Organization and Management: Rogie Ramos Francia, LPT

Organization and Management
(Q2)
Rogie Ramos Francia, LPT

Table of Contents
Module 5: Staffing
Introduction 59
Learning Outcomes 59
Lesson 1. Concept and Nature of Staffing 60
Lesson 2. Process of Recruiting, Selecting, and Training of Employees 60
Lesson 3. Guidelines on Compensation/Wages, Performance
Evaluation/Appraisal, and Reward 65
Lesson 4. Employee Relations and Employee Movements 67
Assessment Tasks 69
Summary 73
References 73
Module 6: Leading
Introduction 74
Lesson 1. Definition and Nature of Leading 75
Lesson 2. Motivation 76
Lesson 3. Leadership Theories and Styles 82
Lesson 4. Communication 87
Assessment Tasks 88
Summary 92
References 93
Module 7: Controlling
Introduction 94
Lesson 1. Nature of Controlling 94
Lesson 2. Control Methods and System 96
Lesson 3. Application of Management Control in Accounting and
Marketing Concepts and Techniques 99
Assessment Tasks 103
Summary 106
References 106
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Module 8: The Different Functional Areas of Management
Introduction 107
Lesson 1. The Five Functional Areas of Management 108
Summary 113
References 114
Module 9: Special Topics in Management

Introduction 115
Lesson 1. Starting a Small-Family Business 115
Summary 123
References 123
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MODULE 5
STAFFING
Introduction
After deciding on the type of the organization structure that will best serve the interest
of the business firm, the next step that will have to be made is to fill the identified positions
with the most qualified persons available.
Medina (2015), also mentioned that business organizations are very sensitive to
whatever staffing errors are made. Placing the wrong person in a highly specialized position
like quality control, for instance, may bring enough damage to the firm to cause its bankruptcy.
Yet, this refers to a single error in staffing.
There is no doubt that effective staffing places the company on a competitive stance.
Effective staffing may not make a company number ne among competitors, but ineffective
staffing will make the company’s survival highly improbable (Medina, 2015).
Learning Outcomes
At the end of this module, the learners should be able to:

1. discuss the concept and nature of staffing (ABM_AOM11-IIa-b-20);
2. analyze the process of recruiting, selecting, and training employees (ABM_AOM11-IIa-b-
21 and 22);
3. examine the functions and importance of compensation, wages and performance
evaluation, appraisal, reward system, employee relations and movement (ABM_AOM11-
IIa-b-23, 24, and 25); and
4. create a job analysis for accountant position of his/her future business.
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Lesson 1. Concept and Nature of Staffing
Cabrera et al (2016) defined Staffing as the

filling up of all organizational job positions and
keeping these positions filled with the persons who
are most qualified to do the job.
The definition of staffing according to

Medina (2015), it is a Management function that
determines human resources needs, recruits,
selects, trains, and develops human resources for Source:https://www.aceboston.net/2020/
jobs created by an organization. 03/09/heres-why-is-staffing-important-in-
organizations/
Systems Approach to Staffing (Staffing Procedures) is the step by step of filling up
jobs positions in organizations.
Variables to consider in the system approach to staffing according to Cabrera et al

(2016) are:
1. Numbers and Kinds of Human Resources Needed
2. Open Managerial and Non Managerial Positions
3. Potential Successors to open position among others
Management Successions / Replacements Chart contains the names of potential

successors to managerial positions.
Lesson 2. Process of Recruiting, Selecting, and Training of Employees
According to Medina (2015) the Staffing process consists of the following series of
steps:
1. Human Resources Planning
2. Recruitment
3. Selection
4. Induction and Orientation
5 Training and Development
6. Compensations / Wages Performance Appraisal (Performance Evaluation)
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7. Employment Decisions
8. Separations
He explained, Human Resource Planning the planned output of any organizations will
require a systematic deployment of Human Resources at various Levels. The goal is to make
sure that the most qualified people are always in place when needed by the company. The
Manager need to involve
himself with human resource
planning. This will be done in
conjunction with the efforts of
the human resource officer.
Human resource planning
Source: https://www.allegiancestaffing.com/blog/important-
may involve the following
steps-in-staffing/ (2018)
activities:
1. Forecasting – is an assessment of future human resource needs of the organization

in relation to its current capabilities.
2. Programming – means translating the forecasted human resource needs to

personnel objectives and goals.
3. Evaluation and Control – refers to monitoring human resource action plans and
evaluating their success.
The foundations of HR Planning are:
1. Job Analysis studies what is done in a job and why
2. Job Description details the duties and responsibilities of a job holder,

consisting of the following: job title, job code, department boss/supervisor, job
summary, and duties/responsibilities
3. Job Specifications list the qualities required of a job holder
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Recruitment refers to attracting qualified persons to apply for vacant positions in the
company so that those who are best suited to serve the company may be selected.
2 Types of Recruitment according to Cabrera et al. (2016):
1. External Recruitment is the recruitment of applicants for filling-up vacant

positions from outside the company. The following are methods of External
Recruitment:
1.1 Advertisements 1.6 Educational Institutions

1.2 Unsolicited Application 1.7 Professional Associations
1.3 Internet Recruiting 1.8 Labor Unions
1.4 Employee Referrals 1.9 Public / Private Employment
1.5 Executive Search Firms 1.10 Competitors
2. Internal Recruitment is the recruitment of applicants for the filling-up vacant

positions inside or within the company.
NOTE: For entry level positions, HR Manager will rely on News Paper
Advertising, Schools, and Referrals. For manager level positions, reliable
resources are Current Employees, Recruitment Firms, and Competitors.
Cabrera et al. (2016) defined Selection as the process of choosing individuals who
have required qualifications to fill present and expected future job openings. They also added
that Selection process is
quite hard as there is a
difference between what
individuals can do, at
present, and what they will
do in the future. It may be
simple or complicated
depending on the costs of a
Source: https://tinyurl.com/y5dqkj9c (2017) wrong decision. Example,
in the case of laborer position is easy to make decision but when the position under
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consideration involves special skills like an airplane pilot, a more elaborate process is
undertaken.
Ways of Determining the Qualifications of a Job Candidate (Medina, 2015):
1. Application Blanks- Provides information about a person. Ex: Biodata,

Resume or Portfolio
2. References – Character reference from previous employers, co-workers,
teachers, etc.
3. Interviews – Asking series of relevant questions to the job candidate.
3.1 Structured – Ask applicant to answer a set of prepared questions
3.2 Unstructured – No guide and may ask questions freely
3.3 One on One
3.4 Panel Interview
4. Test – Involves an evaluation of the future behavior or performance of an
individual
Types of Test:
1. Psychological Test is an objective, standard measure of a sample behavior

of the individual. It is further classified as follows:
1.1 Intelligence Test - a test designed to measure the ability to think
and reason rather than acquired knowledge.
1.2 Proficiency and Aptitude Test – measures a person’s capacity or

potential ability to learn.
1.3 Performance Test – measures a person’s current knowledge of a
subject by means of task or activity.
1.4 Personality Test – measures personality traits such as dominance,
sociability, and conformity.
1.5 Interest Test – measures a person’s interest in various fields of
work.
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2. Physical and Medical Examination – is done to assess the applicant’s
physical health is adequate to meet the job requirements.
Induction and Orientation – After an applicant is finally selected and subsequently

hired. According to Medina (2015) the new employee will undergo Induction – it means, he is
provided with the necessary information about the company. His duties, responsibilities, and
benefits are relayed to him. Personnel and health forms are filled out, and passes are issued.
The company history, its products and services, and the organization structure are explained
to the new employee; and Orientation – the new employee is introduced to the immediate
working environment and co-workers. Location, rules, equipment, procedures, training plans,
and performance expectations are discussed. The new employee also undergoes the
“socialization process” by pairing him an experienced employee and having a one-on-one
discussion with the manager.
Training and Development – If the newly-hired (or newly-promoted) employee is

assessed to be lacking the necessary skills required by the job, training becomes a necessity.
Cabrera et al (2016) defined Training

is learning given by organizations to its
employees that concentrates on short term
job performance and acquisition or
improvement of job-related skills. While
Medina (2015) explained Training programs
may be classified into the following: Source:https://kissflow.com/hrprocess/employee-
training/employee-training-and-development/ (2018)
1. Training Programs for Non-Managers. This type of Training is directed to non-

managers to increase knowledge and skills to perform a particular job. The four
methods under this type are:
1.1 On the Job training
1.2 Vestibule School
1.3 Apprenticeship Program
1.4 Special Courses
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2. Training Program for Managers – The training needs of managers may be classified
into four areas:
2.1 Decision Making Skill
2.2 Interpersonal Skills
2.3 Job Knowledge
2.4 Organizational Knowledge
Development is the learning given by organizations to its employees that is geared

towards the individual’s acquiring and widening of his/her skills in preparation for future job
appointments and other responsibilities (Cabrera et al., 2016).
Developing employees is a part of the organization’s career management program

and its goal is the matching of the individual’s development needs with the needs of the
organization.
The different learning principles include: modelling, feedback and reinforcement,

massed vs. distributed learning, goal setting, taking into account individual differences, active
practice, and repetition.
Both training and development are very essential to the success of today’s
organizations.
Lesson 3. Guidelines on Compensation/Wages, Performance

Evaluation/Appraisal, and Reward
One of the important aspects of staffing is employee compensation. Compensation

are all forms of pay given by employer to their employees for the
performance of their jobs. Certain factors determine the salary
or wages paid to employees (Medina, 2015);
1. Performance – The achievement of the organization’s

objectives will depend on the individual and collective
performance of its employees.
Source: https://tinyurl.com/yyvbjntm (n.d.)
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2. The relative worth of each job – To determine a relative worth, job evaluation is
undertaken. This activity allows organization to rank jobs and determine their hierarchy
of importance across all jobs in organization.
3. Labor Market Conditions and Prevailing Wage Rates – Some jobs may be similar
with other jobs. Some of them, however, will be paid higher rates because of bigger
demand for them.
4. Types of Pay System Used – Difference in pay among similar jobs in and out of the
company depend on the type of pay system adapted. Wages may vary because of
seniority, company productivity, and profit sharing considerations.
Compensation Types according to Cabrera et al. (2016):
1. Direct – refers to salaries, incentive pays, bonuses, and commissions.

