THE FUNCTIONS OF THE ENGINEER The engineer manager’s decision-making skills will be very crucial to

Specifically, the functions of engineering include the following areas: his success as a professional.
1. Research – the engineer is engaged in the process of learning about DECISION-MAKING AS A MANAGEMENT RESPONSIBILITY
nature and codifying this knowledge into usable theories. Decision-making is a responsibility of the engineer manager. It is
2. Design and Development – where the engineer undertakes the activity understandable for managers to make wrong decisions at times. The wise
of turning a product concept to a finished physical item. manager will correct them as soon as they are identified. The higher the
3. Testing – where the engineer works in a unit where new products or management level is, the bigger and the more complicated decision-making
parts are tested for workability. becomes.
4. Manufacturing – where the engineer is directly in charge of
production personnel or assumes responsibility for the product. EXAMPLE:
5. Construction – this is where the construction engineer is either directly The production manager of a certain company has received a written
in charge of the construction personnel or may have responsibility for request from a section head regarding the purchase of an airconditioning unit.
the quality of the construction process. Almost simultaneously, another request from another section was forwarded to
6. Sales – where the engineer assists the company’s customers to meet him requiring the purchase of a forklift. The production manager was informed
their needs, especially those that require technical expertise. by his superior that he can only buy one of the two requested items due to
7. Consulting – where the engineer works as a consultant of any budgetary constraints.
individual or organization requiring his services.
8. Government – where the engineer may find employment in the WHAT IS DECISION-MAKING?
government performing any of the various tasks in regulating, Decision-making may be defined as the process of identifying and
monitoring, and controlling the activities of various institutions. choosing alternative courses of action in a manner appropriate to the demands of
9. Teaching – where the engineer gets employment in a school and is the situation. It is the heart of all management functions.
assigned as a teacher of engineering courses.
10. Management – where the engineer is assigned to manage groups of THE DECISION-MAKING PROCESS
people performing specific tasks. Decision-making is a process involving the following steps:
1. Diagnose problem
THE ENGINEER IN VARIOUS TYPES OF ORGANIZATION 2. Analyze environment
From the viewpoint of the engineer, organizations may be classified 3. Articulate problem or opportunity
according to the degree of engineering jobs performed: 4. Develop viable alternatives
1. Level One – those with minimal engineering jobs like retailing firms. 5. Evaluate alternatives
2. Level Two – those with a moderate degree of engineering jobs like 6. Make a choice
transportation companies. 7. Implement decision
3. Level Three – those with a high degree of engineering jobs like 8. Evaluate and adapt decision results
construction firms.
Diagnose a Problem
WHAT IS ENGINEERING MANAGEMENT? If a manager wants to make an intelligent decision, his first move
Engineering Management refers to the activity combining technical must be to identify the problem. If the manager fails in this aspect, it is almost
knowledge with the ability to organize and coordinate worker power, materials, impossible to succeed in the subsequent steps. An expert once said that
machinery, and money. “identification of the problem is tantamount to having the problem half-solved”.
Management is a process consisting of planning, organizing, directing, What is a problem? A problem exists when there is a difference
and controlling. between an actual situation and a desired situation.

REQUIREMENTS FOR THE ENGINEER MANAGER’S JOB Analyze the Environment

1. A bachelor’s degree in engineering from a reputable school; in some The environment where the organization is situated plays a very
cases, a master’s degree in engineering is required; significant role in the success or failure of such an organization. It is, therefore,
2. A few years experience in pure engineering job; very important that an analysis of the environment be undertaken.
3. Training in supervision; Components of the Environment: The environment consists of two
4. Special training in engineering management. major concerns:
1. Internal – refers to organizational activities within a firm that
HOW ONE MAY BECOME A SUCCESSFUL ENGINEER MANAGER surrounds decision-making.
Three general preconditions for achieving lasting success as a
manager:
1. Ability – refers to the capacity of an engineer manager to achieve
organizational objectives effectively and efficiently.
Effective – adequate to accomplish a purpose; producing
the intended or expected result
Efficient – performing in the best possible manner with the
least waste of time and effort
2. Motivation to Manage – refers to the desire of an engineer to manage
other people so that they may contribute to the realization of the
organization’s objectives.
A management researcher developed a psychometric instrument to
measure objectively an individual’s motivation to manage. The test is anchored
to the following dimensions:
o Favorable attitude toward those in positions of authority
o Desire to engage in games or sports competition with peers
o Desire to engage in occupational or work-related
competition with peers
o Desire to assert oneself and take charge 2. External – refers to variables that are outside the organization
o Desire to exercise power and authority over others and not typically within the short-run control of top
management.
o Desire to behave in a distinctive way, which includes
standing out from the crowd
o Sense of responsibility in carrying out the routine duties
associated with managerial work.

3. Opportunity
The opportunity for successful management has two requirements:
 Obtaining a suitable managerial job, and
 Finding a supportive climate once on the job.

CHAPTER 2
DECISION-MAKING
Managers of all kinds are primarily tasked to provide leadership in the
quest for the attainment of the organization’s objectives. 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 the organization. The objective of environmental analysis is the identification of limitations.
Examples of internal limitations:
o Limited funds available for the purchase of equipment.
1
 o Limited training on the part of employees.
o Ill-designed facilities.
Examples of external limitations:
o Patents are controlled by other organizations.
o A very limited market for the company’s products and services exists.
o Strict enforcement of local zoning regulations.
Develop Viable Alternatives
Procedure in Making Alternative Solutions:
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.
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 the choosing 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 the alternatives presented.
Souder suggests 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.
The cost of the alternative refers to out-of-pocket costs, opportunity
costs, and follow-on costs.
The risk characteristics refer to the likelihood of achieving the goals
of the alternatives.
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 convince 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 must understand and accept the solution.
Evaluate and Adapt Decision Result
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 keeping with the
goals and objectives originally specified.
Control refers to actions made to ensure that the 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, further analysis is necessary.
Approaches in Solving Problems
In decision-making, the engineer manager is faced with the 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 refers to evaluation of alternatives using
intuition and subjective judgment. Stevenson states that managers tend to use the
qualitative approach when:
1. The problem is fairly simple.
2. The problem is familiar.
3. The costs involved are not great.
4. Immediate decisions are needed.
Quantitative Evaluation 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
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5. Regression analysis
6. Simulation
7. Linear programming
8. Sampling theory
9. Statistical decision theory
INVENTORY MODELS
This is consists of several types all 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 customers waiting time and cost of
service.
The queuing theory is applicable to companies where waiting lines are
a common situation.
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 the 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 manager 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, manpower 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 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.
CHAPTER 3
PLANNING TECHNICAL ACTIVITIES
 If managing an organization is to be pursued vigorously, planning will
constitute the most important activity. 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 becloud his judgment. This must be expected since
anybody who is confronted by several situations happening simultaneously will
loose 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.
PLANNING DEFINED
Various experts define planning in various ways, all of which are
designed to suit specific purposes.
Planning, according to Nickels, 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 planning 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 manager 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.
Operational Planning
The term operational planning refers to the process 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
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, to his division, or to his unit. The setting of goals provides
an answer to the said concern.
Goals may be defined as the precise statement of results sought, quantified in
time and magnitude, where possible.
3
Developing Strategies or Tactics to Reach Goals
After determining the goals, the next task is to devise some means to
realize them. The ways to realize the goals are called strategies and these will be
the concern of top management.
A strategy may be defined as a course of action aimed at ensuring that
the organization will achieve its objectives.
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.
Determining Resources Needed
When particular sets of strategies or tactics have been devised, the
engineer manager will, then, determine he human and nonhuman resources
required by such strategies or tactics.
The quality and quantity of resources needed must be correctly
determined. Too many resources in terms of either quality or quantity will be
wasteful. Too little will mean loss of opportunities for maximizing income.
Setting Standards
The standards for measuring performance may be set at the planning
stage.
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 is 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 thank
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 classified 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. They 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 functions.
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. They may be further classified as follows:
1. Budget – is a plan which sets forth the projected expenditure for
a certain activity and explains where the required funds will
come from.
2. Program – is designed to coordinate a large set of activities.
3. Project – is a plan usually more limited in scope than a program
and is sometimes prepared 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. The following must be included in the
marketing plan:
 1. The Executive Summary – which presents an overall view of the
marketing project and its potential. THE PURPOSE OF STRUCTURE
2. Table of Contents The structure serves some very useful purposes: They are the
3. Situational Analysis and Target Market following:
4. Marketing Objectives and Goals 1. It defines the relationship between tasks and authority for
5. Marketing Strategies individuals and departments.
6. Marketing Tactics 2. It defines formal reporting relationships, the number of levels in
7. Schedules and Budgets the hierarchy of the organization, and the span of control.
8. Financial Data and Control 3. It defines the groupings of individuals into departments and
departments into organization.
The Contents of the Production Plan 4. It defines the system to effect coordination of effort in both
The Production Plan must contain the following: vertical (authority) and horizontal (tasks) directions.
1. The amount of capacity the company must have When structuring an organization, the engineer manager must be
2. How many employees are required concerned with the following:
3. How much material must be purchased 1. Division of labor – determining the scope of work and how it is
combined in a job
The Contents of the Financial Plan 2. Delegation of authority – the process of assigning various
The components of the financial plan are as follows: degrees of decision-making authority to subordinates.
An analysis of the firm’s current financial condition as indicated by an 3. Departmentation – the grouping of related jobs, activities, or
analysis of the most recent statements processes into major organizational subunits.
1. A sales forecast 4. Span of control – the number of people who report directly to a
2. The capital budget given manager.
3. The cash budget 5. Coordination – the linking of activities in the organization that
4. A set of pro forma (or projected) financial statements serves to achieve a common goal or objective.
5. The external financing plan
THE FORMAL ORGANIZATION
The formal organization is the structure that details lines of
Contents of the Human Resources Plan responsibilities, authority, and position. What is depicted in the organization chart
The human resources plan must contain the following: is the formal organization. It is the planned structure and it represents the
1. Personnel requirements of the company deliberate attempt to establish patterned relationships among components that
2. Plans for recruitment and selection will meet the objectives effectively.
3. Training plan The formal structure is described by management through:
4. Retirement plan 1. Organization chart – is the diagram of the organization’s official
positions and formal lines of authority.
PARTS OF THE STRATEGIC PLAN 2. Organizational manual – provides written descriptions of
The strategic plan must contain the following: authority relationships, details the functions of major
1. Company or corporate mission organizational units, and describes job procedures.
2. Objectives or goals 3. Policy manuals – describes personnel activities and company
3. Strategies policies.

