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MANagement is…
ENGINEERING MANAGEMENT
Prepared by:
PROF. RENE D. ESTEMBER
May 6, 2019
Engineering Management is…
• The process of designing and maintaining an
environment in which, individuals, working together
in groups, efficiently accomplish organizational
goals/objectives.
Management applies to any kind of organization.
It applies to all managers at all organizational levels.
The aim of all managers is the same; to create a
surplus.
Managing is concerned with productivity, which
implies effectiveness and efficiency.
Functions of Management
• Planning & Decision-Making
 Involves selecting goals and objectives, as well as the
actions to achieve them; it requires decision-making, that is
choosing the “best” from among alternatives.
• Organizing
 Involves establishing an intentional structure of roles for
people to fill in an organization.
 The process of allocating and arranging human and non-
human resources so that plans can be carried out
successfully.
• Staffing
 Involves filling, and keeping filled, the positions in the
organization structure.
 Process by which managers select, train, promotes, and
retires subordinate.
• Getting things done through people.
• The process of achieving organizational goals by engaging in
the four major functions of planning & decision-making,
organizing & staffing, directing/leading, and controlling.
• Identifying a “force”/group of people whose job is to direct
the effort and activities of other people towards a common
organizational objective.
• The performance of conceiving and achieving desired results
by means of group effort consisting of utilizing resources, that
will determine the success and failure of an organization.
Productivity, Effectiveness, and Efficiency
Productivity is an index that measures output (goods
and services) relative to the input (labor, materials,
energy, and other resources) used to produce them.
Effectiveness means the capability of producing an
effect. (doing the "right" things)
Efficiency is a measure of how well a certain aspect is
performing. (doing the things “right”)
Functions of Management
• Directing/Leading
 Influencing people so that they will contribute to
organizational and group goals.
• Controlling
 Measuring and correcting individual and organizational
performance to ensure that events conform to plans
 Facilitates the accomplishment of plans.
 The process of regulating organizational activities so that
actual performance conforms to expected organizational
standards.
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Management Skills
• The cognitive ability to see the organization as a
Conceptual
Skill
whole and the relationships among its parts.
• The ability to work with and through other people
Human Skill and to work effectively as a group member.
• The understanding of and proficiency in the
Technical
Skill
performance of specific tasks.
Is Management a Science or an Art?
Definitions according to Webster's College
Dictionary:
Art – “skill in conducting any human activity”
Science – “any skill or technique that reflects a
precise application of facts or a principle”
The Evolution of Management Theory
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Managerial Levels
Strategic Managers who are ultimately responsible
TOP for the entire organization. Typical titles include
CEO, COO, CFO, “President”, “Executive Vice
President”, “Executive Director”, “Senior Vice
President”, or “Vice President”.
Tactical Managers located beneath the top levels
MIDDLE of the hierarchy who are directly responsible for
the work of managers at lower levels. Titles
include “Manager”, “Director of”, “Chief”,
“Department Head”, and “Division Head”.
Operational Managers at the lowest level of
FIRST-LINE the hierarchy who are directly responsible for
the work of operating (non-managerial)
employees. Often have titles that include the
word “Supervisor”.
The Evolution of Management Theory
• Began in the industrial revolution in the late 19th
century as:
- Managers of organizations began seeking ways to
better satisfy customer needs.
- Large-scale mechanized manufacturing began to adopt
small-scale craft production in which goods were
produced.
- Social problems were developed in the large groups of
workers employed under the factory system.
- Managers began to focus on increasing the efficiency
of the worker-task mix.
The Evolution of Management Theory
• Adam Smith (18th century economist)
– Observed that firms manufactured pins in one of
two different ways:
• Craft-style - each worker did all steps.
• Production - each worker specialized in one step.
– Realized that job specialization resulted in much
higher efficiency and productivity
• Breaking down the total job allowed for the division of
labor in which workers became very skilled at their
specific tasks.
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The Evolution of Management Theory
• Frederick Winslow Taylor
– “Father "of Scientific Management (systematic
study of the relationships between people and
tasks for the purpose of redesigning the work
process for higher efficiency”) in the late 1800’s to
replace informal rule of thumb knowledge.
– Taylor sought to reduce the time a worker spent
on each task by optimizing the way the task was
done.
The Evolution of Management Theory
• Frank and Lillian Gilbreth
– Refined Taylor’s work and made many
improvements to the methodologies of time and
motion studies.
– Time and motion studies
• Breaking up each job action into its components.
• Finding better ways to perform the action.
• Reorganizing each job action to be more efficient.
– Also studied worker-related fatigue problems
caused by lighting, heating, and the design of
tools and machines.
The Evolution of Management Theory
Weber’s Principle of Bureaucracy
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The Evolution of Management Theory
Taylor’s Four Principles of Scientific Management
1. Scientifically study each part of a task and develop the
best method for performing it.
2. Carefully select workers and train them to perform the
task using the scientifically developed method.
3. Cooperate fully with workers to ensure that they use
the proper method.
4. Divide work and responsibility so that management is
responsible for planning work methods using scientific
principles and workers are responsible for executing
the work accordingly.
The Evolution of Management Theory
• Max Weber
–Developed the concept of bureaucracy
as a formal system of organization and
administration designed to ensure
efficiency and effectiveness.
The Evolution of Management Theory
Weber’s Five Principles of Bureaucracy
1. Authority is the power to hold people accountable for their
actions.
2. Positions in the firm should be held based on performance,
not social contacts.
3. Position duties are clearly identified so that people know
what is expected of them.
4. Lines of authority should be clearly identified such that
workers know who reports to who.
5. Rules, standard operating procedures (SOPs), and norms
guide the firm’s operations.
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The Evolution of Management Theory The Evolution of Management Theory

• Henri Fayol Fayol’s 14 Principles of Management

1. Division of work – divide work into specialized tasks
and assign responsibilities to specific individuals.
– Synthesized various tenets or principles of 2. Authority – delegate authority along with
organization and management responsibility.
3. Discipline – make expectations clear and sanction
violations.
– He published "The Principles of Scientific 4. Unity of command – each employee should be
Management" in the USA in 1911 assigned only to one supervisor.
5. Unity of direction – employees’ efforts focused on
achieving organizational objectives.

The Evolution of Management Theory The Evolution of Management Theory

6. Subordination of individual interest to the general
interest – the general interest must predominate.
7. Remuneration – systematically reward efforts that
supports the organization’s direction.
8. Centralization – determine the relative importance
of superior and subordinate roles.
9. Scalar chain – keep communications within the
chain of command.
10. Order – order jobs and material so they support
the organization’s direction.
11. Equity – managers should be kind and fair to their
subordinates .
12. Stability of tenure – management should provide
orderly personnel planning and ensure that
replacements are available to fill vacancies.
13. Initiative – employees who are allowed to originate
and carry out plans will exert high levels of effort .
14. “Esprit de corps” – promoting team spirit will build
harmony and unity within the organization.

Approaches to Management Approaches to Management

1. Empirical or Case Approach 5. Re-engineering Approach
 Studies experience through cases.  Concerned with fundamental re-thinking, process analysis, radical
 Identifies successes and failures. re-design, and dramatic results.
2. Contingency or Situational Approach 6. Systems Approach
 Managerial practice depends on circumstances (i.e., a contingency or a  Systems have boundaries, but they also interact with the external
situation). environment; that means organization are open systems.
 Contingency theory recognizes the influence of given solutions on  Recognizes the importance of studying interrelatedness of planning,
organizational behavior patterns. organizing, and controlling in an organization as well as in the many
3. Mathematical or “Management Science” Approach subsystems.
 Sees managing as mathematical processes, concepts, symbols, and models. 7. Socio-technical Approach
 Looks at management as a purely logical process, expressed in  Technical system has a great effect on the social system (personal
mathematical symbols and relationships.
attitudes, group behavior).
4. Decision Theory Approach
 Focuses on production, office operations, and other areas with close
 Focuses on the making of decisions, persons or groups making decisions, relationships between the technical system and people.
and the decision-making process.
 Some theorists use decision making as a springboard to study all enterprise
activities. The boundaries are no longer clearly defined.

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Approaches to Management Approaches to Management

8. Group Behavior Approach
 Emphasizes behavior of people in groups.
 Based on sociology and social psychology.
 Primarily studies group behavior patterns.
 The study of large groups is often called organizational behavior.
9. Interpersonal Behavior Approach
 Focuses on interpersonal behavior, human relations, leadership, and
motivation.
 Based on individual psychology.
10. Cooperative Social Systems Approach
 Concerned with both interpersonal and group behavioral aspects
leading to a system of cooperation.
 Expanded concept includes any cooperative group with a clear
purpose.
11. McKinsey’s 7-S Framework
 The seven S’s are (1) strategy, (2) structure, (3) systems, (4) style, (5)
staff, (6) shared values, and (7) skills.
12. Total Quality Management Approach
 Focuses on providing dependable, satisfying products and services
(Deming) or products or services that are fit for use (Juran), as well
as conforming to its quality requirements (Crosby).
13. Management Process or Operational Approach
 Draws together concepts, principles, techniques, and knowledge
from other fields and managerial approaches.
14. Managerial Roles Approach
 Original study consisted of observations of five chief executives.
 On the basis of this study, ten managerial roles were identified and
grouped into interpersonal, informational, and decision roles.

