Chapter 4-5:

ENGINEERING MANAGEMENT Organizing Technical Activities

Staffing the engineering
oraganization
ORGANIZING IS…
Is a management function which refers to “the structuring of
resources and activities to accomplish objectives in an efficient
and effective manner”.
The identification and classification of required activities.
The grouping of similar activities necessary to attain objectives.
The assignment of each group to a manager with the authority
necessary to supervise it.
THE LOGIC OF ORGANIZING
1. Establishing enterprise objectives
2. Formulating supporting objectives, policies, and
plans
3. Identifying, analyzing, and classifying the
activities necessary to accomplish these objectives
4. Grouping these activities in light of the human
and material resources
5. Delegating to the head of each group the
authority necessary to perform the activities
6. Tying the groups together horizontally and
vertically, though authority relationships and
information flows.
THE PURPOSE OF THE STRUCTURE
1. It defines the relationship between tasks and authority for individuals and
departments.
2. It defines formal reporting relationships, the number of levels in the hierarchy of
the organization, and the span of control.
3. It defines the groupings of individuals into departments and departments into
organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tasks) directions.
CONSIDERATIONS IN STRUCTURING
1. Division of labor – determining the scope of work and how it is combined w/ a job
2. Delegation of authority – assigning decision-making authority to subordinates.
3. Departmentation – the grouping of related jobs, activities, or processes into major
organizational subunits.
4. Span of control – the number of people who report directly to a given manager
5. Coordination – the linking of activities in the organization that serves to achieve a
common goal or objectives.
THE ORGANIZING PROCESS
Feasibility studies and feedback
1. Enterprise
Objectives

2. Supporting 6. Horizontal and 7. Staffing

objectives, 4. Grouping of
policies, and
3. Identification and vertical coordination
activities in light of 5. Delegation of
plans classification of of authority and
resources and authority
required activities information
situations
relationships 8. Leading

9. Controlling

Part 2 Part 3 Part 4,5,6

(Planning) (Organizing) (Other Functions)
ORGANIZATION
It is a formalized intentional structure of roles or
positions.
It includes all the behaviors of all participants.
It is the total system of social and cultural
relationships.
FORMAL ORGANIZATION
Formal Organization means the intentional structure of roles in formally organized
enterprise.

A formal organization must be flexible.

Individual effort in group situation must be channeled toward group and organizational
goals.
The formal structure is described by management through:
1. Organization chart
2. Organizational manual
3. Policy manuals
INFORMAL ORGANIZATION
 It is a network of interpersonal relationships that arise when
people associate with each other.

 It can also be described as any joint personal activity without

conscious joint purpose, although contributing to joint results.

 Thus, informal organizations—relationships that do not appear

on the organization chart—might include the machine shop
group, the sixth floor crowd, the Friday evening bowling
gang, and the morning coffee “regulars”.
FORMAL AND INFORMAL ORGANIZATIONS

President

Vice president

etc.
Division
managers
etc.
Department
managers

Informal organization: Informal organization: Informal organization:

Morning coffee Bowling team Chess group
“regulars”
ORGANIZATIONAL DIVISION: THE DEPARTMENT

One aspect of organizing is the establishment

of departments.
A department is a distinct area, division, or
branch of an organization over which a
manager has authority for the performance of
the specified activities.
ORGANIZATIONAL LEVELS AND THE SPAN OF
MANAGEMENT*
While the purpose of organizing is to make human
cooperation effective, the reason for levels of
organization is the limitation of the span of management.
In other words, organizational levels exist because the is
a limit to the number of persons a manager can supervise
effectively, even thought this limit varies depending on
situations.
A wide span of management is associated with a few
organizational levels; a narrow span, with many levels.

