CHAPTER 9 ORGANIZATION AND MANAGEMENT.pptx

presentation of governance

1. CHAPTER 9

2. SPECIAL TOPICS IN MANAGEMENT

3. SPECIAL TOPICS IN MANAGEMENT IT MAY NOT be instantly apparent but our daily activities from the time we make up in the morning up to bedtime at night are ruled by the ventures of entrepreneurs. The toothbrush, toothpaste,towel,soap,shampoo /conditioner ,clothes , shoes,food and drink varieties ,home appliances,electronic gadgets ,office equipment ,transportation vehicles ,and other things we use or consume daily are all products of entrepreneurial ventures . Hence, it is important to acknowledge our dependence on the innovative and creative nature of entrepreneurs .the important role of entrepreneurs ,therefore ,is to continuously look into the needs and wants of society and to find the best possible way, beyond those currently offered.

4. AS YOU READ AND STUDY THIS CHAPTER, CONCENTRATE ON THE FOLLOWING OBJECTIVES, AND AT THE END OF THE CHAPTER BE ABLE TO: EXPLAIN HOW TO START A SMALL/FAMILY BUSINESS; IDENTIFY LEGAL BUSINESS FORMS AND REQUIREMENTS; AND APPRECIATE THE ROLE OF SMALL FAMILY BUSINESS OPERATION IN THE IMPROVEMENT OF ECONOMIC STATUS.

5. LESSON 1 SMALL BUSINESS MANAGEMENT AND ENTERPRENEURSHIP In addition, entrepreneurship also has socio-economic contributions. It provides employment, not only to the entrepreneur, but to fellow Fil- ipinos . Thus helping ease unemployment. Entrepreneurship provides additional sources of taxes for the government, hence contributing to Philippine economic progress. Innovative, creative, and intuitive thinking in business management helps entrepreneurs come up with great ideas or new strategies that may lead to the successful achievement of their goals-service, growth, and profitability. The same entrepreneurial mindset is valuable in today's highly competitive and ever-changing business world. It answers the need for the creation of new products and the development of new services for society's benefit

6. DEFINITION OF TERMS ENTREPRENEURSHIP Innovative,creative,risk-taking,growth oriented behavior that brings new opportunities for individuals or organizations to start new businesses and to produce new products or services that are beneficial to society VENTURESENTREPRENEURIAL Organizations that persistently pursue opportunities and are characterized by creative, innovative activities that have service,growth , and profitability as their principal goal SMALL BUSINESS A business that has fewer than 100 to 500 workers [depending on the prevailing commercial law in a particular country], independently owned,operated , and financed; not always entrepreneurial in orientation and does not dominate its industry; capital is low but capable of producing goods or rendering services designed to satisfy particular needs of customers

7. THE ENTREPRENEURIAL PROCEDURE Business opportunities are waiting for people who have creative and innovative minds. However, following a systematic process is crucial in the pursuit of entrepreneurial ventures. This entrepreneurial procedure involves the following steps: SEGMENT OF THE MARKET A business cannot entertain or offer goods and services to society at the onset in a large scale. It first must identify a specific segment or group of people it may cater to or what is called a target market. The basis for segmenting the market to find the target market. may be geographical, demographical, psychographical , or behavioral. FORMULATE THE BUSINESS VISION AND MISSION STATEMENTS. The business vision of the organization provides a picture of where the entrepreneurial venture is headed and what the organization can become in the future. Its mission states the basic purpose and scope of the organization's operations.

8. GOAL ATTAINMENT

9. GEOGRAPHICAL . MARKET SEGMENTATION MAY BE USED ON LOCATION [CITY,PROVINCE,REGION, OR COUNTRY; NORTH,SOUTH, EAST, OR WEST] . D EMOGRAPHICAL. DEMOGRAPHICAL BASES CONSIDER POPULATION AND CAN FURTHER BE EXTENDED TO INCLUDE AGE,INCOME,EDUCATION,MARITAL STATUS,AND OTHER RELATED INFORMATION. P SYCHOGRAPHICAL . PSYCHOGRAPHICS LOOKS INTO PEOPLE’S INTERESTS,VALUES,ATTITUDES,OPINIONS,AND LIFESTYLES. B EHAVIORAL . SEGMENTATION MAY BE BASED ON PEOPLE’S BEHAVIOR TOWARD PURCHASING OR SPENDING, OR TOWARD A PRODUCT OR SERVICE.

