INDUSTRIAL MANAGEMENT: INDUSTRIAL MANAGEMENT UNIT-I UNIT I: UNIT I Principles of management Concepts of management, Development of scientific management. Principles of Frederick ,Taylor & Henry Fayol , Functions such as planning, organizing, staffing, leading, motivating, communicating, controlling, Decision making, span of control. Principles of Management : Principles of Management Concept & Definition of ‘MGMT’: 4 Concept & Definition of ‘MGMT’ The term ‘management’ have different meanings . And it is important to understand different definitions, like MANAGEMENT as a PROCESS MANAGEMENT as a DISCIPLINE MANAGEMENT as PEOPLE MANAGEMENT as a CAREER MANAGEMENT as a PROCESS: YCCE 5 MANAGEMENT as a PROCESS Management is a process involving certain functions and activities that managers must perform. Managers also use principles in managing which are generally accepted tenets that guide their thinking and action. This is what managers do. MANAGEMENT as a DISCIPLINE: YCCE 6 MANAGEMENT as a DISCIPLINE Classifying Mgmt as a discipline implies that it is an accumulated body of knowledge that can be learned. Thus Mgmt is a subject with principles, concepts and theories. MANAGEMENT as PEOPLE: YCCE 7 MANAGEMENT as PEOPLE It implies people who guide, direct, and thus manage organizations. The perspective of management as people refers to, and emphasizes the importance of the employees who managers work with and manage in accomplishing an organization's objectives. MANAGEMENT as a CAREER: YCCE 8 MANAGEMENT as a CAREER People who devote their working lives to the process of management actually pursue management as career. The different meanings can be related as ………….: YCCE 9 The different meanings can be related as …………. “ People who wish to have a career as a manager must study the discipline of management as a means toward practicing the process of management.” PowerPoint Presentation: YCCE 10 “MANAGEMENT is a process undertaken by one or more persons to coordinate the activities of other persons to achieve results not attainable by any one person acting alone.” Organizations and Principles of Management: YCCE 11 Organizations and Principles of Management What is management? Combine the function of management with other resources to achieve organizational objectives. Four functions of Management: - Planning - Organizing - Directing/Leading - Controlling Planning: YCCE 12 Planning Setting goals: long-term goals, intermediate goals, short-term goals Developing strategies: how to reach the goals? Determining resources: capital & manpower Setting standards: target, e.g. save 10 million INR. Organizing: YCCE 13 Organizing Allocating resources, assign tasks, establish procedures Preparing organization chart Recruiting, selecting, training & developing employees Matching the job with employees: effectiveness & efficiency Directing/Leading: YCCE 14 Directing/Leading Guiding & motivating Giving assignments Explaining routines Clarifying policies Providing feedback Controlling: YCCE 15 Controlling Establish standards Measuring results Monitoring performance Taking corrective action Integration of Management Functions: YCCE 16 Integration of Management Functions Every function is important 4 functions must be co-coordinated to achieve the optimum level of performance. Levels of Management: YCCE 17 Levels of Management Top management: responsible for overall performance & effectiveness, formulate strategies, set polices, CEO( Strategic Planning &Long-term goals) Middle management: implement strategies, policies, decision made by top management, Plant Manager, Division head( Tactical Planning, Intermediate goals) Levels of Management: YCCE 18 Levels of Management Supervisory (first-level): Working & supervising worker, interact with suppliers, Foreman, Section leader( Operational, Planning & Short-term goals) Managerial Skills: YCCE 19 Managerial Skills Conceptual skills: mental ability to think & see beyond the present situation, Top management Technical skills: ability to use the knowledge, tools & techniques, help employees solve work-related problems accounting, engineering, sales, First-line management Human relations skills: able to understand and interact with people, all level management Managerial Skills:
YCCE 20 Managerial Skills Decision-making skills: ability to define problems & selecting the best courses of action.
