11

ORGANIZATION AND
MANAGEMENT
LEARNER'S ACTIVITY SHEET
Quarter 2 – Week 8:
Explain the nature and role in
the firm of the following
Functional areas of
management
ORGANIZATION AND MANAGEMENT – Grade 11
Learner's Activity Sheet
Quarter 2 – Week 8: Explain the nature and role in the firm of the following
Functional areas of management
First Edition, 2021

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LEARNER’S ACTIVITY SHEET IN ORGANIZATION &

MANAGEMENT FOR QUARTER 2, WEEK 8 – Part I

Name:__________________________________ Grade & Section: ______________________

School: _________________________________ Teacher: _____________________________

Competencies: Explain the nature and role in the firm of the following
Functional areas of management: ABM_AOM11-IIi-39

I. Explore
Let us recall your knowledge on our previous lesson. Identify the
types of control methods and techniques used for measuring an
organization’s financial stability, efficiency, effectiveness,
production output, and organization members’ attitudes and
morale. Write your answers in your answer sheet.

1. _________________ is an approach or process of measuring a company’s

services and practices against those of recognized leaders in the industry to
identify areas for improvement.

2. ___________________ are methods of control are those which are used by

managers in performing other managerial functions, viz., planning,
organizing, staffing and leading (directing).

3. __________________ are techniques that are based on specific data and

quantitative methods to measure and correct the quantity and quality of
output.

4. _________________ is an estimate of income or expenses for a specific time

period (say, a year, a quarter, or a month); and the particular estimates it
contains become the standards against which future performances will be
measured and evaluated.

5. __________________ a control method that prevents problems in a firm because

managerial action is taken before the actual problem occurs

6. __________________ is a method that takes place while work activity is

happening. Example: Direct supervision or management by walking around.
7. __________________ is a control that takes place after the occurrence of the
activity. It is disadvantageous because, by the time the manager receives the
information, the problem had already occurred.
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8. __________________ refers to the measurement of the company’s marketing

performance in terms of the sales revenue generated, market share captured,
and profit earned.

9. __________________ is a systematic and integrated process.

10. __________________ is systematic monitoring at control points that leads to

change in the organization’s strategies based on assessments done on the said
strategic plans.

II. Learn
What is it?

To prepare you to become future leaders and managers, you must become
familiar with the functional areas of management – Human Resource Management,
Marketing Management, Operations Management, Financial Management, Material
and Procurement Management, Office Management and Information and
Communication Technology Management. In doing so, you will be ready for the local
and global challenges that you will inevitably meet in tomorrow’s workplace.

DIFFERENT FUNCTIONAL AREAS OF MANAGEMENT

A.HUMAN RESOURCES MANAGEMENT

HRM functions of management

Conducting job analysis

Job analysis is the process of obtaining information about jobs needed
to achieve the organization’s goal/objectives by determining the duties, tasks,
or activities involved in jobs. Job analysis data maybe gathered through
interviews, questionnaires, observation, and diaries. They may also be
collected through position analysis, and competency-based analysis.

Planning labor need and recruiting

It is important to determine the number and kind of people that may be
attracted for employment. External recruitment enables the organization to
fill job openings with special qualifications and to employ persons with new
knowledge, skills, values, ideas, and perspectives. Internal recruitment may
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also be done if management finds it more advantageous to promote or transfer

present employees to fill the available job openings.

Selecting candidates for the job

This involves the matching of people and jobs. Job specifications help
identify the person-job fit and identify their competencies, their knowledge,
skills, abilities, and other factors that may lead to excellent performance.

Orienting and training new employees

This is done in organizations so that they could contribute to the
achievement of their organizational goals/objectives. The phases involved
in this function are:
 conducting needs assessment of the organization, of the person, and of
the task/work;
 designing the training program by considering the institutional
objectives, the trainees’ readiness and motivation, and the principles of
learning;
 implementation of the training program for non-managerial employees
using on-the-job training, apprenticeship training, cooperative training,
internship, government training, classroom instruction, and e-learning.
 evaluating the training program in order to determine effectiveness,
considering reactions, learning, behavior of the trainees, return on
investment (ROI) or results, and benchmarking.

