industrial management(unit 1)

8/3/2019 Industrial Management(Unit 1)

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INDUSTRIAL

MANAGEMENT

UNIT:- 1


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INTRODUCTION

Wherever a group activity is organised to achieve certain

common objectives, management is need to direct, co-ordinate

and integrate the individual activities of a group and secure

team work to accomplish organizational objectives.

It is only efficient management which helps in achieving the

objectives of profit maximization or continuous growth and

survival economically by effective utilization of the scarce

resources.

Management is a universal process in all organized economic

activities.

The management is an operative force in all complex

organizations trying to achieve some stated objectives.


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FEW DEFINITIONS

Mary Parker Follet, management is the art of getting things

done through other people.

Kimball and Kimball, management may be defined as the art

of applying the economic principles that underline the control

of men and materials in the enterprise under consideration.

Peter F. Drucker in his book Practice of management,

Management is a multi-purpose organ that manages business,

manages a manager and manages workers and work.

As per him any one is omitted, we would not have management any more

and we also would not have a business enterprise or an industrial society.

F.W. Taylor, Management is knowing exactly what you want

men to do and then seeing that they do it the best and cheapest

ways.


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Koontz ans ODonell, Management is defined as the creation and

maintenance of an internal environment in an enterprise where

individuals, working together in groups, can perform efficiently and

effectively towards attainment of group goals.

Henri Fayol the father of modern management thought, Management is toforecast and to plan, to organise, to command, to co-ordinate and to

control.

James A.F. Stoner, Management is the process of planning, organizing,

leading and controlling the efforts of organizational members and of using

all other organization resources to achieve stated organization goals. Management is a continuous process.

Several inter-related activities have to be performed by managers irrespective of their

levels to achieve the desired goals.

Managers uses the resources of org., both physical as well as human, to achieve the goals.

Management aims at achieving the organizations goals by ensuring effective use of

resources.


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COMPREHENSIVE DEFINITION

Management is a social process involving co-ordination of

human and material resources through the functions of

planning, organizing, staffing, leading and controlling in

order to accomplish stated objectives.

There are 5 part to a definition as mgmt. as social process:-

The co-ordination of resources.

Second, the performance of managerial functions as means of

achieving co-ordination;

Third, establishing the objective or purpose of management process,

i.e. it must be purposeful managerial activity.

Fourth aspect is that management is a social process i.e. its the art

of getting things done through other people; and

The fifth is its cyclical nature i.e. an ongoing process which represents

planning-action-control-re-planning cycle.


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MODERN DEFINITION

Management is the process of getting things done with the aim of

achieving organizational objectives effectively and efficiently.

Basic elements:-

Management is a process.

Effectiveness

Efficiency

Organizational objectives

Effectiveness Vs. Efficiency:-

Effectiveness Efficiency

It refers to the completion of task on

time.

It refers to the completion of task with

a minimum cost.

It is concerned with the end results It is concerned with the cost-benefit

analysis i.e. using less resources and

getting maximum output.


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MANAGEMENT AS A PROCESS

Management refers to a series of inter-related functions or

elements to achieve stated objectives through the effective

utilization of human and other resources.

It involves:- Planning

Organizing

Staffing

Directing or leading

controlling

Planning

Organising

StaffingDirecting

Controlling

ResourceManagerialFunctions

Objectives


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MANAGEMENT AS A GROUP

Use of management term to denote a team or group of

managers who runs the organization.

Management of the enterprise is represented by group of

people which performs managerial functions for theaccomplishment of its goals known as Managers.

In practice, the term Management is used to imply the top

management.


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MANAGEMENT AS A PROFESSION

Profession, as an occupation backed by special body of

knowledge and training and to which entry is regulated by

representative body.

Essential requirements of a profession are:- Specialised field of knowledge

Restricted entry based on education and training.

Representative of professional association.

Ethical code of conduct for self-regulation.

Social recognition Professional fee.


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MANAGEMENT CONSIDERED AS

PROFESSION

Professional Criteria Management

1. Specialised body of

knowledge

Supported by a well-defined body of knowledge that cant be

taught and learned.

2. Entry based on

education and training

Requires competent application of management principles,

techniques and skills. Need of formal training and education.

Courses like MBA and PGDM to create managers

3. Professional

Association

Associations of managers have been formed in different

countries of the world and these prescribes standards of

education and training for their members.