* In much of the literature on management, this is referred to as the span of

control. Despite the widespread use of this term, in this lecture span of
management will be used, since the span is one of management and not merely
of control, which is only one function of managing.
ORGANIZATION STRUCTURES WITH NARROW
AND WIDE SPANS
Organization with narrow spans
Advantages:
· Close supervision
· Close control
· Fast communication between subordinates and
superiors
Organization with wide spans
Advantages:
· Superiors are forced to delegate
· Clear policies must be made
· Subordinates must be carefully selected
Disadvantages:
· Superiors tend to get too involved in
subordinates’ work
· Many levels of management
· High costs due to many levels
· Excessive distance between lowest level and
top level
Disadvantages:
· Tendency of overloaded superiors to become
decision bottlenecks
· Danger of superior’s loss of control
· Requires exceptional quality of managers
 FACTORS DETERMINING AN EFFECTIVE SPAN

The number of subordinates a manager can effectively

manage on the impact of underlying factors.
Aside from such personal capacities as comprehending
quickly, getting along with people, and commanding
loyalty and respect, the most important determinant is a
manager’s ability to reduce the time he or she spends with
subordinates.
FACTORS DETERMINING AN EFFECTIVE SPAN
Table 1 Factors influencing the span
of management
Narrow spans (a great deal of
time spent with subordinates)
· Little or no training of subordinates
· Inadequate or unclear authority
delegation
· Unclear plans for nonrepetitive
operations
· Nonverifiable objectives and standards
· Fast changes in external and internal
environments
· Use of poor or inappropriate
communication techniques, including
vague instructions
· Ineffective interaction of superior and
subordinate
· Ineffective meetings
· Greater number of specialties at lower
and middle levels
· Incompetent and untrained manager
· Complex task
· Subordinates’ unwillingness to assume
responsibility and reasonable risks
· Immature subordnates
Wide spans (very little time
spent with subordinates)
· Thorough training of subordinates
· Clear delegation and well-defined tasks
· Well-defined plans for repetitive
operations
· Verifiable objectives used as standards
· Slow changes in external and internal
environments
· Use of appropriate techniques, such as
proper organization structure and written
and oral communication
· Effective interaction between superior
and subordinate
· Effective meetings
· Greater number of specialties at upper
levels (top managers concerned with
external environment)
· Competent and trained manager
· Simple task
· Subordinate’s willingness to assume
responsibility and reasonable risks
· Mature subordinates
Page 1
MAJOR TYPES OF ORGANIZATIONAL STRUCTURES
1. Functional Organization – Ideal for small business, where activities doesn’t requires
large manpower. Everyone is engaged in one functional activity, such as engineering
or marketing, is grouped in to one unit.
2. Product or market organization – refers to the organization of a company by
divisions that brings together all those involved with a certain type of product or
customer.
3. Matrix Organization – employee reports in which each employee reports to both
a functional or division manager and to a project or group manager.
ORGANIZATION STRUCTURE

1. Departmentation by Enterprise Function

 It is the grouping of activities according
to the functions of the enterprise, such as
production, selling, and financing.
ORGANIZATION STRUCTURE
A functional organization grouping (in a manufacturing company)

President

Assistant to
Personnel
president

Marketing Engineering Production Finance

Market Engineering Production Financial

Research Administration planning planning

Marketing Preliminary Industrial Budgets

Planning Design engineering

Advertising
Electrical Production General
and Promotion
Engineering engineering accounting

Sales Mechanical Purchasing Cost

administration Engineering accounting

Sales Hydraulic Tooling Statistics and

Engineering data
processing

Packaging General
production

Quality
Control

Advantages: Disadvantages:
· Logical reflection of functions · De-emphasizes overall company objectives
· Maintains power and prestige of major · Overspecializes and narrows viewpoints of
functions key personnel
· Follows principle of occupational · Reduces coordination between functions
specialization · Responsibility for profits is at the top only
· Simplifies training · Slow adaptation to changes in the
· Furnishes means of tight control at the top environment
· Limits development of general managers
ORGANIZATION STRUCTURE

2. Departmentation by Territory or Geography

 It is the grouping of activities by area or
territory that is common in enterprises
operating over wide geographic areas.
ORGANIZATION STRUCTURE
A territorial, or geographic, organization grouping (in a manufacturing company)
President

