1. basic managment concepts - industrial engineering stream · 2012. 5. 1. · directing,...
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Basic management Basic management gconcepts
gconcepts
References1 Daniel Kitaw Industrial Management and1. Daniel Kitaw, Industrial Management and
Engineering Economy.2. S.K. Sharma, etal., Industrial Engineering andg g
Operations Management.3. Abbass F. Alkhafaji, Competetitive Global
Management.
WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?
• The verb manage comes from the Italianmaneggiare (to handle — especially a horse)gg p y
• Which in turn derives from the Latin manus(hand)(hand)
• The French word mesnagement (lateré t) i fl d th d l t iménagement) influenced the development in
meaning of the English word management inh h d h
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the 17th and 18th centuries3
M t i th t f tti thi d th h
WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?
• Management is the art of getting things done through
people.p p
• The process of setting and achieving goals through the
execution of five basic management functions –
planning organizing staffing directing and controllingplanning, organizing, staffing, directing and controlling
– that utilize human, financial, and material resources
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in an efficient and effective manner.4
• What is this little lad doing?• Do you know where he is going?• Can you see where he is going?• Can you really see what the
consequences are going to be?consequences are going to be?• Have you got the big picture in
mind?• With anything that one does in
life you start with the end inmind You decide what you wantmind. You decide what you wantto achieve and then you decidehow you will work towardsachieving it. This is whatmanagement is.5/2/2012 5
manage the creative tension between current CONT’D CONT’D
manage the creative tension between current reality and Future reality
G tVisionReality
GreatnessNOW FUTURE
Courage
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S Th t Y d Y
CONT’D CONT’D
So That You and Your Followers Can Reach Our
Vision
Put Stepping Stones
Chart the Path
Put Stepping Stones in Place
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CONT’D CONT’D
• In general "management" identifies a special
group of people whose job is to direct thegroup of people whose job is to direct the
effort and activities of other people toward
common objectives.
5/2/2012 8
Th I d t i l R l ti b ht b t th
WHY MANAGEMENT? WHY MANAGEMENT?
• The Industrial Revolution brought about the
emergence of large-scale business and its need for
professional managers
M t b i t t th• Management became more important as the
developments and complexities of technology and
human relationships get more challenging to those who
perform managerial functions
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perform managerial functions
9
CONT’D CONT’D
Shorter life‐cycles for innovative technologies
•Water power•Textiles•Iron
•Steam•Rail•Steel
•Electricity•Chemicals•Internal‐combustionengine
•Petrochemicals•Electronics•Aviation
•Digital networks•Software•New media
engine
1st Wave 2nd Wave 3rd Wave 4th Wave 5th Wave
1785 1845 1900 1950 1990 1999 2020
Source: The Economist, February 20, 1999
60 yrs 55 yrs 50 yrs 40 yrs 30 yrs
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' l f l k
WHAT MANAGEMENTS STRIVES FOR?WHAT MANAGEMENTS STRIVES FOR?
• 'Management strives involving a group of people work
together in the most effective and efficient manner
to achieve stated goals in the best and most
economical way'economical way .
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FUNCTIONS OF MANAGEMENTFUNCTIONS OF MANAGEMENT
• The subject of management can beconsidered a process involving certainp gfunctions that a manager performs
1. Planning1. Planning2. Leading3 Organizing3. Organizing4. Staffing5 Controlling
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5. Controlling
CONT’D CONT’D
1. Planning
Pl i i l th d t i i f th f• Planning involves the predetermining of the course of
action to be taken in relation to the known event. It
also includes anticipating the possibilities of future
problems that might appearproblems that might appear
“Failing to plan means planning to fail”
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g p p g
CONT’D CONT’D
• It is a systematic activity which determines
when, how and who is going to perform a
specific job It is rightly saidspecific job. It is rightly said
“Well plan is half done”Well plan is half done
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CONT’D CONT’D
• The increased importance of planning in a
business enterprise results from variousbusiness enterprise results from various
changes in the environment like• changes in technology,• government policy,g p y,• overall economic activity,• in the nature of competition and
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in the nature of competition and• in social norms and attitudes.
