Q1W1
Usually, it helps to increase productivity in human-oriented work
MANAGEMENT - Management is the process of working with and through
others to effectively achieve organizational objectives by efficiently using
limited resources in a changing environment. (Kreitner.)
- Management is “the art of getting things done through people.”- Mary
Parker Folett
- Management is the process of reaching organizational goals by working
with and through people and other organizational resources and has the
following characteristics:
a. Management manners of continuous and related activities
b. Management encompasses on reaching organizational objectives.
c. Management refers to a group of people involved in managerial
endeavors.
d. Management is intangible function. It cannot be physically seen but its
presence can be felt
MANAGERIAL FUNCTIONS
The four major management functions that make up the management
process are PLANNING, ORGANIZING, LEADING, and CONTROLLING.
1. Planning
This is the first and foremost function that involves deciding tasks that must
be performed to attain organizational goals. It includes outlining,
establishing targets, making policies and so on. This activity is also
concerned with the success of the organization in the long run.
2. Organizing
Organizing involves the act of identifying and assigning the tasks and duties
developed in the planning stages to subordinates to create a process and
put plans into action. People within the organization are given tasks to make
outputs that contribute to the goals of the division and to the company as a
whole.
3. Influencing
Influencing is also known as leading, supervising, motivating, or directing by
guiding the activities of organization members towards the fulfillment of the
goals.
situations, and it generates higher levels of production.
4. Controlling
It involves establishing performance standards by making sure that the
performance of employees is as per the plan. Controlling is both a
managerial function and a continuous process where the manager: (a)
gathers information that measures performance; (b) compares present
performance to pre-established performance norms; and (c) determines the
next action plan and modifications for meeting the desired performance
parameters.
MANAGERIAL THEORIES
Evolution of Management in the last eighteenth century has been evolving
to a variety of contemporary management theory including the classical,
behavioral, quantitative and new theories. Each theory is inclusive with a
view on specific time frames to meet the specific phenomenon and existing
management needs.
Classical Theories
1. Scientific Theory - Ideas of early management by Frederick W. Taylor, Jill
Perth, and Gantt were formed by the impact of natural methodology and it
emphasized rational thinking based on scientific work to improve individual
efficiency.
2. Administrative Theory - The administrative view proposed by Henri Fayol
and Max Weber highlighted the importance of operational effectiveness on
the whole organization to develop a general theory explaining the good
management features of infrastructure.
Behavioral Theories
1. Hawthorne Experiment - This study disclosed that Classical Theory is
mainly focused on the organization itself and employees with a power-
driven perspective concentrated on the point of view of human nature, the
importance of individual attitudes and behaviors, motivate employees in
improving productivity. It suggests that employees will perform better when
they feel nurtured.
2. Interpersonal Perspective - This was proposed by Maslow and McGregor
(X&Y theory) that provided a basic foundation of the behavioral view on
human relations and was further derived from the Hawthorne experimental
results showing that the productivity of employees is affected by the
interaction and affective atmosphere of the management that leads to
better performance.
Quantitative Theory
Quantitative Theory originated during World War II. A theory that resulted
to orderly thinking by defining and solving complex problems. The use of
quantitative measurement and computer modeling theory such as analysis
of complex business problems which gradually become a branch of the
management science and operations management perspective.
New Theories
1. System Theory - This emphasizes that there is a gradual integration of a
new theory through a system point of view and the contingency perspective
which successfully meets the inconsistencies that sprouted in the Classical
and Behavioral Theories.
2. Contingency Theory - In this perspective, the industry focuses on how to
adapt the environmental change and believes that there is no "universal
approach" for the management to solve such circumstances since all
management challenges depend on varying conditions. It highlights that the
current time would always be the appropriate condition for the
management to handle specific and managerial variations.
