Industrial ion and Management by Dv Shirbhate

8/4/2019 Industrial ion and Management by Dv Shirbhate

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impracticable, they do not understand their limitations. The only answer to this and many other problems of industrial relations is that the workers or the employees should also be asked to participate in management.

For higher productivity and industrial peace the workers are now increasing by associatedwith the process of management. If brings employees closer to the management promotes their interest in the enterprise, and bridges the gap between the management and workers.

Methods of Participation in ManagementSeveral schemes involving employees participation in management have been tried in the

past few years but non has been found satisfactory and self-sufficient. Following are the mostimportant methods of involving employees participation in management.

1. Suggestion SchemesAccording to this scheme employees are encouraged to give suggestions regarding

improvement in the existing methods and procedures of work. A suggestion scheme will besuccessful only when all the suggestions are considered fairly and promptly.

2. Joint Consultations

This involves the setting up of joint committee comprising of employees and themanagement. Usual matters relating to welfare activities, such as first aid, absenteeism, punctuality,waste of time and material, training, removal of grievances facilities for drinking water, rest rooms,canteen etc. Joint consultation committee is of advisory nature only. The decisions are not binding onthe management. The committee do not deal with subjects like wages, hours of work, bonus etc.

3. Employees Representation on board of DirectorsSuggestion schemes and joint consultation can be effective only at the mercy of the

management. Full fledged effective participation by the workers can be ensured if they have their representative on the board of directors, where they can not only suggest but influence matters.

4. Co-partnership

Under this scheme employees also become shareholders of the company. As shareholdersworkers become part-owners of the concern and can have some say in its internal management. If thenumber of shareholders are sufficient they can get their representatives elected to the board of directors.

5. Auto-management This method involves complete control of workers on the enterprise workers are the

managers, they have the sole right of management. The workers manage the enterprise throughworker's council and management boards. This method exists in socialist countries like Yugoslaviaand Poland.

Workers Participation in management in India:

A number of progressive trends have been taking place in the field of labour policy since theinception of first five year plan among the more important of these is the principle of worker's

participation in management.In India it was felt that the greater association of workers with management is necessary for

the successful implementation of five year plans. It is so because realisation of the socialistic patternof society is based up on the existence of industrial democracy. Such a industrial democracy is builtup not solely on monetary incentives but on ideas of service of society and the willingness on the partof the workers to recognise such service. In this context the workers should be made to feel in hisown way that he is helping to built a progressive state.


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In view of the some the second plan recommended the provision of councils of managementconsisting of management, technicians, and workers in large establishments in organised industries.As a preliminary step, the Ministry of Labour and Employment set up a tripartite study groupconsisting of representatives of employers, workers and government in October 1956. The studygroup visited a number of European countries to study the various schemes of workers participation.The group submitted a report to the Government in which a scheme of "Joint Management Councils"was suggested. The recommendations of the study group were accepted by the Indian labour conference in 1957.

It was a voluntary scheme and the measure would help in increasing productivity, giveemployees a better understanding of their rote in the working of industry and of the process of

production and satisfying the workers urge for self expression, leading to industrial peace better relations and increased cooperation.

In march, 1960 a seminar was held to review the progress made in regard to the formation of J MC's. A target of 60 was fixed but only 24 J M C's were formed. As the progress wasunsatisfactory. A new scheme was suggested i.e. the 'scheme for workers participation in industry atshop floor and plant level' the scheme goes by the name of "Shop Councils" The functions of 'shopcouncils relate to production, productivity, absenteeism, general discipline, health safety, welfare andworking conditions. The decisions of the council would be implemented within due month. The

scheme was implemented by 1249 unions out of 1795 up to the end of October 1966.The National commission on labour (N C L) 1969 did not favor the idea of the joint

management councils. In its view J M C's were redundant in view of the works committees andrecommended and recognised unions.

The scheme for workers participation in industry at shop floor and plant levels in industry atshop floor and plant levels applicable to manufacturing and mining units employing 500 or moreworkers was introduced in October 1975. Another scheme for workers participation in managementin commercial and service organisation in public sector having large scale public dealings andemploying at least 100 persons was announced in January 1977.

TRADE UNION

Objectives and FunctionThe most Important development in the industrial field is the evolution of the Institution of

trade unions. The industrial revolution gave birth to the factory system, large scale production under the factory system, increased labour problems and workers are exploited by capitalists. To protect theinterest of the workers and to save from exploitation trade unions were formed and developed. Todaythere is hardly any industry or firm which has no trade union. In modern times the trade unions havewidened their scope of activities and contributed a lot to improve the fate of the workers.

DefinitionA trade union is a voluntary organisation of workers formed to protect and promote their

interest through collective bargaining.Sidney & Webbs defines trade union as. A continuous association of wage earners for the

purpose of maintaining and improving the conditions of their working lines.From the above definition of trade union it is clear that trade union is a voluntary association

of workers formed primarily for the purpose of pursuit of the interest of workers.

ObjectivesThe main object of trade union is to protect the interest of its members against exploitation by

employers. Following are the objectives of trade union.


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1. Better wagesThe main aim of trade union is to secure better wages for the workers, keeping in view the

prevailing standard of living and the cost of living.

2. Better working conditionsTrade unions strive for better working conditions for the workers in the form of shorter hours

of work, leave with pay, social security benefits, and other welfare facilities.

3. Protection against victimizationTrade unions not only minimize the helplessness of the workers by making them stand

collectively and increasing their resistance power through collective bargaining but also protect their members against victimisation of the employers.

4. Self ConfidenceTrade union provides self confidence in workers and a feeling that he is not simply a log in

the machine.

5. Labour Welfare

The main function of trade union is the welfare of workers, such as guiding, counseling andhelping in difficulties moreover providing welfare facilities such as housing, medical etc.

6. Industrial PeaceTrade unions remove the sense of insecurity among workers and seek cooperation of -each

and every member. It promotes industrial peace in the industry.

7. Collective bargaining Industrial workers are too weak in bargaining. Trade unions through collective bargaining

protect the interest of the workers.

Functions of Trade Union

Trade union perform certain functions as to justify their existence. Mr. Broughton wasclassified the functions of trade unions in to three categories

1. Intra-mural2. Extra-mural and3. Political.

1. Intra-mural FunctionIntra-mural activities include those activities which are carried on within the four walls of the

organisation for the welfare of the members such as bargaining with employer, for better wages andworking conditions and for workers participation in management, providing labour welfare activities,getting share in profit, group discussion, Gherao and strikes are some of the tools which help the tradeunions in getting their demands.

2. Extra mural functionsExtra mural activities are those activities which are performed outside the compound of the

organisation for the general welfare of their members. The main object of such activities is to seek their cooperation and help them in times of crises. Such activities include the provision of sanitaryhouse fair price shops, library, and reading room, entertainment programs, Bal Wadies etc. Theseactivities much depend upon the availability of funds.


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3. Political FunctionsIn the modern democratic world trade union play a very important role in the politics of the

country. They send their representatives to the legislative assembly and to the parliament throughgeneral election so that they may safeguard their own interest in the assembly and parliament. Sometrade unions are so strong that they have formed their own political party and fight elections.

COLLECTIVE BARGAININGIndustrial harmony is essential for economic progress and the concept of industrial harmony

postulates the existence of understanding, cooperation and a sense of partnership between employersand employees. Unnecessary strikes and lock outs go against the interest of the community. Whatever labour laws may lay down, it is the approach of employers and trade union leaders which matters andunless both are enlightened, industrial harmony is not possible. Industrial peace can be better maintained if the bargaining parties are strong and develop the habit of planned collective bargaining.

