1.

Basic Management Concepts and Industrial

Organization

 Introduction to Industrial management

 Functions of management
 Organizational structure
 Basics of productivity
 Industrial management and organization
• Industrial management and organization are essential
components of the broader field of business management,
focusing on the efficient operation of industrial processes.

 Industrial Management
 Industrial management combines engineering principles
with business practices to optimize production processes
and improve efficiency in manufacturing and service
industries.
 It addresses the complexities of managing resources,
technology, and human factors in industrial settings.
  Organization in Industrial Management
 Organization within industrial management refers to the
systematic arrangement of activities and resources to achieve
specific objectives.
 This includes establishing a hierarchy, defining roles, and creating
processes that facilitate efficient operations.
Key Components
Organizational Hierarchy: Establishing clear lines of
authority and responsibility is crucial for effective
communication and decision-making within an industrial
setting.
Process Design: Structuring workflows to enhance
efficiency involves mapping out processes, identifying
bottlenecks, and streamlining operations to improve overall
performance.
Resource Allocation: Effective organization ensures that
resources—both human and material—are allocated
appropriately to meet production goals without waste.
 1.1. Introduction to management
 Management can be defined as ―the process of organizing and
using resources to accomplish predetermined objectives‖
 Management is different from technical proficiency
 Set goals and create the conditions for reaching them
1.2. Classification of management functions
Managerial functions
a) Planning
b) Organizing
c) Staffing
d) Directing
e) Controlling
MANAGEMENT FUNCTIONS Operational functions
a) Production
b) Marketing
c) Purchasing
d) Financing
e) Personnel
 Managerial functions and sub functions
1. PLANNING - Forecasting, decision making ,strategy, formulation,
policy- Making , programming , scheduling, budgeting, problem solving
innovation , investigation and research.
2. ORGANIZING -Fictionalization, departments, decentralization,
activity, analysis , task, span of management, task allocation.
3. STAFFING - Manpower planning , recruitment , selection , training ,
placement , compensation , promotion ,appraisal.
4. DIRECTING - Supervision , motivation , communication , leadership
5. CONTROLLING - Fixation of standards ,recording , measurement
reporting , corrective action.
 Application Examples

 Manufacturing: A manager is responsible for moving a

manufacturing operation to a new facility. He wants to be
sure the move goes as smoothly as possible and that there are
no surprises.
 Design: A design engineer wants to think of all the possible
ways a product he is designing could fail so that he can build
robustness into the product.
 Power generation and distribution: a electrical
manager in industrial plants handle a variety of specific tasks
to ensure reliable electricity supply for operations.
 1. Planning
 Planning Involves:
 Determination of objectives of business,
 Formation of programmes and courses of action for their
attainment,
 Development of schedules and timings of action and
 Assignment of responsibilities for their implementation.
Features of planning

Planning:
 Seeks to achieve certain objectives.
 Is oriented towards the future.
 Is a mental exercise.
 Involves choices from alternatives.
 Is the basics for all other functions.
 It is a continuous function.
 It is directed towards efficiency.
Steps in planning

1) Collecting information about past

2) Defining objectives
3) Developing planning premises
4) Discovering alternative courses of actions
5) Evaluating alternatives
6) Choosing the best alternatives
7) Defining additional plans
8) Periodic revision and review of plans
  It focuses attention on desired objectives
 It helps to minimize risk
 It improve efficiency
 It avoid confusions
 It encourage innovation and creativity
 It enables co operation and group work
 It serves as the basis of control

Limitations of planning
 Lack of accurate information
 Time consuming
 Expensive
 Rigidity due to strict compliance with plans
 Unwillingness to people change
 External limitations (political)
How we overcome the limitations?
 Top management support
 Better forecasting
 Developing clear-cut objectives
 Participation of employees in planning
 Sound communication
 Overcoming resistance to change
 Scientific planning
 Well balanced keeping plans
 2. Organizing

According to Henri Fayol ―To organize a business means to

provide it with everything useful to its functioning-raw
materials, tools, capital and personnel‖

Steps in organizing
1) Identifying the activities required for achieving objectives.
2) Classifying these activities in to convenient groups.
3) Assigning the group of activities to appropriate persons.
4) Delegating authority and fixing responsibilities.
5) Coordinating Authority throughout the enterprise.
Importance of organizing

• Sound organization facilitate growth and diversification.

