PH 103: Management functions

Planning

Is the process of developing, organizing,

and evaluating the activities required to

achieve a desired goal.

- It is an organization’s purposeful effort

to maximize its future success.

Henri Fayol

a French industrialist, was the first to

develop a theory on general management, which is

widely used today. His greatest contribution was his

discussion of management principles and elements in 14 principles of management

Division of work

Specialized jobs are assigned to various

departments and/or positions.

- Specialization improves efficiency

- The concept of work division implies a narrowly

defined job for each employee.

- Tasks should be divided so employees can focus

on specific roles

Authority and Responsibility

Employees should have the authority to ensure

the performance and completion of tasks

assigned to them.

- Those who are given authority over some

functions should also be held responsible for

these functions

- Managers must have the right to give orders;

With authority comes accountability

Span of control

This refers to the limitation on the number of

subordinates that a manager can effectively

administer and control

- The principle of span of control states that there are

only so many employees a manager can effectively

supervise.

- The key factors affecting the span of control are

employee training, employee communication,

extent of planning and the need for support or

assistance.

Unity of command

An employee must report to a single direct

supervisor with whom he or she is responsible.

- This prevents confusion and conflict

- A corollary of the above is the rule against “by-

passing”. This rule states that a supervisor should

avoid giving orders directly to the subordinates

of his or her subordinate.

Unity of direction

Every employee must understand and be willing to

work for and toward the business’s goals.

- Teams with the same objective should follow

one plan

- If there is no unity, then the pharmacy’s effort

and work become fragmented and tend to split

in different directions.

Subordination of individual interest to general interest

The interest of one individual or group of

individuals should not outweigh the interests of the

business

- Encourages teamwork and loyalty

Renumeration

There should be a fair method of payment that

affords the maximum possible satisfaction to both

the employees and the employer

- This principle is based on “equal pay for equal work”

- Can include financial and non-financial rewards

Centralization

This refers to the extent to which authority is

concentrated.

- This principle of management ensures that major

policies and decisions are made only by the top

management.

- Decision-making should be balanced; Depends

on the organization’s size and needs

Scalar chain

In the structure of any organization, the ultimate

authority lies at the top and communication flows

downward.

- The scope and limitation of authority must be

acknowledged both on paper and in the mindset

and actions of employees.

- Describes the clear hierarchy from top to bottom

Order

This ensures that employees are assigned and

resources are allocated properly in the organization.

- Everything and everyone should be in the right

place

- Promotes efficiency and reduces chaos

Equity

It involves fair and kind treatment of employees

- Managers should treat employees fairly and

kindly

- Builds trust and loyalty

Stability of tenure

Unnecessary labor turnover can be the cause and

effect of bad management

- Employees should be given enough time and

opportunities to prove their worth to the company.

- Long-term employment fosters expertise and

commitment

Simplicity

Unnecessary elements that could complicate plans

and/or activities should be eliminated from all

activities as well as from the processes and

procedures established for carrying them out.

Esprit de corps

This principle explains that “in union, there is

strength.”

- It emphasizes the need for teamwork and the

importance of communication and cooperation in

achieving the goals of the team.

- Unity and harmony lead to better results

Strategic planning

PURPOSE

- This ensures the effectiveness

of an organization.

- It addresses the organization’s

course of action, what kind of

business it is in, and provides a

framework for more detailed

plans and day-to-day decisions

CHARACTERISTICS

- Long term (5- 20 years); scope

includes all aspects of the

organization; viewpoint is

external- how the organization

interacts with or controls its

environment.

Operational planning

PURPOSE

- This ensures that the

organization is prepared to

effectively perform and

accomplish its tasks and

objectives or to strategize to

achieve its goals

CHARACTERISTICS

- Short term (1- 5 years); scope is

specific to the immediate actions

that need to be taken to move the

organization forward; viewpoint

is internal- day-to-day

accomplishment of tasks

Business Planning

PURPOSE

- This determines the

profitability of a specific

business or program.

- It is used in deciding on

whether to invest or move

forward with a program

CHARACTERISTICS

- Short term (1-5 years); can be

used to make major decisions

regarding new business ventures,

expansion, or termination

Resource planning

PURPOSE

- This guarantees the availability

of resources needed to carry

out its strategies to achieve the

organization’s goals.

- It can range from

comprehensive (which

involves all resources

necessary) to specific (which

involves specific types of

resources)

CHARACTERISTICS

- Midterm (1- 10 years); scope is

specific to the resource/s defined

in the plan- specific resources

may include human resources,

information technology

resources, financial resources,

capital and facilities, and others;

viewpoint is internal- the resource

needs of the organization

Organizational Planning

PURPOSE

- This ascertains the

coordination and orderly

arrangement of an

organization to face any

challenges in the future.

- Key elements include

reporting relationships and

definitions of responsibilities

and authority

CHARACTERISTICS

- Midterm (1- 10 years); scope is

specific to the structural aspects

of the organization, including

divisions, reporting relationships,

coordination, and control;

viewpoint is internal-how the

company organizes itself

Contingency Planning

PURPOSE

- This provides a fallback for the

organization in case the

original plan fails or in case of

an unforeseen event.

- It can occur for anticipated

situations such as business-

related crises (labor strikes),

natural disasters, and changes

in management

CHARACTERISTICS

- Short to long term (1- 20 years);

scope is specific to the situations

that may occur; viewpoint is both

external (if the situation is created

in the environment) and internal

Strategic planning

process of identifying and

determining the organization’s goals, policies, and programs.

Vision Statement

-is the pharmacy’s desired goal- how it

perceives itself to be in the future

- should be concise but

meaningful

- should be motivational and

should prompt people to strive for something

greater

Mission statement

is the pharmacy’s purpose

-defines the company- what it

is and what it does

- It is a statement of the present going ahead into the

near future

- It is a document that creates a sense of purpose for

the customers and the employee

Objectives

are established at the organizational,

departmental, or individual level. It has something to

do with the direction that an individual or

organization wants to pursue.

