Planning Your Path into

Full-Time Business
CHAPTER 6
Causal or predictive reasoning.

Strategy for starting innumerable businesses

Method taught in almost every entrepreneurship class around the world.

Used to create a business plan.

Type of reasoning that is used by business managers daily for making many business
decisions.
3
Effectual
reasoning by
Saras Sarasvathy
Begins with a consideration of what resources are
available and what restraints there are on those
resources.

An entrepreneur is using effectual reasoning when he or

she begins to imagine what can be accomplished with
the resources at hand.

As the entrepreneur learns from experience and from

interaction with customers, vendors, and mentors, it all
comes together as a compel-ling story that serves to
enlist others, create buzz, and bring the business to life.
4
All entrepreneurs
have at least four
sets of resources:
(1) access to capital,
(2) their own skills and
abilities,
(3) their own knowledge, and
(4) their network of friends
and business associates

5
Sarasvathy has defined three principles of
reasoning that are absolutely critical in the
process of effectual reasoning:

Strategic partnerships

Affordable loss

Leveraging of contingencies
6
Three other important ideas that fit into both
the causal and the effectual approaches to
entrepreneurship

Bootstrapping - Lean business

Bricolage -
got its name from an “to putter around,”
practices -
old description of a
Practice of making refer to systematically
person who began poor eliminating waste of
something from
and through persistence time, materials, and
and self-reliance
whatever you have at
hand. Resembles the money throughout a
achieved unlikely business.
success. strategy of effectuation
7
Both lean
operations and Keep in
bootstrapping are touch.
based on and
share three
underlying ideas:

Create,
Waste not,
standardize,
want not.
repeat.

8
Lean Business Practices: Seven Sources of Waste

9
The Five Paths to
Business Ownership

10
 BIG CONCEPT
Bring the attention of your audience over a key concept using icons or
illustrations

11
BUYING AN
EXISTING
BUSINESS
Advantages of Purchasing an Existing Business

* Established customers provide immediate sales and

cash inflows.
* Business processes are already in place in an
existing business.
* Purchasing a business often requires less cash
outlay that does creating a start-up.

13
Disadvantages of Purchasing an Existing Business

* Finding a successful business for sale that is appropriate for your

experience, skills and education is difficult and time-consuming.

* It is very difficult to determine what a small business is worth.

* Existing managers and employees may resist change.

* The reputation of the business may be a hindrance to future success.

* The business may be declining because of changes in technology.

* The facilities and equipment may be obsolete or in need of major repair.

14
Finding a business to buy

- Find a business for sale.

- Look for one that is right for your own experience, skills and education.

Investigating Entrepreneurial Opportunities :

Performing Due Diligence
Due Diligence - is the process of investigating to determine the
full and complete implications of buying a business.

15
 Steps that should be followed :
1. Conduct extensive interviews with the sellers of the business.

2. Study the financial reports and other records of the business.

3. Make a personal examination of the site (or sites) of the business.

4. Interview customers and suppliers of the business.

5. Develop a detailed business plan for the acquisition.

6. Negotiate an appropriate price for the business, based on the business plan
projections.

7. Obtain sufficient capital to purchase and operate the business 16

 Determining the value
of the Business.

You need to analyze all the information you have

gathered. This is the time to consult with your
business, financial, and legal advisers to arrive at
an estimate of the value of the business.

You should make a decision to actually attempt to

buy the business only after the evaluation
process is complete.

17
 Discounted Cash Flow
Methodology

Is based on the concept that

the longer you have to wait to
receive money, the less
valuable it is right now

When one buys a business, an

investment is made.
18
 *Asset Valuation
Methodology

Based on the
assumption that a
business is worth the
value of its assets
minus the value of
any liabilities.
19
 3. REPLACEMENT
There are three methods VALUE
commonly used to • is an estimate of
estimate the value of a what an identical
firm’s assets 2. NET asset would cost to
REALIZABLE be acquired and
VALUE readied for service.
• is an estimate of
1. BOOK VALUE the amount for
• is the original which an asset
acquisition cost of would sell, less the
the asset, minus all costs of selling it.
depreciation
expense
recognized to date.

20
 COMPARABLE SALES

Comparable sales of other firms in the

same industry are commonly used to
estimate the value of a business. This
method has two major problems. First,
no two firms are exactly alike. Second,
there are often no recent sales to use
for comparison. But there are online
sites like Valuations.com and
Bizbuysell.com, or check if your library
has access to Pratt's Stats or BIZCOMPS
database.
21
 Financial ratios

are often used to place a value on businesses

because industry ratios are independent of the
size of the business.

