Industrial Management

ITS Engineering College
BASIC CONCEPTS OF MANAGEMENT
1.1 Management - The Most Important Input

Management, always important in all ' spheres of economic
activity, has never been of such critical significance as today.
The shifts in environment and internal working conditions (in
general) in an enterprise in the seventies- all over the world but
particularly so in the developing countries like India,
Bangladesh, Pakistan, some of the African the Middle and the
Far Eastern countries, demand management, as the key input for
economic success. It is good to summarise here some of the
general and significant influences which have brought about
this change :-
1) Society, which was earlier individualistic, has now become

amorphous. Only groups and institutions can perform but they
are far from homogeneous or crystallized.
2) As earlier noted, there is a shift toward pluralism, of

multiple competing interests, concentrated round power and
service centers. This calls for a lot more adjustment,
balancing and coordination by each enterprise in the system.
3) The interface between all social and economic units,

'including the government machinery, is now wider, more
complex and gossameric. This has brought forth a new
demand on the managerial skill.
4) People have come closer to industries and institutions and

vice-verse. Whether as tax payers, consumers, beneficiaries or
employees, they cannot be taken for- granted. A new vigilance is
demanded of the present management to handle such a
situation.
5)The economy is much more planned and regulated today in a

macrosense. An enterprise management has a defined (and
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delimited) periphery within which to function. It sets a' severe

demand on the management's ingenuity and skill of adjustment.
6) The economic laws and regulations are many and ubiquitous.

They often shift and change. An enterprise needs a close
vigilance that the best and the safest course is adopted on these
regulatory fronts.
7) The, institutional inundation has called for enormous contacts

liaison and coordination. Meetings, conferences, consultations
and the role of influence have grown enormously over the
years.
8)Systems refuse to work on an even keel. A fish plate seems to
be torn the rails every kilometer or two. The management at the
wheels' must pass watchful nights with its search-light on.
9) The human element in management, at all levels of the team,

is’ more unpredictable than ever. Bending the concerted human
energies and motivation to the common enterprise goal needs
magical powers of administration.
10) The lines of discipline, well-recognized and respected two

decades ago, have now eroded end thinned to nothingness.
We seem to be at the crossroads where individual's right and
-demands of factions vie and compete, in devastating rivalries,
with .the common social interest. 'This influence is discernible’
where poverty and freedom .rub shoulders in the developing
world.. Constant management-action is needed to even out this
discordant note in the environment, both external and internal.
11)Social accountability of business has developed as a growing

consciousness. Government machineries have been set up to
enforce this accountability. This has caused, willy nilly, a
conflict situation. A greet deal of management judgment and
wisdom, is celled upon to resolve this conflict, consistent with
enterprise success.
12) Professional management in farming and the small sector of

the economy is either absent or in a rudimentary stage. A vast
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amount of managerial function is needed as essential input in

these two vital sectors.
13) In a developing economy the. basic goals are known but

largely. Unfulfilling. The critical constraints are two: -
(1) Management of the resources and
(2) Making full use of vast untapped opportunities. Both these
are important management areas. It is a truism that no country
is poor, no economy stagnant or industry tardy of growth
because of resources constraints. The reel limitation is
managenient with all its skills and obligation.
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• Characteristics and importance of Management
characteristics of Management :
Following are some of 'the characteristics of good

management:
1) To maintain discipline and to keep control over the employers
of various sections.
2) To distribute work and machines among the workers in such
a way as to secure maximum output.
3) To keep co-ordination among the staff at various levels.
4) To improve efficiency, management keeps sufficient watch
and strict inspection.
5) To suggest new ideas and improvements,
6) To arrange for the efficient storing and recording.
7. To make the arrangement of payments and their records etc.
8. To provide good training to Staff for attaining high skill in
. all fields.
9. To impart the instructions timely and to provide constant
guidance.
10. By adhering to high standards of performance it must be
able to provide more facilities and wages-to the workers' and
reduce the prices.
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• Importance of Management :-
A scientific management is most-essential as it fulfils the

following necessities
1. It maintains the discipline by keeping proper control over the
employees of various departments.
2. It distributes the work and machines among the workers in

such a way so as to secure maximum output.
3. It keeps to co-ordinetfon among the staff at various levels.
4. It improves the efficiencies, as it keeps sufficient watch .and

strict inspection.
5. It suggests new ideas and improvements.
6. It arranges for the efficient storing and recording.
7. It makes the arrangement for payment on scientific basis and

to keep their records properly.
8. It develop means of marketing and publicity.
9. It gives due importance, to labour grievances and study their

psychology for the purpose of maintaining the good human
relations and for achieving the goals.
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• Management Classification
Management is concerned with direction and control over the

various activities and work for the attainment of the objectives
laid by the administration. As per W.R. Spriegal management is
an executive function, which is mainly concerned with carrying
out the policies laid by the administration.
of the management some companies have grown, whereas
others have stagnated, or even been eliminated.
It is very difficult to write detailed description an the
development thought, since much work has gone unnoticed
and unrecorded. Whereas, writers on management have been
very few. Here only the most important pioneers in the
development of management thoughts are covered Field of
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Field of Functional Scientific Human
Management Approach Management Behaviour
Management
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Pioneers Robert Owen
Henry Fayol (1771-1855)
(1841 - 1924)
F. Y. Taylor
(1856- 1915)
Gilbreth G. Eiton Mayo

(1868- 1925)
Henry Gantt
Mery Parker
Follet
(1860 - 1933)
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There pioneers laid. the foundation of modern management.

Development of management science can . be studied in 3
categories
(1) Functional .Approach, which includes work of Fayol
(2) .Scientific Management approach, which includes the work
of "fayior, Silbreth and Gantt.
(3) C3) Human Relation approach, which includes the work of
Mayo,.Owen and Follet.
FUNCTIONAL APPROACH TO
MANAGEMENT
• Henry Fayol ( 1841 - 1925 ) :-
Henry Fayol, a trench industrialist, and Manager, was one

of The first writers who developed his theory of
management. He is regarded as the father of modern
management theory, because he was the first who
suggested the function of management. These
functions have been recognised as the main task of
manager in modern management theories. Management
Thoughts of Fayol can he classified into following 3
categories.
• Functions of Management: -
1) Forecasting ;- As soon as an idea conies in the mind for

manufacturing, an attempt is made to assess possible
quantities, price etc. Forecasting is concerned with the
estimation of quantities the sales forecast, cost, finance
problems; capital expenditure, profit' or loss etc. Then one
most profitable course is Selected out of several alternatives
available and planning is started.
2) Planning :- Planning means "thinking before doing". Before

actual work is started, it is decided that:, what is to be
produced, how much is -to be produced, how to be produced.
When to be produced and who are to produce it etc. The
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planning should aim at eliminating of wastage of material,

idleness of men, machinary and capital.
3) Organising: - When complete planning is done next step is to

arrange the material, money and men, for actual execution of
manufacture.
4) Directing: - It means the system of directing the plan into

operation. The person who directs must have dynamic
leadership and must guide the 'subordinates. The instructions
must be simple, clear, complete and reasonable and as far as
possible in writing.
5) Motivating : Suppose a person is a highly capable,

physically strong and technically well qualified, but if he is
not willing to workhard his output will be much less. So the
function of the motivating is to find out the motives of work
in a men and then he, should be encouraged to do work by
keeping his moral high.
6) Co-ordinating: - In an enterprise, there may be large number

of workers all engaged with the object of producing
particular product. This is the task of co-ordination to
integrate and harmonise them to achieve a common object.
7) Controlling: - This function of the management is to see
that other functions are being perfectly alright.
Controlling means to watch actual performance with the plan's
and to point out defective work, to rectify then and to
prevent recurrence. Some of the controls are - Quality
Control, Cost Control, Material Control and. Production
Control etc.
8) Communication: -This functions transmits-the information

and Instructions to all concerned parties i.e. to employees,
customers, suppliers, share holders and to general public.
Without this there are chances of mistrust, fears etc. and
therefore management must stress on better communication
system.
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Communication must include the acceptable of good

ideas coming from the persons who are direct in touch with
practical use. Therefore, for sound 'communication, joint
consultations and works committees must be formed for free
exchange of views'
9) Leadership -All the managers are supposed to have the

quality of leadership, as they are the leaders of concern.
10) Decision Making :- As managers are reguired to take

decisions very frequently, and the efficiency of the concern:
loss or profit etc. are effected by these decisions, great
amount of attention is required to be paid to this function.
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• Principles Of Organisation: -
Fayol, the founder of the movement for better organisation,

in 1916, gave the following principles of organisation :-
1) Division of work :- It promotes efficiency, because it

permits the work to be executed in limited space or area.
Division of work permits all the work to be performed more
effectively.
2) Authority gc/id Responsibility :- Authority and Responsibility

always go'together. Authority means "right to act, decide and
command". Hence whenever a task is assigned to a manager, he
must be given sufficient powers (i.e. authority) to exercise.
control to achieve the task.
Responsibility is the obligations of a subordinate for
the performance of any job allocated by the superior.
3) Discipline :- It. means obedience, • application, energy and

respect. There are many examples that poor performance is
'due to the task of these four' mentioned factors or say
discipline.
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4) Unity .of Command :- A subordinate should take orders from

only one. superior-. If not, then.according to Fayol authority
is undetermined, discipline is in jeopardy, orders disturbed
and stability threatend".
5) Unit of'Direction :-• According to Fayol, each management

objective should have only one plan.
6) Subordination of Individual Interest to General Interest :-

