ORGANIZATION

&
MANAGEMENT
 OBJECTIVES
At the end of the lesson, the learner is expected to:

1. Differentiate the phases of economic development

and its impact on the business environment;
2. Understand the phases of economic development
and its impact on the business environment; and
3. Appreciate economic development that leads to a
different impact on the business environment.
 LESSON 1:

PHASES OF ECONOMIC
DEVELOPMENT AND
ITS IMPACT TO
BUSINESS
ENVIRONMENT
 Although material wealth accumulation is among
the concerns of genuine economic development, its
greater concern is the total improvement of the quality
of people’s lives. This, in turn, is related to sustainable
economic development issues in a country which
greatly influences business management.

Sustainable economic development ensures that

the present needs of a particular generation are fully
met without endangering the ability of future
generations to also fully meet their own needs.
Business managers must be conscious of their
decisions to avoid the abuse of ecological elements –
air, water, and soil – as this will threaten sustainable
economic development.
 Different countries have different management
strategies to encourage ecological respect and prevent
damage to the environment. Common environmental
and ecological problems that have to be dealt with by
business managers include the destruction of natural
habitats, depletion of clean water resources, urban,
industrial, and agricultural pollution, and many more.
 In September 2000, world leaders gathered for the
Millennium Summit and this adopted the United Nations
(UN) Millennium Declaration. By doing so, they had
committed their nations to a global partnership toward
the reduction of extreme poverty and the pursuit of the
Millennium Development Goals (MDG).
 The MDGs, according to the UN, is “the
world’s time-bound and quantified targets for
addressing extreme poverty in its many
dimensions – income poverty, hunger, disease,
lack of adequate shelter and exclusion – while
promoting gender equality, education and
environmental stability.” The deadline for the
fulfillment of the MDGs was set for 2015.

The following are the MDG’s:

1. Eradicate extreme hunger and poverty.
2. Achieve universal primary education.
3. Promote gender equality and empower women.
4. Reduce child mortality.
5. Improve maternal health.
6. Combat HIV/AIDS, Malaria and other diseases.
7. Ensure environmental sustainability.
8. Develop a global partnership for development.
 Meanwhile, the National
Economic and Development
Authority (NEDA) has laid out the
Philippine Development Plan (PDP)
2011-2016, which “adopts a
framework of inclusive growth,
which is high growth that is
sustained, generates mass
employment and reduces poverty.”
The PDP is focused on the
following areas:
1. Pursuit of Inclusive Growth.
2. Macroeconomic Policy.
3. Competitive Industry and Services Sectors.
4. Competitive and Sustainable Agriculture and Fisheries
Sector.
5. Accelerating Infrastructure Development.
6. Resilient and Inclusive Financial Sector.
7. Good Governance and the Rule of Law.
8. Social Development.
9. Peace and Security.
10. Conservation, Protection and Rehabilitation of the
Environment and Natural Resources.
 It is evident from the PDP focused areas that they
cover not only the economic and industrial goals of the
Philippines but also the social, environmental, and
peace and security aspects.

The MDGs and the PDP can help guide the

management of businesses in the Philippines setting. In
particular, the PDP must be taken into consideration in
order to deem management as appropriate or country-
specific.
 Another potential means for economic growth
and development is the planned integration of the
10 Southeast Asian nations in 2015 which include
the Philippines. The association of Southeast Asian
Nations (ASEAN) Economic Community (AEC)
could help the Philippines achieve its goal of
inclusive growth that creates jobs and reduces
poverty.
 According to a joint study by the International Labor
Organization (ILO) and the Asian Development Bank
(ADB) titled “ASEAN Community 2015: Managing
Integration for Better Jobs and Shared Prosperity.”
Released in October 2014, the success of the AEC lies
indecisive actions taken by member states regarding
policy recommendations, strengthening regional
cooperation that may bring about structural changes,
improvement of business and job opportunities and job
quality, enhancement of skills boosting productivity, better
wages and management of labor development are
shared among member countries and sectors.
 Since the AEC is envisioned to become a single
common market and production base for an estimated
600 million people of different nationalities, it means a
freer flow of goods, services, investments, and labor.
The study concluded that “new opportunities for growth
and prosperity may emerge, but the challenge is to
ensure that growth is inclusive and prosperity is
shared.”
 Obviously, managers of businesses here in the
Philippines must be concerned about the findings of the
study, as these are new challenges for them. The
improvement of management style and the skills
training and education of their human resources are
needed in order to cope with the possible changes that
will be brought about by the ASEAN integration in 2015.
Economic Development – is a total process which includes
not only economic growth or the increase in the given amount
of goods and services produced by the country’s economy,
but also consider the social-political, cultural, and spiritual
aspects of the country’s growth.

