management concepts.pptx

MANAGEMENT CONCEPTS DJJ 6192
INDUSTRIAL MANAGEMENT
© LIYANA NORIZAN DIS

HISTORY & DEVELOPMENT OF INDUSTRIAL
ENGINEERING

HISTORY & DEVELOPMENT OF INDUSTRIAL
ENGINEERING
The traditional view of manufacturing management began in eighteenth century when
Adam Smith recognised the economic benefits of specialization of labour. He
recommended breaking of jobs down into subtasks and recognises workers to
specialized tasks in which they would become highly skilled and efficient.
In the early twentieth century, F.W. Taylor implemented Smith’s theories and developed
scientific management. From then till 1930, many techniques were developed
prevailingthe traditional view. Brief information about the contributions to
manufacturing management is shownin the Table 1.1.
Production Management becomes the acceptable term from 1930s to 1950s. As F.W.
Taylor’s works become more widely known, managers developed techniques that
focused on economic efficiency in manufacturing. Workers were studied in great detail
to eliminate wasteful efforts and achieve greater efficiency. At the same time,
psychologists, socialists and other social scientists began to study people and human
behaviour in the working environment. In addition, economists, mathematicians, and
computer socialists contributed newer, more sophisticated analytical approaches.
With the 1970s emerge two distinct changes in our views. The most obvious of these,
reflected in the new name Operations Management was a shift in the service and
manufacturing sectors of the economy. As service sector became more prominent, the
change from ‘production’ to ‘operations’ emphasized the broadening of our field to

INDUSTRIAL MANAGEMENT???
Industrial engineering (IE), often
also called Industrial
Engineering & Management, or
simply Engineering &
Management, teaches students
about the design, planning and
optimization of production and
manufacturing processes. It is a
study that integrates methods
and techniques from the

INDUSTRIAL MANAGEMENT???
Industrial management can be defined as the
effective and efficient running of an industry using its
human and non human resources in order to achieve
its sets of goals and objectives (optimized utilization
of organizational resources to achieve an industry set
of goals).
Industrial management is now a branch of
engineering which facilitates creation of management
system and integrates together with people and their
activities to utilize the resources

WHAT IS MANAGEMENT
SCIENCE?
Management Science is concerned
with developing and applying models
and concepts that help to illuminate
management issues and solve
managerial problems.
The models used can often be
represented mathematically, but
sometimes computer-based, visual or

WHAT IS MANAGEMENT
SCIENCE?
Management science is an approach to
management that applies mathematical analysis
to decision making. It involves the use of highly
sophisticated techniques, statistical tools and
complex models. The primary focus of this
approach is the mathematical model. Through
this device, managerial and other problems can
be expressed in basic relationships and where a
given goal is sought, the model can be
expressed in terms which optimize that goal.

WHAT IS MANAGEMENT
SCIENCE?
Management science focuses on the design and
administration of complex systems, and it is
used to investigate a wide range of strategic
and logistical problems. Management science
provides a systematic approach to such
problems using quantitative tools and
qualitative methods that assess the human and
social dimensions of these issues. Management
science techniques account for real world
complications and constraints in an effort to
provide sound, viable solutions to managerial

WHAT IS MANAGEMENT
SCIENCE?
The range of problems and issues to which
management science has contributed insights and
solutions is vast. It includes scheduling airlines, both
planes and crew, deciding the appropriate place to
site new facilities such as a warehouse or factory,
managing the flow of water from reservoirs,
identifying possible future development paths for
parts of the telecommunications industry,
establishing the information needs and appropriate
systems to supply them within the health service, and
identifying and understanding the strategies adopted

SCHOOL OF MANAGEMENT
THOUGHT

PRINCIPLES OF MANAGEMENT
(HENRI FAYOL)
Henri Fayol (Istanbul, 29 July
1841 – Paris, 19 November
1925) was a French mining
engineer, mining executive,
author and director of mines
who developed a general theory
of business administration that
is often called Fayolism.
He was a French industrialist
and recognized as Father of
Modern Management
In 1916, Fayol wrote a book
entitled “Industrial and General
Administration”. This book
contains Fayol’s 14 Principles of
Management which was

(HENRI FAYOL)

(HENRI FAYOL)
1. Division of Work
Dividing the full work of the
organization among
individuals and creating
departments is called division
of work.
Division of work leads to
specialization, and
specialization helps to
increases efficiency and
efficiency which results
improvements in productivity
and profitability of the

(HENRI FAYOL)
2. Balancing Authority and
Responsibility
Authority must be equal to
Responsibility. According to
Henri Fayol, there should be a
balance between Authority
(Power) and Responsibility
(Duties). The right to give orders
should not be considered without
reference to responsibility.
If the authority is more than
responsibility then chances are
that a manager may misuse it. If

(HENRI FAYOL)
3. Discipline
Outward mark of respect in
accordance with formal or informal
agreements between a firm and its
employees. Discipline means a
respect for the rules and regulation
of the organization. Discipline may
be Self-discipline, or it may be
Enforced discipline.
No slacking or bending of rules, not
allowed in any organization. The
works must respect the rules that run
the organization. To establish

(HENRI FAYOL)
4. Unity of Command
According to this principle, a
subordinate (employee) must have
and receive orders from only one
superior (boss or manager).
To put it another way, a subordinate
must report to only one superior. It
helps in preventing dual
subordination. This decrease the
possibilities of “Dual subordination”
which creates problem is function of
managers.