2. Indirect – given by employers such as travel, educational, health benefits,
and others.
3 Non- Financial – includes recognition programs, being assigned to do
rewarding jobs, enjoying management support, ideal work environment, and
convenient work hours.
Compensation Bases include piecework, hourly, daily, weekly, and monthly basis.
Performance Evaluation is a process done, usually once a year, to measure the work
performance. Administrative purpose of performance evaluation is used as basis for decisions
related to compensation, promotions,
transfers and terminations. The
Development purpose of performance
evaluation provides information about
employees’ performance, and strengths
and weaknesses that they may use as
basis for deciding their training and
development needs.
Source: https://tinyurl.com/y32sbh47 (2018)
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Performance Evaluation / Appraisal, it is the measurement of employee performance.
The purposes of performance appraisals are as follows (Medina, 2015):
1. to influence, in a positive manner, employee performance and development;
2. to determine merit pay increase;
3. to plan for future performance goals;
4. to determine training and development needs; and
5. to assess the promotion potential of employees.
Employment Decisions. After evaluating the performance of

employees (managerial or otherwise) the management will now be
ready to make employment decisions. These may consist of the
following: Monetary Rewards. Promotion, Transfer, and Demotion.
Source: https://tinyurl.com/yyheqtmr (n.d.)
Rewards – monetary or non-monetary, are given for merit service or achievement by
employers to their employees.
Separation It is either a voluntary or involuntary termination of an employee’s services.

In the case of a made voluntary termination, the organizations management must find out the
real reason. If the presence of a defect in the organization is determined, corrective action is
necessary. Involuntary separation (or termination) is the last option that the management
exercises when an employee’s performance is poor. This is usually made after training efforts
fail to produce positive results (Medina, 2015).
Lesson 4. Employee Relations and Employee Movements
Employee Relations is defined as the workers/employees being connected or related

to each other as they do their assigned tasks for the
organization to which they belong. Employees are social
beings who need connection or relations with other
beings, who are capable of giving them social support
as they do their assigned tasks in organizations. Social
support refers to: esteem, informational, and financial
Source: https://hraps.humboldt.edu/aps-
support (Cabrera et al., 2016).
collective-bargaining-agreements (n.d.)
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Cabrera et al. (2016) mentioned there are some barriers to good employee relations,
such as anti-social personality, lack of trust in others, selfish attitude, lack of good self-esteem,
cultural and sub-cultural differences, and not a team player among others.
They added that overcoming barriers to good employee relations are developing a
heathy personality to overcome negative attitudes/behavior, finding time to socialize with co-
employees, developing good communication skills, overcoming dependence on electronic
gadgets, and trying to reduce cultural and sub-cultural differences.
Employee Movement are series of actions initiated by employee

groups towards an end or specific goal. A good example is Labor Union,
it is a formal union of employee/workers that deal with employers, as the
representative of workers in their pursuit of justice and fairness, and in
their fight for their collective/common interests. Source: https://tinyurl.com/y28ckwzc (2017)
Employees unionize because of financial needs, unfair management practices, and

social and leadership concerns. CBA stands for Collective Bargaining Agreement between
Management and Labor Union. Grievance procedure authorizes the labor union represent its
members in procuring a grievance or complaint.
Source: https://mywestford.com/blog/importance-of-collective-bargaining-in-industrial-relations/ (2016)
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Assessment Tasks
TASK NO. 1.1 (WRITTEN WORKS)

Instruction: True or False, Answer T if the statement is true and F if the statement is
false.
_____ 1. Family and personal problems are reasons why workers form a labor union.
_____ 2. The General Organizations Chart is also called Management Succession

Chart.
_____ 3. Internal recruitment may be practiced in Companies today.
_____ 4. Advertising and Internet recruiting methods increase the possibility of

recruiting applicants best-fitted for the job openings.
_____ 5. Panel interview may have higher reliability compared to one-on-one interview.
_____ 6. Proficiency and aptitude test are designed to evaluate the applicant’s present
skills and potential for learning other skills.
_____ 7. Training programs, in order to be successful, must have clear instructional

objectives.
_____ 8. Employees feel that their salary must be commensurate to the efforts they
exerted in the performance of their job.
_____ 9. Performance evaluations done by companies never fail.
_____ 10. A labor union is an informal grouping of employees that negotiates with an
Employer.
Source: Organization and Management DEPED Teacher’s Manual (2016), by Cabrera et al.
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Instruction: Fill in the blanks. Write the correct answers on the blanks provided in the
given statements.
1. The foundation of any labor-management relationship is ________________________,

which is the process of negotiating, administering, and interpreting a labor contract.
2. ______________ is a learning principle that uses personal behavior to demonstrate

performance expected to others.
3. Choosing of individuals to hire from a pool of qualified applicants is called

____________________.
4. ______________ recruitment is the inviting of applicants for filling-up vacant job

positions from outside the company.
5. An interview where the interviewer asks the applicant to answer a set of prepared
questions is called ______________________________.
6. _____________ is learning given by organizations to its employees that concentrates

on short term job performance and acquisition or improvement of job-related skills.
7. Salaries and bonuses are _________ compensation types.
8. ______________ is defined as the workers/employees being connected or related to

each other as they go about doing their assigned tasks for the company to which they
belong.
9. The ____________________ purpose of performance evaluation are used for

decision-making related to promotions, transfers, and terminations.
10. Developing employees is a part of the organization’s ______________ management

program and its goals is the matching of the individual’s development needs with the
needs of the organization.
Source: Organization and Management DEPED Teacher’s Manual (2016), by Cabrera et al. 70
TASK NO. 2.1 (ACTIVITY)
Instructions: Create a simple system flowchart of Staffing Process that is suitable to
your future business. Do not forget to write your name, section, and the date in the
space provided.
Name: ___________________________ Section_____________ Date: ______________
Company Name: _________________________________________
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Instructions: Create job descriptions and job specifications of an accountant position in
your accounting department. Do not forget to write your name, section, and the date in
the space provided.
Company Name: _________________________________________
Demonstration of: Job Description

Job Title: __________________________
Job Code: _________________________
Department: _______________________
Direct Manager: ____________________
Job Summary: _____________________________________________________________
Duties and Responsibilities:
1. __________________________________________________________________
____________________________________________________________________
2. __________________________________________________________________
____________________________________________________________________
3. __________________________________________________________________
____________________________________________________________________
4. __________________________________________________________________
____________________________________________________________________
5. __________________________________________________________________
____________________________________________________________________
Demonstration of: Job Specification

1. __________________________________________________________________
2. __________________________________________________________________
3. __________________________________________________________________
4. __________________________________________________________________
5. __________________________________________________________________
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Summary
 Staffing deals with the determination of human resource needs, recruitment, selection,
training and development.
 The staffing process consists of human resource planning, recruitment, selection,
induction and orientation, training and development, performance appraisal,
employment decisions, and separations.
 The sources of applications consist of the organization’s current employees,
newspaper advertising, schools, and referrals from employees, recruitment firms, and
competitors.
 The ways of determining the qualifications of job candidates consist of application
blanks, references, interviews, and testing.
 Employment decisions are classified as monetary rewards, promotion, transfer, and
demotion.
 Separation may be classified as either voluntary or involuntary.
 Employee compensation is another area of concern for staffing. The factors that affect
compensation are performance, the relative worth of each job within the firm, labor
market conditions, and prevailing wage rates, and the type of pay system used.
 The management of employee relations is important in maintaining efficiency in
production (Medina, 2015).
References
 Cabrera, H. M. F., Altarejos, A. D. C., Benjamin, R., & Department of Education.

