INDUSTRIALIZATION and

HUMAN DEVELOPMENT
 Human Being
• Common fate:
> the reality of temporal, transient earthly existence
> the need to make lives good for the body and soul

• Essential Components:
>BODY
>INTELLECT
>EMOTION
 HUMAN DEVELOPMENT

Good Life

How?
1. Environment must necessarily be hospitable to
the development of the 3 essential components
2. Man must exert all efforts to make the
environment hospitable
 Essence of Human Development
man is able to nurture his essential and basic
components in an environment w/c he
strives to make as possible for his development

Man’s WELL-BEING is the purpose of human

development and
man is the MAIN SOURCE of such
development.
 2 intrinsic aspects of HD
1. Personal Growth
-concerned with 3 areas:
a. Satisfaction of Human Needs
>Basic needs
>Social Acceptance
>Self-Actualization
b. Sharpening of One’s Awareness
>of himself and his potential
>of others
c. Cultivating Communication/Interaction Skills
 2 intrinsic aspects of HD
2. Professional Growth
-is concerned with
a. Breadth – providing an array of generally
useful knowledge
b. Focus - harnessing potential to use
knowledge in practical applications
c. Flexibility to address a variety of problems
d. Continuing education to enhance
productivity
 CONTEXT of HD
Component 1: That man is both the means and the end of
development.

Component 2: That industrialization is basically an effective and

efficient input- output system usually managed by
human beings.

Component 3: That the nature of the workplace and the design

of the work in organizations engaged in industrialization have a
profound influence of human development.

Component 4: That the benefits or frustrations experienced by

human beings are reflected in career systems, reward systems and
manpower dev’t/training programs

Component 5: Values/assumptions
 INDUSTRIAL DEVELOPMENT
>concerned with the effective and efficient supply of
scarce resources, and the consequent output of
useful products

Industrial Activities covers the following areas:

1. The search for and the use of scarce resource inputs
2. The allocation/conversion process of these
resources
3. Useful products/outputs
 Participation of Human Beings in
Organizations
To make themselves economically viable, human
beings become members of any organizations.

For human beings to develop as members of an

organization, adequate factors must be considered:

1. Make the workplace a hospitable environment

2. Design the work itself that will challenge the person
to utilize their full potentials as human beings
3. Provide monetary and monetary reward
systems to fulfill the needs of the workers
4. Design a career system for upward mobility,
usually based on merit
5. Provide a continuing training
 THE ROLE OF TOP
MANAGEMENT
The Importance of Company Policy
Explain the statement below by comparison.

CHIEF EXECUTIVE SHOULD BE LIKE A PILOT OF A

PLANE.
 Like a Pilot, a Chief Executive must…

• be familiar with the plane and the

interrelationships among its parts
• set to it that the craft operates in the most
efficient manner
-the operation of the aircraft is not an end
itself
• bring the passengers to their desired
destination SAFELY
 Why study Business Policy?
1. We must know and understand the policies
and goals of the organization.
-CENTRAL PURPOSE
2. Must have a sense of mission, character
and importance of the company as a whole

If an individual doesn’t know the larger

purpose for which he serves, he cannot
serve it well.
 Responsibilities of the CEO
1. Elaborate the major policies of a firm with the help
of the BODs
2. Define the objectives of the firm
3. Develop strategies and the long-range plan for
achieving these objectives
4. Develop an organization which most efficiently
carries out the company’s strategic plan
5. Must develop the operating policies which ease the
burden of decision-making to carry out the plan
6. Involve in controlling the operations of the firm and
in problem-solving
 DEFINITIONS
1. Major Policy/ Company Policy
-deals with the firm fundamental nature, its
identity, and the direction in which it is expected to
move
-is it similar with rules?
2. Objectives/Goals
-specify, usually in quantitative terms, where the
firm is expected to be at some time in the future
- example: 20million sales, 10% increase
 DEFINITIONS
3. Strategy
-approach develop to achieve the objectives
-defines in detail how the firm is to get from where it is now to
where the objective state it should be at some time in the
future
-most critical part of a long-range planning
4. Operating Policies
-guide for decision-making
-provides a framework within which management can make
decisions that are consistent in themselves and are in
accordance with the strategic plan and objectives
-example: programmed and Nonprogrammed decisions
 MAJOR POLICIES OF AN ENTERPRISE

Often, major policies are in the form of “

statements of purpose” and gives guidance and
direction to the firm.

Example: “ This company will be one of the

leading firms in the manufacture of all types of
textiles and eventually of ready-made clothing.
Full ownership shall remain in the hands of
members of the family.”
 MAJOR POLICIES CAN BE STATED IN TERMS
OF:
1. Maximize profits or minimize losses
2. The products and/or services the company will
produce and sell
3. Anticipated position within the firm’s industry
4. Concern of the geographic location
5. Product quality for which the company will be
known
6. Ownership
7. Degree and type of social responsibility
 MAJOR POLICIES
-defines the character of the firm
-arrived at only after careful study, clear
thought, and considerable discussion
-once established, they should not be changed
lightly but can’t be considered as immutable
-review it periodically (3 to 5 years)
WHAT TO TAKE ACCOUNT IN MAKING MAJOR
POLICY?
1. Characters or personalities of the owners
2. Firms’ resources
- plant, equipment, worker’s skills,
management capability and capital
3. Possibility of changing resources
4. External environment
5. Projected changes in the external
government
TOTAL ENVIRONMENT OF THE
FIRM
The environment in which a firm operates
consists of a rich kaleidoscope of
CULTURAL ,
POLITICAL , and
ECONOMIC factors.
- a combination of Constraints and
Opportunities within which the internal
make up of the firm impinges on it
Remember!

Every businesses’ strategy is for

“GETTING FROM WHERE WE ARE NOW

TO WHERE WE WANT TO BE.”

How to achieve this?

Top Management should…
1. Be cognizant of the firm’s capabilities as well
as weaknesses
2. Understand where the firm stands at all
times in relation to its environment knowing
that all are subject for changes

Old Saying says: “ The only things that we are

certain of are DEATH and TAXES.”
CHANGES
usually lie outside the firm’s sphere of
influence

now the most effective and best laid

plan is that which

ANTICIPATES and WORKS TOWARD

such CHANGE
CHANGES
also takes place within the firm itself
but only on those areas where
top management has control over:

Financial Structure , physical plant/factory,

and capabilities of its management and its
workers
Factors that could affect the management of
a firm
1. EDUCATIONAL
-integral part of the environment
-concerns on the percentage of literacy and
educational levels that may affect:
a. Marketing approach of the product which the
firm is to produce
-media and techniques
-tastes and preferences
Factors that could affect the management of
a firm:
b. The type of workers and managers the firm
will be able to hire
-language/communication problems
-more supervising to do
-convey instructions orally
Characteristics of being illiterate
 tend to be sick more often
 (society) less capable of supporting a stable
government
Contributes more to the incline of business
operations toward
INEFFICIENCY

-source: Comparative Management and Economic Progress by Farmer and Richman

How to answer this issue?
There is little the individual firm can do to affect
the external educational environment namely:
 Provide literacy and technical training/s
 Supervisory training (one-on-one)
 Management development courses
Therefore

the key to strengthen a firm’s ability to

achieve its goals is

PERSONNEL
DEVELOPMENT
Factors that could affect the management of
a firm:
2. SOCIO-CULTURAL
-influence both the firm’s external environment as
well as its internal system
DIMENSIONS OF CULTURE:
-credits to Geert Hofstede
1. Individualism
– extent that people in a culture define
themselves primarily as individuals rather than as
part of one or more groups
 DIMENSIONS OF CULTURE
2. Collectivism – characterized by tight social framework
in which people tend to base their identities on the
group where they belong
3. Power Distance/ Orientation to Authority
-extent to which people accept as normal an unequal
distribution of power
4. Uncertainty Avoidance/Preference for Stability
-extent to which people feel threatened by unknown
situations and prefer to be in clear and ambiguous
situation
 DIMENSIONS OF CULTURE
5. Masculinity/ Assertiveness/ Materialism
-extent to which the dominant values in a society
emphasize aggressiveness and the acquisition of
money and other possession
6. Long-term Orientation – includes forecasting on the
future, working on projects that have distant payoff
7. Short-term orientation – more oriented toward the
past and the present and includes respect for
traditions and social obligations
4 SOCIO-CULTURAL FACTORS
1. The legacy of the frontier –a spirit that has
fostered a sense of opportunity
2. Faith in business and in individual
3. Belief in Change
4. Idea of competition
Remember:
Many management principles, techniques and
practices which are effective in one culture cannot
easily be transplanted into another culture.
 Factors that could affect the management of a firm:

3. ECONOMIC
a. Market Size - is the total number of likely buyers of product or service within a given
market.
b. Central Banking system and monetary policy
c. Fiscal Policy - is concern with the level of government spending as well as the taxing
system.
d. Economic Stability
e. Organization of Capital Markets
f. Factor Endowment - is commonly understood to be the amount of land, labor, capital, and
entrepreneurship that a country possesses and can exploit for manufacturing.

g. Social Ahead Capital

-availability and quality of power supplies, water, communication systems, transportation,
warehousing etc.
h. Competition
Factors that could affect the management of
a firm:
4. ADMINISTRATIVE and POLITICAL
a. Relevant legal rules of the game
-general business law
-labor law
-tax law
b. Defense Policy – in terms of trading and purchasing policies
c. Foreign Policy – in terms of quotas, foreign exchange and tariffs
d. Political Stability – changes in leadership
e. Political Organization – type of organization, degree of
centralization or decentralization
Factors that could affect the management of
a firm:
5. International Factors
a. View toward foreigners – the general attitude
toward non-nationals
b. Import-export restrictions
c. Relevant legal rules for foreign business
d. Power of economic bloc grouping
HISTORY OF STRATEGIC MANAGEMENT
Strategic Management originated sometime in
the 1950s and 1960s.
Alfred Chandler
-recognized the importance of coordinating
the various aspects of management under
one umbrella strategy
-made Strategy and Structure in 1962 which
showed that a long-term properly coordinated
strategy is important to give a company
the needed structure, direction, and focus
Philip Selznick (1957)
-introduced the matching of the
organization’s internal factors and the
external environmental circumstances

Igor Ansoff (1965)

-he developed the concept of gap analysis*
*explained the current situation of a
company and where it would like to be
in the future
-also developed a strategy grid
Peter Drucker
-he emphasized the importance of objectives
(Management by Objectives)
MBO allows the organization to monitor its progress from
top to bottom.
-he stressed the importance of intellectual capital
Ellen-Earle Chaffee
-stressed that strategic management should be
aligned with the business environment
-complex, thus allow to adopt to changes
GROWTH AND PORTFOLIO THEORY
Profit Impact of Marketing Strategies (PIMS)
-a continuing study on strategies that started in
1960
-spanned for 19 years of learning the effects of
market share
- a link between profitability and strategy
-bigger market share led to higher profits
Niche Marketing
- niche can result in very high returns
-concentrating all marketing efforts on a small but specific and
well-defined segment of the population
-proved by Schumacher (1973), Woo and Cooper (1982) ,
Levenson (1984) and Traverso (2002)
Portfolio Theory
-developed by Harry Markowitz
-propagated the concept that a broad portfolio of
financial assets could reduce risk exposure of companies
-in the ‘70s, other theories extended it to operating
division portfolios
 THE RISE OF MARKETING MANAGEMENT
(1970s)
Product Orientation
-at the height of capitalism
-key requirement is a product of high quality
-a product is produced then sold to consumers
Sales Orientation (1950s and 1960s)
-the concentration was the art of selling
-after a product is produced, a high caliber
sales force can sell it
 THE RISE OF MARKETING MANAGEMENT
(1970s)
Marketing Orientation
-theorized by Theodore Levitt
-business should start with the customers
instead of producing the product first before
selling it
-a company should find out what they
want and produce it for them
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
Practices that lead to the success of the Japanese:
1. There was high employee morale, dedication and loyalty
2. Costs were lower including labor costs
3. Government policies favor businesses
4. After WWII, Japan became a highly productive and capital-
intensive organization
5. Exports prevailed
6. There was superior quality control
TOTAL QUALITY CONTROL
-W. Edwards Deming
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
7S
-a superior management technique

STRATEGY
-embracing the role of corporate
STRUCTURE
culture, shared values and beliefs in the
success of an SYSTEMS organization
-had long-term plans than the
SKILLS
Americans STAFF
STYLE
SHARED VALUES
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
Kenichi Ohmae
-The Mind of the Strategist
-reiterated that a strategy should not be too
analytical but should be more of a creative art
-a combination of intuition and flexibility
-in contrast to a step-by-step
process and procedures
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
8 keys to succeed according to Tom Peters and Robert Waterman
a. Customer Focus – the company should know and
understand the customers
b. Action-oriented – the company should implement the
strategies not just mere paperwork and plans without action
c. Entrepreneurship- the company should exude an
entrepreneurial spirit: INNOVATE and CREATE
d. Simplicity – not make things complicated
e. Stick to what the company knows best
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
f. Value-oriented – management advocates
corporate values throughout the organization
g. People-oriented – the company should
respect and motivate its people and in turn,
they will be productive at work
h. Centralize and Decentralize – the company
centralizes its control but also allows
autonomy in each business unit
 THE RISE OF JAPANESE-ORIENTED
MANAGEMENT STYLE IN 1970s
Kaizen
-a system of continuous improvement
-introduced by Masaaki Imai
- introduced the 5S* of lean manufacturing
*a tool in organizing the workplace in a
clean, efficient and safe manner to enhance
productivity, visual management and to
ensure the introduction of standardized working
 5S
Seiri Sort (Classify)

Seiton Straighten(Simplify)

Sweep (Clean and

Seiso Check)

Standardize Seiketsu
(Stabilize)
Shitsuke
Sustain
 THE COMPETITIVE EDGE
Strategic Architecture Concept
-introduced by Gary Hamel and C.K. Prahalad
-leading with obsession
-introduced the concept of Core Competency*
*a detail of what the company has or can
do better than its competitors
 THE COMPETITIVE EDGE
MBWA
-Management By Walking Around
-conceptualized by Dave Packard and Bill
Hewlett
-visiting not only customers but also
employees and suppliers
 THE COMPETITIVE EDGE
3Gs of Honda
- a similar concept of MBWA

Ac Ac A
Pla tual Sit ctu
Th tual ua al
ce ing tio
n

Genba Genbutsu Genjitsu

 THE COMPETITIVE EDGE
3Ms of Toyota
-collectively describe wasteful practices to be
eliminated
1. Muda – Waste
2. Muri – Overburden
3. Mura - Unevenness
 THE COMPETITIVE EDGE
Michael Porter’s Theories:
a. Five Forces Analysis
b. Generic Strategies
c. The Value Chain
John Kay’s Value Chain
-a company should have 3 capabilities:
Innovation
Reputation
Organizational Structure
 THE COMPETITIVE EDGE
Positioning Theory
-popularized by Al Ries and Jack Trout
-crafting a strategy that would make the brand
or product in the minds of the consumers

Positioning: The Battle for Your Mind

in 1979
 THE COMPETITIVE EDGE
In 1989, Richard Lester identified seven best practices that a
company needs to adapt:
1. Continuous improvement in cost, quality, service and
product innovation
2. Breaking down organizational barriers between departments
3. Eliminating layers of management to make it simpler
4. Closer relationships with customers and suppliers
5. Intelligent use of new technology
6. Global focus
7. Improving Human Resource skills
 THE COMPETITIVE EDGE
In 1997, Arie de Geus identified four key traits of companies to survive:
1. Sensitivity to the business environment
-the ability to be attuned with the forces in the environment
2. Cohesion and Identity
- the ability to build a company with shared vision and purpose
3. Tolerance and decentralization
-the ability to build relationships among the employees
and strategic business units
4. Conservative financing
-the ability to handle financial matters well
 MILITARY THEORISTS
Philip Kotler
-a marketing guru and the author of Marketing
Warfare Strategies
>type of strategies, used in business and
marketing, that try to draw parallels
between business and warfare and then apply
the principles of military strategy to business
situations
 Marketing Warfare Strategies
1. Offensive Marketing Warfare Strategy
-use to secure competitive advantage
2. Defensive Marketing Warfare Strategy
-use to defend competitive advantage
3. Flanking Marketing Warfare Strategy
-operate in areas of little importance to the enemy
4. Guerilla Marketing Warfare Strategy
-attack, retreat, then hide
 Strategic Change
In 1970, Alvin Toffler believed in the power of
making the change in order to survive.
He didn’t succumb to complacency and instead
explained what changed can do to a company
to survive.
Strategic Decay by Gary Hamel
-believed that changes are needed no
matter how powerful existing strategies are
 Strategic Change
Strategic Window by Dereck Abell
-stressed the importance of time in both the start and end of
a particular strategy
Strategic Drift by Charles Handy
-a gradual and transformational change which is a sudden
shift caused by unforeseen changes in the environment
Strategic Inflection Point by Andy Grove
-it is where a new trend is indicated
Strategic Tipping Point by Malcolm Gladwell
-it is where a trend takes off
 Strategic Change
Strategic Planning with 5 types of strategies by Henry Mintzberg
1. Strategy as Plan
-direction, guide, course of action
2. Strategy as Ploy
-a maneuver intended to outdo a competitor
3. Strategy as Pattern
-a consistent pattern of past behavior
4. Strategy as Position
-location of brands, products or companies within the
boundaries of consumers
5. Strategy as Perspective - determined by a master strategist
 Information Technology Oriented
Strategies
Learning Organization by Peter Senge and Arie de Geus
-stressed the importance of the use of information in the success of the
organization
-components:
1.Personal Responsibility, self-reliance and mastery
-always crucial to face problems
2. Mental Models
-need to explore the individual mental capacities of each one in the
organization
3. Shared Vision – vision are cascaded and communicated to all employees in
the organization
4. Team Learning –employees learn through teams
5. Systems Thinking (Synergy)
-looking at organization as a whole rather than per individual employee
 Information Technology Oriented
Strategies
Intellectual Capital by Thomas Stewart
-describes the investment of the organization
in knowledge
-comprises of:
a. human capital
b. customer capital
c. structural capital