Industrial Organization Management

Engineering ManagementIE 422

General Objectives:To discuss and understand the fundamental concepts and philosophy of management To become effective managerTo provide the student with an elementary knowledge of the functions and process management workTo provide the student with a knowledge of the functions and process of management work

EVOLUTION OF MANAGEMENT THOUGHTS

THE SPEED OF THE CANOE DOESNT COME FROM ITS WOOD, BUT FROM THE PILOTS SKILLS AND WIND DIRECTIONS

ManagementIt denotes both a function and the people who discharge it. It also denotes a social position and authority, but also a discipline and a field of study. (Drucker, 1977)Its a process by which a cooperative group directs action toward common goals (Massie 1964)Its getting things done through other people (Massie 1964)

ManagementIt is unifying and coordinating activity which combines the actions of individuals into meaningful and purposeful group endeavor (Mahoney 1961)Its a technique by means of which the purposes and objectives of a particular human group are determined clarified and effectuated (Petersen et al, 1962)

ManagementIdentified with the direction of individuals and functions to achieve ends previously determined (Piffner et al 1953)Its the accomplishment of desired objectives by establishing an environment favorable to performance by people operating in organized group (Koontz 1964)

ManagementIts a distinct process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources (Terry 1982)Management is task. Management is a discipline, But management is also people (Drucker, 1977)

ManagementIdentified with the direction of individuals and functions to achieve ends previously determined (Piffner et al 1953)Its the accomplishment in desired objectives by establishing an environment favorable to performance by people operating in organized group (Koontz 1964)

ManagementIts a distinct process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources (Terry 1982)Management is task. Management is a discipline, But management is also people (Drucker, 1977)

Dimensions of ManagementTo think through and define the specific purpose and mission of the institution, whether business enterprise, hospitals or universityTo make work productive and the worker achievingTo manage social impact and social responsibilities (Drucker, 1977)

OrganizationSocial group of individuals deliberately created and maintained for the purpose of achieving specific objectivesGenerally, organizations may be classified into private, public, church or military. (Drucker, 1977)

Management as an ART and SCIENCEManagement is an art because its applying skills and knowledge and accomplishing an end through deliberate efforts.

Management is a science because it involves seeking new knowledge through the use of rigorous method of collecting data, classifying and measuring it, setting up hypotheses, and testing those hypotheses.

Frederick Taylor who is regarded as the father of scientific management stressed the need for developing mutuality of interests between management and labor, a harmonious cooperation and that in all problems of management the human element is the most important one (Koontz et all, 1981)

Henry Gantt emphasized the importance of time and cost in planning and controlling work and from this he developed a management technique for management information. This is popularly referred to now as the Gantt Chart and is said to be forerunner of the PERT

The scientificity of management has been further enhanced by the contribution of Frank Gilbreth who introduced motion studies; Karl Person, who developed management statistical techniques; Mary Parker Follet, who emphasized the value of human relations to the basic principles of organizations; Chester Barnard, who stressed the sociological aspects of management and D.B. Dantzig, who developed the basis for the practical application of linear programming.

Henri Fayol, regarded as the father of modern management, suggested that all activities in an industrial undertaking may be divided into groups, namely:Technical (production, manufacture, adaptation)Commercial (buying, selling, exchange)Accounting (stocktaking, balance sheet, costs, statistics)Managerial (planning, organization, command, coordination, control)

To forecast and plan (examining the future and drawing up the action plan)To organize (building up the structure, material and human, of the undertaking)To command (maintaining activity among the personnel)To coordinate (binding together, unifying, and harmonizing all activities efforts)To control (seeing that everything occurs in conformity with the established rule and expressed command)

Elements of Management

Contigency ResponseManagers are made managers because they are expected to go into action when needed. This means they must have the ability to cope with potential or actual threats to the businessThey must respond quickly to risks with contingency or standby plans or quick action borne from experience or right hunches

What Managers Really Do

Uncertainty ReductionManagers are also made managers because they are expected to reduce uncertainties, risks or threats to the businessThey are capable of changing the organization with purpose and deliberate actionsThey reduce the unknowns

What Managers Really Do

Patterns of Management Analysis

This school analyzes management through experience. It heavily uses cases in its study of management.

As a study of experience, it draws generalization but usually as a means o teaching experience, to the practitioner or to the student.

The Empirical School

This school considers management as a series of decisions and the analysis of decisions as the central function of management.

It concentrates on the development of rational decision-making in organizations- selection from possible options of a course of action.

The school emphasizes the importance of the decision itself, the person or group making the decision, and the process of decision-making.

The Decision Theory School

This school considers management as a system of mathematical models and processes.

It expresses management problems into goals and objectives and derives factor relationship and combinations which could possibly optimize the stated goal or objective if the organizationThe Mathematical School

A system may be defined as a set of interacting elements bound together by a common objective and operating within a given environment.

It looks management as a system operating within an internal and external environment

Management is viewed to be divided and composed of subsystem such as systems of planning, organizing, controlling, budgeting, staffing, monitoring, decision-making.The Systems School

The school analyzes management from the standpoint of interpersonal relations represented by human relations, leadership, and behavioral sciences.

