L1: NATURE AND CONCEPTS OF MANAGEMENT

ABM 11-03 | ABM 1107_Organization and Management A.Y. 2022-2023

“The simplest definition of management is getting things done through people.”

Coordination - harmonious,
coordinated operation of the different
MANAGEMENT
parts and processes of the
organization
Management
Efficiency - the character of being
● “Management is about
able to produce the maximum output
persuading people to do things
of the minimum input
they do not want to do while
Effectiveness - being adapted to
leadership is about inspiring
produce an effect that will help the
people to do things they never
organization to achieve its objectives
thought they could.” (Steve
Jobs)
● A distinct process of planning, FUNCTIONS OF MANAGEMENT
organizing, staffing, directing
and controlling (POSDICON) 1. Planning - refers to the
performed to determine and formulation of objectives,
accomplish stated objectives by programs, policies, procedures,
the use of human being and rules and regulations, in order to
other business resources achieve the goals of business. It
is related to decision-making. It
involves forecasting.
DEFINITION OF TERMS
2. Organizing - the grouping
together of people, establishing
Management Functions - the
relationship among them, and
functions required to carry out the
defining the authority and
management process of organizing
responsibility that the personal
and monitoring the work performance
have in the use of company’s
of individuals working together in
material resources to attain
organizations
predetermined goals
 3. Staffing - involves filing and harmoniously working together
keeping filled the positions and moving toward the
provided in the organized accomplishments of the
structure organization’s vision, mission,
4. Directing - guiding people in goals and objectives.
the organization through the ● Efficiency refers to the optimal
means of counseling, instructing use of scarce resources—
and motivating human, financial, physical and
5. Controlling - the process of mechanical—in order to bring
managing and correcting the maximum productivity.
activities of subordinates and ● Effectiveness means “doing
the company itself to assure things correctly” when engaged
conformity to plans in activities that will help the
organization attain its aims.
Coordination, Efficiency and
Effectiveness: Intrinsic to the Nature Management is an art because it is:
of Management ● Through human efforts
○ Feels
Management functions are all ○ Guesses
going to waste if coordination, ○ Describes
efficiency, and effectiveness are ○ Expresses
not carried out by the assigned ○ Communicates
managers of the organization. In ○ Practices
other words, top-level
managers, middle-level Management is a science because it:
managers, and team leaders or ● Is a systematic body of
supervisors must all be aware of knowledge
the activities of successful ○ Predicts
organizations as they execute ○ Defines
their management functions. ○ Measures
When applied to management ○ Utilizes knowledge
functions: ○ Tests for validity and
● Coordination ensures that all comparability
individuals, groups or teams are
Science is the root and art is the proof CHARACTERISTICS OF SCIENTIFIC
in relation to management. MANAGEMENT

