Industrial management and

engineering economy

Chapter one
Introduction to basic management
concepts

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 Outline

Introduction to management
Functions of management
Organizational structure
Basics of productivity

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 Definition of Management

Management is the art/science of getting things

done through people.
Management is the process of getting activities
completed efficiently and effectively with and
through other people.

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 Management as a Unifying Force

Financial
Resources

Plant
Employees Management &
Equipment

Land Management is the process of

bringing human and nonhuman
resources together and
coordinating them to
accomplish organizational
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goals. 7
 Resources
Human
• Skills
• Knowledge
Non-Human
• Capital
• Land
• Plant and Equipment
• Technology

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Simply, management gets things done through other
people by planning, coordinating and directing the
activities of an organization.

The decisions and judgments made are normally oriented

to the needs of the organization.

Managers use resources to attain organizational goals

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Objective

 Maximize the potential of their people and coordinate

their efforts to attain some predetermined goal.

Organization

An organization is a social arrangement which

undertakes collective goals, controls its own performance,
and has a boundary separating it from its environment.

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Organizational Goals

Profit-oriented organization
• Return on investment
Hospitals
• Patient Care
Educational Institutions
• Teaching
• Research
• Community Services
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 Why Management?

The Industrial Revolution brought the emergence of

large-scale business and its needs professional
managers.

Management became more important as the

developments and complexities of technology and
human relationships get more challenging to those who
perform managerial functions

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 Importance of Management

Management
Puts together the factors of production to produce
goods and services
Make business decisions
Takes risks for which the reward is profit
Acts as an innovator by introducing new products,
new technology and new ways of organizing business

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 Manager’s Interactions with Other
Groups of People
Creditors &
Superiors Customers
Suppliers

Manager Coworkers
Peers

Government
Community Subordinates Agencies

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 Management Roles
Interpersonal Roles
• Figurehead
• Leader
• Liaison
Informational Roles
• Monitor
• Disseminator
• Spokesperson
Decision Roles
• Entrepreneur
• Disturbance handler
• Resource allocator
• Negotiator

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 Management Roles Cont.…
Interpersonal Roles

Figurehead: All social, inspiration, legal and ceremonial

obligations. In this light, the manager is seen as a symbol of
status and authority.

Leader: Duties are at the heart of the manager-subordinate

relationship and include structuring and motivating
subordinates, overseeing their progress, promoting and
encouraging their development, and balancing effectiveness.

Liaison: Describes the role of managers in representing their

organization in different occasions.

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 Management Roles Cont.…
Informational Roles

Monitor: Duties include assessing internal operations, a

department’s success, problems and opportunities which may
arise. All the information gained in this capacity must be stored
and maintained.

Disseminator: Highlights factual or value based external views

into the organization and to subordinates. This requires both
filtering and delegation skills.

Spokesman: Serves in a public relations capacity by informing

and lobbying others to keep key stakeholders updated about the
operations of the organization.

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 Management Roles Cont.…
Decision Roles
Entrepreneur: Roles encourage managers to create improvement
projects and work to delegate, empower and supervise teams in the
development process.

Disturbance handler: A general role that takes charge when an

organization is unexpectedly upset or transformed and requires
calming and support.

Resource Allocator: Describes the responsibility of allocating and

overseeing financial, material and personnel resources.

Negotiator: Is a specific task which is integral for the spokesman,

figurehead and resource allocator roles.

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Management Hierarchy

Three distinct levels of management

Top Management

Middle Management

Supervisory Management

A manager’s assigned job duties and the authority needed

to fulfill those duties are what determine management
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level 23
 Management Hierarchy Cont.…

Top Management
• Made up of individuals who have the possibility of
making the decisions and formulating policies that affect
all aspect of the firm’s operations.

President
Vice President
Chief Executive Officers
Executive Vice President

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 Management Hierarchy Cont.…

Middle Management
• Includes all managers above the supervisory level but
below the level where overall company policy is
determined.
• Middle managers manage supervisors.

Regional Sales Manager

Academic Deans (Universities)
Director of Nursing (Hospitals)

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 Management Hierarchy Cont.…

Supervisory Management
• Supervisors manage workers who perform the most basic
job duties required in the business.
Sales Manager
Academic Department Chairperson (Universities)
Nursing Supervisors (Hospitals)

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Management Skills

Common myths about management

Leaders are born, not made
Management is nothing more than common sense
Management is a “hit or miss” proposition
Business often succeed in spite of managers, not because
of managers

Management Success depends on both a fundamental

understanding of the principles of management and on the
application of technical, human and conceptual skills.

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 Management Skills Cont.…
Technical Skills

Are the specialized knowledge and abilities that can be

applied to specific tasks.

Most important at lower level of management.

Supervisory managers should train their subordinates in

the proper use of work-related tools, machines and
equipment's.

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 Management Hierarchy Cont.…

Human relations skills

Are the abilities needed to resolve conflict, motivate, lead, and
communicate effectively with other workers.

