Polytechnic University of the Philippines

College of Accountancy and Finance

Sta. Mesa, Manila

Written Report

Introduction

Group 1
Leader: Basilio, Richelle S.
Members:
Bennett, John Paul Edward D.
Estacio, Melitoriano P.

Prof. Marifel I. Javier

April 14, 2016
Reporting Strategy
Live news reporting in front of class and play recorded video for
the historical development of management topic.

Nature and Significance of Business Policy

[GROUP 1: INTRODUCTION]
What is Business Policy?

According to Christensen and others, business policy is the study of

the function and responsibilities of senior management, the crucial
problems that affect success in the total enterprise, and the decisions
that determine the direction of organization and shape its future. The
problems of policy in business, like those of policy in public affairs,
have to do with the choice of purposes, the molding of organizational
identity and character, the continuous definition of what needs to be
done, and the mobilization of resources for the attainment of goals in
the face of competition or adverse circumstances.

Importance of Business Policy

Four (4) areas where this proves beneficial:
1. Learning
Integrate the knowledge and experience gained in various
functional areas of management
Deals with constraints and complexities of real life business
Can be applied to various fields of management
2. Understanding the Business Environment
Create an understanding of how policies are formulated
Managers become more receptive to the ideas and suggestions
of the senior management and feel themselves to be a part of a
greater design
3. Understanding the Organization
Provides the basic framework for understanding strategic
decision making
Understanding of business policy leads to improvement of job
performance
4. Personal Development
It is beneficial for an executive to understand the impact of
policy shifts on the status of one department and on the position
one occupies
Offers unique perspective to executives for understanding the
macro factors and their impact on micro level
Offers unique perspective to executives for understand the
senior management view

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Clarifying the Concept of Policy and Policy-Making

Concept of Policy
Policy and strategy are used almost interchangeably. Business policy
has been defined as management's expressed or implied intent to govern
action in the achievement of company's aims.
A policy is the statement or general understanding, which provides
guidance in decision making to members of an organisation in respect of any
course of action.
The following are the features of policy;
Policies provide guidelines to the members in the organisation for
deciding a course of action. Policies permit prediction of roles with
certainty.
Policies are generally expressed in a qualitative, conditional and
general way.
Policy formulation is a function of all managers in an organisation
because some form of guidelines for future course of action is required
at every level.
A policy is formulated in the context of organisational objectives.
Policy-Making
According to Cambridge Dictionaries Online, policy-making is the
activity of deciding on new policies, especially by a government or political
party.
According to Collins Dictionaries, policy-making is the formulation of
ideas or plans that are used by an organization or government as a basis for
making decisions.

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[GROUP 1: INTRODUCTION]
Policy-making Process
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Agenda building
Before a policy can be created, a problem must exist that is
called to the attention of the government or the organization.
Formulation and adoption
Policy formulation means coming up with an approach to solving
a problem.
Implementation
The implementation or carrying out of policy is most often
accomplished by institutions other than those that formulated and
adopted it.
Evaluation and termination
Evaluation means determining how well a policy is working, and
it is not an easy task. People inside and outside of government
typically use cost-benefit analysis to try to find the answer. In other
words, if the government is spending x billions of dollars on this policy,
are the benefits derived from it worth the expenditure? Cost-benefit
analysis is based on hard-to-come-by data that are subject to different,
and sometimes contradictory, interpretations.
History has shown that once implemented, policies are difficult to
terminate. When they are terminated, it is usually because the policy

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[GROUP 1: INTRODUCTION]
became obsolete, clearly did not work, or lost its support among the
interest groups and elected officials that placed it on the agenda in the
first place.
Most likely this process is used by the government in public
policymaking.

Historical Development of Management

4 Development Stage of Management
Pre Scientific Management Approach
Classic Approach
Principles of management can be developed and implemented to make
organization effective. Management principles have universal application
with slight modification to suit various situations.
Scientific Management
Fredrick Winslow Taylor born on March 20, 1856, worked as a chief
engineer in the Midvale Steel Works where he joined as a worker. Afterwards,
he worked in the Bethlehem Steel Works and after retirement from his
concern, he worked as a consultant.
Instead of attending Harvard University, Taylor became an
apprentice patternmaker and machinist, gaining shop-floor experience at
Enterprise Hydraulic Works in Philadelphia (a pump-manufacturing company
whose proprietors were friends of the Taylor family). He left his
apprenticeship for six months and represented a group of New England
machine-tool manufacturers at Philadelphia's centennial exposition. Taylor
finished his four-year apprenticeship and in 1878 became a machineshop labourer at Midvale Steel Works. At Midvale, he was quickly promoted
to time clerk, journeyman machinist, gang boss over the lathe
hands, machine shop foreman, research director, and finally chief engineer of
the works (while maintaining his position as machine shop foreman). Taylor's
fast promotions reflected not only his talent but also his family's relationship
with Edward Clark, part owner of Midvale Steel. (Edward Clark's son Clarence
Clark, who was also a manager at Midvale Steel, married Taylor's sister.)

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[GROUP 1: INTRODUCTION]
Early on at Midvale, working as a labourer and machinist, Taylor
recognized that workmen were not working their machines, or themselves,
nearly as hard as they could (which at the time was called "soldiering") and
that this resulted in high labour costs for the company. When he became a
foreman he expected more output from the workmen. In order to determine
how much work should properly be expected, he began to study and analyze
the productivity of both the men and the machines (although the word
"productivity" was not used at the time and the applied science of
productivity had not yet been developed). His focus on the human
component of production Taylor labelled scientific management.
The elements of scientific management are:
(a) determination of the task,
(b) planning of industrial operations,
(c) proper selection and training of workers,
(d) improvement in methods of work,
(e) modification of organization, and
(f) mental revolution.
Process Management
Around 1910, H.Fayol, a French engineer, initiated the administrative
theory of management (process management) in Europe. Sheldon, Mooney
and Railey, L.F .Urwick and L.Gulick also contributed a lot to the
administrative theory of management. This theory is called process
(functional) management and advocates of this theory belong to the process
school of management.
The 14 principles of management are:
1.

Division of work

2.

Authority and Responsibility

3.

Discipline

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[GROUP 1: INTRODUCTION]
4.

Unity of command

5.

Unity of direction

6.

Subordination

7.

Remuneration

8.

Centralization

9.

Scalar chain

10.

Order

11.

Equity

12.

Stability of tenure of personnel

13.

Initiative

14.

Esprit de corps

Human Relations Movement

Elton Mayo, who is considered to be the founder of human relations
movement, and his associates, conducted the Hawthorne Studies in the
Hawthorne plant of Western Electric Company, USA during1927-1932 and
write his book The Human Problems of an Industrialized Civilization (1933).
They stated that the employees morale had a great influence on
productivity and the manager should treat them as social beings instead of
economic beings or simply as cogs of a wheel. For solving any management
problem, the manager should understand group attitudes and psychology, as
employees are members of a group.
His approach and theory emphasized the importance of human and
social factors and also individual as well as group relationships, while the
classical theory of Taylor and Fayol gave importance to job content and
management of physical resources.
This theory served to focus attention on the social side of the work and man,
as opposed to the economical and technical aspects. This theory is also

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[GROUP 1: INTRODUCTION]
criticized on the ground that there is no direct connection between morale
and productivity, hence the research in Hawthorne plant had a management
bias, and that the samples were too small. In spite of these criticisms, the
contribution of human relations remains and are being applied even today by
managers.
Modern Management Approach
Behavioral Science Movement
Douglas Murray McGregor (1906 1 October 1964) was
a management professor at the MIT Sloan School of Management and
president of Antioch College from 1948 to 1954. He also taught at the Indian
Institute of Management Calcutta. His 1960 book The Human Side of
Enterprise had a profound influence on education practices.
Douglas McGregor is a contemporary of Abraham Maslow. Likewise, he
also contributed much to the development of the management and
motivational theory. He is best known for his Theory X and Theory Y as
presented in his book The Human Side of Enterprise (1960), which proposed
that managers individual assumptions about human nature and behaviour
determined how individual manages their employees.
Theory x ('Authoritarian Management' Style)

The average person dislikes work and will avoid it he/she can.

Therefore most people must be forced with the

punishment to work towards organisational objectives.

The average person prefers to be directed; to avoid responsibility; is

relatively unambitious, and wants security above all else.

threat

of

Theory Y ('Participative Management' Style)

Effort in work is as natural as work and play.

People will apply self-control and self-direction in the pursuit of

organisational objectives, without external control or the threat of
punishment.

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[GROUP 1: INTRODUCTION]

Commitment to objectives is a function of rewards associated with

their achievement.

People usually accept and often seek responsibility.

The capacity to use a high degree of imagination, ingenuity and

creativity in solving organisational problems is widely, not narrowly,
distributed in the population.

In industry the intellectual potential of the average person is only

partly utilised.

Bibliography

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[GROUP 1: INTRODUCTION]
Businessballs: Douglas McGregor. (n.d.). Retrieved April 13, 2016, from
Businessballs: http://www.businessballs.com/mcgregor.htm
Cambridge Dictionaries Online. (n.d.). Retrieved April 13, 2016, from Cambridge
Dictionaries Online: http://dictionary.cambridge.org/us/dictionary/english/policymaking
CliffsNotes: The Policymaking Process. (n.d.). Retrieved April 13, 2016, from
ClifssNotes web site: http://www.cliffsnotes.com/study-guides/americangovernment/public-policy/the-policymaking-process
Collins Dictionaries. (n.d.). Retrieved April 13, 2016, from Collins:
http://www.collinsdictionary.com/dictionary/english/policy-making
Farooq, U. (2011, October 22). Study Lecture Notes: Management Sciences.
Retrieved April 13, 2016, from Study Lecture Notes:
http://www.studylecturenotes.com/management-sciences/management/201historical-development-of-management
Kazmi, A. (1992). Business Policy and Strategic Management, 2nd edition. New
Delhi: Tata McGraw-Hill Publishing Company Limited.
Krishna Kanta Handiqui State Open University: Management. (n.d.). Retrieved April
13, 2016, from Krishna Kanta Handiqui State Open University:
http://www.kkhsou.in/main/EVidya2/management/evalution_management.html
Padala, S. R., & Suryanarayana, D. N. (2010, September 2). Articlesbase: Sales
Articles. Retrieved April 13, 2016, from Articlesbase Web Site:
http://www.articlesbase.com/sales-articles/concept-of-business-policy-3187046.html
Wikipedia: Frederick Winslow Taylor. (n.d.). Retrieved April 13, 2016, from Wikipedia:
https://en.wikipedia.org/wiki/Frederick_Winslow_Taylor

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