Chapter IV

MANAGEMENT STUDY

Management is the process of reaching organizational goals by working

with and through people and other organizational resources.[CITATION Man15 \l

1033 ]This chapter discusses about Pick-a-Boo Celebrations’ form of business

ownership, capitalization, organizational structure, manpower requirements,

compensation, organizational policies and legal requirements which are all part

of the management aspect of the business.

Objectives of the Study

The general objective of the study is to determine the management

feasibility of the service through identifying the form of business ownership and

capitalization, the organizational policies and structure in its compliance with the

legal requirements for the business to operate. Specifically, it attempts to discuss

the following objectives:

1. to determine the most suitable form of business organization and initial

capitalization;

2. to construct an organizational structure applicable to the proposed service

with consideration to manpower requirements and salary rate;

3. to establish basic rules and regulations for the proper administration of the

business; and

4. to discuss the legal requirements that the business must comply with.
 66

Form of Business Ownership

The proponents agreed to form a partnership for the company. Under the

Article 1767 of the Partnership Law, by the contract of 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. This form of

organization requires each partner to contribute skills, experience and capital to

attain financial stability. (De Leon, 2007) The partnership will be categorized as a

general partnership. The partners will share in the profits and losses of the

business equally. The partnership will be named ARM Enterprise’s with ARM

being the initials of the surnames of the partners.

Articles of Partnership will be formulated to serve as a contract wherein

the partnership agreement, together with the specific terms and conditions, are

stated. This agreement will ensure harmonious relationship among partners and

attainment of industrial objectives. The proponents decided to comply with

general partnership wherein there is one or more general partners who are liable

up to the extent of their personal assets for payment of partnership debts. It is

more suitable for a small number of people who want to enter on a small

business venture and who are willing to contribute their services and capital.

Capitalization

Capitalization is the long-term funding that allows a business firm to

operate. It is the investment that the business owner and any other investors

make in the firm. It is a financial term which refers to the sum of the stockholder's
 67

equity of the firm and the firm's long-term debt, such as bonds or

mortgages[ CITATION Pea15 \l 1033 ]. The partnership’s capital can be obtained

through the contribution of the partners and also with the application of loans

from banking institutions.

Table 4.1
Partners’ Contribution

Partners Amount
Aldovino, Elaine M. Php300,000.00
Marquez, Maria Gina A. 300,000.00
Reyes, Kim Nicole M. 300,000.00
TOTAL Php900,000.00

Organizational Structure

An organizational structure is the backbone of an entity. It is a system

used to define a hierarchy within an organization. It identifies each job, its

function and where it reports to within the organization. This structure is

developed to establish how an organization operates and assists an organization

in obtaining its goals to allow for future growth. [ CITATION Luc15 \l 1033 ]

Pick-a-Boo Celebrations will employ a line type of organization. This

assumes that direct authority is exercised by a superior over his subordinates.

J.D. Mooney and A.C. Reiley (2010) pointed out that the degree of authority

exists in all organization as on uninterrupted scale or series. The basic of scalar

organization is that in any organization there must be a series of superior and

subordinates relationship from top organization to the very downward structure of

organization. It is simple, has single authority, unified control and fixed

responsibility.
 68

Figure 4.1
Organizational Chart

Workers for other services such as bookkeeping services and “harana” will

be outsourced by the entity. The bookkeeper is an independent practitioner in the

field so as the “haranistas”

Manpower Requirements

Labor is a primary factor of production. The size of nation’s labor force is

determined by the size of its adult population, and the extent to which the adults

are either working or are prepared to offer their labor for wages. Labor is vital on

the execution of organization’s planned operations. Although empowered

machines have emerged, specific businesses need employees to do manual jobs

like service oriented once.

Our business requires five employees which will act as two event

organizers, two packagers and cashier. One of the partners will be appointed as

the general manager of the firm.

 69

Job Specification

A Job Specification is a written statement of the minimum qualifications

and traits that a person needs in order to perform the duties and undertake the

responsibilities of a particular position (Grimsley, 2015). It includes educational

qualifications, specific qualities, level of experience, physical, emotional,

technical and communication skills required to perform a job, responsibilities

involved in a job and other unusual sensory demands. 

Manager

 A bona fide partner in the business

 At least 21 years old

 Able to speak and write in English proficiently

 Able to demonstrate leadership skill

 A graduate of any business related course

 Proficient in event and surprise planning

 With good communication skills

Event Organizer

 At least 21 years old

 Graduate of BS in Event Management or related field

 Able to have good time management and communication skills

 Able to manage multiple projects independently

 Able to build productive business relationships

 70

Cashier

 Female

 At least 18 units from college level

 Between 21-26 years old

 With pleasing personality

 With 6 months - 2 years working experience on the same field

 Motivated and hardworking

 Trustworthy that can be ascertained through recommendations from

reliable sources or past employer

Packager

 Male or Female, 18-25 years old

 At least a high school graduate

 With pleasing personality

 Good communication skills

 Industrious and trustworthy

Job Description

A Job Description is a written statement that describes a job that may

involve a group of separate organizational roles. (Grimsley, 2015) It includes

basic job-related data that is useful to advertise a specific job and attract a pool

