Unit I - Evolution of Management Practices

Definitions of Management
Management is defined by some famous management thinkers as follows:

Terry and Franklin- “Management is a distinct process consisting of activities

planning, organising, actuating and controlling, performed to determine and
accomplish stated objectives with the use of human beings and other
resources.”

Koontz and Weihrich- “Management is the process of designing and

maintaining an environment in which individuals, working together in groups,
efficiently accomplish selected aims.”

F. W. Taylor- “Management is an art of knowing what is to be done and seeing

that it is done in the best possible manner.”

What Is Industrial Management

Industrial management is the branch of engineering that deals with the
creation and management of systems that integrate people and materials and
energy in productive ways. It also applies scientific and engineering principles
to enhance the industrial infrastructure and processes. Industrial management
focuses on the design, construction, and management of industrial facilities,
especially in manufacturing and construction industries. It uses business concepts
to help in the optimization and management of production or other business
processes. Industrial management emerged in the 18th century with the rise of
factories and steam power.
Objectives of Management:

Management attempts to accomplish specific objectives which are the solicited

outcome of any action. They must be received from the fundamental view of the
business. In any business, there are several objectives and the administration has
to complete all objectives in an efficient and effective manner. Objectives can be
categorised into organisational objectives, social objectives and personal or
individual objectives.

Vital Objectives of Management:

 Organisational Objectives: Management is accountable for establishing

and attaining objectives for the company. It has to deliver a variety of
objectives in all operations contemplating the interest of all shareholders
including, stakeholders, consumers, the government and employees. The
principal objective of any company must be to use material and human
resources to the maximum potential benefit, i.e., to meet the financial
objectives of a firm. And, they are survival, profit and growth.
 Survival: The essential objectives of any industry is survival.
Management must attempt to assure the continuation of the business.
In order to survive, an industry must gain enough funds to meet the
costs that would be incurred.
 Profit: Poor survival is not sufficient for the industry. Management
has to make sure that the company earns the profit. Profit contributes
to a necessary catalyst for the sustained successful performance of
the firm. Profit is crucial for meeting the costs and uncertainties of
the business concern.
 Growth: A firm requires to add to its chances, in the long run, for
this it is necessary for the concern to develop. To prevail in the
business, management must utilise adequately the growth potential
of the firm.

 Social objectives: It includes the establishment of benefit for the

community. As a part of the community, every business whether it is a
trade or non-trading concern has a social responsibility to meet. This
applies to consistently generating financial value for many components of
society. This includes using environmentally beneficial technologies of
production, providing job opportunities to the disadvantaged sections of
the community and furnishing the primary facilities like crèches and
schools to employees.
 Personal Objectives: Establishments are made up of resources who
possess different backgrounds, experiences, objectives and personalities.
They all become part of the establishment to meet their several demands.
These differ from economic necessities such as ambitious perks and
salaries, social obligations such as equal attention and higher level
demands such as individual growth and progress.
Characteristics Of Management
Everything you need to know about the characteristics of management.
An efficient management can make the employees to work efficiently and
an inefficient management can break the employees and can bring
industrial unrest in the business organization.

This management has got immense importance now-a-days because of

increased trend towards standardization, automation, specialization and
computerization of the activities.
The important characteristics of management are:

1. Management is Intangible 2. Management is Goal Oriented 3.

Management is Pervasive 4. Management is Universal 5. Management is
a Social Process 6. Management is a Group Activity 7. Management is a
System of Authority 8. Management is Dynamic 9. Management is
Transferable 10. Management is Contingent in Nature 11. Synthesis 12.
Ever-Evolving Phenomenon 13. Multidisciplinary 14. Ephemeral

15. Management as a Career 16. Management as an Applied Science 17.

Divorced from Proprietorship 18. Management is a Profession 19.
Management is Decision-Making 20. Coordination is the Soul of
Management 21. Management is a Science as well as an Art 22.
Managing Results through Others.

Every human being has several wants and needs which cannot be
satisfied by himself. Therefore, he joins hands with his fellow-beings and
works together in order to satisfy his needs and wants in form groups and
organizations. Wherever there is an organized group of people working
towards a common goal, some type of management becomes essential. It
is the management which makes the people realize the objectives of the
group and direct their efforts towards the achievement of these
objectives.

It is the management which plans, organizes, co-ordinates and controls

the affairs of the organization. It brings the human and material resources
together and motivates the people for the achievements of the objectives
of the organization. Without management, resources of production
remain resources merely and never become production. The prosperity
failure of a business organization depends upon the optimum use of
various factors of production.

Characteristic # 1. Management is Intangible:

As has been pointed out by Terry, management is intangible. It cannot be
seen. It is an unseen force. However, its presence can be felt by the results
of its efforts in the form of production, sales and profits.

Characteristic # 2. Managements Goal-Oriented:

Management seeks to achieve goals. These goals may be economic or
non-economic. In a business organization, the primary goal is to produce
and distribute goods and services in order to earn profit. In a service
organization, the goal might be customer service (hospitals, educational
institutions, etc.).

