Self-Instructional Manual (SIM)

UNIVERSITY OF MINDANAO
College of Engineering Education

Computer Engineering Program
Physically Distanced but Academically Engaged
Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)
CEE 108– ENGINEERING MANAGEMENT
Authors:
ENGR. KRISCA LYNGE C. DONAYRE
ENGR. ANGELIE UMBAY
THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS INTENDED
USE. THIS IS INTENDED ONLY FOR THE USE OF THE STUDENTS
WHO ARE OFFICIALLY ENROLLED IN THE COURSE/SUBJECT.
EXPECT REVISIONS OF THE MANUAL.
College of Engineering Education
2nd Floor, BE Building
Matina Campus, Davao City
Telefax: (082)296-1084
Phone No.: (082)300-5456/300-0647 Local 131
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TABLE OF CONTENTS
PAGE
Cover Page ……………………………………………………………………………………………….. 1
Table of Contents………………………………………………………………………………………. 2
Course Outline…………………………………………………………………………………………... 6
Course Outline Policy………………………………………………………………………………… 6
Course Information…………………………………………………………………………………… 9
Topic/ Activity
Unit Learning Outcomes- Unit 1……………………………………………………………. 10
Big Picture in Focus: ULO-a…………………………………………………………………..…… 10
Metalanguage…………………………………………………………………………………. 10
Essential Knowledge………………………………………………………………………. 10
Self-Help………………………………………………………………………………………… 16
Let’s Check …………………………………………………………………………………… 17
Let’s Analyze…………………………………………………………………………………... 17
In a Nutshell…………………………………………………………………………………… 17
Q & A List ……………………………………………………………………………………..... 17
Big Picture in Focus: ULO-b…………………………………………………………………..…… 18
Metalanguage…………………………………………………………………………………. 18
Essential Knowledge……………………………………………………………………….. 18
Self-Help………………………………………………………………………………………… 37
Let’s Check …………………………………………………………………………………… 38
Let’s Analyze…………………………………………………………………………………... 38
In a Nutshell……………………………………………………………………………………. 38
Q & A List ……………………………………………………………………………………….. 38
Big Picture in Focus: ULO-c…………………………………………………………………..……. 39
Metalanguage………………………………………………………………………………….. 39
Essential Knowledge………………………………………………………………………... 39
Self-Help…………………………………………………………………………………………. 44
Let’s Check ……………………………………………………………………………………. 44
3
PAGE
Let’s Analyze…………………………………………………………………………………….. 45
In a Nutshell……………………………………………………………………………………... 45
Q & A List ……………………………………………………………………………………...…. 45
Big Picture in Focus: ULO-1d…………………………………………………………………..…... 46
Metalanguage…………………………………………………………………………………... 46
Essential Knowledge………………………………………………………………………… 46
Self-Help………………………………………………………………………………………….. 51
Let’s Check …………………………………………………………………………………….. 52
Let’s Analyze……………………………………………………………………………………. 52
In a Nutshell…………………………………………………………………………………….. 52
Q & A List ………………………………………………………………………………………... 52
Unit Learning Outcomes- Unit 2…………………………………………………………….. 53
Big Picture in Focus: ULO-a…………………………………………………………………..…….. 53
Metalanguage…………………………………………………………………………………... 53
Self-Help………………………………………………………………………………………….. 58
Let’s Check …………………………………………………………………………………….. 58
Let’s Analyze……………………………………………………………………………………. 59
In a Nutshell…………………………………………………………………………………….. 59
Q & A List ……………………………………………………………………………………...… 59
Big Picture in Focus: ULO-b…………………………………………………………………..…….. 60
Metalanguage…………………………………………………………………………………… 60
Self-Help………………………………………………………………………………………….. 70
Let’s Check …………………………………………………………………………………….. 70
Let’s Analyze……………………………………………………………………………………. 70
In a Nutshell…………………………………………………………………………………….. 71
Q & A List ………………………………………………………………………………………... 71
Big Picture in Focus: ULO-c…………………………………………………………………..…….. 72
Metalanguage…………………………………………………………………………………... 72
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PAGE
Self-Help………………………………………………………………………………………….. 75
Let’s Check …………………………………………………………………………………….. 75
Let’s Analyze…………………………………………………………………………………….. 76
In a Nutshell…………………………………………………………………………………….. 76
Q & A List ……………………………………………………………………………………...… 76
Unit Learning Outcomes- Unit 3……………………………………………………………… 77
Big Picture in Focus: ULO-a…………………………………………………………………..….. 77
Metalanguage…………………………………………………………………………………... 77
Self-Help………………………………………………………………………………………….. 84
Let’s Check …………………………………………………………………………………….. 84
Let’s Analyze…………………………………………………………………………………….. 85
In a Nutshell…………………………………………………………………………………….. 85
Q & A List ……………………………………………………………………………………...… 85
Big Picture in Focus: ULO-b…………………………………………………………………..….. 86
Metalanguage………………………………………………………………………………….. 86
Self-Help………………………………………………………………………………………….. 91
Let’s Check …………………………………………………………………………………….. 91
Let’s Analyze…………………………………………………………………………………….. 91
In a Nutshell…………………………………………………………………………………….. 92
Q & A List ………………………………………………………………………………………... 92
Big Picture in Focus: ULO-c…………………………………………………………………..…….. 93
Metalanguage…………………………………………………………………………………... 93
Self-Help………………………………………………………………………………………….. 97
Let’s Check …………………………………………………………………………………….. 97
Let’s Analyze…………………………………………………………………………………….. 98
In a Nutshell…………………………………………………………………………………….. 98
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PAGE
Q & A List ……………………………………………………………………………………...… 99
Unit Learning Outcomes- Unit 4 …………………………………………………………… 99
Big Picture in Focus: ULO-a…………………………………………………………………..….. 99
Metalanguage…………………………………………………………………………………... 100
Self-Help………………………………………………………………………………………….. 109
Let’s Check …………………………………………………………………………………….. 109
Let’s Analyze…………………………………………………………………………………….. 109
In a Nutshell…………………………………………………………………………………….. 109
Q & A List ……………………………………………………………………………………...… 110
Big Picture in Focus: ULO-b…………………………………………………………………..….. 111
Metalanguage………………………………………………………………………………….. 111
Self-Help………………………………………………………………………………………….. 116
Let’s Check …………………………………………………………………………………….. 116
Let’s Analyze…………………………………………………………………………………….. 117
In a Nutshell…………………………………………………………………………………….. 117
Q & A List ………………………………………………………………………………………... 118
Big Picture in Focus: ULO-c…………………………………………………………………..….. 118
Metalanguage………………………………………………………………………………… 118
Essential Knowledge………………………………………………………………………... 119
Self-Help………………………………………………………………………………………….. 125
Let’s Check …………………………………………………………………………………….. 126
Let’s Analyze…………………………………………………………………………………….. 126
In a Nutshell…………………………………………………………………………………….. 126
Q & A List ……………………………………………………………………………………...… 127
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Course Outline: CEE108 – Engineering Management
Course Coordinator: Mary Jean A. Bantan, ECE

Email: Mary_bantan@umindanao.edu.ph
Student Consultation: Online (LMS) or e-mail
Mobile: 0942-990-7484
Phone: (082) 296-1084 loc.133
Effectivity Date: August 2020
Mode of Delivery: Online Blended Delivery
Time Frame: 54 hours
Student Workload: Expected Self-Directed Learning
Pre-requisite: UGE 1 (Reading Comprehension)
Credit: 3.0 units
Course Outline Policy
Areas of Concern Details

Contact and Non-Contact Hours This 3-unit course self-instructional manual is intended for
blended learning mode of instructional delivery with
scheduled face-to-face or virtual sessions. The expected
number of hours will be 54, including the face-to-face or
virtual sessions which will be arranged by the course
coordinator. The face-to-face sessions shall include the
summative assessment tasks or examinations since this
course is vital in the licensure examination for engineers.
Assessment Task Submission The first assessment task (examination) shall be given on
the 3rd week subsequent to the first day of class. The
remaining assessment tasks shall be handed every after
two (2) weeks of each examination schedule. The
assessment paper shall be attached with a cover page
indicating the name of the course coordinator, date of
submission, and name of the student. The document should
be submitted on the same day through e-mail or Blackboard
LMS. It is also expected that you have already paid your
tuition and other fees before the submission of the
assessment task.
Since this course is included in the licensure examination

for engineers, you will be required to take the Multiple-
Choice Question exam inside the University as your final
exam. This should be scheduled ahead of time by your
course coordinator. This is non-negotiable for all licensure-
based programs.
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Penalties for Late The score for an assessment item submitted after the
Assignments/Assessments designated time on the due date, without an approved
extension of time, will be reduced by 5% of the possible
maximum score for that assessment item for each day or
part day that the assessment item is late.
Return of Assignments/ Assessment tasks will be returned to you two (2) weeks
Assessments after the submission with a mark and feedback. This will be
returned by email or via Blackboard portal.
For group assessment tasks, the course coordinator will
require some or few of the students for online or virtual
sessions to ask clarificatory questions to validate the
originality of the assessment task submitted and to ensure
that all the group members are involved.
Assignment Resubmission You should request in writing addressed to the course

coordinator your intention to resubmit an assessment task.
The resubmission is premised on the student’s failure to
comply reasonable circumstances e.g. illness, accidents
financial constraints.
Re-marking of Assessment Papers You should request in writing addressed to the program
coordinator your intention to appeal or contest the score
and Appeal
given to an assessment task. The letter should explicitly
explain the reasons/points to contest the grade. The
program coordinator shall communicate with the students
on the approval and disapproval of the request.
If disapproved by the course coordinator, you can elevate

your case to the program head or the dean with the original
letter of request. The final decision will come from the dean
of the college.
Grading System Assessment methods Weights

EXAMINATIONS 60%
A. Exam 1 10%
B. Exam 2 10%
C. Exam 3 10%
D. Exam 4 30%
CLASS PARTICIPATIONS 40%
E. Assignments/Seatwork 10%
F. Quizzes/Design 15%
G. Oral recitation/Oral 15%
Presentation/Group
Presentation
TOTAL 100%
Submission of the final grades shall follow the usual
University system and procedures.
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Student Communication You are required to have your own umindanao email
account which is a requirement to access the
BlackBoard portal. Then, the course coordinator shall
enroll the students to have access to the materials and
resources of the course. All communication formats: chat,
submission of assessment tasks, requests etc. shall be
through the portal and other university recognized
platforms.
You can also meet the course coordinator virtually

through the scheduled face-to-face sessions to raise
your issues and concerns.
For students who have not created their student email,
please contact the course coordinator or program head.
Contact Details of the Dean Dr. Charlito L. Cañesares, PME

Email: clcanesares@umindanao.edu.ph
Phone: (082) 296-1084 local 133
Contact Details of the Program Head Engr. Rolieven P. Cañizares

Email: rolieven_canizares@umindanao.edu.ph
Phone: (082) 296-1084 local 133
Students with Special Needs Students with special needs shall communicate with the
course coordinator about the nature of his/her special
needs. Depending on the nature of the need, the course
coordinator with the approval of the program head may
provide alternative assessment tasks or extension of the
deadline of submission of assessment tasks. However, the
alternative assessment tasks should still be in the service
of achieving the desired course learning outcomes.
Help Desk Contact CEE Blackboard Administrator:

Engr. Jetron A. Adtoon, MSCpE
Email: jadtoon@umindanao.edu.ph
Phone: +63 9055 267834
CEE:
Frida Santa O. Dagatan
Email: cee@umindanao.edu.ph
Phone: +63 9055 267834
GSTC:
Ronadora E. Deala, RPsy, RPm, RGC, LPT
Email: ronadora_deala@umindanao.edu.ph
Phone: +63 921 2122846
Silvino P. Josol
Email: gstcmain@umindanao.edu.ph
Phone: +63 906 0757721
Library Contact Brigida E. Bacani

Email: library@umindanao.edu.ph
Phone: +63 951 3766681
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Course Information – see/download course syllabus in the Black Board LMS
CC’s Voice: Hello students! I hope you are having a good day. Welcome to this course
CEE108 - Engineering Management! This subject will be focusing on how
you will build-up yourself in managerial workloads for the chosen industry.
By this time, I am positive that you really wanted to pursue your career in
the field of engineering and that you have envisioned yourself inventing,
designing, analyzing, building, and testing machines, complex systems,
structures, gadgets and materials for the benefit of humankind. After this
course you will be expected to show the following outcomes:
CO CO1. Identify and discuss the fundamentals of engineering management.
CO2. Describe the elements involved in solving an engineering

management problem by the means of engineering management
theories.
Let us begin!
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Big Picture
Week 1-3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to
a. be acquainted with the definition of engineering management and the

terms used in this course,
b. understand the evolution of management through its principles,
c. know the skills needed to become a good manager and what is the roles
of a manager, and
d. learned about decision making and what is an internal organization and its
different types
Big Picture in Focus: ULO(a). Be acquainted with the definition of

engineering management and the terms used in
this course.
Metalanguage
In this section, an introduction to engineering management and the most fundamental

terms applicable to curriculum analysis and presentation of ULOa will be specified
operationally to create a specific frame of reference as to how the terms work with this
course. You will come across these terms as we go through curriculum review.
1. Engineering. Engineering is a profession in which knowledge of math, and
natural science, gained by study, experience, and practice, is applied with
judgment to develop ways to use, economically, the materials and forces of
nature for the benefit of mankind.
2. Engineer. A person who applies his/her knowledge of mathematics and
science properly for mankind. Based on their specialty and level of job they
are supposed to perform a number of tasks.
3. Management. It is a process consisting of planning, leading, organizing, and
controlling, and these sets of principles will be applied for harnessing financial,
physical, informational, and human resources more effectively and efficiently
to accomplish an organization's goal.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the first three (3)
weeks of the course, you need to fully understand the following essential knowledge that will
be laid down in the succeeding pages. Please note that you are not limited to exclusively
refer to these resources. Thus, you are expected to utilize other books, research articles,
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and other resources that are available in the university’s library e.g. library,
search.proquest.com, etc.
Engineering
Engineering is defined by the Accreditation Board for Engineering and Technology
(ABET) that it is a profession in which knowledge of math, and natural science, gained by
study, experience, and practice, is applied with judgment to develop ways to use,
economically, the materials and forces of nature for the benefit of mankind. Engineering
design improves the quality of life while working within economical, technical, ethical, and
societal constraints.
Engineer
A person who applies his/her knowledge of mathematics and science properly for
mankind. Based on their specialty and level of job they are supposed to perform a number
of tasks. It is very important that the engineer knows what is expected of him/her so that
he/she may be able to perform his/her job effectively and efficiently.
Engineers are also known for their great contributions to the development of the
world’s civilization and they may be found contributing their share in the various levels of an
organization.
Role of the Engineer

When we go back then, during the prehistoric times, humanity had benefited from the
different equipment, projects, and tools developed by engineers. For example, the irrigation
system used to advocate crop growing from 6000 to 3000 BC. We should never forget the
stone bladed ax that was a helpful tool, too. In addition to the examples for some engineering
projects is the Great Pyramid of Giza (3000 to 600 B.C), road designing and building by the
Romans (600 B.C to A.D. 400), the creation of gunpowder and paper by Chinese Engineers
(100 A.D to 1600 A. D), the production and invention of steam engines (1601 A. D to 1799
A. D), and the manufacture of cars, gadgets, appliances, and many more. As of today, we
are grabbing the opportunity to make use of the tools, projects, and equipment developed
and continuously improve by engineers. With these contributions, engineers should have
become a vital segment of the world’s professions.
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Figure 1. Modern Inventions (Nguyen & Wu, 2009)
There are various problems that mankind is facing right now, and the engineers are
currently developing and producing concurrent solutions for those difficulties. More
specifically, the roles of engineering encompass in the following area:
1. Teaching- where the engineer gets a job as a professor of engineering courses

at a university. Some become deans, vice-presidents, and presidents later on.
Figure 2. Engineers working in the academe(www.mtu.edu)
2. Consulting- where the engineer works as a consultant of any individual or

organization requiring his/her services.
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Figure 3. Consulting Engineers
3. Management- where the engineer is assigned to manage groups of people

performing specific tasks.
Figure 4. Management Engineer (www.crowelec.com)
4. Government- where the engineer may find employment in the government

performing any of the various tasks in monitoring, controlling, and regulating the
activities of various institutions, both public or private.
5. Construction- this is where the construction engineer (a civil engineer) is either

directly in charge of the construction personnel or may have responsibility for the
quality of the construction process.
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Figure 4. Civil Engineers (www.interestingengineering.com)
6. Sales- where the engineer assists the company’s customers to meet their needs,
especially those require technical expertise.
7. Manufacturing- where the engineer is directly in charge of production personnel

or assumes responsibility for the product.
Figure 5. Engineers Working in Manufacturing Industry (www.marsint.com)
8. Design and development- where the engineer undertakes the activity of turning
a product concept to a finished physical item. They are in charge of the
improvement of current design and specification at the research, development,
production, design, and production stages of the product development.
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Figure 6. Design and Development (www.wisegeek.com)
9. Testing- where the engineer works in a unit that new products or parts are tested
for workability.
Figure 7. Test Engineer(www.wisegeek.com)
10. Research- where the engineer is engaged in the process of learning about nature
and codifying this knowledge into usable theories.
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Figure 8. Research Engineers (www.shutterstock.com)
Management
It is a process consisting of planning, leading, organizing, and controlling, and these
sets of principles will be applied for harnessing financial, physical, informational, and human
resources more effectively and efficiently to accomplish an organization's goal.
Manager
A person in charge of running or managing all or part of a corporation or a related
organization.
Engineering Management
It refers to the activity which combines "technical knowledge" with the ability to plan
and manage labor power, machinery, money, and materials. The term also defined as a
specialized form of management that is required to successfully lead technical personnel
and projects.
Engineering Managers
They are required to have training and experience in the field of general management
and the specific engineering disciplines that will be used by the engineering team to be
managed. They must have skills needed for coaching, mentoring, and inspiring technical
professionals, that are often very different from those necessary for individuals in other
fields.
Self-Help: You can also refer to the sources below to help you further understand
the lesson.
* Medina, R. Engineering Management. Rex Bookstore. 1st edition. Vol.1. pp.2-11
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Let’s Check!
Activity 1. Provide a list of ten engineers who became the president or general manager of
a large company and write the details of their success.
Let’s Analyze
Activity 1. Answer the following questions.
1. Why are engineers considered the most significant segment of society?
2. What are the expected of engineers in general?
3. What is engineering management?
4. How may one define management?
5. In what current concerns are engineering outputs needed?
In a Nutshell
As of today, engineers are greatly known for their contributions to the development
of the world’s civilization and modernization. There are a lot of areas where engineers are
necessary like in research, sales, construction, government, teachings, testing,
manufacturing, consulting, and management. Engineers may be found contributing their
share in the various level of organization. Engineering activities should be managed and
engineers are must be placed in a position where they have to learn management skills. We
always consider all the qualifications required to become an engineer manager. One may
become one if he/she carries the ability, motivation to manage, and opportunity to manage
are met.
In this activity, you will draw a projection of yourselves 10 years from now. You need
to state all the contributions that you have as an engineer in your chosen field and explain
every detail in your drawing.
Q&A List
If you have any questions regarding the discussions above, kindly write down on the
table provided.
Questions/Issues Answer
1.
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2.
3.
4.
5.
Keywords Index
This section lists down the keywords that help students for recall. Keywords are similar to
Metalanguage but without the definitions and descriptions. This section includes concepts
(a word or phrase), ideas, theories, names of people, and other vital terms to remember.
Technically speaking, all those included in the Metalanguage should be part of the
Keywords. However, Keywords can also include other important concepts or ideas not
stipulated in the Metalanguage. This section also helps in the review.
Engineer Engineering
Management Roles of the Engineer
Engineering Management Manager
Big Picture in Focus: ULO(b). Understand the evolution of

management through its principles.
Metalanguage
In this section, the history of engineering management, the different theories form as
it evolves, and to demonstrate ULO(b) will be tackled. These are the terms that you will
come across as we go through curriculum review.
1. Scientific Management. Scientific is more focused on the methods to develop an

improvement in productivity.
2. Classical Management. Classical management is based on the belief that workers
only have physical and economic needs.
3. Administrative Management. Administrative management tests the organizations
as total entities and emphasizes the ways to make them more efficient and effective.
Essential Knowledge
One of the keys to good management is the ability to recognize and apply
conventional management concepts and techniques. To plan efficiently and intelligently,
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managers need to develop an in-depth knowledge of past and current models, hypotheses,
and processes. The contemporary practice of management is common in all facets of human
life across all forms of organizations.
The History of Management