This school is anchored on the belief that management is founded on delegation, that is, getting things done through others.The Human Behavior School

The Hawthorne EffectThe result of an experiment conducted at the Hawthorne plant of Western Electric in Cicero, Illinois in 1924. They lowered the lighting in the factory, expecting productivity to fall; but instead, to their astonishment, productivity increased.The researchers concluded that productivity rose because workers worked harder when they received attention. This phenomenon, in which change of any kind increases productivity, has been known as the Hawthorne Effect.

The Social System SchoolThis school looks at management as a social system and consider the organization primarily as a social organism subject to pressures and conflicts which come from the social environment.

Its basic tenets include the concepts of cooperation, adaptation, segregation, and differentiation

The Socio- Technical System SchoolIt was E.L. Trist (1951) of the British Tavistock Institute who developed this school. In his studies of the production system of coal mining, he found out that the cooperative social system was not enough to solve the problems of productivity. Instead, the fitting of the technical system in the production and the behavioral system of the workers was necessary.

The Situational SchoolAlso known as the Contingency Approach, this school emphasizes the fact that the practice of management depends upon a given set of circumstances.

This school has largely contributed to the development of such management approaches as brand management in marketing, product management in pharmaceuticals, account management in banking, client management in service organizations, and project management in engineering and development of undertakings

The Managerial Roles SchoolPopularized by Henry Mintzberg of McGill University, this school focuses on the activities or roles that a managers do in organization. Mintzberg (1973) analyzed the roles and activities of five chief executives and came to the conclusion that managers do not really act on the basis of the classical functions of management but instead engage in various roles but which may be summarized into three, namely: (1) interpersonal roles, e.g leader, (2) informational roles, e.g communicator; and (3) resource allocator, e.g, entrepreneur

The Operational SchoolThis school consider management as a universal process and analyzes management through the functions of management namely, planning, organizing, staffing, directing, motivating, and controlling.

It draws together the concepts, principles, theories, and techniques of management through the actual practice of management in organization

In general, there is no single effective school of management, although one approach may appear to be useful in solving a number of problems in a number of management situations. It is essential to remember that each schools has its own strong and weak points. It is therefore advisable to be equipped with knowledge of the battery of schools in order to be wholistic and integrative in perspective.

If the central element in organization is management, the central character in management is the manager. Drucker has considered the manager as the dynamic element in every business organization.

Manager does not practice management in a vacuum. He operates within an internal and external environment. The Manager and His Environment

The internal environment which includes both physical and non-physical factors are controllable by the manager in a relative senseThe external environment in which the manager also interacts is more complex.

The interaction of the manager with the external environment is premised on the ff:The Manager and His Environment

The organization being managed draws various kinds of inputs from the environment such as human, capital, managerial, materials, technology and other resourcesThe organization services market demands and protects legitimate rights of interested parties such as employees, consumers, suppliers, investors, the government, among othersThe organization affects the environment conversely as the environment affects the organizationThe Manager and His Environment

Economic EnvironmentThe economic system itself constitutes the economic environment. The demand, supply and prices of commodities, products, and other inputs generally are the major concerns of the manager in the economic environment.Most of the tactical and strategic decisions of the manager hinge on rents or costs of land, wages of labor, interest rates of capital or money, costs of rated of energy, costs of materials and machines, among othersExternal Environment on the other hands may be summarized as follows:

Technological EnvironmentTechnology is referred to as the sum total of knowledge we have of ways to do things (Koontz et al, 1981)It includes inventions, techniques, and the vast store of organized knowledge about everything. But its main influence is on ways of doing things, on how we design, produce, distribute, and sell goods as well as servicesThe real impact of technology is on new products, new processes, new machines, new tools, new materials, and new services.

External Environment on the other hands may be summarized as follows:

Social EnvironmentThe social environment is made up of attitudes, desires, expectations, degrees of intelligence and education, beliefs and customs of people in a given group or societyAt present, the social environment is a factor that managers cannot easily dispense with. In fact modern managers have to take this factor seriously.External Environment on the other hands may be summarized as follows:

Political EnvironmentThe political environment is intertwined with the social environment but the two can be conceptually differentiated.External Environment on the other hands may be summarized as follows:

Crusading StageThis is the stage of startups and the beginning of the movementsIt may begin with a charismatic leader capable of mobilizing forces from the countryside or from the urban poor or a combination of bothIt may be a peoples movement without any apparent singular leader in the beginning until one emerges from the conflictManagement of Revolution

Popular Movement StageThe charismatic leader and his movement must now become populist and involve the largest number of people possibleThey zero in active supporters, optimizing their participation, go after potential followers, and either ignore or confront the opposition directly or indirectlyManagement of Revolution

Managerial StageAs the movement moves into a position of advantage against all oppositionists, it must be settle down into a purposeful large-scale organization for changeIt must be managedThe leader and the followers, and their army of supporters must have unity of action backing up their unity of goalManagement of Revolution

Bureaucratic StageThis is the last phase of the cycle when the leaders and cadre revolutionary movement have totally transformed themselves from high-spirited crusaders in the first stage to a very large, heavy and cumbersome bureaucracy. Management of Revolution