(2016). Organization and Management Teacher’s Manual (C. D. B. Del Castillo, Ed.).
Vibal Group Inc. Quezon City, Philippines.
 Medina, R. G. (2015). Business Organization and Management (Revised Edition).
Rex Book Store, Inc. Manila Philippines.
 Schermerhorn, J. R. (2013). Management (12th Edition). John Wiley & Sons, Inc.
111 River Street, Hoboken, NJ.
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MODULE 6
LEADING
Introduction
After the various requirements for maintaining a business organization are put in place,
the firm will still need a sort of an engine that will propel it to become a successful venture.
When competitors are beginning to demonstrate the ability to derail the plans of the company,
somebody must take charge of not letting this happen.
Assets, even if they are abundant, cannot, on their own, achieve company objectives.
Human resources, even if they are fully trained and properly motivated, may still proceed to
move toward the wrong direction. Some employees are easily affected by disruptions and
minor failures. The potential damage may be great if these few persons perform key functions.
The effective use of assets will need the wisdom of somebody who will provide guidance on
their proper utilization. Somebody must console the employees who are distracted by minor
setbacks. Somebody must uplift their spirits when they feel demoralized.
Successful firms recognize the need to address the above-mentioned concerns and
the answer lies on effective leadership. As a result, they place a high priority on providing
leadership training.
Managers, in whatever level they happen to be, are not exempted from the problem of
effective leadership. If this is really so, then they must be concerned with the management
function of leading (Medina, 2015).
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Learning Outcomes

1. analyze motivation, leadership, and communication work in an organization (ABM_AOM11-
IIc-e-29,30, and 31); and
2. list his/her leadership traits and past experiences as a leader.
Lesson 1. Definition and Nature of Leading
Cabrera et al. (2016) defined Leading as a management function that involves the
inspiring and influencing of people in the organization to achieve a common goal.
Managing is the process of working with and through others to achieve organizational
objectives, efficiently and ethically amid constant change.
Successful leadership begins by focusing on the psychological well-being of both the

employer/leader and the employee/subordinate.
Personality is the unique combination of physical and mental characteristics that affect
how individuals react to situations and interact with others; and if unhealthy or not fully
functioning could cause conflicts/problems among them.
Healthy personality is possessed by persons who are fully functioning in mind, body,
and spirit.
Ideally, human resources of organizations must have a health fully-functioning

personality because when one is functioning at the highest level, one, inevitably, becomes
efficient in one’s work, and cooperative with managers/leaders and co-workers.
The Big Five Personality Traits that ensure success/efficiency in the workplace are
extraversion, agreeableness, conscientiousness, emotional stability, and openness to
experience.
Schermerhorn, Osborn, Hunt, & Uhl-Bien (2012) defined The Big Five Personality
Dimensions as follows:
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• Extraversion - outgoing, sociable, assertive
• Agreeableness - good-natured, trusting, cooperative
• Conscientiousness - responsible, dependable, persistent
• Emotional stability - unworried, secure, relaxed
• Openness to experience - imaginative, curious, broad-minded
Lesson 2. Motivation
At a simple level, it seems obvious that people do things, such as go to work, in order
to get stuff they want and to avoid stuff they don’t want. Overall, the basic perspective on
motivation looks something like this Figure 6.1:
Figure 6.1 Perspective of Motivation
In other words, you have certain needs or wants , and this causes you to do certain
things (behavior), which satisfies those needs (satisfaction), and this can change which
needs/wants are primary (either intensifying certain ones, or allowing you to move on other
ones).
So, Motivation refers to psychological process that arouse and direct goal-directed
behavior (Cabrera et al., 2016). Another meaning of motivation according Schermerhorn
(2013), it refers to forces within an individual that account for the level, direction, and
persistence of effort expended at work.
Motivation is the answer to the question “Why we do what we do?” The motivation
theories try to figure out what the “M” is in the equation “M motivates P” (motivators motivate
the person). It is the one most important duty of an entrepreneur – motivate people.
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Motivation theories can be classified broadly into two different perspectives:
1. Content Theories 2. Process Theories
The content theories of motivation focus primarily on individual needs-physiological or

psychological deficiencies that we feel a compulsion to reduce or eliminate. The content
theories try to explain work behaviors based on pathways to need satisfaction and on blocked
needs. This chapter discusses Maslow’s hierarchy of needs theory, Alderfer’s ERG theory,
McClelland’s acquired needs theory, and Herzberg’s two-factor theory (Schermerhorn et al.,
2012).
The process theories of motivation focus on how cognitive processes as thoughts and
decisions within the minds of people influence their behavior. Whereas a content approach
may identify job security as an important individual need, a process approach would probe
further to identify why the decision to seek job security results in certain work behaviors. Three
process theories discussed in this chapter are equity theory, expectancy theory, and goal-
setting theory (Schermerhorn et al., 2012).
1. Content Theories: Individual Needs and Motivation
1.1 Abraham Maslow’s Hierarchy of Needs Theory, depicted in Figure 6.2,

identifies five levels of individual needs. They range from self-actualization and esteem
needs at the top, to social, safety, and physiological needs at the bottom. The concept
of a needs “hierarchy” assumes that some needs are more important than others and
must be satisfied before the other needs can serve as motivators. For example,
physiological needs must be satisfied before safety needs are activated; safety needs
must be satisfied before social needs are activated; and so on. In short, an individual
strives to seek a higher needs when lower needs are fulfilled. Once a lower-level need
is satisfied, it no longer serves as source of motivation. Needs are motivators only
when they are unsatisfied (Schermerhorn et al., 2012).
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Highest need level; need to fulfill oneself; to grow and
use abilities to fullest and most creative extent Self-actualization
Need for esteem of others; respect, prestige, recognition,

Esteem
need for self-esteem, personal sense of competence, mastery
Need for love, affection, sense of belongingness in

one’s relationships with other persons
Social
Need for security, protection, and stability in the

Physical and interpersonal events of day-to-day life
Safety
Most basic of all human needs; need for biological maintenance;

need for food, water, and sustenance Physiological
Figure 6.2 Higher-order and lower-order needs in Maslow’s hierarchy of needs.

Source: Organizational Behavior 12th Edition (2012) by Dr. Schermerhorn et al.
1.2 Clayton Alderfer’s ERG theory is also based on needs, but it differs from
Maslow’s theory in three main respects. First, ERG theory collapses Maslow’s five
needs categories into three: existence needs, desires for physiological and material
well-being; relatedness needs, desires for satisfying interpersonal relationships; and
growth needs, desires for continued personal growth and development. Second, ERG
theory emphasizes a unique frustration-regression component. An already satisfied
lower-level need can become activated when a higher-level need cannot be satisfied.
If a person is continually frustrated in his or her attempts to satisfy growth needs
relatedness needs can again surface as key motivators. Third, unlike Maslow’s theory,
ERG theory contends that more than one need may be activated at the same time
(Scherrmerhorn et al., 2012).
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Highest need level; need to fulfill oneself; to grow and
use abilities to fullest and most creative extent
Growth Needs
Need for esteem of others; respect, prestige, recognition,
need for self-esteem, personal sense of competence, mastery
Need for love, affection, sense of belongingness in

one’s relationships with other persons Related Needs
Need for security, protection, and stability in the

Physical and interpersonal events of day-to-day life
Most basic of all human needs; need for biological maintenance; Existence Needs
need for food, water, and sustenance
Figure 6.3 Alderfer’s ERG Theory

1.3 McClelland’s acquired needs theory - In his 1961 book entitled, “The
Achieving Society’’ , David McClelland identify three basic needs that people develop
and acquire from their life experiences.
 Needs for achievement - is the desire to do something better or more

efficiently, to solve problems, or to master complex tasks.
 Needs for affiliation - is the desire to establish and maintain friendly and
warm relations with others.
 Needs for power - is the desire to control others, to influence their

behavior, or to be responsible for others.
Although this categories of needs are not exclusive, generally, individuals a

dominant bias or emphasis towards one of the three needs. Entrepreneur usually have
a high degree of achievement needs (Schermerhorn et al., 2012).
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1.4 Herzberg’s two-factor theory - Frederick Herzberg took yet another
approach in his studies of individual needs and motivation. He began by asking
workers to report the times they felt exceptionally good about their jobs and the times
they felt exceptionally bad about them. Results showed that people talked about very
different things when they reported feeling good or bad about their jobs. Herzberg
explained these results using what he called the two factor theory, also known as the
motivator-hygiene theory. This theory identifies motivator factors as primary causes of
job satisfaction and hygiene factors as primary causes of job dissatisfaction
(Schermerhorn et al., 2012).
Hygiene factors are sources of job dissatisfaction, and they are found in the
job context or work setting. That is, they relate more to the setting in which
people work than to the nature of the work itself. The two-factor theory
suggests that job dissatisfaction occurs when hygiene is poor. But it also
suggests that improving the hygiene factors will not increase job satisfaction; it
will only decrease job dissatisfaction. Among the hygiene factors shown on the
left in Figure 6.3, perhaps the most surprising is salary. Herzberg found that a
low base salary or wage makes people dissatisfied, but that paying more does
not necessarily satisfy or motivate them (Schermerhorn et al., 2012).
Motivator factors, shown on the right in Figure 6.4, are sources of job
satisfaction. These factors are found in job content—what people actually do
in their work. They include such things as a sense of achievement,
opportunities for personal growth, recognition, and responsibility. According to
two-factor theory, the presence or absence of satisfiers or motivators in
people’s jobs is the key to satisfaction, motivation, and performance. When
motivator factors are minimal, low job satisfaction decreases motivation and
performance. When motivator factors are substantial, high job satisfaction
raises motivation and performance (Schermerhorn et al., 2012).
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Figure 6.4 Sources of dissatisfaction and satisfaction in Herzberg’s two-factor theory.
2. Process Theories of Motivation
2.1 Adams’s equity theory posits that people will act to eliminate any felt
inequity in the rewards received for their work in comparison with others.
The basic foundation of equity theory is social comparison. Think back to the
earlier questions. When you receive a grade, do you quickly try to find out what others
received as well? And when you do, does the interpretation of your grade depend on
how well your grade compared to those of others? Equity theory predicts that your
behavior upon receiving a grade—working less or harder in the course, will be based
on whether or not you perceive it as fair and equitable. Furthermore, that determination
is made only after you compare your results with those received by others.
Adams argues that this logic applies equally well to the motivational
consequences of rewards we receive at work. He believes that motivation is a function
of how one evaluates rewards received relative to efforts made, and as compared to
the rewards received by others relative to their efforts made. A key issue in this
comparison is “fairness.” And as you might expect, any feelings of unfairness or
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perceived inequity are uncomfortable; they create a state of mind we are motivated to
eliminate (Schermerhorn et al., 2012).
2.2 Victor Vroom’s Expectancy Theory, suggests that motivation is a result of

