ORGANIZATION AND

MANAGEMENT
Module

Elton Gil T. Mendoza

6/1/2019
Chapter 1

THE NATURE AND CONCEPT OF MANAGEMENT

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the meaning of management and the different functions of management;

 explain the evolution of management theories; and
 explain the functions, roles and skills of a manager.

Concept Notes:

Management is defined as a process of planning, organizing, leading and controlling by

using resources to achieve specific objectives. The key words in management are process,
resources and objectives.

Planning, organizing, leading and controlling are interrelated as they gear toward
achieving the desired objectives. They form a coherent set of activities. They are performed in
sequential manner, like phases in a cycle. However, they may have short intervals in between
them and may even overlap, if necessary.

Resources being used in management include people, time, money materials or

equipment, land, building, technology, and information and communication systems. The most
important of these resources is people.

Objectives should be specific, measurable, attainable, realistic and time-bound

(SMART). Management objectives are governed by certain perspectives, namely the investment
perspective, ethical perspective, the fulfillment of needs perspective, and the mainstream vs.
multi-stream perspectives.

Managers must be able to understand the different approaches to management in order to

choose the appropriate approach for their workplace and execute their jobs well. These
approaches are embodied in the management theories that have evolved over the past years.
There are three schools of thought in management theories: the classical management theories,
the behavioral management theories and the modern management theories.

The classical management theories emphasize the efficiency and productivity in work.
The behavioral management theories emphasize that organizations are social groups and form
cooperative systems. The modern management theories emphasize rational, quantitative and
contingency approaches of management.

1 Organization and Management

 Apart from knowing the different management perspectives, a manager must also
recognize the expected functions, roles and skills required from him or her. Management
functions depend on the level of managerial position. For instance, the first-line supervisors
manage the people who are directly involved in production or service delivery of the
organization, while the middle-level managers manage the supervisors. The top managers, on the
other hand, manage the middle-level managers and attend to a larger scope of responsibilities.

The roles of a manager pertain to interpersonal, informational and decisional roles. To

perform these roles, managers need to have the three types of skills, namely, technical, human
and conceptual skills.

Activity 1:
Direction: Discuss the cycle of four management functions below.

Moving on the next

Planning
cycle of POLC

Controlling Organizing

Leading

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Activity 2:
Direction: Complete the table 1.1, table 1.2, and table 1.3.

Table 1.1 Main Ideas and Features of Classical Management Theories

CLASSICAL MANAGEMENT THEORIES
Main Proponent Main Ideas Contributed Other Features
(1900-1930)
Frederick Taylor
( Father of principles of
scientific management)

Henri Fayol
(Father of administrative
principles)

Max Weber
(Father of the principles of
bureaucracy)

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 Table 1.2 Main Ideas and Features of Behavioral Management Theories
BEHAVIORAL MANAGEMENT THEORIES
Main Proponent Main Ideas Contributed Other Features
(1930-1950)
Elton Mayo
(Forerunner of the
behavioral movement in
management)

Chester Barnard
(Father of the cooperative
systems theory)

Douglas McGregor
(Developer of the Theory X
and Theory Y for managing
people)

Abraham Maslow
(Father of the theory on the
hierarchy of human needs)

Chris Argyris
(Developer of the theory of
adult personality)

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 Table 1.3 Main Ideas and Features of Modern Management Theories
MODERN MANAGEMENT THEORIES
Main Proponent Main Ideas Contributed Other Features
(1950-1980)
W. Edwards Deming
(Father of the quality
movement)

and

Joseph Juran
(Father of the quality
principles of plan-control-
improve)

Peter Drucker
(Father of modern
management)

Peter Senge
(Father of the learning
organization)

Jeffrey Pfeffer
(Developer of the evidence-
based management)
and
Robert Sutton
(American professor and
researcher)

Michael Porter
(Father of competitive
strategy)

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Activity 3:
Direction: Explain the functions, roles and skills of a manager.

First-level Supervisors

Middle Managers
Functions

Top managers

Interpersonal

Functions, Informational
Roles and
Roles
Skills
of a Manager
Decisional

Technical

Human
Skills

Conceptual

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Chapter 2

THE FIRM AND ITS ENVIRONMENT

Learning Objectives:

At the end of this lesson, the students should be able to:

 identify various forces/elements of the firm’s environment;

 describe the local and international business environment of a firm;
 explain the role of business in relation to the economy;
 discuss the different phases of economic development; and
 differentiate the various forms of business organization.