DefinitionCollective bargaining is a two party procedure for arriving at a commonly agreed solution.

Data yoder defines collective bargaining as, "Collective bargaining is essentially a process in whichemployees act as a group in seeking to shape conditions and relationships in their employment." Thus

collective bargaining is used to describe the procedure whereby employers must reach agreementabout wage rates and basic condition of labour with the trade unions instead of with individualworkers. It is the process of discussion and negotiation between an employer and a union eliminatingin a written agreement or contract and the adjustment of problems arising under the agreement. Tradeunions try to advance the interests of their members mainly by negotiating agreements usually termedas union contract with employers. The process by which these agreements are negotiated,administered and enforced are included in the term collective bargaining.

Collective bargaining as a technique for the fulfillment of the needs and objectives of workersand employers is an integral part of industrial society. Collective bargaining is a powerful instrumentfor either good or evil. Its results, depend on wisdom and foresight Ness with which the bargains aremade.

Conditions for Success of Collective BargainsCollective bargaining can be an effective instrument in the settlement of disputes and

advancement of the cause of labour if certain basic conditions are fulfilled.1. The primary condition for the successful process of collective bargaining is the existence of well

organised and fully recognised trade unions with well defined policies. It follows that collective bargaining is not very useful in the early stages of development when unions are not well-organised.

2. Collective bargaining can be an effective technique of setting industrial disputes when there is aspirit of give and take between the employers and workers.

3. There is no legal sanction behind the terms and conditions voluntarily agreed upon, the partiesconcerned must do things and act in good faith on the basis of mutual agreement.

4. The success of collective bargaining much depends on the moral fiber of the labour leaders as

well as the employers. There should be a complete and true under standing and appreciation of each other's viewpoints. Face to face meetings between the representatives of workers andemployers can serve an useful purpose only when the traditional prejudices are kept aside by boththe parties.

5. There should be no uncertainly about the fields in which the parties are legally required to bargaincollectively.


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PRODUCTION PLANNING AND CONTROL Rs 50/-ADVANCE PRODUCTIVITY TECH RS-40/-coming soon - process engineering

4. MATERIAL MANAGEMENT

MEANINGThere are two fundamental inputs in which management is primarily interested i.e. men and

materials management is equally interested in optimising the use of both. However from management point of view material management offers greater promise as a cost reducing device. Better andscientific management of material cannot only bring about substantial cost saving but also results inimproved production capacity of plant, saving of labour, time, reduction in inventories, reduction instore space, reduction in damages to materials, smooth flow of production, easy production controlreduces employees fatigue etc.

In recent years materials management has gained increasing recognition as management

function comprising all aspects of industrial handling, storage warehousing, stock control andtransport. According to Prof. A. K. Shah the science of material management includes (i) purchasing(ii) store keeping and (iii) inventory control.

According to Bethel, " Materials management is concerned with planning, directing andcontrolling the kind, amount location, movement and timing of the various flows of commoditiesused in and produced by business enterprises ".

Material management is a running partner of production control department till the product ismanufacturer to the ultimate consumers becomes an integral part of materials management. In asense-entire marketing is basically materials management. Materials management end when thecorrect, finished product in proper condition, quality and quantity is in the hands of ultimateconsumer.

CLASSES OF MATERIALSIn the materials flow system we have raw materials, parts, In-process-materials, suppliesequipment 'items etc. These are demanded by manufacturers and processors. Finished goods aredemanded by customers in the market to satisfy their needs and desires.

Following are the different classes of materials used in the process of production.

1.RawMaterialsThese are the Materials which are used in the product, which are in an unprocessed condition

e.g. cotton jute, iron and steel, chemicals etc.

2. Purchased PartsThese are the items used in the assembly of the product e.g. bolts, nuts. screws etc.

3. In process materialsThese are called works-in-process inventories. These are semi-manufactured goods

demanding further processing e.g. shoe upper cut from leather.

4. Finished productThese are goods fully manufactured inspected and ready for dispatch to a customer e.g.

finished pair of shoes, decorated flower pot, ready made garments.


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5. SuppliesThese are consumable goods used in the process of manufacturing e.g. stationary, pencil, oil,

flies, grinding wheel etc.

6. Equipment itemsThese are physical facilities and fixtures, fittings and such other expendable parts of

machines.

MATERIALS CONTROLMaterials are one of the important elements of production as they form a high production, the

wastage should be kept at the lowest possible level To avoid this wastage, some type of control isexercised which is known as materials control. Materials controls means steps taken to reduce theamount of loss of materials at the time of receiving, storing and issuing the raw materials.

The objectives of material control are as follows1. To ensure requisite quality of materials2. To ensure regular supply of materials3. To ensure proper storage of materials4. To ensure minimum wastage of materials during storage and use.

Need of Material ControlIn an industrial concern the system of materials control is very significant because of the

following reasons.1. Materials control system would ensure the availability of different kinds of materials.2. As materials form a high proportion of total cost, wastage can be reduced if materials purchased

are of proper quality. This can be ensured by the materials control system only.3. Under the system of materials control the management may evolve some techniques which will

get the optimum use of materials from the workers.4. Materials control reduces the chances of understocking and overstocking by determining the time

when the order is to be placed.5. Efficient handling of materials and storage lowers the acquisition and possession costs and

thereby real cost is reduced.

PURCHASING

MeaningGenerally speaking, the term " purchasing " or " buying " means going to the open market

finding the lowest price at which a standard item is offered and selecting a supplier who offers it atthat price. But purchasing is much more than buying. It is an executive job involving cooperationwith other functions. It is managerial activity and it includes planning, organisation and control of wide range of' interrelated activities. Purchasing is very closely related to production as well asmarketing.

Purchasing is indeed an art and we need experts make scientific purchases in modern market.

Purchasing at present has assumed a technical aspect and needs the services of professionals andcompetent buyers.

According to Alford and Beatty "Purchasing is the procuring of materials supplies machines,tools and services required for the equipment, maintenance and operation of a manufacturing plant.

Purchasing PolicyPurchasing policy means purchasing sufficient for all the anticipated needs but neither

overstocking nor carrying stocks at low levels. A sound purchasing policy adopts the golden mean


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Merits1. The patronage is given to a limited no. of suppliers. The buyers can get better services special

treatment, prompt delivery reasonable prices etc.2. Large orders on a few suppliers gives benefits of lower price and quantity discount.3. Bulk purchase from a few suppliers may reduce the cost of handling and transport.

DemeritsWe should have at least two or three alternative sources of suppliers for alt important items.

This will reduce the danger of extreme concentration. It is very risky to depend on one source only. If it fails our business will be paralysed. The choice will be limited if you rely-on one source only.

Diversified Purchasing If purchase are made from a large no. of sources It is called as scattered or diversified

buying policy.

Merits1. Buying plan inflexible.2. When there is a healthy competition among many suppliers lower prices are expected3. It reduces risk arising out of extreme concentration4. Diversification makes selection easy and gives a wider choice to the buyer.

Demerits1. The buyer has to sacrifice quantity discount.2. There is an increase in transport and handling cost.3. Absence of special privileges and lack of better services.

PURCHASING PROCEDUREEvery business unit acting as a merchant middleman has a set procedure to effect purchases

from suitable sources of supplies. A procedure is the specific manner in which a certain activity is to be carried on. They set out definite task with their time sequence to be undertaken by assignedemployees within the limit laid down by the policy.

