Magdangal, Imee L.

BSMA-1101

Case 4. PONCIANO RETAILING COMPANY: Yesterday

Mr. Ponciano Samonte was 25 years old when he organized his business firm, Ponciano
Retailing Company. He asked Danny, the younger brother of his high school classmate, to
join him in his newly formed business. As the years passed, the firm made good in the
grocery retail business. Together, Ponciano and Danny established one branch after another.
Within a span of 20 years, 19 branches were established throughout Central Luzon and
Cagayan Valley. 

The total number of employees reached 405 and everyone showed much respect to the
leadership abilities of the two pioneers. Ponciano and Danny worked in a mutual trust with
each other. Ponciano always consulted Danny on several important aspects or running the
business. Danny was always busy training personnel on several aspects of managing a branch
so there has never been a shortage of managers. Because of his loyalty and ability, Danny was
well taken care of by Ponciano. He receives an executive salary that was above industry
standard, plus allowances and medical benefits. He is provided with an executive car. He is
authorized to make decisions on operational matters. To assist him in his task, Danny trained
two junior executives.

All went well until Ponciano died and full ownership and control passed to Ponciano’s
oldest son, Patrick. What Patrick did was to introduce measures to centralize decision-
making. Previously, the store managers had the authority to determine the types of
merchandise to carry, the quantity, and the timing of purchase. The recruitment and training
of store personnel were functions exercised by the store managers. The above functions, as
well as some other tasks, are now performed by the top management through a staff in the
central office. The changes introduced effectively reduced the authority and influence of the
store managers. Danny’s authority was also greatly reduced.

Just a month after the decentralization order was implemented, Danny felt the
demoralizing effect on the managers and employees assigned to the branches. sales dropped
by two percent and a number of key employees started to make moves to look for suitable
jobs elsewhere. the rate of absences and tardiness also began to go up. Danny was alarmed by
the situation and he informed Patrick about the strong possibility of negative growth for the
company. Patrick told Danny not to worry because he thinks it is easy to replace those w ho
will leave.
Questions:

1. What do you think of the reaction of the employees regarding the decentralization
policy of Patrick?
2. Do you consider the decentralization policy as a big mistake? Why or why not?

Answers:

1) The reaction of the employees regarding the decentralization policy of Patrick was
highly anticipated and expected by top management as Patrick thinks it is easy to replace
those who will leave. Since most of Patrick’s employees have worked in the former
structure, it is uncomfortable and very difficult for them to transfer to the new system of
management. In this case a healthy dialogue between the top management and
employees must be facilitated by Danny in order to give Patrick a proper venue to
laydown, present and explain the new policy and also for the employees to express their
thoughts on the new policy.

2) Decentralization policy is an organizational structure by which daily operations and

decision making responsibilities are delegated by top management to middle and lower-
level managers within the organizations, allowing the top management to focus more on
major decisions. Decentralization can also empower employees by having more
autonomy to make their own decisions. Giving them a sense of importance and making
them feel as if they have more input in the direction of the organization. It was just a
mistake that Patrick did not execute the policy properly.
Case 5. PR MOTORCYCLES: Till We Meet Again
Miss Amelia Rivera was a very effective training officer in one of the biggest appliance
dealership in the Philippines. She was satisfied with her job not only because of the pay she
receives monthly, but also because the top management recognizes her value to the
organization.

One day, while in a birthday party, she was introduced by her father to a long time friend,
Mr. Pedro Reyes, who happens to be the president of a large motorcycle dealership. The
company operates branches in all the provincial capitals throughout the Philippines. When
Mr. Reyes heard about Amelia’s job, he offered her a bigger job in his company. The job offer
was a HR manager and it comes with twice the salary she was receiving from her current
employer.

Amelia’s father advised her to accept the offer and after a week, she began working for
Mr. Reyes. With a complementary staff of five subordinates, she proceeded to perform her new
job with enthusiasm. Through written memos and personal calls, she laid out the HR policies
to the twelve regional managers of the company. Eleven of the regional managers religiously
observed and implemented the HR policies, except Mr. Sotero Mantic who was assigned in
Northern Luzon.

