MANAGEMENT

CONCEPTS
CHAPTER 1
Siti Zahara binti Mohd Ariff
INTRODUCTION
• Industrial management deals with the
development, improvement, implementation
and evaluation.
• Also deals with designing new product
prototypes more efficiently.
• The principles of industrial management are not
only applicable across industries, but across all
operation in government, commerce, services
or industry
INDUSTRIAL ENGINEERING

• Industrial engineering plays a vital role in increasing the

productivity.
• Industrial engineering techniques are used to analyze
and improve the work methods in order to eliminate
waste and proper allocation and utilization of
resources.
• Industrial engineering are defined as a profession in
which a knowledge of mathematical and natural
sciences gained by study, experience and practice.
INDUSTRIAL ENGINEERING
The American Institute of industrial engineers define
industrial engineering as:
Industrial engineering is concerned with design,
improvement and installation of integrated systems of
men, material equipment.
The prime objective of industrial engineering is to
increase the productivity by eliminating and non-value
adding (unproductive) operations and improving the
effective utilization of resources.
 HISTORICAL DEVELOPMENT OF
INDUSTRIAL ENGINEERING
• Industrial engineering has developed during past 250 years.

– i) Pre industrial revolution (up to 1800)

– Ii) Industrial revolution (1800 – 1890)
– Iii) Scientific management (1890 – 1940)
– Iv) Operation research & quantitative phase (1940 – 1980)
– V) Automation & computer integrated manufacturing
phase (1980 – present)
 HISTORICAL DEVELOPMENT OF
INDUSTRIAL ENGINEERING
Early stage of development
• The early stage prevailed before the industrial revolution. It is
divided into three parts:-

– Primitive / hunting/ gathering society stage

– Agrarian economy stage
– Handicrafts stage
 HISTORICAL DEVELOPMENT OF
INDUSTRIAL ENGINEERING
Industrial Revolution

• Industrial revolution began in the mid eighteenth century when

factories were first built and laborers were employed to work in them.

• Machine power began to substitute for human power.

• Lead to mass production of economical goods.

• Improved and less costly transportation system became available.

• Created larger market for goods larger organization developed to

serve larger market.

• Created the need formalized management practices.

MANAGEMENT SCIENCE
MANAGEMENT SCIENCE is an approach to management
that applies mathematical analysis to decision making. It
involved the use of highly sophisticated techniques,
statistical tools and complex models. The primary focus of
this approach is the mathematical model. Through this
device, managerial and other problems can be
expressed in basic relationships and where a given goal
is sought, the model can be expressed in terms which
optimize that goal
 Characteristic and tools of
management science
 Management science is a scientific approaches to problem
solving and decision making
 Management science encompass a logical approach to
problem solving
 Management science can be use in a variety of organization to
solve many different types of problems.
 Problem solving is defined as a process of identifying a
difference between the actual and desired state od affairs.
 Characteristic and tools of
management science
• The problem solving process include:
 Identify and define the problem
 Determine the set of alternative solution
 Determine the criterion used to evaluate the alternatives
 Evaluate alternatives
 Choose an alternatives
 Implement the selective alternative
 Evaluate the result
 SCIENTIFIC MANAGEMENT
APPROACH (1939-1950)
• Fredrick Taylor is a the pioneer of scientific management approach. His
principles of scientific management are:
 Developed a true science for each element of a worker’s job to
replace the old rule of thumb method.
 Division of labor should be a part of each job.
 Scientific selection, training and development of workers should be
done to improve the efficiency.
 There should be closed cooperation between management and
workers
 Workers should work for maximum output in place of restricted output.
SCHOOL MANAGEMENT OF THOUGHT
SCHOOL MANAGEMENT OF THOUGHT
 EVOLUTION OF INDUSTRIAL
MANAGEMENT
NEO CLASSICAL APPROACH

• HUMAN RELATIONS APPROACH

• SOCIAL SYSTEM APPROACH
• DECISION THEORY APPROACH

MODERN APPROACH
CLASSICAL APPROACH
• SYSTEM APPROACH
• SCIENTIFIC MANAGEMENT
• CONTINGENCY APPROACH
• ADMINISTRATIVE MANAGEMENT

