THOMAS ROBERT MALTHUS

1766 - 1834

In the last third of the eighteenth century two great problems occupied the attention of most
thinking people in England: one was widespread poverty; the other was how many Englishmen there
were. Socialists called attention to the poverty problem with a promise of a Utopian world – a paradise –
in which all would be well. The population problem had prompted Adam Smith to remark in his Wealth
of Nation (1776) that “No society can surely be flourishing and happy, of which the far greater part of
the members are poor and miserable.”

Were England’s resources adequate to bring about a fulfillment of the socialists’ dreams? A
hitherto unknown English clergyman, Thomas Robert Malthus, thought not in 1798
he published a treatise of fifty thousand words entitled An Essay on the Principle of Population, as
it affects the Future Improvement of Society. The essay was based on his observations and travel
in various countries. From these he expounded his famous rule that “population, when unchecked, goes
on doubling every twenty – five years or increase in a geometric ratio.” but the means of subsistence can
only increase in an arithmetic ratio.
Malthus became a professor of history, and published a revision of his essay in 1803. In this he
moderated his rigid “formula” and spoke more of a tendency of population to outrun the supply of food.
Human beings he concluded were destined to misery and poverty unless the rate of population growth is
retarded either by: (1) preventive checks such as moral restraint, late marriages, and celibacy or if these
fail then by (2) positive checks such as wars, famine, and disease.
Malthus and his population theory were severely criticized by people in nearly every walk of life
– politicians, clergymen, philosophers, and journalists – all of who raised cries of heresy. Some, like the
Quarterly Review (July, 1987), admitted that it was easier simply “to disbelieve Mr. Malthus than to
refute him.” And some, notably Ricardo and other classical economists, made Malthus’ s theory the basis
o their own theories o wages and rent.
The generalizations expressed by Malthus have been recognized by governments throughout the
world, and by the United Nations in its efforts to assist the overpopulated, underdeveloped countries.
Although there may be a tendency to dismiss the gloomy forebodings of the Malthusian theory, its
warnings cannot be pushed aside. They are a stark reality or millions of people in many nations today.
In addition to his population theory, Malthus made outstanding contributions to economics,
notably in his Principles of Political Economy (1820). He was an intimate friend of David Ricardo,
and it is impossible to disassociate their economic views, even though the two men were often in
substantial disagreement. For one thing, Ricardo was as incapable of grasping the pragmatic and
empirical approach of Malthus, as Malthus was incapable of appreciating the rigor and subtle deductive
reasoning of Ricardo.
Among the notable contributions that Malthus made to economic thought was the concept of
“effective demand,” which he defined as the level of aggregate demand necessary to maintain continuous
production. More than a century was to pass before the problem of effective demand would rise again to
public notice: In this General Theory, John Maynard Keynes paid tribute to the pioneering work of
Malthus on his subject.

THE “HOT - BATHS” HYPOTHESIS

The second and third solutions, in varying degrees, have occurred and are continuing to occur in the
economic development of some of today’s advanced nations. The third approach, that of raising the
subsistence level to an aspiration level, is based on a fascinating assumption – one which suggest a
connection between population growth and living standards that may be applicable to the over populated,
underdeveloped countries. It can be called – facetiously – the hot – baths hypothesis:

There may be significant relationship between fecundity and “hot bath.” That is, once a society
reaches a certain minimum level of living at which it has reasonable creature comforts of life – i.e.,
adequate food, clothing, housing, sanitation, etc. – its desire for more and better material things as
measured by its aspiration level continually rises. If this is true, the society’s population will tend
automatically to seek its economically optimum size, provided its living conditions can first be brought
(probably with outside help from other nations) to this minimum
threshold level.

CAPITAL DEEPENING AND DIMINISHING RETURNS

The subsistence theory of wages in the classical model of a stationary state implies the existence of a
subsistence theory of profits as well.
 For example, the model of population growth which was developed in exhibits 3 may be adopted
to serve as a model o the growth o nonhuman capital including buildings, machines, inventories, etc. This
can be doe by measuring the rate of interest along the vertical axis and the total stock of capital along the
horizontal. For simplicity, we may ignore the existence of risk, so that the rate of interest is the same as
the rate of profit. (Can you explain why?). The curve LL is the profit curve of capital, which result from
applying different amounts capital to a fixed quantity of other resources.
When looked at in this way, the model indicates the capital is accumulated in anticipation of
future interest returns or profits. Thus when the stock of capital in the economy is relatively low, the
anticipated return on capital is high, thereby encouraging further accumulation. As capital is accumulated,
however, the law of diminishing returns eventually sets in. If we suppose that OS represents the
“subsistence rate” of profits, capital accumulation will proceed to OM.

JOHN STUART MILL

1806 – 1873

The Wages – fund Theory

John Stuart Mill Was an eminent philosopher and social scientist, and the leading economist of the mid –
nineteenth century. In many ways, he was one of the most unusual men who ever lived.
Any discussion of Mill must make mention of his remarkable education, based on the experience
reported in his famous Autobiography. He was the son of James Mill was also an intimate friend of

David Ricardo and of the great utilitarian philosopher Jeremy Bentham. This intellectual background
exercised a profound influence on the younger Mill, who was educated at home by his father.
Thus, at the age of three, before most children can even recite the alphabet, John Stuart was
reading English fluently and began the study of Greek. By the time he was seven, he had read the
dialogue of Plato, the great books of the ancient Greek historians Herodotus and Xenophon, the
philosophical writings of Diogenes, and most of the nearly eighty works of the second century Greek
prose writer Lucian. At the age of eight he took up the study of Latin. Before he was twelve years old, he
had already digested, among other things, the major writings of Aristotle, Aristophanes, Horace,
Lucretius, Sallust, and Socrates; made a comprehensive survey of algebra, calculus, and geometry;
embarked on a serious study of logic through the writings of the early seventeenth – century British
philosopher Thomas Hobbes; and written, in addition to some verses, a “history of Holland,” and the
“Abridged Ancient Universal History.”
At the age of thirteen, his father to the books of Smith, Ricardo, and Malthus introduced John
Stuart. Thus began his education political economy – an education that eventually established him as one
of the abler critics of classical economic liberalism. For although Mill as an economist is considered a
member of the classical school, he actually repudiated some of its most basic premises. In contrast to
Smith, for example, he did not believe that laissez – fair led to the best of all possible worlds. Instead he
advocated social reforms. These included the taxation and redistribution of wealth, a shorter working
day, abolition of the wage system, and the establishment of democratic producers’ cooperatives in which
the workers would own the factories and elect the managers to run them. It should be emphasized,
however, that Mill believed too strongly in individual freedom ever to go far as a socialist. He distrusted
the power of the state, and his reason for favoring producers’ cooperatives was not to exalt the laboring
class, but to assure the individual worker the fruits of his labor.
Mills’ chief contribution to economics was his collection and systemization of its literature. His
major two – volume work, the Principles of Political Economy, published in 1848, was considered to
be a masterful synthesis of post – Ricardian economic writings. The book offered a calm prescription for
peaceful progress and served as a standard text in economics for several decades. It is a noteworthy
coincidence that in the same year, an incendiary pamphlet entitled the Communist Manifesto was
published by a then relatively unknown prophet of socialism, Karl Marx, whose ideas ultimately shook
the world.
As for Mill himself, few individuals were ever held in higher esteem. Like the great and beloved
Greek philosopher Plato of some 2,200 years earlier, Mill was selfless man with a gentle, kind and
reasonable manner that endeared him to every one. He was regarded with the deepest affection and
respect indeed, he was regarded with the deepest affection and respect indeed, and he was almost
worshiped – by his contemporaries throughout the world. And like Plato, when he died an entire nation
mourned his passing. .
It is custody among economists to refer to an increase in the stock of capital relative to other
resources, especially labor, as capital deepening. What are the effects of such a deepening, assuming that
there are no changes in techniques? Clearly, with the operation of the inexorable law of diminishing
returns, the interest or profit rate on capital must decline, while the real wages o labor must rise as this
resource becomes more and more scarce relative to the growing stock o capital.
CONCLUSION: THE CLASSICAL VIEW OF GROWTH
What are the long – Run Trends?
What factors that Determine Economic Growth?
QUANTITY AND QUALITY OF HUMAN RESOURCES
QUANTITY AND QUALITY OF “NATURAL” RESOURCES
ACCUMULATION OF CAPITAL
SPECIALIZATION AND SCALE OF PRODUCTION
RATE OF TECHNOLOGICAL PROGRESS
ENVIRONMENTAL FACTORS
CONCLUSION: THE PROBLEM OF MEASUREMENT
A SIMPLE GROWTH MODEL
THE CAPITAL – OUTPUT RATIO
Investment and the Growth of Capacity at full Employment
FULL EMPLOYMENT GROWTH RATE
The Full Employment Rate of Economic Growth
SUMMARY OF IMPORTANT IDEAS
FOR HOMEWORK AND DISCUSSION

Ecology and the Economics of Pollution

The Walrus and the Carpenter

Were walking close at hand
They wept like anything to see
Such quantities of sand;
“If this were only cleared away,”
They said. “it would be grand”

“If seven maids with seven mops

Swept it for half a year
Do you suppose.” The Walrus said.
“That they could get it clear?”
“I doubt it,” said the Carpenter.
And shed a bitter tear.

ECOLOGY is a study of the relationships or

interdependencies between living organism and their
environment, both at a micro and macro level, in order to
see how the function together in their so-called “eco-
systems”.
Elements of an Ecosystem: The Web of Life

1. Nonliving or inorganic matter

2. Producer plants
3. Animal consumer
4. Decomposers

SIMILARITIES BETWEEN ECOLOGY AND

ECONOMICS
1. Population the populations are classified by species
that is groups of things which have certain common
characteristics or qualities that distinguish them as a
whole from all other organism.

2. Equilibrium this requires that the birth and death

rates of all species in the system be equated. In
economics this is represented by the rate of production
of commodities and the consumption of commodities

3. Exchange it takes place between the four sectors or

elements that comprise the ecosystem. The non living
sector gives up sunlight, water, carbon dioxide, organic
compounds and other nutrients to the producer plants
sector, which in turn gives up carbohydrates to the animal
consumers sector and so on. In economics exchange takes
place between consumers and producers, retailers and
wholesalers, management and workers, household, business
and management.

4. Development the ecological process itself may bring

about long-run growth or decline.
Thus a lake may, through a gradual process of change
among its four ecological sectors, eventually turn into a
desert, a swamp, and a forest. An economic system for
example may experience growth or decline, maturity,
boom, surplus, deficit, stagflation, recession and even
recovery.
 5. Policy. Man intentionally adopts policies, which
change the natural processes of the ecosystem so that
he can achieve particular objectives. In economics and
other sciences man establishes policies in the form of
customs and laws for the purpose of adjusting the
economic or social system in which he lives to his own
values and ideals.
FUNDAMENTAL CAUSES OF POLLUTION;

1. SOCIETY’S PREOCCUPATION WITH ECONOMIC

GROWTH
2. THE TREND TOWARD OVERPOPULATION
3. TOO MUCH PRIVATE RELATIVE TO PUBLIC
SPENDING

COST OF PRODUCTION

Cost is a sacrifice that must be made in order to acquire

something. The sacrifice may include monetary and non-
monetary elements

Opportunity costs are critical in economics because they

measure the value of a foregone alternative. Opportunity
costs arise because resources are limited and have
alternative uses.

Economic costs are payments that must be made to

attract resources. Such costs include not only explicit costs
or money expenditures or resources, but also the implicit
costs of self-owned or self-employed resources.

The law of diminishing returns – a more general name

is the law o variable proportion
States that what happens to output when a variable output
is combined with fixed inputs. Although the law covers
total, average, and marginal returns, the last is most
important where output changes are involved.
Graphically, marginal product always intersects average
product at its maximum point.

There are three families of costs: total, average and

marginal. The family of total costs consists o total fixed
costs, which do not vary with output and total variable
costs, which increase as output increases. The family of
average costs consists of average fixed cost, which is the
ratio of total fixed cost to quantity, and average variable
cost, which is the ratio o of total variable cost to quantity.
Marginal cost is a one-member family consisting of
marginal cost alone: it is the change in total cost resulting
from a one-unit change in output.

WILLIAM STANLEY JEVONS

1835-1882
Marginal Utility Theorist-Mathematical Economist
“Repeated reflections and inquiry have led to the somewhat novel opinion that value depends
entirely upon utility. Prevailing opinions make labor rather than utility the origin of value; and
there are even those who distinctly assert that labor is the cause of value.

These were the words with which the great English economist JEVONS introduced his major work
in economics; a book entitled Theory of Political Economy

JEVONS is one of the towering figures in the development of economic thought. He made many
significant contributions to value and distribution theory, capital theory, and to statistical research
in economics. But he is perhaps best known as a leading contributor to marginal utility analysis.
In one of the key passages of his book, he points out that exchange between two individuals will
cease when “ the ratio of exchange o any two commodities is … the reciprocal o the ratio of the
final degrees of utility of the quantities of commodity available or consumption,” which is just a
clumsy way of saying that in equilibrium marginal utilities will be proportionate to prices.

JEVONS was educated in England; he majored in chemistry and the natural sciences, but
maintained a strong interest in philosophy, science, logic, mathematics, and political economy. He
served as a professor at Owens College. His main work, however, was Theory of Political
Economy, mentioned above, in which he made clear his desire to develop economics as a
mathematical science.

“It is clear that Economics, if it is to be a science at all, must be a mathematical science. There
exists much prejudice against attempts to introduce the methods and language of mathematics into
any branch of the moral sciences. Many persons seem to think that the physical sciences form the
proper sphere o mathematical method, and that the moral sciences demand some other method – I
know not what. My theory of Economics, however, is purely mathematical in character. Nay,
believing that the quantities with which we deal must be subject to continuous variation. I do not
hesitate to use the appropriate branch of mathematical science , involving though it does the
fearless consideration of infinitely small quantities. The theory consists in applying the differential
calculus to the familiar notions of wealth, utility, value, demand, supply, capital, interest , labor and
all the other quantitative notions belonging to the daily operations of industry.

JEVONS also did pioneering work in statistics and business forecasting. He formulated statistical
correlations and forecasts of business and economic data which he sold to businessman.
THORSTEIN BUNDE VEBLEN
1857- L929
The Great Iconoclast-Institutionalist

Historically, Veblen was part of what is known as the institutionalist school of economic thought.
He believed that human behavior could best be understood in terms of the practices and customs of
society, its methods of doing things, and its ways of thinking about things, all of which composed
“settled habits of thought common to the generality of men”. These habits become institutions-
deeply ingrained patterns of thought and action on which
All material civilization is built.

Institutions are not permanent. They unfold and grow into new patterns o change. In this sense,
socioeconomic behavior is more evolutionary and dynamic than it is mechanistic-more like biology
than physics-because it is devoid of the natural, normal, controlling principles that are found in the
writing of marginal utility theorists and other classical economist

The Theory of Leisure Class is often required reading even today for students taking courses in
sociology. In this book he coined a famous phrase, conspicuous consumption, by which he meant
the tendency of those above the subsistence level, i.e. the leisure class, to be mainly concerned with
impressing others through standards of living, taste, and dress- that is, through what he called
”pecuniary emulation”- which is the hallmark of society. This Veblen argued, was a “commonly
observed pattern of behavior” which was contrary to marginal utility theory, for it could clearly
could imply that people may sometimes buy more of a good at higher prices than at lower prices in
order to impress others.

KARL HEINRICH MARX

1818-1883

If it is true that a man is ultimately judged by the influence of his ideas, then Karl Marx surely
ranks as one of the most important individuals who ever lived. For his thoughts have
shaped the policies of nations and have affected the lives of millions of people.