Economic Development Phases – are the distinct stages

involved in the total process of economic development in a
particular country.
These include 1. economic growth, 2. improvement of the
Human Development Index (HDI), 3. availability of benefits
provided by science and technology, and 4. societal
improvement of the opportunities and general welfare of its
members.
Economic Growth – increase in the given amount of
goods and services produced by the country’s earning.

Improvement of the Human Development index

(HDI) is a summary measure of average achievement
in key dimensions of human development; a long and
healthy life, being knowledgeable and have a decent
standard of living.
 FORMS OF BUSINESS ORGANIZATION

The form of a business

organization may depend on
its purpose, nature of
operations, and resources.
However, a business
organization’s form may
change with the changing
times and the demands they
present.
Changing Forms of Business Organizations

Change is constant and organizations change to

undergo various changes to ensure effectiveness,
efficiency, and relevance in the world of business.

Business organizations may be traditional (simple,

functional, divisional, profit, or non-profit) or
open/flexible in form according to Robbins and Coulter
(20019).
Simple Business Organization

Refer to business organizations

with few departments, centralized
authority with a wide span of
control, and with dew formal rules
and regulations.
These are easy to manage
because of their simple form.
However, change of form follows as
the company expands its
operations.
Functional Business Organizations

these pertains to business organizations that group

together those with similar or related specialized duties that
group together those with similar or related specialized
duties that introduce the concept of delegation of authority to
functional manager, sales manager or financial manager but
allow CEO’s to retain authority for strategic decisions.
Divisional Business Organizations

these are business organization

made up of separate business units
that are semi-autonomous or semi-
independent, with a division head
responsible for his or her unit’s
performance.
In other words, each division has
its own functional organization and its
own general manager; however, the
central headquarters management
maintains responsibility for the
delineation of organizational goals of
the individual divisions.
Profit Business Organizations – these are business
organization design for the purpose of achieving thief
organizations’ mission, vision, goal, and objectives and
maintaining their organizational stability through income
generation and profitmaking activities. Immediate revenues
or cost factors account for their success or failure.

Non-Profit Business Organizations – these are business

organizations designed for the purpose of achieving their
organizations’ mission, vision, goals and objectives,
providing service to clients without expecting monetary gains
or financial benefits for their endeavors , their success or
failure may be measured by the high or low evaluation
scores they obtain.
Open/Flexible
Business
Organizations

these are formed to

meet today’s
changing work
environment.
Business organizations affect and are affected by the
environment; therefore, change becomes inevitable.
Other forms of business organizations:

1. Team Structures – where the organization as a

whole is made up of work teams (small, but focused)
that work together to achieve the organization’s
purpose; popular I collectivist culture.
2. Matrix Business Organizations – those which
assign experts or specialists belonging to different
functional departments to work together on one or
more projects; exhibit dual reporting relationship in
which managers’ report to two superiors – the
functional manager and the divisional manager.
3. Project Business Structure – a business
organizational form with a flexible design, where the
employees continuously work on projects assigned to
them; projects may be short-term or long-term and
members disband when the project is completed.

4. Virtual Business Organization – made up of a

small group of full-time workers and outside experts
who are hired on a temporary basis to work on
assigned projects; members usually communicate
online.
 Other basic forms of business that are legal in the
Philippines are single proprietorship, partnership,
corporation and cooperative. Different organizations
have different preferences as to the business form
that is appropriate for their needs and the purpose of
their existence. Managers, therefore, must be creative
in finding ways to structure or design and organize
work in their respective firms.
REFERENCES

1. Vibal Cabrera,Altarejos, Riaz,(2016) Organization

and Management
2. Zarate C.A. (2016) Organization and Management
3. Payos,Espinosa,Zorilla,(2017) Organization and
Management