Concept Notes:

Firms exist within a complex environment composed of different forces that are classified
into political, economic, social and technological. Apart from these PEST forces, business
establishments in the Philippines are also exposed to natural risks from the environment. These
risks are in the form of typhoons, earthquakes, storm surges and volcanic eruptions. All these
forces in the environment pose challenges in the operations, continued survival and long-term
growth of firms.

Environmental scanning enables a manager to analyze the internal and external

environments of a firm. This is important in making business decisions relevant to the current
operations and future plans for the company. In environmental scanning, the SWOT analysis
serves as a useful framework to analyze the strengths, weaknesses, opportunities and threats
confronting the firm.

Business enterprises have an important role of driving economic growth and development
by creating jobs, increasing incomes, producing goods and providing services. Apart from the
goal of profitability, businesses are expected to take into account the interests of multiple
stakeholders, known as cooperate social responsibility or CSR. A concept similar to CSR is the
Triple Bottom Line, also known as 3 Ps. Triple Bottom Line emphasizes that companies should
focus on profit (financial performance), people ( benefits to people), and planet (environmental
impacts).

It is also important for managers to learn about the different phases of economic
development as a guide to developing strategies for their businesses. The different phases of
economic development pertain to the developing economies phase, industrialization phase, and
globalization phase.

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 An organization is a social entity formed by several groups of people who bond and work
together to achieve common objectives. Organizations vary by type according to the nature of
their main purpose, such as government organizations, private organizations and non-
governmental organizations. Legal forms of business organizations are classified into
corporations, partnerships, limited partnerships, sole proprietorships and cooperatives. They vary
in terms of form of ownership and the liability of the owners. The open systems nature of the
organization emphasizes the dynamic environment where the continual process of transforming
inputs to outputs takes place.

Activity 1:
Direction: Answer the following questions.

1. What are the different forces that can affect the environment of a firm?
 __________________________________________________
 __________________________________________________
 __________________________________________________
 __________________________________________________
2. Give one examples for every of these forces.
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 __________________________________________________
 __________________________________________________
 __________________________________________________
3. Describe the local business environment through industry analysis.
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4. Describe the international business environment through global management.
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5. Why do managers need to learn about the different phases of economic development?
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Activity 2:
Direction: Complete the table of types of organization.
Types of
Main Purpose Structural Forms Key Characteristics
Organization
Aim to:

Government
Organization (GOs)

Aim to: Corporations

Partnerships

Private Business Limited Partnerships

Organization
Sole Proprietorships

Cooperatives

Aim to:

Private Associations

Aim to:

Government-Owned
and –Controlled
Corporations
(GOCCs)

Aim to:

Non-Governmental
Organizations
(NGOs)

9 Organization and Management

Chapter 3

PLANNING

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the nature of planning;

 compare and contrast the different types of plans;
 describe planning at different levels in the firm;
 apply appropriate planning techniques and tools; and
 formulate a decision from several alternatives.

Concept Notes:
Planning is the first function in management. It is the process of setting objectives and
determining how to accomplish those objectives. Managers recognize the benefits of planning in
providing management focus and flexibility, as well as improving coordination and control of
operations.
Many kinds of plans are developed in management. It is important to distinguish the uses
of these different types of plans, such as between long-range and short-range plans, and between
standing and single-use or stand-alone plans.
Planning is performed at different management levels in the organization. Top
management level develops strategic plans, which are long-term plans that cover the entire
organization. Middle-level and supervisory levels prepare the functional or tactical plans, which
are more detailed plans that are based on the strategic plans.
In planning it requires critical thinking and diligence from a manager. As an aid in
planning, a manager uses several techniques and tools. These include forecasting, contingency
planning, scenario planning and benchmarking. All these techniques and tools will help the
manager in having an open and creative mind to explore opportunities in the future. These can
also guide the manager in anticipating the various risks that may take place that will adversely
affect the achievement of business goals.
Decision-making is an important part of planning. Step-by-step guide to decision-making
will guide a manager in identifying a problem, generating alternative courses of action, and
choosing the most appropriate course of action to solve the problem.

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Activity 1:
Direction: Compare and contrast the different types of plan. Complete the table below.

Long-range Plans and Short- Strategic Plans and Functional Operational Plans:
range Plans Plans Standing Plans and Single-use
Plans

Contrast:

Activity 2:
Direction: Answer the following questions.
1. How is planning performed at different management levels of the firm?
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11 Organization and Management

 2. Why are vision-mission-values statements important in strategic plans?
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3. What happen when communication flows are not effective in cascading the plans from top
management level down to the rank-and-file level? Cite an example.
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Activity 3:
Apply it in Real Life
You are a co-owner of several coffee shops. You are now thinking of opening a new
branch in the university belt area. However, you have found out that there are already two
existing coffee shops operating in that area. As such, by using scenario planning, you are
going to prepare a brief write-up on a “best case” and a “worst case” scenario if you pursue
your plan. Write your best case and worst case in 1 short bond paper and paste here.