This means that the interest of the organisation is much
before the interests of individual.
7) Remuneration of Personnel :- Payment to workers should be

fair, and some proper method should be adopted.
8) Centrallisation :- According to this principle, there, should

be one central point in. the organisation which have power to
central overall work.
9) Equity :- Kindness and justice-on the part of'management of

create loyalty and devotion among- employees.
10) Stability :- Efficiency can be achieved by having stable

workforce .
11) Initiative. :- To have success, plans should be well made

before starting the actual work.
• Abilities Required from Managers :-
Concept developed by Fayol in General and Industrial

Management are Indentified Into following 6 activities.
Managers must have. ability to perform these activities well
to give good results.
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i) Managerial :- Managerial activity means to follow

management functions like, planning, organising,
commanding, coordinating controlling etc.
ii) Technical :- Technical know how production work.
iii) Commercial :- Buying,- selling 2nd exchange functions.
Iv) Financial :- Utilisation of capital in an oiptimum way.
v) Security :-Property and interests of'the organisation must

be secured.
vi) Accounting :- To keep accounts properly so as to determine

financial position of the organisation.
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SCIENTIFIC MANAGEMENT APPROACH
1) Frederick Winds low Taylor (1856 - 1915) :
F.W. Taylor is a most significant figure in the history of

management thoughts. He is ' known as founder of
"Scientific Management". He reformed the management
'through a thoughtful and systematic approach to its
problems. Taylor found that touch of waste (man, long
time, energy efficiency etc.) is due to the lack of order and
system in the management. He emphasized that usually
management was ignorant about the amount of work
performed by a .worker in-a day, and also about the best
way of doing the job, Hence if remained at the mercy of the
workers. Taylor, therefore, suggested that management
should adopt scientific methods for achieving higher
efficiency.
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• Some significant achievements of Taylor are listed below :
i) Work Study :- This is a work measurement and work

improvement technique. Taylor scientifically conducted
Time and Motion Studies, Method Study and Fatigue
Studies. Work study is used to determine the standard time,
that a qualified worker should take to perform the operation
when working at a normal pace work study also determine
the best method of performing each operation and to
eliminate wastage so that production increases with less
fatigue.
ii) Standardisation of tools and equipment or workmen’s and
working condition :- Taylor carried out Several experiments,
out of which following is the famous shovelling experiment
of Taylor.
In 1898, at the works of the Bethlehem steel
corporation, Taylor gave his attention to the "best size of
shovel for different types, of materials. After several
experiments he selected 21l/2 as being the optimum shovel
load end then he designed shovel of such a size sufficient to
hold this quantity of material. He designed small shovel for
heavier material and larger shovel for lighter materials so
that each man can lift 21 ½ 1b of material so as to achieve
output
iii) Incentive Scheme :- The Taylor Differential Piece Rate

scheme provides and incentive for a worker to achieve high
level of optimum output.
iv)- Principles of Management :— Tayior introduced the idea of

functional management. He recommended that greater
productivity and improved efficiency is possible through the
use of specialised knowledge and skill
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v) Application of Scientific Methods :- Taylor Introduced the •

scientific method in management of solve various problems. He
observed, recorded the facts, applied knowledge and avoid
mistakes and thus was able to solve best methods. Thus he was
able to apply this thought to improve the efficiency of
workers and increased productivity higher wages were also
possible for workers.
2. Frank B. 'Gilbreth" and Lilian M. Gilbreth :
Frank Bunker Gilbreth (1868 -1924) did work with his wife
Lilian regarding modern management. Frank B. Gilbreth
started his carrier from the apprenticeship as a bricklayer
and rose to the position of having his own contracting
business. His wife Lilian was a trained psychologist. She
helped Mr. Gilbreth in the matters related to the fatigue and
monotony.
Some of the important works of Gilbreth. are :
i)Development of Motion Study :- Gilbreth did. development of

motion study part of the work study. His thought was to find
"one best work of doing a work".
ii) Invention of new Techniques :- They invented several

techniques, out of which following are important.
a] Micromotion Study : Motions are taken on picture films, with

the help of picture camera, which helps in measing the time of
motion up to 0.0005 min. This procedure of motion
study is known as Micromotion Study.
b] Therbligs :- For the purpose of recording motions, he split up

different motions of a process into fundamental events made by
various member of human body and each event was allotted a
symbol and letter abbrevation. These, 17 therbligs are .
Search, Hold, Select, Crash, Release, Load, Transport
loaded. Transport empty. Position, -Preposition, Assemble,
Disassemble Uses, Inspect, Avoidable, unavoidable delay. Rest
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to overcome fatigue. Plan.
C] Chronocyds graph : This is an improvement over cycle-

graph. Cycle graph and cronocylegraphs both invented -by
Gilbreth are explained as under.
A small electric bulb is attached to the' finger, hand or
other part of the body of the operator and it is photographed
to record the path of motion. With a still camera, the path of
light so photographed is called cyclograph.
If an interrupter is placed in the electric circuit with
bulb and the-light is flashed quickly and of slowly, then the
path of bulbs shall appear as a. dotted line with pear shaped
dots indicating the direction of motions. The space between
the dots will be according to the speed of the. hand or finger.
The number-of dots will give the time taken by that motion such
a record is celled chrono-cyclegraph.
d] Study of Fatigue : Gilbreth suggested that fatigue can be

reduced by allowing rest periods, planning seating arrangements
and working conditions.
3. Henry Grantt :-
Gantt Made many improvements in production planning .and

control. He is mainly remembered for the production central
chart, known as Gentt chart or Bar chart. Gantt also suggested an
Incentive scheme.
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• Aims of 'Scientific Management .
Following are the specific alms of scientific management.
a) To find out the waste, and its causes.
b) To eliminate the waste after having ascertained the reasons for

it.
c) To unify the larger interests of labour management, and ownership
d) To lower- the cost of production.
e) To unite higher wages with reduced labour cost
f) To increase the purchasing power of the consumer.
g) To steady the level of employment of labour and capital,
• Advantages of Scientific Management -
Following are the main advantages of scientific management.
i) It provides trained minds for attaining a higher degree of

excellence in all branches of shop menagement.
ii) It improves and holds to standardize such things as equipment

tools, materials working conditions,’ and mathods of working.
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iii) It more or less completely revolutionizes and improves

layout, routing, scheduling, nomenclature, purchasing, store
keeping and accounting.
iv) A greater correlation between agencies of control makes for

accidents and neglect dependable operation which products
against delays mistakes,
v) Its promptness provides timely instruction, constant

guidance, immmediate goaIs, and prompt rewards.
vi) Its search for fact and principle tends to eliminate.

arbitrative rule.
vii) Its closely interlocking personnel of specialists lessens

the area of individual dictation.
viii) Immediate and full records provide publicity, and

constitute a sort of court of reason.
ix) In so far as exact knowledge displaces custom, guess

work and arbitrary ejection, it defends the worker against
soldiering and sloth (shirking work -or lazying away) or. over
speeding and fatigue.
x) The high task standards characteristic of it automatically

sorts workers to the levels of their best occupations, while
all are educated and energized.
xi) By adherence to high standards of performance throughout,

for management a nil men alike^ it becomes a possible agency
for raising wages, shortening hours, increasing profits, and
'lessening prices to consumers
• Scope of Application of Scientific Management
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The principles of scientific management apply, with. equal

force to both. the smaller and larger undertakings and
also to those concerns which are not primarily industrial
or commercial. But engineering enterprises 'offer a much
bigger scope for this application. According to Taylor,
scientific management can be applied with profit to the
management of our homes, the management of the
business of our tradesmen, large and small, of our
churches, our philanthropic institutions, .our universities '
and our governmental departments.
• 0pposition to Scientific Management -
In the beginning Taylor's scientific management -was .

considered as something very unique, but after some time
it was subjected to severe critrcism. The principal
objections against Taylorism may be summarised below .
i) People objected against the use of word 'scientific' before
management, what is actually meant by scientific
management is nothing but a scientific approach to
management.
ii) One of the foremost critictsim Of Taylorism was that the
principles of scientific management -as advocated by
Mr. F.W. Taylor were confined mostly to production
management. Certain very important aspects of
management (e.g.. financial administration, sales
administration, management accounting, were entirely
Ignored by him. Again Taylor was excessively
utilitarian and impersonal, paying human attention
towards the human element In production.
iii) Taylor was also criticised for designing too much

specialization of personnel into his system.
iv) Complaints were also voiced that the wages of labourers

were not increased in direct proportion to productivity
increases which resulted from improved methods and
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procedures. Trade unions mostly discarded the principles

of scientific management and regarded them as the
means to exploit labour.
v) The devices of work. analysis, time, motion and fatigue

studies standardisation of pay rates etc can not be
scientifically measured
vi) Controls pertaining to materials, 'machines and processes
may be understandable in theory but in practice it is difficult 'to
execute them.
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PLANNING: -
Planning is the most basic Of all management functions.

