What is Management?

Management aims to attain the objectives and goals of the

organization which cannot be done individually. It is also the practice
of consciously and continually shaping organizations. It is the
science of making people and resource productive, with the aim of
creating product surplus. It is the process of planning, organizing,
directing and control.

What are the different management objectives?

1. Utilize materials and equipment necessary for its operation.
2. Develop highly motivated staff who are properly ocmpensated and
are working in a happy environment.
3. Ensure that goals and objectives of the company are achieved
with the least cost.
Distinguish efficiency from effectiveness
Efficiency refers to the relationship between inputs and outputs.
This is often referred to as "doing things right" and not wasting
resources. On the otherhand, effectiveness is concerned with the
completion of activities so that organizational goals are achieved.
This is referred to as "doing the right things", or doing those activities
which will help management reach its goals.

Who is a manager?
The term is widely used to the one who is responsible for directing
the activities of other people. Management process include
planning, organizing, staffing, directing and controlling.
THEORIES OF MANAGEMENT

1. ADMINISTRATIVE MANAGEMENT THEORY (HENRY FAYOL)

Henri Fayol (1841-1925) came up with the different management
principles as he believed that managers are made and not born.
Administrative Management focuses on the overall management of
an organization, emphasizing the role of managers as administrators
of the organization. He is the first one to systemize and broke down
into 14 principles. These are principles include:

1. Division of work
- division of work into specialized tasks, with specific duties
and responsibilities given to individuals
2. Authority
-authority of managers to delegate work and tasks to the
employees. The employers, in turn, are expected to comply and
exercise their tasks responsibly.
3. Discipline
-where expectations should be clearly set and violators of rules
must be punished
4. Unity of command
-where an employee should only report to one supervisor.
5. Unity of direction
-which means that the efforts of the employees are guided
toward the attainment of organizational objectives
6. Subordination of individual interest to the common good
-organization over the individual interests of employees
7. Remuneration
-efforts of the employees whoch should be systematically
 rewarded in line with the organization's mission and vision
8. Centralization
-role of all employees are clarified with emphasis on the
distinction between superior and subordinate roles
9. Scalar chain
-communication should be open within the chain of command
10. Order
-organization of jobs and materials must be done in an orderly
fashion
11. Equity
-fairness and order must be practiced to maintain employee
commitment
12. Stability of Staff
-actively promote employee loyalty to the organization
13. Initiative
-encourage employees to act on their own in support of the
oganization's objectives.
14. Esprit de Corps
-promote teamwork and the unity of interest between the
employees and the management.

2. SCIENTIFIC MANAGEMENT THEORY (FREDERICK WINSLOW

TAYLOR)
 Scientific management is a theory of management which studies
the application of scientific methods and principles for the purpose of
redesigning the work process to increase efficiency. Taylor believed
that management and labor had a common interest in productivity.
He used time study analysis and broke down each task into different
components and then identified the quickest method of performing
each component. He urged workers to surpass their previous
performances standards to earn more pay. He called this plan as
the differential rate system.

Principles of Scientific Management

1. There is a need for a development of a true science of
management so that the best method for performing tasks can
be identified.
2. The scientifc selection of workers
3. The scientific education of the worker
4. Intimate and friendl cooperation between labor and
management.

3. BEHAVIORAL MANAGEMENT ( ELTON MAYO)

This management theory came about because administrative

approach did not achieve sufficient production efficiency and
workplace harmony. The human relations movement came about
from an attempt to discover the social and psychological factors that
would create effective human relations. It focuses on the social
element in the workplace and cosiders the influence of interpersonal
relationships, social conditioning and group norms in determining the
performance of workers.
What are the different management levels?
These levels refer to the various managerial positions in the
organizational structure and are classified into top level, middle level
and lower level management.

Top Level Management

This may be composed of owners or stakeholders in big
companies. The top management develops strategic plans and
programs.
Middle Level Management
They are composed of regional managers, district supervisors
and department heads. They are the ones wh ocarry out the
operation of the business under the control and supervision of the
top management.
Low Level Management
They are the supervisory level or junior executives whose
functions are related to the immediately related to the operational
activities of the enterprise.

MANAGERIAL SKILLS

Whether at the top, in the middle, or low level management,

managers should possess the following key management skills:
1. Conceptual skills - it refers to the manager's ability to analyze a
particular stuation, identify new opportunities and resources, and
decide on the best strategies and courses of action.

2. Human skills - it include the manager's capacity to motivate, lead,

and control the behavior of his or her subordinates. A manager
should know how to effectively communicate, coordinate and relate
with his or her employees.

3. Technical skills - these are the specific competencies that a

manager should have in relation to the type of task assigned to him
or her. It is also related to the specialization of a manager needed in
a particular department, uni, or area where he or she is assigned.
ROLES OF MANAGER

Henry Mintzberg classifies these roles into three: interpersonal,

informational and decisional

Interpersonal roles are further classified into three: figurehead role,

leadership role and liaison role.
Informational roles are divided into monitor role, disseminator role
and spokesperson role.
Decisional roles are divided into entrepreneurial role, problem
solver, resource allcoator and negotiator.
SWOT ANALYSIS
-Analysis technique that is used to analyze the strengths,
weaknesses, opportunities and threats it faces.

STRENGTH
-What does your company do better than others?