Equally important at all levels of management.

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 Management Hierarchy Cont.…

Conceptual Skills

Are the abilities needed to view the organization from a

broad perspective and to see the interrelations among its
components.

Are most important in strategic (long-range) planning;

therefore they are more important at top level executives.

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 Management Hierarchy Cont.…

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 Functions of Management

Organiz
in g

ing
nn
Pla
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Staffing
Functions of
Management
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 Functions of Management

Planning is the process of setting objectives for the

future and developing courses of action to
accomplish them.

Organizing is the process of arranging people and

physical resources to carry out plans and accomplish
organizational objectives.

Staffing is the process of matching jobs and people.

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 Functions of Management

Leading is the act of motivating or causing people

to perform certain tasks intended to achieve specific
objectives. It is the act of making things happen.

Controlling is the process by which managers

determine whether organizational objectives are
achieved and whether actual operations are
consistent with plans.

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 Characteristics of a Good Manager

• The Dual Aspects of any Manager's Job

the duties of any manager or supervisor comprise/includes two

quite different aspects:

1) The technical or functional aspect which is concerned

with the work to be performed by his enterprise or
department or section; and

2) The managerial aspect which is concerned with the people

who are to perform that work in his enterprise or
department or section.
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 Cont’d…

Some estimates show that a managing director may spend

between

• 80% and 90% of his working hours on managerial matters.

• only 10% to 20% of there time on the technical activities.

 senior managers may spend approximately 50% of their work

time on managerial activities and 50% on technical activities; and

supervisors and foremen may spend some 70% to 75% of their

time on technical activities and only 25% to 30% of their time at
work on the supervision of their subordinates.
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 Cont’d…

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 Personal Qualities Needed for Managerial
Success
• Some of the more important personality traits of a successful
manager are the following:

1.Ability to Think Clearly and Logically: A manager needs to

be able, as the result of training, to approach each situation
and problem positively and objectively, without prejudgment
or being distracted by irrelevancies. This requires him to think
in a clear, orderly fashion and to marshal and arrange logically
in his mind all the facts and information available to him.

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 Cont’d…

2. The Abilities to Make Decisions and to Act Decisively:

These follow on from the foregoing, and also require a
measure of self-confidence; a belief in one's own ability
to succeed in solving problems in the right way, and in
one's own ability to deal effectively with different
situations and sets of circumstances.

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 Cont’d…

• The Ability to Use Initiative: from time to time a manager is bound

to come across problems or situations which are outside his range
of experience or outside the normal scope of his responsibly; the
latter can, perhaps, arise when a senior is away or is unavailable for
some reason. In such circumstances, particularly if action is
urgently needed, the manager must not simply leave the matter
until his senior is available or wait to be told what to do, but must
initiate - that is, lead the action without waiting to be prompted.

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 Cont’d…

• Ability to Handle Conflict: A good manager is calm, able to listen, is

positively responsive to criticism and is able to handle conflicts and
differences in a constructive manner. In order to handle conflicts
well, a manager must be confident, self-assertive, fair and
dominant. He should be highly tolerant of stress, as conflicts
generally lead to stress and tension. This would require a sound
mind in a sound body.

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 Cont’d…

• Ability to Adapt Change and be Flexible: Any manager must be

able to adapt to changes and, if necessary, to cope with changed
circumstances, and ensure that his subordinates also do so.

• Adaptability to different situations and flexibility of mind are also

necessary in the routine, day-to-day running of a section,
department or an entire enterprise.

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 Cont’d…
• Ability to Be Emotionally Stable: In dealing with different
problems and situations, some of which might be irritating,
annoying, worrying or heated − or include emotional displays
(e.g. tearful women, angry voices, etc.) by others − a manager
must be sufficiently mature to keep calm and collected. He
must be able to keep control over his own emotions and his
temper whatever may the provocation be, and be able to
concentrate his attention on the matter in hand, thinking
clearly, logically, and avoiding hasty reactions.

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 Cont’d…
• Stamina and Concentration: mental fitness to work long and
hard without undue stress or strain.

• Besides mental alertness, a manager needs to be able to

concentrate his mind on the matter in hand even under the
most tiring circumstances and/or when he is under pressure; to
focus or keep one's mind intently fixed over a long period can
be tiring, particularly as there will be many different matters
requiring attention and concentration during a manager's
working day.

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 Cont’d…

• Drive and Determination: A manager needs the urge and

enthusiasm to stimulate action, not only by himself, but by
other people as well. He also needs the determination to
keep going whatever the difficulties, adapting his actions and
decisions to overcome problems encountered, and pressing
on to a successful conclusion.

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 Cont’d…

• Leadership: Leadership is the ability of a person to exert a

positive influence over the thoughts, behavior and actions of
others, and then to direct their thoughts, behavior and actions
towards a common goal or objective.