Why study management? General Approach

● The better you can work with ● Developed standard method for
people, the more successful you performing each job
will be in both your personal and ● Selected workers with
professional lives. appropriate abilities for each job
● Trained workers in standard
methods
EVOLUTION OF MANAGEMENT
● Supported workers by planning
THEORIES
their work and eliminating
interruptions
SCIENTIFIC MANAGEMENT
● Provided wage incentives to
workers for increased output
● Frederick Winslow Taylor - father
Contributions
of scientific management
● Demonstrated the importance
● Known as Taylorism, is a theory
of compensation for
of management that analyzes
performance
and unifies workflows
● Initiated the careful study of
● Main objective is to improve
tasks and jobs
economic efficiency, particularly
● Demonstrated the importance
labor productivity
of personnel selection and
● Places a strong emphasis on
training
efficiency and productivity by
Criticisms
eliminating wasteful activities,
● Did not appreciate the social
and standardizing the bet
context of work and higher
practices, having disdain for
needs of workers
tradition preserved merely for its
● Did not acknowledge variance
own sake, or to protect the
among individuals
social status of workers with
● Tended to regard workers as
particular skill sets
uninformed and ignored their
ideas and suggestions
Amazon
● An online retailer, manufacturer BUREAUCRATIC ORGANIZATIONS
of electronic book readers, and
Web service provider that ● A management style with a
became the iconic example of hierarchical command structure
electronic commerce ● A social system in which it has
● Seattle, Washington complexity and is highly
● Founded by Jeff Bezoz on July 5, organized and controllable with
1994 in his garage in Bellevue, regards to their policies, and
Washington rules to a certain group
● “Get big fast” ● Associated with red tape
● Bureaucrat - a public servant in
How is scientific management applied a particular society or
● Amazon focuses on improving organization
efficiency and labor productivity ● Rational authority - more
● Amazon workers can be efficient and adaptable to
retooled as machines change
● Amazon has its own incentive
systems CHARACTERISTICS OF A
BUREAUCRATIC ORGANIZATION
FRANK AND LILLIAN GILBRETH
● Believed in regulation and ● Hierarchical organization
consistency ● Being stuck to the rules/policies
● Came up with three main points when making decision
○ Reduce the number of ● Formality/uniformity
motions in a task ● Division of task specialization
■ Utilizes therbligs ● Working professionally
○ Focus on the incremental
study of motions and
time
○ Increase efficiency to Potential Benefits of Bureaucracy
increase profit and work ● Large amounts of standard
satisfaction information have to be
processed
 ● The needs of the customer are Division of labor
known and are unlikely to ● Tasks are divided among the
change employees and give duties that
● The technology is routine and are best suited to the
stable employees’ abilities
● The organization has to Procedures
coordinate the activities of ● Employees’ key specific required
employees in order to deliver a action plan are outlined in
standardized service/product to organizational and workplace
the customer procedures
● Can be in the form of policies or
MAX WEBER guidelines that provide
● A German theorist that believed guidelines for day-to-day
that bureaucracy is the most operations
effective way to consider in an Recruitment on merit
organization ● Making hiring and selection
decisions solely based on
PRINCIPLES OF BUREAUCRATIC qualification criteria
ORGANIZATION Fairness
● People’s behavior and conduct
Hierarchy are regulated without favoritism
● A form of system that allows ● Reduces discrimination
employees to grasp the
arrangements and commands Toyota Motor Corporation
from top to bottom ● Largest automobile
● Authority centered decision- manufacturer in the world
making ● First founded by Kiichiro Toyoda
Job specialization on August 28, 1937
● Process of enhancing an
employee’s skills, deeper How is bureaucratic organization
understanding of their work and applied
more ● They use its organizational
● Generates trained individuals structure to support its
with advanced knowledge
 commercial objectives and 2. Authority and Responsibility -
strategic direction managers must be able to give
● They use a variety of the order as their responsibility
management and leadership 3. Discipline - employees must
strategies to be able to properly obey and respect the rules and
respond to different scenarios regulations which govern the
organization
4. Unity of Command - every
ADMINISTRATIVE PRINCIPLES employee should receive order
or direction from only one
Henri Fayol upward or superior
● A French mining engineer 5. Unity of Direction - each group
● “The General and Industrial of the organization should be
Management” directed by one manager using
● His management theory one plan
provides a straightforward 6. Subordination of Individual
illustration of how management Interests to the General
deals with employees Interests - the management
● Outlined 14 management must see its aim are always
principles based on his supreme
extensive expertise to help 7. Remuneration of Personnel -
managers the laborers must be paid a
● Addressed the shortcomings of reasonable salary for their work
Taylor’s management theory by 8. Centralization - management
providing a comprehensive and or any other authority in charge
analytical framework for the of making decisions should be
administrative process balanced in any organization
9. Scalar Chain of Authority -
hierarchy levels should be
14 PRINCIPLES OF ADMINISTRATIVE ordered from highest to lowest
PROCESS in his discussion of this principle
10. Order - a company should have
1. Division of Work - allows for job a well-structured working order
specialization
 11. Equity - respect and fairness ● Burger King - a fast food
should be provided to all restaurant developed on 1954,
employees founded at Miami Florida, US by
12. Stability of Tenure of Personnel James McLamore and David
- management aims to keep Edgerton
the proper personnel in the ● McDonald’s - a fast food
proper positions and to reduce restaurant developed on May 15,
turnover among employees 1940, founded at San Bernardino,
13. Initiative - management should California by Richard and
encourage and motivate Maurice McDonald
employees to take initiative
within its organization
14. Esprit de Corps - the HUMANISTIC PERSPECTIVE
management must cultivate an
atmosphere of mutual respect ● A great management theory
and trust among its employees that emphasizes interpersonal
in order to establish a relationships
productive workplace ● Demonstrates the importance of
understanding human
Fayol’s 5 Functions of Management behaviors, needs and attitude in
● Planning the workplace as well as social
● Organizing interactions and group
● Commanding processes
● Coordinating ● Focuses more on
● Controlling understanding, empathy and
sensitivity of a company
Three Institutions that Follow Fayol’s towards its employees
Principle of Management
● Domino’s Pizza - a restaurant Mary Parker Follet
chain developed on December ● A social worker, management
9, 1960, founded at Ypsilanti, consultant and a philosopher
Michigan, US by Tom Monaghan that founded the disciplines of
and James Monaghan organizational theory and
behavior
Chester Irving Barnards ● A combination of feelings,
● A true sociologist and an author thoughts, and actions towards a
known as “Erudite Executive” particular object, person, thing
● Created “The Functions of the or event
Executive”
The success of a company and
Human Behavior organization relies greatly on
● The potential and shown ability how its members interact,
to engage in social, mental and communicate and work
physical activities during the collaboratively with other people
course of a person’s lifetime by understanding their
● Very person has different behaviors, attitude and need
behavior and we need to when it comes to social
observe and familiarize it in interactions.
○ Voluntary - a form of
behavior driven by Human Relations Movement
human wants ● A movement initiated by George
○ Involuntary - a form of Elton Mayo conducted during
behavior that happens the early 1920s
automatically and ● Its objective is to find if there is a
without deliberate link between the workplace
awareness environment and the workers’
productivity
Maslow’s Hierarchy of Needs
● States that the behavior of a Human Resources Perspective
person is dictated by five types ● Kept an interest in worker
of human needs involvement and
○ Physiological compassionate leadership but
○ Safety altered the focus to take into
○ Love and belonging account the regular duties that
○ Esteem employees carry out
○ Self-actualization ● Abraham Maslow and Douglas
McGregor were two of the most
Human Attitude well-known proponents
 ● Integrates recommendations for ● Employees trust each other to
task design with theories of deliver quality jobs on time with
motivation minimum supervision
● Inspires and motivates workers
Behavioral Science Approach to build them up with
● Scientific methods that draw confidence
from sociology, psychology,
anthropology, economics and Tim Cook
other disciplines that focus on ● “Quiet leader”
human behavior and interaction ● Described as thoughtful and
charismatic
Company that Applies Humanistic ● “We take risks knowing that risks
Perspective will sometimes result in failure,
● Apple Inc. but without the possibility of
○ A technology company failure there is no possibility of
that produce electronics, success.”
software, and online ● The company uses insensitive
services that satisfy its compensation system
consumers’ needs ● The company provides safe
working conditions, treat
How is humanistic perspective applied workers with dignity, respect, act
● Apple’s democratic leadership fairly and ethically
style ● Employees think Apple’s pros
● Company is run based on ideas, overshadowed its cons
not hierarchy
● Created strategies and action of
dealing with employees in a fair THEORY X AND THEORY Y
way
● Has a diverse community Douglas McGregor
● Respects and considers the ● A social psychologist in the
opinions of their company’s 1960s that developed two
employees contrasting theories that
explained how the managers’
beliefs about what motivates
 their people could affect their toward organizational
management style objectives.
● “The Human Side of Enterprise” ● Commitment to objectives is a
function of the reward
Theory X and Theory Y associated with their
● Only applicable on government achievement.
and bureaucratic institution, not ● The average human being
on private organizations learns, under proper conditions,
not only to accept but to seek
Assumptions of Theory X responsibility.
● The average human being has ● The capacity to exercise a
an inherent dislike of work and relatively high degree of
will avoid it if he can do so. imagination. Ingenuity and
● Because of his human creativity in the solution of
characteristics of dislike of work, organizational problems are
most people must be coerced, widespread and distributed in
controlled, directed, and the population.
threatened with punishment to ● Under the conditions of modern
get them to put forth adequate industrial life, the intellectual
efforts towards the achievement potentialities of the average
of organizational objectives. human being are only partially
● Average human being prefers to utilized.
be directed, wishes to avoid
responsibility, has relatively little Situations where Theory X are applied
ambition, and wants security ● Factory workers / manufacturers
above all. ● Workers who work overtime
● Managers in high-pressure,
Assumptions of Theory Y high-output organizations
● The expenditure of physical and
mental efforts in a work is as
natural as play or rest.
● External control and the threat Situations where Theory Y are applied
of punishment are not the only ● Team building, workshops,
means for bringing about efforts training and seminars
 ● Team collaboration
● Managers with positive MANAGER (Administrators)
feedback to their employees ● A person that manages
● Volunteer programs ● A person that conducts business
or household affairs
● A person whose work or
RECENT HISTORICAL TRENDS
profession is management
● Individuals who achieve goals
Systems Theory
through other people
● A holistic view of management
as an interrelated parts to
TYPES OF MANAGERS
achieve a common purpose
● Functional Managers -
responsible for just one
Contingency View
organizational activity, such as
● Successful resolution of
finance or human resources
organizational problems that
management
depend on situations
● General Managers -
responsible for complex multi-
Total Quality Management
functional units of an
● Management of the total
organization
organization to deliver quality

