The

Organization &
its
ENvironment
 1.
The
Organization
 Types of Business Organizations
✘ Single Proprietorship
✘ Partnership
✘ Corporation

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 Advantages of Sole
Proprietorship
 Ease of formation
 Keeps 100% of profits
 Decision-making
 Not heavily regulated

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 Disadvantages of Sole
Proprietorship
 Unlimited liability
 Difficulty in raising
capital
 Lack of continuity
 Limited skills and ideas

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 Advantages of
Partnerships
 Easy & inexpensive
 Shared Financial
Commitment
 Complementary Skills
 Partnership Incentives for
Employees
 Less Regulated
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 Disadvantages of
Partnerships
 Joint and individual
liability
 Disagreement Among
Partners
 Shared Profits

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 Advantages of
Corporations
 Separate Legal
Personality
 Ease of Raising Funds
 Perpetual Existence
 Ease of Transfer of
Ownership
 Credibility
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 Disadvantages of
Corporations
 More time and money
spent in organizing
 More paperwork
 Higher taxes
 More costly
 Heavy regulation

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 Nature and Role of the Firm
Human Resource Marketing Management Operations Management
Management ✘ a process of controlling the ✘ the administration of
✘ the practice of marketing aspects, setting the goals business practices to
recruiting, hiring, of a company, organizing the plans create the highest level
deploying and step by step, taking decisions for of efficiency possible
managing an the firm, and executing them to get within an organization.
organization's the maximum turn over by meeting
employees. the consumers' demands.

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 Nature and Role of the Firm
Financial Management
✘ the practice of handling a
company's finances in a way that
allows it to be successful and
compliant with regulations.
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Material & Procurement
Management
✘  ensures that all of our products are at
the right place at the right time;
✘ in charge of inventory management,
managing and planning materials, the
logistical procurement of goods and
services, and delivering products to
customers.
 Nature and Role of the Firm
Office Management
✘ involves the planning, design,
implementation of work in an
organization and its offices.
✘ includes creating a focused work
environment, and guiding and
coordinating the activities of
office personnel to achieve
business goals..
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Information & Communication
Technology Management
✘  provide the necessary information
and communication facilities to all
its business units in order to
ensure that they are able to
perform their functions more
effectively and efficiently.
 Organization
Structure
Designed to accomplish different goals.

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 Line Structure
Has only direct, vertical relationships between different levels in the firm.
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 Line Structure
Advantages
✘ Tends to simplify and clarify authority
✘ Promotes responsibility and
accountability relationships
✘ Promotes fast decision-making
✘ Precise and simple to understand
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Disadvantages
✘ Neglects specialists in planning
✘ Overloads tasks on key personnel
✘ It becomes more ineffective as the
organization becomes bigger
✘ Managers become experts in too many
fields or area.
✘ Tendency to become overly dependent on
the few key people who are performing
numerous jobs.
Line Function Vs. Staff
Function
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 Types of Organizational Structures

Functional Divisional Matrix

o The entire organizational
activities are divided into
specific functions/purpose such
as operations, finance, marketing
and personal relations.
o Typically used in larger
companies with several products
or those with several branches or
outlets that operate in a wide
geographical area.
o a combination of two or more
types of organisational structures
typically used in large
multinational companies.

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 Functional Structure
 Pros: works very well for
small businesses
 Cons: restriction in
coordination & communication

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 Divisional Structure
 Pros: provides significant
benefit which addresses needs
more rapidly and more
specifically
 Cons: inhibited
communication; costly

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 Matrix Structure
 Pros: allows for the benefits of
the 2 structures to exist in 1
organization; flexibility &
balanced decision-making
 Cons: can create power
struggles; complexity ->
confusion

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Formal vs. Informal
Organization

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 Organization
Development
a process for making changes within an organization’s
systems to help it perform more effectively.

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 Entering &
Contracting
 The initial stage of OD
occurs when an
organization recognizes
an issue that needs
improvement.

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 Diagnosing
  gather and organize the
pertinent data to analyze
the underlying situation
and determine what steps
you should take. 

