14 principles of managements,importance of managements,types of organization

1. Industrial Engineering
UNIT –I
Introduction to Industrial Engineering and Productivity
Prepared By
Prof. Shinde Vishal Vasant
Assistant Professor
Dept. of Mechanical Engg.
NDMVP’S Karmaveer Baburao Thakare
College of Engg. Nashik
Contact No- 8928461713
E mail:- shinde.vishal@kbtcoe.org
Website:- www.vishalshindeblog.wordpress.com
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 1

2. Industrial Engineering
• Industrial and systems engineering is concerned with the design,
improvement and installation of integrated systems of people,
materials, information, equipment and energy.
• It draws upon specialized knowledge and skill in the
mathematical, physical, and social sciences together with the
principles and methods of engineering analysis and design, to
specify, predict, and evaluate the results to be obtained from such
systems.
• The branch of engineering that deals with the creation and
management of systems that integrate people, materials and
energy in productive ways.
• Industrial engineers determine the most effective ways to use
the basic factors of production—people, machines, materials,
information, and energy -- to make a product or provide a
service.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 2

3. Broad areas of IE
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 3

4. Typical focuse areas includes
• Project Management
• Manufacturing, Production and Distribution
• Supply Chain Management
• Productivity, Methods and Process Engineering
• Quality Measurement and Improvement
• Program Management
• Ergonomics/Human Factors
• Technology Development and Transfer
• Strategic Planning
• Management of Change
• Financial Engineering
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 4

5. Objectives of Industrial Engineering
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 5

6. Application areas of IE
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 6

7. Events(History) in IE
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 7

8. Taylor’s contribution to management
• Frederick Winslow Taylor (20 March 1856-21 March 1915),
widely known as F. W. Taylor, was an American mechanical
engineer who sought to improve industrial efficiency.
• He is regarded as the father of scientific management, and
was one of the first management consultants.
• He is sometimes called as “Father of Scientific
Management”.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 8

9. • Scientific management
• It is the art of knowing what exactly you want from
your men to do & then seeing that it is done in best
possible manner.
• In simple words it is just an application of science to
management.
• Management theory by taylor
• Analyzing the work – One best way to do it.
• He is remembered for developing time and motion
study.
• He would break a job into parts and measure each of
100th of a minute.
• The efforts of his disciples made the industry to
implement these ideas.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 9

10. Taylors principles of management
• The four principles of management.
1. The development of a true science.
2. The scientific selection of the workman.
3. The scientific education and development of the
workman.
4. Intimate and friendly cooperation between the
management and the men.
• Taylor created planning departments, staffed them with
engineers, and gave them the responsibility to:
1. Develop scientific methods for doing work.
2. Establish goals for productivity.
3. Establish systems of rewards for meeting the goals.
4. Train the personnel in how to use the methods and
thereby meet the goals.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 10

11. Frank & Lillian Gilbreth
Contribution
 Time and motion efficiency experts
 Developed therbligs, breakdown of manual skills into 16
actions
 Frank was a lazy bricklayer looking for an easier way
and Lillian was a psychologist.
 Endorsed piece-work and suggested a higher rate per
unit if his directions were followed.
 Disagreed with Taylor’s idea that management should
choose which workers took which jobs.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 11

12. What is Management?
• Definition: Coordinating work activities so that
they are completed efficiently and effectively
with and through other people
• Efficiency: getting the most output from the
least input
• Effectiveness: completing activities so that the
organization’s goals are attained.
OR
• “Management is the process of designing and
maintaining an environment in which individuals
working together in groups, efficiently
accomplish selected item”
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 12

13. Henri Fayol
management strategy
• First came up with the five basic functions of
management— Planning, Organizing, Staffing,
Directing, Communicating, and Controlling
• First wrote that management is a set of
principles which can be learned.
• Developed Fourteen Principles of Management
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 13