Steps in purchase procedureThe usual steps in purchase procedure are as follows

1. Purchase RequisitionA properly signed and approved purchase requisition authorised the purchase department to

order the materials, specifies what kind is desired, how much and when as well as where it is to bedelivered in the plant.

2. Obtaining QuotationsThe purchase manager on the basis of requisitions wilt send out inquiries to the probable

suppliers asking for quotations and samples. Inquiries can be made through public notice in news papers. Inquiries must specify demands and requirements in detail.

3. Placing of OrdersOn the basis of most favorable quotations orders will be sent to the selected suppliers. The

order must be on a printed form. It must be made in four copies. It gives the following information.a. Serial no. and date of order


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b. Name, address etc. of the safer c. Pull particulars of goods quality, quantity, description etc.d. Prices and terms of discounte. Manner, mode and date of deliveryf. Special instruction relating to billing, packaging, labeling, insurance and mode of transport etc.

4. Follow up-order It may be necessary to follow up an order to ensure prompt execution of order by the

supplier. It expedites the dispatch of goods and assures supply of material for production in time.

5.Comparison of Invoice & Goods received As soon as the invoice is received it will be carefully tallied with the order. A similar

comparison will be made when the goods actually arrive. Errors and omissions if any will be rectified by the usual device of exchanging debit of credit notes.

6. Entries in Books of AccountsWhen the receiving department makes a favorable report on the receipt of goods as per order,

the purchase department will forward the invoice with necessary endorsement to the account

department which will enter the invoice in the books of accounts or ledgers.

7. PaymentsIf cash discount is to be secured, the bill will be passed for making payments by cheque

immediately if purchases are on credit, payment orders will be issued after receiving and verifying thestatements of accounts.

INVENTORY CONTROL

MeaningAll goods between the receipt of raw materials and the dispatch of final product to customers

are termed as inventory. Inventory control means control over materials lying in store. Inventory

control keeps continuous track of inventories. It is not only record keeping. It aims at the followingtriple objectives1. Never run out of any thing i.e. out of stock.2. Never build up a very large inventory i.e. having much of any thing on hand (un-wanted stock).3. Never send out too many small costly orders for more i.e. never pay high prices.

Too many small orders also involve current clerical work. We lose quantity discount also. Wemust avoid hand-to-mount buying. Effective inventory control call assure at least 10 percent saving inour total investment.

ObjectivesFollowing are some of the objective of inventory control.

1. It reduces the minimum idle time due to shortage of materials and spare parts. Neither man or

machine have idle time due to lack of materials.2. It offers maximum service and satisfaction to customers with regard to fulfilling the due dates

strictly as per orders. The main of business is to create and retain customers.3. It is interested in minimising capital investment and cost of storage

Thus better sales through improved service to customers, lower cost through smoother production operations and tower investment through reduced inventories.

Importance of Inventory ControlFollowing are some of the important points of inventory control.


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1. A good inventory control minimises the possibility of delay in production. There is no danger of closure (lockout) of plant, un-employment, lower dividend and replacement of management.

2. Inventory control system helps to secure many economics i.e. no duplication in ordering, better use of available material, low freight charges, higher discount, lower price and less clericalworks.

3. Inventory control discourages dishonesty i.e. stealing material from plant.4. Inventory control system expedites (helps in) preparation of financial statements.5. Due to inventory control losses, damages, deterioration of materials can be minimised.6. There is a careful material handling.

Functions of Inventory ControlWith particular reference to commercial concern i.e. big wholesaler or larger retail

establishment the following are the typical functions of inventory control.1. Inventory control keeps the stock of goods at the most appropriate level at all times so that the

requirements of sales department can be always fulfilled.2. It maintains capital investment in stocks at a minimum desirable level,3. Inventory control protects the stocks from losses and damages due to improper handling,

pilferage, unauthorised removal from the store.

4. Inventory control receives and records of all goods souted in the store and keeps up to date watchon every out going item.

5. Inventory control indexes of all items of stock for their quick location. This is done troughidentifying marks, labels and bin cards.

6. It keep up to date records to show quantity and value of all goods in the warehouse. All receiptsand deliveries made from the warehouse and the point at which replacement of stocks becomenecessary by ordering new stocks.

Standards in Inventory ControlThere are four important quality standards in-inventory control.

1. The Maximum

It indicates the upper limit of the level of stocks or inventory. It points out the largest qualityto the normally kept in store in the interest of economy.

2. The minimumIt indicates the lower limit of the level of stocks or inventory, which is rely a maximum

reserve or margin of safety. This level of safety is used only in an emergency. It is the level acting assafe valve. It is the minimum level of stocks which must be always on hand. It is the minimumreserve of the dealer.

3. The Standard order It is the quantity of stock to be order for purchase at any one time. A repeat order for a

commodity is always of the same quantity until conditions change, necessitating a revision of

standard order. The purchase requisition gives this quantity for replenishment of stocks.

4. The Ordering Point It is the quantity of stock necessary to protect against the exhaustion of the stock

during the gap between the date of order and the date of actual receipt when the level of stock or the balance in hand reaches this level it is or indication that a new order must be placed at once.

Thus maximum indicates the upper limit of the stocks the minimum indicates the lower limit,the ordering point indicates when to order and the standard order indicates how much to order.


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ABC Analysis MethodABC Analysis is one of the techniques to exercise control by exception. It classifies the items

in the stores in to three categories namely. A includes costly items representing about 50% to 60% of the value of stores but constitute only 10% to 20% of the store items. In category B are put such itemswhich constitute about 20% to 30% of the stores item and represent about a similar percentage of thevalue of stores Category C comprises 50% to 70% of the stores items in no. but represent only 105 to20% of the stores items in value. Items A category strictly supervised where as less control may beexercised over C category items. Items of B category requires only moderate control such a controlknown as ABC analysis i.e. always better control. Costly items are often checked and thus chancemagnitude of discrepancies between the stock records and the actual inventories will be minimised.

Physical InventoryPhysical inventory is a control procedure to assure that book balanced and actual physical

balance are in agreement. It is taken periodically or once a week each group of stores. Accuracy of

records is more important than the system of control.

Routine for Physical InventoryThe routine for physical inventory is as follows

a. Incoming and Outgoing flow of materials in stopped. b. Scrap material is collected at one place for removal.c. Good material is arranged in tots ready for checking.d. Stocktaking card is made out for each tot. Quantity is counted, entered on the card and the card is

left on the material.e. Senior executive checks that there are cards on each file of material.f. He rechecks samples of quantities and then supervises the collection of the cards.g. All cards are sent to the account department for valuation analysis and totaling.

STOREROOM

MeaningStore keeping is that aspect of material control which is directly concerned with the physical

storage of goods. The store of goods is a connecting link between the shop or work place and production control department. Material, parts, work-in-process etc. move through the store, just asmoney move in to and out of a commercial bank. The principle function of store room is to act as aclearing house for goods i.e. receipts of goods bought and issue of needed materials in the plant.


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Store keeping is primarily a service function in which storekeeper acts as a custodian of theitems kept in the store. There are three objective of store keeping.1. To safeguard all goods in store against losses.2. To have available all such goods ready for prompt delivery when properly authorised.3. To provide maximum store keeping service to the manufacturing and sale department.

Location of storeroomThe determination of storeroom location will depend on the needs of the plant and will

depend on the needs of the plant and will vary greatly from plant to plant. Certain basic factors should be taken into account while following factors determining the location of the storeroom in amanufacturing plant.

1. The flow of materialsThe ideal location of storeroom should be where the movement of the materials from the

receiving department to the storeroom and from the storeroom to the processing department is theminimum possible, and where the most efficient transportation and material handling equipment can

be utilised.

2. The character of the materialsThe character of the materials to be stored affects considerably the location of storage area.

Materials that is not damaged by weather can either be stored out of doors, in a shed or merely protected by a roof un-machined iron castings, lumber, sand and similar items fall in this Category.Materials that is hydroscopic such as cement plaster and the like must be not only protected fromweather, but must also be stored in a place that is dry. Machines, casting, forging, and other materialssubject to corrosion must be stored in dry places and be coated to prevent rusting, liquid or materialswhose character is changed by low temperatures must be stored in heated storerooms. Finished textilegoods which may be damaged by dirt must be stored away from dust proof bins.

3. The quantity, weight etc of materialsThe quantity of each of the goods to be stored must be carefully considered in determining

the location of storerooms. When these quantities are known, the weight and bulk of each materialcan be determined and the space requirements calculated so that adequate provision may be made of immediate and future storage needs.

4. Layout of storeroomStorage location depend on place of receipt, place of use type of material, climatic conditions,

anticipated period of storage, cost of materials, volume to be handled etc. Planning of storeroomspace is essential to efficient operation and reduction materials handling cost etc.

5. Factor determining layout of storeroomCertain factors of layout of storeroom may be mentioned below

1. SimilarlyItems are store by class e.g. small tools, hardware, tubulars etc.

2. PopularityTurnover should be considered so that fast moving items should be stored near the point of

issue. Retail stocks also should be kept handy.

3. Size of item


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Large items should be stored near the point of use e.g. Drum, steel coils at the drum plant.

4. Capacity of storage facilitiesLocation of doors, size and availability of cranes, size of platforms and ramps, allowable

floor load etc.

5. Character of materialsHazardous, sensitive and perishable materials like cement, welding electrodes, acid,

inflammable oils.

6. Turnover The first in the first out principle whereby rotation of stocks is ensured especially of

perishable goods.

PRODUCTION PLANNING AND CONTROLProduction planning and control is a managerial function which plans, directs and controls a

material flow system in the plant, to achieve target set by the marketing department with at mosteconomy and efficiency.

Production PlanningProduction planning is concern with managerial planning of production of goods and

services. Production planning has been defined as, " the means by which a manufacturing plan isdetermined information is issued for its execution and data 'collected and recorded which will enablethe plant to be controlled through all its stages.

Production planning answers two main questions (i) What work is to be done (ii) What timewilt be taken to perform the work as per plan. Sales forecast constitute the base of production

planning. On the basis of accurate and up to date sales records we can forecast the sales potentials of a company for future the coming three, six months or even for next year.

Production planning prepares estimates of materials, personals and equipments required toachieve the objectives. It also prepares and keeps ready, alternative plans for action to face

emergencies or any unfair seen circumstances.

ObjectivesProduction planning is the powerful instruments in industrial management. Some of the

important objective of production planning are as under;1. It prescribe desirable level of stocks of raw materials as well as stocks of finished product so thatthe enterprise can meet in time the requirement of the market.2. It aims to ensure steady flow of production activities.3. It tries to secure balance of all activities.4. It tries to reduce the minimum the operating cost.5. It tries to honor the delivery dates.6. It tries to achieve target in sales and profits.

7. It tries to creates specified number of fobs.8. It tries to utilise available plant facilities.

This in production planning we have to decide process route or sequence of operation. Thenwe have to con side and decide a plan of sequence of operations to complete each process and finallywe decide a plan of sequences of work element to complete each operation.

PRODUCTION CONTROLProduction control is a dynamic managerial function comprising four elements i.e. Action

Feedback, Evaluation and adjustment. It regulates and stimulates the orderly flow of materials in the


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manufacturing process from the beginning to the end i.e. the finished product. Production controlreceives sales orders and converts them into production orders, feeds these orders to the plant in adesirable sequence so that there is no internal disorder.

Production control is a function of directing and regulating the orderly movement of goodsthrough the entire production cycle from the raw material to finished product.

ObjectivesFollowing are some of the important objectives of production control

1. It facilitates and coordinates activities concerned with the kind amount, location, movement andtiming of the various commodities used and produced by a various commodities unit.

2. It aims to produce a right product in a right quality and at a right time.3. It aims to secure optimum combination of resources and methods so that the average cost of

production is the lowest.4. It want minimum inventories of raw material and finished product more rapid turnover so that the

capital investment can be reduced and company can secure higher return on investment.

STEPS IN PRODUCTION PLANNING & CONTROLWhen the customers order is received, the firm has to decide whether the order can be

executed from the inventory (stock) of finished product or whether the product demanded is to be produced specially. When the customer's purchase becomes production requirement the production planning and control department will start its activities. These activities are divided in to four stagesi.e. Routing. Scheduling, Dispatching and Executing.

1. RoutingIt is planning stage, it determines where the work is to be done. It is the determination of

manufacturing path when and where work will be done on a product and which specific machines areto be used.

2. SchedulingIt is also a planning stage. It is the establishment of time sequence. It provides the time table

of manufacturing indicating the sequence when the work is to be done. It sets the timing of production control. Time table of all activities can assure delivery of goods in time.

3. DispatchingIt is the stage of action. It is the issue of orders and assignment of offers at the correct time a

function similar to dispatching of trains in rail road industry. It deals with decision about who will dothe work.

4. ExecutingIt is the compliance stage. It is also called follow up or stock chasing. It is the function of

determining whether or not the work progressing as per plan. The expediter serves as feedback link between the work performance and scheduling. It is control unit to ensure smooth flow of work and to

expedite the flow of work.The following table shows the functions of production planning and control.


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5. MARKETING AND SALES MANAGEMENT

DEFINITION OF MARKETINGThe emergence of marketing as a business discipline is of relatively recent origin, through it

has been practiced in one form or the another since the days of Adam and Eve. The ideas associatedwith marketing have undergone a great deal of change over the centuries. Marketing has been defined

by various peoples in various ways.The American Marketing Association has defined marketing as " The performance of

business activities that direct the flow of goods and services from producer to consumer".Hansen defines marketing as, "The process of discovering and translating consumer needs

and wants in to product and service specifications, creating demand for these products and servicesand them in turn expending this demand."

The Institute of Marketing defines marketing as, "Marketing is the management functionwhich organises and directs alt those business activities involved in assessing and convertingcustomer purchasing power in to effective demand for a specific product or service to the final

consumer."Edword Condiff defines marketing as," The managerial process by which products are

matched with markets and through which transfers of ownership is affected."In all these definitions emphasis has been given on the consumer and his needs and wants. Marketingis essentially a bridge between production and consumption and therefore must be consumer orientedand hence must have a part in decision making in all phases of management. The very objective of marketing is to influence the buying decisions of the people. The job of marketing is creating acustomer and also recreating a customer and holding and attracting the customer.

THE MARKETING MIXWe have seen that the marketing job essentially consists of making a composite after

acceptable to the consumer and of being capable of fulfilling his needs. How dose any-organisation

make a composite offer to the consumer? In the first place, it chooses the product that would meet theidentified needs of the chosen consumer group. Secondly it performs various distribution functionslike transport, warehousing, choice of channels etc. So that the chosen product can conveniently reachthe consumer. Thirdly the firm carries out a number of promotions measures to communicate with theconsumer and to promote the product. These includes advertising, personal selling and various sales

promotion measures that attracts the consumers. Lastly the firm six to achieve the consummation of the exchange process to the pricing mechanism, sticking the level of price i.e. acceptable to both thefirm and the consumer.

Elements Of Marketing MixAn American marketing expert Jerom McCarthy explain the marketing mix in terms of four

P's. These four P's are product, price, promotion and placement. These four P's are intimately

connected with each other. Each influencing the others in a complex and variety of ways. These four P's put together form the marketing mix. In each of the four P's, there are several important subvariables which are as follows :

1) Product VariablesUnder product variables following sub variables are included, these are product line and

range, design, quality, features, models, styles, appearance, size and warranty, new product policy, packing type, materials, label, branding and tread mark, merchandising and pre sale and after saleservice etc.


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2) Price Variables Under price variable following sub-variables are included. These are pricing policies, level of

prices, discounts, rebates and level of margins, terms of delivery, credit terms, payment terms andinstallment facilities, resale price maintenance etc.

3) Promotion Variables Under promotion variable following sub-variables are included. These are: Personal selling,

advertising, sales promotional efforts like display, contests, trade promotions, publicity etc.

4) Place VariablesUnder placement variable, following sub-variables are included. These are Channels of

distribution like remuneration, dealer principal relations, physical distribution like- transportation,warehousing, inventory levels, order processing etc.

MARKETING STRATEGYMarketing problems are quite different from the problems of production or finance.

Marketing bears the brunt of the goals of entire enterprise. It is "a difficult task of predicting what the

customers will desire in the near and distant future. Buyers behavior and motives vary frequently. It isnot easy to predict with precision how a given quantum of money wilt be spent by the buyers. Their whims and fancies enter the picture and many sensitives are involved in the process No wonder,marketing described as a strategic function. Marketing strategy can be explained as the complete andun-beatable plan for the attainment of the marketing objectives. The marketing objecting, will tell uswhere the firm wants to go. The marketing strategy will provide the design for getting there. Thestrategy is essentially a battle plan. It is no exaggeration to say that the marketing strategy in severalof its features resembles military strategy. In both, decisive action and foresight are supreme,intelligence and experience count a lot timing and resources deployment influence success. Themarketing man is like the army man. His strategy is to fight to competitors so that the his businessmarches on.

Marketing strategy is the sum total of several strategies i.e. marketing .mix strategy, timing

strategy, communication strategy and strategy of offense.Let us discuss these strategies one by one.

l. Marketing Mix StrategyMarketing Mix Strategy requires an intimate understanding of control lable or marketing mix

variables and uncontrollable or behaviourable variables relating to consumer, competition, trade andenvironment that continuously influence the marketing system It would be no exaggeration to say thatthe juggling of marketing mix is the essence of Marketing strategy. Marketing efficiency could beimproved considerably by withdrawing funds from one element of the marketing mix and giving it toanother. Again, it may be possible to improve Marketing efficiency by pumping in more funds insome markets and reducing the commitment to another.

2. Timing StrategyIt is an important and integral part of the marketing strategy because even the most carefully

planned strategy will become a flop if its implementation is not appropriately timed. When themarketing man introduces a new product, or launches a new advertising program or announces the

price change, it has to be at appropriate time. If he delays it, it may misfire. If it is too early, it may beequally unproductive.3. Communication Strategy

For a creative marketing strategy to work the firm will made an effective CommunicationStrategy. A creative marketing strategy can not operate with out a smooth and effective flow of


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information. It should clearly spell out the nature, type and sources of information that should flowfrom the field to the firm. It should also ensure that the information is accurate, timely and relevant.Simultaneously there should be an equally effective flow of information from the "brain cell" to the"field". Such a flow will include instructions and commands, tips and suggestions and factualinformation and detailed action plan. The success of marketing strategy depends on effectiveCommunication Strategy. An imperfect Communication a vague explanation or an incompletemassage may create problems. Any weakness in the two way communication will adversely affectmarketing strategy.

4. The Strategy of OffenseFor any firm operating in a competitive environment, the marketing strategy should involve a

strategy reacting the development. Many firms prefer to wait and see what their competitors are goingto do whenever they are confronted with a marketing problem. Such firms usually get only the leftovers in the market. Because the best marketing opportunities have already been captured by the moreoffensive and far-sighted competitors. Careful analysis of the pros and cons of a situation is veryessential. To wait and merely react to the other peoples action is not an adequate strategy. Nor is itwise to feel safe and protected in the midst of crisis situation in the, market. Creative marketing has tohave as its essential ingredient, a strategy of offense a strategy of attack and action.

MARKET RESEARCHMarket research is the tool available to the firm to spot customer needs and to find out how to

satisfy those needs. It helps the firm in the implementation of its marketing programs. With theincreasing complexity of marketing and business activity, the collection and study of informationrelating to customers products and market also becomes equally complex necessitating specialisedskills and sophisticated techniques.

We find people using the two terms ' Market Research and marketing research "interchangeably. Actually market research is a part of marketing research. Marketing research is acomprehensive term which means a scientific study of all problems related to the transfer and sale of goods and services from producers to the consumers. It consists in finding out to who will buy, whythey will buy, when they will buy, how much they will buy and so on. It aims at locating lithe most

fertile markets which may be certain geographical areas or segments of population.Some typical subject for research in Marketing are location of market, quality of market,

improved methods of distribution, analysis of products, analysis of sales, time of advertising place atadvertising, improved copy of layout, sales training, salesman's quotas and territories, hisremuneration etc. Marketing research enables the producer to determine, through the application of scientific methods.1. What to produce2. Who the potential buyers are and where are they located.3. What and when & how much the consumers want.4. How much to produce and5. How to sell and when to sell in order to maximize the services rendered and the net profit earned.

Definition of Marketing researchLet us consider a few definitions of Marketing research. American marketing association

defines Marketing research as ,"A systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services from producer to consumer".

Green and Tull defines Marketing research as, "It is the systematic and objective search for and analysis of information relevant to identification and solution of any problem in the field of marketing.


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Consumer CharacteristicsConsumer characteristics such as their number, geographical dispersion. frequency and

regularity of purchase, average quantities bought and their susceptibility of different selling methodsgreatly influence the channel selection. Conditions conductive to direct sale or through short channelare small number of consumers, their geographical concentration, large units of purchase andinfrequent and regular purchases. Where the consumers are large in number geographically dispreadand purchase small quantity frequently and irregularly, lengthier marketing channels are indicated.

Buying MotivesWhy does a buyer buy certain things? What motivates his purchase? It is said that the

dissatisfaction of human beings create new markets. Why does an individual buy a product, a specific brand? Why does he switch over from one brand to another? Buying motives can be defined as all theimpulses, desires and considerations of the buyer which induce the purchase of certain products.

Product Motive and Patronage Motive.Product Motives:- Consumers impulses, desires and considerations explaining why they buy

certain products are called product buying motives or product motives. Product motives may beclassified as Emotional and rational product motives.

Emotional product motives are those impulses which persuade a consumer to buy a certain product without evaluating the plus and minus points of the action. Emotional product motivesnormally appeal to the customer's pride or sense of ego, his urge to imitate others.

Rational product motives, on the other hand involve a logical analysis of the intended purchase-what purpose is expected to be served by the product, the various alternatives available tothe buyer etc.

Patronage MotivesThose influences explaining why consumers buy from particular firms are called patronage

motives. Why does the customer patronize specific shops? What are the considerations or impulsesthat persuade him to do so? Patronage motives can also be grouped into emotional and rationalcategories.

Emotional patronage motives are those that persuade a customer to buy from specific shops,without any logical reason behind that action. He may like the place for purely subjective reasons.

On the other hand, if the customer selects a shop because he knows that it offers a wideselection, or the least models or good after sales services, or the services of competent salesmen.

The knowledge of patronage motives of customers is important to marketers because theintention and need of marketers is to attract patronage, from as many customers as possible and toretain it.

Types of MarketIn the ultimate analysis market is people and marketing is influencing the buying decisions of

people. The distinction between sellers market and buyers market is commonly used to indicate thedegree of control an enterprise exercises over the market place in general and customers in particular.

Sellers Market and Buyers Market In setters market situations an enterprise can have substantial control over the market.

Economists call this as a state of monopoly. Whereas in buyers market situations an enterprise canhardly exercise any control over the market. Economists call this as a state of perfect competition.

Consumers and Producers Market A consumers market refers to the market of the ultimate consumers who buy products for

direct consumption. Such products may be durable or perishable. In consumer market the buying


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decisions are influenced by personality intelligence, culture and the socio-economic group he belongsto i.e. heredity, wealth, occupation, life style, education etc. In consumer market buying is guided bymore or less by need in case of essentials and by impulse in case on non-essentials. In consumer market buying is mostly individual buying.

A producers market refers to a situation where the products are brought not for directconsumption but for some intermediate uses. i.e. installation of capital goods like plant, machineryetc., accessories, equipments, operating supplies, fabricating materials and parts and industrial rawmaterials. Industrial buying behavior is influenced by both organisational and psychological factors.Some of these are, the company's policies and systems, value analysis, feeling of safety and securitywhile buying from a reputable supplier, status and recognition of the purchasing manager amongother managers and such other factors like quantity, quality, service, delivery, regular availability andcredit. In case of producers market the mode of buying is more or less a case of committee buying.Another important factor which is relevant in a producers market is service after sales.

Product Presentation and its effectA product will fail if it is offered to the wrong market. Matching the right product with the

right market is the essence of marketing. In matching products and markets, several companies haveflopped. The process calls for a comprehensive knowledge about the profile of a given market and the

profile of given customer segment. Which market can absorb a given product, which group of customers can patronize the product, what are the buying habits and buying motives of thesecustomers all these aspects will influence the acceptance of a product. To understand thesedimensions marketers have to undertake detailed market studies and customer studies only with thestrength of such studies can a marketer presents his products appropriately.

Product presentation refers to the manner in which a product is offered to a particular customer segment or aimed at meeting a particular customer need. Sometimes a product is presentedagainst a similar competing product. In several of the consumer product. The presentation is broughtabout through advertising. By exploiting the distinctive product characteristics, the product isadvertised and made to appeal to the target customer segment.

Some times a product a product presented initially for a particular market segment is re- presented to appeal to a wider market.

The success of marketing depends heavily on an effective communication flow between thecompany and the consumer. Manufacturing a product and making it available on the market is only a

part of the company job. Perhaps it is more important to make it known to the consumer that the product is available in the market. It is also essential to propagate the distinctive features of the product.

Product presentation takes place through various cues and media with the intention of creating a favorable response. While presenting the product in the market, its colour, shape and sizeits labels and lettering, the brand name the material used all carry some communication cues. Theright colour scheme communicates the nature of the contents. It captures the attention of consumers.It reflects the neatness and elegance of the product inside. It facilitates easy reading of theinstructions.

Just as the colour of the package its size, shape and design plays a very important role in

presenting the product A good package design is eye catching and is not a strain for the consumer who looks at it and examines it. A bad package design can harm the total product massage. The

product may be a quality product, but it may not be accepted in the market if the package design doesnot succeed in evoking a favorable response.

Brand name also plays a very important role in product presentation. The buyers identify the products and distinguish one from another through the brand name. A good brand names should beable to suggest to the buyer what type of distinctiveness it claims.

Physical features also play a very important role in presenting a product. Just like the package, its colour, design shape and odour. Pink colour oval shape, jasmine scent, silky feel, pocket


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size, feathery touch, all are product attributes. Price of the product also plays a very important role.When several brands of the same product are available consumers tend to use price as a cue toquality. The higher priced brand succeeds in giving greater quality assurance to the buyer. Similarlywith product that normally fall under the category of gift products, when a person selecting a giftitem, he normally likes to avoid a cheap brand. He may select the higher priced rod the market he

producer should taken in to consideration the psychology of the consumer.

Definition & Importance of AdvertisingAdvertisement has been defined as, " Any paid form of non-personal presentation or

promotion of ideas, goods or services by an identified sponsor." In other words, 'it is aform of paid publicity. It has a strong persuasion power. It is a component, of company's

promotional mix. The sales representatives, middlemen and advertising form an integratedcommunication network for sending messages about a product to prospective consumers.

Advertising can be successful, depends on the objectives of advertising and the effectivenesswith which the advertising program is carried out.

ImportanceAdvertising involves expenses but when the cost of advertising is compared with the cost of

other ways of approaching a mass of prospective consumers, advertising is a relatively less expensivemethod. When the company does not know the names and addresses of potential customers, there isno other way except to advertise through a mass media. Following are some of the advantages of advertisement.1. Advertisement makes the prospects aware of the product and its brand.2. Advertisement helps selling on mass scale both by persuading new buyers in a given region and

by extending the persuasion to new regions.3. Advertising helps the retailers to stock goods which are better known and therefore have better

sales possibilities.4. Advertisement promotes competition, and therefore, many advantages to competition may follow.5. Advertising is a peculiarly attractive alternative to price competition.6. Advertising helps salesmen while making personal calls. Since the audience are already familiar

about the advertised product, the salesman's task becomes easier and his appeal effective for pricechanges.

7. Advertisement encourage the creative arts and the artists. In the process it even develops anaesthetic sense in the society.

Objectives of AdvertiseSome common objectives of advertisement are as follows :

1. Advertising may be used for introducing a new product. When the potential consumers havenever used such a product before and as such the product itself needs an introduction.

2. Advertising induces the middlemen to store and handle the product. A well advertised product islikely to create curiosity to by among the customers and this possibility encourages themiddlemen to store the product.

3. Advertising creates a favorable climate for maintaining or improving sales customers are to becommonly reminded about the product and the brand.

4. Advertising may be necessary to publicise some changes in the marketing strategy, when changesare introduced in the prices, improvement in quality, size, weight, packing etc. the changes must

be informed by advertisement to customers.5. Advertising is unavoidable to complete with or to neutralize competitor's advertising. Advertising

basically helps to create product differentiation.6. A strong built image through long advertising helps to keep new entrants away. It helps to built

up certain monopoly area and the new entrants hesitate to make the particular type of investment.


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Thus a successful advertisement campaign ends when the buyers themselves have begun toadvertise the product and its brand. It must be remembered that advertising is only a component of a

broad marketing strategy.It must be cautioned here that advertising will not solve all marketing problems. Public

cannot be fooled by advertising. Advertising can only give information about the new product. If candevelop inquiries, create demand stimulate trade, help to determine buyer preference, support andsupplement sales programs, reduce selling expenses and build customer relations.

The images created by advertisement must be kept intact in reality. For example if theadvertiser promise to give a VIP treatment to the customer when he visits the advertisers business

place, the promise must be fulfilled.

Media of AdvertisingThe major mass media available for advertisement are newspapers magazines, business

journals, radio, film, television, direct mail and out door (bill board) or at fairs and exhibitions. Inaddition to these, there are several other minor media of which transport cards, posters, advertising onmatch boxes postal stationary etc.