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Intervening & Taking
Action
 transform the diagnosis
into an action plan with
detailed steps and
intervention measures for
implementing the change
that needs to take place. 

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 Dimensions of Interventions
✘ The focus of the intervention (individual,
interpersonal, group).
✘ The level of intensity (low, medium, high).
✘ The type of intervention (cognitive, skill and activity,
behavior, emotional/reflective, interpretive).

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 Types of Interventions
✘ Cognitive – An increasing knowledge brings better
understanding.
✘ Skill and activity – Growing in the ability to do something.
✘ Behavior – Making changes to current conduct.
✘ Emotional/reflective – Bringing forward underlying emotions
and using them for reflection.
✘ Interpretive – Replacing the usual way of doing or thinking
about things with a paradigm shift.

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Evaluating &
Feedback
 analyze whether the
interventions have
delivered the desired
outcomes. 

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Termination/EXIT
 Finish up with a plan for
efficiency standards that
ensure the transformation
is sustainable.

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 Create a Safe Environment
✘ Allow people to express their feelings about the change and feel
safe doing so by practicing empathetic listening. 
✘ Acknowledge that grief and frustration are understandable
reactions to change.
✘ Cultivate confidential settings that allow people to express
themselves without suffering repercussions. 

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 EXAMPLE:
✘ ABC Sports has grown by 35% in the last five years. Its
leadership prefers to promote from within but is struggling to
find qualified employees to fill entry-level management
positions in several departments at their headquarters. Since the
company does not have a separate OD department, leadership is
relying on HR to solve the problem.

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 Stage 1 – Entering and contracting
✘ Emily, an HR rep, meets with two executives to discuss the
overall situation and gain a clear understanding of what the
expectations are for filling management positions. Together, they
brainstorm interventions that may be useful.

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 Stage 2 – Diagnosing
✘ Emily takes steps to assess the talent pipeline and collect data. 
✘ Emily compiles the data and sees that most employees don’t feel
that ABC Sports invests in the growth of its employees. She
presents her findings to her two executive contacts to persuade
them that this perception needs to be remedied.

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 Stage 3 – Intervening and taking action
✘ As Emily devises an action plan, she includes the specific interventions necessary for the
company to invest in employees’ growth and development and prepare people for
management roles.  
✘ The interventions include learning opportunities for all interested employees:
✘ Seminars on specific skills
✘ On-the-job upskilling experiences
✘ Database of online learning resources
✘ Workshops for developing management aptitudes
✘ Measurable objectives that define the anticipated results are also established. 

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 Stage 4 – Evaluating and feedback
✘ Data and feedback have been collected throughout the OD process
implementation. Emily assesses it to ascertain whether the interventions
are on track:
✘ Was the problem solved?
✘ Did other problems surface?
✘ Were the learning opportunities communicated well?
✘ Did leadership support and promote the training?
✘ Did employees embrace the training? 
✘ Is there a visible difference between employees’ pre and post-training
knowledge and behaviors? 38
 Stage 4 – Evaluating and feedback
✘ Emily compiles an evaluation report and meets with her executive
contacts to discuss it. She makes recommendations for ways to improve
the training process. For example, expanding occasions for paid time
away from regular duties for employees to access the development
opportunities. Emily schedules future check-ins to continue the review
process.

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 Stage 5 – Termination/exit
✘ With an effective training program in place, Emily is ready to complete
the final phase of the OD process. She conducts several employee focus
groups to provide volunteers with a setting to express their feelings and
provide feedback about the training program.
✘ ABC Sports formally adopts the plan for training opportunities that
invest in employees’ learning and development. This concludes Emily’s
OD role.

