INTRODUCTION TO MANAGEMENT UNIT-1

Introduction: Management is said to be what managers do. It also refers to people at the top level in the organization, concerned with Decision Making. Management is the art of getting things done by a group of people with the effective utilization of resources. An individual cant be treated as a managing body running any organization. A minimum of two persons are essential to form a management. These persons perform the functions in order to achieve the objectives of an organization. Definitions: Different Experts have expressed their views on what management is. The following are the different Definitions. According to Henri Fayol (1916) Management is to manage is to forecast and plan, to organize, to command, to coordinate and control. According to Peter F.DRUCKER (1955) Management is concerned with the systematic Organization of Economic resources and its task is to make these resources Productive. W.F.Glueck (1917) Management is Effective utilization of human and material resources to achieve the enterprise objectives.

Nature of Management: Management is Situational in nature: The same style of management can not work for the same situation every time. The change in the situation may call for a change in the style of functioning of the manager. Similarly at different points of time also, the style of functioning can be different. Management is science as well as an art:

Management is an art and a science. It is art in the sense of possessing of managing skill by a person. In another sense, management is the science because of developing certain principles or laws which are applicable in a place where a group of activities are co-ordinates. Universal application: The principles and practices of management are applicable to every type of Industry. Management is Intangible: Management is intangible activity. It cant be sum (or) touched but its presence can be felt every where in the form of results. How ever the managers who perform the functions of management are very much tangible and visible. It is complex: Management functions are complex. They call for a fairly professional approach to manage a given situation (or) organization. Managers have four types of resources: The four Ms are o Men o Money o Materials o Machines

Multidisciplinary: Management is basically multidisciplinary. It draws the ideas and concepts from such disciplines as psychology, sociology, economics, statistics, operations research, history ect. Management integrates the ideas and concepts taken from these

disciplines and present newer concepts which can be put into practice for managing the organization. Decision making: Management process involves decision making at various levels for getting things done by others. Decision making basically involve s selecting the most appropriate alternative out of the several. The quality of alternative which a manager selects determines the organizations performance. Therefore the success and failure of managers can be judged by the quality of decisions that they make. Management is a continuous process: The process of management mainly consists of planning, organizing, directing, and controlling the resources. The resources of an organization should be used to be the best advantages of the organization and the objectives to be achieved. The management function of any one alone can not produce any results in the absence of any other basic functions of management. So management is a continuous process. Importance of management:

Accomplishment of group goals: The achievement of objectives of a business depends up on three factors. 1. proper planning of available resources 2. adjusting possibility of business unit with existing business environment 3. and quality of decisions taken and control made by the business unit Are the factors responsible for achieving objectives?

Effective utilization of resources:

Materials, machinery and money are the physical factors of production. They are scarce in nature. The efficient use of these resources depends up on the efficiency and motivation of workers. Management makes the workers efficient thought training, supervision and inspiring leadership. Management integrates physical and human resources for relating objectives.

A tool for personality development:

Management gives directions to workers for effective performance of a job. Besides, new methods and techniques are taught to workers. The training facilitates are arranged by the management. In this way management is a tool to develop the personality of workers to raise their efficiency and productive ability. To incorporate innovation: Today changes are occurring at a very fast rate in both technology and social process and structure. These changes need to the incorporated to keep yhe organization alive and efficient. Therefore business requires high degree of specialization high level of competence and complex technology. All these require efficient management so that organization works in the most efficient way.

Co-ordination and team spirit:

All the activities of business are grouped department wise. Management co-ordinates the activities of different departments and establishes team- spirit to achieve the objectives.

Concept of Organization: Introduction: Organization is a mechanism or structure which helps the activities to be performed effectively. The organization is established for the purpose of achieving the business objectives. The word organization is derived from the word organism which means an organized body with connected interdependent parts sharing common life. When a group of persons working together to achieve a common goal is called as organization. Meaning: Organization is the detailed arrangement of work and working conditions in order to perform the assigned activities in an effective manner. Organization can be compared to a human body. The human body consists of hands, feet, eyes, ears, nose, fingers, mouth etc. These parts are performing their work independently and at the same time, one part can not be a substitute to another. The organization consists of different departments. Each department performs its work independently and can not be a substitute to another. Definition: According to Mc Farland an identified group of people contributing their efforts towards the attainment of goals is called an organization. It facilitates administration: When organization structures are created, organizational procedures are developed, lines of communication established, the task of administration is made easier. In other words, the top management decisions can be put into practice with ease.

It facilitates growth and Diversification: The business house can grow and diversify only when their internal organization is strong and result oriented.

It stimulates creativity: If the organization grant full freedom to its staff to be more creative and enterprising. Organization emerges stronger when this people are highly productive, independent and empowered. Functions and Management: According to Koontz there are seven functions. They are as follows. Planning

Organizing

Staffing Directing Controlling Communication Co-Ordination

Planning: Planning is the primary function of management. Nothing can be performed without planning. Planning is a process which involves thinking before doing. In order to achieve the business objectives the organizations plans what is to be done, when it is to be done, how it is to be done by whom it is to be done. Planning is a continuous process takes place at all levels of management. Definition of Planning: Different authors of management have defined the term planning in different ways. According to Koontz and ODonnell planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. It bridges the gap from where we are to where we want to go. According to M.S.Hurley planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programs from among alternatives. According to Henry Fayol planning is deciding the best alternatives among others to perform different managerial operations in order to achieve the pre determined goals. Elements of Planning:

Forecast Objectives Policies Procedures Programs Strategies Schedules Budget

Organizing: Organizing refers to the process of grouping the related activities and assigning them to a manager with authority to supervise it. Responsibility is fixed on every manager for the achievement of the given plans. Fayol explains organization as a structure of relationships. It explains superior subordinate relationships organizing shows how the tasks can be achieved with the given resources. Staffing: Ascertain how many positions are there in the organization and at what level. Once this information is available, the next task is to collect details such as what type of candidates are required for each position and accordingly fill up these positions with the right people. Staffing is a process which includes recruitment, selection, training, placement, appraisal, promotion and career planning. In small organizations all these are taken care of by the manager himself. But in large organizations a separate department called personnel department look after there functions and this is headed by a qualified professional manager called personal officer. Directing: After filling the positions in the organization with the right kind of people, the next task is to guide and enable them to achieve the common goals. Directing is a process of issuing orders & Instructions to guide & teach the subordinates the proper method of work & ensuring that they perform their jobs as planned. Leading: An effective manager should also be an effective leader. The leader to be effective should necessarily understand his/her followers and accordingly, assume an appropriate style of functioning.

- Authoritarian - Democratic The success stories reveal that such democratic leaders who involves their subordinates in the decision making process are more successful in achieving their goals. Motivation: The process of stimulating the employees to perform more effectively using their abilities and full potential is called motivation. The employee gets stimulated when his social and psychological needs are met. The factors of motivation categorized into two types. Financial Non financial Financial factors includes salary package, Bonus, overtime, allowances, medical, telephone bills and so on. Non financial factors include appreciation from the top, career growth, flexible working hours. Controlling: It is the process of measuring the current performance of the employee and assess whether the given objectives are achieved or not. It involves

Measuring the actual performance of the employees.