a rational calculation—people will do what they can do when they want to do it. It looks
at how likely it is that the performances and outcomes will occur. An individual makes
voluntary choices about: (1) whether the job can be accomplished, (2) whether the
outcome will occur as a result of performing and (3) whether the outcome will be
desirable.
Figure 6.5 Vroom’s Expectancy Model.
2.3 Goal-Setting Theory, developed by J. Stacey Adams, a research

psychologist working for General Electric. Goal Setting Theory is based on the
hypothesis that specific goals lead to better performance than do vague goals.
Research supports this hypothesis. The clear implication for managers is that getting
employees to set and strive to attain specific, relatively challenging goals can
generates a strong motivational force.
One finding of the research is the relationship of task difficulty and effort. In
general, effort increase as task difficulty (goal) increases. However, there is a point at
which the task is perceived as being too difficult and the effort actually decreases. This
is represented by an inverted “U” curve.
Lesson 3. Leadership Theories and Styles
The subject of leadership has been studied for hundreds of years and reveals and
involving succession of theories. The earliest theories focus mostly on the character and
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personality of successful leaders and how they behaved. The most recent theories focus on
what leaders actually do rather than on them needing to have certain innate qualities or traits.
Early trait theories attempted to create a list of leadership qualities and behaviors
associated with good leaders. They saw these aspects as what anyone who wanted to lead
needed to possess to be successful. The leader must have six basic qualities or behavioral
traits to be a leader they are:
• Honesty and integrity

• Emotional maturity
• Motivation
• Self-confidence
• Cognitive ability
• Achievement drive
Over time, scholars became increasingly uncomfortable with the notion of a “high high”
leader. They concluded that no one set of behaviors or style works best all of the time. And,
they developed a number of contingency approaches to explain the conditions for leadership
success in different situations. The following are Contingency Approaches to Leadership:
1. Fiedler’s Contingency Model - One of the first contingency leadership models was
developed by Fred Fiedler. He proposed that good leadership depends on a match or
fit between a person’s leadership style and situational demands. Fiedler believed that
leadership style is part of one’s personality and is difficult to change. Thus, he didn’t
place much hope in trying to train leaders to behave in different ways. He instead
suggested that leadership success comes from putting our existing styles to work in
situations for which they are the best fit. This requires both self-awareness of one’s
leadership style and a good understanding of the situational strengths and
weaknesses of that style (Schermerhorn, 2013).
Leadership style in Fiedler’s model is measured on the least-preferred

coworker scale, known as the LPC scale and found as the end-of-chapter self-
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assessment. It describes tendencies to behave either as a task-motivated leader (low
LPC score) or relationship-motivated leader (high LPC score) (Schermerhorn, 2013).
Leadership situations in Fiedler’s model are assessed according to the amount

of control they offer the leader. Three contingency variables measure situational
control. The quality of leader–member relations (good or poor) measures the degree
to which the group supports the leader. The degree of task structure (high or low)
measures the extent to which task goals, procedures, and guidelines are clearly
spelled out. The amount of position power (strong or weak) measures the degree to
which the position gives the leader power to reward and punish subordinates .
Figure 6.6 shows eight leadership situations that result from different
combinations of these contingency variables. They range from the most favorable
situation of high control (good leader–member relations, high task structure, strong in
position power) to the least favorable situation of low control (poor leader–member
relations, low task structure, weak in position power) (Schermerhorn, 2013).
Figure 6.6 Predictions on style-situation fit from Fiedler’s contingency

leadership model.
Source: Management 12th Edition (2013) by Dr. John R. Schermerhorn
2. Hersey-Blanchard Situational Leadership Model – According to Schermerhorn,

(2013) In contrast to Fiedler’s notion that leadership style is hard to change, the Hersey
- Blanchard situational leadership model suggests that successful leaders do adjust
their styles. But they do so wisely and based on the task readiness, or task maturity,
of followers. “Readiness,” in this sense, refers to how able and willing or confident
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followers are to perform required tasks. The four leadership styles to choose from are
shown in Figure 6.7 as:
•Delegating—allowing the
group to take responsibility for
task decisions; a low-task, low-
relationship style.
•Participating—emphasizing
shared ideas and participative
decisions on task directions; a
low-task, high-relationship
style.
Figure 6.7 Leadership implications of the
•Selling—explaining task Hersey-Blanchard situational leadership model.

Source: Management 12th Edition (2013) by Dr.
directions in a supportive and
John R. Schermerhorn
persuasive way; a high-task, high-
relationship style.
• Telling—giving specific task directions and closely supervising work; a high-task, low-
relationship style.
Schermerhorn (2013) added that the delegating style works best in high-
readiness situations with able, willing, and confident followers. The telling style works
best at the other extreme of low readiness, where followers are unable and unwilling,
or insecure. The participating style is recommended for low-to-moderate-readiness
followers—able but unwilling, or insecure. And, the selling style is for moderate-to-
high-readiness followers—unable, but willing or confident.
Hersey and Blanchard also believe that leadership styles should be adjusted
as followers change over time. If the correct styles are used in lower-readiness
situations, followers will “mature” and grow in ability, willingness, and confidence. This
allows the leader to become less directive and more participative as followers mature.
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Although the Hersey-Blanchard model is intuitively appealing, limited research has
been accomplished on it to date (Schermerhorn, 2013).
3. Path–Goal Leadership Theory - The path–goal theory advanced by Robert House

seeks the right fit between leadership style and situation. Unlike Fiedler, House
believes that a leader can use all of the following leadership styles and actually shift
back and forth among them (Schermerhorn, 2013):
• Directive leadership—letting followers know what is expected; giving directions on

what to do and how; scheduling work to be done; maintaining definite standards of
performance; clarifying the leader’s role in the group.
• Supportive leadership—doing things to make work more pleasant; treating team

members as equals; being friendly and approachable; showing concern for the
wellbeing of subordinates.
• Achievement-oriented leadership—setting challenging goals; expecting the highest

levels of performance; emphasizing continuous improvement in performance;
displaying confidence in meeting high standards.
• Participative leadership—
involving team members in
decision making; consulting
with them and asking for
suggestions; using these
suggestions when making
decisions.
Figure 6.7 Contingency relationships in House’s path–goal leadership theory.

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Lesson 4. Communication
Cabrera et al. (2016) defined Communication as the interpersonal exchange of

information and understanding among organization members. Communication may be verbal,
non-verbal, formal, and informal.
Communication direction and flow may be vertical (upward or downward), horizontal,

lateral, and diagonal. Communication networks are varied patterns of combined horizontal
and vertical flows of organizational communication.
Grapevine is an informal communication network; rumors/gossips are examples.
Barriers to communication filtering, emotions felt by the receiver, information overload,

defensiveness, language used, and national culture. Overcoming barriers to communication
include using feedback, using simple language, active listening, controlling emotions, and
observing body language (Cabrera et al., 2016).
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Assessment Tasks

Instruction: Elimination. Four terms are given in each number. Choose the term which
is not related to the other three. Write the letter corresponding to the unrelated term on
the provided blank before each number.
_____ 1. A. extraversion C. charismatic

B. agreeableness D. emotional stability
_____ 2. A. leading C. inspiring people

B. managing people D. influencing people
_____ 3. A. Physiological needs C. Social needs

B. Self-actualization needs D. Equity Needs
_____ 4. A. Two Factory theory C. Maslow’s hierarchy of needs theory

B. ERG Theory D. Fiedler’s Theory
_____ 5. A. Transactional Model C. Contemporary Theory

B. Transformational Model D. Servant Leadership Theory
_____ 6. A. diagonal communication C. upward communication

B. vertical communication D. downward communication
_____ 7. A. chain network C. computer network

B. wheel network D. all-channel network
_____ 8. A. filtering C. emotions felt

B. active listening D. defensiveness
_____ 9. A. Delegating C. Selling

B. Participating D. Buying
_____ 10. A. Directive Leadership C. Supportive Leadership

B. Participative Leadership D. Commanding Leadership
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Instructions: Modified True or False. Two statements are given. If only the first
statement is true, answers A; if only the second statement is true, answer B; If both
statements are true, answer C; If both statements are false, answer D. Write your
answers on the space provided.
_____ 1. Leading and managing are synonymous terms. Successful leadership must
begin by focusing on the physiological capital of both the employer and employee.
_____ 2. Conscientiousness is knowing what is right and what is wrong. Extraversion

is the degree to which someone is sociable, talkative, and assertive.
_____ 3. Job satisfaction refers to the employees’ general attitude toward their
respective job. It has no effect on productivity.
_____ 4. Example of Hygiene factor is Salary. Example of Motivator factor is Security.
_____ 5. The Two Factor Theory of Motivation was proposed by McClelland. The ERG
Theory was developed by Alderfer.
_____ 6. Self-actualization refers to the human need for continued personal growth.
Esteem is the human need for self-respect and self-fulfillment.
_____ 7. Managers are advised to set goals for their subordinates. Difficult goals
demotivate workers.
_____ 8. E-mail is a form of formal communication. Grapevine is an informal
_____ 9. Change is considered by many organization members as a threat. Fear of

change may be due to uncertainty, pessimism, and concern about personal loss.
_____ 10. Healthy personality is possessed by persons who are fully functioning in
mind, body, and spirit. One of the example is gossiping your boss to your co-
employees.
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Instructions: List down 5 leadership traits and give specific examples of your past
experience as a leader.
My personal leadership traits: Examples of past experiences as a leader