Characteristic # 3. Management is Universal:

Management is an all-pervasive activity. The basic principles of
management are applicable in business as well as in other organizations.
These principles, however, need careful application depending on
situational demands.

Characteristic # 4. Management is a Social Process:

According to Newman, management is a social process because it deals
with people first. To make the best use of human efforts, managers have
to create close cooperation among employees in an organization. They
have to use resources for the benefit of society as a whole. They have to
look after the interests of employees, shareholders, customers, investors,
and community.
Characteristic # 5. Management is a Group Activity:
Management is concerned with getting things done through people.
People join groups in order to achieve results collectively Management
helps people in realizing their individual as well as group goals in a
coordinated manner.

Characteristic # 6. Management is a System of Authority:

A manager is supposed to get things done, rather than doing things
himself, by using authority. Authority is the right to give orders and the
power to obtain obedience from subordinates.

Characteristic # 7. Management is an Activity:

Management is a distinct activity (like playing, teaching, studying). It
can be studied, knowledge about it obtained, and skill in its applications
acquired.

Characteristic # 8. Management is Dynamic:

Management is a dynamic and growth-oriented function. It tries to
visualize problems before they turn into emergencies and takes suitable
steps. It tries to adapt itself to the environmental changes quickly It
proposes to take actions to make the desired results to come to pass.
According to Drucker, ‘Managers do not wait for the future; they make
the future’.

Characteristic # 9. Management is a Science as well as an Art:

Management is a systematized body of knowledge based on certain
principles capable of general application. The principles underlying time
and motion studies, morale, motivation, leadership can be applied by
persons working in various capacities. Art is the application of
knowledge and skills in order to achieve results. Management is an art
because it involves the use of know-how and skills, just like any other
art such as – music, painting, etc. In recent years, management has
developed into a separate, distinct discipline, receiving vital inputs from
subjects such as – psychology, sociology, anthropology, economics, etc.
Management is defined as the procedure of organising, directing, planning and
controlling the efforts of organisational members and of managing organisational
sources to accomplish particular goals.

 Planning is the purpose of ascertaining in advance what is supposed to be

done and who has to do it. This signifies establishing goals in advance and
promoting a way of delivering them effectively and efficiently. In an
establishment, the aim is the obtainment and sale of conventional Indian
handloom and workmanship articles. They trade furnishings, readymades,
household items and fabrics made out of classical Indian textiles.
 Organising is the administrative operation of specifying grouping tasks,
duties, authorising power and designating resources needed to carry out a
particular system. Once a definite plan has been set for the completion of
an organisational intent, the organising party reviews the actions and
resources expected to execute the program. It ascertains what actions and
resources are needed. It determines who will do a distinct job, where and
when it will be done.
 Staffing is obtaining the best resources for the right job. A significant
perspective of management is to make certain that the appropriate people
with the apt skills are obtainable in the proper places and times to achieve
the goals of the company. This is also called the human resource operations
and it includes activities such as selection, placement, recruitment and
coaching of employees.
 Directing involves directing, leading and encouraging the employees to
complete the tasks allocated to them. This entails building an environment
that inspires employees to do their best. Motivation and leadership are 2
chief elements of direction. Directing also includes communicating
efficiently as well as managing employees at the workplace. Motivating
workers means simply building an atmosphere that urges them to want to
work. Leadership is inspiring others to do what the manager wants them to
do.
 Controlling is the management operation of controlling organisational
achievement towards the accomplishment of organisational intentions. The
job of controlling comprises ascertaining criteria of performance,
computing the current performance, comparing this with organised rules
and taking remedial action where any divergence is observed. Here
management should ascertain what activities and outputs are important to
progress, how and where they can be regulated and who should have the
power to take remedial response.

Principles of management:
Principles of management is a broad and general guideline for managerial
decision making and behavior of employees towards organization.

Let’s examine each of the 14 Principles of Management in turn:

1. Division of Work

The division of work is also known as specialization. Specialization enables the

individual to acquire expertise on the intricacies unique to a task.

This saves time. As an example, consider how much longer things would take
without specialization. An employee could find themselves one day trying to
program the organization’s website. On another day they could find themselves
trying to collate the accounts. Thus, the familiarity that specialization brings
speeds up production.

2. Authority

Managers should have the appropriate authority to give orders and instructions.

Fayol stated that you must balance authority with responsibility. For example, if
a manager’s authority exceeded their responsibility, then they might misuse their
authority. Likewise, if a manager doesn’t have enough authority then they will
feel frustrated.

3. Discipline

For an organization to be successful everyone must pull in the same direction. To

achieve this discipline must be upheld.

But discipline is a two-sided coin. Employees will obey orders only if good
management is in place providing direction and leadership.

4. Unity of Command

Employees should have one and only one manager. There should be no extra lines
of command which can confuse employees, and slow down decisions and
production.