Company or 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 PLAN 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 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
CHAPTER 4
ORGANIZING TECHNICAL ACTIVITIES
The engineer manager needs to acquire various skills in management,
including those for organizing technical activities. Skills in organizing contribute
largely to the accomplishment of the objectives of many organizations, whether
they are private businesses or otherwise. 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 this will make it possible to assign particular
tasks to particular persons.
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. This is the result of the organizing process.
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 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. Its low visibility 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 STRUCTURE
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 the company by division 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 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 fro 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.

4
 6. Employees are provided with career progress within functional
departments.
The disadvantages of the functional organization are the following: Matrix Organization
1. Communication and coordination between the departments are A matrix organization is a structure with two or more channels of
poor. command, two lines of budget authority, and two sources of performance and
2. Decisions involving more than one department pile up at the top reward. This was designed to keep employees in a central pool and allocate them
management level and are often delayed. to various projects in the firm according to the length of time they were needed.
3. Work specialization and division of labor, which are stressed in The matrix organization is afforded with the following advantages:
a functional organization, produce routine, nonmotivating 1. There is more efficient use of resources than the divisional
employee tasks. structure.
4. It is difficult to identify which section or group is responsible for 2. There is flexibility and adaptability to changing environment.
certain problems. 3. The development of both general and functional management
5. There is limited view of organizational goals by employees. skills are present.
6. There is limited general management training for employees. 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 need for human relations training for key employees
and managers.
5. There is a tendency for power dominance by one side of the
matrix.
FIGURE. A Typical Functional Organization Chart of a Construction
Company

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 the 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 the divisions.
4. There is less top management control.
5. There is competition for corporate resources.
FIGURE. A Typical Matrix Organization of a Construction Firm

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 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:
o Personnel staff – those individuals assigned to a specific
manager to provide needed staff services.
o 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.

THE PURPOSE OF COMMITTEE

When certain formal groups are deemed inappropriate to meet
expectations, committees are oftentimes harnessed to achieve organizational
goals.
A committee is a formal group of persons formed for a specific
purpose. Committees are very useful most especially to engineering and
manufacturing firms.
Committees may be classified as follows:
FIGURE. A Typical Product/Market Organization for a Construction
Company