Comparing it with the targets

Taking follow up action that is corrective or remedial

action for improving the performance if necessary. Communication: It is the process of creating, transmitting & interpreting messages, ideas, facts, opinions and feelings. The vital function of the manager is to communicate to his staff as to what they should do through orders, meetings,

Circulars and notices. The employee also will report the manager about their progress in completing the tasks. This implies that communication is always a two way process. An important part of the communication is feed back. Co Ordination: Co-Ordination refers to the process of arranging group effort in such a way that the common purpose is achieved effectively and efficiently. Principles of Management: Management is a science having certain principles. These principles are the result of long experience of managers in different fields. They are designed mainly to provide better understanding of a business. Henry Fayol a French mining engineer and chief executive state a set of 14 principles of management. They are 1. 2. 3. 4. 5. 6. interest 7. 8. 9. 10. 11. 12. 13. 14. Division of work Authority & Responsibility Discipline Unity of command Unity of direction Subordination of individual interest to general Remuneration of personal Equity Security (or) stability of Tenure of personnel Initiative Unity is strength Centralization Scalar chain Order

Division of work: It refers to Division of work to be done into a number of parts and entrusting each part to a specialty of that job which promotes efficiency. specialization. Therefore Division of work means Specialization increases output by making

employers more efficient. It is applicable to all kinds of work and all levels of the organization. Authority and Responsibilities: Authority is the right to give orders to the subordinates. Responsibility means the duty which the subordinates are expected to perform the work in the manner as desired by the superior authority. Managers need authority to get things done through others. Authority is closely related to responsibility. Both go hand in hand. Those who accept the authority should be willing to share responsibility Discipline: Discipline means getting obedience to rules and regulations of the organization. Discipline is necessary for smote functioning of the organization. According to Henry Fayol an effective discipline requires Good superiors at all levels Agreement with employees as clear as possible Ensuring that penalty are judiciously imposed. Unity of command: Every employee should receive orders and instructions from only one superior. If not they may get confusion. The employee will not be able to carry out the orders in a proper manner. The employees work will be confused if they have to report to more than one superior.

Each employee will receive clear cut orders

from one boss only Authority and responsibility relations will be clear to Everybody Orders and instructions of every executive will be honored

There

will

be

harmonious

relations

between superiors & Subordinates.

Unity of direction: According to this principle there should be one head and one plan for a group of activities having the same objectives. Unity of direction helps in effective management of the enterprise. If this principle is not followed there will be unnecessary duplication of effort & wastage of resources. Remuneration for personnel: Workers should be paid fair wages for their services. Remuneration should enable the employees to lead satisfactory life which creates harmonious relations between employees and management. Equity: This principle of fayol states that managers should be fair and impartial in their dealings with subordinates equity ensures smooth cordial relations between the management and the labor. The management should be impartial and should not discriminate as regards sex, color, caste religion etc. Security or stability of Tenure of Personnel: Employees cannot work efficiently unless their job is secured. Therefore the management should ensure security of job to the employees. No employee should be removed with in a short period of time. Management should be removed with in a short period of time. Management should remove the feeling of insecurity of job from the minds of all employees.

Initiative: According to Fayol initiative means freedom to propose a plan and to execute. He wanted that subordinates should be given an opportunity to take some initiative in thinking and executing the plans. Employees get satisfaction when they are welcomed to make any suggestions. It provides job satisfaction and develops interest of the employees to their jobs. Unity is strength:

This is the principle of unity is strength. Management should maintain harmonious relations among employees as the unity of the employees in a greater source of strength to the organization. They should not follow the policy of Divide & Rule. Centralization: It refers to centralization of authority at one place and at one level in the organization on the other hand decentralization refers to the dispensal authority to the lower levels in the organization. Small firms have absolute centralization because the management orders go directly to subordinates. Scalar chain: The graded chain of authority from top to bottom through which all communications flow is termed the scalar chain. According to Fayol scalar chain is the chain of superior from the ultimate authority to the lowest level in the organization. A B C D E Y Z W X

Order: People and materials should be in the right place at the right time, Right man for the right job and right materials for the right person would ensure systematic utilization of resources and manpower. Maslows need Hierarchy: Abraham H. Maslow, an eminent American psychologist, developed a general theory of motivation known as the need hierarchy theory. According to this theory there are five categories of human needs.

Physiological needs Safety needs Social needs Esteem needs

Self actualization needs 5. Self actualization Needs 4. Esteem needs 3. Social needs -

2. Safety needs 1. Physiological needs

Physiological needs: The physiological needs related to the survival and maintains of human life. These needs include such things as food, clothing, shelter, air, water and other necessaries of life. Safety needs: When physiological needs of a man are reasonable fulfilled other levels of needs become important. In this hierarchy next level is safety. Organizations can influence these needs through pension schemes, insurance plans etc. Esteem needs: Esteem needs are concerned with self respect selfconfidence, a feeling of personal worth, feeling of being unique and recognition. Social needs:

Man cant live in isolation. He wants to love and be loved by others. These needs refer to the needs of the love & social security. Organization can influence these needs through supervision, communication system workgroups etc Self actualization needs: These needs are also known as self- fulfillment needs. These needs indicate the strong desire to achieve something, particularly in view of the potential one has. Douglas McGregor theory of X & Y: Douglas McGregor presented two sets of assumptions managers make about the nature of their employees. These sets are named as theory X and Y. Theory X: Employees are inherently lazy. They require constant guidance and support. Sometimes 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: 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 out perform others.

Most of them are highly imaginative, creative and display

ingenuity in handling organizational issues. Hertzberg two factor theory of motivation: Fredrick Hertzberg developed a two factor theory of motivation Hygiene factors ( dissatisfies) Motivators. Hygiene factors: These are the basic requirements such as company policies and procedures, salary, security, supervision, working conditions, personal and social life and so on. If these are provided it may not lead to happiness. But if they are not provided it may lead to unhappiness. In other words hygiene factors do not motivate. These set of minimum criteria for normal functioning of the organization. If these are provided people can work in the organization in the normal way are not provided it result in dissatisfaction. Motivators: Motivators refers to higher order needs such as recognition on the job front, awards and rewards, challenging assignments, promotions and so forth. Where at least a few are taken care of it leads to satisfaction, if not it may not result in satisfaction. F.W Taylors Scientific Management theory: F.W Taylor is well known as the father of Scientific Management. Fredric Winslaw Taylor spent a lot of time for finding solutions to the problems on stop floors with an aim to increase the efficiency. Taylor noted in his observations that the tools and equipments used by the workers on shop floor were primitive in nature& the workers intentionally delayed the work. He himself

spent his life time on a shop floor as a worker by rose to the level of manager. Taylor developed and defined tools and equipments which could reduce the fatigue of the workers by using standardized equipments which led to increase in the efficiency and ultimately productivity of the shop. The elements of the principles of scientific management suggested by F.W.Taylor are as follows. Separation of Planning and doing: Taylor emphasized the separation of planning aspect from actually doing the work. He said that planning should be left to the supervisor and the workers should emphasis only on optional work. Functional Foremanship: Taylor evolved the concept of functional foremanship based on specialization of functions, which could improve the planning work sufficiently besides keeping supervision on workers. Job Analysis: Job Analysis is undertaken to find out the best way of doing the things which requires the least movements, consequently, less time and cost. Standardization: Standardization should be maintained in respect of instruments and period of work, working conditions. Scientific selection and training of workers: Taylor has suggested that workers should be selected on scientific basis taking into account their education, work experience, aptitude, physical strength etc. Mental Revolution: Mutual co-operation between management and workers can be achieved through mental change from conflict to co-operation in both parties.

Mayo's Hawthorne Experiments George Elton Mayo was in charge of certain experiments on human behavior carried out at the Hawthorne Works of the General Electric Company in Chicago between 1924 and 1927. His research findings have contributed to organization development in terms of human relations and motivation theory. Flowing from the findings of these investigations he came to certain conclusions as follows:

Work is a group activity. The social world of the adult is primarily patterned about work activity. The need for recognition, security and sense of belonging is more important in determining workers' morale and productivity than the physical conditions under which he works. A complaint is not necessarily an objective recital of facts; it is commonly a symptom manifesting disturbance of an individual's status position. The worker is a person whose attitudes and effectiveness are conditioned by social demands from both inside and outside the work plant. Informal groups within the work plant exercise strong social controls over the work habits and attitudes of the individual worker. The change from an established society in the home to an adaptive society in the work plant resulting from the use of new techniques tends continually to disrupt the social organization of a work plant and industry generally. Group collaboration does not occur by accident; it must be planned and developed. If group collaboration is achieved the human relations within a work plant may reach a cohesion which resists the disrupting effects of adaptive society.

What happened during the experiments

What happened was that six individuals became a team and the team gave itself wholeheartedly and spontaneously to co-operation in the experiment. The consequence was that they felt themselves to be participating freely and without afterthought and were happy in the knowledge that they were working without coercion from above or limitation from below. They were themselves satisfied at the consequence for they felt that they were working under less pressure than ever before. In fact regular medical checks showed no signs of cumulative fatigue and absence from work declined by 80 per cent. It was noted too, that each girl had her own technique of putting the component parts of the relay together - sometimes she varied this technique in order to avoid monotony and it was found that the more intelligent the girl, the greater was the number of variations (similar to McClelland's research findings into achievement motivated people.) The experimental group had considerable freedom of movement. They were not pushed around or bossed by anyone. Under these conditions they developed an increased sense of responsibility and instead of discipline from higher authority being imposed, it came from within the group itself.

The findings To his amazement, Elton Mayo discovered a general upward trend in production, completely independent of any of the changes he made.

His findings didn't mesh with the then current theory (see F.W. Taylor) of the worker as motivated solely by self-interest. It didn't make sense that productivity would continue to rise gradually when he cut out breaks and returned the women to longer working hours.

Mayo began to look around and realized that the women, exercising a freedom they didn't have on the factory floor, had formed a social atmosphere that also included the observer who tracked their productivity. The talked, they joked. they began to meet socially outside of work.

Mayo had discovered a fundamental concept that seems obvious today. Workplaces are social environments and within them, people are motivated by much more than economic self-interest He concluded that all aspects of that industrial environment carried social value.

When the women were singled out from the rest of the factory workers, it raised their self-esteem. When they were allowed to have a friendly relationship with their supervisor. they felt happier at work. When he discussed changes in advance with them, they felt like part of the team.

He had secured their cooperation and loyalty; it explained why productivity rose even when he took away their rest breaks.

The power of the social setting and peer group dynamics became even more obvious to Mayo in a later part of the Hawthorne Studies, when he saw the flip side of his original experiments. A group of 14 men who participated in a similar study restricted production because they were distrustful of the goals of the project.

The portion of the Hawthorne Studies that dwelt on the positive effects of benign supervision and concern for workers that made them feel like part of a team became known as the Hawthorne Effect; the studies themselves spawned the human relations school of management that is constantly being recycled in new forms today, witness quality circles, participatory management, team building, et al. Incidentally, the Hawthorne Works the place where history was made, is history now itself. Western Electric closed it in 1983. The Hawthorne effect today In the training world, the Hawthorne Effect is a chameleon. Ask several trainers and you'll probably get several definitions, most of them legitimate and all of them true to some aspect of the original experiments by Elton Mayo, in Chicago that produced the term.

It has been described as the rewards you reap when you pay attention to people. The mere act of showing people that you're concerned about them usually spurs them to better job performance. That's the Hawthorne Effect. The Hawthorne Effect at Work Suppose you've taken a management trainee and given her specialized training in management skills she doesn't now possess. Without saving a word, you've given the trainee the feeling that she is so valuable to the organization that you'll spend time and money to develop her skills. She feels she's on a track to the top, and that motivates her to work harder and better. The motivation is independent of any particular skills or knowledge she may have gained from the training session. That's the Hawthorne Effect at work.

In a way, the Hawthorne Effect can be construed as an enemy of the modern trainer. Carrying the theory to the edges of cynicism, some would say it doesn't make any difference what you teach because the Hawthorne Effect will produce the positive outcome you want. .

Levels of Management and their functions: There are three broad levels of management Top level Middle level Lower level These are after termed as the management pyramid as shown below. Chief Executive Department Heads LEVEL Supervisors LOWER TOP LEVEL MIDDLE

Thus the people of an organization are arranged in a hierarchy and they have the relationship of superior subordinate, except the person at the top most position who is superior alone and the person at the lower level who is subordinate alone. Functions of Board of Directors: Acting as trustees for the use of companys properties. Determining basic objectives and policies. Selecting the top executives and determining over all organization structure. Approving budgets. Checking and controlling top managers. Performing legal functions covered under companies act. Functions of Chief Executive: Formulating of long-term plans and making strategic decisions

Performing staffing function like appointing senior

personnel, fixing pay structure, etc. Ensuring that actual work is going on according to plans Middle Management: Performing various functions so that top management gets enough time for integrating overall functions of the organization Co-operating among different levels of management Training employees for better functioning Lower Management: Planning the activities, classifying and assigning jobs to workers. Guiding workers about work procedure Solving problems of working relating to jobs Maintaining discipline among workers.

Leadership Styles: Leadership is one of the most investigated areas of management. Leadership is the process of influencing the behavior of others towards the accomplishment of goals in a given situation. It is an important element of directing process. Definition: According to George R.Terry leadership is the activity of influencing people to strive willingly for group objectives.

Importance of Leadership: Leadership is an important factor for making any type of organizational successful. The success, development and growth of organization depends on the leadership qualities of its managers. Guiding people: Leadership should acts as a friend, philosopher and guide to his followers and takes the lead in all activities. Developing team work Maintaining discipline Building Morale Implementing change

Leadership Styles: Autocratic (or) Authoritarian Leadership Strict Autocrat Benevolent Autocrat Incompetent Autocrat Democratic (or) participative leadership Likerts management system

Autocratic (or) Authoritarian leadership: An autocratic leader exercise complete control over the subordinates. He centralizes power in himself and takes all decisions without consulting the leader givers orders and experts the subordinates to follow them unquestioningly. He uses rewards and holds threat of penalties to direct the subordinates.

Strict Autocrat: He follows autocratic styles in a very strict sense his method of influencing subordinates behavior is through negative motivational that is by criticizing subordinates. Imposing penalty etc. Benevolent Autocrat: He also centralizes decision Making power in him, but his motivation style is positive. He can be effective in getting efficiency in many situations. Incompetent Autocrat: Sometimes superiors adopt autocratic leadership style. Just to hide their incompetence because in other styles they may be exposed before their subordinates. Advantages of Autocratic Style: Autocratic leadership style permits quick decision making.

It provides strong motivation and satisfaction to the

leader who dictates terms.

Less competent subordinates also have scope to work in the organization as they do negligible planning, organization and decision making. Disadvantages: Autocratic leadership style leads to frustration, low morale and conflict among subordinates. Full potentials of subordinates and their creative ideas are not utilized. Democratic (or) Participative leadership: A consultative or democratic leader takes decisions in consultation and participation with the subordinates. He decentralizes authority and allows the subordinates to share his power. A democratic leader provides freedom of thinking and expression. He listens to the suggestions grievances and opinions of the subordinates. Advantages: Consultative leadership improves the job satisfaction and morale of subordinates.

Disadvantages:

The employees productivity is high

because they implement the decision whole heartedly. Labor absenteeism and labor turnover are reduced.

 Democratic style is time consuming and may results in delays in decision making. Some people in the organization what minimum interaction with their superiors for them these techniques is discouraging instead of encouraging. Likerts management system: Rensis likert and his associates at the University of Michigan U.S.A. conducted an extensive survey of management styles and patterns in large number of organizations. Likert developed a continuum of 4 systems of management. In his management systems, likert has taken seven variables of different management systems. These variables include. Leadership Motivation Communication Integration influence Decision making process Goal setting and Control process. A brief description of Likerts four management system is given below. System I: Exploitative Autocrat: The manager under this system make all work related decisions and order their subordinates to carry out the decisions. The

Communication between the manager and his subordinates is highly formal in nature and downward in direction. Such managers believe in threats and punishment to get things done. They exercise strict supervision and control over the subordinates. System II: Benevolent Autocrat:

In system 2 managers are also autocratic but they are not exploitative. They adopt a paternalistic approach towards the subordinates. They allow some freedom to subordinates to carry out their tasks with in the prescribed limits. The subordinates are rewarded for accomplishment of goals. But the subordinates who do not carry out their tasks are treated harshly. System III: Consultative: Managers under this system set goals and issue orders after discussing them with the subordinates. They take major decisions themselves and allow subordinates to carry on routine decisions subordinates are face to discuss the work related matter with the managers. System IV: Democratic: Under this system goals are set and work related decisions are taken by the subordinates. Managers are friendly and supportive in their attitudes towards the subordinates. Social Responsibilities of Business: Business is considered as a part and parcel of that social, political and economic system. It can be regarded as the activity carried on by the people, through the people, and for the people. Business, it receives inputs from the society in the form of raw materials, labor, capital, information and it is responsible for the efficient utilization of resources and for the delivery of goods and services to the society. The interest Groups: Social Responsibility requires the identification of various interest groups which may affect the functioning of a business organization. Share holders: The first responsibility of management is to protect the interest of shareholders. The following are the major responsibilities.

 To provide fair return on the capital invested by them. Share holds must be provided with adequate representation and participation in the management. They must be provided with accurate and complete information as regards the working and progress of the business. Employees (or) Workers: These people have direct interest in the organization because by working there, they satisfy their needs. It is the responsibility of management to protect the interest of workers in the organization.

Management must allocate work according to

suitability of each worker so as to give him complete job satisfaction. To motivate workers through financial and non financial rewards and give due recognition to workers. Management should pay fair and reasonable wages and other financial benefits to workers. Management must ensure complete safety of workers engaged in hazardous work. Consumer: A customer may broadly be defined as a person who has a favorable impression of a company and its products & services. Management owes a primary obligation to give fair deal to customers.

The business must provide goods and services which

are needed and desired by the consumers. Customers should be charged a fair and reasonable price. The distribution of goods and services should be widespread so that customers do not face any problems in procuring them. Supplies, Creditors, Competitors:

Creditors, supplies and competitors affect the organization in various wages. So, the management is responsible to fulfill its obligations to them.

Management should create healthy and

cooperative inter business relationship between different business.

Management should provide accurate and

relevant information to creditors and supplies. Payments of price of raw materials, interest on borrowings other charges should be prompt. Government: Government is very closely related with business system of the country. It provides various facilities for the departments of business. Towards the government a business owes the following responsibilities. Management should be low abiding citizen Management should pay taxes and other owes fully, timely and honestly. It should not corrupt public servants & democratic process. It should not buy political favor by any norms. In times of natural calamity or disaster such as floods, earthquake etc. It must whole heartedly work and contribute towards the rescue and relief work.

UNIT II ORGANIZATION

Organization is the system through which the resources of Men, materials, machinery and money are brought together in orderly way to turn out finished goods at the minimum cost earning maximum profits. Definition: It can be defined as an identifiable group of people contributing their efforts towards attainment of common goods. Organization as a group: It is a concept in which the organization is considered to be a group of people who are bonded together to perform various activities to achieve the common goal. Organization as a structure: According to this concept organization is a structure which defines the relationship among individuals & positions in the organization. Organization as a chart: Organizational chart is the graphical representation of structural relationship among different functions & persons in the organization.

Managing Director

General Manager

Senior Manager production

AGM purchases

Senior AGM Manager Marketing s Quality

AGM AGM Marketing Personnel

AGM Personnel

Manager machine show

Manager & Direct Material & capital equipment Manager Indirect Materials

Manager Incoming Quality

Manager sales

Manager recruitment

Manager assembly

Manager product quality

Manager services

Manager Training & Developme nt

Need and importance of organization: To identify and classify required activities. To group the activities necessary to attain objectives.

To assign each group to a manager delegating authority

necessary to supervise. It increases the managerial efficiency. Organization facilitates effective communication and coordination. Organization develops managerial abilities. Departmentation : Basic need for departmentation arises because for: : Specialization of work. Simplification of managerial task. Limitation on the number of subordinates that can be directly sucontrolled by the superiors. IMPORTANCE: Increase of efficiency.

Fixation of accountability.

Advantages of specialization. Development of manager. Facility in appraisal.

Better control.

METHODS OF DEPARTMENTATION: * Departmentation by simple number : This method is used to total the no. of persons who are performing the same duties and are under the supervision of a manager. In this method the main limitation is that it is assumed that the success of work depends only upon the no of person involved. But actually it also matters that what these people do where they work or what they (workers with computers, pen, clock etc.) work with. Moreover it is important to know how many specialized persons are there on a group instead of (skilled and unskilled) total no. of persons in a group. Advantages - Greater efficiency -As complexity economies increases, harder of scale to coordinate through

Disadvantages - Strong control at top -Lack of general managers . *Departmentation by time : In this the activities are grouped on the basis of time the example of this kind of departmentation is Hospital where round the clock patient care is essential. Advantages: 1. Services can be provided round the clock or at least beyond the 8-hour shift. 2. Better use of the machines - using the same machine for more than 8 hours. 3. People can work at different time of the day and hence can take advantage of the rest of the day - like the students can work in the evening shifts etc.

4. Processes requiring more than 8 hours at a stretch can also be undertaken. Disadvantages: 1. Coordination and communication will be major problem though it can be tackled one need to take great care as there are chances for lapses. 2. Supervision during the night shifts is generally lax. 3. There is always a fatigue factor setting in either in men or in machine. Types of Deparmentation: *Departmentation by Function In this case activities are grouped according to the similarity within the function of the organisation. The organisation may be divided into departments on the basis of functions such as production, marketing, finance, personnel, and-so-on. These functions can further be divided into sub functions in accordance with the need of the organisation. Function wise Departmentation Under each of these five managers, there will be subordinate managers and under them, the subordinate staff. The advantages of this type of structure are as follows: (i) It is a logical reflection of functions. (ii) It follows the principle of specializations. (iii) Maintains power and prestige of major functions. (iv) Inter-departmental co-ordination is facilitated. (v) The structure is simple, logical and easy to understand. (vi) Provides a good means of control at the top. There are also some disadvantages: (i) Responsibility for profits tends to be at the top.

(ii) There may be chances of heavy centralization in decisionmaking. (iii) Where geographical centralization is desirable or required, this form becomes unsuitable. (iv) This is not very suitable where product lines have to be emphasized. (v) There is a lower potential for manager development *Departmentation by Territory: Grouped and assigned to a manager. When the activities of an organisation are (physically or geographically) widely dispersed, territorial divisions may be created. Such divisions take the advantage of the intimate knowledge of the local conditions possessed by the executives. Ex. CBSE (Delhi Zone, Allahabad zone, Chennai zone etc) area wise is divided; function of each zone will be different. Territorial or Geographical Departmentation The advantages of such departmentation are: (i) Regional expertise is generated and managers can tackle customers or competition better. Places responsibility at lower levels. (ii) Proximity will reduce costs of operation and administration. (iii) Places emphasis on local markets and problems. Local conditions might warrant different types of selling. This is possible only in territorial departmentation. (iv) Improves co-ordination at the regional level. (v) Better face-to-face communication with local interests in mind. (vi) Better manager development. Some disadvantages are listed as follows: (i) Involves higher costs of co-ordination and control from headquarters.

(ii) Results in more managerial levels which increases overhead costs. (iii) Unsuitable for departments like Finance, where no gains are possible by specialisation on local factors. (iv) Increases problems of the top management control * Customer Departmentation: In customer-based departmentation, departments are created around the markets served or around marketing channels. Wholesale, retail, and export customers are examples of such departmentation Ex TCS has dealer N/W co-operate marketing ( more volume of sale ) institutional market (sale related to education), direct marketing (door - to - door). In this case the activities are grouped on the basis of nature of customer. Departmentation by Customers Some advantages of this type of structure are: (i) Greater specialized customer service. (ii) Where marketing channels are considerably different for various types of customers, this type of structure is very useful. Some disadvantages of this type are: (i) May not be enough work for certain types of customers. Hence, under employment of facilities and manpower specialized in terms of customer groups. (ii) Problems of co-ordination might pose difficulties. (iii) Unequal development of customer groups. * Process or Equipment Departmentation: In process departmentation, various manufacturing processes are taken as the basis for dividing the activities. Spinning, weaving, dyeing, etc. can form the examples for such a departmentation. In this case the activities are grouped around a process or a type of equipments. Ex. Fan Blades( cutting,

painting, attachment.) Marketing Direct, Tele Marketing, Dealership etc * Departmentation by Product : When the activities associated with each product or group of closely related products are combined into relatively autonomous and integrated units within the overall framework of the company, such an organisation is described as product departmentation. It enjoys the advantage of specialized product knowledge and promotes coordination of different activities connected with a particular product. Activities are grouped on the basis of product - line. Bajaj - (Scoter, motorcycle, Auto, Mopeds Divisions) Product wise Departmentation The advantages of this type of structure are: (i) Places greater effort on individual product line. (ii) Better customer service arising from greater product knowledge. (iii) Simplifies departmentation of profitability of each product line. Responsibility for profits is at the Division level. Decentralisation: Introduction Decentralisation of authority is another concept closely related to centralisation. The delegation of authority by an individual manager is closely related to organizations Decentralisation of authority. Decentralisation of authority means conscious/systematic effort to bring dispersal (spreading) of decision making power to the lower levels of the Organisation. In decentralisation, only broad powers will be reserved at the top level. Such powers include power to plan, organise, direct and control and maximum powers will delegated to the authority at the lower level. Decentralisation is just opposite to centralisation. Under centralisation, authority is mostly concentrated at the top level management. Centralisation and decentralisation are mutually

dependent. In a large Organisation, the process of centralisation and decentralisation co-exist and reinforce each other. Decentralisation is a natural development when the Organisation grows large and complex. Here, centralisation of management is neither possible nor desirable. The only practical solution is to divide the Organisation into decisionmaking units and giving the powers to take routine types of decisions in regard to the functioning of those units. This is decentralisation in practice. In decentralisation, systematic efforts are being made to delegate to the lowest levels all authority except that which can only be exercised at the central points. Decentralisation is delegation not from one individual to another but delegation to all units in an Organisation. A company is said to be highly decentralized, when the delegation is company-wide in all functions and divisions of the company and also for a wide range of authorities and responsibilities. Decentralisation is different from centralisation as in centralisation, the decision making power is in the hands of one person only. We observe such centralisation in sole trading concerns. It is also noted that centralisation is one feature of traditional management in India while decentralisation is a normal practice under professional management. Definitions of Decentralisation: According to Henry Fayol, "Everything that goes to increase the importance of the subordinates role is decentralisation, everything that goes to reduce it is centralisation." According to Louis Allen, "decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central point." This definition makes it clear that even in decentralisation, delegation to the lowest levels is not complete as the basic functions in the management process are centralized. Advantages / Importance of Decentralization:

1. 2.

Decentralisation helps to improve the quality of

decisions/decision-making at the top level management: Decentralisation of authority among other executives at all levels in the Organisation relieves the top executive of the excessive burden saving his valuable time, which he can devote to more important and long-term problems. This is bound to improve the quality of his decisions regarding such problems. Decentralisation facilitates diversification of

activities: It is a matter of common experience that an Organisation with departmentation on the basis of products facilitates diversification of products or market even when the authority is centralized. Decentralisation takes this process a step further. Managers of semi-autonomous product divisions are able to utilise their skills and experienced judgment. This has a bearing on their products and the market. The enterprise also attains maximum possible growth. Decentralisation is beneficial when new product lines or new activities are introduced in an Organisation. Such policy creates self sufficient units under overall co-ordination of top level management.

3.

Decentralisation

encourages

development

of

managerial personnel: Most companies find lack of managerial talent as a limiting factor in their growth. A company cannot expand effectively beyond the scope and abilities of its managerial personnel. Capable managers, however, can be developed only by giving managerial jobs to suitable persons and delegating them the authority to make important decisions. Such wide exposure gives them opportunity to grow and to have self development for higher positions. The more talented and capable persons will learn and improve and qualify themselves for higher managerial positions. Only a decentralized Organisation can offer such opportunities to future managers without involving additional expenditure. A decentralized Organisation also allows its managers adequate freedom to try new ideas, methods or techniques. In brief, decentralisation creates a team of competent managers at the disposal of the company.

4.

Decentralisation

improves

motivation:

Research

conducted by social scientists has proved that the Organisation structure itself exercises some influence on the motivation of the people working within it. An Organisation structure which facilitates delegation, communication and participation also provides greater motivation to its managers for higher productivity. Decentralized Organisation structure is most favorable for raising the morale and motivation of subordinates which is visible through better work performance.

5. 6.

Decentralisation makes decision-making quicker and

better: Since decisions do not have to be referred up through the hierarchy, quicker and better decisions at lower levels can be taken. Divisional heads are motivated to make such decisions that will create the maximum profit because they are held responsible for the effect of their decisions on profits. Thus decentralisation facilitates quick and result-oriented decisions by concerned persons. Decentralisation provides opportunity to learn by

doing: Decentralisation provides a positive climate where there is freedom to make decisions, freedom to use judgment and freedom to act. It gives practical training to middle level managers and facilitates management development at the enterprise level.

Limitations of Decentralization: 1. Decentralisation may lead to the problem of co-ordination at the level of an enterprise as the decision-making authority is not concentrated. 2. Decentralisation may lead to inconsistencies (i.e. absence of uniformity) at the Organisation level. For example, uniform policies or procedures may not be followed for the same type of work in different divisions.

3. Decentralisation is costly as it raises administrative expenses on account of requirement of trained personnel to accept authority at lower levels. Even the services of such highly paid manpower may not be utilised fully, particularly in small organisations. 4. Introduction of decentralisation may be difficult or may not be practicable in small concerns where product lines are not broad enough for the creation of autonomous units for administrative purposes. 5. Decentralisation creates special problems particularly when the enterprise is facing number of uncertainties or emergency situations. The decision-making process gets delayed and even correct decisions as per the changing situations may not be possible.

Types of organization: Line organization Functional organization Line and staff organization Matrix organization Committee organization

Product organization

I. Line organization: It is one of the oldest types of organizations. It is also known as military type of organization in the part. In this organizations authority flows from top level to bottom level. Head of the departments are given full freedom to control their departments. A senior member has direct command over his subordinates. Board of Director General Manager

AGM Purchase Personnel Manager

Product Manager

Sales Manager

Financia l Manage
AGM Manager Superintend Personnel recruitment ent Workers Manager Training & Developmen t

Purchas e assistan Workers

Foreman

Supervisor

Workers

Workers

Advantages: Department heads are free to make decisions. Delay can be avoided.