10. Find the Target Market . After getting enough information about the overall market, the firm can use statistical tools to analyze this infor - mation and help them decide which part of the whole market they can serve using their resources in the best possible manner. That part of the market which the company is willing and capable of servicing is known as the target market of the business. Understand the Environment. Why should we study the environ- ment ? Things around us are not permanent and everything changes. These changes greatly impact business. In some situations, businesses control the consequences of change, however, this is not always the case. When businesses can no longer control the situation, they are left with no option but to change in consideration of the environment surrounding them. Environmental factors that affect business may either be internal or external.

11. Internal factors are environmental factors within the company and can be controlled. These include the employees, management, physical facilities, and so on. On the other hand, external factors have two types: microenvironment and macroenvironment. Microenvironment includes customers and suppliers, whereas macroenvironment includes economic, sociocultural, technological, legal, political, and natural factors, as stated by Kotler (1997).

12. Develop the Business Plan. We can define a business plan as the roadmap which the business must follow utilizing the resources at hand while keeping the environment in mind. A business plan has the follow- ing contents: • executive summary - contains the overview of the business and its major plans ⚫ environmental analysis - includes study of internal and external orga - nizational surroundings ⚫industry analysis - includes study of trends in the economy, legal require- ments , and possible risks ⚫ market analysis - includes analysis of market size, business competitors' strengths/weaknesses, and short-term sales goals ⚫ company description - mentions ownership, mission and vision of the organization, registration legalities, etc. ⚫ marketing and sales activities - strategies for distribution, promotion, and pricing of products/services

13. ⚫products and services - refers to descriptions of good/services and their unique features ⚫operation - refers to descriptions of manufacturing and service methods, supplies and suppliers, and control processes ⚫ management and ownership - refers to identification of owners and administrators ⚫Financial data - includes capital needs, financial projections for one to five years, available funds, and possible loan services ⚫time table refers to estimated completion dates of ventures

14. Business planning is important as it helps minimize business risks and expenses needed for the production of goods and carrying out services. It may also determine financial requirements and programs of activities in advance. Implement and Monitor the Business Venture . This step follows after careful business planning. Choosing the right people to work with and considering the correct timing for the business implementation are important. Monitoring the business venture's progress is also a must to check if its implementation is proceeding in the right direction or if modifications are needed along the way.

15. Maximize the Utilization of Business Resources. Consider the basic ways of financing business ventures such as debt financing by taking loans from reputable institutions and equity financing which exchanges ownership shares in return for an outside investment if additional capital is needed. Human resources and other material or physical resources must also be fully utilized. Aside from the procedure mentioned above, business success is also determined by certain traits that are required of an entrepreneur. Some of these entrepreneurial characteristics are listed below. Entrepreneurs must be: Creative and Innovative . Entrepreneurs must have a creative and innovative mindset and must think out of the box to survive competition and at the same time have competitive advantage over rival organiza tions . These are the characteristics that differentiate entrepreneurs from businessmen

16. Good planners . Planning, on the part of the entrepreneur, bridges the gap between where they are and where they want to go. In other words, it shows the right business direction that would lead them to success Customer-oriented . Entrepreneurs must be customer-oriented to shape their market offerings and create value in their customers' minds. Open-minded . Entrepreneurs must always be open and willing to entertain the suggestions of team players/employees to encourage the generation of ideas which may be beneficial when implemented. Learn ing is a never-ending process and entrepreneurs can also learn by being receptive to the ideas of people around them. Flexible . Entrepreneurs must be flexible in order to adapt to changing environmental conditions. Flexibility comes in relation to changing the strategies, policies, and utilization of business resources.