On one particular weekend, the president called all the regional managers and Amelia to
a meeting to discuss the company’s HR policies. Amelia was asked to make a report but
before she could finish, one aspect of her report was criticized by Mr. Reyes. Amelia took the
matter lightly, but as if on Mr. Reyes’ cue, Mr. Mantic began to show disrespectful behavior
towards Amelia. This he did even in front of other managers. One of the managers told
Amelia that Mr. Mantic is a bright fellow but he is not high performer, and he thinks highly of
himself, and he feels he is indispensable to the company.

Mr. Reyes considers the regional managers as the workhorses of his company and so he
provides them will all incentives, financial or otherwise that he can give them. Amelia
believes that this is the main reason why Mr. Mantic behaves as he does. During the past few
months, Amelia tried hard to win the respect of Mr. Mantic, but all her efforts failed. One of
the Amelia’s subordinates reported to her that Mr. Mantic told her that HR work is a waste of
company funds.

After some weeks, Mr. Reyes related to Amelia that henceforth all recommendations for
promotion of any employee would emanate from the HR department. After a few months,
however, Mr. Mantic recommended one of his subordinates for promotion and it was
approved by Mr. Reyes without the knowledge of Amelia. When Amelia was informed by
one of her staff members about the promotion, she filled her resignation the next day.
Questions:
1. What, if any, did the president failed to do?
2. Do you agree with Amelia’s action?

Answers:

1) Mr. Pedro Reyes failed to do when he took the responsibility that Ms. Amelia Rivera
should have as the head of the HR department. It was a gross disrespect on the part of
Ms. Rivera. Mr. Reyes could have allowed Ms. Rivera to take action on the matter as it
was the latter’s responsibility. The president failed also to consider the interest of a
person who always thinks highly of himself and a high performer, when he is not. And as
a result he did fail to consult Amelia without her prior concern.

2) Amelia was just right in taking her actions confidently that she was not given a prior
concern as an HR manager approved such promotion done by the president himself.
Knowing the fact that Amelia was being hired for such decision, she should have been
informed regarding with that. And if I were on Amelia’s shoes I would also do the same,
realizing why should I stay longer in a position where no one really needs my
experienced.
Case 6. OSPA CONTRUCTION: I’ll Be Back
Mr. Oscar Pascua hired his niece Ofelia to help him manage his construction business.
He assigned Ofelia to do administrative work. She enjoyed doing the various task she was
ordered to perform. Positive interactions with employees kept Ofelia busy and contented with
her work. She thought engineers, foremen and construction workers are people who easily
understand instructions. For instance, when she asked them to fill out the forms she
distributed to each one of them, they complied without much fuss.
Mr. Pascua has a sister, Milagros, and she is operating her own entertainment business. It
was in her fold that some big stars in movies and television got their training and involvement
in the world of show business.
When Milagros saw how orderly the administration of Oscar’s business was, she asked
Oscar if she could “borrow” Ofelia for a while. Obviously, Milagros wanted the
administrative aspects of her business straightened out. Ofelia was only too glad to join her
aunt Milagros. She thought that after doing real work, she needed a break from her stint in the
construction business.
When Ofelia began to work with her aunt, she found out that there are many things she
should attend to. For Instance, employee records are not complete, and company policies and
procedures are not well documented. As a result, it is difficult to determine employee
performance.
When Ofelia distributed the required forms to employees and the talents who are
undergoing training, she noticed that they were not too eager to accomplish them. After two
days, the janitor approached her and asked if she would dispose the contents of the
wastebaskets even if the form she distributed are in them.
Ofelia tried hard to contain her anger. After a while, she regained her composure and
asked herself, “What kind of people are they? I wish I’m back at my former job.”
Questions:

1. Do you think the situation is hopeless for Ofelia?

2. What will be your advice to her?

Answers:

1) I think that the situation of Ofelia is a bit hopeless since she thought that in the
entertainment business is a less difficult than her former job. She accepted it without
any hesitations. She didn’t make a brief research about entertainment business,
unluckily her present job was worse than she can ever thought. Ofelia is
hardworking person and she’s confident and enjoys her work, but when you’re not
into the kind of a thing job you must not accept it if you do not have a proper
training and seminars. Before you get a job you must know first how it will be, what
kind, and who are the people or employees you’re going to work with. Sometimes it
is better to know the situation first before entering.

