INDUSTRIAL MANAGEMENT

UNIT-1
Introduction to management: Management
concept is comprehensive and covers all aspects
of business. In simple words, management means
utilizing available resources in the best possible
manner and also for achieving well defined
objectives
Definitions of Management
According to Henry Fayola, "To manage is to forecast
and to plan, to organize, to command, to coordinate and
to control".

According to Harold Koontz, "Management is the art of

getting things done through and with people in formally
organized groups”.
Nature and features of management
1.Management is a group activity
2.Management is objective oriented
3.Optimum utilization resources
4.Decision making
5.Dynamic in nature
6.Multi-disciplinary
Importance of management:
Achievement if objectives
Increasing productivity
Facing competition
Exercising positive influence
Modern and scientific innovation
Management necessary to all
organization
Functions of management
•Planning
•Organising
•Staffing
•Directing
• Leading,
• Motivating,
• Communicating,
• Coordinating
•Controlling
Functions of management are interlinked
Henri fayol 14 principles
•Division of Work
•Discipline
•Authority and responsibility
•Subordination of Individual Interest to General Interest
•Remuneration
•Centralisation
•Order
•Equity
•Initiative
•Esprit De Corps
•Stability of Tenure
•Unity of Direction
•Scalar Chain
•Unity of Command
Scientific Management theory:
Definition: Scientific management may be defined as the “Art of knowing
exactly what is to be done and the best way of doing it”.

Scientific management is the result of applying scientific knowledge and

scientific methods to the various aspects of management and the problems that
arise from them.

Scientific Management tries to increase productivity by increasing efficiency

and wages of the workers. It finds out the best method for performing each job.
It selects employees by using Scientific Selection Procedures. It provides
Scientific Training and Development to the employees. It believes in having a
close co-operation between management and employees. It uses Division of
Labour. It tries to produce maximum output by fixing Performance Standards for
each job and by having a Differential Piece-Rate System for payment of wages.
Principles of Scientific Management
•Performance Standards
•Differential Piece Rate System
•Functional Foremanship
•Mental Revolution
•Time Study
•Fatigue and Motion Study
•Gantt Charts
Taylor's Scientific Management is criticised on
the following main grounds:
•Exploitation of Workers
•Problem of Unity of Command
•Mechanical Approach
•Problem of Separation of Planning from
Doing
•Individualistic Approach
•Wrong Assumptions
•Narrow Application
Maslow's Hierarchy of Needs Theory
It was in 1943 a Psychologist Mr. Abraham Harold
Maslow suggested hisTheory of Human Motivation.
His theory is one popular and extensively cited theory of
motivation. Maslow's theory is based on the Hierarchy
of Human Needs. According to Maslow, human
behavior is related to his needs. It is adjusted as per the
nature of needs to be satisfied. In hierarchy of needs
theory, Maslow identified five types / sets of human
need arranged in a hierarchy of their importance and
priority. He concluded that when one set of needs is
satisfied, it ceases to be a motivating factor .
1. Physiological needs
2. Safety needs
3. Affiliation or acceptance needs (love/belongings)
4. Esteem needs
5. Self – actualization needs
Frederick Herzberg Theory of Human
Motivation
Frederick Herzberg's theory of motivation is also
called 'Two Factor Theory', 'Dual Factor Theory'
and 'Hygiene / Maintenance Theory of Motivation'.
This theory is based on the information collected by
him and his associates (in the USA in 1959) by
interviewing two hundred engineers and accountants.
The information collected relates to the attitude of
people towards work. This attitude towards work
depends on two sets of factors namely hygiene or
maintenance factors and the motivating factors.
1) Hygiene factors
According to Frederick Herzberg, the Hygiene
Factors do little contribution to provide job
satisfaction. He called them "dissatisfiers' as
their absence cause dissatisfaction but their
presence is not motivating but only prevent
dissatisfaction. The hygiene factors meet man's
needs to avoid unpleasantness but do not
motivate them to take more interest in the
work
Hygiene / Maintenance Factors are :-
Company's Policies and Administration,
Supervision,
Working Conditions,
Interpersonal Relations with superiors and other
subordinates,
Salary,
Job Security,
Status,
Personal Life, and
Employee Benefits.
2) Motivators
Motivating Factors act as forces of job satisfaction.
They create positive and a longer lasting effect on
employee’s performance and are related to work itself.
Adequate provision of such factors called are
'Satisfiers'.
Motivating Factors are :-
•Achievement,
•Recognition for Accomplishment,
•Increased Responsibility,
•Opportunity for Growth and Development, and
•Creative and Challenging Work.
Douglas McGregor's - Theory of Motivation
The eminent psychologist Douglas McGregor has given
his theory of motivation called Theory X and Theory Y.
He first presented his theory in a classic article titled
'The Human Side of Enterprise'. He treated traditional
approach to management as 'Theory X' and the
professional approach to management as 'Theory Y'.
His theory refers to two sets of employees based on the
perception of human nature. Here, theory X and theory
Y are two sets of assumptions about the nature of
employees. His theory is based on human behavior .
Theory X is based on traditional assumptions about people (employees). Here,
the conventional approach of management is used as a base. It suggests the
following features of an average human being/employee (assumptions about
human nature):

1) Assumptions of Theory X.

