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

business run in a way that is appropriate to the plans to be established

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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

Type of Partners Position

Capital
Names As to As to in the
Contribution
Liability Contribution Company
1. Surname, First
General Capitalist - 14,285.71
name, M.I.
2. General Capitalist - 14,285.71
3. General Capitalist - 14,285.71
4. General Capitalist - 14,285.71
Industrial- General
5. General 14,285.71
Capitalist Manager
6. General Capitalist - 14,285.71
7. General Capitalist - 14,285.71
Total 100,000.00
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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 products 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

Trade and Industry (DTI), Department of Labor and Employment (DOLE),

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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

being qualified, orientations will be given to employees to have knowledge

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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

customers satisfaction.
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2017 2018
Activities 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

9. Start of Normal Operation

Figure 1

Gantt Chart
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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

Better Decision Making

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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.
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Formulates and administers firms 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 bachelors degree or masters 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.

Plans for the production schedule and coordinates with the supplier.
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Ensures that each job role performs such primary responsibilities

and duties, in the course of accomplishing with the firms

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 bachelors degree or masters 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.

Displays a pleasing personality and empathetic towards fellow

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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 bachelors 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.

Must be able to concentrate on doing repetitive tasks.

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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.

General Manager

Supervisor

Sales Assistant Production Worker

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

annual contributions, 13th month pay and computed withholding taxes.

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Table 3

Compensation Scheme for the First Year of Operation

SSS Philhealth Pag-IBIG

Basic Contribution Contribution Contribution 13th
Basic Withhold- Monthly Annual Total
Position Monthly Month
Annual pay ing Tax Contributions Contributions Annual Pay
Pay Pay
EE ER EE ER EE ER

General
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
Manager

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
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
Assistant

Production
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
Worker

Total 53,784.00 640,408.00 740,992.05

 Table 4

Projected Compensation Scheme

Position/
Year 1 Year 2 Year 3 Year 4 Year 5
Job Title

General
182,200.00 185,844.00 189,560.88 193,352.10 197,219.14
Manager

Supervisor 172,800.00 176,256.00 179,781.12 183,376.74 187,044.28

Sales
144,000.00 146,880.00 149,817.60 152,813.95 155,870.23
Assistant

Production
141,408.00 144,236.16 147,120.88 150,063.30 153,064.57
Worker

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.