ORGANIZATION AND

MANAGEMENT
FORMS OF BUSINESS ORGANIZATION

1. Sole Proprietorship
2. Partnership
3. Corporation
 SOLE PROPRIETORSHIP
• Is a type of enterprise that is owned and run by one person in which there is no legal
distinction between the owner and the business entity.

ADVANTAGES
• FORMATION – less complicated
• TAX BENEFITS – no requirement to file a
separate business report. The business will
be taxed at the rates applied to personal
income, not corporate taxes.
• DECISION MAKING – business decision
remains the responsibility of the owner
DISADVANTAGES
• LIABILITY – the business will be held
directly responsible for any loses or debts
• LACK OF CONTINUITY – the business
may discontinue if the owner becomes
deceased or incapacitated
• DIFFICULTY IN RAISING CAPITAL
 PARTNERSHIP
• a business with two or more sharing its ownership

ADVANTAGES DISADVANTAGES
• EASY AND INEXPENSIVE • JOINT AND INDIVIDUAL LIABILITY
• SHARED FINANCIAL COMMITMENT • DISAGREEMENTS
• COMPLIMENTARY SKILLS • SHARED PROFITS
• PARTNERSHIP INCENTIVES FOR
EMPLOYEES
 CORPORATION
• An organization, usually a group of people or a company, authorized by the state to act as
a single legal entity and recognized as such in law for certain purposes.

ADVANTAGES DISADVANTAGES
• SEPARATE PERSONALITY • MORE TIME AND MONEY SPENT IN
• EASE OF RAISING FUNDS ORGANIZING

• CONTINUITY • MORE PAPERWORK

• HIGHER TAX
• EASE OF TRANSFER OF OWNERSHIP
• CREDIBILITY • MORE COSTLY
NATURE AND ROLE OF THE FIRM

• Human Resource Management – the entire spectrum of

management of people that serves to maximize their
performance in order to meet the organization’s
strategic objectives.
• MARKETING MANAGEMENT

-management process responsible for identifying,

anticipating, and satisfying consumer requirements
profitability
OPERATIONS MANAGEMENT

• Involves overseeing, designing, controlling the process

of production, and redesigning business operations in
the production of goods and services.
FINANCIAL MANAGEMENT

• The goal is to achieve three benefits: business support

service, lower cost, and effective control of the
environment
MATERIAL AND PROCUREMENT MANAGEMENT

• Is the responsibility of the firm to ensure that it

manages the procurement process and the supply base
effectively and efficiently
OFFICE MANAGEMENT

• Involves the design, implementation, evaluation and

maintenance of the process of work within an
organization.
INFORMATION AND COMMUNICATIONS
TECHNOLOGY

• Includes a related form of communication or application

that encompasses radio, television, cellular phones, and
network hardware and software, satellite system, and so on,
as well as the various services and applications associated
with them such as videoconferencing and distance learning.
TYPES OF ORGANIZATION STRUCTURES

An organization structure is a system made up of tasks to be accomplished, work

movements from one work to other work levels in the systems, reporting
relationships, and communication passageways that unite the work of different
individual persons and groups.
An organizational chart is a diagram that visually conveys a company a
company’s internal structure by dealing the roles, responsibilities, and relationship
between individuals within an entity.
TYPES OF ORGANIZATIONAL STRUCTURE

a. Vertical Structure
b. Horizontal Structure
c. Network Structure
VERTICAL STRUCTURE
HORIZONTAL STRUCTURE
NETWORK STRUCTURE
DEPARTMENTS FORMED ARE TWO TYPES:

a. Line Departments – deal directly with the firm’s primary

goods and services responsible for manufacturing, selling,
and providing service to clients.
b. Staff Departments – support the activities of the line
departments by doing research, attending to legal matters,
performing public relations duties, etc.
MEANWHILE, DEPARTMENTALIZATION MAY BE
DONE USING THREE APPROACHES:

a. Functional Approach
b. Divisional Approach
c. Matrix Approach
ORGANIZATION THEORIES AND APPLICATIONS

a. Traditional
b. Modern
TRADITIONAL ORGANIZATIONAL DESIGN
THEORIES INCLUDE:

a. Simple
-few departments
-wide spans of control
-has a centralized authority figure
-has a very little formalization of work
TRADITIONAL ORGANIZATIONAL DESIGN
THEORIES INCLUDE:

b. Functional
-groups similar or related occupational specialties
together
TRADITIONAL ORGANIZATIONAL DESIGN
THEORIES INCLUDE:

c. Divisional
-made up of separate, semi-autonomous units or
divisions
MODERN ORGANIZATIONAL DESIGN THEORIES
INCLUDE:

a. Team Design
b. Matrix Design
c. Boundary-less Design
FORMAL AND INFORMAL ORGANIZATION

a. Formal Organization – organizations formed by the company

owner or a manager to help the firm to accomplish its goals
b. Informal Organization – organizations that exist because of
friendship or common interest; made up of informal groups
which exist for the members need for social affiliation