CHAPTER ONE

BASIC MANAGEMENT CONCEPT AND INDUSTRIAL

PROUDACTIVITY

1
 What is Management?

2
 Definition of management

 Management is the art of getting things

done through people
 Management is the process of getting
activities completed efficiently and
effectively with and through other people

3
 What is this little lad doing?
Do you know where he is going?
Can you see where he is going?
Do you know what could happen
if he falls in the water?
Can you really see what the
consequences are going to be?
Have you got the big picture in
mind?
With anything that one does in
life you start with the end in
mind. You decide what you want
to achieve and then you decide
how you will work towards
achieving it. This is what
management is.
4
 manage the creative tension between current
reality and Future reality

Greatness
NOW Reality Vision FUTURE

Courage

5
 So That You and Your
Followers Can Reach Our
Vision

Put Stepping Stones

in Place

Chart the Path

6
 In general "management" identifies a
special group of people whose job is to
direct the effort and activities of other
people toward common objectives.
 Simply, management gets things done
through other people by planning,
coordinating and directing the activities of
an organization
 The decisions and judgments made are
normally oriented to the needs of the
organization
7
 Why Management?

 The Industrial Revolution brought about the

emergence of large-scale business and its
need for professional managers
 Management became more important as
the developments and complexities of
technology and human relationships get
more challenging to those who perform
managerial functions

8
Shorter life-cycles for innovative technologies
•Water power •Steam •Electricity •Petrochemicals •Digital networks
•Textiles •Rail •Chemicals •Electronics •Software
•Iron •Steel •Internal-combustion •Aviation •New media
engine

1st Wave 2nd Wave 3rd Wave 4th Wave 5th Wave

1785 1845 1900 1950 1990 1999 2020

60 yrs 55 yrs 50 yrs 40 yrs 30 yrs

Source: The Economist, February 20, 1999

9
What managements strives for?
 'Management strives involving a group of
people work together in the most effective
and efficient manner to achieve stated goals
in the best and most economical way'.

10
 Functions of management
 The subject of management can be
considered a process involving certain
functions that a manager performs
1. Decision making
2. Planning
3. Organizing
4. Staffing
5. Directing

11
1. Decision making

 Decision can be defined as an act involving

mental process at a conscious level in
choosing a course of action from available
alternatives for the purpose of attaining a
desired result

12
Five steps of Decision making
1. Fact gathering process to lay a solid
foundation for understanding the situation
2. Recognition of the right problem
3. Generate as many alternatives as possible
4. Select the best alternative
5. Communicate the decision to others

13
2. Planning
Planning involves the predetermining of
the course of action to be taken in relation
to the known event. It also includes
anticipating the possibilities of future
problems that might appear
Failing to plan means planning to fail.

14
Cont’d…
 It is a systematic activity which
determines when, how and who is
going to perform a specific job. It is
rightly said “Well plan is half done”.

15
 Cont’d…
 The increased importance of planning in a
business enterprise results from various
changes in the environment like

 changes in technology,

 government policy,

 overall economic activity,

 in the nature of competition and

 in social norms and attitudes.

16
 Cont’d…

 There are different planning executed

in different level of an organization
 Strategic planning

 Tactic planning

 Operational planning

17
 Cont’d…

 In general, the planning process may

systematically be composed of five
elements:
I. Setting Primary & Intermediate Goals
II. Search for Opportunities
III. Formulation of Plans
IV. Target Setting
V. Follow-up of Plans
18
Organizing
 Organizing may be defined as the structure
and process by which a group allocates its
tasks among its members, identifies
relationships and integrates its activities
toward common objectives

19
 Cont’d…
The organizing function of management brings
together human and physical resources in an
orderly manner and arranges them in coordinated
pattern to accomplish planned objectives.
Each organizational resource (human, material,
finance etc.) represent an investment from which
the management system must get the return.
Therefore, these resources should be organized
properly for efficient and effective use of the
same.

20
 Cont’d…
A sound organization is necessary because it brings many
benefits to the management of an enterprise. Some of the
benefits are:
 Good communication between the management and
employees,
 Sound basis to evaluate the performance of individuals and
groups,
 Well defined areas of works for each employee,
 Coordination of activities of various individual, groups, etc.,
 Effective delegation and decentralization,
 Adequate and effective control,
 Difficulty in empire building in any segment of the enterprise,
and
 Stimulation of independent, creative thinking and initiative on
the part of the employees.
21
 Cont’d…
 the
steps that are important when
organizing an enterprise
 Reflection on plans and objectives,
 Establishing major tasks,
 Dividing major tasks into subtasks,
 Allocating resources and directives for
subtasks, and
 Evaluating the result of implemented
organizing strategy.