During the 1840’s while Marx was still in his twenties, he spent short period in Germany, France
and Britain, always one step ahead of the police who continually sought to expel him because of his
incendiary articles in newspapers and other periodicals extolling communism and revolution, and
his attacks against religion and utopian socialism. “ Religion,” he once wrote in a quotation that
has since become famous,” is the sight of the oppressed creature,… the opium of the people
Ecology is concerned with the management of the household of nature, whereas economics deals
with the management of the household of man. Both disciplines have certain features in common
including concepts of population, equilibrium, exchange, development and policy.

Economic growth has given us a rising standard of living, but it has also caused pollution.
However, it is not likely that a planned reduction in the rate of growth would be an acceptable
weapon in the war against pollution. A much more effective method would be for society to
evaluate the costs of using various parts of the environment, and to assign appropriate prices for
these resour5ces instead of making them available free.

The growth of population has also been a cause of pollution. However, the problem is much more
complex than population figures alone would indicate. Many ecologists point out that the level and
growth rate of population in Asia and Latin America are far higher than in the United States, yet
the average American as a consumer is a much greater burden on the total environment than the
average Asian of Latin
American.

Some people contend that the composition of GNP is a third cause of pollution because too few
public goods and too many private goods are produced. It is doubtful very much can be
accomplished by changing the composition, because: a) a large proportion of public goods consists
of material goods rather than just services; and) there is ample evidence that a free society is not
willing top sacrifice very much in the way of consumer goods in order to get more services.

MANAGEMENT ECONOMICS 2
ADVANCED MACROECONOMICS

The balance of payments is a statement of the money value of all transactions that take place
between a nation and the rest of the world during a given period. These transaction may consist of
imports and exports of goods and services, and movements of short-term and long-term
investments, gifts, currency, and gold; they may be classified for convenience into several
categories: current account, capital account, unilateral transfer account, and gold account.

BALANCE OF PAYMENTS DISEQUILIBRIUM the sum of autonomous payments. A deficit

disequilibrium occurs when total autonomous payments exceed total autonomous receipts;
conversely a surplus disequilibrium occurs when total autonomous receipts exceed autonomous
payments.
CASE DIGEST

JIM RUTLEDGE; A MAN OF MYSTERY

Jim Rutledge had been impressive in his quest to land a sales job with Scientific Research Services
(SRS), a national firm specializing in consumer opinion surveys for the toy industry. Dave Ryan,
district sales manager for SRS, would be Rutledge’s immediate supervisor if he came to work for
SRS. Ryan had been one of six SRS executives to interview Rutledge, and like the others, he found
the candidate to be articulate, quick-witted, engaging, and immediately likable. On paper,
Rutledge also appeared to be an ideal candidate. He met or exceeded all of the stated job
qualifications regarding education and prior experience.

Among his qualifications, Rutledge had an undergraduate degree in marketing from Arizona State
University and three years’ sales experience with Mattel. He was nearing completion of an MBA
degree from Tulane University, which he had been pursuing on a part-time basis over the past
three years.

SRS has decided to offer Jim Rutledge n sales position. Dave Ryan has spoken with Rutledge on
the telephone and advised him that a formal offer letter was mailed earlier in the day. He verbally
outlined the offer to Rutledge, who seemed excited and agreed to accept the offer, pending receipt
of the written offer.

After getting off the phone with Rutledge, Ryan began calling the individuals that Rutledge had
listed as references. He called the company Rutledge had worked for prior to Mattel but did not
get much information. Basically, the contact confirmed Rutledge’s dates of employment and
indicated that Rutledge would receive positive consideration if he should reapply for a job with the
company. Next, he called a marketing professor at Arizona State University. When he reached the
marketing department, however, he was told that no such professor was now or had ever been on
the marketing faculty at the university.

Puzzled, Ryan called the next individual on the reference listing, Dr. Basin, head of the MBA
program at Tulane University. Dr. Baskin informed Ryan that he had no recollection of any
student by the name of Jim Rutledge, but he checked the enrollment records to be certain. Dr.
Baskin called Ryan back within the hour with the news – no student by the name of Jim Rutledge
had ever been a student at Tulane. Dave Ryan hung up the phone and began pondering his next
move.

QUESTIONS;

1. What would you do at this point if you were Dave Ryan?

2. How reliable is information gained from references?
3. How could the content of the written offer letter affect Ryan’s next move?
SUMMARY

1. Explain the critical role of recruitment and selection in building and maintaining a
production salesforce. Recruitment and selection of salespeople can be an expensive
process, characterized by uncertainty and complicated by legal considerations. If the
procedures are not properly conducted, a multitude of managerial problems can rise, the
worst of which being that salesforce performance is sub optimal. The sales manager is the
key person in the recruitment and selection process, although other managers in the hiring
firm may share responsibilities for staffing the salesforce.

2. Identify the key activities in planning and executing a program for salesforce recruitment
and selection. There are three steps in the process: planning, recruitment, and selection.
Planning consists of conducting job analysis, determining job qualifications, writing a job
description, setting objectives, and formulating a strategy. Recruitment involves locating
prospective job candidates from one or more sources within or outside the hiring firm. The
third step, selection, entails an evaluation of the candidates culminating in a hiring decision.
Major methods of evaluating candidates include resume and job-application analysis,
interviewing, testing, assessment centers, background investigation, and physical
examination.

3. Discuss the legal consideration in salesforce recruitment and selection. Every step of the
recruitment and selection process has the potential to illegally discriminate against some job
candidates.

4. Discuss the ethical concerns of salesforce recruitment and selection. Two primary ethical
concerns are 1) misrepresentation of the job to be filled and 2) utilizing stress interviews in
the selection stage.

5. Some special issues in recruitment and selection are 1) the increasing usage of part-time
salespeople, 2) the use of market bonuses, and 3) assisting cooperative channel members in
recruiting and selecting their salespeople.

6. Socialization, the process by which salespeople adjust to their jobs, begins when the hiring
firm first contacts the recruit. Two stages of socialization should be accomplished during
recruitment and selection: achieving realism and achieving congruence. Realism means
giving the recruit an accurate portrayal of the job. Congruence refers to the matching
process that should occur between the needs of the organization and the capabilities of the
recruit. If realism and congruence can be accomplished, future job satisfaction,
involvement, should be improved…

CHAPTER 10 CONTINUAL DEVELOPMENT OF THE SALESFORCE

Common mistakes in executing sales techniques

1. Ineffective listening and questioning

2. Failure to build rapport and trust
3. Poor job prospecting for new accounts
4. Lack of preplanning of sales calls
5. Reluctance to make cold calls
6. Lack of sales Strategies or different accounts
7. Failure to match call frequency with account potential
8. Spending too much time with old customers
9. Over- controlling the sales call
10. Failure to respond to customer needs with related benefits
11. Giving benefits before clarifying customer needs
12. Ineffective handling of negative attitudes
13. Failure to effectively confirm the sale
.
METHODS HAVE NEEDS ASSESSMENT

1. Salesforce Audit - is a systematic, diagnostic, prescriptive tool, which can be employed on a

periodic basis to identify and address sales department problems and to prevent or reduce
the impact of future problems.
2. Performance Testing – specifies the evaluation of particular tasks or skills of the salesforce.
3. Observation – Sales managers spend a considerable amount of time in the field working
with salespeople.
4. Salesforce Survey – may be completed as an independent activity or combined with other
sales management activities such as field visits or even included as part of the routine
salesforce reporting procedures.
5. Customer survey - helps determine how competitive the salesforce is compared with other
salesforce in the industry.
6. Job Analysis – is an investigation of the tasks, duties and responsibilities of the sales job.

TYPICAL SALES TRAINING NEEDS

1. Orientation and Socialization

2. Product Knowledge
3. Customer Knowledge
4. Competitive Knowledge
5. Time and Territory Management
6. Ethical and Legal Issues

TRAINING OBJECTIVES:

1. Increase sales or profits

2. Create positive attitudes and improve salesforce morale
3. Assist in salesforce socialization
4. Reduce role conflict and ambiguity
5. Introduce new products, markets, and promotional programs
6. Develop salespeople for future management positions
7. Ensure awareness of ethical and legal responsibilities
8. Teach administrative procedures like expense accounts and call reports
9. Ensure competence in the use of sales support tools such as portable computers
10. Minimize salesforce turnover
11. Prepare new salespeople for assignment to a sales territory
12. Improve teamwork and cooperative effort

SALES TRAINING METHODS:

1. CLASSROOM CONFERENCE TRAINING - frequently used for training on basic

product knowledge, new-product introductions, administrative procedures, and legal and
ethical issues in personal selling.
2. ON- THE—JOB – TRAINING it puts the trainee int6o actual work circumstances, under
the observant eye of the mentor or sales manager.
3. BEHAVIORAL SIMULATION - Methods that focus on behavioral learning by means of
business games and simulations, case studies and role playing, where trainees portray a
specified role in a staged situation.
4. ABSORPTION TRAINING – involves furnishing trainees or salespeople with materials
that they absorb without opportunity for immediate feedback and questioning.
Management is the attainment of organizational goals in an effective and efficient manner through
planning, organizing, leading, and controlling organizational resources.

Resources - includes human, Financial, Raw materials, technological, and Information.

Organization- a social entity that is goal directed and deliberately structured.

Frederick Winslow Taylor ( 1856 – 1915)

Taylor’s theory that labor productivity could be improved by scientifically determined
management practices earned him the status of father of scientific management.

Scientific Management – sub-field of the classical management perspective that emphasized

scientifically determined changes in management practices as the solution to improving labor
productivity.

Characteristics of Scientific Management:

General Approach:
- Developed standard method for performing each job
- Selected workers with appropriate abilities for each job
- Trained workers in standard method
- Supported workers by planning their work and eliminating interruptions
- Provided wage incentives to workers for increased output.

Contributions:
- Demonstrated the importance of compensation for performance
- Initiated the careful study of tasks and jobs
- Demonstrated the importance of personnel selection and training.

Criticisms:
- Did not appreciate the social context of work and higher needs of workers
- Did not acknowledge variance among individuals
- Tended to regard workers as uninformed and ignored their ideas and suggestions.

Effective Management is always contingency, or situational management. The very concept of

management used involves the design of an environment in which people working together in
groups can accomplish objectives. Management is all about the application of knowledge to
realities in order to attain desired results.

Manager’s total environment is affected by the following factors:

- economic
- technological
- social
- political
- spiritual
- ethical

What managers do in practice must reflect and be modified by the contingencies and situations of
human factor they face.
There is no basic distinction made among managers, executives, administrators or supervisors. To
be sure, the environment of each may differ, the scope of authority held may vary, and the types of
problems dealt with may be considerably different. A person in a managerial role may also act as a
salesperson, engineer or financier. But the fact remains that, as managers, all who obtain results
by establishing an environment for effective and efficient performance with individuals operating
in groups undertake the same basic functions.

In all kinds of enterprises, whether business or non-business, the logical and social goals o all
managers must be surplus – by which it is meant that they must establish an environment in which
individuals, working together in groups, can accomplish purposes or objectives with the least
amount of such inputs as time, money, materials, and dissatisfaction, or in which they can achieve
as much as possible of a desired mission or objective with the resources available.

In 1993 the Bank of America reported in its publication, small business reporter. In the final
analysis 90% of the business failures are due to managerial incompetence and inexperience.

Strategies – general program of action and deployment of emphasis and resources to attain
comprehensive objectives, the program of objectives of an organization and their changes,
resources used to attain these objectives and policies governing.

Systems – a set o assemblage of things connected or interdependent, so as to form a complex unity

REASONS WHY DO WE HAVE SO MANY BUSINESSES;

1. abundance of natural resources

2. the easiest way to earn and make money than other professions
3. cause of human needs
4. population growth
5. size of the family
6. means o livelihood and provides employment
7. emergence of research and development
8. governmental policies

THE NATURE OF MANAGER’S DEVELOPMENT;

Manager development concerns the means by which a person cultivates skill whose application
will improve the efficiency and effectiveness with which the anticipated results of a particular
segment are achieved.

A skilled manager makes wise decision, selective listening, attention to appropriate detail,
conceptualizing problems and analyzing them, seeing them in the total environment, encouraging
people to work with zeal, interpersonal cooperation, assessing the present and future, timing and
intuition are a few o them.

Economic enterprises are designed to produce goods and services to satisfy people’s materials
wants. Their manager’s responsibility is efficiency in the use of resources to produce economic
wealth. Second is to accomplish this purpose in such a way that no restriction is placed upon the
legal rights and interest of any person. Third is to observe by word and deed, the ethical standards
of society.

MOTIVATION

The primary task of managers is to get people to contribute activities, which help to achieve
the mission and goals of an enterprise or of any department or other organized unit within it.

1. Why labor is the cause of value?

2. Economic Growth alone will cure poverty, that a rising tide will lift all boats. Defying gravity,
recent economic tides have flowed uphill, primarily helping those who were already on top. There
is, therefore, a need for a deeper examination of the economic theory of the causes, and cures for
inequality. Comment.
3. GIVEN;

Q TFC TVC
0 75,000 0
1 75,000 50,000 REQUIRED;
2 75,000 75,000
3 75,000 85,000 1. Compute for
4 75,000 100,000 a. Total Cost or TC
5 75,000 125,000 b. Marginal Cost = MC
6 75,000 130,000 c. Average Fixed Cost = AFC
7 75,000 150,000 d. Average Variable Cost = AVC
8 75,000 165,000 e. Average Total Cost = ATC
9 75,000 185,000
10 75,000 200,000
11 75,000 220,000
12 75,000 240,000
13 75,000 270,000
14 75,000 290,000
15 75,000 300,000
Chapter 13 COMMERCIAL BANKS

A commercial bank derives its name from the fact that its business is confined largely to
transactions with businessmen and business firms. Loans made by commercial banks, as largely
indicated extend to short periods ranging from thirty to ninety days.

MAJOR FUNCTIONS OF COMMERCIAL BANKS;

1. Depository function
2. Loan and discount function
3. Remittance and collection function
4. Trust or fiduciary function
5. Miscellaneous services

Principal Instruments of commercial banks;

1. Money and currency

2. Checks
3. Bills of exchange
4. Promissory notes
5. Letters of credit

Bank deposit to refer only to an entry in the books of a bank recording its obligation to its
customer.

FORMS IN, WHICH DEPOSITS COME TO A BANK;

1. Money
2. Checks issued by banks
3. Items for collection from banks and others
4. Proceeds of loans and discounts left on deposit
5. Traveler’s checks
6. Drafts
7. Promissory notes
8. Money orders

Classification of deposits;

A. According to source of deposit. This includes from the private sector and from
the government sector
B. According to terms of withdrawal. This includes time deposit, savings deposit,
time certificates of deposit

Checking Account Advantages;

1. The money being deposited in a bank is doubtless safe and moreover could be easily
transferred very conveniently by the depositor simply by writing checks.
2. Corollary to the first, monetary obligations could be easily discharged by checks.
3. The check stubs provide a convenient record of deposits, withdrawal, as well as, of
course bank balances.
4. A checking account helps to enhance one’s personal and business standing

SECRECY OF BANK DEPOSITS.

For the benefit of depositors, Republic Act No. 1405 was enacted which expressly prohibits
banks from disclosing deposits made by an individual, partnership or corporation with them.
 The law sets four conditions, which may allow banks to reveal deposits;
1. When the depositor himself in writing to the bank gives such authority.
2. If the deposit is brought up in impeachment cases.
3. If the money deposited is the subject of litigation
4. Upon order of a competent court, a bank deposit may be examined if the case
involves bribery, dereliction of duty or one that arises from violation of the anti-
graft and corrupt practices Act.

Presidential Decree.

