BUSINESS ORGANIZATION AND MANAGEMENT (BM) CHAPTER 1,4,6

Pre-lim

Management

defined as the achievement of organizational objectives through people and other resources.

How many functions does a management have?

decision making, planning, organizing, staffing, communicating, motivating, leading, controlling

decision making

the process by which decision maker determines the available alternatives and chooses the best solution that suits a given problem.

planning

the process of establishing objectives and suitable courses of action before taking action

organizing

the process of arranging an organization’s structure and coordinating its managerial practices and use of resources to achieve its goals.

staffing

refers to the process of recruiting, placing, training, and developing personnel.

communicating

refers to transferring information from one communicator to another. 

motivating

refers to the act of giving employees reasons or incentives to work in order to achieve organizational objectives.

Leading

is the process of directing and influencing task-related activities of organization members.

controlling

the process of monitoring actual organizational activities to see that they conform to planned activities and correcting deviations or flaws.

is a central element in the management process, which requires the achievement of an objective.

effectiveness

also a central element in the management process, which requires that the minimum amount of resources is used to achieve an objective. 

efficiency

one who plans, organizes, leads, and controls other individuals in the process of pursuing organizational goals. The one responsible for accomplishing the objectives of his particular unit which could be a whole organization, a particular department, or a work group.

Manager

the level of managers

Top, Middle, Lower-level

Top managers

responsible for the overall performance of the organization. They formulate strategies, provide leadership, evaluate and shape the method of organizing, and control the direction of the organization in the effort to accomplish goals. Usually hold titles such as chief executive officer, president, chairman or senior vice president.

Middle Managers

direct the activities of other managers and sometimes also those of operating employees. They work with top managers and coordinate with peers to develop and implement action plans to accomplish organizational objectives.

Lower level managers

Are responsible for leading employees in the day-to-day tasks, which contribute to the organization's goals. they are also referred to as "first line" or "front line" managers. 

types of managers

Line managers

staff managers

administrators managers

Line managers

are directly concerned with accomplishing the goals of the organization. The decisions they make with regards to operations are expected to be final and must be implemented.

staff managers

are in charge of units that provide support to the line units. In doing their work, they use special expertise to advise the line workers

Administrators

are managers working in government or in nonprofit organizations. Examples include school administrators, provincial administrators, and hospital administrators.

What skills do first line manager have?

less conceptual skills

more human and technical skills

What skills do middle manager have?

need more conceptual skills and human skills

less on technical skills

What skills do top managers have?

more on conceptual skills and the same degree of human skills

less concern about technical skills

What are management skills?

technical skills

human skills

conceptual skills

technical skills

refer to the abilities to use special proficiencies or expertise in performing specific tasks. They refer to the use of tools, techniques, and specialized knowledge. Examples of technical skills are an accountant preparing a financial report, an architect working on a building plan

human skills

refer to the abilities to work well in cooperation with other persons; whether they are subordinates, peers, or superiors.

conceptual skills

refer to the ability of the manager to see the organization as a whole and to solve problems in ways that benefit the total system. Specifically, the manager who possesses these skills is expected to analyze and solve complex problems.

a.  identity problems and opportunities;

b. gather and interpret relevant information; and

C. execute problem-solving decisions that serve the organization's purpose.

what are managerial roles?

1. Interpersonal Roles

2. Informational Roles

3. Decisional Roles

Interpersonal Roles

These are the roles the manager plays when he interacts with others.

what are specific roles under this category?

figurehead

leader

liaison

figurehead

he acts as the symbolic head of the organization and as a result, he is expected to perform a number of duties of a legal or social nature.

leader

This role makes the manager responsible for the motivation and activation of subordinates. As such, he is responsible for actions in staffing. training, and other associated duties.

liaison

makes contacts with individuals in and out of the organization to facilitate the accomplishment of related work in his department.

Informational Roles

A very important aspect of the manager's job is to receive and communicate information. Such roles are vital to his decision making tasks.

what are specific roles of informational roles?

monitor

disseminator

spokesperson

monitor

the manager is expected to collect information that will be useful in performing his job. This information is shared with other members of the organization whenever they are needed. 

disseminator

There are certain types of information that the manager may consider useful to his subordinates. When he receives such information from outsiders or from subordinates, he transmits them to the concerned members of the organization.

spokesperson

There are occasions when outsiders seek information about the organization, and the manager he also serves as expert on organization's industry. 

Decisional Roles

 The major part of the manager's job is to make decisions. As such, The must use the information he processes to make decisions that solve problems.

specific roles of decisional roles

entrepreneur

disturbance handler

resource allocator

entrepreneur

the manager searches the organization and its environment for opportunities and initiates projects to bring about positive change. He also supervises the design of certain projects.

disturbance handler

the manager is expected to respond to such unwelcome pressures by formulating strategies and reviewing such disturbances

resource allocator

The manager is responsible for the allocation of organizational resources of all kinds such as personnel, funds, machines, or buildings and facilities to individual employees or units.

Organization

a collection of people working together to achieve a common purpose. It is the means used by people to achieve certain objectives. A mere grouping of people will not qualify as an organization unless it has some objectives to achieve.

what are common characteristics of organization?

coordination of effort

common goal or purpose

division of labor

hierarchy of authority

coordination of effort

When properly directed, persons working in coordination with others will produce better outputs than when they work independently. 

common goal or purpose

In order to make employees work with proper direction, they must be provided with a common goal or purpose.

division of labor

When the total job is divided into manageable parts, workers will be more familiar with their assignments, making them more proficient.

hierarchy of authority

In controlling the behavior of employees, positions are established and linked by a chain of command in a continuous branching out so that multiple layers exist in the hierarchy.

what are 2 basic principles of management and organization?