MANAGEMENT
THOUGHTS
 EVOLUTION OF MANAGEMENT
DATE CONTRIBUTION CONTRIBUTOR
1776 Specialization of labor in manufacturing Adam Smith
1799 Interchangeable parts, cost accounting Eli Whitney et al.
1832 Division of labor by skill; assignment of jobs by Charles Babbage
skill, basics of time study
1900 Scientific management time study and work Frederick W.
study developed; planning and doing of work Taylor

1900 Motion of study of jobs Frank B. Gilbreth

1901 Scheduling techniques for employees, Henry L.Gantt
machines jobs in manufacturing
1931 Statistical inference applied to product W. A. Shewart
quality:quality control charts
 EVOLUTION OF MANAGEMENT (cont..)
DATE CONTRIBUTION CONTRIBUTOR
1947 Linear programming G. B Dantzig
1950 Mathematical programming, on linear and A. Charnes,
stochastic process. W. W. Cooper
1960 Organizational behavior; continued study of L. Cummings, L.
people at work Porter
1970 Integrating operations into overall strategy W. Skinner J.
and policy, computer applications to Orlicky and G.
manufacturing, scheduling and control, Wright
Material Requirement Planning (MRP)
1980 Quality and productivity applications from W. E. Deming and
Japan: robotics, CAD-CAM J. Juran
HENRI FAYOL (1841 – 1925)
 French industrialist and theorist
 Began his working life as young mining engineer at the age of
nineteen.
 Rising to managing director at the age of 47 and only retiring after
his 77.
 His entrepreneurial success won him considerable fame and
popularity
 In 1916 he published “Administration Industrielle Et Generale” that
brought to light the distillation of a lifetime’s experience of
managerial work
(HENRI FAYOL)

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 (HENRI FAYOL)
• 1. Division of Work
• Dividing the full work of the
organization among
individuals and creating
departments is called division
of work.
• Division of work leads to
specialization, and
specialization helps to
increases efficiency and
efficiency which results
improvements in productivity
and profitability of the
organization.

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 (HENRI FAYOL)
• 2. Balancing Authority and
Responsibility
• Authority must be equal to
Responsibility. According to
Henri Fayol, there should be a
balance between Authority
(Power) and Responsibility
(Duties). The right to give orders
should not be considered
without reference to
responsibility.
• If the authority is more than © LIYANA NORIZAN DIS
 (HENRI FAYOL)
• 3. Discipline
• Outward mark of respect in accordance
with formal or informal agreements
between a firm and its employees.
Discipline means a respect for the rules and
regulation of the organization. Discipline
may be Self-discipline, or it may be
Enforced discipline.
• No slacking or bending of rules, not allowed
in any organization. The works must respect
the rules that run the organization. To
establish discipline, good supervision and
impartial judgment is needed.
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 (HENRI FAYOL)
• 4. Unity of Command
• According to this principle, a
subordinate (employee) must have
and receive orders from only one
superior (boss or manager).
• To put it another way, a
subordinate must report to only one
superior. It helps in preventing dual
subordination. This decrease the
possibilities of “Dual subordination”
which creates problem is function
of managers. © LIYANA NORIZAN DIS
 (HENRI FAYOL)
• 5. Unity of Direction
• One head and one plan for a group of activities
with the same objective. All activities which have
the same objective must be directed by one
manager, and he must use one plan.
• This is called Unity of Direction. For example, all
marketing activities such as advertising, sales
promotion, pricing policy, etc., must be directed by
only one manager.
• He must use only one plan for all the marketing
activities. Unity of direction means activities aimed
at the same objective should be organized so that
there is one plan and one person in charge.

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 (HENRI FAYOL)
6. Subordination of Individual Interests
to the General Interest
• The interest of one individual or one group
should not prevail over the general good.
The individual interest should be given less
importance, while the general interest
should be given most importance.
• If not, the organization will collapse. Interest
of the organizational goal should not be
sabotaged by the interest of an individual
or on group.