skills: efficient and productive use of time
Levels of Management: YCCE 21 Levels of Management Top Managers Middle Managers First-line/Front-line Managers Strategic Planning & Long-term goals Tactical Planning & Intermediate goals Operational Planning & Short-term goals Classical organizational theory espouses two perspectives:: Classical organizational theory espouses two perspectives: Scientific management – focusing on the management of work and workers Administrative management - addressing issues concerning how overall organization should be structured Major contributors to the Classical Organizational Theory:: Major contributors to the Classical Organizational Theory: Scientific Management: Frederick Taylor Administrative Management: Henri Fayol Luther Halsey Gulick Max Weber Frederick Taylor: Frederick Taylor Taylor is born in Pennsylvania on March 20, 1856 After studying in Europe, he plans to go to Harvard, but does not pass the entrance exams Instead Taylor works as a pattern maker at a pump manufacturing company in Philadelphia Later, he studies mechanical engineering at Stevens, finishing in just three years. Taylor identifies two people as having influenced him: : Taylor identifies two people as having influenced him: John Griffith teaches Taylor how to be an appreciative, respectful, and admirable working mechanic Lucian Sharpe impresses Taylor with his focus, concentration, and task commitment More Responsive Organization: YCCE 26 More Responsive Organization Flat organization structure instead of tall, wide span of control Departmentalization: replaced by matrix organization Decentralization rather than centralization. Evolution of Management Theory: YCCE Evolution of Management Theory This theory arose in part from the need to increase productivity. In the US especially, skilled labour was in short supply at the beginning of the 20th century. The only way to expand productivity was to raise the efficiency of workers. Therefore, Frederick Taylor, Henry L. Gantt, & Frank and Lillian Gilbreth devised the body of principles known as Scientific Management Theory. Frederick W. Taylor (1856-1915): YCCE 28 Frederick W. Taylor (1856-1915) Frederick W. Taylor rested his philosophy on four basic principles: The development of a true science of management, so that the best method for performing each task could be determined. The scientific selection of workers, so that each worker would be given responsibility for the task for which he or she was best suited. The scientific education and development of the worker. Intimate, friendly cooperation between management and labour . Frederick W. Taylor Contd..: YCCE 29 Frederick W. Taylor Contd.. He contended that the success of these principles required ‘ a complete mental revolution ” on the part of management and labour. Taylor based his management system on production-line time studies. He believed that management and labour had a common interest in increasing productivity. He also devised a compensation system called the “ differential rate system ” involving the Payment of higher wages to more efficient workers. Contributions of Scientific Management Theory: YCCE 30 Contributions of Scientific Management Theory The efficiency techniques of scientific management theory have been applied to modern assembly line & to many tasks in non-industrial organizations (e.g., fast-food service) and increased their efficiency. Limitations of Scientific Management Theory: YCCE 31 Limitations of Scientific Management Theory Workers & unions began to oppose this approach because they feared that working harder or faster would exhaust whatever work was available causing layoffs. His critics objected to the “ speed up ” conditions that placed undue pressures on employees to perform at faster & faster levels. The emphasis on productivity and by extension profitability led some managers to exploit both workers and customers. Henry L. Gantt (1861-1919): YCCE 32 Henry L. Gantt (1861-1919) “ He worked with Taylor but began to reconsider Taylor's incentive system as having too little motivational impact. ” He came up with a new idea: every worker who finished a day ’ s assigned work load Would win a 50-cent bonus. Further, the supervisor would earn a bonus for each worker who reached the daily standard, plus an extra bonus if all the workers Henry L. Gantt Contd: YCCE 33 Henry L. Gantt Contd “ He also originated a charting system for production scheduling: the “ Gantt chart ” , still in use today ” . It also formed the basis for two charting devices which were developed to assist in planning, managing and controlling complex organizations: the Critical path Method (CPM), originated by Du Pont & Program Evaluation and Review Technique (PERT), developed by the Navy. Lotus 1-2-3 is also a creative application of the Gantt Chart. The Gilbreths: Frank B. & Lillian M. Gilbreth (1868-1924 & 1878-1972): YCCE 34 The Gilbreths: Frank B. & Lillian M. Gilbreth (1868-1924 & 1878-1972) They collaborated on fatigue and motion studies and focussed on ways of promoting the individual worker ’ s welfare. To them, the ultimate aim of scientific mgmt was to help workers reach their full potential as human beings. In their conception, motion & fatigue were intertwined-every motion that was eliminated reduced