17. Persistent . There is no shortcut to success, and that is why it takes time to attain the objectives of the company. In the long run, things will not always fall under the control of the business managers. During times of change and hardship, the entrepreneur must not give up, especially when things are not favorable for business. Entrepreneurs must be per- sistent until their goals are achieved Confident. Entrepreneurs must be confident about their own abilities, together with the abilities of their other team members. They must think positively and believe in their capabilities and they must not doubt that they can accomplish the most challenging tasks at hand . Organized. Entrepreneurs must be well-organized when it comes to all activities of the business. A well-organized entrepreneur makes sure that their organizational structure furnishes an environment where individual performance, both present and future, contributes effectively and efficiently to group endeavors

18. Updated/Well-informed . To ensure achievement of entrepreneur- ial goals, entrepreneurs must continuously seek important, up-to-date information regarding their market customers, rivals in business, and suppliers. Expert opinion must also be sought to be well-informed. Team players . Entrepreneurs must be able to work well with others. In unity, there is strength; good coordination with others will ensure business success Knowledgeable . Entrepreneurs must have expert knowledge about the product or service they want to sell, their competitors, and local/regional/ national markets so that they will have better chances of succeeding Risk-takers. Entrepreneurs are not afraid of risks and are ready to meet business challenges. However, they prefer calculated risks since they are aware that business undertakings may result in either success or failure, profit or loss .

19. FAST LEARNING REVIEW Defferentiate entrepreneurial ventures from other forms of small business. What is the importance of entrepreneurship in the Philippine setting? Enumerate and briefly explain the entrepreneurial process. Name at least five entrepreneurial characteristics and briefly discuss each. EXERCISE Research on the contributions of at least three filipino entrepreneurs to the Philippine economy. Do a self-examination. Find out if you have some or all entrepreneurial attributes or characteristics discussed In the lesson. Briefly explain why you say so .

20. LESSON 2 FAMILY BUSINESS ENTERPRISE G lobally, there are many successful family business run by entrepreneurs who have different stories to tell and different formulas for their business success. However, they possess some common char- acteristics such as creativity, innovativeness, service orientation, and the ability to take risks and do hard work, among others. Slowly, but surely, these characteristics paved the way toward their success in the world of business. The stories in this chapter feature ordinary family members who, despite of starting with meager capital, have persevered to produce competitive products or render good services that brought them success in their chosen business endeavor. DEFINITION OF TERMS FAMILY BUSINESS – a business owned and financially controlled by members of a family ENTERPRISE - any projected task or work; an undertaking

21. SUCCESS STORIES OF FILIPINO FAMILY BUSINESS VENTURES FILINVEST GROUP Andrew Gotianun Sr. defied certain norms in life and business when he nurtured his company to become one of the Philippines' biggest con- glomerates, the Filinvest Group. Andrew Sr. and his wife, Mercedes, saw potential business oppor - tunities during their trips abroad. They interviewed small bank owners in the US and followed their business models; from these, they adjusted the models to fit the Philippine setting. They made use of ideas that they got from their trips to Florida, US for another business venture which is guarded subdivisions for the middle class in the mid 1960s.

22. Mr. Gotianun revealed that aside from hard work, one needs to have the right attitude to succeed in life and in business. In his belief that women also deserve a place in the boardroom, he broke the family tradition when he involved his wife, Mercedes, in business management. He admitted that Mercedes was the one who implemented and executed some of his business plans and turned many of his visions and entrepreneurial ideas into realities, interestingly, she did all these while raising their children. Mr. Gotianun continues to search for new business opportunities, particularly through the use of the Internet.

23. METROBANK George S.K. Ty, one of Asia's top bankers and a recipient of an honorary doctorate degree from the University of Santo Tomas, started to work at an early age. He was only 18 years old when he dropped out of school to help his father put up their family business, the Wellington Flour Mills. He had to endure many hardships as a young businessman in what he described as an unfamiliar industry. In spite of inadequate bank financing and his limitations in the said business, he was able to help his father steer their flour mill to success.

