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Mindanao State University


Marawi City



Course Code : Management 11/ Management 101

Course Title : Principles of Management
Course Description :

This course is designed to give students a fundamental knowledge to one of the most
important and interesting disciplines of business – the field of management. As the first step
towards managerial empowerment, this aims to provide a valuable glimpse of introduction
to the concepts of management and business, as well as, essential skills in planning,
organizing, staffing, directing and controlling, decision-making, motivating and
communicating. The course will further help students in addressing challenges inherent to
managing people in preparation for future careers in a very competitive, diverse and
dynamic environment.

Credit : 3 units (3 hrs./week or 54 hrs./semester)

Pre-requisites : English 2 and Math 1


1. Team Research Project and Presentation of Output
2. Compilation of Self-Assessment Journal
3. Compilation of Case Analysis Output


Upon completion of the course, the students will be able to:

1. Analyze brief background of business in local, national and international
2. Identify and examine management principles, role, skills, levels, and functions
3. Trace the origin of various concepts which concern the science of modern
business management
4. Recognize the art of planning, organizing, staffing, directing and controlling as
those classified to be essential management functions in the conduct of both
classical and contemporary business undertaking
5. Explain the link between the five functions of management

1. Support the Vision, Mission, Goals and Objectives of the Department, the
College and the University as a whole
2. Demonstrate ethical leadership and good business practices
3. Apply appropriate management approaches to respond to critical conflicts
affecting people in an organization
4. Build a strong foundation in the pursuit of effective, efficient and well-managed
business organizations

1. Reflect on their future role as good Managers and Business leaders in uplifting
their subordinates’ Quality of Work Life and the nation’s welfare as a whole
2. Demonstrate knowledge on the impact of management to physical, financial
and human resources
3. Diagnose current issues and challenges facing managers such as Total Quality
Management (TQM), Human Resource Management, team building and
information systems
4. Actively participate in the deeper understanding of Business Management as a
crucial field of study


By: Dr. Conrado E. Inigo, Jr.


By: McGrawhill Education


By: David Holt

By: Feliciano R. Fajardo


By: Dr. Gregorio S. Miranda and Ms. Carmelita Miranda

By: Cynthia A. Zarate


1 1.5 1. Vision, Mission and • Support the vision, • Lecture/ • Students to
Conduct mission of the Discussion submit
1.1 Vision, mission & core University, the • Sharing of reflection
values of the College and the expectations paper on their
University Department from the realization
1.2 Vision, mission and • Explain the teacher and from the initial
goals of the College subject content the students discussion
of Business and grading
Administration and system
Accountancy and the • Identify and
Management comply with the
Department policies in
1.3 Code of Conduct for Management
Students 101/11 to
1.4 Classroom Policies maximize learning
and grading system • Explain the
1.5 Discussion of the relationship
course syllabus between and
2. Overview of the Course among various
courses and
1-2 4.5 3. Overview of Business • Relate why people • Games • 15-minute
and Management basically engage in • Lecture/ Group
3.1 The Underlying business and presentation
Framework of management on the
• Group
Business • Discuss the nature, research
3.2 Relationship of Research topic, “Top
elements and
Business, Economy and Sharing Performing
structure of modern
and Management of insights Local (or
business systems
3.3 Elements of about the International)
• Give examples of topic
Business System local and Firms” (with
3.4 Kinds of Business • Debate at least four
3.5 Legal Forms of business firms and members)
Business differentiate them • Students to
3.6 Kinds of Economic by its kinds and submit a list
System forms of 10


3.7 Phases of • Review the kinds of examples of
Economic economic system, firms
Development as well as, the classified
phases of economic according to
development as its kinds and
they affect Forms”
businesses in a • Assignment:
certain country Case
Output by
Group (same
• Students to
submit a
journal on
their learning
relating to
the topic
3-4 4.5 4. Management Principles • Demonstrate • Games • 2-minute
and Practices awareness on the • Lecture/ Graded Oral
4.1. Definition, value of Recitation on
Significance and management the
Functions principles and • Individual assignment
of Management practices in Assignment given,
4.2. Role of a Manager business and Sharing “Successful
4.3. Management organizations of insights Managers
Hierarchy about the
• Define the basic topic
here and
4.4. Managerial Skills functions of abroad”
management and • Video • Experiential
discuss why Presentation Exercise:
management is Personal
needed in Assessment
business, why on
managers are Management
necessary, and of Skills
why management (PMAS) by
is a challenge David A.
• Practice the roles Whetten &
that managers Kim S.
adopt to perform Cameron
the basic functions • Quiz on the
of management; topic
• Identify where in • Students to
an organization submit a
managers are journal on
located their learning
• Outline the skills relating to
and competencies the topic
that managers
must have to be
4-5 4.5 5. Evolution of • Trace how • Group • Quiz on the
Management Theories management Activity topic
5.1 Classical Approach approaches are • Lecture/ • Assignment:
to Management evolving in today’s Discussion Case
5.2 Behavioral business Analysis
Approach to environment • Home
Reading Output by
Management • Analyze the Group (with
5.3 Systems Approach nature of • Video at least three
to Management management at Presentation members)


5.4 Quantitative different era of • Debate • Students to
Approach to evolution and how submit a
Management each approach journal on
5.5 Modern Approach varies from one their learning
to Management another relating to
• Relate theories to the topic
students’ practical
experience and
day to day
• Apply appropriate
approach in
different situations
6-7 4.5 6. The Concept of • Share insights on • Lecture/ • Experiential
Planning the critical function Discussion Exercise:
6.1 The Nature of of planning as it • Group Revising the
Planning contributes to a Activity University’s
6.2 The Hierarchy of firm’s core Mission,
Planning/ competencies • Group Vision and
Major and Other Presentation
• Examine different Value
Types of Plans levels of planning • Video Statements
6.3 Mission, Vision, in an organization Presentation • Assignment:
Goals, Objectives
• Outline the value Case
and Values Analysis
of a firm’s VMGO
6.4 The Formal Output (with
Planning Process • Identify the main
pitfalls that at least four
6.5 Planning Tools and members)
Techniques managers
encounter when • Students to
engaged in formal submit a
planning journal on
processes, and their learning
adapt appropriate relating to
tools and the topic
techniques to limit
those pitfalls
8 1.5 7. The Nature of Decision • Identify the • Lecture/ • Students to
Making essential Discussion submit an
7.1 Adaptability and characteristics of • Sharing of essay on one
Creativity decision making insights poor decision
7.2 The Decision and indicate the about the they made in
Making range and types of the past and
Environments decisions a how they are
7.3 The Rational manager is asked • Video going to
Decision Making to make Presentation make better
Process • Discuss the major decisions in
reasons for poor the future
decision, and • Quiz on the
describe what topic
managers can do • Students to
to improve submit
decision-making reflection
skills. paper on
from the


8- 6 8. The Concept of • Trace the • Lecture/ • Experiential
10 Organizing relationship Discussion Exercise:
8.1 Organizing Defined between planning • Group Company-
8.2 The Nature and and organizing as making
Development of they contribute to • Assignment:
Organizations a firm’s core • Group
• Organization competencies Presentation
Defined • Critique on the • Video Output (with
• The Core of pros and cons of Presentation at least four
Organizations formal and members)
• Organizational informal • Quiz on the
Structure and organizations, topic
Its Types centralized and • Students to
• Organizational decentralized, or submit
Chart bureaucratic and reflection
8.3 Delegation organic. paper on
8.4 Departmentalization • Express the their
and its Types importance of realization
8.5 Reorganization delegation in from the
organizations discussion
• Summarize ways
to which
organizations can
be structured and
present each
structure in an
• Explain why many
change efforts fail,
and identify what
managers can do
to avoid failure
10- 4.5 9. The Concept of • Trace the • Role play • Situational
11 Staffing relationship • Lecture/ Analysis on
9.1 The Staffing between different
Process organizing and Staffing
- Human staffing as they • Group Processes
Resource contribute to a • Assignment:
Planning firm’s core • Group Case
- Recruitment competencies Presentation Analysis
- Selection • Discuss the • Video Output (with
- Placement relationship Presentation at least four
and between the members)
Orientation organizational • Quiz on the
- Training and structure and topic
Development human resource • Students to
- Types of planning and submit
Training staffing reflection
- Training processes. paper on
Techniques • Recognize the their
9.2 Changes in importance of realization
Employee Status employee training from the
and development discussion
and suggest
major benefits
that can be
derived from
effective training


• Enhance critical
thinking on the
impact of status
change to
employee and
how important
managers’ role
are as change-
12- 7.5 10. The Concept of • Trace the • Group • Situational
14 Directing relationship Activity Analysis on
10.1 Directing Defined between staffing • Activity by different
10.2 Communication and directing as Pair: Directing
Defined they contribute to Processes
• Role play
- The a firm’s core • Experiential
Communication competencies • Lecture/ Exercise:
Process • Develop effective Discussion Leadership
- Types of communication, • Group Style Survey
Communication motivation and Presentation • Assignment:
- Ways and Barriers leadership skills • Video Case
to Communication • Identify the Presentation Analysis
10.3 Motivation Defined sources of noise Output (with
- A Model of that lead to at least four
Motivation: Drives miscommunicatio members)
and Needs n within • Quiz on the
- Types of organizations and topic
Motivation formulate steps • Students to
- Approaches to managers can submit
Motivation: take to improve reflection
Content and communication paper on
Process Theories within their their
10.4 Leadership organizations. realization
Defined • Demonstrate from the
- Approaches to awareness on the discussion
Leadership impact of
10.5 Management motivation to
Filipino Styles employees’
perception of a
Quality Work Life
• Explain why good
leadership is
critical for success
as a manager and
apply the right
approach to
various situations
15- 4.5 11. The Concept of • Review the • Individual • Graded Oral
16 Controlling relationship Assignment Recitation
11.1 Controlling Defined between planning, and Sharing • Students to
11.2 The Control organizing, of insights submit an
Process staffing & about the essay on 3
11.3 Types of Control directing as it topic practical
11.4 Control Methods consummates to • Lecture/Disc experiences
11.5 Quality, Production the final aspect of ussion applying the
and Inventory controlling – a
• Group functions of
Control contributory POSDICON
function leading to
• Video • Assignment:
the overall
Presentation Case


competency of a Output (with
business firm at least four
• Discuss the members)
attributes of a • Quiz on the
typical topic
organizational • Students to
control system submit
and align process reflection
to the strategy paper on
and structure of their
an organization realization
• Practice effective from the
control of quality, discussion
production and
inventory to
16- 3 12. Introduction to the • Recognize the link • Role Play • Graded Oral
17 Different Areas of between different • Lecture/Disc Recitation
Management areas of ussion • Students to
12.1 Human Resource management and • Recitation submit a list
Management the various means of 10
by which • Sharing of
12.2 Production examples of
managers insights
Management firms
exercise their about the
12.3 Marketing operating in
functions topic
Management different
• Adapt effective • Video areas of
12.4 Materials and
and efficient skills Presentation Management
Management to meet • Assignment:
managerial Case
12.5 Financial
challenges in the Analysis
field of human Output (with
12.6 Management resource,
Information at least four
production, members)
System marketing,
12.7 Office procurement, • Quiz on the
Management financial, topic
information • Students to
technology and submit a
office journal on
management. their learning
• Prepare for a relating to
much the topic
discussion of
specific Areas of
Management in
the next


Every student is expected to:

1. Come to each class prepared and participate in the class discussions;
2. Take all quizzes/examinations on the date scheduled;
3. Read all the assigned topics prior to class;
4. Solve assigned problems prior to class;


5. Submit course requirements, if any, on time;
6. Abide with class policies; and
7. Understand the course syllabus.


Academic Dishonesty
All students are expected to be academically honest. Cheating, lying and other forms of unethical behavior
will not be tolerated. Any student found guilty of cheating in any assignment, quiz, examination or
plagiarism in submitted course requirement will receive a grade of 5.0 or failure in the said quiz or
examination or plagiarism in submitted course requirements.

Absence and Tardiness

The University policy on absences and tardiness is hereby adopted.

Unless authorized by the professor, use of cell phone, laptop, tablet and other similar gadgets inside the
classroom is strictly prohibited.

Quiz and major examination

Quiz may be announced or unannounced, while major examination is always announced. Major
examination shall be departmental with the following distribution of degree of difficulty of questions: 60%
or 70% easy, 30% or 20% average and 10% difficult, as the case maybe. Special quiz or examination is
given if a student can present to the department valid reason (s), otherwise no special quiz or examination
shall be given.

Seat Plan
A seat plan shall be adopted. Any student not in his/her designated seat shall be considered absent.

Dress Code
The university dress code is hereby adopted. If the students (3rd Year and 4th Year) shall agree among
themselves to have a uniform, the same shall be voluntary.
Submission of Course Requirement, if any
All course requirements, if any, shall be submitted on the date scheduled, otherwise the professor may at
his discretion refuse to accept such requirements. If a professor would accept late course requirement,
points at a rate of 10 points per day of delay shall be deducted.

The university code of conduct on matters not covered by this syllabus shall be adopted.


Prelim Examination 20% 96 – 100 1.00
Midterm Examination 20% 91 – 95 1.25
Final Examination 20% 86 – 90 1.50
Quizzes, Assignments & Research Project 15% 81 – 85 1.75
Group Presentation 5% 76 – 80 2.00
Attendance and Oral Recitation 10% 72 – 75 2.25
Case Analysis & Self-Assessment Journals 10% 68 – 71 2.50
100% 64 – 67 2.75
60 – 63 3.00
BELOW 60 5.00


1. Vision, Mission and Conduct
1.6 Vision, mission & core values of the University
1.7 Vision, mission and goals of the College of Business Administration and Accountancy and
the Management Department
1.8 Code of Conduct for Students
1.9 Classroom Policies and grading system
1.10 Discussion of the course syllabus

2. Overview of the Course

3. Overview of Business and Management


Under the free enterprise system, the growth of the economy lies in the ability of
private individuals to achieve economic objectives. The quest for profit is usually
undertaken by engagement in business operations. Business firms and the government are
expected to provide goods and services to the society. The major part of this task, however, is
assigned to the private business firms. Under the system, firms are free to compete with each
other and competition leads to the offering of new and improved products and services to the
society. The standard of living is raised or lowered depending to a large extent on the
performance of business firms.
Business is largely responsible for bringing into the market a wide array of products,
which were not made available in the past. High technology items like colored television, video
equipment, cellular phones and computers are sold openly in the market. This happens even
as business firms continue to provide mankind with basic necessities like food and shelter.
Even amusement centers like Disneyland and resorts like Boracay are made possible because
of business.

Business may be defined as all profit-seeking activities and enterprises that provide
goods and services necessary to an economic system.

A business firm is established primarily for profit. There are other reasons, however, why
anyone would want to start a business. Some of these are to do work that is enjoyable, to do
something for pleasure and pride, and to achieve financial independence.

Professional managers maintain that a business firm should achieve the following multiple
objectives: 1 creation and distribution of product or service; 2 satisfaction of personal
objectives like profits for owners, salaries and other compensation for executives, wages and
other compensation for employees, psychic income for all, including pride in work, security,
recognition and acceptance; 3 protection and enhancement of the human and physical
resources of society; and 4 economy and effectiveness of operation.


The critical role that business plays in the economy cannot be overemphasized. Imagine
a world where we have to produce everything that we consume – food, clothes, vehicle,
furniture, etc. it not only takes time and effort but oftentimes huge resources in order to build or
manufacture what we consume. Business obtains such resources as materials, labor, and
equipment to be able to produce goods and services. As a result of business, commerce and
markets, consumers are able to live more comfortably and improve their standard of living
conditions. Consumers are able to enjoy a variety of goods and services because procedures
and suppliers compete for markets and regularly attempt to improve their products and services
so that the same will be patronized.


Select a Philippine Corporation and develop (with the help of the Internet, the school library or
other sources) a short (1 or 2 pages) profile of the corporation. Groups of 4 or 5 members each
are to be formed, whereby each group will select one of the written corporate profiles and
discuss that corporation. At the end of the discussion, the group will answer the following
question: “How important is our chosen business organization for the Philippine economy?


1. Land – all natural resources needed for production in business including the land itself
2. Labor – physical and mental input of the people who produce the goods and services
3. Capital – the financial resources needed in production of goods and services
4. Entrepreneur – the one who buys and organizes the land, labor and capital to provide
goods and services


1. Commerce. Business firms which are engaged in buying and selling of goods and services.
Also included in this category are trading, merchandizing, and marketing. Ex.
Supermarkets, dry good stores, peddlers, sari-sari stores, importers, etc.
2. Industry. Industries which are mainly engaged in production. Goods produced intended for
ultimate consumption are consumer’s goods while goods for use of business and industry
are called producer’s goods.
a. Genetic industries are those involved in agriculture, forestry, and fish culture
b. Extractive industries are those involved in extraction of goods from natural resources
which include mining, lumbering, hunting and fishing
c. Manufacturing industries convert raw materials into finished products like firms
engaged in manufacturing drugs, plastics, food, liquor, footwear, motorcars, tools, office
supplies, etc.
d. Construction industries are those engaged in building infrastructures like airports,
seaports, dams, and highways and dwelling units
3. Services. A business which sells service to the buyer.
a. Recreation – movie houses, television, radio stations, theaters, resorts
b. Personal – restaurants, barber shops, transportations, hotels, tailoring shop
c. Finance – bank, insurance companies, investment houses, financing institutions, credit
unions, savings and loans associations


Forms of Business Ownership

1. Sole Proprietorship is a type of business entity owned and operated by a single person.
a. Ease and cost of formation
b. Secrecy
c. Distribution and use of profits
d. Control of the business
e. Government regulation
f. Taxation
g. Closing the business
a. Owner’s lack of ability and experience


b. Difficulty in attracting good employees
c. Difficulty in raising capital
d. Limited life of the firm
e. Unlimited liability of the proprietor

2. Partnership is a legal association of two or more persons as co-owners of an

unincorporated business
Types of Partnership
A. GENERAL PARTNERSHIP is an association of two or more persons, each with
unlimited liability, who are actively involved in the business.
B. LIMITED PARTNERSHIP is an arrangement in which the liability of one or more
partners is limited to the amount of assets they have invested in the business.
a. Ease of formation
b. Pooling of knowledge of skills
c. More funds available
d. Ability to attract and retain employees
e. Tax advantage
a. Unlimited liability
b. Limited life
c. Potential conflict between partners
d. Difficulty in dissolving the business

3. Corporation is 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. Owners of corporations are called stockholders and they are issued with
certificates of ownership called stocks.
a. Limited liability
b. Ease of expansion
c. Ease of transferring ownership
d. Relatively long life
e. Greater ability to hire specialized management
a. More expensive and complicated to organize
b. Double taxation
c. More extensive government restrictions and reporting requirements
d. Employees lack personal identification with and commitment to corporate goals

Modifications of the Corporate Form of Ownership

The corporate form of ownership has been modified to cater to special needs.
1. COOPERATIVES is an organization composed of individuals or small businesses that have
banded together to reap the benefits of a larger organization. It is no organized for profit, but
to make its members individually profitable or to save money.


a. Credit union – accepts deposits from members and lends money to its members at a
very reasonable interest rate
b. Producers cooperative – assists one another in the procurement of raw materials,
machinery, equipment, and other time-saving devices
c. Marketing cooperative – assists members in the marketing of their produce
d. Consumers cooperative – provides members with quality goods and services at
reasonable prices
e. Service cooperative – makes services readily available and at a lower price
2. MUTUAL COMPANIES are financial-service firm owned by its policyholders or depositors.
They are classified according to the products or services they carry.
a. Mutual Savings Bank – are owned by depositors and specialize in savings and
mortgage loans. The profits of the company are credited to the account of the depositors.
b. Mutual Insurance Company – is a cooperative corporation organized and owned by its
policyholders. Voting control is in the hands of the insured. Profits earned by the
company can be used to pay policy dividends to policyholders and to strengthen the
insurer by building its surplus.


