es70-1

Syllabus

Course No. ES70

Course Title: Engineering Management

Course Description: The subject deals with the study of Engineering Management, as well as its basic principles. Likewise

it deals with the different functions of an engineer manager. Management cases that try to highlight management issues

are also part of the subject.

Credit: 3 units

Textbook: Engineering Management, 1st Ed. By Roberto Medina

Objectives:

1. Let the students understand the nature and concept of Engineering Management as well as the function of an

Engineer Manager.

2. Know how to apply management principles in various cases that they may then encounter in their future

profession.

3. Develop a sense of professional and ethical responsibility.

Course Center:

1. The field of Engineering Management

2. Decision Making and Planning

3. Organizing, Staffing and Communicating

4. Motivating, Leading and Controlling

5. Other related topics

Grading System:

Major Exams: 60%

Recitation/Assessment: 40%

Passing Mark: 50%

Engineering management is the activity of combining technical knowledge with the ability to organize and coordinate

worker power, materials, machinery and money.

Management – is a creative solving problem process of planning, organizing, leading (or directing) and controlling the

organizations’ resources to achieve its mission and objectives.

Requirements on engineer manager job:

1. A bachelor’s degree in engineering in some cases master’s degree in engineering or management is necessary,

2. Experience in pure engineering jobs,

3. Training in supervision,

4. Special training in engineering management.

Conditions required for one to become a successful engineering manager:

1. Ability – refers to the capacity of the person to achieve the organization’s objective efficiently and effectively.

a. Effectively – refers to the description that deals whether objectives are accomplished.

b. Efficiently – refers to the description that deals how much of the resources were used to achieve

effectiveness.

2. Motivation to manage – willingness to manage and do management job.

3. Opportunity

- There must be or finding a suitable managerial job.

- Finding a favorable climate once on the job.

DECISION MAKING

Is the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the

situation

Problem – the difference between the desired situation and the actual or present situation/condition.

Steps in Decision Making

1. Diagnose Problem

2. Evaluate the Environment

3. Articulate the problem/opportunity

4. Develop viable alternatives

5. Evaluate alternatives

6. Make a choice

7. Implement the design

8. Evaluate the results

9. Favorable Result/adopt the result OR Result is unfavorable of objective not obtained – determine the error (back

to step 4)

Engineering Firm of the Internal Environment

1. Organizational aspect

2. Marketing aspect External Environment

3. Personnel aspect Decision

4. Production aspect External Environment

5. Financial aspect

Engineering Firm of the External Environment

Firm

Government

Labor Union

Suppliers

Banks

Public

Competitors

Clients

Engineer

Approaches in Solving Problem

1. Qualitative – decision is based on subjective judgment and intuition

2. Quantitative – requires rational and analytical thinking

Quantitative Models/Techniques

1. Inventory Model

a. Economic order quantity model – involves determining the number of supplies that must be ordered

once and eliminate the repetition orders for the same period of time.

b. Production order quantity model – principle of economic order quantity model is applied to production

c. Back order – inventory model – same principle but applied to planned shortages

d. Quantity discount model – the order must be maximized to benefit from the discounts given to bulk

orders.

2. Queuing Technique/Method

a. Applicable for service companies/organizations

b. Tries to minimize the customers waiting time and the cost of service

3. Network Models – break down large and complex task into smaller and which may be managed easily. This

utilizes PERT (Project Evaluation Review Technique) and CPM (Critical Path Method).

Building Subdivision

a. Preparation of the land for the construction

b. Concreting the road

c. Electrification

d. Drainage system

4. Forecasting – Past and current information are utilized to make predictions about the future.

5. Regression – type of forecasting that analyzes the relationship of the variables/factors involved.

6. Simulation – a model is constructed is represent reality where conclusions about real life problems may be used.

7. Linear Programming – this is a technique of obtaining an optimum solutions within the bounds imposed by the

constraints upon the decision.

8. Sampling – a number of population is statistically determined and used for different activities, like research,

marketing, etc.

9. Statistical Decision Theory – a rational way to conceptualize analyze and solve problem with limited or partial

information about the decision environment.

Planning

- 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.

- A management function that involves anticipating future trends and determining the best strategies and tactics

to achieve organizational objectives.