Management Principles

Principle of Organization

what are 14 principles of Management Principles?

Division of labor

authority

discipline

unity of command

unity of direction

subordination of the individual interests to the general interests

Remuneration

centralization

scalar chain

order

equity

stability of tenure

initiative

esprit de corps

Division of labor

This means breaking a job into specialized tasks to increase productivity. For example, the total job of financing appliance sales may be divided into tasks such as credit investigation, collection, sales, and accounting. 

authority

This is the right of a person in position to give orders and the power to exact obedience.

discipline

This provides uniform application of behavior to certain activities the outcome of which is readily predicted.

unity of command

This means that each employee must have only one supervisor. Reporting directly to more than one superior creates problems and reduces productivity. 

Unity of Direction

This means that the efforts of everyone in the organization must be coordinated and focused in the same direction.

Subordination of the Individual Interests to the General Interest

This means that the goals of the organization (e.g., 25% ROI for the current year) should take precedence over individual goals like a 10% increase in the salaries of certain employees.

Remuneration

Employees should be paid fairly in accordance with their contribution to the organizational effort. This must be applied to salaries, bonuses, and benefits. 

Centralization

Power and authority must be centralized as much as practicable.

scalar chain

This means that subordinates should observe the official chain of command unless authorized by their respective superiors to communicate with each other.

Order

This means that human and non-human resources must be in their proper places. The production manager, for example, must hold office at the production site. 

Equity

This is the result of kindliness and justice and is a principle to guide management and employee relations.

Stability of Tenure

High employee turnover is counterproductive. To motivate employees to stay with the company, effective manpower planning and implementation are necessary.

Initiative

Management should encourage employees to act on their own volition when confronted with an opportunity to solve a problem.

Esprit de Corps

This means that managers should emphasize teamwork by building harmony and a sense of unity among employees.

what are the different principles of organization?

Principle of objective

Principle of analysis

Principle of simplicity

Principle of Functionalization

Principle of objective

The objective of the organization must first be determined and laid out clearly before any activity is undertaken.

Principle of analysis

Managers in organizations must be able to break a problem down into its components, analyze these components, and then come up with a feasible solution.

Principle of simplicity

The organization should be built in the simplest manner that could make the achievement of objectives possible. Only activities that are absolutely necessary should be undertaken, and those, which are not, should be eliminated.

Principle of Functionalization

Business firms are not supposed to be organized to accommodate individuals. Rather, it should be built around the main functions of the business.

What are the two major forms of business ownership?

Major forms

Minor forms

What are under major forms?

Sole proprietorship

Partnership

Corporation

Is a type of business entity owned and operated by a single person. The big percentage of businesses is owned by sole proprietors indicates the popularity of this ownership type.

Sole proprietorship

Advantages of sole proprietorship

Ease and cost of formation

Secrecy

Distribution and Use of profits

Control of the Business

Government Regulation

Taxation

Closing the Business

Ease and cost of formation

The sole proprietorship is the easiest and least costly to organize

Secrecy

One way of effectively competing with other firms is to know the moves, as well as the strengths and weaknesses of competitors. The sole proprietor has an advantage of keeping his intentions secret.

Distribution and Use of profits

If because of his efforts, the business made some profits, the sole proprietor is the sole beneficiary. He does not have to share these with anyone.

Control of the Business

The owner is also vested with the power to solely control solely the business and sole authority is very important especially under critical competitive situations.

Government Regulation

The sole proprietorship is spared from various government rules which apply to partnerships and corporations.

Taxation

The net income of the sole proprietorship is treated as the personal income of the sole owner and is taxed accordingly.

Closing the business

Sole proprietorships can be dissolved by the owners at will.

Disadvantages of Sole Proprietorship

Owner’s lack of ability and experience

Difficulty in attracting good employees

Difficulty of raising capital

Limited life of the firm

Unlimited Liability of the proprietor

Owner’s lack of ability and experience

The success of the sole proprietorship will depend largely on the management skills of the owner.

Difficulty in attracting good employees

Sole proprietorships are not known for surviving long periods. The existence of a sole proprietorship is co-terminus with the life of its owner.

Difficulty of raising capital

raising capital will depend on the financial resources of the sole owner

Limited life of the firm

The existence of the sole proprietorship depends on the physical well-being of the owner.

Unlimited Liability of the proprietor

In theory, the sole proprietor could lose “even his shirt” if all his other assets are not enough to cover all claims against his business.

A legal association of two or more persons as co-owners of an unincorporated business

Partnership

advantages of partnership

ease of formation

pooling of knowledge and skills

more funds available

ability to attract and retain employees

tax advantage

ease of formation

The only requirement of before the partnership commences operations is for partners to agree on basic aspects of the business like the nature of business, location, capitalization, and so on.

pooling of knowledge and skills

the combined knowledge and skills of the partners provide the partnership with a distinct advantage.

more funds available

the combined resources of the partners provide a bigger source of funds

disadvantages of partnerships

unlimited liability

limited life

potential conflict between partners

difficulty in dissolving the business

limited life

when a partner dies or withdraws from the business and experiences bankruptcy, the partnership is terminated

potential conflict between partners

there are occasions when partners disagree on certain ways of operating the business

what are types of partnerships?

general partnership

limited partnership

general partnership

an association of two or more persons, each with unlimited liability, are actively involved in the business

limited partnership

an arrangement in which the liability of one or more partners is limited to the amount of assets they have invested in the business

Corporation

An enterprise chartered by law, with most of the legal rights of a person, including the right to conduct a business, to own and sell property, to borrow money, and to sue or be sued.