CHAPTER 1 ECONOMICS- is the study of how a society produces and distributes its desired goods and

aervices

BUSINESS - is any activity involved in production and distribution of goods and services.

PROFIT- is the difference between the income an entrepreneur receives from geh sale of his goods and
services and the expenses.

BUSINESS ENTERPRISE- is a part of a larger economic system.

HIERARCHY

1. PHYSIOLOGICAL NEEDS

2. SAFETY AND SECURITY NEEDS

3. LOVE AND BELONGING NEEDS

4. SELF-ESTEEM NEEDS

5. SELF ACTUALIZATION NEEDS

KINDS OF BUSINESS

INDUSTRIES- conservation of raw materials into finished product.

COMMERCE- process of buying and selling

SERVICE ENTERPRISES- primary concern with the satisfaction of needs and wants of the consumer.

KINDS OF ECONOMIC SYSTEM

CAPITALISM- is a system in which thr means of production are owned and operated by private
individuals

SOCIALISM- means the ownership of production and capital by the goverment and the regulation by
society

COMMUNISM- collective ownership by the goverment of consumption goods and production goods.

MEANS OF LIVELIHOOD

1. Hunting and fishing phase

2. Pastoral phase

3. Handicraft phase

4. Agricultural phase
5. Industrial phase

EXTENT OF ECONOMIC ACTIVITY

1. Household economy

2. Village economy

3. National economy

4. Internatinal economy

MEDIUM OF EXCHANGE

1. Barter economy

2. Money economy

3. Money and credit economy

VARIOUS ASPECT OF PROJECT FEASIBILITY STUDY

MARKETING ASPECT- is considered the life blood of virtually all project feasibility studies dor the extent
of the data and information

ORGANIZATION AND MANAGEMENT ASPECT- the overall implementation plan.

TECHNICAL ASPECT- after having determined the market size and area,product demand and growth.
FINANCIAL ASPECT- project feasibility study quantifies the results of the marketing, technical ,
management ,taxation, and legal phases

SOCIO ECONOMIC ASPECT- a proposed venture to be worthy of financing.

EXPORTING- refers to the selling of an organization goods in an other country

IMPORTING - is the purchasing of goods and services from a foreign company.

CHAPTER 2

MANAGEMENT- is defined in so many ways depending upon the text view points, beliefs and
interpretations of the manager.

PLANNING- refers to the formulation of objectives programs policies. Procedures, rules, regulations, in
order to achieve the goals of the business.

• is related to decusion making. It involves the best course of action that a business or other enterprises
and every department will follow
ORGANIZING- is the grouping together of people, establishing relationship among them, and defining
the authority and rsponsibility taht the personel have in use of the company.

STAFFING- involves filling and keeping filled the positions provided in the organization structure.
DIRECTING- has to do with the predominantly interpersonal aspect of managing C

ONTROLLING- is the process of measuring and correcting the activities of subordinates and the company
itself.

HENRI FAYOL- was a french industrialist who was the first to issue a complete statement on a theory of
general management

FREDERICK TAYLOR - Principles of Scientific Management.

PRINCIPLES OF MANAGEMENT BY HENRI FAYOL

1. Division of work- this is the assignment of specialized jobs to various department and / or positions.
2. Authority and responsibility- to be a related and inseperable

3. Unity of command- this means that employees should receive orders from.one superior/ manager
only

4. Subordination of individual interest to general interest- the interest of one employee or group of
employees not prevail over the interest of the business

5. Remuneration- renumeration and method of payment should be fair and afford the maximum
possible satisfaction to employees

6. Centralization- without using the term centralization of authority

7. Scalar chain- fayol thinks of it as chain of superior.

8. Stability of tenure- unnecessary labor turnover

9. Esprit de corps - this pronciples explains that in union there is strength

10. Span of control - it refers to the specific and limited number of subordinates tahat a manager can
effectively handle and control.