Using financial ratios requires that you have an

estimate of future income and tax flows

The best source of industry financial ratios is

from data collected by industry associations or
industry statistic providers, such as BizMiner or
Bizstats.com.
22
Industry Heuristics
are simply rules of thumb that are commonly
used to estimate firm value in relation to some
easily observable characteristic of the business.
Industry heuristics are similar to comparable
sales in that they represent the combined
experience of people active in the industry.

You can also look at online sources like

bizstats.com/reports/valuation-rule-
thumb.php27 or valuationacademy
.com/industry-specific-multiples/ for selected
heuristics.
23
 Structuring the Deal
A buyer and seller get together to negotiate the final price
for a business. The buyer should have performed the due
diligence procedure and be confident about the assessment
of the condition and value of the business.

As the buyer, you should have decided on the absolute

highest price that you would be willing to pay. That highest
price is called your point of indifference in the negotiation
process.

24
 The purpose of opening
low is twofold:

(1) you want to make the purchase

at the lowest price possible

(2) you recognize that the seller

assumes that any opening offer is
less than what you are actually
willing to pay.

25
There are four basic ways that a
business may be bought:

(1) you may buy out the seller’s interest in the business;

(2) you may buy in by acquiring some, but not all, of the
ownership;
(3) you may buy only the key assets of the business such as
the inventory or equipment of the business, and not the
business itself; and
(4) you may take over a public business by buying a
controlling interest of its stock. 26
 Buyouts
Buyouts are restricted to businesses that
have a formal legal form of organization,
including corporations, limited liability
companies, and some partnerships.

The assets of the business must be

purchased and the liabilities assumed in a
process called key resource acquisition or
bulk asset sale 27
The primary advantage to a buyout is simplicity. The
seller must only transfer his or her stock to the
purchaser to complete the transaction

The primary disadvantage to a buyout is that all

liabilities are transferred, including potential lawsuits
that arise from actions and transactions that took
place prior to the change in ownership.
Buy-ins
A buy-in results when someone
acquires only part of the ownership
of an existing business.

Buy-ins can be made in any form of

business. Technically, if one buys into
a sole proprietorship, it becomes a
partnership
29
Advantages to making a buy-in:
(1) a buy-in allows the purchaser to leverage
inside knowledge
(2) it aids in keeping key employees

Disadvantages of a buy-in :
(1) the prior owner and management remain with
the business.
30
Key resource
acquisitions
Key resource acquisitions, also called bulk
asset purchases, are the only way a sole
proprietorship may be purchased. This
technique may also be used with any other
form of business. As the name implies, key
resource acquisitions comprise purchasing
only the assets of the business.
 Takeovers
• Takeovers are possible only of businesses that have
stock that is freely transferable without the
permission of management or other owners.
• A takeover comprises purchasing enough of the
target business’s stock to gain control of the board of
directors of the business
• In a takeover, the buyer (often called a raider) seizes
control of the business without the permission of all
owners
What is franchising?

• Franchising is a legal agreement that allows one

business to operated using the name and
business procedures of another. The most
ubiquitous franchise worldwide is McDonald's,
which has over 30,000 restaurants in more than
1000 countries.
 FOUR BASIC FORMS OF FRANCHISING

Trade name franchising – is an agreement that provides only the rights to use the franchisor’s trade name
and/or trademarks. Two examples of this are True Value Hardware and Associated Grocers, Inc.

Product Distribution Franchising – provides the franchiser with specific brand named products, which are
resold by the franchise in a specified territory. Two examples of this type of franchising are Snap-On Tools
and Auto dealerships.

Conversion Franchising – provides an organization through which independent business may combine
resources. An example is Century 21 Real Estate. Individual real estate business combine to create a nation
wide brand name and enhanced advertising effectiveness.

Business Format Franchising – is exemplified by the McDonald’s Corporation. A McDonald’s franchise

includes the right to use McDonald’s methods, marketing plan and national advertising. Franchisees pay to
the franchisor both an up-front fee to obtain the franchise rights and a percentage of gross sales.
FRANCHISE OPPORTUNITIES
• There are more franchises available than you can count.
Unlike finding a small business to buy, finding a
franchise is easy. Every issue of Entrepreneur magazine
contains the advertisements of dozens of franchisors
eager to sell their franchises to you.
Legal considerations

• Before you sign on the dotted line, you should

personally study two key documents you always
receive from a franchisor – the uniform franchise
offering circular (UFOC) and the franchise
agreement.
38
 Family Businesses Succession

Family-owned businesses usually fail after the death

or retirement of the founder. Fewer than 30 percent are
successfully transferred to a second generation. Fewer
than 13 percent succeed long enough to be inherited by
the third.33 Family businesses that successfully make the
transition do so by taking specific actions to organize the
business and ensure that it can run profitably when the
founder is gone.
 Developing a Formal Management Structure

You must be able to clearly see the strengths and weaknesses of family
members who will remain in the business.