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 (HENRI FAYOL)
7. Remuneration
• Remuneration is the price for services received.
Pay should be fair to both the employee and the
firm. If an organization wants efficient employees
and best performance, then it should have a
good remuneration policy.
• This policy should give maximum satisfaction to
both employer and employees. It should include
both financial and non-financial incentives.
Compensation should be based on systematic
attempt to reward good performance.

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 (HENRI FAYOL)
• 8. Centralization
• It is always present to a greater or lesser extent,
• depending on the size of the company and the
• quality of its managers. In centralization, the
• authority is concentrated only in few hands.

• However, in decentralization, the authority is

distributed to all the levels of management. No organization can be completely
centralized or decentralized.

• If there is complete centralization, then the subordinates will have no authority (power)
to carry out their responsibility (duties). Similarly, if there is complete decentralization,
then the superior will have no authority to control the organization.

• Therefore, there should be a balance between centralization and decentralization.

• The degree to which centralization or decentralization should be adopted depends on

the specific organization, but managers should retain final responsibility but should give
subordinate enough authority to do the tasks successfully.

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 (HENRI FAYOL)
• 9. Scalar Chain
• The chain of command, sometimes called the
scalar chain, is the formal line of authority,
communication, and responsibility within an
organization.
• The chain of command is usually depicted on an
organizational chart, which identifies the superior
and subordinate relationships in the organizational
structure.
• Or it is the line of authority from top to bottom of
the organization. This chain implements the unity-
of-command principle and allows the orderly flow
of information.
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 (HENRI FAYOL)
• 10. Order
• A place for everything and everything in its place’ the
right man in the right place. There should be an Order
for material/things and people in the organization.
• Order for things is called Material Order and order for
people is called Social Order. Material Order refers to
“a place for everything and everything in its place.”
• Social Order refers to the selection of the “right man
in the right place”. There must be orderly placement
of the resources such as Men and Women, Money,
Materials, etc. Human and material resources must
be in the right place at the right time. Misplacement
will lead to misuse and disorder.
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 (HENRI FAYOL)
• 11. Equity
• While dealing with the employees
a manager should use kindliness
and justice towards employees
equally. Equity is a combination of
kindness and justice.
• It creates loyalty and devotion in
the employees toward the
organization. The equity principle
suggests that the managers must
be kind as well as equally fair to
the subordinates.
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 (HENRI FAYOL)
• 12. Stability of Tenure of Personnel
• Although it could take a lot of time,
Employees need to be given fair enough
time to settle into their jobs. An
employee needs time to learn his job
and to become efficient.
• The employees should have job security
because instability leads to inefficiency.
Successful firms usually had a stable
group of employees.

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 (HENRI FAYOL)
• 13. Initiative
• Without limits of authority and discipline, all
levels of staff should be encouraged to show
initiative. Management should encourage
initiative.
• That is, they should encourage the employees
to make their own plans and to execute these
plans. This is because an initiative gives
satisfaction to the employees and brings
success to the organization. It allows the
subordinates to think out a plan and do what it
takes to make it happen.

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 (HENRI FAYOL)
• 14. Esprit De Corps
• Esprit de Corps means “Team Spirit”.
Therefore, the management should
create unity, co-operation and team-
spirit among the employees.
• They should avoid dividing and rule
policy. Harmony, cohesion among
personnel. It’s a great source of
strength in the organization. It is a
quality in every successful business.

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 Fayol’s Principle of Management
1 Division of work Reduces the span of attention or effort for one person or
group. Develop practice and familiarity
2 Authority The right give orders. Should not be considered without
reference to responsibility
3 Discipline Outward marks of respect in accordance with formal or
informal agreements between firm and its employees
4 Unity of command One man one superior

5 Unity of direction One head and one palm for a group activities with the
same objective
6 Subordination of The interest of one individual or one group should not
individual interest to prevail over the general good. This is difficult area of
general management
7 Remuneration Pay should be fair to both employee and the firm
8 Centralization Is always present to a greater or lesser extent, depending
on the size company and quality of its manager
 Fayol’s Principle of Management
(continue…..)
9 Scalar chain The line of authority from top to bottom of the organization

10 Order A place for everything and everything in its place, the right
man in the right place
11 Equity A combination of kindliness and justice towards employees