Levels of Management and Type of Planning

Top Management Level CEO, President, V-President, General Managers, Division Heads

Strategic Planning (one year up to ten years) - The process of determining the major goals of the

organizations and the strategies and policies to achieve these goals.

Middle Management Level Functional Managers,

Intermediate Planning (six months up to two years) - The process of determining the contributions the subunits

can make with the allocated resources.

Low Management Level First Line Supervisors, Unit Managers

Operational Planning (one week up to one year) - The process of determining how specific tasks can best be

accomplished with the available resources.

Strategy – A course of action aimed at assuring that the organization will achieve its objectives.

Tactic – A short course of action taken by management to adjust to the negative internal or external influences.

The Organization and the Types of Planning

President/

General Manager Top Management Level

Strategic Planning

Marketing Manager Production Manager Finance Manager Personnel Manager

Industrial

Engineering

Manager

Factory Manager Quality Control

Manager

Intermediate Planning

Operational Planning

Middle Management Level

Low Management Level

The Planning Process

1. Setting Organizational, Divisional or Unit Goal

Level of Management Type of Goal

Company 25% return in investment

Division Increase number of projects

Unit Increase number of project engineers

2. Determining the strategy or tactic.

3. Determining the Resources needed.

4. Setting standard – the quantitative or qualitative measuring device designed to help monitor the performance of

capital goods, people or processes.

Types of Plan

1. Functional Area Plans – the focus is on the function involved.

a. Production Plan

b. Marketing Plan

c. Financial Plan

d. Human Resources Development Plan

2. Plans with Time Horizon

a. Short-range plan (less than one year)

b. Long-range plan (more than one year)

3. Plans According to Frequency of Use

a. Standing Plan – policies, procedures, rules

b. Single Use Plan – progress, projects, budget

Types of Plan

Functional Area Plan Plan with Time Horizon Plan According to Frequency of Use

Production Plan Marketing Plan Financial Plan

Short-range Plan Long-range Plan

Standing Plan Single Use Plan

Policy Procedure Rule

Progress Projects Budget

December 19, 2013

Parts of Strategic Plan

1. Company or Corporate Mission

o A strategic statement that defines why an organization exists, its philosophy of management and its

purpose as distinguished from other similar organization in terms of products, services and markets.

2. Goals or Objectives

o Things the company desires to achieve.

o Precise statements of desired results.

3. Strategies

ORGANIZING

- A management function that refers to structuring of activities and resources to accomplish objectives efficiently

and effectively.

Structure

- The product of organizing process.

- The arrangement or relationship of positions in an organization.

Purposes of Structure

1. It defines the groupings of individuals and departments into an organization.

2. It defines the formal reporting relationship, the number of levels (1st, 2nd, 3rd, etc.) of the hierarchy of the

organization and span of control.

3. It defines the relationship between authorities and tasks for individuals and departments.

4. It defines the system to effect coordination of efforts between the horizontal (task) and vertical (authorities)

direction.

Division of Labor

- Determination of the scope of work and how it is combined in a job.

Departmentation

- Groupings of related jobs, activities and processes into major organization subunits.

Delegation of Authority

- Assignment of various degrees of decision making authority to subordinates.

Span of Control

- Refers to the number of people reporting directly to a given manager.

FORMAL ORGANIZATION

- It planned structure and it represents a deliberate attempt to establish patterned relationship among

components that will tend to achieve the organizations objectives effectively.

Organizational Chart

- It tries to describe or give information about the official positions and the formal lines of authority.

Informal Groups

- These are formed spontaneously because of friendship, common interest, etc.

o Friendship

o Common Interest

o Proximity

o Need of Satisfaction

o Collective Power

o Group Goals (consumer society, gym enthusiasts, sports, etc.)

Friendship

Form

Informal Groups

Common Interest

Proximity

Need of Satisfaction

Join in Collective Power

Group Goals (consumer society, gym enthusiasts, sports, etc.)

Types of Organization According to Structure

1. Functional Organization – it is a form of departmentation, in which persons engage in same functional activities

like engineering or marketing, are grouped into one.

2. Project or Market Organization – it is organizing a company by division that brings together all those involved in

the same product or market.

