nal Structure Types of Organizat This is essentially the process by which the organization's mission is divided into discrete roles tasks of individuals within the organization, There are different ways of doing this. All essentially by grouping key activities in the organization and then allocating roles/tasks to individuals. This can fall into following categories: Functional Product/service Geographical Functional- grouping of major functions e.g. contracting, information, finanee, personnel and public health in health authorities Advantages: * Increases utilization and coordination of groups of people with technical/specialized expertise * Increases development and career opportunities for people in departments, Disadvantages + Encourages sectional interests conflicts * Difficult for organization to adapt to productservice diversification ProductService- grouping by service/product. For example, in a hospital, into orthopedic, surgical, psychiatric rather than medical, nursing, paramedical, hotel serviees (functional). Advantages: + Increases diversification + Adaptability increased if service/product requires technical knowledge or large equipment Disadvantage + Encourages service conflicts Geographical-a national service develops regions, areas or district authorities. Advantage: + More responsive and local/regional issues and different cultures, national/local laws. Disadvantage: * Can lead to localitiesregions conflicting with each other Divisional- grouping of services andlor geography and functionality (but with functions such as finance, personnel, planning retained at headquarters). Advantages: * Suitable for intemational companies who are highly diversified, working in more than one country. For example, a pharmaceutical company with divisions in each country producing and marketing products developed by the parent company. + Corporate strategic contro! with production and marketing independence at divisions Matrix- grouping of projects and functions Advantages: * Combines vertical and lateral lines of communication and authority* Stability and efficiency (of mechanistic structure) with flexibility and informality (of inorganic structure) + Emphasizes that all project aims are all-important Disadvantages: + Potential conflict between project leacler and functional leader regarding resources + Project may be jeopacdized if project members as well as leaders enter the conflict on opposite sides + Does not tolerate diversification well CENTRALIZATION AND DECENTRALIZATION Centralization when all the power of decision making rests at a single point in the organization ultimately in the hands of one person or group, the structure is centralized. If the power is dispersed among many peoplefgroups, it is known as decentralized or distributed. Advantages: Frees top management of routine everyday decisions to concentrate on strategic responsibilities, Decisions are more local, quicker, more responsive to clients, Increased awareness of cost effectiveness through the organization Increased motivation and satisfaction by junior management disadvantages: Requires good communication and adequate control to and from the center Need for center coordinate/integrate Can lead to inequity in treatment of clients Need individuals willing to take additional responsibilities In general, large organizations leans towards: + Less centralization + More specialization + More mules and procedures to be followed LEVELS OF THE ORGANIZATION According to Drucker, organizations are layered into three main levels: * The technical level of the organization is concemed with specific operations and defined tasks, With actual jobs to be «lone, and with performance of the technical function, + ‘The manageriad level (or organizational level) is concemed with the coordination and integration of work, at the technical level, eg. resource allocation, administration and control of the operations of the technical function + The community level (or institutional level) is concerned with the broad objectives and the work of the organization as a whole. Decisions made at this level will include the selection of operations, development of organizations in relation to external agencies and the wider social environment. MINTSBERG’S NINE DESIGN PARAMETERS Design assumes discretion, an ability to alter the system. In the case of the organizational structure, design means ‘turning those knobs’ that influence the division of labor and the coordinating. mechanisms thereby affecting haw the organization functions. Consider the following questions, which. are the basic issues of structural design 4. How many tasks should a given position in the organization contain, and how specialized should each task be? To what extent should the work content af each position be standardized”? ‘What skills and knowledge should be required for each position? (On what basis should positions be group into units and units into larger units? How large should each unit be; how many people should report to a given manager? To what extent should the output of each position or unit be standardized”? peepsWhat mechanisms should be stablished to facilitate mutual adjustment among positions and units? How much decision power should be delegated to the mangers of line units down the chain of authority? How much decision power should pass from the line managers to the staff speci operators? sand These nine design parameters are the basic components of organizational structure and they fall into four broad groupings: Groups Design Parameters Related Concepts Design of Job speci positions Behavior formalization | Standardization of work content Basie division of labor ‘System or regulated flows Training and indoctrination | Standardization of skills Design of Tait grouping, Direct supervision superstructure Administrative di sion of labor Systems of formal authority, regulated flows, informal communication, and work constellations Organogram Unit size ‘System of informal communication Direct supervision Span of control Design of lateral | Planning and control “Standardization of output linkages systems System of regulated flows Liaison devices Mutual adjustment ‘Systems of informal