• Optimum use of human resources by matching work with
talent.
• Maintain good harmonious structure in the office.
• Group activity is equivalent to social structure of
organization.
• It is a mechanism of management to direct ,controls and
coordinates the activities of enterprise.
 3. Staffing
 It is concerned with the Human resources of the enterprise.
 It is concerned with acquiring, developing, utilizing, and
maintaining human resources.
 It is a process of matching jobs with individuals to ensure
right man for the right job.
 According to koontz and O’Donnel ―The managerial
functions of staffing involves managing the organizational
structure through proper and effective selection, appraisal
and development of personnel to fill the roles designed in to
the structure.
Steps in staffing

1. Manpower planning
2. Recruitment, selection, placement
3. Training and development
4. Appraisal ,promotion and transfer
5. Employee remuneration

Features of staffing

• It is a function of management.
• It is an integral part of the process of management.
• It is concerned with the human resources.
• Aims at optimum utilization of human resources.
 Importance of staffing

• It helps in discovering and obtaining competent employees for

various job.
• It improve the quantity and quality of output by putting right
man for right job.
• It improves job satisfaction of employees.
• It reduces cost of personnel by avoiding wastage of human
resource.
• It facilitates the growth and diversification.
 4. Directing

―Directing consist of the process and techniques utilized in using

instructions and making certain that operations are carried out as
planned‖
• It is concerned with the execution of plans through organized action.
• It is also known as commanding or actuating.

5. Controlling

• Task of managers is to evaluate how well an organization has achieved its

goals and to take any corrective actions needed to maintain or improve
performance.
• The outcome of the control process is the ability to measure
performance accurately and regulate organizational efficiency and
effectiveness.
 1.3. organizational structure

1.3 Why Have a Structure?

 All businesses have to organise what they do.
 A clear structure makes it easier to see which part of the
business does what.
 Ways to structure a business

There are many ways to structure a business

1. By function: arranging the business according to what
each section or department does
2. By product or activity: organising according to the
different products made
3. By area: geographical or regional structure
4. By customer: where different customer groups have
different needs
5. By process: where products have to go through stages as
they are made
Organization by Functional Structure

Advantages Disadvantages
 Specialisation – each  Closed communication could
lead to lack
department focuses on its
of focus
own work
 Departments can become
 Accountability – someone is resistant to change
responsible for the section Coordination may take too

 Clarity – know your and long
others’ roles  Gap between top and bottom
Organization by Product/ Activity

Advantages
Disadvantages
 Clear focus on market
segment helps meet  Duplication of functions (e.g.
customers’ needs different sales force for each
 Positive competition between division)
divisions  Negative effects of
 Better control as each division competition
can act as separate profit  Lack of central control over
centre each separate division
 Organization by Area

Advantages Disadvantages
 Serve local needsbetter  Conflict between local
 Positive competition and central management
 More effective
 Duplication of resources
communication between firm
and local customers and functions
 Other Organizational Structures
• By Customer: Similar effects to structuring by product
• By Process: Similar to structuring by function.
 1.4 Basics of productivity
Productivity is the relationship between the outputs are
generated from a system and the inputs that are used to create
those outputs.

Mathematically

O
P=
I
Where: P is productivity
O is outputs and
I is inputs
 Systems concepts

Inputs Outputs
transformations Customers
Land Goods
people and
SYSTEM
capital services
facilities
equipment
tools O
energy I
materials
information productivity
Productivity Improvement
Productivity Improvement (PI) is the result of managing and
intervening in transformation or work processes.

PI will occur if:

O O O O O
I I I I I
 Measurement Problems
 Multiple products/services (aggregation-O)
 Varied categories, types, and levels of input resources
(aggregation-I)
 Price/cost changes of outputs & inputs
 Redesigned products, services, processes
 ―Hard-to-measure‖ factors (e.g., quality)

Application of ProductivityMeasures
 Individual level  Corporate level
 National level
 Group level
 Department level  Global level
Factors Affecting Productivity Improvement at
Global Level
 Education
 Technology
 Macroeconomic Policies
 Social and culture environments
 Foreign aids
 Foreign investments
 Industry policies & competition
 Other Measures Affecting Productivity
 Efficiency - Measures the resources expected to be

consumed to the resources actually consumed. Hence, it

focuses on the input side of the system. (To what degree
did the system utilize the ―right‖ things.)
 Effectiveness - Measures what the system sets out to
accomplish (objective) with what was actually
accomplished; plan vs. actual. Hence, effectiveness is an
output measure. (Is the output ―right‖ - right quality, right
quantity, on time, etc.)
 Quality - Degree to which the outputs (products and
services) from the system conform to requirements or meet
customer expectations. The focus is on quality attributes
(e.g., conformance, performance, convenience,
responsiveness, perceived quality.)
 Quality of Work Life - Measures the way that employees in
a system respond to the socio technical aspects of that
system.
 Innovation - Measures the applied creativity of the system.
Relates to the design and development of improved products,
services, and processes.