Another important step taken for the benefit of bank depositors is that presidential
decree which amended the General Banking Act. It now reads in part;

No director or officer of any banking institution shall, either directly or indirectly, for
himself or the representative or agent of others, borrow any of the deposits of funds of such bank,
nor shall he become a guarantor, endorser, or surety for loans from such bank to others, or in any
manner be an obligor for money borrowed from the bank or loaned by it, except with the written
approval of the majority of the directors of the bank, excluding the director himself.

TYPES OF LOANS;

Demand loan is sometimes termed as call loan, since it is subject to the call of the bank,
as its option. Under the conditions of this loan, the bank exercises the right to call or collect the
loan obligation from the borrower anytime as need for it on the part of the bank may arise. As
such, the borrower is, legally and morally speaking, obligated to pay his loan when requested or
directed to do so.

Time loan. As the term suggest its meaning, there is a specific period of time in which
the loan would mature and therefore become due and payable. Time-loan may be of short duration
as in the case of short-term loan or it may be medium-term. In some cases it may cover a long
period of time ranging from ten years or upwards as when the loans are intended for
developmental purposes.

Secured or Unsecured loan. Loans, which the creditor company requires to be backed
up by collaterals. Such collaterals may be in the form of corporate securities like bonds and stocks,
instruments of ownership of commodities or manufactured goods, like for instance, bills of lading
and trust receipts.

CLEARING, HOUSE, IT’S ORIGIN

The idea of having a clearinghouse originated in London, England in the year 1773.

In 1833, Albert Gallatin, a prominent banker of his time and able economist suggested to his
banking associates to establish a clearing house in New York similar to that one in England.
However, the idea did not come to realization till 20 years later, that is, in 1853.

In the Philippines, the first clearing house was established in Manila before the outbreak of
the first world war. This was known as the Manila Clearing House. With the enactment of
Republic Act Number 265 (Central Bank Act), the central Bank has provided for facilities for
interbank clearing and settlement under Section 107.

BANK HOLIDAY The term is used to refer to the declaration by the head of a state suspending all
bank transactions for a specified period. During such period, banks are closed for business.

The most well-known bank holiday within living memory occurred in the United States when on
March 6, l933 President Franklin D. Roosevelt ordered all banks closed in a proclamation he issued
under the powers of wartime act of October 6, l917, which authorized the President to regulate
transactions in foreign exchange and the export or hoarding of gold or silver coin bullion.

BANK RUN in its popular usage means that the bank has become insolvent to the extent that it
cannot meet its deposit obligations to its depositors. A bank run need not necessarily mean that
The bank is in an actual state of bankruptcy although this is the most common cause behind it.
Such a situation might have been brought about by poor bank management combined with fraud
and violation of banking laws generally classified under the heading internal causes.
CHAPTER 14 CENTRAL BANKING

A Central Bank is a financial institution vested by the state with the function of regulating the
supply, cost and use of money with a view to promoting national and international economic
stability and welfare.

The bank in any country to which has been entrusted the duty of regulating the volume of
currency and credit in that country.

Historical Background. As early as the year l939, or some ten years before the Central Bank
of the Philippines came into being, there was already a desire as well as an attempt to establish a
central bank in this country. During that time, while the Philippines was still a commonwealth a
Central Bank Act was passed by the National assembly – a unicameral law-making body of this
country

The Central Bank of the Philippines came into existence as a result of the approval by Pres.
Elpedio Quirino of Republic Act No 265, otherwise known as the Central Bank Act on June l5,
1948. However, actual operations id not commence until January 3, 1949 when the Bank opened its
doors for business in the old Intendencia Building located at Intramuros, Manila

Basic Objectives:
1. To maintain monetary stability in the Philippines;
2. To preserve the international value of the peso and the convertibility of the peso into
other freely convertible currencies
3. to promote the rising level of production, employment, and real income in the
Philippines.

AUTHORITY GRANTED TO MONETARY BOARD

1. Prepare and issue such rules and regulations, as it considers necessary for the
effective discharge of the responsibilities and exercise of the powers assigned to the
Monetary Board and to the Central Bank.
2. Direct the management, operations, and administration of the Central Bank and
prepare such rules and regulations as it may deem necessary or convenient for this
purpose;
3. On the recommendation of the governor, appoint, fix the remunerations, and remove
all officers and employees of the Central Bank, with the exception of the governor;
4. Authorize such expenditures by the Central Bank as are in the interest of the
effective administration operation of the bank.

TAXATION - the process or means by which the sovereign, through its law-making body, raises
income to defray the necessary expenses of the government. It is merely apportioning the cost of
government among those who in some measures are privileged to enjoin its benefits and, therefore,
must bear its burden.

Purpose of Taxation.
The primary purpose of taxation on the part of the government is to provide funds or
property with which to promote the general welfare and protection of its citizens.

TAXES - are enforced contribution from persons and property levied by the law-making body of
the state by virtue of its sovereignty for the support of the government and all public needs.

Essential characteristics of TAX.

1. It is an enforced contribution.
2. It is generally payable in money
 3. It is proportionate in character
4. It is levied on persons or property
5. It is levied by the state which has jurisdiction over the person or property
6. It is levied by the law-making body of the state.
7. It is levied for public purpose.

CLASSIFICATION OF TAXES

1. As to subject matter or object;

A. Personal, poll, or capitation

B. Property (Real estate tax)
C. Excise (Income tax, value-added tax, estate tax, donors tax)

2. As to who bears the burden:

A. Direct ( corporate and individual income taxes; community or residence tax;

estate tax; donor’s tax}
B. Indirect – tax which is demanded from one person in the expectation and
intention that he shall indemnify himself at the expense of another. ( excise
taxes on certain specific goods; percentage taxes; customs duties.)

3. as to determination of amount

A. Specific – tax of a fixed amount imposed by the head or number, or by some

standard of weight or measurement ( Taxes on distilled spirits; wines; and
fermented liquors; cigars and cigarettes)
B. Ad valorem –Tax of a fixed proportion of the value of the property with
respect to which the tax is assessed; it requires the intervention of assessors or
appraiser. ( real estate tax, excise taxes on automobiles, non-essential goods as
jewelry and perfumes)

4. As to purpose:

A. General, fiscal, or revenue - tax imposed or the general purposes of the

government, i.e. to raise revenue for governmental needs ( Almost all taxes)
B. Special or regulatory – tax imposed for a special purpose, i.e. to achieve some
social or economic ends irrespective of whether revenue is actually raised or
not. ( Protective tariffs or customs duties on imported goods to enable similar
products manufactured locally).

5. As to scope ( or authority imposing the tax)

A. National – tax imposed by the national government ( National internal revenue

taxes imposed by special laws)
B. Municipal or local – Tax imposed by municipal corporations or local
government units. ( real estate tax; professional tax)

6. As to graduation or rate;

A. Proportional – tax based on a fixed percentage of the amount of the property,

receipts, or other basis to be taxed.
B. Progressive or graduated – tax the rate of which increases as the tax base or
bracket increases. ( income tax, estate tax, donor’s tax)
C. Regressive – tax the rate o which decreases as the tax base or bracket
increases, i.e. the tax rate and the tax base move in opposite directions.

Terms defined;
 1. Toll has been defined as a sum of money for the use of something, generally applied to
the consideration which is paid for the use of a road, bridge or the like, of a public
nature
2. Penalty is any sanction imposed as a punishment for violation of law or acts deemed
injurious. Thus, the violation of tax laws may give rise to imposition of penalty.
3. Special assessment is an enforced proportional contribution from owners of lands
especially or peculiarly benefited by public improvements.
4. License or permit fee is a charged imposed under the police power for purposes of
regulation. It is the legal compensation or reward of an officer for specific services.
5. Subsidy it is a pecuniary aid directly granted by the government to an individual or
private commercial enterprise.
6. Revenue it refers to all the funds or income derived by the government, whether from
tax or from whatever source and whatever manner.
7. Internal revenue it refers to taxes imposed by the legislature other than duties on
imports and exports.
8. Customs duties – they are taxes imposed on goods exported from or imported into a
country.
9. Tariff - are duties payable on goods imported or exported.
10. Power of eminent domain is the power of the state or those to whom the power has
been delegated to take private property for public use upon paying to the owner a just
compensation to be ascertained according to law.
11. Police power has been referred to as the power of the state to enact such laws in
relation to persons and property as may promote public health, public morals, public
safety and the general prosperity and welfare of the inhabitants. Examples of police
power laws are those requiring a license for the practice of medicine, punishing
vagrancy and prostitution; regulating the use of traffic on roads; requiring a license
for the right to drive motor vehicles, providing for zoning regulations; regulating
prices of commodities and rents of apartments; and authorizing the removal of
billboards offensive to sight.
12. Tax Evasion is the use by the taxpayer of illegal or fraudulent means to defeat or
lessen the payment of a tax. It is also mean tax dodging. It is punishable by law.
Examples; deliberate failure to report taxable income or property; deliberate
reduction of income that has been received.
13. Tax Avoidance is the use by the taxpayer of legally permissible alternative tax rates or
methods of assessing taxable property or income in order to avoid or reduce tax
liability. It is also called tax minimization. The term may be extended to include
situations where a person refrains from engaging in some activity or enjoying some
privilege in order to avoid the incidental taxation.

TAX EXEMPTIONS PROVIDED FOR IN THE CONSTITUTION;

1. Exempted to pay from property tax are charitable institutions, churches and
parsonages or convents, mosques, and non-profit cemeteries, and all lands, buildings,
and improvements actually, directly, and exclusively used for religious, charitable, or
educational purposes.
2. Exempted from taxes and duties all revenues and assets of non-stock, non-profit
educational institutions used actually, directly, and exclusively for educational
purposes and subject top conditions prescribed by law, all grants, endowments,
donations, or contributions used actually, directly and exclusively for educational
purposes.

The following tax exemptions are among others, specifically provided for in the National Internal
Revenue Code;

1. From income tax

a. Labor, agricultural, or horticultural organization not organized principally
for profit;
b. Cemetery company owned and operated exclusively for the benefit of its
members;
 c. Non-stock corporation or association organized and operated exclusively for
religious, charitable, scientific, athletic, or cultural purposes.
d. Business league, chamber of commerce or board of trade not organized for
profit.
e. Civic league or organization not organized for profit.
f. A non-stock and non-profit educational institutions, and government
educational institution.
g. Mutual savings bank not having a capital stock represented by shares and
cooperative banks without capital stock organized and operated for mutual
purposes and without profit; and development banks.
h. General professional partnership, which is one formed by person for the sole
purpose of exercising their common profession no part of the income of which
is derived from engaging in any trade or business.

2. From Donor’s tax:

a. Donations to the Philippine government for scientific, engineering and

technological research, invention and development. R. A. No. 1606)
b. Donations to social welfare, cultural and charitable institutions (P. D. No. 507;
see R. A. No. l606.)

LEADERSHIP

The two terms leadership and team building are not foreign to us. In fact, all of us are respected
leaders in our own right. And as leaders, we have been involved in team-building which is an
essential component of leadership development.

The primary purpose of this paper is to present a review of some definitions and concepts of
leadership and discuss the basic process of team building. It will also present a conceptual
framework on leadership and team building in any field.

Definitions and concepts of Leadership

According to George Terry (1977), leadership is a process of influencing the actions of an organized
group in goal setting and accomplishment; also as an influence under which the followers accept
willingly the direction and control by another person or the leader. Haiman views leadership as a
process whereby an individual directs, guides, influences, or controls the thoughts, feelings or
behavior of other human beings. Tead, as cited by Ruiz (l972), defines leadership as the activity of
influencing people to compete toward some goals which they come to find desirable. From the
definitions, it appears that two words, influence and interaction; are bases in any discussion of
leadership. At this point, it is advantageous to distinguish some types of leaders.

1. Formal vs. Informal leader

A formal leader is one who is appointed to a position in an organization already existing.

By virtue of his appointment he is vested with authority inherent in the position. Informal leader,
on the other hand, is one who emerges as such because the group thinks he possesses means of
attaining their goals or satisfying their needs.

2. Democratic vs. Dictatorial

A democratic leader is one who epitomizes the values and norms of his group. He
Evolves out of the group of which he is a part, rather than by creating a following of his own. Te
democratic leader puts the well-being of the group ahead of his own desires where they conflict.
Whereas, a dictatorial leader is one who has complete autocratic control over his men.

3. Bureaucratic leader is one who functions in a predetermined organization so complete that

all the duties and responsibilities of each level of leadership are spelled out in advance.

4. Passive leader is one who has developed a following because he happens to possess certain
talents or skill, or traits which are admired, not by a deliberate effort toward leadership on
his part

5. Personal power or charismatic leader is one who achieves his role almost entirely through
personal magnetism or attractiveness.

6. Transformational leader builds on man’s need for meaning and is oriented toward meeting
long-term goals without compromising human values and principles.

7. Transactional leader builds on man’s need to get a job and to make a living and is
preoccupied with power and position and politics.

There are still other types of leaders, like change or role-oriented leader and strategic leades.
But who is a good leader? Lao Tse, one of the greatest Chinese philosophers in his time wrote that
“ A leader is best when people barely know that he exists,
Of a good leader, who talks little.
When his work is done his aim fulfilled,
They will say, “ We did this ourselves.”

Moreover, management specialists distinguish a leader and a non-leader, as follows; a leader

inspires a follower; accomplishes work and develops the follower; shows the follower how to do the
job; assumes obligations; and fixes the breakdown for failure in attaining the goal. On the other
hand, a non-leader drives the follower; accomplishes work at the expense of the follower, instill fear
in the follower by threats and coercion; passes the buck; and fixes the blame on others for failures
in attaining the goal. Stephen Covey (1992) has pointed out that leadership can be broken into two
parts; one having to do with vision and direction, values and purposes; and the other with inspiring
and motivating to work together with a common vision and purpose. Hence, based on this concept,
Covey says that there can be leaders who have vision but lack team building talents, there can be
leaders who have vision, can inspire people and have team building talents.

Bases Upon Which a Leader Influences a Subordinate

To be a leader is no easy task. To be honorable is to have power. In order to be honored and

respected, Covey (1992) says that a leader must possess the following power tools;

1. Persuasion – includes sharing reasons and rationale, making a strong case for our
position or desire while maintaining genuine respect for followers ideas and
perspective committing to stay in the communicative process until mutually
beneficial and satisfying outcomes are reached.
2. Patience – staying committed to the goals in the face of short-term obstacles and
resistance.
3. Gentleness – not harshness, hardness or forcefulness when dealing with disclosures
and feelings followers might express.
 4. Teachableness – a leader does not have all the answers, all the insights and valuing
the different viewpoints, judgments and experiences followers may have.
5. Acceptance – withholding judgment, giving the benefit of the doubt.
6. Kindness – sensitive, caring, thoughtful and remembering the little things in
relationships.
7. Openness – giving full consideration to the followers’ intentions, desires, values and
goals rather than focusing exclusively on their behavior.
8. Compassionate confrontation – acknowledging error mistakes, and the need for
followers to make “course corrections” in a context of genuine care, concern, and
warmth.
9. Consistency – degree of firmness and ability to be assertive together without
contradiction.
10. Integrity – honestly matching words and feelings with thoughts and action;
correlating between what I value and believe and what I do not.

A leader cannot exist without problems. What are these problems? According to Stephen
Covey, these are chronic problems of leaders, as follows:

1. No shared vision and values.

2. No strategic path – the strategy is not well-developed of it ineffectively expresses the
mission statement: Where do we want to be in 5 years? While the strategic reflect
the stream, it does not reflect the vision.
3. Poor alignment – bad alignment between structure and shared values.
4. Wrong style – the organization’s philosophy is incongruent with shared vision.
5. Low trust – a staff has low trust, a depleted emotional bank account.
6. Poor skills – style does not match with skills.
7. No integrity – values do not equal habits.