Example 1: Cognitive ability I had a good grades; and I easily recognized
school problems that needed immediate
solutions.
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Instructions: Explain the photo, and which one you will apply to your own future
business. Do not forget to write your name, section, and the date in the space provided.
Company Name: _________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
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Summary
 Motivating is the management action of giving employees reason or incentives to work

to achieve organizational objectives. Motivation is the process of activating behavior,
sustaining it, and directing it towards a particular goal.
 The factors contributing to motivation consist of willingness to do a job, self-confidence
in carrying out a task, and needs satisfaction.
 Motivation theories can be classified broadly into two different perspectives, Content
Theories and Process Theories.
 There are four motivation under content theories that are crucial to management:
Maslow’s need hierarchy theory, Herzberg’s two-factor theory, expectancy theory, and
goal setting theory.
 In motivation process theories of motivation, we have: Adam’s Equity theory, Vroom’s
Expectancy theory, and Goal Setting Theory.
 Communication is the interpersonal exchange of information and understanding
among organization members. Communication may be verbal, non-verbal, formal, and
informal. Communication direction and flow may be vertical (upward or downward),
horizontal, lateral, and diagonal.
 Grapevine is an informal communication network; rumors/gossips are examples.
 Barriers to communication filtering, emotions felt by the receiver, information overload,
defensiveness, language used, and national culture. Overcoming barriers to
communication include using feedback, using simple language, active listening,
controlling emotions, and observing body language.
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References

Vibal Group Inc. Quezon City, Philippines.Medina, R. G. (2015). Business
Organization and Management (Revised Edition). Rex Book Store, Inc. Manila
Philippines.
 Shermerhorn, Jr., J. R., Osborn, R. N., Hunt, J. G., & Uhl-Bien, M. (2012).
Organizational Behavior 12th Edition . John Wiley & Sons, Inc. 111 River Street,
Hoboken, NJ.
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MODULE 7
CONTROLLING
Introduction
Keeping in touch . . . staying informed . . . being in control: These are important

responsibilities for every manager. But control is a word like power. If you aren’t careful when
and how it’s used, the word carries a negative connotation. Yet, control plays a positive and
necessary role in the management process. To have things “under control” is good; for things
to be “out of control” is generally bad (Scherrmerhorn, 2013).
Learning Outcomes

1. apply the concept and nature of different control methods and techniques in accounting and
marketing (ABM_AOM11-IIf-h-34, 36, and 37); and
2. create a Gantt chart for pre-opening of his/her future business.
Lesson 1. Nature of Controlling
Cabrera et al. (2016) defined Controlling as a management function that ensures the
work performance of the organization’s members are in-line with the organization’s values
and standards.
Control techniques are basically the same for controlling financial resources, office
management, quality of service, and quality of goods, among others.
The control process involves establishing standards, measuring and reporting actual
performance and comparing it with standards, and taking action.
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Control methods are techniques used for measuring an organization’s financial
stability, efficiency, effectiveness, production output, and organization members’ attitudes and
morale. Control techniques are either quantitative or non-quantitative. Quantitative control
methods include chart, budget, and audits.
One of the example of Quantitative control is Gantt Chart in project management. It is

a graphical display of the scheduling of tasks required to complete a project. Henry Gantt, an
industrial engineer, developed this chart in the early twentieth century. It is still used in today’s
project management. It helps in the sequencing of activities related to the project, ensuring
that work gets done in time for later work to build upon them. Gantt chart tries to avoid delays
in finishing earlier tasks that may cause delays in later tasks that will follow.
Figure 7.1A Example of a Gantt Chart. Figure 7.1B Example of a Gantt Chart.
Source: https://www.rff.com/gantt2.php (n.d.) Source:https://www.productplan.com/glo
ssary/gantt-chart/ (n.d.)
Non-quantitative control methods include inspections, direct supervision, on the spot

checking, performance evaluation, and counselling.
Always remember that there is a link between planning and controlling. Planning
determines the organization’s good or performance objectives. Controlling makes sure that all
organization members are working towards a common direction or towards the previously set
goals and plans of the organization.
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Lesson 2. Control Methods and System
According to Schermerhorn (2013) the control process involves the four steps shown
in Figure 7.2. They are (1) establish performance objectives and standards; (2) measure
actual performance; (3) compare actual performance with objectives and standards; and (4)
take corrective action as needed.
Although essential to management,
these steps apply equally well to
personal affairs and careers. Think about
it. Without career objectives, how do you
know where you really want to go? How
can you allocate your time and other
resources to take best advantage of
available opportunities? Without
measurement, how can you assess any
progress being made? How can you
adjust current behavior to improve
Figure 7.2 Four steps in the control process. prospects for future results?
Source: Management 12th Edition (2013)
by Dr. John R. Schermerhorn
Schermerhorn (2013) explained the following Steps in the Control Process:
1. Establishing Performance Objectives and Standards - The control process begins

with planning, when performance objectives and standards for measuring them are set. It can’t
start without them.
 What has to be achieved must first be determined.
 Sales Targets. (Quantity)
 Production Targets. (Quantity and Quality)
 Worker Attendance. (Rate of absences)
 Safety Records. (Number of accidents for given periods)
 Supplies Used. (Monetary terms for given periods)
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2. Measure Actual Performance - It is the point where output standards and input
standards are used to carefully document results. Performance measurements in the control
process must be accurate enough to spot significant differences between what is really taking
place and what was originally planned. Without measurement, effective control is not possible.
 When shortcoming occur, adjustment could be made. The adjustments will
depend on the actual findings.
3. Comparing Actual Performance to Objectives and Standards - You can remember

its implications by this control equation:
Need for Action = Desired Performance - Actual Performance

 Actual production output, for instance, will be compared with the target
output.
 A construction firm entered into a contract with the government to
construct a 100-kilometer road within 10months. It would be then
reasonable for management to expect at least 10 kilometers every
month. As such, this must be verified every month.
4. Take Corrective Action - The final step in the control process is to take the action
needed to correct problems or make improvements. Management by exception is the practice
of giving attention to situations that show the greatest need for action. It saves time, energy,
and other resources by focusing attention on high-priority areas.
Managers should be alert to two types of exceptions. The first is a problem situation
where actual performance is less than desired. It must be understood so that corrective action
can restore performance to the desired level. The second is an opportunity situation where
actual performance turns out higher than what was desired. It must be understood with the
goal of continuing or increasing the high level of accomplishment in the future.
 Taking the opportunity to take corrective action.
 Only 15 kilometers was constructed in two months.
 Hire Additional Personnel
 Use more Equipment
 Require Overtime Work
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Types of Control
One of the best ways to understand control is in respect to the open-systems

perspective in Figure 7.3. It shows how feedforward, concurrent, and feedback
controls link with different phases of the input–throughput–output cycle. Each type of
control increases the likelihood of high performance (Schermerhorn, 2013).
Figure 7.3 Feedforward, concurrent, and feedback controls.

Feedforward controls, also called preliminary controls, take place before a

work activity begins. They ensure that objectives are clear, that proper directions are
established, and that the right resources are available to accomplish the objectives.
The goal is to solve problems before they occur by asking an important but often
neglected question: “What needs to be done before we begin?”
Concurrent controls focus on what happens during the work process.

Sometimes called steering controls, they make sure things are being done according
to plan. You can also think of this as control through direct supervision.
Feedback controls, also called post-action controls, take place after work is
completed. They focus on the quality of end results rather than on inputs and activities.
Feedback controls are largely reactive; the goals are to solve problems after they occur
and prevent future ones. They ask the question: “Now that we are finished, how well
did we do?”
98
Lesson 3. Application of Management Control in Accounting and
Marketing Concepts and Techniques
Financial Controls. According to Schermerhorn (2013) the pressure is ever present for
all organizations to use their financial resources well. And the global economic recession has
left no doubt that an important part of managerial control involves the analysis of financial
performance. Control is all about measurement, and there are a number of ways that financial
performance can be measured and tracked for control purposes.
The foundation for analysis using financial controls rests with the firm’s balance sheet
and income statement. The balance sheet shows assets and liabilities at a point in time. It will
be displayed in an Assets = Liabilities format. The income statement shows profits or losses
at a point in time. It will be displayed in a Sales - Expenses = Net Income format. You can
remember both from an accounting course or as simply summarized in Figure 7.4.
Figure 7.4 Basic foundations of a balance sheet and income statement.

