Chapter- 1Introduction to

Industrial Organization

Definition of Industry

• Industry is the aggregate of manufacturing or technically productive enterprises in a particular field.

• Industry can be defined as the combination of a number of homogeneous types of organizations.

• “The process of extraction, production, conversion, processing or fabrication of products is described as industry”.

- Professor M. C. Shukla

• “Industry means all factories or companies or processes involved in the manufacturing of products”.

- P. H. Collin

Definition of Industrial Organization

• Industrial organization is an organization where goods are produced and services are rendered for the sake of satisfaction of a set of customers.

•“Guided by management, an industrial enterprise combines land, labor and capital in variable proportion to make a producing unit turning out tangible goods”.

-Bethel, Atwater, Smith, Stackman jr. and Riggs

Importance of Studying Industrial Organization

1. To acquire knowledge2. To acquaint with the latest information3. To gain knowledge about structure4. To be familiar with different theories of firms and

industries5. To identify size and types of industrial concerns

Importance of Studying Industrial Organization

6. To identify some factors affecting the size of industries7. To grasp about the matter related to localization of

industries8. To be familiar with the conditions for large, medium and

small industries9. To have some guidelines for the industrial development10. To create the research and development base11. To get information regarding latest innovation and

technologies

Functions of Industrial Organization

1. Industrial forecasting2. Formulation of effective plans3. Alignment of technologies4. Procurement of raw materials5. Transformation6. Coordination of activities of employees7. Encouraging human resources8. Proving suitable help and service facilities

Functions of Industrial Organization

9. Maintaining environment10. Establishing labor-management relation11. Utilizing effective control measures12. Evaluation and supervision of activities of

management/organization

Objectives of Industrial Organization

A. Economic objectivesB. Social objectivesC. Human objectivesD. National objectivesE. Global objectives

Economic Objectives

1. Earning profit2. Creation of customers3. Regular innovations4. Best possible use of resources

Social Objectives

1. Production and supply of quality goods and services

2. Adoption of fair trade practices3. Contribution of the general welfare of the society

Human Objectives

1. Economic well being of the employees2. Social and psychological satisfaction of employees3. Development of human resources4. Well being of socially and economically backward

people

National Objectives

1. Creation of employment2. Promotion of social justice3. Production according to national priority4. Contribute to the revenue of the country5. Self-sufficiency and export promotion

Global Objectives

1. Raise general standard of living2. Reduce disparities among nations3. Make available globally competitive goods and

services

Guidelines for Industrial Organization

1. Determine the Type of Industry

2. Determine the Vision, Mission and Objectives for

the Organization

3. Determine the Financial Needs

4. Determine the Corporate Strategy

5. Identify Chain of Command

6. Develop a Friendly Organizational Culture

7. Identify Key Customers and Suppliers

8. Determine the Decision Making Process

9. Develop an Asset Protection Plan10. Develop a Flexible Business Plan for the Industrial

Organization11. Obtain Necessary License12. Determine the Human Resources needs of the

Organization13. Determine the Availability of Human Resource

Guidelines for Industrial Organization

14. Determine the Selection and Recruitment Procedure15. Establish a Competitive Compensation Package16. Develop Adequate Training Facilities17. Determine the Quality Standards18. Determine the Conflict Resolution Process

Guidelines for Industrial Organization

Sectors of Industrial Organization

1. Primary Sector2. Secondary Sector3. Tertiary Sector4. Quaternary Sector

Structures for Industrial Organization & Applicability in Bangladesh

1. Traditional Structures: a. Line Structure

b. Line and Staff Structurec. Functional Structure

2. Divisional Structures: a. Product Structure

b. Market Structurec. Geographic Structure

3. Matrix Structures4. Efficient Industrial Organizational Structure

Factors Affecting Globalization/ Localization of Industries

1. Big-push from the government2. Financial Sources3. Installation of Technology4. Means of Information Technology5. Availability of Maintenance Facilities6. Allied Support7. Availability of Training organizations8. Availability of Trained Human Resources9. Proximity to Raw Materials

Factors Affecting Globalization/ Localization of Industries

10. Proximity to power and energy11. Proximity to market12. Proximity to Sea-ports13. Possibility to enter into the global market

Size of Industries

A. International Context1. Large-Scale Industry

2. Medium Scale Industry3. Small Scale Industry

B. Bangladesh Context 1. Large Scale Industry

2. Medium Scale Industry 3. Small Scale Industry 4. Cottage Industry 5. Reserve Industry

Factors Affecting the Size of Industries

1. Availability of Funds2. Availability of Human Resources3. Managerial Efficiency4. Infrastructure5. Topography6. Location7. Climate8. Proximity/Nearness to Market

Factors Affecting the Size of Industries

9. Government Participation10. Political Support11. Socio- Economic Conditions12. Cultural Heritage13. Ethical and Behavioral Level

Conditions for Large-Scale Industries1. Availability of funds2. Availability of HRs3. Managerial efficiency4. Infrastructure5. Topography6. Location7. Climate8. Proximity to market9. Govt. participation10. Political support11. Socio-economic condition

Conditions for Medium-Scale Industries1. Availability of funds2. Availability of HRs3. Managerial efficiency4. Infrastructure5. Topography6. Location7. Climate8. Proximity to market9. Govt. participation10. Political support11. Socio-economic condition

Conditions for Small-Scale Industries1. Availability of funds2. Availability of HRs3. Managerial efficiency4. Infrastructure5. Topography6. Location7. Climate8. Proximity to market9. Govt. participation10. Political support11. Socio-economic condition

Large-Scale Industries in Bangladesh

1. Automobiles2. Airlines3. Banking4. Ceramics5. Electronics and Electrical equipments6. Hospitals and Medical centers7. Insurance8. Pharmaceuticals9. Oil and Gas exploration10. Power generation and Power distribution11. Telecom12. Textile

Medium-Scale Industries in Bangladesh

1. Residential hotels2. Plastic, Plastic bottles and Plastic bags

manufacturer3. Furniture4. Travel and Tourism5. Frozen6. Departmental stores7. Computer8. Electronics tolls and equipments9. Restaurants and Fast Foods

Small -Scale Industries in Bangladesh

•Janata foods•Green trade house•Star engineering works•The stone house, etc.

Thank You