Managerial Activities
W. Edward Deming
● Make decisions
● Father of quality
● Allocate resources
movement
● Direct activities of others to
attain goals
Four Key Elements of Quality
Management
● Employee involvement
● Focus on customer
● Benchmarking
Where Do Managers Work?
● Continuous improvement
● Organization - a consciously
coordinated social unit,
MANAGER
 composed of two or more ● Entrepreneur - searches
people organization and its
environment for opportunities
and initiates projects to bring
MINTZBERG’S MANAGERIAL ROLES
about change
● Disturbance Handler -
Henry Mintzberg
responsible for corrective action
when organization faces
Interpersonal
important, unexpected
● Figurehead - symbolic head;
disturbances
required to perform a number of
● Resource Allocator - makes or
routine duties of a legal or social
approves significant
network
organizational decisions
● Leader - responsible for the
● Negotiator - responsible for
motivation and direction of
representing the organization at
employees
major negotiations
● Liaison - maintains a network of
outside contacts who provide
Management Skills (Robert Katz)
favors and information
● Technical skills - ability to apply
Informational
specialized knowledge or
● Monitor - receives wide variety
expertise
of information
● Human skills - ability to work
● Disseminator - transmits
with, understand, and motivate
information received from
other people, both individually
outsiders or from other
and in groups
employees to members of the
● Conceptual skills - mental
organization
ability to analyze and diagnose
● Spokesperson - transmits
complex situations
information to outsiders on
organization’s plans, policies,
actions, and results; serves as
expert on organization’s industry
Decisional DEFINITION OF TERMS
Bureaucracy - a rational effect form of
organization founded on logic, order, Globalization - the worldwide
and legitimate authority interdependence of resource flows,
product markets, and business
Progression Principle - a principle competition
wherein a need only becomes
activated after the next-lower level Organizational Chart - a diagram that
need is satisfied ; one of the principles defines or illustrates the organization’s
that Theory X employees apply management hierarchy and
departments including the
Rational Authority - a form of organization’s members and their jobs
leadership in which decisions are and their working relationships
made based on laws and regulations,
rather than on the personal whims of Authority - the right or privilege to
those in power direct or request a behavior of action,
along with the right to discipline
First-line Manager - a team leader or
supervisor who is formally in charge of Therblig - a system for analyzing the
a small work group composed of non- motions involved in performing a task ;
managerial works designed to find unnecessary or
inefficient motions and to utilize or
Middle Manager - a person in charge eliminate even split-seconds of
of relatively large departments or wasted time
divisions consisting of several smaller
work units or teams

