Chapter1 - InIndustrial Management
Chapter1 - InIndustrial Management
&
Engineering Economy
Dr.Srikanth.K
College Of Engineering & Technology
Department of Mechanical Engineering
Mizan – Tepi University
Out line of presentation
Chapter-I
Basic Management Concepts and Industrial Organization:
Ø Introduction to management;
Ø Functions of management;
Ø Organizational structure;
Ø Basics of productivity.
Management- Definition
1
Management is the process of achieving
goals and objectives effectively and efficiently
through and with the people.
2
"Management is a process of designing
and maintaining an environment in which
individuals work together in groups to
effectively and efficiently accomplish selected
aims“.
Management- Definition
3
ØPlanning involves setting the ‘right’ goals and then choosing the
‘right’ means for attaining those goals
2. Establishing objectives
Plan
Standing
Kinds of Enterprise
or Single –use plane Time plans
plane
Repeated use planes
Organizing
combining the human power with other resources to give desired output
i) Allotment of work
Types of Organisation
1. Line or scalar organisation 2. Functional organisation 3. Line and staff
organisation
Staffing
3. Inventory control
4. Quality control
5. Production control
6. Network techniques
Coordinating
Objectives of coordination:
Following objectives are sough through coordination's:
i) Reconciliation of goals
ii) Economy and efficiency
iii) Good personal relations
iv) Helps in keeping high moral of employees
Techniques of effective coordination
1. Clearly defined goals 2. Clear lines of authority and responsibility
3. cooperation 4. Effective leadership and supervision
The following are the key of functions of management
Selection of injection machine
Functions of management
(Fayol’s 6 Functions of Management)
ØFor attainment of objectives, every organization has a group
of person for managing its affairs.
ØIt is concerned with productivity, effectiveness and efficiency
by performing various managerial functions.
ØHenry Fayol, the father of principles of management
described various functions of management as :
1.Forecasting: The first function is to analyze the present and
past information to predict the future and plan accordingly.
2.Planning: The top management plans a suitable course of
action, based on the business forecast.
Cont...
3.Organizing: The management next needs to systematically arrange the resources, i.e.,
raw material, capital and human resource as per the planning.
4.Staffing: Staffing, now-a-days, also termed as human resources management is defined
as filling and keeping filled positions in the organisation structure.
Staffing function involves recruiting selecting, placing, promoting, appraising, carrier
planning, training etc.
5.Coordinating: In this function, the management should ensure proper synchronization
among all the departments. For this purpose, weekly meetings can be held with the
managers of all the departments.
6.Controlling: The managers need to evaluate the performance of the personnel by
establishing the standards, comparing the actual performance with the desired one and
implement the corrective measures accordingly.
14 Principles of Henri Fayol in management
1. Division of Labor
2. Authority & Responsibility
3. Unity of Command
4. Unity of Direction
5. Equity
6. Order
7. Discipline
8. Initiative
9. Remuneration
10. Stability of Tenure
11. Scalar Chain
12. Sub-ordination of Individual Interest to common goal
13. Espirit De’ Corps
14. Centralization
14 Principles of Henri Fayol in management
1. Division of Labor
Work of all kinds must be divided & subdivided and allotted
to various persons according to their expertise in a particular
area.
2. Authority & Responsibility
Authority refers to the right of superiors to get exactness
(Accuracy) from their sub-ordinates. Responsibility means
obligation (Duty) for the performance of the job assigned.
Note that responsibility arises wherever authority is
exercised.
3. Unity of Command
A sub-ordinate should receive orders and be accountable to
one and only one boss at a time. He should not receive
instructions from more than one person
14 Principles of Henri Fayol
4. Unity of Direction
People engaged in the same kind of business or same
kind of activities must have the same objectives in a
single plan. Without unity of direction, unity of action
cannot be achieved.
5. Equity
Equity means combination of fairness, kindness &
justice. The employees should be treated with
kindness & equity if devotion is expected of them.
6. Order
This principle is concerned with proper & systematic
arrangement of things and people. Arrangement of
things is called material order and placement of
people is called social order.