1. Joint Stock Company – a form of business enterprise in which the capital is divided into
small units permitting a number of investors to contribute varying amounts to the total, profits
being divided between stockholders in proportion to the number of shares they own.
2. Joint Venture – is created for the purpose of bringing together several partners to engage
in a business activity, which is normally very specialized and which exists for a limited,
specific purpose.
3. Business Trust – a legal form of organization in which a trustee is appointed to manage the
business and its operations through a trust relationship.


1. Capitalism – a system in which the means of production are owned and operated by private
individuals. It is a system wherein privately-owned capital, and property rights are privately
invested with the ultimate aim of personal gain.
2. Socialism – an ownership of production and capital by the government and the regulation
by society, as a whole, of the process of production and distribution, and of the giving of
essential services. It is a free enterprise system with government participation.
3. Communism – a collective ownership by the government of consumption goods and
production goods.


1. Malthusian (Robert Malthus) – population growth occurs exponentially but food
production increases arithmetically, dangers of excessive population growth
2. Government-led (local economic development) – decreasing poverty by creating jobs
through making the local economy grow, thus create income opportunities
3. A la Kuznets (Simon Kuznets) – leads to environment deterioration, but after a certain
level of economic growth, a society begins to improve its relationship with the government
and levels of environmental degradation reduces.
4. Human capital-based – widespread investment in human capital creates in the labor-
force the skill-based indispensable for economic growth.
5. Post demographic transition – population growth is negligible, or even enters a decline,
low birth and low death rates

Submit a list of 10 examples of firms classified according to its kinds and forms.


4. Management Principles and Practices


Management is defined in so many ways depending upon the viewpoint, beliefs, and
interpretations of the manager. But the generally accepted definition used is: Management is a
distinct process of planning, organizing, staffing, directing and controlling (POSDICON),
performed to determine and accomplish stated objectives by the use of human being and other
business resources. In other words, there are different activities that make up a management
process. Furthermore, these activities are performed to accomplish stated objectives and are
performed by men with the help of other resources.
Management is a function that directs and coordinates the efforts of the people to
accomplish goals and objectives by using available resources efficiently and effectively. It is also
a process of accomplishing the organization’s goals by working with and through people. Its task
includes planning, organizing, staffing, leading or directing and controlling.


Management is both science and art. It is an art because it results in the accomplishment
of objectives through the use of human efforts. It requires skill and careful study in the
management of any endeavor.
Management is a science because it is a systematic body of knowledge. It gathers and
analyzes facts and formulates general laws or principles from these facts.
As an art and as a science, therefore, management seeks to integrate into a unified,
coordinated whole the essential factors that make up an organization. Management is a broad
field of knowledge with its own areas of specialization – personnel, production, finance, sales or
marketing, purchasing and procurement, administration, and advertising.


Management is the most important subject in business because it deals with people,
establishing and achieving objectives. It is consequently used in almost every human activity.
Management exists to some degree in the factory, office, school, bank, store, labor union, hotel,
church, armed forces, hospital or home.
In today’s tough and uncertain economy, a company needs strong managers to lead its staff
toward accomplishing business goals. But managers are more than just leaders – they’re
problem solvers, cheerleaders, and planners as well. And managers don’t come in one-size-fits-
all shapes or forms. Managers fulfill many roles and have many different responsibilities at each
level of management within an organization.
Organizations abound in today’s society. Groups and individuals constantly join forces to
accomplish common goals. Sometimes the goals of these organizations are for profit and some
are not. But no matter what their aims, all these organizations share two things in common:
They’re made up of people, and certain individuals are in charge of these people.
Managers make decisions. They administer and coordinate resources effectively and
efficiently to achieve the goals of an organization. In essence, managers get the job done
through other people. In order to achieve an objective, the available basic resources including
men and women, materials, machines, methods, money and markets should be put together.
These resources are what we call the six M’s of management which are used and related
harmoniously so that the expected end-result may be attained, all within the anticipated
problems of time, effort, and expense.
No matter what type of organization managers work in, they are generally responsible for a
group of individuals’ performance. As leaders, managers must encourage this group to reach
common business goals, such as bringing a new product to market in a timely fashion. To
accomplish these goals, managers not only use their human resources, but they also take
advantage of various materials resources as well, such as technology.
Think of a team, for example. Managers may be in charge of a certain department whose
task is to develop a new product. The manager needs to coordinate the efforts of his
department’s tam members, as well as give them the material tools they need to accomplish the
job well. If the team fails, ultimately it is the manager who shoulders the responsibility.


Managers just don’t go out and haphazardly perform their responsibilities. Good
managers discover how to master five basic functions: planning, organizing, staffing,
leading/directing and controlling.
1. PLANNING: This step involves mapping out exactly how to achieve a particular goal. Say for
example, that the organization’s goal is to improve company sales. The manager first needs
to decide which steps are necessary to accomplish that goal. These steps may include
increasing advertising, inventory, and sales staff. These necessary steps are developed into
a plan. When the plan is in place, the manager can follow it to accomplish the goal of improving
company sales.
2. ORGANIZING: After a plan is in place, a manager needs to organize his team and materials
according to his plan. Assigning work and granting authority are two important elements of
3. STAFFING: After a manager discerns his area’s needs, he may decide to beef up his staffing
by recruiting, selecting, training and developing employees. A manager in a large organization
often works with the company’s human resources department to accomplish this goal.
4. LEADING: A manager needs to do more than just plan, organize and staff her team to achieve
the goal. She must also lead. Leading involves motivating, communicating, guiding and
encouraging. It requires the manager to coach, assist, and solve the problems of employees.
5. CONTROLLING: After the other elements are in place, a manager’s job is not finished. He
needs to continuously check results against goals and take any corrective actions necessary
to make sure that his area’s plans remain on track.


A manager wears many hats. Not only a manager, a team leader, but he is a planner,
organizer, cheerleader, coach, problem solver and decision maker – all rolled into one. And
these are just a few of a manager’s roles.
In addition, manager’s schedules are usually jam-packed. Whether they’re busy with
employee meetings, unexpected problems, or strategy sessions, managers often find little
spare time on their calendars.
In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of
ten roles that a manager fills. These roles fall into three categories:
▪ Interpersonal: this role involves human interaction
▪ Informational: this role involves the sharing and analyzing of information
▪ Decisional: this role involves decision making


Seek and receive information; scan periodicals and
reports; maintain personal contact with stakeholders
Forward information to organization members via
memos, reports, and phone calls
Transmit information to outsiders via reports, memos
and speeches
Perform ceremonial and symbolic duties, such as
greeting visitors and signing legal documents
Direct and motivate subordinates; counsel and
communicate with subordinates
Maintain information links both inside and outside
organization via mail, phone calls, and meetings
Initiate improvement projects; identify new ideas and
delegate idea responsibility to others
Take corrective action during disputes or crises;
resolve conflicts among subordinates; adapt to
DECISIONAL environments
Resource Decide who gets resources; prepare budgets; set
allocator schedules and determine priorities
Represent department during negotiation as of union
contracts, sales, purchases, and budgets


Two leaders may serve as managers within the same company but have very different
titles and purposes. Large organizations, in particular, may break down management into
different levels because so many more people need to managed. Typical management levels
falls into the following categories.
Top Level. Managers at this level ensure that major performance objectives are established
and accomplished. Common job titles for top managers include CEO, COO, president,
and vice president. These senior managers are considered executives, responsible for the
performance of an organization as a whole or for one of its significant parts.
Middle Level. They report to top managers and are in charge of relatively large departments
or division consisting several smaller units. Examples of middle managers include clinic
directors in hospitals, deans in universities; and division managers, plant managers, and
branch sales managers in businesses. They develop and implement action plans
consistent with company objectives, such as increasing market presence.
Low Level. The initial management job that most people attain is typically a first-line
management position, such as a team leader or supervisor – a person in charge of smaller
work units composed of hands-on workers. Job titles for these first-line managers vary
greatly, but include such designations as department head, group leader and unit leader.
First-line managers ensure that their work teams or units meet performance objectives,
such as producing a set number of items at a given quality, that are consistent with the
plans of middle and top management.


Not everyone can be a manager. Certain skills or abilities to translate knowledge into
action that results ion desired performance, are required to help other employees become more
productive. These skills fall under the following categories:
This skill requires the ability to use a special proficiency or expertise to perform particular
tasks. Accountants, engineers, market researchers and computer scientists, as examples,
possess technical skills. Managers acquire these skills initially through formal education and
then further develop them through training and job experience.
This skill demonstrates the ability to work well in cooperation with others. Human skills
emerge in the workplace as a spirit of trust, enthusiasm and genuine involvement in interpersonal
relationships. A manager with good human skills has a high degree of self-awareness and a
capacity to understand or empathize with the feelings of others. Some managers are naturally
born with great human skills, while others improve their skills through classes or experience. No
matter how human skills are acquired, they’re critical for all managers because of the highly
interpersonal nature of managerial work.
This skill calls for the ability to think analytically. Analytical skills enable managers to break
down problems into smaller parts, to see the relations among the parts, and to recognize the
implications of any one problem for others. As managers assume ever higher responsibilities in
organizations, they must deal with more ambiguous problems that have long-term
consequences. Again, managers may acquire skills initially through formal education and then
further develop them by training and job experience. The higher the management level, the more
important conceptual skills become.

SKILLS AND PERSONAL CHARACTERISTICS (American Assembly of Collegiate Schools of

✓ Leadership – ability to influence others to perform tasks
✓ Self-objectivity – ability to evaluate yourself realistically
✓ Analytic thinking – ability to interpret and explain patterns in information
✓ Behavioral flexibility – ability to modify personal behavior to react objectively rather than
subjectively to accomplish organizational goals
✓ Oral communication – ability to express ideas clearly in words
✓ Written communication – ability to express ideas clearly in writing
✓ Personal impact – ability to create a good impression and instill confidence
✓ Resistance to stress – ability to perform under stressful conditions


✓ Tolerance for uncertainty – ability to perform in ambiguous situations

Here is an alphabetical list of 15 qualities associated with effective leaders. From the following list, rank
the top 5 characteristics based on the following questions: “What 5 qualities are most important in a
manager for you to consider them to be good leaders?”
_____Ambitious _____Flexible
_____Caring _____Honest
_____Competent _____Humorous
_____Courageous _____Innovative
_____Dependable _____Inspiring
_____Empathetic _____Kind
_____Enthusiastic _____Loyal

5. Evolution of Management Theories

The ever-changing business environment has forced management thinking to evolve throughout
the centuries. Several management theories and philosophies have emerged over the years. Most
of the evolutionary changes and new perspectives occurred as a result of the industrial revolution
that transformed agricultural societies into industrial societies. Today, management thinking
continues to evolve to meet the challenges of rapid and dramatic societal changes.
The simplest definition of management is getting things done through people. It implies that an
organization, whether small, medium or large is composed of people. A business organization exists
for a purpose. Business entities exist for a profit, social responsibility and have people.
It is the people in the organizations that get work done. To ensure that their assigned tasks are
done properly and efficiently, these people have to be managed. The person managing them could
be the owner-proprietor, the Manager or Supervisor.
The Industrial Revolution in light of business concern was to improve employees’ productivity
and efficiency triggered in the development of management theories. Beginning in the late 19 th
century after the Industrial Revolution but saw more definitive form in the 20th century. Industrial
Revolution refers to the transition from hand production methods to the use of different machines,
new chemical manufacturing process, iron production processes, increasing use of steam power,
and the development of machine tools.

1910s-1940s: Management as Science

Management as Science was developed in the early 20th century and focused on
increasing productivity and efficiency through standardization, division of labor, centralization and
hierarchy. A very ‘top down’ management with strict control over people and processes dominated
across industries.

1950s-1960s: Functional Organizations

Due to growing and more complex organizations, the 1950s and 1960s saw the
emergence of functional organizations and the Human Resource (HR) movement. Managers began
to understand the human factor in production and productivity and tools such as goal-setting,
performance reviews and job descriptions were born.
▪ Human Resource is composed of all the efforts, skills or capabilities of all the people who
work for the organizations. Staff, workforce, personnel, employees are other name for human

1970s: Strategic Planning

The focus is from measuring function to resource allocation and tools like Strategic
Planning, Growth Share Matrix, and SWOT (identification and analysis of the company’s Strengths,
Weaknesses, Opportunities and Threats) were used to formalize strategic planning processes. After
several decades of ‘best practice’ and ‘one size fits all’ solutions, academics began to develop
contingency theories.
▪ Strategic Planning – an activity carried out annually using a formal structured approach to
plan on the needs of the current and future customers and support the strategic and business
goals of the organization


▪ Growth Share Matrix – provides a valuable tool for corporate-level strategists that indicates
where expansion should and can take place, and which business units should be sold off.
▪ SWOT – a strategy of critically examining the internal and external factors that could have
positive or negative effects to the organization

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and with a
blooming management consultancy industry, Competitive Advantage became a priority for
organization in the 1980s. Tools like Total Quality Management, Six Sigma and Lean Management
were used to measure processes and improve productivity. Employees were more involved by
collecting data, but decisions were still made at the top, and goals were used to manage people
and maintain control.
▪ Total Quality Management - a management approach of an organization, centered on
quality, based on the participation of all its members and aiming at long term success through
customer satisfaction and benefits to the members of the organization and the society
▪ Kaizen – a strategy for gradual, orderly and continuous improvement
▪ Six Sigma – a vision of quality which equates with only 3.4 defects PMO for each product or
service transaction and strives for perfection
▪ Lean Management – systems that uses minimal amounts of resources to produce high
volume of high-quality goods with some variety

1990s: Process Optimization

Benchmarking and business process reengineering became popular in the 1990s, and by
the middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already
initiated such projects. TQM, Six Sigma and Lean remained popular and more holistic, organization-
wide approach and strategy implementation took the stage with tools such as Strategy Maps and
Balance Scorecards.
▪ Benchmarking – an activity that tells you your position or status by comparing yourself to
others and knowing the areas that needs improvement
▪ Business Process Reengineering – fundamental rethinking and radical redesign of business
process to achieve dramatic improvement in critical, contemporary measures of performance,
such as cost, quality, service and speed
▪ Strategy Maps – a diagram that is used to document the primary strategic goals being pursued
by an organization or management team.
▪ Balance Scorecards – framework for operationalizing a firm’s strategic plan by focusing on
measurable financial, business process, customer and learning and growth outcomes of firm

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data, organizations in
the 2000s started to focus on using technology for growth and value creation. Big data is a broad
term for data sets so large or complex that traditional data processing applications are inadequate.
Accuracy in big data may lead to more confident decision-making. And better decisions can mean
greater operational efficiency, cost-reductions, and reduced risks.
▪ Cloud Computing - Web-based applications that are stored on remote servers and accessed
via the "cloud" of the Internet using a standard Web browser
▪ E-tailer - Online retail stores from the giant Amazon to tiny local stores that have Web sites
where retail goods are sold
▪ Digital firm - an organization where nearly all significant business processes and relationships
with customers, suppliers and employees are digitally enabled, and key corporate assets are
managed through digital means
▪ WEB 2.0 – second-generation, interactive internet-based services that enable people to
collaborate, share information, and create new services online, including mashups, blogs,
RSS, and wikis

After several decades of trying to manage people through the different management theories, one
has to realize that what worked before just simply is not enough anymore. Traditional management
is fine if one wants compliance, but if one wants innovation and growth, management has to engage
its people on a whole new level. Top down control is a thing of the post. Succeeding in today’s
environment requires a management style that inspires and is participatory.

CLASSICAL SCHOOLS OF MANAGEMENT – developed during the Industrial Revolution

when new problems related to the factory system began to appear. Managers were unsure of
how to train employees or deal with increased labor dissatisfaction, they began to test solutions.
As a result, the classical management theory developed from efforts to find the “one best way”
to perform and manage tasks. This school of though is made up of two branches: classical
scientific and classical administrative.

a. Classical Scientific School - arose because of the need to increase productivity and
efficiency. The emphasis was on trying to find the best way to get the most work done by
examining how the work process was actually accomplished and by scrutinizing the skills of the

i. Frederick Taylor (father of Scientific Management)

- believed that organizations should study tasks and develop precise procedures
(time and motion study)
- he developed a piece rate incentive system that paid workers more money for
meeting the new standard
1. Develop a science for each element of a man’s work
2. Scientifically select and train workers
3. Cooperate with workers
4. Divide work equally between management and workers

ii. Henry Gantt (associate of Taylor)

- developed the Gantt chart, a bar graph that measures planned and completed
work along each stage of production. Based on time instead of quantity, volume,
or weight, this visual display chart has been a widely used planning and control
tool since its development in 1910

iii. Frank and Lilian Gilbreth (a husband-and-wife team, studied job motions)
- the basic ideas regarding scientific management were developed.
- Developing new standard methods for doing each job
- developed ideal motions required to perform a job
-17 therbligs (elemental hand or arm motion, resulted to 200% productivity rate)
- Selecting, training, and developing workers of allowing them to choose their own
tasks and train themselves
- Developing a spirit of cooperation between workers and management to ensure
that work is carried out in accordance with devised procedures
- Dividing work between workers and management in almost equal shares, with
each group taking over the work for which it is best fitted

b. Classical Administrative School - Whereas scientific management focused on the

productivity of individuals, the classical administrative approach concentrates on the total
organization. The emphasis is on the development of managerial principles rather than work

i. Max Weber
- In the late 1800s, Max Weber disliked that many European organizations were
managed on a “personal” family-like basis and that employees were loyal to
individual supervisors rather than to the organization. He believed that
organizations should be managed impersonally and that a formal organizational
structure, where specific rules were followed, was important. In other words, he
didn’t think that authority should be based on a person’s personality. He thought
authority should be something that was part of a person’s job and passed from
individual to individual as one person left and another took over. This nonpersonal,
objective form of organization was called a bureaucracy.


Weber believed that all bureaucracies have the following characteristics:
✓ A well-defined hierarchy. All positions within a bureaucracy are structured
in a way that permits the higher positions to supervise and control the lower
positions. This clear chain of command facilitates control and order
throughout the organization.
✓ Division of labor and specialization. All responsibilities in an organization
are specialized so that each employee has the necessary expertise to do a
particular task.
✓ Rules and regulations. Standard operating procedures govern all
organizational activities to provide certainty and facilitate coordination.
✓ Impersonal relationships between managers and employees.
Managers should maintain an impersonal relationship with employees so
that favoritism and personal prejudice do not influence decisions.
✓ Competence. Competence, not “who you know,” should be the basis for all
decisions made in hiring, job assignments and promotions in order to foster
ability and merit as the primary characteristics of a bureaucratic
✓ Records. A bureaucracy needs to maintain complete files regarding all its

ii. Henri Fayol (French mining engineer)

- developed 14 principles of management based on his management experiences.
These principles provide modern-day managers with general guidelines on how a
supervisor should organize her department and manage her staff.

1. Division of Work
According to this principle, the whole work is divided into small tasks. The
specialization of the workforce according to the skills of a person, creating personal
and professional development within the labor force, and therefore increasing
productivity, leads to specialization which increases the efficiency of labor. By
separating a small part of work, the worker’s speed and accuracy in his/her
performance increases. This principle is applicable to both technical as well as
managerial work. This can be made useful in case of project works, too.
2. Authority and responsibility
This refers to the issue of commands followed by responsibility for their
consequences. Authority means the right of a superior to give enhanced order to
his subordinates; responsibility means obligation for performance. Henri Fayol
finds authority and responsibility to be related and inseparable. Authority is the
right to give orders and the power to exact obedience. A manager has official
authority because of her position. Authority creates responsibility.
3. Discipline
Discipline refers to obedience, proper conduct in relation to others, respect
of authority, etc. it is essential for the smooth functioning of all organizations. This
will also help shape the culture inside the organization. Discipline is absolutely
necessary for enterprises to function well.
4. Unity of Command
This principle states that each subordinate should receive orders and be
accountable to one superior. If an employee receives order from more than one
superior, it is likely to create confusion and conflict. Unity of command also makes
it easier to fix responsibility for mistakes.
5. Unity of Direction
All those working in the same line of activity must understand and pursue
the same objectives. All related activities should be put under one group, there
should be one plan of action for them, and they should be under the control of one
It seeks to ensure unity of action, focusing on efforts, and coordination of strength.
6. Subordination of Individual Interest


The management must put aside personal considerations and put company
objectives first. Therefore, the interests of goals of the organization must prevail
over the personal interests of individuals.
7. Remuneration
Workers must be paid sufficiently as this is a chief motivation of employees
and therefore greatly influences productivity. The quantum and methods of
remuneration payable should be fair, reasonable, and rewarding of effort.
Remuneration is paid to worker as per their capacity and productivity. The main
objective of an organization is to maximize the wealth and the net profit as well.
For this purpose, the organization has paid wages, salaries, and benefits to their
staff properly and scientifically so that organizational efficiency can be ensured.

8. The Degree of Centralization

The amount of power wielded with the central management depends on
company size. Centralization implies the concentration of decision-making
authority at the top management. Sharing of authority with lower level is called
decentralization. The organization should strive to achieve a proper balance.
9. Scalar Chain
Scalar Chain refers to the chain of superiors ranging from top management
to the lowest rank. The principle suggests that there should be a clear line of
authority from top bottom linking all managers at all levels. It is considered a chain
of command. However, there is a concept called a “gang plank” in which a
subordinate may contact a superior in case of an emergency, defying the hierarchy
of control. In this event, the immediate superiors must be informed about the
10. Order
Social order ensures the fluid operation of a company through authoritative
procedure. Material order ensures safety and efficiency in the workplace. Order
should be acceptable and under the rules of the company.
11. Equity
Employees must be treated kindly, and justice must be enacted to ensure
a just workplace. Managers should be fair and impartial when dealing with
employees, giving equal attention toward all employees.
12. Stability of Tenure of Personnel
The period of service should not be too short and employees should not be
moved from positions frequently. An employee cannot render useful service if
he/she is removed before she/he becomes accustomed to the work assigned to
13. Initiative
Using the initiative of employees can add strength and new ideas to an
organization. Initiative on the part of employees is a source of strength for an
organization because it provides new and better ideas. Employees are likely to
take greater interest in the functioning of the organization.
14. Esprit de Corps
This refers to the need of managers to ensure and develop morale in the
workplace; individually and communally. Team spirit helps develop an atmosphere
of mutual trust and understanding. Team spirit helps to finish the task on time.

Key Roles
Fayol also divided the management function into five key roles:
▪ To organize
▪ To plan and forecast
▪ To command
▪ To control
▪ To coordinate

iii. Mary Parker Follett

- stressed the importance of an organization establishing common goals for its
employees. However, she also began to think somewhat differently than the other
theorists of her day, discarding command-style hierarchical organizations where
employees were treated like robots. She began to talk about such things as ethics,
power, and leadership. She encouraged managers to allow employees to
participate in decision making.

iv. Chester I. Barnard (President of New Jersey Bell Telephone Company)

- introduced the idea of the informal organization – cliques (exclusive groups of
people) that naturally form within a company. He felt that these informal
organizations provided necessary and vital communication functions for the overall
organization and that they could help the organization accomplish its goals.
- Barnard felt that it was particularly important for managers to develop a sense of
common purpose where a willingness to cooperate is strongly encouraged. He is
credited with developing the acceptance theory of management, which
emphasizes the willingness of employees to accept that managers have legitimate
authority to act. Barnard felt that four factors affected the willingness of employees
to accept authority:
✓ the employees must understand the communication
✓ the employees accept the communication as being consistent with the
organization’s purposes
✓ the employees feel that their actions will be consistent with the needs and
desires of other employees
✓ the employees feel that they are mentally and physically able to carry out
the order
- Barnard’s sympathy for and understanding of employee needs positioned him as
a bridge to the behavioral school of management, the next school of thought to


BEHAVIORAL SCHOOL OF MANAGEMENT - often called the human relations
movement because it addresses the human dimension of work. Behavioral theorists believed
that a better understanding of human behavior at work, such as motivation, conflict,
expectations and group dynamics, improved productivity. The theorists who contributed to this
school viewed employees as individuals, resources and assets to be developed and worked
with – not as machines, as in the past.
i. Elton Mayo
- Elton Mayo’s contributions came as part of the Hawthorne studies, a series of
experiments that rigorously applied classical management theory only to reveal its
shortcomings. The Hawthorne experiments consisted of two studies conducted at the
Hawthorne Works of the Western Electric Company in Chicago from 1924 to 1932. The
first study was conducted by a group of engineers seeking to determine the relationship
of lighting levels to worker productivity. A few years later, a second group of experiments
began. Harvard researchers Mayo and F.J. Roethlisberger supervised a group of five
women in a bank wiring room.
ii. F. J. Roethlisberger
- concluded that the increase in productivity resulted from the supervisory arrangement
rather the changes in lighting or other associated worker benefits. The general conclusion
from the Hawthorne studies was that human relations and the social needs of workers
are crucial aspects of business management. This principle of human motivation helped
revolutionize theories and practices of management.

iii. Abraham Maslow (a practicing psychologists)

- developed one of the most widely recognized theories, a theory of motivation based
upon a consideration of human needs. His theory of human needs had three
✓ Human needs are never completely satisfied
✓ Human behavior is purposeful and is motivated by the need for satisfaction
✓ Needs can be classified according to a hierarchical structure of importance, from
the lowest to highest.

Maslow broke down the needs hierarchy into five specific areas:


1. Physiological needs. Maslow grouped all physical needs necessary for maintaining
basic human well-being, such as food and drink, into this category. After the need is
satisfied, however, it is no longer is a motivator.
2. Safety needs. These needs include the need for basic security, stability, protection,
and freedom from fear. A normal state exists for an individual to have all these needs
generally satisfied. Otherwise, they become primary motivators.
3. Belonging and love needs. After the physical and safety needs are satisfied and are
no longer motivators, the need for belonging and love emerges as a primary motivator.
The individual strives to establish meaningful relationships with significant others.
4. Esteem needs. An individual must develop self-confidence and wants to achieve
status, reputation, fame and glory.
5. Self-actualization needs. Assuming that all the previous needs in the hierarchy are
satisfied, an individual feels a need to find himself.

iv. Douglas McGregor

- Douglas McGregor was heavily influenced by both the Hawthorne studies and Maslow.
He believed that two basic kinds of managers exist. One type, the Theory X manager,
has a negative view of employees and assumes that they are lazy, untrustworthy and
incapable of assuming responsibility. On the other hand, the Theory Y manager assumes
that employees are not only trustworthy and capable of assuming responsibility, but also
have high levels of motivation.
-An important aspect of McGregor’s idea was his belief that managers who hold either
set of assumptions can create self-fulfilling prophecies –that through their behavior, these
managers create situations where subordinates act in ways that confirm the manager’s
original expectations.

As a group, these theorists discovered that people worked for inner satisfaction and not
materialistic rewards, shifting the focus to the role of individuals in an organization’s


SYSTEMS MANAGEMENT THEORY (integrating various approaches to the study of
The systems management theory has had a significant effect on management science.
A system is an interrelated set of elements functioning as a whole. An organization as a system
is composed of four elements:
▪ Inputs. Material or human resources
▪ Transformation processes – technological and managerial processes
▪ Outputs – products or services
▪ Feedback – reactions from the environment

In relationship to an organization, inputs include resources such as raw materials, money,

technologies and people. These inputs go through a transformation process where they’re
planned, organized, motivated and controlled to ultimately meet the organization’s goals. The
outputs are the products or services designed to enhance the quality of life or productivity for
customers/clients. Feedback includes comments from customers or clients using the products.
This overall systems framework applies to any department or program in the overall
The systems theory approach encourages managers to look at the organization from a
broader perspective. Managers are beginning to recognize the various parts of the
organization, and, in particular, the interrelations of the parts.
Contemporary system theorists find it helpful to analyze the effectiveness of organizations
according to the degree that they are open or closed. The following terminology is important to
your understanding of the systems approach:
▪ An organization that interacts little with its external environment (outside
environment) and therefore receives little feedback from it is called a closed system.
▪ An open system, in contrast, interacts continually with its environment. Therefore,
it is well informed about changes within its surroundings and its position relative to these


▪ A subsystem is any system that is part of a larger one.
▪ Entropy is the tendency of systems to deteriorate or breakdown over time.
▪ Synergy is the ability of the whole system to equal more than the sum of its parts.


During World War II, mathematicians, physicists, and other scientist joined together to
solve military problems. The quantitative school of management is a result of the research
conducted during World War II. The quantitative approach to management involves the use of
quantitative techniques, such as statistics, information models, and computer simulations, to
improve decision making. This school consists of several branches.

a. Management Science
The management science school emerged to treat the problems associated with global
warfare. Today, this view encourages managers to use mathematics, statistics, and other
quantitative techniques to make management decisions.
Management can use computer models to figure out the best way to do something-saving
both money and time. Managers use several science applications.
▪ Mathematical forecasting helps make projections that are useful in the planning
▪ Inventory modeling helps control inventories by mathematically establishing how
and when to order a product
▪ Queuing theory helps allocate service personnel or workstations to minimize
customer waiting and service cost.

b. Operations Management
Operations management is a narrow branch of the quantitative approach to management.
It focuses on managing process of transforming materials, labor and capital into useful goods
and/or services. The product outputs can be either goods or services; effective operations
management is a concern for both manufacturing and service organizations. The resource
inputs, or factors of production, include the wide variety of raw materials, technologies, capital
information, and people needed to create finished products. The transformation process, in turn,
is the actual set of operations or activities through which various resources are utilized to
produce finished goods or services of value to customers or clients. Operations management
today pays close attention to the demands of quality, customer service, and competition. The
process begins with attention to the needs of customers: What do they want? Where do they
want it? When do they want it? Based on the answers to these questions, managers line up
resources and take any action necessary to meet customer expectations.

c. Management Information System

Management Information system (MIS) is the most recent subfield of quantitative school.
A management information system organizes past, present and projected data from both internal
and external sources and processes it into usable information, which it then makes available to
managers at all organizational levels. The information systems are also able to organize data
into usable and accessible formats. As a result, managers can identify alternatives quickly,
evaluate alternatives by using a spreadsheet program, pose a series of “what-if” questions, and
finally, select the best alternatives based on the answers to these questions.

i. F.W. Lanchester – predicts success or probability towards success or defeat
ii. Thomas Alba Edison – studied anti-submarine warfare to come up with a means to
evade and destroy submarines with the use of surface ship
iii. A.K. Erlag – Danish Mathematician, who makes formula which are fundamental to
telephone traffic


CONTINGENCY SCHOOL OF MANAGEMENT (theorizes that different situations and

conditions require different management approaches)


The contingency school of management can be summarized as an “it all depends”
approach. The appropriate management actions and approaches depend on the situation.
Managers with a contingency view use a flexible approach, draw on a variety of theories and
experiences, and evaluate many options as they solve problems.
Contingency management recognizes that there is no one best way to manage. In the
contingency perspective, managers are faced with the task of determining which managerial
approach is likely to be most effective in a given situations. It avoids the classical “one best way”
arguments and recognizes the need to understand situational differences and respond
appropriately to them. It does not apply certain management principles to any situation.
Contingency theory is recognition of the extreme importance of individual manager
performance in any given situation. The contingency approach is highly dependent on the
experience and judgment of the manager in a given organizational environment.
The quality school of management is a comprehensive concept for leading and operating
an organization, aimed at continually improving performance by focusing on customers while
addressing the needs of all stakeholders. In other words, this concept focuses on managing the
total organization to deliver high quality to customers.
The quality school of management considers the following in its theory:
▪ Organization makeup. Organizations are made up of complex systems of customers
and suppliers. Every individual, executive, manager and worker functions as both a
supplier and a customer
▪ Quality of goods and services. Meeting the customers’ requirements is a priority
goal and presumed to be a key to organizational survival and growth
▪ Continuous improvement in goods and services. Recognizing the need to pinpoint
internal and external requirements and continuously strive to improve. It is an idea
that says, “The Company is good, but it can always become better.”
▪ Employees working in teams. These groups are primary vehicles for planning and
problem solving.
▪ Developing openness and trust. Confidence among members of the organization
at all levels is an important condition for success.

The definition of quality as per the ISO 9000 standard is: “The totality of features and
characteristics of a product or service, that bear on its ability to satisfy a given or implied

a. Kaizen Approach
The commitment to work toward steady, continual improvement. The best support for
continuous improvement is an organization of people who give a high priority in learning. In this
process, everyone in the organization participates by identifying opportunities for improvement,
testing new approaches, recording the results and recommending changes.

b. Reengineering Approach
The reengineering approach to management focuses on creating change-big change-and
fast. It centers on sensing the need to change, seeing change coming and reacting effectively
to change when it comes.
Reengineering is the radical design of business process to achieve dramatic
improvements in cost, quality, service and speed.

QUALITY GURUS (spiritual guide who are considered to have attained complete insight on quality)


A statistician at Bell Telephone Laboratories who studied randomness in industrial
process. Walter Shewhart was a genuine pioneer in the field of quality control, and he
became known as the “father of statistical quality control.” He developed control charts
for analyzing the output of processes to determine when corrective action was necessary.
Shewhart had a strong influence on the thinking of two other gurus, W. Edwards Deming
and Joseph Juran.
Philosophy: “Quality and Productivity increases when process fluctuation decreases”
Deming, a statistics professor at New York University in the 1940s, went to Japan after
World War II to assist the Japanese in improving quality and productivity. The Union of
Japanese Scientists, who had invited Deming, were so impressed that in 1951, after a
series of lectures presented by Deming, they established the Deming Prize, which is
awarded annually to firms that distinguish themselves with quality management

Although the Japanese revered Deming, he was largely unknown to business leaders in
the United States. In fact, he worked with the Japanese for almost 30 years before he
gained recognition in his own country. Before his death in 1993, U.S. companies
turned their attention to Deming, embraced his philosophy, and requested his assistance
in setting up quality improvement programs.
Deming compiled a famous list of 14 points he believed were the prescription needed to
achieve quality in an organization. His message was that the cause of inefficiency and
poor quality is the system, not the employees. Deming felt that it was management’s
responsibility to correct the system to achieve the desired results. In addition to the 14
points, Deming stressed the need to reduce variation in output (deviation from a
standard), which can be accomplished by distinguishing between special causes of
variation (i.e., correctable) and common causes of variation (i.e., random).Deming’s
concept of profound knowledge incorporates the beliefs and values about learning
that guided Japan’s rise to a world economic power.


1. Create Constancy of purpose for improvement of Products and Services
2. Adopt the New Philosophy
3. Cease Dependence on Mass Inspection
4. End the Practice of Awarding Business on the Basis of Price Tag Alone
5. Constantly Improve the System of Production and Services
6. Institute Training
7. Adopt and Institute Leadership
8. Drive out Fear
9. Break Down Barriers Between Staff Areas
11. a) Eliminate Numerical Quota for the Workforce b) Eliminate Numerical Goals for
People in management
12. Remove Barriers that Rob People of Pride of Workmanship
13. Encourage Education and Self-improvement for Everyone
14. Take Action to Accomplish the Transformation


Philosophy: “Quality doesn’t happen by accident”
Juran, like Deming, taught Japanese manufacturers how to improve the quality of their
goods, and he, too, can be regarded as a major force in Japan’s success in quality. Juran
viewed quality as fitness-for-use. He also believed that roughly 80 percent of quality
defects are management controllable; thus, management has the responsibility to
correct this deficiency. He described quality management in terms of a trilogy consisting
of quality planning, quality control, and quality improvement. According to Juran, quality
planning is necessary to establish processes that are capable of meeting quality
standards; quality control is necessary in order to know when corrective action is
needed; and quality improvement will help to find better ways of doing things. A key
element of Juran’s philosophy is the commitment of management to continual
improvement. NJuran is credited as one of the first to measure the cost of quality, and
he demonstrated the potential for increased profits that would result if the costs of
poor quality could be reduced.


Feigenbaum was instrumental in advancing the “cost of nonconformance” approach
as a reason for management to commit to quality. He recognized that quality was not
simply a collection of tools and techniques, but a “total field.” According to Feigenbaum,
it is the customer who defines quality.


Crosby developed the concept of zero defects and popularized the phrase “Do it right
the first time.” He stressed prevention, and he argued against the idea that “there will
always be some level of defectives.” The quality-is-free concept presented in his book,
Quality Is Free, is that the costs of poor quality are much greater than traditionally defined.
According to Crosby, these costs are so great that rather than viewing quality efforts as
costs, organizations should view them as a way to reduce costs, because the
improvements generated by quality efforts will more than pay for themselves. Crosby
believes that any level of defects is too high and that achieving quality can be relatively
easy, as explained in his book Quality Without Tears: The Art of Hassle-Free


Give the 8 dimensions of quality namely: performance, features, reliability, conformance,
durability, serviceability, aesthetics, perceived quality


The late Japanese expert on quality was strongly influenced by both Deming and Juran,
although he made significant contributions of his own to quality management. Among his
key contributions were the development of the cause-and-effect diagram (also known
as a fishbone diagram) for problem solving and the implementation of quality circles,
which involve workers in quality improvement. He was the first quality expert to call
attention to the internal customer —the next person in the process, the next
operation, within the organization.

Taguchi is best known for the Taguchi loss function, which involves a formula for
determining the cost of poor quality. The idea is that the deviation of a part from a
standard causes a loss, and the combined effect of deviations of all parts from their
standards can be large, even though each individual deviation is small. An important part
of his philosophy is the cost to society of poor quality.
Taguchi Loss Function
A Japanese quality expert, holds a nontraditional view of what constitutes poor
quality, and hence the cost of poor quality. The traditional view is that as long as
output is within specifications, there is no cost. Taguchi believes that any deviation
from the target value represents poor quality, and that the farther away from target
a deviation is, the greater the cost. The implication for Taguchi is that reducing the
variation inherent in a process (i.e., increasing its capability ratio) will result in
lowering the cost of poor quality, and consequently, the loss to society.


Tai-ichi of Toyota motors refined an idea for JIT. This means that at no stage of
manufacturing nobody or nothing waits for anything. This is to ensure that there is no
wastage of machinery, materials and manpower. JIT focuses on right scheduling so
as to keep inventory as low as possible. This requires a perfect partnership between
supplier and customer.

Shigeo Shingo made a very significant contribution to lean operation (highly skilled
workforce and flexible equipment) with the development of what is called the single-
minute exchange of die (SMED) system for reducing changeover time. It involves first
categorizing changeover activities as either “internal” or “external” activities. Internal
activities are those that can only be done while a machine is stopped (i.e., not running).
Hence, they contribute to long changeover times. External activities are those that do not
involve stopping the machine; they can be done before or after the changeover. The
Poka-yoke or mistake proofing system is the principle of stopping error before it becomes
defect. One the error is detected, the production is stopped, error is corrected and once
corrected, the production continues.

BIG DATA focuses on using technology for growth and value creation. Big data is a broad
term for data sets so large or complex that traditional data processing applications are
inadequate. Accuracy in big data may lead to more confident decision-making. And better
decisions can mean greater operational efficiency, cost-reductions, and reduced risks.
▪ Definition: datasets that grow so large that they become awkward to work with using on-hand
database management tools
▪ Challenge: capturing, storing, searching, sharing, analyzing, and visualizing.
▪ Characteristics:
1. Volume - large amount of data we are getting from many sources as the world becomes
more and more instrumented
2. Variety - data we receive can be structured, semi-structured, or unstructured
3. Velocity - we are being bombarded with these data at huge speeds, all the time, any time
4. Veracity - level of uncertainty and reliability associated with the types and sources of data
(e.g., the utility of to verify viral posts on the internet)

Decide what is the appropriate management approach. Discuss.


If managing an organization is to be pursued vigorously, planning will be an important and necessary
activity. Managers who plan are afforded with the opportunity to carefully analyze situations, which
directly contribute to effective decision making. Plans provides the manager with the opportunity to
concentrate on implementation.

Planning is defined as selecting the best course of action in anticipation of future trends so that the
desired result may be achieved. It must be stressed that the desired result takes first priority and
the course of action chosen is the means to realize the goal.

Before a manager can tackle any of other functions, he must first devise a plan. A plan is a blueprint
for goal achievement that specifies the necessary resource allocations, schedules, tasks and other

6.1 The Nature of Planning

The military saying, “if you fail to plan, you plan to fail,” is very true. Without a plan, managers are
set up to encounter errors, waste and delays. A plan helps managers organize resources and
activities efficiently and effectively to achieve goals.

1. Gives an organization a sense of direction

Without plans, organizations merely react to daily occurrences without considering what will
happen in the long run. For example, the solution that makes sense in the short term doesn’t
always make sense in the long term. Plans avoid this drift situation and ensure that short
range efforts will support and harmonize with future goals.
2. Focuses attention on objectives and results
Plans keep the people who carry them out focused on the anticipated results. In addition,
keeping sight of the goal also motivates employees.
3. Establishes a basis for teamwork
Diverse groups cannot effectively cooperate in joint projects without an integrated plan.
4. Helps anticipate problems and cope with change
When management plans, it can help forecast future problems and make any necessary
changes up front to avoid them. planning of potential problems helps to minimize mistakes
and reduce the “surprises” that inevitably occur.
5. Provides guidelines for decision making
Decisions are future-oriented. If management doesn’t have any plans for the future, they will
have few guidelines for making current decisions.
6. Serves as a prerequisite to employing all other management functions
Planning is primary, because without knowing what an organization wants to accomplish,
management can’t intelligently undertake any of the other basic managerial activities.

6.2 The Hierarchy of Planning/ Major and Other Types of Plans

Since managers could be occupying positions in any of the various management levels, it will be
useful for them to know some aspects of planning undertaken at the different management levels.

1. Strategic Planning for Top Management. Strategic Planning refers to the process of
determining the major goals of the organization and the policies and strategies for obtaining
and using resources to achieve those goals. In here, the whole company is considered,
specifically its objectives and current resources. The output of strategic planning is the
strategic plan, which spells out the decision about long-range goals and the course of action
to achieve those goals.
2. Intermediate Planning for Middle Managers. Intermediate planning refers to the process of
determining the contributions that subunits can make with allocated resources. In here, the
goals of a subunit are determined and a plan is prepared to provide a guide for the realization
of the goals. It is designed to support the strategic plan.


3. Operational Planning for Lower Management. Operational planning is the process of
determining how specific tasks can be best be accomplished in time with available resources.
It must be performed in support of the strategic and intermediate plans.


Plans are of different types. They may be classified in terms of functional areas, time horizon and
frequency of use.
1. Functional Area Plans. Plans prepared according to the needs of the different functional
a. Marketing Plan – is the written document or blueprint for implementing and controlling
an organization’s marketing activities related to a particular marketing strategy.
b. Production Plan – is a written document that states the quantity of output a company
must produce in broad terms and byproduct family.
c. Financial Plan – is a document that summarizes the current financial situation of the firm,
analyzes financial needs, and recommends a direction for financial activities.
d. Human Resource Plan – is a document that indicates the human resource needs of a
company detailed in terms of quantity and quality and based on the requirements of the
company’s strategic plan.

2. Plans with Time Horizon.

a. Short-range Plans – are plans intended to cover a period of less than one year.
b. Long-range Plans – are plans covering a time span of more than one year.

3. Plans with Varied Frequency of Use.

a. Standing Plans. These are plans that re used again and again, and they focus on
managerial situations that recur repeatedly.
1. Policies – refer to broad guideline used by managers to help make decisions and take
actions on specific circumstances.
2. Procedures – are plans that describes the exact series of actions to be taken in a
given situation.
3. Rules – are statements that either require or forbid a certain action.

b. Single-used Plans. These plans are specifically developed to implement courses of

action that are relatively unique and are unlikely to be repeated.
1. Budget Plan - sets forth the projected expenditures for a certain activity and explains
where the required funds will come from.
2. Program Plan – is designed to coordinate a large set of activities.
3. Project Plan – is usually more limited in scope than a program plan and is sometimes
prepared to support a program.

6.3 Mission, Vision, Goals, Objectives and Values

To be an effective leader/manager of a business, he should ensure that his personal vision, mission,
and values are aligned to those of the organization. If they are not aligned, there will be
inconsistencies in company policies, people will be confused; and the organization will not move in
the same direction.

It is the responsibility of the leader/manager to define the company vision, mission, goals, objectives,
goals and values and to share these to everyone in the organization.

A commonly shared picture of what the organizations wants and is committed to become sometime
in the future. It is the guiding and motivating compass of the organization-capturing the desired spirit
of its people can passionately make the organization to become. A vision can be expressed as the
state in the future of what the organization’s services, customers, stakeholders, core competencies,
processes, and structure may be.

It is an enduring statement of purpose of an organization’s existence that distinguishes itself from
others. It answers the questions: Who are we? Why do we exist?


Are precise statements of results sought, quantified in time and magnitude, where possible. It is a
concrete result that the organization intends to achieve within a specified period. Goals are derived
from a sound and clear understanding of the vision and mission or purpose of the organization. It
should be SMART (Specific, Measurable, Attainable, Results-focused and Time-bound)

Prime parts of the plan. The estimated end results/direction desired or expected by the organization
in the is usually expressed in quantifiable manner.

Are fundamental and shared beliefs that will provide the organization’s behavior in meeting its
objectives and in dealing with others. It is the organization’s moral compass. They answer the
question, “What is important to us?”


Arrange in order the Formal Planning Process

6.4 The Formal Planning Process

1. Setting Organizational, Divisional, or Unit Goals. The first task of the manager is to provide
a sense of direction to his firm (if he is the CEO), to his division (if he heads a division), or to his
unit (if he is a supervisor). The setting of goals provides an answer to the said concern. If
everybody in the firm (or division or unit) is aware of the goals, there is a big chance that
everybody will contribute his share in the realization of such goals.
COMPANY GOAL – To expand market share by 20%
DIVISION GOAL – To increase the number of products manufactured and sold by the
UNIT GOAL – To increase the number of product managers

2. Developing Strategies or Tactics to Reach Goals. After determining the goals, the next
task is to devise some means to realize them. the ways chosen to realize the goals are called
strategies and these will be the concern of top management. The middle and lower management
will adapt their own tactics to implement their plans.
Strategy is a course of action aimed at ensuring that the organization will achieve its
objectives. Tactic is a short-term action by management to adjust to negative or external
influences. They are formulated and implemented in support of the firm’s strategies.
The decision of a construction firm’s management to diversify its business by also engaging in
the trading of construction materials and supplies. (strategy)
Hiring of contractual workers to augment the company’s current workforce. (tactic)

3. Determining the Resources Needed. When particular sets of strategies and tactics have
been devised, the manager will then determine the human and non-human resources required
by such strategies and tactics. Even if the resource requirements are currently available, they
must be specified.
A new business unit will be organized to deal with the buying and selling of construction
materials and supplies. The amount of P55million shall be set aside to finance the activity.
Qualified persons shall be recruited for the purpose.

4. Setting Standards. The standards for measuring performance may be set at the planning
stage. When actual performance does not match with the planned performance, corrections may
me made or reinforcements given.
Standard is a quantitative or qualitative measuring device designed to help monitor the
performance of people, capital, goods, or processes.
The minimum number of units that must be produced by a worker per day in a given work


6.5 Planning Tools and Techniques
Planning is done so that some desired results may be achieved. At times, however, failure in
planning occurs. Planning may be made successful by recognizing the planning barriers, by using
the aids in planning and by adapting appropriate tools and techniques in planning.

1. Recognizing the planning barriers. Various barriers can inhibit successful planning. In order
for plans to be effective and yield the desired results, managers must identify any potential
problems and work to overcome them.
 Manager’s inability to plan or inadequate planning. Managers are not born with the
ability to plan. Some managers are not successful planners because they lack the
background, education, and/or ability. Other may have never been taught how to plan.
When these two types of managers take the time to plan, they may not know how to
conduct planning as a process.
 Improper planning process. The development of a plan is hard work; it is much easier
for a manager to claim that he or she doesn’t have the time to work the required planning
process than to actually devote the time to developing a plan.
 Lack of commitment to the planning process. Fear of failure of managers may result
to choosing to do little thing or nothing to help in the planning process.
 Improper information. Facts are out-of-date, of poor quality, or of insufficient quantity.
 Focusing on the present at the expense of the future. Failure to consider the long-
term effects of a plan because of emphasis on short term problems may lead to trouble
in preparing for the future. Managers should try to keep the big picture-their long-term
goals-in mind when developing their plans.
 Too much reliance on the planning department. Many companies have a planning
department or a planning and development team. These departments conduct studies,
do research, build models, and project probable results, but they do not implement plans.
 Concentrating on only the controllable variables. Managers can find themselves
concentrating on the things and events that they can control, such as new product
development, but then fail to consider outside factors, such as poor economy.
2. Using the aids in planning
 Gathering as much information as possible
 Developing multiple sources of information
 Involving others in the planning process
3. Adapt appropriate tools and techniques
 Qualitative Techniques – the use of intuition and subjective judgment in planning
 Quantitative Techniques – the use of rational and analytical methods in planning
➢ Forecasting – attempting to predict future
➢ Scheduling – planning time for completion of activities
➢ Management by Objectives – a philosophy of converting organizational objectives
to personal objectives

1. Prove or disprove the statement: “Planning is everyone’s job in the organization including those
in the non-management levels”.
2. Summarize ways to make planning effective

7. The Nature of Decision Making

Managers of all kinds and types are primarily tasked to provide leadership in the quest for the
attainment of the organization’s objectives. If he is to become effective, he must learn the intricacies
of decision making. Many times, he will be confronted by situations where he will have to choose
from among various options. Whatever option he chooses, it will have effects, good or bad,
immediate or long-term, in the operations of his organization.

The manager’s decision making skills are very crucial to his success as a professional. A major
blunder in his decision making may be sufficient to cause destruction of his organization. On the
other hand, when good decisions are made, the right environment is provided for continuous growth
and success of any organized effort.


7.1 Adaptability and Creativity
Decision Making is the process of defining the problem and identifying and choosing alternative
courses of action in a manner appropriate to the demands of the situation. The definition indicates
that the manager must adapt a certain procedure designed to determine the best option available
to solve certain problems.

Decisions are made at various management levels and at various management functions. Because
of this, decision making is regarded as “the heart” of all management functions.

7.2 The Decision Making Environments

Managers make problem solving decisions under three different conditions: certainty, risk and
uncertainty. All managers make decisions under each environment, but risk and uncertainty are
common to the more complex and unstructured problems faced by the top managers.
1. Environment of Certainty – decisions are made when the manager has perfect knowledge
of all the information needed to make a decision
2. Environment of Risk – the manager lacks complete information, there is no guarantee how
each solution will work but has probabilities of occurrence of all the outcomes
3. Environment of Uncertainty – information is poor that managers can’t even assign
probabilities to the likely outcomes of alternatives

7.3 The Rational Decision Making Process

1. Diagnose the Problem. If the manager wants to make an intelligent decision, his first move
must be to identify the problem. If the manager fails in this aspect, his next moves will be
useless. If the manager is not able to identify the real problem, the solution he will offer will
be irrelevant and may even be costly and destructive. Being able to identify the real problem
is tantamount to having the problem half-solved.

2. Analyzing the Environment. The environment where the organization is situated plays a
very significant role in the success or failure of such an organization. It is, therefore, very
important that an analysis of the environment is undertaken. In here the objective is the
identification of constraints, which may be internal or external limitations.
Internal Environment consists of organizational activities within a firm that surround
decision making. External Environment refers to variables that are outside the organization
and not typically within the short-run control of top management. The government, labor
unions, suppliers, banks, public, competitors, climate, and professional managers comprises
the external environment while the organizational structure, policies, procedures, rules, ability
of management, products strategy, promotion strategy, recruitment processes, incentive
systems, inventory control, plant facility layout, and profitability of the organizations are the
internal environment of a firm.

3. Develop Viable Alternatives. Oftentimes, a problem may be solved by any of the solutions
offered. In solving a problem, however, the best among the alternative solutions must be
considered by management. This is made possible by using a procedure with the following
steps: prepare a list of alternative solutions; determine the viability of each solutions; and
revise the list by striking out those which are not viable.

4. Evaluate Alternatives. After determining the viability of the alternatives and a revised list is
made, an evaluation of the remaining alternatives is necessary. This is important because
the next step involves making a choice. Proper evaluation makes choosing the right solution
less difficult.
How the alternatives will be evaluated will depend on the nature of the problem, the objective
of the firm, and the nature of the alternatives presented. Each alternative must be analyzed
and evaluated in terms of value or the benefits that can be expected from it, cost (out-of-
pocket cost, opportunity cost, and follow-on cost) and risk characteristics which refer to
the likelihood of achieving the goals of the alternatives.

5. Make a Choice. After the alternatives have been evaluated, the decision-maker must now
be ready to make a choice. This is the point where he must be convinced that all the previous
steps were correctly undertaken.


Choice-making refers to the process of selecting among the alternatives representing
potential solutions to a problem. At this point, specific effort should be made to identify all
significant consequences of each choice. To make the selection process easier, the
alternatives can be ranked from the best to worst on the basis of some factors like benefit,
cost and risk.

6. Implement Decision. After decision has been made, implementation follows. This is
necessary or decision making will be an exercise in futility. Implementation refers to carryout
out the decision so that the objectives sought will be achieved. To make implementation
effective, a plan must be devised.
At this stage, the resources must be made available so that the decision may be properly
implemented. Those who will be involved in implementation must understand and accept the
solution; otherwise, the execution of the plan will be a failure.

7. Evaluate and Adapt Decision Results. In implementing the decision, the results expected
may or may not happen. It is, therefore, important for the manager to use control and
feedback mechanisms to ensure results and to provide information for future decisions.
Feedback refers to the process which requires checking each stage of the process to assure
that the alternatives generated, the criteria used in evaluation, and the solution selected for
implementation are in keeping with the original goals and objectives. Control refers to
actions made to ensure that activities performed match the desired activities or goals that
have been set.
In this stage of the decision making process, the manager will find out whether or not the
desired result is achieved. If the result was positive, one may assume that the decision made
was good. Otherwise further analysis is necessary.

Essay on one poor decision made in the past and how are you going to make better decisions in the


The second function of management is organizing. After a manager has a plan in place, she can
structure her teams and resources. Skill in organizing is a very critical factor in the accomplishment of
the objectives of many organizations, whether they are private businesses or otherwise. The aim of
organizing activities is to have a collection of people in the organization who perform activities for a
specific purpose.
Organizing is undertaken to facilitate the implementation of plans. In effective organizing, steps are
undertaken to break up the total job into more manageable man-size jobs. Doing these will make it
possible to assign the particular tasks to particular persons. In turn, these will help facilitate the
assignment of authority, responsibility and accountability for certain functions and tasks. Efforts
expended in organizing may also result to easier coordination among the various activities.

8.1 Organizing Defined

A managerial function that establishes the orderly use of resources by assigning and
coordinating tasks to accomplish objectives in an efficient and effective manner.

8.2 The Nature and Development of Organizations

• Organization Defined
The framework or backbone by which the work of an organization is performed and it
provides the required channels, points of origin, and flow of management direction and

• The Core of Organizations

We are involved in organizational life from the time we get out of the bed. For example, the
minute we get up and drink a cup of coffee in the morning, we are engaging services such
as electricity, water, etc. which are provided by organization. Organizations are an important
part of our daily lives and it is hard to imagine a day without engaging in a task that does not
have an input from an organization. (schools, universities, hospitals, places of worships,


Mullins describes an organization as a “a consciously, coordinated unit created by groups
in society to achieve specific purposes, common aims and objectives by means of planned
and coordinated activities”. Organizations are created by people who decide to work together
in order to attain their specific objectives. Organizations function through the division of labor
and on hierarchy of authority. People and business processes are structured to achieve
organizational objectives.

There are three main types of organizations in the business environment:

 Private Sector Organization – governed by the laws of capitalism. Their aim is to
make private profit and they have no governmental component in their structure.
 Public Sector Organization – owned and controlled by the government. Their main
aim is not to make profit, but to deliver government services to citizens at national,
regional and local levels.
 Non-Profit Organizations – ones that provide goods and services for the benefit
without seeking private profit in return. Any profit that is made by a NPO is kept in the
organization for future use and not owned by any individual or a group.

Classification of Organizations
 Formal and Informal Organizations
Formal Organization “is the part of the system that has legitimacy and official
recognition”. It is the planned structure representing the intended configuration of
positions, job duties, and lines of authority among the components parts of the
Informal Organization is not a part of the formal organization and it does not have a
formal performance purpose. It is formed through friendship, common interest,
proximity, need satisfaction, collective power, group goals, and etc.

 Centralized and Decentralized Organizations

Centralized Organization systematically works to concentrate authority at the upper
levels. In a decentralized organization, management consciously attempts to spread
authority to the lower organization levels.
A variety or factors can influence the extent to which a firm is centralized and
decentralized. The following is a list of possible determinants:
• The external environment in which the firm operates. The more complex
and predictable this environment, the more likely it is that top management
will let low-level managers make important decisions. After all, low-level
managers are closer to problems because they are more likely to have direct
contact with customers and workers. Therefore, they are in a better position
to determine problems and concerns.
• The nature of the decision itself. The riskier or the more important the
decision, the greater tendency to centralize decision making.
• The abilities of low-level managers. If these managers do not have strong
decision-making skills, top managers will be reluctant to decentralize. Strong
low-level decision-making skills encourage decentralization.
• The organization’s tradition of management. An organization that
traditionally practiced centralization or decentralization is likely to maintain
that posture in the future.

 Bureaucratic and Organic Organizations

Bureaucratic Organizations is based on logic, order, and the legitimate use of formal
authority. It is meant to be orderly, fair and highly efficient. Their features include a
clear-cut division of labor, strict hierarchy of authority, formal rules and procedures,
and promotion based on competency. It is appropriate for fairly stable environment.
Organic Organization is a management system founded on cooperation and
knowledge-based authority. It works better in dynamic environments where managers
need to react quickly to change. It is much less formal and much more flexible. It is
characterized by: roles are not highly defined, tasks are continually redefined, little
reliance on formal authority, decentralized control, fast decision making, and informal
patterns of both delegation and communication.


• Organizational Structure and Its Types
Organization Structure defines how job tasks are formally divided, grouped, and
coordinated. It is a framework that shows hierarchy, set of formal tasks assigned to
individuals and departments, the formal reporting relationships and the design of systems to
ensure effective coordination of employees and departments.


 TALL OR FLAT STRUCTURE (Levels of Management and Supervision)
1. Tall structure has many levels of management.

• span of control is narrower, supervisory load is less
• more opportunities for promotion, more levels of position
• opportunities to specialize
• less demand for managers with multiple skills
• managers are afforded with more time to attend to other important problems
• communications tend to be slower and distorted because of the number of levels
it has to pass through
• number of management levels also hinders effective decision making
• more expensive to maintain as there are more to compensate

2. Flat structure has few levels of management.

• communication is generally faster and less distorted
• decisions can be made quickly
• supervisor’s salaries are eliminated
• require manager’s with experience in the various tasks
• a manager may have a little time for all subordinates
• when the manager is out, the group has no leader
• managers may have a little time to anticipate problems

 LINE OR STAFF STRUCTURE (Function and Authority)

1. Line Function is the basic organization framework. It has a direct, vertical
relationship between different levels in the firm.
• direct chain of command
• managers are given complete authority and responsibility over the activities
involving their functional areas
• directly involve in accomplishing primary goals of the organization
• manager must be familiar with diverse activities related to the operation of the


• neglects specialists
• Overload tasks

2. Staff Function supports line authority by advising, servicing and assisting but the
authority is typically limited. An example of staff functions are HR, Quality
Assurance, and Corporate Planning.
• provide expertise, advice, and support for the line positions
• managers have assistants delegated with specific advisory responsibility
• limited authority
• they don’t have to be obeyed


1. Functional Design grouped together the employees in separate departments on the
basis of common tasks, skills or activities they performed in an organization.

• efficient use of resources
• in-depth skill development
• clear career paths
• unity of direction
• enhanced coordination within functions
• slow decision making
• less innovation
• unclear performance responsibility
• poor coordination across functions

2. Divisional Design is that type where all activities needed to produce a good or
service are grouped together into independent units

• adaptation to unstable environment
• high customer satisfaction
• high task coordination
• clear performance responsibility
• inefficient use of resources
• focus is on division objectives
• loss of control
• costly

3. Matrix Design implements functional and divisional structures simultaneously in each

department. The employee is supervised by the functional manager in his work as a


specialist. The divisional manager integrates the activities of the specialists. The
following conditions favor the use of this design:
- Environmental pressures exist for a dual focus, such as innovation and quality;
- Large quantities of information must be processed;
- Efficiency is needed in the use of resources

• allows demands from the environment to be met simultaneously
• provides flexibility
• encourages resource efficiency
• enhances skill development
• increases motivation and commitment among employees
• aids top management in planning
• creates confusion
• power struggles within the group are potential problems
• place stress on individuals

• Organizational Chart
The visual representation of the structure of the organization.

8.3 Delegation
The downward transfer of authority from a manager to a subordinate.

Most organizations today encourage managers to delegate authority in order to provide maximum
flexibility in meeting customer needs. In addition, delegation leads to empowerment, in that people
have the freedom to contribute ideas and do their jobs in the best possible ways. This involvement
can increase job satisfaction for the individual and frequently results in better job performance.
Without delegation, managers do all the work themselves and underutilize their workers. The ability
to delegate is crucial to managerial success.

Principle 1 Match the Employee to the Task. Managers should carefully consider the employees
to whom they delegate tasks. The individual selected should possess the skills and
capabilities needed to complete the tasks. Perhaps even more important is to delegate
to an individual who is not only able to complete the task but also willing to complete
the task. Therefore, managers should delegate to employees who will view their
accomplishments as personal beliefs.
Principle 2 Be Organized and Communicate Clearly. The manager must have a clear
understanding of what needs to be done, what deadlines exist, and what special skills
are required. Furthermore, managers must be capable of communicating their
instructions effectively if their subordinates are to perform up to their expectations.
Principle 3 Transfer Authority and Accountability with the Task. The delegation process is
doomed to failure if the individual to whom the task is delegated is not given the authority
to succeed at accomplishing the task and is not held accountable for the results as well.
Managers must expect employees with the necessary resources and power to succeed,
giving them timely feedback on their progress, and holding them fully accountable for
the results of their efforts. Managers also should be available to answer questions as
Principle 4 Choose the Level of Delegation Carefully. Delegation does not mean that the manager
can walk away from the task or the person to whom the task is delegated. The manager
must maintain some control of both the process and the results of the delegated
activities. Depending upon the confidence the manager has in the subordinate and the
importance of the task, the manager can choose to delegate at several levels.

8.4 Departmentalization and its Types

Departmentation is the grouping of jobs based on criteria that managers believe to help in the
coordination and control of activities. A decision must also be made on whether the organization
would be departmentalized or not. Departmentation advantages are:
- Supervision is made easier
- The sharing of resources results in maximum use of resources
- Common measures of performance are established
- Communication is encouraged
1. According to Knowledge and Skills
2. According to Work Process and Function
3. According to Time
4. According to Product
5. According to Customer
6. According to Location

8.5 Reorganization
Reorganization is the process by which an existing organization undergoes changes in the size
and shape of the organization structure. It involves changes in hierarchy of authority, goals,
structural characteristics, administrative procedures and management systems.

Types of Organizational Change

1. Strategic – adjusting a company’s strategy to achieve the goals of the company or even
change the mission statement of the organization in response to the demands of external
2. Structural – redesigning the structure of the company due to the influences from the external
environment. It involves changes in the hierarchy of authority, goals, structural
characteristics, administrative procedures, and management systems.
3. Process-oriented – reengineering the processes to achieve optimum workflow and
productivity. It is often related to an organization’s production process or how the organization
assembles delivers services.
4. People-centered – altering attitudes, behaviors, skills or performance of employees in the
company. It involves communicating, motivating, leading and interacting within groups.

Opposition to Change
➢ Uncertainty and insecurity
➢ Reaction against the way change is presented
➢ Threats to vested interests
➢ Cynicism and lack of trust
➢ Perceptual differences and lack of understanding
➢ Faulty thinking
➢ Inadequate change process
➢ Insufficient resources
➢ Lack of commitment to change
➢ Poor timing
➢ A culture resistant to change

Overcoming Resistance to Change

➢ involve workers in the change process
➢ communicate openly about the changes
➢ provide advance notice of an upcoming change
➢ exercising sensitivity to worker’s concerns
➢ reassuring workers that change will not affect their security

Discuss the statement:
“When the appropriate structure is determined, the firm no longer has to worry about structure.”


After an organization’s structural design is in place, it needs people with the right skills, knowledge, and
abilities to fill in the structure. It is the people that either create or undermine an organization’s reputation
for quality in both products and services.
Business organizations are very sensitive to whatever staffing errors are made. Placing the wrong
person in a highly specialized position like quality control, for instance, may bring enough damage to
the firm to cause its bankruptcy. Yet, this refers to a single error in staffing.
Many of the reasons leading to business failure could be traced to errors in staffing. Accidents involving
millions of pesos could be result of hiring an accident-prone person. Hiring an unqualified person may
cause demoralization among employees who have been serving the company well.
There is no doubt that effective staffing places the company on a competitive stance. Effective staffing
may not make a company number one among competitors, but ineffective staffing will make the
company’s survival highly improbable.

9.1 The Staffing Process

The manager must be concerned with putting the right persons in various positions within his area
of concern. Although some of the important aspects of staffing may be delegated to the human
resources department, the manager assumes a great responsibility in assuring that the right
persons are assigned to positions that fit their qualifications.

Staffing is a managerial function that determines human resources needs, recruits, selects, trains,
and develops human resources for jobs created by an organization. It is undertaken to match
people with jobs so that the realization of the organization’s will be facilitated. Attracting,
developing, rewarding and retaining the people needed to reach organizational goals are the
activities that make up the staffing function.

The staffing process consists of the following series of steps:

1. Human Resource Planning. This begins with a job analysis in which descriptions of all
jobs (tasks) and the qualifications needed for each position are developed. A job description
is a written statement of what a jobholder does, how it’s done, and why it’s done. It typically
portrays job content, environment, and conditions of employment. The job specification
states the minimum acceptable qualifications needed to perform a given job successfully. It
identifies the knowledge, skills and abilities needed to do the job effectively.
Job analysis is then followed by a human resource inventory, which catalogs qualifications
and interests. Next, a human resource forecast is developed to predict the organization’s
future needs for jobs and people based on its strategic plans and normal attrition. The
forecast is then compared to the inventory to determine whether the organization’s staffing
needs will be met with existing personnel or whether managers will have to recruit new
employees or terminate existing ones.

2. Recruitment. When different positions had been identified as necessary and the decision to
fill them with persons had been made, the next logical step is recruitment. Recruitment refers
to attracting qualified persons to apply for vacant positions in the company so that those who
are best suited to serve the company may be selected.
Keep in mind that recruiting strategies differ among organizations. Although one may
instantly think of campus recruiting as a typical recruiting activity, many organizations use
internal recruiting, or promote-from-within policies, to fill their high-level positions. Open
positions are posted, and current employees are given preferences when these positions
become available. Internal recruitment is less costly than an external search. It also
generates higher employee commitment, development and satisfaction because it offers
opportunities for career advancement to employees rather than outsiders.
If internal sources do not produce an acceptable candidate, many external recruiting
strategies are available, including the following:
• Newspaper Advertising
• Recruitment Firms (private, public or temporary agencies)
• Employee Referrals
• Internship Programs
• Internet Employment Sites
• Schools/Universities
• Competitors

3. Selection. This refers to the act of choosing from those that are available individuals the
most likely to succeed on the job. A requisite for effective selection is the preparation of a list
indicating that an adequate pool of candidates is available. The purpose of selection is to
evaluate each candidate and to pick the most suited for the position available.

Ways of determining the Qualifications of a Job Candidate

• Application Forms. It provides a record of salient information about the applicants
for positions, and also furnish data for personnel research.
• References. Those statement given by previous employers, co-workers, teachers,
etc. that provides some vital information about the character of applicant. Reference
checking allows employers to verify information supplied by the candidate.
• Interviews. A formal, in-depth conversation conducted to evaluate an applicant’s
acceptability. In general, the interviewer seeks to answer three broad questions: can
the applicant do the job?, Will the application do the job? and How does the applicant
compare with others who are being considered for the job?
• Testing. This involves an evaluation of the future behavior or performance of an
1. Psychological Test – is an objective, standard measure of a sample behavior
of the individual. It is further classified as follows:
i. Aptitude Test – measures a person’s capacity or potential ability to learn
ii. Performance Test – measures a person’s current knowledge of a subject
iii. Personality Test – measures personality traits or temperament
iv. Interest Test – measures a person’s interest in the work.
2. Physical Examination – is done to assess the applicant’s physical health is
adequate to meet the job requirements.

4. Induction and Orientation. After an applicant is finally selected and subsequently hired, the
next step to be undertaken are induction and orientation.
In induction, the new employee is provided with the necessary information about the
company. His duties, responsibilities, and benefits are relayed to him. Personnel and health
forms are filled out, and passes are issued. The company history, its products and services,
and the organization structure are explained to the new employee.
In orientation, the new employee is introduced to the immediate working environment and
co-workers. Location, rules, equipment, procedures, training plans, and performance
expectations are discussed. The new employee also undergoes the “socialization process”
by pairing him with an experienced employee and having a one-on-one discussion with the

5. Training and Development. If the newly-hired (or newly-promoted) employee is assessed

to be lacking the necessary skills required by the job, training becomes a necessity.

Training refers to the learning that is provided in order to improve job performance. It is a
systematic development of the attitude/ knowledge / behavior patterns for the adequate
performance of a given job or task.

Training programs may be classified into the following:

a. Training Programs for Non-Managers. This type of training is directed to non-
managers to increase knowledge and skills to perform a particular job. The four
techniques under this are:


i. On-the-job Training. The trainee is placed in an actual work situation under
the direction of his immediate supervisor, who acts as trainer. This situation
motivates strongly the trainee to learn.
ii. Vestibule Training. The trainee is placed in a situation almost exactly as
the work environment. It duplicates the job, as well as the required
machinery and materials. The trainee is taught with how to perform the job
by a skilled person and is able to learn a job at a comfortable pace without
the pressure of production schedules and output.
iii. Apprenticeship Training. A combination of on-the-job training and
experience with classroom instruction in particular subject.
iv. Special Courses. Those that provide more emphasis on education rather
than is useful for teaching actual material, concepts, principles,
and theories to large groups with limited or no knowledge of the subject.

b. Training Programs for Managers. The training needs of managers may be classified
into four types: decision-making skills, interpersonal skills, job knowledge and
organizational knowledge.

1. Decision Making Skills

i. In-Basket. The trainee is provided with a set of notes, messages, telephone
calls, letters, and reports, all pertaining to a given company situation. The
trainee is expected to handle the situation within a given period of 1 or 2
ii. Management Games. A training method where trainees are placed in a
simulated situation and are required to make an ongoing series of decisions
about that situation.
iii. Case Studies. This presents actual situations in organizations and enables
one to examine successful and unsuccessful operations. Case studies
emphasize the manager’s environment, improve communication skills, offer
rewards in solving problems, possess the quality of illustration and establish
concrete reference points for connecting theory in practice.

2. Interpersonal Competence
i. Role-Playing. In this method, the trainees are assigned with roles to playing
a given case incident. They are provided with a script or a description of a
given problem and of the key persons they are to play. Th purpose of this
method is to improve the skill of the trainees in human relations, supervision
and leadership.
ii. Behavior Modeling. It attempts to influence the trainee by showing model
persons behaving effectively in a problem situation. The trainee is expected
to adapt the behavior of the model and use it effectively in some instances
later on.
iii. Sensitivity Training. Under this method, awareness and sensitivity to
behavioral patterns of oneself and others are developed.
iv. Transactional Analysis. This method intends to help individuals not only
understand themselves and others but also improve their interpersonal
communication skills. This is actually the study of social transactions
between people so as to develop improved communication and human

3. Job Knowledge Skills

i. On-the-job Experience. It provides valuable opportunities for the trainee
to learn various skills while actually engaged in the performance of a job.
ii. Coaching. This method requires a senior manager to assist a lower-level
manager by teaching him the needed skills and generally providing
direction, advice, and helpful criticism. The senior manager must be skilled
himself and have the ability to educate; otherwise, the method will be


iii. Understudy. Under this method, a manager works as assistant to a higher-
level manager and participates in planning and other managerial functions
until he is ready to assume such position himself.

4. Organizational Knowledge Skills

i. Position Rotation. Under this method, the manager is given assignments
in a variety of departments. The purpose is to expose him to different
functions of the organization.
ii. Multiple Management. This method is premised on the idea that junior
executives must be provided with means to prepare them for higher
management position. To achieve this, a junior board of directors is created
consisting of junior executives as members. The board is given the authority
to discuss problems that the senior board could discuss. The members are
encouraged to take a broad business outlook rather than concentrating on
their specialized lines of work.

6. Performance Appraisal. It is the measurement of employee performance. The purpose of

appraisal are as follows:
• To influence employee performance and development
• To determine merit of pay increase
• To plan for future performance goals
• To determine training and development needs
• To assess the promotion of potential employees

Ways of Appraising Performance. An employee’s performance may be measured using

any of the following methods:
1. Rating Scale Method. Each trait or characteristics to be rated is represented by a line
on which the rater indicates the degree to which the individual possesses the trait or
2. Essay Method. The evaluator in this method composes statements that best describe
the person evaluated.
3. Management by Objectives Method. Specific goals are set collaboratively for the
organization as a whole, for various subunits, and for each individual member.
Individuals are then evaluated on the basis of how well they have achieved the results
specified by the goals.
4. Assessment Center Method. One is evaluated by persons other than the immediate
superior. This method is used for evaluating managers.
5. Checklist Method. The evaluator checks statement on a list that are deemed to
characterize an employee’s behavior or performance.
6. Work Standards Method. Standards are set for a realistic worker output and later on
used in evaluating the performance of non-managerial employees.
7. Ranking Method. Each evaluator arranges employees’ names in rank order from the
best to the poorest.
8. Critical-Incident Method. The evaluator recalls and writes down specific but critical
incidents that indicate the employee’s performance. A critical incident refers to the
specific instance of inferior or superior performance of the employee.

9.2 Changes in Employment Status

7. Employment Decisions. After evaluating the performance of employees, the management
will now be ready to make employment decisions. This is the process of identifying monetary,
non-monetary compensations and other types of remuneration, incentives and other
considerations to motivate, inspire and retain employees. These may consist of the following:
• Compensation - refers to a wide range of financial and non-financial rewards to
employees for their services rendered to the organization.
➢ Monetary Rewards – are direct compensation, it refers to monetary benefits
offered and provided to employees in return of the services they provide to the
organization. It includes basic salary, house rent allowance, conveyance, leave
travel allowance, medical reimbursements, special allowances, bonus, Gratuity,


➢ Non-monetary Rewards – are indirect/supplementary compensation, it refers to
non-monetary benefits offered and provided to employees in lieu of the services
provided by them to the organization. It includes leave policy, overtime policy, car
policy, hospitalization, insurance, leave travel assistance limits, retirement
benefits, holiday homes, etc.
• Promotion – refers to the movement by a person into a position of higher pay and
greater responsibilities and is given as a reward for competence and ambition.
• Transfer – the movement of a person to a different job at the same or similar level of
responsibility in the organization. Transfers are made to provide growth opportunities
for the persons involved or to get rid of poorly performing employees.
• Demotion – a movement from one position to another which has less pay or
responsibility attached to it. Demotion is used as a form of punishment or as a
temporary measure to keep an employee until he is offered with a higher position.

8. Separation. it is either a voluntary or involuntary and permanent or temporary termination of

an employee’s services. In case of voluntary termination, the organization’s management
must find out the real reason. If the presence of defect is determined in the organization,
corrective action is necessary.
• Lay-off – it is temporary or permanent and involuntary separation, this happens when
economic conditions and competition faced by employers significantly affect the rates
they are able to pay. Competition and recessions can force prices down and reduce
the income from which compensation payments are derived. In such situations,
employers have little choice but to reduce wages and/or lay-off employees, or, even
worse, to go out of business.
• Discharge/Firings – it is permanent and involuntary separation, this happens when
the employee’s performance is poor even after training efforts or reasonable steps to
rehabilitate the employee’s performance. In some cases, such as gross
insubordination or theft, immediate dismissal is required.
• Resignation – it is permanent and voluntary separation of an employee to the
organization due to his personal reasons. Forced resignation is used as substitute to
discharge because it connotes positive meaning while discharge is negative.
• Retirement – it is permanent and voluntary, this happens when an employee reached
a certain age and not because of any other reason.

Briefly explain the statement:
“A right person for the right job determines work performance.”

1. Discuss the benefits of effective staffing in the face of competition and survival
2. Explain the value of HR Planning in ensuring achievements of organizational goals


10. The Concept of Directing
After the various requirements for maintaining a business organization are put in place, the firm
will still need a sort of engine that will propel it to become a successful venture. When
competitors are beginning to demonstrate the ability to derail the plans of the company,
somebody must take charge of not letting this happen.

