Organization and Management First Semester 2024-2025 PDF

ORGANIZATION AND MANAGEMENT FIRST SEMESTER PREPARED BY PRINCESS IDA F. PINEDA MODULE 1: NATURE AND CONCEPT OF MANAGEMENT DEFINITION OF MANAGEMENT Refers to the act or bringing together the work activities to achieve the organization’s goals and objectives. Basically, it means teamwor...

ORGANIZATION AND MANAGEMENT FIRST SEMESTER PREPARED BY PRINCESS IDA F. PINEDA MODULE 1: NATURE AND CONCEPT OF MANAGEMENT DEFINITION OF MANAGEMENT Refers to the act or bringing together the work activities to achieve the organization’s goals and objectives. Basically, it means teamwork. It is essentials in any organization, leader-manager must realize the important of people working harmoniously with the aim of effectively reaching the target goals of the company MANAGEMENT DEFINED BY MANAGEMENT GURU’S: "Management is a multi-purpose organ that manages business and manages managers and manages workers and work." Peter Drucker. According to Mary Parker Follet, "Management is the art of getting things done through people." Mary Parker Follet. According to Harold Koontz, “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”. CHARACTERISTICS AND NATURE OF MANAGEMENT A. MANAGEMENT IS GOAL ORIENTED: management is not an end in itself. It is a means to achieve certain goals. Management has no justification to exist without goals. Management goals are called group goals or organizational goals. The basic goal of management is to ensure efficiency and economy in the utilization of human, physical and financial resources. The success of management is measured by the extent to which the established goals are achieved. Thus, the management is purposeful. B. MANAGEMENT IS UNIVERSAL: Management is an essential element of every organized activity irrespective of the size or the type of the activity. C. MANAGEMENT IS CONTINUOUS PROCESS: The cycle of the management continues to operate as long as there is organized action for the achievement of group goals. Management is an ongoing process and is also a never-ending process. Management is dynamic and the cycle is continuous. D. MANAGEMENT IS MULTI-DISCIPLINARY: Management techniques, principles and theories are drawn from other disciplines such as engineering, anthropology, sociology and psychology. It depends on wide knowledge and practice derived from various discipline. E. MANAGEMENT IS INTANGIBLE FORCE: Management is evidenced by the results of its efforts through others. Management is unseen and invisible force. It cannot be seen, but its presence can be felt in the form of results in very type of organization. F. MANAGEMENT IS SITUATIONAL: There is no best way of doing things. To solve a particular problems conditions and situations must be taken into account. Management is a system PREPARED BY PRINCESS IDA F. PINEDA of authority: Management provides the direction of every activity of an organization. Management forms system of authority or a hierarchy of command to control the activities and give smooth direction. G. MANAGEMENT IS BOTH A SCIENCE AND AN ART: Science is a systematized body of knowledge based on certain principles that are generally applied. Scientific knowledge is observed through the process of critical and continuous observation and intelligent speculation. Accordingly, management as a science is based on principles instead of a traditional way of doing things in trial-and-error method. MANAGEMENT FUNCTIONS: 1. PLANNING – is the process that involves the setting of the organization’s goals, establishing strategies and developing plans of action. 2. ORGANIZING – demands assigning tasks, setting aside funds and bringing harmonious relations among the individuals and work group in the organization. 3. STAFFING – is the process of identifying, attracting, hiring and retaining people with the necessary qualifications to fill the responsibilities of current and future jobs in the organization. 4. LEADING – involves inspiring and influencing people in the organization to achieve a common goal. 5. CONTROLLING – ensures that the work performance of the organization’s members are aligned with the organization’s values and standards through monitoring and correcting their actions. EVOLUTION OF MANAGEMENT THEORIES: 1. PRE-SCIENTIFIC MANAGEMENT PERIOD (18TH CENTURY) FACTORY SYSTEM – land, buildings, hired labor, and capital are made available to the entrepreneur, who strives to combine these factors in the efficient achievement of a particular goal. 2. CLASSICAL THEORY a) Scientific Management Theory (1856-1915) by Frederick W. Taylor also known as the “Father of Scientific Management”. - makes use of the step by step, scientific methods for finding the single best way for doing a job. b) General Administrative Theory (19th century) by Henri Fayol (1841-1925) widely regarded as the father of modern management - Concentrates on the manager’s functions and what makes up good management practice or implementation. c) Bureaucratic Model - Max Weber (1864-1920) - systematic formation of any organization and is designed to ensure efficiency and economic effectiveness. PREPARED BY PRINCESS IDA F. PINEDA 3. NEOCLASSICAL THEORY: - gave greater emphasis to individual and group relationship in the workplace. The neoclassical theory pointed out the role of psychology and sociology in the understanding of individual and group behavior in an organization. Hawthorne Experiment (1927-1932) - brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. 4. MODERN THEORY (SYSTEM APPROACH) - considers an organization as an adaptive system which has to adjust to changes in its environment. An organization is now defined as a structured process in which individuals interact for attaining objectives. "System” - is derived from the Greek word “to bring together or to combine”. - is a set of interconnected and inter-related elements or component parts to achieve certain goals. Contingency Theory - analysis and understands these inter relationship so that managerial actions can be adjusted to demands of specific situations or circumstances. FUNCTIONS, ROLES AND SKILLS OF A MANAGER: MANAGERIAL LEVELS: 1. TOP-LEVEL MANAGERS -the general or strategic managers who focus on long-term organizational concerns and emphasize the organization’s stability, development, progress and over-all efficiency and effectiveness. 2. MIDDLE-LEVEL MANAGERS-are the tactical managers in charge of the organization’s middle levels or department. They formulate specific objectives and activities based on the strategic or general goals and objectives developed by the top-level managers. 3. FRONTLINE OR LOWER-LEVEL MANGERS- also known as operational managers and are responsible for supervising the organization’s day-to-day activities. MANAGERIAL SKILLS: 1. CONCEPTUAL SKILLS - enables a person to thinks of positive solutions to complex problems, has the ability to visualize abstract situations and develop a holistic view of their organization. 2. HUMAN SKILLS - enable managers to relate well with people, communicate, inspire and motivates an individual or work group. PREPARED BY PRINCESS IDA F. PINEDA  3. TECHNICAL SKILLS - are important for managers for them to perform their task with proficiency with the use of expertise and employs varied techniques and tools to be able to yield good quality products and services for their company. MODULE 2: ENVIRONMENTAL FORCES AND ENVIRONMENTAL SCANNING BUSINESS ENVIRONMENT - refers to the factors or elements affecting a business organization. Environmental Forces and Environmental Scanning The environment in which a business operates is a major consideration in determining an organization’s design structure. Considerations such as uncertainty, procurement, and competition are linked with the external environment. A company’s strategy and approach to operations must also be aligned with the limitations of its external environment. Definition of Terms: 1. Environmental scanning - means seeking for and sorting through data about the environment 2. External business environment - refers to the factors/elements outside the organization which may affect, either positively or negatively, the performance of the organization. 3. Internal business environment - refers to the factors/elements within the organization which may affect, either positively or negatively, the performance of the organization. 4. Micro-environment - includes those players whose decisions and actions have a direct impact on the company. Production and selling of commodities are the two important aspects of modern business. 5. Macro-environment - includes trends in the gross domestic product (GDP, inflation, employment, spending, and monetary and fiscal policy. The various constituents of micro-environment are as under: 1. SUPPLIERS OF INPUTS: An important factor in the external micro-environment of a firm is the supplier of its inputs such as raw materials and components. Normally, most firms do not depend on a single supplier of inputs. To reduce risk and uncertainty business firms prefer to keep multiple suppliers of inputs. 2. CUSTOMERS: The people who buy and use a firm’s product and services are an important part of external micro-environment. Since sales of a product or service is critical for a firm's PREPARED BY PRINCESS IDA F. PINEDA survival and growth, it is necessary to keep the customers satisfied. A concern for customers’ satisfaction is essential for the success of a business firms. Besides, a business firm has to compete with rival firms to attract customers and thereby increase the demand and market for its product. 3. MARKETING INTERMEDIARIES: In the firm's external micro-environment, marketing intermediaries play an essential role of selling and distributing its products to the final customers. Marketing provides an important link between a business firm and its ultimate customers. 4. COMPETITORS: Different firms in an industry compete for sale of their products. This competition may be based on pricing of their products and non- price competition through competitive advertising such as sponsoring some events to promote the sale of different varieties and models of their products. 5. PUBLICS: Finally, publics are an important force in external microenvironment. Environmentalists, media groups, women’s associations, consumer protection groups, local groups, Citizens Association are some important examples of publics which have an important bearing on the business decisions of the firm. The existence of various types of publics influences the working of business firms and compels them to be socially responsible EXTERNAL MACRO ENVIRONMENT Apart from micro-environment, business firms face large external environmental forces. An important fact about external macro environmental forces is that they are uncontrollable by the management. Because of the uncontrollable nature of macro forces a firm must adjust or adapt it to these external forces. These factors are: 1. Economic Environment - includes all those forces which have an economic impact on business. Accordingly, total economic environment consists of agriculture, industrial production, infrastructure, and planning, basic economic philosophy, stages of economic development, trade cycles, national income, per capita income, savings, money supply, price level and population. 2. Political-legal Environment - includes the activities of three political institutions, namely, legislature, executive and judiciary which usually play a useful role in shaping, directing, developing and controlling business activities. 