9

LEARNING ACTIVITY SHEETS

Quarter 1 – Week 5 & 6

ENTREPRENEURSHIP
General Reminder: Use this activity sheet with care. Do not put unnecessary mark/s on any part of the activity
sheets. Use a separate sheet of paper in answering the exercises. Read the directions carefully before doing
each task. Return this activity sheet to your teacher/facilitator once you are through with it.

UNIT OF COMPETENCY:

Acquire Fundamental Skills in Managing a Business

Explore
What do you already know?

PRE-TEST:

Directions: Read each statement carefully and answer honestly. Write the letter only of your answer in
your paper.

1. The most basic management function of an entrepreneur which tells you where you are going and how
to get there.
a. Controlling
b. Organizing
c. Planning
d. Staffing
2. Plans are categorized in different ways. Which plan is used repeatedly as it covers policies, procedures,
and rules in management functions?
a. Organizational plan
b. Staffing plans
c. Standing plans
d. Single-purpose plans
3. This plan is essentially non-repetitious since it is usually used within a short period of time. It
comprises programs, projects, and budgets.
a. Improvement plan
b. Organizational plan
c. Single-purpose plan
d. Standing plan
4. A management function that clusters the activities into departments or job positions, and designating
the personnel to head and compose each department is called .
a. Directing
b. Organizing
c. Planning
d. Staffing
5. A diagram the shows the relationships of the position and their corresponding authority, responsibility,
and accountability is .
a. Functional type organization
b. Line and staff organization
c. Line organization
 d. Organizational chart
6. Directing is a challenging task. The principal concern of directing as a management function is to
.
a. assess the skills, strengths, weaknesses and potentials of personnel.
b. discover the problem in quantity or quality of skills of personnel
c. influence subordinate to contribute to the attainment of the firm objectives.
d. Make sure that what is done in the enterprise conforms to what had been planned.
7. Which among the choices below is necessary to determine how often you should measure performance
in the controlling process?
a. Compare performance with standards and analyze deviations
b. Establish standards
c. Measure actual performance
d. Set performance measurements
8. A type of organization chart where officers have staffs to assist them who do not have any authority
over line personnel is .
a. Line and staff organization
b. Line organization
c. Functional staff organization
d. Organizational chart
9. Assessing the skills, strengths, weaknesses and potentials of your personnel will tell you whether
.
a. your company has just the right quantity and quality of men.
b. you have an excess in quantity but are short in quality.
c. both quantity and quality of skills of your personnel are insufficient.
d. a, b, and c
10. If you find out that there is a problem in quantity and quality of skills among your present personnel.
What solution should you adapt to solve the problem?
a. consider recruiting from inside or outside the organization
b. undertake training and skills development
c. advise the person to look for another job
d. a and b
11. When entrepreneurial activities slow down, what goes up?
a. Tax revenue
b. Inflation rate
c. Business profits
d. Unemployment rate
12. An entrepreneur is aware of .
a. his family’s activities
b. his business competitors
c. his relations to people in his community
d. the demand for products or services in his community
13. The term legal term refers to the type of business ownership. Which type of business ownership is the
simplest and most common?
a. Corporation
b. Cooperative
c. Partnership
d. Sole proprietorship
14. Partnership is a business form owned by two or more persons. Which among the choices below is NOT
an advantage of partnership
a. Partners have to be consulted each time a decision and action is made.
b. No income tax is levied on the partnership itself but on the owners as individuals.
c. Partners decide as to who shall pay debts in case the business is unable to pay its liabilities.
 d. If one partner commits mistake, the other has to suffer the consequences.
15. Which of the following is NOT an advantage of a corporation?
a. Corporation continues to exist for a maximum of 50 years.
b. Continuity of existence is not affected by death of a stockholder.
c. Each stockholder shares in the ownership of the company, together with the incorporators.
d. Subject to a more government control.

Learn
This module covers the knowledge, skills, and attitudes required in identifying and explaining effective
managerial functions of entrepreneurs.

