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Principles of Management

Ang taong walang pilak, ay parang ibong walang pakpak

History and Background of Business Activities
The countrys entrepreneurial drive was formalized with the coming in the 1570s of Spanish
conquistadores led by Miguel Lopez de Legazpi.
1781: Governor Jose Basco y Vargas founded the Economic Society of the Friends of the Country.
This encouraged economic activities in indigo, cotton, pepper, silk and cinnamon; the teaching and
training of people in weaving and dyeing; and the manufacture of various useful products.
He also established the Tobacco Monopoly in 1780.
1785: the Royal Company of the Philippines was established, and lasted until 1830.
It promoted the production of indigo dye, sugar cane, cotton, spices and silk. Its exports to Spain were
1869: the Suez Canal was opened.
There was an emergence of increased agricultural production and the establishment of banks.
The canal shortened the water route from the
Philippines to Europe, cutting time and costs Of exports to Spain.
d from duties.
The coming of the Americans opened new economic opportunities for the Philippines.
The American government established
The Bureau of Agriculture in 1902 and helped farmers
With experimental stations and model farms.
The Bureau of Education started gardening/science classes.
The countrys preference trade with America was in accordance with special tariff arrangements.
The Japanese occupation on WWII
Ravaged both the cities and countryside.
The need for food pushed the Japanese
Military Government into promoting
the planting of vegetables and seasonal
Crops such as ube, gabi, camote, kangkong and other vegetables.
In the 1950s, government policy-makers focused on import-substitution as the way towards
The manufacturing sector grew at 12% per annum in the 1950s, pushing us ahead of Southeast Asian
countries by the 1960s.
The Philippines appeared to be more economically advanced than Singapore, Indonesia
Thailand and South Korea. This However diverted the attention of the National government from
improving our agriculture system.
In the 1970s, when martial law was declared, there were half-hearted attempts to improve this structure
but, a plethora of scandals, gross mismanagement of the economy led to the drastic decline of the
Philippine economy.
Putting the Philippines to the bottom ranks against its Asian and Pacific neighbors.

The Economy of the Philippines is the 40th largest in the world, according to 2012 International
Monetary Fund statistics, and is also one of the emerging markets in the world.
The Philippines is considered as a newly industrialized country, which has been transitioning
from being one based on agriculture to one based more on services and manufacturing.
According to the World Bank ICP (International Comparison Program) 2011, the estimated 2011
GDP (purchasing power parity) was $543.7 billion. Goldman Sachs estimates that by the year
2050, the Philippines will be the 14th largest economy in the world, Goldman Sachs also
included the Philippines in its list of the Next Eleven economies. According to HSBC, the
Philippine economy will become the 16th largest economy in the world, 5th largest economy
in Asia and the largest economy in the Southeast Asian region by 2050.

Business and Organization

Ang tulin ng bangkay di sa kahoy galing, kundi sa piloto at ihip ng hangin
Definition of Management and Organization
Process by which a cooperative group directs action toward common goals.
Getting things done through other people.
The unifying and coordinating activity which combines the actions of individuals into
meaningful and purposeful group endeavor.
The accomplishment of desired objectives by establishing and environment favorable to
performance by people operating in organized groups.
Distinct process consisting of planning, organizing, directing, controlling, performed to
determine and accomplish objectives by the use of people.
Management is task. Management is discipline; but management is also people
While these definitions represent perceptive differences of management scholars, these definitions,
however, seem to converge in one direction.
The purpose of management is to achieve certain specific ends and to maintain or improve the ability of
an organization for effectiveness, efficiency and efficacy in achieving predetermined objectives

A social group of individuals deliberately created and maintained for the purpose of
achieving specific objectives.
Organizations are classified as:
- Private orgs may be divided into profit or business, and service or non-profit
- Public, church, military orgs include professional, civic, and political organizations

The most common forms of business organizations are:

