Note for Industrial Management - IM By Rakesh Ravi

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JNTU ANANTAPUR (III –II) INDUSTRIAL MANAGEMENT UNIT I Concepts of Management and Organization – Functions of Management – Evolution of Management Thought: Taylor’s Scientific Management, Fayol’s Principles of Management, Douglas McGregor’s Theory X and Theory Y, Mayo’s Hawthorne Experiments, Hertzberg’s Two Factor Theory of Motivation, Maslow’s Hierarchy of Human Needs – Systems Approach to Management. Functions of Management: Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status. Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Coordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling. For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others. Department of Mechanical Engineering 1

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JNTU ANANTAPUR (III –II) INDUSTRIAL MANAGEMENT 1. Planning It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc. 2. Organizing It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves: • Identification of activities. • Classification of grouping of activities. • Assignment of duties. • Delegation of authority and creation of responsibility. • Coordinating authority and responsibility relationships. 3. Staffing It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves: • • • • • Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place). Recruitment, Selection & Placement. Training & Development. Remuneration. Performance Appraisal. Department of Mechanical Engineering 2

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JNTU ANANTAPUR (III –II) INDUSTRIAL MANAGEMENT • Promotions & Transfer. 4. Directing It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating subordinate for the achievement of organizational goals. Direction has following elements: • • • • Supervision Motivation Leadership Communication Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers. Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose. Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction. Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding. 5. Controlling It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps: a. Establishment of standard performance. b. Measurement of actual performance. Department of Mechanical Engineering 3

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JNTU ANANTAPUR (III –II) INDUSTRIAL MANAGEMENT c. Comparison of actual performance with the standards and finding out deviation if any. d. Corrective action. Scientific management concept Scientific management concept is one of the principles of management and is also known as classical theory. This principle is propounded by Fredrick Winslow Taylor (F.W Taylor) – the father of management. He was born in USA in 1856. He joined Midvale steel company where he worked as a machine shop worker for two years as gang boss for some years and as chief engineer at the age of 28.he also joined Bethlehem steel company where he served for a long time. Later he devoted his time to develop the concept of scientific management. He noticed that there were much disorder and wastage of human as well as other resources at work place. The managers and staffs had no concept about systematic and efficient performance of task. And all were following traditional ways of doing work. So he tried to remove these problems through the development of new concept. Thus the scientific management concept was developed. Contributions of F.W Taylor While working in Midvale Company as a manager Taylor observed that employees were not performing as per their capacity of productivity. And he considered that this condition was occurring because of no care towards the waste. Taylor worked towards the experiments at his work place to increase the worker’s efficiency so that maximum output could be achieved by utilizing effort at maximum level. 1. Scientific task setting:- Taylor observed that the management does not know exactly the works – pieces of work- volume of works- which are to be performed by the workers during a fixed period of time- which is called working day. In a working day how much work is to be done by a worker but be fixed by a manager and the task should be set every day. The process of task setting requires scientific technique. To make a worker do a quantity of work in a working day is called scientific task setting 2. Differential payment system:- under this system, a worker received the piece rate benefit which will attract the workers to work more for more amount of wages and more incentives would be created to raise the standardization of output to promote the workers to produce more and perform more task than before and utilize waste time to earn more wages. 3. Reorganization of supervision:- concepts of separation of planning and doing and functional foremanship were developed. Taylor opines that the workers should only emphasize in planning or in doing. There should be 8 foreman in which 4 are for planning and 4for doing. For planning they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian. And for doing they were speed boss, gang boss, repair boss and inspector. Department of Mechanical Engineering 4