Managers should be able to use information from balance sheets and income
statements to understand a firm’s financial performance. Financial controls of this nature often
involve measures of liquidity—ability to generate cash to pay bills; leverage - ability to earn
more in returns than the cost of debt; asset management—ability to use resources efficiently
and operate at minimum cost; and profitability - ability to earn revenues greater than costs.
Some of the common financial ratios are listed here.
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Liquidity - measures ability to meet short-term obligations
• Current Ratio _ Current Assets/Current Liabilities
• Quick Ratio or Acid Test _ Current Assets _ Inventories/Current Liabilities
Higher is better: You want more assets and fewer liabilities.
Leverage - measures use of debt

• Debt Ratio _ Total Debts/Total Assets
Lower is better: You want fewer debts and more assets.
Asset Management - measures asset and inventory efficiency

• Asset Turnover _ Sales/Total Assets
• Inventory Turnover _ Sales/Average Inventory
Higher is better: You want more sales relative to assets and inventory.
Profitability - measures ability to earn revenues greater than costs

• Net Margin _ Net Income/Sales
• Return on Assets (ROA) _ Net Income/Total Assets
• Return on Equity (ROE) _ Net Income/Owner’s Equity
Higher is better: You want high net income relative to sales, assets, and equity.
Financial ratios are very common in executive dashboards that organize business
intelligence information for decision making. The ratios lend themselves nicely to visual
displays that provide neat historical comparisons within the firm and for industry
benchmarking. They can also be used to set financial targets or goals to be shared with
employees and tracked to indicate performance success or failure (Schermerhorn, 2013).
Marketing Control. Marketing Metrics are used to document goals (essentially the
quantitative aspect of the company’s priorities), as well as to measure its effectiveness,
efficiency, and impact. For instance, a marketing manager may be evaluated on the basis of
sales, market shares, and profit. They may also be evaluated on the basis of market
penetration, as well as customer satisfaction. A marketing communication manager of a
business-to-business company may have a scorecard in terms of number of social media
shares, sales leads, and customer engagement. A territory account manager may be
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measured on the basis of territory coverage, placement, display, inventory level, resale prices,
and goodwill within an approved expense-to-sales budget (Go, 2017).
Regular monitoring is done in order to evaluate performance and spot gaps, meaning,
the variance goals versus actual results. Redirection of activities can be done accordingly if
needed after evaluating the results of the preliminary data. Table 7.1 shows the process.
Table 7.1 Marketing Control Process.

Goals /
Redirection of Plans
Actual Result Performance
Variance Explanation (What we should do
(What Standard
(Why it happened) about it to attain
happened) (What should
goals)
happen)
P80 million P100 million Lack in P20 million sales was Accelerate
sales from 17 sales from 20 caused by the inability to serve recruitment of new
distributors distributors the North Luzon area with distributors by
1) comparative less number of incentivizing referral
productive distributors in the system
area, caused by lower than
expected retention rate, and
2) lower sales productivity of
existing productive distributors
Source: Principles and Practices in Marketing, Go J., and Go, CE.
Further explanation of several approaches of the above marketing control are as

follows (Medina, 2008):
Sales Analysis – refers to a detailed breakdown of the company’s sales records. The
actual sales performance is compared with the target sales. The purpose of sales analysis is
to identify which of the various factors is causing the gap in performance.
Market-Share Analysis – is useful analytical tool to measure competitive performance

in marketing. A company’s share of the market indicates how strong the company is when
101
compared with competitors. A firm’s sales growth, for instance, may look good at 20 percent.
This attitude will change, however, if one finds out that the industry sales grew by 40 percent.
Sales-to-Expense Analysis – a certain percentage of expense over sales is usually

maintained by the firm. If this ratio goes up compared with previous years, it could be an
indication of a need for corrective action.
Attitude Tracking - The attitude of customers comprises a very important concern for
the company. If there is an unfavorable change, or even a tendency, it may seriously affect
the marketing performance of the firm. Customer attitudes must, therefore, be monitored so
that corrective actions may be initiated when necessary.
Profitability Analysis – An analysis of the profit contribution of the firm’s various

products, territories, customer groups, trade channels, and order sizes will surely provide vital
information for decision-making and control purposes. An unprofitable territory, for instance,
once made known in the analysis, may no longer be served.
Marketing Audit – A total evaluation program for the marketing effort is called a
marketing audit. In more specific terms, it is a systematic, critical, and unbiased review and
appraisal of the basic objectives and policies of the marketing function and of the organization,
methods, procedures, and personnel employed to implement those policies and to achieve
those objectives.
102
Assessment Tasks
Instruction: Multiple Choice. Choose the letter which corresponds to the correct answer
and put it on the space provided before each number.
_____ 1. The first step in the control process
a. taking action
b. establishing standards
c. measuring and reporting actual performance
_____ 2. _____ refers to all the properties owned by an organization.
a. liabilities b, equities c. assets
_____ 3. The amount of goods and services produced by organizations
a. output b. input c. throughput
_____ 4. A measure of the suitability of organizational goals to organizational needs
and how well these goals are being attained.
a. Industry ranking b. Organizational activities c. Organizational productivity
_____ 5. The organization’s ability to meet short term obligations
a. liquidity b. solidity c. control
_____ 6. It is a method which prevents problems because managerial actions is taken
before the occurrence of actual problems.
a. employee discipline b. feedforward control c. feedback control
_____ 7. The “lifeblood of the business”
a. sales b. strategies c. projections
_____ 8. The ability to use resources efficiently and operate at minimum costs
a. activity ratio b. leverage c. asset management
_____ 9. An approach of measuring a company’s own services and practice against
recognized leaders in industry in order to identify areas for improvement.
a. strategic control b. benchmarking c. market planning
_____10. Profit and Loss statement is also known as _______.
a. Progress Statement b. Income Statement c. Operations Statement
103
Instruction: Elimination. Four terms/items are given. Choose the letter that corresponds
to the term/items not related to the other three. Write your answers on the space
provided.
_____ 1. a. accounts payable c. mortgages
b. marketable securities d. long term debts
_____ 2. a. land c. cash on hand

b. property and equipment d. accruals
_____ 3. a. sales c. sales forecast

b. gross profit d. tax provisions
_____ 4. a. inspection reports c. audit interview

b. performance evaluation d. spot checking
_____5. a. top down approach c. traffic count

b. macro-economic forecast d. statistical models
_____6. a. liquidity ratio c. leverage ratio

b. service ratio d. activity ratio
_____7. a. sales volume projections c. working capital needs

b. liquidity predictions d. warehouse handling
_____8. a. non quantitative tool c. quantitative tools

b. visual impact d. charts
_____9. a. project planning control c. determine workplace policy

b. identify activities d. determine completion date
_____10. a. control process c. establishing sequence of activities

b. correction of deviations d. establishing criteria of performance
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TASK NO. 2 (ACTIVITY)
Instructions: Write your name, your section, and the date in the space provided.
After 7 years (Year 2027), you are ready to start your own business. Create a Gantt
chart in opening of your future business. Plot the suitable activities required against the
time in months needed to complete your opening of business. You may use a long
bond paper to perform this activity, and kindly paste it here.
Company Name: _________________________________________
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Summary
 Controlling is one of the main functions of management. It comes after planning,

organizing, staffing, and directing. Controlling is aimed at determining if objectives
were realized and by providing means for achieving unrealized goals (Medina, 2015).
 Controlling is important because it complements the other management functions.

Controlling is a process consisting of various steps, namely: establishing performance
objectives and standards. Measuring actual performance, comparing actual
performance to objectives and standards, and taking the necessary action based on
the results of the comparison.
 Control may be classified either as feed forward, concurrent, or feedback.
References

 Go, J., & Go, C.E. (2017). Principles and Practices in Marketing . Josiah Go. Quezon
City, Philippines.
 Medina, R. G. (2015). Business Organization and Management (Revised Edition).
Rex Book Store, Inc. Manila Philippines.
 Medina, R. G. (2008). Principles of Marketing. Rex Book Store, Inc. Manila
Philippines.
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MODULE 8
THE DIFFERENT FUNCTIONAL
AREAS OF MANAGEMENT
Introduction
After learning the five functions of management, planning, organizing, staffing, leading,
and controlling. You are now ready to apply it in the five functional areas of management.
Learning Outcomes

1. explain the nature and role in the firm of the following functional areas of management
(ABM_AOM11-IIi-39):
a. Human Resource Management
b. Marketing Management
c. Operations Management
d. Financial Management
e. Material and Procurement Management
f. Office Management; and
2. analyze which of the five functional areas of management is important for his/her future
business.
107
Lesson 1. The Five Functional Areas of Management
1. Human Resources Management, is the process of attracting, developing, and

maintaining and excellent workforce. Human Resources are also known as human capital and
they, along with other resources, drive the performance of organizations. HRM functions of
management include the following (Cabrera et al., 2016):
1. Conducting job analyses