communication, work constellations, and ad hoc decision processes Design of decision | Vertical decentralization | Administrative di making processes ‘Systems of formal authority, regulated flows, work sion of labor constellations, and ad hoc decision processes Horizontal decentralization | Adminisirative division of labor Systems of informal communication, work constellations, and ad hoc decision processes ORGANIZATIONAL RELATIONSHIPS Work Design Form: ‘Work ean be combined in various forms, Decisions on the methods of groupings will consider: The need for coordination The identification of clearly defined divisions of work economy The process of managing activities Avoiding conflict, and the design of work organization which takes account of the nature of staff employed, their interests and job satisfaction line vertical flow of authority funetional- between specialists in advisory positions and line management teams staff: personal assistants to senior members Span of Control- number of direct reports. Influencing Factors: nature of organization, complexity of work, range of responsibilities ability of personal qualities e.g. capacity of the manager time available to spend with subordinates ability and training subordinates effectiveness of coordination, communication, control systems physical location of subordinatesPeople- Organizational Relationships People and Organizational Relationships SN Classification of objectives Tasks and element functions Division of work and grouping of people Centralization and decentralization Principles of organization Span of eontrol and sealar chain Formal organizational Line and staff Project teams and relationships organization ‘matrix organization Maintain the balance of the socio-technical system and effectiveness of the organization as a whole FACTORS AFFECTING THE ORGANIZATIONAL STRUCTURE SELECTION IN MULTINATIONAL CORPOPRATIONS The organization structure of the business environment is an approach that helps and guides in organizing the employees of the organization into structured and organized pattem for better coordination and communication. ‘The structure in a multinational company defines the architecture of the business competence, functional relationship, and management funetion. It helps in reducing confusion in the bbusiness environment and supports in carrying out the business function smoothly and efficiently The organizational environment consists of all those factors that influences the organizational Working and thus ean also influence the organizational structure since in. each country and geographical areas the organizational environment would change. The extemal organizational environment that woul influence the organizational structure is the economie, political and legal, socio-economic, technological and natural factors. All these factors of organizational external environment affect the selection of organizational structure since organizational structure which the organization chooses ditectly or indirectly would be affected by the changes in these factors (Baumuller, 2007) The external factors that affect the organization structure are the economic factor which provides information about the market size and the competitor's strategy and the manner in which organization should be structured to meet the company’s objectives. The demand and supply for the product or service along with the wages and salary structure have an impact on the organizational structure of the company. The organization structure is also affected by various political and legal factors and should be in accordance with the norms and policies of the government. The company also has to pay due importance to the various socio-economic factors and the physiographic and demographic factors as all the factors have direct impact on the ofganizational structure. The company should keep into consideration the culture, values and beliefs of the society and accordingly plan for the structure in order to meet out the objectives. The natural environment by which the multinational companies surround also influence their organizational structure since multinational companies operate at different geographical locations whichhave differences in the timings, weather conditions and does not match with the subsidiary operating in another country which thus, becomes a crucial point at the time of selection of organizational structure (Baumueller, 2007) The intemal factors like the size of the company have a great impact on choosing and selecting the organizational structure. The size of the company can be defined by the geographic and product range of the company. The company size can be defined as the area of operation that is the region covered by the company. The company’s product range and services also have a direct impact on the organizational structure of the company. The company has to plan for various departments and units in order to carry out the business operations in an appropriate manner and has to select the best organizational structure for coordination and communication among the various branches (Moran, Harris & Moran, 2007) ‘Apart from these factors one of the factors that influence the selection of organizational structure by multinational companies are their strategy. The strategy that the company is using should be an indicator of which organizational structure to adopt since with each of the different strategies there is a specific organizational structure that should be followed to accomplish the task with more efficiency. There are different types of strategies that multinational companies can adopt while launching the product in the new or the old market that includes the differentiation strategy, cost leadership strategy, focus strategy ete, REGULATION Regulation is the administrative process of writing and passing laws that, to a certain extent, restrain some fundamental rights of businesses. It can be distinguished from principal legislation by elected legislative body. Regulation can take many forms: legal restrictions promulgated by a government authority, self-regulation by an industry in which the type of business belongs such as through a trade