TERMS OF REFERENCE AND DEFINITIONS
At its meeting held on the 27th August, 1960, the All India Board of Technical Studies in Management set up a Committee under the Chairmanship of Dr. A. Ramaswami Mudaliar to assess the requirements of managerial personnel for the country's development programme in the private and public sectors with the following membership :
Dr. A. Ramaswami Mudaliar Chairman
Dr. V. K. R. V. Rao Member
Dr. M. V. Mathur Member
Shri R. Prasad Member
Shri Pitambar Pant Member
Shri K. Khosla Member
Sri Y. A. Fazalbhoy Member
Prof. A. Das Gupta Member
Shri M. V. D. Nair Member Secretary
The Committee held four meetings, two at New Delhi, on 23rd September, 1960, and 10th June, 1962, and two at Calcutta on 11th December', 1963 and 3rd September, 1964. It has taken about four years to finalise the Report. This was primarily due to the fact that this is the first time that an effort is being made to estimate the requirements of managerial personnel. The Committee had therefore to devise its own norms and yardstick for assessment. The first questionnaire though it yielded excellent results in regard to Industry proved unsuitable for Commerce, Trade, Banking and other sectors. A fresh questionnaire had to be devised for these categories and this took time. Further one year was almost wasted, as following the declaration of Emergency no work could be done.
In an industrial establishment "Management functions" are exercised in varying degrees from the lowest supervisor to the topmost executive. Supervisory personnel carrying out routine technical operations fell outside the scope of the work of the Committee. The term 'Manager' could better be defined in terms of his functions and position of responsibility. The major managerial functions are generally as under :
1. General Management 2. Production 3. Sales 4. Research and Engineering 5. Finance 6. Law 7. Personnel 8. Public Relations
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9. Traffic 10. Office Management 11. Purchasing 12. Plant Management
A Manager is, therefore, a person who carries out one or more of the above functions.
The production functions may be stated to have the following content in general :
1. Design and construction of plants. 2. Planning and justifying plant capital expenditures 3. Supervision of production orders received. 4. Promise of delivery schedule of manpower equipment and material flow, coordination with sales. 5. Planning of the prediction flow and assignment of orders. 6. Supervision of Production. 7. Development of production controls, such as :
(a) Coordination with marketing and engineering. (b) Quality control. (c) Control or over-all production, machine and manpower perfor- mance, purchasing, design of plant and product, plant maintenance, inventory, industrial relations, research, traffic, safety, engineering and industrial engineering.
The content makes it clear that managerial training is essential for production personnel.
In pursuance of the decision taken at the first meeting, letters were sent to important industrialists, both in the public and private sectors, Managing Directors of Banks and commercial organisations, to obtain information necessary to assess the requirements of managerial personnel for the country's planned development. A copy of the letter and the questionnaire on managerial personnel enclosed therewith and the list of persons addressed may be seen at Appendix 1. The letter conveyed that the purpose of the enquiry was to assess the requirements of managerial personnel who may be trained in the theory and practice of' management, with a view to determine the extent of facilities trial should be organised in the country for the training of such personnel. To enable this to be done, information was sought on the existing managerial personnel in the following fields of management :
(a) Technical Management comprising Production Management, Development Management and Transport Management.
(b) Commercial Management comprising Distribution Management, Sales Management and Financial Management,
(c) General Management comprising Office Management, Personnel Management and General Management.
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It was also pointed out that the Board of Technical Studies in Management had organised courses of study in Business Management and Industrial Management for persons working in industrial and commercial establishments who were graduates in Engineering, Science and Arts and who had a minimum of two years' requisite supervisory experience. Suggestions were also sought as to additional centres which should be organised for providing facilities for training in management. Comments too were invited on the steps to be taken to promote management education.
At Appendix II may be seen the summary of the replies received, industrywise. The summary gives information about the total number of persons employed in the industry, number of managerial personnel classified under production management, general and commercial management and percentage of managerial personnel to the total persons employed. It would be seen that these percentages vary very widely. This is due to the fact that the relative importance of requisite abilities of managerial personnel in industrial concerns generally varies with the size of the concern. The great French Industrialist, Henry Fayol, has drawn up a chart of the requisite abilities in the various types of concerns. These are as follows :
Requisite Abilities
Mana- Tech- Com- Finan- Securi- Account- Total
gerial nical mer- cial ty* ing Evalua-
cial tion
% % % % % % %
One-man business 15 40 20 10 5 10 100
small firm 25 30 15 10 10 10 100
Medium-sized firm 30 25 15 10 10 10 100
Large firm 40 15 15 10 10 10 100
Very large firm 50 10 10 10 10 10 100
State enterprise 60 8 8 8 8 8 100
From this table the following conclusions may be drawn
(1) The most important ability of the head of the small industrial company is technical ability.
(2) In medium-size industries, managerial ability increases and that of technical ability declines.
(3) In large-scale industries the managerial coefficient increases at the expense of the rest, which tend to even out, approximating up to one-tenth of the total evaluation.
Apart from the size, there are other factors which decide the number of managerial personnel in a concern. Two of these are: (1) competitive nature of the product; (2) end use of the commodity.
In the case of a competitive commodity, there are several establishments producing the same goods and large number of managerial personnel will have to be employed for the proper Organisation of sales and services. Consumer industries employ a larger number of managerial personnel than industries manufacturing raw materials and chemicals required for industry itself.
* Safeguarding property, avoiding social disturbances in the broad sense and any influence endangering the life of the business.
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An important factor that has to be taken note of in estimating the facilities required for the training of managerial personnel is that even if no facilities are provided, the, industrial targets of production aimed at and the expansion of trade, commerce, construction and transportation will not be physically affected though efficiency would be markedly less. The fundamental principles of Organisation and administration which are common to different types of activities can be taught and should be taught. They can also be laboriously acquired by individuals by a process of trial and error. In Indian Industry at present, it is by this trial and error method that principles of management are imbibed by the large majority of persons in managerial positions. There are many countries in the world where even today there are no specially organised educational facilities for training in management and yet these countries have reached commendable industrial levels. The management movement in the country is in its infancy and better Organisation of industrial production and business efficiency would ultimately depend on the success of the movement.