WEAKNESSES
-What aspects of your company need to be improved?
OPPORTUNITIES
-What trends/conditions can positively impact your company?
THREATS
-What trends/conditions can negatively impact your company?

Example of SWOT ANALYSIS

MILK TEA SHOP

STRENGTH

Lots of flavor variants to choose

Longer shelf life
Great alternative for tea lovers
Lots of add-ons to choose

WEAKNESSES

Price
Add ons may affect flavor
Not suitable for diabetic people
Takes time to prepare
OPPORTUNITIES

Location
Currently in trend
Can be sold in different sizes
Feasible concept

THREATS

Brand competitors
may go out of trend anytime
beverage competitions
longer customer waiting time
 PEST ANALYSIS
- is a management method where an organization can assess
major external factors that influence its operation in order to
become more competitive in the market.

POLITICAL FACTOR
- It includes laws, regulations, and restrictions that may intervene
or affect the company's business.
Example:

Tax Reform Act of 1997

Local Government Code of the Philippines
Labor Code of the Philippines
Consumer Act of the Philippines

ECONOMIC FACTOR
- directly affect the capability of business to generate profits. It
includes economic growth, interest rates, exchange rates and
inflation rates
Example:

Inflation
Currency exchange rates
Economic stability
Natural Resources
Foreign Relations

SOCIAL FACTOR
-includes demographic aspects such as age, group affiliation,
religion. Focuses on information regarding their target market.
Example:

Culture
Economic status of target market
Trend
 Consumer personalities, ethics, attitudes

TECHNOLOGICAL FACTOR
- Technology is vital for competitive advantage, and is a major
driver of globalization. Includes research and development activites,
automation, etc.

using social media platforms

automation of work process
product innovations
internet and softwares

Example of PEST ANALYSIS

POLITICAL FACTOR

Must consider the taxation and manufacturing rules of each

country
 Must follow import and export laws as well

ECONOMIC FACTOR

Must target consumers with good purchasing power

Developing countries may be good opportunity for Nike

SOCIAL FACTOR

Need to target health-conscious people

Shoes and Apparel must be for health-conscious people along
with the sporty people

TECHNOLOGICAL FACTOR

Nike uses finest technology

Constant changes in the technology as well as opportunity as
well as threat
LOCAL BUSINESS ENVIRONMENT
The local business environment is driven by specific local
conditions and market characteristics. At the local level, businesses
compete for employees, resources from suppliers at a competitive
price, local advertising and marketing channels. Local businesses
are challenged by access to capital, levels of consumer spending,
overall health of the economy, ability to lease space and equipment
and usual weather. The controls, regulation, and taxes that are
placed by regulatory bodies affect profiatbility and business
sustainability.

INTERNATIONAL BUSINESS ENVIRONMENT

The international business environment is that which is outside

the Philippines and in different sovereign countries, with factors that
are distinct to the home environment of the organization and the
foreign country where the organization operates. Economic factors
have huge impacts on companies working in an international
business environment. A foreign country's monetary syste, inflation
and interest rate are considered when businesses are placed in
countries outside the Philippines. The political environment which
influences government legilation rules and regulations can be either
friendly or unfriendly to the business.

ROLE OF BUSINESS IN RELATION TO THE ECONOMY

The fundamental role of business has remained relatively
constant: providing the goods and services that people need or want.
What has changed dramatically over time are the expectations
placed on businesses. Boards of directors, management and
investors of large corporations are now expected to address an array
of social, economic and ecological challenges. Business derives its
social legitimacy and right to operate from the economic value it
creates for society at large, from its performance for investors and a
wider network of constituencies, its partnership with governments
and other agents in solving social problems and the trust its
leadership inspires in employees and society as a whole.

Business development is driven by profits. It focuses on markets,

creates businesses, orginates in private sectors, and answers to
investors. On the other hand, economic development is driven by job
creation. It focuses on geography. It attracts business and it
answers to the community.
FIVE STAGES OF ECONOMIC DEVELOPMENT

Walt Whitman Rostow (W.W. Rostow) was an economist in the

Lyndon B. Johnson administration from 1966-1969 who came up
with the five stages of economic development

1. Traditional society
This is an agricultural economy of mainly subsistence farming,
little of which is traded.

2. Pre-conditions for take off

Agriculture becomes more mechaniezed and more output is
traded. Savings and investment grow although they are still a small
percentage of national income (GDP). Some external funding is
required - for example in the form of overseas aid or perhaps
remittance incomes from migrant workers living overseas.
3. Take Off
Manufacturing industry assumes greater importance, although
the number of industries remains small. Political and social
institutions start to develop - external finance may still be required.
Savings and investment grow, perhaps to 15% of GDP. Agriculture
assumes lesser importance in relative terms although the majority of
people may remain employed in the farming sector. There is often a
dual economy apparent with rising productivity and wealth in
manufacturing and other industries contrasted with stubbornly low
productivity and real incomes in rural agriculture.
4. Drive to maturity
Industry becomes more diverse. Growth should spread to
different parts of the coutnry as the state of technology improves- the
economy moves from being dependent on factor inputs for growth
towards making better use of innovation to bring about increases in
real per capita income.
5. Age of Mass Consumption
Output levels grow, enabling increased consumer expenditure.
There is a shift towards tertiary sector activity and the growth is
sustained by the expansion of a middle class of consumers.
PLANNING
It is the process of assessing an organization's goals and creating
a realistic, detailed plan of action for meeting those goals. A
management plan takes into considereation short, medium and long
term corporate strategies.