5
 1. Ad hoc committee – one created for a short-term purpose and to
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. It might be useful to set up some procedures to make the committee a
more effective tool to accomplish goals.
CHAPTER 5
STAFFING THE ENGINEERING ORGANIZATION
After setting up the organizational structure that has been decided to
best serve the interest of a certain firm, the next move that has to be made is to
fill up the identified positions with the most qualified persons available.
Engineering organizations are very sensitive to whatever staffing
errors are made. Placing the wrong person in a highly specialized position like
quality control, for instance, may bring untold damages to the firm.
An example of the ill-effects of staffing errors was provided by the
TV program “Brigada Siete”. The Disaster that happened in the Film Center of
the Cultural Center Complex in Manila was highlighted in the program. In
November 1981, the whole sixth floor of the Film Center collapsed while
undergoing construction. Many workers and an engineer died as a result.
When interviewed by the TV program’s staff, a former construction
worker said he was hired to do masonry job when he does not have training in
masonry.
This type of tragedy underscores the importance of staffing in any
organization. Effective staffing, on the other hand, places the engineering
organization on a competitive stance.
WHAT IS STAFFING?
The engineer manager must be concerned with putting the right
persons in various positions within his area of concern. Although some of the
important aspects of staffing may be delegated to the human resource office, the
engineer manager assumes a great responsibility in assuring that the right persons
are assigned to positions that fit their qualifications.
Staffing may be defined as the management function that determines
the human resource needs, recruits, selects, trains, and develops human resources
for jobs created by an organization.
Staffing is undertaken to match people with jobs so that the realization
of the organization’s objectives will be facilitated.
THE STAFFING PROCEDURE
The staffing process consists of the following series of steps:
1. Human Resource Planning
2. Recruitment
3. Selection
4. Induction and Orientation
5. Training and Development
6. Performance Appraisal
7. Employment Decisions
8. Separations
Human Resource Planning
The planned output of any organization will require a systematic
deployment of human resources at various levels. To be able to do this, the
engineer manager will have to involve himself with human resource planning.
Human resource planning may involve three activities, as follows:
1. Forecasting – which is an assessment of future human resource
needs in relation to the current capabilities of the organization.
2. Programming – which means translating the forecasted human
resource needs to personnel objectives and goals.
3. Evaluation and control – which refers to monitoring human
resource action plans and evaluating their resources.
Methods of Forecasting. The forecasting of manpower needs may be undertaken
using any of the following quantitative methods:
1. Time series methods – which use historical data to develop
forecasts of the future.
2. Explanatory or Causal Models – which are attempts to identify
the major variables that are related to or have caused particular
past conditions and then use current measures of these variables
to predict future conditions.
The three major types of explanatory models are as
follows:
o Econometric models – a system of regression
equations estimated from past-time series data and
used to show the effect of various dependent
variables.
o Leading indicators – refers to time series that
anticipate business cycle turns.
o Monitoring methods – are those that provide early
warning signals of significant changes in established
patterns and relationships so that the engineer
manager can assess the likely impact and plan
responses if required.
6
Recruitment
When the different positions have been identified to be necessary and
the decision to fill them up has been made, the next logical step is recruitment.
Recruitment refers to attracting qualified persons to apply for vacant
positions in the company so that those who are best suited to serve the company
may be selected.
Source of Applicants
When management wants to fill up certain vacancies, the following
sources may be tapped:
1. The organization’s current employees. Some of the
organization’s current employees may be qualified to occupy
positions higher than the ones they are occupying. They should
be considered.
2. Newspaper advertising.
3. Schools. These are good sources of applicants. Representatives
of companies may interview applicants inside campuses.
4. Recruitment Firms. Some companies are specifically formed to
assist client firms in recruiting qualified persons.
5. Competitors. These are useful sources of qualified but
underutilized personnel.
For entry-level personnel, the engineer manager will likely to rely on
newspaper advertising, schools, and referrals. When recruiting managers, the
reliable sources are the current employees, recruitment firms, and competitors.
Selection
Selection refers to the act of choosing from those that are available
individuals most likely to succeed on the job. A requisite for effective selection is
the preparation of a list indicating that an adequate pool of candidates is
available.
The purpose of selection is to evaluate each candidate and to pick the
most suited for the position available.
Selection procedures may be simple or complex depending on the
costs of a wrong decision. If the management picks the wrong person and the
subsequent effect to the organization is negligible, then the selection process is
made simple. This is true in the case of construction laborers where the review of
their applications is done. Within a few days or even a few hours, the applicants
are informed of the decision. When the position under consideration involves
special skills, a more elaborate selection process is undertaken.
Ways of Determining the Qualifications of a Job Candidate
Companies use any or all of the following in determining the
qualifications of a candidate:
1. Application blanks. The application blank provides information about
a person’s characteristics such as age, marital status, address,
educational background, experience, and special interests. After
reading the application blank, the evaluator will have basis on whether
or not to proceed further in evaluating the applicant.
2. References. References are those written by previous employers, co-
workers, teachers, club officers, etc. Their statements may provide
some vital information on the character of the applicant.
3. Interviews. Information may be gathered in an interview by asking a
series of relevant questions to the job candidate.
4. Testing. This involves an evaluation of the future behavior or
performance of an individual.
Types of Tests
Test may be classified as follows:
1. Psychological Tests – which is an objective, standard measure of
a sample behavior. It is classified into:
o Aptitude Test – used to measure a person’s capacity
or potential ability to learn.
o Performance Test – used to measure a person’s
current knowledge of a subject.
o Personality Test – used to measure personality traits
as dominance, sociability, and conformity.
o Interest Test – used to measure a person’s interest in
various fields of work.
2. Physical Examination – a type of test given to assess the
physical health of an applicant. It is given to assure that the
health of the applicant is adequate to meet the job requirements.
Induction and Orientation
After an applicant is finally selected from among the various ones and
then subsequently hired, the next steps undertaken are induction and orientation.
In induction, the new employee is provided with the necessary
information about the company. His duties, responsibilities, and benefits are
relayed to him. The company history, its products and services, and the
organization structure are explained to the new employee.
In orientation, the new employee is introduced to the immediate
working environment and co-workers. The following are discussed: location,
rules, equipment, procedures, and training plans. Performance expectations are
also discussed. The new employee also undergoes the “socialization process” by
pairing him with an experienced employee and having one-on-one discussion
with the manager.
TRAINING AND DEVELOPMENT
If the newly-hired (or newly-promoted) employee is assessed to be
lacking the necessary skills required by the job, training becomes necessary.
 Training refers to the learning that is provided in order to improve
performance on the present job. Training programs consist of two general types,
namely:
1. Training programs for non-managers, and
2. Training and educational programs for executives.
Training Program for Non-Managers
This type of training is directed to non-managers for specific increases
in skills and knowledge to perform a particular job. The four methods under this
type are:
1. On-the-job training – where the trainee is placed in an actual
work situation under the direction of his immediate supervisor,
who acts as trainer. This situation motivates strongly the trainee
to learn.
2. Vestibule school – where the trainee is placed in a situation
almost exactly the same as the workplace where machines,
materials, and time constraints are present. As the trainer works
full time, the trainee is assured of sufficient attention from him.
3. Apprenticeship program – where a combination of on-the-job
training and experiences with classroom instruction in particular
subjects are provided to trainees.
4. Special courses – are those taken which provide more emphasis
on education rather than training. Examples are those which
concern specific uses of computer-aided design and building
procedures.
Training Programs for Managers
The training needs of managers may be classified into four areas:
decision-making skills, interpersonal skills, job knowledge, and organizational
knowledge.
The decision-making skills of the manager may be enhanced through
any of the following methods of training:
1. In-basket – where the trainee is provided with a set of notes,
messages, telephone calls, letters, and reports, all pertaining to a
certain company situation. He is expected to handle the situation
within a given period of 1 or 2 hours.
2. Management Games – is a training method where trainees are
faced with a simulated situation and are required to make an
ongoing series of decisions about the situation.
3. Case Studies – These methods present actual situations in
organizations and enable one to examine successful and
unsuccessful operations. It emphasizes the manager’s world,
improves communication skills, offers rewards of solving a
mystery, possesses the quality of illustration, and establishes
concrete reference points for connecting theory with practice.
The interpersonal competence of the manager may be developed
through any of the following methods:
1. Role-playing – is a method by which the trainees are assigned
roles to play in a given case incident. They are provided with a
script or a description of a given problem and of the key persons
they are to play. The purpose of this method is to improve the
skill of the trainees in human relations, supervision, and
leadership.
2. Behavior Modeling – this method attempts to influence the
trainee by showing model persons behaving effectively in a
problem situation. The trainee is expected to adapt the behavior
of the model and use it effectively in some instances later on.
3. Sensitivity Training – under this method, awareness and
sensitivity to behavioral patterns of oneself and others are
developed.
4. Transactional Analysis – is a training method intended to help
individuals not only understand themselves and others but also
improve their interpersonal and communication skills.
In acquiring knowledge about the actual job the manager is currently
holding, the following methods are useful:
1. On-the-job experience – this method provides valuable
opportunities for the trainee to learn various skills while actually
engaged in the performance of a job.
2. Coaching – this method requires a senior manager to assist a
lower-level manager by teaching him the needed skills and
generally providing directions, advice, and helpful criticism. The
senior manager must be skilled himself and have the ability to
educate; otherwise the method will be ineffective.
3. Understudy – under this method, a manager works as assistant to
a higher-level manager and participates in planning and other
managerial functions until he is ready to assume such position
himself. Once in a while, the assistant is allowed to take over.
In the attempt to increase the trainee’s knowledge of the total
organization, exposure to information and events outside of his immediate job is
made. In this regard, the following methods are useful:
1. Position Rotation – under this method, the manager is given
assignments in a variety of departments. The purpose is to
expose him to different functions of the organization.
2. Multiple Management – this method is premised on the idea that
junior executives must be provided with means to prepare them
for higher management functions. To achieve this, a junior board
of directors is created consisting of junior executives as
7
members. The board is given the authority to discuss problems
that the senior board could discuss. The members are
encouraged to take a broad business outlook rather than
concentrating on their specialized lines of work.
Performance Appraisal
Performance appraisal is the measurement of employee performance.
The purpose for which performance appraisal is made are as follows:
1. To influence, in a positive manner, employee performance and
development;
2. To determine merit pay increases;
3. To plan for future performance goals;
4. To determine training and development needs; and
5. To assess the promotional potential of employees.
Ways of Appraising Performance
An employee’s performance may be measured using any of the
following methods:
1. Rating Scale Method – where each trait or characteristic to be
rated is represented by a line or scale on which the rater
indicates the degree to which the individual possesses the trait or
characteristic.
2. Essay Method – where the evaluator composes statements that
best describe the person evaluated.
3. Management by Objectives Method – where specific goals are
set collaboratively for the organization as a whole, for various
subunits, and for each individual member. Individuals are, then,
evaluated on the basis of how well they have achieved the results
specified by the goals.
4. Assessment Center Method – where one is evaluated by persons
rather than the immediate superior. This method is used for
evaluating managers.
5. Checklist Method – where the evaluator checks statements on a
list that are deemed to characterize an employee’s behavior or
performance.
6. Work Standards Method – where standards are set for the
realistic worker output and later on used in evaluating the
performance of non-managerial employees.
7. Ranking Method – where each evaluator arranges employees in
rank order from the best to the poorest.
8. Critical-Incident Method – where the evaluator recalls and
writes down specific (but critical) incidents that indicate the
employee’s performance. A critical incident occurs when
employee’s behavior results in an unusual success or failure on
some parts of the job.
Employment Decisions
After evaluating the performance of the employees (managerial or
otherwise), the management will now be ready to make employment decisions.
They may consist of the following:
1. Monetary Rewards – these are given to employees whose
performance is at par or above standard requirements.
2. Promotion – this refers to a movement by a person into a
position of higher pay and greater responsibilities and which is
given as a reward for competence and ambition.
3. Transfer – this is a movement of a person to a different job at the
same or similar level of responsibility in the organization.
Transfers are made to provide growth opportunities for the
persons involved or to get rid of a poor performing employee.
4. Demotion – this is a movement from one position to another
which has less pay or responsibility attached to it. Demotion is
used as a form of punishment or as a temporary measure to keep
an employee until he is offered a higher position.
Separation
Separation is either a voluntary or involuntary termination of an
employee. When made voluntary, the organization’s management must find out
the real reason. If the presence of a defect in the organization is determined,
corrective action is necessary.
Involuntary separation (or termination) is the last option that the
management exercises when an employee’s performance is poor or when he
committed an act violating the company rules and regulations. This is usually
made after training efforts fail to produce positive results.
CHAPTER 6
COMMUNICATING
The achievement of the objectives of the engineering organization will
depend on the performance of the human and non-human elements attached to it.
The task of management is to “program” these elements correctly so that each
will respond accordingly to their assigned tasks. Standard programming methods
have already been adapted by technologists for most machines and equipments.
The programming approach to human element is different and must be
dealt with using methods espoused by behavioral scientists. Employees will
perform accordingly to the dictates of their minds. If this is really so, then
management must reach them through powerful means of persuasion under an
atmosphere conducive to effective communication.
What Communication Is
 Communication is the process of sharing information through
symbols, including words and message.
Communication may happen between superior and his subordinate,
between peers, between a manager and a client or customer, etc. It may be done
face-to-face, or through printed materials, or through an electronic device like the
telephone.
In management, communication must be made for a purpose and
because it has a cost attached to it, it must be used effectively.
FUNCTIONS OF COMMUNICATION
Communication may be used to serve any of the following functions:
1. Information function – information provided through
communication may be used for decision-making at various
work levels in the organization. An example is a manager who
wants to make sure that his decision in promoting an employee
to a higher position is correct. Through communication, the
information provided will minimize if not eliminate the risk.
2. Motivation function – communication is also oftentimes used as
a means to motivate employees to commit themselves to the
organization’s objectives.
3. Control function – when properly communicated, reports,
policies, and plans define roles, clarify duties, authorities and
responsibilities. Effective control is then facilitated.
4. Emotive function – when feelings are repressed in the
organization, employees are affected with anxiety, which in turn
affects performance. Whatever types of emotions are involved,
communication provides a means to decrease the internal
pressure affecting the individual.
determined in advance so that the idea may be encoded to conform to the specific
requirements of the identified method.
Transmit
After encoding, the message is now ready for transmission through the
use of an appropriate communication channel. Among the various channels
include the spoken word, body movements, the written word, television, radio,
electronic mail, etc.
Proper transmission is very important so the message sent will reach
and hold the attention of the receiver. To achieve this, the communication
channel must be free of barriers, or interference (sometimes referred to as noise).
Receive
The next step in the communication process is the actual receiving of
the message by the intended receiver. The requirement is for the receiver to be
ready to receive at the precise moment the message relayed by the sender.
The message may be initially received by a machine or a person. In
any case, communication stops when the machine is not turned or tuned on to
receive the message, or the person assigned to receive the message does not listen
or pay attention properly.
Decode
Decoding means translating the message from the sender into a form
that will have meaning to the recipient. If the receiver knows the language and
terminology used in the message, successful decoding may be achieved.
If the receiver understands the purpose and the background situation
of the sender, decoding will be greatly improved.

THE COMMUNICATION PROCESS

SENDER

develops idea
Accept
The next step is for the receiver to accept or reject the message.
Sometimes, acceptance (or rejection) is partial. An example is provided as
follows:
encodes A newly-hired employee was sent to a supervisor with a note from his
superior directing the supervisor to accept the employee into his unit and to
then provide the necessary training and guidance. As the supervisor feels that he was
transmits not consulted in the hiring process, he thinks that his only obligation is to accept
the employee in his unit and nothing more.
message to The factors that will affect the acceptance or rejection of a message
are as follows:
RECEIVER 1.
2.
the accuracy of the message;
whether or not the sender has authority to send the message
and/or require action; and
3. the behavioral implications for the receiver.
who receives
message Use
The next step is for the receiver to use the information. If the message
provides information of importance to a relevant activity, then the receiver could
store it and retrieve it when required. If the message requires a certain action to
decodes be made, then he may do so, otherwise, he discards it as soon as it he receives it.
then
provides Provide Feedback
The last step in the communication process is for the receiver to
accepts feedback to provide feedback to the sender. Depending on the perception of the receiver, this
important step may not be made.
or rejects
Even if feedback is relayed, it may not reach the original sender of the
message. This may be attributed to the effects of any of the communication
barriers.

