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MANAGEMENT SCIENCE ChandraSekhar Patro
CSP MANAGEMENT MANAGEMENT SCIENCE (Common to Chemical, CSE, IT, ECE, EEE) Course Code: 13HM1102
SYLLABUS UNIT-I INTRODUCTION TO MANAGEMENT: Concept- nature and importance of management- functions of management- evolution of management thought- decision making process- designing organization structure- principles of organization – types types of organization structure. UNIT-II OPERATIONS MANAGEMENT: Principles and types of plant layout- work study- statistical quality control- control charts (R Chart, P Chart & C Chart- Simple numerical problems) – materials management- Need for Inventory Control- EOQ, ABC Analysis(Simple numerical Analysis)- Types of Inventory Analysis (HML. SDE, VED, FSN Analysis). UNIT-III HUMAN RESOURCE MANAGEMENT: Concept of HRM, HRD and PMIR- Functions of HR Manager – theories theories of motivation and leadership styles- Job Evaluation and Merit Rating, Welfare measures-statutory and non statutory compliance – grievance grievance handling UNIT-IV MARKETING MANAGEMENT: Marketing Management- Functions of Marketing Management- Marketing mix-Market segmentation - Marketing strategies based on product life cycle- Channels of DistributionConsumer Behavior and marketing research UNIT-V PROJECT MANAGEMENT: Project planning and control- Project life cycle- Development of network- Difference between PERT and CPM- Identifying critical path- probability of completing the project within the given time, cost analysis, - project crashing (simple numerical problems). TEXT BOOKS: 1. Ramanujam Naidu & Sastry, “Management Science”, Science”, 1st Edition, Himalaya Publishers, 2012. 2. Vijaya Kumar & Appa Rao, “Management Science”, Science”, 1st Edition, Cengage Publishers, 2012. 3. AR Aryasri, “Management Science”, Science” , 4th Edition, Tata McGraw-Hill, 2009. REFERENCES: 1. P Khanna, “Industrial Engineering & Management”, 2nd Edition, Dhanpat Rai, 2004. 2. Martand Telsang, “Industrial Engineering & Production Management”, Management”, 2nd Edition, S. Chand & Company, 2008.
CSP MANAGEMENT MANAGEMENT SCIENCE (Common to Chemical, CSE, IT, ECE, EEE) Course Code: 13HM1102
SYLLABUS UNIT-I INTRODUCTION TO MANAGEMENT: Concept- nature and importance of management- functions of management- evolution of management thought- decision making process- designing organization structure- principles of organization – types types of organization structure. UNIT-II OPERATIONS MANAGEMENT: Principles and types of plant layout- work study- statistical quality control- control charts (R Chart, P Chart & C Chart- Simple numerical problems) – materials management- Need for Inventory Control- EOQ, ABC Analysis(Simple numerical Analysis)- Types of Inventory Analysis (HML. SDE, VED, FSN Analysis). UNIT-III HUMAN RESOURCE MANAGEMENT: Concept of HRM, HRD and PMIR- Functions of HR Manager – theories theories of motivation and leadership styles- Job Evaluation and Merit Rating, Welfare measures-statutory and non statutory compliance – grievance grievance handling UNIT-IV MARKETING MANAGEMENT: Marketing Management- Functions of Marketing Management- Marketing mix-Market segmentation - Marketing strategies based on product life cycle- Channels of DistributionConsumer Behavior and marketing research UNIT-V PROJECT MANAGEMENT: Project planning and control- Project life cycle- Development of network- Difference between PERT and CPM- Identifying critical path- probability of completing the project within the given time, cost analysis, - project crashing (simple numerical problems). TEXT BOOKS: 1. Ramanujam Naidu & Sastry, “Management Science”, Science”, 1st Edition, Himalaya Publishers, 2012. 2. Vijaya Kumar & Appa Rao, “Management Science”, Science”, 1st Edition, Cengage Publishers, 2012. 3. AR Aryasri, “Management Science”, Science” , 4th Edition, Tata McGraw-Hill, 2009. REFERENCES: 1. P Khanna, “Industrial Engineering & Management”, 2nd Edition, Dhanpat Rai, 2004. 2. Martand Telsang, “Industrial Engineering & Production Management”, Management”, 2nd Edition, S. Chand & Company, 2008.