Basic management strategies have been traced back to the city of Ur (Iraq) in 3000
BC where Sumerian priests were the first to keep track of business transactions as a way to
document them. Early Egyptian Papyri texts, dating back to 1300 BC, acknowledged the
role of organization and administration in bureaucratic states. Similar documents for Ancient
China were found. Moses is credited as managing consultant to hire his father-in-law, Jethro.
Jethro helped develop the organization by which Moses controlled the Hebrews in the
wilderness.
Socrates described management as a competency separate from technical

knowledge and experience around 400 BC. Plato also accepted management as a separate
art and advocated specialization principles. In the Republic, Plato explains how carefully
chosen young men should be educated to cultivate the appropriate personalities and skills
to serve as leaders. Diocletian, a Roman emperor in 284 AD, reorganized his kingdom into
101 provinces and divided them into 13 dioceses. That marked the start of the delegation of
authority and the chain of command. Even though the management records of ancient
Rome are incomplete, the nature of the operation influenced managerial techniques in their
development. The city of Rome effectively grew to an empire using the scalar concept and
the delegation of authority.
Attila the Hun, king over the royal tribe about 433 AD, successfully unified all
independent Hunni tribes into one nation. Attila called leadership a privilege. He took full
responsibility for shaping others' efforts toward achieving the organization's goals. He
assigned responsibility for successes and setbacks at different levels and with agreed
accountability. His leadership values are still firm in modern governance today.
The early Roman Catholic Church used many organizational methods such as scalar
territorial structure, a hierarchical chain of command, and set out the division of duties for its
pope, clergy, and citizens. The early Church is also attributed to specialization, job
descriptions, personnel independence, and compulsory staff service.
Classical Management
This principle is the most widely use and the oldest managerial thought. This
management method emerged between 1885 and 1940 in an attempt to provide
enough management of organizations with a rational and empirical basis. Its origins derive
from the Industrial Revolution when people were brought together to work in factories as
opposed to the handicraft method under which people worked in small shops or homes. The
industrialization has created a need for strategic planning, coordination, power, and
regulation over all work activities.
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There are two fundamental thrusts in the classical management principle.
a. Scientific Management
It is more focused on the methods to develop an improvement in productivity.
Here are some examples of the people who made use of this principle.
James Watt Jr and Matthew Robinson Boulton
In 1796 the inventors and developers of the steam engine founded the Soho
Engineering Foundry in Great Britain. The management of the foundry was handed
over to the sons, James Watt Jr and Matthew Robinson Boulton, who introduced
management strategies systematically including:
• Market analysis and forecasting

• planned system configuration and workflow requirements
• planned position of the site
• project planning
• production process standards
• product feature standardization
Watt and Boulton, the managers of the company, created and maintained
comprehensive statistical records and sophisticated control systems in accounting
and cost analysis, from which they were able to measure costs and profits for each
computer-generated by each department. Watt and Boulton developed worker and
executive training and development programs for their workers, job-study programs
leading to the payment of outcomes based on work reports, management experience,
and other welfare services such as a sickness benefit plan carried out by an elected
workers committee.
Robert Owen
In Scotland, Robert Owen also referred to as the father of modern personnel

management has experimented with improving working conditions in the factories,
raising the minimum age for working children, providing meals for on-duty workers at
the factories. He also set up business stores to sell products at cost and tried to
develop the community by building houses and streets and making the city and
factory attractive.
Charles Babbage
Charles Babbage, best known for his book on the division of labor, On the
Economy of Machinery and Factories, published in 1832, argued that there should
be shared interests between workers and factory owners. Babbage strongly
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supported a system of income sharing whereby employees could benefit from their
productivity.
Henry Varnum Poor
Henry Varnum Poor, editor of American Railroad Journal concluded that

efficient management was what the railroads wanted. Bad created a management
framework with an organizational structure clearly defined so that individuals could
be held accountable. The system would also incorporate a top-down communication
reporting system across the organization.
Frederick W. Taylor
In the early 1880s, Frederick W. Taylor of the Midvale Steel Company

acknowledged the need for cooperation in labor and management, cost containment,
and study of working methods. He recognized the idea of greater efficiency obtained
by involving the workers, which he called "systematic soldiering." In essence, he
asked the Midvale management to research what constitutes a "good day's work".
His differential piecework strategy followed the results of his time studies and called
for high production wage rates deemed above normal and low work rates that fall
below the company's mark asset. There was simply no guarantee of regular wage
rates, or minimum wages, as we now learn, before Taylor's later programs.
The entire philosophy of Taylor was predicated on the premise that

management and the worker's primary interests are the same. If the goal of
management was lower labor costs then the goal of higher salaries for the workers
could easily be achieved as their work was considered tangible. It was also Taylor's
belief that once the staff realized the great advantages of scientific management, they
would develop a better mental attitude towards management and one another
immediately, thereby removing the need for constructive feedback and complaints.
According to Taylor, there are 4 principles of scientific management:
1. Replace rule-of-thumb work methods based on a scientific study of the tasks.

2. Scientifically select, train, and develop each worker rather than passively leaving
them to train themselves.
3. Cooperate with the workers to ensure that the scientifically developed methods
are being followed
4. Divide work nearly equally between managers and workers, so that the managers
apply scientific management principles to planning the task, and the workers
perform the tasks.
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Henry L. Gant
Another Taylor's colleague at Bethlehem Steel Works, Henry L. Gantt, has

introduced a wage compensation system deemed much superior to the Taylor's.
Gantt's incentive program gave bonuses to employees who were doing their jobs in
less time than the norm required. He also introduced a Supervisors Incentive
Program. Although making many contributions to the management area, Gantt is best
known for an offshoot of its assignment and incentive program. His system's principal
thrust was focused on completing a given amount of work in a given period. Using a
simple graphic bar map, the “Gantt Chart”, he developed planning and control
techniques to show relationships between planned and completed work on one axis
and time spent on the other.
Frank and Lillian Gilbreth
Frank and Lillian Gilbreth, both adherents of Taylor, are known for their
contributions to production and operations. They are best known for their study of
time and motion. The Gilbreths created the "laws of motion economy" from these
studies, which involved 22 principles dealing with:
• the use of the human body
• the workplace arrangement
• tools and equipment design
b. General Administrative Management

It is also called the Administrative Management Theory, which tests the
organizations as total entities and gives emphasis to the ways to make them more
efficient and effective.
Although scientific management concentrated on workers as persons and their

responsibilities, the general theory of administrative management dealt with the
complete organization of management. The theory of general management was an
attempt to establish a much wider theory regarding administrative management roles
and is considered the predecessor to modern organizational theory.
Here are some examples of the people who made use of this principle.
Henri Fayol
A Frenchman called Henri Fayol introduced "systematic management theory"

into the management world around the turn of the century. From 1888 until he died
in 1915, Fayol was an executive and mining engineer and played an important role
in the management field. According to Fayol, every manager's basic functions
included planning, arranging, directing, managing, and controlling. Fayol proposed
that all activities involving industrial projects could be divided into six parts:
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1. Technical which involved the production
2. The commercial included buying, selling, and exchange.
3. Financial which increased the search for, and optimum use of capital
4. Security which protected property
5. Accounting which included statistical analysis
6. Managerial which encompassed planning, organization, command,
coordination, and control.
Under the structure of Fayol, the command mechanism continued to work

efficiently and effectively through a set of methods of communication and control. He
proposed daily meetings with department heads and liaison officers to enhance
organizational operational cohesion.
Max Weber
Max Weber, the father of bureaucratic management, established a structure

in which a set of primary occupations and 63 management experience duties were
assigned to the employee within an office. After a formal division of labor that followed
organizational goals and objectives, each lower office was accountable to the next
higher one. People employed in each office were selected based on their
qualifications for their job. Their main duties were the primary occupations or
classifications that were allocated to them after hiring. Promotions have been
structured to reward seniority, success, or both. Promotions were not influenced by
political maneuvers, according to Weber's strategy.
Charles I. Barnard
Chester I. Barnard is regarded as a significant transformative figure who

attempted to connect scientific management with human relations. Barnard described
an organization as a network of a discerning individual or coordinated activities or
powers. Barnard introduced a theory concerning the acceptance of authority based
on free will and outside forces. The acceptance theory of authority maintained that
employees considered the validity of a superior’s orders and then decided
consciously whether to accept them or not. A directive was accepted by the employee
if he understood it, was able to follow it, and he believed it appropriate as it related to
his understanding of organizational goals.
Along with any formal organization, an informal organization always appeared.
An informal organization dealt with communication and relationships that the formal
structure was not equipped to handle. Informal groups were considered essential
because they established attitudes, customs, and standards. According to Barnard,
the characteristics of the informal contacts or interactions were that they occurred
repeatedly without any specific unified purpose. This is a distinct difference from
modern theory, which maintains that a major function of informal organizations is to
achieve intergroup goals that are not met by formal organizations.
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Luther Gulick
Gulick added the concept of span of control, which addressed the factors
limiting the number of people a manager could supervise. He also recommended
unity of command because he felt that people should know to whom they were
responsible. His homogeneity of work centered on the fact that an organization
should not combine dissimilar activities in single agencies. This was the basis of
Gulick’s major contribution in the area of departmentalization.
Lyndall Urwick
Lyndall Urwick synthesized and consolidated previous writings and research

concerning the structure of management and the function of the executive.
Additionally, Urwick’s contributions included fostering modern thought about the
management functions of planning, organizing, controlling, and developing general
managerial guidelines. Like Fayol, he generated a list of ten general principles for
improving managerial effectiveness.
James Mooney
James Mooney developed three primary management principles:

(1) the coordination principle;
(2) the scalar principle; and
(3) the functional principle.
Coordination was considered the first principle and it contained the other two.
It involved individuals performing activities together to obtain a common goal. The
scalar principle was second, and it was described as the rating of the duties involved
for different members of the organization according to the degrees of authority and
corresponding responsibility. The functional principle was defined as the
differentiation between various kinds of duty.
Classical Management Contribution
The primary contributions of the classical management movement include the

following:
• applying science to the practice of management
• developing the foundation for later management developments
• advancing the concept of the basic management functions of planning,
organizing, influencing, and controlling
• classifying relevant management processes, functions, and skills which are
still acknowledged as key concepts today
• articulating and applying specific principles of formal management
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• focusing attention on management as a legitimate topic worthy of scientific
inquiry.
The major limitations of the classical management movement are that it assumes that
each worker is an economic man and will, therefore, work harder to make more money; it is
most suitable for uncomplicated and relatively stable organizations, whereas most of today’s
organizations are complex and aggressive; it does not deal with the relationship between an
organization and its environment, and most classical theorists regard employees as tools to
be used to achieve organizational goals rather than as valuable resources.
Behavioral Management Principle
In the 1920s and 1930s, several individuals were convinced that scientific
management was short-sighted and incomplete. Such researchers claimed that the human
elements of business organizations have been overlooked.
The "behavioral management principle" is a management approach that focuses

specifically on human cognition, motivation, and leadership, as distinguished from the basic
mechanical performance. The campaign for behavior control involves the trend of public
relations as well as social behavior. The behavioral management principle explores the
actions of workers in the organizational environment.
There are two major thrusts interpersonal interactions and organizational behavior.
Human Relations Management Theory
Human relations are the method of recruiting workers, meeting their needs, promoting
a culture of the workplace, and resolving disputes between various workers or between
employees and the management. Understanding some of how human relationships can
affect a company's expense, profitability, and long-term economic sustainability helps
underline its importance.
The management theory of human relations started its development during the
industrial revolution in the early 1920s. At that time, the focus of the business was on
profitability. Professor Elton Mayo (Hawthorne Study) started his experiments to prove
people's value to productivity-not to machines. The Hawthorne experiment led Mayo to an
understanding of the internal dynamics of informal groups in organizations. They discovered
26
that the relationships between supervisors, subordinates, and peers had a stronger effect
on productivity than either economic benefits or the organization’s physical environment.
The results of Hawthorne studies by Professor Elton Mayo proved that relationships
are the element most affecting productivity. The researchers realized improved productivity
due to relationships and being part of a cohesive community in which the work of each
employee had a direct impact on team performance.
Motivational Management Theory
1. Maslow’s Need Hierarchy Theory
Perhaps it is fair to assume that the most well-known theory of motivation is

that the principle of Maslow's needs hierarchy which is based on human needs.
Drawing primarily on his clinical experience, he classified all human needs from the
lower to the higher order in a hierarchical way.
Essentially, he assumed it would no longer help to inspire a man after a given

level of need is met. Then one has to trigger the next higher level of need to motivate
the guy. In his hierarchy of needs, Maslow defined five levels as shown in figure 9.
Figure 9. Marlow’s Need Hierarchy
Physiological Needs
These needs are fundamental to human life, and thus include food, water,
clothing, air, shelter, and life necessities. These needs relate to the survival of human
life and its maintenance. They have a tremendous impact on human behavior. Such
27
needs must be addressed at least partially in the first place before higher-level needs
arise. When physiological needs are satisfied, man is no longer driven by them.
Safety Needs
The next needs that are felt after fulfilling the physiological needs are called
health and protection needs. These needs find expression in priorities such as
economic security and physical hazard safety. Meeting those needs requires more
money and, thus, causes the person to work more. Like physiological needs, once
they are fulfilled these become inactive.
Social Needs
Humans are social beings. Therefore, he has an interest in social contact,
companionship, belonging, etc. It is this socialization and belonging that is why
people tend to work in groups and particularly older people go to work.
Esteem Needs
Such needs include self-esteem and respect for oneself. They include those
needs that indicate self-confidence, accomplishment, ability, experience, and
freedom. Meeting the needs of integrity contributes to self-confidence, resilience, and
the desire to be successful within the organization. However, the failure to fulfill these
needs contributes to feelings of inferiority, vulnerability, and helplessness.
Self-actualization Needs
Kurt Goldstein coined the word self-actualization, which involves being
actualized in what one may be good at. Nevertheless, self-actualization is the
encouragement of the individual to turn the self-perception into reality. This point
reflects the convergence of every human being's lower, intermediate, and higher
needs. In other words, the last step under the concept of need hierarchy is the need
for self-actualization. This is about fulfillment.
Human needs to obey a certain sequence of dominance according to Maslow.

The second need does not occur until the first needs are reasonably satisfied, and
the third need does not emerge until the first two needs have been reasonably
satisfied and it continues. The other side of the continuum of need is the limitlessness
of human needs. Maslow's need for the principle of hierarchy is not without its
detractors, however.
Herzberg’s Motivation Hygiene Theory
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The psychologist Frederick Herzberg expanded Maslow's research and
introduced a new theory of motivation popularly known as Herzberg's Theory of
Motivation Hygiene (Two-Factor). Herzberg conducted a widely publicized
motivational survey of 200 accountants and engineers in and around Western
Pennsylvania, employed by businesses.
He asked these people to identify two major incidents at work:
(1) When was your job especially good, and;

(2) When was your job extremely bad? He used the method of collecting data by
a critical incident.
The responses were deemed very interesting and relatively consistent when
evaluated. The answers respondents gave were substantially different when they felt
positive about their work than the answers provided when they felt bad. Good feelings
reported were generally associated with work satisfaction while bad feelings were
associated with work dissatisfaction. Herzberg named motivators for work satisfiers
and he identified hygiene or maintenance reasons for work dissatisfies. The
motivators and hygiene considerations, taken together, have become known as
Herzberg's two-factor motivation theory.
Figure 10. Herzberg’s Two-Factor Model

The opposite of satisfaction, according to Herzberg, is not dissatisfaction. The
underlying explanation, he says, is that removing dissatisfying features from a work
doesn't automatically make the job satisfactory. He assumes that a dual continuum
exists. According to Herzberg, the motivators of today are the hygiene of tomorrow
29
since the latter starts affecting people's actions when they get them. Accordingly,
one's grooming may be another's motivator.
McClelland’s Need Theory
Another well-known need-based motivation theory is the paradigm developed

by McClelland and his colleagues, as opposed to the hierarchy of satisfaction-
dissatisfaction needs. McClelland developed his theory based on a long list of
motivations and manifest needs provided by Henry Murray which he used in his early
personality studies. The need-theory of McClelland is closely connected with learning
theory, as he claimed that needs are learned or gained by the kinds of things that
people encounter in their environment and culture.
He found that people who acquire a particular need behave differently from
those who do not have. His theory focuses on the following:
Need for Achievement

That is the drive to success, to meet a set of goals, and to aspire for success.
Or put it another way, the desire for accomplishment is conduct directed at the
competition with a level of excellence. McClelland found that people with a high need
for achievement perform better than those with a moderate or low need for
achievement and observed variations in regional/national motivation for
achievement.
Through his study, McClelland established the three high-needed attainer

characteristics that follow:
1. High-needed achievers have a deep willingness to take personal
responsibility for executing a problem-solving mission.
2. High-needed achievers prefer to set moderately demanding goals and take
calculated risks.
3. High-needed achievers have a deep desire for feedback on results.
Need for Power

The need for control is about influencing others, the need to impact others, the
ability to transform people, and the desire to make a difference in life. Those who are
in great need of power are those who want to monitor people and events. This leads
to ultimate human satisfaction.
People who need a high degree of power are defined by:
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1. An urge to control someone else and guide them.
2. Wanting to assert power over others.
3. Concern for the preservation of relationships between leaders and followers.
Need for Affiliation

The need for the association is characterized as a desire to develop and
maintain warm and friendly relationships with others. In several cases, the need for
the association is close to the social needs of Maslow.
Those characteristics of people with a strong need for the association are:
1. They have a deep desire to make others embrace and support.
2. They strive to be in line with the desires of people whose friendship and
companionship they respect.
3. They respect other people's feelings.
McGregor’s Participation Theory
Douglas McGregor proposed two distinct individual views focused on

employee engagement. The first negative, Theory X labeled, and the other positive,
Theory Y labeled.
The X theory is based on the premises of:

1. Humans are indolent by definition. That is, they like the minimum possible amount
of work.
2. Individuals lack motivation, fear accountability, and want others to lead them.
3. People are generally self-centered and oblivious to the needs and goals of the
organization.
4. People are usually gullible, and bright and not very sharp.
Instead, Theory Y assumes that:

1. By their very essence, people are not passive or immune to organizational
objectives.
2. They want to be held accountable.
3. We want to improve their organization.
4. People can control their behavior.
5. We need achievement.
With his theory X and Y, what McGregor sought to dramatize is to illustrate the
extremes to draw the fencing through which the organizational man is generally seen
to be acting. The reality remains that neither theory X nor the theory Y will belong to
any organizational individual. In reality, he/she shares the characteristics of both.
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What happens is that man swings with shifts in his mood and intentions in changing.
the environment from one set of property to the next.
Urwick’s Theory Z
Much after McGregor's theoretical propositions X and Y, the three theorists

Urwick, Rangnekar, and Ouchi-propounded the third theory called Z theory.
The two propositions in Urwicks’s theory are that:

i. Every person should know precisely the objectives of the organization and the
sum of their contribution through their efforts toward those objectives.
ii. Every person should also know that the organizational purpose relationship
should positively fulfill his / her needs.
The above two, in Urwick's opinion, make people prepared to act positively to
achieve both organizational and individual goals. Ouchi's Theory Z has, however,
drawn significant interest from both management practitioners and researchers. It
should be remembered that Z stands for nothing, is the last letter in the English
language.
The Z theory is based on four premises:

1. The powerful relationship between workers and the Organization
2. Employee Commitment and Participation
3. No Formal Organization Structure
4. Developing Human Capital
Ouchi's Theory Z reflects the adoption by American businesses of Japanese

management practices (group decision-making, social stability, work security, holistic
care for workers, etc.) In India, the postulates of the theory Z refer to Maruti-Suzuki,
Hero-Honda, etc.
Argyris’s Theory
Argyris formulated his theory of motivation based on the premise that

management activities influence individual behavior and development. In his opinion,
the seven changes in a human personality make him / her mature. In other words, an
individual's personality evolves.
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Figure 12. Argyris’ Theory
Argyris believes that immaturity occurs in individuals largely due to

organizational set-up and management activities such as role specialization, the
chain of command, unity of purpose, and time duration. He suggests a gradual
change from the current pyramidal organizational framework to the humanistic
paradigm to make individuals grow mature; from the current management system to
more versatile and participative management.
He mentions that such a condition will not only fulfill their physiological and
safety needs but will also inspire them to be prepared to make better use of their
physiological and protection needs. But it will also inspire them to plan and make
better use of their ability to achieve organizational goals.
Vroom’s Expectancy Theory
Some of the most commonly known motivation theories are provided by Victor
Vroom in his Theory of Expectancy "This is a cognitive motivation theory of the
process. The theory is based on the fundamental notions that people would be driven
to exert a high degree of effort when they believe there are relationships between the
effort they produce, the success they obtain, and the incentives they earn.
The relationships between notions of effort, performance, and reward are

depicted in Figure 13.
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Figure 13. Vroom’s Expectancy Theory
Thus, the primary constructs in motivation expectation theory are:

1. Valence – According to Vroom, Valence means the interest or importance one
puts on a given result or reward.
2. Expectancy – Efforts contribute to success.
3. Instrumentality – Vroom means by instrumentality, the assumption that success
is linked to rewards.
Thus, the motivation of Vroom can also be expressed as follows in the form of an
equation: Motivation = Valence x Expectation x Instrumentality
Being the multiplicative model in nature, all three variables must have high
positive values to mean the motivated choice of output. If either of the variables
reaches zero amounts, the probability of the output so inspired also touches zero.
Porter and Lawler’s Expectancy Theory
The theory by Porter and Lawler is an improvement on Vroom's principle of

expectation. We say motivation is not equal to happiness or success. The model
suggested by them follows some of the conventional simplistic assumptions made
about the positive connection between satisfaction and results. They proposed a
multi-variate model that would clarify the dynamic relationship between satisfaction
and efficiency.
Within Porter and Lawler's model, what is the key argument is that effort or
motivation does not explicitly lead to results. It is intact, influenced by skills and
characteristics and expectations of the position. In the end, success brings
satisfaction.
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Figure 14. Expectancy Theory Model
This model features three key components.
Effort
Effort refers to how much determination an employee is spending on a given
job. There are two factors that need to be considered on how much effort an
employee can put in a job, the importance of incentive and perception of effort-reward
probability.
Performance
The effort one puts into his / her results. All may or may not be similar. The
level of success is therefore dictated by the amount of work and the employee's skill
and job understanding. Therefore, if an employee has less skill and/or makes
misperception of his / her position, his / her performance may be low despite his / her
great efforts.
Satisfaction
Success contributes to complacency. The level of satisfaction depends on how
many bonuses one obtains. If the actual amount of rewards matches or exceeds the
expected equal incentives, then the employee should feel happy. In the region,
he/she will be dissatisfied if the actual rewards fall short of the perceived ones.
There may be two kinds of rewards-intrinsic and extrinsic rewards. Examples

of intrinsic rewards are for example a sense of satisfaction and self-actualization. So
35
far as extrinsic incentives are concerned, these may include working conditions and
rank.
By these facts, the managers should carefully reassess their reward system
and structure. The effort-performance-reward-satisfaction should be made integral to
the entire system of managing men in the organization.
Quantitative Management movement
The “quantitative management movement” focuses on adapting mathematical

models and processes to management situations. There are three major areas:
(1) management science;
(2) operations management;
(3) management information systems.
Management science deals specifically with the development of mathematical

models to assist in decision making and problem-solving.
Operations management centers more on the application of management science

to organizations.
Management information systems are complex communication systems designed

to provide information to managers.
During World War II, quantitative management arose as a result of creating

analytical and statistical methods for solving military problems. The British used
mathematical methods to determine their plane's overall effectiveness against the
Germans. The British mathematicians were able to develop an optimal allocation
model to give full aircraft efficiency. Quantitative management involves mathematical
methods, data models, optimization models, and computer simulations. For example,
managers may use linear programming to enhance decisions about resource
allocation. The use of critical path scheduling analysis will make scheduling projects
more effective. The major contributions of quantitative management include the
development of sophisticated quantitative methods to support decision-making and
problem-solving. Solving; using mathematical models to improve knowledge and
comprehension of dynamic organizational processes and circumstances.
36
Modern management
The "modern movement of management" continues to develop through the
introduction of theories. Modern management approaches include system approach,
system approach, contingency approach, and strategic management approach.
Classical, behavioral, and quantitative processes are combined along with structures
and crisis management theory to form the basis of the new process of management.
System approach
Programming method developed in the late 1960s. Herbert A. Simon is the
founding father of machine theory. A system is defined as a component set that
interacts regularly or interdependently, creating as a whole unit. The framework
description lets one see the critical variables and constraints, and their interactions.
“A system is composed of related and dependent elements which when in

interaction from a unity whole.” – Cleland and King
System design characteristics:

• A system should be composed of unique elements, units, or sub-units.
• A System Adjustment affects the other subsystems.
• Super-system affects any system.
• All structures along its subsystem must have certain shared objectives.
• A framework is objective-oriented.
• A machine cannot live in solitary confinement.
Contingency Approach
It understands the circumstances as a tactic too. It is established in the 1980s
as a platform for effective management. This approach embraces the complexities
and nuances of the company's structure. An entity is affected by its climate, and its
laws consist of physical resources, atmosphere, people, conditions of the society,
culture, and business.
Strategic management approach

Management uses a technique to sustain an enterprise by reducing external
risks and increasing incentives for improved protection and prosperity in the
organizations. The strategic management approach primarily concerns the decision-
making process and actions that decide the long-run success of an organization. Due
37
to the strengths and limitations of a company, it emphasizes tracking and assessing
external and internal environmental incentives and controls. On the other hand,
corporate strategy retains an integrative focus and therefore appears to look inward.
This focuses on an organization's assets being used effectively by formulating
general guidelines that will assist the company in achieving its goals and objectives.
Combines company policy with a greater emphasis on environment and strategy.
A simple way to describe the strategy is to list the more commonly accepted
elements that go into making a statement about the strategy. These are vision,
mission, strategic advantage, priorities and objectives, key factors of success,
common beliefs or corporate culture, and orientation to practice.
Strategic management requires four basic components:

• environmental scanning
• strategy formulation
• strategy implementation
• evaluation and control
The fundamental principles discussed in greater details will provide the

framework that will be required by successful future managers in terms of
understanding strategies, organizational cultures, and theories. Of course, there are
advantages and disadvantages associated with each one. Management's knowledge
and ability to adopt a variety of management ideas and strategies as the company is
continuously evolving are crucial to achieving and retaining a competitive edge over
others.
the lesson.
* Pindur, W., and Rogers, S.,(1995). The history of management: a global perspective.
Journal of Management History. Vol.1 No.1, pp59-77
38
Let’s Check!
Activity 1. For group discussion, you need to prepare a PowerPoint presentation about the
evolution of management theory.
Activity 2. Draw a timeline about the evolution of management theory and state the details
about these theories.
Let’s Analyze!
1. Why do many organizations still use the classical management principle?
2. How can be improved, updated the management theory, training, and practice
using recent scientific discoveries?
3. Do we need management in the digital age? What management theory is related to

Industry 4.0 or the 4th revolution?
In a Nutshell
The discussion above stated about the evolution of management and its principle.
In this activity, you need to make an essay about if you will become an engineer manager
in 10 years, what principle will apply in handling your people?
Q&A List
table provided.
1.
2.
3.
4.
5.
39
Keywords Index
History of Management General Administrative Management

Classical Management Classical Management Contribution
Scientific Management Motivational Management Theory
Big Picture in Focus: ULOc. Know the skills, you need to become a
good manager and what are the roles of a manager.
Metalanguage
For you to demonstrate ULOc, you will need to have an operational understanding
of the following terms below. Please note that you will also be required to refer to the
previous definitions found in ULOa section and you should be equipped with the concept
about management principles that were also discussed in ULOb. These are the terms that
you will come across as we go through curriculum review.
1. Managerial Ability. Managerial ability refers to the capacity of an engineer

manager to achieve organizational objectives effectively and efficiently.
2. Work Ethic. Work ethic is the principle that hard work is intrinsically virtuous or
worthy of reward.
3. Goal Setting. Goal setting is the process of identifying something that you want
to accomplish and establishing measurable goals and timeframes.
4. Dependability. Dependability refers to the quality of being trustworthy and
reliable.
Essential Knowledge
40
Engineering Manager’s Role
Engineering exists to create realistic

solutions to the problems of the community, and
what each engineering team needs is an
engineering manager who can commendably guide
the team to their full efficiency and profitability. This
is why the finest engineering managers are usually
the ones who have previously served as engineers
before pursuing management education.
Engineering managers assist with a range of skills
but also have an engineering background.
When an engineer is designated to oversee a specific task, he/she is already

engaged in the first phase of engineering management. The main responsibility of an
engineer is to lead the group into consistently producing a certain outcome with the given
required specification.
The top position an engineer manager may hope to occupy is the general
managership or presidency of any firm, small or large. As he scales the management ladder,
he finds that the higher he goes up, the less technical activities he performs, and the more
management tasks he accepts.
Requirements for the Engineer Manager’s Job

Depending on the type of products or services of a firm produces, the engineer
manager must have the following qualifications:
1. A bachelor’s degree in engineering from a reputable school; In some cases, a

master’s degree in engineering or business management is required;
2. A few years experience in a pure engineering job;
3. Training in supervision;
4. Special training in engineering management
These qualifications will be a great help to the engineer manager in the performance
of the various management functions.
Differences between a project manager and engineering manager

A career in engineering is attractive in the 21st century because of the strong demand
for engineers and the high pay that they receive. There is a growing need for engineers in
both technical and non-technical industries, so jobs are in high demand. Often required were
experienced managers within the engineering sector. In an industry two manager roles are
common are Engineering Manager and Project Manager. While both positions require
41
management skills, there are several variations between the positions. According to Jitesh,
these are the differences between the project manager and the engineering manager.
Category Project Manager Engineering Manager

Management They typically hold the They are responsible for
responsibility for managing gathering terms of people
a group of workers who to finish a task, but team
work for him. member-only work for him
until the project is done.
Time They usually work for a They are usually
specific project. permanent.
Human Resource They typically do not have They are responsible for
Representative this employee the relevant human
responsibility. resources and development
aspects. And they
responsible for training and
career development for his
employees.
Tools They generally more They are responsible to
focused on schedules and meet the deadlines and
project management tools provide specific tools for
and they are focus on the the successes of their
timing assigning projects.
responsibility, tracking, and
scheduling.
Table 1. Project Manager VS Engineering Manager
How to become a successful engineer manager?

Successful engineer managers do not happen as a matter of chance, although luck
is a contributory factor. The engineer manager needs to know the various factors leading to
successful management.
According to Robert Kreitner, there are at least three general preconditions for
achieving lasting success as a manager.
1. Ability
Managerial ability refers to the capacity of an engineer manager to achieve
organizational objectives effectively and efficiently.
Effectiveness, according to Higgins, refers to a description of “whether

objectives are accomplished” while efficiency is a description of the relative amount
of resources used in obtaining effectiveness.”
For example:
42
If a civil engineer was asked by his superiors to finish a 100-kilometer road
cementing project within eight months, he said to be effective if he finished the job
within the required period. On the other hand, his efficiency is measured by the inputs
(labor and materials) he poured into the project about the actual output. If the same
output is made with fewer inputs, the more efficient the civil engineer becomes.
2. Motivation to manage
Many people have the desire to work and finish specific tasks assigned by
superiors, but not many are motivated to manage other people so that they may
contribute to the realization of the organization’s objectives.
John B. Miner developed a psychometric instrument to measure objectively an

individual’s motivation to manage. The test is anchored to the following dimensions.
1. Desire to assert oneself and take charge

2. Desire to engage in games or sports competition with peers
3. Favorable attitude toward those in positions of authority, such as superior
4. Desire to engage in occupational or work-related competition with peers
5. Desire to exercise power and authority over others
6. Sense of responsibility in carrying out the routine duties associated with
managerial work
7. Desire to behave in a distinctive way, which includes standing out from the
crowd
3. Opportunity
Successful managers become possible only if they have the ability and motivation
to manage. The opportunity for successful management has two requirements:
1. Finding a supportive climate once on the job

2. Obtaining a suitable managerial job
Engineering managers must have the soft skills to be efficient and effective.
For a manager, technically adeptness has never been enough. You also have to
excel in soft skills. Soft skills are the attributes of personality, attitudes, habits, and actions
that you display while interacting with others.
These are the following trait that engineering managers possess:
1. Dependability
2. Work Ethic
3. Communication Skill
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4. Community and Teamwork
5. Time Management Skills
6. Goal Setting
7. Mental Ability
8. Takes Direction Well
Strategies for Successful Engineering Management

For a manager, technically adeptness has never been enough. You also have to
excel in soft skills. Soft skills are the attributes of personality, attitudes, habits, and actions
that you display while interacting with others. According to Jitesh, there are five strategies
for successful engineering management. These are the following:
• Manage Resources Well

The engineering manager should make the most of the strengths already in
place. The most experienced engineer should be appointed as project leader if their
strength is leadership, they should offer management role such as scheduling, project
planning, etc. If an engineering department is responsible for more than a few large
projects, project managers may handle projects with maximum commitment, rather
than requiring an engineering manager to be responsible for handling all the projects.
Sometimes the situation occurs when the right qualified people are
unavailable, or budget does not require the engineering manager to employ full time.
A professional consultant with skills that complement the strength of the engineering
manager. The right consultant may also serve as a coach and trainer. Not only does
a successful coach help managers and employees build skills, but he will also provide
advice to alleviate tension and boost overall work satisfaction.
• Cultivate Professionalism and Trust

Far too often, though, highly paid professionals feel challenged about their
professionalism — that they are not respected. Corporate management never
understands this assumption even exits. Teamwork specialist Patrick Lencioni
stresses the value of trust, since lack of confidence, he says, creates a basic
"dysfunction" that hinders most teams. The key to building trust, Lencioni says, is
building relationships among associates. Both managers and engineering managers
should practice MBWA (managing by wandering around).
• Soft Skill Investment

Technical professionals need a combination of technical knowledge, business
competencies, and interpersonal competences. Technical skills are usually least
important for the ultimate engineering managers, and their professional development
should be focused on skills that will help a manager grow as a key business leader.
Some engineering managers tend not to go too far down the road of leadership and
continue to put greater focus on their technical skills — after all, those skills are
actually what made them notice first, and they are confident with their technical skills.
Technically skilled engineering managers, who are not willing to expand their
44
expertise into leadership, may not be the best fit for management roles in
engineering.
• Established Realistic Expectations

In the industry, there is an issue where forecasts from the experts doing the
research that some of the leaders do not comply with determined schedules.
Essentially, it's a trust problem — the practical predictions of experts are being
challenged by impatient executives who want things done faster. Engineering
managers are often to be found between a rock (usually a boulder) and a hard spot.
Executives should be assured that the projections are accurate unless there are clear
reasons for not doing so, and when projections do not comply with business needs,
but the effort into practical project plans. When business leaders refuse to believe in
the forecasts of their experts and set ambitious targets, workers lose confidence in
their leadership.
• Provide Benefits Other Than Pay

In today’s global market, engineering skills are often viewed as a commodity.
In addition to paying engineering managers well, rewards are necessary so that
managers are enthusiastic enough to perform up to their full potential. Recognition
is valuable when results are expressed in terms of bottom-line contributions. It is easy

to figure out what benefits engineering managers appreciate- just ask them. Some of
the most important perks that will boost their enthusiasm are easy to fulfill and
inexpensive. Engineering managers express more concern for the well-being of the
staff than additional benefits for themselves.
the lesson.
* Jitesh, Sahil (2016). Management Skills in Ultimate Engineering Manager. City University
London
Let’s Check!
Activity 1. Make a PowerPoint presentation about the discussion above. You need to
emphasize the qualities of a good manager.
45
Let’s Analyze!
1. What are the qualities of a good engineer manager?
2. Different an engineer manager from a project manager.
3. What do you think the common way you see people fail as a manager?
4. If you will be the engineer manager, how will you handle your mistake in the
workplace?
In a Nutshell
Since there is an urgent need for better management, what will you do to become a
better manager, and what are the things that you will be implementing for the expansion of
your chosen firm?
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
Engineering Manager’s Role Ability

Motivation to Manage Opportunity
46
Big Picture in Focus: ULOd. Learn about decision making and what is
an internal organization and its different types.
Metalanguage
In this section, the most essential discussion about decision-making, the definition of
the internal organization, and to demonstrate ULOd, will be discussed. Please note that you
will also be required to refer to the previous definitions found in ULOa section and you should
be equipped with the concept of management principles and the essential knowledge about
the qualities of a good manager that were also discussed in ULOb and ULOc, respectively.
These are the terms that you will come across as we go through curriculum review.
1. Decision Making. Decision making is the action or process of making

decisions, especially important ones.
2. Problem. Problem is a matter or situation regarded as unwelcome or harmful
and needing to be dealt with and overcome.
3. Internal environment. An internal environment refers to organizational activities
within a firm that surrounds decision-making.
4. External environment. External environment refers to variables that are outside
the organization and not typically within the short-run control of top
management.
Essential Knowledge
Decision-Making
All kinds of managers are mainly tasked to provide leadership in the quest for the
47
attainment of the organization’s objectives. An effective manager knows the intricacies of
decision-making. He will encounter different situations wherein there are numerous options
and with every option that he will take, there will have different effects or outcomes.
The engineer manager’s decision-making skills will be very crucial to his success as
a professional. A major mistake in decision-making might ruin any organization. However,
good decisions will provide the right environment for continuous growth and success of any
organized effort.
Decision-Making as a Management Responsibility
Since decisions must be made at various levels and stages in the management
process in a workplace, someone must make a decision authorizing certain person suitable
to such resources.
It is the responsibility of an engineer manager to do decision-making. Since managers

are just humans, they sometimes make mistakes. However, making mistakes is not a big
issue if identified and corrected. There are kinds of managers who do not and cannot make
decisions. These kinds of managers should immediately be removed from their positions.
Management must strive to choose a decision option as correctly as possible. Since

they have that power, they are responsible for whatever outcomes their decisions bring. The
higher the management level is, the bigger and the more complicated decision-making
becomes.
Here is an example below:

The production manager of a company has received a written request to purchase
an air-conditioning unit. At the same time, another request was forwarded to him with
regards to purchasing a forklift. However, due to budgetary constraints, his superior
informed him that he can only buy one item.
The production manager must now make a decision. His choice, however, must be
based on sound arguments for he will be held responsible, later on, if he made the wrong
choice.
What Is Decision-Making?
Decision-making is the process of identifying and choosing alternative courses of
action in a manner appropriate to the demands of the situation. This means that the engineer
48
manager must adopt a certain procedure designed to determine the best option available to
solve certain problems.
Moreover, according to Nickels and others, decision-making is the heart of all the
management functions (i.e., planning, organizing, directing, and controlling).
The Decision-Making Process

The following are the steps in rational decision-making as per David H. Holt:
1. Diagnose problem
2. Analyze the environment
3. Articulate problem or opportunity
4. Develop viable alternatives
5. Evaluate alternatives
6. Make a choice
7. Implement decision
8. Evaluate and adapt decision results
Diagnose problem
If a manager wants to make an intelligent decision, his first move must be to identify
the problem. If the manager fails in this aspect, it is almost impossible to succeed in the
subsequent steps. An expert once said identification of the problem is tantamount to having
the problem half-solved.
What is the problem?

