Principle of Management

Definition of Management and Business:

Management is defined as the systematic process of Planning, Organizing, Staffing, Directing, and
Controlling (POSDC) all activities and resources in an organization for effective and efficient realization of
specific objectives.

Business is defined as an organization of people with varied skills. Uses property or talents, to produce
goods or services, which can be sold to others for more than their cost to gain profit or an enterprising
entity engaged in commercial, industrial, or professional activities to meet their objectives
Meaning of Terms Used in the Conceptual Paradigm:

A. The House:

The house represents a firm or any business organization. The primary goal of any business is to earn
profit and prestige as a result of effective and efficient business management.

B. The Inputs:

Men become part of the company as the human resources, which believe to be the most valuable assets
of every organization because they are the one who controls and process all other resources to
accomplish the company goals or purposes.

Money is also a major and significant input of business because the company makes use of it as the
primary fuel to run the business machine. Money or financial resources is the main reason why there is
a business. Proper Management of financial resources is one of the main concerns of business
managers and owners.

Materials are all of the tangible things being used by organizations to run their businesses; these are the
physical resources of the company in forms of land, building, machines, equipment, raw materials, and
supplies. Proper Management of physical assets is very important in running the business.

Methods are also very important inputs. The company needs relevant ideas to run the business well.
Methods, also known as informational resources, are company assets being used by the managers for
managing the affairs of the Organization. Business ideas such as; plans, strategies, tactics, policies, rules,
procedures, and other information are gathered and used by the organizations for their advantage.

C. The Five (5) Basic Management Functions

Planning – is the process of establishing goals and a suitable course of action in anticipation of future
trends so that the desired result for achieving those goals will be realized.

Organizing – is the process of engaging two or more people in working together in a structured way to
achieve a specific goal or set of goals. It is designing the relationship between jobs, personnel, and
physical factors.

Staffing – is the process of filling the positions provided in the organizational structure to accomplish the
tasks effectively.

Directing - is the process of influencing people and motivate them to work willingly and effectively and
perform essential tasks.

Controlling - is the process of ensuring that actual activities conform to planned activities. It means
keeping all efforts within the channels prescribed by the Management.
 D. The Four (4) Basic Business Functions:

Production/Operations Department – is in charge of the transformation process that converts raw

materials and other inputs into finished products in the form of goods or services.

Marketing Department – perform a group of activities designed to facilitate and expedite the
distribution and selling of goods or services produced by the Organization to satisfy customers' needs
and wants.

Finance Department – is concerned with the procurement and administration of funds. With the view of
achieving the objectives of the business.

Human Resources Department – is responsible for the recruitment, selection, training, and
development, compensation, integration, and maintenance as well as discipline and separation of
organization members.

E. Effectiveness, Efficiency, and Goals or Objectives:

Effectiveness – means the ability to determine appropriate objectives, "DOING THE RIGHT THING." The
performance is said to be effective when the job was done exactly following the information specified in
the plan and was finished within the specified budget and time allotment.

Efficiency – means the ability to minimize the use of resources in achieving organizational objectives,
"DOING THINGS RIGHT." The performance is efficient when the task was done following the plan in a
minimize budget and a shorter period.

Goals or Objectives – the purpose that an organization strives to achieve; organizations often have more
than one goal. Goals or objectives are fundamental elements of organizations.

F. The Outputs:

Products – are all of the tangible finished goods produced by the Organization.

Services – are all of the intangible products produced by the Organization.

G. The Foundation:

Knowledge, Skills, and Attitude (KSA) represents the strength of any organization. Managers and
members of the Organization's workforce must possess the right knowledge, skills, and attitude to
obtain true success.