fatigue. They argued that motion study would raise worker morale because of its obvious physical benefits & because it demonstrated management ’ s concern for the worker. Classical Organization Theory School Henri Fayol (1841-1925): YCCE 35 Classical Organization Theory School Henri Fayol (1841-1925) He is generally hailed as the founder of the classical management school not because he was the first to investigate managerial behaviour, but because he was the first to systematize it. Fayol’s 14 Principles of Management: YCCE 36 Fayol ’ s 14 Principles of Management Division of Labour : The most people specialize, the more efficiently they can perform their work, e.g., modern assembly line. Authority : Besides formal authority, managers musty have personal authority to compel obedience. Discipline : Members in an org. need to respect the rules & agreements that govern the org. Unity of Command : Each employee must receive instructions from only one person. Unity of Direction : Operations within the org. having the same objective should be directed by only one manager. PowerPoint Presentation: YCCE 37 S ubordination of individual interest to the common good. Remuneration: Compensation for worm done should be fair to both employees and employers. Centralization: decreasing the role of subordinates in decision making is centralization; increasing their role is decentralization. He believed that managers should retain final responsibility but at the same time give the subordinates enough authority to do their jobs properly. The problem is to find the proper degree of centralization in each case. Hierarchy: The line of authority in an org. runs in order of rank from top management to the lowest level of the enterprise. Order: Materials & people should be in the right place at the right time. PowerPoint Presentation: YCCE 38 Equity: managers should be both friendly and fair to their subordinates. Stability of Staff : A high employee turnover rate undermines the efficient functioning of an org. Initiative : Subordinates should be given the freedom to conceive and carry out their plans, even though some mistakes may result. Esprit de Corps : Promoting team spirit will give the org. a sense of unity. Max Weber (1864-1920): YCCE 39 Max Weber (1864-1920) He developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations & lines of authority. He considered the ideal organization to be a bureaucracy whose activities & objectives were rationally thought out & whose divisions of labour were explicitly spelled out. We should be careful to apply our negative connotations of the word bureaucracy to the term as Weber used it. Weber sought to improve the performance of socially important organizations by making their operations predictable and productive. Mary Parker Follett (1868-1933): YCCE 40 Mary Parker Follett (1868-1933) She introduced many new elements in the classical school in the area of human relations & organization structure. She called management “ the art of getting things done through people ” . She was a great believer in the power of the group, where individuals could combine their diverse talents into something bigger. Her holistic model of control took into account not just individuals and groups, but the effects of environmental factors also. Chester I. Barnard (1886-1961): YCCE 41 Chester I. Barnard (1886-1961) According to him, people come together in formal organizations to achieve ends they cannot accomplish working alone. An enterprise can operate efficiently & survive only when the organization ’ s goals are kept in balance with the aims & needs of the individuals working for it. His recognition of the importance & universality of the “ informal organization ” was a major contribution to management thought. He proposed concept of “ zone of indifference ” , i.e., what the employee would do without questioning the manager ’ s authority. The more activities that fell within this, the smoother & more cooperative an organization would be . The Behavioural School: YCCE 42 The Behavioural School The Human Relations Movement” It is a general term to describe the ways in which managers interact with their employees. It is effective when “ employee management ” stimulates more and better work. PowerPoint Presentation: YCCE 43 The Hawthorne experiments : The Human Relations movement grew out of a famous series of studies conducted at the Western Electric company’s Hawthorne plant near Chicago from 1924 to 1933. These studies attempted to investigate the relationship between level of lightning in the workplace& worker productivity. Four Parts of Experiment: YCCE 44 Four Parts of Experiment Illumination Experiment Relay Assembly Test Room Interviewing Programme Bank Wiring test Room The Hawthorne experiments Contd: YCCE 45 The Hawthorne experiments Contd Employees divided into two groups (test group & control group) & manipulated level of lightning. The results were ambiguous showing that something other than lighting was influencing the worker ’ s performance. In a new set of experiments, a small grp. of workers was placed in a separate room & a no. of variables were altered: wages, rest periods, were increased; performance tended to increase over time, but it also rose & fell erratically. It was inferred that workers who