WACHEMO UNIVERSITY

College of Engineering and Technology

Department of Electro-Mechanical Engineering

Industrial Management and Engineering Economics (IMEE)

Compiled by Dagim Asegid (M.Sc. MEng.), April 2023

Chapter One

Basic Management Concepts and

Industrial Organization
 Chapter One
Introduction

 Organizations set a variety of goals and direct their energies and resources to achieve them;

All organizations also have resources that can be used to meet there objectives;

 Such resources can be classified into two categories: human and non-human resources;

 Therefore, management is the force that unifies these resources;

 Chapter One
Management as a Unifying Force

 Management is thus the process of bringing human & nonhuman resources together and
coordinating them to accomplish organizational goals.
 Chapter One
Organizational Resources
 Human
 Skills

 Knowledge

 Attitude

 Non-Human
 Capital

 Land

 Plant and Equipment

 Technology

 Time
 Chapter One
Definitions of Management

 Management: is the act of getting people together to accomplish desired goals and

objectives using available resources efficiently and effectively;

 It is the act of deploying (bring in to effective action) and manipulating human

resources, financial resources, technological resources, and natural resources.

 Chapter One
 Management is both science and art;

 It is a science in the sense, that it adopts a systematic approach through knowledge acquired
by continuous and dynamic efforts;

 It is an art

 As it is an application of some skills to achieve the desired results;

 Because it utilizes the talent of the people; and

 Because it manages human beings.

 Chapter One
Basics to Industrial Management

 Industrial management deals with the creation and management of systems that integrate
people, materials, and energy in a productive way for the production of economic goods/
services.
 Chapter One
 Industries can be classified on the basis of raw materials, size, and ownership.

 Raw Materials: agriculture based, Marine based, Mineral based, Forest based, etc.

 Size: based on amount of capital invested, no. of people employed, or volume of

production.

 Ownership: private, state owned or public, joint, or co-operative;

 Industry is also often classified into three sectors:

 primary or extractive,(mining, agriculture, fishing)

 secondary or manufacturing,

 tertiary or services; (Medical providers, financial services, personal trainers)

 Chapter One
Managerial abilities
 Ability to plan

 Integrity (Honesty + Reliability)

 Technical skill

 Intelligence

 Initiative

 Resourcefulness

 Judgment

 Ability to organize

 Tactfulness

 Reliability (consistency)
 Chapter One
Management applies to:
Chapter One
Functions of Management
 Chapter One
 Planning is the process of setting objectives for the future and developing courses of action to
accomplish them.

 It is a systematic activity which determines when, how and who is going to perform a specific
job.

 Planning is done in light of budgetary constraints, personnel requirements, and other factors.

“Well plan is half done”

“Failing to plan means planning to fail”

 Chapter One

 Organizing is the process of identifying and grouping the work to be performed, defining and

delegating responsibility and authority in order for accomplishing objectives'.

 Organizing is the process of arranging people and physical resources to carry out plans and

accomplish organizational objectives.

 I.e., through organizing, managers must develop a system in which people can perform tasks

that lead to the desired results.

 Chapter One

 Staffing is the process of matching jobs and people;

 It involves the recruitment, selection, development, and retention of employees with

appropriate qualifications;

 Staffing includes: HR planning, announcing vacant positions, receiving applications,

preliminary and final interviewing, testing, medical examination, and final selection and

orientation.
 Chapter One
 Leading is the act of motivating or causing people to perform certain tasks intended to

achieve the specific objectives.

 It is developing relationships that ensure adequate communication with subordinates.

 It also includes managing personal conflict, helping employees deal with changing

conditions, and disciplining employees.

 To be effective leaders, managers need to understand individual and group behaviour,

techniques of motivation, and effective styles of leadership.

 Chapter One

 Controlling is the process by which managers determine whether organizational objectives

are achieved and whether actual operations are consistent with plans.

 It is the continual comparison of performance with goals and taking corrective action, if

needed.

 Three things that require the most attention in controlling: product quality, worker

performance, & cost;

 Chapter One
Management Roles

Carrying out management functions requires a manager to behave in a certain way- to fill

certain management roles.