Figure. The Communication Process FORMS OF COMMUNICATION

Communication consists of two major forms:
1. verbal, and
The communication process consists of eight steps which are as 2. nonverbal.
follows:
1. develop an idea Verbal Communication
2. encode Verbal communications are those transmitted through hearing or sight.
3. transmit These modes of transmission categorize verbal communication into two classes:
4. receive oral and written.
5. decode Oral communication mostly involves hearing the words of the sender,
6. accept although sometimes, opportunities are provided for seeing the sender’s body
7. use movements, facial expression, gestures, and eye contact. Sometimes, feeling,
8. provide feedback. smelling, tasting, and touching are involved.
An alternative to oral communication is the written communication
where the sender seeks to communicate through the written word. The written
Develop an Idea communication is, sometimes, preferred over the oral communication because of
The most important step in effective communication is developing an time and cost constraints.
idea. It is important that the idea to be conveyed must be useful or of some value. The written communication, however, has limitations and to remedy
An example of a useful idea is how to prevent accidents in workplaces. these, some means are devised. Perfume advertisers, for instance, lace their
written message with the smell of their products.
Encode
The next step is to encode the idea into words, illustrations, figures, or Nonverbal Communication
other symbols suitable for transmission. The method of transmission should be

8
 Nonverbal communication is a means of conveying message through
body language, as well as the use of time, space, touch, clothing, appearance, and
aesthetic elements. Body language consists of gestures, bodily movement,
posture, facial expression, and mannerisms of all kinds.
Nonverbal communication conveys many shades of meaning and it is
to the advantage of the communicator to understand what messages are relayed.
THE BARRIERS TO COMMUNICATION
Various factors may impede the efficient flow of communication. Any
or all of these factors, at any point, derail the process. Even if the message is
transmitted to the channel, the timing and the meaning of the message may be
affected by the factors.
The barriers to communication may be classified generally as:
1. personal barriers
2. physical barriers
3. semantic barriers
Personal Barriers
Personal Barriers are hindrances to effective communication arising
from a communicator’s characteristics as a person, such as emotions, values, poor
listening habits, sex, age, race, socioeconomic status, religion, education, etc.
Emotions cloud the communicator’s ability to judge correctly the real
meaning of messages received. People with different values will find it hard to
communicate with each other. Poor listening habits of a receiver frustrate the
communication efforts of a sender.
Physical Barriers
Physical barriers refer to interferences to effective communication
occurring in the environment where the communication is undertaken. The very
loud sound produced by a passing jet temporarily drowns out the voice of the
guest delivering a speech. Such distraction does not allow full understanding of
the meaning of the entire message and is an example of a physical barrier.
A communication channel that is overloaded may prevent important
information to reach the intended user. Another physical barrier to
communication is wrong timing.
Semantic Barriers
A semantic barrier may be defined as an interference with the
reception of a message that occurs when the message is misunderstood even
though it is received exactly as transmitted.
For example, the words “wise” and “salvage” will have different
meanings to an English speaking foreigner than to a Filipino.
OVERCOMING BARRIERS TO COMMUNICATION
When communication barriers threaten effective performance, certain
measures must be instituted to eliminate them. To eliminate problems due to
noise, selective perception, and distraction, the following are recommended:
1. Use feedback to facilitate understanding and increase the
potential for appropriate action.
2. Repeat messages in order to provide assurance that they are
properly received.
3. Use multiple channels so that the accuracy of the information
may be enhanced.
4. Use simplified language that is easily understandable and which
eliminates the possibility of people getting mixed-up with
meanings.
Among the techniques used in upward communication are: formal
grievance procedures, employee attitude and opinion surveys, suggestion
systems, open-door policy, informal gripe sessions, task forces, and exit
interviews.
Formal Grievance Procedures. Grievances are part of a normally operating
organization. To effectively deal with them, organizations provide a system for
employees to air their grievances.
Grievance may be defined as any employee’s concern over a perceived violation
of the labor agreement that is submitted to the grievance procedure for eventual
resolution. Grievances represent an open, upward communication channel
whereby employees can offer suggestions to management.
Employee Attitude and Opinion Surveys. Finding out what the employees
think about the company is very important. The exercise, however, requires an
expertise and the company may not be prepared to do it. If the organization’s
operation is large enough to justify such activity, then it must be done. If the
assistance of an outside research firm is considered, a benefit-cost analysis must
be used as a deciding factor.
Suggestion Systems. Suggestions from employees are important sources of cost-
saving and production enhancing ideas. Even if majority of the suggestions are
not feasible, a simple means of acknowledging them contributes to employee
morale.
Open-Door Policy. An open-door policy, even on a limited basis, provides the
management with an opportunity to act on difficulties before they become full-
blown problems.
Informal Gripe Sessions. Informal gripe sessions can be used positively if
management knows how to handle them. When employees feel free to talk and
they are assured of not being penalized for doing so, then management will be
spared with lots of efforts determining the real causes of problems in the
company.
Task Forces. When a specific problem or issue arises, a task force may be
created and assigned to deal with the problem or issue. Since membership of task
forces consists of management and non-management personnel, integration and
teamwork are fostered, creativity is enhanced, and interpersonal skills are
developed.
Exit Interviews. When employees leave an organization for any reason, it is to
the advantage of management to know the real reason. If there are negative
developments in the organization that the management is not aware of, exit
interviews may provide some of the answers.
UPWARD DOWNWARD
COMMUNICATION COMMUNICATION
Concerns: Concerns:
problems and exceptions implementation of goals,
suggestions for strategies and objectives
improvement job instructions
performance reports procedures and practices
grievances and disputes performance feedback
financial and accounting indoctrination
information

TECHNIQUES FOR COMMUNICATING IN ORGANIZATIONS

Communication may be classified as to the types of flow of the
message which are as follows: downward, upward, or horizontal. Each of the
types of message flow has its own purposes and techniques. HORIZONTAL
Downward Communication COMMUNICATION
Downward communication refers to message flows from higher levels
of authority to lower levels. Among the purposes of downward communication Concerns:
are:
1. to give instructions interdepartmental
2. to provide information about policies and procedures coordination
3. to give feedback about performance
interdepartmental
4. to indoctrinate or motivate.
Among the techniques used in downward communication are as problem-solving
follows: letters, meetings, telephones, manuals, handbooks, and newsletters. staff advice to the
Letters are appropriate when directives are complex and precise departments
actions are required. When orders are simple but the result depends largely on the
employee morale, techniques that provide personal interchange like meetings and
the telephone, are appropriate.
Manuals are useful sources of information regarding company policy,
procedures, and organization. Figure. Message Flows and Areas of Concern

Upward Communication
There is a need for management to provide employees with all the
necessary material and non-material it can give. The first requirement, however, Horizontal Communication
is for management to know the specific needs of the employees. This is the Horizontal Communication refers to messages sent to individuals or
primary reason for upward communication. groups from another of the same organizational level or position.
Upward communication refers to messages from lower-level positions The purposes of horizontal communication are:
to persons in higher positions. The messages sent usually provide information on 1. to coordinate activities within departments
work progress, problems encountered, suggestions for improving output, and 2. to persuade others at the same level of organization
personal feelings about work and non-work activities. 3. to pass on information about activities or feelings.

9
 Among the techniques appropriate for horizontal communication are:
memos, meetings, telephones, dinners, and other social affairs.
MANAGEMENT INFORMATION SYSTEM
Management Information System (MIS) is defined as an organized
method of providing past, present, and projected information on internal
operations and external intelligence for use in decision-making.
The MIS currently used by corporate firms consists of written and
electronically based systems for sending reports, memos, bulletins, and the like.
The system allows managers of the different departments within the firm to
communicate with each other.
The Purpose of MIS
The MIS is established for various reasons and they are as follows:
1. To provide a basis for the analysis of early warning signals that
can originate both externally and internally
2. To automate routine clerical operations like payroll and
inventory reports
3. To assist managers in making routine decisions like scheduling
orders, assigning orders to machines, and reordering supplies
4. To provide the information necessary for management to make
strategic and non-programmed decisions.
the elements or other people, financial security which may be affected by loss of
job or the breadwinner in the family, etc.
Social Needs. After satisfying his physiological and security needs, the employee
will now strive to secure love, affection, and the need to be accepted by peers.
Esteem Needs. The fourth level of needs is called esteem needs and they refer to
the needs for positive self-image and self-respect and the need to be respected by
others.
Self-Actualization Needs. The fifth and the topmost level needs in the hierarchy
are called self-actualization needs and involve realizing our full potential as
human beings and becoming all that we are able to be.
The Relevance of Maslow’s Theory to Engineering Management. Even if
Maslow’s Theory has been largely questioned, one basic premise cannot be
discarded: a fulfilled need no longer motivates an individual. If this is the
situation the subordinate is in, the engineer manager must identify an unfulfilled
need and work out a scheme so that the subordinate will be motivated to work in
order to satisfy the unfulfilled need.
SELF-ACTUALIZATION NEEDS
Self-fulfillment

ESTEEM NEEDS
Status, respect, prestige
CHAPTER 7
SOCIAL NEEDS
MOTIVATING Friendship, belonging, love
Productivity has always been a serious concern of management firms.
If it improves, it means greater chances for the company to grow and be more
stable. Higher productivity, however, is not a result of chance. It happens because SECURITY NEEDS
of harder, more efficient, and more intelligent work made by the employees. To Freedom from harm, financial security
be willing partners, however, the requirement is for them to be motivated.