11. Simplicity- unnecessary elements should be eleminated from all activities as well as from the
process and procedures

12. Unity of direction- one boss and one plan for group of activities

13. Order- ensures a place for everything

14. Equity- results from kindness and justice8

MODERN MANAGEMENT

TOP MANAGEMENT

MIDDLE MANAGEMENTSUOERVISORY MANAGEMENT

CHAPTER 3 PLANNING

PLANNING- is a logical and systematic approach of formulating the objectives programs, policies
,procedures, budgets, rules , regualations and other types of planning.

NATURE OF PLANNING

1. Contribution to purpose and objectives

2. Planning as the first basic function

3. Planning as a function of all managers

4. Planning for efficient organization

Objectives and Goals are used interchangeably

MISSION- purpose or reason for the existence of an organization

LONG RAND AND SHORT RANGE OBJECTIVES- generally go beyond the current fiscal year of the
organization.

PROGRAM- it is actual course of action designed to carry

POLICIES- these are basic guidelines for action.

PROCEDURES- are series of related steps expressed in chronological order for a specific purpose.

RULES-require specific and defenite action for a given situation

BUDGET-. plan stated in financial terms is called a budget.

PHILOSOPHY- the values and beliefs an organization holds as the guiding light is the company's
philosophy.

STRATEGY- it is a method of shaping a company future

BASIC STEPS IN BUSINESS PLANNING

1. Define the business idea

2. Establish goals and objectives

3. Evaluate the ideas,goals and objectives

4. Forecast cash needs

5. Identify sources of funds

6. Write a business plan.

OTHER TYPES OF PLANS

1.Standing plans- plans serve as guidelinea of managerial action.

2. Single use plans- plans are designed for a specific purposed or period

3. Long range plans- these are strategic plans of the organization

4. Intermidiate plans- plans follow once the long range plans are formulated

5. Short range plans- plans provide guidelines day to day actions

6. Markering plans- common objectives of marketing plans are to increase their present market share
and development neq products.

7. Production plans- focus on producing the desired amount of goods demanded at the market place.

8. Financial plans- provide a quantitative basis for decision making and control.

9. Manpower plans- a systematic way of determining the types of personnel needed in the long and
short range fir an organization

10. Strategic plans- involve determining the major goals of the entire organization and the policies. To
guide the achievement of these goals

11. Tactical plans- deal with determination of the ahort term specific utilization

12. Planning horizon: short range vs long range- short range plans generally cover up to one year.

13. Functional plans- being long range or short range plans are often classified by function or use

14. Operational vs strategic plans- is the process which set forth organizational objectives.
DECISION MAKING

Marginal analysis- this tool is used in decision making to figure out how much more output

Financial analysis- this is another tool in decision making used to estimating the profitability

Break even analysis- thia is another tool which enable manager to sew the effect alternative available
based.

Ratio analysis- is an accounting tool used for the interpretation of accounting information.

OPERATION RESEARCH TECHNIQUE

1. Queueing or Waiting- line method- used mathematical techniques for balancing waiting lines and
services provided

2. Linear programming- used in decisions involving the allocation of resources or.limitted resources

3. Game theory- involves selecting the best strategy taking into consideration.

4. Simulation- techniques involves the building of a model that represents

5. Decision tree- is an interesting technique uses in analyzing a decision

DECISION MAKING PROCESS

1. Set objectives

2. Identify ,constraints

3. Identify alternatives

4. Gather appropriate information

5. Evaluate alternatives

6. Choose the most acceptable alternatives

PLANNING TECHNIQUES AND TOOLS

1. Forecasting- is an attempt to fore tell or predict future trends, events, or conditions, from knwon data

2. Break even analysis- charts are used for planning purposes

3. Scheduling- this is the term used for planning time for various activities in an organization

4. Management by objectives- peter drucker used this term in 1954 ang applied it to an approach to
planning
WHY MANAGERS FAIL IN PLANNING

