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 effects of business success become more pronounced when they come
because 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 tasks to 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 (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. 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 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 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.

Case 4. Bits and Pieces International Corporation: Little Things Mean a Lot

The Bits and Pieces International Corporation (BPIC) is one company that
appears to be succeeding and growth has become a part of its agenda for the next few
years. This is quite unusual for a company whose certificate of incorporation has only
been approved by the Securities and Exchange Commission four years ago.

BPIC is maintaining an office at Makati Avenue in Makati and a plant at Sta.

Rosa, Laguna. The company is producing various injection molded plastic products
classified as consumer and industrial.
 The key officers of the company are as follows:

President and Chairman of the Board: Engineer Rodrigo Reyes

Vice President and General Manager: Engineer Jesus Ualat
Corporate Secretary: Mrs. Mildred Salazar
Treasurer: Ms. Purita Toquilar
Auditor: Ms. Elsa Marzo
Engineering Manager: Engineer Silvino Santiago
Production Manager: Engineer Severo Lagayan

The organization chart of BPIC is shown in Exhibit 1.

The company, classified as a manufacturing corporation, operates on two

activities.

1. production of stocks to be sold to the local market

2. production as a subcontractor

BPIC does not maintain a sales force. The general manager acts as marketing
executive and directly transacts business with customers.

The company's average sales per month are as follows:

Product Average Sales Per Month

Ball Pen Tips P 340,000

Sputum Cups 900,000
Grease Cups 100,000
Bottle Caps 100,000
PVC Fittings 200,000
Total P1,640,000

At current output levels, the company was declared profitable.

The following financial data were provided:

1. profit margin (net income/sales) = 32%

2. return on total assets (net income/total assets) = 72%
3. annual turnover = 15 times
4. current ratio = 1.1
5. acid test ratio = 1.05
 An analysis of the company's market potential convinced the top management to
consider expansion. It was also decided that a new product, the tissue holder, must be
added to its existing line of products.

The target sales for the next three years are as follows:

Products Year 1 Year 2 Year 3

Ball Pen Tips P 6M P 7M P 8M

Sputum Cups 12M 22M 33M
Grease Cups 12M 13M 14M
Bottle Caps 24M 36M 54M
PVC Fittings 48M 58M 70M
Tissue Holder 48M 58M 70M
Total P 154M P 194M P 249M

The company made provisions for improving its facilities including land, building,
machinery, and equipment. The hiring of additional manpower was also proposed.

The following constitute the positions proposed:

Position Quantity

Finance Manager 1
Quality Control and Research 1
and Development Manager
Senior Machinist 1
Junior Machinist 2
Helpers 2

The president ordered the general manager to prepare an organization chart for
the new set up. The key officers of the company were directed to review the proposed
set-up and present their comments on an executive meeting scheduled next week. The
proposed organization chart is shown in Exhibit 2.

Engineer Lagayan is now contemplating on what credible points he is going to

raise in the meeting.