President

Vice President for Finance

Vice President for Construction

Vice President for Marketing

Vice President for Human Resources

Pre

sid

ent

Vice President for

Government Accounts

Finance

Marketing

Construction

Human Resources

Vice President for Industrial

Accounts

Finance

Marketing

Construction

Human Resources

Vice President for Residential

Accounts

Finance

Marketing

Construction

Human Resources

3. Matrix Organization – is a form of structure, wherein an employee reports both directly to a functional or

division manager and to a project or group manager.

Committee(s)

- Formal group of employees for a specific or particular purpose.

Types:

1. Ad Hoc Committee – it is a short term period committee for a limited life, e.g. Committee in charge of

anniversary festival.

2. Standing Committee – a committee for on-going issues or reoccurring conditions, e.g. grievance committee

that handles disputes among the members/employees themselves.

Pre

sid

en

t Vice-President for Finance

Vice President for Construction

Project Manager

Project X Manager

Project Y Manager

Project Z Manager

Construction Manager

Engr. X

Engr. Y

Engr. Z

Purchasing Manager

Purchasing Specialist

Purchasing Specialist

Purchasing Specialist

Contract Administration Manager

Contract Negotiator

Contract Negotiator

Contract Negotiator

Vice President for Human Resources

Types of Authority:

1. Line Authority – the right of the manager to tell him/her subordinates what to do and see that they did it.

2. Staff Authority – staff specialist’s right to give advice to the manager.

3. Functional Authority – the right of the employee to oversee lower level employees involve in the same specialty,

regardless where that employee is located in the organization.

STAFFING

- A management function that determines the human resource needs, recruits, selects, trains, and develops

human resources for the job created by an organization.

- Is a procedure that involves the following steps”

1. Human resource planning – which involves:

a. Forecasting – determination of the possible required or expected

b. Programming

c. Evaluation and Control – determining whether the activities conducted are in accordance with the

desired standard

2. Recruitment – the attracting of qualified applicants to apply for the vacant positions in the company so that

those best suited serve the company may be selected.

Sources of Applicants/Ways of Attracting or Hiring Applicants

a. Newspaper

b. Internet

c. School

d. Referrals

e. Recruitment Firms/Agencies

f. Current Employees of the Company – Internal Recruitment

3. Selection – the act of choosing the best suited for the job.

There are several tests conducted:

a. Physical Examination

b. Psychological Tests

i. Aptitude Test – determination of person’s capability or potentials

ii. Personality Test

iii. Performance Test

iv. Interest Test

Ways of determining the qualifications of the applicants:

a. Application Blanks

b. Interviews – question and answer part

c. Referrals

d. Tests

4. Induction and Orientation

a. Induction – the newly hired employees are informed about the company (necessary and relevant

information like history, product, etc.) In addition, said employees are also informed about duties and

responsibilities, and their benefits.

b. Orientation – the newly hired employees are introduced to their co-workers and working environments.

They are also informed of the policies, procedures, roles, etc.

5. Training and Development

a. Training – Learning designed to improve the present performance on the job.

i. Training for non-managers

1. On-the-job Training

2. Vestibule School – simulated situation similar to actual working condition/workplace

3. Apprenticeship – other than the actual wherein there is a failure, there is a

supplemental classroom learning/instruction

4. Special Courses – enrolled in courses/additional learning at the expense of the company

ii. Training for managers

1. To improve decision-making skills

a. In-basket – trainee is provided with a lot of messages, notes, telephone calls,

etc. about a particular situation and he must handle it for 1 or 2 hours.

b. Management games – act as a manager and try to transact in a similar situation

c. Case studies – study how the manager reacted to the situation, handle a

situation

2. Interpersonal relationship skill, dealing with people

a. Role-modeling/playing – workshop, assigned with roles

b. Behavior-modeling

c. Sensitivity training – trying to be aware, be sensitive to behavioral patterns

d. Transactional analysis

3. Job-knowledge

a. On-the-job experience

b. Coaching

c. Understudy

4. Organizational knowledge

a. Position Rotation

b. Multiple Management

6. Performance Appraisal – evaluation the performance of the employees for:

a. Monetary reward

b. Promotion – giving the employee a higher position, benefits, salary, and duties and responsibilities

c. Transfer – change department, similar level position and responsibilities (consult lawyer if unreasonable,

transfer must be justified)

d. Demotion – lowering the position which corresponds to a lower salary and lower responsibilities

7. Employment Decision – the result of the performance appraisal which may be a monetary reward,

promotion, transfer and demotion.