Marketing Personnel Purchasing Finance

Western Southwest Central Southeast Eastern

region region region region region

Personnel

Engineering Production Accounting Sales

Advantages: Disadvantages:
· Places responsibility at a lower level · Requires more persons with general manager
· Places emphasis on local markets and problems abilities
· Improves coordination in a region · Tends to make maintenance of economical central
· Takes advantage of economies of local operation services difficult and may require services such as
· Better face-to-face communication with local personnel or purchasing at the regional level
interests · Makes control more difficult for top management
· Furnishes measurable training ground for general
managers
ORGANIZATION STRUCTURE

3. Departmentation by Customer Group

 It is the grouping of activities that reflects
a primary interest in customers.
ORGANIZATION STRUCTURE
Customer departmentation (in a large bank)
President

Community-
Corporate Institutional
city banking
banking banking

Real estate and

Agricultural
mortgage loans
banking

Advantages:
· Encourages focus on customer needs
· Gives customers the feeling that they have an
understanding supplier (banker)
· Develops expertness in customer area
Disadvantages:
· May be difficult to coordinate operations
between competing customer demands
· Requires managers and staff expert in
customers’ problems
· Customer groups may not always be clearly
defined (e.g., large corporate firms vs. other
corporate business)
ORGANIZATION STRUCTURE

4. Departmentation by Product
 It is the grouping of activities according to
products or product line, especially in
multiline, large enterprises.
ORGANIZATION STRUCTURE
A product organization grouping (in a manufacturing company)
President

Marketing Personnel Purchasing Finance

Indicator Industrial
Instrument Name
Lights Tools Title
division
Division Division

Engineering Accounting Engineering Accounting

Production Sales Production Sales

Advantages: Disadvantages:
· Places attention and effort on product line · Requires more persons with general manager
· Facilitates use of specialized capital, facilities, skills, abilities
and knowledge · Tends to make maintenance of economical central
· Permits growth and diversity of products and services services difficult
· Improves coordination of functional activities · Presents increased problem on top of management
· Places responsibility for profits at the division level control
· Furnishes measurable training ground for general
managers

* Product departmentation is also used in in nonmanufacturing companies.

ORGANIZATION STRUCTURE

5. Matrix Organization
 It is the combining of functional and
project or product patterns of
departmentation in the same organization
structure.
ORGANIZATION STRUCTURE
Matrix Organization (in engineering)

Director
Of
Engineering

Chief of Chief Chief Chief Chief

Preliminary Mechanical Electrical Hydraulic Metallurgical
Design Engineering Engineer Engineer Engineer

Project A
manager

Project B
manager

Project C
manager

Project D
manager

Advantages:
· Oriented toward end results
· Professional identification is maintained
· Pinpoints product-profit responsibility
Disadvantages:
· Conflict in organizational authority exists
· Possibility of disunity of command
· Requires a manager effective in human
relations
 LINE / STAFF AUTHORITY AND
DECENTRALIZATION

Authority and Power

Power is the ability of individuals or groups to induce or influence
the beliefs or actions of other persons or groups.
Authority is the right in a position to exercise discretion in making
decisions affecting others.
1. Line authority – a manager’s right to tell subordinates what to
do and then see that they do it.
2. Staff authority – staff specialist’s right to give advice to a
superior.
3. Functional authority – specialist’s right to oversee lower level
personnel involved in that specialty, regardless of where the
personnel are in the organization.
 BASES OF POWER
1. Legitimate Power
 It normally arises from and derives from our
cultural system of rights, obligations, and duties
whereby a “position” is accepted by people as
being “legitimate”.
2. Expertness of a person or a group
 This is the power of knowledge. Physicians,
lawyers, and university professors may have
considerable influence on others because they are
respected for their specialized knowledge.
3. Referent Power
 It is an influence that people or groups may
exercise because people believe in them and
their ideas.
BASES OF POWER
4. Reward Power
 It refers to the power that arises from the ability of
some people to grant rewards.

5. Coercive Power
 It is the power to punish, whether by firing a
subordinate or by withholding a merit pay increase.
LINE / STAFF CONCEPTS AND
FUNCTIONAL AUTHORITY
1. Scalar principle
 “The clearer the line of authority, the clearer will be the responsibility for decision making and
the more effective will be organizational communication.”