Persons can be held responsible for their work individually. So

that each worker shall take care to complete tasks in the assigned duties/ jobs properly. This type of organization is easy to understand and is strong in discipline. Disadvantages: This organization is limited to small firms The departmental heads adopt their own methods which may sometimes lead to the waste of materials. II. Functional Organization:

F.W Taylor suggested this type of organization to overcome the Difficulties associated with middle level management in the line organization. Taylors functional organization suggested that everyone has direct and equal authority over the workers.
Board of of Direc Board Directors

MD and CEO MD and LEO

General Manager

Production Supervisor

Office Speciali sts

Shop Speciali sts

Route Clerk

Instructio n curd clerk

Time & cost clerk

Discipl inarian

Gang Boss

Speed Boss

Repair Boss

Inspectio n Boss

Route Clerk: He is responsible for planning route through which Workers material will pass from machine on stop floor. Instruction Clerk: He is responsible for giving instructions and the process to be adopted in production of components. Time and cost clerk: He lays down the standard time for completion of a particular task and then he records the actual time taken for completion based on the performance and the number of pieces produced, the wage iis decided by him. Disciplinary: He ensures the implementation of rules and regulations formulated to maintain discipline in the enterprise in terms of work and general behavior. Shop Specialists:

Gang Boss: He is responsible for arranging the machines & tools required for production Speed Boss: He ensures that the work is completed in the standard time. He decides on the optimum speed at which the work should be done. Repair Boss: He will look into the preventive maintenance, breakdown maintenance, predictive maintenance of all machines so that production does not suffer by faulty machines. Inspector or Inspection Boss: He ensures that the work is done according to the specifications of materials used and the products manufactured so as a whole inspection boss is responsible for maintaining the total product quality.

Advantages: This system ensures specialized knowledge and guidance for workmen through an expert. The functional heads are relieved of their routine work. They can utilize this spare time for the development and improvement in the working methods whenever needed. Disadvantages: The success of the sche3me depends upon proper coordination between different departments. If this is not done, the scheme is bound to fail. This is an expensive type of organization as it is involves large amount of money by way of salaries payable to the functional heads. Line and Staff organization:

Both line and staff organization suffers from some drawbacks. Line organization is autocratic in nature and staff organization does not have a strong control.
General Manager

Sales Manager

HRD

Productio n Manager

Maintenan ce Manager

Relationship

Training Manage r

Personn el Manage

Line Staff Relationship

Advantages: As the number of specialists is reduced, the organization becomes economical. The effective coordination of functional heads and supervisors is achieved. Sharing of responsibility is not possible at any level. It avoids confusion that prevails in functional organization Disadvantages:

The prestige of the line executive suffers as his work is

planned and decisions are taken by somebody else. This hampers his authority and the feeling of self-respect Matrix Organization: Matrix Organization is beneficial to implement when the organization has to handle such where there is a combination of small or large projects. It is a combination functional & project organization. It permits better planning, flexibility and services. In

case of matrix organization a person has to work under two bosses one is the profit manager and other is functional boss.
Board of Directors MD

General Manager

Manager Productio
Projects Manage r Skilled Assistan ts

Manager Engineer
Engineerin g Experts

Manage r
Finance Staff

Manag er HR
Persona l Staff

ojProj s

Advantages:

Project Skilled Engineerin Finance Persona Efficient and effective utilization of exiting available resources Manage Assistan g Experts Staff l r It is more flexible than a traditional functional organization ts Staff

Disadvantages: Dual relationship of having two bosses creates role conflicts and violates the principle of unity of command. Misunderstanding between the project managers and functional heads may creep up with reference to their authority. Committee Organization: The primary function of committee is to make or suggest decisions on problems requiring on integration of needs of various departments ideas. The permanent committees policy making and decision bodies such as executive committee, the purchase committee, finance committee, maintenance committee, promotion committee etc., where as an adhoc committee is formed to find appropriate solutions when specific problems arise.

Finance Committee

Board of Directors

Executive Committee

Purchase Committee

General Manager

Promotion Committee

Material Manager

Productio n Manager

Advantages:

Committee Organization improves the interpersonal

relationship which is a must for better management. In this type of organization, dealing with complex problems becomes simplified as everyone contributes in problem solving. Disadvantages: It consumes a lot of valuable time and money

MODERN TRENDS IN ORGANISATIONAL STRUCTURE DESIGNS So far all that we have discussed are parts of mechanistic organization structures. Organizations in the recent times have been gearing themselves to suit to the growing demands from their stakeholders in terms of responsiveness, flexibility, agility, adaptability etc. In this process, they are following organic structures which are more agile, flexible and adaptable to the changing circumstances. Virtual Organizations, cellular organizations, team structure, boundary less organization and inverted pyramid are different forms of organic structures that are widely seen among most of the sun-rise sectors such as financial services, Information Technology (IT) and IT enabled services. These structures have been contributing to the

organic growth of the organization. The main focus of organic structures is to do away with those activities which do not directly contribute to the growth of the organization and focus only on those activities which directly lead the organization for the achievement of the given goals. These are discussed below: VIRTUAL ORGANISATION Virtual organization facilitate competitiveness particularly when these organizations are part of the global economy. Here, there can be alliances and partnerships with other organizations almost all over world. It is a flexible Organization structure that removes the traditional boundaries. It allows easy reassignment and reallocation of resources to take quick advantage of shifting opportunities in global markets. Toa avoid disintegration and to attain the effective needed focus, the lead virtual organizations must have a shared vision, strong brand and high trust culture. CELLULAR ORGANISATION Organization structured around the units/cells that complete the entire assembly processes are called cellular organizations. In the modern organizations, cellular organizations, workers manufacture total product or subassemblies in teams (cells). Every team (cell) of workers has the responsibility to improve or maintain the quality and quantity of its products. Each team is free to reorganize itself to improve performance and product quality. These cells comprise self- managed teams. They monitor themselves and also correct where necessary on their own. Cellular Organizations are characterized by much smaller staff all over the Organization with middle management positions reduced and lean management members at the top. It is both a lean and the structure. TEAM STRUCTURE A structure in which the entire organization is made up of workgroups or teams is known as team structure. Team structures are both permanent and also temporary in nature as situation demands. Traditional Organizations are characterized by vertical structures and modern Organizations are identified by the horizontal i.e., team structures. We report to each other is the main feature of team structure. It leads to

boundary less Organization in a borderless world. In team structure, we find cross functional teams meant for improving lateral relations, solving problems, completing special projects and accomplishing routine tasks. A cross functional team comprises members from different functional departments such as marketing, finance, HR, production etc. Project teams are convened for a particular task or project and these get dissolved once task is completed. The intention hare is to quickly bring together the people with the needed talents and focus their efforts intensely to solve a problem or take advantage of a special opportunity. Here employees are more involved and empowered because of reduced barriers among functional areas. Sometimes, when there is pressure on teams to perform and there is no clear chain of command, team structures fail to deliver results. BOUNDARYLESS ORGANISATION As the name indicates, a boundary less Organization eliminates internal boundaries among subsystems and external boundaries with external environment. It is a combination of team and network structures with the addition of temporariness. Such type of Organization structure is characterized by spontaneous team work and communication. This replaces formal chain of command. It is a dynamic Organization structure where in organizational needs are met through a judicious mix of outsourcing contracts and alliances as and when needed. The key features of boundary less Organization include knowledge sharing, absence of hierarchy and bureaucracy, empowerment voluntary participation of expert members, technology utilization and temporariness. The focus is on mustering necessary talent and competencies required for the achievement of a task without any bureaucratic restrictions. Creativity, quality, timeliness, increase in speed and flexibility are the benefits the boundary less Organization yields. It also reduces inefficiencies. The boundaries less Organisation are highly flexible and responsive. These draw on talent wherever it is found. Sometimes, they are ineffective due to problems in communication. INVERTED PYRAMID This is an alternative to the traditional chain of command. This is a structure which is narrow at the top and wide at the base. It includes a few levels of management. For instance,

sales people and sales support staff sit on the top as the key decision makers for all the issues related to sales and dealing with the customers. Since the sales staff are in touch with the customer and aware of the requirements of the customers, they are given all the freedom to follow their own best judgment art all levels.

UNIT III OPERATIONS MANAGEMENT

Plant layout:
Plant layout can be defined as the process of determining a spatial location for a collection of physical production facilities suitable to manufacture a product or provide a service. It is concerned with arranging.

The manufacturing and servicing departments in the factory

site.

The machinery within there departments. The layout of individual work places.

Before the production facilities are set up it is necessary to study how best the plant layout can be arranged to minimize the bottlenecks in the production process. Significance: Plant layout studies are essential when. There is a change in the product design and this changes the sequence of operations or requires new operations. The management decides to manufacture a new product altogether The management wants to increase the output by using additional machinery or upgrading present machinery or increasing the present rate of capacity utilization. It is necessary to reduce the production costs. Shifting the existing plant to a new location In most of these cases it may be necessary to redesign or recognize the existing plant layouts. Role of plant layout:

Plant layout affects both the productivity and the profitability of a company. A good and effective plant layout minimizes the material handling efforts and costs.

Consequences of poor lay out:

If layout principles are not followed, the machinery can not be properly and systematically arranged. In such a case. Material handling costs will be high Production time is lost because the workers keep moving between different work stations

Working conditions can not be any safer.

Return on capital employed may be low.

Systems (or) Types of plant layout:

The major systems of plant layout are Product layout Process layout (or) functional layout Fixed layout This layout is followed only by such industries where the product decisions are finalized and may not change at least in the future. It is because a change in the product will call for a change in the plant layout.
R A w M S a T t o e r re I s a l s Finis hed good s store s Inspect

Product x
Department

Drill

Bore

Grind

Mill

Ream

For product x, the above layout displays six types of production operations. Drilling, Boring, Grinding, Milling, Reaming,

and after all these operations the product manufactured is inspected and sent to the finished goods stores. The machines are also arranged in their order. Advantages: Faster and cheaper production Lower cost of material handling Effective utilization of floor space Early monitoring

Team work benefits

Disadvantages: Discontinuity of production likely: Since all the machines are arranged in a sequence, if there is a breakdown in one machinery the entire manufacturing activity comes to an end. Huge capital outlay. Process (or) functional layout: If the equipment is arranged as per the nature or types of the given set of products operations major it is called process layout. Here all the machines will be placed in a section or department, all the bore machines are placed in another section, all drilling machines are put in another section, all drilling machines are put in another section so on.
Forging section sect
R A w M a t e I A l s 1 S T o r s 2 5 4 11 3

Milling section Welding section

Heat treatment Fi
ni sh e d g o o ds st or es

2 6 7

Tuning

Grinding

Drilling

Section

Section

Section

Inspection

Dept

Product P Product Q Advantages: Optimum utilization Flexibility Continuity Disadvantages: Higher material handling cost Higher wage bill Large Production cycle Fixed layout: Here the manufacturing facilities are fixed in their position. They cannot be shifted from one place to another place. This type of layouts is used in case of large projects such as building ships, manufacturing of aircrafts, heavy pressure vessels and automobiles. All spare parts, tools, equipment and men are brought to this point for further assembly and processing operations on this fixed manufacturing facility. Advantages: It does not involve large investment There is a high degree of flexibility in matters relating to product design, product mix and production volume. Disadvantages: Material handling cost will be very high. But there is no alternative other than moving all resources to the fixed layout position. At times, the resources may be under-utilized in case many jobs cannot be planned simultaneously.

Production: Production is any system, process or procedure developed to transform a set of input elements like men, materials, money, technology, informatio0n and energy into specified or desired set of output elements like finished goods and services improper quantity and quality. Input
Men Material Machinery Money Technology Information

Output Process
Conv erted Finished goods

Methods of Production:
Job Production Batch Production Mass Production Job Production: Here every job is different from the other in terms of type, cost, efforts, consumption of materials or its specifications. Normally the job production is the costliest. It may involve special machinery and special training for the labor. Ex: Binding section only one product they will produce. Batch Production: Here all the products manufactured under a batch are similar in terms of type, cost, efforts consumption of materials or the specifications. Through the product design consumers a good amount of time, the cost of product design per unit could be lesser. When compared to the costs in job production. Ex: The products manufactured under this method include pharmaceuticals, readymade garments, sheet-metal presses paints, many consumer products such as mineral water bottles and so on.

Differences between job, batch and Mass Production: Job Production

1. Number of units produced Every time only one product (or) service can be provided

Mass Production: This is also called flow production. Here the production can be undertaken in large and specialized machines and processes. Here production will be continuous they wont stop the production. Ex: The products such as TVs air conditions, cars, scooters and other are manufactured through mass production, cement, petrol etc.

Batch production

Mass Production

Every time a few It is a say 100 (or) continuous 1000 are production produced process

2. Design

From product to product the design differs

From batch to batch the design differs every batch has identical products

There is no change in design all units produced are based on one particular design in case of flow production Cost per unit is likely to be lowest of all methods of production

3. Cost per unit

Cost per unit changes from job to job

Cost per unit is relatively lower when compared to job production but keep on changing from batch to batch Process layout Relatively less time

4. Plant layout 5. Time require3d to set up machines

Process type Every time the job changes, setting up of machines may also change. Hence time required fro setting up machines is more

Product layout Once the machines set, the production continuous

6. Accuracy of Product quality

Tends to be satisfactory

Likely to be good

Likely to be very high

Site selection has an important bearing on the future progress of an organization. This problem arises when a new unit of production is to setup or expansion of existing unit is taken up. Location of a unit plays an important part in the design of a product, and the production methods applied together to determine the cost of production. The major objective of industrial concern is to maximize profit through minimum cost of production. It is possible only when the firm is of the right size and is located at the right place providing all sorts of economics. The following are other important factors which determine the location of an industry. Nearness to sources of raw material Nearness to the market Availability of suitable climate and topography God transport facilities Availability of labor Availability of sources of power Availability of water Availability of finance and other aids Land for further expansion Community attitude Various other factors Hospitals, market centers, schools, banks, post offices, police protection, fire fighting agencies, housing facilities etc.

Plant Location

Work Study Introduction:

All business organizations function with a sole motto of earning projects. So it is imperative that the people involved in the organization try to think and adopt various methods to reduce the cost of production. This is only possible when higher output of products is achievable with little or minimum amount of resources, so here comes the term productivity. In order to increases the productivity it is necessary to improve the method of doing work and to reduce wastages. Definition: Work study means the study of work . It is a technique that is employed to ensure the best possible use of

human and material resources in carrying out the specified activity. The aim is to product the optimal methods of performing a given job. Nature and Scope: The principal aim of work study is to bring efficiency and economy by making improvements in the method of doing the job wastage of resources will be reduced work study more concerned with human manual work. It deals with the efficient design and execution of manual work. It is extensively employed in agricultural operations, manufacturing, services, transportation and supply industries. Work study has two parts Method study / Motion study Work measurement / Time study

Work Study
Method Study (To study about different the taken Types of methods useful for work) the job) Work measured (To calculate to complete

Results in Higher productivity Benefits of work study: It determines the cost of the work performed. It saves, minimizes time since unnecessary movements are eliminated. It enhances productivity of the workers and machines It contributes to cost savings It enhances the employee morale It facilitates the organization to plan and achieve work targets.

Method Study

Method study is the systematic recording and critical examination of the existing and proposed ways of doing work as means of developing and applying easier and more effective methods, reducing costs and increasing efficiency method study attempts answering questions of the type what? When? How? Who? And where? Method study is used in order to effect solutions to variety of production problems. Such as workplace layout, equipment design, product, process design.

Method Study

Aim: To develop better working methods

Procedure Select the task to be studied Record all related facts about current (or) proposed methods Examine the facts critically considering the purpose, sequence, place & resources Develop the best possible method Define the best methods to developed Install the new method Maintain the installed method

Result Increased efficiency, cost effectiveness and productivity through a) Improved workplace layout b) Improved equipment design c) Production in worker fatigue d) Improved product / process design

Method Study outline Basic Procedure of Method study / motion study

1. 2.

Select: The task or work to which the method study

principles are to be applied is to be identified and underlying objectives, such as saving the costs, increasing productivity or eliminating unnecessary motions by the worker and so on are to be specified.

Record: The current process of doing the job has to be

recorded while doing so every detail however small it may be has to be recorded where the process is too long involving many stages of production, inspection, transportation the present process of doing the job is recorded sufficiently together will all the relevant information using the process chart symbols. Symbol Meaning Operation: (i.e., doing something) Operation involves change in the condition of a product Ex: Assembly of spare parts

Transport: (i.e., moving something from one location to another) Ex: Assembled PC is moved to inspection section

Storage: When pc is put into the store after inspection

Delay: Arises when the product waits for next stage in the process Ex: Machinery breakdown etc.

Inspection: To check whether the quality and quantity of the product is satisfactory or not.

Operation cum Inspection Inspection is taking place during the production process

Operation cum Transportation Assembly is taking place while the spares are transported by the belt conveyer.

3. Examine:

The recorded events are to be carefully examined in a sequence, even to the extent of questioning the very purpose of an activity. Thus all basic questions should be put forth especially those of the following types. Person: Who does this job? Purpose: Why it is to done? Is it necessary? Place: Where it is to be done? Why only there? Why not anywhere? Sequence: When it is done? Should it done in sequence? Method: How is it done? Is there any other method to do it?

4. Develop and Define:

Based on the recorded data the alternative methods of doing the same job more effectively are to be identified and evaluated from these alternatives the best one is selected and developed to suit the requirements.

5.

Install:
The new methods so developed are to be installed in a phased manner. As a part of installation adequate planning of schedules and deployment of resources should be taken care of.

6.Maintain:
Once the new method starts yielding the desired results it is necessary to maintain the new method without any change for sometime from time to time it should be monitored. The progress has to be received in the light of the experiences of the operating and concerned staff.

Aims & Objectives of Method Study:

To To To To To improve the layout of the work place suggest suitable changes in the working procedure make suitable changes in working environment improve upon the design of plant & equipment make convenient changes in the handling of materials

Work Measurement
Work measurement is also called time study establishes the time taken by a qualified worker to complete a specified job at a defined level of performance. Purpose of work measurement: We can know the production time We can know how much time is taking in a method

For fixing incentives, labor requirements.

Work Measurement

Aim: To develop Time standard

Procedure Describe the given work for measurement Break the job into elements Measure the performance of operator Determine the basic time Provide time allowance for fatigue etc Determine standard time

Results Increased efficiency and higher productivity through Scientific basis to develop incentive systems Maintain reasonable levels of employment Reliable means of planning and control Time Study Equipments: Time study equipments can be broadly grouped under two categories. a) Time measuring devices b) Time study boards and time study charts Time Measuring Devices: There are four types of time measuring devices Stop watch Decimal minute stop-watch Decimal hour stop-watch Motion picture camera Time recording machines Electronic timer

Statistical Quality Control

Quality: Quality is defined as customer satisfaction in general, fitness for use in particular. Statistical Quality Control: The process of applying statistical principles to solve the problem of controlling the quality control of a product or service is called statistical quality control. Objectives of SQC: Prompt identification of trend of quality deviations Take corrective actions Determination of the levels of Quality

 Reduction in scrap and rework Inspection: The process of measuring the output & comparing it to check whether it meets the given specified requirement or not is called inspection. Why Inspection necessary: To separate bad products from good products To rate product Quality

To minimize the cost, in terms of rework of the spoiled

or defective items. Inspection methods: Incoming Inspection Critical point Inspection Process Inspection Fixed Inspection Final Inspection Incoming Inspection: In this Method the Quality of the goods and services arriving into the organization is inspected. Critical Point Inspection: Inspecting at the critical points of a product manufacture gives valuable insight into the whole functional process. Process Inspection: Here the Inspectors goes around the manufacturing points in the shop floor to Inspect the goods purchased on time to time. Fixed Inspection: This Method is followed where the Inspection equipment can not be moved to the point of production Final Inspection: This certifies the Quality of the goods before they are shipped. The final inspection becomes crucial, particularly in product that are of a critical nature such as manufacturing of LPG cylinders and others. ISI (Indian Standards Institute) BIS (Bureau of Indian Standards) of government of India Techniques of Statistical Quality Control:

The Techniques of SQC can be divided into two parts Process Control Acceptance sampling Process charts are again divided into 4 types of charts. They are 1. x charts / mean charts 2. R charts / Range charts 3. C charts / control charts 4. p charts / Percentage Defective charts Acceptance sampling also divided into 3 types. Those are 1. Single sampling plan 2. Doubt sampling plan 3. Multiple / sequential sampling plan 4. Process charts / Control charts: Control charts are a graph in which the inspected results of a sample of the product are plotted from time to time. A control chart generally consists of three lines drawn on a graph. The central limit Upper control limit Lower control limit Through the graph one can judge at a glance whether the process is under control or not. These control charts were first developed by waltes A.Schewchart in 1924. Procedure for constructing X, R, C, D charts: Calculate the mean of average values of sample x Calculate the mean of sample range R Calculate control limit values for X,R,C,P Plot chart with no. of samples on x axis and values on yaxis.

n 2 3 4 5 6 7 8 9 10

A2 1.880 1.023 0.729 0.577 0.483 0.419 0.373 0.337 0.308

d2 1.128 1.693 2.059 2.326 2.534 2.704 2.847 2.970 3.078

d3 0 0 0 0 0 0.076 0.136 0.184 0.223

d4 3.268 2.574 2.282 2.114 2.004 1.924 1.864 1.816 1.777

Constant values table for x & R charts. Problem No:1 Construct an x & R charts from the data given below. The sample size is 5. Sample No. X Values Range 1 6. 0 5 2 6.4 5 3 6.6 4 4 6.6 8 5 4.4 5 6 5.8 8 7 5.4 7 8 4. 8 8 9 6. 0 9 1 0 6. 6 4 Total Ex = 59.6 ER = 63

Calculation of control limits in x charts:

Demings 14 principals
W. Edwards Deming, born in Sioux City IA on October 14, 1900, conducted a thriving worldwide consulting practice for more than forty years. His clients included manufacturing companies, telephone companies, railways, carriers of motor freight, consumer researchers, census methodologists, hospitals, legal firms, government agencies, and research organizations in universities and in industry. Dr. Deming received many other awards, including the Shewhart Medal from the American Society for Quality Control in 1956 and the Samuel S. Wilks Award from the American Statistical Association in 1983.

Consider the implementation of Deming's 14 Points for Management

1. Create constancy of purpose: for improvement of product and service with the aim to become competitive and to stay in business, and to keep providing jobs.

2. Adopt the new philosophy: We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. 3. Cease dependence on inspection to achieve quality: Eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. End the practice of awarding business: on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. 5. Improve constantly: and forever every process for planning, production and service. Improve quality and productivity, and thus constantly decrease costs 6. Institute training on the job: This should be a part of everybody's every day's activities. 7. Adopt and institute leadership:The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul as well as supervision of production workers. 8. Drive out fear :so that everyone may work effectively for the company because they want it to succeed 9. Break down barriers :between staff areas or departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service. 10. Eliminate slogans, exhortations and targets: for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force 11. Eliminate numerical quotas :for the workforce and numerical goals for management. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership. b. Eliminate the obsolete concept of "management by objective". Eliminate management by numbers, numerical goals. Substitute leadership 12. Remove barriers: that rob people of pride of workmanship-eliminate the annual rating or merit system. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, abolishment of the annual merit rating and of management by objectives 13. Institute a vigorous program: of education and selfimprovement for everyone. Let them participate to choose the areas of development 14. Put everybody in the company: to work to accomplish the transformation. The transformation is everybody's job.