Mindanao State University

Business Efficiency and the Promotion of Public Trust

Submitted to the
Ramon V. Del Rosario College of Business
De La Salle University Manila

In Partial Fulfillment
Of the requirements in
ECN520M: Business Economics

Submitted by:
Banse, Jessa Mae
Celestino, Edward

Submitted to:
Ma. Concepcion Latoja

February 25, 2017

 Introduction
1 The Mindanao State University (MSU)
was created through Republic Act (RA) No.
1387, as amended by RA 1893, RA 3791 and
RA 3868, as a non stock, not for profit
public higher education institution. Formally
established in Marawi City on September 1,
1961, as a one campus university, now it has
grown into a University System with seven
major campuses and four other external units
located in strategic areas in Mindanao.
2 Like any other educational
Logos of Mindanao State University Campuses. (From institution, its mandate is to provide instruction
left to right) Buug, General Santos, Naawan, Lanao for both undergraduate and graduate levels in
Norte Agricultural College, Iligan Institute of
Technology, and Maguindanao. Not included are the literature, business, engineering, arts and
logos of MSU LNCAT, Maigo, Owa o, Tawi tawi sciences, to give professional and technical
and Jolo, Sulu. Center is MSU Marawi, main campus.
training, to encourage and undertake research,
to contribute to the growth and dissemination of knowledge, and to better implement the policy
of the government in the intensification of the education of the Filipino youth, with emphasis on
Native Culture, Arts, Science, Philosophy and Literature. The MSU system was created to
answer the higher education needs of the Southern Philippines, integrate cultural communities
into the mainstream, especially Muslims, of the nations social and political life, and provide
skilled manpower to Mindanao, Sulu, and Palawan (MINSUPALA).

Mindanao StateLike
Palawan (MINSUPALA). University Iligan
any other Institute
educational of Technology
institution, (MSU
its mandate is to provide
IIT) high
3 The Institute was primarily created to cater engineering and relevant programs (e.g.
technical vocational or engineering technology diploma courses) considering the rise of
industrialization (for example National Steel Corporation) in Iligan City. In 1967 before it was
integrated into the MSU system, the then Lanao Technical School (LTS) had already offered
Bachelor of Science in Commerce major in Accounting; hence its first college/school was
School of Management Technology (now College of Business Administration and Accountancy
CBAA). In the coming year, the Institute will be celebrating its golden (50th) charter day, but
CBAA will turn gold this year.

Before MSU IIT: History

4
1948 1956 Lanao Norte 1967 (BOR Res. 277) 1975 (BOR Res. 894)
Iligan High Technical School (Lanao Extension division of Autonomous unit of
School Technical School) MSU MSU

1946 1950 1965 (RA No. 4626) July 12, 1968
Iligan Junior Iligan City National Northern Mindanao (RA No. 5363)
High School High School Institute of Technology MSU IIT

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5 The Institute was originally established in 1946, shortly after the war, as Iligan Junior
High School, and was renamed in 1948 as Iligan High School, and Iligan City National High
School (ICHS) in 1950 when Iligan became a chartered city. In 1956, the ICHS was converted to
the Lanao Norte Technical School (LNTS, then was shortened to Lanao Technical School or
LTS), under the Bureau of Vocational Education. In 1965, President Diosdado Macapagal signed
RA No. 4626 which converted LTS to the Northern Mindanao Institute of Technology (NMIT),
although this law was not enforced. After a feasibility study conducted in 1967 as authorized by
BOR Resolution No. 277, the MSU created an extension division inside LTS and initially
offered General Education program leading to a four year degree in Bachelor of Science in
Business Administration major in Accounting which will be completed at the main campus.
Finally, in July 12, 1968 President Ferdinand E. Marcos signed RA 5363 which renamed NMIT
to Iligan Institute of Technology and integrated the same into the Mindanao State University.

6 In 1975, the comprehensive organizational plan of MSU IIT was approved by the Board
of Regents and BOR Resolution No. 894 made the Institute the first financially autonomous unit
of the MSU system. Its budget is placed directly into the General Appropriations Act of the
National Capital Region and no longer integrated in the MSU systems budget; however, its
policies are still under the systems Board of Regents.

