People’s Organization-Based Resource

Enterprise
(An Enterprise Management Conceptual Framework for People’s
Organization)

A MidTerm Paper for

M221 Enterprise Management

Submitted by:

Aurea Christie Galvez-Lumaad

MM Batch 15

Submitted to:

Professor Adela Ellson

Ellson
School of Management
University of the Philippine Mindanao

February 2011
 Enterprise Management Conceptual
Framework for Peoples Organizations

I. Orientation of the POBRE Management Framework

In this framework it is important to have a clear definition on the terms

“business” and “organization” in order to avoid confusion. An
enterprise is made up of a business supported by an organization. The
illustration below will give a clear picture dichotomizing the term
“business or enterprise” from “organization”.

External Environment

Organizatio
n
Busin
ess

The business is the enterprise's function of the organization: it

delivers products and services into an external environment (made up of a
marketplace with opportunities, competition, a culture, economic
pressures, government regulations, resources, partners, and other forces
or groups that can impact the enterprise).

The purpose of the organization (the enterprise's form) is to help the

business to succeed within its environment. As the environment

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 changes, the business and the organization may both have to change.
If the business and organization are not aligned, the enterprise will find
itself in trouble. The simple distinction as shown above between business
and organization and its external environment adds clarity in
understanding the model.

Unfortunately, the terms are often used interchangeably, and this can
muddle thinking and create confusion. Breakdowns are often associated
with confusing these two basic elements of the system. For example,
businesses frequently try to implement an organizational solution,
(restructuring the organization chart, downsizing, or team building) when
a new business strategy is required. However, if the product no longer fits
market conditions, no organizational fix will help the enterprise to thrive.
Likewise, if the business product or service is on track yet the organization
is poorly designed to deliver it, no amount of market research or strategic
positioning of the business will help the organization.

The framework can help POs clients distinguish whether a problem

comes from conditions in the business (enterprise) or in the organization.
In almost all cases, the ultimate solution will need to incorporate both
perspectives if it is to deliver an integrated enterprise solution
( "organization" follows "business").

II. People’s Organization-Based Resource Enterprise (POBRE)

Management Framework

The POBRE Enterprise Management Model is based on the Integrated

Organizational Model (IOM) that is applied by few NGOs to describe, to
analyze and to diagnose organizations. This model is introduced by the
Management Development Foundation (MDF) based in Ede, The Netherlands.
The organization is a training institute that aims to train organizational
managers of both profit and non-profit organizations. In partnership with the

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 Managing Alternatives Group, Inc. (MAGI), MDF initiated several batches of
trainings for NGO managers entitled Institutional Development and
1
Organizational Management (ID-OS) in the Philippines.

1
The author is a former staff of the Managing Alternatives Group, Inc. (the local training partner of
MDF) and has attended the 3rd batch of ID-OS Training conducted in May 1998.

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 LOCAL
COMMUNI
TY

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 People’s Organization Based Resource Enterprise
(POBRE) Management Framework

General Environmental Factors:

political, economic, technical, socio-cultural

Strateg Strategies
ic
Directi
on Operation
Structure
al
LOCAL systems
COMMUNI PRODU
TY Personnel CTS
SUPPL Organizing
Organizatio
Managem
ent
Y nal Culture
(input
Leadership style
s)
Human ,
financial,
technology

Specific environmental relations:

customers/target groups, competition, formal/informal linkages

This model emphasize the interrelationships of the different elements of

an enterprise although the elements can to a certain extent be treated
separately, they are all connected to each other and in balance.

For this POBRE model, this external pressure is represented by the

external, specific local and the organizational set-up with served as the basis
of shaping the enterprise. As such, the PO is expected to integrate both
external and internal pressures in managing the enterprise. The following
are the basic orientation of this model:

First, the framework assumes that the different aspects of the

organization – external and internal – should be the basis of the
enterprise management of the PO.

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 Second, the framework emphasizes the “organizing component” is
an important asset of an enterprise in order to improve and sustain
the quality of the outputs and results of the enterprise. The
organizing component requires effective systems accompanied with
skills and talents that are necessary in facilitating this transformational
processes of the organization INPUTS to high quality OUTPUTS that are
significantly in line with its organizational vision and mission.

Third, the framework shows that also the importance of the quality of
its resources – base. This includes raw materials, human, technology,
finance, etc. This means the supply – both availability, quantity, and
quality of these inputs are important in the management of enterprise.

It is important that the POs that are managing the enterprise

understand the fundamental elements of the business and
organizational system, and how they impact one another. When a new
development occurs in the external environment or when
there is an internal change, the expected impacts on the whole
enterprise can be
mapped, and potentially critical and urgent decision can be made with
confidence.

The POBRE model actually can work as a stand-alone tool in assessing

or diagnosing the enterprise to clarify the full enterprise system and to
highlight where strategic interventions most need to occur.