You must then hire professional managers to run those functions that
family members cannot.

Once successors have been selected, they must be educated in all parts
of the family business to develop experience and skills.

The founder must impart his or her unique knowledge, skill, and
experience that has made the business successful.
Succession Issues for the Founder
The issue that must be faced in this process is selecting the appropriate family
members.

If you, as the founder-manager, take part in family dialogs about the business, you
will gain insight into their values, ideas, and goals.

To avoid having the diversity of values, goals, and motivators from becoming the
source of such intrafamily strife, you and the other family business members should
respect one another’s differences by:

Being certain that all family members know and accept that they are not forced to
enter the management of the business if they don’t want to
Succession Issues for the Founder

Providing each member of the family business with the opportunity to obtain education and
experience outside the business. Working in other businesses will provide knowledge and skills that
cannot be provided solely from within the family business

Allowing each family member who does wish to enter the business to find out and do those
functions and activities that he or she does best

Not assuming that the leadership of the business must come from within the family. Being part of
the family does not guarantee business leadership skills. After all, almost all of us have at least one
“black sheep” in our family.

42
 Succession Issues for the Successor
As you, the successor-tobe, gain greater responsibility and authority you will also gain experience and skills in the
multiple activities and functions of the firm. Although the responsibility for teaching and grooming the successor
lies with the founder, you, the successor, have a responsibility to know and to master the areas that are essential to
the success of the business.

These essential skills include (but are not limited to):

• Technical knowledge —You must understand the science, technology, and methodology of the
industry of which the business is part.
• Financial knowledge —You must understand the financial needs and resources of the business
and industry, and be competent to negotiate with lenders, investors, vendors, and customers.
• People skills —You must be able to effectively deal with people, with other family members in the
business, with employees, suppliers, regulators, and, most importantly, with customers.
• Leadership skills —You must be able to communicate your vision for the company to family
members and to employees, getting them to “buy in” and make the business goals their goals.
• Knowledge of your own limitations — Nobody can know and be expert at everything. You must
know your weaknesses, and be quick to obtain assistance in those areas.
Ownership Transfer

• The transfer of ownership is highly complex and is unique

to each family business. The larger and more successful
your business is, the more complex and difficult the
problem becomes. Using experts in law, accounting, and
business can help identify the potential problems and
help organize solutions. For family business succession
plans, using specialists is essential.
Professional Management
of Small Business
A professional manager of a small business is one who has the experience and skills to use
a systematic approach to analyzing and solving business problems.

There are only five paths of entry into small business management

• You may start a business,

• Buy a business,
• Franchise a business,
• Inherit a business, or
• Be employed as a manager in a business.
 How to Get Out of Your Business

Transfer - An endgame strategy in which ownership is moved from

one person or group to another.

Termination - An endgame strategy in which the owner

closes down a business.
Sell off - A type of business transfer where the seller gets only a fraction of the value of the
business. This is most often done to maintain employment for the staff and service for the customers, but
the business can generate only a small amount of profit with which the original owner can be paid, or the
new owner does not have much money to buy the business.
Pass off - A type of business transfer where the owner gives the business to someone else without a
payment. This is most often done to maintain employment for the staff and service for the
customers, but the business is not profitable enough to give the original owner any revenue.

Walkaway - Business termination in which the entrepreneur ends the business with
its obligations met.

Workout - A form of business termination in which the firm’s legal or financial

obligations are not fully met at closing.

Bankruptcy - An extreme form of business termination that uses a legal method for
closing a business and paying off creditors when debts are substantially greater
than assets.