Newspapers are a strong media with a high readership. It is ideal for selling at a national levelas well as to those products whose customers belong to all kinds of social status advertising is

one of the best read features both in newspapers and magazines.Advertisement over radio and television has gained considerable importance in India. It's

messages are sent to millions but no discrimination can be made.In newspapers and magazines the advertiser spends money to buy space whereas on radio and

television the' advertiser spends for buying time.Outdoor advertising has the advantage of impressive size at a comparative low cost, with a

suitable location it can be highly successful in its impact.Direct mail is the most selective medium. It is send to the most probable prospect and can

carry the maximum information that the advertiser wants to give combined with combined withconversional offers gifts, it can have a direct impact on prospect.

Fairs and exhibitions have assumed an increasingly importance in recent times.

Methods of SellingA number of leading marketers and advertising agencies have taken up several sales

promotion methods in their bid to capture as much sales as possible. Sales promotion activities areessentially aimed at demand creation. Methods of selling includes all those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing arid dealer effectiveness. It includes trade shows, exhibitions, couponing, sampling, premium, trade allowances,dealer incentives consumer education, demonstration activities, rebates, bonus pack and direct mail.

(A)Sampling:-This includes distribution of free samples. This is an expensive but powerful method. The

samples might be delivered door-to-door, offered in retail shop or at fair. This method is useful for introducing new products such as soaps, detergents, cigarettes, bidies, toothpastes etc.

(B)Couponing A coupon is a certificate that entitles the consumer to a specified saving on the purchase of a

specified product. These coupons are issued either by the manufacturer or by the retailers. Theretailers are reimbursed by the manufacturers for the value of coupons redeemed. This is a lessexpensive method.(C) Premium or Bonus


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An offer of a certain amount of product at no cost to consumers who buy a stated, amount of a product or a special pack there of is called premium offer or bonus offer. Premium offer is popular now a days.

(D) Money refund order This offer is usually stated in media advertising that the manufacturer will return within a

stated period all the purchaser's money if he is not satisfied completely.

(E) Contest An opportunity is provided for consumers to participate is a contest or game. With the

chances of winning cash prices, free air trips, or goods. This form of selling is very effective. Acontest calls for the consumers to submit an entry to be examined by a panel of judges who will selectthe best entries.

(F) DemonstrationA new brand is promoted this way. The demonstrations are staged at exhibition or fairs or

even at door to door basis. This method is employed for cosmetics, household appliances etc.

(G) Price off This involves an offer to consumers of a certain amount of money off to regular prices of a

product prominently printed on the label.

(H) Buying allowanceA buying allowance is offered to dealer to induce him to by a new product introduced by the

manufacturer. It involves an offer to dealers of a percentage off on cash minimum quantity purchased.The buying allowance is deducted from the face value of the invoice.

(I) Count and Recount allowanceThis method is particularly useful t6 clear the distribution channels of an old product. This

involves an offer of certain amount of money off.

(J) Free GoodsUnder this method an offer is made of a certain amount of product to wholesalers and

retailers at no cost on every purchase of a stated amount of the same product i.e. 1 free item withevery 10.(K) Dealer Listed Promotion

Under this method advertising of other publicity materials like calendars issued bymanufacturer carries the name and addresses of retailers who stock the product.

(L) Push MoneyThis is an incentive payment is cash or a gift to retailers to push the manufacturer brand at so

many rupees per article sold. This is an expensive method.

(M) Sales Contest It is devise used to stimulate and motivate distributors, dealers an their sales staff. Each

seller is made to feet that he has some chance of winning and thus participates in promoting the sales.

(N) Sales Force PromotionsPersonal selling is the most important method of sales promotion. To make if effective sales

force promotion is felt necessary. The tools are bonus sales force contest, sales meetings, salesmen'sconferences etc.


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(O) Bonus to Sales ForceA quota is set for a shorter period. Bonus is offered on sales in excess of the quota. It is an

established fact that salesmen sell more when they are given a target.

(P) Sales Force Contest Sales force contest are announced to stimulate company salesmen to redouble their selling

interest with prizes going to the top performers. The competitive sprit in men usually responds to thismethod.

(Q) Sales Meetings and ConferencesThese are conducted for the purpose of educating, inspiring and, rewarding the salesman.

New product and new selling techniques are also described and discussed.

Sales Performance ObjectivesWhen a salesman has been selected, hired, placed, inducted and trained for his job, he is

entitled to know from time to time how he is measuring up to expected standard of job performance.Systematic performance appraisal serves also an check on the success of recruitment, selection,

training and placement procedures, The performance of a salesman affects the success of personalselling efforts and net profit of the company. Therefore evaluation of performance of the salesman

becomes necessary. It should cover the evaluation of salesman's personality, knowledge andmotivation.

The performance of the salesman can be judged from the following:The salesmen's reports such as call reports, expenses reports, report on new business, report

on lost business, a periodic report on local business and the sales managers personal observations.For evaluation of salesman the following methods are adopted.

1. Salesman to salesman comparison.2. Current to past sales comparison.3. Sales territory potential comparison.4. Sales quotas.

ObjectivesThe main objective of sales performance is to facilitate the planning and control of sates

operations. Other objectives of sales performance are as follows:1. To improve market coverage and avoid losing order to competitors.2. To reduce selling expenses ratio.3. To coordinate personal selling and advertising efforts more effectively.4. To built salesmen's interest and morale.5. To improve salesmen performance evaluation.6. To allow salesmen to spend more time with customers and less time on the roads.7. To ensure greater regularity of calls upon customers and prospects.

8. To improve customer service in general.

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6. INDUSTRIAL PSYCHOLOGY

MEANINGIndustrial psychology is of recent origin and it tries to apply psychology to industrial

problems. It is said that industrial conflicts are essentially economic involving questions of wages,hours of work promotion etc. and psychology has very little to do with economic problems.

Industrial psychology means application of psychology to industry. It is primarily interestedin human happiness and welfare and secondarily in human efficiency. It ultimately recognises theassociation the association between human happiness and human efficiency. It seeks to makeindustry more efficient but it firmly believes that industrial efficiency can be achieved only byconsidering the maximum well-being of human element in industry and never by sacrifice of humanvalue in industry. It is closely connected with human factor throughout industry. It deals with worker as a living mental organism having flesh and blood and not as a blind lifeless machine.

Some of the main definitions of industrial psychology are as follows.Blum defines industrial psychology as, "Industrial psychology is simply the application of

psychological facts and principles to the problems concerning human relations in industry".Harrel defines industrial psychology as, "It is the study of people at work in industry and

business".From the above definitions it is clear that industrial psychology is the branch of psychology

which studies human behavior in industrial circumstances. It studies physical as well as mental aspectof work, behavior of the people and the relationship of work and job satisfaction.

SCOPEIndustrial psychology includes almost the entire working population. The subject has a wide

application. It is concerned with the physical aspect or the environment of work. It is primarily astudy of principles and behavior of human relationship. The relationship between worker and hiswork, the worker and his boss, the worker and his follow workers and the worker and the

management.Industrial psychology wants to acquire better understanding of individual and group behavior

at work and better control of the relationship between worker and worker, worker and management,worker and boss, worker and his work. If these relations are good workers are satisfied and we have ahigh employee morale.

OBJECTIVES OF INDUSTRIAL PSYCHOLOGYThe ultimate objective of industrial psychology is, of course, high productivity or industrial

efficacy. But the primary aim of industrial psychology is not merely to obtain greater output but togive the worker greater ease or comfort at work i.e. mental and physical which means job satisfaction.Industrial psychology has the following objectives.

