MIDTERM

MODULE 4: 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 supervisor 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 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.

REASONS FOR ORGANIZING

Organizing is undertaken to facilitate the implementation of plans. Ineffective organizing, steps are undertaken to break down
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.

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 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 organizational chart is a diagram of the organization’s official positions and formal lines of authority. The organizational
manual provides written descriptions of the authority relationships, details the function 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 organizational structure.

There are instances when members of organizations 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 the
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 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 accompany 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 to
a project or group manager.

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 economies 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 with functional departments.

The disadvantages of the functional organization are the following:

1. Communication and coordination between the department stores 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, non-
motivating 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 customers’ 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
allocate them to various projects in the firm according to the
time they were needed.
The matrix organization is afforded the following advantages:
1. There is a more efficient use of resources than the
divisional structure.
2. There is flexibility and adaptability to changing
environments.
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.

The matrix organization has some disadvantages, however. They are the following:
1. There is frustration and confusion from a dual chain of command.
2. There is high conflict between division 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.

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 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 is 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
department.

 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.
3. Functional authority is one given to a person or a work group to make decision-related to their expertise even if this decision
concerns 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 oftentimes 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 certain concerns, like product
development, are 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

has 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 initial 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.”