12 Stability of tenure of Employees need to be given time to settle into their jobs,
personnel even though this may be a lengthy period in the case of
managers
13 Initiative Within the limits of authority and discipline, all levels of staff
should be encouraged to show initiative
14 Esprit de corps Harmony is a great strength to an organization; team work
should be encouraged
 FAYOL’S SIX FUNCTIONS OF
MANAGEMENT
• Fayol’s six primary functions of management which go hand in hand
with the principles are as follows:

 Forecasting
 Planning
 Organizing
 Commanding
 Coordinating
 Controlling
 APPLICATION OF INDUSTRIAL
MANAGEMENT
Application of industrial management are summarized in the following of industry:
 Managing and arranging the location of facilities
 Design of plant layouts
 Management of material handling systems
 Supply chain management
 Production and Planning control
 Quality control and Total Quality Management
 Maintenance management
 Operation management
 Labor management
 BENEFIT OF EFFICIENT INDUSTRIAL
MANAGEMENT
• For consumer – from improved industrial productivity, increased use
value in the product. Product are available at the right place, at right
price, at the right time, in desired quantity and of desired quality
• For investors – increased security for investments, adequate market
returns, and creditability and good image in the society.
• For employee – gets adequate wages, job security, improved working
conditions and increased personal and job satisfaction
• For suppliers – will get confidence in management and their bills can
be realized without any delay
• For community – community enjoys benefits from economic and social
stability.
ORGANIZATION STRUCTURES
Organizations is the people who working together and
coordinating their actions to achieve specific goals.

Organizational structure is defined as the relatively

enduring allocation of work roles and administrative
mechanisms that creates a pattern of interrelated work
activities and allows the organization to conduct, co-
ordinate and control its work activities.
PRINCIPLE OF ORGANIZATION

1 Unity of objective 8 Absolute responsibility

2 Efficiency 9 Parity of authority and
responsibility
3 Span of control 10 Departmentation
4 Scalar principle 11 Balance
5 Delegation 12 Flexibility
6 Level of authority 13 Continuity
7 Unity of command 14 Leadership facilitation
TYPES OF ORGANIZATION STRUCTURE

 Line, military or scalar organization

 Functional organization
 Line and staff organization
 Project organization
 Matrix organization

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TYPES OF ORGANIZATION STRUCTURE
 Line, military or scalar organization

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TYPES OF ORGANIZATION STRUCTURE
 Line, military or scalar organization
TYPES OF ORGANIZATION STRUCTURE
Functional organization

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TYPES OF ORGANIZATION STRUCTURE
Functional organization

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TYPES OF ORGANIZATION STRUCTURE
Line and staff organization

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TYPES OF ORGANIZATION STRUCTURE
Line and staff organization

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TYPES OF ORGANIZATION STRUCTURE
Project organization

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TYPES OF ORGANIZATION STRUCTURE
Project organization

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TYPES OF ORGANIZATION STRUCTURE
Matrix organization

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TYPES OF ORGANIZATION STRUCTURE
Matrix organization

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POLICIES, GOALS AND OBJECTIVES
Policies are a mechanism for controlling the behaviour of an organisation by
governing the behaviour of people who work within that organisation.
Policies exist to ensure, in a given situation, that people will behave in a way
that is predictable, advisable and in the best interests of the organisation and
the person.
There should be a reason why a policy exists. A policy is not formulated unless
it is thought to be necessary or to have a benefit. In other words the policy
exists for a purpose and this may be often expressed in the form of an
"underpinning principle".
For example, the underpinning principle for a Quality Service Policy might be
to protect the brand of the organisation. Here are a few more examples.
Policy Example underpinning principle

Child Protection Policy Increase the acceptability of the sport (and

organisation) by the Community

Coach Education and Accreditation Policy Ensure standards of coaching meeting

expectations of members/customers

Club Development Policy Promote participation growth

Quality Customer Service Policy Protect the organisation's brand

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POLICIES, GOALS AND OBJECTIVES
• Goals are defined as the target or purpose that a
person imagines or plans to accomplish or to reach or
to achieve in future. They are the driving force that
directs a person to make efforts to achieve it.

