Key Aspects of 

Corporate
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Operating Policies and

Gab Arellano
Liezel Veluz
Control
Hanz E. Bollozos
Organization
Forms of Industrial
Organizations
1. One-man Operation
2. Father-son or Manager-assistant
3. Functional Organization
4. Functional Organization With Central
Headquarters and Geographical
Dispersion
5. Multi-divisional Firm
6. Conglomerate
1. One-man Operation
Has a single manager
-who may make vague strategies and plans
-make all decisions on the basis of experience or
limited knowledge
-concentrates all responsibility & authority to himself 
-issues orders to all operating personnel
-knows all the workers personally
-information flows directly to him from individual
workers and vice versa
Has a very efficient type of management usually of 

Paternalistic type
Cannot function well when the number of workers

exceeds 30 – 40.

2.Has aManager-assistant
 single manager but with 1 or more assistants
type -the manager or “boss” retains authority and makes all
decisions
-the assistants’ jobs are merely to transmit orders and
gather information
 This type of organization is still efficient and can grow up to 300 or
400 employees
Generally restricted to having operations at 1 location

It poses a number of dangers:

-the boss losses direct contact with workers, which could affect
motivation
-assistants may vie for popularity or give false report to the boss.
-usually it doesn’t develop the abilities of the assistants

3. Functional
Introduces the concept of delegation of authority


Organization
Functional managers (the delegated authority) make


all operating decisions within their department

 They may participate in the development of strategy
and plans but strategic decisions remain as
responsibility of the CEO or GM
CEO or GM coordinates the work of functional

managers and resolve conflicts

 This organization permits growth up to several
thousand employees but is generally limited to firms
with a small number of closely related products/
services restricted to one location
4. Functional
Organization w/ HQ and
Geographical Dispersion
 This organization is an extension of the 3rd form but permits
manufacturing or sales operations in 2 or more locations
Each geographical manufacturing plant or sales office has its own

production or sales manager directly responsible to the

production or sales manager in its central headquarters
All major strategic plans and decisions are made at the HQ

Only the routine operating decisions are delegated to the field

functional managers
Some very large companies with tens of thousands of employees

operate efficiently under this form

However effectiveness begins to lose once product lines of the firm

become too numerous or varied




5. Multi-divisional Firm
 This organization has separate divisions for each product line or
geographical location
 Each division has its own functional organization with its own GM

 Central HQ management maintains temporary responsibility for the

delineation of the goals of individual division

 Division managers are responsible for developing their own strategies

and long-range plans subject to approval of HQ

 Its division’s strategies and long-range plan should be in line with the

total corporate commitment and objectives

 HQ allocates resources among the divisions and seeks coordination

between the divisions

 ROI is the overriding criterion for expectation from each division

 HQ can exercise to reduce or eliminate divisions with declining

performance
 Many multinational firms have “divisions” which are separate

corporations themselves



6. Conglomerate
 This organization has central HQ that only maintains
financial control over a number of wholly-owned
companies.
Each subsidiary has different product line and marketing

system
Each subsidiary acts independently in setting its goals and

in developing its plans and strategies

Each subsidiary controls its own funds and makes its own

investments
HQ management’s major role is selecting the CEO of each

subsidiary and requiring a certain return on capital or

achievement of some corporate goal



Organizational Structure
Companies may fall into a variety of degrees and
combinations from among the given 6 forms of 
organizational structure
Each grows naturally out of the preceding one as the firm

becomes larger and more complicated leading to

changes in the organizational structure
Reorganization sometimes is needed in an organization

and there is a need to change its organizational structure

Organizational charts is usually required to effectively plan

and analyze alternative organizations

Operating Policies
Two Types of 
Business Policies
Ø Major Business Policy
- deals with the fundamental nature of the company, which
set the general directions in which the firm is expected to
move
Ø Operating Policies
- guides to decision-making for effective, efficient, and 
smooth operation of the organization
- provide a value system and personality to an organization
Operating Policies
 Provide a value system and personality to an
organization
 Take the form of statement which tell
managers how they should act in specific
frequently-recurring situations
 They are usually confused with rules and
procedures
It has been the trend for well-managed firms

to put their policies down in writing


Some advantages in writing
down
 policies
Greatly promotes delegation of authority
 There will be less delays in obtaining decisions
Promotes consistency and reduce arbitrary bases

of decisions
Supports continuity

Increases the ability of the different levels of 

management to cooperate with each other

Reduces misunderstanding among the different

levels of management thus improving morale




Some precautions about
written
 policies
Highly confidential company policies should be
protected from being exposed to competitors or
other threats
 There should be a periodic review of all the policies
because their effectivity could remain long after
they have become obsolete
Avoid writing policies that might permit insufficient

discretion to decision-makers making them

inflexible



Managerial Control
of Operations
Managerial Control of 
Operations 4 Step
1. Standard of performance is established
Process:
2. Actual performance is measured in relation
to the standards
3. Performance information is channeled to the
person responsible for controlling that
operation
4. Where discrepancies between standards and
performance occur, corrective action is
initiated
Managerial Control of 
Operations 4 Step
Process:
Establish standards of performance

Measure actual performance vs.

standards

Performance information is channeled

to the person responsible for control
Maintain status
of that operation
quo

Determine need for corrective actions Change the

deviation

Change
standards
Management
Information Systems
What is M.I.S.?
M.I.S. is an integrated information system, which is
used to provide management with needed
information on a regular basis . It is needed to
manage an organization efficiently and effectively.
It is distinct from other information systems in that

they are used to analyze operational activities in the

organization
Originally, M.I.S. doesn’t necessarily mean it must be

computerized, but nowadays M.I.S. and computers

are identified with each other. Depending on the
technology acquired, a small business organization
today can set-up an automated or semi-automated
M.I.S. with just a single affordable PC
Why Buying a PC Makes Business
Se ns e Tod ay
About 30 years ago, before
the advent of the PC,
computers were very
expensive and it was very rare
even for large corporations in
developing countries, to justify
the installation of a
computerized M.I.S. That era
was ruled by IBM and their
mainframe computers. These
computers would often take
up whole rooms and require
teams to run them.
Why Buying a PC Makes Business
Se ns e Tod ay
With the proliferation of the PC
in the market, it began to
compete with mainframes and
mini-computers and accelerated
the process of decentralizing
computing power from large data
centers to smaller offices. At first,
there were still few SMEs who can
afford to buy PCs for their
business but the price of the PC
continued to go down. Then came
also powerful applications and
rapid-application-development
software that made computerized
M.I.S. an ever more affordable
alternative.
Why Buying a PC Makes Business
Se ns e Tod ay

 Today, as the complexity of the technology

continue to increase and the costs
decreased, we find technologies such as
interconnecting wireless networks, high
speed mobile cell phones, and the popular
internet, already at the fingertips of many
small business entrepreneurs.
Some examples of what a single PC can do
for a small business:
do automatic calculations
store data

using the lowly spreadsheet can

prepare a simple payroll, GL etc.
keep track of expenses

prepare communications

provide owner with many financial analysis tools

download from the internet free business applications

reduce manpower and other functions that help the

business operation effective and efficient



Thank 
 You.