8. Separation

a. Voluntary – initiative comes from the employee, employee resigns

b. Involuntary – the manager/company terminates the employee

COMMUNICATION

- Is a process of sharing information through symbols, including words and messages.

Purposes of Communication:

1. Motivation Function – motivate employees, used to encourage

2. Information Function – a manager needs to tell his employees, or inform the manager, subordinates, superiors,

co-equal employees, clients, etc.

3. Control Function – policies, procedures, rules, regulations are followed, control subordinates, etc.

4. Emotive Function – utilized to reduce the internal effect/pressure on the part of employees, anxiety, problems,

undesirable feelings; the manager needs to connect and emphatic etc.

The Communication Process

Forms of Communication

1. Verbal – communication through hearing or sight.

a. Oral

b. Written

2. Non-verbal – communication through body language, time, space, appearance, aesthetic quality, clothing, etc.

Barriers to Communication

1. Personal Barrier – refers to communicator’s personal characteristics that prevent the effective and efficient

conveying of information, example poor hearing.

2. Physical Barrier – interferences brought by environment where communication is made.

3. Semantic Barrier – interferences resulting from misunderstanding of the symbol/message, although the same

way received as it transmitted.

SENDER

Encode

•transmit the message

RECEIVER

•the one who receives the message

Decode

•unfold the message

Accept/Reject

Feedback

Overcoming Barriers to Communication

1. Repeat the message

2. Use simplified language

3. Use multiple channel of communication

4. Ask for feedback

Techniques of Communicating for an Organization

1. Upward Communications – a communication from a lower level of authority or position to higher authority, e. g.

complaints, report performances, suggestions box, etc.

2. Downward Communications – from upper position to lower position, e. g. instructions, feedbacks, encourage,

persuade, inform about activities, newsletter, etc.

3. Parallel Communications – same-level positions, e. g. manager to manager, co-worker to co-worker

Management Information System (MIS)

- Organized system of providing past, present and projected information about the internal operations and

external intelligence for use in making decision

MIS

Marketing

Human Resources

Production

Finance

MOTIVATING

It is the act of giving incentives or reasons to the employees to work to achieve organizational objectives.

Motivation – is the process of activating behavior, sustaining and directing it towards a particular goal.

Factors Affecting Motivation

1. Willingness to do the job

2. Self-confidence to do the task

3. Need satisfaction (Will he exert additional effort to obtain additional sales for example, will it satisfy the

employee’s needs? i.e. Does he need the extra money?)

Theories of Motivation

1. Maslow’s Need Hierarchy Theory

a. There are five basic needs: physiological needs, security needs, social needs, self-esteem needs, and

self-fulfillment needs. These needs are hierarchical which means the first basic needs must be satisfied

first before the other needs.

b. Not universally accepted as entirely correct but it recognizes the fact that a person with satisfied need

will not be motivated by providing him/her the same needs.

2. Herzberg or Two-factor Theory - There are two factor that must be considered:

a. Satisfiers or motivation factors

i. Recognition, advancement, growth,

ii. Responsibility, work itself

iii. For the manager to motivate the employees, he/she should focus on providing the employees

with satisfiers or motivation factors.

b. Dis-satisfiers or hygiene factor

i. Company policy and administration, work conditions relationship with peers, salary, relationship

with subordinates security, relationship with superiors, status, personal life

ii. Elimination of dis-satisfiers does not motivate the employees but eliminate or lessen

dissatisfaction on the part of the employees.

• or Self-fulfillment Needs Self-

actualization

• Prestige, status, respect Esteem Needs

• Friendship, belonging, love Social Needs

• Freedom from harm, financial security Security Needs

• Food, shelter, water, sex, body elimination Physiological Needs

3. Expectancy Theory – the employees motivation to work depend upon his/her perception of his/her expectation

of the probability that his/her needs will be satisfied.

4. Goal-Setting Theory – the performances of employees are improved by setting objectives, deadlines or quality

standards.