24. Inspired by their success and the experiences he gained in managing a business, George, at age 29, founded Metrobank in 1962 and, like before, he again had to undergo many difficulties in building it into one of the Philippines' largest and most trusted banks. The Metrobank Group (PS Bank, Toyota Philippines, AXA Life Insurance, etc.) in 2013 paid over P 20 billion in taxes, proving that they, indeed, are very successful, and that entrepreneurial traits like innovativeness, creativity, and ability to take calculated risks must be nurtured. Dr. George Ty believes that lessons learned from experiences are lessons that you will never forget; that trust is not given and must be earned; and that good banking is about trust and helping other people achieve their dreams.

25. FAST LEARNING REVIEW 1.define entrepreneurship. 2. differentiate entrepreneurial ventures from other small business endeavors. 3. why is it important to develop creativity and innovativeness in entrepreneurial management? EXERCISE 1. choose one entrepreneurial venture that you would like to engage in the future. Summarize the steps you will take to transform your chosen entrepreneurial venture into reality 2. interview two classmates to find out if they are interested in becoming entrepreneurs someday. Find out the specific entrepreneurial venture that they are planning to pursue and the reason for their choice. If they are not interested in becoming entrepreneurs in the future, ask them to explain why. INTEGRATION At the end of the chapter,write two or three sentences to complete the following: I realize that: I resolve that:

26. LESSON 3 STARTING A BUSINESS: LEGAL FORMS AND REQUIREMENTS

27. The legal form of business is determined by its ownership or proprietorship. A business may be a single proprietorship, a partnership, a corporation, or a cooperative. in single or sole proprietorship, the owner and the business are considered as one, meaning the owner’s income and the business income are one and the same and the and the business income is taxed as a personal income. Decision-making is the sole responsibility of the owner and if the business succeeds, he or she gets all the profit. If it fails, then he or she suffers all the losses and must pay whatever debts are incurred. The business ends upon the death of the owner or single proprietor .

28. In a business partnership, the resources (money and other assets ) and talents (skills, experience , the management expertise) of all involved may be pooled together. All partners share the profits equally, unless otherwise specified in their partnership agreement. A corporation is registered and is recognized by law as a “ legal person” that has legal rights and responsibilities, can sue or be sued in court, can own and sell properties, and can transact or enter into concourt . Corporation ownership is divided into units known as shares of stocks and owners of these are called stockholders on a regular basis, manage the corporation which is run according to terms specified by their by-laws and articles of incorporation. The corporation’s life does not end with the death of a stockholder or by the selling of the stocks of a particular stockholder.

29. The cooperatives' original purpose was to supply those involved with goods or services at lower costs compared to those bought from retailers. Later types of cooperative have emerged that include farmers, producers, and credit cooperatives. A group of officers, called board of directors and committees, headed by a chairman, manage the cooperative's activities. The cooperative office that runs the daily office work is usually hired. The cooperative's life is not affected by the death of any of its members nor by the selling of a member's shares. It can, however, be dissolved by a majority vote of the board of directors and a resolution signed by at least two-thirds of the general membership.

30. Definition of Terms Business registration - a government requirement that orders new business owners to furnish government agencies with necessary information prior to the legal operation of their business organization Single proprietorship - a business owned by one person only Partnership - a business formed when two or more partners formally agree to be joint owners of a business Corporation - a business entity involving five or more persons owning it Cooperative - a group enterprise made up of several traders, consumers, or producers who are interested to produce or trade as a group

31. Why and Where Should a Business be Registered? Businesses or entrepreneurial ventures have to be registered in compliance to Philippine laws. Without proper registration in authorized government agencies, the business cannot operate legally. Registering also gives credi - bility to businesses, hence, helping earn the trust of customers, suppliers, partners, and other stakeholders.

32. Registration documents have to be submitted to the Department of Trade and Industry (DTI) and the Securities and Exchange Commis - sion (SEC) for commercial registry; barangay office for clearance and securing a community tax certificate; city mayor's office for mayor's permit and license to operate; city or national government agencies for sector-specific licenses/permits; Bureau of Fire Protection (BFP) for fire safety clearance; Bureau of Internal Revenue (BIR) for taxation purposes; Pag-IBIG Fund (Home Development Mutual Fund) office for employees' housing needs/security; and the Department of Labor and Employment (DOLE) for labor statistics .