14 Principles of Henri Fayol
7. Discipline
Discipline means sincerity, obedience, respect of
authority & observance of rules and regulations of
the enterprise. Subordinate should respect their
superiors and obey their orders.
8. Initiative
Initiative means eagerness to initiate actions
without being asked to do so. Management should
provide opportunity to its employees to suggest
ideas, experiences & new method of work.
9. Remuneration
Remuneration to be paid to the workers should be
fair, reasonable, satisfactory & rewarding of the
efforts. It should accord satisfaction to both
employer and the employees
14 Principles of Henri Fayol
10. Stability of Tenure
Employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be
fixed.
11. Scalar Chain
Scalar chain is the chain of superiors ranging from the ultimate
authority to the lowest. Communications should follow this
chain. However, if following the chain creates delays, cross-
communications can be allowed if agreed to by all parties and
superiors are kept informed.
12. Sub-ordination of Individual Interest to common goal
An organization is much bigger than the individual it
constitutes therefore interest of the undertaking should prevail
(Hold) in all circumstances. The interests of any one employee
or group of employees should not take precedence (Priority)
over the interests of the organization as a whole.
14 Principles of Henri Fayol
13. Espirit De’ Corps
It refers to team spirit i.e. harmony in the work
groups and mutual understanding among the
members. Espirit De’ Corps inspires workers to
work harder.
14. Centralization
Centralization refers to the degree to which
subordinates are involved in decision making.
Whether decision making is centralized (to
management) or decentralized (to subordinates)
is a question of proper proportion.
T h e ta s k i s to f i n d t h e o p t i m u m d e g re e o f
centralization for each situation.
Levels of management
1. Top Level:
Top management sets the mission and goals, develops policies, evaluates the overall
performance of various departments, responsible for the business as a whole and is
concerned mainly with long-term planning
2. Middle Level:
Middle level management develops departmental goals, executes the policies, plans
and strategies determined by top management, develops medium- term plans and
supervises and coordinate lower-level managers’ activities
3. Lower (Supervisory, frontline) Level:
Lower level management takes charge of day-to-day operations, is involved in
preparing detailed short-range plans, is responsible for smaller segments of the
business, executes plans of middle management, guides staff in their own subsections
and keep close control over their activities
Levels of management
Why Study Management?
Universality of Management
– The reality that management is needed
• in all types and sizes of organizations
• at all organizational levels
• in all organizational areas
• in all organizations, regardless of location
Universal Need for Management
Important of management
A scientific management is most essential as it fulfills
the following necessities:
ØIt maintains discipline by keeping proper control
ØIt distributes the work and machine among the
workers to get maximum output
ØIt keeps co-ordinations among the staff
ØIt improves efficiencies
ØIt suggests new idea and improvements
ØIt develops means of marketing and publicity
Areas of Management
• Finance
• Production
• Operations
• Human Resources
• Marketing
• Administration
Areas of Management
Financial Management –
Focus on obtaining money necessary
for the successful operations and using
funds to further organizational goals
Marketing Management –
Responsible for planning, pricing, and
promoting products and making them
available to customers
Manager
Ø A manager is someone whose primary
In short it is:
In short it is:
Or in short:
In short it is:
• T h e a b i l i t i e s o f exc h a n g i n g i d e a s a n d
information effectively. To understand others
and let others understand comprehensively.
Leadership skills
effort or conflict.
ORGANIZATIONAL RELATIONSHIP
Organizational Structure
Tall Flat
Or or
Ø More cash flows mean more opportunity for the company to expand and
grow.
1. A company produces 160 kg of plastic moulded parts of acceptable quality by consuming
200 kg of raw materials for a particular period. For the next period, the output is doubled
(320 kg) by consuming 420 kg of raw material and for the third period, the output is
increased to 400 kg by consuming 400 kg of raw material.
Comments: From the above illustration, it is clear that, for second period, though production
has doubled, productivity has decreased from 80% to 76%, for third, period production is
increased by 150% and correspondingly productivity increased from 80% to 100%.
Thus, Increase in production may or may not increase Productivity.
RODUCTIVITY IMPROVEMENT TECHNIQUES
The basic productivity improvement techniques are represented in the Fig.