Q1W2
One of the characteristics of an organization is being organized by section,
department or division. Top management is responsible on the entire
organization or at least one of its larger sections. They develop goals,
strategies, policies, and direct the business. Middle management oversees
major departments or divisions and their specialized units. They monitor day
to day results and make sure that performances are in compliance with the
organization’s standards. The first level of management supervises a small
work group composed of non-managerial workers.
Three Basic Managerial Skills
In order to implement managerial functions such as planning, organizing,
influencing and controlling, managers must use variety of wide skills. A
skilled manager is consistent in delivering his ability at any functions of
management level. The degree of which type of skills must be used will
depend on the level of where he is in. There are three basic skills a manager
should have which are:
• Technical Skills - skills of being able to carry out tasks with
proficiency. These skills are specially important to supervisory
management because they are the closes to employees who
produce goods or services for the company
• Human Skills - skills related to working with people and bringing out
the best in them. These skills include the ability to understand
human behavior and to communicate effectively with others.
• Conceptual Skills - skills of being able to see the organization as a
whole. These skills allow the managers to evaluate and scrutinize
the situation and develop courses of actions. It is necessary for the
top management to have good conceptual skills.
Management Roles
According to Henry Mintzberg, a Canadian academic author on business and
management, roles of a manager falls into three main categories namely:
Decisional, Informational and Interpersonal roles. Ten managerial roles fall
into these categories which was divided into is main functions.
• Decisional roles - It involves using information and related with
ways by which managers cope with problems and grab
organizational opportunities (e.g. entrepreneur, disturbance,
negotiator)
• Informational roles - It involves processing information. It is related
with tasks of acquiring and conveying information (e.g.
disseminator, spokesperson, monitor)
• Interpersonal roles - It involves providing information and ideas. It is
related with connections with several stakeholders regarding the
mission and direction of the company. (e.g. liaison, leader,
figurehead)
Responsibilities of Managers
A manager is not only a team leader but also a planner, organizer, coach,
problem solver, decision maker etc. Most of the time, you will find them
busy doing lots of errands in the company because they have a lot of
responsibilities. Below are some of their common responsibilities
1. Hire great people 7. Manage resources
2. Show performance management 8. Improve processes and quality
3. Promote team development 9. Encourage self-development
4. Set overall directions 10. Communicate and disseminate
5. Support team members information
6. Produce unique quality outputs
Q1W3
Environmental factors have always something to do with the performance of
each organization. Assessment of the level of opportunities and threats
helps the organization in decision making to align their strategies. A fast-
paced industry, which is uncontrollable, may develop a scenario that can
change the condition of business just in no time. Businesses are greatly
influenced by the environment. Internal and external factors impact firms.
Therefore, managers must analyze the trade market and the environment to
foresee where the organization will be in future.
Three Stages of Business Environment
The business environment involves all of the internal and external factors
that affect the company as a whole including employees, customers,
management, supply and demand and business regulations. It can be
classified into three stages namely: general environment, operating
environment, and the internal environment
1. General Environment (external)
General environment is a phase of organization’s external factors that
affect the organization eventually. It includes the following elements:
• Political/Legal has something to do with government policies,
passage of laws and politics, and regulatory body and processes.
• Economic has something to do with taxation issues, exchange rates,
inflations, stock market and other phases of economy
• Social has something to do with demographic, war of talent,
generation of learners, interest and values of public
• Technological has something to do with development and maturity
of technology through new ideas, concept and approach
2. Operating environment (external)
Operating environment is a phase of organization’s external factors that
directly affect the business. It has a rapid effect on the organization. It
includes the following elements:
• Customer has something to do with person or group who purchase
products or service from a company
• Supplier has something to do with individuals or business who
provides goods, raw materials or services to an entity needed for
their production
• Competitor has something to do with individuals or entity who
responds the rivals against another in the same industry
• Pressure Groups has something to do with environmental issue that
affects the business through their project, demands, course,
campaigns etc.