2. Planning labor need and recruitment
3. Selecting candidates for the job
4. Orienting and Training new employees
5. Managing compensation or pay
6. Providing incentives performance
7. Evaluating employee’s performance
8. Communicating
9. Developing Employees
10. Building employees’ commitment
11. Providing good working condition
12. Handling Grievances and Industrial relations
2. Marketing Management, is the process of managerial planning and carrying out the
conception, pricing, promotion, and distribution of ideas, goods, and services to bring
exchanges that satisfy individual and organizational goals. The marketing management
functions include the following (Cabrera et al., 2016):
1. Analyses, planning, implementing, and controlling of goods, services, and

ideas to create exchanges that satisfy customer needs and company goals.
2. Management of marketing resources: sales people, advertising, and
marketing research.
3. Analysis of marketing program plans and its implementation
4. Stimulation of demands for the products of the company
5. Making of crucial decisions that will ensure the company’s competitiveness
6. Making sure that marketing techniques employed are efficient, effective, and
socially responsible or ethical.
108
Marketing management is important because it is the key to achieving organizational
goals, the satisfaction of customers, and increasing profits. Advertising is any system of
attracting public notice to an event or the desirability of commercial products for sale.
3. Operation Management, is the study of how goods and services are produced in
organizations. Operations management functions of management must include the following:
1. Overseeing the transformation process that changes resources into finished

goods and services;
2. Improvement of productivity and competitive advantage; and
3. Managing sequence of activities and Information along the whole course of
the value chain.
Expertise in Operations Management is important because it may increase a

company’s chances for survival and success in today’s business environment, characterized
by intense competition and desire for innovative, quality products and services (Cabrera et
al., 2016).
4. Financial Management, is the management and custody of organization’s funds,

seeing to it that funds are effectively utilized in order to provide for all the needs of the various
operating units of the organization. Financial management functions of management includes:
1. taking charge of the company’s financial policies and strategies, investment,

capital structures and dividend policies;
2. financial management and control; and
3. financial planning.
Financial management facilitates the choice of investments, financial policies, and

operating mechanism the organization to effectively achieve its goal and objectives. Financial
managers maximize the wealth of the organization; stockholders/shareholders satisfy other
goals such as providing good customer service, maximizing bankruptcy risks, and actively
participating in present societal concerns, among others (Cabrera et al., 2016).
109
5. Information and Communication Technology Management (ICTM), is the
management of information and communication technology that collects, organizes, and
distributes data for the organization decision-making functions. ICTM functions include:
1. Developing the organization’s hardware, software, and other computing and

communicating technologies;
2. Developing the organization’s management information system tailored to the
needs to the firm’s units; and
3. Encouraging E-Commerce through Internet use.
The widespread use of ICTM has brought the emergence of a Knowledge-based

economy due to easy access to information at low costs through the Internet. ICTM has
revolutionized the business world (Cabrera et al., 2016).
110
Assessment Tasks

Instruction: Identification. Put your answer on the spaces provided.
_______________ 1. The most important business resource
_______________ 2. The study of how goods and services are produced in

organizations
_______________ 3. Any system or method of attracting public notice to an event to be

attended or the desirability of commercial products for sale.
_______________ 4. The process of setting financial objectives and determining what

should be done to accomplish them
_______________ 5. Forecast of cash needs and sources
_______________ 6. The process of managerial planning and carrying out of the

conception, pricing, promotion, and distribution of ideas, goods,
and services to bring exchanges that satisfy individual and
organizational goals
_______________ 7. Individual or groups of people who have acquired much information

and understanding of things due to experience, practical ability,
and easy access to information through the Internet
_______________ 8. The process of obtaining information about jobs needed in order

to achieve the organization’s goals/objectives by determining its
duties, tasks or activities
_______________ 9. Functional area of management which handles the evaluation of

employees’ performance
_______________ 10. Functional areas of management which is concerned with the

stimulation of demands for the company’s products
111
Instruction: Match the items in Column 1 with the items in Column 2. Write only the
letter of the correct answer on the space provided.
Column 1 Column 2
_____ 1. ICTM A. salesmen, advertising, research
_____ 2. Marketing resources B. important for attracting qualified job applicants
_____ 3. HRM C. bonuses
_____ 4. Financial Management D. handles compensation/pay of workers
_____5. Operations management E. effective/efficient use of company funds
_____6.Marketing management F. health care, educational, vacation leave

functions G. Settle differences between labor and
_____7. Recruitment management
_____8. Employee benefits H. oversee transformation of resources into

finished products
_____9. Incentives I. stimulation of demands for company products
_____10. Grievance procedure J. collect, organize, and distribute data needed

for the firm’s decision-making function
112
Essay: Being a manager of your own business, which of the five functional areas of
management do you think is the most important? Why? Explain your answer clearly
and concise.
Company Name: _________________________________________

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Summary
 The five functional areas of management are:
 1. Human Resources Management is the process of attracting, developing, and

maintaining and excellent workforce.
 2. Marketing Management is the process of managerial planning and carrying out the
conception, pricing, promotion, and distribution of ideas, goods, and services to bring
exchanges that satisfy individual and organizational goals.
113
 3. Operation Management is the study of how goods and services are produced in
organizations.
 4. Financial Management is the management and custody of organization’s funds,

seeing to it that funds are effectively utilized in order to provide for all the needs of the
various operating units of the organization.
 5. Information and Communication Technology Management (ICTM), is the

management of information and communication technology that collects, organizes,
and distributes data for the organization decision-making functions
References

114
MODULE 9
SPECIAL TOPICS IN MANAGEMENT
Introduction
Need a job? Why not create one? That’s what Aling Machie did after the pandemic
Covid-19 shut down her work as a saleslady. Being a wife and a mother of two kids, it is not
possible for her to stop and do nothing. She pursue her online business to properly provide
the needs of her family.
Learning Outcomes

1. explain the steps and importance of starting a family business (ABM_AOM11-IIj-40-41):
and
2. list down possible management mistakes that his/her future business will cause it to fail,
and give a solution on it.
Lesson 1. Starting a small-family business.
According to Cabrera et al. (2016) Entrepreneurship is an innovative, creative, risk-

taking, and growth-oriented behavior that brings new opportunities for
individuals/organizations to start a new business and produce new products/services that are
beneficial to society. Entrepreneurial ventures are organizations that persistently follow
opportunities characterized by creative and innovative activities that have service, growth, and
profitability as their principal goals
They also explained that Small business is a business that has fewer than 100 to 500
workers (depending on the prevailing commercial law in a particular country) independently
owned, operated, and financed; not always entrepreneurial in orientation and does not
115
dominate its industry; capital is low but is capable of producing goods or rendering services
designed to satisfy particular needs of customers.
Entrepreneurship also contributes some socio-economic benefits such as providing

employment for himself and other fellow Filipino citizens, thus helping solve the country’s
unemployment problems and additional source of tax of the government.
Entrepreneurial procedures includes the following according to (Cabrera et al, 2016):
a. formulate the business Vision-Mission statements;

b. segment the market into: geographical, demographical, psychological, and
behavioral;
c. find the target market;
d. understand the environment;
e. develop the business plan;
f. implement and monitor the business venture; and
g. maximize the utilization of business resources.
Business registration is a government requirement that orders new business owners

to furnish government agencies with necessary information prior to legal operation of your
business firm. The legal requirements in starting a business:
Basic permits
According to Victorino (2012, Nov 20) he explained clearly the following are the
business permits and licenses that are generally required to all business industries here in the
Philippines:
1. Barangay Clearance – The barangay clearance is a certificate that your business complies
with the requirements of the barangay where your business is located. To get a barangay
clearance, you may visit the barangay office where your business is located.
116
2. DTI Business Name (BN) Registration Certificate – This is the certificate of registration of
your business trade name. It gives you the power to use your registered business trade name
for business operation. It also protects your business name against being used and registered
by other business establishments. However, take note that DTI registration only gives you the
authority to use your business trade name, but it doesn’t give you the license to start operating
your business without getting the required licenses from other government offices, such as
BIR and Local Government Office (Mayor’s Office). Check out our post on how to register a
business trade name with the DTI.
3. SEC Certificate of Registration – Corporations (stock or non-stock) and partnerships have

to secure a certificate of incorporation or certificate of partnership with the Securities and
Exchange Commission (SEC) to be considered as legal or juridical entities. These certificates
are also used as a requirement for registering with the BIR, Mayor’s Office, and other
government offices. Take note that sole proprietorship businesses are not registered with
SEC, but they are registered with the DTI. To register with SEC, you may reach the following
SEC address and contact information.
SEC Building, Edsa, Greenhills, Mandaluyong City