2. Line authority
 The relationship in which a superior exercises direct supervision over a subordinate.

3. Staff relationship
 It’s nature is advisory.
STAFF OFFICERS CLASSIFICATION
1. Personal staff – those individuals assigned to a specific manager to provide
needed staff services.
2. Specialized staff – those individuals providing needed staff services for the whole
organization.
COMMITTEES
A formal groups of persons formed for a specific purpose. May be informal if it
doesn’t have a function with the companies business.

Committees may be classified as follows:

1. Ad hoc committee – one created for a short-term purpose
2. Standing committee – relatively permanent committee that deals with issues on an
ongoing basis.
DECENTRALIZATION OF AUTHORITY

Decentralization is the tendency to

disperse decision-making authority in
an organized structure.
DELEGATION OF AUTHORITY
Authority is delegated when a superior gives a
subordinate discretion to make decisions.
Clearly, supervisors cannot delegate authority they
do not have, whether they are members, presidents,
vice presidents, or supervisors.
DELEGATION OF AUTHORITY
The process of delegation involves:
1. Determining the results expected from a position
2. Assigning tasks to the position
3. Delegating authority for accomplishing these tasks
4. Holding the person in that position responsible for
the accomplishment of the tasks.
THE ART OF DELEGATION
Personal Attitudes toward Delegation
Receptiveness
An underlying attribute of managers who will delegate
authority is a willingness to give other people’s ideas a
chance.
Decision making always involves some discretion, and a
subordinate’s decision is not exactly the one a superior
would have made.
THE Willingness
ART OF toDELEGATION
let go
A manager who will effectively delegate
authority must be willing to release them to
make decisions to subordinates.
A major fault of some managers who move up
the executive ladder—or of the pioneer who
has built a large business from the small
beginning of, say, a garage machine shop—is
that they want to continue making decisions for
the positions they have left.
THE Willingness
ART OFto DELEGATION
allow mistakes by subordinates
Although no responsible manager would sit idly by and
let a subordinate make a mistake that would endanger
the company or the subordinate’s position in the
company, continual checking on the subordinate to
ensure that no mistakes are ever made will make true
delegation impossible.
Since everyone makes mistakes, a subordinate must be
allowed to make some, and their cost must considered
an investment in personal development.
THE Willingness
ART OFtoDELEGATION
trust subordinates
Superiors have no alternative to trusting their
subordinates, for delegation implies a trustful attitude
between them.

Willingness to establish and use broad controls

Since superiors cannot delegate responsibility for
performance, they should not delegate authority unless
they are willing to find means of getting feedback, that
is, of assuring themselves that authority is being used to
support enterprise or departmental goals and plans.
 THREE (3) ELEMENTS OF DELEGATION
1. Responsibility – means that a person is assigned
a task that he or she is supposed to carry out.

2. Authority – means that the person has the power

and the right to give orders, draws upon resources,
and do whatever else is necessary to fulfill the
responsibility.

3. Accountability – means that the subordinate’s

manager has the right to expect the subordinate to
perform the job and to take corrective action in the
event the subordinate fails to do so.
RECENTRALIZATION OF AUTHORITY AND
BALANCE AS THE KEY TO DECENTRALIZATION
Recentralization is centralization of
authority that was once decentralized;
normally not a complete reversal of
decentralization, as the authority
delegated is not wholly withdrawn.
STAFFING
It is defined as filling, and keeping filled,
positions in the organizational structure.
Work specialization – degree to which the work
necessary to achieve organizational goals is
broken down into various jobs.
Job design – specification of task activities
associated with a particular job (e.g. a job as an
administrative assistant may include typing, filing
and photocopying, or it could involve such
activities as coordinating travels and meetings,
investigating trouble spots, and making decisions
about a certain range of issues).
 STAFFING
Approaches to Job Design
Job simplification – the process of designing jobs so that
jobholders have only a small number of narrow
activities to perform.
Job rotation – practice of periodically shifting workers
through a set of jobs in a planned sequence.
Job enlargement – the allocation of a wider variety of
similar tasks to a job in order to make it more
challenging.
Job enrichment – process of upgrading the job-task mix
in order to increase significantly the potential for growth,
achievement, responsibility, and recognition.
JOB SIMPLIFICATION
Job Simplification