association, social regulation, and market regulation, One can consider regulation as actions of imposing ssanetions or penalties to the extent permitted by the law. AREAS OF GOVERNMENT REGULATION OF BUSINESS. RELEVANT TO THE EXISTENCE OF BUSINESS The State Will Take Charge of Economic Activity A centrally planned economy is one where all major economic decisions are under the control of the government. This type of economy is typically associated with communist and socialist ideals. In contrast to a free market or capitalist economy, a centrally planned economy does not allow the supply and demand of the market o define prices, wages, or the production of goods. The theory behind a centrally planned economy begins with the idea that the market is not a measure of what is best for the country. Subject to whim, trend, and a myriad of options, the free market can slow or even impede the goals of a central government. By having the state tun the economy, the government is able to enact the programs, schemes, and plans deemed as best for the country by the leaders. Mist modem economies include a mix of centrally planned and free market behavior. While the government may control certain areas of economy, much of the market runs at the impulse of the people. Insuch economy, a person has the right to start a private business, thanks to the free market, but may have to pay business taxes and charge a sales tax based on the centrally planned aspects. Advantages of Planned Economy A. Driven for Collective Benefits. Government decided economies can be proposed to serve communal rather than individual needs. Following that system, rewards, and other benefits are to be distributed according to the price that the state credits to the setvice performed. A planned economy eradicates the individual profit motives as the driving force of production and rests it in the hands of government planners to determine the appropriate production of different sets of goods.B. Economies of Scale. A government run economy would endeavor to replace a number of firms with a single firm the whole economy. This makes the business the sole beneficiary on the advantage of single market, arbitrary pricing, and unilateral product offering. C. Inherently Protected, Government planned economy is not subject to major downside of market economies and market-oriented mixed economies. ‘ planned economy, theoretically, does not suffer from business cycles; it does not experience crises of overproduction. From the modern perspective, it does not result in assets bubbles and massive misallocations of resources such as the South-Sea bubble in Britain, the dot-com bubble of the late 1990s or the housing bubble of mid-2000s. D. Stability. When government is charge, long term venture ean be made without fear of a market downward spiral which can easily lead to abandonment of a project. This is especially important where returns are risky, in some advance economies, one of the examples would be running a prison which decisions vary and are dependent from one administration to another. Disadvantages of Planned Economic Activity A. Inefficient Use of Resources. Crities of planned economies are pushing the idea that planners cannot detect consumer preferences, shortages, and surpluses within the ideal level of accuracy and therefore cannot efficiently coordinate production. From the modem viewpoint, praduction shortage or surplus is proof of a mismatch between supply and demand, a clear and convincing evidence of wastage in term of government resources. B. Restrained of Democracy in Trade. Given that central planning overcame its built-n inhibitions of incentives and innovation, it would nevertheless be unable to maximize economic democracy and self management, which some believes are concept that are more rationally consistent, reliable and just than ordinary ideas of economic freedom. Imposition of Legal and Administrative Barriers Based on research the following are the identified and recurring legal and administrative barriers to entrepreneurship common to ASEAN countries (Adopted from Administrative Barriers to Entrepreneurship by Elena Sui), A. Disproportionate Licensing and Regulatory Requirements, The regulatory and licensing barriers are perennial in today’s system whereby one must obtain approval from the authorities to embark on even the smallest tasks. When entrepreneurs attempt to seck legal redress to register, they soon discover a different level of hurdles: some choose to. pay bribes, keep prices artificially low and force competitors ut of business. Some entrepreneurs lobby the government for redress, but governments rarely act against the abuser(s). The weak rule-of-law mechanisms do not punish corruption, it helps propagate it and rather only serve to reinforce the administrative barriers. The common pattern of conducting business by Small and Midsize Enterprise(SMEs) in some Asian Countries and in the Philippines in particular, trivially consists of three options for the entrepreneur: (1) enter the informal sector by paying bribes each step of the way, (2) secure and utilize “connections” in government, and/or (3) obtain a government position and abuse the system of authority to one's benefit. B. Excessive, Complex, and Arbitrary Taxation. The taxation system can sometimes be complex, subject to abuse by government officials (and businesses) and appears to change frequently. The net effect of an exeessive, abusive, and arbitrary system of taxation is that SMEs find it virtually impossible to conform to all the laws and tax regulations, making the informal initiative and creative legal deviations the only chance to survive in the market. Tax sometimes is the major reason of the capital flight that hurts the overall economy. . Inadequate Banking System and Poor Practices. Inadequate banking, system can also impose impossible demands on entrepreneurs. Issues involving timeframes, and terms credit for repayments are sometimes prohibitive, collateral is difficult to provide, and finding a guarantor to help secure a loan is very difficult. However, we cannot blame this banking practice considering that one of the underlying reasons also for the poor