Module 2 Entrepreneurial Management Midterm

CSTC COLLEGE OF SCIENCES TECHNOLOGY AND
COMMUNICATION, INC.
CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A
Registrar’s Office: 042 3290850 / 042 7192818 | CSTC IT Center: 042 7192805 | Atimonan Contact Number: 042 7171420
SCHOOL OF BUSINESS AND ACCOUNTANCY
INSTRUCTIONAL MODULE IN
MM 111: Entrepreneurial Management
PRELIMINARIES
Module 2
I. Lesson Number: 1
II. Lesson Title: Nature and Concept of Management
III. Brief Introduction of the Lesson:
Management is the process by which a manager of an organization efficiently utilizes

resources to achieve its goal at minimum cost and maximum profit. When used collectively, the
term management refers to the group of people who are responsible and accountable for
directing the workforce and seeing to it that the organization meets its goal and objectives.
IV. Lesson Objectives:
Upon completion of this module, you must be able to:

 Understand the function/objectives of management;
 Classify the types of business and forms of business ownership; and
 Differentiate line organization from line and staff organization.
COMMUNICATION, INC.
LESSON PROPER
What insights can you get from the photo below? How can you relate the photo in the
business setting?
Source: thefactfactor.com
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COMMUNICATION, INC.
Discussion
7 M’s of Management
The dynamic concepts of management function involve the effective utilization of the
seven M’s of management as follows:
1. Manpower- employees, workers, staff, personnel, supervisors, head, managers
2. Money- operating capital, budget, funds
3. Materials- raw materials, office supplies, inventories
4. Machines- tools, equipment, facilities
5. Methods – strategies, approaches
6. Market- customers, clients
7. Motivations- incentives, bonus, promotions, awards
Functions of Management
Any management concept usually has the following function to accomplish:
1. Planning- the process of setting the objectives to be accomplished by an organization

during time period and deciding on the methods of reaching them.
2. Organizing- the process of grouping and assigning activities and providing the
necessary authority to carry out the activities.
3. Staffing- the process of filling position in the organizational structure with the most
qualified people available.
4. Motivating- the process of getting people to contribute their maximum effort towards the
attainment of the organizational objectives.
5. Controlling- the process of ensuring the achievement of an organizations objectives.
Two essential processes are involved in all these five managerial functions: decision and
communicating.
1. Decision-Making- this is the process of choosing from two or more alternatives. In

planning, for instance, the manager decides among alternative ways of accomplishing
objectives. In organizing, he evaluate different grouping of jobs and pattern of authority
and responsibility. Staffing, motivating, and controlling also require that decision be
made.
2. Communicating- it is impossible to perform the managerial function without

communication, which is the process of exchanging facts, ideas, opinions, and emotions
between two or more persons. The manager must receive much needed information to
be able to plan effectively. The plan must be communicated if it is to be put into action.
COMMUNICATION,
Proper organizing, staffing, motivating, INC.cannot be done without the
and controlling
communication. It must
Registrar’s Office: be /emphasized
042 3290850 042 7192818 | CSTCthat most
IT Center: problems
042 7192805 in Contact
| Atimonan management are actually
Number: 042 7171420
caused by breakdowns in communication.
Forms of Business Ownership
Ownership is defined as a legal relationship between a person and his possession. The
choices of form depends on a number of factors: the type of capitalists/investors, nature and
size of business, length of time to operate, sharing of profits, responsibility for debts, etc.
however, and the legal forms of business ownership are as follows:
1. Single/Sole Proprietorship- a form of business ownership organized and managed by

only one person. It is the oldest and the simplest form of ownership. It can be easily
established with little difficulty. This form of organization is best suited to professional
and service enterprise such as tailoring, beauty parlors, repair shop, landscaping
services, painting contractors, and grocery store.
Advantages:
a. Retention of all profit.
b. Easy formation and dissolution
c. Simple control
d. Minimum capital requirement
Disadvantage:
a. Generates low income
b. Limited management ability
c. Unlimited liability
d. Managerial difficulties
e. Limited amount of capital
2. Partnership- a form of business organized where two or more persons as partner

contribute money, property, or talent to carry on a business with the intension of dividing
the profit among them. A partnership acquires juridical personality upon a written
agreement of partners.
Advantage:
a. Relatively easy formation
b. Better skills and knowledge
c. Higher credit standing
d. Large amount of capital
e. Check and balance
Disadvantage:
a. Easy dissolution
b. Management disagreements
c. Frozen investment
d. Unlimited liability
3. Corporation- it is an artificial created by the operation of law, having legal personality,