A problem exists when there is a difference between an actual situation and the
desired situation. Consider this example: The management of a construction company
accepted a contract to build a 25-story building on a certain site. The actual situation of the
firm is that it has not yet constructed the building. The desired situation is the finished 25-
story building. In this case, the actual situation is different from the desired situation. The
company has a problem, that is, the construction of the 25-story building.
Analyze the environment

It is very important to analyze the environment where the organization is situated.
The objective of environmental analysis is the identification of constraints, which may be
spelled out as either internal or external limitations. Example of internal limitations are as
follows:
1. Limited funds were available for the purchase of equipment.
2. Limited training on the part of employees.
3. Ill-designed facilities.
49
Examples of external limitations are as follows:
1. Patents are controlled by other organizations.
2. A very limited market for the company’s products and services exists.
3. Strict enforcement of local zoning regulations.
When making decisions, you consider the internal and external, limitations. This may
be costly, later on, to alter a decision because of a constraint that has not been previously
identified.
Components of the Environment. The environment consists of two major concerns:

The internal environment refers to organizational activities within a firm that
surrounds decision-making. Shown in Figure 15 are the important aspects of the internal
environment.
Figure 15. Aspects of an Internal Environment
The external environment refers to variables that are outside the organization and
not typically within the short-run control of top management. Figure 16 shows the forces
comprising the external environment of the firm.
50
Figure 16. Forces Comprising External Environment
Development of Effective Alternatives

Oftentimes, problems can be solved by different solutions. The best among the
alternative solutions should be considered by management.
For example:
An engineering firm has a problem of increasing its output by 40%. This is the result
of a new agreement between one of its clients and the firm.
In dealing with this we need to follow these following procedures:

1. Prepare a list of an alternative solution
2. Determine the viability of each solution
3. Revise the list by striking out those which are not viable
Evaluating an Alternative
The proper evaluation makes choosing the right solution less difficult. Each
alternative must be analyzed and evaluated in terms of its cost, value, and risk character.
Making a Choice
Choice-making is the process of selecting among alternative representing potential
solutions to a specific issue or problem.
Implement Decision
Implementation is to carry out the decisions so that the goal sought will be achieved.
To have an effective implementation, a plan must be devised. The resources must be made
51
available so that the decision may be properly executed.
Evaluate and Adapt Decision results

The manager needs to use control and feedback mechanisms to ensure results and
to provide information for future decisions.
Feedback is the process that requires checking at each stage of the process to
assure that the criteria used in the evaluation, alternatives generated, and the solution
selected for the implementation are in keeping with the goals.
Control is the actions made to ensure that activities are performed to match the
desire goals.
Internal Organization
A firm's internal organization is the way it is organized for carrying out its different
activities. There has to be a lot of commitment to the structure. The framework must be
defined by the priorities of the company and the communications networks to be set up
internally and externally. A consumer-focused company, for example, can need a framework
based on meeting the needs of various consumer groups. A manufacturing business may
require a specific production line-based structure.
Levels of an Internal Organization

1. By Function. This is the most popular way for group workers, particularly in
manufacturing businesses. The functional organization has meant that a company is
divided into broad sectors with, for example, marketing, accounts, or human
resources, each having its particular specialism or function.
2. By product. It may be useful to create an organizational structure based on product
lines when a large company generates a variety of different items.
3. By process. When a product needs a series of processes, it will set up divisions to
execute each process.
4. By geographical area. Many companies will have branches spread across the
country and occasionally overseas. Multiple retailers are a good example of this.
5. By customer. Organizations often set up various structures for dealing with different
sets of customers.
the lesson.
52
Let’s Check!
Activity 1. Make a PowerPoint presentation about the decision-making and internal
organization of management that were being discussed above.
Let’s Analyze!
1. Can making a management decision be avoided by an engineer manager? Why or

why not?
2. Why is the proper diagnosis of the problem very important?
3. What are the components of the environment from the point of view of the decision-
make? What do they consist of?
4. Why it is very important for those who will be involved in implementation to

understand and accept the solution to the problem?
In a Nutshell
In every field, decision-making plays a vital function in being a manager. His/ Her
company will rise or fall depending on the outcomes of his/her decision. With this, it is very
necessary for the manager to develop skills in decision making. In this activity, you will make
a case study about the scenario found on pages 40-41 on Dr. Robert Medina’s book,
Engineering Management.
Your case study is composed of the following:

1. Introduction
2. Background Information
3. Alternatives
4. Solution
5. Recommendation
Q&A List
table provided.
1.
53
2.
3.
4.
5.
Keywords Index
Decision-Making Internal Organization

The Decision-Making Process
Big Picture
a. learn about the different functions of management more specifically

planning;
b. acknowledge the ideas about functions of management in terms of
organizing, and;
c. learn about the different functions of management more specifically in
staffing.
Big Picture in Focus: ULO(a). Learn about the different functions of

management more specifically planning.
Metalanguage
In this section, the function of management, which is planning, and to demonstrate
ULOa will be discussed during the 4th-5th week of our class. Planning will constitute the most
important activity if managing an organization is to be pursued vigorously. The manager
must plan with the opportunity to carefully analyze situations that greatly contribute to having
effective decision making. The engineer managers should devote themselves, regardless of
54
their management level, to planning. In this discussion, we will know how an engineer
manager should perform to more sophisticated planning activity. Also, in this discussion,
you are required to recall and be equipped with the knowledge from the previous sections.
And to help with this section, these are the following terms that you need:
1. Planning. It is a management function that involves anticipating future trends and

determining the best strategies and tactics to achieve the organizational goals.
2. Strategic Planning. This is the process of determining policies and strategies for
obtaining and using resources to complete an objective and classifying the major
goals of the organization.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the next two (2)
Nature of Planning
A plan is the output of planning which will provide a methodical way of achieving
desired results. This serves as a useful guide to achieve the company’s goal.
According to Nickels and others, planning is a management function that involves

anticipating future trends and determining the best strategies and tactics to achieve the
organizational goals. According to Cole and Hamilton, planning helps us to decide who will
do it, what will be done, when, where, and how it will be done, and the standards to which it
will be done.
Planning at Various Management

Since engineering managers may be in roles at some of the different levels of
management, it would be useful for them to know certain aspects of the planning performed
at different levels.
1. Top management level – strategic planning
55
2. Middle management – intermediate planning
3. Lower level management-level – operational planning
Strategic Planning
This is the process of determining policies and strategies for obtaining and using
resources to complete an objective and classifying the major goals of the organization. In
this level, we need to consider the whole company more specifically, its current resources
and objectives.
A strategic plan is the output of strategic planning which means this is the decision
about long-range goals and the course of action to achieve these goals.
Intermediate Planning
It refers to the process of determining the contribution that sub-units can make with
allocated resources. The objectives of a sub-unit are plan and determined which will provide
to the realization of the goal. Intermediate planning is a layout to support the strategic plan.
Operational Planning
It refers to the process of determining how certain tasks can best be achieved on time
with available resources. Operational planning is designed to support the intermediate plan
and strategic plan.
Figure 17. Types of Planning

56
Planning Process
The management level that performs the planning of task is consist of different
steps. Generally, planning involves the following:
1. Setting Organizational, Divisional, or Unit Goals

The first task is the engineer manager should provide a sense of direction in
accomplishing the objectives of the company. A goal is the precise statement of
result sough, quantified in time and magnitude, where possible. It is very essential to
set-up goals that will provide an answer to the said company’s concern.
2. Tactics to Reach Goals

After deciding the objectives, the following assignment is to devise some means
to realize them. The ways to realize the goals are called techniques and these will be
the concern of top management. The center and lower administration will adopt they
possess strategies to execute their plans. A methodology may be defined as “a
course of activity aimed at guaranteeing that the organization will accomplish its
targets.”
The strategy is implemented, it may offer assistance the development firm realize
substantial savings within the fabric and supply necessities used in their development
exercises. The firm will also have greater control within the timing of conveyances of
materials and supplies.
A tactic may be a short-term activity taken by management to alter to negative

inner or outside influences.” They are defined and executed in the back of the firm’s
strategies. The choice around short-term goals and the courses of activity are shown
within the strategic arrangement.
3. Identifying the Resources Needed

When specific sets of procedures or strategies have been concocted, the design
supervisor will, at that point, decide the human and nonhuman assets required by
such techniques or strategies.
Indeed, on the off chance that the asset requirements are as of now accessible,
they must be specified. The quality and amount of assets required must be accurately
decided. As well as many assets in terms of either quality or amount will be inefficient.
As well small will mean misfortune of openings for maximizing pay.
To fulfill key necessities, a common statement of required assets will suffice. The
specific requirements will be decided by the different units of the company.
4. Setting Standard
The standards for measuring execution may be set at the planning stage. When
real execution does not coordinate with the arranged execution, corrections may be
57
made, or fortifications have given." A standard may be defined as “a quantitative or
subjective measuring gadget planned to assist screen the performances of
individuals, capital products, or processes.”
Types of Plan
Plans are of various types. They may be classified in terms of functional ranges,
time skyline, and frequency of utilize.
1. Functional Area Plans

Plans may be arranged concurring to desires of the different utilitarian ranges.
Among the sorts of functional area plans are the following:
1.1. Promoting arrangement – this is often the composed document or outline for
executing and controlling an organization’s showcasing exercises related to a
specific showcasing strategy.
1.2. Generation arrangement — usually a composed document that states the
quantity of yield a company must produce in wide terms and by item family.
1.3. Budgetary arrangement — it could be a record that summarizes the current
financial circumstance of the firm, analyzes financial needs, and prescribes a
direction for financial activities.
1.4. Human asset administration arrangement — it is a document
that demonstrates the human resource needs of a company nitty-gritty in
terms of quantity and quality and based on the prerequisites of the
company's key arrangement.
2. Plans with Time Horizon

Plans with time horizon comprise of the following:
2.1. Short-range plans – these are plans envisioned to cover less than one year. First-
line supervisors are generally concerned with these plans.
2.2. Long-range plans – these are plans covering more than one year. These are
mostly attempted by the center and the best management.
Plans According to Frequency of Use

With this type of plan, it is classified into two categories:
1. Standing Plans. This is more focused on the managerial situations that deal with
repeatedly.
Standing plans may be encouraged classified as follows:

• Approaches – these are wide rules to aid managers at each level in making decisions
about repeating circumstances or function.
• Methods – these are plans that depict the exact arrangement of activities to be taken
in a given situation.
58
• Rules — these are explanations that either require or restrict a certain action.
2. Single-Use plans. These plans are specifically developed to actualize courses

of activity that are relatively unique and are impossible to be repeated. Single-use
plans may he advance classified as takes after:
• Budgets – arrange which sets forward the expected utilization for

certain development and clarifies where the specified reserves will come from.
• Programs – a single-used arrangement planned to coordinate an expansive set
of activities.
• Projects -a plan that is usually more limited in scope than a program and is
sometimes prepared to support a program.
Parts of The Strategic Plan
The strategic plan must contain the following:

1. Company or corporate mission
2. Objectives or goals
3. Strategies
Company of corporate mission refers to the “strategic statement that identifies why
an organization exists, its philosophy of management, and its purpose as distinguished from
other similar organizations in terms of products, services, and markets.
the lesson.
* Samuel C. Certo and J. Paul Peter. Strategic Management, Concepts and

Applications (New York: Random I-louse, 1988) p. 13.
* Robert A. Comerford and Dennis W. Callaghan. Strategic Management,
Tools. and Cases /or Business Policy (Boston: Kent Publishing Co., 1985) p. B9.50
Let’s Check!
Activity 1. Interview a general manager of a firm or in any engineering field. Inquire about
the planning activities undertaken by his/her company. Prepare a presentation about your
interview.
59
Let’s Analyze!
1. What is planning?
2. Why is planning plays a vital activity for engineer managers?
3. What are the steps in the planning process?
4. Name the types of plans and how may they be classified?
5. What do you mean by “the company’s missions”?
6. What do you think are the barriers to planning?
7. Differentiate each type of plan?
In a Nutshell!
Technical exercises, like other exercises, require effective planning, i.e., in case goals
and objectives are to be realized. A plan could be a procedural way of accomplishing results.
Planning is attempted at various administration levels. Several steps are required within the
planning process depending on the administration level. Plans may be classified in terms of
useful areas, time skyline, and recurrence of use. Plans comprise of diverse parts that the
engineer manager must be commonplace with. Plans can be made viable by recognizing
the planning obstructions and making apply of aids to planning. In this activity, you will
imagine that you are an engineer manager and you need to introduce a future project in your
chosen field. You need to present a strategic plan to achieve the success of your future
project.
Q&A List
table provided.
1.
60
2.
3.
4.
5.
Keywords Index
Planning Nature of Planning

Planning Process Types of Plan
Parts of the Strategic Plan Plans According to Frequency of Use
Big Picture in Focus: ULO(b). Acknowledge the ideas about

functions of management in terms of organizing.
Metalanguage
In this section, the opportunities offered by skillful organizing, to provide him with
some background and insights into organizing, and to demonstrate ULOb, will be tackled.
Also, in this discussion, you are required to recall and be equipped with the knowledge from
the previous sections.
To help you with that, these are the following terms that you need to know in this
section:
1. Organizing. Facilitates the implementation of plans. Ineffective organizing, steps are

undertaken to breakdown the total job into more manageable man-size jobs.
2. Formal organization. It is the structure that details lines of responsibilities, authority,
and position.
3. Informal group. There are instances when members of an organization
spontaneously form a group with friendship as a principal reason for belonging
61
Essential Knowledge
Organizing Defined
Organizing is a management function that refers to “the structuring of resources and
activities to accomplish objectives efficiently and effectively.”
Organizing Technical Activities

The engineer manager needs to acquire various skills in management, including
those for organizing technical activities. In this highly competitive environment, the unskilled
manager will not be able to bring his unit, or his company, as the case may be, to success.
The value of a superior organizational set-up has been proven dramatically during
the Second World War when a smaller American naval force confronted the formidable
Japanese navy at Midway. Military historians indicated that the Americans emerged
victorious because of the superior organizational skills of their leaders.
Even today, skills in organizing contribute largely to the accomplishment of the

objectives of many organizations, whether they are private businesses or otherwise. The
positive effect of business success becomes more pronounced when they come as a result
of international operations. International businesses, however, cannot hope to make huge
profits unless they are properly organized to implement their plans.
Reasons for Organizing

Organizing is undertaken to facilitate the implementation of plans. Ineffective
organizing, steps are undertaken to breakdown the total job into more manageable man-
size jobs. Doing these will make it possible to assign particular tasks to particular persons.
In turn, these will help facilitate the assignment of authority, responsibly, and accountability
for certain functions and tasks.
The Purpose of The Structure

The arrangement or relationship of positions within an organization is called the
structure. The result of the organizing process is structure.
62
The structure serves some very useful purposes. They are the following:
1. It defines the relationships between tasks and authority for individuals and
departments.
2. It defines the formal reporting relationships, the number of levels in the hierarchy of
the organization, and the span of control.
3. It defines the groupings of individuals into departments and departments into the
organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tasks) directions.
When structuring an organization, the engineer manager must be concerned with the
following:
1. Division of Labor – determining the scope of work and how it is combined in a job.
2. Delegation of authority – the process of assigning various degrees of decision-making
authority to subordinates.
3. Departmentation – the grouping of related jobs, activities, or processes into major
organizational subunits.
4. A span of control – the number of people who report directly to a given manager.
5. Coordination – the linking of activities in the organization that serves to achieve a
common goal or objective.
The Formal Organization

After a plan is adopted, management will proceed to form an organization to carry out
the activities indicated in the plan.
The formal organization is the structure that details lines of responsibilities, authority,
and position. What is depicted in the organization chart is the formal organization. It is “the
planned structure” and it “represents the deliberate attempt to establish patterned
relationships among the components that will meet the objectives effectively.”
The formal structure is described by the management through:

1. Organization chart
2. Organization manual and
3. Policy manuals.
The organization chart is a diagram of the organization’s official positions and formal
lines of authority. The organization manual provides written descriptions of authority
relationships, details the functions of major organizational units, and describes job
procedures. The policy manual describes personnel activities and company policies
63
Informal Organization
Formal organizations require the formation of formal groups that will be assigned to
perform specific tasks aimed at achieving organizational objectives. The formal group Is a
part of the organizational structure.
There are instances when members of an organization spontaneously form a group

with friendship as a principal reason for belonging. This group is called an informal group. It
is not a part of the formal organization and it does not have a formal performance purpose.
Informal groups are oftentimes very useful in the accomplishment of major tasks,
especially if these tasks conform to the expectations of the members of the informal group.
The informal organization, useful as it is, is vulnerable to expediency, manipulation, and
opportunism according to Valentine. Its low visibility, Valentine added, makes it difficult for
management to detect these perversions, and considerable harm can be done to the
company.”
The engineer manager s, therefore, warned that he must be on the lookout for the
possible difficulties that the informal groups may do to the organization. It will be in his best
interest if he could make the informal groups work for the organization.
Types of Organizational Structures