5. Unity of Direction

Unity of direction means that all employees performing similar activities should
be under the supervision of the same manager. It also means that the manager
should be operating from a single plan. This ensures teams are well coordinated
as everyone is pulling in the same direction.

As an example, in a modern organization, this means that all software

development activities, such as coding the organization’s website and updating
internal computer system, should ultimately be under the control of a single
manager.
6. Subordination of Individual Interests to the General Interest

You should not allow the interests of an individual employee to become greater
than the group’s interests. This principle applies to managers as well.

7. Remuneration

Remuneration includes financial and non-financial compensation. If an

organization wants motivated and productive employees, then they will need to
fairly remunerate those employees.

8. Centralization

Centralization means that decision making happens at the top of the

organizational tree, with the executive board. Decentralisation is the opposite. It
pushes decision making as far down the organizational chart as possible.

Fayol doesn’t state that you should have a centralized or decentralized

organization. But instead, that this decision should be deliberate and appropriate
to the operating needs of the organization.

This principle is also related to the principle of authority. For example, in a

completely centralized organization, it’s likely that employees will lack the
authority to perform their duties. But, in a completely decentralized organization
managers lack authority to control employees.

9. Scalar Chain

A scalar chain is also known as a chain of command. It corresponds to the formal

line of authority and communication within an organization.

Fayol states that you should structure your organization to meet the needs of the
organization. For example, if you need fast decision making then a flatter
organization is best. If you want to offer employees promotion opportunities then
a taller organization is best. The trick is to find the right balance.

10. Order

Order refers to keeping organized and having good plans in place so you avoid
duplication of work and waste.
Order encompasses many things, including having a clean and safe environment
for employees with everything in its place. It also means having resources
available for use in the right place at the right time. This includes employees,
capital, and other resources.

11. Equity
Managers should treat employees with equity. This means managers should treat
everyone fairly at all times. This means both being consistent in your praise and
consistent in your discipline. Treating employees fairly increases employee
retention.
12. Stability of Tenure of Personnel
It is important for employees to have job security. The reason for this is that a
lack of job security leads to actions that don’t align with the goals of the
organization.
You should also understand that it can take time for new employees to settle into
their new environment and learn how to do their job well.
Managers who understand this principle strive for ever-increasing employee
retention rates.
13. Initiative
You should encourage proactivity and the showing of initiative at all levels within
the organization.
Encouraging employees to use their initiative should be seen as a source of
strength for the organization. It also gives employees an increased sense of job
satisfaction.

The push to allow employees to use their initiative needs to be balanced with the
employee’s authority. The rules of equity should still apply.

14. Esprit de Corps (Team Spirit)

Management should strive to create a sense of shared goals and team spirit within
their teams. This includes encouraging employees to work to the best of their
abilities, as well as sharing what they have learned with others.
Scientific Management-Contribution of F. W. Taylor
How did current management theories develop?

People have been managing work for hundreds of years, and we can trace
formal management ideas to the 1700s. But the most significant
developments in management theory emerged in the 20th century. We owe
much of our understanding of managerial practices to the many theorists of
this period, who tried to understand how best to conduct business.

Historical Perspective
One of the earliest of these theorists was Frederick Winslow Taylor. He
started the Scientific Management movement, and he and his associates
were the first people to study the work process scientifically. They studied
how work was performed, and they looked at how this affected worker
productivity. Taylor's philosophy focused on the belief that making people
work as hard as they could was not as efficient as optimizing the way th e
work was done.

Frederick Taylor and Scientific Management

Understanding Taylorism and Early Management Theory

Taylor developed the body of knowledge what is now called ‘scientific
management’. Taylor investigated the effective use of human beings at the shop
floor level in the industrial organization.

He defined managing as the art of “Knowing exactly what you want men to do
and then seeing that they do it in the best and cheapest way”

For the doing work on the scientific way, he is often called the “Father of
Scientific Management.”
How did current management theories develop?

People have been managing work for hundreds of years, and we can trace formal
management ideas to the 1700s. But the most significant developments in
management theory emerged in the 20th century. We owe much of our
understanding of managerial practices to the many theorists of this period, who
tried to understand how best to conduct business.

Historical Perspective
One of the earliest of these theorists was Frederick Winslow Taylor. He started
the Scientific Management movement, and he and his associates were the first
people to study the work process scientifically. They studied how work was
performed, and they looked at how this affected worker productivity. Taylor's
philosophy focused on the belief that making people work as hard as they could
was not as efficient as optimizing the way the work was done.

In 1909, Taylor published "The Principles of Scientific Management." In this, he

proposed that by optimizing and simplifying jobs, productivity would increase.
He also advanced the idea that workers and managers needed to cooperate with
one another. This was very different from the way work was typically done in
businesses beforehand. A factory manager at that time had very little contact with
the workers, and he left them on their own to produce the necessary product.
There was no standardization, and a worker's main motivation was often
continued employment, so there was no incentive to work as quickly or as
efficiently as possible.

