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Basic mana ementBasic mana ement
conceptsconceptsReferences
. ,
Engineering Economy .
2. S.K. Sharma, etal., Industrial Engineering and
Operations Management .
3. Abbass F. Alkhafaji, Competetitive Global
Management.
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WHAT IS MANAGEMENT?
WHAT IS MANAGEMENT?
• The verb manage comes from the Italian
maneggiare (to handle — especially a horse)• Which in turn derives from the Latin manus
• The French word mesnagement (laterm nagemen n uence e eve opmen n
meaning of the English word management in
5/2/2012
t e 17t an 18t centuries3
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WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?
• anagement s t e art o gett ng t ngs one t roug
people.
• The process of setting and achieving goals through the
execution of five basic management functions –
, , ,
– that utilize human, financial, and material resources
5/2/2012
in an efficient and effective manner.4
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• What is this little lad doing?
• Do you know where he is going?
• Can you see where he is going?
•
Can you really see what the
• Have you got the big picture in
mind?
• With anything that one does inlife you start with the end in
.
to achieve and then you decide
how you will work towardsachieving it. This is what
management is.5/2/2012 5
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CONT’DCONT’D
reality and Future reality
VisionRealityrea ness
NOW FUTURE
Courage
5/2/2012 6
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CONT’DCONT’D
o a ou an ourFollowers Can Reach Our
Vision
Chart the Path
in Place
5/2/2012 7
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CONT’DCONT’D
• In general "management" identifies a special
effort and activities of other people toward
common objectives.
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WHY MANAGEMENT?WHY MANAGEMENT?
• e n us r a evo u on roug a ou e
emergence of large-scale business and its need forprofessional managers
•
anagemen ecame more mpor an as edevelopments and complexities of technology and
human relationships get more challenging to those who
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CONT’DCONT’D
Shorter life‐cycles for innovative technologies
•Water power
•Textiles
•Iron
•Steam
•Rail
•Steel
•Electricity
•Chemicals
•Internal‐combustion
•Petrochemicals
•Electronics
•Aviation
•Digital networks
•Software
•New media
1st Wave 2nd Wave 3rd Wave 4th Wave 5th Wave
1785 1845 1900 1950 1990 1999 2020
Source: The Economist , February 20, 1999
60 yrs 55 yrs 50 yrs 40 yrs 30 yrs
5/2/2012 10
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WHAT MANAGEMENTS STRIVES FOR?WHAT MANAGEMENTS STRIVES FOR?
• Management strives invo ving a group o peop e work
together in the most effective and efficient mannerto achieve stated goals in the best and most
'.
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FUNCTIONS OF MANAGEMENT FUNCTIONS OF MANAGEMENT
• The subject of management can be
considered a rocess involving certainfunctions that a manager performs
1 P annin
2. Leading
.
4. Staffing
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.
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CONT’DCONT’D
1. Planning
• ann ng nvo ves e pre e erm n ng o e course o
action to be taken in relation to the known event . It
also includes anticipating the possibilities of future
“Failin to lan means lannin to fail”
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CONT’DCONT’D
•
It is a systematic activity which determineswhen, how and who is going to perform a
.
“ ”
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CONT’DCONT’D
• The increased importance of planning in a
changes in the environment like
• changes in technology,• overnment olic
• overall economic activity,
•
5/2/2012 15• in social norms and attitudes.
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CONT’DCONT’D
• There are different planning executed in
different level of an organization
• Tactic planning
• Operational planning
5/2/2012 16
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CONT’DCONT’D
• n genera , e p ann ng process may
s stematicall be com osed of five elements:
I. Setting Primary & Intermediate Goals
II. Search for Opportunities
III For ulation o Plans
IV. Target Setting
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V. Follow-up of Plans
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CONT’DCONT’D
2. Leading
• ,
different terms such as
Directing, Executing, Supervising, Ordering and Guiding• What ever terms are assigned to it, the idea of
directing is to put into effect the decisions, plans
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.
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LEADERSHIP STYLESLEADERSHIP STYLES
There are four types of leadership styles
• e c a or a ea er ma n a ns a g y cr ca an
negative attitude in his relation with subordinates
and advocates the accomplishment of tasks throughfear of enalties
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CONT’DCONT’D
• The benevolent - autocratic leader assumes a
aternalistic role which forces the workers to rel on
him for satisfaction.
•
s ype o ea er mus e excep ona y s rong anwise individual, so that his personality generates
respect and allegiance. The subordinates develop
de endence on the eader to the e tent that the ha e
5/2/2012 20very little chance of developing leadership qualities.
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CONT’DCONT’D
• The democratic leader suggests better methods and
tries to im rove the worker's attitude. Unlike theothers, not only he depends on his capabilities but
,
decision making and organizing.
• With this type of leadership satisfaction is gained
throu h a ee in o rou acco ish ents
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CONT’DCONT’D
• The fourth type of leadership style is a laissez -
faire type where the leader assumes the role of just
another member of the group and depends completely
on subordinates to establish their own goals and make
.
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CONT’DCONT’D
3. Organizing
and process by which a group allocates its
tasks among its members, identifies
re a ons ps an n egra es s ac v es
toward common ob ectives
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CONT’DCONT’D
• The organizing function of management brings
to ether human and h sical resources in an orderlmanner and arranges them in coordinated pattern to
accom lish lanned ob ectives.
• Each organizational resource (human, material,
inance etc. represent an investment rom w ic t e
management system must get the return.
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CONT’DCONT’D
• ome o e ene s are:
– Good communication between the management and,
– Sound basis to evaluate the performance ofindividuals and rou s
– Well defined areas of works for each employee, – Ade uate and effective control , and
– Stimulation of independent, creative thinking and
initiative on the part of the employees.
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CONT’DCONT’D
• T ere are some princip es o organization w ic
are guide lines for thought to operating managersan researc ers in an organization
1. Unity of Command
2. Exception Principle3. Span of Control
4. Scalar Principle
5. Departmentalization
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6. Decentralization
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CONT’DCONT’D
• e steps t at are mportant w en organ z ng
an enterprise on plansand
objectives
Establishingmajor tasks
Evaluating
results fororganizingstrategy
Allocating
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major tasks
intosubtasks
and
directivesfor
subtasks
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CONT’DCONT’D
. Sta ng
•
Staffing deals with the workers and is worker-oriented • This function includes the process of placing the right
erson in the ri ht or anizational osition
• The process of matching the people and the jobs is
for positions and raising the performance of personnel
5/2/2012 28the organizational position
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CONT’DCONT’D
5. Controlling
• Control is the rocess that measures currentactivities, quantitatively if possible, and guidesit toward some predetermined goal, plan, policy,
standard, norm, decision rule and criterion or yardstick.
• The essence of control lies in checking and
correcting actions against desired results in the
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planning process
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CONT’DCONT’D
• Controlling includes ensuring that employees
perform the work allocated to them in the waysa own, an w no wa age or u ca on otime, effort or materials.
given number of employees to perform work; theymust be su ervised and mana ed so that theirefforts achieve the desired results.
• This re uires that the are motivated, checked,
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guided, taught and encouraged .
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CONT’DCONT’D
• There are seven principles of control.
I. Strategic Point ControlII. Feedback
III. Flexible Control
IV. Organizational StabilityV. Self-Control
. rect ontro
VII. Human Factor
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CONT’DCONT’D
StaffingPlanning Organizing Leading Controlling
Defininggoals,
establishin
Determiningwhat needsto be done
Motivating,leading, andan other
Monitoringactivities toensure that
Lead to
Achieving the
Locatingprospective
em lo ees tostrategy, and
developingplans to
coordinate
how it will be
done, andwho is to do
it
actions
involved indealing with
people
they are
accomplishedas planned
organizations
statedpurposes
fill the job
created bythe
organizingactivities process
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WHO ARE MANAGERS?WHO ARE MANAGERS?
◆ anager
•
of other people so that organizational goals can be
accomplished.
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CHARACTERISTICS OF A GOOD MANAGERCHARACTERISTICS OF A GOOD MANAGER
The Dual Aspects of any Manager's Job
•
The modern 'world of industry' is very complex, and thisvery complexity has led to what is called “specialization”
and to the "division of labor” by which different people
specia ize in per orming − an ecome specia ists in −
different types of work.
• It follows, therefore, that the “technical” or "functional”,
i.e. the specific work of different managers can and does
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vary enormous y.
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CONT’DCONT’D
• Nevertheless, all those different types of
mana ers and all others should have considerableknowledge of the technical aspects of their jobs in
a on o e ng pro c en managers o peop e .
• It is, in an case, not eas to train, su ervise and
control the work of others without knowing what
5/2/2012 35
ey are or ou e o ng.
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•
CONT’DCONT’D
80% and 90% of his working hours on managerial matters and only
to o is time on t e tec nica activities.
• Whilst senior managers may spend approximately 50% of their
work time on managerial activities and 50% on technical activities;and
• Supervisors and foremen may spend some 70% to 75% of their
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me on ec n ca ac v es an on y o o e r me a
work on the supervision of their subordinates
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CONT’DCONT’D
♦ How The Manager’s Job Is Changing
•
The Increasing Importance of Customers – Customers: the reason that organizations exist
• Managing customer relationships is the responsibility of all managers and
employees.
• Consistent high quality customer service is essential for survival.
– Doing things differently, exploring new territory, and taking risks
•
for innovation.
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CONT’DCONT’D
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PERSONAL QUALITIES NEEDEDPERSONAL QUALITIES NEEDED• ome o e more mpor an persona y ra s o a
successful manager are the following:
1. Ability to Think Clearly and Logically: A
manager needs to be able, as the result of training,
to approach each situation and problem positively
and objectively, without prejudgment or being
distracted by irrelevancies. This requires him to
think in a clear, orderly fashion and to marshal and
5/2/2012 39
arrange logically in his mind all the facts and
information available to him.
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CONT’DCONT’D
2. The Abilities to Make Decisions and to Act
Decisivel : These follow on from theforegoing, and also require a measure of
self-confidence; a belief in one's own abilit
to succeed in solving problems in the rightwa and in one's own abilit to deal
effectively with different situations and
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.
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CONT’DCONT’D.
needs to be solved.
2 Obtainin all relevant in ormation about the roblem3. Breaking down the problem into parts − very often
the solution to one part is obvious and leads, logically,to the solving of other parts or the whole problem.
4. Comparing and judging the probability of success of,
and their possible consequences on other areas.
−
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.decision
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CONT’DCONT’D
• The Ability to Use Initiative: from time to time a manager is
bound to come across problems or situations which are outside his
range of experience or outside the normal scope of his responsibly;
the latter can, perhaps, arise when a senior is away or is unavailable
for some reason. In such circumstances, particularly if action is
urgently needed, the manager must not simply leave the matter until
his senior is available or wait to be told what to do, but must initiate
- that is, lead the action without waiting to be prompted.
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CONT’DCONT’D
• Ability to Handle Conflict: A good manager is calm, able
to listen, is ositivel res onsive to criticism and is ableto handle conflicts and differences in a constructive
. ,
be confident, self-assertive, fair and dominant. He
should be highly tolerant of stress, as conflicts generally
lead to stress and tension. This would require a sound
5/2/2012 43
mind in a sound body.
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CONT’DCONT’D
• Ability to Adapt Change and be Flexible: Any manager
, ,cope with changed circumstances, and ensure that his
su or na es a so o so.
• Adaptability to different situations and flexibility of
mind are also necessary in the routine, day-to-day
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, .
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CONT’DCONT’D
• Ability to Be Emotionally Stable: In dealing with different
problems and situations, some of which might be irritating, annoying,
worrying or heated − or include emotional displays (e.g. tearful
women, angry voices, etc.) by others − a manager must be
sufficiently mature to keep calm and collected. He must be able to
keep control over his own emotions and his temper whatever may the
provocation be, and be able to concentrate his attention on the
matter in hand, thinking clearly, logically, and avoiding hasty
5/2/2012 45
reactions.
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CONT’DCONT’D• Stamina and Concentration: mental fitness to work long and hard
without undue stress or strain.
• Besides mental alertness, a manager needs to be able to concentrate
his mind on the matter in hand even under the most tiring
circumstances and/or when he is under pressure; to focus or keep
one's mind intently fixed over a long period can be tiring,
particularly as there will be many different matters requiring
attention and concentration during a manager's working day.
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CONT’DCONT’D
• Drive and Determination: A manager needs the urge and
en us asm o s mu a e ac on, no on y y mse , u
by other people as well. He also needs the determination
to keep going whatever the difficulties, adapting hisactions and decisions to overcome roblems encountered
and pressing on to a successful conclusion.
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CONT’DCONT’D
• Leadership: Leadership is the ability of a person to
exert a ositive influence over the thou hts, behaviorand actions of others, and then to direct their thoughts,
.
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CONT’DCONT’D
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ORGANIZATION STRUCTUREORGANIZATION STRUCTURE• e stages in t e setting up o an e ective organizationa
structure are
The activities which will be necessary to achieve the
objectives of the business must be established.
The various related activities should be grouped together intodepartments; the most logical grouping is by 'function', that
is, by type of activity: production, marketing, finance, etc.
The activities of a articular de artment will be further
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divided , and grouped together into sections;
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CONT’DCONT’D
the proposed organization
Based on estimates of the volume of work, which will
be erformed b each section, the number of staff
required must be determined. Depending on the type,
numbers of supervisors, junior and middle managers
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per section and department must be given thought
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CONT’DCONT’D e s ec a now e ge or a en s requ re y e ar men a
and sectional managers must be laid down.
The equipment necessary for the proper functioning of each
section and department must be decided upon, and provision
made for its positioning when considering the layout of the
.
To ensure effective coordination of all parts of the
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enterprise, effective procedures and systems of
communication must be devised and installed.
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TYPES OF ORGANIZATIONAL STRUCTURETYPES OF ORGANIZATIONAL STRUCTURE
• There are four different types of organizations,
I. line,
II. functional,. ,
IV. matrix organization.
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CONT’DCONT’D
I. Line organization
• ' ',it is how the armed forces are organized.
•
There is a clear 'line' of responsibility and
structure from the board to the lowest level of
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supervision, an be ow.
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' ‘ CONT’DCONT’D
usually be made quickly and implemented rapidly, because
o t e rectness o t e contro , t e coor nat on o t e
activities of all those employed in a department is
simplified.
• The position (and status) of all the different people
working in a department can be easily seen, and so the
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, ,be clearly defined and understood.
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CONT’DCONT’D
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CONT’DCONT’D
II. Functional Manager
,
determines the areas of authority and responsibility.
•
An expert or specialist is placed in charge of eachfunction and will have direct control of that function
wherever it is undertaken within the enterprise.
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CONT’DCONT’D• - -
of the enterprise (which is the domain of the line managers) they are
many benefits for the enterprise.
• However this form of or anization makes control difficult as there are
no clear lines of authority and it is similarly difficult to establishresponsibility when things do not go right.
• Furthermore, staff as well as supervisors and junior managers become
confused at being subject to the authority of more than one superior.
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CONT’DCONT’D
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CONT’DCONT’DIII.Line and staff organization
•
In such a structure, the line managers control theprimary functions, such as marketing and
roduction which are directl concerned with
achieving the objectives of the business; whilst the
secondary functions which assist the smooth and
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.
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CONT’DCONT’DMANAGING DIRECTOR
DIRECTOR
WORKS
MANAGER
SALES
MANAGER
ACCOUNTS
MANAGER
PERSONNEL
MANAGER
L L L S
SECTION
MANAGERS
SECTION MANAGERS
SUPERVISORS &
SECTION
MANAGERS
L L L
OPERATORS
CLERKS
EMPLOYMENT
OFFICER
TRAINING
OFFICER
S S
L – Line relationship: S – staff relationship
5/2/2012 61
SUPERVISORS
& CLERKS
SUPERVISORS
& CLERKS
espons y an
au or y
s own
y
Staff. Advisory relationship shown by ‐‐‐‐‐‐‐‐‐‐
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CONT’DCONT’DIV. Matrix organization(Project Organization)
• These are temporary organizational structures formed for
specific projects for a specific period of time and are
dismantled, once the required goal is achieved.
•
A typical example for this kind of organizational structure canbe the goal to design and build a new power plant station.
• The specialists are selected primarily on the basis of task-
related skills and ex ertise rather than decision makin
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experience or planning ability.
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CONT’DCONT’D• ese structures are very use u w en:
– The project is clearly defined in terms of objectives to
be achieved and the target date for completion of the
ro ect.
– The project must be separate and unique and not be a.
– The project must be temporary in nature and not
5/2/2012 63
extended into other related projects.
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CONT’DCONT’D• T is kin o organization occurs requent y in:
– Construction ( e. . buildin a brid e)– Aerospace engineering ( i.e. designing and launching
wea er sa e e
– Marketing( e.g. advertising company for new product)
– Installation of an electronic data processing system,
5/2/2012 64
e c.
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CONT’DCONT’D
GeneralManager
Finance Technical
Services
Project A M anager
Project B M anager
Project C M anager
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CONT’DCONT’D,
individual employee to have two managers . However,
proponents of matrix organization believe that it
rovides an a enc with the flexibilit to work on
critical projects.
• Matrix organization also brings together the
s ecialized talent that is often necessar to
5/2/2012 66
complete a project
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Other advanta es of matrix or anization: CONT’DCONT’D
– Decision making is decentralized to a level where information
is processed properly and relevant knowledge is applied.
– Extensive communication networks hel to rocess lar e
amount of information.
– With decisions delegated to appropriate levels, higher
management levels are not over loaded with operational
5/2/2012 67
decisions.
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CONT’DCONT’D
– Resource utilization is efficient , because key
programs or products at the same time.
– Employee learns the collaborative skills needed to
function in an environment characterized b
frequent meeting and more informal interactions .
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PRODUCTIVITYPRODUCTIVITY
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THE BASICS OF PRODUCTIVITYTHE BASICS OF PRODUCTIVITY• In most businesses, competition for the available
market, forces the management of each enterprise to
see competitive a vantage t roug t e use o :– product improvements
– ower cos s
– lower selling prices for the same or better quality and–
• Productivity is defined as the ratio of value of output
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CONT’DCONT’D
output of value =tyProductivi
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CONT’DCONT’D
• An increase in production does not necessarily by
itself indicate an increase in productivity.
• If the input of resources goes up in direct
remains the same
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CONT’DCONT’D
• If input increases by a greater percentage than
,expense of reduction in productivity
•
In short higher productivity means to produce ,
minimum increase in expense, or the same amount
is produced at less cost in terms of resources.5/2/2012 73
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CONT’DCONT’D
• The outputs may be products or services and the
in uts or resources ma be land, materials, lantmachineries, tools and a series of man.
♦ Land Productivity: Better seed, fertilizer and
yield from two quintals to three quintals. Hence
an pro uc v y as ncrease y percen .5/2/2012 74
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CONT’DCONT’D
♦ Material Productivity: If a skillful worker is able
2m 1m sheet metal, while an unskillful worker
can only produce 250 out of the same material,
used with 20 percent greater productivity
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CONT’DCONT’D
♦ Machine Productivity: If a machine tool has
,and through the use of improved cutting tool
and/or proper maintenance procedure itsou pu n e ame per o ncrea e o
ieces, the roductivit of that machine hasbeen increased by 20 percent.
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CONT’DCONT’D
♦ Productivity of Man: If a shoe maker has
een pro ucing pieces o eat er parts per
hour and if im roved methods of work enable
him to produce 40 pieces per hour the
productivity of that man has increased by 33.3
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CONT’DCONT’D
• To sum up, a low level of productivity implies a low
.
• A low growth of economy meant, low income leading
to low standard of leaving and a low level of savings,
productivity
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Global
Higher
productivity
Higher
competitiveness
International
multinational
Higher
Quality
Export
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Economic Growth
Productivit Growth E lo ent+ Growth
TFP Growth Capital Intensity
+ row5/2/2012 80
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PRODUCTIVITY IMPROVEMENT PRODUCTIVITY IMPROVEMENT
factors. Some of the external factors, influencing
productivity to mention are:
the national and international olicies
infrastructure supports
the availability of technology and natural resources
organ za ona o c es
Climate, incentives and information5/2/2012 81
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CONT’DCONT’D• Examples of internal factors that are identified
unsuitable personnel policies leading to a low level of
satisfaction and involvement;
awareness;
improper selection and training of personnel;
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CONT’DCONT’D
inappropriate choice of design,
tools material and e ui ment; undefined standardization and quality policies;
systems;,
systems;
unsa e an un ea y wor ng env ronmen
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PRODUCTIVITY IMPROVEMENT STRATEGIESPRODUCTIVITY IMPROVEMENT STRATEGIES
A. Short term Strategy
• e rs s ra egy s mprov ng organ za ona p ann ng
and control, to implement planned maintenance of
machinery and effective production system in plants
wou d show an increase in achine roducti it and
reduction in maintenance cost.
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CONT’DCONT’D• e secon ac on s ncreas ng man ower e c ency an
effectiveness at all levels. Effectiveness and efficiency
are the main tools of productivity.
♦ Efficienc
“Doing things right” – Getting the most output for the least inputs
♦ Effectiveness “Doing the right things”
– Attaining organizational goals
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CONT’DCONT’D
Resource Goal
Efficiency (Means) Effectiveness (End)
Usage
Attainment
Low Waste High Attainment
Management Strives for:
ow esource as e g c encyHigh Goal Attainment (High Effectiveness)
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N ’D
N ’D
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CONT’DCONT’D
• To be able to increase manpower efficiency and
what is required is motivation, training and
education. This method has proved itselfucce u n apan.
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CONT’D
CONT’D
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CONT’DCONT’D• The third short term line of attack is improving
o eration methods. The techni ues of method
study involve breaking a process into detailed
.
– The study may result in elimination of anactivity, combination of several activities,
chan e of se uence of activities, shortenin
duration of activities etc.5/2/2012 88
CONT’D
CONT’D
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CONT’DCONT’D
• As Frederik Taylor said "Most of us can do
three or our times as much as we ordinaril dowithout lengthening working hours or even
'
end".
• In fact, to achieve this, effective
i le entation o ethod en ineerin isrequired.
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CONT’D
CONT’D
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CONT’DCONT’D
B. Medium Term Strategy
and improve the products, and reduce variety.
•
The analysis consists of common sense questions to
alternative materials, elimination of parts where
special designs have been specified, redesign, etc.5/2/2012 90
CONT’D
CONT’D
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CONT’DCONT’DC. Long Term Strategy
•
,organized departments and proper layout will
undoubtedly contribute to an increase in
.
• Furthermore, research and development is the
backbone for productivity increment.5/2/2012 91
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Productivity improvement techniques5/2/2012 92
FUNCTIONS OF AN INDUSTRIAL ENTERPRISE
FUNCTIONS OF AN INDUSTRIAL ENTERPRISE
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• Manufacturing functions– Receiving, Warehousing, Transportation, Production,
• Engineering Functions– , , ,
estimation
• Control Functions– Production control, Quality control, Cost control,
• Support Functions– Purchasing, Sales, Maintenance, Personnel
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