(HENRI FAYOL)
5. Unity of Direction
One head and one plan for a group of
activities with the same objective. All
activities which have the same objective
must be directed by one manager, and
he must use one plan.
This is called Unity of Direction. For
example, all marketing activities such as
advertising, sales promotion, pricing
policy, etc., must be directed by only one
manager.
He must use only one plan for all the
marketing activities. Unity of

(HENRI FAYOL)
6. Subordination of Individual
Interests
to the General Interest
The interest of one individual or
one group should not prevail
over the general good. The
individual interest should be
given less importance, while the
general interest should be given
most importance.
If not, the organization will
collapse. Interest of
the organizational goal should
not be sabotaged by the interest

(HENRI FAYOL)
7. Remuneration
Remuneration is the price for services
received. Pay should be fair to both the
employee and the firm. If an organization
wants efficient employees and best
performance, then it should have a good
remuneration policy.
This policy should give maximum
satisfaction to both employer and
employees. It should include both
financial and non-financial incentives.
Compensation should be based on
systematic attempt to reward good
performance.

(HENRI FAYOL)
8. Centralization
It is always present to a greater or
lesser extent,
depending on the size of the
company and the
quality of its managers. In
centralization, the
authority is concentrated only in
few hands.
However, in decentralization, the
authority is distributed to all the levels of management. No organization
can be completely centralized or decentralized.
If there is complete centralization, then the subordinates will have no
authority (power) to carry out their responsibility (duties). Similarly, if
there is complete decentralization, then the superior will have no
authority to control the organization.

(HENRI FAYOL)
9. Scalar Chain
The chain of command, sometimes called the scalar
chain, is the formal line of authority,
communication, and responsibility within an
organization.
The chain of command is usually depicted on an
organizational chart, which identifies the superior
and subordinate relationships in the organizational
structure.
Or it is the line of authority from top to bottom of
the organization. This chain implements the unity-
of-command principle and allows the orderly flow
of information.
Under unity of command principle the instructions
flow downward along the chain of command and

(HENRI FAYOL)
10. Order
A place for everything and everything in its
place’ the right man in the right place. There
should be an Order for material/things and
people in the organization.
Order for things is called Material Order and
order for people is called Social Order.
Material Order refers to “a place for
everything and everything in its place.”
Social Order refers to the selection of the
“right man in the right place”. There must be
orderly placement of the resources such as
Men and Women, Money, Materials, etc.
Human and material resources must be in the

(HENRI FAYOL)
11. Equity
While dealing with the employees a
manager should use kindliness and
justice towards employees equally.
Equity is a combination of kindness
and justice.
It creates loyalty and devotion in the
employees toward the organization.
The equity principle suggests that
the managers must be kind as well
as equally fair to the subordinates.

(HENRI FAYOL)
12. Stability of Tenure of Personnel
Although it could take a lot of
time, Employees need to be given
fair enough time to settle into their
jobs. An employee needs time to
learn his job and to become
efficient.
The employees should have job
security because instability leads to
inefficiency. Successful firms
usually had a stable group of
employees.

(HENRI FAYOL)
13. Initiative
Without limits of authority and
discipline, all levels of staff should
be encouraged to show initiative.
Management should encourage
initiative.
That is, they should encourage the
employees to make their own plans
and to execute these plans. This is
because an initiative gives
satisfaction to the employees and
brings success to the organization. It
allows the subordinates to think out
a plan and do what it takes to make

(HENRI FAYOL)
14. Esprit De Corps
Esprit de Corps means “Team
Spirit”. Therefore, the management
should create unity, co-operation
and team-spirit among the
employees.
They should avoid dividing and
rule policy. Harmony, cohesion
among personnel. It’s a great
source of strength in the
organization. It is a quality in every
successful business.

