Industrial Management

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.
• According to Harold Koontz, “Management
is an art of getting things done through and
with the people in formally organized
groups in a effective and efficient way. It is
an art of creating an environment in which
people can perform and individuals and can
co-operate towards attainment of group goals”.
According to F.W. Taylor, “Management is an
art of knowing what to do, when to do and see
that it is done in the best and cheapest way”.
• Industrial Management :
The branch of engineering that deals with the creation
and management of systems that integrate people ,
materials and other resources in productive ways
effectively and efficiently.
 Top Level of Management
• It consists of board of directors, chief executive or managing
director. The top management is the ultimate source of authority.
It devotes more time on planning and coordinating functions.
• lays down the objectives and broad policies of the
enterprise.
• It issues necessary instructions for preparation of
department budgets, procedures, schedules etc.
• It appoints the executive for middle level.
• It controls & coordinates the activities of all the
departments.
• It is also responsible for maintaining a contact with the
outside world.
 Middle Level of Management
• They execute the plans of the organization in accordance
with the policies and directives of the top management.
• They make plans for the sub-units of the organization.
• They participate in employment & training of lower level
management.
• They are responsible for coordinating the activities within
the division or department.
• It also sends important reports and other important data to
top level management.
• They evaluate performance of junior managers.
• They are also responsible for inspiring lower level
managers towards better performance.
 Lower Level of Management
also known as supervisory / operative level of management.
– Assigning of jobs and tasks to various workers.
– They guide and instruct workers for day to day activities.
– They are responsible for the quality as well as quantity of
production.
– They communicate workers problems, suggestions, and
recommendatory appeals etc. to the higher level and
higher level goals and objectives to the workers.
– They help to solve the grievances of the workers.
– They are responsible for providing training to the workers.
– They prepare periodical reports about the performance of
the workers and ensure discipline in the enterprise.
– They motivate workers.
 Functions of a Management
• According to Henry Fayol, “To manage is to forecast
and plan, to organize, to command, & to control”.
• But the most widely accepted 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.
Types of Management Skills
1. Technical Skills
Technical skills involve skills that give the managers the ability
and the knowledge to use a variety of techniques to achieve
their objectives. These skills not only involve operating
machines and software, production tools, and pieces of
equipment but also the skills needed to boost sales, design
different types of products and services, and market the
services and the products.
2. Conceptual Skills
These involve the skills managers present in terms of the knowledge
and ability for abstract thinking and formulating ideas. The
manager is able to see an entire concept, analyze and diagnose a
problem, and find creative solutions. This helps the manager to
effectively predict hurdles their department or the business as a
whole may face.
3. Human or Interpersonal Skills
The human or the interpersonal skills are the
skills that present the managers’ ability to
interact, work or relate effectively with people.
These skills enable the managers to make use
of human potential in the company and
motivate the employees for better results.
• 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.
• Planning is one of the four major functions of
management. In doing so, a manager can be
certain that he or she is working toward some
organization goal.
• Strategic plans are designed with the entire
organization in mind and begin with an
organization's mission. Top-level managers,
such as CEOs or presidents, will design and
execute strategic plans to paint a picture of the
desired future and long-term goals of the
organization. Essentially, strategic plans look
ahead to where the organization wants to be in
three, five, even ten years.
• Tactical plans support strategic plans by
translating them into specific plans relevant to a
distinct area of the organization. Tactical plans
are concerned with the responsibility and
functionality of lower-level departments to fulfill
their parts of the strategic plan.
• Operational plans are the plans that are made
by frontline, or low-level, managers. All
operational plans are focused on the specific
procedures and processes that occur within the
lowest levels of the organization. Managers must
plan the routine tasks of the department using a
high level of detail.
• contingency plans are the backup plans that
can be applied by the managers in case the
actual plans are fail because of some reasons.
 Planning Process
To the translation of an idea into action by reaching to the state of
establishing of sequences of activities.
1. Perception of Opportunities
Perception of opportunities includes a look at possible
opportunities and the ability to see them clearly and
completely. This provides an opportunity to set the objectives
in real sense because the organization tries to relate itself with
the environment. In doing so, it takes the advantages of
opportunities and avoids threats.
2. Establishing Objectives
At this stage, major organizational and unit objectives are set.
