INDUSTRIAL ORGANIZATION AND MANAGEMENT
ENGINEERING MANAGEMENT
Management
- is the attainment of organizational goals in an effective & efficient manner
through planning, organizing, directing & controlling organizational resources
- it is the effective motivation of men & the efficient utilization of resources for the
attainment of a predetermined objectives
- it is both an art & a science. It is an art because it results in the
accomplishment of objectives through the use of human efforts. It requires skill
& careful study in its application. It is a science because it is a systematic body
of knowledge. It gathers & analyzes facts & formulates general laws of
principles from these facts.
Importance of Management
 The human & material resources that business can afford have to be efficiently used
if the enterprise is to survive in a competitive economy. The kind of management
employed can be used as a gauge to evaluate whether the organization is bound to
succeed or fail in attaining its objectives.
 Management is intended to accomplish predetermined goals or objectives
Engineering Management
- refers to the activity combining “Technical knowledge w/ the ability to organize
& coordinate manpower, materials, machinery, & money and methods.”
Manager - a person who has the responsibility for the activities of other people in the
organization
- the traditional view as expressed by Koontz and O’ Donnell, represents the socalled Process Approach to management emphasizes the five essential
functions:
o
o
o
o
o
Planning
Organizing
Staffing
Directing
Controlling
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The Task of a Manager
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PLANNING - This involves the choice of the objectives to be pursued, the means to
achieve them, and allocating the resources of the organization.
ORGANIZING - This involves identifying, subdividing, grouping and coordinating the
various activities required to achieve the objectives of the institution.
STAFFING - This involves the recruitment, selection, assignment, and development of the
various kinds of human resources required by the organization.
DIRECTING/LEADING - This is the process of communicating with and influencing
subordinates towards the achievement of organizational goals.
CONTROLLING – Refers to the process of ascertaining whether organizational objectives
have been achieved. If not, why not; and determining what activities should
then be taken to achieve objectives better in the future.
A more contemporary view looks at the job of managers in terms of the types of roles which
they perform in the organizations
Henry Mintzberg - attempted to categorize the manager’s various activities into roles. The
3 types of roles that he observed were interpersonal, informational &
decisional.
Role – is an organized set of behaviors associated w/ a particular office of position.
-
ACTIVITY
Figurehead
- role w/c is assumed by
managers
when
they
represent their respective
units in the outside world in
ceremonial & civic activities
Performs ceremonial &
symbolic duties of a legal or
social nature like greeting
visitors and signing legal
documents
Leader
Builds relationship w/
subordinates & communicates w/, motivates &
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INTERPERSONAL
grows directly out of
the authority of a manager’s
position & involve maintaining
positive relationships w/
significant others.
ROLE
pertains to relationship w/
others & are related to human
skills
-
is the role played by
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CATEGORY
INDUSTRIAL ORGANIZATION AND MANAGEMENT
managers when they
initiate
&
coordinate
activities in their units
coaches them; trains &
counsels
Liaison
Maintains networks of
contact both inside &
outside work units who
provide help & information through mails,
phone calls & meetings
- pertains to receiving &
transmitting information so
that managers can serve as
nerve centers for their
organizational units
Monitor
- gather information in
order to be well informed
about issues that can
affect the organization;
monitors
activities
outside his office
Disseminator
- transmits information
internally that is obtained
from either internal or
external sources
Spokesperson
- the manager’s leadership positions in the
organization
require
them to represent &
speak for their units visà-vis other units of the
organization & outsiders
DECISIONAL
- involves making significant
decisions that affect the
Entrepreneur
- managers as entrepreneurs are initiators,
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Seek & receive information to other organization members; scan
periodicals & reports,
maintain personal contacts
Forward information to
other
organization
members; send memos &
reports, make phone calls
Transmit information to
outsiders through speeches, report, memos.
Speak for subordinates to
superiors & represent
upper management to
subordinates
Identify new oppor-tunities
& develop these into new
products,
services,
methods or activities w/ in
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INFORMATIONAL
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- is needed by unit
heads when they interact
w/ persons in other units
w/in & outside the
organization
INDUSTRIAL ORGANIZATION AND MANAGEMENT
Disturbance
Handler/Problem Solver
- managers are called
upon
to
identify
solutions & to take
action to overcome the
continuous stream of
problems w/c crop up in
the day to day
operation
of
the
institution.
Resource Allocator
- managers exercise a
key role in the
distribution of funds,
personnel, materials &
other
organizational
resources
among
competing uses in the
organization
Negotiator
represent the
organization in major
negotiation
activities
w/c have a key impact
on the performance of
their units
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the organization
Take corrective action
during disputes or crises;
resolve conflicts among
subordinates; adapt to
environmental
crises;
takes corrective action
when organization faces
important,
unexpected
difficulties
Decide who gets resources;
scheduling,
budgeting,
setting priorities
Represent
department
during negotiation of union
contracts, sales purchases,
budgets;
represent
department interest
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innovators, problem discoverers, & designers of
improvement
projects
that direct & control
change in the organization
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organization
INDUSTRIAL ORGANIZATION AND MANAGEMENT
The Skills of a Manager
Given the varied nature of the activities which managers direct, it is to be expected
that managers would need equally varied capabilities and skills. It is, however,
possible to classify the range of capabilities and skills required of managers into here
broad types: 1) Interpersonal Skills, 2) Technical Skills, and 3) Conceptual Skills
INTERPERSONAL SKILL – since directing the activities of people in organizations is a
central aspect of the job of managers they need to be skilled in human relations.
TECHNICAL SKILLS – managers need to have the tools, methods, and techniques of the
body of knowledge appropriate to the activities which they manage. Thus, financial
managers, production managers, personnel managers, etc., all need the tools and
skills relevant to their respective fields
CONCEPTUAL SKILLS – organizations frequently perform many different types of activities
and functions which are interrelated in different ways. Managers in such
organizations need the ability to abstract from the concrete to be able to picture the
larger systems o which smaller activity units belong, and the many different ways in
which the subsystems are or could be related to each other.
THE LEVELS OF MANAGEMENT AND THE SKILLS OF MANAGERS
Management Level
Top Manager
Conceptual
Technical
Skills
Skills
Skills
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Middle Manager
Human
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Lower Manager
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INDUSTRIAL ORGANIZATION AND MANAGEMENT
** EVOLUTION OF MANAGEMENT THOUGHT **
MANAGEMENT THEORY
Pre-classical
Contributors
Classical
Viewpoint
Behavioral
Viewpoint
Quantitative
Viewpoint
Scientific Mgt
Early Behaviorist
Bureaucratic Mgt
Hawthorne Studies
Administrative Mgt
HR Movement
Mgt. Science
Opns. Mgt.
MIS
Contemporary
Viewpoint
Systems Theory
Contingency theory
Emerging Views
Behavioral Science
Approach
I. PRE-CLASSICAL CONTRIBUTORS
Henry R. Towne
- outlined the importance of management as a science & called for the
development of management principles that could be used in all types of
management situations.
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Charles Babbage
- built the first practical mechanical calculators & prototype of modern computers;
predicted the specialization of mental work (he recognized that not only
physical work but mental work as well could be specialized); suggested profit
sharing that had two parts (1)bonus that was awarded for useful suggestions &
(2) portion of wages that was dependent on factory profits.
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Robert Owen
- advocated concern for the working & living conditions of the workers; although
his business partners resisted some of his ideas, he tried to improve the living
conditions of employees by upgrading streets, houses, sanitation, & the
educational system.
INDUSTRIAL ORGANIZATION AND MANAGEMENT
II. CLASSICAL VIEWPOINT
- is a perspective on management that emphasizes on finding ways to manage
work & organizations more effectively.
SCIENTIFIC MANAGEMENT
-
is an approach w/in classical management theory
that emphasizes the scientific study of work methods
in order to improve worker efficiency
Frederick Winslow Taylor – introduced Principles of Work Management; known as
the “Father of Scientific Management”
Soldiering – deliberately working at less than full capacity
3 Reasons why workers engaged in soldiering:
1. Fear of displacement
2. Faulty/ineffective wage systems to reward workers for greater productivity
3. Absence of systematic methods for defining output standards for different jobs
Taylor’s Four principles of Scientific Management
Harrington Emerson – developed the 12 Principles of Work Efficiency; encouraged the
use of experts
James D. Mooney
– expounded views concerning Principles of Organization & Mgt.
Lyndall Urwick
– Managing Work & Organizational Synthesis
Henry L. Gantt
– introduced Principles of Work Scheduling; introduced the Gantt
Chart w/c is a graphic aid to planning, scheduling, & control of
work activities; he also devised a unique pay incentive system that
not only paid workers extra for reaching standard in the allotted
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Scientifically study each part of a task
Carefully select workers and train them
Cooperate fully with workers
Divide work and responsibility
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2.
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4.
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time but also awarded bonuses to supervisors when workers
reached standard, thus, the system encouraged supervisors to
coach workers who were having difficulties.
Frank & Lillian Gilbreth - known for their Principles of Work Simplification; Frank is known
as the “Father of Motion & Time Study”; their studies aimed at
eliminating unnecessary motions & expanded their interests into
exploring ways of reducing task fatigue; part of their work involved
the isolation of 17 basic motions, each called a therblig.
BUREAUCRATIC MANAGEMENT
- another branch of the classical viewpoint w/c emphasizes the need for
organizations to operate in a rational manner rather than relying on the arbitrary
whims of owners and managers.
- Based mainly on the work of German Sociologist Max Weber. In formulating
his ideas, Weber was reacting to the prevailing norms of consciousness and
nepotism. For example, it was customary practice to allow only individuals of
aristocratic birth to become officers in the Prussian Army or to attain high-level of
positions in government & industry. Weber felt that the situation not only was
unfair but also led to a significant waste of human resources. He also believed
that running organizations on the basis of whom one knows than what one knows
and engaging in nepotism (the hiring of relatives regardless of their competence)
tended to interfere w/ organizational effectiveness.
Major Characteristics of Weber’s Bureaucracy
Specialization of labor
Jobs are broken down into routine, well-defined tasks so
that members know what is expected of them & can
become extremely competent at their particular subset
of tasks
Formal rules &
procedures
Written rules & procedures specifying the behaviors
desired from members facilitate coordination & ensure
uniformity
Inter-personality
Rules, procedures, & sanctions are applied uniformly
regardless of individual personalities & personal multiple
considerations
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Description
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Characteristic
INDUSTRIAL ORGANIZATION AND MANAGEMENT
Well-defined hierarchy
Career advancement
based on merit
Multiple levels of positions, w/ carefully determined
reporting relationships
among levels, provide
supervision of lower offices by higher ones, a means of
handling exceptions, & the ability to establish
accountability
of actions
Selection & promotion is based on the qualifications &
performance of members
ADMINISTRATIVE MANAGEMENT
- an approach that focuses on principles that can be used by managers to
coordinate the internal activities of organizations. Major contributors include
Henri Fayol & Chester Barnard.
Henri Fayol – known as the “Father of Modern Management.” He was convinced that it
should be possible to develop theories about management that could then be
though to individuals w/ administrative responsibilities. He delineated five major
functions of management w/c he called the functional approach to management
focusing on major managerial activities – planning, organizing, coordinating, &
controlling.
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1. Division of work. Work should be divided. Work specialization can result in
efficiencies & is applicable to both managerial & technical functions.
2. Parity of authority & responsibility. Authority is the right to give orders & the power to
exact obedience. It derives from the formal authority of the office and from personal
authority based on factors like intelligence, experience, moral worth, & ability to lead.
With authority comes responsibility.
3. Discipline. Discipline is absolutely necessary for the smooth running of an
organization, but the state of discipline I depends essentially on the worthiness of its
leaders.
4. Unity of command. For any action whatsoever, an employee should receive orders
from one superior only.
5. Unity of direction. Activities aimed at the same objective should be organized so that
there is one plan and one person in charge.
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Fayol’s General Principles of Management
INDUSTRIAL ORGANIZATION AND MANAGEMENT
6. Subordination of individual interest to general interest. The interests of one
employee or group should not prevail over the interests & goals of the organization.
7. Fair remuneration. Compensation should be fair & as far as possible afford satisfaction
to both the employer & the employee.
8. Centralization. The proper amount of centralization or decentralization depends on the
situation.
9. Scalar chain. A scalar (hierarchical) chain of authority extends from the top to the
bottom of an organization & defines the communication path. It is an error to depart
needlessly from the line of authority, but it is even greater one to keep to it when
detriment to the business ensues.
10. Order. Arrangement of things & people. “A place for everything & everything in its
place.”
11. Equity. For the personnel to be encouraged to carry out its duties w/ all the devotion &
loyalty of w/c it is capable, it must be treated w/ kindness, & equity results from the
combination of kindness & justice.
12. Stability of personnel tenure. Employees security of employment.
13. Initiative. Managers should encourage & develop subordinate initiative to the fullest.
14. Esprit de corps. Since union is strength, harmony & teamwork are essential.
Chester Barnard – another major contributor to administrative management. Barnard
recorded his observations about effective administration in a single classic book,
The Functions of Executive.
- one of Barnard’s best-known contribution is his acceptance theory of authority.
This theory argues that authority does not depend much on “persons of authority”
who give orders as on the willingness to comply of those who receive the orders.
- on the basis of his view that authority flows from the bottom to the top, Barnard
argued that employees are more willing to accept directions from a manager if they
(3) feel that the actions indicated are in line w/ their needs & those of other
employees, and
(4) view themselves as mentally & physically able to comply.
The classical approach to mgt. generally focused on boosting efficiency. Classicists
left the impression that workers could be treated as givens in the system, as little more
than appendages to their machines. “Design the most highly specialized & efficient
job you can,” assumed the classicists, and “plug in the worker, who will then do your
bidding if the pay is right.”
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(2) see the communication as consistent w/ the purpose of the organization,
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(1) understand the communication,
INDUSTRIAL ORGANIZATION AND MANAGEMENT
III. BEHAVIORAL VIEWPOINT
-
is a perspective that emphasizes the importance of attempting to understand
the various factors that affect human behavior in organizations. There are four
aspects to its development: the contributions of the early behaviorists, the
Hawthorne studies, the human relations movement, & the more contemporary
behavioral science approach.
Early Behaviorist
Two early behaviorists, psychologists Hugo Münsterberg & political scientist
Mary Parker Follet, contributed pioneering ideas that helped make the
behavioral perspective a major viewpoint.
HUGO MÜNSTERBERG
-
considered to be the “Father of industrial psychology”
- sought practical applications of psychology to industrial applications leading
him to publish an important book Psychology & Industrial Efficiency. The book
argued that psychologists could help industry in 3 major ways: (1)
psychologists could study jobs & find ways of identifying the individuals who are
best suited to particular jobs, (2) identifying the psychological conditions under
w/c individuals are likely to do their best work, and (3) developing strategies
that would influence employees to behave in ways that are compatible w/ mgt.
interests.
- The ideas & examples he provided ignited the imagination of others & led to the
establishment of the field of industrial psychology, the study of human behavior
in a work setting.
- Follett attributed much greater significance to the functioning of groups in
organizations. She argued that members of organizations are continually
influenced by the group w/in w/c they operate.
- Another of her forward-looking ideas was her belief that organizations should
operate of “power with” rather than “power over.”
- Follett suggested that one way to foster the “power with” concept was by
resolving conflict through integration. By integration she meant the process of
finding solution that would satisfy both parties.
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- a social worker who became interested in employment & workplace issues.
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MARY PARKER FOLLET
INDUSTRIAL ORGANIZATION AND MANAGEMENT
Hawthorne Studies
-
A group of studies conducted at the Hawthorne plant of the Western Electric Co.
during the late 1920s & early 1930s whose results ultimately led to human relations
view of mgt.
-
this experiment was originally conducted in the “scientific mgt.” tradition prevailing @
that time, i.e. it set out to empirically determine the optimum level of illumination in
the work area by varying the level of illumination & recording its effect on the level of
worker productivity.
the original investigator who conducted the experiment encountered serious
difficulties in interpreting the initial results of the experiment since worker output
increased continuously regardless of the level of illumination. Company officials
were considering terminating the experiment when Elton Mayo & Fritz
Roethlisberger, both from Harvard, convinced them to continue the exp. Mayo &
Roethlisberger began to interpret the results of the exp. in a very different way. They
viewed the increase in productivity observed in the experiment as mainly a response
of the workers to the psychological, not the physical, environment in the
experimental situation.
-
Human Relations Movement
ABRAHAM MASLOW
- contributed to the human relations movement w/ his theory of motivation known
as Maslow’s Hierarchy of Needs.
DOUGLAS McGREGOR
- influenced how managers think about & deal w/ their employees.
- He developed the concept of theory X versus theory Y, a dichotomy dealing w/
the possible assumptions that managers make about workers. McGregor felt
that such assumptions exert a heavy influence on how managers operate
- Theory X managers tend to assume that workers are lazy, need to be coerced,
have little ambition, & are focused mainly on security needs. In contrast,
Theory Y managers assume that workers do not inherently dislike work, are
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- Maslow concluded that human needs go beyond the most basic ones for food &
shelter. The discovery of the need for self-actualization (developing one’s own
potential) has provided managers w/ new insights on how to motivate workers.
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- The hierarchy outlined by Maslow has five levels of needs: physiological
(lowest), safety, belongingness, esteem, and self-actualization (highest).
INDUSTRIAL ORGANIZATION AND MANAGEMENT
capable of self-control, have the capacity to be creative & innovative, &
generally have higher-level needs that are often unmet on the job.
Behavioral Science Approach
- emphasizes scientific research as the basis for developing theories about
human behavior in organization that can be used to establish practical
guidelines for managers. It draws on findings from a variety of disciplines,
including management, psychology, sociology, anthropology, & economics.
IV. QUANTITATIVE MANAGEMENT VIEWPOINT
-
the quantitative management viewpoint focuses on the use of mathematics,
statistics, & information aids to support managerial decision making &
organizational effectiveness.
Management Science
is an approach aimed at increasing decision effectiveness through the use of
sophisticated mathematical models & statistical methods
another term commonly used for management science is operations
research
Operations Management
- is the function or field of expertise, that is primarily responsible for managing
the production & delivery of an organization’s products & services.
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Commonly used MS/OR Tools
Probability concepts
Integer
Programming,
The Branch & Bound Method,
Dynamic Programming, Goal
Programming
Forecasting
Heuristics
Decision Theory
Simulation
Inventory Models
Queuing Theory
Linear Programming
Network Scheduling
Special-Purpose Algorithm
Markov Analysis
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INDUSTRIAL ORGANIZATION AND MANAGEMENT
Management Information Systems
- refers to the field of management that focuses on designing & implementing
computer-based information systems for use by management. Such systems
turn raw data into information that is useful to various levels of mgt.
V. CONTEMPORARY VIEWPOINT
Systems Theory
-
an approach based on the notion that organizations can be visualized as
systems. A system is a set of interrelated parts that operate as a whole in
pursuit of common goals.
-
according to the systems approach, an organizational system has four major
components
(1) Inputs – the various human. Material, financial, equipment, &
informational resources required to produce goods & services;
(2) Transformation processes – the organization’s managerial &
technological abilities that are applied to convert inputs into outputs;
(3) Outputs – the product, cervices, & other outcomes produced by the
organization, and
(4) Feedback – information about results & organizational status relative to
the environment.
Contingency Theory
- a viewpoint that argues that argues that appropriate managerial action depends on
the particular parameters of the situation. Hence, rather than seeking universal
principles that apply to every situation, contingency theory attempts to identify
contingency principles that prescribe actions to take depending on the chars. of the
situation.
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Systems can be open or closed. An open system is one that operates in continual
interaction w/ its environment. Through such interaction the system takes in new
inputs & learns about how its outputs are received by various important outside
elements. In contrast, a closed system does little or no interacting w/ its
environment & receives little feedback.
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OPEN vs CLOSED SYSTEM
INDUSTRIAL ORGANIZATION AND MANAGEMENT
Emerging Views
Japanese management approach – focuses on aspect of management in Japan that
may be appropriate for adoption in the U.S.
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Theory Z – outlined by William Ouchi, a concept that combines positive aspects of
American & Japanese management into a modified approach aimed at increasing U.S.
managerial effectiveness while remaining compatible w/ the norms & values of American
society & culture
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