Planning means thinking before doing. In other, words, planning
Is the preparation for action. Every manager plans no matter at
what level he operates. It is a function to decide about what,
where, when, who, why and how a particular activity 'should be
done. It sets. the objectives of the business, determines the
different course of action to achieve these objectives, evaluates
each-course of action and decides about the best course of
action under the given conditions. It thus provides direction to
the-enterprise.
Planning defines the goals sets the policies, procedures,

programmers develops strategies so that the objectives of-the
enterprise can be attained most efficiently. It analyses all the
difficulties that are likely to occur in running the business and
decide in advance how these difficulties can be overcome.
Planning is a rational, economic, systematic way of making

decisions today which will affect the future. Planning helps to -
have a optimum utilisation of the available resources. Without
planning the activities of an -enterprise may become confused,
haphazard and ineffective For example, if a company making
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refrigerators does not plan in advance as to how many

refrigerators and of what capacity are to be made before
summer starts and if it does not procure necessary materials,
tools, supplies and personnel in time, it cannot approach the
production target and hence may not run profitability.
Planning includes forecasting, formulation of objective,

policies programmers, schedules, procedures and budgets.
General long range planning is undertaken by top management
personnel.
• Steps in Planning :-
The -details of planning may differ depending upon the specific

requirements of a particular business. However in all the types
of business planning process involves certain necessary steps,
summarised as follows;
1) Determination of Objectives :- Planning is not possible

without definite objectives. If the objectives of the business are
clearly defined then only it is possible to plan for future.
After determining the overall objectives of the business. It is
necessary to fix up departmental objectives, and then objectives
for sub-departments and sections. These objectives are in
harmoney with overall objectives of the business.
2) forecasting to assist Planning :- Planning foresees future. It

depends upon accurate business forecasting. Demand-for the
product to be manufactured can be planned from prior
knowledge and market research, prices can be forecast, wage
rates can be forecast. Qualitative and qualitative methods are
used to make these forecasts.
3) Collection, classification and Processing of Information :- All

relevant information pertaining to factors that affect planning
is collected. Information must be classified, analysed and
processed. It helps interpretation and the establishment of
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cause and effect relationship.
4) Deciding alternative courses of' action ;- The .objective can

be fulfilled by more than one course of action. For example., if
we went to increase the profit, we can increase the price, we
can increase the sales keeping the price constant .or we can
reduce the cost of production by adopting improved
techniques, reducing waste and by optimum utilisation of
resources. We can raise capital by selling shares or by
borrowing from financial Institutions. All such possibilities
must be explored during the planning of business.
5. Evaluation- of Alternative :- The advantages and

disadvantages of each alternative is then weighted against the
other alternatives. Cost benefit analysis is made to evaluate
each feasible alternative.
6.Selection of best Plan :- After the evaluation of different

alternative plans in terms of results; the-best, feasible and
economical plan is selected.
7. Subsidiary plans to aid Master Plan :- After deciding the main

plan subsidiary plans are constructed to successfully implement
the master plan. To implement the master plan each department
head prepares a plan of-his department.
8)Controlling Plans :- Plans and subsidiary plans are first tried

on a pilot basis to test 'the possibility of their success. The
plan is then implemented. It is constantly monitored and
results are obtained as feed beck' from time to time. The draw
backs or shortcomings are removed as early as possible. Future
plans are framed in the light of this experience.
• Advantages of Planning: -
1. Maximum utilisation of resources: -Through proper planning

it is possible to-have a maximum utilisation of resources.
.All efforts are directed towards the desired goals, and an
effective sequence of activities is accomplished. Activities
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can be co-ordinated so as to achieve the pre-determined

goals or targets.
2. Minimisation of Unproductive work :- As a result of planning

unproductive work is minimized. Since the planned activities
are subjected to a careful scrutiny and only necessary
activities are taken up to accomplish the specified work.
3. Basis for managerial action :- Planning compels, managers

to visualise the whole picture of business clearly and
completely. This enables the management to see important
relationships, gain full understanding of each activity, and plan
the managerial actions.
ORGANISINIG
When number of persons are working together tor the
achievement. of some common objectives .It is necessary to
intergrate, co-ordinate, control and, direct their efforts
effectively towards the common objectives. Organisation is a
mechanism or a structure through, which management
directs, co-ordinates and controlls the activities of ,the
business.
Industrialisation has created problems which are complex
in nature. A factory therefore has to be suitably organised in
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order that production should be smooth and efficient. For the

sale of. efficient organisation, factory is divided into different
departments. Each departments is entrusted with a particular
function for carrying a particular operation. Each departmental
head is expected to control and supervise the work in his
department . He has the authority over the workers in his
department and he is responsible for the smooth end efficient
working of his department. This is what is generally meant by
"organisation "
• The following are some general definitions of

Organisation
1. According to Louis Alien, Organisation is the process

of identifying and grouping the work to be performed,
defining and delegating responsibility and authority, and
establishing relationships for the purpose of enabling
people to work most effectively, together in
accomplishing objectives.
2. "Organisation is a mechanism or a structure through which

management directs, co-ordinates and controlls the business".
3. Organisation is the division of work to be done into defined

tasks and assignment of there tasks to individuals, qualified
by training and natural characteristics for the efficient
accomplishment.
4. Organisation is a plan by which group of people pools its

efforts towards designated objectives through- definition, and
division of activities, responsibilities and authority.
5. According to Barnard, "Organisation is a system of co-

operative activities of two or more persons.
The organisation function of the management basically deals
with the establishment of organisation structure. The
organization structure -is a skeleton or a frame work that
divides the total activities into related groups, develops
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superior and subordinate relationship among the persons by

prescribing the authorities.
• Steps in Organisation : -
1) Determination of activities : -
From the objectives, of the company the principle

activities are determined. The work load is broken down
into component activities that are to be performed by all
the employees. The activities are so split to determine
the job which can be performed by an individual.
2) Separation and grouping of activities :-
To attain the benefits of specialization and division of

Labour, every company will separate its activities on basis
of primary functions - finance, engineering, purchasing,
production, sale's, and industrial -relations. All the similar or
directly related activities are grouped together in the fore of
departments They can be further subdivided into sections For
Example, the manufacturing function and. the department
handling it may be subdivided according to the products,
processes, or type of equipment; and the, selling department
may be subdivided according the territory, type of product or
class of customers. The subdivision should be definite and
avoid overlapping.
3) Delegation of authority :-
Authority is necessary for the performance of the job and
therefore authority is delegated to the subordinates for
enabling them to carry out their work smoothly and
efficiently The right given to superior for directing and
guiding the action of his subordinate's to extract the work
from them (smoothly and efficiently without any friction) ' is
called "Authority".
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Authority in other words is the right to command and