Lesson 1:
ACQUIRE FUNDAMENTAL SKILLS IN MANAGING A BUSINESS

What is this lesson about?

This lesson discusses the fundamental skills in managing a business

What will you learn?

At the end of the lesson, you should be able to:

1. identify and explain the fundamental skills in managing a business;
2. differentiate the kinds of organizational chart for effective management of an enterprise; and
3. appreciate the value of efficient management of a business enterprise.

WORDS TO STUDY
Accountability – is a situation of being answerable to higher authorities.

Authority – is the power or right delegated or given to a person.

Line organization – is a type of organization which is characterized by a superior having direct

command over workers to accomplish the task.

Line and staff organization – is a type of organization where line officers have staffs to assist them
but who do not have any authority over line personnel.

Organizational chart – is a diagram that shows the organizational relationships of the positions and
their corresponding authority, responsibility, and accountability.

Responsibility – is the duty that one has to fulfill in connection with the performance of the job.
 MANAGEMENT FUNCTIONS OF ENTREPRENEURS

PLANNING

Planning is the most basic management function that tells you where to go and how to get there. It is
like preparing a blueprint of what is to be done, when, how, and by whom it should be done.

Classification of plans:

1. Standing plans – these plans are used repeatedly and cover policies, procedures, and rules.

2. Single-used or single-purpose plans – these plans are essentially one-shot or non-repetitious.

This is used within a relatively short period of time, they comprise programs, projects, and
budgets. Programs are complicated; they are made up of objectives, goals, strategies, policies,
rules, job assignments, financial resources and other pertinent items.

Another way to classify plans is according to whether they are short, (to be from a day to a year),
intermediate range plans (to be from a few months to three years); and long range plans (to be up to 25 years).

Steps Involved in the Strategic Planning

1. Formulate organization objectives. These serve as the basis where the efforts and services will be
used.

2. Analyze present resources . These refers to the availability of money, staff, machines, materials, space
and time to help you realize your plans.

3. Determine alternative courses of action . Reduce number of alternatives. Remove those do not look
promising, and retain those sound ones for further analysis.

4. Examine the alternatives. You need to do some statistical and quantitative analysis of factors
involved in each alternative.

5. Select the best course of action . Choosing alternative most likely to be effective in achieving your
objectives.

6. Develop support plans. Smaller plans aims to establish coordination among other levels of the
organization so that the enterprise goal can be easily achieve.

7. Implement the plan. Plans only come into reality when it is implemented. In implementing the plans,
it require the exercise of other management functions such as organizing, staffing, directing, and
controlling.

ORGANIZING

Organizing involves identifying the specific activities necessary to achieve the enterprise goals,
clustering the activities into departments or job positions, and designating the personnel to head and compose
each department.
 An example of the organizing function is the owner-manager of a small factory who establishes three
departments – production department, sale department, and administrative department. He assigns manager to
head each department and clearly delineates responsibilities among them. Thus, he give the production manager
the responsibility for manufacturing, packing, and shipping, while he delegates to the sales manager the
responsibility for advertising and customer service. Then, he assigns the administrative head to look after
personnel, purchasing, and accounting.

Below is the diagram showing the organizational relationships of the position and their corresponding
authority, responsibility, and accountability.

A. LINE ORGANIZATION

The manager has direct command over workers who accomplish the task. Below is an example of a
line organization.

MANAGER

SUPERVISOR

FOREMAN

WORKERS
B. LINE AND STAFF ORGANIZATION

Any activities that a line officer cannot do are delegated to a staff officer to render these services. For
example, in a small manufacturing enterprise, the president, production manager, and sales manager perform
line functions, while legal counsel who helps and advises the president has no authority over line employee.
Below in an example of this type.

PRESIDENT

LEGAL COUNSEL

SALES PRODUCTION ADMINISTRATIVE

MANAGER MANAGER MANAGER

C. FUNCTIONAL STAFF ORGANIZATION

In this setup, the worker has more than one immediate superior or as many as the types of activities
assigned to him. An example of this type is shown below.

