1 THE FIELD OF ENGINEERING MANAGEMENT

• The Functions of the Engineer

• The Engineer in Various Types of Organization
• Management Skills Required at Various Levels
• What is Engineering Management?
• Management Defined
• The Process of Management
• Requirements for the Engineer Manager's Job
• How One May Become a Successful Engineer
• Manager

Chapter 1 THE FIELD OF ENGINEERING MANAGEMENT

Engineers are expected to perform a variety of tasks depending on their

specialization and job level. It is important to the engineer that he knows what is expected
of him so that he may be able to perform his job effectively and efficiently. His next
concern will be to identify the skills required but which he does not have. As engineers
are not trained to directly deal with people, it is expected that their weakness will most
often be on people-based skills. This difficulty will be more apparent once they are
assigned to occupy management positions. It follows that if the engineer manager would
want to do his job well, some exposure to engineering management activities becomes
necessary.
THE FUNCTIONS OF THE ENGINEER
Since prehistoric times, mankind has benefited from the various tools, equipment, and
projects developed by engineers. Among these are the following:
1. The stone bladed axe which was a very useful tool; and the irrigation system used to
promote crop growing-6000 to 3000 B.C.
2. The pyramids of Egypt 3000 to 600 B.C.,
3 road building by the Romans 400;
4. The production of paper and gunpowder by the Chinese 100 A.D. to 1600 A.D.;
5. the production of steam engine and the spinning and weaving machinery 1601 A.D.
to 1799 A.D.; and
6. the manufacture of cars and household appliances - modern times.
 A listing of all useful tools, equipment, and projects developed and produced by
engineers will be sufficient to produce volumes of books. These contributions indicate
that engineers have become an indispensable segment of the world's professions. This
expectation will continue for a long time.
Even as engineers are currently producing solutions to many of the difficulties
faced by mankind, much is still expected of them. Their outputs, new or improvements
of old ones, are very much needed in the following specific problem concerns
1. the production of more food for a fast growing world population;
2. the elimination of air and water pollution;
3. solid waste disposal and materials recycling;
4. the reduction of noise in various forms;
5. supplying the increasing demand for energy,
6. supplying the increasing demand for mobility;
7 preventing and solving crimes, and
8. meeting the increasing demand for communication facilities.

Specifically, the functions of engineering encompass the following areas:

1. Research - where the engineer is engaged in the process of learning about
nature and codifying this knowledge into usable theories.
2. Design and development - where the engineer undertakes the activity of turning
a product concept to a finished physical item. Design for manufacturability and
value engineering teams (a feature of some companies) are charged with
improvement of designs and specifications at the research, development, design,
and production stages of product development.
3. Testing - where the engineer works in a unit where new products or parts are
tested for work ability.
4. Manufacturing - where the engineer is directly in charge of production personnel
or assumes responsibility for the product.
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.
6. Sales - where the engineer assists the company's customers to meet their needs,
especially those that require technical expertise.
7. Consulting - where the engineer works as consultant of any individual or
organization requiring his services.
 8. Government - where the engineer may find employment in the government
performing any of the various tasks in regulating, monitoring, and controlling the
activities of various institutions, public or private.
9. Teaching - where the engineer gets employment in a school and is assigned as a
teacher of engineering courses. Some of them later become deans, vice
presidents, and presidents.
10. Management where the engineer is assigned to manage groups of people
performing specific tasks.

THE ENGINEER IN VARIOUS TYPES OF ORGANIZATION

From the viewpoint of the engineer, organizations may be classified according to
the degree of engineering jobs performed:
1. Level One - those with minimal engineering jobs like retailing firms.
2. Level Two - those with a moderate degree of engineering jobs like
transportation companies.
3. Level Three - those with a high degree of engineering jobs like construction
firms.

Figure 1.1 Types of Organization and the Management Skills Required of Engineers

The Firm's Quantity of Engineering Jobs

 Management Skills Required at Various Levels
Among the types of organizations, the engineer will have a slim chance of
becoming the general manager or president of level one, unless of course, he owns the
firm. The engineer manager may be assigned to head a small engineering unit of the
firm, but there will not be too many firms which will have this unit.
In level two firms, the engineer may be assigned to head the engineering
division. The need for management skills will now be felt by the engineer manager.
Level three firms provide the biggest opportunity for an engineer to become the
president or general manager. In this case, the engineer manager cannot function
effectively without adequate management skills.

WHAT IS ENGINEERING MANAGEMENT?

Engineering management refers to the activity combining "technical knowledge
with the ability to organize and coordinate worker power, materials, machinery, and
money."
When the engineer is assigned to supervise the work of even a few people, he is
already engaged in the first phase of engineering management. His main responsibility
is to lead his group into producing a certain output consistent with the required
specifications.
The top position an engineer manager may hope to occupy is the general
managership or presidency of any firm, large or small. 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. In this case, it is but proper that the
management functions taught in pure management courses be well understood by the
engineer manager.
 Figure 1.2 A Typical Advertisement for a Pure Engineering Job (without
management responsibilities)

GE
THE NAME THE WORLD TRUSTS HAS PLACED ITS TRUST IN US

FUJI-HAYA ELECTRIC
An affiliate of Fuji Electric Co., Ltd., of Japan
For immediate hiring

LICENSED ELECTRICAL ENGINEERS

Technical Services Group
(Canlubang-based)

Design Engineers (2)

The successful candidate will handle project design and coordination for switchgears
manufacturing and substation installation.
Application Engineers (2)
The successful candidates will prepare lay-out drawings of switchgears
distribution/lighting panel boards, etc., and bill of components. He/she will tranmet with
customers regarding revisions and approvals.
Qualifications for Engineering Positions:
• With at least one year work experience; overseas experience will be an
advantage
• With adequate understanding of and actual operating skills in CAD and windows
software
• With effective English communication skills and interpersonal skills to efficiently
handle transactions in various levels
• Preferably with a driver's license

Applicants are requested to apply in person with their comprehensive resumes, 1

x 1 photo, and college transcripts at the 2nd Flr. Matrino Bldg., 2178 Pasong
 Tamo St, Makati City For inquiries, please call Odette Panganiban at 892-88-86.
Interviews will be held from 8:00 AM 12:00 NN, Monday to Saturday, Deadline
for application In Saturday, 02 March 1996.