CONCEPTS OF ORGANIZATION
A clear concept of the major duties or
activities required to achieve the purpose
Classification of activities into jobs
Establishment of relationships between
these jobs
To achieve coordinated effort through
the design of a structure of task &
authority relationships © LIYANA NORIZAN DIS

PRINCIPLES OF ORGANIZATION
 Responsibility
 Authority
 Efficiency
 Flexibility
 Balance
 Unity of direction
 Personal ability
 Objectives
 Specialization
 Span of control
 Exception
 Scalar principle
 Unity of command
 Delegation

TYPES OF ORGANIZATION
STRUCTURE
 Line, military or scalar
organization
 Functional organization
 Line and staff organization
 Project organization
 Matrix organization

STRUCTURE
 Line, military or scalar
organization

STRUCTURE
Functional organization

STRUCTURE
Line and staff organization

STRUCTURE
Project organization

STRUCTURE
Matrix organization

POLICIES, GOALS AND
OBJECTIVES
Policy Example underpinning principle
Child Protection Policy Increase the acceptability of the sport (and
organisation) by the Community
Coach Education and Accreditation Policy Ensure standards of coaching meeting
expectations of members/customers
Club Development Policy Promote participation growth
Quality Customer Service Policy Protect the organisation's brand
Policies are a mechanism for controlling the behaviour of an organisation by
governing the behaviour of people who work within that organisation.
Policies exist to ensure, in a given situation, that people will behave in a way
that is predictable, advisable and in the best interests of the organisation
and the person.
There should be a reason why a policy exists. A policy is not formulated
unless it is thought to be necessary or to have a benefit. In other words the
policy exists for a purpose and this may be often expressed in the form of
an "underpinning principle".
For example, the underpinning principle for a Quality Service Policy might be
to protect the brand of the organisation. Here are a few more examples.

POLICIES, GOALS AND
OBJECTIVES
Goals are defined as the target or purpose that
a person imagines or plans to accomplish or to
reach or to achieve in future. They are the
driving force that directs a person to make
efforts to achieve it.
In our childhood, we decide, what we want to
become in the future and strives to achieve it.
The goal is that point which a person envisions
himself, after a particular span of time. To
achieve these goals, people usually put a
timeline, so that they can reach their goal in
the desired time. However, they are long term.

POLICIES, GOALS AND
OBJECTIVES
The aim or target which you want to achieve
within a limited period is known as the
objective. They are the milestones that help
you to reach your goal. That is why they are
also termed as subgoals. It is a step to reach a
particular point. Suppose I want to score 90%
marks in an exam to get admission in a good
university.
Objectives are easily measured when the
target is achieved. For example, A company
wants to increase its sales by 50% in the
upcoming six months and then when it hits

DIFFERENCE BETWEEN POLICIES
AND OBJECTIVES
Objectives are the desirable results or organizational or
individual activities. They are the purposes for which the
organization exists. They are the ends towards which
organizations direct their energies and concerns. They are the
‘reference points for the efforts of the organization’. Without
objectives there is likely to be (i) haphazard activity, (ii)
uneconomical commitment of funds (iii) poor utilization of
people, and (iv) mediocre operating results in the long run.
A policy on the other hand, is a guide to the action or decisions
of people. It provides a ·standing answer to recurring
questions. For example, promotions based on merit (a policy
of) helps managers to fill up vacancies on the basis of talent
and exceptional performance under repeated situations.
According to R.C. Davis, when policies are properly established
and applied uniformly throughout the organization they (i)

DIFFERENCE BETWEEN POLICIES
AND OBJECTIVES

DIFFERENCE BETWEEN GOALS AND
OBJECTIVES
Goals are outcome statements that define what an
organization is trying to accomplish, both
programmatically and organizationally. Goals are
usually a collection of related programs, a reflection
of major actions of the organization, and provide
rallying points for managers.
For example, Wal-Mart might state a financial goal of
growing its revenues 20% per year or have a goal of
growing the international parts of its empire. Try to
think of each goal as a large umbrella with several
spokes coming out from the center. The umbrella
itself is a goal.

DIFFERENCE BETWEEN GOALS AND
OBJECTIVES
In contrast to goals, objectives are very precise, time-
based, measurable actions that support the
completion of a goal. Objectives typically must (1) be
related directly to the goal; (2) be clear, concise, and
understandable; (3) be stated in terms of results; (4)
begin with an action verb; (5) specify a date for
accomplishment; and (6) be measurable. Apply our
umbrella analogy and think of each spoke as an
objective.
Going back to the Wal-Mart example, and in support
of the company’s 20% revenue growth goal, one
objective might be to “open 20 new stores in the next
six months.”
Without specific objectives, the general goal could
not be accomplished—just as an umbrella cannot be
put up or down without the spokes. Importantly,