Before the commencement of activities, the decision-makers in an organization will
have to decide on what structure to adapt. Depending on the size and type of operations, a
certain structural type may best fit the requirements.
Organizations may be classified into three types. They are the following:
1. Functional organization — this is a form of departmentalization in which everyone
engaged in one functional activity, such as engineering or marketing, is grouped into
one unit.
2. Product or market organization — this refers to the organization of a company by
divisions that bring together all those involved with a certain type of product or
customer.
3. Matrix organization — an organizational structure in which each employee reports to
both a functional or division manager and a project or group manager.
64
FRIENDSHIP
like: concern for

environment or
love for classical
music
PROXIMITY
which gives people

the chance to
share ideas,
opinions, and
feelings
NEED SATISFACTION
which are derived from WHICH PROPEL
unions, cultural PEOPLE
societies. fraternities, TO
etc.
FORM
AN
COLLECTIVE POWER INFORMAL
GROUP
which are derived from JOIN
unions, fraternities,
etc.
GROUP GOALS
which attract
individuals like:
consumer society,
sports club, etc.
65
Figure 18. Reasons or Factors for Joining or Forming a Group
PRESIDENT
VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT

MARKETING CONSTRUCTION FINANCE HUMAN RESOURCES
Figure 19. Typical Functional Organization Chart of Construction
Functional Organization
Functional organization structures are very effective in smaller firms, -especially
“single-business firms where key activities revolve around well-defined skills and areas of
specialization."
Functional organizations have certain advantages. They are the following:

1. The grouping of employees who perform a common task permit economy of
scale and efficient resource use.
2. Since the chain of command converges at the top of the organization, decision-
making is centralized, providing a unified direction from the top.
3. Communication and coordination among employees within each department are
excellent.
4. The structure promotes high-quality technical problem-solving.
5. The organization is provided with in-depth skill specialization and development.
6. Employees are provided with career progress within functional departments."
The disadvantages of the functional organization are the following:
1. Communication and coordination between the departments are often poor.
2. Decisions involving more than one department pile up at the top management
level and are often delayed.
66
3. Work specialization and division of labor, which are stressed in a functional
organization, produce routine, nonmotivating employee tasks.
4. It is difficult to identify which section or group is responsible for certain problems.
5. There is a limited view of organizational goals by employees.
6. There is limited general management training for employees.
Product or Market Organization

The product or market organization, with its feature of operating by divisions, is
appropriate for a large corporation with many product lines in several related
industries.
The advantages of a product or market organization are as follows:

1. The organization is flexible and responsive to change.
2. The organization provides a high concern for customer’s needs.
3. The organization provides excellent coordination across functional departments.
4. It is easy pinpointing responsibility for product problems.
5. There is an emphasis on overall product and division goals.
6. The opportunity for the development of general management skills is provided.
The disadvantages of the product or market organization are as follows:
1. There is a high possibility of duplication of resources across divisions.
2. There is less technical depth and specialization in divisions.
3. There is poor coordination across divisions.
4. There is less top management control.
5. There is competition for corporate resources.
Matrix Organization
A matrix organization, according to Thompson and Strickland, “is a structure with two
(or more) channels of command, two lines of budget authority, and two sources of
performance and reward." Higgins declared that “the matrix structure was designed to keep
employees in a central pool and to allocate them to various projects in the firm according to
the length of time they were needed?"
The matrix organization is afforded with the following advantages:

1. There is more efficient use of resources than the divisional structure.
2. There are flexibility and adaptability to a changing environment.
3. The development of both general and functional management skills is present.
4. There is interdisciplinary cooperation and any expertise is available to all divisions.
5. There are enlarged tasks for employees which motivate them better.
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The matrix organization has some disadvantages, however. They are the following:
1. There are frustration and confusion from a dual chain of command.
2. There is a high conflict between divisional and functional interests.
3. There are many meetings and more discussion than action.
4. There is a need for human relations training for key employees and managers.
5. There is a tendency for power dominance by one side of the matrix.
PRESIDENT
Vice president Vice president Vice president

Government Industrial Residential
Accounts Accounts Accounts
Marketing Marketing Marketing
Construction Construction Construction
Finance Finance Finance
Human Human Human

Resources Resources Resources
Figure 20.Typical Product/Market Organization for a Construction Company
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PRESIDENT
Vice president Vice president Vice president

for for for Human
Finance Construction Resources
Projects Construction Purchasing Contract

Manager Manager Manager Administration
Manager
Project X Purchasing Contract

Manager Engineer Specialist Negotiator
Project Y Purchasing Contract

Project Z Purchasing Contract

Figure 21. Typical Matrix Organization or a Construction firm
69
Types of Authority
The delegation of authority is a requisite for effective organizing. It consists of three
types. They are as follows:
1. Line authority -- a manager's right to tell subordinates what to do and then see that
they do it.
2. Staff authority — a staff specialist’s right to advise a superior.
3. Functional authority — a specialist’s right to oversee lower-level personnel involved
in that specialty, regardless of where the personnel is in the organization.
Line departments perform tasks that reflect the organization's primary goal and mission.
ln a construction firm, the department that negotiates and secures contracts for the firm is a
line department. The construction division is also a line function.
Staff departments include all those that provide specialized skills in support of line
departments. Examples of staff departments include those which perform strategic planning,
labor relations, research, accounting, and personnel.
Staff Officers may be classified into the following:

1. Personal staff — those individuals assigned to a specific manager to provide needed
staff services.
2. Specialized staff — those individuals providing needed staff services for the whole
organization.
Functional authority is one given to a person or a workgroup to make decisions related

to their expertise even if these decisions concern other departments. This authority is given
to most budget officers of organizations, as well as other officers.
The Purpose of Committees

When certain formal groups are deemed inappropriate to meet expectations,
committees are often harnessed to achieve organizational goals. Many organizations, large
or small, make use of committees.
A committee is a formal group of persons formed for a specific purpose. For instance,
the product planning committee, as described by Millevo, is “often staffed by top executives
from marketing, production, research, engineering, and finance, who work part-time to
evaluate and approve product ideas.”
Committees are very useful most specially to engineering and manufacturing firms.
When a certain concern, like product development, is under consideration, a committee is
70
usually formed to provide the necessary line-up of expertise needed to achieve certain
objectives.
Committees may be classified as follows:

1. Ad hoc committee — one created for a short-term purpose and have a limited life. An
example is a committee created to manage the anniversary festivities of a certain
firm.
2. Standing committee — it is a relatively permanent committee that deals with issues
on an ongoing basis. An example is the grievance committee set up to handle initially
complaints from employees of the organization.
Committees may not work properly, however, if they are not correctly managed. Delaney
suggests that “it might be useful to set up some procedures to make the committee a more
effective tool to accomplish our goals.
the lesson.
Let’s Check!
Activity 1. Make an organization chart of a large engineering firm showing line and staff
relationships.
Activity 2. Let’s have a group discussion about the topic in ULOb. Make a PowerPoint
presentation about organizing as one of the functions of management.
Let’s Analyze!
1. What is organizing?
2. Why is it very essential for the engineer manager to have the skills in organizing?
3. What is the purpose of the organizational structure?
71
4. What is the purpose of the formal organization?
5. What should be the concern of the engineer manager when structuring the
organization?
In a Nutshell
You’ve already known how essential an organization is a function of management.

Also, it tackles the different organizational units of a company. This time, I will provide you
my perspective, and you continue the remaining.
1. Organizing is an essential function of management because it creates a framework

that is needed to achieve a specific company’s objectives and goals.
Your Turn:
2. __________________________________________________________________
__________________________________________________________________
3. __________________________________________________________________
__________________________________________________________________
4. __________________________________________________________________
__________________________________________________________________
5. __________________________________________________________________
__________________________________________________________________
Q&A List
table provided.
1.
2.
3.
4.
5.
72
Keywords Index
Organizing Organizational Structures

Reasons for Organizing Types of Authority
Formal and Informal Organization
Big Picture in Focus: ULO(c). Learn about the different functions of

management more specifically in staffing.
Metalanguage
After setting up the organizational structure that has been chosen to best serve the
interest of a certain firm, the following move that must be made is to fill up the identified
positions with the foremost qualified people accessible. Engineering organizations are
exceptionally delicate to whatever staffing mistakes are made. Setting the off-base individual
in a profoundly specialized position like quality control, for the occasion, may bring untold
harm to the firm. However, this alludes to a single blunder as it were.
Essential Knowledge
Staffing
The engineer manager must be concerned with putting the right people in different
positions inside his area of concern. Although a few of the vital aspects of staffing may be
73
assigned to the human asset office, the building director accept a great duty in assuring that
the proper people are relegated to positions that fit their qualifications.
Staffing may be defined as “the administration function that decides human asset
needs, recruits, trains, selects, and creates human assets for employments made by an
organization.” Staffing is embraced to coordinate individuals with occupations so that the
realization of the organization's goals will be encouraged.
Staffing Procedure
Series of steps are involved in staffing:
1. Human resource planning

The planned output of any organization will require a systematic deployment of
human resources at various levels. To be able to do this, the engineer manager will have to
involve himself with human resource planning. This will be done in conjunction with the
efforts of the human resource officer, i.e., if the company has one. Human resource planning
may involve three activities, as follows:
• Forecasting — which is an assessment of future human resource needs about the
current capabilities of the organization.
• Programming — which means translating the forecasted human resource needs to
personnel objectives and goals.
• Evaluation and control — which refers to monitoring human resource action plans
and evaluating their success.
2. Recruitment
When the different positions have been identified to be necessary and the decision
to fill them up has been made, the next logical step is recruitment. Recruitment refers to
attracting qualified persons to apply for vacant positions in the company so that those who
are best suited to serve the company may be selected. For entry-level personnel, the
engineer manager will likely rely on newspaper advertising, schools, and referrals. When
recruiting managers, reliable sources are current employees, recruitment firms, and
competitors.
3. Selection
Selection refers to the act of choosing from those that are available the individuals
most likely to succeed on the job. A requisite for effective selection is the preparation of a
list indicating that an adequate pool of candidates is available. The purpose of selection is
to evaluate each candidate and to pick the most suited for the position available. Selection
74
procedures may be simple or complex depending on the costs of a wrong decision. If the
management picks the wrong person and the subsequent effect on the organization is
negligible, then the selection process is made simple. This is true in the case of construction
laborers where a review of their applications is done. Within a few days or even a few hours,
the applicants are informed of the decision.
4. Induction and orientation

After an applicant is finally selected from among the various ones and then
subsequently is hired, the next steps undertaken are induction and orientation. In induction,
the new employee is provided with the necessary information about the company. His duties,
responsibilities, and benefits are relayed to him. Personnel and health forms are filled up,
and passes are issued. The company's history, its products and services, and the
organization structure are explained to the new employee. In orientation, the new employee
is introduced to the immediate working environment and co-workers. The following are
discussed: location, rules, equipment, procedures, and training plans. Performance
expectations are also discussed. The new employee also undergoes the “socialization
process" by pairing him with an experienced employee and having a one-on-one discussion
with the manager.
5. Training and development

If the newly hired (or newly promoted) employee is assessed to be lacking the
necessary skills required by the job, training becomes a necessity. Training refers to the
“learning that is provided to improve performance on the present job.” Training programs
consist of two general types, namely’.
1. training programs for nonmanagers, and
2. training and educational programs for executives.
6. Performance Appraisal
Performance appraisal is the measurement of employee performance. The purposes
for which performance appraisal is made are as follows.
• To influence, in a positive manner employee performance and development
• To determine merit, pay increases
• To plan for future performance goals
• To determine training and development needs
• To assess the promotional potential of employees
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7. Employment Decisions
After evaluating the performance of employees (managerial or otherwise), the
management will now be ready to make employment decisions. These may consist of the
following:
7.1. Monetary rewards – these are given to employees whose performance is at par
or above standard requirements.
7.2. Promotion — this refers to a movement by a person into a position of higher pay
and greater responsibilities and which is given as a reward for competence and
ambition.
7.3. Transfer — this is the movement of a person to a different job at the same or
similar level of responsibility in the organization. Transfers are made to provide
growth opportunities for the persons involved or to get rid of a poor performing
employee.
7.4. Demotion — this is a movement from one position to another which has less
pay or responsibility attached to it. Demotion is used as a form of punishment or as
a temporary measure to keep an employee until he is offered a higher position.
8. Separation
Separation is either a voluntary or involuntary termination of an employee. When
made voluntarily, the organization's management must find out the real reason. If the
presence of a defect in the organization is determined, corrective action is necessary.
Involuntary separation (or termination) is the last option that the management exercises
when an employee's performance is poor or when he/she committed an act violating the
company rules and regulations. This is usually made after training efforts fail to produce
positive results.
the lesson.
Let’s Check!
Activity 1. Make a poster slogan, it could be a digital or a handmade poster, which shows
the importance of staffing as a function of management.
76
Let’s Analyze!
1. Why is staffing an important activity?
2. What activities are undertaken in staffing?
3. What is the purpose of human resource planning?
4. What is the implication of the cost of the “wrong decision” in the selection process?
5. How may the two general types of training be described?
In a Nutshell!
Engineering organizations are not immune to the difficulties of filling with qualified
persons the various positions identified in the organizing stage. As outputs of engineering
firms are produced by people under the supervision of engineer managers, errors in the
performance of jobs may not be easily discernible. As such, staffing must be treated with
serious concern. Staffing deals with the determination of human resources needs
recruitment, selection, training, and development. For your activity, you need to research
and prepare a forecast of the human resource needs of an engineering firm.
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
77
Staffing Staffing Procedure
Big Picture
a. be equipped with knowledge about communication as one of the

functions of management in an organization;
b. understand the value of change and develop skills to lead successfully,
and;
c. explain the objectives of control and describe the controlling process.
Big Picture in Focus: ULO(a). Be equipped with knowledge about

communication as one of the functions of
management in an organization.
Metalanguage
In this section, the discussion is about equipping yourselves with the knowledge
about communication as one of the function of management in an organization, and to
demonstrate ULO(a) will be operationally defined to establish a common frame of reference
as to how the texts or words work in your chosen field or career. You will encounter these
terms as we go through the study of the course. Please refer to these definitions in case you
will encounter difficulty in understanding the concepts.
1. Communication. It is a process of sharing information through symbols, including

words and messages.
2. Information function. Information provided through communication maybe used for
decision-making at various work levels in the organization.
3. Verbal. Verbal communications are transmitted through hearing or sight.
4. Barrier. A barrier is an obstacle that prevents access to effective communication
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5. Non-verbal communication. It is a means of conveying messages through body
language, as well as the use of time, space, touch, clothing, appearance, and
aesthetic elements.
Essential Knowledge
Communication
Morris Philip Wolf and Shirley Kuiper define communication as “a process of sharing
information through symbols, including words and message." Communication may happen
between superior and subordinate, between peers, between a manager and a client or
customer, between an employee and a government representative, etc. It may be done face-
to-face, or printed materials, or through an electronics device like the telephone, etc. In
management, communication must be made for a purpose and because it has a cost
attached to it, it must be used effectively
Function of Communication
Communication may be used to serve any of the following functions:
1. Information function — Information provided through communication may be

used for decision-making at various work levels in the organization. A construction
worker, for instance, maybe given instructions on the proper use of certain
equipment. This will later provide him with a guide in deciding which equipment to
use in particular circumstances. Another concern is the manager who wants to make
sure that his decision in promoting an employee to a higher position is correct.
Through communication, the information provided will minimize if not eliminate the
risk.
2. Motivation function — Communication is also oftentimes used as a means to

motivate employees to commit themselves to the organization’s objectives.
79
3. Control function — When properly communicated, reports, policies, and plans
define roles, clarify duties, authorities, and responsibilities. Effective control is, then,
facilitated.
4. Emotive function — When feelings are repressed in the organization,

employees are affected by anxiety, which, in turn, affects performance. Whatever
types of emotions are involved, whether satisfaction, dissatisfaction, happiness, or
bitterness, communication provides a means to decrease the internal pressure
affecting the individual.
The Communication Process
SENDER
develops idea
encodes
Then transmits message to
RECEIVER
who receives
message
decodes
accepts or
rejects
Then provides feedback to
Develop an Idea
The most important step in effective communication is developing an idea. The idea
to be conveyed must be useful or of some value.
Encode
The next step is to encode the idea into words, illustrations, figures, or other symbols
suitable for transmission. The method of transmission should be determined in advance so
80
that the idea may be encoded to conform with the specific requirements of the identified
method.
Transmit
After encoding, the message is now ready for transmission through the use of an
appropriate communication channel. Among the various channels used include the spoken
word, body movements, the written word, television, telephone, radio, an artist’s paint,
electronic mail, etc.
Proper transmission is very important so the message sent will reach and hold the
attention of the receiver. To achieve this, the communication channel must be free of
barriers, or interference (sometimes referred to as noise).
Receive
The next step is the communication process is the actual receiving of the message
by the intended receiver.
Decode
The next step, decoding, means translating the message from the sender into a form
that will have meaning to the recipient. If the receiver knows the language and terminology
used in the message, successful decoding may be achieved.
Accept
The next step is for the receiver to accept or reject the message. Sometimes,
acceptance (or rejection) is partial. An example is provided as follows: A newly hired
employee was sent to a supervisor with a note from his superior directing the supervisor to
accept the employee into his, unit and to provide the necessary training and guidance.
Use
The next step is for the receiver to use the information. If the message provides
information of importance to a relevant activity, then the receiver could store it and retrieve
it when required. If the message requires a certain action to be made, then he may do so,
otherwise, he discards it as soon as it is received. All of the above-mentioned options will
depend on his perception of the message.
Provide Feedback
The last step in the communication process is for the receiver to provide feedback to
the sender. Depending on the perception of the receiver, however, this important step may
not be made. Even if the feedback is relayed, it may not reach the original sender of the
message. This may be attributed, to the effects of any of the communication barriers.
81
Forms of Communication
Communication consists of two major forms:
1. Verbal
Verbal communications are transmitted through hearing or sight. These
modes of transmission categorize verbal communication into two classes: oral and
written. Oral communication mostly involves hearing the words of the sender,
although sometimes, opportunities are provided for seeing the sender's body
movements, facial expression, gestures, and eye contact. Sometimes, feeling,
smelling, tasting, and touching are involved. The written communication, however,
has limitations, and to remedy these, some means are devised. Perfume advertisers,
for instance, lace their written message with the smell of their products.
2. Nonverbal
Nonverbal communication is a means of conveying messages through body
language, as well as the use of time, space, touch, clothing, appearance, and
aesthetic elements. Body language consists of gestures, bodily movement, posture,
facial expression, and mannerisms of all kinds.
The Barriers to Communication
Various factors may impede the efficient flow of communication. Any, or all, of these
factors, may, at any point, derail the process. Even if the message is transmitted by the
channel, the timing and the meaning of the message may be affected by the factors.
The barriers to communication may be classified generally as:
1. Personal Barriers
Personal barriers are hindrances to effective communication arising from a
communicator’s characteristics as a person, such as emotions, values, poor listening habits,
gender, age, race, socioeconomic status, religion, education, etc.
Emotions cloud the communicator's ability to correctly judge the real meaning of
messages received. People with different values will find it hard to communicate with each
other. Poor listening habits of a receiver frustrate the communication efforts of a sender.
2. Physical Barriers
Physical barriers refer to interferences in ineffective communication occurring in the
environment where the communication is undertaken. The very loud sound produced by a
passing jet temporarily drowns out the voice of a guest delivering a speech. Such distraction
does not allow a full understanding of the meaning of the entire message and is an example
of a physical barrier. Physical barriers include distances between people, walls, a noisy
82
jukebox near a telephone, etc. An office that is so tidy may sometimes inhibit a person from
meeting the occupant of the office face-to-face. A menacing pet dog (or secretary) posted
near the door may also prevent a person from directly communicating with the object person
behind the door.
3. Semantic Barriers
Semantics is the study of meaning as expressed in symbols. Words, pictures, or
actions are symbols that suggest certain meanings. When the wrong meaning has been
chosen by the receiver, a misunderstanding occurs. Such error constitutes a barrier to
communication. A semantic barrier may be defined as an interference with the reception of
a message that occurs when the message is misunderstood even though it is received
exactly as transmitted.
Techniques for Communicating in Organizations
Communication may be classified as to the types of flow of the message which are
as follows: downward, upward, or horizontal. Each of the types of message flow has its
purposes and techniques.
• Downward Communication
Downward communication refers to message flows from higher levels of
authority to lower levels. Among the purposes of downward communication are:
1. to give instructions
2. to provide information about policies and procedures
3. to give feedback about performance
4. to indoctrinate or motivate
Among the techniques used in downward communication are as follows:

letters, meetings, telephones, manuals, handbooks, and newsletters.
• Upward Communication
Upward communication refers to messages from persons in lower-level
positions to persons in higher positions. The messages sent usually provide
information on work progress, problems encountered, suggestions improving output,
and personal feelings about work and non-work activities. Among the techniques
used in upward communication are formal grievance procedures, employee attitude,
and opinion surveys, suggestion systems, door policy, informal gripe sessions, task
forces, and interviews.
• Horizontal Communication
Horizontal communication refers to messages sent to individuals or groups
from another of the same organizational level or position. The purposes of horizontal
communication are:
83
1. to coordinate activities between departments
2. to persuade others at the same level of organization
3. to pass on information about activities or feelings.
Among the techniques which deal with horizontal communication are

memos, meetings, telephones, and other social affairs.
Management Information System
Management information system (MIS) is defined by Boone and Kurtz as an

organized method of providing past, past, present, and projected information on the internal
operation and external intelligence for use in decision-making. The MIS currently used by
corporate firms consists of written and electronically based systems for sending reports,
memos, and bulletins, and the like. The system allows managers of the different
departments within the firm to communicate with each other.
Manufacturing
Finance Marketing
MANAGEMENT
INFORMATION SYSTEM
Engineering Personnel
Research and
Development
The Purpose of Management Information System
Wheelen and Hunger enumerate the various reasons for establishing MIS:
1. provide a basis for the analysis of early warning signals that can originate both
externally and internally.
2. to automate routine clerical operations like payroll and inventory reports.
3. to assist managers in making routine decisions like scheduling orders, assigning
orders to machines, and reordering supplies.
4. to provide the information necessary for management to make strategic or
nonprogrammed decisions.
84
the lesson.
* Medina R. G. (1977). Engineering Management. Philippines: Rex Book Store. Page 109-
126
* Robbins S. and Coulter M. (2012). Management. Mason, NJ: Pearson
Let’s Check
Activity 1. Now that you know the most essential terms in the study of leading. Let us try to
check your understanding of these terms. In the space provided, write the term/s being
asked in the following statements:
_________1. It refers to message flows from higher levels of authority to lower levels.
_________2. It is defined by Boone and Kurtz as an organized method of providing past,
past, present, and projected information on the internal operation and external intelligence
for use in decision-making.
_________3. It is defined by Boone and Kurtz as an organized method of providing past,
past, present, and projected information on the internal operation and external intelligence
for use in decision-making.
_________4. It may happen between superior and subordinate, between peers, between a
manager and a client or customer, between an employee and a government representative,
etc.
_________5. It is the study of meaning as expressed in symbols
_________6. It involves hearing the words of the sender, although sometimes, opportunities
are provided for seeing the sender's body movements, facial expression, gestures, and eye
contact.
_________7. It refers to messages sent to individuals or groups from another of the same
organizational level or position.
_________8. This is the step where the communication process is the actual getting the
message by the intended receiver.
_________9. It is defined as an interference with the reception of a message that occurs
when the message is misunderstood even though it is received exactly as transmitted.
_________10. It is a barrier that refers to interferences in ineffective communication
occurring in the environment where the communication is undertaken.
85
Let’s Analyze.
1. How important is communication as a function of engineering management?
2. What is communication? How may it be done?
3. How may barriers to communication be classified? What is the possible effect of

emotion in communication?
4. What techniques may be used in communication?
5. What is a management information system? What are its purposes?
In a Nutshell
Communication plays a vital function for the engineer manager and in an

organization. A company will not properly function if there is no effective communication.
Therefore, communication must be established in a company so that it will be used to serve
the information function, motivation function, emotive function, and control function. For this
activity, you will apply what you have learned in this section by scrutinizing an existing
engineering organization by classifying techniques used in communication.
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
86
Communication Function of Communication

The Communication Process Forms of Communication
The Barriers of Communication Techniques for Communicating in
Organizations
Management Information System The Purpose of Management Information
System
Big Picture in Focus: ULO(b). Understand the value of change and

develop skills to lead successfully.
Metalanguage
In this section, the most essential terms relevant to the study of leading and to
demonstrate ULO(b) will be operationally defined to establish a common frame of reference
as to how the texts work in your chosen field or career. You will encounter these terms as
we go through the study of the leading Please refer to these definitions in case you will
encounter difficulty in understanding terms.
1. Leading. Refers to a guidance a guidance or leadership, especially in a spiritual

context.
2. Leaders. It is the person who leads or commands a group, organization, or country.
3. Power. It refers to the ability to do something or act in a way, especially as a faculty
or quality.
4. Leadership. It is the action of leading a group of people or an organization.
5. Traits. It refers to a distinguishing quality or characteristic, typically one belonging to
a person.
6. Skills. It is the ability to do something well; expertise.
7. Charisma. - compelling attractiveness or charm that can inspire devotion in others.
8. Contingency. It is a future event or circumstance which is possible but cannot be
predicted with certainty.
9. Autocratic Leaders. Also known as authoritarian leadership.
10. Free-Rein Leaders. Also called Laissez-Faire.
87
Essential Knowledge
weeks of the course, you need to review essential principles in engineering management
necessary that will be laid down in the succeeding pages. Please note that you are
not limited to exclusively refer to these resources. Thus, you are expected to utilize
other books, research articles, and other resources that are available in the university’s
library e.g. ebrary, search.proquest.com etc.
Leading
Leading is that management function which “involves influencing others to engage in

the work behaviors necessary to reach organizational goals.
How Leaders Influence Others Base of Power
The power possessed by leaders may be classified according to various bases. They are as
follows:
1. Legitimate Power
A person who occupies a higher position has legitimate power over persons
in lower positions within the organization.
2. Reward Power
When a person can give rewards to anybody who follows orders or requests,
the is said to have reward power.
3. Coercive Power
When a person compels another to comply with orders through threats or
punishment, he is said to coercive power.
4. Referent Power
When a person can get compliance from another because the latter would
want to be identified with the former, that person is said to have referent power.
5. Expert Power
Experts provide specialized information regarding their specific lines of
expertise.
The Nature of Leadership

Leadership may be referred to as “the process of influencing and supporting others
to work enthusiastically toward achieving objectives.”
88
Traits of Effective Leaders
There are certain leadership traits identified by researchers and which may be useful in
developing effective leaders. These traits are as follows:
1. Personal Drive
Persons with drive are those identified as willing to accept responsibility, possess
vigor, initiative, persistence, and health.
2. The Desire to Lead

Some persons have all the qualifications for leadership.
3. Personal Integrity
A person who is well-regarded by others as one who has integrity possesses one
trait of a leader.
4. Self Confidence
The activities of leaders require moves that will produce the needed outputs.
5. Analytical Ability
Leaders are, oftentimes, faced with difficulties that prevent the completion of
assigned tasks.
6. Knowledge of the Company, Industrial or Technology

A leader who is well-informed about his company, the industry where the company
belongs, and the technology utilized by the industry, will be in a better position to
provide directions to his unit.
7. Charisma
When a person has sufficient personal magnetism that leads people to follow his
directives, this person is said to have charisma.
8. Creativity
Ronnie Millevo defines creativity as “the ability to combine existing data,
experience, and preconditions from various sources in such away.
9. Flexibility
People differ in the way they do their work. One will adopt a different method from
another person’s method.
Leadership Skills
Leaders need to have various skills to be effective. They are:

89
1. Technical Skills
These are skills a leader must possess to enable him to understand and make
decisions about processes, activities, and technology.
2. Human Skills
These skills refer to the ability of a leader to deal with people, both inside and
outside the organization.
3. Conceptual Skills
These skills refer to “the ability to think in abstract terms, to see how parts fit
together to form the whole”.
Way Leaders Uses Power
Leadership styles also vary according to how power is used. They are as follows:
1. Autocratic Leader
Leaders who make decisions themselves, without consulting subordinates are
called autocratic leaders.
2. Participative Leaders
When a leader openly invites his subordinates to participate or share in decisions,
policymaking, and operation methods, he is said to be a participative leader.
3. Free-Rein Leaders
Leaders who set objectives and allow employees or subordinates relative freedom
to do whatever it takes to accomplish these objectives are called free-rein leaders.
Leaders Orientation Toward Task and People
Leaders may be classified according to how they view tasks and people. Consequently,
a leader may either be:
1. Employee Orientation
A leader is said to be employee-oriented when he considers employees as human
beings of “intrinsic importance and with individual and personal need” to satisfy.
2. Task Orientation
A leader is said to be task-oriented if he places stress on production and the technical
aspects of the job and the employees are viewed as the means of getting the work
done.
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Contingency Approaches to Leadership Style
The contingency approach is “an effort to determine through research which managerial
practices and techniques are appropriate in specific. The various contingency approaches
are as follows:
1. Fiedler’s Contingency Model

According to Fred Fiedler, “leadership is effective when the leader’s style is
appropriate to the situation. “The situational characteristics is determined by three
principal factors:
• The relations between leaders and followers
• The structure of the task
• The power inherent in the leader’s position
2. Hersey and Blanchard’s Situational Leadership Model

The situational leadership model developed by Hersey and Blanchard
suggests that the most important factor affecting the selection of a leader’s style is
the development (or maturity) level of a subordinate. The leader should match his or
her style to this maturity level.
The majority has two components:

• job skills and knowledge
• psychological maturity
3. Path-Goal Model of Leadership

By using the path-goal model, it is assumed that effective leaders can enhance
subordinate motivation by:
• Clarifying the subordinate’s perception of work goals,
• Linking meaningful rewards with goal attainment
• Explaining how goals and desired rewards can be achieved.
4. Vroom’s Decision-Making Mode

Vroom’s model of leadership is one that prescribes the proper leadership style
for various situations, focusing on the appropriate degrees of the delegation of
decision-making authority.
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the lesson.
* Medina R. G. (1977). Engineering Management. Philippines: Rex Book Store

Let’s Check
Activity 1. Now that you know the most essential terms in the study of leading. Let us try to
_________1. One of the traits of effective leaders on which a person who is well-regarded
by others as one who has integrity possesses one trait of a leader.
_________2. This refers to a person who occupies a higher position has legitimate power
over persons in lower positions within the organization.
_________3. One of the traits of effective leaders on which a person with drive are those
identified as willing to accept responsibility, possess vigor, initiative, persistence, and health.
_________4. This is when a person can get compliance from another because the latter
would want to be identified with the former, that person is said to have referent power.
_________5. This refers to a management function which “involves influencing others to
engage in the work behaviors necessary to reach organizational goals.
_________6. One of the traits of effective leaders on which the leaders are, oftentimes,
faced with difficulties that prevent the completion of assigned tasks.
_________7. This is when a person can give rewards to anybody who follows orders or
requests, the is said to have reward power.
_________8. One of the traits of effective leaders on which some persons have all the
qualifications for leadership.
_________9. This is when a person compels another to comply with orders through threats
or punishment, he is said to coercive power.
_________10. This is where the experts provide specialized information regarding their
specific lines of expertise.
Let’s Analyze
1. What is leading? Why is it important to the engineer manager?
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2. How do leaders influence others?
3. Why is it important for a leader to have “the desire to lead”? What happens if the said
desire is not present?
4. What are free-rein leaders?
5. What leadership styles may be used by path-goal proponents?
In a Nutshell
Engineer managers should be equipped with good leadership skills. Leading, as a
management function, involves influencing others to engage in the work behaviors
necessary to reach the organization’s goal. Leaders should have technical, human, and
conceptual skills to be effective. For this activity, you need to identify an engineer of your
choice and describe his/her leadership style. Are there important changes that have to be
made in his/her style? What are those? List down the suggested character change
applicable.
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
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Leading Contingency Reward Power Personal Integrity
Charisma Autocratic Leaders Coercive Power Self Confidence
Power Leaders Referent Power Analytical Ability
Leadership Free-Rein Leaders Expert Power Creativity
Traits Legitimate Power Personal Drive Flexibility
Big Picture in Focus: ULO(c). Explain the objectives of control and

describe the controlling process.
Metalanguage
For you to demonstrate ULO(b), you will need to have an operational understanding
of the following principles below. Please note that you will also be required to refer to the
previous principles found in the ULO(a) section.
1. Control. Defined as having a means of measurement and initiating adjustments in

the course of activity to address unwanted changes to cost, schedule, quality, or risk
elements that have influenced the activity.
2. Objectives. It refers to a thing aimed at or sought.
3. Feedforward. It is an element or pathway within a control system that passes a
controlling signal from a source in its external environment to a load elsewhere in its
external environment.
4. Concurrent. It takes place while an activity is in progress. It involves the regulation
of ongoing activities that are part of the transformation process.
5. Feedback Control. It refers to a process that managers can use to evaluate how
effectively their teams meet the stated goals at the end of a production process
6. Appraisals. It is an expert estimate of the value of something.
7. Statistical. Relating to the use of statistics.
8. Inadequate. Define as a lack of the quality or quantity required.
9. Revenues. It refers to an income, especially when of a company or organization and
substantial nature.
10. Profit. It is a financial gain, especially the difference between the amount earned and
the amount spent in buying, operating, or producing something.
Please proceed immediately to the “Essential Knowledge” part since the first
lesson is also a definition of essential terms.
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Essential Knowledge
weeks of the course, you need to review essential principles in machine elements 2
necessaries that will be laid down in the succeeding pages. Please note that you are
not limited to exclusively refer to these resources. Thus, you are expected to utilize other
books, research articles, and other resources that are available in the university’s library
e.g. ebrary, search.proquest.com etc.
Controlling
Controlling refers to the “process of ascertaining whether organizational objectives
have been achieved; if not, why not; and determining what activities should then be taken
to achieve objectives better in the future.”
Importance of Controlling
When controlling is properly implemented, it will help the organization achieve its goal
most efficiently and effectively possible. Deviations, mistakes, and shortcomings happen
inevitably. When they occur in daily operations, they contribute to unnecessary expenditures
which increase the cost of producing goods and services.
Steps in the Control Process

The control process consists of four steps, namely:
1. Establishing performance objectives and standards
2. Measuring actual performance
3. Comparing actual performance to objectives and standards
4. Taking necessary action based on the results of the comparisons.
Establishing Performance Objectives and Standards

In controlling, what has to be achieved must first be determined. Examples of such
objectives and standards are as follows:
1. Sales targets – which are expressed in quantity or monetary terms
2. Production targets- which are expressed in quantity or quality
3. Worker attendance – which is expressed in terms of rate of absences
4. Safety Record – which is expressed in the number of accidents for given periods
5. Supplies used- which are expressed in quantity or monetary terms for given periods
Measuring Actual Performance

There is a need to measure actual performance so that when shortcomings occur,
adjustments could be made. The adjustments will depend on the actual findings.
Comparing Actual Performance to Objectives and Standards

Once the actual performance has been determined, this will be compared with what
the organization seeks to achieve.
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Taking Necessary Action
The purpose of comparing actual performance with the desired result is to provide
management with the opportunity to take corrective action when necessary.
Types of Control
Control consists of three distinct types, namely:
1. Feedforward control
2. Concurrent control
3. Feedback control
Feedforward Control
When management anticipates problems and prevents their occurrence, the type of
control measure undertaken is called feedforward control.
Concurrent Control
When operations are already ongoing and activities to detect variances are made,
concurrent control is said to be undertaken. It is always possible that deviations from
standards will happen in the production process.
Feedback Control
When information is gathered about a completed activity, and so that evaluation and
steps for improvement are derived, feedback control is undertaken.
Components of Organizational Control Systems

The organizational control system consists of the following:
1. Strategic plan
2. The long-range financial plan
3. The operating budget
4. Performance appraisals
5. Statistical reports
6. Policies and procedures
Strategic Plans
It provides the basic control mechanism for the organization. When there are
indicators that activities do not facilitate the accomplishment of strategic goals, these
activities are either set aside, modified, or expanded.
The Long-Range Financial Plan

The panning horizon differs from company to company. Most firms will be satisfied
with one year. Engineering firms, however, will require longer-term financial plans.
The Operating Budget
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An operating budget indicates the expenditures, revenues, or profits planned for
some future period regarding operations.
Performance Appraisals
Performance appraisal measures employee performance. As such, it provides
employees with a guide on how to do their jobs better in the future.
Statistical Reports
Statistical reports pertain to those that contain data on various developments within
the firm. Among information which may be found in a statistical report pertains to the
following:
1. Labor efficiency rates
2. Quality control rejects
3. Accounts receivable
4. Accounts payable
5. Sales reports
6. Accident reports
7. Power consumption report
Strategic Control Systems

To be able to assure the accomplishment of the strategic objectives of the company,
strategic control systems become necessary. These systems consist of the following:
1. Financial analysis
2. Financial ratio analysis
Financial Analysis
The success of most organizations depends heavily on its financial performance. It is
just fitting that certain measurements of financial performance be made so that whatever
deviations from standards are found out, corrective actions may be introduced.
Financial Ratio Analysis

Financial ratio analysis is a more elaborate approach used in controlling activities.
Under this method, one account appearing in the financial statement is paired with another
to constitute a ratio.
Identifying Control Problems

Recognizing the need for control is one thing, implementing it is another. When
operations become complex, the engineer manager must consider useful steps in
controlling. Kreutner mentions three approaches:
1. Executive reality check
2. Comprehensive internal audit
3. A general checklist of symptoms of inadequate control
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Employees at the frontline often complain that management imposes certain
requirements that are not realistic.
Comprehensive internal audit

An internal audit is undertaken to determine the efficiency and effectiveness of the
activities of an organization. Among the many aspects of operations within the organization,
a small activity that is not done right may continue to be unnoticed until it snowballs into a
full-blown problem.
Symptoms of Inadequate Control

If a comprehensive internal audit cannot be availed of for some reason, the use of a
checklist for symptoms of inadequate control may be used.
Kreitner has listed some of the common symptoms as follows:
1. An unexplained decline in revenues and profits.
2. Degradation of service (customer complaints)
3. Employee dissatisfaction (complaints, grievances, turnover).
4. Cash shortages caused by bloated inventories or delinquent accounts receivable.
5. Idle facilities or personnel
6. Disorganized operations (workflow bottlenecks, excessive paperwork).
7. Excessive costs.
8. Evidence of waste and inefficiency (scrap, rework)
the lesson.