3. Internal Environment
Internal environment is composed of factors within the organization
which impacts on success and approach of a firm. Structure, current
employees, management, and especially corporate culture which defines
behavior of employees. Some of the elements of internal environment
affects the organization as a whole, others affect only the managers.
• Company mission describe what the organization stands for and
why it exists.
• Policies are principles that govern how situations should be
addressed.
• Structure is the hierarchical arrangement of people and their
responsibilities.
• Resources are the people, facilities, infrastructure at an
organization’s clearance.
• Corporate culture is the organization’s personality. It consists values,
beliefs, attitudes and standard that define employee’s success
Among these elements, corporate culture is essential to employees as
they are more motivated to work if their values and beliefs are in line with
their leaders and in the organization as well. Firms with a positive company
culture are more likely to succeed and have a higher retention rate because
they invest in their employees. As a result, organization with driven
employees tends to be more productive and successful.
Local and International Environment
One of the reasons why businessmen expand their businesses are to
increase their profit and to reach the growth of their firm in a period of
time. Some of the local firms who are seeking to expand internationally find
challenges in extending the following factors: (1) Political and legal
differences- national environment will always be different from the other
countries and it should be noted that adjustment will occur. (2) Cultural
differences is one of the difficult aspect especially if your firm is not
diversified (3) Economic differences such as exchange rates that varies
country from country to country (4) Religions, genders and other restrictions
and etc.
Before entering into new ventures, manager needs to analyze the
positive and negative side of environment so he can assess what are the
necessary steps to be taken. PEST and SWOT are closely related approaches
to business analysis.
• PEST - an acronym of Political, Economic, Social, and Technological,
is an analysis that helps leaders determine the impact of
environmental factors on the business. PEST focuses on external
aspects that affects the firm. It explores political and legal scenery
by looking political issues and regulations that influence the
business. Economic factors fall on economic environment and
business cycle globally. Social has something to do with social
mobility and consumer demographics and trends. Technological, on
the other hand, focuses on the research and development issues as
well as the emerging technologies
• SWOT - an acronym of Strength, Weakness, Opportunities, Threats.
SWOT analysis focuses on both internal and external environment
aspects of organization and best done after PEST scrutiny. It
captures the external factors in the opportunities and threats
segments. Prospects in developmental performance of the company
will be opportunity and threats if the factors will slow down the
performance of the company. In analyzing internal aspects,
resources advantage will be the strength and its deficiency will fall
on weakness.
Q1W4
Before running a business an entrepreneur or a manager considers
how his business should be structured. This decision making is very
important because it will affect the business in all stages of development of
the organizations. From the beginning where the paper works is necessary,
in the middle where he needs to decide for stability, during high
performance, during chaos and even in closing of his business as well. The
manager needs to understand the advantages and disadvantages of each
form in order to make sure that he is in the right decision. Common forms of
business organizations depend on nature of ownership and its primary
activities.
What is the best structure of a business organization in terms of
ownership? The answer on that question depends on the conditions of the
owner/s. There is no form better than any other as long as all business
owners evaluate their own needs. Now, let us check the three basic forms of
business organizations below.
SOLE PROPRIETORSHIP – It is a form of business organization owned by a
single person only and usually an individual who has a daily responsibility for
running his business. Sole proprietorships are attractive to small investor
and according to research vast majority of small business start out with this
form of business organization.
Advantages:
- Formation: It's easy to form, set up and dissolve
- Decision making: Offers complete control of the owner
- Tax benefit: No requirement to file business reports
Disadvantages:
- Resources: Has a limited resource and might have difficulties in
raising initial funds
- Liability: Owner will be directly responsible for any losses - Tax
benefit: The owner is taxed not the business
- Continuity: Business exists only during owner’s lifetime and will be
terminated upon to demise, insanity or imprisonment
PARTNERSHIP – it is a form of business organization owned by two or more
people who shares business. Partners should have mutual and legal
agreement in sharing their money, property, skills and resources that will be
needing to operate their business and the division of their profits as well.