MANAGER

SUPERVISOR
 FOREMAN

PRODUCTION
QUALITY CONTROL
SPECIALIST

WORKERS

STAFFING

This process involves proper and effective selection, appraisal and development of personnel to do the
jobs and fulfill the roles in the structure.

A. Assess your workload. The officers manning the operation units can determine what exactly they
are responsible for. This information can be used as basis for defining the organizational structure,
and the quantity and quality of personnel needed to handle the workload.

B. Study jobs in the company. This refers to the process of determining the duties and
responsibilities of each job. The analysis can tell you whether or not the present workers have the
required skills and abilities. You can also find out who else among the present employees fit in
each job.

C. Examine your present personnel. Assess the skills, strengths, weaknesses, and potentials.
Compare your inventory against the forecasted manpower needs. Your finding will tell you
whether:

a. Your company has just the right quantity and quality of people;

b. You have an excess in quantity but are short in quality; or

c. Both quantity and quality of skills of your personnel are insufficient.

D. Design an improvement plan. If you find out that there is a problem in quantity and quality of
skills among your present personnel, you may adopt any of the following solutions:

a. If your workers are not enough, consider recruiting from inside or outside the
organization.

b. If your workers do not possess the required skills, you may resort to training and
development.

DIRECTING

Directing involves putting your plans into effect. How to influence your subordinates who have distinct
needs and a unique personality, to contribute to the attainment of the firm’s objectives is the principal concern of
directing.
 Understanding certain principles will help you direct the actions of your subordinates towards the
successful implementation of your plans. Directing includes the following:

A. Motivation is the process of encouraging the subordinates to act in a desired manner. When an
employee joins a company they bring with them certain needs which they hope to be able to
satisfy.
a. Physiological needs these are needs for air, food, water, for survival.
b. Safety needs to be protected from danger, threat, or deprivation.
c. Esteem needs such as those for self-confidence, achievement, competence, knowledge,
self-respect, freedom, and independence. It also includes the needs for status, recognition,
importance and respect.
d. Self-realization needs represent the needs for full development of potentials and of being
creative.

B. Leadership is the ability of an individual to persuade the subordinates to follow. As a leader, you
need a mixture of skills to be effective. These skills may be required in varying degrees by
managers in different situations. These skills include the following;
a. Conceptual skills refer to the mental capacity on an individual to grasp the relationship of
different parts into an integrated whole. They need these skills in planning and analyzing.
b. Human relation skills is the ability to deal effectively with people.
c. Technical skills incorporate the capabilities to perform the mechanics of a certain job
which the operative employees perform, like producing goods that the company
manufactures.

CONTROLLING

The function of controlling is to make sure that what is done in the enterprise conforms to what has
been planned. The two main activities involved here are comparing actual performance with desired
performance and making necessary connections where there is deviation from the plans.

Steps in controlling process:

A. Establish standards. Standards are sets of measurements against which you can evaluate actual
results.

Three common types of standards:

 Physical standards include quantity of products or services, number of customers or clients,
and quantity of clients or services.
 Monetary standards are indicated in terms of peso values and include labor cost, selling cost
material cost, sales revenue, and gross profit.
 Time standards refer to the speed with which job should be done of the deadlines for theirs
completion.

B. Set performance measurements. It is also necessary to determine how often you should measure
performance, who will do the measurement, and what form will the measurement take. An
important consideration in determining appraisal is that it must be easy to do and easy to explain to
your people.

C. Measure actual performance. This step can be easy for you if the standards are spelled out
clearly and if what your personnel are doing can be determined clearly. It includes observation,
oral and written reports, automatic methods, inspections, tests, and samples.
 D. Compare performance with standards and analyze deviations . Controls does not stop after
measuring performance. Data about actual performance can be meaningless unless they are
compared with desired performance. Then, you should analyze the reasons for the failure to meet
the standards so that you can deal with the roots of the performance problems.

