This dissertation has been 65-5654 microfilmed exactly as received

LARSEN, Delmar Laverne, 1936— INDUSTRIAL MANAGEMENT AND INDUSTRIAL ARTS; A RESOURCE RESEARCH WITH IMPLI­ CATIONS FOR CURRICULUM DEVELOPMENT.

The Ohio State University, Ph.D., 1964 Education, theory and practice

University Microfilms, Inc., Ann Arbor, Michigan INDUSTRIAL MANAGEMENT AND INDUSTRIAL ARTS

A Resource Research with Implications for Curriculum Development

DISSERTATION

Presented in Partial Fulfillment of the Requirements for Degree Doctor of Philosophy in the Graduate School of the Ohio State University

By

DELMAR LAVERNE LARSEN, B.A. # M.A.

******

The Ohio State University 1964

Approved by

Adviser Department of Education PREFACE

Industrial management is a subject which gets to the core of the operation of industrial enterprise. Its early beginnings have been traced back to the efforts of Watt and Boulton of Great Britain.

These gentlemen were employing a division of labor, work study and executive development in the late eighteenth century. The con­ cepts of scientific management, however, have largely emerged in the twentieth century.

Industrial arts education could offer more meaningful curricular experiences if it devoted some of its attention to a study of indus­ trial organization and management. In order to do this, it is nec­ essary to have some knowledge of industrial management concepts and practices. This study is designed to examine the subject of industrial management with the objective of ultimately making applications to the industrial arts curriculum.

Acknowledgment is here made to the members of the writer's committee, including Professor William Es Warner, his adviser.

Professor John A. Ramseyer, and Professor Robert M. Reese for their assistance and encouragement in the course of this study.

December 1, 1964 DELMAR L. LARSEN

ii VITA

January 2, 1936 Born - Grinnell, Iowa

1958 B.A., State College of Iowa, Cedar Falls, Iowa

1958-1959 Graduate Assistant, Industrial Arts Department, Ball State Teachers College, Muncie, Indiana

1959-1960 Teaching Fellowship, Industrial Arts Department, Ball State Teachers College, Muncie, Indiana

1960 M.A., Ball State Teachers College, Muncie, Indiana

1960-1962 Teacher, Industrial Arts, Columbus Public Schools, Columbus, Ohio

1962-1963 Assistant, Industrial Arts Department, The Ohio State University, Columbus, Ohio

1963-1964 Assistant Instructor, Industrial Arts Department, The Ohio State University, Columbus, Ohio

FIELDS OF STUDY

Major Field: Industrial Arts

Studies in Industrial Arts Education. Professor William E. Warner

Studies in Teacher Education. Professor Earl W. Anderson

Studies in School Administration. Professor John A. Ramseyer

Studies in Vocational Trade and Industrial Education. Professor Robert M. Reese

iii CONTENTS

Chapter Page

I. NATURE OF THE DISSERTATION 1

The Problem Steps in the Solution of the Problem Assumptions Nature of Industrial Arts Scope of the Investigation Definitions

II. EVOLUTION OF INDUSTRIAL MANAGEMENT. . 10

Nature of Industrial Growth Concepts of Management's Role Developmental Overview of Scientific Management

III. RECENT DEVELOPMENTS IN INDUSTRIAL MANAGEMENT . 40

Management of Industrial Research and Development Outcomes of Research as an Industry The Integration of Science and Practice The Role of Creativity and Imagination International Management Development Trends in Industrial Management

IV. PERSONNEL MANAGEMENT 93

Recruitment and Selection Management Personnel Development Industrial Psychology Safety and Health Communication Individuality of the Employee

iv V

Chapter Page

V. MANAGEMENT AND THE FUNCTIONAL ORGANIZATION . .157

Theories of Organization Lines of Divisionalization Interfunctional Relationships Flexible Integration Organization Charts Delegation of Authority and Responsibility Impact of Automation and/or Cybernetics Primary Functions of Management

VI. SELECTED PRODUCTION VARIABLES 218

Machinery and Equipment Raw Materials Product Design Quality Control Plant Location and Layout Maintenance Producing at the Right Time Scheduling Promotion and Sales Dispatching Control of Production Factory Overhead Control Inventory Control Profit Control

Vn. A LIST OF MANAGEMENT CONCEPTS WITH CURRICULUM IMPLICATIONS 247

Personnel Management The Functional Organization Selected Production Variables Research and Development Automation and Cybernetics Management Trends International Management Development Selected Principles of Industrial Management vi

Chapter Page

VIII. IMPUCATIONS FOR INDUSTRIAL ARTS EDUCATION. . . .267

Selected Laboratory Organization Charts and Job Specifications Personnel Application Blank Field Excursions Classroom Reports and Discussions Class Projects Management Center Other Implications

IX. SUMMARY AND CONCLUSIONS 291

Conclusions Recommendations

APPENDIX 312

SELECTED BIBLIOGRAPHY 315 FIGURES

Figure Page

1. Employment Application Blank 103

2. Organization Chart 165

3. Industrial Management Chart 216

4. Wood Technology Laboratory 271

5. Practical Arts for Elementary Teachers 273

6. Chart for a Mass Production Project 274

7. Vestibule Laboratory of Technology 276

8. Personnel Data Sheet 281

vii CHAPTER I

NATURE OF THE DISSERTATION

The dissertation is a study of industrial management for the pur­ pose of deriving subject matter for industrial arts education. An international perspective is gained from a study of the efforts of the

International Committee of Scientific Management which has its headquarters in Geneva, Switzerland. Selected industrial manage­ ment concepts and practices will be utilized in recommending im­ provements in both laboratory organization and curriculum.

The Problem

The problem of this study stated in question form is as follows:

'What techniques of industrial arts laboratory organization and what industrial arts curriculum content can be derived from modern in­ dustrial management concepts and practices ? This study involves a documentary analysis of industrial management concepts and prac­ tices. A second phase is to apply selected findings to the field of industrial arts education. One difficulty encountered in making these applications to industrial arts is to develop an effective screen through which to filter industrial management concepts.

This problem is dealt with in chapter VII, with chapters II through VI devoted to an investigation of management concepts and practices.

1 2

The most difficult problem is to realistically apply industrial management knowledge to a projection of industrial arts education.

This will involve listing management concepts with curriculum implications. Selected management concepts and practices will then be applied to industrial arts education. This is done in chapter

VIII entitled "Implications for Industrial Arts Education."

Other sub-problems of this investigation are as follows:

1. Are there organizational techniques which have implications for teaching about industry as well as facilitating laboratory opera­ tion?

2. Is it possible to reflect so complex a phenomenon as a large modern industry through a laboratory personnel organization?

3. What might be needed in terms of facilities, machines, equipment and supplies in order to reflect organizational theory and practice in modern industry?

4. Are there concepts inherent in industrial management with implications for the industrial arts curriculum?

5. What student experience units might be developed from in­ dustrial management concepts ?

6. What patterns of laboratory teaching might include modern industrial management problems ? 3

7. What central concepts emerging as a result of automation and also cybernetics might be incorporated in curriculum materials ?

8. How is the International Committee for Scientific Manage­

ment (CIOS) promoting management development in industrial and

developing nations ?

Steps in the Solution of the Problem

Documentary research will be employed to find the data sought.

Original pieces of written or printed matter will be employed as

sources of information. Use will be made of documents on industrial

management copyrighted since World War II and especially during

the past five years. An attempt will be made to view the subject

from an international perspective by way of reports of proceedings

of the International Committee for Scientific Management which met

in New York City in 1963. Recent publications of the American Manage­

ment Association will also be explored.

A set of ten criteria will then be developed for screening manage­

ment concepts for industrial arts education. These criteria should

serve as a basis upon which to evaluate the appropriateness of includ­

ing given management concepts and practices in the industrial arts

curriculum. These criteria are used in compiling a list of management

concepts with industrial arts curriculum implications. The application 4 of industrial management concepts and practices to industrial arts laboratory organization and curriculum content will also be guided by these criteria.

The last step is presenting a summary and drawing conclusions.

The summary will be made in terms of the data collected and the implications for the industrial arts curriculum. Conclusions are to be drawn in terms of answering the basic problem and sub-problems of this study. The criteria established for screening industrial management concepts and practices for industrial arts education will serve as a basis upon which to draw conclusions.

Assumptions

It is assumed that industrial arts has been, and is presently, placing emphasis on the manipulation of tools, machines, materials and processes. The whys and implications of modern industrial organization and practice are usually given little emphasis. A fur­ ther assumption is that the significance of student experience may lie as much in an understanding of the ramifications and whys of these experiences as in the whats and hows. Such understandings appear to be inherent in an appreciation of modern industrial manage­ ment concepts and problems. 5

Another basic assumption is that the criteria developed for

screening industrial management concepts and practices for the in­ dustrial arts curriculum are valid and appropriate for use. These cri­ teria are presented in chapter VII which is a listing of industrial management concepts with industrial arts curriculum implications.

Other basic assumptions which underlie this study are as follows:

1. Industrial arts should reflect modern industry of which

management is a major component.

2. Industrial arts students should participate in experience related subject matter.

3. Modern industrial management concepts and practices are reflective of industry and the broader phenomenon of technology.

4. Industrial management theory and practice, involves inherent

concepts and organizational patterns with applications appropriate

to industrial arts education.

5. Industrial management embraces a vital and variable factor

of production in the human element.

Nature of Industrial Arts

Industrial arts education is conceived as properly drawing its

subject matter content from the industrial complex. It is a general

education subject which is valuable to students in their roles as 6 consumers and producers as well as providing recreational opportunities for all. Its scope includes a total program stretching from the elemen­ tary school to adult education programs. A socioeconomic analysis of technology is the basis for deriving the curriculum divisions of construction, manufacturing, communications, electronics, and power and transportation.

Subject matter derived in the above manner is in contra st to that which results from trade or job analysis such as carpentry, blacksmithing or cabinet making. Curriculum content derived from a socioeconomic analysis of technology provides broad divisions of curriculum content which encompasses a study of the social and economic ramifications of industry as well as its manipulative aspects.

Industrial arts is a study of industry in terms of its organization, functions and outcomes as it affects the social order.

Scope of the Investigation

The study of industrial management is to be limited to five basic sub-parts. These include its evolution, recent developments in the field, personnel management, industrial organization and se­ lected production variables. Another part of the study is to develop a set of criteria through which to screen industrial management con­ cepts and practices for industrial arts curriculum content. These criteria are used to compile a list of management concepts with indus­ trial arts curriculum implications. Selected adaptations of management organizational patterns and concepts are then to be made to the indus­ trial arts program. This will involve both laboratory organization and subject matter implications.

Several divisions of industrial management have been largely excluded in this study to make the task more practical. No attempt has been made to study the complex mathematical control and informa­ tion systems presently being developed in the field. Furthermore, considerations in such fields as legal affairs, secretarial and clerical and external relations have largely been bypassed for the sake of brevity. The consideration of finance is largely limited to a brief discussion of factory overhead and profit control rather than investi­ gating finance in the overall firm or corporate sense. These exclusions are not because such matters lack importance, but rather are the result of an effort to keep the study within manageable limits.

Definitions

The communication of ideas in this study can be facilitated by clarifying certain terms which are used. A definition, according to the dictionary, is the act of stating or showing what a word means, 8 what a thing is, or what content is involved in a conception. The terms which it may be helpful to define are listed below.

Automation: A production system employing a maximum of self- regulating machinery, integrated materials handling and processing

equipment, automatic control systems and electronic data processing

equipment.

Cybernetics: The science dealing with the common underlying

principles in the functioning, control and communications of auto­

matic machines and the human nervous system.

Industrial arts: A general education subject which is a study

of industry, its organization, its social and economic outcomes as

well as a study of tools, materials, machines and processes.

Industrial management: The definition presented by A. E. Benn

(7, p. 204) is as follows:

1. That industrial activity which studies, analyzes, and reviews evidence, formulates decisions, and initiates proper action of appropriate nature.

2. A function or process of planning, coordinating, and directing the activity of an industry, business of govern­ ment.

3. The structures which have evolved to facilitate the process of managing.

4. That part in the organization of a specific firm or agency which is referred to as "the management." 9

5. The act and process of getting things done through the efforts of other people.

6. The development of persons and the direction of things through a properly balanced and coordinated plan or program.

Industrial psychology: A study of human capacities and behav­ ior patterns as related to the industrial setting.

Industry: A number of enterprises engaged in identical or sim­ ilar economic activities is referred to as an industry.

Subject matter: A body of information and knowledge included for study in the field of industrial arts education.

Technology: Dewhurst and the Twentieth Century Fund (22, p. 834) define it as follows:

As technology consists of accumulated knowledges, techniques and skills, and their application in creating useful goods and services, the ultimate fruits of a country's technology are found in the standard of living its people are able to enjoy.

The foregoing will serve as a basis for the investigation which is to follow. This study begins in the following chapter by tracing the evolution of industrial management. CHAPTER II

EVOLUTION OF INDUSTRIAL MANAGEMENT

This chapter will deal with various developments which resulted in industrial growth. Some differing viewpoints as to management's role will then be presented. The last section will be an overview of the development of scientific management. Industrial management is continuing to evolve as the needs of industrial enterprise dictate.

Urwick (62, p.l) traced the first illustration of scientific management to Great Britain in 1795. At approximately this time, the Soho Engineering Foundry near Birmingham of Boulton# Watt and

Company was applying a number of scientific management techniques.

James Watt Jr. and Matthew Robinson Boulton are the individuals given credit for this early pioneering effort. Such methods as divi­ sion of labor, work study and an executive development scheme were applied on a small scale but just as systematically as in modern concerns today.

Inventors of the nineteenth century (32, p. 477) fostered an industrial revolution which required skills and knowledge not gener­ ally possessed by untrained owner managers of small concerns. The

10 factory system helped management become known as a discipline that achieved objectives through efficient utilization of human and materials resources. This new discipline was based on a philosophy of conservation as a central objective of industry. A diligent striv­ ing for efficiency was felt to be the cure for increasing costs and rising prices. Waste, which benefited no one, was to be eliminated while the savings were to be apportioned to all concerned.

Some stimulating concepts which led to the development of industrial management as a discipline (32, p. 477) included

(1) division of labor, (2) Protestant or Puritan Ethic which consid­ ered social good, personal gain and God's will as one and the same,

(3) belief in "Social Darwinism," (4) emergence of organized labor,

(5) establishment of the right to hold private property, (6) impact of the growth of technology, (7) diversification of products and decen­ tralization of managerial functions, and (8) emergency of scientific management early in the twentieth century. These concepts created a need for a new type of industrial manager and a better management philosophy.

The development of management (32, p. 479) was furthered by the impact of three major developments. The first was the publicity given the Eastern Rate Case hearings in 1911. A consultant named Harrington Emerson testified that the country's railroads could save

$1,000,000 a day through scientific management. The second was the General Motors Reorganization Plan initiated by Sloan in 1920.

It provided for organizational growth through decentralized admin­

istration coupled with centralized policy control. The third was the

Hawthorne studies which promoted a consideration of human relations as part of the development of management thinking.

Nature of Industrial Growth

The growth of industry was one prerequisite to the develop­

ment of management. There was little apparent need for an organized

system of management until the factory system emerged. The factory

system produced problems of organization, human motivation and

efficiency which were inherent in the system. The purpose here

is to examine the nature of industrial growth in terms of the division

of labor, the increased use of machinery and the emergence of the

factory enterprise system.

Division of labor. One of the cumulative forces generating

the management movement (32, p. 477) was the concept of division

of labor which led to the factory system. It allowed for specializa­

tion and was found to facilitate productivity and the creation of wealth.

The division of labor altered the old "self-sufficiency" basis of 13 craft labor and commerce. A system of interdependencies developed where the work of an industrial employee obtained meaning only when it was integrated and coordinated with the work of others.

It is easy to break complex jobs down into simpler tasks in

industry. According to Keith and Gubellini (40, p.46) simple jobs can be performed more consistently and efficiently than complex jobs.

Furthermore, workers can be trained for simple duties more quickly and thoroughly. It was noted that ideally each man in the produc­ tion process would accomplish a single task; in this sense speciali­

zation and division of labor mean almost the same thing.

The first step toward industrial growth (63, p. 6) was grouping workers and the division of labor. This changed enterprise from that

conducted by one man alone to grouping men under the leadership of the owner of the concern. Work was divided among groups of workers

in order to facilitate the flow of production. This allowed these groups of employees to specialize in their particular tasks, thus, developing

a high degree of proficiency. This resulting proficiency made more

economical and efficient production possible.

The division of labor and increasing mechanization early led

some to become concerned about the trend to mechanize man himself

through specialization. Henry David Thoreau (63, p.4) was asking, 14 in 1854, when this division of labor would end. He was concerned that man was increasingly willing to let someone else do his thinking for him. The problems created through increasing specialization are still hotly debated today.

Mechanization. The increasing use of machines (63, p. 6) led from the handicraft shop to the emergence of the factory system. Manu­ facturing methods were adapted to processes made possible through the utilization of machines. The work was broken down into distinct oper­ ations so that no machine operator had a skill directly related to the finished product. Mechanization has resulted in increased productivity, lower product prices and expanded markets. Expanded markets stimu­ lated further production, thereby, closing the cycle.

The use of large power-driven machinery led to factory organiza­ tion because the equipment was too large and expensive to be placed in the workers' homes. Utilizing factory cites provided for the control and regulation of this machinery. Early machinery was powered by oxen, horses or water power. A more potent force was needed, however, to meet the needs of greater production. A number of inventors worked to perfect the steam engine, but credit is usually given to James Watt who perfected it as a prime mover in 1781. This invention was a great

stimulus to greater mechanization. It provided a continuous source of power, whereas, water power was previously dependent on the supply of water in the rivers and ponds. Much of this mechanization must be credited to the efforts of inventors during the eighteenth and nineteenth centuries.

Growth of enterprise. Three preliminary conditions (40, p.49) must be satisfied before mass production is either possible or profit­ able. First, there must be a very large market for the product since mass production depends on maintaining a large output. A second condition that must be met is an advanced state of technology in a given industry. This means the utilization of highly specialized machinery which is able to operate efficiently at very high speeds.

The third necessity for mass production to be effective is the need for sound and skillful organization.

John F. Mee, representing the Society for Advancement of Man­ agement (32, p. 478), related that the factory system developed as a result of the need for

large outputs of standardized products for expanded markets; complex operations which necessitated sizeable investments in fixed plant, mechanized processes, and power; and an assembly of workers under a definite organiza­ tional discipline.

These needs indicate a combination of the division of labor, mechani­

zation and the growth of enterprise as the basis of industrial growth. The growth of enterprise (63, p. 7) refers to the transition from the one man business to a more complex organization requiring dele­ gation of authority and more complex methods of management. It is commonly accepted that once an organization employs more than fifty employees it should not be operated as a one-man business.

This has led to the need for new specialists to take care of such tasks as accounting, scheduling and collective bargaining. Thus, the growth of enterprise has resulted in continuing efforts to develop viable and efficient industrial organizations.

Combination of the above. The division of labor, mechanization, and the growth of enterprise led to the development of the corporation.

It is more than an economic instrumentality. According to O'Donnell

(18, p. 72), it is the main vehicle of scientific-technological revolu­ tion and a means of social change with the need to relate the use of science and technology to the social effects of output. This corporate sub-society produces not only goods and services, but ways of work­ ing, thinking and living.

Industrial growth has followed the above pattern because it provided for the most economical means of production. The division of labor allowed men to become expert in a specialization, machines greatly increased man's physical power and accelerated production while the growth of enterprise made it possible to bring these com­ ponents together in a workable combination.

The division of labor alone would not have meant the productive growth of enterprise. There were various degrees of specialization used in domestic industry. Mechanization, in addition, did not alone lead to modern industrial enterprise. The combination of mechaniza­ tion and the size of enterprise which has provided for specialization

is the essence of efficient industrial growth.

Concepts of Management's Role

Management has not been recognized as a distinct profession for any length of time. Ownership and management (50, p. 7) were thought to be one and the same for many years. The thinking cen­ tered largely on the privileges and responsibilities associated with ownership. Ownership was separated from management by the emer­

gence of corporations as the predominant legal form of organization for medium and large-sized concerns. Thusa with the coming of cor­

porations, management has come forth as a separate role. This has

led to the growth of a group of professional managers many of whom

may have no stake in ownership. There is currently a debate (15, p.208) as to whether the new professional manager should be a specialist or a generalist. A trend toward specialization exists in which many top management positions are being filled by specialists. This is often the case because the major problems in a corporation may be in a particular activity such as personnel management. This trend toward specialization contra­ dicts the popular belief that a top manager needs to be a generalist.

The debate in the universities is whether a series of specialties should be taught thoroughly or whether the objective should be to in­ still understandings via a broad approach. It was noted that, regard­ less of the debate, professional managers must master the funda­ mentals of various specialities in order to make effective decisions.

The growth of management toward professionalization (46, p. 13) is indicated by (1) a growing body of knowledge concerned with the management process, (2) increasing numbers of professional schools of business administration, (3) increasing use of management con­ sultants, (4) increased emphasis on ethical management behavior, and (5) the emergence of many management organizations. These developments do not mean that management is fully professionalized, but this would appear to be the trend.

Economic resource. One way of viewing management is to con­

sider it an economic resource or a factor of production. Harbison and Myers (29, p. 19) stated that in this sense it is similar to capital, labor or natural resources and is combined with them in varying factor proportions in productive processes. In some respects the need to generate and accumulate managerial resources is similar to that of capital formation. Industrial development with high capital require­ ments also generally requires a large pool of high-talent manpower, i.e., for managerial manpower. The economic development of a country may be limited by a relative shortage of this critical factor.

In many cases, management is a more critical factor in industrializa­ tion than capital and is almost always more vital to development than either labor or natural resources.

States M. Mead, Vice President of the Chase Manhattan Bank

(18, p. 426) presented a paper at the 13th International Management

Congress concerned with training managers in developing nations.

Economic development requires managerial achievement. Managerial talent is an economic resource which many developing nations are sorely lacking. This is a complex problem of improving indigenous education and skills while respecting unique cultural differences.

Viewing management as an economic resource (29, p.21) would allow one to relate the intensity of use of managerial resources to various characteristics of organizations. Managerial resources would 20 be increasingly needed as business organization became more complex, as markets gained in complexity, as capital investment increased and as the rate of innovation increased. It was also stated that managerial performance is the principal factor determining the pro­ ductivity of labor, assuming that capital and raw materials imputs are the same. Managerial organizations have inherent frictions which make them in some degree, inefficient in organizing human resources for productive purposes. This tends to place a great deal of emphasis on management as an economic resource.

System of authority. A second way to view management (28, p. 19) is to see it as a system of authority. The managerial hierarchy itself entails many lines of command and patterns of authority in all levels of decision-making. Management, in one sense, is a rule­ making and rule-enforcing body. Industrial development requires the exercise of authorigy and the nature of that development depends on the way such authority is applied. Management cannot serve effectively as a resource unless it can operate as a system of auth­ ority in industrial society.

One primitive system of authority in enterprise management is the sovereign rule by a single person or single family. This sysSem has roots in antiquity in some countries where this has traditionally 21 been the case. This is one form of authoritarian or dictatorial manage­ ment in which the worker is supposed to unquestioningly accept authority from above. Little concern is shown for human dignity and management assumes virtually no feelings of responsibility for the well-being of workers either on or off the job.

Paternalistic management (29# p.54) is based on the traditions of responsibility and subordination of master and servant, respectively.

This serves to smooth over the major dislocation which an industrial way of life forces on workers in its need to adapt to the market­ place. This system of authority assumes that the worker is to be cared for, but in return he is expected to be productive, loyal and grateful.

Authority (14, p. 1.5) in a corporation comes from the stock­ holders, is given the elected board of directors and then delegated to management who issues orders and instructions to subordinates.

Authority is direct if the line between the one who gives orders and the acceptor is unbroken. Authority is delegated when there is an intermediate agency between issuer and acceptor. Management has three types of authority. First, formal which is conferred by law or delegated in the organization. Second, functional which is derived from special competence. Third, personal based on seniority, 22 popularity or leadership qualities. Thus, management can be fruit­ fully analyzed as a system of authority.

Class or an elite. Another perspective from which to view management is to conceive it as a class or an elite. Harbison and

Myers (29, p. 19) stated that in varying degrees in different countries,

managers enjoy a measure of prestige, privilege and power as an

elite. Entering the management class is of necessity restricted.

Access to management ranks has a bearing upon the capacity of a

country to accumulate the management it requires and also has a

bearing on the operation of management as a system of authority.

One type of management class or elite (29, p. 68) is patri­

monial. This is business management in which ownership, major

policy-making positions and a good proportion of other jobs in the

hierarchy are held by members of an extended family. The objectives

are naturally oriented toward the interests and aspirations of the

family. Such management is a common first stage in a country's

march toward economic development. This form of management has a

slim chance of survival, however, in modern industrial societies.

Political management is another type of class or elite. It exists

where ownership, major policy-making positions and key administrative

posts are held by persons on the basis of political affiliations 23 and loyalties. This type of management may, however, enlist the services of professionally trained managers and technicians. It is a rare form of management in industrial societies and will probably become more so.

A third type of managerial elite or class is based on profes­ sional competence. It is enterprise management in which policy­ making positions and nearly all other positions in the hierarchy are held by individuals on the basis of alleged or demonstrated technical competence. Professional management is a field increasingly de­ manding some form of advanced training and preparation, as well as on-the-job training. Professional management based on competence is built on the most firm foundation and is easiest to justify. This seems to be the trend accompanying the continuing professionali- zation of management.

Leadership. Management can be viewed as a provider of needed leadership to guide the organization. Organizational objectives

(25, p. 73) are accomplished through sound decisions made by quali­ fied leaders. Men who can lead others are increasingly valued in modern industrial organizations. Management's leadership is just as important and possible more so than modern machinery or an elaborate organization. The importance of managerial leadership is augmented 24 by the fact that people will not tolerate the autocratic leadership char­ acteristic of earlier industry.

Leadership (19, p. 265) is a prime prerequisite to effectively establishing and operating any industrial organization. It is the ingredient which provides for the economic accomplishment of the enterprise's objectives through an effective combination of men, materials, machines, capital and know-how. A major task of leader­ ship is getting things done through other people by influencing attitudes and directing actions of others. The strategic role played by leadership makes it necessary to pay close attention to the selec­ tion and training of managerial leaders.

There is an almost universal scarcity of leadership in industrial organizations. This leads management (46, p. 250) in a constant

search for such ability. In addition, extensive efforts are made to develop the leadership potential of those associated with the firm.

One reason for a scarcity of leadership ability is the heavy responsi­ bilities inherent in modern industry. This shortage is made more acute by the fact that there are no satisfactory substitutes for leader­

ship. Leadership may be in short supply because existing leaders have not always created a climate in which leadership can thrive.

Such a clim&fce would be one in which there is frequent opportunity to 25 practice leadership skills under the guidance and encouragement of a competent superior.

A force for community improvement. Gantt (56, p. 230), writing in 1910, stated that some business men felt profits to be more impor­ tant than service rendered to the community. These men felt that the wheels of business would turn whether the community needed the service or not. All that was needed was for the company to have its measure of profit. These men had forgotten that the business system had its foundation in service. The argument seemed to call for a balance between making a profit for those investing time, money and talents in the enterprise and for providing community service.

Management makes a significant social contribution (50, p.5) in providing the dynamic force needed to guide enterprises toward useful ends. The community is better off as a result of the employ­ ment provided, the customers needs which are met and suppliers being able to market their materials. Moreover, providing good wages fosters a better standard of living. The community is also benefited because governments are provided sources of direct and indirect taxation. Management cannot be given sole credit for the above but it is a vital element in the picture. 26

Sverre Walter Rostoft, President of The Federation of Norwegian

Industries (18, p. 43) noted that industry exists to satisfy the material needs of the community. The consumers direct production through the demand created by them. Business enterprise is a service insti­ tution which seeks to produce the highest quality goods and render the best services at the least possible price.

Management is an asset to the community in several other ways.

Contributions are often made to educational institutions or scholar­ ship funds. Community improvement is sometimes fostered by requir­ ing community service as part of its personnel promotion policy.

Another benefit is the large numbers of professional people brought into the community with many industries.

Developmental Overview of Scientific Management

The industrial revolution (51, p.2), began in England as of 1776 with the commencement of the agricultural revolution, the publica­ tion of Adam Smith's Wealth of Nations inaugurating modern political economy and the American Declaration of Independence by which thirteen British colonies became the United States of America. By the middle of the nineteenth century, interchangeability of parts was well under way. It was largely in the next twenty-five years that thinkers 27

in both the United States and England began to apply rational pro­ cesses to methods of engineering and accounting.

Two books by Taylor (51, p. 3), Shop Management (1903) and

The Principles of Scientific Management (1911), received wide reading.

Gantt and Gilbreth had also become management consultants whose writings were widely read. The Taylor Society was organized in 1912.

It published many outstanding papers in its Bulletins. It united with the Society of Industrial Engineers in 1936 to form the Society for

Advancement of Management which now has chapters in more than fifty cities in the United States and Canada. The American Society of

Mechanical Engineers established its Management Division in 1920.

The American Management Association was founded in 1923. It holds

numerous conferences and seminars and published journals, pamphlets, research reports and books. Other management groups grew up rap­

idly during this period. These interest groups formed what is now

called the Council for International Progress in Management, the

American affiliate of the International Scientific Management Committee.

Some concepts and principles of management which have allowed

businesses to be managed more efficiently are listed:

1. Frederick Taylor—famous ideas about work measurement and

analysis and the "exception principle" upon which many systems of

management reporting and control are based today. 2. Mary Parker Follett—"law of the situation" which was a realistic substitute for persuasion or the hard approach of discipline in superior/subordinate relations.

3. Colonel Lyndall F. Urwick—provided an extremely helpful stepping stone in early organizational thinking in his refinement of the "span of control" concept.

4. Peter F. Drucker—an economist, consultant, and widely read author of books about management, sharpened management think­ ing through his analysis of the objectives of the modern business enterprise. (61, p. 5)

Scientific management (51, p. 4) was first applied in the steel, engineering and construction industries. This involved a careful review of all phases of manufacturing. The developments included the use of time and motion study, piece rates, controls on stores and tools and modern inventory systems. Various concepts were developed such as planning of work, experimentation, setting stan­ dards and using inspection and training to maintain standards.

The scientific management movement received great impetus from expanded mass production caused by World War I. The new thinking was spreading not only in the factory but in sales and financial management as well as personnel management. It was discovered that close attention to selection, placement, training, remuneration, motivation and supervision of workers could make a significant con­ tribution to overall results.

Niles (51, p.4) stated that during the last two generations many managers in the United States have come to realize responsi­ bilities to the consumers, to the public and to the workers as well as the investors in the enterprise. Increasingly, provision has been made to train managers to perform this responsibility. The statement was made that management at its best has become statesmanship in the public interest.

Harbison and Myers (29, ji>.373) related that the growth of the

American Management Association and its activities in the last thirty-five years has certainly illustrated a growing interest in pro­ fessional management in the United States. Well over a million and a half persons attended AMA conference sessions and management seminars during these years. Similar growth is in evidence in the case of such management groups as the Society for the Advancement of

Management and the American Marketing Association. The growth of these professional societies are hallmarks of the quality and standing of American management. Frederick W. Taylor. As "Father of Scientific Management," he was hired by Midvale Steel Company as a laborer in 1878. He later became gangboss of the lathes section. It was in this capacity

(32, p.871) that he engaged in a bitter struggle with machinists, paid on a piece work basis, to increase production. After three years of this struggle Taylor was made foreman. He became increasingly dissatisfied with the piece rate system which did not allow employees to increase earnings despite increased output. This dissatisfaction served as a stimulus for developing a more predictable scientific management.

The scientific management developed by Taylor (19, p. 39) con­ sisted of such key elements as (1) science to replace old rule of thumb methods, (2) scientific selection and development of each man to maximum efficiency and prosperity, (3) maximum output through the use of incentives, (4) harmony based on cooperation and (5) separating planning and performance. The result was planning in advance of operations, utilizing analytical study of work, using standard equipment and methods and creating a new relationship between management and workers.

Part of the original concept of scientific management (62, p. 74) was the belief that both management and employees must cease considering the division of the surplus as most important and work together to increase the size of the surplus. This working together required a common purpose and a common method. Taylor was con­ cerned that followers would conceive of scientific management as a mere set of efficiency mechanisms. He stated that in essence, it required a complete mental revolution on the part of both management and employees. The usage of these principles for bad ends were considered any which were selfish, sectional or harmful to a demo­ cratic society or any segment of such a society.

Some historians feel that Taylor's role in the development of scientific management has been exagerated. Many of his ideas were drawn from earlier pioneers in the field. Taylor and h.is followers may have retarded the growth of scientific management by distorting the picture of its true development. McFarland (46, p. 28) noted that scientific management may not have been the sudden invention of

Taylor. He was given credit, however, for being the catalyst in codifying and restating many logical practices which had developed over a long period of time. The greatest contribution may have been the advocacy of measurement and experimentation which led to a constant search for the best way. 32

Other pioneers in scientific management. Henry Lawrence Gantt

(62, p.90) has been referred to as the forerunner of modern industrial democracy. His central philosophy was that dealing with the human element was the most important problem facing management. Gantt contributed many charts, a bonus plan and methods of production con­ trol. He was an early leader in fostering the concept that management

should be responsible for training employees. He stressed the need to recognize the human factor as well as noting that the financial

incentive is only one among many which motivate men. Another belief was that management should be responsible for creating an industrial

climate which would be psychologically favorable to employees. The

American Society of Mechanical Engineers and the American Manage­

ment Association have awarded since 1929, a Gold Medal in his name for "distinguished achievement in industrial management as a service to the community."

Frank Bunker Gilbreth (62, p. 138) was a contemporary of Taylor.

His distinctive contribution was the development of motion study as a management aid. New concepts of work-planning and of training workers were attributed to Gilbreth. He also showed concern for

human elements in work. The employee's potential was to be realized

by improving training, the methods used, the tools and the physical 33 and mental environment. Gilbreth is given credit for promoting man­ agement as a social science with the human being as the center of interest. Lillian Moller Gilbreth became internationally famous by carrying on the work of her husband after he died in 1924.

Harrington Emerson (62, p.51) wrote two books on the subject of efficiency in the early 1900's. He also made a contribution by writing a book on the selection of industrial employees. His writing set forth a number of principles of efficiency which have stimulated much thinking along this line. He expounded the ideas of standard time, standard costs, preventable wastes and illustrated how the scientific method could be applied to many different activities. He popularized scientific management through active consultancy work, prolific writing on efficiency and through educating a large number of business men. His writings revealed an effort to justify scien­ tific management to the working man by indicating its value in finding work for which the individual is well fitted.

A historical record of the contributions of seventy pioneers in management are included in a book entitled The Golden Book of

Management. The book was edited by L. Urwick and published by

Newman Neame Limited in London. This work was published under the sponsorship of the International Committee of Scientific Management which has its headquarters in Geneva Switzerland. The development of management is traced by presenting the contributions of these pioneers in chronological order.

Early objectives of scientific management. Some aims of sci­ entific management (32, p. 870) developing early in the twentieth century were (1) reducing industrial processes to units for scientific observation and experimentation, (2) developing standard times for various operations, (3) instructing workers in the best methods fo achieve the standard, (4) removing planning from the workmen's responsibility so that he could concentrate on performance, and

(5) providing incentives through benefits from increased productivity.

Maximum output was emphasized through methods designed to elimi­ nate waste and inefficiency. Central concepts which emerged were the need for an objective, a managerial process and the intelligent

use of human effort.

Gilmer (26, p. 74) stated that one of the aims of scientific management was improved efficiency through time and motion study.

This was a major innovation in attempting to improve the performance of routine production-line tasks. This technique has been widely accepted in industry because of its demonstrated efficiency as well as the fact that it provides unique and legitimate work rules. Scott (58, p.25) presented the central goals of scientific management pioneers as improving efficiency through better management and greater collaboration among those working in industry. The latter objective was sought through promoting a true mutuality of interests.

The early pioneers of scientific industrial management (58, p.27} had almost Utopian views as to its outcomes. It was claimed that it would improve work, increase wages, improve efficiency and increase overall productivity. Little attention was paid to the fact that increased emphasis on standardization might produce adverse effects on employees. The prevailing attitude, to the contrary, was that standardization was to lead to a higher degree of employee happiness and self-realization.

Human relations. Taylor (63, p.40) limited consideration of the human element in industry largely to providing economic incen­ tives. In fact, much of the emphasis along this line, in early scien­ tific management was limited to the wage problem and improving physical working conditions. These factors were considered to be the most important,if not the only, means of motivating employees.

The Hawthorne studies revealed that physical working condi­ tions are not necessarily related to employee productivity. These investigations will be discussed in greater detail in a later section. The studies indicated that in dealing with complex human beings, one cannot change one condition without inadvertently altering others.

Employees in the experiment seemed to produce more because they were given special attention in taking part in the study. Pleasant and free working conditions created by the supervision provided as part of the experiment were also given credit for increasing production.

Villers (63, p. 44) noted that many human relations concepts have been verified on the basis of scientific research. Some ideas which are fairly well established include these (1) employees are motivated by multiple factors of which money is only one, (2) com­ munications can be improved by fitting the organization and proce­ dures to human behavior, and (3) the structure of modern industry can be adjusted to improve working conditions. The latter idea refers to providing for such things as leisure time, changes of pace and making the work meaningful to the employee.

Management's basic role (58, p. 63) is not to promote the happiness through human relations programs. Such programs are jus­ tified only if the true economic function of the enterprise is not slighted. This was not meant to discount the value of practicing good human relations. The consideration of the human element remains a constant concern because Western culture holds human 37 dignity and man's supernatural destiny as basic tenets. Management's immediate attention is focused, however, on realizing its functional economic obligation.

Current scientific management. The central concepts of sci­ entific management (32, p. 870) have endured and evolved into modern theories, philosophies and problem solving concepts. The ideas now universally applied to various levels of management and varied fields of industrial enterprise include (1) setting goals compatible with the economic, social, technological and political environment, (2) the necessity of developing policies to guide decision making and behavior,

(3) efficiently and effectively achieving objectives requires planning,

(4) the proper relationship of work, people and work environment requires effective organizing, (5) people need to be motivated or directed to achieve organizational objectives,and (6) people's per­ formance must be controlled to achieve objectives according to plans.

Management thinking has developed by being integrated with contributions from mathematics, psychology, sociology and anthro­ pology. Mathematicians and economists have made contributions in accomplishing the tasks of decision making, planning and controlling.

Research findings provided by sociologists and psychologists have increased knowledge concerning leadership, human motivation and organizational relationships. 38

McFarland (46, p. 30) presented several illustrations of scientific

management in present day industry. These current applications were

(1) incentive wage payments, (2) increased applications of research and analysis techniques, (3) improved work methods and production techniques, (4) personnel management based on advances in the

social sciences, and (5) improved the process of administration of providing reliable facts and principles. The overall effect has been to establish scientific industrial management as a recognized disci­ pline involving a wealth of subject matter. It is not a rigid formula of things to do, but rather a philosophy, an approach or a method of thinking underlying management behavior.

It has been noted that industrial growth resulted from a combina­ tion of factors, namely: division of labor, increased use of machinery and growth of enterprise. Management's role was viewed as an

economic resource, a system of authority, an elite, a provision for

leadership and as a promoter of community improvement. The role played by management may well be all of these, varying in degree from time to place. Muchof the work of early pioneers in scientific indus­ trial management has endured and evolved into modern management

philosophy and procedures. Human relations efforts have had a salutary effect in promoting consideration of the human element in industry. Management's first responsibility, however, is to fulfill its primary economic obligation. The next step is to examine some recent developments in industrial management. CHAPTER III

RECENT DEVELOPMENTS IN INDUSTRIAL MANAGEMENT

The subject which follows deals with industrial research/ more scientific management practice, the need for creativity, international management development and trends in the field of industrial manage­ ment. These topics appear to be receiving an increasing amount of interest as industrial management continues to mature. The writer has made no attempt to explore the complex mathematical systems which are emerging as effective management tools.

Management of Industrial Research and Development

The trend in recent years (40, p. 352) has been for industry to spend increasingly for research and development. This has been true because industry plans to expand its sales by developing new ideas, new products, improved products, new uses for old products and new methods and processes of production. In this connection future sales are often planned for products that have not yet been pro­ duced and may not yet have been developed. Although engaged in research, R&D must work informally with related departments to insure the continued success of its efforts.

40 41

One writer (18, p. 139) noted that 20 billion dollars are spent each year on a world-wide basis for research and product develop­ ment. Long-run profitability of any company must be based on a permanent process of research and development. It has been sug­ gested that we are now in the early stages of "the research age." A major managerial task now seems to be learning how to manage re­ search. This involves efficiently managing the production and dis­ tribution of knowledge for widespread use.

Frederick R. Kappel, Chairman of the Board of the American

Telephone and Telegraph Company (18, p. 12), noted the relationship between free markets and industrial research as follows:

... the free market is the best hope for proper selec­ tive use of science and technology in the public interest. Competition for public favor, in my judgment, is the single most important factor in making the results of research of greatest use to the greatest number. The forces of the market powerfully demand that technology keep in touch with human needs and produce what people deem of value. They likewise subject technical effort to the harsh discipline of profit and loss, a discipline that has no patience with the fantastic and is always at war with waste...

This quote indicates that private industrial research either by indi­ vidual companies or research institutes is a mainstay of free markets.

Basic or pure research. Pure research, as defined by Keith and

Gubellini (40, p. 353), is that type of investigation that has no immed­

iate or practical application in view. Such research has no current 42 commercial value but may become useful in the future. As a matter of fact, most of our present technology is based upon pure research that was accomplished sometime in the past. The purpose of pure or fundamental research is to seek systematically for additional knowledge, information, facts and laws. The central purpose of pure research is to increase man's store of knowledge. It is sometimes referred to as indirect research because the ultimate goal to be achieved is not known.

There are many cases in which research workers in industry

(10, p. 737) find it necessary to conduct investigations not directly related to products. This may involve finding out all there is to know about a particular substance or what takes place, and why, when changes are made in one or more substances. Studies might also be aimed at assessing the essential conditions under which certain products are used. The answers to these types of problems may lead to later practical applications. The directions in which this research is to be pursued (9, p. 118) are frequently not prescribed

in advance because the study takes various directions as work pro­ ceeds and as promising leads are uncovered.

A great deal can be done (32, p. 48) in planning the efforts of basic research. One basic prerequisite is to enlist the participation of 43 researchers who have appropriate fields of scientific specialization and research interests. Some sorting of research alternatives and directing efforts toward desired research objectives is also very impor­ tant. It may be a good policy to balance the excitement of finding new knowledge with its importance and significance at the end of the research road.

Applied research. An investigation aimed at solving an immed­ iate problem is referred to as applied research. It was related by

Keith and Gubellini (40, p. 354) that most research conducted by in­ dustry is applied although some firms maintain extensive programs of pure research also. Applied research is conducted in order to develop a product or a process that has immediate commercial value. Such research might also be aimed at improving existing processes and products.

Applied research (9, p. 118) in industry embraces such divisions of investigation as marketing, materials, products, equipment and processes. The chief objectives of market research are to check on consumer acceptance of products, to develop data for manufacturing

schedules and prices and to seek out new ideas for development.

Materials research is primarily concerned with the discovery and

improvement of materials which may lead to new products or the 44 improvement of old ones. Product research seeks to develop new product concepts in addition to new and original uses of existing products. Research related to industrial processes is usually directed toward developing or improving methods of manufacturing, tools, equipment and handling devices that tend to increase productivity.

A large proportion of company dollars spent in research (64, p. 86) is going for applied research. Management feels that it can justify large sums of money only for research that is leading toward a definite product or process. Applied research, however, is investiga­ tion based on fundamental research accomplished earlier. Undue emphasis on applied research, in the long run would bring a drought of new ideas and products. Large American companies budget approx­ imately five percent of the sales dollar to research, of which less than one-half of one percent goes for fundamental or basic research.

Development (31, p. 211) generally follows basic and applied research. It takes an idea that has been discovered and refined from research and carries it to the point cf design engineering where blueprints and specifications are made. Development is the most expensive part of R & D and involves preparing models, establishing pilot plant operations and trying out the product with selected customer groups. The costliness of this activity results from such 45 factors as the use of expensive equipment, the setting-up of pilot plants and junkets to trade centers.

Programing. The planning or programing of research and devel­ opment (10, p.891) may be different in application from other manage­ ment programing. It is necessary to be cognizant of the fact that attempts at forecasting project completion dates are often unrealistic.

The setting of targets is still beneficial, especially if done by the participating scientists themselves. Projects should be programed on an annual basis with some more elaborate projects phased over a three to five year period. Such programing is necessary to determine the scientific manpower required as well as how the research bud­ get should be formulated. The program should set up priorities and specific target dates for certain projects to provide guidance for the scientific teams. Steps should also be taken to eliminate the unnec­ essary overlapping of work, repetition of unproductive research paths and the waste of time resulting from unsystematic approaches.

Two methods of conducting research within an enterprise (9, p. 126) include (1) utilizing the suggestions and ideas that originate with employees or those available to the company from itinerant inventors, and (2) conducting research entirely within a functionalized research department. Both approaches are essential to getting the most from 46

research. A coordinated dual approach encourages employees to

offer ideas, initiates two-way cooperation between the research de­

partment and the supervisory staff, helps the research department assist foremen and employees in developing ideas and obtaining

patents and follows a consistent policy of equitably paying for ideas

and inventions that serve the company.

A research department may be administered by a director of

research or by a research policy committee. Whatever method is used,

the advice and cooperation of the engineering, production, cost and

sales departments are essential. It must be kept in mind that products

not only have to be conceived and developed, but alst must be manu­

factured and sold in a competitive market.

The budget of the research department may be based on a per­

centage of sales, the sum of project-cost estimates, a lump sum

subject to revision according to needs or probable financial returns.

Each of the above methods have some drawbacks, but the best method

of budgeting may be to use the summation of approved-project-cost

estimates for a given period as a base. Additional worthwhile pro­

jects which might be forthcoming during this period may be alloted a

lump-sum which is over and above the original base. This eliminates 47

some of the uncertainties associated with the other methods and at the same time provides a cross check in controlling expenditures.

Expansion. When a company determines that its corporate goal

is to be growth, research and development plans assume the utmost

importance. Healey (45, p. 66) stated that in the case of the smaller

company, its very survival may depend on a research and development

program aimed at getting promising products on the market as quickly as possible.

Research and development should play a vital role in planning for needed plant expansion. Transforming a new product idea into a

product (18, p. 178) with a market share usually takes from two to

four years. To complete a plant expansion which was earlier planned

and accepted also takes two to four years. Short and medium range

planning of management is limited because for approximately three

years the existing products, production apparatus, personnel and

organization are relatively fixed. Research and development must

make its contribution to new products and planned plant expansion

on a more long term basis than say two years.

Plant expansion may be closely interrelated with research and

development. Such expansion usually involves the installation of

new equipment and machines to handle new procedures and processes 48 developed by R & D. Plant expansion may be both caused and facil­ itated by the results of research and development.

Scheduling. There is some guestion as to whether it is possible to schedule or establish chronological times when each phase of the research and/or development project should be completed (64, p. 95).

At best, it is difficult to schedule fundamental research. The essence of this research is delving into the unknown so that there is no assurance that any tangible goal will ever be reached. Applied research is more definite, but it Is still difficult to develop and meet a definite time schedule. This tends to indicate that scheduling should begin with the development phase of any project. The product needs to be clarified and the basic technology established before scheduling can occur in a realistic fashion.

Research and development work (10, p.891) requires that pro­ visions be made for test production, pilot manufacturing, transfer of normal manufacturing and for technical control of the latter. This is basically a matter of planning or scheduling systematic arrangements between research and production management. Generally speaking, it is seldom possible to conceive, research and develop a new product and have it ready for the market in less than two or three years. The need for field testing may mean another year or two before full-scale manufacture can get under way. 49

There are few medium-sized companies (18, p. 177) that have the resources to perform scientific research. In this case product development may be a matter of consistently following the accom­ plishments of competitors. These companies may, however, collect, weed out and develop new product ideas. A serious risk is taken if insuffi­ cient time is spent in developing the product and the product is let onto the market only half finished. The idea could be lost to the com­ petition which would then complete the development of the product.

Outcomes of Research as an Industry

Commercial laboratories (9, p. 116) such as A. D. Little, Inc.,

of Cambridge, Massachusetts, and the Battelle Memorial Institute

in Columbus, Ohio, are frequently employed by manufacturing enter­

prises with special research problems. Such laboratories, which

specialize in industry-research are utilized for problems requiring

special equipment or technical skill and a combination of many different

fields of knowledge not possessed or readily available in the ordinary

enterprise. Industrial research problems are also taken to such firms

when time and other factors do not permit a company to conduct its

own investigation.

Industrial research is a never-ending process with a delayed-

action consequence. Du Pont, for example, spent 12 years in research 50 and development to get nylon into production. Tomorrow's profits

(33, p. 7) depend heavily on today's research. Research expenditures increase current costs and lower the profits from operations but in future years a company may reap the fruits.

Brech (10, p. 897) noted that there are some fifty Research

Associations covering a wide range of industries in Great Britain.

The Associations are a cooperative effort by a group of firms, inter­ ested in the field concerned, in which a permanent laboratory and staff are maintained. The research undertaken is essentially prac­ tical in that it concentrates on the problems which members feel to be of greatest industrial importance. The studies relate to mater­ ials, processes and products as well as fundamental research inves­ tigations. The Associations provide research activity on a national scale which means that any company can have access to research and development facilities through their membership.

Increased production. The purpose of process research (20, p.236) is to develop new or improved production methods. One example would be the studies of the American Rolling Mill Company which resulted in the development of the continuous rolling process. These new or improved processes often permit more rapid production. The trend toward a greatly increased production capacity has accompanied 51 more and more mechanization and automation for many years. Much of this mechanization and automation can be traced back to earlier industrial research efforts.

Research (27, p. 33) is designed to search out or develop the best materials, procedures, processes, products and services which all tend to facilitate manufacturing operations. It also seeks to se­ cure modern, efficient motive energy which is a major impetus to increased production.

Cut production costs and improve products. Research Associa­ tions in Great Britain (10, p. 897) conduct investigations which lead to more efficient production, better quality products and to the economical utilization of manpower and materials. Research becomes a kind of industry of its own in which investment in brains is calcu­ lated to yield exceptional dividends.

One of the basic reasons (10, p. 736) for research and develop­ ment activities is an attempt to improve existing products. This might involve efforts to improve the "sales-appeal" of the product through such factors as better appearance, texture, flavors, aroma, durability or operating efficiency. Another reason for this activity is the desire to reduce the cost of existing products. Production costs can be lowered by finding cheaper but equally suitable raw materials or through 52

more efficient means of processing. This allows for selling at reduced prices thereby increasing the volume of sales.

The purpose of product research is to discover new products or new uses for old ones. The information gained from fundamental re­

search is applied in this endeavor. Davis (20, p. 236) stated that the

speed at which steel can be cut is a large determiner of the cost of

machining steel parts. Research at the Battelle Institute developed a leaded steel which has high machinability without sacrificing other desirable characteristics. Such a development can cut production costs and effect many changes in metalworking processes.

Industrial research (27, p.33) is partially justified on the basis that it can find ways of reducing the cost of materials, operations and services. It is also felt that it can provide a better quality and

standardization of materials, operations and services. The inevitable result of the above is a reduction in production costs as well as

improved products.

Maintain competitive technical position. The competitive

attitude in free enterprise can be a vital stimulus to industrial research

efforts. Some results (18, p. 146) of this competitive effort include

high quality, improved distribution, more points of sale, extended

services after sales, prompt delivery, arrangements for time payment. better packaging, the promotion of product, facility for replacement parts and publicity that reveals product superiority. Competition compels companies to maintain a research and development effort on their own or to contract research projects to private industrial re­ search institutions.

Products that can provide customers with unique or superior values at a competitive price are in a superior market position.

Companies that develop such products may be able to obtain a higher percentage of profit on sales. The financial ability of large companies to conduct organized industrial research may provide a competitive advantage. The small concern (20, p.237) can counteract its disad­ vantage however, by using university and private research facilities on a contract basis. Opportunities might also arise to manufacture a new product under a license from the holder of the patent.

Quinn (55, p.45) noted that one of the indirect products of over­ all research effort was providing for survival in a changing market or

competitive technological situation. A company that fails to make an investment in research may soon find newly developed materials, processes and products are pricing its products off the market. In

many industrial fields research efforts are almost a necessity in

planning for the future. 54

Louis Armand, a manager from France (18, p. 6), wrote in a paper presented to the 13th International Management Congress in 1963 that scientific research has grown tremendously as one part of the phenomenon of technology. To a large extent, this is due to the efforts of individual firms to maintain their competitive technical position. Scientific research has grown, in a mere quarter century from individual laboratories to veritable complete enterprises. The growth and structure of such enterprises rival big business itself in the breadth of structure, capitalization and depth of organization.

Net profit on new processes and products. Research and devel­ opment efforts (10, p. 737) afce sometimes undertaken in an attempt to create new products. The activity may involve following up sug­ gestions made by marketing personnel regarding desirable new products or developing new products from a purely conceptual basis. Some useful products are discovered accidentally during research directed toward another problem.

The desire for profitable new processes and products compels management to assign research the task of discovering desirable substitutes for present materials. The substitute materials may be less expensive as well as being cheaper to process. Research (27, p. 33) is also expected to provide profitable results through developing 55 new materials, procedures, techniques and products. Another ob­ jective of research is to develop new uses for by-products and waste materials.

Quinn (55, p.43) noted that research results in economic gains only as an indirect product of the effort. It does not directly produce savings, profits or sales but merely provides the technology which makes such economic gains possible. It remains for the rest of the enterprise to exploit these opportunities for economic yields.

Increase health, safety and longevity. Research and development

(42, p.31) is sometimes assigned the task of helping manufacturing departments solve unusual technical problems. It may be a matter of facilitating production, but in many cases health and safety consid­ erations are involved. Special machine guarding may be required or a better means of collecting dust or fumes from a given process may be necessary.

Many of the safety devices presently used in industry were originally developed through research. The physical environment of industrial plants has been improved by providing such things as better noise control, a reduced number of hazards and safer equip­ ment. One of the basic considerations in developing any new material, process or product is the health, safety and longevity of the employees 56 who are to be in close contact with these substances day in and day out. Quinn (55, p.47) stated that one of the indirect products of research is improving safety for personnel.

Develop esthetic qualities. One purpose of industrial research

(27, p.33) is to increase the sales appeal of products. It is a com­ monly accepted fact that in order for industrial products to sell, they not only must be functional, but also need to be appealing to the eye.

Such design considerations are usually of central concern during the development phase of a product when models and prototypes are being constructed.

The physical form a product can take is limited by what is prac­ tical in processing and fabricating available materials. For example, thermo plastics are readily formed and fabricated by such processes as extrusion, blow forming, vacuum forming, injection molding and machining. Such materials provide for a wide variety of possible product designs having esthetic qualities. New processes and materials developed by research, therefore, open up new vistas in developing the esthetic qualities of products.

Invention as index to technological growth. One means of eval­ uating research efforts (55, p. 46) is to determine the number of patentable ideas, components, products and processes during a given 57 period. This not only provides information needed for potential new processes and products but helps eliminate the need to pay royalties for using patents developed by other inventors. Securing patents helps protect the growth of the concern by preventing competitors from using certain technology.

There are some difficulties in using patents (32, p.50) as an index of research output. It is difficult to accurately measure the true value of a given patent. The value of a patent may depend upon time which often makes its worth unpredictable. The results of basic re­ search, for example, may not find practical application for many years.

One basic index of the advance of technology is the rate of in­ vention. The current rate of invention is high due to the increasing emphasis being placed on basic research. This is partly the result of the growth of large corporations which can afford to invest funds in basic research. The development of large private research institutes has also been a prime factor.

Assist in long-range planning. The value of research (55, p.46) may be indirect in providing information needed in planning for long- range growth of the concern. Data may be provided which assists management in selecting from among the most exploitable ideas and designs resulting from research. The results of research may also help identify future possible technical difficulties. 58

Market research (8, p. 398) is employed to obtain facts concern­ ing the potential size and nature of the market, customer preferences and new product development and uses. This information can be used to trace trends in consumer expenditures and the business climate.

Analysis of these trends often assists management in planning for both short and long-range objectives.

The continued search for a better and cheaper way to produce a quality product provides the technical knowledge needed to plan for the future. Long-range planning of profitable product lines can only be realistic when such information is available. Companies that fail to utilize such knowledge will find themselves copying competitors and eventually out of business because of obsolete processes and products.

The Integration of Science and Practice

The science of industrial management (63, p. 69) has grown in complexity to where it is almost standard practice to utilize concepts from such diverse fields as engineering, mathematics, economics and market, medical and social research. It is increasingly realized that the best way to reduce both recorded and hidden costs is through the further application and greater synthesis of all the specialized 59 skills involved. It is often found, for example, that the cost of engaging in research is usually determinable while the cost of not doing so is often the source of hidden costs. The contributions of science and various other discipline s are being applied in management practice today at a rapidly increasing pace.

Business Week carried an article (44, p. 44) concerning the in­ creasing use of science in management. This included the use of com­ puters, operations research and simulation. Approaches to simplify planning such as linear programing, PERT (Program Evaluation Review

Technique) and CPM (Critical Path Method) were also mentioned as being indicitive of an increasingly scientific practice of management.

Scientific thinking also extends to the efforts of social scientists in studying organizational structure, decision-making and the nature of corporate behavior.

Theoretical studies for decision makers. There is a growing rec­ ognition of the need for theoretical studies (63, p. 70) for those who are to make decisions in industry. The number of students en­ rolled in courses related to industrial management are increasing faster than in most other fields. Industrial executives taking advan­ tage of training courses offered by universities are growing in numbers in an attempt to keep up with the latest developments in the field. 60

The meetings held by many management associations and institutes are also indicative of this trend.

Management education (18, p.272) must provide for the study of tested generalizations from social psychologists, industrial socio­ logists and others analyzing business behavior and institutional structures. Such studies are needed to develop a realization that management's vital role in a dynamic economy is setting objectives which are compatible with the value system of society. There is a need for decision makers who are ethically and socially sensitive, responsive people in addition to being competent technicians.

Jean Predseil (18, p.296), director of a research center in

France, noted a scientist's reaction that due to rapid technological progress, the pre-eminence of specialists is passing away. The most necessary skill in future industry will be provided by men of deep and wide culture who can keep pace with rapid technological changes.

Integration of mathematical, physical and social sciences.

Operational research (42, p.908) is one good example of the integra­ tion of various sciences. This technique is a scientific aid to decision making in which strategic situations are formulated in clear and

quantified terms. The operational research team is composed of mem­

bers trained in a variety of sciences ranging from metaphysics to economics. The process utilizes the knowledge and insight gained from bringing experts from various scientific disciplines together to work on a given problem.

Dr. Julius A. Stratton, President of the Massachusetts Insti­ tute of Technology (18, p.48)/ noted that many efforts are currently being made to apply scientific approaches to the problems of man­ agement. This includes mathematical methods as well as underlying social sciences such as economics, psychology and sociology.

Such progress is predicated upon the belief that progress will result from an increasing capacity to make more precise measurements which will tend to reduce theory to quantitative results.

The chain of industrial processes that progresses from research to development, design, production, distribution and sales is a tightly coupled system. The chain constitutes a system for which we can construct electrical or mechanical analogs which have com­ parable properties of stability, feedback and response and controlled by a new industrial dynamics. Management and engineering are thereby drawn closer together and management itself gets ever more deeply involved in the mainstream of technology.

Villers (63, p. 70) noted that many attempts have been made to break the barriers that prevent one scientist from understanding the 62 work of another. A notable example is the efforts to integrate some of the concepts of the physical sciences with those of the social sciences.

There have also been notable attempts to bridge the gap between tech­ nical and liberal arts education thereby combining the two into a con­ cept of modern culture.

The Role of Creativity and Imagination

Uris (61, p. 14) wrote that brainstroming was one technique to promote new ideas. It was the brainchild of Alex F. Osborn, co- founder of the giant advertising agency. Batten, Barton, Durstine and

Osborn, and had its beginnings in the early 1930's. In 1953, Osborn's

Applied Imagination was published with the result that the virtues of the technique began to echo through the halls of management. Its greatest popularity was in the mid-fifties but it is still used, with success, in many cases.

The need for creative planning in charting the course of an en­ terprise was noted by Davis (20, p.56). This planning is a matter of determining what should be done, how it can best be accomplished, where it should occur, whose responsibility it is and why. It also is a matter of evaluating the factors, forces, effects and relationships necessary to accomplish the desired business objective. Creativity 63 is needed in coordinating the forecasts and plans of various depart­ ments .

A creative mentality (42, p. 48) is one of the most desired attributes in selecting employees for research positions. It was indicated that individuals having truly creative attributes should form the core of all true research organizations. This is especially true in situations where basic research is the objective.

Suggestion plans. Sixty years ago, Eastman Kodak awarded a young employee two dollars for an idea improving window washing.

From this apparent start suggestion systems have spread. The War

Production Board during World War II promoted such systems as important contributions to the war effort. Attitude surveys have also had some success in getting the thinking of many people on organi­

zational problems. There is a problem of motivating personnel to participate in suggestion plans because of their impersonal nature.

Bellows, Gilson and Odiorne (6, p.297) reported, however, that neither technique does more than supplement the flow of ideas that must come through normal channels.

A formalized suggestion system in which an employee's ideas are considered for adoption (12, p. 329) is a method of upward com­

munication. An employee who has suggestions adopted is thought to feel closer identification with the company and its problems which

is an important factor on job satisfaction. A good suggestion pro­

gram would include providing assistance on the types of acceptable

suggestions, prompt investigation Jand follow-up of suggestions and

providing publicity on awards by recognizing winners. A suggestion

or awards committee decides on the suggestions that are to be accepted and the amounts of awards. The just and effective opera­

tion of this committee is the backbone of the program.

Suggestion plans do work and work well when a proper phil­

osophy and a sufficient degree of energy and enthusiasm are applied.

Flippo (23, p. 381) noted that the National Association of Suggestion

Systems with a membership exceeding 1000 can testify that sugges­

tion plans designed to increase efficiency can and do fulfill a vital

role in American business. Suggestion plans that function properly

can be a stimulus to two-way communications. Plans need to be

carefully organized with regard to objectives, procedures for collec­

tion and evaluation and policies of compensation. Effort must be

made to acquaint employees with the values of the system and how

it operates.

Suggestion systems (37, p.586) should probably not be used to

obtain the views of employees regarding management methods and 65 policies. Appropriate grievance machinery might better provide this information. By keeping it separate, the suggestion plan can be used to direct the efforts of employees toward positive improvements which are advantageous to both employer and employee.

Rewards for accepted suggestions. Some companies have paid financial rewards for accepted suggestions while others feel it is a poor practice. The practice varies with those providing rewards from a small stipend to as much as 25 percent of the first year's savings derived from the suggestion. This percentage system has provided bonuses running into thousands of dollars in some cases.

The philosophy behind some suggestion systems (23, p. 380) is en­ couraging the submission of valuable and practical ideas for improving plant efficiency. The system should be administered by line manage­ ment rather than the personnel department. This is advisable because line personnel should be in a better position to accurately evaluate the worth of an idea and award a fair financial bonus. One of the largest financial rewards on record was a stipend of $30,000. Patent protection is also sometimes provided for employees whose ideas are good.

General Motors (63, p.231) has operated a suggestion system for many years. It awarded $31,000,000 to its employees for accepted 66 suggestions between 1942 and 1959. A sum of approximately

$4,000,000 was awarded in 1959 alone. The General Motors sug­ gestion system provides for a maximum award of $5,000.

International Management Development

The education of the work force (18, p.282) has been given credit for as much as one-third of productivity gains in the United

States since 1929. This source of productivity gains and economic growth will continue to be significant in this country and of vital importance in developing nations for a long time. Sound management development programs in developing nations must be based on a real­ ization that the education of the work force should be enhanced to provide for the effective utilization of managerial skills.

Dr. Charles H. Malik (18, p.286) noted the desperate search for competent men as characteristic of every new nation. Every effort is made to utilize existing talent by training people at home, sending

students abroad to study and employing foreign experts. Such crea­ tion of leadership in new nations is a painful, inefficient and slow process requiring the help of a host of sciences and disciplines.

Four principal ways of generating and expanding high-level

manpower resources in developing nations were noted by Harbison and Myers (29, p.91). These were investment of foreign capital in the form of technical and managerial resources in local projects/ impor­ tation of high-talent manpower from abroad for locally owned and administered enterprises, sending nationals abroad for education and development and developing high-level manpower resources at home. In most cases some combination of these means should opti­ mally be employed for dynamic manpower development.

The problem of the low status of business men in developing nations (18, p. 20) was noted. Far too often, business is viewed as a career only for those unable to qualify for government service, academic life or the professions. Three suggestions were made for attempting to improve the status of a business career: (1) earning the respect of leaders in other fields by conducting business on the highest ethical standards, (2) working continuously to tear down the wall which often separates the leaders in business from those

in the academic world, and (3) getting students studying abroad in­

terested in careers in industry and commerce by providing opportuni­

ties for on-the-job training. This will require sustained efforts

for years to come in many places where tradition is strong.

Basic need in developing nations. Hoffman, Managing Director

of the United Nations Special Funds (18, p. 20), spoke at the CIOS 13th International Management Congress concerning the need for management training in developing countries. It was stated that a country" s capacity to utilize physical capital effectively depends on the availability of trained human resources. High level managerial skills do not appear automatically or magically as dams, roads, factories, hospitals and airports become reality. Concentrated efforts are required to develop the needed high-level manpower through such methods as management institutes, management corps, training on the job and training abroad.

Harbison and Myers (29, p. 87) stated that the capacity for a country to industrialize is generally regulated by its ability to find, develop, commit and effectively utilize the high-level human re­ sources required by modern industrial enterprises. Countries that are latecomers to industrial development are strongly impelled to use modern machinery and processes. Technologically it is possible for them to jump from the most primitive to the most advanced stages in the space of a few years. The required managerial resources, however, will be forthcoming only as a result of meticulous planning, wise investment in education and concentrated efforts to use scarce human skills effectively. 69

Newly industrializing societies (29, p. 116) should take advan­ tage of and fully utilize the high-level resources of the more advanced countries. Primary emphasis, however, must be placed on developing manpower resources at home. JThis necessitates an educational system including quality universities, technological institutions as well as carefully planned programs for continuing on-the-job managerial development. Developmental institutions which are appropriate should be utilized whether they are internal, foreign or international.

Several desirable steps for manpower planning in developing nations were presented by Harbison and Myers (29, p.90) in brief:

1. An objective appraisal of the probably present and future requirements for the various skills needed to implement industrial growth.

2. A priority listing of development programs and projects and of their respective needs for managerial and technical skills.

3. A survey of the sources of available skills at home or abroad and an outline of the alternative methods of generating the required talents.

4. A proper time perspective to formulate a compre­ hensive program which will deal both with the near future and with long-range manpower requirements of economic development and industrialization.

5. Effective coordination of the various public and private programs for generating high-level human resources. 70 6. Continued evaluation of the effectiveness of the programs and institutions for the development of high-level manpower.

Effective industrial growth will be forthcoming only through adequate planning and continued evaluation.

Alsogaray, former Minister of Economy in Argentina (18, p. 33), warned of the dangers of centralized state planning of development.

Few realize that from the apparent anarchy of the free market system rises a harmonious whole. It has a global efficiency based on the constant pressure which arises from competition and the mechanism of prices, the success of some and failure of others and the alert­ ness of thousands of people and enterprises trying to devise new methods and even new goals.

The true basis for development is to establish a firm environ­ ment within which enterprises can move freely as decisive factors of economy. Alsogaray (18, p. 36) stated that the rest will be done or not done, to the degree of energy and impulse of the working men of the determined country. It also depends on individual enter­ prise and the free and spontaneous movement of market laws, compe­ tition, mechanism of prices and all that is involved in a free modern economy with a social sense.

A basic need (18, p. 273) over the next decade is to enthusias­ tically endeavor to develop additional teaching resources and 71

instructional materials for management development. This is an

especially pressing problem in the developing countries affiliated

with CIOS.

Magnitude of world-wide efforts. The International Management

Congress has beeniheld every three years since the Prague meeting

in 1924. The meeting for 1957 took place in Paris. The 1963 meeting

was held in New York City. In 1966 the 14th Congress is to be

held in Rotterdam with the Dutch affiliate organizing the proceedings.

Ormsbee W. Robinson (18, p. 272), Director of Educational

Affairs of International Business Machines, noted some ways in which

industrial leadership is developed in various countries. These in­

cluded the voluntary efforts of managers themselves through their

various associations, the contributions of universities and finally

programs initiated by individual firms.

Assistance in management development is often sought from

overseas by associations, companies, universities and governments.

Educators and consultants from America, United Kingdom and Aus-

traliz have made significant contributions to foreign or Commonwealth

centers. Such an international exchange of students, managers and

teachers has been beneficial to everyone concerned and should be

continued. It is necessary to recognize, however, that national differences do exist and that creative contributions should result from the interaction of diverse viewpoints.

One striking feature (18, p.273) of the reports from affiliate members of CIOS was the growth of leadership provided by univer­ sities in various parts of the world. During the past two or three years in the United Kingdom seven universities have launched post­ graduate courses of one year's duration. More than 5,000 executives have attended joint university-industry management training centers over the last five years in Belgium. The Faculty of Letters in the

Center of Productivity in France has provided the first link between the scholastic world and industry. Another example is the estab­ lishment of the Peruvian Institute of Management in 1959 and the later creation of a human relations and productivity institute within the University of San Marcos.

Management education in various countries is increasingly recognized as one of the principal means of effective manpower planning. It is one means by which a firm provides for its perpetua­ tion through the development of its talented and able young people.

The meeting of responsibilities in management education by managers also helps to enhance the manpower resources of their particular countries. 73

Role of the United States branch of the world organization.

The American member of the International Committee of Scientific

Management (CIOS) is the Council for International Progress in

Management (CIPM). It is composed of some twenty-four American

Management Societies. It endeavors to make known to American management, the thinking and achievements of management move­

ments in other countries, and at the same time make available abroad new developments in management in the United States. The

specific objectives of the Council for International Progress in

Management (21, p.23) are to increase the contribution of scien­ tific management to the basic needs of society; acquire and project new ideas; widen areas of agreement internationally; apply tested

management principles; cooperate with government constructively; promote management in the public interest; and develop understand­

ing of the strength of the management movement.

The President's summary report (34, p.2) stated that CIPM's

central objective is to assist managers in all countries with man­ agement problems in such enterprises as businesses, educational

institutions, labor unions, governments and non-profit associations.

In 1961, 2,000 managers from seventeen countries were exposed to a

wide range of American management principles under the Council's 74 international exchange activities. The Council has also promoted and assisted seven new management associations from Africa, Asia, the Middle East and Latin America.which joined CIOS in 1962.

The 1962 overseas management projects included twenty executives, specialists and professors individually supervising projects which varied from a week to six months duration. Another part of the program consisted of four-man teams conducting six- week seminars in another country. These activities involved eleven different nations in addition to twenty-one other groups who studied in the United States under their own company's or government's sponsorship.

Role of the International Committee of Scientific Management.

The International Committee of Scientific Management is referred to as CIOS in every language. It is a non-political, non-profit organization with its head office in Geneva, Switzerland. Affilia­ ted members include forty-one countries of Europe, the Western Hemis­ phere, the Near and Far East, Africa and Australia.

The central objective of the Committee is to further the prin­ ciples and methods of scientific management on an international scope. This is based on the conviction that the application of scientific management will raise the standards of living in all nations 75 by providing a more effective utilization of human and material re­ sources. The Council holds triennial Congresses in the different affiliated countries to provide an international interchange of the latest management thinking.

The 13th International Congress held in New York City was a five-day conference. This Congress was attended by over 3,000 leaders in business, management, education and government. The proceedings include the full texts of papers presented to the Congress by more than 170 of the world's respected management experts. The book also includes the names and addresses of over 3,000 Congress participants, thus, promoting intercommunications among various specialists.

Trends in Industrial Management

Rockefeller, President of The Chase Manhattan Bank (18, p. 2), presented a paper at the 13th International Management Congress regarding trends which are challenging management. The first challenge noted was our changing technology. For example, scientific research and development in the brief time span of the last two decades has doubled the world's storehouse of knowledge. It wa s noted that a given electronics manufacturer is doing fully 80 percent of its business today in items that did not exist fifteen years ago. An additional challenging trend facing management was the grow­ ing complexity of the environment in which it must operate. Many factors contribute to this changing environment which include the mounting competition in the world marketplace, the expanding in­ fluence of government in business and the changing role of organized labor. Another factor is the growing expectations of the public that

industrial enterprise will not only seek to maximize profits but to operate in a way which is wholly consistant with the best interests of society. The manager, is, therefore, increasingly called upon to consider many more variables in decision-making.

Bellows, Gilson and Odiorne (6, p.279) noted a trend toward a manager of situations rather than the hard-nose manager, the human relationists or the pressure-for-results types of the past. The manager of situations was characterized by such statements as the following:

He is judged by what his followers do ... He exhibits no single executive personality pattern... The good manager makes things happen... He is more of a generalist than in the past... He works more through organization than by himself... He is oriented towards results and responsibility...

This indicates a growing synthesis of the best of several traditional

approaches to management. The Stieglitz report (59, p. 74) noted a trend toward a growing clan of organization planners. These planners study, analyze and recommend. Final decisions on company structure and the personnel that make up the management organization remain the prerogative of top management. Once management has determined company objec­ tives and stated its policies, the organization planner's job is to —

1. Inventory existing personnel to find out who does what, who reports to whom, who has authority, and how much.

2. Draw up an ideal organization chart as a long-term project.

3. Determine how to shape the existing organization closer to it — normally step-by-step through short-term "phase plans."

Such planning will likely continue to grow in importance as organi­ zations become larger and the rate of technological advance con­ tinues to increase.

Better communications. Almost any textbook dealing with per­ sonnel in industry has an extensive section pertaining to communica­ tions. The supervisor, being first-line management, is increasingly viewed as a key factor in promoting two-way communications in

industrial concerns. The thousands of dollars spent on house organs is also indicative of increasing efforts to communicate with employees.

The gradually rising educational levels of employees in industry is 78 making a more sophisticated group that desires vital information with which to make decisions.

"The communications revolution" was the phrase used to refer to the trend toward better communications by Sylvester L. Weaver,

Jr. (18, p. 192), President and Chief Executive Officer of Subscription

Television, Inc. It refers to the vastly increasing amount of data that can be handled and the capability of making it available at many locations by the push of a button and at the speed of light. A central point is the fact that the managerial function can exist almost any­ where and still have access to the information needed for decision­ making that used to be limited to headquarters.

Melvin L. Hurni, Manager, General Electric Company (18, p. 206) noted that information lind concomitant knowledge are powerful inte­ grating forces for bringing the many and varied skills of personnel to bear voluntarily on the task of sensing and accomplishing business opportunities and goals. There is a trend to be increasingly concerned with providing appropriate information at the various levels of the business organization.

Management is coming to realize that employees will make more

intelligent decisions if they are informed. The trend is to pay more attention to developing effective communication channels both within 79 the organization and between the enterprise and the public. Commun­

ications will receive more attention as the mass communication media

continues to expand, educational levels rise and industrial organiza­ tions become larger and more complex.

Constitutional management. Harbison and Myers (29, p. 62) noted that constitutional management is showing a concern for known and

consistent policies and procedures in dealing with employees. Pro­ vision is made for grievances to be brought to the attention of suc­

cessive levels of management. In this management approach the rule-making power of employers is shared in a "constitutional" manner

with other agencies such as labor unions and government.

Management (23, p. 25) is no longer viewed as being solely

responsible to the owners of the firm. The present picture presents

more of a balance of obligations among adequate profits and stock

dividends, reasonable wages, interest to bondholders and prices to

customers. Industry is also more aware of its obligations to a

nebulous public, in order to preserve the profit system without undue

government interference. Management must adequately handle each

of these responsibilities if the profit system is to work harmoniously.

The human approach to labor (23, p. 26) is dominant today and

is becoming increasingly widespread. It is characterized by attempting to establish a working relationship with labor based on mutual coop­ eration in the solution of common problems. It has led to the creation of personnel departments which seek to integrate the goals and ob­ jectives of all interests toward the basic goals of the organization.

Management is seeking this range of mutual interests by sharing its decision making powers on a "constitutional" basis.

Decentralization. Expanding industrial enterprises in countries planning their general economic development requires decentralized administration of some kind. This decentralization is necessary to overcome the mounting organizational frictions and loss of energy which are inherent in any highly centralized system of management.

Harbison and Myers (29, p. 47) stated that extreme decentralization would cause the organization to disintegrate. Attaining a proper bal­ ance between centralized control and decentralized administration may be one of the most intricate problems inherent in modern indus­ trialism.

There is a trend toward merging companies into large multiplant corporations (9, p. 38). One of the problems accompanying these mergers has been the extended line of communication and action. The problem is greatly intensified if the products of the plants are widely diversified. The above situation has led to the decentralization of staff functions in large organizations. This provides each plant or separate operating unit with its own staff departments which are responsible for all operations within the given decentralized unit.

Certain functions may be retained by the head office in some com­ panies, but the trend seems to be toward decentralization whenever possible.

According to the NICB report as viewed by Business Week

(59, p. 73) the organization of the typical United States corporation is changing in the following ways:

1. Companies have been dropping functional organ­ ization for divisionalization, usually on a product basis, as they diversity and face new technological and marketing problems. Old subsidiaries and new acquisitions often lose some of their former autonomy in the process.

2. The corporate staff has begun to play a changed and more elaborate role, emerging as a major force at company headquarters — a process sometimes called recentralization.

3. Some companies have introduced a new executive level at the top — general executives responsible for two or more divisions (more common for product divisions than for corporate staff divisions).

4. To help the chief executive cope with expanding responsibilities, his office has been enlarged and elabor­ ated — through personal staff assistants, or upgrading other top executives to share his function in an executive council or "office of the president." 82

These seem to be developments which are meant to cope with some of the problems resulting from decentralization of operations.

Villers (63, p. 130) noted that executives must learn to keep a balance between the two extreme forms of organization.

Democratic and participative. The democratic-participative management philosophy stems from the conviction that, in a political democracy, free people respond best in an organization when they can participate in the process of decision-making on matters that directly affect them. The essence of this philosophy of management is the assumption that people are not lazy, do not have to be pushed to work and are not simply after more money. Harbison and Myers (29, p.63) noted that this type of management is still rare because in most cases

it requires a complete reorientation of managerial philosophy in deal­ ing with workers.

The limited research (-18, p. 110) available indicates that such programs as committee management, participative decision making and multiple management are encouraging trends. They involve en­ larging the scope of influence for many people in the organization.

A willingness on the part of the top to be influenced by subordinates

is also required. The studies have indicated that such involvement would have beneficial results for both the organization and the 83 individual. O'Donnel (18, p. 78) noted similar trends toward positive motivation, acceptance, involvement and commitment of members of the organization.

Douglas McGregor (59, p. 72), the author of The Human Side of Enterprise is a forthright critic of what is called "authoritarian" management. It was argued that such conventional organization leaves untapped and even frustrates many of the capacities that human beings possess. These critics are given such names as behaviorists, participationists and human relationists. Chris Argyris (59, p. 73) supported McGregor by stating that individuals could grow, be more satisfied and enjoy better mental health, except for the demands of organization as management now knows and uses it. Proposals in­ clude more employee-centered leadership, enlargement of individual jobs and more reality-oriented managers.

David Packard (18, p. 265) of the Hewlett-Packard Company noted a trend in management thinking toward directing more effort in the effective managing of human resources. . The value of employees is basically their ability to think, to innovate and to bring a greater degree of imagination to their jobs rather than more physical energy.

The best can be brought out of people only when they operate under freedom where participation and the utilization of their intelligence 84 are encouraged. Some guidance may be necessary by providing general objectives such as reducing the cost of a job, improving the quality of product or imporving an industrial process. After such a stimulus is provided the employee must be allowed to work at the task in his own way. Motivation should also be provided by seeing that the contribution of the individual is recognized throughout the plant.

Stable production and employment. The trend is toward greater emphasis being placed on the planning phase of enterprise because of the large investment in capital plant and equipment which involves a serious element of risk. Machines, once they are designed and produced are quite inflexible and can be changed only within a limited range. Both short-term and long-term planning for the future course of the firm will be given increased emphasis with each passing year. Such planning is essential if reasonably stable production and employment are to be maintained.

The trend toward growing international economic competition

(18, p. 4) compels the successful manager to have a truly global perspective. The company's domestic and foreign interests must be viewed as integrated parts of an overall management pattern. Without such a world orientation a company's position will become more precarious because of its inability to compete for sales against able, fast-moving foreign competitors. Such a broad market perspec­ tive is an important factor in achieving the desired stable production and employment.

The hiring, training, overtime and loss in production costs of employee turnover (23, p. 133) compel management to attempt to keep the turnover figure under control. Turnover provides needed new blood for an organization, however, and is bad only when it is excessive. The expense involved points to a need for management to create conditions conducive to stable production and employment.

Excessive turnover indicates a need for analyzing the reasons given by employees for leaving. Efforts then need to be made to correct the factors causing employee dissatisfaction.

Stable production and employment is a goal common to most industrial concerns. The goal may become more of a reality in many cases as more funds are spent in providing training for the work force which then becomes one of the enterprise's long-term invest­ ments. Combined with the high cost of introducing automated equip­ ment there is still further need for long-term stability of production 86 and employment. The cost of unemployment compensation is also a motivating factor in this regard.

Accuracy in job evaluation. One basic tool of wage adminis­ tration is job evaluation (9, p.513) which locates a job as such in the hierarchy of other jobs. Limited research has indicated that such weaknesses as the following need to be mastered for job eval­ uation to be more accurate and effective: (1) too many rating factors not directly related to differences in pay; (2) an excessive range with widely separated degrees and a lack of accurate degree differentia­ tion; (3) expecting false scientific accuracy from what is essentially an employee-motivating tool to be used systematically; and (4) the inclination to rationalize decisions based on expediency, precon­ ceptions and deals, as sound job evaluation. There appears to be a trend toward alleviating some of these shortcomings which will make for more accurate job evaluations.

The Ford Motor Company (18, p.281) has an appraisal program which provides for two-way communication. This involves a personal interview between each employee and his supervisor. The employee is told what development plans the company has for him. Comments or suggestions are also elicited from the employee which are included on his management development record. This two-way communication 87 process provides for more accurate job evaluation and serves as a stimulus to the employee to make better use of his potential.

Four major job factors used in job evaluation (23, p. 330) are skill, responsibility, effort and working conditions. The applica­ tion of point and factor-comparison systems are making job evalua­ tion more accurate and easier to justify. It is at best a systematic process of determining wages and salaries, however, rather than a scientific one. Even with special care the system will retain defic­ iencies which necessitate selling it through a process of education.

Favorable working conditions. Industry is enforcing higher standards of physical working conditions (23, p.90) since it is realized they can drastically affect the work of people. It is real­ ized that if machines, equipment and working conditions are poor it is a definite drawback in striving for optimum results in terms of quantity, quality, time and costs.

Likert (18, p. HI) noted at the 13th International Management

Conference that studies conducted on supervision in both the United

States and India have had similar results regarding types of super­ vision. In both countries general supervision makes for better produc­ tivity than close supervision; more adequate supervisory communication with subordinates makes for higher productivity; and subordinate participation in effecting changes produces better performance after the change is made. The impact of the results of studies such as the above have the result of fostering the continual improvement of work­ ing conditions from the standpoint of supervision.

Bethel and others (8, p. 124) noted a trend toward attempting to improve working conditions related to all operations of the industry.

The standards of functional building design, appearance and equip­ ment have risen substantially since World War II. More costly equipment and increased emphasis on production efficiency have improved many maintenance and equipment replacement policies.

Good working conditions are essential to maintain a reputation of a good, modern and efficient place to work.

Long-term advancement programs. A challenging trend con­ fronting the manager (18, p.2) is the increasing complexity of a company's internal operations. This is a consequence of such fac­ tors as the changing technology, diversification, growth and compe­ tition, increasingly complex finances and broader distribution needs.

As a result of such factors, unremitting pressure is generated to find men and women with new skills and aptitudes for new types of work. Long-term advancement programs are also a trend resulting 89 from the need to fully utilize the talent within the industrial organ­ ization.

A trend with which management must cope is the changing role of the supervisor. According to Keith and Gubellini (40, p. 125), the supervisor of tomorrow will deal more frequently with machines than with men. This will require employing more university graduates with technical competence and knowledge of machine operations than is presently the case. It will also require well organized long- term advancement programs to retain and develop the personnel needed.

The proper atmosphere for personnel development (23, p. 263) requires that employees be informed of opportunities for advancement.

The employee should know that long-term advancement depends upon himself and his abilities as well as the organization and the opening up of possible positions. Advancement is made possible through transfers, employee turnover or organizational expansion.

A good advancement procedure (20, p. 697) should provide equal opportunities for promotion and, on the other hand, minimize nepo­ tism, favoritism and organization politics. It should make it possible for employees to receive public recognition for success. The company that utilizes such motivation is more likely to make the best use of 90 its employees' abilities. Long-term advancement programs make a significant contribution to increasing the organization's stability and effectiveness.

Mutual confidence trend. The idea of the mutuality of interests of all groups in the private corporation is still d novel one. Despite the tradition of conflict and the strength of inertia, circumstances may compel the acceptance of the idea. The alternative (18, p.278) may be the vast extension of the role of government in fixing the conditions of work. The burden falls on management to convince all in the organization that the total group interest is the best cri­ terion with which to measure the interests of the various parts.

Freedom and responsibility for the individual is one basic idea underlying the managerial concept according to Fogle (18, p. 126).

It was noted that this freedom and its concomitant responsibility can only flourish in an atmosphere where there is a mutual trust and confidence in each other's ability and a desire to contribute to common good. Confidence may be risky but it is not nearly as risky as mistrust.

Morale building (20, p.774) is an on-going process which should continually provide identification of personal interests with the inter­ ests of the organization. This is onenmeans of developing a mutuality 91 of interests which requires efforts in communication and education.

Company cases may be used to remind both executive and operative employees that the satisfaction of customer needs and desires is a prerequisite to satisfying their personal interests.

Bethel and others (8, p. 344) noted a trend toward a feeling of mutual confidence in industry. Management is presently realizing that dealing with human resources is its most important task.

Research brains are being hired to deal with technology while manage­ ment is trying to return to small-shop familiarity with employees.

This is necessary because of the industrial employee's basic desire to know and be known by his bosses at the top of the company. Con­ tacts over the bargaining table not only help develop this mutuality of interest but improve production merely as a by-product. Mutual confidence is promoted through providing the individual employee with

more active participation in making decisions which affect his daily work.

The growing importance of research and development methods

have been noted. Efforts in making management practice more sci­

entific by utilizing concepts from various disciplines were discussed.

It seems fair to conclude that suggestion plans can provide valuable

incentives in promoting employee creativity. There may well be 92 expanding world-wide efforts to develop managerial skills for many years to come. A predominant concept emerging from various trends in industrial management was a growing realization of the importance of managing human resources. Let us now examine some considerations inherent in personnel management. CHAPTER IV

PERSONNEL MANAGEMENT

This chapter presents a picture of some of the important con­ siderations in the field of personnel management. A basic under­ lying concept of what follows is the increasing attention being paid to the management of human resources in industrial enterprises. It is people who make industry function to best advantage. The man­ agement of personnel may be the sum and substance of industrial management as it involves getting things done through people.

Personnel management was defined by Jucius (37, p. 25) as that field of management which has to do with planning, organizing and controlling various functions of procuring, developing, main­ taining and utilizing a labor force so that the objectives of the company, all levels of the labor force and of the community are duly considered and served. This was not intended to describe it fully, but to serve as a springboard for fruitful analysis and ampli­ fication. Some writers have stated that the function of personnel management may be the essence of effectively directing industry.

It may well be that as much or more progress in the future will result from improved personnel practices as from technical progress.

93 94

The general purpose of personnel administration was summarized by Keith and Gubellini (40, p. 114) into four basic objectives. First, the production and distribution of goods or services that meet with public favor; second, the payment of satisfactory wages, salaries and fringe benefits needed to develop an effective work team; third, fulfilling the obligations imposed on business by the community; and fourth, achieving these objectives in such a way that the enter­ prise will prosper and grow.

Recruitment and Selection

Successful management is the ability to deal with people of varying aptitudes and to bring forth the best they have to offer.

The right man should be chosen for the job, but it is sometimes necessary to create a job for a particular man. A working environment should be created that will encourage employees to improve their qualifications to the fullest possible extent. Sound personnel poli­ cies and the wise use of available talent are essential to a viable organization.

Recruitment is basically concerned (23, p. 175) with the devel­ opment of sources of personnel. The internal source of personnel may be developed by such things as a manpower inventory, personnel 95 records, central reporting of vacancies andra cooperative attitude on the part of immediate supervisors. Utilizing internal sources has values in terms of morale, incentive, more accurate selectionatnd general public relations. Major external sources of employees in­ clude advertising, private and/or public employment agencies, recommendations of present employees, schools and colleges, labor unions and casual applicants. A firm might be wise to determine which sources are most consistent in providing successful employees in order to concentrate its money and efforts where they are most provitable.

Firms often find it advantageous to employ recruitment which is actively seeking out prospective employees and encouraging them to apply for a position or Job. This is more expensive but holds such advantages as offering the employer a wider range of selection, creating more competition for jobs and helping to reduce the possi­ bility of poor personnel selection.

The first step (30, p. 342) in the recruitment and selection of an employee is the preparation of a job specification. It should list in detail the requirements needed by an applicant for a particular posi­ tion. This should classify such things as the degree of skills needed, education requirements, necessary experience, maximum age limits 96 and personality characteristics desired. Such a specification aids the interviewer in screening applicants and will indicate deficiencies an otherwise acceptable candidate must correct in order to qualify for the job. A second step is to determine if the applicant will fit into the part of the organization where he will work.

Selection of the right person for the right job is basic to employee satisfaction and lower production costs. This entails care­ ful screening to select applicants who are technically, physically, mentally and emotionally qualified to perform the job. Keith (45, p. 126) listed four vital characteristics or traits which might serve as a basis for selection of management personnel. These were adapta­ bility, intelligence, humility and ambition. It is necessary to employ

methods which will provide a reasonable determination of the degree to which a person has these traits.

Interviews. A preliminary interview is sometimes used to elim­

inate the obviously unqualified. However, the original screening of

candidates is usually done by going over the application forms. The

individuals in which the firm may be interested are invited for an

interview. This interview may be conducted by a skilled personnel

man, by the actual supervisor for the position to be filled or, in

many cases, by both. 97

Successful interviewing requires tact and judgment on the part of the interviewer. The way the applicant answers questions is

evaluated as well as the answers he gives. A casual, unplanned inter­

view is best for testing poise and initiative while a more direct ques­

tioning will obtain more information. The .obvious facts and impressions

such as appearance, facility in speech and why he is applying for a

job in this particular organization are checked in either type of inter­

view.

Interviews make three unique contributions in the selection

process. Calhoon (12, p. 151) presented these as (1) providing a

first-hand view of the applicant in action — how he looks, his

manner and his bearing, (2) providing the only way to witness how he

interacts — how he responds, his way of thinking and effects of his

personality on another, and (3) providing a good way to judge "will

do" features of performance such as motivation, initiative, stability,

perseverance, work habits and judgments. A significant by-product

unique to the interview is the opportunity it affords for more than one

member of management to identify with the applicant. This can be

helpful in a new employee's ultimate success. The selection inter­

view was divided into the following seven phases: preparation,

establishing rapport, seeking information, giving information. controlling the interview, closing and evaluating the interviewee.

This was not presented as the ultimate blueprint for interviewing because so much depends on the organization, its setup and its needs.

A hiring interview (40, p. 208) is usually held after the desired

information from such sources as an application form, the initial

interview, references and tests are evaluated. An applicant who is offered a job should know his responsibilities and duties, hours, wages and other benefits, the amount of overtime that may be demanded of him and any basic company policies that may affect him. Some firms have a personnel policies booklet that is given to the appli­

cant at this time. A basic objective of the hiring interview is to

insure that the employee accepts the job knowing what the employer

expects of him and what he can expect of his employer.

Several rules of good interviewing were listed by Jucius (37,

p. 220), in brief: (1) always respect the interests and individuality

of the interviewee; (2) pre-establish clearly the objectives of a given

interview; (3) make the utmost effort to help the interviewee feel at

ease; (4) allow and actually encourage the interviewee to talk cop­

iously; (5) the interviewer should be an avid student of word meanings

or semantics; (6) the interviewer should keep his opinions to himself 99 unless they are of significance to the interviewee and the latter has had ample opportunity to express himself; (7) a physical setting should be selected that is suitable for the objectives of the interview;

(8) the interview should be drawn to a close by the interviewer stat­ ing his views or decisions clearly, concisely and if possible con­ clusively; and (9) interviews are justified only when they are the most effective, economical, courteous or confidential means avail­ able in exchanging information.

References. The use of references in the selection process places reliance upon the evaluation of former employers, friends and professional acquaintances. Most people are reluctant to make reports that may hinder the chances of others so that the process must be carefully controlled to obtain accurate appraisals. Where the person giving the reference is known by the individual screening candi­ dates, the degree of reliance tends to go up sharply. Jucius (37, p. 183) stated that a reference form asking specific questions also tends to increase their reliability. The telephone and the telegraph are commonly used to check on references in cases where writing would be too slow.

There are three basic types of references (23, p. 187) which may be of value in hiring, namely: character, work and school. Character 100 references are of little value in selection because the applicant selects the individual providing the reference. It is generally felt that a check on work experience is the most important type of refer­ ence. The applicant is required to mention specific places he has worked which often provides information only experience will divulge.

School references are basically of value in hiring students directly from high school or college. The latter also need to be carefully controlled and checked if valid information is to be obtained.

Tests. The three types of tests most commonly used in indus­ try are intelligence, achievement and aptitude. Any or all of these types may be used by personnel workers in screening employees.

Keith and Gubellini (40, p.207) noted that tests, however, are only one factor in job assignment or employment, but with other things being equal they may be significant.

Intelligence tests attempt to measure inherent capacity to leam.

An "intelligence quotient" is derived which helps assess an indi­ vidual's growth potential. The danger in using such tests is the tendency to pigeon-hole individuals on the basis of this one test per­ formance.

Achievement tests are designed to measure current ability to perform. Various tests have been developed to measure particular 101

skills and abilities already learned which can be used by the per­

sonnel department in selection. Performance on the job, however, is the achievement test that counts most in the final analysis.

Aptitude tests are used to help differentiate those best adapted

to learn such things as clerical work, mechanical work, sales work, personal contact with others and for work in various other categories.

Aptitude tests cannot provide a final solution to fitting the man to the job but they have been an important aid in many cases.

Other specialized tests such as those used to measure dex­

terity, interest and personality have been used to good advantage in

some cases. Humans are complex beings, however, and no tests

have been devised to measure many of their characteristics. Loyalty,

reliability or courage, for example, cannot be measured by testing.

Tests have definite limitations and should therefore be used only by

qualified persons who understand these limits.

The technique of testing should be viewed as a contributor to

the process of hiring rather than the sole basis of selection. Jucius

(37, p. 227) noted that tests should add to the sum of information

obtained from application blanks, references, observation and inter­

views. Test measurements should be given a place in the general

scheme of interpretation and not allowed to usurp or minimize 102 information derived from the use of other tools. Ratings and interviews need to be combined with selected batteries of tests in order to effectively screen potentially good from inferior applicants. The re­ sults of tests should be supplemented with opinions on such factors as training, experience, social responsibilities and relationships, productive record and hobbies.

Some principles of testing for selection purposes in industry include basing tests on a sound job-analysis program, utilizing reliable tests, the test should be valid in that it evaluates what it purports to evaluate and test scores should relate closely to job per­ formance. Validity is highly specific and must be proved to exist for each proposed use in each company. Flippo (23, p. 200) noted that limited surveys indicate a majority of companies are not using tests in selection today. This may be a little misleading, however, in that most large companies that can afford it, do use some form of employment testing.

Application blanks. The more factual information needed in the hiring procedure should be obtained by means of an application blank.

A sample application blank (23, p. 183) adapted from one used by

KaisBr Steel is presented in Figure 1 on the following pages. Appli­ cation blanks that are to be effective, require that objectives must 103

Figure 1

EMPLOYMENT APPLICATION BLANK*

Name - Last First Middle Social Security No. Date

Address - No. and Street City State Phone No.

Position Desired Acceptable Wage Date Available

Height Weight Physical Defects Marital No. of Status Dependents

Date of Birth Place of Birth Are you a U.S. Citizen?

Nearest Relative - Name Address Phone Relationship

EDUCATION

Circle Number of Years of Education Completed

High School Attended Location Diploma

Colleges Attended Location Degree

Trade School Location Certificate

•Adapted from Flippo, Edwin B. Principles of Personnel Management, p. 183+. 104 Figure 1 (Continued) EMPLOYMENT RECORD - Two Most Recent Employers

Firm Firm

Address Address

Position You Held Years Position You Held Years

Supervisor's Name Supervisor's Name

TWO REFERENCES OTHER THAN RELATIVES OR FORMER EMPLOYERS

Name - Last First Address

Machines and Equipment on Which You are Skilled

MILITARY SERVICE

Mo. Yr. Mo. Yr. Induction Discharge Type of Discharge Branch of Service

Military Occupation Rank Draft Status Reserves or National Guard

Professional or Technical Group Memberships 105

Figure 1 (Continued)

Social or Community Group Memberships

Yes No Have you ever been convicted of a felony? If so, give details.

Yes No Were you referred to this company for employment? If so, by whom?

Signature of Applicant

Interviewed By Date Remarks 106 first be established. Some firms have the selection of stable employees to reduce labor turnover as their major objective. Such companies have utilized such information as home ownership, marital status, age and sex in attempting to determine stability. Productivity has been the major objective in other instances where production records, merit- rating scores or sales volume has been given a great deal of attention on application blanks.

A firm should not try to select employees solely on the basis of one or two important facts (23, p. 187) about the man or his background.

The application blank is only one step in the selection process which needs to be supplemented by other data. Information discovered else­ where may weigh more heavily than any discovered on the application blank. Data from the application blank can provide useful leads con­ cerning information that can be further pursued through an interview.

Management Personnel Development

The goal of management personnel development is to provide

managers with the skills essential for their task. Management skill has traditionally been learned by working under an experienced mana­ ger. Formal training must take place at least partly away from the job to remove the pressure of producing and to allow for understanding of 107 what is being done or which principle is being applied. A good pro­ gram should be a blend of theoretical and practical training (40, p. 211) thus producing a manager able to perform and with a knowledge of that which he is doing.

A climate conducive to growth (47, p.205) needs to be created by management as a result of the way it manages. If this is done, the cream will rise to the top, meaning that managers throughout the organization will be involved in a process of self-development lead­ ing to the realization of their potentialities. In this way effective management of the enterprise and the development of managerial talent would become a single integrated activity.

The motivation behind company and university programs (29, p. 375) for management development is twofold; first, the realization that highly competent management is essential for company sur­ vival and growth in a competitive dynamic economy, and second, the relative lack of available high level managerial manpower to assure this growth. Firms investing resources in training and devel­ oping present and future managers are planning for years or even a decade or more ahead. Such firms understand, just as industrializing countries must understand, that as an economy expands and becomes more complex it demands more managers in both number and quality. 108

Louis Armand, a manager from France (18, p. 7), wrote in a paper presented to the 13th International Management Congress in 1963 concerning professional competence and personnel development as follows:

.. .competence extends to the broadest areas, taking in the technical aspects, and the social and economic ones. However much moral qualities and attachment to the enterprise and to justice remain fundamental, profes­ sional competence tends to play an ever increasing role, first because it appears to be more and more necessary, and also because it is now more available to the scholar, more objective, more subject to appraisal, than the old virtues which too many comedians know how to ridicule!

The above may indicate that the viable industrial organization needs an on-going program of personnel management development.

University and college education. Promoting university or college attendance (30, p. 351) is one means of management per­ sonnel development. The cost of such education may be borne entirely or partly by the company. A company might offer incentives to study by offering to pay the full costs of courses in which the employee receives at least an average grade. Another possibility might be the company paying the full cost for the top five students and half the cost for the other students.

Some fifty colleges and universities (29, p. 373) presently offer programs for men who return to the campus from managerial positions 109 in industry. It has been estimated that the total number attending these courses in any one year is probably close to 2000 with the number still growing. These programs often take the form of manage­ ment seminars, but they vary greatly among the different university programs. The Harvard Business School has been a great influence in the spread of the case method, but few others have gone as far as

Harvard in its use.

University programs (35, p. 43) are designed primarily to supplement the developmental activities conducted by business and industry. They are usually built on the basis that participants have had previous experience, stress increased awareness and seek to effect a re-examination of a manager's previous experience.

Odiorne, Director of the Bureau of Industrial Relations at the

University of Michigan, stated that the Bureau provides what is felt to be a well-rounded solid educational program for management.

This program includes seminars which deal with new techniques, courses for advanced professional development and conferences which are designed to keep participants up-to-date. This integrated program

is one of the few of its type in existence.

Case study. The case study method of management development

(13, p.5) is employed by many companies. Participants read 110 descriptions of problems which have arisen in an organization. The problems are usually stated clearly, but are found to include many complexities that characterize any involved situation dealing with people and issues. Participants are expected to locate the central issue(s) and to decide upon an action, even though all the facts are not available. The advantages of the case study approach include helping participants discover how complex problems can be, develop­ ing a realization that there are different approaches as well as alter­ native solutions, allowing participants to learn from each other and providing the setting, through the discussion of actual cases, for the development of generalizations which can help one in resolving problems in industry.

Williamson (68, p. 204) indicated that the executive development program at Williamson-Dickie Manufacturing Company has had two central features for approximately the past twenty years. The first is group participation in theoretical analysis of executive operation techniques. The other feature is group study of real business situa­ tions drawn from outside sources as well as the inner workings of the firm.

The executive operations technique involves an analysis of units of executive work. A chart including some 144 guide points to in executive action was developed to facilitate the analysis of case material. These guide points were charted adjacent to twelve basic executive considerations such as develop ideas, unify views, determine plans, analyze relations, coordinate purposes and evaluate satisfactions. Management development takes place through con­ ferences or practice sessions discussing cases by using the guides which evolved from years of use and refinement. The novice has dif­ ficulty in the semantics involved in the energetic analysis of executive activities.

The case method is aimed at developing the power of decision­ making, rather than teaching subject matter as such. Harvard and others using the method have increasingly realized, however, that case studies may be used exclusively when other instructional methods are actually needed to supplement the information and insights avail­ able through a case.

Apprenticeships. Apprenticeships are training programs which involve a course of work and study that varies from a minimum of two years in some trades to six or seven in other fields. This training approach is used in trades, crafts and technical fields in which pro­ ficiency can be acquired only after an extended period of time in direct association with the work and under the direct supervision 112 of experts. The shop experience is usually coordinated with classroom work. It is used in such trades as construction, machine, printing and metal crafts. These programs have been influenced a great deal by state and federal legislation. The Federal Apprenticeship Act and other laws pertaining to vocational training (37, p. 300) regulate such factors as pay, number of hours of work and the amount of time devoted to schooling. Training arrangements usually involve the trainee, the union and the vocational trade school as well as the em­ ployer. Those who have worked their way up through the ranks to a managerial position have often served an apprenticeship at the begin­ ning of their association with the company.

On-the-job training. A great deal of executive training is done on-the-job. One advantage is that the trainee learns the job under actual fire. He can appraise subordinates and they in turn can size him up without artificial support or backing. Such experience allows the young manager to demonstrate independently his latent leadership aptitudes. It is also claimed (37, p.318) that working up the executive ladder doesn't create artificial hopes of understudies or destroy the initiative of those not being groomed for advancement.

Learning on-the-job provides for practical application .which makes principles and concepts meaningful and realistic. Such 113 learning requires supervision involving frequent, purposeful contact between superior and subordinate. To be effective it should entail periodic rating or evaluation followed by counseling. The supervisor

(12, p. 230) needs to devote time to acquiring the patience needed to help the subordinate. The ability to communicate and stimulate through supervision requires that a climate of confidence and a spirit of encouragement and recognition of progress prevail.

The supervisor or foreman (40, p. 163) is a key figure in most manufacturing firms and is sometimes referred to as being first- line management; meaning just one step from the workers. This

individual needs to be highly skilled and experienced in the produc­ tion process. He must also be skilled in his relationships with employees. He serves at various times as planner, adviser to manage­

ment, counselor to workers, inspector, training director, disciplinar­

ian, ambassador of good will and technological expert. It can easily

be seen that the foreman plays a central role in providing employees with training and advice.

Another approach to developing managers is to have a senior

executive take a subordinate under his wing and guide him during day

to day contacts. This is a widely practiced method of management

development sometimes referred to as the sponsor or tutorial system. 114

Cadet training programs generally come under this heading. Cantor

(13, p. 6) noted that superior and subordinate managers who work together and discuss their problems are counseling each other.

Delegation was presented by Bellows, Gilson and Odiorne

(6, p. 149) as a means of preparing present managers for broader responsibility and of developing future managers. Effective delega­ tion required that there be clear definitions of responsibilities, authority and results expected plus a prompt review of actual results.

Knowledge of the teaching-learning process (13, p. 152) is im­ portant in providing effective management development. Sometimes spontaneity is more important than structured purpose. In other sit­ uations challenge is called for rather than conformity, understand­ ing rather than Tightness, silence rather than utterance. Learning is multidimensional in character which should caution against substi­ tuting formulae and rules for sensitivity and skill.

Undirected on-the-job training, however, has many serious drawbacks. Jucius (37, p. 319) related that such training is usually too costly, time-consuming and ineffective in developing capable executives. Undirected training of this nature is wasteful in that lessons learned by one generation are not transmitted efficiently to the generations that follow. Its use can be justified only in small 115 companies which cannot afford, or do not have, appropriate training programs available in the community. On-the-job training may emphasize a managerial responsibility of teaching which accompanies other seemingly more pressing duties. The inherent danger of using this system lies in its possible neglect.

Tob-rotation. Some companies employ job-rotation as a means of providing the individual an opportunity to gain experience in many, if not all, of the larger phases of operation. An employee might be employed in accounting, sales and production during the period of rotation. A smaller company, however, finds this technique difficult because of less flexibility in terms of the total number of positions.

The rotation principle can be effectively applied after an initial orientation period and some classwork with the company. It should include (45, p. 131) helping those moved to different positions to

(1) understand the new task thoroughly, (2) view the new role as an opportunity for genuine learning, and (3) identify with the new role so as to feel responsible for results and for job improvement. It should also be scheduled when the desired experience can best be obtained. A lull period in production, for example, is not an ideal time to learn very much about the actual work performed. 116

Job-rotation is based on three assumptions according to Jucius

(37, p.324). The first is that it will tend to make trainees think more in terms of management principles rather than the technical aspects of particular functional fields. A second assumption is that it will allow trainees to select the functional field in which they want to manage. The third assumption is that it will provide a broad view of interdivisional problems thus providing better-qualified appointees for top positions. High potential personnel do need broadening, older personnel can be helped from falling into a rut and shifting between line and staff can help each to better realize the task of the other.

Problem-solving conference. The conference method for train­ ing foremen and executives (64, p. 385) provides an interesting setting and there is some assurance that communication will take place. The participant may learn best the things he learns by doing.

The conference method allows him to do things in the form of making decisions subject to the criticisms of his classmates. This is good development for proficient decision making.

Tanner, President of Zenity Foundry Company (18, p.55), stated that a number of United States companies had organized joint conferences to study mutual problems. These were one day sessions 117 approximately once a month which would begin in the morning with a resource specialist who would discuss the topic of the day. The afternoon would be devoted to work upon one of the participant's problems and open discussion based on the information presented by the specialist that morning. The participants have found the meetings mutually beneficial and plan to continue them in the future.

Performance appraisal. Performance appraisal is a systematic and, as far as possible, an importial rating of an employee's excel­ lence in his present position and in his potentialities for a better job.

A basic value of such appraisals (23,p. 277) is that they serve to stimulate and guide employee development. The factors upon which appraisals are made form a pattern of desired behavior that can be compared with the individual's performance, thus pointing out weak­ nesses. These weaknesses should provide a sound basis upon which to build an individual development program. Appraisals also tend to promote management personnel development by producing better and more competent supervisors. Supervisors with appraisal respon­ sibilities will be stimulated to be more observant and analytical.

The problem of performance appraisal can be approached by a better design of the appraisal form such as more precise definitions of the behavior to be observed. It may be more important, however. 118 to teach the supervisor how to observe more accurately and judge more impartially the characteristics of the men under his supervision.

Perception of others is notoriously inaccurate, but training can im­ prove it. An objective appraisal (45, p.83) requires that delegation has been clear-cut and standards have been properly established.

The appraisal process should take into account the environment the subordinate is operating in, the influence of his superior and any other organizational factors which may affect his efforts. The appraisal should always be reviewed with the man. Continuous day-to-day coaching and evaluation of progress is necessary to achieve maximum benefits from the appraisal.

A few companies such as General Mills, Ansul Chemical and

General Electric (41, p. 70) have been experimenting with approaches which involve the individual in setting targets or objectives for him­ self and in a self-evaluation of performance periodically. The superior naturally plays an important role but it is more congenial than the

judge or inspector role ordinarily forced upon him. Management posi­ tions which require individual judgment and emphasize quality of performance are particularly difficult to evaluate in terms of pro­ ductivity. The performance appraisal of such positions is apt to be a

qualitative measurement rather than quantitative. 119

Profit-sharing. Some companies have utilized profit-sharing as a means of recognizing and promoting the development of the individual employee. This places the employee in the position of a shareholder or a joint proprietor with his employers and motivates him to devote his utmost attention to the success of the undertaking. It also emphasizes that profits are not automatic and that poor economic conditions can affect the company for a period of time. There are in excess of 50,000 plans (18, p.89) presently operating in the United

States.

One of the most frequently mentioned motives for establishing profit-sharing (54, p. 409) is to offer a group incentive. Advocates of the plans have indicated that if workers have a stake in the earning of the enterprise, they will redouble their productive efforts, avoid wastes and do everything in their power to boost earnings. This tends to provide an atmosphere which stimulates management personnel development. Providing continuing information as to the financial status of the company helps to develop the communicative powers of managers.

Profit-sharing plans are not meant to compensate for poor manage­ ment. The success of such plans (46, p.565) depends on the profits made by the company as well as how well-managed the plans themselves 120 are. Management must be able to withstand criticism when profits fall and employees must accept the lack of profit distribution in bad years. These plans promote the development of management per­ sonnel by having executives and employees take greater pride in the company and devote more earnest effort to their jobs thus promoting higher morale. The complexity of the plans and the fact that reward is remote in time from the effort are disadvantages.

Advancement. Advancement or promotion from within the organ­ ization is a means of management development which has several advantages. Advantages include (40, p.132) providing incentives for workers to improve their qualifications, simplifying the selection process, reducing the time needed to fill a position, reducing the risk since the individual's work history is available, tending to reduce the cost of job orientation and training, improving morale when consistently followed and providing for a series of promotions down the line. Promoting insiders exclusively, however, may cause animosities within the organization as well as failing to employ the best talent which may be available from outside the firm. Because of the need for wider selection and desire to bring in new ideas, few firms restrict themselves exclusively to promotion from within. 121

The opportunity to advance .is one of the most basic and pub­ licized features of the free-enterprise system. Flippo (23, p. 261) stated that the general thesis of this system is that both firms and individuals are sufficiently free and competitive to stimulate those of greater abilities to move ahead. This opportunity for advancement is considered fundamental to the viable organization as well as the function of personnel development. An employee has limited in­ centive toward self-improvement if the opportunity to advance is not available. Advancement is based fundamentally on merit and/or seniority. Management personnel usually prefer merit based on job performance and by analysis of employee potential for development.

This tends to assure that competence shall be the fundamental cri­ terion for promotion.

Cultural upgrading. One method of training managers (61, p. 101) was that of learning by mind stretching. This approach is exemplified by those companies sending their executives to universities to study

such liberal arts courses as literature, philosophy, history and

sociology. It is felt that this will provide a broad cultural background thus producing better managers. Typical objectives of such programs

might include improving thought processes and analytical abilities. 122 developing a broader understanding and developing awareness and understanding of human relations factors.

Cultural upgrading programs (35, p.236) are well designed to develop conceptual skills, values and attitudes. This is part of the long-term approach to the self-development of leaders with particular emphasis on developing more effective habits and patterns of thought and action, strengthening values and attitudes and acquiring self- confidence, courage and resourcefulness equal to the task ahead.

Conceptual understanding and skill is an indispensible part of bus­

iness leadership.

Develop leadership ability. A basic need and aim of all manager education and development is to develop present and potential leader­

ship ability. This is true in terms of developing middle and lower

managers as well as those at the top of the heirarchy. Middle mana­

gers have leadership responsibilities for the unit of the organization for which they are responsible. It is also true that the ranks of

middle management will provide the talent to fill top management posi­

tions in the future, thus providing for the organizations' survival.

Developing leadership ability may involve a re-examination of

the true meaning of past experience as it relates to the job ahead.

The ultimate contribution of business leadership (35, p. 17) may depend 123 on insights, beliefs, values and attitudes of individual managers.

These are the basic essentials upon which wisdom and judgment are built.

Employee mobility. The mobility of labor or the freedom of the worker to move from one job to another (40, p. 138) has been a great source of strength to the American economy. This flexibility of move­ ment provides real competition for skilled workers which forces manage­ ment to provide conditions which will retain employees, especially at the highly skilled levels. The healthy benefits to society of such competitive turnover compensate for the cost involved.

The freedom to change positions if one feels he can better his lot provides an incentive to improve one's qualifications. There are

situations where an employee has advanced as far as the structure of the organization will permit. The option is open for seeking employment in a more desirable setting.

Plant sponsored education. Courses offered by the company pro­ vide possibilities of relating the imterial directly to the problems at hand, developing a feeling by participants that they must be worth attending when offered on company time, provide for closer supervision and greater ease of following up results. Grouping various levels of

management, however, sometimes inhibits participation of superiors 124 and almost always inhibits participation by a good number of subordi­ nates. Development courses (12, p. 233) have come to place major emphasis on participative methods such as conference, case, role play and simulation or business games. These methods are based on the precept of active learning but will not be effective unless pre­ ceded or accompanied by the learning of relevant concepts and principles.

Some companies have the practice of sending executives to

conventions, association meetings of industries, institutes and con­ ferences. These meetings vary a great deal but many of them are very technical and practical in nature. This experience gives execu­ tives an opportunity to become acquainted with personnel in other

industries, to learn about the newest developments and to become

acquainted with new practices and sources of materials that can be

followed-up by correspondence or personal visits.

Some firms establish training courses which are taught by

members of the organization. In some cases regular training depart­

ments are utilized with regular instructors assigned. General Motors

(23, p.251) utilized this approach until it grew into the General

Motors Institute of Technology, which is actually in industrial uni­

versity. Such training is flexible in that when needs arise they 125 can select, design, and develop their own courses to meet that re­ quirement.

Correspondence courses that are underwritten by the company is another form of economical training. This is an advisable prac­ tice (37, p.328) where no appropriate training is available in the community. Care should be taken to check the reliability of the school and quality of instructional materials used. A good school can provide instruction and direct guidance and evaluation which could not be obtained in any other way.

Public vocational education leadership development. Public vocational education offers programs on such topics as instructor training, human relations, conference leadership, job methods and effective speaking. A basic objective is to develop the leadership abilities of those participating. Such programs emphasize a syste­ matic method of learning, improved personal relationships, problem solving in meetings, a continual search for better methods of perfor­ mance and improved communications.

Supervisory personnel development programs under public super­ vision and control have made many contributions to industry. These programs are expanding throughout the states. Major industries that have their own training departments, as well as small companies 126 unable to set up training departments of their own, are availing themselves of the help public vocational educators can provide.

Industry's utilization of such supervisory training programs presents a continuing challenge to vocational traede and industrial educators in meeting the needs of participants.

Industrial Psychology

One field that has aided personnel management a great deal is psychology. Psychological research dealing with human capacities and behavior patterns has been of assistance in conducting many of the personnel functions. In addition, personnel managers who have acquired some knowledge of psychology have generally been able to work with employees and their problems with greater understanding and effectiveness.

The growing field of industrial psychology (26/ p.36) is based on the recognition that man does not work for the sole purpose of earning a livelihood. A job is increasingly viewed as a source of many psychological satisfactions or dissatisfactions. The objective is to explore the bases of these psychological influences and to con­ trol and direct them to the benefit of individuals and industrial organizations. 127

Physical working conditions. The surroundings in which a person works (30, p. 183) affect not only his morale but his output.

Adequate light, shielded machinery, reduced noise, air conditioning, adequate locker and personal facilities and correct working temper­ atures can reduce rejects and raise outputs and reduce the propensity for accidents. Modern and well-planned layouts will provide easy access to supplies, tools, materials and facilities to promote worker comfort and efficiency. Tools, equipment and materials should be of good quality and in good repair. The color of the surroundings has been found to be an important factor in providing a pleasant working atmosphere. There is a health hazard involved as well as a stigma attached to jobs that must be performed under adverse conditions.

Personnel departments have a special interest in advising engineering design and maintenance functions because of the relationship between physical working conditions and loyalty and attitude of employees.

Some factories provide employee incentives for maintaining good physical conditions by providing bonuses or prizes for departments deemed cleanest and neatest during some preceding period.

The famous Hawthorne experiments (40, p. 227) were an attempt to prove something about working conditions but the results made 128 another point altogether. These experiments dealing with the effect of working conditions on productivity were conducted in the Hawthorne

Plant of Western Electric Company in the years 1924 to 1927. One

experiment involved subjecting two groups to various lighting condi­

tions. The control group's lighting was held normal throughout the

experiment while the lighting for the experimental group was varied

widely.

The results of the study showed that both control and experi­

mental groups increased their productivity during the experiment.

The experimental group maintained their productivity, whatever the

lighting, throughout the experiment. The results were attributed to

the fact that both groups were set apart from the rest of the plant and

given special status by virtue of participation in the experiment.

The studies indicated that other factors can outweigh poor working

conditions under special circumstances.

Personal relationships. A set of personal relationships develop

when workers come in contact with one another which can have a

significant effect on the productivity of the individual worker. These

considerations should be balanced as well as possible within the

limits of the firm's capability. A worker who performs poorly in one 129 department will sometimes perform quite well in another because of

improved personal relations with the supervisor and/or his fellow workers.

Good human relations are achieved through effective personnel

selection, development of human relations potential and maintenance

of human relation factors. Jucius (37, p.40) further stated that the

workplace itself has an effect on feelings, attitudes, status and

social significance. Personal relationships on the job are espec­

ially significant in their effect upon human relations. Decentraliza­

tion and delegation, job enlargement and participation and consul­

tative management are steps which tend to meet the social and perhaps

the egoistic needs of individuals. These innovative ideas are being

applied with some success today.

McGregor (47, p.47) stated the following assumptions with

respect to the management of human resources:

1. The expenditure of physical and mental effort in work is as natural as play or rest ...

2. External control and the threat of punishment are not the only means of bringing about effort toward organi­ zational objectives. Man will exercise self-direction and self-control in the service of objectives to which he is committed...

3. Commitment to objectives is a function of rewards associated with their achievement... 130

4. The average human being learns, under proper conditions, not only to accept but to seek responsibility...

5. The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, dis­ tributed in the population.

6. Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized.

A central principle emerging from the above assumptions is that of integration. Integration is the creation of conditions such that the members of the organization can achieve their own goals best by directing their efforts toward the success of the enterprise.

This principle demands that both the organization's and the indiv­

idual's needs be recognized.

Incentives. There is a trend in management (23, p. 74) toward a greater usage of positive motivational techniques. Limited research has indicated that positive motivation generally results

in greater worker satisfaction, higher morale, fewer complaints and

generally less trouble. Fear motivation can be used to advantage,

however, as long as its not the predominant approach. Management

science will provide knowledge about motivational techniques, but

in the final analysis it is the art of management that will proportion and apply various types of motivation to achieve maximum results. 131

Motivation (4, p. 340) may be based on such individual desires as personal recognition, participation, fair compensation, under­

standing, confidence and opportunity. If some needs are thwarted,

insistent demands for money are often the result to compensate for

such deprivation. It was also noted that good motivation must start

from the top and work down through an organization. This means

that those with greater responsibilities must be enthusiastic and

anxious to do a better job which helps set the tone for the overall

organization.

One of the most common types of incentive plans is the piece-

rate system. Time and motion study is used to establish the time

allowed for the job and a rate of payment is assigned for each com­

pleted unit. Workers are usually guaranteed a minimum hourly wage

with the piece-work rates being used chiefly as an incentive. The

plan breaks down somewhat in practice because workers tend to set

their own standards according to how hard they want to work and the

pressure applied by the group to maintain a given level of productivity.

Some values of a profit sharing plan in providing incentives

were pointed out by Roberts the President of Vanadium-Alloys Steel

Company (18, p.99) at the 13th International Management Congress.

These values included less supervisory overhead, better quality 132

consciousness, more interest in the state of the business and a finer economic sense in the work force. Other commendable results were a better understanding of profits and prosperity, attracting better employees to the firm and developing an appreciation that quality is

ultimate. It has promoted finer teamwork as well as showing a man that through extra efforts and resourcefulness he can make extra

money.

Some non-financial methods of motivation (43, p. 399) which

should not be overlooked are the use of praise, providing employees

with knowledge of results, competition and being able to identify with

the group. Efforts should be made to help employees feel that their

job is vitally important. Providing opportunities to take part in

group decisions is also an important non-financial means of motivation.

There are many variations of incentive plans in operation (40,

p. 244). Share-the-gain plans are often used when it is difficult to

establish accurate production quotas. A loose time standard is es­

tablished which allows the worker to complete the work in less time

than the standard. He then receives one and one half the normal pay

rate for time saved plus the regular rate for the time spent. The

Gantt Plan guarantees workers an hourly wage rate regardless of

whether the output assigned to the job is met. If the worker^ output 133 exceeds the job standard, the worker receives a bonus based on a percentage of his pay rate. The Emerson Plan provides a bonus for all output between two-thirds of the standard and the full daily rate.

This plan provides incentives for beginners and eliminates the pressure

inherent in plans which provide a bonus only after a full day's standard is met.

Executive incentive payments are generally based on the firm's profit or such standards as cost efficiency, level of capacity main­ tained or sales volume. The criteria on which the latter plans are based are assumed to be related to ultimate profits. Stock options, deferred payments, higher pensions and extra fringe benefits may be especially attractive to a high salaried executive because of the tax-

saving features.

Incentive plans (27, p. 161) should be fair, easy to understand and simple to calculate by employees. The danger of a complex in­ centive plan is that it may create suspicion among workers. A super­ visor should be able to explain in simple terms how the wage rates are figured, whatever the system employed.

Morale and attitudes. Morale (37, p. 338) is a state of mind and emotions, affecting willingness to work which in turn affects

individual and organizational objectives. Morale in this sense 134 outlines employee feelings in all possible degrees from low to high.

It has importance to individual satisfactions as well as affecting organizational success. Such a state of mind is in essence a com­ bination of understanding between one's personal interests as related to company interests. Even the best employee can do still better at his work when his morale is high. High morale results from con­ fidence, perseverance, ambition, enthusiasm and willingness to cooperate and accomplish assigned tasks which are thought to be right.

The first of four points regarding high morale as presented by

Flippo (23, p. 420) is the fact that morale is an intangible attitude or mental condition of people. Secondly, it is an attitude that leads to a voluntary subordination of personal interests. The third point is that this subordination is requested for only a reasonable degree and for a reasonable period. Lastly, the purpose of this subordination of personal interests is to advance the organization's interests. It was concluded that if the above state of mind was produced, good or­ ganizational morale would exist.

Psychologists have contributed extensively to techniques of measuring job satisfaction and morale, particularly by the development of more effective types of questionnaires and by the use of structured- projective devices. Sociometric studies (21, p.427) of work group 135

structure and nominations for leadership roles are used to determine if management appointed leaders are actually the choice of the ranfc- and-file employees. In some cases the leader or foreman is rejected by the workers which usually causes dissatisfaction and poor morale.

Some research (41, p. 84) supports the fact that employee-

centered supervision yields better production and a greater degree

of job satisfaction than production-centered supervision. Personnel

departments have a very important task to perform in helping the line

organization to become employee-centered in its supervision.

Management can control some factors that affect human capacity.

These important factors (40, p. 135) included regularity of work volume,

keeping materials available, providing clear instructions, carefully

planning transitions and providing clear standards of performance.

This requires good orientation procedures, supervisory concern for

signs of low morale, keeping employees informed and consistent

adherence to policy. When it is necessary to deviate from established

policy, the rationale behind such action should be provided.

Some significant features of a morale building program spelled

out by Glover (27, p. 160) included the following: (1) initiating

management to a sound scheme of building morale, (2) analyzing

employee attitudes by utilizing suitable criteria, (3) maintaining two-way 136 communications, (4) effectively training supervisors and foremen,

(5) paying adequate wages and promoting from within when possible, and (6) constantly evaluating effectiveness of the program. Building morale provides for greater effectiveness of operations, a more economical output of commodities, greater competency of leadership, and more confidence in being able to accomplish company objectives.

Task interest. Boredom sets in when the worker loses interest

in his job. Strauss and Sayles (60, p.33) listed five factors related to mass-product ion work which tend to cause boredom. These were lack of variety, lack of opportunity to exercise skill or autonomy,

inadequate sense of accomplishment or progress, inability to control one's work pace and the need for only surface attention or none at all. Thus, the specialization required for mass-production provides for more economical production, but also has many disadvantages.

An environment should be provided in which employees can de­ velop a feeling of accomplishment. Employees will work hard for

goals they have set for themselves, but strongly oppose "unfair"

goals set by management. There must be a feeling that the foreman and management will always treat the employee fairly and with justice.

Psychologists indicate that for goals to be effective there should be a

reasonable chance of attaining them and it should be possible to 137 achieve them in the relatively near future. Job satisfaction can be in­ creased by such approaches as job enlargement, job rotation, change of pace, scheduled rest periods, shorter hours, playing recorded music, relating the job to the larger picture and establishing more immediate sub-goals. Such attempts to change the technology of work should make it more meaningful or at least more tolerable.

Several factors which contribute to maintaining task interest

(27, p. 162) are (1) job security, (2) adequate wage plan, (3) effec­ tive incentives, and (4) vacation with pay. Other factors which tend to sustain task interest are management's recognition of an individual as a person, good leadership, good commuribations, pleasant working conditions and amiable relations with co-workers.

Ethics. Management should spread the seeds of ethics among workers by the actions and practices of executives, supervisors and foremen in their relationships with other employees. This science of moral duty should be inherent in company policies and the rules of conduct derived therefrom. Emphasis should be placed on personnel policies and rules governing the moral obligations of duty. Empha­ sizing ethical practices in the performance of work motivates loyalty and develops high morale. 138

The Creator/ with infinite wisdom, provided a code of moral

laws expressed in the Ten Commandments. The ethical standards for human conduct were prescribed in the Golden Rule: doing unto

others as we would have them do unto us. Glover (27, p. 158) stated

that ethics is the science of human conduct and the moral philosophy

of man.

Some principles of personnel management were suggested by

Jucius (37, p. 30) as follows:

1. Develop a conscious philosophy of management... 2. Establish fair levels of wages, hours and working conditions... 3. Add to fairness the appearance of fairness... 4. Supply employees with relevant information... 5. Make employees feel worthwhile and related... 6. Rewards should be earned not given... 7. Build programs with due consideration for labor's reactions to them... 8. Don't underestimate the intelligence or strength of labor... 9. "Sell" the personnel program... 10. Activate one's principles...

The above principles must be understood and applied with full aware­

ness of their ethical implications. Only then will the personnel

program function with the needed effectiveness.

Discipline. Good discipline means that the worker willingly

abides by company rules and executive orders. Disciplinary action,

on the other hand, means the steps taken to try to stop or correct 139 certain disobedience. Godd discipline (37, p.524) requires that line executives accept their responsibilities in this matter. The line officers must display confidence in the company and its policies if the confidence of employees is to be won and maintained. The super­ visor who fails to enforce rules and regulations tends to lead employees to conclude that neither the supervisor or the rules need to be respected.

Plant rules which are carefully formulated and upheld make a contri­ bution to a safe, orderly and pleasant working environment. These should be in writing and readily available so that employees know the rules and the disciplinary action which results from violation.

A discipline case should be analyzed (37, p.515) as to the nature of the violation, the surrounding circumstances, the individ­ ual or individuals involved and the number of repetitions. Such careful analysis reduces the dangers of false accusations and gives the offender a feeling of getting a fair hearing. It also makes the superior feel more secure in whatever decision he makes. The right to appeal should be provided and company records should be kept of any action taken.

Some forms of disciplinary action (23, p.450) are oral reprimand, written reprimand, loss of privileges, fines, layoff, demotion and discharge. Such negative action should be applied in a positive 140 manner as a constructive attempt to condition behavior and not merely to punish. The action should be prompt, consistent, carried out away from peers and applied by the immediate supervisor except in the more severe disciplinary actions.

Loyalty. Loyalty is an attitude which varies in degree from excellent to negligible. Glover (27, p. 163) stated that in smaller concerns loyalty seemed to be greater than in the large corporation.

Divided loyalties become apparent when a loyal employee is also loyal to his union during periods of strike.

Loyalty to an enterprise starts with management at the top being loyal to the owners of the corporation. Executives must set the example by being loyal to their superiors and cultivate loyalty in other personnel. It can be promoted by gaining the confidence of employees through fair and honest treatment in:an atmosphere of friendship and kindness.

The need to belong and to work for what one belongs to are deep human needs. No life is complete without the experience of display­

ing loyalty through constructive teamwork. Pigors and Myers (54, p. 79)

stated that consulting subordinates for their opinions is one method of

evoking loyalty which is necessary for teamwork. Other ways of fostering loyalty are providing more meaningful jobs, making sure the 141 employee sees how his work contributes to the total output or service and promoting contacts with supervisors that allow employees to know them as human beings;

Safety and Health

The industrial firm should be concerned with the physical and mental health of employees for both economic and humanitarian rea­ sons. Poor health is related to higher rates of absenteeism and lower productivity. Theinvestment in developing key personnel should be protected by regular health examinations. Such potential health hazards as excess noise, vibration, infrared rays, radiation and fumes should be controlled or eliminated. The creation and maintenance of effective human relationships and the reduction of destructive ten­ sions, pressures and antagonisms are proper objectives in promoting mental well-being and health.

Management is properly concerned with the human phases of safety through effective selection of employees and later attempting to identify accident prone employees. Other means of promoting safety are positive training, maintaining good discipline and providing effec­ tive supervision at all times. Supervisors play a key role in impressing workers with the importance that top management places upon safety. 142

Moral obligations. There are many valid reasons for giving proper attention to the safety and health of employees. Can anyone realistically estimate the value of lost members of the body or of lives lost in industrial accidents? Insurance coverage may help, but the individual sufferings and losses are inestimable. The safe and healthy worker gains more satisfactions from his work. Such workers are also more cooperative, have a higher morale, display better work­ manship and are more apt to respect the policies of the plant. In addition, the earnings and progress of such workers are higher.

Management has a moral obligation to diminish or eliminate as many accident causes as lie within its power. Accident causes may lie in either technical or human categories. Technical causes are those related to defective plant, equipment, tools, materials or general work environment. These causes can usually be eliminated through better engineering. Human causes include such factors as improper attitudes, carelessness, recklessness, inability to perform the job and day dreaming.

Flippo (23, p.556) stated that it has been estimated that there are four accidents caused by human deficiencies to every one caused by technical defects. The safety program must, therefore, concentrate more on per­ sonnel aspects than on the mechanical. 143

A great deal has been accomplished to make work safe. Some very ingenius mechanical devices are being used to help protect workers.

Examples include automatic handcuffs which pull an operator's hands from the danger zone, electronic devices that shut off the power as long as hands or arms are in danger zones and shoes with a steel toe plate to guard against falling objects. The use of such devices have the continuing objective of reducing risk exposure and accidents.

Pecuniary implications. Jucius (37, p.532) noted that a quarter of a million working days and the production th'ereof are lost each year by fatal and disabling industrial accidents. The accompanying losses of idle machinery, rearranging schedules and working crews and delayed deliveries are beyond calculation. Such facts as the above explain why industry is placing a high priority on establishing safer and healthier working conditions.

Workmen's compensation laws create an obvious accident cost in the insurance paid to cover the employer's financial liability for medical and compensation benefits for the injured. Flippo (23, p.553) noted that on the average these premiums amount to one percent of the total payroll. The payment of these premiums and the fact that the employer realizes that he can reduce them by eliminating as many accidents as possible is a good incentive to attempt to cut this 144 out-of-pocket cost of accidents. It is estimated that indirect costs are four times as great as the insurance premiums and suit settle­ ments. Indirect costs include such things as lost time, replacement of the employee, equipment damage and the cost of investigating, recording and reporting the accident.

A safety program should have the support of top management with a safety director in charge. Other aspects of the program might

include engineering for safety, an educational program, accident analysis, safety contests and enforcing safety rules. The criterion of effectiveness is the degree to which safety prevails in the indus­ trial operations. Medical, health and accident procedures (37, p.539)

should be properly implemented with adequate reports and records.

Vital decisions are often based on such records so that they should be carefully recorded and filed. Records would cover situations which may include medical examinations, dispensory cases, accident reports, working conditions surveys and possible trends of accidents,

illnesses and first-aid cases.

An influential agency promoting safety is the National Safety

Council (37, p.554). It cover fields in addition to industrial safety

with the purpose of reducing the number and severity of all kinds of 145 accidents. It serves as a national and international clearinghouse to gather and distribute information regarding causes of accidents and their prevention. A continuous and unified program of accident pre­ vention is conducted by its headquarters and regional, state, and local units.

Industrial health and safety is promoted by the Council through

investigations of means to make equipment and working conditions

safer. This assists management and employees to locate hazards and

guard against them in addition to recognizing and preventing occupa­ tional diseases. Programs are outlined for stimulating and maintaining

safety consciousness both on and off the job.

Communication

Communication is basically a problem in education. A manager,

by means of communications, is attempting to educate his subordi­

nates. An employee who fails to see his interests in the profit

system may waste materials and time and even knowingly damage

machines and equipment. The individual is adjusting to the situation

as he sees it. Management uses communications in attempting to

change his thinking in order to bring about an adjustment to the working

situation which is more constructive. Obstacles to effective commun­

ications include (37, p.368) the difficulties of learning, of changing, 146

individual human roadblocks, semantics, class stereotypes and just how much communication is enough. All of these factors must be assessed and dealt with if effective two-way communications are to be maintained.

Three concepts relative to the communication process were pre­

sented by Brunauer (4, p. 349). First, effective communication must

be a two-way process with both the sender and the receiver actively

participating. Second, individuals communicate in such diverse ways as by words, facial expressions, tone of voice, posture and gesture.

Third, communication does not take place automatically but requires

some effort on the part of the receiver to understand the communicator.

These concepts point to the need for developing personal skill in both

oral and written communication. They also indicate a need for the

intelligent utilization of all available channels of communication within

the organization to maintain effective two-way communication.

Fischer (41, p. 170) presented the following requirements for

an effective communication program in industry:

1. Express the needs and character of the organi­ zation. ..

2. Communication grows best in a climate of trust and confidence... 147

3. Communication should form an integral part of each executive's job...

4. Communication must be a continuing program, not a brief campaign...

5. Communication must be stimulated...

6. Communication must be directed to a purpose and a person...

7. Communication must move freely in both directions...

8. Communication must consider the supervisor's role...

9. The lines of communication should be as clear and direct as possible...

10. Communication must reflect the everyday policies and practices of management...

A National Association of Manufacturers booklet (48, p. 11) presented some characteristics of a successful communications program which were similar to those above.

Good communication is a function of fine morale, according to

Cantor (13. p. 23). Respecting subordinates, encouraging and accept­ ing differences of opinion, easily admitting one's mistakes, exploring situations rather than condemning the people involved, relating to people for whom you are responsible in a friendly, accepting atmos­ phere and demonstrating one's capacity to continue to learn from 148 subordinates are some leadership qualities which create the kind of morale out of which genuine communication arises.

The employer who consistently does a good job of telling the company story (48f p. 15) will find that when the going gets rough, employees will have a reserve of factual knowledge to fall back on for making decisions. If employee communications are regarded as a way of life in industry, a sound foundation is maintained for coop­ eration and productivity which fosters harmony in the work group and individual satisfaction on the job.

Communiques in writing. Such means as posters, bulletin boards, company newspapers and magazines, letters to employees, annual reports, handbooks and payroll inserts are employed for communicating with employees. Glover (27, p. 173) stated that indus­ try spends over half a billion dollars a year for printed and visual materials. The bulletin board is the most often used communication device. Industry is becoming more aware that the bulletin board can be a very effective informational channel and at a cost far lower than practically any other communication means. The trend in bulletin board displays is toward better written material, good lighting and use of art and color. 149

The employee handbook is the second most popular written com­ municator. The handbook is a prime information device for giving the employee a view of the company as a whole, so that he will not think only in terms of his own job but will feel part of the organiza­ tion. The handbook is usually designed to serve as a sort of textbook for the employee on the many questions that will arise during his ser­ vice to the company. A National Association of Manufacturers booklet

(49, p. 6) noted the value of sound personnel policies being in writing.

It promotes job satisfaction and tends to establish the employer's respect for the dignity of employees and helps to establish the char­ acter of management.

The employee magazine or house organ is another popular means of communication with employees. Industry spends upward of

$200,000,000 dollars a year on house organs for employees. Such communiques range anywhere from a mimeographed single page to attractive, slick paper, four color releases.

Writing has many advantages (12, p.280) as a medium of commun­ ication. Precise announcements can be presented uniformly to all.

Another advantage is that it fixes responsibility and affords a per­ manent record. Written communications serve as a source of reference for orders, procedures, policies, commitments and regulations. Such 150 communications are often good motivators in that they are appreciated because of the extra effort represented and they can be kept, reread and shown to others.

Oral. Oral communication is frequently used by management with regard to assignments, job performance and situations which demand immediate attention or personal emphasis. A major advantage of oral communication (16, p. 276) is that it provides an opportunity for those listening to question the speaker and express their opinions and feelings. Speech also involves less work than written communi­ cation. One must organize what he wants to say and consider how he wants to say it, however, in order to effectively communicate.

Rapport and empathy are important elements in developing understand­

ing. Listening tends to be neglected as a communications skill which

can be improved through self-analysis and training.

The supervisor has a pivotal role with regard to promoting oral

communication between employees and management. A National

Association of Manufacturers publication (48, p. 14) noted several factors whtch top executives should give attention in making front­

line management effective, namely:

1. ... giving supervisors full and advance information regarding company policies, programs, plans, developments 151 2. ... assuring existence of an open channel of communications from the supervisor to top management

3. ... teaching foremen to "listen" to employees and thereby to recognize friction spots

4. ... helping the supervisor to combat misunder­ standing and misinformation that exists in the minds of employees

5. ... dispelling false rumors with facts and figures

6. ... refraining from "passing the buck" to super­ visors when unpleasant news must be transmitted

7. ... giving credit and recognition to the supervisor who does a good job of communicating.

First-line management needs to be recognized as an essential com­ munication link between management and employees.

Informal. Informal communication takes place between group members outside the formal channels. This is independent of the formal organizational structure, but still provides an important channel of communication. The grapevine may be longer than the formal lines of communication, but it still often provides for more rapid trans­ mission of news and gossip. The danger of the grapevine is the dissemination of inaccurate or false rumors which presents a challenge to the planned communication of management.

The grapevine may be used by management (16, p.279) for testing ideas or changes by sending up trial balloons. Proposed plans or 152 ideas may be fed into the grapevine to get a sample of employee reac­ tion. Some companies, on the other hand, wisely provide for quick and authoritative answers to rumors by having employees write their questions. Answers are provided promptly by responsible officials.

Horizontal and vertical. Communication which is composed by management and directed toward employees (16, p. 278) is referred to as downward communication. Upward communication is that which provides subordinates an opportunity to make their ideas and attitudes known to management. Horizontal communication is that which takes place between personnel, generally on the same level in the organi­ zation.

Most communication should flow through formally established channels whenever possible. The use of these channels strengthens the status of supervisors and the formal organizational structure.

It also tends to provide for feed-back or upward flow of information.

Communication improves when the people engaged in the specific task feel that others have condifence in their ability, trust their judgement and seek their assistance. Superiors must share this feeling before subordinates can feel this way. Cantor (13, p.25) stated that com­ munication up the line increases in proportion to the humility commun­ icated down the line. 153

Horizontal communication between members at approximately the same level in the organization (16/ p.562) should be encouraged.

Supervisors ought to have the opportunity to communicate between departments on mutual problems. The personnel department should consult freely with other departments in order to carry out its work effectively. Subordinates, however, need to get permission from their

supervisors to communicate with employees in other departments.

Individuality of the Employee

There was a time when labor was thought of as a commodity to be purchased as cheaply as possible, used ats the needs of the busi­

ness dictated, and discarded when not required. Houston (35, p. 113)

noted that presently there is a concern for the worker as an individual.

Efforts to provide employee development, motivation, incentive com­

pensation and benefit plans are indicative of this concern. It is

increasingly realized that there is a broad range of individual differ­

ences In employees. Such differences are due in part to differing

abilities, interests, motivations, backgrounds, ideas, attitudes and

prejudices. It is necessary to recognize and deal with these facts

effectively if the individual is to be thought of and dealt with as

truly unique. 154

Dignity and worth of the individual. One justification of man­ agement's interest in human relations is a firm moral conviction regarding the dignity and worth of the individual. Such a conviction should be extant because it is morally right and not because it will make money or keep out the union and government. Flippo (23, p.402) noted that surveys of business literature have shown an increased interest in the ethical and religious foundations of management. It needs to be practiced Monday through Saturday rather than just glibly accepted on Sunday, however.

Sanchez, President of Sanchez Foundation in Venquela (18, p.84) presented a paper at the 13th International Management Congress in which the need was indicated for a firm conviction regarding the dig­ nity and worth of the individual. It was noted that respect for private property, a competitive market, democratic governments with auth­ ority but limited powers, liberty and responsibility, should have as its basic objective the dignity and worth of man. Service based on the primacy of the individual worth of man is the rightful justification of business activity. 155

The importance of the individual in our market economy was well stated by Rockefeller (18, p. 4) in a paper presented to the CIOS

International Management Congress in 1963 as follows:

... To us, man himself — not a class or a state or a social system — is the central element. His consent is the essence of our political life. His happiness is the essence of our economic philosophy. His salvation is the essence of our spiritual order. His personal freedom is the ultimate test of all we value.

It behooves managers then to act responsibly in their decision making in order to preserve both individual freedom and freedom of the market.

Interest in employee as an individual. The supervisor plays a key role in motivating the employees under his direct supervision.

A common means of providing such motivation is simply to display a warm interest in the employee as an individual. Close and continuing contact with employees may allow the supervisor to learn something of the employee's recreational activities which may be of mutual inter­ est. Being able to call the employee by his first name and being inter­ ested in more than his role on the job helps one feel a vital part of the organization.

Hayes (4, p.434) noted in relation to management's relations with the public that the dignity of the individual is often too easily forgotten. Each individual, by and large, is conscious of this great 156 possession. A man frequently cherishes it to the point of extreme

jealousy. An individual doesn't want to be known as just one of the plant's electricians, but rather prefers to be thought of as Joe Brown.

The foregoing indicates the vital importance of effectively

managing the human resources of an enterprise. Personnel manage­

ment seems to be a managerial task which will receive more attention around the world in the future. Industrial management will next be viewed from the vantage point of the functional organization. CHAPTER V

MANAGEMENT AND THE FUNCTIONAL ORGANIZATION

Concepts of industrial organization, coordination, organiza­ tion charts, automation and/or cybernetics and the primary functions of management will now be discussed. Various theories of organiza­ tion will be explored as well as the bases upon which an industrial organization is divisionalized. Delegation of authority will also be discussed because of its importance in effectively carrying out managerial tasks. The development and maintenance of an effective organizational structure is one of management's basic concerns.

Organization is essentially the coordinated efforts of many persons toward common goals. According to Harbison and Myers

(29, p. 3) the structure of organization is almost inevitably a hier­ archy of superiors and subordinates in which the higher levels exercise authority over the lower levels. The leaders of organiza­ tions in any society are a small but aggressive minority. These individuals feed the aspirations, give expression to goals and shape the destiny of people and organizations.

157 158

Harbison and Myers (29, p. 13) identified four levels of per­ sonnel in the managerial hierarchy as follows:

1. Promoters, top administrative officers, and directors who may be owners, part-owners, or simply hired professionals

2. Junior executives, administrators, and other members of the middle-management group

3. Staff specialists, technologists, and experts, such as scientists, engineers, lawyers, and personnel and labor relations officers

4. First-line supervisors

The efforts of the managers of each of the four levels need to be coordinated through effective organization.

Niles (51,pl86) presented some principles of organization which seemed particularly appropriate. These are paraphrased in abbre­ viated form as follows:

1. Functions and tasks should be allocated in a way that points of consultation and decision are known.

2. The point of decision should be as close to the point of action as is practicable.

3. Functions and tasks should be grouped to allow action, consultation and coordination with a minimum of overlap, delay or confusion. 159

4. The occupant of each position should know to whom he may or must report and who reports to him.

5. The duties, responsibilities and limits of discretion should be made known to the occupant in writing, especially where the duties are supervisory.

6. The allocation of functions to each organizational segment and of tasks to each position should be confined to related functions or parts of functions.

7. Assignment of a responsibility entails that one accepts the duty of carrying it out within the framework of relationships, struc­ ture, policy and procedure relating to the situation.

8. The number of positions reporting to one supervisory or executive position should be within the limits of a feasible span of control.

9. The levels of the organization should be kept to a minimum to shorten the lines of communication from the top position to the lowest.

10. The lines of organization should be clear, definite and known. These principles should serve as effective guides to action in developing and evaluating organizational patterns. 160

Theories of Organization

According to Argyris (41, p. 368) a philosophy of management is needed that views the individual and the organization as not only inter-related but inter-penetrating one another. This philosophy would recognize the right of health for both individuals and the or­ ganization which comes from the individual inter-penetrating the organization and the organization inter-penetrating the individual.

Organizational theory can be used to measure reality, uncover alternatives and fix goals. Organizational planning should be accom­ panied by organizational scanning. The latter, according to Uris

(61, p. 35), provides for constant reappraisal of current organiza­ tional arrangements to see how individuals and structural formation can be further developed toward the ideal. The significance of effective organization is the soundness of the practical solutions made possible. Soundness in this case is measured by the cost of operations on the one hand and the human values of work satisfaction and personal fulfillment on the other.

The established organization structure, according to Voris

(64, p. 25), defines relationships concerning authority and responsi­ bility between functions. This permits a person doing certain work or performing a certain function to know the extent of his authority and responsibility. Its objective is to maintain a basic relationship among factors of production, functions and personnel in the company.

Healey (45, p. 48) presented some principles of organization in an AMA publication dealing with management for the smaller enter­ prise. These principles were in short as follows (1) organizational

structure must be based upon the needs of the enterprise, not upon the qualities of present personnel; (2) similar activities should be

grouped in a single organizational unit with the direction of these

similar activities emanating from that same unit, even though parts

of the activities are carried out elsewhere; (3) each employee should

be accountable to just one superior; (4) authority and responsibility

ought to be delegated to the lowest level of the organization at which the particular responsibility can be discharged; (5) the num­

ber of subordinates accountable to a manager should be based on

balancing the essential subordinate activities, the abilities of the

superior and the communications and expense aspects of the situa­ tion; and (6) each position should have a clear statement of its responsibilities and the authority of the employee holding the posi­

tion to discharge these responsibilities. The above principles should

serve as guidelines in evaluating various theories of organization in

attempting to develop the optimum organizational structure. 162

Line organization. Line organization (8, p. 15) is a simple structure in which a straight line responsibility and control exists from top to bottom in the organization. A line relationship may exist from general plant manager to superintendent, to foremen and to the operative employees. It is sometimes referred to as military organ­ ization, but the similarity is obsolete in that the armed services now have special divisions with both horizontal and vertical lines of authority and responsibility.

The principal advantages of the line structure, according to

Keith and Gubellini (40, p.86) are (1) simplified relationships among individuals, (2) fixed authority and responsibility from top to bottom,

(3) simplified discipline, (4) less red tape and buck passing, and

(5) provision for quick top management decisions.

There are several important disadvantages of the line organi­ zation: (I) the organization depends more on top personnel than with other structural patterns, (2) growth of the enterprise tends to overload some of the supervisors, (3) the pattern makes little pro­ vision for specialists, and (4) too much authority is sometimes assigned to a few people. These disadvantages indicate that the most serious shortcoming may be that it doesn't bring out the best in all the people in the organization. 163

The line organization (40# p.57) fixes authority and responsi­ bility to an extent that the individual at the bottom has little choice but to do what is handed down from above. Little conference or consultation takes place along the line in that, strictly interpreted, it is merely passing along orders established by top management.

It was noted that very few present day businesses of any size can effectively operate on such a basis.

Line-and-staff organization. Line organization tends to con­

centrate authority while functionalization has the effect of dispersing authority. The best features of both the line and functional approaches to organization are combined in the line-and-staff organization, according to Keith and Bugellini (40, p. 88). Authority flows largely along fixed channels as in the line organization, but provision is

made for specialists by creating staff positions. The staff then acts

in an advisory capacity to line officers. The chief advantage is the

provision for the use of expert advice while preserving the integrity

of the basic channel of authority. One disadvantage is the fact that

line executives sometimes fail to listen when sound staff advice is

offered. Another drawback is evidenced where staff personnel try to

force their services on the line. 164

Line and staff functional relationships (64, p. 25) should be

clearly drawn in the organizational structure. A staff activity has a

different type of authority and responsibility from a line function.

Staff personnel provide specialized assistance to the line and other

staff elements. A carefully planned organizational structure where

this relationship is clearly spelled out will reduce the number of

conflicts which occur.

Voris (64, p.32) noted six basic contributions of staff activities

in an industrial organization. They were assistance, research, coor­

dination, information, advice and analysis. All staff activities

perform one or more of these tasks. For example, a personnel depart­

ment might provide advice, information and assistance and do some

coordinating.

Some advantages of line-and-staff organization (38, p. 161) are

provision for developing the specialist, allowing line executives

to concentrate on securing effective performance of their primary func­

tion and flexibility in providing specialists at any organizational

level. The following page. Figure 2, presents a line-and-staff organ­

ization chart (1, p. 4) which shows the principal levels of organization.

The divisionalization of a company along product lines is also illus­

trated. Fruitful training ground is provided for management development. 165

Figure 2

ORGANIZATION CHART* Principal Levels of Organization

STOCKHOLDERS

BOARD OF DIRECTORS ADMINISTRATION PRESIDENT DIRECTION CONTROL CORPORATE CORPORATE VICE- VICE- STAFF PRESIDENT PRESIDENT SERVICE GENERAL ADVICE MANAGEMENT COORDINATION

CORPORATE CORPORATE CORPORATE CORPORATE VICE- VICE- VICE- VICE- PRESIDENT PRESIDENT PRESIDENT PRESIDENT

AMERICAN GRIFFIN DIAMOND GRIFFIN STEEL PIPE CHAIN WHEEL FOUNDRIES PRODUCTS COMPANY COMPANY [NCORPOR- CO. INC. !VTED

AMSTED PIPE LINE GRIFFIN RESEARCH SERVICE STEEL LABORA­ CORPORA­ FOUNDRIES TORIES. TION LTD.

JOUTH BEND AMSTED ATHE, INDUSTRIES ;:NC. INTERNATION­ AL. S.A.

•American Institute of Management. Management Audit, p. 4. 166

The training needs to be balanced through experience in the specialized work of various divisions. Valuable experience may be obtained by actually working under the supervision of the staff and line unit heads.

Committee. Villers (63, p. 79) related that committee management is sometimes presented as a specific approach. It is actually a part of any well managed organization rather than a theory of organization as such. Committee meetings provide opportunities for exchanging opinions, clarifying misunderstandings, disclosing undetected problems and gaining from each other's knowledge and experience. Thus, they provide a good means of communication. Committees should investi­ gate a problem and make recommendations to the proper executive.

Decisions should remain the responsibility of one individual, the executive under whose jurisdiction the problem falls.

The committee is a dynamic parto£organization. Advantages include coordination, identification of members in decision-making, positive contributions of ideas and the education and development of members. To make committees a positive asset, more attention should be focused on motivation, on shared participation and on effective leadership in committees. It is one of the most widely used means of getting people to work together in solving problems. 167

Committees may be set up at various levels in the organization.

A committee of top executives (53, p. 52) may be concerned with such topics as operating budgets, public relations, research, patents and division expenses. Lower in the organization, committees may be formed to investigate such problems as accident prevention, recrea­ tion programs and reduction of waste. Committee membership should generally be limited to provide for a feeling of personal responsibility for participation. A committee should be formed for a definite purpose and discontinued when its objectives have been accomplished.

Functional organization. An organization based on functionali- zaititbn has every person doing a particular type of work falling into a single division. Thus every electrical worker, for example, is responsible to the supervisor of electricians. It is argued that this is sound because an electrician should better understand the problems which electrical workers face and be better able to evaluate their performance than someone with no electrical experience.

A problem is created by functionalization (40, p. 88), however, in that authority is diffused and there is a loss of effective control.

This is true because workers cannot be grouped functionally in the actual production system. The interrelationships which necessarily exist between functions may place the individual worker under the 168 direction of two or more supervisors without a clear indication of who should guide his actions. It was concluded that for the above reasons pure functionalization is seldom seen in practice.

There are advantages to functionalization which management attempts to gain by assigning certain well-defined divisions of work to specialists while retaining a fundamental pattern of organization that is not functionalized. Keith and Gubellini (40, p. 88) listed such advantages as (1) providing for the use of special skills, (2) simpli­ fying training through narrowed work areas, (3) determining manpower requirements more easily, (4) fostering the division of labor which usually increases efficiency and (5) providing a flexible system which is adaptable to growth.

Owens (53, p. 57) stated that the functional form of organization was never widely adopted in industry. Its weaknesses were discovered through experience and by 1920 it had been largely discontinued.

The major weakness was the violation of the basic principle that an employee should be responsible to only one boss. It hastened the development of a line-and-staff organization which provides for the assistance of specialists through staff departments.

Multiple management. Multiple management as a means of promoting participation on the part of employees has had wide effect. 169

The plan (51, p. 340) was first adopted by McCormick and Company, packers of such commodities as spices and tea. A board of directors existed but McCormick established a junior board composed of mem­ bers of middle management and of workers. Those serving on the board were elected for three-year terms on a rotating basis. Others in the company were encouraged to bring ideas to committee members in order for the ideas to be thoroughly studied. The outstanding re­ sults have caused more than 500 corporations to copy all or part of the plan.

Junior boards (38, p. 367) are developed which analyze problems and attempt to solve them in much the same manner as the board of directors. This system has been used to develop managers as well as a means of eliciting ideas from throughout the organization. The junior board considers a broad range of problems on which it makes recommendations to the president or the senior board. These groups often provide a large number of recommendations which are later approved by the senior board.

The board system developed by McCormick (14, p. 1.22) helps those participating recognize their interdependence. It is based on a realization that personnel can learn something from each other. An atmosphere of mutual trust is developed which releases 170 the constructive talents inherent in those taking part. The system is designed to free employees from brooding over management's unfairness.

This allows them to direct their energies toward constructive ends.

Lines of Divisionalization

A division (63, p. 125) is a part of a functional organization that has been divisionalized or split into separate units. The division is a unit of an organization which makes a profit on its own. Divi­ sions may be decentralized (6, p. 149) on a geographic/ product, process, market or service basis. The actual decisions and proce­ dures may remain centralized, however, rather than being delegated to decentralized locations.

Various lines of divisionalization are .usually evaluated in the decentralization process. Lines of divisionalization depend on such factors as product diversification, growth of the enterprise, new processes, a changing market, added services or advantages of a given locale. The personalities of the executives and the historical back­ ground of the company may also play an important role.

Function. A similarity of functions (38, p. 170) is one of the most commonly used bases for grouping work units. One industrial division may be established which deals only with sales. Another division 171 may be concerned solely with production or possible research and development. In most cases, however, a given division would be responsible for several functions with care being taken to avoid duplication and overlapping among divisions.

A multiplant company (53, p.57) often has certain staff functions performed at the main plant. These functions usually include engi­ neering, industrial relations,public relations, legal advice, and pur­ chasing and traffic. Advice is thus provided to the chief executive officer and operating executives on general plans and policies to be followed in all of the divisions.

Divisionalization based on function (36, p. 6) has the advantage of making good use of specialization. It should provide for long-run planning and consultation for those in charge of major management functions. One disadvantage is that it is subject to managerial conflicts over limits of authority in multi-plant organizations. It is often necessary to centralize coordination and control for effective operations.

Product. Divisionalization based along product lines (63, p. 127) is commonly used. It places a division in charge of a given line of products. In most cases it includes all the functions involved in developing, manufacturing and selling a given product line. The 172 division acts as a separate business in carrying out these functions,

subject only to overall controls from the central office. Product divisionalization is evidenced in such companies as DuPont, General

Electric, General Motors and Sylvania.

Product divisionalization (36, p. 6) has the advantage of bringing together and coordinating the major activities required to manufacture a given product or line of products for close control and accounting

comparability through central staff assistance. Generally, a basic

consideration is whether a given product line is large enough to make an efficient and economical single division.

Geographic. Divisionalization based on geographic location

is often beneficial in terms of the proximity of the market or raw

materials. One serious disadvantage (63, p. 127), however, is dupli­

cated efforts in such functions as research and development. Manu­

facturing costs are also increased by using several plants.

Operating conditions sometimes make such divisionalization necessary.

Oil companies have divisionalized on a geographic basis. Some rail­

roads and public utilities and companies operating in foreign coun­

tries have also divisionalized in this manner.

Product and geographic divisionalization (36, p. 6) may be

combined with plants located in various places producing different 173 products. The selling function alone is often divisionalized on a geographic basis. This provides for decision-making near the local conditions, thereby promoting selling which varies in different parts of the country. It also provides for taking advantage of opportunities arising on the spot. Operations are easier to coordinate on a limited geographic scale. It also facilitates continued operations in times of emergencies such as a natural disaster or war.

Semi-divisionalization. Organization in a multiplant company

(53, p.59) will depend largely on the number of products manufac­ tured. A single product company may place one person in charge of each major function such as sales, production, purchasing and finance.

A company producing a variety of products makes it possible to use one of several organization patterns. One manager may be in charge of the production and sale of each product with staff assistance and advice provided from the central office. On the other hand, sales may be divisionalized while production remains centralized. Other methods of semi-divisionalization can be found in some companies.

Another type of semi-divisionalization (63, p. 128) is separately creating divisions for production and others for sales. Each of the production and sales centers becomes a profit center in its own right.

This is accomplished by having the marketing division purchase 174 products from the production group. Arbitration is used in case of disagreement over price. This is an unusual approach which has had limited application.

Divisionalization (63, p. 127) may be partial in that some func­ tions are the responsibility of a plant producing a given product line while other functions remain the responsibility of the central office.

For example, the production of products may be divisionalized while sales remains centralized. This may be used in the transition period as a large functional organization is divisionalized. After the divi­ sions are well established, sales may be assigned to these units.

Interfunctional Relationships

Various functions such as research and development, adver­ tising, quality control, purchasing and personnel must be coordinated in order to work together harmoniously. Many formal as well as in­ formal relationships exist which should be analyzed in order to handle properly any possible friction between two departments. The personnel department may well provide service, advice and some control. This establishes a set of complex relationships with plant management as well as various other departments which need to be clarified by defin­ ing limits of responsibility and authority. 175

Decentralized operations (63, p. 108) often require centralized planning and control along with decentralized authority and respon­ sibility. It is an effective means of coordinating an enterprise and provides for the legitimate aspirations of individuals. Although comparatively new, it has been increasingly applied to small, med­ ium and large companies alike because of the results it has achieved.

Departmental relationships. Owens (53, p. 70) stated that horizontal coordination is achieved through getting the various de­ partments at each level to work together effectively. Sales should direct its efforts to selling the quantity of goods that can be effic­ iently manufactured by the production department while the finance department raises just the right amount of funds.

Horizontal coordination is fostered by effective communications.

Direct communications are best at a given level of the organization.

Care must be taken, however, to assure that immediate supervisors are kept informed of agreements reached or what new programs have been initiated. Owens (53, p. 72) felt that managers need to try to develop teamwork, reduce departmental rivalries and frictions as well as cultivate an interest in the success of the whole company.

Four elements of coordination (8, p. 5) are cooperation, good human relations, understanding and communications. Good 176 departmental relationships require the interest and willing cooperation of both managers and employees. This means that overall company goals need to be such that they are accepted as justifiable, worthy and consider all the interests involved. Good human relations assists interdepartmental harmony by making people more approachable in discussing mutual problems. Communication resulting in understand­ ing should be fostered among departments while making certain that immediate superiors are informed.

Courteous/ informal discussion of a problem by those nearest to it (8, p. 14) may facilitate its solution and minimize misunder­ standing and distrust. Free discussion between departments can, however, develop into a serious weakness in organization. It can waste a lot of time and weaken effective coordination and control.

Managers would become uninformed thereby becoming ineffective if they were not given knowledge of such inter-departmental contacts.

Thus, such contacts are recognized for their values but are confined to where they are needed and placed under the control of departmental managers.

One duty of the foreman (17, p. 143), which should not be neglected, is to cooperate with the foremen in other departments.

A foreman is certainly not promoting the best interests of the entire 177 company if he achieves results at the expense of other shops.

Friendly rivalry between departments is a healthy condition but jealousy or selfishness almost always interferes with the best inter­ ests of the company as a whole.

Coordination of functions. The basic methods of accomplishing the coordination of functions (20, p. 106) are coordination by superior executives, staff coordination for an executive and cross-coordination by lower level personnel. The latter method involves personal con­ tacts between subordinates on their own initiative. This happens often, even when there are well established objectives, policies and general methods. It becomes a necessity when emergencies arise and time becomes the essence of the problem. All the above methods are used to relate the activities of various functions accord­ ing to a plan with respect to time and the correct order of performance.

The effective coordination of such functions as production, quality control and sales are essential in order to maintain a viable industrial organization. Overall plans must be developed with the responsibilities of each function made explicit on a tentative time­ table basis. For example, unexpected difficulties in production may require concentrated efforts over a period of time in attempting to solve these problems. This is necessary to get production moving 178 normally so as not to disrupt other functions because of lack of finished parts, sub-assemblies or products. Coordination in this sense then is creating an intricate balance of outputs or progress among the various industrial functions.

Kappel, chairman of the Board of the American Telephone and

Telegraph Company (18, p. 10), stated at the CIOS International

Management Congress that three prerequisites were necessary to coordinate business and science. The first necessity was that mana­ gers, scientists and engineers must be able to listen as well as talk to each other with each looking to the others for assistance. A second necessity was the need for company purposes which are exact yet broad enough to compbi the deep personal interest of managers and scientists as well as engineers. A third prerequisite to coordi­ nating business and science was an atmosphere of full freedom for investigators in basic research. The problem of the coordination of the functions of business and science were viewed from a systems approach. The two were conceived as forming a united system in which each part becomes as indispensible as the individual workings of a fine watch. If one part of the system is malfunctioning, it affects the entire system. 179

Leadership span of control. The number of subordinates that report to a manager (12, p.59) constitutes his span of control. With too many persons reporting to a manager it may become difficult to consult on problems. A narrow span of control may result in over-

supervising or breathing down the necks of subordinates. The concept of accessibility points to the possibility of a wider span of control.

This involves making contacts available to a relatively large number of subordinates while daily interaction takes place with only a few.

Another idea which tends to enlarge the span of control is acceptance of the belief that the manager's primary function is to develop team­ work or cooperation

There is no magic number or universal rule of thumb in setting

up the number of employees who should report to a given manager.

This is because such factors as the following (12, p. 60) need to be

considered: variety and importance of activities under one's control,

time allocated to supervision, repetitiveness of activities, ability

of subordinates, extent of decentralization and staff assistance pro­

vided. Other variables include the degree of creativeness involved

in the supervised activity and the length of time people have worked

together. 180

According to Harbison and Myers (29, p. 37) the appropriate span of control varies with the nature of the business operations.

It also varies with such intangible factors as individual personalities, the communication process, the democratic or authoritatian nature of executive leadership and the motivational patterns of working groups.

Efforts to limit the span of control may conflict with the principle of decentralized decision-making authority which seeks to flatten the hierarchy of authority. Limiting the number of subordinates who report to a given manager extends the number of levels in the organ­ izational structure. On the other hand limiting the number of levels in organizational structure tends to extend the number of subordinates reporting to one superior.

The leadership span of control determines whether an organiza­ tion structure shall be flat or deep. The need for easy communication is a basic consideration in determining the number of supervisory levels. Keeping supervisory levels to a minimum takes advantage of experience at all levels and provides broad communication channels which permit a free flow of information. Anderson (5, p. 79) noted that the desirability of a flat organization, however, must be equated with the human limitations of supervisory burden. Flexible Integration

The functional organization is a complex system composed of many sub-functions. Flexible integration (63, p.81) refers to the fact that no rigid pattern should be followed in establishing the rela­ tionships among specialized functions. This concept recognizes the growing complexity of modern industrial enterprise and seeks to meet the challenge by providing for integration, flexibility and organizing for flexible integration.

Integration of functions is necessary because skills have become specialized to the point where no function has meaning by itself, but gains significance only in relation to other functions.

This places a premium on cooperation, effective communication channels and clear lines of authority and responsibility. Providing for flexibility is essential because interfunctional relationships are so complex and subject to change that integration cannot be achieved if one is bound by a rigid pattern. Management should organize for flexible integration by making organization a distinct function and providing specialized skill and adequate time to fulfill its tasks.

Davis (20, p. 144) noted the need for flexible procedures to meet changing conditions without undue loss of effectiveness. Flexibility is needed in adjusting to rush orders, seasonal changes, sales 182 forecasts and other developments which force changes in plans.

This requires a flexible organization structure as well as flexibility expressed in a willingness to change policies. Such flexibility serves as oil in lubricating the many interrelationships in the com­ plex industrial enterprise.

Flexibility as vital element in viable organization. Continuous planning (36, p. 3) is called for in the industrial enterprise in order to adapt to changes in people, resources and environment. Flexible planning is essential in maintaining balance in the various units of the organization. This involves planning against excessive or deficient strength in any departments. A business cannot be more effective than the organizational structure permits.

Dr. Robert L. Kahn (18, p. 733), Professor of Psychology at

The University of Michigan, noted a need for flexibility in solving role conflict and abiguity in large organizations. There is a grow­

ing realization that this will involve changes in organizational

structure as well as improved interpersonal skills. Flexibility is required in innovating and evaluating when striving to establish and maintain organizations which are compatible with human needs.

Some characteristics common to differing types of organizations

(39, p. 308) are growing size and complexity, specialization of skills. 183 diversity of objectives and the need to adapt to a changing environ­ ment. As science and technology continue to advance, organizations must be increasingly able to adapt to the resulting changes in envir­ onment. These organizations must not be thought of as statip systems.

A dynamic adaptability is necessary in order to meet the challenge of continued change. It is often desirable to initiate changes in the operating situation rather than simply adjusting passively to altered circumstances.

Organizing for flexibility and integration. Industrial organiza­ tions (20, p. 115) need to be flexible enough to effectively adjust to the effects of cyclical and seasonal changes. Such flexibility is desirable in order to promptly meet changing competition, adjust to a different work load and provide for continuity of employment and income. Flexibility is also necessary in order to effectively utilize manpower during periods of expansion or contraction. Such organi­ zational flexibility requires the development of flexible physical facilities as well as flexible people. It also depends on the quality of top leadership and the cooperation of many subordinate line and staff groups.

Bethel and others (8# p.470) noted that the modern industrial enterprise must become as dynamic and fluid as the world in which it 184 functions. This requires a readiness to prune or make over the organ­ ization or its operations as changes occur. Management must con­ scientiously appraise changing conditions to take advantage of opportunities which serve the interests of the enterprise as well as society as a whole. Flexibility must be planned and built into the organization in order to keep pace with the rapidly evolving technology.

Management must continually organize (63, p.9) for an effec­ tive integration of the human technical and economical factors of production. It involves integrating the efforts of groups of employees with diversified backgrounds, training and ability in order to reach a given production goal. Costs must be within acceptable limits according to the conditions prevailing at the time. Special consider­ ation must also be directed toward the human factors involved. Such

integration of diverse factors is the key to successful industrial man­ agement.

Organization Charts

The complex functional relationships extant in a large industrial organization (63, p.85) cannot be adequately shown on a chart, but

need to be fully recognized. The common organization chart clearly

shows the most important aspects of the organizational pattern. The 185

structure displayed by the chart is based on such considerations as the needs of the enterprise, conditions of operation and the back­

grounds and relationships of the personnel involved. The chart should be thought of as being temporary for the company. Changing con­

ditions of operation or new personnel may require modification of the

chart.

Uris (61, p. 31) reported that astute observers of organization have repeated time and again that organization should decide the

need for personnel rather than have personalities dictate the form of

organization. Another way of stating it is that the man should be

fitted to the job rather than the job being fitted to the man. This

places importance on developing effective selection and promotion

policies.

Calhoon (12, p. 60) distinguished between organization charts

which are scalar and those that are functional. Scalar charts show

the relation of people and/or jobs to one another. Those referred to

as being functional charts show duties, tasks and responsibilities

of each job, or a combination of jobs, people and duties in relation

to one another. Both kinds of charts show the chain of command,

follow the principle of unity of command and indicate spar e>f control. 186

Charting methods used by different managers (20, p. 120) should be similar to provide comparisons between various divisions. The charts should be simply presented and easily understood by those in the organization. They should be readily changed and reproduced when organizational changes are made in order to keep them up-to-date.

Graphic portrayal of feasible structural relationships. An organ­

izational chart; is a graphic presentation of positions in the enterprise

(5, p. 64) which also presents the formal lines of accountability among them. Each block on the chart should represent a separate position. All official positions should be shown on the chart even

if one or more are not filled when making out the chart. Some com­ panies develop charts showing only management positions, whereas others show all positions. Organization charts can play an important part in organizational improvement. Seeing an organizational pattern graphically often reveals some unintended relationships. The organi­

zational pattern can then be altered until a feasible and desirable pattern is achieved.

Some organization charts (17, p. 62) are known as inverted tree

charts because they have branches at the bottom and a trunk at the top. Boxes stemming from a given horizontal line represent divisions 187 or departments of equal importance. Those of equal importance are on a consultative basis with each other while dependents are charted below them and report directly to them.

The graphic organization chart is based on several rules (17, p. 62) as follows:

There are only two types of lines, vertical and horizontal. Vertical lines connect the boxes to horizontal lines or other boxes, and they stem only from the center of the top or bottom of the boxes. A line from the bottom of the box connects it to governed organizations. A line from the top of the box connects it to the governing organ­ ization. Each box shows information on four lines that is, function, name of the organization, title of the head, name of the present incumbent. Horizontal lines serve to establish points of connection between governing and governed organizations. There can be only one vertical line extending up from the horizontal line to the governing organization, but any quantity of vertical lines extending down to the governed organizations.

Basic organization weaknesses may be discovered in attempting to draw a logical organization chart. Weaknesses such as neglect of certain functions, overlapping of various functions or crossed lines of authority are often discovered in this way. The required analy­ sis of the organization, the impartial study of personnel and actually developing the chart soon point out loose ends and weaknesses in organization structure.

Established lines of authority and responsibility. The organi­ zational chart establishes lines of authority (5, p. 64) in showing 188 employees how their positions fit into the total organization and how a given position relates to another. Persons holding the various positions can sense the limits of their authority, see who their associates are, to whom they report and from whom they receive orders. Davis (20, p. 119) noted that an organization chart is a graphic presentation of certain information including lines of respon­ sibility, authority and accountability in the organization.

The organization chart (17, p. 62) should be clearly under­ stood by all in the organization to facilitate establishing and main­ taining lines of authority and control. When this is the case, coor­ dination is made relatively easy. Tact is necessary in either in­ creasing or decreasing the degree of authority and responsibility vested in a given position. Any changes in personnel also need to be made diplomatically and with tact to preserve a spirit of teamwork needed for lasting success. Organization charts)need to present a contemporary picture of the structure of the organization if they are to serve a useful purpose.

Principles applicable to responsibility should be facilitated through organization charting. These principles (23, p.57) are that responsibilities should not overlap, responsibility limits should be clearly defined, no gaps should exist in responsibility assignments 189 and responsibility should not be assigned for unnecessary work.

Charting may well focus in on shortcomings with regard to the above principles.

The lines of authority are shown by charting, but the degree

of delegation of authority to a given position holder is usually not

indicated. In the case of higher management positions (23, p. 58)

it is sometimes argued that there should not be a rigid specification of limits of authority. It is felt that this might frustrate the individ­

ual and not allow him to grow and assume more responsibility and authority in the process. In lower level jobs, however, the speci­ fications on limits of authority are usually spelled out and controlled.

The organization chart assists in vertically coordinating the

industrial enterprise. It establishes lines of communication and

lines of authority so that top managers do not bypass department

heads by communicating directly with individuals further down in

the organization. The chart also illustrates that junior executives

do not properly bypass their superiors by dealing directly with high-

level executives. Problems are handed down until they reach the

manager assigned such problems who then takes action. Questions

also flow upward through proper lines of authority until reaching the

manager in whose province the decision lies. Some organization charts enlarge certain positions on the chart

(5, p. 65) to include a statement of the fundamental responsibilities.

This is usually most effective for positions in the management range.

Descriptive words of a general nature are used to cut down on the number of details that need to be included. Such a chart is some­ times referred to as a responsibility chart.

An oversimplification of complexity. Organizational charts

(53, p. 73) show vertical relationships of each position but do not indicate all the horizontal relationships. The large number of hori­ zontal relationships make it impractical to represent them on a chart.

Charts also fail to show the authority associated with certain posi­ tions. An aggressive, competent person may exert much more influence than viewing his position on the chart would indicate. In addition, charts do not show the extent to which authority has been delegated or the point where various decisions are actually made.

Uris (61, p. 31) noted that two practical considerations do violence to the neat organizational concepts:

1. Informal groups. Texts on organization note that informal relationships exist among personnel, often at variance with what the chart calls for ...

2. Individual differences. For better or worse, each us is a unique- and complex-entity. Whatever abstract virtue our individuality may have, it poses a tough problem 191 for the organization planner. The neat squares or circles in the organization chart must bulge or sag in a variety of ways to accommodate the man who actually fills the job.

These are two key considerations which indicate that full organiza­ tional relationships cannot be charted.

Niles (51, p. 185) stated that an organization chart is only a convenient device for visualizing the form of the organization.

The chart represents at most a skeleton while the organization itself is the interrelationships of functions, levels, processes and live, interacting people who hold positions schematized in the chart.

Cantor (13, p. 20) stated that the neatly arranged formal chart of the organization is far removed from the realities of the company's practices. Individuals apply rules and administer directives.

Policies are applied according to the intelligence, understanding, sensitivity and skills of the subordinates responsible for administer­ ing them.

Anderson (5, p. 64) stated that organizational charts can only go so far in describing the interplay of functions and relationships.

Regardless of their shortcomings, they do serve to keep the main channels clearly in mind. This simplification of a complex set of relationships is an important tool for unity of effort, however, in both simple and complex organizations. 192

Delegation of Authority and Responsibility

Management delegation (5, p. 49) is concerned with the distri­ bution of authority along the chain of command. An organization where most of the authority resides at the top is referred to as being cen­ tralized. A decentralized organization, on the other hand, distributes authority more evenly through the chain of command. It is largely a matter of degree so that the most one can say is that authority is predominantly centralized or that authority is predominantly decen­ tralized.

A delegate, according to Davis (20, p.77), is an individual designated to represent and act for another. In this sense any sub» ordinate is a delegate of the manager to whom he is responsible.

Delegation is a process of releasing certain executive authorities and assigning them to given subordinate positions. Delegation always takes place in a downward direction. The obligations of a position require the delegation of a corresponding degree of authority.

There are two principles of delegation which are important.

The principle of the fixation of responsibility is that delegation relieves the manager in charge of none of his responsibility, authority or accountability. Delegation is actually an extension of powers rather than giving them away. It provides for an increased volume 193 of work. The second principle is the coincidence of responsibility and authority. It states that delegated responsibility should be accompanied by commensurate delegated authority. Violating the latter principle usually results in ineffective action and a breakdown of morale.

Decentralization through delegation (20, p. 78) has many ad­ vantages. One advantage is the fact that it allows for getting the point of decision and order giving close to the point of action. It also fosters the development of initiative, self-reliance and leader­

ship ability. An individual needs experience in making decisions which guide the actions of others in order to develop into a good manager.

Vertical and horizontal. Perfect lines of vertical delegation would mean that authority and responsibility are clear cut with no duplications or loopholes. In actual practice the lines (63, p.366) are not clear cut which inevitably makes for some duplications and

loopholes. The best that can be done is to assign responsibilities

clearly in writing. Subordinates should be encouraged to report any loopholes or duplications that cause conflicts in their work.

The situation can then be clarified by discussing it in a meeting

or the written assignments may be changed. The superior should 194 feel it his responsibility to watch for such difficulties which may not be discovered by subordinates.

Horizontal lines of responsibility and authority indicate the degree of delegation granted to each subordinate for each of his activities. The levels of delegation will depend upon operating

conditions, company policies and what superiors think of a given

subordinate. For example, a subordinate may not have full discretion

in hiring and firing or in deciding to work overtime. These horizontal

lines of delegation or levels of authority should be in writing. It

is not practical to go into too much detail, however. The subordi­ nate usually acts on his own if he is sure it is within his authority and consistent with company policy.

One important factor in providing for good work is anuander-

standing of the wise limits of discretion. The exception principle

(51, p.56) is responsible for a great improvement in the handling of

work. Cases coming within the existing procedure may be speeded along without reference to others. On the other hand exceptions,

whether defined or not, are referred to the supervisor. When a num­

ber of cases have been decided, the employee knows the answer and

no longer needs to refer instances of that type. Sometimes, however,

it may be more advantageous to provide that all such cases be 195

referred to another person who becomes proficient in this work.

The exception principle refers to the fact that managerial efficiency

is greatly increased by concentrating managerial attention exclusively

upon those executive matters which are variations from routine,

plan or standard.

Flexibility. It is easier to delegate responsibility (38, p. 192)

than to relinquish authority. There may be temporary justification

for assigning greater responsibility than authority. A newly appointed

subordinate may not be ready to assume all of the authority generally associated with a given position. Certain powers may, therefore, be

withheld for a period of time. As the individual gains experience

and grows! In the position, additional powers are released so that

finally authority and responsibility are equated. Such flexibility

is often necessary in breaking in new managers.

Authority and responsibility should be viewed as relatives

rather than absolutes. The orders a subordinate gives are really

those of his superior. Likewise, the responsibilities he carried are

actually those of his superior. Viewed in this manner, it reduces

the danger of developing an egotistic feeling of independence which

is one of the greatest enemies of teamwork. Such flexibility in

thinking promotes the feeling of sharing results through working 196

with and for associates rather than being completely indepen­

dent.

Flexibility is essential in the delegation process since it has

continuity through time. Subordinates (46, p.215) constantly seek

clarification and interpretation of the scope of their authority.

It is impossible for a manager to establish the scope of authority

for a subordinate so that he can act independently from then on.

Delegation creates a new relationship between executive and subor­

dinate which is continuous. This relationship requires flexibility

since it is subject to changes throughout its existence.

Controls on performance. The delegation of authority and hold­

ing others responsible requires both a good manager and a good

subordinate. Many good qualities of a subordinate are dependent

upon and a reflection of good managerial skills in the superior.

Technical and human relations skills are also important, but it is

managerial skills which are most neglected. Others are held respon­

sible through delegation (46, p. 218) by creating an obligation on the

part of subordinates for effectively performing their tasks. An aware­

ness of this obligation by subordinates is referred to as responsibility.

A manager who delegates authority to others (38, p. 186) must

hold subordinates responsible for these delgations. In addition. 197 subordinates must not avoid responsibilities for which authority has been assigned. Holding subordinates responsible is based on the manager's right to exercise authority. This right is derived first of all by delegation from above. Authority should also be earned from below. This means receiving a vote of confidence from followers with the result that they willingly follow orders.

Three means by which a manager may achieve authority from below (38, p. 187) are displaying technical competence in the field supervised, exhibiting managerial skills and dealing fairly with the problems and needs of subordinates. Technical competence has value because there is a degree of hero worship in almost everyone.

It is also something that subordinates can readily interpret for them­ selves. Utilizing good managerial skills makes for efficient pro­ cedures, a reduced number of emergencies and few controversies which also tends to develop authority from below. The problems and needs of subordinates need to be dealt with voluntarily, by both word and deed and by revealing a sincere desire to be helpful.

Loyalty stems from managers sincerely trying to do right without hav­ ing to be coerced into doing so.

Communication. Communication (46, p. 211) is the means through which the process of delegation is accomplished. The broad outlines 198 of authority for subordinates should be in writing. Without such specifications, subordinates tend to define their own jobs, resulting in authority patterns having little relation to the coordinated needs of the company. Written forms of delegation of authority reveal a willingness on the part of a superior to commit himself to delegation.

Placing it in writing also reduces ambiguity and leaves fewer possi­ bilities for distortion or abuse by subordinates.

Authority limits are sometimes maintained and communicated through oral communication. Living and learning together is also sometimes used, but both methods have obvious shortcomings. A better means of communicating authority limits (38, p. 196) is through organization manuals, procedure manuals and standard practice in­ structions. These written materials have no value unless they are coordinated with one another and kept up-to-date.

Responsibilities also need to be specified in writing. This provides an effective means of communication aimed at minimizing misconceptions. The terminology used should be defined so that meanings are equally clear to all concerned. The specifications of responsibility need to be elaborated upon to an extent that they have meaning for those who will use them. 199

Decision making. One fundamental and pervasive influence in the environment of decision-making (46, p. 144) is the amount of authority present and the way it is used. The decision-making activi­ ties of an executive are limited by the scope of his authority limits.

A decision is usually questioned bn the basis of whether the manager had the authority to make the decision.

An executive's decision-making authority should be made clear.

If such limits of authority are unclear, the decision-making process becomes unduly inhibited. The fear of criticism or challenge tend to make the manager overly cuatious and reluctant to make decisions.

This may cause costly delays as time is utilized in checking many decisions with those above. Clearly assigned authority can eliminate

such delays and facilitate prompt decisions.

The need for effective decision-making near the problem at hand,

(46, p. 229), is a basic reason for the decentralization of authority.

This is especially true in large organizations where there are a number of products manufactured, services sold or markets served. In such organizations, decisions need to be made promptly without undue delay which centralization of authority would entail. It is necessary, therefore, to clearly delegate authority and responsibility to various

levels in the organization to facilitate effective decision-making. 200

Impact of Automation and/or Cybernetics

Automation refers to a production system employing a minimum of human labor and a maximum of continuous self-regulating machinery.

Keith and Gubellini (40, p.50) stated that automation usually in­ volves (1) automatic machinery, (2) integrated material handling and processing equipment, (3) automatic control systems, and

(4) electronic data processing equipment. A tremendous production output is now possible with only a handful of skilled workers to maintain and control the automatic equipment. Punch-card or elec­ tronic systems can control the machine.

It is possible to generalize as to some of the long term bene­ fits to employees from automation. Calhoon (12, p. 386) stated that wages have generally increased through re-evaluation of jobs,

management's decision to share productivity gains and by necessity to meet market rates where increased skill levels were required.

Other advantages include less manual effort, more pleasant working conditions, cleaner work places and less hazardous work. Increased

job s&tisfaction has often resulted with greater pride in the task and more variety in jobs. It has also benefited consumers (45, p.215) by making long runs and rush orders more possible, improving quality 201 and providing greater dividends for stockholders through improved productivity and increased competitive advantage.

Cybernetics (37, p. 637) is the utilization of complicated elec­ tronic equipment to permit automatic and continuous computing, checking and correcting of mechanical processes. It has commonly been referred to as the "brain" of the automatic factory. Many routine mental tasks can be performed in this way, thus releasing people for more creative tasks. In addition, it can do these tasks faster, more accurately and cheaper than the human worker. Lower skills will tend to be eliminated and drudgery reduced which should improve the interest and morale of employees.

Cybernetics may raise several problems in personnel management.

One would hope that unemployment would be temporary, as in the past, with the long-run effect being an increased number of total jobs.

Another problem will be increasing demands for a shorter work week as productivity improves. Such problems will become increasingly complex and will require more high-level administrative thinking for their effective resolution. Cybernetics will also require more spec­ ialized training on the part of industrial personnel. Ironically it can aid this by helping to expedite communications and supplementing. 202 but not supplanting, the need for personal contact with employees on an individual basis.

A new concept of skill. Automation (51, p. 310) has and is caus­ ing many unskilled and semiskilled jobs in industry to be sharply curtailed. It has abolished many direct production jobs while a smaller number of new jobs are created requiring different and mostly higher skills in equipment design and maintenance, systems analysis, pro­ graming and engineering of all kinds. Most firms have transferred employees and made adjustments in recruiting to adjust to changing labor requirements.

Automation causes much upgrading of jobs and combining of jobs. It tends to require skills of a broader as well as a higher nature in both managers and workers. Greater responsibility for employees is fostered in the integrated process where a delay or breakdown or a wrong decision may have far-reaching effects. Preventive planning and maintenance are necessary to safeguard the high capital invest­ ments involved. There will be an increasing demand for skilled and highly trained supervisory personnel and technicians as supervisory tasks and production become more complex.

Increased automation will continue to accelerate change and re­ quire new skills or combinations of skills. It will impinge on habits 203 of thought fostered by discontinuous and specialized methods. Job evaluation systems and shop rules and practices may well need to be overhauled. The great fluidity in the skills picture may cause the ability to learn to be regarded as more important than the ability to do.

A production line operator (11, p.225) becomes more of a monitor or overseer as a result of automation. Mental strain is greater in some cases because of greater responsibility and attention require­ ments. An alertness becomes important in tending expensive machinery.

Automation will likely save to increase the importance of personnel management, according to Jucius„ (37, p.636). Personnel will be required that are of a higher caliber, more alert, better trained and more highly educated. Human relations and the problem of tech­ nological unemployment will require increased attention. Management would be derelict in its consideration of the human aspects of the problem if it failed to weigh them as carefully as it considers the mechanical innovations.

The coming of automation (51, p. 311) is gradual and requires intensive planning on the part of management. This planning should mitigate the personnel dislocations through anticipation of the types of skills required, counseling with regard to alternative jobs and providing needed training in advance of the changes. Allaying employee 204 fear of technological change and reducing or preventing resistance to change are tasks which management should take seriously. It also requires planning (11, p. 12) with regard to product development, production equipment, market development and procurement of materials.

Mills, Assistant to the President, Ebasco Services (18, p.22) presented a paper at the 13th International Management Congress dealing with general management. It was noted that there is a steady increase in creative work requiring a decrease in work involving phy­ sical or merely repetitive mental tasks. This provides a challenge of eliminating such work in an orderly manner. Advances need to be in­ troduced to correspond with increased educational levels of the work force, customer needs for services as well as products and the diverse ways in which people choose to use their time and money.

The great potential of technology is not about to replace man, according to Stratton, President, Massachusetts Institute of Tech­ nology (18, p. 49). This is the case because a machine can teach no ethical principles, has no set of social values and can contribute nothing to the spirit and to direction according to rightful purposes.

Only man has such unique qualities who, through leadership, can ex­ press judgments, beliefs and ideas. 205

Inevitability of change. The inevitability of change is partly revealed by the fact that management has a new role of machine de­ signer. Automation (11, p. 12) is making the factory into a large machine entity. The proper economic performance of such a machine is hard to envision. How many products should be made and how fast?

What quality standards should be maintained? What allowances should be made for design changes and technological innovations ?

Change is not only certain as a result of automation, but is also greatly accelerated.

Voris (64, p. 289) stated that extensive automation will no doubt cause a serious upheaval in the status quo of individual employees.

Sometime in the future the work of unskilled, semiskilled and skilled employees may no longer be needed except for maintenance and repair work. In this case machine operators, assemblers and skilled crafts­ men would be working at something else. Automation is usually applied a step at a time so that it will be a gradual transition although it seems to be inevitable.

The automated plant (J>1, p.225) requires foremen, especially, who will accept and adapt themselves to change. It often becomes the supervisor's responsibility to make major adjustments. The fore­ man also needs the ability to anticipate and deal quickly with 206 emergencies. Such alertness is essential in dealing with complex equipment where down time is costly.

Seven types of managerial changes resulting from automation were noted by McFarland (46, p.509). These seven changes were

(1) improved working conditions, (2) revision or discarding of incen­ tive wage systems, (3) sharpening the responsibility of managers,

(4) more emphasis on training technical, maintenance and engineering employees, (5) changing job content and wage structures, (6) chang­ ing job classifications and seniority units, and (7) heightened fear of unemployment. This list indicates automation's broad scope of influence and the inevitability of change as production becomes in­ creasingly automated. George (25, p.4) noted that the dominant theme of our time and of industrial enterprise is the theme of change.

Primary Functions of Management

Some writers and managers take a limited view of the basic function of management. It is sometimes stated that the basic objec­ tive of the industrial organization is the achievement of maximum long-term profits. Morris (2, p.48) referred to the statement of the 207

Controller of Bethlehem Steel Corporation who stated the same ob­ jective as follows:

We are not in business to make steel. We are not in business to build ships. We are not in business to erect buildings. We are in business to make money.

It is the task of management (40, p. 6) to operate the enter­ prise at a profit. This involves providing each of the three major interest groups — consumer, worker, owner — with a fair return.

The consumer must be given a good product for his money; the worker must have a fair wage for his labor and skills; the owner must receive a fair return on his investment. It is management's task to reconcile these divergent interests as successfully as possible. Corporations cannot be operated for the sole purpose of maximizing profits since such a concept is shortsighted and has a harmful effect on public relations.

Cherry (4, p. 65) related that at the risk of oversimplification, the single, basic, unalterable objective of every company should be to maximize its service and its profits both short- and long-range.

The results of management's efforts to reach the firm's objectives can be measured and expressed in terms of profits, industrial leadership, service and confidence realized by the business and all groups and individuals served by it. 208

Management began as a representative of the owners but with the passage of time the responsibilities have broadened. According to Niles (51, p. 105) management is now the directive factor which integrates and balances the interests of the public, the consumer, the stockholders, the bondholders, the workers and the official, supervisory, technical and sales staff. It is responsible for the efficient production and distribution of goods and services with sound policies for all concerned. A major part of modern management's task (40, p.35) is to reconcile the goals of the enterprise with the needs and desires of society.

Niles (51, p.27) stated that the primary purpose of business or other economic organizations is to furnish needed goods and services. The wish to make money may set one's wits to work, but the idea of the needed service or product is the heart of the matter.

It is necessary to produce what the market needs and through inno­ vation to provide better and more economic goods and services.

Objectives in addition to profit include providing goods or services to the customer, furnishing employment and financial return to the participants and to the community, seeking a means of expressing the talents and skills of those with the company and building an organization that gives satisfaction and pride to those involved. 209

A still broader objective is the deep desire to build the community

by adding to its enrichment and prestige and to make contributions to the nation and the world.

The basic flow of management work begins with leadership which may be developing, inspiring, representing and supporting men.

Management work then proceeds through the processes of planning, organizing, coordinating and controlling the resources of men,

money and time to the achievement of results satisfactory to customers,

investors, employees, suppliers and the whole public. Another flow

line represents feedback, so that information obtained from each

successive step in the management process is received back, as

necessary, into earlier phases of the management cycle to initiate

indicated improvements or corrective action. Other processes are

building and maintaining an organization and staffing. Such processes

(40, p. 78) constitute the universality of management functions because

managers at all levels do some of the same tasks.

Planning, in its broader aspects, is the essence of management

according to Bellows, Gilson and Odiorne (6, p.273). This necessi­

tates the establishment of a hierarchy of objectives or over-all goals,

policies and procedures. Forecasting must be used to evaluate and 210 decide among alternative means to reach both short- and long-range objectives.

Four major functions of management in present-day industrial enterprise (29, p.8) are (1) undertaking risk and handling uncer­ tainty, (2) planning and innovation, (3) coordination, administration and control, and (4) routine supervision. The primary function of management (40, p.351) is sometimes thought to be decision-making.

Risk taking and dealing in uncertainties is an integral part of much decision-making.

Haimann (28, p. 22) defined the five basic functions of manage­ ment as planning, organizing, staffing, directing and controlling.

These functions are similar to those defined by Henri Fayol except for substituting some new terms with less autocratic overtones.

Commanding, for example, was replaced by the term directing.

Voris quoted a survey conducted by Stryker listing the ten most frequently mentioned functions of executives (64, p. 6) as follows:

1. Achieving the company's over-all objective. 2. Planning, and setting policies and objectives. 3. Making decisions, thinking, and analyzing. 4. Co-ordinating functions and people. 5. Organizing and developing subordinates, advising other executives and managers. 6. Handling subordinates, controlling operations. 7. Improving own capacities, leading, setting an example. 211

8. Delegating, giving orders, working through others. 9. Exercising business judgment, performing a specialty. 10. Dealing with the public.

The above functions are actually performed, to some degree, by

every manager in the organization. The first-line supervisor or foreman makes some policy, develops his subordinates and deals

somewhat with the public.

Urwick quoted Drucker (21, p.91) to the effect that the purpose

of enterprise must lie outside the business itself. It must lie in

society because business enterprise is an organ of society. One

definition of business purpose is to create a customer. Management

has a function as a trustee of men's interests as both producers and

consumers. A business should state its basic purpose so as to em­

phasize the fundamental principle of social service. It was also

thought necessary that those in leadership positions should exemplify

this basic principle by both word and deed.

Bellows, Gilson and Odiorne (6, p.273) stated that the first

responsibility of the manager was to hold the organization together

and make it perform. The tasks of producing and selling things of

high quality at a profit, paying decent wages and being a good citizen

are vital. It is also essential that the company be safeguarded

through financial and human responsibility for maintaining stability 212 and succession of management. Management is also concerned with promoting the maximum development of each worker, the maximum utilization of available human resources and fostering harmonious working relations throughout the firm. Calhoon (12, p.47) noted that one of management's basic purposes was promoting teamwork by recognizing, minimizing and offsetting frictions among personnel.

Management (41, p. 69) is responsible for organizing the elements of productive enterprise in the interest of economic ends.

These elements are mainly money, materials, equipment and people.

It was also stated that the essential task of management is to arrange organizational conditions and methods of operation so that personnel

can achieve their goals best by directing their efforts toward organi­

zational objectives. This involves creating opportunities, releasing

potential, removing obstacles, encouraging growth and providing

guidance.

Zermansky (3, p. Ill) related that beyond the broad social obli­

gations which an industrial enterprise may wish to fulfill and the

community and employee relationships which it may desire to promote,

the primary motive underlying its activities is the pursuit of profit for

the ultimate satisfaction of its shareholders. An executive of North

American Aviation stated that the central goal of the company was to 213 design and manufacture a good product at a competitive price and to deliver it on time. This was presented as the heart of all company policy and the background of all corip any procedure.

Management's role in the conduct of enterprise is that of leadership, trusteeship and guardianship. According to Glover (27, p.7), to accomplish this it relies on management's philosophy with its guiding principles, the fundamentals of scientific research and

American know-why and know-how. It requires penetrative thinking, wise decision, specialized knowledge, definite skill and continuous effort to achieve the objectives of the business enterprise.

Pilkington, speaking at the 13th International Management

Congress (18, p.27) stated that efficiency should be management's first consideration. This was based on the fact that pioneering, risk-taking and progress are easiest in an efficient and profitable business since competition is the supreme driving force. Diversionary objectives should not blind management to the necessity of placing the effective use of resources in the foreground of policies and activ­ ities. Efficiency is the basis upon which business can be a public servant, serving customers, employees and the public well.

Technology shows what can be done and provides the means according to Stratton, President of the Massachusetts Institute of 214

Technology (18, p.49). It remains, however, for management in the highest sense of leadership to tell what needs to be done. It must see the larger goals and set the short and long term objectives.

Some research conducted by O'Donnel (18, p. 78) has shown that policy decisions of high level corporate executives are shaped and motivated by a value system including human, institutional and social values as well as economic ones. These values were grouped under such headings as profitability, productivity, competitive advan­ tage, human and social values, organizational survival and vitality, morale, social responsibilities, work satisfactions, release of crea­ tive energies, business ethics, professional standards and public goodwill.

Public relations is generally felt to be a function of management and must, therefore, be integrated into the decision-making process.

Stevenson, President of the Public Relations Society of America (18, p. 128) noted that it will contribute importantly to profits. This is true because no business lives in a vacuum; our society is inter­ dependent. Other factors include the realization that public opinion is strong enough to thwart any management action and that persuasive communication is a competitive weapon. Especially in the inter­ national arena, public relations is too important a factor to be left to chance. 215

Figure 3ron the following page is a simplified version of the primary functions of management. It is simplified in that many manage­ ment considerations such as legal problems, external relations, internal corporate affairs and setting policies and objectives are not presented. It is also true that management employs several intangi­ ble elements in the successful operation of a firm. These elements include the good name of the firm, public goodwill, patent rights and copywrited logotypes. The figure generally presents line functions while many staff functions are not shown. The figure graphically shows, however, that management employs money and organization to mobilize machinery, material, men and methods to produce products or services which are converted through sales back, to dollars. Man­ agement then funnels these dollars back into research and development,

into the hands of stockholders in the form of dividends and is again employed by management thus completing the cycle.

The importance of effective organization will become increas­

ingly apparent as industrial enterprises continue to become larger.

Problems related to coordinating and integrating the many functions

involved will grow in complexity. Organization charts can be an effective aid in establishing and maintaining desirable organizational 216

Figure 3

INDUSTRIAL MANAGEMENT CHART*

STOCKHOLDERS

BOARD OF DIRECTORS

MANAGEMENT

RESEARCH AND DEVELOPMENT

EMPLOYS MONEY

TO MOBILIZE

1 1 1 1 MACHINERY + MATERIAL + MEN + METHODS

TO PRODUCE TURN­ OVER PRODUCTS OR SERVICES CYCLtf

CONVERTED THROUGH

SALES

BACK TO

DOLLARS

•Adapted from Gardner, Fred V. Profit Management and Control, p. 6. 217 relationships. The need for effective delegation of authority and responsibility in maintaining a viable organization was noted. The increasing application of automation and cybernetics places a pre­ mium on management planning because of accelerated change.

Management's primary functions were noted as providing a needed service and satisfying the various vested interests in the enterprise.

The next chapter is a presentation of selected production variables. f

CHAPTER VI

SELECTED PRODUCTION VARIABLES

The concepts to be presented are a series of specifics which must be properly managed in the industrial enterprise. The variables included are only a beginning in that no attempt has been made to make the inclusions exhaustive. It is felt, however, that they are representative of the types of production considerations with which management must be vitally concerned.

Machinery and Equipment

Four classes of manufacturing eqiipment, each having its own applications, were identified by Keith and Gubellini (40, p. 152).

These were general-purpose equipment, special-purpose equipment, building-block machine tools and computer-controlled machine tools.

Standard equipment such as the lathe, milling machines, grinder, planer, shaper, drill press and borer, shearing and pressing machines were identified as general-purpose equipment. These machines are operation centered, rather than product-centered and are designed to perform functions that have wide applicability in manufacturing.

Special-purpose machinery can perform only a limited number of operations on only one or a few materials for the purpose of producing

218 219 many pieces of identical size and shape. An example of a special- purpose machine would be a welding machine that performs one assembly operation in a manufacturing firm. Such machinery has the advantage of immensely speeding production and usually because of the ease of operation it requires only a semiskilled operator.

The building-block machine tool has interchangeable parts and can accomplish a variety of jobs in one continuous operation once it is set properly. Machine tools are able to do such operations as turning, drilling, milling, planing, shaping, cutting, shearing and pressing metal. The six major sections of machine tools (40, p. 153) were listed as (1) a tool that forms the metal, (2) a tool holder, (3) a motorized assembly which powers and controls the tool, (4) a carnage, (5) a base, and (6) a bench which holds the metal as it is being formed.

Electronically controlled machine tools use magnetic tape or punched-paper tape instructions that are read and translated by a computer. The greatest advantages are speeding up production and eliminating human errors due to fatigue or carelessness. 220

Raw Materials

The availability of raw materials and provision for their trans­ portation is often a basic management consideration. The costs in­ volved may be a considerable portion of the cost of manufacturing a product. Industry has been traditionally located where there were suitable raw materials for the processes to be employed. Cornell and Madeheim (17, p.46) noted, however, that industries have been gradually emancipated from these geographic restrictions by the development of new processes and new sources of materials. The open-hearth process of making steel, largely using scrap metal in oil-fired furnaces, has allowed steel production to be initiated in

California. The rapidly expanding western market and the availabil­

ity of scrap and oil were largely responsible.

The availability of an economical and plentiful supply of fresh water is a vital raw material to many industries. Large quantities of water are needed for public utilities in the steam generation of

power. Many industrial processes require water for cooling, clean­

ing or the operation of large equipment. The lack of this raw material

in some locations has led to the purification and reuse of available

water. 221

The raw materials to be used will affect the steps in the manu­ facture of a product. In the case of a metal product (17, p. 76) it is sometimes possible to choose from solid bar stock, powdered metal particles or casting ingots for the basic raw material. The selection is usually made on the basis of needs for the most economical and satisfactory industrial process available. The increasing use of plastics in many industrial products is altering many of the indus­ trial processes being employed.

The selection of raw materials is based on several considera­ tions. Some of these criteria are the feasibility of manufacture, cost of materials as well as processing, appropriateness, the func­ tion of the product and style considerations. Insect screening, for example, is made from galvanized iron, copper, aluminum or plastic.

Each of these products has particular advantages while unique pro­ duction problems are encountered in the use of each material.

The inspection of raw materials (8, p.272) serves two objec­ tives: first, materials that do not meet quality specifications can be eliminated from the plant and second, it is a valid measure of the vendor's ability to supply acceptable materials. Materials may be checked before shipment by the vendor or after they are received by the purchaser depending upon the costs involved. Large shipments 222

involving high transportation costs may be most economically checked

by the purchaser's resident or itinerant inspector at the vendor's warehouse. Delays caused by materials that fail to meet specification

may be very costly, thus necessitating some type of effective controls.

Product Design

The basic purpose of product design (64, p. 104) is to produce drawings and specifications of the product which are practical to manufacturers and yet have the latest technological advances. This ordinarily involves experimentation, preparing specifications, pre­

paring sketches, building models or prototypes, testing models in

use, analyzing the performance of models and preparing final drawings.

Throughout these steps, consumer desires and the available materials

and production methods must be kept in mind. The character of a

company tomorrow is determined by the product it is presently devel­

oping.

Consumer acceptance is a major consideration in the development

of a product. Some design factors (8, p.76) which must be considered

in meeting customer needs and desires include these:

1. Appearance — is the product pleasing and attractive to the eye? 2. Convenience — can it be used readily ? 223

3. Usefulness — does it meet a need or desire? 4. Durability — will it stand up under use? 5. Cost of operation — is it inexpensive to use and keep in good order? 6. Purchase price — how does it compare competitively and in terms of needs met? 7. Diversity of types and sizes from which to choose — does the available variety meet different preferences?

Management must weigh the relative importance of these various design factors and seek a balance which will be most effective in the market place.

Bethel and others (8, p. 76) noted that industrial design in­ volves the problem of form vs.function. This persistent problem of appearance vs. utility is well illustrated by the yearly model changes of the modern automobile. Good design is sometimes expressed in the concept that form should follow function. A great deal of modern designed furniture bears this out with straight and flowing lines with a relative lack of superfluous ornamentation.

Richard S. Latham, Fellow of American Society of Industrial

Designers (18, p. 387) noted that industrial designers need to pay more attention to the ultimate owner's needs. It was proposed that manage­ ment is essentially a quantitative process while the customer judges products qualitatively. This makes it difficult for industry to under­ stand that customer decisions to buy are made in the context of human 224 personal, family and community problems. Thus, human needs and tastes must be considered as well as technical factors in designing products that will sell.

Other factors (17, p. 107) which enter into the designing of a product include the desire for standardization and simplification, the possibility of producting related products and patent protection.

Standardization, for example, provides for the economy of inter- changeability. Any one of a group of parts which have been produced can be used and serve the function equally well. It is often desirable to get patent protection which will cover both the product itself and the processes and equipment used in its manufacture. Industrial designers are seeking the maximum utilization of facilities in devel­ oping related products which can be produced with the same plant and equipment.

Quality Control

Quality control (40, p. 276) may be employed during the production cycle to determine if quality is slipping so that corrective action can be taken. The inspection involved in this case is to play watchdog over the production process to provide the control necessary to keep performance within acceptable limits. Statistical quality control 225 involves selection of a few items of production by sampling techniques that are to be inspected in a given time period. Tolerance limits are established, samples of the product are tested periodically, results of sample inspection are recorded on a quality control chart and the chart is analyzed to see if correction of machinery is needed. The laws of probability are used to predict how many out of the batch of items will be within tolerances or defective. Voris (64, p. 365) re­ lated that one of the basic tools is frequency distribution using the bell-shaped curve to represent normal distribution which is influenced only by chance.

Cornell and Madeheim (17, p. 163) presented the following reasons for quality control:

1. Consumer satisfaction 2. Prevention of further work on spoiled material 3. Correction of machine adjustment or defects 4. Correction of improper practices 5. Computation of wages on an incentive basis to insure payment only for work that .is up to standard 6. Salvage control

The above indicate that quality control is an investment which is nec­ essary and should at least partially pay its way with beneficial results.

Management must strike a balance between quality and cost.

The closer the tolerances and the more frequent the inspections the higher the cost of quality control will become. The tolerances need 226 to be practical in that normal wear of a new machine will produce small variations in quality of output in a relatively short time. Keith and Gubellini (40, p. 277) stated that in the case of most mass pro­ duced goods tolerance limits are quite broad; otherwise it would hardly be possible to maintain high-speed production for long periods of time.

Quality control may be a sizable cost of production, but the cost is usually justified on a long-term basis. Inadequate quality control allows below-standard products to be sold which results in high costs for replacement, shipping both ways and most costly of all the loss of the customer's faith in the company aid its products.

Plant Location and Layout

Some factors commonly considered in locating a plant site were presented by Voris (64, p. 255) in the following:

1. Presence of an adequate labor supply 2. Availability of raw materials 3. Availability of a market for the product 4. Favorable inducements from geographical locales 5. Temper of local laws 6. Personal preferences of executives making the decision 7. CJiim&e and living conditions 8. Availability of water, power, and services

Other factors (40, p. 150)_include transportation and communication facilities and the political climate. The trend for alert companies is in to decentralize their operations into geographical areas where the optimum advantage can be gained from the low costs of production and distribution. The final selection is usually a compromise reached after weighing the advantages of alternate sites.

The basic purpose of effective plant layout is an economical placement of equipment and personnel for an efficient flow of work from receipt of raw materials to finished product. Voris (64, p. 268) quoted Newton as follows regarding the basic principle behind good plant layout which is

.. .to so integrate men, material, and equipment as to move material as easily as possible over the shortest dis­ tance, at the same time providing a natural sequence of operations, in a safe manner and under ideal working conditions.

Other objectives of optimum plant layout (64, p. 269) are reduc­ ing operating costs, providing for efficient materials-handling equip— ment, safety, optimum utilization of space, providing for optimum inventory levels and improved working conditions for employees.

Every square foot of space is costing the owners money every day so it behooves plant layout men to utilize all space fully and efficiently.

One type of layout is by process in which equipment, men and operations are grouped together according to the function performed.

For example, all the drilling would be grouped in one location while 228 all the heat treating operations would be grouped in another location.

This type of layout is generally used where the manufacturer is en­ gaged in intermittent production and where special-purpose machine tools and materials-handling equipment is economically out of the question.

Another type of layout is by product in which equipment, men and functions are arranged in a chronological sequence of steps followed in manufacturing a particular product. This type of layout

is successful only where standard products are manufactured over and over again in continuous operation. If a company is not engaged

in continuous manufacturing, it would not be economically feasible to permanently set up a product layout because the line would be in operation only a brief portion of the time.

A typical layout procedure (64, p. 274) includes gathering infor­

mation about the product, determining the possible lines of work

flow, testing the possible lines of flow using checklists and templates

or scale models, selecting the most efficient possible layout and

finally implementing the layout. Such a layout procedure, to be

effective, requires eliciting information and cooperation from many

departments within the organization. This affords many more new 229 ideas and makes it more possible that the final layout will be accepted as optimum by all concerned.

Single story buildings which are rectangular in shape have many advantages. A single story provides for efficient materials handling, economy of construction, easy expansion, flexibility of layout, maximum floor load capacity, better natural lighting and ventilation plus ease of beautification. The rectangular shape also makes for flexibility in layout. Overhead steel girders have elimi­ nated the need for pillars which used to restrict the flexibility of space utilization. Thus, walls or partitions can be moved or elim­ inated without damaging the structural stability of the building.

Maintenance

The main purpose of maintenance is to keep the plant and its equipment operating at top efficiency. This should be conceived of as both prevention and cure. Expensive equipment and machines and increasing automation place more of a premium on time so that much more maintenance will need to be preventive in the future than in the past. Preventive maintenance is the care and upkeep of the plant and its .equipment in order to forestall unnecessary breakdowns and repairs. Breakdowns will still occur, but their number will be 230 much fewer, thus effecting savings. This often means spending money now to avoid a much larger expenditure later.

Bethel and others (8, p. 118) noted that "Effective maintenance of a plant and its equipment is prerequisite to efficient plant opera­ tion as well as uninterrupted production." Preventive maintenance is an economic necessity for enterprises which must operate con­ tinuous processes because of high start-up costs. Many intermittent- process plants also have a planned maintenance schedule which has avoided many costly breakdowns and delays. This involves in­ specting, overhauling and repairing before any breakdown occurs.

The incapacity of a single key machine in a large plant can disrupt the flow of work to an extent which adversely affects a large portion of the plant.

Maintenance work should be planned (17# p.209) with a realization that emergency jobs come first, machines should be overhauled when needed least, time may be needed to order parts and flexible time allowances are needed because of the likelihood of unexpected difficulties.

The increased use of automation will make maintenance a func­ tion requiring greater authority and responsibility. Some factors con­ tributing to this (64, p. 336) are the increasing costs of down time 231 because of the expensive equipment employed, scheduling main­ tenance is more difficult with continuous operation machines and utilizing electronics and pneumatics require specially trained per­ sonnel for maintenance. Increasingly, equipment will be designed which will provide itself with ordinary maintenance such as oiling and cleaning.

Producing at the Right Time

Ralph J. Cordiner, Chairman of the Board of the General Elec­ tric Company (18, p. 16) discussed the importance of producing the right product at the proper time. Time was noted as an asset that all competitors share in common, but its management may be a decisive factor in success or failure. Timing involves sensing when the market is ready, when the technology is well enough advanced and when the organization is in a position to push into a new field of business.

Producing at the right time (63, p. 257) is a matter of reconciling the satisfaction of customer's demands with manufacturing activities.

The required planning is complicated by such factors as the difficulty of forecasting customer demands, the need for freedom from excessive paper work, and unexpected difficulties which delay production. 232

The sales of some goods are subject to seasonal fluctuation.

This presents a manufacturing problem in that it is usually advan­

tageous to produce goods at a rate proportional to sales demand.

It is generally necessary for production to proceed at a constant

rate so that products accumulate during slow periods and are avail­

able during high sales periods. This requires careful consideration

of such factors (17, p.82) as storage costs, product deterioration

and style obsolescence. Business cycles provide similar problems

with regard to producing at the right time except that they are more

complex.

Timing production to take best advantage of the market is often

based on sales forecasts. Consumer research is providing more and

more reliable data upon which to base these forecasts. Inherent

difficulties involved in such forecasting include, changes in the

intentions of customers, losses to manufacturers of competing prod­

ucts and changes in the general market picture.

Scheduling

Production scheduling (8, p. 231) is the process of rating work

in order of its priority and timing its movement through the plant in 233 the desired sequence. It is primarily concerned with determining when various parts or products should be processed. Thus, production

scheduling ordinarily establishes target dates for starting and finish­

ing all work to be undertaken. Scheduling often works backward

from the specified delivery date to determine when production must

begin. It must be accomplished with a knowledge of the limitations

of the physical plant, the skills of personnel and the availability

of materials and purchased parts.

DeFerranti (3, p.33), writing in the AMA publication dealing

with managing materials, stated that determining the level of factory

operations through master scheduling is one of the key responsibili­

ties of the scheduling function. Master scheduling decisions are

very complex resulting in the commitment of large sums of working

capital. The comparative costs of changing or maintaining produc­

tion levels are the parameters within which it must be decided which

of two basic approaches to follow in formulating the master scheduling

program. According to DeFerranti these two approaches consist of the

following:

1. Maintaining a constant level of production, which results in fluctuating finished-stock inventories carried at a higher average level, or 234

2. Manufacturing at rates synchronized with the current rate of customer orders, which results in fluctuating production levels but relatively lower, more stable average level of finished-stock inventories.

The two methods may be alternated as the needs of the plant vary from time to time.

A useful way of maintaining schedules (51, p. 182) is by the use of the Gantt chart. The horizontal spaces of the chart indicate the steps to be taken, the vertical columns represent dates. Light horizontal lines are drawn between columns to represent the allowed time for the performance of each step. The progress of work is indi­ cated by drawing solid lines under the light ones to show progress to date.

Time study (40, p. 279) ordinarily provides information on the production rate of each department, machine and individual worker in the plant. Such information is necessary in scheduling because it shows what can be accomplished in a given time by revealing the rate at which work flows through various parts of the plant. Schedules, however, must have a degree of flexibility to allow for the emergencies which may occur and for possible interruptions caused by priority orders. 235

Promotion and Sales

Some companies think of sales as a group of salesmen going to wholesalers, retailers or even door to door to distribute consumer

items. Other companies distribute their products through a network

of dealers throughout the country who are franchised or contracted

by the manufacturer to be exclusive distributors. Whatever method

is used, it is still a process of promoting, selling and distributing

the product.

Cager (4, p. 13) , writing in a textbook published by the AMA,

stated that marketing depends on having a sound working combination

of many business elements which include such factors as these:

The aims of the company The principles and policies of the company The organization of talents and responsibilities within the company The selection of people and the division of work The identification of problems and opportunities The targeting of major objectives The formulation of detailed plans to carry out the objectives The adjustment of plans to financial capacity and degree of hazard The examination, follow-up, and control of plans The measurement of results.

It was noted that each of these elements has an influence on how the

marketing management in a company may achieve its results. 236

Sales personnel (64, p. 49) actually establish the production figures for the company engaged in continuous manufacturing. This is the case with a company that produces a standard product con­ tinuously based on a sales forecase rather than customer orders.

Estimates of future sales, after careful analysis by other top offic­

ials, becomes the production goal of the enterprise. The sales division must sell the product before it is produced in the small inter­

mittent manufacturing enterprise. Sales has a tremendous burden to keep the factory working in such a job-order company. Whatever the type of industrial enterprise, sales also has a prime function in advis­

ing research and development as to customer needs and desires.

Harrison F. Denning, President, Scott Paper Company (18, p. 401) related that advertising and promotion plays a vital role in the development of human progress and in advancing standards of living.

Advertising is a major force in making mass marketing possible.

Mass production, in turn, is practical because of the resulting broad

markets. Such efficient, low cost production makes a wide range

of products available at prices that can be afforded by a large portion

of the people. The capacity to provide good quality, high value,

reasonably priced products to a predominant section of the public is

truly a means of raising the standards of living in every country. 237

The promotion of products should be based on the fundamentals of quality and value. Selling on this basis is the most beneficial for customers, individual countries and the manufacturers themselves.

The manufacturer who sticks to these basic ideas is able to provide customers with better values at lower prices. The effective sales approach should be based on valid reasons as to why a given product is better, more useful or to be preferred. Only on this sound basis can old markets be consistently broadened and new ones developed.

Sales promotion (40, p. 189) may involve such things as creating special displays, offering premiums, running contests, providing free samples and demonstrating the use of products.

Dispatching

Controlling the flow of work orders to and from the various divisions of the plant (40, p.280) is referred to as dispatching.

Such orders are authorizations to the divisions or departments to proceed with specific tasks. Orders from the dispatcher do such things as move materials, load trucks, start machines spinning and set men to work. The dispatcher usually informs the central control office as each task is handed out or completed. Progress is then recorded steadily on a master ^control system. 238

The dispatcher typically carries out such activities (8, p.246) as assigning work, issuing to the point of use all needed tools and materials, controlling the progress of work and routing work accord­ ing to schedule. A basic responsibility is to see that there is a reasonable amount of work ahead of each machine or operator. The task is more complicated with job-orders which require their own particular materials, tools, fixtures and gages than production line manufacturing which largely requires the dispatching of repetitive orders.

Quality control should check on whether the specifications are met as to the three dimensions of length, width, and thickness.

Dispatching (63, p.282) is related to time as a fourth dimension.

The product or part must not only meet the size requirements, but it must be produced on time within a given time limit. The dispatcher hdpsthe foreman and the operator by supplying what they need and helping overcome delays if they should occur. The responsibility for dispatching should be well defined, thereby, indicating clearly where it begins and where it ends.

Control of Production

Production control is a coordinating and planning function. Its purposes include aligning, integrating, equating and lubricating the 239 various production phases and processes. This function then can consider each detail in connection with all the others and serve as a clearing house for all information in any way affecting manufac­ turing. It may take the form of a material control system, an inte­ grated material and manpower utilization approach or one of the financial management aspects of the business. Consideration must be given to such factors as products, the plant, sales requirements, materials, labor and machines for the system to be effective.

Production control (64, p.52) is a staff activity to coordinate manufacturing phases according to manufacturing plans so that the scheduled delivery dates can be met. This usually involves such tasks as developing schedules, checking that all line-and-staff functions are performed at the proper time and place, dispatching tools and materials, instruction, progress surveillance and correc­ tion if work falls behind schedule. Production control is a vital function because it coordinates almost all the other activities in a manufacturing concern allowing them to operate as an integrated unit. It integrates the utilization of labor, machinery and materials to achieve maximum economy in production. 240

Production control is basically of two kinds according to

Hastings (30, p. 175). One procedure is order control, while the other is flow control. Order control is based on the control of a job lot of work through the various processes required in transforming raw materials into a finished product. Each job lot or order is con­ trolled by routing it so that sufficient machine capacity, tools, materials and men would be available at the right times. Order control is usually employed in intermittent production. On the other hand, flow control is used in continuous production by regulating the rate of flow of materials to each work area or shop and to each machine in the shop. A uniform rate of flow is achieved by having enough machine capacity available at each station to permit a steady rate of progress.

The flow of work is usually based on (45, p. 187) a long-term plan of production.

Goodtcommunication (40, p. 280) is the key to successful con­ trol of production. This control nearly always includes verbal con­ tacts, paperwork, graphs and charts, lights, sirens, mechanical and electrical indicators and many other means of communication. Such items as authorizations for work, material movement, material use and equipment use must all be reduced to writing for clarity and con­ trol. The movement of materials requires such communiques as 241 purchase requisitions, reservation orders and movement orders.

Paper work as a part of production control is used, among other things, to authorize, to instruct, to obtain information, to order, and to clarify.

Factory Overhead Control

Overhead expenses are those applicable to the business in general and cannot be easily attributed to a specific product. These costs include such factors as supervisory and administrative salaries, repairs, maintenance, insurance and depreciation. Overhead costs must be distributed equitably over all products when calculating the total cost of manufacturing a given product unit.

Other expenses (17, p.466) which are usually thought of as factory overhead include interest on debt, rent, utilities and office expenses. If overhead expenses are known to be approximately ten percent or less, it may not be worthwhile to give it special attention.

If these expenses are much greater than this, it may be advantageous to itemize them and explore what can be done to reduce the component costs.

Davis (20, 1.855) referred to factory overhead as indirect ex­ penses which need to be controlled through adequate accounting 242 methods. Executives should receive periodic reports on controllable overhead expenses by classifications and departments. The foremen of individual departments should receive a copy of the report covering their department. The issuing of vouchers authorizing the writing of checks to cover certain indirect expenses provides a basis for the proper accounting of such items. Some indirect ex­ penses are controllable to the extent that they are a matter of deciding on the relative worth of alternatives.

Inventory Control

Inventory control is a function of establishing the inventory practices and policies to be followed throughout the enterprise.

According to DeFerranti (3, p. 34) this task normally involves such activities as; figuring the cost of carrying inventory, establishing stocking policies, setting lead-time requirements, formulating econo­ mic order quantity principles and solving other basic problems con­ cerning inventory investment. Inventory control is also responsible for providing for the long-term materials requirements of the industry.

The central objective of inventory control is to provide for off-the-shelf shipments to customers while at the same time minimizing total inventory. An adequate quantity of materials and supplies are 243 required in the correct location, at the right time and (3, p. 50) at the least possible cost. Economic order quantity principles are

determined by weighing the advantages of quantity discounts against the carrying cost of storing such quantities in inventory. Setting lead-time requirements refers to determining the time to be allowed for normal deliveries of materials and supplies.

Inventory control is facilitated by classifying it into manage­ able parts that are then treated separately. A common classification

in industry would include raw materials, finished parts, supplies, work in process and finished goods. According to Keith and Gubellini

(40, p. 260) management needs to know the following about inventory;

size, classification breakdown, value, age and its relation to inven­

tory needs. Such knowledge is needed to insure against delays in

production due to lack of materials, undue storage costs, or failure

to deliver because of inventory shortages. The age of goods is

particularly important where spoilage or obsolescence must be con­

sidered. This information is frequently needed on a day-to-day basis

thus justifying expensive computing equipment in large companies to

produce a continuous supply of information about inventories. 244

The concept of a perpetual inventory is first determining the amount of stock on hand and then keeping an accurate record of any additions to or deletions from this stock. The unit and total cost is usually part of the record system so that the net value of the inventory is always available. This system has the advantages of providing information on ordering needs, company investment in materials and goods, company expenditures and insurance needs.

It involves the systematic location, storage and control of inventory.

Profit Control

The accounting procedures employed are in essence a means of evaluating and controlling the profitability of the industrial enter­ prise. Theseiprocedures are used to accumulate and evaluate cost information pertinent to price setting which is related directly to profitability.

Profit control (8, p. 430) is basically a matter of planning on the basis of the expected volume of sales at certain price levels compared to the cost of production per unit at each level. Profit control can be affected by such variables as the extent of the demand, competitive products, inflation, distribution costs and changes in the general business picture. 245

It must be remembered that the employee not only provides his

labor which is a vital factor of production but that he is also a

consumer. Henry Ford popularized this concept by paying above

average wages based on the realization that the employees were also

consumers of Ford automobiles. Profit control is thus concerned with

providing high quality goods at the lowest possible prices in an attempt to broaden the market.

Controlling the relationship (63, p.428) between profits and

the conditions of operation is the purpose of profit control. Needed

corrective action may be indicated by an insufficient rate of return

on investment or if there is reason to believe that profits can be im­

proved by eliminating the inefficiency of some operations. The con­

trol of profits may be related to long-range plans or in some cases to

short-range plans which may require changes in operations within a

few months, weeks or days.

Dr. Erich Mittelsten Scheid (18, p. 141), a German industrial

manager, noted that long-range profitability should be achieved through

the application of scientific management philosophy, principles and

methods. The company should consider the interests of employees,

the public and shareholders simultaneously with the company's best

interest. This would promote an understanding that profits and 246 profitability are not only a concern of management and the stock­ holders but are a vital interest of the employees and the public as well.

The production variables discussed in this chapter give some indication of the multiple considerations which confront management in efficiently operating a modern industrial enterprise. The effec­ tive coordination and balancing of such factors, among many others, is a necessity in maintaining a viable industrial organization. Each consideration may be likened to the individual parts of a fine pre­ cision watch. If one part in the watch is malfunctioning it affects the operation of the watch as a whole. Likewise, when vital pro­ duction variables are neglected and not operating efficiently it affects the entire industrial organization. The next step is to pre­ sent some management concepts with industrial arts curriculum implications. CHAPTER VII

A LIST OF MANAGEMENT CONCEPTS WITH CURRICULUM IMPLICATIONS

It seemed necessary to develop some criteria for screening

management concepts for industrial arts education. Some of the criteria are based on whether the idea is fundamental in industrial manage­

ment. Other criteria are designed to guide as a screen through which

ideas are filtered in applying them to industrial arts. The criteria

developed are as follows:

1. Does the concept reflect the basic underlying thinking of

modern scientific management?

2. Is the concept fundamentally related to the organization

and practices of industry ?

3. Is the curricular experience continually related to the

values and general objectives of industrial arts education?

4. Does the curricular experience make use of available re­

sources in promoting pupil growth?

5. Is there a practical possibility for the student experience

to be conducted experimentally?

6. Does the laboratory personnel organizational plan tend to

give stature to each student participating ?

247 248

7. Would the student experience develop broad understandings of scientific management and its problems ?

8. Is the experience related to the needs of individuals, as students, as citizens and as members of a technological complex?

9. Is the economic concept general in nature with broad appli­ cability to management thinking in the production of goods and services ?

10. Is the activity practical within the limitations of time, facilities, materials, finances and student background.

Criteria numbers 1,2, and 9 served as guides in making a list of management concepts with curriculum implications.

Personnel Management

1. Successful personnel management is the ability to work with people of varying aptitudes and to bring forth the best they have to offer.

2. Job specifications are necessary prerequisites to effective recruitment and selection. They should include such specifications as the needed skills, education, experience, age limits and person­ ality characteristics desired. 249

3. Interviewing is used to check the applicant's appearance, bearing and interaction with others. It is also employed to judge motivation, initiative, stability, perseverance, work habits and judgments.

4. References based on work experience are usually felt to be most valuable. They tend to be more accurate than character or school references since work references are based on actual job per­ formance.

5. Intelligence, achievement and aptitude tests are the three most common types used for screening employees. The first attempts to measure inherent capacity to learn; the second measures current achievement or ability to perform; and the third measures ability to learn in various fields of activity.

6. The more factual information needed in the recruitment and selection of personnel is obtained from an application blank.

7. Management personnel development is an on-going process to provide managers with the skills essential for their task. All such development is self-development on a long-range basis which may involve a variety of methods.

8. Some means of management personnel development include: higher education, case studies, apprenticeships, on-the-job training. 250 job rotation, problem-solving conferences, performance appraisal, profit-sharing, provision for advancement, cultural upgrading, devel­ oping leadership, employee mobility, plant sponsored education, and public vocational education leadership development.

9. Industrial psychology is based on a recognition that money is only one motivator in work. Many psychological satisfactions and dissatisfactions are also involved.

10. The nature and quality of many factors have a significant bearing on work satisfaction in industry. These notable variables include: physical working conditions, personal relationships, incen­ tives, morale and attitudes, task interest, ethics, discipline and loyalty.

11. Management is concerned with the safety and health of industrial personnel for both humanitarian and economic reasons.

There is a moral obligation to protect the well-being of employees as well as a need to control unnecessary costs.

12. Effective communication in industry must be a two-way process resulting in understanding. Both management and employees must actively participate in maintaining clear channels of communica­ tion downward and upward in the organization. 251

13. Written communiques have advantages of presenting infor­ mation uniformly to all, fixing responsibility, providing a record or reference and serving as motivators because they are appre­ ciated for the extra effort put into them.

14. Oral communications allow the speaker to note the reac­ tions of listeners. On the other hand, listeners can question the speaker and express their opinions. The supervisor has a key role in promoting oral communications between management and employees.

15. Informal communications or the "grapevine" should be provided with accurate information to promote harmony within the or­ ganization.

16. Most vertical communications should flow through formal channels to strengthen the status of supervisors and the formal organizational structure. This also tends to promote feed-back or upward flow of information.

17. A firm moral conviction concerning the dignity and worth of the individual is essential to sound personnel management.

18. The supervisor plays a pivital role in personnel management through motivating employees by displaying a warm interest in individ­ uals. Such interest enhances the self-concept of an employee and makes him feel more a part of the organization. 252

The Functional Organization

1. Organizational structure defines relationships of authority and responsibility between functions. Its purpose is to maintain a basic relationship among factors of production, functions and personnel in the company.

2. The line-and-staff organization provides for authority to flow, largely along fixed channels, while advice from specialists is provided by creating staff positions.

3. Committees provide for a good means of communication, im­ proved coordination, eliciting ideas and developing members. It should only investigate and make recommendations while decisions should be made by the executive in charge.

4. Multiple management refers to a plan of creating junior boards of directors, composed of middle management and workers.

The plan promotes participation and elicits ideas through studying problems and making recommendations.

5. Industries may be divisionalized on such bases as function, product, geographic or a combination of the above. It is ordinarily associated with decentralization in effecting a more efficient or­ ganizational pattern. 253

6. Decentralized industries often involve centralized planning and control along with decentralized authority and responsibility.

7. Coordinating the efforts of various departments calls for

cooperation, good human relations, understanding and communica­ tions.

8. The number of subordinates reporting to a manager con­

stitutes his span of control. A flat organization is usually deemed desirable and is associated with a broad span of control. It must,

however, be equated with the human limitations of supervisory burden.

9. Flexibility is essential in providing for the efficient inte­

gration of the many specialized functions in modern industry. It is

also necessary in order to adapt to changes in people, technology,

resources and environment.

10. The organization chart shows the most important aspects

of the organizational pattern. It is useful in establishing relation­

ships, noting neglected or overlapping functions and showing em­

ployees how their position fits into the total organization.

11. The organization chart is an oversimplification of com­

plexity in that it doesn't indicate informal relationships, individual

differences or the authority associated with given positions. 254

12. Delegating authority does not relieve a manager of any responsibility or accountability. Delegated responsibility usually

requires a comensurate delegation of authority.

13. Delegation requires flexibility because subordinates are

constantly seeking clarification of their scope of responsibility and authority.

14. Managerial authority may be derived from below by dis­

playing technical competence in the field supervised, exhibiting

managerial skills and dealing fairly with the needs and problems of

subordinates.

15. The broad outlines of subordinates' responsibilities and

authority should be in writing. This reveals a willingness on the

part of the superior to commit himself to delegation and reduces

ambiguities.

16. The primary functions of management include (1) promoting

efficiency, (2) making a profit in order to provide a fair return for

consumer, worker and owner, (3) providing leadership, trusteeship

and guardianship, (4) planning, organizing, staffing, directing and

controlling, (5) undertaking risk and decision-making, (6) public

relations, and (7) developing policies. 255

Selected Production Variables

1. Manufacturing equipment can be classified as general- purpose, special-purpose, building-block machine tools, computer- controlled machine tools and combinations of the above.

2. Raw materials for manufacturing are selected on such con­ siderations as cost, feasibility and cost of processing plus appro­ priateness to the product and style considerations.

3. Design considerations include appearance, convenience in use, usefulness, durability, cost of operation, purchase price and diversity of models from which to choose.

4. Quality control involves setting tolerance limits and checking a given number of products to see if they are within these limitations. A reasonable balance must be struck between quality and cost.

5. Effective plant layout involves integrating men, material and equipment to move materials easily over the shortest distance while providing a natural sequence of operations, in a safe manner and under ideal working conditions.

6. A layout procedure involves gathering information about the product (s), determining the possible lines of work flow, 256 testing with templates or scale models, determining an effective lay­ out and implementing it.

7. Maintenance should encompass both a planned program of prevention and provisions for repairing breakdowns.

8. Producing at the right time require forecasting customer demands and consideration of such factors as storage costs, product deterioration fend style obsolescence.

9. Advertising and promotion play a key role in creating mass markets which makes mass production possible. Such promotion of products should be based on the fundamentals of quality and value.

10. Dispatching is issuing orders or authorizations to control the flow of work to and from various divisions of the plant.

11. Production scheduling is the process of establishing a timetable for the desired movement of work through the plant.

12. Production control involves coordinating and planning pro­ duction phases so that scheduled delivery dates can be met. This

includes scheduling, dispatching, instruction, progress surveillance and correction if work falls behind schedule.

13. Factory overhead expenses include maintenance, insurance,

depreciation, interest on debt, rent, utilities and office expenses. 257

14. Inventory control involves such activities as figuring the cost of carrying inventory, establishing stocking policies, setting lead-times for ordering and formulating economic order quantity principles.

15. Profit control is the process of planning on the basis of an expected volume of sales at certain price levels compared to the cost of production per unit at each level. Corrective action may be indicated by changes in such factors as demand, competitive products, inflation, distribution costs and the general business picture.

Research and Development

1. The purpose of basic or pure research is to search syste­ matically for additional knowledge, information, facts and laws with no immediate or practical application in view.

2. Most research conducted by industry is applied. Applied research is conducted in order to solve problems with immediate commercial value such as developing new products, processes,

materials, equipment or new markets.

3. Product development follows research and development and

involves such activities as preparing models, establishing pilot plant

operations and testing the product with selected customer groups. 258

4. Scheduling research must, of necessity, be quite flexible until the development stage is reached, at which point a more rigid timetable can be realistically followed.

5. Research as an industry produces such outcomes as the following: (1) facilitating production, (2) cutting costs, (3) remain­ ing competitive, (4) developing new and improved processes and products, (5) improving health and safety, (6) innovating in design,

(7) assisting in long-range planning, and (8) providing rate of inven­ tion as index to technological growth.

Automation knd Cybernetics

1. Automation usually involves machinery which is automatically controlled, integrated material handling and processing equipment and electronic data processing equipment. A key element is feedback which makes the machine or process self-correcting or self-adjusting. It utilizes a minimum of human labor and a maximum of continaous self- regulating machinery.

2. Cybernetics is the utilization of electronic equipment to permit automatic and continuous computing, checking and correcting of mechanical processes. It refers to a similarity between automatic

industrial processing and the intricate human nervous system. 259

3. Automation is tending to create a new concept of skill based on advanced training, ability to learn, alertness and creativity.

4. One outcome of the increasing application of automation and cybernetics is the inevitability of change at an accelerating pace.

Management Trends

1. The need for effective managerial planning is heightened by such factors as changing technology, mounting world competition, expanding influence of labor and government and the need to make a profit consistent with the interests of society.

2. There is a trend toward better two-way communications in industry as exemplified by increasing emphasis on such factors as the role of the supervisor in this regard, house organs, oral com­ munication and eliciting ideas from subordinates.

3. A trend toward constitutional management is indicated by employers sharing their rule-making power in a "constitutional"

manner with such institutions as labor uniohs and government.

4. Decentralization is a trend resulting from larger industrial organizations and the inherent inefficiencies in any highly centralized

system of management. It is often accomplished through decentralized administration accompanied by centralized policy making and control. 260

5. Democratic and participative management is a trend resulting in such practices as committee management, participative decision making, multiple management and showing more concern for the human element. Participation and involvement has been found to be a good way of eliciting ideas, promoting a healthy organization and enhancing the well-being of the individual.

6. There is a trend toward more stable production and employment resulting from greater risks and investments requiring better long- range planning, the need for a broad market perspective and the cost of labor turnover and unemployment compensation.

7. A trend toward greater accuracy in job evaluation is result­ ing from the systematic evaluation of the skill, responsibility, effort and working conditions involved in given positions.

8. There is a trend toward favorable working conditions in industry exemplified by improved and safer physical facilities, better supervision and attempts to reduce monotony and make the task mean­ ingful to the employee.

9. Long-term advancement programs in industry are a trend resulting from the need to fully utilize and develop available talent, provide incentives for employees and increase the organization's stability and effectiveness. 261

10. A mutual confidence trend based on mutual trust and confi­ dence in industry is resulting from a realization that the total group interest is the best criterion with which to measure the interests of the various parts. Confidence may be risky but it is not nearly as risky as mistrust.

International Management Development

1. Developing nations require concentrated efforts to develop the managerial talent needed in industrialization. Common methods of development include using foreign talent, training managers abroad, management development in the home country and management corps.

2. Assistance in management development is often sought from overseas by associations, companies, universities and governments.

The proceedings of the 13th CIOS Congress noted the growing leader­ ship, in this regard, provided by universities in varioxE parts of the world.

3. The American affiliate of CIOS is the International Committee of Scientific Management. Its basic purpose is to assist in all countries with management problems in such enterprises as businesses, educational institutions, labor unions, governments and non-profit associations. 262

4. The International Committee of Scientific Management's cen­ tral objective is to further the application of scientific management on an international scale. It holds triennial conferences in some one of its forty-one affiliated national organization countries to provide an international interchange of management ideas.

Selected Principles of Industrial Management

1. Industrial efficiency has been promoted by mass production which should involve mechanization, specialization, grouping workers

under a definite organizational pattern and advertising resulting in mass marketing.

2. Management's role should be viewed as a combination of an economic resource, a systemcdf authority, an elite, a provider of leadership and a force for community improvement.

3. Industrial efficiency should be fostered by utilizing sci­

entific procedures in standardizing equipment and methods instead of rule of thumb techniques.

4. Both the individual and the industrial enterprise should bene­

fit as a result of scientific selectiondnd development of each man to

maximum efficiency and prosperity. 263

5. Providing meaningful and reasonable work incentives should be a basic prerequisite in promoting maximum productivity.

6. Industrial harmony should be based on cooperation in achieving mutual organizational objectives.

7. Efficient industrial production should be fostered by separ­ ating the functions of planning and performance.

8. Man is a complex being who should be motivated by psycho­ logical, social and physical factors, making money only one incentive among many.

9. Time and motion study should foster efficiency by develop­ ing standard times for various operations, providing for more realis­ tic planning and scheduling and establishing justification for work rules and standards of performance.

10. Communications within industry should be improved by fitting the organization and procedures to human behavior.

11. The structure of modern industry should be adjusted to improve physical, psychological and social working conditions.

12. One of management's primary responsibilities should be setting goals for the enterprise which are compatible with the economic technological, social and political environment. 264

13. Managerial planning should be a prerequisite to efficiently and effectively achieving the firm's objectives.

14. Effective managerial organizing should be accomplished to achieve the most advantageous relationship of work, people and work environment.

15. The performance of personnel in industry should be con­ trolled to achieve the firm's objectives according to plans.

16. Alert personnel management should include a cognizance of new developments in such fields as psychology, sociology and anthropology.

17. Research and development expenditures should be con­ sidered investments which are becoming increasingly important as the rate of technological advance becomes more rapid.

18. Industrial management should become more of a science as a result of increased integration with underlying concepts from social and physical science.

19. The well-being of the individual and the organization should be promoted through such positive motivational techniques as providing for personal recognition, participation, fair compensation, understanding, confidence and opportunity. 265

20. The staff function should provide advice and assistance in relevant matters of planning, organizing, policy/ performance standards, coordination, personnel selection and control.

21. There should be an organizational balance between cen­ tralization and decentralization which will best facilitate the line functions concerned.

22. An industrial organization should be flexible enough to change its plans, structure or operations as altered circumstances dictate.

23. The optimum assignment of work should be through dele­ gation of authority and responsibility as long as organizational ob­ jectives are achieved.

24. The formal lines of the organization should be clear so that each manager knows to whom he may or must report and who reports to him.

25. The duties, responsibilities and limits of discretion should be made known to the occupant of a given position in writing, especially where the duties are supervisory.

26. Similar activities should be grouped in a single organiza­ tional unit with the direction of these activities emanating from the same unit. 266

27. The exception principle should promote managerial effic­ iency by concentrating managerial attention exclusively upon those executive matters which are variations from routine, plan or standard.

28. Superior/subordinate relations should be based on the realities of the situation rather than persuasion or hard approach in discipline.

The preceding list of management concepts with industrial arts curriculum implications present some key ideas drawn from the major topics of the study. The following chapter will elaborate on some implications for industrial arts education. CHAPTER VIII

IMPLICATIONS FOR INDUSTRIAL ARTS EDUCATION

The implications for industrial arts are derived by evaluating selected industrial management concepts and practices. The criteria used in this evaluation were listed in the beginning of the preceding chapter on management concepts with industrial arts curriculum im­ plications.

One of these criteria dealt with whether the curricular experience was continually related to the value and general objectives of industrial arts education. It may be appropriate to review some commonly accepted objectives of industrial arts. Wilber (67, p.42) listed nine important objectives of industrial arts in Industrial Arts in General

Education. These objectives are presented as follows:

1. To explore industry and American industrial civilization in terms of its organization, raw materials, processes and operations, products, and occupations.

2. To develop recreational and avocational activities in the area of constructive work.

3. To increase an appreciation for good craftsmanship and design, both in products of modern industry and in artifacts from the material cultures of the past.

267 268

4. To increase consumer knowledge to a point where students can select, buy, use and maintain the products of industry intelligently.

5. To provide information about, and — insofar as possible — experiences in, the basic processes of many industries, in order that students may be more competent to choose a future vocation.

6. To encourage creative expression in terms of industrial materials.

7. To develop desirable social relationships, such as cooperation, tolerance, leadership and followers hip, and tact.

8. To develop safe working practices.

9. To develop a certain amount of skill in a number of basic industrial processes.

G utricular experiences and content derived from industrial manage­ ment should assist in achieving objectives number one, seven and eight. These were exploring industry and American industrial civili­

zation in terms of its organization, developing desirable social relationships and developing safe working practices.

Ivan Hostetler (57, p. 11) reviewed the development of industrial arts objectives from 1928 to 1960 and concluded that the following four should be emphasized:

1. To develop in each student an insight and under­ standing of industry and its place in our culture. 269

2. To discover and develop talents of students in the technical fields and applied sciences.

3. To develop technical problem-solving skills re­ lated to materials and processes.

4. To develop Ln each student a measure of skill in the use of the common tools and machines.

It seems that the implications to industrial arts education drawn from industrial management concepts and practices fall largely within the first objective above. Many of the possible curricular applica­ tions of management concepts and practices are an attempt to enrich industrial arts through developing insight and understanding of in­ dustry and its role in our culture.

Selected Laboratory Organization Charts and Job Specifications

Charting industrial organizational relationships was found to be a common practice in industry. A personnel organization plan may also be used to advantage in the industrial arts laboratory. One of its basic purposes is to give stature to each student participating.

The criteria presented on page 247 were used in making this applica­ tion to industrial arts as well as those which are to follow.

The personnel organization plan should be student developed with the assistance of the instructor. If the students develop the plan, they will be much more apt to feel it is theirs and participate 270 wholeheartedly. The plan should be designed to provide experience

in leadership and followership. It should also reflect organizational

patterns employed by industry. Care needs to be taken to indicate

ways in which the classroom personnel organization system is simi­

lar and/or dissimilar to those used in industry.

There is a tendency to over-organize in setting up the student

personnel organizational plan. A more limited plan which is student

developed and has enthusiastic student participation may well be of

greater value. A route of promotion could be employed so that stu­

dents would get an opportunity to gain experience in the various

positions established. This would logically take the form of moving

from positions lower in the organization to those requiring greater

responsibility and authority. A student in a top position would like­

wise assume responsibility of a position lower in the organization plan.

Selected laboratory organization charts. The four charts pre­

sented in this section are suggestive of the types of positions which

may be established and the kinds of responsibilities they could entail.

The first chart, Figure 4, is one developed at The Ohio State Univer­

sity for the wood technology laboratory. It employs three superinten­

dents which are in charge of the activities or responsibilities of

administration, curriculum content and operations. The staff side was 271 Figure 4 The Ohio State University WOOD TECHNOLOGY LABORATORY MANAGEMENT ORGANIZATION The Instructor ADMINISTRATION CURRICULUM CONTEXT OPERATIONS Supt. — Supt. — Supt. — PERSONNEL 1. LUMBERING HAND OPERATIONS Manager — Director — Foreman — Selection — Forestry, Saw Mills Sawing — Attendance — Tree and Wood Identification Planing — Progress — 2. HAND TOOLS Drilling — Director — Carving — PLANNING Use and Maintenance Manager — 3. WOOD PRODUCTS JOINERY Trips — Director — Foreman — Demonstrations Furnishings Joints — Visual Aids — Antiques, Carvings Glueing — 4. CONSTRUCTION PROCUREMENT Director — FINISHING Manager — Carpentry Foreman — Inventory — 5. HARDWARE Preparation — Equipment — Director — Finish — Supplies — Specification of Tools, Supplies MILL OPERATIONS ENGINEERING 6. PERIOD STYLES Foreman — Manager — Director — Lathes — Maintenance • Display 30 Periods Safety — 7. BY-PRODUCTS MAINTENANCE First Aid — Director — Foreman — Paper, Plywood Tool Room — PROMOTION Alcohol, Turpentine Lumber Rack — Manager — 8. PATTERN MAKING Benches — Displays — Director — Mill — Publicity — Types and Uses Finishing Room- Glue Table — 9. RECREATION Director — Sports, Toys By Dr. William E. Warner 10. FINISHING Director — 272 given the heading of "administration" while the line side was labeled

"operations." Curriculum content committees are presented in the center grouping. These committees may serve as resource groups to help the class with particular problems as they arise.

The second chart, Figure 5, was developed by Dr. Warner for use in classes in practical arts for the preparation of elementary school teachers. It differentiates between line and staff activities, but does not list the kinds of responsibilities inherent in each position.

The students assuming various positions under "programs" can be thought to be serving in a staff or advisory capacity. Their responsi­ bilities would be to serve as resource specialists who could provide assistance with class activities related to various programs. As is suggested, a variety of programs might be selected depending upon the wishes of the class and instructor.

The third chart, Figure 6, developed by Delmar Olson (52, p. 320) presents a possible organizational pattern for a mass production project.

It shows the line and staff relationships of personnel involved in this class activity. Such a mass production project has value in providing a better understanding of the way this type of production takes place

in industry. It also fosters the active participation of an entire class

in making the necessary preparations for such an activity. The class Figure 5 The Ohio State University PRACTICAL ARTS FOR ELEMENTARY TEACHERS Columbus 10, Ohio

THE MANAGEMENT ORGANIZATION With Dr. William E. Warner

SUPERINTENDENTS Green, Nitschke STAFF PROGRAMS LINE

PROCUREMENT ATYPICAL MILL ROOM Harper Scott Klein Tenney Chester Raab

FINANCE WEATHER HAND TOOLS Brown Gregory Hayes Rhodes Techman Vance MUSIC PERSONNEL Gilmore BENCHES Kenny Wiatt Aaronson Soul TIME SAFETY Lytle, Jones FINISHING Cecalek Miller, Winter Gregory Merchant Masters GAMES Borglund FIRST AID Forest STOCK Davis Riley Florea Rosenquist Ringol GRAPHICS Baum Suter

TEACHING AIDS Davis, Strayer Brown, Chester and MANY OTHERS 274 Figure 6 CHART FOR A MASS PRODUCTION PROJECT*

DIRECTORS Entire Class

GENERAL MANAGER Elected

TREASURER PERSONNEL SALES PRODUCTION DIRECTOR DIRECTOR PLANNER

Stock sales Qualifications Market Research Estimating Accounting Selection of Advertising Scheduling Personnel Distribution Material Control

©ESIGN CHIEF FACTORY TOOL CHIEF DIRECTOR ENGINEER SUPERINTENDENT ENGINEER INSPECTOR

Research Research Special Standards Design Materials tools Controls Drawings Structures Production Models Fasteners jig& Evaluation Finish Assembly Selection fixtures

SUPERINTENDENT PLANT MANAGER OF MANUFACTURING

Parts manufacture Facilities Subassembly Tool Maintenance Re-work Safety Sanitation

*As presented/ page 320 in Delmar Olson's Industrial Arts and Technology. 275

should form a company, develop an organizational pattern find elicit

ideas from the group as to a suitable product. The chart indicates that the class would be involved in financing the operation, designing the product, selecting personnel, planning production, making the necessary jigs and fixtures, quality control and marketing the product.

Careful class planning with the advice and assistance of the instructor

is a basic prerequisite to the successful execution of a mass production

project. The activity should not be over-organized by creating a host

of non-essential personnel positions which would merely complicate the activity.

The fourth chart, Figure 7 (65, p.9), is one develpped at The

Ohio State University for the Vestibule Laboratory of Technology. The

line activities were labeled "operations" while the staff responsibili­

ties were given a heading of "administration." Five curriculum content

committees were also included. The curriculum content committees

serve in an advisory capacity to the class on particular problems

within their individual province. The normal line and staff charting

procedure is not used, but the chart is still useful if it is understood

that the staff positions and the curriculum content committees serve in

the capacity of providing assistance and advice. 276 Figure 7 The Ohio State University VESTIBULE LABORATORY OF TECHNOLOGY MANAGEMENT ORGANIZATION* The Instructor ADMINISTRATION CURRICULUM CONTEXT OPERATIONS Supt. — Supt. — Supt. — PERSONNEL POWER & TRANSPORTATION HANDICRAFTS Manager — Director — Suprv. — Locator — Energy Types Ceramics — Training — Land, Sea, Air Plastics — Trips — Roads, Ports, Terminals Leather — Progress — Toy Project — PLANNING CONSTRUCTION METALS Manager — Director — Suprv. — Research — Housing Machine — Planning — Public Works Foundry j— Engineering — Industrial Sheet — Demonstra. — Welding — PROCUREMENT MANUFACTURING WOODS Manager — Director — Suprv. — Supplies — Materials Hand — Equipment — Processes Mill ~ Inventory — Products Finishing — Handling — Carpentry — ENGINEERING ELECTRICAL ELECTRICITY Manager — Director — Suprv. — Maintenance — GENERATION Wiring — Safety — Transmission Lighting — Utilities — Communication Testing — Inspection — Controls Industry — PROMOTION CONSUMPTION GRAPHIC ARTS Manager — Director — Suprv. — Displays — Distribution Presses — Publicity — Cultural Progress Photog. — Visitors — Maintenance Silk Screen — Social — Services Block Print —

*As presented, Warner, William E. et al. A Curriculum to Reflect Technology, p. 9. 277

Selected job specifications. Industry finds it advantageous to develop job specifications to serve as a guide in selecting personnel for given positions. The industrial arts laboratory personnel organi­ zation can more realistically reflect practices in industry and be more effective by following a similar procedure. The following are some selected job specifications which may be of assistance in selecting students for v&rious positions.

Position: General Manager

Responsibilities: A line relationship exists between the general manager and the foremen of the various line operations. Supervises overall operation of the laboratory, reports directly to the instructor, acts as class representative and promotes efficiency.

Requisite qualities: Respected by peers, a leader, an organizer, diplomatic in relationships, and a good student.

Position: Design Director

Responsibilities: Research, selection of project, making drawings and models, evaluation and improving design.

Requisite qualities: Thoroughness, ability to draw and construct models, effectiveness in conveying ideas to others and flexibility in willingness to alter designs. 278

Position: Finishing Foreman

Responsibilities: Supervises finishing room activities, promotes proper condition and storage of projects and supplies and promotes cleanliness and safety.

Requisite qualities: Knowledge of finishes, safety considera­ tions, need for cleanliness and storage techniques. Ability to elicit cooperation and respect for the property of others.

Position: Foreman of Mill Operations

Responsibilities: Supervise all machine operations, promote safe and efficient procedures, check on safe working condition of equipment, and see that machines are cleaned after use.

Requisite qualities: Be knowledgable in every process, ability to operate all power machinery, safety consciousness, know when equipment is safe, and ability to elicit cooperation.

Personnel Application Blank

A personnel application blank is commonly used by industry to gain information needed in the hiring procedure. The one presented on pages 103-105 can be used as a guide in developing a personnel data

sheet for industrial arts students. The comprehensive application 279 blank used by industry could be duplicated and handed out to the class as a basis for discussing such topics as:

1. What significance does the number of years of education com­ pleted have in gaining industrial employment?

2. What is the purpose for requiring the applicant to list his most recent employers ?

3. Why is it necessary for an applicant to record his social security number in applying for a job?

4. What function do references serve in gaining employment in industry ?

5. Why are some references sought from persons other than relatives or former employers ?

6. Why does industry attempt to identify the applicants par­ ticular skills or set of competencies?

7. What affect might a person's military status have on the appropriateness of his gaining employment?

8. Why is one's military occupation of interest if he has already completed a tour of duty in the armed forces?

9. What value is a knowledge of the applicant's professional or community group memberships? 280

10. What are some of the most important things employers expect from employees ?

A central purpose for including the study of an application form would be to indicate what is involved when one seeks industrial employment.

Personnel data sheet. The purpose of the personnel data sheet is to provide a concisd record of the student's characteristics, interests and accomplishments. The form, Figure 8, on the following page was developed for students at the high school level. Such a form should be of assistance in selecting students for individual positions in the laboratory personnel organization.

Field Excursions

The field trip is commonly used in industrial arts education in order to obtain a first hand view of an industry in operation. Much of the value of a field trip is dependent upon advanced preparations.

Part of these preparations involve giving students an idea of what to look for while visiting the industry. Some of the management consider­ ations which may be advantageous to study aro as follows:

1. What type of management personnel organization is employed?

2. Assuming there are stockholders, what relationship do they have to the firm? 281 Figure 8 PERSONNEL DATA SHEET

Name - Last First Middle Date of Birth

Address - Street and No. Curriculum

Father's Occupation Telephone Number

List any physical handicaps

List previous industrial arts experience

What hobbies do you engage in regularly?

What industrial experience have you gained after school and during summers ?

In what machine operations and industrial arts techniques are you particularly skilled?

In what organizations in the school or community do you hold member­ ship ?

What positions, if any, have you previously held in ki industrial arts laboratory personnel organization?

Would you prefer a line, staff or committee assignment in the manage­ ment personnel organization?

Position - Dates -

Position - Dates - 282

3. What role does the board of directors play in the overall organization of the firm?

4. What positions in the firm are part of the management team?

5. How do the roles of top, middle and first-line management differ?

6. What are the different departments within the firm and what are their basic duties?

7. Wh§t types of communication media are employed by manage­ ment ?

8. How does management seek to promote the well being of the firm through research and development efforts ?

9. What is the purpose of quality control and what procedures are employed?

10. How is safety promoted within the industry?

The central point is that a field trip provides an ideal situation in which to explore the role of management in modern industrial enterprises.

It is hoped that one basic value of studying management as part of a field trip would be a realization that management desires employees who are willing to go beyond that which is required. Other qualities desired in employees are an ability to communicate orally and in 283 writing, an ability to get along with fellow-employees, and thorough­ ness and stick-to-itiveness. Management also seeks employees who have creative ideas. The people fairly able to do are plentiful, but those with an abundance of novel and unique ideas are scarce.

Classroom Reports and Discussions

Industrial arts laboratory time is generally considered to con­ sist of approximately 80 percent manipulative activity and 20 percent related study. This varies a great deal, however, depending on the nature of a given course of study. The purpose here is to list some topics which might well be considered in assigning class reports or planning class discussions as part of related study. Such topics as the following may provide worthwhile related information:

1. Factors which should be kept in mind in making the best impression in an industrial employment interview.

2. The types of tests most likely to be employed by management in screening employees.

3. The role of the supervisor in promoting efficiency and good human relations.

4. The primary functions of management in industry.

5. The divisionalization of industry and the lines along which it is accomplished. 284

6. The design considerations involved in the research and development of a product.

7. The role of quality control in providing for the interchange- ability of parts needed in mass production.

8. Advertising and promotion as essential to mass production and mass marketing.

9. The trend toward automation and cybernetics and the resulting long-term effects.

10. The exception principle as an important means of promoting industrial efficiency.

The above list is merely suggestive while additional topics could be drawn from the list of management concepts with curriculum implications in Chapter VII.

Class Projects

One of the most appropriate class activities for studying a variety of management concepts is the mass production project. A possible personnel organization chart for this class activity was presented earlier in this chapter. As was indicated, the class can organize itself as an industrial firm including stockholders and a board of directors. A variety of management considerations are then 285 encountered in developing a feasible organizational plan, selecting a suitable product and going through the necessary steps to effect its production. The product must then be sold and a statement of earnings or losses issued. A great deal of learning related to manage­ ment would take place in making the necessary preparations and suc­ cessfully carrying out such an activity.

Another class project might be to study the purposes of and procedures involved in an industrial suggestion plan. The class might develop a suggestion system including some form of student remuneration for useful ideas. A central concept which should be developed is the quest for useful ideas in industry. The willingness of industry to pay for such ideas, in many cases, should also become apparent. Such a class project would also be worthwhile in promoting student participation and as a means of improving laboratory proce­ dures.

The industrial arts class might profitably develop a system of inventory control. This activity would provide practical experience in one of management's primary considerations. It would develop an appreciation for the need to know what quantity of materials and supplies are on hand at all times. The instructor should assist the class in developing the plan to keep it simplified enough to have 286

practical application in the laboratory. The system may need to be developed, used for a period of time and then revised as experience

indicates. To achieve the maximum educational benefit the role of

inventory control in industry should be studied at the outset.

Research and development activities could serve as an effective

class project in working with a gifted group. For example, various

tests could be conducted to determine various physical character­

istics and working properties of certain raw materials. The results

of the tests can be recorded in a scientific manner and used as a

basis upon which to draw conclusions. The most suitable material

would then be selected and the development phase of the project

initiated. The first step is usually making drawings and specifications

followed by the construction of working models. The models are eval­

uated, revised and final drawings are prepared. This could be a

stimulating experience for a group with sufficient ability and back­

ground.

Management Center

The industrial arts laboratory would be better equipped for

eaching an appreciation and understanding of management's role in

industry if part of the physical facility is maintained as a management 287 center. Such a center would include the following divisions or facilities:

1. The instructor's office

2. Reference material storage

3. Audio-visual storage

4. Display cases

5. Bulletin boards

6. Planning and conference tables

The management center, thus, needs to be a large enough facility to accomodate conference, planning, display and audio-visual cen­ ters. Room is also required for the instructor's office.

The management center should have provisions to darken the room for showing film strips, movies and slides. The management personnel organization chart should be prominently displayed on the bulletin board provided. Filing cases should be provided for storing such materials as personnel data sheets, audio-visuals related to management, display materials and free and inexpensive teaching materials. This center can serve as an instructional facility as well as providing for reference work and management committee metetings.

It provides a quiet and clean location away from the activities carried on in the industrial arts laboratory. 288

Other Implications

Industrial management is viewed as providing instructional content as elements of five divisions of the industrial arts curricu­ lum. These five divisions are communications, construction, elec­ tronics, manufacturing, and power and transportation. Management concepts should be part of each of these curriculum divisions rather than a separate division. This seems to be proper in that much of the justification for managerial planning and effort would lose its meaning if it was divorced from the manipulative activities in the laboratory. Management is one of the basic ingredients in industrial enterprise, but it is felt that it can be understood best when incor­ porated in regular laboratory activities. Management concepts would optimumly be part of the curriculum in the form of management per­ sonnel organization, class activities based on management concepts and related study and information.

Resource personnel from the managerial ranks of local industries can profitably make presentations to industrial arts classes. Such personnel are usually prepared to give an overall view of management's functions in the industry, the role of the industry in the community and what qualities management seeks in hiring personnel. Such resource personnel presentations usually provide for a question and answer 289 period which promotes understanding through student participation.

Utilizing this instructional technique provides for a change of pace in classroom procedures, brings the knowledge of an expert into the classroom and builds good school-community relations.

Management concepts and practices are viewed as providing both curriculum content and teaching method. Its relationship to curriculum content involves the information incorporated in curricular materials and its study as laboratory related information. Management knowledge provides a teaching method in the form of a laboratory personnel organization which is patterned after industrial practice and which promotes the smooth operation of the industrial arts labor­ atory.

A number of implications for industrial arts education have been drawn from industrial management concepts and practices. These im­ plications have included laboratory organization charts, job specifi­ cations, a personnel data sheet and field excursions. Other implications included classroom reports and discussions, class projects, a manage­ ment center and use of resource personnel. Management was viewed as providing curriculum content for other divisions of the curriculum rather than being a separate division on its own. It was noted that industrial management provides both a resource for curriculum content and an organLzational teaching method. The next step is to present a summary and draw conclusions. CHAPTER IX

SUMMARY AND CONCLUSIONS

The problem of this study was to determine what techniques of industrial arts laboratory organization and what industrial arts curriculum content can be derived from modern industrial management concepts and practices. This involved ascertaining what laboratory personnel organization patterns would tend to teach about industry as well as facilitate laboratory organization. It included evaluating industrial management concepts and practices as to their appropri­ ateness for industrial arts curriculum content and/or student exper­ iences .

Documentary research was employed to find the data sought.

Original pieces of written matter were employed as sources of in­ formation. Use was made of industrial management references which were copyrighted since World War n and especially during the past five years. An international perspective was gained by reviewing the proceedings of the International Committee of Scientific Management which met in New York City in 1963. Recent publications of the

American Management Association were also explored.

291 292

A set of ten criteria were developed for screening management concepts and practices for industrial arts education. These criteria served as guides in preparing a list of management concepts with industrial arts curriculum implications. The application of industrial arts management concepts and practices to an industrial arts laboratory organization lnd curriculum content were also guided by these criteria.

One of the basic conclusions was that industrial management, as a resource, does provide cuiricular experiences, subject matter content and personnel organization patterns that are continually related to the values and general objectives of industrial arts educa­ tion. The applications to industrial arts education were presented in a list of management concepts with implications for the industrial arts curriculum.

The implications for industrial arts education included a pre­ sentation of selected laboratory organization charts, job specifications, a personnel data sheet, and questions for discussion of a typical employment application blank used by industry. Management topics were presented in connection with field excursions, classroom reports and discussions, class projects, a laboratory management center and the use of resource personnel. It was concluded that management 293 concepts should provide curriculum content for other divisions of the curriculum rather than constituting a separate division of its own.

It was concluded that industrial arts should seek to develop an understanding of the key role played by industrial management on an international scale. This worldwide interest in industrial manage­ ment is exemplified by the efforts of the International Committee of

Scientific Management. Its central objective is furthering the prin­ ciples and methods of scientific management on an international scope. Scientific management is recognized as one of the basic needs of developing nations.

Management personnel organization plans should be patterned after industrial practice, promote student stature and participation in addition to promoting the smooth operation of the industrial arts laboratory. The plan should be student developed with the assis­ tance of the instructor. It should be designed to provide experiences in leadership and followership. The similarities and differences between the laboratory personnel organization and those used in industry should be noted and discussed.

Evolution of industrial management. The early beginnings of industrial management were traced back to the pioneering efforts of 294

Watt and Boulton of Great Britain in the late 18th century. Such

methods as the division of labor, work study and executive develop­

ment were being applied on a limited scale at this time. The serious

beginnings of scientific management, however, are generally traced

back to the work of Frederick W. Taylor who is accorded the title

of "Father of Scientific Management."

The nature of industrial growth was noted as a combination of

developments. These included the division of labor which provided

for specialization, mechanization meaning the increasing use of

powered machinery, and the growth of enterprise partly made possible

by the above two factors. The growth of enterprise also resulted

from mass markets which made mass production possible, and the

assembly of workers under a definite organizational discipline.

Industrial growth has resulted from effectively combining these factors

since one or two of them alone would not have spelled growth.

The role of management was viewed from the vantage points of

its providing an economic resource, a system of authority, a class

or elite, a leadership group and a force for community improvement.

The role played by management may be all of these, varying in degree

from time to place. At any rate it is a vital, dynamic and integrating

force needed to guide enterprise toward useful ends. 295

The management experts whose contributions were discussed included Taylor, Follet, Urwick, Drucker, Gantt, Gilbreth, and

Emerson. Some of the early objectives of scientific management devel­ oped by these men were (1) studying industrial processes through scientific observation and experimentation, "^2) developing standard time for operations, (3) instructing workers in the best work methods,

(4) removing planning from performance, and (5) providing incentives through benefits from increased productivity. A central aim was to promote maximum output through methods designed to deduce or eliminate waste and inefficiency.

Current applications of scientific management in industry include such practices as (1) incentive wage payments, (2) increased appli­ cations of research and analysis techniques, (3) improved work methods and production techniques, (4) human relations considerations in personnel management based on advances in the social sciences, and (5) an improved process of administration through more reliable facts and principles. The result has been the emergence of scientific industrial management as a recognized discipline involving a wealth of subject matter.

Recent developments in industrial management. Some 20 billion dollars are spent each year on a worldwide basis for research and 296 product development. The smaller portion of this sum was spent on basic research. This is the type of investigation which has no im­ mediate or practical application in view. A much larger portion was spent on applied research which is conducted in order to develop such things as new products or processes with immediate commercial value. There seems to be a growing emphasis on both types of indus­ trial research in order to keep pace with rapid technological changes.

Industrial research has become an industry of its own with such stated objectives as increasing production, cutting production costs, improving products, helping an enterprise maintain its technical position and providing net profit on new processes and products.

Other purposes served by research as an industry include such things as increasing the health, safety and longevity of personnel, develop­ ing esthetic qualities in products and assisting in the long-range planning of a firm.

A. D. Little, Inc., of Cambridge, Massachusetts, and the

Battelle Memorial Institute in Columbus, Ohio, are two notable com­ mercial research laboratories which are frequently employed by manui facturing enterprises with special research problems.

Industrial management is increasingly being placed on a more scientific basis through the application of knowledge from mathematics. 297 physical sciences and such social sciences as economics, psychology and sociology. It is increasingly realized that the best way to reduce both recorded and hidden costs is through the further application and synthesis of specialized skills of the various disciplines involved.

Creativity and imagination is often fostered by industry through suggestion plans which offer financial incentives. Such a system also promotes employee participation and provides one means of upward communication. The National Association of Suggestion

Systems with a membership exceeding 1000 indicates that they do promote efficiency and play a vital role in American business.

Developing managerial competence was noted as one of the basic needs of developing nations. Some methods used are invest­ ment of foreign capital, importing foreign managerial talent, training nationals abroad and training manpower resources at home. Such efforts are promoted by the 41 countries affiliated with the International

Committee of Scientific Management with headquarters in Geneva,

Switzerland. International management development is also promoted by the American member called the Council for International Progress in Management. The latter is composed of 24 American Management

Societies which also seek to promote an international interchange of management information. 1 298

Some trends in industrial management are better communications, more constitutional management, greater decentralization, more demo* cratic and participative, and more stable production and employment.

Other trends include greater accuracy in job evaluation, improved working conditions, long-term advancement programs and an overall mutual confidence trend within industry. A predominant concept emerging from the various trends in industrial management is a growing realization of the importance of managing human resources.

Personnel management. Recruitment of industrial personnel in­ volves the development of both internal and external sources of employees. Utilizing internal sources does have values in creating employee morale, but it is often good for the organization to bring in new blood from the outside. The second step is the actual selec­ tion of personnel u*sing job specifications as a guide. These specifi­ cations classify such factors as the degree of skills needed, education requirements, necessary experience, maximum age limits and per­ sonality characteristics desired. The information needed is gathered through techniques such as application blanks, interviews, references and tests.

Management personnel development is the process of providing

managers with the education and experiences essential for their task. 299

The methods of training employed include university and college educa­ tion, case studies, apprenticeships, on-the-job training, job-rotation and problem-solving conferences. Other techniques which have been used in the development process include performance appraisals, profit-sharing plans, provision for advancement, cultural upgrading, means for developing leadership ability, employee mobility, plant sponsored education, and public vocational education leadership development.

Industrial psychology is a valuable aid to personnel management.

It has fostered a more realistic consideration of the human element in industry through providing knowledge concerning mans' capacities and behavior patterns. It has had a salutary effect on such matters as physical working conditions, personal relationships, incentives, morale and attitudes and task interest. Industrial psychology has also provided beneficial information concerning such matters as ethics, discipline and loyalty.

Industrial management has both humanitarian and economic reasons for being concerned about the safety and health of employees. This in­ volves a moral obligation to employees as well as the practical necessity of reducing the high costs of accidents and health disabilities. Safety 300 programs have resulted, including such facets as safety engineering, educational programs, analysis of accidents, safety contests and enforcing positive safety rules.

Industrial management seeks to promote effective two-way communications within industry. Both oral and written communications play a key role in promoting mutual understanding. Informal communi­ cations often provide for the rapid transmission of news and gossip.

One task of the planned communication process is to correct any inaccurate or false rumors circulating through the grapevine.

Communications should optimumly flow vertically through formally established channels. Horizontal communication is also fostered on an informal basis among personnel at approximately the same organi­ zational level. The plant supervisor plays a key role in promoting communication because of his closeness to employees and his associa­ tion with management.

Personnel management should be based on a firm moral conviction of the dignity and worth of the individual. This may involve viewing individuals as truly unique, matching the man with the job, seeking the maximum development of each employee and showing an interest in employees as individuals. A willingness to appreciate and deal with 301 the individual differences of employees is essential in order to bring forth the best they have to offer.

Management and the functional organization. The theories of organization examined included line, line-and-staff, committee, functional and multiple management. Each of these theories had its own particular advantages and disadvantages. It was noted that the use of committees was part of any well managed organization. The line-and-staff pattern of organization, making use of some committee assistance, may be the most commonly used. The latter provides for authority to flow largely along the line organization, provides assis­ tance and advice from staff specialists and allows wider participation through committee work.

Industries are divisionalized along such lines as function, product, geography, or some form of semi-divisionalization. In actual practice, a large industry is generally divided into units based on some combination of the above factors. These multiplant companies often have certain staff functions performed at the main plant. This usually includes such things as engineering, industrial relations, public relations, legal advice, and purchasing and traffic.

One possible form of semi-divisionalization is assigning production to the various plants while sales remains centralized. 302

Coordinating the various functions within an industry is a complex task requiring, among other things, cooperation, good human relations, communications and understanding. Production, quality control and sales are some functions which must be coordinated on a tentative timetable basis, thus, creating a desired balance of out­ puts or progress. Without such a balance, production would be dis­ rupted because of lack of finished parts, sub-assemblies or products.

This internal system may be conceived as an intricate whole in which each part becomes as indispensible as the individual workings of a fine watch. If one part of the system is malfunctioning, it affects the entire system.

Flexible integration of the industrial organization refers to the fact that no rigid pattern should be followed in coordinating spec­ ialized functions. Flexibility is essential because relationships within an industry have become so complex and subject to change. Inte­ gration is required because skills have become so specialized that no function has meaning by itself, but gains significance in relation to other functions.

Industrial organization charts are an oversimplification of the complex relationships existing within an industry. They do, however, show the most important aspects of the organizational pattern. Such 303 charts are a graphic portrayal of feasible structural relationships and establish lines of authority and responsibility. Charting does not indicate the many informal relationships which exist nor does it take individual differences into account. In addition, charts do not show the extent to which authority has been delegated or the point where various decisions are actually made.

The delegation of authority and responsibility is a process of releasing certain executive authorities and assigning them to given subordinate positions. Delegation relieves the manager in charge of none of his responsibility, authority or accountability. It is actually an extension of powers which provides for an increased volume of work. Generally speaking, delegated responsibility requires com­ mensurate delegated authority in order to provide for effective action and maintaining good morale. Delegation requires flexibility, con­ trols on performance and communications. It is an essential ingred­ ient in effective decision making at various organizational levels.

Automation and/or cybernetics is a production system which employs a minimum of human labor and a maximum of continuous self- regulating machinery. This system of>production is creating a new concept of skill based more on broad understandings, alertness, accepting more responsibility, ability to learn and creativeness. The 304 increasing application of this system of production points to the re­ sulting inevitability of change. This change requires intensive managerial planning in such matters as mitigating personnel disloca­ tions, and anticipating needed product development, new materials and market development.

The primary functions of industrial management include

(1) promoting efficiency, (2) making a profit in order to provide a fair return for consumer, worker and owner, (3) providing leadership,

(4) planning, organizing, staffing, directing and controlling,

(5) undertaking risk and decision-making, (6) promoting good public relations, (7) developing policies,and (8) evaluating results. Manage­ ment, thus, provides a needed service as well as satisfying the various vested interests in the enterprise.

Selected variables of introduction. A series of production var­ iables such as product design, maintenance, quality control and inventory control are vital concerns of management. These production variables must be adequately planned, coordinated and balanced in order to maintain a viable industrial organization. Quality control, for example, is the process of checking on production to see that it remains within acceptable tolerance limits. It is designed to prevent further work on spoiled material, correct machine adjustments 305 and improper practices, effect salvage control and promote consumer satisfaction. Quality control is important on its own, but in turn it affects other production variables.

Product design is another vital production variable with which management is concerned. Typical product design considerations include appearance, convenience, usefulness, durability, cost of operation, price and diversity of types and sizes. Other factors involved are such things as a desire for standardization and simpli­ fication, the possibility of producing related products and patent protection. Effective product design requires weighing these various considerations in order to come up with a combination that will sell in the marketplace.

Conclusions

It is concluded that there are indeed techniques of industrial arts laboratory organization and industrial arts curriculum content that can be derived from modern industrial management concepts and practices. The industrial management concepts and practices with implications for industrial arts education are presented in chapter VII.

Techniques of industrial arts laboratory organization through manage­

ment personnel charts are presented in the chapter on implications for

industrial arts education. 306

Another conclusion is that the presentation of management con­ cepts with industrial arts curriculum implications do reflect the basic underlying thinking of modern scientific management. These concepts were found to be fundamentally related to the organization and prac­ tices of industry. The economic concepts included were identified as having broad applicability to management thinking in the produc­ tion of goods and services.

A further conclusion is that it is not possible to reflect so complex a phenomenon as a large, modern industry through a labora­ tory personnel organization. It is, however, possible to pattern laboratory personnel organizations after industry in order to teach some of the most important aspects of industrial organization. This was accomplished by presenting some industrial arts laboratory organization charts and job specifications.

This study did not provide a firm answer as to what might be needed in terms of facilities, machines, equipment and supplies in order to reflect modern industry as regards its organizational theory and practice. Reference was made to the need for a management center in the laboratory, but further study and field testing is needed beyond this point. 307

It is concluded that student experiences could be built around a related study of industrial management concepts and practices.

Study of managerial elements could be included as part of such activi­ ties as field excursions, class reports and discussions, class pro­ jects and the use of resource personnel. Direct student experiences might include planning and conducting a mass production project, developing and evaluating an industrial suggestion plan, developing a means of inventory control or engaging in research and development activities.

The above applications of industrial management concepts and practices to industrial arts meet the criteria established. These experiences and studies are continually related to the values and general objectives of industrial arts education. Such experiences do help develop an insight and understanding of industry, its organi­ zation and place in our culture. The experiences and studies are a practical possibility and their use in the laboratory would tend to teach broad understandings of scientific management and its problems.

They would, furthermore, be related to the needs of individuals, as students, citizens and members of a technological complex. The in­ dividual in each of these roles cai benefit from an understanding of industry of which management is a major component. 308

The conclusion reached with regard to what concepts emerging as a result of automation and/or cybernetics might be incorporated in curriculum materials is not a firm one. A study of what they are and their basic results are certainly in order. Further, the spirit of accelerated change in industry and the changing concept of skill should be part of this understanding. Industrial arts teachers need to remain alert to possible equipment and processes which can be used to teach concepts of automation and/or cybernetics.

The two organizations which are playing key roles in pcomoting management development in industrial and developing nations are

(1) the International Committee of Scientific Management (CIOS), and

(2) the Council for International Progress in Management (CIPM).

The efforts of the two organizations are directed toward effecting a meaningful international exchange of management principles and in­ formation. These efforts are based on a conviction that the applica­ tion of scientific management will raise the standards of living in all nations by providing for more effective utilization of human and

material resources. 309

Recommendations

This study has indicated some industrial management concepts and practices which may profitably be studied in industrial arts edu­ cation. There are many further applications which may become apparent through additional research, field testing and curriculum evaluation. Further study is therefore recommended on an action research basis in an on-going classroom situation. Additional re­ search may also be needed to determine what might be needed in terms of facilities, machines, equipment and supplies in order to re­ flect modem industry as regards its organizational theory and practice.

It is recommended that the teacher education institutions and/or the professional organizations in industrial arts accept the respon­ sibility for establishing pilot model programs in industrial arts edu­ cation. Such experimental programs are needed in order to test new ideas such as utilizing industrial management concepts in instruc­ tion. It seems that personnel management is one of the most promis­ ing resources since it deals with the highly variable human element.

The teacher education institutions should be cognizant of the need to prepare teachers with some background in industrial manage­ ment concepts. It may be partially true that teachers will tend to 310 teach the way they have been taught. Without such a background it is difficult for teachers to go beyond teaching the manipulative aspects of industry.

There appears to be a need for literature in the industrial arts field dealing with industrial management and its value in enriching experiences and study in the laboratory. The profession has too often been content with publications dealing almost exclusively with the how-to-do-it aspects of industry. Only when more emphasis is placed on understanding, will industrial arts be more realistically teaching about industry, its organization and its place in American culture.

Industrial arts supervisors and consultants need to be more aware of industrial management and its applications to the teaching situation. This could be promoted through industrial arts literature as well as through the efforts of local, state, national and inter­ national organizations within the profession. An awareness by personnel in such leadership positions is especially needed because of the widescale influence they are able to exert.

Administrative personnel in the public schools should be willing to allow teachers to experiment in testing new ideas and curricular 311 approaches. A freedom to innovate by including industrial manage­ ment concepts in the industrial arts curriculum is essential in determining the most pertinent study materials and the most mean­ ingful student experiences. A type of action research carried on in the classroom may be appropriate.

The above recommendations may indicate that the profession often has knowledge which is beyond its propensity to make practical applications in the industrial arts laboratory. It behooves those in the profession to reduce the lag between what is known concerning the curriculum and exemplary practices and what is actually practiced in the field. APPENDIX

312 APPENDIX

SELECTED INDUSTRIAL MANAGEMENT ORGANIZATIONS WITH ANNOTATIONS

1. American Institute of Management, 125 East 38th Street,

New York., New York. 10016. It utilizes a technique called "Manage­ ment Audit" to evaluate ten basic responsibilities of management.

Publishes a number of items such as Management Audits, Industry

Audits, Bulletins and Questionnaires.

2. American Management Association, Inc., 135 West 50th

Street, New York, New York 10020. Promotes such activities as con­ ferences, seminars, courses and research studies. Publishes many bobks and four periodicals: The Management Review, Personnel,

Supervisory Management and Management News.

3. Association of Consulting Management Engineers, Inc. ,

347 Madison Avenue, New York, New York 10017. A number of publi­ cations are available through the association office such as: Common

Body of Knowledge Required by Professional Management and Profes­ sional Practices in Management Consulting.

4. Council for International Progress in Management (U.S.A.),

Inc., 247 Park Avenue, New York, New York 10017. Promotes man­ agement achievements in the U.S. as well as abroad through grants

313 314 and projects. Publications: Training Managers Abroad, Training

American Businessman for Work Abroad, and Human Progress through

Better Management.

5. International Committee of Scientific Management, 1-3 rue de Varembe', Geneva, Switzerland. Holds triennial conferences in one of its 41 affiliated countries to promote an international exchange of management information.

6. National Association of Manufacturers, 2 East 48th Street,

New York, New York 10017. Publishes a number of brochures, book­ lets and films. Over 200 Industry on Parade Series films for School and college uses without charge.

7. The National Management Association, 333 West First

Street, Dayton 2, Ohio. Offers its membership courses in basic management, economics, community responsibility and collateral knowledge and skills. Publishes Manage, its official monthly magazine.

8. Society for Advancement of Management Inc. , 16 West 40th

Street, New York, New York 10018. Publishes the Advanced Manage­ ment Tournal from which reprints of notable articles are available. SELECTED BIBLIOGRAPHY

1. American Institute of Management. Management Audit. New York: American Institute of Management. Vol. IX, No. 7, July, 1963.

2. American Management Association, Inc. Guidelines for the Corporate Risk Manager. USA: AMA, 1963.

3. American Management Association, Inc. Managing the Materials Function. Report Number 35, U.S.A.: AMA, 1959.

4. American Management Association, Inc. The Marketing fob. U.S.A.: AMA, 1961.

5. Anderson, Richard C. Management Practices. New York: McGraw-Hill Book Company, Inc., 1960.

6. Bellows, Roger, Gilson, Thomas Q. and Odiorne, George S. Executive Skills: Their Dynamics and Development. Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1962.

7. Benn, A. E. The Management Dictionary. New York: Exposi­ tion Press, 1952.

8. Bethel, Lawrence L., et al. Essentials of Industrial Management. New York: McGraw-Hill Book Company, Inc., 1959.

9. Bethel, Lawrence L., et al. Industrial Organization and Manage­ ment. New York: McGraw-Hill Book Company, Inc., 1962.

10. Brech, E. F. L., editor. The Principles and Practice of Manage­ ment. London: Longman, Green and Co. Ltd., 1963.

11. Bright, James R. Automation and Management. Boston: Harvard University, 1958.

12. Calhoon, Richard P. Managing Personnel. New York: Harper and Row, Publishers, 1963.

315 316

13. Cantor, Nathaniel. The Learning Process for Managers. New York: Harper and Brothers Publishers, 1958.

14. Carson, Gordon B., editor. Production Handbook. New York: The Ronald Press Company, 1959.

15. Chappie, Eliot D. and Sayles, Leonard R. The Measure of Management. New York: The Macmillan Company, 1961.

16. Chruden, Herbert J. and Sherman, Arthur W. Jr. Personnel Management. Chicago: South-Western Publishing Company, 1959.

17. Cornell, William B. and Madeheim, Huxley. Organization and Management in Industry and Business. New York: The Ronald Press Company, 1958.

18. Council for International Progress in Management. Human Progress Through Better Management. New York: Council for International Progress in Management (USA), Inc., 1963.

19. Dauten, Paul M. Jr., editor. Current Issues and Emerging Con­ cepts in Management. New York: Houghton Mifflin Company, 1962.

20. Davis, Ralph Currier. Industrial Organization and Management. New York: Harper and Brothers Publishers, 1957.

21. Davis, Keith and Scott, William G., editors. Readings in Human Relations. New York: McGraw-Hill Book Company, Inc., 1959.

22. Dewhurst, J. Frederic, et al. America's Needs and Resources. New York: The Twentieth Century Fund, 1955.

23. Flippo, Edwin B. Principles of Personnel Management. New York: McGraw-Hill Book Company, Inc., 1961.

24. Gardner, Fred V. Profit Management and Control. New York: McGraw-Hill Book Company, Inc., 1955.

25. George, Claude S. Jr. Management in Industry. Englewood • Cliffs, N.J.: Prentice-Hall, Inc. 1959. 317

26. Gilmer, B. von Haller. Industrial Psychology. New York: McGraw-Hill Book Company, Inc., 1961.

27. Glover, John G. Fundamentals of Professional Management. New York: Simmons Boardman Publishing Corp., 1958.

28. Haimann, Theo. Professional Management Theory and Practice. New York: Houghton Mifflin Company, 1962.

29. Harbison, Frederick and Myers, Charles A. Management in the Industrial World: An International Analysis. New York: McGraw- Hill Book Company, Inc., 1959.

30. Hastings, Paul G. Fundamentals of Business Enterprise. Prince­ ton, N. J.: D. Van Nostrand Co., Inc., 1961.

31. Heyel, Carl, editor. Handbook of Industrial Research Management. New York: Reinhold Publishing Corporation, 1959.

32. Heyel, Carl. The Encyclopedia of Management. New York: Reinhold Publishing Corporation, 19 63.

33. Holland* Maurice. Management's Stake in Research. New York: Harper and Brothers Publishers, 1958.

34. Holmstrom, Andrew B. "Summary: President's Report for 1962." New York: Council for International Progress in Management (USA), Inc., 1962.

35. Houston, George C. Manager Development: Principles and Per­ spectives. Homewood, Illinois: Richard D. Irwin, Inc., 1961.

36. Ireson, William Grant and Grant, Eugene L. Handbook of Indus­ trial Engineering and Management. New York: Prentice-Hall, Inc., 1955.

37. Jucius, Michael J. Personnel Management. Homewood, Illinois: Richard D. Irwin, Inc., 1959.

38. Jucius, Michael J. and Schlender, William E. Elements of Mana­ gerial Action. Homewood, Illinois: Richard D. Irwin, Inc., 1960. 318

39. Kast, Fremont E. and Rosenzweig, James E., editors. Science, Technology, and Management. New York: McGraw-Hill Book Company, Inc., 1963.

40. Keith, Lyman A. and Gubellini, Carlo E. Introduction to Business Enterprise. New York: McGraw-Hill Book Company, Inc., 1962.

41. Knudson, Harry R. Jr. Human Elements of Administration. New York: Holt, Rinehart and Winstron, 1963.

42. Livingston, Robert T. and Milberg, Stanley H. Human Relations in Industrial Research Management. New York: Columbia Uni­ versity Press, 1957.

43. Maier, Norman. Psychology in Industry. Boston: Houghton Mifflin Company, 1955.

44. "Management: Now It's More of a Science," Business Week, Number 1791 (December 28, 1963), p. 44+.

45. Marling, Elizabeth, editor. Management for the Smaller Company. New York: American Management Association, Inc., 1959.

46. McFarland, Dalton E. Management Principles and Practices. New York: The Macmillan Company, 1958.

47. McGregor, Douglas. The Human Side of Enterprise. New York: McGraw-Hill Book Company, Inc., 1960.

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