CHAPTER 2 The Management Aspect
The Management aspect is one of the important aspects in
establishing a business. To achieve this, management must be able to
plan all activities to become productive and competitive in the industry
through human resource, financial capability, and new technologies. This
includes a study of officers and key personnel, basic consideration in
forming the organization, form of ownership, organizational chart and
project schedule. The main objective of this plan is to determine the option
effectiveness of the organization set-up.
The objectives are as follows:
1. To know the project originators, investors and managers of the
business and to determine how much is the capital contribution.
2. To discuss the activities to do and the time allotted to each.
3. To identify the type of ownership to be formed.
4. To enumerate the different positions, qualifications and its duties
and responsibilities.
5. To adopt an organizational structure for the business.
6. To establish a detailed compensation scheme for the employees of
the business.
Project Originators, Investors and Managers
This refers to the persons who are responsible for making the
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and carried out effectively. Based on the mutual agreement and consent
of each proponent, the partnership will be denominated as
“____________.” The proponents are the promoters and managers of the business venture and agreed to make a general partnership, where each
partner is subject to unlimited liability for the debts of the business. For the
one who serves as the general manager of the business, the person
elected for this position is ___________. The partners agreed to
contribute capital in the form of cash. Moreover, the capital contribution
amounting to ₱100,000 will be gleaned from the fellow partners of the partnership.
The following persons are the originators of the business and each
respective capital contributions are shown below:
Table 2
Total Capital Contribution
Names
Type of Partners Position in the Company Capital Contribution As to Liability As to Contribution 1. Surname, First
name, M.I. General Capitalist - ₱14,285.71
2. General Capitalist - ₱14,285.71 3. General Capitalist - ₱14,285.71 4. General Capitalist - ₱14,285.71 5. General Industrial-Capitalist General Manager ₱14,285.71 6. General Capitalist - ₱14,285.71 7. General Capitalist - ₱14,285.71 Total ₱ 100,000.00
Project Schedule
Pre-Operating Schedule Time Allotted
1. Conduct Feasibility Study June 27, 2017 – October 2017
During this period, the proponents will conduct a study about the
proposed product and will be able to investigate whether the business is
viable or not. In order to examine the product’s viability, the proponents will gather data with the use of various instruments and techniques such
as questionnaires, interviews and information from legit websites, books,
journals and other sources of essential data with regards to the study.
2. Putting up Equity July 14, 2017 – October 2017
Capitalization is crucial in establishing a business as the business
will not be materialized without it. Finances of the proposed business must
be planned wisely during the period. The proponents will contribute
equally and ample time is given in order to complete the amount needed
for the operation of the business. The proponents agreed to contribute
₱14,285.71 at the end of the September.
3. Registration November 1, 2017 – December 31, 2017
All the legal procedures and requirements for the start of the
business must be accomplished during this period. Securing business
permits from Municipal or City Government, Security and Exchange
Commission (SEC), Bureau of Internal Revenue (BIR), Department of
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Social Security System (SSS) and Philippine Health Insurance
Corporation (PhilHealth) must be completed.
4. Plant Rental and Renovation January 1 – 31, 2018
During this period, the proponents are going to locate the proposed
business inside Centro Escolar University 9 Mendiola St, San Miguel,
Manila, 1005 Metro Manila. The existing space inside the campus is
widely available for storing, distributing and processing inventory and
supplies mainly related for the production of output. The proponents
assumed to spend in leasing the facility for a total cost of ₱3000 per month. Refurbishing the leased space will come up with putting up of
tarpaulins and posters.
5. Canvassing and Acquiring of Equipment February 1 – 28, 2018
For this duration, the proponents will start to canvass and acquire
equipment that is needed for the manufacturing and distributing of the
product.
6. Canvassing and Purchasing of Raw Materials March 1 – 31, 2018
The proponents will examine properly the amounts of raw materials
in order to acquire the ingredients at a lower cost. Searching for suppliers
is also taken into consideration in order to avoid negative fluctuations of
the prices of raw materials needed.