What is Motivation? PHYSIOLOGICAL NEEDS

Motivating refers to the act of giving employees reasons or incentives Food, water, sleep, sex, body elimination
to work to achieve organizational objectives. Motivation, on the other hand,
refers to the process of activating behavior, sustaining it, and directing it toward a
Figure. Maslow’s Hierarchy of Needs
particular goal. This definition is useful because it specifies three stages:
activating, sustaining, and directing actions towards the achievement of
Herzberg’s Two-Factor Theory
objectives.
The two-factor theory is one developed by Frederick Herzberg
indicating that a satisfied employee is motivated from within to work harder and
plus that a dissatisfied employee is not self-motivated.
NEEDS MOTIVATION Herzberg identified two classes of factors associated with employee
satisfaction and dissatisfaction. He found out that satisfied employees mentioned
the following factors (called motivation factor) responsible for job satisfaction:
achievement, recognition, work itself, responsibility, advancement, and growth.
which leads to readiness leads
Dissatisfied employees mentioned the following factors (called hygiene factors)
for the next need to as responsible for job dissatisfaction: company policy and administration,
supervision, relationship with supervisor, work conditions, salary, relationship
ACTION OR GOAL- with peers, personal life, status, and security.
NEED
SATISFACTION DIRECTED BEHAVIOR 10
which results 9
8
to 7
LEVEL OF
Figure. The Process of Motivation 6
SATISFACTION 5
4 level of no satisfaction
FACTORS CONTRIBUTING TO MOTIVATION 3
2 and no
There are certain factors influencing a person’s desire to do his job
well. They are the following: 1 dissatisfaction
1. Willingness to do a job. People who like what they are doing are 0
1
(no reason not
highly motivated to produce the expected output.
2. Self-confidence in carrying out a task. When employees feel that 2 to work but no
they have the required skill and training to perform a task, the LEVEL OF 3 motivation to
more motivated they become. 4
DISSATISFACTIO 5 work hard
3. Needs satisfaction. People will do their jobs well if they feel that
by doing so, their needs will be satisfied. N 6
7
THEORIES OF MOTIVATION 8
There are various theories of motivation, but only the four most 9
influential ones will be discussed. They consist of the following: 10
1. Maslow’s needs hierarchy theory
2. Herzberg’s two-factor theory Figure. Herzberg’s Two-Factor Theory
3. Expectancy theory
4. Goal setting theory
Expectancy Theory
Maslow’s Needs Hierarchy Theory Expectancy Theory is a motivation model based on the assumption
Abraham Maslow, a psychologist, theorized that human beings have that an individual will work depending on his perception of the probability of his
five basic needs which are as follows: physiological, security, social, esteem, and expectations to happen.
self-actualization. These needs are hierarchal, which means, one need will have to The theory poses the idea that motivation is determined by
be satisfied first before the other need. expectancies and valences. Expectancy is a belief about the likelihood or
Physiological Needs. Those that are concerned with biological needs like food, probability that a particular behavioral act will lead to a particular outcome.
drink, rest, and sex fall under the category of physiological needs. These needs Valence is the value an individual places on the expected outcomes or rewards.
take priority over the other needs. Expectancy theory is based on the following assumptions:
Security Needs. After satisfying the physiological needs, people will seek to 1. A combination of forces within an individual and in the environment
satisfy their safety needs. These needs include freedom from harm coming from determines behavior.

10
 2. People make decisions about their own behavior and that of Management of Extrinsic Rewards. To motivate job performance effectively,
organizations. extrinsic rewards must be properly managed in line with the following:
3. People have different types of needs, goals, and desires. 1. it must satisfy individual needs;
4. People make choices among alternative behaviors based on the extent 2. the employees must believe that effort will lead to reward;
to which they think a certain behavior will lead to a desired outcome. 3. rewards must be equitable;
4. rewards must be linked to performance.
Goal Setting Theory No single type of reward is generally applicable to all employees. This
Goal setting refers to the process of improving performance with is so because individual persons have needs different from other persons. As
objectives, deadlines or quality standard. When individuals or groups are much as possible the particular needs of an individual must be matched with the
assigned specific goals, a clear direction is provided and which later motivates corresponding reward if motivation is the objective. The administrative
them to achieve these goals. constraints inherent to such systems, however, will be a hindrance to its adoption.
The goal setting model consists of the following: Employees must believe that their efforts will lead to reward.
1. goal content Otherwise, they will not strive to turn in more efforts in their particular job
2. goal commitment assignments.
3. work behavior Rewards that are not equitable will not produce the desired
4. feedback aspects motivation.
Goal Content. To be sufficient in content, goals must be challenging, attainable, When employees know that reward is tied up to individual
specific and measurable, time-limited, and relevant. performance, management may expect extra efforts from them. A negative
When goals are challenging, higher performance may be expected. The sales example is the practice in government offices where every employee, regardless
quotas imposed by companies to individual members of their sales force indicate of performance, is given a productivity bonus. As a result, the majority are not
reliance of these companies to the use of challenging goals. motivated to exert extra effort.
Goals are attainable if they are to be set. If they are not, then workers will only be
discouraged to perform it all.
Goals must be stated in quantitative terms whenever possible. When exact figures Type of Benefit Feature
to be met are set, understanding is facilitated and workers are motivated to 1. Monthly Pay depends on qualification of the employee
perform. 2. 13th month pay given at mid-year
There must be a time-limit set for goals to be accomplished. 3. 14th month pay given at yearend
The more relevant the goals are to the company’s mission, the more support it 4. Housing allowance given to permanent employee
can generate from various levels of employment in the organization. 5. Sick leave benefits 15 days a year with pay
Goal Commitment. When individuals or groups are committed to the goals they 6. Vacation leave benefits 15 days a year with pay
are supposed to achieve, there is a chance that they will be able to achieve them. 7. Pension plan given to permanent employees
Work Behavior. Goals influence behavior in terms of direction, effort, 8. Paid vacation trip given to employees with outstanding
persistence, and planning. When an individual is provided with direction, performance
performance is facilitated. In trying to attain goals that are already indicated, the 9. Health insurance given to permanent employees
individual is provided with a direction to exert more effort. The identification of 10. Accident insurance given to permanent employees
more goals provides a reason for an individual to persist in his efforts until the
Figure. An Array of Monetary and Other Incentives for Employees
goal is attained.
Once goals are set, the first important input to planning is already in place.
Feedback Aspects. Feedback provides the individuals with a way of knowing
Motivation through Employee Participation
how far they have gone in achieving objectives. Feedback also facilitates the
When employees participate in deciding various aspects of their jobs,
introduction of corrective measures whenever they are found to be necessary.
the personal involvement, oftentimes, is carried up to the point where the task is
completed.
The specific activities where employees may participate are as
TECHNIQUES IN MOTIVATION
follows:
Individual or groups of individuals may be motivated to perform
1. setting goals
through the use of various techniques. These techniques may be classified as
2. making decisions
follows:
3. solving problems, and
1. motivation through job design
4. designing and implementing organizational changes.
2. motivation through rewards
3. motivation through employee participation
The more popular approaches to participation include the following:
4. other motivation techniques for the diverse workforce
1. quality control circles
2. self-managed teams
Motivation through Job Design
A person will be highly motivated to perform if he is assigned to a job
Quality Control Circle. A method of direct employee participation is the quality
he likes. The first requisite, however, is to design jobs that will meet the
control circle (QCC). The objective of the QCC is to increase productivity and
requirements of the organization and the persons who will occupy them. Job
quality of output.
design may be defined as specifying the task that will constitute a job for an
The circle consists of a group of three to ten employees usually doing
individual or a group.
related work, who meet at regular intervals to identify problems and discuss
In motivating through the use of job design, two approaches may be
solutions.
used: fitting people to jobs or fitting jobs to people.
The circle forwards their recommendations to management, which in
turn, makes decisions on its adaptation.
Fitting People to Jobs. Routine and repetitive tasks make workers suffer from
chronic dissatisfaction. To avoid this, the following remedies are adapted: Quality circle members
Quality circle members
1. Realistic job previews – where management provides honest prepare solutions and
explanations of what a job actually entails. brainstorm, gather data,
2. Job rotation – where people are moved periodically from one recommendations.
specialized job to another. and establish cause and
3. Limited exposure – where a worker’s exposure to a highly fragmented effect.
and tedious job is limited.

Fitting Jobs to People. Instead of changing the person, management may

consider changing the job. This may be achieved with the use of the following:
1. Job enlargement – where two or more specialized tasks in a work flow
sequence is combined into a single job. Results are measured
2. Job enrichment – where efforts are made to make jobs more
interesting, challenging, and rewarding. and feedback, Management considers
Motivation through Rewards
recognition and rewards quality circle
Rewards consist of material and physiological benefits to employees given to quality control recommendations and
for performing tasks in the workplace. Properly administered reward systems can
improve job performance and satisfaction. circle members. makes decisions.
Rewards may be classified into two categories:
1. Extrinsic – those which refer to payoff granted to the individual by
another party. Examples are money, employee benefits, promotion,
Figure. The Quality Control Circle Process
recognition, status symbols, etc.
2. Intrinsic – those which are internally experienced payoffs which are
self-granted. Examples are sense of accomplishment, self-esteem, and
Self-Managed Teams. When workers have reached a certain degree of
self-actualization.
discipline, they may be ripe for forming self-managed teams. Also known as
autonomous work groups or high performance teams, self-managed teams take on
traditional managerial tasks as part of their normal work routine.