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 Organization Structure

An organizational structure is a system that outline how

certain activities are directed in order to achieve the goals of
an organization.
 The stages in the setting up of an effective organizational
structure are as follows
The activities which will be necessary to achieve the
objectives of the business must be established. 
The various related activities should be grouped together
into departments; the most logical grouping is by 'function',
that is, by type of activity: production, marketing, finance,
etc. 
The activities of a particular department will be further
divided, and grouped together into sections;
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 Cont’d…

Based on estimates of the volume of work, which will

be performed by each section, the number of staff
required must be determined.
Depending on the type of work to be performed and
on other factors, the numbers of supervisors, junior and
middle managers per section and department must be
given thought.

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 Cont’d…

The special knowledge or talents required by departmental

and sectional managers must be laid down. Coupled with this
is the necessity to lay down the extent and the limits of
authority and tile duties of all those who will hold
managerial positions and the authority to delegate must be
provided. 
The equipment necessary for the proper functioning of each
section and department must be decided upon, and provision
made for its positioning when considering the layout of the
accommodation for each unit. 
To ensure effective coordination of all parts of the
enterprise, effective procedures and systems of
communication must be planned and installed.

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 Types of Organizational Structure

There are four different types of organizations,

I. line

II. functional

III. line and staff and

IV. matrix organization.

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 I. Line Organization

Sometimes called 'military organization', because it is how

the armed forces are organized. 

There is a clear 'line' of responsibility and authority right

through the management structure from the board to the
lowest level of supervision, and below.

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 Cont’d…

Line organization is simple and direct and is easy to understand.

The 'chain of command‘ is direct and so decisions can usually be

made quickly and implemented rapidly, because of the directness of
the control, the coordination of the activities of all those employed in
a department is simplified.

The position (and status) of all the different people working in a

department can be easily seen, and so the extent of their
responsibilities, authority and duties can be clearly defined and
understood, making disputes less likely.

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Cont’d…

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 II. Functional Manager

• it is the function (the type of activity), which determines

the areas of authority and responsibility.

• An expert or specialist is placed in charge of each function,

and will have direct control of that function wherever it is
undertaken within the enterprise.

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 Cont’d…
• As the functional specialists are not involved in the day-to-day
running of the enterprise they are free to the concentrate on
their particular functions that produce many benefits for the
enterprise.
• However, this form of organization makes control difficult as
there are no clear lines of authority and it is similarly difficult to
establish responsibility when things do not go right.
• Furthermore, staff as well as supervisors and junior managers
become confused at being subject to the authority of more than
one superior.

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 Cont’d…

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 III. Line and Staff Organization

• In such a structure, the line managers control the

primary functions, such as marketing and
production, which are directly concerned with
achieving the objectives of the business;

• whilst the staff managers are generally involved

with secondary functions which assist the smooth
and efficient running of the primary functions.

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 Cont’d…
MANAGING DIRECTOR
DIRECTOR

L WORKS L SALES L ACCOUNTS S PERSONNEL

MANAGER MANAGER MANAGER MANAGER

L L
L SECTION SECTION MANAGERS SECTION
MANAGERS SUPERVISORS & MANAGERS
SUPERVISORS & SALESMEN SUPERVISORS &
OPERATORS CLERKS

S EMPLOYMENT S TRAINING
OFFICER OFFICER
L – Line relationship: S – staff relationship
Responsibility and authority shown by
. SUPERVISORS SUPERVISOR
Staff. Advisory relationship shown by & CLERKS S
--------------- & CLERKS
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 IV. Matrix Organization (Project
Organization)

• These are temporary organizational structures

formed for specific projects for a specific period of
time and are dismantled, once the required goal is
achieved.

• The specialists are selected primarily on the basis of

task-related skills and expertise rather than decision
making experience or planning ability.

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 Cont’d…

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•Reading assignment
Personal Qualities Needed for Managerial Success
Basics of productivity

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 BASICS OF PRODUCTIVITY

Productivity can be defined in many ways as:-

• Productivity is the reduction in wastage of resources such as

labor, machines, materials, power, space, time, capital, etc.

• Productivity can also be defined as human endeavor

(effort) to produce more and more with less and less
inputs of resources so that the products can be purchased
by a large number of people at affordable price.

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 Cont.

• Productivity implies development of an attitude of mind

and a constant need to find better, cheaper, easier,
quicker, and safer means of doing a job, manufacturing a
product and providing service.

• Productivity aims at maximum utilization of resources

for yielding as many goods and services as possible

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 Cont.
• Productivity processes more efficient works involving less fatigue
to workers due to
• improvements in the layout of plant and work,
• better working conditions and
• simplification of work.

• In a wider sense productivity may be taken to constitute the ratio

of all available goods and services to the potential resources of
the group.

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However, if we closely examine the various definitions and
interpretations of this term, three basic types of productivity
appear to be rising.
Partial Productivity
Multi Factor Productivity
Total Productivity

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 Productivity cycle

measurement

improvement evaluation

Planning

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 67
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 Thank you

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