Serial entrepreneur - Person who opens multiple businesses throughout his or her
career.
 ROUTES TO
ENTREPRENUERSHIP
1. Adventure. Entrepreneurs like taking risks.
2. Creativity. They have a great idea for a new product that no
one currently offers.
3. Competition. Entrepreneurs feel that they can offer what their
current businesses offer to consumers, but for less money.
4. Control. They want to be their own boss and make their own
decisions about their future.
5. Earning Potential. They want to be paid for the extra effort
they give to their work.
If you are really serious in pursuing a business
venture, you should have more or less an idea of
what specific business to enter into. These are a
few of the more popular business pursuits
nowadays from where you can draw an inspiration:
 FOOD AND RECREATION:
RETAILING:
 Fast-food franchises
 Bookstore
 Restaurants
 Fashion boutiques
 Bed and Breakfast Inns
 Buy and sell

SERVICES:
OTHER COMMERCIAL FIELDS:
 Trucking and
warehousing  Manufacturing

 Fitness center  Delivery Service

 Event organizers  Telemarketing

SPECIFIC SOURCES:  Directories
 Old advertisements
 Trade journals  Trends and fashions
 Trade associations  Social encounters
 Conventions  Deliberate searches
 Exhibits and trade shows  Product encounters from
 Country or government affairs travels
 Product catalogs  Imports and exports bulletin
 Consumer magazines  Current events and
 Government publications
announcements
 Club/society meeting functions
OPTIONAL SOURCES:
 Personal interest or hobbies
 Limitations in existing products
 A wish list
 Thinking and experimenting with new and
different ways to use existing products
 Technological advances and their effects on
currently
 Possible spin-offs from existing product that
might be developed
 Currently established business
 Booming products in other places, regional and
international
1. FAMILY BUSINESS

One of the successful routes to entrepreneurship is family

business, one which includes two or more members of the
family within financial control over the enterprise. Running
and passing on family business thrive on the principle,
“When it works right nothing succeeds like a family
firm. The flash of the buck is replaced by long-term
plans. Tradition counts.”
The following are the advantage of a family business:
 Strength of family relationships
 Willingness of family members to make sacrifices for the
good of the firm
 Demonstration of high levels of concern for employees
 Ability to plan for the long-term
 Emphasis on quality and values
 STAGE 1: Pre-business
 STAGE 2: Introductory
The children are exposed to business jargon, employees in the
business, and the business environment.
 STAGE 3: Introductory Functional
Children start to work as part-time employees. Work gradually
becomes more difficult. Usually, training includes education and
sometimes works for other firms.
ENTRY OF SUCCESSOR
 STAGE 4: Functional
Potential successor begins as full-time employees whose functions
include all non-managerial functions.
 STAGE 5: Advance Functional
Potential successor assumes managerial positions, which includes all
management positions prior to becoming president/general manager of
the business enterprise.
TRANSFER LEADERSHIP
 STAGE 6: Early Succession
Successor assumes presidency/general manager position. This already
includes the period in which successor becomes de jure head of the
company.
 STAGE 7: Mature Succession
2. FRANCHISING

Franchising is a marketing system revolving around a two-party legal

agreement whereby the franchisee conducts business according to terms
specified by the franchiser.

The following are the advantages of running and operating a

franchise:

 Experience of the franchisers

 Training
 Technical, management and research development
 Proven whole system
 Manualized system
 advertising efforts
 Buying
 Brand name recognition
 An investment business
The following are the disadvantages of franchising:

 The element of risk

 Working within the system
 Working within the franchisers
 False expectation
 Managing your business

FRANCHISER: the party in the franchise contract who specifies

the methods to be followed and the terms that are to be met by
the other party.
The franchise contract is the binding and legal agreement
between franchiser and franchisee.
 The franchiser is a
producer/creator; the
franchisee is a
wholesaler, such as
a soft drink bottler.

The franchiser is a STRUCTURE The franchiser is a

producer/creator; the OF THE wholesaler; the
franchisee is a retail FRANCHISING franchisee is a retail
establishments, such INDUSTRY establishment, such
a fast food as a hardware store.
restaurant.
TESTED STEPS IN CHOOSING A FRANCHISER

Look at your own interest

Check your family circumstances

Is the franchise reputable?

Check out the people running the franchise

Always check out what existing franchisees think of the franchise

3. BUY-OUTS
Buy-out is yet another way to be an
entrepreneur. Unlike the start-up route, as the term
implies, means that the entrepreneur simply buys an
existing business for sale on which he introduces
innovations and improvements. If the same business is
operated, it is as if there was only a change in
management.
The following are the advantage of buy-outs:

A successful business may continue to be successful

An existing business may already have the best location

Employees and suppliers are in place

Equipment is installed and productive capacity is known

Trade credit has been established

Finding financing is usually easier

Potentially, it could be a bargain

The following are the disadvantage of this route to
entrepreneurship:

The previews owner may have created ill-will

Employees inheriting the business may not be possible

The business location may have become unsatisfactory

Equipment and facilities may be obsolete or inefficient

Change and innovation may be difficult to implement

Inventory may become outdated or obsolete

 SOME REASONS FOR BUYING AN EXISTING
BUSINESS

To reduce some uncertainties and unknowns that must

be faced in starting a business from the ground.