Managing compensation pay

Compensation or pay represents a reward received by employees in
exchange for their contributions to the achievement of organizational goals.

Providing incentives and benefits.

Incentives are generally based upon a pay-for-performance philosophy
which means that a performance “threshold” or baseline performance level
must be reached by an employee or group of employees in order to qualify for
incentive payments. Examples of individual incentives are bonuses, merit
pay, and sales incentives. Benefits, on the other hand, include social security,
workers’ compensation, health care and medical educational assistance,
vacation leave, sick leave, life insurance, retirement benefits, and travel
benefits.

Evaluating employees’ performance

Appraisal of employees is done on a regular basis to find out who are
doing their jobs well and who are not. The purpose of such evaluation are
administrative and developmental. Administrative purposes include: to aid in
decision-making regarding employee’s pay and promotions, transfers or
layoffs, which are based on their achievements and performance. The
developmental purpose of appraisal are the use of results for discussing
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employees’ strengths and weaknesses and for listing down performance

improvement needs.

Communicating.
To be effective, managers must have good communication skills, both
oral and written and information technology proficiently. This is necessary to
receive and disseminate pertinent information needed by all organization
members in carrying out activities that will lead to 7 the achievement of
company goals/objectives.

Developing employees
Programs should be designed to meet the special needs of employees
which will prepare them for future jobs or roles that they maybe be assigned
to do.

Building employee commitment

This is another important function of HR practitioner which will bind
them to engage in activities that will ensure the achievement of organizational
goal/objectives. This must be followed by employee accountability or
accepting responsibility for one’s actions.

Providing good working conditions

This includes giving a clear statement of the company’s mission, vision,
goals, and objectives; offering a good compensation and benefits package;
preparing a well-ventilated, welllit, and pollution free work area for employees;
and practicing ethical management styles.

Handling grievances and industrial relations

When differences arise between labor unions and management, these
are usually settled through the grievance procedure, wherein the feelings,
needs, and desires of both parties are aired.

IMPORTANCE OF HUMAN RESOURCES MANAGEMENT

Human resource management deals with the management of people – the

most important business resource. Money, materials, and information resources are
not capable of moving the business activities without the aid of the primary
performance drivers, human resources. Therefore, mastering the activities involved
in human resource management (recruitment, selection, 8 placement, training, and
development) is a must since all other management activities (planning, organizing,
staffing, leading, and controlling) could be done easily if organization managers
practice proper human resource management.
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B. MARKETING MANAGEMENT

As marketing expert Philip Kotler puts it, marketing management “is essentially
demand management.” This is because it involves “influencing the level, timing and
composition of demand” so that an organization may reach its goals. The marketing
management functions of management include the following:
Analyzing, planning, implementing, and controlling of goods, services, and
ideas to create exchanges that satisfy customer needs and company goals.
Controlling refers to monitoring of the marketing plan’s progress. Goals and
budgets are set for each month or quarter.
Management of marketing resources. Marketing resources include
salespeople, advertising, and marketing research.
a. Management of salespeople involves inculcating the establishment of
satisfying long-term relations with customers, suppliers, and distributors
in order to help their long-term preference and business.