Exercise one's absolute power which Compels others to behave
in a desired way. The authority always flows from superior to
subordinates For example the works manager, by virtue of his,
authority directs a foreman to arrange production of a job in
his shop and the foreman in turn exercises his authority over
his workers and directs them to produce the same.
4) Delegation of responsibility ;-
Responsibility must always be accompanied by the

authority. Responsibility may be described as the obligation
and accountability for the performance of delegated, duties. A
superior, .is always accoutable for the acts of his subordinates.
Therefore, responsibility always flows from subordinates to
superior. A worker has the responsibility to perform a task as
directed by foreman. The foreman, in turn is under obligation
to manage to do as directed by his superior (the production
superintendent). In any organisation, the superior is held
responsible for the actions, of-his subordinates and the
subordinates are accountable for the work to their superiors.
Effective management necessiates a clear flow of formal
Authority and responsibility.
5) Determination of Span of control:-
The number of persons who are directly responsible to the

executive is called the span of the control.
No single executive should have more people looking to
him for controlling and leadership than he can resonably
manage. The-number of persons, which can be effectively
supervised by a single executive or departmental head should
be limited to six in an average firm; however, when the activities
are routine or closely related, the executive can direct, and
supervise a large number.
• Necessity of Organisation :-
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The increasing size of the manufacturing plant,,

introduction of most complex methods of production, tough
competition between the enterprise and labour problems has
necessitated every factory to be well organised, in order to
produce required, quantity of the products of the required
quality, at the required time with minimum
production cost.
A well designed organisation structure 'with qualified
personnel in all key positions achieves effective execution,
co-ordination and control of all policies and functions of the
firm.
A good organisation is therefore essential for the

following Reasons.
1. Complexity of industry: -
Increasing size of industrial units and introduction of
modern machines, methods, and increasing labour problems
necessitates every factory to be well organised.
2.Growing competition: -
The tough competition existing in the market dictates the
industrial units to produce the required quality of the
product economically. This is possible only if the
industry has a sound organisation.
31
3. Optimum utilization of resources: -

It is possible to utilize the production skill of
men, material and machine to the utmost if the industry
is well organized. The wastage of time, material and
energy is checked and production cost is considerably
reduced.
4. Fixation of responsibility and authority: -

Organization fixed responsibilities on the
individuals and authorizes them to use their talents in
carrying out their duties. With the responsibilities
24
clearly defined the individuals strive hard to achieve

result. In case of failure or non-achievements of the
production goals it is possible to fix up the
responsibility and investigate the cause.
5. Reduced labour problems: -

A well organized industry is able to maintain
good employer employee relation which is essential to
avoid strikes and lockouts and increase productivity in
the long run.
________________________________________________
functional Organisation
:-
F.W.Taylor suggested functional organisation, because it

was difficult to find all-round persons qualified to work at
middlemanagement' levels in the line organisation.
Functional organisation divides managerial activities, so
that .each head from the works manager down has as few
functions to perform as possible and is able to become a
specialist in these Authority from top to down is. delegated
according to the function Taylor divided the responsibility of
shop supervision among severs foremen, each specially
qualified and. in charge of certain aspec of work. Each specialist
is authorised to given orders to workers, but only in regard.of
his field of specialization,
25
GENERAL MANAGER
Fig. Functional organisation
'Fig. illustrates a typical .organisation chart of functional

organisation. The general planning and. clerical duties are
assigned to four office specialists-route clerk, instruction
clerk time and cost clerk and shop disciplinarian. Four
shop supervisors (gang boss, speed boss, inspection boss
and repair boss) supervise and-help the workers, 'each
foreman assisting only in his particular function. The gang
26
foreman directs the setting up of tools into The machine

and the efficient movement from machine to machine
speed foremen instructs workers in proper use of cutting
tools and machine operations so that.they may reach
specified rate of output. The inspection foreman regulates
the quality of the work. The repair foremen supervises
machine unkeep and maintainance.
• Advantages
1. Separation of work :- In, functional organisation, mental work

has been separated from manual work. The specialists has been
given the authority and responsibility for supervision and
administration of function,
2. Specialization ;- Specialised and skilled supervisory attention

is given to the workers. 'The results Is increase in rate of '
production and improved quality.
3. Ease in Selection and. Training :- Functional organisation is

based upon expert knowledge. The availability of guidance
through experts makes possible the proper training of workers
in comparatively short span of time.
4. Scope for Growth and Development of Business :- This type

of organisation presents Sample scope for the growth and
development of business
• Disadvantages
1. Indiscipline ;- Since the workers receive instructions from

number of specialists (which may be conflicting) it.leads to
confusion to whom they should follow. Therefore, it is
difficult to maintain discipline.
2. Shifting of responsibility :- It is difficult for the top
27
management to locate responsibility for the unsatisfactory

work. Everybody tries to shift responsibilities on others for
the faults and failuers
3. kills the initiative of workers :- As the specialized

guidance Is available to the workers, the workers will not be
using their talents And skill, therefore their initiative can not
be utilized.
4. Overlapping of Authority :- The spheres of authority

tends to overlap and gives rise to friction between the
persons of equal rank.
5'. Lack of Co-ordination between functions,: - Except the

function in which he is specialized he is absolutely,
indifferent to other .functions. Therefore, there -is a lack
of co-ordination of functions and efforts.
• Line and Staff organisation
Line and staff organisation is that in which the line heads

are assisted by specialist staff, If the firm is of large size,
managers can not give careful attention to every aspect of
management. They are busy with ordinary task of
production and selling. Hence staff is deputed to
do the work of investigation, research, regarding and advising
to managers. Thus the staff brings specialization by assisting
the line officers. The line maintains discipline and stability, staff
provides experts information and helps to improve overall
efficiency. Thus the staff are thinkers while the line are doors.
Usually the staff has no administrative authority. They
serve only in advisory capacity in their field of
specialization,
28
Line heads Staff

Chairman -----------------------------Legal Advisor
General Manager ------------------Management Adviser
Works Manager --------------------personal consultant'
Production supdt------------------- Standards specialist
Foremen -----------------------------Tools Expert
Workers
Fig• Line and Staff organisation
Communicating
Communicating Is a process by which Instructions, ideas,
thoughts or informations are transmitted, received and
understood by the persons working in the organisation.
• Components of communication :
The basic components of communication are;

(Sender)
(Message) + Feedback = Communication
(Receiver)
The sender must appropriately prepare the message to be

transmitted to the receiver. The receiver must understand
the message clearly. Communication is never complete
until the sender knows that the message has been
received and understood either through feedback or
observation of the receivers behaviour.
• Methods of Communication :
1) Verbal/Oral communication.
2) Written communication.
3) Formal or Informal communication.
4) Downward, Upward or Horizontal communication.
29
1) Verbal Communication:- In the case of verbal

communication everything oral. The examples of verbal
communication are orders and face to face discussions,
telephonic talk, lectures, social gatherings, conference,
interviews, audio visual aids etc. Verbal communication is
quick, simple and comparatively more effective. It is the only
way out during periods of emergency, when every activity is to
be quickened.
2. Written Communication :- They are always in writing. Written
communication is the only way out when both the
communicator and the recipient are far off. It also provides a
permanent record
and whenever necessary it can be referred as evidence.
3. Formal and Informal Communication :- .Formal

communications are mostly in written. Formal communications
are generally associated with the particular position of the
communicator arid the recipient in that structure, e.g. when the
general manager instructs his subordinates by virtue of his
superior position, it is formal communication.
Informal communications on the other hand are free from
all sorts of formalities: Informal communications may be
conveyed by a simple glance, gesture, smile and or silence,
Example, conversation between and among workers about
feelings, facts, rumours etc.
4. Downward Communication :- It is the transmission 'of :

instructions and information from top executive to the lower
grade employee.
Horizontal Communication: It is the transmission of information

between persons having the same level of authority in the
organisation. For. example, production manager informing
maintenance manager regarding a breakdown of a machine.
Essentials of Communications : (Communication Principles) :
For effective communication the following points are
important -
1. It must 'be clear in purpose and Intention :- For good
30
communication the idea to be transmitted must be

absolutely clear in the mind of communicator. The academic
level of the workers, their power of grasping things, etc.
should also be taken into account, otherwise the
communication is likely to goin waste.
2. Participation :- Communicator should help the

communicatee (recipient) to listen, to participate and co-
operate.
3. Transmission :- In this connection the communicator- must

plan carefully what to'communicate and how to communicate.
4. .It must be simple, and language must be understandable and

specific.
5.Cordial Employer - Employee Relations :- Effective

communication requires a quality of leadership between people
immediately connected with each other. It requires sound
industrial relation, policies and practices, an all-round
atmosphere of friendly co-operation and a feeling of trust and
confidence throughout the organisation, right from the top
management to the workers.-
• Importance of Communication in Management:
"Communication is the flow of accurate information which

people want, need and are- entitled to have for successful
completion of the job". It is on established fact that one of
the foundation stones upon which organisation rests is a
system of communication. Co-ordination is achieved largely
through communications. The importance of effective
communication in management is described below.
1.Smooth and un-restricted Running of the Enterprise :-In the

manufacturing concerns instructions and information, is being
passed on continuously from one and to the other from a
superior to his -subordinates, from the managing director to his
executives. Therefore, the smooth and unrestricted running of
31
an enterprise depends on effective-system of communication.
2.Quick Decisions and Implementation :— Communication

