PHARM-131 Module

ONLINE BASED LEARNING (OBL) MODULE IN
INTRODUCTION TO PHARMACY LEADERSHIP

AND MANAGEMENT
PHARM 131
Department of Pharmacy
SCHOOL OF NATURAL SCIENCES
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PHARM Introduction to
Pharmacy
131 Leadership and
Management
Jennylyn P. Galito, RPh, MSPharm
Ma. Adeline G. Antonio, RPh, MSPharm
Mark Ryan D. Langit, RPh, MSPharm
Deanne Tiffanie C. Canlas, RPh, MSPharm
Faculty, Department of Pharmacy
Saint Louis University
COURSE LEARNING OUTCOMES

At the end of the course, you are expected to:
1. Integrate knowledge of the fundamentals
of pharmacy business and professional
management in the rapidly expanding field
of pharmacy practice.
2. Explain the significance of planning in
management in the creation of goals and
standards for controlling to avoid
uncertainty and reduce overlapping and
wasteful activities.
COURSE INTRODUCTION
3. Establish proper start-up techniques of
delegation to maximize the productivity of
an organization and to assertively
implement laid out plans. This course is designed to acquaint you, the learner,
4. Display good leadership style to guide and with the basic functions of Planning, Organizing,
motivate other people to achieve
Leading, and Controlling as they relate to fiscal,
predetermined goals.
5. Demonstrate proper assessment of personnel and merchandising management. It
subordinates to minimize organizational presents the concepts, principles and fundamentals
errors to assure effective management of pharmaceutical management and leadership
control of a pharmacy.
6. Identify the importance of financial analysis and relate ethical principles of such in pharmacy
and management to pharmacy practice. operations. Likewise, it intends to introduce the
7. Describe the scope of operations essential elements in efficiently and effectively
management in pharmacy.
managing a pharmacy.
8. Know the concepts of jurisprudence, ethics
and marketing.
MODULE CONTENTS
 Introduction to Pharmaceutical Management
 Planning
 Organizing
 Directing
 Controlling
 Introduction to Pharmacy Accounting
 Pharmaceutical Operations Management
 Ethics and Pharmacy Regulations
`
DEAR STUDENT PHARMACIST

© Fotometry
In this course, you will learn the fundamentals of the pharmacy

business and professional management. You will study the management skills
that are important to all pharmacy students and pharmacists, regardless of their
position and locale. As soon-to-be pharmacists, you will acquire an essential
understanding of the management functions to become an effective and
efficient manager or leader of an organization. Assessment of this course will use
a combination of methods such as projects, quizzes, and exams.
Copyright © 2020
At the end of the course, you are expected to: (1) integrate
knowledge of the fundamentals of pharmacy business and professional
Module icons by
management in the rapidly expanding field of pharmacy practice, (2) explain
Andrea Kaye S. Rebucal
the significance of planning in management in the creation of goals and
standards for controlling to avoid uncertainty and reduce overlapping and
Module Design by
wasteful activities, (3) establish proper start-up techniques of delegation to
maximize the productivity of an organization and to assertively implement laid
Mary Luz C. Fiangaan
out plans, (4) display good leadership style to guide and motivate other people Gabriel Glenn G. Ochoa
to achieve predetermined goals, (5) demonstrate proper assessment of Hector L. Martin
subordinates to minimize organizational errors to assure effective management
control of a pharmacy, (6) identify the importance of financial analysis and
management to pharmacy practice, (7) describe the scope of operations
management in pharmacy, and (8) know the concepts of jurisprudence, ethics
and marketing.
Saint Louis University
We sincerely hope that this will be a meaningful and an interesting learning School of Natural Sciences
experience for you. Department of Pharmacy
Wishing you all the best in your studies,

Course Facilitators
COURSE STUDY GUIDE
1. PRESENTING REQUIREMENTS
Proper presentation of requirements is important
because almost all assignments include points for
presentation. This may include points for things such as
formatting and layout, word count, APA referencing,
writing style, grammar and spelling. Before you start:
• Check your learning materials, the course page,
guide from your facilitator or the assignment
question for how it should be presented.
• Read the instructions carefully, and make sure you
understand them and follow them exactly. If
you’re not clear about what’s required contact
your facilitator.
2. ACADEMIC WRITING
The writing you need to do is more formal,
objective and structured. While different assignment types
and subjects may have different writing conventions,
academic writing has these common features:
• It has a formal tone
• It uses third person rather than first person
perspective
• It follows a specific theme or answers a specific
question or questions, using a logical argument
• It is well-organized with a recognized structure
• It is well-researched and referenced
(acknowledging other writers and sources)
• It provides evidence showing you have thought
about, researched and understood the topic
3. ASSESSMENT AND EVALUATION ACTIVITIES

In answering all the assessment and evaluation
activities, write legibly. You must remember that all
activities in the module are academic activities, which
mean that the relevant academic conventions apply.
Think before you write.
• Your answers should be composed of complete
and grammatically correct sentences. Do not use
abbreviations and acronyms unless these are
introduced in the readings, and do not write in
text-speak. Avoid writing in all caps.
• In the self-processed discussions, write appropriate
and well-thought arguments and judgements.
Avoid merely approving or disapproving with
what is expressed in the material. You need to
support your inputs in the discussions from reliable
information or from empirical observation. Do not
write uninformed opinions.
• Do not write lengthy answers. Stick to the point. Be
clear what your main point is and express it as
concisely as possible. Do not let your discussion
stray. Make use of the spaces in the module as
your guide.
• Quote your sources if there are in answering all the
activities.
4. APA REFERENCING AND AVOIDING PLAGIARISM
When you use an author's research, writing and/or
ideas as a resource, they don’t become yours, they still
belong to the author. Referencing is used to acknowledge
the author's ownership. Referencing shows how much
research you have done, it gives evidence of the validity
of your opinion, and allows readers who are interested in
the topic to go back to the original source. Our institution
requires to use the APA system of referencing - this is what
determines the style and format of your references, i.e. how
they are written. Plagiarism is when you copy someone
else's work and present it as your own, either unintentionally
or deliberately. By stealing someone else’s work and
passing it off as your own, you lose academic integrity and
the respect of others. It is also unfair to other students who
have worked hard to express their own ideas or produce
original work. Any final piece of work that you submit must
be your own independent work. This is particularly
important when working in study groups or having
discussions with other students on assessments. Plagiarism
could be:
• copying the work of another student
• copying from textbooks, the Web and other work
without correct citation
• failing to acknowledge sources including your
own work, used for other purposes
5. RECEIVING MATERIALS AND SUBMISSION

All learning materials are packaged into learning
packets and will be sent via courier (e.g. LBC) to your
respective homes. The learning packet includes the printed
materials and USB OTG flash drives that contain
supplementary learning materials for you. Upon receipt of
the learning packet, check all the contents to ensure that
all learning materials from the courses enrolled is present.
You will be receiving the learning packets twice, first for
midterms and second for the finals. Before the end of the
midterms, you will be tasked to send back through
correspondence the accomplished and scheduled
modules for midterms. Remember to check your deadlines
and try to submit your requirements by the due date. Make
sure you will follow it up with the facilitator through text or
any other media available for you.
6. ETIQUETTE OF A LOUISIAN STUDENT PHARMACIST

Finally, you are the learner; hence, accomplish
the module on your own. Your family members and friends
at home will support you but the activities must be
completed by you. As a future Louisan Pharmacist, always
strive to demonstrate our core values of Competence,
Creativity, Social involvement and Christian spirit.
E. Do not procrastinate
Study Tips for Modular Learning Remember, it is not others who will be short-changed if you will not
A. Getting Ready for Distance Learning do your work on time. It will be you. Before you start doing your tasks,
Distance learning is self-paced. This entails planning your workload, read and understand the assessment tools provided. Do not settle
scheduling what you will need to be complete each week and with the low standards, target the highest standards in doing your
setting goals and deadlines for completing different chunks of work. assigned tasks. I know you can. Ensure that you will not miss any part
Make sure you know what your course involves, including the of the module and you will not miss to accomplish every activity in
objectives of the course, assignments and their submission dates, every unit as scheduled.
exams, course facilitator’s name and contact details.
F. Connect with others
B. Familiarize yourself with your course materials Sometimes when you are studying by distance you can feel
Acquaint yourself with the materials and information about the isolated, but remember you are not alone. If you did not understand
course as soon as you receive the learning packet. Take the time to the readings and other tasks, re-read and focus. If this will not work,
check the contents of printed materials and go over the modules engage all possible resources. You may ask other family members
given. Check the e-materials and references saved in the USB OTG and friends to help you. Your facilitator will support you through your
flash drive, if your resources permit. Make sure you can access the studies and help you succeed. Feel free to contact him/her for
files. This will help you know how to find your way around this modality assistance.
of learning, what features it has and how it works, including important
things like how to submit an assignment or contact your facilitator. If G. Increase your motivation
you have any inquiries or clarifications, you can also find out the Your level of motivation affects your chance of succeeding in your
answer before your course work begins. studies because academic success is a combination of skill and will.
Set realistic goals if you feel overwhelmed by the amount of work
C. Be prepared you have to do. Take control and think about what works for you
Schedule and manage your time to read and understand every part and what doesn’t. If you don’t think the strategies you’ve been
of the module. Study how you can manage to do the activities of this using work all that well for you, then try some new strategies.
module in consideration of your other modules from other courses. Be
very conscious with the study schedule. Post it on a conspicuous H. Get the most out of your reading
place so that you can always see.
You'll need to read course materials and assessments, and most
D. Planning your work likely set texts, recommended readings, library books, journals and
Use a study calendar to plan your semester or a study timetable to Internet sources if time and resources permit. Read effectively and
help you plan each week will help you get organized, and give you efficiently. This means reading what is relevant, without wasting time,
an overview of what work you need to do. If your course material only so that you understand and can use and remember what you have
has final deadlines for each assignment and the exam date:
read. Active reading can help you get the most out of your reading.
• Work out what you need to do for each assignment and for the
exam.
• Divide what you need to do into manageable chunks then estimate
how long each one will take. Set your own mini deadlines.
MODULE CONTENTS AND STUDY SCHEDULE

Timetable Unit Topic Page
Week One: Introduction to Pharmaceutical Management
June 13 to June 18 7/15
Planning
Week Two:
Organizing 22
June 20 to June 25
Week Three: Directing
June 27 to July 2 41/52
Controlling
MIDTERM EXAM (July 4 & 5)
Week Four:
Introduction to Pharmacy Accounting 63
July 6 to July 9
Week Five:
Pharmaceutical Operations Management 76
July 11 to July 16
Week Six:
Ethics and Pharmacy Regulations 88
July 18 to July 22
FINAL EXAM (July 23 & 25)
BEFORE YOU START!
You must understand the learning process of these modules. Each module has five
parts, indicated by the following symbols. Ensure that you go through the
modules as presented and do the tasks and activities.
What’s this all about?

This part introduces you to the topic. It could
be a straightforward introduction, a situation
to think about, a short video clip, or a
question for you to answer.
Time to prove your mastery!
This section challenges your
conceptual understanding and skills.
It may include activities or projects
that will allow you to apply the
learned concepts and skills to new
situations.
Let’s learn by doing!

This part provides you with
experiences which will develop your
understanding of the concepts,
processes and skills that you need to
learn. It usually includes activities or
tasks for you to accomplish. Show me what you learned.
This part provides opportunities to
evaluate your understanding and
abilities. It may contain quizzes and
tests, case studies, or essays.
In focus.
This section emphasizes on a particular
aspect of the lesson and clarifies any
misconceptions that you may have. You
could be directed to read pages of your
textbook, be given a slide presentation,
infographic, or a video of a lecture.
MODULE 1
Introduction to
Pharmaceutical Management
JPGalito_MAGAntonio_DTCCanlas_MRGLangit_©2021 7
Saint Louis University – Department of Pharmacy

Management is the art and science of planning, organizing, directing
and controlling human efforts and resources for the general good within the
organizational framework and economic environment of the company or firm.
It is a process which brings together resources and unites them in such a way
that, collectively, they achieve goals and objectives in the most efficient manner
possible (Tootelian & Gaedeke, 1993).
At the end of this lesson, you should be able to:

1. Explain the nature and functions of management
2. Describe the managerial roles, activities and skills
3. Identify and discuss the different levels of management
4. Explain the principles of management to facilitate coordination of activities
MANAGEMENT IN PHARMACY
Managing a pharmacy requires focus. It is a conscious, organized
effort to harness all the resources available as well as using them to attain the
goals of the pharmacy effectively and efficiently. Pharmacists have the
unique ability to practice in a variety of settings. Whether or not they have
formal authority, most pharmacists will become managers of people,
processes or of entire organizations.
Before we start, may I know your standpoint on this question?
Why is it that all pharmacists should be considered managers regardless of

their titles or positions?
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THE MANAGEMENT PROCESS
1. PLANNING
 the most critical element of management which involves the formulation of
objectives, programs, policies, procedures, rules, and regulations in order to
achieve the goals of the business
 it encompasses:
a. decision-making (selects of the best course of action to take)
b. forecasting (make decisions in advance)
 it comprises the following activities:

a. Developing Objectives – envision the goals to be accomplished
b. Forecasting – estimate and predict future conditions and events
c. Programming – establish the sequence and priority of actions to take or
steps to follow in achieving the objectives
d. Scheduling – set a time sequence for the steps to take in undertaking a
project

e. Budgeting – allocate resources to achieve an objective within the specified period of time
f. Developing policies – formulate standing decision that applies to the concerns of the enterprise as a
whole in achieving its objectives
g. Establishing procedures – standardize the work that must be done uniformly
2. ORGANIZING
 Refers to grouping people, establishing relationship among them, and
defining or delegating the authority and responsibility that they have
 A common mistake in small pharmacies is the manager's presumption that

all employees understand their individual tasks. Some conventional terms
related to tasks in the workplace include:
a. Delegating – the work of the manager to entrust others with responsibility and authority and to create
accountability for results
b. Authority – the sum of the rights and power assigned to a position
c. Accountability – the obligation to assume responsibility and exercise authority in conformity with
understood and accepted performance standards
STAFFING
 a highly qualitative process that determines what positions are to be filled
 involves the following:
 preparing the job description
 identifying the sources of potential applicants
 interviewing and selecting applicants
 orienting, training and evaluating new employees
3. DIRECTING/LEADING
 involves keeping personnel and other resources focused on the goals of the
pharmacy and ensuring that they are utilized in a manner consistent with the
policies established by the owner
 while planning, organizing, and staffing are undertaken periodically, directing is a
continuous activity
 it is a competent task which often separates the highly competent from the less-
skilled managers
4. CONTROLLING
 the process of measuring and correcting the activities of subordinates
 it involves the periodic assessment of the status of the pharmacy (monthly, quarterly, yearly) and the
recommendation of strategies to improve performance
 it is the manager’s “fail-safe” mechanism since it identifies problems and opportunities in their early
stages so as to provide time for taking corrective actions
 the following are ways in which control can be maintained:

a. Quantitative
 financial statements to determine if revenues and expenses are within
budgeted limits
 inventory
b. Qualitative
 evaluating levels of patient satisfaction
 employee performance

THE MANAGER'S ROLES AND ACTIVITIES
1. Leadership
A. I N T E R P E R S O N A L
o takes charge of the organization (hiring, training, motivating and
disciplining)
2. Figurehead Role
o performs duties that are ceremonial and symbolic in nature (welcoming
official visitors, signing legal documents, etc.)
3. Liaison Role
o helps groups work effectively with each other (motivates, communicates,
and promotes team spirit, and the like through activities and through
interactions outside the organization)
4. Monitor Role
o with a network of contacts, the manager gets useful information by
observing his or her surroundings and asking his or her subordinates, peers
and superiors
o typically, this is done by keeping up to date with current developments
B. I N F O R M A T I O N A L and talking with others to learn the changes in the public’s tastes and
what competitors are planning
5. Spokesperson Role
o speaks on behalf of the organization and transmits information about the
organization’s plan, policies, and actions
o the manager has to keep his or her superior informed of every
development in his or her unit (directors and shareholders must be
informed about the company’s financial performance; customers must
be informed about new products and quality maintenance; government
officials must be informed about implementation of compliance of laws,
etc.)
6. Disseminator Role
o passes some of the privileged information directly to his or her
subordinates, peers, and superiors
7. Resource Allocator Role

o the most important resource that the manager gives to his or her
subordinates is his or her time
o the manager should have an open-door policy and allow the
subordinates to express their opinions and share their experiences
o he/she is responsible for providing human, physical and monetary
C. D E C I S I O N A L
resources
o delegation of resources or authority is a way to empower subordinates
8. Disturbance Handler Role
o takes corrective action to respond to previously unforeseen problems
carefully, skillfully, and effectively
o involuntarily reacts to pressures (workers’ strike, declining sales,
bankruptcy)
9. Negotiator Role
o the manager represents the organization in bargaining and negotiating
with outsiders and insiders in order to gain an advantage for his or her own
unit
10. Entrepreneurship Role
o the manager is a creator and an innovator (presents novel ideas and
initiates new undertakings particularly developmental projects)

SKILLS OF A MANAGER
1. Conceptual – able to analyze and diagnose situation and distinguish between cause and effect
2. Human – understand, alter, lead and control behavior of groups or individuals through verbal or non-verbal
communication
3. Technical – requires job-specific skills to perform a particular occupation at a high level
4. Core competency – has set of departmental skills, abilities, knowledge and experience that allow
outperformance of competitors
5. Restructuring – able to simplify or downsize an operation to lower operating cost; can reduce the morale of
remaining employees
6. Outsourcing – contracting with other companies abroad, needs increasing efficiency by lowering operational
costs
7. Empowerment – involves giving employee more authority and responsibility over the way they perform their
activities
LEVELS OF MANAGEMENT
 Management may be classified into three major levels - Top, Middle, and First level/line.
a. T o p M a n a g e r s
 high-ranking executives of the organization
 involved in the operations of the whole organization
 ie: presidents, chief executives, senior vice presidents
RESPONSIBILITIES
 analyze, evaluate and deal with the environmental forces
 establish overall long term goals and broad policies of the company including the master
budget
 appoint departmental and other key executives
 represent the company to the outside world
 coordinate the activities and efforts of different departments
b. MiddleManagers
 direct the activities of the supervisors and in some cases those of the workers
 ie: branch managers, project managers, firm managers, finance managers
RESPONSIBILITIES
 interpret and explain the policies framed by the top management
 compile and issue detailed instruction regarding operations
 cooperate among themselves so as to integrate various parts of the
division of a department
 motivate supervisory personnel to work for organizational goals
 develop and train supervisory and operative personnel
c. First-Level Managers/Lower Level Managers

 ie: production supervisors, clerical supervisors, school supervisors, hospital supervisors
RESPONSIBILITIES
 plan day to day production within the goals laid down by higher
authority
 assign jobs to workers and make arrangements for their training and
development
 supervise and control workers and maintain personal contact with them

PRINCIPLES OF MANAGEMENT BY HENRI FAYOL
1. Division of Work
o specialized jobs are assigned to various departments and/or positions
o this promotes efficiency of the workforce; increases productivity; and
increases their accuracy and speed
2. Authority and Responsibility

o employees should have authority for ensuring the performance and
completion of tasks assigned to them
o those who are given authority over some functions should also be held
responsible for these functions
3. Discipline
o respect for agreements which are directed at achieving obedience,
application and energy
4. Unity of Command
o an employee must report to a single direct supervisor with whom he or she
is responsible
o the rule against "by-passing" should be practiced (this rule states that a
supervisor should avoid giving orders directly to the subordinates of his or
her subordinate
5. Unity of Direction
o group activities should have one boss and one plan with the same objective
o every employee must understand and be willing to work for and toward the business's goals
6. Subordination of Individual Interest to General Interest

o the interest of one individual or group of individuals should not outweigh the interests of the business
7. Remuneration
o there should be a fair method of payment that affords the
maximum possible satisfaction to both the employees and the
employer
o this principle is based on "equal pay for equal work"
8. Centralization
o this refers to the extent to which authority is concentrated
o this principle of management ensures that major policies and decisions are made only by the top
management
9. Scalar Chain / Line of Authority

o in the structure of any organization, ultimate authority lies at the top and
communication flows downward
o the scope of the limitations of authority must be acknowledged both on
paper and in the mindset and actions of the employees
10. Order
o this ensures that employees are assigned and resources are allocated properly in the organization
11. Equity
o it involves the fair and kind treatment of employees

12. Stability of Tenure
o employees should be given enough time and opportunities to
prove their worth to the company (this can be applied through
probationary appointment)
13. Initiative
o thinking out and execution of a plan
o Fayol encourages managers to "sacrifice personal vanity" in order
to permit subordinates to exercise it
14. Esprit de corps

o this principle explains that "in union there is strength"
o it emphasizes the need for teamwork and the importance of communication and cooperation in
achieving the goals of the team
Word Cloud: What is one word that you associate to all our lessons in Module 1: Introduction to
Pharmaceutical Management. Choose one (1) word from the Word Cloud and elaborate by relating the
concepts discussed in this module. Refer to the given rubric for scoring as your guide in
written solutions. (20 points)

Rubric for Written Solutions
Excellent Good Satisfactory Needs Improvement
CRITERIA
4 points 3 points 2 points 1 point
Purpose Introduces and presents Introduces and presents Introduces and presents Introduces and presents
answer effectively and clearly; the answer adequately answer somewhat effectively the answer poorly;
purpose is obvious to the purpose is generally
reader unclear
Writing and It contains very minimal or no It contains some It contains several It contains substantial
Quality grammatical and technical grammatical and grammatical and grammatical and
Format errors. technical errors. technical errors. technical
Development Develops with exceptional Develops as assigned, Does not fully develop as It is undeveloped;
and Content care, including all topics including a full discussion assigned and may ignore one paper relates poorly to
assigned in a seamless of each topic assigned; of the major issues; analysis is the assignment and
manner; provides a balanced information displays a basic or general; reader includes very little
presentation of relevant clear analysis of the gains few insights discussion of the issues
information and shows a significant topics; reader discussed in the course;
thoughtful, in depth analysis of gains some insights analysis is vague or not
the topics; reader gains insights evident; reader is
confused
Cohesion Ideas are supported Ideas are generally Many ideas are unsupported Writing is incoherent
and Insight effectively; the writer shows supported; the writer shows and it may not be clear and shows little or no
clear evidence of having evidence of having read, whether the writer has insight; there is no
understood and synthesized understood, and correctly understood or synthesized the evidence that the writer
course concepts; the applied the course concepts; application to the has read the assigned
application of concepts concepts to the assigned assigned topic may be texts or understood the
o the assigned topic is topic incomplete concepts
exceptional
Contribution It offered an imaginative new It offered an imaginative It offered nothing new or is It was not complete
and insight or a very idea or approach on the not very and offered no new
Creativity interesting idea on the topic topic assigned. imaginative —no information or
assigned. interesting information approach on the topic
or approach on the assigned.
topic assigned.

MODULE 2
Planning

Planning is the process of developing, organizing, and evaluating the activities required
to achieve a desired goal. It is an organization's purposeful effort to maximize its future
success. Many organizations invest significant time and resources in planning because of
its importance in the success of an organization and its operations.

1. Identify the importance of planning
2. Describe the types of planning
3. Explain the steps of planning and decision-making to minimize risk and uncertainty
The actual process of planning varies by the type of planning being

conducted and by the size of the organization. The planning process should
begin with a deliberation of the purpose of the organization, and of the
planning effort itself. This is then followed by an assessment of the
organization's current situation or status.
Next, future goals must be determined in order to develop a strategy for bridging the gap betwwen the present and
the future. Provisional objectives that measure progress towards the goals are then identified, and responsibilities and
timelines for each objective are assigned. Lastly, the plan needs to be communicated and discussed with those involved,
and then, executed, and monitored.
Plans are basically drawn from the organization's mission and vision. Study
the descriptions/examples given and classify whether they refer to a vision
or mission statement. Tick the box that corresponds to your answer. (10
points)
Description/Example Vision Mission

1. Defines the organization as to what it is and what it does  
2. A statement which draws inspiration or foundation from the values of the  

organization
3. A statement which distinguishes the organization from others that provide  
similar goods and services
4. Envisions the organization's desired goal as to how it perceives itself to be in the  
future
5. Serves as a guide in strategic planning process as both the beginning point  
and the end point
6. Visualizes the organization's purpose  
7. "To put a smile on our customers' faces in every market we operate"  
8. "To serve the nation by undertaking sustainable programs that are focused on  
health and education"
9. "To be a pillar in helping build a healthy, educated and productive nation"  
10. "To be the world's leading health, beauty and lifestyle retailer"  

IMPORTANCE OF PLANNING
1. It gives a sense of direction and purpose
2. It provides competitive advantage by anticipating actions
3. It assists progress checking
4. It helps get participation and coordination
5. It helps cope with uncertainty
QUALITIES OF AN EFFECTIVE PLAN

1. Unity: One plan at a time should be use to achieve a goal.
2. Continuity: Managers build and refine plans based on previous plans.
3. Accuracy: All available relevant information must be considered.
4. Flexible: The planning process should be adjustable enough to fit situational changes.
LEVELS OF PLANNING
1. Strategic Planning
 Determines the organization's long term goals for the next 5 years with
the resources they expect to have available.
2. Tactical Planning
 Allows middle managers determine what contributions their departments
can make with their given resources for the next 6 months to 2 years.
3. Operational Planning
 Determines how to accomplish specific tasks with available resources
within the next 1 week to 1 year
THE PLANNING PROCESS

 Includes:
a. goal-making
b. strategy-making
 Plans are basically drawn from the organization's mission and vision.
a. Mission
 the organization's reason for existence
b. Vision
 long-term goal describing what an organization's wants to become
 Once the mission and vision are agreed upon and formally stated in the organizational plan, they guide the
next steps by defining which strategies are appropriate and not appropriate.
 A comprehensive planning process involves the following steps:

i. Be aware of opportunities: setting realistic objectives depends on this awareness
ii. Establish objectives: objectives specify the expected results and indicate the end points to be done
iii. Develop premises: forecasting is very important in premising
iv. Determine alternatives: to look for and examine critically alternative courses of action, especially
those that are not apparently seen

v. Evaluate alternative courses of action: weighing them in terms of premises and goals
vi. Select a course of action: this is the critical point when the plan is to be adopted
vii. Implement the plan: the selected alternative is programmed for implementation
viii. Evaluation: revisions and other adjustments are made
GOALS AND ACTION PLANS

 Managers must establish a set of primary goals to which an organization is committed.
Goal (also known as an objective)
 a specific commitment to attain a measurable outcome within a stated period of time
 are set according to the levels of management and also arranged as in the chain or levels of planning
 Examples of goals according to the levels of planning:

1. Strategic goal: the business should be highly profitable
2. Tactical goal: offer quality affordable products and costs cutting
3. Operational goal: zero-waste production, acquisition of low-priced by quality materials
Characteristics of an Effective Goal

 The qualities of a good goal are represented by the acronym SMART, which stands for Specific, Measurable,
Attainable, Results-oriented and Time-bound.
 SPECIFIC: Goals must be precise and well-defined.

SMART  MEASURABLE: Goals must be quantifiable - represented by numbers or percentage.
 ATTAINABLE: Goals must be challenging but practical and realistic to be achievable.
 RESULTS-ORIENTED: Goals must reflect the action to accomplish a desired end result.
 TIME BOUND: Goal should specify the target date, schedule date, or deadline date when to accomplish it.
ACTIVITIES IN PLANNING
Formulating forecasts 1. FORECASTING
- increases the awareness about critical contingencies
Establishing objectives facing the organization in terms of economic conditions,
competition and customer
Setting policies SWOT analysis

- it is a search for the Strengths, Weaknesses, Opportunities
and threats affecting the organization
Determining procedures
Two types of forecasting:
Developing programs
i. trend analysis
o refers to a theoretical prediction using a progression
of historical data; trend analysis that are commonly
Providing schedules used are time series forecast, cycle patterns and
seasonal variation
Preparing budgets
ii. contingency planning
o this planning analysis requires managers to predict
several hypothetical future conditions and present
different anticipated options, solutions, strategies or
budgets appropriate to the alternative conditions

2. ESTABLISHING OBJECTIVES to bridge the gap between current capability and the mission
3. SETTING POLICIES
Policy: plan of action or a way of management to ensure a uniform and consistent manner of handling basic
management programs
4. DETERMINING PROCEDURES
Procedure: a standardized method of performing a specified work for greater productivity, effectiveness and
uniformity
Considerations in using Procedures
1. Consistency
2. Research-based and logical
3. Periodic review and revisions as needed
5. DEVELOPING PROGRAMS
Program: the sequence of action steps to be followed in achieving objectives in the light of a highly dynamic
and volatile environment
Basic Steps in Programming:
1. Divide into steps the activities necessary to achieve the objective
2. Spell out steps in carrying out the parts of the program
3. Determine responsibility and accountability for each step of the program
4. Determine resources needed for each step
5. Break down the estimated time for each step
6. Set the overall schedule for each part of the program, making allowance for delay
7. Review and reconcile
6. PROVIDING SCHEDULES
Scheduling: establishing a time sequence for program steps or providing specific time frame as to when each
action step is to be completed
7. PREPARING BUDGETS
Budget: statement of an organization’s programs in terms of resources or monetary amounts
Budgeting: allocating resources to accomplish objectives and carry out programs
Two Uses of Budgets:

1. enables us to determine the most cost-efficient use of scarce resources
2. provides a measure of performance; ie. actual results vs. planned budgets for the period
Three Basic Steps in Budgeting:

1. translating plans into accounting results
2. adjusting plans to make it workable
3. the resulting budgets should be useful in highlighting areas that need corrective/ remedial measures

DECISION-MAKING
 referred to as the essence of management
 this is the process of choosing a specific course of action from several possible
alternatives even if it has already been planned or being planned
The Decision-making Environment

 As a rule of thumb, the higher the position of the decision maker is in the organization, the more complex
and difficult the decisions he or she has to make. The higher the level of the decision-maker, the more
people will be affected by the decisions. In taking a deliberate action or otherwise, people who make
information-based decisions go through a decision-making process.
STEPS IN THE DECISION-MAKING PROCESS
I. Set objectives Make at least one decision or a series of decisions.
Constraints should be defined by legal, economic, or

political considerations.
II. Identify constraints
Decision constraints are sometimes presented in terms
of desired specifications or performance standards.
Alternatives are chosen because they provide a

solution.
III. Identify alternatives
But often, one of the alternatives does nothing or has
the least advantage.
Information depends on the complexity and scope of

the possible decisions or choices.
IV. Gather appropriate information
Information is gathered to provide insight as to which
alternative to choose.
V. Evaluate alternatives
Decisions can be rendered based on available
information.
The manager examines the ranking of alternatives.

VI. Choose the most acceptable alternative

I. ANSWER ACCORDINGLY
Scenario: You are to open a drugstore business and you want to
put things in place for you to have a good position in the market.
Currently, you are working on creating your vision, mission, and
objectives of your organization. What will these be? (10 points)
Name of Drugstore
Vision (3 points)
Mission (3 points)
Objectives (Give four)
II. TRUE OR FALSE (10 points)

Instruction: Write TRUE if the statement is correct and FALSE if otherwise.
__________ 1. Strategic management involves managers from all parts of the organization in the formulation and
implementation of strategic goals and strategies.
__________ 2. Organizational weaknesses are the external factors that hinder an organization in achieving a competitive
advantage.
__________ 3. Forecasting is to be made after SWOT analysis.
__________ 4. Whenever possible, goals should be linked to a specific time frame and be quantified.
__________ 5. Procedures ensure that all recurring or routine situations are handled in a consistent-predetermined manner.
__________ 6. The difference between an opportunity and threat depends on how a company maintains its position
strategically.
__________ 7. Contingency plans are alternative plans to be used if uncontrollable events occur.
__________ 8. The process of formulating strategic plans involves not only the top managers but also the middle managers
because they are the ones who are expected to understand and explain the strategies.
__________ 9. An organization's strategic and tactical plans must be based upon the original operational plans.
__________ 10. Companies can get a clear sense of market opportunities by analyzing the external environment.

MODULE 3
Organizing

Organizational structure refers to a company or business’ operations and
management. Organizing is the process of establishing utility of all the resources in
the management system. It includes the process of classifying and categorizing
personnel, establishing relationships among them, and defining authority and
responsibilities. This key aspect of business planning also includes staffing. Staffing is
the sphere of employment. It starts from job analysis, recruitment, then hiring of
people with the necessary skills for the appropriate positions needed.

1. Define and understand the development and nature of organizing
2. Identify and differentiate the different types of organizational structures
3. Understand the various principles involved in organizing
4. Examine the process of employment in the pharmacy setting.
5. Discuss the importance of personnel management in providing high-quality pharmacy services.
6. Explain the significance of job orientation, training, and development in an organization.
According to Management Study Guide (https://www.managementstudyguide.com/management_functions.htm),

Organization is the process of bringing together physical, financial and human resources and developing productive
relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business
is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a
business involves determining & providing human and non-human resources to the organizational structure. Organizing
as a process involves:
 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
Before we start, may I know your standpoint on this question?
If you were to organize your own pharmacy, how would you best organize your products? Choose one (1) from the
following options below, then justify.
A. According to pharmaceutical or pharmacological use
B. According to manufacturing or distributing firm
C. According to generic name
D. Alphabetically
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I. The Organization Design
 Organization
- It refers to the process of structuring activities, procedures, and people within the business
- it is a formal and intentional design of structures, roles, and positions
 General Steps in Organizing
 Mapping the process and procedures of

Reflect on
accomplishing the organization’s objectives in
Step 1 plans, goals the most efficient and effective way.
and objectives  Determine how time and resources will be
used.
 Delegation of work, responsibility and authority

Identification
 To allow freedom to contribute ideas and make
Step 2 and division maximum use of their abilities
of tasks  To provide maximum flexibility in meeting
consumer’s needs
Allocation of  Also known as “departmentalization”

 This allows the combination of groups with
resources and
similar and related activities into a
Step 3 directives for department.
tasks  It addresses general problems easier
Establishing  The ability to identify and initiate working

relationships
Step 4 relationship
 To develop and maintain mutual benefit
among individuals among employees, customers and members
in the community
 Involve evaluation of results of implementing

Evaluate results the organizing strategy
of organizing  Reflecting on how effective the strategy was
Step 5  Feedback should provide necessary
strategy
information to improve current operations
 Working Principles of Organizing

1. Principle of objective - organizational efficiency increases when work performed is directed towards the
desired objective
2. Principle of specialization - to make people more efficient in their area of work specialization (Example:
accountant in accounting)
3. Principle of logical arrangement - work arranged logically results in greater accomplishments and highest
personal satisfaction
4. Principle of busyness - the more the people in the organization, the more work they tend to find
5. Principle of maximum span - the more people each manager can effectively manage/handle, the smaller the
total number required to obtained end results
6. Principle of minimum levels - the fewer the levels within the span of supervision, the greater potential and
effectiveness of the people involved

Identify the specific principle of organizing exemplified by the following. Write the CAPITAL
LETTER of your answer on the blank provided before each item number.
A. Principle of specialization D. Principle of logical arrangement

B. Principle of minimum levels E. Principle of objective
C. Principle of busyness F. Principle of maximum span
1. Allowing people to find more work to do in order to retain job and gain recognition
2. Commitment of an employee to his assigned responsibilities for the realization of company’s aspirations
f 3. Assigning more people supervised by managers so that lesser work will be accomplished
4. An entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency
b 5. Assigning fewer levels within the span of supervision for greater efficiency
6. Empowerment of people to carry on the responsibility, authority, and accountability of the work
assigned
 Importance of Organizing
1. It is the primary mechanism to implement plans
2. Development of personnel and help maximize their productivity
3. Effective utilization of resources
4. Describes work relationships and adaptation to change
5. Advantage of specialization
 Results of Good Organization

1. Well-established responsibilities and avoidance of buck-passing (the practice of shifting the responsibility to
someone else for something)
2. Easier communication and lesser conflicts among individuals in the organization
3. Jurisdictional disputes are avoided
4. Development of executive ability
5. Effective measurement of an individual’s performance
6. Equitable distribution of work, functions and/or personnel supervision
7. Expansion and contraction are permitted without disorganizing the structure
8. Business can develop into an ideal organization
9. The confidence, enthusiasm and discipline of an individual or group is generally heightened
10. Clear and definite delineations of avenues for promotion
11. Prevention of duplication of work and adequate control of growth
12. Wage and salary admin is aided through forced job analysis and description
II. The Organizational Structure

- It refers to the division of executives, departments, and group of workers in terms of
their activities or tasks used to visualize the dynamics of the functions of different
departments and how they relate to each other
 Types of Organizational Structure

1. Functional – organization is structured in terms of the different kinds of work to be
done (Example: Selling, marketing)

2. Divisionalized – organization is structured in terms of the results to be achieved as the outcome of that work
Example: Cardiovascular division, Pediatric division
3. Formal – organization that is somewhat standardized, which serve as basis for customizing a structure to meet
the preferences of the owner and the goals of the organization.
a. Line Organization – the simplest organization approach where there is a vertical flow of relationship
among personnel. It is also known as the chain of command or scalar principle.
 This type of organizational structure is commonly found in small pharmacies that has 3 to 8
employees. This setting involves all personnel in the preparation and sale of products, and the top
management has the right to demand compliance to their subordinates.
b. Line-and-Staff Organization – an organization approach in which authorities establish goals and
directives that are done by staff and other workers.
 This type of organization is commonly found in larger pharmacies that has more employees. The
principle of unity of command is usually violated because of the number of levels of management.
4. Informal – organization that is geared towards strengthening the cohesiveness and increasing the chances
of goal achievement.
a. Organization by Time – the simplest method of organizing based on working hours
Example: Day and night shifts in a 24/7 drugstore
b. Organization by Number – a method applied to group of employees are grouped by numbers with
similar specialization manned effectively by one personnel.
c. Organization by Function – a method applied when there is diversity in jobs and skills required to
accomplish a task satisfactorily

From your standpoint, which is the best type of organizational structure? Briefly justify.
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 Principles of Organizational Structure

1. Differentiation – refers to the degree to which units are dissimilar
a. Horizontal differentiation – describes the differences among workers or units in an organization or may
also refer to multi-ownership of different firms from a variety of related industries
Example: A health system can own several firms with different functions such as hospitals, health care and
nursing facilities, and managed-care businesses
b. Vertical differentiation – it involves “chain of command”, focuses on the relationship and hierarchical
positions in an organization, and commonly represented by an organizational chart. An organizational chart
shows how tasks are delegated among employees and who reports to whom in the organization
c. Spatial differentiation – involves the coordination of different units located in different locations
Example: Chain pharmacies, pharmaceutical manufacturers
2. Formalization – emphasizes on the maintenance of organizational structure in terms of rules and

regulations, procedural specifications, technical competence and impersonality.
3. Centralization – refers to the concentration of decision-making power at a single point in the organization
 Centralized organizational structures rely on the highest level of management to make decisions and
provide for the company.
 Decentralized organizational structure is a recent trend which rely on team environment, where
individuals at any level in the organization have the autonomy to make decisions.
4. Division of labor (aka work specialization) – refers to the degree to which the organizational tasks are
divided into separate jobs. High work efficiency is observed when this principle is applied.
Example: In the hospital setting, the doctor does the diagnosis, the pharmacist dispenses and/or
administers the medication
5. Parity of Authority and Responsibility – the responsibility in decision making cannot be passed, while the
authority to make decisions can be shared or assigned to other individuals in the organization.
6. Unity of Command - refers to the concept that an individual employee must report to only one supervisor or
manager
7. Span of Control – refers to the number of employees a manager can effectively control
Example: One pharmacist can supervise one or two pharmacy assistants/technicians and non-pharmacy
personnel at the same time and can still manage the store
8. Departmentalization – refers to the categories of individuals according to the tasks performed

Example: The purchasing department is responsible in the procurement, distribution and management
of drug products.

From your standpoint, rank your top five (5) principles of organizational structure based on
significance. No need to justify.
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III. Pharmacy Management
 The practice of pharmacy management consists of a wide range of complex tasks that involve either managing
people or managing non-human resources such as property and information.
Non-Human Resources Human Resources

Inventory control
HRM (Human Resource Management)
Computer systems design and maintenance
Financial management
o HRM is the process of achieving organizational objectives

through management of people from recruitment until
termination.
o HRM is a critical process because many employees are

probably capable or have higher performance levels than what
they are currently rendering. Many problems in the pharmacy
profession result at least partially from the fact that pharmacists are
often poorly managed and led.
o Reasons for mismanagement:

 unclear directives from the management
 poor teamwork
 insufficient training
 inadequate feedback about productivity and quality of
work performance
 conflicts in the workplace
 Personnel Policies
- Establishing employment policies is of critical importance to the staffing process. By having well-
thought-out policies, both management and prospective employees will understand what
employment with the pharmacy means.

1. Licensing and registration
 Must be a registered pharmacist and adhere to the
requirements of continuing education
2. Working hours
 Includes the time and method of payment for regular
hours and overtime work
3. Compensation
 Compensation includes salary, wage, bonus and other benefits
 Competitive wages must be duly given to attract and retain competent personnel
 Fringe benefits may be given to attract new employees and retain existing ones (Example: health
insurance, discounts on merchandise, pension plans)
4. Vacations
 While it is important for employees to have vacation time, such
scheduling cannot be allowed to disrupt the operation of a business
5. Time off
 Consider to what extent will employees be allowed to time off for
personal needs, emergencies, holidays, birthdays and other matters
6. Training
 Training can be done through site-education programs sponsored by
national, state and local associations, and pharmacy schools
7. Grievances
 Planning and establishing procedures for handling grievance cases in an efficient manner is important
since conflicts between and among employees are bound to occur
8. Promotion
 Promoting an insider (current employee) as opposed to hiring an outsider
(new employee) is a sensitive matter
9. Personnel review
 Points for consideration:
o Will there be a review of employee performance?
o What factors will be included in such review?
o How will the reviews be used?
10. Termination
 Policy about termination must be clearly written from both an operational and legal standpoint

If you were given the chance to be employed as a newly registered pharmacist, what personnel
policy would you like your manager to expound on? Choose two (2) from those discussed then
justify.
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III. Staffing
- It is the process of quantitatively and qualitatively acquiring, deploying and
retaining the workforce for the efficiency and effectivity of an organization.
- It also refers to the organization of employees and workers into various
operating units.
- Staffing is critical in a pharmacy because it cannot afford to have
inefficient employees who do not help maximize the organization’s
productivity
 Nature of Staffing
1. Staffing is an important managerial function
Staffing function is the most important managerial act along with planning, organizing, directing
and controlling (the operations of these four functions depend upon the manpower which is
available through staffing function).
2. Staffing is a pervasive activity

Staffing function is carried out by all managers and in all types of concerns where business activities
are carried out.
3. Staffing is a continuous activity

Staffing function continues throughout the life of an organization due to the transfers and
promotions that take place.
4. Staffing helps in placing right men at the right job

It can be done effectively through proper recruitment procedures and then finally selecting the
most suitable candidate as per the job requirements.
5. Staffing is performed by all managers depending upon the nature of business, size of the company,
qualifications and skills of managers.
 Recruitment of staff
- It is the process of attracting job candidates with the right characteristics and
skills to fit job openings
- Purpose: To narrow down a wide spectrum of prospective employees to a

relatively small group of applicants from which one or possibly more
individuals will be hired
- Recruitment is preferred to start with a large number of potential job

candidates then give serious consideration to a smaller number

o Recruitment process
Step 1: Job Analysis, Job Specification, and Job Description
JOB ANALYSIS JOB DESCRIPTION JOB SPECIFICATION

A process of obtaining all pertinent A statement of the activities A statement of the human
job facts which the job entails qualifications necessary to do the job
Itinvolvesdeterminingajob Contains the following items: Contains the following items:

description and a job o Job title o Education
specification o Job summary o Experience
o Duties o Training
o Supervision given o Skills
o Working conditions
Step 2: Requisition of New Employees

 Strategic Human Resource Planning it the process of expecting and providing
for the movement of the people into, within, and out of the company, business,
or organization to support the firm's business strategy
 Steps of Strategic Human Resource Planning:

1. Planning the future needs by estimating the number and abilities of
people that the firm will need to operate in the foreseeable future
2. Planning for future turnover by predicting how many current employees are
likely to remain in the organization
3. Planning for recruitment selection and layoffs to attain the number of
required personnel
4. Planning for training and development to ensure the continued supply
of people with the right skills
Step 3: Actual Recruitment of Applicants

A. Internal resource
- Involves the transfer, promotion or re-employment of personnel within the organization
to a well-suited available position
- Advantage: Motivational level increase will increase employee’s productivity
- Disadvantage: Refrains the organization from new blood (ideas and experiences)
B. External resource
- Involves attracting applicants from outside the organization via advertising, drop-in or
walk-in, public or private employment agencies, school placement, write-in or online
recruiting
 Selection is the process of choosing which people would best fill

specific jobs. Conducting an established procedure must be
observed to ensure that only relevant information will be
obtained to sort the best qualified applicants.

o Selection process
PROCEDURES PURPOSES ACTIONS AND TRENDS

1. Completed job To indicate the applicant’s career objective Only requests information predicts success
applications in the job
2. Initial screening To conduct a quick evaluation of the Ask questions on work experience, past and
applicant expected salary
3. Testing To measure applicant’s performance and/or Computer testing, software, handwriting
current job/s, skills and abilities to learn on the analysis, lie detector tests and urinalysis
job
4. Background To make certain that the applicant is honest in Confirm information in the resume by contacting
investigation his or her resume or application form the applicant’s previous supervisor (with
permission)
5. In-depth selection To learn more about the applicant as an Conducted by the applicant’s possible
interview individual supervisor or manager
6. Physical To make sure that the applicant is physically Performed by a licensed doctor, the company's
examination capable of performing hisor her job; to protect medical doctor, or a doctor from the
employees against contagious diseases; to company’s choice of hospital
establish the health records of the applicant;
andto protecttheemployerfromunjustwork's
claims of compensation
7. Job offer To fill a job vacancy or position Introduce the salary offer and benefits package
o Administering Employment Tests

1. Job proficiency test - the applicant is given the opportunity to demonstrate his or her occupational skills
(Example: compound prescription, patient counselling, dispensing, and knowledge of pharmacy
practice)
2. Psychological test
a. Aptitude test (mental ability test) - measures the ability to solve problems and learn new materials
b. Personality test - measures job-related personal traits and characteristics
c. Interest test - measures preferences for engaging in certain activities (Example: mechanical,
clerical, literary, or managerial work
3. Integrity test - designed to measure the extent of a person’s social conscientiousness which relates to
job behavior
The selection process typically begins with the preliminary interview. After which, candidates
complete the application for employment. They progress through a series of selection tests, the
employment interview, and reference and background checks. The successful applicant
receives a company physical examination and is employed if the results are satisfactory. Several
external and internal factors impact the selection process, and the manager must take them into
account in making selection decisions.
Let me know your perception about the significance of conducting an in-depth selection
interview to learn more about the applicant as an individual. Write on the space provided.
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 Delegation
- Refers to the process of assigning responsibility and authority to lower-level
employees
- It is a skill that the manager can effectively perform through practice and the
motivation of his or her subordinates
- Positive motivation can be given with psychological, monetary, or tangible
benefits
o Elements of Delegation
1. Responsibility
 task or duty designated to a particular individual position
2. Accountability
 the condition of being held responsible for the task delegated (whether the task is
being performed properly or not
3. Authority
 power or the right to give orders
 it is the sum of power and rights entrusted to an individual (to ensure the performance
and accomplishment of tasks
 Types of Authority
a. Traditional
 the right to give orders, assign tasks and jobs, and expect and exact obedience from
subordinates
b. Behaviorist / Social Scientist

 the belief that authority and power is given to the superior by the subordinates
c. Functional
 assumes authority based on expertise and experience of a person, and by one’s
specialization
 Employment
o Employee Orientation
- This process is imperative for a new employee to be oriented to the company
or organization and the position, and trained so they can perform their tasks
properly. An orientation program may last for several days, weeks or even months
depending on the kind of job and pharmacy.
- Includes the discussion of performance objectives of the job, as well as the

Employee Handbook (a document that contains the goals, policies, and
procedures that are relevant to the employee and the job that he or she is
assuming), introduction to co-workers and tour of the facilities and equipment.
o Employee Training and Development

- Training is done to improve the performance of employees in their current tasks and jobs, while
Development is done to prepare employees for new responsibilities and positions, which is an
investment for future needs
- Two forms of training:
a. Orientation training (Umiker, 1998)
 welcoming new employees
 presenting a positive first impression
 providing information that will allow them to settle into their new responsibilities
 establish early expectations of performance and behavior

b. Job training
 helps employees keep up with the development of the organization
 learn new information
 develop new skills to perform better
 refresh capabilities that may have diminished over time
- This will improve the employee’s quantity and quality of work; and boost the employee’s morale
and sense of accomplishment (Holdford,2003).
- The kind of training program used depends on the kind of job and on whether the trainees/employees
are being prepared for management or non-management positions.
a. Management training includes on-the-job training (OJT), job rotation, creation of “assistant
to” positions and off-the-job training
b. Non-management training includes on-the-job training (OJT), apprenticeships and
internships
o Types of Employees
1. Regular employee - performs the necessary tasks in the
regular business or operations of the employer; receives
full benefits from the company
2. Probationary employee - one hired to fill up a regular

position who will undergo a trial period (NMT 6 months as
mandated by law). This is to allow the employer to assess
the employee's performance in the workplace whether
he or she is fit to remain as an efficient worker.
3. Contractual employee – one that is assigned to work for a short duration of time until completion of
project or assignment. If this type work service exceeds a year, the employee is entitled to be a
regular employee.
4. Casual employee – one whose service has been engaged intermittently (continuous or broken)
5. Project employee - period of employment is fixed to last the duration of a specific project or phase;
the employee is terminated or transferred after the project
6. Seasonal employee - an employee who is hired to perform a certain task or set of tasks, the duration
of which is predetermined on the employment during a particular season
7. Substitute employee - an employee who is hired temporarily for the purpose of substituting for a regular
employee who may be absent from his or her position for some valid reason (Example: extended sick
leave, study leave, military service). The employees' service can be terminated at any time and he or
she must vacate the position upon the return of the regular employee.
o Employee Compensation
 Wages, salary and benefits is a necessary part of any staffing process.

Establishing the salary should include a process of examining and
comparing what people are making and what the pharmacy can
afford to pay

 Labor Standard Laws
1. Minimum wage
- 1951: the first Minimum Wage Law was enacted (providing for minimum wage at 4php/day)
- 1989: creation of National Wages and Productivity Commission (NWPC). It aims to improve
the mechanism in setting the levels of minimum wage; conception of Regional Tripartate
Wages and Productivity Board (RTWPB)
2. Holiday pay
- each worker receives his or her salary for an 8-hour day even if he or she does not work on a
regular holiday; a benefit granted by law to all covered employees (as a gratuity)
- If the employee is compelled to work on a holiday, he or she is entitled to receive a total of
200% (regular holiday) or 130% (special holiday) of their wage
o Example of regular holidays (observed annually, typically on fixed dates)

 August 12 – Eid al-Adha (Feast of Sacrifice)
 August 21 – Ninoy Aquino Day
o Example of special holidays (have more flexible dates, by President’s declaration

or Congress’ enactment)
 President Benigno Aquino III declared January 2, December 24, and
December 31 as special non- working days (despite the fact these do not
commemorate any special event)
 They were made as such under the president's prerogative "in order to foster
closer family ties and enable our countrymen to observe New Year and
Christmas more meaningfully“
3. Premium pay
- an employee is entitled to acquire additional compensation (premium pay) when he or she
is required by the employer to work overtime or beyond the regular eight hours, on days when
he or she should be off, or regular holidays or special holidays
- Rates:
WORK PERFORMED ADDED PAY TOTAL PAY
work that is performed on rest
days or on special days
+30% of the daily rate of 100% 130%
work that is performed on a rest
day which is also a special day
+50% of the daily rate of 100% 150%
work that is performed on a
30% of the regular holiday rate of
regular holiday which is also the
employee's
200% based on his daily basic 230%
wage rate
rest day
4. Overtime pay
- refers to the required additional compensation given for work rendered beyond designated
hours (the normal number of hours in a regular working day is 8 hours within the same 24-hour
period)
- Reasons for overtime pay:
 to compensate the worker for his or her physical and mental efforts for hours worked
beyond the normal 8 hours
 to compensate the worker for having been deprived of time for relaxation,
amusement, opportunity to contribute to community or other business engagement
 a governmental measure to promote full employment because it forces employers to hire
more workers every 8-hour period

- Rates:
WORK PERFORMED ADDED PAY
forworkbeyondeighthoursperformed on ordinary working days + 25% of the hourly rate
forworkbeyondeighthoursperformed on scheduled rest day, a
special day and a regular holiday + 30% of the hourly rate
5. Night shift differential pay

- given to employees required to work between 10:00 PM and 6:00 AM the following day
- 10% of the hourly basic wage for each hour of work that is performed
- Reasons for night shift differential pay:

 lack of sunlight can cause anemia or TB and eyestrain
 danger when travelling to and from work at night
 disruption of normal home life
6. Service incentive leave (vacation)

- an employee who has provided at least one year of service is entitled to a paid service
incentive leave of five (5) days (mandatory)
7. Service charges
- not required by law, although collected by most restaurants, night clubs, lounges, hotels, etc.
- Labor code: divide the service charge indicated as a percentage of a bill
8. Separation pay
- granted to an employee who is involuntarily and permanently dismissed from his or her job
9. Retirement pay
- Employees may be retired upon reaching 60 years of age but must be retired by 65 years’ old
- Does not applyto:

 Government employees
 Employees of retail, service and agricultural establishments or operations that regularly
employ more than 10 employees
10. 13th month pay

- given to employees who have worked for at least 1 month during a calendar year
- should be given not later than the 24th of December
11. Maternity benefits

- granted to a pregnant employee, married or unmarried, with an accumulated service of at
least 6 months within the last 12 months
 60 days – normal delivery or miscarriage

 78 days – caesarean section delivery at the rate of 100% of the average daily salary credit
- Extended to illness certified to have been arisen out of pregnancy which renders a woman
unfit to work
12. Paternity leave

- exclusive to male employees who are married to and
cohabiting with his legitimate spouse at time of birth or
miscarriage
- available only for the first 4 deliveries/miscarriages
- lasts for 7 days (basic salary + allowance)

 Benefit Programs should be assessed in conjunction with the wage programs since they can be very
expensive if not implemented properly
o Common benefits:
 Vacations  Saving plans
 Holidays  Profit-sharing
 Group insurance  Stock options
 Bonuses  Special services
 Welfare Laws
1. Social Security System
- an agency established to provide meaningful protection to members
and their families against contingencies resulting from temporary loss
of income or financial burden
- to contribute to the socio-economic development of the country

through a viable social insurance system
- It is an insurance program mandated by the Philippine government to

cover all income earners or workers in the private sector, in contrast,
government workers are covered by the GSIS or Government Service
Insurance System.
** The current SSS contribution rate is 11% of the monthly salary credit not
exceeding ₱19,750 and this is shared by the employer (7.37%) and the
employee (3.63%).
** If your monthly salary is ₱30,000, your contribution will only be based on ₱16,000 (which is the
highest monthly salary credit). You shall then pay the amount of ₱581.30, while your employer will
pay ₱1,208.70, for a total contribution of ₱1,790.00 per month.
- Claims:
a daily cash allowance paid for the number of days a member is unable to work due
Sickness Benefit
to sickness or injury
Maternity Benefit a daily cash allowance granted to a female member who is unable to work due
to childbirth or miscarriage
Disability Benefit a cash benefit granted – either as a monthlypension or a lump-sum amount – to

a member who becomes permanently disabled, either partially or totally
Retirement Benefit a cash benefit granted – either as a monthly compensation or a lump-sum amount
– to a member who can no longer work due to old age
Death Benefit a cash benefit granted – either as a monthly compensation or lump-sum amount
– to the beneficiaries of a deceased member
Funeral Benefit a funeral grant of ₱20,000 to whoever paid for the burial expenses of the deceased
member
Salary Loan a cash loan granted to an employed, currently-paying self-employed or voluntary

member; it is intended to meet the member’s short-term credit needs

2. Employees Compensation Commission (ECC)
- provides help for employees suffering from permanent, partial or temporary disability due to
injury or illness
- Kinds of disability
a. Temporary total disability
- a disability which prevents an employee from performing his or her work for an
extended period of NMT 120 days, unless such disability requires medical
attendance beyond 120 days, but NMT 240 days
- if the disability is caused by an injury or sickness, the period of compensability will be
counted from the first day of the injury or sickness
b. Permanent partial disability

- a disability which causes the harmful and permanent loss of the use of any significant
part of an employee’s body
c. Permanent total disability (Any of the following)

 a disability that lasts for more than the period prescribed for Temporary Total Disability
and prevents an employee from pursuing his or her work usual and earning therefrom
 complete blindness of both eyes
 loss of two limbs at or above the ankles or wrists
 permanent and complete paralysis of two limbs
 brain injury that resulted in incurable imbecility or insanity
 specific cases (determined by the SSS and approved by the ECC)
3. PhilHealth
- ensures better benefits at an affordable cost; makes sure that Filipinos have an end-to-end
access to quality health insurance coverage that is not only affordable but also efficient
o RA 7875 (National Health Insurance Act of 1995): established the Philippine Health
Insurance Corporation (PhilHealth); replaced the old Medicare
4. Pag-IBIG
- fund dedicated to the creation and establishment of a national savings program
and an affordable shelter financing scheme for Filipinos
 Types of Loan:
a. Calamity loan
- for people who need financial aid after some
unforeseen type of calamity or disaster (flood, fire, etc)
b. Multi-purpose loan
- for people who want to borrow money for a variety of
reasons, whether it is for a personal purchase or raising a
small capital to fund their business idea
 Housing loan
 this is what Pag-IBIG is best known for
 the idea is to provide affordable financing to Filipinos through its loan program by
partnering with local Real Estate Developers
 Short-term loan
 Pag-IBIG also provides its members the ability to make short-term cash loans

 Savings Program
 SAVINGS: The employee’s monthly savings (including employer share, as applicable)
and total annual dividend earnings make up the member’s TAV or Total Accumulated
Savings
 Employer/Employee share is 50/50
** The minimum monthly amount a member can contribute is Php 200 while the maximum is
set to Php 2,950.
** Membership with the Fund is mandatory for all SSS or GSIS members except for employees/workers
receiving a monthly salary of the than Php 4,000.
1. Secure a copy of the organizational chart of the Food and Drug

Administration (FDA) and identify the different departments that
may be classified as line department or staff department. Write your
answers on the provided answer sheet at the end of this module. The names of
the officials can be disregarded. (40 points)
2. Below are questions evaluating what you have learned regarding the steps involved in staffing and the
employment policies which are important to the staffing process. Place your answer in the space provided. (15
points)
A. Identification: Provide what are being asked for by the given statements. (7 points)
1. Statement which provides the basis for selecting the right employees for each
position in an organization
2. Source of potential employees capable of reaching a wide range of possible
applicants
3. Recruitment source that allows any passerby to find a job opportunity
4. Training program employed if the management is training a person to assume a
top-level position
5. The screening step of staffing in which the solicited applications are screened
out and suitable candidates are appointed as per the requirements
6. Employment test conducted to determine an individual's inclination to succeed
in a given activity
7. Refers to the advancement of an employee's rank or position in a hierarchical
structure
B. True or False: Write TRUE if the statement is correct and FALSE if incorrect. (8 points)
_______________ 1. In the case of most chain and independent pharmacies, fewer prescriptions tend to be
dispensed during summer months which makes it easier to schedule vacations of employees.
_______________ 2. Competitive wages must be paid to attract and retain competent personnel.
_______________ 3. Recruitment activities start with a comprehensive and intensive understanding of the
qualifications to be possessed by applicants.
_______________ 4. A job description may inform the management of the kind of individuals to look out for.
_______________ 5. Personality test is unreliable since it may lead to discrimination from employees and false
answers from applicants.
_______________ 6. Training requires more intense education and instruction than development.
_______________ 7. In small companies, the top management generally performs the staffing function.
_______________ 8. All manpower requirements may not be met through internal recruitment.

3. Let us check if you have grasped the different labor standards, welfare laws and categories of employees. Answer
the following questions. Place your answer in the space provided. (15 points)
A. Identification: Identify the type of employee described by the given statements. (5 points)
_______________ 1. A doctor working at the clinic.
_______________ 2. After the completion of the building, the Architect was transferred to another site.
_______________ 3. The same architect that designed SM Mall of Asia was rehired for the renovation of SM City
Baguio.
_______________ 4. After the success of Project 4000, the HR manager was terminated.
_______________ 5. Promodizers during Panagbenga.
B. True or False: Write TRUE if the benefit was applied correctly in the situation and FALSE if not. (10 points)
_______________ 1. Liam is a security guard. He was entitled to receive 200% of his daily salary since he reported for duty
on SLU’s foundation day.
_______________ 2. Liam is a security guard. He was entitled to receive his daily salary even if he did not report for duty
on SLU’s foundation day.
_______________ 3. After 6 months of probationary period, Darylle was finally promoted to a regular position. She was
given a service incentive leave of 5 days.
_______________ 4. When Patrick resigned from his job, he was given a separation pay.
_______________ 5. All the service charges that were collected from restaurant X were deposited to the account
of the CEO.
_______________ 6. The COMELEC did not allow Eric to run for office, on the grounds that he is already 90 years old.
_______________ 7. Carlo received a 13th month pay even if he has been working for the company for 1.5 months
only.
_______________ 8. Clarence was allowed to have a paternity leave for 10 days after his wife had a miscarriage.
_______________ 9. Chelsea’s hourly rate is 80 pesos hence when she rendered 2 hours of overtime on a regular working
day, the total pay she received for that day was 840 pesos.
_______________ 10. Heart was granted 78 days of Maternity Leave after she had a miscarriage.

MODULE 4
Directing

Leading involves guiding and motivating other people to work toward a common goal. It is referred to as the
heart of the management process. It aims to build an effective work environment anchored on motivating, supervising,
and disciplining. It encompasses giving instructions (1%) and seeing to it that the job is done efficiently (99%). Simply,
directing is the process where managers instruct, guide, and oversee the performance of their employees to achieve
predetermined goals.

1. Understand the concept of leadership in any organization.
2. Differentiate the different contingency approaches to effective leadership.
3. Map a personal leadership development scheme to be used as pharmacist/ leader.
Everyone has the capacity for leadership; however, it isn’t likely that everyone will become a leader.
Exercise 5.1: Leadership Self- Assessment activity.

Go to the following website and take and score the self- assessment survey of leadership. The survey is
designed to provide you with feedback about your level of preference or comfort with leadership
characteristics and skills. http://www.nwlink.com/~donclark/leader/survlead.html

DIRECTING/ LEADING
 A process of arousing people’s enthusiasm and inspiring their efforts to work hard to
fulfill plans and accomplish goals/ objectives
 Building commitment to a common vision, encouraging activities that support goals,
and influencing others to do their best work on the organization’s behalf
 Establishing direction and influencing other people’s behavior through motivation,
communication, group dynamics, and discipline
A leader is a forceful and dynamic personality who really leads from the front; an architect and
implementer of strategy; a mediator in conflict situations; an integrator who assures the climate of the
organization; a person able to motivate subordinates and who, by persuasion, compulsion or example
to others; succeeds in getting others to follow his/ her wishes.
 Sorensen and Epps
A. NATURE OF LEADERSHIP
1.Leadership and Power

 Power is the ability to get a person to do something you want done or made happen; used
for the good of the group or organization as a whole; gained from:
a. Position
i. based on reward (incentives such as pay raises, bonuses, promotions, special
assignments and verbal or written compliments)
ii. based on coercion (such as verbal reprimands), punishment or withholding
positive outcomes (such as pay penalties or even termination)
iii. based on authority aka legitimate power (right of a leader by virtue of his position in the organization
or his status, to exercise control over subordinates
b. Personal qualities, ie integrity

i. based on expertise aka expert power (special skills, knowledge and
information) which is maintained by protecting one’s
credibility through good behaviour
ii. based on identification aka referent power (charisma, interpersonal
attractiveness) which is developed and maintained through good
relationships that encourage admiration and respect of others
2. Leadership and Vision

 Leaders use power that is associated with a vision or a future that one hopes to
create or achieve in order to improve the present, which are accomplished by
encouraging subordinates to pursue the same vision in their daily work
 Visionary leadership makes people want to put worth and value into their work
3. Leadership as Service
 the concept of “service” is central to integrity; leaders are “servants of the
organization”
 servant leader is “others- centered” and shift the focus to empowerment or
allowing others to to exercise power in the organization by providing them with
information, responsibility, authority and trust to make decisions and act independently

B. LEADERSHIP TRAITS and BEHAVIORS
Leadership success can be determined by certain personal traits

that followers consistently admire. Based on research, being a
manager does not automatically make one a leader and be
effective as well.
TRAITS: (based on innate personality)

1. Drive - high energy, displays initiative and are tenacious
2. Self- confidence - trust themselves and have confidence in own
abilities
3. Creativity - original in their thinking

4. Cognitive ability - intelligent in integrating and interpreting information
5. Job- relevant knowledge - know their industry and its technical foundations
6. Motivation - influence others to achieve shared goals
7. Flexibility - adapt to fit the needs of followers and the demands of the situation
8. Honesty and integrity - are trustworthy, predictable and dependable
In a study of more than 3,400 managers, it was found that “ followers admired leaders who were honest,
competent, forward- looking, inspiring and credible”.
 Gardner, J. (1988). The context and attributes of Leadership. New Management.Vol. 5. pp 18-22.
DIMENSIONS OF LEADERSHIP BEHAVIOR (requires skills that can be learned)

1. High Concern for task = plans and defines the work to be done, assigns task responsibilities, states clear work
standards, urges task completion, and monitors performance results
2. High Concern for people = acts with warmth and supportiveness toward followers, maintains good social
relations with them, respects their feelings, is sensitive to their needs and shows trust in them
CLASSIC LEADERSHIP STYLES

The leadership style varies with the kind of people the leader interacts and deals with. A perfect/standard leadership
style is one which assists a leader in getting the best out of the people who follow him.
A. Autocratic leadership style: NO OPINIONS FROM OTHERS

 leader has complete command and hold over their
employees/team
 team cannot put forward their views, cannot criticize or question
the leader’s way of getting things done because the leader himself
gets the things done
Advantage: it leads to speedy decision-making and greater productivity

(under leader’s supervision)
Disadvantage: leads to greater employee absenteeism and turnover; works only when the leader is the best in
performing or when the job is monotonous

B. The Laissez Faire Leadership Style
 leader totally trusts their employees/team,

allowing the employees to make the decisions;
however, the leader is still responsible for the
decisions that are made
 team/employees are welcomed to share views
and suggestions
Advantage: This style works only when the employees

are skilled, loyal, experienced and are intellectual.
C. Democrative/Participative leadership style:

 leaders invite and encourage the team members to play an important role in decision-making process but
the ultimate decision-making power rests with the leader
 leader guides the employees on what to perform and how to perform
Advantages: leads to satisfied, motivated and more skilled

employees; leads to an optimistic work environment;
encourages creativity
Disadvantage: Decision- making is time-consuming
D. Bureaucratic leadership: RULES BY THE BOOK
 Leaders strictly adhere to the organizational rules and policies and mandates that
all employees/team also strictly follows same rules and procedures
 Promotion is on the basis of employees’ ability to adhere to organizational rule
Advantage: suitable when safe work conditions and quality are required
Disadvantage: discourages creativity and does not make employees self-contented
E. Transformational leadership
This is a leadership style that creates valuable and

positive change (transformation) in followers who
are likely to be enthusiastic about their leader,
loyal and devoted to the leader’s ideas and
willingly work exceptionally hard to achieve the
leader’s vision.
The pathway to transformational leadership starts
with a willingness to bring real emotion to the
leader- follower relationship. The transformational
leader excels because of a strong sense of high
aspiration, confidence and contagious
enthusiasm they bring to a situation.
Four components:
1. Idealized influence
 Leader act in ways that make them role models, respected, admired and trusted because of their
extraordinary capabilities, persistence and determination
 Displays high morale and ethical standards (Do the right thing)

2. Inspirational motivation
 embody “team spirit”, enthusiasm and optimism
 create an atmosphere of commitment towards attaining shared goals and vision
3. Intellectual stimulation
 encourages creativity and fosters an atmosphere in which followers feel compelled to think about
old problems in a new way
 Public criticism is avoided
4. Individualized consideration
 leaders act as mentors and coaches
 Individual desires and needs are respected while differences are accepted
F. Charismatic Leadership Style

 Leaders attract people with their charm and charisma as they seem
to be self-motivated, passionate, and confident.
 Charisma is a personal quality characteristic that includes honesty,
credibility and competence
Advantage: used to build a powerful standing in the marketplace and gain

a huge fan-following using their strong self-image.
Disadvantage: considered less-favorable as the success or failure heavily
relies on the leader and its impact. It is perceived more of a one-man show
than a collective team effort.
G. Coaching style
 modern, effective leadership style that doesn’t lead directly but indirectly,
where the leaders are more like coaches or teachers who supervise team
members.
Advantage: It comes with a bouquet of additional benefits such as boosting

employee motivation, increasing their performance skills, grooming, and
motivating team members.
CONTINGENCY APPROACHES TO LEADERSHIP

There is no one set of behavior or style that works best all the time. Therefore, a number of contingency approaches can
explain the conditions for leadership success in different situations.
A. FIEDLER’S CONTINGENCY MODEL

Developed by Fred Fiedler who proposed that good leadership depends on a match or fit between a person’s
leadership style and situational demands. This requires mastery of the strengths and weaknesses of the specific style
that can fit into a specific scenario.
The model is measured on the least- preferred co-worker (LPC) scale which describes the tendencies of the leader
to behave either as:
1. task- motivated leader (low LPC score)
2. relationship- motivated leader (high LPC score)

Three contingency variables to measure the situational control:
1. quality of the leader- member relationship (good or poor) = measures the degree to which the group supports
the leader
2. task structure (high or low) = measures the extent to which tasks goals, procedures and guidelines are clearly
spelled out
3. position power (strong or weak) = measures the degree to which the position gives the leader the power to
rewards and punish subordinates
Looking at the figure, there are eight (8) leadership situations that result from different combinations of these contingency
variables, ranging from most favorable situations (good leader- member relations, high task structure and strong position
power) to least favorable situations (poor leader-member relations, low task structure and weak position power).
According to the model, the right leadership style (task- motivated or relationship- motivated) works best when used in
the right situation.
Thus:
Octant 1,2,3, and 8 which are situations described as very favorable (high- control) and very unfavorable (low-
control) situations will need a task- motivated leader.
Octant 4,5,6, and 7 which are moderate control situations need a relationship- motivated leader.
Example situation:
As a new manager of a drugstore branch belonging to a huge store franchise, you were selected over more
popular candidates who you now supervise (low leader- member relations).Your task is well defined (high task
structure) but your associates work under a seniority system and fixed wage schedule (weak position power).
Therefore, _________ is the leadership style that best fits this situation.
Answer: relationship- motivated leadership
B. HERSEY- BLANCHARD SITUATIONAL LEADERSHIP MODEL
This model suggests that successful leaders adjust their styles based on the task- readiness or task maturity of their
followers. Readiness refers to how able and willing or confident are the followers to perform required tasks. The leadership
styles are:
1. Delegating style = allowing the group to take responsibility for task decisions: low- task; low- relationship style
2. Participating style = emphasizing shared ideas and participative decisions on task directions; low- task; high
relationship style
3. Selling style = explaining task directions in a supportive and persuasive manner ; high - task; high- relationship
style
4. Telling style = giving specific instructions, directions and closely supervising work ; high- task, low-relationship style

Delegating style works best in high- readiness situations;
telling style works best in extreme low- readiness
followers.
Participating style is for low- to moderate readiness ;
selling style is for moderate- to high- readiness followers
Note: Followers change over time as they mature and

grow in ability, willingness and confidence. Because of
this, the leader becomes less directive and more
participative.
C. PATH- GOAL LEADERSHIP THEORY
According to Robert House, there are aspects of the work

setting where the characteristics of the people reduces the
need for active leader involvement. These employee
characteristics include:
 ability
 experience
 independence
In addition , task characteristics include:

 presence or absence of routine
 presence or absence of available feedback
mechanisms
Organizational characteristics include:
 clear plans
 presence of formal rules and procedures
In this case, leadership is provided from within the situation and there is no need for an “actual’ leader because
duplication of tasks can happen. The organization therefore can use all of the following styles and actually shift back
and forth among them:
1. Directive leadership = letting followers know what is expected as they were given directions about what to do
and how to do them, work schedules, performance standards, and clear leader’s role
2. Supportive leadership = increasing the confidence of the followers by emphasizing individual abilities and
offering needed assistance.
3. Achievement- oriented leadership = helps to set goals and raise performance aspirations
4. participative leadership = clarifies individual needs and identify appropriate rewards in situations where
performance incentives are poor
D. LEADER- MEMBER EXCHANGE THEORY aka LMX THEORY
This theory recognizes that not everyone is treated the same by the
leader. People fall into IN- GROUPS or OUT-GROUPS based on their
relationship with the leader. Because of this, special and trusted
exchange relationships differ between these 2 groups.
As a result, in-group followers get more positive performance

evaluations and report higher levels of job satisfaction. They are also
more loyal and less prone to turnover than are members of out-groups.

E. LEADER- PARTICIPATION MODEL
Developed by Vroom- Jago, this model links leadership success with the decision making process, whereas a good
leader makes decisions that best fits the situation. These decisions fall under any of these three (3) categories:
1. Authority decision = works best when leaders have the expertise needed to solve the problem and are
confident in acting alone; followers most likely accept and implement the decision without much discussion
2. Consultative decision = works best when the leader lacks the expertise and the information especially if the
problem is unclear; followers and other may be consulted to arrive to a decision; followers may be hesitant to
follow but are compelled to respect the decision
3. Group decision = works best when the leader lacks the expertise and the information especially if the problem
is unclear; leader and followers arrive to a decision that will be implemented
Note: #2 and 3 offer special benefits because it improves the quality of the decision making and decision acceptance.
https://slidetodoc.com/the-nature-of-leadership-leadership-the-process-of/
PERSONAL LEADERSHIP DEVELOPMENT
This is best viewed as an ONGOING GOAL that benefits from knowing the concepts and models, but requires
continuous learning from experience. As there is always room to grow, the pathway to leadership development is clear
and full of opportunities.
Other factors:
1. Emotional intelligence (EI) = this is high among transformational leaders, defined as an ability to understand
emotions in oneself and others, and use this understanding to handle social relationships effectively.
 Strong EI is :
 possessing self - awareness ( ability to understand own moods and emotions as well as their impact on
work and others
 having good self- management or self- regulation (ability to think before acting and control otherwise
disruptive impulses)
 highly motivated and persistent (willing to work hard for reasons other than money and status)
 socially aware or emphatic ( ability to understand the emotions of others and use this to better relate
to them
 being good at relationship management (ability to establish rapport with others and build social
capital through relationships and networks)

“The higher the rank of the personnel considered to be a star performer, the more emotional
intelligence capabilities showed up as the reason for his or her effectiveness.”
 Daniel Goleman
2. Moral leadership = leadership with high ethical standards of behavior. It begins with personal integrity which
earns the trust of followers who in return, try to behave in ways that live up to the leader’s expectations.
 Not the same as moral overconfidence which is an overly positive view of one’s own strengths of character
who may act unethically without recognizing it.
“I am a good person , so I can’t be wrong”
“ The world isn’t neatly divided into good people and bad people. Most will behave well or poorly
depending on the context.”
 Authentic leadership is having a level of self- awareness and a clear understanding of own values, thus is
considered genuine and gains respect from followers. These values create a positive ethical climate in the
organization.
Exercise 5.2. Essay

For the three (3) scenarios presented here, decide which decision style is best for the unique situation:
Choices: Authority = make decisions alone without additional inputs from others
Consultative = make decisions based on group inputs
Group = allow the group to which you belong, make the decision
Explain your choice for each scenario in not more than three (3) sentences. (15 points)
Scenario 1: You have developed a new work procedure that will increase productivity. Your CEO likes the idea but
wants you to try it within a few weeks. You view your employees as fairly capable and believe that they will be
receptive to the change.
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Scenario 2: Your department has been facing a problem for several months. Measures were taken but were
unsuccessful. You came up with one solution but was unsure about possible consequences , especially if the staff
would be accepting of the resulting changes.
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Scenario 3: There are rapid advances in technology in your industry and the staff have been using traditional
methods but the top management hired a consultant who recommended some upgrades. As the group leader, you
were given 2 weeks to prepare the staff. Your employees are capable and they enjoy participating in the decision-
making process.
___________________________________________________________________________________________________________________
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ESSAY RUBRIC
Criteria Excellent Good Satisfactory Needs Improvement
(5 points) (4 points) ( 3 points) (1 point)
Content and Content is comprehensive, Content is accurate and Content is not Content is incomplete;
accurate, and persuasive; persuasive; major points comprehensive and/or major points are not clear
Development
major points are stated clearly are stated persuasive; major points are
and are well supported addressed, but not well
supported
(20 points) (15 points) (10 points) (5 point)
Organization Well organized, coherently Organization is mostly Inadequate organization or Organization and structure
developed, and easy to follow clear and easy to follow development. Structure of detract from the answer
and Structure
the answer is not easy to
follow
(10 points) (8 points) (6 points) (4 point)
Grammar, Displays no errors in spelling, Displays one to three Displays three to five errors in Displays over five errors in
punctuation, grammar, and errors in spelling, spelling, punctuation, spelling, punctuation,
Punctuation and
sentence structure punctuation, grammar, grammar, and sentence grammar, and sentence
Spelling and sentence structure structure structure

MODULE 5
Controlling

Controlling is a primary goal-oriented function of management in an organization. It is a
process of comparing the actual performance with the set standards of the company to
ensure that activities are performed according to the plans and if not then taking corrective
action.

1. understand the necessity of control in relation to planning.
2. Trace the process of control as an integral part of management.
3. Differentiate the corrective and preventive actions related to employee
performance.
Controlling is an extension of the planning process that ensures conformity

to a planned agenda. Controlling the actions of individuals compels them
to understand their roles and responsibilities in achieving the organizational
goals so they can direct their efforts into prioritizing them. This will require the
workforce to be stable and disciplined. Also in the process, scrutiny of
resources is important to optimize their use and therefore, a system in place
is crucial.
Controlling
 According to Brech, “Controlling is a systematic exercise which is called as a
process of checking actual performance against the standards or plans with a
view to ensure adequate progress and also recording such experience is gained
as a contribution to possible future needs.”
 According to Theo Haimann: “Controlling is the process of checking whether or

not proper progress is being made towards the objectives and goals and acting
if necessary, to correct any deviation”.
 According to Koontz & O’Donell: “Controlling is the measurement & correction

of performance activities of subordinates in order to make sure that the enterprise
objectives and plans desired to obtain them as being accomplished”.
Relationship between planning and controlling

 Planning and controlling are two separate functions of management, yet they are closely related.
 The scope of activities of both are overlapping to each other.
 Without the basis of planning, controlling activities becomes baseless and without controlling, planning
becomes a meaningless exercise.
 In absence of controlling, no purpose can be served by.
 Therefore, planning and controlling reinforce each other.
 According to Billy Goetz, " Relationship between the two can be summarized in the following points:
o Planning precedes controlling and controlling succeeds planning.
o Planning and controlling are inseparable functions of management.
o Activities are put on rails by planning and they are kept at the right place through controlling.
o The process of planning and controlling works on Systems Approach which is as follows :
Planning → Results → Corrective Action

Six Major Purposes of Control
1. Controls make plans effective
2. Controls make sure that organizational activities are consistent
3. Controls make organizations effective
4. Controls make organizations efficient
5. Controls provide feedback on project status
6. Controls aid in decision-making
Characteristics of controlling
1. Controlling is an end function- a function which comes once the performances are
made in conformities with plans
2. Controlling is a pervasive (prevalent/persistent) function- which means it is
performed by managers at all levels and in all type of concerns
3. Controlling is forward looking- because effective control is not possible without the past being controlled.
Controlling always look to future so that follow-up can be made whenever required
4. Controlling is a dynamic process- since controlling requires taking review methods, changes have to be made
wherever possible
5. Controlling is related with planning- planning and controlling are two inseparable functions of management;
without planning, controlling is a meaningless exercise and without controlling, planning is useless; planning
presupposes controlling and controlling succeeds planning
Process of Controlling
 STEPS:
1. Establishment of standards
 Standards are the plans or the targets which have to be achieved in the course of business
function.
 They can also be called as the criterions for judging the performance.
 Standards generally are classified into two:
A. Measurable or tangible - those standards which can be measured and expressed are called measurable
standards; they can be in the form of cost, output, expenditure, time, profit, etc.
B. Non-measurable or intangible- there are standards which cannot be measured monetarily
Examples: performance of a manager, deviation of workers, their attitudes towards a concern
(intangible standards)
 Controlling becomes easy through establishment of these standards because controlling is
exercised on the basis of these standards.
2. Measurement of performance
 Finding out deviations becomes easy through measuring the actual performance.
 Performance levels are sometimes easy to measure and sometimes difficult.
 Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc.
 Quantitative measurement becomes difficult when the performance of a manager has to be measured.
 Performance of a manager cannot be measured in quantities.
 It can be measured only by:
 Attitude of the workers
 Their morale to work
 The development in the attitudes regarding the physical environment
 Their communication with the superiors
 It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.
3. Comparison of actual and standard performance

 Deviation: the gap between actual performance and the planned targets.

 The manager has to find out two things
a. Extent of deviation
 The manager has to find out whether the deviation is positive or negative or whether
the actual performance is in conformity with the planned performance
 The managers have to exercise control by exception (allowance)
 He has to find out those deviations which are critical and important for business
 Minor deviations have to be ignored
 Major deviations like replacement of machinery, appointment of workers, quality of
raw material, rate of profits, etc. (should be looked upon consciously)
 NOTE: “If a manager controls everything, he ends up controlling nothing.”
b. Cause of deviation: a manager has to think about various cause which has led to deviation
 Erroneous (incorrect) planning
 Coordination loosens (relaxes)
 Implementation of plans is defective
 Supervision and communication is ineffective
4. Taking remedial actions

 Two alternatives:
 Taking corrective measures for deviations which have occurred
 If not conforming with plans, the manager can revise the targets (it is here the controlling process comes
to an end) but a Follow up is an important step
D. Types of Control
It is also valuable to understand that, within the strategic
and operational levels of control, there are several types of
control. The first two types can be mapped across two dimensions:
level of proactivity and outcome versus behavioral.
1. Feedforward control
 Proactivity: the monitoring of problems in a way that
provides their timely prevention (rather than after the fact
reaction)
 It addresses what can we do ahead of time to help our plan succeed
 Purpose: to see the problems coming in time to do something about them
 Example: preventive maintenance on machinery and equipment and due diligence on investments
2. Concurrent Control
 The process of monitoring and adjusting ongoing activities and processes
 Such controls are not necessarily proactive, but they can prevent problems from becoming worse
 For this reason, we often describe concurrent control as real-time control (because it deals with the present)
 Example: adjusting the water temperature of the water while taking a shower
3. Feedback controls
Involve:
 Gathering information about a completed activity
 Evaluating the information
 Taking steps to improve the similar activities in the future

E. Organizational Control Systems or Techniques
These control techniques provide managers with the type and amount of information they need to measure and monitor
performance:
1. Budget Control
 Budget: depicts how much an organization expects to spend (expenses) and earn (revenues) over a time period
 Budgets not only help managers plan their finances, but also help them keep track of their overall spending
 Budget is both a planning tool and a control mechanism (budget development processes vary among
organizations according to who does the budgeting and how the financial resources are allocated)
2. Marketing control
 Help monitor progress toward goals for customer satisfaction with products and services, prices, and delivery
 The following are examples of controls used to evaluate an organization's marketing functions:
o Market research: gathers data to assess customer needs
o Information collected is critical to an organization's success
o Ongoing market research reflects how well an organization is meeting customers' expectations and
helps anticipate customer needs
o It also helps identify competitors
o Test marketing: small‐scale product marketing to assess customer acceptance

o Using surveys and focus groups, test marketing goes beyond identifying general requirements and looks
at what (or who) actually influences buying decisions
o Marketing statistics: measure performance by compiling data and analyzing results

o In most cases, competency with a computer spreadsheet program is all a manager needs
o Managers look at:
 Marketing ratios: measure profitability, activity, and market shares
 Sales quotas: measure progress toward sales goals and assist with inventory controls
3. Human Resource Control

 Human resource controls help managers regulate the quality of newly hired personnel, as well as monitor current
employees' developments and daily performances
 The manager makes sure that goals are clearly set and understood
 Managers can also institute policies and procedures to help guide workers' actions
 Managers can consider past experiences when developing future strategies, objectives, policies, and
procedures
Common HR control types include:

a. Performance Appraisal
o A developmental phase for personnel whereby his
performance and inherent capabilities are evaluated
relative to his ability and capacity to deliver the work
assigned
o An appraisal (evaluation) form is used in the process
o Four approaches of Appraising Current Performance:

a. Appraisal by the superior himself
b. Group appraisal
c. Self-appraisal
d. Approval of potential for advancement

Note: Discussing appraisal findings with the person concerned in order to help and guide him develop or improve
is also known as Performance Counseling. It is described as::
 Pre-interview approach (be objective; add sense of humor; be humane)
 Have an outline (systematic/organized; save time and energy)
 Venue and time (be punctual: a sign of respect)
 Tone and atmosphere (be accommodating, create a conducive env’t)
 Purpose (task: have a meaningful interaction)
 Ask the personnel about his own self-appraisal (remove bias)
 Areas of improvement (emphasize)
 Personal improvement plan (strengthen his weaknesses, maximize his potentials)
 Proper encouragement (have a stimulating ending; make him happy)
Factors that can be evaluated in an appraisal:

a. Units of Output
 Done in an hourly, daily, weekly or monthly basis
 Measured through sales per week or prescriptions dispensed per day
b. Quality of Work
 Seen via frequency of prescription errors, incorrect transactions, complaints, and other clerical mistakes
that can compromise the operations of the pharmacy
c. Dependability
 Unquantifiable factor that is difficult to measure
 A factor that is dependent on quality of work, punctuality, degree to which an employee can be relied
on to do tasks
d. Job Knowledge
 Adequate knowledge on job descriptions, pharmacy, and parent company policies
 Assessed through quarterly or yearly objective testing or informal interviews
e. Ability and willingness to work with others

 Unquantifiable factor that can only be assessed through observing employee dynamics and monitoring
conflicts
f. Initiative and ability to handle ambiguity

 Refers to the degree to which employees can work on their own
 Determined through observation, monitoring, and psychological testing
Appraisal process

Approaches to performance appraisal
1. Traditional Appraisal
Manager discusses with the employee the latter’s performance during the previous
performance period. It is done based on observation and evaluation.
2. Upward Feedback
Delivering feedback from subordinates to superiors by increasing management effectiveness. This appraisal is a
two-way communication.
3. 360° / Multi-rater Feedback

Employees assess the manager and vice versa and feedback for employees comes from self-assessment and
external sources like supervisors and customers. The feedback for managers likewise comes from employees.
Results for both of these feedbacks are used to plan training and development. This appraisal is deemed as the
most accurate ratings done within 1-5 years.
4. Self-appraisal Approach
Evaluation of own performance 1-2 weeks before performance review that gives a chance to
compare their impression of their performance with that of the employer.
5. Trait Approach
Based on observable dimensions of personality: Examples: Integrity, honesty, punctuality, and dependability
6. Results Approach
Appraisal on work achievements judged against goals set mutually by the supervisor and the subordinate
Methods in conducting appraisals

1. Essay Appraisal
Evaluator provides a brief essay detailing assessment of strengths, weaknesses and potentials
2. Ranking Method
Employees are ranked and compared to one another in terms of their work performance
3. Critical Incident Appraisal

Superior describes incidents, giving details on both positive and negative behaviors of the employee
4. Management by Objectives (MBO)

Employees set their own realistic performance goals
5. Graphic Rating Scale

Measure employee’s quality of work (satisfactory,
average, above average, outstanding)
Personnel Compensation and benefits

 Recognize the value of their performance contributions,
motivate people to exert maximum effort in their work
Example: Bonus or incentives

Employee discipline
 The Hot Stove Rule states that: “to be effective, discipline should be immediate, focused on activity not
personality, consistent, informative, occur in a supportive setting and support realistic rules”
Note: As a manager, one must consider the following in grading employees:

1. Disregard your general impression and concentrate on a single factor at a time
2. Read all four specifications for each factor before determining which one closely fits the employee
3. Make your judgement on instances that frequently occur in his or her daily routine. Do not be swayed by
isolated incidents that are not typical of his or her work
4. Do not let personal feelings govern your rating. Accomplish it carefully so that it represents your fair and
objective opinion
Other areas of control:

1. Computers and Information Control
 Almost all organizations have confidential and sensitive information that they do not want to become
general knowledge
 Controlling access to computer databases is the key to this area
 Computers are being used to collect and store information for control purposes
 Managers must carefully weigh the benefits against the costs—both human and financial—before investing
in and implementing computerized control techniques
 Limitations of the use of information technology:
o Performance limitations
 Although management information systems have the potential to increase overall performance,
replacing long‐time organizational employees with information systems technology may result in
the loss of expert knowledge that these individuals hold
 Computerized information systems are expensive and difficult to develop
 Company may cut corners or install the system carelessly to the detriment of the system's
performance and utility
o Behavioral limitations
 Information technology allows managers to access more information than ever before
 But too much information can
 Overwhelm employees
 Cause stress
 Slow decision making
 Managing the quality and amount of information available to avoid information overload
is important
o Health risks
o Potentially serious health‐related issues associated with the use of computers and other information
technology have been raised in recent years
o Example is carpal tunnel syndrome: a painful disorder in the hands and wrists caused by repetitive
movements (such as those made on a keyboard)
2. Progressive Discipline
 Series of acts taken by the management to address unacceptable actions
committed by employees. It becomes progressively severe until the employee
improves, resigns or is terminated.
 Goals: Encourage and foster optimal behavior and Improve employee behavior
* Disciplinary actions should be prompt, commensurate with the violation, and
clearly explained.

 Steps:
1. Verbal Warning
 Formal oral reprimand
 Often the only action needed
 Counseling
2. Formal Written Warning

 First formal step
 For more serious errors
 Legal document
3. Final Written warning

 Last disciplinary action prior to dismissal
4. Suspension without pay

 Temporary release of an employee from duty for a specified number of days
 For repetitions of unsatisfactory behavior
5. Termination or Dismissal
 Heads of the unit are authorized to initiate the dismissal and to set the effective date
 Employee must be notified 2 weeks’ prior
***Improving Employee Relations

Successful handling of employee dissatisfaction revolves around the following
 Recognizing problems quickly
 Allowing grievances to vent themselves
 Equitably resolving the problems
***Ways on how to improve employee relations

1. Quick Recognition
 The longer it lingers before being dealt with, the more it strains the long-term employee-employee relationship
 Complaints can be filed anonymously
2. Airing complaints
 Outlet of discontent
 When employees have no established means of airing complaints, they often resort to
counterproductive measures
3. Equitable Resolution
 Grievances should be resolved equitably.
4. Transfer
 Shifting of position from one to another without increasing or decreasing
his or her responsibilities or pay.
5. Promotion
 Increases both the status and responsibilities of the personnel.

6. Separation
 Lay-off
- Temporary and voluntary
- Negative business condition
- The least senior workers
 Discharge
- Permanent or involuntarily
- Can be caused by underperformance or insubordination
 Resignation
- Permanent/ voluntarily
- because of low salary or low morale
 Retirement
- Voluntarily: Years of service
- Involuntarily: retirement age (65)
* Exit interview: the management’s sincere attempt to find out the reason for their departure;
information can be used to improve conditions
Exercise 6.1. A. In order to compare employees’

performances, a manager must be able to set a standard
performance that will be used to reflect one’s actual
performance. Set ONE standard that you think is very relative
to the following activities performed in the pharmacy:
Pharmacy Activity Standard Performance

(Planned targets to be done by the employee)
Sample Activity: Sample Standard:
Pharmaceutical waste disposal All products that are considered “waste” (i.e. broken packaging or expired
item) must be disposed properly in the sink or chemical bin before throwing the
packaging to general waste.
1. Training of personnel
2. Endorsement of absence
3. Knowledge on drugs
4. Purchasing products in
response to COVID-19
(Disposable mask and
alcohol)
5. Receiving a prescription
that is unreadable

B. From the same pharmacy activities, enlist one equivalent METHOD of conducting appraisal and one corrective
action when employees are unable to perform the standards you have enumerated above.
*See page 58 for your reference
Pharmacy Activity Appraisal

(Employee gets when deviation arises)
Sample Activity: Sample Appraisal:
Pharmaceutical waste disposal Method: Critical Incident Appraisal
Corrective action: Stern warning with letter of explanation
6. Training of personnel Ranking method
7. Endorsement of absence Critical Incident Appraisal
8. Knowledge on drugs Graphic Rating Scale
9. Purchasing products in response to COVID-19 Graphic Rating Scale

(Disposable mask and alcohol)
10. Receiving a prescription that is unreadable Graphic Rating Scale
Exercise 6.2. Essay

I. Explain how you are going to control the following personnel in your pharmacy. Utilize the spaces found in the
answer sheets. (3pts each)
1. Rude when speaking to co- employees and even to clients
2. Regularly tardy employee
3. Cannot get along with another employee
4. Often loses focus while working; absent- minded
5. Fails to take initiative even with mundane tasks
II. Using a diagram, create a general Management Control System that you can utilize in the pharmacy.
Rubric
Criteria Excellent (10 pts) Average (6pts) Poor (4pts)
Components Each section of diagram is relevant to Most sections are Little or no connection of the
the topic relevant to the topic system to the topic
Flow The system is clearly directing in an Some parts are quite The system lacks a good
interconnected aspect confusing management flow
Presentation The system is presented with an The system is presented in System can still be improved
excellent imagery a well manner
END OF MIDTERMS

MODULE 6
Introduction to
Pharmacy Accounting

Pharmacy as a business aims to care for patients and make enough
profit to stay in the business. The pharmacist is a manager in the commerce
industry. A pharmacist-manager must have a full understanding of how to
sustain smooth business operations, especially in maintaining the business'
economic health and improving its financial performance. The essence of a
pharmacy manager’s job is making decisions, many of which have financial
implications.

1. Identify the Identify the importance of financial analysis and management to pharmacy practice
2. Discuss the terms used in basic financial analysis and management
3. Apply the basic financial and productivity reports used in the pharmacy practice.
In any pharmacy setting, the purchase and sale of materials, products,

and services is somewhat involved. Accounting is contemporary to keep
the trade and industry running. According to the American Institute of
Certified Public Accounts (2015), “Accounting is the language of business
because it deals with interpreting and communicating information about
a company’s operations and finances. It allows executives to make
informed business decisions—decisions that help those companies
become more successful”.
From the pool of characteristics below, which other two traits of a ten-star
pharmacist can be associated with a pharmacist being a “manager”?
Write your answers on the space provided then briefly justify your choices.
Pharmaceutical Care Giver Leader Life-Long Researcher

Teacher Learner
Decision Maker Entrepreneur Communicator
Agent of Positive Change
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
I. Elements of Accounting
The basis of financial accounting in any business, are the five

fundamental elements of accounting principles:
A. Assets refer to resources owned and controlled by the entity as a result of past
transactions and events, from which future economic benefits are expected to
flow to the entity. In simple terms, assets are properties or rights owned by the
business.

 Classification of Assets:
1. Current assets
Assets are considered current if they are held for the purpose of being traded, expected to be realized
or consumed within twelve months after the end of the period or its normal operating cycle (whichever
is longer), or if it is cash.
Examples of current asset accounts are:

a. Cash and Cash Equivalents – bills, coins, funds for current purposes, checks, cash in bank, etc.
b. Receivables – Accounts Receivable (receivable from customers), Notes Receivable (receivables
supported by promissory notes), Rent Receivable, Interest Receivable, Due from Employees (or
Advances to Employees), and other claims
c. Allowance for Doubtful Accounts – This is a valuation account which shows the estimated
uncollectible amount of accounts receivable. It is a contra-asset account and is presented as a
deduction to the related asset – accounts receivable.
d. Inventories – assets held for sale in the ordinary course of business
e. Prepaid expenses – expenses paid in advance, such as, Prepaid Rent, Prepaid Insurance, Prepaid
Advertising, and Office Supplies
2. Non-current assets
These are assets that do not meet the criteria to be classified as current. Hence, they are long-term in
nature – useful for a period longer that 12 months or the company's normal operating cycle.
Examples of non-current asset accounts include:

a. Long-term investments – investments for long-term purposes such as investment in stocks, bonds,
and properties; and funds set up for long-term purposes
b. Land – land area owned for business operations (not for sale)
c. Building – such as office building, factory, warehouse, or store
d. Equipment – Machinery, Furniture and Fixtures (shelves, tables, chairs, etc.), Office Equipment,
Computer Equipment, Delivery Equipment, and others
e. Accumulated Depreciation – This is a valuation account which represents the decrease in value of
a fixed asset due to continued use, wear & tear, passage of time, and obsolescence. It is a contra-
asset account and is presented as a deduction to the related fixed asset.
f. Intangibles – long-term assets with no physical substance, such as goodwill, patent, copyright,
trademark, etc.
g. Other long-term assets
B. Liabilities are economic obligations or payables of the business.

Liabilities represent claims by other parties aside from the owners
against the assets of a company.
 Major sources of liabilities:

1. Borrowings from lenders or creditors (Liabilities)
2. Contributions by the owners (Capital)

 Classification of Liabilities:
1. Current liabilities
A liability is considered current if it is due within 12 months after the end of the balance sheet date. In
other words, they are expected to be paid in the next year. If the company's normal operating cycle is
longer than 12 months, a liability is considered current if it is due within the operating cycle.
Current liabilities include:

a. Trade and other payables – such as Accounts Payable, Notes Payable, Interest Payable, Rent
Payable, Accrued Expenses, etc.
b. Current provisions – estimated short-term liabilities that are probable and can be measured reliably
c. Short-term borrowings – financing arrangements, credit arrangements or loans that are short-term
in nature
d. Current-portion of a long-term liability – the portion of a long-term borrowing that is currently due.
Example: For long-term loans that are to be paid in annual installments, the portion to be paid next
year is considered current liability; the rest, non-current.
e. Current tax liabilities – taxes for the period and are currently payable
2. Non-current liabilities
Liabilities are considered non-current if they are not currently payable, i.e. they are not due within the
next 12 months after the end of the accounting period or the company's normal operating cycle,
whichever is shorter. In other words, non-current liabilities are those that do not meet the criteria to be
considered current. Hah! Make sense?
Non-current liabilities include:

a. Long-term notes, bonds, and mortgage payables;
b. Deferred tax liabilities; and
c. Other long-term obligations
C. Capital (also known as net assets or equity)

 Capital refers to what is left to the owners after all liabilities are
settled. Simply stated, capital is equal to total assets minus total
liabilities.
 Capital is affected by the following:

1. Initial and additional contributions of owner/s (investments),
2. Withdrawals made by owner/s (dividends for corporations),
3. Income, and
4. Expenses.
 Owner contributions and income increase capital. Withdrawals and expenses decrease it. The terms used
to refer to a company's capital portion varies according to the form of ownership.
 In a sole proprietorship business, the capital is called Owner's Equity or Owner's Capital; in partnerships, it is
called Partners' Equity or Partners' Capital; and in corporations, Stockholders' Equity.
 In addition to the three elements mentioned above, there are two items that are also considered as key
elements in accounting. They are income and expense. Nonetheless, these items are ultimately included as
part of capital.

D. Income refers to an increase in economic benefit during the accounting period in the form of an increase in
asset or a decrease in liability that results in increase in equity, other than contribution from owners.
 Income encompasses revenues and gains.
1. Revenues refer to the amounts earned from the company’s ordinary course of business such as
professional fees or service revenue for service companies and sales for merchandising and
manufacturing concerns.
2. Gains come from other activities, such as gain on sale of equipment, gain on sale of short-term
investments, and other gains. Income is measured every period and is ultimately included in the capital
account.
 Examples of income accounts are: Service Revenue, Professional Fees, Rent Income, Commission Income,
Interest Income, Royalty Income, and Sales.
E. Expenses are decreases in economic benefit during the accounting period in the form of a decrease in asset
or an increase in liability that result in decrease in equity, other than distribution to owners.
 Expenses include ordinary expenses such as Cost of Sales, Advertising Expense, Rent Expense, Salaries
Expense, Income Tax, Repairs Expense, etc.; and losses such as Loss from Fire, Typhoon Loss, and Loss from
Theft.
 Like income, expenses are also measured every period and then closed as part of capital. Net income refers
to all income minus all expenses.
II. Double- Entry Bookkeeping
 The double entry accounting system emerged as a result of the industrial revolution.
Merchants in the olden times recorded transactions in simple lists, similar to what we
call today as single entry method.
 Through the ages, businesses expanded and finance became more and more
complex, hence, the development of more effective ways to track business
transactions. The first accounts of the double entry bookkeeping system was
documented in 1494 by Luca Pacioli, a Franciscan monk and hailed as the Father of
Modern Accounting.
 Value Received and Value Given

Under the double entry bookkeeping system, business transactions are recorded with the premise that each
transaction has a two-fold effect – a value received and a value given. To better understand the double
entry method, let us first take a look at the single entry system.
 Single Entry Bookkeeping

The single entry bookkeeping system does not explicitly record the two-fold effect of transactions. Under this
method, separate books are maintained for the company's basic accounts such as cash, receivables, and
payables.
For example, consider the following transactions:

 On October 1, 2020, Mr. Briggs invested $30,000.00 to start a legal advisory business.
 On October 5, the company purchased a computer for the office, $1,000.00
 On October 8, the company rendered services and received $500.00

o The company uses a cashbook to record its cash receipts and disbursements. After recording the
above transactions, the cashbook will look this:
Date Particulars Amount Balance

Oct 1, 2020 Beginning balance - $ 0.00
Oct 1, 2020 Investment of owner $ 30,000.00 30,000.00
Oct 5, 2020 Purchase of computer (1,000.00) 29,000.00
Oct 8, 2020 Cash from computer 500.00 29,500.00
o We can readily determine the cash balance using this recording method. However, it will be difficult
to determine the balances of other accounts such as revenues and expenses unless the company
maintains separate books for them as well. An important note to consider here is that a valid set of
financial statements can still be prepared even if the accounting system is incomplete. But, it will
require additional work to reconstruct the accounts to obtain complete information.
 Double Entry Bookkeeping

Under the double entry method, every transaction is recorded in at least two accounts. Since all accounts
affected are journalized, the records would be "complete", making it is easier to determine account
balances (more on this later).
o Accounts have a debit and a credit side. Debit means left

and credit means right. Because of the two-fold or duality
effect of transactions, the total effect on the left will always
be equal to total the effect on the right. Hence, the famous
line "debit equals credit".
o Now, here are the rules: To increase an asset, you debit it;
to decrease an asset, you credit it. The opposite applies to
liabilities and capital. To increase a liability or a capital
account, you credit it; to decrease a liability or capital
account, you debit it. Expenses are debited when incurred
and income is credited when earned.
o Here's a table to summarize that:
Accounting Element To increase To decrease
Credit
1. Asset Debit
Debit
2. Liability Credit
Debit
3. Capital investment Credit
Credit
4. Capital withdrawal Debit
Debit
5. Income Credit
Credit
6. Expense Debit
o Tip: If you are having a hard time remembering the table above, you actually only need to familiarize
yourself with the "To Increase" part. The action to decrease the accounts is simply the opposite.

o Transactions are recorded using journal entries in the journal. A journal entry is a record showing the
date of the transaction, the account/s debited, the account/s credited, their respective amounts, and
an explanation to describe the transaction. Using the transactions presented earlier, the journal would
look like this:
Date Credit
Particulars Debit
2020
1 Cash $ 30,000.00
Oct
Mr. Briggs, Capital $ 30,000.00
To record initial investment.
5 Computer Equipment 1,000.00
Cash 1,000.00
To record purchase of computer.
8 Cash 500.00
Service revenue 500.00
To record services rendered for cash.
o As mentioned earlier, every transaction has a two-fold effect. Thus, each transaction is recorded in at
least two accounts. Notice the two-fold effects in the above examples. You will learn how to prepare
journal entries in another lesson. For a head start, let us take a look at how we came up with the journal
entry for the first transaction. In that transaction, Mr. Briggs invested $30,000 to start a marketing
consultation business on October 1, 2020.
1. Place the date of the transaction on the left-most side of the journal.
2. Determine the account to be debited and the amount. In this case, there is an increase in cash
because of the contribution. To increase cash, an asset account, we debit it. So, we would then
record Cash and place the amount, 30,000.00 on the debit column.
3. Next, we determine the account credited. We are recording the owner's initial contribution. It
increases the company's capital; therefore, we would credit the capital account – Mr. Briggs,
Capital, and place the amount in the credit column. Credits are recorded below the debits.
Also, notice the indentions used.
4. Finally, provide a brief explanation at the end of the entry.
o See if you can figure out the logic behind the other two journal entries. After recording the transactions,
we now have a running record of all accounts, and hence a complete accounting system.
o In addition to the journals, some companies maintain separate books for some of their important
accounts for better control. The preparation of journal entries through the double entry bookkeeping
method, along with the other steps in the accounting cycle, results in a more systematic accounting
system. You will learn more about journal entries in detail, including how to prepare them, and the rest
of the steps of the process in later lessons.

III. Basic Books for Record-keeping
 There are two main books of accounts, Journal and Ledger. Journal used to record the economic transaction
chronologically. Ledger used to classify economic activities according to nature.
 Types of Journals
Special Journals are used in large business organizations, where it is found inconvenient to journalize every
transaction in one journal. Therefore, the journal is sub-divided into different journals known as the subsidiary
books. The journal is divided in such a way that a separate book is used for each class of transactions The
important books of accounts used in modern business world are the following:
1. Purchase Journal
Journal Purchases book or purchases day book is a book of original entry maintained to record credit
purchases. You must note that cash purchases will not be entered in purchases day book because
entries in respect of cash purchases must have been entered in the Cash Book. At the end of each
month, the purchases book is totaled. The total shows the total amount of goods purchased on credit.
Purchases book is written up daily from the invoices received. The invoices are consecutively numbered.
The invoice of each number is noted in the purchases book.
Format:
2. Sales Journal
A sales book is also known as sales day book in which are recorded the details of credit sales made by
a businessman. Total of sales book shows the total credit sales of goods during the period concerned.
Usually the sales book is totaled every month. The sales day book is written up daily from the copies of
invoices sent out.
Format:

3. Sales Return Journal
Sales returns journal is also called returns inwards book. It is
used for recording goods returned to us by our customers.
Customers who return goods should be sent a credit note. It is
a statement sent by a business to customer showing the
amount credited to the account.
Format:
4. Purchases Return Journal

Purchases Return Journal is a book in which the goods returned
to suppliers are recorded. It is also called returns outward book
or purchases returns day book. Goods may be returned
because they are of the wrong kind or not up to sample or
because they are damaged etc.
When the goods are returned to the suppliers, intimation is sent to them through what is known as a
debit note. These debit notes serve as vouchers for these entries. A debit note is a statement sent by a
businessman to vendor, showing the amount debited to the account.
Format:
5. General Journal Purchases

General Journal General Journal is the book of original entry (simple journal) in which miscellaneous
credit transactions which do not fit in any other books. It is also called miscellaneous journal or General
Journal. For example, purchase assets on credit, Correcting Entries, Adjusting Entries and Closing Entries
etc.
 Other books recorded in the pharmacy setting:

 Prescription Book
 Record Book for Senior Citizen
 Record Book for Disabled Persons
 Dangerous Drug Book
 Exempt Preparation Book
 Poison Book
 Record Book for selected Non-Prescription
 Drugs, Subject to abuse as determine by BFAD and/or Dangerous Drug Board (DDB)
 Room Temperature record book
 Bioref record book

Let’s evaluate how much did you understand! Record the following transactions in the
appropriate journal. Clue, two entries will be used for each presented journal format.
2017
March 3 Purchased goods from Alyssa & Co for ₱ 4,500.00
8 Sold merchandise to Nemia & Sons worth ₱ 6,000.00
12 Purchased merchandise from J Brothers ₱ 3,000.00
14 Credit sales of goods to Y & Co for ₱ 2,500.00
15 Nemia & Sons returned goods ₱ 1,000.00
18 Return merchandise to Alyssa & Co ₱ 500.00
22 Purchase Furniture from Mr. Lopez for of ₱ 3,200.00
24 Returned goods to J Brothers of ₱ 200.00
27 Purchase Machinery on account from ABC Machines ₱ 7,000.00
29 Y & Co returned merchandise of ₱ 300.00
IV. Financial Statements
Companies prepare four financial statements from the summarized accounting data:
1. Income Statement
An Income Statement presents the revenues and expenses and resulting net income or net loss for a specific
period of time. It shows result of operation for a certain time period. Income statement is sometime called
‘flow statement’ or ‘period of time’ statement.
2. Statement of Owner’s Equity

Statement of Owner’s Equity summarizes the changes in owner’s equity for a specific period of time. In case
of company this statement is also called statement of shareholder’s equity or statement of retained
earnings.
3. Balance Sheet
Balance Sheet reports the assets, liabilities, and owner’s equity at a specific date. This statement shows
financial position for a specific point in time. Balance sheet also called statement of financial position or
statement financial condition.
4. Cash Flows Statement

Cash Flow Statement Summarizes information about the cash inflows (receipts) and outflows (payments) for
a specific period of time, these statements provide relevant financial data for internal and external users.
Cash flow statement is divided into three sections, operating activities, investing activities or financing
activities.

5. Notes to the Financial Statement
The annual report contains the primary financial statements, notes to the financial statements and
accompanying information. Notes to the financial statements are essential in amplifying and explaining the
primary financial statement.
Example: Prepare an Income Statement, a Returned Earnings Statement, and a Balance Sheet for the medical
practice of Juan Dela Cruz from the items listed below for the month of January 2020:
Returned earnings (January 4) ₱ 15,000.00

Common stock 30,000.00
Accounts payable 6,000.00
Equipment 29,000.00
Service revenue 23,000.00
Dividends 6,000.00
Supplies expense 3,500.00
Cash 13,000.00
Utilities expense 700.00
Supplies 2,800.00
Salaries and wages expense 7,000.00
Accounts receivable 10,000.00
Rent expense 2,000.00
Solution:
Juan Dela Cruz

Income Statement
For the Month Ended January 2020
___________________________________________________________________________________________________
Revenues:
Service revenue ………………………………………........... ₱ 23,000.00
Expenses:
Salaries and wages expense ……………………………… ₱ 7,000.00
Supplies expense ……………………………………………. ₱ 3,500.00
Rent expense ………………………………………………… ₱ 2,000.00
Utilities expense ……………………………………………… ₱ 700.00
Total expenses ……………………………………… (₱ 13,200.00)
Net income ………………………………………….. ₱ 9,800.00
___________________________________________________________________________________________________
Juan Dela Cruz

Statement of retained earning
___________________________________________________________________________________________________
Retained Earnings, January 1 …………………………………. ₱ 15,000.00

Add: Net income ………………………………………………… ₱ 9,800.00
₱ 24,800.00
Less: Dividends ……………………………………………………. (₱ 6,000.00)

Retained Earnings, January 31 ………………………………… ₱ 18,800.00
___________________________________________________________________________________________________

Juan Dela Cruz
Balance sheet
___________________________________________________________________________________________________
Assets
Cash ……………………………………………………………….. ₱ 13,000.00
Accounts receivable …………………………………………… ₱ 10,000.00
Supplies ……………………………………………………………. ₱ 2,800.00
Equipment ………………………………………………………… ₱ 29,000.00
Total assets ………………………………………….. ₱ 54,800.00
Liabilities and Stockholder’s Equity

Liabilities
Accounts payable …………………………………. ₱ 6,000.00
Stockholder’s equity
Common stock ……………………………………... ₱ 30,000.00
Retained earnings …………………………………. ₱ 18,800.00 ₱ 48,800.00
Total liabilities and stockholder’s equity ………. ₱ 54,800.00
___________________________________________________________________________________________________
V. Inventory
 Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress,
and finished goods that a company has accumulated. It is often deemed the most illiquid of all current assets
and, thus, it is excluded from the numerator in the quick ratio calculation. There is an interplay between the
inventory account and the cost of goods sold in the income statement – this is discussed in more detail below.
 Determining the balance of Inventory The ending balance of inventory for a period depends on the volume of
sales a company makes in each period. The formula for this is as follows:
Ending Inventory = Beginning Balance + Purchases – Cost of Goods Sold
 Higher sales (and thus higher cost of goods sold) leads to draining the inventory account. The conceptual
explanation for this is that raw materials, work-in-progress, and finished goods (current assets) are turned into
revenue. The cost of goods flows to the income statement via the Cost of Goods Sold (COGS) account.
 Inventory and COGS

Ending inventory is also determined by the accounting method for Cost of Goods Sold. There are four main
methods of inventory calculation: namely FIFO (“First in, First out”), LIFO (“Last in, First out”), Weighted-
Average, and the Specific Identification method. These all have certain criteria to be applied and some
methods may be prohibited in certain countries, under certain accounting standards.
In an inflationary period, LIFO will generate higher Cost of Goods Sold than the FIFO method. As such, using
the LIFO method would generate a lower inventory balance than the FIFO method. This must be kept in
mind when an analyst is analyzing the inventory account.
 Periodic and Perpetual Inventory Systems

The type of accounting system used affects the value of the account on the balance sheet. Periodic
inventory systems determine the LIFO, FIFO, or Weighted Average value at the end of every period, whereas
perpetual systems determine the value after every transaction. Because of the varying time horizons and
the possibility of differing costs, using a different system will result in a different value. Analysts must account
for this difference when analyzing companies that use different inventory systems.
 Turnover and Accounts Payable

The average inventory balance between two periods is needed to find the turnover ratio, as well as for
determining the average number of days required for inventory turnover. In these calculations, either net
sales or cost of goods sold can be used as the numerator, although the latter is generally preferred, as it is
a more direct representation of the value of the raw materials, work-in-progress, and goods ready for sale.

Accounts payable turnover requires the value for purchases as the numerator. This is indirectly linked to the
inventory account, as purchases of raw materials and work-in-progress may be made on credit – thus, the
accounts payable account is impacted.
Use the following accounts and information to prepare, an Income Statement, a Retained Earnings Statement, and a
Balance Sheet for JTC Industries for the month ended August 31, 2017.
Accounts payable ₱ 1,100.00

Dividends 3,000.00
Accounts receivable 5,400.00
Insurance expense 1,200.00
Buildings 63,000.00
Supplies 1,400.00
Cash 20,600.00
Notes payable 3,300.00
Service revenue 25,700.00
Rent expense 3,400.00
Common stock 52,000.00
Salaries expense 10,000.00
Retained earnings (beginning) 25,900.00

MODULE 7
Introduction to Pharmacy
Operations and Management

Operations are the processes by which people, capital, and materials (inputs)
are combined to produce the services and goods consumed by the public
(outputs). Essentially, operations add value to the final product over and
above the product’s cost. Operations Management (OM) is the functional
area of business primarily devoted to the creation, planning, and
management of the resource capabilities used by a firm to create products or
services. (Afolab & Ola-Olorun, 2013)
Healthcare operations management is considered as the quantitative management of sup‐ porting business
systems and processes that transform resources (inputs) into health care services as outputs (Langerbeer II, 2008).
Pharmacy operations are carried out within the healthcare system and have a mix of both intangible and tangible
characteristics. Appropriate resources are transformed to create the pharmaceutical services which form intangible
components of the operations. These services are knowledge - based and have high levels of customer interactions. The
services accompany health commodities which are tangible products; the logistics and supply of which are major
functions of operations management.

1. Learn and apply the essential elements in efficiently and effectively managing a pharmacy, particularly a
patient - care setting pharmacy;
2. Describe the scope of operations management in pharmacy, particularly in the areas of responsibilities of:
a) Inventory management
b) Merchandizing and displaying
c) Human resource/People management
d) Customer management
e) Security and safety
f) Fixture and equipment
3. Describe the outcomes of the efficient and effective areas of responsibilities.
Essentially, operations management of pharmacies is a discipline of management

that integrates scientific or quantitative principles to determine the most efficient and
optimal methods to support pharmaceutical services in patient care delivery. There must
be an adoption of operations management techniques into pharmacy practice to help
drive improvements and efficiencies.
For instance, incorporating queuing theory and scheduling 70 Engineering Management

optimization methods help to reduce wastes and cycle time in patient care. The scope of operations management of
the pharmacy includes all functions related to management systems and business processes underlying the delivery of
pharmaceutical services. This includes extensive focus on the process workflow, physical layout, capacity design,
physical network optimization, staffing functions, productivity management, supply chain and logistics, quality
management and process engineering. (Afolab & Ola-Olorun, 2013)
Below are different items about Pharmacy Management. Determine where

each of these items should be considered under the given headings; Write Q
for Qualifications, F for Functions, A for Areas of Responsibilities, or O for
Outcomes on the blank before each item.
‗ Maximize Profitability
‗ Inventory management
‗ Motivating
‗ Organizing
‗ Integrity
‗ Staffing
‗ Leading or Directing
‗ Client Satisfaction
‗ Personal and Professional Fulfillment
‗ Planning
‗ Pharmacy Security and Safety
‗ Communication skills
‗ Achieve Targets (economic and Clinical)
‗ Cash management
‗ Thinking skills
‗ Personal skills
‗ Fixture and equipment
‗ Client management
‗ Merchandizing and displaying
‗ Security and safety
‗ Human resource management
‗ Controlling
‗ Leadership skills

Pharmacy Management
- Must be efficient and effective for a profitable and sustainable operation carrying
out the two (2) critical functions:
(1) deliver professional services in the most cost-effective manner, and
(2) earn a profit for a sustainable operation.
There are seven (7) important areas in a pharmacy operation that requires focus of the Pharmacy Manager and must
be communicated and known by the Pharmacy staff:
a) Inventory management
b) Cash management
c) Merchandizing and displaying
d) Human resource/People management
e) Customer management
f) Security and safety
g) Fixture and equipment
A. Inventory management refers to all activities employed in maintaining the optimum number or amount of each
inventory item (SKU) in the business operations.
Its objective is to provide continuous supply of your products and services to the clients.
Inventory Management Objectives

1. Maximize stock availability and minimize stock outs for maximum revenue generation
1.1. Maximize stock availability of the total inventory assortment
The store targets 95% availability, this means that if the Total Inventory Assortment = 3,000 SKUs then, 2,850 SKUs
must be available at any given time of the Pharmacy’s operation allowing 150 SKUs stock out.
1.2. Maximize stock availability through analysis of the:
(a) Inventory Turnover - the ratio showing how many times an inventory is sold and replaced during
a given period.
(b) Stock On Hand
(c) Stock Ageing

Botica Heaven has a total annual sale of PhP 40 M and is in operation with an
inventory value of Php 3.2M in January 2020, and Php 1.5 M in December 2020.
Calculate for the inventory turnover.
Inventory Turnover = 40 M/ 3.2 M – 1.5 M
= 23.53
**The inventory is sold and replenished 23 times in 1 year or 1.96/month.
What does this mean?

Botica Heaven’s inventory is sold and replenished 23.53 times a year or 1.96 times a month therefore;
Botica Heaven’s buyer schedule release of P.O.s 2x a month
Further, this means the inventory or stocks of Botica Heaven is held in the shelves only for 15.5 days (365/23.5).
How to Maximize stock availability?
1. Inventory Turnover analysis

Key take aways:
 How fast a company sells inventory guides purchase frequency planning.
 A higher ratio implies either strong sales or insufficient inventory;
 Low Turnover implies weak sales and possibly excess inventory (overstock).
2. Stock on Hand – Generally consists of the following:

(a) Cycle Stock Inventory - referred to as working stock, is the portion of inventory available to meet normal
demand during a given period.
(b) Safety Stock Inventory - referred to as buffer stock, held as a safeguard in case of the unforeseen such as
natural disasters, late deliveries or unexpectedly high demand.

Safety stocks
Botica Heaven sells 10 bottles of Paraceamol syrup orange 60 mL a day and
15 bottles on holidays and weekends.
It takes 5 days for the supplier to deliver the order; and on peak seasons and
certain occasions, the supplier takes 10 days to deliver the ordered items.
What should be the safety stock level of the said item?
Safety stock = (15 bottles x 10 days) – (10 bottles x 5 days)

= 100 bottles
Key take aways:

• Cycle Stock Inventory must be maintained;
• Safety Stock Inventory (Buffer) must be secured
• Monitoring of inventory movement facilitates the necessary adjustment of both the Cycle Stock and Safety Stock
Inventory.
3. Stock Ageing - is an analytical report to monitor turnover of stocks in your inventory.

a) Comparison on Number of days/months between the current day and the day of acquisition.
b) Comparison on Number of days/months between the current day and the day of its expiration.
Analyze the given stock ageing report below. Compare the number of days
between the current day (for example, June 2019) and the day of acquisition.

Key take aways:
• Ensures Optimum quantity per SKU in your inventory;
• The longer the item stays in your inventory, the higher the probability of wastage and the lower the opportunity
for efficient cash management.
Advantages of Good Inventory Management

1. better cash flow
2. good customer service
3. good relationship with suppliers
4. good return on investment and
5. accurate prediction of future needs of inventory
Inventory Cost
• Total cost that a company experiences while holding inventory, often one
of the most substantial factors in the success of the business
• The cost of holding goods in stock
4 Basic Types of Inventory Cost

1. Purchase cost – the unit price that the buyer pays to the vendor. As the item moves through the logistics system of the
company, the purchase cost should reflect its fully landed cost.
2. Ordering cost – the additional cost incurred whenever we order, reorder and replenish an inventory. Cost involve with
the processing of the order, paying the bill, auditing, etc.
3. Holding cost – the cost that accrue due to the actual holding of the inventory over a time period. The holding cost
varies with the amount of inventory being held and the time that the inventory is held.
- storage cost - capital cost
- service cost - risk cost
4. Shortage cost – when the demand arises which cannot be satisfied from available inventory, an inventory shortage
occurs.
*Purchase, Ordering and Holding cost can be thought of as the cost of having inventory while shortage cost result for
not having inventory, or for not having enough inventory at the right place at the right time.
Inventory Carrying Cost (Rate)

- cost of inventory, or carry cost, often refers to a certain percentage of the inventory value which represents the cost a
business incurs over a certain period of time to hold and store its inventory.
Example: What is the Inventory Cost Rate if ---

Equipment = PhP 2,500 Handling = 500
Labor = 1,500 Obsolescence = 100
Protective measures = 300 Pilferage = 100
Inventory cost = PhP 5,000
Inventory value = 100,000;

IC/IV = 5%

• Opportunity cost = 10%
• Insurance = 4%
• Taxes = 7%
Inventory Carrying Rate = 26 %; considered in the business Operating Cost

*Common practice is: ICR = 20 to 25% of total Inventory Value
Elements to Manage in Inventory

1. Assortment
2. Initial Inventory (when you open a Pharmacy or add a new SKU in the
Inventory Assortment List)
3. Replenishment Process
4. Store Inventory Holding
5. Returns
6. Initial Stocks of New Products
7. Initial Stocks of Promoted Products
8. Process on Delivery Receiving and Dispatching
9. Inventory Variance Monitoring
10. Pricing
11. Stocks Handling, Storage and
12. Waste Stocks Disposal
1. Assortment
Product assortment is the different types of products that a business offers for sale.
Assortment Planning – is a process whereby products are selected and planned to maximize sales and profit for a
specified period of time.
The Assortment Plan considers the financial objectives and seasonality of merchandise to ensure proper receipt flow.
*Variety vs. Assortment

• Variety refers to the number of different merchandise categories a retailer sells
Example : Analgesic
• Assortment is the number of different items or SKUs in a merchandise category.

Example : Mefenamic Acid
Brand A – tablet 250 and 500 mg
- capsule 250 and 500 mg
- syrup 60 and 120 ml etc.
• Assortment is the number of different items or SKUs in a merchandise category.

Example : Paracetamol
Brand A – tablet 250 and 500 mg
- capsule 250 and 500 mg
- syrup orange 60 and 120 ml
- syrup cherry 60 and 120 ml
- suppository, etc.
Stock keeping unit or SKU
- is an identification, usually alphanumeric of a particular product that allows tracking for inventory purposes.
Assortment Optimization
- Involves 2 key actions:
1. optimizing the assortment of products you plan to stock and then
2. arranging those products on the shelves for maximum impact. (PLANOGRAM)
Determine your MUST CARRY SKUs
CORPORATE SKUs (>1 stores)
BRANCH-SPECIFIC SKUs

Pharmacy Planogram
- is a visual plan which designates the placement of products on the shelves and merchandising display fixtures
of a retail store.
- It helps increase the consumer appeal of product displays, while also enabling staff to gain a better
understanding of product performance
Must Carry SKUs

• ABC Analysis - a method of inventory categorization which consists in dividing items into three categories, A, B
and C: A being the most valuable items – contributes 80% of the business performance,
C being the least valuable ones.

2. Initial Inventory
- Refers to the value of goods that a company has for its use or sale at the start of business.
- How much of it do you need?
- How do you determine your initial inventory?
**Go back to your business objective, to your business target.
3. Replenishment Process
• Inventory replenishment or stock replenishment refers to the process of inventory moving from reserve storage
to primary storage, then onto the picking stations.
*Objective: To keep the inventory flowing through the supply chain by maintaining efficient order and line-item fill rates.
2 Basic Replenishment Processes

A. Regular Orders
Order Qty = (Ave. daily off take x Inventory days ) – Stock-on-hand
Paracetamol tab 500 mg = 150 tablets daily
Stock on hand = 4 boxes x 100
Inventory days = 30 days
Order Quantity = (150 x 30) – 400
= 4100 tabs or 41 boxes (of 100s)
B. Emergency orders
- done, when one of the following situations occurs;
1. There is a waiting or pending customer order, such that the actual quantity ordered is outside average daily
movement (ADM).
2. When an epidemic occurs, or when there is an expected increase in demand due to seasonality.
3. When a particular stock keeping unit (SKU) is used as an alternative for an SKU that is out-of-stock.
Order Qty = ADM x (X)Days + Regular Order
X days is the number of days identified by management as an allowable excess in the total inventory holding that
the company is willing to additionally invest in the inventory for the operation of the business.
Example: Emergency Order for Paracetamol syrup 60 ml.

Ave. Daily Movement = 6 bottles
*The sales is observed to increase and upon checking the system, 10 bottles are
sold in the past 7 days; so increase trend in sales is consistent, so prepare:
Emergency Order = 6 x 15 days (if process defines a 15-day supply for

Emergency Order)
= 90 bottles
Right level of inventory is maintained by---
 Analyzing sales data (fast and slow moving)
 Deciding how much stock to order and keep
 Considering order and delivery times
 Choosing a reorder point
 Arranging to have some safety stocks
 Considering to use an outside inventory management agency, if necessary

4. Store Inventory Holding
The store or branch inventory holding (BIH) refers to the inventory holding of the business at any given time of its
operation.
BIH = (ADM x No. of Days) + Lead time
or
BIH = Cycle stocks + Safety stocks
• Lead time is defined as the number of days a stock is delivered to the store from the time the order is placed or
given to the central distribution center or to the supplier.
Example : If ordering schedule is 2x a month---

Cycle stocks (ADM X Inv days) = 21 days
Safety Stocks (Lead time) = 7 days
*then;
Store Inventory Holding = 30 days
*Meaning, at the time the buyer releases a P.O., the store has a stock possession of good for 15 days, so overstock is
supposed not to happen.
5. Returns Handling
• Returned products in a pharmacy operation may be classified into ;
a. good stocks b. bad stocks
Good stocks refer to the SKUs that are in good conditions and will be returned for the ff:
1.1. they are in excess of what is required (overstock)
1.2. They are initial stocks of new products that have to be returned after a given period of holding them in the
inventory is reached
1.3. They are products approved to be delisted in the assortment list because they are non-moving or not selling in
the store.
Bad stocks are products damaged, near their expiration dates, recalled (by FDA, distributor or trader) or when returned
by the customer due to tampered packaging or factory damage or stop medication order to outpatient.
Recalled products
- These products advised for recall could be in good or bad conditions;
Example :
Good condition – Company recall because the product is reformulated, voluntary recall
Bad condition - FDA advisory for recall because found to be substandard or causing significant adverse effects to the
users, mandatory recall
6. Initial Stocks of New Products

• Initial stock QUANTITY for newly launched product in the market is determined arbitrarily.
• Staff must be oriented of any new SKU in the assortment and list must be posted in a designated place of the
pharmacy
• Terms must be set clearly for this and they should always be taken on Consignment
7. Initial Stock of a Promo SKU

• Quantity is determined based on the usual stock movement + number of days stock holding to cater to the
projected increase in sales or product off take.
• Stock level must be enough to satisfy an anticipated increase in demand for the product.
• The usual 1-month supply in inventory maybe increased to 1.5 or 2 mos. and replenished with the 1-month supply
regular requirement

• Pharmacy designates a promo gondola where these products are displayed and personnel in-charge of the
gondola must always make sure that it is filled with the products on display.
• It must not be allowed to be empty of product display.
• The pharmacy staff must know the SKUs in promotion per store’s marketing program
8. Receiving of Deliveries
What are checked against the purchase order?
1. Stock keeping units (SKUs) of the items delivered (kind, dosage form, strength etc.)
2. Quantity of items
3. Expiration date, according to the pharmacy policy
4. Price
5. Integrity of the products, special handling requirements must be complied
9. Inventory Variance Monitoring

• Can be done manually and electronically.
• Done daily, then weekly
• Random SKUs picked and counted daily comparing system stock-on-hand vs. actual physical count quantity
10. PRICING
• Margin the owners would want to generate as the net profit + the estimated or projected expenses both
operating expense (OPEX) + the amortization of the capital expenditure (CAPEX) + COGs or the Cost of Goods
• Must be uniform in all branches if a chain, unless purposely made different for certain branches and for specific
intentions
11. Warehousing and Storage