14. Management functions (or) Process of
Management:
There are five types of functions in management. They
are,
• Planning- Defines the goal & establishing strategy.
• Organizing- Includes determining what task has to be
done, who is to do them.
• Staffing- Includes recruitment of people and training
them towards the project.
• Leading- Includes the motivating the employees and
directing the activities.
• Controlling- It is the process of monitoring the
performance.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 14

15. 14 Principles of Management
1. Specialization of labor. Specializing encourages
continuous improvement in skills and the development
of improvements in methods.
2. Authority. The right to give orders and the power to
exact obedience.
3. Discipline. No slacking, bending of rules.
4. Unity of command. Each employee has one and only
one boss.
5. Unity of direction. A single mind generates a single
plan and all play their part in that plan.
6. Subordination of Individual Interests. When at work,
only work things should be pursued or thought about.
7. Remuneration. Employees receive fair payment for
services, not what the company can get away with.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 15

16. 8. Centralization. Consolidation of management functions.
Decisions are made from the top.
9. Scalar Chain (line of authority). Formal chain of command
running from top to bottom of the organization, like military
10. Order. All materials and personnel have a prescribed place, and
they must remain there.
11. Equity. Equality of treatment (but not necessarily identical
treatment)
12. Personnel Tenure. Limited turnover of personnel. Lifetime
employment for good workers.
13. Initiative. Thinking out a plan and do what it takes to make it
happen.
14. Esprit de corps. Harmony, cohesion among personnel.
This is principle that “in union there is strength” as well as an
extension of the principle of unity of command, emphasizing the
need for teamwork and the importance of communication in
obtaining it.01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 16

17. Manager
Top managers
> relatively small group of executives
> manage the overall organization
> establish its goals, overall strategy, and operating policies
> represent the organization in external environment
> bear major responsibilities
Middle managers
> largest group of manager
> primarily responsible for implementing the policies and plans
> supervise and coordinate the activities of lower level managers.
First Line managers
> coordinate and supervise the activities of operating employees
> spend a large proportion of their time supervising subordinates
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 17

18. Manager
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 18

19. Organisation
“Organisation is refers to a social groups designed to achieve certain
goals. Organisation involves creating a structure of relationship among
people working for the desired results”.
OR
Organisation is a system of co-operative activities of two or more
persons
– CONCEPT OF ORGANISATION
• Organisation refers to the institution
• Organising is one of the functions of management
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 19

20. • According to keith Davis, “Organisation may be
defined as a group of individuals, large of small, that is
cooperating under the direction of executive leadership
in accomplishment of certain common object.”
• According to Chester I. Barnard, “Organisation is a
system of co-operative activities of two or more
persons.”
• According to Louis A. Allen, “Organisation is the
process of identifying and grouping the work to be
performed, defining and delegating responsibility and
authority, and establishing relationship for the purpose
of enabling people to work most effectively together in
accomplishing objectives.”
• According to Mooney and Railey, “Organisation is the
form of every human association for the attainment of a
common purpose.”
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 20

21. Organising process
 Determining, grouping and structuring the activities.
 Creating rules for effective performance at work.
 Allocation of necessary authority and responsibility.
 Determining detailed procedures and systems for different
problems areas such as coordination, communication
motivation etc.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 21

22. Characteristics / Features of Organisation
• Outlining the Objectives:
Born with the enterprise are its long-life objectives of
profitable manufacturing and selling its products. Other
objectives must be established by the administration
from time to time to aid and support this main
objective.
• Identifying and Enumerating the Activities:
After the objective is selected, the management has to
identify total task involved and its break-up closely
related component activities that are to be performed by
and individual or division or a department.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 22

23. • Assigning the Duties:
When activities have been grouped according to similarities
and common purposes, they should be organized by a
particular department. Within the department, the functional
duties should be allotted to particular individuals.
• Defining and Granting the Authority:
The authority and responsibility should be well defined and
should correspond to each other. A close relationship
between authority and responsibility should be established.
• Creating Authority Relationship:
After assigning the duties and delegations of authority, the
establishment of relationship is done. It involves deciding
who will act under whom, who will be his subordinates,
what will be his span of control and what will be his status
in the organisation. Besides these formal relationships,
some informal organizations should also be developed.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 23

24. Importance / Need / Advantages / Significance of
Organisation
1. It Facilitated Administration and management:
Organisation is an important and the only tool to
achieve enterprise goals set b administration and
explained by management. A sound organisation
increases efficiency, avoids delay and duplication of
work, increases managerial efficiency, increases
promptness, motivates employees to perform their
responsibility.
2. It Help in the Growth of Enterprise: Good
organisation is helpful to the growth, expansion and
diversifications of the enterprise.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 24

25. 3 It Ensures Optimum Use of Human Resources:
Good organisation establishes persons with different
interests, skills, knowledge and viewpoints.
4 It Stimulates Creativity:
A sound and well-conceived organisation structure is the
source of creative thinking and initiation of new ideas.
5 A Tool of Achieving Objectives:
Organisation is a vital tool in the hands of the management
for achieving set objectives of the business enterprise.
6 Prevents Corruption:
Usually corruption exists in those enterprises which lack
sound organisation. Sound organization prevents corruption
by raising the morale of employees. They are motivated to
work with greater efficiency, honesty and devotion.
7 Co-ordination in the Enterprises:
8 Eliminates Overlapping and Duplication or work:
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 25

26. Principles of organisation
• Consideration of Objectives
• Combination of Line and Staff Functions
• Division of Labour or Specialisation
• Departmentation
• Decentralisation
• Principle of Scalar Chain
• Principle of Span of control
• Principle of Unity of Command
• Principle of Balance
• Principle of Flexibility
• Authority and Responsibility
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 26

27. • The Principle of Objective
Every enterprise, big or small, prescribes certain basic objectives.
Organisation serves as a tool in attaining these prescribed objectives
• Principle of Specialization
Precise division of work facilitates specialization. According to this
principles division of work between the employees must be based on
their ability, capability, tasks, knowledge and interest. This will
ensure specialization and specialization will lead to efficiency,
quality and elimination of wastage etc.
• The Scalar Principle
This principle is sometimes known as the ‘chain command’. There
must be clear lines of authority running from the top to the bottom
of the organisation.
• The Principle of Authority
It is the tool by which a manager is able to create an environment
for individual performance.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 27

28. • The Principle of Unity of Command
One subordinate should be kept in the supervision of one boss only.
This principle avoids the possibility of conflicts in instructions and
develops the feeling of personnel responsibility for the work.
• The Principal Span of Control
It is also known as ‘span of management’, ‘span of supervision’ or
‘levels of organisation’, etc.
• The Principle of the Unity of Direction
The basic rationale for the very existence of organisation is the
attainment of certain objectives. Major objective should be split into
functional activities and there should be one objective and one plan
for each group of people.
• The Principle of Balance
In every organisation structure there is need for balance. For
effective grouping and assigning activities, this principle calls for
putting balance on all types of factors human, technical as well as
financial.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 28

29. Elements of Organisation
• Organizational design is engaged when managers develop
or change an organization's structure. Organizational Design
is a process that involves decisions about the following six
key elements:
I. Work Specialization
- Describes the degree to which tasks in an organization
are divided into separate jobs.
- The main idea of this organizational design is that an
entire job is not done by one individual.
- It is broken down into steps, and a different person
completes each step. Individual employees specialize in
doing part of an activity rather than the entire activity.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 29

30. II.Departmentalization
• The process of grouping the activities is commonly known as
“Departmentation”
• Departmentation is useful for specialization and fixation of
responsibility
• Patterns used in Departmentation OR
Common forms of departmentalization
 Departmentation By Function
 Departmentation by Product or services
 Grouping by location or Territories
 Departmentation by time
 Grouping by process and equipment
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 30