Taylor believed that all workers were motivated by money, so he promoted the
idea of "a fair day's pay for a fair day's work." In other words, if a worker didn't
achieve enough in a day, he didn't deserve to be paid as much as another worker
who was highly productive.

With a background in mechanical engineering, Taylor was very interested in

efficiency. While advancing his career at a U.S. steel manufacturer, he designed
workplace experiments to determine optimal performance levels. In one, he
experimented with shovel design until he had a design that would al low workers
to shovel for several hours straight. With bricklayers, he experimented with the
various motions required and developed an efficient way to lay bricks. And he
applied the scientific method to study the optimal way to do any type of workplace
task. As such, he found that by calculating the time needed for the various
elements of a task, he could develop the "best" way to complete that task.
These "time and motion" studies also led Taylor to conclude that certain people
could work more efficiently than others. These were the people whom managers
should seek to hire where possible. Therefore, selecting the right people for the
job was another important part of workplace efficiency. Taking what he learned
from these workplace experiments, Taylor developed four principles of scientific
management. These principles are also known simply as "Taylorism".

Salient Features of Scientific Management

Taylor conducted various experiments at the work place to find out how to human
beings could be mad more efficient by standardizing the work which as follow:-

i. Separation of Planning and doing

Taylor introduced the separation of Planning from actual doing we know that in
before Taylor’s Scientific management, a worker used to plan about how he had
to work and what instruments were necessary for doing that work for the reason
of being that this was creating lot of problems. Taylor insisted that planning
should be left to on the shoulder of supervisor’s and the workers should
concentrate on work what work has been assigned to him.

ii. Functional Foremanship

At above we have seen that all planning has been moved to shoulder of supervisor
shoulder so from ding resulted in the development of supervision system. For this
purpose. Taylor developed the concept of functional foremanship based on
specialization of functions.

iii. Job analysis

According to Taylor the best way of doing a job is one which requires the least
movement what is the mean of least movement, consequently less time and cost.
He analyzed the various jobs to find out the best way of doing things with the
help of time and motion and fatigue study.

 Time study involves the determination of time. A movement taken to complete.

 Motion study involves the stud of movements which involved in doing job.
 Fatigue study shows the amount and frequency of rest requirement in completing
the work.

iv. Standardization
 For this point, instruments and tools, period of work, amount of work, working
condition and cost of the production have to be standardized on the basis of
job analysis.

v. Scientific Selection and Training of Workers

 Taylor suggested that workers should be selected on scientific basis which
would their education, work experience, aptitude, physical, strength weakness
etc. Apart from selection given to them training to make them efficient and
effective.

vi. Financial Incentive

 Taylor also introduced this concept financial incentive to motivate workers to
put in maximum efforts in their works. He introduced different scheme to give
them incentive. He also suggested that wages should be based on individual
performance.

vii. Mental Revolution

 Taylor strongly suggested a change in the attitude of employers and
employees. Mutual conflict should be replaced by mutual cooperation which
is beneficial to both. Taylor argued mental revolution is the most important
features of scientific management because in its absence, no principle of
scientific management could be applied.

Four Principles of Scientific Management

Taylor's four principles are as follows:

1. Replace working by "rule of thumb," or simple habit and common sense,

and instead use the scientific method to study work and determine the most
efficient way to perform specific tasks.
2. Rather than simply assign workers to just any job, match workers to their
jobs based on capability and motivation, and train them to work at
maximum efficiency.
3. Monitor worker performance, and provide instructions and supervision to
ensure that they're using the most efficient ways of working.
4. Allocate the work between managers and workers so that the managers
spend their time planning and training, allowing the workers to perform
their tasks efficiently.

Critiques of Taylorism
Taylor's Scientific Management Theory promotes the idea that there is "one right
way" to do something. As such, it is at odds with current approaches such
as MBO (Management By Objectives), Continuous
Improvement initiatives, BPR (Business Process Reengineering), and other tools
like them. These promote individual responsibility, and seek to push decision
making through all levels of the organization.

The idea here is that workers are given as much autonomy as practically possible,
so that they can use the most appropriate approaches for the situation at hand.
(Reflect here on your own experience – are you happier and more motivated when
you're following tightly controlled procedures, or when you're working using
your own judgment?) What's more, front line workers need to show this sort of
flexibility in a rapidly-changing environment. Rigid, rules-driven organizations
really struggle to adapt in these situations.

Teamwork is another area where pure Taylorism is in opposition to current

practice. Essentially, Taylorism breaks tasks down into tiny steps, and focuses on
how each person can do his or her specific series of steps best. Modern
methodologies prefer to examine work systems more holistically in order to
evaluate efficiency and maximize productivity. The extreme specialization that
Taylorism promotes is contrary to modern ideals of how to provide a motivating
and satisfying workplace.

