ORGANIZATION AND

MANAGEMENT
MANAGEMENT

It is the process of planning, organizing, leading

and controlling productive resources, such as,
people, money, machines, materials and
methods

According to Professor Mary Parker Follet:

It is the attainment of goals of the organization
through the cooperative efforts of its members.
FUNCTIONS OF MANAGEMENT
1. PLANNING
First step in planning:
-- setting up of goals of the organization
-- the formulation of the various strategies in
accomplishing the goal
Focused on:
-- profits, costs, efficiency, and customer satisfaction
Planning may come from:
-- the top or from the bottom or depending upon the
values of top management. Organizing
2. Organizing
-- involves the allocation of the productive resources
--setting up the structure of the organization
* different objectives naturally require different
kinds of structure
Ex: Product organization have different
organizational structures from those of service
organizations
* organizational structure must be designed to
make possible attainment of the objectives
of the business for five, ten, fifteen years hence
3. Staffing
-- concerned with:
* evaluation, selection and development of
employees to fit the needs of the organizational
structure
4. Directing
-- motivating people to do their jobs toward the
attainment of the common goals of the
organization
-- it requires manager to possess good leadership
in terms of skills in human relations and
communication
5. Controlling
-- process of measuring and correcting actual
performance against standards established by the
organization
-- its purpose is not only to prevent failures but also
to improve performance
-- the process of controlling:
* setting up standards for measuring progress
towards objectives
* comparing actual performance against
standards
* correcting deviations from established
standards
MANAGEMENT THEORIES
1. Classical Management Theories
Theories were developed towards effective
management and productivity. These involves:
a. Scientific Management Theory
-Industrial Revolution started in England in 1700
-factories were established
-laissez faire policy was adapted
* government did not interfere in business
events
* capitalists exploited workers, suppliers
and consumers
Robert Owen
-The Father of
Socialism
-Became the Manager
and co-owner of New
Lanark Cotton Mill in
Scotland
-Reduced working
hours to 10.5 hours a
day
The reforms of Robert Owen became the
forerunners of Scientific Management Theory