7. Hiring and Training of Employees April 1 – 30, 2018
Selection of the qualified applicants will be done in this period. After
regarding the business. Preparations such as the procedures and control
in the manufacturing of the product, handling of cash and the right
approach to customers will be taught to employees in order to build up
their confidence and increase productivity that will help them sustain
motivation in their current state, as well as in the future. There are also
factors to consider that significantly influences the employees on how they
will maintain a positive impression in the working environment by
recognizing their hard works and advocating balance in life and work.
Safety procedures will be extensively employed to assist the employees
with working safely.
8. Promotional Campaign May 1 – 31, 2018
Since the setting up of the business is nearly approaching, this is
the best time to endorse the product. Having enough time to notify people
about the product by giving leaflets or brochures, posting through social
media platforms and blog sites, and informing the public verbally will make
the business known.
The goal of the proponents is to make the product well-known in
order for people to recognize and buy the product.
9. Start of Normal Operation June 2018 Onwards
After accomplishing all the necessary requirements, the business
will start to operate. Continuous promoting of product is still needed and
meeting the demands of the customers is to be obtained for the
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Figure 1 Gantt Chart
Activities
2017 2018
Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
1. Feasibility Study
2. Putting up Equity
3. Registration
4. Location Rental and Renovation
5. Canvassing and Procurement of Equipment
6. Canvassing and Purchasing of Raw Materials
7. Hiring and Training of Employees
8. Promotional Campaign
Form of Business Ownership
Partnership is the proponents’ form of business ownership because each of the proponents will contribute in the business capital. Partnership
means that the business is owned by two or more persons who contribute
money or capital, talent or industry with the intention of dividing the profits
among themselves.
The proponents decided to utilize a partnership form of business
organization because it is a good choice of legal structure for a new
business. Being a partnership, the business owners necessarily share the
profits, the liabilities and the decision making. Some of the significant
characteristics of a partnership type of business in the Philippines are first
is it has limited life which it may be dissolved or its operations terminated
either by the acts of partners or by the operation of law and the second
significant characteristic of partnership is that it is based on contracts
because it is created by virtue of a contract entered into by the partners.
While at times it is necessary that the contract be in writing and that its
terms are specifically expressed.
The following are the advantages of partnership form of business
ownership:
Flexible Capital Sources
Ease of Formation
Shared Responsibility
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The following are the disadvantages of partnership form of
business ownership: Disagreements Unlimited Liability Taxation Profit Sharing Internal Organization
This is a discussion that will be used for the proposed business and
it includes Manpower requirements/ Job Analysis, Organizational Chart
and Compensation Scheme.
Manpower Requirements/ Job Analysis
The Job Analysis deals with bringing together and evaluating the
information about the content and requirements of individual regarding the
specific job in terms of activities involved and attributes needed to perform
the activities. The manpower is composed of the partners only from the
partnership. Each should possess the qualification in order to undertake
an effective and efficient arrangement of resources in the organization.
The job analysis is performed by enumerating all positions needed
for the business to operate:
Job Title: General Manager Job Description:
Oversees key projects, processes and performance reports, data and analysis.
Formulates and administers firm’s policies, directing and coordinating all divisional unit activities.
Reviews the outcome of operations, value of costs and forecast of acquired data.
Oversees manufacturing flow of materials and labor productivity.
Job Specification:
Male or Female.
Must be 25 years old and above.
Possesses bachelor’s degree or master’s degree in business administration.
Must have at least two years of work experience in similar or related field.
Must be able to speak effectively in English language.
Must have sufficient computer skills and be able to use company-issued software programs.
Knowledgeable of office administration procedures and resource management disciplines.
Must be able to perform each essential duty and responsibility in a safe and satisfactory manner.
Job Title: Supervisor Job Description:
Oversees the workflow of the business environment.
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Ensures that each job role performs such primary responsibilities and duties, in the course of accomplishing with the firm’s objectives.
Monitors employee productivity and provides constructive feedback and coaching.
Ensures adherence to legal and company policies and procedures and undertake disciplinary actions if the need arises.
Passes information to general manager either about the reward and promotion of employees based on performance or concerns in
hiring and firing employees.
Job Specification:
Male or Female.
Must be 21 years old and above.
Possesses bachelor’s degree or master’s degree in business administration.
