1. Basic managment concepts .pdf

8/16/2019 1. Basic managment concepts .pdf

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Basic mana ementBasic mana ement

conceptsconceptsReferences

. ,

Engineering Economy .

2. S.K. Sharma, etal., Industrial Engineering and

Operations Management .

3. Abbass F. Alkhafaji, Competetitive Global

Management.


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WHAT IS MANAGEMENT?

WHAT IS MANAGEMENT?

• The verb manage comes from the Italian

maneggiare (to handle — especially a horse)• Which in turn derives from the Latin manus

• The French word mesnagement (laterm nagemen n uence e eve opmen n

meaning of the English word management in

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t e 17t an 18t centuries3


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WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?

• anagement s t e art o gett ng t ngs one t roug

people.

• The process of setting and achieving goals through the

execution of five basic management functions –

, , ,

– that utilize human, financial, and material resources

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in an efficient and effective manner.4


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• What is this little lad doing?

• Do you know where he is going?

• Can you see where he is going?

•

Can you really see what the

• Have you got the big picture in

mind?

• With anything that one does inlife you start with the end in

.

to achieve and then you decide

how you will work towardsachieving it. This is what

management is.5/2/2012 5


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CONT’DCONT’D

reality and Future reality

VisionRealityrea ness

NOW FUTURE

Courage

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CONT’DCONT’D

o a ou an ourFollowers Can Reach Our

Vision

Chart the Path

in Place

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CONT’DCONT’D

• In general "management" identifies a special

effort and activities of other people toward

common objectives.

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WHY MANAGEMENT?WHY MANAGEMENT?

• e n us r a evo u on roug a ou e

emergence of large-scale business and its need forprofessional managers

•

anagemen ecame more mpor an as edevelopments and complexities of technology and

human relationships get more challenging to those who

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CONT’DCONT’D

Shorter life‐cycles for innovative technologies

•Water power

•Textiles

•Iron

•Steam

•Rail

•Steel

•Electricity

•Chemicals

•Internal‐combustion

•Petrochemicals

•Electronics

•Aviation

•Digital networks

•Software

•New media

1st Wave 2nd Wave 3rd Wave 4th Wave 5th Wave

1785 1845 1900 1950 1990 1999 2020

Source: The Economist , February 20, 1999

60 yrs 55 yrs 50 yrs 40 yrs 30 yrs

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WHAT MANAGEMENTS STRIVES FOR?WHAT MANAGEMENTS STRIVES FOR?

• Management strives invo ving a group o peop e work

together in the most effective and efficient mannerto achieve stated goals in the best and most

'.

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FUNCTIONS OF MANAGEMENT FUNCTIONS OF MANAGEMENT

• The subject of management can be

considered a rocess involving certainfunctions that a manager performs

1 P annin

2. Leading

.

4. Staffing

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.


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CONT’DCONT’D

1. Planning

• ann ng nvo ves e pre e erm n ng o e course o

action to be taken in relation to the known event . It

also includes anticipating the possibilities of future

“Failin to lan means lannin to fail”

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CONT’DCONT’D

•

It is a systematic activity which determineswhen, how and who is going to perform a

.

“ ”

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CONT’DCONT’D

• The increased importance of planning in a

changes in the environment like

• changes in technology,• overnment olic

• overall economic activity,

•

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CONT’DCONT’D

• There are different planning executed in

different level of an organization

• Tactic planning

• Operational planning

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CONT’DCONT’D

• n genera , e p ann ng process may

s stematicall be com osed of five elements:

I. Setting Primary & Intermediate Goals

II. Search for Opportunities

III For ulation o Plans

IV. Target Setting

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V. Follow-up of Plans


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CONT’DCONT’D

2. Leading

• ,

different terms such as

Directing, Executing, Supervising, Ordering and Guiding• What ever terms are assigned to it, the idea of

directing is to put into effect the decisions, plans

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.


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LEADERSHIP STYLESLEADERSHIP STYLES

There are four types of leadership styles

• e c a or a ea er ma n a ns a g y cr ca an

negative attitude in his relation with subordinates

and advocates the accomplishment of tasks throughfear of enalties

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CONT’DCONT’D

• The benevolent - autocratic leader assumes a

aternalistic role which forces the workers to rel on

him for satisfaction.