Other Contributors:
1. Engineer Frederick Taylor
(1856-1915)
-Conducted research on time and
motion study - the best and
fastest methods of operation for
every part of the job
-Introduced the different rate
system
-Adopted rest periods during workdays
-Results of his reforms were
remarkable
* production costs decreased while
productivity, quality, income
and workers’ morale increased
3. Henry Gantt (1861-1919)
-An Industrial Engineer
-Abandoned Taylor’s
differential rate system due
to small incentive effect on
Production
-Introduced new idea
* a 50-cent bonus a day
would be given to
workers who finished
their daily work load
-Granting of bonus to supervisors who
achieved the daily standard.
* they would get a bonus for each
worker, plus an additional bonus if
all workers attained the daily
standard
* such incentive system would
motivate supervisors to train their
workers to perform well
-Adopted also Owen’s idea of rating an employee’s
work publicly
4. Frank and Lilian Gilbreth (1863-1924/1878-1972)
-Conducted studies on
Fatigue and motion
-Frank Gilbreth an
apprentice bricklayer
and became a manager
* he observed that
bricklayers perform
three different set
of motions: 1. for
1. for training apprentices
2. for working fast
3. for intentionally slowing down the
pace of their work
* he was able to develop a technique
that tripled the amount of work a
bricklayer could perform in a day
* motion and fatigue were
interdependent
* a reduction in motion is also a
reduction in fatigue
• the couple claimed that motion study would
uplift the morale of the workers due to its
physical benefits and reflection of
management concerns for the workers
2. Classical Organization Theory
-- it is concerned with the development of
management principles to increase
productivity of complex organizations like
factories.
-- such principles serve as guidelines for
managers. Contributors of Classical
Contributors of Classical Organization Theory
a. Henry Fayol (1841-1925)
-- The Father of The Classical School
-- He believed that that managers are not
made, which means management can be
learned.
-- He classified business operations into six
activities:
1. Technical – production of goods
` 2. Commercial – purchase of raw materials
and sale of goods
 3. Financial – acquisition and use of funds
4. Security – protection of employees and
properties
5. Accounting – recording of financial statements
6. Management – operation of the business
3. Behavioral School
-- it emerged due to limitations of Classical
Theory(it failed to attain production efficiency ,
such limitations of the CT motivated some
individuals to introduce better concepts of
management)
 -- workers did not always follow expected
patterns and behaviors
-- managers applied both physical and social
factors in managing people
-- it is composed of two approaches:
1. Human Relations Approach –
* Several experiments on human behavior were
conducted at Hawthorne Electric Plant
* Various tests, from lighting conditions to wages
and reduction of workdays were made.
* The results were not clear.
*Elton Mayo and his associates from Harvard
continued the Hawthorne experiments and
conclude that financial incentives did not improve
Incentives
• They believe that special attention should be
given to workers during the experiments
motivated them to improve their productivity
• This Theory became known as the Hawthorne
Effect.
2. Behavioral Science Approach
-- Elton Mayo and his associates started the
use of scientific method in studying people in their
work environment.
-- Researchers were trained better in the
social sciences and used more sophisticated
research methods.
-- This group became behavioral scientists
*Robert Owen *Mary Parker Follet
* Elton Mayo *Douglas McGregor
*Abraham Maslow
Quantitative Management Theory
--emphasis is the application of quantitative or
mathematical approaches to solutions
--the British organized the first operational
research team
*composed of experts in physics,
mathematics and related sciences
--operation research were improved and
formalized into management science schools
--it used statistical analysis, linear
programming, production scheduling techniques and
financial analysis.
Types of Managers
1. First-Level Managers
--lowest level of management
*production supervisors, clerical
supervisors, school supervisors, or hospital
supervisors
2. Middle Managers
--lead the activities of the supervisors, workers
*branch managers, project managers,
finance managers
3. Top Managers
--top executives of the organization
--involved in the operations of the whole
organization.
*presidents, chief executives, senior vice
president
Manager’s Roles
1. Leadership role
2. Entrepreneurship role
3. Figurehead role
4. Liaison role 5. Monitor role
5. Monitor role
6. Spokesperson role
7. Disseminator role
8. Resource allocator role
9. Disturbance handler role
10.Negotiator role
Management Skills
1. Technical skills – knowledge of and ability to use
processes, practices, procedures, techniques and
tools of a specialized field 2. Human skills
2. Human skills- refers to human relations
3. Conceptual skills – the ability to understand the
interrelationship and interdependence of the
various parts of whole organization
1. The interpersonal role of a manager is the most
important. Why?
2. A very knowledgeable Harvard-graduate manager
lacks human skills. Can he succeed as a
manager? Why?
3. We are in great need of managers with proper
social values. Why?
4. FORMS OF BUSINESS ORGANIZATIONS
FORMS OF BUSINESS ORGANIZATIONS
1. Sole Proprietorship
--Owned and managed by only one person
--Old and simplest form of business organization
--Easiest to put up
--You can start with small capital
Advantages:
1. It is easy to form and dissolve
2. All profits belong to the business owner
3. The owner is the boss
4. Tax advantage and less government regulations
Advantages
1. Unlimited liability
2. Lack of stability
3. Limited access to credit
4. Limited business knowledge and skills
2. Partnership
--Two or more persons bind themselves together to
contribute money, property or industry with the
intention of dividing profits among themselves
Advantages:
1. It is easy to organize
2. Availability of more capital and credit
3. The partners get all the profits
4. More and better knowledge and skills
Disadvantages:
1. Unlimited liability
2. Lack of stability
3. Management disagreement
4. Idle investment
3. CORPORATION
--It is an artificial being created by operation of law,
having the right of succession, and the powers,
attributes and properties expressly authorized by law
or incident to its existence
Advantages:
1. Limited liabilty
2. Easy to raise capital
3. Perpetual life
4. Specialized management
Disadvantages:
1. Difficult to organize
2. Strictly regulated and supervised by the
government
3. Some corporations are socially irresponsible
4. Formal and impersonal employer-employee
relationship
4. COOPERATIVE
4. COOPERATIVE
--The Cooperative Code defines a cooperative as a
duly registered association of persons, with a
common bond of interest, who have voluntarily
joined together to achieve a lawful common social
or economic end, and making equitable
contributions to the capital required and accepting a
fair share of the risks and benefits of the
undertaking in accordance with the universally
accepted principles of cooperation which include the
following:
1. Open and voluntary membership
2. Democratic control
3. Limited interest on capital
4. Division of net surplus
5. Cooperative education
6. Cooperation with other cooperatives
Objectives:
1. To encourage thrift and savings among the
members
2. To generate funds and extend credit to the
members for productive and provident purposes
3. To encourage among members systematic
production and marketing
4. To provide goods and services and other
requirements to the members
5. To develop expertise and skills among its members
7. To promote and advance the economic, social and
educational status of the members
8. To establish, own, lease, or operate cooperative
banks, cooperative wholesale and retail complexes,
insurance and industrial/processing enterprises and
public markets
Types of Cooperatives:
1. Credit cooperative
2. Consumer cooperative
3. Producers cooperative
4. Marketing cooperative
5. Service cooperative
6. Multipurpose cooperative