Must have at least two years of work experience in similar or related field.
Must have an excellent communication and interpersonal skills. Familiarity with company policies and legal guidelines of the related
field.
Proper knowledge in logistical details focusing on efficiency and he/she can derive solutions out of analyses.
workers.
Job Title: Sales Assistant Job Description:
Maintains relationships with clients by providing support, information, and guidance.
Sells products by establishing contact and develops relationships with prospects and recommending solutions.
Prepares reports and proposals by collecting, analyzing, and summarizing information.
Participates in team effort by accomplishing related results. Benchmarks a pleasing personality and state-of-the-art practices. Listens to customer requirements and presents relevant information
appropriately.
Identifies business opportunities by identifying prospects and evaluating their position in the industry.
Job Specification:
Male or Female.
Must be at least 18 years old.
Possesses bachelor’s degree in business administration and any other degree subject is acceptable particularly relevant to technical
or medical sales.
Must have relevant experience gained in any commercial area involving contact with customers or the general public.
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Knowledgeable in the aspects of information technology, market trends and commercial environment.
Job Title: Production Worker Job Description:
Controls the functioning of machinery and equipment. Cleans and maintains work areas and machinery.
Measures and quantifies the set of raw materials needed for production.
Reports machinery and equipment faults to maintenance staff. Stores goods and feeds raw materials in the factory and
warehouse.
Packs finished goods to be provided for customers Carries out basic quality and testing checks.
Executes work assignments and procedures.
Job Specification:
Male or Female.
Must be at least 18 years old.
Any degree subject is acceptable even without high school diploma, although high school graduates are more preferred.
Considers work ethics and organizational skills. Must be able to work briskly and efficiently.
General Manager
Supervisor
Sales Assistant Production Worker
Organizational Chart
The organizational chart is a graphical formation that displays the
important details in the organizational structure including the major
functions and their respective relationships among positions according to
authority and responsibility. This refers to the diagram showing the key
functions of the line and staff organizational structure.
Figure 2
Organizational Chart Compensation Scheme
This includes the position of the employees, basic monthly salary,
basic annual salary, total annual salary, the necessary monthly deductions
such as SSS, Philhealth, Pag-IBIG contributions and their respective
14 Table 3
Compensation Scheme for the First Year of Operation
Position Basic Monthly Pay Basic Annual pay Withhold-ing Tax SSS Contribution Philhealth Contribution Pag-IBIG Contribution Monthly Contributions Annual Contributions 13th Month Pay Total Annual Pay EE ER EE ER EE ER General Manager ₱15,600.00 ₱182,200.00 1,500.07 563.20 1,141.80 187.50 187.50 156.00 312.00 1641.30 19,695.60 15,600.00 ₱220,995.53 Supervisor 14,400.00 172,800.00 1419.17 526.80 1,068.20 175.00 175.00 144.00 288.00 845.80 10,149.60 14,400.00 195,930.43 Sales Assistant 12,000.00 144,000.00 967.13 436.00 884.00 150.00 150.00 120.00 240.00 706.00 8,472.00 12,000.00 163,504.87 Production Worker 11,784.00 141,408.00 926.86 436.00 884.00 137.50 137.50 117.84 235.00 691.34 8,296.08 11,784.00 160,561.22 Total ₱53,784.00 ₱640,408.00 ₱740,992.05
Table 4
Projected Compensation Scheme
Position/
Job Title Year 1 Year 2 Year 3 Year 4 Year 5
General Manager ₱182,200.00 ₱185,844.00 ₱189,560.88 ₱193,352.10 ₱197,219.14 Supervisor 172,800.00 176,256.00 179,781.12 183,376.74 187,044.28 Sales Assistant 144,000.00 146,880.00 149,817.60 152,813.95 155,870.23 Production Worker 141,408.00 144,236.16 147,120.88 150,063.30 153,064.57 Total ₱640,408.00 ₱653,256.16 ₱666,280.48 ₱679,606.09 ₱693,198.22
Table 4 exhibits the projection for the compensation increased of
2% annually for five years, due to inflation, economic changes and other
factors that mean the need for increase in salaries.
