BUSINESS &

MANAGEMENT

(FOR CLASSROOM DISCUSSION ONLY NOT

FOR CITATION AND DISTRIBUTION)
 BUSINESS DEFINED:

 An organization or entity, engaged in commercial,

industrial, or professional activities.
 Can be profit or non-profit.
 An evolutionary growth of various activities
developing from a simple to a complex system.
 With organized efforts and activities to produce and
sell goods and services for profit.
 BUSINESS & ECONOMY

 Provides both goods and services.

 Offers various opportunities (innovation, job,
competition, etc.).
 Provides income to the government (through taxes).
 Contributes to economic growth and extends to
development.
BUSINESS & ECONOMY
 ELEMENTS of BUSINESS
SYSTEM
 Land
 Labor
 Capital
 Entrepreneurial Skills
Motive in Engaging a BUSINESS

 Extrinsic Motivations (Profit)

 Personal Meaning (Guy Kawasaki)
 Satisfaction of doing something great (Steve Jobs)
 Seeing the real value of one’s beliefs (Mark
Zuckerberg)
 Making a difference in the world (Bill Gates)
BUSINESS HIERARCHY OF
NEEDS
 KINDS OF BUSINESS

 INDUSTRY
 Production, processing, & fabrication of goods.
 Forms: Primary ; Extraction ; Manufacturing ; Constructive
 COMMERCE
 Distribution of goods and services
 Forms: Trade ; Auxiliaries of Trade
 SERVICES
 Forms: Public, Community, Professional ; Recreation
 KINDS OF ECONOMIC
SYSTEM
 SOCIALISM
 The ownership of production and capital by the government and
the regulation by society, as a whole, of the process of production
and distribution, and of the giving of essential services.
 CAPITALISM
 It is a system in which the means of production are owned and
operated by private individuals.
 COMMUNISM
 The collective ownership by the government of consumption goods
and production goods.
 FORMS OF BUSINESS
ORGANIZATION
 SOLE PROPRIETORSHIP
 An entity that is owned an operated by only one individual.
 The most numerous form of business.
 Accounts for little in the way of aggregates business receipts.
 FORMS OF BUSINESS
ORGANIZATION
 SOLE PROPRIETORSHIP (Advantages)
 Ease of formation & dissolution.
 Low start-up cost and low operational overhead.
 Ownership of all profit.
 Subject to fewer regulations.
 No corporate income tax. Only individual income tax.
 FORMS OF BUSINESS
ORGANIZATION
 SOLE PROPRIETORSHIP (Disadvantages)
 Unlimited liability.
 Limited life.
 Difficult in raising capital.
 Initial sources of funds are from personal savings for start-up of
the business.
 FORMS OF BUSINESS
ORGANIZATION
 PARTNERSHIP
 An entity that is owned by two or more persons and they agreed
to contribute money, property, and industry with the intention
of dividing profits among themselves.
 Follows the Articles of Partnership
Types:
 General Partnership
 Limited Partnership
 Limited Liability Partnership
 FORMS OF BUSINESS
ORGANIZATION
 PARTNERSHIP (Advantages)
 Synergy
 Relatively easy to form
 May subject to fewer regulation than corporation.
 Stronger potential of access to greater amounts of capital.
 No corporate income tax. Declares income by filing a
partnership income tax return.
 FORMS OF BUSINESS
ORGANIZATION
 PARTNERSHIP (Disadvantages)
 Unlimited liability
 Limited life
 There is a real possibility of dispute or conflicts between
partners.
 FORMS OF BUSINESS
ORGANIZATION
 CORPORATION
 An entity that is an artificial being operated by the law having the
rights of succession and the powers, attributes and properties
expressly authorized by law or incidence to its existence.
 Follows the Articles of Incorporation
Types:
 Stock or Non-Stock Corporation
 Parent & Subsidiary Corporation
 Domestic or Foreign Corporation
 FORMS OF BUSINESS
ORGANIZATION
 CORPORATION (Advantages)
 Unlimited commercial life
 Greater flexibility in raising capital
 Ease of transferring ownership
 Limited liability.
 FORMS OF BUSINESS
ORGANIZATION
 CORPORATION (Disadvantages)
 Regulatory restrictions
 Higher organizational and operational cost
 Double taxation
 FORMS OF BUSINESS
ORGANIZATION
 COOPERATIVE
 An association of persons (organization) that is owned and
controlled by the people to meet their common economic,
social, and/or cultural needs and aspirations through a jointly-
owned and democratically controlled business (enterprise).
 Follows the Articles of Cooperative
Types:
 Credit, Consumer, Producers, Marketing, Service, Multi-purpose,
Transport (as classified by Philippine Maritime Laws)
Cooperative.
 MANAGEMENT

