway. Jofe's heart sank as he realized that Bernie has also wanted this job. They had always enjoyed a friendly rivalry as talented salespeople; now what would happen to the fun of being team members? It was easier to think about the other representatives at the moment. Jofe scanned his e-mail inbox and saw status reports from Jayson and Ariel, both of them out of the office to call on clients. What about July? Jofe wasn't quite sure he remembered her plans for this week. Obviously he needed to catch up on what everyone was doing, and that gave him a new idea. He could build on his strengths by travelling with each of the sales reps and coaching them. That way, he could show them all his proven methods for closing a sale, and they could learn to sell as well as he did. Jofe thought, "That's what a good manager does: shows employees how to do the job right. "He was starting to feel less nervous as he began to compose an e-mail to July. Questions: 1. How will Jofe's approach to quality and service affect his company's performance? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 2. Which of the basic functions of management has Jofe's considered? How well is he preparing to carry out these functions? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. 3. Which management skills does Jofe have? In what areas do you think he has the greatest need to develop skills? How can he actively manage his development as a manager? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. **LESSON 2:** THE DEVELOPMENT OF MANAGEMENT THEORY 1. recognized the contributions of each theory of management to the modern concept of management; and 2. related these theories to contemporary concepts of management. #### Keywords  **Lesson II. The Development of Management Theory** Other names for theory are principle, model or law. Theories were developed towards effective management and productivity. **CLASSICAL APPROACHES** 1. *Systematic Management.* This approach attempted to build specific procedures and processes into operations to ensure coordination and effort *(Bateman, Snell, 2013)*. - This approach gave emphasis to economical operations, adequate staffing, maintenance of inventories to meet consumer demand, and organizational control. - The above-mentioned goals were achieved through the following: - careful definition of duties and responsibilities; - standardized techniques for performing these duties; - specific means of gathering, handling, transmitting, and analyzing information; and - cost accounting, wage, and production control systems to facilitate internal coordination and communications. ***An Early Labor Contract*** +-----------------------------------------------------------------------+ | *The following rules, taken from the records of Cocheco Company, were | | typical of labor contract provisions in the 1850s.* | +=======================================================================+ | 1. *The hours of work shall be from sunrise to sunset, from the | | 21^st^ of March to the 20^th^ of September inclusively; and from | | sunrise until eight o'clock, p.m., during the remainder of the | | year. One hour shall be allowed for dinner, and half an hour for | | breakfast during the first mentioned six months; and one hour for | | dinner during the other half of the year; on Saturdays, the mill | | shall be stopped one hour before sunset, for the purpose of | | cleaning the machinery.* | +-----------------------------------------------------------------------+ | 2. *Every hand coming to work a quarter of an hour after the mill | | has been started shall be docked a quarter of a day; and every | | hand absenting him or herself, without absolute necessity, shall | | be docked in a sum double the amount of the wages such hand shall | | have earned during the time of such absence. No more than one | | hand is allowed to leave any one of the rooms at the same | | time---a quarter of a day shall be deducted for every breach of | | this rule.* | +-----------------------------------------------------------------------+ | 3. *No smoking or spirituous liquors shall be allowed in the factory | | under any pretense whatsoever. It is also forbidden to carry into | | the factory, nuts, fruits, etc. books, or papers during the hours | | of work.* | +-----------------------------------------------------------------------+ *2. Scientific Management.* This approach advocated the application of scientific methods to analyze work and to determine how to complete production tasks efficiently *(Bateman, Snell, 2013)*. *Historical background:* - The Industrial Revolution, which started in England, stirred the growth of factories. - During this time, the government adopted the laissez faire policy, a policy stating that the government should not interfere with businesses. This resulted to the exploitation of workers, suppliers and consumers by the capitalists. - It was Robert Owen who initiated several reforms because he believed that production and profit would increase if the conditions of the workers were improved. Robert Owen was a worker at a cotton factory and was one of those who experienced the abuses of businessmen. He worked his way up and was able to own a business. When he was already the boss, he initiated several reforms. - Some of the reforms which Owen initiated are: reduction of working hours to 10.5; sent children to school instead of letting them work; built housing units for his workers; opened company stores which sold goods at a lower price and even sponsored community beautification projects. - The reforms of Owen became the forerunners of scientific management theory. a. Frederick Taylor (1856-1915). A