CONT’D CONT’D
• There are different planning executed in
different level of an organization
• Strategic planning• Strategic planning
• Tactic planning
• Operational planning
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I l th l i
CONT’D CONT’D
• In general, the planning process may
systematically be composed of five elements:y y p
I. Setting Primary & Intermediate Goals
II. Search for Opportunities
III.Formulation of PlansIII.Formulation of Plans
IV. Target Setting
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V. Follow-up of Plans
CONT’D CONT’D
2. Leading
• For the same idea different organizations useFor the same idea, different organizations use
different terms such as
Directing, Executing, Supervising, Ordering and Guiding
• What ever terms are assigned to it, the idea of
directing is to put into effect the decisions, plans
and programs that have been worked out
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and programs that have been worked out.
LEADERSHIP STYLES LEADERSHIP STYLES
There are four types of leadership styles
Th di t t i l l d m i t i s hi hl iti l d• The dictatorial leader maintains a highly critical and
negative attitude in his relation with subordinates
and advocates the accomplishment of tasks through
fear of penaltiesf f p
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CONT’D CONT’D
• The benevolent - autocratic leader assumes a
paternalistic role which forces the workers to rely onp y
him for satisfaction.
Thi t f l d t b ti ll t d• This type of leader must be exceptionally strong and
wise individual, so that his personality generates
respect and allegiance. The subordinates develop
dependence on the leader to the extent that they have
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dependence on the leader to the extent that they have
very little chance of developing leadership qualities.
CONT’D CONT’D
• The democratic leader suggests better methods and
tries to improve the worker's attitude. Unlike thep
others, not only he depends on his capabilities but
encourages consultation with subordinates in planningencourages consultation with subordinates in planning,
decision making and organizing.
• With this type of leadership satisfaction is gained
through a feeling of group accomplishments.
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through a feeling of group accomplishments.
CONT’D CONT’D
• The fourth type of leadership style is a laissez -
faire type where the leader assumes the role of just
another member of the group and depends completely
on subordinates to establish their own goals and make
their own decisiontheir own decision.
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CONT’D CONT’D
3. Organizing
• Organizing may be defined as the structure• Organizing may be defined as the structureand process by which a group allocates its
tasks among its members, identifies
l ti hi d i t t it ti itirelationships and integrates its activities
toward common objectives
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j
CONT’D CONT’D
• The organizing function of management bringstogether human and physical resources in an orderlyg p y ymanner and arranges them in coordinated pattern toaccomplish planned objectives.p p j
• Each organizational resource (human, material,f ) f h h hfinance etc.) represent an investment from which themanagement system must get the return.
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S m f th b n fits :
CONT’D CONT’D
• Some of the benefits are:–Good communication between the management and
employeesemployees,–Sound basis to evaluate the performance of
individuals and groups,g p ,–Well defined areas of works for each employee,–Adequate and effective control, andq–Stimulation of independent, creative thinking and
initiative on the part of the employees.
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h l f h h
CONT’D CONT’D
• There are some principles of organization whichare guide lines for thought to operating managers
d hand researchers in an organization1. Unity of Command2. Exception Principle3. Span of Control4. Scalar Principle5. Departmentalization
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6. Decentralization
Th t th t i t t h i i
CONT’D CONT’D
• The steps that are important when organizingan enterprise
Reflecting Reflecting on plans
and objectives
Establishing major tasks
Evaluating results for organizing strategy
Dividing Allocating resources
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Dividing major tasks
into subtasks
resources and
directives for
subtasks
4 S ffi
CONT’D CONT’D
4. Staffing• Staffing deals with the workers and is worker-oriented
• This function includes the process of placing the rightperson in the right organizational positionp g g p
• The process of matching the people and the jobs isdone by careful preparation of specifications necessarydone by careful preparation of specifications necessaryfor positions and raising the performance of personnelby training and retraining of people to fit the needs of
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by training and retraining of people to fit the needs ofthe organizational position
CONT’D CONT’D
5. Controlling• Control is the process that measures currentp
activities, quantitatively if possible, and guidesit toward some predetermined goal, plan, policy,standard, norm, decision rule and criterion oryardstick.
• The essence of control lies in checking andcorrecting actions against desired results in the
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planning process
CONT’D CONT’D
• Controlling includes ensuring that employeesperform the work allocated to them in the wayslaid down and with no wastage or duplication oflaid down, and with no wastage or duplication oftime, effort or materials.