1. Lack of real commitment in planning

2. Interchanging planning studies with plans

3. Failure to develop and implement sound strategies

4. Lack of meaningful objectives and goals

5. Tendency to underestimate the importance of planning premises.

6. Failure to see the scope of plan

7. Failure to see planning as a rational process

8. Too much reliance on experience.

9. Failure to use the principle of limiting factor

10. Lack of top management support

11. Lack of ckear delegation

12. Lack of adequate control techniques and information.

CHAPTER 4

ORGANIZING

 Is the process of grouping together of men and establishing relationships among them, defining
the authority and responsibility of personnel by using the company
 Is a broad term that can be interpreted differently by many management theorists.
 As a process should consider several factors of fundamentals

ORGANIZATION

 Has several definitions

 One (Webster) is the executive structure of a business- this definition indicates that organization
is the framework or backbone by which the work of a business
 “Organization “ also connotes a creative process

TYPES OF ORGANIZATION STRUCTURES

  Line organization- this is the simplest form of structure and refers to a direct straight-line
responsibility and control from the top management to the middle management and to the
lower level
 Line and staff organization-this utilizes the assistance of experts or specialists
 Functional organization- it utilizes the pure services of experts or specialists
 Committees-is another common organizational form used in situations where group
participation and decision are required
 Committees may be classified as
a) Ad hoc committee-this undertakes temporary activity
b) Standing committee- this is sometimes called permanent committee which undertakes
permanent activities, such as the budget committee
 Committee- is a tool for the development of ideas and procedures

ORGANIZATIONAL CHART

 “ORGANIZATIONAL CHART” is a diagrammatical form which shows important aspects of an

organization including the major function and their respective relationships, the channel of
supervision and the relative authority of each employee who is in charge of each function

TYPES OF ORGANIZATINAL CHART

 Master chart or chart of authority- the master chart shows the entire organizational structure.
 Functional chart-shows at a glance the functions and activities of the positions and/ or
departments
 Personnel chart- the personnel chart shows the departments in the same relative maner as the
functional chart.

HOW TO DRAW AN ORGANIZATION CHART

1. Existing positions and departments

2. Objectives,functions, and activities of positions and/or departments
3. Organization
4. Lines of authority and responsibility from top management to middle management
5. Functional realationship between line and staff positions/departments
6. Positions and job titles
7. Physical location of each position/department

RESULTS OF GOOD ORGANIZATION

1. Establishing responsibility and preventing”buck passing”

2. Providing for easier communication
3. Eliminating jurisdictional disputes between individuals
4. Helping develop executive ability
5. Aiding in measuring a persons performance against his charges and responsibilities
 6. Aiding in equitable distribution of work, functions and or personnel supervision
7. Permitting expansion and contraction without seriously disrupting the structure
8. Pointing out”dead end” jobs
9. Affording movement in the direction of the “ideal” organization, in times change
10. Establishing closer cooperation and higher morale
11. Delineating avenues of promotion
12. Preventing duplication of work
13. Making growth: possible with adequate control and without literally killing top executives
through
14. Aiding in wage and salary administration through forced job analysis and description

THE ELEMENTS OF DELEGATION

1. Responsibility – this is work or duty assigned to a particular position, responsibility involves

mental and physical activities which must be performed to carry out a task or duty
2. Authority- it refers to the power or the right to be obeyed. It is also the sum of the powers and
rights entrusted to make possible the performance of the work
3. Accountability – this is the answerability of the obligation to perform the delegated
responsibility and to exercise the authority for the proper performance if the work,.
Accountability cannot be delegated

DELEGATION

 Delegation is considered an art and science. It is an art because it is a kill that the manager
performs effectivelyif he practices it
 Delegation should first and foremost be tackled before the establishment of goals and
objectives and a clear definition of responsibility and authority has been made

EXCEPTION PRINCUPLE

 the exception principle(also known as management by exception) is closely related to the parity
principle
 the exception principle states that managers should concentrate their efforts on matters that
deviate significantyly from the normal and let subordinates handle routine matters