3. Technological Environment: Technological environment is exercising considerable influence on business. Technology implies systematic application of scientific or other organized knowledge to practical tasks or activities. Business makes it possible for technology to reach the people in proper format. 4. Global or International Environment: Global environment plays an important role in shaping business activity. With the liberalization and globalization of the economy, business environment of an economy has become totally different wherein it has to bear all shocks and benefits arising out of global environment. PREPARED BY PRINCESS IDA F. PINEDA  5. Socio-cultural Environment - include people’s attitude to work and wealth, ethical issues, role of family, marriage, religion and education and also social responsiveness of business. 6. Demographic Environment - includes the size and growth of population, life expectancy of the people, rural-urban distribution of population, the technological skills and educational levels of labor force. 7. Natural Environment - is the ultimate source of many inputs such as raw materials and energy, which firms use in their productive activity. The natural environment which includes geographical and ecological factors such as minerals and oil reserves, water and forest resources, weather and climatic conditions are all highly significant for various business activities. 8. Ecological Environment - laws have been passed for conservation of natural resources and prevention of environment pollution. These laws have imposed additional responsibilities and costs for business firms. A SWOT ANALYSIS is a technique used to determine and define your Strengths, Weaknesses, Opportunities, and Threats (SWOT). SWOT analyses can be applied to an entire company or organization, or individual projects within a single department. Most commonly, SWOT analyses are used at the organizational level to determine how closely a business is aligned with its growth trajectories and success benchmarks, but they can also be used to ascertain how well a particular project – such as an online advertising campaign – is performing according to initial projections. PORTER’S FIVE FORCES ANALYSIS is a framework that helps analyzing the level of competition within a certain industry. It is especially useful when starting a new business or when entering a new industry sector. According to this framework, competitiveness does not only come from competitors. Rather, the state of competition in an industry depends on five basic forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and existing industry rivalry. A PESTEL ANALYSIS OR PESTLE ANALYSIS (FORMERLY KNOWN AS PEST ANALYSIS) is a framework or tool used to analyses and monitor the macro-environmental factors that may have a profound impact on an organization’s performance. This tool is especially useful when starting a new business or entering a foreign market. It is often used in collaboration with other analytical business tools such as the SWOT analysis and Porter’s Five Forces to give a clear understanding of a situation and related internal and external factors. PESTEL is an acronym that stands for Political, Economic, Social, Technological, Environmental and Legal factors. Definition of Terms: Competitive mindset - is the ability to adapt to environmental uncertainties, understand and predict the various changes, opportunities and threats that may affect the organizations in the future. Business prediction, also known as business forecasting, is a method of predicting how variables in the environment will alter the future of business. It could be used in making decisions regarding offshoring, branching out locally, and expanding or downsizing the company. PREPARED BY PRINCESS IDA F. PINEDA Benchmarking is defined as the process of measuring or comparing one’s own products, services, and practices with those of the recognized industry leaders in order to identify areas for improvement. Best practices of said industry leaders are observed so that understanding their competitive advantage would be easier. MODULE 3 FORMS AND ECONOMIC ROLES OF BUSINESS ORGANIZATION A. PARTNERSHIP - consists of two or more persons who bind themselves to contribute money or industry to a common fund, with the intention of dividing the profits among themselves. ADVANTAGES: Partnerships are relatively easy to establish; however, time should be invested in developing the partnership agreement. With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners’ personal tax return. Prospective employees may be attracted to the business if given the incentive to become a partner. The business usually will benefit from partners who have complementary skills. DISADVANTAGES Partners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns. The partnership may have a limited life; it may end upon the withdrawal or death of a partner. TYPES OF PARTNERSHIPS: 1. GENERAL PARTNERSHIP - partners divide responsibility for management and liability, as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently. 2. LIMITED PARTNERSHIP AND PARTNERSHIP WITH LIMITED LIABILITY “LIMITED” means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decision, which generally encourages investors for short term projects, or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership. PREPARED BY PRINCESS IDA F. PINEDA 3. JOINT VENTURE Acts like a general partnership but is clearly for a limited period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such and distribute accumulated partnership assets upon dissolution of the entity. B. SOLE PROPRIETORSHIP - is the simplest form of business and the easiest to register and is owned by an individual who has full control/authority of its own and owns all the assets, as well as personally answers all liabilities or losses. ADVANTAGES Easiest and least expensive form of ownership to organize. Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit. Profits from the business flow-through directly to the owner’s personal tax return. The business is easy to dissolve, if desired. DISADVANTAGES Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk. May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans. May have a hard time attracting high-caliber employees, or those that are motivated by the opportunity to own a part of the business. Some employee benefits such as medical insurance premiums are not directly deductible from business income (only partially as an adjustment to income). C. SOLE CORPORATION - A mixture of the features of a sole proprietorship and a corporation is found in a new entity authorized under the Revised Corporation Code — the One Person Corporation. An OPC is registered in the same manner as other corporations with the SEC, except that it is composed of only one person, just like a sole proprietorship. D. CORPORATION - is a juridical entity established under the Corporation Code and registered with the SEC. It must be created by or composed of at least 5 natural persons up to a maximum of 15, technically called “incorporators” ADVANTAGES Shareholders have limited liability for the corporation’s debts or judgments against the corporation. Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes. Corporations can raise additional funds through the sale of stock. A Corporation may deduct the cost of benefits it provides to officers and employees. PREPARED BY PRINCESS IDA F. PINEDA  Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership. DISADVANTAGES The process of incorporation requires more time and money than other forms of organization. Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations. Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income; thus, this income can be taxed twice. E. COOPERATIVE - is an organization established for the purpose of purchasing and marketing the products of its members, i.e., shareholders, and/or procuring supplies for resale to the members, whose profits are distributed to the members (in the form of patronage dividends), not on the basis of the members' equity. According to REPUBLIC ACT 9520 also known as "Philippine Cooperative Code of 2008". The primary objective of every cooperative is to help improve the quality of life of its members. Towards this end, the cooperative shall aim to: a. Provide goods and services to its members to enable them to attain increased income, savings, investments, productivity, and purchasing power, and promote among themselves equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing; b. Provide optimum social and economic benefits to its members; c. Teach them efficient ways of doing things in a cooperative manner; d. Propagate cooperative practices and new ideas in business and management; e. Allow the lower income and less privileged groups to increase their ownership in the wealth of the nation; and f. Cooperate with the government, other cooperatives and people-oriented organizations to further the attainment of any of the foregoing objectives. MODULE 4: PLANNING PLANNING - is the process by which managers establish goals and define the methods by which these goals are to be attained. It requires decision making, which is choosing among alternative future courses of action. It may also be treated as a process of thinking before doing. Basic Components: PREPARED BY PRINCESS IDA F. PINEDA Goals represent an end state – the targets and results that manager hope to achieve. Action statements represent the means by which an organization goes ahead to attain its goals. DIFFERENCE BETWEEN GOALS AND PLANS Goals are the target or desired ends that the management wants to reach while plans are the action or mean that administrators/managers intend to use to achieve organizational goals. IMPORTANCE OF PLANNING 1. Provides direction 2. Reduces uncertainties 3. Maximizes usage of resources 4. Establishes goals and standard TYPES OF PLANS 1. STRATEGIC PLAN – This is a high-level overview of the entire business, its vision, objectives, and value. This plan is the foundational basis of the organization and will dictate decisions in the long-term. The scope of the plan can be two (2), three (3), five (5), or even 10 years. The strategic plan must be forward-looking, robust but flexible, with a keen focus on accommodating future growth. Components of a Strategic Plan VISION – Where does the organization want to be five years from now? How does it want to influence the world? MISSION – The mission statement is a more realistic overview of the company’s aim and ambitions. Why does the company exist? What does it aim to achieve through its existence? VALUES –These values will guide managers and influence the kind of employees you hire. 2. TACTICAL PLAN – A tactical plan answers "how do we achieve our strategic plan?" It breaks down the broader mission statements into smaller, actionable chunks. Creating tactical plans is usually handled by mid-level managers. Components of Tactical Plan: 1. SPECIFIC GOALS WITH FIXED DEADLINES: The tactical plan will break down the broad ambition into smaller, actionable goals. The goal should be highly specific and have fixed deadlines. 2. BUDGETS: This should include the budget for hiring personnel, marketing, sourcing, manufacturing, and running the day-to-day operations of the company. PREPARED BY PRINCESS IDA F. PINEDA  3. RESOURCES: The tactical plan should list all the resources you can gather to achieve the organization’s aims. This should include human resources, IP, cash resources, etc. 4. MARKETING, Funding, etc.: Finally, the tactical plan should list the organization’s immediate marketing, sourcing, funding, manufacturing, retailing, and PR strategy. 3. OPERATIONAL PLAN – This plan describes the day-to-day running of the company. - The operational plan is created to achieve the tactical goals within a realistic timeframe and the responsibility of low-level managers and supervisors. This plan is highly specific with an emphasis on short-term objectives. TYPES OF OPERATIONAL PLAN 1. SINGLE USE PLANS – These plans are created for events/activities with a single occurrence. This can be a one-time sales program, a marketing campaign, a recruitment drive, etc. Single use plans tend to be highly specific. 2. ONGOING PLANS – These plans can be used in multiple settings on an ongoing basis. POLICY – A policy is a general document that dictates how managers should approach a problem. It influences decision making at the micro level. Specific plans on hiring employees, terminating contractors, etc. are examples of policies. Example: “All servers and crews must be at least 18 years old.” “Zero tolerance” for harassment.” “Observe proper dress code.” RULES – Rules are specific regulations according to which an organization function. The rules are meant to be hard coded and should be enforced stringently. Example: “No smoking within premises”, or “Employees must report by 9 a.m.” PROCEDURE – A procedure describes a step-by-step process to accomplish a particular objective. Example: Detailed guidelines on hiring employees (screening, interview, assessment, background check, medical, decision) DEFINITION OF TERMS GOAL-SETTING - the identification of targets or desired ends that management wants to reach. VISION - a mental image of what the organization will be in the future as desired by the company management and employees. MISSION - basic purpose of an organization and range of their operations. OBJECTIVES - steps needed in order to attain desired ends. PREPARED BY PRINCESS IDA F. PINEDA MODULE 5: ORGANIZING ORGANIZING - involves assigning tasks, grouping tasks into departments, delegating authority and allocating resources across the organization. During the organizing process, mangers coordinate employees, resources, policies and procedures to facilitate the goals identified in the plan. DIVISION OF LABOR involves assigning different tasks to different people in the organization’s different work units. SPECIALIZATION is the process in which different individuals and units perform different task. It is also the reference of dividing the labor based on the skills performed by their employees. INTEGRATION is another process in the organization’s internal environment which involves the collaboration and coordination of its different work. COORDINATION refers to the procedure that connect the work activities of the different work divisions/ units of the firm in order to achieve its overall goal. Works may be divided but they must all be coordinated with each other in order to meet its overall goals or objectives An ORGANIZATION STRUCTURE is a system made up of tasks to be accomplished, work movements from one work level to other work levels in the system, reporting relationships, and communication passageways that unite the work of different individual persons and groups. The types of organizational structures include: a. vertical structure b. horizontal structure c. network structure 1. VERTICAL STRUCTURE - clears out issues related to authority rights, responsibilities, and reporting relationships. Authority rights refer to the legitimate rights of individuals, appointed in positions like president, vice president, manager, and the like, to give orders to their subordinates, who in turn, report to them what they have done. 2. HORIZONTAL STRUCTURE refers to the departmentalization of an organization into smaller work units as tasks become increasingly varied and numerous. - Horizontal organization have a flat structure that provides greater employee autonomy, which means there are very few managers and more authority is granted to rank- and-file employees. This system allows employees to feel empowered, because they can make important decisions without needing approval from a manager. PREPARED BY PRINCESS IDA F. PINEDA 3. LINE STRUCTURE - authority originates at the top and moves downward in a line. All managers perform line functions, which are functions that contribute directly to company profits. Examples of line functions include production, finance and marketing manager. Line organizations are common among small businesses. 4. LINE AND STAFF STRUCTURES In mid-sized and large companies, line manages cannot perform all of the activities they need to perform to run their departments. In these companies, other employees are hired to help line managers do their jobs. These employees perform staff functions. Staff functions advise and support line functions. Staff departments include the legal department, the human resources department and the public relations department. These departments help the line departments do their jobs. They contribute only indirectly to corporate profits. Staff people are generally specialists in one field and their authority is normally limited to making recommendations to line managers. 5. MATRIX STRUCTURE - allows employees from different departments to come together temporarily to work on special project teams. The purpose of this kind of structure is to allow companies the flexibility to respond quickly to a customer need by creating a team of people who devote all of their time to a project. Once a team completes the project, the team members return to their department or join a new project team. Designing a new aircraft uses matrix structure. 6. TEAM STRUCTURE - brings together people with different skills in order to meet with different skills in order to meet a particular objective. Teams have the authority to make their own decisions. Each team tries to determine what the customer is looking for and develop strategies with which to meet those needs. TYPES OF DEPARTMENTS: 1. LINE DEPARTMENTS – deal directly with the firm’s primary goods and services; responsible for manufacturing, selling, and providing services to clients. 2. STAFF DEPARTMENTS – support the activities of the line departments by doing research, attending to legal matters, performing public relations duties, etc. DEPARTMENTALIZATION MAY BE DONE USING THREE APPROACHES: 1. FUNCTIONAL APPROACH – where the subdivisions are formed based on specialized activities such as marketing, production, financial management, and human resources management. 2. DIVISIONAL APPROACH – where departments are formed based on management of their products, customers, or geographic areas covered. 3. MATRIX APPROACH – is a hybrid form of departmentalization where managers and staff personnel report to the superiors, the functional manager, and the divisional manager PREPARED BY PRINCESS IDA F. PINEDA TYPES OF ORGANIZATIONAL DESIGN TRADITIONAL Organizational design theories include: 1. SIMPLE - this organizational design has few departments, wide spans of control, or a big number of subordinates directly reporting to a manager; has a centralized authority figure and has very little formalization of work; usually used by companies that start out as entrepreneurial ventures. 2. FUNCTIONAL - this organizational design groups together similar or related specialties. Generally, functional departmentalization is utilized and put into practice in an entire organization. For example: A marketing firm that markets cars and related products like tires, car batteries, and accessories. 3. DIVISIONAL - this organizational design is made up of separate business divisions or units, where the parent corporation acts as overseer to coordinate and control the different divisions and provide financial and legal support services. Modern organizational design theories include: 1. TEAM DESIGN - the entire organization is made up of work groups or teams. 2. MATRIX DESIGN - refers to an organization design where specialists from different departments work on projects that are supervised by a project manager. This design results in a double chain of command wherein workers have two managers—their functional area manager and their project manager—who share authority over them. 3. BOUNDARY-LESS DESIGN - the design is not defined or limited by vertical, horizontal, and external boundaries. In other words, there are no hierarchical levels that separate employees, no departmentalization, and no boundaries that separate the organization from customers, suppliers, and other stakeholders. DELEGATION Delegation – refers to assigning a new or additional task to a subordinate it may also refer to getting work done through others by giving them the right to make decisions and take action. Elements of delegation include authority (right to set officially or legally); responsibility (state of being answerable legally / morally for the discharge of a duty, and accountability (to be liable to be called to explain). is the act of assigning tasks to team members in a department or project team or in other words, transfers of responsibility for specific tasks from one person to another. From a management perspective, delegation occurs when a manager assigns specific tasks to their employees. By delegating those tasks to team members, managers free up time to focus on higher-value activities while also keeping employees engaged with greater autonomy. PREPARED BY PRINCESS IDA F. PINEDA Douglas C. Basil: “Delegation refers to a manager's ability to share his burden with others. It consists of granting authority or the right to decision making in certain defined areas and charging subordinates with responsibility for carrying through an assigned task.” Delegation is one of the core concepts of leadership. Ideally delegation is meant to empower subordinates and give them the opportunity to explore their strengths and interests, learn and grow out into new avenues that benefits them as well as the organization. In the case of empowerment through delegation, it is expected that management and leaders measure the performance of the individual based on the milestone reports and results as well as the final reports submitted. It is hence important to ensure that simple daily tasks are delegated to individual staff whilst ensuring that they have been empowered to undertake such tasks. Here is the process on how to delegate effectively: 1. Select People for the Job Define the work based on outcomes, products, and deliverables. Break out the work into tasks or steps that will help accomplish the work. Define a realistic completion date for each task. - Identify the right people for each task. Convey enthusiasm and emphasize the importance of the project. Be positive. 2. Match the Person to the Task If forming a team to work on a project, make sure you have a mix of talents and strengths. Some will work well behind the scenes, and some want the spotlight. Some will work well with little supervision, and some will need more guidance. 3. Define Project Tasks and communicate them clearly Communicate to each team member the purpose of the project, their responsibilities, and the schedule. Give people checklists and outlines. Explain how each task is relevant to the total project. Make sure you are available to each team member to answer questions or provide guidance. 