MANAGEMENT PROCESS
There is enough disagreement among management
writers on the classification of managerial functions.
Newman and Summer recognize only four functions,
namely, organizing, planning,leading and controlling.
Henri Fayol identifies five functions of management,
viz. planning, organizing, commanding, coordinating
and controlling.
Luther Gulick states seven such functions under the catch word
"POSDCORB' which
stands for planning, organizing, staffing, directing, coordinating,
reporting and
budgeting.
Warren Haynes and Joseph Massie classify management functions
into decision-
making, organizing, staffing, planning, controlling,
communicating and directing.
Koontz and O'Donnell divide these functions into planning
organizing, staffing,

MANAGEMENT PROCESS
Henry Fayol was the first among those who describe management activity as a
distinct process. Here are various functions which consist the management
process. They are planning, organizing, actuating, and controlling.
1. Planning
Management activity begins with planning. Planning is a broad outline of things
to be done. What to do? How to do? It is a predetermine course of action.
2. Organizing
It is distributing or allocating the activities of business among different
personnel. The manager has to divide the work in activities and assign tasks to
various groups of people. This task is called organizing.
3. Actuating
The word ’actuating’ means moving the subordinates to action. It may be
described as directing also. The manger has to direct others that are the issue
orders and instruction to the supervisors.
4. Controlling
Controlling means to check the functioning of all the works. It is following up
what is being done. Controlling consist of basic steps viz. setting standards of
performance. Comparing actual with these standards and taking corrective steps
whenever deviations are there.

MANAGEMENT PROCESS

MANAGEMENT PROCESS -
PLANNING
"A good plan that is not planned to be inferior to a well-planned evil plan"
Like the idiom, an event is impossible without the existence of a planning is
packed in a work program. Where to make a program work necessarily
requires careful consideration in terms of weaknesses, strengths, threat,
purpose and benefits of the event. For an event that will surely be a success
with all the necessary consideration planning.
Planning begins with the emergence of the idea or reason to hold an event.
The next step is to begin to create a draft concept plan events or activities.
Good planning is not done by many people, but only by those who are in a
position as a conceptor. The more heads that think, not necessarily a better
value. But sometimes even prolong the process concepting activity as more
and more parties are involved, the more difficult to unify the view. Should the
conceptor is the person who actually has the ability and understanding of the
activities to be held.
In this stage, the resulting is an event concept, personnel needs and time
schedule. Thus, in the next stage, just divide the task of preparing
appropriate committees and their respective duties.

ORGANIZING
"If you failed to prepare, you prepare for failed"
If the planning steps have been completed, and the results are brought to
the group of larger ones. That started with the steps to form a committee
(organizing committee). All activities are certainly not out of either
committee or subcommittee that requires a lot of human resources
committee, where a team can work together and have a clear goal to support
these event. So with the committee in a structured, systematic activity can
run. The size of the people involved in the committee, of course tailored to
the needs. Besides the shortage of human resources can be a problem, too
much excess can also cause problems. Because many people are more
difficult to manage than the little guy. Problems can also arise from the cost
side, which should be more efficient if it is not too much involved.
At every position there is in the committee must have the duties,
responsibilities, authority and position description (Job Description)
different. The higher a position usually higher duties, responsibilities and
authority. With the division of the work into the light. Here is one of the
principles of management. That is to divide the tasks according to their
respective expertise.
The role of a leader in the committee is essential. A good leader, able to
manage human resources leads to prepare every detail planned. So the next

ACTUATING
"Thousands of steps never achieved without the presence of one of the first small
step"
Implementation of an action is the culmination of the work of a
committee together, in the hope a team can help each other
committees and provide a solution to a problem that occurs
between one another committee. Thus, under any circumstances,
activities run smoothly and successfully.
For that it takes hard work, smart work and cooperation. All
existing human resources should be optimized to achieve the
vision, mission and programs of the organization's work.
Implementation of the work should be in line with the work plan
has been prepared. Unless there are specific things that need to
be done adjusting. Every human must work in accordance with
the duties, functions and roles, skills and competencies of each
human to achieve the vision, mission and organization of the
work program that has been set.

CONTROL
"Tired of it for sure, but giving up is an option. Indeed, many people do not
know how close they were to success when they decided to give up "
Controlling for an activity is also one of the very important aspects of the
time these events took place. The control here is the task of a leader.
Controls performed in many respects the work and the team's emotional
committees, the conditions of activities, the convenience of participants, the
time course of each session of the order has been made, and so on. The
purpose of the controls is that activities can be run as the order and concepts
that have been agreed in advance, so that these activities produce maximum
results.
And if there is not a problem due to unexpected obstacles, a leader must be
able to cope. At this stage need leaders who are able to take decisions
accurately and quickly. Task leader in this stage tend to be lighter than the
executive committee that a lot of work. But the greatest responsibility still
rests with the leader.
Most important in the control is how early it can be seen that deviations
occur. Both in the planning, implementation and organization. So with it can
immediately be corrected, anticipation and adjustments in accordance with
the circumstances that occurred.

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