To acquire a business from ongoing operations and

established relationships with customers and suppliers.

To obtain an established business at a price below

what it would cost to start a new business.
SOME REASONS FOR SELLING AN EXISTING BUSINESS

Burnout experienced by the owner

Low profits

Economic conditions

Desire to retire

Slow growth or fast growth

Too much competition

Technology outpaced in the business

Insufficient capital

No interested heirs

No interested managers to continue the business

Problems with a partner

Desire to buy another company

Going to work with another company

Changing a career

Selling a franchise
4. START-UP BUSINESS

Start-up business are those that are relatively started

new by an entrepreneur. These are also sometimes
referred to as a business that starts from scratch.

REASONS FOR STARTING YOUR OWN BUSINESS

 Inventions of new products or services that necessitate

a new type of business.
 Freedom to select the ideal location, equipment,
products and services, employees, suppliers and
bankers.
 Avoidance of undesirable policies, procedures and legal
commitments of existing firms.
QUESTIONS TO GUIDE YOU BEFORE
DECIDING TO IMPLEMENT A CONCEPT
REGARDING A NEW VENTURES:

 Have I found a genuinely new venture idea?

 What sources of new ventures idea are
available?
 Have I refined the idea?
 Do I have the necessary education and
experience for thus type of venture?
 Will my business be service-based, trading,
product-based, or a manufacturing business?
TYPES OF START-UP BUSINESS

❑ Distributorship
An independent entrepreneur, company or
individual enters into an agreement or contract to
offer, sell or distribute a particular product, but is
not entitled to use the manufacturers trade name
as part of its own trade name.
❑ Rack Jobber
Involves an agent or buyer entering into an
agreement with a parents company to market its
goods to various stores by mean of strategically
located store racks.
❑ Subcontracting
An entrepreneur who is responsible for a
particular aspect in the operations of the principal.
TYPES OF START-UP IDEAS

❖ TYPE A IDEAS
Providing customers with a product or
services that does not exist in their market
but already exists somewhere else.
❖ TYPE B IDEAS
A technically new process.
❖ TYPE C IDEAS
These are concepts for performing old
functions in new and improved ways.
Organizations and
Management
Christian Thom Tabisola | Pangasinan State University
 A. DEFINITON OF MANAGEMENT
AND ITS KEY TERMS

Management is defined as the collective and

systematic function of planning, organizing,
directing and controlling the activities of an
organization to reach its et objectives

73
Planning
Involves devising systematic
schemes for the organization
to follow in order for its to
attain its set goals.

74
 Organizing
refers to the function of being able to
gather and organize both the human and
nonhuman resources of an organization of
execute the plan

75
 Directing

Pertains to the managers task of

executing the plan, including the
motivation and supervision of employees

76
 Controlling

Refers to that function to make sure that th actual

performanc is in conformance to the plan.

An ORGANIZATION is simply a group of people working

together to attain a common goal among them.

77
 B. MANAGERIAL FUNCTIONS

The Planning, as we earlier defined, is the function that

Function devises or makes a systematic scheme for the
organization to follow in order for it to attain its sets
of goals. A goal is something an enterprise wants to
Planning wants to achieve is called a vision. This vision is then
translated into specific statements that specify for
what purpose the enterprise exists.

78
 These statements justifying the creation of the business
enterprise, is called the mission of the enterprise. Since both
vision and mission statements are usually stated in general
terms, it is broken down further into more attainable aims
called objectives. Combining the use of vision, missions and
goals in an organization is called the VMG approach (Vision –
Mission – Goal) to planning.

When these goals are translated into the department level of

an organization, they are transformed into objective, strategies
and tactics. These strategies and tactics are more specific steps
and methods to attain objectives. When objectives are
KRAs specified as to affect a particular area of operation, they are
sometimes called Key Result Areas (KRA). Breaking down goals
further allow quantification of these goals, and make the
process of evaluating attainment of these goals easier

79
Evaluation is already part of the controlling
process. Nonetheless, the standards by which
attainment of goals or objectives are already
included in the planning stage. This show that if
the enterprise wants to be successful, planning
and controlling between these two functions
brought about the idea that Planning and
Controlling are considered as the “ Siamese
Twins” of management.