11
 The self-managed teams work on their own, turning out a complete
product or service and receiving minimal supervision from managers who act
more as facilitators than supervisors.
Requisites to Successful Employee Participation Program
To succeed, an employee participation program will require the
following:
1. a profit-sharing or gain-sharing plan
2. a long term employment relationship with good job security
3. a concerted effort to build and maintain group cohesiveness
4. protection of the individual employee’s rights.
Other Motivation Techniques
The advent of theories on individual differences and biological clock
of human beings put pressure on the engineer manager to adapt other motivation
technique whenever applicable. These refer to the following:
1. flexible work schedules
2. family support services
3. sabbaticals
Flexible Work Schedule. There is an arrangement, called flextime, which allows
employees to determine their own arrival and departure times within specified
limits. For example, an engineering firm may allow one group of employees to
take the 8:00AM to 5:00PM schedule, another group takes the 9:00AM to
6:00PM schedule, and another takes the 10:00AM to 7:00PM schedule.
An alternative to this arrangement is the adoption of the forty-hour
work in four days allowing the employees to choose a day-off.
There are certain benefits that are offered by flexible work schedules,
although it is not appropriate for all situations. Nevertheless, the engineer
manager must decide when it is applicable.
Family Support Services. Employees are oftentimes burdened by family
obligations like caring for children. Progressive companies provide day care
facilities for children of employees. A multinational company in far flung Davao
province has even opened an elementary and high school within the plantation
site.
Sabbaticals. A sabbatical leave is one given to an employee after a certain
number of years of service. The employee is allowed to go on leave for two
months to one year with pay to give him time for family, recreations, and travel.
It is expected that when the employee returns for work, his motivation is
improved.
CHAPTER 8
LEADING
There are times when in spite of great difficulties, jobs are needed to
be done, projects are needed to be finished on time, and services are needed to be
provided. Employees in the production lines tend to be irritated by delays in the
arrival of necessary production materials and supplies. Workers complain when
difficult jobs are assigned to their units. These and other difficulties found in the
workplaces provide sufficient reasons for poor productivity. The situations cited
require managers with effective leadership.
Engineer managers, in whatever management level they happen to be,
are not exempted from the problem of effective leadership. If this is really so,
then they must be concerned with the management function of leading.
What is Leading?
Leading is that management function which involves influencing
others to engage in the work behaviors necessary to reach organizational goals.
The definition indicates that a person or group of persons tasked with managing a
group must assume the role performed by leaders.
While leading refers to the function, leadership refers to the process.
HOW LEADERS INFLUENCE OTHERS
Engineer managers are expected to maintain effective work forces. To
be able to do so, they are required to perform leadership roles. Leaders are said to
be able to influence others because of the power they possess. Power refers to the
ability of a leader to exert force on another.
Bases of Power
The power possessed by leaders may be classified according to the
various bases. They are as follows:
1. legitimate power
2. reward power
3. coercive power
4. referent power
5. expert power
Legitimate Power. A person who occupies a higher position has legitimate
power over persons in lower positions within the organization. A supervisor, for
instance, can issue orders to the workers in his unit. Compliance can be expected.
Reward Power. When a person has ability to give rewards to anybody who
follows orders or requests, he is said to have reward power. Rewards may be
classified in two forms: material and psychic.
Material rewards refer to money or other tangible benefits like cars,
house and lot, etc. Psychic rewards consist of recognition, praises, etc.
12
Coercive Power. When a person compels another to comply with orders through
threats or punishment, he is said to possess coercive power. Punishment may take
the form of demotion, dismissal, withholding of promotion, etc.
Referent Power. When a person can get compliance from another because the
latter would want to be identified by the former, that person is said to have
referent power.
Expert Power. Experts provide specialized information regarding their specific
lines of expertise. This influence, called expert power, is possessed by people
with great skills in technology.
The expert power exercised by environmental scientists was enough to
force governments throughout the world to pass legislations favorable to
environmental protection.
THE NATURE OF LEADERSHIP
Leadership may be referred to as the process of influencing and
supporting others to work enthusiastically toward achieving objectives.
Leadership is expected of any manager in charge of any unit or division.
One cannot expect a unit or division to achieve objectives in the
absence of effective leadership. Even if a leader is present, but if he is not
functioning properly, no unit or division objectives can be expected to be
achieved.
Traits of Effective Leaders
There are certain leadership traits identified by researchers and which
may be useful in developing effective leaders. These traits are as follows:
1. a high level of personal drive
2. the desire to lead
3. personal integrity
4. self-confidence
5. analytical ability or judgment
6. knowledge of the company, industry or technology
7. charisma
8. creativity
9. flexibility
Personal Drive. Persons with drive are those identified as willing to accept
responsibility, possess vigor, initiative, persistence, and health. Drive is a very
important leadership trait because of the possibility of failure in every attempt to
achieve certain goals. If a chosen way to reach a goal is not successful, a leader
finds another way to reach it, even if it precedes a succession of failed attempts.
This will, of course, require a high level of personal drive from the leader.
The Desire to Lead. There are some persons who have all the qualifications for
leadership, yet they could not become leaders because they lack one special
requirement: the desire to lead.
Even if they are forced to act as leaders, they will not be effective because their
efforts will be half-hearted. Leaders with a desire to lead will always have a
reservoir of extra efforts which can be used whenever needed.
Personal Integrity. A person who is well-regarded by others as one who has
integrity possesses one trait of a leader. One who does not have personal integrity
will have a hard time convincing his subordinates about the necessity of
completing various tasks. If this is the case, the leader will, then, resort to
exercising his authority and getting things done entirely by the use of threat or
coercive powers vested in him by virtue of the rank and position he occupies in
the hierarchy.
Integrity means and includes honesty, honor, incorruptibility, rectitude,
righteousness, uprightness, and similar virtues.
Self-Confidence. The activities of leaders require moves that will produce the
needed outputs. The steps of conceptualizing, organizing, and implementing will
be completed if sustained efforts are made. For the moves to be continuous and
precise, self-confidence is necessary.
Analytical Ability. Leaders are, oftentimes, faced with difficulties that prevent
the completion of assigned tasks. A subordinate, for instance, may have a record
of continually failing to produce the needed output. A leader with sufficient skill
to determine the root cause of the problem may be able to help the subordinate to
improve his production.
The ability to analyze is one desirable trait that a leader can use to tide him over
many challenging aspects of leadership.
Knowledge of the Company, Industry or Technology. A leader, who is well-
informed about his company, the industry where the company belongs, and the
technology utilized by the industry, will be in a better position to provide
directions to his unit.
Charisma. When a person has sufficient personal magnetism that leads people to
follow his directives, this person is said to have charisma. When used properly,
charisma will help the leader in achieving his goals. With some adjustments,
subordinates may be expected to do their tasks willingly.
Creativity. Creativity is define as the ability to combine existing data,
experience, and preconditions from various sources in such a way that the results
will be subjectively regarded as new, valuable, and innovative, and as a direct
solution to an identified problem situation.
Flexibility. People differ in the way they do their work. One will adapt a different
method from another person’s method. A leader, who allows this method as long
as the required outputs are produced, is said to be flexible.
There is wisdom in being flexible. It allows the other means of achieving goals
when the prescribed manner is not appropriate.
Leadership Skills
Leaders need to have various skills to be effective. They are:
1. technical skills
 2. human skills, and
3. conceptual skills
Figure. Leadership Skills and Their Use at Various Management Levels
Technical Skills. These are skills the leader must possess to enable him to
understand and make decisions about work process, activities, and technology.
Technical skill is the specialized knowledge needed to perform a job. When the
leader has the technical skill related to his field of responsibility, he will be more
confident in performing his functions.
Human Skills. These skills refer to the ability of a leader to deal with people,
both inside and outside the organization. Good leaders must know how to get
along with people, motivate them, and inspire them.
Apart from motivating, human skills include coaching, communicating, morale
development, help and supportiveness, and delegating.
Conceptual Skills. These skills refer to the ability to think in abstract terms, to
see how parts fit together to form the whole. A very basic requirement for
effective implementation is a clear and well-expressed presentation of what must
be done. A leader without sufficient conceptual skills will fail to achieve this.
BEHAVIORAL APPROACHES TO LEADERSHIP STYLES
Those in positions of leadership exhibit a pattern of behavior that is
unique and different from other patterns. This total pattern of behavior is called
leadership style.
There are several approaches used in classifying leadership styles.
They are as follows:
1. According to the ways leaders approach people to motivate them.
2. According to the way the leader uses power.
3. According to the leader’s orientation towards task and people.
Figure. Behavioral Approaches to Leadership Styles
Ways Leaders Approach People
There are two ways a leader may approach people to motivate them.
They are: (1) positive leadership and (2) negative leadership.
When the leader’s approach emphasizes the rewards, the style is
positive leadership. The reward may be economic, like increase in monthly
salary, or it may be noneconomic like membership in an advisory committee.
When punishment is emphasized by the leader, the style is said to be
negative leadership. The punishment may take the form of reprimand,
suspension, or dismissal.
Leaders, sometimes, alternately use positive and negative leadership
depending on the characteristics of the individual subordinates.
Ways Leaders Uses Power
Leadership styles also vary according to how power is used. They are
as follows: (1) autocratic, (2) participative, and (3) free-rein.
Autocratic Leaders. Leaders who make decisions themselves, without
consulting subordinates are called autocratic leaders. Motivation takes the form
of threats, punishment, and intimidation of all kinds.
The autocratic style is effective in emergencies and when absolute
followership is needed. An example is a civil engineer in charge of constructing a
13
temporary bridge over one that has been currently damaged. The disadvantage of
autocratic leadership is that the leader receives little, if any, information and ideas
from his people as inputs into his decision-making.
Participative Leaders. When a leader openly invites his subordinates to
participate or share in decisions, policy-making and operation methods, he is said
to be a participative leader.
The advantage of participative leadership is that it generates a lot of
good ideas. Another advantage is the increased support for decisions and the
reduction of the chance that they will be unexpectedly undermined.
The disadvantage of participative leadership is that it is time-
consuming and frustrating to people who prefer to see a quick decision reached.
Free Rein. Leaders. Leaders who set objectives and allow employees or
subordinates relative freedom to do whatever it takes to accomplish these
objectives are called free-rein leaders. They are also referred to as laissez-faire
leaders. This leadership style is most applicable to certain organizations manned
by professionals like doctors and engineers.
If free-rein leadership fits the situation, there is full managerial
delegation resulting to optimum utilization of time and resources. This happens
because many people are motivated to full effort only if given this kind of free-
rein.
The weakness of free-rein leadership is that there is very little
managerial control and a high degree of risk. If the leader does not know well the
competence and integrity of his people and their ability to handle this kind of
freedom, the result could be disastrous.
Leaders Orientation toward Tasks and People
Leaders may be classified according to how they view tasks and
people. Consequently, a leader may either be: (1) employee oriented or (2) task
oriented.
Employee Orientation. A leader is said to be employee-oriented when he
considers employees as human beings of intrinsic importance and with individual
and personal needs to satisfy.
Task Orientation. A leader is said to be task-oriented if he places stress on
production and technical aspects of the job and the employees are viewed as the
means of getting the work done.
CONTINGENCY APPROACHES TO LEADERSHIP STYLE
The contingency approach is the effort to determine trough research
which managerial practices and techniques are appropriate in specific situations.
The various contingency approaches are as follows:
1. Fiedler’s Contingency Model
2. Hersey and Blanchard’s Situational Leadership Model
3. Path-Goal Model of Leadership
4. Vroom’s Decision Making Model
Fiedler’s Contingency Model
According to Fred Fiedler, leadership is effective when the leader’s
style is appropriate to the situation. The situational characteristics are determined
by three principal factors:
1. the relations between leaders and followers
2. the structure of the task, and
3. the power inherent in the leader’s position
The situational characteristics may vary from organization to
organization. To be effective, the situation must fit the leader. If this is not so, the
following may be tried:
1. Change the leader’s trait or behavior
2. Select leaders who have traits or behaviors fitting the situation
3. Move leaders around in the organization until they are in positions
that fit them
4. Change the situation
Hersey and Blanchard’s Situational Leadership Model
The situational leadership model developed by Hersey and Blanchard
suggest that the most important factor affecting the selection of a leader’s style is
the development (or maturity) level of subordinate. The leader should match his
or her style to this maturity level.
Maturity has two components:
1. job skills and knowledge
2. psychological maturity
Style 1: Directing – is for people who lack competence but are enthusiastic and
committed. They need direction and supervision to get them started.
Style 2: Coaching – is for people who have some competence but lacks
commitment. They need direction and supervision because they’re still relatively
inexperienced. They also need support and praise to build their self-esteem, and
involvement in decision-making to restore their commitment.
Style 3: Supporting – is for people who have competence but lacks confidence
or motivation. They do not need much direction because of their skills, but
support is necessary to bolster their confidence and motivation.
Style 4: Delegating – is for people who have both competence and commitment.
They are able and willing to work on a project by themselves with little
supervision or support.
DEVELOPMENT STAGE RECOMMENDED STYLE DEGREE OF
1. Low ability + Low willingness Style 1 – DIRECTING – structure, SYMBOL DECISION-MAKING STYLE SUBORDINATE
control and supervise PARTICIPATION
2. Low ability + High willingness Style 2 – COACHING – direct and AUTOCRATIC LEADER
support Leader solves the problem or makes the
3. High ability + Low willingness Style 3 – SUPPORTING – praise, A-1 decision himself using available None
listen, and facilitate information.
4. High ability + High Willingness Style 4 – DELEGATING – turn-over Leader obtains necessary information
A-2 Low
responsibility for day-to-day decision- from subordinates, then decides.
making CONSULTATIVE LEADER
Figure. Development Stage of Subordinates and Recommended Leadership Leader approaches subordinates
Style C-1 individually getting their ideas then Moderate
makes decision.
Path-Goal Model of Leadership Leader shares the problem with
The path-goal model of leadership espoused by Robert J. House and subordinates as a group, obtaining their
C-2 Moderate
Terence R. Mitchell, stipulates that leadership can be made effective because collective ideas and suggestions, then
leaders can influence subordinate’s perceptions of their goals, personal goals, and decides.
paths to goal commitment. GROUP DIRECTED
By using the path-goal model, it is assumed that effective leaders can Leader shares the problem with
enhance subordinate motivation by: subordinates as a group. Lets the group
G-1 High
1. clarifying the subordinate’s perception of work goals generate and evaluate alternative
2. linking meaningful rewards with goal attainment solutions, and then collectively decides.
3. explaining how goals and desired rewards can be achieved Figure. Alternative Decision Making Styles in the Vroom Model