• That involves much more than simply instructing a• That involves much more than simply instructing agiven number of employees to perform work; theymust be supervised and managed so that theirmust be superv sed and managed so that the refforts achieve the desired results.
• This requires that they are motivated, checked,
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q y , ,guided, taught and encouraged.
CONT’D CONT’D
• There are seven principles of control.I. Strategic Point ControlII. FeedbackIII. Flexible ControlIV. Organizational Stability V. Self-ControlVI Di C lVI. Direct ControlVII. Human Factor
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CONT’D CONT’D
Staffing Planning Organizing Leading Controlling
Defining goals,
establishing
Determining what needs to be done,
Motivating, leading, and any other
Monitoring activities to ensure that
Lead to
Achieving the
Locating prospective
employees to gstrategy, and
developing plans to
coordinate
,how it will be
done, and who is to do
it
yactions
involved in dealing with
people
they are accomplished
as planned
organizations stated
purposes
p yfill the job created by
the organizing
activities process
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M
WHO ARE MANAGERS?WHO ARE MANAGERS?
◆ Manager
• Someone who coordinates and oversees the workSomeone who coordinates and oversees the work
of other people so that organizational goals can be
accomplished.
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CHARACTERISTICS OF A GOOD MANAGERCHARACTERISTICS OF A GOOD MANAGER
The Dual Aspects of any Manager's Job
• The modern 'world of industry' is very complex, and thisvery complexity has led to what is called “specialization”and to the "division of labor” by which different people
i li i f i d b i li ispecialize in performing − and become specialists in −different types of work.
• It follows, therefore, that the “technical” or "functional”,i.e. the specific work of different managers can and does
l
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vary enormously.
CONT’D CONT’D
• Nevertheless, all those different types of
managers, and all others, should have considerableg , ,
knowledge of the technical aspects of their jobs in
dditi t b i fi i t ‘ f l ’addition to being proficient ‘managers of people’.
• It is, in any case, not easy to train, supervise andy y p
control the work of others without knowing what
th sh ld b d i5/2/2012 35
they are or should be doing.
• Some estimates show that a managing director may spend between
CONT’D CONT’D Some estimates show that a managing director may spend between
80% and 90% of his working hours on managerial matters and only
10% 20% f hi i h h i l i i i10% to 20% of his time on the technical activities.
• Whilst senior managers may spend approximately 50% of their
work time on managerial activities and 50% on technical activities;
and
• Supervisors and foremen may spend some 70% to 75% of their
ti t h i l ti iti d l 25% t 30% f th i ti t
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time on technical activities and only 25% to 30% of their time at
work on the supervision of their subordinates
CONT’DCONT’D
♦ How The Manager’s Job Is Changing
• The Increasing Importance of Customers
– Customers: the reason that organizations exist
• Managing customer relationships is the responsibility of all managers and
employees.
• Consistent high quality customer service is essential for survival.
• Innovation• Innovation
– Doing things differently, exploring new territory, and taking risks
• Managers should encourage employees to be aware of and act on opportunities• Managers should encourage employees to be aware of and act on opportunities
for innovation.5/2/2012 37
CONT’DCONT’D
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S f th i t t lit t it f
PERSONAL QUALITIES NEEDEDPERSONAL QUALITIES NEEDED
• Some of the more important personality traits of a
successful manager are the following:
1. Ability to Think Clearly and Logically: A
manager needs to be able, as the result of training,
to approach each situation and problem positively
and objectively, without prejudgment or being
distracted by irrelevancies. This requires him to
think in a clear, orderly fashion and to marshal and
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arrange logically in his mind all the facts and
information available to him.
CONT’D CONT’D
2. The Abilities to Make Decisions and to ActDecisively: These follow on from theyforegoing, and also require a measure ofself-confidence; a belief in one's own ability; yto succeed in solving problems in the rightway, and in one's own ability to dealway, and in one s own ability to dealeffectively with different situations andsets of circumstances
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sets of circumstances.
1 Defining as accurately as possible the problem which
CONT’D CONT’D 1. Defining as accurately as possible the problem which
needs to be solved.2. Obtaining all relevant information about the problem. Obta n ng all relevant nformat on about the problem3. Breaking down the problem into parts − very often
the solution to one part is obvious and leads, logically,to the solving of other parts or the whole problem.