Where Taylorism separates manual from mental work, modern productivity

enhancement practices seek to incorporate worker's ideas, experience and
knowledge into best practice. Scientific management in its pure form focuses too
much on the mechanics, and fails to value the people side of work, whereby
motivation and workplace satisfaction are key elements in an efficient and
productive organization.
Henry Fayol Gantt contribution to
Management:
Gantt's contribution
Gantt is often seen as a disciple of Taylor and a promoter of the scientific school of
management. In his early career, with the influence of Taylor - and Gantt’s aptitude for problem
solving - resulted in attempts to address the technical problems of scientific management. Like
Taylor, Gantt believed that it was only the application of scientific analysis to every aspect of
work which could produce industrial efficiency, and that improvements in management came
from eliminating chance and accidents. Gantt made four individual and notable contributions:

1. The task and bonus system

Gantt’s task and bonus wage system was introduced in 1901 as a variation on
Taylor’s differential piece-rate system. With Gantt’s system, the employee
received a bonus in addition to his regular day rate if he accomplished the task
for the day; he would still receive the day rate even if the task was not completed,
whereas Taylor’s piece-rate system penalised employees for substandard
performance. As a result of introducing Gantt’s system, which enabled workers
to earn a living while learning to increase their efficiency, production often more
than doubled. This convinced Gantt that concern for the worker and employee
morale was one of the most important factors in management, and led him
eventually to part company from Taylor on the fundamentals of scientific
management.

2. The perspective of the worker

Gantt realised that his system offered little incentive to do more than just meet
the standard. He subsequently modified it to pay according to time allowed, plus
a percentage of that time if the task were completed in that time or less. Hence a
worker could receive three hours pay for doing a two-hour job in two hours or
less. But here Gantt brought in an innovation, by paying the foreman a bonus if
all the workers met the required standard. This constituted one of the earliest
recorded attempts to reward the foreman for teaching workers to improve the way
they worked. In Work, wages and profits Gantt wrote:
'Whatever we do must be in accord with human nature. We cannot drive people;
we must direct their development....the general policy of the past has been to
drive; but the era of force must give way to that of knowledge, and the policy of
the future will be to teach and lead, to the advantage of all concerned'.

Gantt was interested in an aspect of industrial education which he called

the 'habits of industry' - habits of industriousness and cooperation, doing work to
the best of one's ability, and pride in the quality as well as the quantity of work.

From his experience as a teacher, Gantt hoped that his bonus system would help
to convert the foreman from an overseer and driver of workers to a helper and
teacher of subordinates.

3. The chart
Gantt's Bar Chart started as a humble but effective mechanism for recording the
progress of workers towards the task standard. A daily record was kept for each
worker - in black, if he met the standard, in red, if he didn't. This expanded into
further charts on quantity of work per machines, quantity of work per worker,
cost control and other subjects.

It was whilst grappling with the problem of tracking all the various tasks and
activities of government departments on the war effort in 1917, that Gantt realised
he should be scheduling on the basis of time and not on quantities. His solution
was a bar chart which showed how work was scheduled over time through to its
completion. This enabled management to see, in graphic form, how well work
was progressing, and indicated when and where action would be necessary to
keep on time.

Gantt Charts have been applied to all kinds of projects to illustrate how
scheduling may be best achieved. To illustrate a Gantt Chart we take the mini-
project of redecorating an office with the steps of:

a) Establishing the terms of reference and standards of quality, cost and time.
b) Informing all appropriate personnel and customers.
c) Arranging alternative accommodation.
d) Preparing the office.
e) Redecorating.
The Gantt Chart provided a graphic means of planning and controlling work and
led to the development of PERT (Program Evaluation and Review Technique)
diagrams.

4. The social responsibility of business

After the death of Taylor in 1915, Gantt seemed to distance himself further from
the core principles of scientific management and extended his management
interests to the function of leadership and the role of the firm itself. As his
thinking developed, he believed increasingly that management had obligations to
the community at large, and that the profitable organisation had a duty towards
the welfare of society.

In Organizing for work, he argued that there was a conflict between profits and
service, and that the businessman who says that profits are more important than
the service he renders 'has forgotten that his business system had a foundation in
service, and as far as the community is concerned has no reason for existence
except the service it can render.' These concerns led him to assert that: 'the
business system must accept its social responsibility and devote itself primarily
to service, or the community will ultimately make the attempt to take it over in
order to operate it in its own interest.'

Gantt was hugely influenced by the events in Russia in 1917 and, in fear that big
business was sacrificing service to profit, he began to attack the profit system
itself, calling for public service corporations to ensure service to the community.

In perspective
Gantt’s contributions to the advancement of management science are of great
significance. Gantt was a prolific writer and speaker. He addressed the American
Society of Mechanical Engineers on a number of occasions. One of his papers
- Training workmen in habits of industry and cooperation (1908) - has been
noted by several commentators as giving a unique insight into the human relations
dimension of management at a time when scientific management was at its peak.