Let us reflect for a moment: What kind of leaders are we? Do we have the skills required of a
good leader? What have we done to solve the problems we have encountered? It is only we
ourselves who can answer all these questions.

WHAT KIND OF A LEADER ARE YOU?

Whether you are a leader in your family, or of parishioners, students, employees, or

volunteers, it is about time that you evaluate your leadership style.

How Does Your Leadership Affect Students?

In the 1960’s, Diana Baumrind first applied Lewins three styles of leadership to
families. She called these parenting styles authoritarian, permissive, and authoritative.
Subsequent research identified a fourth parenting style – neglectful.
 Control and support are the two main aspects of the parent-child relationship that are
the key to its success or failure.

On the accompanying diagram of parenting styles, control is represented by a

horizontal line. One end represents high control and the other end low control. Think of this line
as measuring how much influence you try to exert over what your child does.

As a parent or teacher, do you feel that children or students need to be strongly

guided and taught what is right and wrong? Do you feel students will usually make the right
decisions on their own? Do you see your role as being a resource person or a firm guide?

Control also described who is in charge in the family – the parents or the children.

The vertical line represents the support aspect of parenting. Support can range
from showing strong acceptance and responsiveness to being unresponsive and rejecting at the
other extreme.

Supportive parents are child centered. They understand that children or students
have special needs because they are immature. Supportive parents encourage independence and
individuality. They talk with their children a lot; the children understand the reasons for family
standards. Parents treat their children with warmth and love.

By contrast, non-supportive parents engender hostility in their children because

they are adult-centered. They are unresponsive to the needs of their children. They are afraid that
if they let their children express an opinion, they will lose control. They tend to use excessive
physical punishment. Independence and individuality are taboo.

EMOTIONAL CLIMATE

The emotional climate is of particular interest to Christian parents. This climate

often determines whether children will accept or reject the religion and values of their parents. It
is this climate that brings family life an aura of joy and happiness or repression and sadness.

HOW THESE LEADERSHIP STYLES WORK OUT IN REAL LIFE.

What is God like? Unfortunately, the authoritarian style of parenting is quite

common among conservative religious families who often tend to hide behind a misconception of
god’s authority as mandate for their actions.

The results tend to be negative. Young people may out-and-out rebel and reject
parental values. Others become overly compliant – they can’t face tough decisions, and need an
authority to tell them what to do.

If the adult children remain religious, they often seek the security of the legalistic
approach to Christianity. Since they did not experience grace, it is difficult to grasp. They see God
as wrathful, a vengeance-seeking judge ready to zap anyone who does not measure up\

Neglectful parents may be classic abusive parents who do not supply their children
with their daily needs for food, shelter, and clothing. On the other hand, they may be well-
educated, career-conscious men and women who are also involved in their own lives they have no
time left to support to guide their family emotionally. Parents do not want to sacrifice their own
convenience for their child’s emotional needs.

Faraway God – Children from neglectful homes often react in the same way that
children from authoritarian homes do – they rebel and embrace negative values. They may have
deep emotional problems related to the neglect they have experienced.
Carolyn goes to church but is not serious about religion. To her God is a distant
ruler of the universe who is not involved in people’s everyday lives. She sees God as one who really
does not care what happens on earth.
 Permissive parents are warm and caring, but they do not encourage mature
behavior. They have few rules. Permissive parents tend to avoid authority, controls or restrictions.

PRIDE; A LEADER’S GREATEST PROBLEM

Pull a $10- bill from your pocket and you will see the face of Alexander Hamilton on the front.

By merit of his accomplishments, Hamilton should be one of the United States’ greatest national
heroes. Consider his contributions to America:

• Revolutionary War hero

• George Washington’s chief of staff by age 22
• America’s first Secretary of the Treasury
• Co-author of The Federalist Papers
• Creator of the Cost Guard
• Designer of the nation’s banking and finance system
• Architect of a system of tax collection to bring revenue to the US Government
• Builder of the infrastructure for an industrial economy

Yet, despite displaying the greatest blend of legal, political and financial knowledge of the
founding fathers, Hamilton does not rank among the foremost heroes of our country’s history.
Why? Pride.

Hamilton’s self-importance and inability to take an insult alienated those around him and
sabotaged his career. His ego literally killed him. Far too vain to patch up differences with fellow
politicians, Aaron Burr, Hamilton was shot and killed by Burr in a duel at the age of 49.

LEADING CULPRIT

Before diving into the body of this lesson, I’d like to credit my friend Dave Anderson, founder
of LearntoLead.com. Many of his thoughts resonate throughout this edition of LW.

I agree with Dave when he suggests pride is the leading culprit of managerial ineffectiveness.

“There are many reasons managers fall. For some, the organization outgrows them. Others
don’t change with the times. Some spread themselves too thin and work long and hard but not
smart. Many abandon the priorities and disciplines that once made them great and never get back
to them. A few make poor character choices… But all these causes for management failure have
their root in one common cause: Pride. In the simple terms, pride is devastating. I’m not talking
about the pride one has in their work or their accomplishments. I’m indicting the pride that
inflates your sense of self-worth and distorts your perspective of reality”. – Dave Anderson.

There are two kinds of pride, both good and bad. “Good pride” represents our dignity and
self-respect. “Bad pride” is the deadly sin of superiority that reeks of conceit and arrogance.
When you look at the word pride, notice the middle letter is “I”.

When you are full of pride on the inside, it makes you stiff, stubborn and creates strife with
others.

PROBLEMS OF PRIDE

1. Pride stops us from building a team.

Prideful leaders readily contract “Superman Syndrome” and devalue the benefits of
teamwork. They rely on their own powers to solve problems and advance the
 organization. Blinded by their self-centeredness, arrogant leaders are unable to
appreciate the strengths in others.

2. Pride renders us unteachable.

Leaders who are assured they know everything don’t bother about personal growth.
Their ego convinces them that they have arrived, and they quit searching for life’s
lessons in the people and circumstances around them,

3. Pride closes our mind to feedback.

Pride deafens us to the advice or warnings of those around us. As Stephen Covey has
said, “It takes humility to seek feedback. It takes wisdom to understand it, analyze it
and appropriately act on it.” Without humility, we care about only one opinion---our
own.

4. Pride prevents us from admitting mistakes.

The Duke of Wellington once haughtily drew himself up to his full height and
thundered to one of his staff officers, “God knows I have many faults, but being wrong
is not one of them!”

Pride won’t allow for failure. The egotistical leader blames mistakes on others, justifies
them as inevitable, or refuses to acknowledge them.

5. Pride keeps us from making changes.

Pride will cause leaders to pledge allegiance to the status quo rather than opening
themselves to change; especially if the change alters a system they built. Since leaders
have emotional equity in their own work, they will justify living with broken systems
rather than changing them.

6. Pride encourages poor character choices.

Because of arrogance, ignorance, or a little of both, start taking shortcuts that

compromise their values. In their conceit, they think they’re above the rules or are too
smart to get caught.

As flawed human beings, we all fall into prideful traps from time to time. However,
failing to recognize the error of pride and change course will doom our leadership.

Pride is a fatal character flaw and leaders that leave legacies have their character in
tact. Leaders who fail to prune their pride will meet demise. That’s not a guess, it’s a
guarantee. With pride, it’s a matter of “if” we will fall but “when.” There are no
exceptions.

7. Pride hinders us from reaching our potential

For leaders to reach full potential, they must be aware of areas in which they can
improve. Unfortunately, pride blocks honest self-assessment and prevents leaders from
finding the path to better performance.

8. Pride destroys relationships.

The opposite of loving others is not hating others but rather obsessing over oneself.
When we become self-absorbed, we cut ourselves off from the enjoyment of the
relationships in our life.
 What I call “ The Celebration Principle” says that the true test of relationships is not
how loyal we are when friends fail, but how thrilled we are when they succeed. If we
can’t get excited about the accomplishments of our friends, we had better do some
soul-searching.

9. Pride distorts your perspective on reality.

Constantly viewing life through the lens of selfish ambition colors a leader’s outlook.
Many problems in business are caused by the ego interfering with judgment. Choices
that should be clear to the leader become clouded by an obsession with self-
advancement.

CORRECTING THE PRIDE PROBLEM

1. Recognize your pride

“If anyone would like to acquire humility, I can, I think, tell him the first step.
The first step is to realize that one is proud. And a biggish step, too. At least,
nothing whatever can be done before it. If you think you are not conceited, you
are very conceited indeed.”

2. Admit your pride

“There is perhaps not one of our natural passions so hard to subdue as pride.
Beat it down, stifle it, mortify it as much as one pleases, it is still alive. Even if I
could conceive that I had completely overcome it, I should probably be proud of
my humility” – Benjamin Franklin

3. Express your gratitude

“ A proud man is seldom grateful man, for he never thinks he gets as much as he
deserves.”

4. Say your prayers

“Lord, when I am wrong, make me be willing to change, and when I am right,

make me easy to live with.”
5. Practice serving others
“The high destiny of the individual is to serve than to rule.
6. 6. Learn to laugh at yourself

“Blessed are they that laugh at themselves, they shall never cease to be
entertained.

CONCEPT OF LOYALTY

“ If you work for a man, In heaven’s name WORK for him,

Speak well of him and stand by the institution he represents.
Remember – an ounce of loyalty Is WORTH a pound of cleverness. . .
If you must GROWL, CONDEMN, AND ETERNALLY FIND FAULT,
Why – RESIGN YOUR POSITION AND WHEN YOU ARE ON THE OUTSIDE,
Damn to your heart’s content
But as long as you are part of the institution Do not condemn it,
The first high wind that comes along will blow you away
And probably you will never know why.”

Members of the European Union:

Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithunia, Luxemburg, Netherlands, Poland, Portugal, Slovakia,
Slovenia, Sovereign Military Order of Malta, Spain, Sweden, United Kingdom.

PRODUCTIVITY AND WORK ETHICS

Before the practice of labor contractualization became popular in this country, I would say that
individual productivity was higher among employees, because most of them had permanent status,
meaning that they had regular benefits on top of a retirement package. Actually, I think that the
“Herrera Law” had the good intentions of protecting laborers so that they would be entitled to
permanent status if their employment exceeded six months. Unfortunately however, the reverse situation
happened when employers started to limit employment terms to only five months, as a deliberate move to
go around the law.

When employees had permanent status, we would naturally expect them to be more productive,
because their level of company loyalty was very high, considering that they had a long term career to
look forward to. Now most of the employees only have contractual status, loyalty is very low, and not
only that, the feeling of job insecurity is very low also. Although we would not really expect employees to
be loyal and productive when they are aced with the prospects of job insecurity, it would still be fair to
say that it is still the duty of employees to give employees their best productivity, because after all, the
employers are paying them for the work that they do.

As we studied the problem of low productivity in line our day to day work at the Inter-Charity
NETWORK, we discovered that the root of the problem is really the lack of proper work ethics among
employees, to produce more than what they are actually producing now. Looking at the practical side,
we also realized that their motivation is hampered by their worries about their basic needs, as they face
the challenge of survival in their day to day lives.

THE MAJOR ROLE OF AN ACADEMIC OR PROGRAM HEAD

An Academic or Program Head is in the vanguard of development of a school, the vehicle for human
development. As such, he performs administrative functions aimed at attaining quality education to
prepare the learners to become productive and useful citizens of the country. In executing such
functions, he should observe transparency to activate his teachers to cooperate with him in creaming off
learners. The noble task calls for wise and workable decisions about proper utilization of human and
material resources of the school. Taking into consideration that the success of any administration
largely depends upon two sources – the human and material resources.

udents’ learning the program or academic head should puzzle out various means of increasing students’
achievement and o improving his management skills in managing teachers. To attain educational goals
the academic head should group the teachers or instructors according to their field of specialization,
abilities and treat and supervise them accordingly. The program head needs close supervision on
teachers. This followed with the stage of work that needs less supervision

NATIONAL DEVELOPMENT

Directions; Choose the letter of the best answer in each item:

 1. In 1983, which Southeast Asian country earned the reputation of having a
“sick economy”?
a. Malaysia b. Philippines c. Thailand d. Indonesia
2. In a developing country, this form of business organization is dominant
particularly in the areas of agriculture, merchandizing and home industries.

a. individual proprietorship b. partnership c. corporation d. none of the

above.

3. The unit o measure o economic growth representing the sustained increase of real
output of goods and services in the country.

a. net national product b. per capita income c. gross national product d. none
of the above.

4. The application or use of a new knowledge to improve present ways and means of
doing things.

a. discovery b. invention c. innovation d. all of the above

Why the citizen is rarely a costumer

There are at least four reasons why government agencies are in general
insensitive, even indifferent, to citizen concerns. First, the budget of
government agencies is not dependent on citizen satisfaction. Government
agencies do not receive their funds directly from citizens, but from legislative
assembly (Congress) and the treasury (the Department of Budget and
Management). When a business displeases customers, sales decline and profits
plummet. When a government agency delivers services badly, nothing bad
happens to it. Government agencies aim to please, not the customer, but the
bureaucracy and its bosses. There is no incentive to satisfy the citizen as
customer. Second, government agencies are monopolies. They have no
competition that will prod them to be efficient, effective and innovative. Their
employees, in turn, can afford to be arrogant, complacent, and disparaging of
the public. Third, national and local governments (at least those which are
democratic) are only replaced through elections. For the Philippines and other
presidential democracies, the terms of office and the timing of elections are
fixed. Elected government officials cannot be changed in between elections
(save for extraordinary cases). Thus, in between elections, there are no serious
disincentives for officials serve citizens with excellence and innovation.
Fourth, the majorities of citizens have historically been accustomed to the poor
performance of governments and have not developed a culture of complaint for
better service. The long lines in many government offices are accepted as a
matter of fact, the arrogance and incompetence of many government
employees are considered part o the process, and the sloppy and slipshod
services are viewed as something that might as well be accepted. To be served
effectively, many citizens know all too well that “pay-offs” often do the trick.

Of these four conditions, the first three remain unchanged in the

Philippines. Government agencies do not lose money when they perform
poorly, they have no competition for their services, and the electoral rules of
the country still feature fixed terms and regular elections. The fourth condition,
however, has shown signs of change, in part of owing to growing citizen
dissatisfaction. Faced with arrogant and incompetent government agencies,
many citizens now fume at the disservice and clamor for change. This is
happening in several countries and somewhat slowly in the Philippines.

GLOBALIZATION, GOVERNANCE AND MANAGEMENT EDUCATION

How does globalization impact on management? It appears to me that there are two simultaneous
globalization processes operating. The first process presents to use the positive interplay of its
economic and political dimensions. With the end of the cold war, and the blurring of what used to
be first, second and third world nations. We see the emergence of transition economies like
Vietnam, China and the former Soviet Union, where the failures of Central Economic planning has
finally forced them to open their markets to the world. This first process promises prosperity – a
global neighborhood of milk and honey. Yet there is a second process that highlights globalization
of finance, for example, that seems to make banks fall like a pack of cards. It has been described as
the “ race to the bottom”, where there is mad scramble to lower prices, the phenomenon of
deflation in the United States, the compromising of labor and product standards, just to capture
the market. There seems to be a nagging hesitation to lower tariff barriers, despite WTO. How
will all these change the functional areas of management as we know them today? How will the
faces in the workforce and the workplace change? Does globalization mean developing more
competencies for greater, tougher competition or do we need to develop new skills of negotiation
and collaboration as we rely more and more on outsourcing, franchising, networking,
subcontracting –the virtual value chain? Are the processes of globalization something we can
control within the firm.