• Employees are inherently lazy

• They require constant guidance and support
• Some times they require even coercion and control
• Given an opportunity, they would like to avoid responsibility
• They do not show up any ambition but always seek security
Theory Y.
Theory Y is based on modern or progressive or professional approach. Here, the
assumptions about people i.e. employees are quite different.

2) Assumptions of Theory Y.

• Some employees consider work as natural as play or rest

• These employees are capable of directing and controlling
performance on their own. They are much committed to
the objectives of the organization.
• Higher rewards make these employees more committed to
organization.
• Given an opportunity, they not only accept responsibility
but also look for opportunities to outperform others.
• Most of them are highly imaginative, creative, and display
ingenuity in handling organizational issues.
Organisation
The term 'Organisation' is derived from the word 'organism'
which means a structure of body divided into parts that are held
together by a fabric of relationship as one organic whole
Organisation involves the following aspects:-
•Identifying the activities required to achieve organizational
objectives.
•Grouping up of these activities into workable units
(Departmentation).
•Assigning duties and responsibilities to subordinates in order to
achieve the tasks assigned.
•Delegating authority necessary and useful for the
accomplishment of tasks assigned.
•Establishing superior-subordinate relationship.
•Providing a system of co-ordination for integrating the
activities of individuals and departments.
Organisation structure:
Organisation structure is defined as "The logical
arrangement of task and the network of
relationships and roles among the various
positions established to carry out the activities
necessary to achieve the predetermined
objectives of business".
Types Of Organisation Structure

Line Organisation structure.

Line and staff organisation structure

Functional organisation structure

Committee structure

Matrix structure
Line Organisation Structure
Line Organisation (also called Military/Scalar
Organisation) is the oldest and the simplest form of
internal Organisation structure. It was first developed
by the Roman army and later adopted by armies all
over the world. Factory owners also used line
Organisation structure in its purest form in the
nineteenth century in England.
In the line Organisation, the line of authority moves
directly from the top level to the lowest level in a step-
by-step manner. It is straight and vertical. The top-
level management takes all major decisions and issues
directions for actual execution.
Advantages of Line Organisation Structure

•Simplicity
•Prompt decisions
•Discipline
•Economical
•Attraction to talented persons
•Quick communication
•flexibility
Limitations of Line Organisation Structure

•Heavy burden on line executives

•Non-availability of services of experts
•Favoritism
•Too much dependence on limited executives
•Delays in communication
•unsuitability to modern large business units
Line and Staff Organisation Structure

In the line and staff Organisation, line executives and staff

(specialists) are combined together. The line executives are 'doers'
whereas staff refers to experts and act as 'thinkers'. The line
executives are concerned with the execution of plans and Policies.
They do their best to achieve the organizational objectives. The
staff concentrates their attention on research and planning
activities. They are experts and conduct advisory functions.
Staff specialists are regarded as 'thinkers" while execution function
is given to line executives who are "doers". The staff is supportive
to line. The staff specialists offer guidance and cooperation to line
executives for achieving organizational objectives
Merits of Line and Staff Organisation

•Less burden on executives

•Services of experts available
•Sound decision-making
•Limited tension on line managers
•Benefits of specialization
•Training opportunities to employees
Demerits of Line and Staff
Organisation

•Delay in decision-making
•Conflicts between line and staff
executives
•Costly Organisation
•Complicated operation
•Internal discipline is affected adversely
Conflict between Line and Staff Executives
Functional Organisation Structure
In the functional Organisation suggested by F.W.Taylor,
the job of management is divided according to
specialization. As a result, functional departments are
created. For example, the personnel department will look
after the recruitment, selection, training, wage payment,
etc. of all persons of the Organisation. Similar will be the
position of other departments like production, sales, etc.
The scope of work of the department is limited but the
area of authority is unlimited.
Foremen At Planning Level (Planning Dept.)

