Management 1- Principles of Management

CHAPTER 1 BUSINESS IN GENERAL

Why People Engage In Business

1. Power 3. Service to the community 6. Social approval

2. Profit- the primary 4. Prestige
objective of a business 5. Livelihood

Kinds of Business

1. Industry- involves the conversion of raw materials into finished products or goods and the application of labor
2. Commerce- involves the process of buying and selling of goods
3. Services/ Service enterprise- primarily concerned with the satisfaction of the needs and wants of the consumers

Legal Forms of Business Ownership

1. Sole proprietorship- form of ownership organized and managed by only one person
2. Partnership- a business organization where two or more persons contribute money, property, or talent, to carry on
a business
3. Corporation- is an artificial being created by the operation of law, having the rights of succession and the powers,
attributes and properties expressly authorized by law or incident to its existence
 Security and Exchange Commission (SEC)- a government agency that requires the submission of Articles
and By Laws of a Partnership and Corporation
 Bureau of Commerce- a government agency that requires the registration of the business name

Advantages Disadvantages

1. Demanding on owner’s
1. Single
1. Easy to set up/ start personal time
proprietorship
2. Decision – making is left entirely to owner 2. Growth limited by
(one proprietor)
owner’s financial means
1. dissolution of partnership by
any personal rifts between
1. relatively easy to set up
2.Partnership (two or partners
2. checks and balances maintained with two parties
more partners) 2. equal profit sharing despite
around
unequal attention and time given
by partners to business

1. Complicated setting- up
1. Maximum flexibility
process
2. Limited liability of individual share
2. Limited influence on
3. Corporation (at 3. Greater room for professionalism
management by
least five 4. Dissolution is least likely to occur
individual stockholder
stockholders) 5. Can involve a wide range of people in
3. Tendency to
business including employees
institutionalize
6. Reduced tax burden on owners
bureaucracy

Positive Values of a Filipino entrepreneur

1. Pakikipagkapwa tao 4. Gaya-gaya

2. Bahala na 5. Utang na loob, hiya, awa, bayanihan
3. Pakikipagsapalaran 6. Kasipagan
 7. Pagtitipid 9. Pagtitimpi
8. Pagtitiis 10. Katapatan

Management 1- Principles of Management

CHAPTER 2 NATURE AND CONCEPT OF MANAGEMENT

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 and other business resources.

Universally Accepted Functions of Management

1. Planning- refers to the formulation of objectives, programs, policies, procedures, rules and regulations in order to
achieve the goals of the business
2. Organizing- is the grouping together of people, establishing relationship among them, and defining their authority
and responsibility
3. Staffing- involves filling and keeping filled the positions provided in the organization structure
4. Directing- has to do with predominantly interpersonal aspect of managing
5. Controlling- the process of measuring and correcting the activities of subordinates and the company itself to
assure conformity to plans.

The 14 Principles Of Management

1. Division Of Work- division of work into specialized tasks and assignment of duties and responsibilities to specific
individuals

2. Authority- delegation of authority

3. Discipline- clarity of expectation and punishment of violations

4. Unity Of Command- assignment of an employee to only one supervisor

5. Unity Of Direction- employees’ efforts geared toward the attainment of organizational objectives

6. Predominance Of General Interest- individual interest set aside and general interest dominating

7. Remuneration- efforts are systematically rewarded in line with organization’s vision/ mission

8. Centralization- importance of superior and subordinate roles are determined

9. Scalar Chain- communication is kept open within the chain of command

10. Order- jobs and materials are organized in an orderly fashion to support the organization’s direction

11. Equity- fairness and order make employee commitment intact

12. Stability and Tenure of Personnel- promotion of loyalty and longevity in the organization

13. Initiative- encouragement of employee to act solely on their own in support of the organization’s objectives

14. Esprit De Corps- promotion of teamwork and unity of interest between employees and management