80
 The Function of Organizing

As we defined earlier, Organizing refers to the function of being able to gather and
organize both the human and nonhuman resources of an organization to execute
the plan.

The arrangement of authority and hierarchy in an organization, and clustered into

smaller units according to similarly performed functions (department), should be
seen in an enterprise’s organizational chart. These chart depict a clear picture of
the various management level.

81
 C. MANAGEMENT LEVELS

Generally, management levels are

classified into three:
FIRST LINE OR
TOP MIDDLE
LOWER LEVEL
MANAGEMENT MANAGEMENT
MANAGEMENT

82
 TOP MANAGEMENT

Is usually heavily involved in planning activities, such as

brainstorming, forecasting, and decision making. These
echelons of management usually consist of the Board
of Director and/or the President of the company. In an
small business enterprise, top management may
simply refer to the owner’s of the business.

83
 MIDDLE MANAGEMENT

The middle managers act more as liaisons between top

management and lower levels of the organization. More of their
time is spent in organizing and directing (or supervisory) functions.
Usually, middle management consists of other corporate officers
besides the President, and top managers.

84
 LOWER LEVEL or FIRST LEVEL
MANAGEMNT

Lower level or first level managers do most

of the execution of orders and directives
from top management. They are usually
consisted of production/ operation
supervisors, section or department heads.

85
 LEVELS OF MANAGEMENT
Top Level President

Middle Level

Vice President marketing Vice President Finance Vice president Production

First Level

Supervisor Production Supervisor Supervisor

A B C

Employees Employees Employees

86
 ❖In hiring personnel, the following
are basic steps being undertaken:

Recruiting – this activity is concerned in reaching out an

attracting a pool of application from whom the enterprise selects
qualified applicants and considers them to fill possible job
vacancies.

Screening and evaluation – this activity allows an enterprise

to conduct a systematic and through testing and evaluation of the
applicants’ submitted information, pertinent skills, intellectual
capability, and knowledge and capability to handle.
87
Selection – after being able to test and consider many applicants, the person
in charge of the staffing activity (usually the Human Resource Manager), streamlines these
applicants and submits to the deciding body at least be done by the deciding person or
committee and direct the Human Resource Department as to who they choose to be hired.

Hiring and Orientation – this last stage in the hiring

process performs the task of informing the lucky candidate, ask him to take the final tests
(usually the medical test), fills up the necessary papers for human Resource files, and
orients the newly hired personnel with the job he is to undertake, the company, its policies
clientele.

88
 The Function of Directing

Directing pertains to the manager’s task of

executing the plan, including the
motivation and supervision of employees.
This function offer allows the supervisor or
manager as the “boss” of the employee.

89
 The Function of Controlling

Controlling refers to that function which makes sure that the actual
performance is in conformance to the plan. The other half of the
Siamese twins of management, controlling is the managerial function
that largely determines whether targets are sufficiently met or not. In the
planning stage, performance targets and indicators are already identified.
Upon execution and periodic evaluation, supervisors and managers
should be able to see the actual output of their respective departments
or sections.

90
 SKILLS IN MANAGEMENT

To perform the functions of management and to

assume multiple roles, managers must posses
certain skills. Robert Katz identified three
managerial skills that are vital for managing
practices to be successful. These skills are
technical human and conceptual

91
 TECHNICAL SKILLS

Involve processes or techniques and knowledge and proficiency in

being able to do something. Mangers use the processes,
techniques and tools of a specific area. Usually, a key consideration
before an employee is hired is his acquired technical skills to
handle the job. Supervisors and managers are expected to have
accumulated a significant amount of knowledge and experience
regarding their fields of specialization.

92
 HUMAN SKILLS

Involve the ability of managers and supervisors

to interact and communicate effectively with
people. Managers are also expected to interact
and cooperate with employees. This is why
mastery of written and oral language is a key
consideration prior to hiring and promotion.

93
 CONCEPTUAL SKILLS

Involve the formulation of ideas, concepts and strategies.

Managers understand abstract relationship, develop ideas, and
solve problems creatively, using the limited resources available.

To sum up, technical skill ideas with ability to do things, human

skills concerns interaction with people, and conceptual skill has
something to do with mental faculties.

94
96
97
98
99
100
101
102
103
104
105
In every x leads you to a new opportunity

106
PANGASINAN STATE UNIVERSITY
THANK
YOU!