Depending on the nature of the shortfalls in performance, you may correct these shortfalls
by resorting to any of the following remedies.
a. Revising your plans
b. Modifying your goals
c. Reassigning workers
d. Clarifying duties and responsibilities
e. Hiring additional staff
f. Firing problem workers
g. Strong leadership

Controls can be classified as either organizational or operational. Organizational controls are those that
measure the overall performance on the organization. Operational controls evaluate day to day activities and
spot areas where you may need to take corrective actions.

Effective controls have the following characteristics:

a. They control the proper activities. People will naturally be conscious about meeting standards if
they are aware that those activities will be monitored. However, you should take care not to cause
an imbalance but concentrating to much control on one group of activities and easing up on
another.
b. Control should be timely. “A stitch in time saves nine,” a popular saying goes. Control must
report deviation in time to enable you to deal with the problem before it is too late.
c. Controls should be cost effective . Controlling entails costs. You pay for the processing and
monitoring that you use, like registers and computers, you pay for the personnel like the inspector,
accountants, and inventory controllers. You also pay for the line personnel who work on the data
on scrap, production costs, and personnel report. But, are all these practical and economical?
d. Controls must be accurate. Control measures must be accurate to have a good basis for
corrective actions.
e. Controls must be accepted. It is important that your people understand the purpose and benefits
of control so that they will not feel that you have installed controls just because you don’t trust
your men.

Lesson 2:
DIFFERENTIATE THE LEGAL FORMS OF BUSINESS OWNERSHIP

What is this lesson about?

This lesson deals with legal forms of business ownership.

What will you learn?

At the end of the lesson, you should be able to:

 1. identify the legal forms of business ownership; and
2. discuss the advantages and disadvantages of the legal forms of business.

WORDS TO STUDY

Legal forms – refer to the documents of ownership of a business.

Business – is a legally recognized organization designed to provide goods and/or services to
consumers.
Enterprise – is a business undertaking.
Proprietorship – is the state or right of a proprietor or owner.
Liability – refers to the amount that is owed.
Transaction – is a business deal or agreement.
Income – is the gain or recurrent benefit usually measured in money that derives from capital or labor.

Deciding the business ownership

A business first exists in your mind as an idea. When this idea is developed and put into writing, it
becomes a plan. As you gather your resources be it material or human resources, you are making your plan into
reality. And when you register it, it becomes a legal entity, with appropriate rights and responsibilities.

Once you have identified your project or business, you are ready to organize and set up you won
enterprise. This means that you have to decide on tis forms of ownership then later, the location, hire and train
personnel, raise funds, acquire machinery and equipment, and finally register the business.

The term legal form refers to the form of ownership of a business. You may decide to share ownership
with other people if you are not the only source of project ideas or if you do not have enough capital and
experience to start the business on your own.

Sole proprietorship. A sole proprietorship is a business unit owned and managed by only one person. It is the
simplest and most common form.

Most small business start as sole proprietorships. Here, you and the business are essentially one. You,
as the sole proprietor owns all the assets.

As such, you will exclusively enjoy the benefits to be derived from the business. If you decide to
become a sole proprietor, you do not need to consult anyone on matters related to setting or running the
business.

Advantages of a Sole Proprietorship Disadvantages of a Sole Proprietorship

 relatively low start-up costs  unlimited liability
 greatest freedom from regulation  lack of continuity in business
 owner in direct control of decision-making organization
 minimal working capital required  difficulty in raising capital
 tax advantages to owner  all the risks are of the owner
 owner is the boss  owner shoulders any liability incurred
 all profits to owner in the business
 in case of death, the business may be passed on
to another by virtue of a will
Partnership. Under this business form, two or more persons are owners of the business. The owners define
their rights and duties as partners in the business through a partnership agreement.
 Advantages of a Partnership Disadvantages of a Partnership
 The partners decide as to who shall be responsible for  Any action of one partner within the scope
paying debts in case the business is unable to pay its of business binds the other partner as well.
liabilities later. Thus, if one partner commits mistake, the
 They agree as to how much will be the share of each one other has to suffer the consequences as
in the profits of the business and what business well.
responsibilities will be assigned to each.  Partners also have to be consulted each
 The partners agree as to when the partnership ends such time a decision or action concerning the
as when one partner agrees to a buy-out offer or when one business needs to be made. This means
of the partner dies. taking more time to get things done.
 No income tax is levied on the partnership itself but on
the owners as individuals.