FORMAL AND INFORMAL ORGANIZATIONS

1. formal system- is composed of the recognized and formalized lines of communication, authority
and control
2. informal system- is much more subtle and invisible in the organization chart

FORMAL

 have planned structure

 deliberate attempts to create patterned relationships
  usualy shown by a chart
 traditional theory advocates formal organization

INFORMAL

 not formally planned

 arise spontaneously as a result of interactions
 not depicted in a chart
 human relations theory stresses informal organization

FLAT AND TALL STRUCTURES

 as the span of supervision or control increases( the number of subordinates being supervised)

Tall structure- has four levels with a span of two

Flat structure- has two levels with a span of ten

8 supervisors

1. gang boss
2. inspector
3. work boss
4. instruction boss
5. speed boss
6. shop boss
7. time boss
8. repair boss

4 bases for departmentalizing

1. function
2. product
3. process
4. geographical location

CHAPTER 5

STAFFING-is a process of recruiting,selecting,and trainiing of men

RECRUITMENT- is the process of encouraging ,inducing or influencing applicants to apply for a certain
vacant position

JOB DESCRIPTION- defines the duties and responsibilities of a particular position.

STEP IN RECRUITMENT

STEP ONE- studying the different jobs in the company and writing job description and specifications Job
analysis

STEP TWO- requisition of new employee

STEP THREE-Actual recruitment of applicants

SOURCES OF LABOR/APPLICANTS

a, INTERNAL-employees recruited within the company

b, EXTERNAL- applicants recruited through schools references advertisements, placement agencies,etc

SELECTION- is the process of getting the most qualified applicant from among different job seekers

STEP ONE- reception of applicants

STEP TWO- preliminary interview

STEP THREE- application form

STEP FOUR- Employment Test

STEP FIVE- financial selection by immediate supervisors or department head

STEP SIX- physical and medical examinatio

STEP 7- hiring

STEP 8- orientation/induction/indoctrination

TRAINING-according to the labor code of the philippines, is the systematic development of the attitude
/knowledge/behavior patterns

COMMPON TYPES OF TRAINING

1. On The Job Training and Job Rotation- is normally given by a senior emloyee or supervisor.

2. Vestibule Training- procedure and equipment similar to those used in the actual.job.

3. Apprenticeship Training- dates back to bibilical times

4. Classroom Training- is conducted off the job annd is probably the must familiar method of training

5. Programming instruction- the increased availability and lower cost of computers have made thr use of
programmed instruction more attractive
6. Management Development Program- is a systematic process of training and growth by which
individuals gain and apply knowledge..

Understudy Assignments- are generally used to develop an employee to fill specific job

Coaching- by experienced managers stresses the responsibility all managers for developing subordinates

Experience- is used in many organization employees are promoted into management jobs and allowed
to learn their own

Job rotation- is designed to give an employee broad experience in mang different areas of organization.

Lectures- the trainer has control and can present the materials this method

Case studies- this techniques was popularized by the harvard business school

Role palying- trainees are required to act out asigned roles in a realistic situation.

In basket technique- stimulates a realistic situation

Business management games- generally provides a setting of a company and its environment and
requires a team players to make operating decisions.

University and professjonal association seminars- offer credit and non credit

HUMAN ASSET ACCOUNTING

- attempts to place a value on an organization human asset.

START UP COSTS- derive the original cost of hiring

REPLACEMENT COSTS- estimate the cost of replacing

PRESENT VALUE METHOD- Multiply the present value of the wages

GODWILL METHOD- allocates a portion of the company

TRANSFER- refers to the shifting of an employee from one position to another without increasing his
duties.

PROMOTION- refers to the shifting of an employee to a new position to which both his status and
responsibilities are increased.

SEPARATION- employment of the company may eitger be temporary or permanent ,voluntary or in

voluntary.

Lay off- is temporary and involuntary

Discharges- is a permanent separation of an employee at the will of the employer,

Resignation- is the voluntary and permanent separation of an employee due to low morale

Retirement- can either be voluntary or involuntary