4. Track Progress, Give Feedback and Help People Solve Problems Check in periodically and ask your team about their progress so you can help ensure they are on schedule. Do they have the resources they need? 5. Allow for Creativity and Variations in Work Style Keep your focus on the final product, not the details of the job. People work according to individual learning styles. PREPARED BY PRINCESS IDA F. PINEDA  When they work in their own way they feel ownership over it. Your team may not perform tasks exactly as you do and that is ok. 6. Provide Incentives and Show Appreciation Reward good work with a raise or a bonus. Recognition at a staff meeting or in a newsletter if you have one, write them a letter, invite them to a special event, or take them to lunch. ELEMENTS OF DELEGATION There are three major elements of delegation: RESPONSIBILITY: The responsibility means, assigning the work to an individual. The managers assign certain responsibility to the subordinates for the completion of certain tasks on his behalf. An individual has to apply all his physical and mental ability to get the task completed efficiently. Here it is to be noted, that manager can only assign the responsibility, and in the case of the subordinate fouls, the manager will be answerable to his seniors. Thus, the responsibility flows upwards. AUTHORITY: To fulfill the responsibility, certain authority is delegated to the subordinate. Authority means the power to take decisions. Hence, the manager along with the responsibility also delegates authority to enable the subordinate to take decisions independently and accomplish the task efficiently. The authority must be equal to the responsibility, this means, a certain level of authority is delegated which is sufficient to complete the responsibility. The authority also flows upward, as we go up in the scalar chain, the authority increases. ACCOUNTABILITY: Accountability means, to check whether the subordinates are performing their responsibilities in an expected manner or not. Accountability cannot be delegated which means, in the case of non-completion of the task, the manager will only be held responsible for it, not the subordinates. The accountability also flows upward, i.e., subordinates will be accountable to the manager and the manager to his superior. To summarize, the delegation process involves the following elements of Delegation in management practices: Assignment of duties and responsibility Delegation of necessary abilities, They are establishing accountability for the subordinates by the supervisor. For the Delegation to be effective, the authority granted must be proportionate to the responsibility. More authority will result in abuse, and less authority will make the person ineffective in performing the assigned task. PREPARED BY PRINCESS IDA F. PINEDA IMPORTANCE OF DELEGATION Elements of Delegation in management are essential for the following reasons: 1. Delegation of authority gives managers much time to concentrate on more critical duties to the organization. Furthermore, Delegation enables a transition in routine work, which offers a feeling of freedom. 2. When a superior delegates authority to a subordinate, the subordinate gets introduced to new work, which aids in the employee’s advancement. A growth factor is involved, allowing one to learn and develop more and improve the employee’s progress. 3. When superiors delegate any function to subordinates, the subordinates feel dependable and recognized in the company. Employee morale and motivation will benefit directly as a result of this. ADVANTAGES OF DELEGATION It prevents work overload among organization managers It provides opportunities for employee or subordinates assigned to do the task to fully utilized their talents on the job It leads to empowerment of employees or subordinates assigned to do the task, as it allows them freedom to contribute ideas and to perform their job in the best possible way. It increases job satisfaction among the assigned employees or subordinates that may lead to better job performance DISADVANTAGES OF DELEGATION It may cause laziness among organization managers It may encourage too much dependence on others It may cause lack of control over priority management problems It may cause low self- confidence among managers. FORMAL ORGANIZATION A formal organization is a social system structured by clearly laid out rules, goals, and practices and that functions based on a division of labor and a clearly defined hierarchy of power. Examples in society are wide-ranging and include business and corporations, religious institutions, the judicial system, schools, and government, among others. PREPARED BY PRINCESS IDA F. PINEDA  refers to the organizational structure that is designed by the management to accomplish organizational objectives. FORMAL ORGANIZATION STRUCTURE In a formal organizational structure, the management and divisions within a company are typically written and explained so all employees understand how things work. Formal structure organizations usually have a hierarchical pyramid structure with a company president, CEO and senior managers at the top; mid-level managers in the middle; low-level managers at the bottom. Staff employees are expected to implement decisions and processes made at the levels above them, and they are not usually solicited for their opinions or ideas about how the company should operate. FEATURES OF FORMAL ORGANIZATION: 1. Clarifies Authority Relationships: It clearly explains the inter-relationship between jobs and thus, everybody knows his authority and responsibility. This clarifies who has to report to whom. 2. Means to Achieve Organizational Objectives It is a means to achieve the objectives specified in the plans. It lays down the rules & procedures essential for their achievement. 3. Coordinate Efforts of Various Departments: Efforts of various depts. are coordinated, interlinked & integrated through the formal organization. 4. Deliberately Designed by Top Management The top management deliberately creates this org for successful achievement of objectives of organization. 5. Emphasis on Work. It places more emphasis on work to be performed than inter personal relationships among employees. TYPES OF FORMAL ORGANIZATION The major types of formal organizations include those that are utilitarian, normative, and coercive. NORMATIVE ORGANIZATIONS, also called voluntary organizations, are based on shared interests. As the name suggests, joining them is voluntary. People find membership rewarding in an intangible way. They receive nonmaterial benefits. Some examples are boys and girls scout, Red Cross Youth, art club, school clubs, etc. COERCIVE ORGANIZATIONS are groups that we must be coerced, or pushed, to join. These may include prison or a rehabilitation center. Symbolic interactionist Erving Goffman states that most coercive organizations are total institutions (1961). A total institution is one in which inmates or a military soldier lives a controlled lifestyle and in which total resocialization takes place. PREPARED BY PRINCESS IDA F. PINEDA UTILITARIAN ORGANIZATIONS, which, as the name suggests, are joined because of the need for a specific material reward. High school and the workplace fall into this category—one joined in pursuit of a diploma, the other in order to make money. A formal organization is an organization with a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation. Sociologist Max Weber devised a model of formal organization known as the bureaucratic model that's based on the rationalization of activities through standards and procedures. It is one of the most applied formal organization models. In some societies and in some organizations, such rules may be strictly followed; in others, they may be little more than an empty formalism. To facilitate the accomplishment of the goals of the organization: In a formal organization, the work is delegated to each individual of the organization. He/She works towards the attainment of definite goals, which are in compliance with the goals of the organization. To facilitate the co-ordination of various activities: The authority, responsibility, and accountability of individuals in the organization are very well defined. Hence, facilitating the co-ordination of various activities of the organization very effectively. To aid the establishment of logical authority relationships: The responsibilities of the individuals in the organization are well defined. They have a definite place in the organization due to a well-defined hierarchical structure that is inherent in any formal organization. Permit the application of the concept of specialization and division of Labour. Division of work amongst individuals according to their capabilities helps in greater specializations and division of work IMPORTANCE/ ADVANTAGES OF FORMAL ORGANIZATION 1. Easy to Fix Responsibilities: Since mutual relationships are clearly defined therefore it is easy to fix responsibility of employees. 2. Avoids Duplication of Effort: In Formal organization, work is systematically divided among various departments &employees therefore there is no chance of overlapping of work. 3. Maintains Chain of Command: Formal organization clearly defines superior subordinate relationships, i.e., who reports to whom so chain of command is maintained. 4. Facilitates Achievement of Firm’s Goals: Formal organization leads to effective accomplishment of goals by providing a framework for the operations to be performed and ensuring that each employee knows the role he has to play. 5. Provides Stability to The Organization: As behavior of employees can be fairly predicted since there are specific rules to guide them. Formal organization brings stability in the organization PREPARED BY PRINCESS IDA F. PINEDA through policies, procedures & rules. Working continues in spite of old employees leaving and new employees joining. DISADVANTAGES/LIMITATIONS OF FORMAL ORGANIZATION: A) Procedural Delays Formal communication may lead to procedural delays as the established chain of command has to be followed which increases the time taken for decision-making. Work is bound by rules & while following the scalar chain of command, decisions & actions get delayed B) Rigidity/ Curbs Creativity In this organization the employees have to do what they are told to do & have no opportunity of thinking. Thus, their initiative gets slackened Poor organization practices may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down polices. C) Does not give a complete picture of how the organization works Formal organization gives importance to work only. It ignores human relationships, creativity & talent. Does not give a complete picture of how an organization works as it does not incorporate the human element so does not provide a complete picture of the functioning of the organization INFORMAL ORGANIZATION Chester Barnard stated that "an informal organization is a collection of interpersonal ties without any explicit goal, but which may contribute to shared outcomes. "According to Schein, an informal organization is one that does not have a formal structure, official leadership, a membership list, legal borders, or any tangible assets. The social fiber that unites its members under a shared identity is what makes an informal organization distinct. "A network of personal and social interactions that emerge spontaneously as people associate with one another in a work context" is one definition of the informal organization. It consists of all the unofficial organizational structures that exist within formal organizations. A horizontal group in a company is made up of employees who are on the same level. An organization that prioritizes fostering social connections is referred to as an informal organization. The major objective of the informal organization is to foster a supportive work atmosphere so that the company's objectives are successfully met. An informal organization is a collection of interpersonal connections, groups, networks, etc. Since there is a great work atmosphere and the PREPARED BY PRINCESS IDA F. PINEDA employees receive incentives, promotions, etc., the employees are kept engaged. Clubs and social networks are two prominent examples of informal organizations. The purpose of an informal organization is to foster cooperation and harmony among its members. Vertical organization, horizontal organization, and mixed organization are the three main types of informal organization. FEATURES OF INFORMAL ORGANIZATION: 1. Aim/objective - Informal organization emerges to meet the social and psychological needs of the people 2. Norms of Behavior - In informal organization there are no written rules & procedures to govern inter relationships. But there are group norms to be observed. - E.g., employees working in an org. and belonging to a particular community form a separate group in an informal way and gradually some norms emerge and all the members are bound to observe them. 3. Flow of Communication - In informal organization Information or communication flows in all directions and it is very difficult to trace the source of information. 