•

s ype o ea er mus e excep ona y s rong anwise individual, so that his personality generates

respect and allegiance. The subordinates develop

de endence on the eader to the e tent that the ha e

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CONT’DCONT’D

• The democratic leader suggests better methods and

tries to im rove the worker's attitude. Unlike theothers, not only he depends on his capabilities but

,

decision making and organizing.

• With this type of leadership satisfaction is gained

throu h a ee in o rou acco ish ents

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CONT’DCONT’D

• The fourth type of leadership style is a laissez -

faire type where the leader assumes the role of just

another member of the group and depends completely

on subordinates to establish their own goals and make

.

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CONT’DCONT’D

3. Organizing

and process by which a group allocates its

tasks among its members, identifies

re a ons ps an n egra es s ac v es

toward common ob ectives

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CONT’DCONT’D

• The organizing function of management brings

to ether human and h sical resources in an orderlmanner and arranges them in coordinated pattern to

accom lish lanned ob ectives.

• Each organizational resource (human, material,

inance etc. represent an investment rom w ic t e

management system must get the return.

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CONT’DCONT’D

• ome o e ene s are:

– Good communication between the management and,

– Sound basis to evaluate the performance ofindividuals and rou s

– Well defined areas of works for each employee, – Ade uate and effective control , and

– Stimulation of independent, creative thinking and

initiative on the part of the employees.

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CONT’DCONT’D

• T ere are some princip es o organization w ic

are guide lines for thought to operating managersan researc ers in an organization

1. Unity of Command

2. Exception Principle3. Span of Control

4. Scalar Principle

5. Departmentalization

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6. Decentralization


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CONT’DCONT’D

• e steps t at are mportant w en organ z ng

an enterprise on plansand

objectives

Establishingmajor tasks

Evaluating

results fororganizingstrategy

Allocating

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major tasks

intosubtasks

and

directivesfor

subtasks


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CONT’DCONT’D

. Sta ng

•

Staffing deals with the workers and is worker-oriented • This function includes the process of placing the right

erson in the ri ht or anizational osition

• The process of matching the people and the jobs is

for positions and raising the performance of personnel

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CONT’DCONT’D

5. Controlling

• Control is the rocess that measures currentactivities, quantitatively if possible, and guidesit toward some predetermined goal, plan, policy,

standard, norm, decision rule and criterion or yardstick.

• The essence of control lies in checking and

correcting actions against desired results in the

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planning process


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CONT’DCONT’D

• Controlling includes ensuring that employees

perform the work allocated to them in the waysa own, an w no wa age or u ca on otime, effort or materials.

given number of employees to perform work; theymust be su ervised and mana ed so that theirefforts achieve the desired results.

• This re uires that the are motivated, checked,

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guided, taught and encouraged .


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CONT’DCONT’D

• There are seven principles of control.

I. Strategic Point ControlII. Feedback

III. Flexible Control

IV. Organizational StabilityV. Self-Control

. rect ontro

VII. Human Factor

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CONT’DCONT’D

StaffingPlanning Organizing Leading Controlling

Defininggoals,

establishin

Determiningwhat needsto be done

Motivating,leading, andan other

Monitoringactivities toensure that

Lead to

Achieving the

Locatingprospective

em lo ees tostrategy, and

developingplans to

coordinate

how it will be

done, andwho is to do

it

actions

involved indealing with

people

they are

accomplishedas planned

organizations

statedpurposes

fill the job

created bythe

organizingactivities process

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WHO ARE MANAGERS?WHO ARE MANAGERS?

◆ anager

•

of other people so that organizational goals can be

accomplished.

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CHARACTERISTICS OF A GOOD MANAGERCHARACTERISTICS OF A GOOD MANAGER

The Dual Aspects of any Manager's Job

•

The modern 'world of industry' is very complex, and thisvery complexity has led to what is called “specialization”

and to the "division of labor” by which different people

specia ize in per orming − an ecome specia ists in −

different types of work.

• It follows, therefore, that the “technical” or "functional”,

i.e. the specific work of different managers can and does

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vary enormous y.


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CONT’DCONT’D

• Nevertheless, all those different types of

mana ers and all others should have considerableknowledge of the technical aspects of their jobs in

a on o e ng pro c en managers o peop e .