Advantages:
- Less expenses: It's easy and inexpensive because two or more
people will share the capital of the business
- Commitment: There will be shared financial commitment among
partners
 - Complimentary skills: there will be sharing and utilizing of skills,
strength, resources of each partner
Disadvantages:
- Liability: joint and individual liabilities. Partners are not only liable
to their actions but also for the decision made by other partner
- Disagreement: disagreements in decision making might occur if
partners will not consult to each other before compromising
- Less profit: two or more people will share profit of the business
• CORPORATION – it is a form of business organization owned by
shareholders. Shareholders are investors who has put money into
business. There is an election of board of directors like president,
vice president who will be responsible in every different policies for
the corporation. There is also person appointed to monitor the day
to day operation of the corporation. In this form of business
organization, shareholders will not be liable for the debts of the
corporation and even on the death of the shareholders, corporation
still continues because shares in the company is transferable.
Advantages:
- Separate legal personality: Shareholders of the corporation has a
separate legal personality therefore they will not be liable for the
debts and negligence of the corporation. The amount invested by
the shareholder will be the only lost of the shareholders
- Easy to raise funds: In corporation you can sell shares therefore
there’s an ease raising funds - Continuity: Investors has a separate
identity in corporation. This means that even in demise of the
shareholder, shares could be transferred to another investor
- Credibility: A word corporation in the name of the business attracts
more customers, partners and the community as well
Disadvantages:
- Long time and more money spent in organizing: Unlike sole
proprietorship, forming a corporation takes a lot of time and money.
- Paper works: a lot of documentation requires in forming a
corporation. It requires annual reports and other documents to be
submitted in regular time
- Higher Tax: In corporation, individual level and the corporate itself
are subject to higher taxes
- More costly: A lot of meeting occurs in corporation, monthly, semi
annual and annually sessions that incur expenses. Corporation hires
a legible consultants for their business that are high-paid individuals
Aside form the nature of ownership, business organization can be
classified according to its primary activities such as: (1) Service – a business
that offers services in exchange of a fee (2) Merchandising – a business that
buys and sells product whether it is raw or finished material with a certain
mark up to earn profit and (3) Manufacturing – a business that buys raw
materials and transform it to a certain finished product and then sell to
consumers, wholesalers, distributor and other large scale groups.
The Role of Business Organization in Relation to Society and Economy
One of the roles of business organization in society is to produce
goods and services that satisfy the needs and demand of community. We
have implicit assumption when we talk about the role of business in society.
Others assume that business exist separate from society. However,
businesses are one of the factors how we constitute a society and how do
we live and cope in society. Businesses has a high chance of success if they
operate in a stable society and o. And a society composed of a competitive
business organization is a stable society in vice versa. Thus, there is a mutual
benefit of corporate social responsibility between business and society as a
whole.
Most of the organizations are aiming to grow, expand
internationally, and earn commensurate profits. Consequently, they can
keep their old client, find more partners, get more opportunities and create
more jobs. Once the business established its credibility, they enter into
corporate social responsibility whereas they practice involving their
organization in aiding or helping the in needs. Some of the organization
involve their company in funding a program that concerns environmental
factors. There are multiple ways and means by which a company can express
that it is socially responsible such as company donates money or goods,
spending time for a cause with homeless and free education etc.
Q1W5
What is economic development?
Economic development is the term used by economist and
policymakers and have frequently used for the last decades. It has a direct
relationship with the term environment.
 • Economic development is the process which state improves its
economy and social living of its people. It can be defined as efforts
that seeks improvement of life and community.
• Economic development is the development of economic wealth of
the country or regions for the well-being of their inhabitants.
• Economic development measures not just a monetary terms but
also some indicators in education, health and social using Human
Development Index
FIVE PHASES OF ECONOMIC DEVELOPMENT
Categorizing countries with label of “developed”, “developing”, “first
world” or “third world” are based on judging country’s development. What
is the meaning and difference between those labels? Why countries are
moving forward and why others are labeled “developing”? Lots of economist
and geographers studied the process how will one country be developed
and attain its higher economic level.