young engineer hired by Midvale Steeel Company in 1878. He is known as the Father of Scientific management. Some of his contributions are the following. - Principles of Scientific management: - Management should develop a precise, scientific approach for each element of one's work to replace general guidelines. - Management should scientifically select, train, teach, and develop each worker so that the right person has the right job. - Management should cooperate with workers to ensure that jobs match plans and principles. - Management should ensure an appropriate division of work and responsibility between managers and workers. - Time-and-motion study. This is a method done to improve the productivity of workers wherein the tasks is broken down into small and simple steps and these steps are examined to eliminate redundant or wasteful motion. *(Bateman, Snell, 2013)* This is an application of the studies of Taylor and the couple Frank Gilbreth and Dr. Lilian Gilbreth. - Differential rate system. This is a system based on piece-rate where the more productive a worker is, the more he is paid. - Rest periods during the workday - The methods of Taylor proved successful in terms of higher pay and productivity. The drawback is that poor performers are laid off. b. Henry Gantt (1861-1919) - 50-cent bonus a day to the workers who finished their daily workload - Bonus to supervisors whose workers achieved the daily standard - Charting system for production scheduling (Gantt Chart) - Rating an employee's work publicly c. Frank and Lilian Gilbreth (1863-1924 and 1878-1972) - Study on fatigue and motion 3\. Administrative Management. This approach argues that management was a profession and could be taught. a. Henri Fayol (1841-1925). A French mining engineer and executive. He is known as the Father of the Classical School. - He believed that management can be learned. - Classified business operations into six activities: technical, commercial, financial, security, accounting, and management. - Developed the 14 basic principles of management: division of labor, authority, discipline, unity of command, unity of direction, subordination of individual interests to general interests, remuneration of personnel, centralization, scalar chain, order, equity, stability of tenure, initiative, and esprit de corps. b. Chester Barnard. Former president of New Jersey Bell Telephone Company who published his landmark book *The Functions of the Executive* in 1938. - According to Barnard, the role of the executives are: formulate the purpose of the organization, hire key individuals, and maintain organizational communication. c. Mary Parker Follett. Published a book in 1942 *Dynamic Organization*. - Through her book, she extended Barnard's work by emphasizing the continually changing situations that managers face. Her key contributions are: the notion that managers desire flexibility and the differences between motivating groups and individuals and laying the groundwork for the modern contingency approach 4\. Human Relations (1930s). This approach aimed at understanding how psychological and social processes interact with the work situation to influence performance. - Elton Mayo and his associates from Harvard conducted the Hawthorne experiments and concluded that financial incentives did not improve productivity instead workers would work harder if management was concerned about their welfare, and if supervisors give them special attention. This became known as the Hawthorne effect. - The group further concluded that informal groups like associations and friendships had the strongest influence on productivity. a. Behavioral science approach - During this time, researchers were trained better and used more sophisticated research methods and they were known as behavioral scientists. - Their common views were focused on understanding the work behaviors of people and how to motivate them towards efficiency. 5\. Bureaucracy (Max Weber (1864-1920)) - Developed the theory of bureaucratic management which provided strictly defined hierarchy with specific lines of authority. *(Medina,2010)* - Believed in technical competence and in performing evaluation based on merit. - Weber advocated that the jobs themselves be standardized so that personnel changes would not disrupt the organization. - With bureaucracy, the organization will realize efficiency and success by following the rules in a routine and unbiased manner. **CONTEMPORARY APPROACHES** These have developed at various times after the World War II and represent the foundation of modern management thought. 1. Quantitative Management - Quantitative or mathematical approaches were applied to solve management problems. - It used statistical analysis, linear programming, production scheduling techniques and financial analysis. Other techniques include: queuing theory, simulation, forecasting, inventory modeling, and break-even analysis, among others. These techniques are used as tools for decision making. 2. Organizational behavior - This has emerged due to the realization that worker productivity and organizational success are not merely based on the satisfaction of economic and social needs. 3. Systems theory - A theory stating that an organization is a managed system that turns inputs into outputs. - This also emphasizes that an organization is one system in a series of subsystems. 4. Contingency Perspective - States that various factors may affect the performance of the organization and thus there is no "one best way" to manage and organize because circumstances vary. - The mentioned circumstances may include: those in the external environment; the internal and external strengths of the organization; the values, goals, skills and attitudes of the workforce; and the types of tasks, resources and technologies used by the organization. ***Assessment time!