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UNIT – I I INTRODUCTION TO MANAGEMENT
CONCEPT OF MANAGEMENT
Management is what managers do. It refers to the people at top level in the organization. It is often viewed as maneuvering, i.e. doing something cleverly to change a situation and make things happen the way you want them to. It has drawn the concepts and principles from a number of disciplines such as economics, sociology, psychology, anthropology, and statistics and so on. There are a variety of views about the term management. Traditionally, the term "management" refers to the activities (and often the group of people) involved in the four general functions (planning, organizing, leading, controlling). Another common view is that "management" is getting getti ng things done through others. To most employees, the term "management" probably means the group of people (executives and other managers) who are primarily responsible for making decisions in the organization. In non-profit organizations, the term management might refer to all or any of the activities of the board, executive director and/or program directors. directors. Human Resources
Physical resources Effective and efficient utilization
Managerial activities Financial Resources
Goals
Information resources
In general, management is a set of activities directed at the efficient and effective utilization of resources in the pursuit of one or more goals. Different scholars from different disciplines have expressed their views on management. For example, economists have treated management as a factor of production; sociologists have treated it as a class or group of persons; practitioners have treated it as a process comprising different activities.
Definition: 1. According to Harold Koontz , “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”. 2. According to F.W. to F.W. Taylor , “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”. 3. According to Henry Fayol , “To manage is to forecast and to plan, to organize to command, to coordinate and to control”. Therefore, we can say that good management includes both being effective and efficient. Being efficient means doing the task correctly atleast possible cost with minimum wastage of resources. Management is a process involving planning, organizing, staffing, directing and controlling human efforts to achieve stated objectives in an organization.
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IMPORTANCE OF MANAGEMENT
Management has been important to the daily lives of people and to the organizations. The importance of management may be traced in the following contexts: 1. Achievement of group goals: A human group consists of several persons, each specializing in doing a part of the total task. Each person may be working efficiently, but the group as a whole cannot realize it objectives unless there is mutual cooperation and coordination among them. Management creates team work and coordination in the group. 2. Optimum utilization of resources: Managers forecast the need for materials, machinery, money and manpower. They ensure that the organization has adequate resources and at the same time does not have idle resources. 3. Minimization of Cost: In the modern era of cut-throat competition no business can succeed until it is able to supply the required goods and services at the lowest possible cost per unit. Management directs the day-to-day operations in such a way that all wastages are avoided. 4. Survival and Growth: An enterprise has to adapt itself to the changing demands of the market and society. It takes steps in advance to meet the challenges of changing environment. Managers enable the enterprise to minimize the risks and maximize the benefits of opportunities. 5. Generation of Employment: By setting up and expanding business enterprises, managers create jobs for the people. Managers also create such an environment that people working in enterprise can get job satisfaction and happiness. 6. Continuity in the organization: Continuity is very important in the organization. It is only management that keeps the organization continuing. Where there are no proper guidelines for decision making continuity cannot be guaranteed. 7. Development of the Nation: Efficient management is equally important at National level. The development of a country largely depends on the quality of the management of its resources. By producing wealth, management increases the national income and living standards of people.
NATURE OF MANAGEMENT
The study and application of management techniques in managing the affairs of the organization have changed its nature over a period of time. The following points will describe the nature of management: 1. Management is a Social process: Management is done by people, through people and for people. Social process refers to a series of activities that are performed in the society. These activities are carried out by administrators, politicians, economists, doctors, lawyers, parents, etc. 2. Management is goal oriented: Management involves achieving certain goals; it has no justification to exist without goals. The basic goal of management is to ensure efficiency and economy in utilization of human, physical and financial resources. 3. Management is Universal: Management is an essential element of every organized activity irrespective of the size or type of activity. All types of organizations require management. Managers at all levels perform the same basic functions. 4. Management is a continuous process: Management is dynamic and an on-going process. The cycle of management continuous to operate so long as there is organiz ed action for the achievement of group goals.