• In our childhood, we decide, what we want to become

in the future and strives to achieve it. The goal is that
point which a person envisions himself, after a particular
span of time. To achieve these goals, people usually put
a timeline, so that they can reach their goal in the
desired time. However, they are long term.
POLICIES, GOALS AND OBJECTIVES
• The aim or target which you want to achieve within
a limited period is known as the objective. They are
the milestones that help you to reach your goal.
That is why they are also termed as subgoals. It is a
step to reach a particular point. Suppose I want to
score 90% marks in an exam to get admission in
a good university.
• Objectives are easily measured when the target is
achieved. For example, A company wants to
increase its sales by 50% in the upcoming six months
and then when it hits the target it can be measured
through the sales figure.
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AND OBJECTIVES
• Objectives are the desirable results or organizational or individual
activities. They are the purposes for which the organization exists. They
are the ends towards which organizations direct their energies and
concerns. They are the ‘reference points for the efforts of the
organization’. Without objectives there is likely to be (i) haphazard
activity, (ii) uneconomical commitment of funds (iii) poor utilization of
people, and (iv) mediocre operating results in the long run.

• A policy on the other hand, is a guide to the action or decisions of

people. It provides a ·standing answer to recurring questions. For
example, promotions based on merit (a policy of) helps managers to fill
up vacancies on the basis of talent and exceptional performance
under repeated situations. According to R.C. Davis, when policies are
properly established and applied uniformly throughout the organization
they (i) prevent deviations from planned courses of action, (ii) ensure
consistency of action, and (iii) facilitate co-ordination of action.
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DIFFERENCE BETWEEN POLICIES AND OBJECTIVES

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DIFFERENCE BETWEEN GOALS AND OBJECTIVES

• Goals are outcome statements that define what an

organization is trying to accomplish, both
programmatically and organizationally. Goals are
usually a collection of related programs, a
reflection of major actions of the organization, and
provide rallying points for managers.
• For example, Wal-Mart might state a financial goal
of growing its revenues 20% per year or have a goal
of growing the international parts of its empire. Try
to think of each goal as a large umbrella with
several spokes coming out from the center. The
umbrella itself is a goal.

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DIFFERENCE BETWEEN GOALS AND OBJECTIVES
• In contrast to goals, objectives are very precise, time-based,
measurable actions that support the completion of a goal.
Objectives typically must (1) be related directly to the goal;
(2) be clear, concise, and understandable; (3) be stated in
terms of results; (4) begin with an action verb; (5) specify a
date for accomplishment; and (6) be measurable. Apply our
umbrella analogy and think of each spoke as an objective.
• Going back to the Wal-Mart example, and in support of the
company’s 20% revenue growth goal, one objective might
be to “open 20 new stores in the next six months.”
• Without specific objectives, the general goal could not be
accomplished—just as an umbrella cannot be put up or
down without the spokes. Importantly, goals and objectives
become less useful when they are unrealistic or ignored.

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MANAGEMENT PROCESS
• There is enough disagreement among management
• writers on the classification of managerial functions.
 Newman and Summer recognize only four functions,
namely, organizing, planning,leading and controlling.
 Henri Fayol identifies five functions of management,
viz. planning, organizing, commanding, coordinating
and controlling.
 Luther Gulick states seven such functions under the catch word "POSDCORB' which
• stands for planning, organizing, staffing, directing, coordinating, reporting and
• budgeting.
 Warren Haynes and Joseph Massie classify management functions into decision-
making, organizing, staffing, planning, controlling, communicating and directing.
 Koontz and O'Donnell divide these functions into planning organizing, staffing,
directing and controlling

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MANAGEMENT PROCESS
• Henry Fayol was the first among those who describe management activity as a distinct process. Here
are various functions which consist the management process. They are planning, organizing,
actuating, and controlling.

• 1. Planning

• Management activity begins with planning. Planning is a broad outline of things to be done. What to
do? How to do? It is a predetermine course of action.

• 2. Organizing

• It is distributing or allocating the activities of business among different personnel. The manager has to
divide the work in activities and assign tasks to various groups of people. This task is called organizing.