4. Code of Ethics Associations like AIMA prescribes code of conduct for their

members.

5. Service Responsibilities Managers aware of their social responsibilities towards various

groups of the society like customers, labor, suppliers, govt. etc.

guided by service motive and enjoy higher status in the society.


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NOT FULL PROFESSION

It cant be fully regarded as a profession coz:-

Entry to management profession is not restricted. No prescribed

standard qualifications e.g. MBA and training programme to become

a manager.

Doesnt have an all India representative association like IMA, ICAI,

etc. to prescribe professional standards and enforce them.

No ethical code of conduct for the managers as is the case with

doctors and charted accountants.


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CHARACTERISTICS

Management is a purposeful activity.

Efficient management of economic resources.

Its a distinct process.

Its universal.

As a team of managers and system of authority.

Co-ordination is the soul of management.

Management is dynamic.

Management is decision making.

Management is a profession.


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DIFFERENCE AND RELATIONSHIP B/W

ADMINISTRATION, MGMT. AND ORG.

The use of terms of Management and Administration has been a

controversial issue.

Oliver Sheldon, Management is a lower level function and is

concerned with the execution of policies laid down by

administration.

Brech and others, Management is a wider term which includes

administration.

Administration determines the objectives and policies of the

enterprise. Management carries out these policies to achieve objectives.

For effective functionality of Mgmt. and Admt., there must beproper structuring of the enterprise and this is known as

organization.


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The different view-point:-

American Viewpoint ( Oliver Sheldon and William Spriegel ):-

Administration is a higher level function, whereas management is a

lower level function

British Viewpoint ( Breach and Kimball & Kimball):- Management

is a generic term and includes administration.

Modern View point:- Both the terms are used interchangeably.

Top Management

Middle Management

Lower Management


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Basis Management Administration

1. Definition Means getting the work done through

& with others by leading and

motivating them

Concerned with the formulation of

objectives, plans and policies of

the organization.

2. Nature of Functions Refers to execution of decision. Doingfunction

Relates to decision- making.Thinking function

3. Stage of Performance Concerned with the implementation of

policies laid down by administration.

Concerned with the determination

of major objectives.

4. Leading of Human Efforts Actively concerned with the direction of

human efforts at operative level.

Not directly concerned with the

direction of operative personnel.

5. Type of Authority Operational authority to execute admt.

decisions.

Authority to take strategic and

policy decisions.

6. Levels in the organization At relevant lower levels of

management.

Refers to higher level of

management.

7. Decision Making Decides who shall implement the

administrative decisions.

Determines what is to be done and

when it is to be done.

8. Usage Widely used in the business

organization in the pvt. Sector.

Associated with non-business org.

such as government deptt., public

entp., military org., socio-cultural

org., etc.

9. Designations in

Organizations

General Manager, MD, Plant

superintendent, Branch manager,Controller, etc.

Minister, Secretary, Commissioner,

Director, Vice Chancellor, Registrar,etc.


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LEVELS OF MANAGEMENT

In an org. all those who are responsible for the work of others

are usually known as managers.

Primary task, getting the things done by other people, there is

a wide variation in their authorities and responsibilities. Largely due the differences in the levels of management.

Levels of management, refers to a line of separation between

different positions drawn with the view to distinguish each other

in respect of their duties, responsibilities, rights and authorities. 3 levels of management commonly found in an organization:-

Top management

Middle management

Lowest or supervisory management


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Top Management:-

Policy making level in the organization.

Consist of Board of Directors, Managing Directors, Personnel Manager, ChiefExecutives, etc.

Responsible for the overall management of the organization.

Define aim, establish primary objectives, policies and strategies to be pursued to

achieve these objectives.

Formulate plans of organisation and procedure, inaugurate the broad programs andapprove major projects in the program.

Provide dirction.

Middle Management:- Concerned with the execution of the detailed policies and plans determined by

the top management.

Answerable to top management.

Main functions:- to plan, to guide, to supervise, to co-ordinate and exercise control

over the lower level of management.

Functions as link between top management and lower management.


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Lower Level or Supervisory Management:-

Managers at this level function under the control and direction of the middle

management.

Functions as to plan, guide, supervise, to exercise control in order to get the

work done from the operating staff.

Takes orders from the middle level and explains them to the workers.

Accredited with the responsibility of getting the work done and is made

accountable to middle management.