Figure 1 Marketing Mix

b. Management of advertising. Although used less frequently than sales

calls in business markets, it is still important in marketing. It can perform
different functions such as: build awareness; build comprehension of the
good features of the product or service; remind prospective customers
about the product; provide the company’s contact information to
customers; and lead to customers to get in touch with sales
representatives.
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c. Management of marketing research. This involves identifying the seven

characteristics of good marketing research:
1. the principles of the scientific method are used;
2. research creativity is practiced by using innovative ways to solve
marketing problems;
3. multiple methods of research are used in order to adapt the method
of the problem
4. interdependence of models and data which recognize that data are
interpreted from underlying models;
5. value and cost of information is concerned with estimating the value
of the information against the cost which helps the marketing
research department determine which projects to prioritize;
6. healthy scepticism enables researches to show a healthy questioning
of the hurried assumptions made by the managers about how a
market works; and
7. ethical marketing research which is concerned with research that
benefits both the sponsoring company and the consumers; self
serving results may mislead consumers to buy the company’s
product which, in reality, is not good or effective.

IMPORTANCE OF MARKETING MANAGEMENT

Marketing management is important because it is the key to organizational

attainment, customer satisfaction, and profit gain. With major marketing
management processes – planning, execution, pricing, and promotion and
distribution of goods, services and ideas to create exchanges with target groups –
satisfying customers and achieving organizational goals will not be possible.

C.OPERATIONS MANAGEMENT
Business managers today focus on productivity, technology use, quality of
goods and services, customer satisfaction, and speed. They are conscious that they
need to innovate on their processes and activities in order to succeed in a highly
competitive globalized market. Because of these needs, the operations management
functions of management must include the following:
a. Overseeing the transformation process that change resources into finished
goods and services.
b. Improve of productivity and competitive advantage. Productivity measures
the efficiency by which inputs are turned into outputs. The basic equation
for productivity is:

Competitive advantage is the competency of an organization to

outperform a competitor or competitors.
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Figure 2. The-Plan-Do-Check-Act cycle is one of the methods that may help

managers improve business processes and production.

c. Managing the sequence of activities and information along the whole

course of the value chain. Proper management of these activities and
information results in the creation of finished products and services that
have value to customers.

IMPORTANCE OF OPERATIONS MANAGEMENT

Through the study of the essentials of operations management, businesses of

different types and sizes may increase their chances for survival and success in
today’s business environment which is characterized as highly competitive and fast-
paced in producing quality products and services.

D. FINANCIAL MANAGEMENT

Gaining profit is the main goal of businesses. To attain this goal, managers
must practice good financial management and this, of course, starts with
understanding the financial management functions of management. These
functions include:
Taking charge of the company’s financial policies and strategies,
investments, capital structures, and divided policies. Financial managers
of organizations must formulate sound financial standing plans that will
communicate broad guidelines for their financial decisions and strategies.
These plans include typical financial policies that address the organization’s
investments, capital structures and dividend policies. Investment policy
covers choice of product lines and capital projects. Capital structure policy
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covers a working capital policy (for the balancing assets and liabilities) and
leverage policy (for balancing long-term financing). Dividend policy considers
the use of either a systematic pattern of earnings retention or dividend
distribution.

Financial management and control. The management and custody of

the organization’s funds also include control which gives an assurance that
funds are properly utilized in order to provide for all the organization’s needs.

Financial planning. Financial planning is the process of setting

financial objectives and determining what should be done to accomplish
them. This includes financial forecasting, financial analysis, and financial
performance evaluation.

Financial forecasting involves:

1. Cash budgeting – a forecast of cash needs and sources
2. Profit planning – a forecast of revenues and expenditures
3. Balance sheet forecasting – considers future assets, liabilities,
and the organizations net worth position

Financial analysis involves:

1. Capital budgeting techniques – involves the assessment of
a long-term investment
2. Operating leverage analysis – critically examines cost-volume
profit relationship
3. Financial leverage analysis – studies the effect of debt on
income to the organization’s common stockholders.