Corporation. This business form is initiated by individuals called incorporators, numbering from a minimum
of five to a maximum of fifteen.

Advantages of a Corporation Disadvantages of a Corporation

 The incorporators put up the initial or starting capital of the  The corporation is subject to more
business. To get additional capital, shares of stocks are sold to government control.
interested parties called the stockholders.  The corporation is relatively
 Each stockholder shares in the ownership of the company, complicated in form and management.
together with the incorporators. It needs high cost of formation and
 The right of the stockholder to vote on matters affecting the operation.
corporation depends on the number of shares he/she holds.  Its credit is weakened by the limited
 The number of shareholders in the corporation is used as basis for liability of the stockholder.
computing the share of each one in the profits of the corporation.  It is subject to a heavier taxation.
This share is called the dividend.  The stockholders’ voting rights have
 The life of the business does not depend on stockholders. become theoretical especially in a big
 It has continuity of existence for a maximum of 50 years. corporation because of the use of
 Continuity is not affected by death of a stockholder or by the proxies.
transfer of shares of stocks from one stockholder to another.  The stockholders have little voice in
 In case of losses, liabilities are settled through the sale of the the conduct of the business of a
assets of the corporation. corporation.

Cooperative. A cooperative is owned by twenty-five or more individuals who, like in a corporation buy shares
in the business. However, unlike a corporation, each member of the cooperative is entitled to only one vote on
matters regarding the business regardless of the number of shares he or she has bought. In case of losses,
responsibility for paying liabilities is also borne equally by the members.

LET US REMEMBER

An entrepreneur should carefully choose what legal form of business he has to venture. He has to consider

Engage
or study very carefully the advantages and disadvantages of each.

Activity 1

Directions: Give the steps involved in the Strategic Planning by filling up the diagram below.
Steps Involved in the Strategic Planning

1.

2. 3. 4.

5. 6. 7.

LET US REMEMBER

Effective management is very much important in running a business, without proper management, people
might just work to pursue their own interest without considering that of the organization or those of the
other members. Effective and efficient management makes it possible for both the organization and the
employees to work for a common goal, at the same time satisfying their respective interest.

Activity 2

Directions: Read the following carefully. Then, answer and discuss the questions at the end of the story.

Jane and Rose are best of friends working in the same agency. While they were having their coffee
break one day, Rose having three children going to school complained to Jane how difficult to make ends meet
with the meager salary they are receiving. When Jane heard her friend, she said, “why don’t you put-up a
sideline? You are a good cook. You can sell peanut adobo, brittle, brittle, peanut butter or other food products. I
am sure you will not have problems in terms of raw materials because these raw materials are abundant in our
community.”

Rose is sold to the idea and persuaded her friend to be her partner. The two friends contributed P2,
000.00 each to start the business. They agreed to have equal profit. Rose would take care of the production
while Jane will concentrate in marketing.

Jane started getting orders while Rose concentrated in cooking. When they succeeded in getting big
orders, they decided to register their business as a partnership under the name R & J Food Products. From then
on, their customers have regular orders and even becoming bigger.

After six months of operation, the partners earned P20, 0000.00 and they decided to divide it equally
between them, Meanwhile, Rose was exhausting herself with her production efforts, while Jane’s life went on
very casually because once the first orders have been booked, most of the buyers placed repeated orders.
 Before the business reached its first-year anniversary, Rose got sick and advised to rest. Rose can no
longer cook and Rose husband forbade her to continue the business.