31. 1.Functional Departmentalization
• it groups jobs by functions performed. It can be used in all
kinds of organizations; it depends on the goals each of them
wants to achieve.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 31

32. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK
2. Product Departmentalization.
- It groups jobs by product line. Each manager is responsible of an area within the
organization depending of his/her specialization
32

33. 3. Geographical Departmentalization/Grouping by
location or Territories
- It groups jobs on the basis of territory or geography.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 33

34. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 34

35. 4. Process Departmentalization./Grouping by
process and equipment
It groups on the basis of product or customer flow.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 35

36. 5.Customer departmentalization
• It groups on the basis of common customers
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 36

37. III. Chain of command
It is defined as a continuous line of authority that
extends from upper organizational levels to the lowest
levels and clarifies who reports to whom. There are three
important concepts attached to this theory:
• Authority: Refers to the rights inherent in a managerial
position to tell people what to do and to expect them to
do it.
• Responsibility: The obligation to perform any assigned
duties.
• Unity of command: The management principle that
each person should report to only one manager.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 37

38. IV. Span of Control
It is important to a large degree because it determines
the number of levels and managers an organization has.
Also, determines the number of employees a manager
can efficiently and effectively manage.
V. Formalization
It refers to the degree to which jobs within the
organization are standardized and the extent to which
employee behavior is guided by rules and procedures.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 38

39. Centralization & Decentralization
• Centralized organization: the authority to make
important decisions is retained by top level managers
• Decentralized organization: the authority to make
important decisions is delegated to managers at all
levels in the hierarchy
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 39

40. Key points of Centralization
• Centralization can facilitate coordination.
• Centralization can help ensure that decisions are
consistent with organizational objectives.
• Centralization can avoid duplication of activities by
various subunits within the organization.
• By concentrating power and authority in one
individual or a management team, centralization can
give top-level managers the means to bring about
needed major organizational changes.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 40

41. Key points of Decentralization
• Top management can become overburdened when
decision-making authority is centralized.
• Motivational research favors decentralization.
• Decentralization permits greater flexibility—more
rapid response to environmental changes.
• Decentralization can result in better decisions.
• Decentralization can increase control.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 41

42. Limitations of Centralization
• Development of low level managers are hampered.
Opportunity given to exercise initiative and judgment
is negligible .
• It is a costly affair and delays decision making .
• It creates problems of effective communication
• No scope of specialization as a person may have to
look into many things
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 42

43. Limitations of Decentralization
• It creates problems in coordination between different units
of the organization.
• May result in higher administrative expenses as qualified
managers a needed for different divisions
• Due to different policies and procedures of each unit in a
decentralized organization inconsistencies may arise in
organizational activities
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 43

44. What is organizational structure ?
• Organizational structure is a system used to define a
hierarchy within an organization.
• It identifies each job, its function and where it reports to
within the organization.
• This structure is developed to establish how an
organization operates and assists an organization in
obtaining its goals to allow for future growth.
• The structure is illustrated using an organizational chart.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 44

45. Why do we need organizational structure ?
• Evaluating Employee Performance
• Achieving Goals
• Function
• Communication
• Prevention/Solution
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 45

46. Organizational structure
Types of organizational structure
(i) Line/military/scaler organizational structure.
(ii) Staff or functional authority organizational structure.
(iii) Line and staff organizational structure.
(iv) Committee organizational structure.
(v) Divisional organizational structure.
(vi) Matrix organizational structure
(vii) Project organizational structure.
(viii) Hybrid organizational structure.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 46

47. Line/military/scaler organizational structure
• It is also known as scalar, military, or vertical
organization and perhaps is the oldest form
1. Pure line Organization
2. Departmental Line Organization
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 47

48. • Characteristics:
• Line authority and instructions are vertical, that is, they flow
from the top to the bottom.
• The unity of command is maintained in a straight line.
• All persons at the same level of organization are independent of
each other.
• This structure specifies responsibility and authority for all the
positions limiting the area of action.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK
• Demerits:
• Lack of Specialisation
• Absence of Conceptual
Thinking
• Autocratic Approach
• Problems of coordination
Suitability:-
It is suitable to small – scale organizations where the number of subordinates is quite
small.
•Merits:
• Simplicity
• Discipline
• Prompt Decisions
• Orderly Communication
• Easy Supervision & Economical
48

49. Functional organizational structure
• Functional structure is created by grouping the activities on the
basis of functional required for the achievement of organizational
objectives.
• For this purpose all the functions required are classified into
basic, secondary and supporting functions.
• Features:
• The whole activities of an organization are divided into various
functions
• Each functional area is put under the charge of one executive
• For any decision, one has to consult the functional specialist
• Limited span of control is there.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 49

50. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK
• Merits:
• High Specialisation
• Clarity in functioning
• No duplication
• Satisfactions
• Control and Coordinate
• Demerits:
• Calls for more coordination
• Clear line of authority
• Slow decision making
Suitability:
The establishment of functional organisation structure becomes
necessary as a small organisation grows and business activity
becomes more and more complete
50

51. Functional organizational structure
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 51

52. Line and staff organizational structure
• Characteristics:
• It refers to a pattern in which staff specialists advise line
managers to perform their duties.
• Line people will give advices
• The staff people have the right to recommend, but have no
authority to enforce their preference on other departments
• Features:-
• This origin structure clearly distinguishes between two aspects of
administration viz., planning and execution.
• Staff officers provide advice only to the line officers; they do not
have any power of command over them.
• The staff supplements the line members.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 52

53. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 53

54. • ADVANTAGES:-
• It adds functional specialists to the pure line organisation and thus
aims at combining the merits of the two.
• It brings expert knowledge to bear upon management.
• Functional specialists provide expert advice to the management
on wide-ranging matters.
• It provides for better placement and utilization of personnel and
leads to more skill development
• DEMERITS:-
• The line and staff relationship often lead to many frictions and
Jealousies
• Line mangers may depend too much on staff experts and thus
lose much of their judgment and initiatives
• The staff experts may remain ineffective because they do not get
the authority to implement their recommendation.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 54

55. Matrix organizational structure
• Matrix organization structure is essentially a violation of unity
of command
• Matrix structure is the realization of two-dimensional structure
which emanates directly from two dimensions of authority.
• In matrix organization structure, a project manager is
appointed to co-ordinate the activities of the project.
• Personnel are drawn from their respective functional
departments.
• Each functional staff has two bosses his administrative head
and his project manager.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 55

56. Design of Matrix organizational structure
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 56

57. • Merits:-
• It offers operational freedom & flexibility
• It focuses on end results.
• It maintenance professional Identity.
• It holds an employee responsible for management of resources
• Demerits:-
• It calls for greater degree of coordination,
• It violates unity of command.
• Difficult to define authority & responsibility.
• Employee may be de motivated.
• Suitability
• It can be applicable where there is a pressure for dual focus,
pressure for high information processing, and pressure for shred
resources.
• Ex:- Aerospace, chemicals, Banking, Brokerage, Advertising etc.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 57

58. Committee organizational structure.
• A committee does not represent a separate type of organization
like line and staff, or functional.
• A committee may be defined as a group of people performing
some aspects of Managerial functions.
• Definitions:
• “A committee consists of a group of people specifically
designated to perform some administrative work”
W.H. Newman
• “ A committee is a body of persons appointed or elected to meet
on an organised basis for the consideration of matters brought
before it”. Allen
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 58

59. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 59

60. Committee organizational structure
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK
MERITS DEMERITS
• Pooling of Knowledge
• Effective co-ordination is available
• Effective Communication
• Motivation through participation of
employees
• Slow decisions
• Most Expensive
• Difficult to maintain secrecy
• Compromise
60