Worker 1 Worker 2 Worker 3

Task 1 Task 1 Task 1

JOB ROTATION
Job Rotation

Worker 1 Worker 2 Worker 3

Task 1 Task 2 Task 3

JOB ENLARGEMENT
Job Enlargement

Worker 1 Worker 2 Worker 3

Task 1,2,3 Task 1,2,3 Task 1,2,3

 MOVEMENT OF PERSONNEL
 HUMAN RESOURCE PLANNING is the systematic deployment of human resources at various levels.

 RECRUITMENT is the process of encouraging, inducing, or influencing applicants to apply for a certain
vacant position.

 SELECTION is the process of getting the most qualified applicant from among different job seekers.

 INDUCTION SELECTION providing information about the company. (Vision, Mission, Goals, Policy ,
rules, etc. and etc..

 TRAINING is the systematic development of the attitude/knowledge/behavior patterns for the adequate
performance of a given job or task.

 PERFORMANCE APPRAISAL is the measurement of employee performance.

 TRANSFER refers to the shifting of an employee from one position to another without increasing his
duties, responsibilities, or pay.

 PROMOTION refers to the shifting of an employee to a new position to which both his status and
responsibilities are increased.

 SEPARATION is either voluntary or involuntary.

HUMAN RESOURCE PLANNING
1. Forecasting
a. Time series method
b. Explanatory and causal models (regression models, econometric models, leading
indicators)
c. Monitoring methods
2. Programming
3. Evaluation and control
RECRUITMENT
Source of applicants:
1. Organization’s current employees/ in-house employees
2. Newspaper advertising
3. Schools
4. Referrals
5. Recruitment firms
6. Competitors
SELECTION WAYS OF DETERMINING THE
QUALIFICATIONS OF A JOB CANDIDATE
1. Application blanks
2. References
3. Interviews
4. Testing

Types of tests:
1. Psychological tests – includes aptitude test, performance test, personality test, and
interest test.
2. Physical examination
TRAINING AND DEVELOPMENT
Training program for Nonmanagers
1. On-the-job training
2. Vestibule school
3. Apprenticeship program
4. Special courses
Training programs for managers
1. In-basket
2. Management games
3. Case studies
TRAINING AND DEVELOPMENT
Training programs for managers (Interpersonal development)
1. Role-playing
2. Behavior modeling
3. Sensitivity training
4. Transactional analysis
Actual job knowledge
1. On-the-job experience
2. Coaching
3. Understudy
Other avenue to increase knowledge
1. Position rotation
2. Multiple management
PERFORMANCE APPRAISAL
Purpose
1. To influence in a positive manner, employee performance and development
2. To determine merit pay increase
3. To plan for future performance goals
4. To determine training and development needs
5. To assess the promotional potential of employees
WAYS OF APPRAISING PERFORMANCE
Training program for Nonmanagers
1. Rating scale method
2. Essay method
3. Management by objective method
4. Assessment center method
5. Checklist method
6. Work standards method
7. Ranking method
8. Critical-incident method
EMPLOYMENT DECISION
1. Monetary rewards
2. Promotion
3. Transfer
4. Demotion
 MOVEMENT OF PERSONNEL
OUTPLACEMENT is the process of helping people who have been
dismissed from the company to regain employment elsewhere.
LAY-OFF is a type of separation, temporary and involuntary,
usually traceable to a negative business condition
DISCHARGE is a permanent separation of an employee, at the
will of an employer, if a person is not competent in his job, guilty
of breaking rules like delinquency and insubordination, and other
violations
RESIGNATION is voluntary and permanent separation of an
employee due to due to low morale, low salary, etc.
RETIREMENT can either be voluntary or involuntary; if an
employee retires upon reaching the number of years of services in
a company as provided for by its policies or upon reaching the
age of 65.
PERFORMANCE APPRAISAL is the process of defining,
measuring, evaluating, and recording expectations from employee
performance.