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5. Management is a Group Activity: Management is very much less concerned with individual‟s efforts. It is more concerned with groups. It involves the use of group effort to achieve predetermined goal of management of ABC & Co. is good refers to a group of persons managing the enterprise. 6. Relative, Not Absolute Principles: Management principles are relative, not absolute, and they should be applied according to the need of the organization. A particular management principle has different strengths in different conditions. Therefore, principles should be applied according to the prevailing conditions. 7. Management is Multidisciplinary: Management has been developed as a separate discipline, but it draws knowledge and concepts from various disciplines like psychology, sociology, economics, statistics, operations research, etc. Management integrates the idea and concepts taken from these disciplines and presents newer concepts which can be put into practice for managing the organizations. 8. Management is Intangible: Management is an unseen or invisible force. It cannot be seen but its presence can be felt everywhere in the form of results. However, the managers who perform the function are tangible or visible. 9. Management is a Profession : A Profession refers to a vocation or a branch of advanced learning such as engineering or medicine. Management helps to carry out every profession in a scientific manner. 10. Management is an Art as well as Science : An art is characterized by practical knowledge, personal creativity and skill. A science is a systematized body of knowledge of facts. It involves basic principles, which are capable of universal application.
MANAGEMENT AS ART OR SCIENCE
To understand the basic nature of management, it must be analyzed in terms of art and science, in relation to administration, and as a profession, in terms of managerial skills and style of managers. Management as a Science: Science means a systematic body of knowledge pertaining to a specific field of study. It contains general principles and facts which explains a phenomenon. These principles and theories help to explain past events and may be used to predict the outcome of actions. Scientific methods of observations and experiments are used to develop principles of science.
Thus, the essential features of science are as follows: 1. Systematic body of knowledge: Management has a systematic body of knowledge consisting of general principles and techniques. These help to explain events and serve as guidelines for managers in different types of organizations. 2. Universal principles: Management contains sound fundamental principles which can be universally applied. For instance, the principle of unit y of command states that at a time one employee should be answerable to only one boss. 3. Scientific enquiry and experiments: Management principles are also based on scientific enquiry and investigation. These have been developed through experiments and practical experience of a large number of managers. 4. Cause and effect relationship: The principles of management establish cause and effect relationship between different variables. For instance lack of balance between authority and responsibility will cause management to become ineffective.
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5. Tests of validity and predictability: Principles of management can also be tested for their validity. For example, the principle of unity of command can be tested by comparing two persons, one having a single boss and other having two bosses. The performance of the first person will be higher than that of the second. Management as an Art: Art implies the application of knowledge and skills to bring about the desired results. The essential elements of arts are: 1. Practical knowledge: Every art signifies practical knowledge. For example, a person cannot become a successful manager simply by reading the theory and getting a degree. He must also learn to apply his knowledge in solving managerial problems in practical life. 2. Personal skill: Every artist has his own style and approach to his job. Every manager has his individual approach and style in solving managerial problems. The success of a manager depends on his personality in addition to his technical knowledge. 3. Result-oriented approach: Arts seeks to achieve concrete results. The process of management is also directed towards the accomplishment of desirable goals. Every manager applies certain knowledge and skills to achieve the desired results. 4. Creativity: Art is basically creative and an artist aims at producing something that had not existed before. A manager effectively combines and coordinates the factors of production to create goods and services. 5. Improvement through people: Practice makes one perfect. Every artist becomes more and more efficient through constant practice. A manager gains experience through regular practice and becomes more effective. Management is Combination of Art and Science: Management knowledge exhibits characteristics of both a science as well as an art. It is a science because it has an organized body of knowledge consisting of certain universal facts. It is known as an art because it involves creating results through practical application of knowledge and skills. However, art and science are complementary to each other. Art without science has no guide and science without art is knowledge wasted. For example, a successful manager must know the principles of management and also acquire the skill of applying those principles for solving managerial problems in different situations.