helps the
administration in arriving at vital decisions . Without .
communication it may not be possible for the top administrators
to come in closer contact with each other and discuss the
important problems pertaining to the organisation. Through
communication., the management conveys targets, issues
instructions, allocates jobs and. responsibilities and looks
after the efficient performance of all activities.
3. Proper Planning and Co-ordination :- Good communications

are essential to co-ordination. They are necessarily upward,
downward and sideways though all the levels 'of authority and
advice for the transmission, interpretation and adoption of
policies for the sharing of knowledge and information and for
the more suitable needs of good morale and mutual
understanding.
4. Maximum productivity with Minimum Cost :- Through

communication the employees can be instructed, clearly what
exactly to do and the way in which it is to be done efficiently
and economically. The management can sell their ideas,
motivate the workers to work with a will and built up a high
moral in the company, this helps to increase the productivity.
5. Morale Building and Democratic Management :.- under

effective system of communication it is quite convenient for the
employees to express their difficulties, grievances if any, bring
all their problems to the notice of management. Therefore, it
helps to built up a moral and democratic management.
--------------------------------------------------------------------------------------------
32
MOTIVATION
• Definitlons of Motivation
Motivation means Inspiring people to Intensity their desire

and willingness to perform their duties effectively and to
co-operate for . the achievement of common objectives of the
business.
Motivation is the'mental preparation of an individual to do
a specific job. It. is a desire to' do something. According to
Michael J. Jucius, "Motivation is the act of stimulating some one
or oneself to get a desired course of action, -to push the right
button to get desired action".
'As put forth by "Brech" motivation is a general-inspiration
on process which puts the member of the tern to do their work '
effectively, to give their loyalty to the group, to carryout
properly-the tasks they have accepted and generally to pay an
effective part in the job that the group has undertaken.
As mentioned by Dalton Emcfarland. "The concept of
motivation is mainly psychological. It relates to those forces
operating within the individual employee or subordinate which
impels .him to act or not active in certain ways".
• Classification of Motivation
(i) Internal motivation,

(ii) External motivation.
1. Internal Motivation:- The inner urge of a man for achieving a

goal is called "Internal motive". There is no outside
compulsion for doing a work in such cases. Examples of
internal motivation are interests, emotional attachments,
burning desires, fighting spirit for some noble.cause. . For
example a patriot sacrifice his life for the sake of motherland, a
scientist may be totally absorbed in. his research work due to
his inner desire, mental satisfaction.
A person who works with internal motives is a self-
motivated person. He is mentally prepared to do a job and hence
internal motive is more effective. The management has to win
33
the workers heart and mind. It consists of increasing employees

morale and satisfaction.
2. External Motivation :- Some material benefit in the form of.

attractive salary, bonus, praise. Incentive, punishment, fear of
loss of job will motivate the workers 'to do their jobs more
effectively and efficiently.
• Functions of Motivation
Motivation performs the following three functions -
i) It originates action
ii) It directs activities in the direction of goal.
iii) It helps to continue the activities till the goal is achieved.
• Importance of Motivation
Motivation is needed to create interest, initiative,

enthusiasm, loyalty and willingness to work. As a result of
this, motivation helps to improve the productivity. The
importance of motivation could be seen under these
heads. ,
1. Arouse desire to Work :- Person may .be capable of doing a

work, efficient, possess the necessary skill etc. still he can
not do the work allotted to him in right time, in right quantity
under right quality unless he is motivated to do so.
Workers not properly motivated may not mentally accept
the orders or directions with the result the objectives of the
company may not be achieved efficiency and effectively.
34
2. Appropriate use of factors of production :- An organisation

may have best instruments, equipments, tool's, raw materials
in sufficient quantity. But these factors can only be. used-
appropriately (effectively) through sound motivation system.
• Essentials of Sound Motivation System:
1.Good wages: - It is a psychological fact that workers are

primarily concerned with their salary or wages. They need
money to fulfill their needs .It is necessary to assess the
wages from time to time and make appropriate changes.
2. Good Financial Incentive Scheme : - It includes the workers

to produce more and better.
3. Opportunities for achievements, growth and promotion.
4. Human Relations: - The management should maintain good

human relations and Offer due praise for good work.
5. Good working conditions: - Good working conditions

improves workers morale and create Interest in work.
6. Job satisfaction: - It includes the level of interest, the

challenge variety and the opportunities for carrying out the
work from beginning to end. The degree to which job uses
potential skill and abilities leads to higher degrees of job
satisfaction.
_______________________________________________________
35
SITE SELECTION AND PLANT

LAYOUT
(A) SITE SELECTION
• IMPORTANCE
Site selection is an important activity which decides the
Fete of the business. A good location may, reduce the cost
of production and distribution to 'a considerable extent.
The reduction of cost of production and distribution helps
in elevating either the competitive -strength or the profit
margin of the business. .
Locating a business involves a large, relatively
permanent investment. If the site selection is not proper,
all the money spent on factory building, machinery, and
their installation will go in waste and the owner has to
suffer a great loss. Therefore, site for the factory should be
selected very carefully. While selecting a site, it is
necessary to consider technical, commercial
and financial aspects and then select a- site that may
provide maximum advantage.
The need for selecting a suitable site or location to
house the factory may arise in the following situations.
1. While Starting a new factory.
2. During the expansion of the existing plant.
3. When the existing plant is to be relocated at some other place,

to remove the drawbacks of present location or to gain the
benefits of the still better location.
• THE PROBLEM OF LOCATION
The problem of site selection of a factory can he solved in
36
the following three stages.
1) Selection of the region.
2) Selection of the locality.
3) Selection of actual site.
1. Selection of the region :-

Generally, the geographical area is divided, on the basis
of natural regions or political boundries within the ^nation
(for example, Maharashtra State, Gujrath State, U.P. etc.).
The suitability of various regions are considered on.the
basis of comparative cost advantages available out of the
possible regions.
2. 'Selection of the Locality ;-

After selecting the region, the specific locality within
the region is considered. Generally, following
alternatives are open in selecting the locality.
a) Urban area. b) Rural area.

c) Suburban area in the vicinity of the urban area.
The comparative advantages of each locality are

considered at this Stage. The following factors must be
considered while selecting the location of the factory.
i) Availability of Raw materials.

ii) proximity to markets.
iii)Avaialability of labour.
iv) Transport facilities.
v) Availability of power and fuel.
vi) Climatic conditions.
vii) Availability of water
viii) Ancillary Industries.
ix) Financial and -other aids.
x) business and commercial facilities.
i) Availability of Raw Material ;-
37
(Nearness to supply of raw material)

As far as possible the site selected should be near the
source of raw materials, so that the cost of transportation
can be minimized and the storing cost -can be reduced due
to shorter lead time.
ii) Proximity to Markets :-

The cost of transporting finished goods, advertising
and distribution etc, will be greatly reduced, if the
factory is located near the market. Nearness to market
is important factor in the following cases.
a) Industries using light raw materials of high value.
b) Industries producing perishable, fragile or heavy products
c) For the industries providing technical advice and services
(such as tool and die companies) this will help in
ensuring prompt service, to If the product enjoys scattered
market then nearness of the market is not a deciding factor
in the selection of .site.
iii) Availability of Labour :-

Availability of right kind of labour force in required
numbers at reasonable rates\ is also a deciding factor
in selection of site. Unskilled labour is amply available
at major industrial centers and rural areas. However,
the firms requiring skilled labor should be situated near
the urban areas.
The glass and bangle industries in Ferozabad, woolen
carpets in Mirzapur, Silk sarees at Kanziwaram etc. are
mainly due to highly skilled labour for that particular
industry being available at that place.
iv) Transport Facilities : -

Transport facilities are needed for transporting raw
Materials parts and finished goods. Generally
industries have a tendency to locate the industrial
units near the railway station, highway or port areas.
Railways are cheaper but involve delays. Road
transport is quick, it is convenient for door to door
38
Service, but it is costlier. So a balance should be achieved

between the two according to the need of the unit.
Generally Long distances are converted by railway
transport and short -distances by road transport.
v) Availability of Power and Fuel : -

Coal electricity oil and natural gas are the important
sources of power in the industries The availability of
reliable and cheep power Supply is an important factor in
the location of electrochemical industries, iron and steel
industries, glass pulp and paper industries etc. for
example, Tate iron and steel industry in
established near the coal mines of Bihar.
However, because of the development of long
Distance transmission of electric power this factor has not
remained a deciding factor for plant location.
vi) Climatic conditions

Climatic conditions largely affect certain production
processes anei also the efficiency of the employees.
For example, textile mills requires moist climate, that
is why most of the textile mills are situated at
Bombay and Ahmedabad. For agro-base industries
like tea end coffee or rubber plantations, climatic
conditions play a decisive role
in the selection of site.
However, with the development of air-
conditioning techniques, it is possible to control the
temperature as- well as humidity in the factory according
to the requirements, though at the additional costs.
vii) Availability of water :-

