ORGANIZATION AND MANAGEMENT entrepreneurial ventures.

This entrepreneurial
QUARTER 4 LECTURE procedure involves the following steps:

LESSON 8: SPECIAL TOPICS IN MANAGEMENT 1. Formulate the business vision and mission
statements. The business vision of the
SMALL BUSINESS MANAGEMENT AND organization provides a picture of where the
ENTREPRENEURSHIP entrepreneurial venture is headed and what the
 Entrepreneurship – innovative, creative, risk- organization can become in the future. Its
taking, growthoriented behavior that brings mission states the basic purpose and scope of
new opportunities for individuals or the organization’s operations.
organizations to start new businesses and to 2. Segment of the Market. A business cannot
produce new products or services that are entertain or offer goods and services to society
beneficial to society at the onset in a large scale. It first must identify
 Entrepreneurial ventures – organizations that a specific segment or group of people it may
persistently pursue opportunities and are cater to or what is called a target market. The
characterized by creative, innovative activities basis for segmenting the market to find the
that have service, growth, and profitability as target market may be geographical,
their principal goals demographical, psychographical, or behavioral.
 Small business – a business that has fewer than - Geographical. Market segmentation
100 to 500 workers (depending on the may be used on location (city,
prevailing commercial law in a particular province, region, or country; north,
country), independently owned, operated, and south, east, or west).
financed; not always entrepreneurial in - Demographical. Demographical bases
orientation and does not dominate its industry; consider population and can further be
capital is low but capable of producing goods or extended to include age, income,
rendering services designed to satisfy particular education, marital status, and other
needs of customers related information.
- Psychographical. Psychographics looks
Innovative, creative, and intuitive thinking in into people’s interests, values,
business management helps entrepreneurs come up attitudes, opinions, and lifestyles.
with great ideas or new strategies that may lead to the Behavioral. Segmentation may be
successful achievement of their goals—service, growth, based on people’s behavior toward
and profitability. The same entrepreneurial mindset is purchasing or spending, or toward a
valuable in today’s highly competitive and ever- product or service.
changing business world. It answers the need for the 3. Find the Target Market. After getting enough
creation of new products and the development of new information about the overall market, the firm
services for society’s benefit. can use statistical tools to analyze this
In addition, entrepreneurship also has socio- information and help them decide which part of
economic contributions. It provides employment, not the whole market they can serve using their
only to the entrepreneur, but to fellow Filipinos. Thus, resources in the best possible manner. That part
helping ease unemployment. Entrepreneurship provides of the market which the company is willing and
additional sources of taxes for the government, hence capable of servicing is known as the target
contributing to Philippine economic progress. market of the business.
4. Understand the Environment. Why should we
The Entrepreneurial Procedure study the environment? Things around us are
not permanent and everything changes. These
Business opportunities are waiting for people who
changes greatly impact business. In some
have creative and innovative minds. However, following
situations, businesses control the consequences
a systematic process is crucial in the pursuit of
of change, however, this is not always the case.
When businesses can no longer control the
 situation, they are left with no option but to • operation – refers to descriptions of
change in consideration of the environment manufacturing and service methods, supplies
surrounding them. Environmental factors that and suppliers, and control processes
affect business may either be internal or
• management and ownership – refer to
external.
identification of owners and administrators
Internal factors are environmental
• financial data – includes capital needs,
factors within the company and can be
financial projections for one to five years,
controlled. These include the employees,
available funds, and possible loan services
management, physical facilities, and so on.
On the other hand, external factors have • time table – refers to estimated completion
two types: microenvironment and dates of ventures
macroenvironment. Microenvironment
includes customers and suppliers, whereas Business planning is important as it
macroenvironment includes economic, helps minimize business risks and expenses
sociocultural, technological, legal, political, needed for the production of goods and
and natural factors, as stated by Kotler carrying out services. It may also determine
(1997). financial requirements and programs of
activities in advance.