CHAPTER 9
CONTROLLING
The long-term existence of many companies, most often, is placed in
jeopardy when some aspects of their activities go out of control. Consider the
following examples:
The tragedy that happened at the Ozone Disco in March 18, 1996
clearly manifested management’s lack of control over day-to-day operations of
the firm. Even the failure to detect the violations in the Building Code spells lack
of effective government control.
The management of a telephone company could not stop the
unauthorized use of lines assigned to many of its subscribers. Customers become
angry when they are billed for calls they never made.
The examples presented constitute a very small percentage of
unwanted occurrences that happen everyday in the business world. Apart from
the destruction of lives and property, normal business operations are hampered
causing discontinuities in employment and the provision of products and services.
These could not have happened if only adequate controls were instituted.

WHAT IS CONTROLLING?
Controlling refers to the process of ascertaining whether
organizational objectives have been achieved; if not, why not; and determining
what activities should then be taken to achieve objectives better in the future.
Controlling completes the cycle of management functions. Objectives
and goals that are set at the planning stage are verified as to achievement or
completion at any given point in the organizing and implementing stages. When
expectations are not met at scheduled dates, corrective measures are usually
undertaken.

Figure. The Path-Goal Process
Leadership Styles. The leadership styles which may be used by path-goal
proponents are as follows:
1. Directive leadership – where the leader focuses on clear task
assignments, standards of successful performance, and work
schedules.
2. Supportive leadership – where subordinates are treated as equals in a
friendly manner while striving to improve their well-being.
3. Participative leadership – where the leader consults with subordinates
to seek their suggestions and then seriously considers those
suggestions when making decisions.
4. Achievement-oriented leadership – where the leader set challenging
goals emphasize excellence, and seek continuous improvement while
maintaining a high degree of confidence that subordinates will meet
difficult challenges in a responsible manner.
Vrrom’s Decision-Making Model
Vroom’s model of leadership is one that prescribes the proper
leadership style for various situations, focusing on the appropriate degrees of
delegation of decision-making authority.
Five distinct decision-making styles are identified under the Vroom
model. Two of them are autocratic, two others are consultative, and one is group
directed.
IMPORTANCE OF CONTROLLING
When controlling is properly implemented, it will help the
organization achieve its goal in the most efficient and effective manner possible.
Deviations, mistakes, and shortcomings happen inevitably. When they
occur in the daily operations, they contribute to unnecessary expenditures which
increase the cost of producing goods and services. Proper control measures
minimize the ill effects of such negative occurrences.
The importance of controlling may be illustrated as it is applied in a
typical factory. If the required standard daily output for individual workers is 100
pieces, all workers who do not produce the requirement are given sufficient time
to improve; if no improvements are forthcoming, they are asked to resign. This
action will keep the company keep its overhead and other costs at expected
levels. If no such control is made, the company will be faced with escalating
production costs, which will place the viability of the firm in jeopardy.
STEPS IN THE CONTROL PROCESS
The control process consists of four steps, namely:
1. establishing performance objectives and standards
2. measuring actual performance
3. comparing actual performance to objectives and standards, and
4. taking necessary action based on the results of the comparison
Establishing Performance Objectives and Standards
In controlling, what has to be achieved must first be determined.
Examples of such objectives and standards are as follows:
1. Sales targets – which are expresses in quantity or monetary terms;
2. Production targets – which are expresses in quantity or quality;
3. Worker attendance – which are expressed in terms of rate of absences;
4. Safety record – which is expressed in number of accidents for given
periods;