1. Time and Cost Clerk: He is concerned with preparing standard time for the
completion of certain piece of work and compiling the cost of that work.
2. Instruction Card Clerk: He lays down the exact method of doing the work. He
specifies the tools to be used for conducting the production and also gives other
instructions on the instruction cards prepared by him.
3. Route Clerk: The route clerk lays down the exact route through which each and
every piece of work should move through various stages till completion. He decides
the production schedule and the sequence of steps by which the production process
is to move.
4. Shop Disciplinarian: He is concerned with the discipline, insubordination, violation
of rules of discipline and absenteeism. All cases relating to these matters will be
managed by the shop disciplinarian.
Foremen At Shop Floor Level (Shop Floor)

1. Gang Boss: He assembles and sets up various machines; and tools for a
particular piece of work. He is in-charge of assembling line of production.
2. Speed Boss: He is concerned with the speeding of machines used for
production. He keeps proper speed of the machines and see that workers
complete the production work as per the schedule time.
3. Repair Boss: The repair boss looks after the proper maintenance of machines,
tools and equipments required during the production process.
4. Inspector: The inspector controls quality of the products by keeping adequate
check/control when the production work is in progress.
Merits of Functional Organisation
Structure

•Facilitates specialization
•Benefits of large-scale operations
•Facilitates effective coordination
•Operational flexibility
•Ensures effective supervision
Demerits of Functional Organisation Structure

•Absence Of Unity Of Command

•Fixing Responsibility Is Difficult
•Unsuitable To Non-manufacturing Activities
•Costly
•Creates Confusion Among Workers
•Conflicts Among Foremen
•Delays In Decision-making
Matrix Organisation - Meaning

Matrix Organisation was introduced in USA in the early 1960's. It was used to
solve management problems in the Aerospace industry.
Matrix Organisation is a combination of two or more organisation structures.
For example, Functional Organisation and Project Organisation.
The organisation is divided into different functions, e.g. Purchase, Production, R
& D, etc. Each function has a Functional (Departmental) Manager, e.g. Purchase
Manager, Production Manager, etc.
The organisation is also divided on the basis of projects e.g. Project A, Project
B, etc. Each project has a Project Manager e.g. Project A Manager, Project B
Manager, etc.
The employee has to work under two authorities (bosses). The authority of the
Functional Manager flows downwards while the authority of the Project
Manager flows across (side wards). So, the authority flows downwards and
across. Therefore, it is called "Matrix Organisation".
Advantages of Matrix Organisation

•Sound Decisions
•Development of Skills
•Top Management can concentrate on Strategic Planning :
•Responds to Changes in Environment
•Specialisation
•Optimum Utilisation of Resources
•Motivation
•Higher Efficiency
Limitations of Matrix Organisation

•Increase in Work Load

•High Operational Cost
•Absence of Unity of Command
•Difficulty of Balance
•Morale
•Complexity
•Shifting of Responsibility
Committee Organisation

• A committee is formed when two or more persons are

appointed to work as a team to arrive at a decision on the
matters referred to it.
• It is intended to utilise the knowledge, skills, and
experiences of all the concerned parties. Particularly, in
large organizations, problems are too big to be handled
by one single expert, so we need a committee.
Committee Organisation in a university
Merits of Committee Organisation

• It pool up the Organisational resources in terms of knowledge ,

skills and experience.
• It represents all interested groups and thus, facilitates group
decision.
• It yields good results if the committess are headed by taskmaster
like chairman and time – bound in terms of decision making.
• It minimizes the fear of too much authority vested in one
person.
• It motivates all the concerned or affected groups to participate.
Demerits of Committee Organisation

• Responsibility for decisions cannot be fixed on a particular

person.
• It calls for high degree of coordination.
• It involves high cost in terms of time and money.
Departmentalization:

"Departmentalization is the grouping of jobs, processes, and resources into logical units
to perform some organizational task."
Delegation of Authority

According to F.C. Moore, "Delegation means

assigning work to the others and giving them
authority to do so."
Process of Delegation of Authority ↓

Delegation process involves four distinct stages. The process of delegation

moves through these stages. The following figure shows the stages in the
process of delegation of authority.
SPAN OF MANAGEMENT
 DEFINATION
• Span of management defines clearly the
number of the subordinates can be
effectively control by the manager.
OTHER NAMES OF SPAN OF MANAGEMENT