5. Develop the Business Plan. We can define a
business plan as the roadmap which the 6. Implement and Monitor the Business Venture.
business must follow utilizing the resources at This step follows after careful business planning.
hand while keeping the environment in mind. A Choosing the right people to work with and
business plan has the following contents: considering the correct timing for the business
implementation are important. Monitoring the
• executive summary – contains the overview of business venture’s progress is also a must to
the business and its major plans check if its implementation is proceeding in the
right direction or if modifications are needed
• environmental analysis – includes study of
along the way.
internal and external organizational
7. Maximize the Utilization of Business
surroundings
Resources. Consider the basic ways of financing
• industry analysis – includes study of trends in business ventures such as debt financing by
the economy, legal requirements, and possible taking loans from reputable institutions and
risks equity financing which exchanges ownership
shares in return for an outside investment if
• market analysis – includes analysis of market
additional capital is needed. Human resources
size, business competitors’
and other material or physical resources must
strengths/weaknesses, and short-term sales
also be fully utilized. Aside from the procedure
goals
mentioned above, business success is also
• company description – mentions ownership, determined by certain traits that are required of
mission and vision of the organization, an entrepreneur. Some of these entrepreneurial
registration legalities, etc. characteristics are listed below. Entrepreneurs
must be:
• marketing and sales activities – strategies for
distribution, promotion, and pricing of Creative and Innovative. Entrepreneurs
products/services must have a creative and innovative mindset
and must think out of the box to survive
• products and services – refer to descriptions competition and at the same time have
of good/services and their unique features competitive advantage over rival organizations.
These are the characteristics that differentiate
entrepreneurs from businessmen.
 Good planners. Planning, on the part of the Updated/Well-informed. To ensure
entrepreneur, bridges the gap between where achievement of entrepreneurial goals,
they are and where they want to go. In other entrepreneurs must continuously seek
words, it shows the right business direction that important, up-to-date information regarding
would lead them to success. their market customers, rivals in business, and
suppliers. Expert opinion must also be sought to
Customer-oriented. Entrepreneurs must be
be well-informed.
customer-oriented to shape their market
offerings and create value in their customers’ Team players. Entrepreneurs must be able
minds. to work well with others. In unity, there is
strength; good coordination with others will
Open-minded. Entrepreneurs must always
ensure business success.
be open and willing to entertain the suggestions
of team players/employees to encourage the Knowledgeable. Entrepreneurs must have
generation of ideas which may be beneficial expert knowledge about the product or service
when implemented. Learning is a never-ending they want to sell, their competitors, and
process and entrepreneurs can also learn by local/regional/ national markets so that they
being receptive to the ideas of people around will have better chances of succeeding.
them.
Risk-takers. Entrepreneurs are not afraid of
Flexible. Entrepreneurs must be flexible in risks and are ready to meet business challenges.
order to adapt to changing environmental However, they prefer calculated risks since they
conditions. Flexibility comes in relation to are aware that business undertakings may
changing the strategies, policies, and utilization result in either success or failure, profit or loss.
of business resources.
FAMILY BUSINESS ENTERPRISE
Persistent. There is no shortcut to success,
 Family business – a business owned and
and that is why it takes time to attain the
financially controlled by members of a family
objectives of the company. In the long run,
 Enterprise – any projected task or work; an
things will not always fall under the control of
undertaking
the business managers. During times of change
and hardship, the entrepreneur must not give Globally, there are many successful family
up, especially when things are not favorable for businesses run by entrepreneurs who have different
business. Entrepreneurs must be persistent stories to tell and different formulas for their business
until their goals are achieved. success. However, they possess some common
characteristics such as creativity, innovativeness, service
Confident. Entrepreneurs must be
orientation, and the ability to take risks and do hard
confident about their own abilities, together
work, among others. Slowly, but surely, these
with the abilities of their other team members.
characteristics paved the way toward their success in
They must think positively and believe in their
the world of business. The stories in this chapter feature
capabilities and they must not doubt that they
ordinary family members who, despite of starting with
can accomplish the most challenging tasks at
meager capital, have persevered to produce
hand.
competitive products or render good services that
Organized. Entrepreneurs must be well- brought them success in their chosen business
organized when it comes to all activities of the endeavor.
business. A well-organized entrepreneur makes
STARTING A BUSINESS: LEGAL FORMS AND
sure that their organizational structure
REQUIREMENTS
furnishes an environment where individual
performance, both present and future,  Business registration – a government
contributes effectively and efficiently to group requirement that orders new business owners
endeavors. to furnish government agencies with necessary
 information prior to the legal operation of their The cooperatives’ original purpose was to
business organization supply those involved with goods or services at
 Single proprietorship – a business owned by lower costs compared to those bought from
one person only retailers. Later types of cooperative have emerged
 Partnership – a business formed when two or that include farmers, producers, and credit
more partners formally agree to be joint owners cooperatives. A group of officers, called board of
of a business directors and committees, headed by a chairman,
 Corporation – a business entity involving five or manage the cooperative’s activities. The
more persons owning it cooperative office that runs the daily office work is
 Cooperative – a group enterprise made up of usually hired. The cooperative’s life is not affected
several traders, consumers, or producers who by the death of any of its members nor by the
are interested to produce or trade as a group selling of a member’s shares. It can, however, be
dissolved by a majority vote of the board of
The legal form of business is determined by its
directors and a resolution signed by at least two-
ownership or proprietorship. A business may be a
thirds of the general membership.