MSU IIT: The Now

7 Since its establishment, the institute has provided quality education to students from all
over the Philippines, but specifically to students from MINSUPALA. As of date, the institute has
8, 940 undergraduate and 665 graduate students enrolled in any of the programs of its six (6)
colleges (Engineering and Technology, Science and Mathematics, Arts and Social Sciences,
Education, Nursing, and Business Administration) and two (2) schools (Computer Studies, and
Graduate Studies). The Institute also has a junior and high school, the Integrated Developmental
School, which is intended to be the practicum laboratory of the College of Education.
Currently, the Institutes manpower is composed of 483 faculty members, 101 lecturers, and
398 staff.

Leadership & Direction

8 Sukarno D. Tanggol, DPA
Chancellor

VC Academic VC Administration VC Research & VC Planning &

Affairs & Finance Extension Development
Edgar W. Ignacio, Ph. D. David N. Almarez, Ph. D. Jinky B. Bornales, Ph. D. Feliciano B. Alagao, Ph. D.

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9
VISION
INTEGRITY
COMMITMENT Ability to stand for EXCELLENCE A world-class institution of higher learning
Bound emotionally Being superior in
and intellectually to
what is morally
ones performance
renowned for its excellence in science and
right and to fulfill
the Institution.
its commitments.
product, and technology and for its commitment to the holistic
output. development of the individual and society.
TEAMWORK ACCOUNTABILITY MISSION
10 Being able to work Accepting To provide quality education for the industrial and socio-
collaboratively responsibilities for
with others in a ones action. economic development of Mindanao with its diverse
group. cultures through relevant programs in instruction,
CORE VALUES research, extension and community involvement.

Place in the Industry

11 True to its commitment to excellence, the Institute has eight (8) programs which are
designated by CHED as Centers of Development: Ceramic Engineering, Chemical
Engineering, Filipino, History, Information Technology, Marine Science, Sociology, and
Statistics. Six (6) programs are also selected as Centers of Excellence: Biology, Chemistry,
Mathematics, Mechanical Engineering, Physics, and Teacher Education.

Programs and Objective

12 The very existence and purpose of the Institute is laid down in the law that created it, RA
No. 5363. Under Section 2 of the law, the purpose of the institute is to provide a program for
an effective manpower training urgently needed for the industrial and commercial development
of the Mindanao State University. The law also created an Advisory Council to coordinate the
training needs of the Institute and the labor requirements in the industry particularly in the
Mindanao region. The Advisory Council is composed of members from different industries
determined by the Board of Regents. Below are the objectives of the Institute as mandated in the
BOR Resolution No. 411, s. 1968:
To develop and implement training programs geared to meet the technical and skilled
manpower requirements of the specific type, magnitude, and level of competence needed by
existing and projected industries in Iligan City and its environs;
To initiate and undertake projects and studies which bear on the manpower needs, industrial
growth of Iligan, and other development projects including those needed by specific
industries;
To organize and implement, as needed by the community, academic programs for the
development of the technical and professional manpower that will enhance and support the
industrial growth of Iligan within the economic and social development plan for Mindanao.

13 MSU - IIT, as a State University, has its mandate from the public expressed through the
roadmap developed in 2012 by the Commission on Higher Education (CHEd), the Philippine
Association of State Universities and Colleges (PASUC), and the Department of Budget and
Management (DBM). The roadmap which should be attained in five years consists of: (1)

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 improving the efficiency of public higher education systems, (2) upgrading the quality of
education, and (3) enhancing access to quality higher education

14 To retain itself as one of the top SUCs in the Philippines, MSU - IIT strategized the
rationalization of program offerings. From taking up developmental initiatives in preparing for K
+ 12 program, the institute has also started subscribing to Outcomes-Based Education (OBE),
where student achievements are measured based on prescribed outcomes. Furthermore, new
course offerings are given based on industry needs with matching faculty competencies and
resources. In addition, the Institute prioritizes resource utilization especially since it receives the
biggest chunk of the CHEd budget for SUCs in Northern Mindanao, second in the whole
Philippines after the University of the Philippines system. To generate more income, the institute
has heightened its income-generating projects such as conducts of trainings and reviews.

15 The Institute is subject to regulations and pronouncements of the Civil Service

Commission which guide the employees of the Institute in their daily conduct of operations,
specifically:
RA No. 6713 Code of Conduct and Ethical Standards for Public Officials and
Employees
CSC Res 002515 Revised Dress Code Prescribed for All Government Officials and
Employees in the Workplace
CSC MC 1-91 Quoting Memorandum Circular No. 04, Series 1991, of the Civil Service
Commission
All other CSC memorandum circular.

