INDUSTRIAL AND

MANAGERIAL ECONOMICS
ASSIGNMENT-1

SUBMITTED BY:

KUNAL RAWAT 474IC15

MUKUL GUPTA 484IC15

MOHIT SINGHAL 482IC15

 SCIENTIFIC MANAGEMENT

The term scientific management was first used in USA in 1910 by Louis Brandies. As a

process it was first visualized in UK in 1832 by Charles Babbage .

The utility of scientific methods to problems of management was first introduced by F.W.

Taylor in America(1869-1915), who is regarded as a father of scientific management.

Scientific management may be defined as the art of knowing exactly what is to be

done and the best way of doing it using the scientific methods.

SIGNIFICANCE OF SCIENTIFIC MANAGEMENT:

We can understand the significance of this theory much better if we go through Taylors

period clearly.

During those day, in many industries, the boss used to give the work, and the worker

had to follow blindly. Nobody knew whether the method was correct or if it could even

be questioned. There was no scientific mechanism to measure the work content. The

worker had no understanding about his job. The principle was: This is rule-thats all .

The worker was not given any training and he had to learn on his own way.

Therefore, there was no scope for improvement. The boss hardly used to put my effort or

attention to improve methods or the skill of the worker. The, worker when allotted a job had

to think or assume and perform the work. Further, there was no standard procedure either in

the allotment of work or in doing that work. Many times the worker did not even know what
work he had to do the next day morning, how much he had to do, and so on. The boss also did

not have any concrete plan for the allocation of the work in that it was not mentioned who

should do how much of work in a given day. Wage policy was not also rational and of work hard

for a long time but received less wages in his notion and could not say how he should be paid

more. The bosses use their bureaucratic brains to explain their wage structure or used the

rule of thumb. Nobody dared quisioning why not the other way.
PRINCIPLES OF SCIENTIFIC MANAGEMENT:

Scientific analysis of each element of work:

This means that efforts are used to find out :

What is to be done by a particular worker

How the worker has to do it

What equipment is necessary to do it

Standardisation of methods ,procedures ,equipment and tools:

This helps in reduction of time.

Helps in reduction of labour.

Helps in cost of Production.

Scientific selection of methods ,procedures, equipment and tools:

Selecting the best suited workers to perform the task

Attain high efficiency and productivity

It could eliminate the chances of misfits so as to have better working and to keep us

informed of the various developments

Scientific use of time and motion:

To determine Standard Work

For increasing rate of production the work of each person should be planned in

advance
Contribution of Fredrick Winslow Taylor:

Fredrick winslow taylor understood the situation and made the following
observations:

Jobs were done as a rule of thumb.

There was neither scientific methodology nor any justification in why a

particular method had to be carried out in that way only.

 Task to be performed was unplanned and not definite.

Time required for doing a job was not justified. No thoughts were given to

improve or simply the methods, nor were they questioned rationally.

There were many waste elements while working which were reducing the

efficiency. If these waste elements were eliminated, the efficiency could be

improved.

The efficiency was not recognized, and there was no scale to gauge the

performance.

No training was imparted to workers for their work improvement and for

eliminating the waste elements in their work.

Time required for doing a job was not justified. No thoughts were given to

improve or simply the methods, nor were they questioned rationally.

There was no defined work allotment to workers, i.e the selection of worker for

a task was haphazard, not certain, unclear, and chaotic. Nobody knew what work

was to be done the next day.

 There was a lot of management waste(waste elements in planning function and

managerial function).

Features of Scientific Management

This theory is the micro level study of management process.

It focuses on specialization because it suggests that the work should be

supervised by specialists of the field.

It is based on determining the definite task, definite time, and definite method.

It results in a fair day wages and hence the workers satisfaction.

It is mathematically and scientifically justified, and hence reasonable.

Remuneration is calculated based on the work carried out, i.e, according to

achievement.

It is task oriented because task is defined and result is measured on the amount

or part of the achievement for remuneration.

 This theory supports functional (or staff ) organization.

It aims at high productivity and change in management thinking.

It says that work is to be split into elements to measured and evaluated.

The theory is supported by FRANK and LILLIAN GIBRETH, H.L GANTT, LHC TIPETT

and others.