The Managerial Roles Approach: 10 Specific Managerial Roles

Interpersonal Roles
• Managerial Roles
1. Interpersonal Roles – grow directly out of the
authority of a manager’s position and involve
developing and maintaining positive relationships Role Description
with significant others.
Figurehead Performs symbolic duties of a legal
or social nature.
2. Informational Roles – pertain to receiving and
transmitting information so that manager can serve Leader Builds relationships with
subordinates and communicates
as the nerve centers of their organizational units.
with help and information.
Liaison Maintains networks of contacts
3. Decisional Roles – involve making significant decisions outside work unit who provide help
that affect the organization. and information.

10 Specific Managerial Roles 10 Specific Managerial Roles

Informational Roles Decisional Roles

Role Description
Monitor Seeks internal and external
informational about issues that can
affect organization.
Transmits information internally
Disseminator
that is obtained form either internal
or external sources.
Spokesperson Transmits information about the
organization to outsiders.
Role Description
Acts as initiator, designer, and encourager of
Entrepreneur change and innovation.
Takes corrective action when organization
Disturbance Handler faces important, unexpected difficulties.
Distributes resources of all types including
Resource Allocator
time, funding, equipment, and human
resources.
Negotiator Represents the organization in major
negotiations affecting the manager’s areas
of responsibility.

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Management Styles
• Administrators
 Administrators look to company rules and regulations for
solving all problems. They live by the book and are usually
very good employees. They show total loyalty to the
organization and have probably been with the company for
many years.
 Administrators are usually not very good communicators,
using the official company channels for all
communications, which are often limited to one level
upwards and downwards.
 They are not good in resolving conflict, looking to company
rules for resolving these. In spite of their rather
mechanistic approach.
 They are generally respected by their staff, and by peers,
for their organizational loyalty and knowledge.
Management Styles
• Climbers
 These manager are driven by extreme personal ambition
and will sacrifice everything, including self and family, to
get to the top of the corporate ladder.
 They want to achieve and to be seen to have achieved,
especially by those in a superior position.
 Climbers will pursue personal advancement by fair means
or foul. However, they become demotivated if this does
not show quick results, and this can eventually lead to
stress.
 Self interests come before those of the organization, and
peers will be fought in order to gain an advantage and to
build an empire.
 Status is important but only as a sign of seniority.
Management Styles
• Supporters
 Supporters maintain a balanced view about the world, the organization,
subordinates, and themselves.
 They are usually experience managers who are knowledgeable in
management techniques and apply them where they can.
 Supporters work through people in achieving their aims.
 They are good at delegation and develop their subordinates by giving them
responsibility.
 The people working under them are highly motivated.
 Supporters’ personal technical knowledge is usually lacking, but this
compensated for by the support they themselves receive from the specialists
within their department.
 Supporters are good facilitators and are very good in managing change.
 They recognize achievement and reward it.
 They tend to be loners and do not mix well with peers.
 This means that they can often miss out on information from the grapevine, so
that they are not always well-briefed on organizational matters.
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Management Styles
• Time Servers
 These are generally older mangers who have lost interest in their job
and environment, and are marking time until retirement or moving to
another job.
 They take all necessary action to avoid stress, and maintain a low
profile within the company.
 Although these mangers are not generally lazy, their low motivation
means that they do the minimum amount of work needed to hold
down a job.
 Decisions are avoided since they could lead to mistakes.
 Personal status is very important to them.
 Time servers usually have good management experience, and if
motivated can become a very valuable asset to the organization.
 They often consider themselves to be “father or mother figures”.
 They understand people and can build an effective team if they try.
 They recognize achievements in others and are ready to acknowledge
them.
Management Styles
• Generals
 This is usually a younger person who exhibits lots of energy.
 The general likes to rule and manipulate power, but is
achievement oriented: power is used to get tasks done.
 Generals work extremely hard, driving themselves and those
around them.
 Generals are sociable and mix well at all levels. They usually get
their way with peers by overwhelming, although peers can
resent this if it is done too often.
 Status is important to generals, but for the luxury associated
with it, not as a symbol of seniority.
 They are strong-willed individuals, often with the same
characteristics as a self-made entrepreneurs.
 Usually they are optimistic about the future, sometimes
wrongly.
Management Styles
• Nice Guys
 These managers are usually weak-willed and are more
interested in being liked, by peers and subordinates, than
in achieving targets.
 They do not criticize their subordinates, even when they
are poor performers, and may in fact support too much, so
unconsciously retarding their development.
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Planning…
• The most fundamental and basic of all management
function
PLANNING AND • Involves a rational approach in selecting and
DECISION-MAKING achieving goals and objectives and deciding on the
actions to achieve them.
• Strongly implies managerial innovation.
• Bridges the gap from where we are and to where we
want to go.

Close Relationship of Close Relationship of

Planning and Controlling Planning and Controlling
• Planning and Controlling are inseparable.
– They are the Siamese Twins of Management. • Any attempt to control without plans is
New Plans

meaningless, since there is no way for people

Planning
Implementation
Controlling:
Comparing No undesirable to tell whether they are going where they
of plans plans with deviation from
results plans want to go (the result of the task of control)
unless they first know where they want to go
(part of the task of planning).
Figure 1:
Corrective action • Plans thus furnish the standards of control.
Close Relationship of Planning and Controlling

Types of Plans Developing a Vision

1. Visions • Begins with thinking strategically
 A picture of the state of the desired outcome in • About the firm’s future makeup;
the future usually in the long term from current • Forming vision of firm’s future in 5-10 years
time. • Task is to:
 It answers the question “where do we want to • - Inject sense of purpose into firm’s activities;
go?” • - Provide LONG-TERM DIRECTION;
 It is a plan, a goal, an objective. It should be • - Give the firm STRONG IDENTITY;
specific, measurable, attainable, realistic and
• - Decide “WHO we are, WHAT we do, & WHERE we are
time-bound. - headed”

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NIKE – vision statement

• "To bring inspiration and innovation to every

VISION STATEMENTS athlete in the world"
FAMOUS COMPANIES

AMAZON.COM – vision statement FORD – vision statement

• “To be earth's most customer centric • “To become the world's leading Consumer
company; to build a place where people can Company for automotive products and
come to find and discover anything they services.”
might want to buy online.”

BOEING – vision statement SONY – vision statement

• “Become the dominant player in commercial • To continue to be a leading manufacturer of

aircraft and bring the world into the jet age.” audio, video, communications, and
information technology products for the
consumer and professional markets.

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MICROSOFT – vision statement GOOGLE – vision statement

• To create experiences that combine the magic • To develop a perfect search engine.
of software with the power of Internet
services across a world of devices.

MC DONALD’S – vision statement STARBUCKS – vision statement

• “To be the world's best quick service • "To establish as the premier purveyor of the
restaurant. Being the best means providing finest coffee...”
outstanding quality, service, cleanliness, and
value, so that we make every customer in
every restaurant smile."

DISNEYLAND – vision statement Types of Plans

2. Purposes and Missions

 Identifies the basic purpose or function or tasks of the

organization or any part of it.

 In every social system, enterprises have a basic function or task

• To be the happiest place on earth. assigned to them by society.

 For example:

 the purpose of a business generally is the production and distribution of goods

and services.

The purpose of the courts is the interpretation of laws and their

application.

The purpose of a university is teaching, research, and providing

services to the community.

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COCA-COLA – mission statement
• To refresh the world...
• To inspire moments of optimism and
happiness...
• To create value and make a difference.
AMAZON.COM – mission statement
• To continue to offer quality products and
services using the best technology available
and at a reasonable price.
STARBUCKS – mission statement
• to inspire and nurture the human spirit – one
person, one cup and one neighborhood at a
time.
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NIKE – mission statement
• To lead in corporate citizenship through
proactive programs that reflect caring for the
world family of Nike, our teammates, our
consumers, and those who provide services
to Nike"
MC DONALD’S – mission statement
• "be our customers' favorite place and way to
eat."
DISNEYLAND – mission statement
• To make people happy.
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Types of Plans
2. Goals or Objectives
 Represent not only the end point of planning,
but also the end toward which organizing,
directing/leading, and controlling are aimed.
SPECIFIC FINANCIAL CORPORATE OBJECTIVES
• McCORMICK & COMPANY
• Improve returns from each of our existing operating groups.
• Achieve a 20% return on equity.
• Achieve net sales growth rate of 10% per year.
• Maintain an average earnings per share growth rate of 15%
per year.
TYPES OF OBJECTIVES NEEDED by an Organization:
• Strategic Objectives
Outcomes that will result in greater
competitiveness & stronger long-term
market position
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TYPES OF OBJECTIVES NEEDED by an Organization:
• Financial Objectives
Outcomes that relate to improving
firm’s financial performance
SPECIFIC FINANCIAL CORPORATE OBJECTIVES
• QUAKER OATS COMPANY
 To achieve return on equity at 20% or above, “real” earnings
growth averaging 5% or better over time, be a leading
marketer of strong consumer brands, and improve the
profitability of low-return businesses or divest them.
SPECIFIC STRATEGIC CORPORATE OBJECTIVES
• NIKE
 Protect & improve Nike’s position as the number one athletic
brand in America.
 Build a strong momentum in growing fitness market.
 Intensify the company’s effort to develop products that
customers need and want.
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SPECIFIC STRATEGIC CORPORATE OBJECTIVES Types of Plans

• ATLAS CORPORATION 3. Strategies

 To become a low-cost, medium-size gold producer, producing

in excess of 125,000 ounces of gold a year and building gold
 It is defined as the determination of the
reserves of 1,500,000 basic long-term objectives of an
enterprise and the adoption of courses of
action and allocation of resources
necessary to achieve these goals.