Second, how does governance impact on management? It is even clearer, I believe, that
government cannot govern alone. The rise o regionalism indicates common problems that cut
across national boundaries. GerryCorrigan, Former Chairman of Federal Reserve in New York, in
his analysis of what led to the crisis in Asia, shares insights, for example, about poor credit
decisions by banks and poor regulations by central bank. This shows the interlocking impact of
business and government action and strategy on regions, and argues for a rethinking of mechanism
for economic governance. Should stability a policy objective o both business and government?
Should we even think of business and government as two words with irreconcilable goals? Is
management, as a science and as an art, ready for new mechanics of governance?

Third, how does management education impact on management? How do we help prepare
managers to take greater responsibility for their own learning on the job? Are our schools open to
being enriched by their experiences? Into the next millennium, globalization, governance and
management education will be powerful forces of change. How ready are we? With the pearls of
wisdom we have acquired through the years in the heart of the recent crisis, how prepared can we
really be?

THE WAVE OF DEREGULATION, DECONTROL, LIBERALIZATION, AND

PRIVATIZATION WAS OVERWHELMING AND HAS BECOME THE GUIDING PRINCIPLE
FOR ECONOMIC MANAGEMENT. This has been ruling the world for nearly a decade and is
most likely to continue into the next millennium. The governance associated for managers both in
the government and private sectors.

BEATITUDES FOR TEACHERS

Blessed are you
Who are called to teach,
 For you walk, in the footsteps of the Master.

Blessed are you

Who sow peace and harmony
In the staffroom, yours will be the joy of the Lord.

Blessed are you

Who plant seeds of hope
In youthful hearts, for you will inherit the dawn.

Blessed are you

Who are sensitive to the cries of youth today,
For they yearn for the coming of my Kingdom.

Blessed are you

When you share your faith with others,
For your name is written in my heart.

Blessed are you

Who anguish now because your students are difficult,
For one day they will thank you for loving concern.

Blessed are you

When efficiency is moderated by compassion and empathy,
For the deeper secret of education is yours.

Blessed are you

When you reach out to me in your students,
For you will surely find me and rejoice.

Blessed are
Who lead young people in paths of justice and peace,
For you will shine like a star for all eternity.

Oel ligriv e. yonamug, hccb 2007

ONE DAY IN MY LIFE AS A TEACHER

I prepare for tomorrow today,

It follows then that I’ve prepared for today yesterday;
Intellectually, Psychologically, Physically, Spiritually,
I do not come to school on time,
I come to school ahead of time with the right mental attitude,
With my learning activities clear, doable, enjoyable and creative.
I begin my class, affirming that I’m divinely-guided.
My presence fills my classroom.
I know I am my best visual aid.
Therefore, I look good and smell good.
I feel and act inspired.
I am an effective teacher in motion
I facilitate, I motivate.
I relay, I relate.
I reach out to communicate.
I don’t just talk; I impart a message.
I don’t just hear, I listen,
I don’t just pronounce; I enunciate.
I don’t just deliver, I receive.
For I am both a radar and a radiator of ideas.
I guided the underachievers with patience and understanding.
I lead the good to be better.
Inspire the best to be better than their best.
For each moment of truth that I have to perform better,
I humbly pause in recognition of the Spirit of Knowledge and Wisdom,
That waits to express through me.
If some situations my tolerance runs low, I stop to listen in.
Where I am, Divine Intelligence is.
If in more trying moments,
I break my professional composure,
I shall be alert to change, not my student,
But my attitude towards my students.
I rise to the truth that though I have my own limitations,
I am not limited by my limitations.
I, therefore, choose to focus on the good that I have and the good that I am.
At the end of that “one day” in my life as a teacher
I pause to relax, to enjoy, top relish the good that one day unfolds, until more one day’s
add up to a
Week, a month, a year or perhaps a lifetime.
I now bow in grace and gratitude and say:
Thank you, Father, for that one day in my life as a T E A C H E R.

Oel ligriv e. yonamug, hccb 2007

Turn away from the crowd and their fruitless pursuit of fame and gold.
Never look back as you close your door to the sorry tumult of greed and ambition.
Wipe away your tears of failure and misfortune.
Lay aside your heavy loads and rest until your heart is still.
Be at peace.
Already it is later than you think, for your earthly life, at best, is only a blink of an eye between
two eternities.
Be unafraid.
Nothing can hurt you except yourself.
Do that which you dread and cherish those victories with pride.
Concentrate your energy.
To be everywhere is to be nowhere.
Be jealous of your time, since it is your great treasure.
Reconsider your goals.
Before you set your heart too much on anything, examine how happy they are who already posses
What you desire.
Love your family and count their blessings.
Reflect on how they would eagerly be sought if you did not have them.
Put aside your impossible dreams and complete the tasks at hand no matter how distasteful.
All great achievements come from working and waiting.
Be patient.
God delays are never God’s denials.
Hold on. Hold fast.
Know that your paymaster is always near.
What you sow, good or evil, you will reap.
Never blame your condition on others.
You are what you are through your choice alone.
Learn to live with honest poverty.
If you must, and turn to more important matters than transporting gold to your grave.
Never meet trouble halfway.
Anxiety is the rust of life; when you add tomorrow’s burden to today’s their weight becomes unbearable.
Avoid the mourner’s bench and give thanks instead for your defeats.
You would not receive them if you did not need them.
Always learn from others.
He who teaches himself has a fool for a master. Be careful.
Do not overload your conscience.
Conduct your life as if it were spent in the arena filled with tattlers.
Avoid boasting.
If you see some thing in you that puffs you with pride, look closer and you will see more than enough to make
you humble.
Be wise.
Realize that all men are not created equal, for there is no equality in nature, yet no man was ever born whose
work was not born with him.
Work everyday as if it were your first; yet tenderly treat the lives you touch as if they will end at midnight.
Love everyone, even those who deny you, for hate is a luxury which you cannot afford.
Learn that he who delivers with one hand will always gather with two.
Be of good cheer.
Above all, remember that very little is needed to make a happy life.
Look up.
Reach out.
Cling simply to God and journey quietly on your pathway to forever with charity and a smile.
When you depart it will be said by all that your legacy was a better world than the one you found.
LAND REFORM

1. The primary instrument in Philippine economic development:

a. agriculture b. manufacturing c. trade d. none of the above

2. The basic problem of agriculture is/are;

a. of irrigation b. obsolete technology in production
c. implementation of agrarian reform d. natural calamities

3. The effect of traditional agriculture is

a. low production output b. shortage of food c. importation d. decrease in national income

4. The main defect of the agrarian structure is/are;

a. high proportion of share tenancy

b. non-promotion of cooperatives
c. absence of technical assistance and services
d. inadequate credit facilities

5. The existing problem on land ownership is caused by

a. defects in land titling and Registration

b. onrush agribusiness operations
c. negligence by past government administrators
d. years of feudalism

6. Which of the following has the largest tenanted area in southern Mindanao

a. rice b. corn c. coconut d. sugar

7. The largest percentage of landlords with holdings of seven and more hectares of land is found in

a. Ilocos region b. Central Luzon c. Eastern Visayas d. Southern Mindanao

8. The initial procedure in resolving a high proportion of share tenancy;

a. converts share tenants to lessees

b. conversion of lessee to amortizing owner
c. conversion of lessee to owner-cultivator
d. none of the above.

9. The tenancy problem in the Philippines has its roots in

a. the pre-Spanish regime
b. Spanish colonial regime
c. After the Japanese occupation
d. Before Martial Law

10. A measure to affect land reform starter during the

a. Japanese period
b. American colonial government
c. Marcos regime
d. Implementation of Carp
11. The main oppositor of Philippine agrarian reform is/are the
a. state b. church c. hacienderos d. lawmakers

12. The Comprehensive Agrarian Reform Program is achieved by

a. revolution b. authoritarian regime c. evolutionary means d. None of the above

13. Included in the CARP are

a. all public agriculture lands
b. all private agricultural lands
c. other lands of the public domain suitable for agriculture
d. all of the above

14. The beneficiaries of CARP are entitled to how many hectares of agricultural land

a. 1 b. 3 c. 7 d. l0

15. The financial intermediary of CARP.

a. Rural Bank b. Land bank of the Philippines c. DBP d. None of the above

16. The primary aim of CARP

a. to make the tiller the owner of the land he cultivates
b. achieve a dignified existence for the small farmers
c. provide the necessary support facilities, institutions and services
d. credit financing

l7. The leading agency to adjudicate agrarian reform matters.

a. Department of Agriculture
b. Department of Agrarian Reform
c. Presidential Agrarian Reform Council
d. Regular courts of Justice

17. A system of land tenure not authorized by CARP:

a. share tenancy b. leasehold system c. owner-cultivatorship d. share tenancy

l8. The system of landlordism in the Philippines during the Spanish colonial period;
a. caciquism b. feudalism c. manorial system d. none of the above

18. The successful implementation of CARP depends on

a. the cooperation of the church with the state

b. less opposition from the elites who continue to dominate congress.
c. How the government will convince the landlords to get involved with the program
d. The political will and commitment of the government and other people involved.

19. The most important social function of the Agrarian Reform Program

a. redistributes responsibility
b. redistributes wealth among the less privileged
c. gives freedom of management
d. challenges to use potential resources

20. The Cooperatives Development Program is designed to support the

a. Land Reform Program

b. Land distribution system
c. Agrarian Reform Program
d. Funding of CARP
 Arithmetic and Number Theory

1. On a number line, what is the distance between –7 and 8?

a. –1 b. 1 c. 15 d. 15

2. What is the Greatest Common Factor of 16, 24 and 40?

a. 4 b. 2 c. 8 d.6

3. What is the LCM of 16,24, 40?

a. 240 b. 960 c. 15360 d. 8

4. Which of the given numbers is divisible by ll?

a. 1211 b. 1021 c. 2101 d. 1120

5. Which of the following numbers is divisible by 8?

a. 518 b. 632 c. 416 d. 832

6. In one section, the ratio of boys to girls is 4:3. If there are 42 students in a class,
How many are girls?
a. 18 b. 6 c. 24 d. 36

7. A hospital charges a patient for P78 for 12 capsules. How much should it be charged for 18
capsules?
a. P111 b. P114 c. P117 d. P120

8. Two people take 12 days to repair a sidewalk. How many people are needed to complete the
repair in 4 days?

a. 2 b. 4 c. 6 d. 8
9. If a certain amount of food will last 50 days for 200 soldiers, how long will it last if 50 soldiers
are added at the end of 20 days.

a. 24 days b. 26 days c. 28 days d. 30 days

10. 90 is what percent of 450?

a. 2% b. 5% c. 20% d. 50%

11. 79.2 is 16.5% of what number?

 a. 13.068 b. 66.132 c. 4.8 d. 480

12. 6.2% of 98 is ?

a. 6.078 b. 60.76 c. 607.6 d. 6076

13. The cost of an electric fan was P1,053 including an 8% sales tax. What was the price of the
electric fan before tax?

a. 968.76 b. 975 c. 975.50 d. 980

14. a jacket on sale at P480 is 60% of the regular price. What is the regular price?

a. P288 b. P195 c. P800 d. P768

15. If the value of the diamond necklace appreciates exponentially at a yearly rate of 18%, how
much will be its cost in 5 years time if the initial cost of the necklace is P25,000?

a. P57,194 b. P47,500 c. P60,175 d. P147,500

16. Maria Tuyhakaw purchased 4 lbs. of mixed nuts at P20 per lb. Rita purchased 2 lbs. of peanut
at p15.00 per lb. What is the average price per pound for the mixture of both purchases?

a. P18.35 b. P17.50 c. P19.25 d. P18.75

17. Mr. Gituyok-tuyok paid a total of P12,330 in taxes for income earned in 1995. His tax rate is
34 ¼% of his gross annual income. What is his monthly salary?

a. P2,500 b. P3,000 c. P2,000 d. P3,500 e. P4,000

18. The female population of a university comprises 30% of the total student population of 6,000
students. This number is equal to the number of students (male and female) enrolled in
teacher education. There are 800 females enrolled in teacher education. How many males are
enrolled in teacher education too?

a. 1,000 b. 1,800 c. 800 d. 2,000 e. 4,800

19. Ruth has a net profit of P760,000 at the end of the month. All her expenses amounted to about
20% of her gross revenue. How much is Ruth’s gross revenue?

a. P830 b. P3,800 c. P1,520 d. P950,000

20. A Department store had a Megasale of Jackets at the ff. prices?

a. P395 jackets reduced to P300

b. P685 jackets reduced to P580
c. P995 jackets reduced to P890
d. P1,450 jackets reduced to P1,250

Which group of jackets was offered at the greatest rates of discounts from its original price?

a. 24% b. 15% c. 10% d. 15% e. 255

 BUSINESS TECHNOLOGY

1. We all desire success in business ventures but one should know that first and foremost for
entrepreneurs is

a. Achievement b. Financial gain c. Being a good follower first d. creativity sometimes

2. Lourdes wants to engage in business. On what should Lourdes base the type of business she
wants to engage in?

a. availability of resources and time for business

b. interest, talent, profitability, training, experience
c. emotional preparedness, market for your products
d. time and type of business

3. They are earnings of corporations which are distributed among the stockholders.

a. stock b. profit c. dividend d. wage

4. An overview or maybe a step by step procedure of the whole business is

a. description of the project b. details of the project c. rationale d. project proposal

5. When you need information on buyers, sources of raw materials, or exporting, your need is

a. training assistance b. marketing assistance c. consultancy d. organizational assistance

6. A part of the business plan which provide details on how you will produce the product is

a. market study b. finance study c. production study d. organizational study

7. A successful entrepreneurial activity is the result of

a. careful planning b. good luck c. big capital d. patience

8. It is the part of the business plan which explains how will you manage the business.

A .financial study b. production study c. market study d. organizational study

9. The process of bringing a person to an agreed standard of proficiency is

a. training b. assigning c. choosing d. calling

10. It states the importance of the project, its objectives and significance.
a. proponent b. location c. rationale d. title

11. When customers pay cash upon delivery of the goods to their homes, this is known as

a. lay away b. buy away c. COD d. cash take sale

12. The key ingredient to Entrepreneurship is placed on

a. products sold b. services offered c. innovation d. discoveries made

13. Storekeeping is a busy job. Although tiresome, it is very enjoyable because the owner act as a
host, a store owner, housekeeper, security guard and seller and he is also considered as
 a. store owner b. retail salesperson c. manager d. financier

14. If you want to engage in business, what character trait should you possess as a would-be
Entrepreneur?

a. relies on others for information

b. makes a personal sacrifice or spends extraordinary effort to complete a job
c. produces a quality product or service as good as the others
d. does not compare one’s work with that of others.