4. Formation - An Informal organization is not deliberately created by management but comes into existence on the basis of personal interaction, relationships, common interest, tastes, languages, likes etc. 5. Structure or Form - It is a complex network of social relationships and it cannot be defined so it is not rigid but flexible. Example: Employee at the lowest level can have relationship at the top level. FUNCTIONS OF INFORMAL ORGANIZATION Because the lines of communication are not clearly established, information is shared fast across groups and individuals. Feedback is given promptly. The fulfillment of members' social requirements results in job satisfaction and stability within the organization. An organization's formal design cannot accommodate the different needs of its members due to the organization's formal structure. They give the participants a chance to develop their status and social connections and help them get over identity difficulties. Additionally, it offers a group of people to talk to and interact with. The informal group serves a number of crucial purposes, including giving its members a place to make friends and have social interactions. Second, the informal groups and interpersonal connections help workers feel more connected to and informed about what is happening within their company, providing them a sense of control over their working environment. Third, personnel may receive prestige and recognition from the informal organization that they cannot or will not receive from the formal organization. Fourth, the network of connections can help new hires socialize by passing along unofficially rules, responsibilities, fundamental goals, and job expectations. The organizational grapevine also contributes to employee awareness of workplace events by disseminating information fast and to locations where the formal system cannot. PREPARED BY PRINCESS IDA F. PINEDA TYPES OF INFORMAL ORGANIZATION A horizontal group is made up of employees at the same level in an organization. The vertical group includes employees who are employed at various levels of an organization. Those involved in a Mixed Group come from many departments and levels. A horizontal organizational structure has a minimal number of management layers. In a flat organizational structure, managers have more direct reports and typically have a shorter chain of command. With executives at the top, intermediate managers in the center, and low-level managers and employees at the bottom, vertical organizations are commonly used by companies with a high number of people. Some employees report to at least two managers in a matrix organizational structure, often known as a mixed model. Functional managers are in charge of groups like engineering and marketing, whereas project managers are in charge of personnel working on particular initiatives. They occupy the same level position within the company. The members of this club are encouraged to help one another and exchange knowledge. There are instances when a portion of this group shares the same issues, worries, or passions. They find solutions to issues independent of their superiors or their boss. People who work in various departments yet hold the same position, such as a manager in the finance department and a manager in the sales department, are an example of this. They hold various jobs inside the company. The highest-ranking employee is an illustration of this; they can create a group with their superiors. first-level workers to team captains. Communication is simpler and more discussion of organizational issues is possible here. It is made up of many departments and position levels. It is founded on shared interests, affiliation, or history. An illustration is the friendship between the director of the accounting department and the president of the sales department. DIFFERENCE OF VERTICAL AND HORIZONTAL GROUP Employee autonomy is decreased by vertical hierarchies' well-defined positions and assigned responsibilities for each individual. Horizontal structures are less structured and frequently offer equal opportunity to all employees. However, this could cause a lack of direction or internal strife. While the horizontal approach has a level configuration emphasizing the autonomy of superior employees, the vertical approach has a top-tobottom management structure. It speaks of the organization-wide coordination of activities and mainly applies to lower levels of the plan. When mapped out on paper, a vertical organization gives a pyramid-like appearance. Typically, decisions are made at the top by the CEO or the company president, who subsequently gives authority to lower-level management. Collaboration typically occurs more naturally in a horizontal company because employees are given the freedom to make their own judgments. Employees are more willing to develop cooperative solutions since they have open communication with one another. A vertical group is a PREPARED BY PRINCESS IDA F. PINEDA collection of businesses that are linked to one another on an ongoing basis through two or more stages of a vertical chain, either directly or indirectly. The phrase "vertical chain" describes a network of linked supplier-buyer relationships that spans the supply chain from raw materials to the final application of a product. ADVANTAGES OF INFORMAL ORGANIZATION: 1. Faster Spread of Communication and Quick Feedback Informal organization cuts across formal channels of communication. It may not follow scalar chain of command therefore spreads faster. Through Informal organization, the managers can get to know the real feedback on various policies and plans 2. Fulfil social needs of Members Members of an Informal organization share their tensions, joys & frustrations with one another. They have an outlet to release all their emotions and feelings and provide relief from the monotony created by formal organization. It helps to fulfil the social needs of the members and allows them to find like-minded people. This enhances their job satisfaction since it gives them a sense of belongingness in the organization. 3. Fills Inadequacies in the Formal Structure It contributes towards fulfilment of organizational objectives by compensating for inadequacies in the formal organization. For example, employee’s reactions towards plans and policies can be tested through the informal network. DISADVANTAGES/ LIMITATIONS OF INFORMAL ORGANIZATION 1. Spreads Rumors Informal organization is a breeding ground for rumors especially where there is ambiguity in the policies and programs of formal organization An outbreak of rumor can cause serious harm to the enterprise and its management by Carrying incorrect information throughout the organization. 2. Resistance to Change Informal organization generally prefers existing work routine. Changes are regarded as a threat to its beliefs & values. Thus, management has to face resistance to new work methods. This may delay/ restrict growth. PREPARED BY PRINCESS IDA F. PINEDA 3. Pressurizes Members to Conform to Group Norms. An Informal organization evolves its own norms. These norms may be harmful if norms are against firms ‘interests & are contrary to standards of behavior and performance in formal organization. In such a case it becomes very difficult to achieve the goals of the formal organization. DIFFERENCES BETWEEN FORMAL AND INFORMAL ORGANIZATIONS: BASIS FORMAL ORGANIZATION INFORMAL ORGANIZATION Meaning Structure of authority Network of social relationships relationships created by the arising out of interaction among management employees Origin Deliberately formed by Arises out of social interaction management Authority Authority arises by virtue of Authority arises out of personal position in management qualities Behavior Behavior is directed by rules There is no set behavior pattern Flow of Communication Communication takes place Flow of communication is not through scalar chain through a planned route. It can take place in any direction Nature Rigid Flexible Leadership All managers are leaders Leaders are chosen by the group STAFFING I. DEFINITION AND NATURE OF STAFFING Staffing refers to filling in all organizational job positions and keeping these filled; it is done by identifying job position vacancies, job requirements, workforce requirements, checking the internal environment of the organization for the human resources available, recruiting, selecting placing, promoting, evaluating, career planning, development and training, and compensating, among others. II. RECRUITMENT AND SELECTION Recruitment involves activities related to the development of a pool of applicants for jobs in the organization. Selection, on the other hand, is related to decisions on who hire from the pool created by recruitment tasks. PREPARED BY PRINCESS IDA F. PINEDA III. COMPENSATION/WAGES AND PERFORMANCE EVALUATION/APPRAISAL Compensation/wages and performance evaluation/appraisal are related to each other because the employees’ excellent or poor performance also determines the compensation given to them, after considering other internal and external factors like the actual worth of the job, compensation strategy of the organization, conditions of the labor market, cost of living, and area wage rates, among others. Compensation can come in different forms. It may be direct compensation which includes worker’s salaries, incentive pays, bonuses, and commissions; indirect compensation which includes benefits given by employers other than financial remunerations like travel, educational, and health benefits, and others; and nonfinancial compensation which includes recognition programs, being assigned to do rewarding jobs, or enjoying management support, ideal work environment, and convenient work hours. Also, employees may be compensated on the following bases: Piecework basis – when pay is computed according to the number of units produced Hourly basis – when pay is computed according to the number of work hours rendered Daily basis – when