THINKING STRATEGICALLY: THREE BIG

WHAT IS A “STRATEGY?” STRATEGIC QUESTIONS
Consists of competitive moves &
business approaches to produce successful 1. WHERE ARE WE NOW?
performance

Management’s “game plan” for: 2. WHERE DO WE WANT TO GO?

•Running the business

•Strengthening firm’s competitive position

3. HOW WILL WE GET THERE?
•Satisfying customers

•Achieving performance targets

Types of Plans Sample - Attendance Policy: No-Fault Point System:

The goal of this attendance policy is to reward good attendance and
eliminate people with poor attendance.
4. Policies It uses a point system, and does not excuse or unexcuse absences.

 General statements or understandings that guide
or channel thinking in decision making.
 They help decide issues before they become
problems.
 Make it unnecessary to analyze the same situation
every time it comes up, and
 Unify other plans, thus permitting other managers
to delegate authority and still maintain control over
what their subordinates do.
Each absence = 1 point(no multi-day occurrences)
Each late in (tardy) or early out = 1/2 point
Each no-show for work = 2 points
Each return with no prior call = 1 point
Each absence-free quarter eliminates all points and rewards the
employee with a day off with pay.
Each employee starts fresh, with no points, each year.
Disciplinary Action:
7 points = verbal warning
8 points = written warning
9 points = 3 day suspension
10 points = termination

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Types of Plans
5. Procedures
 Plans that establish a chronological sequences of required
actions. In handling future activities;
 Details of the exact manner in which certain activities must be
accomplished.;
 An example illustrating the relationship between procedures
and policies:
 Company policies may grant employees vacations; procedures
established to implement this policy will provide for scheduling
vacations to avoid disruptions of work, setting rates of vacation
pay and methods for calculating them, maintaining records to
ensure each employee of a vacation, and spelling out the means
for applying for leave.
Types of Plans
7. Programs
 A complex of goal, policies, procedures,
rules, task assignments, steps to be taken,
resources to be employed, and other
elements necessary to carry out a given
course of action;
 They are supported by budgets.
Steps in Planning
1. Being Aware of Opportunities
• All managers should:
 Take at preliminary look at possible future
opportunities and see them clearly and completely.
 Know where their company stands in the light of its
strengths and weaknesses.
 Understand what problems it has to solve and why.
 Know what it can expect to gain.
• Planning requires a realistic diagnosis of the
opportunity situation.
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Types of Plans
6. Rules
 Spell out specific required actions or nonactions.
 Usually the simplest type of plan.
 The essence of rule is that it reflects a managerial
decision that a certain action must – or must not –
be taken.
 Rules are different from policies in that policies are
meant to guide decision making by marking off
areas in which managers can use their discretion,
while rules allow no discretion in their application.
Types of Plans
8. Budgets
 A statement of expected results expressed in numerical terms.
It may be called a “quantified” plan. In fact, the financial
operating budget is often called a “profit plan”.
 It may be expressed in financial terms: in terms of labor-hours,
units of product, or machine-hours; or in any other numerically
measurable terms.
 It may deal with operation, it may reflect capital outlays, or it
may show cash flow.
 They are also control devices. However, making a budget is
clearly planning. The budget is the fundamental planning
instrument in many companies.
 The budget is necessary for control, but it cannot serve as a
sensible standard of control unless it reflects plans.
Steps in Planning
2. Establishing Objectives
 To be done for the long-term as well as for the
short range.
 Objective specify the expected results and
indicate the end points of what is to be done,
where the primary emphasis is to be placed, and
what is to be accomplished.
 Objectives must be SMART.
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Steps in Planning
3. Developing Premises
 Establish, circulate, and obtain agreement to
utilize critical planning premises such as
forecasts, applicable basic policies, and existing
company plans.
 Premises are assumptions about the
environment in which the plan is to be carried
out.
Steps in Planning
5. Evaluating Alternative Courses
 Evaluate the alternatives by weighing
them in the light of premises and goals.
Steps in Planning
7. Formulating Derivative Plans
 When a decision is made, planning is
seldom complete, and a seventh step is
indicated.
 Derivative or action plans are almost
invariably required to support the basic
plan.
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Steps in Planning
4. Determining Alternative Courses
 Search for and examine alternative courses of
action, especially those not apparent.
 The more common problem is not finding
alternatives but reducing the number of
alternatives so that the most promising may be
analyzed.
 Even with mathematical techniques and the
computer, there is limit of the number of
alternatives that can be thoroughly examined.
Steps in Planning
6. Selecting a Course
 This is the point at which the plan is adopted –
the real point of decision making.
 Occasionally, an analysis and evaluation of
alternative courses will disclose that two or
more are advisable, and the manager may
decide to follow several courses rather than
the one best course.
Steps in Planning
8. Quantifying Plans by Budgeting
 Quantify decisions and plan by converting them into
budgets.
 The overall budget of an enterprise represents the
sum total of income and expenses, with resultant
profit or surplus, and the budgets of major balance
sheet items such as cash and capital expenditures.
 If done well, budgets become a means of adding
various plans and set important standards against
which planning progress can be measured.
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Steps in Planning PLANNING TOOLS & TECHNIQUES

Being aware of

Gantt Charts
opportunities Comparing alternatives in

•
In light of: light of goals
· The market Which alternative will give us
· Competition the best chance of meeting
· What customer want our goals at the lowest cost
· Our strengths and highest profit?

Pert-CPM Chart
· Our weaknesses

Choosing an alternative
•
Selecting the course of action
Setting objectives or goals we will pursue.
Where we want to be and
what we want to accomplish
and when. • Flow Process Charts
Formulating supporting

Considering planning
premises
·
plans
Such as plans to:
· Buy equipment
Buy materials
• Cause & Effect Diagrams
· Hire and train workers
In what environment – internal · Develop a new product
or external – will our plans
operate?

Quantifying plans by
• Others
making budgets
Developing such budgets as:
· Volume and price of sales
Identifying alternatives · Operating expenses
What are the most promising necessary for plans
alternatives to accomplishing · Expenditures for capital
our objectives? equipment

Figure 2.0
Steps in Planning

Gantt Chart – Work Schedule Gantt Chart – Project Development

Deployment
Flowchart
–
New Product
Development

PERT/CPM Chart – PC Card

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Process
Mapping

Cause & Effect Diagram

The TOWS Matrix: A Modern Tool for An Illustration: The Procter & Gamble Company
Analysis of the Situation Profile

• The TOWS Matrix has been introduced for analyzing the The Procter & Gamble Company (P&G) boasts boatloads of
competitive situation of the company that leads to the brands. The world's #1 maker of household products courts
development of the four distinct sets of strategic market share and billion-dollar names. It's divided into three
alternatives.
global units: health and well being, beauty, and household
care. The company also makes pet food and water filters and
• The TOWS Matrix has a wider scope and a different produces a soap opera. Some two-dozen of P&G's brands are
emphasis from the business portfolio matrix and SWOT
analysis. billion-dollar sellers, including Fusion, Always/Whisper, Braun,
Bounty, Charmin, Crest, Downy/Lenor, Gillette, Iams, Olay,
Pampers, Pantene, Pringles, Tide, and Wella, among others.
• The TOWS Matrix is a conceptual framework for a
systematic analysis that facilitates matching of the P&G shed its coffee brands in late 2008. Being the acquisitive
external threats and opportunities with the internal type, with Clairol and Wella as notable conquests, P&G's
weaknesses and strengths of the organization. biggest buy in company history was Gillette in late 2005.