Top Manager - a manager who is

responsible for making organization-
wide decisions and established in the
goals and plans that affect the entire
organization
Glass-ceiling Effect - an invisible
barrier limiting career advancement of
women and minorities
L2: ENVIRONMENTAL FORCES AND
ENVIRONMENTAL SCANNING
ABM 11-03 | ABM 1107_Organization and Management A.Y. 2022-2023

Internal Business Environment

BUSINESS ENVIRONMENT
● Refers to the factors or elements
within the organization which
Environmental Forces
may also affect its performance,
● Identifiable elements in the
either positively or negatively
physical, cultural, demographic,
economic, political, regulatory,
External Business Environment
or technological environment
● Includes the factors and
that affects the survival,
elements outside the
operations, and growth of an
organization which may affect
organization
its performance, either positively
○ An organization doesn’t
or negatively
exist in a vacuum
○ Most environmental
Environmental Scanning
forces may be outside of
● The examination of
a company’s control
macroenvironment forces
relevant to the organizational
Business Environment
development of strategy
● Refers to the all internal and
● Helps identify market
external factors that affect how
opportunities
the company functions
● Provides guidelines for design of
including employees,
marketing strategy
customers, management,
supply and demand and
business regulations
● Divided into the external and
internal business environment
MACROENVIRONMENT FORCES
 ● Related to the increasing
Socio-cultural number of global competitors
● Include the customer’s and markets, as well as the
changing values and nature and conditions of the
preferences changing natural environment
Demographic
● Include gender, age, Customer - a person or individual who
educational level, income, patronized the organization’s products
number of family members, and services
geographic origin, etc., may also
influence some managerial
LOCAL AND INTERNATIONAL
decisions in organizations
BUSINESS ENVIRONMENT
Economic
● Include the use of resources,
Business Climate - a complex network
disposable income levels,
of political, legal and institutional
interest rates, inflation, growth
framework conditions that businesses
and productivity; may affect
operate within
management practices in
organizations
Descriptions of a Conducive Local
Technological
Business
● Involves the use of varied types
● Reduces the cost of doing
of electronic gadgets and
business
advanced technology that have
● Unleashes economic potentials
revolutionized business
● Attracts investment
management
● (If shaped by problematic
Political / Legal
governance) Political guidelines,
● Refers to national or local laws,
laws and regulations and
international laws, rules and
ineffective administration pay
regulations that influences
enormous and unnecessary
organizational management
costs with negative impact on
economic growth patterns