Water is used in industries for processing as in paper
in chemical industries for generation of power in
hydroelectric power plants and is also required for
drinking, sanitary purposes etc. Depending upon the
nature of plant
water should be available in adequate quantity and
should be of proper quality (clean, and pure).
39
viii) Ancillary Industries :-

The existence of ancillary industries in the nearby
area may avail certain economic advantages. Many
Industries such as processing and assembly
industries are not producing all the parts of their
product but purchase some of the parts
from ancillary Industries producing it. The products
produced by ancillary industries then forms a raw
material .for such industries.
ix) Financial and other Aids

For the development of backward regions central as
well as State Government provide certain incentives
and facilities such as cash-subsidy, concessional
financial assistance, land, power'and other facilities
at cheaper rates, tax concessions etc.
x) Business and commercial Facilities : -

For day-to-day management of finance, and working
capital needs, banking services are considered
highly desirable. Facilities depositing surplus
cash, discounting of bills, sending sioutstatlon
cheques for collection and withdrawals, for meeting
the cash shortages nearness to banking facilities is
essential.
3. Selection of Actual site :
The. important factors in this respect are
i) Availability of cheap land to build and expand the
plant.
li) Cost of land, development : The land should be flat
and strong enough to sustain heavy machine-
installation. For agro base industries the type of soil
should also be considered.
iii) Repair facilities : Facilities for upkeep and general
maintenance should be available .in nearby area.
iv) Facilities for housing the workers and if
necessary their transport from the place of
residence to the work site.
v) Social anh recreational facilities.
vi) Post and telegraph facilit,ies.
40
vii) Cost of laying the water supply and providing sewage

and disposal of waste.
viii) Cheap facilities for disposing of trade waste.
ix) Any restrictions imposed by the town planning
department local byelaws.
x) Taxes, fire protection facilities etc.
COMPARISON.BETWEEN URBENAND
RURAL AREAS IN CONNECTION WITH
THE SELECTION OF SITE
URBAN RURAL
1) Availability of local market Due to large, population the
local demand, for the product is fairly -high.
l)The market place is far away from the industries
therefore cost of distribution of finished products is more
2) Ample availability of diversified labour.

2)It is rather difficult, to get skilled labour in rural areas.
3) Good transport facilities are available.

3) Adequate transport facilities are not available.
4) Proximity to allied industries and services units

4) Absence of allied industries.
41
5) Availability of educational recreational and social

5) There are fewer educational, social and recreational
facilities. Facilities.
6) The costs of land is high. Even at high cost sufficient land is

not available which puts constraints on the arrangement of plant
and machines
*6) Sufficient land is. available At cheaper rates.
7) There, are greater restriction on the constructions of factory

buildings
7) There are only few restrictions on construction
of factory buildings.
8)Certain specific municiple facilities & public utility services

such as water supply drainage, fire fighting, police protection
etc.are available.
8) Municiple facilities A public utility services are not available.
9) Good anti prompt postal and communication services are

available,
9) Prompt postal and communication services are not available.
Site Selection 8 Plant Layout

10 The rake of taxes are relatively high.
11. Due to high standard of living the cost of labour is relatively
high.
12. Banking facilities, credit facilities & insurance facilities are
available.
13. High labour turnover because of large number of
industries.
14. The trade union movement is very strong which often results
in strikes, lockouts etc.
15. Development of the training facilities for workers and
management institutes for executives put the city area
in to privilized position, The rate of taxes are quite
low. Labour is available at cheapi rates. Absence of banking
facilitie. credit facilities & insuranc facilities. Labour force is
more stable. Trade union movement is not very strong
42
Absence of training facilitii and management institutes.

16. Sufficient passanger transport facilities by toad . & railways
are available to employees. The passenger facilities are if the
factory is large distance residential areas difficult for the
reach at the work transport inadequate located at
17.from there, it become. workers to place.
20. Sufficient storage facilities including warehouses are
concentration of many industries in urban areas creates
problems of air pollution, water pollution, sanitation
etc. Danger of bombardment in war
time : industrial city areas become the target of air
attacks in war time. To avoid, concentration_of
industries. Government imposes restrictions for starting new
industries in urban areas.
21.Storing•& warehouse facility are not available. problems of
air pollution water pollution etc. are les, and the rural
environment is conductive to .-good health of workers .
Less danger of bombardment I war time.. .
Government provides financia. assistance and land at cheap(
rates to attract if entrepreneurs to stai industries in rural
areas.
____________________________________
• Main Objects of Scientific Layout These are –
i) To produce better quality of product.
ii) Maximum utilisation of floor area.
iii) To reduce internal transport from one operation to the ne

as much as possible.
iv) Lighting and ventilating of areas.
v) Lower cost of scrap and waste.
43
vi) -Fewer accidents.
yii) Minimising production delays.

viii) Space for future expansion.
ix) Safety of equipment and personnel.
x) Better working conditions for both executive and operatic

employees.
xi) Avoidance of unnecessary change.
xii) Saving of cost.
xiii) Easy supervision.
xiv) Neatness.
xv) Proper production control. .
xvi) To eliminate waste effort for speeding of production.

Principles of Plant Layout According to Muther, there are
six basic principles of layout". These are :
1: Principle of over-all integration :- According to

principle, the; best layout is .one which integrates the me
materials, machinery; supporting activities and any other s
factors that results in the best compromise.
2. Principle of minimum distance :- According to this
principle other things being 'equal, the-best layout is one
in which I and materials have to move the minimum
required distance between operations.
3. Principle of Flow :- Muther said that, other things being

equal, the best layout is one which arranges the work areas
for each operation or Process In the same order or sequence
that forms, treats or assembles the materials.
44
4. Principle of Cubic Space :- According to this, the best

layout is one in which all the available space both vertical
and horizontal is most economically and effectively used.
5. Principle of Satisfaction and Safety:- According to this,

other things being equal, the best layout is one which makes
work satisfying, pleasant and safer for workers.
6. Principle of Flexibility :- It means, the best layout is one

which can be adopted and re-arranged at a minimum cost
with least
inconvenience.
• Symptoms of a. Bad Layout
A poor or badly planned layout will generally show the

following symptoms
1. Congestion of machines, materials, parts assemblies and

even workers.
2. Excessive amount of -work in process.
3. Poor utilization of available space.
4. Long material flow lines.
5. some machines heavily loaded and some remain idle for long
periods.
6. Excessive handling by skilled workers.
7. Long production cycles.
8. Delays in delivery.
9. Excessive mental or physical strain on workers.
45
10. Difficult to supervise and control properly.
• Factors Influencing Layout These are
1. Type of Industry :- Industries are. generally

classified according to their process of manufacture.
The process of manufacture can be classified into four
categories.
a) Synthetic Process - When two or more materials are mixed.

get a product, the process is known as synthetic process.
The example of such a process is to produce the cement by
mixing lime-stone and clay.
b) Analytical Process - This is opposite of synthetic proce

It is the breaking up of a material into several parts.
refining of petroleum is the example of this case.
c) Conditioning Process- - In the conditioning process, the f,

of raw material is changed into desired product as in juti
industry.
d) Extractive Process - In this type, by applying heat, des.

product is extracted from the original raw material, e.g.,
manufacture of Aluminium from Bauxite.
2. Type of products :- Type of product means whether the prodi

is heavy or light, large or small liquid or solid. It is- a.
consideration in plan layout.
3. volume of Production According to this point, while plan

layout is being done it Should be kept in mind that, what
volume is required to be produced. In this case, it should be
seen that whether (a) Job Production, (b) Batch Production 01
(c) Mass Production is being adopted.
46
4. Influence of Processes :- Last, but not the least factor t

consider, is the process through which the material passes in.
the concern. Much care. should be given to the material
handling problem, position of store room and tool room.
Keeping, in view the type of industry and volume of
production, there can be following methods of layout.
• Methods of Layout
(a) Line or Product Layout.
(b) Functional or Process Layout.
(c) Fixed.Position layout.
(d) Combination.
Suitability :- This is suitable for continuous process indus\

such as car or automobile manufacturing or chemical
Industrie:
• Advantages: -
1. It lowers the overall manufacturing time as product under .

proceeds rapidly from operation to operation without
handling.
2. Less space is needed for placing machines.
3. There is minimum of handling and transportation. •
4. There is less work-in-process.
5. Better utilisation of machine and labour.
47
6. It minimises couting, inspecting and clerical work etc.
7. There are smooth flow of materials.

