ABM_OM- Organization and Management
Introduction
The Accounting, Business, and Management (ABM) strand, which is available in grades
11 and 12, is predicted to be the most popular professional option in the K to 12
programs.
ABM encompasses a wide range of job openings in the Philippine economy's product
and service industries. Students in this course are prepared for postsecondary business
management studies as well as skilled labor force positions.
This module, titled Organization and Management: Ideas, Case lets, and Exercises,
provides the organizational and management concepts needed technical and skills
training, and entrepreneurship.
The module also looks at organizational and management ideas through the lens of
Philippine economic changes and worldwide data. Students are taught how to employ
case lets and exercises in a variety of situations.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 1
ABM_OM- Organization and Management
TABLE OF CONTENTS
Introduction………………………………………………………………………
1
Table of Contents……………………………………………………………….
2
Chapter 1………………………………………………………………………….
3
Understanding the Nature and Concept of Management
Chapter 2…………………………………………………………………………
11
The Firm and It’s Environment
Chapter 3…………………………………………………………………………
20
Planning
Chapter 4 …………………………………………………………………………
27
Organizing
Chapter 5 …………………………………………………………………………
33
Staffing
Chapter 6 …………………………………………………………………………
39
Leading
Chapter 7 …………………………………………………………………………
43
Controlling
Chapter 8………………………………………………………………………….
51
Functional Areas of Management
Chapter 9………………………………………………………………………….
59
Small Family Business
References………………………………………………………………………
Prepared by: Lace U. Medina, LPT [August 2021]
64
Page 2
ABM_OM- Organization and Management
Chapter 1: Understanding the Nature and Concept of Management
Structure of the Chapter:
1.0 Objectives
1.1 Definitions of Management
1.2 Evolution of Management Theories
1.3 Manager’s Job: Functions, Roles, and Skills
1.4 References
1.5 Self-Assessment Questions
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand the meaning of Management.

Explain the meaning and functions of management.

Explain the various types of management theories.

Understand the roles and skills of a manager.
1.1 Definitions of Management
Management comes from the Italian word, maneggiare, which means “to handle
(tools or equipment. Maneggiare derives from the Latin words, manus which mean
“hand” and agere which is “to act”.
According to Mary Parker Follet (Mother of Modern Management), Management
is “the art of getting things done through people.”
According to Henry Fayol (Father of Principles of Management), “to manage is to
forecast and to plan, to organize, to command, to coordinate and to control. “Fayol
focuses on the leaders, managers or the chief executives of the organization and works
downward to its subordinates. He believes that managers must learn how to analyze
deviations and make necessary adjustments to come up with a much feasible process.
According to Frederick Taylor (Father of Scientific Management), he defines
management as “an art of knowing what to do, when to do and see that it is done in
the best and cheapest way”.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 3
ABM_OM- Organization and Management
According to Peter Ferdinand Drucker, management is, “a multi-purpose organ
that manages the business and manages workers and work. Drucker introduced the
concept of knowledge Worker, capitalizing on the knowledge-based workers as
thinkers in an organization.
1.2 Evolution of Management Theories for Organization
Management is universal and dynamic that any period in its evolution involves an
interface of segments that cannot be divided or separated in different aspects. This
means that each period is a part of the development and evolution of the other.
Organization and Management have existed over thousands of years ago. Earliest
forms of civilization during ancient times were able to build structures, shelters, bridges
and tools by a group of people out of available resources and led by good management.
Five Management Theories for Organization:
1. Scientific Management
It is defined as the use of scientific method to determine the “one best way”
for a job to be done. The most significant contributor in this field was Frederick
W. Taylor, who is known as the Father of Scientific Management, Taylor was
able to define the “one best way” for doing each job. He made a scientific
study of workers, machines, and the workplace by using the method of
standardization of parts, uniformity of work structure and the assembly line.
Scientific management continues to be the foundation and basis for
continuous improvement in productivity and efficiency regarding quality and
cost.
2. Administrative Management Theory
The theorists who emerged in this group focused more on the entire
organization by developing general theories of what managers do and what
comprised well management practice. One of the most famous personalities
during this era was Henri Fayol. Fayol emphasized how different a manager’s
role was from other usual business functions.
He stated the 14 principles of management as follows:
1. Division of work
2. Authority
3. Discipline
4. Unity of Command
Prepared by: Lace U. Medina, LPT [August 2021]
Page 4
ABM_OM- Organization and Management
5. Unity of Direction
6. Subordination of individual interest to group of interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability
13. Initiative
14. Esprit de Corps
Another proponent of General Administrative Theory is Max Weber, a
German Sociologist and considered to be the “Father of Bureaucracy”. His ideal
form of an organization focused on what is known as a bureaucracy which
emphasized on the division of labor, clearly defined hierarchy, career
advancement based on merit, rules and decisions based on written format and
impersonal relationships.
3. Behavioral Management Theory
Often called human relations movement. The behavioral Management theory
focuses on the human aspect of work. During the 20th century, management
principles were not able to address many management situations specifically
those that deals with human behavior. Theorists then believed that a better
understanding of human behavior while at work, improved productivity and that
employees are not machines but are considered to be valuable assets in the
organization.
4. Management Science Theory
According to the Principles of Management Notes, Management Science
Theory is known as the quantitative approach to management. This uses
quantitative techniques in decision making. This approach includes applications
of statistics, optimization models, information models and computer simulations.
The Management Science theory originated during World War II as mathematical,
and statistical solutions to military problems were developed for wartime use.
Management Science Theory contributes to managerial decision making,
particularly in planning and controlling.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 5
ABM_OM- Organization and Management
5. Organizational Environment Theory
By late 1960’s, theorists recognized that human factor alone is not a
consideration to achieve organizational effectiveness. They understood that an
organization is a part of a larger environment outside its boundaries and is
affected by social, technical and economic factors which are in form of a system
perspective based on physical science.
There are two basic types of systems, the Open and Closed. A closed system
has no interaction with ts environment while an Open system interacts with its
environment.
Knowing and using these systems approach will help managers visualize the
Organization as a whole and would help in coordinating the work activities as one.
Realizing that decisions, actions and plans taken will affect the entire
organizations.
1.3 Manager’s Job: Functions, Roles, and Skills
A “Manager” is an individual who is in charge of a certain group of tasks, or a
certain subset of a company. A manager often has a staff of people who report to
him. (BusinessDictionary.com)
Manager’s job is to lead the staff, he is heading towards the achievement of a
common goal He makes sure that the organization’s goals are carried out by his
department based on the plans set by the organization. Although the job of a manager
is hard to describe and there is no specific job description that would fit for a particular
managerial position. Different industries have different job descriptions of how they
envisioned their managers to be.
A. Functions of a Manager
There are five basic functions of a manager:
1. Planning
- it is the basic function of management. It deals with plotting and
jotting down of action plans and decisions in advance to achieve the
pre- determined goals of the organization. The manager plans the
future course of actions, systematically thinking about ways and
means to accomplish the set goals.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 6
ABM_OM- Organization and Management
2. Organizing
-It is the process of bringing together physical, financial and human
resources and developing productive relationship among st them for the
achievement of organizational goals.
Managers must figure out the number of manpower needed to get the
tasks and the jobs were done. Organizing involves delegation and
coordination among the staffs.
3. Staffing
-It is the determination of personnel needs and the selection,
orientation, training and continuing evaluation of the individuals who
hold the required positions identified in the organizing process.
The purpose of staffing is to put the right people on the right job. It
involves manpower planning, recruitment, training and development
, performance appraisal and promotion.
4. Leading
Managers must supervise, lead, motivate, coach, train, guide and
direct his subordinate to work efficiently and effectively. Direction has
the following elements: (Management Study Guide)
A. Supervision- implies overseeing the work of subordinates
by their superiors. It is the act of watching & directing work &
workers.
B. Motivation- means inspiring, stimulating or encouraging
the subordinates with zeal to work. Positive, negative, monetary,
non- monetary incentives may be used for this purpose.
C. Leadership- may be defined as a process by which
manager guides and influences the work of subordinates in the
desired directions.
D. Communication- is the process passing information,
experience, pinion, etc. From one person to another. It is a bridge
of understanding.
5. Controlling- according to Koontz & O’Donnell, “Controlling is the
measurement and correction of performance activities of
subordinates to make sure that the enterprise objectives and
plans desired to obtain them are being accomplished.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 7
ABM_OM- Organization and Management
Controlling has the following steps:
A. Establishment of standard performance
B. Measurement of actual performance
C. Comparison of actual performance with the standards
D. Corrective action
Management Roles
Managers constantly play different roles and wear different hats every single day in the
office. There are times when these roles overlap, and the need to balance is quite
essential. Organizations nowadays recognized this need and will offer training and
development opportunities that would somehow link to career advancement or appraisal
program.
Management Skill
Most management books identify three types of skills that are essential for a successful
management process:
 Conceptual- a manager must have the knowledge or the ability to see the “big
picture” of any given situation to be able to create ideas and visualize plans
for the future.
 Technical- a manager must possess specific knowledge and the ability to use
different techniques to achieve what they want to achieve
 Human- this skill pertains to interpersonal relationship and the ability to work
well with other people.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 8
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #1- Case Analysis
Written Task covered: Chapter 1
Instruction: Read and analyze the case carefully. Answer briefly but substantially. (Use
the activity sheet on the next page for your action plan)
Your family owned a fast- food franchise in a Quezon City mall. The Management is
planning to expand another outlet in a new mall in Caloocan City. Using the management
functions (planning, organizing, leading and controlling), create an action plan to
implement the business expansion, using a simplified case method template.
Problem Statement:
To recommend an action plan for the Caloocan City Food service outlet. (40 points)
Case facts: The Caloocan City outlet has the same manpower requirement as the
franchise in Quezon City:



one store supervisor (college graduate with two- year experience);
two store assistants (College graduates with one-year experience); and
three front line staff (high school graduates with one- year experience)
The manpower training, materials, and machinery requirements for the expansion will
be provided by the franchisor. The money for the expansion is estimated at Five million
pesos (P 5,000,000.00), who will provide and direct the day-to-day operations and service
requirements of the business (finance, accounting, logistics, among others)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 9
ABM_OM- Organization and Management
ACTIVITY SHEET
Name: _______________________________ Grade level & Strand: _____________
Action Plan Recommendation
Management
Function
What
When
Where
Who
How
How Much
Plan
Organize
Lead
Control
Prepared by: Lace U. Medina, LPT [August 2021]
Page 10
ABM_OM- Organization and Management
Chapter 2: The Firm and It’s Environment
Structure of the Chapter:
1.0 Objectives
1.1 Introduction
1.2 The Business Environment
1.3 The Environmental Forces
1.4 PEST and SWOT Analyzes Framework
1.5 Forms of Business Organizations
1.6 References
1.7 Self-Assessment Questions
1.0 Learning Objectives
After completing this Chapter, you will be able to;
 Identify various elements of the business environment
 Learn PEST and SWOT analyzes
 Know the local and international trade environment
 Identify the phases of economic development
1.1 Introduction
Supposing you were given a capital to start a small business in your community.
What kind of business would you venture? How will you start up your business? Would
you go to explore possible business services or products to sell around your
community? Would you seek advice from those who have experience or just do things
on your own?
What are the things that you would consider in putting up your own
business? Would you immediately start or equip yourself first by attending seminars of
training related to the business that you will put up?
Knowing and understanding the environment to where you will put up your
business is critical. Environmental factors affect every aspect of business such as its
nature, prices of the product, location, distribution scheme and the like. In this lesson,
we shall learn the various components of the business environment, the importance of
Prepared by: Lace U. Medina, LPT [August 2021]
Page 11
ABM_OM- Organization and Management
environmental scanning, SWOT and PEST analyzes and forms of business
organization.
1.2 The Business Environment
Environment refers to all external forces, which have a bearing on the functioning
of business. Environment factors “are largely if not totally, external and beyond the control
of individual industrial enterprises and their managements. The business environment
poses threats to a firm or offers immense opportunities for potential market exploitation.
1.3 The Environmental Forces
The Importance of knowing the business environment help the business firm foresee
possible occurrences and strategies to turn the seeming threat into possible opportunities.
The environmental forces that will be given emphasis here are the external or the outside
forces that affect the business. The external environment is the uncontrollable forces
outside of the organization. It is considered uncontrollable because the business firm has
no control over them, but can respond and adapt to the treats using the resources of the
internal environment.
The following are the uncontrollable forces in the external environment:
A. Sociocultural Environment (Social and Cultural Forces)
- refer to the structure and dynamics of individuals and groups and their
behaviors, beliefs, thought patterns and lifestyles, interpersonal relationship,
poverty, life expectancy rate, literacy, etc. The sociocultural structure and
values that a society practice has a considerable influence in the business
firm.
B. Political Environment
-the
influence
exerted
by
the
three
political
institutions
viz.,legislature executive and the judiciary in shaping, directing,developing
and controlling business activities. A stable and dynamic political
environment is indispensable for business growth.
This also includes the political form, the government policies, and attitude
towards the business community. All these aspects have a substantial
alignment with the strategies adopted by business firms.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 12
ABM_OM- Organization and Management
C. Technological Environment
- Technology is understood as the systematic application of scientific or
other organized knowledge to practical tasks. Technology changes fast and to
keep pace with it, businessmen should be ever alert to adopt changed
technology in their businesses. As most would say, “you cannot stop the
advancement of technology, but you can learn to adapt to its change”.
D. Legal Environment
- This refers to the set of laws, regulations, and legalities,
that affect the
business operations. Every business organization has to follow and obey
within the framework
and requirements of the law. For instance, government
restrictions on the importation and exportation of certain
product might
hinder those firms that operate in that particular field.
E. Competition/ Competitive Environment
- “Know thy competitors” is the rule of the thumb in the industry. Knowing
who the players are in the similar industry would give the firm a good vantage
point. It is important to know the competitor’s activities and then design
effective strategies using the firm’s controllable variables.
*Porter Model
The micro environment of or the competitive environment defined in the porter
model is composed these five forces:
1. New entrants
- establishments that ‘enter’ a given industry to compete with existing
firms
2. Rival Firms
- existing establishments in a given industry that compete with each
other; also called industry participants
3. Substitutes
- establishments that supply a given industry’s requirements for
machinery, manpower, materials, money, and other resources.
4. Suppliers
- establishments that supply a given industry’s requirement for
machinery, manpower, materials, money, and other resources.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 13
ABM_OM- Organization and Management
5. Buyers
-the population, whether industrial or consumer, that purchases a
given industry’s products and services.
F. Economic Development
-There is close relationship between business and its economic environment.
Business obtains all its needed inputs from the economic environment and it
absorbs the output of business units.
The survival and success of every business depend fully on its economic
environment. This refers to economic growth, interest rates, foreign exchange
rates, inflation rates, unemployment rates, globalization of the economy, etc.
All these help in improving the pace of economic growth and is vital to all
business activities.
The benefits of environmental study are as follows;
 Development of broad strategies and long-term policies of the firm.
 Development of action plans to deal with technological advancements.
 To foresee the impact of socioeconomic changes at the national and
international levels on the firm’s stability.
 Analysis of competitor’s strategies and formulation of effective
countermeasures.
 To keep oneself dynamic.
1.4 PEST and SWOT Analyzes Framework
As business management practitioner, analysis and evaluation are necessary for
learning the internal and external factors that can affect the business operation to be able
to come up with excellent strategies to survive the competition in the industry. SWOT and
PEST analysis are the two most common analyzes framework being used.

SWOT analysis
-It identifies the strengths, weaknesses, opportunities, and threats of a topic.
These influences are internal. It was first tested by Albert Humprey, He was an
American business management consultant while doing a research project at the
Standford Research Institute (SRI) 1960s and 1970s.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 14
ABM_OM- Organization and Management
a. Strengths- The advantages or internal attributes that support a positive
result, or the edge that you have over the competitors
b. Weaknesses- The disadvantages or internal attributes that support a
positive result, or the edge that you have over the competitors.
c. Opportunities- trends that can be used to be taken advantage.
d. Treats- Current external factors which may cause a problem to cause a
negative impact and can jeopardize the business.
SWOT analysis aims to help the organization match its available resources against its
competitors. It works efficiently during the planning stage.
Below is the Framework of SWOT with guide questions
Figure 1. A SWOT Framework

PEST analysis
- refers to Political, Economic, Social and Technological that describes a
framework of macro-environmental or the uncontrollable external factors used in
doing an environmental scanning for market research as part of the strategic
management. PEST analysis is said to be created by FRANCIS AGUILAR, a
Harvard professor to which he used PEST analysis as a scanning tool. It gives
Prepared by: Lace U. Medina, LPT [August 2021]
Page 15
ABM_OM- Organization and Management
an overview of the environmental forces that the company has to consider to
understand better the market growth.
Pest analysis helps the business spot opportunities and red flags on significant threats. It
guides the direction of change within the business environment and contributes to avoid
starting projects that are likely to fail for reasons beyond the control of the business firm.
It can also help loosen up unconscious assumptions when for instance the firm plans to
enter a new country, venture into a market or region because it helps to see the big picture
of the environment.
1.5 Forms of Business Organization
It is important to understand the different types of business organization such as sole
proprietorship, partnership, and corporation. Business can be organized in one of many
ways and whichever the owner choose will affect the company’s as well as the owner’s
legal liability income tax treatment, financial concerns and even personal concerns.
A. Sole Proprietorship
It is the simplest and most numerous form of business organization; because
there is only one owner, it does not preclude the owner from using a business
Prepared by: Lace U. Medina, LPT [August 2021]
Page 16
ABM_OM- Organization and Management
name that is different from the owner’s name. Self- contractor is one example
of a sole proprietorship.
One of the advantages of a sole proprietorship is that the owner makes all
the decisions and controls the whole operation. All profit flows directly to his
account and is subject to fewer regulations and requirement that is it is
considered to be the simplest and least expensive form of business to
establish and dissolve. On the other hand, one of its disadvantages is the
sole obligation and responsibility of the owner in the business, it is also quite
difficult to raise capital, more often the owner used up his personal savings,
that is why sole proprietorship is not ideal for high- risk business as it puts up
the owner’s personal assets at risk.
B. The Partnership
It is a business being managed and owned by two or more individuals. The
partnership is a structure ideal to use if there will be several owners of the
business. Partners share the liabilities and operate the business together.
Three classifications of partnerships:
1. General Partnership (GP)- partners share personal liability for
business debts and can make a decision that affects the whole business.
Profit and loss are divided according to an agreement.
2. Limited Partnership (LP)- one partner is responsible for decisionmaking and can be held personally liable for the business debts and to the
extent of each partner’s investment
3. Limited Liability partnership (LLP)- all partners who have limited
liability for the business debts are considered general partners. This structure
protects each partner’s personal assets and each partner from debts or
liability incurred by the other partners.
C. Corporation
It is owned by multiple shareholders and is overseen by a board of
directors who were elected by the shareholder. This is considered a
limited liability entity and is distinct from its owners because it can borrow money,
enter into contracts, pay taxes and be sued. The shareholders gain profit through
dividend or appreciation of the stocks but are not responsible for the company’s
debts.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 17
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #2- Action Plan- SWOT ANALYSIS
Written Task Covered: Chapter 2
Case Study- LTI incorporated.
The main office of lucky TeleCompany, Incorporated (LTI) is located in Paranaque City, seven
to ten kilometers from the Makati business district, where their contractor, PLTC, is located.
PLTC is one of the biggest telecommunications company in the Philippines. LTI was awarded
the fiber optic connections for the PLTC customers in Santa Rosa, Laguna, for a three- year
period. The fiber optic contract will require LTI move to Santa Rosa
LTI has fifteen fiber optic technicians, five service vehicles, and fiber optic instruments and
materials and their Paranaque office warehouse. Their service technicians and their families live
in various districts near Paranaque and Makati. One LTI director, who worked with PLTC before
retirement lives in the Santa Rosa Area.
With the proposed transfer, the service technicians have requested for living quarters in the
new office, to reduce their commuting time and budget. At least two senior technicians are
considering resigning from LTI because of the transfer
LTI is considering a commute allowance for their service technicians instead. The human
resources officer thinks that the longer commute for the service technicians may decrease
productivity due to late arrivals and/ or absences, especially during inclement weather and heavy
traffic situations.
The Paranaque office rental is higher than the proposed Santa Rosa office. However, the
Santa Rosa office is on a five- year rent to own lease period. The Santa Rosa office has space
for the technicians, or live- in personnel, including a warehouse and a garage area.
Since the Sta. Rosa office is outside of the National Capital Region, The LTI Board assumes
that the food and transportation rates are lower than the Paranaque office rates. LTI bank
accounts, work permits, and suppliers will need to be transferred to the Laguna area.
Instruction: Create a SWOT matrix for the LTI move to the Sta. Rosa office in the diagram
provided below. Analyze the result and make a recommendation. (Use the sheet provided
on the next page) (100 points)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 18
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #2- Action Plan- SWOT ANALYSIS
Written Task Covered: Chapter 2
Name: _______________________________ Grade level & Strand: _____________
STRENGTH
WEAKNESSES
OPPORTUNITIES
THREATS
Recommendation:
Prepared by: Lace U. Medina, LPT [August 2021]
Page 19
ABM_OM- Organization and Management
Chapter 3: Planning
Structure of the Chapter:
1.0 Objectives
1.1 Definitions and Nature of Planning
1.2 Types of Plans
1.3 Planning at Different Levels in the Firm
1.4 Planning Tools and Techniques
1.5 Decision Making
1.6 References
1.7 Self-Assessment Questions
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Explain the importance of planning concepts in the sources of a business.

Understand the nature of planning.

Apply an appropriate planning tools and techniques.

Formulate an effective plan for specific business endeavor.
1.1 Definitions and Nature of Planning
Planning is the process of thinking before doing. We
have already been introduced to five essential functions of a
manager which is Planning, Organizing, Staffing, Leading,
and Controlling.
Planning is the process by which managers establish
goal, define methods and think of strategies by which these
goals are to be attained.
According to Weihrich and Koontz, Planning involves
selecting missions and objectives and the actions to achieve
them; it requires decision making, which is choosing from among future alternative
course of action.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 20
ABM_OM- Organization and Management
According to Newman, “Planning is deciding in advance, what to is to be done;
that is a plan is a projected course of action.” So Planning is thinking ahead as to the
future course of action.
Henry Fayol defines planning as “deciding the best alternatives among others to
perform different managerial operations to achieve the pre- determined goals.
Plans have two basic components; goals and action plans. Goals represent an
end statement, the targets, and results that manager hope to achieve. While the
action plans, represent the means by which an organization goes ahead to attain its
goals.
The nature of planning can be highlighted as follows:
 Planning is goal oriented. A manager cannot do planning unless the goal is
specified. Every step specifies an action plan to be able to attain the desire goal.
 Planning is futuristic in nature. Planning means looking ahead.
 Planning exists in all managerial activities; it is the primary function of managers
at all levels
 Planning is not a guess word; it is based on facts and information
 Planning is flexible; it is dynamic in a process capable of adjustments by the
need and requirement of the situation.
1.2 Types of Plans
Planning is a part of management concerned with creating procedures, rules and
guidelines for achieving a stated objective. Planning is carried out, Planning is carried
out, and managers need to create broad objectives and mission statements as well.
Below are the three types of plans used by management in order it out within an
organizational framework.
a. Strategic Plan- a high- level overview of the entire business, its vision, mission,
corporate objectives, and values. This plan is the foundational basis of the organization
and will form part of the long-term decision.
b. Tactical Plan- describes the tactics that the organization plans to use to achieve
the ambitions outlined in the strategic plan. It is a short range, say less than one year. A
low-level document that breaks own broader mission statements into smaller, actionable
chunks. This answers the question “How?”
Prepared by: Lace U. Medina, LPT [August 2021]
Page 21
ABM_OM- Organization and Management
c. Operational Plan- The operational plan describes the day to day running of the
company. The operational plan charts out a road map to achieve the tactical goals within
the time frame. This plan is highly specific with an emphasis on short- term objectives.
Creating the operational plan is the responsibility of the low-level managers
and supervisors. An operational plan can be either single use or ongoing.
 Single use plans- created events or activities with a single occurrence
 Ongoing Plans- these can be used in multiple settings on an ongoing basis.
It could be a policy, set of rules or procedures. Ongoing plans can be
changed or repeated as required.
1.3 Planning at Different Levels in the Firm
An organization can have many different managers, across different levels, positions,
levels of authority and hierarchy. Here we will discuss planning at different levels in the
firm.
Three management levels:
A. Top-level Managers
Top-level managers are the chairperson, board of director, president, CEO,
CFO, COO, Vice-president and Corporation Head.
These managers are responsible for controlling and overseeing the entire
organization. They are the ones who the firm. They play a significant role in the
mobilization of outside resources.
B. Middle-level Managers
Those who are in the level below top managers. Their job titles include:
General Manager, Regional Manager, Division Manager, Plant Manager, etc.
Middle Level managers are responsible for carrying out the goals set by
top management. They do so by setting goals for their departments and other
business units. Middle managers motivate and assist first- line managers to
achieve business objectives. Middle managers may communicate upward, by
offering suggestions and feedback to top executives. Because middle managers
are more involved in the day- to -day working of a company, they may provide
valuable information to top managers to help improve the organization’s
bottom line.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 22
ABM_OM- Organization and Management
C. Lower- level Managers
- Lower- level managers also called first- line managers or supervisors. These
managers have job titles such as Office Manager, Department Manager, Store
Manager, Supervisor.
These managers focus on controlling and directing.
They are responsible for the daily management of line workers or the employees.
Although lower- level managers do not set goals for the organization, they have
an unyielding influence on the company. These are the managers that most
employees interact with on a daily basis if the managers performance is poor;
employees may also perform poorly.
1.4 Planning Tools and Techniques
a. Brainstorming
-It is the first crucial creative stage of the project management and planning
process. It is a powerful technique that draws out ideas from a group of people.
It creates new ideas, solves problems, motivates and develops teams.
Brainstorming Process
 Define and agree on the objective
 Brainstorm ideas and suggestions having agreed a time limit
 Categories/ condense/ combine/ refine
 Assess, analyzes the effect or result
 Prioritize options/ rank list appropriate
 Agree on action and timeframe
 Control, monitor, and follow-up
b. Fishbone Diagrams
-Fishbone diagrams are also called “cause and effect diagrams” and Ishikawa
diagrams, named after Kaoru Ishikawa. It has a central spine running left to
right, around which is built a map of factors which contribute to the final result
or problem. For each item, the main categories of factors are identified and
shown as the main bones lead into the spine.
Fishbone diagrams are excellent for identifying hidden factors which can
be significant in enabling larger activities, resources areas or parts of a
process.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 23
ABM_OM- Organization and Management
c. Gantt Chart
Gantt charts are excellent models for scheduling and budgeting, and for
reporting presenting and communicating project plans. You can construct a Gantt
chart using for the duration of the project.
1.5 Decision Making
Management is decision making. Decision is a choice, however, the conclusion
or the said choice is not just based on intuition and one person’s idea, in management
it should be based on gathered facts. One of the competencies that a manager should
have is the ability to make a sound decision. Thus decision- making is the core of
managerial activities in an organization.
Steps in Decision Making

Identify the problems

Seek information

Brainstorm solutions

Choose an alternative

Implement plan

Evaluate outcomes
Prepared by: Lace U. Medina, LPT [August 2021]
Page 24
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #3- ESSAY TYPE
Written Task Covered: Chapter 3
Name: _______________________________ Grade level & Strand: _____________
Instruction: Read and answer the following questions carefully.
1. Now that you have learned to plan at different levels in the firm, in your opinion, which
among the three level managers carry the biggest responsibility in the planning and
decision making? Defend your answer. (10 points)
2. Why is “human Relations” so important in an organization? (10 points)
3. Why do Innovations matter in an organization? (10 points)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 25
ABM_OM- Organization and Management
4. What is the common denominator why Managers fail? Explain (20 points)
5. Explain this mantra of Bruce Lee “Knowing is not enough, we must apply. Willing is
not enough, we must do” (10 points).
Prepared by: Lace U. Medina, LPT [August 2021]
Page 26
ABM_OM- Organization and Management
Chapter 4 : Organizing
Structure of the Chapter:
1.0 Objectives
1.1 Nature of Organization
1.2 Types of Organization Structures
1.3 Organization Theories and Application
1.4 Delegation
1.5 Formal and Informal Organizations
1.6 References
1.7 Self-Assessment Questions
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand the nature of organizations and types of organization
structures.

Identify the types of Organizational structures.

Design appropriate organization structure for a specific business.

Differentiate formal and informal organization.
1.1 Nature of Organization
Organization is a continuous process, and it goes throughout the lifetime of the firm.
Whenever changes arise along the way, a new type of activities springs up. Therefore,
there is a need to review constantly and evaluate the assignments of each person
handling a particular task. The process of organization involves dividing the work in a
rational way and integrating the activities with work situations and personnel.

Organization as a Process and

Organization as a Structure
Organization as a Process
Prepared by: Lace U. Medina, LPT [August 2021]
Page 27
ABM_OM- Organization and Management

Accomplishment of business objectives

Division of Labor

Departmentalization

Delegation of duties and responsibilities

Coordination of efforts
Organization as a Structure
As a structure, the organization is a network of internal responsibility and authority
relationship. It is a systematic combination of people functions and physical facilities.
1.2 Types of Organization Structure
There are two organizations that Managers should deal with one formal and the
other informal.
Formal Organizational Structure are as follows:
a. Line Organizational structure
b. Functional authority organizational structure
c. Divisional organizational structure
d. Matrix organizational structure
A. Line Organizational Structure
-It has direct vertical relationship between different levels in the firm.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 28
ABM_OM- Organization and Management
B. Functional Authority Organizational Structure
- The functional organizational structure organizes the activities of a business around
areas of specialization. This approach involves a considerable amount of process
standardization within a business, with the real decision-making authority centered at
the top of the organization.
C. Divisional Organizational Structure
In this type of structure, the organization can have a different basis on which
departments are formed. They are by function, product, geographic, territory, project and
combinations approach.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 29
ABM_OM- Organization and Management
D. Matrix Organizational Structure
It is a permanent organization designed to achieve specific results by using teams of
specialists from different functional areas in the organization. Matrix organization
decentralized decision making, improved environmental monitoring, responses to
change and has flexibility in the use of resources.
1.3 Organization Theories and Application
Organizational theories can help a Company address business issue successfully by
highlighting specific organizational problems and how a suitable structure can deal with
them. A survey of the different possibilities can help you make an informed choice.
Knowledge of the theories can be used to match the goals, business environment
and the employees of the company with the organizational structure best able to meet the
challenges that the company faces.
A. Classical Structure Theory
In this structure, employees report to one or more managers for their work
and disciplinary matters. Managers in classical structures rely on the
organizational structures to channel work to the appropriate department.
(Limited flexibility in experience and expertise)
B. Contingency Organizations
A contingency theory is an organizational theory that claims that there is no
best way to organize a corporation, to lead a company, or to make decisions.
Instead, the optimal course of action is contingent (dependent) upon the internal
and external situation.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 30
ABM_OM- Organization and Management
C. Behavioral Organizations Theory
These organization types assume employees complete the required work if
their company provides a suitable business environment. If the company has
hardworking employees, responsible, then an employee- focused organizational
structure may be effective.
1.4 Delegation
Three major elements of Delegation:
 Responsibility- it means, assigning the work to an individual.
 Authority- To fulfill the duty, certain authority is delegated to the subordinate.
 Accountability- means to check whether the subordinates are performing their
responsibilities in an expected manner or not. It cannot be delegated.
1.5 Formal and Informal Organizations
 Meaning
 Formal organization
It is formed when two or more persons come together. They have a
common goal. It has its rules and regulations which must be followed by
the members (employees and managers). It has a system of coordination
and authority (superior- subordinate relationship) The Objectives are
specific and well- defined.

Informal Organization
Exists within the formal organization. It is a network of personal and
social relationship. It does not have any rules and regulation, no system
of coordination and authority, and well -defined objectives.
 Benefits of Members

Members of the formal organization get financial benefits like
wages or salaries, bonuses, allowances, health, etc.

Members of the informal organization get personal social
benefits like friend’s community group, etc.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 31
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #3- Essay Type
Written Task Covered: Chapter 4
Name: _______________________________Grade/Strand/Section: __________
Instruction: Read and answer the carefully the question. Your responses to the questions
will graded according to:
Total points (10)
Total Points (5)
Content and Development
6
3
Organization and Structure
2
1
Grammar, Punctuation, and Spelling
2
1
Total
10
5
1. How does having a strong sense of self-worth help you to be more productive and
make more money? (Score of 5)
2. According to one study, smarter employees are more likely to be satisfied with their
jobs. What explanation do you have for the link between IQ and job satisfaction?
(Score of 5)
How can a manager help employees learn the correct values? (Score of 5)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 32
ABM_OM- Organization and Management
Chapter 5: Staffing
Structure of the Chapter:
1.0 Objectives
1.1 Nature of Staffing
1.2 Recruitment and Selection Process
1.3 Training and Development
1.4 Compensation and Benefits
1.5 Employee Relations
1.6 Rewards System
1.7 Self-Assessment Questions
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand the Nature of Staffing

Identify the Steps in Recruitment

Conduct job analysis

Discuss the importance of employee relations and Reward
System.
1.1 Nature of Staffing
It is defined as the selection and training of
individuals for specific job functions and charging them
with the associated responsibilities.
According to, Weirch, Cannice, Koontz, “The
managerial functions of staffing is defined as filling and
keeping filled positions in an organizational structure”.
Staffing is a continuous activity for as long as the
organization is existing because the movement of
employees due to promotion and transfer takes place
continuously. Staffing is putting the right people at the
right job, It is the Human Resources Manager’s job to look for people, select, train,
develop, provide remuneration, etc.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 33
ABM_OM- Organization and Management
1.2 Recruitment and Selection Process
The following steps are the best practice to attract talented and diverse applicant
pool:
 Identify vacancy and evaluate the need
 Develop job description
 Develop Recruitment plan
 Select search committee
 Post position and implement recruitment plan
 Review applicants and develop short list
 Conduct Interviews
 Select Hire
 Finalize recruitment
1.3 Training and Development
There are a lot of types of training that HR managers offer, no one type would be
enough for the jobs we do. Most HR managers use a variety of these types of training to
develop a holistic employee.
 Technical or Technology training
-It is meant to teach new employee to technological aspects of the job.
 Quality Training
-Familiarizing employees with the means of preventing, detecting, and
eliminating non- quality items, usually in an organization that produces a
product. (Stamp- quality approval- ISO)
 Skills Training
- includes proficient needed to complete a job. Skills training is most of
the time given in-house and can include the use of mentor.
 Soft Skills Training
-It refers to personality, traits, social graces, communication, and personal
habits that are used to characterize relationships with other people.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 34
ABM_OM- Organization and Management
 Team Training
- The goal of team training is to develop cohesiveness among team
members, allowing them to get to know each other and facilitate relationship
building. It is a process that empowers team to improve decision making,
problem solving, and team development skills.
 Managerial training
- Some managerial training might be performed in- house while other
training, such as leadership skills, might be performed externally (identified
as a candidate for promotion).
 Safety training
- It is a type of training that occurs to ensure employees are protected
from injuries caused by work- related accidents.
1.2 Compensation and Benefits
Compensation describes the cash rewards paid to employees in exchange for the
services they provide. It may include base salary, wages, incentives, and
commission. Total compensation includes cash rewards as well as any other
company benefits.
 Salary and wages
- A salary (or wage) is a fixed amount paid in exchange for an employee’s
services. Ontario Employment Standards legislation entitles most employees to
receive a “minimum wage” in exchange for the work they complete for a company.
 Incentives
-While salary and benefits must be competitive, incentives are the most likely
drivers of attracting and retaining the best employees in start- ups.
There are three key types of incentives:
a. Bonuses- attainment of goals based on performance.
b. Profit Sharing- payment is tied to company profits.
c. Commissions- a common way to remunerate employees for
securing the sale of a product or service.
1.3 Performance Appraisal
Prepared by: Lace U. Medina, LPT [August 2021]
Page 35
ABM_OM- Organization and Management
It is the systematic evaluation of the performance of employees and to understand
the abilities of a person for further growth and development. Performance evaluation is
done in systematic ways which are as follows:
 The supervisors measure the pay of employees and compare it with
targets and plans.
 The supervisor analyzes the factors behind work performances of
employees.
 The employers are in a position to guide the employees for better
performance.
Advantages of Performance Appraisal
a. Promotion- It helps supervisors to promote programs for efficient employees
and dismiss or demote inefficient employees.
b. Compensation- Merit rating is possible through performance appraisal.
c. Employees Development- The supervisors frame training policies and
programs.
d. Section Validation- It is to understand the validity and importance of the
Selection procedure.
e. Motivation- Performance appraisal serves as a motivation tool. Through
evaluating the performance of employee’s, a person’s efficiency can be
determined if the targets are achieved.
1.4 Employee Relations
Maintaining a strong employer and employee relationship can be the key to the
ultimate success of an organization, the results are advantageous. It is known that if
a strong relationship is to place employees will be more productive, more efficient,
create less conflict and will be more loyal.
Having strong employer and employee relations reaps a lot of benefits for your
business. The three most advantageous are listed below;
a. Productivity
b. Employee Loyalty
c. Conflict Reduction
Prepared by: Lace U. Medina, LPT [August 2021]
Page 36
ABM_OM- Organization and Management
1.5 Reward System
In the broadest sense of the word, performance evaluation and reward systems are
designed for employee development and raising motivation with the purpose of achieving
better and more visible results. Goals are reached by giving systematic feedback while
the effects of subjectivity and the errors that come from it (sympathy, halo effect) are
minimized. The aim of the whole process is to boost productivity and work quality in the
entire organization.
In all successful companies at home and abroad, reward systems are established
practices with certain common and specific characteristics because the system cannot
only be copied from one organizational culture within it when planning, understanding,
and interpreting the system.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 37
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #3- ESSAY TYPE
Written Task Covered: Chapter 5
Name: _______________________________Grade/Strand/Section: __________
Instruction: Read the following cases carefully and answer the question brief but
substantially.
Your response to the question will be graded according to:
Total points (10)
Content and Development
6
Organization and Structure
2
Grammar, Punctuation, and Spelling
2
1. Lisa’s performance will be evaluated by Joseph soon. In the last six months, Lisa has
had some performance issues. She has a habit of arriving late and departing early, and
she has missed two crucial deadlines as a result. She is, nonetheless, a really personable
and pleasant person who gets along well with others at work. Lisa has a large amount of
debt, and receiving a bonus after this appraisal would be quite beneficial to her. Joseph
does not want to put his relationship with her in jeopardy, and he also does not want her
to miss out on the bonus. As a result, he's thinking about giving her a "good" score in the
appraisal.
a. What counsel would you give James in this situation? (10 points)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 38
ABM_OM- Organization and Management
Chapter 6: Leading
Structure of the Chapter:
1.0 Objectives
1.1 Introduction
1.2 Nature of Directing
1.3 Leadership Theories
1.4 Role of Communication in the Organization
1.5 Management of Change and Diversity in the Workplace
1.6 Self-Assessment Questions
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand the motivation, leadership, and communication work in
an organization.

Understand the changes and diversity in management.
1.1 Introduction
“When you’re a leader. Everything is your fault.” How would you
interpret this
quotation? Do you agree that when you are a leader, all the negative things that will
happen in your team is your fault?
In the words of Theo Haimann, “to make any managerial decision meaningful, it
is necessary to convert it into effective action, which the manager accomplishes by
directing. Without this managerial function nothing or at best very little is likely to come
about”.
1.2 Nature of Directing
Directing involves guiding, inspiring and leading people so that they accomplish
predetermined objectives. If the directing function is done well, work in an
organization is efficiently and effectively done. The function of directing influences the
subordinates and motivates them into meeting the organization’s goals. The poor
directing function can lead to spoiling an otherwise good planning, organizing and
Prepared by: Lace U. Medina, LPT [August 2021]
Page 39
ABM_OM- Organization and Management
staffing process which would make the meeting of goals and objectives of the
organization difficult. This is because nothing actually can happen until there is the
function of directing.
The direction is a continuous function, and therefore, management must
supervise and guide his subordinates at all times for work to go as planned. Direction
converts plan into actual action. Since nothing in an organization can happen without
direction.
1.3 Leadership Theories
Anybody can be a leader. However, not all can be an effective leader. You just need
to understand the various approaches to leadership, so that you can use the right
approach for your situation. One way of doing this is to learn about the core leadership
theories that provide the backbone of our current understanding of the word “Leadership”.
 Trait Theories
What Type of Person makes a Good Leader?
-Trait theories help us identify traits and qualities (for example, integrity,
empathy, assertiveness, good decision- making skills, and likability) that are
helpful when leading others.
 Behavioral Theories
What does a good leader do?
-Behavioral theories focus on how leaders behave. For instance, do leaders
dictate what needs to be done and expect cooperation? Or do they involve their
teams in decision- making to encourage acceptance and support?
Kurt Lewin developed a framework based on a leader’s behavior. He argued
that there are three types of leaders:
a. Autocratic Leaders- make decisions without consulting their teams.
b. Democratic Leaders- allow the team to provide input before making a
decision, although the degree of input can vary from leader to leader.
c. Laissez- faire leader don’t interfere: they allow people within the team to
make many of the decisions.
 Contingencies Theories
How Does the situation influence good leadership?
Prepared by: Lace U. Medina, LPT [August 2021]
Page 40
ABM_OM- Organization and Management
- The realization that there is no one correct type of leader led to theories
that the best leadership style depends on the situation. These theories try to
predict which style is best in which circumstances.
 Power and Influence Theories
What is the source of the leader’s power?
- Authority and influence theories of leadership take an entirely different
approach - these are based on the different ways that leaders use power and
influence to get things done and they look at the leadership styles that emerge as
a result.
1.4 Role of Communication in the Organization
By making an effort to improve the company’s communication processes,
you can build a stronger company that will have to stay power in the market.
A. Employee Trust
B. Clarity
C. Collaboration
1.5 Management of Change and Diversity in the Workplace
Workplace diversity refers to a variety of differences between people in an
organization. Diversity comprises gender, race, religion, language, cognitive style,
organizational function, education, background and more.
Benefits of Workplace Diversity
An organization’s success and competitiveness depend upon its ability to embrace
diversity and realize the benefits. When organizations actively assess their handling of
workplace diversity issues, develop and implement diversity issues, develop and
implement diversity plans, multiple benefits are reported such as:
 Increased adaptability
 Broader service range
 Variety of viewpoints
 More effective execution
Prepared by: Lace U. Medina, LPT [August 2021]
Page 41
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #3- Comparative Analysis
Written Task : Chapter 6
Name: _______________________________ Grade level & Strand: _____________
Instruction: Read and answer the carefully the question.
Question: Some theorists suggest that leaders should be able to adjust their style to the
situation in which they find themselves. Others suggest that leadership styles are
relatively fixed and that leaders should be matched to situations in which they can
exercise most control. Discuss both views and give your opinion, which view would you
agree most? (100 points) Your responses to the questions will graded according to:
Total points (100)
Content and Development
60
Organization and Structure
25
Grammar, Punctuation, and Spelling
25
Total
100
Prepared by: Lace U. Medina, LPT [August 2021]
Page 42
ABM_OM- Organization and Management
Chapter 7: Controlling
Structure of the Chapter:
1.0 Objectives
1.1 Introduction
1.2 Definition and Nature of Management Control
1.3 Control Methods and System
1.4 The Role of Budgeting in Planning and Control
1.5 Preparation of Budget Plan
1.6 Self-Assessment Questions
1.0 Objectives
After Completing this Chapter, you will be able to:

Know the definition and nature of management control.

Determine the method control system.

Understand the role of budget in planning and control.
1.1 Introduction
Based on the cartoon presented on the springboard, what do you think is their
main problem? Have they been looking for solutions? What so you think they could
have done to get the desired result?
Control, it is the last function of any management. The controlling function will be
unnecessary to the management if other function of management is performed
properly. In this lesson, we will discuss the nature of management control. The link
between planning and control methods system, application of management control
and the role of the budget in planning and control.
1.2 Definition and Nature of Management Control
According to Knootz & O’Donnell, “Controlling is the measurement of
accomplishment against the standards and the correction f deviations to assure
attainment of objectives according to plans”.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 43
ABM_OM- Organization and Management
Henry Fayol, “Control consists in verifying whether everything occurs in
conformity, is with the plans adopted the instructions issued and principles
established. I have for its object to point out weaknesses and errors to rectify them
and prevent recurrence.”
Mc Farland, “The presence in a business of that force which guides it to a predetermined objective using pre- determined policies and decisions.”
Control is a continuous process and considered to be the most important function
of management. It is a pervasive function of management as it is performed in all
organizations (business and non- business) and at all the managerial levels. It is the
function of management under which every manager at every level assures that the actual
progress is in conformity with the plans.
1.3 Control Methods and System
Control techniques or methods are descried as either quantitative or non-quantitative.
 The Budgetary Control
Budgets are the most widely used control system because the plan and
control resources and revenues are essential to the firm’s health and survival.
 Audits
Internal auditing provides an independent review and appraisal for
accounting, financial and other non- tactical operations. As a management
tool, the audit measures and evaluates the effectiveness of management
controls.
 Performance Standards
A performance standard is a management-approved expression of the
performance threshold(s), requirement(s), or expectation(s) that must be met
to be appraised at a particular level of performance. A Fully Successful (or
equivalent) standard must be established for each critical element and
included in the employee performance plan. If other levels of performance are
used by the appraisal program, writing standards for those levels and
including them in the performance plan is not required by is encouraged so
that employees will know what they have to do to meet standards higher than
Fully Successful.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 44
ABM_OM- Organization and Management
1.4 The Role of budgeting in Planning and Control
Budgeting plays a crucial role in planning and control.
 Budgets are the quantitative expressions of plans that identify an
organization’s objectives and the actions needed to achieve them. They form
the basis for operations.
 Control is the process of setting standards, receiving feedback on actual
performance, and taking corrective action.
 Budgets can be used to compare actual outcomes with planned outcomes.
A.
Purposes of Budgeting
The system of budgets serves as the comprehensive financial plan for the
organization as a whole.
Advantages of budgeting include:
1. Budgeting forces management to plan for the future—to develop an overall
direction for the organization, foresee problems, and develop future
policies.
2. Budgeting helps convey significant information about the resource
capabilities of an organization, making better decisions possible. Example:
A cash budget points out potential shortfalls.
3. Budgeting helps set standards that can control the use of a company’s
resources and control and motivate employees.
4. Budgeting improves the communication of the plans of the organization
to each employee. Budgets also encourage coordination because the
various areas and activities of the organization must all work together to
achieve the stated objectives.
B.
The Budgeting Process
The budgeting process can range from fairly informal to elaborately detailed.
1. Directing and Coordinating
a. The budget director, usually the controller or someone who reports to
the controller, is responsible for coordinating and directing the overall
budgeting process.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 45
ABM_OM- Organization and Management
b. The budget committee has the responsibility to oversee the
budgeting process that will:
 Review the budget.
 Provide policy guidelines and budgetary goals.
 Resolve differences that may arise as the budget is prepared.
 Approve the final budget.
At this point, the final budget becomes the plan for the coming year.
Then, the budget committee will:
 Monitor the actual performance of the organization as the year
unfolds.
 Ensure that the budget is linked to the strategic plan of the
organization.
2. Building the Master Budget
a. The master budget is a comprehensive financial plan made up of
various individual departmental and activity budgets for the year. A
master budget can be divided into:
(1) Operating budgets, which outline the income-generating activities
of a firm (sales, production, and finished goods inventories).
 The outcome of the operating budgets is a pro format
(budgeted) income statement.
(2) Financial budgets, which outline the inflows and outflows of cash
and the financial position.
 The outcome of the financial budgets includes a cash budget
and a pro format (budgeted) balance sheet.
The master budget is usually prepared for a one-year period
corresponding to the company’s fiscal year.
The yearly master budget can be broken down into quarterly and
monthly budgets to allow managers to compare actual data with
budgeted data as the year unfolds and to make timely corrections.
b. A continuous (or rolling) budget is a moving 12-month budget.
As a month expires in the budget, an additional month in the future is
added so that the company always has a 12-month plan on hand.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 46
ABM_OM- Organization and Management
c. A continuously updated budget updates the master budget each month
as new information becomes available.
It works like a rolling forecast that provides year-to-date results and the
forecast for the remainder of the year.
C.
Gathering Information for Budgeting
The primary sources of data that are used to create budgets include:
1. Historical Data
Based on their knowledge of coming events, managers can use historical
data from similar previous situations to predict costs.
2. Sales Forecasts
The sales forecast is the basis for all of the other operating budgets and
most of the financial budgets. Thus, it is important to have accurate sales
forecasts. The accuracy of the sales forecast can be improved by:
 Considering external factors, such as the general economic climate,
competition, advertising, and pricing policies.
 Using formal approaches, such as time-series analysis, correlation
analysis, econometric modeling, and industry analysis.
3. Forecasting Other Variables
 Costs and cash-related items are critical.
 Many of the same factors considered in sales forecasting apply to cost
forecasting.
Preparing the Operating Budget
The first part of the master budget is the operating budget. The components of the
operating budget include the following:
A.
The sales budget is the projection approved by the budget committee that
describes expected sales for each product in units and dollars for the coming
period.
 The sales budget may reveal seasonal fluctuations in sales.
Sales = Units × Unit selling price
B.
The production budget describes how many units must be produced to
meet sales needs and satisfy ending inventory requirements.
 The production budget must consider the company’s inventory policy and,
thus, the beginning inventory and desirable ending inventory levels.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 47
ABM_OM- Organization and Management
Units to be produced = Ending inventory units + Unit’s sales –
Beginning inventory units
C.
The direct materials purchases budget outlines the expected usage of
materials for production, inventories, and purchases of the direct materials
required.
The direct materials usage is determined by the input-output relationship of
each product as follows:
Expected DM usage = DM units needed per unit of output × Units of output
Budgeted DM purchases in units = Desired ending DM units + Expected DM usage –
Beginning DM units
DM purchase costs = Budgeted DM purchases in units × Unit price
Note that a separate schedule is prepared for each kind of direct material.
D.
The direct labor budget shows the total direct labor hours needed and the
associated cost based on the input-output relationship of each product.
Expected DL hours = DL hours needed per unit of output × Units of
output
DL costs = Expected DL hours × Wage rate
E. The overhead budget shows the expected cost of all indirect manufacturing
items.
 The estimated overhead is divided into variable and fixed components:
Total overhead = (Variable overhead rate × Activity level per chosen cost driver)
+ Budgeted total fixed overhead
F.
The ending finished goods inventory budget supplies information needed
for the balance sheet and serves as input for the preparation of the cost of
goods sold budget.
 It provides information for the unit cost of a finished product and the cost
of the expected inventories.
G. The cost of goods sold budget provides the information needed for the pro
forma income statement.
H.
The marketing expense budget outlines planned expenditures for selling
and distribution activities.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 48
ABM_OM- Organization and Management
 The estimated marketing expense is divided into variable and fixed
components:
Total marketing expense = (Variable marketing rate × Sales activity
level)
+ Budgeted total fixed marketing expenses
I.
The research and development expense budget outlines the estimated
expenditures of research and development activities for the coming year.
J.
The administrative expense budget consists of estimated expenditures for
the overall organization and operation of the company.
 Most of the administrative expenses are fixed costs with respect to sales.
K.
III.
The budgeted income statement is based on all of the component budgets.
Preparing the Financial Budget
The financial budgets are the second part of the master budget. The financial
budgets usually include the cash budget, the budgeted balance sheet, the
budgeted statement of cash flows, and the budget for capital expenditures.