2 Things to Consider:
A. Personnel – qualified and trained on the nature of the products they handle and on Good Storage Practices
(GSP). Certificate of training must be available on display in the premises. Practice Hygiene all the time and wear
proper attire when necessary.
B. Premises and Facilities
- Must be well secured.
- Space area must be enough to ensure orderly display of products and to avoid possible mix ups.
- Must be well-lighted, well-ventilated, clean and dry to comply to the temperature and humidity limits.
Characteristics of Good Warehousing

- Must be free from pests and all types of rodents.
- Must have a place and facility provided for products that require special storage condition, needed
equipment must be available.
- All pharmaceutical products stored in the warehouse must be placed off the wall (18” from outer wall), off
the floor (6”) and 24” from the ceiling
- Process of display and storage of SALADs, HAMs must be in place
- Regulated medicines must be secured as required by regulation and to be dispatched and dispensed only
by the Pharmacist
- Labels must all be in place for all stocks
- Quarantine area for all types of returns must be provided
12. Product Disposal

• A process to dispose waste of medical and pharmaceutical products must adhere to the guidelines in
Healthcare Waste Products Management of the World Health Organization (WHO), Department of Environment
and Natural Resources (DENR), and the Department of Health (DOH).
• Product disposal must be part of the store’s SOP.
Impact of Poor Inventory Management

• Unreplenished stocks
• Overstock

• Mismatched stocks with Clients’ Needs
• Irrational Procurement
• Unreturned expiring items
• Increase in volume of Bad Stocks
• High Operating Cost
>>>LOSS of CLIENTS and LOST SALES
Briefly elaborate on each item being essential characteristics in a successful Pharmacy Operation:
1. Pharmacy manager – focused entrepreneurially but clinically-oriented
2. Manpower – ordinary employees with extra-ordinary commitments
3. Assortment – stop-shop, convenient concept
4. Operation – strong social philosophy (familiar of Social and Administrative Pharmacy)
5. Compliance – ethical standards in a free market society
6. Service superiority – satisfaction philosophy
7. Relationship with the support department and Partners – win-win partnering

MODULE 8
Ethics and
Pharmacy Regulation

Pharmaceutical industry provides a valuable contribution to society, but at
the same time it is a business which profits are directly dependent on
marketing and promotion as key factors for sales volumes. Health care and
welfare of patients should be top priority for any pharmaceutical company.
Pharmaceutical products are in categories of social goods and they have
specific ethical, regulatory and commercial position as health care products,
and not just as durable consumer goods.
Pharmaceutical companies must meet high standards of quality, safety and efficacy, as determined by the
regulatory authorities and shall at all times be ethical and professional. Codes of industrial pharmaceutical practices are
the foundation for regulating the promotion of drugs and therefore play an important role in the relations between
enterprises and other stakeholders in the provision of health care. Promotion of drugs must be conducted in accordance
with defined rules contained in the laws governing the authorization of medicines, patients' rights, medical ethics,
industrial property rights, unfair competition etc. At the same time, these products are subject to strict and specific
regulations of their placing on the market of consumers, and making a profit depends on the economic power of the
people and the power of the health insurance system.

1. Learn the concepts of jurisprudence, ethics and marketing;
2. Describe the pharmaceutical industry of the Philippines;
3. Understand the role of regulation in promoting health; and
4. To be familiar with essential pharmaceutical policies and regulations affecting our professional role.
Answer these two (2) questions before we start:

1. What is the importance of laws in the pharmaceutical industry?
2. What is the importance of business ethics in the pharmaceutical industry?
Jurisprudence
- Etymology (latin): jurisprudentia
“juris (jus)” – law
“prudentia” – prudence (foresight, exercise of good judgment)
- Defined as: science or philosophy of law
- Purpose: To settle the manner in which new or doubtful cases should be brought under the appropriate rules
✖ right or wrong
✖ fair or unfair
✓legal or illegal
Dura Lex Sed Lex – The law may be harsh, but it is still the law.
Ethics
- Etymology (Greek): ethos – spirit
- Branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong
conduct
- making value-judgments
o Whether an action is right or wrong in particular circumstances
 Killing?
 Giving?
 Playing basketball?

Study the two cases and think about the application of jurisprudence and
ethics.
Case #1: A city wide ordinance states that throwing garbage in inappropriate
public places is punishable with a Php 5,000 fine and/or be thrown in jail for not
more than 6 months. While looking around, you see no possible witness to what
you will do next. What should you do?
Case #2:
MRL Inc., a stock corporation registered in the Securities and Exchange Commission (SEC), is looking for a new Area
Manager for its operations in Baguio City. Mark and Ryan applied for the position. Mark has an MBA degree from Harvard
University, grew up in Baguio, and has over 10 years of relevant working experience. Ryan was not able to finish College,
and only has 3 years of relevant working experience. However, Ryan was the nephew of the company’s President. This
is a clear case of nepotism. Is this illegal? Is this ethical?
Business Ethics
• A form of applied ethics – which examines ethical principles and moral or ethical
problems which arise in a business environment
• Operating according to ethical values is playing an increasingly important role in
business today.
• Avoiding costly crises and scandals is of value to businesses.
– Pacific Gas & Electric litigation – settled for $333 million in 1996 (Hinkley
groundwater contamination case)
• Relates to how any organization conducts its business in order to make profit or achieve other goals
• Relevant both to the conduct of individuals and to the conduct of the organization as a whole
– Micro-business ethics – working practices, recruitment issues, management styles, financial accounting
– Macro-business ethics – considers notion of free-will and rationality; helps the enterprise understand his
market
• Hallmark of a well-run business
Case #3: Turing Pharmaceuticals and Daraprim

In the United States 2015, Turing Pharmaceuticals acquired the rights to the drug
Daraprim. Developed in the 1950’s, Daraprim is the best treatment for the rare
parasitic infection toxoplasmosis.
After the acquisition, the CEO Martin Shkreli announced a 5,000% price hike
increase for the drug. He is branded by some as the “most hated man in
America”.
Source: BBC News, 2015 (http://www.bbc.com/news/world-us-canada-34331761)

Ethics in Pharmacy
Pharmacists are an essential part of the healthcare multidisciplinary team. They help to
ensure that medicines are used in the safest and most effective manner.
However, the profession, particularly community pharmacy, sits at the intersection

between health and retail, as the profits are gained from making sales of medications.
This introduces a number of ethical complications and a strong need for guidelines to
base decisions on that are centered on moral obligations and virtues.
Ethical Principles
The code of conduct to guide decision-making for pharmacist and maintain ethical integrity varies according to the
country and professional body that creates the guidelines. However, the ethical principles are similar and can be
separated into five main categories: the responsibility for the consumer, the community, the profession, the business and
the wider healthcare team.
The ethical responsibilities of a pharmacist that relate to the consumer include:

 To recognize the consumer’s health and wellbeing as their first priority, and utilize knowledge and provide
compassionate care in an appropriate and professional manner.
 To respect the consumer’s autonomy and rights and assist them in making informed decisions about their health.
This should include respecting the dignity, privacy, confidentiality, individuality and choice of the consumer.
The ethical responsibilities of a pharmacist that relate to the community include:
 To maintain the reputation and trust that the public has placed on the profession and refrain from abusing this
trust and respect.
 To acknowledge their place in the wider community, including their professional role and responsibilities to
control and supply pharmaceutical goods for optimal health outcomes.
The ethical responsibilities of a pharmacist that relate to the profession include:
 To commit to the development and enhancement of the profession by becoming involved in activities such as
training staff, teaching, being a preceptor or mentor for students, interns or colleagues, participating in initiatives
to develop the profession and demonstrate positive leadership.
 To keep up-to-date with knowledge of pharmacy practice with lifelong learning and self-development to
maintain professional competence and personal health to continue practicing.
 To practice only when their professional independence, judgment and integrity remains upheld, and manage
situations with a conflict of interest appropriately.
The ethical responsibilities of a pharmacist that relate to business practices include:
 To conduct the business practices of pharmacy in an ethical and professional manner with the consumer’s best
interest in mind and due respect to colleagues and the reputation of the profession.
The ethical responsibilities of a pharmacist that relate to other health professionals include:
 To work in cooperation and collaboration with other healthcare professionals to achieve the optimal health
outcomes for consumers.
Ethics in Pharmacy Practice

It is important that pharmacists always uphold their professional integrity and endeavor to provide the best service to
their patients. This includes staying up-to-date with new knowledge that could affect their decision and using the trust
held by the pharmacy profession for positive outcomes to promote the health of the general public whenever possible.
The ethical guidelines should underpin every action that a pharmacist takes throughout their workday, in such a way
that ethical decision-making becomes a second nature to the pharmacist and optimal decisions are made on a
consistent basis. (Smith, 2019)

Patient Behavior on Medicine Use
Figure 1. Flow diagram from unawareness to the repeat use of medicines
Promoting Health in Business

Goals:
(1) Providing health care and ensuring the well-being of patients
(2) Enhancement of competency and capacity of the pharmacy practitioners in terms of pertinent knowledge (e.g.,
pharmacology), skills (e.g., communication) and attitudes (e.g., conscientious)
(3) Integration of patient-centered care in a profit-driven pharmaceutical landscape
(4) Increase in awareness of policies, guidelines and regulations related to pharmacy practice, such that the practice
of mishandling health products is prevented.
Pharmacy Laws
Discover and be familiar with the different laws and policies affecting -
regulating and governing the practice of Pharmacy in the Philippines.
The goal for this section is for the learner to appreciate the laws and to
understand how these may contribute to a better practice of Pharmacy, rather
than simply in compliance to the law.
Republic Act Short Title Long Title and Purpose

I. STANDARDS OF THE PRACTICE OF PHARMACY AND PHARMACEUTICAL EDUCATION
RA 10918 Philippine Pharmacy An act regulating and modernizing the practice of pharmacy in the
Act Philippines, repealing Republic Act 5921, otherwise known as The
Pharmacy Law.
RA 8981 The PRC An Act modernizing the Professional Regulation Commission, repealing
Modernization Act of for the purpose PD 223 entitled: “Creating Regulation Commission and
2000 Prescribing its Powers and Functions”, and for other purposes
II. STANDARDS FOR FOODS, DRUGS, DEVICES AND COSMETICS

RA3720 Foods, Drugs, Devices An act to ensure safety & purity of foods and cosmetics, and the purity,
and Cosmetics Act safety, efficacy and quality of drugs & devices being made available
to the public, vesting the BFAD/FDA with authority to administer and
enforce the laws pertaining thereto, & for other purposes.
DOH A.O. 55 s. 1988: Requirements for labelling materials of

pharmaceutical products
RA 8203 Special Law on An act prohibiting counterfeit drugs, providing penalties for violations &
Counterfeit Drugs appropriating funds.

RA 9711 Food and Drug An act strengthening and rationalizing the regulatory capacity of the
Administration Act of Bureau of Food and Drugs (BFAD) by establishing adequate testing
2009 laboratories and field offices, upgrading its equipment, augmenting its
human resource complement, giving authority to retain its income,
renaming it the Food and Drug Administration (FDA), Amending certain
sections of Republic Act No. 3720, as amended, and appropriating
funds thereof
RA 8976 Philippine Food An act establishing the Philippine food fortification program and for
Fortification Act of other purposes
2000
RA 8172 Act for Salt Iodization An Act promoting salt iodization nationwide and for related purposes.
Nationwide or ASIN
law
III. LAWS TO ENSURE AFFORDABILITY AND ACCESSIBILITY OF DRUGS

RA 6675 Generics Act of 1988 An act to promote, require & ensure the production of an adequate
supply, distribution, use & acceptance of drugs & medicines identified
by their generic names
RA 9184 Procurement Act An Act providing for the modernization, standardization and regulation
of the procurement activities of the Government and for other purposes
RA 9502 Universally Accessible An act providing for cheaper and quality medicines, amending for the
Cheaper & Quality purpose Republic Act No. 8293 or the Intellectual Property Code,
Medicines Act of Republic Act No. 6675 or the Generics Act of 1988, and Republic Act
2002 No. 5921 or The Pharmacy Law and for other purposes
RA 7432 Senior Citizen’s Act An act to maximize the contribution of senior citizens to nation building,
grant benefits & special privileges.
RA 9994 Expanded Senior An act granting additional benefits and privileges to senior citizens,
Citizen’s Act of 2010 further amending Republic Act No. 7432, as amended, otherwise
known as “An act to maximize the contribution of senior citizens to
nation building, grant benefits and special privileges and for other
purposes”
- Republic Act No. 9257- Expanded Senior’s Citizens Act of 2003.
RA 7394 The Consumer’s Act It is the policy of the state to protect the interest of the consumer,
of the Philippines promote his general welfare & to establish standards of conduct for
business & industry.
RA 7581 Price Act An act providing protection to consumers by stabilizing the prices of
basic necessities & prime commodities & by prescribing measures
against undue price increases during emergency situations & like
occasions.
IV. CONTROL OF USE OF DANGEROUS DRUGS

RA 9165 Comprehensive An act instituting the comprehensive dangerous drugs act of 2002;
Dangerous Act of repealing RA 6425: Dangerous Drugs Act of 1972, as amended,
2002 providing funds therefore, and for other purposes.

V. PUBLIC HEALTH CONCERNS
RA 4226 Hospital Licensure An act requiring the licensure of all hospitals in the Philippines and
Act authorizing the bureau of medical services to serve as the licensing
agency
RA 9211 Tobacco Regulation An Act regulating the packaging, use, sale, distribution and
Act of 2003 advertisements of tobacco products
RA 10643 The Graphics Health An act to effectively instill health consciousness through graphic health
Warnings Law warning on tobacco products.
RA 8423 Traditional and An Act creating the Philippine Institute of Traditional and Alternative
Alternative Medicine Health Care (PITAHC) to accelerate the development of traditional and
Act (TAMA) of 1997 alternative health care in the Philippines.
RA 10354 Reproductive Health An act providing for a national policy on responsible parenthood and
Act of 2012 reproductive health
RA 11036 Philippine Mental An Act establishing a national mental health policy for the purpose of
Health Act of 2018 enhancing the delivery of integrated mental health services, promoting
and protecting persons utilizing psychiatric, neurologic and
psychosocial health services.
Not only are pharmacists required to abide to the pharmaceutical laws, but they are also required to abide to current
standards such as:
 Philippine Practice Standards for Pharmacists (PPSP)
 Good Laboratory Practice
 Good Distribution Practice (GDP)
 Good Manufacturing Practice (GMP)
 Good Clinical Practice
I. Determine what law is being described or is applicable to the case in each item.
1. Establishment of intellectual property office
2. Checking the labels of pharmaceutical products
3. Creation of laboratories for testing of sample products from pharmaceutical manufacturing companies
4. Promote the use of iodized salt to Filipino households
5. Informing sellers regarding the maximum amount of mark-up for commodities
6. Information dissemination to rural areas regarding family planning
7. Creation of the Food and Drug Administration
8. An act that updated/ amended RA 5921
9. Requires professionals to complete CPD units for ID renewal


10. Creation of PRC
11. Created the K-12 program
12. Testing the quality of make-ups being sold in the market
13. Changing BFAD to FDA
14. Upgrading the facilities and equipment of FDA for the testing of sample products
15. Promote the prescribing of the US adopted proprietary name of a drug
16. Promote the discovery and use of CAM
II. Study the given cases and write a not-more-than 100-word essay regarding the legality and ethics of each case.
Case #1:
Pharmaceutical Company Z conducts a 3-day training for 50 doctors. The training focuses on updates in managing
hypertension and cardiovascular diseases.
• To convince doctors, the training is absolutely free.
• For a more relaxing experience, the training is in the most expensive hotel at Boracay.
• To lessen homesickness, family members are also invited.
• Company Z is the owner of the Brand X (losartan 50 mg tablet) and is giving out free samples for all.
Case #2:
As a pharmaceutical medical representative, Patricia presents to Dr. Bruno a pharmaceutical product made by her
company for diabetes.
• Without presenting any evidence, Patricia claims that this new medicine is 3x more effective than your
standard anti-diabetic drug.
• Anna gave Dr. Bruno 4 boxes of donuts as a harmless gift for him and his staff.
• Before leaving, Patricia firmly stated, “This is the best discovery ever made since man discovered fire”.
END OF FINALS

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ONLINE BASED LEARNING (OBL) MODULE IN

INTRODUCTION TO PHARMACY LEADERSHIP

SCHOOL OF NATURAL SCIENCES

COURSE LEARNING OUTCOMES

DEAR STUDENT PHARMACIST

In this course, you will learn the fundamentals of the pharmacy

Wishing you all the best in your studies,

3. ASSESSMENT AND EVALUATION ACTIVITIES

5. RECEIVING MATERIALS AND SUBMISSION

6. ETIQUETTE OF A LOUISIAN STUDENT PHARMACIST

MODULE CONTENTS AND STUDY SCHEDULE

What’s this all about?

Let’s learn by doing!

Saint Louis University – Department of Pharmacy

At the end of this lesson, you should be able to:

Before we start, may I know your standpoint on this question?

Why is it that all pharmacists should be considered managers regardless of

THE MANAGEMENT PROCESS

 it comprises the following activities:

Saint Louis University – Department of Pharmacy

 A common mistake in small pharmacies is the manager's presumption that

 the following are ways in which control can be maintained:

Saint Louis University – Department of Pharmacy

7. Resource Allocator Role

Saint Louis University – Department of Pharmacy

c. First-Level Managers/Lower Level Managers

Saint Louis University – Department of Pharmacy

2. Authority and Responsibility

6. Subordination of Individual Interest to General Interest

9. Scalar Chain / Line of Authority

Saint Louis University – Department of Pharmacy

14. Esprit de corps

Saint Louis University – Department of Pharmacy

Saint Louis University – Department of Pharmacy

Saint Louis University – Department of Pharmacy

At the end of this lesson, you should be able to:

The actual process of planning varies by the type of planning being

Description/Example Vision Mission

2. A statement which draws inspiration or foundation from the values of the  

7. "To put a smile on our customers' faces in every market we operate"  

Saint Louis University – Department of Pharmacy

QUALITIES OF AN EFFECTIVE PLAN

THE PLANNING PROCESS

 A comprehensive planning process involves the following steps:

iii. Develop premises: forecasting is very important in premising

Saint Louis University – Department of Pharmacy

viii. Evaluation: revisions and other adjustments are made

GOALS AND ACTION PLANS

 Examples of goals according to the levels of planning:

Characteristics of an Effective Goal

 SPECIFIC: Goals must be precise and well-defined.

Setting policies SWOT analysis

Saint Louis University – Department of Pharmacy

Two Uses of Budgets:

Three Basic Steps in Budgeting:

Saint Louis University – Department of Pharmacy

The Decision-making Environment

STEPS IN THE DECISION-MAKING PROCESS

I. Set objectives Make at least one decision or a series of decisions.