8. Promises for supply of products to customers, are more relic
9. Use of gravity and power conveyors for material- handling re

the necessity of aisles.
10. Production control is simplified greatly.
• Disadvantages: -
1. When the model or type changes, the layout of machinery

also requires a change.
2. All machines in the arrangement cannot be used to their max

capacity.
3. The manufacturing cost rises with a fall in the volume o

production.
4. If one or more lines, are running light, -there is great mach

idleness..
5. Specialised and strict 'supervision is needed.
6. If any of .the .machines in the shop . breaks down the

machines have to remain idle till 'that machine becomes
again ready to commence operation.
7. For expansion purpose, it is not possible to add more

machines.
8. Each worker performs job on a particular machine, so he' is n

skilled for other machines or operations.
(b) Functional or Process layout :- under this arrangement each
48
department or section is responsible for carrying out a

particular process and not a particular product as. underline
type layout. There is an assembling of similar operations in
each department or section. In a job order production factory,
there are no standard products or if any, they repeat orders.
Therefore, machines in this type of layout are generally
arranged on functional basis.
This type is also called analytical layout
Thus for example, in a factory manufacturing taps, drills,
reamers and cutters mentioned above there may be four
departments, the lathe, the milling, the heat treatment and the
grinding, each responsible for a specific 'operation. . All the
products manufactured in this factory have to pass through
these four principle operations, fig.shows this arrangement.
LATHE DEPARTMENT'
Fig. Process Layout
_______________________________________________________
49
Suitability :- In this, similar equipment and similar machines

grouped, together. This is very useful where low volume
production is required.
• Advantages: -
1. Similar jobs are manufactured on similar machines, hence

supervision is simple.
2. Less machines are required.
3. This offers great incentive for each worker to raise the 'Ievel
of performance.
4. There will' .be better control on precision or complicate

process.
5. The layout is flexible hence it can easily be managed to
change in the rate of production, in the design of products in the
methods of production or in the row materials used.
6. Any breakdown-of one machine does not effect production as

can be done on a stand by machine.
7. Capital layout for machines is minimum.
8. New workers have better training facilities on the, job. Worker

know, how to run various machines in the group and also to
up work.
9. Foremen become specialised in the performance of the job

and know all about the equipments and their operations.
• Disadvantages
1. Handling and back-tracking of materials is too much.
2. It makes necessary to plan and supervise the work of each
50
department each worker and machine. This makes

production control more difficult and more costly.
3. Generally more floor area is required.
4. Specialization creates monotony and there will be difficult

and the workers to-find jobs in other industries.
5. Total production cycle time is more due to long distances

and waiting.
Layout of a Small Repair Shop

INDEX
S1,S2 = SmaII Stores
WH = Water Hut
A = Assembly Bench
BD = Bench Drilling
RD - Radial Drilling
MO = Moulding Shop
PM - pattern Waking Shop
W - Welding Shop
ST - Slotter
M = Milling Machine
E = Space for expansion
F= foreman Office
G= Grinder
DA= Disassembly Bench
S= Shaper
M= Melting Shop
SM= Smithy Shop
C=Carpentry Shop
P= Planer
B= Boring Machine
L = lathe
51
The shops like smithly, welding, melting etc. should ha

located outside as shown in the layout to reduce the chance of
fire accidents end to prevent from smoky'ness. Some space for
future, expansion must be kept aside. There should sufficient
space left for bringing Inside large, sized parts and machinery.
Therefore, from both fAe sides of the entrance space is left for
handling end movements. If necessary overhead cranes may
also be
fitted.
IT the repair shop is at a far distance from the main
building Men provision of canteen may also be made, where
workers can take food during lunch hours end relax.
The figure given shows the "simple layout of small repair

shop", although the layout differs from factory to factory,
as . depends upon the type, size, volume of product and
manufacturing process but the figure gives the .general
idea. In repair shop, machines are lard according to their
functions. Here varieties o. job are performed by different
workers every day. Layout of Services
The tool rooms, store rooms, water, power, transportation.
cafeteria, wash rooms and lavatories, etc. include the
service .centers of a plant. The shorter the. distance from
the operation to these centers, the less time will be
consumed by worker's in
using, these services. Generally the service •tenters are located
where the space is available after planning for manufacturing.
exact location is determined by its*nature, number of persons
to avail such a service and how much any service is made use
of.
The factors affecting the layout of, most important servio
centers such as store room, transportation. Water, power
and fir'
protection are as under :
1- Store Room :- Store .room layout as far as possible shi
satisfy the following essential requirements :
i). It should provide an easy receipt, storage, issue and
section of materials etO.
ii) It should have enough storage capacity and facilities..
52
Hi) It should have proper protection against wastage,

damage
deterioration and thefts.
iv) It should permit easy and clear identification and local.
.'of materials.
v), It should be. simple and serviceable.
vi) It should have bins of proper width for handling the
materials.
2. Transportation :- Transportation required in the factory prei
is for different'purposes, such as transportation of materia.
and equipment, transportation of labourers and other employee,
'140
and transportation of products; proper consideration. Is
essential so
that the layout Is economical and convenient. For more details
chapter on materials handling may be consulted.
3. Water .-- The layout of the water service is very necessary'
consideration. For this purpose, certain provisions are given
in the "FACTORY ACT"), those must strictly be followed.
According to Factory Act, in every factory in which more than
250 'workers are employed, water coolers should be installed
at.
suitable places. The water centers should be marked by the
work
"DRINKING WATW. Water centers should be located at least 20
ft. from latrines, urinals and wash rooms There should be one ,
water center for every 150 workers up to 500 workers and one
center- for every additional 500 workers.
4. Power :- The electrical energy required for running the plants
may be purchased from an outside source or generated
itself. .
The electric energy is transformed into mechanical power
and is
Supplied to the machines and equipment in the 'following
two
ways
(a) Group. Drive (b) Individual Drive
Today individual drive is generally adopted. So in the
layout, it is to be seen that from where electrical cables will
53
pass and where protecting devices, switches, starters and

control panels are to be fixed.
.5.. Fire protection :- For this, suitable places must be alloted in
•the shop for locating water buckets and buckets and sand fire
extinguisher. Inflammable material must be kept in separate
store at a safe distance, minimum 50. ft. from the general
storage.
•In the layout provisions to escape, in case of fire must
be kept. A factory employing more than 20 persons and
storing
in flammable materials and explosives must arrange, for
training
of-spersons in the routine to be 'adopted in- case of fire.
Acts
Solution ;
(a) As the percentage of loss of earning capacity by loss of 01
hand = 60% . (from Schedule'I)
Amount of compensation payable to the worker, who is
getting Rs.120 as monthly wages, in. case .of permanent
total
displacement.
= Rs. 18, 900' •• (from Schedule IV)
Therefore amount of compensation payable for 60% loss
•earnings capacity = 60/100 x 18,900 » 1.1,340.
Therefore Rs.11,340 would be paid as compensation.
(b) If the worker also lost his index finger then percentage los
of earning capacity will be 60% for loss of one hand and 14%
for loss of index finger:,
Therefore total loss of earning capacity = 74%.
and thus amount of 'compensation = 74/100 x 1-8,900 c
Rs.1.3,98
Therefore Rs.13,986 would be paid as compensation to tl
worker in this case.
6.6 The Payments of Wages Act, 1936
The Act regulates the payment of wages to .certain

classes
54
persons employed in Industry. Under the Act, the State

Governme
can extend the provisions of this act to the payment of wages
fcc
any class of persons in any industrial establishment.
Definition -.
(1) "Industrial Establishment" means any
a) Tramway service or motor transport service.
b) Air transport service.
c) Dock; wharf or jetty.
d) Mine, quarry or oil field.
e) Plantation.
f) Workshop, where articles are produced with a view to
use, transport of sale.
Industrial Management & Science

g) Establishment, where construction, development or,
maintenance
of buildings, roads, bridges or canals or of water or where
work relating to the generation, transmission and distribution
.of electricity is being carried out.
(2) "Wages means all remuneration expressed in terms of money
payable to persons, while in employment and includes : .
i) Basic wages.
if) Dearness Allowance.
Hi) Bonus.
iv) Payments under any award or order of a court.
v) Overtime allowance.
vi) Leave salary.
If will not include :
i) The value of any house accommodation, supply of light,
water,
medical facilities and other amenities of life specified by
the State Government.
ii) Travelling Allowances.
Hi) Employer's contribution to pension or Provident
Fund,
iv) Gratuity etc.
METHODS OF PAYMENT OF WAGES
55
1. Responsibility for Payment of Wages : Every employer