of talent. 
 71

Manager

 Responsible for directing and controlling the workforce of the business

 Responsible in the overall decision making within the organization

 Responsible in the operations of the business

 Responsible in monitoring the business performance towards the

achievement of predetermined objectives

 Responsible in conducting meeting in case of service related concerns

 Responsible for keeping accurate up to date business records for proper

cash flow management, balance sheet preparation and developing

expansion and investment plans

 Responsible in noting all monetary or financial transactions that are

received and paid out

 Responsible in calculating employee wages from time cards and prepare

checks for payment of wages

 Responsible for compiling reports to show statistics such as cash receipts

and disbursements, accounts payable and receivable, profit and loss and

other items pertinent to operation of the business

Event Organizer

 Responsible for the coordination of the corporate team and local vendors

which includes planning and implementing all events efficiently and a

liaising relationship with the customers in selecting packages

 72

 Responsible for the assistance of consumers and provision of knowledge

on all packages and related event materials

 Responsible in booking and securing event time and location.

 Responsible in administering all production process and monitoring all

projects from conceptualization to implementation and manage all

production budgets for various events. 

 Responsible in researching appropriate materials and ideas for

personalize surprise events aside from the packages

Cashier

 Receives money in the business and computes the total record of

transactions

 Counts money in cash drawers at the beginning of shifts to ensure that

amounts are correct and that there is adequate change

 Issues receipts, refunds credits or change due to customers, calculates

total payments received during the time period and reconcile this with total

cash on hand

Packager

 Responsible for tending the store premise and for proper arrangement of

event materials

 Responsible for assisting clients and confirmation of chosen package

 Responsible for a steady supply of merchandise to customers

 73

 Responsible for the inventory schedule by watching trends and customer

demands to make sure there are always enough merchandise and event

materials.

Compensation

Compensation is defined as the total remuneration, in cash or in kind,

payable by an enterprise to an employee in return for work done by the latter

during the accounting period. [CITATION Com13 \l 1033 ]The employees will

receive equitable compensations based on the complication of the nature of their

job. With this in hand, it was declared that on a 6-day work week basis the event

organizer, and the packager are entitled to earn a monthly compensation of P9,

100 or P350 per day. The cashier is entitled to earn a monthly compensation of

P7,800 or P300 per day. The general manager is entitled to earn a monthly

compensation of Php20,800 or Php800 per day. All workers will also be entitled

to other fringe benefits like SSS, and Phil Health. They are also entitled for a 13 th

month pay based on their monthly salaries. Employee’s overtime will be

computed based on the per hour rate of the employee multiplied by 125% on

regular days and 130% on holidays and rest days, and the product will be

multiplied to the number of hours worked as overtime to get the total overtime

pay.

The salary will be given every 15 th and 30th day of the month. Benefits

such as 13th month pay, SSS, and PhilHealth will be given to full time employees

in compliance with the government’s labor policies. The contribution to these

 74

benefits shall be deducted from the wages of each employee. As a registered

BMBE, the firm is exempted from the Minimum Wage Law as stated in the R.A.

No. 9178, otherwise known as the “Barangay Micro Business Enterprises

(BMBEs) Act of 2002.” It is hereby declared to be the policy of the state to hasten

the country’s economic development by encouraging the formation and growth of

BMBEs through the grant of incentives and benefits to generate much needed

employment and alleviate poverty.

In accordance with Sec. 8 of this Act, the BMBEs shall be exempt from the

coverage of the Minimum Wage Law provided that all employees covered under

this Act shall be entitled to the same benefits given to any regular employee such

as social security and health care benefits.

Compensation given to the firm’s bookkeeper shall be P5, 000.00 a

month.

Organizational Policies

Management sets policies to attain business goals and objectives. These

were implemented to develop harmonious relationship between the internal and

its external organization. These policies also provide protection to everyone from

any immoral acts.

A. Personnel Policies

1. The operation is under job order system.

2. All employees will work six days a week from Monday to Saturday.
 75

3. Employees are required to work at least eight hours a day from 8:00

am- 5:00 p.m.

4. Tardiness will be penalized through salary deduction. A 15 minute-

grace period shall be given, and employees coming late beyond that

shall be deducted with P43.75 per hour in their respective salaries.

5. Absences without a letter of leave of absences will not be paid.

6. One hour lunch break is given to employees. However, the employees

shall not go out for lunch at the same time. At least one of them must

stay for incoming customers during the break.

7. Salaries are given every 15 th and 30th of each month based on working

hours.

8. Each employee is entitled to fringe benefits.

9. Overtime will be made only if necessary.

10. Receipts issued after 4:00 pm will be remitted the following day.

B. Policies towards Customers

The following customers’ requirements must be submitted on time:

1. Complete the data in the sheets given for surprise and package

specifications

2. All event transactions must be submitted a week prior to the exact

event.
 76

Legal Requirements

In order for a business to start its operation, it must be registered in

various government agencies. Legal procedure includes filing to the Securities

and Exchange Commission, registration to the Department of Trade and Industry

and the Bureau of Internal Revenue together with securing a Mayor’s permit and

other local requirements.