His approach to the foreman as teacher marks him as an early contributor to

human behavioural thought in a line which stretches back to Owen and forward
with Mayo to the present day. His approach to the duty of the firm towards society
also singles him out as one of the earliest spokesmen on the social responsibility
of business. But it is as the inventor of the Gantt Chart that he will be remembered.

It has been suggested that his thinking became somewhat vague shortly before
his death, as he began to situate the work of the firm in a broader, national and
political context. It seems that there was a struggle in his later years between
service and appropriate rewards on the one hand and socialist control policies on
the other.

Gantt never profited from his enduring innovation, and his books are illustrated
with examples of charts showing 'work in progress' rather than the lateral project
bar chart with which we are more familiar today. He did receive the Distinguished
Service Medal from the government, but it was a member of Gantt's consulting
firm, Wallace Clark, who popularised the idea of the Gantt Chart in a book which
was translated into eight languages.

H. B. Maynard Theory
(HUMAN EFFORT INDUSTRIAL ENGINEERING)
Methods Time Measurement (MTM) – Introduction:
Time and Motion Study and Formulas for Wage Incentives was authored by
Stewart McKinley Lowry, Harold Bright Maynard, Gustave James Stegemerten.
It is the first contribution of Maynard in the area of human effort industrial
engineering.

MTM is another important contribution of H.B. Maynard in human effort

industrial engineering.

METHODS PRODUCTIVITY ENGINEERING

Man has been looking for better and easier ways of performing the work that is
necessary to support his life and to increase his material well-being. At a group
level, if more is to be had by the members of the group, then more must be
produced. The factory system of organization has survived because in the long
run it has provided a higher standard of living for less work than any other system
yet devised. It provided the conditions and the incentives that cause large
numbers of people to devote their time and their energies to production under the
managerial guidance of factory managers.
INDUSTRY'S SEARCH FOR BETTER MANUFACTURING METHODS

In factories, since beginning, there has been more or less interest in better and
more economical manufacturing methods. Industries are turning more and more
to methods productivity engineering in their search for ever better manufacturing
methods.

HISTORY AND DEVELOPMENT OF METHODS ENGINEERING

The foundations for modern methods productivity engineering were laid by Dr.
Frederick W. Taylor, the father of scientific management, productivity
improvement, production management and industrial engineering and by Frank
B. and Lillian M. Gilbreth, pioneers in the field of productivity science of human
effort and the method to implement the science, motion study. In 1881
itself, Taylor was keenly aware of the fact that men in machine shop were by no
means producing as much as they could. They were intentionally producing less,
a practice termed soldiering. This appealed to him as being an economic waste,
for Taylor saw clearly that production was the foundation for material prosperity.
He therein fore set himself the task of developing a system that promotes
productivity and cost reduction in shops. He wanted managers to know the
maximum speed at which machines can be run to give quality output. Similarly,
he wanted to develop understanding of the work of operators, the maximum speed
at which they can work and produce quality output without stress and strain that
injure them and tire them (produce fatigue). Taylor evolved a simple principle
that forms the basis for the operation of modern industry. It was, "The greatest
production results when each worker is given a definite task to be performed in a
definite time and in a definite manner with reward associated maximum
production possible." The definite was determined by the stop-watch time-study
procedure that Taylor developed. A few years after Taylor began his work on the
development of systematic management using science as the foundation, a
building contractor named Frank Gilbreth decided to apply Taylor's thinking
to brick- layer's trade. Gilbreth developed science of operator motions and
developed the field of motion study. The Gilbreths began making detailed
laboratory studies of motions and methods and at length developed the
micromotion study procedure that forms the basis for methods time
measurement.
METHODS-TIME MEASUREMENT Methods-time measurement is a useful
tool for helping to engineer a method before beginning production. It is a useful
tool for certain kinds of methods work and meets a longfelt need. It is a
supplement to the other analysis procedures used in the past—process charts,
operation analysis, motion study, time study— and increases their objectivity. It
is an added tool in the kit of the methods productivity engineer, which will enable
him to handle certain types of work with greater facility than was possible
heretofore.

DEFINITION OF METHODS PRODUCTIVITY ENGINEERING

The methods productivity engineering procedure integrates all of the practical
devices that have been developed to bring about increased productivity into one
unified procedure. It includes several steps. Methods productivity engineering is
the technique that subjects each operation of a given piece of work to close
analysis in order to eliminate every unnecessary operation and in order to
approach the quickest and best method of performing each necessary operation;
it includes the standardization of equipment, methods, and working conditions; it
trains the operator to follow the standard method; when all this has been done, it
determines by accurate measurement the number of standard hours in which an
operator working with standard performance can do the job.

Methods productivity engineering will be successful, if the new method has

sufficient increase in income with which, a plan for compensating labor which
encourages the operator to attain or to surpass standard performance can be
devised.