IMPORTANCE OF FINANCIAL MANAGEMENT

Financial management facilitates the choice investments, financial policies,

and operating mechanism of the organization in order to effectively achieve its goals
and objectives. It includes maximizing its profits as well as those of its shareholders
and stockholders. In doing so, financial managers are able to maximize the wealth
of the organization and its shareholders/stockholders and satisfy other goals like
providing good customer service, minimizing bankruptcy risks, and actively
participating in present societal concerns.
To accomplish the abovementioned functions that give importance to financial
management in organizations, control techniques that measure the company’s
financial soundness, management effectiveness, production and service efficiency,
and human resource attitudes and morale must also be considered. These include
the following:
Break-even chart – is used by the organization’s financial management
planners and accountants to identify how the various sales levels affect the
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income and profits of the firm. The break-even point is the level of operations
which shows equal income and expenses incurred by the company.

Figure 3 . Break-even chart

Financial statements – include income statement, balance sheets, and

cash flow statements which are carefully analyzed.

Financial ratios – make use of the above-mentioned financial

statements to determine the formulation of a series of ratios that will, in turn,
determine of the company is stable or unstable.

E. MATERIAL AND PROCUREMENT MANAGEMENT

MATERIAL MANAGEMENT

Material management is a function, which aims for integrated approach

towards the management of materials in an industrial undertaking. Its main
objective is cost reduction and efficient handling of materials at all stages and in all
sections of the undertaking. Its functions include several important aspects
connected with material, such as purchasing, storage, inventory control, material
handling, standardization, etc.

SCOPE OR FUNCTIONS OF MATERIALS MANAGEMENT

Materials management is defined as “the function responsible for the

coordination of planning, sourcing, purchasing, moving, storing and controlling
materials in an optimum manner so as to provide a pre-decided service to the
customer at a minimum cost”.
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Categories of the Functions of Materials Management

1. Material Planning and Control Material planning is a scientific technique

of determining in advance the requirements of raw materials, ancillary parts
and components, spares etc. as directed by the production programme.

2. Purchasing is an important function of materials management. In any

industry purchase means buying of equipment, materials, tools, parts etc.
required for industry.

3. Store Management Stores play a vital role in the operations of company.

It is in direct touch with the user departments in its day-to-day activities. The
most important purpose served by the stores is to provide uninterrupted
service to the manufacturing divisions

4. Inventory Control or Management Inventory control is a planned

approach of determining what to order, when to order and how much to order
and how much to stock so that costs associated with buying and storing are
optimal without interrupting production and sales.

5. Standardization means producing maximum variety of products from a

minimum variety of materials, parts, tools, and processes. It is the process of
establishing standards or units of measure by which extent, quality, quantity,
value, performance etc., may be compared and measured.

6. Simplification. The concept of simplification is closely related to

standardization. Simplification is the process of reducing the variety of
products manufactured.

7. Value Analysis Value Engineering or value analysis had its birth during
the World War II Lawrence D. Miles was responsible for developing the
technique and naming it. Value analysis is defined as “an organized creative
approach which has its objective, the efficient identification of unnecessary
cost – cost which provides neither quality nor use nor life nor appearance nor
customer features.”

8. Ergonomics (Human Engineering) The word ‘Ergonomics” has its origin

in two Greek words Ergon meaning laws. So, it is the study of the man in
relation to his work. In the USA and other countries, it is called by the name
‘human engineering or human factors engineering.’ ILO defines human
engineering as, “The application of human biological sciences along with
engineering sciences to achieve optimum mutual adjustment of men and his
work, the benefits being measured in terms of human efficiency and well-
being.” The human factors or human engineering is concerned with man-
machine system. Thus another definition which highlights the man-machine
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system is: “The design of human tasks, man-machine system, and effective
accomplishment of the job, including displays for presenting information to
human sensors, controls for human operations and complex man-machine
systems.

9. Just-in-Time (JIT) Just-in-Time (JIT) Manufacturing is a philosophy

rather than a technique. By eliminating all waste and seeking continuous
improvement, it aims at creating manufacturing systems that is response to
the market needs.
According to Voss, JIT is viewed as a “Production methodology which
aims to improve overall productivity through elimination of waste, and which
leads to improve quality”. JIT provides an efficient production in an
organization and delivery of only the necessary parts in the right quantity, at
the right time and place while using the minimum facilities”.