*** Case 2 Instruction: Think of yourself as a manager of a certain business organization. How will you manage your employees in the business using each approach of management to make them more productive? Write your answers in the table provided below. MANAGEMENT APPROACHES ----------------------------- ---------------------------------------------------------- CLASSICAL **What will I do to make my employees more productive?** *Systematic Management* *Scientific Management* *Administrative Management* *Human Relations* CONTEMPORARY **What will I do to make my employees more productive?** *Quantitative Management* *Organizational Behavior* *Systems Theory* *Contingency Perspective* - Good managers know that, along with change, competition is constant in the business world and that there is a constant struggle to survive and get ahead. - It is recommended that managers do not just focus on one aspect of performance. One may be interested in one more than the others, yet it is a must to strive to be better at all six. - There is always room for everyone to improve. Managers can improve in their ways through attending trainings and indulging in activities which can enhance their managerial abilities. **\ ** **LESSON 1:** The role of communication in management  At the end of the unit, the students must have: 1. explained how communication becomes effective and identified factors that hinder effective communication; and 2. given details about organizational communication and what to do to make it effective. #### Keywords  Other definitions of communication: - According to John Kotter, communication is the process consisting of a sender who transmits a message through media to a receiver who responds. - Communication is an exchange and comprehension of information. ***Types of Communication*** 1. *Non-verbal* This type uses symbols and gestures to convey information. 2. *Verbal* This type uses words to convey information. This may be in the form of: a. Oral b. Written c. Oral and written ***Importance of Communication*** It cannot be denied that communication is indeed important in all aspects of life. Yet, we shall focus on its importance in the field of business. Here are some of the reasons why communication is very important in business: 1. Managers need complete and correct information in order to perform their functions efficiently and effectively. 2. Wrong information could result to wrong decisions. 3. The manager's success in dealing with customers, suppliers and bankers greatly depends on their ability to communicate. ***Responsibilities of the Sender*** The sender is the source of information. The following are the things he needs to do for communication to be effective: 1. ***Knowing the purpose of communicating.*** The how of communicating depends on why the message has to be conveyed (e.g. to inform, to persuade, to confirm, etc.) 2. ***Knowing the receiver.*** The sender must speak in the language that the receiver will understand. 3. ***Choosing the appropriate medium.*** The medium to be used will depend on the content of the message, location and time of sending the message. 4. ***Selecting the proper time of communicating.*** The time chosen to convey the message has to be conducive to the mental and physical condition of the receiver. ***Responsibilities of the Receiver*** The receiver is the one to whom the message is conveyed. The following are the things he needs to do for communication to be effective: 1. Listen to the sender or concentrate on the message. 2. Respect and understand the sender. 3. Suggest the proper medium. 4. React to the message. ***Barriers to Effective Communication*** Barriers are hindrances that may result to ineffective communication. These are the following: 1. *Individual variations in perception.* Each one of us has differing discernment or understanding about something. It may be that the receiver has a different view about the message being conveyed which contrasts with what the sender is trying to express. 2. *Differences in language* Language does not only mean the dialect being used but also the kind words used in conveying the message may vary. 3. *Presence of noise* Noise can be the reason why the message is not effectively put across since the receiver may not hear the message or may be unable to concentrate. 4. *Emotional reactions* Extreme happiness, sadness, excitement or anger may obstruct concentration. 5. *Verbal communication inconsistent with non-verbal communication* When what is said is different with what is being shown, the message becomes confusing. 6. *Credibility of the sender* The receiver may find it difficult to believe the sender due to his tarnished reputation. ***Factors in Organizational Communication*** (Raymond Lasikar) The following are factors that influence communication in organization: 1. *Formal channels of communication* Information in the organization do not just reach to its target audience right away because it still has to pass formal channels (e.g. from top executives to managers to supervisors then to the rank-and file employees). 2. *Authority structure* Because of status and power differences, employees may feel intimidated to talk to their superiors and thus withhold grudges and even problems encountered in the job. 3. *Job specification* Employees belonging to the same level feel free to communicate among themselves and thus information is passed on smoothly. 