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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