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 2.
The Business
Environment
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Political Factors
 Government policy
 Political stability
 Corruption
 Foreign trade policy
 Corporate taxation
 Trade restrictions

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Economic Factors
 Economic growth
 Exchange rates
 Interest rates
 Inflation rates
 Disposable income
 Unemployment rates

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Social Factors
 Population growth rate
 Age distribution
 Career attitudes
 Safety emphasis
 Health consciousness
 Lifestyle attitudes
 Cultural barriers

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Technological
Factors
 Technology incentives
 Level of innovation
 Automation
 R&D activity
 Technological change
 Technological awareness
 Technology infrastructure
 Cyber security

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Environmental
Factors
 Stewardship of natural resources
 Environmental policies
 Climate change & its impacts
 Pressure from NGOs
 Carbon footprint
 Increased incidences of extreme
weather events

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Legal Factors
 Discrimination laws
 Antitrust laws
 Employment laws
 Consumer protection & e-
commerce laws
 Copyright and patent laws
 Health and safety laws
 Industry regulations
 Data protection
 Protection of intellectual property

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 Porter's Five
Forces Model
✘ a model that identifies and
analyzes five competitive
forces that shape every industry
and helps determine an
industry's weaknesses and
strengths.
✘ a framework for analyzing a
company's competitive
environment.

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 Rivalry among
Existing
Competitors
✘ refers to the number of
competitors and their ability to
undercut a company
✘ The larger the competition, the
lesser the power of the
company.

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 Threat of New
Entrants
✘ A company's power is also affected
by the force of new entrants into its
market.
✘ The less time and money it costs
for a competitor to enter a
company's market and be an
effective competitor, the more an
established company's position
could be significantly weakened.

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Power of Suppliers
✘ addresses how easily suppliers can
drive up the cost of inputs.
✘ The fewer suppliers to an industry,
the more a company would depend
on a supplier.

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 Power of
Customers
✘ The ability that customers have to
drive prices lower or their level of
power
✘ affected by how many buyers or
customers a company has, how
significant each customer is, and
how much it would cost a
company to find new customers or
markets for its output.

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 Threat of
Substitutes
✘ When close substitutes are
available, customers will have the
option to forgo buying a
company's product, and a
company's power can be
weakened.

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 Note!
✘ Porter's Five Forces framework defines the most important criteria to
consider when looking at the competitive landscape of a corporation.
✘ The Five Forces model can help businesses boost profits, but they must
continuously monitor any changes in the Five Forces and adjust their
business strategy.

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58
Activity!
 Activity
✘ Choose a specific local business according to your respective groupings
(service, food service, telecommunications, transportation).
✘ Analyze the internal and external environments of your chosen organizations
using the PESTEL analysis, Porter’s 5 Forces Model, and SWOT analysis.
✘ Submit your output in a word file via email on or before 11:59 PM, August
30, 2022.

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Planning
 1.
The Planning
Process
Setting Objectives
✘ This is the primary step in the
process of planning which
specifies the objective of an
organisation, i.e. what an
organisation wants to achieve.
✘ Objectives are end results which
the management wants to
achieve by its operations.

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Developing Planning
Premises
✘ Planning is essentially focused on the future,
and there are certain events which are
expected to affect the policy formation.
✘ Such events are external in nature and affect
the planning adversely if ignored.
✘ Their understanding and fair assessment are
necessary for effective planning.
✘ Such events are the assumptions on the basis
of which plans are drawn and are known as
planning premises.

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Identifying Alternative
Courses of Action
✘ Once objectives are set, assumptions are
made. Then the next step is to act upon
them.
✘ There may be many ways to act and
achieve objectives.
✘ All the alternative courses of action
should be identified.

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Evaluating Alternative
Course of Action
✘ In this step, the positive and negative
aspects of each alternative need to be
evaluated in the light of objectives to be
achieved.
✘ Every alternative is evaluated in terms of
lower cost, lower risks, and higher
returns, within the planning premises and
within the availability of capital.

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Selecting One Best
Alternative
✘ The best plan, which is the most
profitable plan and with minimum
negative effects, is adopted and
implemented.
✘ In such cases, the manager’s experience
and judgement play an important role in
selecting the best alternative.

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Implementing the
Plan
✘ This is the step where other managerial
functions come into the picture.
✘ This step is concerned with “DOING WHAT
IS REQUIRED”.
✘ In this step, managers communicate the plan
to the employees clearly to help convert the
plans into action.
✘ This step involves allocating the resources,
organising for labour and purchase of
machinery.

