Potestades,Densey E.

BAPR 2-3d
FUNCTIONS OF MANAGEMENT:
PLANNING - Establishment of goals, policies, and procedures for a social, economic
unit.
ORGANIZNG - Involves the establishments of an organizational structure,
determination of the activities required to achieve the goals
STAFFING - Selecting applicants for different position
DIRECTING - Guiding and leading subordinates
CONTROLLING - Checking the work accomplished against plans or standards, and
making adjustments when new developments or unforeseen events necessitates

LEVELS OF MANAGEMENT
TOP LEVELS: Includes: Board of Directors, Chief Executive Office/President, Vice
President, Managing/Executive Director, General Manager
MIDDLE LEVELS: Includes: Production Manager, Sales Managers, Office manager,
Chief Accountant, Chief Cashier, Branch Manager, Chief Personnel
LOWER LEVELS: Includes: Supervisors, foreman, accounts officer, sales officers
14 Principles of Management from Henri Fayol
1. Division of Works: Specialization promotes efficiency of the workforce and
increases productivity. In addition, the specialization of the workforce
increases their accuracy and speed.
2. Authority and Responsibility: the accompanying power or authority gives
the management the right to give orders to the subordinates. The
responsibility can be traced back from performance and it is therefore
necessary to make agreements about this. In other words, authority and
responsibility go together and they are two sides of the same coin.
3. Discipline: This third principle of the 14 principles of management is about
obedience. It is often a part of the core values of a mission and vision in the
form of good conduct and respectful interactions. This management principle
is essential and is seen as the oil to make the engine of an organization run
smoothly.
4. Unity of Command: The management principle Unity of command means
that an individual employee should receive orders from one manager and
that the employee is answerable to that manager. If tasks and related
responsibilities are given to the employee by more than one manager, this

may lead to confusion which may lead to possible conflicts for employees. By
using this principle, the responsibility for mistakes can be established more
easily.
5. Unity of Direction: This management principle of the 14 principles of
management is all about focus and unity. All employees deliver the same
activities that can be linked to the same objectives. All activities must be
carried out by one group that forms a team. These activities must be
described in a plan of action. The manager is ultimately responsible for this
plan and he monitors the progress of the defined and planned activities.
Focus areas are the efforts made by the employees and coordination.
6. Subordination of Individual Interest: In order to have an organization
function well, Henri Fayol indicated that personal interests are subordinate to
the interests of the organization (ethics). The primary focus is on the
organizational objectives and not on those of the individual. This applies to all
levels of the entire organization, including the managers.
7. Remuneration: Motivation and productivity are close to one another as far
as the smooth running of an organization is concerned. This management
principle of the 14 principles of management argues that the remuneration
should be sufficient to keep employees motivated and productive. There are
two types of remuneration namely non-monetary (a compliment, more
responsibilities, credits) and monetary (compensation, bonus or other
financial compensation). Ultimately, it is about rewarding the efforts that
have been made.
8. The Degree of Centralization: Management and authority for decisionmaking process must be properly balanced in an organization. This depends
on the volume and size of an organization including its hierarchy.
Centralization implies the concentration of decision making authority at the
top management (executive board). Sharing of authorities for the decisionmaking process with lower levels (middle and lower management), is referred
to as decentralization by Fayol. Henri Fayol indicated that an organization
should strive for a good balance in this.
9. Scalar Chain: Hierarchy presents itself in any given organization. This varies
from senior management (executive board) to the lowest levels in the
organization. Henri Fayol s hierarchy management principle states that
there should be a clear line in the area of authority (from top to bottom and
all managers at all levels). This can be seen as a type of management
structure. Each employee can contact a manager or a superior in an
emergency without challenging the hierarchy. Especially, when it concerns
reports about calamities to the immediate managers/superiors.
10.
Order: According to this principle of the 14 principles of management,
employees in an organization must have the right resources at their disposal
so that they can function properly in an organization. In addition to social
order (responsibility of the managers) the work environment must be safe,
clean and tidy.

11.
Equity: The management principle of equity often occurs in the core
values of an organization. According to Henri Fayol, employees must be
treated kindly and equally. Employees must be in the right place in the
organization to do things right. Managers should supervise and monitor this
process and they should treat employees fairly and impartially.
12.
Stability of Tenure of Personnel: This management principle of the
14 principles of management represents deployment and managing of
personnel and this should be in balance with the service that is provided from
the organization. Management strives to minimize employee turnover and to
have the right staff in the right place. Focus areas such as frequent change of
position and sufficient development must be managed well.
13.
Initiative: Henri Fayol argued that with this management principle
employees should be allowed to express new ideas. This encourages interest
and involvement and creates added value for the company. Employee
initiatives are a source of strength for the organization. This encourages the
employees to be involved and interested.
14.
Esprit de Corps: The management principle esprit de corps of the
14 principles of management stands for striving for the involvement and
unity of the employees. Managers are responsible for the development of
morale in the workplace; individually and in the area of communication.
Esprit de corps contributes to the development of the culture and creates an
atmosphere of mutual trust and understanding.

STEPS IN ORGANIZING BUSINESS ORGANIZATION

1. Outlining the objectives.
The main objective of business organization is to gain profit. Other objectives
should be established by the management from time to time to help and support the
main objective. Objectives should be clear, precise and complete because the stability
of the business organization depends on it.
There are important items to know in defining the objectives:
Evaluate the necessity of the organization and the possibility of its
success.
Decide if they are congruent with other objectives.
Estimate the needed money, materials, machines, methods, time, and
the most important is personnel.
Classify the objectives into functional parts to be distributed to a
particular department of implementation.
2. Identification and enumeration of the activities.
Related activities and tasks to be performed shall be group together and to be
distributed to the different functional departments, such as finance, marketing,
production, transportation and etc.
3. Assigning the duties and responsibilities.

Different functional management should now assign personnel who are

responsible to perform the different duties.
4. Delegating the authority.
Delegated authority should be properly explained and well defined. This is to
avoid abuse of authority.
5. Establishing authority relationship.
This involves determination as to who will act under whom, who will be the
subordinate and superior, what will be his span of control and what will be his status in
the organization.
It is clear that nature of an organization is two-fold, as according to M. U.
Qureshi:It is a process of coordination of employees activities in an orderly manner. And
also, it is a framework of relationships.

KINDS OF CORPORATION
1. Quasi corporations. Those are business firms that are not absolutely corporations
but are considered as a corporation.
2. Quasi-public corporation. Is one that engaged in rendering basic services of such
public importance as to entitle it to certain privileges like the use of public property
3. Government-owned or controlled corporations. Those established by government
or corporations of which the government or corporations of which the government is the
majority stockholder.
4. Dejure and de factory corporations. The term de facto corporation is used to
designate associations exercising corporate powers under color of a more or less legal
organization. A Dejure corporation is one created in strict or substantial conformity with
the statutory requirements for incorporation; and whose right to ewist as a corporation
cannot be successfully attacked even in a direct proceeding for that purpose by the
state.
5. Domestic and foreign corporations: a domestic corporation is one incorporated
under Philippine laws; a foreign corporation is one established under any laws other
than those in the Philippine territory.
6. Corporation aggregate and corporation sole: a corporation aggregate is one
composed of more than one member. A corporation sole consists of one member and
his successor.
Principles of Cooperatives

 Open and Voluntary Membership. Membership in a cooperative shall be

voluntary and available to all individuals regardless of their social, political, racial
or religious background or beliefs.
Democratic Control. Cooperatives are democratic organizations. Their affairs
shall be administered by persons elected or appointed in a manner agreed upon
by the members. Members of primary cooperatives shall have equal voting rights
on a one-member-one-vote principle: Provided however, that in the case of
secondary and tertiary cooperatives, the provisions of Article 37 of this Code
shall apply(voting system)
Each member of a primary cooperative shall have only one (1) vote. A secondary
tertiary cooperative shall have voting rights as delegate of memberscooperatives, but such cooperatives shall have only five (5) votes. The votes cast
by the members thereof.
No voting agreement or other divide to evade the one-member-one-vote
provisions, except as proceeded under subsection (1) hereof, shall be valid

STRATEGIES TO EFFECTIVE COMMUNICATION

Clarity and Completeness

Proper Language
Proper Channel or Medium
Sound Organization Structure
Training and Development of Employees
Effective Listening
Consultation and Participation
Motivation, Mutual Trust and Confidence
Integrity Factor
Use of Formal Communication
Effective Feedback Mechanism
Proper Gesture and Tone

TYPES OF ORGANIZATIONAL FORMS OF PRIVATE/COMMERCIAL

1. Individual or sole proprietorship- a business owned by one person. This form of

ownership is small, requires but little amount of capital and is readily established
under the control of one person. The owner of the business has total and
unlimited personal liability of the debts incurred by a business. Should it prosper
the, all the profits accrue to the owner. The individual or sole proprietorship refers
to an individual who owns, manages, assumes all risk and derives all the
products or profits from a business.

2. Partnership- is a form of business organization where in two or more people

function for a common goal of making profit. It is governed by set of rules called
the Uniform Partnership Act. that states th distribution of equality between
partners in everything including management decision unless there is a written
agreement specifying different arrangements between partners.
3. Corporation- There are more and more group of individuals who are establishing
corporation as a preferable form of conducting business. Maybe the main reason
for this trend lies in the great advantages which the corporate firm possesses
over all the other business ownerships.
Definition of a Corporation
"A corporation is an Artificial Being created by operation of law, having the rights
of succession and the powers, attributes, and properties expressly, authorized by
law or incident to as existence."
4. Cooperatives - comes from the french word Cooperari The word Co means
With and Operari means Work, It delineates the concept of Working
together. The social concept shows a process of working together and thinking
together to achieve and enjoy the best of life.
It signifies the voluntary assent of people to form themselves into a group for the
promotion of their common needs by mutual action, democratic control and
sharing economic benefits on the basis of patronage by members. It is a
business enterprise, like any other business, which has as its primary aim, the
promotion of the economic welfare of its members.