1. Interpersonal Roles

1.1. Figurehead: As a manager, you have social, ceremonial and legal responsibilities. You're

expected to be a source of inspiration. People look up to you as a person with authority, and as a

figurehead. In this light, the manager is seen as a symbol of status and authority (E.g. Dr. Arega

– Prior CEO, MIDROC Investment Group)

 Chapter One

1.2. Leader:

 Structuring and motivating subordinates, overseeing their progress, promoting and

encouraging their development, and balancing effectiveness.

1.3. Liaison: representing their organization in different occasions.

 Maintain information links both inside and outside organization;

 Chapter One

2. Informational Roles

 A second set of managerial roles relates to receiving and transmitting information;

These informational roles require managers to serve as:

 Monitor, (a manager will seek and receive information about both internal and external events)

 Disseminator (process of transmission is the dissemination role, passing on information)

 Spokespersons (A manager has to give information concerning the organization to staff and to outsiders)
 Chapter One
3. Decision Roles

 The third set of managerial roles involves decision making, or decisional roles;

As decision maker, a manager becomes

 Entrepreneur,

 Disturbance handler,

 Resource allocator, &

 Negotiator
 Chapter One
Management Hierarchy

 Although all managers may perform the same basic duties and play similar roles, the nature
and scope of their activities differ;

 Hence, three distinct levels of management are available;

 Chapter One
1. Top Management

 Made up of individuals who have the possibility of making decisions and formulating policies
that affect all aspect of the firm’s operations.

 President

 Vice President

 Chief Executive Officers

 Executive Vice President

 General Manager/Deputy
 Chapter One
2. Middle Management

 Includes all managers above the supervisory level but below the level where overall company
policy is determined.

 Carrying out the decisions made by upper management and ensuring the directives are
executed efficiently and effectively.

 Middle managers manage supervisors.

 Regional Sales Manager

 Academic Deans (Universities)

 Production Manager (in an Industry/Factory)

 Chapter One
3. Supervisory Management

 At the base of the pyramid is supervisory management

 Supervisors manage workers who perform the most basic job duties required in the business.

 Technically, supervisors are managers. As such, they must reflect the company’s view to their
subordinates.

 Eg. Sales Manager, Academic department head (Universities)

 Chapter One
Management and Productivity

 Management is concerned with productivity i.e. the effectiveness and efficiency.

 Productivity can be measured as the Output to Input ratios within a time period with due
consideration for quality.

 Productivity (within time period & considering quality, The I can be labour, material, capital,
etc. ), Productivity can be improved:

 By increasing O with same I.

 By decreasing I but maintaining same O.

 By Increasing O and decreasing I;

 Chapter One
Management Skills

 Management success depends both on a fundamental understanding of the principles of

management and on the application of management skills;

 Modern business organizations are dynamic and complex, and competition in the market
place is fierce. Thus, managers must be highly skilled to succeed;

 The skills managers need can be classified as technical, human relations and conceptual.
 Chapter One
1. Technical Skills

 Are the specialized knowledge and abilities that can be applied to specific tasks.

 Most important at lower level of management.

 In most cases, technical skills are important at this level because supervisory managers
should train their subordinates in the proper use of work-related tools, machines, equipment
and Standard Operation Procedure (SOP).
 Chapter One
2. Human relation skills

 Human relations skills are the abilities needed to resolve conflict, motivate, lead, and
communicate effectively with other workers.

 Because all work is done when people work together, human relation skills are equally
important at all levels of management.

 It is cooperative effort; it is teamwork; it is about making people to feel secure and free to
express their opinions.
 Chapter One
3. Conceptual Skills

 Conceptual skills are the abilities that allow an individual to better understand complex
scenarios and develop creative solutions.

 Conceptual skills are most important in strategic (long-range) planning, therefore these are
more important at top level executives.
Chapter One
Management Skills Vs. Management Levels
 Chapter One

Group Assignment 1

1. What are the different styles of management and explain there advantages and

disadvantages.

2. There are three main types of organizational structure: functional, divisional and matrix;

explain each of them in detail.

Chapter One

End Of Chapter One

Do You Have Any Question ?

Thank You