Introduction of Organization and Management and the importance of each function of business. The four function of management are planning, organizing leading, controlling. There are lots of philosophers that gives definition to management and organization that can lead to knowledge and learning.

1. ORGANIZATION AND
MANAGEMENT

2. INTRODUCTION
 Peter Drucker, the acknowledged inventor of modern
management, declared that there is only one valid definition of
business purpose: to create a customer (Drucker,1999). He
continued by saying that, “it is the customer who determines
what a business is. For it is the customer, and he alone, who
through being willing to pay for a good or service, converts
economic resources into wealth, things into goods.” What
Drucker wanted to emphasize was that it is not the business,
nor its owners or investors, who determine what is must
produce, it is the customers who determine, if not dictate,
what the business must offer to its environment.

3.  Gary Hamel argued that when compared with the
momentous changes we’ve witnessed over the past
half century in technology, lifestyles, and geopolitics,
the practice of management seems to have evolved at
a snail’s pace (Hamel, 2007). He stated that
“hierarchies may have gotten flatter, but they haven’t
disappeared. Frontline employees may be smarter and
better trained, but they’re still expected to line up
obediently behind executive decisions. Lower level
managers are still appointed by more senior managers.
Strategy still gets set at the top. And the big calls are
still made by people by big titles and even bigger
salaries.

4.  Managing a company is a complex activity, and
effective managers must possess many kinds of
skills, knowledge, and abilities (Jones and George,
2013). Managing is an unpredictable process.
Making the right decision is difficult; even effective
managers make mistakes, but the most effective
managers learn from their mistakes and continually
strive to find ways to increase their companies’
performance.

5. MEANING OF ORGANIZATION AND
MANAGEMENT
 When one thinks of a manager, different types of
organizations come to mind: profit oriented,
public or governmental, and non-profit or
charitable organizations. All of us are very
familiar with fast-food chain like Jollibee and
McDonalds, with government agencies like
Department of Education and the Philippine
National Police, and with NGOs like Gawad
Kalinga, or the Philippine Red Cross. All of these
organizations have managers or administrators
who see to it that their purpose or missions are
being accomplished.

6.  A formal organization, as Chester Barnard defines,
is a system of consciously coordinated activities or
forces of two or more persons. He theorized that
there are three elements of an organization: (a)
communication; (b) willingness to serve; and (c)
common purpose. These elements are necessary
and sufficient conditions initially, and they are
found in all organizations. The last element,
purpose, is implicit in the elements in general, and
their mutual dependence in specific cooperative
systems, are matters of experience and observation
(Barnard, 1968).

7.  Kast and Rosenzberg wrote that the concept of
organization implies structuring and integrating
activities, that is, people working or cooperating
together in interdependent relationships. The notion of
interrelatedness suggests a social system. Therefore,
as these authors clarified, organizations are (1) goal-
oriented, people with a purpose; (2) psychosocial
systems, people interacting in groups; (3) technological
systems, people using knowledge and techniques; and
(4) an integration of structured activities, people
working together in patterned relationships (Kast and
Rosenzweig, 1979).

8.  Managers are responsible for using the organization’s resources
to help achieve its goals. Management can be defined as a set
of activities (including planning and decision making,
organizing, leading, and controlling) directed at an
organization’s resources (human, financial, physical, and
information), with the aim of achieving organizational goals in
an efficient and effective manner. By efficient, we mean using
resources wisely, in a cost-effective way. By effective, we mean
making the right decisions and successfully implementing them
(Griffin, 2012). Jones and George define management as the
planning, organizing, leading, and controlling of human and
other resources to achieve organizational goals efficiency and
effectively. An organization’s resources include assets such as
people and their skills, know-how, and experience; machinery;
raw materials; computers and information technology; and
patents, financial capital, and loyal customers and employees
(Jones and George, 2013).

9. FUNCTIONS OF MANAGEMENT
The foregoing definitions of management indicate four interrelated functions of
management which will be described briefly in the next sections.
 Planning. This involves setting goals and deciding how best to achieve them.
Planning helps maintain managerial effectiveness by serving as a guide for
future activities. The organization’s goals and plans clearly help managers
know how to allocate time and resources (Griffin, 2012).
 Organizing. This focuses on allocation and arranging human and nonhuman
resources so that plans can be carried out successfully. Through the organizing
function, managers determine which tasks are to be done, how tasks can best
be combined into specific jobs, and how jobs can be grouped into various
units that make up the structure of the organization.
 Leading. This involves influencing others to engage in the work behaviours
necessary to reach organizational goals. Other writers refer to it as directing.
Leadership involves managers using their power, personality, influence,
persuasion, and communication skills to coordinate people and groups so their
activities are in harmony (Jones and George, 2013).
 Controlling. This regulates organizational activities so that actual
performance conforms with expected organizational standards and goals.

10. FUNCTIONS, ROLES AND SKILLS
 Jones and George (2013) stress that organizations normally have three levels
of management: first line managers, middle managers, and top managers.
Managers at each level exercise varying degrees of responsibility and
authority in performing the functions leading to organizational efficiency and
effectiveness.
 At the base of the managerial hierarchy are first-line managers, referred to
as supervisors, coordinators, and office managers. They are responsible for
daily supervision of non-managerial employees who perform the specific
activities necessary to produce goods and services.
 Supervising the first-line managers are middle managers, responsible for
finding the best way to organize human and other resources to achieve
organizational goals (Jones and George, 2013). They are probably the largest
group of managers in most organizations.
 In contrast to middle managers, top managers are responsible for the
performance of all departments (Jones and George, 2013). They establish
organizational goals, such as which goods and services the company should
produce; they decide how the different department use resources to achieve
goals (Gupta, 1988). One of the most important roles of top manager is to
create a context for change – meaning, forming a long-range vision or mission
for the company (Jonas, et. Al.,1990).

11. ROLES AND FUNCTIONS OF A MANAGER
 Henry Mintzberg, one contemporary management scholar,
conducted research on the actual tasks and activities that
typical managers of organizations perform on a day-to-day
basis. His series of studies vividly described in great detail
how a typical manager spends his working day, starting
from the first hour in the morning, up to the last minute
before leaving the office. Mintzberg argued that contrary
to traditional thinking that manager are engaged in
planning, organizing, leading, and controlling, such
managers are actually exercising three major categories
of roles, namely informational, interpersonal, and
decisional roles. These are subdivided into ten specific
roles of a manager.

12. Roles of Manager
Category Role Activity
A.Informational
1. Monitor
1. Disseminator
1. Spokesperson
Seek and receive information, scan periodicals
and reports, maintain personal; contacts.
Forward information to other organization
members, send memos and reports, make
phone calls.
Transit information to outsiders through
speeches, reports, memos.
A.Interpersonal
1. Figurehead
1. Leader
1. Liaison
Perform ceremonial and symbolic duties such as
greeting visitors, signing legal documents.
Direct and motivate subordinates; train,
counsel, and communicate with subordinates.
Maintain information links both inside and
outside organization; use e-mails, phone calls,
meetings.
A.Decisional
1. Entrepreneur
1. Disturbance handler
1. Resource allocator
1. Negotiator
Initiate improvement projects; identify new
ideas, delegate responsibility to others.
Take corrective action during disputes or crises;
resolve conflicts among subordinates; adapt to
environmental crises.
Decide who gets resources; schedule, budget,
set priorities.
Represent department during negotiation of
union contracts, sales, purchases, budgets;
represent departmental interests.

13. SKILLS OF A MANAGER
 Conceptual Skills
Conceptual skills is the cognitive ability to see the organization as a
whole and the relationship between its parts. This skill is needed by all
managers, but most especially by those at the top – which means that top
managers must possess this skill much more than what will be required of
middle and lower level managers.
 Human Skills
Human skill is the manager’s ability to work with and through other
people and to work effectively as a group member (Samson and Draft, 2015).
Other writers and scholars refer to this as people skill in the sense that this
is very crucial in dealing with all members of the organization, at whatever
level.
 Technical Skills
Technical skill involves the specialized procedures, techniques, and
knowledge to get the job done. This skill is most important for team leaders
and lower level managers because they supervise the workers who produce
products or serve customer.

14. . Google’s Rules: Eight Good Behaviors
For Managers
 1.Be a good coach.
 2.Empower your team and don’t micromanage.
 3.Express interest in a team member’s success and
personal well-being.
 4.Don’t be a sissy. Be productive and results-oriented.
 5.Be a good communicator and listen to your team.
 6.Help your employees with career development.
 7.Have a clear vision and strategy for the team.
 8.Have a key technical skills so you can help advise the
team.

15. EVOLUTION OF MANAGEMENT THEORIES
 The field of management, as we know it today, is the product of the work of
notable scholars and practitioners who, as the middle part of the nineteenth
century, proposed what we now refer to as “perspective” or “theories”.
These theories draw their ideas and inputs from managerial practices during
the earlier periods and they explained the relationship among work
dimensions or “variables” such as efficiency or productivity, work methods,
time, motion, motivation, incentives, and human needs.
 Pre-classical Contributors
A number of individuals in the pre-classical period of the middle and late
1800s offered ideas that laid the groundwork for subsequent, broader inquiries
into the nature of management. These include Robert Owen, Charles Babbage,
and Henry R. Towne (Bartol and Martin, 2010).

16. Contributor Pioneering Ideas
Robert
Owen
Advocate concern for the working and living
conditions of workers.
Charles
Babbage
Built the first practical mechanical calculator
and a prototype of modern computers;
predicted the specialization of mental work;
suggested profit sharing.
Henry R.
Towne
Outline the importance of management as a
science and called for the development of
management principles.

17.  The Classical Management Perspective
The foundation of modern organization
theory were laid down by the classical
theorists who described and explained
management based on the conditions
prevalent in organizations at that time, as
well as on the manner in which supervisors
relate to their subordinates.

18. A. Scientific Management. This is an approach within the classical
management perspective that emphasizes the scientific study of work methods
in order to improve worker efficiency. Major Representatives of this approach
include Frederick W. Taylor, Frank and Lilian Gilbreth, and Henry Gantt.
B. Bureaucratic Management. This is an approach that emphasizes the need for
organizations to operate in a rational manner rather than relying on the arbitrary
whims of owners and managers. This is based mainly on the work of German
sociologist, Max Weber.
Max Weber outlined his famous principles of bureaucracy, a formal system of
organization and administration designed to ensure efficiency and effectiveness.
C. Administrative Management. This is an approach that focuses on principles
that can be used by managers to coordinate the internal activities of
organizations. Major contributors include Henri Fayol and Chester Barnard, both
of whom were executive of large enterprise (Bartol and Martin).

19. 14 general principles of management
Principle Description
Division of work Work specialization can result in efficiencies and is applicable to both managerial and
technical functions.
Authority It is the right to give orders and the power to exact obedience.
Discipline This is absolutely necessary for the smooth functioning of an organization.
Unity of command An employee should receive orders from one superior only.
Unity of direction Activities aimed at the same objective should be organized so that there is one plan and
one person in charge.
Subordination of individual
interest to general interest
The interest of one employee or group should not prevail over the interests and goals of
the organization.
Remuneration Compensation should be fair to both the employee and the employer.
Centralization The concentration of authority is at one person at the top.
Scalar chain A scalar (or hierarchical) chain of authority extends from the top to the bottom of an
organization.
Order A place for everything and everything in its place.
Equity Employees should be treated with kindness, fairness and justice.
Stability of personnel tenure Because it takes time to become effective in new jobs, high turnover should be
prevented.
Initiative Managers should encourage and develop subordinate initiative to the fullest.
Esprit de corps A strong sense of morale and unity among the workers is necessary for coordinative
efforts.

20. THE BEHAVIORAL MANAGEMENT PERSPECTIVE
 Early Behaviorists
 Two early behaviorists, psychologists Hugo Munsterberg and political
scientist Mary Parker Follet, contributed pioneering ideas that helped
make the behavioral perspective a major viewpoint.
 Munsterberg published an important book, psychology and Industrial
Efficiency in 1913. The book explained that psychologists could help
industry in three major ways. They could study jobs and find ways of
identifying the individuals who are best suited to particular jobs.
 Mary Parker Follet attributed much greater significance to the
functioning of groups in organizations that proponent of the classical
view of management. She argued that members of organizations are
continually influenced by the groups within which they operated.

21. Mary Parker Follet attributed much greater significance to the
functioning of groups in organizations that proponent of the classical
view of management. She argued that members of organizations are
continually influenced by the groups within which they operated.
 The Hawthorne Studies (Ivancevich and Matteson, 2002).
 The research team concluded that something more than pay incentives was improving worker output within the work groups. They
conducted additional studies on the impact of rest pauses, shorter working days, incentives, and type of supervision on output. They also
uncovered what is referred to as the “Hawthorne Effect” operating within the study groups. The Hawthorne studies are perhaps the most-
cited research in the applied complex science area.
 The Human Relations Movement
 Bartol and Martin assert that the key to productivity from a managerial point of view appeared to lie in showing greater concern for
workers so that they would feel more satisfied with their jobs and willing to produce more. Two writers who helped advance the Human
Relations Movement were Abraham Maslow and Douglas McGregor (Griffin, 2012).
 In 1943, Maslow advanced a theory suggesting that people are motivated by a hierarchy of needs, including monetary incentive and
social acceptance. The hierarchy of needs outlined by Maslow has five levels: psychological (lowest), safety, belongingness, esteem, and
self-actualization (highest).
 Contemporary Behavioral Science in Management
 Contemporary theories on management have noted that many assertions of the human relationists were simplistic and provided
inadequate descriptions of work behavior. Current behavioral perspectives on management, known as organizational behavior,
acknowledge that human behavior in organizations is much more complex than what the human relationists realized.
 Organizational Behavior (OB) has been defined as “the study of human behavior, attitudes, and performance within an organizational
setting, drawing on theory, methods, and principles from such disciplines as psychology, sociology, and cultural anthropology to learn about
individual, groups, structure and processes”.

22. The Quantitative Management Perspective
 Management Science
 Management Science is an approach aimed at increasing decision effectiveness through the use of sophisticated
mathematical models and statistical methods. Another term commonly used for management science is operational
research. The increasing power of computers has greatly expanded the possibilities for using the mathematical and
statistical tools of management science in organizations.
 Operations Management
 Operations Management can be thought of as applied form of management science. Operations management
techniques are generally concerned with helping the organization produce its products or services more efficiently and
can be applied to a wide range of problems. Inventory management, linear programming, and break-even analysis are
some of the techniques or tools used to achieve the goals of efficiency in the operations of the organization.
 Contemporary Management Perspectives
 The classical, behavioral and quantitative perspectives can be classified as the foundation of today’s theory and
practice of management. However, of these three, there is no unifying perspective that would integrate the entire
gamut of needs of individuals as workers and contributors in the organization.
 *The Systems Perspective (Ivancevich and Matteson, 2002)
 The systems perspective is one important contemporary management perspective. A system is an interrelated set of
elements functioning as a whole. In system theory, the organization is seen as one element of a number of elements
that act interdependently. The flow of inputs and outputs is the basic starting point in describing the organization.
 *The Contingency Perspective
 The contingency perspective suggests that universal theories cannot be applied to organizations because each
organization is unique. Instead, the contingency perspective suggests that appropriate managerial behavior in a given
situation depends on, or is contingency on, unique elements in that situation (Kast, and Rosenzweig, 1983).

23. ENVIRONMENT FORCES AND EVNVIROMENTAL
SCANNING
 Environment scanning is the monitoring,
evaluating disseminating of information from the
external and internal environments to key people
within the corporation. Environment is everything
external to the organization’s boundaries. The
organization’s environment may be categorized
into external and internal environments. The
external environment includes the general and
the task environments while the internal
environment includes the elements within the
organization’s boundaries.

24. Importance of Environmental Scanning:
(William, Management, 2013)
 1.Managers scan the environment to stay-up-to-
date on important factors in their industry.
 2.Managers scan the environment to reduce
uncertainty.
 3.Environmental Scanning is important it
contributes to organizations performance. It helps
managers detect environmental change and
problems before they become organizational
crises.

25. With respect to environmental scanning,
manager can ask questions such as these:
(Batman and Snell, 2011)
 1.Who are our current competitors?
 2.Are there few or many entry barriers to our
industry?
 3.What substitutes exist for our product or
service?
 4.Is the company too dependent on powerful
suppliers?
 5.Is the company too dependent on powerful
customers?

26. Strategies use different information sources
depending on their needs for environmental
scanning.
 1.External Sources (like publications such as newspapers,
magazines, journals, books, trade and industry association
newsletter, government publications, annual reports of
competitions, mass media such as print, broadcast, and
social media)
 2.Internal Sources (company files and documents, MIS,
database, company employees, formal studies conducted
by employees, market research agencies, consultant and
educational institutions that have been commissioned to
do research).

27. THE GENERAL ENVIRONMENT (DATT,2012)
 1.International. This includes events originating in foreign countries as well as
opportunities for local (or Philippines) companies in other countries. This
aspect of the general environment provides new competitors, customers, and
suppliers and shapes social, technological, and economic trends as well.
 2.Technological. This includes scientific and technological advancement in a
specific industry as well as in society at large.
 3.Sociocultural. This represents the demographic characteristics as well as
the norms, customs, and values of the general population. Some important
sociocultural characteristics include distribution and population density, age,
and education levels.
 4.Economic. This aspect of the general environment represents the economic
status or level of development of the country or region in which the
organization operates.
 5.Legal-Political. This dimension of the environment includes laws and
regulations adopted by a country’s government.
 6.Natural. This dimension includes all elements that occur naturally on earth,
including plants, animals, rocks, and natural resources such as air, water, and
climate. Protection of the natural environment is emerging as a critical policy
focus around the world.

28. THE TASK ENVIRONMENT
 1.Competitive. One of the most important forces an
organization confronts in its task environment is competitive
(Jones and George). Competitors are organizations that produce
goods and services that are similar and comparable to a
particular organization’s goods and services.
 2.Suppliers. These provide the raw materials the organization
uses to produce its output.
 3.Customer. Customers purchase the goods or services an
organization offers (Bateman and Snell, 2011). Without
customers, a company won’t survive.
 4.Labor market. The labor market represents people in the
environment who can be hired to work for the organization,
since all organizations need a supply of trained, qualified
personnel.

29. SWOT ANALYSIS
SWOT Analysis is The task of formulating strategy often begins with an audit
of the internal and external factors that will affect the organization’s
competitive situation. SWOT ANALYSIS includes a careful assessment of strengths,
weaknesses, opportunities, and threats that influence an organization’s
efficiency and effectiveness.
 STRENGTHS AND WEAKNESSES
For SWOT analysis purposes, A strength is an internal characteristics that has
the potential of improving the organization’s competitive situation. In contrast, a
weakness is an internal characteristic that leaves the organization potentially
vulnerable to strategic moves by competitors. An opportunity is an environmental
condition that offers very important prospects for improving an organization’s
situation vis-à-vis its competitors. Conversely, a threat is an environmental
competitive situation (Bartol and Martin, 2010).
 OPPORTUNITIES AND THREATS
Opportunities, as cited in the foregoing, are characteristics of the external
environment that have the potential to help the organization achieve or even
exceed its strategic goals. Threats, on the other hand, are external environment
characteristics that may prevent the organization from achieving its strategic
goals.

30. STAGES OF ECONOMIC DEVELOPMENT:
THE LINEAR STAGES OF GROWTH MODELS
 Stage 1: Traditional society. The economy is dominated by
subsistence activity. Output is consumed by producers; it is not
traded. Trade is barter where goods are exchanged directly for
other goods. Agriculture is the most important industry. Production
is labour intensive using only limited quantities of capital.
Technology is limited, and resources allocation is determined very
much by traditional methods of production.
 Stage 2: Transitional stage. (Preconditions for take-off) Increased
specialization generates surpluses for trading. There is an
emergence of a transport infrastructure to support trade.
Entrepreneurs emerge as incomes, savings and investment grow.
External trade also occurs concentrating on primary products. A
strong central government encourages private enterprise.

31.  Stage 3: Take-off. Industrialization increase with workers switching
from the agriculture sector to the manufacturing sector. Growth is
concentrated in a few regions of the country and within one or two
manufacturing industries.
 Stage 4: Drive to maturity. The economy is diversifying into new
areas. Technological innovation is providing a diverse range of
investment opportunities. The economy is producing a wide range of
goods and services and there is less reliance on imports. Urbanization
increases. Technology is used more widely.
 Stage 5: High mass consumption. The economy is geared towards mass
consumption, and the level of economic activity is very high.
Technology is extensively used but its expansion is slow. The service
sector becomes increasingly dominant. Urbanization is complete.
Now, multinationals emerge. Income for large numbers of persons
transcend basic food, shelter and clothing. There is increased interest
in social welfare.

32. FORMS OF BUSINESS ORGANIZATIONS
There are three basic forms of business
ownership:
 Sole proprietorship – a sole proprietorship consists of one individual doing business. It
is easy to set up and is the least costly among all forms of ownership. Its owner faces
unlimited liability, meaning, the creditors of the business may go after the personal
assets of the owner if the business cannot pay them. this form of business organization
is usually adopted by small business entities.
 Partnership – a partnership is a business owned by two or more persons who contributes
resources into the entity. The partners divide the profits (and losses) among
themselves.
 Corporation – a corporation is a business organization that has a separate legal
personality from its owner. Ownership is a stock corporation is represented by shares of
stocks. The owners or stockholders enjoy limited liability but have limited involvement
in the company’s operations. The board of directors, an elected group from the
stockholders, controls the activities of the corporation.
 Cooperative – in addition to those basic forms of business ownership, another type of
organization common today, particularly, in developing countries is the cooperative, a
business organization owned by a group of individuals and is operated for mutual
benefit. The persons making up the group are called members. Cooperative may be
incorporated.

33. Thank You 