Procter & Gamble SWOT Analysis: The TOWS Matrix: A Modern Tool for
STRENGHTS WEAKNESSESS Analysis of the Situation
· New Management · Top Brands Losing Market Share
· Gross Margin 15 Times the Industry Average · Health and Beauty Women Only
· One of the best marketers in the world · Lagging behind in online media presence & leadership
· Diversified brand portfolio: more than 300 brands with more · Missing opportunity: Refuses to manufacture private label Internal strengths (S) Internal weaknesses (W)
than 79 billion in Revenue products for its retail customers Internal e.g., strengths in management, e.g., weaknesses in areas shown
· Tightly integrated with the largest retailers in the US and · Slow Process Heavy Culture operations, finance, marketing, in the “strengths” box.
· Weak brands (Duracell, Iam, Braun, Pringles)
factors
around the world
External research and development,
· Product innovation · Views Product Performance only
· Talented management
engineering.
factors
· Distribute to 80 Countries
· Distribution channels all over the world
· New Billion Dollar brands
External opportunities (O) SO strategy: Maxi-Maxi WO strategy: Mini-Maxi
(consider risks also) e.g., current Potentially the most successful e.g., development strategy to
OPPORTUNITIES THREATS
and future economic conditions; strategy, utilizing the overcome weaknesses in order to
· Health and Beauty for Men · Substitute brands that have a cheaper price
· Doubling Environmental Goals for 2012 · Private label growth political and social changes; new organization’s strengths to take take advantage of opportunities.
· Adding Value for the Conspiracy · Slowdown in consumer spending in the US & globally products, services, and advantage of opportunities.
· Utilizing online social networks · Key competitors expanding their product portfolios through technology.
· Going Green/Eco Friendly acquisitions
· Capitalizing on online media · Increase in raw material price
External threats (T) ST strategy: Maxi-Mini WT strategy: Mini-Mini
· Continue to divest brands that don't align with the company's · Commodity cost and currency exchange rate placed tremendous e.g., energy shortage, Use of strengths to cope with e.g., retrenchment, liquidation, or
long-term goals (i.e., Folgers) pressure on the business competition, and areas similar to threats or to avoid with threats. joint venture to minimize both
· Emerging markets those shown in the “opportunities” weaknesses and threats.
· New acquisition opportunities
box above.
· Selling directly to consumers
· Design for better product experience

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Decision Making
• It is defined as the selection of a course of action
from among alternatives; it is at the core of
planning.

• A plan cannot be said to exist unless a decision–a

commitment of resources, direction, or reputation–
has been made.

• Managers sometime see decision making as their

central job because they must constantly choose
what is to be done, who is to do it, and when,
where, and occasionally even how it will be done.

Major Steps in Decision Making Steps in Decision Making

2. Evaluation of Alternatives
1. Identifying Alternatives and the Limiting Factor
 The ability to develop alternatives (by ingenuity, research, and
common sense), is often as important as being able to select
correctly among them.
 The manager needs help in this situation, as well as assistance in
choosing the best alternative, is found in the concept of the
limiting or strategic factor.
 A limiting factor is something that stands in the way of
accomplishing a desired objective.
 The principle of the limiting factor states that, by recognizing and
overcoming those factors that stand critically in the way of a goal,
the best alternative course of action can be selected.
 This is the point of ultimate decision making, although
decisions must also be made in the other steps of
planning—in selecting goals, in choosing critical
premises, and even in selecting alternatives.
 Because of complexities in evaluating alternatives,
newer methodologies and applications and analysis
are needed:
 Advantages/ Disadvantages
 Strengths/ Weaknesses
 Cost-Benefit Analysis (C.B.A.)
 Decision Trees

Decision Making under Certainty,

Steps in Decision Making
3. Selecting an Alternative: Three Approaches
Bases for selecting from among alternative courses of action
Uncertainty, and Risk
1. Certainty
 In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision. The information is reliable and is
considered to be reliable, and the cause and effect relationships are known.

2. Uncertainty
Experimentation
 In a situation of uncertainty, on the other hand, people have only a meager
database, they do not know whether or not the data are reliable, and they very
unsure about whether or not the situation may change.

Reliance on the
How to select from
among Choice made
3. Risk
past
alternatives?  In a situation with risks, factual information may exist, but it may be
incomplete. To improve decision making, one may estimate the objective
probability of an outcome by using, for example, mathematical models. On the
other hand, subjective probability, based on judgment and experience, may be
used.
Research and
analysis

Reference : Management - A Global Perspective by Weihrich and Koontz 11th Edition

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Organizing is…
• The identification and classification of required
activities.
Organizing and Staffing
• The grouping of similar activities necessary to attain
objectives.

• The assignment of each group to a manager with the

Source: Management - A Global Perspective authority necessary to supervise it.
by Weihrich and Koontz 11th Edition
• The provision for coordination horizontally (on the
same or a similar organizational level) and vertically
(e.g., between corporate headquarters, division, and
department) in the organization structure.

The Logic of Organizing The Organizing Process

1. Establishing enterprise objectives
2. Formulating supporting objectives, policies, and
plans Feasibility studies and feedback

3. Identifying, analyzing, and classifying the 1. Enterprise

Objectives

activities necessary to accomplish these 2. Supporting

objectives objectives,
policies, and
plans
3. Identification and
classification of
4. Grouping of
activities in light of
resources and
5. Delegation of
authority
6. Horizontal and
vertical coordination
of authority and
7. Staffing

4. Grouping these activities in light of the human required activities

situations
information
relationships 8. Leading

and material resources

5. Delegating to the head of each group the 9. Controlling

authority necessary to perform the activities

6. Tying the groups together horizontally and
vertically, though authority relationships and
information flows. Part 2 Part 3 Part 4,5,6
(Planning) (Organizing) (Other Functions)

Organization Formal Organization

• It is a formalized intentional structure of
roles or positions.
• It includes all the behaviors of all
participants.
• It is the total system of social and
cultural relationships.
• Formal Organization means the intentional
structure of roles in formally organized
enterprise.
• A formal organization must be flexible.
• Individual effort in group situation must be
channeled toward group and organizational
goals.

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Informal Organization Formal and Informal Organizations

 It is a network of interpersonal relationships that
arise when people associate with each other.

 It can also be described as any joint personal President

activity without conscious joint purpose,

although contributing to joint results. Vice president

etc.

 Thus, informal organizations—relationships that Division

managers

do not appear on the organization chart—might Department

etc.

include the machine shop group, the sixth floor managers

crowd, the Friday evening bowling gang, and the

morning coffee “regulars”.
Informal organization: Informal organization: Informal organization:
Morning coffee Bowling team Chess group
“regulars”

Organizational Levels and the Span of

Organizational Division: The Department Management*
• While the purpose of organizing is to make human
cooperation effective, the reason for levels of
organization is the limitation of the span of
• One aspect of organizing is the management.
establishment of departments. • In other words, organizational levels exist because
the is a limit to the number of persons a manager
• A department is a distinct area, division, or can supervise effectively, even thought this limit
varies depending on situations.
branch of an organization over which a • A wide span of management is associated with a few
manager has authority for the performance organizational levels; a narrow span, with many
levels.
of the specified activities.
* In much of the literature on management, this is referred to as the span of
control. Despite the widespread use of this term, in this lecture span of
management will be used, since the span is one of management and not
merely of control, which is only one function of managing.

Organization Structures with Narrow and Wide

Factors Determining an Effective Span
Spans
• The number of subordinates a manager can
effectively manage on the impact of
Organization with narrow spans

underlying factors.
• Aside from such personal capacities as
Advantages:
· Close supervision
Disadvantages:
· Superiors tend to get too involved in
comprehending quickly, getting along with
·
·
Close control
Fast communication between subordinates and
superiors
·
·
·
subordinates’ work
Many levels of management
High costs due to many levels
Excessive distance between lowest level and
people, and commanding loyalty and respect,
the most important determinant is a
top level
Organization with wide spans

manager’s ability to reduce the time he or she

Advantages:
· Superiors are forced to delegate
· Clear policies must be made
· Subordinates must be carefully selected
spends with subordinates.
Disadvantages:
· Tendency of overloaded superiors to become
decision bottlenecks
· Danger of superior’s loss of control
· Requires exceptional quality of managers

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Organization Structure
Organization Structure A functional organization grouping (in a manufacturing company)

President

1. Departmentation by Enterprise Function Assistant to

president
Personnel

Marketing Engineering Production Finance

 It is the grouping of activities according

Market Engineering Production Financial
Research Administration planning planning

Marketing Preliminary Industrial Budgets

Planning Design engineering

to the functions of the enterprise, such Advertising

and Promotion
Electrical
Engineering
Production
engineering
General
accounting

Sales Mechanical Purchasing Cost

as production, selling, and financing. administration

Sales
Engineering

Hydraulic
Engineering
Tooling
accounting

Statistics and
data
processing

Packaging General
production

Quality
Control

Advantages: Disadvantages:
· Logical reflection of functions · De-emphasizes overall company objectives
· Maintains power and prestige of major · Overspecializes and narrows viewpoints of
functions key personnel
· Follows principle of occupational · Reduces coordination between functions
specialization · Responsibility for profits is at the top only
· Simplifies training · Slow adaptation to changes in the
· Furnishes means of tight control at the top environment
· Limits development of general managers

Organization Structure Organization Structure

2. Departmentation by Territory or A territorial, or geographic, organization grouping (in a manufacturing company)
President

Geography Marketing Personnel Purchasing Finance

Western Southwest Central Southeast Eastern

 It is the grouping of activities by area or

region region region region region

territory that is common in enterprises Personnel

operating over wide geographic areas.

