NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY

Department of Electronic Engineering

Engineering Management [TEE 3255]

3: Management Functions:
Organising
Introduction
Introduction

ORGANISING
PLANNING Determining how best to
(& DECISION MAKING) group activities and
resources

CONTROLLING LEADING
 Introduction

• Organising – refers to arranging and relating work

so that it can be done efficiently by the appropriate
people.
• Organising – is the process of bringing together
physical, financial and human resources and
developing productive relationship amongst them
to achieve organisational goals.
 Introduction

• Organising – refers to assembling and

coordinating the human, financial, physical,
informational, and other resources needed to
achieve goals
• Building a dynamic organisation (Organising in the
21st century) requires:
• viewing people as the most valuable resource
• building flexible organisations
 Introduction

• Corporate efficiency is usually achieved by a

proper partition and distribution of work, as well
as by a suitable coordination
 Introduction

• Managers are empowered to design the

organisational structure which in turn:
• Ensures that important work gets done in priority order
• Forms the basis for wage and salary administration
• Aids delegation
• Facilitates communication
• Promotes growth and diversification
• Encourages teamwork
• Stimulates creativity
 Introduction

• It is generally true that dedicated people can

make any organisation work.
• However, dedicated people in well-organised
units can get outstanding work done.
• “Too little liberty brings stagnation and too much
brings chaos.” Bernard Russell
 Introduction

• Authority - Power to command, act or make

decisions (Resource, Legal, Position & Expert)
• Responsibility - Duty to perform work efficiently
and in professional manner
• Accountability - Upwards directed obligation for
securing the desired results
Activities of Organising
 Activities of Organising

• Organising consists of several specific activities

that improve efficiency in performing work.
1. Organising one’s own workplace for
productivity
2. Developing organisational structure
3. Delegating
4. Establishing working relationships
Organising Own Workplace for Productivity
Organising Own Workplace for Productivity

• Engineering managers need to be organised with

respect to time, paper, and space.
• “The less you have, the less you have to sort
through.”
Organising Own Workplace for Productivity

• Recommendations for the engineering managers

to become more efficient:
1. Plan and prioritise the daily work tasks
• Use an online calendar
• Maintain a “to-do” list.
2. Create a file system for efficient retrieval
3. Develop one’s own system for names and contact
information
Organisational Structure
 Organisational Structure

• Organisational structures help ensure that

important work related to the key objectives of
the unit or department is performed.
• Managers setup the right structure to eliminate or
minimize the overlap and the duplication of
responsibilities.
 Functional organisation

• Companies that prefer the functional structure

establish specific departments responsible for
manufacturing, finance, marketing, sales,
engineering, design, operation, procurement etc.
 Functional organisation

Technical
Director

Mechanical System Electrical Production Quality

design engineering design engineering control
 Functional organisation

• Advantages:
1. Better communication within department
2. Permits a hierarchy of skills to be developed and
maintained
3. Facilitates specialization in order to achieve high
levels of excellence
4. Simplifies coordination as experts in various
functional areas are logically grouped together
5. Resource allocation - costs are reduced by avoiding
duplication of work and use of company resources
 Functional organisation

• Disadvantages:
1. Encourages excessive centralization
2. Departmental boundaries delays decision-making
3. Overspecialisation
4. Restricts the development of managerial skills of
employees
5. Limits employee growth because of constrained
exposure to professional experience outside of the
departments.
 Discipline-Based organisation

• These organisations contain departments for

specific disciplines so that specialists may focus
on these disciplines in order to excel in research
and other activities they pursue.
 Discipline-Based organisation

Faculty of
Engineering

Industrial & Fibre &

Chemical Civil & Water Electronic
Manufacturing Polymer
Engineering Engineering Engineering
Engineering Engineering
 Product/Region-Based organisation

• Large companies may produce and market

products/services of various types to different
customers in geographically dispersed locations.
• More often than not, each of these products /
services may require different production, sales,
and business strategies to achieve success in the
marketplace.
 Product-Based organisation

Technical General
Manager

Renewable
Medical Lighting Appliances Security
Energy
 Region-Based organisation

CEO

North America European Asia Pacific Latin America

Africa division
division division division division
 Product/Region-Based organisation

• Advantages:
1. Focuses on end products/services or geographical
regions for improved local adaptation
2. Facilitates companywide coordination
3. Encourages management development of
employees
4. Provides for decentralization
5. Opens ways for unlimited growth.
 Product/Region-Based organisation

• Disadvantages:
1. Costs may be high due to layers and autonomous or
duplicated facilities
2. It may require added management talents
3. Specialists may easily become obsolete due to a
lack of focus and dedication
4. Changes are slow to implement because of the
complex organisational bureaucracy
 Matrix organisation