FUNCTIONS OF MANAGEMENT
Management is a process of the quality of both physical as well as human resources to seek objectives. The elements or activities which are performed in this process are known as functions of management. Various authors have classified these functions differently: Writers Henry Fayol
Management Functions Planning, Organizing, Commanding, Coordinating, Controlling
Luther Gullick
POSDCORD- Planning, Organising, Staffing, Directing Coordinating, Reporting, Directing
Koontz Planning, Organising, Staffing, Leading, Controlling Thus, the functions of management may be classified in to five categories: Planning, Organizing, Staffing, Directing (leadership, motivation, communication, coordination) and Controlling.
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PLANNING The first function of the manager is planning. It is also the foremost and the essential function. Planning defines the goals and objectives to be reached in the plan period. It also consists of policies, procedures, methods, budgets, strategy and programmes that are needed to achieve the goals set. Decision-making is the most important and integral part of planning. Planning is the most basic and pervasive process involved in managing. It means deciding in advance what actions to take and when and how to take them. Planning is needed, firstly for committing and allocating the organization‟s limited resources towards achieving its objectives in the best possible manner and, secondly for anticipating the future opportunities and problems. Planning is putting down in black and white the actions which a manager intends to take. Each manager is involved in planning though the scope and character may vary with the level of the manager. Planning involves determination of objectives; forecasting; formulation of policies and programmes; and preparation of schedules.
The steps generally involved in planning are as follows: 1. Establishing Verifiable Goals or Set of goals to be achieved 2. Establishing Planning Premises 3. Deciding the planning Period 4. Finding Alternative Course of Action 5. Evaluating and selecting a Course of Action 6. Developing Derivative plans 7. Measuring and Controlling the progress
ORGANIZING Organizing is to give a proper shape to the structure that should execute the plan smoothly to achieve its success. It is the function of putting together different parts forming an enterprise and makes it an organic whole to enable it to carry out defined operations. Various activities to fulfill the goals have to be grouped and these are to be assigned to people in-groups or departments. The authority, responsibility, accountability needed at each level to execute the plan is to be defined and delegated. Organizing simply can be defined as a process that results in organizational structure through departmentalization, linking departments together, defining authority and responsibility and prescribing authority relationship sub activities. The organizing function deals with all those activities that result in the formal assignment of tasks and authority and a coordination of effort. The supervisor staffs the work unit, trains employees, secures resources, and empowers the work group into a productive team.
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The process of organizing consists of the following steps: a. Determining and defining the activities required for the achievement of pla nned goals; b. Grouping the activities into proper and convenient units; c. Assigning the duties and activities to specific positions and people d. Delegating authority to those positions and people; e. Defining and fixing responsibility for performance; and f. Establishing horizontal and vertical authority-responsibility relationship throughout the organization.
STAFFING It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose of staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. The staffing function involves identifying/selecting the right person for executing each task planned. By carrying the functions of organizing and staffing the "plan" is transformed from a document level to the operational stage. Having found the right candidate, it is equally important that you are able to retain him. Among other things, motivation and leadership provided by the top management of organization also plays an important role. The staffing function includes all the jobs connected with: Manpower Planning; Recruitment; Selection & placement; Training & development; Remuneration, Performance Appraisal; Promotions & Transfer.
DIRECTING It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life- spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating subordinate for the achievement of organizational goals. The function of directing embraces the following activities: a. Issuing orders and instructions. b. Supervising (overseeing) people at work. c. Motivation, i.e. creating the willingness to work for certain objectives. d. Communication, i.e. establishing understanding with employees regarding plans and their implementation, and e. Leadership or influencing the behavior of employees.
Direction has following elements: 1. Supervision: implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers. 2. Motivation: means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
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3. Leadership: may be defined as a process by which manager guides and influences the work of subordinates in desired direction. 4. Communications: is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
CONTROLLING Control is the tool for course regulation as the organization marches ahead and correcting it when it diverts off-course. The results of the activity must confirm to the laid down standards and all variations should be analyzed and root cause identified. Controlling includes ongoing collection of feedback, and monitoring and adjustment of systems, processes and structures accordingly. Examples include use of financial controls, policies and procedures, performance management processes, measures to avoid risks etc. Planning and controlling go hand in hand. There can be no control without a plan and plans cannot be successfully implemented in the absence of controls. Controls provide a means of checking the progress of the plans and correcting any deviations that may occur along the way. It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished.
The process of controlling involves the following steps: a. establishing standards for measuring work performance; b. measurement of actual performance and comparing it with the standards; c. finding variances between the two and see the reasons ; and d. taking corrective action for rectifying deviations so as to ensure attainment of objectives
MANAGEMENT LEVELS
Level of Management refers to the categories or layers of managerial positions in an organization. The level of management determines the amount of authority and status of the person occupying the position at that level. Managerial Hierarchy consists of:
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Top-level Management or Senior Management: These includes board of Directors, CEO‟s they comprise small groups but are responsible for overall management they formulate plans, decide objectives & communicate to middle level management. 1. Require an extensive knowledge of management roles and skills. 2. They have to be aware of external factors such as markets and government policies. 3. Their decisions are made using analytic, directive, conceptual and behavioral/ participative processes. 4. They are responsible for strategic decisions. 5. They have to chalk out the plan and see that plan may be effective in the future. Middle Level of Management: The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as: 1. Executing plans of the organization in accordance with the policies and directives of the top management. 2. They participate in employment & training of lower level management. 3. They interpret and explain policies of top level management to lower level. 4. They are responsible for coordinating the activities within t he division or department. 5. They evaluate the performance of employees and send the reports and other important data to top level management. Lower Level of Management: Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent, workers, etc. They are concerned with direction and controlling function of management. Their activities include: 1. Assigning of jobs and tasks to various workers. 2. They guide and instruct workers for day to day activities. 3. They are responsible for the quality as well as quantity of production. 4. They communicate workers problems, suggestions, and recommendatory appeals, etc., to the higher level, and higher level goals & objecti ves to the workers. 5. They arrange necessary materials, machines, tools e tc for getting the things done.
EVALUATION OF MANAGEMENT THOUGHT
From the start of the 19 th century until the 20th century, managers and scholars have formed a theoretical framework to explain what they believe to be good practices of management. Their efforts led to different classes of perspectives on management and each perspective is based on different assumptions towards the objectives of the organization and human behavior.
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The schools of management thoughts are classified as follows: 1. Classical Perspective: This perspective existed in the 19 th century and early 20 th century. It focuses on the rational and scientific approaches to the study of management and on finding ways to mould an organisation to become more efficient. Classical management theory can be divided into three perspectives distinguished by the issues and problems that they address. Scientific management emerged primarily among American scholars and managers and focused on issues involved in the management of work and workers. The theory of scientific management developed by F.W.Taylor and others accepted the empirical methods for arriving at conclusions. Administrative theory (also called Functional approach) evolved from a concern by both European and American academicians and managers with the nature and management of the total organization. Issues and problems that they sought to address focused on the technical efficiency of the organization. Other thinkers like Henry Fayol following the functional approach emphasized on the importance of managerial functions and principles for universal application. Bureaucracy theory was developed by the German sociologist, Max Weber, which portrays the structure and design of organization characterized by a hierarchy of authority, formalized rules and regulations that serve to guide the coordinated functioning of an organization.