pay is computed according to the number of work days rendered Weekly basis – when pay is computed according to the number of work weeks rendered Monthly basis – when pay is computed according to the number of work months rendered Methods of evaluating workers have undergone development in order to adapt new legal employment requirements and technical changes. Different performance appraisal methods are used depending on the information an evaluator aims to find out. Some of these methods that are in use today are the following: Trait method designed to find out if the employee possesses important work characteristics such as conscientiousness, creativity, emotional stability, and others. PREPARED BY PRINCESS IDA F. PINEDA  Graphic rating scales where each characteristic is to be evaluated is represented by a scale of which the evaluator indicates the degree to which an employee possesses that characteristic. Forced choice method that requires the evaluator to choose from two (2) statements purposely designed to distinguish between positive or negative performance; for example, works seriously – works fast, shows leadership – has initiative. Behaviorally anchored rating scale (BARS) that includes five (5) to 10 vertical scales, one (1) for each important strategy for doing the job and numbered according to its importance. Behavior observation scale (BOS) that measures the frequency of observed behavior. IV. EMPLOYEE RELATIONS AND MOVEMENTS There are three (3) types of employees i.e., engaged employees who work with passion and feel a deep connection with their company and drive innovation and move the organization forward, not engaged employees who are essentially check out for their put time, but not energy or passion into their work, and actively disengaged employees who are not only unhappy at work but also act out their unhappiness and undermine what their engaged co-workers accomplish. What does employee relations do to help supervisors and employees? Provides counsel and advice to supervisors and employees regarding employment-related inquiries Assists in the interpretation of university policies and procedures Provides confidential consultation Advises employees regarding their employment rights Facilitates dialogue on employee/employer issues What are some of the barriers to good employee relations? Anti-social personality; refusal top share more about oneself to co-employees; being a loner Lack of trust in others Selfish attitude; too many self-serving motives Lack of good self-esteem Not a team player Being conceited Cultural/subcultural differences Lack of cooperation Communication problems; refusal to listen what others seek to communicate Lack of concern for others’ welfare How can we overcome barriers to good employee relations? Develop a healthy personality to overcome negative attitudes and behavior. PREPARED BY PRINCESS IDA F. PINEDA  Find time to socialize with co-workers. Develop good communication skills and be open to others’ opinions. Minimize cultural/subcultural tension. V. REWARDS SYSTEMS Organizations offer competitive rewards systems to attract knowledgeable and skilled people and to keep them motivated satisfied once they are employed in their firm. Further, rewards promote personal growth and development and present fast employee turnover. Management offers different types of rewards such as: Monetary rewards are most commonly given in the form of pay increases, bonuses, or increases in benefits such as pension or health care premiums. Such rewards can be divided into two (2) categories: direct and indirect compensation. Both contribute to the financial betterment of an employee. Direct compensation is relatively straightforward and consists of increases in hourly pay, increases in hours (for non-salaried employees), increases in salary, merit pay based on performance, seniority pay based on time with an organization, and bonuses based on the achievement of individual, group, or organizational objectives. Indirect monetary compensation includes increases to benefits or the addition of benefits such as a dental plan. It can also include paid leave in the form of vacation days, days off for training, or longer time off such as a sabbatical, as well as paid leave for illness, caring for a child, or caring for an elderly parent. Additionally, some organizations may offer services as part of an indirect compensation package, such as on-site child care, an elder care program, an on-site cafeteria, a games room or gym, and confidential counseling services for employees and their families. Again, indirect compensation should be valuable to employees and ideally should offer choices from a range of services. Non-monetary rewards cost the organization but do not directly improve the employee’s financial position. Supplying employees with the best tools possible to do their job is an example, such as providing a new high-end laptop or having an excellent training facility for coaches at a university. A good office location, choice of furnishings, or special parking place can all be nonmonetary rewards. Employees may not know the full details of pay and other monetary benefits of coworkers, but nonmonetary rewards are often visible and can create perceptions of inequity in an organization. In some cases, this may be the intent of managers who want employees to strive to achieve the stereotypical corner office, but often it may also unintentionally encourage feelings of inequity. That inequity may have positive implications for an organization if employees strive to increase performance, or it can result in a turnover and reduced performance. As with any reward, nonmonetary rewards need to be carefully thought out before being implemented. PREPARED BY PRINCESS IDA F. PINEDA LEADING DIRECTING is the interpersonal aspect of management, which deals directly with influencing, guiding, supervising and motivating the subordinates for the accomplishment of pre- determined objectives. Directing refers to a process or technique of instructing, guiding, inspiring, counselling, overseeing and leading people towards the accomplishment of organizational goals. It is a continuous managerial process that goes on throughout the life of the organization. THE CONCEPT OF DIRECTING/LEADING Directing is the part of the management function, which actuates the organization members to work efficiently and effectively for the attainment of organization’s objectives. It constitutes the life – spark of the enterprise, which like electric power sets into motion. LEADING Leading – management function, which involves influencing others to engage in the work behaviors necessary to reach organizational goals. Leader’s Bases for Power - the power possessed by leaders may be classified according to various bases. They are as follows: a. Legitimate Power – a person who occupies a higher position has legitimate power over persons in lower positions within the organization. b. Reward Power – when a person has the ability to give rewards to anybody who follows order or request, he is said to have reward power. c. Coercive Power – when a person compels another to comply with orders through threats or punishment, he is said to possess coercive power. d. Referent Power – when a person can get compliance from another because latter would want to be identified with the former, that person is said to have referent power. e. Expert Power – expert provide specialized information regarding their specific lines of expertise. Leadership is an important function of management which helps to maximize efficiency and to achieve organizational goals. The following are the importance of leadership: PREPARED BY PRINCESS IDA F. PINEDA MOTIVATION Motivation – the process by which a person’s efforts are energized, directed and sustained towards attaining a goal. Motivation is the process that initiates, guides, and maintains goal-oriented behaviors.... Motivation involves the biological, emotional, social, and cognitive forces that activate behavior. In everyday usage, the term "motivation" is frequently used to describe why a person does something. Effective managers have the ability to motivate those they work with to behave in a specific, goal- directed way. Motivation is defined as energizing, directing and sustaining employee efforts. A motivated team should be energized and excited about performing tasks. They should be focused on doing what is important for the organization. Managers want a sustained effort from their employees so that they work hard whether or not the boss is present. It is equally important that effective managers understand how to influence people to perform specific behaviors and tasks they are likely to find mundane. A manager needs to be able to persuade workers to stay with the organization. Managers want workers to complete mundane tasks at times and always perform at a high level and be a good organizational citizen. A. EARLY THEORIES OF MOTIVATION 1. Maslow’s Hierarchy of Needs Theory – states that there are 5 basic needs of man starting from the bottom triangle: Physiological Needs – food, drink, shelter, sex and other physical requirements. Safety Needs – security and protection from emotional and physical harm Social Needs – affection, belongingness, acceptance and friendship. Esteem Needs – self-respect, autonomy, achievement, recognition, attention. Self Actualization Needs – growth, self-fulfillment, potential, love PREPARED BY PRINCESS IDA F. PINEDA 2. McGregor’s Theory X and Theory Y. Theory X – states assumption that employees dislike work, lazy, avoid responsibility and must be forced to perform. Theory Y – states the assumption that employees are creative, enjoy work, seek responsibility and can exercise self-direction. 3. Herzberg’s Two Factor Theory/Motivation Hygiene Theory – intrinsic factors are related to job satisfaction and motivation whereas extrinsic factors are associated with job dissatisfaction. 4. McClelland’s 3 Needs Theory – states that 3 acquired needs namely: achievement, power and affiliation are major motives in work. B. CONTEMPORARY THEORIES 1. Goal setting Theory says that specific goals increase performance and that difficult goals when accepted result in higher performance than do easy goals. 2. Reinforcement Theory states that behavior is a function of its consequences. LEADERSHIP THEORIES Leadership – the process of influencing and supporting others to work enthusiastically toward achieving objectives. Traits of Effective Leaders: 1. Personal Drive – persons with drive are those identified as willing to accept responsibility, possess vigor, initiative, persistence, and health. 2. Desire to Lead – persons who appear to have all the qualifications for leadership, yet they cannot become leaders because they lack one special requirement the desire to lead. 3. Personal Integrity – integrity includes honesty, honor, incorruptibility, rectitude, righteousness, uprightness, and other similar virtues. 4. Self-Confidence – the activities of leaders require moves that will produce the needed outputs. For the moves to be continuous and precise, self-confidence is necessary in leadership functions such as conceptualizing, organizing, and implementing activities. 5. Analytical Ability – a leader with sufficient skill to determine the root cause of the problem may be able to help the subordinate to improve his production. 