III. Elements of the POBRE Management Framework

1. General Environment Factors

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 This include the complex set of political, economic, technical, social
and cultural conditions that influences the organization. The general
environment influences, creates opportunities and sets its limits to the
enterprise management in regards to the other basic components of the
organization. For example, political situation somehow affects the
enterprise management. If there is enough democratic space for POs to
exists, it is easy for the organization to strategize and implement more
enterprise management for its staff. If the cultural context is diverse and
complex, it is important for the PO to consider the socio-cultural context.
Technological developments will also dictate the strategies and systems
of enterprise management.

2. Specific environmental relations

This includes relations that are more organization specific – client-

specific and target groups. This depends on the nature of the
organization (its VMG, inputs, types of outputs). The enterprise
management needs to be fitted to the demands / needs of the target
groups, level of satisfaction, etc.

As shown in the arrows pointing outwards, the framework emphasizes

that the enterprise management should establish a closer and direct
relations with the specific environment. In reality the specific
environment which includes the local communities, local partners,
competitors, suppliers, financial institutions, bigger NGOs, etc. are
important elements that will increase the viability of the enterprise of the
PO.

3. Local Community

It should be noted that as a People’s Organization, the local

community (sector or particular group – e.g. women’s group) should be
considered as the direct and primary stakeholder of the enterprise. As the

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organization’s vision, mission and strategic direction are founded in the
situation and aspiration of this local community, this framework also
emphasizes that the benefits of the outputs should flow back to the local
community. These benefits may either be in the form of profit sharing as
owners and quality services/products as consumers.
Further, the framework strongly emphasize that the major source of
the enterprise inputs or resources especially raw materials, human
resources should be the local community. Thus, it is imperative that this
framework should always consider, above all, the need to develop and
capacitate the local communities as the sustainable source of quality
inputs that will be sustainable and effectively used by the enterprise for
production and later profit.

4. Organization Strategic Plan

The POBRE approach that is based on the situation of the local

communities or PO membership should be fitted to the strategic plan of
the PO. This will dictate the choice and quality standards of the core
products of the enterprise. The principles and philosophy of the
organization should also be the bases in designing the management
systems and strategies of the enterprise. For example, if the organization
is a women’s organization, the core products of the enterprise should
exactly fit the core mission of the organization.

5. PO’s Resource-Base and Management Systems

This element pertains to the available resources (i.e. financial,

technological, etc.) of the organization that need to be importantly
considered in developing and managing the enterprise of the
organization. This assumes that the level of adequacy and quality of
resources will also dictate the level of investments the organizations can
used for production, increase profits and improved lives of the local
communities.

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 This element also include the existing management structures and
systems of the enterprise. This suggest that the enterprise management
approach should fit and be aligned not only with the vision and mission
but should also fit the existing organizational systems, processes and
structure of the NPO.
This pertains to the internal functioning of the enterprise which
facilitates the transformation processes of actualizing its written VMG and
established systems/structures through the organizations resources.
The various parameters, which will be individually discussed in the
succeeding parts, are as follows:
- Strategies for enterprise (e.g. pricing, branding, etc.)
- Systems and Processes of the enterprise (e.g. production,
manufacturing, etc.)
- Structure of the PO (e.g. work arrangements, etc.)
- Culture of the PO
- Personnel in the PO
- Leadership styles of the PO leaders

EXPECTED OUTPUTS AND RESULTS:

The direct outputs of the resource enterprise management approach

are measured on the total quality of its final outputs. This is measured on
the level of sales, sustained demand of the target customers, reach in the
market and even its position within the industry.
This framework, likewise, considers the impacts of the enterprise,
measuring the outputs not only to its target customer but should equally
consider how the “local community” – who is the primary stakeholders or
owners of the POs --- have benefitted from the actual outputs of the
enterprise. In this manner, the effect to the local community can be
expressed on the benefits they gained as product consumers/costumers
and as owners of the enterprise.

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 VIII. Usefulness and Limitations of the Framework

Aside from seeing the POBRE framework as a model, it can also be

seen as a useful instrument for description, analysis and diagnosis of a
PO-based enterprise unit. It offers an over-all tool to put the various
elements of an organization in the designing and implement an enterprise
development and management approach. If this model is applied in the
PO enterprise management , the organization would not overlook the
most important elements needed in formulating integrative and
comprehensive enterprise management approaches.
To use this model successfully, one may need more specific tools,
depending on the exact aim in using the framework. In addition, the
application of the “POBRE” Diagram” largely depends on the local
communities which is the main resource-base of the enterprise.

IX. Conclusions

There is a continuous and mutual influence between an

enterprise and its general and specific environment. Any changes
in one may invoke changes in the other. However, this framework,
though, highly considers also the influence and benefits that the
organization and the local community can respectively contribute
and gain from the enterprise. This means that the enterprise is
very much dependent on the dynamics and results changes within
the People’s Organization as a whole and the local community as
the owner and beneficiaries of the enterprise.

The framework also challenges the need for the enterprise to

inevitably adopt itself to the changing environment, local

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community as well as to the organization if the PO wanted its
business needs to survive and succeed. On the other hand, the
organization and the local community also need to adjust and
respond to the condition of the enterprise if it wants its organization
and local community to survive and succeed. All these aspects
affect the management of the enterprise and thus all parameters
have to be well balanced all the way.

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