TECHNIQUES OF MOTIVATION

1. Motivation Through Job-Design – specifying the tasks that constitute a job for an individual or a group.

Approaches:

a. Fitting people to jobs

i. Realistic job previews

ii. Job rotation

iii. Limited Exposure

b. Fitting jobs to people

i. Job enlargement

ii. Job enrichment

2. Motivation Through Rewards

a. Extrinsic Rewards

i. Monetary benefits

ii. Recognitions

b. Intrinsic Rewards

i. Internal experience payoffs which are self-granted. This does not come from other person but

which the individual himself feels.

3. Motivation Through Employee Participation

a. Quality control circles

b. Self-manage teams

4. Other Techniques of Motivation

a. Flexible Work Schedule

b. Family Support Services

c. Sabbatical Leave

CONTROLLING

- The process of ascertaining whether the organizational objectives have been accomplished, if not, why not, and

determining the activities that may be taken to achieve objectives better in the future.

Steps in the Control Process

1. Setting the Performance Standards and Objectives

2. Measure the actual performance

3. Comparing actual performance with the set standard and objective

4. Taking the necessary measures as a result of the comparison

Types of Control

1. Feed Forward Control – the problem in anticipated and advance solutions is provided to avoid the happening of

the problem.

2. Concurrent Control – the operation is already on-going, measures are adopted to check if there are any

problems and if any, solutions are adopted or introduced.

3. Feedback Control – the activity or operation is finished already and it is analyzed to check the problems

encountered and then solutions are crafted for the next activity/operation.

LEADING

- A management function that involves influencing others to engage in a work behavior necessary to reach

organizational objectives/goals.

The leader must have power to influence

Classification of Power

a. Legitimate Power – authority derived from the position sanctioned by or in accordance with law (e.g.

elected)

b. Reward Power – authority to give rewards or power to suspend/punish or impose sanctions to

employees.

c. Coercive Power – forceful orders (e.g. policeman, traffic enforcers), power to impose commands, or

compel.

d. Referent Power – power by a person who is identified to be associated with another person, in which,

the former person is supposedly having powers.

e. Expert Power – power derived from a specialized knowledge over a particular subject, where the

members follow the person with expertise.

Leadership – the process of influencing and supporting others to work enthusiastically toward achieving a classified goal.

Traits of an Effective Leader

1. A high personal drive

2. The desire to lead

3. Personal integrity

4. Self-confidence

5. Analytical ability or judgment

6. Knowledge of company, industry or process

7. Charisma (personal magnetism one possess to influence another person)

8. Creativity (ability to combine data, experience, preconditions from various sources in such a way that the result

is useful, regarded as new, and a solution to a problem; try to improve)

9. Flexibility

Leadership Skills

1. Technical Skills

2. Human Skills

3. Conceptual Skills

Conceptual Skills

- The ability to think in abstract terms, to see how parts fit together to form the whole.

Behavioral Approaches to Leadership Styles

Contingency Approaches to Leadership Styles

1. Fiedler’s Contingency Model – situation is considered, then leader is defined how to treat the situation.

According to this style, leadership style is effective if the leader fits the situation. The primary factors that define

the situation:

Beh

avio

ral A

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roac

hes

According to the way the leader motivates the people

Positive leadership (emphasis on rewards)

Negative leadership (emphasis on imposing sanctions, scaring,

punishment)

According to the way the leader uses his power

Autocratic leadership (absolute rule, e.g. military, effective on emergency

situations)

Participative leadership

Free-rein (requires result only, freedom how to accomplish that

result, best for highly intellectuals)

According to the leader's orientation toward task and people

Employee/people oriented

Task oriented

a. Relationship between the leader and the subordinates

b. Structure of the tasks

c. Power the leader has

If the leader does not fit the situation:

i. The traits of the leader must be changed to fit the situation

ii. Change the leader with another that fit the situation

iii. Leader may be moved or rotated within the organization

iv. Change the situation

2. Hersey and Blancher’s Situational Model – the leadership style could be defined according to the maturity

level/development level of the subordinates.

a. Directing – subordinates lacks the competence but they are enthusiastic and committed. They must be

directed.

b. Coaching – subordinates have the competence but they are not committed.

c. Supporting – subordinates have the competence but they don’t have the self-confidence and not

motivated. They need to be raised and monitored.

d. Delegating – with capacity, competence and commitment.

3. Path Goal Model of Leadership

4. Vroon’s Model