Figure 1.5 Typical Advertisements for Engineer Managers as Top Executives

WE ARE A FAST GROWING GROUP OF COMPANIES IN NEED OF A QUALIFIED

AND HIGHLY MOTIVATED

• GENERAL MANAGER
• Male, 36-46 years old
• Preferably a graduate of Industrial or Mechanical Engineering
• Highly skilled in the field of general management
• Sales oriented
• Fluent in spoken and written English
The qualified applicant will receive an attractive compensation package and
benefits.
Interested applicants may send their resume with a latest photo to the
PERSONNEL DEPARTMENT, BOX 193-MAIN 96 C/O MANILA BULLETIN

GENERAL MANAGER
A very progressive chemical manufacturing company seeks a mature and highly
qualified candidate to assume the above post.
Directly reporting to the Vice President, the ideal candidate must be:
• Male, 35-45 years old
• Graduate of Chemical Engineering in a prestigious college or university
• Aggressive and result oriented
• With leadership and management skills
• Excellent communication skills
We offer a competitive salary and excellent benefits. Interested applicants are
requested to send their resume with a recent photo to
THE HRD DEPARTMENT
BOX 192-MAIN 96
c/o MANILA BULLETIN
Figure 1.6 An Advertisement for an Engineering Manager

FOR IMMEDIATE HIRING

ENGINEERING MANAGER

This person will be responsible for the effective management of the engineering and
maintenance department.
We are looking for a licensed Mechanical Engineer, preferably with an MBA or graduate
school degree.
He must carry with him at least five years experience in the operation, trouble shooting
and preventive maintenance system of all mechanical, refrigeration and air-conditioning
equipment preferably gained from a food business industry or in a manufacturing firm
in a managerial capacity.

We offer a very competitive compensation package and a car plan to the qualified
candidate.

Interested parties, may send their comprehensive resume, application letter and
a passport sized ID to:

BOX NO. 153 CUBAO '96

c/o MANILA BULLETIN

Figure 1.3 A Typical Advertisement for an Engineer Manager as a Lower Level

Executive (Supervisor)

ONE OF THE COUNTRY'S LEADING STRUCTURE SPECIALISTS NEEDS THE

FOLLOWING FOR ITS EXPANSION

FABRICATION SUPERVISOR (1)

• Male, BSCE/BSME graduate, not more than 35 years old
• At least 5 years experience in steel fabrication
• Willing to work on shifting schedule

STRUCTURAL DETAILERS (6)

• M/F, B.S. in Engineering, below 35 years old
• Knowledge in steel connections standard and steel fabrication (shop drawings).

PROJECT ENGINEERS
 • Male, licensed Civil Engineer, with at least 5 years experience on steel erection
and willing to be assigned outside Metro Manila

WELDING FOREMAN
• Male, at least high school graduate and with at least 5 years experience as
Welding Foreman
Apply at:
STEEL CENTRE PHILS., INC.
Amang Rodriguez Ave., Bo. Manggahan, Pasig City

Or send comprehensive resume to:

P.O. BOX 3702, MANILA

Figure 1.4 A Typical Advertisement for an Engineer Manager as a Middle

Level Executive

A PROGRESSIVE INDUSTRIAL COMPANY IS LOOK. ING FOR TALENTED AND

DYNAMIC INDIVIDUALS WHO ARE WILLING TO FILL UP THE FOLLOWING
POSITIONS:

PRODUCTION MANAGER

• Male, 35-45 years of age

• Mechanical Engineering/Industrial Engineering graduate or any related course
• With 4 to 6 years working experience in handling production preferably in a steel
industry.
• Extensive experience in maintenance program
• Cost-cutting oriented person.

Interested parties, please apply in person with bio-data and resume, 2 x 2 picture and
other credentials at:
8/F GEDISCO TOWER
534 Asuncion St., Binondo, Manila Tel. 241-92-51
MANAGEMENT DEFINED
Since the engineer manager is presumed to be technically competent in his
specialization, one may now proceed to describe more thoroughly the remaining portion
of his job, which is management.
Management may be defined as the "creative problem solving-process of
planning, organizing, leading, and controlling an organization's resources to achieve its
mission and objectives."

THE PROCESS OF MANAGEMENT

Management is a process consisting of planning, organizing, directing (or
leading), and controlling.
Explained in a simple manner, management must seek to find out the objectives
of the organization, think of ways on how to achieve them, decide on the ways to be
adapted and the material resources to be used, deter mine the human requirements of
the total job, assign specific tasks to specific persons, motivate them, and provide
means to make sure that the activities are in the right direction.
The specific activities in the management process are discussed more thoroughly
in the succeeding chapters.

REQUIREMENTS FOR THE ENGINEER MANAGER'S JOB

Depending on the type of products or services 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 of great help to the engineer manager in the

performance of the various management functions.

HOW ONE MAY BECOME A SUCCESSFUL ENGINEER MANAGER

Successful engineer managers do not happen as a matter of chance, although
luck is a contributory factor. It is very important for the engineer manager to know the
various factors leading to successful management.
Kreitner indicates at least three general preconditions for achieving lasting
success as a manager. They are as follows:
1. ability
2. motivation to manage, and
3. opportunity.
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."

To illustrate:
If a civil engineer was asked by his superiors to finish a 100-kilometer road
cementing project within eight months, he is 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 in relation to the actual output (the 100
kilometer road). If the same output is made with less inputs, the more efficient the civil
engineer becomes.

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 con
tribute to the realization of the organization's objectives.
A management researcher, 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. Favorable attitude toward those in positions of authority, such as superiors.
2. Desire to engage in games or sports competition with peers.
3. Desire to engage in occupational or work-related competition with peers.
4 Desire to assert oneself and take charge.
5 Desire to exercise power and authority over others
6. Desire to behave in a distinctive way, which includes standing out from the
crowd.
7. Sense responsibility carrying out the routine duties associated with managerial
work.

High scores the foregoing dimensions are associated high motivation manage.

Opportunity
Successful managers become possible only those having the ability and
motivation are given the opportunity manage. The opportunity for successful
management has two requirements:

1. Obtaining suitable managerial job, and

2. Finding supportive climate once the job.
 Newspaper advertisements abound with needs for engineer managers. It is little
difficult determine the firms requiring their services provide supportive climate for
effective and efficient management. A supportive climate characterized by the
recognition managerial talent through financial and nonfinancial rewards,

SUMMARY

Engineers are known for their great contributions to development of world's

civilization. There are many areas where their presence necessary like research, design
and development, testing, manufacturing, construction, sales, consulting, government,
teaching, and management.
Engineers may found contributing their share the various levels of organization.
Engineering activities need to be managed and engineers are sometimes placed
positions where they have learn management skills.
Management concerned with planning, organizing, leading, and controlling an
organization's resources to achieve its mission and objectives.
There are certain qualifications required of the engineer manager.
One may become a successful engineer manager if the preconditions of ability,
motivation to manage, and opportunity to manage are met.
2 DECISION-MAKING

• Decision Making as a Management Responsibility

• What is Decision Making?
• The Decision Making Process
• Approaches in Solving Problems
• Quantitative Models for Decision Making

Chapter 2

DECISION-MAKING
Managers of all kinds and types, including the engineer manager, are primarily
tasked to provide leadership in the quest for the attainment of the organization's
objectives. If he is to become effective, he must learn the intricacies of decision-
making. Many times, he will be confronted by situations where he will have to choose
from among various options. Whatever his choice, it will have effects, immediate or
otherwise, in the operations of this organization.
The engineer manager's decision-making skills will be very crucial his success a
professional. A major blunder in decision-making may be sufficient to cause the
destruction of any organization. Good decisions, on the other hand, will provide the
right environment for continuous growth and success of any organized effort.