15. As a new businessman, one is not very sure of the results so he must be aware If his business is
good. He/She can identify a good business through

a. availability of supply, interest in the business, capacity and skills

b. pricing the products and services
c. a good managerial outlook
d. personnel-oriented group

16. A document discussing an entrepreneur’s intentions, ideals, perceptions and details of a

planned project is known as

a. methods of research b. project proposal c. letters of credit d. thesis

17. You want to open a small store to add income to the family. What are the features of a retail
store?

a. It is open everyday throughout the week from morning to evening

b. It offers superior goods at a minimum price.
c. It offers a small variety of goods that are within the reach of the consumer
d. It offers personalized service at a minimal cost

18. Not everybody can be good in business. The undesirable personal characteristics of an
entrepreneur is/are

a. patience b. industriousness c. intelligence d. crankiness and moodiness

19. If you have a small business enterprise, you want people to patronize the store. Attracting more
buyers depends on

a. store lay-out b. pricing of merchandise c. store location d. consumer’s likes &

dislikes

20. Agencies which provide counseling to entrepreneurs who have business problems are referred
to as

a. marketing assistance b. financial assistance c. market study d. training & consultancy

assistance

21. Is an art and science which deals with fundamental business activities of planning,
organizing ,leading, implementing, controlling, evaluating and decision- making which are
verifiable in terms of business practices.

a. marketing b. accounting c. entrepreneurship d. management e. economics

22. A periodical revision of the longer range plans is necessary as the firm moves into the future.

a. Principle of primacy of planning

 b. Principle of navigational change
c. Pervasiveness of planning
d. Principle of gradual economic change

23. The greater the departure of planned changes from accepted ways the greater the potential
resistance by the people involved.

a. Principle of positive action

b. Principle of planning stability
c. Principle of cause and effect
d. Commitment Principle

24. Planning must be stated in terms of the relationship between the advantages of flexibility and its
costs

a. Principle of flexibility
b. Planning Communication
c. Principle of positive action
d. Principle of resistance to change

25. Transfer of goods and services from the point of production to the point of consumption.
a. Exchange b. Marketing c. . Trading d. Manufacturing

26. An act or an ability to inspire and influence other people, in order to achieve the vision and
attain excellent results

a. Leadership b. Management c. coaching d. care-taking

27. Is an art of recording, classifying, summarizing in a significant manner for transactions and
events which are in part at least of a financial character and interpreting the results thereof.

a. Auditing b. Accounting c. Merchandising d. Selling

28. The book of original entry refers to

a. worksheet b. class record c. stock card d. journal

29. Property or rights owned by the business or corporation is called

a. stocks b. copyrights c. assets d. collateral

30. A financial statement that shows the statement of revenue and expenditures for certain
operational period

a. statement of assets and liabilities b. income statement c. balance sheet d. ledger

31. An over-all plan of the organization in safeguarding its assets and other operational means

a. internal control b. check kiting c. adjustments d. financial leverage

32. Father of scientific management

a. Socrates b. Frederick W. Taylor c. Robert Malthus d. Thomas Aquinas

33. Macroeconomics deals with the study of

a. Economy in parts b. Economy as a whole c. Divisions of economy d. households

34. GNP is a measure of
 a. productivity b. economic growth c. economic development d. industrialization

35. Consumption is

a. using goods and services

b. satisfying human wants
c. using goods and services to satisfy unlimited wants
d. none of the above

36. A situation that characterizes inflation;

a. increased price level

b. encourage creditors to lend money
c. high purchasing power of money
d. decrease in real wages

37. A government tends to borrow foreign loans due to

a. its reluctance to raise taxes

b. its deliberate use of the budget to stimulate the economy
c. the necessity to pay the interest of previous foreign debts
d. none of the above

38. Fiscal policy means

a. tax collection b. supply of money c. government expenditures d. both A and C

39. Savings is equal to

a. C-Y b. Y/C c. C/Y d. Y-C

40. The biggest source of government funds:

a. tax revenue b. non-tax revenue c. either a or b d. none of these

41. A policy that controls taxes and government expenditures

a. monetary policy b. fiscal policy c. trade policy d. none of these

42. Taxes collected by the Bureau of Customs:

a. import taxes b. ad valorem tax c. custom duties c. all of these

43. A community tax or cedula is classified as

a. personal tax b. property tax c. excise tax d. privilege tax

44. The primary instrument in Philippine economic development:

a. agriculture b. manufacturing c. trade d. none of the these

45. The effect of traditional agriculture is

a. Low production output b. shortage of food c. importation d. decrease in national

income

46. The beneficiaries of CARP are entitled to how many hectares of agricultural land?
a. 1 b. 3 c. 7 d. 10

47. Which one promotes thrift among its members?

 a. Consumer’s Cooperatives
b. Producer’s cooperatives
c. Marketing cooperatives
d. Credit Cooperatives

48. Are rules of actions under repetitive situations is called

a. Policies b. Memorandum c. letter of instructions d. subpoena

49. Are considered to be the estimates for use in any organization both public and private.
a. disbursements b. budget c. IRA d. subsidy

50. EVAT Law is

a. Republic Act. 7716 b. Republic Act 6177 c. R.A. 6717 d. R.A. 7176

THE AGRARIAN REFORM PROGRAM

Agrarian reform is the redistribution of lands to farmers and regular farmworkers who are landless,
irrespective of tenurial arrangement. Agrarian reform is not just the transfer of lands, it includes a
package support services: economic and physical infrastructure support services, irrigation, roads and
bridges, marketing facilities and human resources and institutional delopment or social infrastructure
building and strengthening.
ehensive Agrarian Reform Program started in 1988 under the administration of president Corazon
Aquino.

The legal basis for CARP is Republic Act 6657 otherwise known as Comprehensive Agrarian Reform
Law signed by Aquino on June 10,1998. It is an act to promote social justice and industrialization,
providing the mechanism for its implementation, and for other purposes.

CARP covers all alienable and disposable lands of the public domain devoted or suitable for
agriculture, all lands of the public domain in excess of the specific limits, all other lands owned by the
government devoted to or suitable for agriculture, and all private lands devoted to or suitable for
agriculture regardless of the agricultural products raised or that can be raised thereon.

Land to the tiller is the essence of land reform. Land distribution secures farmers’ tenure, promotes
social equity, and provides farmers a productive resource toward ensuring their economic viability and
productivity.

Under RA 6657, the Department is vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and to extend free legal assistance to farmer- beneficiaries affected by
agrarian cases.

There are three types of cases under this program namely: judicial or court cases, quasi-judicial, and
cases related to agrarian law implementation (ALI). The first two types involve representation o
farmers by DLR lawyers before the regular courts and DLR Adjudication Board, respectively. The
third type involves the administrative rendering of decision on exemption, conversion and retention.

Over the years, the DLR has dramatically improved the pace o resolving cases.

The new DLR leadership is committed not only to the speedy delivery of agrarian justice but also to
resolve disputes at the lowest level possible.
Under Manuel L. Quezon (1935-1944), the Rice Tenancy Law or RA 4054 was passed. This is at the
first law on crop-sharing which legalized the 50-50 share between landlord and tenant and also
established a 10 percent maximum ceiling for loans extended to the tenants.

Contracts for a 50-50 sharing arrangement were good only for one year. Frequently, landlords would
simply refuse to renew contracts, which only gave the landlords a vehicle to legally dismiss the
tenants. While this law was enacted in 1933, it took effect only in 1946 or 13 years later.

During the administration of Manuel A. Roxas (1964-1953), Republic Act No. 34 was enacted . It
established a 70-30 sharing arrangement between tenant and landlord.

On October 23, 1950, President Elpidio Quirino created the Land Settlement Development
Corporation to accelerate the resettlement program which was launched shortly before World War II.
These measures, however, were not fully implemented. Huk rebellion continued and drew more
support from the peasantry.

When Ramon Magsaysay became President, he realized the urgency of implementing a more vigorous
land reform legislations, hence Agriculture Tenancy Act of l954 RA 1199 and the Land Reform Act of
1955. RA 1199 was the first land reform law which regulated all forms and aspects of tenure
relations, except civil lease. Magsaysay tried to provide the basic support services for farmers, such as
feeder roads, irrigation, credit, and farmer’s cooperatives.

President Diosdado Macapagal sought the outright abolition of share tenancy with the passage of
Agricultural Land Reform Code (RA 3844) which aimed to make the farmers owners o the land they
tilled. It lowered the retention limit from 300 to 75 hectares. This code abolished share tenancy and
instituted the leasehold system. It also incorporated some of the features of the previous land reform
laws.

One of the law’s basic objectives was to establish owner-cultivatorship and the economic family-sized
farm as the basis o Philippine agriculture and as a consequence, divert landlord capital in agriculture
to industrial development.

When President Ferdinand Marcos was elected President in 1965, he announced that he would
convert 350,750 share tenants into lessees by 1970. In his first few year, he concentrated mainly on his
green revolution program which benefited the large agricultural producers.

In 1971, peasant organizations and student groups joined forces to pressure the government and
Congress for a separate administrative agency for agrarian reform. In response to this, the
Department of Agrarian Reform (DAR) was created under RA 6389. The Macapagal code was
amended by the Marcos government. Through PD 2 passed by Congress, he declared share tenancy to
be illegal and named the entire country an agrarian reform area.

The 1986 revolution once again raised the expectations of the peasantry on land reform. When
President Corazon Aquino came to power she proclaimed that land reform would be the centerpiece
program of her government.

Aquino formed the Cabinet Action Committee on AR which drafted the necessary legislations. Four
presidential issuances were formulated: Proclamation 131, EO 228,, EO 229 and EO 129-A.

The CARL or RA 6657 emerged nearly after a year o debates, pressure demonstrations and deadlocks
between interest groups, It was signed by President Aquino on June 10, 1988 and took effect on June
15, 1988.

When President Fidel V. Ramos took over 1992, his administration committed itself to “fairer, faster
and more meaningful implementation of the agrarian reform program.”
Early in the administration of President Ramos, land acquisition guidelines were amended to simplify
the procedure for the acquisition of lands. formulas for computing land values were also revised since
this has been a chief cause for landowner resistance on the program.

The passage of RA 8435 also known as the Agriculture and Fisheries Modernization Act ( AFMA)
plugged legal loopholes in land use conversion.

The Ramos administration succeeded in having the Agrarian reform Fund (ARF) Bill approved into
law as RA 8532 which provided an additional P50 billion for CARP and extended its implementation
or another 10 years.

President Joseph Estrada launched the Magkabalikat para sa Kaunlarang Agraryo or MAGSASAKA.
This was designed to make FBs competitive through the forging of joint ventures. Creation o a
farmer’s trust was also initiated (EO151). This allowed the voluntary consolidation of small farm
operation into medium and large scale integrated enterprise that can access long term capital.

President Gloria Macapagal Arroyo having been elected in 2004 has sustained the DLR programs on
beneficiaries development. Most notable of the programs implemented in 2003 before she was elected
in 2004 are the KALAHI Agrarian Reform Zone Partnership Program, GMA or Gulayang
Magsasakang Agraryo, and President Diosdado Macapagal Agrarian Scgolarship Program
(PDMASP). The DLR asked the Congress for the immediate passage of a law on farm as collateral to
enable farmers to mortgage to banks farmlands they acquired under the government’s land reorm
program. Allowing farmers to use their certificates of land ownership award (CLOAS) as security for
bank loans would set them free from clutches of usurers, who lend money at excessive interest rates.
With easy access to credit, farmers will be encouraged to produce more and make the agriculture
industry globally competitive.

As the Congress sits on the “Farmland as Collateral Bill,” the DLR has expanded the nationwide its
support to farmers’ access to credit in a bid to help them augment their income and discourage them
from selling or pawning their farmlands.

The lending program, dubbed “Microfinance Solution Project (Microsol), is now in full swing
nationwide.

MAJOR PROGRAMS OF CARP

LAND DISTRIBUTION – To complete the CARP land distribution mandate by the end o the term of
President Gloria Macapagal Arroyo. The DLR is targeting to distribute at least 100,000 hectares of
Agricultural lan

MARKETING 1

MICRO MARKETING IS THE PERFORMANCE OF ACTIVITIES THAT SEEK TO

ACCOMPLISH AN ORGANIZATION’S OBJECTIVES BY ANTICIAPTING CUSTOMER OR
CLIENT NEEDS AND DIRECTING A FLOW OF NEED-SATISFYING GOODS AND SERVICES
FROM PRODUCER TO CUSTOMER OR CLIENT.

MACRO-MARKETING IS A SOCIAL PROCESS THAT DIRECTS AN ECONOMY’S FLOW OF

GOODS AND SERVICES FROM RPODUCERS TO CONSUMERS IN A WAY THAT
EFFECTIVELY MATCHES SUPPLY AND DEMAND AND ACCOMPLISHES THE
OBJECTIVES OF SOCIETY.

MARKET WHICH IS A GROUP OF POTENTIAL CUSTOMERS WITH SIMILAR NEEDS WHO

ARE WILLING TO EXCHANGE SOMETHING OF VALUE WITH SELLERS OFFERING
VARIOUS GOODS AND SERVICES

CENTRAL MARKETS ARE CONVENIENT PLACES WHERE BUYERS AND SELLERS CAN
MEET FACE-TO-FACE TO EXCHANGE GOODS AND SERVICES.

STAGES OF ECONOMIC DEVELOPMENT

1. SELF-SUPPORTING AGRICULTURE
2. PREINDUSTRIAL OR COMMERCIAL
3. PRIMARY MANUFACTURING
4. NONDURABLE AND SEMIDURABLE CONSUMER PRODUCTS MANUFACTURING
5. CAPITAL EQUIPMENT AND CONSUMER DURABLE PRODUCS MANUACURING
6. EXPORTING MANUFACURED PRODUCTS ( iron and steel, watches, cameras, electronic
equipment and processed food)

Functions OF MARKETING

1.BUYING - MEANS LOOKING FOR AND EVALUATING GOODS

AND SERVICES
2. SELLING FUNCTION – INVOLVES PROMOTING THE PRODUCT. IT
INCLUDES THE USE OF PERSONAL SELLING , ADVERTISING AND
OTHER MASS SELLING METHODS. This is THE MOST VISIBLE
UNCTION OF MARKETING.

3. TRANSPORTING MEANS THE MOVEMENT OF GOODS FROM ONE

PLACE TO ANOTHER

4. STORING INVOLVES HOLDING GOODS UNTIL CUSTOMERS NEED

THEM

5. STANDARDIZING AND GRADING INVOLVES SORTING PRODUCTS

ACCORDING TO SIZE AND QUALITY. THIS MAKES BUYING AND
SELLING EASIER BECAUSE IT REDUCES THE NEED FOR

6. INSPECTION AND SAMPLING.

7. FINANCING PROVIDES THE NECESSARY CASH AND CREDIT TO
PRODUCE, TRANSPORT, STORE, PROMOTE, SELL, AND BUY
PRODUCTS.

8. RISK-TAKING INVOLVES BEARING THE UNCERTAINTIES THAT

ARE PART OF THE MARKETING PROCESS. PRODUCTS CAN ALSO
BE DAMAGED, STOLEN OR OUTDATED

9. MARKET INFORMATION FUNCTION INVOLVES THE

COLLECTION, ANALYSIS, AND DISTRIBUTION OF ALL THE
INFORMATION NEEDED TO PLAN , CARRY OUT, AND CONTROL
MARKETING ACTIVITIES WHETHER IN THE FIRM’S OWN
NEIGHBORHOOD OR IN A MARKET OVERSEAS.

TYPICAL COMPLAINTS ABOUT MARKETING INCLUDE;

1. ADVERTING IS TOO OFTEN ANNOYING, MISLEADING AND WASTEFUL

2. Products are not safe – OR THE QUALITY IS POOR

3. MARKETING MAKES PEOPLE TOO MATERIALISTIC – IT MOTIVATES THEM
TOWARD ‘THINGS’ INSTEAD OF SOCIAL NEEDS

4. EASY CONSUMER CREDIT MAKES PEOPLE BUY THINGS THEY DON’T NEED AND
REALLY CAN NOT AFFORD
5. PACKAGING AND LABELLING ARE OFTEN CONFUSING AND DECEPTIVE
6. MARKETING CREATES INTEREST INPRODUCTS THAT POLLUTE THE
ENVIRONMENT
7. TOO MANY UNNECESSARY PRODUCTS ARE OFFERED
8. MARKETING SERVES THE RICH AND EXPLOITS THE POOR

FIVE STAGES OF MARKETING EVOLUTION

1. SIMPLE TRADE ERA – A TIME WHEN FAMILIES TRADED OR SOLD THEIR

SURPLUS OUTPUT TO LOCAL MIDDLEMEN.
2. PRODUCTION ERA – A TIME WHEN A COMPANY FOCUSES ON PRODUCTION OF
A EW SPECIFIC PRODUCTS – PERHAPS BECAUSE FEW OF THESE PRODUCTS
ARE AVAILABLE IN THE MARKET.
3. SALES ERA – IS A TIME WHEN A COMPANY EMPHASIZES SELLING BECAUSE OF
INCREASED COMPETITION.
4. MARKETING DEPARTMENT ERA – IS A TIME WHEN ALL MARKETING
ACTIVITIES ARE BROUGHT UNDER THE CONTROL O ONE DEPARTMENT TO
IMPROVE SHORT-RUN POLICY PLANNING AND TO TRY TO INTEGRATE THE
FIRM’S ACTIVITIES.
5. MARKETING COMPANY ERA – IS A TIME WHEN, IN ADDITION TO SHORT-RUN
MARKETING PLANNING, MARKETING PEOPLE DEVELOP A LONG-RANGE
PLANS – SOMETIMES 10 OR MORE YEARS AHEAD.