SPAN OF CONTROL

SPAN OF SUPERVISE

SPAN OF RESPONSIBILITY
IMPORTANCE OF EFFECTIVE
SPAN OF MANAGEMENT
BETTER
INCREASES
SUPERVISION AND
EFFICIENCY
CONTROL

GOOD GOOD
PROFESSIONAL COMMUNICATION
RELATIONS AND COORDINATION

DEVELOPS
DISCIPLINE AND
MUTUAL TRUST
 BETTER SUPERVISION AND
CONTROL
• If there is an
appropriate span of
control, then the
superior will have a
limited number of
subordinates under
him. This will result
in better
supervision and
control.
 INCREASES EFFECIENCY
• An appropriate
span of control
results in better
supervision and
control. This
increases the
efficiency,
productivity and
profitability of the
organisation.
 GOOD PROFESSIONAL RELATIONS

• If there is an
appropriate span of
control, then the
superiors and
subordinates will
get time to develop
close and good
professional
relations between
themselves.
 GOOD COMMUNICATION
AND COORDINATION
• If there is an appropriate
span of control, then
superiors will get time to
communicate with every
single subordinate. This
will improve the
communication in the
organisation. Good
communication results in
good co-ordination.
Therefore, an appropriate
span of control results in
good communication and
co-ordination.
 DEVELOPS DISCIPLINE AND
MUTUAL TRUST
• An appropriate span of
control helps to develop
discipline and mutual trust.
 FACTORS AFFECTING SPAN OF
MANAGEMENT

NATURE OF
WORK

CAPACITY OF TRUST ON
SUPERIORS SUBORDINATES

TECHNIQUE
OF
COMMUNICATION

DELEGATION CAPACITY
OF OF
AUTHORITY SUBORDINATES

FIXATION OF
RESPONSIBILITY
NATURE OF
WORK

Some of the work

is repetitive in
nature and does
not require special
talent to
perform .In such a
case the
supervisor can
control a large
number of
subordinates
 CAPACITY OF SUPERIORS
• The personnel
capacity of
superiors can
influence the
span of control .
• If the superiors
has more skill
to control the
subordinates ,
the span of
management may
be increased
and vice –versa.
 DELEGATION OF AUTHORITY
• If superiors
delegates the
authority he has
to take fewer
decisions ,
therefore span
of management
can be increased
.
On the other
hand , if superior
does not delegate
the authority he
has to take more
 FIXATION OF
RESPONSIBILITY
• In case the responsibility
of the subordinate is
clearly defined he need not
to contact the supervisor
again and again for getting
guidance and instruction .
Then the supervise can
supervise large number of
subordinates and vice
versa .
 TRUST ON SUBORDINATES
• If the superior has good
faith, trust and
confidence in his
subordinates then the
span of control can be
wider.
• If the superior has no
faith, trust and
confidence in his
subordinates then the
span of control can be
narrower.
 CAPACITY OF
SUBORDINATES
• If the subordinates
have enough talent
to perform the work
assigned to them ,
the manager or the
supervisor can
control more
number of
subordinates and
vice versa.
 TECHNIQUE OF
COMMUNICATION
• If face-to-face
communication is used,
then the span of control
will be narrow. However, if
electronic devices are used
for communication then
the span of control will be
wide.
TYPES OF SPAN OF
MANAGEMENT
WIDE SPAN OF
• This means a single manager or
MANAGEMENT
supervisor is managing Large
numbers of subordinates . For
example 7 -8 numbers of
subordinates.

NARROW SPAN OF
MANAGEMENT
• This means a single manager or
supervisor is managing Few number
of subordinates . For example
2-3 number of subordinates.
 WIDE SPAN OF
:- FLAT
MANAGEMENT
OTHER NAME
ORGANISATIONAL
STRUCTURE
 WIDE SPAN OF
MANAGEMENT
MERITS DEMERITS
• ECONOMICAL • REDUCES QUALITY OF
• DIRECT CONTACT PERFORMANCE
WITH SUBORDINATES • HIGHLY QUALIFIED
• Opportunities FOR AND WELL
SUBORDINATES EXPERIENCED STAFF
DEVELOPMENT IS NEEDED
• ZEAL AND INITIATIVE
OF THE WORKERS IS
KILLED
 NARROW SPAN
OTHER NAME :- TALL
OF
MANAGEMENT
ORGANISATIONAL
STRUCTURE
 NARROW SPAN OF
MERITS
MANAGEMENT
DEMERITS

• OFFERS TIGHT
CONTROL AND
• CREATES MORE
SUPERVISION
LEVELS OF
• PERSONAL CONTACT
MANAGEMENT
BETWEEN MANAGERS WHICH IS
• MANAGERIAL EXPENSIVE AS
EFFECINCY IS WELL AS TIME
INCREASED CONSUMING
• CREATES
COMPLEXITY IN
COMMUNICATIO
N