ECONOMIC WEEKLY June 10, 1950
modifies, viz., foodgrains, jute and Mr. Deshmukh, however, is tics. He would also have the cottons. likely-to bring a fresh mind to bear advantage of combining the work on the financial problems. He will Prospects of achieving the target of the Planning Commission with have the powerful support of the by the end of 1951, however, appear Prime Minister and may be trusted that of the Finance Ministry and to be remote and most of the to take independent decisions, free thus achieving better co-ordination members realise it. The important of all influences of party or poli of economic policies. thing, therefore, is to decide to which of three should be given priority and to what extent. Efficiency in Industrial Management That the Commission is likely to lay an emphasis on agriculture is Ravi Chandra Prakash also indicated by the fact that it will shortly take up for study pro HE history of industrial organ Meanwhile, the productive organ posals for a programme of " agri ization and management in ization of industrial establishments cultural extension." Mr. Meyers, a T India is unfortunately the history must be improved to increase the town planner, is keenly interested of the managing agency system. production. Even the worker's out in the subject and may advise the The country has relied too much put depends to a considerable degree members from time to time as to on the managing agency whose upon the efficiency with which each the best methods of helping the defects and shortcomings have separate business unit is conducted. villager to help himself. created wide gaps in our industrial Efficiency in management requires Another scheme, proposed by Mr, system. The series of proposals that each firm be in the hands of Gulzarilal Nanda, envisages the put forward by the Ministry of most competent executives and that recruitment of two lakh volunteers Commerce some time ago for these, executives use the best mana for social service in villages. important amendments to the gerial techniques that are known. Indian Companies Act were intend The Commission would also ed to remedy these lacunae. In The success of any industrial examine the control of capital the wider perspective, the Central organization must be judged in issues, the problem of foreign capi Advisory Council of Industries, at terms of social welfare. The management of industry, therefore, tal, and the constitution of an their second meeting held on the entails a three-fold obligation: the Economic Service in the Central 28th July 1949 in New Delhi, stated obligation to investors, to the Secretariat. in their resolution that in order to workers, and to the public. Profit place industry in a healthy compe is the mainspring of economic titive position, both for supplying action and it must be earned to internal needs and for increasing The inclusion of Mr. Chintaman maintain the How of capital in Deshmukh in the Central Cabinet exports, production must be in industry intact. At the same time, has been marked by frank jubilition creased, quality must be improved, workers must be treated as human in circles close to the Planning and cost and prices reduced. Tins beings deserving a decent standard Commission. The feeling is un will require, according to the of living. And finally, the needs animous that the position of that Council more efficient and better of the public must be kept in view body, which has the Prime Minister forms of management, rationaliza because the whole function of the for its Chairman, will be greatly tion of plant and machinery, fur industry is to create the means strengthened. This is particularly ther utilization of installed capacity whereby human wants can be welcomed for the previous Finance and higher productivity of labour. satisfied. Minister Dr. John Matthai, was, in These improvements can only be principle, opposed to the Commis effected according to a well-planned What are the essentials of good sion commanding a better position programme of economic expansion management ? My good manage than his own Ministry. and industrial reorganization. This ment ' we mean the management vital problem of technical person in those plants which may be Another fundamental difference nel, technical know-how and re classified as above the average in of opinion, between him and the search and understanding of human efficiency. The experience and ac Prime Minister, is understood to relations in industry is the crux of complishments of the best industrial have been in regard to control of industrial management in India and enterprises in operation should, expenditure. Dr. Matthai is believ a necessary prelude to the success therefore, serve as the measur ed to have resented the day-to-day ful operation of any .scheme of ing rod. The following seven interference of various Ministries planned industrial development. aspects of efficient industrial who, in many cases, went over his The Government are fully alive to management are chosen to guide head to the Prime Minister, and his basic requirement of the indus- our business executives: (1) suit got their favourite schemes sanc tiy and as stated in their Industrial able location; (2) proper layout for tioned. Policy Statement dated the 6th building and equipment; (3) plant Lately, however, Dr, Matthai April, 1948; they " are taking organization; (4) efficient planning; had accepted his position as a non steps to remedy the situation; in (5) scientific job study; (6) modern party Minister and would agree to particular they are considering steps methods of wage payment; and any scheme sponsored by a Con to create a body of men trained in (7) effective management research. gress Minister as long as he could business methods and manage And yet, it is not enough for possibly manage it. ment." efficient performance as an execep-
563 June 10, 1950 ECONOMIC WEEKLY live merely to understand the The factory is then to be viewed In such a system nothing occurs economics of business organization, as a social system of activities in isolation, and any change to be proficient in analysing the devised and directed to the pro may have disturbing and unfore structure of cost and prices, to duction of goods. Or, as Burleigh seen effects. Because it is such devise better capital equipment, or B. Gardner has put it: a closely integrated system of to push up salts. Executives cooperative effort, it is important should also concern themselves " Any concern may be consi that every one concerned with with the study of human relations dered as. a human organization lems of maintaining effective in industry. For aught we know of people in functional relation co-operation within it." to one another. Each person has that to deal effectively with the a place in this structure; he has Increasing attention to the problems in industrial society such duties and responsibilities, he has human problems in industry has, as the turn-over and absenteeism, certain relationships with others, therefore, led to the adoption, in low business morale, poor co-ope and his work has a place in the progressive plants in the West, of ration, and strikes, the executive total pattern of work. Thus personnel departments headed by must recognize that his organization within the walls of any plant we personnel administrators. Their involves problems of human rela have a social organization of function is to increase efficiency by tions. He must see the anxieties people participating together in more careful attention to employee's and disturbances of people at a co-ordinated system of acti needs and morale. This involves work, the stresses and strains in vities. This social system fur scientific employment of workers, human relationships in industry thermore is a well-knit unit in based on job specifications, culti and the resulting inefficiency and which the function of each has vation of .suitable sources of labour waste. Unplanned, haphazard direct and indirect effects upon, supply, and the effective interview industrial development has created the others. Thus the way one ing and testing of applicants. The problems which can be understood man does his Job may have far- personnel department also takes only by a close touch with people reaching effects upon the work of care of transfers, promotions and in industry at all levels or else our many others, and the behaviour discharges, and it maintains faci technical skill and managerial abi of one may affect the morale and lities for health, safety, education, lity both remain sadly deficient. effectiveness of the entire group. research, recreation, employee's
564 ECONOMIC WEEKLY June 10, 1950 representation etc. On the per- where and, in-which item he can situation in the country has con sonnel department further falls the effect reduction of real unit costs vinced everybody of the need of burden of maintaining high plant of production, i.e., the amount of greater productivity to raise the morale arid a spirit of co-operation materials and labour going into one standard of living of the people. between men and management. unit of product. Both costs and We must also know that one way Industrial management thus func profits may accordingly be planned of doing it is to make our industrial tions- as a living and evolving by him. But a skillful manager, management efficient and scientific organization, quite different- from worthy of honours, promotions, and which would be, in Taylor's own the dead weight of the managing bonuses would try to bring actual words, as follows: agency system in India. costs below planned costs and thus raise profits above the planned Science, not rule Of thumb; And so, hardly any apology is figure. Even in Russia, this cult Harmony, not discord; necessary for quoting Gardner of efficiency in management which Co-operation, not individualism; above at length, when in India we has been developed as a national Maximum output, in place of have yet to cultivate and grow movement is based on techniques restricted output; and proper attitude towards the human of Taylor and Gilbreth, The development of each man side of industry. Understanding to his greatest efficiency and and appreciation of human rela The fundamentals of the mana prosperity. [(The Principles tions in industry, which is by itself gerial principles and philosophy as of Scientifi Management, an important pre-requisite for the laid down by Frederick W. Taylor, p. 140.)] success^ of the business executive, the father of the scientific manage further enables him to discharge ment, and subsequently expanded The above criteria of good, effi the obligations to investor and by H. L. Gantt, Frank Gilbreth, cient and scientific management in public. From their point of view, Harrington Emerson and Morris L. industry do not conflict: with our his main task is to organize machi-, Cooke, have been described above. different ideologies. They are quite nery to record quantitative, quali It is quite evident that industrial independent of the form of indus tative and financial results of pro management in India is anything trial organization that India would duction. Of all the systems followed but the scientific management as develop in future, whether social in this connection-'by different given to us. by the pioneers of the isation of industry that destroys countries, I find the Russian prac modem management movement. individualism, or individualism that tice most scientific. And the present grievous economic is devoid of social responsibility.
Reports, on quantity of output and of goods in process are; com piled in Russia, annually, quarterly Water Diviners at Work or monthly recording the following indicators: (i) volume of output —Search For Capital For Undeveloped Economies and sales, in natural and monetary units; (ii) volume and kind of capi J. C. Luther tal investment; (iii) number of workers and labour productivity; T is as difficult to define precisely plementation of such projects—that (iv) working capital (stocks of I the objectives of economic deve the question of finance arises. This finished products, materials, fuel, lopment as it is easy to say broadly is pretty obvious, hut it has to be Sash and bank deposits); (v) pay that the primary objectives is to emphasised, nevertheless, because roll, by categories of workers; (vi) raise the per capita real income. these aspects of development are detailed cost .of. production (for This is the objective that has been too frequently ignored by those who every operation and item pro kept constantly before the public by are piqued by the non-co-operation duced); (vii) expenses for fuel, everybody from writers of text-books of domestic capital and are im electric power, raw materials, and to the national leaders, ever since patient at the tardy flow of foreign Semi-finished goods, Furthermore, our economic experts became plan- capital. the plant's statistical, planning and ning- Minded after the war. Subject to the above, expert con book-keeping departments measure The difficulty arises, however, sideration is needed of the means and report in detail the degree of when from academic abstractions, of increasing the resources that can utilization of .machines and equip- and paper plans, one steps out into be made available for financing our ment (percentage of .optimum uti the open and, as it were, face the economic development. Particular lization), raw materials and fuel situation, To begin with, there is a urgency has been added to such (consumption per unit of output), conflict between the economic and consideration by the gloom that and labour (working hours per unit non-economic aims of development; has been east on our planners by of goods produced, number of for considerations of security, one the dim prospects of securing frames or benches per worker, ratio must- sacrifice, to some extent, pure finance. Specific studies will have to of auxiliary to direct labour; etc. ly economic gains. Then again, be made of the potential resources (Management in Russian Industry when the ends have been defined, of domestic as well as foreign capi and Agriculture by Bienstoek, Sch- concrete projects for development tal, and of the terms and conditions wari and Yugow). that can be readily implemented, under which the latter can be had are not too plentiful. It is only at to suit our particular economic This enables the manager to see the next stage—at the stage of im- situation.
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