STEPS IN THE PROCESS OF PLANNING

1. Identifying the problem

It involves the identification of the aim for the fulfillment of
which the plan is being formulated. If a new plan is required or
the modification of an existing plan could help in achieving these
aims.
2. Gathering information about the activities involved
An effective plan needs complete knowledge of teh activities
involved and their effect on other external and internal activities
3. Analsis of Information
This information is then analyzed minutely and the information
related with similar subjects is classified so that similar type of
data can be kept together.
4. Determining alternate plans
There are alternate plans available for the achievement of the
objectives and ingenuity and creativeness are required as some
plans are also developed at this stage.
5. Selecting the plan
At this stage, the plan which is acceptable to the operating
personnel is proposed. The adaptability and the cost of the plan
are also taken into consideration.
6. Detailed sequence and timing
Detailed like who will perform which activity under the plan
and the time within which the plan should be carried out is
determining in this step.

Progress check of the plan

The provisions are made for the follow up of the plan as the
success of any plan can be measured by the results only.
TYPES OF PLAN

1. STANDING PLANS
-Standing plans are composed of Policies, Procedures and
Rules.

Policy - is a standing plan that furnishes broad guidelines for

taking action consistent with reaching organizational objectives
Procedure - is a standing plan that outlines a series of related
actions that must be taken to accomplish a particular tasks.
Procedures outline more specific actions than policies do.
Rule 0 is a standing plan that designates specific required
action. A rule indicated what an organization member should or
 should not do and allows no room for interpretation.

2. SINGLE USE PLANS

- Single use plans are programs and budgets developed for
handling non-repetitive situations. They are developed and used for
specific purpose and probably will not be used again in the activity or
project.

Program - It is a single-use plan to carry out a special project

within an organization. The Project itself is not intended to
remain in existence over the entire life of the organization.
Rather, it exists to achieve some purpose hich if accomplished
will contribute to the organization's long term success.
Budget - It is a single user financial plan that covers a specified
length of time. It details how funds will be spen on labor, raw
materials, capital goods, information systems, marketing and so
on, as well as how the funds will be obtained.

3. CONTINGENCY PLANS
- They are also known as scenario plans and are used if
uncontrollable events occur. A manager must be ready for a backup
plan or emergency plan which is a contingency plan.
PLANNING TECHNIQUES AND TOOLS USED BY MANAGERS

1. FORECASTING
Forecasting is the process of predicting what will happen in the
future. There are two types of forecasting: Trend analysis and
Contingency Planning. Trend Analysis refers to a prediction which
uses progression of historical data. Time series forecasts predict
long term trends by looking into patters of historical data. Seasonal
variations estimate results based on different period during the year
while cycle patterns forecast the up and down nature of the business
cycle.

2. CONTINGENCY PLANNING
Contingency planning involves identifying alternative courses of
action that can be implemented, if and when an original plan proves
inadequate because of changing circumstances. There are two types
of contingency planning: Scenario planning and
benchmarking. Scenario Planning is a long term version of
contingency planning that involves identifying several alternative
future scenarios or states of affairs that may occur, and then making
plans to deal with each scenario should it actually
occur. Benchmarking is a technique that makes use of internal and
external comparisons to better evaluate current performance and
identify possible actions to improve the future.
STRATEGIC PLANNING
It is the process of choosing among strategies and changing them
to fit the needs of the organization. After choosing a grand strategy,
such must be translated into specific tactical and operational plans.

Tactical Planning corresponds and supports the grand strategy

and it connects the grand strategy with the operational strategy.
These includes adaptive strategies, Porter's competitive
strategies and Product's Life Cycle.
-Adaptive strategies emphasizes on the formulation tactical
plans for adjustment to changes in the external environment and
entering new markets.
 -Michael Porter four competitive strategies are summarized
as follows: low cost leadership, low-cost focus, differentiation
and focus differentiation.
-Product Life Cycle graphs the stages of marketability of a
product or service. The four stages include the following:
Introduction, growth, maturity and decline.

Operational Planning is a part of strategic planning that is

developed in the functional departments for achieving tactical plans.
It is also known as "Functional-Level Strategic Planning". Functional
strategies include the following: Marketing, Operations, Human
Resources, Finance and other functional strategies.

There are different actions that must be done in order to implement a

strategy.

Allocate responsibilities
Draft detailed action plans
Establish a timetable for implementation
Allocate appropriate resources
Hold individuals or groups accountable for the attainment of
goals
ORGANIZATION

An organization is an entity comprising multiple people, such as

an institution or an association that has a collective goal and is
linked to an external environment.
Organization is a process that integrates various types of
activities to reach goals and objectives. It is a process of
integrating and coordinating the efforts of men and material for
the accomplishment of set objectives.

ORGANIZING

Organizing is the function of management which follows planning.

It is a function in which the synchronization and combination of
human, physical and financial resources takes place. All the three
resources are important to get results.

