POM

Module 1: Overview of Production Operations Management

Unit 1: The Nature & Purpose of Organizations

Overview:

Each one should use whatever gift he has received to serve others,
faithfully administering God's grace in its various forms.
1 Peter 4:10 (NIV)

Watch:
Amazon https://www.youtube.com/watch?v=Y-lBvI6u_hw

• Based on your present understanding of what “organizations” are, what would

you say are the characteristics that make Amazon an organization?
• What could be Amazon’s purpose for existence?
• How does Amazon accomplish this purpose?

Module Objectives:
After successful completion of this Unit, you should be able to:

• Explain what organizations are;

• Explain why organizations exist;
• Explain how organizations accomplish their purpose for existence; and
• Relate your understanding of organizations to Maslow’s Hierarchy of
Needs Theory.

Course Materials

1. YouTube video: Amazon https://www.youtube.com/watch?v=Y-lBvI6u_hw

2. Handout: The Nature and Purpose of Organizations
3. Web article/s on Maslow’s Hierarchy of Needs Theory
 Read:

ORGANIZATION: ITS NATURE AND PURPOSE

An organization is a group of people working together to achieve common

objectives. This basic definition implies that at least four conditions must exist
to have an organization:

1. Community: There must be a group of people – two or more persons –

who are interconnected, interrelated and interdependent; people who
communicate and are concerned with one another;

2. Common purpose: These persons must have common objectives; i.e.,

they all agree on at least one objective that is worth pursuing and
achieving together;

3. Cooperation: Each member of the group works to the best that he or she
can to contribute towards the achievement of their shared objectives; and

4. Coordination: The group members work together; i.e., all their efforts are
interrelated and coordinated, all aimed at the achievement of their
common objectives; coordination implies both harmony and unity of
direction.

All these conditions must be present for an organization to exist. If only

one or two or even three, but not all, of these conditions exist, the organization,
in its truest sense, does not exist.

THE PURPOSE OF ORGANIZATIONS

Organizations exist primarily to serve and satisfy needs – of others and their
own. The basic purpose of organizations is to satisfy the needs, wants, and
demands of individuals and other organizations. And as the organization
satisfies others’ needs, it also satisfies its own needs through revenues and
profits.

From the point of view of an organization, the individuals and other

organizations whose needs it intends to satisfy are its customers. Although,
customers’ needs vary, these can be satisfied either by goods or services, or
both. These goods or services are the products or outputs of organizations.

But organizations cannot just come up with products from nothing. They
need inputs or resources to produce outputs of goods and services. These
inputs include human resources, financial resources, materials and
equipment, technology, time, and information. Most of these resources, in turn,
come from outside the organization, from individuals and other organizations –
the organization’s suppliers – partners in its quest to satisfy customer needs.

Throughout the whole process of satisfying customer needs – from the

acquisition of resources, to the conversion of these resources into products, to
the distribution of these products to customers – there must be valued-added;
i.e., the value of the outputs must exceed the value of the inputs.
Organizations should strive to achieve appropriate objectives using the least
amount of resources or to accomplish as much as possible with available
resources. In effect, the organization will be profitable, viable, and sustainable
– capable of continually pursuing its purpose. Thus, it is by effectively and
efficiently satisfying others’ needs first that the organization and its members
are able, in turn, to satisfy their corporate and individual needs. Figure 1-1
illustrates this concept.

Figure 1-1. Organizations exist to satisfy needs.

Review:
1. WHAT: Each organization is supposed to be a community of persons whose
members are coordinated in their efforts to cooperate with one another as they
pursue their common purpose.
2. WHY: The purpose of any organization is to satisfy the needs of others and their
own needs.
3. HOW: Organizations achieve their purpose by acquiring resources and transforming
these into products of goods and services, and through the economic activities of
production, distribution, exchange and consumption.

Activities/Assessments:
Activity 1. Individual Assignment: 20 points

• Abraham Maslow’s Hierarchy of Needs Theory states that the needs of human beings
can be classified into five categories, which may be ranked according to how humans
prioritize to satisfy them.
Self-actualization needs
Self-esteem needs
Social needs
Safety needs
Survival needs

1. Search for and state your own definition of each of these categories of needs.
2. Based on your own experience and observation, identify 2 goods or services that
humans avail of or use to satisfy each of these categories of needs.
3. For each good or service, identify an organization that provides such good or
service. Take note that organizations can be for-profit (business) or non-profit; public
(government) or private; civic, religious, social, political, and so on; although, in this
class, our focus is more on business organizations.
4. As a Louisian student, you are preparing yourself to work with organizations and
participate in what they are doing as they satisfy needs. In 5 to 7 sentences, describe
what you might be doing later, according to your major, to participate with God as He
satisfies the needs of your chosen organization and its customers.
• Format: On short bond paper; with your name and date of submission.

Category of Needs Definition Good or Service Organization

Survival 1. 1.
2. 2.
Safety 1. 1.
2. 2.
Social 1. 1.
2. 2.
Self-esteem 1. 1.
2. 2.
Self-actualization 1. 1.
2. 2.
• Submit to our Google classroom on, or preferably before, our Prelim exam.
• If you can’t, submit to alareola@slu.edu.ph;
Filename format: POMclasscode.surname.act1; e.g., 1725.delacruz.act1