4. Comparing and judging the probability of success ofany possible different solutions to the same problemany possible different solutions to the same problem,and their possible consequences on other areas.
5 Selecting the most attractive solution − making the
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5. Selecting the most attractive solution making thedecision
CONT’D CONT’D
• The Ability to Use Initiative: from time to time a manager is
bound to come across problems or situations which are outside his
range of experience or outside the normal scope of his responsibly;
the latter can, perhaps, arise when a senior is away or is unavailable
for some reason. In such circumstances, particularly if action is
urgently needed, the manager must not simply leave the matter until
his senior is available or wait to be told what to do, but must initiate
- that is, lead the action without waiting to be prompted.
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CONT’D CONT’D
• Ability to Handle Conflict: A good manager is calm, able
to listen, is positively responsive to criticism and is ablep y p
to handle conflicts and differences in a constructive
manner In order to handle conflicts well a manager mustmanner. In order to handle conflicts well, a manager must
be confident, self-assertive, fair and dominant. He
should be highly tolerant of stress, as conflicts generally
lead to stress and tension. This would require a sound
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q
mind in a sound body.
CONT’D CONT’D
• Ability to Adapt Change and be Flexible: Any manager
must be able to adapt to changes and, if necessary, tomust be able to adapt to changes and, if necessary, to
cope with changed circumstances, and ensure that his
b di t l dsubordinates also do so.
• Adaptability to different situations and flexibility of
mind are also necessary in the routine, day-to-day
running of a section department or an entire enterprise
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running of a section, department or an entire enterprise.
CONT’D CONT’D
• Ability to Be Emotionally Stable: In dealing with different
problems and situations, some of which might be irritating, annoying,
worrying or heated − or include emotional displays (e.g. tearful
women, angry voices, etc.) by others − a manager must be
sufficiently mature to keep calm and collected. He must be able to
keep control over his own emotions and his temper whatever may the
provocation be, and be able to concentrate his attention on the
matter in hand, thinking clearly, logically, and avoiding hasty
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reactions.
CONT’D CONT’D
• Stamina and Concentration: mental fitness to work long and hard
without undue stress or strain.
• Besides mental alertness, a manager needs to be able to concentrate
his mind on the matter in hand even under the most tiring
circumstances and/or when he is under pressure; to focus or keep
one's mind intently fixed over a long period can be tiring,
particularly as there will be many different matters requiring
attention and concentration during a manager's working day.
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CONT’D CONT’D
• Drive and Determination: A manager needs the urge and
enthusiasm to stimulate action not only by himself butenthusiasm to stimulate action, not only by himself, but
by other people as well. He also needs the determination
to keep going whatever the difficulties, adapting his
actions and decisions to overcome problems encountered,p ,
and pressing on to a successful conclusion.
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CONT’D CONT’D
• Leadership: Leadership is the ability of a person to
exert a positive influence over the thoughts, behaviorp g
and actions of others, and then to direct their thoughts,
behavior and actions towards a common goal or objectivebehavior and actions towards a common goal or objective.
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Skills Needed at Different Management Levels
CONT’DCONT’DSkills Needed at Different Management Levels
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Th i h i f ff i i i l
ORGANIZATION STRUCTUREORGANIZATION STRUCTURE
• The stages in the setting up of an effective organizational
structure are
The activities which will be necessary to achieve the
objectives of the business must be established.
The various related activities should be grouped together into
departments; the most logical grouping is by 'function', that
is, by type of activity: production, marketing, finance, etc.
The activities of a particular department will be further
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p p
divided, and grouped together into sections;
An organization chart should be produced to depict
CONT’D CONT’D An organization chart should be produced to depict
the proposed organization
Based on estimates of the volume of work, which will
be performed by each section, the number of staffp y ,
required must be determined. Depending on the type
of work to be performed and on other factors theof work to be performed and on other factors, the
numbers of supervisors, junior and middle managers
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per section and department must be given thought
Th sp ci l kn l d r t l nts r quir d b d p rtm nt l
CONT’D CONT’D The special knowledge or talents required by departmental
and sectional managers must be laid down.
The equipment necessary for the proper functioning of each
section and department must be decided upon, and provision
made for its positioning when considering the layout of the
accommodation for each unitaccommodation for each unit.
To ensure effective coordination of all parts of the
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enterprise, effective procedures and systems of
communication must be devised and installed.