4. *Information ownership* Some employees or organization members may withhold information for their own benefit and personal interest. ***Types of Organizational Communication*** Communication in a business organization may take the following forms: 1. *Vertical communication.* This form may be upward or downward type of communication. A *downward* type of communication has the purpose of informing, instructing, directing, advising and evaluating subordinates. An *upward* type of communication has the purpose of providing information to higher management regarding activities, conditions and problems. 2. *Lateral communication.* This form takes place between and among departments in an organization. This is the informal type. ***Ten Commandments of Good Communication*** (American Management, Inc.) The following are designed to improve the skills of managers in communicating with their superiors, subordinates, and associates. 1. Make your ideas clear before communicating. 2. Study the true purpose of each communication. 3. Consider the total physical and human setting whenever you communicate. 4. Plan your communication with the help of an expert. 5. Be aware of your voice, expression, choice of words, content of your message, among others, while you communicate. 6. Convey something of value or immediate benefit to the receiver. 7. Encourage the receiver to express his reactions. 8. Your communication should be consistent with long-range interests and goals. 9. Support your communication with actions; that is, do what you say. 10. Be a good listener. ***Assessment time!*** **Case 1** *Read and understand the case very carefully and answer the questions that follow.* **THE PRESIDENT AND THE PERSONNEL MANAGER** Molecular Membranes is a small high-tech firm owned by its president, Ross Reyes, and his family. It manufactures delicate osmotic membranes that perform crucial functions in sophisticated sensing instruments. The personnel manager, Anita Weiss, was, at the time of this case, the only woman holding a supervisory or managerial position in the company. She had been with the business since its founding and she and her husband had been close friends of Reyes and his wife for many years. However, for about the last two years, Weiss and Reyes had found themselves drifting apart. Their socializing off the job had virtually ended and job-related conferences between the two of them---formerly a frequent occurrence---had become a rare event. This state of affairs began when Reyes, after prolonged soul-searching and study of contemporary management literature, had decided to effect a drastic change in management philosophy. With the active intervention of an academic counselor, the president had made strenuous efforts to convert the company from a paternalistic to a participative management style, extending to all levels of supervisors and employees. A central device for inducing this change was a program of high-level management conferences. These meetings, conducted by Reyes with the academic consultant always present as a dominant contributor, were both frequent and lengthy. The basic theme was an effort to apply McGregor's famous Theory Y view of management. During all this time, Weiss felt more and more alienated, in fact almost isolated, from the president and the other managers. No longer was Reyes available for the cozy and frank conversations the two of them had enjoyed for years. On many occasions, Weiss felt like an outsider at management meetings. The other participants would spring "surprises" upon her and (allegedly) put her down as an old fogy ignorant of the latest management thinking. At the same time, however, it was her obligation as personnel manager to administer the old policies, since they were still incorporated in the company "bible"---the employees' manual. In short, Weiss perceived herself as occupying an impossible role, caught between conflicting demands and subjected to confusing or contradictory messages from the president. At the joint request of Reyes and Weiss, and with the consent of the academic consultant, a specialist in organizational communication was brought in to assist them in finding ways to reestablish "open" communication. One important technique introduced by the specialist was having them exchange detailed written documents setting forth with complete honesty their perceptions of all the factors leading up to the present difficulty. In these documents, explained the specialist, brutal honesty was essential. The "criss-cross" comparison of perceptions was, understandably" a nerve-racking experience for both Weiss and Reyes. On the next page are excerpts from Weiss' statement. Keep in mind that these represent only her perceptions; those of Reyes were different. *During the time when we've both been working toward a participatory method of management, we have been saddled with an authoritarian Policy Manual---one that dictates that the Personnel Manager has many requirements and responsibilities---in conflict with participatory management. A manual that I have had to administer until it can be replaced. This has created credibility for me.* *Since I was administering things, and still making a lot of authoritarian decisions as decreed by the Policy Manual, I was perceived as "inflexible." It's been a long and difficult experience for me, with no recognized structure for determining who makes which inputs.* *Perhaps I was wrong in declining the opportunity to attend those meetings with you... But at the time I was trying to be sensitive to your efforts to establish a new role of leadership for yourself.