Objectives specify the results expected and indicate the end
points of what is to be done. The organizational objectives
should be specified in all those areas which are important for
organization in achieving its objectives.
3. Planning Premises
After determination of organizational goals, the next
step is establishing planning premises, that is, the
conditions under which planning activities will be
undertaken. Thus, planning premises are
a) External and Internal
External premises include total factors in task
environment like political, social, technological,
competitors’ plans and actions, government policies,
etc. Internal factors include organization’s policies,
resources of various types, and the ability of the
organization to withstand the environmental pressure.
The plans are formulated in the light of both external
and internal factors.
• B) Controllable premises are within the control
of a business enterprise, such as, men, money,
materials, policies, procedures, programmes etc.
• Semi-controllable premises are those which can
be partially controlled by a business enterprise
like, labour position in the market, prices of the
product, market share of the company etc.
• Non-controllable premises lie beyond the control
of the business enterprise. Wars, natural calamities
and external environmental factors (economic
policies, taxations laws, political climate etc.) are
the non-controllable premises. These premises are
usually external to the business.
4. Identification of Alternatives
• Based on the organizational objectives and planning premises,
various alternatives can be identified. The concept of various
alternatives suggests that a particular objective can be achieved
through various actions. For example, if an organization has
set its objective to grow further, it can be achieved in several
ways like expanding in the same field of business or product
line, diversifying in other areas, joining hands with other
organizations, or taking over another organization, and so on.
5. Evaluation of Alternatives
• Various alternatives which are considered feasible in terms of
preliminary criteria” may be taken for detailed evaluation. At
this stage, an attempt is made to evaluate how each alternative
contributes to the organisational objectives in the light of its
resources and constraints.
6. Choice of Alternative
• After the evaluation of various alternatives the fit one is selected.
Sometimes evaluation shows that more than one alternative is
equally good. In such a case, a planner may choose more than one
alternative.
7. Formulation of Supporting
• After formulating the basic plan, various plans are derived so as to
support the main one plan. In an organization there can be various
derivative plans like planning for buying equipments, buying raw
materials, recruiting and training personnel, developing new product,
etc. These derivative plans are formulated out of the main plan and,
therefore, they support it.
8. Establishing Sequence of Activities
• After formulating basic and derivative plans, the sequence of
activities is determined so that plans are put into action. Based on
plans at various levels, it can be decided who will do what and at
what time. Budgets for various periods can be prepared to give plan
• Organizing: It is the process of bringing
together physical, financial and human resources
and developing productive relationship amongst
them for achievement of organizational goals. To
organize a business it 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.
• Concepts of Organizational Structure
Organizational structure is a system used to define
a hierarchy within an organization. It identifies
each job, its function and where it reports to
within the organization.
Functional Structures
• Different functions such as marketing, finance,
human resources and I.T. ,Production etc. Each
have their own department and each department
focuses exclusively on that function and may
fixate on its own function, its own budget and its
own goals.
Divisional Structure
• Divisions are mini-companies built around particular
products or regions. A car company could have one
division for SUVs, one for luxury cars, and another for
economy vehicles, for example.
Process Structure
• The process structure divides up the organization around
processes, such as research, manufacturing and sales.
Unlike a purely functional structure, a process-based
organization considers how the different processes relate
to each other and the customer. The sales process
doesn't begin until the manufacturing process produces
something to sell; manufacturing, in turn, waits on
research and development to create the product.
Matrix Structure
• The third main type of organizational structure, called the
matrix structure, is a hybrid of divisional and functional
structure. In other words, employees have dual reporting
relationships - generally to both a functional manager and a
product manager.
• Advantages
• Resources can be used efficiently, since experts and
equipment can be shared across projects.
• Products and projects are formally coordinated across
functional departments.
• Information flows both across and up through the
organization.
• Employees are in contact with many people, which helps
with sharing of information and can speed the decision
process.
• Responsibility and Accountability
• The terms responsibility and accountability are often
used interchangeably by the people, due to some
similarities like the flow of both of these two, is from
bottom to top. Although, they are different in the sense
that, in the case of responsibility, a person does what
he/she is asked to do. On the other hand,
in accountability, a person agrees to do, what he/she
is supposed to do.
• Responsibility can be shared. You can work with a
team of people to divide responsibilities. On the other
hand, accountability is something that can be specific
to an individual depending on their skill set, role, or
strengths.