MARKETING CONCEPT MEANS THAT AN ORGANIZATION AIMS ALL ITS EFFORTS AT

SATISFYING ITS CUSTOMERS – AT A PROFIT.

ACTIVITIES OF BUSINESS INCLUDES THE FOLLOWING;

SALES, INVENTORY CONTROL, SALES PROMOTION, R AND D , WAREHOUSING,

PERSONNEL, ACCOUNTING, PURCHASING, PRODUCTION, ADVERTISING, SHIPPING,
FINANCE.

STRATEGY DECISION AREAS ORGANIZAED BY THE 4 P’S

PRODUCT PLACE PROMOTION PRICE

Physical good objectives objectives objectives
Services channel type promotion blend flexibility
Flexibility market exposure salespeople geographic
Quality level
Accessories
Installation
Instructions
Warranty
Product
Packaging
Branding

MARKETING PLAN IS A WRITTEN STATEMENT OF A MARKETING STRATEGY AND

THE TIME-RELATED DETAILS FOR CARRYING OUT THE STRATEGY. It includes the
marketing mix to be offered, company resources needed, what results are needed.

LAW OF DIMINISHING DEMAND- WHICH SAYS THAT if the price of a product is raised, a
smaller quantity will be demanded and if the price of a product is lowered , a greater quantity will
be demanded.

RELATIONSHIP BETWEEN ECONOMICS AND MARKETING

 ECONOMICS is sometimes called the dismal science because it says that most customers have a
limited income and simply cannot buy everything they want. They must balance their needs and
the price of various products.

OPPORTUNITIES WITH MARKET SEGMENTATION

COMPETITIVE ADVANTAGE - MEANS that a firm has a marketing mix that the target
market sees as better than a competitor’s mix. A competitive advantage may result from efforts
in different areas of the firm – cost-cutting in production, innovative R and D , more effective
purchasing of needed components, or financing for a new distribution facility.

MARKET PENETRATION – means trying to increase sales of a firm’s present product in present
markets – probably through a more aggressive marketing mix. The firm may try to increase the
customers’ rate of use or attract competitors’ customers.

MARKET DEVELOPMENT – means trying to increase sales by selling present products in new
markets. Firms may try advertising in different media to reach new target customer.

PRODUCT DEVELOPMENT – means offering new or improved products for present markets.

DIVERSIFICATION - means moving into totally different lines of business– perhaps entirely
unfamiliar products, markets or even levels in the production-marketing system.

MARKET SEGMENTATION – is a two-step process of naming broad product markets and

segmenting these broad product-markets in order to select target markets and develop suitable
marketing mixes.

SEGMENTING – as an aggregating process- clustering people with similar needs into a market
segment

STEPS TO SEGMENTING PRODUCT-MARKETS

1. NAME THE BROAD PRODUCT-MARKET

2. LIST POTENTIAL CUSOMERS’ NEEDS
3. FORM HOMOGENOEUS SUBMARKETS
4. IDENTIFY THE DETERMINING DIMENSIONS
5. NAME THE POSSIBLE PRODUCT-MAKETS
6. EVALUATE WHY PRODUCT-MARKET SEGMENTS BEHAVE AS THEY DO
7. MAKE A ROUGH ESTIMATE OF THE SIZE O EACH PRODUCT-MARKET
SEGMENT

THE MARKETING ENVIRONMENT FALLS INTO FIVE BASIC AREAS;

1. OBJECTIVES AND RESOURCES OF THE IRM

2. COMPETITIVE ENVIRONMENT
3. ECONOMIC AND TECHNOLOGICAL ENVIRONMENT
4. POLITICAL AND LEGAL ENVIRONMENT
5. CULTURAL AND SOCIAL

THE FIRST OBJECTIVE SAYS THAT THE COMPANY SHOULD DO SOMETHING USEFUL
FOR SOCIETY. BUSINESS CAN NOT EXIST WITHOUT THE APPROVAL OF
CONSUMERS. IF A FIRM ACTIVTIES APPEAR TO BE CONTRARY TO THE CONSUMER
“GOOD” IT CAN BE WIPED OUT ALMOST OVERNIGHT BY POLITICAL OR LEGAL
ACTION – OR CONSUMERS OWN NEGATIVE RESPONSES.
OBJECIVES SHOULD BE “SMART”

COMPETITIVE ENVIRONMENT – AFFECTS THE NUMBER AND TYPES OF

COMPETITORS THE MARKETING MANAGER MUST FACE – AND HOW THEY MAY
BEHAVE. ALTHOUGH MARKETING MANAGERS USUALLY CAN NOT CONTROL THESE
FACTORS, THEY CAN CHOOSE STRATEGIES THAT AVOID HEAD-ON COMPETITION.

COMPETITOR ANALYSIS – AN ORGANIZED APPROACH FOR EVALUATING THE

STRENGTHS AND WEAKNESSES OF CURRENT OR POTENTIAL COMPETITOR’S
MARKETING STRATEGIES.

COMPETITIVE BARRIERS – THE CONDITIONS THAT MAY MAKE IT DIFFICULT TO, OR

EVEN IMPOSSIBLE, FOR A FIRM TO COMPETE IN A MARKET, SUCH BARRIERS MAY
LIMIT YOUR OWN PLANS OR, ALTERNATIVELY, BLOCK COMPETITOR’S RESPONSES
TO AN INNOVATIVE STRATEGY,.

THE ECONOMIC ENVIRONMENT – AFFECTS THE WAY FIRM AND THE WHOLE
ECONOMY USE RESOURCES. TH E ECONOMIC ENVIRONMENT CAN – AND DOES –
CHANGE QUITE RAPIDLY. THIS IS EXEMPLIFIED BY THE CHANGE IN

INTEREST RATE AND USUALLY INCREASE DURING PERIODS OF INFLATION, AND

INLATION IS A FACT OF LIFE IN MANY ECONOMIES. ANOTHER FACTOR THAT
AFFECTS THE ECONOMIC CONDITION IS THE CHANGE IN EXCHANGE RATE ,THAT IS
HOW MUCH ONE COUNTRY’S MONEY IS WORTH IN ANOTHER COUNTRY’S MONEY.

THE TECHNOLOGICAL ENVIRONMENT – THE TECHNICAL SKILLS AND EQUIPMENT

THAT AFFECT THE WAY THE WAY AN ECONOMY’S RESOURCES ARE CONVERTED TO
OUTPUT. Technological development exact marketing in two basic WAYS WITH NEW
PRODUCTS AND NEW PROCESSES. ADVANCES IN ELECRONIC COMMUNICATIONS
MAKE IT POSSIBLE FOR PEOPLE IN DIFFERENT PARTS OF THE WORLD TO
COMMUNICATE FACE TO FACE WITH SATELLITE VIDEO-CONFERENCING AND TO
TRANSMIT FAXES – INCLUDING COMPLEX DESIGN DRAWINGS BY REGULAR
TELEPHONE LINES.

THE POLITICAL ENVIRONMENT – THE ATTITUDES OF PEOPLE, SOCIAL CRITICS, AND

GOVERNMENT ALL AFFECT THE POLITICAL ENVIRONMENT. THIS IS EXEMPLIFIED
THE ‘BUY AMERICAN’ POLICY IN MANY GOVERNMENT CONTRACTS AND BUSINESS
PURCHASE REFLECTS THIS SAME ATTITUDE IN THE UNITED STATES- AS DOES
SUPPORT FOR PROTECTING U.S. PRODUCERS FROM FOREIGN COMPETITION.

Business Cycles

The recurrent but nonperiodic fluctuations in general

business and economic activity that takes place over a
period of years. Fluctuations occur in aggregate variables
like income, output, employment, and prices, most of which
move at about the same time in the same direction, but at
different rates.

Prosperity – the upper phase of a business cycle in which

the economy is operating at or near full employment, and a
high degree of business and consumer optimism is
reflected by a vigorous rate of capital investment and
consumption.

Recession – the downward phase, in which the economy’s

income, output, and employment are decreasing and
declining business and consumer optimism is reflected by a
falling rate of capital investment and consumption.

Depression – the lower phase, in which the economy is

operating with substantial unemployment of the resources,
and there is very little business and consumer optimism as
reflected by a sluggish rate of capital investment and
consumption.

Recovery – the upward phase, in which the economy’s

income, output, and employment are rising and there is a
growing degree o business and consumer optimism as
reflected by an expanding rate of capital investment and
consumption.

TYPES OF UNEMPLOYMENT
1. FRICTIONAL UNEMPLOYMENT. A CERTAIN AMOUNT
OF UNEMPLOYMENT, WHICH IS OF A SHORT-RUN
NATURE AND IT EXISTS BECAUSE OF FRICTIONS IN
THE ECONOMIC SYSTEM SUCH AS IMPERFECT LABOR
MOBILITY, IMPERFECT KNOWLEDGE OF JOB
 OPPORTUNITIES, AND THE ECONOMY’S INABILITY TO
MATCH PEOPLE WITH JOBS.

2. CYCLICAL UNEMPLOYMENT RESULTING FROM

BUSINESS RECESSION AND DEPRESSIONS WHEN
AGGREGATE DEMAND IS TOO FAR BELOW THE FULL
EMPLOYMENT LEVEL

3. STRUCTURAL UNEMPLOYMENT CHANGES WHICH

PREVENT SOME PEOPLE FROM GETTING JOBS
BECAUSE OF THEIR RACE, AGE,LACK OF EDUCATION,
TRAINING, OR GEOGRAPHIC LOCATION.

INFLATION IS A RISE IN THE GENERAL PRICE LEVEL OF

ALL GOODS AND SERVICES. THE GENERAL PRICE
LEVEL THUS VARIES INVERSELY WITH THE
PURCHASING POWER OF MONEY.

TYPES OF INFLATION
1. COST-PUSH INFLATION – EXISTS WHEN PRICES RISE
BECAUSE PRODUCTION COSTS ARE INCREASING
ASTER THAN PRODUCTIVITY OR EFFICIENCY.
SELLERS PRICES ARE DETERMINED BY THEIR
COSTS, AND WAGES ARE THE PRIMARY ELEMENT
OF TOTAL COSTS.
 2. DEMAND –PULL INFLATION – TAKES PLACE WHEN
CONSUMERS AND INVESTORS’ AGGREGATE
DEMAND IS RISING WHILE THE AVAILABLE SUPPLY
OF GOODS IS BECOMING INCREASINGLY LIMITED.

3. PROFIT-PUSH INFLATION – OCCURS WHEN

CORPORATE PRICES AND PROFITS RISE BEFORE
ANY INCREASE IN WAGES TAKES PLACE.

4. STRUCTURAL INFLATION – MAY RESULT FROM

UNEVEN UPWARD DEMAND OR COST PRESSURES IN
SPECIIC INDUSTRIES EVEM THOUGH AGGREGATE
DEMAND IS IN BALANCE WITH AGGREGATE
SUPPLY.

5. HYPERINFLATION – OCCURS WHEN PRICES ARE

RISING WITH LITTLE OR NO INCREASE IN OUTPUT;
HENCE IT IS SOMETIMES CALLED ‘RUNAWAY’ OR
GALLOPING INFLATION.

6. CREEPING INFLATION – OCCURS WHEN THERE IS A

SLOW BUT PERSISTENT UPWARD MOVEMENT IN
THE GENERAL PRICE LEVEL OVER MANY YEARS,
TYPICALLY AT AN AVERAGE ANNUAL RATE OF 3
PERCENT.

SAY’S LAW; SUPPLY CREATES ITS OWN DEMAND

“ … A PRODUCT IS NO SOONER CREATED THAN IT, FROM THAT

INSTANT, OFTEN A MARKET FOR OTHER PRODUCTS TO THE
FULL EXTENT O ITS OWN VALUE. . . THUS, THE MERE
CIRCUMSTANCES OF THE CREATION OF ONE PRODUCT
IMMEDIATELY OPENS A MARKET FOR OTHER PRODUCTS”

“ NO MAN PRODUCES BUT WITH A VIEW TO CONSUME OR

SELL, AND HE NEVER SELLS BUT WITH AN INTENTION TO
PURCHASE SOME OTHER COMMODITY WHICH MAY BE
IMMEDIATELY USEFUL TO HIM OR WHICH MAY CONTRIBUTE
TO FUTURE PRODUCTION. By producing then, he necessarily
becomes either the consumer of his own goods, or the purchaser and
consumer of the goods of some other person.

THE PROPENSITY TO CONSUME

THE LEVEL OF CONSUMPTION DEPENDS ON THE LEVEL
OF INCOME IN A MANNER SUCH THAT AS INCOME INCREASES,
CONSUMPTION INCREASES, BUT NOT AS FAST AS INCOME.

THE PROPENSITY TO SAVE

THE LEVEL OF SAVING DEPENDS ON THE LEVEL OF
INCOME.

AVERAGE PROPENSITY TO CONSUME IS SIMPLY THE RATIO OF

CONSUMPTION TO INCOME. IT TELLS HOW THE PROPORTION
OF EACH INCOME LEVEL THAT THE FAMILY WILL SPEND ON
CONSUMPTION.

AVERAGE POPENSITY TO SAVE IS THE RATIO OF SAVING TO

INCOME AND TELLS US THE PROPORTION OF EACH INCOME
LEVEL THAT THE FAMILY WILL SAVE I.E. NOT SPEND ON
CONSUMPTION.

MARGINAL PROPENSITY TO CONSUME IS THE CHANGE IN

TOTAL CONSUMPTION RESULTING FROM A UNIT CHANGE IN
INCOME
£™o<kaj¶»„|ˆ>KY4Gl
€Ÿ8j:]†z…`±’n

MARGINAL PROPENSITY TO SAVE IS THE CHANGE IN TOTAL

SAVING RESULTING FROM A UNIT CHANGE IN INCOME
LIFE-STYLE DIMENSIONS

1. ACTIVITIES INCLUDES work, hobbies, social events,

vacation, entertainment, club membership, community,
shopping, sports

2. INTERESTS includes family, home job, community,

recreation, fashion, food, media, achievements

3. OPINIONS includes themselves, social issues, politics,

business, economics, education, products, future, culture

4. DEMOGRAPHICS INCLUDES income, age, family cycle,

geographic area, city size, dwelling, occupation, family size,
education.

A SOCIAL CLASS IS A GROUP OF PEOPLE WHO HAVE

APPROXIMATELY EQUAL SOCIAL POSITION AS
VIEWED BY OTHERS IN THE SOCIETY.

A REFERENCE GROUP IS THE PEOPLE TO WHOM AN

INDIVIDUAL LOOKS WHEN FORMING ATTITUDES
ABOUT A PARTICULAR TOPIC.

OPINION LEADER is a person who influence others.

Product means the need-satisfying offering of a firm.

Quality means a product’s ability to satisfy a customer’s needs or requirements.
Service is a deed performed by one party for another

Product assortment is the set of all product lines and individual products that a firm
sells.

Product line is a set of individual products that are closely related.