PASTE HERE

12 Organization and Management

Chapter 4

ORGANIZING

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the nature of organizations;

 distinguish the various types of organization structures;
 apply organization theories in solving business cases;
 identify the different elements of delegation; and
 differentiate formal and informal organization.

Concept Notes:
Organizational structure pertains to the task allocation in an organization, the hierarchy of
authority, the reporting arrangements, the communication channels and the coordination
mechanisms. It is important for organizations to create their own organizational chart that will
guide the leaders and members in performing their assigned roles and responsibilities to
accomplish their common goal and objectives.
There are various forms of organizational structures, which include functional structure,
divisional structure, matrix structure, team structure, network structure and virtual structure.
They are called formal organizations, the members are bound to perform the job or tasks
assigned to them. Formal organizational structures may be described in terms of three features:
formalization, complexity and centralization.
Unlike formal organizations, informal organizations are not officially created, but are
freely formed by members who have a need for them. Relationships in informal organizations
are less structured and are more spontaneous compared to those in formal organizations.
Informal structures are important because they are voluntarily formed by members due to closer
relationships and common interests. Both formal and informal structures simultaneously exist in
an organization.
Managers can learn from management theories for a greater understanding for their
business. They can also apply management theories in solving problems in business.
Examples of management theories are the contingency theory, the resource-based theory,
and stakeholder theory. They can be briefly described, as follows: The contingency theory
provides that organizations must consider contingency variables, such as organizational size,
technology and uncertainly in the environment, to determine the right organizational structure.
The resource-based theory maintains the firm resources, especially people, provide the
organization’s sustained competitive advantage. The stakeholder theory states that the firm must
balance the interests of various stakeholders that affect the firm, or may be affected by the firm.

13 Organization and Management

 Managers must be willing to delegate tasks to subordinates. Delegation frees up the time
of the manager so he or she could focus his or her attention on the more critical and urgent
concerns of the business. Delegation also informs everyone in the office on who is in charge in
the event that the manager is not available, or become indisposed.
Delegation empowers subordinates to fully utilize their skills in the job. It motivates them
in their work and contributes to their sense of fulfillment as members of the organization.
The three important components in the process of delegation are the assignment and
transfer of duties and of authority and responsibilities. If any of these components is not properly
done, the delegation process becomes ineffective.
Managers must also know how to develop their teams. Since teams grow gradually, the
manager, as the leader of the team, must be patient in guiding the group to accomplish the team
objectives and to become a successful team. There are five stages in the development of a team,
namely, forming, storming, norming, performing and adjourning.

Activity 1:
Direction: Draw the organizational structure of your school in the box below. After that, you
need to identify what type of organizational structure you drawn and explain why.

14 Organization and Management

______________________________________________________________________________
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Activity 2:
Direction: Write T on the blank if the statement is true and F if the statement is false.

____1.Contingency theory emphasizes that organizational resources provide competitive

advantage for the firm.
____2.Delegation is the process by which manager assigns duties, authority, and
responsibility to his or her subordinates.
____3.In organizations with divisional structures, employees with similar skills are grouped
together into functional departments, such as production, marketing, finance, and
human resources.
____4.Matrix organizations combine the functional and divisional structures.
____5.Informal organizations are officially created such that members have mandated tasks
and responsibilities.
____6.A disadvantage of team structures is that they are usually temporary in nature, which
may potentially cause some members to reduce their level of commitment to the job
needed.
____7.The stage team development when members begin to be cooperative and establish
agreed ways for doing things is called forming.
____8.A formal structure has a documented organizational chart of the officers and managers
who directed the organization.
____9.A stakeholder is person or entity who interacts with a manager.
____10.Formal organizational structures described in terms of three features which are
formalization, complexity and centralization.

15 Organization and Management

Chapter 5

STAFFING

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the nature of staffing;

 explain the steps in recruitment and selection process;
 identify the policy guidelines on compensation and performance evaluation;
 discuss the importance of employee relations;
 differentiate various employee movements; and
 adopt effective reward system.