Five stages of economic development were explained by Mr. Walt
Whitman Rostow, an American economist, in his book entitled “The Stages
of Economic Growth” in 1960. He said that in order to be a developed
country, one nation must pass the five phases namely: (1) traditional stage,
(2) pre-take off stage, (3) take off stage, (4) maturity stage, and (5) high
mass consumption.
1. Traditional Stage – The first stage of economic development
whereas the economy is agricultural-based dependent where most
of societies begins before progressing towards next stage. It is a
“primary sector” economy.
Characteristics:
• Agricultural function is the main sources of GDP rates and also
provides employment opportunities to the nation.
• Influence customs and beliefs of the country.
• Te standard of living and per capita income in this stage are low.
• Limited technology
2. Pre-take off stage – The second stage of economic development
where society begins to develop trade viewpoint. It includes
different factors which are related to production.
Characteristics:
• There is an increase of technology existence
• There is an export opportunity for raw materials
• Social mobility of individuals begins
• Flux social structure
• widespread and enhanced investment in changes to the physical
environment to expand production
• Developed infrastructure facilities
• Capital and production of food grains increases
3. Take-off stage – The third stage of economic development which is
called stage of economic development. In this stage,
industrialization begins to occur.
Characteristics:
• “secondary sector” expands (goods producing)
• Technological and political breakthrough occurs
• Urbanization increases
• National income increases
• Entrepreneurship discoveries in their inner anouter capability
• More employment opportunities were offered through new schemes
4. Maturity stage – the fourth stage of economic development where
new technologies interventions help the old scheme to come up
with innovative structure
Characteristics: those who have money multiply, while an influx of cheap rural labor
• Employment opportunities and national income continues to rise to the cities holds down wages
• Latest techniques were spread 4. Human capital based – it refers to the skills and knowledges
• Large scale of investments earned by people through trainings and seminars that contributes to
• Diversification of multiple industries the growth of economy.
• Rapid development of transportation infrastructure 5. Post-demographic transition – This theory refers to the change of
• Innovative entrepreneurial skills increase birth an death rates from high to low with the interventions of
advance technologies and education.

5. High mass consumption stage – the fifth stage of economic
development where economy is fully developed and self-sustained.
Characteristics:
• High national income
• Advance in research and development
• Optimum utilization of resources
• High per capita income
• Widespread consumption of high-end consumer goods
• Urbanization
• Huge industrialization dominates the country
W.W. Rostow emphasizes that countries go through each of these
stages relatively, and set out a number of conditions that were likely to
occur in investment, consumption, and social trends at each state. The
transition periods may occur at varying lengths from region to region
and from country to country but not al the condition needed to arise.
What is the impact of these developmental stages to business
environment?
Employment opportunities help the community to earn profit that
helps the government to provide services to its people. Economic
development serves a retention of opportunities for jobs and
investments within the country. The taxes are used by government to
provide services like transportation, infrastructure, recreational,
protections and safety services and etc.. A developed country receives a
lot of investments from private sectors that creates job opportunities
that leads to country’s wealth.
Economic growth is important for the developing countries as it
helps to solve macro-economic objectives such us it reduce poverty and
unemployment, it improves public services and helps GDP (Gross
domestic product) ratios to increase. Therefore, the business
environment will rise up accordingly once the economy of one country
has developed.

On the other hand, some geographers and economists do not

support the theory of W.W. Rostow as it is only biased in western
countries and still believe to adapt the following stages in economic
development.

1. Malthusian – A theory that economic growth depends on the

population of certain area
2. Government-led – (Local Economic Development) It is an
approach which encourage and allows partnerships between local
and national to achieve sustainable economic growth
3. A la Kuznets – (government vs. environment) progression
suggests that early in development, investment opportunities for