1. (1) Single Proprietor / Owner, one person holds the
entire operation as his / her personal property and
managing it on his / her own.
3 Options of an Organization
(2) Partnership, requires more than one person in the
decision-making process, it’s important that potential
business partners discuss a wide variety of issues up
front and develop legal partnership agreement.
3) Corporation, business owners opt to form
corporations to protect themselves against financial
and legal liabilities, so they may decide to look for
investors.
2. 3 OPTIONS OF AN ORGANIZATION
(1) Single Proprietor/Owner, one person
holds the entire operation as his/her
personal property and managing it on
his/her own.
Advantages: Disadvantages:
• Formation
• Tax benefits
• Decision
making
• Liability
• Taxes
• Lack of “Continuity”
• Difficulty in Raising
Capital
3. (2) Partnership, requires more than one person
in the decision-making process, it’s important
that potential business partners discuss a wide
variety of issues up front and develop legal
partnership agreement.
Advantages: Disadvantages:
• Easy & Inexpensive
• Shared Financial
Commitment
• Complementary Skills
• Partnership Incentives
for Employees
• Joint and Individual
Liability
• Disagreements among
partners
• Shared Profits
4. (3) Corporation- business owners opt to form
corporations to protect themselves against
financial and legal liabilities, so they may decide
to look for investors.
Advantages: Disadvantages:
• Separate legal
personality
• Ease of raising funds
• Ease of transfer
ownership
• Credibility
• More time and
money spent in
organizing
• More paperwork
• Higher Tax
• More costly
5. Nature and Role of the Firm
A. Human Resource Management
– this is the entire spectrum of management of people
that serves to maximize their performance in order to
meet the organization’s objectives.
B. Marketing Management
– this is the responsible for identifying, anticipating and
satisfying consumer requirements profitably.
C. Operations Management
– this involves overseeing, designing, controlling the process
of production and designing business operations in the
production of goods and services.
6. Manufacturing setting – designs the effective
and efficient production process, acquisition of
raw materials, numbers of trained workers and
proper maintenance of equipment.
Service-oriented setting – availability of trained
and costumer-oriented personnel, presence and
excellence provisions of customer services.
7. D. Financial Management
– the goal of any finance function is to ensure the set
up of effective and efficient internal process designed
to achieve business support service, lowest costs and
effective control of the environment while being
vision-oriented, growth focused, intuitive and risk
taking.
8. E. Material and Procure Management
– it has the responsibility to ensure that it
manages the procurement process and the supply
base effectively and efficiently.
F. Office Management
– involves design, implementation, evaluation and
maintenance of the process of work within an
organization in order to maintain and improve
efficiency and productivity.
G. Information and Communication Technology
Management
–includes related form of communication or application
that encompasses radio, television, cellular phones,
computer and network hardware and software, satellite
system, etc.
9. There are several variations of organizational
structures and there are three common types of it.
(1) Functional, a set up wherein each department of the
organization is grouped according to its function or
purpose.
CEO
Marketing
Department
Sales
Department
Production
Department
HR
Depatment
10. (2) Divisional, this is typically used in larger
companies or organizations with several branches
or outlets that operate in a wide geographic area
or that have separate smaller organizations within
the umbrella group to cover different types of
products or market areas.
R1 Company
Ilocos Norte
Division
Ilocos Sur
Division
La Union
Division
Pangasinan
Division
11. (3) Matrix, this is hybrid of the 2 structures: functional
and divisional.
Disadvantage: this can create power struggles because
most areas of the company will have a dual management.