TYPES OF ORGANIZATIONAL STRUCTURETYPES OF ORGANIZATIONAL STRUCTURE
• There are four different types of organizations,
namelynamely
I. line,
II. functional,
III line and staff andIII.line and staff, and
IV. matrix organization.
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CONT’D CONT’D
I. Line organization
• Sometimes called 'military organization' becauseSometimes called military organization , because
it is how the armed forces are organized.
• There is a clear 'line' of responsibility and
authority right through the managementauthority right through the management
structure from the board to the lowest level of
d l5/2/2012 54
supervision, and below.
• The 'chain of command‘ is direct and so decisions can
CONT’D CONT’D • The chain of command is direct and so decisions can
usually be made quickly and implemented rapidly, because
f th di t f th t l th di ti f thof the directness of the control, the coordination of the
activities of all those employed in a department is
simplified.
• The position (and status) of all the different peoplep p p
working in a department can be easily seen, and so the
extent of their responsibilities authority and duties can
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extent of their responsibilities, authority and duties can,
be clearly defined and understood.
CONT’D CONT’D
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CONT’D CONT’D
II. Functional Manager
• It is the function (the type of activity) which• It is the function (the type of activity), which
determines the areas of authority and responsibility.
• An expert or specialist is placed in charge of each
function, and will have direct control of that functionf , f f
wherever it is undertaken within the enterprise.
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• As the functional specialists are not involved in the day to day running
CONT’D CONT’D • As the functional specialists are not involved in the day-to-day running
of the enterprise (which is the domain of the line managers) they are
free to the concentrate on their particular functions that producefree to the concentrate on their particular functions that produce
many benefits for the enterprise.
• However, this form of organization makes control difficult as there are, g
no clear lines of authority and it is similarly difficult to establish
responsibility when things do not go right.
• Furthermore, staff as well as supervisors and junior managers become
confused at being subject to the authority of more than one superior.
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CONT’D CONT’D
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CONT’D CONT’D
III.Line and staff organization
• In such a structure, the line managers control thegprimary functions, such as marketing andproduction, which are directly concerned withproduct on, wh ch are d rectly concerned w thachieving the objectives of the business; whilst thestaff managers are generally involved withstaff managers are generally involved withsecondary functions which assist the smooth andefficient running of the primary functions
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efficient running of the primary functions.
CONT’D CONT’D
MANAGING DIRECTOR DIRECTOR
WORKSMANAGER
SALESMANAGER
ACCOUNTS MANAGER
PERSONNELMANAGER
L L L S
SECTION MANAGERS
SUPERVISORS &
SECTION MANAGERS SUPERVISORS &
SALESMEN
SECTION MANAGERS
SUPERVISORS &
LL L
SUPERVISORS & OPERATORS
SALESMEN SUPERVISORS &CLERKS
EMPLOYMENT OFFICER
TRAININGOFFICER
S S
L – Line relationship: S – staff relationshipResponsibility and authority shown by
5/2/2012 61
SUPERVISORS & CLERKS
SUPERVISORS & CLERKS
Responsibility and authority shown byStaff. Advisory relationship shown by ‐‐‐‐‐‐‐‐‐‐
CONT’D CONT’D
IV. Matrix organization(Project Organization)
• These are temporary organizational structures formed for
specific projects for a specific period of time and are
dismantled, once the required goal is achieved.
• A typical example for this kind of organizational structure can
be the goal to design and build a new power plant station.
• The specialists are selected primarily on the basis of task-related skills and expertise rather than decision making
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p g
experience or planning ability.
Th f l h
CONT’D CONT’D
• These structures are very useful when:
– The project is clearly defined in terms of objectives to
be achieved and the target date for completion of the
project.p j
– The project must be separate and unique and not be a
part of daily work routine of the organizationpart of daily work routine of the organization.
– The project must be temporary in nature and not
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extended into other related projects.
h k d f f l
CONT’D CONT’D
• This kind of organization occurs frequently in:
– Construction ( e.g. building a bridge)( g g g )
– Aerospace engineering ( i.e. designing and launching
th t llit )weather satellite)
– Marketing( e.g. advertising company for new product)
– Installation of an electronic data processing system,
etc
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etc.