Includes Foreman, Supervisors, Superintendent, Inspector, etc.


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LEVELS REPRESENTED BY FUNCTIONS

Top Management Board of Directors, Managing Directors,

Chief Executives, General Manager and

Seceretary

(a) Determine the objectives

(b) Establishing Policies

(c) Monitoring Performance.(d) Judging the results.

Upper Middle Mgmt. Production Manager , Finance Manager,

Personnel Manager, Materials Manager

and R & D Manager

(a) Establishment of org.

(b) Selection, training and placement of

staff.

(c) Assigning duties to subordinates

(d) Design operating policies and routines.

(e) Control over the subordinatesMiddle Management (a). Superintendents

(b). Departmental Heads

(a) To plan details of operation

(b) To co-operate with top management

(c) Active co-ordination between various

departments.

(d) Development of manpower by imparting

training.

LowerM

anagement (a) Foreman(b) Supervisors (a) Act as link between manager andworkers

(b) Direct supervision of workers

(c) Arrangement of material, tools, facilities

etc. for production.

Working (a) Workers

(b) Service staff

(c) Security Staff

(a) Carry out the work assigned to them


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MANAGEMENT AS SCIENCE AND ART

Management as a Science:-

Science is a systematized body of knowledge pertaining to a particular field

of enquiry.

Contains concepts, hypothesis, theories and principles to explain cause and

effect relationship between two or more factors. A discipline should have following to be organized as science:-

Should have a method of scientific enquiry.

Should establish cause and effect relationship.

Principles should be verifiable.

Should ensure predictable results. Should have universal applications.

Management:-

Has a systematized body of knowledge pertaining to its field.

Use scientific techniques to collect and analyse data about human cause and effect

Principles have universal applications in different type of org. in different countries.


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Management is not Perfect Science:-

Many of the principles of management are not supported by

research.

It is difficult to establish cause and effect relationship as in

chemistry or biology.

Applications of management principles depends upon situations

and factors.

Deals with people at work and very difficult to predict their

behavior accurately. Its is mostly called as aSocial

Science.


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Management as an Art:-

Art signifies the application of knowledge and personal skills to bring about

the desired results.

Science is learnt, Art is practiced. Science is to seek knowledge, art is toapply knowledge.

Features of Art:- It denotes personal skills.

It signifies practical knowledge

It helps in achieving concrete results.

Its creative in nature.

Management as an Art:- Management does involve the use of knowledge of management concepts, principles, etc.

Manager has to apply his personal skills to deal with variety of problems of the unit.

Management is situational.

Art of management can be learnt and mastered through continuous practice.

Management creative in nature as managers create new situations for further improvement.


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Management as both Science and Art:-

Science as it has organized body of knowledge which contains

certain universal truths.

Art as managing requires application of certain skills which are the

personal possession of the manager.

Science provides knowledge, art about application of knowledge.

A manager must acquire the knowledge of science of art and learn

to apply this knowledge.

Management is the oldest of the art and the youngest ofsciences.


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APPROACHES TO MANAGEMENT

Scientific Management Approach ( F.W. Taylor, Henry L. Gantt, Frank and

Lillian Gilbert, etc.)

Management Process Approach (W.G. Scott, Henry Fayol, Chester I. Bernard)

Human Relation Approach (Elton Mayo)

Behavioral Science Approach ( Gantt and Munsterberg, Abraham Maslow,Fredrick Herzberg, Victor Vroom, Douglas McGregor, Lawler, Sayles, etc.)

Quantitative Approach like linear Programming, CPM, PERT, Break-even

Analysis, Games theory, etc,

System Approach ( Chester I.Bernard)

Contingency or Situational Approach as there is no one best way to handle

any management problem.

Operational Approach ( Koontz and ODonnell )

Empirical Approach i.e. study of experience of managers.


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INDUSTRIAL MANAGEMENT


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Refers to the efforts of group of individuals towards achieving

some common objectives and goals of an organization.

Combine 1 important domain i.e. Industrial Engineering +

Management.

Industrial Management involves guidance, co-ordination and

control or efforts of a group of individuals towards optimum

utilization of materials, equipment and energy through

improved design, analysis and implementation in order to

achieve common objectives of the organization.

Industrial management focuses on design and management of

system to achieve the objective of productivity improvement.


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Industrial Management thus:-

Is the performance of the management activities with regards to

selecting, designing, operating, controlling and updating production

system.