STEPS IN ORGANIZING PROCESS

1. Identification of activities
All the activities which have to be performed in a concern have
to be identified first. For example, preparation of accounts, making
sales, record keeping, quality control, inventory control, etc. All these
activities have to be grouped and classified into units.
2. Departmentally organizing the activities
In this step, the manager tries to combine and group similar
and related activities into units or departments.
Assigning responsibility and delegating appropriate authority –
individuals who are assigned responsibility over the activities and
resources must be given authority to accomplish their tasks.

3. Designing the hierarchy of relationships

this requires determination of both vertical and horizontal
operating relationships of the organization as a whole

VOCABULATORY TERMS IN ORGANIZING

Unity of Command
It is a principle where each subordinate will have to report to only
one superior.

Unity of Direction
This is the line of authority from the top to the bottom of the
organization and is known also as the scalar principle.

Division of Labor
Under this, there are specialized jobs available for employees. They
are grouped together and are headed by one person.
Coordination
It is the process of coordinating and integrating tasks and resources
to meet organizational objectives.

Responsibility
is the obligation to carry out required activities to accomplish
objectives.

Accountability
is the assessment of how well individuals meet their responsibility.
A formal organizational structure defines the working relationships
‘between the organization’s members and their jobs. This is
illustrated by an organization chart.

What is an organization chart?

It is a diagram that defines or illustrates the organization’s
management hierarchy and departments including the organization’s
members and their jobs and working relationships.

What are the features of an organization chart?

An organization chart has the following features: chain of
command, division of work, level of management hierarchy, and
departmentalization.

Departmentalization is the grouping of related activities into

units reflecting the internal and external focus of an organization
to achieve its objectives

TYPES OF ORGANIZATIONAL STRUCTURE

1. VERTICAL STRUCTURE

Owners of business have definitive authority, which is defined as

the 'legitimate right to make decisions and to tell other people what
to do'. The CEO can give orders to the General Manager or
President which is then dessiminated on different departments . The
General Manager handles the Financial Manager, Marketing
Manager, Sales Manager, Customer Service Manager, Sourcing
Manager. They each function accordingly based on their roles.

2. HORIZONTAL STRUCTURE

Line functions are action related to the principal activities of a firm

or have ultimate responsibility for the operational decisions of the
organization. Typical line functions include the manufacturing tasks,
such as design, fabrication, assembly and distribution. Staff
functions are specialized or professional skills that support the line
departments.
3. FUNCTIONAL STRUCTURE

This type of structure shows a functional organization where the

jobs are grouped together in departments with the specified skills
and/or business functions.

4. DIVISIONAL STRUCTURE
When the products, cutomers, and/or geographical locations of an
enterprise grow and continue to diversify, a functional structure may
not serve its development needs. A divisional organization, where
the enterprise is grouped into products, customers, or geographical
locations maybe a better structure.

4. MATRIX STRUCTURE
The functional and divisional organization advatages and needs
are utilized in a matrix organization. A dual reporting relationship
occurs in matrix organizations, as a manager reports to both
functional head and a product executive. Although a matrix
organization violates the unity-of-command principle because of the
dual reporting relationships, it provides flexibility and malleability.
What are the broad classifications of an organization theory?
The three broad classifications of organization theory include
classical, neoclassical, and modern organization theory.

What are the theories under classical organization?

Classical organization theory includes the scientific management
approach, Weber's bureaucratic approach, and administrative theory.

What are the examples of modern organization theories?

Modern organization theories include systems approach, socio-

technical approach, and contingency or situational approach.

What is the scientific management approach about?

The scientific management approach is based on the concept of
planning of work to achieve efficiency, standardization, specialization
and simplification. The approach to increased productivity is through
mutual trust between management and workers. Frederick Taylor
(1947) proposed four principles of scientific management:
science, not rule-of-thumb;
scientific selection of the worker;
management and labor cooperation rather than conflict; and
scientific training of workers.

What is the Weber’s bureaucratic approach about?

The Weber's bureaucratic approach considers the organization as a
part of broader society. The organization is based on the principles
of:

structure;
specialization;
predictability and stability;
rationality; and
democracy

This approach is also considered rigid, impersonal, self-perpetuating

and empire building.

What is the administrative theory about?

This is based on Henry Fayol’s fourteen principles of management.
Also, management was considered as a set of planning, organizing,
training, commanding and coordinating functions.

What is the neoclassical theory all about?

Neoclassical theory emphasizes individual or group behavior and

human relations in determining productivity. The main features of the
neoclassical approach are individual, work group and participatory
management.

What is the modern theory about?

Modern theories are based on the concept that the organization is an

adaptive system which has to adjust to changes in its environment.
Modern theories include the systems approach, the socio-technical
approach, and the contingency or situational approach.

What is the systems approach all about?

The systems approach considers the organization as a system
composed of a set of inter-related - and thus mutually dependent -
sub-systems. Thus the organization consists of components, linking
processes and goals.

What is the socio-technical approach all about?

The socio-technical approach considers the organization as

composed of a social system, technical system and its environment.
These interact among themselves and it is necessary to balance
them appropriately for effective functioning of the organization.

What is the contingency approach all about?

The contingency or situational approach recognizes that
organizational systems are inter-related with their environment and
that different environments require different organizational
relationships for effective working of the organization.
 Human Resource Management is a practice comprising the
several activities in planning, attracting, developing, and retaining an
effective and efficient workforce. It is also defined as the effective
and efficient recruitment, selection, placement, development,
maintenance, and utilization of manpower in an organization.