The definition definitely states that the method should be developed,

standardized, and taught to the operator before the time for performing the task is
measured.

But for doing methods improvements also, time study is used. A decision as to
which is the better of two or more contemplated methods cannot be made in some
cases until the methods have been timed. Thus, methods and time measurement
are not separate activities. In reality they are inseparable. The method determines
the time, and the time establishes which is the best method. It is felt that the
methods-time measurement procedure which considers method and time
simultaneously solves the difficulty in cases where it is applicable.

THE GROWING EMPHASIS ON BETTER METHODS

As industry matures in any country, the opportunities for obtaining competitive
advantage tend to diminish. Competitive advantage may be sought in the area of
better manufacturing methods developed internally while adopting all
productivity improvement technologies available externally to maintain parity.
The methods productivity engineers have demonstrated repeatedly that the
method of performing a given operation can be improved again and again, as
fresh study and analysis are applied to it, periodically. Therefore, better methods
are an ever-present possibility. They offer an important source of competitive
advantage.

METHODS CORRECTION OR METHODS ENGINEERING

The method is carefully worked and implemented. It is corrected each time an
inefficiency is discovered. Certainly it would be impractical to expect that every
new job could be introduced into the shop in a state of unassailable perfection.
The limitations of human beings alone would prevent this happy condition, even
if new materials, processes, and tools were not constantly being invented. No
doubt, if the method is engineered by the combined efforts of all who contribute
to it in advance of the beginning of production and if it is thought through in detail
at the start, it is certain that better methods will result at the first implementation.
Organization
Definition:

An organization is a group of people who work together, like a neighborhood

association, a charity, a union, or a corporation. You can use the word
organization to refer to group or business, or to the act of forming or establishing
something.

What is Organizational Structure?

Organizational structure (OS) is the systematic arrangement of human
resources in an organization so as to achieve common business objectives.
It outlines the roles and responsibilities of every member of the organization
so that work and information flow seamlessly, ensuring the smooth
functioning of an organization.

 An organizational structure is the arrangement of an organization’s

workforce according to job responsibility and ranking.
 It ensures the proper functioning of an organization by establishing its chain
of command and workflow.
 The key elements of an organizational structure are work design,
departmentalization, delegation, hierarchy, and management ratio.
 The different types of organizational structure are hierarchical, flat,
flatarchy, functional, divisional, and matrix.
 Organizational structure enables quick decision-making and better
coordination and communication among employees resulting in enhanced
productivity.

Organizational Structure Explained

An organizational structure is the grouping of resources at different levels
depending on their responsibilities, power, and position. It helps various
departments in a company exchange data, coordinate, and work together to
achieve business goals.

A company devises an organizational structure to ensure that suitable

employees with the right set of skills occupy each position in the company.
The OS reveals the accountability and authority of each role. This removes
any uncertainty with regard to task performance and reporting and enhances
employee productivity.

A company must clearly define its objectives before creating an OS. Then,
group similar activities together to create departments, identify resources
for each unit, and establish a hierarchy of employees based on their duties.

Thus, an OS of a company:

 Forms the basis of employee reporting and relations

 Decides the post of employees in their administrative divisions
 Formulates a system of coordination and interdependence in an organization
 Establishes a well-defined workflow aimed at attaining organizational goals

Every OS contains the following six essential elements:

 Work design: It defines the nature and job description of a particular

position
 Administrative division: It involves the grouping of jobs into departments
to facilitate the coordination of work.
 Deputation: It means the power conferred to each employee and department
in the organization.
 Management ratio: It refers to the number of employees that are reporting
to a supervisor.
 Hierarchy: It creates various levels of authority arranged in the order of
delegated powers in the organization.
 Centralization or decentralization: It presents the mode of operation
followed in an organization.

Centralization or Centralized Organizational Structure

In this system, all the powers of decision-making rest at the topmost level
of the management. They take the shape of a pyramid with the leader or
executive team at the top responsible for making all decisions. Below them
are departmental managers overseeing supervisors. These supervisors lead
the workers at the lowest level in the hierarchy.

A centralized OS structure gives uniformity of policy when the operational

units face a conflict of objectives and strategic goals. Also, it speeds up the
decision-making process. This type of OS is prevalent in the retail industry.
Decentralization or Decentralized Organizational Structure
In this system of OS, an organization’s middle- and lower-level managers
make decisions as per the local culture or laws. This leaves the top
management to direct its attention to major decisions. This type of OS
flattens the hierarchy and empowers employees. It is widely prevalent in the
hotel sector.

The hotel sector has to comply with local laws to function properly in areas
of food and beverages, human resources (HR), and operations. Therefore,
decentralization is required because handling the guests, food, staff, and
processes with a centralized structure is impossible.

Types of Organizational Structure

Organizations implement different types of OS depending on the nature of
their business, needs of customers, types of products in demand, and
services required. Here are some of the popular organizational structures.