DECISION-MAKING AS A MANAGEMENT

RESPONSIBILITY
Decisions must be made at various levels in the workplace. They are also made
at the various stages in the management process. If certain resources must be used,
someone must make a decision authorizing certain persons to appropriate such
resources.
Decision-making is a responsibility of the engineer manager. It is understandable
for managers to make wrong decisions at times. The wise manager will correct them as
soon as they are identified. The bigger issue is the manager who cannot or do not want
to make decisions Delaney concludes that this type of managers are dangerous and
"should be removed from their position as soon as possible."
Management must strive to choose a decision option as correctly as possible.
Since they have that power, they are responsible for whatever outcome their decisions
bring. The higher the management level is, the bigger and the more complicated
decision-making becomes.

An example may be provided as follows:

 The production manager of a certain company has received a written request
from a section head regarding the purchase of an airconditioning unit. Almost
simultaneously, another request from another section was forwarded to him requiring
the purchase of a forklift. The production manage was informed by his superior that he
can only buy one of the two requested items due to budgetary constraints.
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 had made
the wrong choice.

WHAT IS DECISION-MAKING?
Decision-making may be defined as "the process of identifying and choosing
alternative courses of action in a manner appropriate to the demands of the situation."
The definition indicates that the engineer manager must adapt a certain
procedure designed to determine the best option available to solve certain problems.
Decisions are made at various management levels (ie, top, middle, and lower
levels) and at various management functions (ie, planning, organizing, directing, and
controlling). Decision-making, according to Nickels and others, "is the heart of all the
management functions."

THE DECISION-MAKING PROCESS

Rational decision-making, according to David H. Holt, is a process involving the
following steps;
1. diagnose problem
2. analyze 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 a Problem? A problem exists when there is a difference between an
actual situation and a desired situation. For instance, the management of a construction
company entered into a contract with another party for the construction of a 25-storey
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-storey building. In this case, the actual situation is
different from the desired situation. The company, there fare, has a problem and that
is, the construction of the 25-storey building

Analyze the Environment

The environment where the organization is situated plays a very significant role
in the success or failure of such an organization. It is, therefore, very important that an
analysis of the environment be undertaken.
The objective of environmental analysis is the identification of constraints, which
may be spelled out as either internal or external limitations. Example of inter nal
limitations are as follows:
1. Limited funds available for the purchase of equipment.
2. Limited training on the part of employees.
3. Ill-designed facilities.

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 decisions are to be made, the internal and external limitations must be
considered. It may be costly, later on, to alter a decision because of a constraint that
has not been previously identified.

An illustration of failure to analyze the environment is as follows:

The president of a new chemical manufacturing company made a decision to

locate his factory in a place adjacent to a thickly populated area. Construction of the
building was made with precision and was finished in a short period. When the
clearance for the commencement of operation was sought from local authorities, this
could not be given. It turned out that the residents opposed the operation of the firm
and made sure that no clearance is given.
The president decided to relocate the factory but not after much time and money
has been lost. This is a clear example of the cost associated with management
disregarding the environment when decisions are made. In this case, the president did
not consider what the residents could do.
Components of the Environment. The environment consists of two major concerns:
1. internal and
2. external.

The internal environment refers to organizational activities within a firm that

surrounds decision-making. Shown in Figure 2.1 are the important aspects of the
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 2.2 shows the
forces comprising the external environment of the firm.

Develop Viable Alternatives

Oftentimes, problems may be solved by any of the solutions offered. The best
among the alternative solutions must be considered by management. This is made
possible by using a procedure with the following steps:
1. Prepare a list of alternative solutions.
2. Determine the viability of each solutions.
3. Revise the list by striking out those which are not viable.

To illustrate:

An engineering firm has a problem of increasing its output by 30%. This is the
result of a new agreement between the firm and one of its clients.

Figure 2.1 The Engineering Firm and the Internal

Environment in Decision-Making

THE ENGINEERING FIRM

INTERNAL ENVIRONMENT
Organizational Aspects
like org structure, policies, procedures, rules, ability of management, etc.
Marketing Aspects
like product strategy, promotion strategy, etc.
Personnel Aspects
like recruitment practices, incentive systems, etc.
Production Aspects
like plant facility layout, Inventory control, etc.
Financial Aspects
like liquidity, profitability.
Figure 2.2 The Engineering Firm and Its External

Environment
Government
Engineers
Labor Unions
Clients
Suppliers
Competitors
Banks
Public

The list of solutions prepared by the engineering manager shows the following
alternative courses of action:
1. improve the capacity of the firm by hiring more workers and building additional
facilities;
2. secure the services of subcontractors;
3. buy the needed additional output from another firm;
4. stop serving some of the company's customers; and
5. delay servicing some clients.

The list was revised and only the first three were deemed to be viable. The last two
were deleted because of adverse effects in the long-run profitability of the firm.

Evaluate Alternatives
After determining the viability of the alternatives and a revised list has been
made, an evaluation of the remaining alternatives is necessary. This is important
because the next step involves making a choice. Proper evaluation makes choosing the
right solution less difficult.
How the alternatives will be evaluated will depend on the nature of the problem,
the objectives of the firm, and the nature of alternatives presented. Souder sug gests
that "each alternative must be analyzed and evaluated in terms of its value, cost, and
risk characteristics."
The value of the alternatives refers to benefits that can be expected. An example
may be described as follows: a net profit of P10 million per year if the alternative is
chosen.
 The cost of the alternative refers to out-of-pocket costs (like P100 million for
construction of facilities), opportunity costs (like the opportunity to earn interest of P2
million per year if money is invested elsewhere), and follow-on costs (like P3 million per
year for maintenance of facilities constructed).
The risk characteristics refer to the likelihood of achieving the goals of the
alternatives. If the probability of a net profit of P10 million is only 10 percent, then the
decision-maker may opt to consider an alternative with a P5 million profit but with an
80 percent probability of success.