Goals

prescribes a definite scope and suggests a

direction to maximize the efforts of a manager

Strategy

method of shaping a company’s future

and involves determining the organization’s long-term

direction.

Pre-planning phase

- This can be defined as the planning of the steps

necessary to organize the strategic planning effort- or

the “planning for the planning”

- This phase deals with defining the objectives of the

plan and the procedures to follow to accomplish these

objectives

- It should also identify the individuals

involved, the location, and the time allotted for

planning

Planning phase

- This can be referred to as strategizing, in which ideas

and suggestions are developed for the pharmacy

organization.

- In strategic ______, the “destination” is the

organization’s vision of its future. After crafting a

vision statement, planners must analyze and define the

current situation.

Post-planning phase

- This phase involves three important steps: (a)

communication, (b) implementation, and (c)

monitoring progress once the plan is implemented.

- The actual implementation of the strategic plan

requires managers and executives of the organization

to understand the long-term while also determining

and taking the steps necessary to accomplish the short-

term objectives.

Decision-making

is the essence of management.

This involves selecting a specific course of action from

several possible alternatives, even if it has already been

planned or is currently being planned.

A significant investment of time, resources, effort,

personnel, and materials is required to make a

decision.

Set objectives

- Make at least one decision

- Make a series of decisions

Identify constraints

- Constraints should be defined by legal, economic, or

political considerations

- Decision constraints are sometimes presented in

terms of desired specifications or performance

standards.

Identify alternatives

- Alternatives are chosen because they provide a

solution

- But often, one of the alternatives does nothing or has

the least advantage

Gather appropriate information

- Information depends on the complexity and scope of

the possible decision or choices

- Information is gathered to provide insight as to which

alternative to choose

Evaluate the alternative

Decisions can be rendered based on available

information

Choose the most acceptable alternative

The manager examines the ranking of alternatives

Organizing

Is the process of classifying and categorizing

personnel, establishing relationships among

them, and defining their authority and

responsibilities.

- It is the process of establishing the utility of

all resources in the management system

Differentiation

also known as complexity)

- Degree to which units are dissimilar

Formalization

- Degree to which jobs in the organization are standardized

Centralization

- Refers to the concentration of decision-making power at a

single point in the organization

Horizontal differentiation

it describes the differences

among workers or units in an organization.

- This may include their education, type of training, and

the tasks assigned to them

- It may also refer to the multi-ownership of different

firms from a variety of related industries

Vertical diferrentiation

it focuses on the differences in

hierarchical positions.

- This involves the “chain of command” in an

organization

- Represented by what is known as an organizational

chart. It shows how tasks are delegated among

employees and who reports to whom in the organization

Spatial differentiation

it involves location, specifically

the sites of an organization’s units, whether they are in

one place or spread across several areas

- This can also occur when an organization has different

departments located in different areas.

Division of labor

in the pharmacy is expected to result in

heightened efficiency in the utilization of the specialized

skills of individual employees

Parity of authority and responsibility

Responsibility for decisions cannot be passed on, while

the authority to make them can be shared and/ or given

to others.

Unity of command

This refers to the idea that an individual employee must

report to only one supervisor or manager

- A matrix organization integrates the activities of

different specialists while maintaining specialized

organizational departments

Span of control

- This refers to the number of employees a manager can

effectively control.

Departmentalization

- Refers to the categorization of individuals according to

the specific tasks they must perform

Organizational chart

shows the composition of an entire

business, for each department, or for each section of a business

• Diagram or chat that shows the important aspects of the

organization

• Purposes:

• To assist in viewing the firm’s whole structure

• To help management in dividing the different duties or

functions in the business

• To show the grouping of departments to easily direct and

control activities

• To sort the responsibilities of the positions so there will be

no wasted time or effort

Line organization

- Refers to the straight and direct line of responsibility

and control from the top management

- A straight and direct line of responsibility and control

is established from the general manager to the

department or section head who shares the same level of

authority and is independent of the other

Line and staff organization

This employs the assistance of a specialist

- Makes use of the features of the line organizational

structure, but is assisted by technical specialists who

have expertise in some of the finer points of the

business

- This violates the principle of Unity of command

Organization by time

One of the simplest methods of organizing a group

of employees is based on their working hours

Organization by number

This can be applied when a group of employees with

a similar skill set or specialization is too large to be

effectively supervised by one person

Organization by function

This structure is applied where there is

considerable diversity in jobs and skills

required to accomplish a task satisfactorily

Professional functions

Prescription dispensing, patient consultation, patient drug record system,

home health aids and professional relations

Merchandising functions

Purchasing, inventory control, display advertising and personal selling,

except prescription and professional goods

Financial functions

General financing, budgeting, accounting, operational analysis, and control

Personnel functions

Recruiting, selecting, terminating training, employee performance

evaluation, wage determination, and other employee relations, including

fringe benefits

Delegation

It refers to the process of assigning responsibility and

authority to lower-level employees.

Responsibility

the task or duty designated to a

particular individual position

Authority

refers to the power or the right to give

orders. It is the sum of the power and rights

entrusted to the individual to ensure the

performance and accomplishment of the task

Accountability

- It is the condition of being held responsible for

the task delegated, whether the task is being

performed properly or not.

- Accountability cannot be delegated

Traditional

It is the right to give orders, assign

tasks, and jobs, and expect and exact obedience

from subordinates

Behavioral, Social scientist

It is the belief that

authority and power are given to the superior by

the subordinate

Functional

Assumes authority based on the

expertise and experience of the person, and by

one’s specialization