Included the process of effectively planning, coordinating and

controlling the production.

Relate to planning, coordinating and controlling the resources

required for production to produce specified product by specified

methods, by optimal utilization of resources.


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HISTORY AND DEVELOPMENT OF

INDUSTRIAL MANAGEMENTDate Contribution Contributor

1776 Specialization of labor in manufacturing Adam Smith

1799 Interchangeable parts, cost accounting. Eli Whitney and others

1832 Division of labor by skill; assignment of jobs by skills, basics of time study Charles Babbage

1900 Scientific management time study and work study developed, dividing planning

and doing job

F.W. Taylor

1900 Motion of study of jobs Frank B. Gilberth

1901 Scheduling techniques for employees, machines jobs in manf. Henry L. Gantt

1915 Economic lot sizes for inventory control F.W. Harris

1927 Human relations, the Howthrone studies Elton Mayo

1931 Statistical sampling applied to quality control, inspection sampling plans H.F. Dodge & H.G. Roming

1946 Digital Computer John Mauchlly and J.P. Eckert

1947 Linear programming G.B. Dantzig, Williams & others

1950 Mathematical programming, on-linear and stochastic process A Charnes, W.W. Cooper & others

1960 Organizational Behavior, continued study of people at work L. Cummings, L. Porter

1980 Quality and productivity applications from Japan, robotics, CAD-CAM W.E. Deming and J. Juran


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APPLICATION OF I.M.

System control

Leadership and motivation

System co-ordination

Recruitment and training

Plant designing

Fund management

Exploring reliable suppliers

Devising efficient methods of production

Product designing


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SCOPE OF I.M.

Scopeof I.M.

ManagementFunctions

ProductionPlanning

Quality Control

Supply ChainManagement

InventoryControl &

Management

ProductivityMeasurement


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PRODUCTIVITY

Implies that the changing productive efficiency with which the

potential resources of a industry or country are effectively utilized in

the production of goods and services during a given period of time.

As per European Productivity Council, Productivity is an attitude

of mind. It is a mentality of progress, of the constant improvement of

that which exist. Its the certainty of being able to do better today

then yesterday, and continuously. It is the constant adaptation of

economic and social life to changing conditions; it is the continual

effort to apply new techniques and methods. It is the faith in human

progress.

Another widely acceptable definition, Productivity is defined as a

ratio of output to input of a productive system.


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Productivity = Output/ Input

It measures how well the resources are brought together in

organization & utilized for accomplishing a set of objectives.

2 variables used for measurement:- Quantity of production ( output)

Quantity of resources ( Input)

Productivity can be increased:-

By increasing production using same amount of resources. By reducing the amount of resources, while keeping the same

production.

By keeping the rate of increase of output more as compared to the

rate of increase in input.


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PRODUCTION Vs. PRODUCTIVITY

Production refers to the quantity or value of output of a

particular goods or services produced in a given period of

time by using a specified amount of inputs.

Production is a absolute term. Productivity typically expressed as a ratio, refers to the

efficiency with which the inputs been utilized to obtain a given

output.

Productivity is a relative measure.


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Efficiency, Effectiveness and Productivity of the Production System


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MEASURING PRODUCTIVITY

Productivity = output/input i.e. O/I

Factors Productivity:-

Productivity of Labor:- Ratio between output and labor input in the form ofnumber of workers or man-hour work.

Productivity of Labor = Output/ Number of workers or Number of man-hours

Man Hours = No. of workers employed x No. of hours worked.

Productivity of Capital:- Ratio between output, measured in money

value, and amount of capital employed.

Productivity of capital= Output/ Capital Employed Productivity of other factors:-

Productivity of Materials= Output/ Materials

Productivity of Machine= Output/ Machine-hours worked

Productivity of Land= Output/ Area of land used


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FACTORS OF PRODUCTION

Primary factors of Production:-

Land

Labor

Capital

Entrepreneur Land:- As per Marshall, the whole of the materials and forces which nature

gives freely for mans aid in land and water, in air, light and heat.

Productivity of Land:-

Natural Endowment

Human Factors-knowledge, training and experience

Type of organization of farm - Techniques of agriculture.

Regional location of farm - Mechanization and automation.

Alternative uses

Availability of irrigation

Availability of capital


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Labor:- As per Marshall, By labor is meant the economic work of man

industrial management(unit 1)

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