Another example of an evaluation of alternatives is shown below:

An engineer manager is faced with a problem of choosing between three
applicants to fill up a lone vacancy for a junior engineer. He will have to set up certain
criteria for evaluating the applicants. If the evaluation is not done by a professional
human resources officer, then the engineer manager will be forced to use a
predetermined criteria.
A typical evaluation of job applicants will appear as follows:

EVALUATION SHEET

Title of Vacant Position: JUNIOR ENGINEER

Date of Evaluation: December 28, 1996

Applicant Education Training Experience Age Total Points

1 Jose Sibayan, Jr. 40 35 4 10 89
2. Menandro Rillon 40 36 5 9 90
3 Dante dela Cruz 40 38 6 7 91

Evaluator:
Edgardo J. Viloria
Manager
Engineering Division III

Make a Choice
After the alternatives have been evaluated, the decision-maker must now be
ready to make a choice. This is the point where he' must be convinced that all the
previous steps were correctly undertaken.
Choice-making refers to the process of selecting among alternatives representing
potential solutions to a problem." At this point, Webber advises that "... particular effort
should be made to identify all significant consequences of each choice.”
To make the selection process easier, the alternatives can be ranked from best
to worst on the basis of some factors like benefit, cost, or risk.
Implement Decision
After a decision has been made, implementation follows. This is necessary, or
decision-making will be an exercise in futility.
Implementation refers to carrying out the decision so that the objectives sought
will be achieved. To make implementation effective, a plan must be devised.
At this stage, the resources must be made available so that the decision may be
properly implemented. Those who will be involved in implementation, accord ing to
Aldag and Stearns, must understand and accept the solution."

Evaluate and Adapt Decision Results

In implementing the decision, the results expected may or may not happen. It is,
therefore, important for the manager to use control and feedback mechanisms to
ensure results and to provide information for future decisions.
Feedback refers to the process which requires checking at each stage of the
process to assure that the alternatives generated, the criteria used in evaluation, and
the solution selected for implementation are in keep ing with the goals and objectives
originally specified.
Control refers to actions made to ensure that activities performed match the
desired activities or goals, that have been set.
In this last stage of the decision-making process, the engineer manager will find
out whether or not the desired result is achieved. If the desired result is achieved, one
may assume that the decision made was good. If it was not achieved, Ferrell and Hirt
suggest that further analysis is necessary. Figure 2.3 presents an elaboration of this last
step.

APPROACHES IN SOLVING PROBLEMS

In decision-making, the engineer manager is faced with problems which may
either be simple or complex. To provide him with some guide, he must be familiar with
the following approaches:
1. qualitative evaluation, and
2. quantitative evaluation.

Qualitative Evaluation. This term refers to evaluation of alternatives using

intuition and subjective judgment. Stevenson states that managers tend to use the
qualitative approach when
 Figure 2.3 Feedback as a Control Mechanism in the Decision-Making-Process

Step 1 Diagnose
problem

Analyze
Step 2 environment

Articulate
Step 3 problem or
opportunity

Develop viable
Step 4
alternatives

Evaluate
Step 5 alternatives

Step 6 Make a choice

Implement
Step 7 decision

Evaluate Results not Determine

Step 8 results achieved steps where
error was
made

Results Adapt decision

achieved results
1. The problem is fairly simple.
2. The problem is familiar.
3. The costs involved are not great.
4. Immediate decisions are needed.

An example of an evaluation using the qualitative approach is as follows:

A factory operates on three shifts with following schedule:
First shift - 6:00 A.M. to 2:00 PM.
Second shift - 2:00 PM. to 10:00 PM.
Third shift - 10:00 PM. to 6:00 A.M.
Each shift consists of 200 workers manning 200 machines. On September 16,
1996, the operations went smoothly until the factory manager, an industrial engineer,
was notified at 1:00 PM. that five of the workers assigned to the second shift could not
report for work because of injuries sustained in a traffic accident while they were on
their way to the factory.
Because of time constraints, the manager made an instant decision on who
among the first shift workers would work overtime to man the five machines.
Quantitative Evaluation. This term refers to the evaluation of alternatives using
any technique in a group classified as rational and analytical.

QUANTITATIVE MODELS FOR DECISION MAKING

The types of quantitative techniques which may be useful in decision-making are
as follows
1. inventory models
2. queuing theory
3. network models
4. forecasting
5. regression analysis
6. simulation
7. linear programming
8. sampling theory
9. statistical decision theory

Inventory Models
Inventory models consist of several types a I designed to help the engineer
manager make decisions regarding inventory. They are as follows:
1. Economic order quantity model - this one is used to calculate the number of
items that should be ordered at one time to minimize the total yearly cost of placing
orders and carrying the items in inventory.
2. Production order quantity model - this is an economic order quantity technique
applied to production orders.
3. Back order inventory model - this is an inventory model used for planned
shortages.
4. Quantity discount model - an inventory model used to minimize the total cost
when quantity discounts are offered by suppliers.

Queuing Theory
The queuing theory is one that describes how to determine the number of
service units that will minimize both customer waiting time and cost of service.
The queuing theory is applicable to companies where waiting lines are a common
situation. Examples are cars waiting for service at a car service center, ships and barges
waiting at the harbor for loading and unloading by dock workers, programs to be run in
a computer system that processes jobs, etc.
Network Models
These are models where large complex tasks are broken into smaller segments
that can be managed independently.
The two most prominent network models are:
1. The Program Evaluation Review Technique (PERT) - a technique which
enables engineer managers to schedule, monitor, and control large and complex
projects by employing three time estimates for each activity.
 2. The Critical Path Method (CPM) - this is a network technique using only
one time factor per activity that enables engineer managers to schedule, monitor, and
control large and complex projects.
Forecasting
There are instances when engineer managers make decisions that will have
implications in the future. A manufacturing firm, for example, must put up a capacity
which is sufficient to produce the demand requirements of customers within the next 12
months. As such, man power and facilities must be procured before the start of
operations. To make decisions on capacity more effective, the engineer manager must
be provided with data on demand requirements for the next 12 months. This type of
information may be derived through forecasting.
Forecasting may be defined as "the collection of past and current information to
make predictions about the future."
Regression Analysis
The regression model is a forecasting method that examines the association
between two or more variables. It uses data from previous periods to predict future
events.
Regression analysis may be simple or multiple depending on the number of
independent variables present. When one independent variable is involved, it is called
simple regression; when two or more independent variables are involved, it is called
multiple regression.
Simulation
Simulation is a model constructed to represent reality, on which conclusions
about real-life problems can be used. It is a highly sophisticated tool by means of which
the decision maker develops a mathematical model of the system under consideration.
Simulation does not guarantee an optimum solution, but it can evaluate the
alternatives fed into the process by the decision-maker.
Linear Programming
Linear programming is a quantitative technique that is used to produce an
optimum solution within the bounds imposed by constraints upon the decision. Linear
programming is very useful as a decision-making tool when supply and demand
limitations at plants, warehouse, or market areas are constraints upon the system.
Sampling Theory
Sampling theory is a quantitative technique where samples of populations are
statistically determined to be used for a number of processes, such as quality control
and marketing research.
When data gathering is expensive, sampling provides an alternative. Sampling, in
effect, saves time and money.
Statistical Decision-Theory
Decision theory refers to the "rational way to conceptualize, analyze, and solve
problems in situations involving limited, or partial information about the decision
environment.
A more elaborate explanation of decision theory is the decision making process
presented at the beginning of this chapter. What has not been included in the
discussion on the evaluation of alternatives, but is very important, is subjecting the
alternatives to Bayesian analysis.
The purpose of Bayesian analysis is to revise and update the initial assessments
of the event probabilities generated by the alternative solutions. This is achieved by the
use of additional information.
When the decision-maker is able to assign probabilities to the various events, the
use of probabilistic decision rule, called the Bayes criterion, becomes possible. The
Bayes criterion selects the decision alternative having the maximum expected payoff, or
the minimum expected loss if he is working with a loss table.
 The Engineering Management Function is closely linked to the project
management function, since engineering work can be divided into a series of "projects"
or "assignments" to which project management procedures and techniques are applied
in greater or lesser extent.
It also requires special coordination not only between professional specialties
(disciplines) but also between executing staff and support staff. Being the deliverables
or products of the work (documents and plans) written material, they constitute the
description of the results of calculations, assumed premises, theories used, standards
and codes respected and conclusions that summarize the best options found for the
design of facilities.