• It is, in an case, not eas to train, su ervise and

control the work of others without knowing what

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ey are or ou e o ng.


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•

CONT’DCONT’D

80% and 90% of his working hours on managerial matters and only

to o is time on t e tec nica activities.

• Whilst 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

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me on ec n ca ac v es an on y o o e r me a

work on the supervision of their subordinates


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CONT’DCONT’D

♦ How The Manager’s Job Is Changing

•

The Increasing Importance of Customers – Customers: the reason that organizations exist

• Managing customer relationships is the responsibility of all managers and

employees.

• Consistent high quality customer service is essential for survival.

– Doing things differently, exploring new territory, and taking risks

•

for innovation.

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CONT’DCONT’D

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PERSONAL QUALITIES NEEDEDPERSONAL QUALITIES NEEDED• ome o e more mpor an persona y ra s o 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

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arrange logically in his mind all the facts and

information available to him.


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CONT’DCONT’D

2. The Abilities to Make Decisions and to Act

Decisivel : These follow on from theforegoing, and also require a measure of

self-confidence; a belief in one's own abilit

to succeed in solving problems in the rightwa and in one's own abilit to deal

effectively with different situations and

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.


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CONT’DCONT’D.

needs to be solved.

2 Obtainin all relevant in ormation about the roblem3. Breaking down the problem into parts − very often

the solution to one part is obvious and leads, logically,to the solving of other parts or the whole problem.

4. Comparing and judging the probability of success of,

and their possible consequences on other areas.

−

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.decision


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CONT’DCONT’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’DCONT’D

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

to listen, is ositivel res onsive to criticism and is ableto handle conflicts and differences in a constructive

. ,

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

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mind in a sound body.


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CONT’DCONT’D

• Ability to Adapt Change and be Flexible: Any manager

, ,cope with changed circumstances, and ensure that his

su or na es a so o so.

• Adaptability to different situations and flexibility of

mind are also necessary in the routine, day-to-day

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, .


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CONT’DCONT’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

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reactions.


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CONT’DCONT’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’DCONT’D

• Drive and Determination: A manager needs the urge and

en us asm o s mu a e ac on, no on y y mse , u

by other people as well. He also needs the determination

to keep going whatever the difficulties, adapting hisactions and decisions to overcome roblems encountered

and pressing on to a successful conclusion.

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CONT’DCONT’D

• Leadership: Leadership is the ability of a person to

exert a ositive influence over the thou hts, behaviorand actions of others, and then to direct their thoughts,

.

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CONT’DCONT’D

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ORGANIZATION STRUCTUREORGANIZATION STRUCTURE• e stages in t e setting up o an e ective organizationa

structure are

The activities which will be necessary to achieve the

objectives of the business must be established.

The various related activities should be grouped together intodepartments; the most logical grouping is by 'function', that

is, by type of activity: production, marketing, finance, etc.

The activities of a articular de artment will be further

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divided , and grouped together into sections;


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CONT’DCONT’D

the proposed organization

Based on estimates of the volume of work, which will

be erformed b each section, the number of staff

required must be determined. Depending on the type,

numbers of supervisors, junior and middle managers

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per section and department must be given thought


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CONT’DCONT’D e s ec a now e ge or a en s requ re y e ar men a

and sectional managers must be laid down.

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

.

To ensure effective coordination of all parts of the

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enterprise, effective procedures and systems of

communication must be devised and installed.


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TYPES OF ORGANIZATIONAL STRUCTURETYPES OF ORGANIZATIONAL STRUCTURE

• There are four different types of organizations,

I. line,

II. functional,. ,

IV. matrix organization.

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CONT’DCONT’D

I. Line organization

• ' ',it is how the armed forces are organized.

•

There is a clear 'line' of responsibility and

structure from the board to the lowest level of

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supervision, an be ow.


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' ‘ CONT’DCONT’D

usually be made quickly and implemented rapidly, because

o t e rectness o t e contro , t e coor nat on o t e

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

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, ,be clearly defined and understood.


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CONT’DCONT’D

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CONT’DCONT’D

II. Functional Manager

,

determines the areas of authority and responsibility.

•

An expert or specialist is placed in charge of eachfunction and will have direct control of that function

wherever it is undertaken within the enterprise.