2) I will advice Ofelia to go back to her former job at the construction firm because she
is more productive in working with his uncle. She could just tell her aunt to have a
new administrator, a more experienced administrator in entertainment business.
Since Ofelia was assigned to do administrative work she must know how to
cooperate with different level of people especially in entertainment business. She
must have more patience and a different level of interaction to those people or
employees.
Case 7. HIT AND MISS MANUFACTURING: A Star is Born
The head of the HR Department, Atty. Mila Bravo was directed by the company
president to act as leader of a committee whose task is to revise and update the current
compensation scheme of the company.
The president designated the following as members of the committee.: the
accountant, the executive secretary, an employee in one of the operating units, an officer of
the labor union, the internal auditor and a representative from the public.
During the first meeting, the seven members were all present. The president made a
briefing regarding the purpose of the group, the circumstances that lead to the formation of
the group and his expectations about the group’s output.
The group proceeded to determine the various factors relevant to the determination
of the rates of the various jobs. Most of the members of the committee, however, cannot
devote the time required to finish the job within the time frame indicated by the president. It
turned out later that it was not only time that hinders the committee’s effectiveness. The first
two meetings were held without much fuss. Everybody was given the opportunity to air his or
her views about the various matters forwarded for discussion.
For one reason or another, the accountant failed to appear in the succeeding
meetings. He never attempted to explain his position to the committee leader or to any
member, but his body language indicated that he was too busy doing more important concerns
for the president and the board of directors. He tried to communicate with the public
representative asking for information about developments in the committees work. Outside
the meetings, he indicated to one member his objections to some of the matters that were
deliberated and approved by the committee. As the meetings progressed and without his
active participation, he made piecemeal reports to the president.
When the committee submitted its final report, the president was not satisfied and he
voiced his objections that were clearly the objections of the accountant. The other members of
the group were dismayed about the actions of the accountant and they vowed not be
participate again in whatever committee work where the accountant is assigned as a member.
Questions:

1. What errors have been committed by the committee members? By the president?
2. Who should be held responsible for the errors?

Answers:
1) The errors that have been committed by the committee members are which they cannot
devote the time being required to finish within the time frame given by the president.
The president was not convinced by the output and this makes him dissapointed. There
was no unity in working the assigned task given to the committee members.
The president’s error was designated a person in one particular position without asking if
they can really do their part in doing the assign job.
The accountant has also big mistake because he did not explain the reasons why he did
not attend the meeting during the discussion of the matter as well as did not considered
what would be felt by his/her co-committee without his participation in doing the work.

2) For me the one who should be responsible for the errors are the committee members and
the accountant because they did not make an effort and a way in working the assigned
task given to them in a successful one. We can’t just pinpoint the accountant for having a
fault. Each of them committed a mistake. Though the president committed an error still it
wasn’t his/her responsibility because he/she is the one give the task it is on his/her
subordinates on how it will go through
Case 8. KNIGHTS OF COLUMBUS: Stranger on the Shore

Ernie is a very likable person. When he passed the board examination for electrical
engineers as a top notcher, he applied for a teaching job in the state university where he
obtained his bachelor’s degree. He and some former classmates were hired by the university.
Ernie enjoyed teaching and it was in the course of his employment when he finished
his doctoral studies in engineering. He was elected vice president of the national association of
electrical engineers. Within ten years, he was appointed dean and then vice president of the
university. After twenty years of excellent performance in his job, he was installed as president
of his alma matter.
It was not very hard for him to perform the job of the president because of his long
years of association with the university, first as a student and later as a professor. Some of the
professors occupying critical positions are his friends. His subordinates think of him as one who
is not only respected in the academic community, but one who is fair and honest in his dealings
with people. They supported him in many activities and projects including the social affairs he
sponsored. During his term, the university enjoyed a period of academic excellence.
A few months after Ernie retired from the university, he was elected grand knight of
the council of the Knight of Columbus. His position is the equivalent of the CEO of a private
firm. He was very enthusiastic in his first month in office. Later, he found out that managing the
council is not as easy as managing the state university.
Of the 200 members of the council, not more than 30 are regularly attending the
monthly meeting. Ernie finds it hard to improve the number of active members. He could not
even get the required number to attend the necrological services for deceased members.
Ernie is now thinking hard to find a solution to his problem.
Questions:

1. What could be the reason why Ernie is not very successful in his current position?
2. What must Ernie do?

Answers:
1) If we can observe, during Ernie’s previous job as a university president his subordinates
think of him as one who is not only respected in the academic community, but also one
who is fair and honest in dealings with his people. He was also supported by his
subordinates in the activities he wanted to implement. But as we can notice his present
job, the members of the council are not active, in a sense that they didn’t have regular
meetings. That’s why Ernie was having a difficulty in his current position since he can’t
directly consult his members and also implement what he wanted for the company.