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Follow Up Action
✘ Monitoring the plan constantly and taking
feedback at regular intervals is called follow-
up.
✘ Monitoring of plans is very important to
ensure that the plans are being implemented
according to the schedule.
✘ Regular checks and comparisons of the
results with set standards are done to ensure
that objectives are achieved.

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70
Strategic
Management Process
✘  a continuous culture of appraisal that
a business adopts to outdo the
competitors. Simple as it may sound,
this is a complex process that also
covers formulating the organization's
overall vision for present and future
objectives.

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 Strategies Universal to Organizations:
✘ Concentration – an organization stays in a single sector or
industry, focusing on a single product or service.
✘ Vertical Integration – expansion of an organization along the
vertical line – backward to its suppliers, or forward to its buyers.
✘ Concentric Diversification – allows an organization to append
related products and services to its original business, effectively
adding new businesses to the organization.

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 2.
Types of
Planning
 Types of Plans
Managerial Level Level of Detail Time Horizon

Strategic Top Low Long (3-7 years)

Medium (1-2
Tactical Middle Medium
years)

Operational Frontline High Short (<1 year)

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Strategy Map

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City Development Strategy (CDS) Planning
Process
✘ In May 2000, the World Bank published a City Development
Strategy (CDS) planning toolkit for Philippine cities, with 4
planning process phases:
 Phase 1: Where are we now?
 Phase 2: Where would you like to be?
 Phase 3: What issues do we need to address to get there?
 Phase 4: What actions must we take to get there?

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City Development Strategy (CDS) Planning
Process
 Phase 1: includes situational analysis and ends with the SWOT
template.
 Phase 2: ends with a vision statement, after evaluation of
community expectations and a listing of local government
philosophy and principles.
 Phase 3: ends with options or alternatives for the strategic issues
resulting from the formulation of the vision statement.
 Phase 4: includes the implementation and monitoring activities
for the strategies formulated in this phase.

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Specific Mandates and Development plans
for the CDS
 Comprehensive Land Use Plan (CLUP)
 Comprehensive Development Plan (CDP)
 Local Development Investment Plan (LDIP)
 Annual Investment Plan (AIP)
 National Urban Development and Housing Framework
 Social Reform Agenda

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 ACTION PLAN TEMPLATE (as
recommended by the CDS)
 Step 1: Program and Project Identification
 Step 2: Program and Project Analysis
 Step 3: Project Prioritization
 Step 4: Preparation of Revenue/Expenditure Projections
 Step 5: Preparation of City Capital Investment Plan
 Step 6: Consolidation of the City Development Strategic Plan
 Step 7: Development of Monitoring and Evaluation Tools

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 Principles of a Sustainable City
 Livability, which is answered by proposed strategic plans for
the question, "What can be done to ensure a healthy and
dignified standard of living for the city's residents?"
 Competitiveness, which is answered by proposed strategic
plans for the question, "How can the cities be more competitive
in the global economy?"

80
 Principles of a Sustainable City
 Bankability, which is answered by proposed strategic plans for
the questions, "How can the cities be more financially
sustainable?" and "How can public-private sector partnerships
be promoted and/or enhanced?"
 Good governance, which is answered by proposed strategic
plans for the questions, "How can a city's management be
improved?" and "How can accountability, integrity, and
transparency be made an integral part of a city's management?"

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 Objectives of the CDS
 To guide the city's direction for economic development with the
aim of creating more employment opportunities;
 To develop a consensus building process to establish the city's
priorities, strategies, and actions;
 To assist local authorities outline their financing and investment
strategies; and
 To build local capacity for more effective urban management.
 (Source: The City Development Strategy Kit for Philippine Cities, World Bank Report, 2000)

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Activity!
 Activity
✘ The students are divided based on the cities and/or provinces that they reside
in, or where their parent/s come/s from. Students without same city group
members may opt to work alone, or with other city groups.
✘ The city-based groups review the websites of their assigned cities to review
the implementation or lack of the CDS planning process.
✘ The groups submit a list of recommendations and/or observations, using the
recommended seven-step action plan template.
✘ Submit your output in a word file via email on or before 11:59 PM,
September 6, 2022.