#1 – Hierarchical
This is a type of centralized organizational structure. There is a hierarchy of
workers with leaders at the top, the workers below, and supervisors placed
in between to get the work done. It is more of a linear OS where the
delegation of power emanates from the top management. It is a widely
popular form of OS and is seen in companies like Amazon.

This system concentrates decision-making at the top level. As a result, the

organization suffers from a lack of creativity as innovative ideas have to
work their way up through various levels of management. Also, each
employee communicates with their immediate superior and subordinates
only. This reduces coordination at various levels of power and departments.
Nevertheless, it is a salient feature of most government organizations.
#2 – Flat
This organizational structure is devoid of any hierarchy. No one commands
or controls the employees. Instead, decisions are made at every level of
management. Therefore, it is usually used in small companies with few
employees or new startups. However, with time and business growth, some
form of hierarchy creeps into the organization; otherwise, it may cause
chaos and inefficiency in the organization.

#3 – Flatarchy
It includes features of both hierarchical and flat OS. It is a temporary form
of OS that comes into existence only when a new product is created, a new
service is being tested, or when a company seeks to develop a new customer
support system.

By employing flatarchy, an organization can have specialized teams to

handle the development of new products or services more creatively and
efficiently. It is the best tool for an organization to tackle the change in
market or industry sentiments without creating capital-intensive
departments or reforming the OS.

#4 – Functional
The functional organizational structure creates a fixed set of departments
based on certain functions like HR, accounts, marketing, etc. It segregates
the workforce based on the requirements of each department. For example,
an accounting department will employ accountants and work to manage
the firm’s finances in the best possible manner.
Likewise, the HR department will look after the recruitment, payroll, and
administration of the firm. Moreover, the functional OS allows the
employees to work for a particular functional role without worrying about
the other departments. So, for example, a sales executive won’t be worried
about a firm’s accounting work and vice versa.
#5 – Divisional
This type of organizational structure comes into play when a firm has grown
exponentially to become a giant in its sector. For example, a giant clothing
company will require separate divisions based on customer groups, product
types, and geographical locations.

Hence, it will create a ladies’ fashion garment division, kids wear division,
men’s wear division, and affordable clothing division. Each division will
have its own production, marketing, human resource, IT, and sales
teams. In this manner, the company could manage the product line or
geography with all necessary functional resources.
#6 – Matrix
Under this organizational structure, there is no clear demarcation of roles
and responsibilities of resources. Resources may be shared across different
teams to ensure their maximum utilization. It is the least used OS as it is
quite complex and confusing and may prove counter-productive.

The employees have to play a dual role in this OS. For example, the
customer service representative in many banks also acts as their cashier. It
may reduce operating costs but badly affects the employee’s quality of work
and the firm’s efficiency. It is a form of decentralized OS.

Forms of Business Organisations

Business organisation Definition
A business organisation is an establishment intended to carry commercial
business by producing goods or services and meet the customers’ needs. Most of
the organisations have a standard such as social structure, purpose goals,
utilisation of resources, rules and regulations, etc.
The state law regulates the establishment of the business, and IRS law controls
the tax incurred for business. So, how much tax business should pay depends on
what form of business one owns.
Forms of Business Organisations
There are many forms in the business world, but the most common forms of
business organisation are.

 Sole Proprietorship – This is the traditional and popular form of business

organization. Its formation is simple, and the owner controls the complete
operations of a business and is liable for all financial burdens and debts. A
long as they are the only owner, they have the right to operate any category
of business. These businesses operations include.
1. Shop or retail business
2. Home-based company
3. Individual consulting firm
 Partnership – In partnership, two or more individuals come together to
start a business. Each individual gives their share of capital, property,
employment or experience, and expects some profits or losses from the
business share. All the partners must report their percentage of share on the
tax return even if it’s not distributed. In a partnership business, partners are
not defined as employees, so taxes are not retained from any distributions.
 Corporation – It is the most complicated business structures because it
adds more laws and tax claims. Corporations are established under the laws
of each state and are subjected to all the corporate income tax. All the
profits issued to shareholders as dividends are taxed as per the individual
tax rates on their private annual tax returns. Under this structure, the
corporation is displayed as an entity that manages the duties of a business.
Similar to a person, the corporation is taxed and held responsible if the
company is liable for any legal action. In simple words, if a business is
registered under a corporation, then the owner is not personally responsible
for its debts (however, this situation differs according to the state law).
 ‘S’ Corporation – The ‘S’ Corporation is a variety of a standard
corporation. The ‘S’ corporation authorise profit or losses to be transferred
to individual tax returns.
 Limited Liability Company (LLC) – This is a new form of business
structure and gained its popularity in the short-term because the owner has
limited individual liability for the debts and actions of the LLC. It had
similar features like a partnership such as administration flexibility and the
advantage of passing the taxation. The proprietor of LLC is known as
members as they can include many, corporations, additional LLC and
foreign entities.

Forms of Business Organisations

Forms of Business Or