2) Ernie must layout policies and regular absences with the council members. He must
provide specific consequences such as habitual absences in their meetings. Through this,
he will be able to monitor the performance of each members of the council and also to
promote policies and programs for the company with member’s major approval.
Case 9. SWALLOW MARKETING CORPORATION: The Long and Winding Road
Mr. Rudy Castelo was hired by Swallow Marketing Corporation as counter sales person of
San Fernando branch six months ago. His official working hours begins at 9:00 AM and ends
at 5:00 PM from Monday to Friday. It is almost always that he serves customers till 6:00 PM.
He does not complain and he feels happy that his unit is performing.
An evaluation of the number of units sold by Rudy’s unit indicated a 50 percent increase for
the past six months. That period coincides with the period that Rudy had been working for the
company.
There were four sales person in the branch who were able to sell 80 units of the company’s
product during the six months prior to Rudy’s hiring. When Rudy came in, he sold 40 units
and the other four duplicated their previous six months’ output. This brought the total sales of
the unit to 120.
The four sales person have been working for the company for over two years and each
receives monthly salary of P20,000. As a new recruit, Rudy’s salary is pegged at P11,000 per
month. Rudy can only hope for an increase after salary reviews which are made by top
management every 2 years.
After six-month stint, Rudy has only become entitled to the only benefit, the 13 th month pay.
He has yet to earn his vacation and sick leave benefit
Rudy’s supervisor is happy that his unit was able to sell more with Rudy’s help. His concern
now is to keep Rudy fully motivated and to keep the competitors away from hiring him.

QUESTION: If you were Rudy’s supervisor, what will you do?

How individuals and groups do their job is the main concern of those managing
organization. The role of the Management is to move an organization towards its purposes or
goals by assigning activities that organization members perform.
If I were Rudy’s supervisor, I will do the same but not only to him but also with my other
employees. I will give them rewards and benefits which will serve as motivation to improve
their performance. They will be eager to be more productive if they have something to look
forward to. As a supervisor, you must be fair to all your subordinates to prevent conflicts
between them. When you treat all of your employees fairly you create stronger and
better relationships with them based on trust and respect.
If Management ensures that all the activities are designed effectively, the production of each
individual worker will contribute to the attainment of the organizational goals.
Case 10. TSAR NICHOLAR TRADING AND FINANCING: Let It Be Me
The business established by Mr. Eduardo Nicolas started small buy within 20 years, it grew
into an appliance trading and financing enterprise with 60 branches manned by about 2000
employees.
Mr. Nicolas believes that the spoken word is more powerful that the written means, and he
speaks directly with any of his subordinates for whatever he wants to communicate. His
business is effectively a single proprietorship, and as such, he decides on issues whether
major or minor.
Mr. Nicolas stays close to the fiver senior managers who comprise his operation team. He
meets them at least once a month and talks to any of them every now and then through the
medium of cell phone. These managers report directly to him. An executive assistant helps
him in the various requirements of his job, including coordinating the activities of the senior
managers.
The business consistently maintains an informal approach in the management of its activities.
No clearly defined units are introduced unless they are deemed to be absolutely necessary.
The current organizational structure consists of the following:

1. A legal office headed by the legal officer and assisted by seven employees
2. Accounting department, auditing department and finance department with a total
personnel complement of 208 employees. All three departments are manage by the
comptroller.
3. Treasury department with 199 employees headed by the company treasurer. Attached
to this department are the auxiliary units like security and housekeeping.