right of succession, and powers expressly authorized by law. The corporation may enter
into contract, borrow money, own property, sue, and get sued. Various person through
the purchase of shares of capital stocks hold ownership. Shares are transferred without
disrupting the continuity of the corporation. The stockholders elect directors who
formulate general plans and policies and appoint the officers. The principal
COMMUNICATION,
administrators of the corporation INC.
are the president, vice president, corporate secretary,
and treasurer.
Registrar’s The officer
Office: 042 are
3290850 / 042responsible
7192818 | CSTC ITfor the042actual
Center: 7192805 management of the
| Atimonan Contact Number: corporation.
042 7171420
Advantage:
a. Specialized management
b. Easy to raise capital
c. Limited liability of individual share
d. Flexible ownership
e. Continuity of existence
f. Legal entity
Disadvantage:
a. Organized expenses
b. Government restrictions and supervisions
c. Impersonal employer-employee relationship
d. Lack of personal interest
e. Lack of secrecy.
4. Cooperatives- it is an autonomous and duly registered association of persons, with a

common bond of interest, who have voluntarily joined together to achieve their social,
economic and cultural needs and aspirations by making equitable contribution to the
capital required, patronizing their products and services and accepting a fair share of risk
and benefits of the undertaking in accordance with the universally accepted cooperatives
principles;
(Art.3, PPC, 2008).
a. Open and voluntary membership
b. Democratic control
c. Member economic participation
d. Autonomy and independence
e. Education, training and information
f. Cooperation among cooperatives
g. Concern for community
Common types of Business Organizations
1) Line Organization- direct straight-line flow of authority from the head of organization
down to subordinates; referred to as military type of organization; based on principle of
scalar chain; commonly applied on small organization; authority passes responsibility
directly to his superior.
Advantage:
a. Direct flows of authority
b. Fixed responsibility
c. Easily maintained discipline
d. Flexibility/adaptability
e. Simple chain of command (centralized)
f. Development of all-around executive
Disadvantage:
a. Difficult to secure all-around executives
b. Executive overload with duties
c. Over dependent on the executives
COMMUNICATION, INC.
d. Lacking support from specialists
e. Poor teamwork
2) Line and Staff Organization- line executes and staff advises; utilized the assistance of
experts/specialists; centralized chain of command; preferred by larger organization. Top
executive may rely on the three kinds of staff as follows:
a. General staff- serves the entire organization (HRM.,Maintenance Mgr.)

b. Special staff- assist in specific and highly technical areas (Quality Control Mgr.,
Chemists)
c. Personal staff- intimate relationship with top executive (Secretary. Personal
Assistant)
Advantages:
a. Greater flexibility
b. Greater strength
c. Addition of technical specialists
d. Executive training
Disadvantage:
a. Friction between line and staff officers
b. Over dependent on staff advice
c. Poor human relation
d. Slower decision-making
COMMUNICATION, INC.
Application (Performance Task (40%))
Instructions: Discuss briefly your insight on the following statement provided below.
1. Successful business ownership is not about having a unique product or service; it’s
about making your product stand out even in a market filled with similar items.
(Commend on this view).
2. How do you apply management in your daily life? Write a short explanation.
Assessment (Written Works (20%))
Instructions: Write True if the statement is true, otherwise write False.
1. The COOPERATIVE may enter into contract, borrow money, own property, sue, and get
sued. (F)
2. A PARTNERSHIP acquires juridical personality upon a written agreement of partners.
3. SPECIAL STAFF serves the entire organization (HRM.,Maintenance Mgr.) (F)
4. The MANAGER must receive much needed information to be able to plan effectively.
5. SOLE PROPRIETORSHIP is the oldest and the simplest form of ownership.
References:
 Areola, Eunice Mareth (2017). Entrepreneurship. JFS Publishing services. Manila.
 Medina, Roberto (2010)2nd Edition. Entrepreneurship and Small Business Management.

Rex Book Store.
 Saidali, M. (2015) the Entrepreneurship. Mindshapers co. Inc.

COMMUNICATION, INC.
Lesson No: 2
Lesson Title: A Perspective on Entrepreneurship
Entrepreneurship is a very important component of a capitalist economy like the

Philippines. It thrives in economic systems that support innovation and hard work. When
entrepreneurs become successful, the nation is immensely benefited.
LESSON OBJECTIVES:
At the end of this lesson, you will be able to:
 Discuss the entrepreneurship and economic development;
 Explain the entrepreneur’s Task.
LESSON PROPER COMMUNICATION, INC.
What insights can you get from the photo below? How can you relate the photo in the business
setting?
Source: istockphoto.com
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________________________
COMMUNICATION, INC.
Entrepreneurship and Economic Development
Economic development is a scheme aimed at improving the living standard of national

citizenry. To achieve economic development goals, proper management of the following
elements is necessary:
1. Human resources (labor supply, education, discipline, motivation);

2. Natural resources (land, minerals, fuel, climate);
3. Capital formation (machines, factories, roads); and
4. Technology (science, engineering, management, entrepreneurship).
The Entrepreneurs task
If all the requirements in a capitalist economy are in place, the entrepreneur can assume
his assigned role in the development of the economy. A review of the contributions of
entrepreneurs will reveal that no business, big or small, started without the hand of the
entrepreneur. This made possible because the surviving enterprises are responsible for
providing the following:
1. Product and services for customers and procedures;

2. Employment;
3. Taxes;
4. Demand for suppliers product and services; and
5. Training facilities for future entrepreneurs.
In the attempt to make profit, the entrepreneur performs the following specific functions:
1. To supply the necessary capital;

2. To organized production by buying and combining inputs like materials and labor;
3. To decide on the rate of output, in the light of his expectation about demand; and
4. To bear the risk inherent to the venture.
New Ventures and Long-Term Enterprises
A new venture cannot remain as such forever. The entrepreneur must develop it into a
small business or make it grow into a mature and bigger company if he is to recoup the cost of
opening a new venture and take an advantage of the opportunities presented by a mature
business.
The transition from a new venture to a successful long-term enterprise consist of at least
four major stages. The stage are as follows:
1. The prestart-up stage

2. The start-up stage
3. The early growth stage
4. The late growth stage
The prestart-up stage happen when the entrepreneur start to question the feasibility of an idea,
product, or service.
In the start-up stage, the following activities are undertaken:
COMMUNICATION, INC.
1. Formation of the business;
2. Generation of necessary
Registrar’s Office: 042 capital;
3290850 / 042 7192818 | CSTC IT Center: 042 7192805 | Atimonan Contact Number: 042 7171420
3. Purchase of facilities and equipment;
4. Constructing prototype products; and
5. Testing the market.
The early growth stage follows after establishing feasibility. Activities will be on a small scale,
i.e. selling to limited market with limited resources.
The late growth stage is the final stage before the new venture matures into stable enterprise.
Rewards for Successful Entrepreneurship
The use of any of the factors of production deserves to receive some form of
compensation. The factors referred to as “things required for making a commodity” consist of
land, labor, and capital. If he succeeds, he is compensated for his vision, originality, and bold
undertaking.
Factors of Production Economic Reward Limited Factors for

Rewards Received
land rent Supply and demand
capital interest Industry rates/government
labor Wages/salary Supply and demand

legislation
Entrepreneur profit Skill of entrepreneur
The Entrepreneurs Predicament
In the race for winning the all-important consumers pesos, the business will have to offer
products or services that have certain advantage over the competitions wares.
Entrepreneur 1 COMMUNICATION,
Entrepreneur 2 INC.
Entrepreneur 3
Registrar’s Office: 042 3290850 / 042 7192818 | CSTC IT Center: 042 7192805 | Atimonan Contact Number: 042 7171420 To
Year 1 inactive inactive
be
introduce
innovative
product
Year 2 Introduce inactive
Reap Innovative
Moderate product
profit
Year 3 Reap Introduce
Maximize Moderate Innovative
profit profits product
Year 4 Maximize Reap
Profits profit Moderate
decline profits
Year 5 Profits Maximize
introduce decline profit
innovative
product
ahead again, the entrepreneur will consider offering newer and better innovation. The cycle
continues until one or both find a reason to stop.
Entrepreneurship and Business Size
To many people, entrepreneurship means running a small business. New business

ventures, however, can also be undertaken on large scale. Both small and large business are
confronted by problems that are entrepreneurial in nature.
COMMUNICATION, INC.
To effectively
Registrar’scompete, business
Office: 042 3290850 of |whatever
/ 042 7192818 CSTC IT Center:size must| Atimonan
042 7192805 adapt Contact
innovative approaches
Number: 042 7171420 to
its activities. Example of innovation are the following:
1. Offering business services during Sundays and holidays;

2. Manufacturer and sale of new products; and
3. Selling on a deferred payment scheme.
Application
Social media has been very active in terms of spreading the word about practically
anything and everything. As a budding entrepreneur, how can you take advantage of this trend
to churn out potential opportunities? List down potential business opportunities that you see.
Assessment
TRUE OR FALSE
1. Rent consist hire people, acquire funds and the like.

