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A. MANAGEMENT AND ORGANIZATION CORE

B.1 Significance and Definition of Management

Management is a crucial part of all types of

organization whether business, governmental, social “Management is a practice where
institutions, etc. therefore, it is universal to begin with. Science, Art, and Craft meet”
In a practical view, its essence is intensely observed as
it directly affects the life of all individuals in the
workplace. In a broader spectrum, management practices determine the development of a nation.
In the context of an institution, understanding the essence of good management benefits
both the managers and the employees. Managerial skills and experience help managers to deliver
his function effectively and efficiently. Equally, knowledge in the essence and basics of
management enables employees and managers to understand each other’s behavior thereby helping
them to have favorable and quality communication.
The following are some of the often-quoted definitions of Management as defined by
various authors/authorities:
“Management is a multipurpose organ that manages the business and the managers, at the
same time manages the workers and the work” - Management Guru, Peter Drucker
“Management is the art of getting things done through and with people in formally
organized groups.” - Harold Koontz
“Management is the process of coordinating all resources through Planning, Organizing,
Staffing, Leading and Controlling to achieve Organizational objectives. – Medina, 2006
“Management is essentially the bringing together these resources within an organization
towards reaching objectives of an organization. It is the process of attaining organizational
objective in an efficient and effective manner.” – Ababa, 2014
*Efficiency is getting the most output from the least amount of inputs in order to minimize resource
costs. Efficiency is often referred to as ―doing the things right
*Effectiveness is completing activities so that organizational goals are attained and is often
described as ―doing the right things

The significance of management can be considered from three perspectives.

1. Development of the nation. Management affects socio-economic and political development. The
development of a nation is closely related to management practices. Keeping other things
constant, good management practices enable all organizations in the nation to achieve their
respective goals effectively and efficiently. Thus, these organizations could be able to
contribute national development.

2. From Managers perspective. The study of management for those who aspire to assume
managerial position provides the body of knowledge and skills that equips them to act,
decide, solve, communicate effectively

3.From non- managerial perspective. For those who do not plan careers in management, the study
of management can give them a great deal of insight and understanding into the way their
superiors (managers) behave and the internal activities of the organization. This will enable
them to work successfully with them.

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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B.2 Characteristics and Nature of Management
1. Goal and Application oriented
Management is not an end in itself. It is a means to achieve certain goals. Management has
no justification to exist without goals and achieving goals certain theories and principles must be
applied. The basic goal of management is to ensure efficiency and economy in the utilization of
human, physical, and financial resources. The success of management is measured by the extent
to which the established goals are achieved.
2. Universal
Management is an essential element of every organized activity irrespective of the size or
the type of the activity.
3. Continuous process
The cycle of the management continues to operate as long as there is organized action for
the achievement of group goals. Management is an ongoing process and is also a never ending
process. Management is dynamic and the cycle is continues.
4. Multi-disciplinary
Management techniques, principles and theories are drawn from other disciplines such as
engineering, anthropology, sociology and psychology. It depends on wide knowledge and practice
derived from various discipline.
5. Intangible force
Management is evidenced by the results of its efforts through others. Management is
unseen and invisible force. It cannot be seen, but its presence can be felt in the form of results in
very type of organization.
6. Situational
There is no best way of doing things. To solve a particular problems conditions and
situations must be taken into account.
7. System of authority
Management provides the direction of every activity of an organization. Management
forms system of authority or a hierarchy of command to control the activities and give smooth
direction.
6. A science and an Art
Science is a systematized body of knowledge based on certain principles that are generally
applied. Scientific knowledge is observed through the process of critical and continuous
observation and intelligent speculation. Accordingly, management is based on principles instead
of a traditional way of doing things in trial and error method.
Art is the application of obtained knowledge and skills to bring about the results. Although
it is based on the knowledge of principles as developed by science, it is not developed for the sake
of knowledge alone but for the application to specific situations. Delivering results or applying
managerial skills often requires the perfect match of customization and timing of delivery which
is usually linked to art in general.
Science urges us to observe and experiment a phenomenon, while art teaches us the
application of human skill and imagination to the same. Attaining success requires a unique
combination of both. The art of managing begins when the science of managing stops. As the
science of managing is imperfect, the manager turn to artistic managerial ability to perform
satisfactorily.
Key Points:
 Organization and management are inseparable
 Management is defined in many ways
 The significance of management is perceived in various aspects
 Management encompasses everything

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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Supplemental learning through a video on Management Principles

What is Management?
By: ThingsYouNeedToKnowAbout

Video link: https://youtu.be/_OBqwhYLEJo

B.3 Principles of Management

Henry Fayol, the Father of Classical Management Theory

or the Administrative Management pioneered what we refer
today as the 14 Management Principles. These universal
principles of management are aimed at showing managers how
to carry out their functional duties.