Engineering Production Accounting Sales

Advantages: Disadvantages:
· Places responsibility at a lower level · Requires more persons with general manager
· Places emphasis on local markets and problems abilities
· Improves coordination in a region · Tends to make maintenance of economical central
· Takes advantage of economies of local operation services difficult and may require services such as
· Better face-to-face communication with local personnel or purchasing at the regional level
interests · Makes control more difficult for top management
· Furnishes measurable training ground for general
managers

Organization Structure Organization Structure

Customer departmentation (in a large bank)
3. Departmentation by Customer Group President

Community-
Corporate Institutional
city banking
banking banking

 It is the grouping of activities that Real estate and

Agricultural

reflects a primary interest in customers. mortgage loans

banking

Advantages: Disadvantages:
· Encourages focus on customer needs · May be difficult to coordinate operations
· Gives customers the feeling that they have an between competing customer demands
understanding supplier (banker) · Requires managers and staff expert in
· Develops expertness in customer area customers’ problems
· Customer groups may not always be clearly
defined (e.g., large corporate firms vs. other
corporate business)

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Organization Structure Organization Structure

A product organization grouping (in a manufacturing company)
4. Departmentation by Product President

 It is the grouping of activities according to Marketing Personnel Purchasing Finance

products or product line, especially in multiline,

large enterprises. Instrument
division
Indicator
Lights
Division
Industrial
Tools
Division
Name
Title

Engineering Accounting Engineering Accounting

Production Sales Production Sales

Advantages: Disadvantages:
· Places attention and effort on product line · Requires more persons with general manager
· Facilitates use of specialized capital, facilities, skills, abilities
and knowledge · Tends to make maintenance of economical central
· Permits growth and diversity of products and services services difficult
· Improves coordination of functional activities · Presents increased problem on top of management
· Places responsibility for profits at the division level control
· Furnishes measurable training ground for general
managers

* Product departmentation is also used in in nonmanufacturing companies.

Organization Structure Organization Structure

5. Matrix Organization Matrix Organization (in engineering)

Director
Of
Engineering

 It is the combining of functional and

project or product patterns of Chief of
Preliminary
Chief
Mechanical
Chief
Electrical
Chief
Hydraulic
Chief
Metallurgical

departmentation in the same organization

Design Engineering Engineer Engineer Engineer

structure. Project A
manager

Project B
manager

Project C
manager

Project D
manager

Advantages: Disadvantages:
· Oriented toward end results · Conflict in organizational authority exists
· Professional identification is maintained · Possibility of disunity of command
· Pinpoints product-profit responsibility · Requires a manager effective in human
relations

Line / Staff Authority and Bases of Power

Decentralization
Authority and Power
Power is the ability of individuals or groups to
induce or influence the beliefs or actions of
other persons or groups.
Authority is the right in a position to exercise
discretion in making decisions affecting others.
1. Legitimate Power
 It normally arises from and derives from our
cultural system of rights, obligations, and duties
whereby a “position” is accepted by people as
being “legitimate”.
2. Expertness of a person or a group
 This is the power of knowledge. Physicians,
lawyers, and university professors may have
considerable influence on others because they
are respected for their specialized knowledge.
3. Referent Power
 It is an influence that people or groups may
exercise because people believe in them and
their ideas.

21

Bases of Power
4. Reward Power
 It refers to the power that arises from the
ability of some people to grant rewards.
5. Coercive Power
 It is the power to punish, whether by
firing a subordinate or by withholding a
merit pay increase.
Decentralization of Authority
Decentralization is the tendency
to disperse decision-making
authority in an organized
structure.
Delegation of Authority
The process of delegation involves:
1. Determining the results expected from a
position
2. Assigning tasks to the position
3. Delegating authority for accomplishing
these tasks
4. Holding the person in that position
responsible for the accomplishment of the
tasks.
5/5/2019
Line / Staff Concepts and
Functional Authority
1. Scalar principle
 “The clearer the line of authority, the clearer will
be the responsibility for decision making and the
more effective will be organizational
communication.”
2. Line authority
 The relationship in which a superior exercises
direct supervision over a subordinate.
3. Staff relationship
 It’s nature is advisory.
Delegation of Authority
• Authority is delegated when a superior
gives a subordinate discretion to make
decisions.
• Clearly, supervisors cannot delegate
authority they do not have, whether they
are members, presidents, vice
presidents, or supervisors.
The Art of Delegation
Personal Attitudes toward Delegation
– Receptiveness
An underlying attribute of managers who
will delegate authority is a willingness to
give other people’s ideas a chance.
Decision making always involves some
discretion, and a subordinate’s decision is
not exactly the one a superior would
have made.
22

The Art of Delegation
• Willingness to let go
A manager who will effectively delegate
authority must be willing to release them to
make decisions to subordinates.
A major fault of some managers who move
up the executive ladder—or of the pioneer
who has built a large business from the
small beginning of, say, a garage machine
shop—is that they want to continue making
decisions for the positions they have left.
The Art of Delegation
• Willingness to trust subordinates
Superiors have no alternative to trusting their
subordinates, for delegation implies a trustful
attitude between them.
• Willingness to establish and use broad controls
Since superiors cannot delegate responsibility for
performance, they should not delegate authority
unless they are willing to find means of getting
feedback, that is, of assuring themselves that
authority is being used to support enterprise or
departmental goals and plans.
Recentralization of Authority and
Balance as the Key to Decentralization
• Recentralization is centralization of
authority that was once decentralized;
normally not a complete reversal of
decentralization, as the authority
delegated is not wholly withdrawn.
5/5/2019
The Art of Delegation
• Willingness to allow mistakes by subordinates
Although no responsible manager would sit idly by
and let a subordinate make a mistake that would
endanger the company or the subordinate’s
position in the company, continual checking on
the subordinate to ensure that no mistakes are
ever made will make true delegation impossible.
Since everyone makes mistakes, a subordinate
must be allowed to make some, and their cost
must considered an investment in personal
development.
Three (3) Elements of Delegation
1. Responsibility – means that a person is
assigned a task that he or she is supposed to
carry out.
2. Authority – means that the person has the
power and the right to give orders, draws upon
resources, and do whatever else is necessary to
fulfill the responsibility.
3. Accountability – means that the subordinate’s
manager has the right to expect the subordinate
to perform the job and to take corrective action
in the event the subordinate fails to do so.
Staffing
• It is defined as filling, and keeping filled,
positions in the organizational structure.
• Work specialization – degree to which the
work necessary to achieve organizational goals
is broken down into various jobs.
• Job design – specification of task activities
associated with a particular job (e.g. a job as
an administrative assistant may include typing,
filing and photocopying, or it could involve
such activities as coordinating travels and
meetings, investigating trouble spots, and
making decisions about a certain range of
issues).
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Staffing Job Simplification

Approaches to Job Design
• Job simplification – the process of designing jobs so
that jobholders have only a small number of narrow Job Simplification
activities to perform.
• Job rotation – practice of periodically shifting
workers through a set of jobs in a planned sequence.
Worker 1 Worker 2 Worker 3
• Job enlargement – the allocation of a wider variety
of similar tasks to a job in order to make it more
challenging.
• Job enrichment – process of upgrading the job-task
mix in order to increase significantly the potential for
growth, achievement, responsibility, and recognition. Task 1 Task 1 Task 1

Job Rotation Job Enlargement

Job Enlargement
Job Rotation

Worker 1 Worker 2 Worker 3

Worker 1 Worker 2 Worker 3

Task 1,2,3 Task 1,2,3 Task 1,2,3

Task 1 Task 2 Task 3

Movement of Personnel Movement of Personnel

 RECRUITMENT is the process of encouraging,
inducing, or influencing applicants to apply for a certain
vacant position.
 SELECTION is the process of getting the most qualified
applicant from among different job seekers.
 TRAINING is the systematic development of the
attitude/knowledge/behaviour patterns for the adequate
performance of a given job or task.
 TRANSFER refers to the shifting of an employee from
one position to another without increasing his duties,
responsibilities, or pay.
 PROMOTION refers to the shifting of an employee to a
new position to which both his status and
responsibilities are increased.
• OUTPLACEMENT is the process of helping people who have
been dismissed from the company to regain employment
elsewhere.
• LAY-OFF is a type of separation, temporary and involuntary,
usually traceable to a negative business condition
• DISCHARGE is a permanent separation of an employee, at the
will of an employer, if a person is not competent in his job,
guilty of breaking rules like delinquency and insubordination,
and other violations
• RESIGNATION is voluntary and permanent separation of an
employee due to due to low morale, low salary, etc.
• RETIREMENT can either be voluntary or involuntary; if an
employee retires upon reaching the number of years of
services in a company as provided for by its policies or upon
reaching the age of 65.
• PERFORMANCE APPRAISAL is the process of defining,
measuring, evaluating, and recording expectations from
employee performance.

