The Industrial Management Model

The industrial management model is an approach to

organizing a firm that focuses on revenues and operating
costs and ignores the roles personnel play in generating
customer satisfaction and sustainable profits. The industrial
management model, which has its roots in the manufacturing
sector, is still employed today by many service organizations.
Organizations that follow the industrial management model
believe that1:
(1)
(2)

Location strategies, sales promotions, and advertising

drive sales revenue; and
Labor and other operating costs should be kept as low
as possible.

The industrial management model focuses on revenues and

operating costs. This model ignores (or at least forgets) the
role personnel play in generating customer satisfaction and
sustainable profits. Hence, there is no empowerment of
employees and pay lowest possible wages. Companies using
this model try to reduce the human component through
automation. They operate with the same staffs for long hours.
Organizations following the industrial model believe that
employees are indifferent, not very skilled, do not have the
right attitude and motivation and therefore cannot be
empowered for complex tasks. They would prefer to depend
on automation and technology. There is therefore greater
dependence on senior personnel and less on front-line
personnel. Many service operations that compete on price
follow this model. Some of the examples of this model can be
found in the transportation sector of Nepal which employ
child labour and use fewer drivers in long routes.

Hoffman, K.D. and Bateson, J. E. G. (2008). Ibid., pp. 414.