1. What went wrong with the business?

2. If you were Rose, would you enter into a partnership with a friend or would you register the venture as
a sole proprietorship?
3. Were the partners right in splitting the profits equally?
4. Discuss the advantages and disadvantages of partnership.

Apply
How much have you learned?

MULTIPLE CHOICE

Directions: Read each statement carefully and answer honestly. Write the letter only of your answer in your
paper.

1. A diagram the shows the relationships of the position and their corresponding authority, responsibility,
and accountability is .
a. Functional type organization
b. Line and staff organization
c. Line organization
d. Organizational chart
2. A management function that clusters the activities into departments or job positions, and designating
the personnel to head and compose each department is called .
a. Directing
b. Organizing
c. Planning
d. Staffing
3. This plan is essentially non-repetitious since it is usually used within a short period of time. It
comprises programs, projects, and budgets.
a. Improvement plan
b. Organizational plan
c. Single-purpose plan
d. Standing plan
4. Plans are categorized in different ways. Which plan is used repeatedly as it covers policies, procedures,
and rules in management functions?
a. Organizational plan
b. Staffing plans
c. Standing plans
d. Single-purpose plans
5. The most basic management function of an entrepreneur which tells you where you are going and how
to get there.
a. Controlling
b. Organizing
c. Planning
d. Staffing
6. If you find out that there is a problem in quantity and quality of skills among your present personnel.
What solution should you adapt to solve the problem?
a. consider recruiting from inside or outside the organization
b. undertake training and skills development
c. advise the person to look for another job
d. a and b
7. Assessing the skills, strengths, weaknesses and potentials of your personnel will tell you whether
.
a. your company has just the right quantity and quality of men.
b. you have an excess in quantity but are short in quality.
c. both quantity and quality of skills of your personnel are insufficient.
d. a, b, and c
8. A type of organization chart where officers have staffs to assist them who do not have any authority
over line personnel is .
a. Line and staff organization
b. Line organization
c. Functional staff organization
d. Organizational chart
9. Which among the choices below is necessary to determine how often you should measure performance
in the controlling process?
a. Compare performance with standards and analyze deviations
b. Establish standards
c. Measure actual performance
d. Set performance measurements
10. Directing is a challenging task. The principal concern of directing as a management function is to
.
a. assess the skills, strengths, weaknesses and potentials of personnel.
b. discover the problem in quantity or quality of skills of personnel
c. influence subordinate to contribute to the attainment of the firm objectives.
d. Make sure that what is done in the enterprise conforms to what had been planned.
11. Which of the following is NOT an advantage of a corporation?
a. Corporation continues to exist for a maximum of 50 years.
b. Continuity of existence is not affected by death of a stockholder.
c. Each stockholder shares in the ownership of the company, together with the incorporators.
d. Subject to a more government control.
12. Partnership is a business form owned by two or more persons. Which among the choices below is NOT
an advantage of partnership?
a. Partners have to be consulted each time a decision and action is made.
b. No income tax is levied on the partnership itself but on the owners as individuals.
c. Partners decide as to who shall pay debts in case the business is unable to pay its liabilities.
d. If one partner commits mistake, the other has to suffer the consequences.
13. The term legal term refers to the type of business ownership. Which type of business ownership is the
simplest and most common?
a. Corporation
b. Cooperative
c. Partnership
d. Sole proprietorship
14. An entrepreneur is aware of .
a. his family’s activities
b. his business competitors
c. his relations to people in his community
d. the demand for products or services in his community
15. When entrepreneurial activities slow down, what goes up?
a. Tax revenue
 b. Inflation rate
c. Business profits
d. Unemployment rate

ENUMERATION

Directions: Enumerate the following:

1. - 5. Management functions of entrepreneur
6. – 8. Skills of an effective leader
9. – 11. Common types of standards
12. – 15. Legal forms of business ownership