22
 Cont’d…
Reflecting
on plans
and
objectives

Evaluating
results for Establishing
organizing major tasks
strategy

Allocating
Dividing
resources
major tasks
and
into
directives
subtasks
for subtasks

23
 Staffing
Staffing deals with the workers and is worker-
oriented
This function includes the process of placing
the right person in the right organizational
position
The process of matching the people and the
jobs is done by careful preparation of
specifications necessary for positions and
raising the performance of personnel by
training and retraining of people to fit the
needs of the organizational position
24
 Controlling
 Control is the process that measures
current activities, quantitatively if possible,
and guides it toward some predetermined
goal, plan, policy, standard, norm, decision
rule and criterion or yardstick.
 The essence of control lies in checking and
correcting actions against desired results
in the planning process

25
 Cont’d…
 Controlling includes ensuring that employees
perform the work allocated to them in the
ways laid down, and with no wastage or
duplication of time, effort or materials.
 That involves much more than simply
instructing a given number of employees to
perform work; they must be supervised and
managed so that their efforts achieve the
desired results.
 This requires that they are motivated,
checked, guided, taught and encouraged.

26
 Communication
 It serves as a linkage by which the other
functions explained are tied together
 There are three types of communications in
an organization
1. Organization charts show the flow of authority and the
channels through which the vertical and downward
communication flows
2. Horizontal type whereby, managers on the same level of
an organization coordinate their activities without
referring all matters to their superior
3. The informal type
27
28
 Directing
 For the same idea, different organizations use
different terms such as
 Leading
 Executing
 Supervising
 Ordering and
 Guiding
 What ever terms are assigned to it, the idea
of directing is to put into effect the decisions,
plans and programs that have been worked
out.

29
What Is a Manager’s Responsibility
 Manager
 The individual responsible for achieving
organizational objectives through efficient and
effective utilization of resources. Participative?
 The Manager’s Resources
 Human, financial, physical, and informational
 Performance
 Means of evaluating how effectively and
efficiently managers use resources to achieve
objectives.
 Today often means “How” as well as “What”

30
What Does It Take to Be a Successful
Manager
 Management Qualities (Survey of Execs.)
 Integrity, industriousness, and the ability to get along
with people
 Management Skills
 Technical
 Human and communication (Teaming)
 Conceptual and decision-making skills
 “Systems Thinking” & “Critical Thinking”

 The Ghiselli Study(6 Traits of Manager Success –

Inverse Order)
6) Initiative, 5)self-assurance,4) decisiveness, 3) intelligence,
2) need for occupational achievement, and 1)
supervisory ability

31
Management Roles
 Role
 A set of expectations of how one will behave in a
given situation.
 Management Role Categories (Mintzberg)
 Interpersonal
 Figurehead, leader, and liaison
 Informational
 Monitor, disseminator, and spokesperson
 Decisional
 Entrepreneur, disturbance handler, resource
allocator, and negotiator

32
Ten Roles Managers Play

Managers play various roles as necessary while performing their

management functions so as to achieve organizational objectives.

33
Differences Among Managers
 The Three Levels of Management
 Top managers
 CEO, president, or vice president
 Middle managers
 Sales manager, branch manager, or department head
 First-line managers
 Crew leader, supervisor, head nurse, or office manager
 Individual Contributors (ICs)
 Non-management operative employees
 Workers in the organization who are supervised by first-
line managers.
 Professionals/Specialists/Technicians (Knowledge
Workers)

34
Types of Managers
 General Managers
 Supervise the activities of several departments.
 Functional Managers
 Supervise the activities of related tasks.
 Common functional areas:
 Marketing/Sales/Product Development
 Operations/Production/Services
Delivery
 Finance/Accounting
 Human Resources/personnel
management
 Infrastructure (IT, Real Estate, Legal)
 Project Managers
 Coordinate employees across several functional
departments to accomplish a specific task.

35
Management Skills and Functions

Planning

Controlling Organizing

Leading

36
Cont’d…

37
Personal Qualities Needed for Managerial
Success
 Some of the more important personality traits of a
successful manager are the following:
Ability to Think Clearly and Logically: A manager needs
to be able, as the result of training, to approach each
situation and problem positively and objectively,
without prejudgment or being distracted by
irrelevancies.
This requires him to think in a clear, orderly fashion and
to marshal and arrange logically in his mind all the facts
and information available to him.