Assets, even if they are abundant, cannot, on their own, achieve company objectives. Human
resources, even if they are fully trained and properly motivated, may still proceed to move toward
the wrong direction. Some employees are easily affected by disruptions and minor failures. The
potential damage may be great if these few persons perform key functions. The effective use of
assets will need the wisdom of somebody who will provide guidance on their proper utilization.
Somebody must console the employees who are distracted by minor setbacks. Somebody must
uplift their spirits when they feel demoralized.

Successful firms recognize the need to address the above-mentioned concerns and the answer
lies on effective directing. As a result, they place a high priority on providing trainings on
leadership, communication and motivation.

Managers, in whatever level they happen to be, are not exempted from the problem of effective
directing. If this is really so, then they must be concerned with the management function of

10.1 Directing Defined

A managerial function that refers to the process of communicating, motivating and
leading others to engage in the work behaviors necessary to reach goals.

10.2 Communication
People organize themselves into groups to facilitate the achievement of objectives. The
synchronization of activities will make the organization more effective and efficient. This
may be made possible, however, if each member knows exactly what his responsibilities
are, where and when his actions will be required, and how intense his action should be.
Proper understanding of responsibilities is a function of effective communication. A
person will perform according to what he perceives to be his role and the right perception
of roles happens with sufficient motivation. The success of efforts to motivate, however,
will depend on whether or not they are properly communicated.

Communication Defined
Communication is the process of sharing information through verbal and nonverbal
means, including words, messages, and body movements.
Communication is the transfer of information and understanding from one person to
another person. It is a way of reaching others by transmitting ideas, facts, thoughts,
feelings, and values. Its goal is to have the receiver understand the message as it was
intended. When communication is effective, it provides a bridge of meaning between the
two people so that they can share what they feel and know. By using this bridge, both
parties can safely cross the river of misunderstanding that sometimes separates people.
Importance of Communication
Organizations cannot exist without communication. If there is no communication,
employees cannot know what their co-workers are doing, management cannot receive
information inputs, and supervisors and team leaders cannot give instructions.
Coordination of work is impossible, and the organization will collapse for lack of it.
Cooperation also becomes impossible, because people cannot communicate their needs
and feelings for others. We can say with confidence that every act of communication
influences the organization. Communication helps accomplish all the basic management
functions-planning, organizing, leading and controlling – so that organizations can
achieve their goals and meet their challenges.
When the communication is effective, it tends to encourage better performance and job
satisfaction. People understand their jobs better and feel more involved in them. In some
instances, they even will voluntarily give up some of their long-established privileges
because they see that a sacrifice is necessary.
Poor Communication is probably the most frequently cited source of interpersonal conflict.
Because individuals spend nearly 70 percent of their waking hours communicating –
writing, speaking, listening – it seems reasonable that one of the biggest inhibitors of
group performance is lack of effective communication. Good communication skills are
critical to career success. Polls or recruiters nearly always show communication skills
among the most desired characteristics.
No individual, group or organization can exist without sharing meaning among its
members. It is only thus that we can convey information and ideas. Communicating is
more than merely imparting meaning, that meaning must be understood. Communication
must include both the transfer and the understanding of meaning.

Functions of Communication
Communication may be used to serve nay of the following functions:
1. Information Function. Information provided through communication may be used in
decision making at various levels in the organization. Decisions are often dependent
upon the quality and quantity of information received.
2. Motivation Function. Communication is used to motivate employees to commit
themselves to the organization’s objectives. When objectives are clearly stated,
direction is provided, and achieving them becomes a matter of course.
3. Control Function. When reports, policies and plans define roles; clarify duties,
authorities and responsibilities are property communicated then effective control is
4. Emotive Function. When feelings are repressed, employees are affected by anxiety,
which in turn, affects performance. Whatever types of emotions are involved, whether
satisfaction, dissatisfaction, happiness, or bitterness, communication provides a
means to decrease the internal pressure affecting the individual.


Before a communication can take place, it needs a purpose, a message to be conveyed

between a sender and a receiver. The sender encodes the message (converts it to a
symbolic form) and passes it through a medium (channel) to the receiver, who decodes
it, the result is transfer of meaning from one person to another.
The sender initiates the message by encoding a thought. The message is the
actual physical product of the sender’s encoding. When we speak, the speech is the
message. When we write, the writing is the message. When we gesture, the movements
of our arms and the expressions on our faces are the message. The channel is the
medium through which the message travels. The sender selects it, determining whether
to use a formal or informal channel. Formal channels are established by the organization
and transmit messages related to the professional activities of members. They
traditionally follow the authority chain within the organization. Other forms of messages,
such as personal or social, follow informal channels, which are spontaneous and
emerge as response to individual choices. The receiver is the person(s) to whom the
message is directed, who must first translate the symbols into understandable form. This
step is the decoding of the message. Noise represents communication barriers that
distort the clarity of the message, such as perceptual problems, information overload,
semantic difficulties, or cultural differences. The final link in the communication process
is a feedback loop. Feedback is the check on how successful we have been in
transferring our messages as originally intended. It determines whether understanding
has been achieved.

The two-way communication process is the method by which a sender reaches a

receiver with a message. The process always requires eight steps, whether the two
parties talk, use hand signals, or employ some advanced-technology means of
1. Develop an Idea. To develop an idea that the sender wishes to transmit. This is the
key step, because unless there is a worthwhile message, all the other steps are
somewhat useless.
2. Encode. To encode or convert the idea into suitable words, charts, or other symbols
for transmission. At this point the sender determines the method of transmission so
that the words and symbols may be organized in suitable fashion for the type of
transmission. The key to successful encoding lies in the process of framing an issue
for presentation. Framing uses rich, colorful, carefully selected language to shape the
perceptions of recipients. The sender of a communication attempts to frame an issue
by placing it in a particular context or background to manage the meaning in the way
it was intended. Framing is a potent tool for managers to create vivid images and
memorable messages, and thereby shape the attitudes and actions of their followers.
3. Transmit. When the message is finally developed, the next step is to transmit it by
the method chosen, such as memo, phone call, or personal visit. The sender also
chooses a certain channel such as bypassing or not bypassing the superintendent,
and communicates with careful timing. The sender also tries to keep the
communication channel free of barriers, or interference, so that the message has a
chance to reach the receiver and hold his or her attention. In employment interviewing
or performance appraisals, for example, freedom from distraction is desirable.
4. Receive. Transmission allows another person to receive a message. In this step the
initiative transfers to the receiver, who tunes in to receive the message. If it is oral,
the receiver needs to be good listener. If the receiver does not function, the message
is lost.
5. Decode. To decode the message so that it can be understood. The sender wants the
receiver to understand the message exactly as it was sent. Understanding can occur
only in a receiver’s mind. A communicator may make others listen, but there is no way
to make them understand. The receiver alone chooses whether to understand or not.
Many employers overlook this fact when giving instructions or explanations. They think
that telling someone is sufficient, but the communication cannot proceed until there is
understanding. This process is known as “getting through” to a person.
6. Accept. Once the receiver has obtained and decoded a message, that person has
the opportunity to accept or reject it. The sender would like the receiver to accept the
communication in the manner intended so that activities can progress as planned.
Acceptance is a matter of choice and degree, such that the receiver has considerable
control over whether or not to embrace all the message or just parts of it. Some factors
affecting the acceptance decision revolve around perceptions of the message’s
accuracy, the authority and credibility of the sender, the sender’s persuasive skills and
the behavioral implications for the receiver.
7. Use. The next is for the receiver to use the information. The receiver may discard it,
perform the task as directed, store the information for the future, or do something else.
This is a critical action step, and the receiver is largely in control of what to do.
8. Provide Feedback. When the receiver acknowledges the message and responds to
the sender, feedback has occurred. Feedback completes the communication loop,
because there is a message flow from the sender to the receiver and a back the

Two-way communication, made possibly by feedback, has a back-and forth pattern. In

two-way communication, the speaker sends a message and the receiver’s response
comes back to the speaker. The result is a developing play-by-play situation in which the
speaker can, and should, adjust the next message to fit the previous response of the
receiver. The sender needs feedback – the final step – because it tells whether the
message was received, decoded properly, accepted, and used. If necessary, the sender
should seek and request feedback from the receiver. When this two-way communication
occurs, both parties experience greater satisfaction, frustration is prevented, and work
accuracy is much improved.

Communication Symbols
1. Words – main communication symbol used on the job. “Words do not provide meaning,
but people do”
2. Pictures – used to clarify word communication such as blueprints, charts, diagrams,
causal maps, visual aids in training programs, scale models of products and similar
devices. “A picture is worth a thousand words”
3. Action (nonverbal Communication) – “Actions speak louder than words” body
language, facial expressions


Communication that flows from one level of a group or organization to a lower level. Group
leaders and managers use it to assign goals, provide job instructions, explain policies and
procedures, point out problems that needed attention, and offer feedback about


1. Job instructions – employees needed proper instruction regarding their work
2. Performance feedback – employees need feedback to know what to do and how
well they are meeting their own goals.
3. News – employees need fresh and timely news to know updates regarding the
4. Social support – the employees have the perception that they are cared for,
esteemed, and valued. The presence (and caring delivery) of communication is what
the employees valued.

Upward communication flows to a higher level in the group or organization. It’s used to
provide feedback to higher-ups, inform them of progress toward goals, and relay current
problems. Upward communication keeps managers aware of how employees feel about
their jobs, co-workers, and the organization in general. Managers also rely on upward
communication for ideas on how conditions can be improved.


1. Questioning – management takes an interest in employees’ opinions, desires
additional information and values their inputs
2. Listening – management actively listens to their employees
3. Employee Meetings – management encourages meetings between employees to
talk about job problems, needs and management practices that can help and
interfere their performance
4. Open-door policy – management encourages employees to come to higher
management with any matter that concerns them. More effective if managers
practice MBWA in which they take initiative in making contact with large number of
5. Participation in Social groups – management implements informal, casual
recreational vents, parties, picnics, sports events trips to know or share more
information with employees

When communication takes place among members of the same work group, members of
work groups at the same level, managers at the same level, or any other horizontally
equivalent workers, is describe as lateral communication. Lateral communication saves
time and facilitates coordination. Among the techniques appropriate for horizontal
communication are: memos, meetings, telephones, picnics, dinners, and other social
The purpose of horizontal communication are:
a. To coordinate activities between departments;
b. To persuade others at the same level of organizations; and
c. To pass on information about activities or feelings.

Various factors may impede the efficient flow of communication. Any or all of these factors
may, at any stage, derail the process. Even if the message is transmitted by the channel,
the timing and the meaning of the message may be affected by some factors. The barriers
to communication may be classified generally as:

1. PERSONAL BARRIERS – these are hindrances to effective communication arising

from the communicator’s characteristics as a person, including emotions, values, poor
listening habits, sex, age, race, socioeconomic status, religion, education, and so on.

Emotion cloud the communicator’s ability to correctly judge the real meaning of the
messages received, assuming that this could even be received at all. People with
different values will find it hard to communicate with each other. Poor listening habits
of a receiver frustrate the communication efforts of the sender. The sex, age, race,
socioeconomic status, religion, and education of both the sender and the receiver
provide formidable barriers to effective communication.

2. PHYSICAL BARRIERS – these are interferences to effective communication

occurring in the environment where the communication is undertaken. The very loud
sound produced by a passing jet temporarily drowns out the voice of a guest delivering
a speech. Such distraction does not allow full understanding of the meaning of the
entire message and is an example of a physical barrier.

Physical barriers include distances between people, walls, a noisy sound system near
a phone, etc. an office that is too classy may sometimes inhibit a person from meeting
the occupant of the office face-to-face. A menacing pet dog (or secretary) posted near
the door may also prevent a person from directly communicating with the object
person behind the door.

A communication channel that is overloaded may also prevent important information

to reach the intended user. Another physical barrier to communication is poor timing,
for instance, how may one expect a person who just lost a loved one to immediately
accede to a personal request from a fellow employee.?

3. SEMANTIC BARRIERS – Semantics is the study of meaning as expressed in

symbols. Words, pictures, or actions are symbols that suggest certain meanings.
When the wrong meaning has been chosen by the receiver, misunderstanding occurs.
Such error constitutes a barrier to communication.

A semantic barrier may be defined as an interference with the reception of a message

that occurs when the message is misunderstood even though it is received exactly as

For example, the words “wise” and “salvage” will be interpreted differently by an
English-speaking foreigner from the way the Filipinos, interpret them.

Overcoming Barriers to Communication

1. Use feedback to facilitate understanding and increase the potential for appropriate
2. Repeat messages in order to provide assurance that they are properly received.
3. Use multiple channels so that the accuracy of information may be enhanced.


4. Use simplified language that is easily understandable and which eliminates the
possibility of people getting mixed-up with meanings.

1. “Watch what we do, not what we say.” Is this a good practice in organizations? Explain.
2. Poor communication of the organization’s goals is often given as the reason for low performance
of the organization. do you think that this is usually a valid explanation?

10.3 Motivation
Business must produce outputs that will help maintain their competitive stance in the
market. Products or services must be produced with the least cost, even if it is only one
of the factors required for business survival and growth.

Economy in production, however, will depend on how motivated the employees are in the
performance of their assigned tasks. As the outputs will be needed by customers in
various qualities and quantities, at different times and places, the firm must be able to
deliver the requirement, or it will be driven out of the market.

It will take a different motivation level to meet quality standards than to produce the
required quantity. Although motivation is a common ground among the various activities,
the levels may not be so, and this makes motivation a complicated undertaking.

In any case, it is important for management to understand that motivation is a function

that can be used as a powerful means to achieve the company’s objectives. Literature
abounds with stories of organizations, which succeeded because of highly motivated

Motivation Defined
The process of activating behavior, sustaining it and directing it towards a particular goal.
Motivating refers to the act of giving employees reasons or incentives to work to achieve
organizational objectives.

Elements of Motivation
The three key elements are intensity, direction and persistence. Intensity describes
how hard a person tries. This is the element most of us focus on when we talk about
motivation. However, high intensity is unlikely to lead to favorable job-performance
outcomes unless the effort is channeled in a direction that benefits the organization.
Therefore, we consider the quality of effort as well as its intensity. Effort directed toward
that consistent with the organization’s goals, is the kind of effort we should be seeking.
Finally, motivation has a persistence dimension. This measures how long a person can
maintain effort. Motivated individuals stay with a task long enough to achieve their goal.


The motivation process starts with a need. And the tension is to satisfy immediately the
need. For example is in the workplace, if a person is in need of a job. He then searches
in the environment on the type of job and organization he may fit in. He looks for
opportunities and screens his options. If his goal is just to find any job regardless of the
degree he obtained in college, it will be a lot easier for him to choose from among several
options. If he will try to tailor fit with his degree, then his goal is to find a good company
to work for with consideration of his college degree.

If he finds a job, he will put his best efforts to satisfy his employers. With his good
performance and ability, he is then rewarded for his efforts. Then, his need is satisfied.


Individuals or groups of individuals may be motivated to perform through the use of
various techniques. These techniques may be classified as motivation though job design,
motivation through rewards, motivation though employee participation, and other
motivation techniques for the diverse workforce.

1. MOTIVATION THROUGH JOB DESIGN. A person will be highly motivated to perform

if he is assigned a job he likes. The first requisite, however, is to design jobs that will
meet the requirements of the organization and the persons who will occupy them.
Job Design is concerned with specifying the tasks that constitute a job for an
individual or group.

In motivating through the use of job design, two approaches may be used:
a. Fitting People to Jobs. Routine and repetitive tasks make workers suffer from
chronic dissatisfaction. To avoid this, the following remedies may be adapted:
i. Realistic Job Preview – undertaken by management by “conveying to
applicants what organizational life will actually be like on the job, warts and
ii. Job Rotation – undertaken when people are moved periodically from one
specialized job to another.
iii. Limited Exposure – undertaken when a worker’s exposure to a highly
fragmented and tedious job is limited.

b. Fitting Jobs to People. Instead of changing the person, management could

consider changing the job. this may be achieved with the use of the following:
i. Job Enlargement – when two or more specialized tasks in a work flow
sequence is combined into a single job.


ii. Job Enrichment – when efforts are made to make jobs more interesting,
challenging and rewarding.

2. MOTIVATION THROUGH REWARDS. Rewards consists of material and

psychological benefits to employees for performing tasks in the workplace. Properly
administered reward system can improve job performance and satisfaction.
Rewards may be classified into two categories:
a. Extrinsic rewards – refer to rewards external to the job, such as pay, promotion
or fringe benefits. Examples are Monthly pay, 13th month pay, 14th month pay,
housing allowance, sick leave benefits, vacation leave benefits, pension plan, paid
vacation trip, health insurance and accident insurance
Management of Extrinsic Rewards. To motivate job performance effectively,
extrinsic rewards must be managed in line with the following:
i. it must satisfy individual’s needs
ii. the employees must believe effort will lead to reward
iii. rewards must be equitable
iv. rewards must be linked to performance
b. Intrinsic rewards – are internally experienced payoffs and which are self-granted.
Examples are a sense of accomplishment, self-esteem, and self-actualization.

No Single type of reward is generally applicable to all employees. This is because

individuals have needs different from others. As much as possible, the particular needs
of an individual must be matched with the corresponding reward if motivation is the
objective. Although the administrative constraints inherent to such systems could be a
hindrance to their adoption, they must be used whenever feasible.

Employees must believe that efforts will lead to reward. Otherwise, they will not strive to
turn in more efforts in their particular job assignments.

Rewards that are not equitable will not produce the desired motivation. When employees
know that reward is tied up with individual performance, management may expect extra
efforts from them. a negative example is the practice in some government offices where
every employee, regardless of performance, is given a productivity bonus. As a result,
the majority is not motivated to exert extra efforts.


participate in deciding on various aspects of their jobs, their personal involvement is
often carried up to the point where the tasks are completed.
The specific activities identified where employees may participate are as follows:
setting goals, making decisions, solving problems, and designing and implementing
organizational changes.

The more popular approaches to participation included the following:

a. Quality Control Circle. A method of direct employee participation where the
objective is to produce ideas for improving productivity and working condition.
The circle consists of three to ten employees, usually doing related work, who meet
at regular intervals (once a week for an hour, for example) to identify problems and
discuss their solutions. The circle includes a leader such as a foreman, but relies
on democratic processes. The members are trained in various analytical
techniques by a coordinator. The circle forwards its recommendations to
management, which in turn, makes decisions on its adoption.

b. Self-managed Teams. When workers have reached a certain degree of discipline,

they may ripe for forming self-managed teams. Also known as autonomous work
group, or high-performance teams, self-managed teams take on traditional
managerial tasks as part of their normal work routine.

The self-managed team works on their own, turning out a complete product or
service and receiving minimal supervision from managers who act more as
facilitators then supervisors. When a product or service is produced by a group of
professionals or specialists, they might as well be formed as a self-managed team
to save on supervisory costs.

Requisites to Successful Employee Participation Programs. To succeed, an

employee participation program will require the following:
i. a profit-sharing or gain-sharing plan;
ii. a long-term employment relationship with good job security;
iii. a concerted effort to build and maintain group cohesiveness; and
iv. protection of the individual employee’s rights.

4. OTHER MOTIVATION TECHNIQUES. The advent of theories of individual differences

and the biological clock of human being has challenged managers to adapt other
motivation techniques such as:

a. Flexible Work Schedules. There is an arrangement, called flextime, which allows

employee to determine their own arrival and departure times within specified limits.
b. Family Support Services. Employees are oftentimes burdened by family
obligations like caring for children. Progressive companies provide day care
facilities for children of employees.
c. Sabbaticals. Is given to an employee after a certain number of years of service.
The employee is allowed to go on leave for two months to one year with pay to
give him time for family, recreation, and travel. It is expected that when the
employee returns for work, his motivation is improved.