• 3. Actuating

• The word ’actuating’ means moving the subordinates to action. It may be described as directing also.
The manger has to direct others that are the issue orders and instruction to the supervisors.

• 4. Controlling

• Controlling means to check the functioning of all the works. It is following up what is being done.
Controlling consist of basic steps viz. setting standards of performance. Comparing actual with these
standards and taking corrective steps whenever deviations are there.

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MANAGEMENT PROCESS

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MANAGEMENT PROCESS - PLANNING
• "A good plan that is not planned to be inferior to a well-planned evil plan"
Like the idiom, an event is impossible without the existence of a planning is packed
in a work program. Where to make a program work necessarily requires careful
consideration in terms of weaknesses, strengths, threat, purpose and benefits of the
event. For an event that will surely be a success with all the necessary
consideration planning.
Planning begins with the emergence of the idea or reason to hold an event. The
next step is to begin to create a draft concept plan events or activities.
Good planning is not done by many people, but only by those who are in a
position as a conceptor. The more heads that think, not necessarily a better value.
But sometimes even prolong the process concepting activity as more and more
parties are involved, the more difficult to unify the view. Should the conceptor is the
person who actually has the ability and understanding of the activities to be held.
In this stage, the resulting is an event concept, personnel needs and time schedule.
Thus, in the next stage, just divide the task of preparing appropriate committees
and their respective duties.

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MANAGEMENT PROCESS - ORGANIZING
• "If you failed to prepare, you prepare for failed"
If the planning steps have been completed, and the results are brought to the group of larger
ones. That started with the steps to form a committee (organizing committee). All activities are
certainly not out of either committee or subcommittee that requires a lot of human resources
committee, where a team can work together and have a clear goal to support these event. So
with the committee in a structured, systematic activity can run. The size of the people involved in
the committee, of course tailored to the needs. Besides the shortage of human resources can be
a problem, too much excess can also cause problems. Because many people are more difficult
to manage than the little guy. Problems can also arise from the cost side, which should be more
efficient if it is not too much involved.
At every position there is in the committee must have the duties, responsibilities, authority and
position description (Job Description) different. The higher a position usually higher duties,
responsibilities and authority. With the division of the work into the light. Here is one of the
principles of management. That is to divide the tasks according to their respective expertise.
The role of a leader in the committee is essential. A good leader, able to manage human
resources leads to prepare every detail planned. So the next stage smoothly.

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MANAGEMENT PROCESS - ACTUATING
• "Thousands of steps never achieved without the presence of one of the first small
step"

Implementation of an action is the culmination of the work of a

committee together, in the hope a team can help each other
committees and provide a solution to a problem that occurs
between one another committee. Thus, under any circumstances,
activities run smoothly and successfully.
For that it takes hard work, smart work and cooperation. All existing
human resources should be optimized to achieve the vision, mission
and programs of the organization's work. Implementation of the work
should be in line with the work plan has been prepared. Unless there
are specific things that need to be done adjusting. Every human must
work in accordance with the duties, functions and roles, skills and
competencies of each human to achieve the vision, mission and
organization of the work program that has been set.

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MANAGEMENT PROCESS - CONTROL
• "Tired of it for sure, but giving up is an option. Indeed, many people do not know
how close they were to success when they decided to give up "
Controlling for an activity is also one of the very important aspects of the time
these events took place. The control here is the task of a leader. Controls
performed in many respects the work and the team's emotional committees, the
conditions of activities, the convenience of participants, the time course of each
session of the order has been made, and so on. The purpose of the controls is that
activities can be run as the order and concepts that have been agreed in
advance, so that these activities produce maximum results.
And if there is not a problem due to unexpected obstacles, a leader must be able
to cope. At this stage need leaders who are able to take decisions accurately and
quickly. Task leader in this stage tend to be lighter than the executive committee
that a lot of work. But the greatest responsibility still rests with the leader.
Most important in the control is how early it can be seen that deviations occur.
Both in the planning, implementation and organization. So with it can immediately
be corrected, anticipation and adjustments in accordance with the circumstances
that occurred.

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THE END OF CHAPTER 1