Individual product is a particular product within a product line. It usually is

differentiated by brand, level of service offered, price, or some other characteristics.

Consumer products are products meant for the final consumer. This includes
convenience products, shopping products, specialty and unsought products.

Business products are products meant for use in producing other products. This
includes installations, accessories, raw materials, components, professional services,
supplies.

Convenience products are products a consumer needs but isn’t willing to spend
much time or effort shopping for.

Staples are products that are bought often, routinely, and without much thought –
like breakfast cereal, canned soup, and most other packaged foods used almost
everyday.

Impulse products are products that are bought quickly – as unplanned purchases-
because of a strong felt need.

Emergency Products are products that are purchased immediately when the need is
great.

Shopping products are products that a customer feels are worth the time and effort
to compare with competing products. This can be divided into homogeneous and
heterogeneous.

July 30,2007
Honorable John Erlpe M. Amante
Provincial Governor
Province of Agusan del Norte
Capitol Building, Butuan City

Dear Honorable Governor Amante:

Greetings of peace and prosperity!

The College of Business and Management Education of the

Holy Child Colleges of Butuan, in its desire for compliance to
TESDA requirements of fielding graduating students to
undertake practicum in different offices, business organizations
and establishments, humbly request you to accommodate the
following COM-SEC students from August 1, 2007 to October 19,
2007. The following are:
1. Mr. CLAROS C. ORCULLO
2. MS. GLEZEL A. SAMONTINA
3. MS. RIZEL C. DURANGO
4. MR. MARLON C. QUIMAY
5. MS. LANIE B. LOREJO
6. MS. DANIE MAE B. DEBAJO
7. MS. JOSEF DE LOS SANTOS

Please feel free to communicate with us any shortcomings and

misbehavior that our assigned practicum-students incurred that is
against or contrary to office and work ethics.

We look forward for your affirmative response.

Thank you very much and more power.

Very Respectfully Yours,

VIRGIL E. GUMANOY
Program Head

PACKAGING FUNCTIONS;
1. CONTAINMENT AND PROTECTION – SHIPPING AND STORAGE EVAPORATION –
SPILLING
 2. USAGE- MULTIPLE PACKAGING
3. COMMUNICATION – INGREDIENTS AND DIRECTIONS
4. MARKET SEGMENTATION – GIFT BOXES AND ITS APPEAL TO SHOPPERS
5. CHANNEL COOPERATION- UNIVERSAL PRODUCT CODE
6. NEW PRODUCT PLANNING

DISTRIBUTION PLANNING IS A SYSTEMATIC DECISION- MAKING REGARDING THE

PHYSICAL MOVEMENT AND TRANSFER OF OWNERSHIP OF A PRODUCT OR SERVICE
FROM PRODUCER TO CONSUMER. IT INCLUDES TRANSPORTAION, STORAGE AND
CUSTOMER TRANSACTION.
FUNCTIONS PERFORMAED IN CHANNELS OF DISTRIBUTION:
1. MARKETING RESEARCH – ANALYZING CUSTOMER CHARACTERISTICS AND
NEEDS.
2. BUYING- PURCHASING ARRANGEMENTS AND TERMS FOR ITEMS.
3. PROMOTION- ADVERTISING, PERSONAL SELLING,SPECIAL SALES AND
EVENTS.
4. CONSUMER SERVICES- DELIVERY, CREDIT
5. PRODUCT PLANNING INCLUDES PRODUCT TESTING,POSITIONING AND
DELETION
6. PRICING- INCLUDES INTERMEDIATE,FINAL PRICING, SKIN THE CREAM
PRICING AND PENETRATION PRICING.
7. DISTRIBUTION- TRNASPORTING, WAREHOUSING AND CUSTOMER CONTACT.

WHOLESALING-INVOLVES THE BUYING OR HANDLING OF MERCHANDISE AND ITS

SUBSEQUENT RESALE TO RETAILERS, ORGANIZATIONAL USERS AND/OR OTHER
WHOLESALERS BUT NOT THE SALE OF SIGNIFICANT VOLUME TO FINAL
CONSUMERS.

PRODUCT CATEGORY OF WHOLESALER:

1. AUTOMOBILE EQUIPMENT
2. CHEMICAL AND ALLIED PRODUCTS
3. ELECTRONIC PARTS AND EQUIPMENT
4. DRUGS AND RELATED ITEMS
5. FLOWWERS AND FLORIST SUPPLIES
6. COFFEE, TEA AND SPICES
7. FISH AND SEA FOODS
8. GENERAL GROCERIES
9. WINES, LIQUOR AND BEER
10. GENERAL MERCHANDISE
11. HARDWARE AND PAINTS
12. JEWELRY
13. BUILDING MATERIALS
14. FUEL OIL
15. COTTON
Four stages of product life cycles:
1. market introduction- sales are low as a new
ideas is first introduced to a market.
Customers are not looking for the product.
They don’t even know about it.
2. market growth-industry sales grow fast- but
industry profit rise and then start falling. The
innovator begins to make big profits as more
and more customers buy. But competitors see
the opportunity and enter the market. This is
the time of bigger profits for the industry. But
it is also when industry profits begin to
decline.
3. market maturity- occurs when the industry
sales level off-and competition gets tougher.
Industry profits go down throughout the
market maturity stage because promotion
costs rise and competitors cut prices to attract
business.
4. sales decline- new products replace the old.
Price competition from dying products
becomes more vigorous.

New-Product development process:

1. idea generation
2. screening
3. idea evaluation
4. development of product and marketing mix
5. commercialization

idea generation includes from customers and users, marketing

research, competitors, other markets, company people,
middlemen.
Screening includes Strengths and weaknesses, fit with objectives,
market trends, rough ROI estimates.
Idea evaluation includes concept testing, reactions from
customers, Rough estimates of cost, sales and profits.
Development includes research and development, develop model
of service, Test marketing mix, revise plans as needed,
Commercialization – finalize product and marketing plan, start
production and marketing ‘roll-out’ in select markets, final ROI
estimate.

Retailing covers all of the activities involved in the sale of

products to final consumer. Retailers range from large,
sophisticated chains of specialized stores.

Questions to be answered:
1. What are the different kinds of retailers?
2. Why did they develop?
3. How do their strategies vary?
4. Why are there differences in retailing from one country to
another?
5. How is retailing changing?

Factors to consider in choosing a particular retailer:

1. Convenience
2. Variety of selection
3. quality of products
4. help from salespeople
5. reputation for integrity and fairness in dealing
6. special services offered- delivery, credit, returned-good
privilege
7. value offered

Convenience store- is a convenient place to shop either because it

is centrally located near other shopping or because it is in the
neighborhood.
Shopping stores attract customers from greater distances because
of the width and depth of their assortments.
Specialty stores- are those for which customers have developed a
strong attraction.
Single-line or limited-line stores are stores that specialize in
certain lines of related products rather than a wide assortment.
Specialty shop- a type of conventional limited-line store is usually
small and has a distinct personality. Examples are high-quality
sporting goods, exclusive clothing, cameras, or even microwave
oven.
Department stores- are larger stores that are originated into many
separate departments and offer many product lines.
Mass-merchandising concept which says that retailers should
offer low prices to get faster turnover and greater sales volume.

Supermarkets-large stores specializing in groceries with self-

service and wide assortments.

Catalog showroom retailers-sell several lines out of a catalog and

display showroom- with backup inventories.
Discount houses-offered hard goods(camera, tv’s, appliances) at
substantial price cuts to customers who would go to discounter’s
low-rent stores, pay cash, and take care of any service or repair
problems.

Mass merchandisers are large, self-service stores with many

departments that emphasize soft goods ( housewares, clothing,
and fabrics)

Superstores-very large stores that try to carry not only food, but
all goods and services that the consumer purchases routinely.

Convenience stores-are a convenience-oriented variation of the

conventional limited-line food stores.

Automatic vending- is selling and delivering products through

vending machines.

Telephone and direct-mail retailing allow consumers to shop at

home- usually placing orders by mail or atoll-free long distance
telephone call.

Door-to-door selling means doing directly to the consumer’s home

Planned shopping center is a set of stores planned as a unit to

satisfy some market needs.

Neighborhood shopping centers consist of several convenience

stores. These centers usually include a supermarket, drugstore,
hardware store, beauty shop, laundry, dry cleaner, gas station.

Wholesaling is concerned with the activities of those persons or

establishments which sells to retailers and other merchants,
and/or industrial, institutional, and commercial users, but who do
not sell in large amount to final consumers.

Activities of wholesalers:

1. Regroup goods - to provide the quantity and assortment

customers want at the lowest possible cost.
2. Anticipate needs – forecast customer’s demands and buy
accordingly.
3. Carry stocks – carry inventory so that customers don’t have
to store a large inventory.
4. Deliver goods – provide prompt delivery at low cost.
5. Grant credit – give credit to customers, perhaps applying
their working capital.
6. Provide information and advisory service – supply price and
technical information as well as suggestions on how to install
and sell products.
7. Provide part of the buying functions – offer products to
potential customers so they don’t have to hunt for supply
sources.
8. Own and transfer title to products – help complete a sale
without the need of other middlemen, speeding the whole
buying and selling process.

Kinds of wholesalers

1. Merchant wholesalers – take title to the products they sell.

(example , a wholesale lumber yard that buys plywood from
the producer.)
2. Service wholesalers provide all the wholesaling functions like
selling of general merchandise, single-line product and
specialty.
3. General merchandise wholesaler are service wholesalers who
carry a wide variety of nonperishable items such as hardware,
electrical supplies, plumbing supplies, furniture, drugs,
cosmetics and automobile equipment.
4. Single-line wholesalers are service wholesalers who carry a
narrower line of merchandise than general merchandise,
examples are food, wearing apparel, industrial tools or
supplies.
5. Specialty wholesalers – are service wholesalers who carry a
very narrow range of products and offer more information
and service than others. Examples are health foods and
oriental foods.
6. Limited-function wholesalers – provide only some wholesaling
functions.
7. Cash-and-carry wholesaler- operate like service wholesaler.
8. Drop-shippers – own the products they sell- but they do not
actually handle, stock, or deliver them.
9. Truck wholesalers- specialize in delivering products that they
stock in their own trucks.
10. Mail-order wholesalers sell out of catalogs that may be
distributed widely to smaller industrial customers or retailers.
11. Producers’ cooperatives – operate almost as full service
wholesalers with the profits going to the cooperative’s
customer-members.
12. Rack jabbers – specialize in nonfood products through
grocery stores. They specialize in housewares, hardware items,
books and magazines.

Promotion – is communicating information between seller and

potential buyer or others in the channel to influence attitudes and
behavior.

Personal selling – involves direct spoken communication between

sellers and potential customers. Face-to-face selling provides
immediate feedback - which helps salespeople to adapt.

Mass selling – is communicating with large numbers of potential

customers at the same time

Advertising is any paid form of nonpersonal presentation of ideas

goods, or services by an identified sponsor.

Publicity is any unpaid of nonpersonal presentation of ideas,

goods, or services.

Sales promotion – refers to promotion activities that stimulate

interest, trial, or purchase by final customers or others in the
channel.

Examples of Sales promotion activities:

For customers or users – includes contests, coupons, aisle displays,

samples, trade shows, point of purchase materials, banners and
streamers, trading stamps, sponsored events.
For middlemen – includes prices deals, promotion allowances,
sales contests, calendars, gifts, trade shows, meetings, catalogs,
merchandising aids.

Company’s own sales force – contents, bonuses, meetings,

portfolios, displays, sales aids, training materials.

The Communication Process:

Source - Encoding - Message channel - Decoding -

Receiver - Feedback.

Communication process means a source trying to reach a

receiver with a message.

Source the sender of the message.

Receiver – a potential customer.

Noise is any distraction that reduces the effectiveness of the

communication process.

Encoding – is the source deciding what it wants to say and

translating it into words or symbols that will have the same
meaning to the receiver.

Decoding – is the receiver translating the message. This process

can be tricky. The meaning of various words and symbols may
differ depending on the attitudes and experiences of the two
groups.
Questions in Managerial Economics:

1. Try to make a review of the present environment. As a managerial

economist, relate your findings to the operations of a) a service
organization; b) a manufacturing; c) an agriculture-based company.
2. How does the knowledge of industrial economics help government
policy makers and executives in the private sector in policy
formulation? Give a concrete example in the tourism industry.
3. There are various “stakeholders” in the business organization, e. g.
consumers, stockholders, creditors, distributors, and suppliers, the
general public. What are their respective stakes in the company? How
does the managerial economist strike a happy balance between the
multifarious and complex interests of these groups?
4. “Tomorrow is not going to be too different from yesterday. Just project
the normal rate or growth in sales. And if you have to increase your
price, don’t worry: after all, you’re in the seller’s market. The demand
still far exceeds the supply”. Comment on the usefulness of such a
statement given today’s economic environment.
5. Explain: The more uncertainties a manager faces, the greater is his
need for planning. Illustrate by giving specific. Philippine cases.
6. The that a firm can produce depends on the amounts of input resources
used. The output tends to increase as more inputs are used, until a
certain point where the increase in output becomes smaller. This is
otherwise known as the law of diminishing returns. Give an example
to illustrate this famous law in economics.
7. Most firms are forced to reduce their price if they want to sell beyond a
certain volume. Can firms sell any quantity they want at a given price?
Of what use are the Total Cost (TC) and Total Revenue (TR) curves in
this example?
8. When do you say that an individual or an organization is productive?
Unproductive? Illustrate,
9. Some firms advocate the private-profitability goal while others go for
the concept of social profitability. Differentiate these two business
goals.
10. Give the criteria by which any volume of production may be
considered as being at its maximum-profit point. For some firms,
effectiveness only means profitability: for others, effectiveness is
equated with others goals. Explain divergence in goals.
11. You were asked to investigate the economic feasibility of the following
projects from their respective investors’ viewpoint: a) a public road, b)
 gambling casino, c) a chemical plant. Prepare an outline of how you
think the research should be done, highlighting the most crucial
questions that need to be answered to arrive at a rational investment
decision. Likewise, discuss the implications of the differences in the
nature of these projects on the choice of investment criteria to use.
12. Can there be a riskless business? Explain
13. in what way is the qualitative judgment of the manager still the final
arbiter in decision-making?
14. A corporate is weakened by an inaccurate sales forecast. What is the
effect of an overly optimistic sales forecast? An overly pessimistic
forecast?

Management 100 Principles of Management

Organizational Structure – the framework in which the organization defines how tasks
are divided, resources are developed, and departments are coordinated.

Organizational chart – the visual representation of an organization’s structure.

Work specialization – the degree to which organizational tasks are subdivided into
individual jobs, also called division of labor.

Chain of command – An unbroken line of authority that links all individuals in the
organization and specifies who reports to whom.

Authority – the formal and legitimate right of a manager to make decisions, issue,
orders and allocate resources to achieve organizationally desired outcomes.

Responsibility – the duty to perform the task or activity an employee has been
assigned.

Accountability – the fact that the people with authority and responsibility are subject
to reporting and justifying task outcomes to those above them in the chain of command.

Delegation – The process managers use to transfer authority and responsibility to

position below them in the authority.

Span of Management – the number of employees who report to a supervisor; also called
the span of control.

Tall structure – a management structure characterized by an overall narrow span of

management and a relatively large number of hierarchical levels.

Flat structure – A management structure characterized by an overall broad span of

control and relatively few hierarchical levels.

Centralization – The location of decision authority near top organizational levels

Decentralization – The location of decision authority near lower organizational level

Administrative Overhead – The resources allocated to administrative and support staff

 Formalization – the written documentation used to direct and control employees.

Departmentalization – the basis on which individuals are grouped into departments and departments
into total organization.

Functional structure – An organizational structure in which positions are grouped into department
based on similar skills, expertise, and resource use.