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CONT’DCONT’D• - -

of the enterprise (which is the domain of the line managers) they are

many benefits for the enterprise.

• However this form of or anization makes control difficult as there are

no clear lines of authority and it is similarly difficult to establishresponsibility 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’DCONT’D

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CONT’DCONT’DIII.Line and staff organization

•

In such a structure, the line managers control theprimary functions, such as marketing and

roduction which are directl concerned with

achieving the objectives of the business; whilst the

secondary functions which assist the smooth and

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.


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CONT’DCONT’DMANAGING DIRECTOR

DIRECTOR

WORKS

MANAGER

SALES

MANAGER

ACCOUNTS

MANAGER

PERSONNEL

MANAGER

L L L S

SECTION

MANAGERS

SECTION MANAGERS

SUPERVISORS &

SECTION

MANAGERS

L L L

OPERATORS

CLERKS

EMPLOYMENT

OFFICER

TRAINING

OFFICER

S S

L – Line relationship: S – staff relationship

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SUPERVISORS

& CLERKS

SUPERVISORS

& CLERKS

espons y an

au or y

s own

y

Staff. Advisory relationship shown by ‐‐‐‐‐‐‐‐‐‐


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CONT’DCONT’DIV. 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.

•

A typical example for this kind of organizational structure canbe the goal to design and build a new power plant station.

• The specialists are selected primarily on the basis of task-

related skills and ex ertise rather than decision makin

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experience or planning ability.


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CONT’DCONT’D• ese structures are very use u w en:

– The project is clearly defined in terms of objectives to

be achieved and the target date for completion of the

ro ect.

– The project must be separate and unique and not be a.

– The project must be temporary in nature and not

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extended into other related projects.


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CONT’DCONT’D• T is kin o organization occurs requent y in:

– Construction ( e. . buildin a brid e)– Aerospace engineering ( i.e. designing and launching

wea er sa e e

– Marketing( e.g. advertising company for new product)

– Installation of an electronic data processing system,

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e c.


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CONT’DCONT’D

GeneralManager

Finance Technical

Services

Project A M anager

Project B M anager

Project C M anager

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CONT’DCONT’D,

individual employee to have two managers . However,

proponents of matrix organization believe that it

rovides an a enc with the flexibilit to work on

critical projects.

• Matrix organization also brings together the

s ecialized talent that is often necessar to

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complete a project


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Other advanta es of matrix or anization: CONT’DCONT’D

– Decision making is decentralized to a level where information

is processed properly and relevant knowledge is applied.

– Extensive communication networks hel to rocess lar e

amount of information.

– With decisions delegated to appropriate levels, higher

management levels are not over loaded with operational

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decisions.


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CONT’DCONT’D

– Resource utilization is efficient , because key

programs or products at the same time.

– Employee learns the collaborative skills needed to

function in an environment characterized b

frequent meeting and more informal interactions .

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PRODUCTIVITYPRODUCTIVITY

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THE BASICS OF PRODUCTIVITYTHE BASICS OF PRODUCTIVITY• In most businesses, competition for the available

market, forces the management of each enterprise to

see competitive a vantage t roug t e use o :– product improvements

– ower cos s

– lower selling prices for the same or better quality and–

• Productivity is defined as the ratio of value of output

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CONT’DCONT’D

output of value =tyProductivi

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CONT’DCONT’D

• An increase in production does not necessarily by

itself indicate an increase in productivity.

• If the input of resources goes up in direct

remains the same

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CONT’DCONT’D

• If input increases by a greater percentage than

,expense of reduction in productivity

•

In short higher productivity means to produce ,

minimum increase in expense, or the same amount

is produced at less cost in terms of resources.5/2/2012 73


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CONT’DCONT’D

• The outputs may be products or services and the

in uts or resources ma be land, materials, lantmachineries, tools and a series of man.

♦ Land Productivity: Better seed, fertilizer and

yield from two quintals to three quintals. Hence

an pro uc v y as ncrease y percen .5/2/2012 74


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CONT’DCONT’D

♦ Material Productivity: If a skillful worker is able

2m 1m sheet metal, while an unskillful worker

can only produce 250 out of the same material,

used with 20 percent greater productivity

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CONT’DCONT’D

♦ Machine Productivity: If a machine tool has

,and through the use of improved cutting tool

and/or proper maintenance procedure itsou pu n e ame per o ncrea e o

ieces, the roductivit of that machine hasbeen increased by 20 percent.