PRINCIPLE ORGANIZATIONAL MEANING

1. Division of labor The concept of specialization of work. This improves the efficiency of
labor, reducing labor time and increasing skill development. It refers to
breaking down large tasks into their components parts and assigning
workers to each part. It suggests the more people specialize; the more
efficiently they can perform their job
2. Authority The right to give orders and the power to exact obedience. Managers
must give order so that they can get things done. This on the other hand
carry responsibility commensurate with its privileges.
3. Discipline Relies on respect for the rules, policies, and agreements that govern an
organization. This pertains to the display of expected uniform behaviors
which requires good superiors.
4. Unity of Subordinates should receive orders/ instructions from one superior only,
command thus avoiding confusion and conflict of authority.
5. Unity of There should be unity in the directions given by a boss to his
direction subordinates. There should not be any conflicting ideas in the directions
set by the varying managers in the organization. Strategic direction is
usually expressed in the unified Vision, Mission, Goal, etc.
6. Subordination of The needs/ interests of individuals and groups within an organization
individual interest should not take precedence over the needs of the organization as a whole.
to the general The interest of the organization must be considered at all times rather
(common) interest than the interest of one person or group.
7. Remuneration Wages and other forms of compensation should be equitable and
satisfactory to employees and superiors for services rendered. It should
be both fair to employees and employers.

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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8. Centralization Process of concentrating/ centralizing decision-making authority/ power
at the topmost management. Decreasing the role of mid-level
management/subordinates in decision-making is centralization:
increasing the role is decentralization. Fayol believed management
should retain final responsibility, but should at the sometime give their
subordinates enough authority to do their jobs properly. However it
should be noted that no level of centralization or decentralization is ideal
for all types of organizations or situations.
9. Scalar Chain/ The relationship among all levels in the organizational hierarchy and
Scale of chain exact lines of authority should be unmistakably clear and followed at all
times, excepting special circumstances when some departure might be
necessary. This implies observance of the chain of supervisors ranging
from the ultimate authority to the lowest ranks. Hierarchy refers to the
line of authority from top level management to lower level management.
10. Order There should be a place for everything, and everything should be in its
place. This entails proper arrangement of things and people. Materials
and people should be in the right place at the right time. People, in
particular, should be in the jobs or positions they are best suited to.
11. Equity Employees should be treated equitably in order to elicit loyalty and
devotion from personnel. This combines the expected kindliness,
fairness, and justice expected by subordinates from Managers.
12. Stability of This means creating a system of suitability for permanent status among
tenure employees. High employee turnover rate undermines the efficient
functioning of an organization more than the bad image and costs
attached to it.
13. Initiative Subordinates should be encouraged to conceive and carryout ideas or to
act in their own volition. They should also be given freedom to carry
their plans within the bounds of their work.
14. Esprit de corps Team work, a sense of unity and harmony, should be fostered and
maintained. Fayol, suggested the use of verbal communication instead
of formal written whenever possible.

Supplemental learning through a video on the 14 Principles of Management

14 Principles of Management

Link:
https://youtu.be/aMwm2zq1KrI

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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B.4 Importance and Definition of Organization
An organization is a deliberate arrangement of people to accomplish some specific
purpose. Organizations share three common characteristics: (1) Each has a distinct purpose (2)
Each is composed of people (3) Each develops some deliberate structure so members can do
their work. There are many types of organizations, which may, for example, be classified as
either for-profit or not-for profit (non-profit).

Importance of Organization
i). Organizations serve society.
This is because organizations are social institutions that reflect certain culturally
accepted values and needs. They allow people to live together in a civilized way and to
accomplish goals as a society. They serve society by making the world a better and safer
and more pleasant place to live.
ii). Organizations accomplish objectives.
Organizations enable the society to reach certain specified goals that would
otherwise be much harder or even impossible to achieve.
iii). Organizations preserve knowledge.
Organizations such Universities and museums are essential because they store
and protect most of important knowledge the civilization of the world has gathered. They
serve as a bridge between past, present and future generations. They also add knowledge
by developing new and more efficient ways of doing things.
iv). Organizations provide careers.
They provide their employees with a source of livelihood, personal satisfaction,
and self-fulfillment.
Note: Organizations are frame works for management. Decisions are made in organizations rather
than by individuals acting single. This implies organization and Management are inseparable. In
other wards organizations are critical for management to exist and management is also critical for
organization to survive.