shall be
responsible for.the payment Co persons employed by him, of
all
wages required to, be paid under this Act.
Provided that, in the case.of persons employed
otherwise
than by the contractor.
a) in factories, if a person has been named as manager of the
factory
b) in industrial establishments, if there is a person responsible
to the employer .for the supervision and control of the
industrial establishment ;
c) upon railways, railway administration has nominate a person
in this behalf for the local area concerned.
Industrial Management & Science

g) Establishment, where construction, development or,
maintenance
of buildings, roads, bridges or canals or of water or where
work relating to the generation, transmission and distribution
.of electricity is being carried out.
(2) "Wages means all remuneration expressed in terms of money
payable to persons, while in employment and includes : .
i) Basic wages.
if) Dearness Allowance.
Hi) Bonus.
iv) Payments under any award or order of a court.
v) Overtime allowance.
vi) Leave salary.
If will not include :
i) The value of any house accommodation, supply of light,
water,
medical facilities and other amenities of life specified by
the State Government.
ii) Travelling Allowances.
Hi) Employer's contribution to pension or Provident
Fund,
iv) Gratuity etc. METHODS OF PAYMENT OF WAGES
56
1. Responsibility for Payment of Wages : Every employer

shall be
responsible for.the payment Co persons employed by him, of
all
wages required to, be paid under this Act.
Provided that, in the case.of persons employed
otherwise
than by the contractor.
a) in factories, if a person has been named as manager of the
factor
b) in industrial establishments, if there is a person responsible
to the employer .for the supervision and control of the
industrial establishment ;
c) upon railways, railway administration has nominate a person
in this behalf for the local area concerned.
Acts
The person so named., the person, so responsible to
the
employer, shall also be responsible for such payment.
2.' Fixation of Wage Period : Wage period shell be fixed
by the
person responsible for the payment of wages (as
shown above) but
y •lB this wage period. Will not be more then one
month:
3. Time of Payment of Wages :.
a) Any railway, factory or industrial establishment
employing
less than 1000 persons must make payment of
wages, before the
expiry of the 7th day after the last day of the wage
period.
b) If there are 1000 or more persons employed, then
wages must
paid before the expiry or the 10th day after the last day
o
the wage period.• '
57
c) Where the employment of any person 'is terminated

the wages
earned by him .shall be paid before the expiry of the
second
working day from the day on which his employment is'
terminated.
d) Wages must be paid in current coin and currency
notes and ho
in kind.
4. Maintenance of Register and Record :
a) Every employer shall maintain such registers and
records
giving such particular of persons employed, work
performed,
the wages paid, the deductions made, the receipts
given by
them'and such other particulars and in such forms
may be
prescribed. '-'
b) Every register, and record required to be preserved
for'
period o'f 3 years after the date of the entry made
therein.
DEDUCTIONS
Every payment'made by the employed person to the
employer or
his agent shell be deemed' to be a deduction from
wages.
2. - Any loss of wages resulting from the imposition,
for good ani
sufficient cause, upon a person employed, of the
following
penalties, shall not be deemed to be deduction -from
wages :
186
(a) withholding of increment or promotion (including stop

page of
increment at an efficiency bar). .
58
(b) Reduction to a lower post or to a lower stage.

_ (c) Suspension. '
3. The wages of an employed person shall, be paid to him
without
deductions of any kind except those authorised by this Act.
Following deductions from the wages are permitted by this
Act.
i) Fines. . • •
ii) Deductions for absence from duty.
Hi)' Deductions for damage to or loss of goods expressly
entrusted
to the employed persons, where such damage or loss is
directly attributed to his neglect or default.
iv) Deductions for the house accommodation Supplied to
him,
v) Deductions for which amenities and services not includes
the
Supply of tools and raw material, required for the, purpose
of
employment supplied by the employer.
vi) Deductions for'recovery of advances of loans (including
over
payments).
vii) Deductions of income tax contribution.of provident
funds,
payments to co-operative-societies.
FINES '
i) No fine shall he imposed on any employed persons on any
of the
acts and omissions which are liable to fine are got approved
previously from the State Government or from the prescribed
authority .
2) A notice specifying Such acts end omissions shall be
exhibited
in the prescribed manner in the premis-es on which the
employment is carried on.,
3) No fine shall be imposed until he has been given an
opportunity of showing cause against the fine.
„ 4) The total amount of fine which may be imposed in any one
wage
59
period shall not exceed an amount equal to thirty second part

of the wages payable to him. ,
Acts
5) No fine shall be imposed on any employed person who is
und&
the age of fifteen years.
b) Every fine shall be deemed to have been imposed on the day
the act or omission, and no fine shall be recovered by
installments or after the expiry of the sixty days from tl".
on which it was imposed.
7) The . recovery of all -fines must be- entered in a prescrit
register to. the credit of Fines Fund. The money of the fin
fund can be used only for the benefits of the workers subje
to the approval of the prescribed authority,
VIOLATION OF THE ACT

1) The administration of this act is the responsibility of the
State Government and is exercised by factory Inspectors.
2) .State Government may appoint a presiding officer of any Labi
Court or Industrial Tribunal, constituted under the industr-
Disputes Act, 1947 or any commissioner tor workmen 's
compensation, or other officer to hear and decide for any
specified area all claim arising but of deductions from the
wages, or delay in the payment.of wages.
3) Authority hears both the parties on receipt of the applicati
and after inquiry may direct to refund to the employed perse
of the amount deduced, or payment of the deleted wages,
together with the payment of such compensation as the
authority may thing fit, not exceeding ten times the amount
deducted in the former case end not exceeding 25 rupees in t
. letter.
4) If the authority hearing an application is satisfied that th
application was either malicious or vexatious, the authority
may direct that a penalty not exceeding, Rs. 50 be paid to t
employer or other person responsible for the payment of wage
by the person presenting the application.
60

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ITS Engineering College

BASIC CONCEPTS OF MANAGEMENT

1.1 Management - The Most Important Input

1) Society, which was earlier individualistic, has now become

2) As earlier noted, there is a shift toward pluralism, of

3) The interface between all social and economic units,

4) People have come closer to industries and institutions and

5)The economy is much more planned and regulated today in a

delimited) periphery within which to function. It sets a' severe

6) The economic laws and regulations are many and ubiquitous.

7) The, institutional inundation has called for enormous contacts

9) The human element in management, at all levels of the team,

10) The lines of discipline, well-recognized and respected two

11)Social accountability of business has developed as a growing

12) Professional management in farming and the small sector of

amount of managerial function is needed as essential input in

13) In a developing economy the. basic goals are known but

• Characteristics and importance of Management

Following are some of 'the characteristics of good

A scientific management is most-essential as it fulfils the

2. It distributes the work and machines among the workers in

3. It keeps to co-ordinetfon among the staff at various levels.

4. It improves the efficiencies, as it keeps sufficient watch .and

5. It suggests new ideas and improvements.

6. It arranges for the efficient storing and recording.

7. It makes the arrangement for payment on scientific basis and

8. It develop means of marketing and publicity.

9. It gives due importance, to labour grievances and study their

Management is concerned with direction and control over the

Gilbreth G. Eiton Mayo

There pioneers laid. the foundation of modern management.

• Henry Fayol ( 1841 - 1925 ) :-

Henry Fayol, a trench industrialist, and Manager, was one

1) Forecasting ;- As soon as an idea conies in the mind for

2) Planning :- Planning means "thinking before doing". Before

planning should aim at eliminating of wastage of material,

3) Organising: - When complete planning is done next step is to

4) Directing: - It means the system of directing the plan into

5) Motivating : Suppose a person is a highly capable,

6) Co-ordinating: - In an enterprise, there may be large number

8) Communication: -This functions transmits-the information

Communication must include the acceptable of good

9) Leadership -All the managers are supposed to have the

10) Decision Making :- As managers are reguired to take

Fayol, the founder of the movement for better organisation,

1) Division of work :- It promotes efficiency, because it

2) Authority gc/id Responsibility :- Authority and Responsibility

3) Discipline :- It. means obedience, • application, energy and

4) Unity .of Command :- A subordinate should take orders from

5) Unit of'Direction :-• According to Fayol, each management

6) Subordination of Individual Interest to General Interest :-

7) Remuneration of Personnel :- Payment to workers should be

8) Centrallisation :- According to this principle, there, should

9) Equity :- Kindness and justice-on the part of'management of

10) Stability :- Efficiency can be achieved by having stable

11) Initiative. :- To have success, plans should be well made

• Abilities Required from Managers :-

Concept developed by Fayol in General and Industrial

i) Managerial :- Managerial activity means to follow

ii) Technical :- Technical know how production work.

iii) Commercial :- Buying,- selling 2nd exchange functions.

Iv) Financial :- Utilisation of capital in an oiptimum way.

v) Security :-Property and interests of'the organisation must

vi) Accounting :- To keep accounts properly so as to determine