Figure 4. Scope of Materials Management

PROCUREMENT MANAGEMENT
Procurement management is the strategic approach to managing and
optimizing organizational spend. It involves acquiring quality good and service from
preferred vendors within stipulated budget on or before deadline. The procurement
management process includes sourcing, requisitioning, ordering, expediting,
inspection, and reconciliation.

STEPS IN THE PROCUREMENT PROCESS

1. Identify which goods and services the company needs

2. Submit a purchase request
3. Assess and select vendors
4. Negotiate price and terms
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5. Create a purchase order

6. Receive and inspect the delivered goods
7. Conduct three-way matching
8. Approve the invoice and arrange payment
9. Recordkeeping

IMPORTANCE OF PROCUREMENT IN A BUSINESS

Procurement is important in business because it directly impacts a company’s

profit. For an organization to be profitable, the cost of procuring goods needs to be
less than the amount it sells those goods for, minus whatever costs are selling them.

Pillars of Corporate Strategy

 Corporate Identity
 Market Placement
 Company Capabilities
 Management Issues

F. OFFICE MANAGEMENT

Office management refers to the process of planning, organizing, guiding,

communicating, directing, coordinating, and controlling the activities of a group of
people who are working to achieve business objectives efficiently and economically.
Office management is not only necessary to business organization but also essential
to non-business organization. In modern internet society also, there is a need of
direction to the individual effort towards common purpose or objective.

ELEMENTS OF OFFICE MANAGEMENT

Elements of office management are termed as pillars of a building. If pillar is strong,

certainly, the building is also strong. Hence, efficient functioning of office
management is based on the elements of office management.

1. Personnel Office personnel are performing the office work. Generally, the selection
and placement of office personnel is carried on by the 22 office manager in small
organization. In large organization, staffing is carried on by the human resource
management department

2. Means refers to tools used to perform the office work. Means include pen, pencil,
eraser, paper, ink, office forms, typewriter, computer, printer, calculator, and the
like.
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3. Environment. The nature of business determines the environment of an office.

The various office works have to be carried on under a particular condition or
environment. A working environment is created and maintained for the smooth
performance of office work. It is the duty and responsibility of an office manager to
bring suitable environment by adopting various procedures and practice.

4. Purpose. The office personnel must be aware of the purpose for which a particular
work is carried on and the impact of such work on others’ performance. The office
manager teaches the purpose office personnel. If not so, the performance of office
work does not bring the most efficient and economical use of office resources and
achieve the objectives.

IMPORTANCE OF OFFICE MANAGEMENT

The following points highlight the importance of office management:

1. Achievement of goals Office management helps in increases office efficiency,
smooth flow of work, maintaining public relations, minimization of cost,
managing change and accepting the new challenges which help in
achievement of goals of the organization.

2. Increases office efficiency Office management focuses on office activities

and helps office in economical way.

3. Smooth flow of work Office management helps in performing efficient and

effective office work. It helps in proper planning and effective control office.

4. Public relations. There must be a good public relation of the organization.

The main purpose of public relation is to make the organization look
trustworthy to all people who deal with it in all its action. It helps in increasing
the goodwill of the organization.

5. Minimization of cost Office management guides the use of capital, natural,

financial, human and other resources effectively without leakage and wastage
which helps in minimization of cost.

6. Managing change Office management helps in implementation of plans in

right time and right way. But there may be change in resources, need,
technology, preferences and so on which make it necessary to bring about the
change in plans. Office management makes the office flexible which helps to
manage the change.

7. New challenges In an office, to achieve goals, many challenges should be

faced. It helps in improving the research and information system. It helps in
managing all the rigid matters.
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G. INFORMATION AND COMMUNICATION TECHNOLOGY MANAGEMENT

(ICTM)

Management in the 21st century is driven by information and

communication, and digital network. Computers quickly provide more information
to a greater number of people, groups, and organizations than ever before. Hence,
the study of the information and communication technology management (ICTM)
functions of management is relevant.

ICTM functions of management

Developing the organization’s hardware, software, and other computing and
communicating technology. Information Technology (IT) encompasses different kind
of technology, such as different types of hardware (e.g. computers and printers),
software (e.g. operating systems), and computing and communication technology
(e.g. telecommunications and management of databases).
Developing the organization’s management information system (MIS) tailored
to the needs of the firm’s unit. IT has developed management information systems
which gather, process, disseminate internal and external information to the
company on a timely basis order to support managers in their tasks.
Encouraging e-commerce through Internet use. Through e-business
strategies, the company gains competitive advantage over competitors. Common e-
business strategies involve business to business (B2B) and business to customer
(B2C) transactions. B2B transactions use IT and web portals to link companies with
members of their supply chains and those dealing with their resource supplies.

Figure 5. A comparison between business to business and business to customer

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IMPORTANCE OF INFORMATION TECHNOLOGY AND COMMUNICATION

TECHNOLOGY MANAGEMENT

The widespread use of ICT has brought about the emergence of a “knowledge-based
society” due to easy access to information at low costs through the Internet.
Management may use it for its different managerial functions. It may be used for
scenario planning or identifying future scenarios in the business environment,
which may need careful planning; decision-making through the use of information
generated by IT; aiding team work; facilitating productivity measurement; easy, low-
cost communication; worldwide selling through the Internet; and many others. It
may be said, therefore, that ICT has revolutionized the business world.

III. Engage
What I Learned

Compare and contrast the different Functional areas of management. Do

this on your answer sheet.

Similarities Differences

Human Resources
Management

Marketing Management

Operations Management

Financial Management

Material And Procurement

Management

Office Management
Information And
Communication
Technology Management
(ICTM)
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IV. Apply
What I Can Do

Directions: Answer the following questions. Write your answer in your activity
notebook.

Select one among the functional areas of management for your future path. Why
do you choose this path?
Criteria:
Content -----------------10 points
Organization -----------10points
Total ---------------------20 points

V. Post Test Multiple Choice.

Directions: Read each item very carefully. Choose the
letter of the correct answer.

1. In business, which sector would deals with all employee matters?

A. Financial C. Human Resource
B. Office D. Marketing

2. Which description best describes what a finance person does?

A. Checks the pricing of products are suitable.
B. Plans and monitors budgets so the business does not lose money.
C. Contacts possible new customers.
D. Installs new software.

3. Marketing management “is essentially demand management”. Who said it?

A. Philip Kotler C. McCarthy
B. Newman D. William J. Stanton

4. Which of the following is one of the functions of operating management?

A. Estimates the capital requirements of a business.
B. Helping to design and develop products and services.
C. Encouraging commerce through internet use.
D. Stimulates demands for the products of the company.
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5. Which of the following is one of the functions of Information and Communication

Technology Management?
A. Estimates the capital requirements of a business.
B. Helping to design and develop products and services.
C. Encouraging commerce through internet use.
D. Stimulates demands for the products of the company.

6. This is the process of obtaining information about jobs needed to achieve the
organization’s goals.
A. Job specification C. Job analysis
B. Job order D. Part time job

7. This is the actual sequence of activities that results in the production of goods
and services that have values for customers.
A. Value chain C. Productivity
B. Reengineering D. Value analysis

8. This a financial policy which considers whether to follow a systematic pattern of

earnings retention or dividend distribution.
A. Dividend policy C. Investment policy
B. Capital Structure policy D. Dividends

9. This is an electronic business which involves business to business (B2B) and

business to customers (B2C) transactions.
A. Blogging C. Digital marketing
B. E-commerce D. Auction online

10. One of the important functions of material management that involves buying
the equipment, materials, tools, parts etc. that are required for an industry.
A. Store management C. Inventory Management
B. Material planning and control D. Purchasing