 Note that the master budget and the associated financial budget are plans for
one year.
 The capital expenditures budget is a financial plan outlining the expected
acquisition of long-term assets, typically over a number of years.
A.
The Cash Budget
The cash budget is a detailed plan that shows all expected sources and uses
of cash. Much of the information needed to prepare the cash budget comes
from the operating budgets.
The cash budget includes five main sections:
1. The total cash available section shows that:
Total cash available = Beginning balance + Cash receipts
Cash receipts include primarily:
a. Cash sales.
b. Collection from sales on account (credit sales).
 The collection pattern of credit sales can be determined by past
experience using an accounts receivable aging schedule.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 49
ABM_OM- Organization and Management
2. The total cash disbursements section includes all planned cash outlays for
the
period, including the purchase of materials, payment of wages, and payment
of other
expenses.
The cash disbursements section does not include:
a. Interest payment on short-term loans (these appear in the financing
section).
b. Non-cash expenses such as depreciation.
3. The cash excess or deficiency section compares the cash available with
the cash needed.
Total cash needed = Total cash disbursements + Minimum cash
balance
The minimum cash balance is the lowest amount of cash on hand that the
firm finds acceptable.
4. The financing section of the cash budget consists of:
a. Borrowings.
b. Planned repayments, including interest.
5. The planned ending cash balance section reflects the inclusion of the
minimum cash balance, which was subtracted to find the cash excess or
deficiency.
B.
Budgeted Balance Sheet
The preparation of the budgeted balance sheet depends on information from
the current balance sheet and the information in the other budgets in the
master budget.
IV. Reviewing the Budget
Budgets aren’t simply a means of getting a grant. They also act as a guide during the
year as to whether you are spending your money as planned, it will also warn you if you
are under or over spending in unexpected areas. Your committee should look at your
budget every month to check spending against income and review your fund-raising
activities if necessary
Prepared by: Lace U. Medina, LPT [August 2021]
Page 50
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #7: Financial Management Application
Written Task Covered: Chapter 7
Name: _______________________________ Grade level & Strand: _____________
Direction: Make a budget of your household expenses using the template provided. (100 points)
Monthly Budget
Items
Budget Amount
Actual Amount
Difference
Notes
INCOME
Income Total
Other income
EXPENSES
Mortgage/ Rent
Electricity
Water
Gas
Clothing
Groceries
Other
SAVINGS
Retirement
College
Basic/ Other
Totals
Total Income- Total Expenses =P____________________________________
Prepared by: Lace U. Medina, LPT [August 2021]
Page 51
ABM_OM- Organization and Management
Chapter 8: Functional Areas of Management
Structure of the Chapter:
1.0 Objectives
1.1 Introduction
1.2 Human Resource Management
1.3 Marketing Management
1.4 Operations Management
1.5 Financial Management
1.6 Material and Procurement Management
1.7 Office Management
1.8 Information & Communication Technology
1.9 Self-Assessment
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand the nature and role of the functional areas of management.
1.1 Introduction
Behind every successful organization is strong management system. The strength of
an organization is its manpower who were hired, trained and equipped based on their skill
and competencies.
Every single organization is working the basic and necessary department properly.
Each of this department is working interrelated and interacted during the operation of an
organization.
1.2 Human Resource Management
Human resources, also known as human capital, drive the performance of organizations
along with other resources: hence understanding the HRM functions of management is
very important. These include:
Prepared by: Lace U. Medina, LPT [August 2021]
Page 52
ABM_OM- Organization and Management
 Conducting Job Analysis
 Planning Labor Need and
Recruiting
 Selecting Candidates for the job
 Orienting and training new
employees
 Managing Compensation of Pay
 Providing Incentives and
Benefits
 Evaluating Employees
Performance
 Communicating or performance
appraisal
 Training and Development of
Employee
 Building Employee Commitment
 Providing good working
conditions
 Handling grievances and
Industrial relations
 Record Keeping
1.3 Marketing Management
The marketing management functions of management include the following:
1. Analyses, planning, implementing, and controlling of goods, services, and
ideas to create exchanges that satisfy customer needs and company goals.
2. Management of marketing resources.
3. Analyze, plan, and implement marketing programs that aim to bring about an
expected level and mix of business deals with target markets.
4. Stimulate demands for the products of the company.
5. Make crucial decisions that will ensure the company’s competitiveness.
6. Make sure that marketing techniques employed are efficient, effective, and
socially responsible or ethical.
Conducting Market Research
Marketing Research enables these managers to identify new market opportunities,
helping the organization create a market niche for its products or services. Market
research also involves studying the organization’s competitors so as to develop superior
products and employ efficient marketing techniques.
Developing the Marketing Strategy
Strategies are outline clearly as to how an organization will promote its products and
services to its target market with an aim of increasing its sales volumes and maintaining
a competitive edge over its competitors.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 53
ABM_OM- Organization and Management
Customers Relationship Management
The marketing manager performs the function of championing customer relationship
management in the organization. The marketing manager collects this information from
the organization’s customer database to help create a customer satisfaction survey.
Employee Management
Marketing Managers assign duties and set targets for departmental staff. It is also the
function of marketing managers to perform periodic performance evaluations of the staff.
Identifying new Business Opportunities
Marketing managers analyze trends with an aim of identifying unexploited or new
markets for the organization’s products and services. Through studying the purchasing
patterns of consumers, they can identify the peak and off- peak demand periods for their
products. By employing sales forecasting, they can estimate future performance of the
organization’s products.
1.4 Operations Management
Business managers today focus on productivity, technology use, quality of goods and
services, customer satisfaction, and speed.They are conscious that they need to innovate
on their processes and activities in order to succeed in a highly competitive globalized
market. Because of these, the operations management functions of management must
include the following:
 Overseeing the transformation processes that change resources into finished
goods and services.
 Improvement of productivity and competitive advantage.
 Managing the sequence of activities and information along the whole course
of the value chain.
Productivity measures the efficiency by which inputs are turned into outputs. The basic
equation of productivity:
Productivity = Output ÷Input
Through the study of the essentials of operations management, businesses of different
types and sizes may increase their chances of survival and success in today’s business
environment which is characterized by intense competition and desire for innovative
quality products and services.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 54
ABM_OM- Organization and Management
1.5 Financial Management
Gaining profit is the main goal of businesses. To attain this goal, managers must be able
to practice good financial management and this, of course, starts with understanding the
financial management functions of management. These functions include:
 Taking charge of the company’s financial policies and strategies, Investments, capital
structures, and dividend policies.
 Financial management and control (Financial and Dividend decisions).
 Financial Planning (Investment decisions)
Objectives of Financial Management
 To ensure regular and adequate supply of funds to the concern.
 To ensure adequate returns to the shareholders which will depend on upon
the earning capacity, the market price of the share, expectations of the
shareholders.
 To ensure optimum funds utilization. Once the funds are procured, they
should be utilized in the maximum possible way at least cost.
 To ensure safety on investment, I.e. funds should be invested in safe ventures
so that adequate rate of return can be achieved.
 To plan a sound capital structure- there should be rational and fair
composition of capital so that balance is maintained between debt and equity
capital.
1.6 Material & Procurement Management
 It is the process of planning, organizing, staffing, directing and controlling the
procurement activities.
 It is important to consider the procedure in the proper delivery of materials and
supplies at the right place, at the right time from the right place.
a. Purchasing- process of buying, identifying the need, selecting supplies,
negotiating prices, and following up to insure effective delivery.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 55
ABM_OM- Organization and Management
b. Procurement- encompasses broader areas and covers the responsibilities
performed by purchasing, such as inventory control receiving, incoming
inspection and salvage operations. Covers production control, traffic and
shipping.
Importance of Procurement
a. Proper utilization of money is extremely important to the survival of every
individual and company.
b. Purchased materials and services include the biggest part of expenditure in most
companies.
c. The investment in raw materials, part, and supplies inventory in some companies
is essential and the efficient management of such inventory can contribute to
profit.
1.7 Office Management
 It is the process of planning, organizing, staffing, directing, and controlling office
activities and those performing them in order to achieve determined objectives
 It covers managerial efforts over office work anywhere in the company.
 Filing records and reports, handling incoming and
Activities in Office Management
out going mail/ call
Determining action to accomplish
Selecting office methods and procedures, selecting office
at work
location
Providing effective office
organization
Delegating authority, knowing individual jobs
Inspiring Office personnel
Motivating office employees, giving adequate supervision
Importance of Office Management