24

Directing/Leading
SOURCE: MANAGEMENT - A GLOBAL PERSPECTIVE
BY WEIHRICH AND KOONTZ 11TH EDITION
Human Factors in Managing
Through the function of leading, managers help
people see that they can satisfy their own needs
and utilize potential while contributing to the
aims of the enterprise.
Managers should thus have an understanding
of the roles assumed by people and the
individuality and personalities of people.
No Average Person
 People act in different roles, but they are also
different themselves.
 There is no average person.
 It is equally important to acknowledge that individuals
are unique—they have different needs, different
ambitions, different attitudes, different desires for
responsibility, different levels of knowledge and skills,
and different potentials.
5/5/2019
Leading/Directing
It is defined as the process of influencing people so
that they will contribute to organizational and group
goals.
Managing requires the creation and maintenance of an
environment in which individuals work together in
groups toward the accomplishment of common
objectives.
The manager’s job is not to manipulate people but,
rather, to recognize what motivates people.
Multiplicity of Roles
 Individuals are much more than a productive factor in
management’s plans.
 They are members of social systems of many organizations;
they are consumers of goods and services, schools, churches,
trade associations, and political parties.
 In these different roles, they establish laws that govern
managers, ethics that guide behavior, and a tradition of
human dignity that is a major characteristic of our society.
The Importance of Personal Dignity
The concept of individual dignity means
that people must be treated with respect,
no matter what their position is in the
organization.
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Consideration of the Whole Person Motivation

 We cannot talk about the nature of people unless we
consider the whole person, not just separate and
distinct characteristics such as knowledge, attitude, A general term applying to the entire
skills, or personality traits.
 A person has them all to different degrees.
class of drives, desires, needs, wishes, and
 The human being is a total person affected by external similar forces.
factors.
 People cannot divest themselves of the impact of
these forces when they come to work.
 Managers must recognize these facts and be prepared
to deal with them.

Motivation Models/Theories Motivation Models/Theories

1. Douglas McGregor’s Theory X and Theory Y Under the assumptions of theory X:

 Two sets of assumptions about the nature of people.
• Employees inherently do not like work and whenever possible,
 Theory X is pessimistic, static, and rigid. Control is
will attempt to avoid it.
primarily external, imposed on the subordinate by the
• Because employees dislike work, they have to be forced,
superior.
coerced or threatened with punishment to achieve goals.
 In contrast, Theory Y is optimistic, dynamic, and
• Employees avoid responsibilities and do not work fill formal
flexible, with an emphasis on self-direction and the directions are issued.
integration of individual needs with organizational
• Most workers place a greater importance on security over all
demands. other factors and display little ambition.

Motivation Models/Theories Motivation Models/Theories

In contrast under the assumptions of theory Y: 2. Maslow’s Hierarchy Maslow’s hierarchy of

needs
of
• Physical and mental effort at work is as natural as rest or play. Needs Theory
Need
For
Self-Actualization

• People do exercise self-control and self-direction and if they are

Esteem Needs
committed to those goals.
• Average human beings are willing to take responsibility and  When one set of
exercise imagination, ingenuity and creativity in solving the needs is satisfied, Affiliation or Acceptance Needs

problems of the organization. this kind of need

Security or Safety Needs

• That the way the things are organized, the average human ceases to be a
being’s brainpower is only partly used. motivator. Physiological Needs

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Motivation Models/Theories Motivation Models/Theories

4. Frederick Herzberg’s Motivation-Hygiene Theory
3. Clayton Alderfer’s ERG Theory  Satisfiers are motivators and are related to job content while
 People are motivated by existence needs, relatedness dissatisfiers, also called maintenance, hygiene, or job-
needs, and growth. context factors, are not motivators.
 Existence - concerned mainly with providing basic material  He states that presence of certain factors in the organization
existence. is natural and the presence of the same does not lead to
 Relatedness - individuals need to maintain interpersonal motivation. However, their nonpresence leads to
relationship with other members in the group. demotivation.
 Growth - the intrinsic desire to grow and develop  In similar manner there are certain factors, the absence of
personally. which causes no dissatisfaction, but their presence has
motivational impact.

Motivation Models/Theories Motivation Models/Theories

Comparison of Maslow’s
and Herzberg’s theories of 5. Vroom’s Expectancy Theory
motivation
Maslow’s
Needs Hierarchy
Herzberg’s
Two-factor theory  People will be motivated to do things to reach a goal
Challenging work
if they believe in the worth of the goal and if they can
Motivators

Achievement
Self-actualization Growth in the job
Responsibility
Advancement
see that what they do will help them in achieving it.
 An employee can be motivated to perform better
Esteem or status Recognition

Affiliation or when there is a belief that the better performance will

acceptance
lead to good performance appraisal and that this shall
Maintenance factors

Status
Interpersonal relations

Security or safety
Quality of supervision
Company policy and administration result into realization of personal goal in form of some
Job security
Salary reward
Physiological needs

Motivation Models/Theories Motivation Models/Theories

6. The Porter and Lawler Model

Vroom’s Expectancy Theory
– Suggests that levels of motivation are based more
Motivation = Valence x Expectancy on the value that individuals place on the reward.
– The components that effect motivation then, are
called valence (what's important to you) and
expectancy (can you do it).
– Porter and Lawler suggest that perceived
inequality in this model plays a pivotal role in job
satisfaction. Motivation or effort leads to
performance. This performance is followed by
intrinsic and extrinsic rewards. The perceived
equity of those rewards leads to satisfaction.

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Motivation Models/Theories Motivation Models/Theories

Porter and Lawler’s
motivation model
7. Equity Theory
Value of
rewards  Motivation is influenced by an individual’s
subjective judgment about the fairness of the
Ability to do a
Perceived reward he or she gets, relative to the inputs,
specified task
Equitable
rewards compared with the rewards of others.
Intrinsic
Satisfaction
rewards
Reduced
Performance Inequitable Dissatisfaction
Effort
accomplishment reward output
organization
Extrinsic Departure from
rewards
Perception of
Balance or Continuation
task required imbalance
Equitable
at same level
reward
of rewards of output

Perceived effort
and reward
probability More than Harder work
Equitable Reward
reward discounted
Adapted from L. W. Porter and E. E. Lawler, Managerial Attitudes and Performance (Homewood, IL: Richard D. Irwin, Inc.,
1968), p. 165.

Motivation Models/Theories Motivation Models/Theories

Equity Theory 8. Goal Setting Theory of Objective setting for

motivation
Edwin Locke
• States that when the
goals to be achieved are Planning
Actions

set at a higher standard,

Implementation
objectives
Setting
employees are
motivated to perform
Control
better and put in and
Appraisal

maximum effort.

Motivation Models/Theories Motivation Models/Theories

9. Skinner’s Reinforcement Theory

 Individuals can be motivated by proper design of 10. David McClelland’s Needs Theory
their work environment and by praise for their  a theory on three types of motivating needs which
performance, while punishment for poor are
performance produces negative results. oNeed for Power
 Hence, the only way to motivate is to keep on oNeed for Affiliation
making positive changes in the external
oNeed for Achievement
environment of the organization.

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Motivation Models/Theories Motivation Models/Theories

• People for high need for power are inclined
• People who are social in nature try to affiliate
towards influence and control, like to be at
themselves with individuals and groups, are
the center and are good orators, demanding
driven by love and faith, and like to build a
in nature, forceful in manners and ambitious
friendly environment around themselves.
in life.

• Social recognition and affiliation with others

• They can be motivated to perform if they are
provides them motivation.
given key positions or power positions.

Motivation Models/Theories
Special Motivational Techniques
• People with the need of achievement are
driven by the challenge of success and the fear
1. Intrinsic Motivation
of failure.
 Refers to motivation that is driven by an interest
• They set for themselves moderately difficult or enjoyment in the task itself, and exists within
the individual rather than relying on any external
tasks, are analytical in nature and take pressure
calculated risks.  It may include a feeling of accomplishment and
self-actualization.

• Such people are motivated to perform when

they see at least some chances of success.

Special Motivational Techniques Leadership

2. Extrinsic Motivation
Leadership is the art or process of influencing
 Comes from outside of the individual. Common people so that they will strive willingly and
extrinsic motivations are rewards like money and
grades, coercion (the practice of forcing another party enthusiastically
to behave in an involuntary manner by use of threats, toward the
or rewards intimidation, or some other form of
pressure or force), and threat of punishment. achievement of
 Include benefits, recognition, status symbols, and group goals.
money. Competition is in general extrinsic because it
encourages the performer to win and beat others, not
to enjoy the intrinsic rewards of the activity.