The roles include awareness of the legal aspects of staffing,

strategic human resources planning, recruitment and selection,
orientation, training and development, performance evaluation,
and giving of compensation and benefits.

VOCABULARY TERMS IN STAFFING

Recruitment
It is the process of attracting job candidates whose skills and
characteristics fit the job openings in the company. Among the
purposes are to find employees who can fit into the organization’s
culture and to select candidates who can perform the assigned tasks
in an excellent manner.

Job Identification
The human resource manager identifies the job and employee’s
qualification which is needed for the performance. The aim of which
is to find a match between the employee and the job.

Job Analysis
This involves the identification of what a particular position entails
and the qualifications needed for the position.
What are the different sources of recruits?
Current employees may be promoted if there are job vacancies.
Also, referrals from current employees, former applicants and
employees, and advertisements can be sources of recruits.
Recruitment may also done through online websites, employment
agencies, and college or university job fairs.

STEPS IN HUMAN RESOURCE PLANNING

1. Forecast the labor demand - managers analyze the number of

workers needed based on the sales forecast
2. Determine labor supply – managers determine the availability of
skilled workers who can meet the business’ labor demands
3. Develop a human resource plan –this determines the number of
people and the skills needed. A balance between the labor demand
and supply is needed.
RECRUITMENT PROCESS

1. Determine the job positions to be filled

2. Build a pool of job applicants
3. Require the job applicants to submit application forms
4. Screen the applicants
5. Call selected applicants for tests, including medical and drug
tests
6. Short list applicants for interview
7. Interview applicants; make final choice
8. Hire chosen applicant.

What is the importance of selection process?

It is used to select and hire the workers who will be performing
based on the existing criteria of the company.
What are the steps in the selection process?
Selection will start from the moment a prospective employee submits
his cover letter, transcript of records and resume to the recruiter. A
screening interview is done to determine whether an applicant
should be given further consideration.

What are examples of employment testing?

Psychological and personnel tests are done to measure an
applicant’s ability to cope with work and deal with his colleagues.

What is done in a job interview?

This interview is more thorough and comprehensive than the
screening interview. This gives the interviewer the opportunity to
determine if the applicant is fit for the job. Also, this gives the
applicant an opportunity to learn more about the company and know
if he likes the job and the organization.

What is the importance of reference checking?

A recruiter will inquire about the applicant’s suitability for
employment from the latter’s previous employer. This is an inquiry
about the integrity and reliability of the prospective employee.
Reference checking may also include looking into possible criminal
charges, convictions, or coworker’s comments about the applicant’s
reputation.

Why is physical examination important?

This gives the recruiter the idea of the applicant’s fitness for the job
and his ability to handle the requirements of the position he is
applying. Some companies require that new applicants undergo
illegal drug and alcohol testing to applicants. Accident and
absenteeism for alcohol and drug dependents can negatively impact
the organization.
COMPENSATION
It is the payment given to employees for their contributions to the
company. It is also remuneration for rendering personal services.
Salary is associated with employee compensation quoted on an
annual basis. On the other hand, wages is best associated with
employee compensation based on the number of hours worked
multiplied by an hourly rate pay. Hourly-paid employees will earn
wages at the rate of time and one-half for the hours in excess of 40
per week. The salaried employees in high pay positions are not likely
to receive additional pay for the hours in excess of 40 per week.

COMMON MODES OF PAYMENT

1. Payment for time worked
Majority of employees are paid on the basis of time worked.
Monthly paid employees are those who are paid each day of a
particular month including unworked rest days, special days and
regular holidays. Daily paid employees are paid on the basis of the
days they actually worked and unworked regular holidays.
2. Compensation through incentives
These payments are based on output. The most popular forms
of incentive pay are merit pay, commission, group incentives, piece
rate pay.
3. Payment based on skills
This is based on the number of skills the employees gain
while working for the company. In order to avail of this particular
compensation, an employee must acquire a certain skill prescribed
by the company
4.Payment based on knowledge or credentials
Continuous learning is one of the motivations for an employee
to attend seminars and conferences related to his or her field of
expertise.
5.Executive Payment
This is payment given to CEO, chairman of the board and other
members of top management. Executive payment is high since the
success of the organization depends on the overall skills of the
executive officers.
6. Special Payment
This is additional compensation given in special cases

Overtime Pay
This covers work done beyond the normal schedule of eight
hours a day. 25% of hourly rate is the standard pay while 30% of
hourly rate is given if the overtime was done on holiday.
Holiday Pay
This is payment for an unworked regular holiday based on the
employee's daily rate. 100% of daily rate is given if the
employee doesnt report to work while 200% of daily rate is given
if the employee reports on work.
Premium Pay
This is payment given to employees who work during rest
days and special holidays. Additional pay of at least 30% of
basic daily pay is given for work performed during these days.
Night differential payment
This is an additional of 10% of basic rate for each hour of
work performed between 10pm to 6am
Severance or separation pay
It is the duty of the firm to provide separation pay to
employees who are terminated with authorized cause. An
authorized cause include: retrencment to prevent further losses,
closure of a firm, illness that may affect his or her performance
or highly contagious
Retirement pay
An employee who is 60 or 65 years old shall receive one half
month salary for every year of service provided that he or she
has rendered five years of continuous service to the company.
The pay include : basic salary worth fifteen days based on
retiring employee's latest rate, five days service incentive leave
and one twelfth of his 13th month pay.
Thirteenth month pay
All employees are entitled to thirteenth month pay provided
that they have worked for at least one month in a calendar year.
This is given not later than December 24 of that particular year.
EMPLOYEE BENEFITS