38
Cont’d…
2. The Abilities to Make Decisions and to Act
Decisively: These follow on from the foregoing,
and also require a measure of self-confidence;
a belief in one's own ability to succeed in
solving problems in the right way, and in one's
own ability to deal effectively with different
situations and sets of circumstances.

39
 Cont’d…
1. Defining as accurately as possible the problem which
needs to be solved.
2. Obtaining all relevant information about the problem
3. Breaking down the problem into parts − very often the
solution to one part is obvious and leads, logically, to
the solving of other parts or the whole problem.
4. Comparing and judging the probability of success of
any possible different solutions to the same problem,
and their possible consequences on other areas.
5. Selecting the most attractive solution − making the
decision

40
 Cont’d…
 The Ability to Use Initiative: from time to time a manager
is bound to come across problems or situations which
are outside his range of experience

 In such circumstances, particularly if action is urgently

needed, the manager must not simply leave the matter
until his senior is available or wait to be told what to do,
but must initiate - that is, lead the action without waiting
to be prompted.

41
 Cont’d…
 Ability to Handle Conflict: A good manager is calm, able
to listen, is positively responsive to criticism and is able
to handle conflicts and differences in a constructive
manner.

 In order to handle conflicts well, a manager must be

confident, self-assertive, fair and dominant.

 He should be highly tolerant of stress, as conflicts

generally lead to stress and tension.

 This would require a sound mind in a sound body.

42
 Cont’d…
 Ability to Adapt Change and be Flexible: Any manager
must be able to adapt to changes and, if necessary, to
cope with changed circumstances, and ensure that his
subordinates also do so.

 Adaptability to different situations and flexibility of mind

are also necessary in the routine, day-to-day running of
a section, department or an entire enterprise.

43
 Cont’d…
 Ability to Be Emotionally Stable:

 He must be able to keep control over his own emotions

and his temper whatever may the provocation be, and
be able to concentrate his attention on the matter in
hand, thinking clearly, logically, and avoiding hasty
reactions.

44
 Cont’d…
 Stamina and Concentration: mental fitness to work long
and hard without undue stress or strain.

 Besides mental alertness, a manager needs to be able

to concentrate his mind on the matter in hand even
under the most tiring circumstances and/or when he is
under pressure

45
 Cont’d…

 Drive and Determination: A manager needs the urge

and enthusiasm to stimulate action, not only by himself,
but by other people as well.

 He also needs the determination to keep going

whatever the difficulties, adapting his actions and
decisions to overcome problems encountered, and
pressing on to a successful conclusion.

46
 Cont’d…
 Leadership: Leadership is the ability of a person to
exert a positive influence over the thoughts, behavior
and actions of others, and then to direct their thoughts,
behavior and actions towards a common goal or
objective.

47
Organization Structure
 planned organizational structure must not be
overlooked in the establishment of a new
business.
 The stages in the setting up of an effective
organizational structure are
 The activities which will be necessary to achieve the
objectives of the business must be established.
 The various related activities should be grouped
together into departments; the most logical grouping
is by 'function', that is, by type of activity:
production, marketing, finance, etc.
 The activities of a particular department will be
further divided, and grouped together into sections;

48
Cont’d…
 An organization chart should be produced to depict
the proposed organization
 Based on estimates of the volume of work, which will
be performed by each section, the number of staff
required must be determined.
Depending on the type of work to be performed and
on other factors, the numbers of supervisors, junior
and middle managers per section and department
must be given thought

49
Cont’d…
 The special knowledge or talents required by
departmental and sectional managers must be
laid down.
 The equipment necessary for the proper
functioning of each section and department
must be decided upon, and provision made for
its positioning when considering the layout of
the accommodation for each unit.
 To ensure effective coordination of all parts of
the enterprise, effective procedures and
systems of communication must be devised and
installed.
50
Types of Organizational Structure
 There are four different types of organizations,
namely

I. line,

II. functional,

III. line and staff, and

IV. matrix organization.

51
I. Line Organization
 sometimes called 'military organization',
because it is how the armed forces are
organized.

 there is a clear 'line' of responsibility and

authority right through the management
structure from the board to the lowest level of
supervision, and below.