B.5 Organizational Environments

The External Environment
All outside factors that may affect an organization make up the external
environment. The external environment is divided into two parts:

i. Directly interactive (Micro/ Task Environment): This environment has an immediate

and firsthand impact upon the organization. A new competitor entering the market is an
example.
ii. Indirectly interactive (Macro/ General Environment):: This environment has a
secondary and more distant effect upon the organization. New legislation taking effect
may have a great impact. For example, employment Act requires employers to update
their facilities to accommodate those with disabilities.

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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The following sections describe these two forces in more detail.

Directly interactive forces (Micro/ Task environment)
Directly interactive forces include customers, suppliers, strategic allies, and
competitors. Management has a responsibility to each of these groups.

 Customers demand satisfaction with the products and services they purchase and use.
 Suppliers require attentive communication, payment, and a strong working relationship
to provide needed resources.
 Performance of strategic allies affects the over-all performance of the company
 Competitors present challenges as they vie for customers in a marketplace with similar
products or services.

Indirectly interactive forces (Macro/ General Environment)

These forces include socio-cultural, political and legal, technological, economic,

and global influences. Indirectly interactive forces may impact one organization more than
another simply because of the nature of a particular business. For example, a company that
relies heavily on technology will be more affected by software updates than a company
that uses just one computer.

a) The socio-cultural dimension is especially important because it determines the goods,

services, and standards that society values. This includes the demographics and values
of a particular customer base. Demographics are measures of the various characteristics
of the people and social groups who make up a society. Age, gender, and income are
examples of commonly used demographic characteristics. Values refer to certain beliefs
that people have about different forms of behavior or products. Changes in how a society
values an item or a behavior can greatly affect a business.
b) The political and legal dimensions include regulatory parameters within which an
organization must operate. Political parties create or influence laws, and business
owners must abide by these laws. Tax policies, trade regulations, and minimum wage
legislation are just a few examples of political and legal issues that may affect the way
an organization operates.
c) The technological dimension impacts the scientific processes used in changing inputs
(resources, labor, money) to outputs (goods and services). The success of many
organizations depends on how well they identify and respond to external technological
changes. For example, one of the most significant technological dimensions of the last
several decades has been the increasing availability and affordability of management
information systems .Through these systems, managers have access to information that
can improve the way they operate and manage their businesses.
d) The economic dimension reflects worldwide financial conditions. Certain economic
conditions of special concern to organizations include interest rates, inflation,
unemployment rates, gross national product, and the comparative value of currencies. A
favorable economic climate generally represents opportunities for growth in many
industries, such as sales of clothing, jewelry, and new cars. But some businesses
traditionally benefit in poor economic conditions. The alcoholic beverage industry, for
example, traditionally fares well during times of economic downturn.

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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e) The global dimension refers to factors in other countries that affect organizations in
another country. Although the basic management functions of planning, organizing,
staffing, leading, and controlling are the same whether a company operates domestically
or internationally, managers encounter difficulties and risks on an international scale.
Whether it be unfamiliarity with language or customs, or a problem within the country
itself (think mad cow disease), managers encounter global risks that they probably
wouldn‘t have encountered if they had stayed on their own shores.

The Internal Environment

An organization‘s internal environment is composed of the elements within the
organization, including owners, employees, organization’s strategic direction, and
organizational culture. Although some elements affect the organization, others affect only the
manager. A Manager‘s philosophy and leadership style directly impacts employees.

a. Owners
The owner’s plan, way of life, and personality directly impacts the organization. Owners
need strictly reinforce company administrators and managers to watch over their interests and
provide a return on investments.

b. Employees
The employees’ capabilities; knowledge, skills, experience have direct impact to the
organization. On a more serious note, employee loyalty and commitment significantly helps in
the sustainability of the organization especially in overcoming daily challenges and in
delivering daily operations.

c. Organizational Strategic Direction.

An organization’s strategic direction is primarily reflected in the Vision, Mission, and Core
Values. These can also include other additional elements such as Company Policy, Formal
Structure of the organization, Resources, as well as, Management Philosophies and Leadership
Styles. The direction set by the management directly impacts the behavior, actions, and decision
making of the people working for the organization.