1. Personal SelectionIndustrial psychology tries to find out how a suitable individual can be sheeted to perform a

particular task. If this is done the work gets a correct worker and the worker himself gets the work done he can do the best.

2. Care of Workers HealthThe objective of industrial psychology is to discover the ideal conditions in which the best

mental and physical health of the worker can be maintained. If the worker does not have good mentaland physical health, the worker cannot work satisfactory.


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3. Protect Economic InterestMental and physical health can not be maintained unless a workers economic interest is

secured. If he is un-certain about his income he cannot be encouraged to give his best. Industrial psychology evaluates the efficiency of the worker and determines adequate salary.

4. Search for Proper Method of Work One of the important cause of accident in factories is the improper method of work, which

creates fatigue and boredom. Industrial psychology finds out proper methods of work so that causesof accident are reduced and fatigue and boredom is reduced to the minimum.

5. Reform of working conditionsIt is the task of industrial psychologist to find out the ideal conditions in which the highest

efficiency can be attained. The important working conditions are adequate and proper lighting, proper ventilation, absence of noise, periodical rest, canteen arrangement etc.

6. Reform in MachineThe worker and the machine are equally responsible for number of accident and amount of

fatigue. Prevention of accidents and reduction in fatigue can be achieved by proper designing of machine. The industrial psychologists can give useful suggestions in the improvement of machine andtools.

7. Humanistic ApproachPsychological studies have established that human relations in industry cannot be good unless

a humanistic approach is adopted, industrial psychology tries to improve the relations between themanagement and various levels of workers giving humanistic approach.

8. Reform in Human RelationsIndustrial psychology tries to suggest proper and cordial human relations between workers

and management.

UTILITY OF INDUSTRIAL PSYCHOLOGYProgress in the field of industry depends not only on advances in technology but also upon

the friendly and pleasantness of human relations. Industrial psychology is the study of people at work and is concerned with the entire spectrum of human behavior its' people is the entire process of managements dealing with people at work. There is hardly an area in which can not play its role. It issaid that the management of personal now a days is more a problem of psychology than of economic.

Industrial psychology is a useful aid to the efficient management of people at work. Industrial psychology is useful in the following areas of management.

1. Recruitment of personalThe importance of psychological factors for proper recruitment selection and placement can

not be over emphasised because appropriate metaling of job requirement with the employee's abilitieslead to reduction in the cost of hiring, supervision and production. The industrial psychologists makesan important contribution in the field of job analysis standardised application from scientific serreningof applications, use of psychological tests for vocational fitness etc. Thus psychology helps inrecruiting the right man to the right job.

2. Selection & PlacementRight man should be selected for the right job and industrial psychology helps in this efforts.

It develops various devices such as interviews and psychological tests in order to achieve the


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objective of the selection. It also helps the placement of workers at different jobs. Proper placementreduces the problem of in discipline and inefficiency. This is possible only with the help of

psychology.

3. Promotional SchemesWhy should a worker be promoted or transferred of discharged? These employment

situations should be based on abilities usefulness and seniority. Performances appraisal is one of the psychological techniques to recognise the people's ability. Psychology helps in this regard.

4. MotivationPsychology assumes that the causes of different types of human behaving in industry and

business are the needs or motives that drive an individual to behave in a particular way. Industrial psychology problems into behavior of people at work to determine the conditions in which andindividual feels motivated and within to work whole heatedly to maximise the productivity.

Industrial psychology identifies the financial and non financial incentives to motivate theworkers.

5. Prevention of Accident

Psychology has provided valuable suggestions not only in the solution of conflicts but also inthe prevention of accident. Psychologists have now discovered the kinds of machine that should bedesigned, the manner in which they should be operated and the plan according to which they should

be arranged in a factory. The purpose of this study is to find means of preventing accidents.

6. Maintaining MoraleIn order to maintain a certain level of production & to improve the quality of product it is

necessary to maintain a high level of morale among the workers. Morale is influenced by a large no of psychological factors, i.e. affection, freedom, desire to make sacrifice, proper leadership. The psychologist can give suggestions for maintaining morale.

7. Study of Efficiency

In an industry the workers do not have the same degree of efficiency. The psychologists findout which person has the requisite efficiency to perform a particular job. He can be also givesuggestions for improving efficiency by removing those obstacles which hinder efficiency working.

8. Creating Proper LeadershipThe study of leadership is the responsibility of social psychology. In the field of industry the

supervisor must not only be an official but also a capable leader so that he can guide the workers properly and encourage them to work hard. Industrial psychologist can tell the industrialist about the person who has such qualities or who Is capable of developing theme.

9. Wages & Salary DeterminationIndustrial psychology helps in determination of wages and salaries of workers. By studying

the techniques of job evaluation and merit rating a national wage and salary structure is determine.

10. Solutions to Fatigue & MonotonyThe most important obstacle in the way of increasing production is fatigue & monotony.

Industrial psychology finds out way & means of eliminating them. These suggestions can be of greathelp in removing fatigue and monotony of industrial workers.

TYPES OF FACTORY ENVIRONMENTFactors determining conditions of factory environment can be divided in to two classes.


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1. Physical conditions.2. Psychological conditions.

Physical ConditionsUnder physical environment the following factors are very important. They are as follows

1. Lighting The ideal lighting is the day light. But day light changes according to the seasons. Defective

light leads to fatigue strain & haddock. In lowers the rate of output and increases spoiled work. Inmodern factories, natural day light may not be possible. Therefore artificial lighting is to be providedin the factory such as tube light. In lighting two points must be remembered, i.e. there must besufficient tight to make everything to be seen quickly and dearly and there must be controlleddistribution of light which must be pleasant to the eye.

2. Temperature And HumidityTemperature has a great effect on work. Too high or too low temperature may be injurious to

the workers and may affect their health adversely. In such as iron-steel where temperature is high, production goes down in summer. In textile industry, on production adequate cooling, heating

arrangements should be provided in the factories. It reduces the discomfort.

3. VentilationVentilation is an important factor in industrial efficiency. Air stagnation is an important cause

of fatigue and in efficiency of labour. The rate of output, sickness, labour turnover and the accidentrate are important criteria, reflecting the effect of ventilation. If there is no free movement of air in awell ventilated industry should be call rather than hot. Air should be moving and circulating.Adequate arrangements must be made for free air movement. Fresh air should be injected bymechanical devices.

4. Noise Noise has been defined as unpleasant sound. Continuous noise and vibration constitute

important cause of discomfort in the factory. It is true that continuous loud noise has a bad effect onthe nerves of man and causes strain. When noise is made by the workers themselves it may not beunpleasant to them. But when noise is made by other people we get irritated. However noise must bereduced. Music does influence efficiency of workers and low background music in the factory cancreate pleasant atmosphere conductive of efficiency.

5. Other Physical ConditionsIn addition to these above conditions there are other physical and material conditions which

influence ant worker and his work. For example, if there is a good and clear provision of urinals,latrines, bathrooms, refreshment rooms, canteen etc. The workers time in the factory becomes more

pleasant. The work place should not be foul smelling, dirty or dusty.

PSYCHO-SOCIAL ENVIRONMENTPhysical and mental case of work generally go hand in hand and they are closely

interdependent. Best atmosphere & conditions of work reach down to the springs of willingness &cooperation which are vital to the employee moral and labour efficiency. Bad working conditionscreate discomfort and lead to mental reaction in the form of disharmony, disaffection, conflict andfrustration. As a result workers develop grudging and non cooperative attitude. If factory a

Industrial ion and Management by Dv Shirbhate

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