52
Cont’d…
 Line organization is simple and direct and is easy to
understand.
• The 'chain of command‘ is direct and so decisions
can usually be made quickly and implemented
rapidly, because of the directness of the control, the
coordination of the activities of all those employed
in a department is simplified.
 The position (and status) of all the different people
working in a department can be easily seen, and so
the extent of their responsibilities, authority and
duties can, be clearly defined and understood,
making disputes less likely.

53
Cont’d…

54
II. Functional Manager
 it is the function (the type of activity), which
determines the areas of authority and
responsibility.

 An expert or specialist is placed in charge of

each function, and will have direct control of
that function wherever it is undertaken within
the enterprise.

55
Cont’d…
 As the functional specialists are not involved in the
day-to-day running of the enterprise (which is the
domain of the line managers) they are free to the
concentrate on their particular functions that
produce many benefits for the enterprise.
 However, this form of organization makes control
difficult as there are no clear lines of authority and it
is similarly difficult to establish responsibility when
things do not go right.
 Furthermore, staff as well as supervisors and junior
managers become confused at being subject to the
authority of more than one superior.

56
Cont’d…

57
III. Line and Staff Organization
 In such a structure, the line managers control
the primary functions, such as marketing and
production, which are directly concerned with
achieving the objectives of the business;

 whilst the staff managers are generally involved

with secondary functions which assist the
smooth and efficient running of the primary
functions.
58
 Cont’d…
MANAGING DIRECTOR
DIRECTOR

L WORKS L SALES L ACCOUNTS S PERSONNEL

MANAGER MANAGER MANAGER MANAGER

L L
L SECTION SECTION MANAGERS SECTION
MANAGERS SUPERVISORS & MANAGERS
SUPERVISORS & SALESMEN SUPERVISORS &
OPERATORS CLERKS

S EMPLOYMENT S TRAINING
OFFICER OFFICER
L – Line relationship: S – staff relationship
Responsibility and authority shown by
. SUPERVISORS SUPERVISOR
Staff. Advisory relationship shown by ------------ & CLERKS S
--- & CLERKS
59
IV. Matrix Organization (Project Organization)
 These are temporary organizational structures
formed for specific projects for a specific period
of time and are dismantled, once the required
goal is achieved.
 A typical example for this kind of organizational
structure can be the goal to design
 The specialists are selected primarily on the
basis of task-related skills and expertise rather
than decision making experience or planning
ability.

60
 Cont’d…
 These structures are very useful when:
 The project is clearly defined in terms of objectives
to be achieved and the target date for completion of
the project.
 The project must be separate and unique and not be
a part of daily work routine of the organization.
 There must be different types of activities which
require skills and specialization and must be
coordinated to achieve the desired goal.
 The project must be temporary in nature and not
extended into other related projects.

61
 Cont’d…
 This kind of organization occurs frequently in:
 Construction ( e.g. building a bridge)

 Aerospace engineering ( i.e. designing and

launching weather satellite)
 Marketing( e.g. advertising company for new
product)

 Installation of an electronic data processing

system, etc.
62
Cont’d…
General
Manager

Labor Research Finance Personnel Technical

Services

Project A Manager

Project B Manager

Project C Manager

63
Cont’d…
 In matrix organization, it is possible for the
individual employee to have two managers.
However, proponents of matrix organization
believe that it provides an agency with the
flexibility to work on critical projects.

 Matrix organization also brings together the

specialized talent that is often necessary to
complete a project
64
Cont’d…
 Other advantages of matrix organization:
 Decision making is decentralized to a level where
information is processed properly and relevant
knowledge is applied.

 Extensive communications networks help to process

large amount of information.

 With decisions delegated to appropriate levels,

higher management levels are not over loaded with
operational decisions.

65
Cont’d…
 Resource utilization is efficient, because key
resources are shared across several important
programs or products at the same time.

 Employee learns the collaborative skills needed

to function in an environment characterized by
frequent meeting and more informal
interactions.

66
Cont’d…
 disadvantages include:
 Reporting for two supervisors which creates confusion

 The design encourages managers who share

subordinate to jockey for power.

 The mistaken belief can arise that matrix management

is the same thing as group decision making − in other
words every one must be consulted for every decision.

 Too much democracy can lead to not enough action.