A. CONTENT THEORIES - focus on human wants and needs or desires that are
internalized and give impetus to individual behavior


An incentive system that paid workers more money for meeting the new standard.
Taylor believe that existing reward system were not designed to reward individuals
for high production. He felt that when highly productive people discover that they
are being compensated basically the same as less productive people, then the
output of highly productive people will decrease. This theory is based on
assumption that money is the primary motivator. Financial rewards are directly
related to performance in the belief that if the reward is great enough, employees
will produce more.


Abraham Maslow’s hierarchy of five needs—physiological, safety, social, esteem,
and self-actualization—in which, as each need is substantially satisfied, the next
need becomes dominant.
An individual’s needs form a staircase. At any stage of his/her life, the individual
has specific needs. The needs progress until he/she is able to achieve the highest
need. It is important for a manager to determine the kind of need the employee
has at a certain point of his/her career so that the manager can effectively motivate
the employees. Once the need is satisfied, it ceases to become a motivator.
Maslow’s theory is based on the following two principles:
a. Deficit Principle: a satisfied need no longer motivates behavior because
people act to satisfy deprived needs
b. Progressive Principle: the five needs identified existed in a hierarchy, which
means that a need at any level only comes into play after a lower-level need
has been satisfied.

Maslow’s Hierarchy of Human Needs

Level Needs To Satisfy, Offer:
Self-actualization Needs Creative and challenging work
Participation in decision making
Job flexibility and autonomy


Esteem Needs Responsibility of an important job
Promotion to higher status job
Praise and recognition from boss
Social Needs Friendly co-workers
Interaction with customers
Pleasant supervisor
Safety Needs Safe working conditions
Job security
Base compensation and benefits
Physiological needs Rest and refreshment breaks
Physical comfort on the job
Reasonable work hours


A theory that relates intrinsic factors to job satisfaction and associates extrinsic
factors with dissatisfaction. Also called motivation-hygiene theory.

Herzberg identified two classes of factors associated with employee satisfaction

and dissatisfaction. In this research, Herzberg found out that satisfied employees
consider the following factors (satisfiers or motivation factors) as responsible for
job satisfaction: achievement, recognition, the work itself, responsibility,
advancement and growth. Dissatisfied employees consider the following factors
(dissatisfiers or hygiene factors) as responsible for job dissatisfaction: company
policy and administration, supervision, relationship with supervisor, work
conditions, salary, relationships with peers, personal life, relationship with
subordinates, status and security.

If the manager considers Herzberg’s theory in motivating employees, he must do

something to eliminate the dissatisfiers and install satisfiers. Even if the
dissatisfiers are eliminated, the employee is still not motivated to work hard.


Clayton Alderfer’s ERG (Existence, Relatedness, Growth) theory is built upon
Maslow’s hierarchy of needs theory. To begin his theory, Alderfer collapses
Maslow’s five levels of needs into three categories:
1. Existence needs are desires for physiological and material well-being.
2. Relatedness needs are desires for satisfying interpersonal relationships.
3. Growth Needs are desires for continued psychological growth and

This approach proposes that unsatisfied needs motivates behavior, and that as
lower level needs are satisfied, they become less important. Higher level needs
though, become more important as they are satisfied, and if these needs are not
met, a person may move down the hierarchy, which Alderfer calls the frustration-
regression principle. What he means by this term is that an already satisfied
lower level need can become reactivated and influence behavior when a higher-


level need cannot be satisfied. As a result, managers should provide opportunities
for workers to capitalize on the importance of higher-level needs.


A theory that states achievement, power, and affiliation are three important needs
that help explain motivation.
This theory recognizes that everyone prioritizes needs differently. McClelland
believes that individuals are not born with these needs, but that they are actually
learned through life experiences. McClelland associates each need with a distinct
set of work preferences, and managers can help tailor the environment to meet
these needs. He identifies three specific needs:

1. Need for Achievement (nACh) - The drive to excel, to achieve in relationship

to a set of standards, and to strive to succeed.

High achievers differentiate themselves from others by their desires to do things

better. These individuals are strongly motivated by job situations with personal
responsibility, feedback, and an intermediate degree of risk. In addition, high
achievers often exhibit the following behaviors:
 Seek personal responsibility for finding solutions to problems
 Want rapid feedback on their performance so that they can tell easily
whether they are improving or not
 Set moderately challenging goals and perform best when they perceive their
probability of success as 50-50

2. Need for Power (nPow) - The need to make others behave in a way in which
they would not have behaved otherwise.

An individual with a high need of power is likely to follow a path of continued

promotion over time. Individuals with a high need of power often demonstrate the
following behaviors:
 Enjoy being in charge
 Want to influence others
 Prefer to be placed into competitive and status-oriented situations
 Tend to be more concerned with prestige and gaining influence over others
than with effective performance

3. Need for Affiliation (nAff) - The desire for friendly and close interpersonal

People with the need for affiliation seek companionship, social approval, and
satisfying interpersonal relationships. People needing affiliation display the
following behaviors:
 Take a special interest in work that provides companionship and social
 Strive for friendship
 Prefer cooperative situations rather than competitiveness
 Desire relationships involving a high degree of mutual understanding
 May not make the best managers because their desire for social approval
and friendship may complicate managerial decision making

B. PROCESS THEORIES - examine individual behavior in terms of job satisfaction

related to perceived rewards (or lack of rewards) that instigate behavior. these
emphasize the decision-making dimension to work performance.

A theory of motivation that is concerned with the beneficial effects of intrinsic
motivation and the harmful effects of extrinsic motivation.


 This theory proposes that people prefer to feel they have control over their
actions, so anything that makes a previously enjoyed task feel more like an
obligation than a freely chosen activity will undermine motivation.


A version of self-determination theory which holds that allocating extrinsic rewards
for behavior that had been previously intrinsically rewarding tends to decrease the
overall level of motivation if the rewards are seen as controlling.
 This theory hypothesizes that extrinsic rewards will reduce intrinsic interest
in a task. When people are paid for work, it feels less like something they
want to do and more like something they have to do.
 Self-determination theory also proposes that in addition to being driven by
a need for autonomy, people seek ways to achieve competence and
positive connections to others.
 When organizations use extrinsic rewards as payoffs for superior
performance, employees feel they are doing a good job less because of
their own intrinsic desire to excel than because that’s what the organization
wants. Eliminating extrinsic rewards can also shift an individual’s perception
of why she works on a task from an external to an internal explanation.


Based on E.L. Thorndike’s law of effect, looks at the relationship between behavior
and its consequences. This theory focuses on modifying an employee’s on-the-job
behavior through the appropriate use of one of the following four techniques:
a. Positive Reinforcement rewards desirable behavior. Pay raise or
promotion is provided as reward for positive behavior with the intention of
increasing the probability that the desired behavior will be repeated.
b. Avoidance is an attempt to show an employee what the consequences of
improper behavior will be. If an employee does not engage in improper
behavior, he or she will not experience the consequences.
c. Extinction is basically ignoring the behavior of a subordinate and not
providing either positive or negative reinforcement. This technique should
only be used when the supervisor perceives the behavior as temporary, not
typical, and not serious.
d. Punishment (threats, docking pay, suspension) is an attempt to decrease
the likelihood of a behavior recurring by applying negative consequences.

Reinforcement Theory’s Implications for Management

 Learning what is acceptable to the organization influences motivated
 Managers who are trying to motivate their employees should be sure to tell
what they are doing wrong and be careful not to reward all employees at
the same time
 Managers must tell to the employees what they can do to receive positive
 Managers must be sure to administer the reinforcement as closely as
possible to the occurrence of the behavior
 Managers must recognize that failure to reward can also modify behavior.
Employees who believe that they deserve a reward and do not receive it will
often become disenchanted with both their manager and company.


Theory that says that behavior is a function of its consequences.
 Reinforcement theory ignores the inner state of the individual and
concentrates solely on what happens when he or she takes some action.
 B. F. Skinner argued that creating pleasing consequences to follow specific
forms of behavior would increase the frequency of that behavior.
 He demonstrated that people will most likely engage in desired behaviors
if they are positively reinforced for doing so; that rewards are most effective


if they immediately follow the desired response; and that behavior that is
not rewarded, or is punished, is less likely to be repeated.

The components of motivated behavior according to B.F. Skinner are:

 Stimulus. The environment setting in which behavior occurs (performance)
 Response. The behavior level itself.
 Reinforcement. The reward given for good performance only.


Theory that says that specific and difficult goals, with feedback, lead to higher
 Goal setting refers to the process of improving performance with objectives,
deadlines or quality standard. When individuals or groups are assigned
specific goals, a clear direction is provided and which later motivates them
to achieve those goals.

How Goals Motivate and Facilitate Performance?

The goal setting model consists of the following components:

a. Goal Content. To be sufficient in content, goals must be challenging,
attainable, specific and measurable, time-limited and relevant.
b. Goal Commitment. When individual or groups are committed to the
goals they supposed to achieve, there is a chance that they will be
able to achieve them.
c. Work Behavior. Goals influence behavior in terms of direction,
effort, persistence, and planning. When an individual is provided with
direction, performance is facilitated. In trying to attain goals that are
already indicated, the individual is provided a reason to persist in his
efforts until the goal is attained. Once goals are set, the first important
input to planning is already in place.
d. Feedback Aspects. Feedbacks provide the individuals with a way
of knowing how far they have gone in achieving objectives. Feedback
also facilitate the introduction of corrective measures whenever

 Edwin Locke proposed that intentions to work toward a goal are a major
source of work motivation. That is, goals tell an employee what needs to be
done and how much effort is needed. Evidence strongly suggests that
specific goals increase performance; that difficult goals, when accepted,
result in higher performance than do easy goals; and that feedback leads
to higher performance than does non-feedback.

Factors that influence the goals-performance relationship are:

 goal specificity – the degree of goal an individual wants to achieve.
 goal difficulty – the amount of effort required to achieve the goal.
 goal intensity – the process of determining how to achieve the goal.
 goal commitment – the amount of effort used to achieve the goal.


Management by Objectives (MBO). A program that encompasses specific goals,
participatively set, for an explicit time period, with feedback on goal progress.
 corporate goals are broken down into smaller, more specific goals at each
level of organization
 goals must be: tangible, verifiable and measurable


Self-efficacy (also known as social cognitive theory or social learning theory) refers
to an individual’s belief that he or she is capable of performing a task.
 The higher your self-efficacy, the more confidence you have in your ability
to succeed. So, in difficult situations, people with low self-efficacy are more
likely to lessen their effort or give up altogether, while those with high self-
efficacy will try harder to master the challenge.
 Self-efficacy can create a positive spiral in which those with high efficacy
become more engaged in their tasks and then, in turn, increase
performance, which increases efficacy further. Changes in self-efficacy over
time are related to changes in creative performance as well.
 Individuals high in self-efficacy also seem to respond to negative feedback
with increased effort and motivation, while those low in self-efficacy are
likely to lessen their effort after negative feedback.

Four ways self-efficacy can be increased according to Bandura are:

1. Enactive mastery. Gaining relevant experience with the task or job. If
you’ve been able to do the job successfully in the past, you’re more
confident you’ll be able to do it in the future.
2. Vicarious modeling. Becoming more confident because you see someone
else doing the task. It is most effective when you see yourself as similar to
the person you are observing.
3. Verbal persuasion. Becoming more confident because someone
convinces you that you have the skills necessary to be successful.
Motivational speakers use this tactic.
4. Arousal. It leads to an energized state, so the person gets “psyched up”
and performs better. But if the task requires a steady, lower-key perspective
(say, carefully editing a manuscript), arousal may in fact hurt performance.

Implications of Self-Efficacy Theory

Training programs often make use of enactive mastery by having people practice and
build their skills. In fact, one reason training works is that it increases self-efficacy.
Individuals with higher levels of self-efficacy also appear to reap more benefits from
training programs and are more likely to use their training on the job.

The best way for a manager to use verbal persuasion is through the Pygmalion effect or
the Galatea effect. The Pygmalion effect is a form of self-fulfilling prophecy in which
believing something can make it true. This strategy has been used in the workplace.
Sailors who were told convincingly that they would not get seasick were in fact much less
likely to do so. Intelligence and personality are absent from Bandura’s list, but they can
increase self-efficacy. People who are intelligent, conscientiousness, and emotionally
stable are so much more likely to have high self-efficacy that some researchers argue
self-efficacy is less important than prior research would suggest. They believe it is partially
a by-product in a smart person with a confident personality. Although Bandura strongly
disagrees with this conclusion, more research is needed.


 Goal-setting theory and self-efficacy theory don’t compete; they complement
each other. Employees whose manager sets difficult goals for them will have a
higher level of self-efficacy and set higher goals for their own performance.
Why? Setting difficult goals for people communicates your confidence in them.
Imagine you learn your boss sets a higher goal for you than for your co-workers.
How would you interpret this? As long as you didn’t feel you were being picked
on, you would probably think, “Well, I guess my boss thinks I’m capable of
performing better than others.” This sets in motion a psychological process in
which you’re more confident in yourself (higher self-efficacy) and you set higher
personal goals, performing better both inside and outside the workplace.


A theory that says that the strength of a tendency to act in a certain way depends
on the strength of an expectation that the act will be followed by a given outcome
and on the attractiveness of that outcome to the individual.
 In more practical terms, employees will be motivated to exert a high level of
effort when they believe it will lead to a good performance appraisal; that a
good appraisal will lead to organizational rewards such as bonuses, salary
increases, or promotions; and that the rewards will satisfy the employees’
personal goals. the theory, therefore, focuses on three relationships.
1. effort–performance relationship. the probability perceived by the
individual that exerting a given amount of effort will lead to performance.
2. performance–reward relationship. the degree to which the individual
believes performing at a particular level will lead to the attainment of a
desired outcome.
3. rewards–personal goals relationship. the degree to which
organizational rewards satisfy an individual’s personal goals or needs
and the attractiveness of those potential rewards for the individual.
Expectancy theory helps explain why a lot of workers aren’t motivated on their jobs
and do only the minimum necessary to get by. Let’s frame the theory’s three
relationships as questions employees need to answer in the affirmative if their
motivation is to be maximized.

First, if I give a maximum effort, will it be recognized in my performance

appraisal? For many employees, the answer is “no.” Why? Their skill level may be
deficient, which means no matter how hard they try, they’re not likely to be high
performers. The organization’s performance appraisal system may be designed to
assess nonperformance factors such as loyalty, initiative, or courage, which means
more effort won’t necessarily result in a higher evaluation. Another possibility is that
employees, rightly or wrongly, perceive the boss doesn’t like them. As a result, they
expect a poor appraisal, regardless of effort. These examples suggest one possible
source of low motivation is employees’ belief that, no matter how hard they work, the
likelihood of getting a good performance appraisal is low.


Second, if I get a good performance appraisal, will it lead to organizational
rewards? Many organizations reward things besides performance. When pay is
based on factors such as having seniority, being cooperative, or “kissing up” to the
boss, employees are likely to see the performance–reward relationship as weak and

Finally, if I’m rewarded, are the rewards attractive to me? The employee works
hard in the hope of getting a promotion but gets a pay raise instead. Or the employee
wants a more interesting and challenging job but receives only a few words of praise.
Unfortunately, many managers are limited in the rewards they can distribute, which
makes it difficult to tailor rewards to individual employee needs. Some incorrectly
assume all employees want the same thing, thus overlooking the motivational effects
of differentiating rewards. In either case, employee motivation is sub maximized.


A theory that says that individuals compare their job inputs and outcomes with
those of others and then respond to eliminate any inequities.
 Employees perceive what they get from a job situation (salary levels, raises,
recognition) in relationship to what they put into it (effort, experience,
education, competence), and then they compare their outcome–input ratio
with that of relevant others. If we perceive our ratio to be equal to that of the
relevant others with whom we compare ourselves, a state of equity exists;
we perceive that our situation is fair and justice prevails. When we see the
ratio as unequal and we feel underrewarded, we experience equity tension
that creates anger. When we see ourselves as overrewarded, tension
creates guilt. J. Stacy Adams proposed that this negative state of tension
provides the motivation to do something to correct it.
 The referent an employee selects adds to the complexity of equity theory.
There are four referent comparisons:
1. Self–inside. An employee’s experiences in a different position inside
the employee’s current organization.
2. Self–outside. An employee’s experiences in a situation or position
outside the employee’s current organization.
3. Other–inside. Another individual or group of individuals inside the
employee’s organization.
4. Other–outside. Another individual or group of individuals outside the
employee’s organization.
Based on equity theory, employees who perceive inequity will make one of six
1. Change inputs (exert less effort if underpaid or more if overpaid).
2. Change outcomes (individuals paid on a piece-rate basis can increase their pay
by producing a higher quantity of units of lower quality).
3. Distort perceptions of self (“I used to think I worked at a moderate pace, but now I
realize I work a lot harder than everyone else.”).
4. Distort perceptions of others (“Mike’s job isn’t as desirable as I thought.”).
5. Choose a different referent (“I may not make as much as my brother-in-law, but
I’m doing a lot better than my Dad did when he was my age.”).
6. Leave the field (quit the job).


This theory states that the inducements provided by the organization must be kept
in equilibrium with the contributions made by the employees.
 Equal wages must be paid for equal work
 If inducements (wages and benefits) are not kept in balance with
contributions of the workers, then their motivation will be affected.
 This theory deals with sustaining motivation rather than increasing it
 Individual evaluates not only his personal position but that of others as well.
People are motivated not only by what they get but also by what they see
or believe others are getting. They make a social comparison of inputs
(education, efforts, time spent, etc.) and rewards (money, work conditions,
recognitions, etc.) for themselves and others in the organization.



Douglas McGregor proposed two distinct views of human beings: one basically
negative, labeled Theory X (the assumption that employees dislike work, are lazy,
dislike responsibility, and must be coerced to perform), and the other basically
positive, labeled Theory Y (the assumption that employees like work, are creative,
seek responsibility, and can exercise self-direction).
 After studying managers’ dealings with employees, McGregor concluded
that their views of the nature of human beings are based on certain
assumptions that mold their behavior.
 Under Theory X, managers believe employees inherently dislike work and
must therefore be directed or even coerced into performing it. Under
Theory Y, in contrast, managers assume employees can view work as
being as natural as rest or play, and therefore the average person can learn
to accept, and even seek, responsibility.
 To understand more fully, think in terms of Maslow’s hierarchy. Theory Y
assumes higher-order needs dominate individuals. McGregor himself
believed Theory Y assumptions were more valid than Theory X. Therefore,
he proposed such ideas as participative decision making, responsible
and challenging jobs, and good group relations to maximize an
employee’s job motivation.
Unfortunately, no evidence confirms that either set of assumptions is valid or that
acting on Theory Y assumptions will lead to more motivated workers.


A theory that centers on the mature worker. It contrasts the management practices
found in traditional organizations with the needs and capabilities of the mature
adult personality.
 For example, the concept of work specialization is supposed to make
people work more efficiently because the tasks are very defined. Argyris
believes that the concept may actually be counterproductive because it will
limit an employee from reaching self-actualization.
 He believes that if managers treat their employees in a positive manner-
as responsible adult – their employees will be more productive.
 He believes that mature workers want additional responsibilities, a variety
of tasks, and the ability to participate in decisions. If not, he believes that
the result will be employee abseentism, apathy, and even alienation.
1. As a future executive, what is the appropriate motivation technique?
2. Discuss how important a motivated person is in accomplishing work.
10.4 Leadership
Leading people is different from managing them. Leading is establishing direction and
influencing others to follow that direction. The distinction between leading and managing
is important. The word leader is often used interchangeably with the word manager to
describe those individuals in an organization who have positions of formal authority,
regardless of how they actually act in those jobs. But just because a manager is supposed
to be a formal leader in an organization doesn’t mean that he exercises leadership.

Harvard’s John Kotter says that management is about coping with complexity, and
leadership is about coping with change. He also states that leadership is an important
part of management, but only a part; management also requires planning, organizing,
staffing, and controlling. Management produces a degree of predictability and order.
Leadership produces change. Kotter believes that most organizations are underled and
overmanaged. He sees both strong leadership and strong management as necessary for
optimal organizational effectiveness.
We need leaders today to challenge the status quo, create visions of the future, and
inspire organizational members to want to achieve the visions. We also need managers
to formulate detailed plans, create efficient organizational structures, and oversee day-
to-day operations.

Leadership Defined
The ability to influence a group toward the achievement of a vision or set of goals.

Traits of an Effective Leader

1. Personal Drive. Persons with drive are those identified as willing to accept
responsibility, possess vigor, initiative, persistence, and health. Drive is a very
important leadership trait because of the possibility of failure in every attempt to
achieve certain goals. If the chosen way to reach a goal is not successful, a leader
finds another way to reach it, even if it is preceded by a succession of failed attempts.
This will require a high level of personal drive from the leaders.
2. Desire to Lead. There are persons who appear to have all the qualifications for
leadership, yet they cannot become leaders because they lack one special
requirement-the desire to lead. Indeed, how may one lead others when he does not
have that desire? Persons who do not have the desire to lead but are forced to act as
leaders will not be effective because their efforts will be half-hearted. Leaders with
desire to lead will always have a reservoir of extra efforts, which can be useful
especially during critical moments.
3. Personal Integrity. Integrity includes honesty, honor, incorruptibility, rectitude,
righteousness, uprightness, and other similar virtues. Integrity is an important
leadership trait because a person who possesses it is well-regarded by others. On the
other hand, one who does not have personal integrity will have a hard time convincing
his subordinates about the necessity of competing various tasks. When this happens,
a leader may resort to using his authority to get things done, invoking coercive power
vested in him by virtue of his rank and position in the hierarchy. This practice cannot
be maintained for a long period without exacting a high emotional and economic toll
on the organization.
4. Self-confidence. The activities of leaders require moves that will produce the needed
outputs. For the moves to be continuous and precise, self-confidence is necessary in
leadership functions such as conceptualizing, organizing, and implementing activities.
subordinates and even peers are known to follow someone who displays an air of self-
confidence. The benefits derived from this leadership trait become even more evident
during crisis situation.
5. Flexibility. People differ in the way they do their work. One will adapt a method
different from another person’s method. A leader, who allows this situation as long as
the required outputs are produced, is said to be flexible. There is wisdom in being
flexible. It allows the use of other means of achieving goals when the prescribed
manner is not appropriate.
6. Creativity. This term refers to the ability of the manager to find new and better ways
of accomplishing his work. This trait allows him to see relationships among existing
data, which can lead him to devise new solutions to problems. As problems are
becoming more complex and challenging, the leader will need all the creative abilities
he has.
7. Charisma. When a person has sufficient personal magnetism that motivates people
to follow his directives, this person is said to have charisma. Great personalities in
history are believed to have charisma. This trait was said to be greatly responsible for
whatever accomplishments they achieved. When used properly, charisma will help
the leader in achieving his goals. With some adjustments, subordinates may be
expected to do their tasks willingly.
8. Knowledge of the company, industry and technology. A leader who is well-
informed about his company, the industry where the company belongs, and the
technology utilized by the industry, will be in a better position to provide directions to
his unit.
9. Analytical Ability. Leaders are oftentimes faced with difficulties that prevent the
completion of assigned tasks. A subordinate, for instance, may have a record of
continuously failing to produce the needed outputs. A leader with sufficient skill to
determine the root cause of the problem may be able to help the subordinate to
improve his production. The ability to analyze is one desirable trait that a leader can
use to tide him over many challenging aspects of leadership.



Theories proposing that specific behaviors differentiate leaders from non-leaders.

a. According to ways leaders approach people to motivate them. In motivating

people, leaders use a positive or negative approach. Sometimes, leaders
alternately use positive and negative leadership depending on the characteristic of
the individual subordinates.
i. Positive Leadership. When the leader’s approach emphasizes rewards. The
reward may be economic, like an increase in monthly salary, or it may be
noneconomic like membership in an advisory committee.
ii. Negative Leadership. When the leader emphasizes punishment. The
punishment may take the form of reprimand, suspension, or dismissal.

b. According to the way the leader uses power. Leadership styles also vary
according to how power is used.
i. Autocratic Leadership. Leaders who make decisions without consulting
subordinates. Motivation takes the form of threats, punishment, and
intimidation of all kinds. The autocratic style is effective in emergencies and
when absolute followership is needed. The disadvantage is that the leader
receives little, in any, information, ideas, and suggestions from his subordinates
as inputs into his decision making.
ii. Participative Leadership. When a leader openly invites his subordinates to
participate or share in decision making, policy-making, and operation methods.
The advantage is that it generates a lot of good ideas, an increase in support
for decisions made and the reduction of the chance that they will be
unexpectedly undermined. The disadvantage is that it is time-consuming and
frustrating to people who prefer to see a quick decision made.
iii. Free-rein Leadership. Leaders who set objective and allow employees or
subordinates’ relative freedom to do whatever it takes to accomplish those
objectives. They are also referred to as laissez faire leaders. This is most
applicable to certain organizations manned by professionals like doctors and
If free-rein leadership fits the situation, there is a full managerial delegation
resulting in optimum utilization of time and resources. This happens because
many people are motivated to full effort only if allowed to work under the free-
rein leadership style. The weakness of free-rein leadership is that there is a
very little managerial control and a higher degree of risk. If the leader does not
know well the competence and integrity of his people, as well as their ability to
handle this kind of freedom, the result could be disastrous.

c. According to the leader’s orientation towards tasks and people. Leadership

may be classified according to how leaders view tasks and people.
i. Employee Orientation. When a leader considers employees as human beings
of intrinsic importance and with individuals and personal needs to satisfy.
ii. Task Orientation. When a leader places stress on production and the technical
aspects of the job and the employees are viewed as the means of getting the
work done.


Refers to that effort to determine through research which managerial practices and
techniques are appropriate in specific situations.


The theory that effective groups depend on a proper match between a leader’s
style of interacting with subordinates and the degree to which the situation gives
control and influence to the leader.

Dimensions that dictate a leader’s situational control are:

1. leader-member relations - the degree of confidence, trust, and respect
members have in their leader.
2. task structure - the degree to which the job assignments are procedurized
(that is, structured or unstructured).
3. position power - the degree of influence a leader has over power variables
such as hiring, firing, discipline, promotions, and salary increases.
The situational characteristics very from organization to organization. To be
effective, the situation must fit the leader. If this is not so, any of the following may
be tried:
1. change the leader’s traits or behavior
2. select leaders who have traits or behavior fitting the situation
3. move leaders around in the organization until they are in positions that fit them
4. change the situation


A contingency theory that focuses on followers’ readiness.
 It says successful leadership depends on selecting the right leadership style
contingent on the followers’ readiness, or the extent to which they are willing
and able to accomplish a specific task. A leader should choose one of
four behaviors depending on follower readiness.
1. If followers are unable and unwilling to do a task, the leader needs to
give clear and specific directions; (directing)
2. If they are unable and willing, the leader needs to display high task
orientation to compensate for followers’ lack of ability and high
relationship orientation to get them to “buy into” the leader’s desires.
3. If followers are able and unwilling, the leader needs to use a supportive
and participative style; (supporting)
4. If they are both able and willing, the leader doesn’t need to do much.


A theory that states that it is the leader’s job to assist followers in attaining their
goals and to provide the necessary direction and/or support to ensure that their
goals are compatible with the overall objectives of the group or organization.
By using the path-goal model, it is assumed that effective leaders can
enhance subordinate motivation by:
1. Clarifying the subordinate’s perception of work goals
2. Linking meaningful rewards with goal attainment
3. Explaining how goals and desired rewards can be achieved

The Path-Goal Process


The leadership styles, which may be used by path-goal proponents, are as
1. directive leadership – when the leader focuses on clear task assignments,
standards of successful performance, and work schedules
2. supportive leadership – when subordinates are treated as equals in a friendly
manner while striving to improve their well-being
3. participative leadership – when the leader consults with subordinates to seek
their suggestions and then seriously consider those suggestions when making
4. achievement-oriented leadership – when the leader sets challenging goals,
emphasizes excellence, and seeks continuous improvement while maintaining
a high degree of confidence that subordinates will meet challenges in a
responsible manner


Vroom’s model of leadership is one that prescribes the proper leadership style for
various situations, focusing on the appropriate degrees of delegation of decision
making authority.
Five distinct decision making styles are identified under the Vroom model. Two of
them are autocratic, two others are consultative, and one is group-directed.

10.5 Management Filipino Styles by Ernest A. Franco

1. Manager by Ugnayan. A manager that is gifted reconciler of all philosophies and
beliefs held by the various types of managers. Participatory and coordinative, he
integrates various styles depending on the companies’ needs and conditions. The
hybrid of Oido, Libro, Kayod and Lusot.
2. Manager by Oido. A manager skill that is acquired through playing it by ear. Oido
means “to listen”. The manager depends on practical experience to compensate for
his lack of normal management education.
3. Manager by Libro. A manager that literally goes by the book. Scientific, thorough and
analytical, he generally has adequately formal training by management.
4. Manager by Lusot. A manager that benefits on a loophole. He will always find
loopholes to avoid hardwork or utilize an excuse for failure, uses shortcuts,
unconventional or even illegal means to attain objectives.
5. Manager by Kayod. A hardworking, action-hungry, and committed manager to his

11. The Concept of Controlling

Every manager in every organization today faces the dilemma of finding ways to administer and
coordinate various processes-to control the activities under his jurisdiction. Managers continually
look for ways to improve customer satisfaction, maintain relationships with suppliers, cut
inventory costs, and develop the right products. As a result, every organization needs basic
systems for allocating financial resources, developing human resources, analyzing financial
performance, and evaluating overall profitability. Controlling is the management function in which
managers establish and communicate performance standards for people, processes and


A managerial function that ascertains whether organizational objectives have been
achieved; if not, to determine why not; and determining what activities should be taken to
achieve objectives better in the future. Controlling completes the cycle of management
functions. Objectives and goals at any given point in the organizing and implementing
stage are verified as to achievement or completion. When expectations are not met at
scheduled dates, corrective measures are usually undertaken.

The six major purposes of controls are as follows:

✓ Controls make plans effective. Managers need to measure progress, offer
feedback, and direct their teams if they want to succeed.
✓ Controls make sure that organizational activities are consistent. Policies and
procedures help ensure that efforts are integrated.
✓ Controls make organizations effective. Organizations need controls in place if
they want to achieve and accomplish their objectives.
✓ Controls make organizations efficient. Efficiency probably depends more on
controls than any other management function.
✓ Controls provide feedback on project status. Not only do they measure
progress, but controls also provide feedback to participants as well. Feedback
influences behavior and is an essential ingredient in the control process.
✓ Controls aid in decision making. The ultimate purpose of controls is to help
managers make better decisions. Controls make managers aware of problems and
give them information that is necessary for decision making.


Steps in the Control Process

1. Establishing Performance Objectives and Standards. For effective controlling,

what has to be achieved must first be determined. Examples of objectives and
standards are sales target, production target, worker attendance, safety records,
supplies used.
Once objectives and standards are established, the measurement of performance will
be facilitated. Standards differ among various organizations. After the performance
objectives and standards are established, the methods for measuring performance
must be designed. Every standard established must be provided with its own method
of measurement.
2. Measuring Actual Performance. There is a need to measure actual performance so
that when shortcomings occur, adjustments could be made. The adjustments will
depend on the actual findings.
The measuring tools will differ from organization to organization, as each have its own
unique objectives. Some firms, for instance, will use annual growth rate as standard
basis, while other firms will use some other tools like the market share approach and
position in the industry.
3. Comparing Actual Performance to Objectives and Standards. Once actual
performance has been determined, this will be compared with what the organization
seeks to achieve. Actual production output, for instance, will be compared with the
target output.


4. Taking Necessary Action. The purpose of comparing actual performance with the
desired result is to provide management with the opportunity to take corrective action
when necessary.


Control can focus on events before, during or after a process. The following are the three
distinct types of controls:
1. Feedforward Control. Sometimes called preliminary or preventive controls, attempts
to identify and prevent deviations in the standards before they occur. It focuses on
human, material and financial resources within an organization.
2. Concurrent Controls. Monitors ongoing employee activity to ensure consistency with
quality standards. These controls rely on performance standards, rules, and
regulations for guiding employees’ tasks and behaviors. Its purpose is to ensure that
work activities produce the desired results.
3. Feedback Controls. Involves reviewing information to determine whether
performance meets established standards. It is used when information is gathered on
a completed activity for purposes of evaluating and deriving steps for improving the
activity. Corrective actions aimed at improving future activities are features of
feedback control. It also validates objectives and standards. If accomplishments
consist only of a percentage of standard requirements, the standard may be too high
or inappropriate.


To effectively control activities, organizations adapt control systems consisting of the
following components:
1. Strategic Plan. Provides the basic control mechanism for the organization. When there
are indications that activities undertaken do not facilitate the accomplishments of
strategic goals, these activities are set aside, modified or expanded. These corrective
measures are made possible with the adoption of strategic plans.
2. Long-Range Financial Plan. The direction for financial activities. If the goal does not
appear to be where the firm is headed, the control mechanism should be made to work.
3. The Operating Budget. This indicates the expenditures, revenues, or profits planned
for some future period regarding operations. The figures appearing in the budget are
used as standard requirements for performance.
4. Performance Appraisal. This measures employee performance. As such, it provides
employees with a guide on how they could do their jobs better in the future.
Performance appraisals also function as effective checks on new policies and
5. Statistical Reports. These are those that contain data on various developments within
the firm. Among the information which may be found in a statistical report are the
following: labor efficiency rates, quality control rejects, accounts receivable, accounts
payable, sales reports, accident reports, and power consumption reports.
6. Policies and Procedures. Policies refer to the framework within which the objectives
of the organization must be pursued. Procedure is a plan that describes the exact
series of action or steps to be taken in a given situation. It is expected that policies and
procedures laid down by management are followed. When they are breached once in
a while, management must have some means to directly inquire on the deviations.
Occasional breaches notwithstanding, policies and procedures provide a good way of
controlling activities.


The management of any organization must develop a control system tailored to its goals
and resources. Effective control systems share several common characteristics. These
are follows:
✓ A focus on critical points. For example, controls are applied where failure cannot be
tolerated or where costs cannot exceed a certain amount. The critical points include all
the areas of an organization’s operations that directly affect the success of its key
✓ Integration into established processes. Controls must function harmoniously within
these processes and should not bottleneck operations.
✓ Acceptance by employees. Employee involvement in the design of controls can
increase acceptance.
✓ Availability of information when needed. Deadlines, time needed to complete the
project, costs associated with the project, and priority needs are apparent in these
criteria. Costs are frequently attributed to time shortcomings or failures.
✓ Economic feasibility. Effective control systems answer questions such as, “How
much does it cost?” “What will it save?” or “What are the returns on the investment?”
in short, comparison of the costs to the benefits ensures that the benefits of controls
outweigh the costs.
✓ Accuracy. Effective control systems provide factual information that’s useful, reliable,
valid and consistent.
✓ Comprehensibility. Controls must be simple and easy to understand.



Control techniques that deals with setting up of quality standards. A process that
evaluates output relative to a standard and takes corrective action when output doesn’t
meet standards.
 Inspection - appraisal activity that compares goods or services to a standard.
 Statistical Process Control - Statistical evaluation of the output of a process.
 Control Charts - A statistical chart of time-ordered values of a sample statistic.
 Quality Tools - tools that an organization can use for problem solving and process
 Six Sigma - A business process for improving quality, reducing costs, and
increasing customer satisfaction.
 TQM (Total Quality Management) - A philosophy that involves everyone in an
organization in a continual effort to improve quality and achieve customer


Techniques to control production that aims to produce the right product in the proper
quantity and quality, at the right time, and by the best and least costly methods.
 Gantt Chart – graphical illustration of production scheduling and controlling the
work of various production department and machines.
 CPM (Critical Path Method) – deterministic model that uses only one time
estimate for controlling time and cost.
 PERT (Program Evaluation Review Technique) – probabilistic model that uses
three time estimates for planning and controlling time in an activity
 EDP (Electronic Data Processing) – computer and information systems used in
production scheduling and controlling
 TOYOTA PRODUCTION SYSTEM – a production system used by Toyota
 Muda: Waste and inefficiency. Perhaps the driving philosophy. Waste and
inefficiency can be minimized by using the following tactics.
 Kanban: A manual system used for controlling the movement of parts and
materials that responds to signals of the need (i.e., demand) for delivery of
parts or materials. This applies both to delivery to the factory and delivery
to each workstation. The result is the delivery of a steady stream of
containers of parts throughout the workday. Each container holds a small
supply of parts or materials. New containers are delivered to replace empty
 Heijunka: Variations in production volume lead to waste. The workload
must be leveled; volume and variety must be averaged to achieve a steady
flow of work.
 Kaizen: Continuous improvement of the system. There is always room for
improvement, so this effort must be ongoing.
 Jidoka: Quality at the source. A machine automatically stops when it
detects a bad part. A worker then stops the line. Also known as


Techniques used to minimize the cost in keeping inventory. Inventory management is a
core operations management activity. Good inventory management is often the mark of
a well-run organization. Inventory levels must be planned carefully in order to balance the
cost of holding inventory and the cost of providing reasonable levels of customer service.
Successful inventory management requires a system to keep track of inventory
transactions, accurate information about demand and lead times, realistic estimates of
certain inventory-related costs, and a priority system for classifying the items in inventory
and allocating control efforts.
 economic order quantity - the order size that minimizes total annual cost.
 economic production capacity – the production size that minimizes annual cost.
 quantity discounts - are price reductions for larger orders offered to customers
to induce them to buy in large quantities.
 reorder point ordering – when the quantity on hand of an item drops to this
amount, the item is reordered.

What type of controlling technique do you believe that you must know to ensure that you accomplish
your plans and objectives?

Submit an essay on 3 practical experiences applying the functions of POSDICON

12. Introduction to the Different Areas of Management

The entire spectrum of management of people that serves to maximize their performance
in order to meet the organization’s strategic objectives.
The process of overseeing, designing, controlling the process of production, and
redesigning business operations in the production of goods and services.
The management process responsible for identifying, anticipating, and satisfying
consumer requirements profitability.
The responsibility of the firm to ensure that it manages the procurement process and the
supply base effectively and efficiently. this includes buying high quality products and
services at the right price from the right, reliable source, based on the specifications, in
the right quality for delivery, at the right time to the right customers.
Also called corporate finance, it focuses on decisions relating to how much and what
types of assets to acquire, how to raise the capital needed to buy assets, and how to run
the firm so as to maximize its
The organized means of providing past, present and projected information on the
company’s internal operations and external intelligence for use in decision making. the
responsibility of the firm to provide necessary information and communication facilities to
all its business units.
It involves the design, implementation, evaluation, and maintenance of the process of
work within an organization, in order to maintain and improve efficiency and productivity.

Submit a journal on the learnings in Management 101/11 (Principles in Management) and how
MGT101/11 can help you in the future.