banking practices is the high risk of delinquency or bad loans.D. Lack of Governments Commitment to Reduce Administrative Barriers. A good mass within the business community and even these outside of business recognizes that the governments are doing litle to reduce administrative barriers impeding investment and trade. Some entrepreneurs are even silently blaming the governments for having litle and poor understanding of the importance of addressing these problems. REGULATIONS RELEVANT TO THE CONDUCT OF BUSINI The government has many business regulations in place to protect employees’ rights, protect the environment and hold corporations accountable for the amount of power they have in this business-driven society. Some of these regulations stand out more significantly than the others because of their relevance to every employee, costumer, and society in general Advertising Laws pertaining to marketing and advertising set in motion by the regulatory authority exist to protect consumers and keep companies honest about their products. Advertising laws are made up of dozens of tidbits under three main requirements: advertising must truthful and non-misleading: business need to be able to back up claims made in advertisements at any time; and advertisements must be fair to competitors and consumers. Employment and Labor Among the ever-changing regulations in business are employment laws. These laws pertain to minimum wages, benefits, safety, and health compliance, working conditions, equal employment opportunity, and privacy regulations cover the largest area of subjects of all business regulations. There are also several required benefits, including unemployment insurance, workers’ compensation insurance and employee social security assistance which is mandatory and applicable generally to all employees. Environmental The carbon footprint of business on the environment is regulated by the Department of Environment and Natural Resources (DENR). The DENR enforces environmental laws passed by the government. This is done through frequent inspections and environmental audit. The Environmental Management Bureau (EMB) and other offices and bureau exist to help businesses small and large alike achieve environmental compliance and should serve as a resource more than an enforcer. Privacy Sensitive information is usually collected from employees and costumers during hiring and business transactions, and privacy laws prevent businesses from disclosing this information freely. Information collected can include social security number, address, name, health conditions, credit card and bank numbers and personal history. Not only do various laws exist to keep businesses from spreading this information, but people can sue companies for disclosing sensitive information. Safety and Health The safety and health laws ensures that employers provide safe and sanitary work environments through frequent inspections and a grading scale. A. company must meet specific standards in order to stay’ in business. In accordance with legal provisions, employers must provide hazard-free workplaces, avoiding employee physical harm and death, through incorporating these in procedures manual POLITICAL ENVIRONMENT (OF BUSINESS Regardless of how attractive the economic prospects of a particular country or regions are, doing, business there might prove to be financially devastating if the hast government imposes heavy finaneial consequential penalties on a company.The political envitonment in which the firm operates will have a significant impact on a company’s international operating activities. The greater the level of involvement of the company in a foreign market, the greater the need to monitor the political climate of the countries where business is conducted since this political climate will affect among others the marketability of the company’s produt, the inflow of investments and more importantly valuation of share price. Changes in government more often result in changes in policy and attitudes towards foreign business. Bearing in mind that a foreign company operates in a host country at the discretion of the government concerned, the government can encourage foreign activities by offering attractive opportunities and incentives for investment and trade, or discourage its activities by imposing disincentives and restrictions such as unfriendly stricter regulations and import quotas, etc. One of the primary concems to an investor should be the stability of the target country’s political environment, One of the surest indicators of political instability is a frequent change in regime. Although a change in government need not to be accompanied violence, it is often precursor of change in policy towards business, particularly intemational business. CORPORATE SOCIAL RESPONSIBILI AND ORGANIZATIONS. Corporate social responsibility (CRS) can be defined as the “economic, legal ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll and Buchholtz 2003). The concept of corporate social responsibility means that organizations have moral, ethical and philanthropic responsibilities in addition to their responsibilities ear a fair return for investors. A traditional view of the corporation suggests that its primary, if not sole, responsibility isto its owners, or stockholders. However, CSR requires organizations to adapt a broader view of its responsibilities that includes not only stockholders, but many other constituencies as well, including employees, suppliers, customers, the local community, local, and national governments, environmental groups, and other special interest groups. Corporate social responsibility is related to but not identical with business ethies. While CSR encompasses the economic, legal, ethical, and discretionary responsibilities of organizations, business ethics usually focuses on the moral judgements and behavior of individuals and groups. within organizations. Thus, the study of business ethics may be regarded as a component of the larger study of conporate responsibility. CONTEMPORARY SOCIAL ISSUES. * Corporations deal with various social issues and problems both directly related to their operation and not. It would not be