CONT’D CONT’D
G eneral M anager
L abor R esearch F inance Personnel T echnical L abor R esearch Personnel S erv ices
P roject A M anager
P ro ject B M anager
P ro ject C M anager
5/2/2012 65
• In matrix organization it is possible for the
CONT’D CONT’D • In matrix organization, it is possible for the
individual employee to have two managers. However,
proponents of matrix organization believe that it
provides an agency with the flexibility to work onp g y f y
critical projects.
• Matrix organization also brings together the
specialized talent that is often necessary to
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p y
complete a project
Other advantages of matrix organization:CONT’D CONT’D
g g
– Decision making is decentralized to a level where information
is processed properly and relevant knowledge is applied.
– Extensive communication networks help to process largep p g
amount of information.
– With decisions delegated to appropriate levels, higher
management levels are not over loaded with operational
5/2/2012 67decisions.
CONT’D CONT’D
– Resource utilization is efficient, because key
resources are shared across several importantresources are shared across several important
programs or products at the same time.
– Employee learns the collaborative skills needed to
function in an environment characterized byf m y
frequent meeting and more informal interactions.
5/2/2012 68
PRODUCTIVITY PRODUCTIVITY
5/2/2012 69
THE BASICS OF PRODUCTIVITY THE BASICS OF PRODUCTIVITY
• In most businesses, competition for the availablemarket, forces the management of each enterprise to
k i i d h h h fseek competitive advantage through the use of:– product improvements
l sts– lower costs– lower selling prices for the same or better quality and– better service to customersbetter service to customers
• Productivity is defined as the ratio of value of outputto the value of inputto the value of input
5/2/2012 70
CONT’D CONT’D
inputofvalueoutput of value =ty Productiviinput ofvalue
5/2/2012 71
CONT’D CONT’D
• An increase in production does not necessarily by
itself indicate an increase in productivity.
• If the input of resources goes up in direct
proportion to the increase in output the productivityproportion to the increase in output the productivity
remains the same
5/2/2012 72
CONT’D CONT’D
• If input increases by a greater percentage than
output, higher products will be achieved at theoutput, higher products will be achieved at the
expense of reduction in productivity
• In short higher productivity means to producemore with the same expenditure or with amore with the same expenditure, or with a
minimum increase in expense, or the same amount
is produced at less cost in terms of resources.5/2/2012 73
CONT’D CONT’D
• The outputs may be products or services and theinputs or resources may be land, materials, plantp y , , pmachineries, tools and a series of man.
♦ Land Productivity: Better seed, fertilizer andbetter method of cultivation may increase thebetter method of cultivation may increase theyield from two quintals to three quintals. Hencel d d ti it h i d b 50 tland productivity has increased by 50 percent.
5/2/2012 74
CONT’D CONT’D
♦ Material Productivity: If a skillful worker is ableto produce 300 formworks from 400 pieces ofto produce 300 formworks from 400 pieces of2m 1m sheet metal, while an unskillful workercan only produce 250 out of the same material,then with the skilful worker the material wasthen with the skilful worker the material wasused with 20 percent greater productivity
5/2/2012 75
CONT’D CONT’D
♦ Machine Productivity: If a machine tool has
been producing 100 pieces per a working daybeen producing 100 pieces per a working day,
and through the use of improved cutting tool
and/or proper maintenance procedure its
tp t i th s m p i d is i s d t 120output in the same period is increased to 120
pieces, the productivity of that machine hasp p y
been increased by 20 percent.5/2/2012 76
CONT’D CONT’D
♦ Productivity of Man: If a shoe maker has
b d i 30 i f l hbeen producing 30 pieces of leather parts per
hour, and if improved methods of work enable, f p f
him to produce 40 pieces per hour the
productivity of that man has increased by 33.3
percentpercent
5/2/2012 77
CONT’D CONT’D
• To sum up, a low level of productivity implies a low
growth of economygrowth of economy.