• Responsibility is task-oriented. Every person on a team may
be responsible for a given task that is required to complete a
massive project. Accountability is what happens after a
situation has occurred. It is how you respond and take
ownership over the results. Even during the most uncertain
times, true leaders hold themselves accountable for the
results.
• Responsibility focuses on defined roles, job descriptions,
and processes that must be in place to achieve a goal. On the
contrary, accountability is committed to the successful
completion of tasks assigned to you and being willing to
take responsibility for everything that happens as a result of
the actions that were taken.
• Thus Accountability is related to the effective and influential
leader in the workplace.
Understanding the relationship between authority, responsibility and accountability

• There is a definite relationship between authority,

responsibility and accountability. Without a clear
understanding of this relationship, effective functional
management, with clear lines of reporting and
communication, can not be achieved. Authority requires
the ability to give orders properly. Responsibility
requires the ability to follow through, and
accountability ensures that the assigned tasks are
carried out properly. Authority and responsibility must
never be dual, shared or overlapping. One person, and only
one person, is responsible for the successful completion of
every assignment. However, when more than one person
shares the authority and responsibility for something,
neither can be held accountable for what might go wrong.
• 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 .
• Principles of direction
1. Principle of harmony of objectives: every organization set
the objectives and these objectives are to be fulfilled with the
help of people working in the organization. Therefore
managers must try to bring harmony between individual and
organizational goals
2. Unity of command: The individual who works in the
organization get direction from his/her superior. The
subordinates must get direction from only one superior to
reduce conflict and confusion which is called unity of
command.
3. Direct supervision: When superior direct the subordinates
with face to face communication it is known as direct
supervision. It helps to increase the morale of employees and
it helps to develop quick feedback and necessary information.
4. Appropriate leadership style: proper leadership means the
skill of leading that depends upon the characteristics of
leader, features of subordinates and the situation. It is the
process of influencing human behavior in achieving
organizational goals without dissatisfaction of any employees
5. Maximum individual contribution: The employees’
capacity should be used fully with effective direction by
encouragement not irritation with proper design direction
style.
6.Effective communication: without effective communication,
direction is not possible. Mainly, communication may be
downward or upward in an organization. Downward
communication carries the order, ideas, instruction to the
subordinates and upward communication carries the order,
ideas, and instruction from the subordinates.
7. Effective control: without effective control organization can’t
be operated. Effective control helps to coordinate and supervise
the activities and other mechanism.
8. Effective motivation: Motivation is the act of inspiring and
encouraging the people to do work. Employees must be
motivated to achieve the goals. Without motivation , direction
cannot be complete
9. Flow of information: information is most important asset in
any organization. When information is blocked, then there can
be failure. On the other hand, information is useful to issue the
order, ideas, and instruction.
10. Follow- up: direction is a continuous managerial process. It
involves constant and continuous supervision, counseling,
advice, instructions etc in the employees’ activities. Merely
issuing orders is not sufficient but management should find out
whether the subordinate is working or not.
 A leader sets a clear vision for the organization, motivates
employees, guides employees through the work process
and builds morale. Leadership- Defined as a process by
which manager guides and influences the work of
subordinates in desired direction
• Effective leaders have a style or a combination of
multiple styles that make them successful in guiding and
inspiring employees.
• Authoritarian leadership: This style, sometimes called
autocratic (do what I tell you), is used when leaders tell
their followers what they want to do and how they want it
accomplished, without input or advice from their
followers.
• Democratic leadership: With this style, also called
participative, (Let's work together to solve this) the leader
includes one or more other individuals in the decision
making process to determine what to do and how to do it.
• Laissez Faire leadership: This style of leadership is
effective: Laissez faire comes from the French - "to allow
to do,“ In this style, also known as delegative or free reign
(you take care of the problem while I go elsewhere); the
leader allows others to make the decisions.
• The Visionary leader: This is someone who has big but
realistic dreams for an organization. It’s the perfect leader
for a drastic organizational change.
 Traits of Leaders
• Easy to Work With: An effective leader has to be easy
to work with. Others have to feel comfortable
approaching the leader with ideas and solutions to
problems.
• Has a Mission, a Vision and Specific Goals: This gives
direction to the leader.