67
 Productivity

© 2006 Prentice Hall, Inc. 12 – 68

 The Basics of Productivity
 In most businesses, competition for the available
market, forces the management of each enterprise
to seek competitive advantage through the use of:
 product improvements
 lower costs
 lower selling prices for the same or better quality and
 better service to customers

 Productivity is defined as the ratio of value of

output to the value of input

© 2006 Prentice Hall, Inc. 12 – 69

 Cont’d…

value of output
Productivi ty =
value of input

© 2006 Prentice Hall, Inc. 12 – 70

 Cont’d…

 An increase in production does not

necessarily by itself indicate an
increase in productivity.
 If the input of resources goes up in
direct proportion to the increase in
output the productivity remains the
same
© 2006 Prentice Hall, Inc. 12 – 71
 Cont’d…

 If input increases by a greater

percentage than output, higher
products will be achieved at the
expense of reduction in productivity

© 2006 Prentice Hall, Inc. 12 – 72

 Cont’d…

 In short higher productivity means to

produce more with the same
expenditure, or with a minimum
increase in expense, or the same
amount is produced at less cost in
terms of resources

© 2006 Prentice Hall, Inc. 12 – 73

 Cont’d…

 The outputs may be products or

services and the inputs or
resources may be land, materials,
plant machineries, tools and a
series of man

© 2006 Prentice Hall, Inc. 12 – 74

 Cont’d…

 Land Productivity: Better seed,

fertilizer and better method of
cultivation may increase the yield
from two quintals to three quintals.
Hence land productivity has
increased by 50 percent.
© 2006 Prentice Hall, Inc. 12 – 75
 Cont’d…
• Material Productivity: If a skillful worker is
able to produce 300 formworks from 400
pieces of 2m  1m sheet metal, while an
unskillful worker can only produce 250 out
of the same material, then with the skillful
worker the material was used with 20
percent greater productivity
© 2006 Prentice Hall, Inc. 12 – 76
 Cont’d…
 Machine Productivity: If a machine tool
has been producing 100 pieces per a
working day, and through the use of
improved cutting tool and/or proper
maintenance procedure its output in
the same period is increased to 120
pieces, the productivity of that machine
has been increased by 20 percent.
© 2006 Prentice Hall, Inc. 12 – 77
 Cont’d…
 Productivity of Man: If a shoe maker has
been producing 30 pieces of leather parts
per hour, and if improved methods of work
enable him to produce 40 pieces per hour the
productivity of that man has increased by
33.3 percent

© 2006 Prentice Hall, Inc. 12 – 78

 Cont’d…
 To sum up, a low level of productivity
implies a low growth of economy. A low
growth of economy meant, low income
leading to low standard of living and a
low level of savings, resulting in low level
of investment and low productivity

© 2006 Prentice Hall, Inc. 12 – 79

 Global

Higher Higher Higher International

Quality productivity competitiveness
multinational

Export

© 2006 Prentice Hall, Inc. 12 – 80

 Standard of living

Economic Growth

Productivity Growth + Employment

Growth

TFP Growth + Capital Intensity

Growth

© 2006 Prentice Hall, Inc. 12 – 81

 Productivity Improvement
 Productivity is affected by many external
and internal factors. Some of the external
factors, influencing productivity to mention
are:
 the national and international policies
 infrastructure supports
 cultural practices
 the availability of technology and natural
resources
 organizational policies
 climate
© 2006 Prentice Hall, Inc.
 incentives and information 12 – 82
 Cont’d…
Examples of internal factors that are
identified to as hindering the rise of
productivity are:
 unsuitable personnel policies leading to a low
level of satisfaction and involvement;
 poor maintenance system and low level of
maintenance awareness;
 improper selection and training of personnel;

© 2006 Prentice Hall, Inc. 12 – 83

 Cont’d…
 inappropriate choice of design,
 tools, material and equipment;
 undefined standardization and quality policies;
 inadequate plant layout and materials handling
systems;
 poor planning, controlling and communication
systems;
 unsafe and unhealthy working environment

© 2006 Prentice Hall, Inc. 12 – 84

 Productivity Improvement
Strategy
A. Short term Strategy

• The first strategy is improving organizational

planning and control, to implement planned
maintenance of machinery and effective
production system in plants would show an
increase in machine productivity and
reduction in maintenance cost.

© 2006 Prentice Hall, Inc. 12 – 85

 Cont’d…

– The second action is increasing

manpower efficiency and effectiveness
at all levels. Effectiveness and efficiency
are the main tools of productivity.

© 2006 Prentice Hall, Inc. 12 – 86

 Cont’d…

– Effectiveness is a function of decision

making resulting in a setting up of aims,
goals, objectives and plans.