33. Differences in the Registration of the Legal Forms of Business Future entrepreneurs must contact the government agencies concerned regarding their updated or revised rules and regulations as well as the latest legislations that may have to be complied with. Registration of different legal forms of business call for the require- ments and involve the procedures in Table 9.1. TABLE 9.1 Requirements and Procedures Involved in Registration of Different Legal Business Forms

34. Single proprietorship registration Partnership registration •business name registration with the DTI •submission of two recent 2 x 2 ID pictures •submission of Filipino citizenship proofs (if applicant is a naturalized Filipino citizen or if applicant is a Filipino with a non-Filipino sounding family name); examples of needed evidences are birth certificate, passport, and voter's ID, among others • Payment of application fee or processing fee plus docu - mentary stamp amount •filling of the previously prepared partnership agreement by two or more applicants with the SEC • Payment of the filling fee •valuation of the application by the lawyer and the staff of the corporate and legal department of the SEC • release of the approved registration (within 15 to 30 days).

35. Corporation registration Cooperative registration •submission of four copies of previously prepared economic survey with a general statement that describes the cooperative’s structure,purpose,economic feasibility,operation area ,and membership size, among others to the cooperative development authority (CDA) •submission of four copies of previously prepared articles of cooperative agreement together with the bonds paid for accountable officers •submission of four copies of the cooperative’s by-laws •payment of registration fee prescribed ny the CDA •release of approved registration on specified dates •filling of the previously prepared articles of incorporation and by-laws and bank certification regarding stockholder’s shares of stocks with the SEC •payment of the registration fee •evaluation of the application by the lawyer and staff of the corporate and legal department of the SEC •release of the approved registration (within 15 to 30 days )

36. ADVANTAGES AND DISADVANTAGES OF THE LEGAL FORMS OF BUSINESS Summarizing the advantages and disadvantages of the legal forms of business will help potential entrepreneurs decide which form to choose. See table 9.2 below

37. Advantages and Disadvantages of the legal forms of business FORMS Single proprietorship Partnership ADVANTAGES •creation is simple and low-cost •owner gets all the profits •decision-making is the sole responsibility of the owner •establishment is easy •equal division of profits based on their agreement as partners •availability of bigger capital due to pooling of resources of partners •availability of a pool of skills,knowledge,and talents DISADVANTAGES •owner is liable to all risks and losses •limited capital and other resources •solo owner has to do long hours of work •business control is limited since it has to be shared with other partners •profits are shared •wrong decisions made by a partner are binding to other partner/s •invested property becomes the joint property of both/all partners

38. Corporation Cooperative •less liabilityof stockholders •capability to attract larger amount of capital •transfer of stock ownership is easier •large pool of talents,skills,and knowledge •division of profits is fair,depending on number of stocks unit owned •it is group enterprise where members may avail themselves of economics of scale which they will not be able to obtain as individuals •different types may be formed ( formers;producers;or credit cooperative) •some registered cooperatives may apply for tax exemption •business control is shared •ideas and decisions made by the board of directors have to be accepted by the general membership •major decisions cannot be done easily,even if urgent,without the approval of the board of directors •corporate and individual profits are taxed separately,resulting in double taxation and additional expenses

39. •large pool of talents,skills,and knowledge •limited liability of members

40. FAST LEARNING REVIEW 1.enumerate and briefly define the different legal forms of business. 2.why and where should a business be registered? 3.in your opinion,which is the best legal form of business?explain your self. 4.are there differences in the registration procedure of the different legal forms of business? explain your answer. EXERCISE 1.research on the top 10 business corporations in the Philippines. Discuss the businesses they are engaged in. 2.find out and discuss if your school is classified as a single proprietorship,partnership,or corporation.

41. THANK YOU FOR YOUR ATTENTION SUBMITTED TO: SIR MARSLO PERALTA SUBMITTED BY: ELIZA JANE FAJARDO ROCHELLE JASMIN BRIX BLANCO