Achievement of goals

Increases office efficiency

Smooth flow of work

Public relations

Minimization of cost
Prepared by: Lace U. Medina, LPT [August 2021]
Page 56
ABM_OM- Organization and Management

Managing cost
 New challenge
1.8 Information and Communication Technology Management
Information technology (IT) has become a vital and integral part of every business
plan. From multinational corporations who maintain mainframe system and databases to
small businesses that own a single computer, IT plays a role. The reasons for the
omnipresent use of computer technology in business can best be determined by looking
at how it is being across the business world.
The critical factors that should be considered in the management of technology
include.
1. Anticipated market receptiveness, or answers to questions on
need for the new product or service and its applications;
satisfying the
2. Technology feasibility, or the necessities required to hurdle technical
obstacles for implementing or completing an innovation;
3. Economic viability, or the financial feasibility of the new product or
service to ensurer its adoption by end-users;
4. Anticipated competency development, or the
competencies to allow for adoption of the innovation; and
need
to
develop
5. Organizational sustainability, which addresses the cultural issues and
management systems of an organization that guarantee adoption of innovation.
The chief technology officer (CTO) position has seen increasing acceptance in recent
years. The position is tasked to managed the information technology function of an
organization. CTOs have critical positions as they are often directly in touch with the
external partners of an enterprise. They are tasked to integrate the said external
information with the internal goals of the organization
Prepared by: Lace U. Medina, LPT [August 2021]
Page 57
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task #3- ESSAY TYPE
Written Task Covered: Chapter 8
Name: _______________________________Grade/Strand/Section: __________
Instruction: Select one among the functional areas of management for your
future career path and write your ideas or plans in the box provided below. (100
points)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 58
ABM_OM- Organization and Management
Chapter 9: Small Family Business
Structure of the Chapter:
1.0 Objectives
1.1 Introduction
1.2 The Family Business
1.3 Start- up
1.4 Buyout
1.5 Role of Business in the Economy
1.6 Why do business in the Philippines
1.7 Self-Assessment
1.0 Learning Objectives
After Completing this Chapter, you will be able to:

Understand and explain the special topics in business
organizations.

Communicate and describe the special topics to current issues.
1.1 Introduction
Many times, our basic physiological needs are satisfied with income from
employment. However, the expanded need to satisfy family usually calls for
more income that salaried jobs cannot provide. As we move up the hierarchy
of needs, we desire to extend to others for their material needs. As we look
around, at the present time, successful businesses are into corporate social
responsibility (CSR) which means that beyond individual and family needs, they
have more resources which they are willing to share with others.
The motivation to go into business is so attractive. To some it is easy but to
other it may be difficult. To the children, family business may be an easy way
to be in business. Hopefully the children may be as motivated as their parents
who hand to them the “ready-made” business.
1.2 The family business
The family business is an entity in which members of the family are directly
involved in its operations. Ownership is within the family. The Family values
affect business decisions. Relationship among members of the family affects
the functioning of the organization. Generations of family business exist. Young
Prepared by: Lace U. Medina, LPT [August 2021]
Page 59
ABM_OM- Organization and Management
family members plan for their participation in their parents’ business while
pursuing the academic studies. Participation may be full time or part time.
Advantages of Family Business
 Willingness of family members to sacrifice when the need arises
like foregoing perks, freezing salary adjustments, extending
working hours.
 Strong family relationship and values influence company culture
more by doing than talking.
 Desire to preserve family asset and desire to preserve family
reputation impact positively on the business.
 Family name is itself an advertisement for commitment to quality
and value of product and service.
 Family name is symbol of high ethical standard.
 Positive results from collaboration of family members.
Disadvantages of Family Business:
 Passing the leadership from one generation to the next is
complicated. It entails legal, tax, and relationship problems.
 Professional abilities may better be obtained from non-family
members.
 Successors may find it difficult to introduce changes.
 Extended working hours of parents put pressure on their children.
 Differences in opinion on business matters may strain family life.
 Tendency to push hesitant children to family business careers.
 Sibling and in-laws rivalry.
 Family members not active in the business have stake as partial
owners.
 Family feuds threaten employees who are non-family members.
1.3 Start up
Sources of Startup ideas;
 The family business
 Suggestion
 Friends and relatives
 Education / profession
 Hobby
 Prior work experience
Prepared by: Lace U. Medina, LPT [August 2021]
Page 60
ABM_OM- Organization and Management
1.4 Buyout
Buyout is acquiring an existing business. An investor wishing to have a
business with quick start up time would not start from scratch. For quick start,
one opts to buyout somebody’s business. He does this for the following
reasons:
1. To reduce uncertainties;
2. To obtain the existing business at a price lower than starting from the
ground considering that start up period is also a cost; and
3. To obtain an operating business with demonstrated ability to earn profit.
The investor wanting to buy an existing business needs to contract
matchmakers or brokers who provide leads for “business for sale”. the investor
or buyer should:
A. Investigate and evaluate the “business for sale”.
B. Know why the business is for sale
C. Determine the integrity of the seller;
D. Examine the financial data;
E. Determine the fair value of the business; and
F. Consult accountants and lawyers.
1.5 Role of Business in the Economy
Businesses provide jobs to the population who in turn are able to buy goods
and services. Businesses pay taxes, that finance government spending for
infrastructures and operations. Goods produced and services rendered satisfy
the needs of consumers. Business introduces new products and innovations
that improve standards of living. Economic competition drives businesses to act
socially desirable manner.
1.6 Why do business in the Philippines?
It has often been said that the Filipino people is the country’s primary asset.
The more than one hundred million population is a huge domestic market for
consumer goods. The proficiency with the English language makes the Filipinos
highly trainable. Incentives to entice foreign investors are in place. Privatization
and deregulation add sustainability of businesses. The Philippines is one of the
most exciting emerging economies in the world. Inflation is controlled and gross
domestic product (GDP) per capita grows at double dig
Prepared by: Lace U. Medina, LPT [August 2021]
Page 61
ABM_OM- Organization and Management
ACTIVITY SHEET
Written Task - ESSAY TYPE
Written Task Covered: Chapter 9
Name: _______________________________Grade/Strand/Section: __________
Instruction: Read the case carefully and answer the question briefly and substantially.
Scenario:
Imagine that your mom owns the company you work for. You're heading the advertising
department and have a unique, innovative idea for the next marketing campaign.
When you pitch the idea to your mom, however, she's less than enthusiastic. And instead of
bringing up impersonal, practical reasons for not going along with your idea, she brings up
mistakes you made years ago, before you even started working for the company.
Question:
What solution would you do in order to be an effective contributor for the success of your family
business even with this kind of situation? (20 points)
Prepared by: Lace U. Medina, LPT [August 2021]
Page 62
ABM_OM- Organization and Management
ACTIVITY SHEET
Performance Task
Performance Task Covered: Chapter 1-9
Name: _______________________________Grade/Strand/Section: __________
Instruction: Read the task carefully.
You are a famous manager of a popular company whose products and services
are being used by millions of people every day. You are to attend a Symposium along with
other managers, i.e., your classmates, in order to share with each other about yourselves,
the qualities of a manager that you think are most important in running a company in your
respective capacities, and to give advice to the online viewers of the Symposium, who are
young and inexperienced managers.
The challenge given to you is to assume the position and standing of a successful
manager and put yourselves in their roles in the said Symposium, in order to show each
other the strengths and weaknesses of different types of businessmen. You will need to
embody the personae of one famous manager, without duplicates from your classmates,
and make the pertinent expressions during the Symposium.
You will be judged according to the following criteria:
(1) accuracy of your depiction of your chosen manager’s policy, ideology,
and business philosophy,
(2) effective communication of your depiction to your classmates, and
(3) minor points in creativity.
Prepared by: Lace U. Medina, LPT [August 2021]
Page 63
ABM_OM- Organization and Management
Suggested Readings/ References
 Orlajo,V.G., Frias,S.A & Pefianco, E.C. (n.d.). Organization and Management:
Concepts, Caselets and Exercises. Quezon City: Pheonix Publishing House.
 Williams, C. (n.d.). Organization and Management Concepts and Application.
ABIVA.
 Enriquez, E. Organization and Management.JFS Publisihing Services
Prepared by: Lace U. Medina, LPT [August 2021]
Page 64