management There are two ways to interrelate managerial functions in the chemical industry; the possibility of using a combination of both systems is frequently overlooked bar WakteF mnPechmaMc
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survey in a chemical plant revealed that most employees in supervisory capacity had no clear conception of what constitutes interrelating managerial functions. Some believed it to be the cooperation needed among various departments to work harmoniously together, whereas others thought i t referred to the assignment of responsibilities and/or the establishment of flow of work, A few expressed the opinion that i t is a meaningless term, and one executive even went so far as to state that interrelating managerial functions is simply giving employees the right to interfere with each others activities. The writer does not mean to imply that these misunderstandings prevail throughout the chemical industry. I n fact, he has reason to believe that overemphasis on line organisation and the failure of management to acquaint supervisory personnel with functions other than their own, has resulted in this erratic thinking. Nevertheless, he has encountered situations where chemists and chemical engineers who wanted to talk about the interrelation of managerial functions had no clear conception of it or were not conscious of the fact that they themselves had not done their part in attaining a proper interrelation of managerial functions. Interrelating managerial functions means dovetailing sales production, and finance so that they form a harmonious whole. Any effort toward this goal can be called interrelating managerial functions-for example, management may decide to manufacture for stock or may want to reduce prices in offseason. It is obvious that swift interchange of information between sales and production department is needed for the proper execution of such policies. The person assigned to the task of bringing about the swift interchange of information is interrelating sales and production. It is important to be cognicant of the fact that interrelating means establishing a closer relationship between two principal managerial functions and not creating soms RECENT
November 1951
thing entirely new. It must be realized that managerial functions, such as sales, production, and finance are related to each other by their very nature and that there exists always a working relationship between them regardless of how poor it may be. Thus, the interrelation of managerial functions should always be considered as a refinement and not as an addition to established managerial practices. It is also important to keep in mind that every managerial function must retain its identity at all times and that the assignment of work from one group to another is not interrelating, but is changing the principal structure of an organization. Interrelating means making better use of plant facilities and feeding information quickly and accurately to people or departments, where they can be utilized to advantage, It means obtaining information from original sources instead of arriving at conclusions by complicated calculations or by means of recordings and statistics which are only duplications of information available from ib logical origin. Top management frequently talks about “interrelating” in the sense of coordinating income and expenditures for all the activities of an organiaation. In this respect, “interrelating” means establishing the basis for a coordinated budget. Technically the interrelation of managerial functions can be accomplished in two ways: The most common approach is to establish a closer relationship between various functions in an organisation by setting up the machinery whereby a n exchange of views concerning mutual problems will lead t o one function supporting the other. This is usually referred to as the cooperative plan. Another way is to assign the task of interrelating the managerial functions to a Specialist or to a department which rtcts in s t d capacity to top management. The cooperative plan is less expensive and haa the advantage that executives are given the opportunity ta solve their own problems. Thus, if it works, the
cooperative plan is preferred to assigning the job to an outsider. A number of chemical manufacturers who have tried the cooperative plan, however, have found that executives in charge of principal managerial functions are inclined to be overly concerned with their own interests and unwilling to put up with inconveniences or changes which affect other departments or the organization as a whole. The writer does not think that this is necessarily true. The reason executives sometimes seem uncooperative is failure on the part of management to set up the necessary machinery for discussion of this problem. Regular conferences for the purpose of discussing current problems are not well suited for discussions of interrelating managerial functions: It is often difficult to define exactly where a current problem ends and a problem involving a policy begine. Mixing these problems almost i n d ably results in confusion. Furthermore, experience shows that preference is always given to solving current problems and that there never seems to be sufficient time to discuss the interrelation of managerial functions in an ordinary conference. The writer -not see anything wrong with a cooperative plan if the following conditions are met: The purpose of interrelating the managerial functions must be properly explained to executives. It should be made clear that this is an assignment and not a general appeal for closer cooperation among executives. Management should give general directions and, if possible, examples of how proper inteIc relation can be achieved. It also should point out that this assignment is not a job to be handed down to assistants and that i t expects periodic progress reports. Above all, management should give executives sufficient time to devote to this assignment and should form a committee (Continued on page 1N A )
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Plant Management in which all the major functions of the organization are properly represented. This precludes any advantage to persons in charge of principal managerial functions in favoring decisions. Preferably, the committee should be headed by ihe head of the organization. If this is not feasible, an executive who works in staff capacity should be selected as chairman. It may be advantageous to establish the committee in an advisory capacity rather than an authoritative capacity to forestall any inclination to assume top managerial responsibilities. Another point worth considering is that managerial functions do not always carry the same weight in every organization. There are two reasons for this: First, the person who is most influential in establishing company policies is not necessarily the one who directs the most important function. Secondly, two functions may be under the direction of one executive and, in the eyes of management, may lose their distinctive characteristics; one such function may also become subordinated t o the other. Where this condition exists, cooperative interrelation seldom works. SpecZIUet plan In favor of the “specialist” plan, the interrelation of managerial functions requires a specialized knowledge in establishing methods and systems and an over-all knowledge of techniques employed throughout a chemical plant. Executives generally are not too familiar with the details of the operation of the various systems and are thus inclined to make decisions which may not fit and/or facilitate the proper execution of established practices. Furthermore, top executives are not necessarily best suited for working out the details of new arrangements which are neceyary to convert an idea into a workable system. They usually leave the details to the people working for them who do not have the authority nor in many instances the ability to convert an idea into a workable system. The employment of a specialist or persons trained along the lines of industrial engineering, however, also has certain drawbacks. Having no authority over the functions they are trying to interrelate, they have no choice but to spend a great part of their time trying to sell (Continued on page 199 A ) 120 A
ideas or to interest managenient i n a complete plan where people affected by it have no opportunity to voice objections or make recommendations. In short, they either waste time or are accused of trying to force new systems. In any event, interrelation of managerial functions attempted on this basis seldom is acceptable to executives. Middle of the road approaelr A “middle of the road” policy, which is employed by many chemical concerns, is to form a top executive coiiimittee which has a t its disposal the services of a method-and-system engineer or industrial engineering tlepartment, depending on the size of the organization. These people woi,k directly for the committee but h:iye neither authority nor sufficient influence with tog management to recoiiimend changes that are not approved by the majority of executives in charge of principal managerial functions. This approach has the advantage that people working on the interrelation of managerial functions have fewer difficulties in investigating the status quo, and that their recommendations, once approved by the executives, will probably be accepted by top management. Many executives in the chemical industry claim that good budgeting or a good standard cost system automatically brings about the propel interrelation of top managerial functions. This is true. Many chemical concerns, however, do not have sufficient accumulated experience in costing for the establishment of a coordinated budget or standard cost system and thus must interrelate their managerial functions by other means. Although the principal managerial functions are sales, production, and finance, important subdivisions such as purchasing, personnel, cost accounting, and warehousing are frequently also called managerial functions. The term managerial functions should not be confused with ‘Lfunctionalization” which means a subdivision of labor that results when similar groups of activities such aa purchasing and personnel are separated from regular ‘‘line activities” and placed under specialized direction and control. Correspondence concerning thin column will be
forwarded promptly if addrewed to the author. c/c Editor, INnUsTRIAL A N D ENQIVEEWNG CHBMXST~T, 1155-16th St., N.W., WarbinKtm6, D.c.
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