World and Ecological

Internal Business
 ● Also known as domestic trade through phone, and the
● A business entity whose one who invites
commercial activities are customarily pays
performed within a nation ○ Office hours are 8 AM to 5
● The buyer and seller belong to PM, while bank hours are
the same country and so the 9 AM to 3 PM. Offices are
trade agreement is based on generally closed during
the practices, laws and customs weekends
that are followed in the country ○ Summer-weight clothing
● Communication is easier; is normally worn
however, access to material and ○ During Christmas, tokens
labor may be limited and gifts range from
basket of goods to
Privileges of Domestic Business company giveaways
● Low transaction cost
● Less period between production International Business
and sale of goods ● A business environment wherein
● Low transportation cost manufacturing and trading
● Encourages small-scale occur beyond the borders to the
enterprises domestic country
● All economic activities indulged
Handling Business Matters in the in cross-border transactions
Philippines ● Include all commercial activities
● Influenced by East and West in which two or more countries
● Means of friendly relationship are involved
● Likes a polite reply with a smile
● Has its own etiquette
○ Filipinos usually address
people by their titles
○ English - official business
language ; Taglish -
common language
○ Business lunches and 5 Cultural Dimensions Framework
dinners are arranged
● Developed by Geert Hofstede in Role of Business in Economy
which worldwide differences in ● Act as a vehicle for economic
culture are categorized progress
● Catalyzes economic growth and
Individualism (Collectivism ↔ eases poverty
Individualism) ● Makes exchange among people
● The relationship between possible
the individual and the ● MSME are the backbone of the
group country’s economy that provide
Power Distance (Low Power work to 70% of the country’s
Distance ↔ High Power labor force
Distance)
● The degree of inequality What Philippine Businesses Do in this
between people that is New Era of Uncertainty?
assumed to be a natural ● A strategic mindset
state of affairs ● Effective environmental
Truth (Weak Uncertainty scanning
Avoidance ↔ Strong Uncertainty ● Due diligence and analysis
Avoidance) ● Strengthen the business
● Refers to how people in a
culture cope with the
KEY DIFFERENCES BETWEEN LOCAL
unpredictable and the
AND INTERNATIONAL BUSINESS
ambiguous
Gender (Femininity ↔
Definition
Masculinity)
● Local business is defined as the
● Core-oriented societies
business whose economic
vs. achievement-oriented
transaction is conducted within
societies
the geographical limits of the
Virtue (Long-term Orientation ↔
country
Short-term Orientation)
● International business refers to a
● Related to society’s
business which is not restricted
attitude towards time and
to a single country
traditions
Area of Operation Business Research
● Local business - limited ● Local business - easily
● International business - vast conducted
(serves many countries at the ● International business - difficult,
same time) expensive and country to
Quality of Products and Services country research reliability
● Local business - relatively low Factors of Production
● International business - very ● Local business - mobile
high ● International business -
Currency restricted
● Local business - country’s
currency
DEFINITION OF TERMS
● International business - multiple
currencies
PESTEL Framework - the most
Capital Investment
commonly used approach to analyze
● Local business - less capital
the macroenvironment factors or
investment
forces ; mainly used to check and
● International business - more
determine priorities of an organization
capital investment
; represented as Political, Economic,
Rules
Sociall, Technological, Environmental,
● Local business - few restrictions,
and Legal
subject to rules and law taxation
of a single country
VRIO Framework - a framework that
● International business - many
uses four attributes to identify strategic
restrictions, subject to rules, law
resources both tangible or intangible
taxation, tariff and quotas
that will enable the organization to
Nature of Customers
sustain competitive advantage ;
● Local business - more or less
represented as Value, Rarity, Imitability,
same
and Organization
● International business - different

PDCA Cycle - the basic mechanism for

organizational learning ; represented
as Plan, Do, Check, and Act
Environmental Uncertainty - the
degree of complexity plus the degree
of change that exists in an
organization’s external environment

Strategic Myopia - a willingness to

reject unfamiliar and negative
information