61. Project organizational structure
• A project organization is a temporary organization
designed to achieve specific results by using teams of
specialists from different functional areas in the
organization.
• The project team focuses all its energies, resources and
results on the assigned project.
• Once the project has been completed, the team members
from various cross functional departments may go back to
their previous positions or may be assigned to a new
project.
• Some of the examples of projects are: research and
development projects, product development, construction
of a new plant, housing complex, shopping complex,
bridge etc.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 61

62. • Importance of Project Organizational Structure:
Project organizational structure is most valuable when:
(i) Work is defined by a specific goal and target date for completion.
(ii) Work is unique and unfamiliar to the organization.
(iii) Work is complex having independent activities and specialized
skills are necessary for accomplishment.
(iv) Work is critical in terms of possible gains or losses.
(v) Work is not repetitive in nature.
• Characteristics of project organization:
1. Personnel are assigned to a project from the existing permanent
organization and are under the direction and control of the project
manager.
2. The project manager specifies what effort is needed and when work
will be performed whereas the concerned department manager
executes the work using his resources.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 62

63. 3. The project manager gets the needed support from production,
quality control, engineering etc. for completion of the project.
4. The authority over the project team members is shared by project
manager and the respective functional managers in the permanent
organization.
5. The services of the specialists (project team members) are
temporarily loaned to the project manager till the completion of the
project.
6. There may be conflict between the project manager and the
departmental manager on the issue of exercising authority over team
members.
7. Since authority relationships are overlapping with possibilities of
conflicts, informal relationships between project manager and
departmental managers (functional managers) become more
important than formal prescription of authority.
8. Full and free communication is essential among those working on
the project.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 63

64. Project organizational structure
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 64

65. Divisional Organizational Structure:
• In this type of structure, the organization can have
different basis on which departments are formed.
They are:
(i) Function (ii) Product (iii) Geographic territory,
(iv) Project and
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 65

66. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 66

67. Hybrid organizational structure
• A structure adopting both functional and divisional
structures at the same management levels.
Advantages:
• Alignment of corporate and divisional goals
• Functional expertise and/or efficiency
• Adaptability and flexibility in divisions
Disadvantages:
• Conflicts between corporate departments and divisions
• Excessive administration overhead
• Slow response to exceptional situations
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 67

68. Organizational Chart
Organizational chart is a line drawing that shows how
the parts of an organization are linked.
The organization chart establishes the following:
• Formal lines of authority—the official power to act
• Responsibility—the duty or assignment
• Accountability—the moral responsibility
01/01/2017 68PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

69. Types Of Organizational Charts
1. Vertical charts
• It shows high-level management at the top with formal lines of
authority down the hierarchy, are most common.
2. A left-to-right (horizontal) charts:
• It shows the high-level management at the left with lower positions
to the right. Shows relative length of formal lines of authority,
helps simplify understanding the lines of authority and
responsibility.
3. Circular charts
• It shows the high-level management in the center with successive
positions in circles. It shows the outward flow of formal authority
from the high-level management. It reduces status implications.
01/01/2017 69PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

70. Vertical Chart
01/01/2017 70PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

71. Circular Chart
01/01/2017 71PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

72. A Left-to-right (Horizontal) Chart
01/01/2017 72PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

73. Advantages of an Organizational Chart:
1. It provides a quick visual illustration of the organizational structure.
2. It provides help in organizational planning.
3. It shows lines of formal authority, responsibility and accountability.
4. It clarifies who supervises whom and to whom one is responsible.
5. It emphasizes the important aspect of each position.
6. It facilitates management development and training.
7. It is used to evaluate strengths and weakness of current structure.
8. It provides starting points for planning organizational changes.
9. It describes channels of communication.
Disadvantages:
1. Charts become outdated quickly.
2. Does not show informal relationship.
3. Does not show duties and responsibilities.
4. Poorly prepared charts might create misleading effects.
01/01/2017 73PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK

74. Productivity
For any type of organization
Productivity = Output
Input
Definition: Productivity is the relationship
between the outputs generated from a system and
the inputs that are used to create those outputs.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 74

75. Factors affecting Productivity
• Standardization
• Technology
• Use of Internet, fax machines, e-mail,
computerized billing, software
• Searching for lost or misplaced items
• Scrap rates
• Labor turnover, layoffs, new workers
• Safety
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 75

76. • Methods
• Design of the workspace
• Incentive plans that reward productivity
• Capacity utilization
• Location
• Layout
• Inventory
• Scheduling
• Shortage of IT workers and other technical workers
• Equipment breakdowns
• Part and material shortages
• Inadequate investment in training & education of the
employees
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 76

77. Types of productivity
Partial Productivity Measure
Partial Productivity is the ratio of output to one class of input.
Labour productivity = output / labour input
Total-factor Productivity Measure
• Total-factor Productivity is the ratio of net output to sum of
associated labour and captial (factor) inputs.
total-factor productivity = net output / (labour and capital input)
Total Productivity Measure
• Total Productivity is the ratio of total output to the sum of all input
factors.
Total productivity = total output / total input
Both the output and input(s) are expressed in real or physical
terms by being reduced to constant rupees of a reference period
(base period).
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 77

78. Example
For a company XYZ, the total inputs and outputs have been
converted in to money value and are given below. calculate
total productivity and partial productivity for different
categories of inputs.
• Material input= Rs 20,000
• Human input= Rs 30,000
• Energy input= Rs 10,000
• Capital input= Rs 3,00,000
• Miscellaneous input= Rs 50,000
• Total output = Rs 5,00,000
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 78

79. Total productivity = total output/ total input
= 5,00,000/4,10,000 =1.219
Partial productivities
Material productivity = total output/ material input
= 5,00,000/20,000 =25
Human productivity= total output/human input
= 5,00,000/30,000=16.66
Energy productivity = total output/energy input
= 5,00,000/10,000=50
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 79

80. • Common misused of the term Productivity
• XYZ electronic company produced 10000
calculators by employing 50 people at 8 hours/day
for 25 days.
• Production = 10000 calculators
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK
Productivity (of labour) = output / labour input
= 10,000/ (50x8x25=10,000)
= 1 calculator per man-hours
This company increased its production to 12000 calculators by hiring 10
additional workers at 8 hours/day for 25 days.
Production = 12000 calculators
Productivity (of labour) = 1 calculator per man-hours
Production is concerned with the activity of producing goods and/or services.
An increased production does not necessarily mean increased productivity
80

81. Productivity Improvement Methods
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 81

82. 01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 82

83. Productivity Improvement Methods
• Productivity improvement techniques can be applied
effectively in enterprises of any size, from one person
companies to corporations with thousands of staff.
A) KAIZEN Techniques:
• Kaizen (Continuous improvement) is a management
supported employee driven process where, employees
make a great number of continuous improvement
efforts.
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 83

84. B) Total Productive maintenance (TPM):
• TPM is keeping machines in good working condition
through systematic maintenance of equipment so that they
fail less frequently and production process continues
without interruption.
C) Just In Time:-
• JIT is a management philosophy aimed at eliminating
waste from every aspect.
• of manufacturing and its related activities. The term JIT
refers to producing only what is needed, when it is needed
and in needed quantity.
• The aim of JIT in a factory is to reduce lead times
minimize inventory reduce the defect rate to zero and
accomplish all of the above at minimum cost
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 84

85. D)Kanban:-
• Kanban is a manual production scheduling technique
controlled by a process or machine operator.
• Kanban means card in Japanese, is attached to given
number of parts or products in the production line
instructing the delivery of given quantity.
• The kanban card after all parts/products have been
used up is returned by the operator to its origin.
Production is controlled through demand originating
from external customer
01/01/2017 PROF.V.V.SHINDE NDMVP'S KBTCOE NASHIK 85