Registration Process

Compliance with the following legal requirements is needed in order for a

business to legally operate and transact.

Articles of Partnership

A partnership may be constituted orally or in writing. In the latter case,

partnership agreements are embodied in the Articles of Partnership [ CITATION

Bal10 \l 1033 ]. The proponents provided an article which contains the following

essential provisions:

1. The partnership name, nature, purpose and location;

2. The name, citizenship and residences of the partners;

3. The date of formation and duration of partnership;

4. The capital contribution of each partner, the procedure for valuing non-

cash investments, treatment of excess contribution (as capital or as loan),

and the penalties for a partner’s failure to invest and maintain the agreed

capital;
 77

5. The method of sharing profit or loss, frequency of income measurement

and distribution, including any provisions for the recognition in differences

in contributions;

6. The drawings or salaries to be allowed to partners; and

7. The undertaking to change the name of the partnership upon notice.

I. Registration of Partnership to the Securities and Exchange Commission

The Securities and Exchange Commission is the government unit

where partnership and corporation are registered. The following

requirements must be submitted to SEC:

a. Name Verification slip

b. Articles of Partnership

c. Understanding to charge name

d. Registration Data Sheet

e. Clearance from government agencies must also be

secured.

f. Acquisition of Barangay Clearance where the business is

to be located so that it will be considered as a legal

entity.

These are the steps in registering to SEC:

 A secure name verification slip from Records Division.

 Proceed to cashier for payment of filing rate.

 Submit documents to receiving unit of records section.

 78

 The documents to be forwarded to the Company Registration and

Monitoring. Application form must be secured in the SEC and the

entity make reservations for the registration if the entity’s name.

II. Registration of the Business name at the Department of Trade and

Industry

Any form of business ownership is required to register at the

Department of Trade and industry in order for a firm to have a legal entity in

the business industry. It is also provided to avoid duplication of name with

other firms. In compliance to the requirements, an application form will be

filled up and submitted to DTI together with two passport size pictures of the

partners, birth certificates, and three business name proposals.

III. Application for Mayor’s permit

This can be done at the City Mayor’s office in the Permits and

Sciences Division.The following are the requirements needed:

1. Location sketch of the proposed business;

2. Sworn capital investment;

3. Tax clearance showing that the business has paid all its tax

a. Presentation of Community Tax Certificate and

receipt of payments of certain tax or fees as the case

may be

b. Photocopy of the DTI registration form

 79

c. Barangay Clearance

I. Confirmation of the application form with the following officers

for the inspection, endorsement, assessment and signing

a. City Engineer’s Office

b. City Treasurer’s Office

c. City Health Office

IV. Payment of the necessary fees and taxes at the City Treasurer’s Office

1. Legal fees

2. Fire Inspection fee

3. Garbage fee

V. Registration with the Bureau of Internal Revenue

The final step to accomplish the requirements in putting up a business

is the registration at the Bureau of Internal Revenue. This is done for the

payment of tax, for registering the books of accounts and for ensuring that the

partnership is abiding with the provisions of the law.

 80

Table 4.2
Fees and Licenses

Particulars Amount
BMBE Registration Php1,000.00
BIR Registration 500.00
DTI Registration 500.00
SEC Registration 510.00
Mayor’s Permit 3,000.00
Garbage Fee 1,000.00
Fire Inspection Fee 300.00
Business Tax 1,125.00
Certification Fee 135.00
Sanitary Permit 125.00
Sanitary Inspection Fee 125.00
Clearance Fee 150.00
Inspection and Monitoring Fee 200.00
Environmental Protection 1,000.00
TOTAL Php 9,535.00

Generalization

The overall objective of this study is to determine the management

feasibility of the service through identifying the form of business ownership and

capitalization, the organizational policies and structure in its compliance with the

legal requirements for the business to operate. Pick-a-Boo Celebrations will be in

the form of a general partnership with an initial capitalization of Php900, 000. The

firm will employ a line type of organization which assumes that direct authority is

exercised by a superior over his subordinates. The firm has a total of five

employees namely the two event organizers, two packagers, and one cashier. A

Managing Partner or General Manager will be appointed for the management of

the business. Each of the positions has their respective job specifications and job
 81

descriptions set forth by the management. The event organizers and packages

are entitled to salaries amounting to Php 9, 100 or Php 350 per day while the

cashier is Php 7,800 or Php 300 per day. The general manager is entitled to

received Php 20,800 or Php 800 per day. They will also be entitled to other fringe

benefits like SSS,Phil Health, and a 13 th month pay based on their monthly

salaries. This chapter also provided the basic rules and regulations for the

administration of the business. In order for a business to start its operation, it

must be registered in various government agencies. Legal procedure includes

filing to the Securities and Exchange Commission, registration to the Department

of Trade and Industry and the Bureau of Internal Revenue together with securing

a Mayor’s permit and other local requirements. The total fees and licenses

amount to Php 9,535.