Concept Notes:
Staffing is a critical responsibility of managers. It pertains to the careful and systematic
way to plan and install the personnel requirements of the company. In today’s competitive
environment, managers must know how effectively recruit and select the right people for the job
required. Recruitment methods may be in the form of internal recruitment or external
recruitment, or a combination of both, depending on company policy. Once a pool of potential
candidates has been recruited, managers must properly screen and evaluate their qualifications.
To select the right candidate, they may use a combination of written tests, interviews, and
assessment of work samples.
Organizations should understand though that it is not enough for them to hire the right
people for the job. A critical unavoidable concern would be, “Can you retain them?” Thus,
managers must develop effective training and development programs to retain employees.
It is important to note that human resource managers as well as line or department
managers share in the responsibility for effective staffing to improve the company performance.
However, human resource managers serve as the overall coordinator in planning and providing
for human resources of the company.
Managers must develop an effective compensation and rewards policy to motivate
employees, retain them and attract new applicants. Employee compensations are classified into
direct and indirect compensations. Direct compensations are in the form of salaries, wages and
incentives such as bonus and merit increases. Indirect compensation also includes optional
employee benefits, such as retirement plan, life insurance and educational plan.
Managers recognize the importance of both intrinsic and extrinsic rewards given to
employees who perform well. Extrinsic rewards are monetary or material reward while intrinsic
reward which are nonmonetary.

16 Organization and Management

 Performance appraisals are necessary to identify areas for improvement in the work of
employees. It follows feedback on work performance and it provides basis for employee rewards
and promotions. Managers must formulate clear and fair policies for performance appraisal for
conducing performance assessment.
Managers also exercise the important role and responsibility of improving employee
relations in the work place. Employee relations create a harmonious and productive work
environment. It motivates employees to perform well and instills loyalty to the company.
Apart from adopting clear and fair policies for performance appraisals and employee
relations, managers also formulate proper guidelines concerning employee movements.
Employee movements pertain to employee promotion, separation and retirement.

Activity 1:
Direction: Answer the following questions.
1. What is the nature of staffing?
________________________________________________________________________
________________________________________________________________________
______________________________________________
2. Differentiate the recruitment process and selection process.
________________________________________________________________________
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_______________________________________
3. Why is it important for managers to set an effective compensation policy?
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4. What are extrinsic and intrinsic rewards?
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5. Why important are employee relations?
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17 Organization and Management

Activity 2:
Direction: Compare the three employee movements.
Promotion Separation Retirement

Activity 3:
Reflect on it.
1. How do you think the compensation, rewards and incentives systems affect the hiring
process of prospective employees? How about the longevity of the current employees?
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______________________
2. Do you think it is unethical for an employee to ask a co-worker about his or her salary
rate, or the salary rate of other employees in their company? Why do you say so?
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18 Organization and Management

Chapter 6

LEADING

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the nature of directing;

 differentiate leading to managing;
 identify the different theories of motivation;
 differentiate styles of leadership;
 appreciate the role of communication in directing people within the organization; and
 recognize the interrelationship of Filipino from foreign cultures.

Concept Notes:
Leadership is inspiring organizational members to work at their best to accomplish tasks.
It is the ability to inspire and direct the actions of others toward a goal. To be effective in
directing, managers must have a clear vision and set of objectives to guide the group.
Leaders are different from managers in mindsets, approaches and responsibilities. For
instance, leaders concerned with setting the direction of the organization in the long-term. In
contrast, managers are concerned in meeting short-term challenges in the work place.
Learning about leadership styles is important to better understand people and adapt well
to the work setting. Based on Blake and Mouton’s Leadership Grid, different leadership styles
may be classified into autocratic style, human relation style, laissez-faire style, democratic style
and middle-of-the-road style.
People are motivated to work for different reasons. The different theories of motivation
provide explanations on why employees would prefer to work in certain companies and exert
effort to do job their job well. These theories are classified into models, namely, the Needs
Theory Model, Behavior Modification Model, Expectancy Model, Goal Setting Model and
Equity Model.
Communication is the process of sending messages that contain a meaning and purpose.
Managers use communication in directing people. They use communication channels, such as
face-to-face meetings, written policies and e-mails, to guide members in their work.
Coordination is the process of linking people within a group and among different groups
in the organization for the purpose of coherence and consistency in meeting objectives.
Managers use personal methods for coordination, such as dialogues, to develop smooth
interrelationship among members. They also use impersonal methods such as manuals, to
provide clear instructions to people on how to perform their work.

19 Organization and Management

 Kurt Lewin’s Force Field Analysis, to manage diversity among people in the workplace,
managers can promote policies that ensure fairness and nondiscrimination of workers from
different backgrounds.
Managers have significant role in shaping a positive or favorable organizational culture.
By serving as role models, leaders influence employees to adopt values, such as work excellence,
which promote a positive company culture.
With globalization, managing the work of persons from different national cultures has
becomes possible. Managers need to develop an ability to adjust easily to diverse, new cultures,
known as Cultural Intelligence or CQ.