16 Financially, the Institute follows the mandate of the Department of Budget and
Management, the Commission on Audit, and employs the New Government Accounting System
(NGAS). Generally, their pronouncements limit the activities the Institute can undergo because
of budgetary constraints. The Institute also works collaboratively with the Department of
Science and Technology and the Department of Trade and Industry for grants and funding.

17 The Institute and its constituents had been a consistent recipient of local and international
support; however, due to the nature of the Institute (being a government owned entity) it takes
considerable amount time before funds are released for intended purpose. Hence, the delivery of
some projects to their beneficiary are delayed. The same is true when budget (money) is released
from internal funds for research, extension, and faculty/staff development programs (trainings
and seminar).

18 MSU - IIT invests in projects that drive quality to be more efficient. The Human
Resource Management Division (HRMD) implemented the Strategic Performance Management
System focusing on the importance of linking individual performance with organizational

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 performance. On the other hand, the Office of the Vice Chancellor for Planning and
Development (OVCPD) created a unified reporting system which considers the different
requirements of agencies which in turn improved the submission of consistent and accurate data.
Internally, the Institute follows the Revised 2005 Integrated Scheme for Ranking and Promotion
(ISRP), which provides guideline for ranking of newly hired and promotion of current
employees, BOR resolutions, and special orders.

19 Regular upgrading/updating of faculty and staffs knowledge is also conducted through

seminars and endeavor for graduate/further studies, funded by the Institute. With CHEds K 12
Transition Scholarship Program, more or less thirty faculty and staffs were already sent for
further studies, both locally and internationally.

Key Performance Indicators (KPIs)

20 During the last quarter of the academic year, each college will pass its own work and
financial plan which will later be integrated into the Institutes financial plan and will be
included in the Annual Budget. Usually, the administration set target performance and the same
is consulted with the colleges for their commitment. Presented in the next page is the list of areas
with specific performance indicators.

21 The KPIs for both strategic priorities and core functions are similar; only that the latters
KPIs are more specific. Generally, the KPIs for strategic priorities are suggestive of public trust.
As a public higher education institution, it is the primary goal of the Institute to produce quality
graduates through quality programs, instructors and facilities, to provide a means so that higher
education be available to the members of the marginalized community, and to make the
community the partner of the Institute in its endeavors. For different cost centers, KPIs are
more specific. Although generally attainable, sometimes the achievement of one objective will
sacrifice the other. For example, due to the small population of faculty members, focus on
research may undermine their instruction function, considering that a research culture is yet to be
cultivated in the Institute. Community engagement is also an uncontrollable factor because one
cannot impose commitment from the stakeholders. However, support from other national
agencies (CHEd, DTI, DOST) makes the Institutes efforts for instruction, community
engagement, research, and extension possible.

2016 Launching
22 The Institutes drive to achieve its objectives to cater education needs and alleviate the
economic status of its immediate community led to its more emphasis on research and extension.
Researches now are encouraged to be entrepreneurially or socially feasible. In 2016, the Institute
opened its first Center for Innovation and Technopreneurship (CIT) under strategic direction of
the CBAA, Premier Research Institute of Science and Mathematics (PRISM) of the College of
Science and Mathematics, and housed the FabLab Mindanao in the College of Engineering.

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 23 Area Key Performance Indicators (KPIs)
I. STRATEGIC PRIORITIES
A. National Government Cascaded Priorities
- Relevant and quality tertiary education Increased passing rate for board exam programs; at least 50% above national
ensured to achieve inclusive growth passing rate
Increased retention rate and number of graduates
Increased number of graduates employed in program related jobs
- Access of deserving but poor students Increased number of students in priority programs awarded financial aid
to quality tertiary education increased Increased number of students awarded financial aid who completed their degrees
- Higher education research improved to Increased number of faculty members pursuing PHD degrees
promote economic productivity and Increased number of faculty members publishing research works (investigative
innovation or basic and applied scientific research)
Increased number of faculty member engaged in research work in the production
of technologies for commercialization or livelihood improvement
B. Community engagement Increased partnership with LGUs, industry, SMEs, and local entrepreneurs and
other national agency in developing, implementing or using new technologies
relevant to agro-industrial development
II. CORE FUNCTIONS
A. Instruction Increase number of COD/COE and AACCUP Accredited programs
B. Research Increased number scholarly papers accepted/submitted/published in reputable
local/national/international publications
Increased number of faculty members/staff presenting scholarly papers in
local/regional/international conferences
Increased number faculty members, staff and students participated in continuing
research capability building trainings
C. Extension Conduct of at least one (1) stakeholders workshop/meeting
Increased number of faculty members participated in
local/regional/national/international extension trainings
Increased number benefactors/partners providing cash and/or in kind donations
for extension activities
Conduct at least four entrepreneurial/management competency trainings
Increased number of faculty members, staff and students who are involved in
extension
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24 The first digital fabrication laboratory in Mindanao. It houses
a technical prototyping platform for invention and innovation,
and assists in the product development of SMEs in the
locality. (IIT & DTI)
25 CIT is the first business incubator in Mindanao that aims to
create a progressive entrepreneurial ecosystem through
community building activities and technology-based business
support services. (IIT & DOST-PCIEERD)
PRISM houses the state of the art equipment and
26
research facilities for Science, Mathematics, and Engineering.
(IIT & CHED)