– Efficiency is concerned with how well

the assigned task, as set out in the
objectives, is being carried out.
© 2006 Prentice Hall, Inc. 12 – 87
 Cont’d…

• To be able to increase manpower

efficiency and effectiveness at all
levels of an organization what is
required is motivation, training and
education. This method has proved
itself successful in Japan.
© 2006 Prentice Hall, Inc. 12 – 88
 Cont’d…
• The third short term line of attack is
improving operation methods. The
techniques of method study involve
breaking a process into detailed
components.
• The study may result in elimination
of an activity, combination of several
activities, change of sequence of
activities, shortening duration of
activities etc.
© 2006 Prentice Hall, Inc. 12 – 89
 Cont’d…
• As Frederik Taylor said "Most of us
can do three or four times as much as
we ordinarily do without lengthening
working hours or even driving
ourselves to exhaustion by the day's
end".
• In fact, to achieve this, effective
implementation of method
engineering is required.
© 2006 Prentice Hall, Inc. 12 – 90
 Cont’d…
B. Medium Term Strategy
• At this stage the firm may require capital
to simplify and improve the products,
and reduce variety. The analysis consists
of common sense questions to come up
with effective solutions like substitution
of alternative materials, elimination of
parts where special designs have been
specified, redesign, etc.
© 2006 Prentice Hall, Inc. 12 – 91
 Cont’d…
C. Long Term Strategy
• Properly selected new machineries,
well organized departments and
proper layout will undoubtedly
contribute to an increase in
productivity.
• Furthermore, research and
development is the backbone for
productivity increment.
© 2006 Prentice Hall, Inc. 12 – 92
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Productivity improvement techniques

© 2006 Prentice Hall, Inc. 12 – 93
 Functions of an Industrial
Enterprise
 Manufacturing functions
 Engineering Functions
 Control Functions

 Support Functions

© 2006 Prentice Hall, Inc. 12 – 94

 Manufacturing Function
 Receiving: has the responsibility for
accepting raw material from the
carrier, presenting for inspection,
and getting it to the plant
 Warehousing (or storing): has the
responsibility for storing raw material
until needed for production, and
storing finished goods until ready to
be shipped to the customers.
© 2006 Prentice Hall, Inc. 12 – 95
 Cont’d…
 Transportation: has the responsibility for
moving all types of materials within the
plant area and from the suppliers.
 Production: has the responsibility for
transforming the raw material into an
acceptable and economical finished
product.
 Shipping: has the responsibility for
packing and delivering the finished
goods to customers.
© 2006 Prentice Hall, Inc. 12 – 96
 Engineering Function
 Product Design: has the responsibility for
the development of new and salable
products and preparation of product
description, product drawings and product
specifications.
 Process Design: has the responsibility for
the development of efficient processes for
the manufacture of the products developed
by the product design unit.
© 2006 Prentice Hall, Inc. 12 – 97
 Cont’d…
 Plant Engineering: has the responsibility
for the design and installation of new
facilities and ensuring that proper working
conditions are maintained.
 Cost Estimation: has the responsibility for
determining costs involved on product
manufacture. This includes design and
development cost of the product prior to
manufacture.
© 2006 Prentice Hall, Inc. 12 – 98
 Control Function
 Production Control: has the responsibility
for establishing forecasts, production
plans, inventory levels and product
distribution.

© 2006 Prentice Hall, Inc. 12 – 99

 Control Function
 Quality control: has the responsibility for
establishing and maintaining the
necessary control of quality for raw
materials, intermediate products, and
finished goods. It is also responsible for
the inspection of raw materials and
finished products for conformity to quality
specifications.

© 2006 Prentice Hall, Inc. 12 – 100

 Control Function
 Cost Control: has the responsibility for
determining and reporting the design cost,
the manufacturing cost and comparing
these costs with the amounts allocated in
the budgets.

© 2006 Prentice Hall, Inc. 12 – 101

 Support Function
 Purchasing: has the responsibility of
buying the necessary materials of the
proper quality and quantity at the most
favorable price and securing deliveries
on time according to schedules
established.
 Sales: has the responsibility for selling
the company's product and for liaison
after material has been delivered
© 2006 Prentice Hall, Inc. 12 – 102
 Cont’d…
 Maintenance: has the responsibility for
the execution of preventive maintenance,
repair of old equipment, installation of
new equipment and provision of
facilities.
 Personnel: has the responsibility for
hiring, administering and training
workers; and for the termination of
employments.
© 2006 Prentice Hall, Inc. 12 – 103