Industrial Operations 233

1. Industrial Operations 233 Managing People

2. Manager’s Work • Planning: Deal with people? • Organising: Deal with people? • Implementing: Deal with people? • Monitoring & Control: Deal with people? • Meeting, Meeting, and Meeting!! • Therefore, deal with people

3. Machine and People • Two of the most vital organisational resources • What’s the difference? • Machine: Predictable & consistent output • People: Unpredictable & variable output • Human behaviour is determined by “psychological processes”

4. Psychological Processes • Exercise: • Take a blank piece of paper, draw a line down the centre from top to bottom. Now think of two persons you have worked with. Write down a description of each person , one on each side of the paper. Review your descriptions. What words and concepts did you use to describe them? • Psychological Subconscious Rational Conscious Emotional

5. Psychological Processes • Subconscious level: • It controls our behaviour, but we are not aware of it (example ??) • Conscious level: • Rational: • Apply our reasoning and logic • “Rational analysis” of decision making • Emotional: • Feelings and emotion dominate in decision making

6. Maslow’s Hierarchy of Needs • All behaviour are “motivated behaviour” • Behaviour is contingent upon the hierarchy of needs • Outward Psychological • Environmental Social Physiological • Inward

7. Scientific Management • Developed by Frederick Taylor ( a mechanical engineer) in 1910s • Management by observation, experimentation and logical deduction • Improve productivity and efficiency • Functional work organisation • Time & motion study • Selection & training of workers • Incentive scheme

8. Failure of Scientific Management • Taylor’s approach did not work for many companies • Quality deteriorated • Incentive scheme criticised • Observation & experimentation failed • People behaved differently • “Hawthorne Effect” • Implementation failed

9. Behavioural Management • Scientific approach is not sufficient • Behavioural approach needed • Morale, motivation, job satisfaction, self-esteem (psychological factors) • Elton Mayo (an Australian) is the guru • did lot of experiments • Need to combine scientific & behavioural approaches

10. Theories “X” and “Y” • Scientific approach: • workers are production resources • needs closed supervision & organisation • Behavioural approach: • workers are human beings and essential for organisation • workers need to be motivated and satisfied

11. Theory “X” • People dislike work • They only work for payment • People dislike responsibility at work • They prefer to follow instructions • People have little ambition at work • They do not exercise initiative and creativity • Scientific method is most suitable for Theory “X”

12. Theory “Y” • People like work • People enjoy responsibility • Do not simply follow instructions • People have ambitions at work • Exercise their own initiative and creativity • Behavioural approach is most suitable for Theory “Y”

13. Exercise • Everybody has aspects of Theories “X” and “Y” • eg. some people hates administrative work • Manager needs to be flexible • Delicate balance of scientific and behavioural approaches • Exercise: • In your work, list the things you like and dislike most • Does your manager manage you differently?

14. Group Dynamics • Organisational decisions are taken by groups • Formal and Informal • Members of the group interact: • Group dynamics • Group effect > sum of individual effect: • Positive group dynamics • Group effect < sum of individual effect: • Negative group dynamics

15. Decision Making • Rational decision making: • Identify problem • Develop alternative solutions • Develop multiple criteria • Evaluate the alternatives with respect to multiple criteria • Use decision model to analyse the alternatives • Select the best alternative • Develop implementation plans

16. Decision Making • Behavioural decision making: • Social influence plays an important role • Three levels: • Autocratic: No subordinate influence • Consultative: Limited subordinate influence • Collaborative: Equal subordinate influence • Rational approach is modified: • Information gathering is influenced by the above levels • Concept of “Bounded rationality”

17. Tutorial • (i) Briefly discuss how scientific management differs from behavioural management. • (ii) Should a manager adopt theory X or theory Y attitude toward staff. • (iii) What is Hawthorn Effect? • (iv) Apply rational and behavioural decision making process in a car buying problem.