Industrial Management

VI th Sem.
 CORPORATE SOCIAL RESPONSIBILITY
• Corporate social responsibility is the idea that firms have
obligations to society beyond their economic obligations to
owners or stockholders and also beyond those prescribed
by law or contract.
• Both ethics and social responsibility relate to the goodness
or morality of organizations.
• Business ethics is a narrower concept that applies to the
morality of an individual’s decisions and behaviors.
• Corporate social responsibility is a broader concept that
relates to an organization’s impact on society, beyond
doing what is ethical.
 Corporate Social Responsibility
at infosys
• Infosys Foundation: We are committed to contributing to the society and
established the Infosys Foundation in 1996 as a not-for-profit trust to
support our social initiatives. The Foundation supports programs and
organizations devoted to the cause of the destitute, the rural poor, the
mentally challenged, and the economically disadvantaged sections of the
society. The Foundation also helps preserve certain cultural forms and
dying arts of India.
• Community service: Through our Computers@Classrooms initiative
launched in January 1999, we donated 2,567 computers to various
institutions across India. Additionally, we have applied to the relevant
authorities for permission to donate computers to educational institutions
on an ongoing basis in the future. Microsoft Corporation continues to
participate in this initiative by donating relevant software. We would like to
place on record our appreciation for their continued support.
• Social commitment in education: Infosys' Education & Research group
has the pride of anchoring the Infosys Extension Program (IEP), which
consists of the Infosys Fellowship Program, Rural Reach program, Catch
Them Young and Train the Trainer.
• Nestlé India has a vested interest in solving that nation’s water
problems. It, too, wants to be sure it can produce its products locally.
About half of Nestlé’s 480 factories are located in developing
countries. In India, the company doesn’t just make chocolate. It
produces milk products, prepared dishes, cooking aids, and a host of
beverages that are staples to Indian consumers. The company has
introduced a water education program, has bored wells for nearly
100 village schools for children, and teaches hygiene programs.
“Water is, of course, critical for a global food and beverage company
like Nestlé,” says Christian Frutiger, the company’s public affairs
manager. “Our village school wells project in India is probably the
most telling example. So far, 96 such village school wells have been
completed. The program started in the villages around the Nestlé
factories and gradually expanded to the entire milk district.” Nestlé
wants to create value for its shareholders and generate long-term
values for society, Frutiger says. To that end, the company has a
vested interest in making sure clean water is available for its
operations.
 BUSINESS ETHICS
• Ethics is the study of moral obligation, or
separating right from wrong.
• Business ethics is concerned with a
systematic study of morals.
• Values and Ethics: Values are closely related
to ethics. Values can be considered clear
statements of what is critically important.
Ethics become the vehicle for converting
values into actions, or doing the right thing.
• Sources of Unethical Decisions and Behaviour
– Individual Characteristics
– The Nature of the Moral Issue
– The Ethical Climate in the Organization
• Ethical Temptations and Violations
• Business Scandals as Ethical Violations
• A Guide to Ethical Decision Making
1. Is it right?
2. Is it fair?
3. Who gets hurt?
4. Would you be comfortable if the details of your
decision were reported on the front page of
your local newspaper, on a popular Web site or
blog, or through your company’s e-mail system?
5. Would you tell your child (or young relative) to
do it?
6. How does it smell?
The Process of Management
 Organizing
• The tasks of an organization are divided into jobs
for individuals and groups.
• Companies also subdivide work through an
• organization structure—the arrangement of
people and tasks to accomplish organizational
goals.
• A bureaucracy is a rational, systematic, and precise
form of organization in which rules, regulations,
and techniques of control are specifically defined.
Principles of Organization in a Bureaucracy
• Hierarchy of authority. The dominant characteristic of a bureaucracy is
that each lower organizational unit is controlled and supervised by a
higher one. The person granted the most formal authority (the right to
act) occupies the top place of the hierarchy.

The Bureaucratic
Form of
Organization
• Unity of command: A classic management principle, unity of command
states that each subordinate receives assigned duties from one superior
only and is accountable to that superior. In the modern organization,
many people serve on projects and teams in addition to reporting to
their regular boss, thus violating the unity of command principle.
• Task specialization: In a bureaucracy, division of labour is based on
task specialization. To achieve task specialization, organizations
designate separate divisions or departments such as new product
development, customer service, and information technology. Workers
assigned to these organizational units employ specialized knowledge
and skills that contribute to the overall effectiveness of the firm.
• Responsibilities and job descriptions: Bureaucracies are characterized
by rules that define the responsibilities of employees. In a highly
bureaucratic organization, each employee follows a precise job
description and therefore knows his or her job expectations. The
responsibility and authority of each manager is defined clearly in
writing. Responsibility defined in writing lets managers know what is
expected of them and what limits are set to their authority.
• Line and staff functions: A bureaucracy identifies the
various organizational units as line or staff. Line
functions involve the primary purpose of an
organization or its primary outputs. In a bank, line
managers supervise work related to borrowing and
lending money. Staff functions assist the line functions.
Staff managers take responsibility for important
functions such as human resources and purchasing.
Although staff functions do not deal with the primary
purposes of the firm, they play an essential role in
achieving the organization’s mission.
 • The process of subdividing work into
departments is called departmentalization.
Functional
Departmentalization

• Functional departmentalization: An
arrangement that defines departments by the
function each one performs, such as
accounting or purchasing.
Functional
Departmentalization Within a
Department
 In January, a few years ago, cellphone giant Nokia Corp. threw itself off balance. The
Finnish company had previously divided its cellphone business into three groups based
on market segments: consumer phones, feature-heavy smart phones, and business
phones. Instead, Nokia executives carved the cellphone unit into two functional groups:
those developing the phones and those creating the company’s growing software-and-
services offerings. The reorganization allowed Nokia to focus more attention on
software and services, an increasingly important part of its business. It also created an
organization that is “unstable by design.” The two units are encouraged to challenge
each other, says Mikko Kosonen, a former Nokia strategy chief who advised the
executive team on the new corporate Structure. One potential friction point: whether
Nokia’s software should be reserved for the company’s cellphones or marketed to other
hardware makers, a question with the potential to affect the profits each unit can make.
But units no longer set their own financial targets, one of many tactics that force
executives to resolve their differences rather than fight. That mix of tension and
collaboration is designed to “keep the organization awake,” says Kosonen, who recently
authored a book on strategic agility with Yves Diz, a professor at the Instead business
school in Fontainbleau, France. “The very things that make you great will kill you—
unless you take the medicine to stay agile,” says Kosonen.
Questions
1. Why is dividing the cellphone unit into groups (developing phones and developing
software and services) classified as a functional structure?
2. How might this new organization structure take away a little from Nokia’s ability to satisfy
customer needs?
• Informal Structures: The informal
organization structure is a set of unofficial
relationships that emerge to take care of
events and transactions not covered by the
formal structure.

A Basic Unit of a Social Network Analysis

 Matrix Organization

The Overall Organization Structure of General Electric

• Mechanistic Organisation Structure:
1. Mechanistic organisation structure is pyramid shaped with authority
centralised at the top.
2. It follows hierarchy of command.
3. Mechanistic organisation structure emphasises on narrow span of control.
4. There is intense division of labour and work is divided into specialised
tasks.
5. People consider individual goals as different from organisational goals.
6. Tasks are performed according to position in the hierarchy. People at lower
levels perform comparatively simpler tasks.
7. Tasks are performed according to discretions and desires of managers at
the top.
8. Communication is hierarchical; orders, instructions and commands flow
from top to bottom.
9. Mechanistic organisation structure expects subordinates to obey and be
loyal to superiors and the organisation.
10. Control is exercised from the top.
11. Mechanistic organisation structure is an appropriate form of structure for
organisations operating in a stable environment.
• Organic Organisation Structure:
1. Organic organisation structure is flat shaped with authority decentralised
to lower levels of management.
2. Organic organisation structure does not follow hierarchy of command.
3. It emphasises on wide span of control.
4. Work is divided into general tasks and there is little or no specialisation.
5. There is synchronization of individual goals with organisational goals.
6. Tasks are assigned to people according to their capabilities and skills and
not hierarchical positions.
7. Tasks are flexible; they keep changing according to situations. They are
performed through constant interaction of people.
8. Communication is a network. It flows in all directions in the form of
suggestions, advises and information rather than orders.
9. Organic organisation structure expects commitment to the organisational
goals and not obedience from subordinates.
10. There is self-control.
11. Organic organisation structure is more suitable for organisations
operating in a dynamic environment.
• Tall Organizational Structure
• Large, complex organizations often require a taller hierarchy.
In its simplest form, a tall structure results in one long chain
of command similar to the military. As an organization
grows, the number of management levels increases and the
structure grows taller. In a tall structure, managers form
many ranks and each has a small area of control. Although
tall structures have more management levels than flat
structures, there is no definitive number that draws a line
between the two.
• Flat Organizational Structure
• Flat structures have fewer management levels, with each
level controlling a broad area or group. Flat organizations
focus on empowering employees rather than adhering to
the chain of command. By encouraging autonomy and self-
direction, flat structures attempt to tap into employees’
creative talents and to solve problems by collaboration.
• Flat Structures: A form of organization with relatively
few layers of management, making it less bureaucratic.
• span of control: The number of workers reporting
directly to a manager.
• Decentralization is the extent to which authority is
passed down to lower levels in an organization. It
comes about as a consequence of managers delegating
work to lower levels.
• Centralization is the extent to which authority is
retained at the top of the organization.
Decentralization and centralization lie on two ends of a
continuum. No firm operates as completely centralized
or decentralized.
• Henri Fayol developed 16 general guidelines for organizing
resources:
1. Judiciously prepare and execute the operating plan.
2. Organize the human and material facets so that they are
consistent with objectives, resources and requirements of the
concern.

3. Establish a single component, energetic guiding authority i.e. a

Formal Management Structure.

4. Co-ordinate all activities and efforts.

5. Formulate clear, distinct and precise decisions.

6. Arrange for efficient selection so that each department is headed

by a component, energetic manager and all employees are placed
where they can render the greatest service.
7. DefineDuties.
8. Encourage initiative and responsibility.

9. Offer fair and suitable rewards for services rendered.

10. Make use of sanctions against faults and errors.

11. Maintain discipline.

12. Ensure that individual interests are consistent with the general
interests of the organization.

13. Recognize the Unity of Command.

14. Promote both material and human coordination.

15. Insitute and Effect Controls.

16. Avoid regulations, red tape and (excessive) paper work.

 Fayol's Principle of Division of Work - Meaning, Example, Explanation

• Principle of Division of Work

In context of this article, let's revise the meaning of following words:
• Division of something (e.g. an object, a process, work, etc.) means
to divide, chop or break it up into smaller parts to facilitate a
better understanding, easier handling and operation, and focused
observation on a fixed set of goals. It is a way to separate things
apart based on some established criteria like quality, quantity,
nature of work, so on. It untangles, simplifies, and narrows down
various complexities that were involved prior separation. It helps
to ease and enhance the efficiency of managing a giant complex
task through smaller chunks that are easy to handle.
• Work is any assigned job, task, duty, goal or an objective one is
supposed to accomplish (achieve) before the deadline (on-time)
and as expected at the expense of one's mental and physical
labour to earn the desired reward (usually monetary but not
always) in return.
• Division of Work means to divide or break up a
single complicated job into different smaller
specialised tasks.
• Here, each of these smaller tasks is handled
separately probably by an expert or a team
working under his command.
• In case, these tasks are dependent on each
other's completion, they are achieved separately
and procedurally one after another.
• When all smaller tasks complete as expected,
they all together help to accomplish the single
complicated job.
 PRINCIPLE: UNITY OF COMMAND
• Unity of Command means getting orders/ command from only
one supervisor.
• Fayol has stated “As soon as two superiors impose their
authority over the same person or department, uneasiness
makes itself felt. Dual command is a perpetual source of
conflict.”
• This principle states that an individual should get orders from a
single superior so that he does not get confused and can
discharge his duties effectively.
• Positive impacts of this principle:
– Prevents dual subordination;
– Easy to fix responsibility to an individual;
– Harmonious and cordial relation among the management
and the employees; and
– Performance of the employees will increase.
• Consequences of violation of this principle:
– Reduces efficiency of subordinates;
– Creates confused situation for the subordinates;
– Subordinates can easily escape from their responsibility
and duties;
– Ego clash between managers;
– Overlapping of orders and instructions; and
– Hard to maintain discipline in the organization.
 PRINCIPLE: UNITY OF DIRECTION
• This principle states ‘One Head One Plan’. It means that all the
employees having same objective must be directed towards
the achievement of the common goal and thus must have one
head and one plan. This principle makes it necessary that
there should be unity of action.
• This principle is often confused with the principle of ‘Unity of
Command’ as both sound the same. But the difference
between them is quite clear as ‘Unity of command’ is
concerned with taking command from one boss whereas the
principle of ‘Unity of Direction’ is concerned with the direction
of the efforts of the employees of one division towards the
achievement of the objectives of that division.
• Positive impacts of this principle:
– Efficient achievement of organizational objective;
– Better coordination among the employees;
– Efforts of employees are directed in a better way; and
– Systematic working environment is developed in the
organization.
• Consequences of violation of this principle:
– Decrease in organizational efficiency;
– Lack of coordination;
– Wastage of resources;
– Difficulty in achievement of organizational objective;
and
– Duplication of activities.
 PRINCIPLE: AUTHORITY AND
RESPONSIBILITY
• Authority is the power to give orders and get it obeyed
or in other words it is the power to take decisions.
• Responsibility means state of being accountable or
answerable for any obligation, trust, debt or something
or in other words it means obligation to complete a job
assigned on time and in best way.
• Authority and responsibility are closely related and this
principle states that these two must go hand in hand. It
means that proper authority should be delegated to
meet the responsibilities.
• A match should be there between these two because of two
main reasons:--
– Firstly, if a person is given some responsibility without sufficient
authority he can’t perform better, and also could not accomplish the
desired goal.
– Secondly, if there is excess authority being delegated to an individual
without matching responsibility then the delegated authority will be
misused in one way or the other.
• Positive impacts of this principle:
– No misuse of authority.
– Helps to complete job effectively and efficiently.
– Individuals can be held accountable.
– Systematized and effective achievement of organizational objectives.
• Consequences of violation of this principle:
– Misuse of authority.
– Responsibility can’t be discharged effectively.
– No one can be held accountable.
– Conflicts between management and employees.
 PRINCIPLE: DISCIPLINE
• Discipline means obedience, respect for authority, and
observance of established rules.
• Fayol has emphasized that a sense of discipline should be
present in all employees of the organization at all level so that
the organization can perform and achieve its objectives in the
best possible way.
• For maintaining discipline in the organization managers should
consider:
– Clear explanation of the rules;
– Effective supervision;
– Reward system on better obedience;
– Possible provision for penalty on non obedience.
 PRINCIPLE: INITIATIVE
• ‘Initiative’ means to start, to begin or to instruct in a project.
Here, in this principle fayol suggested that each employee should
be given an opportunity to take some initiative in framing the
functional plan as well as in determining the steps to be taken at
each level for proper execution of the plan.
• Positive impacts of this principle:
– Timely achievement of objectives when they are set in consultation
with employees.
– Develops sense of belongingness in employees.
– Ensure maximum participation of employees.
• Consequences of violation of this principle:
– Employees will feel that the plans and goals are not for their benefit
and thus will not work with full potential.
– Lacks maximum participation from employees.
– Conflict between the management and employees.