Each branch maintains its own sales unit but there is no marketing department at the higher
level to oversee the sales activities of all branches.
The head of the various department situated in the head office, the five senior mangers and
the 60 branch managers are responsible for recruiting and training employees at their
perspective units. There is no central HR department to oversee such activities. Recruitment
and training are done with minimal paperwork. Employees are hired without the benefit of job
description and job specification. Communication is mostly verbal.
The structure adapted by the firm has produced good result however, this organizational
approach is responsible for making the company grow from a single branch operation to its
present status. The company’s operations are generally regarded as profitable.
Employee turnover reach an average of 30% buy Mr. Nicolas is not much concerned because
of the sufficient number of applicants applying for work in the company.
Questions:
1. What do you think of the organizational structure of the firm?
2. What difficulties may be anticipated if the current structure is maintained?

Answers:
1) In this case, Mr. Eduardo Nicholas approach to management is informal. He’s
maintaining an informal organizational structure and gladly doesn’t encounter much
of a problem. This organizational structure includes business activities and even the
manner of recruiting and hiring employees. Individuals are assigned into various job
positions while employees are working on their job positions, they interact with
each other and develop some social and friendly groups in the organization. The
informal organizational structure in this case can be easily created automatically for
the main purpose of getting psychological satisfaction especially for doing things
that Mr. Nicholas believed that was right. The existence of this informal structure
depends upon the management style of the company. Hence, it also depends upon
the perceived formal structure because people working at different job positions
interact with each other to form informal structure.

2) The difficulties that may be anticipated if the current structure is maintained are
inconsistency, departmental conflict, poor communication and unclear goals.
When each department functions independently, inconsistency may result. Company
policies and procedures may not be enforced, causing employee dissension and
confusion. Employees who transition to other jobs in the company run into problems
when they behave as they did in their old roles. Departmental conflict is an informal
organizational structure conflicts and power struggles occur when deadlines and
budgets cause a competition against departments. Poor communication among
department leaders could filter down into the rest of the organization. Implementing
good project management practices can also formalize procedures that ensure good
communication. Unclear goals setting a clear company strategy and having each
department align its individual goals to the company helps minimize the problems.
Case 11. PERFECT TASTE BAKERY PRODUCTS: Run For Your Life
Perfect taste bakery products is a company that is already on its 12 th year operation. A line of
bakery products manufactured by the company is delivered to the different marketing outlets
located in five provinces of Luzon.
To facilitate delivery of its product, the company maintains fifteen mini truck. Each delivery
van is manned by a driver and a helper who are both salaried employees. Products are
delivered twice a week on each outlet.
For the past 12 years the company appeared not to have been affected by any conflict either
between management and employees or between employees. This has been so until just
recently the drivers and the helpers of then delivery vans went to see the general manager.
They denounced the manner by which the dispatcher makes delivery assignments. They
complained about the easy routes assigned to drivers whom they thought to be the favorites of
the dispatcher. One of the complaining drivers mentioned that he discovered that the five
drivers and the dispatcher are members of a certain fraternity, another driver is also
complained that the newer vans were assigned to the favorites. Some other issues were also
mentioned.
One of these is the questionable performance report of the dispatcher which indicated high
ratings for the favorites. The complaints are agitated and they became more angry when they
were inform of the performance-based salary adjustments scheduled within 30 days
The general manger promised that he will do something. After a month, there was no
indication that the general manager did anything about their complaints. The complainants,
however noticed that the dispatcher has changed his behavior towards them. He became more
strict with them. It was then that they began to harbor ill feelings toward dispatcher. They
began to talk about how to get even with him.
Questions:
1. Do you think a conflict is already existing?
2. What should have been done by the dispatcher? By the general manager?

Answers:

1) Yes, I think there is already a conflict that existing because of the personal
attachment of the dispatcher to the other five delivery van drivers or the so called
“favorites”. The general manager must either replace and hire a new dispatcher or
discipline him and give the appropriate sanction for the wrong doings of the
dispatcher.

2) The dispatcher must divide the routes evenly every week and assign it by a different
driver regularly. He must not focus on giving the easy routes to his friends or else
the complaints may find a way how to extinguish him in his position or something
else that will not be good to him. The general manager must inform the dispatcher
about the complaints about him, or give a warning. If he still does it, the general
manager may suspend him for a few days, for the dispatcher to notice that he really
doing something wrong. If he does it again, after being suspended, the general
manager can have a good reason to fire the disrespectful dispatcher.