Activity 1:
Direction: Differentiate the leader and the manager using the table below.
Leader Manager

Activity 2:
Direction: Differentiate the different leadership styles/types using the table below.
Styles/Types Description

Autocratic Style

Human Relations Style

Laissez-faire Style

Democratic Style

20 Organization and Management

 Middle-of-the-road Style

Charismatic Leadership

Transactional Leadership

Transformational Leadership

Activity 3:
Direction: Answer the following questions.
1. What is the nature of directing?
________________________________________________________________________
________________________________________________________________________
__________________________________________________
2. Identify the Need Theories on Motivation and explain each of them.
________________________________________________________________________
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______________________
3. How can a Filipino worker relate well with people from other cultures?
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_____________________________
4. Explain each of the following:
a. Behavior Modification Model of Motivation
b. Goal Setting Model of Motivation
c. Expectancy Model of Motivation
d. Equity Model of Motivation

21 Organization and Management

Chapter 7

CONTROLLING

Learning Objectives:

At the end of this lesson, the students should be able to:

 discuss the nature of controlling;

 describe the link between planning and controlling;
 distinguish control methods and systems;
 apply management control in accounting and marketing concepts and techniques; and
 prepare a budget plan.

Concept Notes:
Controlling refers to designing and implementing systems to ensure alignment with
organizational goals and compliance performance standards. It is an important management
function as it provides an assessment of whether a company meets its target objectives. It
identifies the gaps in performance. Through controlling, managers can timely respond to
problems encountered during implementation.
Control systems are different from control methods. Control systems provide information
to identify the difference between expected and actual output. On the other hand, control
methods pertain to tools and techniques used to ensure adherence to performance standards.

Activity 1:
Direction: Answer the following questions.
1. Explain and describe the nature of controlling. How is controlling linked with planning?
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2. To what extent should managers allow flexibility in controlling?
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Activity 2:

22 Organization and Management

 Direction: Identify and explain the different control systems and methods.
Control Systems Control Methods

23 Organization and Management

Chapter 8

INTRODUCTION TO THE DIFFERENT FUNCTIONAL AREAS OF

MANAGEMENT

Learning Objectives:

At the end of this lesson, the students should be able to:

 explain the nature and role in the firm of different functional areas of management.

Concept Notes:
Human resource management is concerned with hiring personnel, retaining them, and
developing their capabilities and potentials.
Marketing management is concerned with identifying the target market to offer the
company’s products or services, satisfying the target market’s needs, delighting the target
market, developing strategies to attract more buyers, and earning a profit from the marketing
activities.
Operations management is concerned with the processes for transforming inputs into
final outputs, in the form of products of services and at the level of prices that customers prefer.
Financial management is concerned with determining the sources capital of a company,
the sourcing of funds to continually operate the business profitably, and the management and
control of financial resources to ensure efficiency and safety.
Material and procurement management is concerned with identifying the suppliers and
materials required for business, selecting the right suppliers by taking into account quality, price,
delivery schedule, and budget for production.
Office management is concerned with the day-to-day administration of the office to
ensure proper workloads for staff, maintain cleanliness and orderliness in the office, and project
a positive image of the company to clients.
Information and communication technology management is concerned with systems
maintenance, development, safety, and recovery during emergency situations.

Activity 1:
Direction: Explain the nature and role in the firm of different functional areas of management
using the diagram on the next page.

24 Organization and Management

 Human resource management Marketing management

Operations management Financial management

Materials and procurement management Office management

Information and communication

technology management

25 Organization and Management

Chapter 9

SPECIAL TOPIC IN MANAGEMENT: FAMILY BUSINESS ENTERPRISE

Learning Objectives:

At the end of this lesson, the students should be able to:

 explain how to start small-family business;

 identify the business legal forms and requirements; and
 appreciate the role of small-family business in an improving economic status.

Concept Notes:
An entrepreneur is a person who is able to identify a good business opportunity and takes
risks in bringing together the resources required and make them into a business project. To be
successful, he or she must be innovative and creative to spot unique opportunities, or to craft a
need in the market place. He or she is willing to take risks and to invest time, effort, and money
to put up his or her own business.
Small family businesses, which mostly comprise as sole proprietorships, are widely
common in the Philippines. They have an important role in the economy since they provide self-
employment and income opportunities for family members. They help create products and
deliver services that meet people’s needs.

Activity 1:
Direction: Answer the following questions.
1. What are the steps and documents required in registering the different legal forms of
business? Describe each.
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26 Organization and Management

 2. Why are small family businesses important to the economy?
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3. What are some challenges in managing family businesses?
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4. Describe the personal features of an entrepreneur.
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27 Organization and Management