• Has Well-Honed Interpersonal Skills: Without the
ability to interact positively with others, engage them
and make their team trust them, someone cannot truly
become a leader.
• Committed to Self-Improvement: Good leaders are
self motivated and take personal responsibility to always
build on the skill.
• Able to Delegate Responsibilities: A good leader will identify
the strengths of others and assign responsibility accordingly.
Sharing the work will always be the best and most effective way
to achieve a goal.
• Has Excellent Organizational skills: Being organized is the
hallmark of an effective leader. Keeping a schedule and working
in a timely manner is only achieved when responsibilities are
delegated and executed in a timely manner.
• Knows How To Facilitate Teamwork: An effective leader will
always endorse teamwork and set an example for others to
follow.
• Has a Good Sense of Humor: A sense of humor is an absolute
must for all leaders. Nothing in life is serious all the time and to
make any project manageable, keeping the funny side in view
will keep tension at bay and the level of production high.
• Motivation: Motivation can be described as the
internal force that impacts the direction, inspire,
stimulate or encouraging the sub-ordinates with
zeal to work. Positive, negative, monetary, non-
monetary incentives may be used for this purpose.
Importance of Motivation:  Motivated employee
are more quality oriented.  Highly motivated
employees are more productive as compared to
other employees.  It helps Candidates not only to
join an organization but also makes them to remain
in the firm. Employees must perform task in a
dependable manner. Employees should be creative,
spontaneous and innovative at work.
 • Maslow’s Hierarchy of Needs Theory
• Physiological Needs: Every individual needs to take care of
the basic requirements required to sustain. These requirements
include food to eat, clothing to wear and shelter to live in.
These necessities are relatively independent of each other but
are finite.
• Safety Needs :Everybody wants to stay in a protected
environment with minimal danger so that they can have a
peaceful life. In an enterprise, it includes job security, salary
increment, etc.
• Social Needs: We have all heard that man is a social animal,
we want to be there with those people where we are loved and
we are accepted as we are; nobody wants to be judged. This is
a common requirement every human desires. This theory helps
managers to think about encouraging their employees by
identifying employee needs.
• Esteem: Esteem means the typical human
desire to be accepted and valued by others.
• Self-Actualization :Self-actualization means
realizing one’s full potential. Maslow
describes this as a desire to complete
everything that one can, to become the most
that one can be.
 Herzberg’s Two-Factor Theory of Motivation
• In 1959, Frederick Herzberg, a behavioural scientist
proposed a two-factor theory or the motivator-hygiene
theory. According to Herzberg, there are some job
factors that result in satisfaction while there are other
job factors that prevent dissatisfaction. Herzberg
classified these job factors into two categories-
• Hygiene factors- Hygiene factors are those job factors
which are essential for existence of motivation at
workplace. These do not lead to positive satisfaction for
long-term. But if these factors are absent / if these
factors are non-existant at workplace, then they lead to
dissatisfaction. Hygiene factors include:………….
• Pay
• Company Policies and administrative policies
• Fringe benefits
• Physical Working conditions.
• Status - The employees’ status within the organization
should be familiar and retained.
• Interpersonal relations - The relationship of the
employees with his peers, superiors and subordinates
should be appropriate and acceptable. There should be no
conflict or humiliation element present.
• Job Security - The organization must provide job
security to the employees.
• Motivational factors- According to Herzberg, motivational factors
yield positive satisfaction. These factors motivate the employees for a
superior performance.
• Motivational factors include:
• Recognition - The employees should be praised and recognized for
their accomplishments by the managers.
• Sense of achievement - The employees must have a sense of
achievement. This depends on the job. There must be a fruit of some
sort in the job.
• Growth and promotional opportunities - There must be growth and
advancement opportunities in an organization to motivate the
employees to perform well.
• Responsibility - The employees must hold themselves responsible for
the work. The managers should give them ownership of the work.
They should minimize control but retain accountability.
• Meaningfulness of the work - The work itself should be meaningful,
interesting and challenging for the employee to perform and to get
motivated.
 Alderfer ERG Theory of Motivation
• To bring Maslow’s need hierarchy theory of motivation in
synchronization with empirical research, Clayton Alderfer
redefined it in his own terms. His rework is called as ERG theory
of motivation. He recategorized Maslow’s hierarchy of needs into
three simpler and broader classes of needs:
• Existence needs- These include need for basic material
necessities. In short, it includes an individual’s physiological and
physical safety needs.