Sole proprietorship
Management as Science and Art
The emphasis in any activity that is classed as an art is on applying skills and knowledge and
accomplishing an end through deliberate efforts. It is clear that management is an art. Science, on the
other hand, involves seeking new knowledge through the use of rigorous methods of collecting data,
classifying and measuring it, setting up hypotheses, and testing those hypotheses. In the last century,
management has increased attention to its scientific aspects.
-Joseph Massie,1964
Management and People
Management is about man, about people and not alone about things, systems, resources or skills.
That is why there is no guarantee of successful management, no matter how many academic
degrees or training courses on takes on the subject of management.
Management is experience. It is like wine. It mellows as it ages. Management is practice more
than art or science. Practice makes it an art and science. The more practice, the more experience.
good experience is not what happens to you, its what you do with what happens to you.
Management thrives best with experienced people.
Management is mental. It is also theory. It needs young people, good theoreticians, good
scientists. But management is not an exact science. It borrows from engineering, psychology,
philosophy, cybernetics, systems, mathematics, law, economics, theology, social science, military
science, etc.
Management is about managing men. People is its business, its primary business. Not profits,
resources, systems or outputs.
Management is allowing people to develop to their fullest potential.
Management is about managing men with tact. Tact with respect and courtesy. Treating people
with dignity and human worth.
What Managers Really Do
Contingency responses
They must have the ability to cope with potential or actual threats to the business.
They must respond quickly to risks with contingency or standby plans, or quick action
borne from experience or right hunches.
They are quick with alternative solutions.
They are dependable especially during a crisis.
Uncertainty Reduction
They can ward off threats from the market, competition or government through the use of
controls and efficient management information systems, or business intelligence.
They are capable of changing an organization with purpose and deliberate actions. They
reduce the unknowns.
Patterns of Management Analysis
Empirical School- management through experience.

Decision Theory School- management as a series of decisions.

Mathematical School- management as a system of mathematical models and processes.
Systems School- as system is a set of interacting elements bound together by a common
objective and operating within a given environment.
Human Behavior School- management from the standpoint of interpersonal relations
represented by human relations, leadership and behavior.
Social Systems School- management as a social system and considers the organization as a
social organism subject to pressures and conflicts which come from the social environment.
Cooperation is the key.
Socio-Technical Systems School- management should not only be preoccupied with the people
and their interaction, but also be concerned with the technical environment in which the workers
work or with the technology workers use.
Situational School- the practice of management depends upon a given set of circumstances.
Managerial Roles School- focuses on the roles that managers do in the organization.
Operational School- management as a universal process through the functions of management
such as planning, organizing, staffing, directing, motivating and controlling.
The Manager and His Environment

Economic Environment- the demand, supply, prices of commodities, products are major
concerns of the manager.
Technological Environment- the real impact of technology is on new products, processes,
machines, tools, materials, services.
Social Environment- attitudes, desires, expectations, degrees of intelligence and education,
beliefs and customs of people in a given group or society.
Political Environment- even under normal conditions, the law and type of political order must
be seriously considered by the manager.
Management of revolution
Revolutionary movements also have to be managed. They do not come about spontaneously.
They break out after a series of interlocked events, each one starting small until is sparks off, the
flames of revolution
The cycle of revolutionary causes consist of the following stages:

Crusading Stage
The stage of startups and the beginning of movements.
It may begin with a charismatic leader from the countryside, urban poor, or a
combination of both.
It may be a peoples movement without any apparent singular leader until one emerges
from the conflict.
All movements or causes are built upon strong ideas or concepts, or political ideology.
Ideologies have rituals or symbols.
Leaders with small, dedicated followers then begin to spread out like crusaders with all
kinds of risks or threats.
This is a planning stage, with lots of platform statements, ideology pamphlets and national plans.
Popular Movement Stage

The leader and his movement must now become populist, and involve the largest number of
people possible.
They zero in on active supporters, optimizing their participation; go after potential
followers; and either ignore or confront the opposition directly or indirectly.
The objective is to move away from a small band to cover the largest following possible.
Headquarters are set up, key followers occupy various positions such as administration,
logistics, finance, propaganda, field operations, security and intelligence, recruitment, etc.
Managerial Stage
The leaders must witch from charismatic and personalistic management into organized
There is a hierarchy of authorities; job definitions are clearer; functions are spelled out;
structures are refined.
The leader must now enforce discipline, show competence in the running of
organizations, and make decisions quickly and decisively.
With expectations high, leaders must demonstrate quick results in very concrete and
understood forms.
Bureaucratic Stage
The last phase of the cycle
They now have the visibility and glamour.
They also inherit all the major problems and deficiencies of the former opposition or the
past regime.
They have totally transformed from highly-spirited crusaders to a very large bureaucracy.
They are all in places of power; they control the funds and all resources.
Preventing a Revolution
Improve the means of listening to the people.
Encouarge the spirit of positive revolution through intelligent advocacy.
Leaders must force themselves to have access to public opinion. they should see things for
themselves rather than to stay in their air-conditioned offices. Walk in the fields, ride in jeeps in
the countryside, talk to people directly.
Those members with high revolutionary spirit should be utilized through crusade movements in
small areas.