• Used as a short-term arrangement for specific

projects and tasks involving both functional group
employees and project managers
• Project managers have management support and
certain resources e.g. money, time, facilities but
they “borrow” employees from the functional
groups to accomplish the work
 Matrix organisation
Functional Control

Project A

Project-based
Control Project B

Project C

Engineering Production Logistics Design

 Matrix organisation

• Advantages:
1. Project managers focus on schedule and cost,
whereas functional managers concentrate on work
quality and expertise.
2. It is excellent for participating employees to achieve
wide exposure within the company by interacting
with those outside of their special domains of
expertise.
 Matrix organisation

• Disadvantages:
1. It requires participating employees to report to two
bosses (dual reporting), thus violating the “unity
command” principle.
2. Conflicts between the functional and project
managers are frequent and severe, mostly with
respect to task priority, manpower assignment,
interests, quality versus urgency, performance
appraisal, employee promotion etc
 Matrix organisation

• Matrix organisation demands a delicate balance of

power between functional and project managers.
• Many companies in industry are moving away
from the matrix organisations in favour of teams
because of the highlighted likelihood of conflicts.
 Team organisation

• A team is composed of members who are “on

loan” from their respective functional
departments and are thus assigned to work full
time for the team leader in tackling high-priority,
short-duration tasks or projects
Team organisation
Functional Control

Team Leader

Member A

Member B

Member C

Member D

Engineering Production Logistics Design

 Network organisation

• A network organisation is a collection of

autonomous firms or units which are coordinated
and controlled to behave as a single larger entity.
 Network organisation

• The entities that make up a network organisation

are usually legally independent entities (separate
firms).
• Some of the entities may be wholly owned
subsidiaries.
• They can even be divisions within the company,
but treated as separate companies that sell to
outside customers.
Network organisation
 Network organisation

• Companies even form alliances, networks,

establish supply chains with regional companies
to manufacture, assemble, market, distribute and
service products for specific regional markets.
• At the nodes of such networks are knowledge
workers who manage relationships (e.g.,
suppliers, customers, functional groups within an
organisation, and other such partners)
 Network organisation

• Challenges:
• Partners in the networks may be of different cultural
and business backgrounds with divergent value
systems and perspectives, and may be dispersed in
different geographical regions.
• Engineering managers may also be challenged by the
expected resistance to change, difference in working
habits, absence of motivation and slowness in
consensus building and decision-making.
 Network organisation

• These organisations exhibit several unique

features:
1. All members are independent, flexible, empowered.
and responsible.
2. Members tend to self-organise themselves through
intensive interactions and form self-directed network
organisations.
3. The flexible organisational form fosters creativity and
innovation of empowered members.
Organising for Corporate Performance
 Organising for Corporate Performance

• Management can put the right people together and

keep the wrong people separated so that work
efficiency and goal attainment can be greatly
enhanced (Lawler 2001).
• Following are several best practice examples of
how company productivity can be raised by
employing Organising strategies.
 Profitability: Service Profit Chain Model

• Service companies have five stakeholders, i.e.

customers, employees, suppliers, investors, and
the community.
• Frontline workers and customers need to be the centre of
management’s concern.
• As profits come from customers, treat employees well so that
they make customers happy, who in turn buy more, which leads
to improved corporate profitability, and allows suppliers and
investors to be paid properly, as well as avoiding upsetting the
communities in which they operate.
 Profitability: Service Profit Chain Model

• Organisational strategies refer to preparatory

activities and tasks related to workplace design,
job design, employee selection and development,
employee rewards and recognition, and the
introduction of applicable tools for serving
customers.
Profitability: Service Profit Chain Model

Organisational Employee Employee retention

strategies satisfaction and productivity

Customer External service

Customer loyalty
satisfaction value

Revenue growth Profitability

 Profitability: Service Profit Chain Model

• Customer satisfaction is the ultimate goal that all

service companies want to achieve.
• Service quality is a function of the gap between
perceptions of active service received and
customer’s expectations beforehand
• Customer loyalty results in retention, repeat
business, and referrals.
 High Performance: Flexible Structure

• New-style companies achieved great business

success by being relentlessly committed and by
exercising discipline from the top, as well as
practicing three organisational principles:
1. Make it everyone’s job to identify new opportunities.
2. Decide quickly on project priority - Speed and
coordination are critically important in implementation.
3. Hire people for specific, key roles such as marketing
and technology support.
 Organising for Innovation

• Some companies are more focused than others

on developing and sustaining corporate
competitiveness by nurturing innovation.
• Innovation can be fostered by company structure.
• There are two types of innovations:
1. autonomous inventions
2. systemic inventions.
 Organising for Innovation

• Autonomous inventions are those which can be

pursued independently of other innovations.
• Systemic inventions are those that must be
developed in close coordination with others.
• Autonomous inventions are better suited for virtual
organisations because they may be pursued
independently of other inventions.
• Vertical organisations are more likely to succeed in
pursuing systemic inventions that require close
coordination and intensive information sharing.
 Organising for Innovation

• 10 types of innovation based on these categories:

1. Business model e.g. strategy to generate profitability via pricing, marketing
2. Network e.g. supply chain partners
3. Structure e.g. organisational design, joint ventures
4. Process e.g. processes related to design, production
5. Products/services design e.g. novel features, unique functionalities
6. Products/service systems e.g. value-added capabilities to form
ecosystems
7. Customer support services e.g. web design, information access
8. Channel e.g. advertising to reach customers, delivery of products/services)
9. Brand e.g. creation and maintenance of brand reputation
10. Customer engagement e.g. customer interactions, relationship
management
 Organising for Innovation

• Innovations in all those categories are valuable,

as some will create strategic differentiation (e.g.,
categories 1, 5, 6, and 9) and others enhance
operational excellence of the enterprise.
 Performance at Design–Manuf. Interface

• Conflicts are known to exist at the interface

between product design and manufacturing.
• While product design may have focused on
performance and aesthetics, manufacturing looks
after production efficiency.
• These conflicts cause frequent cost overruns and
product introduction delays.
 Performance at Design–Manuf. Interface

• Also contributing to these conflicts are other

factors such as (1) funding periods for design and
manufacturing that do not overlap, (2) differences
in education between design and manufacturing
staff, and (3) offices that are not at the same
location.
 Performance at Design–Manuf. Interface

• Methods to eliminate this “silo” effect:

1. Institute a manufacturing sign-off. Manufacturing has veto
power over the final product design.
2. Appoint an integrator who performs liaison work between
design and manufacturing and offers a balanced view.
3. Form a cross-functional team composed of members of
design and manufacturing, with the final authority resting
with the engineering department.
4. Combine the manufacturing process and product design
into one department.
 Performance at Design–Manuf. Interface

• If the company’s culture is conducive to absorbing

organisational changes, then the organisational
options of the team or combined department are
to be preferred.
• On the other hand, if the manufacturing processes
and products are fixed, then the organisational
options of the sign-off or integrator tend to make
more sense.
 Heightened Employee Motivation

• Teams are temporary in nature because they are

built for specific objectives and will be disbanded
after their specific projects have been completed.
• Only in exceptional cases will teams be
exhaustively utilized on a permanent basis to
achieve business success.
• This is the case of AES Corporation.
 Heightened Employee Motivation

• AES Corporation - Runs 90 plants in 14 countries

as contract generator using regional and local
teams (5- 20 people each)
• Local teams for power plant operation and
maintenance.
• Members “own” the work they do and are
extraordinarily motivated
• Employee mobility is encouraged after skills are
verified by company exams
 Heightened Employee Motivation

• Company representatives attribute their business

success for Organising the company in teams to
the heightened level of employee motivation made
possible by the team empowerment practice.
 R & D and Marketing Interface

• High-tech companies need to pay special

attention to the interface between R&D and
marketing.
• To achieve business success, a linkage between
R&D and marketing must be established. When
marketing high-tech products or services,
companies typically follow two basic approaches:
 R & D and Marketing Interface

1. Market driven: When pursuing the market-driven

strategy, companies use marketing to define the
needs of customers and ask R&D to provide the
required innovations to satisfy such needs.
• The consequence of practicing a market-driven
strategy are missed opportunities (in case there
are delays in breakthrough innovations).
 R & D and Marketing Interface

2. Innovation driven: R&D employees take the lead

in the innovation-driven approach by first
making breakthrough inventions based on needs
as perceived by researchers.
• There are risks associated with this approach, as
the actual customers’ needs and wants may not
be sufficiently satisfied by the breakthrough
inventions at hand.
 R & D and Marketing Interface

• Organising a workable interface between R&D and

marketing is a way of dealing with both issues.
• Setting up a team of representatives of R&D and
marketing to constantly monitor relevant
activities and foster communications should be a
good Organising strategy (Ellis 2010).
Concurrent Engineering Teams
 Concurrent Engineering Teams

• A team is a small number of people (usually

between 2 and 25) who are committed to a
common purpose, develop mutual trust, possess
technical skills that are complementary, and
adopt an approach for which they hold themselves
mutually accountable.
 Concurrent Engineering Teams

• A learning team is one that is skilled at creating,

acquiring, and transferring knowledge and at
modifying its own behaviour to reflect new
knowledge and insights.
• Factors affecting team learning include:
1. Team composition
2. Team cultures
3. Leader’s style
 Concurrent Engineering Teams

• In a typical functional organisation, the

development of new products follows a sequential
process enumerated here:
• Marketing
• Design engineering
• Manufacturing engineering
• Service organisation.
• Production
 Concurrent Engineering Teams

• Such sequential processes are known to be

inherently ineffective with respect to coordination,
information sharing and decision-making.
• In a concurrent engineering team, representatives
of different functional groups including those from
procurement, finance, vendors and suppliers and
logistics are included as members.
 Concurrent Engineering Teams

• The keys to the success of concurrent engineering

teams are the following:
1. Management commitment
2. Ongoing communications
3. Teamwork training for all members
 Concurrent Engineering Teams

• Mercury Computer Systems, Massachusetts—

• Concurrent engineering team reduced the time to
market of process boards from 125 to 90 days.
• Hewlett-Packard Company, California—
• Cut the time to market its 54600 Oscilloscope by two-
thirds.
• Toyota Motor Corporation, Tokyo, Japan—
• Concurrent engineering decreased its product cost by
61%.
Delegating
 Delegating

• Delegating improves the engineering manager’s

overall efficiency.
• Within a specific form of organisation, the
engineering manager may or has to:
• Delegate authority and responsibility to selected
leaders and workers
• Establish the upward-directed accountability needed
to achieve the defined organisational objectives.
 Delegating

• Benefits of delegating:
1. Improve quality and quantity of work done
2. Allow manager to do manager’s job
3. Become knowledgeable of employee’s capabilities
4. Distribute work load efficiently/equitably
5. Develop leadership capabilities in people
6. Improve operating decisions - reducing cost
7. Facilitate teamwork, making job more satisfying to employees
8. Create opportunities for employees to gain recognition,
encouragement and incentives
9. Allow employees to develop new skills and knowledge, fostering
initiative and competence, and gaining self-confidence
10. Encourage employee growth/development
 Delegation Matrix

1. Employee
Can 1 3 2. Neither; if must,
Employee

then to be done
by engineering
manager
Cannot
2 4 3. Employee
4. Engineering
manager
Cannot Can

Engineering Manager
 What to Delegate

• Problems/Issue requiring exploration, study and

recommendation for decision making
• Activities coming within the job scope and
capabilities of employee
• Tasks fitting company’s needs and promoting
employee development and growth
 What not to Delegate

• Planning (to define the right things to do)

• Resolve morale problems, differences and
conflicts in groups/units
• Coaching and developing employees
• Review, evaluate and correct performance
• Own assignments from big bosses
• Others (own “pet” projects, tasks absent of talents)
 How to Delegate

• Communicate the importance of task, set goals

and performance indicators, check on
understanding / confidence
• Delegate responsibility for quality of work
• Allow operational decision making (resources,
method, sequence of tasks, etc.)
• Trust the employee and give recognition
• Retain own upward accountability
Establishing Working Relationships
 Establishing Working Relationships

• In complex organisational settings, clarifying

roles addresses the issues of authority and
accountability.
• Employees may assume:
• Line roles
• Coordinating roles (have line authority)
• Advisory roles (have staff authority)
 Conflict Resolution

• Typical real workplace conflicts:

1. Technical e.g. design, analysis, and interpretation
of test results;
2. Operational e.g. procedures to perform specific
tasks and assign responsibility
3. Emotional e.g. treating bruised egos and hurt
personal feelings
4. Political e.g. knowing whom to consult and who
has a say on specific projects or issues.
 Conflict Resolution

• Engineering managers may resolve conflicts

through:
1. Dominance — dictating a solution
2. Compromise — negotiation based on a relative
power base
3. Collaboration – that leads to finding a win–win
solution.
Informal organisations
 Informal organisations

• Types of informal organisations:

1. Social: groups that pursue specific common interests, shared
values, and beliefs; for example, beer clubs, bowling clubs, golf
leagues
2. Status: people want to associate with achievers for their status
e.g. persons well known for their technical skills, abilities, special
accomplishments, experience, tenure, charisma
3. Group: coalitions form to advance shared interests e.g. fitness
centres on site, day-care centres, foreign-language study groups
4. Location: depending on the flow of vital information, people tend to
migrate toward critical locations, such as the offices of executive
assistants, the desks of secretaries
 Informal organisations

• Engineering managers should be aware that

informal organisations encourage additional
bonding between employees.
• Because they contribute toward the smooth
operation of an organisation and members’ job
satisfaction, employee participation in informal
organisations are generally encouraged.
Conclusion
 Conclusion

• Organising is an important function of engineering

management with a direct impact on the
manager’s ability to get work done efficiently.
• Engineering managers need to understand the
power of Organising and use the function
intelligently
End of Management Functions:
Organising