APPRECIATIONS OF SCIENTIFIC MANAGEMENT

1. Better manpower planning,

2. Improves productivity due to standardized work,

3. More satisfaction of worker with his improved wages.

4. Distinction between efficient and inefficient workers,

5. Top management could concentrate on development and standardization,

6. Systematic work culture,

7. Escapism is eliminated in the workers, and

8. Boondoggling is eliminated in managers.

Contribution of Henry Fayol :

In 1916 henry fayol described a number of principle of management in his book

general and industrial management .however the following 14 principles are

popularly known as the principles of organization.

1. Division of work: This is the principle of specialization. The division of work

should be according to work, department, job etc. Both technical and

managerial activities can be performed in the best manner only through the
 division of labor and specialization. It can ensure maximum productivity and

efficiency in all spheres of activity.

2. Authority and responsibility: The right to give order, the right to command, is

called authority. The obligation to accomplish objectives or expected results or

performance is called responsibility. They exist together and are interrelated. In

any management process, the declaration of power, proper utilization of

authority and fixation of responsibility are keys to success.

3. Discipline: Discipline is defined as the agreement on rules, regulations, and

procedures which are to be adhered to during the tenure of work, between the

employee and the employer. It is the core of the administration. The rules

,regulations, policies and procedures must be honored by all the members of

organization.

4. Unity of command: Each individual should receive orders and instructions only

from one superior and should be accountable to one superior only in order to

avoid confusion and conflict. Unity of command provides responsible

leadership, better guidance and direction, good coordination, and disciplined

performance.

5. Unity of direction: All members of an organization must work together to

accomplish common or same objectives. Their efforts should be directed

towards one common overall objective or goal. It refers to the job security of

the worker. The security of income and employment is a prerequisite to a sound

organization and management.

Contributions of Frank Gilberth:

Frank gilberth and his wife Lillian gilberth contributed in order to improve the

work methods and thus to discover the process chart .

In 1917 Gilberth defined a motion study as a science of eliminating wastefulness

resulting from unnecessary ill directed and inefficient motion.

He developed principles of motion economy . He Is regarded as the father of

the motion studies.

In 1921 he introduced the PROCESS CHART

PROCESS CHART

He developed the micromotipon study and invented cycle graph, chronocycle

graph and flow diagrams .

He identified THERBLIG the fundamental motions involved in doing an activity .

He developed the micro motion study , invented cycle graph, chrono- cycle graph

and flow diagrams.

 CONTRIBUTIONS OF ELTON MAYO :

1. Human Relations Approach:

Mayo is rightly called the father of human relations movement. His ideas were a milestone and

a turning point in human relations approach of the management. He recognized the importance

of human beings in management. He said that human beings are complex and influential input

into organizational performance. The social and psychological needs of human beings cannot be

ignored, if management wants to enhance productivity.

2. Non-Economic Awards:
The earlier assumption was that workers will work more if they are offered more monetary

incentives. Taylor was the main proponent of this approach. Elton Mayo said that the

techniques of economic incentives were not only inadequate but also unrealistic.

3. Social Man:

Mayo developed a concept of social man. He said that man is basically motivated by social

needs and obtains his sense of identity through relationships with others. He is more

responsive to the social forces of the informal group rather than managerial incentives and

controls. He also related productivity to a social phenomenon.

4. Organization as a Social System:

Mayo was of the view that informal relationships in the organisation are more effective than

formal relationships. People form informal groups to give a bent to their feelings and seek

guidance for action from such groups.

In Mayos words, An organization is a social system, a system of cliques, grapevines, informal

status systems, rituals and a minute of logical, non-logical and illogical behavior. He was of the

opinion that managers should maintain an equilibrium between the logic of efficiency

demanded by the formal organization. He thought that besides logic and facts people are also

guided by sentiments and feelings.

Hawthornes experiments were criticized for lack of scientific and vigorous research. The

experiments were too narrow to warrant generalizations. Despite these observations Mayos

work was a turning point in the development of management thought.

CONTRIBUTIONS OF HENRY L. GANTT:

1. H.l. Gantt worked under tayor and was his close associate.

2. He improved Taylor Diiferential piece rate wage system and introduced his task

and bonus paln.

3. He developed Gantt Chart whivh is still used as a scheduling technique to have

an immediate comparison between the planned work and the actual progress of

the work.
 4. It enables management to take corrective action if there is a significant

derivation.

REFERENCES

1.Industrial Engineering and management by N.V.S.Raju

2. Managerial Economics by OP Khanna