• A low growth of economy meant, low income leading
to low standard of leaving and a low level of savings,
resulting in low level of investment and lowresulting in low level of investment and low
productivity
5/2/2012 78
Global
Higher productivity
Higher competitiveness
International
multinationalHigher Quality
Export
5/2/2012 79
Standard of living Standard of living
Economic Growth
Productivity Growth Employment +r u y Gr w Emp ym nGrowth
TFP Growth Capital Intensity G th
+Growth
5/2/2012 80
• Productivity is affected by many external and internal
PRODUCTIVITY IMPROVEMENTPRODUCTIVITY IMPROVEMENT• Productivity is affected by many external and internal
factors. Some of the external factors, influencing
productivity to mention are: the national and international policiesp
infrastructure supports
cultural practicescultural practices
the availability of technology and natural resources
i ti l p li i s organizational policies
Climate, incentives and information5/2/2012 81
CONT’D CONT’D
• Examples of internal factors that are identified
to as hindering the rise of productivity are:to as hindering the rise of productivity are:
unsuitable personnel policies leading to a low level of
satisfaction and involvement;
poor maintenance system and low level of maintenancepoor maintenance system and low level of maintenance
awareness;
improper selection and training of personnel;5/2/2012 82
CONT’D CONT’D
inappropriate choice of design, tools, material and equipment;, q p ; undefined standardization and quality policies; inadequate plant layout and materials handling inadequate plant layout and materials handling
systems; poor planning controlling and communication poor planning, controlling and communication
systems;uns fe nd unhe lth rkin envir nment unsafe and unhealthy working environment
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PRODUCTIVITY IMPROVEMENT STRATEGIES PRODUCTIVITY IMPROVEMENT STRATEGIES
A. Short term StrategyTh fi t t t i i i i ti l l i• The first strategy is improving organizational planning
and control, to implement planned maintenance of
machinery and effective production system in plants
would show an increase in machine productivity andwould show an increase in machine productivity and
reduction in maintenance cost.
5/2/2012 84
The second action is increasing manpower efficiency and
CONT’D CONT’D
• The second action is increasing manpower efficiency and
effectiveness at all levels. Effectiveness and efficiency
are the main tools of productivity.
♦ Efficiencyff y “Doing things right”
– Getting the most output for the least inputs
♦ Effectiveness “Doing the right things”g g g
– Attaining organizational goals5/2/2012 85
CONT’DCONT’D
Resource Goal
Efficiency (Means) Effectiveness (End)
Resource
Usage
Goal
Attainment
Low Waste High Attainment
Management Strives for: L R s W st (Hi h Effi i )Low Resource Waste (High Efficiency)
High Goal Attainment (High Effectiveness)
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CONT’D CONT’D
• To be able to increase manpower efficiency and
effectiveness at all levels of an organizationeffectiveness at all levels of an organization
what is required is motivation, training and
education. This method has proved itself
s ssf l i J psuccessful in Japan.
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CONT’D CONT’D
• The third short term line of attack is improvingoperation methods. The techniques of methodp qstudy involve breaking a process into detailedcomponentscomponents.
– The study may result in elimination of anactivity, combination of several activities,change of sequence of activities, shorteningg q gduration of activities etc.
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CONT’D CONT’D
• As Frederik Taylor said "Most of us can dothree or four times as much as we ordinarily dothr or four t m s as much as w or nar y owithout lengthening working hours or evendriving ourselves to exhaustion by the day'sdriving ourselves to exhaustion by the day send".
• In fact, to achieve this, effectiveimplementation of method engineering isimplementation of method engineering isrequired.
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CONT’D CONT’D
B. Medium Term Strategy
• At this stage the firm may require capital to simplify• At this stage the firm may require capital to simplify
and improve the products, and reduce variety.
• The analysis consists of common sense questions to
come up with effective solutions like substitution ofcome up with effective solutions like substitution of
alternative materials, elimination of parts where
special designs have been specified, redesign, etc.5/2/2012 90
CONT’D CONT’D
C. Long Term Strategy
• Properly selected new machineries wellProperly selected new machineries, well
organized departments and proper layout will
undoubtedly contribute to an increase in
productivityproductivity.
• Furthermore, research and development is the
backbone for productivity increment.5/2/2012 91
Productivity improvement techniques5/2/2012 92
FUNCTIONS OF AN INDUSTRIAL ENTERPRISEFUNCTIONS OF AN INDUSTRIAL ENTERPRISE
• Manufacturing functions– Receiving, Warehousing, Transportation, Production,
ShippingShipping
• Engineering Functions– Product design Process design Plant engineering CostProduct design, Process design, Plant engineering, Cost
estimation
• Control Functions– Production control, Quality control, Cost control,
• Support Functions– Purchasing, Sales, Maintenance, Personnel
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