single proprietorship, a partnership, a corporation,
or a cooperative. WHY AND WHERE SHOULD A BUSINESS BE
REGISTERED?
In single or sole proprietorship, the owner and
the business are considered as one, meaning the Businesses or entrepreneurial ventures have to
owner’s income and the business income are one be registered in compliance to Philippine laws. Without
and the same and the business income is taxed as a proper registration in authorized government agencies,
personal income. Decision-making is the sole the business cannot operate legally. Registering also
responsibility of the owner and if the business gives credibility to businesses, hence, helping earn the
succeeds, he or she gets all the profits. If it fails, trust of customers, suppliers, partners, and other
then he or she suffers all the losses and must pay stakeholders.
whatever debts are incurred. The business ends
Registration documents have to be submitted to
upon the death of the owner or single proprietor.
the Department of Trade and Industry (DTI) and the
In a business partnership, the resources Securities and Exchange Commission (SEC) for
(money and other assets) and talents (skills, commercial registry; barangay office for clearance and
experience, and management expertise) of all securing a community tax certificate; city mayor’s office
involved may be pooled together. All partners share for mayor’s permit and license to operate; city or
the profits equally, unless otherwise specified in national government agencies for sector-specific
their partnership agreement. licenses/permits; Bureau of Fire Protection (BFP) for
fire safety clearance; Bureau of Internal Revenue (BIR)
A corporation is registered and is recognized by
for taxation purposes; Pag-IBIG Fund (Home
law as a “legal person” that has legal rights and
Development Mutual Fund) office for employees’
responsibilities, can sue or be sued in court, can
housing needs/security; and the Department of Labor
own and sell properties, and can transact or enter
and Employment (DOLE) for labor statistics.
into contracts. Corporation ownership is divided
into units known as shares of stocks and owners of DIFFERENCES IN THE REGISTRATION OF THE LEGAL
these are called stockholders. A board of directors, FORMS OF BUSINESS
elected by the stockholders on a regular basis,
Future entrepreneurs must contact the
manage the corporation which is run according to
government agencies concerned regarding their
terms specified by their by-laws and articles of
updated or revised rules and regulations as well as the
incorporation. The corporation’s life does not end
latest legislations that may have to be complied with.
with the death of a stockholder or by the selling of
the stocks of a particular stockholder.
 the Cooperative Development Authority
(CDA)
 submission of four copies of previously
prepared articles of cooperative
agreement together with the bonds
Requirements and Procedures Involved in paid for accountable officers
Registration of Different Legal Business Forms  submission of four copies of the
1. Single Proprietorship Registration cooperative’s by-laws
 business name registration with the DTI  payment of registration fee prescribed
 submission of two recent 2 × 2 ID by the CDA
pictures  release of approved registration on
 submission of Filipino citizenship proofs specified dates
(if applicant is a naturalized Filipino Advantages and Disadvantages of the Legal Forms of
citizen or if applicant is a Filipino with a Business
non-Filipino sounding family name);
examples of needed evidences are birth
certificate, passport, and voter’s ID,
among others
 Payment of application fee or
processing fee plus documentary stamp
amount
2. Partnership Registration
 filing of the previously prepared
partnership agreement by two or more
applicants with the SEC
 payment of the filing fee
 valuation of the application by the
lawyer and staff of the Corporate and
Legal Department of the SEC
 release of the approved registration
(within 15 to 30 days).
3. Corporation Registration
 filing of the previously prepared articles
of incorporation and by-laws and bank
certification regarding stockholders’
shares of stocks with the SEC
 payment of the registration fee
 evaluation of the application by the
lawyer and staff of the Corporate and
Legal Department of the SEC
 release of the approved registration
(within 15 to 30 days).
4. Cooperative Registration
 submission of four copies of previously
prepared economic survey with a
general statement that describes the
cooperative’s structure, purpose,
economic feasibility, operation area, ******END******
and membership size, among others to