A mission statement describes what the organization stands for and why it exists. It explains the
overall purpose of the organization and includes the attributes that distinguish it from other organizations
of its type. This declaration should be a living, breathing document that provides information and inspiration
for the members of the organization. This statement provides focus for an organization by rallying its
members to work together to achieve its common goals. Effective mission statements lead to effective
efforts. In today‘s quality-conscious and highly competitive environments, an effective mission statement
contains the following elements:
 Customers — who will be served
 Products/services — what will be produced
 Location — where the products/services will be produced
*Mission statements usually and traditionally begins with ‘to’ or something synonymous
in terminology such as ‘aim’ SUCH AS “To live life to the fullest…”

A Vision statement outlines where the firm wants to be. Communicates both the purpose and the
values of the business. It talks about the firm’s future. It lists where the firm see itself some years from now.
It inspires a firm to give its best. It shapes the understanding of the firm. It answers the questions, “What
do we aim to be?” “What do we want to become?” It is intended as a guide to help the organization make
missions and decisions that align with its philosophy and declared set of goals.
*Vision statements usually and traditionally starts with ‘A/an + Noun Phrase’ SUCH
AS “An empowered woman of the society…”
BA 41.Business and Management Integrals.2020
College of Business and Management CENTRAL MINDANAO UNIVERSITY
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Company policies are guidelines that govern how certain organizational situations are
addressed. Just as colleges maintain policies about admittance, grade appeals, prerequisites, and
waivers, companies establish policies to provide guidance to managers who must make decisions
about circumstances that occur frequently within their organization. Company policies are an
indication of an organization‘s personality and should coincide with its mission statement.

Formal structure is the hierarchical arrangement of tasks and people. This structure
determines how information flows within the organization, which departments are responsible for
which activities, and where the decision-making power rests. Some organizations use a chart to
simplify the breakdown of its formal structure. This organizational chart is a pictorial display of
the official lines of authority and communication within an organization.

Resources are the people, information, facilities, infrastructure, machinery, equipment,

supplies, and finances at an organization‘s disposal. People are the paramount resource of all
organizations. Information, facilities, machinery equipment, materials, supplies, and finances are
supporting, nonhuman resources that complement workers in their quests to accomplish the
organization‘s mission statement. The availability of resources and the way that managers value
the human and nonhuman resources impact the organization‘s environment.

Managerial philosophies and Leadership Styles. Management Philosophy is the

manager‘s set of personal beliefs and values about people and work and as such, is something that
the manager can control. The managerial philosophies have a subsequent effect on employee
behavior, leading to the self-fulfilling prophecy. As a result, organizational philosophies and
managerial philosophies need to be in harmony. The number of coworkers involved within a
problem- solving or decision-making process reflects the Leadership Style. Empowerment means
delegating to subordinates decision-making authority, freedom, knowledge, autonomy, and skills.
Fortunately, most organizations and managers are making the move toward the active participation
and teamwork that empowerment entails. When guided properly, an empowered workforce may
lead to heightened productivity and quality, reduced costs, more innovation, improved customer
service, and greater commitment from the employees of the organization. Empowering employees
makes good sense because employees closest to the actual problem to be solved or the customer
to be served can make the necessary decisions more easily than a supervisor or manager removed
from the scene.

d. Organizational cultures.

The organizational culture is an organization‘s personality. Just as each student from this class
has a distinct personality, so does each organization. The culture of an organization
distinguishes it from others and shapes the actions of its members.

ORGANIZATIONAL CULTURE
= SHARED beliefs + values + norms + tangible signs OF THE ORGANIZATION
(norms- behaviors; tangible signs - logo/color/uniform, etc.)

ORGANIZATION

ORGANIZATIONAL CULTURE
*Organizational Culture serves as the foundation of the all the organizations

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY
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Four main components make up an organization‘s culture:
 Values
 Heroes
 Rites and rituals
 Social network

Values are the basic beliefs that define employee successes in an organization. For
example, many universities place high values on professor’s work being published. If a faculty
member’s work is published in a professional journal, for example, his or her chances of
receiving tenure may be enhanced. The university wants to ensure that a published professor
stays with the university for the duration of his or her academic career — and this professor‘s
ability to write for publications is a value.
A hero is an exemplary person who reflects the image, attitudes, or values of the
organization and serves as a role model to other employees. A hero is sometimes the founder of
the organization. However, the hero of a company doesn‘t have to be the founder; it can be an
everyday worker, who had a tremendous impact on the organization.
Rites and rituals are routines or ceremonies that the company uses to recognize high-
performing employees. Awards banquets, company gatherings, and quarterly meetings can
acknowledge distinguished employees for outstanding service. The honorees are meant to
exemplify and inspire all employees of the company during the rest of the year.
The social network is the informal means of communication within an organization.
This network, sometimes referred to as the company grapevine, carries the stories of both heroes
and those who have failed. It is through this network that employees really learn about the
organization‘s culture and values.

Supplemental learning through a video on How Internal and External Factors Drive Organizational Change

Link:

https://youtu.be/ADm3Hdhh34I

Supplemental video on Organizational Culture

Link:

https://youtu.be/4cBN8xH-5Qw

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY