Industrial Organization

and Human Relations

Reference: Industrial Sociology by Sharma & Pandey
(Chapter-9)
 Industrial Organization

 The word organization comes from the word organ. It

means a part or limb of an animal or man. Thus brain,
heart, liver, arms, legs etc. are the various organs of man.
The man or an animal as a whole is said to be structure
and organization.
 A group of individuals together working for a definite
common aim is called an organization.
 The mutually and togetherness found in an group of
persons engaged in industrial production is called
industrial organization.
 Basic Elements of Organization

Generally three elements are considered basic for any

organization.
 Firstly, an organization must have numerous organs or
components.
 Secondly, adjustment between various organization.
Adjustment from staff to managing director.
 Thirdly, another basic element of an organization is that it
should be suited to purposive activity. This means that
all elements of an industrial organization should be such
as will contribute to the aim specified for it. For the
attainment of different aims different types organizations
are required.
 Kinds of organization
Organizations are of two kinds: Spontaneous or informal organization and
Formal organization.
 Informal organization: The informal/ spontaneous organizations are
natural and these are not formed for any particular purpose. The
organization in the human, animal and vegetable kingdom are the
example of informal organization.
 Formal organization: A formal organization is a result of deliberate
efforts and it brought together for some specific purpose. It is
systematic and it works under specific rules.
Industrial organization is formal organization as it formed for a specific
aims. But Industrial organization contains within in it both formal and
informal association.
 Departments of Formal Organization

 Linear Organization: once an industry assumes gigantic proportions it

requires a hierarchical system which can effectively control and
manage the whole organization. This hierarchy directs the whole
organization towards its predetermined ends. This system is known as
linear organization.
 Functional Organization: The industrial organization have a variety of
functions. For convenience each of these functions entrusted to one
department. This system of departmentalizing of functions is known
as functional organization.
 Stuff Organization: Organization of employees in various
departments.
Various levels of Industrial Organizations

Classification of hierarchy according to status and position of the organization.

 At top wrung are occupied by founder of the organization-
1. Chairman
2. Managing director
3. Executive director
4. General manager
5. Works manager
6. Regional sales manager
 Next to top wrung officials are middle wrung officials. The main job of this class officials is
to implements the directions comes from the top wrung officials. These officials are usually
specialist in the field.
 The third wrung of the industrial management is occupied by the supervisory staff. Their
position is just above the clerical staff.
 Principles of industrial organizations
Henry Fayol has has laid down fourteen principles for efficient industrial management.
These are-
1) Division of work
2) Authority and responsibility
3) Discipline
4) Unity of command
5) Unity of direction
6) Subordination of individual interests to general interest
7) Remuneration to personnel
8) Centralization
9) Scales chain
10) Order
11) Equity
12) Stability of tenure of personnel
13) Initiative
14) Espirit de corps
 Informal Organization

There are four types of informal organization. These are-

 The first type of informal organization is the totality of members of
the organization bearing with each other certain relation at personal
level.
 The second type of informal organizations are those which spring
upon on common taste, interests or habits of some persons. For
example; we have informal societies based on religion, region and
language.
 The third type of informal organizations are represented by persons
doing similar jobs in an industry.
 The fourth type of informal organizations are very few. Such as a
poetry club in an industry.
Importance and Necessity of
Informal Organization
 Mutual cooperation among the staff
 Harmony in the job
 Strikes and lock-out are minimized
 Enjoyment in the workplace
 Increase in productivity
 Human Relation In Industry

Condition of workers in older days specially at British period:

 Workers regarded as objects no better than a machine
 Workers used as slave
 Workers were often turned out without any prior notice and compensation
 Pregnant workers were often turned out of work
 Working conditions were so deplorable
 Deprivation of appropriate remuneration
 Long working hour
 No promotion, no incentives
 Call for Human Behavior and
Decent Conditions
 Propagation of socialist and democratic principles
 Formation of labor union
 Workers raised their voice
 Thinkers and socialist suggestions for the mutually
benefits of workers and the owners.
 Human Relation in
Industrial Administration
In industry, human relations are in evidence two sphere; in that of administration, and in
that of welfare.
Human relation in administration:
 Good relation between authority and the worker
 Laborer is not a machine
 Good work should be praised
 Proper rules of appointment and promotion
 Position to be permanent
 Policy should be like that a worker is bound to be honest
 Increment of salary
 Working condition should be improved
 Tactful handling of strike and lock-out
 Welfare in Industry

 Human services, conveniences and pleasures should be available to

the worker
 Facilities of housing, education, health, recreation should be
adequate
 Maternity facilities should be available
 Provident fund benefits, pension and life insurance should be assured
 Special help should be assured when a worker become ill
 Advantages of welfare activity

 Improvement of Efficiency and productivity

 Improve the peace and enthusiasm of the worker
 Profit of the firm be increased
 Percentage of absentee falls
 Quality and quantity of production improved
 Migration of worker decreased
 Unrest among worker decreased
 Strike and lock-out falls