14
 5. Supplies used – which are expressed in quantity or monetary terms for
given periods.
Once objectives and standards are established, the measurement of
performance will be facilitated. Standards differ among various organizations. In
construction firms, project completion dates are useful standards. In chemical
manufacturing firms, certain pollution measures form the basis for standard
requirements.
After the performance objectives and standards are established, the
methods for measuring performance must be designed. Every standard
established must be provided with its own method for measurement.
Figure. Steps in the Control Process
Measuring Actual Performance
There is a need for measuring actual performance so that when
shortcomings occur, adjustments could be made. The adjustments will depend on
the actual findings.
The measuring tools will differ from organization to organization, as
each have their own unique objectives. Some firms, for instance, will use annual
growth rate as standard basis, while other firms will use some other tools like the
market share approach and position in the industry.
Comparing Actual Performance to Objectives and Standards
Once actual performance has been determined, this will be compared
with what the organization seeks to achieve. Actual production output, for
instance, will be compared with the target output. This may be illustrated as
follows:
A construction firm entered into a contract with the government to
construct a 100 kilometer road within ten months. It would be, then, reasonable
for management to expect at least 10 kilometers to be constructed every month.
As such, this must be verified every month, or if possible, every week.
Taking Necessary Action
The purpose of comparing actual performance with the desired result
is to provide management with the opportunity to take corrective action when
necessary.
If in the illustration cited, the management of the construction firm
found out that only 15 kilometers were finished after two months, then, any of the
following actions may be undertaken:
 hire additional personnel
 use more equipment, or
 require overtime
TYPES OF CONTROL
Control consists of three distinct types, namely:
1. feedforward control
2. concurrent control
3. feedback control
Feedforward Control
When management anticipates problems and prevents their
occurrence, the type of control undertaken is called feedforward control. This
type of control provides the assurance that the required human and nonhuman
resources are in place before operations begin. An example is provided as
follows:
The manager of a chemical manufacturing firm makes sure that the
best people are selected and hired to fill jobs. Materials required in the production
process are carefully checked to detect defect. The foregoing control measures
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are designed to prevent wasting valuable resources. If these measures are not
undertaken, the likelihood that problems will occur is always present.
Concurrent Control
When operations are already ongoing and activities to detect variances
are made, concurrent control is said to be undertaken. It is always possible that
deviations from standards will happen in the production process. When such
deviations occur, adjustments are made to ensure compliance with requirements.
Information on the adjustments is also necessary inputs in the pre-operation
phase.
Examples of activities using concurrent control are as follows:
The manager of a construction firm constantly monitors the progress
of the company’s projects. When construction is behind schedule, corrective
measures like the hiring of additional manpower are made.
The production manager of an electronics manufacturing firm inspects
regularly the outputs consisting of various electronics products coming out of the
production line.
Feedback Control
When information is gathered about a completed activity, and in order
that evaluation and steps for improvement are derived, feedback control is
undertaken. Corrective actions aimed at improving future activities are features of
feedback control.
Feedback control validates objectives and standards. If
accomplishments consist only of a percentage of standard requirements, the
standard may be too high or inappropriate.
An example of feedback control is the supervisor who discovers that
continuous overtime work for factory workers lower the quality of output. The
feedback information obtained leads to some adjustment in the overtime
schedule.
Figure. Types of Control and their Relation to Operations
COMPONENTS OF ORGANIZATIONAL CONTROL SYSTEMS
Organizational control system is consists of the following:
1. strategic plan
2. the long-range financial plan
3. the operating budget
4. performance appraisals
5. statistical reports
6. policies and procedures
Strategic Plans
A strategic plan (discussed in Chapter 3) provides the basic control
mechanism of the organization. When there are indications that activities do not
facilitate the accomplishment of strategic goals, these activities are either set
aside, modified or expanded. These corrective measures are made possible with
the adoption of strategic plans.
The Long-Range Financial Plan
The planning horizon differs from company to company. Most firms
will be satisfied with one year. Engineering firms, however, will require longer
term financial plans. This is because of the long lead times needed for capital
projects. An example is the engineering firm assigned to construct the Light Rail
Transit (LRT) within three years. As such, the three-year financial plan will be
very successful.
The Operating Budget
An operating budget indicates the expenditures, revenues, or profits
planned for some future period regarding operations. The figures appearing in the
budget are used as standard measurements for performance.
Performance Appraisal
Performance appraisal measures employee performance. As such, it
provides employees with a guide on how to do their jobs better in the future.
Performance appraisals also function as effective checks on new policies and
programs.
 For example, if a new equipment has been acquired for the use of an
employee, it would be useful to find out if it had a positive effect on his
performance.
Statistical Reports
Statistical reports pertain to those that contain data on various
developments within the firm. Among the information which may be found in a
statistical report pertains to the following:
 labor efficiency rate
 quality control rejects
 accounts receivable
 accounts payable
 sales reports
 accident reports
 power consumption report
Policies and Procedures
Policies refer to the framework within which the objectives must be
pursued. A procedure is a plan that describes the exact series of actions to be
taken in a given situation.
An example of policy is as follows:
“Whenever two or more activities compete for the company’s attention, the client
takes priority.”
An example of a procedure is as follows:
“Procedure in the purchase of equipment:
1. the concerned manager forwards a request for purchase to the
purchasing officer
2. the purchasing officer forwards the request to top management for
approval
3. when approved, the purchasing officer makes a canvass of the
requested item; if disapproved, the purchasing officer returns the form
to the requesting manager
4. the purchasing officer negotiates with the lowest complying bidder”
It is expected that policies and procedures laid down by management
will be followed. When they are breached once in a while, management is
provided with a way to directly inquire on the deviations. As such, policies and
procedures provide a better means of controlling activities.
STRATEGIC CONTROL SYSTEMS
To be able to assure the accomplishment of the strategic objectives of
the company, strategic control systems become necessary. These systems consist
of the following:
1. financial analysis
2. financial ratio analysis
Financial Analysis
The success of most organizations depends heavily on its financial
performance. It is just fitting that certain measurements of financial performance
be made so that whatever deviations from standards are found out, corrective
actions may be introduced.
A review of the financial statements will reveal important details
about the company’s performance. The balance sheet contains information about
the company’s assets, liabilities, and capital accounts. Comparing the current
balance sheet with previous ones will reveal important changes, which in turn,
provide clues to performance.
The income statement contains information about the company’s gross
income, expenses, and profits. When also compared with previous years’ income
statements, changes in figures will help management determine if it did well.
Financial Ratio Analysis
Financial ratio analysis is a more elaborate approach used in controlling
activities. Under this method, one account appearing in the financial statement is
paired with another to constitute a ratio. The result will be compared with the
required norm which is usually related to what other companies in the industry
have achieved, or what the company has achieved in the past. When deviations
occur, explanations are sought in preparation for whatever action is necessary.
Financial ratios may be categorized into the following types:
1. liquidity
2. efficiency
3. financial leverage
4. profitability
Liquidity Ratios. These ratios assess the ability of a company to meet its current
obligations. The following ratios are important indicators of liquidity:
1. Current Ratio – this shows the extent to which current assets of the company
can cover its current liabilities. The formula for computing the current ratio is as
follows:
2. Acid-test Ratio – this is the measure of the firm’s ability to pay off short-term
obligations with the use of current assets and without relying on the sale of
inventories. The formula is as follows:
Efficiency Ratios. These ratios show how effectively certain assets or liabilities
are being used in the production of goods and services. Among the more common
efficiency ratios are:
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1. Inventory turnover ratio – this ratio measures the number of times an
inventory is turned over each year. This is computed as follows:
Financial Leverage Ratios. This is a group of ratios designed to assess the
balance of financing obtained trough debt and equity sources. Some of the more
important leverage ratios are as follows:
1. Debt to Total Assets Ratio – this ratio shows how much of the firm’s assets
are financed by debt. It may be computed by using the following formula:
2. Times Interest Earned Ratio – this ratio measures the number of times that
earnings interest and taxes cover or exceed the company’s interest expense. It
may be computed by using the following formula:
Times Interest Profit Before Tax + Interest Expense
Earned Ratio =
Interest Expense
Profitability Ratios. These ratios measures how much operating income or net
income a company is able to generate in relation to its assets, owner’s equity, and
sales. Among the more notable profitability ratios are as follows:
1. Profit Margin Ratio – this ratio compares the net profit to the level of sales.
The formula used is as follows:
2. Return on Assets Ratio – this ratio shows how much income the company
produces for every peso invested in assets. The formula used is as follows:
3. Return on Equity Ratio – this ratio measures the returns on the owner’s
investment. It may be arrived at by using the following formula:
IDENTIFYING CONTROL PROBLEMS
Recognizing the need for control is one thing, actually implementing
it is another. When operations become complex, the engineer manager must
consider useful steps in controlling. There are three approaches:
1. executive reality check
2. comprehensive internal audit
3. general checklist of symptoms of inadequate control
Executive Reality Check
Employees at the frontline often complain that management imposes
certain requirements that are not realistic. One school, the Central Luzon State
University, provides a good example on how the executive reality check may be
exercised. It requires its executives to handle at least one subject load each. What
the executives will experience in the classroom will make him more responsive in
the preparation of plans and control tools.
The engineer manager of a construction firm could, once in a while,
perform the work of one of his laborers. In doing so, he will be able to see things
that he never sees inside the confines of his air-conditioned office. Because the
said action exposes the manager to certain realities, the term “executive reality
check” is very appropriate.
Comprehensive Internal Audit
An internal audit is one undertaken to determine the efficiency and
effectivity of the activities of an organization. Among the many aspects of
operations within the organization, a small activity that is not done right may
continue to be unnoticed until it snowballs into a full blown problem.
An example is the resignation of an employee after serving the
company for 15 years. After one week, another employee with ten years of
service also resigned. Both were from the same department. If after another week,
a third employee is resigning, a full investigation is in order. Even if the source of
the problem is identified, it may already have caused considerable losses to the
organization. A comprehensive internal audit aims to detect dysfunctions in the
organization before they bring bigger troubles to management.
Symptoms of Inadequate Control
If a comprehensive internal audit cannot be availed of for some reason, the use
of a checklist for symptoms of inadequate control may be used.
Some of the common symptoms are as follows:
 an unexplained decline in revenues and profits
 a degradation of service (customer complaints)
 employee dissatisfaction (complaints, grievances, turnover)
 cash shortages caused by bloated inventories or delinquent accounts receivable
 idle facilities or personnel
 disorganized operations (work flow bottlenecks, excessive paperwork)
 excessive costs
 evidence of waste and efficiency (scrap, rework)
It must be noted that behind every symptom is a problem waiting to be solved.
Unless this problem is clearly identified, no effective solution may be derived. Nevertheless,
problems are easily recognized if adequate control measures are in place.