6. Knowledge of the Company, Industry, and Technology – leader who is well informed about his company, the industry where the company belongs and the technology utilized by the industry, will be in a better position to provide directions to his unit. PREPARED BY PRINCESS IDA F. PINEDA 7. Charisma – when a person has sufficient personal magnetism that motivates people to follow his directives, this person is said to have charisma. 8. Creativity – ability of the manager to find new and better ways of accomplishing his work. 9. Flexibility – people differ in the way they do their work. One will adapt a method different from another person’s method. A leader, who allows this situation as long as the required outputs are produced, is said to be flexible. BEHAVIORAL APPROACHES TO LEADERSHIP STYLES 1. Ways Leaders Approach People. In motivating people, leaders use a positive or negative approach. 2. Ways leaders use power – leader’s styles also vary according to how power is used. They consist of autocratic, participative and free-rein. Autocratic Leaders – leaders who make decisions without consulting subordinates are called autocratic leaders. Motivation takes the front of threats, punishment, and intimidation of all kinds. Participative Leaders – when a leader openly invites his subordinates to participate or share in decision making, policy-making, and operation methods, he is said to be a participative leader. Free-Rain Leaders – leaders who set objective and allow employees or subordinates relative freedom to do whatever it takes to accomplish those objectives. 3. Leader’s orientation towards task and people – leadership may be classified according to how leaders view task and people. A leader may either be: Employee oriented – when a leader considers employees as human being intrinsic importance and with individuals and personal needs to satisfy. Task oriented – when a leader places stress on production and the technical aspects of the job and the employees are viewed as the means of getting the work done. CONTINGENCY APPROACHES TO LEADERSHIP STYLE The contingency approach refers to that effort to determine through research which managerial practices and techniques are appropriate in specific situations. The following are the contingency approaches: 1) FIEDLER’S CONTINGENCY MODEL. Fred Fiedler believes that leadership is effective when the leader’s style is appropriate to the situation. The situational characteristic is determined by three principal factors: The relation between leader and follower PREPARED BY PRINCESS IDA F. PINEDA  The structure of the task The power inherent in the leader’s position The situational characteristics vary from organization. To be effective, according to Fiedler, the situation must fit the leader. If this is not so, any of the following may be tried: Change the leader’s traits or behavior Select leaders who have traits or behavior fitting the situation Move leaders around in the organization until it fits to them the position Change the situation 2) HERSEY AND BLANCHARD SITUATIONAL LEADERSHIP MODEL. The situational leadership model developed by Hersey and Blanchard suggest that most important factor affecting the selection of a leader’s style is the development (or maturity) level of the subordinate. Blanchard and others elaborated on the leadership styles appropriate for the various maturity levels of subordinates. They are the following: Directing – is for people who lack competence but are enthusiastic and committed. They need direction and supervision to get them started. Coaching – is for people who have some competence but lack commitment. They need direction and supervision because they are still relatively inexperienced. Supporting – is for people who have competence but lack confidence or motivation. Delegating – is for people who have both competence and commitment. 3) PATH-GOAL MODEL OF LEADERSHIP. The path-goal model of leadership espoused by Robert J. House and Terence R. Mitchell stipulates that leadership can be made effective because leaders can influence subordinate’s perception of their work goals, personal goals and paths to goal attainment. By using the path-goal model, it is assumed that effective leaders can enhance subordinate motivation by: Clarifying the subordinate’s perception of work goals Linking meaningful rewards with goal attainment Explaining how goals and desired rewards can be achieved. The Path-Goal Process The leadership styles, which may be used by path-goal proponents, are as follows: Directive Leadership – when the leader focuses on clear task assignments, standards of successful performance, and work schedules. Supportive Leadership – when subordinates are treated as equals in a friendly manner while striving to improve their well-being. PREPARED BY PRINCESS IDA F. PINEDA  Participative Leadership – when the leader consults with subordinates to seek their suggestions and then seriously consider those suggestions when making decisions. Achievement – Oriented Leadership – when the leader sets challenging goals emphasizes excellence, and seeks continuous improvement while maintaining a high degree of confidence that subordinates will meet challenges in a responsible manner. 4) VROOM’S DECISION-MAKING MODEL – Vroom’s model of leadership is one that prescribes the proper leadership style for various situations, focusing on the appropriate degrees of delegation of decision-making authority. PROCESS OF COMMUNICATION IN AN ORGANIZATION Communication is the process containing three elements viz. sender, message and receiver. These three elements are essential to complete the communication process. The working of communication process is shown in the diagram below: The following steps are involved for completion of communication process: 1. Sender or communicator prepares the message neatly. He is the source where message is generated. It is he who starts the communication process. 2. The message is to be encoded symbolically which is to be conveyed. This message is the idea came into the mind of sender which he wanted to convey. 3. The message is to be transmitted through a method of communication the choice of which is to be made. The message may be transmitted orally face to face, through messenger, through air or a written note in the form of order, memo, leaflet etc. It is up to sender to make appropriate choice. PREPARED BY PRINCESS IDA F. PINEDA 4. Medium of communication includes telephone, internet, through messenger, post, fax, e-mail, etc. The choice of medium again depends on the sender. 5. Receiver or communicate is a person for whom message was sent by the sender or communicator. Receiver after receiving the message must understand it in proper perspective then only the purpose of communication will be fulfilled. 6. The receiver after decoding the message must act or take action as per instructions contained in the message. 7. The last step is to take feedback. The feedback means the sender should know whether the receiver has received the message and understood it. The confirmation regarding this is feedback. The positive feedback is effective communication. With feedback the communication process is complete. TYPES OF COMMUNICATION Communication may be classified into the following: A. Verbal- through the use of oral and written words B. Non-Verbal - through body movements, gestures, facial expressions, eye contact, and by touching C. Formal- if communication takes place within prescribed, routine organizational work arrangements D. Informal- if communication is not defined by an organization’s hierarchical structure. CHANNELS OF COMMUNICATION Communication flows in different directions within an organization. It could either be: A. VERTICAL- involves communication flow between people belonging to different organizational levels. B. UPWARD- the flow of information from an employee who belongs to a lower hierarchical level to the boss/manager who belongs to a higher hierarchical level. Employees or subordinates may communicate upward regarding their problems, requests that they would like the boss to approve, issues with coworkers and others. C. DOWNWARD- is the flow of information from the manager, who belongs to a higher hierarchical level, to the subordinates/employees, who along to the lower hierarchical levels. Examples are when the boss gives orders to subordinates to finish certain tasks, communicates organizational policies and practices, and comments about work performance month others. D. HORIZONTAL/LATERAL- takes place among employees who belong to the same hierarchical level. Members of cross-functional teams who belong to different units/departments but occupy the same organizational level make use of this type of communication to save time and facilitate coordination. PREPARED BY PRINCESS IDA F. PINEDA E. DIAGONAL- entails communicating with someone or others who belong to different departments/units and different hierarchical levels. For example, an employee belonging to the company’s financial management department communicates directly with the head of the human resource department about his complaint against a marketing department employee. Take note of the different departments and different organizational levels of the persons communicating with each other. Diagonal communication is said to be beneficial because of its efficiency and speed; however, it may also cause some confusion. THE BASIC ELEMENTS OF THE COMMUNICATION PROCESS THE SENDER - The communication process begins with the sender, who is also called the communicator or source. The sender has some kind of information — a command, request, question, or idea — that he or she wants to present to others. For that message to be received, the sender must first encode the message in a form that can be understood, such as by the use of a common language or industry jargon, and then transmit it. THE RECEIVER - The person to whom a message is directed is called the receiver or the interpreter. To comprehend the information from the sender, the receiver must first be able to receive the sender's information and then decode or interpret it. THE MESSAGE - The message or content is the information that the sender wants to relay to the receiver. Additional subtext can be conveyed through body language and tone of voice. Put all three elements together — sender, receiver, and message — and you have the communication process at its most basic. THE MEDIUM - Also called the channel, the medium is how a message is transmitted. Text messages, for example, are transmitted through the medium of cell phones. FEEDBACK - The communication process reaches its final point when the message has been successfully transmitted, received, and understood. The receiver, in turn, responds to the sender, indicating comprehension. Feedback may be direct, such as a written or verbal response, or it may take the form of an act or deed in response (indirect). Other Factors The communication process isn't always so simple or smooth, of course. These elements can affect how information is transmitted, received, and interpreted: PREPARED BY PRINCESS IDA F. PINEDA  - Noise: This can be any sort of interference that affects the message being sent, received, or understood. It can be as literal as static over a phone line or radio or as esoteric as misinterpreting a local custom. - Context: This is the setting and situation in which communication takes place. Like noise, context can have an impact on the successful exchange of information. It may have a physical, social, or cultural aspect to it. In a private conversation with a trusted friend, you would share more personal information or details about your weekend