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Organizing
 Organizational
Chart
A traditional picture of the positions in a firm,
how they are arranged, who reports to
whom, and what the specific positions
execute in the enterprise.
 Differentiation
This means that the enterprise is involved in
many tasks, with diverse skills and
methods.

Fundamental Concepts for Organizational

Structures
 Integration
This is achieved with coordination,
communication, and collaboration, as it
involves linking parts of the enterprise into
a whole.

Fundamental Concepts for Organizational

Structures
Vertical Structure
Organizational structure that is rooted on basic
concepts, and is also known as the top to
bottom line of an organization.

Organizational Structures
 Definitive
Authority
Owners of enterprises have this kind of
authority which is defined as ‘the
legitimate right to make decisions and to
tell other people what to do.’

Organizational Structures
 Span of Control
The number of subordinates who report
directly to an executive or supervisor

Organizational Structures
 Optimal Span of Control
 Narrow enough to permit managers to maintain
control over subordinates, while
 Not too narrow to permit over control over
subordinates

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 Delegation
The assignment of new or additional
responsibilities to a subordinate

Organizational Structures
Decentralization
This is the term called when delegation
permits critical decisions to be made at the
lower levels of the organization

Organizational Structures
 Line Functions
Actions related to the principal activities of a
firm, or have ultimate responsibility for the
operational decisions of the organization.

Organizational Structures
 Staff Functions
Specialized or professional skills that support
the line departments.

Organizational Structures
 Divisional
Organization
In this organization, the enterprise is grouped
into products, customers, or geographical
locations.

Organizational Structures
 Functional
Organization
In this organization, jobs are grouped together
in departments with the specified skills
and/or business functions.

Organizational Structures
 Matrix
Organization
In this organization, dual reporting
relationships occur as a manager reports to
both a functional head and a product
executive.

Organizational Structures
 Network
Organization
A collection of independent, mostly single
function enterprises that collaborate on a
good or service.

Organizational Structures
 Organization
Defined as having two or more individuals
working toward the attainment of a goal or
goals.

Forms of Business Organizations

 Corporation
"An artificial being created by operation of
law, having the right of succession and the
powers, attributes, and properties expressly
authorized by law, or incident to its
existence”

Forms of Business Organizations

 Sole
Proprietorship
Simplest business form where an individual
owns all the assets

Forms of Business Organizations

 Partnership
two or more persons bind themselves to
contribute money, property, or industry to a
common fund, with the intention of
dividing the profits among themselves.

Forms of Business Organizations

 Recruitment
This involves activities related to the
development of a pool of applicants for
jobs in the organization.

Staffing
Performance
Appraisal
The measurement of an employee’s
performance

Staffing
 Training and
Development
This involves the continuous development of
the workforce.

Staffing
Reward System
Design
This includes the plans for monetary and
fringe benefits of the employees.

Staffing
 Selection
This is related to decisions on who to hire
from the pool created by recruitment tasks.

Staffing
 Job Analysis
the procedure through which the duties of
given job positions and the characteristics
of people who should fill them are
determined.

Recruitment and Selection

 Job Description
a list of what the job entails

Job Specification
a list of the kind of people for the job.

Recruitment and Selection

 Job Descriptions and
Specifications include:
 Work activities, like teaching, encoding, painting, and selling;
 Human behavior, like communicating, writing, and deciding;
 Tools used, such as computers, sewing machines, and power
tool;
 Performance standards, like one hundred sewn dresses per
eight- hour shift and ten cars sold per month;

112
 Job Descriptions and
Specifications include:
 Job context, like work at night, teaching on weekends and
holidays and work from home; and
 Human requirements, like a masters' degree for college
teachers, board passers for accountants, work experience for
supervisory work, specific physical characteristics for
computers, and computer literacy for most jobs.

113
Job analysis information is used to
decide or determine:
 the person to hire;
 the compensation for the job;
 job standards as basis for actual performance;
 training and development programs; and
 unassigned tasks and duplication of assignments.

114
THANKS!
Any questions?

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