department of collegiate and technical education unit i

MECHANICAL ENGINEERING - 15ME51T 1

Department of Collegiate and Technical Education

UNIT I : BASICS OF MANAGEMENT

Session 2: Fayol’s Principles of Management, Business and factors affecting business

INDUSTRIAL MANAGEMENT (V Semester)

MECHANICAL ENGINEERING

Overview

2

• Henry Fayol’s Principles of Management

• Business

• Private Sector and Public Sector , joint sector

MECHANICAL ENGINEERING- 15ME51T

Recap : Fayol’s Principles of Management

1. Division of work2. Authority and responsibility3. Discipline4. Unity of command5. Unity of direction6. Subordination of individual interest to

general interest7. Remuneration

3MECHANICAL ENGINEERING- 15ME51T

Fayol’s Principles of organisation

8. Centralisation9. Scalar chain10. Order11. Equity12. Stability of tenure13. Initiative14. Espirit de corps


8. Centralisation

• For effective management of people, planned decentralisation is necessary

5

Centralization Decentralization


• Centralisation means all

authority retained at a

central point.

9. Scalar chain • It means that the authority and responsibility must flow

along a line

6

General Manager

Works Manager

Works Manager

Foreman

Workers

Line

of a

utho

rity

Line

of A

ccou

ntab

ility


10. Order

• A place for everything and everything in its place(material) or a place for everyone and everyone in his place (men) means order.

• The factory must be in order such that every material can be taken out easily and every person located easily


11. Equity

• Management must treat all employees justly and kindly.

• Maintain discipline as necessary and acting with kindness where appropriate.


12. Stability of tenure of personnel • An average manager who stays is

better than a brilliant manager who comes and goes.

• Managers need time to improve their skill and enhance their efficiency

• An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their employees.


13. Initiative

• It is the ability to start action, to

take decisions

• The management should support

and encourage the employees to

take initiatives in an organization.


14. Espirit De Corps (French words)

• It is a sense of harmony and union among the personnel of a company


Business

• Business may be defined as an activity in which different persons exchange something of value whether goods or services for mutual gain or profit.

12

• A business is an organization or entity that sells goods or services for a profit

Business• It can also be defined as an enterprise engaged in

production and distribution of goods for sale in market or rendering service for a price.

13

• Main purpose is to generate profits.

Business• Commerce : Allied activities like insurance,

transportation, accounting etc.• Industry – Converting raw material in semi finished or

finished goods• Trade : Buying and selling of commodities

14

TYPES OF BUSINESS ORGANIZATIONS

• Private sector Individuals invest money and directly or indirectly control the organisation

• Public sector companies Government invests money and runs the organizations.

• Joint sector Ownership and control shared by private enterpreneur, state and public.

15


• Henry Fayol’s Principles of Management• Business Organisation• Private Sector and Public Sector , joint

sector

department of collegiate and technical education unit i

Documents