27 The Institute has not forgotten its primary function of instruction. Yearly, the Institute
sends faculty members and staffs for graduate and post graduate studies. As CHEd introduced
the K12 Transition Scholarship programs, more personnel were sent locally and abroad.

28 Jaro Development Corporation (Livestock Marketing)

Objective Description

Expand Meatshop Operations Provide timely and accurate financial report to guide
Management strategy and decision

Intensify marketing Campaign Provide costs and statistics on actual campaign expenditures to
assist Marketing Department evaluate campaign program
effectiveness

Develop Employees Support Management programs to send the staffs to seminars and
workshops to enhance current knowledge, promote personal
growth and improve overall efficiency.

Improve Processes Review current processes, revise and introduce improvement, if

necessary, to be more effective and efficient

Comply with Government Provide Management information relative to new business

Requirements regulation and taxation

Lower Production and Operating Continue to monitor and analyze actual costs against established
Costs standards/budgets and report to Management noted variance

29 The Institutes focus is on better delivery of service to the students through strengthening
of its human resource in terms of research and implementation, extension and instruction. These
moves are intended to hone employees capabilities and creativity which is expected to be
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 channeled to the students for the latter to become quality graduates and value adding in the
community. The same with Jaro Development Corporations thrust to develop employees and
improve processes, the Institute believes that employee development is a sustainable initiative to
better service and promote public trust. The Institute, however, is currently not incline to
expanding operations or marketing campaigns. All of the Institutes actions must follow the rules
laid out by DBM and COA for budget/funds related activities, and CSC for human resource.

Public Trust in the Institute

30 As an institution, whose funding comes primarily from the state, MSU - IIT puts priority
to efficiency and quality in the promotion of public trust especially in todays political landscape
where Filipinos are more wary of the governments policies and practices. Its objectives
specifically direct the Institute so that programs implemented be for the benefit and to answer the
needs of the locality, and eventually, for the economic and social development of Mindanao. The
Institute has a mandate to the public anchored on the strategic framework of the current
government towards an environment of transparent, accountable and participatory governance,
poverty reduction and empowerment of the poor and rapid, equitable and sustained economic
growth. Efficiency is often a key indicator of public trust because people perceive the institution
as maximizing the use of its given resources when processes are efficient and of high-quality.
The Institute strives to be continuously efficient by implementing programs such as capability
development, good budget management, forging new linkages, adapting an Outcomes-Based
Education program, and implementing a Strategic Performance Management System.

31 Efficiency is not only a matter of maximizing the use of funds and other resources but on
time disbursements also. Although the Institute is efficient as it is, evidenced by millions
savings returned to the National Treasury, it takes a considerable amount of time before funds
are released for intended use. Even when used appropriately, a greater efficiency would have
been achieved had the process for fund disbursements is faster. Building on the argument of
efficiency based on savings, the overall huge savings when other colleges are in deficit, may
show the inappropriate allocation of budget among recipients. The deficit colleges may have to
sacrifice quality or incur out of pocket expenses to achieve the purpose of the activities.

32 While efficiency is a key factor in promoting public trust, there are other considerations,
such as accountability and transparency, to sustaining public trust. Public officials and
policymakers should learn to be accountable for their deeds and should practice greater
transparency through dissemination of information and clarity of regulations and decisions to
promote public trust. A more systematic and rational process of allocation and disbursements of
funds will help in the immediate implementation of projects to beneficiaries.

33 For MSU - IIT, public trust is about living its code of conduct of Commitment to
Excellence through Teamwork anchored on Integrity and Accountability.

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