Let’s Check!
Activity 1. Now that you know the most essential terms in the study of control. Let us try to
__________1. An example of such objectives and standards in which are expressed in

quantity or monetary terms for given periods.
__________2. An example of such objectives and standards in which is expressed in the
number of accidents for given periods
__________3. This is when information is gathered about a completed activity, and so that
evaluation and steps for improvement are derived, feedback control is undertaken
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__________4. This refers to the “process of ascertaining whether organizational objectives
have been achieved; if not, why not; and determining what activities should then be taken
to achieve objectives better in the future.”
terms of rate of absences
__________6. It refers to a more elaborate approach used in controlling activities.
quantity or quality
__________8. This is when operations are already ongoing and activities to detect
variances are made, concurrent control is said to be undertaken.
quantity or monetary terms
__________10. This is when management anticipates problems and prevents their
occurrence, the type of control measure undertaken is called feedforward control
Let’s Analyze!
1. Why is controlling a very important management function?
2. What is controlling? Is it applicable to the day-to-day activities of the engineer manager?
3. Compare and contrast the three distinct types of control.
4. What are policies? In what ways do they facilitate control?
5. Do you consider “idle facilities or personnel” as a symptom of inadequate control? Why

or why not?
In a Nutshell
Controlling is one of the main functions of management which next to planning, directing, and
organizing. It is so important because it complements the other functions of management. Controlling
is aimed at determining whether objectives were realized or not, and if not, by providing means for
achievement. For this activity, list down the control activities that may be used to any of the following:
a. The installation of a powerplant
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b. The manufacture of a microchip
c. The manufacture of tricycle
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
Control Appraisals Strategic Plan Feedforward Control

Policies and
Objectives Statistical Concurrent Control
Procedures
Feedforward Inadequate Statistical Reports Feedback Control
Performance
Concurrent Revenues Safety Record
Appraisals
The Operating
Supplies Used
Budget
Big Picture
a. acknowledge the ideas about how engineering managers manage the

product and service operation;
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b. demonstrate a comprehensive understanding about how should engineering
managers manage the marketing function, and;
c. show a comprehensive understanding about how should engineering
managers manage the finance function
Big Picture in Focus: ULO(a). Acknowledge the ideas about how

engineering managers manage the product and
service operation.
Metalanguage
For you to demonstrate ULO(a), you will need to have an operational understanding
of the following principles below.
1. Operation. Operations refer to any process that accepts inputs and uses resources
to change those inputs in useful ways.
2. Efficiency. Efficiency is related to “the cost of doing something, or the resource
utilization involved.
3. Effectiveness. Effectiveness refers to goal accomplishment.
4. Manufacturing. Manufacturing processes are those that refer to the making of
products by hand or with machinery.
5. Job shop. A job shop is one whose production is based on sales orders for a variety
of small lots.
6. Batch Flow. The batch flow process is where lots of generally own designed products
are manufactured. It is further characterized by the following:
7. Assembly line. An assembly line refers to a production layout arranged in a
sequence to accommodate the processing of large volumes of standardizing products
or services.
8. Machine-Paced Assembly Line. This type of production process produces mostly
standard products with machines playing a significant role.
9. Continuous Flow. The continuous flow processing is characterized by -“the rapid
rate at which items move through the system.
10. Product Design. Product design refers to the process of creating a set of product
specifications appropriate to the demands of the situation.
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Essential Knowledge
e.g. ebrary, search.proquest.com, etc.
Managing Production and Service Operations

Organizations are designed mainly to produce products or services. If these
organizations must survive and grow, the operations function must be undertaken in the
most economical manner possible.
Operation
Operations refer to any process that accepts inputs and uses resources to change
those inputs in useful ways.
Examples of final goods and services are as follows:

1. Industrial chemicals like methylene chloride, borax powder, phosphoric acid, etc.,
which are produced by chemical manufacturing firms;
2. Services like those for the construction of ports, high-rise buildings, roads, bridges,
etc., which are produced by constructions firms;
3. Electrical products like transformers, circuit breakers, switch gears, power capacitors,
etc., which are produced by electrical manufacturing firms;
4. Electronic products like oscilloscope, microwave tests systems, transistors, cable
testers, etc., which are produced by electronics manufacturing firms;
5. Mechanical devices like forklifts, trucks, loaders, etc., which are produced by
manufacturing firms.
6. Engineering consultancy services like those for construction management and
supervision, project management services, etc., which are produced by engineering
consultancy firms.
Operation Management
Operations is an activity that needs to be managed by competent persons. Aldag and
Stearns accurately defined operations management as “the process of planning, organizing,
and controlling operations to reach objectives efficiently and effectively.“ As the terms
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“planning”, “organizing”, and ‘controlling’ have already been discussed in the previous
section, elaborations on the terms “efficiency“ and “effectiveness' will be made.
Efficiency is related to “the cost of doing something, or the resource utilization

involved." When a person performs a job at a lesser cost than when another person performs
the same job, he is more efficient than the other person.
Effectiveness refers to goal accomplishment. When one is able to reach his

objectives, say produce 10,000 units in one month, he is said to be effective.
Operations management must be performed in coordination with the other functions

like those for marketing and finance. Although the specific activities of the operations
divisions of firms slightly differ from one another, the basic function remains the same, i.e.,
to produce products or services.
Operations and The Engineer Manager

The engineer manager is expected to produce some output at whatever management
level he is. If he is assigned as the manufacturing engineer, his function is to determine and
define the equipment, tools, and processes required to convert the design of the desired
product into reality in an efficient manner.
The engineer in charge of operations in a construction firm is responsible for the

actual construction of whatever bridge or road his company has agreed to put up. He is
required to do it using the least expensive and the easiest methods.
The engineer, as operations manager, must find ways to contribute to the production
of quality goods or services and the reduction of costs in his department.
The typical operations manager is one with several years of experience in the
operations division and possesses an academic background in engineering.
Types of Transformation Process

The engineer manager must have some knowledge of the various types of the
transformation process. They are as follows:
1. Manufacturing processes
a) job shop
b) batch flow
c) worker-paced line flow
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d) machine-paced line flow
e) batch/continuous flow hybrid
f) continuous flow ‘E
2. Service processes
a) service factory
b) service shop
c) mass service
d) professional service
Manufacturing Processes
Manufacturing processes are those that refer to the making of products by hand or
with machinery.
Job Shop. A job shop is one whose production is based on sales orders for a variety
of small lots. Job shops are very useful components of the entire production effort since they
manufacture products in small lots that are needed by but cannot be produced economically
by many companies. Depending upon the customer's needs, a job shop may produce a lot
consisting of 20 to 200 or more similar parts.
Job shops produce custom products, in general. Products may be manufactured

within a short notice. The equipment used is of the general-purpose type.
The type of layout used by job shops in the process layout, where similar machines
are grouped. The typical size of the operation is generally small. Job shops are labor-
intensive, and machines are frequently idle. Figure 10.4 shows a process flow diagram for
a job shop.
Batch Flow. The batch flow process is where lots of generally own designed products
are manufactured. It is further characterized by the following:
1. There is flexibility to produce either low or high volumes.

2. Not all procedures are performed on all products.
3. The type of equipment used is mostly for general purposes.
4. The process layout is used.
5. The operation is labor-intensive, although there is less machine idleness.
6. The size of the operation is generally medium-sized.
Examples of factories using the large batch flow a winery, scrap-metal reduction
plants, and road-repair contractors.
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Worker-Paced Assembly Line. An assembly line refers to a production layout
arranged in a sequence to accommodate the processing of large volumes of standardizing
products or services.
The quality and quantity of output in a worker-paced assembly line depend to a great
extent to the skill of the labor utilized. Examples of worker-paced assembly lines are food
marts like McDonald's and Shakeys.
The worker-paced assembly line is characterized by the following:

1. The products manufactured are mostly standardized.
2. There is a clear process pattern.
3. Specialized equipment is used.
4. The size of the operation is variable.
5. The process is worker-paced.
6. The type of layout used is line flow.
7. Labor is still a big cost item.
Machine-Paced Assembly Line. This type of production process produces mostly

standard products with machines playing a significant role. Among its other features are as
follows:
1. The process is of a clear, rigid pattern.
2. A Specialized type of equipment is used.
3. The line flow layout is used.
4. Capital equipment is a bigger cost item than labor.
5. The operation is large.
6. The process is machine-paced.
Examples of the machine-paced assembly line are automobile manufacturers like
General Motors and Ford Motors
Continuous Flow. The continuous flow processing is characterized by -“the rapid

rate at which items move through the system. This processing method is very appropriate
for producing highly standardized products like calculators, typewriters, automobiles,
televisions, cellular phones, etc.
Its other characteristics are as follows:
1. There is an economy of scale in production, resulting in a low per-unit cost of
production.
2. The process is clear and very rigid.
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3. Specialized equipment is used.
4. The line flow layout is used.
5. Operations are highly capital intensive.
6. The size of operations is very large.
7. Processing is fast.
Batch / Continuous Flow Hybrid. This method of processing is a combination of the

batch and the continuous flow. Two distinct layouts are used, one for batch and one for the
continuous flow. The typical size of the operation is also very large giving opportunities for
economies of scale.
Examples of companies using the batch/continuous flow hybrid are breweries, gelatin
producers, and tobacco manufacturers.
Service Processes
Service processes are those that refer to the provision of services to persons by hand
or with machinery.
Service Factory. A service factory offers a limited mix of services which results in
some economies of scale in operations. This also affords the company to compete in terms
of price and speed of producing the service.
The process layout preferred by the service factory is the rigid pattern of line flow
processing. McDonald's and Shakeys are also examples of service factories.
Service Shop. A service shop provides a diverse mix of services. The layout used are
those for job shops or fixed positions and are adaptable to various requirements.
Service shops abound throughout the Philippines. Examples are Servitek and
Megashell. Among the services provided by these shops are car engine tune-up, wheel
balancing, wheel alignment, change oil, etc.
Mass Service. A mass service company provides services to a large number of

people simultaneously. A unique processing method is, therefore, necessary to satisfy this
requirement. To be able to serve many people, mass service companies offer a limited mix
of services.
The process layout used is typically fixed position where customers move through
the layout.
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Professional Services. These are companies that provide specialized services to
other firms or individuals. Examples of such firms are as follows:
1. Engineering or management consulting services which help in improving the plant
layout or the efficiency of a company.
2. Design services that supply designs for a physical plant, products, and promotion
materials.
3. Advertising agencies which help promote a firm's products.
4. Accounting services.
5. Legal services.
6. Data processing services.
7. Health services.
Professional service firms 0fi'er a diverse mix of services. There is a lower utilization
of capital equipment compared to the service factory and the service shop. The process
pattern used is very loose. The process layout used is identical to the job shop.
Professional service firms are, oftentimes, faced with delivery problems brought
about by nonuniform demand. Strategies that may be used "depending on the situation are
as follows:
1. The use of staggered work-shift schedules.
2. The hiring of part-time staff.
3. Providing the customer with the opportunity to select the level of service.
4. Installing auxiliary capacity or hiring subcontractors.
5. Using multiskilled floating staff.
6. Installing customer self-service.
Important Parts of Productive Systems
Productive systems consist of six important activities as follows:

1. product design
2. production planning and scheduling
3. purchasing and materials management
4. inventory control
5. work flow layout
6. quality control
Product Design
Customers expect that the products they buy would perform according to assigned
functions. A good product design assures that this will be so. Customers avoid buying
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products with poor product design. An example is a certain brand of ball pen which fails to
write after one or two days of actual use. This happens because of poor product design.
Product design refers to the process of creating a set of product specifications

appropriate to the demands of the situation.
Companies wanting to maintain or improve their market share keeps a product design
team composed of engineers, manufacturing, and marketing specialists.
Production Planning and Scheduling

Production planning may be defined as “forecasting the future sales of a given
product, translating this forecast into the demand it generates for various production facilities
and arranging for the procurement of these facilities."
Production planning is a very important activity because it helps management to

make decisions regarding capacity. When the right decisions are made, there will be fewer
opportunities for wastages.
Scheduling is the “phase of production control involved in developing timetables that

specify how long each operation in the production process takes.” Efficient scheduling
assures the optimization of the use of human and nonhuman resources.
Purchasing and Materials Management

Firms need to purchase supplies and materials required in the various production
activities. The management of purchasing and materials must be undertaken with a high
degree of efficiency and effectiveness especially in firms engaged in high volume
production. The wider variety of supplies and materials needed adds to the necessity of
properly managing and purchasing of materials.
Materials management refers to “the approach that seeks efficiency of operation

through the integration of all material acquisition, movement, and storage activities in the
firm.
Inventory Control
Inventory control is the process of establishing and maintaining appropriate levels of
reserve stocks of goods. “As supplies and materials are required by firms in the production
process, these must be kept available when they are needed. ‘Ibo much reserves of stocks
will penalize the firm in terms of high storage costs and other related risks like obsolescence
and theft. Too little reserves, on the other hand, may mean lost income opportunities if
108
production activities are hampered. A balance between the two extremes must be
determined.
There are ways of achieving proper inventory control. They are as follows:
1. determining reorder point and reorder quantity
2. determining economic order quantity
3. the use of just-in-time (JIT) method of inventory control
4. the use of the material requirement planning (MRP) method of planning and
controlling inventories.
Work-Flow Layout
The work-flow layout is the process of determining the physical arrangement of the
production system. In the transformation process, the flow of work may be done either
haphazardly or orderly.
The job of the operations manager is to assure that a cost-effective work-flow layout
is installed. A good workflow layout will have the following benefits:
1. Minimize investment in equipment.
2. Minimize overall production time.
3. Use existing space most effectively.
4. Provide for employee convenience, safety, and comfort.
5. Maintain flexibility of arrangement and operation.
6. Minimize material handling costs.
7. Minimize variation in types of material-handling equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.
Quality Control
Quality control refers to the measurement of products or services against standards
set by the company. Certain standard requirements are maintained by the management to
facilitate production and to keep customers satisfied.
Poor quality control breeds customer complaints, returned merchandise, expensive

lawsuits, and huge promotional expenditures.
109
the lesson.

Let’s Check!
Activity 1. You need to research the transformation process of an existing company. Site
some part on the transformation process where improvements in the flow could be
introduced.
Let’s Analyze!
1. What do you mean by” operation”? Does this term cover production of farm product?
2. What are the types of transformation process? In what way are they are similar and
different?
3. What is the batch flow process?
4. What are the important parts of productive system?
5. What types of services are offered by professional service firms? What production
problems do these firms encounter?
In a Nutshell
You have already known how essential to know about how engineering mangers
manage the product and service operation. Also, it tackles the different organizational units
of a company. This time, I will provide you my perspective, and you continue the remaining.
1. Management of operation is very difficult for new and survival firms.
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2. The function of the operations manager is to plan, organize, and control operations to
achieve objectives efficiently, and effectively the engineer manager is, oftentimes,
assigned to perform the tasks of the operations manager.
Your Turn:
3. __________________________________________________________________
__________________________________________________________________
4. __________________________________________________________________
__________________________________________________________________
5. __________________________________________________________________
__________________________________________________________________
6. __________________________________________________________________
__________________________________________________________________
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
Operation Operation Management

Transformation Process Service Processes
Parts of Productive Systems
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Big Picture in Focus: ULO(b). Demonstrate a comprehensive
understanding about how should engineering
managers manage the marketing function.
Metalanguage
1. Marketing. Marketing is a group of activities designed to facilitate and expedite the

selling of goods and services.
2. Product. The term “product” includes the tangible (or intangible) item and its capacity
to satisfy a specific need.
3. Price. Price refers to “the money or other considerations exchanged for the purchase
or use of the product, idea, or service.”
4. Place. It is very important for companies to locate in places where they can be easily
reached by their customers.
5. Promotion. Promotion as “communicating information between the seller and
potential buyer to influence attitudes and behavior.”
6. Advertising. Advertising defines advertising as a paid message that appears in the
mass media to inform or persuade people about particular products, services, beliefs,
or actions.
Essential Knowledge
112
Managing the Marketing Function
Engineer managers are engaged in the production of tangible or intangible goods.
Some of these engineer managers are directly responsible for marketing the company's
products or services. If he is promoted as a general manager, both the production and
marketing functions become his overall concern.
At whatever management level the engineer manager works, he must be concerned

with convincing others to patronize his outputs. If he is the general manager of a construction
firm, he must convince people with construction needs to avail of the services of the
company. If he is the staff officer of a top executive, he must convince his boss to
continuously rely on him regarding the staff services he provides.
If the foregoing statements are true, the engineer manager has a marketing problem.
He needs to understand certain concepts related to the marketing discipline.
What is the Marketing Concept?

Marketing is a group of activities designed to facilitate and expedite the selling of
goods and services. The marketing concept states that the engineer must try to satisfy the
needs of his clients utilizing a set of coordinated activities. When clients are satisfied with
what the company offers, they continually provide business.
The Engineer and the Four P’s Of Marketing

The engineering organization will be able to meet the requirements of its clients (or
customers) depending on how it uses the four P's of marketing which-are as follows:
1. the product (or service)
2. the price
3. the place, and
4. the promotion.
The Product
In the marketing sense, the term “product” includes the tangible (or intangible) item
and its capacity to satisfy a specific need. When a customer buys a car, he is actually buying
the comfortable ride he anticipates to derive from the car. This is not to mention the
psychological benefits attached to the ownership of a car.
The services provided by the engineer manager will be evaluated by the client on the
basis of whether or not his or her exact needs are met. When a competitor comes into the
picture and sells the same type of service, the pressure to improve the quality of services
sold will be felt. When improvement is not possible, “extras” or “bonuses” are given to clients.
113
An example is the construction company that provides “free estimates” on whatever inquiries
on construction are received.
The Price
Price refers to “the money or other considerations exchanged for the purchase or use
of the product, idea, or service.” Some companies use price as a competitive tool or as a
means to convince the customer to buy. When products are similar in quality and other
characteristics, price will be a strong factor on whether or not a sale will be made. This does
not hold true, however, in the selling of services and ideas. This is because of the
uniqueness of every service rendered or every idea generated.
When a type of service becomes standardized, price can be a strong competitive tool.
When a construction firm, for instance, charges a flat 10 percent service fee for all of its
construction services, a competitor may charge a lower rate. Such action, however, will be
subject to whether or not the industry will allow such practice.
The Place
If every factor is equal, customers would prefer to buy from firms easily accessible to
them. If time is of the essence, the nearest firm will be patronized.
It is very important for companies to locate in places where they can be easily
reached by their customers. Not every place is the right location for any company.
When a company cannot be near the customers, it uses other means to eliminate or
minimize the effects of the problem. Some of these means are:
1. hiring sales agents to cover specific areas;
2. selling to dealers in particular areas;
3. establishing branches where customers are located;
4. establishing franchises in selected areas.
Manufacturing companies can choose or adapt all of the above-mentioned options.