Government mandated benefits

1. Social Security System (SSS)/ Government Service

Insurance System (GSIS) benefits
All income earners and workers are required to give monthly
contributions to the Social Security System or SSS. SSS
membership and contributions entitle the worker to several
benefits such as sickness benefits, maternity benefits, death
and funeral benefits, disability benefits and housing and salary
loans. This is the same for GSIS members.
2. Employee's compensation (EC) Program
This is given to private and government employees in case of
work related injury, disability, sickness or death.
3. Pag Ibig (Home Development Mutual Fund) Benefits
A Pag ibig member can avail of the following benefits:
housing loan, salary loan and calamity loan
4. Philhealth (Philippine Health Insurance Corporation)
benefits
Philhealth benefits covers members and their dependents
financial assistance for hospitalization
5. Service incentive leave
All employees are entitled to five days service incentive leave
with pay provided they have rendered at least one year of
service.
 6. Maternity Leave
This is given to all female SSS members whether married or
unmarried. The maternity leave benefit covers 60 days for
normal delivery or miscarrieage and 78 days for caesarean
deliver
7. Paternity Leave
This is granted to all married male employees. The benefit
covers 7 days after the wife delivery.

Voluntary benefits
it refers to benefits that are freely given by the company by its
employees.

1. Vacation leaves
2. Sick leaves
3. Emergency leaves
4. Summer outings
5. Sportsfest
6. Rice subsidy
7. Meal subsidy
8. Shuttle service
9. Hospitalization
10. Group Life insurance program
11. Bonuses
12. Profit sharing
13. Chrismas parties and packages
14. Emergency loan
15. Free uniform and laundry allowance
16. Executive perquisites
Motivation
is the psychological process of directing behavior. There are three
elements in the process of motivation: Motive , Behavior , Goal

Motive is something that arouses or induces an individual to behave

in a certain way or do a certain thing.
Behavior is comprised of actions aimed at accomplishing or
achieving a particular motive or need
Goal refers to the achievement or fulfillment of a motive

THEORIES OF MOTIVATION

1. Maslow's Hierarchy of Needs

This is the most widely recognized theory of motivation that
specifies the fundamental needs of individuals. These basic needs
are arranged in a pyramid, where the most basic needs occupy the
lowest layers. Maslow's theory assumes that lower-level needs
should be satisfied first to enable a person to address his or her
higher level needs susch as self-esteem and self actualization

2. Alderfer's ERG Theory

The ERG (Existence, Relatedness, Growth) Theory of Motivation
was developed in 1969 by Clayton Alderfer, an American
psychologist. Alderfer integrated the levels of Maslow's hierarchy of
needs and identified three major types of needs: existence,
relatedness, and growth. Existence needs are comprised of
physiological and safety and security needs. Relatedness
needs combine love and belongingness while growth needs include
self esteem and self actualization.

The ERG Theory states that a person can satisfy the needs from
several levels at the same time.

3. McCelland's Learned Needs Theory

David McClelland, an American psychologist developed the
Learned Needs Theory in the 1960s. This theory is also known as
Achievement Motivation Theory. According to McClelland's Theory,
human behavior is defined by three motivators which are learned
and shaped by a person's life experiences.

People with high need achievement has a strong desire to

accomplish challenging goals and gain advancement in their
professions.
People with a need of affiliation prefer to be in the company of other
people. They choose to collaborate rather than to compete to avoid
internal conflicts.
People with high need for power want to control and influence
others. They want their ideas to prevail in a discussion and often
tend to dominate the group.

LEADERSHIP THEORIES AND LEADERSHIP STYLES

Leadership is a complex process. It involves influencing others to
accomplish a mission, task, or goal. There are a number of
leadership theories that describe the characteristics and behavior of
succesful leaders as well as different leadership styles that
managers can apply in various situations
1. Great Man Theory
With the Great Man Theory, there is the assumption that leaders
are born with innate qualities and that renowned leaders are
destined to lead. This theory states that leadership is greatly
influenced by status as many great men in history came from
aristocracy.

2. Trait Theory
This theory focuses on innate attributes and characteristics that
a person possessess. This believes that leaders possess certain
positive traits that enable them to become leaders. Management
experts also identify four primary traits that leaders should possess.
These are as follows:

1. Emotional Stability - a leader is calm and confident during

stressful times.
2. Ability to admit error - A leader does not cover up his or her
mistakes and takes responsibility for them
3. Good interpersonal skills - A leader is able to communicate
and persuade others
4. Intellectual breadth - A leader is broad minded and is
knowledgeable about a wide range of areas.

3. Behaviorist Theories
The behaviorist theories place more emphasis on the behavior
of leaders rather than their innate qualities. The patterns of behavior
of leaders are observed and notable actions and behaviors are
described. Leadership Grid defines leadership as balancing
between two fundamental concerns: the concern for people and the
concern for results.
The five styles of leadership according to the leadership grid are as
follows:
1. Authoritarian (high result, low people) - They are very task
oriented and push their people to work. They are very strict with
schedules and expect their people to follow them without question.

2. Country Club Leaders (low result, high people) - They use the
power of rewards to maintain discipline and motivate their
subordinates.
3. Impoverished Leaders (low result, low people) - They delegate
task and then leave their subordinates unsupervised. They allow
their people to go about their job by doing their own thing , which
often results in workers struggling to finish their tasks.

4. Team Leaders (high result, high people) - These leaders are

considered role models of good management. They encourage their
members to attaint their highest potential and motivate them to
perform well in achieving their goals

5. Middle of the Road Leaders (medium result, medium people)

- These leaders seek a compromise between production and people
concerns and maintain the status quo in the company.
What is controlling?
It is the process of taking the necessary measure so that the mission
and objectives of an organization are accomplished effectively and
efficiently. Objectives are basis for which actual performance is
measured.

What is the importance of control?

Control is making something happen according to plan.

Control helps the organization in the following ways:
Adapt to change and uncertainty – control systems will help
managers to anticipate and monitor to changes in the needs of
customers, government regulations and other uncertainties.
 Detect opportunities – control allows managers to be alerted
when there are opportunities, such as competitive prices on
materials and new markets
Discover irregularities and errors – controls prevent anomalies
and uncover problems such as manufacturing defects,
bookkeeping errors, and customer dissatisfaction among others
Reduce cost and increase productivity – it can decrease cost,
increase output and eliminate waste. Controls add value to the
product
Decentralize decision making and facilitate teamwork – it allows
top management to decentralize decision making at lower levels
within the organization and to encourage work

NATURE OF CONTROLLING
Control is a Function of Management. It is a follow-up action to
the other functions of management performed by managers to
control the activities assigned to them in the organization. Control is
designed to evaluate actual performance against predetermined
standards set-up in the organization. Plans serve as the standards of
desired performance. Planning sets the course in the organization
and control ensures action according to the chosen course of action
in the organization. Unless one knows what he wants to achieve in
the organization, he cannot say whether he has done right or wrong
in the organization. Control is not the Last step in a management
process but it actually begins with the setting up a plan in the
organization. Control implies the existence of plans or standards in
the organization.

It involves continuous review of standards of performance and

results in corrective action, which may lead to changes in other
functions of management. Control depends upon the information
regarding actual performance. Accurate and timely availability of
feedback is essential for effective control action. An efficient system
of reporting is required for a sound control system. This requires
continuing monitoring and review of operations. The performance of
control is achieved only when corrective action is taken on the basis
of feedback information. It is only action, which adjust performance
to predetermined standards whenever deviations occur. A good
system of control facilities timely action so that there is minimum
waste of time and energy. This is not a one-step process but a
continuous process. It involves constant revision and analysis of
standards resulting from the deviations between actual and planned
performance.
The control process involves four main steps. These are as follows:

1. Establishment of standards
The first step is to develop criteria by which performance will
be measured. Standards can be quantitative or expressed in
terms of non measurable elements such as customer loyalty
and goodwill. They can also be based on productivity or the
effort put into the task.
2. Measure of Performance
Performance is measured by identifying strategic control
points. These includes indicators such as income, expenses,
inventory, product quality. Employee performance can be
measured through actual observation.
3. Comparison of the actual performance with the standards.
Management can gather data from performance
measurement and compare it with the established standards.
The company can also conduct benchmarking by comparing
their performance with exemplary practices from other
companies in the industry.
4. Taking corrective actions and realigning processes when
necessary
When the company has determined that its performance has
deviated from standard, corrective actions should be taken and
applied. Deviations from the standard may be a result of
 incorrect planning, a lack of coordination in the conduct of tasks
or the misinterpretation of instructions.

CONTROL METHODS AND SYSTEMS

1. Feedforward control
 This type of control anticipates the occurrence of possible
problems so that preventive measures can be implemented before
the actual operation. This is commonly practiced by airline
companies. Their personnel conducts extensive check on airplanes
to ensure that they are in proper working condition and that there are
no defective parts. Feedforward control is a proactive measure
because it allows managers to think of ways to prevent any untoward
incidents before they can actually happen. The implementation of
feedforward control requires the company to invest material and
human resources to ensure that it is done properly.

2. Concurrent Control
This type of control is implemented while the activity is in
progress. Managers practice concurrent control to monitor the
activity as it happens and address problems as they occur. For
example, office operations are often affected by employees
engaging in personal activities like surfing the web. These result in
wasted time and lower productivity among employees. To address
this issue, managers monitor the activities of their employees by
using various technologies.

3. Feedback Control
This type of control is done after the activity. Feedback enables
managers to gather information and determine whether the activity is
a success or a failure. Feedback is the most common control
implemented by companies.
FUNCTIONAL AREAS OF MANAGEMENT IN THE
ORGANIZATION

Human Resource Management

includes tasks and activities performed by HR managers,
HR specialists and operating managers. The effective
management of human resources has a significant impact on
operations and production. If human resources are not managed
properly, they can adversely affect the utilization of material
resources such as money, raw materials and equipment
resulting in a decline in organizational effectiveness. The
success of any organization depends primarily on the hiring,
placement and development of employees. that is why HR
management must ensure the quality of hiring and training
processes of the organization.
Marketing Management
involves overseeing the development of new products,
advertisements, promotions and sales. Promotion is an
important aspect of marketing. This ensures that the information
or message reaches the appropriate client and awareness is
raised regarding the product or service being marketed.
Operations Management
focuses on designing and controlling production and business
operations related to production. It involves management of
facilities, processes, distribution and resource planning. The
operations department is staffed by personnel who are tasked
with ensuring the smooth flow of production and related
activities.
Financial Management
Finance is considered the "lifeblood of business" since all
organizations need financing to meet their sales requirements
and sustain operations. The finance management monitors and
decides for the financial decisions that is beneficial to the
company. They also develop strategies as to where to invest
surplus cash.

Material and Procurement Management

Procurement is the act of purchasing or acquiring goods and
services for company use. This department is charged with the
acquisition of materials and resources for the different
departments in the organization. Procurment management also
involves purchase planning, standards determination, inventory
control and disposal. An important role of procurement
management is to determine the sources of materials and
identify and implement processes that will enable the company
to acquire these resources.
Office Management
involves the proper handling and maintenance of the clerical
aspects of all the functional departments of the organization, as
well as the facilitation of proper communication, coordination
and storage of data. Office management also involves payroll,
records, telecommunications and parking management.
Information and Communication Technology Management
refers to the application of computer and telecommunications
technology to store, manage and transmit data in businesses
and other organizations. Implementation of technology in
information management requires the creation of information
systems to handle data specific to certain organizations.
Information systems are now an indispensable tool in
conducting business. Managers can utilize these in accessing
and managing the crucial information that they need to perform
their management functions.
 A small-family business is a business that is owned, controlled,
and manage by the whole family. Every family member has different
roles in the business which is aligned to their various skills and
abilities. According to the facts compiled by the Family Firm Institute
(2014), family businesses comprise the majority of the businesses in
most countries across the globe. 80% of the economy of the
Philippines is contribute by families who own, control, and manage
businesses. Filipino family entrepreneurs build family businesses to
be able to build the family wealth and leave a lasting legacy.
Examples of successful Filipino family businesses.

UNILAB (United Laboratories)

- the biggest pharmaceutical manufacturer in the Philippines which
was founded by Mr. J.Y. Campos and Mr. M.K. Tan.
Jollibee Foods Corporation
- started an ice cream parlor in Cubao, Quezon City by Tony Tan
Caktiong and his family and eventually, they hired a consultant who
shifted the business focus which became the one of the biggest fast-
food chains in the world.
GT Cosmetic Manufacturing Inc.
- This was founded Engr. Leonora Salvane and her family at their
residence in Lilo-an, Cebu. GT Cosmetics now markets a full line of
skin care products across the globe.
SM Group of Companies
- Started by Henry Sy, Sr. as a shoemart in Carriedo, Manila, which
transformed into a department store. SM Quiapo (also known as SM
Clearance Outlet and SM Carriedo) is the very first SM Store opened
in November 1972.
Today, SM has dominated the Philippines with a number of malls.
Aboitiz Group of Companies
- The Aboitiz & Company story started in 1920 and later on, in 1992,
they professionalized the organization and created their family-
owned business, The Aboitiz Equity Ventures, Inc.
ROBINSONS GROUP
founded by John Gokongwei Sr. and opened its first branch
currently known as Robinsons Galleria in Ortigas in 1990. Robinsons
Group currently owns Cebu Pacific, Universal Robina Corporation,
Summit Media and former holder of Sun Cellular which then sold to
Smart Communications.
TIPS ON STARTING SMALL FAMILY OWNED BUSINESS

1. Assess family members’ skills.

Look at strengths and weaknesses of each one and determine
the best role for each. Gaps in experience or skills need to be filled
by employees outside the family. have a candid discussion about
risk. Find out everyone’s attitude toward risk and whether they can
accept possible failure.

2. Decide whether your personalities match.

Make sure that Family interpersonal and cross-generational
conflicts are manageable
Make certain all family members recognize the difficulties needed
start a business. Starting a company is time consuming and Family
members may be away from home more than their spouses would
like.

3. Obtain a commitment.
Any startup company requires the total commitment of everyone
involved.
Make sure the organization is structured soundly. Ownership shares
and procedures for liquidating shares in the event a family member
leaves, are worked out in advance, so there are no hard feelings
later.
4. Create an organizational structure.
Make sure all the family members understand the scope of
their responsibility and their decision making authority.

5. Separate family from work life.

Make sure non-family employees are treated just as fairly as
family members.

Family Business Opportunities

According to small biz trends in the US, here are potential family
business opportunities

Family Restaurant – starting a restaurant as a family can be a great

opportunity and can really be appealing to people in the locality. This
type of business requires multiple people with different skill sets.

Niche Website – a website for a specific niche that offers

information or provides a forum for people to share ideas is also a
good opportunity. You can charge a membership fee or make money
through ads or affiliate links.
Home Rental Business – having a few different homes or properties
could also lead to a family business. You can have those homes be
rented out to others.

• Bakery – Selling individual baked goods or custom desserts for

clients or special events is also a good family idea if your family is
into baking. •
Local Store – Starting a retail store in your locality where you can
sell anything from electronics to clothing would also work. •
Tutoring Services – Families can also build a business by offering
tutoring services in various subjects to students.