• Relatedness needs- These include the aspiration individual’s
have for maintaining significant interpersonal relationships (be it
with family, peers or superiors), getting public fame and
recognition..
• Growth needs- These include need for self-development and
personal growth and advancement. Maslow’s self-actualization
needs and intrinsic component of esteem needs fall under this
category of need.
 Expectancy Theory of Motivation
• The expectancy theory was proposed by Victor Vroom of Yale
School of Management in 1964. Vroom stresses and focuses on
outcomes, and not on needs unlike Maslow and Herzberg.
• The theory states that the intensity of a tendency to perform in a
particular manner is dependent on the intensity of an expectation
that the performance will be followed by a definite outcome.
• The Expectancy theory states that employee’s motivation is an
outcome of how much an individual wants a reward (Valence). In
short, Valence is the significance associated by an individual about
the expected outcome. It is an expected and not the actual satisfaction
that an employee expects to receive after achieving the
goals. Expectancy is the faith that better efforts will result in better
performance.
• Instrumentality is the faith that if you perform well, then a valid
outcome will be there. Thus, the expectancy theory concentrates on
the following three relationships:
• Effort-performance relationship: What is the
likelihood that the individual’s effort be recognized in
his performance appraisal?
• Performance-reward relationship: It talks about the
extent to which the employee believes that getting a
good performance appraisal leads to organizational
rewards.
• Rewards-personal goals relationship: It is all about
the attractiveness or appeal of the potential reward to
the individual.
• Vroom was of view that employees consciously decide
whether to perform or not at the job. This decision
solely depended on the employee’s motivation level
which in turn depends on three factors of expectancy,
valence and instrumentality.
• Advantages of the Expectancy Theory
• It is based on self-interest individual who want to
achieve maximum satisfaction and who wants to
minimize dissatisfaction.
• This theory stresses upon the expectations and
perception; what is real and actual is immaterial.
• It emphasizes on rewards or pay-offs.
• It focuses on psychological extravagance where
final objective of individual is to attain maximum
pleasure and least pain.
 Controlling
• It is a process of comparing the actual
performance with the set standards of the
company to ensure that activities are performed
according to the plans and if not then taking
corrective action.
• Therefore controlling has following steps: a.
Establishment of standard performance. b.
Measurement of actual performance. c. Comparison
of actual performance with the standards and finding
out deviation if any. d. Analysing deviation/s e.
Corrective action.
• Types of Control
• Feed forward controls are future-directed — they
attempt to detect and anticipate problems or
deviations from the standards in advance of their
occurrence (at various points throughout the
processes).
• Concurrent control, also called steering control
because it allows people to act on a process or
activity while it is proceeding, not after it is
proceeding, nor after it is completed.
• Feedback control is future-oriented. It is historical
in nature and is also known as post-action control.
The implication is that the measured activity has
already occurred, and it is impossible to go back and
correct performance to bring it up to standard.
1. Setting Performance Standards
Quantitative Standards:
(a) Revenue to be earned. (b) Units to be produced and sold.
(c) Cost to be incurred.
Qualitative Standards:
(a) Improving motivation level of employees.
(b) Improving work force relations.
(c) Improving quality of products. (d) Improving goodwill etc.
2. Measurement of Actual Performance:
Once the standards have been determined, the next step is to
measure the actual performance. The various techniques for
measuring are sample checking, performance reports,
personal observation etc. However, in order to facilitate easy
comparison, the performance should be measured on same
basis that the standards have.
3. Comparing Actual Performance with Standards:
This step involves comparing the actual performance
with standards laid down in order to find the
deviations. For example, performance of a salesman
in terms of unit sold in a week can be easily
measured against the standard output for the week.
4. Analysing Deviations:
Some deviations are possible in all the activities.
However, the deviation in the important areas of
business needs to be corrected more urgently as
compared to deviation in insignificant areas.
Management should use critical point control and
management by exception in such areas.
5. Taking Corrective Action:
The last step in the process of controlling
involves taking corrective action. If the
deviations are within acceptable limits, no
corrective measure is required. However, if the
deviations exceed acceptable limits, they
should be immediately brought to the notice of
the management for taking corrective
measures, especially in the important areas.