receive special attention will perform better simply because they received that attention, which acted as a motivator. A phenomenon labeled as the ‘ Hawthorne effect ’ . The researchers also concluded that informal work groups-the social environment of employees-have a positive influence on productivity . The Behavioral Science Approach: YCCE 46 The Behavioral Science Approach McGregor: He distinguished 2 alternate basic assumptions about people & their approach to work-…………… Theory X and Theory Y. Theory X is the traditional view of motivation which holds that work is distasteful to employees, who must be motivated by force, money or praise. The roots of this theorycan be traced to the days of scientific management & the factories based on these principles. Theory Y takes the opposite view & assumes that people are inherently motivated to work & do a good job. The Management Science School: YCCE 47 The Management Science School 1. Mixed team of specialists from relevant disciplines are called in to analyze a problem & propose a course of action to management. The team constructs a mathematical model that shows in symbolic terms all relevant factors bearing on the problem & how they are interrelated. By changing the values of the variables in the model & analyzing the different equations of the model, with a computer, the team can determine the effects of each change. It however, promotes an emphasis on only the aspects of the organization that can be captured in numbers missing the importance of people and relationships. Recent Developments in Management Theory: YCCE 48 Recent Developments in Management Theory The Systems Approach It views the organization as a unified, directed system of interrelated parts. It tells us that the activity of any segment of an organization affects in varying degrees the activity of every other segment. According to this approach, managers cannot function wholly within the confines of the traditional organization chart. They must mesh their department with the whole enterprise Some key concepts of SYSTEMS Approach:: YCCE 49 Some key concepts of SYSTEMS Approach: Subsystems : parts making up the whole system Synergy : Situation in which the whole is greater than its parts. In organizational terms, synergy means that departments that interact cooperatively are more productive than they would be if they operated in isolation. Open System : A system that interacts with its environment. A closed system : A system that does not interact with its environment. System boundary : The boundary that separates each system from its environment. It is rigid in a closed system, flexible in an open system. Flow : Components such as information, material & energy that enter leave a system. Feedback : The part of system control in which the results of actions are returned to the individual allowing work procedures to be analyzed and corrected The Contingency Approach: YCCE 50 The Contingency Approach The view that the management technique that best contributes to the attainment of organizational goals might vary in different types of situations or circumstances; also called the ‘ situational approach ’ . This approach was developed by managers, consultants & researchers who tried to apply the concepts of the major schools to real-life situations Dynamic Engagement Approach: YCCE 51 Dynamic Engagement Approach It emphasizes the intensity of modern mgmt relationships & the intensity of time pressures that govern these relationships. This term best expresses the vigorous ways today ’ s most successful managers focus on human relationships and quickly adjust to changing conditions over time. 6 different themes of mgmt theory are emerging under the umbrella of dynamic engagement. 6 different themes of mgmt theory: YCCE 52 6 different themes of mgmt theory New Organizational environments : This approach recognizes that an organization’s envt . is a complex dynamic web of people interacting with each other. Thus, managers must not only pay attention to their own concerns but also understand what is important to other managers both within their org. & at other organizations. e.g., Porter’s theory of competitive strategy . Ethics & Social Responsibility : This approach moves ethics from the fringe of management theory to the heart of it. PowerPoint Presentation: YCCE 53 Inventing & Reinventing organizations : It advocates the ways to unleash the creative potential of their employees & themselves. For e.g., Peters concept of “ liberation management ” challenges the kind of rigid organization structures that inhibit people ’ s creativity. Hammer & Champsy proposed “ reengineering the corporation ” , i.e. when an org. conducts a significant reassessment of what it is all about. Cultures & Multiculturalism : Various perspectives & values that people of different cultural backgrounds bring to their organizations are not only a fact of life but a significant source of contributions PowerPoint Presentation: Quality:, TQM should be in every manager ’ s vocabulary Globalization & Management: Acc. To this approach, managers facing the 21st century must think of themselves as global citizens. Ohmae makes this point as he describes a ‘ borderless ’ world where managers treat all customers as equidistant from their organizations