2. Economic growth is the new process of production.
3. Assembling required resources follows after establishing feasibility.
4. Profit has the advantage of switching to another business.
5. Innovation is effective and efficient utilization of the various resources elements.
6. Developments refers to the process by which the ideas and principles generated from
the stage of invention.
7. Invention refers to the discovery or devising of new products and process.
8. The person who undertakes entrepreneurial activities is called entrepreneur.
9. Entrepreneurship refers to the economic activity of a person who starts, manages, and
assumes the risk of a business enterprise.
10. The early growth stage follows after establishing feasibility.
COMMUNICATION, INC.
References:
 Areola, Eunice Mareth (2017). Entrepreneurship. JFS Publishing services. Manila.
 Medina, Roberto (2010)2nd Edition. Entrepreneurship and Small Business Management.

Rex Book Store.
 Saidali, M. (2015) the Entrepreneurship. Mindshapers co. Inc.
Prepared by:
ANNILITO A. ANONUEVO
Instructor
Reviewed by: Approved by:
NONA BHEL S. LIMBO, DBA JESS JAY M. SAJISE, DBA

Dean, School of Business and Accountancy Vice President of Academic Affairs

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CSTC COLLEGE OF SCIENCES TECHNOLOGY AND

SCHOOL OF BUSINESS AND ACCOUNTANCY

II. Lesson Title: Nature and Concept of Management

III. Brief Introduction of the Lesson:

Management is the process by which a manager of an organization efficiently utilizes

IV. Lesson Objectives:

Upon completion of this module, you must be able to:

1. Manpower- employees, workers, staff, personnel, supervisors, head, managers

2. Money- operating capital, budget, funds

3. Materials- raw materials, office supplies, inventories

4. Machines- tools, equipment, facilities

5. Methods – strategies, approaches

6. Market- customers, clients

7. Motivations- incentives, bonus, promotions, awards

Any management concept usually has the following function to accomplish:

1. Planning- the process of setting the objectives to be accomplished by an organization

5. Controlling- the process of ensuring the achievement of an organizations objectives.

1. Decision-Making- this is the process of choosing from two or more alternatives. In

2. Communicating- it is impossible to perform the managerial function without

Forms of Business Ownership

1. Single/Sole Proprietorship- a form of business ownership organized and managed by

2. Partnership- a form of business organized where two or more persons as partner

3. Corporation- it is an artificial created by the operation of law, having legal personality,

4. Cooperatives- it is an autonomous and duly registered association of persons, with a

Common types of Business Organizations

a. General staff- serves the entire organization (HRM.,Maintenance Mgr.)

Application (Performance Task (40%))

Assessment (Written Works (20%))

Instructions: Write True if the statement is true, otherwise write False.

 Areola, Eunice Mareth (2017). Entrepreneurship. JFS Publishing services. Manila.

 Medina, Roberto (2010)2nd Edition. Entrepreneurship and Small Business Management.

 Saidali, M. (2015) the Entrepreneurship. Mindshapers co. Inc.

Entrepreneurship is a very important component of a capitalist economy like the

Entrepreneurship and Economic Development

Economic development is a scheme aimed at improving the living standard of national

1. Human resources (labor supply, education, discipline, motivation);

The Entrepreneurs task

1. Product and services for customers and procedures;

1. To supply the necessary capital;

New Ventures and Long-Term Enterprises

1. The prestart-up stage

Rewards for Successful Entrepreneurship

Factors of Production Economic Reward Limited Factors for

land rent Supply and demand

capital interest Industry rates/government

labor Wages/salary Supply and demand

Entrepreneur profit Skill of entrepreneur

The Entrepreneurs Predicament

Year 2 Introduce inactive

Year 3 Reap Introduce

Maximize Moderate Innovative

profit profits product

Year 4 Maximize Reap

Profits profit Moderate

Year 5 Profits Maximize

introduce decline profit

Entrepreneurship and Business Size