2. Neo-Classical or Human Relations Perspective: The neo-classical writers tried to remove the deficiencies of the classical school and suggested improvements for good human relations in the organization. Human relation is frequently used as a general term to describe the ways in which managers interact with their employees. When „employee management‟ stimulates more and better work, the organization has effective human relations, when morale and efficiency deteriorate, its human relations are said to be ineffective. The human relations movement/approach arose from early attempts to systematically discover the social and psychological factors that would create effective human relations. Their propositions are based on 'human relations studies' and motivational theories such as Hawthorne Experiments, Maslow‟s need hierarchy theory, etc. 3. Quantitative Management or Behavioral Sciences Perspective: The behavioral school emerged partly because the classical approach did not achieve sufficient production, efficiency and workplace harmony. People did not always follow predicted or expected patterns of behavior. Thus there was increased interest in helping managers deal more effectively with the people side of their organizations. Several theorists tried to strengthen neoclassical management theory with the insights of sociology and psychology. The behavioral science perspective believes that it is difficult to understand the sociology of a group separate from the psychology of the individuals comprising it and the anthropology of the culture within which it exists. 4. Contemporary or Modern Perspective: The modem management thinkers define organization as a system and also consider the impact of environment on the effectiveness of the organization. The organization is viewed as adaptive systems which must in order to survive adjust to environmental changes. As a result, two approaches have gained prominence after 1960s, which are: Systems approach and Contingency approach.
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SCIENTIFIC MANAGEMENT
The classical scientific branch arose because of the need to increase productivity and efficiency. The emphasis was on trying to find the best way to get the most work done by examining how the work process was actually accomplished and by scrutinizing the skills of the workforce. The concept of scientific management was introduced by Frederick Winslow Taylor in USA in the beginning of 20 th century (1856-1915). Since Taylor has put the emphasis on solving managerial problems in a scientific way, often, he is called as Father of Scientific Management and his contributions as the principles of scientific management. He also developed a theory of organizations, which has been largely accepted by subsequent Management Philosophers.
Definition: “Scientific management is concerned with knowing exactly what you want to do and then see in that they do it in the best and cheapest way. ” Taylor was concerned with the problems of increasing labour productivity without putting under strain or workers. Scientific management implies the application of scientific methods of study and analysis to the problems of management. On the basis of experiments, he published many papers and books and all his contributions were compiled in his book “Scientific Management”. His contributions are divided into two parts: Principles of scientific management. Elements and tools of scientific management. Principles of Scientific Management: Taylor has given certain basic principles of scienti fic management. 1) Replacing rule of thumb with science : It requires scientific study and analysis of each element of a job in order to replace the old rule of thumb approach development of a science for each element of a man‟s job requires that decisions should be made on the basis of facts rather than opinions and beliefs. 2) Harmony in group action: Taylor has pointed out that attempts should be made to obtain harmony in group action rather than discord. Group harmony suggests that there should be mutual give and take situation and proper understanding so that group as a whole contributes to the maximum. 3) Co-operation : Scientific management involves achieving cooperation rather than chaotic individualism. It is based on mutual confidence, co-operation and goodwill. Co-operation between management and workers can be developed through mutual understanding and a change in thinking. 4) Maximum output: Scientific management involves continuous increase in production and productivity instead of restricted production either by management or by worker. This can be possible when efficiency and output are maximized. Maximum output and optimum utilization of resources brings profits. 5) Development of workers : All workers should be developed to the fullest extent possible for their own and for the company‟s highest prosperity. Training should be provided to the workers to keep them fully fit according to the requirement of new methods of working which may be different from non-scientific methods.