CHARACTERISTICS
The engineering work function can be handled as within the typical managerial
work cycle:
• Planning
• Organization
• Direction (Execution)
• Control
Henry Mintzberg proposed an alternative approach to defining what management is
about. Instead of describing in theory what managers should do, he studied what
managers actually spend their time doing. This led him to describe management in
terms of the different roles that managers undertake.

The Roles of Managers

'Mintzberg shows a substantial difference between what managers do and what
they are said to do. On the basis of work activity studies, he demonstrates that a
manager's job is characterized by pace, interruptions, brevity, variety, and
fragmentation of activities, and a preference for verbal contacts. Managers spend a
considerable amount of time in scheduled meetings and in networks of contacts outside
meetings.
The fragmentary nature of what managers do leads to the suggestion that they
have to perform a wide variety of roles. Mintzberg suggests that there are ten
managerial roles which can be grouped into three areas: interpersonal, informational
and decisional.
The Roles of Management
Mintzberg published his Ten Management Roles in his book, "Mintzberg on
Management: Inside our Strange World of Organizations," in 1990.
The ten roles are:
1. Figurehead.
2. Leader.
3. Liaison.
4. Monitor.
5. Disseminator.
6. Spokesperson.
7. Entrepreneur.
8. Disturbance Handler.
9. Resource Allocator.
10. Negotiator.
The 10 roles are then divided up into three categories, as follows:

Category Roles
Interpersonal Figurehead
Leader
Liaison
Informational Monitor
Disseminator
Spokesperson
Decisional Entrepreneur
Disturbance Handler
Resource Allocator
Negotiator

INTERPERSONAL ROLES
Interpersonal roles cover the relationships that a manager has to have with
others. Moreover, these are ones that involve people (subordinates and persons outside
the organization) and other duties that are ceremonial and symbolic in nature. A
manager's interpersonal roles include acting as a leader, a manager, and as a team
player.
To perform her/his role as a leader s/he requires communication skills, emotional
intelligence, listening skills, team-working, influencing, persuasion and negotiation skills,
mediation and conflict resolution skills, decision-making, and problem-solving skills.
 Moreover, her/his role as a manager is to assure everyone understands one's
roles, one's responsibilities, one's tasks, and one's objectives. For this s/he requires
planning, organizing, and controlling skills.
In addition, as a team player is to develop a team ethos, form team goals, act as
a support frame, to know team members' strengths, weaknesses, and skills. For this
s/he requires excellent listening and questioning skills, fine meeting skills, creative
problem-solving skills, and effective decision making skills.
The three roles within this category are:
• figurehead
• leader
• liaison
Figurehead - As a manager, you have social, ceremonial and legal responsibilities.
You're expected to be a source of inspiration. People look up to you as a person with
authority, and as a figurehead.
Leader - This is where you provide leadership for your team, your department or
perhaps your entire organization; and it's where you manage / the performance and
responsibilities of everyone in the group. In addition, As leader managers have to bring
together the needs of an organization and those of the individuals under their
command.
Liaison - Managers must communicate with internal and external contacts. You need
to be able to network effectively on behalf of your organization. Moreover, it deals with
the horizontal relationships which work-activity studies have shown to be important for
a manager. A manager has to maintain a network of relationships outside the
organization.

INFORMATION ROLES
These involves collecting, receiving, and sharing information are all part of the
informational role, in short, these are roles in which you collect and then disseminate
data. With the advancement of technology, these jobs have begun to shift considerably.
These roles mostly involve the transfer of information, and a specific role in which a
manager must generate and share knowledge to successfully achieve organizational
goals. A manager in these roles serves as a monitor, disseminator, and spokesperson in
this capacity.
The managerial roles in this category involve processing information.
Monitor: The managers are constantly monitoring and scanning their environment,
both internal and external, collecting and studying information regarding their
organization and the outside environment affecting their organization. This can be done
by reading reports and periodicals, by asking their liaison contacts and through gossip,
hearsay and speculation.
Furthermore, evaluate the extent to which diverse employees are being treated fairly.
Seeks and receives a wide variety of special information to develop a thorough
understanding of the organization and the environment. In this role, the executive
serves as the nerve center of internal and external information about the organization.
Ex: Handling all mail and contacts categorized as concerned primarily with receiving
information.

Disseminator of Information: The managers must transmit their information

regarding changes in policies or other matters to their subordinates, their peers and to
other members of the organization. This can be done through memorandums, phone
calls, individual meetings and group meetings.
This is where you share possibly beneficial information with your co-workers and team.
You'll be in charge of communicating information about your business and its aims to
people outside of it in this capacity. Inform employees about diversity policies and
initiatives and the intolerance of discrimination. Transmits information received from
outsiders or subordinates to other members of the organization. Some information is
factual, some involves interpretation and integration of diverse value positions of
organizational influencers.
Ex: Forwarding mail into organization for information purposes, verbal contacts
involving information flow to subordinates such as review sessions.

Spokesperson: A manager has to be a spokesman for his unit and he represents his
unit in either sending relevant information to people outside his unit or making some
demands on behalf of his unit. This may be in the form of the president of the company
making a speech to a lobby on behalf of an organizational cause or an engineer
suggesting a product modification to a supplier.
Moreover, Support diversity initiatives in the wider community and speak to diverse
groups to interest them in career opportunities. Communicates information to outsiders
on the organization's plans, policies, actions, results, etc.
Ex: Board meeting; handling contacts involving transmission of information to outsiders.
DECISIONAL ROLES
Making decisions is the most crucial part of any managerial activity. In this role
category, there are four roles which are based on different types of decisions; namely,
entrepreneur, disturbance handler, resource allocator and negotiator.
The managerial roles in this category involve using information.
Entrepreneur - As a manager, you create and control change within the organization.
This means solving problems, generating new ideas, and implementing them.
As entrepreneurs, managers make decisions about changing what is happening in an
organization. They may have to initiate change and take an active part in deciding
exactly what is done - they are proactive.
Disturbance Handler - When an organization or team hits an unexpected roadblock,
it's the manager who must take charge. You also need to help mediate disputes within
it. As disturbance handlers, which requires them to make decisions arising from events
that are beyond their control and which are unpredictable. The ability to react to events
as well as to plan activities is an important aspect of management.
Resource Allocator - You'll also need to determine where organizational resources
are best applied. This involves allocating funding, as well as assigning staff and other
organizational resources. Moreover, the resource allocation role of a manager is central
to much organizational analysis. A manager has to make decisions about the allocation
of money, equipment, people, time and other resources. In so doing a manager is
actually scheduling time, programming work and authorizing actions.
Negotiator - You may be needed to take part in, and direct, important negotiations
within your team, department, or organization. The negotiation role is important as a
manager has to negotiate with others and in the process be able to make decisions
about the commitment of organizational resources.

*Mintzberg found that managers don't perform equally - or with equal frequency - all
the roles he described. There may be a dominant role that will vary from job to job, and
from time to time.
It is important to note that many non-managers in organizations seem to have these
sorts of interpersonal, informational and decisional roles.
For example, a hotel receptionist is fulfilling an interpersonal role when she meets the
hotel guests' needs by communicating with the room attendants and restaurant staff. A
car park attendant who monitors how full the car park is and, when necessary, displays
the sign 'car park full' is disseminating information. When the same attendant sends the
larger cars to the areas of the car park where there is more space, he is acting as a
resource allocator. But in each case routine situations are being handled in routine
ways. In contrast, the situations managers deal with differ in the degree of routine, the
size and scope and complexity of the activities in which they are involved, and the
responsibilities associated with these activities.
3 PLANNING TECHNICAL ACTIVITIES
• The Nature of Planning
• Planning Defined
• Planning at Various Management Levels
• The Planning Process
• Types of Plans
• Making Planning Effective

PLANINING TECHNICAL ACTIVITIES

If managing an organization is to be pursued vigorously, planning will constitute
the most important activity. Managers who plan are afforded with the opportunity to
carefully analyze situations which directly contribute to effective decision-making.
The engineer manager, regardless of his management level, will have to devote
some of his time to planning. The higher the management level the engineer manager
is in, the more sophisticated his planning activity becomes. Why and how this is so shall
be discussed in this chapter.

THE NATURE OF PLANNING

There are many instances when managers are overwhelmed by various activities
which at times be cloud his judgment. This must be expected since anybody who is
confronted by several situations happening simultaneously will lose sight of the more
important concerns. To minimize mistakes in decision-making, planning is undertaken.
A plan, which is the output of planning, provides a methodical way of achieving
desired results. In the implementation of activities, the plan serves as a useful guide.
Without the plan, some minor tasks may be afforded major attention which may, later
on, hinder the accomplishment of objectives.

An example of the difficulty of not having a plan is illustrated below.

The management of an engineering firm was able to identify the need to hire additional
three employees. The manager proceeded to invite applicants, screen them, and finally
hired three of them. When the hiring expense report was analyzed, it involved more
than double the amount spent by other firms in hiring the same number of people.
When an inquiry was made, it was found out that the manager committed some errors
of judgment. For instance, he used an expensive advertising layout in a newspaper
when a simple message will do. Also, it was found out that the absence of a hiring plan
contributed to the high cost of hiring.
PLANNING DEFINED
Various experts define planning in various ways, all of which are designed to suit
specific purposes.
Planning, according to Nickels and others, refers to "the management function
that involves anticipating future trends and determining the best strategies and tactics
to achieve organizational objectives." This definition is useful because it relates the
future to what could be decided now.
Aldag and Stearns, on the other hand, define plan ning as "the selection and
sequential ordering of tasks required to achieve an organizational goal. This definition
centers on the activity required to accomplish the goals.
The definition of Cole and Hamilton provides a better guide on how to effectively
perform this vital activity. Planning, according to them is "deciding what will be done,
who will do it, where, when and how it will be done, and the standards to which it will
be done."
For our purpose, it will suffice to define planning as selecting the best course of
action so that the desired result may be achieved. It must be stressed that the desired
result takes first priority and the course of action chosen is the means to realize the
goal.
PLANNING AT VARIOUS MANAGEMENT LEVELS
Since engineer managers could be occupying positions in any of the various
management levels, it will be useful for them to know some aspects of planning
undertaken at the different management levels.
Planning activities undertaken at various levels are as follows:
1. Top management level- strategic planning
2. Middle management level-intermediate planning
3. Lower management level operational planning.

Strategic Planning
 The term strategic planning refers to the process of determining the major goals
of the organization and the policies and strategies for obtaining and using resources to
achieve those goals. The top management of any firm is involved in this type of
planning.
In strategic planning, the whole company is considered, specifically its objectives
and current resources.
The output of strategic planning is the strategic plan which spells out "the
decision about long-range goals and the course of action to achieve these goals."
Intermediate Planning
Intermediate planning refers to "the process of determining the contributions
that subunits can make with allocated resources." This type of planning is undertaken
by middle management.
Under intermediate planning, the goals of a subunit are determined and a plan is
prepared to provide a guide to the realization of the goals. The intermediate plan is
designed to support the strategic plan.
Figure 3.1 Types of Planning

MANAGEMENT LEVEL PLANNING HORIZON

Top Management Strategic planning (one to ten years)
• Chief Executive Officer, President, Vice Presidents, General Manager, Division
Heads

Middle Management Intermediate planning (six months to two years)

• Functional Managers, Product Line Managers, Department Heads

Lower Management Operational planning (one week to one year)

• Unit Managers First Line Supervisors
Figure 3.2 The Organization and Types of Planning Undertaken

President/General
PRESIDENT/GENE
RALManager
MANAGER
responsible for
STRATEGIC PLANNING

MARKETING PRODUCTION FINANCE PERSONNEL

MANAGER MANAGER MANAGER MANAGER

responsible for responsible for responsible for responsible for

INTERMEDIATE INTERMEDIATE INTERMEDIATE INTERMEDIATE
PLANNING PLANNING PLANNING PLANNING

INDUSTRIAL FACTORY QUALITY

ENGINEERING MANAGER CONTROL
MANAGER MANAGER

responsible for responsible for responsible by

OPERATIONAL OPERATIONAL OPERATIONAL
PLANNING PLANNING PLANNING
Operational Planning
The term operational planning refers to "the pro cess of determining how specific
tasks can best be accomplished on time with available resources. This type of planning
is a responsibility of lower management. It must be performed in support of the
strategic plan and the intermediate plan.

THE PLANNING PROCESS

The process of planning consists of various steps depending on the management
level that performs the planning task. Generally, however, planning involves the
following:
1. setting organizational, divisional, or unit goals
2. developing strategies or tactics to reach those goals
3. determining resources needed and
4. setting standards.

Setting Organizational, Divisional, or Unit Goals

The first task of the engineer manager is to provide a sense of direction to his
firm (if he is the chief executive), to his division (if he heads a division), or to his unit (if
he is a supervisor). The setting of goals provide an answer to the said concern. If
everybody in the firm (or division or unit, as the case may be) is aware of the goals,
there is a big chance that everybody will contribute his share in the realization of such
goals.
Goals may be defined as the "precise statement of results sought, quantified in
time and magnitude, where possible." Examples of goals are provided in Figure 3.3.
Figure 3.3 Examples of Goals, By Organizational Level

ORGANIZATIONAL LEVEL EXAMPLE OF GOAL

COMPANY To attain a return on investment of 25%
Buenavista Construction Corporation

DIVISION To increase the number of projects undertaken by the company

Project Management Division

UNIT To increase the number of project engineers

Personnel Services Unit

Developing Strategies or Tactics to Reach Goals

After determining the goals, the next task is to devise some meas to realize
them. The ways to realize the goals are called strategies and these will be the concern
of top management. The middle and lower management will adapt their own tactics to
implement their plans.
A strategy may be defined as "a course of action aimed at ensuring that the
organization will achieve its objectives."
An example of a strategy is as follows:
The decision of a construction firm's management to diversify its business
by engaging also in the trading of construction materials and supplies.
When the above mentioned strategy is implemented, it may help the
construction firm realize substantial savings in the material and supply
requirements used in their construction activities. The firm will also have greater
control in the timing of deliveries of materials and supplies.
A tactic is a short-term action taken by management to adjust to negative
internal or external influences. They are formulated and implemented in support
of the firm's strategies. The decision about short-term goals and the courses of
action are indicated in the tactical plan.
 An example of a tactic is the hiring of contractual workers to augment the
company's current workforce

Determining Resources Needed

When particular sets of strategies or tactics have been devised, the engineer
manager will, then, determine the human and nonhuman resources required by such
strategies or tactics. Even if the resource requirements are currently available, they
must be specified.
The quality and quantity of resources needed must be correctly determined. Too
much resources in terms of either quality or quantity will be wasteful. Too little will
mean loss of opportunities for maximizing income.
To satisfy strategic requirements, a general statement of needed resources will
suffice. The specific requirements will be determined by the different units of the
company.
To illustrate:
Suppose the management of a construction firm has decided, in addition
to its current undertakings, to engage in the trading of construction materials
and supplies.
A general statement of required resources will be as follows: A new
business unit will be organized to deal with the buying and selling of construction
materials and supplies. The amount of P50 million shall be set aside to finance
the activity. Qualified persons shall be recruited for the purpose.

Setting Standards
The standards for measuring performance may be set at the planning stage.
When actual performance does not match with the planned performance, corrections
may be made or reinforcements given."
A standard may be defined as "a quantitative or qualitative measuring device
designed to help monitor the performances of people, capital goods, or processes."
An example of a standard in the minimum number of units that must be
produced by a worker per day in a given work situation.
TYPES OF PLANS
Plans are of different types. They may be classified in terms of functional areas,
time horizon, and frequency of use."
Functional Area Plans
Plans may be prepared according to the needs of the different functional areas.
Among the types of functional area plans are the following:
1 Marketing plan - this is the written document or blueprint for implementing and
controlling an organization's marketing activities related to a particular marketing
strategy.
2 Production plan- this is a written document that states the quantity of output a
company must produce in broad terms and by product family.
3 Financial plan - it is a document that summarizes the current financial situation of
the firm, analyzes financial needs, and recommends a direction for financial activities.
4 Human resource management plan - it is a document that indicates the human
resource needs of a company detailed in terms of quantity and quality and based on the
requirements of the company's strategic plan.

Plans With Time Horizon

Plans with time horizon consist of the following:
1 Short-range plans - these are plans intended to cover a period of less than one
year. First-line supervisors are mostly concerned with these plans.
2. Long-range plans - these are plans covering a time span of more than one year.
These are mostly undertaken by middle and top management.

Plans According to Frequency of Use

According to frequency of use, plans may be classi fied as:
1. standing plans and
2 single-use plans.

Standing Plans. These are plans that are used again and again, and they focus on
managerial situations that recur repeatedly.
 Standing plans may be further classified as follows
1 Policies - they are broad guidelines to aid managers at every level in making
decisions about recurring situations or function"
2. Procedures they are plans that describe the exact series of actions to be taken
in a given situation"
3. Rules - they are statements that either require or forbid a certain action.

Single-Use Plans. These plans are specifically developed to implement courses of

action that are relatively unique and are unlikely to be repeated.
Single-use plans may be further classified as follows:
1 budgets
2 programs, and
3 projects
A budget, according to Weston and Brigham, is "a plan which sets forth the
projected expenditure for a certain activity and explains where the required funds will
come from."
A program is a single-use plan designed to coordinate a large set of activities."
A project is a single-use plan that is usually more limited in scope than á
program and is sometimes pre pared to support a program

PARTS OF THE VARIOUS FUNCTIONAL AREA PLANS

The engineer manager may be familiar with engineering plans, knowing the
details from beginning to end. However, the ever present possibility of moving from one
management level to the next and from one functional area to another presses the
engineer manager to be familiar as well with other functional area plans.

The Contents of the Marketing Plan

The structure and content of marketing plans vary depending on the nature of
the organizations adapting them. William Cohen maintains that the following must be
included in the marketing plan:
1. The Executive Summary which presents an 1 overall view of the marketing project
and its potential.
2. Table of Contents
3. Situational Analysis and Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control

The Contents of the Production Plan

The production plan must contain the following:
1 the amount of capacity the company must have
2 how many employees are required
3. how much material must be purchased

The Contents of the Financial Plan

The components of the financial plan are as follows."
1. An analysis of the firm's current financial condition as indicated by an analysis of
the most recent statements
2. A sales forecast
3. The capital budget
4. The cash budget
5. A set of pro forma (or projected) financial statements
6. The external financing plan

Contents of the Human Resources Plan

The human resources plan must contain the following:
1. personnel requirements of the company
2. plans for recruitment and selection
 3. training plan
4. retirement plan

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.

MAKING PLANNING EFFECTIVE

Planning is done so that some desired results may be achieved At times,
however, failure in planning occurs,
Planning may be made successful if the following are observed:
1. recognize the planning barriers
2. use of aids to planning
The planning barriers, according to Plunkett and Attner, are as follows:
1 manager's inability to plan
2. improper planning process
3. lack of commitment to the planning process
4. improper information
5. focusing on the present at the expense of the future
6. too much reliance on the planning department
7. concentrating on only the controllable variables
Among the aids to planning that may be used are:
1. Gather as much information as possible
 2. Develop multiple sources of information
3. Involve others in the planning process

SUMMARY

Technical activities, like other activities, require effective planning, i.e., if objectives and
goals are to be realized.
A plan is a methodological way of achieving results
Planning is undertaken at various management levels.
Various steps are required in the planning process depending on the
management level.
Plans may be classified in terms of functional areas, time horizon, and frequency
of use.
Plans consist of various parts that the engineer manager must be familiar with.
Plans can be made effective by recognizing the planning barriers and making use
of aids to planning.

PRODUCTION PLANNING - the activity by which manufacturing ways and means are
determined.
*manufacturing involves process of changing basic materials by hand or useful and
valuable forms.
PRODUCTION PLANNING OBJECTIVES
1. Bring a prescribe level of profit
2. Capture a desired share of the market demand
3. Operate the plan at the pre-determined level of efficiency
4. Utilize available plant facilities; and
5. Create a specified number of jobs
DIFFERENT DIMENTIONS OF THE PLANNING FUNCTION
1. Planning is a philosophy
2. Planning is integration
3. Planning is a process
4. Planning is a collection of procedures.
mechanics and assistants were recruited. By the end 1993, each unit has a personnel of
5 mechanics and 5 assistants.
Even with current developments, the old method purchasing was improved.
Purchase requests started to pile up. Mechanics and drivers began complaining to the
VP for operations about delays in the delivery of needed parts.
The VP Operations immediately sent note Engineer Inductivo ordering the
problem should be resolved immediately. Engineer was hard pressed and immediate
solution. next day, Engineer Inductivo informed VP for Operations that he requesting
for the approval of his application for retirement as he is already 62 years old
The VP forwarded the request to President with an endorsement justifying the
request. The same day, the request retirement was approved. The next day Engineer
Ancheta received his appointment papers promoting him to Manager
One of the first things Engineer Ancheta did was inspect the room parts. He
found out that room full of uneven supply of parts. Some parts were excessive
quantities, while some important were inadequately stocked. A corner of the room
contains a big volume of obsolete parts.
At the end of day, Engineer Ancheta was informed by the VP the company will
be fielding an additional 50 buses within 30 days This will that by month, about 100
buses will be servicing the various routes assigned to Motorbus Company.
Engineer Ancheta is new mulling over how will make operations of his
department as efficient and effective as possible.
4 ORGANIZING TECHNICAL ACTIVITIES
• Reasons for Organizing
• Organizing Defined
• The Purpose of the Structure
• The Formal Organization
• Informal Groups
• Types of Organizational Structures
• Types of Authority
• The Purpose of Committees

Chapter 4 ORGANIZING TECHNICAL ACTIVITIES

The engineer manager needs to acquire various skills in management, including
those for organizing technical activities. In this highly competitive environ ment, 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 effects 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
The opportunities offered by skillful organizing are too important for the engineer
manager to ignore. This chapter is intended to provide him with some background and
insights in organizing

REASONS FOR ORGANIZING

Organizing is undertaken to facilitate the implementation of plans. In effective
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, responsibility,
and accountability for certain functions and tasks.
ORGANIZING DEFINED
Organizing is a management function which refers to "the structuring of
resources and activities to accomplish objectives in an efficient and effective manner."
The arrangement or relationship of positions within an organization is called the
structure. The result of the organizing process is the structure.

THE PURPOSE OF THE STRUCTURE

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 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
organization
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tanks) 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. 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 adapted, 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 components that will meet the objectives
effectively.
The formal structure is described by management through:
1 organization chart
2. organizational manual and
3. policy manuals
The organization chart is a diagram of the organization's official positions and
formal lines of authority.
The organizational 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.

INFORMAL GROUPS
Formal organizations require the formation of formal groups which will be
assigned to perform specific tasks aimed at achieving organizational objectives. The
formal group is a part of the organization 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 with the expectations of the members of the
informal group.
The informal organization, useful as it in, 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 is, 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 to
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 brings 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 to a project of group manager
The different types of organizations, with their own distinct, advantages and
disadvantages, are briefly presented on the next page.
Functional Organization
Functional organization structures are very effect ive in smaller firms, especially
"single-business firms where key activities revolve around well-defined skills and areas
of specializations."
Functional organizations have certain advantages. They are the following
1 The grouping of employees who perform a common task permit economies of scale
and efficient source 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.
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 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. There is easy pinpointing of responsibility for product problems.
5. There is 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 for 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 is flexibility and adaptability to changing environment.
3. The development of both general and functional management skills are 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.
The matrix organization has some disadvantages, however. They are the
following:
1. There is frustration and confusion from dual chain of command.
2. There is 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 onside of the matrix.

TYPES OF AUTHORITY
The delegation of authority is a requisite for effective organizing. It consists of
three types. They are as follow
1 Line authority -a manager's right to tell subordinator what to do and then see that
they do it.
2. Staff authority - staff specialists right to give advice to a superior

3. Functional authority - a specialist's right to oversee lower level personnel involved

in that specialty, regardless of where the personnel are in the organization.

Line departments perform tasks that reflect the organization's primary goal and
mission. In 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 work group 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 times 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 especially to engineering and manufacturing
firms. When a certain concern, like product development, is under consideration, a
committee is 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 the 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."

SUMMARY
The proper management of engineering activities, whether at the unit,
department, or firm level, requires effective organizing. The organizing function is
undertaken to facilitate the implementation of plans.
Organizing refers to the structuring of resources and activities to accomplish
objectives. The structure serves as a way to reach the organization's goals.
The formal organization is the structure that will carry out the plan. It is
described through the organization chart, the organization manual, and the policy
manual.
Informal groups oftentimes find their way to exist side by side with formal
organizations. These groups may make it easy or make it hard for the organization to
achieve its objectives.
Organizations may be classified into: (1) functional, (2) product or market, or (3)
matrix Authority delegated to the members of the organization may be classified into:
(1) line authority, (2) staff authority, and (3) functional authority.
 Committees are used as a supplement to the existing formal organization
Committees are formed to perform specific tasks. Committees are classified into: (1) ad
hoc, and (2) standing.