possible to satisfactorily deseribe all the soeial issues faced by business. This, section will just briefly discuss three contemporary issues that are of major concern: the environment, global issues, and technology issues. Environmental Issues Corporations have long been criticized and even lambasted by some pressure groups for their negative effect on the natural environment in terms of wasting natural resources and contributing to environmental problems such as pollution and global warming, Other issues related to the natural environment include irresponsible disposal of waste, deforestation, and land degradation, It is likely that conporate responsibilities in this area will increase in the coming years, Global Issues The globalization of business appears to be an irreversible trend, but there are many opponents to it. Crities suggest that globalization leads to the exploitation of developing nations’ workers, destruction of the environment, and increased human rights abuses. They also argue that globalization primarily benefits the wealthy and widens the gap between the rich and the poor. Whether one is an opponent or a proponent of globalization, it does not change the fact that corporations operating globally face daunting social issues. Many corporations have been stung byrevelations that their plants around the world were “sweatshops” and/or employed very young children. This problem is complex societal standards and expectations regarding working conditions and the employment of children vary significantly around the world. Corporations must decide which one is the good and responsible option; adopting the standards of the countries in which they are operating or imposing a common standard world-wide. Dumping is also another delicate issue in globalization. Secondary products or variants are sold to foreign countries atthe price chokingly low for the host country businessman to compete thereby industry. Technical Issues Another contemporary social issue relates to technology and its effect on society. For example, the internet has opened up many new avenues for marketing goods and services, but has also opened up the possibility of abuse by corporations. Issues of privacy and the security of confidential information must be addressed. The marriage of science and technology has a very serious implications, this union ‘must be given “blank check” otherwise it can do limitless things, Ethical Behavior in the Enterprise When we hear the word ethical, several ideas come to mind, most notably good versus bad and the right versus wrong. These are the six foundation of trust upon which ethical business practice is built: Character Character drives what we do when no one is Looking. We can build our character through the way we live by thinking good thoughts and performing good acts. Ethies Ethies refer to the set rules that describes what is acceptable conduct in society. Ethies serve as a guide to moral daily living and helps corporation judge whether such behavior can be justified. Integrity To have integrity is to honest and sincere. Integrity is defined as adhering to a moral code in daily decision making. Put simply, when people and businessman possess integrity, it means that they can be usted. Laws The law is a series of rules and regulations designed to express the needs of the people. Laws, frequently provide us with a sense of right and wrong and guide our behavior. Morals Morals are a set of rules or mode of eonduct on which society is based. Certain moral elements are universal, such as laws forbidding homicide and the basic duties of doing good and furthering the well-being of others. Values Values are defined as acts, customs, and institutions that a group of people regard in a favorable way. ROLE OF THE STATE AND ITS IMPACT ON BUSINESS ORGANIZATIONS. Some sectors have criticized that the government regulatory parameters on the economy is restrictively futile on some extent considering that, often, it not only lacks teeth but also has some featuresthat obstructs the full capability of the enterprise in terms of maximizing wealth. At present, some of the ‘most continuing debates in economics are only actually focused on the role of government. The importance of private ownership is perfectly consistent with what people believed about personal freedom, People and the business sector believed in limiting the government's authority over the economic pursuits of individuals, including its role in the overall kingdom of economics. In spite of this “leave us alone” attitude of business sector most people still want the government to perform certain important tasks in the economy more importantly on regulation, and our legal system provides a very sound fundamental structure which creates an atmosphere suited for this business. environment. ROLE OF GOVERNMENT IN BUSINESS The private sector is the chief economic force of every country, but it needs government regulation. The government's role in business is as old as the county itself: the constitutions gives the government the power to regulate some commerce. Though the government's role has increased over time, the business community still enjoys considerable freedom. However, the government sill exercises its authority several ways. Consumer Protection When a vendor fails to honor the guarantee, the purchaser has recourse in the law. Likewise, when a product causes harm to an individual, the courts may hold the vendor or the manufacturer responsible. Labeling is another requirement the government imposes on marketers. Many foods, for example, must display nutritional content on the packaging. Other manifestations of this protection are as follows: 4. Businesses need the court system for protecting property rights, enforcing contracts, and resolving commercial disputes. b. Government protects consumers from businesses. ¢. Government hears and corrects consumers’ complaint about business fraud and put into effect recalls of substandard and dangerous products, d. Government controls private companies" actions to protect public health and safety. Contract Enforcement Businesses deal with other businesses. These contracts may be complex, such as mergers, or they may be as simple as a warranty on supplies purchased. Companies bring one another to court just as individuals do. An oral agreement can constitute a contract, but usually only a written agreement is provable. If one party refuses to meet its obligation under a contract, a company will tum to the government's legal system for enforcement. Employee Protection Many agencies work to protect to protect the rights of employees. These rights cover the following: regular employment, probationary employment, minimum employable age, prohibition against stipulation of marriage, antisexual harassment law and many others Environmental Protection When a marketing transaction impacts a third party besides the marketer and purchaser the effect is called “externality”. The third party is often the environment. Thus, it is the government's role to regulate industry and thereby protect the public from environmental externalities. Whether the government is effective in this role is a matter of much discussion. Investor ProtectionGovernment mandates that companies make financial information public, thereby protecting the rights of investors and facilitating further investment. This is generally done through filings with the Securities and Exchange Commission. The government certainly has the hand on what it wants the country to be perceived in the outside world. Textbooks would tell us that the following issues are the specifies a government needs to address wall ifits country wants to be considered business as well as investor friendly. ‘+ Starting a Business, + Licenses + Employing Workers * Getting Credit + Protecting Investors + Paying Taxes ‘+ Export Policy Permission The funetion of this registration is usually to define the financial stability the owners of the company have. It limits their risk to the amount they have invested in that particular organi Registration also allows the government to monitor companies to execute its other funetions in the business world, Taxation Governments at all levels tax businesses, and the resulting revenue collected is an important part of the government budgets. Some revenue is taxed at the corporate level, then taxed as personal ineome when distributed as dividends. This is no way inappropriate, since it all balanees the tax burden between the company and individual and allows the government to tax more equitably. ROLE OF )VERNMENT POLICY Government provides certain services-such as national defense, administration of justice, education, environmental protection, public works and highways. The aforementioned services are viewed as better suited for the government than private businesses although government certainly needs help on the delivery of these services fiom private enterprises, When market is behaving like “dead horse” wherein it is lowly inresponsive no matter how hard it is hammered by private initiative, goverment comes to the rescue. Government also comes to the rescue in times wherein prices are so high, so high that itis already hard to survive by the public, Rescue in the form of subsidies on certain commodity to diminish its impact on people’s pocket, NFA rice distribution at lesser price is example of this effort PRESSURE GROUPS A pressure group is an organized group that seeks to influence not only government policy but also private enterprises" operating policy. The following are the types of pressure groups which can become variables to consider in laying down platform of government not only in government but also in private enterprises, ECONOMIC PRESSURE GROUPSGiant Private Corporations (the Giant Connection) These corporations need to ensure that their interest is protected since large government contract, are often at stake. The relative size and power of these companies ean sometimes rival to that of the government and therefore, bring massive influence on political and economic decisions which affects variety of business activities. With size and power, there is this implication of lobbying certain laws and regulations, putting pressure an their once political beneficiaries who are now in position and to certain degree, do some maneuvers to outdo their competitor through the use of “special connections” Professional Organizations This is a powerful group bound by the common interests of its members. The Philippine Institute of Certified Public Accountants (PICPA), the Philippine Medical Association (PMA) and the Integrated. Bar of the Philippines (IBP) are prime examples. Trade Associations Association of business with common interest to protect io is the simplest description of a trade association, The increase im government's initiative and other progressive laws has prompted an increase in business representation fom this group. Trade Unions One of the things that greatly influence the corporate governance principles and government Policies in the Philippine setting is in the area of labor and management. In the Philippines we have several clusters of unions that can have pressure on governmental policies and company's philosophy and governance, one of which is Partido ng Manggagawa (PM), Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP) is another and many others that are working for the protection of the labor sector. PUBLIC PRESSURE GROU! These are groups that represent a cluster of the public on certain issues. The public had tuned to pressure groups since they are visibly vocal to issues that pat the hearts of a certain individuals. These individuals have the belief that these pressure groups might be triumphant in changing what they believe unacceptable, the most obvious present issue would be environmental and climate change issues. SECTORAL PRESSURE GROUPS Sectoral pressure group refers to groups which work to protect and advance the interest of specific social groups in a certain society, At times they are crossbred of political groups. ‘Typical example, in the Philippine setting, is the Gabriela which is for women and children specifically on promoting equal opportunity for women, RELIGLOUS/ATTITUDE PRESSURE GROUPS They are considered as one of the most powerful groups. They share universal beliefs and objectives on one issue, and they believe that their major role, aside from endorsing a politician and lobbying Congress, is to mobilize support in the country for what they believe in and to support for political office those who share their belief’. GOVERNMENTAL UNITS PRESSURE GROUP The level of maturity of the system of administration and the development government agenda in the last wo decades, and the enormity of the sums of money involved, has led to an expanded role being played by the local government as administrative arms of the national government. This has led to a greater degree of freedom and power for the Local Government Units (LGUs). This freedom gives rise to the lobbying powers of the LGUs which sometimes left unbalance in favor of LGUs with stronger connections.COME AND WI LTH DISTRIBUTION Income distribution is defined in economics descriptively as how a nation’s total economy is dispersed amongst its population. Classical economists such as Adam Smith, Thomas Malthus and David Ricardo were mainly concerned with income distribution, that is, the distribution of income between the ‘main factors of production, land, labor, and eapital Distribution of wealth is a comparison of wealth of various members o groups in a society. It differs from the distribution of income in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society. Defining the two economic terms would easily lead us to one very important economic issue which owners of big corporations should consider and should not just be indifferent about, the economic inequality. Rich *——— Middle Class Poor «—— MAJOR CAUSES OF ECONOMIC INEQUALITY There are many causes of economic inequality; the following are some of them both from the: basic to global perspective and from the micro and macro standpoint: Culture and Religion In many countries, individuals belonging to certain racial and etlinic minarities like the natives are more likely to be more than others. Attributed causes to this include cultural differences amongst different races, educational achievement gap and racism, and some instances cultural values and religiosity level. Development According to Simon Kuznets, levels of economic inequality are in large part the result of stages of development. Kuznets points out that countries with low levels of development have relatively equal distributions of wealth. As a country develops, it acquires mare capital, which leads to the owner of the capital having more wealth and income and introducing inequality. This inequality is obviously: attributable to the dominance of the wealthy faction. Diversity of Choices When conffonted with the choice between working harder to eam more money and or enjoying more leisuretime, equally capable individuals with identical eaming potential often have differen choices. This leads to economic inequality even in an environment where perfect equality and abilities exists The swap between work and” leisure is important Wealth — | specifically in the supply side of the labor market in labor economies, Educa PopulationEducation, especially in an area where there is a high demand for workers, ereates high wages for those with education. As a result, those who are unable to afford an education, or choose not © pursue optional education, generally receive much lower wages. Many economists believe that a major reason the world has experienced increasing levels of inequality is an increase in the demand for highly-skilled workers in high tech industries. They believe that this has resulted in an inerease in wages for those with education but has not increased the wages of those without education leading to greater inequality. Globalization Globalization is a progression by which the worlds are unified into a single society and function It has been asserted that globalization supports productivity, cultural mix and cash flow into the developing countries; however, there are some drawbacks of globalization that should not be overlooked: unemployment, social degeneration and difficulty of competition. Inflation ‘Some economists have theorized that high inflation, caused by a country’s monetary policy, can contribute economic inequality. ‘This theory argues that inflation of the money supply is a coercive ‘measure that favors those who already have an eaming capacity, disfavoring those on fixed income or with savings, thus aggravating inequality. They cite examples of correlation between inflation and inequality and noted that inflation can be caused independently by “printing money", suggesting causation of inequality by inflation, Labor Market One of the major causes of economic inequality in modem market economies is the determination of wages by the market. Inequality is rooted from the differences in the supply and demand for different types of work, In an ideal world, worker's wages will not be controlled by the labor and by the employer but rather dictated by the market. The demand side of labor (employers) cannot afford to offer a price below what the market is offering, otherwise it will be in danger of ongoing understaffed or worse will have the lowest class of workforce in terms of quality. Wealth Condensation Wealth condensation is the theoretical process by which, under certain conditions, newly-created wealth concentrates in the possession of already-wealthy individuals or entities. According to this theory, those who already hold wealth have the means to invest in new sources of ereating wealth or otherwise leverage the accumulation of wealth, thus are the beneficiaries of the new wealth. Over time, wealth condensation can significantly contribute to the persistence of inequality within society.Nan: Section Block Memtification: (On the space provided, supply the word/group of words/phrase being describedidefined: 1 Refers to a progression by which the world is unified into a single society and function 2. The economic, legal, ethical and discretionary expectations thatthe society has of cxganizations ata given point in time. a ‘Scries of rules and regulation designed to express the noeds ofthe people, Association of businesses with common interest to protect. Refers to groups which work to protest and advance the interest of specific social groupe ina certain society. 6. One of the contemporary social issues which talks about pollution, global warming, {ssl fuel, depletion of natural resources and the likes. These are pressure groups that represent a cluster of the public on cerain issues. 8 tis something that erives what we do when no one is looking. 8 The act of adhoring tthe moral code in daily decision making 10. Refers toa set of rules that deseribes what is acceptable conduct in society. Enumeration Causes of economic inequality 1 2 3 4. 5 Foundation from which ethical business can be built 6. 1 9, 10. Types of pressure groups un 2‘Trac oF False 1 The primary sources of managerial “elucessncss” are personality disorders and IQ. 2 The explosive technological and social ekanges of recet yeas have simplified oar ives and cor understanding ofthe world 3. Moder orgonizations rely too much on an artistic approoch to management ed oo lithe on an engineering approach, 4 Casomers are so used to misleading advertising tht it does nt infritethom. Sponsors of advertisements aimed at children must be espocally careful to avoid misleading ress 5. Am individual's moral valves an central, value-teated ates clearly influence one's business behavior 7. potsonnel manager of a large company would probably agree that the more ethical the Company, the easier cto attract good pecple, 8. Costumers cant find out which firms ate aoting responsibly, and which ae no. 9 During the early twentieth century, working conttions were deplorable by today’s stands 10, Avoreness of business social responsibilities hes increased along with government involvement 1, There are many more socially responsible businesses today than there were ten years ago. In support of their postion, proponents of the rosioseonomic model argue thatthe businesses should he allowed to ignore sacial issues 13, One of the major reasons for improving product safety is dhe costumer’s demand for safe products Multiple Chotce 1. Ass manager, you encourmered and important problem that ssems almost impossible to salve. “Top management would likely suggest hat you 1 Hire a consulaat who brings the ight knowledge and expertise to the problem b._ Stand out ofthe way an Let someone else work withthe ise Try using diferent lenses to analyze the problem and develop strategic. 4. Calla meeting af everyone who knows about the issue ard make a group decision abour wat woo. 2. Ieisargucd tat even the smattes managers take foolish ations in decsionmabing because they Are tao clever for theirowa good 1, Have a parochial and distorted view ofthe problem athand Ave diven by sel-loveand ego, which ile their silty to understand a situation correct 4. Fal into the trap of pocsonalty foibles such as pride, haughtiness and unconscious nsed to 3. As doserhod, the actions of the surcesstul manager as similar to a skilled carpenter using the right tool forthe job. Thus, @ successful manager must 1 Malce sure dir orgenizations aro “love” (i.e balanced) b. Possess a “diverse collection of high-cuality implements (ie. flames)" along with the knowledge of when and how to use them, © "Measure twice but cut once” (ie. not make hasty decisions) Have the right wood (employees forthe job,The world that we perceive is for the most part a, Constructed objectively. b. Existing independent of ws. . Constructed internally on the basis of individuals’ belief and perceptual filters. 4. Dependent upon the quality of our sight. When defining an organization's structure, the key consideration should involve a, Allocation of responsibilities across cifferent units and members as well as the integration of | these efforts in pursuit of common goals. b. The number of organizauonal levels and thelr breath, . The level of centralization versus decentralization of responsibilities, 4. Ways on how to effectively motivate organizational members to maximize their performance. An organization’ structure should not be dependent upon a. Ths workplace b. Goals c. Emotional lability 4. Technology Patiarchal orgasizations are characterized by a a. Fixed division of labor b. Hierarchy of offices ¢. Setofrutes governing performance 4. Dominant father figure or a ruler with almost unlimited authority and power When designing the structure of an organization, cresting roles and units yields the benefis of specialization but creates problem of a, Pay scales forthe various roles. b. How to motivate the employees in each unit ©. Coordination and control. 4. Where to locate the different units. Forecasting and measuring organizational performance is accomplished through Planning and control systems. Rls and regulations Formal authority 44. Standud operating procedure 10, Letoral coordination soften acioved through Rules and regulations 1. Autority and detegation Meetings ar ask forces 4. Aclear chain of command 4 sve becoming more provalent fa moving fll ike biotechnology, where Tnonlege i so complex and widely dispersed that erganizations finds it impractical exercise iniaives alone 4 Ineronganiational nesworks b. Manic stctures Task forces 4. Rates and regulations 12, When deciding how to cooritate work roles and units nan organizzin ti es to 4, Use cider vertical or horizeetl coordination but not bth 3. Base the ehoiae on the workers prfirence. Bae the choie on the leaders preference 44. Base the choice onthe organization’ environment, 13. Ifemployecs are uncear about what they are supposed to do, dey often tao ther les around 4. The most profesional standards 3. Personal preferences Indy standnds 4 Organizational gous 14. The contribution of Henry Mintebere’s conception of snctral possibile is ‘4A dete prescription of how ro sti an organization in cespense 10 diferent missions ‘nd extemal challenges to etvision oganionbons a webs of nelson, Clustering various functions into groupings and showing their relative size and clout in tesponse to diferent missions and extemal ellen ges & Tocmision oganizaionsas onic irclar active forms Non athe sbove 18, Wham a process i reenginoeed, 4 Employoos gia to make choise and decisions on har ov Managers filly gin toate hoses «Workers come mote willing to follow ores. Jobs get narrower and more coating