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Elements and Tools of Scientific Management: 1. Separation of planning & doing : Taylor emphasized the separation of planning aspect from actual doing of the work. In other words planning should be left to the supervisor and the worker should concentrate only on operational work. 2. Functional foremanship : Taylor introduced the concept of functional foremanship based on specialization of functions. In this system, eight persons are involved to direct the activities of workers. Out of these four persons are concerned with planning viz., route clerk, instruction card clerk, time and cost clerk and disciplinarian. The remaining four persons are concerned with doing aspect of the job, viz., speed boss, inspector, gang boss and maintenance foreman. Work Shop Manager
Planning In charge
Route Clerk
Time and cost clerk
Instruction Card clerk
Production In charge
Disciplinar ian
Gang Boss
Route Boss
Inspecto r
Maintenance Foreman
Worker
3. Standardization: It is a process of fixing well thought out and tested standards of norms with a view to minimize efficiency of work. It should be maintained in respect of instruments and tools, period of work, amount of work, working conditions, cost of production, etc. 4. Selection and Training: Taylor has suggested that workers should be selected on scientific basis taking into account their education, work experience, aptitude, physical strength, etc. A worker should be given work for which he is physically and technically most suitable. Apart from selection, proper training should be provided to workers to make them more effective and efficient. 5. Financial Incentives: Financial incentives can motivate workers to put in their maximum efforts. If provisions exist to earn higher wages by putting in extra effort, workers will be motivated to earn more. According to this scheme, a worker who completes the normal work gets wages at higher rate per piece and one who does not complete gets at lower rate. 6. Economy: While applying scientific management, not only scientific and technical aspects should be considered but adequate consideration should be given to economy and profit. The economy and profit can be achieved by making the resources more productive as well as by eliminating the wastages. 7. Mental Revolution: scientific management depends on the mutual co-operation between management and workers. For this co-operation, there should be mental change in both parties from conflict to co-operation. CRITICISM: Scientific management ignored human side of organization. Taylor and his disciples were called "Efficiency Experts" because they concentrated attention on improving efficiency of workers and machines. Scientific management is therefore restricted in scope as a theory of Industrial Engineering or Industrial Management, rather than a general theory of management.
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Although it is accepted that the scientific management enables the management to put resources to its best possible use and manner, yet it has not been spared of severe criticism. Employer’s Viewpoint: 1. More Expensive: Scientific management is a costly system and a huge investment is required in establishment of planning dept., standardization, work study, training of workers. It may be beyond reach of small firms. 2. Time Consuming: Scientific management requires mental revision and complete reorganizing of organization. A lot of time is required for work, study standardization & specialization.
Workers Viewpoint: 1. Unemployment: Workers feel that management reduces employment opportunities through replacement of men by machines and by increasing human productivity fewer workers are needed to do work leading to chucking out from their jobs. 2. Exploitation: Workers feel they are exploited as they are not given due share in increasing profits which is due to their increased productivity. Wages do not rise in proportion as rise in production. Wage payment creates uncertainty & insecurity. 3. Monotony: Due to excessive specialization the workers are not able to take initiative on their own. Their status is reduced to being mere cogs in wheel. Jobs become dull. Workers lose interest in jobs and derive little pleasure from work. 4. Weakening of Trade Union: Everything is fixed & predetermined by management. So it leaves no room for trade unions to bargain as everything is standardized, standard output, standard working conditions, standard time etc. 5. Over speeding: The scientific management lays standard output, time so they have to rush up and finish the work in time. The workers speed up to that standard output, so scientific management drives the workers to rush towards output and finish work in standard time.
ADMINISTRATIVE / MODERN OPERATIONAL MANAGEMENT
Administrative theory focuses on the total organization and attempts to develop principles that will direct managers to more efficient activities. Administrative theorists looked at productivity improvements from the "top down", as distinguished from the Scientific Approach of Taylor, who reorganized from "bottom up". Administrative theorists developed general guidelines of how to formalize organizational structures and relat ionships. Henri Fayol (1841-1925) was a French mining engineer who spent many of his later years as an executive for a French coal and iron combine. In 1916, as director of the company, Fayol penned the book General and Industrial Management. In this book, Fayol classified the study of management into several functional areas which are still commonly used in executive training and corporate development programs. The functional areas identified by Fayol are planning, organizing, commanding, coordinating, and controlling. His contributions are divided in the following categories: According to Fayol the following are the list of qualities required in a manager: Physical – includes Health, Vigor and address. Mental – includes ability to understand and learn, judgment, and capability. Moral – includes energy, firmness, initiative, loyalty, etc. Educational – includes qualifications. Technical - peculiar to the function being performed. Experience – knowledge in related field.
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