• Is a distinct process of planning, organizing, staffing,

directing, and controlling.
• Performed to determine and accomplish stated
objectives by the use of human being and other
business resources.
• Provides future business leaders with a sound
working knowledge of policies and practices that
govern business & social orientation.
FUNCTIONS of MANAGEMENT

 Planning
 Refers to the formulation of objectives, program, policies,
procedures, rules and regulations.
 Requires decision making.
 Involves selecting the best course of action that a business
will follow.
 It involves forecasting thus making decision in advance.
 It is thinking before doing.
FUNCTIONS of MANAGEMENT

 Organizing
 Is the grouping together of people, establishing among
them, and defining the authority and responsibility that the
personnel have in use of company’s material resources to
attain predetermined goals and objectives.
 To provide everything useful or its functioning.
 Involves determining and providing human and non-
human resources to the organizational structure.
FUNCTIONS of MANAGEMENT

 Staffing
 Is the function of manning the organization structure and
keeping it manned.
 To put right man on the right job.
 It involves manning the organization structure through
proper and effective selection, appraisal and development
of personnel to fill the roles designed on the structure.
FUNCTIONS of MANAGEMENT

 Directing
 Actuates the organizational methods to work efficiently for
achievement or organizational purposes.
 Life spark of the enterprise.
 An interpersonal aspect of management which deals
directly with influencing, guiding, supervising, motivating
subordinate for the achievement of organizational goals.
 Elements:Supervision, Motivation, Leadership,
Communication
FUNCTIONS of MANAGEMENT

 Controlling
 Is the process of measuring & correcting the activities of
subordinates and the company itself to assure conformity
to plans.
 Measures performance against goals and plans.
PRINCIPLES of MANAGEMENT

 Division of Work
 The assignment of specialized jobs to various departments
and/or position.
 Authority & Responsibility
 Authority – the power or the right entrusted to make the work
possible.
 Responsibility – duty or work assigned to a particular position.
 Unity of Command
 Employees should receive orders from one superior only.
 PRINCIPLES of MANAGEMENT

 Subordinate of Individual Interest to General Interest

 The interest of one employee or group of employees should not
prevail over the interest of the business.
 Remuneration
 Should be fair and afford the maximum possible satisfaction to
employees and employer. Equal pay for equal work.
 Centralization
 Extent to which authority is concentrated. It is a system of
management wherein major policies are made only by the Top
Management.
PRINCIPLES of MANAGEMENT

 Scalar Chain
 A “chain of superiors” from the highest to lowest rank.
 Esprit de Corps
 “In union there is strength”. It emphasizes the need for
teamwork and the importance of communication in obtaining
it.
 Span of Control
 Refers to the specific and limited number of subordinates
that a manager can effectively handle and control.
 PRINCIPLES of MANAGEMENT

 Simplicity
 Unnecessary elements should be eliminated from all activities
as well as from the process and procedures established for
carrying them.
 Unity of Direction
 One boss and one plan for a group of activities having the
same objective.
 Order – Ensures a place for everything.
 Equity – Results from kindness and justice.