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CONT’DCONT’D

♦ Productivity of Man: If a shoe maker has

een pro ucing pieces o eat er parts per

hour and if im roved methods of work enable

him to produce 40 pieces per hour the

productivity of that man has increased by 33.3

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CONT’DCONT’D

• To sum up, a low level of productivity implies a low

.

• A low growth of economy meant, low income leading

to low standard of leaving and a low level of savings,

productivity

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Global

Higher

productivity

Higher

competitiveness

International

multinational

Higher

Quality

Export

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Economic Growth

Productivit Growth E lo ent+ Growth

TFP Growth Capital Intensity

+ row5/2/2012 80


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PRODUCTIVITY IMPROVEMENT PRODUCTIVITY IMPROVEMENT

factors. Some of the external factors, influencing

productivity to mention are:

the national and international olicies

infrastructure supports

the availability of technology and natural resources

organ za ona o c es

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CONT’DCONT’D• Examples of internal factors that are identified

unsuitable personnel policies leading to a low level of

satisfaction and involvement;

awareness;

improper selection and training of personnel;

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CONT’DCONT’D

inappropriate choice of design,

tools material and e ui ment; undefined standardization and quality policies;

systems;,

systems;

unsa e an un ea y wor ng env ronmen

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PRODUCTIVITY IMPROVEMENT STRATEGIESPRODUCTIVITY IMPROVEMENT STRATEGIES

A. Short term Strategy

• e rs s ra egy s mprov ng organ za ona p ann ng

and control, to implement planned maintenance of

machinery and effective production system in plants

wou d show an increase in achine roducti it and

reduction in maintenance cost.

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CONT’DCONT’D• e secon ac on s ncreas ng man ower e c ency an

effectiveness at all levels. Effectiveness and efficiency

are the main tools of productivity.

♦ Efficienc

“Doing things right” – Getting the most output for the least inputs

♦ Effectiveness “Doing the right things”

– Attaining organizational goals

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CONT’DCONT’D

Resource Goal

Efficiency (Means) Effectiveness (End)

Usage

Attainment

Low Waste High Attainment

Management Strives for:

ow esource as e g c encyHigh Goal Attainment (High Effectiveness)

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N ’D

N ’D


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CONT’DCONT’D

• To be able to increase manpower efficiency and

what is required is motivation, training and

education. This method has proved itselfucce u n apan.

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CONT’D

CONT’D


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CONT’DCONT’D• The third short term line of attack is improving

o eration methods. The techni ues of method

study involve breaking a process into detailed

.

– The study may result in elimination of anactivity, combination of several activities,

chan e of se uence of activities, shortenin

duration of activities etc.5/2/2012 88

CONT’D

CONT’D


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CONT’DCONT’D

• As Frederik Taylor said "Most of us can do

three or our times as much as we ordinaril dowithout lengthening working hours or even

'

end".

• In fact, to achieve this, effective

i le entation o ethod en ineerin isrequired.

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CONT’D

CONT’D


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CONT’DCONT’D

B. Medium Term Strategy

and improve the products, and reduce variety.

•

The analysis consists of common sense questions to

alternative materials, elimination of parts where

special designs have been specified, redesign, etc.5/2/2012 90

CONT’D

CONT’D


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CONT’DCONT’DC. Long Term Strategy

•

,organized departments and proper layout will

undoubtedly contribute to an increase in

.

• Furthermore, research and development is the

backbone for productivity increment.5/2/2012 91


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Productivity improvement techniques5/2/2012 92

FUNCTIONS OF AN INDUSTRIAL ENTERPRISE

FUNCTIONS OF AN INDUSTRIAL ENTERPRISE


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• Manufacturing functions– Receiving, Warehousing, Transportation, Production,

• Engineering Functions– , , ,

estimation

• Control Functions– Production control, Quality control, Cost control,

• Support Functions– Purchasing, Sales, Maintenance, Personnel

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1. Basic managment concepts .pdf

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Transcript of 1. Basic managment concepts .pdf