* *Uncertainty and ambiguity concerning my role were a problem for me. Sometimes I was only a sounding board, but at other times I was providing the inputs and making specific recommendations. I felt that the resolution of top-level people-relations problems were beyond my expertise... How do I keep communication lines "open" without becoming a gossip in the middle (right now I'm the one both sides are talking to)?* *I resented having my research, my ideas... filtered through someone else to you, when I used to work directly with you before. I now perceive conflict in almost every aspect of those working relationships---generated, no doubt, by the total system as much as by any individuals.* *Source: From The Corporate Manager's Guide to Better Communicating by W. Charles Redding.* Questions: 1. Why had communication broken down between Weiss and Reyes? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 2. How could Reyes have prevented problems with Weiss? How could Weiss have better adapted to the new managerial climate? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 3. How might the written documents overcome the barriers to communication between them? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 4. Has Weiss' credibility been irretrievably damaged? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 5. What do you think is the ultimate solution to this communication problem? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **LESSON 2:** Social responsibility of management 1. discussed how social responsibility evolved through time; 2. formulated reasonable arguments as to the importance of social responsibility; and 3. appreciated the impact of social responsibility to the community and to the country as a whole. #### Keywords  1. How communication does become effective? 2. What are the factors that hinder effective communication **Let's Learn!** There are three views of the concept of social responsibility according to Medina (2010). These are the following: 1. *Classical view.* 2. *Managerial view.* 3. *Public view.* ***Historical Background*** Among the ancient Greeks and Romans, businessmen were next to slaves in social status. Money making and money lending were greatly despised. Among the critics of business are the following: - *Plato.* He recommended that business activities should be prohibited. - *Upper classes of society.* - *Aristotle.* He considered craftsmen or traders as devoid of nobility and hostile to the perfection of character. - *Catholic Church.* The church branded the profit motive of businesses as anti-Christian. A leader of the church scholars in the person of *St. Thomas Aquinas* introduced the concept of compensatory justice. This concept states that it is reasonable that businesses get profit out of their business dealings since they have labored and worked for the goods and services that they offer to the public. It is just like working and getting compensation for the work done. This concept led to the time when businesses became popular. *[Business became Popular]* The age of *mercantilism* took over as evidenced by galleon trade and production and marketing of tobacco monopolized by the Spanish government. - The doctrines of John Calvin glorified the thrifty and industrious businessman - The book of Max Weber, Protestant Ethics and Spirit of Capitalism, encouraged thrift, industry and materialism. It is during these times that the concept of social responsibility started to grow. This is evidenced by the following: - England's "harmony of interest theory", states that a business should act in accordance with the national interest. - Businessmen who performed outstanding public services were granted special privileges while those who did not were fined or punished. However, the concept of social responsibility under mercantilism and that of the medieval period had its own flaw. - One flaw is that it is against outsiders and foreigners. In fact, this led for a powerful nation to colonize a weaker territory (*just like what happened to the Philippines when it was colonized by the Spaniards*) and the former exploited the latter. - It is also during these times that piracy against foreign ships became very rampant. *Francis Drake*- a famous English pirate who became a hero by capturing the ships of other countries. *[Business became Powerful]* - The use of machines in production contributed to the growth of business. - Laissez faire economists and social Darwinists rejected the concept of social responsibility and argued for *absolute free enterprise* and this led to the exploitation of workers. - A person who became powerful during these times was *John Rockefeller, Sr.* He was known to have set his competitors' businesses on fire and even kill workers who go against his commands. He was also known to have bribed government officials to suppress anti-trust investigations. - Two personalities, namely Robert Owen and Karl Marx exposed and fought the abuses of the capitalists. - It was on the 1930s that social responsibility of business was revived. - The government began to be more responsible in protecting the public against the abuses of businesses. - Giant corporations also became actively involved in socio-economic programs. ***Historical Phases of Social Responsibility*** The following are the stages explaining the evolution of social responsibility before it became known to what it is now: 1. *Profit maximizing management.* - In this phase social responsibility meant that management's responsibility is to maximize profits. It is its sole purpose and goal. - Child labor became rampant, wages of workers are very low and businesses ignored unsafe working conditions. - Urban problems, unfair advertising, products which are not safe for consumers were given little or no attention at all. 2. *Trusteeship management* *(early 1900s)* - In this phase, management was considered a trustee for the stakeholders (customers, employees, suppliers, creditors, as well as the community) of the business enterprise. 