Tel. Nos.: (+632) 726.0931 to 39
Email: mis@sec.gov.ph
Website: www.sec.gov.ph
or http://iregister.sec.gov.ph/MainServlet (for online registration)
4. Mayor’s Business Permit. Businesses have to secure a Mayor’s Business Permit or the
Local Government Office where their business are located and operated. Requirements in
obtaining a Mayor’s Business permit vary from different cities or municipalities. This permit is
also a requirement by the BIR in issuing a BIR certificate of registration. You may read our
post on how to get a Mayor’s Business Permit for more information.
5. BIR Certificate of Registration. Any business must be registered with the Bureau of Internal
Revenue to comply with the Philippine tax requirements. BIR registration will assign a TIN
(Taxpayer Identification Number) to the company or business owner, will give the business
authority to print its official receipts and invoices, and registered its books of accounts. To
117
register with the BIR, you have to go to the BIR office which has the jurisdiction of the place
where your business is located. You may check out our post here about registering a business
with the BIR.
6. SSS Employer’s Registration. Republic Act No. 8282 or otherwise known as the Social
Security Act of 1997 requires businesses or business owners who use the services of another
person or employees in business, trade, industry, or any undertaking to be registered with the
SSS (Social Security System). For more information, check out our post on how to register a
business with the SSS.
7. PhilHealth Employer’s Registration. All businesses and employers are also required to
register with PhilHealth to enable them to provide social health insurance coverage to their
employees. To check the requirements of registering your business with PhilHealth, please
visit this page.
8. Pag-IBIG Employer’s Registration. Employers also have to register with the Home
Development Mutual Fund (HDMF) to secure their Pag-IBIG Employer ID Number and to
provide the required benefits to their employees, who should be Fund members. Please
visit Pag-IBIG website for the registration process.
9. DOLE Registration. Businesses with five or more employees are encouraged to register
with the Department of Labor of Employment (DOLE) for the purpose of monitoring their
compliance with labor regulations. For companies with 50 or more workers, they are required
to register with DOLE, under the Bureau of Local Employment which administers the
registration of establishments.
Special permits
The following are the special or secondary permits that are usually required for
business establishments with special operation or industry.
10. Bangko Sentral ng Pilipinas (BSP) – for banks, financing companies, pawnshops, money
changers, and other financial institutions.
118
11. Bureau of Food and Drugs (BFAD) – for business related in the manufacturing, trading,
repacking, importing, exporting, distributing of any products related to food and drugs.
12. Bureau of Animal Industry (BAI) – for business related to animals.
13. Bureau of Fisheries and Aquatic Resources (BFAR) – for business related in fishing and
aquatics products.
14. Bureau of Forest Development – for exporters of forest products (e.g. logs, lumber
products, plywood, etc.).
15. Bureau of Plant Industry (BPI) – for business related to plants and vegetable crops.
16. Commission on Higher Education (CHED) and Department of Education (DepEd) – for
entities involved in providing education.
17. DTI-Bureau of Product Standards (BPS) – For commodity clearance for producers,
manufacturers or exporters, whose product quality after due inspection, sampling, and testing,
is found to meet established standards.
18. Fiber Industry Development Authority (FIDA) – for business related in fiber producing
products.
19. Forest Management Bureau (FMB) – for business related in lumber, logs, and other wood
product.
20. Garments and Textile Industry Development Office (GTIDO) – For all manufacturers of
garments and textile for exports.
21. Insurance Commission (IC) – for insurance and other IC regulated entities.
22. Intellectual Patent Office (IPO) – for registering your trademarks, logos, slogans,
processes and secret formulas.
119
23. National Food Authority (NFA) – for rice, corn and flour dealers.
24. National Subcontractors Exchange (SUBCONEX) – for those interested to tie up with
export oriented firms as sub-contractors/suppliers, provided they fall under any of the following
sectors: garments and handwoven fabrics, gifts and housewares, furniture and fixtures,
footware and leather goods, fresh and processed foods, and jewelry.
25. National Tobacco Administration (NTA) – for business related to tobacco products.
26. Philippine Coconut Authority (PCA) – for businesses related in grain-rice farming and
trading.
27. Technical Education and Skills Development Authority (TESDA) – for institutions involve
in technical education and skills development.
There are maybe other business permits that are required for certain types of businesses
aside from what we have listed and mentioned above. Moreover, please remember that
legalizing your business doesn’t only extend to registering it and securing a license or permit.
A legalized and compliant business is one that consistently complies with the government’s
laws and regulations from registration, to operation, and until cessation.
Reference: Department of Trade and Industry
Disclaimer of the above reference author according to website:
The information published on this page is for general information use only. New and
subsequent laws and regulations may render the whole or part of the article incorrect or
obsolete. This post doesn’t also constitute professional advice. For more information, please
make an inquiry or consult with the government agencies that have authority or jurisdiction on
your certain business.
120
Assessment Tasks
TASK NO. 1 (WRITTEN WORKS)
Instruction: Fill in the Blanks. Put your answer on the space provided before each
number.
_______________ 1. Business owned by one person is called ____________________.
_______________ 2. Business registration documents have to be submitted to the

Department of ________________ for commercial registry.
_______________ 3. The external _____________________ environment includes the

business organization’s customers and suppliers.
_______________ 4. The _________________ serves as the roadmap which the business

must follow.
_______________ 5. The __________________ data refers to capital needs, available

funds, and possible loan services.
_______________ 6. _____________ is the business formed when two or more persons

formally agree to be joint owners of the said business.
_______________ 7. _____________ is the innovative, creative, risk taking, and growth-

oriented behavior __________ that bring about new opportunities for individuals and
organizations to start a new business and produce new products that are beneficial for
society.
_______________ 8. The _______________ target market considers the population,

customer’s age, education, income, and marital states.
_______________ 9. Entrepreneurs must be _________________ to adapt to the

changing environmental conditions.
_______________ 10. A ____________________ is elected by stockholders on a regular

basis to manage corporations.
121
Essay: List down 5 items, negative influence of bad judgment and management
mistakes that possible to happen to your future business that will cause it to fail.
Company Name: _________________________________________

1.________________________________
2.________________________________
3.________________________________
4.________________________________
5.________________________________
And state below your solutions to overcome the identified bad judgments and
management mistakes that may happen to your future business.
1. _________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2.__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3.__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
4.__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
5.__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
122
Summary
 Small business is a business that has fewer than 100 to 500 workers (depending on
the prevailing commercial law in a particular country) independently owned, operated,
and financed. The legal requirements in starting a business:
 Basic Requirements:
1. SEC registration - for registering as a partnerships or corporation.
2. DTI registration - for registering trade name.
3. Mayor's business permit - for getting the license to operate in the city or
municipality and payment of your local business taxes.
4. BIR registration - for getting TIN official receipts and invoices.
5. SSS, Phil health and Pag-Ibig Fund registration - for registering yourself or
company as an employer.
 Some Special Requirements:
1. BSP - Ex. Pawnshop, money charger, and other finance institution.
2. BFAD - Ex. Foods and drugs
3. CHED and DepEd - Ex. Schools and entities involved in providing education.
References

 Victorino, A. (2012, November 20). List of Business Permits and Licenses in the
Philippines. Businesstips.Ph. https://businesstips.ph/list-of-business-permits-and-
licenses-in-the-philippines/
123

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Organization and Management

Rogie Ramos Francia, LPT

Module 9: Special Topics in Management

At the end of this module, the learners should be able to:

Cabrera et al (2016) defined Staffing as the

The definition of staffing according to

Variables to consider in the system approach to staffing according to Cabrera et al

Management Successions / Replacements Chart contains the names of potential

Lesson 2. Process of Recruiting, Selecting, and Training of Employees

1. Forecasting – is an assessment of future human resource needs of the organization

2. Programming – means translating the forecasted human resource needs to

The foundations of HR Planning are:

1. Job Analysis studies what is done in a job and why

2. Job Description details the duties and responsibilities of a job holder,

3. Job Specifications list the qualities required of a job holder

2 Types of Recruitment according to Cabrera et al. (2016):

1. External Recruitment is the recruitment of applicants for filling-up vacant

1.1 Advertisements 1.6 Educational Institutions

2. Internal Recruitment is the recruitment of applicants for the filling-up vacant

Ways of Determining the Qualifications of a Job Candidate (Medina, 2015):

1. Application Blanks- Provides information about a person. Ex: Biodata,

1. Psychological Test is an objective, standard measure of a sample behavior

1.2 Proficiency and Aptitude Test – measures a person’s capacity or

Induction and Orientation – After an applicant is finally selected and subsequently

Training and Development – If the newly-hired (or newly-promoted) employee is

Cabrera et al (2016) defined Training

1. Training Programs for Non-Managers. This type of Training is directed to non-

Development is the learning given by organizations to its employees that is geared

Developing employees is a part of the organization’s career management program

The different learning principles include: modelling, feedback and reinforcement,

Lesson 3. Guidelines on Compensation/Wages, Performance

One of the important aspects of staffing is employee compensation. Compensation

1. Performance – The achievement of the organization’s

Compensation Types according to Cabrera et al. (2016):

1. Direct – refers to salaries, incentive pays, bonuses, and commissions.

Employment Decisions. After evaluating the performance of

Separation It is either a voluntary or involuntary termination of an employee’s services.

Lesson 4. Employee Relations and Employee Movements

Employee Relations is defined as the workers/employees being connected or related

Employee Movement are series of actions initiated by employee

Employees unionize because of financial needs, unfair management practices, and

Source: https://mywestford.com/blog/importance-of-collective-bargaining-in-industrial-relations/ (2016)

TASK NO. 1.1 (WRITTEN WORKS)

_____ 2. The General Organizations Chart is also called Management Succession

_____ 3. Internal recruitment may be practiced in Companies today.

_____ 4. Advertising and Internet recruiting methods increase the possibility of

_____ 7. Training programs, in order to be successful, must have clear instructional

_____ 9. Performance evaluations done by companies never fail.

1. The foundation of any labor-management relationship is ________________________,

2. ______________ is a learning principle that uses personal behavior to demonstrate

3. Choosing of individuals to hire from a pool of qualified applicants is called

4. ______________ recruitment is the inviting of applicants for filling-up vacant job

6. _____________ is learning given by organizations to its employees that concentrates

7. Salaries and bonuses are _________ compensation types.

8. ______________ is defined as the workers/employees being connected or related to

9. The ____________________ purpose of performance evaluation are used for

10. Developing employees is a part of the organization’s ______________ management