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Leadership Ingredients of Leadership

1. Power
Good leaders are made not born. If you have the
2. A fundamental understanding of people
desire and willpower, you can become an effective
leader. Good leaders develop through a never 3. The ability to inspire followers to apply their
ending process of self-study, education, training, full capabilities
and experience.
4. The leader’s style
- Jago, 1982
5. The development of a conducive
organizational climate

Approaches to Leadership (1) Trait Approaches to Leadership

Ralph M. Stogdill found that various researchers had
(1) Trait Approach identified specific traits related to leadership ability
(2) Transformational and Transactional Leadership such as:
 5 physical traits (such as energy, appearance, and
(3) Charismatic Leadership height)
(4) Fiedler’s Contingency Approach  4 intelligence and ability traits
(5) Path-Goal Approach 16 personality traits (such as adaptability,
aggressiveness, enthusiasm, and self-confidence), 6
task-related characteristics (such as achievement drive,
persistence, and initiative)
9 social characteristics (such as cooperativeness,
interpersonal skills, and administrative ability)

(2) Transformational and Transactional

(2) Transformational and Transactional Leadership Approaches
Leadership Approaches
 Mahatma Gandhi (1869-1948)
The transformational leadership style occur when one is a great example of a
or more persons engage in such a way that leaders and transformational leader
followers raise one another to higher levels of because he satisfied the needs
of his followers. Instead of
motivation and morality. This is almost like a synergy
riding those needs to power, he
that might exist, whereby everyone gets raised to a remained sensitive to a higher
higher level of performance. purpose.
His vision of leadership went beyond himself. He believed in
satisfying the needs of all that followed him.

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(2) Transformational and Transactional
Leadership Approaches
• The transactional leadership theory, developed by
Weber and Bass, is based on the hypothesis that
followers are motivated through a system of rewards
and punishment.
• The transactional leader's view of the leader - follower
relationship is one of quid pro quo - or this for that. If
the follower does something good, then they will be
rewarded. If the follower does something wrong, then
they will be punished.
(4) Fiedler’s Contingency Approach to Leadership
People become leaders not only because of their
personality attributes but also because of various
situational factors and the interactions between
leaders and group members.
Based on leadership style --- task-motivated and
relationship-motivated and situation --- leader-member
relations, task structure, and position power.
(5 ) Path-goal Approach to Leadership
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(3) Charismatic Leadership Approach
 Charismatic leadership is based on the leader's ability to
communicate and behave in ways that reach followers on a
basic, emotional way, to inspire and motivate.
 According to Robert J. House, charismatic leaders may have
certain characteristics, such as:
– being self-confident
– having strong convictions
– articulating a vision
– being able to initiate change
– communicating high expectations
– having a need to influence followers and supporting them
– demonstrating enthusiasm and excitement
– being in touch with reality
(5 ) Path-goal Approach to Leadership
• This was developed to describe the way that
leaders encourage and support their followers in
achieving the goals they have been set by making
the path that they should take clear and easy.
• In particular, leaders:
– Clarify the path so subordinates know which way to go.
– Remove roadblocks that are stopping them going there.
– Increasing the rewards along the route.
Leadership Styles Based on Use of Authority
1. Autocratic Leader
 He commands and expects compliance, is dogmatic and
positive, and leads by the ability to withhold or give
rewards and punishment.
2. Democratic or Participative Leader
 He consults with subordinates and encourages their
participation.
3. Free-rein Leader
 He uses power very little, if at all, giving subordinates a
high degree of independence.
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Leadership Styles Based on Use of Authority The Managerial Grid

The flow of influence with three leadership
styles
• A well-known approach to defining leadership styles is
Autocratic
Leader the managerial grid, developed decades ago by Robert
Blake and Jane Mouton.
Follower Follower Follower

• The managerial grid has two dimensions: concern for

Democratic or
Participative
Leader

people and concern for production.

Follower Follower Follower

Free-rein
Leader
• Blake and Mouton recognizes five style: 1.1 style, 9.9
style, 5.5 style, 1.9 style, and 9.1 style.
Follower Follower Follower

The Managerial Grid The Managerial Grid

The five resulting leadership styles are as follows:
• Impoverished Management (1, 1)
– Managers with this approach are low on both dimensions and
exercise minimum effort to get the work done from
subordinates.
– The leader has low concern for employee satisfaction and work
deadlines and as a result, disharmony and disorganization
prevail within the organization.
– The leaders are termed ineffective wherein their action is
merely aimed at preserving job and seniority.

The Managerial Grid The Managerial Grid

• Task management (9, 1)
– Leaders are more concerned about production and have less
• Middle-of-the-Road (5, 5)
concern for people.
– Basically a compromising style wherein the leader tries to
– The style is based on theory X of McGregor. The employees’
maintain a balance between goals of company and the needs of
needs are not taken care of and they are simply a means to an
people.
end.
– The leader does not push the boundaries of achievement
– The leader believes that efficiency can result only through
resulting in average performance for organization.
proper organization of work systems and through elimination of
people wherever possible. Such a style can definitely increase – Here neither employee nor production needs are fully met.
the output of organization in short run but due to the strict
policies and procedures, high labor turnover is inevitable.

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The Managerial Grid The Managerial Grid

• Country Club (1, 9)

– This is a collegial style characterized by low task and high
people orientation where the leader gives thoughtful attention
to the needs of people thus providing them with a friendly and
comfortable environment.
– The leader feels that such a treatment with employees will lead
to self-motivation and will find people working hard on their
own.
– However, a low focus on tasks can hamper production and lead
to questionable results.
• Team Management (9, 9)
– Characterized by high people and task focus, the style is based
on the theory Y of McGregor and has been termed as most
effective style according to Blake and Mouton.
– The leader feels that empowerment, commitment, trust, and
respect are the key elements in creating a team atmosphere
which will automatically result in high employee satisfaction
and production.

Communication The Communication Process

A Communication Process Model

• The transfer of information from a sender
to a receiver, with the information being Feedback

understood by the receiver.

Transmission Understandin
Thought Encoding Reception Decoding
of message g

Sender Receiver

Noise

The Purpose of Communication The Communication Process

1. To establish and disseminate the goals of an The Purpose and Function of Communication
enterprise. Planning Organizing Staffing Leading Controlling

2. To develop plans for their achievement.

3. To organize human and other resources in the most
effective and efficient way. Communications

4. To select, develop, and appraise members of an

organization.
5. To lead, direct, motivate, and create a climate in External environment:
· Customers
· Suppliers
which people want to contribute. · Stockholders
· Governments
· Community
6. To control performance. · Others

The Management Process

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Communication in an Organization Communication in an Organization

1. Downward Communication
 It flow from people at higher levels to those at lower levels
in the organizational hierarchy. Information Flow in an
Organization
2. Upward Communication
 Travels from subordinates to superiors and continues up
the organizational hierarchy.
Horizontal
3. Crosswise Communication Upward
Diagonal
 It includes the horizontal flow of information (among Downward

people on the same or similar organizational levels) and

the diagonal flow of information (among people at
different levels who have no direct reporting relationships
with one another).

Forms of Communication Forms of Communication

1. Written Communication 2. Oral or verbal Communication

 Communication in written form
 Includes pictograms or visuals, letters,
memorandums, reports, text messages,
electronic messages (e-mail).
 Primarily refers to spoken verbal communication
 Includes discussion, speeches, presentations,
interpersonal communication and many other
varieties.
 The body language and voice tonality plays a
significant role and may have a greater impact on
the listener than the intended content of the
spoken words.

Forms of Communication Communication Methods

3. Nonverbal Communication
 Describes the process of conveying meaning in the
form of non-word messages through e.g. gestures,
body language, or posture; facial expression and
eye contact, object communication such as clothing,
hairstyles, architectures, symbols, and infographics,
as well as through an aggregate of the above.
 Non-verbal communication is also called silent
language and plays a key role in human day to day
life.
• Primitive or conventional method
– regular mail (“snail mail”), morse code
• Use of information technology
– wired and wireless telephone, fax machine, voice
mail, internet (for e-mail, chatting, etc),
teleconference , and videoconference

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Tips for Improving Written Communication Tips for Improving Oral Communication
• Use simple words and phrases. • Communicate with a large audience as you would do in a one-to-one
conversation.
• Use short and familiar words. • Tell a story, an anecdote, and give examples.

• Use personal pronouns (such as “you”) whenever appropriate. • Pause—do not rush. In a discussion, a pause shows that you are listening.

• Give illustrations and examples; use charts.
• Use short sentences and paragraphs.
• Use active verbs, such as “The manager plans…”
• Use visual aids such as diagrams, charts, overhead slides, and computer
graphic presentations.
• Communicate confidence and create trust. This can be done by strong and
clear voice, good posture, and a smile.

• Use a colorful, specific language and show through your body language
• Avoid unnecessary words. that you are confident and are in command of the situation.
Jonathan S. Bio 2010

Controlling
• The process of measuring progress
Controlling toward planned performance and, if
necessary, applying corrective
measures to ensure that
Source: Management - A Global Perspective performance is on the line with
by Weihrich and Koontz 11th Edition manager’s objectives.

Controlling Process Controlling Process

1. Setting performance standards The Controlling Process

2. Measuring actual performance Set performance Measure actual Determine

Compare
standards performance deviation

3. Comparing performance with the

standard vs. actual, and Standards Within limits

determining deviations
4. Remedying unfavorable deviation by Take corrective
action
No Yes

taking corrective action Continue work

progess

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Establishment of Standards
• Standards are simply criteria of
performance.
• They are selected points in an entire
planning program, at which measures of
performance are made so that managers
can receive signals about how things are
going and thus, do not have to watch
every step in the execution of plans.
Correction of Deviations
• Managers may correct deviations by:
1. Redrawing their plans or modifying their goals;
2. Exercising their organizing function through
reassignment or clarification of duties;
3. Additional staffing;
4. Better selection and training of subordinates;
5. Ultimate re-staffing measure—firing;
6. Better leading—fuller explanation of the job or
more effective leadership techniques.
Types of Critical Point Standards
2. Cost Standards
 Monetary values & measurements and, like
physical standards, are common at the
operating level.
 Illustrative of cost standards widely used are:
direct and indirect costs per unit produced
and labor cost per unit or per hour. ( $5/#;
Php380/day; etc…)
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Measurement of
Performance
• If standards are clearly & objectively
established and made known to the
performer of a job, then measurement of
performance becomes easy.
• The most common means of
measurement are: personal observations,
use of statistical data and reports, both
oral and written.
Types of Critical Point Standards
1. Physical Standards
 Nonmonetary measurements and are
common at the operating level, where
materials are used, labor is employed,
services are rendered, and goods are
produced.
 May reflect quantities, or qualities; such as
labor-hours per unit of output and fastness
of a color, respectively.
Types of Critical Point
Standards
3. Capital Standards
 Application of monetary measurements to
physical items.
 Have to do with the capital invested in the
firm rather than with operating costs, and
are therefore primarily related to the
balance sheet rather than to the income
statement.
36

Types of Critical Point
Standards
4. Revenue Standards
 Arise from attaching monetary values
from sales.
 May include such standards as revenue
per bus passenger-mile, average sales per
customer, and sales per capita in a given
market area.
Types of Control
1. Preliminary Control (sometimes called feed
forward control) – takes place before
operations begin and includes policies,
procedures, and rules designed to ensure that
planned activities are carried out properly.
Ex. Inspection of raw materials, proper selection
and training of employees
Management Audits
• They are means for evaluating the
effectiveness and efficiency of various
systems within the organization, from
social responsibility to accounting control.
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Types of Critical Point
Standards
5. Program Standards
A manager may be assigned to install a variable
budget program, a program for formally
following the development of new products,
or a program improving the quality of a
sales force.
 Although some subjective judgment may
have to be applied in appraising program
performance, timing and other factors can
be used as objective standards.
Types of Control
2. Concurrent Control – takes place while
plans are being carried out.
Ex. directing, monitoring
3. Feedback Control – focuses on the use of
information about results to correct
deviations from the acceptable standard
after they arise.
4. Multiple Approaches Control
Types of Audits
1. External Audits – occurs when one
organization evaluates another organization;
used in feedback control in the discovery and
investigation of the savings and loan scandals.
2. Internal Audits – improve the planning process
and the organization’s internal control systems;
essential functions include periodic
assessment of a company’s own planning,
organizing, leading, and controlling.
37

Budgeting
• Budgeting (or budgetary control) –
the process of finding out what’s
being done and comparing the
results with corresponding budget
data to verify accomplishments or to
remedy differences.
Types of Budget
4. Cash Budget
 Prepared after all other budget estimates are
completed, shows the anticipated receipts and
expenditures, the amount of working capital
available, the extent to which outside financing
may be required, and the periods and amounts of
cash available.
5. Master Budget
 Includes all major activities of the business, brings
together and coordinates all the activities of the
other budgets and can be thought of as a “budget
of budgets”.
Characteristics of an
Effective Control System
1. Valid Performance Standards
 Standards should be expressed in quantitative
terms, should be objective rather than subjective.
2. Adequate Information to Employees
 Information should be accessible as possible,
particularly when people must make decisions
quickly and frequently.
3. Acceptability to Employees
 Control systems should emphasize positive
behavior rather than trying to control negative
behavior alone.
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Types of Budget
1. Sales Budget
 Usually data for the sales budget that are prepared
by month, sale area, and product.
2. Production Budget
 Commonly expressed in physical units, required
information include types and capacities of
machines, economic quantities to produce, and
availability of materials.
3. Cost Production Budget
 Information is sometimes included in production
budgets, comparing production cost with sales price
shows whether or not profit margins are adequate.
Comparative Balance Sheets
• It shows the financial picture of a
company at a given time. Itemizes 3
elements:
1. Assets – values of the various items the corporation
owns.
2. Liabilities – amounts the corporation owes to various
creditors.
3. Stockholder’s Equity – amount accruing to the
corporation’s owners.
• Balance Sheet Equation:
 Assets = Liabilities + Stockholder’s Equity
• Profit and Loss Statement
 An itemized financial statement of the income and
expenses of the company’s operations during the
accounting period.
DIAGNOSTIC EXAMINATION
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1) Management is 4) When engineer enters management, what is the most

a) an art c) both an art and science likely problem he finds difficult to acquire?
b) a science d) neither art nor science a) Learning to trust others
b) Learning how to work through others
2) Engineers can become good managers only through c) Learning how to take satisfaction in the work of others
___________. d) All of the above
a) experience
b) taking master degree in management 5) What management functions refers to the process of
c) trainings anticipating problems, analyzing them, estimating their
d) effective career planning likely impact and determining actions that will lead to the
desired outcomes and goals?
3) If you are an engineer waiting to become a manager, a) Planning c) Controlling
what will you do? b) Leading d) Organizing
a) Develop new talents c) Broaden your point of view
b) Acquire new values d) All of the choices

6) What refers to the establishing interrelationships 8) Middle management level undertakes what planning
between people and things in such a way that human and activity?
materials resources are effectively focused toward a) Intermediate planning c) Operational planning
achieving the goal of the company? b) Strategic planning d) Direct planning
a) Planning c) Controlling
b) Leading d) Organizing 9) Strategic planning is undertaken in which management
level?
7) What refers to the management function which is to a) Lower management level
encourage others to follow the example set for them, b) Middle management level
with great commitment and conviction? c) Top management level
a) Staffing c) Controlling d) Lowest management level
b) Motivating d) Leading

10) If you are appointed as a division manager, your first 12) What refers to a description of whether the
task is most likely to objectives are accomplished?
a) set goals a) Efficiency
b) determine the resources needed b) Effectiveness
c) set a standard c) Ability to manage
d) Develop strategies and tactics d) Decision-making ability

11) What is the disadvantage of free-rein style of 13) The process of partitioning an organization into
leadership? subunits to improve efficiency is known as _________.
a) Little managerial control and high degree of risk a) division of labor
b) Time consuming and cost ineffective b) segmentation
c) Little ideas from subordinates in decision-making c) departmentalization
d) All of the choices d) territorialization

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14) When structuring an organization, the engineer 1) Management is

manager must be concerned with the determining the a) an art c) both an art and science
scope of work and how it is combined in a job. This b) a science d) neither art nor science
refers to _____________.
a) division of labor 2) Engineers can become good managers only through
b) delegation of authority ___________.
c) departmentalization a) experience
d) span of control b) taking master degree in management
c) trainings
15) What refers to a process of influencing and d) effective career planning
supporting others to work enthusiastically toward
achieving objectives? 3) If you are an engineer waiting to become a manager,
a) Power c) Leadership what will you do?
b) Teamwork d) Charisms a) Develop new talents c) Broaden your point of view
b) Acquire new values d) All of the choices

4) When engineer enters management, what is the most 6) What refers to the establishing interrelationships
likely problem he finds difficult to acquire? between people and things in such a way that human and
a) Learning to trust others materials resources are effectively focused toward
b) Learning how to work through others achieving the goal of the company?
c) Learning how to take satisfaction in the work of others a) Planning c) Controlling
d) All of the above b) Leading d) Organizing

5) What management functions refers to the process of 7) What refers to the management function which is to
anticipating problems, analyzing them, estimating their encourage others to follow the example set for them,
likely impact and determining actions that will lead to the with great commitment and conviction?
desired outcomes and goals? a) Staffing c) Controlling
a) Planning c) Controlling b) Motivating d) Leading
b) Leading d) Organizing

8) Middle management level undertakes what planning 10) If you are appointed as a division manager, your first
activity? task is most likely to
a) Intermediate planning c) Operational planning a) set goals
b) Strategic planning d) Direct planning b) determine the resources needed
c) set a standard
9) Strategic planning is undertaken in which management d) Develop strategies and tactics
level?
a) Lower management level 11) What is the disadvantage of free-rein style of
b) Middle management level leadership?
c) Top management level a) Little managerial control and high degree of risk
d) Lowest management level b) Time consuming and cost ineffective
c) Little ideas from subordinates in decision-making
d) All of the choices

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12) What refers to a description of whether the 14) When structuring an organization, the engineer
objectives are accomplished? manager must be concerned with the determining the
a) Efficiency scope of work and how it is combined in a job. This
b) Effectiveness refers to _____________.
c) Ability to manage a) division of labor
d) Decision-making ability b) delegation of authority
c) departmentalization
13) The process of partitioning an organization into d) span of control
subunits to improve efficiency is known as _________.
a) division of labor 15) What refers to a process of influencing and
b) segmentation supporting others to work enthusiastically toward
c) departmentalization achieving objectives?
d) territorialization a) Power c) Leadership
b) Teamwork d) Charisms

41