3. *Quality of life management.* - In this phase, business management is expected to contribute to the improvement of the quality of life (not only economic security or abundance but also social, political, cultural and educational factors). ***Arguments for Social Responsibility*** The following are the reasons why businesses should pursue social responsibility activities: 1. *Long-run self interest* When a business organization helps in improving social conditions, it is also in the long-run benefiting its own self-interest. 2. *Public image* Good reputation and good public image attracts more customers and better employees. 3. *Viability of business* The government grants powers and privileges to a business enterprise to operate due to its economic contributions and valuable services to society. 4. *Business resources* This is based on the premise that the resources of the business (5 M's) have to be used in improving the conditions of the society. 5. *Social problems for profit* The social problems may be an avenue for the business to earn profit; like for instance, using recyclable materials in the production of goods. ***Arguments against Social Responsibility*** The following are the reasons why businesses should not pursue social responsibility activities: 1. *Profit maximization.* The main job of business managers is to maximize profits for the owners of the business enterprise. 2. *Lack of social skills.* 3. *Higher product cost.* Social programs and projects are added expenses on the part of the business and thus could result to a higher product cost. 4. *Lack of social accountability.* Businesses are not accountable to the society. ***Social Responsibility to Consumers*** According to John F. Kennedy, a business has to take into consideration the four basic rights of consumers in the conduct of its operations. These are the following: 1. The right to safety. 2. The right to be informed. 3. The right to choose. 4. The right to be heard. ***Social Responsibility to the Community*** - Business management should help make the community where it operates a better place to live for the present generation and other generations to come. ***Assessment time!*** **Case 2.** *Read and understand the case very carefully and answer the questions that follow.* In 2013, General Motors decided to invest Php 500M for a new facility in the Philippines to boost its production of Cadillacs body frames. The plant was to take 500 acres of land located in an old and historic area of the City of Manila and a portion of the site now occupied by one of a local manufacturer's soon-to-be-closed plant. Since 6,000 new jobs and the potential for better dividends and better products are attractive prospects, the city Mayor worked hard to move the project forward; Manila desperately needed jobs and the Philippines needed tax income in the face of an impoverished budget. But the people of the area, mostly elderly and those that have an inclination to history, protested. They wanted to keep the place intact and preserve the historical landmarks, including a very old church. Since the early days of its formation, the worker's union of the soon-to-closed local plant has had a reputation as being a socially responsible union. From 2009 to 2013, union membership had dropped from 150 to 125. Its income had fallen. It had just sacrificed over P1M in negotiated wages and benefits in an effort to save their jobs. Should the union support General Motors by favoring construction of the new plant? Or should it support the residents of the city? The union wrestled with these questions. The vice-president of the union finally responded, "We have the feelings about uprooting landmarks of history, but with the way things are now, we cannot afford to lose those jobs". The church faced another problem. The leader of the Archdiocese was known for his liberal views. By virtue of his own personality and priestly commitment, it could be reasonably inferred that because of the perceived needs of the poor and elderly, the Cardinal's response would be in their favor. Through a Church bulletin, the parishioners learned that an agreement had been signed on February 14, 2013, with the City of Manila. The diocese would sell the church. Reactions were initially stunned surprise---and then anger. One parishioner expressed the common revulsion when he said, "They have sold us out to the city and to General Motors". Case Questions: 1. Were General Motors, the City of Manila, the union, and the Cardinal acting socially responsible? Why do you say so? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. 2. Should the good of the larger number be used as rationale for social responsibility? Justify. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. 3. What do you think is the impact of social responsibility to the community? \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. - The sender is the source of information. He must always know the purpose of communicating, know the receiver, choose the appropriate medium and selecting the proper time of communication. - The receiver is the one to whom the message is conveyed. He must always listen to the sender or concentrate on the message, respect and understand the sender, suggest the proper medium and react to the message. - Business management should help make the community where it operates a better place to live for the present generation and other generations to come.