Service companies like construction firms adapt the modified versions. An example is the
engineer manager of a construction firm who gives commissions to whoever could negotiate
a construction contract for the firm.
The Promotion
When engineer managers have products or services to sell, they will have to convince
buyers to buy from them. Before the buyer makes the purchasing decision, however, he
114
must first be informed, persuaded, and influenced. The activity referred to, in this case, is
called promotion.
McCarthy and Perreault define promotion as “communicating information between

seller and potential buyer to influence attitudes and behavior.”
There are promotional tools available and the engineer manager must be familiar with
them if he wants to use them effectively. These tools are as follows:
1. advertising
2. publicity
3. personal selling
4. sales promotion
Advertising. Nylen defines advertising as “a paid message that appears in the mass
media for the purpose of informing or persuading people about particular products, services,
beliefs, or action.” The mass media referred to include television, radio, magazines, and
newspapers. If the engineering manager wants to reach a large number of people, he may
use any of the mass media depending on his specific needs and his budget. Each of the
public advertising carriers, i.e., radio, television, magazines, and newspapers, has their own
specific audiences and careful analysis must be made if the engineering manager wants to
pick the right one.
Publicity. The promotional tool that publishes news or information about a product,
service, or idea on behalf of a sponsor but is not paid for by the sponsor is called publicity.
The mass media is also the means used for publicity. If the engineer manager knows how
to use it, publicity is a very useful promotional tool. His message may be presented as a
news item, helpful information, or an announcement.
Personal Selling. A more aggressive means of promoting the sales of a product or

service is called personal selling. It refers to the “oral presentation in a conversation with
one or more prospective purchasers for the purpose of making a sale.”
Personal selling may be useful to the marketing efforts of the engineer manager. If,
for instance, he is the general manager of a firm manufacturing spare parts, he may assign
some employees to personally seek out spare-parts dealers and big trucking companies to
carry their product lines.
Sales Promotion. Any paid attempt to communicate with the customers other than
advertising, publicity, and personal selling, may be considered sales promotion. This
115
includes displays, contests, sweepstakes, coupons, trading stamps, prizes, samples,
demonstrations, referral gifts, etc.
Strategic Marketing for Engineers

Companies, including those managed by engineer managers, must serve markets
that are best fitted to their capabilities. This is a very important activity called strategic
marketing is undertaken.
Under this set-up, the following steps are made:

1. selecting a target market
2. developing a marketing mix
Selecting a Target Market

A market consists of individuals or organizations, or both, with the desire and ability
to buy a specific product or service. To maximize sales and profits, a company has the option
of sewing entirely or just a portion of its chosen market. Within markets are segments with
common needs and which will respond similarly to a marketing action. Figure 11.5 shows
an example of the various segments of a given market.
An analysis of the various segments of the chosen market will help the company
decide on whether to serve all or some of the segments. The segment or segments chosen
to become the target market.
In selecting a target market, the following steps are necessary:

1. Divide the total market into groups of people who have a relatively similar product or
service needs.
2. Determine the profit potentials of each segment.
3. Decide on which segment or segments will be served by the company.
A company may choose any or all the residential, industrial, and government
segments. This decision will depend, however, on the profit potentials of each segment and
the capability of the firm.
A smaller company may find it most profitable to supply only the construction material
needs of the residential segment. A bigger company, however, may find it more profitable
to perform actual construction in addition to selling construction materials.
116
Factors Used in Selecting a Target Market. A target market must have the ability to
satisfy the profit objectives of the company. In selecting a target market, the following factors
must be taken into consideration:
1. the size of the market, and

2. the number of competitors serving the market.
The total demand for the product or service in a given area must be determined first
if the company wants to serve that particular market. If there are existing businesses serving
the market, the net demand must be considered. Figure 11.6 illustrates an example of the
relationship between demand and supply of a particular product. The figures presented
indicate that there is still room for another company in the market for telephone lines in
Cabanatuan City.
Developing a Marketing Mix

After the target market has been identified, a marketing mix must be created and
maintained. The marketing mix consists of four variables: the product, the price, the
promotion, and the place (or distribution).
Given a marketing environment, the engineer manager can manipulate any or all
variables to achieve the company's goals. As such, the quality of the product may be
enhanced, or the selling price made a little lower, or the promotion activity made a little more
aggressive, or a wider distribution area may be covered. Any or all of the foregoing may be
undertaken as conditions warrant.
the lesson.

Let’s Check!
Activity 1. Choose an engineering firm of your choice. You need to make sure that this
firm is with an existing marketing unit. Draw the organization chart of the firm showing the
marketing unit and its relationship with other units.
117
Let’s Analyze!
1. How may the marketing concept be explained? Is it applicable to an engineering firm?
2. How may the engineer manager meet the threat of a competitor’s product?
3. Why is price said to be a strong competitive tool?
4. How may the engineer manager convince the buyer or client to patronize the firm?
5. In selecting a target market, what must the engineer manager do?
In a Nutshell
You’ve already known how essential to know about how engineering mangers
manage the marketing function of a company. Also, it tackles the different organizational
units of a company. This time, I will provide you my perspective, and you continue the
remaining.
1. Part of the task of any company is to market their products and services that they can
offer to their customer.
2. The responsibility of an engineer manager is to convince customers to patronize their
products and services which is the proper managing of the marketing function.
Your Turn:
3. __________________________________________________________________
__________________________________________________________________
4. __________________________________________________________________
__________________________________________________________________
5. __________________________________________________________________
__________________________________________________________________
6. __________________________________________________________________
__________________________________________________________________
118
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
Marketing Marketing Concept

Four P’s of Marketing Strategic Marketing for Engineers
Big Picture in Focus: ULO(c). Show a comprehensive

understanding about how should engineering
managers manage the finance function
Metalanguage
1. Finance Function. The finance function is an important management responsibility

that deals with the procurement and administration of funds with the view of
achieving the objectives of business.
2. Financing Daily Operations. The day-to-day operations of the engineering firm will
require funds to take care of expenses as they come.
3. Cash sales. Cash is derived when the firm sells its products or services.
119
4. Collection of Accounts Receivables. Some engineering firms extend credit to
customers. When these are settled, cash is made available.
5. Loans and Credits. When other sources of financing are not enough, the firm will
have to resort to borrowing.
6. Sale of assets. Cash is sometimes obtained from the sale of the company’s assets.
7. Ownership contribution. When cash is not enough, the firm may tap its owners to
provide more money.
8. Advances from customers. Sometimes, customers are required to pay cash
advances on orders made. This helps the firm in financing its production activities.
Essential Knowledge
Managing the Finance Function
The finance function is an important management responsibility that deals with the
“procurement and administration of funds with the view of achieving the objectives of the
business." If the engineer manager is running the firm as a whole, he must be concerned
with the determination of the number of funds required, when they are needed, how to
procure them, and how to effectively and efficiently use them.
The Finance Function: A Process Flow

1. Determination of Fund Requirements
- Short-Term
- Long Term
2. Procurement of Funds
- Short-Term
- Long Term
3. Effective and Efficient Use of Funds
- Short-Term
120
- Long Term
The Determination of Fund Requirements

Any organization, including the engineering firm, will need funds for the following
specific requirements.
1. to finance daily operations

2. to finance the firm’s credit services
3. to finance the purchase of inventory
4. to finance the purchase of major assets
Financing Daily Operations

The day-to-day operations of the engineering firm will require funds to take care of
expenses as they come. Money must be made available for the payment of the following.
1. wages and salaries
2. rent
3. taxes
4. power and light
5. marketing expenses like those for advertising, entertainment, travel expenses,
telephone and telegraph, stationery and printing, postage, etc.
6. administrative expenses like those for auditing, legal, services, etc.
Financing the Firm's Credit Services

It is oftentimes unavoidable for firms to extend credit to customers. If the engineering
firm manufactures products, sales terms vary from cash to 90~day extensions to customers.
Construction firms will have finance the construction of government projects that be paid
many months later.
Financing the Purchase of Inventory

The maintenance of adequate inventory is crucial to many firms. Raw materials,
supplies, and parts needed to be kept in storage so they will be available when needed.
Many firms cannot cope with delays in the availability of the required material inputs in the
duction process, so these must be kept ready required.
Financing the Purchase of Major Asset

Companies, at times, need to purchase major when top management decides on
expansion, there be a need to make investments in capital assets like land plant and
equipment.
121
Sources of Funds
To finance its various activities, the engineering firm will have to make use of its cash
inflows coming from various sources, namely:
1. Cash sales. Cash is derived when the firm sells its products or services.
2. Collection of Accounts Receivables. Some engineering firms extend credit to customers.
When these are settled, cash is made available.
3. Loans and Credits. When other sources of financing are not enough, the firm will have to
resort to borrowing.
4. Sale of assets. Cash is sometimes obtained from the sale of the company‘s assets.
5. Ownership contribution. When cash is not enough, the firm may tap its owners to provide
more money.
6. Advances from customers. Sometimes, customers are required to pay cash advances on
orders made. This helps the firm in financing its production activities.
Short-Term Sources of Funds

Loans and credits may be classified as short-term, medium-term, or long-term. Short-
term sources of funds are those with repayment schedules of less than one year. Collaterals
are sometimes required by short-term creditors.
Advantages of Short-Term Credits. When the engineering firm avails of short-term credits,
the following advantages may be derived:
1. They are easier to obtain. Creditors maintain the view that the risk involved in
short-term lending is also short-term.
2. Short-term financing is often less costly. Since short-term financing is favored by
creditors, they make it available at less cost.
3. Short-term financing offers flexibility to the borrower. After the borrower has
settled his short-term debt, he may consider other means of financing, if he still
requires it. Long-term financing.
Disadvantages of Short-Term Credits. Short-term financing has also some disadvantages.

They are as follows:
1. Short term credits mature more frequently. This may place the engineering firm in e
tight position more often than necessary.
2. Short-term debts may, at times, be more costly than long-term debts.
Supplies of Short-Term Funds. Short-term financing is provided by the following:

1. trade creditors
2. commercial banks
122
3. commercial paper houses
4. finance companies
5. factors
6. insurance companies
Trade creditors refer to suppliers extending credit to a buyer for use in manufacturing,
processing, or reselling goods for profit.
A promissory note is an unconditional promise in writing made by one person to another,

signed by the maker, engaging to pay, on-demand or at a fixed or determinable future time,
a certain sum of money to, or to the order of, a specified person or bearer.
Commercial banks are institutions that individuals or firms may tap as a source of short-
term financing.
Commercial paper houses are those that help business firms in borrowing funds from the
money market.
Business finance companies are financial institutions that finance inventory and
equipment of almost all types and sizes of business firms.
Factors are institutions that buy the accounts receivables of firms, assuming complete
accounting and collection responsibilities.
Insurance companies are also possible sources of short-term funds.
Long-Term Sources of Funds

There are instances when the engineering firm will have to tap the long-term sources
of funds.
Long-term sources of funds are classified as follows:

1. long-term debts
2. common stocks
3. retained earnings.
Long-term debts are sub-classified into term loans and bonds.
Team Loans. A term loan is a “commercial or industrial, loan from a commercial bank,
commonly used for plant and equipment, working capital, or debt repayment.
123
Bonds. A bond is a certificate of indebtedness issued by a corporation to a lender. It is a
marketable security that the firm sells to raise funds.
Common Stocks. The third source of long-term funds consists of the issuance of common
stocks. Since common stocks represent ownership of corporations, many investors are
placing their money in them.
Retained Earnings. Retained earnings refer to “corporate earnings not paid out as
dividends." This simply means that whatever earnings that are due to the stockholders of a
corporation ‘are reinvested.
The Best Source of Financing

As there are various fund sources, the engineer manager, or whoever is in charge,
must determine which source is the best available for the firm.
To determine the best source, Schall and Haley recommend that the following factors
must be considered.
1. flexibility
2. risk
3. income
4. control
5. timing
6. other factors like collateral values, flotation costs, speed, and exposure.
Flexibility
Some fund sources impose certain restrictions on the activities of the borrowers. An
example of a restriction is the prohibition on the issuance of additional debt instruments by
the borrower.
Risk
When applied to the determination of fund sources, risk refers to the chance that the
company will be affected adversely when a particular source of financing is chosen.
Income
The various sources of funds, when availed of, will have their individual effects in the
net income of the engineering firm. When the firm borrows, it must generate enough income
to cover the cost of borrowing and still be left with sufficient returns for the owners.
124
Control
When new owners are taken in because of the need for additional capital, the current
group of owners may lose control of the firm. If the current owners do not want this to happen,
they must consider other means of financing.
Timing
The financial market has its ups and downs. This means that there are times when
certain means financing provide better benefits than at other times. The engineer manager
must, therefore, choose the best time for borrowing or selling equity.
The Firm’s Financial Health
In general, the objectives of engineering firms are as follows:

1. To make profits for the owners
2. to satisfy creditors with the repayment plus interest;
3. to maintain the viability of the firm so that customers will be assured of continuous
supply products or services, employees will be assured of employment, suppliers will
be assured of a market, etc.
Indicators of Financial Health

The financial health of an engineering firm may be determined by the use of three
basic financial statements. These are as follows:
1. Balance sheet — also called the statement of financial position;
2. Income statement — also called the statement of operations;
3. Statement of changes in financial position.
Risk Management and Insurance

The engineer manager, especially those at the top level, is entrusted with the function
of making profits for the company. This would happen if losses brought by improper
management of risks are avoided.
Risk defined
Risk refers to the uncertainty concerning loss or injury. The engineering firm is faced
with a long list of exposure to risks, some of which are as follows:
1. Fire
2. Theft
125
3. Floods
4. Accidents
5. Nonpayment of bills by customers (bad debts)
6. Disability and death
7. Damage claims from other parties.
Type of Risk
Risks may be classified as either pure or speculative. Pure risk is one in which “there
is only a chance of loss.” This means that there is no way of making gains with pure risks.
An example of pure risk is the exposure to loss of the company’s motor car due to theft.
Pure risks are insurable and may be covered by insurance.
What is Risk Management

Risk management is “an organized strategy for protecting and conserving assets and
people." The purpose of risk management is “to choose intelligently from among all the
available methods of dealing with a risk to secure the economic survival of the firm”.
Methods of Dealing with Risk

There are various methods of dealing with risks. They are as follows:
1. the risk may be avoided
2. the risk may be retained
3. the hazard may be reduced
4. the losses may be reduced
5. the risk may be shifted
A person who wants to avoid the risk of losing a property like a house can do so by
simply avoiding the ownership of one. There are instances, however, when ownership
cannot be avoided like those for equipment, appliances, and materials used in the
production process. In this case, other methods of handling risk must be considered.
the lesson.

126
Let’s Check!
Activity 1. Now that you know the most essential terms in the study about managing the
finance function. Let us try to check your understanding of these terms. In the space
provided, write the term/s being asked in the following statements:
____________ 1. This term loan refers to a “commercial or industrial, loan from a

commercial bank, commonly used for plant and equipment, working capital, or debt
repayment.
____________2. This refers to the third source of long-term funds consists of the issuance
of common stocks.
____________3. This refers to the financial market has its ups and downs. This means that
there are times when certain means financing provide better benefits than at other times.
____________4. Some fund sources impose certain restrictions on the activities of the
borrowers.
____________5. Refers to the various sources of funds, when availed of, will have their
individual effects on the net income of the engineering firm.
____________6. It is a certificate of indebtedness issued by a corporation to a lender. It is
a marketable security that the firm sells to raise funds.
____________7. This is when new owners are taken in because of the need for additional
capital, the current group of owners may lose control of the firm.
____________8. This refers to the uncertainty concerning loss or injury.
____________9. This refers to the chance that the company will be affected adversely when
a particular source of financing is chosen.
____________10. Retained earnings refer to “corporate earnings not paid out as dividends."
Let’s Analyze!
Activity 1. Answer the questions below.
1. Determination of fund requirements are? Describe each.
2. What are the sources of Funds? Explain each.
In a Nutshell
In this chapter, simple yet proven analysis, procedures, and technologies have been
described to improve matrix or risk management. What are the methods of dealing with
127
risk? Describe each.
Your Answer:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Q&A List
table provided.
1.
2.
3.
4.
5.
Keywords Index
Funds Finance Function

Fund Requirements Sources of Funds
Short-Term Sources of Funds Long-Term Sources of Funds
Financial Health Risk
Risk Management and Insurance Methods of Dealing with Risk
128
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UNIVERSITY OF MINDANAO

College of Engineering Education

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)

CEE 108– ENGINEERING MANAGEMENT

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

Course Coordinator: Mary Jean A. Bantan, ECE

Course Outline Policy

Areas of Concern Details

Since this course is included in the licensure examination

Assignment Resubmission You should request in writing addressed to the course

If disapproved by the course coordinator, you can elevate

Grading System Assessment methods Weights

You can also meet the course coordinator virtually

Contact Details of the Dean Dr. Charlito L. Cañesares, PME

Contact Details of the Program Head Engr. Rolieven P. Cañizares

Help Desk Contact CEE Blackboard Administrator:

Library Contact Brigida E. Bacani

CO CO1. Identify and discuss the fundamentals of engineering management.

CO2. Describe the elements involved in solving an engineering

a. be acquainted with the definition of engineering management and the

Big Picture in Focus: ULO(a). Be acquainted with the definition of

In this section, an introduction to engineering management and the most fundamental

Role of the Engineer

1. Teaching- where the engineer gets a job as a professor of engineering courses

Figure 2. Engineers working in the academe(www.mtu.edu)

2. Consulting- where the engineer works as a consultant of any individual or

3. Management- where the engineer is assigned to manage groups of people

Figure 4. Management Engineer (www.crowelec.com)

4. Government- where the engineer may find employment in the government

5. Construction- this is where the construction engineer (a civil engineer) is either

7. Manufacturing- where the engineer is directly in charge of production personnel

Figure 5. Engineers Working in Manufacturing Industry (www.marsint.com)

Figure 7. Test Engineer(www.wisegeek.com)

* Medina, R. Engineering Management. Rex Bookstore. 1st edition. Vol.1. pp.2-11

Activity 1. Answer the following questions.

1. Why are engineers considered the most significant segment of society?

2. What are the expected of engineers in general?

3. What is engineering management?

4. How may one define management?

5. In what current concerns are engineering outputs needed?

Big Picture in Focus: ULO(b). Understand the evolution of

1. Scientific Management. Scientific is more focused on the methods to develop an

The History of Management

Socrates described management as a competency separate from technical

James Watt Jr and Matthew Robinson Boulton

• Market analysis and forecasting

In Scotland, Robert Owen also referred to as the father of modern personnel

Henry Varnum Poor

Henry Varnum Poor, editor of American Railroad Journal concluded that

In the early 1880s, Frederick W. Taylor of the Midvale Steel Company

The entire philosophy of Taylor was predicated on the premise that

According to Taylor, there are 4 principles of scientific management:

1. Replace rule-of-thumb work methods based on a scientific study of the tasks.

Another Taylor's colleague at Bethlehem Steel Works, Henry L. Gantt, has

Frank and Lillian Gilbreth

b. General Administrative Management

Although scientific management concentrated on workers as persons and their

A Frenchman called Henri Fayol introduced "systematic management theory"

Under the structure of Fayol, the command mechanism continued to work

Max Weber, the father of bureaucratic management, established a structure

Chester I. Barnard is regarded as a significant transformative figure who

Lyndall Urwick synthesized and consolidated previous writings and research

James Mooney developed three primary management principles: