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BIT 4183

CHAPTER 1

Evolution of Industrial

ManagementNadiah Ameram

[email protected]

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Definitions

Technology

± Usage & knowledge of tools and crafts to control

or adapt to the environment

Technology Management

± A discipline of management where in an

organisation leverages the technological

fundamentals to create competitive advantage

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Technology

Effects our lives in ways wherein it is difficult

to imagine living in ZERO technology

environment

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Evolution

The period roughly beginning in 1750 and endingin 1870 is the Industrial Revolution

The Industrial Revolution: machine power

replaces man and animal power, industrialorganization becomes large scale, and productivework becomes highly specialized

Technological innovations that characterize theIndustrial Revolution began earlier in otherplaces, but only in Great Britain in this period isthere such an early great leap in nationaleconomic productivity

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The Industrial Revolution's dramatic impact on GreatBritain lay possibly in the social, political, and legalconditions which were particularly favorable to changethere.

Private property was protected by British law and lesssubject to arbitrary seizure by the monarchy; taxationwas not any more onerous than in other Westernstates; intellectual property rights were protected byestablished patent law; and, a combination of limited

monarchy with an undercurrent of popular democraticsentiments, favored entrepreneurial risk-taking andprivate wealth creation more-so than anywhere else inEurope.

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Natural resources also played a determinative role inGreat Britain's Industrial Revolution. The country hadample coal and iron deposits to create an early ironindustry. Thomas Newcomen in 1705, improving upon

an earlier patent by John Calley, successfully built asteam engine that pumped water from coal mines. In1760 John Smeaton applied the steam engine to fanthe furnaces used in manufacturing iron. Ironproduction rose from 12 tons per furnace to 40 tons

per furnace. This increased productivity made availablea large supply of iron at low cost, and led to new usesfor iron: bridges, ships, and other machines.

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As the timeline, below, shows the Industrial

Revolution is a period on innovation:

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Importance of Industrial Management

Improves Understanding.

Direction for Training of Managers.

Role of Management. Guide to Research in Management.

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Improves Understanding.

From the knowledge of principles managers

get indication on how to manage anorganization. The principles enable managers

to decide what should be done to accomplish

given tasks and to handle situations which

may arise in management. These principles

make managers more efficient.

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Direction for Training of Managers

Principles of management provide

understanding of management process whatmanagers would do to accomplish what. Thus,

these are helpful in identifying the areas of

management in which existing & future

managers should be trained.

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Role of Management

Management principles makes the role of managers concrete. Therefore these principlesact as ready reference to the managers tocheck whether their decisions are appropriate.Besides these principles define managerialactivities in practical terms. They tell what amanager is expected to do in specificsituation.

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Guide to Research in Management

The body of management principles indicate lines

along which research should be undertaken to

make management practical and more effective.

The principles guide managers in decision making

and action. The researchers can examine whether

the guidelines are useful or not. Anything whichmakes management research more exact &

pointed will help improve management practice.

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Scientific Management

Definition

The process of approaching various aspects of organizations in a scientific manner using

scientific tools such as research, management,

and analysis.

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Frederick Taylor

Efficiency Expert in

U.S. Steel Industry

Invented New Tool Designs

and Handling Methods

Designed Stop-Watch

Task Timing

Created Piece-Rate PaymentScheme Developed

IndustrialDepartments

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Principles

A principle refers to a fundamental truth

These principles are derived: -

On the basis of observation and analysis i.e.practical experience of managers.

By conducting experimental studies.

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There are 14 Principles of Management described by Henri Fayol.

Division of Labor

Party of Authority & Responsibility

Principle of One Boss

Unity of Direction Equity

Order

Discipline

Initiative

Fair Remuneration

Stability of Tenure

Scalar Chain

Sub-Ordination of Individual Interest to General Interest

Espirit De Corps (can be achieved through unity of command)

Centralization & De-Centralization

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Techniques of Scientific Management

Time Study

It is a technique which enables the manager to ascertainstandard time taken for performing a specified job.

Every job or every part of it is studied in detail.

This technique is based on the study of an average workerhaving reasonable skill and ability.

Average worker is selected and assigned the job and thenwith the help of a stop watch, time is ascertained forperforming that particular job.

Taylor maintained that Fair days work should bedetermined through observations, experiment and analysisby keeping in view an average worker. Standard Time ×Working Hours = Fair Days Work

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Motion Study

In this study, movement of body and limbs required toperform a job are closely observed.

In other words, it refers to the study of movement of an

operator on machine involved in a particular task. The purpose of motion study is to eliminate useless

motions and determine the bet way of doing the job.

By undertaking motion study an attempt is made to knowwhether some elements of a job can be eliminated

combined or their sequence can be changed to achievenecessary rhythm.

Motion study increases the efficiency and productivity of workers by cutting down all wasteful motions.

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Functional Foremanship

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Taylor advocated functional foremanship forachieving ultimate specification. This techniquewas developed to improve the quality of work assingle supervisor may not be an expert in all theaspects of the work. Therefore workers are to besupervised by specialist foreman. The scheme of functional foremanship is an extension of principle pf specialization at the supervisory level.

Taylor advocated appointment of 8 foramen, 4 atthe planning level & other 4 at implementationlevel.

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The names & function of these specialist foremen are: -

Instruction card clerk concerned with tagging down of instructions according towhich workers are required to perform their job

Time & cost clerk is concerned with setting a time table for doing a job &specifying the material and labor cost involved in it.

Route clerk determines the route through which raw materials has to be passed.

Shop Disciplinarians are concerned with making rules and regulations to ensurediscipline in the organization.

Gang boss makes the arrangement of workers, machines, tools, workers etc.

Speed boss concerned with maintaining the speed and to remove delays in theproduction process.

Repair boss concerned with maintenance of machine, tools and equipments. Inspector is concerned with maintaining the quality of product.

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Standardization

It implies the physical attitude of products should be such that itmeets the requirements & needs of customers.

Taylor advocated that tools & equipments as well as workingconditions should be standardized to achieve standard output fromworkers.

Standardization is a means of achieving economics of production.

It seems to ensure -

± The line of product is restricted to predetermined type, form, design,size, weight, quality. Etc

±There is manufacture of identical parts and components.

± Quality & standards have been maintained.

± Standard of performance are established for workers at all levels.

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Differential Piece Wage Plan

This tech of wage payment is based on efficiency of worker.

The efficient workers are paid more wages than inefficient one.

On the other hand, those workers who produce less than standardno. of pieces are paid wages at lower rate than prevailing rate i.e.worker is penalized for his inefficiency.

This system is a source of incentive to workers who improving theirefficiency in order to get more wages.

It also encourages inefficient workers to improve their performance

and achieve their standards. It leads to mass production which minimizes cost and maximizes

profits.

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Other Techniques

Various other techniques have been developed tocreate ordeal relationship between management

and workers and also to create better

understanding on part of works.

Those includes use of instruction cards, strictrules & regulations, graphs, slides, charts etc, so

as to increase efficiency of workers.

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Criticism of Scientific Management

Although it is accepted that the scientificmanagement enables the management to putresources to its best possible use and manner, yetit has not been spared of severe criticism.

Workers Viewpoint

Unemployment - Workers feel that managementreduces employment opportunities from themthrough replacement of men by machines and by

increasing human productivity less workers areneeded to do work leading to chucking out fromtheir jobs.

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Exploitation - Workers feel they are exploited

as they are not given due share in increasing

profits which is due to their increased

productivity. Wages do not rise in proportion

as rise in production. Wage payment creates

uncertainty & insecurity (beyond a standard

output, there is no increase in wage rate).

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Monotony - Due to excessive specialization

the workers are not able to take initiative on

their own. Their status is reduced to being

mere cogs in wheel. Jobs become dull.

Workers loose interest in jobs and derive little

pleasure from work.

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Weakening of Trade Union - To everything is

fixed & predetermined by management. So it

leaves no room for trade unions to bargain as

everything is standardized, standard output,

standard working conditions, standard time

etc. This further weakens trade unions,

creates a rift between efficient & in efficientworkers according to their wages.

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Over speeding - the scientific management

lays standard output, time so they have to

rush up and finish the work in time. These

have adverse effect on health of workers. The

workers speed up to that standard output, so

scientific management drives the workers to

rush towards output and finish work instandard time.

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Employers Viewpoint

Expensive - Scientific management is a costly systemand a huge investment is required in establishment of planning dept., standardization, work study, training of

workers. It may be beyond reach of small firms. Heavyfood investment leads to increase in overhead costs.

Time Consuming - Scientific management requiresmental revision and complete reorganizing of organization. A lot of time is required for work, study,

standardization & specialization. During thisoverhauling of organization, the work suffers.

Deterioration of Quality

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Both the persons have contributed to development of science of management. The contribution of these two pioneers in the field of science of management has been reviewed as The work of Taylor & Fayol was, of course, especially complementary. They both realized that problem of personnel & its management at all levels is the key to individual success. Both applied scientificmethod to this problem that Taylor worked primarily from operative level, from bottom to upward,while Fayol concentrated on managing director and work downwards, was merely a reflection of their very different careers. They both differ from each other in following aspects: -

Taylor looked at management from supervisory viewpoint & tried to improve efficiency at operatinglevel. He moved upwards while formulating theory. On the other hand, Fayol analyzed managementfrom level of top management downward. Thus, Fayol could afford a broader vision than Taylor.

Taylor called his philosophy Scientific Management while Fayol described his approach as Ageneral theory of administration.

Main aim of Taylor - to improve labor productivity & to eliminate all type of waste throughstandardization of work & tools. Fayol attempted to develop a universal theory of management andstressed upon need for teaching the theory of management.

Taylor focused his attention on fact by management and his principles are applicable on shop floor.

But Fayol concentrated on function of managers and on general principles of management wheelcould be equally applied in all.

Similarity - Both emphasized mutual co-operation between employment and employees.

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Spheres of Human Activity

Fayols theory is more widely applicable than

that of Taylor, although Taylors philosophy

has undergone a big change Under influence

of modern development, but Fayols principles

of management have stood the test of time

and are still being accepted as the core of

management theory.

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Psychologists View Point

According to Psychologists, Taylor's study hadfollowing drawbacks: -

Ignores human factors - Considers them as

machines. Ignores human requirements, wantand aspirations.

Separation of Planning and Doing.

Dissatisfaction - Comparing performance withothers.

No best way - Scientific management does notgive one best way for solving problems.

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TM depends upon

Leadership

Motivation of employees

Appropriate management of technology

Goal is to create synergy among all factors

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Managerial Functions of TM

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chapter 1bit 4183

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