or vacation, for example, than in a conversation with a work colleague or in a meeting. COMMUNICATION NETWORKS IN ORGANIZATIONS Communication networks are varied patterns of combined horizontal and vertical flows of organizational communication. Types of communication networks include the following: a. CHAIN OF NETWORK- where communication flows according to the usual formal chain of command, downward and upward. b. WHEEL NETWORK- where communication flows freely among all members of their group/team. c. ALL-CHANNEL NETWORK- where communication flows freely among all members of a team d. GRAPEVINE NETWORK- is informal communication. An example of this is gossip/rumor which could quickly disseminate information. Managers must stay aware of the grapevine’s flow and the patterns and could use it to transmit important information. They, however, should also be conscious of the negative effects of gossip as these may cause conflicts in their company. Negative effects of rumors may be minimized by practicing transparency and communication openly with employees. e. COMPUTER NETWORK- Information technology has made it possible for managers to communicate with each other and with subordinates and for employees to communicate with each other anytime, regardless of distance. Examples of computer communication applications are e-mail, blogging, teleconferencing, and intranet. It has been observed by communication researchers that there’s no single network that could be considered applicable or fit for all circumstances in an organization. BARRIERS TO COMMUNICATION Organization members encounter various types of barriers that can alter the meaning of communications that they receive. PREPARED BY PRINCESS IDA F. PINEDA These barriers included: 1. FILTERING- the shaping of information communicated to make it look good or advantageous to the received. For example, a sales agent may report to his manager the big amount of sales that he was able to make with one of their customers but failed to report the complaints he received from other customers regarding their products. 2. EMOTIONS- the interpretation of communications which may be influenced by extreme emotions felt by the received. For example, a manager who is in a very bad mood and received good news may not see the positive aspect of it because his rational thinking process is affected by his emotional judgment. 3. INFORMATION OVERLOAD- another barrier to good communication since there are too many pieces of information received by an individual may harm a person’s processing capacity. For example, the hundreds of job applications received by human resource managers through e- mail may be too many for them to read fully and respond to accurately. 4. DEFENSIVENESS- the act of self-protection when people are threatened by something or someone. Due to this feeling, people may resort to communicating lies to protect themselves or to interpret communications differently to defend their interests, thus, reducing mutual understanding. 5. LANGUAGE- could also hamper good communications because words used may have different meanings to different people belonging to a different age, educational background, or cultural group. Diversity of background of organization members may influence the language or the words that they use. For example, the word “hello” may just be an ordinary greeting to the older members of an organization; but the same word, “hello” may have a negative connotation to the younger group of employees depending on the context. 6. NATIONAL CULTURE- just like languages, the prevailing national culture may also cause problems in communication among members of an organization, especially if it's a multinational company. Certain office practices, like sending formal memoranda to employees, maybe negatively interpreted by employees coming from another country with a different culture that values face to face interpersonal communication. Such negative interpretation may, in turn, cause employee dissatisfaction and less motivation to perform their work well. OVERCOMING COMMUNICATION BARRIERS To avoid conflicts resulting from communication problems, managers try to overcome communication barriers through the following means: a. USING FEEDBACK- This is usually done by asking questions about a memo sent to subordinates or by asking them to give their comments or suggestions. In doing so, they can determine whether the communication they sent out was understood the way they originally intended. PREPARED BY PRINCESS IDA F. PINEDA b. USING SIMPLE LANGUAGE- This is done by avoiding uncommon terms and flowery words that may just cause misinterpretation. The language used must fit the level of understanding of the intended recipients of the communication. Effective communication is achieved when the message is understood by those who received it. c. ACTIVE LISTENING- This means listening well to grasp the full meaning of the communication. Hearing without giving full attention to what others seek to communicate usually results in misinterpretation and communication distortions. d. CONTROLLING EMOTIONS- This is another method of overcoming communication misinterpretation. When the received is affected by extreme anger, his interpretation of a message received may not be accurate. On the other hand, when the sender is affected by extreme emotions, he or she may also send or transmit inaccurate information. Therefore, it is important to practice emotional restraint. e. OBSERVING BODY LANGUAGE- This also influences how communication is interpreted. Actions of the message received, like throwing away a letter delivered to him, betrays his negative feelings regarding its message, even if he says yes or no to what is requested. Nonverbal cues must always be watched because, as the saying goes, action speaks louder than words. PREPARED BY PRINCESS IDA F. PINEDA MANAGEMENT OF CHANGE AND DIVERSITY For an organization looking to cultivate a more diverse and inclusive workplace, it is important to understand what constitutes workplace diversity. Workplace diversity refers to the variety of differences between individuals in an organization. Diversity not only includes how individuals identify themselves but also how others perceive them. Diversity within a workplace encompasses race, gender, ethnic groups, age, religion, sexual orientation, citizenship status, military service and mental and physical conditions, as well as other distinct differences between people. DIVERSITY MANAGEMENT can be defined as the process of planning, directing, organizing and applying all the comprehensive managerial attributes for developing an organizational environment, in which all diverse employees irrespective of their similarities and differences in the society, can actively and effectively contribute to the competitive advantage of a company or an organization. Managing diversity in the workplace presents a set of unique challenges for HR professionals. These challenges can be mitigated if an organization makes a concerted effort to encourage a more heterogeneous environment through promoting a culture of tolerance, open communication and creating conflict management strategies to address issues that may arise. For leadership to effectively manage diversity in the workplace, they need to understand their backgrounds and how their behavior and beliefs can affect their decision-making within a diverse environment. Organizational Change – any alteration of people, structure, or technology in organizations brought by external or internal forces which they encounter. Organizational Diversity – the host of individual differences that make people in organizations different from and similar to each other. TYPES OF CHANGE CHANGE OF PEOPLE. People’s attitudes, values, wants and needs, expectations, and behaviors change as time goes by, but changing them for the better is not easy to do. In order to address this need for change, organizational development techniques are used. OD is used to describe organizational change methods related to collaborate with one another. Team building, sensitivity training, intergroup development, process consultation, and survey feedback are popular OD techniques. Mangers, however, must use techniques that are suitable to the prevailing organizational culture in their respective companies. CHANGES IN STRUCTURES. Due to changing conditions/situations and changing strategies used, organizational structures may also change according to work specialization, departmentalization, change of command, span of control, centralization, formalization, and job resigning, among others. Managers are advised to alter one or more of these structural components, depending on the needs of their organization. CHANGES IN TECHNOLOGY. Technology changes usually refer to changes in work processes and methods used, introduction of new equipment and work tools, automation or computerization. Competitive factors or innovations in industries require administrators of PREPARED BY PRINCESS IDA F. PINEDA  companies to consider such technological changes. Computerization is most popular example of technological change. With the use of computer networks, large amounts of data can be stored, retrieve, utilized in many different ways-form the simple keeping of employees records to controlling complex equipment. Both large and small companies now use the internet to transact business, hence the rise of e-commerce as standards practice in many firms. MANAGING RESISTANCE TO CHANGE The following are required to manage resistance to change: EDUCATION – employees have to be educated regarding the reasons for the relevance of change PARTICIPATION – allow organization members to participate in decision-making related to bringing change in their company FACILITATION AND SUPPORT – facilitate and provide new skills training and counselling for employees to minimize their fear of change MANIPULATION OF INFORMATION – withhold damaging information about change to make it acceptable to organization members SELECTION OF PEOPLE – select people who are open to change to hrlp disseminate the beneficial effects of change, resistance to change lessened COERCION – the use of direct threats or fore to make people accept change; however, this method is perceived as a form of bullying, so it is used only when extremely necessary CONTROLLING CONTROLLING is a management function involves ensuring the work performance of the organization’s members are aligned with the organization’s values and standards through monitoring, comparing, and correcting their actions. Control methods are techniques used for measuring an organization’s financial stability, efficiency, effectiveness, production output, and organization members’ attitude and morale. CONTROL METHODS AND SYSTEMS METHODS OF CONTROL There are two (2) control techniques or methods that a firm may apply, these are the following: A. QUANTITATIVE METHODS It makes use of data and different quantitative tools for monitoring and controlling production output. PREPARED BY PRINCESS IDA F. PINEDA  The chart is the most widely recognized quantitative. Charts used as control tools normally contrast time and performance. The visual impact of a chart often provides the quickest method of relating data. A difference in numbers is much more noticeable when displayed graphically. Two common quantitative tools are (1) Budgets and (2) Audits. 1. BUDGET It is considered the best-known control device. Budgets and control are, in fact, synonymous. An organization’s budget is an ex